EXHIBIT 10.31

 

CHINA BASIN LANDING

 

OFFICE LEASE

 

This Office Lease (the “Lease”), dated as of the date set forth in Section 1 of
the Summary of Basic Lease Information (the “Summary”), below, is made by and
between STOCKBRIDGE/MCC-CHINA BASIN L.L.C., a Delaware limited liability company
(“Landlord”), and SIRNA THERAPEUTICS, INC., a Delaware corporation (“Tenant”).

 

SUMMARY OF BASIC LEASE INFORMATION

 

 

TERMS OF LEASE

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DESCRIPTION

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1.      

 

Date:

   March 1, 2005

2.      

 

Premises(Article1).

        

2.1    Building:

  

Wharfside Building, China Basin Landing,

185 Berry Street, San Francisco, California 94107

   

2.2    Premises:

   Approximately 4,350 rentable square feet of space located in Suite 6504 on
the sixth (6th) floor of the Building, as further set forth in Exhibit A to this
Lease.

3.

 

Lease Term

(Article 2).

        

3.1    Length of Term:

   Two (2) years.    

3.2    Lease Commencement Date:

   April 1, 2005.    

3.3    Lease Expiration Date:

   March 31, 2007.

4.

 

Base Rent (Article 3):

    

 

 

 

Period of

Lease Term

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Annual

Base Rent

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Monthly

Installment

of Base Rent

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Annual

Rental Rate

per Rentable

Square Foot

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April 1, 2005 – May 1, 2005

   $ 0.00    $ 0.00    $ 0.00

May 1, 2005 – March 31, 2006

   $ 108,750.00    $ 9,062.50    $ 25.00

April 1, 2006 – March 31, 2007

   $ 113,100.00    $ 9,425.00    $ 26.00

 

5.

 

Base Year

(Article 4):

   Calendar year 2005.

6.

 

Tenant’s Share

(Article 4):

   0.60%.

7.

 

Permitted Use

(Article 5):

   General office use consistent with a first-class office building

 

       

CHINA BASIN LANDING

[Sirna Therapeutics, Inc.]

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8.

 

Security Deposit

(Article 21):

   $9,425.00.

9.

 

Parking Passes

(Article 28):

   Two (2) unreserved parking passes.

10.

 

Address of Tenant (Section 29.18):

  

Sirna Therapeutics, Inc.

2950 Wilderness Place

Boulder, Colorado 80301

Attention: Martin Schmieg, Chief Financial Officer

(Prior to Lease Commencement Date)

 

and

 

Sirna Therapeutics, Inc.

China Basin Landing

185 Berry Street, Suite 6504

San Francisco, California 94107

Attention: Martin Schmieg, Chief Financial Officer

(After Lease Commencement Date)

11.

 

Address of Landlord

(Section 29.18):

  

McCarthy Cook & Co., LLC

China Basin Landing

185 Berry Street, Suite 140

San Francisco, California 94107

Attention: General Manager

 

with copies to:

 

McCarthy Cook & Co., LLC

5750 Wilshire Boulevard

Los Angeles, California 90036

Attention: Edward W. Cook III

 

and

 

Allen Matkins Leck Gamble & Mallory LLP

1901 Avenue of the Stars, Suite 1800

Los Angeles, California 90067

Attention: Anton N. Natsis, Esq.

12.

 

Broker(s)

(Section 29.24):

  

GVA Whitney Cressman

505 Sansome Street, Suite 300

San Francisco, California 94111

 

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CHINA BASIN LANDING

[Sirna Therapeutics, Inc.]

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ARTICLE 1

 

PREMISES, BUILDING, PROJECT, AND COMMON AREAS

 

1.1 Premises, Building, Project and Common Areas.

 

1.1.1 The Premises. Landlord hereby leases to Tenant and Tenant hereby leases
from Landlord the premises set forth in Section 2.2 of the Summary (the
“Premises”). The outline of the Premises is set forth in Exhibit A attached
hereto and each floor or floors of the Premises has the number of rentable
square feet as set forth in Section 2.2 of the Summary. Landlord and Tenant
hereby stipulate and agree that the rentable area of the Premises is as set
forth in Section 2.2 of the Summary, and such square footage shall not be
subject to remeasurement or modification. The parties hereto agree that the
lease of the Premises is upon and subject to the terms, covenants and conditions
herein set forth, and Tenant and Landlord covenant as a material part of the
consideration for this Lease to keep and perform each and all of such terms,
covenants and conditions by them to be kept and performed and that this Lease is
made upon the condition of such performance. The parties hereto hereby
acknowledge that the purpose of Exhibit A is to show the approximate location of
the Premises in the “Building,” as that term is defined in Section 1.1.2, below,
only, and such Exhibit is not meant to constitute an agreement, representation
or warranty as to the construction of the Premises, the precise area thereof or
the specific location of the “Common Areas,” as that term is defined in Section
1.1.3, below, or the elements thereof or of the accessways to the Premises or
the “Project,” as that term is defined in Section 1.1.2, below. Except as
specifically set forth in this Lease, Landlord shall not be obligated to provide
or pay for any improvement work or services related to the improvement of the
Premises. Tenant also acknowledges that neither Landlord nor any agent of
Landlord has made any representation or warranty regarding the condition of the
Premises, the Building or the Project or with respect to the suitability of any
of the foregoing for the conduct of Tenant’s business, except as specifically
set forth in this Lease. The taking of possession of the Premises by Tenant
shall conclusively establish that the Premises and the Building were at such
time in good and sanitary order, condition and repair.

 

1.1.2 The Building and The Project. The Premises are a part of the building set
forth in Section 2.1 of the Summary (the “Building”). The Building is part of an
office project known as “China Basin Landing.” The term “Project,” as used in
this Lease, shall mean (i) the Building and the Common Areas, (ii) the land
(which is improved with landscaping, subterranean parking facilities and other
improvements) upon which the Building and the Common Areas are located, and
(iii) the other office building located adjacent to the Building and the land
upon which such adjacent office building is located, and (iv) at Landlord’s
discretion, any additional real property, areas, land, buildings or other
improvements added thereto outside of the Project; provided that Tenant’s
financial obligations are not materially increased as a result thereof.

 

1.1.3 Common Areas. Tenant shall have the non-exclusive right to use in common
with other tenants in the Project, and subject to the rules and regulations
referred to in Article 5 of this Lease, those portions of the Project which are
provided, from time to time, for use in common by Landlord, Tenant and any other
tenants of the Project (such areas, together with such other portions of the
Project designated by Landlord, in its discretion, including certain areas
designated for the exclusive use of certain tenants, or to be shared by Landlord
and certain tenants, are collectively referred to herein as the “Common Areas”).
The Common Areas shall consist of the “Project Common Areas” and the “Building
Common Areas.” The term “Project Common Areas,” as used in this Lease, shall
mean the portion of the Project designated as such by Landlord. The term
“Building Common Areas,” as used in this Lease, shall mean the portions of the
Common Areas located within the Building designated as such by Landlord. The
manner in which the Common Areas are maintained and operated shall be at the
sole discretion of Landlord and the use thereof shall be subject to such rules,
regulations and restrictions as Landlord may make from time to time. Landlord
reserves the right to close temporarily, make alterations or additions to, or
change the location of elements of the Project and the Common Areas; provided
that Landlord shall use commercially reasonable efforts to minimize interference
with Tenant’s use of, and access to, the Premises and the Common Areas.

 

1.2 Expansion of the Premises. In the event Tenant desires to lease additional
space in the Project, Tenant shall notify Landlord of Tenant’s space requirement
and Landlord shall use commercially reasonable efforts to cooperate with Tenant
to find suitable additional space in the

 

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[Sirna Therapeutics, Inc.]

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Project, subject to availability. Such additional space may be added to the
Premises, or, upon agreement by the parties, may be provided in connection with
a relocation of the Premises, at Tenant’s sole cost and expense, to other larger
space in the Project. Tenant’s lease of any space in the Building other than the
Premises shall be subject to the terms of this Lease, provided that Tenant shall
pay Rent for such expansion or relocation space in an amount equal to the
then-current fair market value for such space, as agreed to by the parties, in
their sole and absolute discretion. Notwithstanding anything herein to the
contrary, in the event the Premises are altered in accordance with the terms of
this Section 1.2, this Lease shall be amended to reflect the addition of any
such expansion space to the Premises or such relocation of the Premises. At such
time, this Lease shall also be amended to include any additional provisions as
mutually agreed upon by the parties, in their sole and absolute discretion,
including, should the expanded and/or relocated premises include a laboratory,
the addition or deletion of certain provisions to adapt this Lease to such
modified use. Landlord and Tenant hereby acknowledge and agree that nothing
contained in this Section 1.2 shall be construed as an obligation of either
Landlord or Tenant to increase the size of the Premises or to agree to a
relocation of the Premises, and the same shall only occur to the extent each
party elects to consummate such a transaction, in the exercise of their
respective sole and absolute discretion. Any such transaction shall be
commemorated in a written amendment to this Lease.

 

ARTICLE 2

 

INITIAL LEASE TERM; OPTION TERM

 

2.1 Initial Lease Term. The terms and provisions of this Lease shall be
effective as of the date of this Lease. The term of this Lease (the “Lease
Term”) shall be as set forth in Section 3.1 of the Summary, shall commence on
the date set forth in Section 3.2 of the Summary (the “Lease Commencement
Date”), and shall terminate on the date set forth in Section 3.3 of the Summary
(the “Lease Expiration Date”) unless this Lease is sooner terminated as
hereinafter provided. For purposes of this Lease, the term “Lease Year” shall
mean each consecutive twelve (12) month period during the Lease Term; provided,
however, that the first Lease Year shall commence on the Lease Commencement Date
and end on the last day of the eleventh month thereafter and the second and each
succeeding Lease Year shall commence on the first day of the next calendar
month; and further provided that the last Lease Year shall end on the Lease
Expiration Date. At any time during the Lease Term, Landlord may deliver to
Tenant a notice in the form as set forth in Exhibit C, attached hereto, as a
confirmation only of the information set forth therein, which Tenant shall
execute and return to Landlord within five (5) days of receipt thereof.

 

2.2 Option Term.

 

2.2.1 Option Right. Landlord hereby grants the Tenant named in the Summary
(“Original Tenant“), one (1) option to extend the Lease Term for a period of one
(1) year (the “Option Term“), which option shall be exercisable only by written
notice delivered by Tenant to Landlord as provided below, provided that, as of
the date of delivery of such notice, Tenant is not in default under this Lease.
Upon the proper exercise of such option to extend, and provided that, as of the
end of the initial Lease Term, Tenant is not in default under this Lease, the
Lease Term, as it applies to the Premises, shall be extended for a period of one
(1) year. The rights contained in this Section 2.2 shall be personal to the
Original Tenant and may only be exercised by the Original Tenant (and not any
assignee, sublessee or other transferee of the Original Tenant’s interest in
this Lease) if the Original Tenant occupies the entire Premises.

 

2.2.2 Option Rent. The rent payable by Tenant during the Option Term (the
“Option Rent“) shall be equal to the rent (including additional rent and
considering any “base year” or “expense stop” applicable thereto), including all
escalations, at which tenants, as of the commencement of the Option Term, are
leasing non-sublease, non-encumbered, non-equity, non-renewal, non-expansion
space comparable in size, location and quality to the Premises for a comparable
term, which comparable space is located in the Building, taking into
consideration the following concessions: (a) rental abatement concessions, if
any, being granted such tenants in connection with such comparable spaces and
(b) tenant improvements or allowances provided or to be provided for such
comparable space, taking into account, and deducting the value of, the existing
improvements in the Premises, such value to be based upon the age, quality and
layout of the improvements and the extent to which the same could be utilized by
Tenant based upon the fact that the precise tenant improvements existing in the
Premises are specifically suitable to

 

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CHINA BASIN LANDING

[Sirna Therapeutics, Inc.]

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Tenant; provided, however, that in calculating the Option Rent, no consideration
shall be given to (i) the fact that Landlord is or is not required to pay a real
estate brokerage commission in connection with Tenant’s exercise of its right to
lease the Premises during the Option Term, and (ii) any period of rental
abatement, if any, granted to tenants in comparable transactions in connection
with the design, permitting and construction of tenant improvements in such
comparable spaces.

 

2.2.3 Exercise of Options. The option contained in this Section 2.2 shall be
exercised by Tenant, if at all, only in the following manner: (i) Tenant shall
deliver written notice to Landlord not more than twelve (12) months nor less
than ten (10) months prior to the expiration of the initial Lease Term, stating
that Tenant is interested in exercising its option; (ii) Landlord, after receipt
of Tenant’s notice, shall deliver notice (the “Option Rent Notice”) to Tenant
not less than eight (8) months prior to the expiration of the initial Lease
Term, setting forth the Option Rent; and (iii) if Tenant wishes to exercise such
option, Tenant shall, on or before the earlier of (A) the date occurring seven
(7) months prior to the expiration of the initial Lease Term, and (B) the date
occurring thirty (30) days after Tenant’s receipt of the Option Rent Notice,
exercise the option by delivering written notice thereof to Landlord.

 

ARTICLE 3

 

BASE RENT

 

Tenant shall pay, without prior notice or demand, to Landlord or Landlord’s
agent at the address set forth in Section 11 of the Summary, or, at andlord’s
option, at such other place as Landlord may from time to time designate in
writing, not less than thirty (30) days prior to the effectiveness of such
address change, by a check for currency which, at the time of payment, is legal
tender for private or public debts in the United States of America, base rent
(“Base Rent”) as set forth in Section 4 of the Summary, payable in equal monthly
installments as set forth in Section 4 of the Summary in advance on or before
the first day of each and every calendar month during the Lease Term, without
any setoff or deduction whatsoever. The Base Rent for the first full month of
the Lease Term which occurs after the expiration of any free rent period shall
be paid at the time of Tenant’s execution of this Lease. If any Rent payment
date (including the Lease Commencement Date) falls on a day of the month other
than the first day of such month or if any payment of Rent is for a period which
is shorter than one month, the Rent for any fractional month shall accrue on a
daily basis for the period from the date such payment is due to the end of such
calendar month or to the end of the Lease Term at a rate per day which is equal
to 1/365 of the applicable annual Rent. All other payments or adjustments
required to be made under the terms of this Lease that require proration on a
time basis shall be prorated on the same basis.

 

ARTICLE 4

 

ADDITIONAL RENT

 

4.1 General Terms. In addition to paying the Base Rent specified in Article 3 of
this Lease, Tenant shall pay “Tenant’s Share” of the annual “Direct Expenses,”
as those terms are defined in Sections 4.2.6 and 4.2.2 of this Lease,
respectively, which are in excess of the amount of Direct Expenses applicable to
the “Base Year,” as that term is defined in Section 4.2.1, below; provided,
however, that in no event shall any decrease in Direct Expenses for any “Expense
Year,” as that term is defined in Section 4.2.e below, below Direct Expenses for
the Base Year entitle Tenant to any decrease in Base Rent or any credit against
sums due under this Lease. Such payments by Tenant, together with any and all
other amounts payable by Tenant to Landlord pursuant to the terms of this Lease,
are hereinafter collectively referred to as the “Additional Rent”, and the Base
Rent and the Additional Rent are herein collectively referred to as “Rent.” All
amounts due under this Article 4 as Additional Rent shall be payable for the
same periods and in the same manner as the Base Rent. Without limitation on
other obligations of Tenant which survive the expiration of the Lease Term, the
obligations of Tenant to pay the Additional Rent provided for in this Article 4
shall survive the expiration of the Lease Term; provided that Tenant’s
obligations with respect to Additional Rent are for amounts which arise or
accrue during the Lease Term only.

 

4.2 Definitions of Key Terms Relating to Additional Rent. As used in this
Article 4, the following terms shall have the meanings hereinafter set forth:

 

4.2.1 “Base Year” shall mean the period set forth in Section 5 of the Summary.

 

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4.2.2 “Direct Expenses” shall mean “Operating Expenses” and “Tax Expenses.”

 

4.2.3 “Expense Year” shall mean each calendar year in which any portion of the
Lease Term falls, through and including the calendar year in which the Lease
Term expires, provided that Landlord, upon notice to Tenant, may change the
Expense Year from time to time to any other twelve (12) consecutive month period
falling within the Lease Term, and, in the event of any such change, Tenant’s
Share of Direct Expenses shall be equitably adjusted for any Expense Year
involved in any such change.

 

4.2.4 “Operating Expenses” shall mean all expenses, costs and amounts of every
kind and nature which Landlord pays or accrues during any Expense Year because
of or in connection with the ownership, management, maintenance, security,
repair, replacement, restoration or operation of the Project, or any portion
thereof. Without limiting the generality of the foregoing, Operating Expenses
shall specifically include any and all of the following: (i) the cost of
supplying all utilities, the cost of operating, repairing, maintaining, and
renovating the utility, telephone, mechanical, sanitary, storm drainage, and
elevator systems, and the cost of maintenance and service contracts in
connection therewith; (ii) the cost of licenses, certificates, permits and
inspections and the cost of contesting any governmental enactments which may
affect Operating Expenses, and the costs incurred in connection with a
transportation system management program or similar program; (iii) the cost of
all insurance carried by Landlord in connection with the Project; (iv) the cost
of landscaping, relamping, and all supplies, tools, equipment and materials used
in the operation, repair and maintenance of the Project, or any portion thereof;
(v) costs incurred in connection with the parking areas servicing the Building;
(vi) fees and other costs, including management fees, consulting fees, legal
fees and accounting fees, of all contractors and consultants in connection with
the management, operation, maintenance and repair of the Project; (vii) payments
under any equipment rental agreements and the fair rental value of any
management office space; (viii) wages, salaries and other compensation and
benefits, including taxes levied thereon, of all persons engaged in the
operation, management, maintenance and security of the Project; (ix) costs under
any instrument pertaining to the sharing of costs by the Project; (x) operation,
repair, maintenance and replacement of all systems and equipment and components
thereof of the Building; (xi) the cost of janitorial, alarm, security and other
services, replacement of wall and floor coverings, ceiling tiles and fixtures in
common areas, maintenance and replacement of curbs and walkways, exterior
windows and walls, repair to roofs and re-roofing, waterproofing and sealing of
garage, foundation and basement areas; (xii) amortization (including interest on
the unamortized cost) of the cost of acquiring or the rental expense of personal
property used in the maintenance, operation and repair of the Project, or any
portion thereof; (xiii) the cost of capital improvements or other costs incurred
in connection with the Project (A) which are intended to effect economies in the
operation or maintenance of the Project, or any portion thereof, to the extent
of the reasonably anticipated cost savings, (B) that are required to comply with
present or anticipated conservation programs, (C) which are replacements or
modifications of nonstructural items located in the Common Areas required to
keep the Common Areas in good order or condition, or (D) that are required under
any governmental law or regulation; provided, however, that any capital
expenditure shall be amortized with interest over its useful life as Landlord
shall reasonably determine; (xiv) costs, fees, charges or assessments imposed
by, or resulting from any mandate imposed on Landlord by, any federal, state or
local government for fire and police protection, trash removal, community
services, or other services which do not constitute “Tax Expenses” as that term
is defined in Section 4.2.5, below; and (xv) payments under any easement,
license, operating agreement, declaration, restrictive covenant, or instrument
pertaining to the sharing of costs by the Building.

 

Notwithstanding the foregoing, for purposes of this Lease, Operating Expenses
shall not, however, include any of the following:

 

(a) costs, including legal fees, space planners’ fees, advertising and
promotional expenses (except as otherwise set forth above), and brokerage fees
incurred in connection with the original construction or development, or
original or future leasing of the Project, and costs, including permit, license
and inspection costs, incurred with respect to the installation of tenant
improvements made for new tenants initially occupying space in the Project

 

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after the Lease Commencement Date or incurred in renovating or otherwise
improving, decorating, painting or redecorating vacant space for tenants or
other occupants of the Project (excluding, however, such costs relating to any
common areas of the Project or parking facilities);

 

(b) except as set forth in items (xii) and (xiii) above, depreciation, interest
and principal payments on mortgages and other debt costs, if any, penalties and
interest, costs of capital repairs and alterations, and costs of capital
improvements and equipment;

 

(c) costs for which the Landlord is reimbursed by any tenant or occupant of the
Project or by insurance by its carrier or any tenant’s carrier or by anyone
else, and electric power costs for which any tenant directly contracts with the
local public service company;

 

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

 

(e) costs associated with the operation of the business of the partnership or
entity which constitutes the Landlord, as the same are distinguished from the
costs of operation of the Project (which shall specifically include, but not be
limited to, accounting costs associated with the operation of the Project).
Costs associated with the operation of the business of the partnership or entity
which constitutes the Landlord include, without limitation, costs of partnership
accounting and legal matters, costs of defending any lawsuits with any mortgagee
(except as the actions of the Tenant may be in issue), costs of selling,
syndicating, financing, mortgaging or hypothecating any of the Landlord’s
interest in the Project, and costs incurred in connection with any disputes
between Landlord and its employees, between Landlord and Project management, or
between Landlord and other tenants or occupants;

 

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

 

(g) amount paid as ground rental for the Project by the Landlord;

 

(h) any compensation paid to clerks, attendants or other persons in commercial
concessions operated by the Landlord, provided that any compensation paid to any
concierge at the Project shall be includable as an Operating Expense;

 

(i) rentals and other related expenses incurred in leasing air conditioning
systems, elevators or other equipment which if purchased the cost of which would
be excluded from Operating Expenses as a capital cost, except equipment not
affixed to the Project which is used in providing janitorial or similar services
and, further excepting from this exclusion such equipment rented or leased to
remedy or ameliorate an emergency condition in the Project ;

 

(j) all items and services for which Tenant or any other tenant in the Project
reimburses Landlord or which Landlord provides selectively to one or more
tenants (other than Tenant) without reimbursement;

 

(k) rent for any office space occupied by Project management personnel to the
extent the size or rental rate of such office space exceeds the size or fair
market rental value of office space occupied by management personnel of the
comparable buildings in the vicinity of the Building, with adjustment where
appropriate for the size of the applicable project;

 

(l) any bad debt loss, rent loss, or reserves for bad debts or rent loss or any
reserves of any kind;

 

(m) any amount included in Tax Expenses; and

 

(n) costs of any charitable or political contributions made by Landlord.

 

If Landlord is not furnishing any particular work or service (the cost of which,
if performed by Landlord, would be included in Operating Expenses) to a tenant
who has undertaken to perform such work or service in lieu of the performance
thereof by Landlord,

 

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Operating Expenses shall be deemed to be increased by an amount equal to the
additional Operating Expenses which would reasonably have been incurred during
such period by Landlord if it had at its own expense furnished such work or
service to such tenant. If the Project is not at least ninety-five percent (95%)
occupied during all or a portion of the Base Year or any Expense Year, Landlord
shall make an appropriate adjustment to the components of Operating Expenses for
such year to determine the amount of Operating Expenses that would have been
incurred had the Project been ninety-five percent (95%) occupied; and the amount
so determined shall be deemed to have been the amount of Operating Expenses for
such year. Operating Expenses for the Base Year shall include market-wide
labor-rate increases due to extraordinary circumstances, including, but not
limited to, boycotts and strikes, and utility rate increases due to
extraordinary circumstances including, but not limited to, conservation
surcharges, boycotts, embargoes or other shortages, or amortized costs relating
to capital improvements; provided, however, that at such time as any such
particular assessments, charges, costs or fees are no longer included in
Operating Expenses, such particular assessments, charges, costs or fees shall be
excluded from the Base Year calculation of Operating Expenses.

 

4.2.5 Taxes.

 

4.2.5.1 “Tax Expenses” shall mean all federal, state, county, or local
governmental or municipal taxes, fees, charges or other impositions of every
kind and nature, whether general, special, ordinary or extraordinary,
(including, without limitation, real estate taxes, general and special
assessments, transit taxes, leasehold taxes or taxes based upon the receipt of
rent, including gross receipts or sales taxes applicable to the receipt of rent,
unless required to be paid by Tenant, personal property taxes imposed upon the
fixtures, machinery, equipment, apparatus, systems and equipment, appurtenances,
furniture and other personal property used in connection with the Project, or
any portion thereof), which shall be paid or accrued during any Expense Year
(without regard to any different fiscal year used by such governmental or
municipal authority) because of or in connection with the ownership, leasing and
operation of the Project, or any portion thereof.

 

4.2.5.2 Tax Expenses shall include, without limitation: (i) Any tax on the rent,
right to rent or other income from the Project, or any portion thereof, or as
against the business of leasing the Project, or any portion thereof; (ii) Any
assessment, tax, fee, levy or charge in addition to, or in substitution,
partially or totally, of any assessment, tax, fee, levy or charge previously
included within the definition of real property tax, it being acknowledged by
Tenant and Landlord that Proposition 13 was adopted by the voters of the State
of California in the June 1978 election (“Proposition 13”) and that assessments,
taxes, fees, levies and charges may be imposed by governmental agencies for such
services as fire protection, street, sidewalk and road maintenance, refuse
removal and for other governmental services formerly provided without charge to
property owners or occupants, and, in further recognition of the decrease in the
level and quality of governmental services and amenities as a result of
Proposition 13, Tax Expenses shall also include any governmental or private
assessments or the Project’s contribution towards a governmental or private
cost-sharing agreement for the purpose of augmenting or improving the quality of
services and amenities normally provided by governmental agencies; (iii) Any
assessment, tax, fee, levy, or charge allocable to or measured by the area of
the Premises or the Rent payable hereunder, including, without limitation, any
business or gross income tax or excise tax with respect to the receipt of such
rent, or upon or with respect to the possession, leasing, operating, management,
maintenance, alteration, repair, use or occupancy by Tenant of the Premises, or
any portion thereof; and (iv) Any assessment, tax, fee, levy or charge, upon
this transaction or any document to which Tenant is a party, creating or
transferring an interest or an estate in the Premises.

 

4.2.5.3 Any costs and expenses (including, without limitation, reasonable
attorneys’ fees) incurred in attempting to protest, reduce or minimize Tax
Expenses shall be included in Tax Expenses in the Expense Year such expenses are
paid. Tax refunds shall be credited against Tax Expenses and refunded to Tenant
regardless of when received, based on the Expense Year to which the refund is
applicable, provided that in no event shall the amount to be refunded to Tenant
for any such Expense Year exceed the total amount paid by Tenant as Additional
Rent under this Article 4 for such Expense Year. If Tax Expenses for any period
during the Lease Term or any extension thereof are increased after payment
thereof for any reason, including, without limitation, error or reassessment by
applicable governmental or municipal authorities, Tenant shall pay Landlord upon
demand Tenant’s Share of any such increased Tax Expenses included by Landlord as
Building Tax Expenses pursuant to the terms of

 

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this Lease. Notwithstanding anything to the contrary contained in this Section
4.2.5 (except as set forth in Section 4.2.5.1, above), there shall be excluded
from Tax Expenses (i) all excess profits taxes, franchise taxes, gift taxes,
capital stock taxes, inheritance and succession taxes, estate taxes, federal and
state income taxes, and other taxes to the extent applicable to Landlord’s
general or net income (as opposed to rents, receipts or income attributable to
operations at the Project), (ii) any items included as Operating Expenses, and
(iii) any items paid by Tenant under Section 4.5 of this Lease.

 

4.2.5.4 The amount of Tax Expenses for the Base Year attributable to the
valuation of the Project, inclusive of tenant improvements, shall be known as
“Base Taxes”. If in any comparison year subsequent to the Base Year, the amount
of Tax Expenses decreases below the amount of Base Taxes, then for purposes of
all subsequent comparison years, including the comparison year in which such
decrease in Tax Expenses occurred, the Base Taxes, and therefore the Base Year,
shall be decreased by an amount equal to the decrease in Tax Expenses.

 

4.2.6 “Tenant’s Share” shall mean the percentage set forth in Section 6 of the
Summary.

 

4.3 Allocation of Direct Expenses.

 

4.3.1 Method of Allocation. The parties acknowledge that the Building is a part
of a multi-building project and that the costs and expenses incurred in
connection with the Project (i.e. the Direct Expenses) are an aggregate of the
Building and other buildings in the Project.

 

4.3.2 Cost Pools. Landlord shall have the right, from time to time, to equitably
allocate some or all of the Direct Expenses for the Project among different
portions or occupants of the Project (the “Cost Pools”), in Landlord’s
discretion. Such Cost Pools may include, but shall not be limited to, the office
space tenants of a building of the Project or of the Project, and the retail
space tenants of a building of the Project or of the Project. The Direct
Expenses within each such Cost Pool shall be allocated and charged to the
tenants as determined by Landlord in accordance with sound real estate
management principles.

 

4.4 Calculation and Payment of Additional Rent. If for any Expense Year ending
or commencing within the Lease Term, Tenant’s Share of Direct Expenses for such
Expense Year exceeds Tenant’s Share of Direct Expenses applicable to the Base
Year, then Tenant shall pay to Landlord, in the manner set forth in Section
4.4.1, below, and as Additional Rent, an amount equal to the excess (the
“Excess”).

 

4.4.1 Statement of Actual Direct Expenses and Payment by Tenant. Landlord shall
give to Tenant following the end of each Expense Year, and prior to the
expiration fo the following Expense Year, a statement (the “Statement”) which
shall state the Direct Expenses incurred or accrued for such preceding Expense
Year, and which shall indicate the amount of the Excess. Upon receipt of the
Statement for each Expense Year commencing or ending during the Lease Term, if
an Excess is present, Tenant shall pay, with its next installment of Base Rent
due, the full amount of the Excess for such Expense Year, less the amounts, if
any, paid during such Expense Year as “Estimated Excess,” as that term is
defined in Section 4.4.2, below. The failure of Landlord to timely furnish the
Statement for any Expense Year shall not prejudice Landlord or Tenant from
enforcing its rights under this Article 4. Even though the Lease Term has
expired and Tenant has vacated the Premises, when the final determination is
made of Tenant’s Share of Direct Expenses for the Expense Year in which this
Lease terminates, if an Excess is present, Tenant shall, within ten (10) days
following receipt of billing, pay to Landlord such amount. The provisions of
this Section 4.4.1 shall survive the expiration or earlier termination of the
Lease Term.

 

4.4.2 Statement of Estimated Direct Expenses. In addition, Landlord shall
endeavor to give Tenant a yearly expense estimate statement (the “Estimate
Statement”) which shall set forth Landlord’s reasonable estimate (the
“Estimate”) of what the total amount of Direct Expenses for the then-current
Expense Year shall be and the estimated excess (the “Estimated Excess”) as
calculated by comparing the Direct Expenses for such Expense Year, which shall
be based upon the Estimate, to the amount of Direct Expenses for the Base Year.
The failure of Landlord to timely furnish the Estimate Statement for any Expense
Year shall not preclude

 

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Landlord from enforcing its rights to collect any Estimated Excess under this
Article 4, nor shall Landlord be prohibited from revising any Estimate Statement
or Estimated Excess theretofore delivered to the extent necessary. Thereafter,
Tenant shall pay, with its next installment of Base Rent due, a fraction of the
Estimated Excess for the then-current Expense Year (reduced by any amounts paid
pursuant to the next to last sentence of this Section 4.4.2). Such fraction
shall have as its numerator the number of months which have elapsed in such
current Expense Year, including the month of such payment, and twelve (12) as
its denominator. Until a new Estimate Statement is furnished (which Landlord
shall have the right to deliver to Tenant at any time), Tenant shall pay
monthly, with the monthly Base Rent installments, an amount equal to one-twelfth
(1/12) of the total Estimated Excess set forth in the previous Estimate
Statement delivered by Landlord to Tenant.

 

4.5 Taxes and Other Charges for Which Tenant Is Directly Responsible.

 

4.5.1 Tenant shall be liable for and shall pay ten (10) days before delinquency,
taxes levied against Tenant’s equipment, furniture, fixtures and any other
personal property located in or about the Premises. If any such taxes on
Tenant’s equipment, furniture, fixtures and any other personal property are
levied against Landlord or Landlord’s property or if the assessed value of
Landlord’s property is increased by the inclusion therein of a value placed upon
such equipment, furniture, fixtures or any other personal property and if
Landlord pays the taxes based upon such increased assessment, which Landlord
shall have the right to do regardless of the validity thereof but only under
proper protest if requested by Tenant, Tenant shall upon demand repay to
Landlord the taxes so levied against Landlord or the proportion of such taxes
resulting from such increase in the assessment, as the case may be.

 

4.5.2 If the tenant improvements in the Premises, whether installed and/or paid
for by Landlord or Tenant and whether or not affixed to the real property so as
to become a part thereof, are assessed for real property tax purposes at a
valuation higher than the valuation at which tenant improvements conforming to
Landlord’s “building standard” in other space in the Building are assessed, then
the Tax Expenses levied against Landlord or the property by reason of such
excess assessed valuation shall be deemed to be taxes levied against personal
property of Tenant and shall be governed by the provisions of Section 4.5.1,
above.

 

4.5.3 Notwithstanding any contrary provision herein, Tenant shall pay prior to
delinquency any (i) rent tax or sales tax, service tax, transfer tax or value
added tax, or any other applicable tax on the rent or services herein or
otherwise respecting this Lease, (ii) taxes assessed upon or with respect to the
possession, leasing, operation, management, maintenance, alteration, repair, use
or occupancy by Tenant of the Premises or any portion of the Project, including
the Project parking facility; or (iii) taxes assessed upon this transaction or
any document to which Tenant is a party creating or transferring an interest or
an estate in the Premises.

 

ARTICLE 5

 

USE OF PREMISES

 

5.1 Permitted Use. Tenant shall use the Premises solely for the Permitted Use
set forth in Section 7 of the Summary and Tenant shall not use or permit the
Premises or the Project to be used for any other purpose or purposes whatsoever
without the prior written consent of Landlord, which may be withheld in
Landlord’s sole discretion.

 

5.2 Prohibited Uses. The uses prohibited under this Lease shall include, without
limitation, use of the Premises or a portion thereof for (i) offices of any
agency or bureau of the United States or any state or political subdivision
thereof; (ii) offices or agencies of any foreign governmental or political
subdivision thereof; (iii) offices of any health care professionals or service
organization (but excluding any health care professionals engaged in the
business of life sciences research); (iv) schools or other training facilities
which are not ancillary to corporate, executive or professional office use; (v)
retail or restaurant uses; or (vi) communications firms such as radio and/or
television stations. Tenant shall not allow occupancy density of use of the
Premises which is greater than one (1) person for each 150 square feet of the
Premises. Tenant further covenants and agrees that Tenant shall not use, or
suffer or permit any person or persons to use, the Premises or any part thereof
for any use or purpose contrary to the provisions of the Rules and Regulations
set forth in Exhibit D, attached hereto, or in violation of the laws of the

 

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United States of America, the State of California, or the ordinances,
regulations or requirements of the local municipal or county governing body or
other lawful authorities having jurisdiction over the Project) including,
without limitation, any such laws, ordinances, regulations or requirements
relating to hazardous materials or substances, as those terms are defined by
applicable laws now or hereafter in effect. Tenant shall not do or permit
anything to be done in or about the Premises which will in any way materially
damage the reputation of the Project or obstruct or interfere with the rights of
other tenants or occupants of the Building, or injure or annoy them or use or
allow the Premises to be used for any improper, unlawful or objectionable
purpose, nor shall Tenant cause, maintain or permit any nuisance in, on or about
the Premises. Tenant shall comply with all recorded covenants, conditions, and
restrictions now or hereafter affecting the Project and Landlord shall, upon
request from Tenant, provide Tenant with copies of all recorded covenants,
conditions and restrictions currently affecting the Project and will notify
Tenant and provide copies to Tenant of any future covenants, conditions, and
restrictions affecting the Project.

 

ARTICLE 6

 

SERVICES AND UTILITIES

 

6.1 Standard Tenant Services. Landlord shall provide the following services on
all days (unless otherwise stated below) during the Lease Term.

 

6.1.1 Subject to limitations imposed by all governmental rules, regulations and
guidelines applicable thereto, Landlord shall provide heating and air
conditioning (“HVAC”) when necessary for normal office use in the Premises from
8:00 A.M. to 6:00 P.M. Monday through Friday (collectively, the “Building
Hours”), except for the date of observation of New Year’s Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day, Christmas Day and, at Landlord’s
discretion, upon not less than thirty (30) days written notice to Tenant, other
locally or nationally recognized holidays (collectively, the “Holidays”).

 

6.1.2 Landlord shall provide adequate electrical wiring and facilities for
connection to Building standard ceiling mounted lighting fixtures and incidental
use equipment, provided that Tenant’s consumption of electricity does not exceed
1 kilowatt/hour per usable square foot of the Premises per month, which
electrical usage shall be subject to applicable laws and regulations, including
Title 24 of the California Code of Regulations. Tenant will design Tenant’s
electrical system serving any equipment producing nonlinear electrical loads to
accommodate such nonlinear electrical loads, including, but not limited to,
oversizing neutral conductors, derating transformers and/or providing power-line
filters. Engineering plans shall include a calculation of Tenant’s fully
connected electrical design load with and without demand factors and shall
indicate the number of watts of unmetered and submetered loads. Tenant shall
bear the cost of replacement of lamps, starters and ballasts for non-Building
standard lighting fixtures within the Premises.

 

6.1.3 Landlord shall provide city water from the regular Building outlets for
pantry, drinking, lavatory and toilet purposes in the Premises and the Building
Common Areas.

 

6.1.4 Landlord shall provide janitorial services to the Premises, except the
date of observation of the Holidays, in and about the Premises and window
washing services in a manner consistent with other comparable buildings in the
vicinity of the Building.

 

6.1.5 Landlord shall provide nonexclusive, non-attended automatic passenger
elevator service during the Building Hours, shall have one elevator available at
all other times, and shall provide nonexclusive, non-attended automatic
passenger escalator service during Building Hours only.

 

6.1.6 Landlord shall provide nonexclusive freight elevator service subject to
scheduling by Landlord.

 

Tenant shall cooperate fully with Landlord at all times and abide by all
regulations and requirements that Landlord may reasonably prescribe for the
proper functioning and protection of the HVAC, electrical, mechanical and
plumbing systems.

 

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6.2 Overstandard Tenant Use. Tenant shall not, without Landlord’s prior written
consent, use heat-generating machines, machines other than normal fractional
horsepower office machines, or equipment or lighting other than Building
standard lights in the Premises, which may affect the temperature otherwise
maintained by the air conditioning system or increase the water normally
furnished for the Premises by Landlord pursuant to the terms of Section 6.1 of
this Lease. If such consent is given, Landlord shall have the right to install
supplementary air conditioning units or other facilities in the Premises,
including supplementary or additional metering devices, and the cost thereof,
including the cost of installation, operation and maintenance, increased wear
and tear on existing equipment and other similar charges, shall be paid by
Tenant to Landlord upon billing by Landlord. If Tenant uses water, electricity,
heat or air conditioning in excess of that supplied by Landlord pursuant to
Section 6.1 of this Lease, Tenant shall pay to Landlord, upon billing, the cost
of such excess consumption, the cost of the installation, operation, and
maintenance of equipment which is installed in order to supply such excess
consumption, and the cost of the increased wear and tear on existing equipment
caused by such excess consumption; and Landlord may install devices to
separately meter any increased use and in such event Tenant shall pay the
increased cost directly to Landlord, on demand, at the rates charged by the
public utility company furnishing the same, including the cost of such
additional metering devices. Tenant’s use of electricity shall never exceed the
capacity of the feeders to the Project or the risers or wiring installation. If
Tenant desires to use heat, ventilation or air conditioning during hours other
than those for which Landlord is obligated to supply such utilities pursuant to
the terms of Section 6.1 of this Lease, Tenant shall give Landlord such prior
notice, if any, as Landlord shall from time to time establish as appropriate, to
the extent such additional utilities can be made available, and Landlord shall
supply such utilities to Tenant at such hourly cost to Tenant (which shall be
treated as Additional Rent and which may include an administrative fee) as
Landlord shall from time to time establish.

 

6.3 Interruption of Use. Tenant agrees that Landlord shall not be liable for
damages, by abatement of Rent or otherwise, for failure to furnish or delay in
furnishing any service (including telephone and telecommunication services), or
for any diminution in the quality or quantity thereof, when such failure or
delay or diminution is occasioned, in whole or in part, by breakage, repairs,
replacements, or improvements, by any strike, lockout or other labor trouble, by
inability to secure electricity, gas, water, or other fuel at the Building or
Project after reasonable effort to do so, by any riot or other dangerous
condition, emergency, accident or casualty whatsoever, by act or default of
Tenant or other parties, or by any other cause; and such failures or delays or
diminution shall never be deemed to constitute an eviction or disturbance of
Tenant’s use and possession of the Premises or relieve Tenant from paying Rent
or performing any of its obligations under this Lease. Furthermore, Landlord
shall not be liable under any circumstances for a loss of, or injury to,
property or for injury to, or interference with, Tenant’s business, including,
without limitation, loss of profits, however occurring, through or in connection
with or incidental to a failure to furnish any of the services or utilities as
set forth in this Article 6. Landlord may comply with voluntary controls or
guidelines promulgated by any governmental entity relating to the use or
conservation of energy, water, gas, light or electricity or the reduction of
automobile or other emissions without creating any liability of Landlord to
Tenant under this Lease, provided that the Premises are not thereby rendered
untenantable.

 

6.4 Abatement of Rent. In the event that Tenant is prevented from using, and
does not use, the Premises or any portion thereof, as a result of any failure to
provide services, utilities or access to the Premises as required by this Lease
(an “Abatement Event”), then Tenant shall give Landlord notice of such Abatement
Event, and if such Abatement Event continues for five (5) consecutive business
days after Landlord’s receipt of any such notice (the “Eligibility Period”),
then the Base Rent and Tenant’s Share of Direct Expenses shall be abated or
reduced, as the case may be, after expiration of the Eligibility Period for such
time that Tenant continues to be so prevented from using, and does not use, the
Premises or a portion thereof, in the proportion that the rentable area of the
portion of the Premises that Tenant is prevented from using, and does not use,
bears to the total rentable area of the Premises; provided, however, in the
event that Tenant is prevented from using, and does not use, a portion of the
Premises for a period of time in excess of the Eligibility Period and the
remaining portion of the Premises is not sufficient to allow Tenant to
effectively conduct its business therein, and if Tenant does not conduct its
business from such remaining portion, then for such time after expiration of the
Eligibility Period during which Tenant is so prevented from effectively
conducting its business therein, the Base Rent and Tenant’s Share of Direct
Expenses for the entire Premises shall be abated for such time as Tenant
continues to be so prevented from using, and does not use, the

 

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Premises. If, however, Tenant reoccupies any portion of the Premises during such
period, the Rent allocable to such reoccupied portion, based on the proportion
that the rentable area of such reoccupied portion of the Premises bears to the
total rentable area of the Premises, shall be payable by Tenant from the date
Tenant reoccupies such portion of the Premises. Except as provided in this
Section 6.4, nothing contained herein shall be interpreted to mean that Tenant
is excused from paying Rent due hereunder.

 

ARTICLE 7

 

REPAIRS

 

Tenant shall, at Tenant’s own expense, pursuant to the terms of this Lease,
including without limitation Article 8 hereof, keep the Premises, including all
improvements, fixtures and furnishings therein, and the floor or floors of the
Building on which the Premises are located, in good order, repair and condition
at all times during the Lease Term. In addition, Tenant shall, at Tenant’s own
expense, but under the supervision and subject to the prior approval of
Landlord, and within any reasonable period of time specified by Landlord,
pursuant to the terms of this Lease, including without limitation Article 8
hereof, promptly and adequately repair all damage to the Premises and replace or
repair all damaged, broken, or worn fixtures and appurtenances, except for
damage caused by ordinary wear and tear or beyond the reasonable control of
Tenant; provided however, that, at Landlord’s option, or if Tenant fails to
commence such repairs within ten (10) days following receipt of notice from
Landlord, and diligently pursue such repair to completion, Landlord may, but
need not, make such repairs and replacements, and Tenant shall pay Landlord the
cost thereof, including a percentage of the cost thereof (to be uniformly
established for the Building and/or the Project) sufficient to reimburse
Landlord for all overhead, general conditions, fees and other costs or expenses
arising from Landlord’s involvement with such repairs and replacements forthwith
upon being billed for same. Subject to the terms of Article 27 of this Lease,
Landlord may, but shall not be required to, enter the Premises at all reasonable
times to make such repairs, alterations, improvements or additions to the
Premises or to the Project or to any equipment located in the Project as
Landlord shall desire or deem necessary or as Landlord may be required to do by
governmental or quasi-governmental authority or court order or decree. Tenant
hereby waives any and all rights under and benefits of subsection 1 of Section
1932 and Sections 1941 and 1942 of the California Civil Code or under any
similar law, statute, or ordinance now or hereafter in effect.

 

ARTICLE 8

 

ADDITIONS AND ALTERATIONS

 

8.1 Landlord’s Consent to Alterations. Tenant may not make any improvements,
alterations, additions or changes to the Premises or any mechanical, plumbing or
HVAC facilities or systems pertaining to the Premises (collectively, the
“Alterations”) without first procuring the prior written consent of Landlord to
such Alterations, which consent shall be requested by Tenant not less than
thirty (30) days prior to the commencement thereof, and which consent may be
withheld in Landlord’s sole discretion.

 

8.2 Manner of Construction. Landlord may impose, as a condition of its consent
to any and all Alterations or repairs of the Premises or about the Premises,
such commercially reasonable requirements as Landlord may deem desirable,
including, but not limited to, the requirement that Tenant utilize for such
purposes only contractors, subcontractors, materials, mechanics and materialmen
selected by Tenant from a list provided and approved by Landlord, the
requirement that upon Landlord’s request, Tenant shall, at Tenant’s expense,
remove such Alterations upon the expiration or any early termination of the
Lease Term. If such Alterations will involve the use of or disturb hazardous
materials or substances existing in the Premises, Tenant shall comply with
Landlord’s rules and regulations concerning such hazardous materials or
substances. Tenant shall construct such Alterations and perform such repairs in
a good and workmanlike manner, in conformance with any and all applicable
federal, state, county or municipal laws, rules and regulations and pursuant to,
if required by law, a valid building permit, issued by the City of San
Francisco, all in conformance with Landlord’s construction rules and
regulations. In the event Tenant performs any Alterations in the Premises which
require or give rise to governmentally required changes to the “Base Building,”
as that term is defined below, then Landlord shall, at Tenant’s expense, make
such changes to the Base Building. The “Base Building” shall include the
structural portions of the Building, and the public restrooms and the

 

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systems and equipment located in the internal core of the Building on the floor
or floors on which the Premises are located. In performing the work of any such
Alterations, Tenant shall have the work performed in such manner so as not to
obstruct access to the Project or any portion thereof, by any other tenant of
the Project, and so as not to obstruct the business of Landlord or other tenants
in the Project. Tenant shall not use (and upon notice from Landlord shall cease
using) contractors, services, workmen, labor, materials or equipment that, in
Landlord’s reasonable judgment, would disturb labor harmony with the workforce
or trades engaged in performing other work, labor or services in or about the
Building or the Common Areas. In addition to Tenant’s obligations under Article
9 of this Lease, upon completion of any Alterations, Tenant agrees to cause a
Notice of Completion to be recorded in the office of the Recorder of the County
of San Francisco in accordance with Section 3093 of the Civil Code of the State
of California or any successor statute, and Tenant shall deliver to the Project
management office a reproducible copy of the “as built” drawings of the
Alterations as well as all permits, approvals and other documents issued by any
governmental agency in connection with the Alterations.

 

8.3 Payment for Improvements. If payment is made directly to contractors, Tenant
shall comply with Landlord’s requirements for final lien releases and waivers in
connection with Tenant’s payment for work to contractors. If Tenant orders any
work directly from Landlord, Tenant shall pay to Landlord a percentage of the
cost of such work sufficient to compensate Landlord for all overhead, general
conditions, fees and other costs and expenses arising from Landlord’s
involvement with such work. If Tenant does not order the work directly from
Landlord, Tenant shall reimburse Landlord for Landlord’s reasonable, actual,
out-of-pocket costs and expenses actually incurred in connection with Landlord’s
review of such work.

 

8.4 Construction Insurance. In addition to the requirements of Article 10 of
this Lease, in the event that Tenant makes any Alterations, prior to the
commencement of such Alterations, Tenant shall provide Landlord with evidence
that Tenant carries “Builder’s All Risk” insurance in an amount approved by
Landlord covering the construction of such Alterations, and such other insurance
as Landlord may require, it being understood and agreed that all of such
Alterations shall be insured by Tenant pursuant to Article 10 of this Lease
immediately upon completion thereof. In addition, Landlord may, in its
discretion, require Tenant to obtain a lien and completion bond or some
alternate form of security satisfactory to Landlord in an amount sufficient to
ensure the lien-free completion of such Alterations and naming Landlord as a
co-obligee.

 

8.5 Landlord’s Property. All Alterations, improvements, fixtures, equipment
and/or appurtenances which may be installed or placed in or about the Premises,
from time to time, shall be at the sole cost of Tenant and shall be and become
the property of Landlord, except that Tenant may remove any Alterations,
improvements, fixtures and/or equipment which Tenant can substantiate to
Landlord have not been paid for with any Tenant improvement allowance funds
provided to Tenant by Landlord, provided Tenant repairs any damage to the
Premises and Building caused by such removal and returns the affected portion of
the Premises to a building standard tenant improved condition as determined by
Landlord. Furthermore, Landlord may, by written notice to Tenant not less than
sixty (60) days prior to the end of the Lease Term, or given following any
earlier termination of this Lease, require Tenant, at Tenant’s expense, to
remove any Alterations or improvements in the Premises, and to repair any damage
to the Premises and Building caused by such removal and return the affected
portion of the Premises to a building standard tenant improved condition as
determined by Landlord. If Tenant fails to complete such removal and/or to
repair any damage caused by the removal of any Alterations or improvements in
the Premises, and return the affected portion of the Premises to a building
standard tenant improved condition as determined by Landlord, Landlord may do so
and may charge the cost thereof to Tenant. Tenant hereby protects, defends,
indemnifies and holds Landlord harmless from any liability, cost, obligation,
expense or claim of lien in any manner relating to the installation, placement,
removal or financing of any such Alterations, improvements, fixtures and/or
equipment in, on or about the Premises, which obligations of Tenant shall
survive the expiration or earlier termination of this Lease.

 

8.6 Improvement Allowance. Tenant shall be entitled to an allowance for the
design and construction of improvements in the Premises (the “Improvements”) in
an amount equal to Ten Thousand Eight Hundred Seventy-Five and No/100 Dollars
($10,875.00) (i.e. $2.50 per rentable square foot of the Premises) (the
“Improvement Allowance”), which Improvement Allowance may be utilized by Tenant
for the costs of the Improvements at any time through and

 

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including March 31, 2006. Any portion of the Improvement Allowance which has not
been spent as of April 1, 2006 shall revert to Landlord and Tenant shall have no
further rights thereto. Any costs incurred by Tenant in connection with Tenant’s
construction of the Improvements which are in excess of the Improvement
Allowance shall be paid for by Tenant. The Improvement Allowance shall be
disbursed by Landlord pursuant to Landlord’s reasonable disbursement process
(which shall include, without limitation, the requirement that Tenant provide
invoices and mechanics’ lien releases acceptable to Landlord) for costs related
to the construction of the Improvements. Tenant shall not be charged a
supervision fee in connection with Tenant’s construction of the Improvements;
provided, however, that Tenant shall reimburse Landlord within thirty (30) days
of Tenant’s receipt of an invoice for any out-of-pocket costs actually incurred
by Landlord in connection with Tenant’s construction of the Improvements.

 

ARTICLE 9

 

COVENANT AGAINST LIENS

 

Tenant shall keep the Project and Premises free from any liens or encumbrances
arising out of the work performed, materials furnished or obligations incurred
by or on behalf of Tenant, and shall protect, defend, indemnify and hold
Landlord harmless from and against any claims, liabilities, judgments or costs
(including, without limitation, reasonable attorneys’ fees and costs) arising
out of same or in connection therewith. Tenant shall give Landlord notice at
least twenty (20) days prior to the commencement of any such work on the
Premises (or such additional time as may be necessary under applicable laws) to
afford Landlord the opportunity of posting and recording appropriate notices of
non-responsibility. Tenant shall remove any such lien or encumbrance by bond or
otherwise within five (5) days after notice by Landlord, and if Tenant shall
fail to do so, Landlord may pay the amount necessary to remove such lien or
encumbrance, without being responsible for investigating the validity thereof.
The amount so paid shall be deemed Additional Rent under this Lease payable upon
demand, without limitation as to other remedies available to Landlord under this
Lease. Nothing contained in this Lease shall authorize Tenant to do any act
which shall subject Landlord’s title to the Building or Premises to any liens or
encumbrances whether claimed by operation of law or express or implied contract.
Any claim to a lien or encumbrance upon the Building or Premises arising in
connection with any such work or respecting the Premises not performed by or at
the request of Landlord shall be null and void, or at Landlord’s option shall
attach only against Tenant’s interest in the Premises and shall in all respects
be subordinate to Landlord’s title to the Project, Building and Premises.

 

ARTICLE 10

 

INSURANCE

 

10.1 Indemnification and Waiver. Except to the extent caused by the negligence
or willful misconduct of the “Landlord Parties,” as that term is defined below,
Tenant hereby assumes all risk of damage to property or injury to persons in,
upon or about the Premises from any cause whatsoever and agrees that Landlord,
its partners, subpartners and their respective officers, agents, servants,
employees, and independent contractors (collectively, “Landlord Parties”) shall
not be liable for, and are hereby released from any responsibility for, any
damage either to person or property or resulting from the loss of use thereof,
which damage is sustained by Tenant or by other persons claiming through Tenant.
Tenant shall indemnify, defend, protect, and hold harmless the Landlord Parties
from any and all loss, cost, damage, expense and liability (including without
limitation court costs and reasonable attorneys’ fees) incurred in connection
with or arising from any cause in, on or about the Premises, any acts, omissions
or negligence of Tenant or of any person claiming by, through or under Tenant,
or of the contractors, agents, servants, employees, invitees, guests or
licensees of Tenant or any such person, in, on or about the Project or any
breach of the terms of this Lease, either prior to, during, or after the
expiration of the Lease Term, provided that the terms of the foregoing indemnity
shall not apply to the negligence or willful misconduct of Landlord or the
Landlord Parties. Should Landlord be named as a defendant in any suit brought
against Tenant in connection with or arising out of Tenant’s occupancy of the
Premises, then except to the extent caused by the negligence or willful
misconduct of Landlord or the Landlord Parties, Tenant shall pay to Landlord its
costs and expenses incurred in such suit, including without limitation, its
actual professional fees such as appraisers’, accountants’ and attorneys’ fees.
Further, Tenant’s agreement to indemnify Landlord pursuant to this Section 10.1
is not intended and shall not relieve any insurance carrier of its obligations
under policies required to be carried by Tenant pursuant to the provisions of
this

 

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Lease, to the extent such policies cover the matters subject to Tenant’s
indemnification obligations; nor shall they supersede any inconsistent agreement
of the parties set forth in any other provision of this Lease. The provisions of
this Section 10.1 shall survive the expiration or sooner termination of this
Lease with respect to any claims or liability arising in connection with any
event occurring prior to such expiration or termination.

 

10.2 Tenant’s Compliance With Landlord’s Fire and Casualty Insurance. Tenant
shall, at Tenant’s expense, comply with all commercially reasonable insurance
company requirements pertaining to the use of the Premises. If Tenant’s conduct
or use of the Premises causes any increase in the premium for such insurance
policies then Tenant shall reimburse Landlord for any such increase. Tenant, at
Tenant’s expense, shall comply with all rules, orders, regulations or
requirements of the American Insurance Association (formerly the National Board
of Fire Underwriters) and with any similar body.

 

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

 

10.3.1 Commercial General Liability Insurance covering the insured against
claims of bodily injury, personal injury and property damage (including loss of
use thereof) arising out of Tenant’s operations, and contractual liabilities
(covering the performance by Tenant of its indemnity agreements) including a
Broad Form endorsement covering the insuring provisions of this Lease and the
performance by Tenant of the indemnity agreements set forth in Section 10.1 of
this Lease, for limits of liability not less than:

 

Bodily Injury and

   $3,000,000 each occurrence

Property Damage Liability

   $3,000,000 annual aggregate

Personal Injury Liability

   $3,000,000 each occurrence      $3,000,000 annual aggregate      0% Insured’s
participation

 

10.3.2 Physical Damage Insurance covering (i) all office furniture, business and
trade fixtures, office equipment, free-standing cabinet work, movable
partitions, merchandise and all other items of Tenant’s property on the Premises
installed by, for, or at the expense of Tenant, (ii) any improvements which
exist in the Premises as of the Lease Commencement Date (excluding the Base
Building) and (iii) all other improvements, alterations and additions to the
Premises (collectively, items (ii) and (iii), the “Tenant Improvements”). Such
insurance shall be written on an “all risks” of physical loss or damage basis,
for the full replacement cost value (subject to reasonable deductible amounts)
new without deduction for depreciation of the covered items and in amounts that
meet any co-insurance clauses of the policies of insurance and shall include
coverage for damage or other loss caused by fire or other peril including, but
not limited to, vandalism and malicious mischief, theft, water damage of any
type, including sprinkler leakage, bursting or stoppage of pipes, and explosion,
and providing business interruption coverage for a period of one year.

 

10.3.3 Worker’s Compensation and Employer’s Liability or other similar insurance
pursuant to all applicable state and local statutes and regulations.

 

10.3.4 Business Interruption Insurance in the amount necessary to insure payment
of Tenant’s obligations to pay Rent hereunder for a period of not less than
twelve (12) months.

 

10.4 Form of Policies. The minimum limits of policies of insurance required of
Tenant under this Lease shall in no event limit the liability of Tenant under
this Lease. Such insurance shall (i) name Landlord, and any other party the
Landlord so specifies, as an additional insured, including Landlord’s managing
agent, if any; (ii) specifically cover the liability assumed by Tenant under
this Lease, including, but not limited to, Tenant’s obligations under Section
10.1 of this Lease; (iii) be issued by an insurance company having a rating of
not less than A-X in Best’s Insurance Guide or which is otherwise acceptable to
Landlord and licensed to do business in the State of California; (iv) be primary
insurance as to all claims thereunder and provide that any insurance carried by
Landlord is excess and is non-contributing with any insurance requirement of
Tenant; (v) be in form and content reasonably acceptable to Landlord; and (vi)
provide that said insurance shall not be canceled or coverage changed unless
thirty (30) days’

 

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prior written notice shall have been given to Landlord and any mortgagee of
Landlord. Tenant shall deliver said policy or policies or certificates
(including endorsements) thereof to Landlord on or before the Lease Commencement
Date and at least thirty (30) days before the expiration dates thereof. In the
event Tenant shall fail to procure such insurance, or to deliver such policies
or certificate within ten (10) days following receipt of notice from Landlord,
Landlord may, at its option, procure such policies for the account of Tenant,
and the cost thereof shall be paid to Landlord within five (5) days after
delivery to Tenant of bills therefor.

 

10.5 Subrogation. Landlord and Tenant intend that their respective property loss
risks shall be borne by reasonable insurance carriers to the extent above
provided, and Landlord and Tenant hereby agree to look solely to, and seek
recovery only from, their respective insurance carriers in the event of a
property loss to the extent that such coverage is agreed to be provided
hereunder. The parties each hereby waive all rights and claims against each
other for such losses, and waive all rights of subrogation of their respective
insurers, provided such waiver of subrogation shall not affect the right to the
insured to recover thereunder. The parties agree that their respective insurance
policies are now, or shall be, endorsed such that the waiver of subrogation
shall not affect the right of the insured to recover thereunder, so long as no
material additional premium is charged therefor.

 

10.6 Additional Insurance Obligations. Tenant shall carry and maintain during
the entire Lease Term, as the same may be extended, at Tenant’s sole cost and
expense, increased amounts of the insurance required to be carried by Tenant
pursuant to this Article 10 and such other reasonable types of insurance
coverage and in such reasonable amounts covering the Premises and Tenant’s
operations therein, as may be reasonably requested by Landlord, but in no event
shall such increased amounts of insurance or such other reasonable types of
insurance coverage be in excess of that being required by landlords of
comparable buildings located in the vicinity of the Building.

 

ARTICLE 11

 

DAMAGE AND DESTRUCTION

 

11.1 Repair of Damage to Premises by Landlord. Tenant shall promptly notify
Landlord of any damage to the Premises resulting from fire or any other
casualty. If the Premises or any Common Areas serving or providing access to the
Premises shall be damaged by fire or other casualty, Landlord shall promptly and
diligently, subject to reasonable delays for insurance adjustment or other
matters beyond Landlord’s reasonable control, and subject to all other terms of
this Article 11, restore the Base Building and such Common Areas. Such
restoration shall be to substantially the same condition of the Base Building
and the Common Areas prior to the casualty, except for modifications required by
zoning and building codes and other laws or by the holder of a mortgage on the
Building or Project or any other modifications to the Common Areas deemed
desirable by Landlord, provided that use of and access to the Premises and any
common restrooms serving the Premises shall not be materially impaired. Upon the
occurrence of any damage to the Premises, upon notice (the “Landlord Repair
Notice”) to Tenant from Landlord, Tenant shall assign to Landlord (or to any
party designated by Landlord) all insurance proceeds payable to Tenant under
Tenant’s insurance required under Section 10.3.2 (ii) and (iii) of this Lease,
and Landlord shall repair any injury or damage to the Tenant Improvements
installed in the Premises and shall return such Tenant Improvements to their
original condition; provided that if the cost of such repair by Landlord exceeds
the amount of insurance proceeds received by Landlord from Tenant’s insurance
carrier, as assigned by Tenant, the cost of such repairs shall be paid by Tenant
to Landlord prior to Landlord’s commencement of repair of the damage, or as soon
as such additional costs are known. In the event that Landlord does not deliver
the Landlord Repair Notice within sixty (60) days following the date the
casualty becomes known to Landlord, Tenant shall, at its sole cost and expense,
repair any injury or damage to the Tenant Improvements installed in the Premises
and shall return such Tenant Improvements to their original condition. Whether
or not Landlord delivers a Landlord Repair Notice, prior to the commencement of
construction, Tenant shall submit to Landlord, for Landlord’s review and
approval, all plans, specifications and working drawings relating thereto, and
Landlord shall select the contractors to perform such improvement work. Landlord
shall not be liable for any inconvenience or annoyance to Tenant or its
visitors, or injury to Tenant’s business resulting in any way from such damage
or the repair thereof; provided however, that if such fire or other casualty
shall have damaged the Premises or Common Areas necessary to Tenant’s access to
and occupancy of the Premises, Landlord shall allow Tenant a

 

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proportionate abatement of Rent, during the time and to the extent the Premises
are unfit for occupancy for the purposes permitted under this Lease, and not
occupied by Tenant as a result thereof; provided, further, however, that if the
damage or destruction is due to the negligence or wilful misconduct of Tenant or
any of its agents, employees, contractors, invitees or guests, Tenant shall be
responsible for any reasonable, applicable insurance deductible (which shall be
payable to Landlord upon demand) and there shall be no rent abatement. In the
event that Landlord shall not deliver the Landlord Repair Notice, Tenant’s right
to rent abatement pursuant to the preceding sentence shall terminate as of the
date which is reasonably determined by Landlord to be the date Tenant should
have completed repairs to the Premises assuming Tenant used reasonable due
diligence in connection therewith.

 

11.2 Landlord’s Option to Repair. Notwithstanding the terms of Section 11.1 of
this Lease, Landlord may elect not to rebuild and/or restore the Premises,
Building and/or Project, and instead terminate this Lease, by notifying Tenant
in writing of such termination within sixty (60) days after the date of damage,
such notice to include a termination date giving Tenant sixty (60) days to
vacate the Premises, but Landlord may so elect only if the Building or Project
shall be damaged by fire or other casualty or cause, whether or not the Premises
are affected, and one or more of the following conditions is present: (i) in
Landlord’s reasonable judgment, repairs cannot reasonably be completed within
ninety (90) days after the date of discovery of the damage (when such repairs
are made without the payment of overtime or other premiums); (ii) the holder of
any mortgage on the Building or Project or ground lessor with respect to the
Building or Project shall require that the insurance proceeds or any portion
thereof be used to retire the mortgage debt, or shall terminate the ground
lease, as the case may be; (iii) the damage is not fully covered by Landlord’s
insurance policies; or (iv) Landlord decides to rebuild the Building or Common
Areas so that they will be substantially different structurally or
architecturally; (v) the damage occurs during the last eighteen (18) months of
the Lease Term; or (vi) any owner of any other portion of the Project, other
than Landlord, does not intend to repair the damage to such portion of the
Project; provided, however, that if Landlord does not elect to terminate this
Lease pursuant to Landlord’s termination right as provided above, and the
repairs cannot, in the reasonable opinion of Landlord, be completed within one
hundred eighty (180) days after being commenced, or the damage occurs during the
last twelve (12) months of the Lease Term, Tenant may elect, no earlier than
sixty (60) days after the date of the damage and not later than ninety (90) days
after the date of such damage, to terminate this Lease by written notice to
Landlord effective as of the date specified in the notice, which date shall not
be less than thirty (30) days nor more than sixty (60) days after the date such
notice is given by Tenant.

 

11.3 Waiver of Statutory Provisions. The provisions of this Lease, including
this Article 11, constitute an express agreement between Landlord and Tenant
with respect to any and all damage to, or destruction of, all or any part of the
Premises, the Building or the Project, and any statute or regulation of the
State of California, including, without limitation, Sections 1932(2) and 1933(4)
of the California Civil Code, with respect to any rights or obligations
concerning damage or destruction in the absence of an express agreement between
the parties, and any other statute or regulation, now or hereafter in effect,
shall have no application to this Lease or any damage or destruction to all or
any part of the Premises, the Building or the Project.

 

ARTICLE 12

 

NONWAIVER

 

No provision of this Lease shall be deemed waived by either party hereto unless
expressly waived in a writing signed thereby. The waiver by either party hereto
of any breach of any term, covenant or condition herein contained shall not be
deemed to be a waiver of any subsequent breach of same or any other term,
covenant or condition herein contained. The subsequent acceptance of Rent
hereunder by Landlord shall not be deemed to be a waiver of any preceding breach
by Tenant of any term, covenant or condition of this Lease, other than the
failure of Tenant to pay the particular Rent so accepted, regardless of
Landlord’s knowledge of such preceding breach at the time of acceptance of such
Rent. No acceptance of a lesser amount than the Rent herein stipulated shall be
deemed a waiver of Landlord’s right to receive the full amount due, nor shall
any endorsement or statement on any check or payment or any letter accompanying
such check or payment be deemed an accord and satisfaction, and Landlord may
accept such check or payment without prejudice to Landlord’s right to recover
the full amount due. No receipt of monies by Landlord from Tenant after the
termination of this Lease shall in any way alter the length of the Lease Term or
of Tenant’s right of possession hereunder, or after

 

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the giving of any notice shall reinstate, continue or extend the Lease Term or
affect any notice given Tenant prior to the receipt of such monies, it being
agreed that after the service of notice or the commencement of a suit, or after
final judgment for possession of the Premises, Landlord may receive and collect
any Rent due, and the payment of said Rent shall not waive or affect said
notice, suit or judgment.

 

ARTICLE 13

 

CONDEMNATION

 

If the whole or any part of the Premises, Building or Project shall be taken by
power of eminent domain or condemned by any competent authority for any public
or quasi-public use or purpose, or if any adjacent property or street shall be
so taken or condemned, or reconfigured or vacated by such authority in such
manner as to require the use, reconstruction or remodeling of any part of the
Premises, Building or Project, or if Landlord shall grant a deed or other
instrument in lieu of such taking by eminent domain or condemnation, Landlord
shall have the option to terminate this Lease effective as of the date
possession is required to be surrendered to the authority. If more than
twenty-five percent (25%) of the rentable square feet of the Premises is taken,
or if access to the Premises is substantially impaired, in each case for a
period in excess of ninety (90) days, Tenant shall have the option to terminate
this Lease effective as of the date possession is required to be surrendered to
the authority. Tenant shall not because of such taking assert any claim against
Landlord or the authority for any compensation because of such taking and
Landlord shall be entitled to the entire award or payment in connection
therewith, except that Tenant shall have the right to file any separate claim
available to Tenant for any taking of Tenant’s personal property and fixtures
belonging to Tenant and removable by Tenant upon expiration of the Lease Term
pursuant to the terms of this Lease, and for moving expenses, so long as such
claims do not diminish the award available to Landlord, its ground lessor with
respect to the Building or Project or its mortgagee, and such claim is payable
separately to Tenant. All Rent shall be apportioned as of the date of such
termination. If any part of the Premises shall be taken, and this Lease shall
not be so terminated, the Rent shall be proportionately abated. Tenant hereby
waives any and all rights it might otherwise have pursuant to Section 1265.130
of The California Code of Civil Procedure. Notwithstanding anything to the
contrary contained in this Article 13, in the event of a temporary taking of all
or any portion of the Premises for a period of ninety (90) days or less, then
this Lease shall not terminate but the Base Rent and the Additional Rent shall
be abated for the period of such taking in proportion to the ratio that the
amount of rentable square feet of the Premises taken bears to the total rentable
square feet of the Premises. Landlord shall be entitled to receive the entire
award made in connection with any such temporary taking.

 

ARTICLE 14

 

ASSIGNMENT AND SUBLETTING

 

14.1 Transfers. Tenant shall not, without the prior written consent of Landlord,
assign, mortgage, pledge, hypothecate, encumber, or permit any lien to attach
to, or otherwise transfer, this Lease or any interest hereunder, permit any
assignment, or other transfer of this Lease or any interest hereunder by
operation of law, sublet the Premises or any part thereof, or enter into any
license or concession agreements or otherwise permit the occupancy or use of the
Premises or any part thereof by any persons other than Tenant and its employees
and contractors (all of the foregoing are hereinafter sometimes referred to
collectively as “Transfers” and any person to whom any Transfer is made or
sought to be made is hereinafter sometimes referred to as a “Transferee”). If
Tenant desires Landlord’s consent to any Transfer, Tenant shall notify Landlord
in writing, which notice (the “Transfer Notice”) shall include (i) the proposed
effective date of the Transfer, which shall not be less than thirty (30) days
nor more than one hundred eighty (180) days after the date of delivery of the
Transfer Notice, (ii) a description of the portion of the Premises to be
transferred (the “Subject Space”), (iii) all of the terms of the proposed
Transfer and the consideration therefor, including calculation of the “Transfer
Premium”, as that term is defined in Section 14.3 below, in connection with such
Transfer, the name and address of the proposed Transferee, and a copy of all
existing executed and/or proposed documentation pertaining to the proposed
Transfer, including all existing operative documents to be executed to evidence
such Transfer or the agreements incidental or related to such Transfer, provided
that Landlord shall have the right to require Tenant to utilize Landlord’s
standard Transfer documents in connection with the documentation of such
Transfer, (iv) current

 

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financial statements of the proposed Transferee certified by an officer, partner
or owner thereof, business credit and personal references and history of the
proposed Transferee and any other information required by Landlord which will
enable Landlord to determine the financial responsibility, character, and
reputation of the proposed Transferee, nature of such Transferee’s business and
proposed use of the Subject Space, and (v) an executed estoppel certificate from
Tenant in the form attached hereto as Exhibit E. Any Transfer made without
Landlord’s prior written consent shall, at Landlord’s option, be null, void and
of no effect, and shall, at Landlord’s option, constitute a default by Tenant
under this Lease. Whether or not Landlord consents to any proposed Transfer,
Tenant shall pay Landlord’s review and processing fees, as well as any
reasonable professional fees (including, without limitation, attorneys’,
accountants’, architects’, engineers’ and consultants’ fees) incurred by
Landlord, within thirty (30) days after written request by Landlord.

 

14.2 Landlord’s Consent. Landlord shall not unreasonably withhold its consent to
any proposed Transfer of the Subject Space to the Transferee on the terms
specified in the Transfer Notice. Without limitation as to other reasonable
grounds for withholding consent, the parties hereby agree that it shall be
reasonable under this Lease and under any applicable law for Landlord to
withhold consent to any proposed Transfer where one or more of the following
apply:

 

14.2.1 The Transferee is of a character or reputation or engaged in a business
which is not consistent with the quality of the Building or the Project, or
would be a significantly less prestigious occupant of the Building than Tenant;

 

14.2.2 The Transferee intends to use the Subject Space for purposes which are
not permitted under this Lease;

 

14.2.3 The Transferee is either a governmental agency or instrumentality
thereof;

 

14.2.4 Intentionally Deleted;

 

14.2.5 The Transferee is not a party of reasonable financial worth and/or
financial stability in light of the responsibilities to be undertaken in
connection with the Transfer on the date consent is requested;

 

14.2.6 The proposed Transfer would cause a violation of another lease for space
in the Project, or would give an occupant of the Project a right to cancel its
lease;

 

14.2.7 The terms of the proposed Transfer will allow the Transferee to exercise
a right of renewal, right of expansion, right of first offer, or other similar
right held by Tenant (or will allow the Transferee to occupy space leased by
Tenant pursuant to any such right); or

 

14.2.8 Either the proposed Transferee, or any person or entity which directly or
indirectly, controls, is controlled by, or is under common control with, the
proposed Transferee, (i) occupies space in the Project at the time of the
request for consent, or (ii) is negotiating or has negotiated with Landlord to
lease space in the Project.

 

14.2.9 The Transferee does not intend to occupy the entire Premises and conduct
its business therefrom for a substantial portion of the term of the Transfer.

 

If Landlord consents to any Transfer pursuant to the terms of this Section 14.2
(and does not exercise any recapture rights Landlord may have under Section 14.4
of this Lease), Tenant may within six (6) months after Landlord’s consent, but
not later than the expiration of said six-month period, enter into such Transfer
of the Premises or portion thereof, upon substantially the same terms and
conditions as are set forth in the Transfer Notice furnished by Tenant to
Landlord pursuant to Section 14.1 of this Lease, provided that if there are any
changes in the terms and conditions from those specified in the Transfer Notice
(i) such that Landlord would initially have been entitled to refuse its consent
to such Transfer under this Section 14.2, or (ii) which would cause the proposed
Transfer to be more favorable to the Transferee than the terms set forth in
Tenant’s original Transfer Notice, Tenant shall again submit the Transfer to
Landlord for its approval and other action under this Article 14 (including
Landlord’s right of recapture, if any, under Section 14.4 of this Lease).
Notwithstanding anything to the contrary in this Lease, if Tenant or any
proposed Transferee claims that Landlord has unreasonably withheld or delayed

 

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its consent under Section 14.2 or otherwise has breached or acted unreasonably
under this Article 14, their sole remedies shall be a declaratory judgment and
an injunction for the relief sought without any monetary damages, and Tenant
hereby waives all other remedies, including, without limitation, any right at
law or equity to terminate this Lease, on its own behalf and, to the extent
permitted under all applicable laws, on behalf of the proposed Transferee.
Tenant shall indemnify, defend and hold harmless Landlord from any and all
liability, losses, claims, damages, costs, expenses, causes of action and
proceedings involving any third party or parties (including without limitation
Tenant’s proposed subtenant or assignee) who claim they were damaged by
Landlord’s wrongful withholding or conditioning of Landlord’s consent.

 

14.3 Transfer Premium. If Landlord consents to a Transfer, as a condition
thereto which the parties hereby agree is reasonable, Tenant shall pay to
Landlord fifty percent (50%) of any “Transfer Premium,” as that term is defined
in this Section 14.3, received by Tenant from such Transferee, after deducting
the reasonable expenses incurred by Tenant for (i) any changes, alterations and
improvements to the Premises in connection with the Transfer, (ii) any
commercially reasonable brokerage commissions in connection with the Transfer,
(iii) reasonable legal fees in connection with the Transfer, and (iv) reasonable
out-of-pocket costs of advertising the Subject Space related to the Transfer.
“Transfer Premium” shall mean all rent, additional rent or other consideration
payable by such Transferee in connection with the Transfer in excess of the Rent
and Additional Rent payable by Tenant under this Lease during the term of the
Transfer on a per rentable square foot basis if less than all of the Premises is
transferred. “Transfer Premium” shall also include, but not be limited to, key
money, bonus money or other cash consideration paid by Transferee to Tenant in
connection with such Transfer, and any payment in excess of fair market value
for services rendered by Tenant to Transferee or for assets, fixtures,
inventory, equipment, or furniture transferred by Tenant to Transferee in
connection with such Transfer.

 

14.4 Landlord’s Option as to Subject Space. Notwithstanding anything to the
contrary contained in this Article 14, Landlord shall have the option, by giving
written notice to Tenant within thirty (30) days after receipt of any Transfer
Notice, to recapture the Subject Space. Such recapture notice shall cancel and
terminate this Lease with respect to the Subject Space as of the date stated in
the Transfer Notice as the effective date of the proposed Transfer until the
last day of the term of the Transfer as set forth in the Transfer Notice (or at
Landlord’s option, shall cause the Transfer to be made to Landlord or its agent,
in which case the parties shall execute the Transfer documentation promptly
thereafter). In the event of a recapture by Landlord, if this Lease shall be
canceled with respect to less than the entire Premises, the Rent reserved herein
shall be prorated on the basis of the number of rentable square feet retained by
Tenant in proportion to the number of rentable square feet contained in the
Premises, and this Lease as so amended shall continue thereafter in full force
and effect, and upon request of either party, the parties shall execute written
confirmation of the same. If Landlord declines, or fails to elect in a timely
manner to recapture the Subject Space under this Section 14.4, then, provided
Landlord has consented to the proposed Transfer, Tenant shall be entitled to
proceed to transfer the Subject Space to the proposed Transferee, subject to
provisions of this Article 14.

 

14.5 Effect of Transfer. If Landlord consents to a Transfer, (i) the terms and
conditions of this Lease shall in no way be deemed to have been waived or
modified, (ii) such consent shall not be deemed consent to any further Transfer
by either Tenant or a Transferee, (iii) Tenant shall deliver to Landlord,
promptly after execution, an original executed copy of all documentation
pertaining to the Transfer in form reasonably acceptable to Landlord, (iv)
Tenant shall furnish upon Landlord’s request a complete statement, certified by
an independent certified public accountant, or Tenant’s chief financial officer,
setting forth in detail the computation of any Transfer Premium Tenant has
derived and shall derive from such Transfer, and (v) no Transfer relating to
this Lease or agreement entered into with respect thereto, whether with or
without Landlord’s consent, shall relieve Tenant or any guarantor of the Lease
from any liability under this Lease, including, without limitation, in
connection with the Subject Space. Landlord or its authorized representatives
shall have the right at all reasonable times to audit the books, records and
papers of Tenant relating to any Transfer, and shall have the right to make
copies thereof. If the Transfer Premium respecting any Transfer shall be found
understated, Tenant shall, within thirty (30) days after demand, pay the
deficiency, and if understated by more than two percent (2%), Tenant shall pay
Landlord’s costs of such audit.

 

14.6 Additional Transfers. For purposes of this Lease, the term “Transfer” shall
also include (i) if Tenant is a partnership, the withdrawal or change,
voluntary, involuntary or by

 

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operation of law, of fifty percent (50%) or more of the partners, or transfer of
fifty percent (50%) or more of partnership interests, within a twelve (12)-month
period, or the dissolution of the partnership without immediate reconstitution
thereof, and (ii) if Tenant is a closely held corporation (i.e., whose stock is
not publicly held and not traded through an exchange or over the counter), (A)
the dissolution, merger, consolidation or other reorganization of Tenant or (B)
the sale or other transfer of an aggregate of fifty percent (50%) or more of the
voting shares of Tenant (other than to immediate family members by reason of
gift or death), within a twelve (12)-month period, or (C) the sale, mortgage,
hypothecation or pledge of an aggregate of fifty percent (50%) or more of the
value of the unencumbered assets of Tenant within a twelve (12)-month period.

 

14.7 Occurrence of Default. Any Transfer hereunder shall be subordinate and
subject to the provisions of this Lease, and if this Lease shall be terminated
during the term of any Transfer, Landlord shall have the right to: (i) treat
such Transfer as cancelled and repossess the Subject Space by any lawful means,
or (ii) require that such Transferee attorn to and recognize Landlord as its
landlord under any such Transfer. If Tenant shall be in default under this
Lease, Landlord is hereby irrevocably authorized, as Tenant’s agent and
attorney-in-fact, to direct any Transferee to make all payments under or in
connection with the Transfer directly to Landlord (which Landlord shall apply
towards Tenant’s obligations under this Lease) until such default is cured. Such
Transferee shall rely on any representation by Landlord that Tenant is in
default hereunder, without any need for confirmation thereof by Tenant. Upon any
assignment, the assignee shall assume in writing all obligations and covenants
of Tenant thereafter to be performed or observed under this Lease. No collection
or acceptance of rent by Landlord from any Transferee shall be deemed a waiver
of any provision of this Article 14 or the approval of any Transferee or a
release of Tenant from any obligation under this Lease, whether theretofore or
thereafter accruing. In no event shall Landlord’s enforcement of any provision
of this Lease against any Transferee be deemed a waiver of Landlord’s right to
enforce any term of this Lease against Tenant or any other person. If Tenant’s
obligations hereunder have been guaranteed, Landlord’s consent to any Transfer
shall not be effective unless the guarantor also consents to such Transfer.

 

ARTICLE 15

 

SURRENDER OF PREMISES; OWNERSHIP AND

REMOVAL OF TRADE FIXTURES

 

15.1 Surrender of Premises. No act or thing done by Landlord or any agent or
employee of Landlord during the Lease Term shall be deemed to constitute an
acceptance by Landlord of a surrender of the Premises unless such intent is
specifically acknowledged in writing by Landlord. The delivery of keys to the
Premises to Landlord or any agent or employee of Landlord shall not constitute a
surrender of the Premises or effect a termination of this Lease, whether or not
the keys are thereafter retained by Landlord, and notwithstanding such delivery
Tenant shall be entitled to the return of such keys at any reasonable time upon
request until this Lease shall have been properly terminated. The voluntary or
other surrender of this Lease by Tenant, whether accepted by Landlord or not, or
a mutual termination hereof, shall not work a merger, and at the option of
Landlord shall operate as an assignment to Landlord of all subleases or
subtenancies affecting the Premises or terminate any or all such sublessees or
subtenancies.

 

15.2 Removal of Tenant Property by Tenant. Upon the expiration of the Lease
Term, or upon any earlier termination of this Lease, Tenant shall, subject to
the provisions of this Article 15, quit and surrender possession of the Premises
to Landlord in as good order and condition as when Tenant took possession and as
thereafter improved by Landlord and/or Tenant, reasonable wear and tear and
repairs which are specifically made the responsibility of Landlord hereunder
excepted. Upon such expiration or termination, Tenant shall, without expense to
Landlord, remove or cause to be removed from the Premises all debris and
rubbish, and such items of furniture, equipment, business and trade fixtures,
free-standing cabinet work, movable partitions and other articles of personal
property owned by Tenant or installed or placed by Tenant at its expense in the
Premises, and such similar articles of any other persons claiming under Tenant,
as Landlord may, in its sole discretion, require to be removed (the “Tenant
Personal Property”), and Tenant shall repair at its own expense all damage to
the Premises and Building resulting from such removal. Landlord shall have the
right, at Tenant’s sole cost and expense, to dispose of any Tenant Personal
Property remaining in the Premises after Tenant’s vacation of the same in any
manner Landlord sees fit.

 

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ARTICLE 16

 

HOLDING OVER

 

If Tenant holds over after the expiration of the Lease Term or earlier
termination thereof, with or without the express or implied consent of Landlord,
such tenancy shall be from month-to-month only, and shall not constitute a
renewal hereof or an extension for any further term, and in such case Rent shall
be payable at a monthly rate equal to the product of (i) the Rent applicable
during the last rental period of the Lease Term under this Lease, and (ii) a
percentage equal to the sum of (A) 200% and (B) the percentage by which Rent was
increased at the time of the last increase of Rent during the Lease Term. Such
month-to-month tenancy shall be subject to every other applicable term, covenant
and agreement contained herein. Nothing contained in this Article 16 shall be
construed as consent by Landlord to any holding over by Tenant, and Landlord
expressly reserves the right to require Tenant to surrender possession of the
Premises to Landlord as provided in this Lease upon the expiration or other
termination of this Lease. The provisions of this Article 16 shall not be deemed
to limit or constitute a waiver of any other rights or remedies of Landlord
provided herein or at law. If Tenant fails to surrender the Premises upon the
termination or expiration of this Lease, in addition to any other liabilities to
Landlord accruing therefrom, Tenant shall protect, defend, indemnify and hold
Landlord harmless from all loss, costs (including reasonable attorneys’ fees)
and liability resulting from such failure, including, without limiting the
generality of the foregoing, any claims made by any succeeding tenant founded
upon such failure to surrender and any lost profits to Landlord resulting
therefrom.

 

ARTICLE 17

 

ESTOPPEL CERTIFICATES

 

Within ten (10) business days following a request in writing by Landlord or
Tenant, Tenant or Landlord, as the case may be, shall execute, acknowledge and
deliver to the requesting party (the “Requesting Party“), an estoppel
certificate, which, as submitted by the Requesting Party, shall be substantially
in the reasonable form of Exhibit E, attached hereto (or such other commercially
reasonable form as may be required by any prospective mortgagee or purchaser of
the Project, or any portion thereof, or any assignee or sublessee), indicating
therein any exceptions thereto that may exist at that time, and shall also
contain any other information reasonably requested by the Requesting Party or
Landlord’s mortgagee, as the case may be. Neither party shall make such a
request more than two (2) times in any twelve (12) month period (unless required
more often as a result of a pending bona fide sale or financing of the Project,
or a Tenant financing). The appropriate modification shall be made to Exhibit E
when Tenant is the Requesting Party. Any such certificate may be relied upon by
any prospective mortgagee or purchaser of all or any portion of the Project. At
any time during the Lease Term, but no more than two times in any twelve (12)
month period (unless required more often as a result of a pending bona fide sale
or financing of the Project or Building), Landlord may require Tenant to provide
Landlord with the most recent financial statements of Tenant and financial
statements of Tenant for the two (2) years prior to the most recent financial
statement of Tenant. Such statements shall be prepared in accordance with
generally accepted accounting principles and shall be audited by an independent
certified public accountant. Failure of Tenant or Landlord, as the case may be,
to timely execute, acknowledge and deliver such estoppel certificate or other
instruments upon five (5) additional business days notice from the Requesting
Party advising the other party of the consequences of a non-response, shall
constitute an acceptance of the premises stated herein and an acknowledgment by
the other party that statements included in the estoppel certificate are true
and correct, without exception.

 

ARTICLE 18

 

SUBORDINATION

 

This Lease shall be subject and subordinate to all present and future ground or
underlying leases of the Building or Project and to the lien of any mortgage,
trust deed or other encumbrances now or hereafter in force against the Building
or Project or any part thereof, if any, and to all renewals, extensions,
modifications, consolidations and replacements thereof, and to all advances made
or hereafter to be made upon the security of such mortgages or trust deeds,
unless the holders of such mortgages, trust deeds or other encumbrances, or the
lessors under

 

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such ground lease or underlying leases, require in writing that this Lease be
superior thereto. In consideration of, and as a condition precedent to, Tenant’s
agreement to permit its interest pursuant to this Lease to be subordinated to
any particular future ground or underlying lease of the Building or the Project
or to the lien of any first mortgage or trust deed, hereafter enforced against
the Building or the Project and to any renewals, extensions, modifications,
consolidations and replacements thereof, Landlord shall deliver to Tenant a
commercially reasonable non-disturbance agreement executed by the landlord under
such ground lease or underlying lease or the holder of such mortgage or trust
deed, as appropriate. Tenant covenants and agrees in the event any proceedings
are brought for the foreclosure of any such mortgage or deed in lieu thereof (or
if any ground lease is terminated), to attorn, without any deductions or
set-offs whatsoever, to the lienholder or purchaser or any successors thereto
upon any such foreclosure sale or deed in lieu thereof (or to the ground
lessor), if so requested to do so by such purchaser or lienholder or ground
lessor, and to recognize such purchaser or lienholder or ground lessor as the
lessor under this Lease, provided such lienholder or purchaser or ground lessor
shall agree to accept this Lease and shall not disturb Tenant’s occupancy, so
long as Tenant timely pays the rent and observes and performs the terms,
covenants and conditions of this Lease to be observed and performed by Tenant.
Landlord’s interest herein may be assigned as security at any time to any
lienholder. Tenant shall, within five (5) days of request by Landlord, execute
such further commercially reasonable instruments or assurances as Landlord may
reasonably deem necessary to evidence or confirm the subordination or
superiority of this Lease to any such mortgages, trust deeds, ground leases or
underlying leases. Tenant waives the provisions of any current or future
statute, rule or law which may give or purport to give Tenant any right or
election to terminate or otherwise adversely affect this Lease and the
obligations of the Tenant hereunder in the event of any foreclosure proceeding
or sale. Tenant shall, within five (5) days of request by Landlord from time to
time, (i) execute a commercially reasonable Nondisturbance and Attornment
Agreement reasonably approved by Landlord’s mortgagee in favor of any mortgagee
of the Building or Project, and (ii) execute any other form of commercially
reasonable nondisturbance and attornment agreement (or subordination,
nondisturbance and attornment agreement, or subordination of the applicable
mortgagee’s lien) reasonably required by any mortgagee of the Building or
Project which provides comparable nondisturbance protection to Tenant in the
event of a foreclosure.

 

ARTICLE 19

 

DEFAULTS; REMEDIES

 

19.1 Events of Default. The occurrence of any of the following shall constitute
a default of this Lease by Tenant:

 

19.1.1 Any failure by Tenant to pay any Rent or any other charge required to be
paid under this Lease, or any part thereof, when due unless such failure is
cured within three (3) days after notice; or

 

19.1.2 Except where a specific time period is otherwise set forth for Tenant’s
performance in this Lease, in which event the failure to perform by Tenant
within such time period shall be a default by Tenant under this Section 19.1.2,
any failure by Tenant to observe or perform any other provision, covenant or
condition of this Lease to be observed or performed by Tenant where such failure
continues for twenty (20) days after written notice thereof from Landlord to
Tenant; provided that if the nature of such default is such that the same cannot
reasonably be cured within a twenty (20) day period, Tenant shall not be deemed
to be in default if it diligently commences such cure within such period and
thereafter diligently proceeds to rectify and cure such default, but in no event
exceeding a period of time in excess of sixty (60) days after written notice
thereof from Landlord to Tenant; or

 

19.1.3 To the extent permitted by law, a general assignment by Tenant or any
guarantor of the Lease for the benefit of creditors, or the taking of any
corporate action in furtherance of bankruptcy or dissolution whether or not
there exists any proceeding under an insolvency or bankruptcy law, or the filing
by or against Tenant or any guarantor of any proceeding under an insolvency or
bankruptcy law, unless in the case of a proceeding filed against Tenant or any
guarantor the same is dismissed within sixty (60) days, or the appointment of a
trustee or receiver to take possession of all or substantially all of the assets
of Tenant or any guarantor, unless possession is restored to Tenant or such
guarantor within thirty (30) days, or any execution or other judicially
authorized seizure of all or substantially all of Tenant’s assets located upon
the Premises or of Tenant’s interest in this Lease, unless such seizure is
discharged within thirty (30) days; or

 

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19.1.4 Abandonment or vacation of all or a substantial portion of the Premises
by Tenant; or

 

19.1.5 The failure by Tenant to observe or perform according to the provisions
of Articles 5, 14, 17 or 18 of this Lease where such failure continues for more
than two (2) business days after notice from Landlord.

 

The notice periods provided herein are in lieu of, and not in addition to, any
notice periods provided by law.

 

19.2 Remedies Upon Default. Upon the occurrence of any event of default by
Tenant, Landlord shall have, in addition to any other remedies available to
Landlord at law or in equity (all of which remedies shall be distinct, separate
and cumulative), the option to pursue any one or more of the following remedies,
each and all of which shall be cumulative and nonexclusive, without any notice
or demand whatsoever.

 

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

 

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

 

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

 

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

 

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

 

(v) At Landlord’s election, such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to time by applicable law.

 

The term “rent” as used in this Section 19.2 shall be deemed to be and to mean
all sums of every nature required to be paid by Tenant pursuant to the terms of
this Lease, whether to Landlord or to others. As used in Paragraphs 19.2.1(i)
and (ii), above, the “worth at the time of award” shall be computed by allowing
interest at the rate set forth in Article 25 of this Lease, but in no case
greater than the maximum amount of such interest permitted by law. As used in
Paragraph 19.2.1(iii) above, the “worth at the time of award” shall be computed
by discounting such amount at the discount rate of the Federal Reserve Bank of
San Francisco at the time of award plus one percent (1%).

 

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

 

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19.2.3 Landlord shall at all times have the rights and remedies (which shall be
cumulative with each other and cumulative and in addition to those rights and
remedies available under Sections 19.2.1 and 19.2.2, above, or any law or other
provision of this Lease), without prior demand or notice except as required by
applicable law, to seek any declaratory, injunctive or other equitable relief,
and specifically enforce this Lease, or restrain or enjoin a violation or breach
of any provision hereof.

 

19.3 Subleases of Tenant. Whether or not Landlord elects to terminate this Lease
on account of any default by Tenant, as set forth in this Article 19, in the
event of an event of default by Tenant, Landlord shall have the right to
terminate any and all subleases, licenses, concessions or other consensual
arrangements for possession entered into by Tenant and affecting the Premises
within ten (10) days of notice from Landlord, or may, in Landlord’s sole
discretion, succeed to Tenant’s interest in such subleases, licenses,
concessions or arrangements. In the event of Landlord’s election to succeed to
Tenant’s interest in any such subleases, licenses, concessions or arrangements,
Tenant shall, as of the date of notice by Landlord of such election, have no
further right to or interest in the rent or other consideration receivable
thereunder.

 

19.4 Form of Payment After Default. Following the occurrence of two (2) separate
events of monetary default by Tenant during any twelve (12) month period during
the Lease Term, Landlord shall have the right to require that any or all
subsequent amounts paid by Tenant to Landlord hereunder, whether to cure the
default in question or otherwise, be paid in the form of money order, cashier’s
or certified check drawn on an institution acceptable to Landlord, or by other
means reasonably approved by Landlord, notwithstanding any prior practice of
accepting payments in any different form.

 

19.5 Efforts to Relet. No re-entry or repossession, repairs, maintenance,
changes, alterations and additions, reletting, appointment of a receiver to
protect Landlord’s interests hereunder, or any other action or omission by
Landlord shall be construed as an election by Landlord to terminate this Lease
or Tenant’s right to possession, or to accept a surrender of the Premises, nor
shall same operate to release Tenant in whole or in part from any of Tenant’s
obligations hereunder, unless express written notice of such intention is sent
by Landlord to Tenant. Tenant hereby irrevocably waives any right otherwise
available under any law to redeem or reinstate this Lease.

 

ARTICLE 20

 

COVENANT OF QUIET ENJOYMENT

 

Landlord covenants that Tenant, on paying the Rent, charges for services and
other payments herein reserved and on keeping, observing and performing all the
other terms, covenants, conditions, provisions and agreements herein contained
on the part of Tenant to be kept, observed and performed, shall, during the
Lease Term, peaceably and quietly have, hold and enjoy the Premises subject to
the terms, covenants, conditions, provisions and agreements hereof without
interference by any persons lawfully claiming by or through Landlord. The
foregoing covenant is in lieu of any other covenant express or implied.

 

ARTICLE 21

 

SECURITY DEPOSIT

 

Concurrent with Tenant’s execution of this Lease, Tenant shall deposit with
Landlord a security deposit (the “Security Deposit”) in the amount set forth in
Section 8 of the Summary, as security for the faithful performance by Tenant of
all of its obligations under this Lease. If Tenant defaults with respect to any
provisions of this Lease, including, but not limited to, the provisions relating
to the payment of Rent, the removal of property and the repair of resultant
damage, Landlord may, without notice to Tenant, but shall not be required to
apply all or any part of the Security Deposit for the payment of any Rent or any
other sum in default and Tenant shall, upon demand therefor, restore the
Security Deposit to its original amount. Any unapplied portion of the Security
Deposit shall be returned to Tenant, or, at Landlord’s option, to the last
assignee of Tenant’s interest hereunder, within sixty (60) days following the
expiration of the Lease Term. Tenant shall not be entitled to any interest on
the Security Deposit. Tenant hereby waives the provisions of Section 1950.7 of
the California Civil Code, or any successor statute.

 

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ARTICLE 22

 

SUBSTITUTION OF OTHER PREMISES

 

Landlord shall have the right to move Tenant to other space located on the sixth
(6th) floor of the Building comparable to the Premises, in the same basic
configuration as the Premises, and all terms hereof shall apply to the new space
with equal force. In such event, Landlord shall give Tenant not less than sixty
(60) days prior notice, shall provide Tenant, at Landlord’s sole cost and
expense, with tenant improvements at least equal in quality to those in the
Premises and shall move Tenant’s effects to the new space at Landlord’s sole
cost and expense at such time and in such manner as to inconvenience Tenant as
little as reasonably practicable. Landlord shall reimburse Tenant for Tenant’s
reasonable, actual out-of-pocket expenses incurred in connection with such
relocation. Simultaneously with such relocation of the Premises, the parties
shall immediately execute an amendment to this Lease stating the relocation of
the Premises.

 

ARTICLE 23

 

SIGNS

 

23.1 Full Floors. Subject to Landlord’s prior written approval, in its sole
discretion, and provided all signs are in keeping with the quality, design and
style of the Building and Project, Tenant, if the Premises comprise an entire
floor of the Building, at its sole cost and expense, may install identification
signage anywhere in the Premises including in the elevator lobby of the
Premises, provided that such signs must not be visible from the exterior of the
Building.

 

23.2 Multi-Tenant Floors. If other tenants occupy space on the floor on which
the Premises is located, Tenant’s identifying signage shall be provided by
Landlord, at Tenant’s cost, and such signage shall be comparable to that used by
Landlord for other similar floors in the Building and shall comply with
Landlord’s Building standard signage program.

 

23.3 Prohibited Signage and Other Items. Any signs, notices, logos, pictures,
names or advertisements which are installed and that have not been separately
approved by Landlord may be removed without notice by Landlord at the sole
expense of Tenant. Tenant may not install any signs on the exterior or roof of
the Project or the Common Areas. Any signs, window coverings, or blinds (even if
the same are located behind the Landlord-approved window coverings for the
Building), or other items visible from the exterior of the Premises or Building,
shall be subject to the prior approval of Landlord, in its sole discretion.

 

23.4 Building Directory. Tenant shall be provided one (1) line per each 1,000
rentable square feet contained in the Premises to display Tenant’s name and
location in the Building on the Building directory located in the lobby of the
Building, and the names of Tenant’s principal employees and subtenants.

 

ARTICLE 24

 

COMPLIANCE WITH LAW

 

Tenant shall not do anything or suffer anything to be done in or about the
Premises or the Project which will in any way conflict with any law, statute,
ordinance or other governmental rule, regulation or requirement now in force or
which may hereafter be enacted or promulgated (collectively, “Applicable Laws”).
At its sole cost and expense, Tenant shall promptly comply with all such
Applicable Laws which relate to (i) Tenant’s use of the Premises, (ii) any
Alterations made by Tenant to the Premises, and any tenant improvements in the
Premises, or (iii) the Base Building, but as to the Base Building, only to the
extent such obligations are triggered by Alterations made by Tenant to the
Premises, or the tenant improvements, or use of the Premises for non-typical
general office use. Should any standard or regulation now or hereafter be
imposed on Landlord or Tenant by a state, federal or local governmental body
charged with the establishment, regulation and enforcement of occupational,
health or safety standards for employers, employees, landlords or tenants, then
Tenant agrees, at its sole cost and expense, to comply promptly with such
standards or regulations. Tenant shall be responsible, at its sole cost and
expense, to make all alterations to the Premises as are required to comply with

 

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the governmental rules, regulations, requirements or standards described in this
Article 24. The judgment of any court of competent jurisdiction or the admission
of Tenant in any judicial action, regardless of whether Landlord is a party
thereto, that Tenant has violated any of said governmental measures, shall be
conclusive of that fact as between Landlord and Tenant. Landlord shall comply
with all Applicable Laws relating to the Base Building, provided that compliance
with such Applicable Laws is not the responsibility of Tenant under this Lease,
and provided further that Landlord’s failure to comply therewith would prohibit
Tenant from obtaining or maintaining a certificate of occupancy (or its
equivalent) for the Premises, or would unreasonably and materially affect the
safety of Tenant’s employees or create a significant health hazard for Tenant’s
employees. Landlord shall be permitted to include in Operating Expenses any
costs or expenses incurred by Landlord under this Article 24 to the extent
consistent with the terms of Section 4.2.4 above.

 

ARTICLE 25

 

LATE CHARGES

 

If any installment of Rent or any other sum due from Tenant shall not be
received by Landlord or Landlord’s designee within five (5) days after said
amount is due, then Tenant shall pay to Landlord a late charge equal to ten
percent (10%) of the overdue amount plus any attorneys’ fees incurred by
Landlord by reason of Tenant’s failure to pay Rent and/or other charges when due
hereunder. The late charge shall be deemed Additional Rent and the right to
require it shall be in addition to all of Landlord’s other rights and remedies
hereunder or at law and shall not be construed as liquidated damages or as
limiting Landlord’s remedies in any manner. In addition to the late charge
described above, any Rent or other amounts owing hereunder which are not paid
within ten (10) days after the date they are due shall bear interest from the
date when due until paid at a rate per annum equal to the highest rate permitted
by applicable law.

 

ARTICLE 26

 

LANDLORD’S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT

 

26.1 Landlord’s Cure. All covenants and agreements to be kept or performed by
Tenant under this Lease shall be performed by Tenant at Tenant’s sole cost and
expense and without any reduction of Rent, except to the extent, if any,
otherwise expressly provided herein. If Tenant shall fail to perform any
obligation under this Lease, and such failure shall continue in excess of the
time allowed under Section 19.1.2, above, unless a specific time period is
otherwise stated in this Lease, Landlord may, but shall not be obligated to,
make any such payment or perform any such act on Tenant’s part without waiving
its rights based upon any default of Tenant and without releasing Tenant from
any obligations hereunder.

 

26.2 Tenant’s Reimbursement. Except as may be specifically provided to the
contrary in this Lease, Tenant shall pay to Landlord, upon delivery by Landlord
to Tenant of statements therefor: (i) sums equal to expenditures reasonably made
and obligations incurred by Landlord in connection with the remedying by
Landlord of Tenant’s defaults pursuant to the provisions of Section 26.1; (ii)
sums equal to all losses, costs, liabilities, damages and expenses referred to
in Article 10 of this Lease; and (iii) sums equal to all reasonable expenditures
made and obligations incurred by Landlord in collecting or attempting to collect
the Rent or in enforcing or attempting to enforce any rights of Landlord under
this Lease or pursuant to law, including, without limitation, all reasonable
legal fees and other amounts so expended. Tenant’s obligations under this
Section 26.2 shall survive the expiration or sooner termination of the Lease
Term.

 

ARTICLE 27

 

ENTRY BY LANDLORD

 

Landlord reserves the right at all reasonable times and upon not less than
twenty-four (24) hours notice to Tenant (except in the case of an emergency) to
enter the Premises to (i) inspect them; (ii) show the Premises to prospective
purchasers, mortgagees or tenants, or to current or prospective mortgagees,
ground or underlying lessors or insurers; (iii) post notices of
nonresponsibility; or (iv) alter, improve or repair the Premises, the premises
of other tenants in

 

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the Building, or the Building, or for structural alterations, repairs, additions
or improvements to the Building or the Building’s systems and equipment. Tenant
may have a representative of Tenant accompany Landlord during its entries (other
than regularly scheduled entries made for the provision of janitorial services,
etc.) provided that such representative is made available at the time of such
entry and does not interfere with Landlord’s entry onto the Premises in
accordance with the terms of this Article 27. Notwithstanding anything to the
contrary contained in this Article 27, Landlord may enter the Premises at any
time to (A) perform services required of Landlord, including janitorial service;
(B) take possession due to any breach of this Lease in the manner provided
herein; and (C) perform any covenants of Tenant which Tenant fails to perform.
Landlord may make any such entries without the abatement of Rent and may take
such reasonable steps as required to accomplish the stated purposes. Tenant
hereby waives any claims for damages or for any injuries or inconvenience to or
interference with Tenant’s business, lost profits, any loss of occupancy or
quiet enjoyment of the Premises, and any other loss occasioned thereby. For each
of the above purposes, Landlord shall at all times have a key with which to
unlock all the doors in the Premises, excluding Tenant’s vaults, safes and
special security areas designated in advance by Tenant. In an emergency,
Landlord shall have the right to use any means that Landlord may deem proper to
open the doors in and to the Premises. Any entry into the Premises by Landlord
in the manner hereinbefore described shall not be deemed to be a forcible or
unlawful entry into, or a detainer of, the Premises, or an actual or
constructive eviction of Tenant from any portion of the Premises. No provision
of this Lease shall be construed as obligating Landlord to perform any repairs,
alterations or decorations except as otherwise expressly agreed to be performed
by Landlord herein.

 

ARTICLE 28

 

TENANT PARKING

 

Tenant shall rent from Landlord, commencing on the Lease Commencement Date, the
amount of parking passes set forth in Section 9 of the Summary, on a monthly
basis throughout the Lease Term, which parking passes shall pertain to the
Project parking facility. Tenant shall pay to Landlord for automobile parking
passes on a monthly basis the prevailing rate charged from time to time at the
location of such parking passes. In addition, Tenant shall be responsible for
the full amount of any taxes imposed by any governmental authority in connection
with the renting of such parking passes by Tenant or the use of the parking
facility by Tenant. Tenant’s continued right to use the parking passes is
conditioned upon Tenant abiding by all rules and regulations which are
prescribed from time to time for the orderly operation and use of the parking
facility where the parking passes are located, including any sticker or other
identification system established by Landlord, Tenant’s cooperation in seeing
that Tenant’s employees and visitors also comply with such rules and regulations
and Tenant not being in default under this Lease. Landlord specifically reserves
the right to change the location, size, configuration, design, layout and all
other aspects of the Project parking facility at any time and Tenant
acknowledges and agrees that Landlord may, without incurring any liability to
Tenant and without any abatement of Rent under this Lease, from time to time,
close-off or restrict access to the Project parking facility for purposes of
permitting or facilitating any such construction, alteration or improvements or
cease providing the parking passes if space is no longer available. Landlord may
delegate its responsibilities hereunder to a parking operator in which case such
parking operator shall have all the rights of control attributed hereby to the
Landlord. The parking passes rented by Tenant pursuant to this Article 28 are
provided to Tenant solely for use by Tenant’s own personnel and such passes may
not be transferred, assigned, subleased or otherwise alienated by Tenant without
Landlord’s prior approval. Tenant may validate visitor parking by such method or
methods as the Landlord may establish, at the validation rate from time to time
generally applicable to visitor parking.

 

ARTICLE 29

 

MISCELLANEOUS PROVISIONS

 

29.1 Terms; Captions. The words “Landlord” and “Tenant” as used herein shall
include the plural as well as the singular. The necessary grammatical changes
required to make the provisions hereof apply either to corporations or
partnerships or individuals, men or women, as the case may require, shall in all
cases be assumed as though in each case fully expressed. The captions of
Articles and Sections are for convenience only and shall not be deemed to limit,
construe, affect or alter the meaning of such Articles and Sections.

 

    -29-  

CHINA BASIN LANDING

[Sirna Therapeutics, Inc.]

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29.2 Binding Effect. Subject to all other provisions of this Lease, each of the
covenants, conditions and provisions of this Lease shall extend to and shall, as
the case may require, bind or inure to the benefit not only of Landlord and of
Tenant, but also of their respective heirs, personal representatives, successors
or assigns, provided this clause shall not permit any assignment by Tenant
contrary to the provisions of Article 14 of this Lease.

 

29.3 No Air Rights. No rights to any view or to light or air over any property,
whether belonging to Landlord or any other person, are granted to Tenant by this
Lease. If at any time any windows of the Premises are temporarily darkened or
the light or view therefrom is obstructed by reason of any repairs,
improvements, maintenance or cleaning in or about the Project, the same shall be
without liability to Landlord and without any reduction or diminution of
Tenant’s obligations under this Lease.

 

29.4 Modification of Lease. Should any current or prospective mortgagee or
ground lessor for the Building or Project require a modification of this Lease,
which modification will not cause an increased cost or expense to Tenant or in
any other way materially and adversely change the rights and obligations of
Tenant hereunder, then and in such event, Tenant agrees that this Lease may be
so modified and agrees to execute whatever documents are reasonably required
therefor and to deliver the same to Landlord within ten (10) days following a
request therefor. At the request of Landlord or any mortgagee or ground lessor,
Tenant agrees to execute a short form of Lease and deliver the same to Landlord
within ten (10) days following the request therefor.

 

29.5 Transfer of Landlord’s Interest. Tenant acknowledges that Landlord has the
right to transfer all or any portion of its interest in the Project or Building
and in this Lease, and Tenant agrees that in the event of any such transfer,
Landlord shall automatically be released from all liability under this Lease and
Tenant agrees to look solely to such transferee for the performance of
Landlord’s obligations hereunder after the date of transfer and such transferee
shall be deemed to have fully assumed and be liable for all obligations of this
Lease to be performed by Landlord, including the return of any Security Deposit,
and Tenant shall attorn to such transferee. Tenant further acknowledges that
Landlord may assign its interest in this Lease to a mortgage lender as
additional security and agrees that such an assignment shall not release
Landlord from its obligations hereunder and that Tenant shall continue to look
to Landlord for the performance of its obligations hereunder.

 

29.6 Prohibition Against Recording. Except as provided in Section 29.4 of this
Lease, neither this Lease, nor any memorandum, affidavit or other writing with
respect thereto, shall be recorded by Tenant or by anyone acting through, under
or on behalf of Tenant.

 

29.7 Landlord’s Title. Landlord’s title is and always shall be paramount to the
title of Tenant. Nothing herein contained shall empower Tenant to do any act
which can, shall or may encumber the title of Landlord.

 

29.8 Relationship of Parties. Nothing contained in this Lease shall be deemed or
construed by the parties hereto or by any third party to create the relationship
of principal and agent, partnership, joint venturer or any association between
Landlord and Tenant.

 

29.9 Application of Payments. Landlord shall have the right to apply payments
received from Tenant pursuant to this Lease, regardless of Tenant’s designation
of such payments, to satisfy any obligations of Tenant hereunder, in such order
and amounts as Landlord, in its sole discretion, may elect.

 

29.10 Time of Essence. Time is of the essence with respect to the performance of
every provision of this Lease in which time of performance is a factor.

 

29.11 Partial Invalidity. If any term, provision or condition contained in this
Lease shall, to any extent, be invalid or unenforceable, the remainder of this
Lease, or the application of such term, provision or condition to persons or
circumstances other than those with respect to which it is invalid or
unenforceable, shall not be affected thereby, and each and every other term,
provision and condition of this Lease shall be valid and enforceable to the
fullest extent possible permitted by law.

 

    -30-  

CHINA BASIN LANDING

[Sirna Therapeutics, Inc.]

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29.12 No Warranty. In executing and delivering this Lease, Tenant has not relied
on any representations, including, but not limited to, any representation as to
the amount of any item comprising Additional Rent or the amount of the
Additional Rent in the aggregate or that Landlord is furnishing the same
services to other tenants, at all, on the same level or on the same basis, or
any warranty or any statement of Landlord which is not set forth herein or in
one or more of the exhibits attached hereto.

 

29.13 Landlord Exculpation. The liability of Landlord or the Landlord Parties to
Tenant for any default by Landlord under this Lease or arising in connection
herewith or with Landlord’s operation, management, leasing, repair, renovation,
alteration or any other matter relating to the Project or the Premises shall be
limited solely and exclusively to an amount which is equal to the interest of
Landlord in the Building. Neither Landlord, nor any of the Landlord Parties
shall have any personal liability therefor, and Tenant hereby expressly waives
and releases such personal liability on behalf of itself and all persons
claiming by, through or under Tenant. The limitations of liability contained in
this Section 29.13 shall inure to the benefit of Landlord’s and the Landlord
Parties’ present and future partners, beneficiaries, officers, directors,
trustees, shareholders, agents and employees, and their respective partners,
heirs, successors and assigns. Under no circumstances shall any present or
future partner of Landlord (if Landlord is a partnership), or trustee or
beneficiary (if Landlord or any partner of Landlord is a trust), have any
liability for the performance of Landlord’s obligations under this Lease.
Notwithstanding any contrary provision herein, neither Landlord nor the Landlord
Parties shall be liable under any circumstances for injury or damage to, or
interference with, Tenant’s business, including but not limited to, loss of
profits, loss of rents or other revenues, loss of business opportunity, loss of
goodwill or loss of use, in each case, however occurring.

 

29.14 Entire Agreement. It is understood and acknowledged that there are no oral
agreements between the parties hereto affecting this Lease and this Lease
constitutes the parties’ entire agreement with respect to the leasing of the
Premises and supersedes and cancels any and all previous negotiations,
arrangements, brochures, agreements and understandings, if any, between the
parties hereto or displayed by Landlord to Tenant with respect to the subject
matter thereof, and none thereof shall be used to interpret or construe this
Lease. None of the terms, covenants, conditions or provisions of this Lease can
be modified, deleted or added to except in writing signed by the parties hereto.

 

29.15 Right to Lease. Landlord reserves the absolute right to effect such other
tenancies in the Project as Landlord in the exercise of its sole business
judgment shall determine to best promote the interests of the Building or
Project. Tenant does not rely on the fact, nor does Landlord represent, that any
specific tenant or type or number of tenants shall, during the Lease Term,
occupy any space in the Building or Project.

 

29.16 Force Majeure. Any prevention, delay or stoppage due to strikes, lockouts,
labor disputes, acts of God, inability to obtain services, labor, or materials
or reasonable substitutes therefor, governmental actions, civil commotions, fire
or other casualty, and other causes beyond the reasonable control of the party
obligated to perform, except with respect to the obligations imposed with regard
to Rent and other charges to be paid by Tenant pursuant to this Lease and except
as to Tenant’s obligations under Articles 5 and 24 of this Lease (collectively,
a “Force Majeure”), notwithstanding anything to the contrary contained in this
Lease, shall excuse the performance of such party for a period equal to any such
prevention, delay or stoppage and, therefore, if this Lease specifies a time
period for performance of an obligation of either party, that time period shall
be extended by the period of any delay in such party’s performance caused by a
Force Majeure.

 

29.17 Waiver of Redemption by Tenant. Tenant hereby waives, for Tenant and for
all those claiming under Tenant, any and all rights now or hereafter existing to
redeem by order or judgment of any court or by any legal process or writ,
Tenant’s right of occupancy of the Premises after any termination of this Lease.

 

29.18 Notices. All notices, demands, statements, designations, approvals or
other communications (collectively, “Notices”) given or required to be given by
either party to the other hereunder or by law shall be in writing, shall be (A)
sent by United States certified or registered mail, postage prepaid, return
receipt requested (“Mail”), (B) transmitted by telecopy, if such telecopy is
promptly followed by a Notice sent by Mail, (C) delivered by a nationally
recognized overnight courier, or (D) delivered personally. Any Notice shall be
sent, transmitted,

 

    -31-  

CHINA BASIN LANDING

[Sirna Therapeutics, Inc.]

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or delivered, as the case may be, to Tenant or Landlord at the appropriate
address set forth in Section 10 or 11 of the Summary, as appropriate, or to such
other place as either party may from time to time designate in a Notice to the
other. Any Notice will be deemed given (i) three (3) days after the date it is
posted if sent by Mail, (ii) the date the telecopy is transmitted, (iii) the
date the overnight courier delivery is made, or (iv) the date personal delivery
is made or attempted to be made. If Tenant is notified of the identity and
address of Landlord’s mortgagee or ground or underlying lessor, Tenant shall
give to such mortgagee or ground or underlying lessor written notice of any
default by Landlord under the terms of this Lease by registered or certified
mail, and such mortgagee or ground or underlying lessor shall be given a
reasonable opportunity to cure such default prior to Tenant’s exercising any
remedy available to Tenant.

 

29.19 Joint and Several. If there is more than one Tenant, the obligations
imposed upon Tenant under this Lease shall be joint and several.

 

29.20 Authority. If Tenant is a corporation, trust or partnership, each
individual executing this Lease on behalf of Tenant hereby represents and
warrants that Tenant is a duly formed and existing entity qualified to do
business in California and that Tenant has full right and authority to execute
and deliver this Lease and that each person signing on behalf of Tenant is
authorized to do so. In such event, Tenant shall, within ten (10) days after
execution of this Lease, deliver to Landlord satisfactory evidence of such
authority and, if a corporation, upon demand by Landlord, also deliver to
Landlord satisfactory evidence of (i) good standing in Tenant’s state of
incorporation and (ii) qualification to do business in California.

 

29.21 Attorneys’ Fees. In the event that either Landlord or Tenant should bring
suit for the possession of the Premises, for the recovery of any sum due under
this Lease, or because of the breach of any provision of this Lease or for any
other relief against the other, then all costs and expenses, including
reasonable attorneys’ fees, incurred by the prevailing party therein shall be
paid by the other party, which obligation on the part of the other party shall
be deemed to have accrued on the date of the commencement of such action and
shall be enforceable whether or not the action is prosecuted to judgment.

 

29.22 Governing Law; WAIVER OF TRIAL BY JURY. This Lease shall be construed and
enforced in accordance with the laws of the State of California. IN ANY ACTION
OR PROCEEDING ARISING HEREFROM, LANDLORD AND TENANT HEREBY CONSENT TO (I) THE
JURISDICTION OF ANY COMPETENT COURT WITHIN THE STATE OF CALIFORNIA, (II) SERVICE
OF PROCESS BY ANY MEANS AUTHORIZED BY CALIFORNIA LAW, AND (III) IN THE INTEREST
OF SAVING TIME AND EXPENSE, TRIAL WITHOUT A JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER OR THEIR
SUCCESSORS IN RESPECT OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS
LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, TENANT’S USE OR OCCUPANCY OF THE
PREMISES, AND/OR ANY CLAIM FOR INJURY OR DAMAGE, OR ANY EMERGENCY OR STATUTORY
REMEDY. IN THE EVENT LANDLORD COMMENCES ANY SUMMARY PROCEEDINGS OR ACTION FOR
NONPAYMENT OF BASE RENT OR ADDITIONAL RENT, TENANT SHALL NOT INTERPOSE ANY
COUNTERCLAIM OF ANY NATURE OR DESCRIPTION (UNLESS SUCH COUNTERCLAIM SHALL BE
MANDATORY) IN ANY SUCH PROCEEDING OR ACTION, BUT SHALL BE RELEGATED TO AN
INDEPENDENT ACTION AT LAW.

 

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

 

29.24 Brokers. Landlord and Tenant hereby warrant to each other that they have
had no dealings with any real estate broker or agent in connection with the
negotiation of this Lease, excepting only the real estate brokers or agents
specified in Section 12 of the Summary (the “Brokers”), and that they know of no
other real estate broker or agent who is entitled to a commission in connection
with this Lease. Each party agrees to indemnify and defend the other party
against and hold the other party harmless from any and all claims, demands,
losses, liabilities, lawsuits, judgments, costs and expenses (including without
limitation reasonable attorneys’ fees) with respect to any leasing commission or
equivalent compensation alleged to be owing on account of any dealings with any
real estate broker or agent, other than the Brokers, occurring by, through, or
under the indemnifying party.

 

    -32-  

CHINA BASIN LANDING

[Sirna Therapeutics, Inc.]

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

29.25 Independent Covenants. This Lease shall be construed as though the
covenants herein between Landlord and Tenant are independent and not dependent
and Tenant hereby expressly waives the benefit of any statute to the contrary
and agrees that if Landlord fails to perform its obligations set forth herein,
Tenant shall not be entitled to make any repairs or perform any acts hereunder
at Landlord’s expense or to any setoff of the Rent or other amounts owing
hereunder against Landlord.

 

29.26 Project or Building Name and Signage. Landlord shall have the right at any
time to change the name of the Project or Building and to install, affix and
maintain any and all signs on the exterior and on the interior of the Project or
Building as Landlord may, in Landlord’s sole discretion, desire; provided,
however that in the event Landlord changes the name or address of the Building,
and such change is not required by law, Landlord shall reimburse Tenant for the
reasonable costs incurred as a result of changing Tenant’s business cards and
stationery and other printed materials containing the Building name and/or
address. Tenant shall not use the name of the Project or Building or use
pictures or illustrations of the Project or Building in advertising or other
publicity or for any purpose other than as the address of the business to be
conducted by Tenant in the Premises, without the prior written consent of
Landlord.

 

29.27 Counterparts. This Lease may be executed in counterparts with the same
effect as if both parties hereto had executed the same document. Both
counterparts shall be construed together and shall constitute a single lease.

 

29.28 Confidentiality. Tenant acknowledges that the content of this Lease and
any related documents are confidential information. Tenant shall keep such
confidential information strictly confidential and shall not disclose such
confidential information to any person or entity other than Tenant’s financial,
legal, and space planning consultants.

 

29.29 Transportation Management. Landlord has entered into an agreement with the
Department of City Planning to implement a Transportation Management Program
(“TMP”) for tenants and their employees, and to participate in a program
designed to coordinate commute alternatives, marketing, and brokerage for
greater downtown employees. During the term of the TMP, Landlord agrees to
provide transportation brokerage and commute assistance services to Tenant, and
to assist Tenant in meeting the transportation needs of its employees. Tenant
agrees to cooperate with and assist Landlord’s TMP Coordinator (“Coordinator”),
through designation of a responsible employee, to distribute to Tenant’s
employees written materials encouraging the use of public transit and
ridesharing, and to distribute and return to the Coordinator transportation
survey questionnaire forms.

 

29.30 Building Renovations. It is specifically understood and agreed that
Landlord has made no representation or warranty to Tenant and has no obligation
and has made no promises to alter, remodel, improve, renovate, repair or
decorate the Premises, Building, or any part thereof and that no representations
respecting the condition of the Project, Premises or the Building, or the areas
in the vicinity of the Project have been made by Landlord to Tenant except as
specifically set forth herein. However, Tenant hereby acknowledges that Landlord
is currently renovating or may during the Lease Term renovate, improve, alter,
or modify (collectively, the “Renovations”) the Project, the Building and/or the
Premises including without limitation the parking structure, common areas,
systems and equipment, roof, and structural portions of the same, which
Renovations may include, without limitation, (i) installing sprinklers in the
Building common areas and tenant spaces, (ii) modifying the common areas and
tenant spaces to comply with applicable laws and regulations, including
regulations relating to the physically disabled, seismic conditions, and
building safety and security, (iii) installing new floor covering, lighting, and
wall coverings in the Building common areas, and (iv) creating additional
parking areas or occupied space within the Project, and in connection with any
Renovations, Landlord may, among other things, erect scaffolding or other
necessary structures in the Building, limit or eliminate access to portions of
the Project, including portions of the common areas, or perform work in the
Building, which work may create noise, dust or leave debris in the Building.
Similarly, other properties in the vicinity of the Project may undergo
substantial construction or renovation during the Lease Term (the “Area
Renovations”), which may cause substantial disturbance to traffic and parking,
and may cause dust, noise and vibrations which may affect the Project. Tenant
hereby agrees that such Renovations or Area Renovations and Landlord’s actions
in connection with such Renovations or Area Renovations shall in no way
constitute a constructive eviction of Tenant nor entitle Tenant to any abatement
of Rent. Landlord shall have no responsibility or for any reason be liable to
Tenant for any direct or indirect injury to or

 

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CHINA BASIN LANDING

[Sirna Therapeutics, Inc.]

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interference with Tenant’s business arising from the Renovations or Area
Renovations, nor shall Tenant be entitled to any compensation or damages from
Landlord for loss of the use of the whole or any part of the Premises or of
Tenant’s personal property or improvements resulting from the Renovations or
Area Renovations or Landlord’s actions in connection with such Renovations or
Area Renovations, or for any inconvenience or annoyance occasioned by such
Renovations or Area Renovations or Landlord’s actions. In connection with any
Renovations or Area Renovations, Landlord shall use commercially reasonable
efforts to minimize interference with Tenant’s use of, and access to, the
Premises.

 

29.31 No Violation. Tenant hereby warrants and represents that neither its
execution of nor performance under this Lease shall cause Tenant to be in
violation of any agreement, instrument, contract, law, rule or regulation by
which Tenant is bound, and Tenant shall protect, defend, indemnify and hold
Landlord harmless against any claims, demands, losses, damages, liabilities,
costs and expenses, including, without limitation, reasonable attorneys’ fees
and costs, arising from Tenant’s breach of this warranty and representation.

 

29.32 Communications and Computer Lines. Tenant may install, maintain, replace,
remove or use any communications or computer wires and cables (collectively, the
“Lines”) at the Project in or serving the Premises, provided that (i) Tenant
shall obtain Landlord’s prior written consent, use an experienced and qualified
contractor approved in writing by Landlord, and comply with all of the other
provisions of Articles 7 and 8 of this Lease, (ii) an acceptable number of spare
Lines and space for additional Lines shall be maintained for existing and future
occupants of the Project, as determined in Landlord’s reasonable opinion, (iii)
the Lines therefor (including riser cables) shall be appropriately insulated to
prevent excessive electromagnetic fields or radiation, and shall be surrounded
by a protective conduit reasonably acceptable to Landlord, (iv) any new or
existing Lines servicing the Premises shall comply with all applicable
governmental laws and regulations, (v) as a condition to permitting the
installation of new Lines, Landlord may require that Tenant remove existing
Lines located in or serving the Premises and repair any damage in connection
with such removal, and (vi) Tenant shall pay all costs in connection therewith.
Landlord reserves the right to require that Tenant remove any Lines located in
or serving the Premises which are installed in violation of these provisions, or
which are at any time in violation of any laws or represent a dangerous or
potentially dangerous condition. Landlord makes no representation or assurances
with regard to the suitability, available or capacity of the Building’s
telephone and communication distribution network or risers within or service to
the Building for Tenant’s communication needs.

 

29.33 Development of the Project.

 

29.33.1 Subdivision. Landlord reserves the right to further subdivide all or a
portion of the Project. Tenant agrees to execute and deliver, upon demand by
Landlord and in the form requested by Landlord, any additional documents needed
to conform this Lease to the circumstances resulting from such subdivision.

 

29.33.2 The Other Improvements. If portions of the Project or property adjacent
to the Project (collectively, the “Other Improvements”) are owned by an entity
other than Landlord, Landlord, at its option, may enter into an agreement with
the owner or owners of any or all of the Other Improvements to provide (i) for
reciprocal rights of access and/or use of the Project and the Other
Improvements, (ii) for the common management, operation, maintenance,
improvement and/or repair of all or any portion of the Project and the Other
Improvements, (iii) for the allocation of a portion of the Direct Expenses to
the Other Improvements and the operating expenses and taxes for the Other
Improvements to the Project, and (iv) for the use or improvement of the Other
Improvements and/or the Project in connection with the improvement,
construction, and/or excavation of the Other Improvements and/or the Project.
Nothing contained herein shall be deemed or construed to limit or otherwise
affect Landlord’s right to convey all or any portion of the Project or any other
of Landlord’s rights described in this Lease.

 

29.33.3 Construction of Project and Other Improvements. Tenant acknowledges that
portions of the Project and/or the Other Improvements may be under construction
following Tenant’s occupancy of the Premises, and that such construction may
result in levels of noise, dust, obstruction of access, etc. which are in excess
of that present in a fully constructed project. Tenant hereby waives any and all
rent offsets or claims of constructive eviction which may arise in connection
with such construction. In connection with any construction in accordance with
the terms of this Section 29.33, Landlord shall use commercially reasonable
efforts to minimize interference with Tenant’s use of, and access to, the
Premises.

 

    -34-  

CHINA BASIN LANDING

[Sirna Therapeutics, Inc.]

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

 

“Landlord”:

STOCKBRIDGE/MCC-CHINA BASIN, L.L.C.,

a Delaware limited liability company

By:

 

    /s/ Kevin D. Cox

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

    Its:   Authorized Representative

“Tenant”:

SIRNA THERAPEUTICS, INC.,

a Delaware corporation,

By:

 

    /s/ Martin Schmeig

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

    Its:   Senior Vice President and CFO

By:

 

    /s/ Bharat Chowrira

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

    Its:   VP Legal Affairs

 

    -35-  

CHINA BASIN LANDING

[Sirna Therapeutics, Inc.]

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EXHIBIT A

 

CHINA BASIN LANDING

 

OUTLINE OF PREMISES

 

 

   

EXHIBIT A

-1-

 

CHINA BASIN LANDING

[Sirna Therapeutics, Inc.]

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

EXHIBIT B

 

CHINA BASIN LANDING

 

 

   

EXHIBIT B

-1-

 

CHINA BASIN LANDING

[Sirna Therapeutics, Inc.]

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

EXHIBIT C

 

CHINA BASIN LANDING

 

NOTICE OF LEASE TERM DATES

 

To:

 

 

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

       

 

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

       

 

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

       

 

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

   

 

  Re: Office Lease dated                     , 20     between
                    , a                      (“Landlord”), and
                    , a                      (“Tenant”) concerning Suite
             on floor(s)                      of the office building located at
                            , San Francisco, California.

 

Gentlemen:

 

In accordance with the Office Lease (the “Lease”), we wish to advise you and/or
confirm as follows:

 

  1. The Lease Term shall commence on or has commenced on                     
for a term of                      ending on                     .

 

  2. Rent commenced to accrue on                     , in the amount of
                    .

 

  3. If the Lease Commencement Date is other than the first day of the month,
the first billing will contain a pro rata adjustment. Each billing thereafter,
with the exception of the final billing, shall be for the full amount of the
monthly installment as provided for in the Lease.

 

  4. Your rent checks should be made payable to                      at
                    .

 

  5. The exact number of rentable/usable square feet within the Premises is
                     square feet.

 

  6. Tenant’s Share as adjusted based upon the exact number of usable square
feet within the Premises is             %.

 

   

EXHIBIT C

-1-

 

CHINA BASIN LANDING

[Sirna Therapeutics, Inc.]

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This Commencement Letter shall be deemed accepted by Tenant if not executed and
returned to Landlord by Tenant within thirty (30) days following the date that
Landlord delivers this Commencement Letter to Tenant for execution.

 

“Landlord”:                                       
                                                                 ,
a                                                                               
                        By:  

 

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

    Its:  

 

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

 

Agreed to and Accepted

as of                     , 20    .

 

“Tenant”:

 

                                                                               
                          a                                      
                                                                 By:  

 

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

    Its:  

 

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

 

   

EXHIBIT C

-2-

 

CHINA BASIN LANDING

[Sirna Therapeutics, Inc.]

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

EXHIBIT D

 

CHINA BASIN LANDING

 

RULES AND REGULATIONS

 

Tenant shall faithfully observe and comply with the following Rules and
Regulations. Landlord shall not be responsible to Tenant for the nonperformance
of any of said Rules and Regulations by or otherwise with respect to the acts or
omissions of any other tenants or occupants of the Project. In the event of any
conflict between the Rules and Regulations and the other provisions of this
Lease, the latter shall control.

 

1. Tenant shall not alter any lock or install any new or additional locks or
bolts on any doors or windows of the Premises without obtaining Landlord’s prior
written consent. Tenant shall bear the cost of any lock changes or repairs
required by Tenant. Two keys will be furnished by Landlord for the Premises, and
any additional keys required by Tenant must be obtained from Landlord at a
reasonable cost to be established by Landlord. Upon the termination of this
Lease, Tenant shall restore to Landlord all keys of stores, offices, and toilet
rooms, either furnished to, or otherwise procured by, Tenant and in the event of
the loss of keys so furnished, Tenant shall pay to Landlord the cost of
replacing same or of changing the lock or locks opened by such lost key if
Landlord shall deem it necessary to make such changes.

 

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

 

3. Landlord reserves the right to close and keep locked all entrance and exit
doors of the Building during such hours as are customary for comparable
buildings in the vicinity of the Building. Tenant, its employees and agents must
be sure that the doors to the Building are securely closed and locked when
leaving the Premises if it is after the normal hours of business for the
Building. Any tenant, its employees, agents or any other persons entering or
leaving the Building at any time when it is so locked, or any time when it is
considered to be after normal business hours for the Building, may be required
to sign the Building register. Access to the Building may be refused unless the
person seeking access has proper identification or has a previously arranged
pass for access to the Building. Landlord will furnish passes to persons for
whom Tenant requests same in writing. Tenant shall be responsible for all
persons for whom Tenant requests passes and shall be liable to Landlord for all
acts of such persons. The Landlord and his agents shall in no case be liable for
damages for any error with regard to the admission to or exclusion from the
Building of any person. In case of invasion, mob, riot, public excitement, or
other commotion, Landlord reserves the right to prevent access to the Building
or the Project during the continuance thereof by any means it deems appropriate
for the safety and protection of life and property.

 

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

 

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

 

6. The requirements of Tenant will be attended to only upon application at the
management office for the Project or at such office location designated by
Landlord. Employees of Landlord shall not perform any work or do anything
outside their regular duties unless under special instructions from Landlord.

 

   

EXHIBIT D

-1-

 

CHINA BASIN LANDING

[Sirna Therapeutics, Inc.]

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

7. No sign, advertisement, notice or handbill shall be exhibited, distributed,
painted or affixed by Tenant on any part of the Premises or the Building without
the prior written consent of the Landlord. Tenant shall not disturb, solicit,
peddle, or canvass any occupant of the Project and shall cooperate with Landlord
and its agents of Landlord to prevent same.

 

8. The toilet rooms, urinals, wash bowls and other apparatus shall not be used
for any purpose other than that for which they were constructed, and no foreign
substance of any kind whatsoever shall be thrown therein. The expense of any
breakage, stoppage or damage resulting from the violation of this rule shall be
borne by the tenant who, or whose servants, employees, agents, visitors or
licensees shall have caused same.

 

9. Tenant shall not overload the floor of the Premises, nor mark, drive nails or
screws, or drill into the partitions, woodwork or drywall or in any way deface
the Premises or any part thereof without Landlord’s prior written consent.
Tenant shall not purchase spring water, ice, towel, linen, maintenance or other
like services from any person or persons not approved by Landlord.

 

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

 

11. Tenant shall not use or keep in or on the Premises, the Building, or the
Project any kerosene, gasoline, explosive material, corrosive material, material
capable of emitting toxic fumes, or other inflammable or combustible fluid
chemical, substitute or material. Tenant shall provide material safety data
sheets for any Hazardous Material used or kept on the Premises.

 

12. Tenant shall not without the prior written consent of Landlord use any
method of heating or air conditioning other than that supplied by Landlord.

 

13. Tenant shall not use, keep or permit to be used or kept, any foul or noxious
gas or substance in or on the Premises, or permit or allow the Premises to be
occupied or used in a manner offensive or objectionable to Landlord or other
occupants of the Project by reason of noise, odors, or vibrations, or interfere
with other tenants or those having business therein, whether by the use of any
musical instrument, radio, phonograph, or in any other way. Tenant shall not
throw anything out of doors, windows or skylights or down passageways.

 

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

 

15. No cooking shall be done or permitted on the Premises, nor shall the
Premises be used for the storage of merchandise, for lodging or for any
improper, objectionable or immoral purposes. Notwithstanding the foregoing,
Underwriters’ laboratory-approved equipment and microwave ovens may be used in
the Premises for heating food and brewing coffee, tea, hot chocolate and similar
beverages for employees and visitors, provided that such use is in accordance
with all applicable federal, state, county and city laws, codes, ordinances,
rules and regulations.

 

16. The Premises shall not be used for manufacturing or for the storage of
merchandise except as such storage may be incidental to the use of the Premises
provided for in the Summary. Tenant shall not occupy or permit any portion of
the Premises to be occupied as an office for a messenger-type operation or
dispatch office, public stenographer or typist, or for the manufacture or sale
of liquor, narcotics, or tobacco in any form, or as a medical office, or as a
barber or manicure shop, or as an employment bureau without the express prior
written consent of Landlord. Tenant shall not engage or pay any employees on the
Premises except those actually working for such tenant on the Premises nor
advertise for laborers giving an address at the Premises.

 

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

 

18. Tenant, its employees and agents shall not loiter in or on the entrances,
corridors, sidewalks, lobbies, courts, halls, stairways, elevators, vestibules
or any Common Areas for the purpose of smoking tobacco products or for any other
purpose, nor in any way obstruct such areas, and shall use them only as a means
of ingress and egress for the Premises.

 

   

EXHIBIT D

-2-

 

CHINA BASIN LANDING

[Sirna Therapeutics, Inc.]

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

19. Tenant shall not waste electricity, water or air conditioning and agrees to
cooperate fully with Landlord to ensure the most effective operation of the
Building’s heating and air conditioning system, and shall refrain from
attempting to adjust any controls. Tenant shall participate in recycling
programs undertaken by Landlord

 

20. Tenant shall store all its trash and garbage within the interior of the
Premises. No material shall be placed in the trash boxes or receptacles if such
material is of such nature that it may not be disposed of in the ordinary and
customary manner of removing and disposing of trash and garbage in San
Francisco, California without violation of any law or ordinance governing such
disposal. All trash, garbage and refuse disposal shall be made only through
entry-ways and elevators provided for such purposes at such times as Landlord
shall designate. If the Premises is or becomes infested with vermin as a result
of the use or any misuse or neglect of the Premises by Tenant, its agents,
servants, employees, contractors, visitors or licensees, Tenant shall forthwith,
at Tenant’s expense, cause the Premises to be exterminated from time to time to
the satisfaction of Landlord and shall employ such licensed exterminators as
shall be approved in writing in advance by Landlord.

 

21. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.

 

22. Any persons employed by Tenant to do janitorial work shall be subject to the
prior written approval of Landlord, and while in the Building and outside of the
Premises, shall be subject to and under the control and direction of the
Building manager (but not as an agent or servant of such manager or of
Landlord), and Tenant shall be responsible for all acts of such persons.

 

23. No awnings or other projection shall be attached to the outside walls of the
Building without the prior written consent of Landlord, and no curtains, blinds,
shades or screens shall be attached to or hung in, or used in connection with,
any window or door of the Premises other than Landlord standard drapes. All
electrical ceiling fixtures hung in the Premises or spaces along the perimeter
of the Building must be fluorescent and/or of a quality, type, design and a warm
white bulb color approved in advance in writing by Landlord. Neither the
interior nor exterior of any windows shall be coated or otherwise sunscreened
without the prior written consent of Landlord. Tenant shall be responsible for
any damage to the window film on the exterior windows of the Premises and shall
promptly repair any such damage at Tenant’s sole cost and expense. Tenant shall
keep its window coverings closed during any period of the day when the sun is
shining directly on the windows of the Premises. Prior to leaving the Premises
for the day, Tenant shall draw or lower window coverings and extinguish all
lights. Tenant shall abide by Landlord’s regulations concerning the opening and
closing of window coverings which are attached to the windows in the Premises,
if any, which have a view of any interior portion of the Building or Building
Common Areas.

 

24. The sashes, sash doors, skylights, windows, and doors that reflect or admit
light and air into the halls, passageways or other public places in the Building
shall not be covered or obstructed by Tenant, nor shall any bottles, parcels or
other articles be placed on the windowsills.

 

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

 

26. Tenant must comply with all city and state NO-SMOKING” ordinances. If Tenant
is required under any ordinance to adopt a written smoking policy, a copy of
said policy shall be on file in the office of the Building.

 

27. Tenant hereby acknowledges that Landlord shall have no obligation to provide
guard service or other security measures for the benefit of the Premises, the
Building or the Project. Tenant hereby assumes all responsibility for the
protection of Tenant and its agents, employees, contractors, invitees and
guests, and the property thereof, from acts of third parties, including keeping
doors locked and other means of entry to the Premises closed, whether or not
Landlord, at its option, elects to provide security protection for the Project
or any portion thereof. Tenant further assumes the risk that any safety and
security devices, services and programs

 

   

EXHIBIT D

-3-

 

CHINA BASIN LANDING

[Sirna Therapeutics, Inc.]

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

which Landlord elects, in its sole discretion, to provide may not be effective,
or may malfunction or be circumvented by an unauthorized third party, and Tenant
shall, in addition to its other insurance obligations under this Lease, obtain
its own insurance coverage to the extent Tenant desires protection against
losses related to such occurrences. Tenant shall cooperate in any reasonable
safety or security program developed by Landlord or required by law.

 

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

 

29. Tenant shall not use in any space or in the public halls of the Building,
any hand trucks except those equipped with rubber tires and rubber side guards.

 

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

 

31. No tenant shall use or permit the use of any portion of the Premises for
living quarters, sleeping apartments or lodging rooms.

 

32. Tenant shall not purchase spring water, towels, janitorial or maintenance or
other similar services from any company or persons not approved by Landlord.
Landlord shall approve a sufficient number of sources of such services to
provide Tenant with a reasonable selection, but only in such instances and to
such extent as Landlord in its judgment shall consider consistent with the
security and proper operation of the Building.

 

33. Tenant shall install and maintain, at Tenant’s sole cost and expense, an
adequate, visibly marked and properly operational fire extinguisher next to any
duplicating or photocopying machines or similar heat producing equipment, which
may or may not contain combustible material, in the Premises.

 

Landlord reserves the right at any time to change or rescind any one or more of
these Rules and Regulations, or to make such other and further reasonable Rules
and Regulations as in Landlord’s judgment may from time to time be necessary for
the management, safety, care and cleanliness of the Premises, Building, the
Common Areas and the Project, and for the preservation of good order therein, as
well as for the convenience of other occupants and tenants therein. Landlord may
waive any one or more of these Rules and Regulations for the benefit of any
particular tenants, but no such waiver by Landlord shall be construed as a
waiver of such Rules and Regulations in favor of any other tenant, nor prevent
Landlord from thereafter enforcing any such Rules or Regulations against any or
all tenants of the Project. Tenant shall be deemed to have read these Rules and
Regulations and to have agreed to abide by them as a condition of its occupancy
of the Premises.

 

   

EXHIBIT D

-4-

 

CHINA BASIN LANDING

[Sirna Therapeutics, Inc.]

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

EXHIBIT E

 

CHINA BASIN LANDING

 

FORM OF TENANT’S ESTOPPEL CERTIFICATE

 

The undersigned as Tenant under that certain Office Lease (the “Lease”) made and
entered into as of                     , 20     by and between
                     as Landlord, and the undersigned as Tenant, for Premises on
the                      floor(s) of the office building located at
                    , San Francisco, California                     , certifies
as follows:

 

1. Attached hereto as Exhibit A is a true and correct copy of the Lease and all
amendments and modifications thereto. The documents contained in Exhibit A
represent the entire agreement between the parties as to the Premises and the
project of which the Premises are a part.

 

2. The undersigned currently occupies the Premises described in the Lease, the
Lease Term commenced on                     , and the Lease Term expires on
                    , and the undersigned has no option to terminate or cancel
the Lease or to purchase all or any part of the Premises, the Building and/or
the Project.

 

3. Base Rent became payable on                     .

 

4. The Lease is in full force and effect and has not been modified, supplemented
or amended in any way except as provided in Exhibit A.

 

5. Tenant has not transferred, assigned, or sublet any portion of the Premises
nor entered into any license or concession agreements with respect thereto
except as follows:

 

6. Tenant shall not modify the documents contained in Exhibit A without the
prior written consent of Landlord’s mortgagee.

 

7. All monthly installments of Base Rent, all Additional Rent and all monthly
installments of estimated Additional Rent have been paid when due through
                    . The current monthly installment of Base Rent is
$                            .

 

8. All conditions of the Lease to be performed by Landlord necessary to the
enforceability of the Lease have been satisfied and Landlord is not in default
thereunder. In addition, the undersigned has not delivered any notice to
Landlord regarding a default by Landlord thereunder.

 

9. No rental has been paid more than thirty (30) days in advance and no security
has been deposited with Landlord except as provided in the Lease.

 

10. As of the date hereof, there are no existing defenses or offsets, to the
undersigned’s knowledge, claims or any basis for a claim, that the undersigned
has against Landlord.

 

11. If Tenant is a corporation or partnership, each individual executing this
Estoppel Certificate on behalf of Tenant hereby represents and warrants that
Tenant is a duly formed and existing entity qualified to do business in
California and that Tenant has full right and authority to execute and deliver
this Estoppel Certificate and that each person signing on behalf of Tenant is
authorized to do so.

 

12. There are no actions pending against the undersigned or any guarantor of the
Lease under the bankruptcy or similar laws of the United States or any state.

 

   

EXHIBIT E

-1-

 

CHINA BASIN LANDING

[Sirna Therapeutics, Inc.]

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

13. Other than in compliance with all applicable laws and incidental to the
ordinary course of the use of the Premises, the undersigned has not used or
stored any hazardous substances in the Premises.

 

14. To the undersigned’s knowledge, all tenant improvement work to be performed
by Landlord under the Lease has been completed in accordance with the Lease and
has been accepted by the undersigned and all reimbursements and allowances due
to the undersigned under the Lease in connection with any tenant improvement
work have been paid in full.

 

The undersigned acknowledges that this Estoppel Certificate may be delivered to
Landlord or to a prospective mortgagee or prospective purchaser, and
acknowledges that said prospective mortgagee or prospective purchaser will be
relying upon the statements contained herein in making the loan or acquiring the
property of which the Premises are a part and that receipt by it of this
certificate is a condition of making such loan or acquiring such property.

 

Executed at                      on the              day of
                    , 20    .

 

 

 

“Tenant”:                                       
                                                                 ,
a                                                                               
                        By:  

 

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

    Its:  

 

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

By:  

 

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

    Its:  

 

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

 

 

   

EXHIBIT E

-2-

 

CHINA BASIN LANDING

[Sirna Therapeutics, Inc.]

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

OFFICE LEASE

 

CHINA BASIN LANDING

 

 

STOCKBRIDGE/MCC-CHINA BASIN, L.L.C.,

 

a Delaware limited liability company,

 

as Landlord,

 

and

 

SIRNA THERAPEUTICS, INC.,

 

a Delaware corporation,

 

as Tenant

 

 

       

CHINA BASIN LANDING

[Sirna Therapeutics, Inc.]

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

TABLE OF CONTENTS

 

          PAGE

ARTICLE 1

   PREMISES, BUILDING, PROJECT, AND COMMON AREAS    3

ARTICLE 2

   LEASE TERM    4

ARTICLE 3

   BASE RENT    5

ARTICLE 4

   ADDITIONAL RENT    5

ARTICLE 5

   USE OF PREMISES    10

ARTICLE 6

   SERVICES AND UTILITIES    11

ARTICLE 7

   REPAIRS    13

ARTICLE 8

   ADDITIONS AND ALTERATIONS    13

ARTICLE 9

   COVENANT AGAINST LIENS    15

ARTICLE 10

   INSURANCE    15

ARTICLE 11

   DAMAGE AND DESTRUCTION    17

ARTICLE 12

   NONWAIVER    18

ARTICLE 13

   CONDEMNATION    19

ARTICLE 14

   ASSIGNMENT AND SUBLETTING    19

ARTICLE 15

   SURRENDER OF PREMISES; OWNERSHIP AND REMOVAL OF TRADE FIXTURES    22

ARTICLE 16

   HOLDING OVER    23

ARTICLE 17

   ESTOPPEL CERTIFICATES    23

ARTICLE 18

   SUBORDINATION    23

ARTICLE 19

   DEFAULTS; REMEDIES    24

ARTICLE 20

   COVENANT OF QUIET ENJOYMENT    26

ARTICLE 21

   SECURITY DEPOSIT    26

ARTICLE 22

   SUBSTITUTION OF OTHER PREMISES    27

ARTICLE 23

   SIGNS    27

ARTICLE 24

   COMPLIANCE WITH LAW    27

ARTICLE 25

   LATE CHARGES    28

ARTICLE 26

   LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT    28

ARTICLE 27

   ENTRY BY LANDLORD    28

ARTICLE 28

   TENANT PARKING    29

ARTICLE 29

   MISCELLANEOUS PROVISIONS    29

 

    (i)  

CHINA BASIN LANDING

[Sirna Therapeutics, Inc.]

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

INDEX

 

     PAGE  (S)

Abatement Event

   12  

Additional Rent

   5  

Alterations

   13  

Area Renovations

   33  

Base Building

   13  

Base Rent

   5  

Base Year

   6  

Brokers

   32  

Building

   3  

Building Common Areas

   3  

Building Hours

   11  

China Basin Landing

   3  

Common Areas

   3  

Coordinator

   33  

Cost Pools

   9  

Direct Expenses

   6  

Eligibility Period

   12  

Estimate

   9  

Estimate Statement

   9  

Estimated Excess

   9  

Excess

   9  

Expense Year

   6  

Force Majeure

   31  

Holidays

   11  

HVAC

   11  

Landlord

   1  

Landlord Parties

   15  

Landlord Repair Notice

   17  

Lease

   1  

Lease Commencement Date

   4  

Lease Expiration Date

   4  

Lease Term

   4  

Lease Year

   4  

Lines

   34  

Mail

   31  

Notices

   31  

Operating Expenses

   6  

Option Rent

   4  

Option Term

   4  

Original Tenant

   4  

Other Improvements

   34  

Premises

   3  

Project

   3  

Project Common Areas

   3  

Proposition 13

   8  

Renovations

   33  

Rent

   5  

Requesting Party

   23  

Security Deposit

   26  

Statement

   9  

Subject Space

   19  

Summary

   1  

Tax Expenses

   8  

Tenant

   1  

Tenant Personal Property

   22  

Tenant’s Share

   9  

TMP

   33  

Transfer

   21  

Transfer Notice

   19  

Transfer Premium

   21  

Transferee

   19  

Transfers

   19  

 

    (ii)  

CHINA BASIN LANDING

[Sirna Therapeutics, Inc.]