exv10w23






Exhibit 10.23




LEASE AGREEMENT




     THIS
LEASE AGREEMENT (this “Lease”) is made this 28 day of February, 2011, between ARE-SD
REGION NO. 31, LLC, a Delaware limited liability company (“Landlord”), and ANADYS PHARMACEUTICALS,
INC., a Delaware corporation (“Tenant”).



	 	 	 

	Address:

	 	5871 Oberlin Drive, San Diego, California
	 
	 	 
	Premises:

	 	That portion of the Project, containing approximately 13,674
rentable square feet, as determined by Landlord, as shown on
Exhibit A.
	 
	 	 
	Project:

	 	The real property on which the building (the “Building”) in
which the Premises are located, together with all improvements
thereon and appurtenances thereto as described on Exhibit B.
	 
	 	 
	Base Rent:

	 	$2.05 per rentable square foot of the Premises per month






Rentable Area of Premises: 13,674 sq. ft.




			
	 	 	 
	Rentable Area of Project: 33,728 sq. ft.
	 	Tenant’s Share of Operating Expenses: 40.54%






Security Deposit: $28,872.65




	 	 	 

	Base Term:

	 	Beginning on the Commencement Date and ending on January 31, 2012.
	 
	 	 
	Permitted Use:

	 	Research and development laboratory, related office and other related uses consistent
with the character of the Project and otherwise in compliance with the provisions of Section 7 hereof.






	 	 	 

	Address for Rent Payment:

	 	Landlord’s Notice Address:
	Dept LA 23447

	 	385 E. Colorado Boulevard, Suite 299
	Pasadena, CA 91185-3447

	 	Pasadena, CA 91101
	 

	 	Attention: Corporate Secretary
	 
	 	 
	Tenant’s Notice Address:
	 	 
	5871 Oberlin Drive
	 	 
	San Diego, CA 92121
	 	 
	Attention: Lease Administrator
	 	 






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




	 	 	 

	þ EXHIBIT A - PREMISES DESCRIPTION

	 	þ EXHIBIT B - DESCRIPTION OF PROJECT
	þ EXHIBIT C - LANDLORD’S PROPERTY

	 	þ EXHIBIT D - COMMENCEMENT DATE
	þ EXHIBIT E - RULES AND REGULATIONS

	 	þ EXHIBIT F - TENANT’S PERSONAL PROPERTY
	þ EXHIBIT G - RENOVATION
	 	 






     1. Lease of Premises. Upon and subject to all of the terms and conditions hereof, Landlord
hereby leases the Premises to Tenant and Tenant hereby leases the Premises from Landlord. The
portions of the Project which are for the non-exclusive use of tenants of the Project are
collectively referred to herein as the “Common Areas.” Landlord reserves the right to modify
Common Areas, provided that such modifications do not materially adversely affect Tenant’s use of
the Premises for the Permitted Use.








 









 








			
	 	 	 
	Net Multi-Tenant Laboratory
	 	5871 Oberlin/Anadys — Page 2






     2. Delivery; Acceptance of Premises; Commencement Date. The “Commencement Date” shall be
February 1, 2011. The “Rent Commencement Date” shall be March 1, 2011. Upon request of Landlord,
Tenant shall execute and deliver a written acknowledgment of the Commencement Date, the “Rent
Commencement Date” and the expiration date of the Term when such are established in the form of the
“Acknowledgement of Commencement Date” attached to this Lease as Exhibit D; provided,
however, Tenant’s failure to execute and deliver such acknowledgment shall not affect
Landlord’s rights hereunder. The “Term” of this Lease shall be the Base Term, as defined above on
the first page of this Lease.



     Landlord and Tenant acknowledge and agree that immediately prior to the date hereof, Tenant
occupied the Premises pursuant to a Sublease Agreement which has become a direct lease with
Landlord (“Existing Sublease Agreement”). The Existing Sublease Agreement expires on January 31,
2011.



     Tenant shall have the right during the Term, at no additional cost to Tenant, to use all of
the furniture, fixtures and equipment located within the Premises as of the date of this Lease and
listed on Exhibit C attached hereto (“Landlord’s Property”). Tenant shall accept Landlord’s
Property in its “as is” condition as of the Commencement Date and shall return Landlord’s Property
to Landlord upon the expiration or earlier termination of this Lease in the same condition as
received, ordinary wear and tear excepted.



     Except as otherwise set forth in this Lease: (i) Landlord shall have no obligation for any
defects in the Premises or Landlord’s Property; and (ii) Tenant’s occupancy of the Premises
pursuant to the terms of the Existing Sublease Agreement shall be conclusive evidence that Tenant
accepts the Premises and Landlord’s Property and that the Premises and Landlord’s Property are in
good condition. Any occupancy of the Premises by Tenant before the Commencement Date shall be
subject to all of the terms and conditions of this Lease, except the obligation to pay Base Rent.



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



     3. Rent.



     (a) Base Rent. The Security Deposit shall be due and payable on delivery of an executed copy
of this Lease to Landlord and Base Rent for the month in which the Rent Commencement Date occurs
shall be due and payable on or before the Rent Commencement Date. Tenant shall pay to Landlord in
advance, without demand, abatement, deduction or set-off, monthly installments of Base Rent on or
before the first day of each calendar month during the Term hereof after the Rent Commencement
Date, in lawful money of the United States of America, at the office of Landlord for payment of
Rent set forth above, or to such other person or at such other place as Landlord may from time to
time designate in writing. Payments of Base Rent for any fractional calendar month shall be
prorated. The obligation of Tenant to pay Base Rent and other sums to Landlord and the obligations
of Landlord under this Lease are independent obligations. Tenant shall have no right at any time
to abate, reduce, or set-off any Rent (as defined in Section 5) due hereunder except for
any abatement as may be expressly provided in this Lease.









 









 








			
	 	 	 
	Net Multi-Tenant Laboratory
	 	5871 Oberlin/Anadys — Page 3






     Notwithstanding anything to the contrary contained herein, Tenant shall be required to pay
Base Rent in the amount of $14,015.85 for the month of March 2011. Tenant shall commence paying
full Base Rent for the Premises on April 1, 2011.



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



     4. Intentionally Omitted.



     5. Operating Expense Payments. Landlord shall deliver to Tenant a written estimate of
Operating Expenses for each calendar year during the Term (the “Annual Estimate”), which may be
revised by Landlord from time to time during such calendar year. During each month of the Term, on
the same date that Base Rent is due, Tenant shall pay Landlord an amount equal to 1/12th of
Tenant’s Share of the Annual Estimate. Payments for any fractional calendar month shall be
prorated.



     The term “Operating Expenses” means all costs and expenses of any kind or description
whatsoever incurred or accrued each calendar year by Landlord with respect to the Project
(including, without duplication, Taxes (as defined in Section 9), capital repairs and
improvements amortized over the lesser of 7 years and the useful life of such capital items, and
the costs of Landlord’s third party property manager or, if there is no third party property
manager (not to exceed 4% of Base Rent), administration rent in the amount of 4.0% of Base Rent),
excluding only:



     (a) the original construction costs of the Project and renovation prior to the date of the
Lease and costs of correcting defects in such original construction or renovation;



     (b) capital expenditures for expansion of the Project;



     (c) interest, principal payments of Mortgage (as defined in Section 27) debts of
Landlord, financing costs and amortization of funds borrowed by Landlord, whether secured or
unsecured;



     (d) depreciation of the Project (except for capital improvements, the cost of which are
includable in Operating Expenses);



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



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



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



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



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








 









 








			
	 	 	 
	Net Multi-Tenant Laboratory
	 	5871 Oberlin/Anadys — Page 4






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



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



     (l) costs incurred by Landlord due to the violation by Landlord, its employees, agents or
contractors or any tenant of the terms and conditions of any lease of space in the Project or any
Legal Requirement (as defined in Section 7);



     (m) penalties, fines or interest incurred as a result of Landlord’s inability or failure to
make payment of Taxes and/or to file any tax or informational returns when due, or from Landlord«’s
failure to make any payment of Taxes required to be made by Landlord hereunder before delinquency;



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



     (o) costs of Landlord’s charitable or political contributions, or of fine art maintained at
the Project;



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



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



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



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



     (t) any costs incurred to remove, study, test, remediate or otherwise related to the presence
of Hazardous Materials in or about the Building or the Project, which Hazardous Materials Tenant
proves (i) existed prior to Tenant’s occupancy of the Premises, (ii) originated from any separately
demised tenant space within the Project other than the Premises or (iii) were not brought upon,
kept, used, stored, handled, treated, generated in, or released or disposed of from, the Project by
Tenant or any Tenant Party (as herein defined);



     (u) reserves for Taxes, insurance or other amounts required to me impounded by the terms of
any Mortgage or other agreement relating to the Project;



     (v) costs of repair, replacement or restoration work occasioned by any eminent domain
proceeding or risks which Landlord is required under this Lease to insure against (except for
commercially reasonable insurance deductibles and the costs of such repair, replacement and/or
restoration work where Landlord reasonably determines that it does not make business sense to
submit an insurance claim bearing in mind the potential amount of the losses and damages and the
amount of the applicable deductibles, all of which may be included as part of Operating Expenses);
and








 









 








			
	 	 	 
	Net Multi-Tenant Laboratory
	 	5871 Oberlin/Anadys — Page 5






     (w) the initial cost of the renovation to the Project described on Exhibit G (“Renovation”)
attached hereto and the costs of correcting defects in such Renovation.



     Notwithstanding anything to the contrary contained herein, in no event shall Tenant be
required to pay Operating Expenses (including Utilities (both separately metered utilities and
those which are required to be provided by Landlord)) in excess of $1.45 per rentable square foot
of the Premises during the Base Term.



     Within 90 days after the end of each calendar year (or such longer period as may be reasonably
required), Landlord shall furnish to Tenant a statement (an “Annual Statement”) showing in
reasonable detail: (a) the total and Tenant’s Share of actual Operating Expenses for the previous
calendar year, and (b) the total of Tenant’s payments in respect of Operating Expenses for such
year. If Tenant’s Share of actual Operating Expenses for such year exceeds Tenant’s payments of
Operating Expenses for such year, the excess shall be due and payable by Tenant as Rent within 30
days after delivery of such Annual Statement to Tenant. If Tenant’s payments of Operating Expenses
for such year exceed Tenant’s Share of actual Operating Expenses for such year Landlord shall pay
the excess to Tenant within 30 days after delivery of such Annual Statement, except that after the
expiration, or earlier termination of the Term or if Tenant is delinquent in its obligation to pay
Rent, Landlord shall pay the excess to Tenant after deducting all other amounts due Landlord.



     The Annual Statement shall be final and binding upon Tenant unless Tenant, within 60 days
after Tenant’s receipt thereof, shall contest any item therein by giving written notice to
Landlord, specifying each item contested and the reason therefor. If, during such 60 day period,
Tenant reasonably and in good faith questions or contests the accuracy of Landlord ‘s statement of
Tenant’s Share of Operating Expenses, Landlord will provide Tenant with access to Landlord ‘s books
and records relating to the operation of the Project and such information as Landlord reasonably
determines to be responsive to Tenant’s questions (the “Expense Information”). If after Tenant ‘s
review of such Expense Information, Landlord and Tenant cannot agree upon the amount of Tenant’s
Share of Operating Expenses, then Tenant shall have the right to have an independent public
accounting firm selected by Tenant from among the 4 largest in the United States, working pursuant
to a fee arrangement other than a contingent fee (at Tenant’s sole cost and expense) and approved
by Landlord (which approval shall not be unreasonably withheld or delayed), audit and/or review the
Expense Information for the year in question (the “Independent Review”). The results of any such
Independent Review shall be binding on Landlord and Tenant. If the Independent Review shows that
the payments actually made by Tenant with respect to Operating Expenses for the calendar year in
question exceeded Tenant’s Share of Operating Expenses for such calendar year, Landlord shall at
Landlord’s option either (i) credit the excess amount to the next succeeding installments of
estimated Operating Expenses or (ii) pay the excess to Tenant within 30 days after delivery of such
statement, except that after the expiration or earlier termination of this Lease or if Tenant is
delinquent in its obligation to pay Rent, Landlord shall pay the excess to Tenant after deducting
all other amounts due Landlord. If the Independent Review shows that Tenant’s payments with
respect to Operating Expenses for such calendar year were less than Tenant’s Share of Operating
Expenses for the calendar year, Tenant shall pay the deficiency to Landlord within 30 days after
delivery of such statement. If the Independent Review shows that Tenant has overpaid with respect
to Operating Expenses by more than 5% then Landlord shall reimburse Tenant for all costs incurred
by Tenant for the Independent Review. Operating Expenses for the calendar years in which Tenant’s
obligation to share therein begins and ends shall be prorated. Notwithstanding anything set forth
herein to the contrary, if the Project is not at least 95% occupied on average during any year of
the Term, Tenant’s Share of Operating Expenses for such year shall be computed as though the
Project had been 95% occupied on average during such year.



     “Tenant’s Share” shall be the percentage set forth on the first page of this Lease as Tenant’s
Share as reasonably adjusted by Landlord for changes in the physical size of the Premises or the
Project occurring thereafter. Landlord may equitably increase Tenant’s Share for any item of
expense or cost reimbursable by Tenant that relates to a repair, replacement, or service that
benefits only the Premises or only a portion of the Project that includes the Premises or that
varies with occupancy or use. Base Rent,








 









 








			
	 	 	 
	Net Multi-Tenant Laboratory
	 	5871 Oberlin/Anadys — Page 6






Tenant’s Share of Operating Expenses and all other amounts payable by Tenant to Landlord
hereunder are collectively referred to herein as “Rent.”




     6. Security Deposit. Tenant shall deposit with Landlord, upon delivery of an executed copy of
this Lease to Landlord, a security deposit (the “Security Deposit”) for the performance of all of
Tenant’s obligations hereunder in the amount set forth on page 1 of this Lease, which Security
Deposit shall be in the form of an unconditional and irrevocable letter of credit (the “Letter of
Credit”): (i) in form and substance reasonably satisfactory to Landlord, (ii) naming Landlord as
beneficiary, (iii) expressly allowing Landlord to draw upon it at any time from time to time by
delivering to the issuer notice that Landlord is entitled to draw thereunder, (iv) issued by an
FDIC-insured financial institution reasonably satisfactory to Landlord, and (v) redeemable by
presentation of a sight draft in the State of California. If Tenant does not provide Landlord with
a substitute Letter of Credit complying with all of the requirements hereof at least 10 days before
the stated expiration date of any then current Letter of Credit, Landlord shall have the right to
draw the full amount of the current Letter of Credit and hold the funds drawn in cash without
obligation for interest thereon as the Security Deposit. The Security Deposit shall be held by
Landlord as security for the performance of Tenant’s obligations under this Lease. The Security
Deposit is not an advance rental deposit or a measure of Landlord’s damages in case of Tenant’s
default. Upon each occurrence of a Default (as defined in Section 20), Landlord may use
all or any part of the Security Deposit to pay delinquent payments due under this Lease, future
rent damages under California Civil Code Section 1951.2, and the cost of any damage, injury,
expense or liability caused by such Default, without prejudice to any other remedy provided herein
or provided by law. Landlord’s right to use the Security Deposit under this Section 6
includes the right to use the Security Deposit to pay future rent damages following the termination
of this Lease pursuant to Section 21(c) below. Upon any use of all or any portion of the
Security Deposit, Tenant shall pay Landlord on demand the amount that will restore the Security
Deposit to the amount set forth on Page 1 of this Lease. Tenant hereby waives the provisions of
any law, now or hereafter in force, including, without limitation, California Civil Code Section
1950.7, which provide that Landlord may claim from a security deposit only those sums reasonably
necessary to remedy defaults in the payment of Rent, to repair damage caused by Tenant or to clean
the Premises, it being agreed that Landlord may, in addition, claim those sums reasonably necessary
to compensate Landlord for any other loss or damage, foreseeable or unforeseeable, caused by the
act or omission of Tenant or any officer, employee, agent or invitee of Tenant. Upon bankruptcy or
other debtor-creditor proceedings against Tenant, the Security Deposit shall be deemed to be
applied first to the payment of Rent and other charges due Landlord for periods prior to the filing
of such proceedings. Upon any such use of all or any portion of the Security Deposit, Tenant
shall, within 5 days after demand from Landlord, restore the Security Deposit to its original
amount. If Tenant shall fully perform every provision of this Lease to be performed by Tenant, the
Security Deposit, or any balance thereof (i.e., after deducting therefrom all amounts to which
Landlord is entitled under the provisions of this Lease), shall be returned to Tenant (or, at
Landlord’s option, to the last assignee of Tenant’s interest hereunder) within 60 days after the
expiration or earlier termination of this Lease.



     Landlord shall deliver to Tenant the unapplied cash security deposit being held by Landlord
pursuant to the Existing Sublease Agreement, if any, within 30 days after Tenant’s delivery of the
Letter of Credit to Landlord pursuant to the immediately preceding paragraph.



     If Landlord transfers its interest in the Project or this Lease, Landlord shall either (a)
transfer any Security Deposit then held by Landlord to a person or entity assuming Landlord’s
obligations under this Section 6, or (b) return to Tenant any Security Deposit then held by
Landlord and remaining after the deductions permitted herein. Upon such transfer to such
transferee or the return of the Security Deposit to Tenant, Landlord shall have no further
obligation with respect to the Security Deposit, and Tenant’s right to the return of the Security
Deposit shall apply solely against Landlord’s transferee. The Security Deposit is not an advance
rental deposit or a measure of Landlord’s damages in case of Tenant’s default. Landlord’s
obligation respecting the Security Deposit is that of a debtor, not a trustee, and no interest
shall accrue thereon.








 









 








			
	 	 	 
	Net Multi-Tenant Laboratory
	 	5871 Oberlin/Anadys — Page 7






     7. Use. The Premises shall be used solely for the Permitted Use set forth in the basic lease
provisions on page 1 of this Lease, and in compliance with all laws, orders, judgments, ordinances,
regulations, codes, directives, permits, licenses, covenants and restrictions now or hereafter
applicable to the Premises, and to the use and occupancy thereof, including, without limitation,
the Americans With Disabilities Act, 42 U.S.C. § 12101, et seq. (together with the regulations
promulgated pursuant thereto, “ADA”) (collectively, “Legal Requirements” and each, a “Legal
Requirement”). Tenant shall, upon 5 days’ written notice from Landlord, discontinue any use of the
Premises which is declared by any Governmental Authority (as defined in Section 9) having
jurisdiction to be a violation of a Legal Requirement (provided that Tenant shall have the right,
at Tenant’s sole cost and expense, to dispute or appeal such declaration). Tenant will not use or
permit the Premises to be used for any purpose or in any manner that would void Tenant’s or
Landlord’s insurance, increase the insurance risk, or cause the disallowance of any sprinkler or
other credits. The use that Tenant has disclosed to Landlord that Tenant will be making of the
Premises as of the Commencement Date will not result in the voidance of or an increased insurance
risk with respect to the insurance currently being maintained by Landlord. Tenant shall not permit
any part of the Premises to be used as a “place of public accommodation”, as defined in the ADA or
any similar legal requirement. Tenant shall reimburse Landlord promptly upon demand for any
additional premium charged for any such insurance policy by reason of Tenant’s failure to comply
with the provisions of this Section or otherwise caused by Tenant’s use and/or occupancy of the
Premises.



     Tenant will use the Premises in a careful, safe and proper manner and will not commit or
permit waste, overload the floor or structure of the Premises, subject the Premises to use that
would damage the Premises or obstruct or interfere with the rights of Landlord or other tenants or
occupants of the Project, including conducting or giving notice of any auction, liquidation, or
going out of business sale on the Premises, or using or allowing the Premises to be used for any
unlawful purpose. Tenant shall cause any equipment or machinery to be installed in the Premises so
as to reasonably prevent sounds or vibrations from the Premises from extending into Common Areas,
or other space in the Project. Tenant shall not place any machinery or equipment weighing 500
pounds or more in or upon the Premises or transport or move such items through the Common Areas of
the Project or in the Project elevators without the prior written consent of Landlord. Tenant
shall not, without the prior written consent of Landlord, use the Premises in any manner which will
require ventilation, air exchange, heating, gas, steam, electricity or water beyond the existing
capacity of the Project as proportionately allocated to the Premises based upon Tenant’s Share as
usually furnished for the Permitted Use. As of the date of this Lease, Landlord has no actual
knowledge of any violation by Tenant of the requirements of this second paragraph of this
Section 7.



     Landlord shall be responsible, at Landlord’s sole cost, for the compliance of the Common Areas
of the Project with Legal Requirements as of the Commencement Date. Thereafter, Landlord shall be
responsible, subject to reimbursement as part of Operating Expenses, for the compliance of the
Common Areas of the Project with Legal Requirements, except to the extent arising from Tenant’s
Alterations or Tenant’s particular use or occupancy of the Premises, in which case Tenant shall be
responsible for the same. Notwithstanding anything in this Lease to the contrary, Landlord shall
be responsible, at Landlord’s sole cost, for compliance of the Project with Legal Requirements
triggered solely by the Renovation. Except as otherwise provided herein, Tenant, at its sole
expense, shall make any alterations or modifications to the interior or the exterior of the
Premises or the Project that are required by Legal Requirements (including, without limitation,
compliance of the Premises with the ADA) related to Tenant’s use or occupancy of the Premises.
Notwithstanding any other provision herein to the contrary, Tenant shall be responsible for any and
all demands, claims, liabilities, losses, costs, expenses, actions, causes of action, damages or
judgments, and all reasonable expenses incurred in investigating or resisting the same (including,
without limitation, reasonable attorneys’ fees, charges and disbursements and costs of suit)
(collectively, “Claims”) arising out of or in connection with Legal Requirements for which Tenant
is responsible, and Tenant shall indemnify, defend, hold and save Landlord harmless from and
against any and all Claims arising out of or in connection with any failure of the Premises to
comply with any Legal Requirement for which Tenant is responsible.








 









 








			
	 	 	 
	Net Multi-Tenant Laboratory
	 	5871 Oberlin/Anadys — Page 8






     8. Holding Over. If, with Landlord’s express written consent, which consent may be granted or
withheld in Landlord’s sole and absolute discretion, Tenant retains possession of the Premises
after the termination of the Term, (i) unless otherwise agreed in such written consent, such
possession shall be subject to immediate termination by Landlord at any time, (ii) all of the other
terms and provisions of this Lease (including, without limitation, the adjustment of Base Rent
pursuant to Section 4 hereof) shall remain in full force and effect (excluding any
expansion or renewal option or other similar right or option) during such holdover period, (iii)
Tenant shall pay Base Rent equal to 110% of Rent in effect during the last 30 days of the Term, and
(iv) all other payments shall continue under the terms of this Lease. If Tenant remains in
possession of the Premises after the expiration or earlier termination of the Term without the
express written consent of Landlord, (A) Tenant shall become a tenant at sufferance upon the terms
of this Lease except that the monthly rental shall be equal to 150% of Rent in effect during the
last 30 days of the Term, and (B) Tenant shall be responsible for all damages suffered by Landlord
resulting from or occasioned by Tenant’s holding over, including consequential damages; provided,
however, that if Tenant delivers a written inquiry to Landlord within 30 days prior to the
expiration or earlier termination of the Term, Landlord will notify Tenant whether the potential
exists for consequential damages. No holding over by Tenant, whether with or without consent of
Landlord, shall operate to extend this Lease except as otherwise expressly provided, and this
Section 8 shall not be construed as consent for Tenant to retain possession of the
Premises. Acceptance by Landlord of Rent after the expiration of the Term or earlier termination
of this Lease shall not result in a renewal or reinstatement of this Lease.



     9. Taxes. Landlord shall pay, as part of Operating Expenses, all taxes, levies, fees,
assessments and governmental charges of any kind, existing as of the Commencement Date or
thereafter enacted (collectively referred to as “Taxes”), imposed by any federal, state, regional,
municipal, local or other governmental authority or agency, including, without limitation,
quasi-public agencies (collectively, “Governmental Authority”) during the Term, including, without
limitation, all Taxes: (i) imposed on or measured by or based, in whole or in part, on rent
payable to (or gross receipts received by) Landlord under this Lease and/or from the rental by
Landlord of the Project or any portion thereof, or (ii) based on the square footage, assessed value
or other measure or evaluation of any kind of the Premises or the Project, or (iii) assessed or
imposed by or on the operation or maintenance of any portion of the Premises or the Project,
including parking, or (iv) assessed or imposed by, or at the direction of, or resulting from Legal
Requirements, or interpretations thereof, promulgated by any Governmental Authority, or (v) imposed
as a license or other fee, charge, tax, or assessment on Landlord’s business or occupation of
leasing space in the Project. Landlord may contest by appropriate legal proceedings the amount,
validity, or application of any Taxes or liens securing Taxes. Taxes shall not include any net
income taxes imposed on Landlord except to the extent such net income taxes are in substitution for
any Taxes payable hereunder. If any such Tax is levied or assessed directly against Tenant, then
Tenant shall be responsible for and shall pay the same at such times and in such manner as the
taxing authority shall require. Tenant shall pay, prior to delinquency, any and all Taxes levied
or assessed against any personal property or trade fixtures placed by Tenant in the Premises,
whether levied or assessed against Landlord or Tenant. If any Taxes on Tenant’s personal property
or trade fixtures are levied against Landlord or Landlord’s property, or if the assessed valuation
of the Project is increased by a value attributable to improvements in or alterations to the
Premises, whether owned by Landlord or Tenant and whether or not affixed to the real property so as
to become a part thereof, higher than the base valuation on which Landlord from time-to-time
allocates Taxes to all tenants in the Project, Landlord shall have the right, but not the
obligation, to pay such Taxes. Landlord’s determination of any excess assessed valuation shall be
binding and conclusive, absent manifest error. The amount of any such payment by Landlord shall
constitute Additional Rent due from Tenant to Landlord immediately upon demand.



     10. Parking. Subject to all matters of record, Force Majeure, a Taking (as defined in Section
19 below) and the exercise by Landlord of its rights hereunder, Tenant shall have the right, in
common with other tenants of the Project pro rata in accordance with the rentable area of the
Premises and the rentable areas of the Project occupied by such other tenants, to park in those
areas designated for non-reserved parking, subject in each case to Landlord’s rules and
regulations, at no additional cost to Tenant. Landlord may allocate parking spaces among Tenant
and other tenants in the Project pro rata as








 









 








			
	 	 	 
	Net Multi-Tenant Laboratory
	 	5871 Oberlin/Anadys — Page 9






described above if Landlord determines that such parking facilities are becoming crowded.
Landlord shall not be responsible for enforcing Tenant’s parking rights against any third parties,
including other tenants of the Project.




     11. Utilities, Services. Landlord shall provide, subject to the terms of this Section
11, water, electricity, heat, light, power, sewer, and other utilities (including gas and fire
sprinklers to the extent the Project is plumbed for such services), refuse and trash collection and
janitorial services (collectively, “Utilities”). Tenant shall be permitted, at Tenant’s sole cost
and expense, to continue to use the rooftop boiler which services the autoclave and dishwasher
within the Premises as of the Commencement Date, which boiler is owned by Landlord and shall be
maintained in good working order by Tenant during the Term. Landlord shall pay, as Operating
Expenses or subject to Tenant’s reimbursement obligation, for all Utilities used on the Premises,
all maintenance charges for Utilities, and any storm sewer charges or other similar charges for
Utilities imposed by any Governmental Authority or Utility provider, and any taxes, penalties,
surcharges or similar charges thereon. The Premises is currently separately metered for
electricity and gas. Tenant shall pay directly to the Utility provider, prior to delinquency, any
separately metered Utilities and services which may be furnished to Tenant or the Premises during
the Term. Within 5 days after Tenant’s payment of separately metered gas and electricity provided
to the Premises, Tenant shall provide Landlord with copies of the applicable invoices so that such
amounts paid by Tenant may be factored into the cap on Operating Expenses provided for in
Section 5. Tenant shall pay, as part of Operating Expenses, its share of all charges for
jointly metered Utilities based upon consumption, as reasonably determined by Landlord. No
interruption or failure of Utilities, from any cause whatsoever other than Landlord’s willful
misconduct, shall result in eviction or constructive eviction of Tenant, termination of this Lease
or the abatement of Rent. Tenant agrees to limit use of water and sewer with respect to Common
Areas to normal restroom use.



     Landlord’s sole obligation for either providing emergency generators or providing emergency
back-up power to Tenant shall be: (i) to provide emergency generators with not less than the
capacity of the emergency generators located in the Building as of the Commencement Date, and (ii)
to contract with a third party to maintain the emergency generators as per the manufacturer’s
standard maintenance guidelines. Landlord shall have no obligation to provide Tenant with
operational emergency generators or back-up power or to supervise, oversee or confirm that the
third party maintaining the emergency generators is maintaining the generators as per the
manufacturer’s standard guidelines or otherwise. During any period of replacement, repair or
maintenance of the emergency generators when the emergency generators are not operational,
including any delays thereto due to the inability to obtain parts or replacement equipment,
Landlord shall have no obligation to provide Tenant with an alternative back-up generator or
generators or alternative sources of back-up power. Tenant expressly acknowledges and agrees that
Landlord does not guaranty that such emergency generators will be operational at all times or that
emergency power will be available to the Premises when needed.



     12. Alterations and Tenant’s Property. Any alterations, additions, or improvements made to
the Premises by or on behalf of Tenant, including additional locks or bolts of any kind or nature
upon any doors or windows in the Premises, but excluding installation, removal or realignment of
furniture systems (other than removal of furniture systems owned or paid for by Landlord) not
involving any modifications to the structure or connections (other then by ordinary plugs or jacks)
to Building Systems (as defined in Section 13) (“Alterations”) shall be subject to
Landlord’s prior written consent, which may be given or withheld in Landlord’s sole discretion if
any such Alteration affects the structure or Building Systems and shall not be otherwise
unreasonably withheld. If Landlord approves any Alterations, Landlord may impose such conditions
on Tenant in connection with the commencement, performance and completion of such Alterations as
Landlord may deem appropriate in Landlord’s sole and absolute discretion. Any request for approval
shall be in writing, delivered not less than 15 business days in advance of any proposed
construction, and accompanied by plans, specifications, bid proposals, work contracts and such
other information concerning the nature and cost of the alterations as may be reasonably requested
by Landlord, including the identities and mailing addresses of all persons performing work or
supplying materials. Landlord’s right to review plans and specifications and to monitor
construction shall be solely for its own benefit, and Landlord shall have no duty to ensure that
such plans








 









 








			
	 	 	 
	Net Multi-Tenant Laboratory
	 	5871 Oberlin/Anadys — Page 10






and specifications or construction comply with applicable Legal Requirements. Tenant shall
cause, at its sole cost and expense, all Alterations to comply with insurance requirements and with
Legal Requirements and shall implement at its sole cost and expense any alteration or modification
required by Legal Requirements as a result of any Alterations. Tenant shall pay to Landlord, as
Additional Rent, on demand an amount equal to 5% of all charges incurred by Tenant or its
contractors or agents in connection with any Alteration to cover Landlord’s overhead and expenses
for plan review, coordination, scheduling and supervision. Before Tenant begins any Alteration,
Landlord may post on and about the Premises notices of non-responsibility pursuant to applicable
law. Tenant shall reimburse Landlord for, and indemnify and hold Landlord harmless from, any
expense incurred by Landlord by reason of faulty work done by Tenant or its contractors, delays
caused by such work, or inadequate cleanup.




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



     Except for Removable Installations (as hereinafter defined), all Installations (as hereinafter
defined) shall be and shall remain the property of Landlord during the Term and following the
expiration or earlier termination of the Term, shall not be removed by Tenant at any time during
the Term, and shall remain upon and be surrendered with the Premises as a part thereof.
Notwithstanding the foregoing, Landlord may, at the time its approval of any such Installation is
requested, notify Tenant that Landlord requires that Tenant remove such Installation upon the
expiration or earlier termination of the Term, in which event Tenant shall remove such Installation
in accordance with the immediately succeeding sentence. Upon the expiration or earlier termination
of the Term, Tenant shall remove (i) all wires, cables or similar equipment which Tenant has
installed in the Premises or in the risers or plenums of the Building, (ii) any Installations for
which Landlord has given Tenant notice of removal in accordance with the immediately preceding
sentence, and (iii) all of Tenant’s Property (as hereinafter defined), and Tenant shall restore and
repair any damage caused by or occasioned as a result of such removal, including, without
limitation, capping off all such connections behind the walls of the Premises and repairing any
holes. During any restoration period beyond the expiration or earlier termination of the Term,
Tenant shall pay Rent to Landlord as provided herein as if said space were otherwise occupied by
Tenant. If Landlord is requested by Tenant or any lender, lessor or other person or entity
claiming an interest in any of Tenant’s Property to waive any lien Landlord may have against any of
Tenant’s Property, and Landlord consents to such waiver, then Landlord shall be entitled to be paid
as administrative rent a fee of $1,000 per occurrence for its time and effort in preparing and
negotiating such a waiver of lien.



     For purposes of this Lease, (x) “Removable Installations” means any items listed on Exhibit F
attached hereto and any items agreed by Landlord in writing to be included on Exhibit F in the
future, (y) “Tenant’s Property” means Removable Installations and, other than Installations, any
personal property or equipment of Tenant that may be removed without material damage to the
Premises, and (z) “Installations” means all property of any kind paid for by Landlord, all
Alterations, all fixtures, and all partitions, hardware, built-in machinery, built-in casework and
cabinets and other similar additions, equipment, property and improvements built into the Premises
so as to become an integral part of the Premises, including, without limitation, fume hoods which
penetrate the roof or plenum area, built-in cold rooms, built-in warm rooms, walk-in cold rooms,
walk-in warm rooms, deionized water systems, glass washing equipment, autoclaves, chillers,
built-in plumbing, electrical and mechanical equipment and systems, and any power generator and
transfer switch. Tenant shall not be required to remove or restore any Alterations or Improvements
existing in the Premises as of the Commencement Date.



     13. Landlord’s Repairs. Landlord, as an Operating Expense, shall maintain all of the
structural, exterior, parking and other Common Areas of the Project, including HVAC, plumbing, fire








 









 








			
	 	 	 
	Net Multi-Tenant Laboratory
	 	5871 Oberlin/Anadys — Page 11






sprinklers, elevators and all other building systems serving the Premises and other portions
of the Project (“Building Systems”), in good repair, reasonable wear and tear and uninsured losses
and damages caused by Tenant, or by any of Tenant’s agents, servants, employees, invitees and
contractors (collectively, “Tenant Parties”) excluded. Losses and damages caused by Tenant or any
Tenant Party shall be repaired by Landlord, to the extent not covered by insurance, at Tenant’s
sole cost and expense. Landlord reserves the right to temporarily stop Building Systems services
when necessary (i) by reason of accident or emergency, or (ii) for planned repairs, alterations or
improvements, which are, in the judgment of Landlord, desirable or necessary to be made, until said
repairs, alterations or improvements shall have been completed. Landlord shall have no
responsibility or liability for failure to supply Building Systems services during any such period
of interruption; provided, however, that Landlord shall, except in case of
emergency, make a commercially reasonable effort to give Tenant 24 hours advance notice of any
planned stoppage of Building Systems services for routine maintenance, repairs, alterations or
improvements. Landlord shall endeavor to minimize interruption of Tenant’s operations at the
Premises during such planned stoppages of Building Systems. Tenant shall promptly give Landlord
written notice of any repair required by Landlord pursuant to this Section, after which Landlord
shall make a commercially reasonable effort to effect such repair. Landlord shall not be liable
for any failure to make any repairs or to perform any maintenance unless such failure shall persist
for an unreasonable time after Tenant’s written notice of the need for such repairs or maintenance.
Tenant waives its rights under any state or local law to terminate this Lease or to make such
repairs at Landlord’s expense and agrees that the parties’ respective rights with respect to such
matters shall be solely as set forth herein. Repairs required as the result of fire, earthquake,
flood, vandalism, war, or similar cause of damage or destruction shall be controlled by Section
18.




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



     15. Mechanic’s Liens. Tenant shall discharge, by bond or otherwise, any mechanic’s lien filed
against the Premises or against the Project for work claimed to have been done for, or materials
claimed to have been furnished to, Tenant within 10 days after the filing thereof, at Tenant’s sole
cost and shall otherwise keep the Premises and the Project free from any liens arising out of work
performed, materials furnished or obligations incurred by Tenant. Should Tenant fail to discharge
any lien described herein, Landlord shall have the right, but not the obligation, to pay such claim
or post a bond or otherwise provide security to eliminate the lien as a claim against title to the
Project and the cost thereof shall be immediately due from Tenant as Additional Rent. If Tenant
shall lease or finance the acquisition of office equipment, furnishings, or other personal property
of a removable nature utilized by Tenant in the operation of Tenant’s business, Tenant warrants
that any Uniform Commercial Code Financing Statement filed as a matter of public record by any
lessor or creditor of Tenant will upon its face or by exhibit thereto indicate that such Financing
Statement is applicable only to removable personal property of Tenant located within the Premises.
In no event shall the address of the Project be furnished on the statement without qualifying
language as to applicability of the lien only to removable personal property, located in an
identified suite held by Tenant.



     16. Indemnification. Tenant hereby indemnifies and agrees to defend, save and hold Landlord
harmless from and against any and all Claims for injury or death to persons or damage to








 









 








			
	 	 	 
	Net Multi-Tenant Laboratory
	 	5871 Oberlin/Anadys — Page 12






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




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



     Tenant, at its sole cost and expense, shall maintain during the Term: all risk property
insurance with business interruption and extra expense coverage, covering the full replacement cost
of all property and improvements installed or placed in the Premises by Tenant at Tenant’s expense;
workers’ compensation insurance with no less than the minimum limits required by law; employer’s
liability insurance with such limits as required by law; and commercial general liability
insurance, with a minimum limit of not less than $2,000,000 per occurrence for bodily injury and
property damage with respect to the Premises. The commercial general liability insurance policy
shall name Alexandria Real Estate Equities, Inc., and Landlord, its officers, directors, employees,
managers, agents, invitees and contractors (collectively, “Landlord Parties”), as additional
insureds; insure on an occurrence and not a claims-made basis; be issued by insurance companies
which have a rating of not less than policyholder rating of A and financial category rating of at
least Class X in “Best’s Insurance Guide”; contain a hostile fire endorsement and a contractual
liability endorsement; and provide primary coverage to Landlord (any policy issued to Landlord
providing duplicate or similar coverage shall be deemed excess over Tenant’s policies). Tenant
shall (i) provide Landlord with advance written notice of cancellation of such commercial general
liability policy, and (ii) require Tenant’s insurer to endeavor to provide 30 days advance written
notice of cancellation of such commercial general liability policy. Copies of such policies (if
requested by Landlord), or certificates of insurance showing the limits of coverage required
hereunder and showing Landlord as an additional insured, along with reasonable evidence of the
payment of premiums for the applicable period, shall be delivered to Landlord by Tenant upon
commencement of the Term and upon each renewal of said insurance. Tenant’s policy may be a
“blanket policy” with an aggregate per location endorsement which specifically provides that the
amount of insurance shall not be prejudiced by other losses covered by the policy. Tenant shall,
at least 5 days prior to the expiration of such policies, furnish Landlord with renewal
certificates.



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








 









 








			
	 	 	 
	Net Multi-Tenant Laboratory
	 	5871 Oberlin/Anadys — Page 13






underlying lease rather than that of a fee owner, and/or (iii) any management company retained
by Landlord to manage the Project.




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



     Landlord may require insurance policy limits to be raised to conform with requirements of
Landlord’s lender and/or to bring coverage limits to levels then being generally required of new
tenants within the Project.



     18. Restoration. If, at any time during the Term, the Project or the Premises are damaged or
destroyed by a fire or other insured casualty, Landlord shall notify Tenant within 60 days after
discovery of such damage as to the amount of time Landlord reasonably estimates it will take to
restore the Project or the Premises, as applicable (the “Restoration Period”). If the Restoration
Period is estimated to exceed 6 months (the “Maximum Restoration Period”), Landlord may, in such
notice, elect to terminate this Lease as of the date that is 75 days after the date of discovery of
such damage or destruction. Unless Landlord so elects to terminate this Lease, Landlord shall,
subject to receipt of sufficient insurance proceeds (with any deductible to be treated as a current
Operating Expense), promptly restore the Premises (excluding the improvements installed by Tenant
or by Landlord and paid for by Tenant), subject to delays arising from the collection of insurance
proceeds, from Force Majeure events or as needed to obtain any license, clearance or other
authorization of any kind required to enter into and restore the Premises issued by any
Governmental Authority having jurisdiction over the use, storage, handling, treatment, generation,
release, disposal, removal or remediation of Hazardous Materials (as defined in Section 30)
in, on or about the Premises (collectively referred to herein as “Hazardous Materials Clearances”);
provided, however, that if repair or restoration of the Premises is not
substantially complete as of the end of the Maximum Restoration Period or, if longer, the
Restoration Period, Landlord may, in its sole and absolute discretion, elect not to proceed with
such repair and restoration, in which event Landlord shall be relieved of its obligation to make
such repairs or restoration and this Lease shall terminate as of the date that is 75 days after the
later of: (i) discovery of such damage or destruction, or (ii) the date all required Hazardous
Materials Clearances are obtained, but Landlord shall retain any Rent paid and the right to any
Rent payable by Tenant prior to such election by Landlord or Tenant.



     Tenant, at its expense, shall promptly perform, subject to delays arising from the collection
of insurance proceeds, from Force Majeure (as defined in Section 34) events or to obtain
Hazardous Material Clearances, all repairs or restoration not required to be done by Landlord and
shall promptly re-enter the Premises and commence doing business in accordance with this Lease.
Notwithstanding the foregoing, either Landlord or Tenant may terminate this Lease upon written
notice to the other if the Premises are damaged during the last year of the Term and Landlord
reasonably estimates that it will take more than 2 months to repair such damage; provided, however,
that such notice is delivered within 10 business days after the date that Landlord provides Tenant
with written notice of the estimated Restoration Period. Landlord shall also have the right to
terminate this Lease if insurance proceeds are not available for such restoration. Rent shall be
abated from the date all required Hazardous Material Clearances are obtained until the Premises are
repaired and restored, in the proportion which the area of








 









 








			
	 	 	 
	Net Multi-Tenant Laboratory
	 	5871 Oberlin/Anadys — Page 14






the Premises, if any, which is not usable by Tenant bears to the total area of the Premises,
unless Landlord provides Tenant with other space during the period of repair that is suitable for
the temporary conduct of Tenant’s business. Such abatement shall be the sole remedy of Tenant, and
except as provided in this Section 18, Tenant waives any right to terminate the Lease by
reason of damage or casualty loss.




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



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



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



     (a) Payment Defaults. Tenant shall fail to pay any installment of Rent or any other payment
hereunder when due; provided, however, that Landlord will give Tenant notice and an opportunity to
cure any failure to pay Rent within 3 days of any such notice not more than once in any 12 month
period and Tenant agrees that such notice shall be in lieu of and not in addition to, or shall be
deemed to be, any notice required by law.



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



     (c) Abandonment. Tenant shall abandon the Premises. Tenant shall not be deemed to have
abandoned the Premises if (i) Tenant provides Landlord with reasonable advance notice prior to
vacating and, at the time of vacating the Premises, Tenant continues to work diligently to complete
Tenant’s obligations with respect to the Surrender Plan in compliance with Section 28, (ii)
Tenant has made reasonable arrangements with Landlord for the security of the Premises for the
balance of the Term, and (iii) Tenant continues during the balance of the Term to satisfy all of
its obligations under the Lease as they come due








 









 








			
	 	 	 
	Net Multi-Tenant Laboratory
	 	5871 Oberlin/Anadys — Page 15






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



     (e) Liens. Tenant shall fail to discharge or otherwise obtain the release of any lien placed
upon the Premises in violation of this Lease within 10 days after any such lien is filed against
the Premises.



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



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



     (h) Other Defaults. Tenant shall fail to comply with any provision of this Lease other than
those specifically referred to in this Section 20, and, except as otherwise expressly
provided herein, such failure shall continue for a period of 10 days after written notice thereof
from Landlord to Tenant.



Any notice given under Section 20(h) hereof shall: (i) specify the alleged default, (ii)
demand that Tenant cure such default, (iii) be in lieu of, and not in addition to, or shall be
deemed to be, any notice required under any provision of applicable law, and (iv) not be deemed a
forfeiture or a termination of this Lease unless Landlord elects otherwise in such notice;
provided that if the nature of Tenant’s default pursuant to Section 20(h) is such
that it cannot be cured by the payment of money and reasonably requires more than 10 days to cure,
then Tenant shall not be deemed to be in default if Tenant commences such cure within said 10 day
period and thereafter diligently prosecutes the same to completion; provided,
however, that such cure shall be completed no later than 30 days from the date of
Landlord’s notice.




     21. Landlord’s Remedies.



     (a) Payment By Landlord; Interest. Upon a Default by Tenant hereunder, Landlord may, without
waiving or releasing any obligation of Tenant hereunder, make such payment or perform such act.
All sums so paid or incurred by Landlord, together with interest thereon, from the date such sums
were paid or incurred, at the annual rate equal to 12% per annum or the highest rate permitted by
law (the “Default Rate”), whichever is less, shall be payable to Landlord on demand as Additional
Rent. Nothing herein shall be construed to create or impose a duty on Landlord to mitigate any
damages resulting from Tenant’s Default hereunder.



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








 









 








			
	 	 	 
	Net Multi-Tenant Laboratory
	 	5871 Oberlin/Anadys — Page 16






the late charge, Rent not paid when due shall bear interest at the Default Rate from the 5th
day after the date due until paid.




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




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




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




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




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




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




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




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



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





     (iii) Landlord may continue this Lease in effect after Tenant’s Default and recover
rent as it becomes due (Landlord and Tenant hereby agreeing that Tenant has the right to
sublet or assign hereunder, subject only to reasonable limitations). Accordingly, if
Landlord does not elect to terminate this Lease following a Default by Tenant, Landlord may,
from time to time, without terminating this Lease, enforce all of its rights and remedies
hereunder, including the right to recover all Rent as it becomes due.








 









 








			
	 	 	 
	Net Multi-Tenant Laboratory
	 	5871 Oberlin/Anadys — Page 17







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




     (v) Independent of the exercise of any other remedy of Landlord hereunder or under
applicable law, Landlord may conduct an environmental test of the Premises as generally
described in Section 30(d) hereof, at Tenant’s expense.



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



     22. Assignment and Subletting.



     (a) General Prohibition. Without Landlord’s prior written consent subject to and on the
conditions described in this Section 22, Tenant shall not, directly or indirectly,
voluntarily or by operation of law, assign this Lease or sublease the Premises or any part thereof
or mortgage, pledge, or hypothecate its leasehold interest or grant any concession or license
within the Premises, and any attempt to do any of the foregoing shall be void and of no effect. If
Tenant is a corporation, partnership or limited liability company, the shares or other ownership
interests thereof which are not actively traded upon a stock exchange or in the over-the-counter
market, a transfer or series of transfers whereby 49% or more of the issued and outstanding shares
or other ownership interests of such corporation are, or voting control is, transferred (but
excepting transfers upon deaths of individual owners) from a person or persons or entity or
entities which were owners thereof at time of execution of this Lease to persons or entities who
were not owners of shares or other ownership interests of the corporation, partnership or limited
liability company at time of execution of this Lease, shall be deemed an assignment of this Lease
requiring the consent of Landlord as provided in this Section 22. Notwithstanding the
foregoing, any sale of shares or ownership interests in Tenant over a recognized exchange, or any
raising of capital by an offering of stock or ownership interests in Tenant shall not be deemed an
assignment under this Section 22 requiring Landlord consent.



     (b) Permitted Transfers. If Tenant desires to assign, sublease, hypothecate or otherwise
transfer this Lease or sublet the Premises other than pursuant to a Permitted Assignment (as
defined








 









 








			
	 	 	 
	Net Multi-Tenant Laboratory
	 	5871 Oberlin/Anadys — Page 18






below), then at least 15 business days, but not more than 45 business days, before the date
Tenant desires the assignment or sublease to be effective (the “Assignment Date”), Tenant shall
give Landlord a notice (the “Assignment Notice”) containing such information about the proposed
assignee or sublessee, including the proposed use of the Premises and any Hazardous Materials
proposed to be used, stored handled, treated, generated in or released or disposed of from the
Premises, the Assignment Date, any relationship between Tenant and the proposed assignee or
sublessee, and all material terms and conditions of the proposed assignment or sublease, including
a copy of any proposed assignment or sublease in its final form, and such other information as
Landlord may deem reasonably necessary or appropriate to its consideration whether to grant its
consent. Landlord may, by giving written notice to Tenant within 15 business days after receipt of
the Assignment Notice: (i) grant such consent, or (ii) refuse such consent, in its reasonable
discretion. Among other reasons, it shall be reasonable for Landlord to withhold its consent in any
of these instances: (1) the proposed assignee or subtenant is a governmental agency; (2) in
Landlord’s reasonable judgment, the use of the Premises by the proposed assignee or subtenant would
entail any alterations that would lessen the value of the leasehold improvements in the Premises,
or would require increased services by Landlord; (3) in Landlord’s reasonable judgment, the
proposed assignee or subtenant is engaged in areas of scientific research or other business
concerns that are controversial; (4) in Landlord’s reasonable judgment, the proposed assignee or
subtenant lacks the creditworthiness to support the financial obligations it will incur under the
proposed assignment or sublease; (5) in Landlord’s reasonable judgment, the character, reputation,
or business of the proposed assignee or subtenant is inconsistent with the desired tenant-mix or
the quality of other tenancies in the Project or is inconsistent with the type and quality of the
nature of the Building; (6) Landlord has received from any prior landlord to the proposed assignee
or subtenant a negative report concerning such prior landlord’s experience with the proposed
assignee or subtenant; (7) Landlord has experienced previous defaults by or is in litigation with
the proposed assignee or subtenant; (8) the use of the Premises by the proposed assignee or
subtenant will violate any applicable Legal Requirement; (9) the proposed assignee or subtenant is
an entity with whom Landlord is negotiating to lease space in the Project; or (10) the assignment
or sublease is prohibited by Landlord’s lender. No failure of Landlord to exercise any such option
to terminate this Lease, or to deliver a timely notice in response to the Assignment Notice, shall
be deemed to be Landlord’s consent to the proposed assignment, sublease or other transfer. Tenant
shall pay to Landlord a fee equal to One Thousand Five Hundred Dollars ($1,500) in connection with
its consideration of any Assignment Notice and/or its preparation or review of any consent
documents. Notwithstanding the foregoing, Landlord’s consent to an assignment of this Lease or a
subletting of any portion of the Premises to any entity controlling, controlled by or under common
control with Tenant (a “Control Permitted Assignment”) shall not be required, provided that
Landlord shall have the right to approve the form of any such sublease or assignment. In addition,
Tenant shall have the right to assign this Lease, upon 30 days prior written notice to Landlord but
without obtaining Landlord’s prior written consent, to a corporation or other entity which is a
successor-in-interest to Tenant, by way of merger, consolidation or corporate reorganization, or by
the purchase of all or substantially all of the assets or the ownership interests of Tenant
provided that (i) such merger or consolidation, or such acquisition or assumption, as the case may
be, is for a good business purpose and not principally for the purpose of transferring the Lease,
and (ii) the net worth (as determined in accordance with generally accepted accounting principles
(“GAAP”)) of the assignee satisfies Landlord’s then underwriting criteria and is sufficient for the
remaining Term to satisfy such assignee’s obligations under this Lease and its other business
obligations, and (iii) such assignee shall agree in writing to assume all of the terms, covenants
and conditions of this Lease arising after the effective date of the assignment (a “Corporate
Permitted Assignment”). Control Permitted Assignments and Corporate Permitted Assignments are
hereinafter referred to as “Permitted Assignments.”




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




     (i) that any assignee or subtenant agree, in writing at the time of such assignment or
subletting, that if Landlord gives such party notice that Tenant is in default under this
Lease, such party shall thereafter make all payments otherwise due Tenant directly to
Landlord, which payments will be received by Landlord without any liability except to credit
such payment against








 









 








			
	 	 	 
	Net Multi-Tenant Laboratory
	 	5871 Oberlin/Anadys — Page 19







those due under the Lease, and any such third party shall agree to attorn to Landlord
or its successors and assigns should this Lease be terminated for any reason;
provided, however, in no event shall Landlord or its successors or assigns
be obligated to accept such attornment; and




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



     (d) No Release of Tenant, Sharing of Excess Rents. Notwithstanding any assignment or
subletting, Tenant and any guarantor or surety of Tenant’s obligations under this Lease shall at
all times remain fully and primarily responsible and liable for the payment of Rent and for
compliance with all of Tenant’s other obligations under this Lease. Except in connection with a
Permitted Assignment, if the Rent due and payable by a sublessee or assignee (or a combination of
the rental payable under such sublease or assignment plus any bonus or other consideration therefor
or incident thereto in any form) exceeds the rental payable under this Lease, (excluding however,
any Rent payable under this Section) (“Excess Rent”), then Tenant shall be bound and obligated to
pay Landlord as Additional Rent hereunder 50% of such Excess Rent within 10 days following receipt
thereof by Tenant. If Tenant shall sublet the Premises or any part thereof, Tenant hereby
immediately and irrevocably assigns to Landlord, as security for Tenant’s obligations under this
Lease, all rent from any such subletting, and Landlord as assignee and as attorney-in-fact for
Tenant, or a receiver for Tenant appointed on Landlord’s application, may collect such rent and
apply it toward Tenant’s obligations under this Lease; except that, until the occurrence of a
Default, Tenant shall have the right to collect such rent.



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



     (f) Prior Conduct of Proposed Transferee. Notwithstanding any other provision of this
Section 22, if (i) the proposed assignee or sublessee of Tenant has been required by any
prior landlord, lender or Governmental Authority to take remedial action in connection with
Hazardous Materials contaminating a property, where the contamination resulted from such party’s
action or use of the property in question, (ii) the proposed assignee or sublessee is subject to an
enforcement order issued by any Governmental Authority in connection with the use, storage,
handling, treatment, generation, release or disposal of Hazardous Materials (including, without
limitation, any order related to the failure to make a required reporting to any Governmental
Authority), or (iii) because of the existence of a pre-existing environmental condition in the
vicinity of or underlying the Project, the risk that Landlord would be targeted as a responsible
party in connection with the remediation of such pre-existing environmental condition would be
materially increased or exacerbated by the proposed use of Hazardous Materials by








 









 








			
	 	 	 
	Net Multi-Tenant Laboratory
	 	5871 Oberlin/Anadys — Page 20






such proposed assignee or sublessee, Landlord shall have the absolute right to refuse to
consent to any assignment or subletting to any such party.




     23. Estoppel Certificate. Tenant shall, within 10 business days of written notice from
Landlord, execute, acknowledge and deliver a statement in writing in any form reasonably requested
by a proposed lender or purchaser, (i) certifying that this Lease is unmodified and in full force
and effect (or, if modified, stating the nature of such modification and certifying that this Lease
as so modified is in full force and effect) and the dates to which the rental and other charges are
paid in advance, if any, (ii) acknowledging that there are not any uncured defaults on the part of
Landlord hereunder, or specifying such defaults if any are claimed, and (iii) setting forth such
further information with respect to the status of this Lease or the Premises as may be requested
thereon. Any such statement may be relied upon by any prospective purchaser or encumbrancer of all
or any portion of the real property of which the Premises are a part. Tenant’s failure to deliver
such statement within such time shall, at the option of Landlord, constitute a Default under this
Lease, and, in any event, shall be conclusive upon Tenant that the Lease is in full force and
effect and without modification except as may be represented by Landlord in any certificate
prepared by Landlord and delivered to Tenant for execution.



     24. Quiet Enjoyment. So long as Tenant is not in Default under this Lease, Tenant shall,
subject to the terms of this Lease, at all times during the Term, have peaceful and quiet enjoyment
of the Premises against any person claiming by, through or under Landlord.



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



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



     27. Subordination. This Lease and Tenant’s interest and rights hereunder are hereby made and
shall be subject and subordinate at all times to the lien of any Mortgage now existing or hereafter
created on or against the Project or the Premises, and all amendments, restatements, renewals,
modifications, consolidations, refinancing, assignments and extensions thereof, without the
necessity of any further instrument or act on the part of Tenant; provided, however
that so long as there is no Default hereunder, Tenant’s right to possession of the Premises shall
not be disturbed by the Holder of any such Mortgage. Tenant agrees, at the election of the Holder
of any such Mortgage, to attorn to any such Holder. Tenant agrees upon demand to execute,
acknowledge and deliver such instruments, confirming such subordination, and such instruments of
attornment as shall be requested by any such Holder, provided any such instruments contain
appropriate non-disturbance provisions assuring Tenant’s quiet enjoyment of the Premises as set
forth in Section 24 hereof. Tenant hereby appoints Landlord attorney-in-fact for Tenant
irrevocably (such power of attorney being coupled with an interest) to execute, acknowledge and
deliver any such instrument and instruments for and in the name of Tenant and to cause any such
instrument to be recorded. Notwithstanding the foregoing, any such Holder may at any time
subordinate its Mortgage to this Lease, without Tenant’s consent, by notice in writing to Tenant,
and thereupon this Lease shall be deemed prior to such Mortgage without regard to their respective
dates of execution, delivery or recording and in that event such Holder shall have the same rights
with respect to this Lease as though this Lease had been executed prior to the execution, delivery
and recording of such Mortgage and had been assigned to such Holder. The term “Mortgage” whenever
used in this Lease shall be deemed to include deeds of trust, security assignments and any other
encumbrances, and any reference to the “Holder” of a Mortgage shall be deemed to include the
beneficiary under a deed of trust. Landlord agrees to use reasonable efforts to cause the Holder of
the current Mortgage to enter into a subordination, non-disturbance and attornment agreement
(“SNDA”) with Tenant with respect to this








 









 








			
	 	 	 
	Net Multi-Tenant Laboratory
	 	5871 Oberlin/Anadys — Page 21






Lease. The SNDA shall be on the form proscribed by the Holder and Tenant shall pay the
Holder’s fees and costs in connection with obtaining such SNDA; provided, however, that Landlord
shall request that Holder make any changes to the SNDA requested by Tenant. Landlord’s failure to
cause the Holder to enter into the SNDA with Tenant (or make any of the changes requested by
Tenant) shall not be a default by Landlord under this Lease.




     28. Surrender. Upon the expiration of the Term or earlier termination of Tenant’s right of
possession, Tenant shall surrender the Premises to Landlord in the same condition as received,
subject to any Alterations or Installations permitted by Landlord to remain in the Premises, free
of Hazardous Materials brought upon, kept, used, stored, handled, treated, generated in, or
released or disposed of from, the Premises by any person other than a Landlord Party (collectively,
“Tenant HazMat Operations”) and released of all Hazardous Materials Clearances, broom clean,
ordinary wear and tear and casualty loss and condemnation covered by Sections 18 and
19 excepted. At least 3 months prior to the surrender of the Premises, Tenant shall
deliver to Landlord a narrative description of the actions proposed (or required by any
Governmental Authority) to be taken by Tenant in order to surrender the Premises (including any
Installations permitted by Landlord to remain in the Premises) at the expiration or earlier
termination of the Term, free from any residual impact from the Tenant HazMat Operations and
otherwise released for unrestricted use and occupancy (the “Surrender Plan”). Such Surrender Plan
shall be accompanied by a current listing of (i) all Hazardous Materials licenses and permits held
by or on behalf of any Tenant Party with respect to the Premises, and (ii) all Hazardous Materials
used, stored, handled, treated, generated, released or disposed of from the Premises, and shall be
subject to the review and approval of Landlord’s environmental consultant. In connection with the
review and approval of the Surrender Plan, upon the request of Landlord, Tenant shall deliver to
Landlord or its consultant such additional non-proprietary information concerning Tenant HazMat
Operations as Landlord shall request. On or before such surrender, Tenant shall deliver to
Landlord evidence that the approved Surrender Plan shall have been satisfactorily completed and
Landlord shall have the right, subject to reimbursement at Tenant’s expense as set forth below, to
cause Landlord’s environmental consultant to inspect the Premises and perform such additional
procedures as may be deemed reasonably necessary to confirm that the Premises are, as of the
effective date of such surrender or early termination of the Lease, free from any residual impact
from Tenant HazMat Operations. Tenant shall reimburse Landlord, as Additional Rent, for the actual
out-of pocket expense incurred by Landlord for Landlord’s environmental consultant to review and
approve the Surrender Plan and to visit the Premises and verify satisfactory completion of the
same, which cost shall not exceed $5,000. Landlord shall have the unrestricted right to deliver
such Surrender Plan and any report by Landlord’s environmental consultant with respect to the
surrender of the Premises to third parties.



     If Tenant shall fail to prepare or submit a Surrender Plan approved by Landlord, or if Tenant
shall fail to complete the approved Surrender Plan, or if such Surrender Plan, whether or not
approved by Landlord, shall fail to adequately address any residual effect of Tenant HazMat
Operations in, on or about the Premises, Landlord shall have the right to take such actions as
Landlord may deem reasonable or appropriate to assure that the Premises and the Project are
surrendered free from any residual impact from Tenant HazMat Operations, the cost of which actions
shall be reimbursed by Tenant as Additional Rent, without regard to the limitation set forth in the
first paragraph of this Section 28.



     Tenant shall immediately return to Landlord all keys and/or access cards to parking, the
Project, restrooms or all or any portion of the Premises furnished to or otherwise procured by
Tenant. If any such access card or key is lost, Tenant shall pay to Landlord, at Landlord’s
election, either the cost of replacing such lost access card or key or the cost of reprogramming
the access security system in which such access card was used or changing the lock or locks opened
by such lost key. Any Tenant’s Property, Alterations and property not so removed by Tenant as
permitted or required herein shall be deemed abandoned and may be stored, removed, and disposed of
by Landlord at Tenant’s expense, and Tenant waives all claims against Landlord for any damages
resulting from Landlord’s retention and/or disposition of such property. All obligations of Tenant
hereunder not fully performed as of the termination of the Term, including the obligations of
Tenant under Section 30 hereof, shall survive the expiration or earlier








 









 








			
	 	 	 
	Net Multi-Tenant Laboratory
	 	5871 Oberlin/Anadys — Page 22






termination of the Term, including, without limitation, indemnity obligations, payment
obligations with respect to Rent and obligations concerning the condition and repair of the
Premises.




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



     30. Environmental Requirements.



     (a) Prohibition/Compliance/Indemnity. Tenant shall not cause or permit any Hazardous
Materials (as hereinafter defined) to be brought upon, kept, used, stored, handled, treated,
generated in or about, or released or disposed of from, the Premises or the Project in violation
of applicable Environmental Requirements (as hereinafter defined) by Tenant or any Tenant Party.
If Tenant breaches the obligation stated in the preceding sentence, or if the presence of Hazardous
Materials in the Premises during the Term or any holding over results in contamination of the
Premises, the Project or any adjacent property or if contamination of the Premises, the Project or
any adjacent property by Hazardous Materials brought into, kept, used, stored, handled, treated,
generated in or about, or released or disposed of from, the Premises by anyone other than Landlord
and Landlord’s employees, agents and contractors otherwise occurs during the Term or any holding
over, Tenant hereby indemnifies and shall defend and hold Landlord, its officers, directors,
employees, agents and contractors harmless from any and all actions (including, without limitation,
remedial or enforcement actions of any kind, administrative or judicial proceedings, and orders or
judgments arising out of or resulting therefrom), costs, claims, damages (including, without
limitation, punitive damages and damages based upon diminution in value of the Premises or the
Project, or the loss of, or restriction on, use of the Premises or any portion of the Project),
expenses (including, without limitation, attorneys’, consultants’ and experts’ fees, court costs
and amounts paid in settlement of any claims or actions), fines, forfeitures or other civil,
administrative or criminal penalties, injunctive or other relief (whether or not based upon
personal injury, property damage, or contamination of, or adverse effects upon, the environment,
water tables or natural resources), liabilities or losses (collectively, “Environmental Claims”)
which arise during or after the Term as a result of such contamination. This indemnification of
Landlord by Tenant includes, without limitation, costs incurred in connection with any
investigation of site conditions or any cleanup, treatment, remedial, removal, or restoration work
required by any federal, state or local Governmental Authority because of Hazardous Materials
present in the air, soil or ground water above, on, or under the Premises. Without limiting the
foregoing, if the presence of any Hazardous Materials on the Premises, the Project or any adjacent
property caused or permitted by Tenant or any Tenant Party results in any contamination of the
Premises, the Project or any adjacent property, Tenant shall promptly take all actions at its sole
expense and in accordance with applicable Environmental Requirements as are necessary to return the
Premises, the Project or any adjacent property to the condition existing prior to the time of such
contamination, provided that Landlord’s approval of such action shall first be obtained, which
approval shall not unreasonably be withheld so long as such actions would not potentially have any
material adverse long-term or short-term effect on the Premises or the Project. Notwithstanding
anything to the contrary contained in Section 28 or this Section 30, Tenant shall
not be responsible for, and the indemnification and hold harmless obligation set forth in this
paragraph shall not apply to (i) contamination in the Premises which Tenant can prove to Landlord’s
reasonable satisfaction existed in the Premises immediately prior to Tenant’s occupancy of the
Premises, or (ii) the presence of any Hazardous Materials in the Premises which Tenant can prove to
Landlord’s reasonable satisfaction migrated from outside of the Premises into the Premises, unless
in either case, the presence of such Hazardous Materials (x) is the result of a breach by Tenant of
any of its obligations under this Lease, or (y) was caused, contributed to or exacerbated by Tenant
or any Tenant Party.



     (b) Business. Landlord acknowledges that it is not the intent of this Section 30 to
prohibit Tenant from using the Premises for the Permitted Use. Tenant may operate its business
according to








 









 








			
	 	 	 
	Net Multi-Tenant Laboratory
	 	5871 Oberlin/Anadys — Page 23






prudent industry practices so long as the use or presence of Hazardous Materials is strictly
and properly monitored according to all then applicable Environmental Requirements. As a material
inducement to Landlord to allow Tenant to use Hazardous Materials in connection with its business,
Tenant agrees to deliver to Landlord prior to the Commencement Date a list identifying each type of
Hazardous Materials (other than products customarily used by tenants in de minimis quantities for
ordinary cleaning and office purposes) to be brought upon, kept, used, stored, handled, treated,
generated on, or released or disposed of from, the Premises and setting forth any and all
governmental approvals or permits required in connection with the presence, use, storage, handling,
treatment, generation, release or disposal of such Hazardous Materials on or from the Premises
(“Hazardous Materials List”). Tenant shall deliver to Landlord an updated Hazardous Materials List
at least once a year and shall also deliver an updated list before any new Hazardous Material is
brought onto, kept, used, stored, handled, treated, generated on, or released or disposed of from,
the Premises. Tenant shall deliver to Landlord true and correct copies of the following documents
(the “Haz Mat Documents”) relating to the use, storage, handling, treatment, generation, release or
disposal of Hazardous Materials prior to the Commencement Date, or if unavailable at that time,
concurrent with the receipt from or submission to a Governmental Authority: permits; approvals;
reports and correspondence; storage and management plans, notice of violations of any Legal
Requirements; plans relating to the installation of any storage tanks to be installed in or under
the Project (provided, said installation of tanks shall only be permitted after Landlord has given
Tenant its written consent to do so, which consent may be withheld in Landlord’s sole and absolute
discretion); all closure plans or any other documents required by any and all federal, state and
local Governmental Authorities for any storage tanks installed in, on or under the Project for the
closure of any such tanks; and a Surrender Plan (to the extent surrender in accordance with
Section 28 cannot be accomplished in 3 months). Tenant is not required, however, to
provide Landlord with any portion(s) of the Haz Mat Documents containing information of a
proprietary nature which, in and of themselves, do not contain a reference to any Hazardous
Materials or hazardous activities. It is not the intent of this Section to provide Landlord with
information which could be detrimental to Tenant’s business should such information become
possessed by Tenant’s competitors.




     (c) Tenant Representation and Warranty. Tenant hereby represents and warrants to Landlord
that (i) neither Tenant nor any of its legal predecessors has been required by any prior landlord,
lender or Governmental Authority at any time to take remedial action in connection with Hazardous
Materials contaminating a property which contamination was permitted by Tenant of such predecessor
or resulted from Tenant’s or such predecessor’s action or use of the property in question, and (ii)
Tenant is not subject to any enforcement order issued by any Governmental Authority in connection
with the use, storage, handling, treatment, generation, release or disposal of Hazardous Materials
(including, without limitation, any order related to the failure to make a required reporting to
any Governmental Authority). If Landlord determines that this representation and warranty was not
true as of the date of this lease, Landlord shall have the right to terminate this Lease in
Landlord’s sole and absolute discretion.



     (d) Testing. Landlord shall have the right to conduct annual tests of the Premises to
determine whether any contamination of the Premises or the Project has occurred as a result of
Tenant’s use. Tenant shall be required to pay the cost of such annual test of the Premises if
there is violation of this Section 30 or if contamination for which Tenant is responsible
under this Section 30 is identified; provided, however, that if Tenant conducts its own
tests of the Premises using third party contractors and test procedures acceptable to Landlord
which tests are certified to Landlord, Landlord shall accept such tests in lieu of the annual tests
to be paid for by Tenant. In addition, at any time, and from time to time, prior to the expiration
or earlier termination of the Term, Landlord shall have the right to conduct appropriate tests of
the Premises and the Project to determine if contamination has occurred as a result of Tenant’s use
of the Premises. In connection with such testing, upon the request of Landlord, Tenant shall
deliver to Landlord or its consultant such non-proprietary information concerning the use of
Hazardous Materials in or about the Premises by Tenant or any Tenant Party. If contamination has
occurred for which Tenant is liable under this Section 30, Tenant shall pay all costs to
conduct such tests. If no such contamination is found, Landlord shall pay the costs of such tests
(which shall not constitute an Operating Expense). Landlord shall provide Tenant with a copy of
all third party, non-confidential reports and tests of the Premises made by or on behalf of
Landlord during the Term without representation or








 









 








			
	 	 	 
	Net Multi-Tenant Laboratory
	 	5871 Oberlin/Anadys — Page 24






warranty and subject to a confidentiality agreement. Tenant shall, at its sole cost and
expense, promptly and satisfactorily remediate any environmental conditions identified by such
testing in accordance with all Environmental Requirements. Landlord’s receipt of or satisfaction
with any environmental assessment in no way waives any rights which Landlord may have against
Tenant.




     (e) Control Areas. Tenant shall be allowed to utilize up to its pro rata share of the
Hazardous Materials inventory within any control area or zone (located within the Premises), as
designated by the applicable building code, for chemical use or storage. As used in the preceding
sentence, Tenant’s pro rata share of any control areas or zones located within the Premises shall
be determined based on the rentable square footage that Tenant leases within the applicable control
area or zone. For purposes of example only, if a control area or zone contains 10,000 rentable
square feet and 2,000 rentable square feet of a tenant’s premises are located within such control
area or zone (while such premises as a whole contains 5,000 rentable square feet), the applicable
tenant’s pro rata share of such control area would be 20%.



     (f) Underground Tanks. If underground or other storage tanks storing Hazardous Materials
located on the Premises or the Project are used by Tenant or are hereafter placed on the Premises
or the Project by Tenant, Tenant shall install, use, monitor, operate, maintain, upgrade and manage
such storage tanks, maintain appropriate records, obtain and maintain appropriate insurance,
implement reporting procedures, properly close any underground storage tanks, and take or cause to
be taken all other actions necessary or required under applicable state and federal Legal
Requirements, as such now exists or may hereafter be adopted or amended in connection with the
installation, use, maintenance, management, operation, upgrading and closure of such storage tanks.



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



     (h) Definitions. As used herein, the term “Environmental Requirements” means all applicable
present and future statutes, regulations, ordinances, rules, codes, judgments, orders or other
similar enactments of any Governmental Authority regulating or relating to health, safety, or
environmental conditions on, under, or about the Premises or the Project, or the environment,
including without limitation, the following: the Comprehensive Environmental Response,
Compensation and Liability Act; the Resource Conservation and Recovery Act; and all state and local
counterparts thereto, and any regulations or policies promulgated or issued thereunder. As used
herein, the term “Hazardous Materials” means and includes any substance, material, waste,
pollutant, or contaminant listed or defined as hazardous or toxic, or regulated by reason of its
impact or potential impact on humans, animals and/or the environment under any Environmental
Requirements, asbestos and petroleum, including crude oil or any fraction thereof, natural gas
liquids, liquefied natural gas, or synthetic gas usable for fuel (or mixtures of natural gas and
such synthetic gas). As defined in Environmental Requirements, Tenant is and shall be deemed to be
the “operator” of Tenant’s “facility” and the “owner” of all Hazardous Materials brought on the
Premises by Tenant or any Tenant Party, and the wastes, by-products, or residues generated,
resulting, or produced therefrom.



     31. Tenant’s Remedies/Limitation of Liability. Landlord shall not be in default hereunder
unless Landlord fails to perform any of its obligations hereunder within 30 days after written
notice from Tenant specifying such failure (unless such performance will, due to the nature of the
obligation, require a period of time in excess of 30 days, then after such period of time as is
reasonably necessary). Upon any default by Landlord, Tenant shall give notice by registered or
certified mail to any Holder of a Mortgage covering the Premises and to any landlord of any lease
of property in or on which the Premises are located and Tenant shall offer such Holder and/or
landlord a reasonable opportunity to cure the default,








 









 








			
	 	 	 
	Net Multi-Tenant Laboratory
	 	5871 Oberlin/Anadys — Page 25






including time to obtain possession of the Project by power of sale or a judicial action if
such should prove necessary to effect a cure; provided Landlord shall have furnished to
Tenant in writing the names and addresses of all such persons who are to receive such notices. All
obligations of Landlord hereunder shall be construed as covenants, not conditions; and, except as
may be otherwise expressly provided in this Lease, Tenant may not terminate this Lease for breach
of Landlord’s obligations hereunder.




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



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



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



     34. Force Majeure. Except for the payment of Rent, neither Landlord nor Tenant shall be held
responsible or liable for delays in the performance of its obligations hereunder when caused by,
related to, or arising out of acts of God, sinkholes or subsidence, strikes, lockouts, or other
labor disputes, embargoes, quarantines, weather, national, regional, or local disasters,
calamities, or catastrophes, inability to obtain labor or materials (or reasonable substitutes
therefor) at reasonable costs or failure of, or inability to obtain, utilities necessary for
performance, governmental restrictions, orders, limitations, regulations, or controls, national
emergencies, delay in issuance or revocation of permits, enemy or hostile governmental action,
terrorism, insurrection, riots, civil disturbance or commotion, fire or other casualty, and other
causes or events beyond their reasonable control (“Force Majeure”).



     35. Brokers. Landlord and Tenant each represents and warrants that it has not dealt with any
broker, agent or other person (collectively, “Broker”) in connection with this transaction and that
no Broker brought about this transaction, other than Jones Lang LaSalle. Landlord and Tenant each
hereby agree to indemnify and hold the other harmless from and against any claims by any Broker,
other than








 









 








			
	 	 	 
	Net Multi-Tenant Laboratory
	 	5871 Oberlin/Anadys — Page 26






the broker, if any named in this Section 35, claiming a commission or other form of
compensation by virtue of having dealt with Tenant or Landlord, as applicable, with regard to this
leasing transaction. Landlord shall be responsible for all fees of Jones Lang LaSalle arising out
of the execution of this Lease in accordance with the terms of a separate written agreement between
Jones Lang LaSalle and Landlord.




     36. Limitation on Landlord’s Liability. NOTWITHSTANDING ANYTHING SET FORTH HEREIN OR IN ANY
OTHER AGREEMENT BETWEEN LANDLORD AND TENANT TO THE CONTRARY: (A) LANDLORD SHALL NOT BE LIABLE TO
TENANT OR ANY OTHER PERSON FOR (AND TENANT AND EACH SUCH OTHER PERSON ASSUME ALL RISK OF) LOSS,
DAMAGE OR INJURY, WHETHER ACTUAL OR CONSEQUENTIAL TO: TENANT’S PERSONAL PROPERTY OF EVERY KIND AND
DESCRIPTION, INCLUDING, WITHOUT LIMITATION TRADE FIXTURES, EQUIPMENT, INVENTORY, SCIENTIFIC
RESEARCH, SCIENTIFIC EXPERIMENTS, LABORATORY ANIMALS, PRODUCT, SPECIMENS, SAMPLES, AND/OR
SCIENTIFIC, BUSINESS, ACCOUNTING AND OTHER RECORDS OF EVERY KIND AND DESCRIPTION KEPT AT THE
PREMISES AND ANY AND ALL INCOME DERIVED OR DERIVABLE THEREFROM; (B) THERE SHALL BE NO PERSONAL
RECOURSE TO LANDLORD FOR ANY ACT OR OCCURRENCE IN, ON OR ABOUT THE PREMISES OR ARISING IN ANY WAY
UNDER THIS LEASE OR ANY OTHER AGREEMENT BETWEEN LANDLORD AND TENANT WITH RESPECT TO THE SUBJECT
MATTER HEREOF AND ANY LIABILITY OF LANDLORD HEREUNDER SHALL BE STRICTLY LIMITED SOLELY TO
LANDLORD’S INTEREST IN THE PROJECT OR ANY PROCEEDS FROM SALE OR CONDEMNATION THEREOF AND ANY
INSURANCE PROCEEDS PAYABLE IN RESPECT OF LANDLORD’S INTEREST IN THE PROJECT OR IN CONNECTION WITH
ANY SUCH LOSS; AND (C) IN NO EVENT SHALL ANY PERSONAL LIABILITY BE ASSERTED AGAINST LANDLORD IN
CONNECTION WITH THIS LEASE NOR SHALL ANY RECOURSE BE HAD TO ANY OTHER PROPERTY OR ASSETS OF
LANDLORD OR ANY OF LANDLORD’S OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR CONTRACTORS. UNDER NO
CIRCUMSTANCES SHALL LANDLORD OR ANY OF LANDLORD’S OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR
CONTRACTORS BE LIABLE FOR INJURY TO TENANT’S BUSINESS OR FOR ANY LOSS OF INCOME OR PROFIT
THEREFROM.



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



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



     Notwithstanding anything to the contrary contained herein, Tenant’s signage located on the
Project monument sign and Tenant’s suite identification signage existing as of the date of this
Lease may remain in place during the Term. Tenant shall be responsible, at Tenant’s sole cost and
expense, for the maintenance of Tenant’s signage, for the removal of Tenant’s signage at the
expiration or earlier termination of this Lease and for the repair all damage resulting from such
removal.








 









 








			
	 	 	 
	Net Multi-Tenant Laboratory
	 	5871 Oberlin/Anadys — Page 27






     39. Intentionally Omitted.



     40. Redevelopment of Project. Tenant acknowledges that Landlord, in its sole discretion, may
from time to time expand, renovate and/or reconfigure the Project as the same may exist from time
to time and, in connection therewith or in addition thereto, as the case may be, from time to time
without limitation: (a) change the shape, size, location, number and/or extent of any
improvements, buildings, structures, lobbies, hallways, entrances, exits, parking and/or parking
areas relative to any portion of the Project; (b) modify, eliminate and/or add any buildings,
improvements, and parking structure(s) either above or below grade, to the Project, the Common
Areas and/or any other portion of the Project and/or make any other changes thereto affecting the
same; and (c) make any other changes, additions and/or deletions in any way affecting the Project
and/or any portion thereof as Landlord may elect from time to time, including without limitation,
additions to and/or deletions from the land comprising the Project, the Common Areas and/or any
other portion of the Project. Notwithstanding anything to the contrary contained in this Lease,
Tenant shall have no right to seek damages (including abatement of Rent) or to cancel or terminate
this Lease because of any proposed changes, expansion, renovation or reconfiguration of the Project
nor shall Tenant have the right to restrict, inhibit or prohibit any such changes, expansion,
renovation or reconfiguration; provided, however, Landlord shall not change the size, dimensions or
location of the Premises or adversely affect Tenant’s parking or access to the Premises other than
on a temporary basis. Landlord shall endeavor to minimize interruption of Tenant’s operations at
the Premises during such expansion, renovation or reconfiguration of the Project. Landlord agrees
to perform any such expansion, renovation or reconfiguration of the Project that will, in
Landlord’s reasonable discretion, materially adversely affect Tenant’s operations at the Premises
outside of the hours of 8:00 a.m. to 6:00 p.m., Monday through Friday. Tenant acknowledges and
agrees that for a period of approximately 6-8 weeks during the Term, the lobby of the Building
shall be closed in connection with the redevelopment of the Project and that during such time,
Tenant will be required to access the Premises through the doors of the Premises other than those
which provide access to and from the lobby. Notwithstanding anything to the contrary contained
herein, capital expenditures for the redevelopment of the Project (not including capital repairs
and improvements which shall continue to be included in Operating Expenses pursuant to Section
5) shall be excluded from Operating Expenses.



     41. Roof Equipment. Subject to the provisions of this Lease, Tenant may, at its sole cost,
install, maintain, and from time to time replace a communication antenna weighing up to 50 pounds
and having a diameter or height of up to 20 inches and other related equipment on the roof of the
Building (collectively, “Roof Equipment”) in a location reasonably selected by Landlord and
reasonably acceptable to Tenant for Tenant’s own communication purposely use only; provided,
however, that (i) Tenant shall obtain Landlord’s prior written approval with respect to the
installation of such Roof Equipment which approval shall not be unreasonably withheld, conditioned
or delayed and shall include consideration all relevant factors including, without limitation, the
proposed size, weight and location of the Roof Equipment and method for fastening the same to the
roof, (ii) Tenant shall, at its sole cost, comply with any reasonable requirements imposed by
Landlord and all Legal Requirements and the conditions of any bond or warranty maintained by
Landlord on the roof, (iii) Tenant shall be responsible for paying for any structural upgrades that
may be required by Landlord in connection with the Roof Equipment, and (iv) Tenant shall remove, at
its expense, at the expiration or earlier termination of this Lease, any Roof Equipment which
Landlord requires to be removed. Landlord shall have the right to supervise any roof penetration.
Tenant may not access the roof without a representative of Landlord (who shall be reasonably
available) being present. Tenant shall repair any damage to the Building caused by Tenant’s
installation, maintenance, replacement, use or removal of the Roof Equipment. Tenant shall remove
any Roof Equipment at its cost upon expiration or termination of the Lease. Tenant shall install,
use, maintain and repair the Roof Equipment, and use the access areas, so as not to damage or
interfere with the operation of the Building. Tenant shall protect, defend, indemnify and hold
harmless Landlord from and against claims, damages, liabilities, costs and expenses of every kind
and nature, including reasonable attorneys’ fees, incurred by or asserted against Landlord arising
out of Tenant’s installation, maintenance, replacement, use or removal of the Roof Equipment.








 









 








			
	 	 	 
	Net Multi-Tenant Laboratory
	 	5871 Oberlin/Anadys — Page 28






     42. Miscellaneous.



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



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



     (c) Financial Information. Tenant shall furnish Landlord with true and complete copies of
(i) Tenant’s most recent audited annual financial statements within 90 days of the end of each of
Tenant’s fiscal years during the Term, (ii) Tenant’s most recent unaudited quarterly financial
statements within 45 days of the end of each of Tenant’s first three fiscal quarters of each of
Tenant’s fiscal years during the Term, (iii) at Landlord’s request from time to time, updated
business plans, including cash flow projections and/or pro forma balance sheets and income
statements, all of which shall be treated by Landlord as confidential information belonging to
Tenant, (iv) corporate brochures and/or profiles prepared by Tenant for prospective investors, and
(v) any other financial information or summaries that Tenant typically provides to its lenders or
shareholders. So long as Tenant is a “public company” and its financial information is publicly
available, then the foregoing delivery requirements of this Section 42(c) shall not apply.



     (d) Recordation. Neither this Lease nor a memorandum of lease shall be filed by or on behalf
of Tenant in any public record. Landlord may prepare and file, and upon request by Landlord Tenant
will execute, a memorandum of lease. The foregoing is not intended to prohibit Tenant from filing
this Lease pursuant to applicable SEC requirements.



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



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



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



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








 









 








			
	 	 	 
	Net Multi-Tenant Laboratory
	 	5871 Oberlin/Anadys — Page 29






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



     (j) OFAC. Tenant is currently (a) in compliance with and shall at all times during the Term
of this Lease remain in compliance with the regulations of the Office of Foreign Assets Control
(“OFAC”) of the U.S. Department of Treasury and any statute, executive order, or regulation
relating thereto (collectively, the “OFAC Rules”), (b) not listed on, and shall not during the term
of this Lease be listed on, the Specially Designated Nationals and Blocked Persons List maintained
by OFAC and/or on any other similar list maintained by OFAC or other governmental authority
pursuant to any authorizing statute, executive order, or regulation, and (c) not a person or entity
with whom a U.S. person is prohibited from conducting business under the OFAC Rules.



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



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



     (m) No Accord and Satisfaction. No payment by Tenant or receipt by Landlord of a lesser
amount than the monthly installment of Base Rent or any Additional Rent will be other than on
account of the earliest stipulated Base Rent and Additional Rent, nor will any endorsement or
statement on any check or letter accompanying a check for payment of any Base Rent or Additional
Rent be an accord and satisfaction. Landlord may accept such check or payment without prejudice to
Landlord’s right to recover the balance of such Rent or to pursue any other remedy provided in this
Lease.



     (n) Hazardous Activities. Notwithstanding any other provision of this Lease, Landlord, for
itself and its employees, agents and contractors, reserves the right to refuse to perform any
repairs or services in any portion of the Premises which, pursuant to Tenant’s routine safety
guidelines, practices or custom or prudent industry practices, require any form of protective
clothing or equipment other than safety glasses. In any such case, Tenant shall contract with
parties who are acceptable to Landlord, in Landlord’s reasonable discretion, for all such repairs
and services, and Landlord shall, to the extent required, equitably adjust Tenant’s Share of
Operating Expenses in respect of such repairs or services to reflect that Landlord is not providing
such repairs or services to Tenant.



[ Signatures on next page ]










 









 








			
	 	 	 
	Net Multi-Tenant Laboratory
	 	5871 Oberlin/Anadys — Page 30






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



	 	 	 	 	 
	 	TENANT:



ANADYS PHARMACEUTICALS, INC.,

a Delaware corporation

 	 
	 	By:  	/s/
Peter Slover	 
	 	 	Its: 	Vice President,
Finance and Operations	 
	 	 	 	 
	 
	 	LANDLORD:



ARE-SD REGION NO. 31, LLC,

a Delaware limited liability company

 	 
	 	By:  	ALEXANDRIA REAL ESTATE EQUITIES, L.P.,
a Delaware limited partnership,
managing member
 	 



	 	 	 	 	 
	 	 	 
	 	By:  	                    ARE-QRS CORP.,
a Maryland corporation,
general partner
 	 



	 	 	 	 	 
	 	 	 
	 	By:  	
/s/ Gary Dean	 
	 	 	Its: 	VP - RE LEGAL AFFAIRS	 









 











 





5871 Oberlin/Anadys — Page 1




EXHIBIT A TO LEASE




DESCRIPTION OF PREMISES













 









 








5871 Oberlin/Anadys — Page 1




EXHIBIT B TO LEASE




DESCRIPTION OF PROJECT


All that certain real property situated in the County of San Diego, State of California, described
as follows:



Lots 32 and 33 of Lusk Industrial Park Unit No. 1, in the City of San Diego, County of San Diego,
State of California, according to Map thereof No. 9694, filed in the Office of the County Recorder
of San Diego County, June 27, 1980.



Excepting therefrom all coal, oil, gas, petroleum and other hydrocarbon substances in and under
such property, a prior grantor, for itself and its successors and assigns, retaining the exclusive
title and right to remove said substances, together with sole right to negotiate and conclude
leases and agreements with respect to all such substances under the property and to use those
portions of the property which underlie a plane parallel to and 500 feet below the present surface
of this property for the purposes of prospecting for, developing and/or extracting such substances
from the property by means of wells drilled into or through said portions of the property from
drill sites located on other property, it being expressly understood and agreed that such prior
grantor, its successors and assigns, shall have no right to enter upon the surface of the property
or to use the property or any portion thereof above the level of the aforesaid plane, as reserved
by Lusk/Mira Mesa, a Limited Partnership, in deed recorded February 24, 1981 as File No. 81-054855
of Official Records.



Assessor’s Parcel Number 341-322-42










 










 





5871 Oberlin/Anadys -Page 1




EXHIBIT C TO LEASE



LANDLORD’S PROPERTY



	 	 	 	 	 	 	 	 	 
	BarCode	 	Model No./Description	 	Serial No.	 	Vendor
	 
	000-1255

	 	N750 Access / Intrusion Control System
	 	 	 	 	 	Northern Computer
	000-1261

	 	9 HP Boiler steam plant & 42 HP boiler steam plant

Emergency Generator
	 	 	 	 	 	Parker
	000-1235

	 	Cage & Rack Washer R630
	 	 	630-1203-N1405	 	 	NorthWestern Systems
	 
	000-1224

	 	Sterilizer SSR-3A-PB
	 	 	6045	 	 	Laboratory Equipment
	000-1250

	 	RO/DI system
	 	 	 	 	 	Robert E Byrne Company
	000-1242

	 	Video Camera System
	 	 	 	 	 	AIS / Mitsubishi
	000-1225

	 	Glass washer #470
	 	 	3601894003	 	 	Amsco
	000-1226

	 	Glass dryer #475
	 	 	3632493002	 	 	Amsco
	000-1001/1002

	 	Phone System
	 	 	 	 	 	Siemens






	 	 	 	 	 	 	 	 	 
	Office	 	Office Furniture	 	Qty	 	 	 	 
	 
	203
	 	Desk	 	1	 	 	 	 
	 
	 	Side Chair - Red	 	2	 	 	 	 
	 
	 	Bookcase	 	1	 	 	 	 
	 
	 	Cabinet	 	1	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	204
	 	Desk	 	1	 	 	 	 
	 
	 	Side Chair	 	4	 	 	 	 
	 
	 	Bookcase	 	1	 	 	 	 
	 
	 	Cabinet	 	1	 	 	 	 
	 
	 	Round Table (205)	 	1	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	206
	 	Desk	 	2	 	 	 	 
	 
	 	Bookcase (207)	 	2	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	208
	 	Desk	 	1	 	 	 	 
	 
	 	Side Chair-Red	 	2	 	 	 	 
	 
	 	Round Table	 	1	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	210
	 	Desk	 	1	 	 	 	 
	 
	 	Bookcase	 	1	 	 	 	 
	 
	 	Round Table	 	1	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	211
	 	Desk	 	1	 	 	 	 
	 
	 	Side Chair	 	1	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	212
	 	Desk	 	1	 	 	 	 
	 
	 	Side Chair	 	3	 	 	 	 
	 
	 	Round Table	 	1	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	213
	 	Conference Table	 	1	 	 	 	 
	 
	 	Office Chair - Green	 	1	 	 	 	 
	 
	 	Bookcase	 	2	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	214
	 	Round Table	 	1	 	 	 	 
	Kitchen
	 	Side Chair - Black	 	3	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	217
	 	Tech Stations	 	12	 	 	 	 
	Tech Area
	 	Cubes	 	5	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	201
	 	Cubes	 	17	 	 	 	 
	Open Offices
	 	 	 	 	 	 	 	 
























 








5871 Oberlin/Anadys — Page 1




EXHIBIT D TO LEASE




ACKNOWLEDGMENT OF COMMENCEMENT DATE



     This ACKNOWLEDGMENT OF COMMENCEMENT DATE is made this _____ day of ______________, ____,
between ARE-SD REGION NO. 31, LLC, a Delaware limited liability company (“Landlord”), and ANADYS
PHARMACEUTICALS, INC., a Delaware corporation (“Tenant”), and is attached to and made a part of
the Lease dated ______________, _____ (the “Lease”), by and between Landlord and Tenant. Any
initially capitalized terms used but not defined herein shall have the meanings given them in the
Lease.



     Landlord and Tenant hereby acknowledge and agree, for all purposes of the Lease, that the
Commencement Date of the Base Term of the Lease is February 1, 2011, the Rent Commencement Date is
March 1, 2011 and the termination date of the Base Term of the Lease shall be midnight on January
31, 2012. In case of a conflict between the terms of the Lease and the terms of this
Acknowledgment of Commencement Date, this Acknowledgment of Commencement Date shall control for all
purposes.



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



	 	 	 	 	 
	 	TENANT:



ANADYS PHARMACEUTICALS, INC.,

a Delaware corporation

 	 
	 	By:  	 	 
	 	 	Its: 	 	 
	 	 	 	 
	 



	 	 	 	 	 
	 	LANDLORD:



ARE-SD REGION NO. 31, LLC,

a Delaware limited liability company

 	 
	 	By:  	ALEXANDRIA REAL ESTATE EQUITIES, L.P.,
 	 
	 	 	a Delaware limited partnership, 	 
	 	 	managing member 	 
	 



					
	 	
 	 
	 	By:  	          ARE-QRS CORP.,
 	 
	 	 	a Maryland corporation, 	 
	 	 	general partner 	 
	 



					
	 	
 	 
	 	By:  	 	 
	 	 	Its: 	 	 
	 	 	 	 
	 







 









 








			
	Rules and Regulations
	 	5871 Oberlin/Anadys — Page 1






EXHIBIT E TO LEASE




Rules and Regulations



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



     2. Tenant shall not place any objects, including antennas, outdoor furniture, etc., in the
parking areas, landscaped areas or other areas outside of its Premises, or on the roof of the
Project.



     3. Except for animals assisting the disabled, no animals shall be allowed in the offices,
halls, or corridors in the Project.



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



     5. If Tenant desires telegraphic, telephonic or other electric connections in the Premises,
Landlord or its agent will direct the electrician as to where and how the wires may be introduced;
and, without such direction, no boring or cutting of wires will be permitted. Any such
installation or connection shall be made at Tenant’s expense.



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



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



     8. Tenant shall maintain the Premises free from rodents, insects and other pests.



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



     10. Tenant shall not cause any unnecessary labor by reason of Tenant’s carelessness or
indifference in the preservation of good order and cleanliness. Landlord shall not be responsible
to Tenant for any loss of property on the Premises, however occurring, or for any damage done to
the effects of Tenant by the janitors or any other employee or person.



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



     12. Tenant shall not permit storage outside the Premises, including without limitation,
outside storage of trucks and other vehicles, or dumping of waste or refuse or permit any harmful
materials to be placed in any drainage system or sanitary system in or about the Premises.








 









 







			
	Rules and Regulations
	 	5871 Oberlin/Anadys — Page 2






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



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



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



     16. The Premises shall not be used for lodging, sleeping or cooking or for any immoral or
illegal purposes or for any purpose other than that specified in the Lease. No gaming devices
shall be operated in the Premises.



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



     18. Tenant assumes full responsibility for protecting the Premises from theft, robbery and
pilferage.



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









 









 








5871 Oberlin/Anadys — Page 1




EXHIBIT F TO LEASE




TENANT’S PERSONAL PROPERTY


Server racks in the IT room










 









 








5871 Oberlin/Anadys — Page 1




EXHIBIT G TO LEASE




RENOVATION




	1.	 	New enhanced concrete entry walk, curb and drive
	 
	2.	 	New planters, seat walls, landscaping, site lighting, and irrigation at west side
	 
	3.	 	New exterior entry canopy
	 
	4.	 	New rooftop mechanical screen
	 
	5.	 	New stucco skimcoat on west elevation (front of bldg)
	 
	6.	 	New lobby entry storefront system and minor lobby floor and wall patching
	 
	7.	 	New storefront extensions and clear glazing at southwest and south elevations