exv10w1



 





Exhibit 10.1




SUBLEASE




     THIS SUBLEASE (“Sublease”) is entered into as of December 11, 2007 by and between Avnet, Inc.,
a New York corporation with its principal offices at 2211 South 47th Street, Phoenix, AZ
85034 (“Sublessor”) and Santarus, Inc., a Delaware corporation with its principal offices at 10590
West Ocean Air Drive, Suite 200, San Diego, CA 92130 (“Sublessee”).



RECITALS




     A. By Lease Agreement dated September 23, 2002 (the “Prime Lease”), Kilroy Realty, L.P.
(“Landlord”) leased to Memec, LLC (“Memec”) certain premises at 3721 Valley Centre Drive, San
Diego, CA 92130 (the “Building”).



     B. Sublessor is successor by merger to Memec.



     C. Sublessor desires to sublease to Sublessee and Sublessee desires to hire from Sublessor the
entire rentable area on the 4th floor consisting of approximately 24,523 rentable square feet of
space and designated as Suite 400 as depicted on the Plan attached to and forming a part of this
Sublease as Exhibit A (the “Sublet Premises”).



     NOW, THEREFORE, in consideration of the mutual agreements set forth herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Sublessor and
Sublessee mutually agree as follows:



     1. Sublease, Use and Term. Sublessor hereby subleases to Sublessee and Sublessee
hereby hires from Sublessor the Sublet Premises together with the fixtures and improvements thereon
and, subject to the conditions and limitations set forth in the Prime Lease and this Sublease the
non-exclusive right to use in common with others entitled thereto the break-room and shower-room
located on the first floor of the Building as depicted on Exhibit E hereof and the Common Areas for
the term, at the rentals and upon the terms and conditions set forth in this Sublease. The Sublet
Premises shall be used only for general business offices and uses related thereto and permitted
under the Prime Lease. The term of this Sublease shall commence on April 1, 2008 (the
“Commencement Date”) and shall expire on February 27, 2013, unless sooner terminated in accordance
with the provisions hereof; provided, however, that the Commencement Date shall be subject to
extension as provided in Section 2 below.



     2. Delivery of Premises and Sublessee Improvements.


(a) Sublessor shall deliver the Sublet Premises on the Early Possession Date in “broom swept”
condition and free of any occupants and their personal property (including, but not limited to, all
of Sublessor’s furniture located in the Sublet Premises) and otherwise in substantially similar
condition to the condition of the Sublet Premises as of the date hereof. Sublessee acknowledges
that it has inspected the Sublet Premises and the fixtures, equipment and improvements thereon, and
is fully acquainted with their condition as of the date hereof, and except for Sublessor’s
obligations in this Section 2(a) of this Sublease, Sublessee shall accept possession of the Sublet
Premises in “as is” condition on the on the Early Possession Date, ordinary wear and tear
excepted. Sublessor shall have no other obligation to perform any installations, renovations,
alterations, or improvements in or to the Sublet Premises except as set forth in this Section 2(a)
of this Sublease. In the event Sublessor shall not deliver possession of the Sublet Premises in the
condition required by this Section 2(a), Sublessee shall give written notice specifying the nature
and extent of such nonconformance within five (5) days of the Early Possession Date (as defined
below) and any other nonconformance shall be deemed to be waived. Sublessor shall promptly correct
any such nonconformance, provided however that if such nonconformance results from material damage
in or to the Sublet Premises prior to the Early Possession Date, Sublessor may elect to terminate
this Sublease by giving written notice of termination to Sublessee within five (5) days from
receipt of Sublessee’s written notice of nonconformance. Promptly following delivery of
Sublessor’s notice, Sublessor shall return any payments made by Sublessee hereunder and any letter
of credit given by Sublessee hereunder.



(b) Sublessee, at its expense, shall perform all improvements desired or required for its use and
occupancy of the Sublet Premises in accordance with plans and specifications approved by Sublessor,
which approval shall not be


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unreasonably withheld, delayed or conditioned by Sublessor, and if required under the Prime Lease,
approved by Landlord. Sublessor shall allow Sublessee an allowance in the form of an abatement of
Base Rent in an amount not to exceed in aggregate the Base Rent for the first eight (8) months of
the term of this Sublease, which is equal to $559,124.40 (the “Abatement Allowance”). The
Abatement Allowance shall be applied solely against the cost and expense incurred by Sublessee for
demolition, construction, alteration, improvement and other work, fixtures, equipment and materials
(including cabling, phone and security systems, signage, painting and re-carpeting), and any
associated out of pocket architect, construction management, design consultant and engineering
fees, plan check and permitting fees, and the contractor’s general conditions and profit, incurred
in connection therewith, as generally set forth in the Preliminary Budget dated October 10, 2007
attached hereto as Exhibit G (collectively “Sublessee Work”). In the event that the cost and
expense of Sublessee Work shall exceed the amount of the Abatement Allowance, Sublessee shall be
entirely responsible for such excess. If Sublessee does not use all or any part of the Abatement
Allowance for the purposes stated herein, then the Abatement Allowance shall be reduced
accordingly. Provided that Sublessee is not then in default of any of the material terms,
provisions or conditions of this Sublease beyond any applicable cure period, the Abatement
Allowance shall be credited to Sublessee in monthly installments equal to the amount of the Base
Rent payable for each month (and any partial month) of the Sublease Term following the Commencement
Date until such Abatement Allowance is fully-expended (or such portion thereof as equals the lesser
cost of the Sublessee Work is expended). Within thirty (30) days following completion of the
Sublessee Work, Sublessee shall deliver to Sublessor a written request for abatement (each called a
“Abatement Application”), which shall be accompanied by: (1) reasonable evidence that the Sublessee
Work has been fully paid for by Sublessee, (2) a certificate signed by Sublessee’s architect, if
any, or an officer of Sublessee certifying that the Sublessee Work is completed, (3) lien waivers
(in form reasonably satisfactory to Sublessor) from contractors, subcontractors and all materialmen
who shall have performed any of the Sublessee Work, releasing Sublessee and the Sublet Premises
from liability for the same, and (4) “as-built” plans showing changes to existing conditions
resulting from the Sublessee Work, and all building department sign-offs, inspection certificates
and any permits required to be issued by any governmental entities having jurisdiction (including,
but not limited to, a copy of a new/updated certificate of occupancy for the Sublet Premises (if
required by state and local building laws)). The Sublessee Work is subject to Landlord’s and
Sublessor’s approval; provided that Sublessor acknowledges its approval of the space plan for the
Sublet Premises attached hereto as Exhibit A, and agrees that Landlord’s consent to this Sublease
shall include approval of the Sublessee Work. Sublessor’s approval of any modifications to the
design of the Sublet Premises set forth on Exhibit A after the date of this Sublease shall not be
unreasonably withheld,
 delayed or conditioned. The Abatement Allowance is being given for the
benefit of Sublessee only. No third party shall be permitted to make any claims against Sublessor
or Sublessee with respect to any portion of the Abatement Allowance.



(c) Notwithstanding any provision of this Section 2 to the contrary, Sublessor shall deliver
possession of the Sublet Premises for performance of Sublessee’s Work three (3) business days after
the date Sublessor delivers to Sublessee the written consent of Landlord pursuant to Section 18 of
this Sublease (the “Early Possession Date”); provided, however, that Sublessor agrees to use
diligent and commercially reasonable efforts to obtain Landlord’s written consent prior to December
15, 2007, and agrees that if the Early Possession Date does not occur on or before January 1, 2008
for any reason other than a failure by Sublessee to reasonably cooperate with Sublessor’s efforts
to obtain such consent by such date, then the Commencement Date shall be delayed by one day for
each day that the Early Possession Date is delayed beyond January 1, 2008; further provided,
however, that if, notwithstanding Sublessor’s commercially reasonable and diligent efforts to
obtain such consent, the Early Possession Date does not occur by February 1, 2008, either party may
terminate this Sublease by giving written notice of termination to the other no later than February
10, 2008. Promptly following delivery of such notice, Sublessor shall return any payments made by
Sublessee hereunder and any letter of credit provided by Sublessee hereunder. Sublessee’s access
to the Sublet Premises and performance of Sublessee’s Work prior to the Commencement Date shall be
subject to and in accordance with all of the terms and conditions of this Sublease, including the
obligation to provide certificates of insurance required pursuant to this Sublease, except that
Sublessee shall have no liability for Base Rent prior to the Commencement Date or for Additional
Rent prior to the Commencement Date except to the extent that Additional Rent arises solely from
Sublessee’s possession or use of the Sublet Premises.




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     3. Rent.



     (a) Sublessee shall pay to Sublessor as base rent (“Base Rent”) the following:


$838,686.60 payable $69,890.55 per month from April 1, 2008 to March 31, 2009*

$868.040.63 payable $72,336.72 per month from April 1, 2009 to March 31, 2010

$898,422.05 payable $74,868.50 per month from April 1, 2010 to March 31, 2011

$929,866.82 payable $77,488.90 per month from April 1, 2011 to March 31, 2012

$882, 211.11 payable $80,201.01 per month from April 1, 2012 to February 27, 2013




     *Base Rent shall be subject to abatement from the Commencement Date until the Abatement
Allowance (or such portion thereof to which Sublessee is entitled) is fully expended in accordance
with Section 2(b) of this Sublease.



     Sublessee shall pay Base Rent in advance on the first day of each month of the term, except
that Sublessee shall pay the first monthly installment of Base Rent payable hereunder prior to
taking possession of the Sublet Premises following the Early Possession Date.



     (b) Sublessee shall pay to Sublessor as additional rent (“Additional Rent”) all other sums
payable under this Sublease.



     (c) Sublessee shall pay Base Rent and Additional Rent (collectively “Rent”) in lawful money of
the United States by good check or draft drawn to the direct order of Sublessor at the address of
Sublessor herein or to such other party or such other address as Sublessor shall designate, without
notice or demand and without any deduction, set-off, abatement (except for any abatements expressly
provided herein) or offset whatsoever. If this Sublease shall commence on a day other than the
first day of a calendar month, or if this Sublease shall expire or terminate on a day other than
the last day of a calendar month, then Rent payable for such fractional month shall be prorated on
a daily basis based upon a thirty (30) day calendar month. Additional Rent shall be paid as and
when specified in this Sublease; if not specified in this Sublease Additional Rent shall be paid
within twenty (20) days from receipt of Sublessor’s invoice.



     4. Additional Rent. . For the purposes of this Sublease: the rentable area of the
Sublet Premises shall mean 24,523 square feet, which is the agreed rentable square foot area of the
Sublet Premises; and the rentable area of the Building shall mean 114,782 square feet, which is the
agreed rentable square foot area of the Building; and “Sublessee’s Share” shall be deemed to mean
21.37%, which is the agreed percentage obtained by dividing 24,523 by 114,782. In the event that
the rentable square foot area leased by Sublessor under the Prime Lease shall be increased or
decreased during the term of this Sublease, Sublessee’s Share shall be recalculated in accordance
with ANSI Z65.1-1996, as promulgated by the Building Owners and Managers Association. Sublessee
shall pay as Additional Rent Sublessee’s Share of:



     (a) any increases in charges incurred by Sublessor pursuant to Article 4 of the Prime Lease
over sums incurred by Sublessor pursuant to Article 4 of the Prime Lease for the calendar year
ending December 31, 2008 (the “Base Year” for purposes of this Sublease); and further provided that
the “gross up” provisions of Section 4.2 of the Prime Lease shall be limited to Landlord’s gross up
of Project and Building Operating Expenses under the Prime Lease and shall not require Sublessee to
pay more that the Sublessee’s Share of such Operating Expenses payable by Sublessor if the Building
is not fully sublet or occupied at any time during the Sublease Term; and



     (b) any increases in charges incurred by Sublessor pursuant to provisions of the Prime Lease
other than Article 3 or 4 of the Prime Lease (less any applicable credits), provided however that
Sublessee shall pay 100% of all charges payable for electricity and other utilities supplied to the
Sublet Premises; 100% of all charges for services supplied to the Sublet Premises (except as
otherwise set forth in this Sublease) and 100% of all such charges resulting from Sublessee’s
violation of any provision of this Sublease; and



     (c) If applicable in the jurisdiction where the Sublet Premises are situated, Sublessee shall
pay and be liable for all rental, sales, use and other similar taxes, if any, (excluding income
taxes of Sublessor) levied or imposed by any governmental or municipal authority having authority
on payments by Sublessee pursuant to this Sublease. If any applicable taxing authority requires
payment of such taxes as a component of taxes payable by Sublessor to such taxing authority,
Sublessor shall notify Sublessee of such requirement and Sublessee shall thereafter make such
payments to Sublessor concurrently with the payment of the Rent upon which the tax is based as set
forth above.



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     (d) Sublessor shall provide Sublessee with copies of all documentation received by Sublessor
from Landlord in support of the Base Year charges and calculations of Additional Rent payable by
Sublessee under this Sublease. At Sublessee’s written request, Sublessor shall exercise its rights
pursuant to Section 4.6 of the Prime Lease to (a) request documentation evidencing the accuracy of
Landlord’s calculations of Additional Rent, and (b) dispute such calculations and seek to have them
adjusted, provided that Sublessee shall pay Sublessor for any and all out of pocket expenses
(including the reasonable accountants and attorneys fees) incurred by Sublessor in connection with
such dispute.



     5. Repairs and Maintenance. Sublessor shall not be responsible for injury, loss or
damage resulting from acts or omissions of third parties performing repairs or maintenance or for
injury, loss or damage resulting from the condition of the Sublet Premises or the lands and
buildings of which the Sublet Premises are a part or the fixtures or improvements therein, except
where such loss or damage arises from the negligence or willful misconduct of Sublessor, its
agents, employees, contractors and/or subcontractors.



     6. Utilities and Services.



     (a) Sublessee shall pay for electricity provided to the Sublet Premises and to mechanical
equipment serving the Sublet Premises based on usage shown on such sub-meter(s). Sublessor shall
invoice Sublessee for its use of electricity on a monthly basis showing in reasonable detail the
computation of charges for the prior month for electricity together with copies of applicable bills
received by Sublessor from the utility providing electricity and Sublessee shall pay Sublessor or
its designee for Sublessee’s use of electricity at rates no greater than the rates that Sublessee
would have paid if metered directly to the utility providing electricity to the Building.



     (b) Notwithstanding any provision of this Sublease to the contrary, cleaning and janitorial
service to the Sublet Premises shall be provided by Landlord in accordance with the Cleaning
Specifications attached to the Prime Lease as Exhibit J thereto.



     (c) Sublessor agrees to provide at Sublessor’s expense (except for reimbursement of charges
for issuance of access cards and except to the extent that such charges are payable by Sublessee
pursuant to Section 4 of this Sublease) the security equipment and related services specified in
Exhibit D hereto. Sublessee hereby acknowledges that such equipment is operated and/or monitored
by a recognized third party service provider and that Sublessor’s sole responsibility shall be to
continue to engage a recognized third party service provider to operate and/or monitor such
equipment. Subject to the foregoing, Sublessor shall not be responsible for providing security and
shall not be responsible for the failure of any security equipment and/or monitoring service.
Sublessee hereby assumes all responsibility for the protection of Sublessee, its employees, agents,
invitees and property from acts of third parties. Sublessee shall give Sublessor prompt written
notice of the failure of any security equipment or monitoring service provided hereunder upon
Sublessee obtaining actual knowledge of such failure.



     7. Casualty Loss; Condemnation. This Sublease and Sublessee’s rights hereunder shall
be subject to the exercise by Landlord or any third party entitled thereto of any rights granted
pursuant to the Prime Lease or by law, including the right to terminate the Prime Lease or this
Sublease in the event of any taking by eminent domain or condemnation or any casualty loss or
damage. In the event of any taking by eminent domain or condemnation or any casualty loss or
damage to the Sublet Premises, Sublessee agrees to be subject to any action taken to terminate the
Prime Lease by Sublessor pursuant to the terms of the Prime Lease.



     8. Holding Over. If Sublessee or any party claiming by, through or under Sublessee
holds over in the Sublet Premises after expiration or termination of this Sublease, Sublessor may
exercise any and all remedies available to it at law or in equity to recover possession of the
Sublet Premises, and to recover damages, including without limitation, all amounts payable by
Sublessor to Landlord by reason of such holdover. For any month or partial month that Sublessee
or any party claiming by, through or under Sublessee remains in the occupancy of the Sublet
Premises after the expiration or termination of this Sublease, such occupancy shall at Sublessor’s
option be construed as tenancy from month to month only at a monthly Rental equal to the greater of
(a) one and one-half (1-1/2) times the Rent and Additional Rent payable for the month prior to
expiration or termination of this Sublease; or (b) the Rent and Additional Rent and other amounts
payable by Sublessor to Landlord by reason of such holding over. The foregoing shall not be
construed as Sublessor’s permission for Sublessee to hold over and the acceptance by Sublessor of
any lesser sum shall be construed as payment on account and not in satisfaction of damages for such
holding over. Notwithstanding the foregoing terms of surrender, Sublessee is not prohibited by
Sublessor from entering into a separate direct agreement with Prime Landlord for the extension of
Sublessee’s occupancy in the



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Sublet Premises beyond the expiration or earlier termination of this Sublease, either as a
direct lease or a month-to-month holdover agreement (a “Direct Occupancy Agreement”), and in the
event that Sublessee and Landlord enter into a Direct Occupancy Agreement for the Sublet Premises,
then provided that (y) a copy of the Direct Agreement is provided to Sublessor, and (z) Prime
Landlord agrees in writing, for the express benefit of, and in form and substance reasonably
acceptable to, Sublessor, that (i) terminates the Prime Lease with respect to the Sublet Premises
as of the date of the expiration or earlier termination of this Sublease, and (ii) releases
Sublessor from any and all liability and obligation under the Prime Lease (1) for the Sublessee’s
failure to vacate the Sublet Premises, (2) for the condition of the Sublet Premises upon their
surrender by Sublessee, and (3) from any and all claims relating to the Sublet Premises arising
after the date of expiration or earlier termination of this Sublease, then Sublessor agrees to
waive any renewal or extension rights under the Prime Lease with respect to the Sublet Premises,
and this Sublease shall be deemed terminated as of the commencement of such Direct Occupancy
Agreement notwithstanding Sublessee’s failure to surrender the Sublet Premises as otherwise
required by this Sublease. The provisions of this Section 8 are intended to be binding on
Sublessor and Sublessee (and their successors and assigns) only, and in consenting to this
Sublease, Prime Landlord is not obligated in any way to provide Sublessee with a Direct Occupancy
Agreement, and it shall be within Prime Landlord’s sole and absolute discretion to grant or reject
any request by Sublessee for such an agreement.



     9.  Default by Sublessee; Remedies of Sublessor. Sublessee shall be in default under
this Sublease: (i) if Sublessee shall fail to pay Rent or Additional Rent or other amounts as and
when same shall be due hereunder and such failure shall continue for five (5) business days after
receipt of written notice of such failure; or (ii) if Sublessee shall fail to comply with any
provision of this Sublease and shall not cure such failure within thirty (30) days after receipt of
written notice thereof, provided however that if the nature of Sublessee’s obligation requires more
than thirty (30) days for compliance and Sublessor shall not be in default under the Prime Lease by
reason thereof, Sublessee shall not be in default if Sublessee commences to cure such default
within such thirty (30) days and thereafter diligently prosecutes same to completion; or (iii) if
any act or omission by Sublessee shall constitute a default under the Prime Lease and Sublessee
shall not cure such default or threatened default within one half of the time period allowed to
cure such default under the Prime Lease. If Sublessee shall be in default under this Sublease,
Sublessor shall have the right, without further notice to Sublessee, to (a) invoke any of the
remedies permitted under the Prime Lease; or (b) invoke any other remedies permitted by law or in
equity by reason of such default, including the right of injunction. Notwithstanding the
foregoing, if Sublessee receives notice of Landlord’s election to exercise its right to terminate
the Prime Lease as a result of an Event of Default by Sublessor under the Prime Lease (including,
without limitation, Sublessee’s receipt of a 3-day notice to pay rent or quit, as required under
California law), and such default is capable of cure by the payment of money, then Sublessee shall
have the right, but not the obligation, to cure such a monetary default by Sublessor under the
Prime Lease if necessary to prevent a termination of this Sublease, and the amount paid to cure
such default shall be reimbursed by Sublessor within ten (10) business days following delivery of
written notice from Sublessee, including confirmation from Landlord that the default was
effectively cured by such payment; provided, however, that Sublessee shall have no right to recover
from Sublessor those amounts paid by Sublessee in curing any monetary default by Sublessor under
the Prime Lease until either (y) Sublessor agrees in writing with Sublessee that such a monetary
default under the Prime Lease existed and the amount paid by Sublessee on behalf of Sublessor was
indeed due and unpaid by Sublessor, or (z) Sublessee obtains the judgment of a court of competent
jurisdiction (or other adjudicative body mutually agreed to by Sublessor and Sublessee) reaching
such conclusion (provided that in the event of a filing by or against Sublessor of any proceeding
under bankruptcy or insolvency laws, which results in the stay of any such action, the amounts
previously paid by Sublessee shall be deemed due and payable by Sublessor). For the purposes of
Sublessee’s cure rights under this Section 9, the failure by Sublessor to maintain the insurance
required by the Prime Lease shall be deemed to be a monetary default. Any amount due from
Sublessor to Sublessee under this Section 9 shall be subject to the limitations of Section 10(c)
below, and if such amount is not reimbursed to Sublessee within twenty (20) days after the date due
and payable as provided above shall be subject to Sublessee’s right to offset such amount against
Sublessee’s Rent obligations accruing under this Sublease after the expiration of such 20-day
period.



     10. Prime Lease.



     (a) This Sublease shall be subject and subordinate to the terms, covenants and conditions of
the Prime Lease. Except as otherwise set forth herein, Sublessee agrees to fully and faithfully
perform all of the obligations of Sublessor as tenant under the Prime Lease, and abide by and
observe all the terms, conditions, restrictions and limitations imposed on Sublessor as tenant by
the Prime Lease, with respect to the Sublet Premises, and not to do anything which would constitute
a default under the Prime Lease or omit to do anything which would result in a violation of the
terms, covenants and conditions of the Prime Lease.



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     (b) The terms, covenants and conditions of the Prime Lease are hereby incorporated herein by
reference with the same force and effect as if fully set forth in this Sublease, except that:




     (i) any reference in the Prime Lease to “Landlord” or “Tenant” shall mean the Sublessor
or Sublessee, respectively; any reference in the Prime Lease to “Premises” shall mean the
Sublet Premises; any reference in the Prime Lease to “Tenant’s Share” shall mean the
Sublessee’s Share; any reference in the Prime Lease to the “term” shall mean the term of
this Sublease; any reference in the Prime Lease to quantities applicable to the Building
shall be adjusted to reflect Sublessee’s Share;




     (ii) Sublessor shall have no responsibility for any representations, warranties, covenants or
agreements of Landlord or for performance of any obligations of Landlord or for any failure of
Landlord to perform any of Landlord’s obligations or for any act or omission of Landlord;




     (iii) the following portions of the Prime Lease shall not be incorporated in this
Sublease: all Sections of the “Summary of Basic Lease Information”, Sections 1.3, 1.4, 2, 4,
16, 21 (except 21.2.5), 23.4, 29.13 (except for the last sentence thereof), 29.18, 29.24,
29.37 and 29.39 of the Prime Lease and Exhibits A, B, C, G, I, J and K; provided, however,
that the applicable terms and conditions of Article 4 of the Prime Lease are incorporated
herein as reference with respect to Sublessee’s pass-through payment obligations and the
limitations on such amounts payable by Sublessee as additional rent under Section 4 of this
Sublease, the documentation of which Sublessee is entitled to receive under Section 4(d)
above, and Sublessee’s rights pursuant to Section 4(d) above to enforce Sublessor’s rights
under Section 4.6 of the Prime Lease;




     (iv) any obligation of Landlord to provide a Non-disturbance Agreement shall be satisfied by
any non-disturbance agreement reasonably acceptable to Sublessor;




     (v) any obligation of Landlord to provide construction, alterations or improvements shall not
apply to this Sublease;




     (vi) if the Prime Lease provides Sublessor with any exclusive rights and/or any rights
to renew, or terminate, or rights of first refusal or rights to increase, or decrease the
size of the Sublet Premises, or elect to lease other premises, any such right shall be
deemed personal to Sublessor and expressly reserved to Sublessor and shall not be
incorporated in this Sublease; provided, however, that Sublessor’s renewal rights with
respect to the Sublet Premises only shall be subject to the rights of Sublessee under
Section 8 above with respect to Sublessee’s right to seek a Direct Occupancy Agreement with
Landlord;




     (vii) if a conflict between provisions of this Sublease and provisions of the Prime
Lease would permit Sublessee to do or cause to be done any act or thing to be done
prohibited by the Prime Lease, then the provisions of the Prime Lease shall prevail;




     (viii) except as otherwise provided in this Sublease, any provision of the Prime Lease
that Landlord’s consent shall not be unreasonably withheld shall not apply to Sublessor’s
consent hereunder, which consent shall be given or not given by Sublessor in its sole
judgment in the event that (a) Landlord shall not have given its consent under the Prime
Lease or (b) the giving of such consent by Sublessor would subject Sublessor to additional
liabilities, costs or expenses as a result thereof;




     (ix) if any act or omission by Sublessee shall constitute a default under the Prime Lease,
the time period for Sublessee to cure such default hereunder shall be deemed to be one-half of the
time period to cure such default under the Prime Lease (except that no such period shall be less
than three (3) days;




     (x) for purposes of incorporating Section 3.2 (Abatement of Rent) of the Prime Lease
into this Sublease, the term “Abatement Event” shall be deemed to apply to any such event
caused by Landlord, with respect to Landlord’s obligations under the Prime Lease or any such
event caused by Sublessor with respect to Sublessor’s obligations under this Sublease;




     (xi) for the purpose of incorporating Section 8.5 (Landlord’s Property) of the Prime
Lease, provided that this Sublease shall expire on or about the date that the Prime Lease
shall expire, Sublessor shall not



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require removal of improvements, alterations, fixtures or equipment from the Sublet Premises
unless Landlord shall require removal of same; and




     (xii) subject to Sublessee’s obligations to abide by and not to do anything that would
constitute a default under the Prime Lease or omit to do anything which would result in a
violation of the terms, covenants and conditions of the Prime Lease, in the event that any
provisions or defined terms set forth in this Sublease conflict with any provision or
defined term of the Prime Lease that is incorporated herein by reference, then the
provisions of this Sublease shall control.



     (c) Sublessor agrees: (i) to take all commercially reasonable actions to maintain the
existence of the Prime Lease; (ii) to defend any claim by Landlord that Sublessor is in default
under the Prime Lease and pursue all commercially reasonable means of opposing any efforts by
Landlord to terminate the Prime Lease by reason of such default. In the event that Sublessee’s
right to occupy the Sublet Premises pursuant to this Sublease is terminated as a result of: (i)
Sublessor entering into an agreement to modifiy or terminate the Prime Lease in violation of the
provisions of this Sublease, (ii) Sublessor defaulting under the Prime Lease, or (iii) Sublessor
defaulting under this Section 10(c), then in any such event Sublessor and Sublessee agree that it
would be impractical and extremely difficult to estimate the damages which Sublessee may suffer as
a result thereof. Therefore, Sublessor and Sublessee agree that a reasonable estimate of the total
net detriment that Sublessee would suffer in the event that Sublessor breaches its obligations
under this Section 10(c) is and shall be, as Sublessee’s sole and exclusive remedy (whether at law
or in equity) for such breach, an amount equal to the following: $700,000 for termination before
April 1, 2009; $500,000 for termination between April 1, 2009 and March 31, 2010; $400,000 for
termination between April 1, 2010 and March 31, 2011; and $300,000 for termination between April 1,
2011 and February 27, 2013; provided however that Sublessor shall not be liable to Sublessee for
liquidated damages if Sublessee is not in occupancy and conducting business in the entire Sublet
Premises at the time of such termination. SAID AMOUNTS SHALL BE THE FULL, AGREED AND LIQUIDATED
DAMAGES FOR THE BREACH OF THE COVENANTS SET FORTH IN THIS SECTION 10(C) BY SUBLESSOR, ALL OTHER
CLAIMS TO DAMAGES OR OTHER REMEDIES F0R SUCH BREACH BEING HEREIN EXPRESSLY WAIVED BY SUBLESSEE.
THE PARTIES ACKNOWLEDGE THAT THE PAYMENT OF SUCH LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE
OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT IS INTENDED TO
CONSTITUTE LIQUIDATED DAMAGES TO SUBLESSEE PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671, 1676
AND 1677. SUBLESSEE HEREBY WAIVES CALIFORNIA CIVIL CODE SECTION 3389. NOTWITHSTANDING THE
FOREGOING, THE WAIVERS SET FORTH IN THIS SECTION SHALL NOT PRECLUDE SUBLESSEE FROM PURSUING OTHER
REMEDIES THAT MAY BE AVAILABLE TO SUBLESSEE AT LAW OR IN EQUITY WITH RESPECT TO ANY BREACHES BY
SUBLESSOR OF ANY OTHER PROVISION OF THIS SUBLEASE.



     11. Enforcement of Landlord’s Obligations. In the event that Landlord fails to
perform any obligation under the Prime Lease for the benefit of the Sublet Premises, Sublessor
shall, on written notice from Sublessee, request that Landlord perform such obligation and
Sublessor shall use all commercially reasonable efforts (which expression shall not include
prosecution of any legal action) to obtain performance of such obligation by Landlord in favor of
the Sublet Premises. Notwithstanding the foregoing, if Landlord shall be in default under the
Prime Lease in performance of an obligation in favor of the Sublet Premises, Sublessor shall, on
notice from Sublessee and at Sublessee’s expense (which expense shall be allocated among Sublessee
and other subtenants of Sublessor providing similar notice to Sublessor), prosecute such action as
Sublessor shall deem reasonably appropriate to obtain performance of such obligation by Landlord.
Sublessee shall be entitled to participate with Sublessor in the enforcement of Sublessor’s rights
against Landlord and Sublessee agrees to cooperate with the prosecution of any such action.



     12. Parking. Sublessee shall be permitted to use 98 of the parking spaces available
to all occupants of the Building on a non-exclusive basis without additional charge. Such use
shall be subject to the terms and provisions set forth in the Prime Lease.



     13. Signage. Sublessee shall be permitted to be listed together with other
subtenant’s entitled thereto on (i) the monument sign located in front of the Building as depicted
on the Sign Plan attached hereto as Exhibit F; (ii) the building standard signage in the Elevator
Lobby and (iii) signage in the 4th Floor Lobby meeting Landlord’s requirements for any internal
signage located in the premises of the Project (provided that such signage is not visible from
outside the Sublet Premises, in which case such signage shall be subject to Sublessor’s prior
approval). All costs associated with such listing shall be payable by Sublessee.



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     14. Security Deposit, Letter of Credit. Sublessee shall on or before the date that
Sublessee commences access to the Sublet Premises pursuant to Section 2(c) of this Sublease deposit
with Sublessor a security deposit in the form of a Letter of Credit in substantially the form
attached hereto as Exhibit C and conforming to the requirements of the Prime Lease, except that:
the “Initial L-C Amount” and the “L-C Amount” shall be deemed to be as follows: (i) $150,000 from
the date which is three (3) business days after Sublessor’s delivery of Landlord’s consent pursuant
to Section 18 hereof; which shall be increased to $400,000 on January 15, 2008; and (ii) provided
that Sublessee is not then in default of any of the material terms, provisions or conditions of
this Sublease beyond any applicable cure period, the L-C Amount shall be reduced to $300,000 on
October 1, 2010 ; and (iii) provided that Sublessee is not then in default of any of the material
terms, provisions or conditions of this Sublease beyond any applicable cure period, the L-C Amount
shall be reduced to $200,000 on February 28, 2012; Sections 21.2.2, 21.2.3, 21.2.4 of the Prime
Lease shall not be incorporated in this Sublease and references to such Sections of the Prime Lease
shall not apply to this Sublease; Exhibit H of the Prime Lease shall be amended so that the
addressee is: “Avnet, Inc., 2211 South 47th Street, Phoenix, AZ 85034, Attn. Legal Department. The
Letter of Credit shall secure Sublessee’s full and faithful performance and observance of the
terms, covenants and conditions of this Sublease, including without limitation Sublessee’s
obligation to restore the Sublet Premises to its condition prior to any alteration by Sublessee.
The initial L-C delivered by Sublessee may provide for the automatic increase and decrease of the
L-C Amount as provided above, or, following each date on which the L-C Amount shall increase or
decrease, Sublessee may provide Sublessor an L-C that replaces the L-C previously provided
Subelssor; and on Sublessor’s acceptance of such replacement L-C, Sublessor shall deliver back to
Sublessee the L-C previously provided.



     15. Notices. In the event that Sublessee shall receive any notice or other
communication with respect to the Sublet Premises or the use and occupancy thereof, Sublessee shall
promptly furnish same to Sublessor. Any notice or other communication which either party shall
desire or be required to give to the other shall be deemed sufficiently given if in writing and
sent by registered or certified mail or recognized overnight carrier addressed to the other party,
as follows: to Sublessor at: Avnet, Inc., 2211 South 47th Street, Phoenix, AZ 85034,
Attn: Corporate Real Estate Department; with a copy sent concurrently to: Avnet, Inc., 2211 South
47th Street, Phoenix, AZ 85034, Attn: Legal Department; and to Sublessee at: the Sublet
Premises, Attn. Senior Vice President & CFO with a copy to Sublessee at the Sublet Premises, Attn.
General Counsel.



     16. Real Estate Broker. Sublessee and Sublessor each represents that except for
Colliers International and Burnham Real Estate, it has dealt with no real estate broker, agent,
finder or other person acting as such in connection with this transaction. Each party shall
indemnify and hold the other harmless from and against any and all claims, judgments, suits, costs,
reasonable attorney’s fees and other expenses which the other may incur by reason of claims of any
person, firm or corporation for a brokerage commission, finder’s fee or other compensation based
upon any alleged negotiations or dealings by the indemnifying party contrary to the foregoing
representation. Each party’s obligations under this section shall survive the expiration or sooner
termination of this Sublease.



     17. Representations of the Parties.



     (a) Sublessee represents to Sublessor that except as expressly set forth in this Sublease,
neither Sublessor nor its agents or representatives have made any representations or promises with
respect to the physical condition of the Sublet Premises or the lands and buildings of which the
Sublet Premises are a part or the expenses of operation, availability of utilities and services,
zoning ordinances or other legal requirements or any other matter or thing related thereto.



     (b) Sublessor represents to Sublessee that: (i) Exhibit B constitutes a true, correct and
complete copy of the Prime Lease, and comprises the entire understanding and agreement of Landlord
and Sublessor with respect to the Sublet Premises, (ii) the Prime Lease is in full force and effect
in accordance with its terms, and (iii) neither Landlord nor Sublessor is in default under the
Prime Lease (iv) to Sublessor’s knowledge, no condition exists that with notice and/or the passage
of time would constitute a default under the Prime Lease; and (v) to Sublessor’s knowledge, the
Building and the Sublet Premises are in compliance with all laws and regulations applicable to its
present uses.



     18. Landlord Approval. This Sublease shall not be effective unless and until
Sublessor shall have obtained the written consent of Landlord to: (i) this Sublease, (ii)
Sublessee’s listing on the monument sign located in front of the Building as depicted on the Sign
Plan attached hereto as Exhibit F; and (iii) Sublessee Work depicted on Exhibit A, as described in
the Preliminary Budget attached as Exhibit G. Sublessor shall request Landlord’s consent promptly
upon execution of this Sublease by the parties. In the event that such written consent is not
obtained



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within forty five (45) days from the date hereof, either party may cancel this Sublease by notice
to the other party delivered prior to receipt by Sublessor and Sublessee of such written consent of
Landlord.



     19. Miscellaneous.



     a. Where the context so permits or requires, the terms of this Sublease shall survive the
expiration or termination of this Sublease.



     b. The following exhibits are attached to and form a part of this Sublease:


Exhibit A — Sublet Premises

Exhibit B — Prime Lease

Exhibit C — Form of Letter of Credit

Exhibit D — Security Equipment and Guidelines

Exhibit E — First Floor Plan (Common Areas)

Exhibit F — Sign Plan

Exhibit G — Preliminary Budget for Sublessee Work




     c. This Sublease contains the entire agreement between the parties relative to the subject
matter hereof, and all negotiations, understandings and agreements related to the subject matter
hereof are merged in this Sublease. This Sublease may not be altered, changed or amended except by
a written agreement between Sublessor and Sublessee.



     IN WITNESS WHEREOF, Sublessor and Sublessee have executed this Sublease as of the date and
year first above written.



	 	 	 	 	 	 	 	 	 	 	 
	SUBLESSOR:	 	 	 	SUBLESSEE:	 	 
	Avnet, Inc.	 	 	 	Santarus, Inc.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Raymond Sadowski
 

	 	 	 	By:
	 	/s/ Debra P. Crawford
 

	 	 
	Name:

	 	Raymond Sadowski
	 	 	 	Name:
	 	Debra P. Crawford	 	 
	Title:

	 	S.V.P. / CFO
	 	 	 	Title:
	 	Senior VP, CFO, Treasurer and Secretary	 	 







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