Exhibit 10.4


 


CONFIDENTIAL TREATMENT
REQUESTED


UNDER 17 C.F.R §§
200.80(b)4, AND 240.24b-2


 


EXECUTION
COPY


 


 


SECOND AMENDMENT TO LEASE AGREEMENT


 


THIS SECOND AMENDMENT TO
LEASE AGREEMENT (this “Amendment”)
is entered into as of this 30th day of March, 2010 (the “Effective Date”), by
and between BMR-2282 FARADAY AVENUE LLC, a Delaware limited liability company (“Landlord”), and ISIS
PHARMACEUTICALS, INC., a Delaware corporation (“Tenant”).


 


RECITALS


 


A.            WHEREAS, Landlord and Tenant entered into
that certain Lease dated as of September 19, 2005, as amended by that
certain First Amendment to Lease Agreement dated as of May 8, 2007 (such
Lease, as so amended, the “Lease”),
whereby Tenant leases from Landlord certain premises located at 2282 Faraday
Avenue in Carlsbad, California, as more particularly described in the Lease
((the “Premises”).


 


B.            WHEREAS, Landlord and Tenant desire to
extend the Lease Term and provide Tenant with certain purchase options with
respect to the Premises, all as more particularly described herein; and


 


C.            WHEREAS, Landlord and Tenant desire to
modify and amend the Lease only in the respects and on the conditions
hereinafter stated.


 


AGREEMENT


 


NOW, THEREFORE, Landlord
and Tenant, in consideration of the mutual promises contained herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound, agree as follows:


 


1.             Definitions. For purposes of this Amendment,
capitalized terms shall have the meanings ascribed to them in the Lease unless
otherwise defined herein.


 


2.             Lease Term Extension. Section 2.1 of the Lease is
hereby replaced in its entirety with the following:


 


“Lease Term.  The term of this Lease shall commence on September 19,
2005 (the “Commencement
Date”) and end on December 31, 2031 (the “Lease Term”), subject
to earlier termination of this Lease as provided herein; provided, however,
that Tenant shall have four (4) options to extend the Lease Term, as
further described in Article 36.”


 


3.             Tenant’s Purchase Option. Article 24 of the Lease is hereby
amended by adding the following  Section 24.3:


 

















 


“24.3       Purchase Option.


 


24.3.1      Tenant
is hereby granted seven separate options  to
purchase the Premises from Landlord on the dates set forth in Section 24.2.1
of that certain Lease Agreement dated as of March 30, 2010 by and between
BMR-Gazelle Court LLC, as landlord and Tenant, as tenant (the “Gazelle Court Lease”)
on which tenant under such Gazelle Court Lease can exercise the Purchase
Options (as defined in the Gazelle Court Lease) pursuant to the terms of Section 24.2.1
of the Gazelle Court Lease (each a “Faraday Purchase Option”).  The day on which each Faraday Purchase Option
shall close shall be the date on which the equivalent Purchase Option under the
Gazelle Court Lease is required to close. 
Each such date shall be referred to herein as the “Faraday Purchase Option Closing Date”
for each applicable Faraday Purchase Option. Tenant’s exercise of a Faraday
Purchase Option shall be subject to and in accordance with the terms of this Section 24.3.  For purposes of clarity, the exercise or
expiration of a Faraday Purchase Option under the Lease will have no effect on
Tenant’s rights or obligations under the Gazelle Court Lease, and vice versa.


 


24.3.2      Tenant shall have no right to exercise any Faraday
Purchase Option, or consummate any acquisition pursuant thereto, (a) during
any period when a Tenant default exists and is continuing  under the Lease, or (b) if the Lease has
expired or otherwise been terminated. 
The rights contained in this Section 24.3 shall be personal
to Tenant or to any assignee pursuant to a Specially Permitted Assignment, and
shall automatically become null and void upon any transfer or assignment by the
Tenant (other than a Specially Permitted Assignment).


 


24.3.3      If Tenant chooses to exercise any Faraday Purchase
Option, then (a) the closing date for the purchase of the Premises shall
be the respective Faraday Purchase Option Closing Date, and (b) Tenant
shall deliver written notice to Landlord of Tenant’s decision to exercise the
Faraday Purchase Option (the “Faraday Purchase Option Exercise Notice”) at least
ninety (90) days prior to such Faraday Purchase Option Closing Date.  If Tenant exercises any Faraday Purchase
Option, but the closing of Tenant’s purchase of the Premises does not occur by
the Faraday Purchase Option Closing Date (for any reason other than due to the
material default of Landlord hereunder or under the applicable Purchase and
Sale Agreement or a failure of conditions for the benefit of Tenant), then the
Faraday Purchase Option exercised by Tenant (and all other Faraday Purchase
Options under this Lease) shall automatically lapse and be of no further force
or effect, and Tenant shall have no further rights under this Section 24.3.


 


24.3.4      Upon Landlord’s receipt of the Faraday Purchase Option
Exercise Notice from Tenant, Landlord and Tenant shall execute a purchase and
sale agreement for the Premises substantially in the form attached hereto as Exhibit ‘A’
(the “Purchase and Sale
Agreement”).  In
connection with such purchase and sale, Tenant shall reimburse Landlord for all
reasonable and customary costs actually incurred by Landlord in connection with
the purchase and sale transaction including, but not limited to, attorneys’
fees for outside counsel (provided, however, that Tenant will not
be required to reimburse Landlord’s attorneys’ fees in excess of $25,000 (as
such amount shall be adjusted by multiplying the amount by the CPI Adjustment
Factor described below)).  As used
herein, the “CPI
Adjustment Factor” means, as of any date, the greater of (a) the
CPI for such date divided by the CPI for the Effective Date; and (b) 1.00.
As used herein, “CPI”
means the United States Department of Labor, Bureau of Labor Statistics “Consumer
Price Index” for All Urban Consumers (CPI-U) published for the Los Angeles-


 

















 


Riverside-Orange
County, CA, Metropolitan Statistical Area, with a base of 1982-1984 = 100.  If the CPI ceases to be published, with no
successor index, then the parties shall reasonably agree upon a reasonable
substitute index.  The CPI for any date
means the CPI last published before the calendar month that includes such date


 


24.3.5      The purchase price payable by Tenant for the
acquisition of the Premises pursuant to the Faraday Purchase Option shall be as
follows:


 


(a)           With regard to any acquisition of the Premises
pursuant to the Faraday Purchase Option at the end of Lease Year five (5), six
(6), seven (7), eight (8) or nine (9) (as defined and set forth in
the Gazelle Court Lease), the purchase price shall be calculated as of the
applicable Faraday Purchase Option Closing Date by dividing the Base Monthly
Rental due under the Lease for the twelve months following such Faraday
Purchase Option Closing Date by  the “cap
rate” for the relevant Purchase Option under the Gazelle Court Lease set forth
in the PO Model (as defined in the Gazelle Court Lease).  Promptly following the Completion Date (as
defined in the Gazelle Court Lease), the parties will discuss and endeavor to
agree upon the applicable purchase price for the Faraday Purchase Options at
the end of Lease Years five (5), six (6), seven (7), eight (8) and nine (9) (as
defined and set forth in the Gazelle Court Lease), and the parties will by
written amendment append such purchase prices to the Lease as a new
Exhibit.  If the parties are unable to
agree upon the applicable purchase price, then the Lease shall continue in full
force and effect until such purchase price is agreed upon.  If the date on which such purchase price is
agreed upon is after the applicable Faraday Purchase Option Closing Date has
passed then the closing shall occur on the date that is thirty days after such
purchase price is agreed upon.


 


(b)           With regard to any acquisition of the Premises
pursuant to the Faraday Purchase Option at the end of Lease Year fifteen (15)
or twenty (20) (as defined and set forth in the Gazelle Court Lease), the
purchase price shall equal the “fair market value” for the Premises determined as of the
date that is sixty (60) days prior to the Faraday Purchase Option Closing
Date.  For purposes of this Section 24.3.5,
the “fair market value”
of the Premises shall be determined by the mutual agreement of Landlord and
Tenant.  However, if Landlord and Tenant
are unable to agree upon such fair market value by the sixtieth (60th) day
prior to the Faraday Purchase Option Closing Date, then “fair market value”
shall be determined by a process whereby (i) each party shall select an
independent and licensed appraiser (who must be a qualified MAI appraiser) for
the Premises (with at least ten (10) years experience appraising
properties of similar type, use and location as the Premises) within fifteen
(15) days of the sixtieth (60th) day prior to the Purchase Option Closing Date,
(ii) each such appraiser shall prepare an appraisal of the Premises within
fifteen (15) business days after their selection, (iii) if the appraisals
of both appraisers with respect to the Premises differ by an amount equal to or
less than five percent (5%) of the higher of the two appraisals, then the
average of such appraisals shall be deemed to be the fair market value for the
Premises for purposes of this Section 24.3, and (iv) if the
appraisals of both appraisers with respect to the Premises differ by an amount
that exceeds five percent (5%) of the higher of the two appraisals, then the
two (2) selected appraisers shall agree upon the selection of a third
appraiser who must be a qualified MAI appraiser (also with at least ten (10) years
experience appraising properties of similar type, use and location as the
Premises that is unaffiliated with either party hereto and that has not been
retained or engaged by either party within the five (5) years preceding
such appointment) within fifteen (15)


 

















 


days of the date the
second determination is sent in, who shall prepare an appraisal of the Premises
within fifteen (15) business days after his or her selection, and such
appraisal shall constitute the binding determination of fair market value for
purposes of this Section 24.3.5; provided, however,
that such appraisal may not be greater than the higher of the other appraisals
or less than the lower of the other appraisals. 
If the two appraisers are unable to agree upon the selection of a third
appraiser, then either Landlord or Tenant shall be entitled to apply to the
presiding judge of the Superior Court of the County of San Diego, California
for the selection of a third appraiser who shall be selected from a list of
names of experienced appraisers submitted by Landlord or from a list of names
submitted by Tenant, as the case may be, unless both Landlord and Tenant submit
lists of names, in which case the Court, in its sole discretion, shall select
the third appraiser from the lists.  The
cost of all appraisals performed in accordance with this Section 24.3
shall be paid by Tenant.  Such
determination of “fair
market value” determined in accordance with this Section 24.3.5
shall be binding upon the parties.


 


(c)           In addition to the purchase price payable by Tenant
pursuant to this Section 24.3.5, as a condition to closing, Tenant
shall pay all Rent owing to Landlord as of the applicable Faraday Purchase
Option Closing Date.


 


24.3.6      It is the intent of the parties that the “fair market value” of
the Premises be determined by using the appraisal valuation standards then
commonly used by professional appraisers in determining fair market value of
biomedical use properties in the state in which the Premises is located.  Any appraiser appointed pursuant to this Article 24
shall be instructed to determine independently the fair market value of the
Premises in accordance with the definition of the term set forth in this Section 24.3.6.


 


24.3.7      Time is of the essence in the performance of the
parties’ respective obligations contained in this Section 24.3.


 


24.3.8      Landlord and Tenant agree to execute such additional
documents, including, without limitation, escrow instructions, and take such
further actions, as may be reasonable and necessary to carry out the provisions
of this Section 24.3.8.


 


24.3.9      Upon the consummation of the Tenant’s acquisition of
the Premises pursuant to any Purchase Option, without limiting any of the
parties’ respective rights and remedies under the Lease, this Lease shall
terminate, and shall be of no further force or effect, except for those rights,
obligations, and liabilities which expressly survive such termination or which
have accrued prior to such termination.”


 


4.             Options to Extend. Article 36 of the Lease is
hereby replaced in its entirety with the following:


 


“ARTICLE
36


 


OPTION
TO EXTEND


 


36.1         Options To Extend.  Tenant shall
have the option to extend the term of this Lease for four (4) successive
renewal periods of five (5) years each, subject to the following
provisions:


 

















 


36.1.1  Tenant
shall have no right to exercise an option: 
(i) during the period commencing with the giving of any notice of
default and continuing until said default is cured, (ii) during the period
of time any Rent is unpaid, or (iii) in the event that Landlord has given
three or more notices of separate monetary or material non-monetary breaches,
whether or not the breaches are cured, during the twelve (12) months
immediately preceding the exercise of the applicable option.


 


36.1.2  The
period of time within which an option may be exercised shall not be extended or
enlarged by reason of Tenant’s inability to exercise an option because of the
occurrence of one or more of the matters described in Section 36.1.1.


 


36.1.3  An option shall terminate
and be of no further force or effect, notwithstanding Tenant’s due and timely
exercise of the option, if, after such exercise and prior to the commencement
of the extended term, (i) Tenant fails to pay Rent for a period of thirty
(30) days after such Rent becomes due, or (ii) an Event of Default occurs.


 


36.1.4  Tenant shall exercise an
option by delivery of written notice to Landlord not less than  twelve (12) months prior to the expiration of
the Lease Term (as the same may have theretofor been extended by the exercise
of a previous option pursuant to this Section 36).  If said notice is not delivered within said
time period, such option and all remaining options granted pursuant to this Section 36
shall automatically terminate and be of no further force or effect.


 


36.2         Rent During Option Periods.


 


36.2.1  Rent.  The Base Monthly Rental payable by Tenant
during any option period shall be the greater of:  (a) 95% of the “fair market rent” for
the Premises at the commencement date of such option period, and (b) the
Base Monthly Rental payable for the year immediately preceding the commencement
date of such option period; provided, however, that the Base
Monthly Rental payable during such option period shall be subject to the
escalation provisions of Section 3.3 with the first such escalation
occurring either (i) at the end of the second year of the extended term if
the Base Monthly Rental is determined in accordance with Section 36.2.1(a) or
(ii) upon the first day of the first year of the extended term if the Base
Monthly Rental is determined in accordance with Section 36.2.1(b).


 


36.2.2  Fair
Market Rent.  For purposes if this Section 36.2.2,
the “fair market rent”
for the Premises shall be determined as of the date that is sixty (60) days
prior to the first day of the first year of the extended term.  If Landlord and Tenant cannot agree on the
fair market rent of the Premises for any extension period by the sixtieth (60th) day prior to the first day of the first year of the
extended term, then, Landlord and Tenant shall each select, within fifteen (15)
days of such sixtieth (60th) day prior
to the first day of the first year of the extended term, an appraiser who must
be a qualified MAI appraiser with at least five (5) years experience
appraising properties of similar type, use and location as the Premises to
determine said “fair
market rent.”  If one
party fails to so designate an appraiser within the time required, the
determination of “fair
market rent” of the one appraiser who has been designated by the
other party within the time required shall be binding on both parties.  The appraisers shall submit their
determinations of fair market rental value to both parties within fifteen (15)
business days after


 

















 


their selection.  If the
difference between the two determinations is ten percent (10%) or less of the
higher appraisal, then the average between the determinations shall be the fair
market rental value of the Premises.  If
said difference is greater than ten percent (10%), then the two appraisers
shall within fifteen (15) days of the date the second determination is
submitted to the parties designate a third appraiser who must also be a
qualified MAI appraiser with at least five (5) years experience appraising
properties of similar type, use and location as the Premises that is
unaffiliated with either party hereto and that has not been retained or engaged
by either party within the five (5) years preceding such appointment.  If the two appraisers are unable to agree
upon the selection of a third appraiser, then either Landlord or Tenant shall
be entitled to apply to the presiding judge of the Superior Court of the County
of San Diego, California for the selection of a third appraiser who shall be
selected from a list of names of experienced appraisers submitted by Landlord
or from a list of names submitted by Tenant, as the case may be, unless both
Landlord and Tenant submit lists of names, in which case the Court, in its sole
discretion, shall select the third appraiser from the lists.  The sole responsibility of the third
appraiser will be to determine which of the determinations made by the first
two appraisers is most accurate.  The
third appraiser shall have no right to propose a middle ground or any
modification of either of the determinations made by the first two appraisers.  The third appraiser’s choice shall be
submitted to the parties within fifteen (15) business days after his or her
selection.  Such determination shall bind
both of the parties and shall establish the fair market rental value of the
Premises.  Each party shall pay equal
shares of the fees and expenses of the third appraiser.  Fair market rent for the purposes of this
Lease shall mean the then prevailing rent for buildings in the Carlsbad,
California life science market, of comparable size, quality and location to the
demised Premises, and leased on terms comparable to the terms contained in this
Lease.”


 


5.             Memorandum of Lease. 
Concurrently herewith, the parties shall promptly execute, acknowledge,
and deliver duplicate originals of a Memorandum of Lease in form attached
hereto as Exhibit ‘B’ (the “Memorandum of Lease”). 
Either party may record such Memorandum of Lease.  Any taxes imposed upon such recording shall
be paid by Tenant.  If the parties amend the
Lease, then the parties shall have the same rights and obligations regarding a
memorandum of such amendment as they do for the Memorandum of Lease.  Except as provided in this Section 5,
Tenant shall not file or record any other documents with respect to the
Premises.


 


6.             Exhibits. The provisions of Exhibits “A” and “B” attached
hereto are hereby incorporated into and made a part of the Lease as Exhibits “E”
and “F” thereto, respectively.


 


7.             Broker. Landlord and Tenant each represents to the other
that it has had no dealings with any real estate broker or agent in connection
with the negotiation and/or execution of this Lease other than CresaPartners (“Broker”), and that
they know of no other real estate broker or agent that is or might be entitled
to a commission in connection with this Lease. 
Landlord shall compensate Broker in relation to this Lease pursuant to a
separate agreement between Landlord and Broker.


 


8.             No Default.  Tenant
represents, warrants and covenants that, to the best of Tenant’s knowledge,
Landlord and Tenant are not in default of any of their respective obligations
under the Lease and no event has occurred that, with the passage of time or the
giving of notice (or both) would constitute a default by either Landlord or
Tenant thereunder.


 

















 


9.             Effect of Amendment. 
Except as modified by this Amendment, the Lease and all the covenants,
agreements, terms, provisions and conditions thereof shall remain in full force
and effect and are hereby ratified and affirmed. The covenants, agreements,
terms, provisions and conditions contained in this Amendment shall bind and
inure to the benefit of the parties hereto and their respective successors and,
except as otherwise provided in the Lease, their respective assigns. In the
event of any conflict between the terms contained in this Amendment and the
Lease, the terms herein contained shall supersede and control the obligations
and liabilities of the parties. From and after the date hereof, the term “Lease”
as used in the Lease shall mean the Lease, as modified by this Amendment.


 


10.           Miscellaneous. This Amendment becomes effective only
upon execution and delivery hereof by Landlord and Tenant. The captions of the
paragraphs and subparagraphs in this Amendment are inserted and included solely
for convenience and shall not be considered or given any effect in construing
the provisions hereof. All exhibits hereto are incorporated herein by
reference.


 


11.           Counterparts. This Amendment may be executed in one
or more counterparts that, when taken together, shall constitute one original.


 

















 


IN WITNESS WHEREOF,
Landlord and Tenant have hereunto set their hands as of the date and year first
above written, and acknowledge that they possess the requisite authority to
enter into this transaction and to execute this Amendment.


 


 


	
  LANDLORD:

  	
   

  
	
   

  	
   

  
	
  BMR-2282
  FARADAY AVENUE LLC,

  	
   

  
	
  a Delaware limited
  liability company

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  John Bonanno

  	
   

  
	
  Name:

  	
  John Bonanno

  	
   

  
	
  Title:

  	
  VP, Development

  	
   

  



 


 


	
  TENANT:

  	
   

  
	
   

  	
   

  
	
  BMR-2282
  FARADAY AVENUE LLC,

  	
   

  
	
  a Delaware corporation

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ B. Lynne Parshall

  	
   

  
	
  Name:

  	
  B. Lynne Parshall

  	
   

  
	
  Title:

  	
  COO and CFO

  	
   

  



 

















 


EXHIBIT
A TO AMENDMENT


 


EXHIBIT
E


 


FORM PURCHASE AND SALE AGREEMENT


 


 


[See Attached]


 

















 


AGREEMENT
OF SALE


 


THIS
AGREEMENT OF SALE
(this “Agreement”)
is made the
                
day of 
                          ,
20     (the “Effective Date”), by and between BMR-2282 FARADAY AVENUE LLC, a Delaware
limited liability company  (“Seller”), and ISIS PHARMACEUTICALS, INC., a Delaware
corporation (“Buyer”).
Seller and Buyer are sometimes hereinafter referred to collectively as the “parties”.


 


W
I T N E S S E T H


 


1.             Sale of Premises.


 


A.            Purchase and Sale. Subject to all of the terms and conditions of this
Agreement, Seller agrees to sell and convey to Buyer, and Buyer agrees to
purchase from Seller, any and all of Seller’s right, title and interest in and
to the following:


 


(i)            the land located at 2282 Faraday Avenue, Carlsbad,
California, as more fully described in Exhibit “A” attached hereto and
made a part hereof, together with all strips and gores and any land lying in
the bed of any street, road or alley, open or proposed, adjoining such real
property (collectively, the “Land”);


 


(ii) all and
singular the rights, benefits, privileges, easements, tenements, hereditaments,
and appurtenances thereon or in anyway appertaining to the Land (collectively,
the “Appurtenant Rights”);


 


(iii) buildings,
structures, fixtures, systems, improvements, topsoil, trees, shrubbery and
landscaping situated on, in or under or used in connection with the land
(collectively, the “Improvements”);


 


(iv) all right,
title and interest of Seller, if any, in and to all tangible personal property
now or hereafter located on, or used exclusively in connection with, the
operation, ownership, maintenance, occupancy or improvement of the Land
(collectively, the “Tangible
Personal Property”; and


 


(v) all right, title
and interest of Seller, if any, in and to all intangible personal property now
or hereafter used exclusively in connection with the operation, ownership,
maintenance, management, or occupancy of the Land or Improvements (to the
extent assignable); the plans and specifications for the Improvements (to the
extent assignable); warranties, indemnities, guaranties (express or implied),
applications, permits, authorizations, approvals and licenses (to the extent
applicable in any way to the above referenced Land, Improvements or the
Tangible Personal Property and assignable); insurance proceeds received by (or
owed to) Seller which relate to damage to the Land or Improvements caused by a
casualty that has occurred prior to the Closing Date and for which restoration
has not previously occurred, but only to the extent that such proceeds have not
been applied by Seller prior to the Closing Date towards the cost of (a) pursuit
or settlement of the applicable insurance claim, (b) the clearing of
debris or other expenses associated with securing the Land or Improvements, or (c) restoration
of the Land or Improvements; and condemnation awards or claims thereto
(collectively, the “Intangible
Property”).


 


10
















 


B.            Premises Defined. The Land, the Appurtenant Rights, the Improvements,
the Tangible Personal Property and the Intangible Property are hereinafter
referred to as the “Premises”.


 


2.             Purchase Price. 
The purchase price for the Premises (the “Purchase Price”) shall be                         
Dollars ($                  ),
payable as follows:


 


 


A.            Deposit. Concurrently with the execution and delivery of this
Agreement, (i) the parties shall establish an escrow (the “Escrow”) with
[Chicago Title Insurance Company, 2365 Northside Drive, 6th Floor, San
Diego, CA 92108, Attn: Renee Marshall] (the “Title Company”), (ii) the parties
shall deposit with the Title Company a fully executed original of this
Agreement, and (iii) Buyer shall deposit with the Title Company a sum
equal to [                  
Dollars ($                )]
[INSERT AMOUNT THAT IS [***] OF THE PURCHASE
PRICE] in good funds either by certified bank or cashier’s check or
by federal wire transfer (such funds, together with all interest accrued thereon
while held in Escrow, the “Deposit”).  The Deposit shall be held in escrow by the
Title Company in a federally insured, interest bearing account in accordance
with the laws of the State of California and the provisions of this Agreement.  If this Agreement is terminated pursuant to Section 7
hereof, the Deposit shall be paid to either Buyer or Seller in accordance with
the provisions of Section 7. 
If the sale of the Premises is consummated, the Deposit shall be
released to Seller and shall be credited against the Purchase Price.


 


B.            Payment of Purchase Price. At Closing, the Deposit shall be
released to Seller, and Buyer shall pay to Seller through Escrow in the manner
described herein the balance of the Purchase Price, as adjusted for prorations
and other adjustments provided herein.


 


3.             Condition of Title.


 


A.            Title Review. Buyer acknowledges that it has been provided with
the right and opportunity to review and investigate any and all conditions and
aspect of title to the Premises deemed necessary or desirable by Buyer for
purposes of evaluating the transactions contemplated hereby.


 


B.            Title Examination. Buyer hereby acknowledges that it approves all the
encumbrances and exceptions to title embodied in the Permitted Exceptions (as
defined below), and Buyer shall take title to the Premises subject to all such
Permitted Exceptions (as defined below); provided, however, that
Seller shall cause any liens granted by Seller and encumbering the Premises to
secure the repayment of borrowed money to be removed from title or otherwise
insured over by the Title Company. Without limiting the effect of the
foregoing, the parties acknowledge and agree that the term “Permitted Exceptions”
shall include the following:


 


11

















 


(i)            the title encumbrances described on Exhibit F
attached hereto;


 


(ii)           all covenants, conditions, restrictions, reservations,
rights, rights of way, dedications, offers of dedication, encumbrances, liens
and easements, in each case whether filed in the applicable public records or
as would be apparent from an inspection or accurate survey of the Premises,
except in each case to the extent that the same are granted or caused by Seller
in a manner that would constitute a breach under the Lease;


 


(iii)          the rights of tenants or other occupants under any
leases, licenses, and occupancy agreements granted by any person or entity
other than Seller, including all amendments or modifications thereto or
supplements thereof, covering all or any portion of the Premises;


 


(iv)          the lien of all ad valorem real estate taxes and
assessments;


 


(v)           all liens and encumbrances with respect to the
Premises which were granted by, or which arise in connection with the acts or
omissions of, Buyer or any of Buyer’s agents, contractors, affiliates,
invitees, or any other party that Buyer has permitted to use or occupy the Land
or Improvements from and after the Effective Date of the Lease (as such term is
defined in the Lease);


 


(vi)          local, state and federal laws, ordinances or governmental
regulations, including but not limited to building and zoning laws, ordinances
and regulations, now or hereafter in effect relating to the Premises; and


 


(vii)         those matters which would be disclosed by an accurate
survey or inspection of the Premises.


 


C.            Conveyance of Title. At Closing, Seller shall convey and transfer, or
cause to be conveyed or transferred, to Buyer all of Seller’s right, title and
interest in and to the Premises, subject to the Permitted Exceptions.


 


D.            Covenants of Seller. Seller, as Landlord, and Buyer, as tenant, are
parties to that certain Lease Agreement, dated as of September 19, 2005,
as amended by that certain First Amendment to Lease Agreement dated as of May 8,
2007 and that certain Second Amendment to Lease Agreement dated as of March 30,
2010 (as so amended, the “Lease”),
pursuant to which Buyer leases the Premises and is responsible for, among other
things, its repair, upkeep and maintenance. Accordingly, Seller has not
undertaken to either manage or operate the Premises in any particular way prior
to Closing, or deliver the Premises at Closing in any particular condition.
During the period from and after the Effective Date until the date that Closing
occurs, Seller (i) shall fully and timely perform its obligations under
the Lease, and (ii) shall not, without Buyer’s consent (which will not be
unreasonably withheld, conditioned or delayed), grant any new liens or
encumbrances against the Premises or take any action which would have a
material adverse effect on (a) the use of the Premises in the manner in
which it is being used as of the Effective Date, or (b) the value of the
Premises.


 


12

















 


4.             Closing. 
The consummation of the purchase and sale of the Premises contemplated
by this Agreement (the “Closing”)
shall take place on [                      
    , 20    ] (the “Closing Date”) at
[1:00 PM local time] through the Escrow administered by the Title Company, or
such other time and place as Seller and Buyer agree to in writing.  [NOTE: TO
BE DETERMINED IN ACCORDANCE WITH SECTION 24.3 OF THE LEASE].


 


A.            Conditions to Seller’s Obligation to Close. 
The obligation of Seller to consummate the transactions contemplated
hereunder shall be contingent upon the following:


 


(i)            Representations. 
Buyer’s representations and warranties contained herein shall be
materially true and correct as of the date of this Agreement;


 


(ii)           Performance. 
All deliveries to be made by Buyer at Closing have been tendered, and
Buyer shall have performed all of the other obligations to be performed by
Buyer under this Agreement; and


 


(iii)          Moratorium.  No
moratorium, statute or regulation of any governmental agency or order or ruling
of any court has been enacted, adopted, or issued which would adversely affect
Buyer’s ability to purchase the Property from Seller.


 


B.            Conditions to Buyer’s Obligation to Close. 
The obligation of Buyer to consummate the transactions contemplated
hereunder shall be contingent upon the following:


 


(i)            Representations. 
Seller’s representations and warranties contained herein shall be
materially true and correct as of the date of this Agreement;


 


(ii)           Performance. 
All deliveries to be made by Seller at Closing have been tendered, and
Seller shall have performed all of the other obligations to be performed by
Seller under this Agreement;


 


(iii)          Title.  Upon the
sole condition of payment of the premium, at Closing, the Title Company shall
have irrevocably and unconditionally committed to issue to Buyer an ALTA Owner’s
Policy of title insurance, with extended coverage (i.e., with ALTA General
Exceptions deleted), dated as of the date and time of the recording of the Deed
(as defined below), in the amount of the Purchase Price, insuring Buyer as
owner of good, marketable and indefeasible fee simple title to the Property,
subject only to the Permitted Exceptions; provided, however, that
notwithstanding the foregoing or any other provision of this Agreement to the
contrary, the parties agree that Seller shall not be required to provide any
indemnities, representations, warranties or affidavits to the Title Company;
and


 


(iv)          Moratorium.  No
moratorium, statute or regulation of any governmental agency or order or ruling
of any court has been enacted, adopted, or issued which would adversely affect
Seller’s ability to sell the Property to Buyer.


 


13

















 


C.            Failure of Condition Precedent. 
If any condition to such party’s obligation to proceed with the Closing
hereunder has not been satisfied as of the Closing Date; each non-defaulting
party may, in its sole discretion, either (i) terminate this Agreement by
delivering written notice to the other party, or (ii) elect to close,
notwithstanding the non-satisfaction of such condition, in which event such
party shall be deemed to have waived any such condition.


 


5.             Provisions With Respect to Closing.


 


A.            Deliveries by Seller. At least one (1) business day prior to the
Closing Date, Seller shall deliver, or cause to be delivered, to the Title
Company, to be held in Escrow pending Closing, each of the following:


 


(i)            Deed.  One (1) original
Grant Deed, duly executed and acknowledged by Seller, substantially in the form
of Exhibit “B”  attached
hereto (the “Deed”);


 


(ii)           Bill of Sale and Assignment of Warranties.  Two (2) original counterparts of a Bill
of Sale and Assignment and Assumption of Warranties, duly executed by Seller,
substantially in the form of Exhibit “C” attached hereto (“Bill of Sale and Assignment of
Warranties”);


 


(iii)          Termination of Lease. 
Two (2) original counterparts of a Termination of Lease Agreement,
duly executed by Seller substantially in the form of Exhibit “D” attached
hereto (“Lease
Termination”);


 


(iv)          FIRPTA Affidavit. 
One (1) original Certificate Regarding Foreign Investment in Real
Property Tax Act, duly executed and acknowledged by Seller, substantially in
the form of Exhibit “E” attached hereto.; and


 


(v)           Closing Statement. An executed closing statement
consistent with this Agreement and in a form requested by the Title Company.


 


B.            Deliveries by Buyer. At least one (1) business day prior to the
Closing Date, Buyer shall deliver, or cause to be delivered, to the Title
Company, to be held in Escrow pending Closing, each of the following:


 


(i)            Funds.    The
balance of the Purchase Price, as adjusted for prorations and other adjustments
provided herein;


 


(ii)           Bill of Sale and Assignment of Warranties.  Two (2) original counterparts of the
Bill of Sale and Assignment of Warranties, duly executed by Buyer;


 


(iii)          Termination of Lease. 
Two (2) original counterparts of the Lease Termination, duly
executed by Buyer;


 


14

















 


(iv)          Release.  A
release of claims, duly executed and acknowledged by Buyer that contains the
same disclaimers and release as set forth in Section 11, except such
release will be dated as of the Closing Date (the “Release”); and


 


(v)           Closing Statement. An executed closing statement
consistent with this Agreement and in a form requested by the Title Company.


 


6.             Closing Costs; Taxes; Apportionments.


 


A.            Buyer shall pay: (i) the fees of any counsel
representing Buyer in connection with the transaction contemplated by this
Agreement (the “Transaction”);
(ii) the fees of any counsel representing Seller in connection with the
Transaction (provided, however, that Buyer shall not be required to pay such
fees in excess of $25,000 (as such amount shall be adjusted by multiplying
$25,000 by the CPI Adjustment Factor described below)); (iii) the escrow
fee, if any, which may be charged by the Title Company; (iv) the costs of
any title reports, commitments or policies that Buyer may elect to obtain; (v) the
cost of any survey that Buyer may elect to obtain; (v) all of the
recording fees in connection with the sale transaction, and (vi) any
transfer and sales taxes (but excluding Seller’s federal or state income,
franchise, inheritance or estate taxes) that may arise in connection with the
Transaction. As used herein, the “CPI Adjustment Factor” means, as of Closing
Date, the greater of (a) the CPI for such date divided by the CPI for the
Effective Date of the Lease; and (b) 1.00. As used herein, “CPI” means the United
States Department of Labor, Bureau of Labor Statistics “Consumer Price Index”
for All Urban Consumers (CPI-U) published for the Los Angeles-Riverside-Orange
County, CA, Metropolitan Statistical Area, with a base of 1982-1984 = 100.  If the CPI ceases to be published, with no
successor index, then the parties shall reasonably agree upon a reasonable
substitute index.  The CPI for any date
means the CPI last published before the calendar month that includes such date.


 


B.            Seller shall pay the fees of any counsel representing
Seller to the extent that such fees exceed the amount of Seller’s legal fees
for which Buyer is responsible pursuant to Section 6(A)(ii) above.


 


C.            Prorations.  If the
Purchase Price is received by Seller’s depository bank in time to credit to
Seller’s account on the Closing Date, the day of Closing shall belong to Buyer
and all prorations hereinafter provided to be made as of the Closing shall each
be made as of the end of the day before the Closing Date.  If the cash portion of the Purchase Price is
not so received by Seller’s depository bank on the Closing Date, then the day
of Closing shall belong to Seller and such proration shall be made as of the
end of the day that is the Closing Date. 
In each such proration set forth below, the portion thereof applicable
to periods beginning as of Closing shall be credited to Buyer or charged to
Buyer as applicable and the portion thereof applicable to periods ending as of
Closing shall be credited to Seller or charged to Seller as applicable.  The parties acknowledge and agree that the
Lease is a fully triple net lease such that Buyer, as tenant, is responsible to
pay directly, or reimburse Seller for, any and all expenses incident to the
ownership, operation and maintenance of the Premises, in each case as required
under the Lease.  As a result, the
parties shall not engage in normal and customary prorations.  However, at Closing, Buyer shall pay or
credit to Seller any and all of the following: 
(i) all Rent (as defined in the Lease) owing from Buyer, as tenant,
to Seller (such amounts, “Rental
Amounts”) under


 


15

















 


the Lease for the portion
of the month in which closing occurs occurring prior to Closing and any period
prior to Closing to the extent not previously paid by Buyer to Seller,
including, but not limited to, any rental delinquencies; and (ii) all sums
advanced or paid by Seller for real estate taxes, operating expenses, general
assessments or special assessments related to the Premises for any period prior
to or subsequent to the Closing to the extent not previously paid or reimbursed
by Buyer, including, but not limited to, real estate taxes paid by Seller with
respect to any period prior to or subsequent to the Closing and not yet
reimbursed.  At Closing, Seller shall
credit to Buyer any Rental Amounts paid by Buyer that are allocable to the
period from and after Closing; provided, however, that Seller
shall retain all amounts of additional rent previously paid by Buyer to Seller
on account of common area maintenance expenses, real estate taxes, insurance
expenses or other expenses to the extent incurred by Seller on account of
expenses allocable to the Premises prior to or after Closing and previously
paid by Seller.


 


D.            Final Adjustment After Closing. 
In the event that final bills are not available or cannot be issued
prior to Closing for any item being prorated under this Article 6,
then Buyer and Seller agree to allocate such items on a fair and equitable
basis as estimated based on the previous year’s amounts, with a true-up and
final adjustment to be made as soon as reasonably possible after the Closing
but no later than [six (6)] months after Closing.  Payments in connection with the final
adjustment shall be due within thirty (30) days after receipt of written
notice.  Each party shall have reasonable
access to, and the right to inspect and audit, the other party’s books to
confirm the final prorations.


 


7.             Failure to Close;  Defaults.


 


A.            Buyer’s Default.  Provided that
Seller has materially complied with its obligations hereunder and the
conditions set forth in Section 4B have been satisfied, if Buyer fails to
complete the Closing in accordance with the terms of this Agreement, then in
addition to (i) any rights or remedies that Seller may have in connection
therewith under the Lease, and (ii) any loss of rights that Buyer may
incur in connection therewith and under the Lease (collectively, the “Lease Implications”),
the Deposit shall be retained by Seller as liquidated and agreed damages for
such breach, which shall be Seller’s sole and exclusive right and remedy under
this Agreement for such breach, whereupon this Agreement shall become null and
void and neither party hereto shall have any further rights, liabilities or
obligations hereunder except those obligations which expressly survive
termination


 


THE PARTIES ACKNOWLEDGE
THAT SELLER’S ACTUAL DAMAGES IN THE EVENT THE SALE IS NOT CONSUMMATED ARE
EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE AT THE EFFECTIVE DATE.  THEREFORE, BY SEPARATELY EXECUTING THIS SECTION 7(A) BELOW,
THE PARTIES ACKNOWLEDGE THAT THE AMOUNT OF THE DEPOSIT HAS BEEN AGREED UPON,
AFTER NEGOTIATION, AS THE PARTIES’ REASONABLE ESTIMATE OF SELLER’S DAMAGES AND
NOT A PENALTY, AND SHALL (ASIDE FROM THE LEASE IMPLICATIONS, WHICH SHALL NOT BE
LIMITED IN ANY WAY BY THIS SECTION BE SELLER’S SOLE AND EXCLUSIVE REMEDY
AGAINST BUYER ARISING FROM A FAILURE OF THE SALE TO CLOSE.  IN ADDITION, BUYER SHALL PAY ALL COSTS AND
EXPENSES ALLOCABLE TO BUYER PURSUANT TO SECTION 6(A), AS WELL AS


 


16

















 


ALL TITLE AND ESCROW
CANCELLATION CHARGES.  NOTWITHSTANDING
THE FOREGOING, IN NO EVENT SHALL THIS SECTION 7(A) LIMIT THE
DAMAGES RECOVERABLE BY EITHER PARTY AGAINST THE OTHER PARTY DUE TO THE OTHER
PARTY’S OBLIGATION TO INDEMNIFY SUCH PARTY IN ACCORDANCE WITH SECTION 14
OF THIS AGREEMENT.  BY SEPARATELY
EXECUTING THIS SECTION 7(A). BELOW, BUYER AND SELLER ACKNOWLEDGE
THAT THEY HAVE READ AND UNDERSTOOD THE ABOVE PROVISION COVERING LIQUIDATED
DAMAGES, AND THAT EACH PARTY WAS REPRESENTED BY COUNSEL WHO EXPLAINED THE
CONSEQUENCES OF THIS LIQUIDATED DAMAGES PROVISION AT THE TIME THIS AGREEMENT
WAS EXECUTED.


 


 


	
  BMR-2282
  FARADAY AVENUE LLC

  	
  ISIS
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By: 

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
								



 


 


B.            Seller’s Default.  In the event
that Seller shall fail to perform the acts required by this Agreement to be
performed by it prior to or as of the Closing for any reason, or the conditions
set forth in Section 4B were not satisfied for any reason, Buyer shall be
entitled, as its sole and exclusive remedy, to (i) receive the return of
the Deposit, which return shall operate to terminate this Agreement and release
Seller from any and all liability hereunder, or (ii) to enforce specific
performance of Seller’s obligation to convey the Premises to Buyer as
contemplated by this Agreement, it being understood that the remedy of specific
performance shall not be available to enforce any other obligation of Seller
hereunder. Buyer shall be deemed to have elected to terminate this Agreement
and receive the return of the Deposit as its sole and exclusive remedy if Buyer
fails to file suit for specific performance against Seller in a court having
jurisdiction in the county and state in which the Premises is located within
sixty (60) days following the scheduled Closing Date.


 


8.             Seller’s Representations, Warranties
and Covenants.  Seller hereby represents, warrants and
covenants to Buyer, as of the Effective Date, as follows:


 


A.            Seller has full capacity, power and authority to
execute and deliver this Agreement and to perform its obligations hereunder.


 


B.            This Agreement, and all other instruments and
documents to be executed and delivered by Seller to Buyer hereunder or pursuant
hereto, have been or will be duly


 


17

















 


executed and delivered by
Seller and constitute (or will constitute, as to those instruments and
documents to be executed and delivered) the legal, valid and binding
obligations of Seller enforceable against Seller in accordance with their
respective terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting creditors’
rights and remedies generally and general principals of equity.


 


C.            There is no suit, action or proceeding pending or to
the knowledge of Seller threatened against Seller before or by any court,
administrative agency or other governmental or quasi-governmental authority, (i) affecting
the Premises or (ii) which brings into question the validity of this
Agreement or the Transaction.


 


9.             Buyer’s Representations, Warranties
and Covenants.  Buyer hereby represents, warrants and
covenants to Seller, as of the Effective Date, as follows:


 


A.            Buyer has full capacity, power and authority to
execute and deliver this Agreement and to perform all of its obligations
hereunder.


 


B.            This Agreement and all other instruments and documents
to be executed and delivered by Buyer to Seller hereunder or pursuant hereto
have been or will be duly executed and delivered by Buyer and constitute (or
will constitute, as to those instruments and documents to be executed and
delivered) the legal, valid and binding obligations of Buyer enforceable
against Buyer in accordance with their respective terms.


 


C.            There is no suit, action or proceeding pending or to
the knowledge of Buyer threatened against Buyer or affecting the Premises
before or by any court, administrative agency or other governmental or
quasi-governmental authority, or which brings into question the validity of
this Agreement or the Transaction.


 


10.           Investigations.


 


A.            Buyer acknowledges that it (i) is familiar with
the Premises, (ii) has been given an opportunity to inspect the Premises
and (iii) has completed all of its inspections with respect to the
condition of the Premises as of the Effective Date.


 


11.           Disclaimers and Warranties.


 


A.            AS IS SALE; DISCLAIMERS. WITH RESPECT TO CLAUSES (i) THROUGH (iv) BELOW,
EXCEPT IN THE CASE OF A BREACH BY SELLER OF THE REPRESENTATIONS AND WARRANTIES
CONTAINED IN SECTION 8, AND EXCEPT FOR SELLER’S BREACH OF ITS COVENANT SET
FORTH IN SECTION 3D:


 


i.              SELLER IS NOT MAKING, AND HAS NOT AT ANY TIME MADE,
ANY WARRANTIES OR REPRESENTATIONS OF ANY KIND OR CHARACTER, EXPRESS OR IMPLIED,
WITH RESPECT TO THE PREMISES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OR
REPRESENTATIONS AS TO HABITABILITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.


 


18

















 


ii.             UPON CLOSING SELLER SHALL SELL AND CONVEY TO BUYER,
AND BUYER SHALL ACCEPT, THE PREMISES “AS IS, WHERE IS, WITH ALL FAULTS”.  BUYER HAS NOT RELIED AND WILL NOT RELY ON,
AND SELLER IS NOT LIABLE FOR OR BOUND BY, ANY EXPRESS OR IMPLIED WARRANTIES,
GUARANTIES, STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE
PREMISES OR RELATING THERETO MADE OR FURNISHED BY SELLER OR ANY REAL ESTATE
BROKER OR AGENT REPRESENTING OR PURPORTING TO REPRESENT SELLER, TO WHOMEVER
MADE OR GIVEN, DIRECTLY OR INDIRECTLY, ORALLY OR IN WRITING.  ALL MATERIALS, DATA AND INFORMATION DELIVERED
BY SELLER TO BUYER, OR OTHERWISE MADE AVAILABLE TO BUYER, IN CONNECTION WITH
THE TRANSACTION CONTEMPLATED HEREBY ARE PROVIDED TO BUYER AS A CONVENIENCE ONLY
AND ANY RELIANCE ON OR USE OF SUCH MATERIALS, DATA OR INFORMATION BY BUYER
SHALL BE AT THE SOLE RISK OF BUYER. 
NEITHER SELLER, NOR ANY AFFILIATE OF SELLER, NOR THE PERSON OR ENTITY
WHICH PREPARED ANY REPORT OR REPORTS MADE AVAILABLE BY SELLER TO BUYER SHALL
HAVE ANY LIABILITY TO BUYER FOR ANY INACCURACY IN OR OMISSION FROM ANY SUCH
REPORTS.  BUYER ACKNOWLEDGES THAT THE
PURCHASE PRICE REFLECTS AND TAKES INTO ACCOUNT THAT THE PREMISES IS BEING SOLD “AS
IS.”


 


iii.            BUYER REPRESENTS AND COVENANTS TO SELLER THAT BUYER
HAS CONDUCTED SUCH INVESTIGATIONS OF THE PREMISES, INCLUDING BUT NOT LIMITED
TO, THE PHYSICAL AND ENVIRONMENTAL CONDITIONS THEREOF, AS BUYER DEEMS NECESSARY
OR DESIRABLE TO SATISFY ITSELF AS TO THE CONDITION OF THE PREMISES AND THE
EXISTENCE OR NONEXISTENCE OF, OR CURATIVE ACTION TO BE TAKEN WITH RESPECT TO,
ANY HAZARDOUS OR TOXIC SUBSTANCES ON OR DISCHARGED FROM THE PREMISES, AND WILL
RELY SOLELY UPON SAME AND NOT UPON ANY INFORMATION PROVIDED BY OR ON BEHALF OF
SELLER OR ITS AGENTS OR EMPLOYEES WITH RESPECT THERETO.


 


iv.            UPON CLOSING, BUYER SHALL AUTOMATICALLY ASSUME THE
RISK THAT ADVERSE MATTERS, INCLUDING BUT NOT LIMITED TO, CONSTRUCTION DEFECTS
AND ADVERSE PHYSICAL AND ENVIRONMENTAL CONDITIONS, MAY NOT HAVE BEEN
REVEALED BY BUYER’S INVESTIGATIONS, AND BUYER, UPON CLOSING, SHALL BE DEEMED TO
HAVE WAIVED, RELINQUISHED AND RELEASED SELLER (AND SELLER’S AFFILIATES,
PREDECESSORS, SUCCESSORS, PARTNERS, MEMBERS, OFFICERS, DIRECTORS, SHAREHOLDERS,
TRUSTEES, EMPLOYEES, AGENTS, REPRESENTATIVES, LENDERS, CONSULTANTS AND
ATTORNEYS) FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, CAUSES OF ACTION IN
LAW OR IN EQUITY (INCLUDING CAUSES OF ACTION IN TORT), LOSSES, DAMAGES,
LIABILITIES, COSTS AND EXPENSES (INCLUDING REASONABLE ATTORNEYS’ FEES) OF ANY
AND EVERY KIND OR CHARACTER, KNOWN OR UNKNOWN, FIXED OR CONTINGENT, WHICH BUYER
MIGHT HAVE ASSERTED OR ALLEGED AGAINST SELLER (AND SELLER’S AFFILIATES,
PREDECESSORS, SUCCESSORS, PARTNERS, MEMBERS, OFFICERS,


 


19

















 


DIRECTORS, SHAREHOLDERS,
TRUSTEES, EMPLOYEES, AGENTS, REPRESENTATIVES, LENDERS, CONSULTANTS AND
ATTORNEYS) AT ANY TIME BY REASON OF OR ARISING OUT OF ANY LATENT OR PATENT
CONSTRUCTION DEFECTS OR PHYSICAL CONDITIONS, VIOLATIONS OF ANY APPLICABLE LAWS
AND ANY AND ALL OTHER ACTS, OMISSIONS, EVENTS, CIRCUMSTANCES OR MATTERS
REGARDING THE PREMISES.  THE UNDERSIGNED
ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY LEGAL COUNSEL AND IS FAMILIAR WITH THE
PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS
FOLLOWS:


 


20

















 


“A GENERAL RELEASE DOES
NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN
HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR
HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”


 


THE UNDERSIGNED, BEING
AWARE OF THIS CODE SECTION, HEREBY EXPRESSLY WAIVES ANY RIGHTS IT MAY HAVE
THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPALS OF
SIMILAR EFFECT.


 


_____________________


Buyer’s Initials


 


B.            Survival of Disclaimers. The provisions of this Section 11 shall
survive Closing or any termination of this Agreement.


 


 


12.           Notices. 
All notices or other communications to be given by one party to the
other under this Agreement shall be in writing, mailed or delivered to the
other party at the following addresses:


 


 


If intended for Seller:


 


BMR-2282 FARADAY AVENUE
LLC


 


Attn: Vice President,
Real Estate Counsel


17190 Bernardo Center
Drive


San Diego, California
92128


Phone: (858) 485-9840
Fax: (858) 485-9843


 


If intended for
Buyer:


 


Isis Pharmaceuticals, Inc.


Attn:  Chief Operating Officer


1896 Rutherford Road


Carlsbad, California
92008


Phone: (760) 931-9200
Fax: (760) 918-3599


 


with a copy to: General
Counsel


Fax:  760-268-4922


 


21

















 


Notices may be delivered
by Federal Express, United Parcel Service, or other nationally recognized
overnight (one-night) mail courier service, or sent by facsimile (provided
a copy of such notice is deposited with an overnight courier for next business
day delivery). Any such notice shall be considered given on the date of such
hand or couriered delivery, confirmed facsimile transmission if received on a
business day, deposit with such overnight courier for next business day
delivery.


 


Either party may, with
proper notice, at any time designate a different address to which notices shall
be sent.


 


13.           Assignment. 
Buyer may not assign its rights under this Agreement without first
obtaining Seller’s written approval, which approval may be given or withheld in
Seller’s sole discretion, except
that Buyer may assign this agreement without Seller’s approval but with written
notice, to any (i) successor by merger or sale of substantially all of
Buyer’s assets (including, without limitation, this Agreement) in a manner such
that the assignee will become liable and responsible for the performance and
observance of all Buyer’s duties and obligations hereunder; or (ii) corporation
or other entity which controls, is controlled by, or is under common control
with Buyer.  In no event shall any
assignment of this Agreement release or discharge Buyer from any liability or
obligation hereunder unless expressly agreed otherwise by Seller in
writing.  Any transfer, directly or
indirectly, (whether by merger, consolidation or otherwise) of any stock,
partnership interest or other ownership interest in Buyer or any other transaction,
in each case which results (whether directly or indirectly) in a change in
control of Buyer shall constitute an assignment of this Agreement.


 


14.           Brokerage. 
Each of Seller and Buyer represents and warrants to the other of them
that it has not dealt with any broker, agent, finder or other intermediary in
connection with the conveyance of the Premises or this Agreement. Each of
Seller and Buyer agrees to indemnify, defend and hold the other harmless of,
from and against any damages, costs, claims, losses or liabilities whatsoever
(including attorney’s fees, expenses and court costs) arising from any breach
by the indemnifying party of the foregoing warranties, representations and
agreements.  This Section shall
survive Closing under this Agreement.


 


15.           Time of the Essence. 
Time, wherever mentioned herein, shall be of the essence of this
Agreement.


 


16.           Binding Effect. 
This Agreement shall be binding upon and inure to the benefit of Seller
and Buyer and their respective successors, heirs and assigns.


 


17.           Entire Agreement. 
This Agreement constitutes the entire agreement between the parties
hereto regarding the transaction contemplated hereby and there are no other
terms, covenants, conditions, warranties, representations or statements, oral
or otherwise, of any kind whatsoever. 
Any agreement hereafter made shall be ineffective to change, modify,
discharge or effect an abandonment of this Agreement in whole or in part unless
such agreement is in writing and signed by the party against whom enforcement
of the change, modification, discharge or abandonment is sought.


 


22

















 


18.           Headings. 
The headings incorporated in this Agreement are for convenience and
reference only and are not a part of this Agreement and do not in any way
control, define, limit, or add to the terms and conditions hereof.


 


19.           Governing Law. 
This Agreement shall be construed, interpreted and governed by the laws
of the State of California.


 


20.           Counterparts. 
This Agreement may be executed in any number of counterparts, each of
which shall be an original, and such counterparts together shall constitute one
and the same instrument.


 


21.           Attorneys’ Fees. 
If either party commences an action against the other party arising out
of or in connection with this Agreement, then the prevailing party shall be
entitled to have and recover from the other party reasonable attorneys’ fees,
charges and disbursements and costs of suit in proportion to [***] up to a
maximum of 100%; provided, however, that in the case where the prevailing party
is awarded any equitable relief, then the prevailing party may recover the full
amount of such costs and attorney’s fees. 
For example, if the prevailing party [***] and no equitable relief, but
[***], and the prevailing party had two hundred thousand dollars ($200,000) in
costs and attorneys’ fees, then such prevailing party would be entitled to
recover [***] of such costs and attorneys’ fees.


 


[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


 


23

















 


IN
WITNESS WHEREOF,
the parties hereto have duly executed this Agreement, under seal, as of the day
and year first-above written.


 


 


	
   

  	
  SELLER:

  
	
   

  	
  BMR-2282 FARADAY AVENUE LLC,

  
	
   

  	
  a
  Delaware limited liability company,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BUYER:

  
	
   

  	
  ISIS PHARMACEUTICALS, INC.,

  
	
   

  	
  a
  Delaware corporation,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
						



 


S-1
















 


ACKNOWLEDGMENT
AND CONSENT OF TITLE COMPANY


 


On this                   day
of                         ,
20    , the undersigned, the Title Company named in the
foregoing Agreement, intending to be legally bound hereby, agrees to keep,
observe and perform the terms and conditions of said Agreement relating to the
holding and disbursement of the Deposit (as defined in the Agreement), together
with any interest earned thereon, and all additional monies paid to it in
escrow pursuant to the terms and conditions thereof.  Title Company shall not incur any liability
to anyone for damages, losses, or expenses except for fraud, negligence or
willful conversation in respect to any action taken or omitted in good faith.  Title Company may tender into the registry of
any court of competent jurisdiction any escrow funds if it deems that there is
a dispute with respect to the disbursement of such funds.  Thereafter, Title Company will be discharged
from all further duties and liabilities hereunder.


 


 


	
   

  	
  TITLE
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  [                                                                            
  ]

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
				



 


S-2

















 


EXHIBIT
“A”


(Legal
Description of Premises)


 


Real property in the City
of Carlsbad, County of San Diego, State of California, described as follows:


 


Parcel
A:


 


Lot 7 of Carlsbad Tract No. 84-9,
according to Map thereof No. 11230, filed in the Office of the County
Recorder of San Diego County, May 10, 1985, as instrument no. 85-165947 of
Official Records, and a portion of Parcel D of Parcel Map No. 14461, filed
in the Office of the County Recorder of San Diego County, September 12,
1986 as instrument no. 86-402406 of Official Records; all in the City of
Carlsbad, County of San Diego, State of California, more particularly described
as follows:


 


Commencing at the
Northwest corner of said Parcel D of Parcel Map No. 14461; thence along
the Westerly property line of said Parcel D, South 18 degrees 26’06” East,
278.43 feet, to the true point of beginning; thence leaving said Westerly line
North 50 degrees 30’00” East, 145.33 feet; thence North 70 degrees 12’00” East,
92.23 feet; thence South 39 degrees 30’48” East, 256.97 feet; thence South 50
degrees 29’12” West, 83.13 feet; thence South 71 degrees 33’54” West, 242.68 feet
to a point on said Westerly property line; thence North 18 degrees 26’06” West,
215.24 feet to the true point of beginning.


 


Said  property being described as “Parcel C” in a
Certificate of Compliance recorded on April 21, 2003 as instrument no.
2003-0459192 of Official Records of said San Diego County.


 


Parcel
B:


 


A non-exclusive easement
on, over and under the common areas as defined and shown on those certain
amended and restated declaration of establishment of Covenants, Conditions and
Restrictions, and Reservation of Easements (the “Declarations”), dated June 28,
1988 and recorded August 8, 1988 as instrument no. 88-387705 of Official
Records, for the purposes of ingress and egress, parking, the construction,
installation, maintenance, removal replacements, operation and use of
utilities, including but not limited to sewers, water and gas pipes, drainage
lines and systems, electric power, conduit lines and wiring, telephone,
conduits, lines and wires and other utilities, public or private, beneath the
ground surface (except vaults, vents, access, structures and other facilities
required to be above ground), subject to the terms, as more particularly set
forth in the Declaration.


 


APN: 212-061-33-00


 

















 


EXHIBIT
“B”


 


FORM OF
DEED


 


RECORDING REQUESTED BY


AND WHEN RECORDED MAIL
TO:


 


 


 


The undersigned Grantor
declares:  documentary transfer tax not
shown pursuant to Section 11932 of the Revenue and Taxation Code, as
amended


 


GRANT
DEED


 


FOR VALUE RECEIVED,
BMR-2282 FARADAY AVENUE LLC, a Delaware limited partnership (“Grantor”), grants to ISIS PHARMACEUTICALS,
INC., a Delaware corporation (“Grantee”), all that certain real property (the “Property”) situated in the City of
Carlsbad, County of San Diego, State of California, described on Exhibit A
attached hereto and by this reference incorporated herein, subject to all
covenants, conditions, easements, encumbrances and all other matters affecting
the Property.


 


IN WITNESS WHEREOF, the
undersigned has executed this Grant Deed dated as of                        ,
20    .


 


BMR-2282
FARADAY AVENUE  LLC,


a Delaware limited
liability company


 


 


	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
					



 

















 


	
  STATE OF CALIFORNIA

  	
  }

  	
   

  
	
  COUNTY OF

  	
   

  	
  }

  	
  S.S.

  
				



 


 


On                                             ,
                  
before me,                                                                                                                                                                                                                      
                                                                                            ,
a Notary Public in and for said County and 
State, personally appeared,                                                                                                                                                                                                                       
                                                                                                                                                                                                                      
                                ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the
instrument.


 


I certify under PENALTY
OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.


 


WITNESS my hand and
official seal.


 


 


	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Notary Seal)

  



 

















 


EXHIBIT A TO FORM OF
DEED


 


DESCRIPTION OF
PROPERTY


 


Real property in the City
of Carlsbad, County of San Diego, State of California, described as follows:


 


Parcel
A:


 


Lot 7 of Carlsbad Tract No. 84-9,
according to Map thereof No. 11230, filed in the Office of the County
Recorder of San Diego County, May 10, 1985, as instrument no. 85-165947 of
Official Records, and a portion of Parcel D of Parcel Map No. 14461, filed
in the Office of the County Recorder of San Diego County, September 12,
1986 as instrument no. 86-402406 of Official Records; all in the City of
Carlsbad, County of San Diego, State of California, more particularly described
as follows:


 


Commencing at the
Northwest corner of said Parcel D of Parcel Map No. 14461; thence along
the Westerly property line of said Parcel D, South 18 degrees 26’06” East,
278.43 feet, to the true point of beginning; thence leaving said Westerly line
North 50 degrees 30’00” East, 145.33 feet; thence North 70 degrees 12’00” East,
92.23 feet; thence South 39 degrees 30’48” East, 256.97 feet; thence South 50
degrees 29’12” West, 83.13 feet; thence South 71 degrees 33’54” West, 242.68
feet to a point on said Westerly property line; thence North 18 degrees 26’06”
West, 215.24 feet to the true point of beginning.


 


Said  property being described as “Parcel C” in a
Certificate of Compliance recorded on April 21, 2003 as instrument no.
2003-0459192 of Official Records of said San Diego County.


 


Parcel
B:


 


A non-exclusive easement
on, over and under the common areas as defined and shown on those certain
amended and restated declaration of establishment of Covenants, Conditions and
Restrictions, and Reservation of Easements (the “Declarations”), dated June 28,
1988 and recorded August 8, 1988 as instrument no. 88-387705 of Official
Records, for the purposes of ingress and egress, parking, the construction,
installation, maintenance, removal replacements, operation and use of
utilities, including but not limited to sewers, water and gas pipes, drainage
lines and systems, electric power, conduit lines and wiring, telephone,
conduits, lines and wires and other utilities, public or private, beneath the ground
surface (except vaults, vents, access, structures and other facilities required
to be above ground), subject to the terms, as more particularly set forth in
the Declaration.


 


APN: 212-061-33-00


 

















 


EXHIBIT
“C”


(Bill
of Sale and Assignment and Assumption of Warranties)


 


THIS BILL OF SALE AND
ASSIGNMENT AND ASSUMPTION OF WARRANTIES (the “Assignment”) made as of
this [        ] day of                   ,
20     between BMR-2282 FARADAY AVENUE LLC, a Delaware
limited liability company (the “Assignor”), and ISIS PHARMACEUTICALS,
INC., a Delaware corporation (“Assignee”). Assignor and Assignee are
parties to the Agreement of Purchase and Sale dated
              ,
            
between Assignor and Assignee (the “Agreement”).  Capitalized terms used herein but not
otherwise defined shall have the meanings ascribed thereto in the Agreement.


 


1.             Assignor is the owner of that certain real property
located in Carlsbad, California, more particularly described in Exhibit A
attached hereto (the “Real Property”). 
Assignor hereby assigns, transfers, sets over and conveys to Assignee
all of Assignor’s right, title and interest, in, to, and under the following,
in each case to the extent assignable without payment or fee: all warranties,
indemnities, guaranties (express or implied), applications, permits,
authorizations, approvals and licenses (to the extent applicable in any way to
the above referenced Real Property and any improvements thereon (collectively,
the “Warranties”).


 


2.             Assignee does hereby assume and agree to perform all
of Assignor’s obligations under the Warranties accruing from and after the date
hereof.  Assignee agrees to indemnify,
protect, defend and hold Assignor harmless from and against any and all
liabilities, losses, costs, damages and expenses (including reasonable
attorneys’ fees) directly or indirectly arising out of or related to any breach
or default in Assignee’s obligations hereunder.


 


3.             Sale of Personalty. 
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Assignor hereby sells, transfers, sets over and
conveys to Assignee the following:


 


(a)           Tangible Personal Property. 
All right, title and interest of Assignor in and to all all tangible
personal property now or hereafter located on, or used exclusively in
connection with, the operation, ownership, maintenance, occupancy or
improvement of the Land (collectively, the “Tangible Personal Property”; and


 


(b)           Intangible Property.  The following
property to the extent assignable: All, right, title and interest of Assignor,
if any, in and to all intangible personal property now or hereafter used
exclusively in connection with the operation, ownership, maintenance,
management, or occupancy of the Real Property (to the extent assignable); the
plans and specifications for the Improvements (to the extent assignable);
insurance proceeds received by (or owed to) Seller which relate to damage to
the Land or Improvements caused by a casualty that has occurred prior to the
Closing Date and for which restoration has not previously occurred, but only to
the extent that such proceeds have not been applied by Seller prior to the
Closing Date towards the cost of (a) pursuit or settlement of the
applicable insurance claim, (b) the clearing of debris or other expenses associated
with securing the Land or Improvements, or (c) restoration of the Land or
Improvements; and condemnation awards or claims thereto.


 

















 


4.             This Assignment shall be binding upon and inure to the
benefit of Assignor and Assignee and their respective heirs, executors,
administrators, successors and assigns.


 


5.             This Assignment may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.


 


[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK]


 

















 


IN WITNESS WHEREOF,
Assignor and Assignee have each executed this Assignment as of the date first
written above.


 


	
   

  	
  ASSIGNOR:

  
	
   

  	
   

  
	
   

  	
  BMR-2282 FARADAY AVENUE
  LLC,

  
	
   

  	
  a Delaware limited
  liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ASSIGNEE:

  
	
   

  	
   

  
	
   

  	
  ISIS PHARMACEUTICALS,
  INC.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
							



 

















 


EXHIBIT A TO FORM OF
ASSIGNMENT AND ASSUMPTION OF WARRANTIES


 


DESCRIPTION OF
PREMISES


 


Real property in the City
of Carlsbad, County of San Diego, State of California, described as follows:


 


Parcel
A:


 


Lot 7 of Carlsbad Tract No. 84-9,
according to Map thereof No. 11230, filed in the Office of the County
Recorder of San Diego County, May 10, 1985, as instrument no. 85-165947 of
Official Records, and a portion of Parcel D of Parcel Map No. 14461, filed
in the Office of the County Recorder of San Diego County, September 12,
1986 as instrument no. 86-402406 of Official Records; all in the City of
Carlsbad, County of San Diego, State of California, more particularly described
as follows:


 


Commencing at the
Northwest corner of said Parcel D of Parcel Map No. 14461; thence along
the Westerly property line of said Parcel D, South 18 degrees 26’06” East,
278.43 feet, to the true point of beginning; thence leaving said Westerly line
North 50 degrees 30’00” East, 145.33 feet; thence North 70 degrees 12’00” East,
92.23 feet; thence South 39 degrees 30’48” East, 256.97 feet; thence South 50
degrees 29’12” West, 83.13 feet; thence South 71 degrees 33’54” West, 242.68
feet to a point on said Westerly property line; thence North 18 degrees 26’06”
West, 215.24 feet to the true point of beginning.


 


Said  property being described as “Parcel C” in a
Certificate of Compliance recorded on April 21, 2003 as instrument no.
2003-0459192 of Official Records of said San Diego County.


 


Parcel
B:


 


A non-exclusive easement
on, over and under the common areas as defined and shown on those certain
amended and restated declaration of establishment of Covenants, Conditions and
Restrictions, and Reservation of Easements (the “Declarations”), dated June 28,
1988 and recorded August 8, 1988 as instrument no. 88-387705 of Official
Records, for the purposes of ingress and egress, parking, the construction,
installation, maintenance, removal replacements, operation and use of
utilities, including but not limited to sewers, water and gas pipes, drainage
lines and systems, electric power, conduit lines and wiring, telephone,
conduits, lines and wires and other utilities, public or private, beneath the
ground surface (except vaults, vents, access, structures and other facilities
required to be above ground), subject to the terms, as more particularly set
forth in the Declaration.


 


APN: 212-061-33-00


 

















 


EXHIBIT
“D”


 


LEASE
TERMINATION AGREEMENT


 


THIS TERMINATION
AGREEMENT (this “Agreement”) is entered into as of                         ,
20[    ], by and between BMR-2282 FARADAY AVENUE LLC, a
Delaware limited liability company (“Landlord”), and ISIS
PHARMACEUTICALS, INC., a Delaware corporation (“Tenant” and, together
with Landlord, the “Parties”).


 


RECITALS:


 


A.            The Parties entered into that certain Lease Agreement,
dated as of September 19, 2005, as amended by that certain First Amendment
to Lease Agreement dated as of May 8, 2007 and that certain Second
Amendment to Lease Agreement dated as of March 30, 2010 (as amended, the “Lease”).
All capitalized terms used and not otherwise defined herein shall have the
meanings ascribed thereto in the Lease.


 


B.            The Parties now wish to terminate the Lease on the
terms and conditions set forth herein.


 


NOW, THEREFORE, the
Parties to this Agreement hereby agree as follows:


 


1.             TERMINATION OF THE LEASE. 
EFFECTIVE AS OF
              
    , 20     (THE “EFFECTIVE DATE”),
THE LEASE IS TERMINATED BY CONSENT OF THE PARTIES; PROVIDED, HOWEVER,
THAT SUCH TERMINATION SHALL NOT TERMINATE OR LIMIT THE EFFECT OF THOSE
PROVISIONS OF THE LEASE WHICH BY THEIR TERMS SURVIVE EXPIRATION OR TERMINATION
OF THE LEASE.


 


2.             ENTIRE AGREEMENT. 
THIS AGREEMENT SHALL CONSTITUTE THE FINAL, COMPLETE AND EXCLUSIVE
EXPRESSION OF THE INTENTIONS OF THE PARTIES HERETO WITH RESPECT TO THE SUBJECT
MATTER HEREOF AND SHALL SUPERSEDE ALL PREVIOUS COMMUNICATIONS, REPRESENTATIONS,
AGREEMENTS, PROMISES OR STATEMENTS, EITHER ORAL OR WRITTEN, BY OR BETWEEN ANY
PARTY WITH REGARD TO THE SUBJECT MATTER HEREOF.


 


3.             COUNTERPARTS. 
THIS AGREEMENT MAY BE EXECUTED IN ONE OR MORE COUNTERPARTS, EACH OF
WHICH SHALL BE READ TOGETHER AND BE CONSTRUED AS ONE INSTRUMENT.  A FACSIMILE OR OTHER ELECTRONIC COPY OF A
SIGNATURE SHALL BE AS BINDING AS AN ORIGINAL SIGNATURE.


 


 


[THE REMAINDER OF
THE PAGE INTENTIONALLY LEFT BLANK]


 

















 


IN WITNESS WHEREOF, the
parties have executed and delivered this Agreement as of the Effective Date.


 


	
   

  	
  LANDLORD:

  
	
   

  	
   

  
	
   

  	
  BMR-2282 FARADAY AVENUE
  LLC,

  
	
   

  	
  a Delaware limited
  liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
  ISIS PHARMACEUTICALS,
  INC.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
							



 


6

















 


EXHIBIT
“E”


(FIRPTA
Affidavit)


 


CERTIFICATE
REGARDING FOREIGN


INVESTMENT
IN REAL PROPERTY TAX ACT


(ENTITY
TRANSFEROR)


 


Section 1445 of the
Internal Revenue Code provides that a transferee (purchaser) of a U.S. real
property interest must withhold tax if the transferor (seller) is a foreign
person.  To inform the transferee
(purchaser) that withholding tax is not required upon the disposition of a U.S.
real property interest by BMR-2282 FARADAY AVENUE LLC, a Delaware limited liability
company (“Transferor”).  Transferor
hereby certifies:


 


1.             Transferor is not a foreign corporation, foreign
partnership, foreign trust, or foreign estate (as those terms are defined in
the Internal Revenue Code and Income Tax Regulations).


 


2.             Transferor’s Federal Employer Identification Number is
                          .


 


3.             Transferor’s office address is:


 


17190 Bernardo Center
Drive


San Diego, CA  92128


 


4.             The address or description of the property which is
the subject matter of the disposition is                           ,
Carlsbad, California.


 


Transferor understands
that this certification must be disclosed to the Internal Revenue Service by
transferee and that any false statement contained herein could be punished by
fine, imprisonment, or both.


 


Transferor declares that
it has examined this certification and to the best of its knowledge and belief,
it is true, correct and complete, and further declares that the individual
executing this certification on behalf of Transferor has full authority to do
so.


 


 


	
   

  	
  BMR-2282 FARADAY AVENUE
  LLC,

  
	
   

  	
  a Delaware limited
  liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
					



 
















 


EXHIBIT
“F”


(Permitted
Exceptions)


 


1.             General and special taxes and assessments for the
fiscal year 2005-2006, a lien not yet due or payable.


 


2.             The lien of supplemental taxes, if any, assessed
pursuant to Chapter 3.5 commencing with Section 75 of the California
Revenue and Taxation Code, arising on or after the date of said policy.


 


3.             Covenants, conditions, restrictions and easements in
the document entitled “Third Amended and Restated Declaration of Covenants,
Conditions and Restrictions of Carlsbad Research Center” recorded June 29,
1988 as Instrument No. 88-313420 of Official Records, which provide that a
violation thereof shall not defeat or render invalid the lien of any first
mortgage or deed of trust made in good faith and for value, but deleting any
covenant, condition or restriction indicating a preference, limitation or
discrimination based on race, color, religion, sex, handicap, familial status,
national origin, sexual orientation, marital status, ancestry, source of income
or disability, to the extent such covenants, conditions or restrictions violate
Title 42, Section 3604(c), of the United States Codes or Section 12955
of the California Government Code. Lawful restrictions under state and federal
law on the age of occupants in senior housing or housing for older persons
shall not be construed as restrictions based on familial status.


 


4.             The terms and provisions contained in the document
entitled “Agreement Between Developer- Owner and the City of Carlsbad for the
Payment of a Public Facilities Fee” recorded April 17, 1984 as Instrument
No 84-140520 of Official Records.


 


5.             An easement for public utilities and incidental
purposes, recorded October 8, 1984 as Instrument No. 84-381176 of
Official Records.


	
  In Favor of:

  	
   

  	
  San Diego Gas and Electric
  Company, a corporation

  
	
  Affects:

  	
   

  	
  A portion of said land

  



 


The location of the
easement cannot be determined from record information.


 


6.             An easement shown or dedicated on the map filed or
recorded May 10, 1985 as Map No.11230 and map recorded September 12,
1986 as Parcel Map no. 14461


	
  For:

  	
   

  	
  General utility and
  access and incidental purposes.

  



 


A portion of said
easement has been vacated by Quitclaim Deed recorded October 27, 1986 as
Instrument No. 86-485767 of Official Records.


Affects: Lot 8 of Map No. 11230


 


7.             An easement shown or dedicated on the map filed or
recorded May 10, 1985 as Map No. 11230 of Tract Maps


 

















 


	
  For:

  	
   

  	
  Proposed General Access
  and Utility Easement and incidental purposes.

  



 


The location of the
easement cannot be determined from record information.


 


8.             The terms and provisions contained in the document
entitled “Agreement Between Developer- Owner and the City of Carlsbad for the
Payment of a Public Facilities Fee” recorded February 25, 1986 as
Instrument No. 86-073170 of Official Records.


 


9.             An easement for public utilities and incidental
purposes, recorded March 4, 1986 as Instrument No. 86-084966 of
Official Records.


	
  In Favor of:

  	
   

  	
  San Diego Gas and
  Electric Company.

  
	
  Affects:

  	
   

  	
  A portion of said land

  



 


The location of the easement
cannot be determined from record information.


 


10.           The right to relocate, from time to time, any such
easement located on the common area, so long as any improvements constructed on
such relocated easements are replaced, in favor of Carlsbad, Research Center, a
California general partnership, as disclosed by document entitled “Grant Deed”
Recorded January 19, 1988 as Instrument No. 88-024163 of Official
Records.


 


11.           Covenants, conditions, restrictions and easements in
the document entitled “First Amended and Restated Declaration of Establishment
of Covenants, Conditions and Restrictions and Reservation of Easements”
recorded August 8, 1988 as Instrument No. 88-387705 of Official
Records, which provide that a violation thereof shall not defeat or render
invalid the lien of any first mortgage or deed of trust made in good faith and
for value, but deleting any covenant, condition or restriction indicating a
preference, limitation or discrimination based on race, color, religion, sex,
handicap, familial status, national origin, sexual orientation, marital status,
ancestry, source of income or disability, to the extent such covenants,
conditions or restrictions violate Title 42, Section 3604(c), of the
United States Codes or Section 12955 of the California Government Code.
Lawful restrictions under state and federal law on the age of occupants in
senior housing or housing for older persons shall not be construed as
restrictions based on familial status.


 


Document(s) declaring
modifications thereof entitled “First Amendment to First Amended and Restated
Declaration of Establishment of Covenants, Conditions and Restrictions and
Reservation of Easements” recorded April 15, 1993 as Instrument No. 1993-0232850
of Official Records.


 


12.           An easement for construct, reconstruct, operate,
maintain and repair facilities designed for the general purpose of collecting,
storing, transporting, pumping and treating all water, including surface water,
stream water, flood water and ground water flowing into said facilities, and
all natural and artificial drainage ditches and structures of any kind, whether
above or below the surface of the ground and 


 


9

















 


incidental purposes,
recorded August 8, 1994 as Instrument No. 1994¬0482604 of Official
Records.


	
  In Favor of:

  	
   

  	
  Carlsbad Municipal
  water District, a public agency.

  
	
  Affects:

  	
   

  	
  A portion of said land

  



 


At the date of recording
of the document, the parties thereto had no record interest in the land.


 


13.           An easement for construct, reconstruct, operate,
maintain and repair facilities designed for the general purpose of collecting,
storing, transporting, pumping and treating all water, including surface water,
stream water, flood water and ground water flowing into said facilities, and
all natural and artificial drainage ditches and structures of any kind, whether
above or below the surface of the ground and incidental purposes, recorded August 8,
1994 as Instrument No. 199+· 0482622 of Official Records.


	
  In Favor of:

  	
   

  	
  Carlsbad Municipal
  water District, a public agency.

  
	
  Affects:

  	
   

  	
  A portion of said land

  



 


At the date of recording
of the document, the parties thereto had no record interest in the land.


 


14.           The terms and provisions contained in the document
entitled “Commercial Cable Television Access Agreement and Easement” recorded September 27,
1995 as Instrument No. 1995¬0432157 of Official Records.


 


15.           An easement for public utilities and incidental
purposes, recorded August 1, 2003 as Instrument No. 2003-0928641 of
Official Records.


	
  In Favor of:

  	
   

  	
  San Diego Gas and
  Electric Company, a corporation

  
	
  Affects:

  	
   

  	
  A portion of said land

  



 


The location of the
easement cannot be determined from record information.


 


10

















 


EXHIBIT
B TO AMENDMENT


 


EXHIBIT
F


 


FORM MEMORANDUM
OF LEASE


 


	
  Recording Requested By:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  When Recorded Return
  To:

  	
   

  
	
   

  	
   

  
	
  LATHAM &
  WATKINS LLP

  	
   

  
	
  Attn: Robert
  Frances, Esq.

  	
   

  
	
  600 West Broadway, 18th Floor

  	
   

  
	
  San Diego, California
  92101-3375

  	
   

  
	
   

  	
  THE AREA ABOVE IS
  RESERVED FOR RECORDER’S USE

  



 


MEMORANDUM
OF LEASE


 


This Memorandum of Lease
(“Memorandum”) is made and entered into as of March 30, 2010, by
and between BMR-2282 FARADAY AVENUE LLC, a Delaware limited liability company (“Landlord”),
and ISIS PHARMACEUTICALS, INC., a Delaware corporation (“Tenant”), in
connection with that certain real property located in Carlsbad, California, and
more particularly described on Exhibit “A”
attached hereto and incorporated herein by reference (together with any
improvements now or hereafter constructed thereon, the “Premises”).


 


1.             Lease.  Pursuant to
the terms and provisions of that certain unrecorded Lease by and between
Landlord and Tenant, dated September 19, 2005, as amended on May 8,
2007 and March 30, 2010 (the “Lease”), Tenant leased the Premises
from Landlord. Capitalized terms used herein but not otherwise defined shall
have the meanings ascribed thereto in the Lease.


 


2.             Lease Term.  The term of
the Lease shall commence on September 19, 2005 and end on December 31,
2031, subject to earlier termination of the Lease as provided therein;
provided, however, that Tenant shall have four (4) options to extend the
Lease term, as further described in Article 36 of the Lease.


 


3.             Purchase Option. The Lease grants Tenant the option to purchase the
Premises from Landlord at the end of certain Lease Years:, subject to and in
accordance with Section 24.3 of the Lease.


 


4.             Right of First Negotiation. 
The Lease grants Tenant the right of first negotiation with respect to
any sale of the Premises by Landlord to a third party, subject to and in
accordance with Section 24.2 of the Lease.


 

















 


5.             No Effect on Lease. The parties have prepared, signed, and acknowledged
this Memorandum solely for recording purposes. This Memorandum does not modify,
increase, decrease, or in any other way affect any party’s rights, duties, or
obligations under the Lease. Landlord and Tenant each has rights, duties, and
obligations (and conditions to its rights) under the Lease but not stated in
this Memorandum. If the provisions of the Lease and the provisions of this
Memorandum conflict, then the provisions of the Lease shall govern. Nothing in
this Memorandum constitutes any representation or warranty by either party. To
the extent, if any, that the Lease limits the liability of either Landlord or
Tenant, such limitation also applies to any such liability under this
Memorandum.


 


6.             Successors and Assigns. The Lease and this Memorandum shall bind
and benefit the parties hereto and their successors and assigns.


 


7.             Termination. This Memorandum shall automatically terminate and be
of no force or effect upon any termination of the Lease. Within fifteen (15)
days following such termination, Tenant will provide to Landlord an executed
and acknowledged Quitclaim Deed, releasing and quitclaiming all right, title
and interest in and to the Property, specifically including any interest
pursuant to the Lease.


 


8.             Counterparts. 
This Memorandum may be executed in any number of counterparts, each of
which shall be deemed to be an original, and all of such counterparts shall
constitute one agreement.  To facilitate
the execution of this Memorandum, the parties may execute and exchange by telephone
facsimile or by other electronic methods (including email) counterparts of this
Memorandum or the signature pages hereto. 
Signatures to this Memorandum transmitted electronically or by telecopy
shall be valid and effective to bind the party so signing.  Each party hereto agrees to promptly deliver
to the other party an executed original to this Memorandum with its actual
signature, but a failure to do so shall not affect the enforceability of this
Memorandum, it being expressly agreed that each party to this Memorandum shall
be bound by its own telecopied or electronically delivered signature and shall
accept the telecopied or electronically delivered signature of the other
parties to this Memorandum.


 


[Remainder of Page Left
Intentionally Blank]


 

















 


IN WITNESS WHEREOF,
Landlord and Tenant have executed this Memorandum of Ground Lease as of the
date first above written.


 


 


	
   

  	
  LANDLORD:

  
	
   

  	
   

  
	
   

  	
  BMR-2282 FARADAY AVENUE
  LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  John Bonanno

  
	
   

  	
  Title:

  	
  Vice President,
  Development

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
  ISIS PHARMACEUTICALS,
  INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
  B. Lynne Parshall

  
	
   

  	
  Title:

  	
  Chief Operating Officer & Chief Financial
  Officer

  



 


[MEMORANDUM
OF LEASE SIGNATURE PAGE]


 

















 


STATE OF CALIFORNIA                      }


COUNTY OF
                                          }
S.S.


 


On
                                            ,
                  
before me,
                                                                
                                                                          ,
a Notary Public in and for said County and State, personally appeared,
                                                                                                                        
                                                                                                                                                            
                                                                                                                ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the
instrument.


 


I certify under PENALTY
OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.


 


WITNESS my hand and
official seal.


 


 


	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Notary Seal)

  



 


[MEMORANDUM
OF LEASE ACKNOWLEDGMENT PAGE]


 

















 


STATE OF CALIFORNIA                      }


COUNTY OF
                                          }
S.S.


 


On
                                            ,
                  
before me,
                                                                
                                                                          ,
a Notary Public in and for said County and State, personally appeared,
                                                                                                                        
                                                                                                                                                            
                                                                                                                ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the
instrument.


 


I certify under PENALTY
OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.


 


WITNESS my hand and
official seal.


 


 


	
  Signature:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  (Notary Seal)

  



 

















 


EXHIBIT “A”


 


Description of the
Property


 


Real property in the City
of Carlsbad, County of San Diego, State of California, described as follows:


 


Parcel
A:


 


Lot 7 of Carlsbad Tract No. 84-9,
according to Map thereof No. 11230, filed in the Office of the County
Recorder of San Diego County, May 10, 1985, as instrument no. 85-165947 of
Official Records, and a portion of Parcel D of Parcel Map No. 14461, filed
in the Office of the County Recorder of San Diego County, September 12,
1986 as instrument no. 86-402406 of Official Records; all in the City of
Carlsbad, County of San Diego, State of California, more particularly described
as follows:


 


Commencing at the
Northwest corner of said Parcel D of Parcel Map No. 14461; thence along
the Westerly property line of said Parcel D, South 18 degrees 26’06” East,
278.43 feet, to the true point of beginning; thence leaving said Westerly line
North 50 degrees 30’00” East, 145.33 feet; thence North 70 degrees 12’00” East,
92.23 feet; thence South 39 degrees 30’48” East, 256.97 feet; thence South 50
degrees 29’12” West, 83.13 feet; thence South 71 degrees 33’54” West, 242.68
feet to a point on said Westerly property line; thence North 18 degrees 26’06”
West, 215.24 feet to the true point of beginning.


 


Said property being
described as “Parcel C” in a Certificate of Compliance recorded on April 21,
2003 as instrument no. 2003-0459192 of Official Records of said San Diego
County.


 


Parcel
B:


 


A non-exclusive easement
on, over and under the common areas as defined and shown on those certain
amended and restated declaration of establishment of Covenants, Conditions and
Restrictions, and Reservation of Easements (the “Declarations”), dated June 28,
1988 and recorded August 8, 1988 as instrument no. 88-387705 of Official
Records, for the purposes of ingress and egress, parking, the construction,
installation, maintenance, removal replacements, operation and use of
utilities, including but not limited to sewers, water and gas pipes, drainage
lines and systems, electric power, conduit lines and wiring, telephone, conduits,
lines and wires and other utilities, public or private, beneath the ground
surface (except vaults, vents, access, structures and other facilities required
to be above ground), subject to the terms, as more particularly set forth in
the Declaration.


 


APN: 212-061-33-00


 


[MEMORANDUM
OF LEASE ACKNOWLEDGMENT PAGE]