exv10w66



 









Exhibit 10.66




Confidential

 




SUB-SUBLEASE



THIS SUB-SUBLEASE (herein referred to as this “Sub-Sublease”) dated for reference purposes only as
of August 4, 2006, is made between CYTOKINETICS, INC., a Delaware corporation (“Sublessor”), and
PORTOLA PHARMACEUTICALS, INC., a Delaware corporation (“Sublessee”).




RECITALS





	 	A.	 	Sublessor is the subtenant under a Sublease dated, for reference purposes, November 23,
2005, as to which Millennium Pharmaceuticals, Inc., a Delaware corporation (“Master
Tenant”) is the sub-landlord (the “Sublease”), with respect to certain premises (the
“Subleased Premises”) consisting of the entire building located at 256 E. Grand Avenue in
the City of South San Francisco as more particularly described in the Sublease, a true and
correct copy of which is attached hereto as Exhibit A.
	 
	 	B.	 	Master Tenant, as successor in interest to COR Therapeutics, Inc., is the tenant under
that certain lease dated as of July 1, 2001 (hereinafter, the “Master Lease”), pursuant to
which Britannia Pointe Grand Limited Partnership (“Master Landlord”) leased to Master
Tenant certain real property located at 256, 260, and 270 East Grand Avenue in South San
Francisco, California (the “Master Premises”), as more particularly described in the Master
Lease, a true and correct copy of which is attached as Exhibit A to the Sublease.
	 
	 	C.	 	Sublessor desires to sub-sublease to Sublessee, and Sublessee desires to sub-sublease
from Sublessor, a portion of the Subleased Premises consisting of approximately 2,500
rentable square feet of office space, as more particularly set forth on the floor plan
attached hereto as Exhibit B.






	 	 	NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Sublessor and Sublessee agree as follows:





Section 1. Sub-Sublease



1.1 Premises



Sublessor subleases to Sublessee on the terms and conditions in this Sub-Sublease the following
portion of the Subleased Premises (“Sub-Subleased Premises”): Approximately 2,500 rentable square
feet, as depicted on Exhibit C attached hereto.



In addition, Sublessee shall have a revocable license to use all existing office / cubicle
furniture in the Sub-Subleased Premises, at no additional cost. Sublessor makes no representation
or warranty as to the condition of any office/cubicle furniture.



Subject to the prior approval of and coordination with Sublessor’s Information Technology
Department, Sublessee shall have a revocable license for the purpose of access to the
2nd floor Information Technology (“IT”) room for the purposes of connecting its data /
telephony communications cables, at Sublessee’s sole expense, provided that all Sublessee personnel
and contractors must be accompanied by Sublessor’s IT personnel at all times while exercising such
access. Sublessee shall use Sublessor’s cabling contractor, TMS, to complete any cabling work
necessary for Sublessee’s use at Sublessee’s cost; no other Sublessee contractors shall be provided
access to the IT room unless otherwise agreed by Sublessee. Sublessee shall provide Sublessor with
its requirements for any such work reasonably in advance.



Sublessee shall have the right to use, in common with others, the available on-site surface
parking, at the ration of 2.8 per 1,000 rentable square feet, at no additional cost.




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1.2 Condition.



Sublessor shall deliver the Sub-Subleased Premises in good working order and repair, but otherwise
in strictly “AS IS” condition without warranty, representation, or obligation for alterations or
improvements whatsoever.



Section 2. Term



The term of this Sub-Sublease (the “Term”) will commence on (a) August 1, 2006, or (b) the date
that Master Tenant and Master Landlord consent to this Sub-Sublease, whichever occurs later
(“Commencement Date”); and will end on October 31, 2006 (“Termination Date”), unless earlier
terminated pursuant to the terms hereof, of the Sublease, or of the Master Lease. Possession of
the Premises (“Possession”) will be delivered to Sublessee upon mutual execution of this
Sub-Sublease and approval of Sublessor’s Board of Directors. If for any reason Sublessor does not
deliver Possession to Sublessee on the Commencement Date, Sublessor will not be subject to any
liability for this failure, the Termination Date will not be extended by the delay, and the
validity of this Sub-Sublease will not be impaired. Rent will be abated until delivery of
Possession. If Sublessee takes Possession prior to the Commencement Date, such early Possession
will be subject to all of the provisions of this Sub-Sublease, including, without limitation, the
payment of Rent. In the event that Sublessee remains in possession of the Sub-Subleased Premises
after the Termination Date, this Sub-Sublease shall continue as a tenancy from month to month, and
either party may terminate the same upon sixty (60) days advance written notice to the other.
Furthermore, if this Sub-Sublease does convert to a month-to-month tenancy, then on the first (and
each subsequent) anniversary of the Commencement Date, the Rent payable hereunder shall increase by
three (3%) percent.



Section 3. Rent



Sublessee will pay to Sublessor as monthly Base Rent, without deduction, setoff, notice, or demand,
at 256 Grand Avenue, South San Francisco, CA, or at any other place Sublessor designates by notice
to Sublessee, the sum of Four Thousand Three Hundred Seventy-Five ($4,375.00) Dollars per month, on
a “full service” basis. Sublessee shall not be responsible for any operating expenses or
pass-through expenses of any kind.



Section 4. Security Deposit



Sublessee shall deposit with Sublessor upon Sublessor’s delivery of Possession a cash Security
Deposit in the amount of $4,375.00 as security for Sublessee’s faithful performance of Sublessee’s
obligations under this Sub-Sublease. If Sublessee fails to pay Rent or other charges due hereunder,
or otherwise defaults under this Sub-Sublease, Sublessor may use, apply or retain all or any
portion of said Security Deposit for the payment of any amount due Sublessor or to reimburse or
compensate Sublessor for any liability, cost, expense, loss or damage (including attorneys’ fees)
which Sublessor may suffer or incur by reason thereof, including payment of Rent following
Sublessee’s default and vacating of the Premises, and Sublessee hereby waives the provisions of
Cal. Civil Code §1950.7. If Sublessor uses or applies all or any portion of said Security Deposit,
Sublessee shall within ten (10) days after written request therefor deposit monies with Sublessor
sufficient to restore said Security Deposit to the full amount required by this Sub-Sublease.



Section 5. Use of Premises



The Premises will be used and occupied only for office use; and for no other use or purpose.



Section 6. Assignment and Subletting.



Sublessee will not assign this Sub-Sublease or further sublet all or any part of the Sub-Subleased
Premises.




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Section 7. Other Provisions of Sub-Sublease.



7.1 Incorporation.



All applicable terms and conditions of the Sublease are incorporated into and made a part of this
Sub-Sublease, including but not limited to those portions of the Master Lease as are incorporated
therein, except to the extent inconsistent with the business terms hereof. For purposes hereof,
with respect to the Sublease, the term “Sublessee” shall be substituted for the term “Subtenant,”
“Sublessor” shall be substituted for the term “Sublandlord,” and the “Sub-Subleased Premises” shall
be substituted for the term “Subleased Premises.” Notwithstanding the foregoing: (a) to the
extent that any obligation rests upon the Master Landlord pursuant to the Master Lease, such
obligation shall remain that of Master Landlord and not Sublessor; and (b) to the extent that any
obligation rests upon Master Tenant pursuant to the Sublease, such obligation shall remain that of
Master Tenant and not Sublessor.



Sublessee assumes and agrees to perform the Sublessor’s obligations under the Sublease during the
Term to the extent that these obligations are applicable to the Sub-Subleased Premises. However,
the obligation to pay Rent will be considered performed by Sublessee to the extent and in the
amount rent is paid to Sublessor in accordance with Section 3 of this Sub-Sublease.



7.2 Performance.



Sublessee will not commit or suffer any act or omission that will violate any of the provisions of
the Master Lease or the Sublease.




Section 8. Hazardous Substances



8.1 Use of Hazardous Substances.



Sublessor has no knowledge of the presence of any Hazardous Substances (as used in Section 11.6(a)
of the Master Lease) in, on or about the Sub-Subleased Premises. Sublessee shall not cause or
permit any Hazardous Substance to be generated, brought onto, used, stored, or disposed of in or
about the Sub-Subleased Premises by Sublessee or its agents, employees, contractors, subtenants, or
invitees except in strict compliance with all Environmental Laws, the terms of the Master Lease and
the terms of the Sublease. As used herein, “Environmental Laws” shall mean and include all
applicable statutes, ordinances, and regulations in effect during the Sub-Sublease Term that relate
to public health and safety and protection of the environment.



8.2 Indemnification.



Sublessee shall, at Sublessee’s sole expense and with counsel reasonably acceptable to Sublessor,
indemnify, defend, and hold harmless Master Landlord, Master Tenant, Sublessor and Sublessor’s
shareholders, directors, officers, employees, partners, affiliates, and agents with respect to all
losses arising out of or resulting from the release of any Hazardous Substance in or about the
Sub-Subleased Premises or the Building, or the violation of any Environmental Law, by Sublessee or
Sublessee’s agents, contractors, or invitees.




Section 9. Insurance



Sublessee shall provide the insurance required of Master Tenant under the Master Lease and that
required of Sublessor under the Sublease, and shall name each of Master Landlord, Master Tenant,
and Sublessor as additional insureds.




Section 10. Attorney Fees.



If either party commences an action against the other in connection with this Sub-Sublease, the
prevailing party will be entitled to recover costs of suit and reasonable attorney fees.




Section 11. Brokers.



Sublessor and Sublessee each warrant that they have not dealt with any real estate broker in
connection with this transaction except for NAI BT COMMERCIAL, representing Sublessor, and CB
RICHARD ELLIS, representing Sublessee. Sublessor and Sublessee each agree to indemnify, defend,




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Confidential

 



and hold the other harmless against any damages incurred as a result of the breach of the warranty
contained in this Sub-Sublease.




Section 12. Notices.



All notices and demands that may be required or permitted by either party to the other will be in
writing and personally delivered at the Subleased (or Sub-Subleased, as applicable) Premises.




Section 13. Successors and Assigns.



This Sub-Sublease will be binding on and inure to the benefit of the parties to it, their heirs,
executors, administrators, successors in interest, and assigns.




Section 14. Consent



Sublessor and Sublessee recognize that certain actions Sublessee may wish to undertake pursuant to
this Sub-Sublease Agreement will require, in addition to or in lieu of the consent of Sublessor,
the consent of the Master Tenant and that of the Master Landlord.




Section 15. Entire Agreement



This Sub-Sublease sets forth all the agreements between Sublessor and Sublessee concerning the
Subleased Premises, and there are no other agreements either oral or written other than as set
forth in this Sub-Sublease.




Section 16. Time of Essence



Time is of the essence in this Sub-Sublease.




Section 17. Consent by Master Landlord and Master Tenant



THIS SUB-SUBLEASE WILL HAVE NO EFFECT UNLESS CONSENTED TO BY MASTER LANDLORD AND MASTER TENANT.




Section 18. Governing Law



This Sub-Sublease will be governed by and construed in accordance with California law.




Section 19. Counterparts



This Sub-Sublease may be signed in two or more counterparts, each of which shall be deemed an
original and all of which shall constitute one agreement.




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IN WITNESS WHEREOF, the parties have executed this Sub-Sublease:






SUBLESSEE:




PORTOLA PHARMACEUTICALS, INC.





			
	By 	 	  /s/ Carol Olson 







			
	Name Printed: 	 	Carol Olson 







			
	Its: 	 	EVP 







			
	Date: 	 	August 4, 2006 









SUBLESSOR:

CYTOKINETICS, INC.





			
	By 	 	  /s/ Robert I. Blum 







			
	Name Printed: 	 	Robert I. Blum 







			
	Its: 	 	President 







			
	Date: 	 	August 4, 2006 











 









 





Confidential

 


EXHIBIT A




Sublease




[Attached]




vi









 







SUBLEASE




     This Sublease (“Sublease”), dated November 23rd, 2005 for reference purposes
only, is entered into by and between Millennium Pharmaceuticals, Inc. a Delaware corporation
(“Sublandlord”), and Cytokinetics, Incorporated, a Delaware corporation (“Subtenant”).



Recitals




     A. Sublandlord, as successor in interest to COR Therapeutics, Inc., leases certain premises
(the “Master Premises”) consisting of approximately 136,242 rentable square feet in four buildings
in South San Francisco, California more particularly described as (i) the one-story building
commonly known as 256 East Grand Avenue, (ii) the two-story building commonly know as 260 East
Grand Avenue, (iii) Suites 20, 26, 35, 45, 50 and 70 in the one-story building commonly known as
250 East Grand Avenue, and (iv) the westerly portion of the two-story building commonly known as
270 East Grand Avenue, all in the project known as Britannia Pointe Grand (and described in the
Master Lease as the “Center”), pursuant to a certain Lease, dated as of July 1, 2001 between
Britannia Pointe Grand Limited Partnership, as Landlord (the “Master Landlord”), and Sublandlord’s
predecessor in interest, COR Therapeutics, Inc., as tenant, a copy of which is attached hereto as
Exhibit A (the “Master Lease”). Capitalized terms herein not otherwise defined herein shall have
the same meanings as provided in the Master Lease.



     Sublandlord desires to sublease to Subtenant, and Subtenant desires to sublease from
Sublandlord a portion of the Master Premises consisting of the entire building located at 256 E.
Grand Avenue (the “Building”) containing approximately 31,392 rentable square feet of office and
laboratory as shown on the layout attached at Exhibit B hereto (the “Sublease Premises”) upon the
terms and conditions provided for herein.



     Now, Therefore, in consideration of the mutual covenants and conditions contained herein,
Sublandlord and Subtenant covenant and agree as follows:



Agreement




     1. Sublease Premises; Service Yard; FF&E License And Deemed Transfer. On and subject
to the terms and conditions below, Sublandlord hereby leases to Subtenant, and Subtenant hereby
leases from Sublandlord, the Sublease Premises. If Master Landlord grants its consent thereto,
Subtenant may, at its sole cost and expense, construct barriers, in a location to be agreed upon by
both Master Landlord and Sublandlord, to create an exterior service yard (the “Service Yard”).
Subtenant shall comply with all the terms of this Sublease and Master Lease relevant to the
construction of such Service Yard. In addition to subleasing the Sublease Premises to Subtenant,
Sublandlord also grants to Subtenant a license to use Sublandlord’s furniture, fixtures and
equipment located within the Sublease Premises (“FF&E”), a list of which is attached hereto as
Exhibit C. Subtenant shall accept the FF&E in their current condition AS IS and WITH ALL FAULTS
without any representation or warranty by Sublandlord. The license to use the FF&E shall run
concurrently with and be irrevocable until termination of this Sublease. Subtenant’s insurance as
required under the Sublease shall



 









 







cover the FF&E for its full replacement value, and Subtenant shall maintain the FF&E in good
condition during the term hereof. Upon expiration of the Term of this Sublease, title to that
portion of the FF&E listed in Section II of Exhibit C (the “Furniture”) that is not purchased by
Landlord pursuant to Section 9.2(g) of the Master Lease shall be deemed transferred to Subtenant
and Subtenant shall be solely responsible for removing it from the Sublease Premises.



     2. Term. The term of this Sublease (the “Term”) shall commence on the later of: (a)
November 15, 2005, or (b) the date Sublandlord obtains the consent of Master Landlord (the
“Commencement Date”), and shall expire, unless sooner terminated pursuant to any provision hereof,
on June 30, 2011 (the “Expiration Date”).



     3. Possession. If for any reason Sublandlord cannot deliver possession of the
Sublease Premises to Subtenant on the Commencement Date, Sublandlord shall not be subject to any
liability therefor, nor shall such failure affect the validity of this Sublease or the obligations
of Subtenant hereunder or extend the term hereof, provided that no rent shall be due hereunder
until possession of the Sublease Premises has been delivered to Subtenant.



     4. Rent. Commencing on March 1, 2006 (the “Rent Commencement Date”) and continuing
throughout the term of this Sublease, Subtenant shall pay monthly rent consisting of Base Rent and
Additional Rent (as defined below) (collectively, “Rent”) to Sublandlord in the following amounts:



     4.1 Base Rent. Beginning on the Rent Commencement Date, Subtenant shall pay to Sublandlord
monthly base rent (“Base Rent”) as follows:



	 	 	 
	Commencement Date – 2/28/06:

	 	$0.00 NNN
	3/1/06– 2/28/07:

	 	$47,250.00 NNN per month
	3/1/07 – 2/29/08:

	 	$72,829.44 NNN per month
	3/1/08 – 2/28/09:

	 	$75,014.32 NNN per month
	3/1/09 – 2/2810:

	 	$77,264.75 NNN per month
	3/1/10 – 2/2811:

	 	$79,582.70 NNN per month
	3/1/11 – 6/30/11:

	 	$81,970.18 NNN per month






     4.2 N/A



     4.3 Additional Rent; Subtenant’s Proportionate Share. Subtenant’s Proportionate Share shall
be calculated by dividing the square footage of the Sublease Premises by the square footage of the
Master Premises, and as of the Commencement Date, Subtenant’s Proportionate Share shall be 23%. In
addition to Base Rent, commencing on February 1, 2006 Subtenant shall also pay to Sublandlord its
Proportionate Share of all Operating Expenses (as the term “Operating Expenses” is defined in the
Master Lease) and all other costs payable by Sublandlord under the Master Lease (“Additional
Rent”). Additional Rent shall be payable to Sublandlord as and when payments are due from
Sublandlord pursuant to the Master Lease, but at least five (5) business days prior to the date
Sublandlord must pay such amounts to Master Landlord. This Section 4.3 sets forth the full extent
of Subtenant’s responsibility with respect to any Operating Expenses.



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     4.4 Direct Costs. Subtenant shall further pay to Sublandlord as Additional Rent any costs and
expenses applicable to the Sublease Premises which are paid directly by Sublandlord, including, but
not limited to, utilities, personal property taxes and real property taxes.



     4.5 Exclusions. Notwithstanding the foregoing, in the event any amounts payable by
Sublandlord to Master Landlord are (A) due to Subtenant’s breach of any provision of the Master
Lease, (B) due to Subtenant’s negligence or willful misconduct, or (C) are for the sole benefit of
Subtenant, then such amounts shall not be prorated between Sublandlord and Subtenant and shall be
the sole responsibility of Subtenant.



     4.6 Payment of Rent. If the Rent Commencement Date does not fall on the first day of a
calendar month, Base Rent for the first month for which Base Rent is due shall be prorated on a
daily basis based upon a calendar month. Rent shall be payable to Sublandlord in lawful money of
the United States, in advance, without prior notice, demand, or offset, on or before the first day
of each calendar month during the term hereof. All Rent shall be paid to Sublandlord at the
address specified for notices to Sublandlord in Section 14 below.



     4.7 Late Charge. If Subtenant fails to pay any rental or other amounts due to Sublandlord
hereunder before the fifth (5th) day after such amounts are due, such unpaid amount shall bear
interest for the benefit of Sublandlord at a rate equal to the lesser of fifteen percent (15%) per
annum or the maximum permitted by law, from the date due until the date of payment. In addition to
such interest, Subtenant shall pay to Sublandlord a late charge in an amount equal to six (6%)
percent of the delinquent amount not paid to Sublandlord within five days of the date such amounts
are due. Subtenant acknowledges that the late payments of rental or other amounts due from
Subtenant to Sublandlord will cause Sublandlord to incur costs not contemplated by this Sublease,
including, without limitation, late fees, interest, processing and accounting charges which may be
imposed on Sublandlord by the terms of the Master Lease. Subtenant further acknowledges that is it
extremely difficult and impractical to fix the exact amount of such costs and that the late charge
set forth in this Section represents a fair and reasonable estimate thereof. Acceptance of any late
charge by Sublandlord shall not constitute a waiver of Subtenant’s default with respect to overdue
Rent or other amounts, nor shall such acceptance prevent Sublandlord from exercising any other
rights and remedies available to it. Acceptance of Rent or other payments by Sublandlord shall not
constitute a waiver of late charge or interest accrued with respect to such Rent or other payments
or any prior installments thereof, nor of any other default by Subtenant, whether monetary or
non-monetary in nature, remaining uncured at the time of such acceptance of Rent or other payments.
The foregoing late charge and interest shall be in lieu of and not in addition to any late charge
and interest payable pursuant to the terms of the Master Lease.



     4.8 Payment of First Month’s Rent Upon Execution. Upon execution of this Sublease, Subtenant
shall deliver to Sublandlord the sum of Forty Seven Thousand Two Hundred Fifty Dollars
($47,250.00), representing the Base Rent for the first month following the Rent Commencement Date.
In the event that Sublandlord has not secured the consent of Master Landlord to this Sublease
within thirty (30) days following mutual execution hereof, then Subtenant shall have the right to
terminate this Sublease by delivery of written notice thereof to Sublandlord, in which event
Sublandlord shall restore all such sums to Subtenant within ten (10) days following delivery of
such notice of termination.



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     5. Security
Deposit. Upon execution of this Sublease, Subtenant shall deposit with
Sublandlord the sum of Ninety Five Thousand Dollars ($95,000,00) as a security deposit (“Security
Deposit”), in cash or, at Subtenant’s option, in the form of a letter of credit as more
specifically described in Section 5.1 below. Subtenant hereby grants to Sublandlord a security
interest in the Security Deposit, including but not limited to replenishments thereof.
If Subtenant fails to pay Rent or other charges when due under this Sublease, or fails to
perform any of its other obligations hereunder, Sublandlord may use or apply all or any portion of
the Security Deposit for the payment of any Rent or other amount then due hereunder and unpaid, for
the payment of any other sum for which Sublandlord may become obligated by reason of Subtenant’s
default or breach, or for any loss or damage sustained by Sublandlord as a result of Subtenant’s
default or breach. If Sublandlord so uses any portion of the Security Deposit, Subtenant shall
restore the Security Deposit to the full amount originally deposited within ten (10) days after
Sublandlord’s written demand. Sublandlord shall not be required to keep the Security Deposit
separate from its general accounts, and shall have no obligation or liability for payment of
interest on the Security Deposit. The Security Deposit, or so much thereof as had not theretofore
been applied by Sublandlord, shall be returned to Subtenant within thirty (30) days of the
expiration or earlier termination of this Sublease, provided Subtenant has vacated the Sublease
Premises.



     5.1 Letter of Credit. At Subtenant’s option, upon execution of this Sublease, it may post the
Security Deposit in the form of an unconditional, clean, irrevocable, standby letter of credit (the
"Letter of Credit”), payable on sight with the bearer’s draft in the initial amount of Ninety Five
Thousand Dollars ($95,000,00) (the “Initial Amount”) issued by and drawn on an institution
acceptable to Sublandlord (the “Issuing Bank”). The Letter of Credit shall permit partial drawings
and shall state that it shall be payable against sight drafts presented by Sublandlord, accompanied
by Sublandlord’s sworn statement that a default by Subtenant under this Sublease exists and is
continuing beyond the applicable cure period under this Sublease (including, without limitation,
the Subtenant becoming insolvent as set forth in Section 16.1(h) of the Master Lease), and that
said drawing is in accordance with the terms and conditions of this Sublease. No other document or
certification from Sublandlord shall be required to negotiate the Letter of Credit. Sublandlord
may designate any bank as Sublandlord’s advising bank for collection purposes and any sight drafts
for the collection of the Letter of Credit may be presented by the advising bank on Sublandlord’s
behalf.


The Letter of Credit shall be for an initial term of at least one (1) year and shall be acceptable
to Sublandlord, in its reasonable discretion, in both form and substance. The Letter of Credit
shall be automatically renewed, without amendment (except as hereinafter provided), for continuing
consecutive one (1) year (or longer) periods unless, at least thirty (30) days prior to any such
date of expiration, the issuer gives written notice to Sublandlord that the Letter of Credit will
not be renewed, in which case Sublandlord shall be entitled to draw the full amount of the Letter
of Credit. The Letter of Credit shall not expire until at least the date which is thirty (30) days
after the scheduled expiration date or earlier termination of this Sublease.



Upon a default by Subtenant beyond the applicable cure period under this Sublease, Sublandlord
shall be entitled to draw against the Letter of Credit in the amount of the delinquent Rent or
delinquent amount, expense, loss or damage that Sublandlord may suffer because of Subtenant’s
default. Upon Subtenant’s insolvency (as defined in Section 16.1(h) of the Master Lease),


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Sublandlord shall be entitled to draw against the entire amount of the Letter of Credit and any
excess amounts shall be held by Sublandlord as collateral for Sublease obligations. Sublandlord
shall not be required to exhaust its remedies against Subtenant before having recourse to the
Letter of Credit or to any other form of collateral held by Sublandlord or to any other remedy
available to Sublandlord at law or in equity.



The beneficiary designation in the Letter of Credit shall include Sublandlord and Sublandlord’s
“successors and/or assigns as their interests may appear” and the Letter of Credit shall be
assignable and shall include the Issuing Bank’s acknowledgment and agreement that the Letter of
Credit is assignable.




     6. Assignment
And Subletting. Subtenant may not assign, sublet, transfer, pledge,
hypothecate or otherwise encumber the Sublease Premises, in whole or in part, or permit the use or
occupancy of the Sublease Premises by anyone other than Subtenant, unless Subtenant has obtained
Sublandlord’s consent thereto (which shall not be unreasonably withheld) and the consent of Master
Landlord under the terms of the Master Lease. Regardless of Sublandlord’s consent, no subletting
or assignment shall release Subtenant of its obligations hereunder. Any rent or other
consideration payable to Subtenant pursuant to any sublease or assignment permitted by this
paragraph which is in excess of the Rent payable to Sublandlord pursuant hereto (“Sublease Bonus
Rent”) shall be paid divided equally between Sublandlord and Master Landlord, after payment to
Master Landlord of any amount required to be paid under the Master Lease and payment of the
expenses of subletting, including but not limited to real estate commissions, attorneys fees, and
costs incurred in connection with tenant improvements required to effectuate the sublease.
Notwithstanding anything to the contrary contained in this Sublease, so long as the net worth of
the Subtenant following the transfer is no less than that of the Subtenant immediately prior to the
transaction or on the date of this Sublease, whichever is greater, Subtenant may assign this
Sublease or sublet the Sublease Premises without Sublandlord’s consent (but with the consent of the
Master Landlord), to any entity which controls, is controlled by, or is under common control with
Subtenant; to any entity which results from a merger of, reorganization of, or consolidation with
Subtenant; or to any entity which acquires substantially all of the stock or assets of Subtenant,
as a going concern, with respect to the business that is being conducted in the Premises
(hereinafter each a “Permitted Transfer”).



     7. Condition
Of Sublease Premises. Subtenant agrees that (i) Sublandlord has made no
representations or warranties of any kind or nature whatsoever respecting the Sublease Premises,
their condition or suitability for Subtenant’s use; and (ii) Subtenant agrees to accept the
Sublease Premises “as is, where is,” with all faults, without any obligation on the part of
Sublandlord to modify, improve or otherwise prepare the Sublease Premises for Subtenant’s
occupancy.



     8. Use. Subtenant may use the Sublease Premises only for the purposes as allowed in
the Master Lease, and for no other purpose. Subtenant shall promptly comply with all applicable
statutes, ordinances, rules, regulations, orders, restrictions of record, and requirements in
effect during the term of this Sublease governing, affecting and regulating the Sublease Premises,
including but not limited to the use thereof. Subtenant shall not use or permit the use of the
Sublease Premises in a manner that will create waste or a nuisance, interfere with or disturb other
tenants in the Center or violate the provisions of the Master Lease. Subtenant



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acknowledges and agrees that the operation and use of the Sublease Premises may require that
Subtenant apply for and receive licenses and/or permits from various federal, state and local
governments, and Subtenant covenants and agrees to apply for and receive such licenses and/or
permits as are required. Subtenant shall provide to Sublandlord copies of any such licenses and/or
permits to the extent applicable to the Sublease Premises. Subtenant acknowledges, agrees and
covenants that its occupancy, operation and use of such Sublease Premises and/or its use and
handling of animals shall be in accordance with: (a) all applicable state and federal regulations;
(b) all licenses and permits that either Subtenant or Sublandlord has received or receives in the
future respecting such Sublease Premises; and (c) all policies and procedures Sublandlord has
reasonably promulgated respecting such Sublease Premises. In the event of any disagreement
concerning the interpretation of such licenses, permits, policies and/or procedures, the
determination of the employee of Sublandlord charged with ensuring compliance with such licenses,
permits, policies and/or procedures shall be controlling.



     9. Parking; Signage. Subtenant shall have Subtenant’s Proportionate Share of such
parking rights as Sublandlord may have in connection with the Sublease Premises pursuant to the
Master Lease. Subtenant shall have signage rights pursuant to Section 9.5 of the Master Lease,
which is incorporated by reference by Section 11 below.



     10. Subtenant’s Property. The term “Subtenant’s Property” shall mean all of the
following items, to the extent brought onto the Sublease Premises on or after the Commencement Date
by Subtenant: (i) movable personal property, office furniture and/or modular office furniture
systems, movable equipment and trade fixtures; (ii) lab benches, built-in fume hoods, plumbing
fixtures and other laboratory casework, but excluding air lines, plumbing, electrical wiring and
other similar systems associated with any of such laboratory casework and/or built-in fume hoods;
(iii) compressors, excluding air lines, plumbing, electrical wiring and other similar systems
associated with any of such compressors; (iv) vacuum pumps, excluding plumbing, electrical wiring,
and other similar systems associated with any of such vacuum pumps; (v) water purification systems
and/or deionized water systems, excluding plumbing, electrical wiring and other similar systems
associated with any of such water purification or deionized water systems; (vi) auxiliary
generators and transfer switches; (vii) telephone systems and desk sets, excluding wiring and
jacks; (viii)( computer network systems, excluding wiring and jacks; (ix) security systems,
excluding wiring and jacks; (x) cage and rack washers; (xi) glassware washers; (xiii) autoclaves;
(xiii) animal water systems, excluding plumbing, electrical wiring and other similar systems
associated with such animal water system; (xiv) freestanding coldrooms; and (xv) movable fume
hoods. Under no circumstances shall anything in this Sublease be construed to mean that any items
which either belong to the Master Landlord pursuant to the terms of the Master Lease or are subject
to the Master Landlord’s right to purchase pursuant to Section 9.2(b) of the Master Lease be deemed
to be included in the definition of “Subtenant’s Property” unless and until Master Landlord either
waives its purchase option pursuant to Section 9.2(g) of the Master Lease or directs the Subtenant
to remove such items. Subtenant shall have the right to remove at the termination or expiration of
this Sublease any or all of Subtenant’s Property, provided that Subtenant promptly repairs any
damage caused by its removal. Further, subject to the express written consent of the Master
Landlord (which consent shall be adequately reflected by Master Landlord’s consent to this
Sublease), Subtenant shall also have the right to use Subtenant’s Property as security for
third-party financing during the term of this Sublease, and Sublandlord agrees to cooperate in all
reasonable respects with any



6









 







such third-party financing sought by Subtenant against the security of Subtenant’s Property,
including recognition by Sublandlord of the lender’s rights, subject to reasonable conditions, to
foreclose upon and remove Subtenant’s Property upon a default by Subtenant under such financing.



     11. Incorporation Of Master Lease.



     11.1 Incorporated Provisions. As between Sublandlord and Subtenant, except as provided in
Sections 11.2 and 11.3 below, all of the terms and provisions of the Master Lease are incorporated
into and made a part of this Sublease, and the rights and obligations of the parties under the
Master Lease are hereby imposed upon the parties hereto with respect to the Sublease Premises, the
Sublandlord being substituted for the term “Landlord” in the Master Lease, the Subtenant being
substituted for the term “Tenant” in the Master Lease, provided, however, that the term “Landlord”
in the following sections of the Master Lease shall mean (i) Master Landlord, not Sublandlord:
Section 1.2, 9.2 (first full paragraph), 9.2(a), 10, 12.1(d), 17.1, 17.4 and 17.5 and (ii) both
Master Landlord and Sublandlord: Section 9.3. It is further understood that where reference is
made in the Master Lease to the “Premises,” the same shall mean the Sublease Premises as defined
herein; where reference is made to the “Commencement Date,” the same shall mean the Commencement
Date as defined herein; and where reference is made to the “Lease,” the same shall mean this
Sublease. The parties specifically agree that any provisions relating to any construction
obligations of “Landlord” under the Master Lease with respect to construction that occurred or was
to have occurred prior to the Commencement Date hereof, are hereby deleted. Anything in the Master
Lease to the contrary notwithstanding, the liability of Sublandlord for its obligations under this
Sublease is limited solely to Sublandlord’s interest in the Master Lease, and no personal liability
shall at any time be asserted or enforceable against any other assets of Sublandlord or against
Sublandlord’s stockholders, directors, officers or partners on account of any of Sublandlord’s
obligations or actions under this Sublease.



     11.2 Excluded Provisions. As between Sublandlord and Subtenant, the following Paragraphs of
the Master Lease are not incorporated herein: Sections 1.1(a), 1.3, 2.1, 2.3, 2.6, Article 3,
9.2(b), 9.2(c), 9.2(d), 9.2(e), 9.2(f), 9.2 (g), 13, 15.1, 15.2, 18.1, 19.11, 19.15 and 19.16, and
Exhibit C.



     11.3 Compliance With Master Lease. Subtenant hereby assumes and agrees to perform for
Sublandlord’s benefit, during the term of this Sublease, all of Sublandlord’s obligations with
respect to the Sublease Premises under the Master Lease, except as otherwise provided herein.
However, the obligation to pay Rent and Additional Rent to Master Landlord under the Master Lease
shall be considered performed by Subtenant to the extent and in the amount Rent and Additional Rent
are paid to Sublandlord in accordance with Section 4 of this Sublease. Subtenant shall not commit
or permit to be committed any act or omission which violates any term or condition of the Master
Lease. Notwithstanding anything to the contrary contained herein, this Sublease shall be subject
and subordinate to all of the terms of the Master Lease and Master Landlord shall have all rights
in respect of the Master Lease and the Master Premises as set forth therein.



     11.4 Status of Master Lease. As of the date hereof, Sublandlord represents and warrants to
Subtenant that, to the best of Sublandlord’s knowledge, the Master Lease is in full



7









 







force and effect and Sublandlord has neither given nor received a currently effective notice of
default under the Master Lease.



     11.5 Termination. If the Master Lease terminates pursuant to any unilateral right granted to
the Master Landlord or as a result of Sublandlord exercising any right to terminate the Master
Lease in the event of the partial or total damage, destruction, or condemnation of the Master
Premises or the Building or Center of which the Master Premises are a part, this Sublease will
terminate and the parties will be relieved of any further liability or obligation under this
Sublease. However, if the Master Lease terminates as a result of a default or breach by
Sublandlord or Subtenant under this Sublease or the Master Lease, the defaulting party will be
liable to the nondefaulting party for the damage suffered as a result of the termination.



     11.6 Sublandlord’s Failure to Cure. Except in circumstances where a termination of the Master
Lease is permitted under Section 11.5 above, Sublandlord shall take all actions necessary to
maintain the Master Lease in good standing and effect, and shall promptly cure any default
thereunder. If Sublandlord fails to cure any default by Sublandlord in the performance of its
obligations, covenants and agreements under this Sublease Agreement, including without limitation
Sublandlord’s obligation to perform its obligations under the Master Lease, either within five (5)
days in the case of a Rent payment default under the Master Lease, or within thirty (30) days after
written notice of such default from Subtenant or Master Landlord in the case of other defaults
(unless in the case of a default the cure for which reasonably takes more than 30 days, Sublandlord
commences the cure within such 30 day period and diligently prosecutes such cure to completion),
Subtenant shall have the right, but not the obligation, to cure any such default and to thereafter
be reimbursed by Sublandlord for the reasonable costs incurred in effecting such cure and by reason
of such default by Sublandlord.



     12. Insurance. Subtenant shall be responsible for compliance with the insurance
provisions of the Master Lease as they relate to the Sublease Premises. Such insurance shall
insure the performance by Subtenant of its indemnification obligations hereunder and shall name
Master Landlord and Sublandlord as additional insureds. All insurance required under this Sublease
shall contain an endorsement requiring thirty (30) days written notice from the insurance company
to Subtenant and Sublandlord before cancellation or change in the coverage, insureds or amount of
any policy. Subtenant shall provide Sublandlord with certificates of insurance evidencing such
coverage prior to the commencement of this Sublease.



     13. Default. In addition to defaults described in the Master Lease (which provisions
are incorporated by reference in Section 11 above), failure of Subtenant to make any payment of
Rent when due hereunder shall constitute an event of default hereunder. If Subtenant’s default
causes Sublandlord to default under the Master Lease, Subtenant shall defend, indemnify and hold
Sublandlord harmless from all damages, costs (including reasonable attorneys’ fees), liability,
expenses or claims to the extent relating to such default.



     14. Notices. As between Sublandlord and Subtenant, the addresses specified in the
Master Lease for receipt of notices to Sublandlord is deleted and for the purposes of this
Sublease, notices to the parties shall be delivered at the following addresses and in accordance
with the provisions of Section 19.1 of the Master Lease:



8









 






			
	To Sublandlord at:	 	Millennium Pharmaceuticals, Inc.

40 Landsdowne

Cambridge, Massachusetts 02139

Attn: Kenneth Doyle
	 	 	 
	To Subtenant at:	 	Cytokinetics, Inc.

280 East Grand Avenue

South San Francisco, CA 94080

Attn: Sharon Surrey-Barbari
	 	 	 
	 	 	 
	After Commencement

Date:	 	
Same as above






     15. Sublandlord’s
Obligations. To the extent that the provision of any services or
the performance of any maintenance or any other act respecting the Sublease Premises, the Master
Premises or Building is the responsibility of Master Landlord (collectively “Master Landlord
Obligations”), upon Subtenant’s request, Sublandlord shall make reasonable efforts to cause Master
Landlord to perform such Master Landlord Obligations, provided, however, that in no event shall
Sublandlord be liable to Subtenant for any liability, loss or damage whatsoever in the event that
Master Landlord should fail to perform the same, nor shall Subtenant be entitled to withhold the
payment of Rent or terminate this Sublease. As between Sublandlord and Subtenant, it is expressly
understood that the services and repairs which are incorporated herein by reference, will in fact
be furnished by Master Landlord and not by Sublandlord. In addition, Sublandlord shall not be
liable for any maintenance, restoration (following casualty or destruction) or repairs in or to the
Building or the Sublease Premises, other than its obligation hereunder to use reasonable efforts to
cause Master Landlord to perform its obligations under the Master Lease. Except as otherwise
provided herein, Sublandlord shall have no other obligations to Subtenant with respect to the
Sublease Premises or the performance of the Master Landlord Obligations.



     16. Early
Termination Of Master Lease. Sublandlord shall not amend or otherwise
modify the Master Lease in a manner that would adversely affect the Sublease Premises, Subtenant’s
use or occupancy thereof (or its use of the Common Areas), or Sublandlord’s or Subtenant’s rights
or obligations under this Sublease Agreement, except that to the extent that the Master Lease
grants Sublandlord any discretionary right to terminate the Master Lease due to casualty or
condemnation, Sublandlord may exercise such rights during the Term of this Sublease in its sole
discretion. Notwithstanding the foregoing, Sublandlord may terminate the Master Lease for reasons
other than casualty or condemnation provided that Sublandlord delivers to Subtenant a
nondisturbance agreement in form reasonably acceptable to Subtenant and executed by Master Landlord
or an assignment of Sublandlord’s interest as Sublandlord under this Sublease pursuant to which
Master Landlord assumes all obligations of Sublandlord hereunder. If the Master Lease should
terminate prior to the expiration of this Sublease for any reason, Sublandlord shall have no
liability to Subtenant on account of such termination, except as expressly set forth in Section
11.5 above.



9









 





     17. Consent Of Master Landlord And Sublandlord. If Subtenant desires to take any
action which requires the consent or approval of Sublandlord pursuant to the terms of this
Sublease, prior to taking such action, including, without limitation, making any alterations, then,
notwithstanding anything to the contrary herein, (a) Sublandlord shall have the same rights of
approval or disapproval as Master Landlord has under the Master Lease, and (b) Subtenant shall not
take any such action until it obtains the consent of Sublandlord and Master Landlord, as may be
required under this Sublease or the Master Lease. This Sublease shall not be effective unless and
until any required written consent of the Master Landlord shall have been obtained.



     18. Indemnity. Subtenant shall indemnify, defend, protect, and hold Sublandlord and
Master Landlord harmless from and against all actions, claims, demands, costs, liabilities, losses,
reasonable attorneys’ fees, damages, penalties, and expenses (collectively “Claims”) which may be
brought or made against Sublandlord or Master Landlord or which Sublandlord or Master Landlord may
pay or incur to the extent caused by (i) a breach of this Sublease by Subtenant, (ii) any violation
of law by Subtenant or its employees, agents, contractors or invitees (collectively, “Agents”)
relating to the use or occupancy of the Sublease Premises, (iii) any act or omission by Subtenant
or its Agents resulting in contamination of any part or all of the Master Premises by Hazardous
Materials, or (iv) the negligence or willful misconduct of Subtenant or its Agents.



     19. Brokers
. Each party hereto represents and warrants that it has dealt with no
broker in connection with this Sublease and the transactions contemplated herein, except BT
Commercial, representing Subtenant, and CB Richard Ellis, representing Sublandlord (the “Brokers”).
Pursuant to a separate agreement, Sublandlord shall pay the brokerage commission due to the
Brokers in connection with this Sublease. Each party shall indemnify, protect, defend and hold
the other party harmless from all costs and expenses (including reasonable attorneys’ fees) arising
from or relating to a breach of the foregoing covenant, representation and warranty.



     20. Surrender Of Sublease Premises. As between Sublandlord and Subtenant, in lieu of
any obligation or liability set forth in the Master Lease, upon the termination of the Sublease,
Subtenant shall surrender the Sublease Premises to Sublandlord broom-clean and in as good a
condition as on the Commencement Date, ordinary wear and tear excepted. In addition, Subtenant
shall remove any alterations, additions and improvements constructed by Subtenant which Master
Landlord has indicated, pursuant to Section 9.1 of the Master Lease, are required to be removed,
prior to the termination of the Sublease and restore the Sublease Premises to its prior condition,
ordinary wear and tear excepted, repairing all damage caused by or related to any such removal, all
at Subtenant’s expense. Subtenant shall have no obligation to remove any alterations, additions
and improvements constructed prior to the date of this Sublease.



     21. No Third Party Rights. The benefit of the provisions of this Sublease is
expressly limited to Sublandlord and Subtenant and their respective permitted successors and
assigns. Under no circumstances will any third party be construed to have any rights as a third
party beneficiary with respect to any of said provisions.



     22. Counterparts. This Sublease may be signed in two or more counterparts, each of
which shall be deemed an original and all of which shall constitute one agreement.



10









 





     23. Damage
And Destruction.



          23.1 Termination of Master Lease. If the Sublease Premises is damaged or destroyed and Master
Landlord or Sublandlord exercises any option either may have to terminate the Master Lease, if any,
this Sublease shall terminate as of the date of the casualty. If as a result of damage or
destruction of the Sublease Premises, the time estimated to restore the Sublease Premises exceeds
one year, Subtenant and Sublandlord shall each have the right to terminate this Sublease on written
notice to the other given within thirty (30) days after determination of the amount of time to
restore the Sublease Premises, which termination shall be effective as of the date of the casualty.



          23.2 Continuation of Sublease. If the Master Lease or this Sublease is not terminated
following any damage or destruction as provided in Section 23.1 above, this Sublease shall remain
in full force and effect, and Rent shall be abated in proportion to the extent to which such damage
or destruction impairs Subtenant’s use of or access to the Sublease Premises.



     24. Eminent
Domain. If all or any part of the Sublease Premises is condemned by
eminent domain, inversely condemned or sold in lieu of condemnation, for any public or a
quasi-public use or purpose, this Sublease may be terminated as of the date of title vesting in
such proceeding by either party, and Base Monthly Rent shall be adjusted to the date of
termination.



     In Witness Whereof, the parties have executed this Sublease as of the date first written
above.





Sublandlord:



Millennium Pharmaceuticals, Inc. a Delaware corporation



By: /s/
Marsha H.
Fanucci
 




Name: Marsha H. Fanucci
 




Title:
Chief Financial
Officer
 




And By:
/s/ Mark
Hernon

 




Name: Mark
Hernon
 




Title: VP-IT and Operations
 








Subtenant:



Cytokinetics, Incorporated, a Delaware corporation



By: /s/ James H. Sabry
 


Name: James H. Sabry, M.D., Ph.D.



Title: President and Chief Executive Officer



And By: /s/ Sharon Surrey-Barbari
 




Name: Sharon Surrey-Barbari



Title: Senior Vice President, Finance and

Chief Financial
Officer                       









11









 





CONSENT OF MASTER LANDLORD




     BRITANNIA POINTE GRAND LIMITED PARTNERSHIP, a Delaware limited partnership (“Master
Landlord”), as landlord under the Lease dated as of July 1, 2001 (the “Master Lease”) with COR THERAPEUTICS, INC., a Delaware corporation (“Tenant”) as tenant,
covering premises which include the building commonly known as 256 East Grand Avenue, South San
Francisco, California (the “Building”), consents to the proposed Sublease dated November
23rd, 2005 (the “Sublease”) between MILLENNIUM PHARMACEUTICALS, INC., a Delaware
corporation and the successor in interest to Tenant under the Master Lease (“Sublandlord”)
as sublandlord and CYTOKINETICS, INCORPORATED, a Delaware corporation (“Subtenant”) as
subtenant, covering the entire Building as more particularly set forth in the Sublease (the
“Sublease Premises”), and to all of the terms and conditions contained therein
(except as otherwise expressly noted herein), subject to the following:



     1. Nothing contained in the Sublease (including, but not limited to, the incorporation into
the Sublease, pursuant to Section 11.1 of the Sublease, of certain provisions of the Master Lease
and the substitution of the words “Master Landlord” or “Master Landlord and Sublandlord” for the
term “Landlord” with respect to some of those incorporated provisions) shall be construed to amend
the Master Lease, nor to limit or impair in any way Master Landlord’s rights and remedies
thereunder, nor to impose any obligations or liabilities on Master Landlord, nor to create any
direct contractual or other relationship between Master Landlord and Subtenant, any direct
obligation or liability of Master Landlord to Subtenant or any direct right or remedy of Subtenant against Master Landlord, in each instance except to the extent (if any)
expressly set forth in this Consent. Without limiting the generality of the foregoing, (a) this
consent shall not constitute an approval or acceptance of any term or provision of the Sublease
that conflicts with or is inconsistent with any provision of the Master Lease, except to the extent
(if any) expressly set forth in this Consent; and (b) Master Landlord expressly consents to
Subtenant’s right to use Subtenant’s Property (as defined
in the Sublease) as security for
third-party financing during the term of the Sublease, as set forth in the final sentence of
Section 10 of the Sublease.



     2. To the extent Master Landlord’s consent or approval is required under the Master Lease or
otherwise, Master Landlord is not hereby consenting to or approving, or waiving its right of consent
or approval with respect to, (i) any alternations or repairs to be undertaken by either Tenant or
Subtenant in the Building pursuant to or in connection with the Sublease (any required approval of
any such alterations or repairs, including (but not limited to) the construction of a Service Yard
as contemplated in the second sentence of Section 1 of the Sublease, will be considered only upon
receipt of a formal request accompanied by appropriate drawings, a detailed work specification and
such other information as Master Landlord may reasonably request under the terms of the Master
Lease); (ii) any further subleasing by Subtenant of space in the Building, or any other further
subleasing by Tenant of any portion of the premises covered by the Master lease; (iii) any use of
hazardous, radioactive or toxic materials in the Building, except in compliance with all applicable
provisions of the Master Lease and with Master Landlord’s express written consent (in response to a
specific request) to the extent required under the Master Lease; or (iv) any signage on or about
the Building that may be requested by or on behalf of Subtenant (in which regard, Master Landlord
expressly does not consent to or approve the second sentence of Section 9 of the Sublease, and
hereby advises






 









 



Sublandlord and Subtenant that any required approval of any signage requested by or on behalf of
Subtenant, including but not limited to any replacement of existing signage, will be considered
only upon receipt of a formal request accompanied by appropriate drawings and specifications and
such other information as Master Landlord may reasonably request under the terms of the Master
Lease).




     3. Without limiting the generality of the foregoing, (a) the third sentence of Section 15 of
the Sublease shall not be construed as creating any direct obligation or liability of Master
Landlord to Subtenant or any direct right or remedy of Subtenant against Master Landlord; and (b)
the second sentence of Section 16 of the Sublease shall not be construed as imposing any obligation
on Master Landlord to execute and deliver any nondisturbance agreement or any assumption of
Sublandlord’s obligations as described in such sentence, and Master Landlord may exercise its sole
and absolute discretion in responding to any request by the parties for any such execution and
delivery.



     4. All use of parking space by Subtenant pursuant to the Sublease shall be on a nonexclusive
basis and shall be subject to all parking-related provisions in the Master Lease, and Master
Landlord is not hereby consenting to any designation or reservation of specific parking spaces on
the subject property for use by Subtenant.



     5. Master Landlord acknowledges and agrees that the waiver of subrogation contained in Section
12.4 of the Master Lease shall apply as between Master Landlord and Subtenant, and Subtenant by its
signature below likewise agrees that the waiver of subrogation contained in Section 12.4 of the
Master Lease shall apply as between Master Landlord and Subtenant. In addition, Subtenant by its
signature below agrees that the terms of the last sentence of Section 10.2(c) of the Master Lease
shall apply as between Master Landlord and Subtenant, as well as between Sublandlord and Subtenant.



     6. Master Landlord shall not incur or be subject to any liability for any brokerage commissions
in connection with the Sublease.



     7. This Consent is conditional upon, and shall become effective only upon, Master Landlord’s
receipt of (a) copy of this Consent signed by Subtenant and Tenant, and (b) a copy of the complete
executed Sublease, including all exhibits referenced therein, in the form approved by Master
Landlord.



[rest of page intentionally left blank]




-2- 








 




     IN WITNESS WHEREOF, Master Landlord has executed this Consent as of the date set forth below
(subject to the conditions set forth in such Consent), and Subtenant and Tenant have executed this
Consent to evidence their acceptance of and agreement to the conditions set forth in this Consent.



Master Landlord:




BRITANNIA POINTE GRAND LIMITED

PARTNERSHIP, a Delaware limited

partnership



	 	 	 
	By:

	 	Slough Pointe Grand Incorporated, a
	 

	 	Delaware corporation, General Partner






	 	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jonathan M. Bergschneider	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Jonathan M. Bergschneider

Vice President	 	 






Date: November 28, 2005









Subtenant:




CYTOKINETICS, INCORPORATED, a

Delaware corporation






By: /s/
Sharon Surry
Barbari                   
                    

Its:  Senior Vice President,

       Finance and Chief Financial Officer




Date: November 23, 2005












Tenant:




MILLENIUM PHARMAEUTICALS,Tenant

INC., a Delaware corporation and successor-

in-interest to COR THERAPEUTICS, INC., a

Delaware corporation, under the Master Lease





By: /s/
Marsha H.
Fanucci                   
                    

Its:  CFO




Date: November 29, 2005





 








 







EXHIBIT A




Master Lease




13









 





LEASE




	 	 	 
	Landlord:

	 	Britannia Pointe Grand Limited Partnership
	 
	 	 
	Tenant:

	 	COR Therapeutics, Inc.
	 
	 	 
	Date:

	 	July 1, 2001






TABLE
OF CONTENTS




	 	 	 	 	 
	1. PROPERTY 
	 	 	1	 
	1.1 Lease of Premises and Phase I Property; Existing Lease 
	 	 	1	 
	1.2 Landlord’s Reserved Rights 
	 	 	1	 
	1.3 First Refusal Right 
	 	 	2	 
	 
	 	 	 	 
	2. TERM 
	 	 	3	 
	2.1 Term 
	 	 	3	 
	2.2 [Omitted.] 
	 	 	3	 
	2.3 Condition of Premises; Tenant Improvements 
	 	 	3	 
	(a) “As Is” Condition 
	 	 	3	 
	(b) New Mezzanine Area 
	 	 	4	 
	(c) New Lobby Area 
	 	 	4	 
	2.4 [Omitted.] 
	 	 	5	 
	2.5 Holding Over 
	 	 	5	 
	2.6 Option To Extend Term
	 	 	5	 
	 
	 	 	 	 
	3. RENTAL 
	 	 	6	 
	3.1 Minimum Rental 
	 	 	6	 
	(a) Rental Amounts 
	 	 	6	 
	(b) Rental Adjustment Due to Change in Square Footage 
	 	 	6	 
	(c) Rental Amounts During First Extended Term 
	 	 	7	 
	(d) Rental Amounts During Second Extended Term 
	 	 	7	 
	3.2 Late Charge 
	 	 	8	 
	 
	 	 	 	 
	4. [Omitted.] 
	 	 	8	 
	 
	 	 	 	 
	5. [Omitted.] 
	 	 	8	 
	 
	 	 	 	 
	6. TAXES 
	 	 	8	 
	6.1 Personal Property 
	 	 	8	 
	6.2 Real Property 
	 	 	8	 
	 
	 	 	 	 
	7. OPERATING EXPENSES 
	 	 	9	 
	7.1 Payment of Operating Expenses 
	 	 	9	 
	7.2 Definition Of Operating Expenses 
	 	 	10	 
	7.3 Determination Of Operating Expenses 
	 	 	12	 
	7.4 Final Accounting For Lease Year 
	 	 	12	 
	7.5 Proration 
	 	 	13	 
	 
	 	 	 	 
	8. UTILITIES 
	 	 	13	 
	8.1 Payment 
	 	 	13	 
	8.2 Interruption 
	 	 	13	 






 









 






	 	 	 	 	 
	9. ALTERATIONS; SIGNS 
	 	 	13	 
	9.1 Right To Make Alterations 
	 	 	13	 
	9.2 Title To Alterations 
	 	 	14	 
	(a) Landlord’s Property 
	 	 	14	 
	(b) Tenant’s Property 
	 	 	14	 
	(c) Removal of Tenant’s Property at End of Term 
	 	 	14	 
	(d) Items Located in Premises Outside the Phase I Property 
	 	 	15	 
	(e) Tenant’s Rights to Modify, Etc. and Remove Tenant’s Property 
	 	 	15	 
	(f) Tenant’s Right to Encumber Tenant’s Property 
	 	 	15	 
	(g) Landlord’s Purchase Option 
	 	 	15	 
	9.3 Tenant Fixtures 
	 	 	15	 
	9.4 No Liens 
	 	 	16	 
	9.5 Signs 
	 	 	16	 
	 
	 	 	 	 
	10. MAINTENANCE AND REPAIRS 
	 	 	16	 
	10.1 Landlord’s Work 
	 	 	16	 
	10.2 Tenant’s Obligation For Maintenance 
	 	 	17	 
	(a) Good Order, Condition And Repair 
	 	 	17	 
	(b) Landlord’s Remedy 
	 	 	17	 
	(c) Condition Upon Surrender 
	 	 	17	 
	 
	 	 	 	 
	11. USE OF PREMISES 
	 	 	18	 
	11.1 Permitted Use 
	 	 	18	 
	11.2 [Omitted.] 
	 	 	18	 
	11.3 No Nuisance 
	 	 	18	 
	11.4 Compliance With Laws 
	 	 	18	 
	11.5 Liquidation Sales 
	 	 	18	 
	11.6 Environmental Matters 
	 	 	19	 
	 
	 	 	 	 
	12. INSURANCE AND INDEMNITY 
	 	 	22	 
	12.1 Insurance 
	 	 	22	 
	12.2 Quality Of Policies And Certificates 
	 	 	23	 
	12.3 Workers’ Compensation 
	 	 	24	 
	12.4 Waiver Of Subrogation 
	 	 	24	 
	12.5 Increase In Premiums 
	 	 	24	 
	12.6 Indemnification 
	 	 	24	 
	12.7 Blanket Policy 
	 	 	25	 
	 
	 	 	 	 
	13. SUBLEASE AND ASSIGNMENT 
	 	 	25	 
	13.1 Assignment of Lease and Sublease of Premises 
	 	 	25	 
	13.2 Rights Of Landlord 
	 	 	26	 
	 
	 	 	 	 
	14. RIGHT OF ENTRY AND QUIET ENJOYMENT 
	 	 	26	 
	14.1 Right Of Entry 
	 	 	26	 
	14.2 Quiet Enjoyment 
	 	 	27	 
	 
	 	 	 	 
	15. CASUALTY AND TAKING 
	 	 	27	 
	15.1 Damage or Destruction 
	 	 	27	 
	15.2 Condemnation 
	 	 	28	 
	15.3 Reservation Of Compensation 
	 	 	29	 
	15.4 Restoration Of Improvements 
	 	 	30	 
	 
	 	 	 	 
	16. DEFAULT 
	 	 	30	 
	16.1 Events Of Default 
	 	 	30	 
	(a) [Omitted.] 
	 	 	30	 
	(b) Nonpayment 
	 	 	30	 
	(c) Other Obligations 
	 	 	30	 
	(d) General Assignment 
	 	 	30	 






- ii -









 






	 	 	 	 	 
	(e) Bankruptcy 
	 	 	30	 
	(f) Receivership 
	 	 	31	 
	(g) Attachment 
	 	 	31	 
	(h) Insolvency 
	 	 	31	 
	16.2 Remedies Upon Tenant’s Default 
	 	 	31	 
	16.3 Remedies Cumulative 
	 	 	32	 
	 
	 	 	 	 
	17. SUBORDINATION, ATTORNMENT AND SALE 
	 	 	32	 
	17.1 Subordination To Mortgage 
	 	 	32	 
	17.2 Sale Of Landlord’s Interest 
	 	 	33	 
	17.3 Estoppel Certificates 
	 	 	33	 
	17.4 Subordination to CC&R’s 
	 	 	33	 
	17.5 Mortgagee Protection 
	 	 	33	 
	 
	 	 	 	 
	18. SECURITY 
	 	 	34	 
	18.1 Deposit 
	 	 	34	 
	 
	 	 	 	 
	19. MISCELLANEOUS 
	 	 	34	 
	19.1 Notices 
	 	 	34	 
	19.2 Successors And Assigns 
	 	 	35	 
	19.3 No Waiver
	 	 	35	 
	19.4 Severability 
	 	 	35	 
	19.5
Litigation Between Parties 
	 	 	35	 
	19.6 Surrender
	 	 	35	 
	19.7 Interpretation 
	 	 	36	 
	19.8 Entire Agreement
	 	 	36	 
	19.9 Governing Law 
	 	 	36	 
	19.10 No Partnership 
	 	 	36	 
	19.11 Financial Information 
	 	 	36	 
	19.12 Costs 
	 	 	37	 
	19.13 Time 
	 	 	37	 
	19.14 Rules And Regulations 
	 	 	37	 
	19.15 Brokers 
	 	 	37	 
	19.16 Memorandum Of Lease 
	 	 	37	 
	19.17 Corporate Authority 
	 	 	37	 
	19.18 Execution and Delivery 
	 	 	37	 
	19.19 Survival 
	 	 	37	 
	19.20 Parking 
	 	 	37	 






EXHIBITS




	 	 	 
	EXHIBIT A

	 	Real Property Description
	 
	 	 
	EXHIBIT A-1

	 	Phase I Property (Plan)
	 
	 	 
	EXHIBIT B

	 	Site Plan
	 
	 	 
	EXHIBIT C

	 	Future Entrance Lobby






- iii -









 






LEASE




     THIS
LEASE (“Lease”) is made and entered into as of July 1, 2001, by and between BRITANNIA POINTE
GRAND LIMITED PARTNERSHIP, a Delaware limited partnership
(“Landlord”), and COR THERAPEUTICS, INC.,
a Delaware corporation (“Tenant”).



THE PARTIES AGREE AS FOLLOWS:




1. PROPERTY 




1.1 Lease of Premises and Phase I Property; Existing Lease.




          (a) Landlord leases to Tenant and Tenant hires and leases from Landlord, on the terms,
covenants and conditions hereinafter set forth, the following office and laboratory premises
(hereinafter collectively called the “Premises”) which consist of approximately 136,242 square feet
and are located on the real property described as the “Phase
I Property” in Exhibit A
attached hereto and depicted as such in Exhibit A-1
attached hereto (the “Phase I Property”) in South San Francisco, California: (i) the one-story building commonly known as 256
East Grand Avenue; (ii) the two-story building commonly known as 260 East Grand Avenue; (iii)
Suites 20, 26, 35, 45, 50 and 70 in the one-story building commonly known as 250 East Grand Avenue;
and (iv) the westerly portion of the two-story building commonly known as 270 East Grand Avenue.
The Phase I Property is part of the office and research and development center commonly known as
Britannia Pointe Grand Business Park located at East Grand Avenue and Harbor Way in the City of
South San Francisco, County of San Mateo, State of California on the real property which is more
particularly described as the “Center” in Exhibit A attached hereto (the “Center”). The
location of the Premises in the Center is depicted on the site plan attached hereto as Exhibit
B (the “Site Plan”). The Premises and other improvements presently existing on the Phase I
Property are sometimes referred to collectively herein as the “Phase I Improvements.” The
parking areas, driveways, sidewalks, landscaped areas and other portions of the Center that lie
outside the exterior walls of the buildings now or hereafter existing from time to time in the
Center, as depicted in Exhibit A-1 and in the Site Plan and as hereafter modified by
Landlord from time to time in accordance with the provisions of this Lease, are sometimes referred
to herein as the “Common Areas.” Tenant already occupies the entire Premises pursuant to a Standard
Form Industrial Net Lease dated as of September 23, 1988 between NC Land Associates Limited
Partnership, a Delaware limited partnership, and COR Therapeutics, Inc., a California corporation,
as amended from time to time (the “Existing Lease”). Effective July 1, 2001, this Lease supersedes
the Existing Lease for all purposes, Tenant’s continuing occupancy of the Premises shall be
governed solely by the provisions of this Lease, and the Existing Lease shall be of no further
force or effect, except that the rights and obligations of Landlord and Tenant with respect to the
Premises for periods prior to July 1, 2001 shall continue to be governed by the Existing Lease.




          (b) As an appurtenance to Tenant’s leasing of the Premises pursuant to Section 1.l(a),
Landlord hereby grants to Tenant, for the benefit of Tenant and its employees, suppliers, shippers,
customers and invitees, during the term of this Lease, the non-exclusive right to use, in common
with others entitled to such use, (i) those portions of the Common Areas improved from time to time
for use as parking areas, driveways, sidewalks, landscaped areas, or for other common purposes, and
(ii) all access easements and similar rights and privileges relating to or appurtenant to the
Center and created or existing from time to time under any access easement agreements, declarations
of covenants, conditions and restrictions, or other written agreements now or hereafter of record
with respect to the Center, subject however to any limitations applicable to such rights and
privileges under applicable law, under this Lease and/or under the written agreements creating such
rights and privileges.




     1.2 Landlord’s Reserved Rights. To the extent reasonably necessary to permit
Landlord to exercise any rights of Landlord and discharge any obligations of Landlord under this
Lease, Landlord shall have, in addition to the right of entry set forth in Section 16.1 hereof, the



 









 




following rights: (i) to make changes to the Common Areas, including, without limitation,
changes in the location, size or shape of any portion of the Common Areas, and to relocate parking
spaces in the Center and in the Common Areas, provided that except on a temporary basis to
the extent permitted under clause (ii) of this sentence, (A) Landlord shall not materially decrease
the number of such parking spaces in areas of the Phase I Property generally adjacent to the
Premises as shown on Exhibit A-1 and on the Site Plan, and (B) Landlord shall not permit
the ratio of parking spaces in the Center to fall below 3.0 spaces for each 1,000 square feet of
space in the various buildings existing from time to time in the Center (except to the extent, if
any, that such ratio may fall below 3.0 spaces per 1,000 square feet by an amount solely reflecting
the creation of additional square footage in the Center, without additional parking and subject to
receipt of any required governmental variances or approvals, by reason of the construction of the
mezzanine area contemplated in Section 2.3(b) and/or the new lobby area contemplated in Section
2.3(c)); (ii) to close temporarily any of the Common Areas for maintenance or other reasonable
purposes, provided that reasonable parking and reasonable access to the Premises remain
available; (iii) to construct, alter or add to other buildings and Common Area improvements in the
Center (including, but not limited to, construction of site improvements, buildings and Common Area
improvements on portions of the Center and/or on adjacent properties owned by Landlord from time to
time); (iv) to build in areas adjacent to the Center and to add such areas to the Center or operate
such areas, for maintenance, access, parking and other purposes, on an integrated basis with the
Phase I Property and/or the Center; (v) to use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Center or any portion thereof or to any adjacent
properties owned by Landlord from time to time; and (vi) to do and perform such other acts with
respect to the Common Areas and the Center as may be necessary or appropriate; provided,
however, that notwithstanding anything to the contrary in this Section 1.2, Landlord’s exercise of
its rights hereunder shall not cause any material diminution of Tenant’s rights, nor any material
increase of Tenant’s obligations, under this Lease or with respect to the Phase I Improvements.




     1.3 First Refusal Right.



          (a) For purposes of this Section 1.3, the term “First Refusal Space” shall mean, as
the context may require, any one or more of the following four spaces individually or all four of
such spaces collectively: (i) the space of approximately 10,462 square feet commonly known as 250
East Grand Avenue, Suite 65 and presently occupied by Farmers Insurance; (ii) the space of
approximately 6,489 square feet commonly known as 250 East Grand Avenue, Suite 90 and presently
occupied by Gryphon Sciences; (iii) the space of approximately 24,725 presently occupied by
ViroLogic, Inc. on the easterly end of the building commonly known as 270 East Grand Avenue; and
(iv) the building commonly known as 280 East Grand Avenue, presently occupied by Cytokinetics,
Inc., and containing approximately 50,195 square feet (the “280 East Grand Building”). The
four spaces constituting the First Refusal Space are designated as such on the Site Plan.




          (b) Landlord shall not lease all or any portion of the First Refusal Space at any time
during the term of this Lease (including any duly elected extension terms) except in compliance
with the procedure set forth in Section 1.3(c) hereof; provided, however, that the
foregoing restriction shall not apply during any period in which Tenant is in default (beyond any
applicable cure periods) under this Lease; provided further, that the foregoing restriction
shall not apply to any renewal or extension options duly elected by the applicable tenant or any
successor tenant pursuant to a contractual renewal or extension option set forth in the lease
documents governing the respective portions of the First Refusal Space on the date of this Lease,
but such restriction shall apply to any future lease amendments or grants of renewal or extension
rights with respect to any portion of the First Refusal Space that would have the effect of either
extending the term of any existing occupancy of any portion of the First Refusal Space beyond the
term presently specified in the lease documents governing such portion, or granting renewal or
extension rights beyond those presently set forth in the applicable lease documents with respect to
any portion of the First Refusal Space; and provided further, that the foregoing
restriction shall not apply to any leasing, subleasing or other occupancy by Raven Pharmaceuticals,
Inc. of all or any portion of the space described in clause (iii) of Section 1.3(a),




- 2 -









 







whether pursuant to the sublease presently in effect between ViroLogic, Inc. and Raven
Pharmaceuticals,
Inc. or otherwise, provided that such leasing, subleasing or other occupancy by
Raven Pharmaceuticals, Inc. shall not in any event be authorized to extend beyond June 30, 2003.




          (c) If Landlord intends during the term of this Lease (including any duly elected
extension terms) to lease all or any portion of the First Refusal Space, and if Tenant is not then
in default (beyond any applicable cure periods) under this Lease, then Landlord shall give to
Tenant written notice of such intention (the “Offer Notice”), specifying the material terms on
which Landlord proposes to lease the First Refusal Space or applicable portion thereof (the
“Offered Space”) and offering to Tenant the opportunity to lease the Offered Space on the terms
specified in the Offer Notice. The time period within which Tenant is entitled to accept such offer
by written notice to Landlord (the “Offer Period”), measured from the date of Tenant’s receipt of
the Offer Notice, shall be ten (10) business days, except that if the Offered Space is all
or substantially all of the 280 East Grand Building, then the Offer Period shall be thirty (30)
days unless Tenant has previously received and failed to accept an Offer Notice with
respect to such Offered Space in the 280 East Grand Building and Landlord is thereafter, within one
hundred eighty (180) days after expiration of the Offer Period for such prior Offer Notice, coming
back to Tenant with a further Offer Notice reflecting terms more favorable to the lessee than the
terms offered in the prior Offer Notice, in which event the Offer Period for such further Offer
Notice shall be ten (10) business days. Upon timely acceptance of an Offer Notice by Tenant, the
Offered Space shall be leased to Tenant on the terms set forth in the Offer Notice and on the
additional terms and provisions set forth herein (except to the extent inconsistent with the terms
set forth in the Offer Notice) and the parties shall promptly execute an amendment to this Lease
adding the Offered Space to the Premises and making any appropriate amendments to provisions of
this Lease to reflect different rent and other obligations applicable to the Offered Space under
the terms of the Offer Notice. If Tenant does not accept Landlord’s offer within the allotted time,
Landlord shall thereafter have the right to lease the Offered Space to a third party at any time
within one hundred eighty (180) days after the expiration of the Offer Period, at a minimum rental
and on other terms and conditions not more favorable to the lessee than the minimum rental and
other terms offered to Tenant in the Offer Notice. If Landlord does not thereafter lease the
Offered Space to a third party within one hundred eighty (180) days as contemplated in the
preceding sentence, or if Landlord does lease the Offered Space to a third party within
such 180-day period but the Offered Space thereafter again becomes available during the term of
this Lease (including any duly elected extension terms), then in either such event Landlord shall
be required to comply again with the provisions of this Section 1.3 prior to any further leasing of
the Offered Space.




2. TERM




     2.1 Term. The term of this Lease shall commence on July 1, 2001 (the
“Commencement Date”) and shall end, unless sooner terminated or extended as hereinafter provided,
on June 30, 2011 (the “Termination Date”).



     2.2 [Omitted.]



     2.3 Condition of Premises: Tenant Improvements.



          (a) “As Is” Condition. Tenant, being the present occupant of the Premises
pursuant to the Existing Lease, acknowledges that it is familiar with the physical condition of the
Premises, that it will accept and occupy the Premises under this Lease in “AS IS” condition as the
Premises exist on the date of this Lease, and that Landlord shall have no obligation to improve,
repair or prepare the Premises, prior to the Commencement Date or, except as otherwise expressly
set forth in this Lease, after the Commencement Date, for occupancy by Tenant under this Lease.
TENANT ACKNOWLEDGES THAT EXCEPT AS EXPRESSLY SET FORTH IN THIS LEASE, NEITHER LANDLORD NOR ANY
AGENT OF LANDLORD HAS MADE ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO




- 3 -









 







THE PRESENT OR FUTURE SUITABILITY OF THE PREMISES OR THE PHASE I IMPROVEMENTS FOR THE CONDUCT
OF TENANT’S BUSINESS OR PROPOSED BUSINESS THEREON.




          (b) New Mezzanine Area. Tenant has requested Landlord’s permission to construct,
in Tenant’s discretion, a mezzanine area of approximately 8,000 square feet in the portion of the
Premises commonly known as 260 East Grand Avenue, approximately in the location designated as
“Future Mezzanine Premises” on the Site Plan.




                (i) Landlord hereby approves and consents to such construction,
in concept, subject to (A) completion of such improvements by Tenant at
Tenant’s sole expense (except as otherwise provided in subparagraph (b)(ii)
hereof) and in compliance with all the requirements of Article 9 hereof,
including (but not limited to) submission of all plans and specifications for
Landlord’s review and approval, which approval shall not be unreasonably
withheld or delayed, and (B) Landlord’s receipt of a variance from the City
of South San Francisco or other applicable governmental authorities with
respect to the Center’s compliance with applicable parking requirements
following construction of such mezzanine area. Landlord hereby agrees to use,
at Tenant’s request, reasonable efforts to obtain such a variance if and when
Tenant advises Landlord that Tenant wishes to proceed with construction of
such mezzanine area, and Landlord shall bear the expense of all fees and
costs incurred by Landlord in connection with Landlord’s application for such
a variance.




                (ii) Landlord agrees to pay to Tenant, within thirty (30) days
after issuance to Tenant of a certificate of occupancy (or its equivalent)
for such mezzanine area and delivery by Tenant to Landlord of lien waivers
reasonably satisfactory to Landlord from the contractor(s) performing such
construction, the sum of Two Hundred Thousand Dollars ($200,000) as a
construction allowance towards Tenant’s costs for construction of the shell
and structural components of such mezzanine area.




                (iii) From and after the date Tenant first occupies the substantially completed mezzanine
area, the mezzanine area shall be deemed to be part of the Premises and the square footage of the
mezzanine area (as determined by Landlord’s architect, measuring to the exterior faces of the walls
defining or enclosing such mezzanine area) shall be added to the square footage of the Premises for
purposes of adjusting Tenant’s minimum rent obligation under Section 3.1(b) and Tenant’s Operating
Expense Share under Section 7.1(b).




          (c) New Lobby Area. Tenant has requested Landlord’s consent to and/or
participation in the construction, in Tenant’s discretion, of a new, enclosed lobby area of
approximately 2,500 square feet on the northerly side of the building commonly known as 250 East
Grand Avenue, approximately in the location designated as “Future Entrance Lobby — Premises” on
Exhibit C attached hereto and incorporated herein by this reference.




                (i) Landlord hereby approves and consents to such construction, in concept, subject to
Landlord’s receipt of a variance from the City of South San Francisco or other applicable
governmental authorities with respect to the Center’s compliance with applicable parking
requirements following construction of such lobby area. Landlord hereby agrees to use, at Tenant’s
request and at Landlord’s expense, reasonable efforts to obtain such a variance if and when Tenant
notifies Landlord that Tenant wishes to proceed with construction of such lobby area.




                (ii) If and when Tenant notifies Landlord of Tenant’s desire to proceed with the
construction of the enclosed lobby area and Landlord obtains the necessary parking variance as
described above, (A) Landlord (or, if Landlord and Tenant mutually agree, Tenant) shall diligently
construct, at Landlord’s sole expense, in accordance with plans and specifications prepared by
Landlord’s architect and approved by Landlord and Tenant (which approval shall not be unreasonably
withheld or delayed by either party), the cold shell enclosing the new lobby area (i.e., exterior
walls, slab, roof, windows and entrance doors), any necessary site preparation work and any
exterior paving, landscaping or other sitework, and (B) Tenant shall construct, at




- 4 -









 







Tenant’s sole expense, in compliance with all the requirements of Article 9 hereof, including
(but not limited to) submission of all plans and specifications for Landlord’s review and approval,
all interior finishes and nonstructural portions of such lobby area, other than the portion of the
work for which Landlord is responsible under clause (A) of this sentence. If Landlord and Tenant
mutually agree that Tenant shall construct some or all of the shell work described in clause (A) of
the preceding sentence at Landlord’s expense, then Landlord shall prepare the applicable plans and
specifications as described in such clause (A), the contractor selected by Tenant shall be subject
to Landlord’s prior written approval (not to be unreasonably withheld), the construction budget and
economic terms of Tenant’s contract with such approved contractor shall be subject to Landlord’s
prior written approval (not to be unreasonably withheld), and during the course of construction
Landlord shall pay to Tenant or to Tenant’s contractor, as Tenant may direct, within twenty (20)
days after receipt of a written payment request and reasonable supporting documentation (including,
but not limited to, lien waivers reasonably satisfactory to Landlord from the contractor(s)
performing the applicable work) from Tenant from time to time at reasonable intervals as mutually
agreed by Landlord and Tenant, the amount of all costs and expenses reasonably incurred by Tenant
in connection with the construction of such shell work.




                (iii) From and after the date the enclosed lobby area is substantially completed and is
first placed in use, the lobby area shall be deemed to be part of the Premises and the square
footage of the lobby area (as determined by Landlord’s architect, measuring to the exterior faces
of exterior walls and to the dripline of any exterior overhangs) shall be added to the square
footage of the Premises for purposes of adjusting Tenant’s minimum rent obligation under Section
3.1(b) and Tenant’s Operating Expense Share under Section 7.1(b).




     2.4 [Omitted.]



     2.5 Holding Over. If Tenant holds possession of the Premises or any portion thereof
after the term of this Lease with Landlord’s written consent, then except as otherwise
specified in such consent, Tenant shall become a tenant from month to month at one hundred ten
percent (110%) of the rental and otherwise upon the terms herein specified for the period
immediately prior to such holding over and shall continue in such status until the tenancy is
terminated by either party upon not less than thirty (30) days prior written notice. If Tenant
holds possession of the Premises or any portion thereof after the term of this Lease
without Landlord’s written consent, then Landlord in its sole discretion may elect (by
written notice to Tenant) to have Tenant become a tenant either from month to month or at will, at
one hundred fifty percent (150%) of the rental (prorated on a daily basis for an at-will tenancy,
if applicable) and otherwise upon the terms herein specified for the period immediately prior to
such holding over, or may elect to pursue any and all legal remedies available to Landlord under
applicable law with respect to such unconsented holding over by Tenant. Tenant shall indemnify and
hold Landlord harmless from any loss, damage, claim, liability, cost or expense (including
reasonable attorneys’ fees) resulting from any delay by Tenant in surrendering the Premises or any
portion thereof (except to the extent such delay is with Landlord’s prior written consent),
including but not limited to any claims made by a succeeding tenant by reason of such delay.
Acceptance of rent by Landlord following expiration or termination of this Lease shall not
constitute a renewal of this Lease.



     2.6 Option To Extend Term. Tenant shall have the option to extend the term of
this Lease, at the minimum rental set forth in Section 3.1(c) and (d) and otherwise upon all the
terms and provisions set forth herein with respect to the initial term of this Lease, for up to two
(2) additional periods of five (5) years each, the first commencing upon the expiration of the
initial term hereof and the second commencing upon the expiration of the first extended term, if
any. Exercise of such option with respect to the first such extended term shall be by written
notice to Landlord at least nine (9) months and not more than twelve (12) months prior to the
expiration of the initial term hereof; exercise of such option with respect to the second extended
term, if the first extension option has been duly exercised, shall be by like written notice to
Landlord at least nine (9) months and not more than twelve (12) months prior to the expiration of
the first extended term hereof. If Tenant is in default hereunder, beyond any applicable notice and
cure periods, on the date of such notice or on the date any extended term is to commence, then the



- 5 -









 





exercise of the option shall be of no force or effect, the extended term shall not commence and
this Lease shall expire at the end of the then current term hereof (or at such earlier time as
Landlord may elect pursuant to the default provisions of this Lease). If Tenant properly exercises
one or more extension options under this Section, then all references in this Lease (other than in
this Section 2.6) to the “term” of this Lease shall be construed to include the extension term(s)
thus elected by Tenant. Except as expressly set forth in this Section 2.6, Tenant shall have no
right to extend the term of this Lease beyond its prescribed term.




3. RENTAL




     3.1 Minimum Rental.



          (a) Rental Amounts. Tenant shall pay to Landlord as minimum rental for the
Premises, in advance, without deduction, offset, notice or demand, on or before the
Commencement Date and on or before the first day of each subsequent calendar month of the
initial term of this Lease, the following amounts per month:




	 	 	 	 	 
	Months	 	Monthly Minimum Rental
	7/01 - 12/01
	 	$212,537.52 ($1.560/sq ft)
	1/02 - 12/02
	 	  261,584.64 ($1.920/sq ft)
	1/03 - 12/03
	 	  271,121.58 ($1.990/sq ft)
	1/04 - 12/04
	 	  283,383.36 ($2.080/sq ft)
	1/05 - 12/05
	 	  479,571.84 ($3.520/sq ft)
	1/06 - 12/06
	 	  498,781.96 ($3.661/sq ft)
	1/07 - 12/07
	 	  518,673.29 ($3.807/sq ft)
	1/08 - 12/08
	 	  539,518.32 ($3.960/sq ft)
	1/09 - 12/09
	 	  561,044.56 ($4.118/sq ft)
	1/10 - 12/10
	 	  583,524.49 ($4.283/sq ft)
	1/11 - 6/11
	 	  606,821.87 ($4.454/sq ft)






If the obligation to pay minimum rental hereunder commences on other than the first day of a
calendar month or if the term of this Lease terminates on other than the last day of a calendar
month, the minimum rental for such first or last month of the term of this Lease, as the case may
be, shall be prorated based on the number of days the term of this Lease is in effect during such
month. If an increase in minimum rental becomes effective on a day other than the first day of a
calendar month, the minimum rental for that month shall be the sum of the two applicable rates,
each prorated for the portion of the month during which such rate is in effect.




          (b) Rental Adjustment Due to Change in Square Footage. The minimum rental amounts
specified in this Section 3.1 are based upon an agreed area of 136,242 square feet for the Premises
as they exist on the Commencement Date. If the area of the Premises increases during the initial
term of this Lease as a result of the construction of the new mezzanine area as contemplated in
Section 2.3(b) and/or the construction of the new lobby area as contemplated in Section 2.3(c),
then beginning on the date the applicable construction is substantially completed and the
applicable new area becomes available for use or is actually used by Tenant in the ordinary course
of its business, the minimum monthly rent for the remainder of the initial term of this Lease shall
be increased, for each month, by an amount equal to the square footage of the newly constructed
area (measured in accordance with Section 2.3(b)(iii) or 2.3(c)(iii), as applicable) multiplied by
the applicable rental rate per square foot as set forth in Section 3. l(a) above. In the event of
any such increase in the area of the Premises during any extended term of this Lease, the minimum
monthly rent during such extended term (as otherwise determined pursuant to Section 3.1(c) or
3.1(d), as applicable) shall be increased on a similar basis in strict proportion to the increase
in the size of the Premises as a result of the newly constructed area being added to the Premises.
Any rental increases due to a change in the square footage of the Premises as a result of Tenant’s
exercise of a first refusal right under Section 1.3 hereof with




- 6 -









 







respect to any of the First Refusal Space shall be determined and implemented in accordance
with the provisions of Section 1.3 and the applicable Offer Notice thereunder.




          (c) Rental Amounts During First Extended Term. If Tenant properly exercises its
right to extend the term of this Lease pursuant to Section 2.6 hereof, the minimum rental during
the first year of the first extended term shall be equal to the fair market rental value of the
Premises (as defined below), including any cost-of-living adjustments or other rental increase
provisions then customary in the City of South San Francisco for comparable commercial leases,
determined as of the commencement of such extended term in accordance with this paragraph. Upon
Landlord’s receipt of a proper notice of Tenant’s exercise of its option to extend the term of this
Lease, the parties shall have sixty (60) days in which to agree on the initial fair market rental
(including any applicable rental increase provisions) for the Premises at the commencement of the
first extended term for the uses permitted hereunder. If the parties agree on such initial fair
market rental and rental increase provisions (if any), they shall execute an amendment to this
Lease stating the amount of the applicable minimum monthly rental and any applicable rental
increase provisions. If the parties are unable to agree on such rental (including any applicable
rental increase provisions) within such sixty (60) day period, then within fifteen (15) days after
the expiration of such period each party, at its cost and by giving notice to the other party,
shall appoint a real estate appraiser with at least five (5) years experience appraising similar
commercial properties in northeastern San Mateo County to appraise and set the initial fair market
rental and any applicable rental increase provisions for the Premises at the commencement of the
first extended term in accordance with the provisions of this Section 3.1 (c). If either party
fails to appoint an appraiser within the allotted time, the single appraiser appointed by the other
party shall be the sole appraiser. If an appraiser is appointed by each party and the two
appraisers so appointed are unable to agree upon an initial fair market rental (and any appropriate
rental increase provisions) within thirty (30) days after the appointment of the second, the two
appraisers shall appoint a third similarly qualified appraiser within ten (10) days after
expiration of such 30-day period; if they are unable to agree upon a third appraiser, then either
party may, upon not less than five (5) days notice to the other party, apply to the Presiding Judge
of the San Mateo County Superior Court for the appointment of a third qualified appraiser. Each
party shall bear its own legal fees in connection with appointment of the third appraiser and shall
bear one-half of any other costs of appointment of the third appraiser and of such third
appraiser’s fee. The third appraiser, however selected, shall be a person who has not previously
acted for either party in any capacity. Within thirty (30) days after the appointment of the third
appraiser, a majority of the three appraisers shall set the initial fair market rental and any
applicable rental increase provisions for the first extended term and shall so notify the parties.
If a majority are unable to agree within the allotted time, then (i) the three appraised initial
fair market rentals shall be added together and divided by three and the resulting quotient shall
be the initial fair market rental for the first extended term, and (ii) the applicable rental
increase provision shall be equal to the mathematical average (or the nearest reasonable
approximation thereto) of the two rental increase provisions that are most closely comparable,
which determinations shall be binding on the parties and shall be enforceable in any further
proceedings relating to this Lease. For purposes of this Section 3.1(c), the “fair market
rental” of the Premises shall be determined with reference to the then prevailing market rental
rates for properties in the City of South San Francisco with shell and office, laboratory and
research and development improvements and site (common area) improvements comparable to those then
existing in the Premises and in the Center, taking into account for such determination all tenant
improvements then existing in the Premises (including, but not limited to, all fixtures, equipment
and laboratory improvements in place in the Premises on the Commencement Date) other than
alterations, improvements or equipment which were constructed or installed by Tenant at its sole
expense and which Tenant has a right or obligation to remove from the Premises at the expiration of
this Lease pursuant to the provisions of Article 9 hereof.




          (d) Rental Amounts During Second Extended Term. If Tenant properly exercises its
right to a second extended term of this Lease pursuant to Section 2.6 hereof, the minimum rental
and any applicable rental increase provisions during such second extended term shall be determined
in the same manner provided in the preceding paragraph for the first




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extended term, except that the determination shall be made as of the commencement of the
second extended term.




     3.2 Late Charge. If Tenant fails to pay rental or other amounts due Landlord
hereunder on or before the fifth (5th) day after such rental or other amount is due,
such unpaid amounts shall bear interest for the benefit of Landlord at a rate equal to the lesser
of fifteen percent (15%) per annum or the maximum rate permitted by law, from the date due to the
date of payment. In addition to such interest, Tenant shall pay to Landlord a late charge in an
amount equal to six percent (6%) of any installment of minimum rental and any other amounts due
Landlord if not paid in full on or before the fifth (5th) day after such rental or other
amount is due. Tenant acknowledges that late payment by Tenant to Landlord of rental or other
amounts due hereunder will cause Landlord to incur costs not contemplated by this Lease, including,
without limitation, processing and accounting charges and late charges which may be imposed on
Landlord by the terms of any loan relating to the Center or any portion thereof. Tenant further
acknowledges that it is extremely difficult and impractical to fix the exact amount of such costs
and that the late charge set forth in this Section 3.2 represents a fair and reasonable estimate
thereof. Acceptance of any late charge by Landlord shall not constitute a waiver of Tenant’s
default with respect to overdue rental or other amounts, nor shall such acceptance prevent Landlord
from exercising any other rights and remedies available to it. Acceptance of rent or other payments
by Landlord shall not constitute a waiver of late charges or interest accrued with respect to such
rent or other payments or any prior installments thereof, nor of any other defaults by Tenant,
whether monetary or non-monetary in nature, remaining uncured at the time of such acceptance of
rent or other payments.



4. [Omitted.]




5. [Omitted.]




6. TAXES




     6.1 Personal Property. Tenant shall be responsible for and shall pay prior to
delinquency all taxes and assessments levied against or by reason of (a) any and all alterations,
additions and items installed or placed on or in the Premises and taxed as personal property rather
than as real property, and/or (b) all personal property, trade fixtures and other property placed
by Tenant on or about the Premises. Upon request by Landlord, Tenant shall furnish Landlord with
satisfactory evidence of Tenant’s payment thereof. If at any time during the term of this Lease any
of said alterations, additions or personal property, whether or not belonging to Tenant, shall be
taxed or assessed as pan of the Center, then such tax or assessment shall be paid by Tenant to
Landlord within fifteen (15) days after presentation by Landlord of copies of the tax bills in
which such taxes and assessments are included and shall, for the purposes of this Lease, be deemed
to be personal property taxes or assessments under this Section 6.1.



     6.2 Real Property. To the extent any real property taxes and assessments on any
portions of the Center (including, but not limited to, the Improvements or any portion thereof)
leased or occupied solely by Tenant are assessed directly to Tenant, Tenant shall be responsible
for and shall pay prior to delinquency all such taxes and assessments levied against the applicable
portions of the Center. Upon request by Landlord, Tenant shall furnish Landlord with satisfactory
evidence of Tenant’s payment thereof. To the extent the Center and/or Improvements are taxed or
assessed to Landlord following the Commencement Date, such real property taxes and assessments
shall constitute Operating Expenses (as that term is defined in Section 7.2 of this Lease) and
shall be paid in accordance with the provisions of Article 7 of this Lease.



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7. OPERATING EXPENSES




     7.1 Payment of Operating Expenses.



          (a) Tenant shall pay to Landlord, at the time and in the manner hereinafter set forth,
as additional rental, an amount equal to twenty-four and twenty-one hundredths percent (24.21%)
(“Tenant’s Operating Cost Share”) of the Operating Expenses defined in Section 7.2;
provided, however, that the Tenant’s Operating Cost Share set forth in the preceding
portion of this sentence shall apply only to expenses that are determined and allocated by Landlord
on a Center-wide basis, subject to any adjustments required under any other applicable provisions
of this Section 7.1, and that Tenant’s Operating Cost Share shall be seventy-six and fifty-seven
hundredths percent (76.57%) with respect to any Operating Expenses defined in Section 7.2 that are
reasonably allocable solely to the Phase I Property. As of the date of this Lease, Landlord
represents that the four buildings in which the Premises are located are the only buildings located
on the Phase I Property and that Landlord’s current practice is to determine and allocate all
Operating Expenses (including, but not limited to, real and personal property taxes and
assessments, insurance, building maintenance, property management, landscape maintenance and
irrigation, and parking area maintenance and lighting) on a stand-alone basis to the Phase 1
Property.




          (b) Tenant’s Operating Cost Share as specified in paragraph (a) of this Section with
respect to Operating Expenses which are determined and allocated on a Center-wide basis is based
upon an area of 136,242 square feet for the Premises and upon an aggregate area of 562,859 square
feet for the existing buildings owned by Landlord in the Center as depicted in the Site Plan.
Tenant’s Operating Cost Share as specified in paragraph (a) of this Section with respect to
Operating Expenses which are determined and allocated solely to the Phase I Property is based upon
an area of 136,242 square feet for the Premises and upon an aggregate area of 177,938 square feet
for the existing buildings on the Phase I Property. If the actual area of the buildings on the
Phase I Property from time to time or of the buildings owned from time to time by Landlord in the
Center and consolidated with the buildings in which the Premises are located for operation,
maintenance, common area and Operating Expense purposes, as applicable, as such area is determined
in good faith by Landlord’s architect on the same basis of measurement under which the Premises
have been determined to contain 136,242 square feet (from the exterior faces of exterior walls and
from the dripline of any overhangs, except that in the case of any two- story recesses or
overhangs, the area to the dripline of the overhang is counted as part of the area of the first
story but not as part of the area of the second story), differs from the assumed figures set forth
above (including, but not limited to, any such difference arising from the construction of
additional buildings in the Center as contemplated in Section 7.1(c) hereof), or if the area of the
Premises changes from time to time pursuant to the construction of additional areas of the Premises
pursuant to Section 2.3(b) and/or 2.3(c) and/or pursuant to Tenant’s exercise of a first refusal
right pursuant to Section 1.3 hereof, then Tenant’s Operating Cost Share as it applies to Operating
Expenses that are determined and allocated on a Center-wide basis or that are determined and
allocated solely with respect to the Phase I Property, as applicable, shall be adjusted to reflect
the actual areas so determined as they exist from time to time; provided. however, that in
the event Tenant exercises a first refusal right with respect to the 280 East Grand Building,
Landlord hereby advises Tenant that it is presently Landlord’s practice to account for all
Operating Expenses attributable or allocable to the separate legal parcel on which the 280 East
Grand Building is located on a stand-alone basis and to allocate such Operating Expenses one
hundred percent (100%) to the tenant(s) of the 280 East Grand Building.




          (c) If Landlord at any time constructs additional buildings in the Center or on any
adjacent property owned by Landlord and operated, for common area purposes, on an integrated basis
with the Center, then Tenant’s Operating Cost Share as it applies to Operating Expenses that are
determined and allocated on a Center-wide basis shall be adjusted to be equal to the percentage
determined by dividing the gross square footage of the Premises as they exist from time to time by
the gross square footage of all buildings located in the Center or on any applicable adjacent
property owned by Landlord as described above. In determining such percentage, a building shall be
taken into account from and after the date on which a tenant first




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enters into possession of the building or a portion thereof, and the good faith determination
of the gross square footage of any such building by Landlord’s architects shall be final and
binding upon the parties.




     7.2 Definition Of Operating Expenses.



          (a) Subject to the exclusions and provisions hereinafter contained, the term
“Operating Expenses” shall mean the total costs and expenses incurred by or allocable to
Landlord for management, operation and maintenance of the Improvements, the Center, the buildings
in the Center, and the real property on which the Center is located (or, in the case of items that
are determined and allocated on a stand-alone basis as described in Section 7.1, that portion of
the Center that consists of the separate legal parcel or parcels containing the buildings in which
the Premises are located), including, without limitation, costs and expenses of (i) insurance
(including earthquake and environmental insurance), property management, landscaping, and the
operation, repair and maintenance of buildings and Common Areas; (ii) all utilities and services;
(iii) real and personal property taxes and assessments or substitutes therefor levied or assessed
against the Center or any part thereof, including (but not limited to) any possessory interest,
use, business, license or other taxes or fees, any taxes imposed directly on rents or services, any
assessments or charges for police or fire protection, housing, transit, open space, street or
sidewalk construction or maintenance or other similar services from time to time by any
governmental or quasi-governmental entity, and any other new taxes on landlords in addition to
taxes now in effect; (iv) supplies, equipment, utilities and tools used in management, operation
and maintenance of the Center; (v) expenditures for capital improvements to the Center, the
Improvements or the buildings in the Center, amortized over a reasonable period determined in
accordance with generally accepted accounting principles applied on a consistent basis, (aa) which
reduce or will cause future reduction of other items of Operating Expenses for which Tenant is
otherwise required to contribute or (bb) which are required by law, ordinance, regulation or order
of any governmental authority or (cc) of which Tenant has use or which benefit Tenant; and (vi) any
other costs (including, but not limited to, any parking or utilities fees or surcharges) allocable
to or paid by Landlord, as owner of the Center, the buildings therein or the Improvements, pursuant
to any applicable laws, ordinances, regulations or orders of any governmental or quasi-governmental
authority or pursuant to the terms of any declarations of covenants, conditions and restrictions
now or hereafter affecting the Center or any other property over which Tenant has non-exclusive use
rights as contemplated in Section 1.1(b) hereof. Operating Expenses shall not include any costs
attributable to Landlord’s Work, nor any costs attributable to the initial construction of the
buildings in the Center or of Common Area improvements in the Center. The distinction between items
of ordinary operating maintenance and repair and items of a capital nature shall be made in
accordance with generally accepted accounting principles applied on a consistent basis or in
accordance with tax accounting principles, as determined in good faith by Landlord’s accountants.




          (b) Notwithstanding anything to the contrary contained in this Lease, the following
shall not be included within Operating Expenses:




                (i) Costs of maintenance or repair of the roof membrane for any building, except
during periods (if any) in which costs of maintenance or repair of the roof membrane
for the buildings in which the Premises are located are likewise included as an
Operating Expense (rather than being incurred directly by Tenant or passed through
directly to Tenant);




                (ii) Leasing commissions, attorneys’ fees, costs, disbursements, and other
expenses incurred in connection with negotiations or disputes with tenants, or in
connection with leasing, renovating or improving space for tenants or other occupants
or prospective tenants or other occupants of the Center or of any other property owned
by Landlord;




                (iii) The cost of any service sold to any tenant (including Tenant) or other occupant for
which Landlord is entitled to be reimbursed as an additional charge or rental over and above the
basic rent and operating expenses payable under the lease with that tenant;




- 10 -









 








                (iv) Any depreciation on the buildings in which the Premises are located or on any other
improvements in the Center or on any other property owned by Landlord;




                (v) Expenses in connection with services or other benefits of a type that are not
offered or made available to Tenant but that are provided to another tenant of the Center or of any
other property owned by Landlord;




                (vi) Costs incurred due to Landlord’s violation of any terms or conditions of this Lease
or of any other lease relating to the buildings in which the Premises are located or to
any other portion of the Center or of any other property owned by Landlord;




                (vii) Overhead profit increments paid to any subsidiary or affiliate of Landlord for
management or other services on or to the Center or any portion thereof or any other property owned
by Landlord, or for supplies or other materials to the extent that the cost of the services,
supplies or materials exceeds the cost that would have been paid had the services, supplies or
materials been provided by unaffiliated parties on a competitive basis;




                (viii) All interest, loan fees and other carrying costs related to any mortgage or deed of
trust or related to any capital item, and all rental and other amounts payable under any ground or
underlying lease, or under any lease for any equipment ordinarily considered to be of a capital
nature (except (A) janitorial equipment which is not affixed to the applicable buildings and/or (B)
equipment the cost of which, if purchased, would be considered an amortizable Operating Expense
under the provisions of this Section 7.2, notwithstanding the capital nature of such equipment);




                (ix) Any compensation paid to clerks, attendants or other persons in commercial
concessions operated by Landlord;




                (x) Advertising and promotional expenditures;




                (xi) Costs of repairs and other work occasioned by fire, windstorm or other casualty of an
insurable nature, except to the extent of any applicable deductible amounts under insurance
actually carried by Landlord;




                (xii) Any costs, fines or penalties incurred due to violations by Landlord of any
governmental rule or authority or of this Lease or any other lease of any portion of the Center or
any other property owned by Landlord, or due to Landlord’s negligence or willful misconduct;




                (xiii) Management fees allocable to the Phase I Property to the extent they exceed the
following percentages of the gross income (rent and Operating Expenses) received by Landlord with
respect to the Phase I Property during the applicable period: (A) from the Commencement Date
through December 31, 2004, two and one half percent (2.5%); and (B) from January 1, 2005 through
the remaining term of this Lease (including any extension term(s)), one and one half percent
(1.5%);




                (xiv) Costs for sculpture, paintings or other objects of art, and for any insurance thereon
or extraordinary security in connection therewith;




                (xv) Wages, salaries or other compensation paid to any executive employees above the grade
of building manager;




                (xvi) The cost of correcting any building code or other violations which were violations prior
to the Commencement Date;




               (xvii) The cost of containing, removing or otherwise remediating any contamination of the Center
(including the underlying land and groundwater) by any toxic or hazardous materials (including,
without limitation, asbestos and PCBs); and





- 11 -









 







               (xviii) During any period when the Center is owned by a person or entity which is not a person
or entity controlling, controlled by or under common control with either Landlord or Slough Estates
USA Inc., earthquake and/or environmental insurance premiums in excess of rates that are
commercially reasonable under then existing market conditions.



     7.3 Determination Of Operating Expenses. Tenant is already paying estimated Operating
Expenses, pursuant to the Existing Lease, for calendar year 2001 based on estimates previously
furnished by Landlord to Tenant. During the last month of each calendar year of the term of this
Lease (“Lease Year”), or as soon thereafter as practical, Landlord shall provide Tenant notice of
Landlord’s estimate of the Operating Expenses for the ensuing Lease Year or applicable portion
thereof. On or before the first day of each month during each Lease Year or applicable portion
thereof, beginning on the Commencement Date, Tenant shall pay to Landlord Tenant’s Operating Cost
Share of the portion of such estimated Operating Expenses allocable (on a prorata basis) to such
month; provided, however, that if such notice is not given in the last month of a Lease
Year, Tenant shall continue to pay on the basis of the prior year’s estimate, if any, until the
month after such notice is given. If at any time or times it appears to Landlord that the actual
Operating Expenses will vary from Landlord’s estimate by more than five percent (5%), Landlord may,
by notice to Tenant, revise its estimate for such year and subsequent payments by Tenant for such
year shall be based upon such revised estimate.



7.4 Final Accounting For Lease Year.




          (a) Within ninety (90) days after the close of each Lease Year, or as soon after such 90-day
period as practicable, Landlord shall deliver to Tenant a statement of Tenant’s Operating Cost
Share of the Operating Expenses for such Lease Year prepared by Landlord from Landlord’s books and
records, which statement shall be final and binding on Landlord and Tenant (except as provided in
Section 7.4(b)). If on the basis of such statement Tenant owes an amount that is more or less than
the estimated payments for such Lease Year previously made by Tenant, Tenant or Landlord, as the
case may be, shall pay the deficiency to the other party within thirty (30) days after delivery of
the statement. Failure or inability of Landlord to deliver the annual statement within such ninety
(90) day period shall not impair or constitute a waiver of Tenant’s obligation to pay Operating
Expenses, or cause Landlord to incur any liability for damages.




          (b) At any time within three (3) months after receipt of Landlord’s annual statement of
Operating Expenses as contemplated in Section 7.4(a), Tenant shall be entitled, upon reasonable
written notice to Landlord and during normal business hours at Landlord’s office or such other
places as Landlord shall designate, to inspect and examine those books and records of Landlord
relating to the determination of Operating Expenses for the immediately preceding Lease Year
covered by such annual statement or, if Tenant so elects by written notice to Landlord, to request
an independent audit of such books and records. The independent audit of the books and records
shall be conducted by a certified public accountant acceptable to both Landlord and Tenant or, if
the parties are unable to agree, by a certified public accountant appointed by the Presiding Judge
of the San Mateo County Superior Court upon the application of either Landlord or Tenant (with
notice to the other party). In either event, such certified public accountant shall be one who is
not then employed in any capacity by Landlord or Tenant or by any of their respective affiliates.
The audit shall be limited to the determination of the amount of Operating Expenses for the subject
Lease Year, and shall be based on generally accepted accounting principles and tax accounting
principles, consistently applied. If it is determined, by mutual agreement of Landlord and Tenant
or by independent audit, that the amount of Operating Expenses billed to or paid by Tenant for the
applicable Lease Year was incorrect, then the appropriate party shall pay to the other party the
deficiency or overpayment, as applicable, within thirty (30) days after the final determination of
such deficiency or overpayment. All costs and expenses of the audit shall be paid by Tenant unless
the audit shows that Landlord overstated Operating Expenses for the subject Lease Year by more than
five percent (5%), in which case Landlord shall pay all costs and expenses of the audit. Each party
agrees to maintain the confidentiality of the findings of any audit in accordance with the
provisions of this Section 7.4.




 - 12 -









 








     7.5 Proration. If the Commencement Date falls on a day other than the first day
of a Lease Year or if this Lease terminates on a day other than the last day of a Lease Year, then
the amount of Operating Expenses payable by Tenant with respect to such first or last partial Lease
Year shall be prorated on the basis which the number of days during such Lease Year in which this
Lease is in effect bears to 365. The termination of this Lease shall not affect the obligations of
Landlord and Tenant pursuant to Section 7.4 to be performed after such termination.



8. UTILITIES




     8.1 Payment. Commencing with the Commencement Date and thereafter throughout the term
of this Lease, Tenant shall pay, before delinquency, all charges for water, gas, heat, light,
electricity, power, sewer, telephone, alarm system, janitorial and other services or utilities
supplied to or consumed in or with respect to the Premises (other than any separately metered costs
for water, electricity or other services or utilities furnished with respect to the Common Areas,
which costs, to the extent paid by Landlord, shall constitute Operating Expenses under Section 7.2
hereof), including any taxes on such services and utilities. It is the intention of the parties
that all such services shall be separately metered to the Premises. In the event that any of such
services supplied to the Premises are not separately metered, then the amount thereof shall be an
item of Operating Expenses and shall be paid as provided in Article 7.



     8.2 Interruption. There shall be no abatement of rent or other charges required to be paid
hereunder and Landlord shall not be liable in damages or otherwise for interruption or failure of
any service or utility furnished to or used with respect to the Premises or the Center because of
accident, making of repairs, alterations or improvements, severe weather, difficulty or inability
in obtaining services or supplies, labor difficulties or any other cause. Notwithstanding the
foregoing provisions of this Section 8.2, however, in the event of any interruption or failure of
any service or utility to the Premises that (i) is caused in whole or in material part by the
active negligence or willful misconduct of Landlord or its agents or employees and (ii)
continues for more than three (3) business days and (iii) materially impairs Tenant’s
ability to use the Premises for their intended purposes hereunder, then following such three (3)
business day period, Tenant’s obligations for payment of rent and other charges under this Lease
shall be abated in proportion to the degree of impairment of Tenant’s use of the Premises or
applicable portion thereof, and such abatement shall continue until Tenant’s use of the Premises is
no longer materially impaired thereby.



9. ALTERATIONS: SIGNS




     9.1 Right To Make Alterations. Tenant shall make no alterations, additions or
improvements to the Premises, the buildings in which the Premises are located or the Center, other
than (i) alterations, additions or improvements to Tenant’s Property (as defined in, and subject to
the provisions of, Section 9.2 below), and/or (ii) other interior non-structural alterations
costing less than Fifty Thousand Dollars ($50,000.00) in the aggregate during any twelve (12) month
period, without the prior written consent of Landlord, which consent shall not be unreasonably
withheld or delayed. All such alterations, additions and improvements shall be completed with due
diligence in a first-class workmanlike manner, in compliance with plans and specifications approved
in writing by Landlord and in compliance with all applicable laws, ordinances, rules and
regulations, and to the extent Landlord’s consent is not otherwise required hereunder for such
alterations, additions or improvements, Tenant shall give prompt written notice thereof to
Landlord. Tenant shall cause any contractors engaged by Tenant for work in the Premises or on the
Property to maintain public liability and property damage insurance, and other customary insurance,
with such terms and in such amounts as Landlord may reasonably require, naming as additional
insureds Landlord and any of its partners, shareholders, property managers and lenders designated
by Landlord for this purpose, and shall furnish Landlord with certificates of insurance or other
evidence that such coverage is in effect. Notwithstanding any other provisions of this Section 9.1,
under no circumstances shall Tenant make any structural alterations or improvements, or any
substantial changes to the roof or substantial equipment



 - 13 -









 




installations on the roof, or any substantial changes or alterations to the building systems,
without Landlord’s prior written consent (which consent shall not be unreasonably withheld or
delayed). If Tenant so requests in seeking Landlord’s consent to any alterations, additions or
improvements, Landlord shall specify in granting such consent whether Landlord intends to require
that Tenant remove such alterations, additions or improvements (or any specified portions thereof)
upon expiration or termination of this Lease. Landlord shall receive no fee for supervision,
profit, overhead or general conditions in connection with any alterations, additions or
improvements constructed or installed by Tenant under this Lease.




     9.2 Title To Alterations. All alterations, additions and improvements existing
in the Premises on the Commencement Date or thereafter installed in, on or about the Premises or
the Center (except as otherwise expressly provided in this Section 9.2) shall become part of the
Center and the real property on which it is located and shall become the property of Landlord,
unless Landlord elects, in the case of any alterations, additions or improvements installed after
the Commencement Date, to require Tenant to remove the same upon the termination of this Lease
(subject to the provisions of Section 9.2(c) below).



          (a) Landlord’s Property. The parties specifically agree that the alterations,
additions and improvements which are or shall be part of the Center and are or shall be the property
of Landlord shall include (but not be limited to) (i) built-in coldrooms, (ii) air lines, plumbing,
electrical wiring and other similar systems associated with any of Tenant’s (A) built-in
coldrooms, (B) laboratory casework, (C) vacuum pumps, (D) compressors, and/or (E) water
purification and deionized water systems, (iii) plumbing, electrical wiring and other similar
systems associated with Tenant’s animal water system and located within walls, ceilings or floors,
and (iv) wiring and jacks associated with Tenant’s telephone systems, computer network systems and
security systems, but shall not include Tenant’s Property (as defined in
Section 9.2(b) below) except to the extent purchased by Landlord pursuant to Section 9.2(g), if
applicable.




          (b) Tenant’s Property. With respect to any portions of the Premises as they exist from
time to time that are located on the Phase I Property, the term
“Tenant’s Property” shall
mean all of the following items: (i) movable personal property, office furniture and/or modular
office furniture systems, movable equipment and trade fixtures; (ii) lab benches, built-in fume
hoods, plumbing fixtures and other laboratory casework (collectively, the “Option Property”), but
excluding air lines, plumbing, electrical wiring and other similar systems associated with any of
such laboratory casework and/or built-in fume hoods; (iii) compressors, excluding air lines,
plumbing, electrical wiring and other similar systems associated with any of such compressors; (iv)
vacuum pumps, excluding plumbing, electrical wiring and other similar systems associated with any
of such vacuum pumps; (v) water purification systems and/or deionized water systems, excluding
plumbing, electrical wiring and other similar systems associated with any of such water
purification or deionized water systems; (vi) auxiliary generators and transfer switches; (vii)
telephone systems and desk sets, excluding wiring and jacks; (viii) computer network systems,
excluding wiring and jacks; (ix) security system, excluding wiring and jacks; (x) cage and rack
washers; (xi) glassware washers; (xii) autoclaves; (xiii) Edstram animal water system, excluding
plumbing, electrical wiring and other similar systems associated with such animal water system;
(xiv) freestanding coldrooms; and
(xv) movable fume hoods.




          (c) Removal of Tenant’s Property at End of Term. Notwithstanding anything to the
contrary contained in the foregoing provisions, the parties specifically agree that the Option
Property shall not become the property of Landlord unless, and then only to the extent
that, Landlord exercises its purchase option in accordance with Section 9.2(g) below. Tenant shall
have the right to remove at the termination or expiration of this Lease, subject to any specific
limitations set forth in this Article 9, any or all of Tenant’s Property. Tenant shall promptly
repair any damage caused by its removal of any of Tenant’s Property during or at the expiration of
the term of this Lease. Notwithstanding any other provisions of this Article 9, however, if Tenant
requests Landlord’s written consent to any alterations, additions or improvements under Section 9.1
hereof after the Commencement Date and, in requesting such




 - 14 -









 







consent, asks that Landlord specify whether Landlord will require removal of such
alterations, additions or improvements upon termination or expiration of this Lease, then
Landlord shall not be entitled to require such removal unless Landlord specified its intention
to do so at the time of granting of Landlord’s consent to the requested alterations, additions
or improvements.




          (d) Items Located in Premises Outside the Phase 1 Property. With respect to any
portions of the Premises as they exist from time to time that are located outside the Phase I
Property (such as, for example, the 280 East Grand Building if hereafter added to the Premises
pursuant to Section 1.3 hereof), the term “Tenant’s Property” shall not include any lab
benches, built-in fume hoods, plumbing fixtures and other laboratory casework (which items shall
instead be deemed upon installation, or upon commencement of Tenant’s leasing of such additional
Premises to the extent such items were installed by Landlord or a predecessor tenant prior to
such commencement, to be Landlord’s property and to be part of the Center and of the real
property on which it is located) and shall include items described in any of the other clauses
of
Section 9.2(b) only to the extent such items are installed by Tenant in such additional Premises
at Tenant’s sole expense.




          (e) Tenant’s Rights to Modify. Etc. and Remove Tenant’s Property. As provided in
Sections 9.1 and 9.2, but subject to any limitations expressly set forth in this Article 9,
Tenant shall generally have the right throughout the term of this Lease to install, alter,
modify, improve, replace and remove Tenant’s Property without Landlord’s consent and shall
generally have the right at the termination or expiration of this Lease to remove Tenant’s
Property, provided that Tenant shall, at all times prior to the lapse (if any),
unexercised, of Landlord’s purchase option under Section 9.2(g) with respect to the Option
Property, maintain in the Premises a quality and quantity of laboratory casework, lab benches
and built-in fume hoods that is not materially less than the quality and quantity of such items
located in the Premises on the Commencement Date (subject to the effects of ordinary wear and
tear and to the effects of damage, destruction or other casualty, the latter of which shall be
governed by the provisions of Article 15 hereof).




          (f) Tenant’s Right to Encumber Tenant’s Property. Tenant shall also have the
right, notwithstanding any other provisions of this Article 9 (including, but not limited to,
Landlord’s purchase option for the Option Property pursuant to Section 9.2(g) below), to use
Tenant’s Property as security for third-party financing during the term of this Lease, and
Landlord agrees to cooperate in all reasonable respects with any such third-party financing
sought by Tenant against the security of Tenant’s Property, including recognition by Landlord of
the lender’s right, subject to reasonable conditions, to foreclose upon and remove Tenant’s
Property upon a default by Tenant under such financing.




          (g)
Landlord’s Purchase Option. Landlord shall have the option, exercisable by
written notice to Tenant no less than ninety (90) days before the expiration of the term of this
Lease (or concurrently with any earlier termination of this Lease by Landlord pursuant to a
default by Tenant, if applicable), to purchase from Tenant (and thereby require Tenant to leave
behind in the Premises upon such expiration or termination, notwithstanding any other provisions of
this Section 9.2) all then existing Option Property for a purchase price of Six Hundred Fifty
Thousand Dollars ($650,000.00) payable to Tenant in cash concurrently with and in exchange for
Tenant’s delivery to Landlord of a bill of sale, in form and substance reasonably satisfactory to
Landlord, conveying to Landlord all such Option Property in its then existing condition, as is, but
free and clear of any liens or encumbrances created by or through Tenant. If Landlord does not
timely exercise such purchase option, then Tenant shall have the same right to remove the Option
Property from the Premises prior to or upon termination or expiration of this Lease as Tenant has
with respect to the rest of Tenant’s Property, subject to any express conditions or restrictions
set forth in this Article 9 with respect to such removal.




     9.3 Tenant Fixtures. Subject to Sections 9.2 and 9.5, Tenant may install,
remove and reinstall Tenant’s Property and other trade fixtures without Landlord’s prior written
consent, except that installation and removal of any fixtures which affect the exterior or
structural portions of the buildings in which the Premises are located or the building systems
therein shall require




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Landlord’s written approval, which approval shall not be unreasonably withheld or delayed.
Subject to the provisions of Section 9.5, the foregoing shall apply to Tenant’s signs, logos and
insignia, all of which Tenant shall have the right to place and remove and replace (a) only with
Landlord’s prior written consent as to location, size and composition, which consent shall not be
unreasonably withheld or delayed, and (b) only in compliance with all restrictions and
requirements of applicable law and of any covenants, conditions and restrictions or other written
agreements now or hereafter applicable to the Center. Tenant shall immediately repair any damage
caused by installation and removal of fixtures under this Section 9.3.




     9.4 No Liens. Tenant shall at all times keep the Premises, the buildings in which the
Premises are located and the Center free from all liens and claims of any contractors,
subcontractors, materialmen, suppliers or any other parties employed either directly or indirectly
by Tenant in construction work on the Premises or in the Center. Notwithstanding the preceding
sentence, Tenant may contest any claim of lien, but only if, prior to such contest, Tenant either
(i) posts security in the amount of the claim, plus estimated costs and interest, or (ii) records a
bond of a responsible corporate surety in such amount as may be required to release the lien from
the applicable buildings or improvements and the Center. Tenant shall indemnify, defend and hold
Landlord harmless against any and all liability, loss, damage, cost and other expenses, including,
without limitation, reasonable attorneys’ fees, arising out of claims of any lien for work
performed or materials or supplies furnished at the request of Tenant or persons claiming under
Tenant.



     9.5 Signs. Without limiting the generality of the provisions of Section 9.3 hereof,
Tenant shall have the right to display its corporate name and logo on the buildings in which the
Premises are located and in front of the principal entrances to the Premises, subject to Landlord’s
prior approval as to location, size, design and composition (which approval shall not be
unreasonably withheld or delayed), subject to the established sign criteria for the Britannia
Pointe Grand Business Park and subject to all restrictions and requirements of applicable law and
of any covenants, conditions and restrictions or other written agreements now or hereafter
applicable to the Center. Landlord hereby expressly confirms that it has already approved all of
Tenant’s signage existing on and about the Premises as of the Commencement Date, and that in the
event
a new lobby is constructed as contemplated in Section 2.3(c) above, Landlord will approve, at
Tenant’s request, any new exterior signage that is substantially similar to or reasonably
comparable to the signage then maintained, with Landlord’s consent, by other major tenants in the
Center.



10. MAINTENANCE AND REPAIRS




     10.1 Landlord’s Work.



          (a) Landlord shall repair and maintain or cause to be repaired and maintained the
driveways, parking areas, landscaping and other Common Areas of the Center and the structural roof,
roof membrane, exterior walls, foundation and other structural portions of the buildings in which
the Premises are located. The cost of all work performed by Landlord under this Section 10.1 shall
be an Operating Expense hereunder, except to the extent such work (i) is required due to the
negligence of Landlord, (ii) is a capital expenditure not includible as an Operating Expense under
Section 7.2 hereof, (iii) is required due to the negligence or willful misconduct of Tenant or its
agents, employees or invitees (in which event Tenant shall bear the full cost of such work pursuant
to the indemnification provided in Section 12.6 hereof, subject to the release set forth in Section
12.4 hereof), or (iv) involves repair or maintenance of the roof membrane on any of the applicable
buildings (in which event there shall be charged back directly to Tenant, as additional rent and
not as an Operating Expense, but subject to the same limitations set forth for Operating Expenses
in Section 7.2 for purposes of determining what are capital items and what portion, if any, of
capital items can properly be allocated to a particular year or other applicable period, a prorata
share of the cost of such repair or maintenance calculated on the basis of the percentage of the
applicable building that is occupied by Tenant). Tenant knowingly and voluntarily waives the right
to make repairs at Landlord’s expense, except to the





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extent permitted by Section 10.1(b) below, or to offset the cost thereof against rent, under any
law, statute, regulation or ordinance now or hereafter in effect.




          (b) If Landlord fails to perform any repairs or maintenance required to be performed by
Landlord on the buildings in which the Premises are located under Section 10.1(a) and such
failure continues for thirty (30) days or more after Tenant gives Landlord written notice of such
failure (or, if such repairs or maintenance cannot reasonably be performed within such 30-day
period, then if Landlord fails to commence performance within such 30-day period and thereafter to
pursue such performance diligently to completion), then Tenant shall have the right to perform
such repairs or maintenance and Landlord shall reimburse Tenant for the reasonable cost thereof
within fifteen (15) days after written notice from Tenant of the completion and cost of such work,
accompanied by copies of invoices or other reasonable supporting documentation. Under no
circumstances, however, shall Tenant have any right to offset the cost of any such work against
rent or other charges falling due from time to time under this Lease.




     10.2 Tenant’s Obligation For Maintenance.



          (a) Good Order. Condition And Repair. Except as provided in Section 10.1 hereof, and
except for damage caused by Landlord or its agents, employees or contractors (which shall be the
sole responsibility of Landlord, subject to the release set forth in Section 12.4 hereof) or by an
event of casualty or condemnation (which shall be governed by Article 15 hereof), Tenant at its
sole cost and expense shall keep and maintain in good and sanitary order, condition and repair the
Premises and every part thereof, wherever located, including but not limited to the signs,
interior, ceiling, electrical system, plumbing system, telephone and communications systems of the
buildings in which the Premises are located, the HVAC equipment and related mechanical systems
serving the Premises (for which equipment and systems Tenant shall enter into a service contract
with a person or entity designated or approved by Landlord), all doors, door checks, windows, plate
glass, door fronts, exposed plumbing and sewage and other utility facilities, fixtures, lighting,
wall surfaces, floor surfaces and ceiling surfaces of the Premises and all other interior repairs,
foreseen and unforeseen, with respect to the Premises, as required.




          (b) Landlord’s Remedy. If Tenant, after notice from Landlord, fails to make or perform
promptly any repairs or maintenance which are the obligation of Tenant hereunder, Landlord shall
have the right, but shall not be required, to enter the Premises and make the repairs or perform
the maintenance necessary to restore the Premises to good and sanitary order, condition and repair.
Immediately on demand from Landlord, the cost of such repairs shall be due and payable by Tenant to
Landlord.




          (c) Condition Upon Surrender. At the expiration or sooner termination of this Lease,
Tenant shall surrender the Premises and the Improvements, including any additions, alterations and
improvements thereto, broom clean, in good and sanitary order, condition and repair, ordinary wear
and tear excepted, first, however, removing all goods and effects of Tenant and all and fixtures
and items required to be removed or specified to be removed at Landlord’s election pursuant to this
Lease (including, but not limited to, any such removal required as a result of an election duly
made by Landlord to require such removal as contemplated in Section 9.2), and repairing any damage
caused by such removal. Tenant shall not have the right to remove fixtures or equipment if Tenant
is in default hereunder, beyond any applicable cure period, unless Landlord specifically waives
this provision in writing. Tenant expressly waives any and all interest in any personal property
and trade fixtures not removed from the Premises by Tenant at the expiration or termination of this
Lease, agrees that any such personal property and trade fixtures may, at Landlord’s election, be
deemed to have been abandoned by Tenant, and authorizes Landlord (at its election and without
prejudice to any other remedies under this Lease or under applicable law) to remove and either
retain, store or dispose of such property at Tenant’s cost and expense, and Tenant waives all
claims against Landlord for any damages resulting from any such removal, storage, retention or
disposal.




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11. USE OF PREMISES




     11.1 Permitted Use. Subject to Sections 11.3, 11.4 and 11.6 hereof, Tenant shall use
the Premises solely for a laboratory research and development facility, including (but not limited
to) wet chemistry and biology labs, clean rooms, light manufacturing, storage and use of toxic and
radioactive materials (subject to the provisions of Section 11.6 hereof), storage and use of
laboratory animals, administrative offices, and other lawful purposes reasonably related to or
incidental to such specified uses (subject in each case to receipt of all necessary approvals from
the City of South San Francisco and other governmental agencies having jurisdiction over the
Premises), and for no other purpose.



     11.2 [Omitted.]



     11.3 No Nuisance. Tenant shall not use the Premises or the Center for or carry on or
permit within the Center or any part thereof any offensive, noisy or dangerous trade, business,
manufacture, occupation, odor or fumes, or any nuisance or anything against public policy, nor
interfere with the rights or business of Landlord in the Premises or the Center, nor commit or
allow to be committed any waste in, on or about the Center. Tenant shall not do or permit anything
to be done in or about the Center, nor bring nor keep anything therein, which will in any way cause
the Center to be uninsurable with respect to the insurance required by this Lease or with respect
to standard fire and extended coverage insurance with vandalism, malicious mischief and riot
endorsements.



     11.4 Compliance With Laws. Tenant shall not use the Premises or the Center or permit
the Premises or the Center to be used in whole or in part for any purpose or use that is in
violation of any applicable laws, ordinances, regulations or rules of any governmental agency or
public authority. Tenant shall keep the Premises and Improvements therein equipped with all safety
appliances required by law, ordinance or insurance on the Center, or any order or regulation of any
public authority, because of Tenant’s particular use of the Premises and the Center. Tenant shall
procure all licenses and permits required for Tenant’s use of the Premises and the Center. Tenant
shall use the Premises and the Center in strict accordance with all applicable ordinances, rules,
laws and regulations and shall comply with all requirements of all governmental authorities now in
force or which may hereafter be in force pertaining to the use of the Premises and the Center by
Tenant, including, without limitation, regulations applicable to
noise, water, soil and air pollution, and making such nonstructural alterations and additions
thereto in the Premises or the Center as may be required from time to time by such laws,
ordinances, rules, regulations and requirements of governmental authorities or insurers of the
Center (collectively, “Requirements”) because of Tenant’s construction of improvements in or other
particular use of the Premises or the Center. Any structural alterations or additions required from
time to time by applicable Requirements because of Tenant’s construction of improvements in the
Premises or other particular use of the Premises or the Center shall, at Landlord’s election,
either (i) be made by Tenant, at Tenant’s sole cost and expense, in accordance with the procedures
and standards set forth in Section 9.1 for alterations by Tenant, or (ii) be made by Landlord at
Tenant’s sole cost and expense, in which event Tenant shall pay to Landlord as additional rent,
within ten (10) days after demand by Landlord, an amount equal to all reasonable costs incurred by
Landlord in connection with such alterations or additions. The judgment of any court, or the
admission by Tenant in any proceeding against Tenant, that Tenant has violated any law, statute,
ordinance or governmental rule, regulation or requirement shall be conclusive of such violation as
between Landlord and Tenant.



     11.5 Liquidation Sales. Tenant shall not conduct or permit to be conducted any
auction, bankruptcy sale, liquidation sale, or going out of business sale, in, upon or about the
Premises or the Center, whether said auction or sale be voluntary, involuntary or pursuant to any
assignment for the benefit of creditors, or pursuant to any bankruptcy or other insolvency
proceeding.



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     11.6 Environmental Matters.



          (a) For purposes of this Section, “hazardous substance” shall mean the substances
included within the definitions of the term “hazardous substance” under (i) the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended, 42 U.S.C. §§ 9601
et seq., and the regulations promulgated thereunder, as amended, (ii) the California
Carpenter-Presley-Tanner Hazardous Substance Account Act, California Health & Safety Code §§ 25300
et seq., and regulations promulgated thereunder, as amended, (iii) the Hazardous Materials Release
Response Plans and Inventory Act, California Heath & Safety Code
§§ 25500 et seq., and regulations
promulgated thereunder, as amended, and (iv) petroleum; “hazardous waste” shall mean (i)
any waste listed as or meeting the identified characteristics of a “hazardous waste” under the
Resource Conservation and Recovery Act of 1976, 42 U.S.C. §§ 6901 et seq., and regulations
promulgated pursuant thereto, as amended (collectively, “RCRA”). (ii) any waste meeting the
identified characteristics of “hazardous waste,” “extremely hazardous waste” or “restricted
hazardous waste” under the California Hazardous Waste Control Law, California Health & Safety Code
§§ 25100 et seq., and regulations promulgated pursuant thereto, as amended (collectively, the
“CHWCL”). and/or (iii) any waste meeting the identified characteristics of “medical waste” under
California Health & Safety Code §§ 25015-25027.8, and regulations promulgated thereunder, as
amended; and “hazardous waste facility” shall mean a hazardous waste facility as defined
under the CHWCL.




          (b) Without
limiting the generality of the obligations set forth in Section 1.1 4 of this
Lease:




               (i) Tenant shall not cause or permit any hazardous substance or
hazardous waste to be brought upon, kept, stored or used in or about the Premises or the Center
without the prior written consent of Landlord, which consent shall not be unreasonably withheld,
except that Tenant, in connection with its permitted use of the Premises as provided in Section
11.1, may keep, store and use materials that constitute hazardous substances which are customary
for such permitted use, provided such hazardous substances are kept, stored and used in quantities
which are customary for such permitted use and are kept, stored and used in full compliance with
clauses (ii) and (iii) immediately below.



               (ii) Tenant shall comply with all applicable laws, rules, regulations, orders, permits,
licenses and operating plans of any governmental authority with respect to the receipt, use,
handling, generation, transportation, storage, treatment and/or disposal of hazardous substances or
wastes by Tenant or its agents or employees, and Tenant will provide Landlord with copies of all
permits, licenses, registrations and other similar documents that authorize Tenant to conduct any
such activities in connection with its authorized use of the Premises and the Center from time to
time.



               (iii) Tenant shall not (A) operate on or about the Premises or the Center any facility
required to be permitted or licensed as a hazardous waste facility or for which interim status as
such is required, nor (B) store any hazardous wastes on or about the Premises or the Center for
ninety (90) days or more, nor (C) conduct any other activities on or about the Premises or the
Center that could result in the Premises or the Center being deemed to be a “hazardous waste
facility” (including, but not limited to, any storage or treatment of hazardous substances or
hazardous wastes which could have such a result).



               (iv) Tenant shall comply with all applicable laws, rules, regulations, orders and permits
relating to underground storage tanks installed by Tenant or its agents or employees or at the
request of Tenant (including any installation, monitoring, maintenance, closure and/or removal of
such tanks) as such tanks are defined in California Health & Safety Code § 2528l(x), including,
without limitation, complying with California Health & Safety Code §§ 25280-25299.7 and the
regulations promulgated thereunder, as amended. Tenant shall furnish to Landlord copies of all
registrations and permits issued to or held by Tenant from time to time for any and all
underground storage tanks located on or under the Premises or the Center.



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               (v) If applicable, Tenant shall provide Landlord in writing the
following information and/or documentation within thirty (30) days after the Commencement Date,
and shall update such information at least annually, on or before each anniversary of the
Commencement Date, to reflect any change in or addition to the required information and/or
documentation (provided, however, that in the case of the materials described in
subparagraphs (B), (C) and (E) below, Tenant shall not be required to deliver copies of such
materials to Landlord but shall maintain copies of such materials to such extent and for such
periods as may be required by applicable law and shall permit Landlord or its representatives to
inspect and copy such materials during normal business hours at any time and from time to time
upon reasonable notice to Tenant):



                    (A) A list of all hazardous substances and/or wastes that Tenant
receives, uses, handles, generates, transports, stores, treats or disposes of from time to time
in connection with its operations on the Premises and in the Center.



                    (B) All Material Safety Data Sheets (“MSDS’s”), if any,
required to be completed with respect to operations of Tenant at the Premises and in the Center
from time to time in accordance with Title 26, California Code of Regulations § 8-5194 or 42
U.S.C. § 11021, or any amendments thereto, and any Hazardous Materials Inventory Sheets that
detail the MSDS’s.



                    (C) All hazardous waste manifests (as defined in Title 26,
California Code of Regulations § 22-66481), if any, that Tenant is required to complete from time
to time in connection with its operations at the Premises and in the Center.



                    (D) A copy of any Hazardous Materials Management Plan
required from time to time with respect to Tenant’s operations at the Premises and in the Center,
pursuant to California Health & Safety Code §§ 25500 et seq., and any regulations promulgated
thereunder, as amended.



                    (E) Any Contingency Plans and Emergency Procedures
required of Tenant from time to time due to its operations in accordance with Title 26,
California Code of Regulations §§ 22-67140 et seq., and any amendments thereto, and any
Training Programs and Records required under Title 26, California Code of Regulations, §
22-67105, and
any amendments thereto.



                    (F) Copies of any biennial reports to be furnished to the
California Department of Health Services from time to time relating to hazardous substances or
wastes, pursuant to Title 26, California Code of Regulations, § 22-66493, and any amendments
thereto.



                    (G) Copies of all industrial wastewater discharge permits issued
to or held by Tenant from time to time in connection with its operations on the Premises and in
the Center.



                    (H) Copies of any other lists or inventories of hazardous
substances and/or wastes on or about the Premises and/or the Center that Tenant is otherwise
required to prepare and file from time to time with any governmental or regulatory
authority.



               (vi) Tenant shall secure Landlord’s prior written approval for any proposed receipt,
storage, possession, use, transfer or disposal of “radioactive materials” or “radiation,” as such
materials are defined in Title 26, California Code of Regulations § 17-30100, and/or any other
materials possessing the characteristics of the materials so defined, which approval Landlord may
withhold in its sole and absolute discretion; provided, that such approval shall not be
required for any radioactive materials for which Tenant has secured prior written approval of the
Nuclear Regulatory Commission and delivered to Landlord a copy of such approval. Tenant, in
connection with any such authorized receipt, storage, possession, use, transfer or disposal of
radioactive materials or radiation, shall:



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                    (A) Comply with all federal, state and local laws, rules,
regulations, orders, licenses and permits issued to or applicable to Tenant with respect to
its business operations on the Premises and in the Center;



                    (B) Maintain, to such extent and for such periods as may be
required by applicable law, and permit Landlord and its representatives to inspect during normal
business hours at any time and from time to time upon reasonable notice to Tenant, a list of all
radioactive materials or radiation received, stored, possessed, used, transferred or disposed of
by Tenant or in connection with the operation of Tenant’s business on the Premises and in the
Center from time to time, to the extent not already disclosed through delivery of a copy of a
Nuclear Regulatory Commission approval with respect thereto as contemplated above; and



                    (C) Maintain, to such extent and for such periods as may be
required by applicable law, and permit Landlord or its representatives to inspect during normal
business hours at any time and from time to time upon reasonable notice to Tenant, all licenses,
registration materials, inspection reports, governmental orders and permits in connection with
the receipt, storage, possession, use, transfer or disposal of radioactive materials or radiation
by Tenant or in connection with the operation of Tenant’s business on the Premises and in the
Center from time to time.



               (vii) Tenant shall comply with any and all applicable laws, rules, regulations and orders
of any governmental authority with respect to the release into the environment of any hazardous
wastes or substances or radiation or radioactive materials by Tenant or its agents or employees.
Tenant shall give Landlord immediate verbal notice of any unauthorized release of any such
hazardous wastes or substances or radiation or radioactive materials into the environment, and
shall follow such verbal notice with written notice to Landlord of such release within ten (10)
business days after the date Tenant became aware of such release.



               (viii) Tenant shall indemnify, defend and hold Landlord harmless from and against any and
all claims, losses (including, but not limited to, loss of rental income), damages, liabilities,
costs, legal fees and expenses of any sort arising out of or relating to (A) any failure by Tenant
to comply with any provisions of this paragraph 11.6(b), or (B) any receipt, use handling,
generation, transportation, storage, treatment, release and/or disposal of any hazardous substance or waste or any radioactive material or radiation on or about the Premises or the Center
as a proximate result of Tenant’s use of the Premises or the Center or as a result of any
intentional or negligent acts or omissions of Tenant or of any agent, employee or invitee of
Tenant.



               (ix) Tenant shall cooperate with Landlord in furnishing Landlord with complete
information regarding Tenant’s receipt, handling, use, storage, transportation, generation,
treatment and/or disposal of any hazardous substances or wastes or radiation or radioactive
materials. Upon request, Tenant shall grant Landlord reasonable access at reasonable times to the
Premises to inspect Tenant’s receipt, handling, use, storage, transportation, generation,
treatment and/or disposal of hazardous substances or wastes or radiation or radioactive materials,
provided that Landlord uses reasonable efforts to avoid any unreasonable interference with
Tenant’s business operations in exercising such access and inspection rights, without thereby
being deemed guilty of any disturbance of Tenant’s use or possession and without being liable to
Tenant in any manner.



               (x) Notwithstanding Landlord’s rights of inspection and review under this paragraph
11.6(b), Landlord shall have no obligation or duty to so inspect or review, and no third party
shall be entitled to rely on Landlord to conduct any sort of inspection or review by reason of the
provisions of this paragraph 11.6(b).



               (xi) If Tenant receives, handles, uses, stores, transports, generates,
treats and/or disposes of any hazardous substances or wastes or radiation or radioactive materials
on or about the Premises or the Center at any time during the term of this Lease, then within



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thirty (30) days after the termination or expiration of this Lease, Tenant at its sole cost and
expense shall obtain and deliver to Landlord an environmental study, performed by an expert
reasonably satisfactory to Landlord, evaluating the presence or absence of hazardous substances
and wastes, radiation and radioactive materials on and about the Premises and the Center. Such
study shall be based on a reasonable and prudent level of tests and investigations of the
Premises and surrounding areas (if appropriate), which tests shall be conducted no earlier than
the date of termination or expiration of this Lease. Liability for any remedial actions
required or recommended on the basis of such study shall be allocated in accordance with
Sections 11.4, 11.6,12.6 and other applicable provisions of this Lease.




          (c) Landlord shall indemnify, defend and hold Tenant harmless from and against any and all
claims, losses, damages, liabilities, costs, legal fees and expenses of any sort arising out of
or relating to (i) the presence on the Premises or in the Center of any hazardous substances or
wastes or radiation or radioactive materials as of the Commencement Date (other than as a
result of any intentional or negligent acts or omissions of Tenant or of any agent, employee or
invitee of Tenant, or as a result of or in connection with Tenant’s prior business operations
on the Premises and in the Center), and/or (ii) any unauthorized release into the environment
(including, but not limited to, the Premises and/or the Center) of any hazardous substances or
wastes or radiation or radioactive materials to the extent such release results from the
negligence of or willful misconduct or omission by Landlord or its agents or employees.




          (d) The provisions of this Section 11.6 shall survive the termination of this Lease.




12. INSURANCE AND INDEMNITY




     12.1 Insurance.



          (a) Tenant shall procure and maintain in full force and effect at all times during the term
of this Lease, at Tenant’s cost and expense, commercial general liability insurance to protect
against liability to the public, or to any invitee of Tenant or Landlord, arising out of or
related to the use of or resulting from any accident occurring in, upon or about the Premises,
with limits of liability of not less than (i) Two Million Dollars ($2,000,000.00) for injury to
or death of one person, (ii) Five Million Dollars ($5,000,000.00) for personal injury or
death, per occurrence, and (iii) One Million Dollars ($1,000,000.00) for property damage,
or combined single limit of liability of not less than Five Million Dollars ($5,000,000.00).
Such insurance shall name Landlord, its general partners, its Managing Agent and any lender
holding a deed of trust on the Center or any portion thereof from time to time (as designated
in writing by Landlord to Tenant from time to time) as additional insureds thereunder. The
amount of such insurance shall not be construed to limit any liability or obligation of Tenant
under this Lease. Tenant shall also procure and maintain in full force and effect at all times
during the term of this Lease, at Tenant’s cost and expense, products/completed operations
coverage in an amount of not less than Five Million Dollars ($5,000.000.00) and on other terms
customary in Tenant’s industry for companies engaged in the marketing of products on a scale
comparable to that in which Tenant is engaged from time to time.




          (b) Landlord shall procure and maintain in full force and effect at all times during the
term of this Lease, at Landlord’s cost and expense (but reimbursable as an Operating Expense
under Section 7.2 hereof), commercial general liability insurance to protect against liability
arising out of or related to the use of or resulting from any accident occurring in, upon or
about the Center, with combined single limit of liability of not less than Five Million Dollars
($5,000,000.00) per occurrence for bodily injury and property damage.




          (c) Landlord shall procure and maintain in full force and effect at all times during the
term of this Lease, at Landlord’s cost and expense (but reimbursable as an Operating Expense
under Section 7.2 hereof), policies of property insurance providing protection against “all risk
of direct physical loss” (as defined by and detailed in the Insurance Service Office’s




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Commercial Property Program “Cause of Loss-Special Form [CP1030]” or its equivalent) for the shell
of the buildings in which the Premises are located and for the improvements in the Common Areas of
the Center, on a full replacement cost basis (with no co-insurance or, if coverage without
co-insurance is not reasonably available, then on an “agreed amount” basis). Such insurance shall
include earthquake and environmental coverage and shall have such commercially reasonable
deductibles and other terms as Landlord in its reasonable discretion determines to be appropriate.
Landlord shall have no obligation to carry property damage insurance for Tenant’s Property, for
Tenant’s personal property or, except as expressly set forth in paragraph (d) below, for any
alterations, additions or improvements installed by Tenant or by  any predecessor tenant in the
buildings in which the Premises are located or on or about the Center.




          (d) Landlord shall procure and maintain in full force and effect at all times during the term
of this Lease, at Tenant’s cost and expense (chargeable, in Landlord’s discretion, either as an
Operating Expense allocable 100% to Tenant or as a direct pass-through to Tenant), policies of
property insurance providing protection against “all risk of direct physical loss” (as defined by
and detailed in the Insurance Service Office’s Commercial Property Program “Cause of Loss-Special
Form [CP1030]” or its equivalent) for the tenant improvements existing in the Premises on the
Commencement Date (other than Tenant’s Property, which it shall be Tenant’s responsibility to
insure pursuant to paragraph (e) below), on a full replacement cost basis (with no co-insurance or,
if coverage without co-insurance is not reasonably available, then on an “agreed amount” basis).
Such insurance may have such commercially reasonable deductibles and other terms as Landlord in its
reasonable discretion determines to be appropriate, and shall name both Tenant and Landlord as
insureds as their interests may appear. The coverage required to be maintained under this paragraph
(d) may, in Landlord’s discretion, be added to or combined with Landlord’s master policy carried
under paragraph (c) above (but, if not actually carried as part of Landlord’s master policy under
paragraph (c) above, shall not carry a premium materially higher than would apply if such coverage
were being carried as part of Landlord’s master policy under paragraph (c) above), in which event
Tenant shall be named as an insured only with respect to the portion of the policy that covers
tenant improvements as described in this paragraph (d). Tenant shall provide to Landlord from time
to time, upon request by Landlord annually or at other reasonable intervals, an updated schedule of
values for such existing tenant improvements, and Landlord shall have no obligation or liability
with respect to any underinsurance of tenant improvements that results from Tenant’s failure to
keep Landlord informed from time to time, on a current basis, of the insurable value of such tenant
improvements.




          (e) Tenant shall procure and maintain in full force and effect at all times during the term of
this Lease, at Tenant’s cost and expense, policies of property insurance providing protection
against “all risk of direct physical loss” (as defined by and detailed in the Insurance Service
Office’s Commercial Property Program “Cause of Loss-Special Form [CP1030]” or its equivalent) for
Tenant’s Property as it exists in the Premises on the Commencement Date and for all other
alterations, additions and improvements installed by Tenant from time to time in or about the
Premises after the Commencement Date (except as Landlord and Tenant may otherwise mutually agree in
writing from time to time), on a full replacement cost basis (with no co-insurance or, if coverage
without co-insurance is not reasonably available, then on an “agreed amount” basis). Such insurance
may have such commercially reasonable deductibles and other terms as Tenant in its reasonable
discretion determines to be appropriate, and shall name both Tenant and Landlord as insureds as
their interests may appear.




     12.2
Quality Of Policies And Certificates. All policies of insurance required
hereunder shall be issued by responsible insurers and, in the case of policies carried or required
to be carried by Tenant, shall be written as primary policies not contributing with and not in
excess of any coverage that Landlord may carry. Tenant shall deliver to Landlord copies of policies
or certificates of insurance showing that said policies are in effect. The coverage provided by
such policies shall include the clause or endorsement referred to in Section 12.4. If Tenant fails
to acquire, maintain or renew any insurance required to be maintained by it under this Article 12
or




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to pay the premium therefor, then Landlord, at its option and in addition to its other
remedies, but without obligation so to do, may procure such insurance, and any sums expended by it
to procure any such insurance on behalf of or in place of Tenant shall be repaid upon demand, with
interest as provided in Section 3.2 hereof. Tenant shall obtain written undertakings from each
insurer under policies required to be maintained by it to notify all insureds thereunder at least
thirty (30) days prior to cancellation of coverage.




     12.3 Workers’ Compensation. Tenant shall maintain in full force and effect during the
term of this Lease workers’ compensation insurance in at least
the minimum amounts required by law,
covering all of Tenant’s employees working on the Premises or in the Center.



     12.4 Waiver Of Subrogation. To the extent permitted by law and without affecting the
coverage provided by insurance required to be maintained hereunder, Landlord and Tenant each waive
any right to recover against the other with respect to
(i) damage to property, (ii) damage to the
Premises or the Center or any part thereof, or (iii) claims arising by reason of any of the
foregoing, but only to the extent that any of the foregoing damages and claims under
clauses (i)-(iii) hereof are covered, and only to the extent of such coverage, by casualty
insurance actually carried or required to be carried hereunder by either Landlord or Tenant. This
provision is intended to waive fully, and for the benefit of each party, any rights and claims
which might give rise to a right of subrogation in any insurance carrier. Each party shall procure
a clause or endorsement on any casualty insurance policy denying to the insurer rights of
subrogation against the other party to the extent rights have been waived by the insured prior to
the occurrence of injury or loss. Coverage provided by insurance maintained by Tenant shall not be
limited, reduced or diminished by virtue of the subrogation waiver herein contained.



     12.5 Increase In Premiums. Tenant shall do all acts and pay all expenses necessary to insure
that the Premises are not used for purposes prohibited by any applicable fire insurance, and that
Tenant’s use of the Premises and the Center complies with all requirements necessary to obtain any
such insurance. If Tenant uses or permits the Premises to be used in a manner which increases the
existing rate of any insurance carried by Landlord on the Center and such use continues for longer
than a reasonable period specified in any written notice from Landlord to Tenant identifying the
rate increase and the factors causing the same, then Tenant shall pay the amount of the increase in
premium caused thereby, and Landlord’s costs of obtaining other replacement insurance policies,
including any increase in premium, within ten (10) days after demand therefor by Landlord.



     12.6 Indemnification.



          (a) Tenant shall indemnify, defend and hold Landlord and its partners, shareholders, officers,
directors, agents and employees harmless from any and all liability for injury to or death of any
person, or loss of or damage to the property of any person, and all actions, claims, demands, costs
(including, without limitation, reasonable attorneys’ fees), damages or expenses of any kind
arising therefrom which may be brought or made against Landlord or which Landlord may pay or incur
by reason of the use, occupancy and enjoyment of the Premises and the Center by Tenant or any
invitees, sublessees, licensees, assignees, employees, agents or contractors of Tenant or holding
under Tenant from any cause whatsoever other than negligence or willful misconduct or omission by
Landlord, its agents or employees. Landlord and its partners, shareholders, officers, directors,
agents and employees shall not be liable for, and Tenant hereby waives all claims against such
persons for, damages to goods, wares and merchandise in or upon the Premises or the Center, or for
injuries to Tenant, its agents or third persons in or upon the Premises or the Center, from any
cause whatsoever other than negligence or willful misconduct or omission by Landlord, its agents or
employees. Tenant shall give prompt notice to Landlord of any casualty or accident in, on or about
the Premises or the Center.




          (b) Landlord shall indemnify, defend and hold Tenant and its partners, shareholders,
officers, directors, agents and employees harmless from any and all liability for injury to
or death of any person, or loss of or damage to the property of any person, and all





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actions, claims, demands, costs (including, without limitation, reasonable attorneys’ fees),
damages or expenses of any kind arising therefrom which may be brought or made against Tenant or
which Tenant may pay or incur, to the extent such liabilities or other matters arise in, on or
about the Premises or the Center by reason of any negligence or willful misconduct or omission by
Landlord, its agents or employees.




     12.7 Blanket Policy. Any policy required to be maintained hereunder may be
maintained under a so-called “blanket policy” insuring other parties and other locations so long
as the amount of insurance required to be provided hereunder is not thereby diminished.



13. SUBLEASE AND ASSIGNMENT




     13.1 Assignment of Lease and Sublease of Premises. Except in the case of a
Permitted Transfer, Tenant shall not have the right or power to assign its interest in this Lease,
or make any sublease of the Premises or any portion thereof, nor shall any interest of Tenant under
this Lease be assignable involuntarily or by operation of law, without on each occasion obtaining
the prior written consent of Landlord, which consent shall not be unreasonably withheld or delayed.
Any purported sublease or assignment of Tenant’s interest in this Lease requiring but not having
received Landlord’s consent thereto (to the extent such consent is required hereunder) shall be
void. Without limiting the generality of the foregoing, Landlord may withhold consent to any
proposed subletting or assignment for which consent is requested solely on the ground, if
applicable, that the use by the proposed subtenant or assignee is reasonably likely to be
incompatible with Landlord’s use of any adjacent property owned or operated by Landlord, unless the
proposed use is within the permitted uses specified in Section 11.1, in which event it shall not be
reasonable for Landlord to object to the proposed use. Except in the case of a Permitted Transfer,
any dissolution, consolidation, merger or other reorganization of Tenant, or any sale or transfer
of substantially all of the stock or assets of Tenant in a single transaction or series of related
transactions, shall be deemed to be an assignment hereunder and shall be void without the prior
written consent of Landlord as required above. Notwithstanding the foregoing, (i) any public
offering of the common stock of Tenant shall not be deemed to be an assignment hereunder; (ii) any
transfer of Tenant’s stock during any period in which Tenant has a class of stock listed on any
recognized securities exchange or traded in the NASDAQ over-the-counter market shall not be deemed
to be an assignment hereunder; (iii) any transfer of Tenant’s stock in connection with a bona fide
financing, capitalization or recapitalization of Tenant shall not be deemed to be an assignment
hereunder, provided that such financing, capitalization or recapitalization does not result in a
material reduction in Tenant’s net worth or materially change the nature of Tenant’s ongoing
business as a going concern; and (iv) Tenant shall have the right to assign this Lease or sublet
the Premises or any portion thereof, without Landlord’s consent (but with prior or concurrent
written notice by Tenant to Landlord, except to the extent Tenant is advised by its counsel that
such prior or concurrent notice would be in violation of applicable law, in which event Tenant
shall give such written notice as soon as reasonably possible after the giving of such notice is no
longer in violation of applicable law), to any Affiliate of Tenant, or to any entity which results
from a merger or consolidation with Tenant, or to any entity which acquires substantially all of
the stock or assets of Tenant as a going concern (hereinafter each a “Permitted Transfer”). For
purposes of the preceding sentence, an “Affiliate” of Tenant shall mean any entity in which Tenant
owns at least a fifty percent (50%) equity interest, any entity which owns at least a fifty percent
(50%) equity interest in Tenant, and/or any entity which is related to Tenant by a chain of
ownership interests involving at least a fifty percent (50%) equity interest at each level in the
chain. Landlord shall have no right to terminate this Lease in connection with, and shall have no
right to any sums or other economic consideration resulting from, any Permitted Transfer. Except as
expressly set forth in this Section 13.1, however, the provisions of Section 13.2 shall remain
applicable to any Permitted Transfer and the transferee under such Permitted Transfer shall be and
remain subject to all of the terms and provisions of this Lease.




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     13.2 Rights Of Landlord.



          (a) Consent by Landlord to one or more assignments of this Lease, or to one or more
sublettings of the Premises or any portion thereof, or collection of rent by Landlord from any
assignee or sublessee, shall not operate to exhaust Landlord’s rights under this Article 13, nor
constitute consent to any subsequent assignment or subletting. No assignment of Tenant’s interest
in this Lease and no sublease shall relieve Tenant of its obligations hereunder, notwithstanding
any waiver or extension of time granted by Landlord to any assignee or sublessee, or the failure of
Landlord to assert its rights against any assignee or sublessee, and regardless of whether
Landlord’s consent thereto is given or required to be given hereunder. In the event of a default by
any assignee, sublessee or other successor of Tenant in the performance of any of the terms or
obligations of Tenant under this Lease, Landlord may proceed directly against Tenant without the
necessity of exhausting remedies against any such assignee, sublessee or other successor. In
addition, Tenant immediately and irrevocably assigns to Landlord, as security for Tenant’s
obligations under this Lease, all rent from any subletting of all or a part of the Premises as
permitted under this Lease, and Landlord, as Tenant’s assignee and as attorney-in-fact for Tenant,
or any receiver for Tenant appointed on Landlord’s application, may collect such rent and apply it
toward Tenant’s obligations under this Lease; except that, until the occurrence of an act of
default by Tenant, Tenant shall have the right to collect such rent and to retain all sublease
profits (subject to the provisions of Section 13.2(c), below).




          (b) Upon any assignment of Tenant’s interest in this Lease for which Landlord’s consent is
required under Section 13.1 hereof, Tenant shall pay to Landlord, within ten (10) days after
receipt thereof by Tenant from time to time, one-half (1/2) of all cash sums and other economic
considerations received by Tenant in connection with or as a result of such assignment, after first
deducting therefrom (i) any costs incurred by Tenant for leasehold improvements (including, but not
limited to, third-party architectural and space planning costs) in the Premises in connection with
such assignment, (ii) any real estate commissions and/or reasonable attorneys’ fees incurred by
Tenant in connection with such assignment, and (iii) any economic consideration received by Tenant
as bona fide, reasonable compensation for personal property sold or leased by Tenant to the
assignee.




          (c) Upon any sublease of all or any portion of the Premises for which Landlord’s consent is
required under Section 13.1 hereof, Tenant shall pay to Landlord, within ten (10) days after
receipt thereof by Tenant from time to time, one-half (1/2) of all cash sums and other economic
considerations received by Tenant in connection with or as a result of such sublease, after first
deducting therefrom (i) the rental due hereunder for the corresponding period, prorated (on the
basis of the per-square-foot cost paid by Tenant for the entire Premises for the applicable period
under this Lease) to reflect the size of the subleased portion of the Premises, (ii) any costs
incurred by Tenant for leasehold improvements in the subleased portion of the Premises (including,
but not limited to, third-party architectural and space planning costs) for the specific benefit of
the sublessee in connection with such sublease, amortized over the term of the sublease, (iii) any
real estate commissions and/or reasonable attorneys’ fees incurred by Tenant in connection with
such sublease, amortized over the term of such sublease, and (iv) any economic consideration
received by Tenant as bona fide, reasonable compensation for personal property sold or leased by
Tenant to the sublessee.




14. RIGHT OF ENTRY AND QUIET ENJOYMENT




     14.1 Right Of Entry. Landlord and its authorized representatives shall have the
right to enter the Premises at any time during the term of this Lease-during normal business hours
and upon not less than twenty-four (24) hours prior notice, except in the case of emergency (in
which event no notice shall be required and entry may be made at any time), for the purpose of
inspecting and determining the condition of the Premises or for any other proper purpose including,
without limitation, to make repairs, replacements or improvements which Landlord may deem
necessary, to show the Premises to prospective purchasers, to show the Premises to prospective
tenants (but only during the final year of the term of this Lease), and to post notices



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of nonresponsibility. Landlord shall not be liable for inconvenience, annoyance, disturbance,
loss of business, quiet enjoyment or other damage or loss to Tenant by reason of making any
repairs or performing any work upon the Premises or the Center or by reason of erecting or
maintaining any protective barricades in connection with any such work, and the obligations of
Tenant under this Lease shall not thereby be affected in any manner
whatsoever, provided. however, Landlord shall use reasonable efforts to minimize the inconvenience to Tenant’s
normal business operations caused thereby.




     14.2 Quiet Enjoyment. Landlord covenants that Tenant, upon paying the rent and
performing its obligations hereunder and subject to all the terms and conditions of this Lease,
shall peacefully and quietly have, hold and enjoy the Premises and the Common Areas of the Center
throughout the term of this Lease, or until this Lease is terminated as provided by this Lease.



15. CASUALTY AND TAKING 



     15.1 Damage or Destruction.


          (a) If the Premises, or the Common Areas of the Center necessary for Tenant’s use and
occupancy of the Premises, are damaged or destroyed in whole or in part under circumstances in
which (i) repair and restoration is permitted under applicable governmental laws, regulations and
building codes then in effect and (ii) repair and restoration reasonably can be completed within a
period of one (1) year (or, in the case of an occurrence during the last year of the term of this
Lease, within a period of sixty (60) days) following the date of the occurrence, then Landlord, as
to the Common Areas of the Center and the cold shell of the buildings in which the Premises are
located, and Tenant, as to all other improvements existing in or about the Prmeises immediately
prior to such occurrence, shall commence and complete, with all due diligence and as promptly as is
reasonably practicable under the conditions then existing, all such repair and restoration as may
be required to return the affected portions of the Premises and the Center to a condition
comparable to that existing immediately prior to the occurrence. In the event of damage or
destruction the repair of which is not permitted under applicable governmental laws, regulations
and building codes then in effect, if such damage or destruction (despite being corrected to the
extent then permitted under applicable governmental laws, regulations and building codes) would
still materially impair Tenant’s ability to conduct its business in the Premises, then either party
may terminate this Lease as of the date of the occurrence by giving written notice to the other
within thirty (30) days after the date of the occurrence; if neither party timely elects such
termination, or if such damage or destruction does not materially impair Tenant’s ability to
conduct its business in the Premises, then this Lease shall continue in full force and effect,
except that there shall be an equitable adjustment in monthly minimum rental and of Tenant’s
Operating Cost Share of Operating Expenses, based upon the extent to which Tenant’s ability to
conduct its business in the Premises is impaired, and Landlord and Tenant respectively shall
restore the Common Areas and the cold shell of the applicable buildings and the other improvements
in and about such buildings to a complete architectural whole and to a functional condition. In the
event of damage or destruction which cannot reasonably be repaired
within one (1) year (or, in the
case of an occurrence during the last year of the term of this Lease, within a period of sixty (60)
days) following the date of the occurrence, then either Landlord or Tenant, at its election, may
terminate this Lease as of the date of the occurrence by giving written notice to the other within
thirty (30) days after the date of the occurrence; if neither party timely elects such termination,
then this Lease shall continue in full force and effect and Landlord and Tenant shall each repair
and restore applicable portions of the Premises and the Center in accordance with the first
sentence of this Section 15.1.




          (b) The respective obligations of Landlord and Tenant pursuant to Section 15.1 (a) are
subject to the following limitations:




               (i) If the occurrence results from a peril which is required to be insured pursuant to
Sections 12.1(c), (d) and (e) above, then Landlord and Tenant shall use their



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respective best efforts and cooperate diligently, reasonably and in good faith to recover any
available proceeds from the respective insurance which they are required to maintain pursuant to
Sections 12.1(c), (d) and/or (e), as applicable, and to divide or allocate such proceeds between
themselves in accordance with their respective rebuilding obligations under Section 15.l(a), and
the obligations of each party shall not exceed its respective share of the amount of insurance
proceeds received from insurers (or, in the case of any failure to maintain required insurance,
proceeds that reasonably would have been available if the required insurance had been maintained)
by reason of such occurrence, plus the amount of any deductible under the applicable insurance,
and, if such proceeds (including, in the case of a failure to maintain required insurance, any
proceeds that reasonably would have been available) are insufficient, either party may terminate
the Lease unless the other party promptly elects and agrees, in writing, to contribute the amount
of the shortfall; and



               (ii) If the occurrence results from a peril which is not required to be insured pursuant to
Sections 12.1(c), (d) and (e) above and is not actually insured, Landlord shall be required to
repair and restore the cold shells of the applicable buildings and the Common Areas to the extent
necessary for Tenant’s continued use and occupancy of the Premises, and Tenant shall be required
to repair and restore the other improvements in and about the Premises to the extent necessary for
Tenant’s continued use and occupancy of the Premises, provided that each party’s
obligation to repair and restore shall not exceed an amount equal to five percent (5%) of the
replacement cost of the cold shells of the applicable buildings and the Common Area improvements,
as to Landlord, or five percent (5%) of the replacement cost of the other improvements in and
about the Premises, as to Tenant; if the replacement cost as to either party exceeds such amount,
then the party whose limit has been exceeded may terminate this Lease unless the other party
promptly elects and agrees, in writing, to contribute the amount of the shortfall.



          (c) If this Lease is terminated pursuant to the foregoing provisions of this Section 15.1
following an occurrence which is a peril actually insured or required to be insured against
pursuant to Sections 12.1(c), (d) and (e), Landlord and Tenant agree (and any Lender shall be
asked to agree) that such insurance proceeds shall be allocated between Landlord and
Tenant in a manner which fairly and reasonably reflects their respective ownership rights
under this Lease, as of the termination or expiration of the term of this Lease, with respect
to the improvements, fixtures, equipment and other items to which such insurance proceeds are
attributable.




          (d) From and after the date of an occurrence resulting in damage to or destruction of the
Premises or of the Common Areas necessary for Tenant’s use and occupancy of the Premises, and
continuing until repair and restoration thereof are completed, there shall be an equitable
abatement of minimum rental and of Tenant’s Operating Cost Share of Operating Expenses based upon
the degree to which Tenant’s ability to conduct its business in the Premises is impaired.




     15.2 Condemnation.



          (a) If during the term of this Lease the Premises or the Common Areas of the Center, or any
substantial part of either, is taken by eminent domain or by reason of any public improvement or
condemnation proceeding, or in any manner by exercise of the right of eminent domain (including any
transfer in avoidance of an exercise of the power of eminent domain), or receives irreparable
damage by reason of anything lawfully done under color of public or other authority, then (i) this
Lease shall terminate as to the entire Premises at Landlord’s election by written notice given to
Tenant within sixty (60) days after the taking has occurred, and (ii) this Lease shall terminate as
to the entire Premises at Tenant’s election, by written notice given to Landlord within thirty (30)
days after the nature and extent of the taking have been finally determined, if the portion of the
Premises taken is of such extent and nature as substantially to handicap, impede or permanently
impair Tenant’s use of the balance of the Premises. If Tenant elects to terminate this Lease,
Tenant shall also notify Landlord of the date of termination, which date shall not be earlier than
thirty (30) days nor later than ninety (90) days after Tenant has





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notified Landlord of Tenant’s election to terminate, except that this Lease shall terminate on the
date of taking if such date falls on any date before the date of termination designated by Tenant.
If neither party elects to terminate this Lease as hereinabove provided, this Lease shall continue
in full force and effect (except that there shall be an equitable abatement of minimum rental and
of Tenant’s Operating Cost Share of Operating Expenses based upon the degree to which Tenant’s
ability to conduct its business in the Premises is impaired), Landlord shall restore the shell of
the buildings in which the Premises are located and Common Area improvements to a complete
architectural whole and a functional condition and as nearly as reasonably possible to the
condition existing before the taking, and Tenant shall restore the other improvements in the
Premises and Tenant’s other alterations, additions and improvements to a complete architectural
whole and a functional condition and as nearly as reasonably possible to the condition existing
before the taking. In connection with any such restoration, each party shall use its respective
best efforts (including, without limitation, any necessary negotiation or intercession with its
respective lender, if any) to ensure that any severance damages or other condemnation awards
intended to provide compensation for rebuilding or restoration costs are promptly collected and
made available to Landlord and Tenant in portions reasonably corresponding to the cost and scope
of their respective restoration obligations, subject only to such payment controls as either party
or its lender may reasonably require in order to ensure the proper application of such proceeds
toward the restoration of the Improvements. Each party waives the provisions of Code of Civil
Procedure Section 1265.130, allowing either party to petition the Superior Court to terminate this
Lease in the event of a partial condemnation of the Premises or the Center.




          (b) The respective obligations of Landlord and Tenant pursuant to Section 15.2(a) are
subject to the following limitations:




               (i) Each party’s obligation to repair and restore shall not exceed, net of any condemnation
awards or other proceeds available for and allocable to such
restoration as contemplated in Section 15.2(a), an amount equal to five percent (5%) of the replacement cost of the shell of the
buildings in which the Premises are located and the Common Area improvements, as to Landlord, or
five percent (5%) of the replacement cost of the other improvements in the Premises as to Tenant;
if the replacement cost as to either party exceeds such amount, then the party whose limit has been
exceeded may terminate this Lease unless the other party promptly elects and agrees, in writing, to
contribute the amount of the shortfall; and



               (ii) If this Lease is terminated pursuant to the foregoing provisions of this Section 15.2,
or if this Lease remains in effect but any condemnation awards or other proceeds become available
as compensation for the loss or destruction of any of the Improvements, then Landlord and Tenant
agree (and any Lender shall be asked to agree) that such proceeds shall be allocated between
Landlord and Tenant, respectively, in the respective proportions in which Landlord and Tenant would
have shared, under Section 15.1 (c), the proceeds of any insurance proceeds following loss or
destruction of the applicable Improvements by an insured casualty.



     15.3 Reservation Of Compensation. Landlord reserves, and Tenant waives and assigns to
Landlord, all rights to any award or compensation for damage to the Premises, the Improvements, the
Center and the leasehold estate created hereby, accruing by reason of any taking in any public
improvement, condemnation or eminent domain proceeding or in any other manner by exercise of the
right of eminent domain or of anything lawfully done by public authority, except that (a) Tenant
shall be entitled to any and all compensation or damages paid for or on account of Tenant’s moving
expenses, trade fixtures and equipment and any leasehold improvements installed by Tenant in the
Premises at its own sole expense, but only to the extent Tenant would have been entitled to remove
such items at the expiration of the term of this Lease and then only to the extent such
compensation or damages are expressly and specifically allocated by the condemning authority, in
response to a direct claim by Tenant, to Tenant’s moving expenses, trade fixtures, equipment and/or
removable leasehold improvements as set forth in this clause (a), and (b) any condemnation awards
or proceeds described in Section 15.2(b)(ii) shall be allocated and disbursed in accordance with
the provisions of Section 15.2(b)(ii), notwithstanding any contrary provisions of this Section
15.3.



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     15.4 Restoration Of Improvements. In connection with any repair or restoration of
the Premises or other Improvements by either party following a casualty or taking as hereinabove
set forth, the party responsible for such repair or restoration shall, to the extent possible,
return such Improvements to a condition substantially equal to that which existed immediately
prior to the casualty or taking. To the extent such party wishes to make material modifications to
the Premises or to such Improvements, such modifications shall be subject to the prior written
approval of the other party (not to be unreasonably withheld or delayed), except that no such
approval shall be required for modifications that are required by applicable governmental
authorities as a condition of the repair or restoration, unless such required modifications would
impair or impede Tenant’s conduct of its business in the Premises (in which case any such
modifications in Landlord’s work shall require Tenant’s consent, not unreasonably withheld or
delayed) or would materially and adversely affect the exterior appearance, the structural
integrity or the mechanical or other operating systems of the buildings in which the Premises are
located (in which case any such modifications in Tenant’s work shall require Landlord’s consent,
not unreasonably withheld or delayed).



16. DEFAULT




     16.1 Events Of Default. The occurrence of any of the following shall constitute an
event of default on the part of Tenant:



          (a) [Omitted.]




          (b) Nonpayment. Failure to pay, when due, any amount payable to Landlord hereunder,
such failure continuing for a period of five (5) business days after written notice of such
failure; provided, however, that any such notice shall be in lieu of, and not in addition
to, any notice required under California Code of Civil Procedure
Section 1161 et seq., as amended
from time to time;




          (c) Other Obligations. Failure to perform any obligation, agreement or covenant under
this Lease other than those matters specified in subsection (b) hereof, such failure continuing for
thirty (30) days after written notice of such failure;
provided, however, that if such
failure is curable in nature but cannot reasonably be cured within such 30-day period, then Tenant
shall not be in default if, and so long as, Tenant promptly (and in all events within such 30-day
period) commences such cure and thereafter diligently pursues such cure to completion; and
provided further, however, that any such notice shall be in lieu of, and not in addition
to, any notice required under California Code of Civil Procedure
Section 1161 et scq., as amended
from time to time;




          (d) General Assignment. A general assignment by Tenant for the benefit of creditors;




          (e) Bankruptcy. The filing of any voluntary petition in bankruptcy by Tenant, or the filing of
an involuntary petition by Tenant’s creditors, which involuntary petition remains undischarged for
a period of thirty (30) days. In the event that under applicable law the trustee in bankruptcy or
Tenant has the right to affirm this Lease and continue to perform the obligations of Tenant
hereunder, such trustee or Tenant shall, in such time period as may be permitted by the bankruptcy
court having jurisdiction, cure all defaults of Tenant hereunder outstanding as of the date of the
affirmance of this Lease and provide to Landlord such adequate assurances as may be necessary to
ensure Landlord of the continued performance of Tenant’s obligations under this Lease.
Specifically, but without limiting the generality of the foregoing, such adequate assurances must
include assurances that the Premises continue to be operated only for the use permitted hereunder.
The provisions hereof are to assure that the basic understandings between Landlord and Tenant with
respect to Tenant’s use of the Premises and the Common Areas and the benefits to Landlord therefrom
are preserved, consistent with the purpose and intent of applicable bankruptcy laws;




- 30 -









 





          (f) Receivership. The employment of a receiver appointed by court order to take
possession of substantially all of Tenant’s assets or the Premises, if such receivership remains
undissolved for a period of thirty (30) days;




          (g) Attachment. The attachment, execution or other judicial seizure of all or
substantially all of Tenant’s assets or the Premises, if such attachment or other seizure remains
undismissed or undischarged for a period of thirty (30) days after the levy thereof; or




          (h) Insolvency. The admission by Tenant in writing of its inability to pay its debts
as they become due, the filing by Tenant of a petition seeking any reorganization or arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any present or future
statute, law or regulation, the filing by Tenant of an answer admitting or failing timely to
contest a material allegation of a petition filed against Tenant in any such proceeding or, if
within thirty (30) days after the commencement of any proceeding against Tenant seeking any
reorganization or arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future statute, law or regulation, such proceeding shall not have been
dismissed.




     16.2 Remedies Upon Tenant’s Default.



          (a) Upon the occurrence of any event of default described in Section 16.1 hereof, Landlord, in
addition to and without prejudice to any other rights or remedies it may have, shall have the
immediate right to re-enter the Premises or any part thereof and repossess the same, expelling and
removing therefrom all persons and property (which property may be stored in a public warehouse or
elsewhere at the cost and risk of and for the account of Tenant), using such force as may be
necessary to do so (as to which Tenant hereby waives any claim for loss or damage that may thereby
occur). In addition to or in lieu of such re-entry, and without prejudice to any other rights or
remedies it may have, Landlord shall have the right either (i) to terminate this Lease and recover
from Tenant all damages incurred by Landlord as a result of Tenant’s default, as hereinafter
provided, or (ii) to continue this Lease in effect and recover rent and other charges and amounts
as they become due.




          (b) Even if Tenant has breached this Lease and abandoned the Premises, this Lease shall
continue in effect for so long as Landlord does not terminate Tenant’s right to possession under
subsection (a) hereof and Landlord may enforce all of its rights and remedies under this Lease,
including the right to recover rent as it becomes due, and Landlord, without terminating this
Lease, may exercise all of the rights and remedies of a lessor under California Civil Code Section
1951.4 (lessor may continue lease in effect after lessee’s breach and abandonment and recover rent
as it becomes due, if lessee has right to sublet or assign, subject only to reasonable
limitations), or any successor Code section. Acts of maintenance, preservation or efforts to relet
the Premises or the appointment of a receiver upon application of Landlord to protect Landlord’s
interests under this Lease shall not constitute a termination of Tenant’s right to possession.




          (c) If Landlord terminates this Lease pursuant to this Section 16.2, Landlord shall have all
of the rights and remedies of a landlord provided by Section 1951.2 of the Civil Code of the State
of California, or any successor Code section, which remedies include Landlord’s right to recover
from Tenant (i) the worth at the time of award of the unpaid rent and additional rent which had
been earned at the time of termination, (ii) the worth at the time of award of the amount by which
the unpaid rent and additional rent which would have been earned after termination until the time
of award exceeds the amount of such rental loss that Tenant proves could have been reasonably
avoided, (iii) the worth at the time of award of the amount by which the unpaid rent and additional
rent for the balance of the term after the time of award exceeds the amount of such rental loss
that Tenant proves could be reasonably avoided, and
(iv) any other amount necessary to compensate Landlord for all the detriment proximately caused by
Tenant’s failure to perform its obligations under this Lease or which in the ordinary course of
things would be likely to result therefrom, including, but not limited to, the cost of recovering
possession of the Premises, expenses of reletting, including necessary repair, renovation and





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alteration of the Premises, reasonable attorneys’ fees, and other reasonable costs. The “worth
at the time of award” of the amounts referred to in clauses (i) and (ii) above shall be
computed by allowing interest at ten percent (10%) per annum from the date such amounts accrued to
Landlord. The “worth at the time of award” of the amounts referred to in clause (iii)
above shall be computed by discounting such amount at one percentage point above the discount rate
of the Federal Reserve Bank of San Francisco at the time of award.




     16.3 Remedies Cumulative. All rights, privileges and elections or remedies of
Landlord contained in this Article 16 are cumulative and not alternative to the extent permitted
by law and except as otherwise provided herein.



17. SUBORDINATION. ATTORNMENT AND SALE




     17.1 Subordination To Mortgage. This Lease, and any sublease entered into by Tenant
under the provisions of this Lease, shall be subject and subordinate to any ground lease, mortgage,
deed of trust, sale/leaseback transaction or any other hypothecation for security now or hereafter
placed upon any portion(s) of the Center on which the Premise are located, and to the rights of any
assignee of Landlord or of any ground lessor, mortgagee, trustee, beneficiary or leaseback lessor
under any of the foregoing, and to any and all advances made on the security thereof and to all
renewals, modifications, consolidations, replacements and extensions thereof; provided,
however, that such subordination in the case of any future ground lease, mortgage, deed of trust,
sale/leaseback transaction or any other hypothecation for security placed upon any portion(s) of
the Center on which the Premises are located shall be conditioned on Tenant’s receipt from the
ground lessor, mortgagee, trustee, beneficiary or leaseback lessor of a Non-Disturbance Agreement
in a form reasonably acceptable to Tenant (i) confirming that so long as Tenant is not in material
default hereunder beyond any applicable cure period (for which purpose the occurrence of any event
of default under Section 16.1 hereof shall be deemed to be “material”), Tenant’s rights hereunder
shall not be disturbed by such person or entity and (ii) agreeing that the benefit of such
Non-Disturbance Agreement shall be transferable to any transferee under a Permitted Transfer and to
any other assignee or subtenant that is acceptable to the ground lessor, mortgagee, trustee,
beneficiary or leaseback lessor at the time of transfer. Moreover, Tenant’s obligations under this
Lease shall be conditioned on Tenant’s receipt, within sixty (60) days after the date hereof
(provided that Landlord shall have the right to extend such period for up to an additional thirty
(30) days in order to continue pursuing receipt of the agreement required hereunder if not received
within such initial 60-day period), from The Northwestern Mutual Life Insurance Company, the
beneficiary under an existing deed of trust on the Phase I Property, of a Non-Disturbance Agreement
in a form reasonably acceptable to Tenant acknowledging and approving this Lease and confirming (i)
that so long as Tenant is not in material default hereunder beyond any applicable cure period (for
which purpose the occurrence of any event of default under Section 16.1 hereof shall be deemed to
be “material”), Tenant’s rights hereunder shall not be disturbed by such person or entity and (ii)
agreeing that the benefit of such Non-Disturbance Agreement shall be transferable to any transferee
under a Permitted Transfer and to any other assignee or subtenant that is acceptable to the ground
lessor, mortgagee, trustee, beneficiary or leaseback lessor at the time of transfer. If any
mortgagee, trustee, beneficiary, ground lessor, sale/leaseback lessor or assignee elects to have
this Lease be an encumbrance prior to the lien of its mortgage, deed of trust, ground lease or
leaseback lease or other security arrangement upon any portion(s) of the Center on which the
Premises are located and gives notice thereof to Tenant, this Lease shall be deemed prior thereto,
whether this Lease is dated prior or subsequent to the date thereof or the date of recording
thereof. Tenant, and any sublessee, shall execute such documents as may reasonably be requested by
any mortgagee, trustee, beneficiary, ground lessor, sale/leaseback lessor or assignee to evidence
the subordination herein set forth, subject to the conditions set forth above, or to make this
Lease prior to the lien of any mortgage, deed of trust, ground lease, leaseback lease or other
security arrangement, as the case may be. Upon any default by Landlord in the performance of its
obligations under any mortgage, deed of trust, ground lease, leaseback lease or assignment, Tenant
(and any sublessee) shall, notwithstanding any subordination hereunder, attorn to the mortgagee,
trustee, beneficiary, ground lessor, leaseback lessor or assignee thereunder upon




- 32 -









 







demand and become the tenant of the successor in interest to Landlord, at the option of such
successor in interest, and shall execute and deliver any instrument or instruments confirming the
attornment herein provided for.




     17.2 Sale Of Landlord’s Interest. Upon sale, transfer or assignment of Landlord’s
entire interest in the portion(s) of the Center on which the Premises are located, Landlord shall
be relieved of its obligations hereunder with respect to liabilities accruing from and after the
date of such sale, transfer or assignment.



     17.3
Estoppel Certificates. Tenant or Landlord (the “responding party”), as
applicable, shall at any time and from time to time, within ten (10) days after written request by
the other party (the “requesting party”), execute, acknowledge and deliver to the requesting party
a certificate in writing stating: (i) that this Lease is unmodified and in full force and effect,
or if there have been any modifications, that this Lease is in full force and effect as modified
and stating the date and the nature of each modification; (ii) the date to which rental and all
other sums payable hereunder have been paid; (iii) that the requesting party is not in default in
the performance of any of its obligations under this Lease, that the certifying party has given no
notice of default to the requesting party and that no event has occurred which, but for the
expiration of the applicable time period, would constitute an event of default hereunder, or if the
responding party alleges that any such default, notice or event has occurred, specifying the same
in reasonable detail; and (iv) such other matters as may reasonably be requested by the requesting
party or by any institutional lender, mortgagee, trustee, beneficiary, ground lessor,
sale/leaseback. lessor or prospective purchaser of any portion(s) of the Center on which the
Premises are located, or any prospective sublessee or assignee of this Lease. Any such certificate
provided under this Section 17.3 may be relied upon by any lender, mortgagee, trustee, beneficiary,
assignee or successor in interest to the requesting party, by any prospective purchaser, by any
purchaser on foreclosure or sale, by any grantee under a deed in lieu of foreclosure of any
mortgage or deed of trust on the Center (or any portion thereof), by any subtenant or assignee, or
by any other third party. Failure to execute and return within the required time any estoppel
certificate requested hereunder, if such failure continues for five (5) days after a second written
request by the requesting party for such estoppel certificate, shall be deemed to be an admission
of the truth of the matters set forth in the form of certificate submitted to the responding party
for execution.



     17.4 Subordination to CC&R’s. This Lease, and any permitted sublease entered into by
Tenant under the provisions of this Lease, and the interests in real property conveyed hereby and
thereby shall be subject and subordinate to any declarations of covenants, conditions and
restrictions affecting the Center (or any portion thereof) from time to time, provided that
the terms of such declarations are reasonable, do not materially impair Tenant’s ability to conduct
the uses permitted hereunder on the Premises and in the Center, and do not discriminate against
Tenant relative to other similarly situated tenants occupying the portion(s) of the Center covered
by such declaration(s). Moreover, this Lease, and any permitted sublease entered into by Tenant
under the provisions of this Lease, and the interests in real property conveyed hereby and thereby
shall also be subject and subordinate (a) to the Declaration of Covenants, Conditions and
Restrictions for Pointe Grand Business Park dated November 4,1991 and recorded on February 25,1992
as Instrument No. 92025214, Official Records of San Mateo County, as amended from time to time (the
“Master Declaration”), the provisions of which Master Declaration are an integral part of this
Lease to the extent this sentence is applicable, (b) to the Declaration of Covenants, Conditions
and Restrictions dated November 23, 1987 and recorded on November 24,1987 as Instrument No.
87177987, Official Records of San Mateo County, which declaration imposes certain covenants,
conditions and restrictions on the Pointe Grand Business Park, and (c) to the Environmental
Restriction and Covenant (Pointe Grand) dated as of April 16,1997 and recorded on April 16,1997 as
Instrument No. 97-043682, Official Records of San Mateo County, which declaration imposes certain
covenants, conditions and restrictions on the Pointe Grand Business Park. Tenant agrees to execute,
upon request by Landlord, any documents reasonably required from time to time to evidence such
subordination.



     17.5 Mortgagee Protection. If, following a default by Landlord under any mortgage,
deed of trust, ground lease, leaseback lease or other security arrangement covering any portion(s)




- 33 -









 







of the Center on which the Premises are located, any such portion(s) of the Center are acquired by
the mortgagee, beneficiary, master lessor or other secured party, or by any other successor owner,
pursuant to a foreclosure, trustee’s sale, sheriff‘s sale, lease termination or other similar
procedure (or deed in lieu thereof), then any such person or entity so acquiring any portion(s) of
the Center on which the Premises are located shall not be:




          (a) liable for any act or omission of a prior landlord or owner of such portion(s) of the
Center (including, but not limited to, Landlord);




          (b) subject to any offsets or defenses that Tenant may have against any prior landlord or
owner of such portion(s) of the Center (including, but not limited to, Landlord);




          (c) bound by any rent or additional rent that Tenant may have paid in advance to any prior
landlord or owner of such portion(s) of the Center (including, but not limited to, Landlord) for a
period in excess of one month, or by any security deposit, cleaning deposit or other prepaid charge
that Tenant may have paid in advance to any prior landlord or owner (including, but not limited to,
Landlord), except to the extent such deposit or prepaid amount has been expressly turned over to or
credited to the successor owner this acquiring such portion(s) of the Center;




          (d) liable for any warranties or representations of any nature whatsoever, whether pursuant to
this Lease or otherwise, by any prior landlord or owner of such portion(s) of the Center
(including, but not limited to, Landlord) with respect to the use, construction, zoning, .
compliance with laws, title, habitability, fitness for purpose or possession, or physical condition
(including, without limitation, environmental matters) of the Center or any portion thereof; or




          (e) liable to Tenant in any amount beyond the interest of such mortgagee, beneficiary, master
lessor or other secured party or successor owner in such portion(s) of the Center, it being the
intent of this provision that Tenant shall look solely to the interest of any such mortgagee,
beneficiary, master lessor or other secured party or successor owner in such portion(s) of the
Center for the payment and discharge of the landlord’s obligations under this Lease and that such
mortgagee, beneficiary, master lessor or other secured party or successor owner shall have no
separate personal liability for any such obligations.




18. SECURITY




     18.1 Deposit. Tenant is not required to provide any security deposit to Landlord
pursuant to this Lease.



19. MISCELLANEOUS




     19.1 Notices. All notices, consents, waivers and other communications which this
Lease requires or permits either party to give to the other shall be in writing and shall be deemed
given when delivered personally (including delivery by private courier or express delivery service)
or four (4) days after deposit in the United States mail, registered or certified mail, postage
prepaid, addressed to the parties at their respective addresses as follows:



	 	 	 	 	 
	 

	 	To Tenant:
	 	COR Therapeutics, Inc.
	 

	 	 	 	256 East Grand Avenue
	 

	 	 	 	South San Francisco, CA 94080
	 

	 	 	 	Attn: Charles A. Alaimo
	 
	 	 	 	 
	 

	 	with copy to:
	 	Cooley Godward
llp
	 

	 	 	 	One Maritime Plaza,
20th Floor
	 

	 	 	 	San Francisco, CA 94111-3580
	 

	 	 	 	Attn: Anna B. Pope, Esq.






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	 	To Landlord:
	 	Britannia Pointe Grand Limited Partnership
	 

	 	 	 	1939 Harrison Street, Suite 715
	 

	 	 	 	Park Plaza Building
	 

	 	 	 	Oakland, CA 94612
	 

	 	 	 	Attn: T. J. Bristow
	 
	 	 	 	 
	 

	 	with copy to:
	 	Folger Levin & Kahn
llp
	 

	 	 	 	Embarcadero Center West
	 

	 	 	 	275 Battery Street, 23rd Floor
	 

	 	 	 	San Francisco, CA 94111
	 

	 	 	 	Attn: Donald E. Kelley, Jr.
	 
	 	 	 	 
	 

	 	and copy to:
	 	Slough Estates USA Inc.
	 

	 	 	 	33 West Monroe Street, Suite 2000
	 

	 	 	 	Chicago, IL 60603
	 

	 	 	 	Attn: Randy Rohner





or to such other address as may be contained in a notice at least fifteen (15) days prior to the
address change from either party to the other given pursuant to this Section. Rental payments and
other sums required by this Lease to be paid by Tenant shall be delivered to Landlord at Landlord’s
address provided in this Section, or to such other address as Landlord may from time to time
specify in writing to Tenant, and shall be deemed to be paid only upon actual receipt.




     19.2 Successors And Assigns. The obligations of this Lease shall run with the land,
and this Lease shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the original Landlord named herein and each
successive Landlord under this Lease shall be liable only for obligations accruing during the
period of its ownership of the portion(s) of the Center on which the Premises are located, and any
liability for obligations accruing after termination of such ownership shall terminate as of the
date of such termination of ownership and shall pass to the successor lessor.



     19.3 No Waiver. The failure of Landlord to seek redress for violation, or to insist
upon the strict performance, of any covenant or condition of this Lease shall not be deemed a
waiver of such violation, or prevent a subsequent act which would originally have constituted a
violation from having all the force and effect of an original violation.



     19.4 Severability. If any provision of this Lease or the application thereof is held
to be invalid or unenforceable, the remainder of this Lease or the application of such provision to
persons or circumstances other than those as to which it is invalid or unenforceable shall not be
affected thereby, and each of the provisions of this Lease shall be valid and enforceable, unless
enforcement of this Lease as so invalidated would be unreasonable or grossly inequitable under all
the circumstances or would materially frustrate the purposes of this Lease.



     19.5 Litigation Between Parties. In the event of any litigation or other dispute
resolution proceedings between the parties hereto arising out of or in connection with this Lease,
the prevailing party shall be reimbursed for all reasonable costs, including, but not limited to,
reasonable accountants’ fees and attorneys’ fees, incurred in connection with such proceedings
(including, but not limited to, any appellate proceedings relating thereto) or in connection with
the enforcement of any judgment or award rendered in such
proceedings. “Prevailing party” within
the meaning of this Section shall include, without limitation, a party who dismisses an action for
recovery hereunder in exchange for payment of the sums allegedly due, performance of covenants
allegedly breached or consideration substantially equal to the relief sought in the action.



     19.6 Surrender. A voluntary or other surrender of this Lease by Tenant, or a mutual
termination thereof between Landlord and Tenant, shall not result in a merger but shall, at the
option of Landlord, operate either as an assignment to Landlord of any and all existing subleases



- 35 -









 




and subtenancies, or a termination of all or any existing subleases and subtenancies. This
provision shall be contained in any and all assignments or subleases made pursuant to this Lease.




     19.7 Interpretation. The provisions of this Lease shall be construed as a whole,
according to their common meaning, and not strictly for or against Landlord or Tenant. The
captions preceding the text of each Section and subsection hereof are included only for
convenience of reference and shall be disregarded in the construction or interpretation of this
Lease.



     19.8 Entire Agreement. This written Lease, together with the exhibits hereto,
contains all the representations and the entire understanding between the parties hereto with
respect to the subject matter hereof. Any prior correspondence, memoranda or agreements are
replaced in total by this Lease and the exhibits hereto. This Lease may be modified only by an
agreement in writing signed by each of the parties.



     19.9 Governing Law. This Lease and all exhibits hereto shall be construed and
interpreted in accordance with and be governed by all the provisions of the laws of the State of
California.



     19.10 No Partnership. The relationship between Landlord and Tenant is solely that of
a lessor and lessee. Nothing contained in this Lease shall be construed as creating any type or
manner of partnership, joint venture or joint enterprise with or between Landlord and Tenant.



     19.11 Financial Information. From time to time Tenant shall promptly provide directly
to prospective lenders and purchasers of the portion(s) of the Center on which the Premises are
located, as designated by Landlord from time to time, such financial information pertaining to the
financial status of Tenant as Landlord may reasonably request;
provided, Tenant shall be
permitted to provide such financial information in a manner which Tenant deems reasonably necessary
to protect the confidentiality of such information. In addition, from time to time, Tenant shall
provide Landlord with such financial information pertaining to the financial status of Tenant as
Landlord may reasonably request. Landlord agrees that all financial information supplied to
Landlord by Tenant shall be treated as confidential material, and shall not be disseminated to any
party or entity (including any entity affiliated with Landlord) without Tenant’s prior written
consent, except that Landlord shall be entitled to provide such information, subject to reasonable
precautions to protect the confidential nature thereof, (i) to Landlord’s partners and professional
advisors, solely to use in connection with Landlord’s execution and enforcement of this Lease, and
(ii) to prospective lenders and/or purchasers of the portion(s) of the Center on which the Premises
are located, solely for use in connection with their bona fide consideration of a proposed
financing or purchase of the portion(s) of the Center on which the Premises are located,
provided that such prospective lenders and/or purchasers are not then engaged in businesses
directly competitive with the business then being conducted by Tenant. For purposes of this
Section, without limiting the generality of the obligations provided herein, it shall be deemed
reasonable for Landlord to request copies of Tenant’s most recent audited annual financial
statements, or, if audited statements have not been prepared, unaudited financial statements for
Tenant’s most recent fiscal year, accompanied by a certificate of Tenant’s chief financial officer
that such financial statements fairly present Tenant’s financial condition as of the date(s)
indicated. Notwithstanding any other provisions of this Section 19.11, during any period in which
Tenant has outstanding a class of publicly traded securities and is filing with the Securities and
Exchange Commission, on a regular basis, Forms 10Q and 10K and any other periodic filings required
under the Securities Exchange Act of 1934, as amended, it shall constitute sufficient compliance
under this Section 19.11 for Tenant to furnish Landlord with copies of such periodic filings upon
Landlord’s written request.



          Landlord and Tenant recognize the need of Tenant to maintain the confidentiality of
information regarding its financial status and the need of Landlord to be informed of, and to
provide to prospective lenders and purchasers of the portion(s) of the Center on which the Premises
are located, financial information pertaining to, Tenant’s financial status. Landlord and




- 36 -









 




Tenant agree to cooperate with each other in achieving these needs within the context of the
obligations set forth in this Section.




     19.12 Costs. If Tenant requests the consent of Landlord under any provision of this
Lease for any act that Tenant proposes to do hereunder, including, without limitation, assignment
of this Lease or subletting of the Premises or any portion thereof. Tenant shall, as a condition to
doing any such act and the receipt of such consent, reimburse Landlord promptly for any and all
reasonable costs and expenses incurred by Landlord in connection therewith, including, without
limitation, reasonable attorneys’ fees, up to a maximum of $2,500.00 per request.



     19.13 Time. Time is of the essence of this Lease, and of every term and condition
hereof.



     19.14 Rules And Regulations. Tenant shall observe, comply with and obey, and shall
cause its employees, agents and, to the best of Tenant’s ability, invitees to observe, comply with
and obey such rules and regulations as Landlord may reasonably promulgate from time to time for the
safety, care, cleanliness, order and use of the Improvements, the Premises and the Center.



     19.15 Brokers. Landlord agrees to pay a fee of $300,000 to Tenant’s consultant, CB
Richard Ellis (attn: Chris Jacobs), in connection with the consummation of this Lease in accordance
with a separate agreement. Such fee shall be due and payable in full on or before September
15,2001. Each party represents and warrants that no other broker participated in the consummation
of this Lease and agrees to indemnify, defend and hold the other party harmless against any
liability, cost or expense, including, without limitation, reasonable attorneys’ fees, arising out
of any claims for brokerage commissions or other similar compensation in connection with any
conversations, prior negotiations or other dealings by the indemnifying party with any other
broker.



     19.16 Memorandum Of Lease. At any time during the term of this Lease, either party, at
its sole expense, shall be entitled to record a memorandum of this Lease and, if either party so
elects, both parties agree to cooperate in the preparation, execution, acknowledgement and
recordation of such document in reasonable form.



     19.17 Corporate Authority. Each of the persons signing this Lease on behalf of Tenant
warrants that he or she is fully authorized to do so and, by jointly so signing, to bind Tenant.



     19.18 Execution and Delivery. This Lease may be executed in one or more counterparts
and by separate parties on separate counterparts, but each such counterpart shall constitute an
original and all such counterparts together shall constitute one and the same instrument.



     19.19 Survival. Without limiting survival provisions which would otherwise be implied
or construed under applicable law, the provisions of
Sections 2.5, 7.4, 9.2, 9.3, 9.4, 11.6, 12.6 and
19.5 hereof shall survive the termination of this Lease with respect to matters occurring prior to
the expiration of this Lease.



     19.20 Parking. Landlord and Tenant agree that the Common Areas, taken as a whole,
shall include parking in amounts sufficient to satisfy the minimum parking requirements of the City
of South San Francisco applicable to the Center from time to time.



[rest of page intentionally left blank]





- 37 -









 








     IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the day and
year first set forth above.



	 	 	 	 	 	 	 	 	 	 	 	 	 
	“Landlord”	 	 	 	“Tenant”	 	 
	 
	BRITANNIA POINTE GRAND LIMITED	 	 	 	COR THERAPEUTICS, INC., a Delaware	 	 
	PARTNERSHIP, a Delaware limited	 	 	 	corporation	 	 
	partnership	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	BRITANNIA POINTE GRAND,	 	 	 	By:	 	/s/ Peter S. Roddy	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	LLC, a California limited liability

company, General Partner	 	 	 	Its:	 	Senior Vice President, Finance and
Chief Financial Officer	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	By:
	 	/s/ T. J. Bristow
	 	 	 	By:
	 	/s/ Vaughn M. Kailian	 	 
	 

	 	 	 	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	T. J. Bristow
	 	 	 	Its:	 	President and Chief Executive Officer	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Its:	 	Manager, President and	 	 	 	 	 	 	 	 
	 

	 	 	 	Chief Financial Officer	 	 	 	 	 	 	 	 






- 38 -









 






EXHIBITS




	 	 	 
	EXHIBIT A

	 	Real Property Description
	 
	 	 
	EXHIBIT A-l

	 	Phase I Property (Plan)
	 
	 	 
	EXHIBIT B

	 	Site Plan
	 
	 	 
	EXHIBIT C

	 	Future Entrance Lobby







 









 








EXHIBIT A 




REAL PROPERTY DESCRIPTION




The Phase I Property:



All that certain real property in the City of South San Francisco, County of San Mateo, State of
California, more particularly described as follows:



Lot 3 as shown on Parcel Map No. 91-284, “Being a resubdivision of the parcels described in the
deeds to Metal and Thermit Corporation, recorded in Book 293, at Page 394 of Deeds; in Book 49, at
Page 490, Official Records; in Book 77, at Page 415, Official Records; and, except that parcel
described in Book 1352, at Page 373, Official Records,” filed on February 25,1992, in Book 65 of
Parcel Maps, in the Office of the Recorder of the County of San Mateo, California.





The Center:



All that certain real property in the City of South San Francisco, County of San Mateo, State of
California, more particularly described as follows:



Lots 1, 2, 3 and 4, inclusive, as shown on Parcel Map No. 91-284, “Being a resubdivision of the
parcels described in the deeds to Metal and Thermit Corporation, recorded in Book 293, at Page 394
of Deeds; in Book 49, at Page 490, Official Records; in Book 77, at Page 415, Official Records;
and, except that parcel described in Book 1352, at Page 373, Official Records,” filed on February
25,1992, in Book 65 of Parcel Maps, in the Office of the Recorder of the County of San Mateo,
California.



Together with all adjacent or substantially adjacent areas owned by Landlord and depicted on the
Site Plan (Exhibit B to this Lease) as being part of the Center.




EXHIBIT A




 









 





EXHIBIT A-1




PHASE I PROPERTY (PLAN)









 









 








EXHIBIT B




SITE PLAN










 









 








EXHIBIT C




FUTURE ENTRANCE LOBBY PLAN









 









 








EXHIBIT B




Sublease
Premises




14









 





Exhibit B




Britannia Pointe Grande









 









 








256 East Grand




Britannia Pointe Grande










 










 








EXHIBIT B




Sublease Premises




14









 








EXHIBIT C




FF&E INVENTORY




Section I
– List of FF&E





	•	 	45 Offices with file cabinets drawers and work surfaces.
	 
	•	 	46 Cubicle’s with drawer’s shelves and work surfaces.
	 
	•	 	Approximately 45 break room and conference tables.
	 
	•	 	Approximately 100 miscellaneous bookcases, files, and storage cabinets.
	 
	•	 	Approximately 330 desk chairs, side chairs, conference room chairs, and lab stools.
	 
	•	 	Miscellaneous white boards.
	 
	•	 	2 Autoclaves
	 
	•	 	1 Glassware Washer
	 
	•	 	1 Glassware Dryer
	 
	•	 	1 House De-ionized Water Purification System
	 
	•	 	2 Modulab Water Polishing Systems
	 
	•	 	8 Class 2 Bio-safety Cabinets
	 
	•	 	1 300KW Auxiliary Generator & Automatic Transfer Switch
	 
	•	 	1 45KVA UPS.
	 
	•	 	1 25KVA UPS
	 
	•	 	1 CDA Air Compressor
	 
	•	 	1 Liquid Ring House Vacuum Pump
	 
	•	 	Assorted Lab Benches & Built-In Fume Hoods





Section II
– List of FF&E



Upon expiration of the Term of this Sublease, title to that portion of the FF&E owned by
Sublandlord on the date of this Sublease (the “Furniture”) that is not purchased by Landlord
pursuant to Section 9.2(g) of the Master Lease shall be deemed transferred to Subtenant and
Subtenant shall be solely responsible for removing it from the Sublease Premises.\





15










 





Confidential

 


EXHIBIT B




Floor Plan




[Attached]




vii