Document:

exv10w1

 

Exhibit 10.1

COVAD COMMUNICATIONS GROUP, INC.

2003 EMPLOYEE STOCK PURCHASE PLAN

 

 

COVAD COMMUNICATIONS GROUP, INC.

2003 EMPLOYEE STOCK PURCHASE PLAN

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	1.
	 	Definitions	 	 	1	 
	2.
	 	Stock Subject to the Plan	 	 	4	 
	3.
	 	Grant of Options	 	 	4	 
	4.
	 	Exercise of Options; Option Price	 	 	7	 
	5.
	 	Multiple Options	 	 	9	 
	6.
	 	Withdrawal from the Plan	 	 	9	 
	7.
	 	Termination of Employment	 	 	10	 
	8.
	 	Restriction upon Assignment	 	 	10	 
	9.
	 	No Rights of Stockholders until Shares Issued	 	 	10	 
	10.
	 	Changes in the Stock and Corporate Events; Adjustment of Options	 	 	11	 
	11.
	 	Use of Funds; No Interest Paid	 	 	12	 
	12.
	 	Amendment, Suspension or Termination of the Plan	 	 	12	 
	13.
	 	Administration by Committee; Rules and Regulations	 	 	13	 
	14.
	 	Designation of Subsidiary Corporations	 	 	14	 
	15.
	 	No Rights as an Employee	 	 	14	 
	16.
	 	Plan Term; Approval by Stockholders	 	 	14	 
	17.
	 	Effect upon Other Plans	 	 	14	 
	18.
	 	Conditions to Issuance of Stock Certificates	 	 	14	 
	19.
	 	Notification of Disposition	 	 	15	 
	20.
	 	Notices	 	 	15	 
	21.
	 	Additional Restrictions	 	 	15	 
	22.
	 	Equal Rights and Privileges	 	 	15	 
	23.
	 	Information to Participants	 	 	15	 
	24.
	 	Compliance with Laws	 	 	16	 
	25.
	 	Electronic Forms	 	 	16	 
	26.
	 	Headings	 	 	16	 

i

 

COVAD COMMUNICATIONS GROUP, INC.

2003 EMPLOYEE STOCK PURCHASE PLAN

          Covad Communications Group, Inc., a Delaware corporation, hereby adopts the 2003 Covad
Communications Group, Inc. Employee Stock Purchase Plan (the “Plan”), effective as of the Effective
Date (as defined below), subject to approval of the Plan by the stockholders of the Company (as
provided herein).

          The purposes of the Plan are as follows:

          (1) To assist eligible employees of the Company and its Designated Subsidiary Corporations (as
defined below) in acquiring stock ownership in the Company pursuant to a plan which is intended to
qualify as an “employee stock purchase plan,” within the meaning of Section 423(b) of the Code (as
defined below).

          (2) To help such employees provide for their future security and to encourage them to remain
in the employment of the Company and its Subsidiary Corporations.

     1. Definitions. Whenever any of the following terms is used in the Plan
with the first letter or letters capitalized, it shall have the following meaning unless the
context clearly indicates to the contrary (such definitions to be equally applicable to both the
singular and the plural forms of the terms defined):

          (a) “Account” shall mean the account established for a Participant under the Plan.

          (b) “Agent” shall mean the brokerage firm, bank or other financial institution, entity or
person(s), if any, engaged, retained, appointed or authorized to act as the agent of the Company or
an Employee with regard to the Plan.

          (c) “Authorization” shall mean a Participant’s payroll deduction authorization provided by
such Participant in accordance with Section 3(b) or, if applicable, Section 25.

          (d) “Board” means the Board of Directors of the Company.

          (e) “Code” means the Internal Revenue Code of 1986, as amended.

          (f) “Committee” means the committee of the Board appointed to administer the Plan pursuant to
Section 13.

          (g) “Company” means Covad Communications Group, Inc., a Delaware corporation.

          (h) “Compensation” of an Employee shall mean compensation paid to an Employee by the Company
or a Designated Subsidiary Corporation, including salary, wages, and commissions; but excluding
overtime, shift premiums, incentive compensation, incentive payments, bonuses, the cost of employee
benefits paid by the Company or a Designated Subsidiary Corporation, education or tuition
reimbursements, imputed income arising under any
Company or Designated Subsidiary Corporation group insurance or benefit program, travel

 

 

expenses, business and moving expense reimbursements, income received in connection with stock
options, contributions made by the Company or any Designated Subsidiary Corporation under any
employee benefit plan, and similar items of compensation.

          (i) “Date of Exercise” of an Option or a portion thereof means the date on which such Option
or such portion thereof is exercised, which shall be the last Trading Day occurring during the
Offering Period of such Option, in accordance with Sections 4(a) and 5 (except as provided in
Section 10 or 12).

          (j) “Date of Grant” of an Option means the date on which such Option is granted, which shall
be the first Trading Day of the Offering Period of such Option, in accordance with Section 3(a).

          (k) “Designated Subsidiary Corporation” means any Subsidiary Corporation designated by the
Board in accordance with Section 14.

          (l) “Effective Date” means July 1, 2003 (or such later date as the Committee shall designate
on which Options may be granted under the Plan in compliance with federal and state securities laws
and other applicable laws).

          (m) “Eligible Employee” means an Employee of the Company or any Designated Subsidiary
Corporation: (i) whose customary employment is more than 20 hours per week, (ii) whose customary
employment is for more than five months in any calendar year, and (iii) who does not, immediately
after the Option is granted, own (directly or through attribution) stock possessing five percent
(5%) or more of the total combined voting power or value of all classes of Stock or other stock of
the Company, a Parent Corporation or a Subsidiary Corporation (as determined under Section
423(b)(3) of the Code). For purposes of paragraph (iii), the rules of Section 424(d) of the Code
with regard to the attribution of stock ownership shall apply in determining the stock ownership of
an individual, and Stock or other stock which an Employee may purchase under outstanding Options or
other options shall be treated as Stock or other stock owned by the Employee.

          (n) “Employee” means an individual who renders services to the Company or a Subsidiary
Corporation in the status of an “employee,” within the meaning of Section 3401(c) of the Code.
During a leave of absence meeting the requirements of Treasury Regulation Section 1.421-7(h)(2), an
individual shall be treated as an Employee of the Company or Subsidiary Corporation employing such
individual immediately prior to such leave. “Employee” shall not include any director of the
Company or a Subsidiary Corporation who does not render services to the Company or a Subsidiary
Corporation in the status of an “employee,” within the meaning of Section 3401(c) of the Code.
Employee shall not include individuals who are classified by the plan sponsor for payroll and tax
withholding purposes as independent contractors or who are classified by the plan sponsor as
temporary agency employees and treated as payroll employees of the temporary agency, for such time
as they are so classified, regardless of any determination by a court or agency that they are
common law employees of the plan sponsor.

          (o) “Enrollment Date” with respect to an Offering Period means the last Trading Day next
preceding such Offering Period.

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          (p) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

          (q) “Fair Market Value” shall have the meaning set forth in Section 4(b).

          (r) “Offering Period” with respect to an Option granted on or after January 1, 2006, means the
six (6) month period during the Plan Term (as defined in Section 16) commencing on (i) any January
1 and ending on the next June 30 to occur thereafter, or (ii) commencing on any July 1 and ending
on the next December 31 to occur thereafter. With respect to an Option granted prior to January 1,
2006, this term means the twenty-four (24) month period during the Plan Term commencing on (i) any
January 1 and ending on the second December 31 to occur thereafter, or (ii) commencing on any July
1 and ending on the second June 30 to occur thereafter. The first Offering Period under the Plan
shall commence on the Effective Date and end on June 30, 2005. All Offering Periods that commenced
prior to January 1, 2006, shall terminate on December 31, 2005. The last Offering Period under the
Plan shall commence on January 1, 2013 and end on June 30, 2013.

          (s) “Option” means an option to purchase shares of Stock granted under the Plan to an Eligible
Employee in accordance with
Section 3(a).

          (t) “Option Price” means the option price per share of Stock determined in accordance with
Section 4(b).

          (u) “Parent Corporation” means any corporation, other than the Company, in an unbroken chain
of corporations ending with the Company if, at the time of the granting of the Option, each of the
corporations other than the Company owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain, as determined under
Section 424(e) of the Code.

          (v) “Participant” means an Eligible Employee who has elected to participate in the Plan, in
accordance with the provisions of Section 3(b).

          (w) “Payday” means the regular and recurring established day for payment of Compensation to an
Employee of the Company or any Designated Subsidiary Corporation.

          (x) “Plan” means the Covad Communications Group, Inc. 2003 Employee Stock Purchase Plan.

          (y) “Stock” means the shares of the Company’s Common Stock, $.001 par value.

          (z) “Subsidiary Corporation” means any corporation, other than the Company, in an unbroken
chain of corporations beginning with the Company if, at the time of the granting of the Option,
each of the corporations other than the last corporation in an unbroken chain owns stock possessing
50% or more of the total combined voting power of all classes of stock in one of the other
corporations in such chain, as determined under Section 424(f) of the Code.

          (aa) “Trading Day” means a day on which the National Stock Exchanges and the National
Association of Securities Dealers Automated Quotation (NASDAQ) System are open for trading.

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2. Stock Subject to the Plan.

          (a) Authorized Shares. Subject to the provisions of subsection (b) and Section 10
(relating to adjustments upon changes in the Stock) and Section 12 (relating to amendments of the
Plan), the aggregate number of shares of Stock that may be sold pursuant to Options granted under
the Plan shall be 5,000,000 shares of Stock, provided, that, effective as of January 1, 2004, and
as of each subsequent January 1 during the Plan Term (as defined in Section 16), the aggregate
number of shares of Stock that may be sold pursuant to Options granted under the Plan shall be
increased by the least of: (a) 2% of the number of shares of Stock outstanding on the date of such
increase, (b) 7,000,000 shares of Stock, and (c) such number of shares of Stock (which may be zero)
as the Committee shall designate in writing prior to the date of such increase.

          (b) Aggregate Limit on Shares. Subject to Sections 10 and 12, the aggregate number of
shares of Stock that may be sold pursuant to Options granted under the Plan shall not exceed
35,000,000 shares of Stock; provided, however, that, to the extent necessary to comply with Section
260.140.45 of Title 10 of the California Code of Regulations, at no time shall the total number of
shares of Stock issuable upon exercise of all outstanding Options and the total number of shares of
securities provided for under any stock bonus or similar plan or agreement of the Company exceed
30% of the then outstanding securities of the Company.

          (c) Shares Issued under the Plan. The shares of Stock sold pursuant to Options
granted under the Plan may be unissued shares or treasury shares of Stock, or shares reacquired in
private transactions or open market purchases. If and to the extent that any right under an Option
to purchase reserved shares of Stock shall not be exercised by any Participant for any reason, or
if such right to purchase shall terminate as provided herein, shares of Stock that have not been so
purchased hereunder shall again become available for the purposes of the Plan, unless the Plan
shall have been terminated, but all shares of Stock sold under the Plan, regardless of source,
shall be counted against the limitations set forth above.

3. Grant of Options.

          (a) Option Grants. The Company shall grant Options under the Plan to all Eligible
Employees until the earlier of: (i) the date on which the number of shares of Stock available
under the Plan have been sold, or (ii) the date on which the Plan is suspended or terminates. Each
Employee who is an Eligible Employee on the Enrollment Date of an Offering Period, and on the first
Trading Day of such Offering Period, shall be granted an Option with respect to such Offering
Period on the Date of Grant, and such Eligible Employee shall, to the extent such Eligible Employee
elects to participate in the Plan in accordance with Section 3(b), be a Participant. Each Option
with respect to an Offering Period shall expire on the last Date of Exercise occurring during that
Offering Period with respect to which such Option was granted, unless such Option terminates
earlier in accordance with Section 6, 7, 10 or 12 (pursuant to Section 10(b)(i) the last Date of
Exercise for any Option that is outstanding on December 1, 2005, shall be the last Trading Day
prior to December 31, 2005, and all Offering Periods that are
ongoing as of December 1, 2005, shall terminate on December 31, 2005). Subject to Section 5,
the number of shares of Stock subject to an Option held by a Participant that may be purchased on
any Date of Exercise shall equal the balance then in the Participant’s Account (or portion thereof
to be applied to the exercise of such Option), determined as of such Date of Exercise,

4

 

divided by
the Option Price of such Option; provided, however, that, on any Date of Exercise, a Participant
may not purchase an aggregate of more than 5,000 shares of Stock under the Option or Options
granted to and held by such Participant on such Date of Exercise; and, provided, further, that the
number of shares of Stock for which an Option shall become exercisable on any Date of Exercise
shall not exceed the number determined in accordance with subsection (c). The Company shall not
grant an Option with respect to an Offering Period to any Participant who is not an Eligible
Employee on the Enrollment Date of such Offering Period, and the first Trading Day of such Offering
Period.

          (b) Election to Participate; Payroll Deduction Authorization.

          (i) An Eligible Employee who is granted an Option shall become a Participant in the Plan only
by means of authorizing payroll deductions. Each such Eligible Employee who elects to participate
in the Plan with respect to an Offering Period shall, not later than the Enrollment Date of the
Offering Period, deliver to the Company a completed written payroll deduction authorization in a
form prepared by the Committee; provided, however, that, for the first Offering Period under the
Plan, such written payroll authorization shall be delivered or transmitted to the Company no later
than July 10, 2003 (or such later date as the Committee shall designate prior to the grant of such
Options). An Eligible Employee’s written payroll deduction authorization is referred to herein as
the “Authorization.” Each Participant’s Authorization shall give notice of such Participant’s
election to participate in the Plan for the Offering Period (and subsequent Offering Periods) and
shall designate a whole percentage of such Participant’s Compensation to be withheld by the Company
or the Designated Subsidiary Corporation employing such Participant on each Payday during the
Offering Period (and subsequent Offering Periods); provided, however, that, for the first Offering
Period under the Plan, each Participant’s Authorization shall designate a whole percentage of such
Participant’s Compensation to be withheld on the Payday occurring on July 18, 2003 (or the first
Payday occurring on or after the Date of Grant of the first Offering Period) and each Payday
thereafter. A Participant may designate any whole percentage of Compensation which is not less
than one percent (1%) and not more than twenty percent (20%).

          (ii) A Participant’s Compensation payable during an Offering Period shall be withheld each
Payday through payroll deduction in an amount equal to the percentage specified in the
Authorization, and such amount shall be credited to such Participant’s Account under the Plan. A
Participant may increase or decrease the percentage of Compensation designated in the
Authorization, subject to the limits of this subsection (b), or may suspend the Authorization,
provided, that any such change or suspension must be made no later than five (5) business days
before the end of a payroll period for such change or suspension to apply with respect to the
Payday for such payroll period.

          (iii) An Eligible Employee who is granted an Option prior to January 1, 2006, and who does not
elect to participate in the Plan by delivering to the Company an Authorization not later than the
date prescribed in paragraph (i) may subsequently become a Participant in such
Offering Period effective as of the first Trading Day following any Date of Exercise during
such Offering Period by delivering an Authorization to the Company prior to such Trading Day.

          (iv) Any Authorization shall remain in effect for each subsequent Offering Period, unless the
Participant submits a new Authorization pursuant to this subsection (b),

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withdraws from the Plan
pursuant to Section 6, or terminates employment as provided in Section 7. Notwithstanding the
foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code or Sections 3(a),
(c) or (d) of the Plan, the Company may reduce a Participant’s rate of payroll deductions to zero
at such time during any Offering Period. Payroll deductions shall recommence at the rate provided
by the Participant in his or her Authorization to the extent such payroll deductions may be applied
to purchase shares of Stock in accordance with Section 423(b)(8) of the Code and Sections 3(a), (c)
and (d) of the Plan, unless such Participant submits a new Authorization pursuant to this
subsection (b), withdraws from the Plan pursuant to Section 6, or terminates employment as provided
in Section 7 of the Plan.

          (c) $25,000 Limitation.

          (i) No Eligible Employee shall be granted an Option under the Plan which permits his or her
rights to purchase shares of Stock under the Plan, together with other Options or options to
purchase shares of Stock or other stock under all other employee stock purchase plans of the
Company, any Parent Corporation or any Subsidiary Corporation subject to the Section 423 of the
Code, to accrue at a rate which exceeds $25,000 of fair market value of such shares of Stock or
other stock (determined at the time the Option or other option is granted) for each calendar year
in which the Option or other option is outstanding. For purpose of the limitation imposed by this
subsection (c), (A) the right to purchase shares of Stock or other stock under an Option or other
option accrues when the Option or other option (or any portion thereof) first becomes exercisable
during the calendar year, (B) the right to purchase shares of Stock or other stock under an Option
or other option accrues at the rate provided in the Option or other option, but in no case may such
rate exceed $25,000 of the fair market value of such Stock or other stock (determined at the time
such Option or other option is granted) for any one calendar year, and (C) a right to purchase
Stock or other stock which has accrued under an Option or other option may not be carried over to
any other Option or other option. The limitation under this subsection (c) shall be applied in
accordance with Section 423(b)(8) of the Code and the Treasury Regulations thereunder.

          (ii) For purposes of paragraph (i) (and subject to paragraph (iii)), for a Date of Exercise,
(A) a Participant’s Option (if such Participant then holds only one Option), or, (B) if a
Participant has been granted and then holds more than one Option, the Option designated by such
Participant (or deemed to have been designated by such Participant) to be exercised on a Date of
Exercise, shall become exercisable on such Date of Exercise only to the extent permitted by the
limitation under paragraph (i).

          (iii) For purposes of paragraph (i), for a Date of Exercise, if a Participant has been granted
and holds more than one Option, and has designated more than one Option to be exercised on a Date
of Exercise in accordance with Section 5(b)(i), then with respect to such Date of Exercise, the
Options designated by such Participant shall become exercisable only to the extent permitted under
paragraph (i), determined as follows:

     (A) The limitation under paragraph (i) first shall be applied to the Option
designated by such Participant that has the least Option Price. If more than one
outstanding Option so designated by such Participant has the least Option Price,
then the limitation under paragraph (i) first shall be applied to the Option
designated by such Participant that had the least Fair Market Value of a share of
Stock on its Date of Grant. If more than one such outstanding Option so

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designated
by such Participant has the least Fair Market Value of a share of Stock on its Date
of Grant, then the $25,000 limitation under paragraph (i) first shall be applied to
the Option that has the earliest Date of Grant.

     (B) The limitation under paragraph (i) shall be applied to the other Options
designated to be exercised by such Participant on such Date of Exercise in
sequential order in accordance with subparagraph (A).

     (C) Each Option so designated by such Participant shall become exercisable in
accordance with subparagraphs (A) and (B) on such Date of Exercise only to the
extent of the least of the following: (1) the number of shares determined under
limitation under paragraph (i) and taking into account other Options that have
already become exercisable on such Date of Exercise, (2) the limits set forth in
Section 3(a) and taking into account other Options that have already become
exercisable on such Date of Exercise, and (3) the number of shares of Stock
purchasable under such Option based on the percentage of the balance then credited
to the Participant’s Account designated by the Participant with respect to such
Option in accordance with Section 5(b)(ii).

     (D) For purposes of paragraph (i), the rights to purchase shares of Stock under
the outstanding Options granted to and held by such Participant which are not
designated to be exercised by such Participant on such Date of Exercise shall not
become exercisable on such Date of Exercise.

          (d) Five Percent Holders. No Employee will be granted an Option under the Plan if
immediately after the grant, such Employee (or any other person whose stock would be attributed to
such Employee pursuant to Section 424(d) of the Code) would own shares of Stock or other stock
and/or hold outstanding options to purchase stock possessing five percent (5%) or more of the total
combined voting power or value of all classes of stock of the Company or of any Subsidiary
Corporation or Parent Corporation.

4. Exercise of Options; Option Price.

          (a) Option Exercise. Subject to Sections 3 and 5, each Participant’s Option or
Options shall become exercisable, on each Date of Exercise occurring during the Offering Period of
such Option to the extent that the balance then in the Participant’s Account is sufficient to
purchase, at the Option Price, shares of the Stock subject to the Option and, on such Date of
Exercise, such Participant, automatically and without any act on such Participant’s part, shall be
deemed to have exercised such Option on such Date of Exercise to the extent of the balance of the
Account to be so applied, provided, however, that any balance that is insufficient to purchase a
full share of Stock shall be carried over and remain credited to such Participant’s Account; and,
provided, further, that any additional balance in such Participant’s Account shall not be
carried over and shall be promptly refunded to such Participant without interest thereon.

          (b) Option Price Defined. The option price per share of Stock (the “Option Price”) to
be paid by a Participant upon the exercise of the Participant’s Option on a Date of Exercise shall
be equal to 85% of the lesser of: (i) the Fair Market Value of a share of Stock on such Date of
Exercise, and (ii) the Fair Market Value of a share of Stock on the Date of Grant for

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such Option; provided, however, that in no event may the Option Price be less than par value of a share of
Stock. The Fair Market Value of a share of Stock as of a given date shall be: (A) the closing
price of a share of Stock on the principal exchange on which the Stock is then trading, if any, on
such date (or, if shares of Stock were not traded on such date, then on the next preceding trading
day during which a sale occurred); (B) if the Stock is not traded on an exchange, but is quoted on
Nasdaq or a successor quotation system, (I) the last sales price (if the Stock is then listed as a
National Market Issue under the NASD National Market System), or (II) the mean between the closing
representative bid and asked prices (in all other cases) for a share of Stock on such date (or, if
shares of Stock were not traded on such date, then on the next preceding trading day during which a
sale occurred) as reported by Nasdaq or such successor quotation system; (III) if the Stock is not
publicly traded on an exchange and not quoted on Nasdaq or a successor quotation system, the mean
between the closing bid and asked prices for a share of Stock on such date (or, if shares of Stock
were not traded on such date, then on the next preceding trading day during which a sale occurred),
as determined in good faith by the Committee; or (IV) if the Stock is not publicly traded, the fair
market value of a share of Stock established by the Committee acting in good faith.

          (c) Book Entry/Share Certificates. As soon as practicable after the purchase of
shares of Stock upon the exercise of an Option by a Participant, the Company shall issue the shares
of Stock to such Participant and such shares shall be held in the custody of the Company, or if
applicable, the Agent, for the benefit of the Participant. The Company or the Agent shall make an
entry on its books and records indicating that the shares of Stock purchased in connection with
such exercise (including any partial share) have been duly issued as of that date to such
Participant. A Participant shall have the right at any time to request in writing a certificate or
certificates for all or a portion of the whole shares of Stock purchased hereunder. Upon receipt
of a Participant’s written request for any such certificate, the Company shall (or shall cause the
Agent to), within ten (10) days after the date of such receipt, deliver any such certificate to the
Participant; provided, however, that Committee, in its sole discretion, may place restrictions on
the issuance of certificates with respect to Stock purchased hereunder in accordance with
applicable law. Nothing in this subsection (c) shall prohibit the sale or other disposition by a
Participant of shares of Stock purchased hereunder. In the event the Company is required to obtain
authority from any commission or agency to issue any certificate or certificates for all or a
portion of the whole shares of Stock purchased hereunder, the Company shall seek to obtain such
authority as soon as reasonably practicable.

          (d) Pro Rata Allocations. If the total number of shares of Stock for which Options
are to be exercised on any date exceeds the number of shares of Stock remaining unsold under the
Plan (after deduction for all shares of Stock for which Options have theretofore been exercised),
the Committee shall make a pro rata allocation of the available remaining shares of Stock in as
nearly a uniform manner as shall be practicable and the balance of the amount
credited to the Account of each Participant which has not been applied to the purchase of
shares of Stock shall be paid to such Employee in one lump sum in cash within thirty (30) days
after the Date of Exercise, without any interest thereon.

          (e) Information Statement. The Company shall provide each Participant whose Option is
exercised with an information statement in accordance with Section 6039(a) of the Code and the
Treasury Regulations thereunder. The Company shall maintain a procedure for

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identifying
certificates of shares of Stock sold upon the exercise of Options in accordance with Section
6039(b) of the Code.

      5. Multiple Options. 

          (a) An Eligible Employee shall be granted an Option for an Offering Period in accordance
with Section 3(a), irrespective of whether such Eligible Employee was granted one or more Options
for prior Offering Periods, and, accordingly, an Eligible Employee may hold Options with respect to
more than one Offering Period.

          (b) Subject to Section 3, if a Participant has been granted and holds Options with respect to
more than one Offering Period as of a Date of Exercise, such Option or Options shall be exercisable
on such Date of Exercise as follows:

          (i) Such Participant may designate in writing one or more of the outstanding Options to be
exercised on the Date of Exercise, on a form prepared by the Committee. Such written designation
must be made and delivered to the Company not later than five (5) days prior to such Date of
Exercise. The outstanding Options not designated by the Participant will not become exercisable
and will not be exercised on such Date of Exercise. A separate written designation shall be
required for each Date of Exercise on which a Participant has more than one outstanding Option.

          (ii) If such Participant designates more than one Option to be exercised in accordance with
paragraph (i), the written designation also shall include the percentage of the balance then
credited to such Participant’s Account to be applied to each Option to be so exercised on the Date
of Exercise. The Participant may designate 10% increments (or any multiple thereof) of the balance
in such Participant’s Account to be applied to each Option to be so exercised, and totaling 100% of
the balance credited to the Participant’s Account for the Options to be exercised. On the Date of
Exercise, to the extent each Option designated by the Participant becomes exercisable, the
Participant shall automatically exercise each such Option, in accordance with percentage designated
by the Participant of the balance then credited to the Participant’s Account in accordance with
Section 4(a) and subject to the limitations of Section 3(c)(iii).

          (iii) If such Participant fails to make a timely written designation in accordance with
paragraph (i) with respect to a Date of Exercise, such Participant shall be deemed to have
designated the outstanding Option with the least Option Price (as determined under Section 4(b))
for such Date of Exercise to be exercised, and to have applied 100% of the balance then credited to
the Participant’s Account in accordance with Section 4(a) of such Option and subject to the
limitations of Section 3(c)(ii). For purposes of the foregoing sentence, if more than one
outstanding Option held by such Participant has the least Option Price, then the Participant shall
be deemed to have designated the outstanding Option with the earliest Date of Grant to be
exercised.

      6. Withdrawal from the Plan. 

          (a) Withdrawal Election. A Participant may withdraw from participation under the Plan
at any time, except that a Participant may not withdraw from an Offering Period on or after the
Trading Day next preceding the last Date of Exercise of such Offering Period. Subject to the
foregoing, a Participant electing to withdraw from the Plan must deliver to the Company a

9

 

notice of withdrawal in a form prepared by the Committee (the “Withdrawal Election”), not later than the last
Trading Day preceding a Date of Exercise for such Offering Period. Upon receipt of a Participant’s
Withdrawal Election, the Company or Subsidiary Corporation employing the Participant shall pay to
the Participant the amount credited to the Participant’s Account in one lump sum payment in cash,
without any interest thereon, and subject to Section 4(c), the Company shall (or shall cause the
Agent to) deliver to the Participant certificates for any whole shares of Stock previously
purchased by the Participant, in either case within thirty (30) days of receipt of the
Participant’s Withdrawal Election. Upon receipt of a Participant’s Withdrawal Election by the
Company, the Participant shall cease to participate in the Plan and the Participant’s Option for
such Offering Period shall terminate.

          (b) Eligibility following Withdrawal. A Participant who withdraws from the Plan
preceding a Date of Exercise with respect to an Offering Period and who is still an Eligible
Employee may elect to participate in any subsequent Offering Period by delivering to the Company an
Authorization pursuant to Section 3(b).

     7. Termination of Employment. If the employment of a Participant with the Company or
a Designated Subsidiary Corporation terminates for any reason, the Participant’s participation in
the Plan automatically and without any act on the Participant’s part shall terminate as of the date
of the termination of the Participant’s employment. As soon as practicable after such a
termination of employment, the Company or Designated Subsidiary Corporation employing the
Participant shall pay to the Participant (or, in the event of the Participant’s death, the legal
representative of the Participant’s estate) the amount credited to the Participant’s Account in one
lump sum payment in cash, without any interest thereon, and subject to Section 4(c), the Company
shall (or shall cause the Agent to) deliver to the Participant (or, in the event of the
Participant’s death, the legal representative of the Participant’s estate) certificates for any
whole shares of Stock previously purchased by the Participant. Upon a Participant’s termination of
employment covered by this Section, the Participant’s Authorization and Options under the Plan
shall terminate.

     8. Restriction upon Assignment .  An Option granted under the Plan shall not
be transferable and is exercisable during the Participant’s lifetime only by the Participant. An
Option granted under the Plan shall not be exercisable after the death of the Participant. The
Company shall not recognize and shall be under no duty to recognize any assignment or alienation of
the Participant’s interest in the Plan, the Participant’s Option or any rights under the
Participant’s Option.

     9. No Rights of Stockholders until Shares Issued .  With respect to shares of
Stock subject to an Option, a Participant shall not be deemed to be a stockholder of the Company,
and the Participant shall not have any of the rights or privileges of a stockholder, until such
shares have been issued to the Participant following exercise of the Participant’s Option. No
adjustments shall be made for dividends (ordinary or extraordinary, whether in cash securities, or
other property) or distribution or other rights for which the record date occurs prior to the
date of such issuance, except as otherwise expressly provided herein.

10

 

     10. Changes in the Stock and Corporate Events; Adjustment of Options.

          (a) Subject to Section 10(c), in the event that the Committee, in its sole discretion,
determines that any dividend or other distribution (whether in the form of cash, Stock, other
securities, or other property), recapitalization, reclassification, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase,
liquidation, dissolution, or sale, transfer, exchange or other disposition of all or substantially
all of the assets of the Company, or exchange of Stock or other securities of the Company, issuance
of warrants or other rights to purchase Stock or other securities of the Company, or other similar
corporate transaction or event, affects the Stock such that an adjustment is appropriate in order
to prevent dilution or enlargement of the benefits or potential benefits intended to be made
available under the Plan or with respect to an Option, then the Committee shall, in such manner as
it may deem equitable, proportionately adjust any or all of:

          (i) the number and kind of shares of Stock (or other securities or property) with respect to
which Options may be granted (including, but not limited to, adjustments of the limitation in
Section 3(a) on the maximum number of shares of Stock which may be purchased),

          (ii) the number and kind of shares of Stock (or other securities or property) subject to
outstanding Options, and

          (iii) the exercise price with respect to any Option.

          (b) Subject to Section 10(c), in the event of any transaction or event described in Section
10(a) or any unusual or nonrecurring transactions or events affecting the Company, any affiliate of
the Company, or the financial statements of the Company or any affiliate, or of changes in
applicable laws, regulations, or accounting principles, the Committee, in its sole discretion, and
on such terms and conditions as it deems appropriate, either by the terms of the Option or by
action taken prior to the occurrence of such transaction or event and either automatically or upon
the Participant’s request, is hereby authorized to take any one or more of the following actions
whenever the Committee determines that such action is appropriate in order to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available under the Plan or
with respect to any Option under the Plan, to facilitate such transactions or events or to give
effect to such changes in laws, regulations or principles:

          (i) To provide that all Options outstanding shall terminate without being exercised on such
date as the Committee determines in its sole discretion;

          (ii) To provide that all Options outstanding shall be exercised prior to the Date of Exercise
of such Options on such date as the Committee determines in its sole discretion and such Options
shall terminate immediately after such exercises.

          (iii) To provide for either the purchase of any Option outstanding for an amount of cash equal
to the amount that could have been obtained upon the exercise of such Option had
such Option been currently exercisable, or the replacement of such Option with other rights or
property selected by the Committee in its sole discretion;

11

 

          (iv) To provide that such Option be assumed by the successor or survivor corporation, or a
parent or subsidiary thereof, or shall be substituted for by similar options, covering the stock of
the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate
adjustments as to the number and kind of shares and prices; and

          (v) To make adjustments in the number and type of shares of Stock (or other securities or
property) subject to outstanding Options, or in the terms and conditions of outstanding Options, or
Options which may be granted in the future.

          (c) No adjustment or action described in this Section 10 or in any other provision of the Plan
shall be authorized to the extent that such adjustment or action would cause the Plan to fail to
satisfy the requirements of Section 423 of the Code. Furthermore, no such adjustment or action
shall be authorized to the extent such adjustment or action would result in short-swing profits
liability under Section 16 of the Exchange Act, or violate the exemptive conditions of Rule 16b-3
unless the Committee determines that the Option is not to comply with such exemptive conditions.
The number of shares of Common Stock subject to any Option shall always be rounded to the next
whole number.

          (d) The existence of the Plan and the Options granted hereunder shall not affect or restrict
in any way the right or power of the Company or the stockholders of the Company to make or
authorize any adjustment, recapitalization, reorganization or other change in the Company’s capital
structure or its business, any merger or consolidation of the Company, any issue of stock or of
options, warrants or rights to purchase stock or of bonds, debentures, preferred or prior
preference stocks whose rights are superior to or affect the Stock or the rights thereof of which
are convertible into or exchangeable for Stock, or the dissolution or liquidation of the Company,
or any sale or transfer of all or any part of its assets or business, or any other corporate act or
proceeding, whether of a similar character or otherwise.

     11. Use of Funds; No Interest Paid.  All funds received or held by the
Company under the Plan shall be included in the general funds of the Company free of any trust or
other restriction and may be used for any corporate purpose. No interest will be paid to any
Participant or credited to any Participant’s Account with respect to such funds.

     12. Amendment, Suspension or Termination of the Plan.  The Board or the
Committee may amend, suspend, or terminate the Plan at any time and from time to time, provided,
however, that only the Board may amend the Plan: (a) to increase the number of shares of Stock
that may be sold pursuant to Options under the Plan, as provided in Section 2, (b) to change the
corporations or class of corporations whose employees will be offered Options under the Plan, or
(c) in any manner that would cause the Plan to no longer be an “employee stock purchase plan,”
within the meaning of Section 423(b) of the Code. No such amendment, suspension or termination
shall adversely affect the rights of any Participant in any Option previously granted; provided,
however, that the Board or the Committee may amend Section 2 at any time and from time to time to
decrease the number of shares of Stock that may be sold pursuant to Options under the Plan;
provided, further, that the Board or the Committee may at any time and from time to time terminate
all outstanding Options, or the outstanding Options
with respect to one or more Offering Period or amend all outstanding Options, or the
outstanding Options with respect to one or more Offering Periods, to suspend payroll deductions
otherwise to be applied to the exercise of such Options. In the event all of a Participant’s
outstanding Options

12

 

are terminated, the balance then in such Participant’s Account shall be
refunded to such Participant without interest thereon. To the extent necessary to comply with Rule
16b-3 under the Exchange Act, or under Section 423 of the Code (or any successor rule or provision
or any applicable law or regulation), the Company will obtain stockholder approval for any
amendment in such a manner and to such a degree as so required.

13. Administration by Committee; Rules and Regulations.

          (a) Appointment of Committee. The Plan shall be administered by the Committee, which
shall be composed of not less than two members of the Board, each of whom shall be a “non-employee
director” within the meaning of Rule 16b-3 which has been adopted by the Securities and Exchange
Commission under the Exchange Act. Each member of the Committee shall serve for a term commencing
on a date specified by the Board and continuing until the member dies, resigns or is removed from
office by the Board. The Committee at its option may utilize the services of an agent to assist in
the administration of the Plan, including establishing and maintaining an individual securities
account under the Plan for each Participant.

          (b) Duties and Powers of Committee. It shall be the duty of the Committee to conduct
the general administration of the Plan in accordance with the provisions of the Plan. The
Committee shall have the power to interpret the Plan and the terms of the Options and to adopt such
rules for the administration, interpretation, and application of the Plan as are consistent
therewith and to interpret, amend or revoke any such rules. In its absolute discretion, the Board
may at any time and from time to time exercise any and all rights and duties of the Committee under
the Plan.

          (c) Majority Rule. The Committee shall act by a majority of its members in office.
The Committee may act either by vote at a meeting or by a memorandum or other written instrument
signed by a majority of the Committee.

          (d) Compensation; Professional Assistance; Good Faith Actions. All expenses and
liabilities incurred by members of the Committee in connection with the administration of the Plan
shall be borne by the Company. The Committee may, with the approval of the Board, employ
attorneys, consultants, accountants, appraisers, brokers or other persons. The Committee, the
Company and its officers and directors shall be entitled to rely upon the advice, opinions or
valuations of any such persons. All actions taken and all interpretations and determinations made
by the Committee in good faith shall be final and binding upon all Participants, the Company and
all other interested persons. No member of the Committee shall be personally liable for any
action, determination or interpretation made in good faith with respect to the Plan or the Options,
and all members of the Committee shall be fully protected by the Company in respect to any such
action, determination, or interpretation.

          (e) Delegation of Authority. The Committee at its option may delegate its authority
hereunder to a committee of one or more officers of the Company, except to the extent necessary to
comply with the requirements of Rule 16b-3 of the Exchange Act. Any delegation hereunder shall be
subject to the restrictions and limits that the Committee specifies at the time
of such delegation of authority and may be rescinded at any time by the Committee. At all
times, any committee appointed under this Section 13(e) shall serve in such capacity at the
pleasure of the Committee.

13

 

     14. Designation of Subsidiary Corporations. The Board shall designate from among the
Subsidiary Corporations, as determined from time to time, the Subsidiary Corporation or Subsidiary
Corporations whose Employees shall be eligible to be granted Options under the Plan. The Board may
designate a Designated Subsidiary Corporation, or terminate the designation of a Subsidiary
Corporation, without the approval of the stockholders of the Company.

     15. No Rights as an Employee.  Nothing in the Plan shall be construed to
give any person (including any Participant) the right to remain in the employ of the Company, a
Parent Corporation or a Subsidiary Corporation or to affect the right of the Company, any Parent
Corporation or any Subsidiary Corporation to terminate the employment of any person (including any
Participant) at any time, with or without cause.

     16. Plan Term; Approval by Stockholders.  Subject to approval by the
stockholders of the Company in accordance with this Section, the Plan shall be in effect from the
Effective Date until June 30, 2013 (the “Plan Term”), unless sooner terminated in accordance with
Section 12. No Option may be granted during any period of suspension of the Plan or after
termination of the Plan. The Plan shall be submitted for the approval of the Company’s
stockholders within twelve (12) months after the date of the adoption of the Plan by the Board.
Options may be granted prior to such stockholder approval; provided, however, that such Options
shall not be exercisable prior to the time when the Plan is approved by the Company’s stockholders;
and, provided, further, that if such approval has not been obtained by the end of said 12-month
period, all Options previously granted under the Plan shall thereupon terminate without being
exercised.

     17. Effect upon Other Plans. The adoption of the Plan shall not affect any other
compensation or incentive plans in effect for the Company, any Parent Corporation or any Subsidiary
Corporation. Nothing in this Plan shall be construed to limit the right of the Company, any Parent
Corporation or any Subsidiary Corporation to: (a) establish any other forms of incentives or
compensation for employees of the Company, any Parent Corporation or any Subsidiary Corporation or
(b) grant or assume options otherwise than under the Plan in connection with any proper corporate
purpose, including, but not by way of limitation, the grant or assumption of options in connection
with the acquisition, by purchase, lease, merger, consolidation or otherwise, of the business,
stock or assets of any corporation, firm or association.

     18. Conditions to Issuance of Stock Certificates.  The Company shall not be
required to issue or deliver any certificate or certificates for shares of Stock purchased upon the
exercise of Options prior to fulfillment of all the following conditions:

          (a) The admission of such shares to listing on all stock exchanges, if any, on which is then
listed; and

          (b) The completion of any registration or other qualification of such shares under any state
or federal law or under the rulings or regulations of the Securities and Exchange Commission or any
other governmental regulatory body, which the Committee shall, in its absolute discretion, deem
necessary or advisable; and

14

 

          (c) The obtaining of any approval or other clearance from any state or federal governmental
agency which the Committee shall, in its absolute discretion, determine to be necessary or
advisable; and

          (d) The payment to the Company of all amounts which it is required to withhold under federal,
state or local law upon exercise of the Option; and

          (e) The lapse of such reasonable period of time following the exercise of the Option as the
Committee may from time to time establish for reasons of administrative convenience.

     19. Notification of Disposition.  Each Participant shall give prompt notice
to the Company of any disposition or other transfer of any shares of Stock purchased upon exercise
of an Option if such disposition or transfer is made: (a) within two (2) years from the Date of
Grant of the Option, or (b) within one (1) year after the transfer of such shares of Stock to such
Participant upon exercise of such Option. Such notice shall specify the date of such disposition
or other transfer and the amount realized, in cash, other property, assumption of indebtedness or
other consideration, by the Participant in such disposition or other transfer.

     20. Notices.  Any notice to be given under the terms of the Plan to the
Company shall be addressed to the Company in care of its Secretary and any notice to be given to
any Participant shall be addressed to such Participant at such Participant’s last address as
reflected in the Company’s records. By a notice given pursuant to this Section, either party may
designate a different address for notices to be given to it, him or her. Any notice which is
required to be given to a Participant shall, if the Participant is then deceased, be given to the
Participant’s personal representative if such representative has previously informed the Company of
his status and address by written notice under this Section. Any notice shall have been deemed
duly given if enclosed in a properly sealed envelope or wrapper addressed as aforesaid at the time
it is deposited (with postage prepaid) in a post office or branch post office regularly maintained
by the United States Postal Service.

     21. Additional Restrictions.  The terms and conditions of Options granted under the
Plan to, and the purchase of shares of Stock by, persons subject to Section 16 of the Exchange Act
shall comply with the applicable provisions of Rule 16b-3 of the Exchange Act. This Plan shall be
deemed to contain, and such Options shall contain, and the shares of Stock issued upon exercise
thereof will be subject to, such additional conditions and restrictions as may be required by Rule
16b-3 of the Exchange Act to qualify for the maximum exemption from Section 16 of the Exchange Act
with respect to Plan transactions.

     22. Equal Rights and Privileges.  All Eligible Employees of the Company (or
of any Designated Subsidiary Corporation) will have equal rights and privileges under this Plan so
that this Plan qualifies as an “employee stock purchase plan” within the meaning of Section 423 of
the Code or applicable Treasury regulations thereunder. Any provision of this Plan that is
inconsistent with Section 423 or applicable Treasury regulations will, without further act or
amendment by the Company or the Board, be reformed to comply with the equal rights and privileges
requirement of Section 423 or applicable Treasury regulations.

     23. Information to Participants.  To the extent required by Section
260.140.46 of

15

 

Title 10 of the California Code of Regulations, the Company shall provide to each
Participant, not less frequently than annually during the period such Participant has one or more
Options outstanding, and, in the case of an individual who acquires Stock pursuant to the Plan,
during the period such individual owns such Stock, copies of annual financial statements.
Notwithstanding the preceding sentence, the Company shall not be required to provide such
statements to key employees whose duties in connection with the Company assure their access to
equivalent information.

     24. Compliance with Laws. The Plan, the granting and vesting of Options
under the Plan and the issuance and delivery of shares of Stock and the payment of money under the
Plan or under Options granted or awarded hereunder are subject to compliance with all applicable
federal and state laws, rules and regulations (including but not limited to state and federal
securities law and federal margin requirements) and to such approvals by any listing, regulatory or
governmental authority as may, in the opinion of counsel for the Company, be necessary or advisable
in connection therewith. Any securities delivered under the Plan shall be subject to such
restrictions, and the person acquiring such securities shall, if requested by the Company, provide
such assurances and representations to the Company as the Company may deem necessary or desirable
to assure compliance with all applicable legal requirements. To the extent permitted by applicable
law, the Plan and Options granted or awarded hereunder shall be deemed amended to the extent
necessary to conform to such laws, rules and regulations.

     25. Electronic Forms.

          (a) To the extent permitted by applicable state law, in the discretion of the Committee, an
Eligible Employee may submit (i) an Authorization in accordance with Section 3(b) or Section 6(b),
(ii) an election to increase, decrease or suspend payroll deductions in accordance with Section
3(b), (iii) a Withdrawal Election in accordance with Section 6(a), or (iv) a designation as to
which Options shall be exercised in accordance with Section 5(b), by means of an electronic form
prepared by the Committee (“Electronic Form”). Prior to the commencement of an Offering Period,
the Committee shall prescribe the time limits within which any Electronic Form shall be submitted
to the Committee with respect to such Offering Period in order to be a valid election.

          (b) With respect to an Authorization by means of Electronic Form in accordance with Section
3(b) or Section 6(b), the Committee shall provide an Eligible Employee who transmits an Electronic
Form with written notice of such Electronic Form and shall request that such Eligible Employee
provide written confirmation of such Electronic Form. If such Eligible Employee fails to provide
written confirmation of such Electronic Form as required by the Committee, the Electronic Form
shall terminate and shall be null and void and such Eligible Employee’s cumulative payroll
deductions shall be refunded to such Eligible Employee without any interest thereon.

     26. Headings.  Headings are provided herein for convenience only and are not
to serve as a basis for interpretation or construction of the Plan.

* * * * * * *

16exv10w58

 

Exhibit 10.58

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.

2

 

     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.

3

 

     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),

4

 

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

5

 

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

 

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

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