Document:

Exhibit 10.2

 

EXECUTION VERSION

 

LEASE

 

 

by and between

 

 

BMR-Trade Centre Avenue LLC,

a Delaware limited
liability company

 

 

and

 

 

Array BioPharma Inc.,

a Delaware corporation

 

LEASE

THIS
LEASE (this “Lease”) is entered into as of this 9th day of August, 2006, by and between BMR-Trade
Centre Avenue LLC, a Delaware limited liability company (“Landlord”),
and Array BioPharma Inc., a Delaware corporation (“Tenant”).

RECITALS

WHEREAS,
Landlord owns certain real property (the “Property”) and the building
improvements thereon located at 2600 and 2620 Trade Centre Avenue, Longmont,
Colorado, including the buildings located thereon (the “Building”) in
which the Premises (as defined below) are located; and

WHEREAS,
Landlord wishes to lease to Tenant, and Tenant desires to lease from Landlord,
the Premises (as defined below) pursuant to the terms and conditions of this
Lease, as detailed below.

AGREEMENT

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

1.             Lease
of Premises. Landlord hereby leases to
Tenant, and Tenant hereby leases from Landlord, the Premises, as shown on Exhibit
A attached hereto.  The Property and
all landscaping, parking facilities and other improvements and appurtenances
related thereto, including, without limitation, the Building, are hereinafter
collectively referred to as the “Premises.”

2.             Basic
Lease Provisions. For
convenience of the parties, certain basic provisions of this Lease are set
forth herein. The provisions set forth herein are subject to the remaining terms
and conditions of this Lease and are to be interpreted in light of such
remaining terms and conditions.

2.1.          This
Lease shall take effect upon the date of execution and delivery hereof by all
parties hereto and, except as specifically otherwise provided within this
Lease, each of the provisions hereof shall be binding upon and inure to the
benefit of Landlord and Tenant from the date of execution and delivery hereof
by all parties hereto.

2.2.          Rentable
Area of the Premises:  78,023 sq. ft.,
subject to adjustment pursuant to the terms hereof

2.3.          Initial
Monthly Rental Installments of Basic Annual Rent:  78,023 s.f. x $27.79 per s.f. / 12 =
$180,688.26, subject to adjustment pursuant to the terms hereof

2.4.          Initial
Basic Annual Rent: 78,023 s.f. x $27.79 per s.f. = $2,168,259.17, subject to
adjustment pursuant to the terms hereof

2.5.          Term
Commencement Date:  August 9, 2006

2.6.          Term
Expiration Date:  August 9, 2016

2.7.          Security
Deposit: $2,168,259.17

2.8.          Permitted
Use:  General office and laboratory use
in conformity with Applicable Laws (as defined below)

2.9.          Address
for Rent Payment: BMR-Trade Centre Avenue LLC, 17190 Bernardo Center Drive,
Suite 222, San Diego, California 92128, Attn: Karen Sztraicher.

2.10.        Address for
Notices to Landlord: BMR-Trade Centre Avenue LLC, c/o BioMed Realty, L.P.,
17190 Bernardo Center Drive, Suite 222, San Diego, California 92128, Attn:
General Counsel/Finance Department.

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2.11.        Address for
Notices to Tenant: Array BioPharma Inc., 3200 Walnut Street, Boulder Colorado
80301, Attn: John Moore.

2.12.        The following
Exhibits are attached hereto and incorporated herein by reference:

	
  Exhibit A

  	
  Premises

  
	
  Exhibit B

  	
  Acknowledgement of Term Commencement Date and Term
  Expiration Date

  
	
  Exhibit C

  	
  Tenant’s Personal Property

  
	
  Exhibit D

  	
  Rules and Regulations

  
	
  Exhibit E

  	
  Form of Estoppel Certificate

  
	
  Exhibit F

  	
  Nonfunctional Equipment

  

 

3.             Term.

3.1.          This
Lease shall take effect upon the date of execution and delivery hereof by all
parties hereto and, except as specifically otherwise provided within this
Lease, each of the provisions hereof shall be binding upon and inure to the
benefit of Landlord and Tenant from the date of execution and delivery hereof
by all parties hereto.

3.2.          The
actual term of this Lease (the “Term”) shall be that period from the
Term Commencement Date through the Term Expiration Date, subject to earlier
termination of this Lease as provided herein.

4.             Tenant
Improvements.

4.1           Prior
to entering upon the Premises, Tenant shall furnish to Landlord evidence
satisfactory to Landlord that insurance coverages required of Tenant under the
provisions of Section 20 are in effect, and such entry shall be subject
to all the terms and conditions of this Lease other than the payment of Basic
Annual Rent or Additional Rent (as defined below).

4.2           Tenant
hereby acknowledges that Tenant knows the condition of the Premises and agrees
to accept the same in “as is” condition. 
It is understood and agreed that Landlord is not obligated to install
any equipment, or make any repairs, improvements or alterations to the
Premises.  Tenant shall have the right to
make appropriate repairs and improvements to the Premises in accordance with
the terms and conditions of Section 17 hereof (“Tenant Improvements”).
Tenant shall be responsible for performing and completing the Tenant
Improvements.  Upon the Term Commencement
Date, Landlord shall pay to Tenant a tenant improvement allowance (“Tenant
Improvement Allowance”) in the amount of $300,000 to cover the reasonable
cost of constructing Tenant’s Tenant Improvements to the Premises and related
fees and expenses, including, but not limited to, labor, materials, space
planning, construction documents, permits, fees, construction management, etc,
as such costs may be demonstrated by Tenant to the reasonable satisfaction of
Landlord.  All improvements shall be
subject to the requirements of the Lease with respect to alternations and to
building standards for finishes and materials. 
Any direct or indirect Tenant Improvement costs that exceed the Tenant
Improvement Allowance shall be paid by Tenant. 
Tenant shall pay to Landlord as Additional Rent the Tenant Improvement
Allowance, together with interest thereon at the rate of ten and one-half
percent (10.5%) per annum, which amount shall be amortized over the original
Term of the Lease and shall be due and payable in equal monthly installments of
Four Thousand Twelve and 94/100 Dollars ($4,012.94) per month when Basic
Monthly Rent is due and payable under the Lease

4.3           Landlord
and Tenant shall mutually agree upon the selection of the architect, engineer,
general contractor and major subcontractors, and Landlord and Tenant shall each
participate in the review of the competitive bid process.

5.             Rent.

5.1.          Tenant
shall pay to Landlord as Basic Annual Rent for the Premises, commencing on the
Term Commencement Date, the sum set forth in Section 2.4, subject to the
rental adjustments provided in Section 6 hereof. Basic Annual Rent shall
be paid in equal monthly installments as set forth in Section 2.3 (“Basic
Monthly Rent”), subject to the rental adjustments provided in Section 6
hereof, each in advance on the first day of each and every calendar month
during the Term.

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5.2.          In
addition to Basic Annual Rent, Tenant shall pay to Landlord as additional rent
(“Additional Rent”) at times hereinafter specified in this Lease (a)
amounts related to Insurance Costs and Taxes (each as defined below) and (b)
any other amounts that Tenant assumes or agrees to pay under the provisions of
this Lease that are owed to Landlord, including, without limitation, any and
all other sums that may become due by reason of any default of Tenant or
failure on Tenant’s part to comply with the agreements, terms, covenants and
conditions of this Lease to be performed by Tenant, after notice and the lapse
of any applicable cure periods.

5.3.          Basic
Annual Rent and Additional Rent shall together be denominated “Rent.”
Rent shall be paid to Landlord, without abatement, deduction or offset, in
lawful money of the United States of America at the office of Landlord as set
forth in Section 2.9 or to such other person in the United States or at
such other place as Landlord may from time designate in writing.  In the event the Term commences or ends on a
day other than the first day of a calendar month, then the Rent for such
fraction of a month shall be prorated for such period on the basis of a thirty
(30) day month and shall be paid at the then-current rate for such fractional
month.

6.             Rent
Adjustments. The Basic Annual Rent
shall be subject to an annual upward adjustment of two percent (2%) of the
then-current Basic Annual Rent.  The
first such adjustment shall become effective commencing August 1, 2007, and
subsequent adjustments shall become effective on every successive August 1 for
so long as this Lease continues in effect.

7.             Taxes.

7.1.          Commencing with
the Term Commencement Date and continuing for each calendar year or, at
Landlord’s option, tax year (each such “tax year” being a period of twelve (12) consecutive calendar months for which the applicable
taxing authority levies or assesses Taxes), for the balance of the Term, Tenant
shall pay to Landlord the amount of all Taxes levied and assessed for any such
year upon the Premises during the Term.  “Taxes”
shall mean all government impositions including, without limitation, property
tax costs consisting of real and personal property taxes and assessments
(including amounts due under any improvement bond upon the Premises or any
portion thereof, including the parcel or parcels of real property upon which
the Building is located or assessments levied in lieu thereof) imposed by any
federal, state, regional, local or municipal governmental authority, agency or
subdivision (each, a “Governmental Authority”) on the Premises or
improvements thereon, any tax on or measured by gross rentals received from the
rental of space in the Building, or tax based on the square footage of the
Premises or the Building as well as any parking charges, utilities surcharges,
or any other costs levied, assessed or imposed by, or at the direction of, or
resulting from statutes or regulations, or interpretations thereof, promulgated
by any Governmental Authority in connection with the use or occupancy of the
Premises or the parking facilities serving the Premises; any tax on this
transaction or this Lease; provided, however, that “Taxes” shall
in no event include any franchise or income tax or any tax based on net rentals
received from the rental of space in the Building.  Any amount paid by Tenant for any partial
year of the Term shall be prorated on the basis of the number of days of such
partial year.  Payment shall be made in
the following manner: Tenant shall pay to Landlord the amounts owed under this Section
7 within thirty (30) days after Landlord gives notice to Tenant of the
amount of such Taxes payable by Tenant (or not less than twenty (20) days prior
to delinquency, whichever is later). 
Landlord also shall provide Tenant with a copy of the applicable tax
bill or tax statement from the relevant taxing authority. Notwithstanding the
foregoing, if Applicable Laws allow any such Taxes to be paid in installments,
then Tenant may make such payments to Landlord in installments, provided that
each such installment shall be payable to Landlord not less than twenty (20)
days prior to the date upon which payment of the applicable installment to the
taxing authority becomes delinquent. In addition to any other amounts due from
Tenant to Landlord, if Tenant fails to pay Taxes to Landlord as herein
required, Tenant shall pay to Landlord the amount of any interest, penalties or
late charges imposed for late payment.  “Applicable
Laws” means all laws, codes, ordinances, rules and regulations of
Governmental Authorities having jurisdiction over the Premises or any portion
thereof, or over Landlord or Tenant.

(a)           If
the Premises are separately assessed, Tenant shall have the right, by
appropriate proceedings, to protest or contest in good faith any assessment or
reassessment of Taxes, any special assessment, or the validity of any Taxes or
of any change in assessment or tax rate; provided, however, that prior
to any such challenge Tenant must either (a) pay the Taxes alleged to be due in
their entirety and seek a refund from the appropriate authority or (b) post a

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bond in an amount sufficient to ensure full payment of
the Taxes, including any potential interest, late charges and penalties.  Upon a final determination with respect to
any such contest or protest, Tenant shall promptly pay to the appropriate
Governmental Authority all sums found to be due with respect thereto. In any
such protest or contest, Tenant may act in its own name, and at the request of
Tenant, Landlord shall cooperate with Tenant in any way Tenant may reasonably
require in connection with such contest or protest, including signing such
documents as Tenant reasonably shall request, provided that such
cooperation shall be at no expense to Landlord and shall not require Landlord
to attend any appeal or other hearing. 
Any such contest or protest shall be at Tenant’s sole expense, and if
any penalties, interest or late charges become payable with respect to the
Taxes as a result of such contest or protest, Tenant shall pay the same.

(b)           If
Tenant obtains a refund as the result of Tenant’s protest or contest, and
subject to Tenant’s obligation to pay Landlord’s costs (if any) associated
therewith, Tenant shall be entitled to such refund to the extent it relates to
the Premises during the Term.

7.2.          Tenant
shall be solely responsible for the payment of any and all taxes levied upon
personal property and trade fixtures located upon the Premises, and shall pay
the same at least ten (10) days prior to delinquency.

7.3.          If,
at any time during the Term under the laws of any Governmental Authority, a tax
or excise on rent or any other tax howsoever described is levied or assessed by
any such political body against Landlord on account of rentals payable to
Landlord hereunder, such tax or excise shall be considered “Taxes” for
the purposes of this Section 7, although any amount assessed against
Landlord as state or federal income tax shall not be deemed “Taxes.”

7.4.          To
the extent Landlord is required by a lender, Tenant shall timely pay all tax
and insurance impound payments due on the Premises.

8.             Rentable
Area.

8.1.          The
term “Rentable Area” as set forth in Section 2, and as may
otherwise be referenced within this Lease.

8.2.          The
“Rentable Area” of the Building is generally determined by making
separate calculations of Rentable Area applicable to each floor within the
Building and totaling the Rentable Area of all floors within the Building. The
Rentable Area of a floor is computed by measuring to the outside finished
surface of the permanent outer Building walls. 
The full area calculated as previously set forth is included as Rentable
Area, without deduction for columns and projections or vertical penetrations,
including stairs, elevator shafts, flues, pipe shafts, vertical ducts and the
like, as well as such items’ enclosing walls.

9.             Security
Deposit.

9.1.          Tenant
has deposited with Landlord the sum set forth in Section 2.7 (payable in
cash or, in the form of a letter of credit reasonably acceptable to Landlord)
(the “Security Deposit”), which Security Deposit shall be held by
Landlord as security for the faithful performance by Tenant of all of the
terms, covenants and conditions of this Lease to be kept and performed by
Tenant during the period commencing on the Commencement Date and ending upon
the expiration or termination of this Lease. 
If Tenant defaults with respect to any provision of this Lease,
including, but not limited to, any provision relating to the payment of Rent,
then Landlord may (but shall not be required to) use, apply or retain all or
any part of the Security Deposit for the payment of any Rent or any other sum
in default, or to compensate Landlord for any other loss or damage that
Landlord may suffer by reason of Tenant’s default.  If any portion of the Security Deposit is so
used or applied, then Tenant shall, within ten (10) days following demand
therefor, deposit cash with Landlord in an amount sufficient to restore the
Security Deposit to its original amount, or replenish the letter of credit to
the amount required hereunder, and Tenant’s failure to do so shall be a material
breach of this Lease. Landlord shall not be required to keep this Security
Deposit separate from its general fund, and Tenant shall not be entitled to
interest on the Security Deposit.

9.2.          In
lieu of depositing cash as the Security Deposit, Tenant shall have the right to
deliver to Landlord an unconditional, irrevocable, standby letter of credit in
the amount of the

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cash Security Deposit
otherwise required hereunder, which letter of credit shall (i) be in a form
reasonably acceptable to Landlord, (ii) be issued by a financial institution
selected by Tenant and reasonably acceptable to Landlord, (iii) be for the
benefit of Landlord, but shall be transferable at Tenant’s sole cost and
expense by Landlord to any subsequent purchaser or encumbrancer of the
Building, and (iv) be payable by draft sight in a location reasonably
acceptable to Landlord upon presentation of a certification signed by an
officer of Landlord which states that an event of Default has occurred under
this Lease, and (v) be payable in the event such letter of credit is not
renewed on or before the date which is thirty (30) days prior to its
expiration.  Any amounts of cash drawn on
a letter of credit Security Deposit will thereafter be treated as a cash
Security Deposit hereunder; provided that Tenant shall be permitted to
restore the original balance of the letter of credit and have the corresponding
cash Security Deposit returned to Tenant.

9.3.          In
the event of bankruptcy or other debtor-creditor proceedings against Tenant,
the Security Deposit shall be deemed to be applied first to the payment of Rent
and other charges due Landlord for all periods prior to the filing of such
proceedings.

9.4.          Landlord
may deliver to any purchaser of Landlord’s interest in the Premises the funds
deposited hereunder by Tenant, and thereupon Landlord shall be discharged from
any further liability with respect to such deposit.  This provision shall also apply to any
subsequent transfers.

9.5.          If
Tenant shall fully and faithfully perform every provision of this Lease to be
performed by it, then the Security Deposit, or any balance thereof, shall be
returned to Tenant (or, at Landlord’s option, to the last assignee of Tenant’s
interest hereunder) within thirty (30) days after the expiration or earlier
termination of this Lease.

10.           Use.

10.1.        Tenant
shall use the Premises for the purpose set forth in Section 2.8, and
shall not use the Premises, or permit or suffer the Premises to be used, for
any other purpose without Landlord’s prior written consent, which consent
Landlord may withhold in its sole and absolute discretion.

10.2.        Tenant shall not use or
occupy the Premises in violation of Applicable Laws; zoning ordinances; or the
certificate of occupancy issued for the Building, and shall, upon five (5) days’
written notice from Landlord, discontinue any use of the Premises that is
declared or claimed by any Governmental Authority having jurisdiction to be a
violation of any of the above, or that in Landlord’s reasonable opinion
violates any of the above.  Tenant shall
comply with any direction of any Governmental Authority having jurisdiction
that shall, by reason of the nature of Tenant’s use or occupancy of the
Premises, impose any duty upon Tenant or Landlord with respect to the Premises
or with respect to the use or occupation thereof.

10.3.        Tenant shall not knowingly
do or permit to be done anything that will invalidate or increase the cost of
any fire, environmental, extended coverage or any other insurance policy
covering the Premises, and shall comply with all rules, orders, regulations and
requirements of the insurers of the Premises, and Tenant shall promptly, upon
demand, reimburse Landlord for any additional premium charged for such policy
by reason of Tenant’s failure to comply with the provisions of this Section.

10.4.        No awnings or other
projections shall be attached to any outside wall of the Building.

10.5.        No additional sign,
advertisement or notice shall be exhibited, painted or affixed by Tenant on any
part of the exterior of the Building or on the Property without Landlord’s
prior written consent, which will not be unreasonably withheld.  By executing this Lease, Landlord hereby
approves the signage currently existing on the Premises.

10.6.        Tenant shall not use or
allow the Premises to be used for unlawful purposes, nor shall Tenant knowingly
cause, maintain or permit any nuisance or waste in, on or about the Premises.

10.7.        Notwithstanding any other
provision herein to the contrary, Tenant shall be responsible for all
liabilities, costs and expenses arising out of or in connection with the

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compliance of the Premises with the Americans with
Disabilities Act, 42 U.S.C. § 12101, et seq. (together with regulations
promulgated pursuant thereto, the “ADA”), and Tenant shall indemnify,
defend and hold harmless Landlord from and against any loss, cost, liability or
expense (including reasonable attorneys’ fees and disbursements) arising out of
any failure of the Premises to comply with the ADA.  The provisions of this Section 10.7
shall survive the expiration or earlier termination of this Lease.

11.           Brokers.

11.1.        Tenant represents and
warrants that it has had no dealings with any real estate broker or agent in
connection with the negotiation of this Lease and that it knows of no real
estate broker or agent that is or might be entitled to a commission in
connection with this Lease.

11.2.        Tenant represents and
warrants that no broker or agent has made any representation or warranty relied
upon by Tenant in Tenant’s decision to enter into this Lease, other than as
contained in this Lease.

11.3.        Tenant acknowledges and
agrees that the employment of brokers by Landlord is for the purpose of
solicitation of offers of leases from prospective tenants and that no authority
is granted to any broker to furnish any representation (written or oral) or
warranty from Landlord unless expressly contained within this Lease.  Landlord is executing this Lease in reliance
upon Tenant’s representations and warranties contained within Sections 11.1
and 11.2.

12.           Holding
Over.

12.1.        If, with Landlord’s prior
written consent, Tenant holds possession of all or any part of the Premises
after the Term, Tenant shall become a tenant from month to month after the
expiration or earlier termination of the Term, and in such case Tenant shall
continue to pay (a) the Basic Annual Rent in accordance with Section 5,
as adjusted in accordance with Section 6, and (b) any amounts for which
Tenant would otherwise be liable under this Lease if the Lease were still in
effect, including, without limitation, payments for Taxes and insurance.  Any such month-to-month tenancy shall be
subject to every other term, covenant and agreement contained herein.

12.2.        Notwithstanding the
foregoing, if Tenant remains in possession of the Premises after the expiration
or earlier termination of the Term without Landlord’s prior written consent,
Tenant shall become a tenant at sufferance subject to the terms and conditions
of this Lease, except that the Basic Monthly Rent shall be equal to one hundred
fifty percent (150%) of the Rent in effect during the last thirty (30) days of
the Term.

12.3.        Acceptance by Landlord of
Rent after the expiration or earlier termination of the Term shall not result
in an extension, renewal or reinstatement of this Lease.

12.4.        The foregoing provisions
of this Section 12 are in addition to and do not affect Landlord’s right
of reentry or any other rights of Landlord hereunder or as otherwise provided
by Applicable Laws.

13.           Property
Management Fee.  Tenant shall pay to Landlord on the first day
of each calendar month of the Term, as Additional Rent, the “Property
Management Fee,” which shall equal $1,355.00 per month.

14.           Condition
of Premises.  Tenant acknowledges that neither Landlord nor
any agent of Landlord has made any representation or warranty with respect to
the condition of the Premises, or with respect to the suitability of the
Premises for the conduct of Tenant’s business. 
Tenant’s taking of possession of the Premises shall, except as otherwise
agreed to in writing by Landlord and Tenant, conclusively establish that Tenant
accepts the Premises “as is.”

15.           Utilities
and Services.

15.1.        Tenant shall, at its sole
cost and expense, promptly and properly observe and comply with (including in
the making by Tenant of any alterations to the Premises) all present and future
orders, regulations, directions, rules, laws, ordinances, and requirements of
all

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Governmental Authorities
arising from the use or occupancy of, or applicable to, the Premises or any
portion thereof.

15.2.        Within sixty (60) days
after the Term Commencement Date, and within sixty (60) days after the
beginning of each calendar year during the Term, Landlord shall give Tenant a
written estimate for such calendar year of insurance provided by Landlord (“Insurance
Costs”). Tenant shall pay such estimated amount to Landlord in advance in
equal monthly installments. Within ninety (90) days after the end of each
calendar year, Landlord shall furnish to Tenant a statement showing in
reasonable detail the costs incurred by Landlord for the operation and
maintenance of the Premises during such year (the “Annual Statement”),
and Tenant shall pay to Landlord the costs incurred in excess of the payments
previously made by Tenant within ten (10) days of receipt of the Annual
Statement.  In the event that the
payments previously made by Tenant for the operation and maintenance of the
Premises exceed Tenant’s obligation, such excess amount shall be credited by
Landlord to the Rent or other charges next due and owing, provided that,
if the Term has expired, Landlord shall remit such excess amount to Tenant.

15.3.        Tenant shall make all
arrangements for and pay for all water, sewer, gas, heat, light, power,
telephone service and any other service or utility Tenant required at the
Premises. Landlord shall not be liable for, nor shall any eviction of Tenant
result from, the failure to furnish any utility or service, whether or not such
failure is caused by accident; breakage; repair; strike, lockout or other labor
disturbance or labor dispute of any character; governmental regulation,
moratorium or other governmental action (collectively, “Force Majeure”).  In the event of such failure, Tenant shall
not be entitled to termination of this Lease, any abatement or reduction of
Rent, or relief from the operation of any covenant or agreement of this Lease.
Tenant shall pay for, prior to delinquency of payment therefor, any utilities
and services that may be furnished to the Premises during or, if Tenant
occupies the Premises after the expiration or earlier termination of the Term,
after the Term.

16.           Alterations.

16.1.        Tenant shall make no
alterations, additions or improvements in or to the Premises that cost in
excess of $100,000 without Landlord’s prior written approval, which approval
Landlord shall not unreasonably withhold; provided, however, that
in the event any proposed alteration, addition or improvement affects (a) any
structural portions of the Building, including exterior walls, roof, foundation
or core of the Building, (b) the exterior of the Building or (c) any Building
systems, including elevator, plumbing, air conditioning, heating, electrical,
security, life safety and power, then Landlord may withhold its approval with
respect thereto in its sole and absolute discretion. In seeking Landlord’s
approval, Tenant shall provide Landlord, at least fourteen (14) days in advance
of any proposed construction, with plans, specifications, bid proposals, work
contracts, requests for laydown areas and such other information concerning the
nature and cost of the alterations as Landlord may reasonably request.

16.2.        Tenant shall not construct
or permit to be constructed partitions or other obstructions that might
interfere with free access to mechanical installation or service facilities of
the Building, or interfere with the moving of Landlord’s equipment to or from
the enclosures containing such installations or facilities.

16.3.        Tenant shall accomplish
any work performed on the Premises in such a manner as to permit any fire
sprinkler system and fire water supply lines to remain fully operable at all
times.

16.4.        Tenant covenants and
agrees that all work done by Tenant or Tenant’s contractors shall be performed
in full compliance with Applicable Laws. 
Tenant shall provide Landlord with complete “as-built” drawing print
sets and electronic CADD files on disc showing any changes in the Premises for
which Landlord’s approval is required pursuant to Section 16.1.

16.5.        Before commencing any work
for which Landlord’s approval is required pursuant to Section 16.1,
Tenant shall give Landlord at least fourteen (14) days’ prior written notice of
the proposed commencement of such work and shall, if required by Landlord,
secure, at Tenant’s own cost and expense, a completion and lien indemnity bond
satisfactory to Landlord for said work.

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16.6.        All alterations, attached
equipment, fixtures, additions and improvements, subject to Section 17.6,
attached to or built into the Premises, made by either of the Parties,
including, without limitation, all flooring and wall coverings, built-in
cabinet work and paneling, sinks and related plumbing fixtures, exterior
venting fume hoods and walk-in freezers and refrigerators, ductwork, conduits,
electrical panels and circuits, shall, unless, prior to such construction or
installation, Landlord elects otherwise, become the property of Landlord upon
the expiration or earlier termination of the Term, and shall remain upon and be
surrendered with the Premises as a part thereof.

16.7.        Tenant shall repair any
damage to the Premises caused by Tenant’s removal of any property from the
Premises.  During any such restoration
period, Tenant shall pay Rent to Landlord as provided herein as if said space
were otherwise occupied by Tenant.

16.8.        Except as to those items
listed on Exhibit C attached hereto, all fixtures (except for Tenant’s
trade fixtures), built-in furniture and cabinets installed in and upon the
Premises shall be and remain the property of Landlord and shall not be moved by
Tenant at any time during the Term.  If
Tenant shall fail to remove any of its effects from the Premises prior to
termination of this Lease, then Landlord may, at its option, remove the same in
any manner that Landlord shall choose and store said effects without liability
to Tenant for loss thereof or damage thereto, and Tenant shall pay Landlord,
upon demand, any costs and expenses incurred due to such removal and storage or
Landlord may, at its sole option and without notice to Tenant, sell such
property or any portion thereof at private sale and without legal process for
such price as Landlord may obtain and apply the proceeds of such sale against
any (a) amounts due by Tenant to Landlord under this Lease and (b) any expenses
incident to the removal, storage and sale of said personal property.

16.9.        Notwithstanding any other
provision of this Section 16 to the contrary, in no event shall Tenant
remove any improvement from the Premises as to which Landlord contributed
payment without Landlord’s prior written consent, which consent Landlord may
withhold in its sole and absolute discretion.

16.10.      Tenant shall reimburse
Landlord for any extra expenses incurred by Landlord by reason of faulty work
done by Tenant or its contractors, or by reason of delays caused by such work,
or by reason of inadequate clean-up.

16.11.      After final completion of
the Tenant Improvements (or any other alterations, improvement or additions
performed by Tenant with respect to the Premises) for which Landlord approval
is required pursuant to Section 16.1, Tenant shall submit to Landlord
documentation showing the amounts expended by Tenant with respect to such
Tenant Improvements (or any other alterations, improvement or additions
performed by Tenant with respect to the Premises).

17.           Repairs
and Maintenance.

17.1.        Tenant, at its sole cost
and expense, shall maintain and keep the Premises, all improvements thereon,
and all appurtenances thereto, including but not limited to sidewalks, parking
areas, curbs, roads, driveways, lighting standards, landscaping, sewers, water,
gas and electrical distribution systems and facilities, drainage facilities,
and all signs, both illuminated and non-illuminated that are now or hereafter
on the Premises, in good condition and in a manner consistent with the
Permitted Use. Tenant shall make all repairs, replacements and improvements,
including, without limitation, all structural, roof, HVAC, plumbing and
electrical repairs, replacements and improvements required, and shall keep the
same free and clear from all rubbish and debris. All repairs made by Tenant
shall be at least equal in quality to the original work, and shall be made only
by a licensed bondable contractor. 
Tenant shall not take or omit to take any action, the taking or omission
of which shall cause waste, damage or injury to the Premises.  Tenant shall indemnify, defend (by legal
counsel acceptable to Landlord) and hold harmless Landlord from and against any
and all Claims (as defined below) arising out of the failure of Tenant or
Tenant’s Agents to perform the covenants contained in this paragraph. “Tenant’s
Agents” shall be defined to include Tenant’s officers, employees, agents,
contractors, invitees, customers and subcontractors.

17.2.        Tenant shall maintain the
lines designating the parking spaces in good condition and paint the same as
often as may be necessary, so that they are easily discernable at all times;
resurface the parking areas as necessary to maintain them in good condition;
paint any exterior

 8
 

 

portions of the Building as
necessary to maintain them in good condition; maintain the roof and landscaping
in good condition; maintain sightly screens, barricades or enclosures around
any waste or storage areas; and take all reasonable precautions to insure that
the drainage facilities of the roof are not clogged and are in good and
operable condition at all times.

17.3.        There shall be no
abatement of Rent and no liability of Landlord by reason of any injury to or
interference with Tenant’s business arising from the making of any repairs,
alterations or improvements in or to any portion of the Premises, or in or to
improvements, fixtures, equipment and personal property therein; provided that
Landlord shall not unreasonably interfere with Tenant’s use or quiet enjoyment
of the Premises.

17.4.        Except as provided in Section
21 (Damage or Destruction), during the Term, Landlord shall not be required
to maintain or make any repairs or replacements of any nature or description
whatsoever to the Premises.  Tenant
hereby expressly waives the right to make repairs at the expense of Landlord as
provided for in any Applicable Laws in effect at the time of execution of this
Lease, or in any other Applicable Laws that may hereafter be enacted, and
waives its rights under Applicable Laws relating to a landlord’s duty to
maintain its premises in a tenantable condition. Notwithstanding the foregoing,
if Tenant shall fail, after reasonable notice, to maintain or to commence and
thereafter to proceed with diligence to make any repair required of it pursuant
to the terms of this Lease, Landlord, without being under any obligation to do
so and without thereby waiving such default by Tenant, may so maintain or make
such repair and may charge Tenant for the costs thereof.  Any expense reasonably incurred by Landlord
in connection with the making of such repairs may be billed by Landlord to
Tenant monthly or, at Landlord’s option, immediately, and shall be due and
payable within ten (10) days after such billing or, at Landlord’s option, may
be deducted from the Security Deposit.

17.5.        Landlord and Landlord’s
agents shall have the right to enter upon the Premises or any portion thereof
for the purposes of performing any repairs or maintenance Landlord is permitted
to make pursuant to this Lease, and of ascertaining the condition of the
Premises or whether Tenant is observing and performing Tenant’s obligations
hereunder, all without unreasonable interference from Tenant or Tenant’s
Agents.  Except for emergency maintenance
or repairs, the right of entry contained in this paragraph shall be exercisable
at reasonable times, at reasonable hours and on reasonable notice.

17.6.        Tenant shall, upon the
expiration or sooner termination of the Term, surrender the Premises to
Landlord in as good of a condition as when received, ordinary wear and tear
excepted. The parties acknowledge the nonfunctional status of certain equipment
listed on Exhibit F attached hereto (the “Nonfunctional Equipment”).
Landlord shall have no obligation to alter, remodel, improve, repair, decorate
or paint the Premises or any part thereof.

17.7.        This Section 17 relates
to repairs and maintenance arising in the ordinary course of operation of the
Premises and any related facilities.  In
the event of fire, earthquake, flood, vandalism, war or similar cause of damage
or destruction, Section 21 shall apply in lieu of this Section 17.

18.           Liens.

18.1.        Subject to the immediately
succeeding sentence, Tenant shall keep the Premises free from any liens arising
out of work performed, materials furnished or obligations incurred by Tenant.
Tenant further covenants and agrees that any mechanic’s lien filed against the
Premises for work claimed to have been done for Tenant, or materials claimed to
have been furnished to Tenant, shall be discharged or bonded by Tenant within
ten (10) days after Tenant is given notice thereof, at Tenant’s sole cost and
expense.

18.2.        Should Tenant fail to
discharge or bond against any lien of the nature described in Section 18.1,
Landlord may, at Landlord’s election, pay such claim or post a bond or
otherwise provide security to eliminate the lien as a claim against title, and
Tenant shall immediately reimburse Landlord for the costs thereof as Additional
Rent.

18.3.        In the event that Tenant
leases or finances the acquisition of office equipment, furnishings or other
personal property of a removable nature utilized by Tenant in the operation of
Tenant’s business, Tenant warrants that any Uniform Commercial Code financing
statement executed by Tenant shall, upon its face or by exhibit thereto,
indicate that such financing

 9
 

 

statement is applicable only to removable personal property of Tenant
located within the Premises.  In no event
shall the address of the Premises be furnished on a financing statement without
qualifying language as to applicability of the lien only to removable personal
property located in an identified suite leased by Tenant.  Should any holder of a financing statement
executed by Tenant record or place of record a financing statement that appears
to constitute a lien against any interest of Landlord or against equipment that
may be located other than within an identified suite leased by Tenant, Tenant
shall, within ten (10) days after filing such financing statement, cause (a) a
copy of the lender security agreement or other documents to which the financing
statement pertains to be furnished to Landlord to facilitate Landlord’s ability
to demonstrate that the lien of such financing statement is not applicable to
Landlord’s interest and (b) Tenant’s lender to amend such financing statement
and any other documents of record to clarify that any liens imposed thereby are
not applicable to any interest of Landlord in the Premises.

19.           Indemnification and
Exculpation.

19.1.        Tenant agrees to
indemnify, defend and save  Landlord
harmless from and against any and all demands, claims, liabilities, losses,
costs, expenses, actions, causes of action, damages or judgments, and all
reasonable expenses (including, without limitation, reasonable attorneys’ fees,
charges and disbursements) incurred in investigating or resisting the same
(collectively, “Claims”) arising from injury or death to any person or
injury to any property occurring within or about the Premises arising directly
or indirectly out of Tenant’s or Tenant’s employees’, agents’ or guests’ use or
occupancy of the Premises or a breach or default by Tenant in the performance
of any of its obligations hereunder, except to the extent caused by Landlord’s
willful misconduct or gross negligence.

19.2.        Notwithstanding any
provision of Section 19.1 to the contrary, Landlord shall not be liable
to Tenant for, and Tenant assumes all risk of, damage to personal property or
scientific research, including, without limitation, loss of records kept by
Tenant within the Premises and damage or losses caused by fire, electrical
malfunction, gas explosion or water damage of any type (including, without
limitation, broken water lines, malfunctioning fire sprinkler systems, roof
leaks or stoppages of lines), unless any such loss is due to Landlord’s willful
disregard of written notice by Tenant of need for a repair that Landlord is
responsible to make for an unreasonable period of time, or Landlord’s willful
misconduct or gross negligence.  Tenant
further waives any claim for injury to Tenant’s business or loss of income
relating to any such damage or destruction of personal property as described in
this Section 19.2.

19.3.        Landlord shall not be
liable for any damages arising from any act, omission or neglect of any third
party in connection with the Premises.

19.4.        Tenant acknowledges that
security devices and services, if any, while intended to deter crime, may not
in given instances prevent theft or other criminal acts.  Landlord shall not be liable for injuries or
losses caused by criminal acts of third parties, and Tenant assumes the risk
that any security device or service may malfunction or otherwise be
circumvented by a criminal.  If Tenant
desires protection against such criminal acts, then Tenant shall, at Tenant’s
sole cost and expense, obtain appropriate insurance coverage.

19.5.        The provisions of this Section
19 shall survive the expiration or earlier termination of this Lease.

20.           Insurance;
Waiver of Subrogation.

20.1.        Landlord shall maintain
insurance for the Property and the Building in amounts equal to full
replacement cost (exclusive of the costs of excavation, foundations and
footings, and without reference to depreciation taken by Landlord upon its
books or tax returns). Landlord, subject to availability thereof, shall further
insure, if Landlord deems it appropriate, coverage against flood, environmental
hazard, earthquake, loss or failure of building equipment, rental loss during
the period of repairs or rebuilding, workmen’s compensation insurance and
fidelity bonds for employees employed to perform services.  Notwithstanding the foregoing, Landlord may,
but shall not be deemed required to, provide insurance for any improvements
installed by Tenant or that are in addition to the standard improvements
customarily furnished by Landlord, but only to the extent such are made a part
of or are affixed to the Building.

 10
 

 

20.2.        In addition, Landlord
shall carry public liability insurance with a single limit of not less than One
Million Dollars ($1,000,000) for death or bodily injury, or property damage
with respect to the Property.

20.3.        Tenant shall, at its own
cost and expense, procure and maintain in effect, beginning on the Term
Commencement Date or the date of occupancy, whichever occurs first, and
continuing throughout the Term (and occupancy by Tenant, if any, after
termination of this Lease) comprehensive public liability insurance with limits
of not less than Two Million Dollars ($2,000,000) per occurrence for death or
bodily injury and not less than One Million Dollars ($1,000,000) for property
damage with respect to the Premises.

20.4.        The insurance required to
be purchased and maintained by Tenant pursuant to this Lease shall name
Landlord, BioMed Realty, L.P., BioMed Realty Trust, Inc., and their respective
officers, employees, agents, general partners, members and Lenders (“Landlord
Parties”) as additional insureds. Said insurance shall be with companies
having a rating of not less than policyholder rating of A and financial
category rating of at least Class XII in “Best’s Insurance Guide.” Tenant shall
obtain for Landlord from the insurance companies or cause the insurance
companies to furnish certificates of coverage to Landlord.  No such policy shall be cancelable or subject
to reduction of coverage or other modification or cancellation except after
thirty (30) days’ prior written notice to Landlord from the insurer.  All such policies shall be written as primary
policies, not contributing with and not in excess of the coverage that Landlord
may carry. Tenant’s policy may be a “blanket policy” that specifically provides
that the amount of insurance shall not be prejudiced by other losses covered by
the policy.  Tenant shall, at least
twenty (20) days prior to the expiration of such policies, furnish Landlord
with renewals or binders. Tenant agrees that if Tenant does not take out and
maintain such insurance, Landlord may (but shall not be required to) procure
said insurance on Tenant’s behalf and at its cost to be paid by Tenant as
Additional Rent.

20.5.        Tenant assumes the risk of
damage to any fixtures, goods, inventory, merchandise, equipment and leasehold
improvements, and Landlord shall not be liable for injury to Tenant’s business
or any loss of income therefrom, relative to such damage, except to the extent
caused by Landlord’s gross negligence or intentional misconduct. Tenant shall,
at Tenant’s sole cost and expense, carry such insurance as Tenant desires for
Tenant’s protection with respect to personal property of Tenant or business
interruption.

20.6.        In each instance where
insurance is to name Landlord Parties as additional insureds, Tenant shall,
upon Landlord’s written request, also designate and furnish certificates
evidencing such Landlord Parties as additional insureds to (a) any Lender of
Landlord holding a security interest in the Premises or any portion thereof,
(b) the landlord under any lease whereunder Landlord is a tenant of the real
property upon which the Building is located if the interest of Landlord is or
shall become that of a tenant under a ground lease rather than that of a fee
owner, and (c) any management company retained by Landlord to manage the
Premises.

20.7.        Landlord and Tenant each
hereby waive any and all rights of recovery against the other or against the
officers, directors, employees, agents and representatives of the other on
account of loss or damage occasioned by such waiving party or its property or
the property of others under such waiving party’s control, in each case to the
extent that such loss or damage is insured against under any fire and extended
coverage insurance policy that either Landlord or Tenant may have in force at
the time of such loss or damage.  Such
waivers shall continue so long as their respective insurers so permit.  Any termination of such a waiver shall be by
written notice to the other party, containing a description of the circumstances
hereinafter set forth in this Section 20.7. Landlord and Tenant, upon
obtaining the policies of insurance required or permitted under this Lease,
shall give notice to the insurance carrier or carriers that the foregoing
mutual waiver of subrogation is contained in this Lease.  If such policies shall not be obtainable with
such waiver or shall be so obtainable only at a premium over that chargeable
without such waiver, then the party seeking such policy shall notify the other
of such conditions, and the party so notified shall have ten (10) days
thereafter to either (a) procure such insurance with companies reasonably
satisfactory to the other party or (b) agree to pay such additional premium. If
the parties do not accomplish either (a) or (b), then this Section 20.7
shall have no effect during such time as such policies shall not be obtainable
or the party in whose favor a waiver of subrogation is desired refuses to pay
the additional premium.  If such policies
shall at any time be unobtainable, but shall be subsequently obtainable, then
neither party shall be subsequently

 11
 

 

liable for a failure to
obtain such insurance until a reasonable time after notification thereof by the
other party.  If the release of either
Landlord or Tenant, as set forth in the first sentence of this Section 20.7,
shall contravene Applicable Laws, then the liability of the party in question
shall be deemed not released but shall be secondary to the other party’s
insurer.

20.8.        Any costs incurred by
Landlord pursuant to this Section 20 shall be included as Insurance
Costs payable by Tenant pursuant to this Lease.

21.           Damage
or Destruction.

21.1.        In the event of a partial
destruction of the Premises by fire or other perils covered by extended
coverage insurance not exceeding 50% of the full insurable value thereof, and provided
that the damage thereto is such that the Premises may be repaired,
reconstructed or restored within a period of 12 months from the date of the
happening of such casualty.  Landlord
shall commence and proceed diligently with the work of repair, reconstruction
and restoration of the Premises, and this Lease shall continue in full force
and effect.

21.2.        In the event of any damage
to or destruction of the Premises other than as described in Section 21.1,
Landlord may elect to repair, reconstruct and restore the Premises, in which
case this Lease shall continue in full force and effect.  If Landlord elects not to repair the
Premises, then this Lease shall terminate as of the date of such damage or
destruction.

21.3.        Landlord shall give
written notice to Tenant of its election not to repair, reconstruct or restore
the Premises within sixty (60) days following the date of damage or
destruction.

21.4.        Upon any termination of
this Lease under any of the provisions of this Section 21, the parties
shall be released thereby without further obligation to the other from the date
possession of the Premises is surrendered to the Landlord, except with regard
to (a) items occurring prior to the damage or destruction and (b) provisions of
this Lease that, by their express terms, survive the expiration or earlier
termination hereof.

21.5.        In the event of repair,
reconstruction and restoration as provided in this Section 21, all Rent
to be paid by Tenant under this Lease shall be abated proportionately based on
the extent to which Tenant’s use of the Premises is impaired during the period
of such repair, reconstruction or restoration, unless Landlord provides Tenant
with other space during the period of repair that, in Tenant’s reasonable
opinion, is suitable for the temporary conduct of Tenant’s business.

21.6.        Notwithstanding anything
to the contrary contained in this Section 21, should Landlord be delayed
or prevented from completing the repair, reconstruction or restoration of the
damage or destruction to the Premises after the occurrence of such damage or
destruction by Force Majeure, then the time for Landlord to commence or
complete repairs shall be extended on a day-for-day basis; provided, however,
that, if such Force Majeure event continues for more than 120 days, Tenant
shall have the right to terminate this Lease. 
Tenant shall be released from any obligations under this Lease (except
with regard to those provisions that, by their express terms, survive the
expiration or earlier termination hereof) if, on the date that is 12 months
after the date of damage or destruction, the repair, reconstruction or
restoration required to be performed by Landlord to provide Tenant use of the
Premises is not then Substantially Completed.

21.7.        If Landlord is obligated
to or elects to repair, reconstruct or restore as herein provided, then
Landlord shall be obligated to make such repair, reconstruction or restoration
only with regard to those portions of the Premises that were originally provided
at Landlord’s expense. The repair, reconstruction or restoration of
improvements not originally provided by Landlord or at Landlord’s expense shall
be the obligation of Tenant.  In the
event Tenant has elected to upgrade certain improvements from the Building
Standard, Landlord shall, upon the need for replacement due to an insured loss,
provide only the Building Standard, unless Tenant again elects to upgrade such
improvements and pay any incremental costs related thereto, except to the
extent that excess insurance proceeds, if received, are adequate to provide
such upgrades, in addition to providing for basic repair, reconstruction and
restoration of the Premises.

 12
 

 

21.8.        Notwithstanding anything
to the contrary contained in this Section 21, Landlord shall not have
any obligation whatsoever to repair, reconstruct or restore the Premises if the
damage resulting from any casualty covered under this Section 21 occurs
during the last eighteen (18) months of the Term or any extension hereof, or to
the extent that insurance proceeds are not available therefore, unless such
lack of availability is due to Landlord’s failure to maintain insurance in
accordance with this Lease.

21.9.        Landlord’s obligation,
should it elect or be obligated to repair or rebuild, shall be limited to the
Premises; provided that Tenant shall, at its expense, replace or fully
repair all of Tenant’s personal property. 
If the Premises are to be repaired in accordance with the foregoing,
Landlord shall make available to Tenant any portion of insurance proceeds it
receives that are allocable to the alterations constructed by Tenant pursuant
to this Lease, provided Tenant is not then in default under this Lease.

22.           Eminent
Domain.

22.1.        In the event the whole of
the Premises, or such part thereof as shall substantially interfere with the
Tenant’s use and occupancy thereof, shall be taken for any public or
quasi-public purpose by any lawful power or authority by exercise of the right
of appropriation, condemnation or eminent domain, or sold to prevent such
taking, Tenant or Landlord may terminate this Lease effective as of the date
possession is required to be surrendered to said authority.

22.2.        In the event of a partial
taking of the Premises, or of drives, walkways or parking areas serving the Premises
for any public or quasi-public purpose by any lawful power or authority by
exercise of right of appropriation, condemnation, or eminent domain, or sold to
prevent such taking, then, without regard to whether any portion of the
Premises occupied by Tenant was so taken, Landlord may elect to terminate this
Lease as of such taking if such taking is, in Landlord’s reasonable
opinion,  of a material nature such as to
make it uneconomical to continue use of the unappropriated portion for purposes
of renting office or laboratory space.

22.3.        Tenant shall be entitled
to any award that is specifically awarded as compensation for (a) the taking of
Tenant’s personal property that was installed at Tenant’s expense and (b) the
costs of Tenant moving to a new location. 
Except as set forth in the previous sentence, any award for such taking
shall be the property of Landlord.

22.4.        If, upon any taking of the
nature described in this Section 22, this Lease continues in effect,
then Landlord shall promptly proceed to restore the Premises to substantially
their same condition prior to such partial taking.  To the extent such restoration is feasible,
as determined by Landlord in its reasonable discretion, the Rent shall be
decreased by a number, the numerator of which is the rental value of the
Premises prior to such taking, and the denominator of which is the value of the
Premises after such taking.

23.           Defaults
and Remedies.

23.1.        Late payment by Tenant to
Landlord of Rent and other sums due shall cause Landlord to incur costs not
contemplated by this Lease, the exact amount of which shall be extremely
difficult and impracticable to ascertain. 
Such costs include, but are not limited to, processing and accounting
charges and late charges that may be imposed on Landlord by the terms of any
mortgage or trust deed covering the Premises. 
Therefore, if any installment of Rent due from Tenant is not received by
Landlord within five (5) days after the date such payment is due, Tenant shall
pay to Landlord an additional sum of five percent (5%) of the overdue Rent as a
late charge.  The parties agree that this
late charge represents a fair and reasonable estimate of the costs that
Landlord shall incur by reason of late payment by Tenant.  In addition to the late charge, Rent not paid
when due shall bear interest from the fifth (5th) day after the date due until paid at
the lesser of (a) twelve percent (12%) per annum or (b) the maximum rate
permitted by Applicable Laws.

23.2.        No payment by Tenant or
receipt by Landlord of a lesser amount than the Rent payment herein stipulated
shall be deemed to be other than on account of the Rent, nor shall any
endorsement or statement on any check or any letter accompanying any check or
payment as Rent be deemed an accord and satisfaction, and Landlord may accept
such check or payment without prejudice to Landlord’s right to recover the
balance of such Rent or pursue any other

 13

 

remedy provided in this
Lease or in equity or at law.  If a
dispute shall arise as to any amount or sum of money to be paid by Tenant to
Landlord hereunder, Tenant shall have the right to make payment “under protest,”
such payment shall not be regarded as a voluntary payment, and there shall
survive the right on the part of Tenant to institute suit for recovery of the
payment paid under protest.

23.3.        If Tenant fails to pay any
sum of money (other than Basic Annual Rent or Rental Adjustments) required to
be paid by it hereunder, or shall fail to perform any other act on its part to
be performed hereunder, Landlord may, without waiving or releasing Tenant from
any obligations of Tenant, but shall not be obligated to, make such payment or
perform such act; provided that such failure by Tenant continues for 5
days after Landlord delivers notice to Tenant demanding performance by Tenant;
or that such failure by Tenant unreasonably interfered with the efficient
operation of the Premises, or resulted or could have resulted in a violation of
Applicable Laws or the cancellation of an insurance policy maintained by
Landlord. Tenant shall pay to Landlord as Additional Rent all sums so paid or
incurred by Landlord, together with interest thereon, from the date such sums were
paid or incurred, at the annual rate equal to twelve percent (12%) per annum or
highest rate permitted by Applicable Laws, whichever is less.

23.4.        The occurrence of any one
or more of the following events shall constitute a “Default” hereunder
by Tenant:

(a)           The abandonment or vacation
of the Premises by Tenant;

(b)           The
failure by Tenant to make any payment of Rent, as and when due, where such
failure shall continue for a period of 5 days after written notice thereof from
Landlord to Tenant;

(c)           The
failure by Tenant to observe or perform any obligation or covenant contained
herein (other than described in Subsections 23.4(a) and 23.4(b))
to be performed by Tenant, where such failure shall continue for a period of 30
days after written notice thereof from Landlord to Tenant; provided
that, if the nature of Tenant’s default is such that it reasonably requires
more than 30 days to cure, Tenant shall not be deemed to be in default if
Tenant shall commence such cure within said 30-day period and thereafter diligently
prosecute the same to completion;

(d)           Tenant
makes an assignment for the benefit of creditors;

(e)           A
receiver, trustee or custodian is appointed to or does take title, possession
or control of all or substantially all of Tenant’s assets;

(f)            Tenant
files a voluntary petition under the United States Bankruptcy Code or any
successor statute (the “Code”) or an order for relief is entered against
Tenant pursuant to a voluntary or involuntary proceeding commenced under any
chapter of the Code;

(g)           Any
involuntary petition if filed against Tenant under any chapter of the Code and
is not dismissed within one hundred twenty (120) days;

(h)           Failure
to deliver an estoppel certificate within 5 days of the time period required in
accordance with Section 28; or

(i)            Tenant’s
interest in this Lease is attached, executed upon or otherwise judicially
seized and such action is not released within one hundred twenty (120) days of
the action.

(j)            Notices
given under this Section 23.4 shall specify the alleged default and
shall demand that Tenant perform the provisions of this Lease or pay the Rent
that is in arrears, as the case may be, within the applicable period of time,
or quit the Premises.  No such notice
shall be deemed a forfeiture or a termination of this Lease unless Landlord
elects otherwise in such notice.

(k)           Notwithstanding
any other provision in this Section 23.4, in the event the occurrence of
any of the events specified in subparagraphs (a) through (j) above cause a

 14
 

 

condition that poses an imminent threat to the public
health, safety or welfare, the applicable cure periods set forth in such
subparagraph shall not apply, and the occurrence of such event shall
immediately constitute a material “Default” hereunder.

23.5.        In the event of a Default by
Tenant, and at any time thereafter, with or without notice or demand and
without limiting Landlord in the exercise of any right or remedy that Landlord
may have, Landlord shall be entitled to terminate Tenant’s right to possession
of the Premises by any lawful means, in which case this Lease shall terminate
and Tenant shall immediately surrender possession of the Premises to
Landlord.  In such event, Landlord shall
have the immediate right to re-enter and remove all persons and property, and
such property may be removed and stored in a public warehouse or elsewhere at
the cost and for the account of Tenant, all without service of notice or resort
to legal process and without being deemed guilty of trespass or becoming liable
for any loss or damage that may be occasioned thereby.  In the event that Landlord shall elect to so
terminate this Lease, then Landlord shall be entitled to recover from Tenant
all damages incurred by Landlord by reason of Tenant’s default, including, without
limitation:

(a)           The
worth at the time of award of any unpaid Rent that had accrued at the time of
such termination; plus

(b)           The
worth at the time of award of the amount by which the unpaid Rent that would
have accrued during the period commencing with termination of the Lease and
ending at the time of award exceeds that portion of the loss of Landlord’s rental income from the Premises that
Tenant proves to Landlord’s
reasonable satisfaction could have been reasonably avoided; plus

(c)           The
worth at the time of award of the amount by which the unpaid Rent for the
balance of the Term after the time of award exceeds that portion of the loss of
Landlord’s rental income from the Premises that Tenant proves to Landlord’s reasonable satisfaction could have been
reasonably avoided; plus

(d)           Any
other amount necessary to compensate Landlord for all the detriment proximately
caused by Tenant’s failure to perform its obligations under this Lease or that
in the ordinary course of things would be likely to result therefrom,
including, without limitation, the cost of restoring the Premises to the
condition required under the terms of this Lease; plus

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

As used in Subsections
23.5(a) and 23.5(b), “worth at the time of award” shall be computed
by allowing interest at the rate specified in Section 23.1. As used in Subsection
23.5(c) above, the “worth at the time of the award” shall be computed by
taking the present value of such amount, using the discount rate of the Federal
Reserve Bank of San Francisco at the time of the award plus one (1) percentage
points.

23.6.        If Landlord does not elect
to terminate this Lease as provided in Section 23.5, then Landlord may,
from time to time, recover all Rent as it becomes due under this Lease.  At any time thereafter, Landlord may elect to
terminate this Lease and to recover damages to which Landlord is entitled.

23.7.        In the event Landlord
elects to terminate this Lease and relet the Premises, Landlord may execute any
new lease in its own name.  Tenant
hereunder shall have no right or authority whatsoever to collect any Rent from
such tenant.  The proceeds of any such
reletting shall be applied as follows:

(a)           First,
to the payment of any indebtedness other than Rent due hereunder from Tenant to
Landlord, including, without limitation, storage charges or brokerage
commissions owing from Tenant to Landlord as the result of such reletting;

(b)           Second,
to the payment of the costs and expenses of reletting the Premises, including
(i) alterations and repairs that Landlord deems reasonably necessary and
advisable and (ii) reasonable attorneys’ fees, charges and disbursements
incurred by Landlord in connection with the retaking of the Premises and such
reletting;

 15
 

 

(c)           Third,
to the payment of Rent and other charges due and unpaid hereunder; and

(d)           Fourth,
to the payment of future Rent and other damages payable by Tenant under this
Lease.

23.8.        All of Landlord’s rights,
options and remedies hereunder shall be construed and held to be nonexclusive
and cumulative.  Landlord shall have the
right to pursue any one or all of such remedies, or any other remedy or relief
that may be provided by Applicable Laws, whether or not stated in this Lease.  No waiver of any default of Tenant hereunder
shall be implied from any acceptance by Landlord of any Rent or other payments
due hereunder or any omission by Landlord to take any action on account of such
default if such default persists or is repeated, and no express waiver shall
affect defaults other than as specified in said waiver.

23.9.        Landlord’s termination of
(a) this Lease or (b) Tenant’s right to possession of the Premises shall not
relieve Tenant of any liability to Landlord that has previously accrued or that
shall arise based upon events that occurred prior to the later to occur of (i)
the date of Lease termination or (ii) the date Tenant surrenders possession of
the Premises.

23.10.      To the extent permitted by
Applicable Laws, Tenant waives any and all rights of redemption granted by or
under any present or future Applicable Laws if Tenant is evicted or
dispossessed for any cause, or if Landlord obtains possession of the Premises
due to Tenant’s default hereunder or otherwise.

23.11.      Landlord shall not be in
default under this Lease unless Landlord fails to perform obligations required
of Landlord within a reasonable time, but in no event shall such failure to
continue for more than thirty (30) days after written notice from Tenant
specifying the nature of Landlord’s failure; provided, however,
that if the nature of Landlord’s obligation is such that more than thirty (30)
days are required for its performance, then Landlord shall not be in default if
Landlord commences performance within such thirty (30) day period and
thereafter diligently prosecutes the same to completion.

23.12.      In the event of any default
by Landlord, Tenant shall give notice by registered or certified mail to any
(a) beneficiary of a deed of trust or (b) mortgagee under a mortgage covering
the Premises or any portion thereof and to any landlord of any lease of land
upon or within which the Premises are located, and shall offer such
beneficiary, mortgagee or landlord a reasonable opportunity to cure the
default, including time to obtain possession of the Premises by power of sale
or a judicial action if such should prove necessary to effect a cure; provided
that Landlord shall promptly furnish to Tenant in writing, upon written request
by Tenant, the names and addresses of all such persons who are to receive such
notices.

24.           Assignment
or Subletting.

24.1.        Except as hereinafter
provided, Tenant shall not, either voluntarily or by operation of Applicable
Laws, directly or indirectly sell, hypothecate, assign, pledge, encumber or otherwise
transfer this Lease, or sublet the Premises or any part hereof (each, a “Transfer”),
without Landlord’s prior written consent, which consent Landlord may not
unreasonably withhold or delay; provided that, without the consent of Landlord,
Tenant may assign this Lease to a party that acquires substantially all the
assets of or equity in Tenant.

24.2.        In the event Tenant
desires to effect a Transfer, then, at least forty-five (45) but not more than
ninety (90) days prior  to the date when
Tenant desires the assignment or sublease to be effective (the “Assignment
Date”), Tenant shall provide written notice to Landlord (the “Assignment
Notice”) containing information (including references) concerning the
character of the proposed transferee, assignee or sublessee; the Assignment
Date; any ownership or commercial relationship between Tenant and the proposed
transferee, assignee or sublessee; and the consideration and all other material
terms and conditions of the proposed Transfer, all in such detail as Landlord
shall reasonably require. Tenant shall also tender to Landlord reasonable
attorneys’ fees and other costs or overhead expenses incurred by Landlord in
reviewing Tenant’s request for such Transfer; provided that such costs and
expenses shall not exceed $2,000.00.

24.3.        Landlord, in determining
whether consent should be given to a proposed Transfer, may give consideration
to the financial strength of such transferee, assignee or sublessee

 16
 

 

(notwithstanding Tenant
remaining liable for Tenant’s performance), any change in use that such
transferee, assignee or sublessee proposes to make in the use of the
Premises.  In no event shall Landlord be
deemed to be unreasonable for declining to consent to a Transfer to a transferee,
assignee or sublessee of poor reputation, lacking financial qualifications,
seeking a material change in the Permitted Use, or jeopardizing directly or
indirectly the status of Landlord or any of Landlord’s affiliates as a Real
Estate Investment Trust under the Code.

24.4.        As conditions precedent to
Tenant subleasing or transferring any rights to the Premises, Landlord may
require any or all of the following: 

(a)           Tenant shall remain
fully liable under this Lease during the unexpired Term;

(b)           Tenant shall provide
Landlord with evidence reasonably satisfactory to Landlord respecting the
relevant business experience and financial responsibility and status of the
proposed transferee, assignee or sublessee;

(c)           Tenant
shall reimburse Landlord for Landlord’s actual costs and expenses, including,
without limitation, reasonable attorneys’ fees, charges and disbursements
incurred in connection with the review, processing and documentation of such
request; provided that such costs and expenses shall not exceed $2,000.00.

(d)           If
Tenant’s transfer of rights or sharing of the Premises provides for the receipt
by, on behalf of or on account of Tenant of any consideration of any kind
whatsoever (including, without limitation, a premium rental for a sublease or
lump sum payment for an assignment, but excluding Tenant’s reasonable costs in
marketing and subleasing the Premises) in excess of the rental and other
charges due to Landlord under this Lease, Tenant shall pay fifty percent (50%)
of all of such excess to Landlord, after deductions for any transaction costs
incurred by Tenant, including marketing expenses, tenant improvement
allowances, alterations, cash concessions, brokerage commissions, attorneys’
fees and free rent..  If said
consideration consists of cash paid to Tenant, payment to Landlord shall be
made upon receipt by Tenant of such cash payment;

(e)           The proposed
transferee, assignee or sublessee shall agree that, in the event Landlord gives
such proposed transferee, assignee or sublessee notice that Tenant is in
default under this Lease, such proposed transferee, assignee or sublessee shall
thereafter make all payments otherwise due Tenant directly to Landlord, which
payments shall be received by Landlord without any liability being incurred by
Landlord, except to credit such payment against those due by Tenant under this
Lease, and any such proposed transferee, assignee or sublessee shall agree to
attorn to Landlord or its successors and assigns should this Lease be
terminated for any reason; provided, however, that in no event
shall Landlord or its Lenders, successors or assigns be obligated to accept
such attornment;

(f)            Any
such Transfer shall be effected on Landlord’s forms;

(g)           Tenant
shall not then be in material default hereunder in any respect;

(h)           Landlord
shall not be bound by any provision of any agreement pertaining to the
Transfer, without Landlord’s written agreement to the same;

(i)            Tenant
shall deliver to Landlord one executed copy of any and all written instruments
evidencing the Transfer; and

(j)            A
list of Hazardous Materials (as defined in Section 38.7 below),
certified by the proposed transferee, assignee or sublessee to be true and
correct, that the proposed transferee, assignee or sublessee intends to use or
store in the Premises.  Additionally,
Tenant shall deliver to Landlord, on or before the date any proposed
transferee, assignee or sublessee takes occupancy of the Premises, all of the
items relating to Hazardous Materials of such proposed transferee, assignee or
sublessee as described in Section 38.2.

24.5.        Any Transfer that is not
in compliance with the provisions of this Section 24 shall be void and
shall, at the option of Landlord, terminate this Lease.

 17
 

 

24.6.        The consent by Landlord to
a Transfer shall not relieve Tenant or proposed transferee, assignee or
sublessee from obtaining Landlord’s consent to any further Transfer, nor shall
it release Tenant or any proposed transferee, assignee or sublessee of Tenant
from full and primary liability under this Lease unless otherwise agreed in
writing by Landlord.

24.7.        Notwithstanding any
Transfer, Tenant shall remain fully and primarily liable for the payment of all
Rent and other sums due or to become due hereunder, and for the full
performance of all other terms, conditions and covenants to be kept and
performed by Tenant, unless otherwise agreed in writing by Landlord.  The acceptance of Rent or any other sum due
hereunder, or the acceptance of performance of any other term, covenant or
condition thereof, from any person or entity other than Tenant shall not be
deemed a waiver of any of the provisions of this Lease or a consent to any
Transfer.

24.8.        If Tenant delivers to
Landlord an Assignment Notice indicating a desire to transfer this Lease to a
proposed transferee, assignee or sublessee other than as provided within Section
24.4, then Landlord shall have the option, exercisable by giving notice to
Tenant at any time within ten (10) days after Landlord’s receipt of such
Assignment Notice, to terminate this Lease as of the date specified in the
Assignment Notice as the Assignment Date, except for those provisions that, by
their express terms, survive the expiration or earlier termination hereof.  If Landlord exercises such option, then
Tenant shall have the right to withdraw such Assignment Notice by delivering to
Landlord written notice of such election within five (5) days after Landlord’s
delivery of notice electing to exercise Landlord’s option to terminate this
Lease.  In the event Tenant withdraws the
Assignment Notice as provided in this Section 24.8, this Lease shall continue
in full force and effect.  No failure of
Landlord to exercise its option to terminate this Lease shall be deemed to be
Landlord’s consent to a proposed Transfer.

24.9.        If Tenant sublets the
Premises or any portion thereof, Tenant hereby immediately and irrevocably
assigns to Landlord, as security for Tenant’s obligations under this Lease, all
rent from any such subletting, and appoints Landlord as assignee and
attorney-in-fact for Tenant, and Landlord (or a receiver for Tenant appointed
on Landlord’s application) may collect such rent and apply it toward Tenant’s
obligations under this Lease; provided that, until the occurrence of a
Default by Tenant, Tenant shall have the right to collect such rent.

25.           Attorneys’
Fees.  If either party commences an action against
the other party arising out of or in connection with this Lease, then the
prevailing party shall be entitled to have and recover from the non-prevailing
party reasonable attorneys’ fees, charges and disbursements and costs of suit.

26.           Bankruptcy.  In the event a
debtor, trustee or debtor in possession under the Code, or another person with
similar rights, duties and powers under any other Applicable Laws, proposes to
cure any default under this Lease or to assume or assign this Lease and is
obliged to provide adequate assurance to Landlord that (a) a default shall be
cured, (b) Landlord shall be compensated for its damages arising from any
breach of this Lease and (c) future performance of Tenant’s obligations under
this Lease shall occur, then such adequate assurances shall include any or all
of the following, as designated by Landlord in its sole and absolute
discretion:

26.1.        Those acts specified in
the Code or other Applicable Laws as included within the meaning of “adequate
assurance,” even if this Lease does not concern a shopping center or other
facility described in such Applicable Laws;

26.2.        A prompt cash payment to
compensate Landlord for any monetary defaults or actual damages arising
directly from a breach of this Lease;

26.3.        A cash deposit in an
amount at least equal to the then-current amount of the Security Deposit; or

26.4.        The assumption or
assignment of all of Tenant’s interest and obligations under this Lease.

27.           Definition
of Landlord.  With regard to obligations imposed upon
Landlord pursuant to this Lease, the term “Landlord,” as used in this
Lease, shall refer only to Landlord or Landlord’s then-current
successor-in-interest.  In the event of
any transfer, assignment or conveyance of Landlord’s interest in this Lease or
in Landlord’s fee title to or leasehold interest in the Property,

 18
 

 

as applicable, the Landlord herein named (and in case
of any subsequent transfers or conveyances, the subsequent Landlord) shall be
automatically freed and relieved, from and after the date of such transfer,
assignment or conveyance, from all liability for the performance of any
covenants or obligations contained in this Lease thereafter to be performed by
Landlord and, without further agreement, the transferee, assignee or conveyee
of Landlord’s in this Lease or in Landlord’s fee title to or leasehold interest
in the Property, as applicable, shall be deemed to have assumed and agreed to
observe and perform any and all covenants and obligations of Landlord hereunder
during the tenure of its interest in the Lease or the Property.  Landlord or any subsequent Landlord may
transfer its interest in the Premises or this Lease without Tenant’s consent.

28.           Estoppel
Certificate. Tenant shall, within ten
(10) days of receipt of written notice from Landlord, execute, acknowledge and
deliver a statement in writing substantially in the form attached to this Lease
as Exhibit E, or on any other form reasonably requested by a proposed
Lender or purchaser, (a) certifying that this Lease is unmodified and in full
force and effect (or, if modified, stating the nature of such modification and
certifying that this Lease as so modified is in full force and effect) and the
dates to which rental and other charges are paid in advance, if any, (b)
acknowledging that there are not, to Tenant’s knowledge, any uncured defaults
on the part of Landlord hereunder, or specifying such defaults if any are
claimed, and (c) setting forth such further information with respect to this
Lease or the Premises as may be requested thereon. Any such statement may be
relied upon by any prospective purchaser or encumbrancer of all or any portion
of the real property of which the Premises are a part.  Tenant’s failure to deliver such statement
within 5 days of the prescribed time shall, at Landlord’s option, constitute a
Default under this Lease, and, in any event, shall be binding upon Tenant that
the Lease is in full force and effect and without modification except as may be
represented by Landlord in any certificate prepared by Landlord and delivered
to Tenant for execution.

29.           Joint
and Several Obligations. If more
than one person or entity executes this Lease as Tenant, then:

29.1.        Each of them is jointly
and severally liable for the keeping, observing and performing of all of the
terms, covenants, conditions, provisions and agreements of this Lease to be
kept, observed or performed by Tenant; and

29.2.        The term “Tenant”
as used in this Lease shall mean and include each of them, jointly and
severally. The act of, notice from, notice to, refund to, or signature of any
one or more of them with respect to the tenancy under this Lease, including,
without limitation, any renewal, extension, expiration, termination or
modification of this Lease, shall be binding upon each and all of the persons executing
this Lease as Tenant with the same force and effect as if each and all of them
had so acted, so given or received such notice or refund, or so signed.

30.           Limitation
of Landlord’s Liability.

30.1.        If Landlord is in default
under this Lease and, as a consequence, Tenant recovers a monetary judgment
against Landlord, the judgment shall be satisfied only out of (a) the proceeds
of sale received on execution of the judgment and levy against the right, title
and interest of Landlord in the Premises, (b) rent or other income from such
real property receivable by Landlord or (c) the consideration received by
Landlord from the sale, financing, refinancing or other disposition of all or
any part of Landlord’s right, title or interest in the Premises.

30.2.        If Landlord is a
partnership or joint venture, then the partners of such partnership shall not
be personally liable for Landlord’s obligations under this Lease, and no
partner of Landlord shall be sued or named as a party in any suit or action,
and service of process shall not be made against any partner of Landlord except
as may be necessary to secure jurisdiction of the partnership or joint venture.
If Landlord is a corporation, then the shareholders, directors, officers,
employees and agents of such corporation shall not be personally liable for
Landlord’s obligations under this Lease, and no shareholder, director, officer,
employee or agent of Landlord shall be sued or named as a party in any suit or
action, and service of process shall not be made against any shareholder,
director, officer, employee or agent of Landlord, except as may be necessary to
secure jurisdiction of the corporation. 
If Landlord is a limited liability company, then the members of such
limited liability company shall not be personally liable for Landlord’s
obligations under this Lease, and no member of Landlord shall be sued or named
as a party in any suit or action, and service of process shall not be made
against any member of Landlord

 19
 

 

except as may be necessary
to secure jurisdiction of the limited liability company.  No partner, shareholder, director, employee,
member or agent of Landlord shall be required to answer or otherwise plead to
any service of process, and no judgment shall be taken or writ of execution
levied against any partner, shareholder, director, employee or agent of
Landlord.

30.3.        Each of the covenants and
agreements of this Section 30 shall be applicable to any covenant or
agreement either expressly contained in this Lease or imposed by Applicable
Laws and shall survive the expiration or earlier termination of this Lease.

31.           Premises
Control by Landlord.

31.1.        Landlord reserves full
control over the Premises to the extent not inconsistent with Tenant’s
enjoyment of the same as provided by this Lease.  This reservation includes, without
limitation, Landlord’s right to subdivide the Property, convert the Building to
condominium units, grant easements and licenses to third parties, and maintain
or establish ownership of the Building separate from fee title to the Property.

31.2.        Tenant shall, at
Landlord’s request, promptly execute such further documents as may be
reasonably appropriate to assist Landlord in the performance of its obligations
hereunder; provided that Tenant need not execute any document that
creates additional liability for Tenant or that deprives Tenant of the quiet
enjoyment and use of the Premises as provided by this Lease.

31.3.        Landlord may, at any and
all reasonable times during non-business hours (or during business hours if
Tenant so requests), and upon twenty-four (24) hours’ prior notice (provided
that no time restrictions shall apply or advance notice be required if an
emergency necessitates immediate entry), enter the Premises to (a) inspect the
same and to determine whether Tenant is in compliance with its obligations
hereunder, (b) supply any service Landlord is required to provide hereunder,
(c) show the Premises to prospective purchasers or tenants during the final
year of the Term, (d) post notices of nonresponsibility and (e) access the
telephone equipment, electrical substation and fire risers.  In connection with any such alteration,
improvement or repair as described in Section 17.4 above, Landlord may
erect in the Premises scaffolding and other structures reasonably required for
the alteration, improvement or repair work to be performed.  In no event shall Tenant’s Rent abate as a
result of Landlord’s activities pursuant to this Section 31.3; provided,
however, that all such activities shall be conducted in such a manner so
as to cause as little interference to Tenant as is reasonably possible, and
such activities shall not materially interfere with Tenant’s use and quiet
enjoyment of the Premises. Landlord shall at all times retain a key with which
to unlock all of the doors in the Premises. 
If an emergency necessitates immediate access to the Premises, Landlord
may use whatever force is necessary to enter the Premises, and any such entry
to the Premises shall not constitute a forcible or unlawful entry to the
Premises, a detainer of the Premises, or an eviction of Tenant from the
Premises or any portion thereof.

32.           Quiet
Enjoyment. So long as Tenant is not
in default under this Lease, Landlord or anyone acting through or under
Landlord shall not disturb Tenant’s occupancy of the Premises, except as
permitted by this Lease.

33.           Subordination
and Attornment.

33.1.        This Lease shall be
subject and subordinate to the lien of any mortgage, deed of trust, or lease in
which Landlord is tenant now or hereafter in force against the Premises or any
portion thereof and to all advances made or hereafter to be made upon the
security thereof without the necessity of the execution and delivery of any
further instruments on the part of Tenant to effectuate such subordination.

33.2.        Notwithstanding the
foregoing, Tenant shall execute and deliver upon demand such further instrument
or instruments evidencing such subordination of this Lease to the lien of any
such mortgage or mortgages or deeds of trust or lease in which Landlord is
tenant as may be required by Landlord. However, if any such mortgagee,
beneficiary or Landlord under lease wherein Landlord is tenant so elects, this
Lease shall be deemed prior in lien to any such lease, mortgage, or deed of
trust upon or including the Premises regardless of date and Tenant shall
execute a statement in writing to such effect at Landlord’s request.  If Tenant fails to execute any document
required from Tenant under this Section within ten (10) days after written
request therefor, Tenant hereby constitutes and appoints Landlord or its
special attorney-in-fact to

 20
 

 

execute and deliver any such document or documents in
the name of Tenant.  Such power is
coupled with an interest and is irrevocable.

33.3.        In the event any
proceedings are brought for foreclosure, or in the event of the exercise of the
power of sale under any mortgage or deed of trust made by the Landlord covering
the Premises, the Tenant shall at the election of the purchaser at such
foreclosure or sale attorn to the purchaser upon any such foreclosure or sale
and recognize such purchaser as the Landlord under this Lease.

33.4.        Notwithstanding anything
to the contrary contained herein, so long as Tenant is not in default under
this Lease, its peaceful use and occupancy of the Premises under this Lease shall
not be impaired, restricted or terminated by any mortgagee, grand lessor,
beneficiary, or secured party.

34.           Surrender.

34.1.        No surrender of possession
of any part of the Premises shall release Tenant from any of its obligations
hereunder, unless such surrender is accepted in writing by Landlord.

34.2.        The voluntary or other
surrender of this Lease by Tenant shall not effect a merger with Landlord’s fee
title or leasehold interest in the Premises or any portion thereof, unless
Landlord consents in writing, and shall, at Landlord’s option, operate as an
assignment to Landlord of any or all subleases.

34.3.        The voluntary or other
surrender of any ground or other underlying lease that now exists or may
hereafter be executed affecting the Premises or any portion thereof, or a
mutual cancellation thereof or of Landlord’s interest therein by Landlord and
its lessor shall not effect a merger with Landlord’s fee title or leasehold
interest in the Premises and shall, at the option of the successor to
Landlord’s interest in the Premises or any portion thereof operate as an
assignment of this Lease.

35.           Waiver
and Modification. No
provision of this Lease may be modified, amended or supplemented except by an
agreement in writing signed by Landlord and Tenant.  The waiver by Landlord of any breach by
Tenant of any term, covenant or condition herein contained shall not be deemed
to be a waiver of any subsequent breach of the same or any other term, covenant
or condition herein contained.

36.           Waiver
of Jury Trial and Counterclaims. The
parties waive trial by jury in any action, proceeding or counterclaim brought
by the other party hereto related to matters arising out of or in any way
connected with this Lease; the relationship between Landlord and Tenant;
Tenant’s use or occupancy of the Premises; or any claim of injury or damage
related to this Lease or the Premises.

37.           [Intentionally
omitted]

38.           Hazardous
Materials.

38.1.        Tenant shall not cause or
permit any Hazardous Materials (as hereinafter defined) to be brought upon,
kept or used in or about the Premises in violation of Applicable Laws by
Tenant, its agents, employees, contractors or invitees.  If Tenant breaches such obligation, or if the
presence of Hazardous Materials as a result of such a breach results in contamination
of the Premises or any adjacent property, or if contamination of the Premises
or any adjacent property by Hazardous Materials is caused by Tenant or its
agents, contractors, invitees or employees during the term of this Lease or any
extension or renewal hereof or holding over hereunder, then Tenant shall
indemnify, save, defend and hold Landlord, its agents and contractors harmless
from and against any and all claims, judgments, damages, penalties, fines,
costs, liabilities and losses (including, without limitation, diminution in
value of the Premises or any portion thereof; damages for the loss or
restriction on use of rentable or usable space or of any amenity of the
Premises; damages arising from any adverse impact on marketing of space in the
Premises; and sums paid in settlement of claims, attorneys’ fees, consultants’
fees and experts’ fees) that arise during or after the Term as a result of such
breach or contamination.  This
indemnification of Landlord by Tenant includes, without limitation, costs
incurred in connection with any investigation of site conditions or any
cleanup, remedial, removal or restoration work required by

 21
 

 

any Governmental Authority because of Hazardous
Materials present in the air, soil or groundwater above, on or under the
Premises.  Without limiting the
foregoing, if the presence of any Hazardous Materials in, on, under or about
the Premises or any adjacent property caused or permitted by Tenant results in
any contamination of the Premises or any adjacent property, then Tenant shall
promptly take all actions at its sole cost and expense as are necessary to
return the Premises and any adjacent property to their respective condition
existing prior to the time of such contamination; provided that
Landlord’s written approval of such action shall first be obtained, which
approval Landlord shall not unreasonably withhold or delay; and provided,
further, that it shall be reasonable for Landlord to withhold its consent if
such actions could have a material adverse long-term or short-term effect on
the Premises.

38.2.        Landlord acknowledges that
it is not the intent of this Section 38 to prohibit Tenant from
operating its business as described in Section 2.8 above. Tenant may
operate its business according to the custom of Tenant’s industry so long as
the use or presence of Hazardous Materials is strictly and properly monitored
according to Applicable Laws.  As a
material inducement to Landlord to allow Tenant to use Hazardous Materials in
connection with its business, Tenant has delivered to Landlord prior to the
Term Commencement Date a list identifying each type of Hazardous Material to be
present on the Premises and setting forth any and all governmental approvals or
permits required in connection with the presence of such Hazardous Material on
the Premises (the “Hazardous Materials List”). Tenant shall deliver to
Landlord an updated Hazardous Materials List: (a) upon any contamination of the
Premises; or (b) upon the request of Landlord, which Landlord shall not request
more than once per year. Tenant shall deliver to Landlord true and correct
copies of the following documents (hereinafter referred to as the “Documents”)
relating to the handling, storage, disposal and emission of Hazardous Materials
prior to the Term Commencement Date or, if unavailable at that time, concurrent
with the receipt from or submission to any Governmental Authority:  permits; approvals; reports and
correspondence; storage and management plans; notices of violations of
Applicable Laws; plans relating to the installation of any storage tanks to be
installed in or under the Premises (provided that installation of
below-ground storage tanks shall only be permitted after Landlord has given
Tenant its written consent to do so, which consent Landlord may withhold in its
sole and absolute discretion); and all closure plans or any other documents
required by any and all Governmental Authorities for any storage tanks
installed in, on or under the Premises for the closure of any such storage
tanks.  Tenant shall not be required,
however, to provide Landlord with any portion of the Documents containing
information of a proprietary nature that, in and of themselves, do not contain
a reference to any Hazardous Materials or activities related to Hazardous
Materials.

38.3.        Notwithstanding the
provisions of Section 38.1 above, if (a) any proposed transferee,
assignee or sublessee of Tenant has been required by any prior landlord, Lender
or Governmental Authority to take remedial action in connection with Hazardous
Materials contaminating a property if the contamination resulted from such
party’s action or omission or use of the property in question or (ii) any
proposed transferee, assignee or sublessee is subject to an enforcement order
issued by any Governmental Authority in connection with the use, disposal or
storage of Hazardous Materials, then it shall not be unreasonable for Landlord
to withhold its consent to any proposed transfer, assignment or subletting
(with respect to any such matter involving a proposed transferee, assignee or
sublessee).

38.4.        At any time, and from time
to time,  prior to the expiration of the
Term, Landlord shall have the right to conduct appropriate tests of the
Premises to demonstrate that Hazardous Materials are present or that contamination
has occurred due to Tenant or Tenant’s agents, employees or invitees.  Tenant shall pay all reasonable costs of such
tests of the Premises.

38.5.        If underground or other
storage tanks storing Hazardous Materials are located on the Premises or are
hereafter placed on the Premises by any party, Tenant shall monitor the storage
tanks, maintain appropriate records, implement reporting procedures, properly
close any underground storage tanks, and take or cause to be taken all other
steps necessary or required under the Applicable Laws.

38.6.        Tenant’s obligations under
this Section 38 shall survive the expiration or earlier termination of
the Lease.  During any period of time
needed by Tenant or Landlord after the termination of this Lease to complete
the removal from the Premises of any such Hazardous Materials, Tenant shall
continue to pay Rent in accordance with this Lease, which Rent shall be

 22
 

 

prorated daily, but only
to the extent that the Premises are rendered untenantable by such activity.

38.7.        As used herein, the term “Hazardous
Material” means any hazardous or toxic substance, material or waste that is
or becomes regulated by any Governmental Authority.

39.           [Intentionally
omitted]

40.           Miscellaneous.

40.1.        This Lease shall be deemed
and construed to be an “absolute net lease” and, except as herein expressly
provided, Landlord shall receive all payments required to be made by Tenant
free from all charges, assessments, impositions, expenses and deductions of any
and every kind or nature whatsoever. 
Landlord shall not be required to furnish any services or facilities or
to make any repairs, replacements or alterations of any kind in or on the
Premises except as specifically provided herein. Tenant shall receive all
invoices and bills relative to the Premises and, except as otherwise provided
herein, shall pay for all expenses directly to the person or company submitting
a bill without first having to forward payment for the expenses to Landlord.
Tenant shall at Tenant’s sole cost and expense be responsible for the
management of the Premises, shall maintain the landscaping and parking lot, and
shall make those additional repairs and alterations required of Tenant
hereunder to maintain the Premises in good order, condition and repair subject
to the conditions of the Premises as of the Term Commencement Date.

40.2.        Where applicable in this
Lease, the singular includes the plural and the masculine or neuter includes
the masculine, feminine and neuter.  The
section headings of this Lease are not a part of this Lease and shall have no
effect upon the construction or interpretation of any part hereof.

40.3.        Submission of this
instrument for examination or signature by Tenant does not constitute a
reservation of or option for a lease, and shall not be effective as a lease or
otherwise until execution by and delivery to both Landlord and Tenant.

40.4.        Time is of the essence
with respect to the performance of every provision of this Lease in which time
of performance is a factor.

40.5.        Each provision of this
Lease performable by Tenant shall be deemed both a covenant and a condition.

40.6.        Whenever consent or
approval of either party is required, that party shall not unreasonably
withhold such consent or approval, except as may be expressly set forth to the
contrary.

40.7.        The terms of this Lease
are intended by the parties as a final expression of their agreement with
respect to the terms as are included herein, and may not be contradicted by
evidence of any prior or contemporaneous agreement.

40.8.        Any provision of this
Lease that shall prove to be invalid, void or illegal shall in no way affect,
impair or invalidate any other provision hereof, and all other provisions of
this Lease shall remain in full force and effect and shall be interpreted as if
the invalid, void or illegal provision did not exist.

40.9.        Landlord may, but shall
not be obligated to, record this Lease or a short form memorandum hereof
without Tenant’s consent.  Neither party
shall record this Lease.  Tenant shall be
responsible for the cost of recording any memorandum of this Lease, including
any transfer or other taxes incurred in connection with said recordation.

40.10.      The language in all parts of
this Lease shall be in all cases construed as a whole according to its fair
meaning and not strictly for or against either Landlord or Tenant.

40.11.      Each of the covenants,
conditions and agreements herein contained shall inure to the benefit of and
shall apply to and be binding upon the parties hereto and their respective
heirs; legatees; devisees; executors; administrators; and permitted successors,
assigns, sublessees.

 23
 

 

Nothing in this Section
40.11 shall in any way alter the provisions of this Lease restriciting
assignment or subletting.

40.12.      Any notice, consent, demand,
bill, statement or other communication required or permitted to be given
hereunder shall be in writing and shall be given by personal delivery,
overnight delivery with a reputable nationwide overnight delivery service, or
certified mail (return receipt requested), and if given by personal delivery,
shall be deemed delivered upon receipt; if given by overnight delivery, shall
be deemed delivered one (1) day after deposit with a reputable nationwide
overnight delivery service; and, if given by certified mail (return receipt
requested), shall be deemed delivered two (2) days after the time the notifying
party deposits the notice with the United States Postal Service. Any notices
given pursuant to this Lease shall be addressed to Tenant at the Premises, or
to Landlord or Tenant at the addresses shown in Sections 2.10 and 2.11,
respectively. Either party may, by notice to the other given pursuant to this
Section, specify additional or different addresses for notice purposes.

40.13.      This Lease shall be governed
by, construed and enforced in accordance with the laws of the State in which
the Premises are located, without regard to such State’s conflict of law
principles.

40.14.      That individual or those
individuals signing this Lease guarantee, warrant and represent that said
individual or individuals have the power, authority and legal capacity to sign
this Lease on behalf of and to bind all entities, corporations, partnerships,
limited liability companies, joint venturers or other organizations and
entities on whose behalf said individual or individuals have signed.

40.15.      If not publicly available,
Tenant agrees that it shall promptly furnish to Landlord, from time to time,
upon Landlord’s written request, the most recent audited year-end financial
statements reflecting Tenant’s current financial condition.  Tenant represents and warrants that all
financial statements, records and information furnished by Tenant to Landlord
in connection with this Lease are true, correct and complete in all respects.

40.16.      This Lease may be executed
in one or more counterparts, each of which, when taken together, shall
constitute one and the same document.

41.           Option to Extend
Term. Tenant shall have the option (“Option”) to extend the Term of
this Lease upon the following terms and conditions:

41.1.        Tenant shall have two (2)
consecutive options to extend the Term of this Lease by five (5) years each
(each, an “Extended Term”) on the
same terms and conditions as this Lease, except that the Monthly Base Rent
payable under this Lease shall be 95% of the Fair Market Rental Value. “Fair Market Rental Value” shall mean the
fair market value of laboratory/office space of similar age and finish in the
Longmont, Colorado market taking into account all relevant factors, including
without limitation, improvement allowances or rent concessions granted in
connection with such other leases, provided, however, that in no event shall
any leasehold improvement made by Tenant following the Commencement Date ever
be considered in any valuation of the fair market value of the space.  The Basic Annual Rent of each Extended Term
shall be subject to an annual upward adjustment of two percent (2%) of the
then-current Basic Annual Rent.

41.2.        The Option is not
assignable separate and apart from this Lease.

41.3.        The Option is conditional
upon Tenant giving Landlord written notice of its election to exercise the
Option at least twelve (12) months prior to the (i) expiration of the initial
Term in the case of the first Extended Term, or (ii) expiration of the first
Extended Term in the case of the second Extended Term.  If said notice is not delivered within said
time period(s), the Option shall terminate.

41.4.        Within thirty (30) days
after receiving Tenant’s notice extending the Term of this Lease pursuant to Section
41.3 above, Landlord shall provide Tenant with Landlord’s good faith
estimate of 95% of the Fair Market Rental Value of the Premises for the
Extended Term.  If Tenant is unwilling to
accept Landlord’s estimate of the Fair Market Rental Value as set forth in
Landlord’s notice referred to above, and the parties are unable to reach
agreement thereon within thirty (30) days after the delivery of such notice by
Landlord, then either party may obtain and

 24
 

 

deliver to the other party an independent appraisal of the Fair Market
Rental Value of the Premises within ten (10) days after the expiration of such
thirty (30) day period.  Within fifteen (15)
days after receiving such party’s appraisal, the responding party may elect to
obtain at its own expense and deliver to the initiating party a second independent
appraisal of the Fair Market Rental Value of the Premises.  If the second appraiser shall not have been
so appointed within such fifteen (15) day period, the Fair Market Rental Value
of the Premises shall be determined by the initiating party’s appraisal. If the
second appraiser shall have been so appointed, the two appraisers thus
appointed shall, within fifteen (15) days after the responding party’s notice
of appointment of the second appraiser, appoint a third appraiser.  If the two initial appraisers are unable
timely to agree on the third appraiser, then either may, on behalf of both,
request such appraiser by the Denver office of JAMS Inc., or its successor, or,
on its failure, refusal or inability to act, by a court of competent
jurisdiction.  Within fifteen (15) days
after the appointment of the third appraiser, the Fair Market Rental Value of
the Premises shall be the arithmetical average of the two appraisals closest in
their determination of fair market rental value which amount shall be binding
upon the parties.  All appraisers shall
be qualified MAI appraisers who are independent from the parties and have had
at least ten (10) years commercial real estate experience in the greater Denver
area and significant experience dealing with the laboratory space
sub-market.  Each party shall pay the
fees of its own appraiser, and the fees of the third appraiser shall be shared
equally by the parties.

41.5.        Notwithstanding anything
contained in this Section 41, Tenant shall not have the right to exercise
the Option:

(a)           During
the time commencing from the date Landlord delivers to Tenant a written notice
that Tenant is in default under any provisions of this Lease and continuing
until Tenant has cured the specified default to Landlord’s reasonable satisfaction;
or

(b)           At
any time after an event of Default as described in Section 23.4 of the
Lease (provided, however, that, for purposes of this Subsection 41.5(b),
Landlord shall not be required to provide Tenant with notice of such Default)
and continuing until Tenant cures any such Default, if such Default is
susceptible to being cured; or

(c)           In
the event that Tenant has defaulted in the performance of its obligations under
this Lease three (3) or more times and a service or late charge has become
payable under Section 23.1 for each of such defaults during the twelve
(12)-month period immediately prior to the date that Tenant intends to exercise
the Option, whether or not Tenant has cured such defaults.

41.6.        The period of time within
which Tenant may exercise the Option shall not be extended or enlarged by
reason of Tenant’s inability to exercise the Option because of the provisions
of Section 41.4.

41.7.        All of Tenant’s rights
under the provisions of the Option shall terminate and be of no further force or
effect even after Tenant’s due and timely exercise of an Option if, after such
exercise, but prior to the commencement date of the new term, (a) Tenant fails
to pay to Landlord a monetary obligation of Tenant for a period of twenty (20)
days after written notice from Landlord to Tenant, (b) Tenant fails to commence
to cure a default (other than a monetary default) within thirty (30) days after
the date Landlord gives notice to Tenant of such default or (c) Tenant has
defaulted under this Lease three (3) or more times and a service or late charge
under Section 23.1 has become payable for any such default during the
immediately preceding 24-month period, whether or not Tenant has cured such
defaults.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT
BLANK]

 25
 

 

IN WITNESS
WHEREOF, the parties hereto have executed this Lease as of the date first above
written.

	
  LANDLORD:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  BMR-Trade Centre Avenue LLC,

  a Delaware limited liability company

  	
   

  
	
   

  	
   

  
	
  By:

  	
  BioMed Realty, L.P.,

  a Maryland limited partnership,

  its Member

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  TENANT:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Array BioPharm Inc.,

  a Delaware corporation

  	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
  Mike Carruthers

  	
   

  	
   

  
	
  Title:

  	
    CFO  

  	
   

  	
   

  
					

 

 26

 

EXHIBIT A

PREMISES

Lots 1 and 2, St. Vrain Centre Parcel F-Minor Subdivision
“C”, the Plat of which was recorded August 21, 1997 Reception No. 1724602 in
Plan File P-40, F-3, No. 49, County of Boulder, State of Colorado.

 1

 

EXHIBIT B

ACKNOWLEDGEMENT OF TERM COMMENCEMENT DATE

AND TERM EXPIRATION DATE 

THIS
ACKNOWLEDGEMENT OF TERM COMMENCEMENT DATE AND TERM EXPIRATION DATE is entered
into as of [       ], 2006, with reference
to that certain Lease (the “Lease”) dated as of [       ],
2006 by Array BioPharma Inc., a Delaware corporation (“Tenant”), in
favor of BMR-Trade Centre Avenue LLC, a Delaware limited liability company (“Landlord”).
All capitalized terms used herein without definition shall have the meanings
ascribed to them in the Lease.

Tenant
hereby confirms the following:

1.                                       Tenant accepted possession of the Premises as-is on [       ],
20[  ].

2.                                       The Premises are in good order, condition and repair except
as described on Exhibit    of the Lease.

3.                                       The Tenant Improvements required to be constructed by
Landlord under the Lease have been substantially completed.

4.                                       All conditions of the Lease to be performed by Landlord as a
condition to the full effectiveness of the Lease have been satisfied, and
Landlord has fulfilled all of its duties in the nature of inducements offered
to Tenant to lease the Premises.

5.                                       The Term Commencement Date is [       ],
2006, and, unless the Lease is terminated prior to the Term Expiration Date
pursuant to its terms, the Lease Expiration Date shall be [       ],
2016.

6.                                       Tenant commenced occupancy of the Premises under this Lease
for the Permitted Use on [       ], 20[  ].

7.                                       The Lease is in full force and effect, and the same
represents the entire agreement between Landlord and Tenant concerning the
Premises[, except [       ]].

8.                                       Tenant has no existing defenses against the enforcement of
the Lease by Landlord, and there exist no offsets or credits against Rent owed
or to be owed by Tenant.

9.                                       The obligation to pay Rent is presently in effect and all
Rent obligations on the part of Tenant under the Lease commenced to accrue on [       ],
20[  ].

10.                                 The undersigned Tenant has not made any prior assignment,
transfer, hypothecation or pledge of the Lease or of the rents thereunder or
sublease of the Premises or any portion thereof.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT
BLANK]

 1
 

 

IN WITNESS
WHEREOF, the parties hereto have executed this Acknowledgment of Term
Commencement Date and Term Expiration Date as of
[            ],
2016.

	
  TENANT:

  
	
   

  
	
  ARRAY BIOPHARMA
  INC,

  
	
  a Delaware
  corporation

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  

 

 2

 

EXHIBIT C

TENANT’S PERSONAL PROPERTY 

Tenant’s
Personal Property includes all non-attached furniture, fixtures and
equipment.  In addition, for purposes of
this Lease, “Tenant Personal Property” shall also include attached trade
fixtures, equipment and improvements installed by Tenant prior to the Effective
Date (the “Additional Tenant Property”). The Additional Tenant Property shall
be transferred to and owned by Landlord at the end of the Lease Term.

 

EXHIBIT D

RULES AND REGULATIONS 

NOTHING
IN THESE RULES AND REGULATIONS (“RULES AND REGULATIONS”) SHALL SUPPLANT
ANY PROVISION OF THE LEASE. IN THE EVENT OF A CONFLICT OR INCONSISTENCY BETWEEN
THESE RULES AND REGULATIONS AND THE LEASE, THE LEASE SHALL PREVAIL.

1.                                       Except as specifically provided in the Lease to which these
Rules and Regulations are attached, no sign, placard, picture, advertisement,
name or notice shall be installed or displayed on any part of the outside of
the Premises or the Building without Landlord’s prior written consent. Landlord
shall have the right to remove, at Tenant’s sole cost and expense and without
notice, any sign installed or displayed in violation of this rule.

2.                                       Tenant shall not obstruct any sidewalks or entrances to the
Building, or any halls, passages, exits, entrances or stairways within the
Premises, in any case that are required to be kept clear for health and safety
reasons.

3.                                       No deliveries shall be made that impede or interfere with
operation of the Premises.

4.                                       Tenant shall not place a load upon any floor of the Premises
that exceeds the load per square foot that (a) such floor was designed to carry
or (b) that is allowed by Applicable Laws.

5.                                       Tenant shall not install any radio, television or other
antenna, cell or other communications equipment, or any other devices on the
roof or exterior walls of the Premises except to the extent shown on approved
Tenant Improvements plans.  Tenant shall
not interfere with radio, television or other communications from or in the
Premises or elsewhere.

6.                                       Canvassing, peddling, soliciting and distributing handbills
or any other written material within, on or around the Premises are prohibited,
and Tenant shall cooperate to prevent such activities.

7.                                       Tenant shall store all of its trash, garbage and Hazardous
Materials within its Premises or in designated receptacles outside of the
Premises.  Tenant shall not place in any
such receptacle any material that cannot be disposed of in the ordinary and
customary manner of trash, garbage and Hazardous Materials disposal.

8.                                       The Premises shall not be used for any improper or illegal
purpose.

9.                                       Tenant shall not, without Landlord’s prior written consent,
use the name of the Premises, if any, in connection with or in promoting or
advertising Tenant’s business except as Tenant’s address.

10.                                 Tenant shall comply with all safety, fire protection and
evacuation procedures and regulations established by Landlord or any
Governmental Authority.

11.                                 Tenant assumes any and all responsibility for protecting the
Premises from theft, robbery and pilferage, which responsibility includes
keeping doors locked and other means of entry to the Premises closed.

12.                                 Landlord may waive any one or more of these Rules and
Regulations for the benefit of Tenant, but no such waiver by Landlord shall
prevent Landlord from thereafter enforcing any such Rules and Regulations
against Tenant.

13.                                 These Rules and Regulations are in addition to, and shall not
be construed to in any way modify or amend, in whole or in part, the terms
covenants, agreements and conditions of the Lease.

14.                                 Landlord reserves the right to make such other and reasonable
rules and regulations as, in its judgment, may from time to time be needed for
safety and security, the care and cleanliness of the Premises, or the
preservation of good order therein; provided, however, that
Landlord shall provide written notice to Tenant of such rules and regulations
prior to them taking effect and these Rules and Regulations shall not
materially interfere with Tenant’s use and quiet enjoyment

 

of the Premises.  Tenant agrees to abide by these Rules and
Regulations and any additional rules and regulations issued or adopted by
Landlord.

15.                                 Tenant shall be responsible for the observance of these Rules
and Regulations by Tenant’s employees, agents, clients, customers, invitees and
guests.

 

EXHIBIT E

FORM OF ESTOPPEL CERTIFICATE 

To:
                           BMR-Trade
Centre Avenue LLC

17140 Bernardo Center Drive, Suite 222

San Diego, CA 92128

Attention: General Counsel

BioMed Realty, L.P. 

c/o BioMed Realty Trust, Inc. 

17140 Bernardo Center Drive, Suite 222 

San Diego, CA 92128

Re:                               2600-2620 Trade
Centre Avenue (the “Premises”) at 2600-2620 Trade Centre Avenue,
Longmont, Colorado (the “Property”)

The
undersigned tenant (“Tenant”) hereby certifies to you as follows:

1.                                       Tenant is a tenant at the Property under a lease (the “Lease”)
for the Premises dated as of [       ], 20[  ].
The Lease has not been cancelled, modified, assigned, extended or amended
[except as follows: [       ]], and there
are no other agreements, written or oral, affecting or relating to Tenant’s
lease of the Premises or any other space at the Property.  The lease term expires on [       ],
20[  ].

2.                                       Tenant took possession of the Premises, currently consisting
of [       ] square feet, on [       ],
20[  ], and commenced to pay rent on [       ],
20[  ].  Tenant has full
possession of the Premises, has not assigned the Lease or sublet any part of
the Premises, and does not hold the Premises under an assignment or sublease[,
except as follows:  [       ]].

3.                                       All base rent, rent escalations and additional rent under the
Lease have been paid through [       ], 20[  ].
There is no prepaid rent[, except $[       ]][,
and the amount of security deposit is $[       ]
[in cash][in the form of a letter of credit]]. 
Tenant currently has no right to any future rent abatement under the
Lease.

4.                                       Base rent is currently payable in the amount of $[       ]
per month.

5.                                       Tenant is currently paying estimated payments of additional
rent of $[       ] per month on account of
real estate taxes, insurance, management fees and common area maintenance
expenses.

6.                                       All work to be performed for Tenant under the Lease has been
performed as required under the Lease and has been accepted by Tenant[, except
[       ]], and all allowances to be paid to
Tenant, including allowances for tenant improvements, moving expenses or other
items, have been paid.

7.                                       The Lease is in full force and effect, free from default and
free from any event that could become a default under the Lease, and Tenant has
no claims against the landlord or offsets or defenses against rent, and there
are no disputes with the landlord. Tenant has received no notice of prior sale,
transfer, assignment, hypothecation or pledge of the Lease or of the rents
payable thereunder[, except [       ]].

8.                                       [Tenant has the following expansion rights or options for the
Property: [       ].][Tenant has no rights
or options to purchase the Property.]

9.                                       To Tenant’s knowledge, no hazardous wastes have been
generated, treated, stored or disposed of by or on behalf of the Tenant in, on
or around the Premises in violation of any environmental laws.

10.                                 The undersigned has executed this Estoppel Certificate with
the knowledge and understanding that BMR-Trade Centre Avenue LLC or its
assignee is acquiring the Property in reliance on this certificate and that the
undersigned shall be bound by this certificate. 
The statements contained herein may be relied upon by BMR-Trade Centre
Avenue LLC, BioMed

 

Realty, L.P., BioMed
Realty Trust, Inc., and any mortgagee of the Property and their respective
successors and assigns.

Any capitalized terms not
defined herein shall have the respective meanings given in the Lease.

Dated this [    ] day of [       ],
20[  ].

[       ],

a [       ]

	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  

 

 

EXHIBIT F

NONFUNCTIONAL
EQUIPMENT

NONE.

 F-1Exhibit
10.3

AGREEMENT
OF PURCHASE AND SALE

(2600 and 2620 Trade Centre
Avenue, Longmont, Colorado)

This Agreement of
Purchase and Sale (“Agreement”) is made as of the 9th day of
August, 2006 (“Effective Date”) between Circle Capital Longmont LLC, a Delaware limited liability
company (“Seller”), and Array
BioPharma Inc., a Delaware corporation (“Purchaser”).

Seller’s predecessor in
interest and Purchaser entered into a written lease agreement, dated February
28, 2000, as amended by Addendum to Lease Agreement #1 dated May 24, 2001,
Addendum to Lease Agreement #2, dated February 11, 2002, Addendum to Lease
Agreement dated November 30, 2004, Addendum #4 to Lease Agreement dated August
1, 2005 (“Addendum #4 to 2620 Lease”),
Addendum #5 to Lease Agreement dated as of November 30, 2005, Addendum #6 to
Lease Agreement dated December 22, 2005, Addendum #7 to Lease Agreement dated
February 28, 2006, and Addendum #8 to Lease Agreement dated as of March 1, 2006
(collectively, the “2620  Lease”), pertaining to an approximately
43,200 square foot building located at 2620 Trade Centre Avenue, Longmont,
Colorado (“2620 Building”).

Seller’s predecessor in
interest and Purchaser entered into a written lease agreement, dated February
11, 2002, as amended by Addendum #1 to Lease Agreement dated November 30, 2004,
and Addendum to Lease Agreement #2, dated August 4, 2005 (collectively, the “2600  Lease”),
pertaining to an approximately 28,800 square foot building located at 2600
Trade Centre Avenue, Longmont, Colorado (“2600
Building”).

The 2620 Lease and the 2600 Lease shall be
collectively referred to hereinafter as the “Leases”.

The 2620 Building and the 2600 Building shall be
collectively referred to hereinafter as the “Buildings”.

Under Addendum #4 to 2620 Lease, Purchaser was granted
an option, under certain terms, to purchase the Buildings (the “Purchase Option”).

Purchaser has notified
Seller of its desire to purchase the Buildings from Seller.  Subject to the terms and conditions of this
Agreement, Seller will sell to Purchaser, and Purchaser will purchase from
Seller, the Property (as defined below), including the Buildings.

ARTICLE 1.                             PROPERTY/PURCHASE
PRICE

1.1.                              Property.  Subject to the terms and conditions of this
Agreement, Seller agrees to sell to Purchaser, and Purchaser agrees to purchase
from Seller, the following property (collectively, the “Property”):

(a)                                  The
“Real Property,” being the land
described in Exhibit A attached
hereto, the Building, all improvements and fixtures (other than fixtures owned
by Purchaser pursuant to the Leases) located thereon (the “Improvements”); all and singular the rights, benefits, privileges, easements,
tenements, hereditaments, and appurtenances thereon or in

 

anyway appertaining to such real property; and all
right, title, and interest of Seller in and to all strips and gores and any
land lying in the bed of any street, road or alley, open or proposed, adjoining
such real property; and

(b)                               The “Intangible Property,” being all, right,
title and interest of Seller, if any, in and to all intangible personal
property now or hereafter used exclusively in connection with the operation,
ownership, maintenance, management, or occupancy of the Real Property (to the
extent assignable); the plans and specifications for the Improvements (to the extent
assignable); warranties, indemnities, applications, permits, approvals and
licenses (to the extent applicable in any way to the above referenced Real
Property and assignable).

1.2.                              Purchase
Price.  The total purchase price to
be paid to Seller by Purchaser for the Property shall be Six Million Seven Hundred Eighty-Six Thousand Dollars
($6,786,000)(the “Purchase Price”). 
The Purchase Price, as adjusted for prorations, deposits and other
adjustments as provided herein, shall be paid to Escrow Agent by wire transfer
of immediately available funds or in cash.

1.3.                              Title
Company and Escrow Agent.  The “Escrow Agent” and “Title Company” is: 
LandAmerica Commercial Services, 750 B. Street, Suite 3000, San Diego
California 92101, Attn:  Katherine I.
Leicht (Tel#: (619) 230-6346; Fax#: (619) 233-0369).

1.4.                              Closing
Date.  The “Closing Date” shall mean 12:00 noon (MDT)
on August 9, 2006.

ARTICLE 2.                             INSPECTION

2.1.                              Access.  Upon reasonable prior notice to Seller,
Purchaser and its agents, employees, consultants, lenders and representatives
shall have reasonable access to the Property and all books and records for the
Property that are located at the property manager’s offices located at:  1375 Ken Pratt Boulevard, Suite C, Longmont,
CO 80501 (“Manager’s Office”), for
the purpose of conducting surveys, appraisals, architectural, engineering,
structural, mechanical, geotechnical and environmental inspections and tests,
and any other inspections, studies, or tests reasonably required by Purchaser;
provided, however, Purchaser may not conduct any invasive testing without
Seller’s prior consent (which consent shall be at Seller’s sole
discretion).  If any inspection or test
disturbs the Property in a material respect, Purchaser will restore the
Property to its condition before any such inspection or test.  During the pendency of this Agreement,
Purchaser and its agents, employees, consultants, lenders and representatives
shall have a continuing right of reasonable access to the Property and the
Manager’s Office, with reasonable prior notice, for the purpose of examining
and making copies of all books and records and other materials relating to the
Property.  In the course of its
investigations, Purchaser may make reasonable inquiries to third parties,
including, without limitation, representatives, contractors, property managers
and municipal, local and other government officials and representatives in
accordance with the terms of this Agreement, and Seller consents to such
inquiries.  Purchaser hereby indemnifies,
protects, defends (with counsel reasonably acceptable to Seller) and holds
Seller and the Property free and harmless from and against any and all costs,
losses, liabilities, damages, lawsuits, judgments, actions, proceedings,
penalties, demands, attorneys’ fees, mechanic’s liens, or expenses of any kind
or nature whatsoever (“Claims”), to the extent caused

 2
 

 

by any entry and/or activities upon the Property by
Purchaser, Purchaser’s agents, contractors and/or subcontractors; provided,
however, Purchaser shall not indemnify Seller against any Claims caused by
Seller’s gross negligence or willful misconduct.

2.2                               Service
Contracts; Property Management and Leasing Agreements; Property Employees.  Seller shall terminate at Closing, and
Purchaser shall not assume, any property management or third party leasing
agreements affecting the Property. 
Seller and Purchaser hereby agree and acknowledge that Seller currently
has contracts with the following service providers at the Property:  (i) SureLockPlus (Fire Alarm Monitoring);
(ii) MaiCon (Parking Lot Lighting); (iii) Window King (Window washing); (iv)
Longmont Sweeping (Parking lot sweeping); and (v) CoCal Landscape (Grounds
Maintenance) (collectively, the “Service Contracts”).  Seller shall amend or terminate the Service
Contracts such that the Service contracts do not affect the Property on August
31, 2006.  Until such time as the Service
Contracts are appropriately amended or terminated, Seller shall arrange to have
the service providers maintain the Property in accordance with the terms of the
Service Contracts and, upon request of Purchaser, enforce the Service Contracts
for the benefit of Purchaser with respect to the Property.  Seller shall have no liability for any acts
or omission of the service providers under the Service Contracts.  Seller hereby acknowledges that Purchaser
paid for its proportionate share of the amounts due under the Service Contracts
through August 31, 2006, along with Purchaser’s August rent payments under the
Leases. All amounts paid by Purchaser to Seller under the Leases and allocated
to the Service Contracts shall be final and shall not be pro-rated at
Closing.  The provisions of this
Paragraph 2.2 shall survive Closing.

ARTICLE 3.                             TITLE
AND SURVEY REVIEW

3.1.                              Delivery
of Preliminary Title Report and Survey. 
Seller shall cause to be delivered to Purchaser on or prior to the date
that is five (5) days after the Effective Date, any existing survey of the
Property in Seller’s possession or control (the “Survey”).  Purchaser may
update the Survey, at Purchaser’s sole discretion.  Purchaser has obtained a commitment to insure
title to the Property (the “Title Commitment”) issued by the Title Company
together with copies of the items listed on Scheduled B-2 (the “Exception Documents”).  The Title Commitment,
Exception Documents, and the Survey are referred to herein collectively as the “Title Documents.”

3.2.                              Title
Review and Cure.  Prior to the
Closing Date, Purchaser shall review title to the Property as disclosed by the
Title Documents.

3.3.                              Permitted
Exceptions.  “Permitted Exceptions” means the following exceptions approved or deemed approved by
Purchaser pursuant to this Agreement: 
(i) real property taxes and assessments for the calendar year of the
Closing (as defined below) and subsequent years; (ii) any taxes, assessments,
fees or charges by reason of the inclusion of the Property in any statutory
district of record; (iii) covenants, as amended and supplemented, of record;
(iv) utility, landscape and drainage easements of record; (v) any covenants
contained in the applicable subdivision plat; (vi) applicable zoning and
building code laws and regulations; (vii) liens and encumbrances created by,
through or under Purchaser; (viii) all matters disclosed by the Survey

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or would be disclosed by an update thereto; and (ix)
the Leases, unless otherwise terminated pursuant to the terms contained herein.

ARTICLE 4.                             OPERATIONS

4.1.                              Ongoing
Operations.  During the pendency of
this Agreement:

(a)                                Preservation
of Business.  Seller shall cause the
Property to be operated in a manner consistent with the terms and conditions of
the Leases.

(b)                               Maintenance
of Insurance.  Seller shall continue
to carry its existing insurance as required by the Leases through the Closing
Date.

(c)                                New
Contracts.  Without Purchaser’s prior
written consent in each instance, Seller will not enter into or amend,
terminate, waive any default under, or grant concessions regarding any contract
or agreement that will be an obligation affecting the Property or binding on
Purchaser after the Closing.

(d)                               Leasing
Arrangements.  Seller will not enter
into any new lease or other occupancy agreement affecting the Improvements
without Purchaser’s prior written consent in each instance.

(e)                                Maintenance
of Permits.  Seller shall maintain in
existence all licenses, permits and approvals, if any, in accordance with past
business practices.

ARTICLE 5.                             CONDITIONS
PRECEDENT

5.1.                              Conditions
to Seller’s Obligation to Close.  In
addition to all other conditions set forth herein, the obligation of Seller to
consummate the transactions contemplated hereunder shall be contingent upon the
following:

(a)                                Representations.  Purchaser’s representations and warranties
contained herein shall be true and correct as of the date of this Agreement and
the Closing Date;

(b)                               Performance.  As of the Closing Date, Purchaser shall have
performed its obligations hereunder and all deliveries to be made by Purchaser
at Closing have been tendered;

(c)                                Other
Condition.  Any other condition set
forth in this Agreement to Seller’s obligation to close shall have been
satisfied by the applicable date; and

(d)                               Leases.  There shall have been no material Events of
Default by Purchaser under the Leases, which have not been remedied by
Purchaser as of the Closing Date.

5.2.                              Conditions
to Purchaser’s Obligation to Close. 
In addition to all other conditions set forth herein, the obligation of
Purchaser to consummate the transactions contemplated hereunder shall be
contingent upon the following:

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

(b)                               Deliveries.  All deliveries to be made by Seller at
Closing have been tendered;

(c)                                Bankruptcy.  No proceeding has been commenced against
Seller under the federal Bankruptcy Code or any state law for relief of
debtors; and

(d)                               Title.  At Closing, the Title Company shall
irrevocably commit to issue to Purchaser an ALTA Owner’s Policy of title
insurance, dated as of the date and time of the recording of the Deed (as
defined below), vesting title in Purchaser, in the amount of the Purchase Price
(the “Title Policy”).

5.3                               Termination
of Leases/Expansion Option. 
Effective as of Closing, the Leases, including any “Expansion Option”
thereunder (as defined in Addendum #4 of the 2620 Lease), shall terminate and
the parties shall execute a termination of the Leases in a form reasonably
acceptable to Seller and Purchaser. 
Purchaser and Seller agree that neither party shall have any obligation
under, or take any further action with respect to, the Expansion Option from
the Effective Date of this Agreement until the Closing Date and that all
applicable time periods for giving notice under Section 10 of Addendum #4 of
the 2620 Lease shall be tolled from the Effective Date until the Closing Date.

ARTICLE 6.                             DEFAULT
AND REMEDIES

6.1.                              Purchaser’s
Defaults; Seller’s Remedies.  In the
event of a material breach by Purchaser of its obligations under this
Agreement, Seller shall have the right of specific performance and additional
actual damages.

6.2.                              Seller’s
Defaults; Purchaser’s Remedies.  In
the event of a material breach by Seller of its obligations under this
Agreement, Purchaser shall have the right of specific performance and
additional actual damages.

ARTICLE 7.                             CLOSING

7.1.                              Closing
and Escrow.  The consummation of the
transaction contemplated herein (“Closing”) shall occur on the Closing Date at
the offices of the Escrow Agent.  Closing
shall occur through an escrow with the Escrow Agent.  Funds shall be deposited into and held by
Escrow Agent in a closing escrow account with a bank satisfactory to Purchaser
and Seller.  Upon satisfaction or
completion of all closing conditions and deliveries, Escrow Agent shall record
and deliver the Deed (as defined below) and deliver the closing document s to
the appropriate parties and make disbursements according to the closing
statements executed by Seller and Purchaser. 
Provided such supplemental escrow instructions are not in conflict with
this Agreement as it may be amended in writing from time to time, Seller and
Purchaser agree to execute such supplemental escrow instructions as may be
appropriate to enable Escrow Agent to comply with the terms of this
Agreement.  The parties understand that
the Closing shall occur in

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Longmont, Colorado and that all necessary deliveries
to escrow must be completed by 11:00 A.M. on the Closing Date.

7.2.                              Seller’s
Deliveries in Escrow.  On or before
11:00 A.M. on the Closing Date, Seller shall deliver in escrow to the Escrow
Agent the following:

(a)                                Deed.  That certain special warranty deed (“Deed”) in the form attached as Exhibit C hereto sufficient to vest title
in Purchaser, subject only to the Permitted Exceptions;

(b)                               Bill
of Sale.  A Bill of Sale (“Bill of Sale”) executed and acknowledged by
Seller in the form attached as Exhibit D
hereto;

(c)                                State
Law Disclosures.  Such disclosures
and reports as are required by applicable state and local law in connection
with the conveyance of real property;

(d)                               FIRPTA.  A Foreign Investment in Real Property Tax Act
affidavit executed by Seller;

(e)                                Authority.  Evidence of the existence, organization and
authority of Seller and of the authority of the persons executing documents on
behalf of Seller required by and reasonably satisfactory to the Title Company;

(f)                                  Owner’s
Affidavit.  An Owner’s Affidavit, if
required, in the form attached as Exhibit E
hereto; and

(g)                               Other
Deliveries.  Any other Closing
deliveries required to be made by or on behalf of Seller hereunder or reasonably
required by the Title Company to effect the Closing of this transaction
consistent with this Agreement.

7.3.                              Purchaser’s
Deliveries in Escrow.  On or before
9:00 a.m. on the Closing Date, Purchaser shall deliver in escrow to the Escrow
Agent the following:

(a)                                Purchase
Price.  The Purchase Price, plus or
minus applicable prorations, deposited by Purchaser with the Escrow Agent in
immediate, same-day federal funds wired for credit into the Escrow Agent’s
escrow account;

(b)                               Bill
of Sale.  Counterpart of the Bill of
Sale, executed by Purchaser;

(c)                                State
Law Disclosures.  Such disclosures
and reports as are required by applicable state and local law in connection
with the conveyance of real property; and

(d)                               Other
Deliveries.  Any other Closing
deliveries required to be made by or on behalf of Purchaser hereunder or
reasonably required to effect the Closing of this transaction consistent with
this Agreement.

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7.4.                              Closing
Statements/Closing Costs.

(a)                                Seller
and Purchaser shall deposit with the Escrow Agent executed closing statements
consistent with this Agreement in the form required by the Escrow Agent.

(b)                               Seller
and Purchaser shall execute such returns, questionnaires and other documents as
shall be required with regard to all applicable real property transaction taxes
imposed by applicable federal, state or local law or ordinance.

(c)                                Seller
shall pay the fees of any counsel representing Seller in connection with this
transaction.  Seller shall also pay the
following costs and expenses:

(i)                                   one-half
of the closing and escrow fees, if any, which may be charged by the Escrow
Agent or the Title Company;

(ii)                                  one-half
of the owner’s title insurance premium for the Title Policy, excluding any
endorsements Purchaser wishes to purchase from Title Company;

(iii)                               one-half
of the cost of an updated Survey;

(iv)                              one-half
of all of the recording fees; and

(v)                               a
brokerage commission due to CRESA Partners in an amount equal to Eighty-One
Thousand Four Hundred Thirty-Two Dollars ($81,432)(“Broker’s Commission”), which represents 3% of the applicable
purchase price of the 2600 Building.  The
parties, including CRESA Partners, acknowledge and represent that CRESA
Partners is acting as Purchaser’s broker in this transaction and Seller owes
only the Broker’s Commission as set forth above, and no other amount are due
and owing to CRESA Partners by Seller or its predecessors under the Leases or
as a result of the transaction under this Agreement.  Seller and Purchaser represent and warrant
each to the other that they have not dealt with any real estate broker, sales
person or finder, other than CRESA Partners, in connection with this
transaction.  Other than the payment
provided to CRESA Partners as provided in this Section 7.4(c)(v), each shall
indemnify and hold harmless the other party from and against any claim for
broker’s or finder’s fees or commissions arising under such party in connection
with the negotiation, execution or consummation of this Agreement or the
transactions contemplated hereby.

(d)                               Purchaser
shall pay the fees of any counsel representing Purchaser in connection with
this transaction.  Purchaser shall also
pay the following costs and expenses:

(i)                                   one-half
of the closing and escrow fees, if any, which may be charged by the Escrow
Agent or the Title Company; and

(ii)                                  one-half
of the owner’s title insurance premium for the Title Policy and all fees
charged for any endorsements the Purchaser wishes to purchase from the Title
Company;

(iii)                               one-half
of the cost of an updated Survey; and

 7
 

 

(iv)                              one-half
of the recording fees.

7.5.                              Possession.  At the time of Closing, Seller shall deliver
to Purchaser possession of the Property, subject only to the Permitted
Exceptions.

ARTICLE 8.                             PRORATIONS
AND ADJUSTMENTS

8.1.                              Prorations.  The items in Subsections (a) through (c) of
this Section 8.1 shall be prorated between Seller and Purchaser, based
on the actual number of days in the applicable period, as of the close of the
day immediately preceding the Closing Date, the Closing Date being a day of
income and expense to Purchaser:

(a)                                Income.  Seller shall have a right to receive the base
rent under the Leases, together with all amounts of additional rent
attributable to the period prior to the Closing Date.  Purchaser shall receive a credit for any base
rent or additional rent, under the Leases collected by Seller before Closing
that applies to any period after Closing Date.

(b)                               Taxes.  Purchaser shall be solely responsible for all
property taxes due at Closing and thereafter.

(c)                                Other
Expenses.  Seller or Purchaser, as
the case may be, shall receive a credit for all other charges, including,
without limitation, insurance, maintenance and other operating costs and
expenses, paid and applicable to Purchaser’s period of ownership or payable and
applicable to Seller’s period of ownership, respectively.

(d)                               Tenant
Improvements and Leasing Commissions. 
At Closing, Purchaser will pay Seller, in addition to the Purchase
Price, an additional amount equal to the unamortized component of any tenant
improvements or lease commission costs incurred by Seller for leasing the
Property to Purchaser.  Seller and
Purchaser acknowledge and agree that, provided that the Closing occurs on
August 9, 2006, the amount owed to Seller under this Section 8.1(d) shall be
Two Hundred Thirteen Thousand Seven Hundred Seventy-Three and 20/100 Dollars
($213,773.20).

(e)                                Broker’s
Credit to Purchaser.  At Closing,
Purchaser shall receive a credit in an amount equal to One Hundred Twenty-Two
Thousand One Hundred Forty-Eight Dollars ($122,148), which represents 3% of the
applicable purchase price of the 2620 Building. 
This credit representing the co-operative broker’s commission that
Seller would have otherwise paid to Purchaser’s broker in connection with the
2620 Building.  In accordance with § 7.4(c)(v)
Purchaser represents that Seller is not obligated to pay any such broker’s
commissions.

ARTICLE 9.                             REPRESENTATIONS
AND WARRANTIES

9.1.                              Seller’s
Representations and Warranties.  As a
material inducement to Purchaser to execute this Agreement and consummate this
transaction, Seller represents and warrants to Purchaser that:

 8
 

 

(a)                                Organization
and Authority.  Seller has been duly
organized, is validly existing, and is in good standing as a Delaware limited
liability company.  Seller is in good
standing and is qualified to do business in the state in which the Real
Property is located.  Seller has the full
right and authority and has obtained any and all consents required to enter
into this Agreement and to consummate or cause to be consummated the transactions
contemplated hereby.  This Agreement has
been, and all of the documents to be delivered by Seller at the Closing will
be, authorized and properly executed and constitute, or will constitute, as
appropriate, the valid and binding obligations of Seller, enforceable in
accordance with their terms.

9.2.                              Purchaser’s
Representations and Warranties.  As a
material inducement to Seller to execute this Agreement and consummate this
transaction, Purchaser represents and warrants to Seller that:

(a)                                Organization
and Authority.  Purchaser has been
duly organized and is validly existing as a Delaware corporation, in good
standing and will be qualified to do business in the state in which the Real
Property is located on the Closing Date. 
Purchaser has the full right and authority and has obtained any and all
consents required to enter into this Agreement and to consummate or cause to be
consummated the transactions contemplated hereby.  This Agreement has been, and all of the
documents to be delivered by Purchaser at the Closing will be, authorized and
properly executed and constitutes, or will constitute, as appropriate, the
valid and binding obligation of Purchaser, enforceable in accordance with their
terms.

(b)                               Conflicts
and Pending Action.  There is no
agreement to which Purchaser is a party or to Purchaser’s knowledge binding on
Purchaser which is in conflict with this Agreement.  There is no action or proceeding pending or,
to Purchaser’s knowledge, threatened against Purchaser which challenges or
impairs Purchaser’s ability to execute or perform its obligations under this
Agreement.

(c)                                “As-Is”
Purchase.  Except for the warranties
of title set forth in the Deed, the sale of the Property to Purchaser shall be
on an “AS IS” basis, it
being understood that Purchaser will have had an opportunity to investigate the
Property and all matters relevant to its acquisition, development, usage,
operation or marketability, including (without limitation) environmental
assessments of the Property, at Purchaser’s sole expense, including but not
limited to, the collection and analysis of soils, surface water and groundwater
samples.  At Closing, Purchaser, as
purchaser for itself and on behalf of its officers, directors, shareholders, employees,
heirs, successors, assigns, parents, subsidiaries, affiliates and agents
representatives (hereinafter referred to as “Releasing
Parties”) unconditionally releases Seller, its officers, directors,
shareholders, employees, heirs successors, assigns, parents, subsidiaries,
affiliates, agents and representatives from and against any and all liability
to the Releasing Parties, both known and unknown, past, present and future, for
any damages, costs, expenses or other liability to the Releasing Parties
arising out of any violation of environmental requirements, environmental laws
or governmental regulations, or the presence of regulated substances, hazardous
materials or hazardous substances on, under, about or migrating to or from the
Property, whether occurring before, during or after Purchaser’s acquisition of
the Property (the “Condition of the Property”).  This release shall survive the Closing and
remain in effect indefinitely. 
Purchaser, as purchaser,

 9
 

 

shall indemnify, defend with counsel reasonably
acceptable to Seller and hold Seller harmless from any and all claims of any
kind or nature (including, without limitation, diminution in value), demands,
liabilities, liens, losses, damages, costs and expenses (including, without
limitation, fines, forfeitures, attorneys’ fees, disbursements and court and/or
administrative costs) asserted against Seller or the Property arising out of or
resulting from the Condition of the Property.

ARTICLE 10.                                                                      MISCELLANEOUS

10.1.                        Parties
Bound.  Neither party may assign this
Agreement without the prior written consent of the other, and any such
prohibited assignment shall be void; provided, however, that Purchaser may
assign this Agreement without Seller’s consent, upon prior notice to Seller
given prior to Closing, to BioMed Realty, L.P. (“BioMed”) or an Affiliate of BioMed (including without
limitation BioMed Realty Trust, Inc. or BMR-Trade Centre Avenue LLC).  Subject to the foregoing, this Agreement
shall be binding upon and inure to the benefit of the respective legal
representatives, successors, assigns, heirs, and devisees of the parties.  For the purposes of this paragraph, the term “Affiliate” means (i) an entity that directly or indirectly controls, is
controlled by or is under common control with BioMed, or (ii) a partnership or
other entity in which BioMed or an entity described in (i) is a partner or
other owner; and the term “control” means the power to direct the management of
such entity through voting rights, ownership or contractual obligations.  Notwithstanding the foregoing, Purchaser
shall not be released from its obligations hereunder upon an assignment to
BioMed, an Affiliate of BioMed, or any other approved assignment.

10.2.                        Headings.  The article and paragraph headings of this
Agreement are for convenience only and in no way limit or enlarge the scope or
meaning of the language hereof.

10.3.                        Expenses.  Except as otherwise expressly provided
herein, each party hereto shall pay its own expenses incident to this Agreement
and the transactions contemplated hereunder, including all legal and accounting
fees and disbursements.

10.4.                        Invalidity
and Waiver.  If any portion of this
Agreement is held invalid or inoperative, then so far as is reasonable and
possible the remainder of this Agreement shall be deemed valid and operative,
and, to the greatest extent legally possible, effect shall be given to the
intent manifested by the portion held invalid or inoperative.  The failure by either party to enforce
against the other any term or provision of this Agreement shall not be deemed
to be a waiver of such party’s right to enforce against the other party the
same or any other such term or provision in the future.

10.5.                        Governing
Law.  This Agreement shall, in all
respects, be governed, construed, applied, and enforced in accordance with the
law of the state in which the Real Property is located.

10.6.                        Survival.  The provisions of this Agreement and the
obligations of the parties not fully performed at the Closing shall survive the
Closing for one year and shall not be deemed to be merged into or waived by the
instruments of Closing.  Any claim for
performance of an

 10
 

 

obligation after Closing shall be barred and shall
lapse unless a claim is made in writing, with a description of the claim made,
on or before six months from the Closing Date.

10.7.                        No
Third Party Beneficiary.  This
Agreement is not intended to give or confer any benefits, rights, privileges,
claims, actions, or remedies to any person or entity as a third party
beneficiary, decree, or otherwise.

10.8.                        Entirety
and Amendments.  This Agreement embodies
the entire agreement between the parties and supersedes all prior agreements
and understandings relating to the Property. 
This Agreement may be amended or supplemented only in writing by a
non-electronic instrument executed by the party against whom enforcement is
sought.  For the avoidance of doubt,
copies of signed instruments that are electronically transmitted constitute a
writing for this purpose.

10.9.                        Time of the Essence.  Time is of the essence in the performance of
this Agreement.

10.10.                  Time.  All times, whenever specified herein, shall
be local time in Longmont, Colorado.

10.11.                  Confidentiality.  Subject to Section 10.12, Seller and
Buyer agrees to keep all negotiations and the terms of this Agreement
confidential, and shall not disclose such terms to any person, without the
prior written approval of the other party.

10.12.                  Press Release.  Until the Closing. neither Seller nor
Purchaser will release or cause or permit to be released any press notices, or
publicity (oral or written) or advertising promotion relating to, or otherwise
announce or disclose or cause or permit to be announced or disclosed, in any
manner whatsoever, the terms, conditions or substance of this Agreement without
first obtaining the written consent of the other party except those disclosures
that are required by law, including the Securities Act of 1933 (in which case
notice shall be timely provided to the other party of such requirement and
disclosure).  The foregoing shall not preclude
either party from discussing the substance or any relevant details of such
transactions with any of its attorneys, accountants, professional consultants,
lenders, partners, investors, or any prospective lender, partner or investor,
as the case may be, or prevent either party hereto, from complying with laws,
rules, regulations and court orders, including without limitation, governmental
regulatory, disclosure, tax and reporting requirements, or from making
disclosures in the ordinary course of its due diligence inspections and
contacts with third parties related thereto. 
Notwithstanding the foregoing, any party to this transaction (and each
employee, agent or representative of the foregoing) may disclose to any and all
persons, without limitation of any kind, the tax treatment and tax structure of
the transaction and all materials of any kind (including opinions or other tax
analyses) that are provided to them relating to such tax treatment and tax
structure except to the extent maintaining such confidentiality is necessary to
comply with any applicable federal or state securities laws.  The authorization in the preceding sentence
is not intended to permit disclosure of any other information unrelated to the
tax treatment and tax structure of the transaction including (without
limitation) (i) any portion of the transaction documents or related materials
to the extent not related to the tax treatment or tax structure of the

 11
 

 

transaction, (ii) the existence or status of any
negotiations unrelated to the tax issues, or (iii) any other term or detail not
relevant to the tax treatment or the tax structure of the transaction.

Notwithstanding the
foregoing, in no event shall Purchaser or its employees, agents successors or
assigns disclose the identity of and any information related to any of the members
or investors in Seller, either before or after the Closing.

10.13.                  Attorneys’
Fees.  Should either party employ
attorneys to enforce any of the provisions hereof, the non-prevailing party
agrees to pay the prevailing party all reasonable costs, charges, and expenses,
including reasonable attorneys’ fees, expended or incurred by the prevailing
party in connection therewith, whether incurred prior to, during or subsequent
to any bankruptcy, receivership, reorganization, appellate, or other legal
proceeding.

10.14.                  Notices.  All notices required or permitted hereunder
shall be in writing and shall be served on the parties at the addresses set
forth in Exhibit B.  Any such notices shall be either (i) sent by
overnight delivery using a nationally recognized overnight courier, in which
case notice shall be deemed delivered one business day after deposit with such
courier, (ii) sent by facsimile on a business day, in which case notice shall
be deemed delivered upon transmission of such notice with confirmed receipt by
the sender’s machine, or (iii) sent by personal delivery, in which case notice
shall be deemed delivered upon receipt or refusal of delivery.  A party’s address may be changed by written
notice to the other party; provided, however, that no notice of a change of
address shall be effective until actual receipt of such notice.  Copies of notices are for informational
purposes only, and a failure to give or receive copies of any notice shall not
be deemed a failure to give notice.  The
attorney for a party has the authority to send notices on behalf of such party.

10.15.                  Construction.  The parties acknowledge that the parties and
their counsel have reviewed and revised this Agreement and that the normal rule
of construction to the effect that any ambiguities are to be resolved against
the drafting party shall not be employed in the interpretation of this
Agreement or any exhibits or amendments hereto.

10.16.                  Remedies
Cumulative.  Except as expressly
provided to the contrary in this Agreement, the remedies provided in this
Agreement shall be cumulative and shall not preclude the assertion or exercise
of any other rights or remedies available by law, in equity or otherwise.

10.17.                  Calculation
of Time Periods.  Unless otherwise
specified, in computing any period of time described herein, the day of the act
or event after which the designated period of time begins to run is not to be
included and the last day of the period so computed is to be included, unless
such last day is a Saturday, Sunday or legal holiday for national banks in the
location where the Property is located, in which event the period shall run
until the end of the next day which is neither a Saturday, Sunday, or legal
holiday.  The last day of any period of
time described herein and the time during any day by which an event must occur
shall be deemed to end at 5 p.m.

10.18.                  Public
Company Requirements.  Upon Purchaser’s
request, for a period of two (2) years after Closing, Seller shall make any
books and records of the Property remaining in possession of Seller available
to Purchaser for inspection, copying and audit by Purchaser’s

 12
 

 

designated accountants, and at Purchaser’s expense
(exclusive of records pertaining to the entity owning the Property, appraisals
and other documents Seller deems confidential). 
Seller shall make available to Purchaser, but without third-party
expense to or warranty by Seller, such factual information in connection with
this Agreement and/or the Property as may be reasonably requested by Purchaser,
and in the possession or control of Seller, to enable Purchaser to comply with
applicable filing requirements of the Securities and Exchange Commission.  Purchaser or its designated independent or
other accountants may audit the operating statements of the Property, and Seller
shall supply such documentation in its possession or control as Purchaser or
its accountants may reasonably request in order to complete such audit.

10.19.                  Execution in
Counterparts.  This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original, and all of such counterparts shall constitute one agreement.  To facilitate execution of this Agreement,
the parties may execute and exchange by telephone facsimile counterparts of the
signature pages.

10.20.                  Further
Assurances.  In addition to the acts
and deeds recited herein and contemplated to be performed, executed or
delivered by either party at Closing, each party agrees to perform, execute and
deliver, on or after the Closing any further actions, documents, and will
obtain such consents, as may be reasonably necessary or as may be reasonably
requested to fully effectuate the purposes, terms and conditions of this
Agreement or to further perfect the conveyance, transfer and assignment of the
Property to Purchaser.

10.21.                  Approval.  To the extent any approval or consent shall
be required in this Agreement such approval or consent shall not be
unreasonably withheld, unless the terms of and conditions of such approval or
consent are to the sole discretion of such party.

10.22.                  Waiver of
Jury Trial.  TO THE EXTENT PERMITTED
BY APPLICABLE LAW, THE PARTIES HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 13

 

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

	
   

  	
  SELLER:

  
	
   

  	
   

  
	
   

  	
  CIRCLE CAPITAL LONGMONT LLC,

  a Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Longmont Senior Mezzanine Owner LLC,

  a Delaware limited liability company, its

  Sole Member and Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Longmont Junior Mezzanine Owner LLC,

  a Delaware limited liability company, its

  Sole Member and Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  Circle Longmont Limited Partnership,

  a Delaware limited partnership, its

  Sole Member and Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  Circle Capital Longmont GP

  LLC, a Colorado limited

  liability company, its General

  Partner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  PURCHASER:

  
	
   

  	
   

  
	
   

  	
  ARRAY BIOPHARMA INC.,

  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mike Carruthers

  
	
   

  	
  Name:

  	
  Mike Carruthers

  
	
   

  	
  Title:

  	
   

  
												

 

Acknowledged and agreed as to Section 8.1(f)

	
  CRESA Partners

  
	
   

  
	
   

  	
   

  
	
  By:                                       ,
  its                          

  	
   

  

 

 14
 

 

EXHIBIT
A

LEGAL
DESCRIPTION OF REAL PROPERTY

LOTS 1 AND 2, ST. VRAIN CENTRE PARCEL
F – MINOR SUBDIVISION “C”, ACCORDING TO THE PLAT THEREOF RECORDED AUGUST 21,
1997 UNDER RECEPTION NO. 1724602, COUNTY OF BOULDER, STATE OF COLORADO.

 

EXHIBIT
B

NOTICE
ADDRESSES

	
  To Seller at:

  	
   

  	
  To Purchaser at:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Circle Capital Longmont, LLC

  	
   

  	
  Array BioPharma Inc.

  	
   

  
	
  Attn:

  	
  Terrance W. Fitzpatrick and

  	
  Attn: General Counsel

  	
   

  
	
   

  	
  Ted Hinchman

  	
  3200 Walnut Street

  	
   

  
	
  4600 S. Ulster, Suite 590

  	
   

  	
  Boulder, CO 80301

  	
   

  
	
  Denver, CO 80237

  	
   

  	
  Telephone:

  	
  (303) 381-6679

  
	
  Telephone:

  	
  (303)565-2736

  	
  Facsimile:

  	
  (303) 449-5376

  
	
  Facsimile:

  	
  (303)565-2745

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  with a copy to:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Lawrence J. Donovan, Jr., Esq.

  	
   

  	
  Hogan & Hartson LLP

  	
   

  
	
  Isaacson Rosenbaum P.C.

  	
   

  	
  Attn: Patrick K. Perrin, Esq.

  	
   

  
	
  633 17th Street, Suite 2300

  	
   

  	
  1470 Walnut Street, #200

  	
   

  
	
  Denver, CO 80202

  	
   

  	
  Boulder, CO 80302

  	
   

  
	
  Telephone:

  	
  (303) 292-5656

  	
  Telephone:

  	
  (720)406-5330

  
	
  Facsimile:

  	
  (303) 292-3152

  	
  Facsimile:

  	
  (720)406-5301

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  and a copy to:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BioMed Realty, L.P.

  	
   

  
	
   

  	
   

  	
  Attn: General Counsel

  	
   

  
	
   

  	
   

  	
  17140 Bernardo Center Drive, Suite 222

  
	
   

  	
   

  	
  San Diego, CA 92128

  	
   

  
	
   

  	
   

  	
  Telephone:

  	
  (858) 485-9840

  
	
   

  	
   

  	
  Facsimile:

  	
  (858) 485-9843

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  with a copy to:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Latham & Watkins

  	
   

  
	
   

  	
   

  	
  Finance Department Notice

  	
   

  
	
   

  	
   

  	
  BioMed (2600-2620 Trade Centre Ave– SJL)

  
	
   

  	
   

  	
  600 West Broadway, Suite 1800

  	
   

  
	
   

  	
   

  	
  San Diego, CA 92101

  	
   

  
	
   

  	
   

  	
  Telephone:

  	
  619-236-1234

  
	
   

  	
   

  	
  Facsimile:

  	
  619-696-7419

  
							

 

 

EXHIBIT C

SPECIAL
WARRANTY DEED

                                ,
a                                 ,
(“Grantor”), whose street address is                                 ,
for the consideration of TEN AND NO/100 DOLLARS ($10.00) and other good and
valuable consideration, in hand paid, hereby sells and conveys to                                 ,
a                                 
(“Grantee”), whose address is                                                                 ,
the real property located in the County of                                 ,
State of Colorado, that is legally described on Exhibit A attached hereto, with all its appurtenances (the
“Owned Property”).

Grantor warrants title to the Owned Property against
all persons claiming under Grantor, subject only to the matters set forth on Exhibit B attached hereto.

Signed this           
day of                            ,
20    .

	
   

  	
  “GRANTOR”

  
	
   

  	
   

  
	
   

  	
                                                                ,
                              a

  
	
   

  	
                                                                

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
					

 

STATE OF COLORADO                         )

                                                                   )
ss:

COUNTY OF                                            )

The foregoing instrument was acknowledged before me
this            day of
                 ,
20    , by            ,
as                      of
                                     ,
a                           ,
as Grantor.

Witness my hand
and official seal.

My
commission expires:
                                                                  

                                                                                                           

Notary Public

 

EXHIBIT
A

TO

SPECIAL WARRANTY DEED

LEGAL
DESCRIPTION

Grantor:                                                                

Grantee:                                                                

 

EXHIBIT
B

TO

SPECIAL WARRANTY DEED

PERMITTED
EXCEPTIONS

 

EXHIBIT D

BILL OF SALE

For valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,                                                                                                                                                 ,
a                                                                                                 
(the “Seller”), hereby
conveys to                                                 ,
a                                                                                                 
(the “Purchaser”), all of
Seller’s right, title and interest in and to those certain items of personal
property described on Exhibit A attached hereto and made a part hereof (the “Personal Property”) relating to certain real property known as
                                                                                                ,
                                                
,                                                 .

Seller has not made and
does not make any express or implied warranty or representation of any kind
whatsoever with respect to the Personal Property, including, but not limited
to: title; merchantability of the Personal Property or its fitness for any
particular purpose; the design or condition of the Personal Property; the
quality or capacity of the Personal Property; workmanship or compliance of the
Personal Property with the requirements of any law, rule, specification or
contract pertaining thereto; patent infringement or latent defects.  Purchaser accepts the Personal Property on an
“AS IS, WHERE IS” basis, and “WITH ALL FAULTS.”

IN WITNESS WHEREOF,
Seller has caused this instrument to be executed and delivered as of the                     
day of                                ,
                .

	
   

  	
  ,

  	
   

  	
   

  	
   

  
	
   

  	
  a

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
  ,

  	
   

  	
   

  
	
   

  	
   

  	
  a

  	
   

  	
  , its

  
	
   

  	
   

  	
   

  	
   

  	
   

  
										

 

EXHIBIT E

OWNER’S AFFIDAVIT

The undersigned, being first duly sworn on oath,
hereby deposes and says that to its current actual knowledge:

1.             That affiant is the                                            
of                                            
(“Owner”), which is the
owner of certain real property located in                                            ,
further described in Title Commitment No.                                            
(the “Property”).

2.             That during the period of one hundred eighty (180) days
immediately preceding the date of this affidavit no work has been done, and no
materials have been furnished in connection with the erection, repair, or
removal of any building or other structure on said premises or in connection
with the improvement of said premises at Owner’s request in any manner
whatsoever that have not been paid for or for which Owner shall pay following
closing.

3.             During
the period of Owner’s ownership of the Property, Owner’s title to the
Property has never been successfully disputed, and title insurance for the
Property has never been refused.

4.             Owner is validly formed and existing under the laws of
the state of its organization and is in good standing in the state of its
organization and the state in which the Property is located.  No proceeding is pending for Owner’s
dissolution.

5.             There are no pending suits, lis
pendens, judgments, bankruptcies, executions, liens for past due taxes,
assessments, encumbrances, easements, deeds to secure debt, deeds of trust,
mortgages, security interests, UCC financing statements, other liens securing
money obligations of any kind, that are not shown by the public records and
that could affect the title to the Property or constitute a lien thereon.

6.             That the premises referred to above
are at present in use as                                            
and that only Owner and                                            actually
possesses or have the right to possess the Property.

7.             That there are no easements or claims of easements not
shown by the public records and there are no encroachments, overlaps, boundary
line disputes or other matters except as shown on the current survey.

8.             That
there are no taxes, tax liens, assessments or utility bills which have become a
lien against the premises and remain unpaid except as shown by the
public records.

9.             That undersigned’s United States Taxpayer Identification
Number is                                            
and my United States address is                                            .

 

10.           That
undersigned is not a “foreign person” as the term is defined in Section 1445 of
the Internal Revenue Code.

DATED as of this          
day of                                    ,
2006.

AFFIANT:

 

	
  

  	
  By:

  	
   

  	
   

  

 

STATE OF COLORADO                      )

                                                                )  ss:

COUNTY
OF                                         )

The foregoing instrument was acknowledged before me
this             
day of
                   ,
20    , by                    ,
as                    
of                    ,
a                    ,
as Grantor.

Witness my hand
and official seal.

My
commission expires:
                                                                            

                                                                                                                  

Notary Public

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