Document:

tbph_Ex10_3

		
			Exhibit 10.3
		

		
			FIRST AMENDMENT TO LEASE
		

		
			THIS FIRST AMENDMENT TO LEASE (this “First Amendment”) is made as of June 1, 2010 (“Effective Date”), by and between ARE-901/951 GATEWAY BOULEVARD, LLC, a Delaware limited liability company (“Landlord”), and THERAVANCE, INC., a Delaware corporation (“Tenant”).
		

		
			RECITALS
		

		
			A.          Landlord and Tenant are now parties to that certain Amended and Restated Lease Agreement dated January 1, 2001 (the “Lease”).  Pursuant to the Lease, Tenant leases certain premises consisting of approximately 59,816 rentable square feet (“Premises”) in a three (3)-story building located at 951 Gateway Boulevard, South San Francisco, California.  The Premises are more particularly described in the Lease.  Capitalized terms used herein without definition shall have the meanings defined for such terms in the Lease.
		

		
			B.         Pursuant to that certain Sublease dated February 9, 2009 (“Sublease”) now between Tenant and IPERIAN, INC., a Delaware corporation (as successor-in-interest to iZumi Bio, Inc.,) (“Subtenant”), Tenant subleases to Subtenant the entire second floor of the Building, consisting of approximately 19,988 rentable square feet (“Second Floor Premises”).
		

		
			C          Landlord and Tenant desire, subject to the terms and conditions set forth below, to amend the Lease to, among other things, (i) extend the Term of the Lease, (ii) provide for the surrender by Tenant of the entire first floor of the Building, consisting of approximately 19,914 rentable square feet (“First Floor Premises”) on May 31, 2011 (“FFP Surrender Date”), and (iii) provide for the surrender by Tenant of the Second Floor Premises on March 31, 2012 (“SFP Surrender Date”).
		

		
			NOW, THEREFORE, in consideration of the foregoing Recitals, which are incorporated herein by this reference, the mutual promises and conditions contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree as follows:
		

		
			1.          Term.  The “Expiration Date” of the Term of the Lease is hereby extended from March 31, 2012, until May 31, 2020.  From and after the Effective Date, references in the Lease to “Term” shall mean the one hundred twenty (120) months commencing on June 1, 2010 and expiring on May 31, 2020.
		

		
			2.          Premises.
		

		
			a.          Following the FFP Surrender Date. Notwithstanding anything to the contrary contained in the Lease, commencing on June 1, 2011, the definition of “Premises” shall be amended to mean the Second Floor Premises and the Third Floor Premises.
		

		
			As of June 1, 2011, the Site Plan attached to the Lease as Exhibit A2 describing the Premises shall be deleted and replaced with Exhibit A attached hereto.
		

		
			b.          Following the SFP Surrender Date.  Commencing on April 1, 2012, the definition of “Premises” shall be amended to mean the Third Floor Premises.
		

		
			As of April 1, 2012, Exhibit A attached hereto shall be amended to exclude the Second Floor Premises.
		

		
			
		

		
			
		

		
			

		 

		

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			3.          Premises Square Footage.
		

		
			a.          Following the FFP Surrender Date.  Commencing on June 1, 2011, the definition of “Premises Square Footage” contained in the Basic Lease Information shall be deleted and replaced with the following:
		

		
			“Premises Square Footage:                                           39,902 rentable square feet”
		

		
			b.          Following the SFP Surrender Date.  Commencing on April 1, 2012, the definition of “Premises Square Footage” contained in the Basic Lease Information shall be deleted and replaced with the following:
		

		
			“Premises Square Footage:                                           19,914 rentable square feet”
		

		
			4.          Tenant’s Proportionate Share.
		

		
			a.           Following the FFP Surrender Date.  Commencing on June 1, 2011, the definitions of “Tenant’s Proportionate Share of Project” and “Tenant’s Proportionate Share of Building” contained in the Basic Lease Information shall be deleted and replaced with the following:
		

		
			“Tenant’s Proportionate Share of Project:          66.71%
		

		
			Tenant’s Proportionate Share of Building:        66.71%”
		

		
			b.          Following the SFP Surrender Date.  Commencing on April 1, 2012, the definitions of “Tenant’s Proportionate Share of Project” and “Tenant’s Proportionate Share of Building” contained in the Basic Lease Information shall be deleted and replaced with the following:
		

		
			“Tenant’s Proportionate Share of Project:          33.29%
		

		
			Tenant’s Proportionate Share of Building:        33.29%”
		

		
			5.          Monthly Base Rent.
		

		
			a.          First Floor Premises/Third Floor Premises.  Notwithstanding anything to the contrary contained in the Lease, commencing on the Effective Date of this First Amendment, Monthly Base Rent for the First Floor Premises and the entire third floor of the Building, consisting of approximately 19,914 rentable square foot feet (“Third Floor Premises”) shall be payable as follows through the FFP Surrender Date:
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						Time Period

					
					
						    

					
					
						Monthly Base Rent

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						6/1/10 — 5/31/11

					
					
						 

					
					
						$103,552.80 per month

				

		
			 
		

		
			b.          Third Floor Premises.  Notwithstanding anything to the contrary contained in the Lease, commencing on June 1, 2011, Monthly Base Rent for the Third Floor Premises shall be payable pursuant to the following table:
		

		
			 
		

			
					
						

					
					
						 

					
					
						 

				
	
					
						Time Period

					
					
						    

					
					
						Monthly Base Rent

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						6/1/11 — 3/31/12

					
					
						 

					
					
						$55,759.20 per month

				
	
					
						4/1/12 — 3/31/13

					
					
						 

					
					
						$58,746.30 per month

				
	
					
						4/1/13 — 3/31/14

					
					
						 

					
					
						$60,508.69 per month

				
	
					
						4/1/14 — 3/31/15

					
					
						 

					
					
						$62,323.95 per month

				
	
					
						4/1/15 — 3/31/16

					
					
						 

					
					
						$64,193.69 per month

				
	
					
						4/1/16 — 3/31/17

					
					
						 

					
					
						$66,119.50 per month

				
	
					
						4/1/17 — 3/31/18

					
					
						 

					
					
						$68,103.08 per month

				
	
					
						4/1/18 — 3/31/19

					
					
						 

					
					
						$70,146.17 per month

				
	
					
						4/1/19 — 3/31/20

					
					
						 

					
					
						$72,250.56 per month

				
	
					
						4/1/20 — 5/31/20

					
					
						 

					
					
						$74,418.08 per month

				

		
			
		

		
			

		 

		

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			c.          Second Floor Premises.  Notwithstanding anything to the contrary contained in the Lease, commencing on the date of this First Amendment, Tenant shall pay to Landlord Monthly Base Rent for the Second Floor Premises through the SFP Surrender Date, as follows:
		

		
			 
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						Time Period

					
					
						     

					
					
						Monthly Base Rent

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						6/1/10 — 11/30/10

					
					
						 

					
					
						$51,968.80 per month

				
	
					
						12/1/10 - 2/28/11

					
					
						 

					
					
						$41,175.28 per month

				
	
					
						3/1/11 — 3/31/12

					
					
						 

					
					
						$42,410.54 per month

				

		
			 
		

		
			6.          Notice to Subtenant.  Concurrently with Tenant’s execution of this First Amendment, Tenant shall notify Subtenant in writing that the Lease with respect to the Second Floor Premises will terminate as of March 31, 2012, pursuant to this First Amendment, and that Subtenant shall have no right to extend the term of the Sublease beyond March 31, 2012.
		

		
			7.          Additional Rent.  Notwithstanding anything to the contrary contained in the Lease, commencing on December 1, 2010, until the SFP Surrender Date, Tenant shall be required to pay for Expenses (as defined in Paragraph 4.2 of the Lease) with respect to the Second Floor Premises only in an amount equal to $1.50 per rentable square foot of the Second Floor Premises per month.  Notwithstanding the foregoing, Tenant shall continue to pay Expenses and Additional Rent for the First Floor Premises (through the FFP Surrender Date, as the same may be extended pursuant to Section 12(a) below) and the Third Floor Premises as provided for in the Lease.
		

		
			8.          Additional Tenant Improvement Allowance.  Landlord and Tenant have amended the 901 Gateway Lease to, among other things, provide Tenant an “Additional TI Allowance” of up to $2,606,840.00.  Notwithstanding anything to the contrary contained in the 901 Gateway Lease, Tenant shall only have the right to use up to $782,052.00 of the Additional TI Allowance for the design and construction of fixed and permanent improvements within the Third Floor Premises desired by and performed by Tenant and which improvements shall be of a fixed and permanent nature (the “Additional Tenant Improvements”); provided, however, that Tenant shall comply with the terms of Section 3 of that certain First Amendment to Lease of even date herewith entered into by Landlord and Tenant with respect to the 901 Gateway Lease in connection with Tenant’s use of the Additional TI Allowance and the construction by Tenant of the Additional Tenant Improvements within the Third Floor Premises.
		

		
			9.          Security Deposit.  Effective as of the Effective Date of this First Amendment, Paragraph 7 of the Lease is hereby deleted in its entirety and replaced with the following:
		

		
			“7.           Security Deposit.  Tenant acknowledges and agrees that Tenant has delivered to Landlord a Security Deposit (as defined in the 901
		

		
			
		

		
			

		 

		

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			Gateway Lease) pursuant to the terms of the 901 Gateway Lease and that Landlord shall have the right to apply all or any portion of such Security Deposit in connection with any Default (as defined in Paragraph 24) under this Lease.
		

		
			The Security Deposit is not an advance rental deposit or a measure of Landlord’s damages in case of Tenant’s default.  Upon each occurrence of a Default  by Tenant under this Lease, Landlord may use all or any part of the Security Deposit to pay delinquent payments due
		

		
			
		

		
			

		 

		

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			under this Lease, future rent damages under California Civil Code Section 1951.2, and the cost of any damage, injury, expense or liability caused by such Default, without prejudice to any other remedy provided herein or provided by law.  Landlord’s right to use the Security Deposit under this Paragraph 7 includes the right to use the Security Deposit to pay future rent damages following the termination of this Lease pursuant to Paragraph 25.5 below.  Upon any use of all or any portion of the Security Deposit, Tenant shall pay Landlord within twenty (20) days after receipt of written demand the amount that will restore (by the delivery of a replacement or amended Letter of Credit) the Security Deposit to the amount set forth in the definition of “Letter of Credit” set forth in the Basic Lease Information of the 901 Gateway Lease.  Tenant hereby waives the provisions of any law, now or hereafter in force, including, without limitation, California Civil Code Section 1950.7, which provide that Landlord may claim from a security deposit only those sums reasonably necessary to remedy defaults in the payment of rent, to repair damage caused by Tenant or to clean the Premises, it being agreed that Landlord may, in addition, claim those sums reasonably necessary to compensate Landlord for any other loss or damage, foreseeable or unforeseeable, caused by the Default of Tenant  or any of Tenant’s Agents under this Lease.  Upon 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 periods prior to the filing of such proceedings, subject to applicable bankruptcy law.  If Tenant shall fully perform every provision of this Lease to be performed by Tenant and Landlord is holding cash in the amount of a bifurcated Letter of Credit  (as described below) or cash proceeds therefrom, the Security Deposit, or any balance thereof (i.e., after deducting therefrom all amounts to which Landlord is entitled under the provisions of this Lease), shall be returned to Tenant within ninety (90) days after the expiration or earlier termination of this Lease.  If Landlord is holding a bifurcated Letter of Credit upon the expiration or earlier termination of this Lease, Landlord shall comply with the LC Issuer’s requirements necessary to cancel the bifurcated Letter of Credit by the date that is ninety (90) days after the expiration or earlier termination of this Lease.
		

		
			Notwithstanding anything contained in this Paragraph 7 to the contrary, if Landlord draws on the Letter of Credit for any reason, then Tenant shall have the right, upon ten (10) days’ prior written notice to Landlord, to obtain a refund from Landlord of any unapplied proceeds of the Letter of Credit which Landlord has drawn upon, any such refund being conditioned upon Tenant simultaneously delivering to Landlord a replacement Letter of Credit in the amount required by, and otherwise meeting the requirements contained in, this Paragraph 7 and Paragraph 7 of the 901 Gateway Lease.
		

		
			Notwithstanding anything to the contrary contained herein or in the 901 Gateway Lease, if requested by Landlord at any time following the date of this Lease, Tenant shall cause the LC Issuing Bank (as defined in the 901 Gateway Lease) to bifurcate the Letter of Credit (as defined in the 901 Gateway Lease) into two separate letters of credit, one securing Tenant’s obligations under the 901 Gateway Lease and the other securing Tenant’s obligations under this Lease.  Such bifurcated letters of credit shall each be in an amount specified by Landlord, provided that the aggregate amount of such letters of credit shall equal the amount of the Letter of Credit immediately prior to such bifurcation.  Concurrently with the bifurcation of the Letter of Credit, Landlord and Tenant shall enter into a modification of the 901 Gateway Lease and a modification of this Lease, which modifications shall amend Paragraph 7 of the 901 Gateway Lease and this Paragraph 7 to provide for separate, stand-alone security deposit provisions in the 901 Gateway Lease and this Lease.
		

		
			If Landlord transfers its interest in the Project or this Lease, Landlord shall either (a) transfer any Security Deposit then held by Landlord to a person or entity assuming Landlord’s obligations under this Paragraph 7, or (b) return to Tenant any Security Deposit then held by Landlord and remaining after the deductions permitted herein.  Upon such transfer to such transferee or the return of the Security Deposit to Tenant, Landlord shall have no further obligation with respect to the Security Deposit, and Tenant’s right to the return of the Security
		

		
			
		

		
			

		 

		

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			Deposit shall apply solely against Landlord’s transferee.  Landlord’s obligation respecting the Security Deposit is that of a debtor, not a trustee, and no interest shall accrue thereon.”
		

		
			10.          Unreserved Parking Spaces.  Commencing on June 1, 2011, the definition of “Unreserved Parking Spaces” contained in the Basic Lease Information shall be deleted and replaced with the following:
		

		
			“Unreserved Parking Spaces:                                Subject to the terms of Paragraph 50, Tenant shall have the right, in common with other tenants of the Project pro rata in accordance with the rentable area of the Premises and the rentable areas of the Project occupied by such other tenants, to park in the Project Parking Areas (as defined in Paragraph 50).”
		

		
			11.        Surrender Plan.  Effective as of the Effective Date of this First Amendment, Paragraph 32.9 of the Lease hereby is deleted in its entirety and replaced with the following:
		

		
			“32.9        Condition of Premises upon Expiration or Termination.  Upon the expiration of the Term or earlier termination of Tenant’s right of possession, Tenant shall surrender the Premises to Landlord (x) free of Hazardous Materials brought upon, kept, used, stored, handled, treated, generated in, or released or disposed of from, the Premises by Tenant or Tenant’s Agents (“Tenant HazMat Operations”) in a manner consistent with prudent commercial practices and such that no Hazardous Materials resulting from Tenant HazMat Operations remain at the Premises in violation of Environmental Requirements and the continued presence of such Hazardous Materials are not in excess of industry standards for the occupancy and re-use of the Premises for research and scientific purposes by a subsequent tenant of the Premises, and (z) released of any license, clearance or other authorization of any kind issued by any governmental authority having jurisdiction over the use, storage, handling, treatment, generation, release, disposal, removal or remediation of Hazardous Materials in, on or about the Premises (collectively referred to herein as “Hazardous Materials Clearances”).  At least 3 months prior to the surrender of the Premises, Tenant shall deliver to Landlord a narrative description of the actions proposed (or required by any governmental authority) to be taken by Tenant in order to surrender the Premises (including any installations permitted by Landlord to remain in the Premises) at the expiration or earlier termination of the Term, free from any residual impact from the Tenant HazMat Operations and in a manner consistent with prudent commercial practices and such that no Hazardous Materials resulting from Tenant HazMat Operations remain at the Premises in violation of Environmental Requirements and the continued presence of Hazardous Materials are not in excess of industry standards for the occupancy and re-use of the Premises for research and scientific purposes by a subsequent tenant of the Premises (the “Surrender Plan”).  Such Surrender Plan shall be accompanied by a current listing of (i) all Hazardous Materials licenses and permits held by or on behalf of any of Tenant or Tenant’s Agents with respect to the Premises, and (ii) all Hazardous Materials used, stored, handled, treated, generated, released or disposed of or from the Premises by Tenant or Tenant’s Agents, and shall be subject to the review and approval of Landlord’s environmental consultant, which approval shall not be unreasonably withheld, conditioned or delayed.  In connection with the review and approval of the Surrender Plan, upon the request of Landlord, Tenant shall deliver to Landlord or its consultant such additional non-proprietary information concerning Tenant HazMat Operations as Landlord reasonably shall request.  On or before such surrender, Tenant shall deliver to Landlord commercially reasonable evidence that the approved Surrender Plan has been satisfactorily completed and Landlord shall have the right, subject to reimbursement at Tenant’s expense as set forth below, to cause Landlord’s environmental consultant to inspect the Premises and perform such additional procedures as may be deemed reasonably necessary to confirm that the Premises are, as of the effective date of such surrender or early termination of the Lease, free from any residual impact from Tenant HazMat Operations as required pursuant to this Paragraph 7.  Tenant shall reimburse Landlord, as Additional Rent, for the actual out-of pocket expense incurred by Landlord for Landlord’s environmental consultant to review and approve the Surrender Plan and to visit the Premises and verify satisfactory completion of the same, which
		

		
			
		

		
			

		 

		

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			cost shall not exceed $5,000.  Landlord shall have the unrestricted right to deliver such Surrender Plan (subject to any standard non-reliance letter, if any, prepared by Tenant and delivered by Tenant to Landlord concurrently with Tenant’s delivery of the Surrender Plan to Landlord, which non-reliance letter shall be applicable only to third parties other than Landlord) and any report by Landlord’s environmental consultant with respect to the surrender of the Premises to Landlord’s potential tenants, purchasers, lenders and other third parties with a need to know in connection with Landlord’s business; provided, however, that Landlord instructs such parties to treat the same as confidential.
		

		
			If Tenant shall fail to prepare or submit a Surrender Plan reasonably approved by Landlord, or if Tenant shall fail to complete the approved Surrender Plan,  or if such Surrender Plan, whether or not approved by Landlord, shall fail to adequately address any residual effect of Tenant HazMat Operations in, on or about the Premises, shall fail to adequately address any Hazardous Materials resulting from Tenant’s HazMat Operations remaining at the Premises in violation of Environmental Requirements or in a manner not consistent with prudent commercial practices or such that the continued presence of such Hazardous Materials are in excess of industry standards for the occupancy and re-use of the Premises for research and scientific purposes by a subsequent tenant of the Premises,  Landlord shall have the right to take such actions as Landlord reasonably may deem reasonable or appropriate to assure that the Premises and the Project are surrendered free from any such residual impact from Tenant HazMat Operations, the cost of which actions shall be reimbursed by Tenant as Additional Rent, without regard to the limitation set forth in the first paragraph of this Paragraph 32.9.
		

		
			All obligations of Tenant hereunder not fully performed as of the expiration or earlier termination of this Lease, including the obligations of Tenant under Paragraph 32 of this Lease, shall survive the expiration or earlier termination of the Term, including, without limitation, indemnity obligations, payment obligations with respect to rent and obligations concerning the condition and repair of the Premises.”
		

		
			12.        Surrender of the Surrender Premises.
		

		
			a.        First Floor Premises.  The Lease with respect to the First Floor Premises shall terminate as provided for in the Lease on the FFP Surrender Date.  Tenant shall voluntarily surrender the First Floor Premises on or before such date in the condition which Tenant is required to surrender the Premises as of the expiration of the Lease.  Tenant represents and warrants that since the Commencement Date of the Lease, the First Floor Premises has been used solely for offices purposes, warehousing and shipping and receiving (including the storage of Subtenant’s chemicals in the warehouse space and storage of chemical waste in the chemical waste room located in the First Floor Premises).  Notwithstanding anything to the contrary contained herein or in the Lease, so long as the First Floor Premises continues to be used solely for office purposes, warehousing and shipping and receiving through the FFP Surrender Date, Tenant shall not be required to provide Landlord a Surrender Plan with respect to the First Floor Premises in connection with Tenant’s surrender of the First Floor Premises.  From and after the FFP Surrender Date, Tenant shall have no further rights or obligations of any kind with respect to the First Floor Premises.  Notwithstanding the foregoing, those provisions of the Lease which, by their terms, survive the termination of the Lease shall survive the surrender of the First Floor Premises and termination of the Lease with respect to the First Floor Premises as provided for herein.  Nothing herein shall excuse Tenant from its obligations under the Lease with respect to the First Floor Premises prior to the FFP Surrender Date.  Notwithstanding anything to the contrary contained in the Lease, (i) Tenant shall not be required to remove any Tenant Improvements or Alterations from the First Floor Premises in connection with its surrender of the First Floor Premises and all Tenant Improvements and Alterations located in the First Floor Premises shall become the Property of Landlord on the Surrender Date, and (ii)  in addition to any such Tenant Improvements and Alterations, all casework, if any, located in the First Floor
		

		
			
		

		
			

		 

		

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			Premises as of the date of this First Amendment shall also remain in the First Floor Premises and become the Property of Landlord on the Surrender Date.
		

		
			Tenant has informed Landlord that Tenant will be relocating certain of its employees currently located in the First Floor Premises to a portion of Tenant’s premises located within the 901 Gateway Building (as defined below).  Tenant shall have the right to extend the term of the Lease with respect to the First Floor Premises for a period of ninety (90) days in order to complete the relocation of its employees.  Not later than 90 days after the mutual execution and delivery of this First Amendment by the parties, Tenant shall notify Landlord in writing (“FFP Notice”) whether Tenant elects to extend the term of the Lease with respect to the First Floor Premises for such ninety (90) day period.  If Tenant delivers the FFP Notice to Landlord within the time period provided in the immediately preceding sentence, the FFP Surrender Date shall be automatically extended for one (1) additional period of ninety (90) days (“FFP Extension Period”).  During the FFP Extension Period, Tenant shall have the right to continue to occupy the First Floor Premises pursuant to all of the terms and conditions of the Lease, as modified by this First Amendment; provided, however, that Tenant shall be required to pay Monthly Base Rent for the First Floor Premises in an amount equal to $55,759.20 per month for each month of the FFP Extension Period, along with all Additional Rent payable with respect to the First Floor Premises pursuant to the terms of the Lease.
		

		
			b.        Second Floor Premises.  The Lease with respect to the Second Floor Premises shall terminate as provided for in the Lease on the SFP Surrender Date.  Tenant shall voluntarily surrender the Second Floor Premises on or before such date in the condition which Tenant is required to surrender the Premises as of the expiration of the Lease and in compliance with the surrender requirements set forth in the Lease (including this First Amendment).  From and after the SFP Surrender Date, Tenant shall have no further rights or obligations of any kind with respect to the Second Floor Premises.  Notwithstanding the foregoing, those provisions of the Lease which, by their terms, survive the termination of the Lease shall survive the surrender of the Second Floor Premises and termination of the Lease with respect to the Second Floor Premises as provided for herein.  Nothing herein shall excuse Tenant from its obligations under the Lease with respect to the Second Floor Premises prior to the SFP Surrender Date.  Notwithstanding anything to the contrary contained in the Lease, (i) Tenant shall not be required to remove any Tenant Improvements or Alterations from the Second Floor Premises in connection with its surrender of the Second Floor Premises and all Tenant Improvements and Alterations located in the Second Floor Premises shall become the Property of Landlord on the SFP Surrender Date, and (ii) in addition to any such Tenant Improvements and Alterations, all laboratory casework located in the Second Floor Premises as of the date of this First Amendment shall also remain in the Second Floor Premises and become the Property of Landlord on the SFP Surrender Date.
		

		
			Notwithstanding anything to the contrary contained herein, Tenant acknowledges that Landlord may enter into a direct lease with Subtenant pursuant to which Subtenant would lease the Second Floor Premises directly from Landlord following the SFP Surrender Date (“Direct Lease”).  If Landlord and Subtenant enter into a Direct Lease prior to the SFP Surrender Date,  Tenant shall not be required to provide Landlord a Surrender Plan with respect to the Second Floor Premises in connection with Tenant’s surrender of the Second Floor Premises; provided, however, that Landlord shall have the right to conduct any inspections and testing of the Second Floor Premises determined reasonably necessary by Landlord to determine whether the condition of the Second Floor Premises is in compliance with the provisions of the Lease and whether any contamination has occurred in or from the Second Floor Premises.  Upon request from Tenant, Landlord shall provide Tenant with a copy of the results of such testing, subject to Landlord’s standard non-reliance letter.  Notwithstanding anything to the contrary contained herein, Tenant shall be required to pay the cost of such testing of the Second Floor Premises if there is a violation of Paragraph 32 of the Lease caused by Tenant or any of Tenant’s Agents or if contamination for which Tenant is responsible under Paragraph 32 of the Lease is identified,
		

		
			
		

		
			

		 

		

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			along with all costs incurred to clean up, remove or remediate any contamination identified by the investigations and testing conducted by Landlord hereunder.
		

		
			c.        First Floor Warehouse/Shipping and Receiving.  Landlord acknowledges and agrees that from and after the FFP Surrender Date the warehouse and shipping and receiving areas located in the First Floor Premises will be Common Area to which Tenant, Subtenant and other tenants, licensees and occupants of the Building will have shared access for warehouse and shipping and receiving purposes.  In addition, in connection with the splitting of services pursuant to Section 13 below, Tenant may be required to locate the new CDA compressor, N2 and CO2 distribution systems and the House Vacuum in the warehouse space, which likely would result in the removal of some existing cages (collectively, the “Warehouse Relocation Work”).  Subject to the provisions of Section 13 below, Landlord consents to Tenant’s installation of the Warehouse Relocation Work in the First Floor warehouse, and Tenant’s continued use of the warehouse and shipping and receiving areas in the First Floor Premises in common with other tenants, licensees and occupants of the Building from and after the FFP Surrender Date for such purposes.
		

		
			13.        Splitting of Services.  Landlord and Tenant acknowledge that because Tenant currently leases the entire Building pursuant to the Lease and that certain adjacent building located at 901 Gateway Boulevard, South San Francisco, California (“901 Building”) pursuant to the 901 Gateway Lease, the services identified in this Section 13, along with any additional services which may be identified by both Landlord and Tenant, each in the exercise of its reasonable discretion (collectively, “Shared Services”), are currently shared between the Building and the 901 Building.  Because Tenant is surrendering the First Floor Premises and the Second Floor Premises pursuant to this First Amendment, Tenant has requested that the Shared Services be split pursuant to this Section 13 so that they may independently serve each of the Building and the 901 Building, respectively (“Splitting Work”).
		

		
			a.        Landlord shall make available to Tenant an allowance of up to $250,000.00 (the “Splitting Allowance”) for the Splitting Work.  Except for the Splitting Allowance, Tenant shall be solely responsible for all of the costs of the Splitting Work.  Landlord and Tenant agree to work together in good faith to minimize the cost of the Splitting Work.  The Splitting Allowance shall only be available for use by Tenant for the payment of the cost of the Splitting Work until July 31, 2012, and any portion of the Splitting Allowance which has not been disbursed by Landlord for the Splitting Work on or before the expiration of such date shall be forfeited and shall not be available for use by Tenant.  Notwithstanding anything to the contrary contained herein, Landlord and Tenant shall agree upon the equitable allocation of the cost of the Splitting Work for any additional Shared Services identified by Landlord and Tenant after July 31, 2012, at the time such additional Shared Services are identified.
		

		
			b.        Unless Landlord elects otherwise, Tenant shall perform the Splitting Work pursuant to plans approved by Landlord, which approval shall not be unreasonably withheld, conditioned or delayed.  The contractors for the Splitting Work shall be shall be selected by Tenant, subject to Landlord’s approval, which approval shall not be unreasonably withheld. conditioned or delayed.  Prior to the commencement of the Splitting Work, Tenant shall deliver to Landlord a copy of any contract with Tenant’s contractors and certificates of insurance from any contractor performing any part of the Splitting Work evidencing industry standard commercial general liability, automotive liability, “builder’s risk”, and workers’ compensation insurance.  Tenant shall cause the general contractor to provide a certificate of insurance naming Landlord, Alexandria Real Estate Equities, Inc., and Landlord’s lender (if any) as additional insureds for the general contractor’s liability coverages required above.  Landlord shall be entitled to receive the benefit of any warranties, if any, obtained by Tenant with respect to Splitting Work
		

		
			
		

		
			

		 

		

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			c.        Except as otherwise expressly provided in this Section 13(c), Tenant shall cause the Splitting Work to be completed on or before June 30, 2012.  Notwithstanding the foregoing, Tenant shall complete the Splitting Work with respect to the CO2, N2, CDA, DI and House Vacuum distribution of services (“Specified Services”) no later than April 30, 2012; provided, however, that Landlord may, by not less than one hundred twenty (120) days’ prior written notice to Tenant, cause Tenant to complete the Splitting Work with respect to the Specified Services prior to such date if Landlord intends to enter into a lease or other occupancy agreement with a third party (including, without limitation, Subtenant) with respect to any portion of the First Floor Premises and/or Second Floor Premises.
		

		
			d.        Notwithstanding anything to the contrary contained herein, Tenant shall not be required to perform any Splitting Work with respect to the telephone, IT, building management and security systems serving the Building prior to March 31, 2011.  Prior to such date, Landlord and Tenant agree to work together in good faith to determine the manner and timing of splitting such systems at the lowest possible cost.
		

		
			Tenant, at Tenant’s sole cost and expense, shall disconnect the existing public address systems serving the First Floor Premises and the Second Floor Premises on or before April 30, 2011.
		

		
			14.        Utilities.  On or before September 1, 2010, Tenant shall transfer all water, electricity, heat, light, power, sewer, refuse and trash collection contracts for the Building to Landlord.  With respect to Tenant’s obligation to transfer utilities to Landlord, Tenant and Landlord shall reasonably cooperate to ensure that each such utility will continue to be available to the Building without interruption.  Such cooperation shall include working with each party’s account representative to coordinate the termination of the utility service in Tenant’s name and the commencement of such service in Landlord’s name in a manner that permits utility service without disruption.  With respect to janitorial services for the Premises, during the Term, as extended, Tenant shall provide janitorial services to the Premises pursuant to its contract for janitorial services with the vendor performing such services for the 901 Building and Landlord shall have no obligation to provide janitorial services to the Premises.  Except for janitorial services provided by Landlord with respect to the Common Areas, which shall be passed through as an Expense, Landlord shall provide for its own janitorial service to that portion of the Building not occupied by Tenant, and may not charge Tenant for any portion of such service as an Expense or otherwise.
		

		
			Notwithstanding anything to the contrary contained in the Lease, as of the date that all such utilities are established in Landlord’s name, Paragraph 5.1 of the Lease shall be deleted in its entirety and replaced with the following:
		

		
			“5.1        Tenants Obligation to Pay
		

		
			Landlord shall provide, subject to the terms of this Paragraph 5.1, water, electricity, heat, light, power, sewer, and other utilities (including natural gas [but not process gas] and fire sprinklers to the extent the Project is plumbed for such services), refuse and trash collection and janitorial services (collectively, “Utilities”).  Landlord shall pay, as part of Expenses or subject to Tenant’s reimbursement obligation, for all Utilities used on the Premises, all maintenance charges for Utilities, and any storm sewer charges or other similar charges for Utilities imposed by any governmental authority or Utility provider, and any taxes, penalties, surcharges or similar charges thereon.  Landlord may cause, at Tenant’s expense, any Utilities to be separately metered or charged directly to Tenant by the provider.  Notwithstanding the foregoing, Tenant’s cost for the installation of any separate meter shall not exceed that then-applicable cost of a “Demon Meter” or its reasonable equivalent.  Tenant shall pay directly to the Utility provider, prior to delinquency, any separately metered Utilities and services which may be furnished to Tenant or the Premises during the Term.  Tenant shall pay, as part of Expenses, its share of all charges for jointly metered Utilities based upon consumption, as reasonably determined by Landlord.  Tenant acknowledges that the Premises, the Building and/or the Project may become subject to the
		

		
			
		

		
			

		 

		

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			rationing of Utility services or restrictions on Utility use as required by a public utility company, governmental agency or other similar entity having jurisdiction thereof.  Tenant acknowledges and agrees that its tenancy and occupancy hereunder shall be subject to such rationing or restrictions as may be imposed upon Landlord, Tenant, the Premises, the Building and/or the Project, and Tenant shall in no event be excused or relieved from any covenant or obligation to be kept or performed by Tenant by reason of any such rationing or restrictions.  Upon request from Landlord, Tenant agrees to cooperate in good faith with Landlord to develop the most efficient energy conservation program possible in order to comply with Laws, but in no event shall Landlord have the right to implement any energy conservation program (except to the extent mandated by Law) which unreasonably interferes, in Tenant’s reasonable good faith judgment, with Tenant’s operation of its business at the Premises.  Except to the extent that an energy conservation or program or measure is mandated by Law, Tenant shall have the right, in Tenant’s reasonable discretion, to approve in advance any energy conservation program or measure proposed by Landlord.”
		

		
			15.        Emergency Generator. Although Landlord is the owner of emergency generator and related automatic transfer switches serving the Building and the 901 Building(collectively, the “Emergency Generator”), prior to the date of this First Amendment, Tenant, as the sole tenant of the Building and the 901 Building, has been operating and maintaining the Emergency Generator. Tenant shall, on the date that is 1 day after the mutual execution and delivery of this First Amendment by the parties (“EG Transfer Date”), (x) deliver the Emergency Generator  to Landlord in good working order with a full tank of diesel (y) assign to, transfer and deliver to Landlord all governmental permits and licenses (to the extent such permits and licenses are assignable), if any, warranties (to the extent assignable), operating and maintenance manuals, records and other documents concerning the Emergency Generator, and (y) terminate any service, maintenance or other contracts maintained by Tenant with respect to the Emergency Generator.  Tenant has not been obligated to maintain a wastewater permit in connection with the Emergency Generator.  With respect to any permit required for the Emergency Generator, Landlord acknowledges and agrees that Tenant has been in the process of obtaining a generator permit in connection with a Tenant permitting process underway with the Bay Area Air Quality Management District (“BAAQMD”) for the 901 Building, that Tenant will remove the generator from its permit application with BAAQMD, and that Landlord will need to obtain a generator permit from BAAQMD in its own name.  To the best of Tenant’s knowledge, Tenant does not have any other permits in connection with the Emergency Generator.  To the extent Tenant has current contracts with any vendors for the Emergency Generator, Tenant and Landlord shall reasonably cooperate to assign or terminate such contracts in the manner set forth in Section 14 above regarding utilities.
		

		
			To the extent it is not possible for Tenant to remove the request for a generator permit from its BAAQMD application or to assign or terminate any service maintenance or other contracts within 1 day after the mutual execution and delivery of this First Amendment, Tenant shall not be in default hereunder if Tenant promptly commences efforts to do so and diligently performs until such actions have been completed within a reasonable period after such date.
		

		
			Landlord shall, within 5 days of the EG Transfer Date, as part of Expenses, conduct such testing of the Emergency Generator required, in Landlord’s sole and absolute discretion, to determine whether the Emergency Generator is, in fact, in good working order.  If such testing discloses that the Emergency Generator is not in good working order, Landlord shall have the right, at Tenant’s sole cost and expense, to perform any maintenance and/or repairs required to put the Emergency Generator in good working order.
		

		
			Following the EG Transfer Date, Landlord’s sole obligation for either providing emergency generators or providing emergency back-up power to Tenant shall be: (i) to provide emergency generators with not less than the current capacity of the Emergency Generator and Tenant shall be entitled to Tenant’s share of the capacity thereof available for use by all tenants
		

		
			
		

		
			

		 

		

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			of the Building and the 901 Building, collectively, in accordance with the rentable area of the Premises and the 901 Buildingand the collective rentable areas of the Building and the 901 Building occupied by such other tenants, (ii) to contract with a third party to maintain the emergency generators (“Emergency Generator Servicer”) as per the manufacturer’s standard maintenance guidelines, and (iii) to obtain and maintain licenses for the emergency generators as required by applicable law.  Landlord shall have no obligation to provide Tenant with operational emergency generators or back-up power or to supervise, oversee or confirm that the Emergency Generator Servicer or any other third party maintaining the emergency generators is maintaining the generators as per the manufacturer’s standard guidelines or otherwise.  Landlord shall provide to Tenant copies of any reports received by Landlord from the Emergency Generator Servicer regarding its maintenance and repairs of the emergency generators; provided, however, that in no event shall Landlord’s failure to deliver such reports constitute a default by Landlord under the Lease.  During any period of replacement, repair or maintenance of the emergency generators when the emergency generators are not operational, including any delays thereto due to the inability to obtain parts or replacement equipment, Landlord shall have no obligation to provide Tenant with an alternative back-up generator or generators or alternative sources of back-up power.  Tenant expressly acknowledges and agrees that Landlord does not guaranty that such emergency generators will be operational at all times or that emergency power will be available to the Premises when needed.  Landlord shall provide Tenant with not less than five (5) business days’ notice of the scheduled disruption in the operation of the emergency generators. In the case of an emergency, Landlord shall provide Tenant with notice of any emergency disruption as soon as reasonably possible after Landlord becomes aware of the need for such emergency disruption.
		

		
			16.        Maintenance.  Tenant shall continue to maintain the Building pursuant to Paragraph 13.1 of the Lease following the FFP Surrender Date until such date that Landlord notifies Tenant in writing that Landlord shall assume the maintenance of the Building (“Assumption Date”); provided, however, that in no event shall the Assumption Date occur after July 31, 2011.  Nothing contained herein shall release Tenant from its obligations arising prior to the Assumption Date.  Commencing on the Assumption Date, Paragraph 13 of the Lease shall be deleted in its entirely and replaced with the following:
		

		
			“13.  MAINTENANCE AND REPAIRS OF PREMISES
		

		
			13.1  Landlord Repairs.  Landlord, as an Expense, shall repair, replace when necessary (as reasonably determined by Landlord) and maintain in good repair the exterior of the Building (including exterior doors), parking, landscaping, exterior lighting, roof membrane, roof covering and all other Common Areas of the Project, including HVAC, plumbing, fire sprinklers, elevators, fire safety equipment, sewer and septic systems, the Emergency Generator and all other building systems serving the Premises and other portions of the Project (“Building Systems”), uninsured losses and damages caused by Tenant, or by any of Tenant’s Agents excluded.  Landlord, at Landlord’s sole cost without right of reimbursement from Tenant, shall repair, replace when necessary (as reasonably determined by Landlord) and maintain the structural portions of the roof (specifically excluding the roof membrane and the roof covering, the repair and/or replacement of which shall be treated as an Expense), the foundation, footings, floor slab and load-bearing walls and exterior walls of the Building (excluding any glass and any routine maintenance, including, without limitation, any painting, sealing, patching and waterproofing of such walls, repair, the maintenance of which shall be treated as an Expense), uninsured losses and damages caused by Tenant or Tenant’s Agents excluded.  Any losses and damages caused by Tenant or any Tenant Agent shall be repaired by Landlord, to the extent not covered by insurance, at Tenant’s sole cost and expense.  Landlord reserves the right to stop Building Systems services when necessary (i) by reason of accident or emergency, or (ii) for planned repairs, alterations or improvements, which are, in the reasonable judgment of Landlord, desirable or necessary to be made, until said repairs, alterations or improvements shall have been completed.  Landlord shall have no responsibility or liability for failure to supply Building Systems services during any such
		

		
			
		

		
			

		 

		

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			period of interruption; provided,  however, that Landlord shall, except in case of emergency, give Tenant not less than five (5) business days’ advance notice of any planned stoppage of Building Systems services for routine and planned maintenance, repairs, alterations or improvements.  Tenant shall promptly give Landlord written notice of any repair required by Landlord pursuant to this section, after which Landlord shall make a commercially reasonable effort to effect such repair within five (5) business days, or, where the repair cannot reasonably be completed within five (5) business days, as soon as reasonably possible thereafter.  Landlord shall not be liable for any failure to make any repairs or to perform any maintenance unless such failure shall persist for an unreasonable time after the time periods set forth herein.  Tenant waives its rights under any state or local law to terminate this Lease or to make such repairs at Landlord’s expense and agrees that the parties’ respective rights with respect to such matters shall be solely as set forth herein. Repairs required as the result of fire, earthquake, flood, vandalism, war, or similar cause of damage or destruction shall be controlled by Paragraph 21.
		

		
			Notwithstanding anything to the contrary contained in the Lease, commencing on the Assumption Date, to the extent that Landlord performs or is required to perform any capital repairs, replacements or improvements for the Project, whether to comply with Law, with any obligation imposed on Landlord pursuant to this Lease or at Landlord’s election, Tenant shall be responsible as part of Expenses for its Proportionate Share of the cost of such capital repairs, replacements and improvements amortized over the useful life (as reasonably determined by Landlord taking into account relevant real estate accounting principles, consistently applied, including, without limitation, the hours of operation of the Building and its use for laboratory/office purposes) of such capital items.  Tenant shall pay Tenant’s Proportionate Share of such amortized costs for each month after such capital repairs, replacements or improvements are completed until the first to occur of the expiration of the Term (as it may be extended) or the end of the period over which such costs are amortized.
		

		
			13.2        Tenant’s Repairs.  Subject to Paragraph 13.1 hereof, Tenant, at its expense, shall repair and maintain in good condition all portions of the Premises, including, without limitation, entries, doors (excluding exterior doors providing access to the Building, maintenance, repair and replacement of which is the obligation of Landlord as an Expense), ceilings, interior windows, interior walls, and the interior side of demising walls.  Should Tenant fail to make any such repair or replacement or fail to maintain the Premises, Landlord shall give Tenant notice of such failure.  If Tenant fails to commence cure of such failure within ten (10) days of Landlord’s notice, and thereafter diligently prosecute such cure to completion, Landlord may perform such work and shall be reimbursed by Tenant within thirty (30) days after receipt of written demand therefor (together with reasonable documentation); provided, however, that if such failure by Tenant creates or could create an emergency, Landlord may immediately commence cure of such failure and shall thereafter be entitled to recover the actual and reasonable costs of such cure from Tenant.  Subject to Paragraphs 21 and 22 of the Lease, Tenant shall bear the full uninsured cost of any repair or replacement to any part of the Project that results from damage caused by Tenant or any Tenant Party and any repair that benefits only the Premises.”
		

		
			17.        Signs.  Tenant shall be entitled to its Proportionate Share of any available external Building signage, if any, which signage shall be at Tenant’s cost and expense.  Notwithstanding the foregoing, Tenant acknowledges and agrees that Tenant’s signage on the Building including, without limitation, the size, color and type, shall be subject to Landlord’s prior written approval and shall be consistent with Landlord’s signage program at the Project and applicable legal requirements.  Tenant shall be responsible, at Tenant’s sole cost and expense, for the maintenance of Tenant’s signage, for the removal of Tenant’s signs at the expiration or earlier termination of this Lease and for the repair all damage resulting from such removal.
		

		
			18.        Option to Renew.  Tenant shall have two (2) options (each a “Renewal Option”) to extend the term of this Lease with respect to the entire Premises for successive periods of five (5) years each (each a “Renewal Term”) pursuant to the provisions of Paragraph 49 of the Lease.  For
		

		
			
		

		
			

		 

		

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			avoidance of doubt, the parties hereby acknowledge and agree that if the Monthly Base Rent during any Renewal Term is calculated pursuant to Paragraph 49.4(ii) of the Lease, Monthly Base Rent shall be increased on each annual anniversary of the commencement of such Renewal Term by a percentage as determined by Landlord and agreed to by Tenant at the time the Fair Market Rent is determined.
		

		
			19.        Right of First Offer.  Notwithstanding anything to the contrary contained herein or in the Lease, Paragraph 51 of the Lease is hereby deleted in its entirety and of no further force or effect and Tenant shall have no further right of first offer or other right to purchase the Building.
		

		
			20.        Right to Expand.
		

		
			a.        Right of First Refusal.  From and after the FFP Surrender Date with respect to the First Floor Premises, and from and after the SFP Surrender Date with respect to the Second Floor Premises through the expiration or earlier termination of the Term, each time that Landlord intends to accept a written proposal (the “Pending Deal”) to lease the First Floor Space or, if applicable, the Second Floor Space to a third party (“ROFR Space”), Landlord shall deliver to Tenant written notice (the “Pending Deal Notice”) of the existence and the terms of such Pending Deal; provided, however, that the terms of this Section 20(a) shall not apply to any current or future transaction pursuant to which Landlord intends to lease all or any of the Second Floor Space and/or the First Floor Premises directly to Subtenant.  Tenant shall be entitled to exercise its right under this Section 20(a) only with respect to the entire ROFR Space. Within ten (10) business days after Tenant’s receipt of the Pending Deal Notice, Tenant shall deliver to Landlord written notice (the “Space Acceptance Notice”) if Tenant elects to lease the ROFR Space.  Tenant’s right to receive the Pending Deal Notice and election to lease or not lease the ROFR Space pursuant to this Section 20(a) is hereinafter referred to as the “Right of First Refusal.” If Tenant elects to lease the ROFR Space by delivering the Space Acceptance Notice within the required ten (10) business day period, Tenant shall be deemed to agree to lease the ROFR Space on the terms and conditions set forth in the Pending Deal Notice and any other terms agreeable to Landlord and Tenant, in the respective sole discretion of each party.
		

		
			If (i) Tenant fails to deliver a Space Acceptance Notice to Landlord within the required ten (10) business day period, or (ii) no lease amendment or lease agreement for the ROFR Space, acceptable to Landlord and Tenant in their respective reasonable discretion, has been executed and delivered by the parties within thirty (30) days after Landlord delivers a draft of the same to Tenant despite the good faith efforts of both parties, Tenant shall be deemed to have elected not to exercise Tenant’s right to lease the ROFR Space pursuant to the Pending Deal Notice in question in which case Tenant shall be deemed to have forever waived its right to lease the ROFR Space pursuant to the Pending Deal Notice in question, this Section 20(a) shall terminate and be of no further force or effect with respect to the Pending Deal Notice in question, and Landlord shall have the right to lease the ROFR Space to the party that was the subject of the Pending Deal Notice on substantially the same business terms and conditions set forth in the Pending Deal Notice.  Notwithstanding the foregoing, if Landlord negotiates with the proposed tenant economic lease terms materially more favorable (but in no event shall the economic lease terms be considered materially more favorable unless the difference in net effective base rent is 10% or greater), as reasonably determined by Landlord, than those offered to Tenant but rejected as part of the Pending Deal Notice, Landlord shall be required to submit the more favorable economic terms to Tenant for its review.  Tenant shall have five (5) business days after receipt of the more favorable economic terms to accept or reject the revised terms.  If Tenant rejects the more favorable terms, Landlord shall be free to enter into a lease with the proposed tenant on such terms.  Tenant’s rejection of any particular Pending Deal Notice shall not relieve Landlord of its obligation to again offer any Right of First Refusal Space to Tenant at any time that Landlord intends, other than with respect to Subtenant with respect to whom the terms of this Section 20 shall not apply, to again agree to a written proposal from another party to lease such space in such period.
		

		
			
		

		
			

		 

		

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			b.        Amended Lease.  If: (i) Tenant fails to timely deliver a Space Acceptance Notice, or (ii) after the expiration of a period of thirty (30) days from Tenant’s delivery of a Space Acceptance Notice pursuant to Section 20(a), no lease amendment or lease agreement for the ROFR Space, acceptable to Landlord and Tenant, in the respective sole discretion of each, has been executed, Tenant shall be deemed to have waived its right to lease the ROFR Space at issue.
		

		
			c.        Exceptions.  Notwithstanding the above, the Right of First Refusal shall not be in effect and may not be exercised by Tenant:
		

		
			(i)         during any period of time that Tenant is in Default under any provision of the Lease; or
		

		
			(ii)          if Tenant has been in Default under any provision of the Lease three (3) or more times, whether or not the Defaults are cured, during the twelve (12) month period prior to the date on which Tenant seeks to exercise the Right of First Refusal.
		

		
			d.        Termination.  The Right of First Refusal shall terminate and be of no further force or effect even after Tenant’s due and timely exercise of the Right of First Refusal, if, after such exercise, but prior to the commencement date of the lease of such ROFR Space, (i) Tenant fails to timely cure any default by Tenant under the Lease; or (ii) Tenant has Defaulted three (3) or more times during the period from the date of the exercise of the Right of First Refusal to the date of the commencement of the lease of the ROFR Space, whether or not such Defaults are cured.
		

		
			e.        Rights Personal.  The Right of First Refusal is personal to Tenant and is not assignable without Landlord’s consent, which may be granted or withheld in Landlord’s sole discretion separate and apart from any consent by Landlord to an assignment of Tenant’s interest in the Lease, except that they may be assigned in connection with any Permitted Transfer of this Lease.
		

		
			f.        No Extensions.  The period of time within which the Right of First Refusal may be exercised shall not be extended or enlarged by reason of Tenant’s inability to exercise the Right of First Refusal.
		

		
			21.        Additional Modifications to Lease.  From and after the Effective Date of this First Amendment, the Lease shall be modified as follows:
		

		
			a.          Modification to Basic Lease Information.  The Tenant’s Contact Person shall be “General Counsel” rather than “Marty Glick”.
		

		
			b.          Modification to Paragraph 2.3(a), “Changes to Common Area”.  The following shall be added at the end of Paragraph 2.3(a):  “Notwithstanding the foregoing, Landlord’s exercise of the foregoing rights shall not materially interfere with Tenant’s access to or use of the Premises to the extent that Tenant’s business operations are materially interrupted thereby.”
		

		
			c.          Modification to Paragraph 2.3(b), “Changes to Common Area”.  The second sentence of Paragraph 2.3(b) hereby is deleted and revised to state in its entirety as follows:  “During periods of construction only, Landlord shall have the right to provide parking to Tenant on properties reasonably proximate to the Project (the “Adjacent Properties”) or through the use of valets or parking attendants on the Parking Areas or the Adjacent Properties, provided that Tenant shall at all times have parking for the number of automobiles contemplated under the Lease.”
		

		
			d.          Modification to Paragraph 4.2, “Additional Rent”. There shall be added to Paragraph 4.2 a new Paragraph 4.2.11, “Exclusions from Expenses”, which reads as follows:
		

		
			 
		

		
			
		

		
			

		 

		

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			“4.2.11        Exclusions from Expenses.  Notwithstanding anything to the contrary contained in this Paragraph 4.2, and in addition to the exclusions set forth in the preceding paragraph, there shall be excluded from Expenses and Additional Rent the following: (i) leasing commissions, advertising expenses, promotional expenses, attorneys’ fees, disbursements, and other costs and expenses incurred in procuring prospective tenants, negotiating and executing leases, and constructing improvements required to prepare for a new tenant’s occupancy for the Building or the Project, if any; (ii) finance and debt service fees, principal and/or interest on debt or amortization payments on any mortgages executed by Landlord covering Landlord’s property, any other indebtedness of Landlord, and rental under any ground lease or leases for the Building or the Project; (iii) any depreciation allowance or expense, amortization (except for expenditures permitted under this Lease) or expense reserve; (iv) the costs of Landlord’s third party property manager or, if there is no third party property manager, administration fees in excess of the amount of 3.0% of Base Rent); (v) except for management fees, Landlord’s general overhead and any overhead or profit increment to any subsidiary or affiliate of Landlord for services on or to the Project to the extent that the cost of such service exceeds competitive costs for such services rendered by persons or entities of similar skill, competence and experience other than a subsidiary or affiliate of Landlord; (vi) any costs or expenses representing any amount paid for services and materials to a (personal or business) related person, firm, or entity to the extent such amount exceeds the amount that would have been paid for such service or materials at the then existing market rates in the absence of such relationship; (vii) compensation paid to any employee of Landlord above the grade of Property Manager/Building Superintendent, including officers and executives of Landlord (provided that Landlord may pass through as Expenses compensation paid to employees at or below the grade of Property Manager/Building Superintendant or affiliates of Landlord providing services to the Project); (viii) costs of electrical energy furnished and metered directly to tenants of the Project or for which Landlord is entitled to be reimbursed by tenants as additional rental over and above tenant’s Monthly Base Rent or pass-through of Expenses; (ix) the cost of any work or service furnished to any tenant or occupant of the Project to a materially greater extent or in a materially more favorable manner than that furnished generally to the tenants and other occupants of the Project, or the costs of work or service furnished exclusively for the benefit of any tenant or occupant of the Project or at such tenant’s cost; (x) the costs and expenses incurred in resolving disputes with other tenants, other occupants, or prospective tenants or occupants of the Project, collecting rents or otherwise enforcing leases of the tenants of the Project; (xi) any costs incurred to remove, study, test, remediate or otherwise related to the presence of Hazardous Materials in the Building, which Hazardous Materials (A) Tenant proves originated from any separately demised tenant space within the Building other than the Premises or (B) Tenant proves were not brought upon, kept, used, stored, handled, treated, generated in, or released or disposed of from, the Building by Tenant or Tenant’s Agents; (xii) the costs of any work or service performed for any facility other than a facility located within the Project; (xiii) the costs of repairs, alterations, and general maintenance necessitated by the gross negligence or willful misconduct of Landlord or its agents, employees, or contractors or repairs; (xiv) interest or penalties due to the late payment by Landlord of taxes, utility bills or other such costs (except to the extent caused by Tenant’s action or inaction); (xv) any of the following tax or assessment expenses: (a) estate, inheritance, transfer, gift, federal, state or franchise taxes of Landlord, or (b) penalties and interest, other than those attributable to Tenant’s failure to comply timely with its obligations pursuant to this Lease; and (xvi) bad debt expenses and charitable contributions and donations.  Landlord agrees that (a) Landlord will not collect or be entitled to collect more than one hundred percent (100%) of the Expenses actually paid by Landlord in connection with the operation of the Project in any calendar year, and (b) Landlord shall make no profit from Landlord’s collection of Expenses.”
		

		
			
		

		
			

		 

		

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			e.          Modifications to Paragraph 15, “Tenant’s Insurance”.  The third sentence of Paragraph 15.2 hereby is revised in its entirety to state:  “No such policy shall contain a deductible greater than Twenty-Five Thousand Dollars ($25,000.00).  Paragraph 15.5 hereby is deleted and revised to state in its entirety as follows:  “All insurance required to be carried by Tenant hereunder shall be maintained with insurance companies authorized to do business in the State of California for the issuance of the applicable type of insurance coverage and rated A-VII or better in Best’s Key Rating Guide.  Tenant shall deliver to Landlord certificates of insurance and true and complete copies of any and all endorsements required herein for all insurance required to be maintained by Tenant hereunder at the execution of this Lease by Tenant.  Tenant shall, at least thirty (30) days prior to expiration of each policy, furnish Landlord and the other parties named as additional insureds with certificates of renewal thereof.  Tenant shall (i) provide Landlord with 30 days advance written notice of cancellation of each policy, and (ii) require Tenant’s insurer to endeavor to provide 30 days advance written notice of cancellation of each policy.”
		

		
			f.           Modification to Paragraph 23.2, “Assignment and Subletting — Requirements of Request for Consent”.  Paragraph 23.2 shall be amended to provide that if Tenant requests consent to a proposed assignment or subletting (except in connection with a Permitted Transfer), whether or not the term of the proposed transfer is for the balance of the Term, Landlord shall have the right to recapture that portion of the Premises that is the subject of the proposed assignment or subletting and terminate the Lease with respect thereto; provided, however, that subsection (3) of Paragraph 23.2 shall be of no further force or effect and Landlord shall not have the right to sublease or take an assignment, as the case may be, of the interest in the Lease that is at issue.
		

		
			g.          Modification to Paragraph 24, “Tenant’s Default”.  The following is hereby added at the end of Paragraph 24.(a):  “provided, however, that if Tenant vacates the Premises at any time during the last nine (9) months of the Term but continues to perform all of its obligations hereunder, including, without limitation, maintaining all insurance policies required by this Lease and complying with all of the requirements of Paragraph 32.9, Tenant shall not be deemed to be in default under this Paragraph 24.(a);”.
		

		
			h.          Modification to Paragraph 32.2, “Tenant’s Obligation to Update Disclosure Certificates”.  The first sentence of Paragraph 32.2 hereby is deleted and revised to state in its entirety as follows:  “Within ten (10) business days after receipt of Landlord’s written request, Tenant shall complete, execute and deliver to Landlord an updated Disclosure Certificate (each, an “Updated Disclosure Certificate”) describing Tenant’s then current and proposed future uses of Hazardous Materials on or about the Premises, which Update Disclosure Certificates shall be in the same format as that which is set forth in Exhibit D or in such other form as is reasonably acceptable to Landlord”.
		

		
			i.           Modification to Paragraph 34, “Waiver”.  The last two sentences of Paragraph 34 hereby are deleted and revised to state in their entirety as follows:  “No delay or omission in the exercise of any right or remedy of Landlord or Tenant in regard to any default by the other shall impair such right or remedy or be construed as a waiver.  Any waiver by Landlord or Tenant of any default must be in writing and shall not be a waiver of any other default concerning the same or any other provisions of this Lease.”
		

		
			j.           Modification to Paragraph 40, “Financial Statements”.  Paragraph 40 hereby is deleted and revised to state in its entirety as follows:  “Within ten (10) days after Landlord’s request, Tenant shall deliver to Landlord the then current, or if Tenant is a publicly traded company, the most recent publicly available financial statements of Tenant prepared, compiled or reviewed by a certified public accountant, including a balance sheet and
		

		
			
		

		
			

		 

		

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			profit and loss statement for the most recent prior year, all prepared in accordance with GAAP.”.
		

		
			k.           New Paragraphs.  The following new paragraphs are hereby added to the Lease:
		

		
			“53.           Commercially Reasonable.  Where Landlord or Tenant are required to use “best efforts” in the performance of any obligation under this Lease, “best efforts” shall mean “commercially reasonable good faith efforts.”
		

		
			“54.           Force Majeure.  Whenever a period of time is herein prescribed for action (other than the payment of money) to be taken by Landlord or Tenant, such party shall not be liable or responsible for, and there shall be excluded from the computation for any such period of time, any delays due to strikes, riots, acts of God, shortages of labor or materials, war, terrorist activity, governmental laws, regulations or restrictions”.
		

		
			22.        Brokers.  Landlord and Tenant each represents and warrants that it has not dealt with any broker, agent or other person (collectively, “Broker”) in connection with this First Amendment and that no Broker brought about this transaction, other than BT Cassidy/Turley.  Landlord and Tenant each hereby agree to indemnify and hold the other harmless from and against any claims by any Broker, other than the broker, if any named in this Section 22, claiming a commission or other form of compensation by virtue of having dealt with Tenant or Landlord, as applicable, with regard to this First Amendment.
		

		
			23.        OFAC.  To Tenant’s knowledge, without any duty of inquiry, as of the date of Tenant’s execution of this First Amendment, Tenant is currently (a) in compliance with and shall at all times during the Term of the Lease remain in compliance with the regulations of the Office of Foreign Assets Control (“OFAC”) of the U.S. Department of Treasury and any statute, executive order, or regulation relating thereto (collectively, the “OFAC Rules”), (b) not listed on, and shall not during the term of the Lease be listed on, the Specially Designated Nationals and Blocked Persons List maintained by OFAC and/or on any other similar list maintained by OFAC or other governmental authority pursuant to any authorizing statute, executive order, or regulation, and (c) not a person or entity with whom a U.S. person is prohibited from conducting business under the OFAC Rules.
		

		
			24.        Miscellaneous.
		

		
			a.        This First Amendment is the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous oral and written agreements and discussions.  This First Amendment may be amended only by an agreement in writing, signed by the parties hereto.
		

		
			b.        This First Amendment is binding upon and shall inure to the benefit of the parties hereto, their respective agents, employees, representatives, officers, directors, divisions, subsidiaries, affiliates, assigns, heirs, successors in interest and shareholders.
		

		
			c.        Tenant acknowledges that it has read the provisions of this First Amendment, understands them, and is bound by them. Time is of the essence in this First Amendment.
		

		
			d.        This First Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which when taken together shall constitute one and the same instrument.  The signature page of any counterpart may be detached therefrom without impairing the legal effect of the signature(s) thereon provided such signature page is attached to any other counterpart identical thereto except having additional signature pages executed by other parties to this First Amendment attached thereto.
		

		
			 
		

		
			
		

		
			

		 

		

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			e.        Except as amended and/or modified by this First Amendment, the Lease is hereby ratified and confirmed and all other terms of the Lease shall remain in full force and effect, unaltered and unchanged by this First Amendment.  In the event of any conflict between the provisions of this First Amendment and the provisions of the Lease, the provisions of this First Amendment shall prevail.  Whether or not specifically amended by this First Amendment, all of the terms and provisions of the Lease are hereby amended to the extent necessary to give effect to the purpose and intent of this First Amendment.
		

		
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			IN WITNESS WHEREOF, the parties hereto have executed this First Amendment as of the day and year first above written.
		

			
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						TENANT:

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						THERAVANCE, INC.,

				
	
					
						 

					
					
						a Delaware corporation

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						/s/ Rick E Winningham

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By: Rick E Winningham

				
	
					
						 

					
					
						Its: Chief Executive Officer

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						LANDLORD:

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						ARE-901/951 GATEWAY BOULEVARD, LLC,

				
	
					
						 

					
					
						a Delaware limited liability company

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						ALEXANDRIA REAL ESTATE EQUITIES, L.P.,

				
	
					
						 

					
					
						 

					
					
						a Delaware limited partnership,

				
	
					
						 

					
					
						 

					
					
						managing member

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						By:

					
					
						ARE-QRS CORP.,

				
	
					
						 

					
					
						 

					
					
						 

					
					
						a Maryland corporation,

				
	
					
						 

					
					
						 

					
					
						 

					
					
						general partner

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						/s/ Eric S. Johnson

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						By: Eric S. Johnson

				
	
					
						 

					
					
						 

					
					
						 

					
					
						Its: Vice President, Real Estate Legal Affairs

				

		
			 
		

		
			
		

		
			

		 

		

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			EXHIBIT A
		

		
			The Premises
		

		
			(Attached)
		

		
			 
		

		
			 
		

		
			

		 

		

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			Page  - 1

		

		

		
			SECOND AMENDMENT TO LEASE
		

		
			This Second Amendment (the “Amendment“) to Lease is made as of 10-1        , 2010, by and between ARE-901/951 GATEWAY BOULEVARD, LLC, a Delaware limited liability company ("Landlord"), and THERAVANCE, INC., a Delaware corporation successor-in-interest to ADVANCED MEDICINE, INC., a Delaware corporation ("Tenant").
		

		
			RECITALS
		

		
			A.         Landlord and Tenant have entered into that certain Amended and Restated Lease Agreement dated January 1, 2001 as amended by that certain First Amendment to Lease (“First Amendment”) dated June 1, 2010 (as amended, the "Lease), wherein Landlord leased to Tenant certain premises (the "Premises") located at located 951 Gateway Boulevard, South San Francisco, California as more particularly described therein. Capitalized terms not otherwise defined herein shall have the meanings ascribed to such terms in the Lease.
		

		
			B.         Landlord and Tenant desire, subject to the terms and conditions set forth below, to amend the Lease, to among other things, extend Tenant’s right to extend the term of the Lease with respect to the First Floor of the Premises as set forth in the second paragraph of Section 12.a of the First Amendment.
		

		
			AGREEMENT
		

		
			NOW, THEREFORE, in consideration of the foregoing Recitals, which are incorporated herein by this reference , the mutual promises and conditions contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agrees as follows:
		

		
			1.         Amendment. The third sentence of the second paragraph of Section 12.a of the First Amendment is hereby deleted in its entirety and replaced with the following:
		

		
			“Not later than one hundred eighty (180) days after the mutual execution and delivery of this First Amendment by the parties, Tenant shall notify Landlord in writing (“FFP Notice”) whether Tenant elects to extend the term of the Lease with respect to the First Floor Premise for such ninety (90) day period.”
		

		
			2.           Miscellaneous.
		

		
			(a)        This Amendment is the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous oral and written agreements and discussions. This Amendment may be amended only by an agreement in writing, signed by the parties hereto.
		

		
			(b)        This Amendment is binding upon and shall inure to the benefit of the parties hereto, their respective agents, employees, representatives, officers, directors, divisions, subsidiaries, affiliates, assigns, heirs, successors in interest and shareholders.
		

		
			(c)        This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which when taken together shall constitute one and the same instrument. The signature page of any counterpart may be detached therefrom without impairing the legal effect of the signature(s) thereon provided such signature page is attached to any
		

		
			
		

		
			

		 

		

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			other counterpart identical thereto except having additional signature pages executed by other parties to this Amendment attached thereto.
		

		
			(d)        Landlord and Tenant each represent and warrant that it has not dealt with any broker, agent or other person (collectively, “Broker“) in connection with this transaction, and that no Broker brought about this transaction. Landlord and Tenant each hereby agree to indemnify and hold the other harmless from and against any claims by any Broker claiming a commission or other form of compensation by virtue of having dealt with Tenant or Landlord, as applicable, with regard to this leasing transaction.
		

		
			(e)        Except as amended and/or modified by this Amendment, the Lease is hereby ratified and confirmed and all other terms of the Lease shall remain in full force and effect, unaltered and unchanged by this Amendment. In the event of any conflict between the provisions of this Amendment and the provisions of the Lease, the provisions of this Amendment shall prevail. Whether or not specifically amended by this Amendment, all of the terms and provisions of the Lease are hereby amended to the extent necessary to give effect to the purpose and intent of this Amendment.
		

		
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			IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the day and year first above written.
		

			
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						TENANT:

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						THERAVANCE, INC.,

				
	
					
						 

					
					
						a Delaware corporation

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						 /s/ Mike Aguilar

				
	
					
						 

					
					
						Its:

					
					
						 SVP & CFO

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						LANDLORD:

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						ARE-901/951 GATEWAY BOULEVARD, LLC,

				
	
					
						 

					
					
						a Delaware limited liability company

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						ALEXANDRIA REAL ESTATE EQUITIES, L.P.,

				
	
					
						 

					
					
						 

					
					
						a Delaware limited partnership,

				
	
					
						 

					
					
						 

					
					
						managing member

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						By:

					
					
						ARE-QRS CORP.,

				
	
					
						 

					
					
						 

					
					
						 

					
					
						a Maryland corporation,

				
	
					
						 

					
					
						 

					
					
						 

					
					
						general partner

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

					
					
						By:

					
					
						 /s/ Eric S. Johnson

				
	
					
						 

					
					
						 

					
					
						 

					
					
						 

					
					
						Vice President, Real Estate Legal Affairs

				

		
			 
		

		
			 
		

		
			

		 

		

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			THIRD AMENDMENT TO LEASE
		

		
			THIS THIRD AMENDMENT TO LEASE (this "Third Amendment") is made as of September 27, 2013 (“Effective Date”), by and between ARE-901/951 GATEWAY BOULEVARD, LLC, a Delaware limited liability company ("Landlord"), and THERAVANCE, INC., a Delaware corporation ("Tenant").
		

		
			RECITALS
		

		
			A.          Landlord and Tenant are now parties to that certain Amended and Restated Lease Agreement dated January 1, 2001, as amended by that certain First Amendment to Lease dated June 1, 2010 (“First Amendment”), and as further amended by that certain Second Amendment to Lease dated as of October 1, 2010 (as amended, the "Lease").  Pursuant to the Lease, Tenant leases certain premises consisting of approximately 19,914 rentable square feet ("Existing Premises") on the third floor of in a three (3)-story building located at 951 Gateway Boulevard, South San Francisco, California.  The Existing Premises are more particularly described in the Lease.  Capitalized terms used herein without definition shall have the meanings defined for such terms in the Lease.
		

		
			B.          Landlord and Tenant desire, subject to the terms and conditions set forth below, to amend the Lease to, among other things, expand the Existing Premises to include the entire first floor of the Building, consisting of approximately 19,914 rentable square feet.
		

		
			NOW, THEREFORE, in consideration of the foregoing Recitals, which are incorporated herein by this reference, the mutual promises and conditions contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree as follows:
		

		
			1.          Expansion Premises.  In addition to the Existing Premises, commencing on the Expansion Premises Commencement Date (as defined below), Landlord leases to Tenant, and Tenant leases from Landlord, that certain portion of the first floor of the Building containing approximately 19,914 rentable square feet, as shown on Exhibit A attached to this Third Amendment (“Expansion Premises”).
		

		
			2.          Delivery.  Landlord shall deliver the Expansion Premises to Tenant (“Delivery” or “Deliver”) on the date that is 1 business day after the mutual execution and delivery of this Third Amendment by the parties.
		

		
			The "Expansion Premises Commencement Date"  shall be the date that Landlord Delivers the Expansion Premises to Tenant in broom clean condition and free of all other tenants and occupants.  Upon the request of Landlord, Tenant shall execute and deliver a written acknowledgment of the Expansion Premises Commencement Date and the expiration date of the Lease in the form of the "Acknowledgement of Commencement Date" attached hereto as Exhibit B;  provided,  however, Tenant’s failure to execute and deliver such acknowledgment shall not affect Landlord’s or Tenant’s rights hereunder.
		

		
			Except as otherwise set forth in this Third Amendment: (i) Tenant shall accept the Expansion Premises in their “as-is” condition as of the Expansion Premises Commencement Date; (ii) Landlord shall have no obligation for any defects in the Expansion Premises; and (iii) Tenant’s taking possession of the Expansion Premises shall be conclusive evidence that Tenant accepts the Expansion Premises and that the Expansion Premises were in good condition at the time possession was taken.
		

		
			Tenant agrees and acknowledges that, except as otherwise set forth in this Third Amendment, neither Landlord nor any agent of Landlord has made any representation or warranty with respect to the condition of all or any portion of the Expansion Premises, and/or the suitability of the 
		

		
			
		

		
			

		 

		

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			Expansion Premises for the conduct of Tenant’s business, and Tenant waives any implied warranty that the Expansion Premises are suitable for the Permitted Use.
		

		
			3.          Premises.  Notwithstanding anything to the contrary contained in the Lease, commencing on the Expansion Premises Commencement Date, the definition of “Premises” shall be amended to mean the Third Floor Premises and the Expansion Premises.
		

		
			As of the Expansion Premises Commencement Date, Exhibit A attached to the Third Amendment shall be amended to include the Expansion Premises as shown Exhibit A attached to this Third Amendment.
		

		
			4.          Premises Square Footage.  Commencing on the Expansion Premises Commencement Date, the definition of “Premises Square Footage” contained in the Basic Lease Information shall be deleted and replaced with the following:
		

		
			“Premises Square Footage:        39,828 rentable square feet”
		

		
			5.          Tenant’s Proportionate Share.  Commencing on the Expansion Premises Commencement Date, the definitions of “Tenant’s Proportionate Share of Project” and “Tenant’s Proportionate Share of Building” contained in the Basic Lease Information shall be deleted and replaced with the following:
		

		
			“Tenant’s Proportionate Share of Project:             66.58%
		

		
			Tenant’s Proportionate Share of Building:            66.58%”
		

		
			Notwithstanding anything to the contrary contained in the Lease, Tenant shall commence paying Additional Rent with respect to the Expansion Premises on the Expansion Premises Commencement Date.
		

		
			6.          Monthly Base Rent.
		

		
			a.          Existing Premises.  Notwithstanding anything to the contrary contained herein, Tenant shall continue to pay Monthly Base Rent with respect to the Existing Premises as provided in Section 5.b. of the First Amendment through May 31, 2020.
		

		
			b.          Expansion Premises.  Commencing on January 1, 2015 (“Expansion Premises Rent Commencement Date”), Tenant shall commence paying Monthly Base Rent with respect to the Expansion Premises at the same monthly amount then being paid with respect to the Existing Premises pursuant to Section 5.b. of the First Amendment (which amount, as of January 1, 2015, shall be $62,323.95 per month), as the same may be adjusted pursuant to the terms of the Lease.  Tenant shall not be required to pay Monthly Base Rent with respect to the Expansion Premises for the period commencing on the Expansion Premises Commencement Date through December 31, 2014 (“Abatement Period”).
		

		
			9.          Expansion Right.  Because Tenant is expanding the Premises to include the Expansion Premises pursuant to this Third Amendment, commencing on the Expansion Premises Commencement Date, all references to the First Floor Space in Section 20 of the First Amendment are hereby deleted, and Tenant’s Right of First Refusal shall apply, subject to the terms of Section 20 of the First Amendment, only to the Second Floor Space.
		

		
			10.        Brokers.  Landlord and Tenant each represents and warrants that it has not dealt with any broker, agent or other person (collectively, “Broker") in connection with this Third Amendment and that no Broker brought about this transaction other than Kidder Mathews.  Landlord and 
		

		
			
		

		
			

		 

		

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			Tenant each hereby agree to indemnify and hold the other harmless from and against any claims by any Broker, other than Kidder Mathews, if any named in this Section 10, claiming a commission or other form of compensation by virtue of having dealt with Tenant or Landlord, as applicable, with regard to this Third Amendment.  Landlord shall be responsible for all commissions due to Kidder Mathews arising out of the execution of this Third Amendment in accordance with the terms of a separate written agreement between Kidder Mathews and Landlord.
		

		
			11.        Miscellaneous.
		

		
			a.          This Third Amendment is the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous oral and written agreements and discussions.  This Third Amendment may be amended only by an agreement in writing, signed by the parties hereto.
		

		
			b.          This Third Amendment is binding upon and shall inure to the benefit of the parties hereto, and their respective successor and assigns.
		

		
			c.          Tenant acknowledges that it has read the provisions of this Third Amendment, understands them, and is bound by them. Time is of the essence in this Third Amendment.
		

		
			d.          This Third Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which when taken together shall constitute one and the same instrument.  The signature page of any counterpart may be detached therefrom without impairing the legal effect of the signature(s) thereon provided such signature page is attached to any other counterpart identical thereto except having additional signature pages executed by other parties to this Third Amendment attached thereto.
		

		
			e.          Except as amended and/or modified by this Third Amendment, the Lease is hereby ratified and confirmed and all other terms of the Lease shall remain in full force and effect, unaltered and unchanged by this Third Amendment.  In the event of any conflict between the provisions of this Third Amendment and the provisions of the Lease, the provisions of this Third Amendment shall prevail.  Whether or not specifically amended by this Third Amendment, all of the terms and provisions of the Lease are hereby amended to the extent necessary to give effect to the purpose and intent of this Third Amendment.
		

		
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			IN WITNESS WHEREOF, the parties hereto have executed this Third Amendment as of the day and year first above written.
		

			
					
						 

					
					
						TENANT:

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						THERAVANCE, INC.,

				
	
					
						 

					
					
						a Delaware corporation

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						/s/ Rick E Winningham

				
	
					
						 

					
					
						Its:

					
					
						Chief Executive Officer

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						LANDLORD:

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						ARE-901/951 GATEWAY BOULEVARD, LLC,

				
	
					
						 

					
					
						a Delaware limited liability company

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:  ALEXANDRIA REAL ESTATE EQUITIES, L.P.,

				
	
					
						 

					
					
						       a Delaware limited partnership, 

				
	
					
						 

					
					
						       managing member

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						ARE-QRS CORP.,

				
	
					
						 

					
					
						 

					
					
						a Maryland corporation,

				
	
					
						 

					
					
						 

					
					
						general partner

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						/s/ Eric S. Johnson

				
	
					
						 

					
					
						Its:

					
					
						Vice President, Real Estate Legal Affairs

				

		
			 
		

		
			 
		

		
			

		 

		

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			EXHIBIT A
		

		
			Expansion Premises
		

		
			
		

		
			

		 

		

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			EXHIBIT B
		

		
			Acknowledgment of Expansion Premises Commencement Date
		

		
			This ACKNOWLEDGMENT OF EXPANSION PREMISES COMMENCEMENT DATE is made this 30th day of September, 2013 between ARE-901/951 GATEWAY BOULEVARD, LLC, a Delaware limited liability company (“Landlord”), and THERAVANCE, INC., a Delaware corporation (“Tenant”), and is attached to and made a part of the Amended and Restated Lease Agreement dated January 1, 2001, as amended by that certain First Amendment to Lease dated June 1, 2010, as further amended by that certain Second Amendment to Lease dated as of October 1, 2010, and as further amended by that certain Third Amendment to Lease dated as of September 27, 2013 (as amended, the “Lease”), by and between Landlord and Tenant.  Any initially capitalized terms used but not defined herein shall have the meanings given them in the Lease.
		

		
			Landlord and Tenant hereby acknowledge and agree, for all purposes of the Lease, that the Expansion Premises Commencement Date is September 30, 2013, and the expiration date of the Lease is May 31, 2020.  In case of a conflict between the terms of the Lease and the terms of this Acknowledgment of Expansion Premises Commencement Date, this Acknowledgment of Expansion Premises Commencement Date shall control for all purposes.
		

		
			IN WITNESS WHEREOF, Landlord and Tenant have executed this ACKNOWLEDGMENT OF EXPANSION PREMISES COMMENCEMENT DATE to be effective on the date first above written.
		

			
					
						 

					
					
						TENANT:

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						THERAVANCE, INC.,

				
	
					
						 

					
					
						a Delaware corporation

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						Renee Gala

				
	
					
						 

					
					
						Its:

					
					
						VP Finance

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						LANDLORD:

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						ARE-901/951 GATEWAY BOULEVARD, LLC,

				
	
					
						 

					
					
						a Delaware limited liability company

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:  ALEXANDRIA REAL ESTATE EQUITIES, L.P.,

				
	
					
						 

					
					
						       a Delaware limited partnership, 

				
	
					
						 

					
					
						       managing member

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						ARE-QRS CORP.,

				
	
					
						 

					
					
						 

					
					
						a Maryland corporation,

				
	
					
						 

					
					
						 

					
					
						general partner

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						/s/ Eric S. Johnson

				
	
					
						 

					
					
						Its:

					
					
						Vice President, Real Estate Legal Affairs

				

		
			 
		

		
			 
		

		
			

		 

		

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			FOURTH AMENDMENT TO LEASE
		

		
			THIS FOURTH AMENDMENT TO LEASE (this “Fourth Amendment”) is made as of November 13, 2017 (“Effective Date”), by and between ARE-901/951 GATEWAY BOULEVARD, LLC, a Delaware limited liability company (“Landlord”), and THERAVANCE BIOPHARMA US, INC., a Delaware corporation (“Tenant”).
		

		
			RECITALS
		

		
			A.          Landlord and Tenant are now parties to that certain Amended and Restated Lease Agreement dated January 1, 2001, as amended by that certain First Amendment to Lease dated as of June 1, 2010 (the “First Amendment”), as further amended by that certain Second Amendment to Lease dated as of October 1, 2010, and as further amended by that certain Third Amendment to Lease dated as of September 27, 2013 (the “Third Amendment”) (as amended, the “Lease”).  Pursuant to the Lease, Tenant leases certain premises consisting of approximately 39,828 rentable square feet (“Current Premises”) on the first and third floors of that certain building located at 951 Gateway Boulevard, South San Francisco, California 94080.  The Current Premises are more particularly described in the Lease.  Capitalized terms used herein without definition shall have the meanings defined for such terms in the Lease.
		

		
			B.          Landlord and Tenant are now parties to that certain Lease Agreement dated January 1, 2001, as amended by that certain First Amendment to Lease dated as of June 1, 2010, and as further amended by that certain Second Amendment to Lease dated as of the Effective Date (the “Second Amendment to 901 Lease”) (as amended, the “901 Lease”).  Pursuant to the 901 Lease, Tenant leases from Landlord certain premises consisting of approximately 110,428 rentable square feet (the “901 Premises”) comprising the building located at 901 Gateway Boulevard, South San Francisco, California 94080.
		

		
			Landlord and Tenant desire, subject to the terms and conditions set forth below, to amend the Lease to, among other things, (i) expand the Current Premises to include the entire second floor of the Building, consisting of approximately 19,988 rentable square feet, as shown on Exhibit A attached hereto (the “Second Expansion Premises”), (ii) extend the Term of the Lease, and (iii) provide for the construction of certain improvements in the Premises by Tenant.
		

		
			NOW, THEREFORE, in consideration of the foregoing Recitals, which are incorporated herein by this reference, the mutual promises and conditions contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree as follows:
		

		
			1.          Second Expansion Premises.  In addition to the Current Premises, commencing on the Second Expansion Premises Commencement Date (as defined below), Landlord leases to Tenant, and Tenant leases from Landlord, the Second Expansion Premises.
		

		
			2.          Delivery.  Landlord shall use reasonable good faith efforts to deliver the Second Expansion Premises to Tenant (i) free of all tenancies and the prior tenants’ furniture, fixtures and equipment, and (ii) and in broom clean condition (“Delivery” or “Deliver”) the Second Expansion Premises to Tenant on or before June 1, 2018 (the “Target Second Expansion Premises Commencement Date”).  If Landlord fails to Deliver the Second Expansion Premises on or before the Target Second Expansion Premises Commencement Date, Landlord shall not be liable to Tenant for any loss or damage resulting therefrom, and the Lease shall not be void or voidable. Notwithstanding anything to the contrary contained herein, if Landlord fails to Deliver the Second Expansion Premises to Tenant (i) by the date that is 60 days after the Target Second Expansion Premises Commencement Date (as such date may be extended for Force Majeure delays) (“Initial Abatement Date”), Monthly Base Rent due with respect to the Second Expansion 
		

		
			
		

		
			

		 

		

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			Premises only shall be abated 1 day for each day after the Initial Abatement Date (as such date may be extended for Force Majeure delays) that Landlord fails to Deliver the Second Expansion Premises to Tenant, and (ii) by the date that is 90 days after the Target Second Expansion Premises Commencement Date (as such date may be extended for Force Majeure delays) (“Second Abatement Date”), Monthly Base Rent due with respect to the Second Expansion Premises only shall be abated 2 days for each day after the Second Abatement Date (as such date may be extended for Force Majeure delays) that Landlord fails to Deliver the Second Expansion Premises to Tenant. The abatement of Monthly Base Rent provided for in this paragraph shall be in addition to the abatement of Monthly Base Rent provided for in the immediately following paragraph during the period between the Second Expansion Premises Commencement Date and the Second Expansion Premises Rent Commencement Date.
		

		
			The “Second Expansion Premises Commencement Date”  shall be the date that Landlord Delivers the Second Expansion Premises to Tenant in broom clean condition and free of all other tenants and occupants, provided, that in no event shall the Second Expansion Premises Commencement Date occur prior to January 1, 2018.  The “Second Expansion Premises Rent Commencement Date” shall be January 1, 2019; provided, however, that the Second Expansion Premises Rent Commencement Date shall be delayed 1 day for each day after June 1, 2018, that Landlord fails to deliver the Second Expansion Premises to Tenant.  Upon the request of Landlord, Tenant shall execute and deliver a written acknowledgment of the Second Expansion Premises Commencement Date and the expiration date of the Lease in the form of the “Acknowledgement of Commencement Date” attached to the Third Amendment as Exhibit B;  provided,  however, Tenant’s failure to execute and deliver such acknowledgment shall not affect Landlord’s or Tenant’s rights hereunder.
		

		
			Prior to the Second Expansion Premises Commencement Date, Landlord shall, subject to Landlord’s standard non-reliance letter, deliver to Tenant a copy of any documents prepared in connection with the surrender of the Second Expansion Premises by the immediately prior tenants of the Second Expansion Premises.  Landlord shall use reasonable good faith efforts to require the immediately prior tenants to comply with the surrender requirements in their respective leases.  Tenant shall have the right, at Tenant’s sole cost and expense and upon reasonable prior written notice to Landlord, to perform non-invasive environmental testing in the Second Premises prior to the Second Expansion Premises Commencement Date.
		

		
			Notwithstanding anything to the contrary in the Lease or this Fourth Amendment, Landlord shall cause, at Landlord’s sole cost and expense (provided that nothing herein shall preclude Landlord from pursuing any prior tenants or third parties for reimbursement of such costs), the remediation, to the extent required by Legal Requirements, of Hazardous Materials not caused by Tenant or any Tenant Party requiring remediation pursuant to Legal Requirements discovered in the Second Expansion Premises on or before the date that is 90 days after the Second Expansion Premises Commencement Date.
		

		
			Except as otherwise set forth in this Fourth Amendment: (i) Tenant shall accept the Second Expansion Premises in their “as-is” condition as of the Second Expansion Premises Commencement Date; (ii) Landlord shall have no obligation for any defects in the Second Expansion Premises; and (iii) Tenant’s taking possession of the Second Expansion Premises shall be conclusive evidence that Tenant accepts the Second Expansion Premises and that the Second Expansion Premises were in good condition at the time possession was taken.
		

		
			Tenant agrees and acknowledges that, except as otherwise set forth in this Fourth Amendment, neither Landlord nor any agent of Landlord has made any representation or warranty with respect to the condition of all or any portion of the Second Expansion Premises, and/or the suitability of the Second Expansion Premises for the conduct of Tenant’s business, and Tenant waives any implied warranty that the Second Expansion Premises are suitable for the Permitted Use.
		

		
			
		

		
			

		 

		

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			3.          Premises.  Notwithstanding anything to the contrary contained in the Lease, commencing on the Second Expansion Premises Commencement Date, the definition of “Premises” shall be amended to mean the Third Floor Premises, the Expansion Premises and the Second Expansion Premises.
		

		
			As of the Second Expansion Premises Commencement Date, Exhibit A attached to the Third Amendment shall be amended to include the Second Expansion Premises as shown Exhibit A attached to this Fourth Amendment.
		

		
			4.          Premises Square Footage.  Commencing on the Second Expansion Premises Commencement Date, the definition of “Premises Square Footage” contained in the Basic Lease Information shall be deleted and replaced with the following:
		

		
			“Premises Square Footage:  59,816 rentable square feet”
		

		
			5.          Tenant’s Proportionate Share.  Commencing on the Second Expansion Premises Commencement Date, the definitions of “Tenant’s Proportionate Share of Project” and “Tenant’s Proportionate Share of Building” contained in the Basic Lease Information shall be deleted and replaced with the following:
		

		
			“Tenant’s Proportionate Share of Project:  100%
		

		
			Tenant’s Proportionate Share of Building:  100%”
		

		
			Notwithstanding anything to the contrary contained in the Lease, Tenant shall commence paying Additional Rent with respect to the Second Expansion Premises on the earlier to occur of (i) the Second Expansion Premises Rent Commencement Date (as that date may be extended pursuant to Section 2 above), and (ii) the date that Tenant commences doing business in all or any portion of the Second Expansion Premises.
		

		
			6.          Term.  The “Expiration Date” of the Term of the Lease is hereby extended from June 1, 2020, (the “Extension Term Commencement Date”), until May 31, 2030 (the “Extension Term Expiration Date”).  From and after the Effective Date, references in the Lease to “Term” shall mean the two hundred forty (240) months commencing on June 1, 2010, and expiring on the Extension Term Expiration Date.
		

		
			7.          Monthly Base Rent.
		

		
			a.          Current Premises.  Notwithstanding anything to the contrary contained herein, Tenant shall continue to pay Monthly Base Rent with respect to the Current Premises as provided in the Lease through May 31, 2020.
		

		
			b.          Second Expansion Premises.  Commencing on the Second Expansion Premises Rent Commencement Date through May 31, 2020, Tenant shall commence paying Monthly Base Rent with respect to the Second Expansion Premises at the same monthly amount per rentable square foot then being paid with respect to the Current Premises, as the same may be adjusted pursuant to the terms of the Lease.
		

		
			c.           Extension Term.  Commencing on the Extension Term Commencement Date, Monthly Base Rent with respect to the entire Premises shall be payable pursuant to the following table:
		

		
			
		

		

		 

		

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						Time Period

					
					
						    

					
					
						Monthly Rent PSF

					
					
						    

					
					
						Monthly Base Rent

				
	
					
						6/1/20 – 9/30/20

					
					
						 

					
					
						$ 0.00

					
					
						 

					
					
						$ 0 per month*

				
	
					
						10/1/20 – 5/31/21

					
					
						 

					
					
						$ 4.35

					
					
						 

					
					
						$ 260,199.60 per month

				
	
					
						6/1/21 – 5/31/22

					
					
						 

					
					
						$ 4.48

					
					
						 

					
					
						$ 267,975.68 per month

				
	
					
						6/1/22 – 5/31/23

					
					
						 

					
					
						$ 4.61

					
					
						 

					
					
						$ 275,751.76 per month

				
	
					
						6/1/23 – 5/31/24

					
					
						 

					
					
						$ 4.75

					
					
						 

					
					
						$ 284,126.00 per month

				
	
					
						6/1/24 – 5/31/25

					
					
						 

					
					
						$ 4.89

					
					
						 

					
					
						$ 292,500.24 per month

				
	
					
						6/1/25 – 5/31/26

					
					
						 

					
					
						$ 5.04

					
					
						 

					
					
						$ 301,472.64 per month

				
	
					
						6/1/26 – 5/31/27

					
					
						 

					
					
						$ 5.19

					
					
						 

					
					
						$ 310,445.04 per month

				
	
					
						6/1/27 – 5/31/28

					
					
						 

					
					
						$ 5.35

					
					
						 

					
					
						$ 320,001.56 per month

				
	
					
						6/1/28 – 5/31/29

					
					
						 

					
					
						$ 5.51

					
					
						 

					
					
						$ 329,586.16 per month

				
	
					
						6/1/29 – 5/31/30

					
					
						 

					
					
						$ 5.68

					
					
						 

					
					
						$ 339,754.88 per month

				

		
			 
		

		
			*For the avoidance of doubt, Tenant shall be required to pay the management fee payable by Tenant pursuant Section 4.2 of the original Lease during this period based on the amount of Monthly Base Rent that would have been payable during this period had the Monthly Base Rent not been abated (i.e., Monthly Base Rent in the amount of $260,199.60 per month).
		

		
			8.          Fourth Amendment Tenant Improvements.  Tenant shall have the right to construct certain tenant improvements in the Premises (the “Fourth Amendment Tenant Improvements”) subject to the terms of the Fourth Amendment Work Letter attached hereto as Exhibit A.  Commencing on the Effective Date, Landlord shall make the TI Allowance (as defined in the Fourth Amendment Work Letter) available to Tenant for the design and construction of the Fourth Amendment Tenant Improvements. Notwithstanding anything to the contrary contained in the Lease, Tenant shall not be required to remove the Fourth Amendment Tenant Improvements from the Premises at the expiration or earlier termination of the Term, nor shall Tenant have any right to remove the Fourth Amendment Tenant Improvements at any time during the Term.
		

		
			9.          Additional Tenant Improvement Allowance.  In addition to the Tenant Improvement Allowance (as defined in the Fourth Amendment Work Letter), commencing on the Effective Date, Landlord shall, subject to the terms of the Fourth Amendment Work Letter, also make available to Tenant the Additional Tenant Improvement Allowance (as defined in the Fourth Amendment Work Letter).  Commencing on the first day of the month following the date that Landlord first disburses all or a portion of the Additional Tenant Improvement Allowance, and continuing thereafter on the first day of each month of the Term through the Extension Term Expiration Date, Tenant, as Additional Rent, shall pay the amount necessary to fully amortize the portion of the Additional Tenant Improvement Allowance actually funded by Landlord, if any, in equal monthly payments with interest at a rate of 8% per annum through the Extension Term Expiration Date, which interest shall begin to accrue on the date that Landlord first disburses the applicable portion of such Additional Tenant Improvement Allowance.  Any of the Additional Tenant Improvement Allowance and applicable interest remaining unpaid as of the expiration or earlier termination of the Lease shall be paid to Landlord in a lump sum at the expiration or earlier termination of this Lease. For the avoidance of doubt, the Additional Tenant Improvement Allowance does not constitute Monthly Base Rent under the Lease shall not be included in determining the annual three percent (3%) increases in Monthly Base Rent.
		

		
			10.        Option to Renew.  Tenant shall continue to have two (2) options (each a “Renewal Option”) to extend the term of the Lease with respect to the entire Premises for successive periods of five (5) years each (each a “Renewal Term”) pursuant to the provisions of Paragraph 49 of the Lease (as amended by Section 18 of the First Amendment).
		

		
			11.        Additional Rent.  The final paragraph of Section 4.2  of the Lease is hereby deleted in its entirety and replaced with the following:
		

		
			
		

		
			

		 

		

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			“Notwithstanding anything in this Paragraph 4.2 to the contrary, (i) Tenant shall not be responsible for the payment of any Expenses which relate to or benefit solely another building within the Project occupied or intended to be occupied by other tenants or for which Landlord receives full reimbursement from other tenants, and (ii) with respect to all sums payable by Tenant as Additional Rent under this Paragraph 4.2 for the replacement of any item or the construction of any new item in connection with the physical operation of the Premises, the Building or the Project (i.e., HVAC, roof membrane or coverings and parking area) or as required by applicable Laws (including , without limitation, ADA) which is a capital item the replacement of which would be capitalized under generally accepted accounting principles consistently applied, Tenant shall be required to pay its pro rata share of the cost of the item falling due within the Term (including any Renewal Term) based upon the amortization of the same over the useful life of such item, as reasonably determined by Landlord.  Such pro rata share shall be paid by Tenant on a monthly basis throughout the Term (rather than in a lump sum when incurred by Landlord).”
		

		
			12.        Compliance with Laws.  To the extent that alterations or modifications to the Building exterior, path of travel outside the Building or Building access existing as of the date of the Fourth Amendment (collectively, “Triggered Improvements”) are triggered by Tenant’s performance of the Fourth Amendment Tenant Improvements, the cost of the Triggered Improvements shall be paid for by Landlord as part of Expenses under the Lease, and Tenant shall be required to pay its pro rata share of the cost of the Triggered Improvements on a monthly basis (on the same day that Monthly Base Rent is due) over the remaining balance of the Term.
		

		
			13.        Encumbrances.  As of the Effective Date, there are no existing Encumbrances encumbering the Project.
		

		
			14.        Brokers.  Landlord and Tenant each represents and warrants that it has not dealt with any broker, agent or other person (collectively, “Broker”) in connection with this Fourth Amendment and that no Broker brought about this transaction, other than CBRE.  Landlord and Tenant each hereby agree to indemnify and hold the other harmless from and against any claims by any Broker, other than the broker, if any named in this Section 6, claiming a commission or other form of compensation by virtue of having dealt with Tenant or Landlord, as applicable, with regard to this Fourth Amendment.  Landlord shall pay any commission due to CBRE in connection with this Fourth Amendment pursuant to a separate written agreement between Landlord and CBRE.
		

		
			15.        OFAC.  To Tenant’s knowledge, without any duty of inquiry, as of the date of Tenant’s execution of this Fourth Amendment, Tenant is currently (a) in compliance with and shall at all times during the Term of the Lease remain in compliance with the regulations of the Office of Foreign Assets Control (“OFAC”) of the U.S. Department of Treasury and any statute, executive order, or regulation relating thereto (collectively, the “OFAC Rules”), (b) not listed on, and shall not during the term of the Lease be listed on, the Specially Designated Nationals and Blocked Persons List, Foreign Sanctions Evaders List or the Sectoral Sanctions Identifications List, which are all maintained by OFAC and/or on any other similar list maintained by OFAC or other governmental authority pursuant to any authorizing statute, executive order, or regulation, and (c) not a person or entity with whom a U.S. person is prohibited from conducting business under the OFAC Rules.
		

		
			16.        California Accessibility Disclosure.  For purposes of Section 1938(a) of the California Civil Code, Landlord hereby discloses to Tenant, and Tenant hereby acknowledges, that the Project has not undergone inspection by a Certified Access Specialist (CASp).  In addition, the following notice is hereby provided pursuant to Section 1938(e) of the California Civil Code:  “A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibility standards under state law.  Although state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or 
		

		
			
		

		
			

		 

		

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			tenant, if requested by the lessee or tenant.  The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the premises.”  In furtherance of and in connection with such notice:  (i) Tenant, having read such notice and understanding Tenant’s right to request and obtain a CASp inspection, hereby elects not to obtain such CASp inspection and forever waives its rights to obtain a CASp inspection with respect to the Premises, Building and/or Project to the extent permitted by Legal Requirements; and (ii) if the waiver set forth in clause (i) hereinabove is not enforceable pursuant to Legal Requirements, then Landlord and Tenant hereby agree as follows (which constitute the mutual agreement of the parties as to the matters described in the last sentence of the foregoing notice):  (A) Tenant shall have the one-time right to request for and obtain a CASp inspection, which request must be made, if at all, in a written notice delivered by Tenant to Landlord; (B) any CASp inspection timely requested by Tenant shall be conducted (1) at a time mutually agreed to by Landlord and Tenant, (2) in a professional manner by a CASp designated by Landlord and without any testing that would damage the Premises, Building or Project in any way, and (3) at Tenant’s sole cost and expense, including, without limitation, Tenant’s payment of the fee for such CASp inspection, the fee for any reports prepared by the CASp in connection with such CASp inspection (collectively, the “CASp Reports”) and all other costs and expenses in connection therewith; (C) the CASp Reports shall be delivered by the CASp simultaneously to Landlord and Tenant; (D) Tenant, at its sole cost and expense, shall be responsible for making any improvements, alterations, modifications and/or repairs to or within the Premises to correct violations of construction-related accessibility standards including, without limitation, any violations disclosed by such CASp inspection; and (E) if such CASp inspection identifies any improvements, alterations, modifications and/or repairs necessary to correct violations of construction-related accessibility standards relating to those items of the Building and Project located outside the Premises that are Landlord’s obligation to repair as set forth in the Lease, then Landlord shall perform such improvements, alterations, modifications and/or repairs as and to the extent required by Legal Requirements to correct such violations, and Tenant shall reimburse Landlord for the cost of such improvements, alterations, modifications and/or repairs within 30 days after Tenant’s receipt of an invoice therefor from Landlord.
		

		
			17.        Miscellaneous.
		

		
			a.          This Fourth Amendment is the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous oral and written agreements and discussions.  This Fourth Amendment may be amended only by an agreement in writing, signed by the parties hereto.
		

		
			b.          This Fourth Amendment is binding upon and shall inure to the benefit of the parties hereto, their respective agents, employees, representatives, officers, directors, divisions, subsidiaries, affiliates, assigns, heirs, successors in interest and shareholders.
		

		
			c.          Landlord and Tenant each acknowledge that it has read the provisions of this Fourth Amendment, understands them, and is bound by them. Time is of the essence in this Fourth Amendment.
		

		
			d.          This Fourth Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which when taken together shall constitute one and the same instrument.  The signature page of any counterpart may be detached therefrom without impairing the legal effect of the signature(s) thereon provided such signature page is attached to any other counterpart identical thereto except having additional signature pages executed by other parties to this Fourth Amendment attached thereto.
		

		
			
		

		
			

		 

		

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			e.          Except as amended and/or modified by this Fourth Amendment, the Lease is hereby ratified and confirmed and all other terms of the Lease shall remain in full force and effect, unaltered and unchanged by this Fourth Amendment.  In the event of any conflict between the provisions of this Fourth Amendment and the provisions of the Lease, the provisions of this Fourth Amendment shall prevail.  Whether or not specifically amended by this Fourth Amendment, all of the terms and provisions of the Lease are hereby amended to the extent necessary to give effect to the purpose and intent of this Fourth Amendment.
		

		
			f.           Commencing on June 1, 2020, Innoviva, Inc., a Delaware corporation formerly known as Theravance, Inc., the original tenant under the Lease, is excused from any obligations under the Lease first arising after May 31, 2020, excepting only the payment of Monthly Base Rent, Additional Rent and other amounts under the Lease coming due prior to June 1, 2020, and such other obligations arising under the Lease which would survive a termination of the Lease if the Lease were to terminate on May 31, 2020.
		

		
			[Signatures are on the next page.]
		

		
			
		

		
			

		 

		

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			IN WITNESS WHEREOF, the parties hereto have executed this Fourth Amendment as of the day and year first above written.
		

			
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						TENANT:

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						THERAVANCE BIOPHARMA US, INC.,

				
	
					
						 

					
					
						a Delaware corporation

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						/s/ Renee Gala

				
	
					
						 

					
					
						Its:

					
					
						SVP & Chief Financial Officer

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						LANDLORD:

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						ARE-901/951 GATEWAY BOULEVARD, LLC,

				
	
					
						 

					
					
						a Delaware limited liability company

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:  ALEXANDRIA REAL ESTATE EQUITIES, L.P.,

				
	
					
						 

					
					
						       a Delaware limited partnership, 

				
	
					
						 

					
					
						       managing member

				
	
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						ARE-QRS CORP.,

				
	
					
						 

					
					
						 

					
					
						a Maryland corporation,

				
	
					
						 

					
					
						 

					
					
						general partner

				
	
					
						 

					
					
						 

					
					
						 

				
	
					
						 

					
					
						By:

					
					
						/s/ Eric S. Johnson

				
	
					
						 

					
					
						Its:

					
					
						Senior Vice President, RE Legal Affairs

				

		
			 
		

		
			 
		

		
			

		 

		

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			Exhibit A
		

		
			Second Expansion Premises
		

		
			 
		

		
			

		 

		

			A-1

		

		

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			Exhibit B
		

		
			Fourth Amendment Work Letter
		

		
			THIS FOURTH AMENDMENT WORK LETTER (this “Fourth Amendment Work Letter”) is incorporated into that certain Lease Agreement dated January 1, 2001, as amended by that certain First Amendment to Lease dated as of June 1, 2010, as further amended by that certain Second Amendment to Lease dated as of October 1, 2010, as further amended by that certain Third Amendment to Lease dated as of September 27, 2013, and as further amended by that certain Fourth Amendment to Lease dated of even date herewith (the “Fourth Amendment”) (as amended, the “Lease”) by and between ARE-901/951 GATEWAY BOULEVARD, LLC, a Delaware limited liability company (“Landlord”), and THERAVANCE BIOPHARMA US, INC., a Delaware corporation (“Tenant”).  Any initially capitalized terms used but not defined herein shall have the meanings given them in the Lease.
		

		
			1.          General Requirements.
		

		
			(a)         Tenant’s Authorized Representative.  Tenant designates Jeffrey Lang (“Tenant’s Representative”) as the only person authorized to act for Tenant pursuant to this Second Amendment Work Letter.  Landlord shall not be obligated to respond to or act upon any request, approval, inquiry or other communication (“Communication”) from or on behalf of Tenant in connection with this Fourth Amendment Work Letter unless such Communication is in writing from Tenant’s Representative.  Tenant may change Tenant’s Representative at any time upon not less than 5 business days advance written notice to Landlord.
		

		
			(b)         Landlord’s Authorized Representative.  Landlord designates Hong Leahy and Greg Gehlen (either such individual acting alone, “Landlord’s Representative”) as the only persons authorized to act for Landlord pursuant to this Fourth Amendment Work Letter.  Tenant shall not be obligated to respond to or act upon any request, approval, inquiry or other Communication from or on behalf of Landlord in connection with this Fourth Amendment Work Letter unless such Communication is in writing from Landlord’s Representative.  Landlord may change either Landlord’s Representative at any time upon not less than 5 business days advance written notice to Tenant.
		

		
			(c)         Architects, Consultants and Contractors.  Landlord and Tenant hereby acknowledge and agree that the architect (the “TI Architect”) for the Fourth Amendment Tenant Improvements (as defined in Section 2(a) below), the general contractor and any subcontractors for the Fourth Amendment Tenant Improvements shall be selected by Tenant, subject to Landlord’s approval, which approval shall not be unreasonably withheld, conditioned or delayed.  Landlord shall be named a third party beneficiary of any contract entered into by Tenant with the TI Architect, any consultant, any contractor or any subcontractor, and of any warranty made by any contractor or any subcontractor.
		

		
			2.          Fourth Amendment Tenant Improvements.
		

		
			(a)         Fourth Amendment Tenant Improvements Defined.  As used herein, “Fourth Amendment Tenant Improvements” shall mean all improvements to the Premises desired by Tenant of a fixed and permanent nature. Notwithstanding anything to the contrary contained in this Fourth Amendment Work Letter, the Fourth Amendment Tenant Improvements may include LED lighting required to comply with California Title 24 requirements imposed on the Project and associated wiring.   The Fourth Amendment Tenant Improvements shall include the replacement of the roof of the Building and the replacement of the rooftop Building HVAC systems and controls.  The Fourth Amendment Tenant Improvements may, but are not required to, also include the components set forth on Schedule 1 attached hereto.  Notwithstanding anything to the contrary contained in the Lease including, without limitation, the Fourth Amendment, other than funding the TI Allowance (as defined below) as provided herein, Landlord shall not have any obligation whatsoever with respect to paying for the Fourth Amendment Tenant Improvements or otherwise finishing of the Premises for Tenant’s use and 
		

		
			
		

		
			

		 

		

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			occupancy. Landlord and Tenant acknowledge that the Fourth Amendment Tenant Improvements may be constructed in multiple phases, and that the TI Design Drawings and TI Construction Drawings may be submitted to Landlord for approval pursuant to Sections 2(b) and 2(c) below, respectively, on a phase-by-phase basis.
		

		
			(b)         Tenant’s Space Plans.  Tenant shall deliver to Landlord schematic drawings and outline specifications (the “TI Design Drawings”) detailing Tenant’s requirements for the Fourth Amendment Tenant Improvements.  Not more than 10 days thereafter, Landlord shall deliver to Tenant the written objections, questions or comments of Landlord with regard to the TI Design Drawings.  Tenant shall cause the TI Design Drawings to be revised to address such written comments and shall resubmit said drawings to Landlord for approval within 10 days thereafter.  Such process shall continue until Landlord has approved the TI Design Drawings.  Landlord’s approval of the TI Design Drawings shall not be unreasonably withheld, conditioned or delayed.
		

		
			(c)         Working Drawings.  Within a reasonable period following the approval of the TI Design Drawings by Landlord, Tenant shall cause the TI Architect to prepare and deliver to Landlord for review and comment construction plans, specifications and drawings for the Fourth Amendment Tenant Improvements (“TI Construction Drawings”), which TI Construction Drawings shall be prepared substantially in accordance with the TI Design Drawings.  Tenant shall be solely responsible for ensuring that the TI Construction Drawings reflect Tenant’s requirements for the Fourth Amendment Tenant Improvements.  Landlord shall deliver its written comments on the TI Construction Drawings to Tenant not later than 10 business days after Landlord’s receipt of the same; provided, however, that Landlord may not disapprove any matter that is consistent with the TI Design Drawings.  Tenant and the TI Architect shall consider all such comments in good faith and shall, within 10 business days after receipt, notify Landlord how Tenant proposes to respond to such comments.  Any disputes in connection with such comments shall be resolved in accordance with Section 2(d) hereof.  Provided that the design reflected in the TI Construction Drawings is consistent with the TI Design Drawings, Landlord shall approve the TI Construction Drawings submitted by Tenant.  Once approved by Landlord, subject to the provisions of Section 4 below, Tenant shall not materially modify the TI Construction Drawings except as may be reasonably required in connection with the issuance of the TI Permit (as defined in Section 3(a) below).  Landlord’s approval of the TI Construction Drawings shall not be unreasonably, withheld, conditioned or delayed.
		

		
			(d)         Approval and Completion.  If any dispute regarding the design of the Fourth Amendment Tenant Improvements is not settled within 10 business days after notice of such dispute is delivered by one party to the other, Tenant may make the final decision regarding the design of the Fourth Amendment Tenant Improvements, provided (i) Tenant acts reasonably and such final decision is either consistent with or a compromise between Landlord’s and Tenant’s positions with respect to such dispute, and (ii) that all costs and expenses resulting from any such decision by Tenant shall be payable out of the TI Fund (as defined in Section 5(d) below).  Any changes to the TI Construction Drawings following Landlord’s and Tenant’s approval of same requested by Tenant shall be processed as provided in Section 4 hereof.
		

		
			3.          Performance of the Fourth Amendment Tenant Improvements.
		

		
			(a)         Commencement and Permitting of the Fourth Amendment Tenant Improvements.  Tenant shall commence construction of the Fourth Amendment Tenant Improvements upon obtaining and delivering to Landlord a building permit (the “TI Permit”) authorizing the construction of the Fourth Amendment Tenant Improvements consistent with the TI Construction Drawings approved by Landlord.  The cost of obtaining the TI Permit shall be payable from the TI Fund.  Landlord shall assist Tenant in obtaining the TI Permit.  Prior to the commencement of the Fourth Amendment Tenant Improvements, Tenant shall deliver to Landlord a copy of any contract with Tenant’s contractors (including the TI Architect), and certificates of insurance from any contractor performing any part of the Tenant Improvement evidencing industry standard commercial general liability, automotive liability, “builder’s 
		

		
			
		

		
			

		 

		

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			risk”, and workers’ compensation insurance.  Tenant shall cause the general contractor to provide a certificate of insurance naming Landlord, Alexandria Real Estate Equities, Inc., and Landlord’s lender (if any) as additional insureds for the general contractor’s liability coverages required above.
		

		
			(b)         Selection of Materials, Etc.  Where more than one type of material or structure is indicated on the TI Construction Drawings approved by Tenant and Landlord, the option will be within Tenant’s reasonable discretion if the matter concerns the Fourth Amendment Tenant Improvements, and within Landlord’s sole and absolute subjective discretion if the matter concerns the structural components of the Building or any Building system.
		

		
			(c)         Tenant Liability.  Tenant shall be responsible for correcting any deficiencies or defects in the Fourth Amendment Tenant Improvements.
		

		
			(d)         Substantial Completion.  Tenant shall substantially complete or cause to be substantially completed the Fourth Amendment Tenant Improvements in a good and workmanlike manner, in accordance with the TI Permit subject, in each case, to Minor Variations and normal “punch list” items of a non-material nature which do not interfere with the use of the Premises (“Substantial Completion” or “Substantially Complete”).  Upon Substantial Completion of the Fourth Amendment Tenant Improvements, Tenant shall require the TI Architect and the general contractor to execute and deliver, for the benefit of Tenant and Landlord, a Certificate of Substantial Completion in the form of the American Institute of Architects (“AIA”) document G704.  For purposes of this Fourth Amendment Work Letter, “Minor Variations” shall mean any modifications reasonably required:  (i) to comply with all applicable Legal Requirements and/or to obtain or to comply with any required permit (including the TI Permit); (ii) to comport with good design, engineering, and construction practices which are not material; or (iii) to make reasonable adjustments for field deviations or conditions encountered during the construction of the Fourth Amendment Tenant Improvements.
		

		
			4.          Changes.  Any changes requested by Tenant to the Fourth Amendment Tenant Improvements after the delivery and approval by Landlord of the TI Design Drawings, shall be requested and instituted in accordance with the provisions of this Section 4 and shall be subject to the written approval of Landlord, which approval shall not be unreasonably withheld, conditioned or delayed.
		

		
			(a)         Tenant’s Right to Request Changes.  If Tenant shall request changes (“Changes”), Tenant shall request such Changes by notifying Landlord in writing in substantially the same form as the AIA standard change order form (a “Change Request”), which Change Request shall detail the nature and extent of any such Change.  Such Change Request must be signed by Tenant’s Representative.  Landlord shall review and approve or disapprove such Change Request within 10 business days thereafter, provided that Landlord’s approval shall not be unreasonably withheld, conditioned or delayed.
		

		
			(b)         Implementation of Changes.  If Landlord approves such Change and Tenant deposits with Landlord any Excess TI Costs (as defined in Section 5(d) below) required in connection with such Change, Tenant may cause the approved Change to be instituted.  If any TI Permit modification or change is required as a result of such Change, Tenant shall promptly provide Landlord with a copy of such TI Permit modification or change.
		

		
			5.          Costs.
		

		
			(a)         Budget For Fourth Amendment Tenant Improvements.  Before the commencement of construction of the Fourth Amendment Tenant Improvements, Tenant shall obtain a detailed breakdown, by trade, of the costs incurred or that will be incurred, in connection with the design and construction of the Fourth Amendment Tenant Improvements (the “Budget”), and deliver a copy of the Budget to Landlord for Landlord’s approval, which shall not be unreasonably withheld, conditioned or delayed.  The Budget shall include a payment to Landlord of administrative rent (“Administrative Rent”) equal to the out-of-pocket costs incurred by Landlord in connection with Landlord’s review of the TI Design Drawings, 
		

		
			
		

		
			

		 

		

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			the TI Construction Drawings and any Changes, which sum shall be payable from the TI Fund.  If the Budget is greater than the TI Allowance, Tenant shall deposit with Landlord the difference, in cash, prior to the commencement of construction of the Fourth Amendment Tenant Improvements, for disbursement by Landlord as described in Section 5(d).
		

		
			(b)         TI Allowance.  Landlord shall provide to Tenant a tenant improvement allowance (collectively, the “TI Allowance”) as follows:
		

		
			1.          a “Tenant Improvement Allowance” in the maximum amount of $115.00 per rentable square foot in the Premises, or $6,878,840.00 in the aggregate for the Premises, which is included in the Base Rent set forth in the Lease; and
		

		
			2.          an “Additional Tenant Improvement Allowance” in the maximum amount of $30.00 per rentable square foot in the Premises, or $1,794,480.00 in the aggregate for the Premises, which shall, to the extent used, result in additional Rent as set forth in the Fourth Amendment.
		

		
			The TI Allowance shall be disbursed in accordance with this Fourth Amendment Work Letter.
		

		
			Tenant shall have no right to the use or benefit (including any reduction to Base Rent) of any portion of the TI Allowance not required for the construction of (i) the Fourth Amendment Tenant Improvements described in the TI Construction Drawings approved pursuant to Section 2(d) or (ii) any Changes pursuant to Section 4.  Tenant shall have no right to any portion of the TI Allowance that is not disbursed before May 31, 2022.  Notwithstanding anything to the contrary contained in the Fourth Amendment or this Fourth Amendment Work Letter, Tenant may elect by written notice to Landlord to apply a portion of the TI Allowance to the cost of the Second Amendment Tenant Improvements (as defined in the Second Amendment to 901 Lease) in which event the amount of the TI Allowance available to Tenant for the TI Costs incurred by Tenant with respect to the Fourth Amendment Tenant Improvements shall be ratably reduced.
		

		
			(c)         Costs Includable in TI Fund.  The TI Fund shall be used solely for the payment of design, permits and construction costs in connection with the construction of the Fourth Amendment Tenant Improvements, including, without limitation, the cost of electrical power and other utilities used in connection with the construction of the Fourth Amendment Tenant Improvements, the cost of preparing the TI Design Drawings and the TI Construction Drawings, all costs set forth in the Budget, including Landlord’s Administrative Rent, and the cost of Changes (collectively, “TI Costs”).  Notwithstanding anything to the contrary contained herein, other than as provided in the immediately following sentence, the TI Fund shall not be used to purchase any furniture, personal property or other non-Building system materials or equipment, including, but not be limited to, Tenant’s voice or data cabling, non-ducted biological safety cabinets and other scientific equipment not incorporated into the Fourth Amendment Tenant Improvements.  Notwithstanding anything to the contrary contained in this Fourth Amendment Work Letter, Tenant may use a portion of the TI Allowance for the cost of Tenant’s work stations and cubicles in the Premises and related cabling and wiring.
		

		
			(d)         Excess TI Costs.  Landlord shall have no obligation to bear any portion of the cost of any of the Fourth Amendment Tenant Improvements except to the extent of the TI Allowance.  If at any time and from time-to-time, the remaining TI Costs under the Budget exceed the remaining unexpended TI Allowance (“Excess TI Costs”), monthly disbursements of the TI Allowance shall be made in the proportion that the remaining TI Allowance bears to the outstanding TI Costs under the Budget, and Tenant shall fund the balance of each such monthly draw.  The TI Allowance and Excess TI Costs is herein referred to as the “TI Fund.”  Notwithstanding anything to the contrary set forth in this Section 5(d), Tenant shall be fully and solely liable for TI Costs and the cost of Minor Variations in excess of the TI Allowance.
		

		
			
		

		
			

		 

		

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			(e)         Payment for TI Costs.  During the course of design and construction of the Fourth Amendment Tenant Improvements, Landlord shall reimburse Tenant for TI Costs once a month against a draw request in Landlord’s standard form, containing evidence of payment of such TI Costs by Tenant and such certifications, lien waivers (including a conditional lien release for each progress payment and unconditional lien releases for the prior month’s progress payments), inspection reports and other matters as Landlord customarily obtains, to the extent of Landlord’s reasonable good faith approval thereof for payment, no later than 30 days following receipt of such draw request.  Upon completion of the Fourth Amendment Tenant Improvements (and prior to any final disbursement of the TI Fund), Tenant shall deliver to Landlord:  (i) sworn statements setting forth the names of all contractors and first tier subcontractors who did the work and final, unconditional lien waivers from all such contractors and first tier subcontractors; (ii) as-built plans (one copy in print format and two copies in electronic CAD format) for such Fourth Amendment Tenant Improvements; (iii) a certification of substantial completion in Form AIA G704, (iv) a certificate of occupancy for the Premises; and (v) copies of all operation and maintenance manuals and warranties affecting the Premises.
		

		
			6.          Miscellaneous.
		

		
			(a)         Consents.  Whenever consent or approval of either party is required under this Fourth Amendment Work Letter, that party shall not unreasonably withhold, condition or delay such consent or approval, except as may be expressly set forth herein to the contrary.
		

		
			(b)         Modification.  No modification, waiver or amendment of this Fourth Amendment Work Letter or of any of its conditions or provisions shall be binding upon Landlord or Tenant unless in writing signed by Landlord and Tenant.
		

		
			(c)         No Default Funding.  In no event shall Landlord have any obligation to fund any portion of the TI Allowance during any period that Tenant is in Default under the Lease.
		

		
			
		

		
			

		 

		

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			Schedule 1 to Fourth Amendment Work Letter
		

		
			Optional Fourth Amendment Tenant Improvements
		

		
			1.    Replacement of the fire panel/alarm system
		

		
			2.    Replacement of the existing HVAC system duct work
		

		
			3.    New Building management systems
		

		
			4.    Restroom upgrades
		

		
			5.    New LED lighting throughout the Building
		

		
			6.    Repainting the exterior and interior of the Building
		

		
			7.    Window repair/caulking, as necessary
		

		
			8.    Renovation of the office areas to a more “pen” floor plan
		

		
			9.    Renovation of the lab [] areas
		

		
			10.  Additional Building entrances adjacent to parking areas
		

		
			11.  New furnishing/worsk stations, as necessary
		

		
			 
		

		
			 
		

		 

		

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			Copy or Distribute.Exhibit

        

Exhibit 10.1

SEVERANCE/CHANGE IN CONTROL AGREEMENT
THIS SEVERANCE/CHANGE IN CONTROL AGREEMENT (the “Agreement”), is made and entered into this ____ day of ________________, by and between Hanesbrands Inc., a Maryland corporation (the “Company”), and _________________ (“Executive”).
WHEREAS, Executive is an employee of Company, Company desires to foster the continuous employment of Executive and has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of Executive to his duties free from distractions which could arise in anticipation of an involuntary termination of employment or a Change in Control of Company;
NOW, THEREFORE, in consideration of the mutual agreements herein set forth, Company and Executive agree as follows:
1.Term and Nature of Agreement.  This Agreement shall commence on the date it is fully executed (“Execution Date”) by all parties and shall continue in effect unless the Company gives at least eighteen (18) months prior written notice that this Agreement will not be renewed.  In the event of such notice, this Agreement will expire on the next anniversary of the Execution Date that is at least eighteen (18) months after the date of such notice.  Notwithstanding the foregoing, if a Change in Control occurs during any term of this Agreement, the term of this Agreement shall be extended automatically for a period of twenty-four (24) months after the end of the month in which the Change in Control occurs.  Except to the extent otherwise provided, the parties intend for this Agreement to be construed and enforced as an unfunded welfare benefit plan under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), including without limitation the jurisdictional provisions of ERISA.
2.Involuntary Termination Benefits.  Executive shall be eligible for severance benefits upon an involuntary termination of employment under the terms and conditions specified in this section 2.
		
	(a)
	Eligibility for Severance. 

		
	(i)
	Eligible Terminations.  Subject to subparagraph (a)(ii) below, Executive shall be eligible for severance payments and benefits under this section 2 if his employment terminates under one of the following circumstances:

		
	(A)
	Executive’s employment is terminated involuntarily without Cause (defined in subparagraph 2(a)(ii)(A)); or 

		
	(B)
	Executive terminates his or her employment at the request of Company.

		
	(ii)
	Ineligible Terminations.  Notwithstanding subparagraph (a)(i) next above, Executive shall not be eligible for any severance payments or benefits under 

        

this section 2  if his employment  terminates under any of the following circumstances:
		
	(A)
	A termination for Cause.  For purposes of this Agreement, “Cause” means Executive has been convicted of (or pled guilty or no contest to) a felony or any crime involving fraud, embezzlement, theft, misrepresentation of financial impropriety; has willfully engaged in misconduct resulting in material harm to Company; has willfully failed to substantially perform duties after written notice; or is in willful violation of Company policies resulting in material harm to Company;

		
	(B)
	A termination as the result of Disability.  For purposes of this Agreement “Disability” shall mean a determination under Company’s disability plan covering Executive that Executive is disabled;

		
	(C)
	A termination due to death;

		
	(D)
	A termination due to Retirement.  For purposes of this Agreement “Retirement” shall mean Executive’s voluntary termination of employment on or after Executive’s attainment of the normal retirement age as defined in the Hanesbrands Inc. Pension and Retirement Plan (the “Retirement Plan”);

		
	(E)
	A voluntary termination of employment other than at the request of Company;

		
	(F)
	A termination following which Executive is immediately offered and accepts new employment with Company, or becomes a non-executive member of the Board;

		
	(G)
	The transfer of Executive’s employment to a subsidiary or affiliate of Company with his consent;

		
	(H)
	A termination of employment that qualifies Executive to receive severance payments or benefits under section 3 below following a Change in Control; or

		
	(I)
	Any other termination of employment under circumstances not described in subparagraph 2(a)(i).

		
	(iii)
	Characterization of Termination.  The characterization of Executive’s termination shall be made by the Committee (as defined in section 5 below) which determination shall be final and binding.

		
	(iv)
	Termination Date.  For purposes of this section 2, Executive’s “Termination Date” shall mean the date specified in the separation and release agreement described under section 2(e) below.

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	(b)
	Severance Benefits Payable.  If Executive is terminated under circumstances described in subparagraph 2(a)(i), and not described in subparagraph 2(a)(ii), then in lieu of any benefits payable under any other severance plan of the Company of any type and in consideration of the separation and release agreement and the covenants contained herein, the following shall apply:

		
	(i)
	Executive shall be entitled to receive his Base Salary (the “Salary Portion of Severance”) during the “Severance Period,” payable as provided in section 2(c).  The “Severance Period” shall mean the number of months determined by multiplying the number of Executive’s full years of employment with Company or any subsidiary or affiliate of Company (including periods of employment with Sara Lee Corporation) by two; provided, however, that in no event shall the Severance Period be less than twelve months or more than twenty-four months.  “Base Salary” shall mean the annual salary in effect for Executive immediately prior to his Termination Date.  At the discretion of the Committee, Executive may receive an additional salary portion in an amount equal to as much as 100% of Executive’s target bonus under the Annual Incentive Plan.  

		
	(ii)
	Executive shall receive a pro-rata amount (determined based upon the number of days from the first day of the Company’s current fiscal year to Executive’s Termination Date divided by the total number of days in the applicable performance period and based on actual performance and achievement of any performance goals) of:

		
	(A)
	The annual incentive, if any, payable under the Annual Incentive Plan in effect with respect to the fiscal year or Short Year in which the Termination Date occurs based on actual fiscal year performance (the “Annual Incentive Portion of Severance”).  “Annual Incentive Plan” means the Hanesbrands Inc. annual incentive plan in which Executive participates as of the Termination Date; and 

		
	(B)
	The long-term incentive payable under the Omnibus Plan in effect on Executive’s Termination Date for any performance period or cycle that is at least fifty (50) percent completed prior to Executive’s Termination Date and which relates to the period of his service prior to his Termination Date.  The “Omnibus Plan” means the Hanesbrands Inc. Omnibus Incentive Plan of 2006, as amended from time to time, and any successor plan or plans.  The long-term incentive described in this section (“Long-Term Cash Incentive Plan”) includes cash long-term incentives, but does not include stock options, RSUs, or other equity awards.

Such amounts shall be payable as provided in section 2(c).  Treatment of stock options, RSUs, or other equity awards shall be determined pursuant to the Executive’s award agreement(s).  Executive shall not be eligible for any new Annual Incentive Plan grants, Long-Term Cash Incentive Plan grants, or any other grants of stock options, RSUs, or other equity awards under the Omnibus Plan during the Severance Period.

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	(iii)
	Beginning on his Termination Date, Executive shall be eligible to elect continued coverage under the group medical and dental plan available to similarly situated senior executives.  If Executive elects continuation coverage for medical coverage, dental coverage or both, he shall pay the entire COBRA premium charged for such continuation coverage during the Severance Period; provided, however, that during the Severance Period Company shall reimburse Executive for that portion of the COBRA premium paid that exceeds the amount payable by an active executive of Company for similar coverage, as adjusted from time to time.  Such reimbursement shall be made to Executive on the 20th day of each calendar month during the Severance Period, or within ten (10) business days thereafter.  The amount eligible for reimbursement under this subparagraph in any calendar year shall not affect any amounts eligible for reimbursement to be provided in any other calendar year.  In addition, Executive’s right to reimbursement hereunder shall not be subject to liquidation or exchange for any other benefit.  Executive’s right to COBRA continuation coverage under any such group health plan shall be reduced by the number of months of medical and dental coverage otherwise provided pursuant to this subparagraph.  The premium charged for any continuation coverage after the end of the Severance Period shall be entirely at Executive’s expense and shall be the actuarially determined cost of the continuation coverage as determined by an actuary selected by the Company (in accordance with the requirements under COBRA, to the extent applicable).  Executive shall not be entitled to reimbursement of any portion of the premium charged for such coverage after the end of the Severance Period.  Executive’s COBRA continuation coverage shall terminate in accordance with the COBRA continuation of coverage provisions under Company’s group medical and dental plans.  If Executive is eligible for early retirement under the terms of the Retirement Plan (or would become eligible if the Severance Period is considered as employment), then, after exhausting any COBRA continuation coverage under the group medical plan, Executive may elect to participate in any retiree medical plan available to similarly situated senior executives in accordance with the terms and conditions of  such plan in effect on and after Executive’s Termination Date; provided, that such retiree medical coverage shall not be available to Executive unless he or she elects such coverage within thirty (30) days following his Termination Date.  The premium charged for such retiree medical coverage may be different (greater) than the premium charged an active employee for similar coverage;

		
	(iv)
	Except as otherwise provided herein or in the applicable plan, participation in all other Company plans available to similarly situated senior executives including but not limited to, qualified pension plans, stock purchase plans, matching grant programs, 401(k) plans and ESOPs, personal accident insurance, travel accident insurance, short and long term disability insurance, and accidental death and dismemberment insurance, shall cease on Executive’s Termination Date.  During the Severance 

-4-

Period, Company shall continue to maintain life insurance covering Executive under Company’s Executive Life Insurance Plan in accordance with its terms.  If Executive is eligible for early retirement or becomes eligible for early retirement during the Severance Period, then Company will continue to pay the premiums (or prepay the entire premium) so that Executive has a paid-up life insurance benefit equal to his annual salary on his Termination Date.
		
	(c)
	Payment of Severance.  Subject to section 15:

		
	(i)
	Salary Portion.  The Salary Portion of Severance shall be paid as follows:  

		
	(A)
	That portion of the Salary Portion of Severance that exceeds the “Separation Pay Limit,” if any, shall be paid to Executive in a lump sum payment as soon as practicable following the Termination Date, but in no event later than the fifteenth day of the third month after the date of the termination of Executive’s employment.  The “Separation Pay Limit” shall mean two (2) times the lesser of (1) the sum of Executive’s annualized compensation based upon the annual rate of pay for services provided to Company for the calendar year immediately preceding the calendar year in which the Termination Date occurs (adjusted for any increase during that calendar year that was expected to continue indefinitely if Executive had not terminated employment); and (2) the maximum dollar amount of compensation that may be taken into account under a tax-qualified retirement plan under Code Section 401(a)(17) for the year in which the Termination Date occurs.  The payment to be made to Executive pursuant to this subparagraph (A) is intended to be exempt from Code Section 409A (as defined in section 15) under the exemption found in Regulation Section 1.409A-(b)(4) for short-term deferrals.

		
	(B)
	The remaining portion of the Salary Portion of Severance shall be paid during the Severance Period in accordance with Company’s payroll schedule, unless the Committee shall elect to pay the remaining Salary Portion of Severance in a lump sum payment or a combination of regular payments and a lump sum payment.  Any lump sum payment shall be paid to Executive as soon as practicable following the Termination Date, but in no event later than the fifteenth day of the third month after the date of the termination of Executive’s employment.  Notwithstanding the foregoing, in no event shall such remaining portion of the Salary Portion of Severance be paid to Executive later than December 31 of the second calendar year following the calendar year in which Executive’s Termination Date occurs.  The payment(s) to be made to Executive pursuant to this subparagraph (B) are intended to be exempt from Code Section 409A (as defined in section 15) under the exemption found in Regulation Section 1.409A-1(b)(9)(iii) for separation pay plans (i.e., the so-called “two times” pay exemption).

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	(ii)
	Incentive Portion. The Annual Incentive Portion of Severance, if any, shall be paid in cash on the same date the active participants under the Annual Incentive Plan are paid.  The Long-Term Cash Incentive Plan payout, if any, shall be paid in the same form and on the same date the active participants under the Omnibus Plan are paid.  

		
	(iii)
	Withholding.  All payments hereunder shall be reduced by such amount as Company (or any subsidiary or affiliate of Company) may be required under all applicable federal, state, local or other laws or regulations to withhold or pay over with respect to such payment.

		
	(d)
	Termination of Benefits.  Notwithstanding any provisions in this Agreement to the contrary, all rights to receive or continue to receive severance payments and benefits under this section 2 shall cease on the earliest of: (i) the date Executive breaches any of the covenants in the separation and release agreement described in section 2(e); or (ii) the date Executive becomes reemployed by Company or any of its subsidiaries or affiliates.

		
	(e)
	Separation and Release Agreement.  No benefits under this section 2 shall be payable to Executive unless Executive and Company have executed a separation and release agreement within forty-five (45) days following the Termination Date and the payment of severance benefits under this section 2 shall be subject to the terms and conditions of the separation and release agreement.

		
	(f)
	Death of Executive.  In the event that Executive shall die prior to the payment in full of any benefits described above as payable to Executive for Involuntary Termination, payments of such benefits shall cease on the date of Executive’s death.  

3.Change in Control Benefits.  
		
	(a)
	Eligibility for Change in Control Benefits.

		
	(i)
	Eligible Terminations.  If (A) within three (3) months preceding a Change in Control, the Executive’s employment is terminated by the Company at the request of a third party in contemplation of a Change in Control, (B) within twenty-four (24) months following a Change in Control, Executive’s employment is terminated by Company other than on account of Executive’s death, disability or retirement and other than for Cause, or (C) within twenty-four (24) months following a Change in Control Executive voluntarily terminates his employment for Good Reason, Executive shall be entitled to the Change in Control benefits as described in section 3(b) below.

		
	(ii)
	Good Reason.  For purposes of this section 3, “Good Reason” means the occurrence of any one or more of the following (without Executive’s written consent after a Change in Control):

		
	(A)
	A material adverse change in Executive’s duties or responsibilities;

		
	(B)
	A reduction in Executive’s annual base salary except any reduction of not more than ten (10) percent;

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	(C)
	A material reduction in Executive’s level of participation in any of Company’s short- and/or long-term incentive compensation plans, or employee benefit or retirement plans, policies, practices or arrangements in which Executive participates except for any reduction applicable to all senior executives;

		
	(D)
	The failure of any successor to Company to assume and agree to perform this Agreement; or 

		
	(E)
	Company’s requiring Executive to be based at an office location which is at least fifty (50) miles from his or her office location at the time of the Change in Control.

The existence of Good Reason shall not be affected by Executive’s temporary incapacity due to physical or mental illness not constituting a Disability.  Executive’s retirement shall constitute a waiver of his or her rights with respect to any circumstance constituting Good Reason.  Executive’s continued employment shall not constitute a waiver of his or her rights with respect to any circumstances which may constitute Good Reason; provided, however, that Executive may not rely on any particular action or event described in clause (A) through (E) above as a basis for terminating his employment for Good Reason unless he delivers a Notice of Termination based on that action or event within ninety (90) days after its occurrence and Company has failed to correct the circumstances cited by Executive as constituting Good Reason within thirty (30) days of receiving the Notice of Termination.
		
	(iii)
	Change in Control.  For purposes of this Agreement, a “Change in Control” will occur:

		
	(A)
	Upon the acquisition by any individual, entity or group, including any Person (as defined in the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”)), of beneficial ownership (as defined in Rule 13d‐3 promulgated under the Exchange Act), directly or indirectly, of twenty (20) percent or more of the combined voting power of the then outstanding capital stock of Company that by its terms may be voted on all matters submitted to stockholders of Company generally (“Voting Stock”); provided, however, that the following acquisitions shall not constitute a Change in Control:

		
	1)
	Any acquisition directly from Company (excluding any acquisition resulting from the exercise of a conversion or exchange privilege in respect of outstanding convertible or exchangeable securities unless such outstanding convertible or exchangeable securities were acquired directly from Company);

		
	2)
	Any acquisition by Company;

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	3)
	Any acquisition by an employee benefit plan (or related trust) sponsored or maintained by Company or any corporation controlled by Company; or

		
	4)
	Any acquisition by any corporation pursuant to a reorganization, merger or consolidation involving Company, if, immediately after such reorganization, merger or consolidation, each of the conditions described in clauses (1), (2) and (3) of subparagraph 3(a)(iii)(B) below shall be satisfied; and provided further that, for purposes of clause (2) immediately above, if (i) any Person (other than Company or any employee benefit plan (or related trust) sponsored or maintained by Company or any corporation controlled by Company) shall become the beneficial owner of twenty (20) percent or more of the Voting Stock by reason of an acquisition of Voting Stock by Company, and (ii) such Person shall, after such acquisition by Company, become the beneficial owner of any additional shares of the Voting Stock and such beneficial ownership is publicly announced, then such additional beneficial ownership shall constitute a Change in Control; or

		
	(B)
	Upon the consummation of a reorganization, merger or consolidation of Company, or a sale, lease, exchange or other transfer of all or substantially all of the assets of Company; excluding, however, any such reorganization, merger, consolidation, sale, lease, exchange or other transfer with respect to which, immediately after consummation of such transaction:

		
	1)
	All or substantially all of the beneficial owners of the Voting Stock of Company outstanding immediately prior to such transaction continue to beneficially own, directly or indirectly (either by remaining outstanding or by being converted into voting securities of the entity resulting from such transaction), more than fifty (50) percent of the combined voting power of the voting securities of the entity resulting from such transaction (including, without limitation, Company or an entity which as a result of such transaction owns Company or all or substantially all of Company's property or assets, directly or indirectly) (the “Resulting Entity”) outstanding immediately after such transaction, in substantially the same proportions relative to each other as their ownership immediately prior to such transaction; and

		
	2)
	No Person (other than any Person that beneficially owned, immediately prior to such reorganization, merger, consolidation, sale or other disposition, directly or indirectly, Voting Stock representing twenty (20) percent or more of the combined voting power of Company's then outstanding 

-8-

securities) beneficially owns, directly or indirectly, twenty (20) percent or more of the combined voting power of the then outstanding securities of the Resulting Entity; and

		
	3)
	At least a majority of the members of the board of directors of the entity resulting from such transaction were members of the board of directors of Company (the “Board”) at the time of the execution of the initial agreement or action of the Board authorizing such reorganization, merger, consolidation, sale or other disposition; or 

		
	(C)
	Upon the consummation of a plan of complete liquidation or dissolution of Company; or

		
	(D)
	When the Initial Directors cease for any reason to constitute at least a majority of the Board.  For this purpose, an “Initial Director” shall mean those individuals serving as the directors of Company as of the date of this Agreement; provided, however, that any individual who becomes a director of Company at or after the first annual meeting of stockholders of Company whose election, or nomination for election by the Company’s stockholders, was approved by the vote of at least a majority of the Initial Directors then comprising the Board (or by the nominating committee of the Board, if such committee is comprised of Initial Directors and has such authority) shall be deemed to have been an Initial Director; and provided further, that no individual shall be deemed to be an Initial Director if such individual initially was elected as a director of Company as a result of: (1) an actual or threatened solicitation by a Person (other than the Board) made for the purpose of opposing a solicitation by the Board with respect to the election or removal of directors; or (2) any other actual or threatened solicitation of proxies or consents by or on behalf of any Person (other than the Board).

		
	(iv)
	Termination Date.  For purposes of this section 3, “Termination Date” shall mean the date specified in the Notice of Termination as the date on which the conditions giving rise to Executive’s termination were first met.  

		
	(b)
	Change in Control Benefits.  In the event Executive becomes entitled to receive benefits under this section 3, the following shall apply:

		
	(i)
	In consideration of Executive’s covenants hereunder, Executive shall be entitled to receive the following amounts, payable as provided in section 3(j):

		
	(A)
	A lump sum payment equal to the unpaid portion of Executive’s annual Base Salary and vacation accrued through the Termination Date;

		
	(B)
	A lump sum payment equal to Executive’s prorated Annual Incentive Plan payment (as determined in accordance with subparagraph 2(b)(ii)(A) above);

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	(C)
	A lump sum payment equal to Executive’s prorated Long-Term Cash Incentive Plan payment (as determined in accordance with subparagraph 2(b)(ii)(B) above); and

		
	(D)
	A lump sum payment equal to two times the sum of (1) Executive’s annual Base Salary; and (2) the greater of (i) Executive’s target annual incentive (as defined in the Annual Incentive Plan) for the year in which the Change in Control occurs and (ii) Executive’s average annual incentive calculated over the three (3) fiscal years immediately preceding the year in which the Change in Control occurs; and (3) an amount equal to the Company matching contribution to the defined contribution plan in which Executive is participating at the Termination Date (currently 4%).

Treatment of stock options, RSUs, or other equity awards shall be determined pursuant to the Executive’s award agreement(s).  Executive shall not be eligible for any new Annual Incentive Plan grants, Long-Term Cash Incentive Plan grants, or any other grants of stock options, RSUs, or other equity awards under the Omnibus Plan with respect to the CIC Severance Period as defined immediately below.
		
	(ii)
	For a period of 24 months following Executive’s Termination Date (the “CIC Severance Period”), Executive shall have the right to elect continuation of the life insurance, personal accident insurance, travel accident insurance and accidental death and dismemberment insurance coverages which insurance coverages shall be provided at the same levels and the same costs in effect immediately prior to the Change in Control. Beginning on his Termination Date, Executive shall be eligible to elect continued coverage under the group medical and dental plan available to similarly situated senior executives.  If Executive elects continuation coverage for medical coverage, dental coverage or both, he shall pay the entire COBRA premium charged for such continuation coverage during the CIC Severance Period; provided, however, that during the CIC Severance Period, Company shall reimburse Executive for that portion of the COBRA premium paid that exceeds the amount payable by an active executive of Company for similar coverage, as adjusted from time to time.  Such reimbursement shall be made to Executive on the 20th day of each calendar month during the CIC Severance Period, or within ten (10) business days thereafter.  The amount eligible for reimbursement under this subparagraph in any calendar year shall not affect any amounts eligible for reimbursement to be provided in any other calendar year.  In addition, Executive’s right to reimbursement hereunder shall not be subject to liquidation or exchange for any other benefit.  Executive’s right to COBRA continuation coverage under any such group health plan shall be reduced by the number of months of coverage otherwise provided pursuant to this subparagraph.  The premium charged for any continuation coverage after the end of the CIC Severance Period shall be entirely at Executive’s expense and shall be the actuarially determined cost of the continuation coverage as determined by an actuary selected by the Company (in accordance with the requirements under COBRA, to the extent applicable).  Executive shall not 

-10-

be entitled to reimbursement of any portion of the premium charged for such coverage after the end of the CIC Severance Period.  Executive’s COBRA continuation coverage shall terminate in accordance with the COBRA continuation of coverage provisions under Company’s group medical and dental plans.  If Executive is eligible for early retirement under the terms of the Retirement Plan (or would become eligible if the CIC Severance Period is considered as employment), then, after exhausting any COBRA continuation coverage under the group medical plan, Executive may elect to participate in any retiree medical plan available to similarly situated senior executives in accordance with the terms and conditions of such plan in effect on and after Executive’s Termination Date; provided, that such retiree medical coverage shall not be available to Executive unless he or she elects such coverage within thirty (30) days following his Termination Date.  The premium charged for such retiree medical coverage may be different from the premium charged an active employee for similar coverage; 
		
	(iii)
	If the aggregate benefits accrued by Executive as of the Termination Date under the savings and retirement plans sponsored by Company are not fully vested pursuant to the terms of the applicable plan(s), the difference between the benefits Executive is entitled to receive under such plans and the benefits he would have received had he been fully vested will be provided to Executive under the Hanesbrands Inc. Supplemental Employee Retirement Plan (the “Supplemental Plan”).  In addition, for purposes of determining Executive’s benefits under the Supplemental Plan and Executive’s right to post-retirement medical benefits under Company’s retiree medical plan, additional years of age and service credits equivalent to the length of the CIC Severance Period shall be included.  However, Executive will not be eligible to begin receiving any retirement benefits under any such plans until the date he or she would otherwise be eligible to begin receiving benefits under such plans;

		
	(iv)
	Except as otherwise provided herein or in the applicable plan, participation in all other plans of Company or any subsidiary or affiliate of Company available to similarly situated Executives of Company, shall cease on Executive’s Termination Date.  

		
	(c)
	Termination for Disability.  If Executive’s employment is terminated due to Disability following a Change in Control, Executive shall receive his Base Salary through the Termination Date, at which time his benefits shall be determined in accordance with Company’s disability, retirement, insurance and other applicable plans and programs then in effect, and Executive shall not be entitled to any other benefits provided by this Agreement.

		
	(d)
	Termination for Retirement or Death.  If Executive’s employment is terminated by reason of his retirement or death following a Change in Control, Executive’s benefits shall be determined in accordance with Company’s retirement, survivor’s benefits, insurance, and other applicable programs then in effect, and Executive shall not be entitled to any other benefits provided by this Agreement.

-11-

		
	(e)
	Termination for Cause, or Other Than for Good Reason or Retirement.  If Executive’s employment is terminated either by Company for Cause, or voluntarily by Executive (other than for Retirement or Good Reason) following a Change in Control, Company shall pay Executive his full Base Salary and accrued vacation through the Termination Date, at the rate then in effect, plus all other amounts to which such Executive is entitled under any compensation plans of Company, at the time such payments are due, and Company shall have no further obligations to such Executive under this Agreement.

		
	(f)
	Separation and Release Agreement.  No benefits under this section 3 shall be payable to Executive unless Executive and Company have executed a “Separation and Release Agreement” (in substantially the form attached hereto as Exhibit A) within forty-five (45) days following the Termination Date and the payment of change in control benefits under this section 3 shall be subject to the terms and conditions of the Separation and Release Agreement.

		
	(g)
	Deferred Compensation.  All amounts previously deferred by or accrued to the benefit of Executive under any nonqualified deferred compensation plan sponsored by Company (including, without limitation, any vested amounts deferred under incentive plans), together with any accrued earnings thereon, shall be paid in accordance with the terms of such plan following Executive’s termination.

		
	(h)
	Notice of Termination.  Any termination of employment under this section 3 by Company or by Executive for Good Reason shall be communicated by a written notice which shall indicate the specific Change in Control termination provision relied upon, and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated (a “Notice of Termination”).

		
	(i)
	Termination of Benefits.  All rights to receive or continue to receive severance payments and benefits pursuant to this section 3 by reason of a Change in Control shall cease on the date Executive becomes reemployed by Company or any of its subsidiaries or affiliates.

		
	(j)
	Form and Timing of Benefits.  Subject to the provisions of this section 3 and to section 15, the Change in Control benefits described herein shall be paid to Executive in cash in a single lump sum payment as soon as practicable following the Termination Date, but in no event later than the fifteenth day of the third month after the date of the Executive’s termination of employment.  The Change in Control benefits payable to Executive pursuant to this subparagraph (j) are intended to be exempt from Code Section 409A (as defined in section 15) under the exemption found in Regulation Section 1.409A-(b)(4) for short-term deferrals.

		
	(k)
	Excise Tax Adjustment.  Subject to the limitation below, in the event that Executive becomes entitled to any payment or benefit under this section 3 (such benefits together with any other payments or benefits payable under any other agreement with, or plan or policy of, Company are referred to in the aggregate as the “Total Payments”), if all or any part of the Total Payments will, as determined by Company, be subject to the tax (the “Excise Tax”) imposed by Code Section 4999 (or any similar 

-12-

tax that may hereafter be imposed), then such payment shall be either: (i) provided to Executive in full, or (ii) provided to Executive to such lesser extent as would result in no portion of such payment being subject to such Excise Tax, whichever of the foregoing amounts, when taking into account applicable federal, state, local and foreign income and employment taxes, such Excise Tax, and any other applicable taxes, results in the receipt by Executive, on an after-tax basis, of the greatest amount of the payment, notwithstanding that all or some portion of such payment may be taxable under such Excise Tax.  To the extent such payment needs to be reduced pursuant to the preceding sentence, reductions shall come from taxable amounts before non-taxable amounts and beginning with the payments otherwise scheduled to occur soonest.  Executive agrees to cooperate fully with Company to determine the benefits applicable under this section.  For purposes of determining whether any of the Total Payments will be subject to the Excise Tax, and the amounts of such Excise Tax, the following shall apply:
		
	(i)
	Any other payments or benefits received or to be received by Executive in connection with a Change in Control or Executive’s termination of employment (whether pursuant to the terms of this Agreement or any other plan, policy, arrangement or agreement with Company, or with any Person whose actions result in a Change in Control or any Person affiliated with Company or such Persons) shall be treated as “parachute payments” within the meaning of Code Section 280G(b)(2), and all “excess parachute payments” within the meaning of Code Section 280G(b)(1) shall be treated as subject to the Excise Tax, unless in the opinion of Company’s tax counsel as supported by Company’s independent auditors and acceptable to Executive, such other payments or benefits (in whole or in part) do not constitute parachute payments, or unless such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered within the meaning of Code Section 280G(b)(4) in excess of the base amount within the meaning of Code Section 280G(b)(3), or are otherwise not subject to the Excise Tax;

		
	(ii)
	The value of any noncash benefits or any deferred payment or benefit shall be determined by Company’s independent auditors in accordance with the principles of Code Sections 280G(d)(3) and (4); 

		
	(iii)
	Executive shall be deemed to pay federal income taxes at the highest marginal rate of federal income taxation, and state and local income taxes at the highest marginal rate of taxation in the state and locality of Executive’s residence on the Termination Date, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes; and

		
	(iv)
	In the event the Internal Revenue Service adjusts any item included in Company’s computations under this section 3(k) so that Executive did not receive the full net benefit intended under the provisions of this section 3(k), Company shall reimburse Executive for the full amount necessary to make Executive whole as determined by the Committee.  Any such payment shall be treated for Section 409A purposes as a payment separate from the payment made pursuant to this subparagraph (k) immediately following Executive’s 

-13-

termination of employment and shall be made by Company to Executive within twenty (20) days of the date he remits the additional taxes as a result of such adjustment; provided, however, that no such payment shall be made following the calendar year after the calendar year in which such adjustment was made by the Internal Revenue Service.
		
	(l)
	Company’s Payment Obligation.  Subject to the provisions of section 4, Company’s obligation to make the payments and the arrangements provided in this section 3 shall be absolute and unconditional, and shall not be affected by any circumstances, including, without limitation, any offset, counterclaim, recoupment, defense, or other right which Company may have against Executive or anyone else.  All amounts payable by Company under this section 3 shall be paid without notice or demand and each and every payment made by Company shall be final, and Company shall not seek to recover all or any part of such payment from Executive or from whomsoever may be entitled thereto, for any reason except as provided in section 3(k) above or in section 4.

		
	(m)
	Other Employment.  Executive shall not be obligated to seek other employment in mitigation of the amounts payable or arrangements made under this section 3, and the obtaining of any such other employment shall in no event result in any reduction of Company’s obligations to make the payments and arrangements required to be made under this section 3, except to the extent otherwise specifically provided in this Agreement.

		
	(n)
	Payment of Legal Fees and Expenses.  To the extent permitted by law, Company shall reimburse Executive for all reasonable legal fees, costs of litigation or arbitration, prejudgment or pre-award interest, and other expenses incurred in good faith by Executive as a result of Company’s refusal to provide benefits under this section 3, or as a result of Company contesting the validity, enforceability or interpretation of the provisions of this section 3, or as the result of any conflict (including conflicts related to the calculation of parachute payments or the characterization of Executive’s termination) between Executive and Company; provided that the conflict or dispute is resolved in Executive’s favor and Executive acts in good faith in pursuing his rights under this section 3.  Such reimbursement shall be made within thirty (30) days following final resolution, in favor of Executive, of the conflict or dispute giving rise to such fees and expenses.  In no event shall Executive be entitled to receive the reimbursements provided for in this subparagraph if he acts in bad faith or pursues a claim without merit, or if he fails to prevail in any action instituted by him or Company.

		
	(o)
	Arbitration for Change in Control Benefits. Any dispute or controversy arising under or in connection with the benefits provided under this section 3 shall promptly and expeditiously be submitted to arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association in effect at the time of such arbitration proceeding utilizing a panel of three (3) arbitrators sitting in a location selected by Executive within fifty (50) miles from the location of his employment with Company.  Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.  The costs and expenses of both parties, including, without limitation, attorneys’ fees shall be borne by 

-14-

Company.  Pending the resolution of any such dispute, controversy or claim, Executive (and his beneficiaries) shall, except to the extent that the arbitrator otherwise expressly provides, continue to receive all payments and benefits due under this section 3.
4.Remedies.  In the event of any actual or threatened breach of the provisions of this Agreement or any separation and release agreement, the party who claims such breach or threatened breach shall give the other party written notice and, except in the case of a breach which is not susceptible to being cured, ten calendar days in which to cure.  In the event of a breach of any provision of this Agreement or any separation and release agreement by Executive, (i) Executive shall reimburse Company: the full amount of any payments made under section 2(b)(i), (ii), or (iii) or section 3(b)(i) of this Agreement (as the case may be), (ii) Company shall have the right, in addition to and without waiving any other rights to monetary damages or other relief that may be available to Company at law or in equity, to immediately discontinue any remaining payments due under subparagraph 2(b)(i), (ii) or (iii) or subparagraph 3(b)(i) of this Agreement (as the case may be) including but not limited to any remaining Salary Portion of Severance payments, and (iii) the Severance Period or the CIC Severance Period (as the case may be) shall thereupon cease, provided that Executive’s obligations under, if applicable, any separation and release agreement shall continue in full force and effect in accordance with their terms for the entire duration of the Severance Period or CIC Severance Period as applicable.  In addition, Executive acknowledges that Company will suffer irreparable injury in the event of a breach or violation or threatened breach or violation of the provisions of this Agreement or any separation and release agreement and agrees that in the event of an actual or threatened breach or violation of such provisions, in addition to the other remedies or rights available to under this Agreement or otherwise, Company shall be awarded injunctive relief in the federal or state courts located in North Carolina to prohibit any such violation or breach or threatened violation or breach, without necessity of posting any bond or security.
5.Committee.  Except as specifically provided herein, this Agreement shall be administered by the Compensation and Benefits Committee of the Board (the “Committee”).  The Committee may delegate any administrative duties, including, without limitation, duties with respect to the processing, review, investigation, approval and payment of severance/Change in Control benefits, to designated individuals or committees. 
6.Claims Procedure.  If Executive believes that he is entitled to receive severance benefits under this Agreement, he may file a claim in writing with the Committee within ninety (90) days after the date such Executive believes he or she should have received such benefits.  No later than ninety (90) days after the receipt of the claim, the Committee shall either allow or deny the claim in writing.  A denial of a claim, in whole or in part, shall be written in a manner calculated to be understood by Executive and shall include the specific reason or reasons for the denial; specific reference to the pertinent provisions of this Agreement on which the denial is based; a description of any additional material or information necessary for Executive to perfect the claim and an explanation of why such material or information is necessary; and an explanation of the claim review procedure.  Executive (or his duly authorized representative) may within sixty 60 days after receipt of the denial of his claim request a review upon written application to the Committee; review pertinent documents; and submit issues and comments in writing.  The Committee shall notify Executive of its decision on review within sixty (60) days after receipt of a request for review unless special circumstances require an extension of time for processing, in which case a decision shall be rendered as soon as possible, but not later than one-hundred twenty (120) days after receipt of a request for review.  Notice of the decision on review shall be in writing.  The Committee’s decision on review 

-15-

shall be final and binding on Executive and any successor in interest.  If Executive subsequently wishes to file a claim under Section 502(a) of ERISA, any legal action must be filed within ninety (90) days of the Committee’s final decision.  Executive must exhaust the claims procedure provided in this section 6 before filing a claim under ERISA with respect to any benefits provided under section 2 of this Agreement.
7.Notices. Any notice required or permitted to be given under this Agreement shall be sufficient if in writing and either delivered in person or sent by first class, certified or registered mail, postage prepaid, if to Company at Company’s principal place of business, and if to Executive, at his home address most recently filed with Company, or to such other address as either party shall have designated in writing to the other party.
8.Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of North Carolina without regard to any state’s conflict of law principles.
9.Severability and Construction. If any provision of this Agreement is declared void or unenforceable or against public policy, such provision shall be deemed severable and severed from this Agreement and the balance of this Agreement shall remain in full force and effect.  If a court of competent jurisdiction determines that any restriction in this Agreement is overbroad or unreasonable under the circumstances, such restriction shall be modified or revised by such court to include the maximum reasonable restriction allowed by law.
10.Waiver. Failure to insist upon strict compliance with any of the terms, covenants or conditions hereof shall not be deemed a waiver of such term, covenant or condition.
11.Entire Agreement Modifications. This Agreement (including all exhibits hereto) constitutes the entire agreement of the parties with respect to the subject matter hereof and supersede all prior agreements, oral and written, between the parties hereto with respect to the subject matter hereof.  In the event of any inconsistency between any provision of this Agreement and any provision of any plan, employee handbook, personnel manual, program, policy, arrangement or agreement of Company or any of its subsidiaries or affiliates, the provisions of this Agreement shall control.  This Agreement may be modified or amended only by an instrument in writing signed by both parties.  Each of the parties hereto has relied on his or its own judgment in entering into this Agreement. 
12.Withholding. All payments made to Executive pursuant to this Agreement will be subject to withholding of employment taxes and other lawful deductions, as applicable.
13.Survivorship. Except as otherwise set forth in this Agreement, to the extent necessary to carry out the intentions of the parties hereunder the respective rights and obligations of the parties hereunder shall survive any termination of Executive’s employment.
14.Successors and Assigns. This Agreement shall bind and shall inure to the benefit of Company and any and all of its successors and assigns. This Agreement is personal to Executive and shall not be assignable by Executive.  Company may assign this Agreement to any entity which (i) purchases all or substantially all of the assets of Company or (ii) is a direct or indirect successor (whether by merger, sale of stock or transfer of assets) of Company.  Any such assignment shall be valid so long as the entity which succeeds to Company expressly assumes Company’s obligations hereunder and complies with its terms.

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15.Compliance with Code Section 409A.  To the extent applicable, it is intended that the payment of benefits described in this Agreement comply with Code Section 409A and all guidance or regulations thereunder ("Section 409A"), including compliance with all applicable exemptions from Section 409A (e.g., the short-term deferral exception and the  "two times" pay exemption applicable to severance payments). This Agreement will at all times be construed in a manner to comply with Section 409A and should any provision be found not in compliance with Section 409A, Executive hereby agrees to any changes to the terms of this  Agreement deemed necessary and required by legal counsel for Company to achieve compliance with Section 409A, including any applicable exemptions.  By signing a copy of this Agreement, Executive  irrevocably waives any objections he may have to any changes that may be required by Section 409A.  In no event will any payment that becomes payable pursuant to this Agreement that is considered "deferred compensation" within the meaning of Section 409A, if any, and does not satisfy any of the applicable exemptions under Section 409A, be accelerated in violation of Section 409A. If Executive is a "specified employee" as defined in Section 409A, any payment that becomes payable pursuant to this Agreement that is considered "deferred compensation" within the meaning of Section 409A and does not satisfy any of the applicable exemptions under Section 409A may not be made before the date that is six months after Executive’s separation from service (or death, if earlier). To the extent Executive becomes subject to the six-month delay rule, all payments that would have been made to Executive during the six months following his separation from service that are not otherwise exempt from Section 409A, if any, will be accumulated and paid to Executive during the seventh month following his separation from service, and any remaining payments due will be made in their ordinary course as described in this Agreement.  Company will notify Executive should he become subject to the six month delay rule.

IN WITNESS WHEREOF, Company and Executive have duly executed and delivered this Agreement as of the day and year first above written.

	
					
	EXECUTIVE:
	 
	 
	HANESBRANDS INC.

	 
	 
	 
	 
	 

	Signature:
	 
	 
	By:
	 

	 
	 
	 
	 
	 

	 
	 
	 
	Title:
	 

-17-

Exhibit A
MODEL FORM
SEPARATION AND RELEASE AGREEMENT
Hanesbrands Inc. (the “Company”) and ________________ (the “Executive”) enter into this Separation and Release Agreement which was received by Executive on the ___ day of _______, 20__, signed by Executive on the ___ day of _______, 20__, and is effective on the ___ day of ________, 20__ (the “Effective Date”).  The Effective Date shall be no less than 7 days after the date signed by Executive.
W I T N E S S E T H:
WHEREAS, Executive has been employed by the Company as a ______________; and
WHEREAS, Executive’s employment with the Company is terminated as of ______, 20__ (the “Termination Date”); and
WHEREAS, pursuant to that certain Severance/Change in Control Agreement between Company and Executive dated _________, 20__ (the “Change in Control Agreement”), upon a termination of Executive’s employment that satisfies the conditions specified in the Change in Control Agreement, Executive is entitled to the benefits described in the Change in Control Agreement provided Executive executes a separation and release agreement acceptable to Company; and
WHEREAS, this separation and release agreement (the “Agreement”) is intended to satisfy the requirements of the Change in Control Agreement and to form a part of the Change in Control Agreement in such a manner that all the rights, duties and obligations arising between Executive and Company, including, but in no way limited to, any rights, duties and obligations that have arisen or might arise out of or are in any way related to Executive’s employment with the Company and the conclusion of that employment are settled herein through the joinder of the Change in Control Agreement with this Agreement.
NOW, THEREFORE, in consideration of the obligations of the parties under the Change in Control Agreement and the additional covenants and mutual promises herein contained, it is further agreed as follows:
1.    Termination Date.  Executive agrees to resign Executive’s employment and all appointments Executive holds with Company, and its subsidiaries and affiliates, on the Termination Date.  Executive understands and agrees that Executive’s employment with the Company will conclude on the close of business on the Termination Date.
2.    Termination Benefits.  Executive and Company agree that Executive shall receive the benefits described in the Change in Control Agreement, less all applicable withholding taxes and other customary payroll deductions, provided in the Change in Control Agreement. 
3.    Receipt of Other Compensation.  Executive acknowledges and agrees that, other than as specifically set forth in the Change in Control Agreement or this Agreement, following the 

Termination Date, Executive is not and will not be due any compensation, including, but not limited to, compensation for unpaid salary (except for amounts unpaid and owing for Executive’s employment with Company, its subsidiaries or affiliates prior to the Termination Date), unpaid bonus, severance and accrued or unused vacation time or vacation pay from the Company or any of its subsidiaries or affiliates.  Except as provided herein or in the Change in Control Agreement, Executive will not be eligible to participate in any of the benefit plans of the Company after Executive’s Termination Date.  However, Executive will be entitled to receive benefits which are vested and accrued prior to the Termination Date pursuant to the employee benefit plans of the Company.  Any participation by Executive (if any) in any of the compensation or benefit plans of the Company as of and after the Termination Date shall be subject to and determined in accordance with the terms and conditions of such plans, except as otherwise expressly set forth in the Change in Control Agreement or this Agreement.  
4.    Continuing Cooperation.  Following the Termination Date, Executive agrees to cooperate with all reasonable requests for information made by or on behalf of Company with respect to the operations, practices and policies of the Company.  In connection with any such requests, the Company shall reimburse Executive for all out-of-pocket expenses reasonably and necessarily incurred in responding to such request(s).
5.    Executive’s Representation and Warranty.  Executive hereby represents and warrants that, during Executive’s period of employment with the Company, Executive did not willfully or negligently breach Executive’s duties as an employee or officer of the Company, did not commit fraud, embezzlement, or any other similar dishonest conduct, and did not violate the Company’s business standards.
6.    Non-Solicitation and Non-Compete.  In consideration of the benefits provided under this Agreement and in the Change in Control Agreement, Executive agrees that during Executive’s employment and for the duration of the applicable Severance Period as determined pursuant to the terms of the Change in Control Agreement, Executive will not, without the prior written consent of Company, either alone or in association with others, solicit for employment or assist or encourage the solicitation for employment, any employee of Company, or any of its subsidiaries or affiliates; will not, without the prior written consent of Company, solicit any customer of Company, or any of its subsidiaries or affiliates, to induce or attempt to induce such person or entity to cease or reduce doing business with Company, or any of its subsidiaries or affiliates, or interfere with the relationship between Company and any such customer; and will not, without the prior written consent of Company, directly or indirectly counsel, advise, perform services for, or be employed by, or otherwise engage or participate in any Competing Business (regardless of whether Executive receives compensation of any kind).  For purposes of this Agreement, a “Competing Business” shall mean any commercial activity which competes or is reasonably likely to compete with any business that the Company conducts, or demonstrably anticipates conducting, as of Executive’s Termination Date.
7.    Confidentiality.  At all times after the Effective Date, Executive will maintain the confidentiality of all information in whatever form concerning Company or any of its subsidiaries or affiliates relating to its or their businesses, customers, finances, strategic or other plans, marketing, employees, trade practices, trade secrets, know-how or other matters which are not generally known outside Company or any of its subsidiaries or affiliates, and Executive will not, directly or indirectly, make any disclosure thereof to anyone, or make any use thereof, on Executive’s own behalf or on 

19A-

behalf of any third party, unless specifically requested by or agreed to in writing by an executive officer of Company.  In addition, Executive agrees that Executive will not disclose the existence or terms of this Agreement to any third parties with the exception of Executive’s accountants, attorneys, or spouse, and shall ensure that none of them discloses such existence or terms to any other person, except as required to comply with law.  Executive will promptly return to Company all reports, files, memoranda, records, computer equipment and software, credit cards, cardkey passes, door and file keys, computer access codes or disks and instructional manuals, and other physical or personal property which Executive received or prepared or helped prepare in connection with Executive’s employment and Executive will not retain any copies, duplicates, reproductions or excerpts thereof.  The obligations of this paragraph 7 shall survive the expiration of this Agreement.
8.    Non-Disparagement.  At all times after the Effective Date, Executive will not disparage or criticize, orally or in writing, the business, products, policies, decisions, directors, officers or employees of Company or any of its subsidiaries or affiliates to any person.  Company also agrees that none of its executive officers will disparage or criticize Executive to any person or entity.  The obligations of this paragraph 8 shall survive the expiration of this Agreement.
9.    Breach of Agreement.  Any actual or threatened breach of this Agreement will be handled as provided in the Change in Control Agreement.
		
	10.
	Release.

		
	(a)
	Executive on behalf of Executive, Executive’s heirs, executors, administrators and assigns, does hereby knowingly and voluntarily release, acquit and forever discharge Company and any of its subsidiaries, affiliates, successors, assigns and past, present and future directors, officers, employees, trustees and shareholders (the “Released Parties”) from and against any and all complaints, claims, cross-claims, third-party claims, counterclaims, contribution claims, liabilities, obligations, promises, agreements, controversies, damages, actions, causes of action, suits, rights, demands, costs, losses, debts and expenses of any nature whatsoever, known or unknown, suspected or unsuspected, foreseen or unforeseen, matured or unmatured, which, at any time up to and including the date on which Executive signs this Agreement, exists, have existed, or may arise from any matter whatsoever occurring, including, but not limited to, any claims arising out of or in any way related to Executive’s employment with Company or its subsidiaries or affiliates and the conclusion thereof, which Executive, or any of Executive’s heirs, executors, administrators, assigns, affiliates, and agents ever had, now has or at any time hereafter may have, own or hold against any of the Released Parties based on any matter existing on or before the date on which Executive signs this Agreement.  Executive acknowledges that in exchange for this release, Company is providing Executive with total consideration, financial or otherwise, which exceeds what Executive would have been given without the release.  By executing this Agreement, Executive is waiving, without limitation, all claims (except for the filing of a charge with an administrative agency) against the Released Parties arising under federal, state and local labor and antidiscrimination laws, any employment related claims under the employee Retirement Income Security Act of 1974, as amended, and any other restriction on the right to terminate employment, including, without limitation, Title VII of the Civil Rights Act of 1964, as amended, the Americans with Disabilities Act of 1990, as amended, and the North 

20A-

Carolina Equal Employment Practices Act, as amended.  Nothing herein shall release any party from any obligation under this Agreement.  Executive acknowledges and agrees that this release and the covenant not to sue set forth in paragraph (c) below are essential and material terms of this Agreement and that, without such release and covenant not to sue, no agreement would have been reached by the parties and no benefits under the Change in Control Agreement would have been paid.  Executive understands and acknowledges the significance and consequences of this release and this Agreement.
		
	(b)
	EXECUTIVE SPECIFICALLY WAIVES AND RELEASES THE RELEASED PARTIES FROM ALL CLAIMS EXECUTIVE MAY HAVE AS OF THE DATE EXECUTIVE SIGNS THIS AGREEMENT REGARDING CLAIMS OR RIGHTS ARISING UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, 29 U.S.C. § 621 (“ADEA”).  EXECUTIVE FURTHER AGREES: (i) THAT EXECUTIVE’S WAIVER OF RIGHTS UNDER THIS RELEASE IS KNOWING AND VOLUNTARY AND IN COMPLIANCE WITH THE OLDER WORKERS BENEFIT PROTECTION ACT OF 1990; (ii) THAT EXECUTIVE UNDERSTANDS THE TERMS OF THIS RELEASE; (iii) THAT EXECUTIVE’S WAIVER OF RIGHTS IN THIS RELEASE IS IN EXCHANGE FOR CONSIDERATION THAT WOULD NOT OTHERWISE BE OWING TO EXECUTIVE PURSUANT TO ANY PREEXISTING OBLIGATION OF ANY KIND HAD EXECUTIVE NOT SIGNED THIS RELEASE; (iv) THAT EXECUTIVE HEREBY IS AND HAS BEEN ADVISED IN WRITING BY COMPANY TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS RELEASE; (v) THAT COMPANY HAS GIVEN EXECUTIVE A PERIOD OF AT LEAST FORTY-FIVE (45) DAYS WITHIN WHICH TO CONSIDER THIS RELEASE; (vi) THAT EXECUTIVE REALIZES THAT FOLLOWING EXECUTIVE’S EXECUTION OF THIS RELEASE, EXECUTIVE HAS SEVEN (7) DAYS IN WHICH TO REVOKE THIS RELEASE BY WRITTEN NOTICE TO THE UNDERSIGNED, AND (vii) THAT THIS ENTIRE AGREEMENT SHALL BE VOID AND OF NO FORCE AND EFFECT IF EXECUTIVE CHOOSES TO SO REVOKE, AND IF EXECUTIVE CHOOSES NOT TO SO REVOKE, THAT THIS AGREEMENT AND RELEASE THEN BECOME EFFECTIVE AND ENFORCEABLE UPON THE EIGHTH DAY AFTER EXECUTIVE SIGNS THIS AGREEMENT.

		
	(c)
	To the maximum extent permitted by law, Executive covenants not to sue or to institute or cause to be instituted any action in any federal, state, or local agency or court against any of the Released Parties, including, but not limited to, any of the claims released this Agreement.  Notwithstanding the foregoing, nothing herein shall prevent Executive or any of the Released Parties from filing a charge with an administrative agency, from instituting any action required to enforce the terms of this Agreement, or from challenging the validity of this Agreement.  In addition, nothing herein shall be construed to prevent Executive from enforcing any rights Executive may have to recover vested benefits under the Employee Retirement Income Security Act of 1974, as amended.

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	(d)
	Executive represents and warrants that:  (i) Executive has not filed or initiated any legal, equitable, administrative, or other proceeding(s) against any of the Released Parties; (ii) no such proceeding(s) have been initiated against any of the Released Parties on Executive’s behalf; (iii) Executive is the sole owner of the actual or alleged claims, demands, rights, causes of action, and other matters that are released in this paragraph 10; (iv) the same have not been transferred or assigned or caused to be transferred or assigned to any other person, firm, corporation or other legal entity; and (v) Executive has the full right and power to grant, execute, and deliver the releases, undertakings, and agreements contained in this Agreement.

		
	(e)
	The consideration offered herein is accepted by Executive as being in full accord, satisfaction, compromise and settlement of any and all claims or potential claims, and Executive expressly agrees that Executive is not entitled to and shall not receive any further payments, benefits, or other compensation or recovery of any kind from Company or any of the other Released Parties.  Executive further agrees that in the event of any further proceedings whatsoever based upon any matter released herein, Company and each of the other Released Parties shall have no further monetary or other obligation of any kind to Executive, including without limitation any obligation for any costs, expenses and attorneys’ fees incurred by or on behalf of Executive.

11.    Executive’s Understanding.  Executive acknowledges by signing this Agreement that Executive has read and understands this document, that Executive has conferred with or had opportunity to confer with Executive’s attorney regarding the terms and meaning of this Agreement, that Executive has had sufficient time to consider the terms provided for in this Agreement, that no representations or inducements have been made to Executive except as set forth in this Agreement, and that Executive has signed the same KNOWINGLY AND VOLUNTARILY.
12.    Non-Reliance.  Executive represents to Company and Company represents to Executive that in executing this Agreement they do not rely and have not relied upon any representation or statement not set forth herein made by the other or by any of the other’s agents, representatives or attorneys with regard to the subject matter, basis or effect of this Agreement, or otherwise.
13.    Severability of Provisions.  In the event that any one or more of the provisions of this Agreement is held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby.  Moreover, if any one or more of the provisions contained in this Agreement are held to be excessively broad as to duration, scope, activity or subject, such provisions will be construed by limiting and reducing them so as to be enforceable to the maximum extent compatible with applicable law.
14.    Non-Admission of Liability.  Executive agrees that neither this Agreement nor the performance by the parties hereunder constitutes an admission by any of the Released Parties of any violation of any federal, state, or local law, regulation, common law, breach of any contract, or any other wrongdoing of any type.
15.    Assignability.  The rights and benefits under this Agreement are personal to Executive and such rights and benefits shall not be subject to assignment, alienation or transfer, except to the extent such rights and benefits are lawfully available to the estate or beneficiaries of 

22A-

Executive upon death.  Company may assign this Agreement to any parent, affiliate or subsidiary or any entity which at any time whether by merger, purchase, or otherwise acquires all or substantially all of the assets, stock or business of Company.
16.    Choice of Law.  This Agreement shall be constructed and interpreted in accordance with the internal laws of the State of North Carolina without regard to any state’s conflict of law principles.  
17.    Entire Agreement.  This Agreement, together with the Change in Control Agreement, sets forth all the terms and conditions with respect to compensation, remuneration of payments and benefits due Executive from Company and supersedes and replaces any and all other agreements or understandings Executive may have or may have had with respect thereto.  This Agreement may not be modified or amended except in writing and signed by both Executive and an authorized representative of Company.  
18.    Notice.  Any notice to be given hereunder shall be in writing and shall be deemed given when mailed by certified mail, return receipt requested, addressed as follows:
To Executive at:
[add address]
To the Company at:
Hanesbrands Inc.
Attention:  General Counsel  
1000 East Hanes Mill Road
Winston-Salem, NC  27105

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

	
					
	EXECUTIVE:
	 
	 
	HANESBRANDS INC.

	 
	 
	 
	 
	 

	Signature:
	 
	 
	By:
	 

	 
	 
	 
	 
	 

	 
	 
	 
	Title:
	 

23A-

Exhibit B
Schedule of Parties to Severance/Change in Control Agreement

	
			
	Name
	 
	Date of Agreement

	Michael E. Faircloth
	 
	August 21, 2013

	Barry A. Hytinen
	 
	October 16, 2017

	Jonathan Ram
	 
	May 21, 2018

24A-

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