Document:

Document

Exhibit 10.1

Amended and Restated
Cal-Maine Foods, Inc. 2012
Omnibus Long-Term Incentive Plan

TABLE OF CONTENTS

															
					Page
	ARTICLE 1.		INTRODUCTION		1
					
	ARTICLE 2.		DEFINITIONS		1
					
	ARTICLE 3.		ADMINISTRATION		5
	3.1		Committee Composition		5
	3.2		Committee Responsibilities		6
	3.3		Non-Officer Grants		6
					
	ARTICLE 4.		SHARES AVAILABLE FOR GRANTS		6
	4.1		Basic Limitation		6
	4.2		Shares Returned to Reserve		6
	4.3		Dividend Equivalents		6
					
	ARTICLE 5.		ELIGIBILITY		7
	5.1		Incentive Stock Options		7
	5.2		Other Grants		7
					
	ARTICLE 6.		OPTIONS		7
	6.1		Stock Option Agreement		7
	6.2		Number of Shares		7
	6.3		Exercise Price		7
	6.4		Exercisability and Term		7
	6.5		Effect of Change in Control		7
	6.6		Death of Optionee		7
	6.7		Modification or Assumption of Options		8
	6.8		Buyout Provisions		8
	6.9		Tax Considerations Related to Option Modifications		8
	6.10		ISO Limitations		8
	6.11		No Dividend Equivalent Rights		8
					
	ARTICLE 7.		PAYMENT FOR OPTION SHARES		8
	7.1		General Rule		8
	7.2		Exercise/Sale		8
	7.3		Other Forms of Payment		8
					
	ARTICLE 8.		STOCK APPRECIATION RIGHTS		9
	8.1		SAR Agreement		9
	8.2		Number of Shares		9
	8.3		Exercise Price		9
	8.4		Exercisability and Term		9
	8.5		Effect of Change in Control		9
	8.6		Exercise of SARs		9

															
					Page
	8.7		Death of Optionee		10
	8.8		Modification or Assumption of SARs		10
	8.9		Tax Considerations Related to SAR Modifications		10
	8.10		No Dividend Equivalent Rights		10
					
	ARTICLE 9.		RESTRICTED SHARES		10
	9.1		Restricted Stock Agreement 		10
	9.2		Payment for Awards 		10
	9.3		Vesting Conditions		10
	9.4		Voting and Dividend Rights		11
	9.5		Section 83(b) Election		11
					
	ARTICLE 10.		STOCK UNITS		11
	10.1		Stock Unit Agreement		11
	10.2		Payment for Awards		11
	10.3		Vesting Conditions		11
	10.4		Voting and Dividend Rights		11
	10.5		Form and Time of Settlement of Stock Units		11
	10.6		Death of Recipient		12
	10.7		Creditors' Rights		12
					
	ARTICLE 11.		OTHER AWARDS		12
	11.1		Awards under Other Plans		12
					
	ARTICLE 12.		PROTECTION AGAINST DILUTION		12
	12.1		Adjustments		12
	12.2		Dissolution or Liquidation		12
	12.3		Reorganizations		12
					
	ARTICLE 13.		PAYMENT OF DIRECTOR'S FEES IN SECURITIES		13
	13.1		Effective Date		13
	13.2		Elections to Receive NSOs, Restricted Shares or Stock Units		13
	13.3		Number and Terms of NSOs, Restricted Shares or Stock Units		13
					
	ARTICLE 14.		LIMITATION ON RIGHTS		14
	14.1		Retention Rights		14
	14.2		Stockholders' Rights		14
	14.3		Regulatory Requirements		14
					
	ARTICLE 15.		TAXES		14
	15.1		General		14
	15.2		Share Withholding		14
	15.3		Section 409A Matters		14
					

															
					Page
	ARTICLE 16.		LIMITATION ON PAYMENTS		15
	16.1		Scope of Limitation		15
	16.2		Basic Rule 		15
	16.3		Reduction of Payments		15
	16.4		Overpayments and Underpayments		15
	16.5		Related Corporations		16
					
	ARTICLE 17.		FUTURE OF THE PLAN		16
	17.1		Term of the Plan		16
	17.2		Amendment or Termination		16
	17.3		Stockholder Approval		16
					
	ARTICLE 18.		MISCELLANEOUS		16
	18.1		Unfunded Plan/No Establishment of a Trust Fund		16
	18.2		Indemnification of the Committee		16
	18.3		Severability		17
	18.4		Headings		17
	18.5		Other Compensation Plans		17
	18.6		Successors		17
	18.7		Law Limitations/Governmental Approvals		17
	18.8		Regulatory Approval and Listings		17
	18.9		Delivery of Title		17
	18.10		Inability to Obtain Authority		17
	18.11		Investment Representations		17
	18.12		Arbitration of Disputes		18
	18.13		No Fractional Shares		18
	18.14		Clawback/Recovery		18
	18.15		Transferability of Awards		18
	18.16		Paperless Administration		18
	18.17		Governing Law		18

Amended and Restated
Cal-Maine Foods, Inc. 2012
Omnibus Long-Term Incentive Plan

ARTICLE 1.  INTRODUCTION.

The purposes of the Cal-Maine Foods, Inc. 2012 Omnibus Long-Term Incentive Plan (the “2012 Plan”) are to promote the long-term success of the Company and the creation of stockholder value by (a) encouraging Employees, Outside Directors and Consultants to focus on critical long-range objectives, (b) encouraging the attraction and retention of Employees, Outside Directors and Consultants with exceptional qualifications and (c) linking Employees, Outside Directors and Consultants directly to stockholder interests through increased stock ownership.  Under the 2012 Plan, the Company is authorized to issue equity-based awards in the form of Options (that could constitute ISOs or NSOs), SARs, Restricted Shares or Stock Units.

The 2012 Plan was originally established effective as of October 5, 2012 with an initial term of ten (10) years.  The 2012 Plan was subsequently amended on December 28, 2018.  The 2012 Plan is hereby amended and restated effective as of the “Amendment Effective Date” as the Amended and Restated Cal-Maine Foods, Inc. 2012 Omnibus Long-Term Incentive Plan (the “Plan”).

ARTICLE 2.  DEFINITIONS.

2.1    "Affiliate" means any entity other than a Subsidiary, if the Company and/or one or more Subsidiaries own not less than 50% of such entity.

2.2    “Amendment Effective Date” shall mean October 2, 2020, subject to approval of the Plan at the annual meeting of the stockholders of the Company held on such date.

2.3    "Award" means an award of Options, SARs, Restricted Shares or Stock Units.

2.4    “Board" means the Company's Board of Directors, as constituted from time to time.

2.5    "Cause" means: 

(a)    An unauthorized use or disclosure by the Participant of the Company's confidential information or trade secrets, which use or disclosure causes material harm to the Company;

(b)    A material breach by the Participant of any agreement between the Participant and the Company;

(c)    A material failure by the Participant to comply with the Company's written policies or rules; 

(d)    The Participant's conviction of, or plea of "guilty" or "no contest" to, a felony under the laws of the United States or any State thereof;

(e)    The Participant's gross negligence or willful misconduct in connection with his or her performance of services for the Company or an Affiliate;

(f)    A continuing failure by the Participant to perform assigned duties after receiving written notification of such failure from the Board; or

(g)    A failure by the Participant to cooperate in good faith with a governmental or internal investigation of the Company or its directors, officers or employees, if the Company has requested the Participant's cooperation.

1

2.6    "Change in Control" means:

(a)    The consummation of a merger or consolidation of the Company with or into another entity or any other corporate reorganization, if persons who were not stockholders of the Company immediately prior to such merger, consolidation or other reorganization own immediately after such merger, consolidation or other reorganization 50% or more of the voting power of the outstanding securities of each of (i) the continuing or surviving entity and (ii) any direct or indirect parent corporation of such continuing or surviving entity;

(b)    The sale, transfer or other disposition of all or substantially all of the Company's assets to any other corporation or other legal person, and less than a majority of the combined voting power of the then-outstanding securities of such corporation or person immediately after such transaction is held in the aggregate by the holders of common stock immediately prior to such transaction;

(c)    A change in the composition of the Board, as a result of which fewer than 50% of the incumbent directors are directors who either:

(i)    Had been directors of the Company on the date 24 months prior to the date of such change in the composition of the Board (the "Original Directors"), (in the event Section 409A is applicable, “12 months” will be substituted for “24 months”); or

(ii)    Were appointed to the Board, or nominated for election to the Board, with the affirmative votes of at least a majority of the aggregate of (A) the Original Directors who were in office at the time of their appointment or nomination and (B) the directors whose appointment or nomination was previously approved in a manner consistent with this Paragraph (ii); or

(d)    Any transaction as a result of which any person becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing at least 50% of the total voting power represented by the Company's then outstanding voting securities.  For purposes of this Subsection (d), the term "person" shall have the same meaning as when used in Sections 13(d) and 14(d) of the Exchange Act but shall exclude (i) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or of a Parent or Subsidiary and (ii) a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of the common stock of the Company.
A transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Company’s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction.  Notwithstanding Section 2.6(d) above, any transfer of securities of the Company to Fred R. Adams, Jr. the Estate of Fred R. Adams, Jr., the Immediate Family Members of Fred Adams, Jr. and any Permitted Transferee shall not constitute a Change in Control.  “Immediate Family Members” is defined as the spouse of Fred R. Adams, Jr., his natural children, his sons-in-law and his grandchildren, including the estates of all of such persons.  For purposes of the foregoing, the estate of a person shall include only such person’s estate, and a person who receives a distribution from such estate shall not be an Immediate Family Member unless such person is otherwise included in the foregoing definition of Immediate Family Member.
As used herein “Permitted Transferee” includes:
(i)    an Immediate Family Member;
(ii)    a trust held for the sole or primary benefit of one or more Immediate Family Members or Permitted Transferees, including any trustee in such trustee’s capacity as such, provided that if a trust is not for the sole benefit of one or more Immediate Family Members or Permitted Transferees, an Immediate Family Member or Permitted Transferee must retain sole dispositive and exclusive power to direct the voting of the shares of Class A Common Stock held by such trust;
(iii)    a corporation, limited liability company or partnership, including but not limited to, a family limited partnership or similar limited liability company or corporation, or a single member limited liability company, provided that all of the equity interest in such entity is owned, directly or indirectly, by 
2

one or more Immediate Family Members or Permitted Transferees and an Immediate Family Member or Permitted Transferee retains sole dispositive and exclusive power to direct the voting of the shares of Class A Common Stock held by such entity;
(iv)    an Individual Retirement Account, as defined in Section 408(a) of the Internal Revenue Code, or a pension, profit sharing, stock bonus or other type of plan or trust of which an Immediate Family Member or Permitted Transferee is a participant or beneficiary and which satisfies the requirements for qualification under Section 401 of the Internal Revenue Code, provided that in each case an Immediate Family Member or Permitted Transferee retains sole dispositive and exclusive power to direct the voting of the shares of Class A Common Stock held by such account, plan or trust; or
(v)    any guardianship, conservatorship or custodianship for the benefit of an Immediate Family Member who has been adjudged disabled, incapacitated, incompetent or otherwise unable to manage his or her own affairs by a court of competent jurisdiction, including any guardian, conservator or custodian in such guardian’s, conservator’s or custodian’s capacity as such.
2.7    "Code" means the Internal Revenue Code of 1986, as amended.

2.8    "Committee" means the Long-Term Incentive Plan Committee of the Board, as further described in Article 3.

2.9    "Common Share" means one share of the common stock of the Company.

2.10    "Company" means Cal-Maine Foods, Inc., a Delaware corporation.

2.11    "Consultant" means a consultant or adviser who provides bona fide services to the Company, a Parent, a Subsidiary or an Affiliate as an independent contractor.

2.12    "Corporate Transaction" has the same meaning as set forth in Section 2.6 above (which defines "Change in Control"), except that the second sentence of the second paragraph of Section 2.6(d) shall not be given effect. 

2.13    "Employee" means a common-law employee of the Company, a Parent, a Subsidiary or an Affiliate.

2.14    "Exchange Act" means the Securities Exchange Act of 1934, as amended.

2.15    "Exercise Price" in the case of an Option, means the amount for which one Common Share may be purchased upon exercise of such Option, as specified in the applicable Stock Option Agreement.  "Exercise Price," in the case of a SAR, means an amount, as specified in the applicable SAR Agreement, which is subtracted from the Fair Market Value of one Common Share in determining the amount payable upon exercise of such SAR.

2.16    "Fair Market Value" of a Common Share as of any particular date means:
(a)    if the Common Shares are traded on a stock exchange,

(i)    and if the Common Shares are traded on that date, the closing sale price of a Common Share on that date; or

(ii)    and if the Common Shares are not traded on that date, the closing sale price of a Common Share on the last trading date immediately preceding that date;

as reported on the principal securities exchange on which the Common Shares are traded; or

(b)    if the Common Shares are traded in the over-the-counter market,
3

(i)    and if the Common Shares are traded on that date, the average between the high bid and low asked price on that date; or

(ii)    and if the Common Shares are not traded on that date, the average between the high bid and low asked price on the last trading date immediately preceding that date;

as reported in such over-the-counter market; provided, however, that (x) if the Common Shares are not so traded, or (y) if, in the discretion of the Committee, another means of determining the fair market value of a Common Share at such date shall be necessary or advisable, the Committee may provide for another method or means for determining such fair market value, which method or means shall comply with the requirements of a reasonable valuation method as described under Section 409A.

2.17    "Involuntary Termination" means the termination of the Participant's Service by reason of: 

(a)    The involuntary discharge of the Participant by the Company (or the Parent, Subsidiary or Affiliate employing him or her) for reasons other than Cause;

(b)    The voluntary resignation of the Participant following (i) a material adverse change in his or her authority or responsibilities with the Company (or the Parent, Subsidiary or Affiliate employing him or her), (ii) a material reduction in his or her base salary or (iii) receipt of notice that his or her principal workplace will be relocated by more than 30 miles as a result of which his or her commute increase by at least 30 miles; provided that (1) within 30 days of the initial existence of the condition or conditions under (i), (ii) or (iii) the Participant provides written notice to the Company of the existence of such condition or conditions, (2) the Company fails to remedy such condition or conditions within 30 days following the receipt of such written notice (the “Cure Period”), and the Participant terminates employment with the Company within a reasonable period of time, not to exceed 60 days, following the end of the Cure Period; or

(c)    Any other reason approved by the Committee.

2.18    "ISO" means an incentive stock option described in Section 422(b) of the Code.

2.19    "NSO" means a stock option not described in Sections 422 or 423 of the Code.

2.20    "Option" means an ISO or NSO granted under the Plan and entitling the holder to purchase Common Shares.

2.21    "Optionee" means an individual or estate holding an Option or SAR.

2.22    "Outside Director" means a member of the Board who is not an Employee.

2.23    "Own," "Owned," "Owner," "Ownership." a person or entity will be deemed to “Own,” to have “Owned,” to be the “Owner” of, or to have acquired “Ownership” of securities if such person or entity, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares voting power, which includes the power to vote or to direct the voting, with respect to such securities.  For this purpose, an entity means a corporation, partnership, limited liability company or other entity.

2.24    "Parent" means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, if each of the corporations other than the Company owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.  A corporation that attains the status of a Parent on a date after the adoption of the Plan shall be considered a Parent commencing as of such date.

2.25    "Participant" means an individual or estate holding an Award.
4

    2.26    "Plan" means this Amended and Restated Cal-Maine Foods, Inc. 2012 Omnibus Long-Term Incentive Plan, as amended from time to time.

2.27    "Restricted Share" means a Common Share awarded under the Plan.

2.28    "Restricted Stock Agreement" means the agreement between the Company and the recipient of a Restricted Share that contains the terms, conditions and restrictions pertaining to such Restricted Share.

2.29    "SAR" means a stock appreciation right granted under the Plan.

2.30    "SAR Agreement" means the agreement between the Company and an Optionee that contains the terms, conditions and restrictions pertaining to his or her SAR.

2.31    “Section 409A” shall mean Section 409A of the Code and all regulations and guidance promulgated thereunder as in effect from time to time.

2.32    "Service" means service as an Employee, Outside Director or Consultant.

2.33    "Stock Option Agreement" means the agreement between the Company and an Optionee that contains the terms, conditions and restrictions pertaining to his or her Option.

2.34    "Stock Unit" means a bookkeeping entry representing the equivalent of one Common Share, as awarded under the Plan.

2.35    "Stock Unit Agreement" means the agreement between the Company and the recipient of a Stock Unit that contains the terms, conditions and restrictions pertaining to such Stock Unit.

2.36    "Subsidiary" means any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.  A corporation that attains the status of a Subsidiary on a date after the adoption of the Plan shall be considered a Subsidiary commencing as of such date.

2.37    "Ten Percent Stockholder" means a person who Owns (or is deemed to Own pursuant to Section 424(d) of the Code) stock possessing more than ten percent of the total combined voting power of all classes of stock of the Company or any Subsidiary.

ARTICLE 3.  ADMINISTRATION.

3.1    Committee Composition.  The Long-Term Incentive Plan Committee of the Board shall administer the Plan.  The Committee shall consist exclusively of two or more members of the Board, who shall be appointed by the Board.  In addition, each member of the Committee shall meet the following requirements:

(a)    Any listing standards prescribed by the principal securities market on which the Company's equity securities are traded;

(b)    Such requirements as the Securities and Exchange Commission may establish for administrators acting under plans intended to qualify for exemption under Rule 16b-3 (or its successor) under the Exchange Act; and

(c)    Any other requirements imposed by applicable law, regulations or rules.

5

3.2    Committee Responsibilities.  The Committee shall (a) select the Employees, Outside Directors and Consultants who are to receive Awards under the Plan, (b) determine the type, number, vesting requirements and other features and conditions of such Awards, (c) determine to what extent any performance goals have been attained, (d) interpret the Plan, (e) make all other decisions relating to the operation of the Plan and (f) carry out any other duties delegated to it by the Board under the Plan.  The Committee may adopt such rules or guidelines as it deems appropriate to implement the Plan.  The Committee's determinations under the Plan shall be final and binding on all persons.

3.3    Non-Officer Grants.  The Board (or the Committee if the Board has delegated to it authority to further delegate its responsibilities) may delegate its authority to administer the Plan to an additional committee of the Board, composed of one or more directors of the Company, or to the extent permitted by applicable law one or more officers of the Company.  The members of such additional committee need not satisfy the requirements of Section 3.1.  Such committee or individual(s) may (a) administer the Plan with respect to Employees and Consultants who are not Outside Directors and are not considered officers of the Company under Section 16 of the Exchange Act, (b) grant Awards under the Plan to such Employees and Consultants and (c) subject to any limitations imposed under the terms of the authority delegated, determine all features and conditions of such Awards.  Within the limitations of this Section 3.3, any reference in the Plan to the Committee shall, where the context requires, include any such individual(s) or additional committee to whom the Board has delegated the required authority under this Section 3.3.

ARTICLE 4.  SHARES AVAILABLE FOR GRANTS.

4.1    Basic Limitation.  Common Shares issued pursuant to the Plan may be authorized but unissued shares or treasury shares.  The aggregate number of Common Shares that may be issued under the Plan shall not exceed 2,000,000.  Shares may be returned to the reserve pursuant to Section 4.2, but any such returns do not increase the aggregate number of shares that may be issued under the Plan.  Of that number, as of August 7, 2020, 233,617 Common Shares remained available for grant and as of the Amended Effective Date, an additional 1,000,000 Common Shares were authorized with respect to grants under the Plan.  On October 5, 2012, 500,000 shares were authorized for award by the shareholders.  In 2014, a stock split adjusted the aggregate number of shares authorized to 1,000,000.  The number of Common Shares that are subject to Awards outstanding at any time under the Plan shall not exceed the number of Common Shares that then remain available for issuance under the Plan.  Provided further, that a maximum of 1,233,617 Common Shares which are the remaining Common Shares available for award under the Plan may be issued upon the exercise of ISOs.  The limitations of this Section 4.1 and Section 4.2 shall be subject to adjustment pursuant to Article 12.

4.2    Shares Returned to Reserve.  To the extent that Options, SARs or Stock Units are forfeited or expire for any other reason before being exercised or settled in full, the Common Shares subject to such Options, SARs or Stock Units shall again become available for issuance under the Plan.  With respect to SARs, if the SAR is payable in Common Shares, all Common Shares to which the SARs relate are counted against the Plan limits, rather than the net number of Common Shares delivered upon exercise of the SAR.  If Restricted Shares or Common Shares issued upon the exercise of Options are reacquired by the Company pursuant to a forfeiture provision, then such Common Shares shall again become available for subsequent issuance under the Plan.  The following Common Shares may not again be made available for issuance as Awards under the Plan: (i) Common Shares delivered or withheld in payment of the exercise price of an Option, (ii) Common Shares delivered or withheld from payment of an Award to satisfy tax obligations with respect to the Award, and (iii) Common Shares repurchased on the open market with the proceeds of the exercise price of an Option. To the extent that an Award is settled in cash rather than Shares, the cash settlement shall not reduce the number of Shares available for issuance under the Plan.

4.3    Dividend Equivalents.  Any dividend equivalents paid or credited under the Plan shall not be applied against the number of Common Shares that may be issued under the Plan, whether or not such dividend equivalents are converted into Stock Units.

6

ARTICLE 5.  ELIGIBILITY.

5.1    Incentive Stock Options.  Only Employees who are common-law employees of the Company, a Parent or a Subsidiary shall be eligible for the grant of ISOs.  In addition, an Employee who is a Ten Percent Stockholder shall not be eligible for the grant of an ISO unless the additional requirements set forth in Section 422(c)(5) of the Code are satisfied.

5.2    Other Grants.  Only Employees, Outside Directors and Consultants shall be eligible for the grant of Restricted Shares, Stock Units, NSOs or SARs.

ARTICLE 6.  OPTIONS.

6.1    Stock Option Agreement.  Each grant of an Option under the Plan shall be evidenced by a Stock Option Agreement between the Optionee and the Company.  Such Option shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan.  The Stock Option Agreement shall specify whether the Option is an ISO or an NSO.  The provisions of the various Stock Option Agreements entered into under the Plan need not be identical.

6.2    Number of Shares.  Each Stock Option Agreement shall specify the number of Common Shares subject to the Option, which number shall adjust in accordance with Article 12.  Options granted to an Optionee in a single fiscal year of the Company shall not cover more than 75,000 Common Shares, except that Options granted to a new Employee in the fiscal year of the Company in which his or her Service commences may pertain to a maximum of 100,000 Common Shares.  The limitations set forth in the preceding sentence shall be subject to adjustment in accordance with Article 12.

6.3    Exercise Price.  Each Stock Option Agreement shall specify the Exercise Price, which shall not be less than 100% of the Fair Market Value of a Common Share on the date of grant.  Notwithstanding the above, a Ten Percent Stockholder will not be granted an ISO unless the Exercise Price of each Option is at least 110% of the Fair Market Value of a Common Share on the date of grant and the Option is not exercisable after the expiration of five years from the date of grant.  The preceding sentence shall not apply to Options granted pursuant to an assumption of, or substitution for, another option in a manner that would satisfy the requirements of Section 424(a) of the Code, whether or not such section is applicable.

6.4    Exercisability and Term.  Each Stock Option Agreement shall specify the date or event when all or any installment of the Option is to become vested and/or exercisable.  The Stock Option Agreement shall also specify the term of the Option; provided that the term of an Option shall in no event exceed 10 years from the date of grant (5 years for an ISO for a Ten (10%) Percent Stockholder). A Stock Option Agreement may provide for accelerated vesting and exercisability in the event of the Optionee's death, disability or retirement or other events and may provide for expiration prior to the end of its term in the event of the termination of the Optionee's Service.

6.5    Effect of Change in Control.  The Committee may determine, at the time of granting an Option or thereafter, that such Option shall become vested and exercisable as to all or part of the Common Shares subject to such Option in the event that a Change in Control occurs with respect to the Company or in the event that the Optionee is subject to an Involuntary Termination after a Change in Control.  However, in the case of an ISO, the acceleration of vesting and exercisability shall not occur without the Optionee's written consent.  In addition, acceleration of vesting and exercisability may be required under Section 12.3.

6.6    Death of Optionee.  After an Optionee's death, any vested and exercisable Options held by such Optionee may be exercised by his or her beneficiary or beneficiaries.  Each Optionee may designate one or more beneficiaries for this purpose by filing the prescribed form with the Company.  A beneficiary designation may be changed by filing the prescribed form with the Company at any time before the Optionee's death.  If no beneficiary was designated or if no designated beneficiary survives the Optionee, then any vested and exercisable Options held by the Optionee may be exercised by his or her estate.

7

6.7    Modification or Assumption of Options.  Except for adjustments pursuant to Section 12.1 or actions permitted to be taken by the Committee under Section 12.3 in the event of a Change in Control, unless approved by the stockholders of the Company, (a) the Exercise Price for any outstanding Option or SAR granted under this Plan may not be decreased after the date of grant and (b) an outstanding Option or SAR that has been granted under this Plan may not, as of any date that such Option or SAR has a per share Exercise Price that is greater than the then current fair market value of a Common Share, be surrendered to the Company as consideration for the grant of a new Option or SAR with a lower Exercise Price, Restricted Shares, Stock Units, a cash payment or Common Shares.  The foregoing notwithstanding, no modification of an Option shall, without the consent of the Optionee, materially impair his or her rights or obligations under such Option.

6.8    Buyout Provisions.  Upon approval of the Committee, the Company may repurchase a previously granted Option from a Participant by mutual agreement before such Option has been exercised by payment to the Participant of the amount per Common Share by which:  (i) the fair market value of the Common Shares subject to the Option on the business day immediately preceding the date of purchase exceeds (ii) the Exercise Price; provided, however, that no such buyout shall be permitted if prohibited by Section 6.7.

6.9    Tax Considerations Related to Option Modifications.  Notwithstanding anything to the contrary in Section 6.7 or 6.8, in no event shall a modification of an Option otherwise permitted or consented to under the terms of the Plan be given effect if such modification would cause the Option to become a stock right subject to Section 409A (where such Option had not previously been so subject) unless the parties explicitly acknowledge and consent to the modification as one having that effect.

6.10    ISO Limitations.  To the extent that the aggregate Fair Market Value (determined at the time of grant) of Common Stock with respect to which ISOs are exercisable for the first time by any Optionee during any calendar year (under all plans of the Company and Affiliates or Subsidiaries) exceeds $100,000 (or such other limit established in the Code) or otherwise does not comply with the rules governing ISOs, the Options or portions thereof that exceed such limit (according to the order in which they were granted) or otherwise do not comply with the rules will be treated as NSOs, notwithstanding any contrary provision of the applicable Option Agreement(s).

6.11    No Dividend Equivalent Rights.  Participants holding Options shall not be entitled to any dividend equivalent rights for any period of time prior to exercise of the Option.

ARTICLE 7.  PAYMENT FOR OPTION SHARES.

7.1    General Rule.  The entire Exercise Price of Common Shares issued upon exercise of Options shall be payable in cash or cash equivalents at the time when such Common Shares are purchased, except that the Committee at its sole discretion may (a) accept payment of the Exercise Price in any other form(s) described in this Article 7 and (b) to prohibit the use of any method of consideration otherwise permitted under the Stock Option Agreement as long as such prohibition does not render the Optionee unable to exercise an otherwise exercisable Option.  However, if the Optionee is an Outside Director or executive officer of the Company, he or she may pay the Exercise Price only with a form of consideration permitted under Section 13(k) of the Exchange Act.

7.2    Exercise/Sale.  With the Committee's consent, all or any part of the Exercise Price and any withholding taxes may be paid by delivering (on a form prescribed by the Company) an irrevocable direction to a securities broker approved by the Company to sell all or part of the Common Shares being purchased under the Plan and to deliver all or part of the sales proceeds to the Company.

7.3    Other Forms of Payment.  With the Committee's consent, all or any part of the Exercise Price and any withholding taxes may be paid in any other form of consideration (including through delivery of a full-recourse promissory note) that is consistent with applicable laws, regulations and rules.  With the Committee’s consent, other permitted forms of payment are as follows:

(a)Pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of the stock subject to the Option, results in either the receipt of cash (or check) by 
8

the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds;

(b)If an option is an NSO, by a “net exercise” arrangement pursuant to which the Company will reduce the number of shares of Common Stock issuable upon exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price; provided, however, that the Company will accept cash or other payment from the Participant to the extent of any remaining balance of the aggregate exercise price not satisfied by such reduction in the number of whole shares to be issued.  Shares of Common Stock will no longer be subject to an Option and will not be exercisable thereafter to the extent that:

(i)    shares issuable upon exercise are reduced to pay the exercise price pursuant to the “net exercise;”

(ii)    shares are delivered to the Participant as a result of such exercise, and (iii) shares are withheld to satisfy tax withholding obligations; or

(iii)    in any form of legal consideration that may be acceptable to the Committee and specified in the applicable Option Agreement.

ARTICLE 8.  STOCK APPRECIATION RIGHTS.

8.1    SAR Agreement.  Each grant of a SAR under the Plan shall be evidenced by a SAR Agreement between the Optionee and the Company.  Such SAR shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan.  The provisions of the various SAR Agreements entered into under the Plan need not be identical.

8.2    Number of Shares.  Each SAR Agreement shall specify the number of Common Shares to which the SAR pertains, which number shall adjust in accordance with Article 12.  SARs granted to an Optionee in a single fiscal year shall in no event pertain to more than 75,000 Common Shares, except that SARs granted to a new Employee in the fiscal year of the Company in which his or her Service commences may pertain to a maximum of 100,000 Common Shares.  The limitations set forth in the preceding sentence shall be subject to adjustment in accordance with Article 12.

8.3    Exercise Price.  Each SAR Agreement shall specify the Exercise Price, which shall in no event be less than 100% of the Fair Market Value of a Common Share on the date of grant.  The preceding sentence shall not apply to SARs granted pursuant to an assumption of, or substitution for, another SAR in a manner that would satisfy the requirements of Section 424(a) of the Code if such section were applicable.

8.4    Exercisability and Term.  Each SAR Agreement shall specify the date when all or any installment of the SAR is to become vested and exercisable.  The SAR Agreement shall also specify the term of the SAR; provided that the term of a SAR shall in no event exceed ten (10) years from the date of the grant.  A SAR Agreement may provide for accelerated vesting and exercisability in the event of the Optionee's death, disability or retirement or other events and may provide for expiration prior to the end of its term in the event of the termination of the Optionee's Service.  A SAR granted under the Plan may provide that it will be vested and exercisable only in the event of a Change in Control.

8.5    Effect of Change in Control.  The Committee may determine, at the time of granting a SAR or thereafter, that such SAR shall become vested and exercisable as to all or part of the Common Shares subject to such SAR in the event that the Company is subject to a Change in Control or in the event that the Optionee is subject to an Involuntary Termination after a Change in Control.  In addition, acceleration of vesting and exercisability may be required under Section 12.3.

8.6    Exercise of SARs.  Upon exercise of a SAR, the Optionee (or any person having the right to exercise the SAR after his or her death) shall receive from the Company (a) Common Shares, (b) cash or (c) a 
9

combination of Common Shares and cash, as the Committee shall determine.  The amount of cash and/or the Fair Market Value of Common Shares received upon exercise of SARs shall, in the aggregate, not exceed the amount by which the Fair Market Value (on the date of surrender) of the Common Shares subject to the SARs exceeds the Exercise Price.  If, on the date when a SAR expires, the Exercise Price is less than the Fair Market Value on such date but any portion of such SAR has not been exercised or surrendered, then such SAR shall automatically be deemed to be exercised as of such date with respect to such portion. A SAR Agreement may also provide for an automatic exercise of the SAR on an earlier date.

8.7    Death of Optionee.  After an Optionee's death, any vested and exercisable SARs held by such Optionee may be exercised by his or her beneficiary or beneficiaries.  Each Optionee may designate one or more beneficiaries for this purpose by filing the prescribed form with the Company.  A beneficiary designation may be changed by filing the prescribed form with the Company at any time before the Optionee's death.  If no beneficiary was designated or if no designated beneficiary survives the Optionee, then any vested and exercisable SARs held by the Optionee may be exercised by his or her estate.

8.8    Modification or Assumption of SARs.  Except for adjustments pursuant to Section 12.1 or actions permitted to be taken by the Committee under Section 12.3 in the event of a Change in Control, unless approved by the stockholders of the Company, (a) the Exercise Price for any outstanding SAR granted under this Plan may not be decreased after the date of grant and (b) an outstanding SAR that has been granted under this Plan may not, as of any date that such SAR has a per share Exercise Price that is greater than the then current fair market value of a Common Share, be surrendered to the Company as consideration for the grant of a new Option or SAR with a lower Exercise Price, Restricted Shares, Stock Units, a cash payment or Common Shares.  The foregoing notwithstanding, no modification of a SAR shall, without the consent of the Optionee, materially impair his or her rights or obligations under such SAR.

8.9    Tax Considerations Related to SAR Modifications.  Notwithstanding anything to the contrary in Section 8.8, in no event shall a modification of a SAR otherwise permitted or consented to under the terms of the Plan be given effect if such modification would cause the SAR to become a stock right subject to Section 409A (where such SAR had not previously been so subject) unless the parties explicitly acknowledge and consent to the modification as one having that effect.

8.10    No Dividend Equivalent Rights.  Participants holding SARs shall not be entitled to any dividend equivalent rights for any period of time prior to exercise of the SAR. 

ARTICLE 9.  RESTRICTED SHARES.

9.1    Restricted Stock Agreement.  Each grant of Restricted Shares under the Plan shall be evidenced by a Restricted Stock Agreement between the recipient and the Company.  Such Restricted Shares shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan.  The provisions of the various Restricted Stock Agreements entered into under the Plan need not be identical.

9.2    Payment for Awards.  Restricted Shares may be sold or awarded under the Plan for such consideration as the Committee may determine, including (without limitation) cash, cash equivalents, property, past services and future services, and such other methods of payment as are permitted under applicable law.  If the Participant is an Outside Director or executive officer of the Company, he or she may pay for Restricted Shares with a promissory note only to the extent permitted by Section 13(k) of the Exchange Act.  Within the limitations of the Plan and with prior stockholder approval, the Committee may accept the cancellation of outstanding options in return for the grant of Restricted Shares.

9.3    Vesting Conditions.  Each Award of Restricted Shares may or may not be subject to vesting. Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in the Restricted Stock Agreement.  Such conditions, at the Committee's discretion, may include one or more performance goals.  A Restricted Stock Agreement may provide for accelerated vesting in the event of the Participant's death, disability, retirement or other events.  The Committee may determine, at the time of granting Restricted Shares or thereafter, 
10

that all or part of such Restricted Shares shall become vested in the event that a Change in Control occurs with respect to the Company or in the event that the Participant is subject to an Involuntary Termination after a Change in Control.

9.4    Voting and Dividend Rights.  The holders of Restricted Shares awarded under the Plan shall have the same voting, dividend and other rights as the Company's other stockholders.  A Restricted Stock Agreement, however, may require that any cash dividends paid on Restricted Shares (a) be accumulated and paid when such Restricted Shares vest or (b) be invested in additional Restricted Shares.  Such additional Restricted Shares shall be subject to the same conditions and restrictions as the Award with respect to which the dividends were paid. If the vesting of the Restricted Shares is based upon the attainment of performance goals, any and all cash and stock dividends paid with respect to such Restricted Shares shall be subject to the attainment of the performance goals applicable to the underlying Restricted Shares.

9.5    Section 83(b) Election.  If a Participant makes an election under Section 83(b) of the Code to be taxed with respect to the Restricted Shares as of the date of transfer of the Restricted Shares rather than as of the date or dates upon which the Participant would otherwise be taxable under Section 83(a) of the Code, the Participant shall be required to deliver a copy of such election to the Company promptly after filing such election with the Internal Revenue Service.

ARTICLE 10.  STOCK UNITS.

10.1    Stock Unit Agreement.  Each grant of Stock Units under the Plan shall be evidenced by a Stock Unit Agreement between the recipient and the Company.  Such Stock Units shall be subject to all applicable terms of the Plan and may be subject to any other terms that are not inconsistent with the Plan.  The provisions of the various Stock Unit Agreements entered into under the Plan need not be identical.

10.2    Payment for Awards.  To the extent that an Award is granted in the form of Stock Units, no cash consideration shall be required of the Award recipients.

10.3    Vesting Conditions.  Each Award of Stock Units may or may not be subject to vesting.  Vesting shall occur, in full or in installments, upon satisfaction of the conditions specified in the Stock Unit Agreement.  Such conditions, at the Committee's discretion, may include one or more performance goals.  A Stock Unit Agreement may provide for accelerated vesting in the event of the Participant's death, disability, retirement or other events.  The Committee may determine, at the time of granting Stock Units or thereafter, that all or part of such Stock Units shall become vested in the event that the Company is subject to a Change in Control or in the event that the Participant is subject to an Involuntary Termination after a Change in Control.  In addition, acceleration of vesting may be required under Section 12.3.

10.4    Voting and Dividend Rights.  The holders of Stock Units shall have no voting rights. Prior to settlement or forfeiture, any Stock Unit awarded under the Plan may, at the Committee's discretion, carry with it a right to dividend equivalents.  Such right entitles the holder to be credited with an amount equal to all cash dividends paid on one Common Share while the Stock Unit is outstanding.  Dividend equivalents may be converted into additional Stock Units.  Settlement of dividend equivalents may be made in the form of cash, in the form of Common Shares, or in a combination of both.  Prior to distribution, any dividend equivalents that are not paid shall be subject to the same conditions and restrictions as the Stock Units to which they attach. If the vesting of the Stock Units is based upon the attainment of performance goals, any and all dividend equivalent rights with respect to the Stock Rights shall be subject to the attainment of the performance goals applicable to the underlying Stock Rights.

10.5    Form and Time of Settlement of Stock Units.  Settlement of vested Stock Units may be made in the form of (a) cash, (b) Common Shares or (c) any combination of both, as determined by the Committee.  The actual number of Stock Units eligible for settlement may be larger or smaller than the number included in the original Award, based on predetermined performance factors. Methods of converting Stock Units into cash may include (without limitation) a method based on the average Fair Market Value of Common Shares over a series of trading days. Vested Stock Units shall be settled in a lump sum.  The distribution shall occur  when all vesting 
11

conditions applicable to the Stock Units have been satisfied or have lapsed. Payment under a Stock Unit Agreement shall be made at such time as is specified in the Stock Unit Agreement.

10.6    Death of Recipient.  Any Stock Units Award that becomes payable after the recipient's death shall be distributed to the recipient's beneficiary or beneficiaries.  Each recipient of a Stock Units Award under the Plan shall designate one or more beneficiaries for this purpose by filing the prescribed form with the Company.  A beneficiary designation may be changed by filing the prescribed form with the Company at any time before the Award recipient's death.  If no beneficiary was designated or if no designated beneficiary survives the Award recipient, then any Stock Units Award that becomes payable after the recipient's death shall be distributed to the recipient's estate.

10.7    Creditors' Rights.  A holder of Stock Units shall have no rights other than those of a general creditor of the Company. Stock Units represent an unfunded and unsecured obligation of the Company, subject to the terms and conditions of the applicable Stock Unit Agreement.

ARTICLE 11.  OTHER AWARDS.

11.1    Awards under Other Plans.  The Company may grant awards under other plans or programs.  Such awards may be settled in the form of Common Shares issued under this Plan.  Such Common Share shall be treated for all purposes under the Plan like Common Shares issued in settlement of Stock Units and shall, when issued, reduce the number of Common Shares available under Article 4.

ARTICLE 12.  PROTECTION AGAINST DILUTION.

12.1    Adjustments.  In the event of a subdivision of the outstanding Common Shares, a declaration of a dividend payable in Common Shares or a combination or consolidation of the outstanding Common Shares (by reclassification or otherwise) into a lesser number of Common Shares, corresponding adjustments shall automatically be made in each of the following:

(a)    The number of Options, SARs, Restricted Shares and Stock Units available for future Awards under Article 4;

(b)    The limitations set forth in Sections 6.2 and 8.2;

(c)    The number of Common Shares covered by each outstanding Option, SAR or Restricted Share;

(d)    The Exercise Price under each outstanding Option and SAR and the repurchase price, if any, applicable to Restricted Shares; or

(e)    The number of Stock Units included in any prior Award that has not yet been settled.  In the event of a declaration of an extraordinary dividend payable in a form other than Common Shares in an amount that has a material effect on the price of Common Shares, a recapitalization, a spin-off or a similar occurrence, the Committee shall make such adjustments as it, in its sole discretion, deems appropriate in one or more of the foregoing.  Except as provided in this Article 12, a Participant shall have no rights by reason of any issuance by the Company of stock of any class or securities convertible into stock of any class, any subdivision or consolidation of shares of stock of any class, the payment of any stock dividend or any other increase or decrease in the number of shares of stock of any class.

12.2    Dissolution or Liquidation.     To the extent not previously exercised or settled, Options, SARs and Stock Units shall terminate immediately prior to the dissolution or liquidation of the Company.

12.3    Reorganizations.  In the event that the Company is party to a Corporate Transaction, all outstanding Awards shall be subject to the definitive transaction agreement.  Such agreement shall provide for one or more of the following:
12

(a)    The continuation of such outstanding Awards by the Company (if the Company is the surviving corporation).

(b)    The assumption of such outstanding Awards by the surviving corporation or its parent, provided that the assumption of Options or SARs shall comply with Section 409A of the Code, if applicable, and with Section 424(a) of the Code for any Options that are ISOs.

(c)    The substitution by the surviving corporation or its parent of new awards for such outstanding Awards, provided that the substitution of Options or SARs shall comply with Section 409A of the Code, if applicable, and with Section 424(a) of the Code for any Options that are ISOs.

(d)    The cancellation of such outstanding Options and SARs.  The Optionees shall be able to exercise vested Options and SARs during a period of not less than five full business days preceding the closing date of the transaction, unless (i) a shorter period is required to permit a timely closing of such transaction and (ii) such shorter period still offers the Optionees a reasonable opportunity to exercise such Options and SARs.  Any exercise of such Options and SARs during such period may be contingent on the closing of the transaction.

(e)    The cancellation of vested outstanding Options and SARs and a payment to the Optionees equal to the excess of (i) the Fair Market Value of the Common Shares subject to such Options and SARs as of the closing date of the transaction over (ii) their Exercise Price.  Such payment shall be made in the form of cash, cash equivalents, or securities of the surviving corporation or its parent with a Fair Market Value equal to the required amount.  If the Exercise Price of the Common Shares subject to such Options and SARs exceeds the Fair Market Value of such Common Shares, then such Options and SARs may be canceled without making a payment to the Optionees.  For purposes of this Subsection (e), the Fair Market Value of any security shall be determined without regard to any vesting conditions that may apply to such security.  Notwithstanding the above, vested ISOs may be assumed by the surviving corporation or its parent instead of being canceled as long as Section 424(a) of the Code is met.

(f)    The cancellation of outstanding vested Stock Units and a payment to the Participants equal to the Fair Market Value of the Common Shares subject to such Stock Units as of the earliest of the closing date of the transaction or a date that is not later than the date that is two and one-half (2 1⁄2) months after the end of the calendar year of vesting.  Such payment shall be made in the form of cash, cash equivalents, or securities of the surviving corporation or its parent with a Fair Market Value equal to the required amount.  Such payment shall be made in a lump sum. For purposes of this Subsection (f), the Fair Market Value of any security shall be determined without regard to any vesting conditions that may apply to such security.

ARTICLE 13.  PAYMENT OF DIRECTOR'S FEES IN SECURITIES.

13.1    Effective Date.  No provision of this Article 13 shall be effective unless and until the Board has determined to implement such provision.

13.2    Elections to Receive NSOs, Restricted Shares or Stock Units.  An Outside Director may elect to receive his or her annual retainer payments and/or meeting fees from the Company in the form of cash, NSOs, Restricted Shares or Stock Units, or a combination thereof, as determined by the Board.  Such NSOs, Restricted Shares and Stock Units shall be issued under the Plan.  An election under this Article 13 shall be filed with the Company on the prescribed form.

13.3    Number and Terms of NSOs, Restricted Shares or Stock Units.  The number of NSOs, Restricted Shares or Stock Units to be granted to Outside Directors in lieu of annual retainers and meeting fees that would otherwise be paid in cash shall be calculated in a manner determined by the Board.  The terms of such NSOs, Restricted Shares or Stock Units shall also be determined by the Board.

13

ARTICLE 14.  LIMITATION ON RIGHTS.

14.1    Retention Rights.  Neither the Plan nor any Award granted under the Plan shall be deemed to give any individual a right to remain an Employee, Outside Director or Consultant.  The Company and its Parents, Subsidiaries and Affiliates reserve the right to terminate the Service of any Employee, Outside Director or Consultant at any time, with or without cause, subject to applicable laws, the Company's certificate of incorporation and by-laws and a written employment agreement (if any).

14.2    Stockholders' Rights.  Except as set forth in Section 9.4 or Section 10.4 above, a Participant shall have no dividend rights, voting rights or other rights as a stockholder with respect to any Common Shares covered by his or her Award prior to the time when a stock certificate for such Common Shares is issued or, if applicable, the time when he or she becomes entitled to receive such Common Shares by filing any required notice of exercise and paying any required Exercise Price.  No adjustment shall be made for cash dividends or other rights for which the record date is prior to such time, except as expressly provided in the Plan.

14.3    Regulatory Requirements.  Any other provision of the Plan notwithstanding, the obligation of the Company to issue Common Shares under the Plan shall be subject to all applicable laws, rules and regulations and such approval by any regulatory body as may be required.  The Company reserves the right to restrict, in whole or in part, the delivery of Common Shares pursuant to any Award prior to the satisfaction of all legal requirements relating to the issuance of such Common Shares, to their registration, qualification or listing or to an exemption from registration, qualification or listing.

ARTICLE 15. TAXES.

15.1    General.  To the extent required by applicable federal, state, local or foreign law, a Participant or his or her successor shall make arrangements satisfactory to the Company for the satisfaction of any withholding tax obligations that arise in connection with the Plan.  The Company shall not be required to issue any Common Shares or make any cash payment under the Plan until such obligations are satisfied.

15.2    Share Withholding.  To the extent that applicable law subjects a Participant to tax withholding obligations, the Committee shall require that the Participant satisfy such withholding obligations by remitting cash to the Company unless, in the Company’s discretion, the Company decides to withhold all or a portion of any Common Shares that otherwise would be issued to the Participant.  Such Common Shares shall be valued at their Fair Market Value on the date when they are withheld.  This Section 15.2 shall apply only to the minimum extent required by applicable tax laws.

15.3    Section 409A Matters.  Unless otherwise expressly set forth in an Award agreement, it is intended that Awards granted under the Plan shall be exempt from Section 409A, and any ambiguity in the terms of Awards and of the Plan shall be interpreted consistently with this intent.  To the extent the Committee determines that any Award granted under the Plan is subject to Section 409A, the agreement evidencing such Award will incorporate the terms and conditions required by Section 409A.  To the extent applicable, the Plan and agreement will be interpreted in accordance with Section 409A.  Notwithstanding any provision of the Plan, in the event that following the Amendment Effective Date the Committee determines that any Award may be subject to Section 409A, the Committee may adopt such amendments to the Plan and/or the applicable agreement or adopt policies and procedures or take any other action or actions, including an action or amendment with retroactive effect, that the Committee determines is necessary or appropriate to (i) exempt the Award from the application Section 409A or (ii) comply with the requirements of Section 409A.  Notwithstanding anything to the contrary in this Plan (or any Award agreement), if the Common Shares are publicly traded, and if a Participant holding an Award that it determined to be “deferred compensation” under Section 409A is a “specified employee” for purposes of Section 409A, no distribution or payment of any amount that is due because of a “separation from service” (as defined in Section 409A o) will be issued or paid before the date that is six (6) months following the date of such Participant’s “separation of service” or, if earlier, the date of the Participant’s death, unless such distribution or payment can be made in a manner that complies with Section 409A, and any amounts so deferred with be paid in a lump sum on the day after such six (6) month period elapses.
14

ARTICLE 16.  LIMITATION ON PAYMENTS.

16.1    Scope of Limitation.  This Article 16 shall apply to an Award only if:

(a)    The independent auditors selected for this purpose by the Committee (the "Auditors") determine that the after-tax value of such Award to the Participant, taking into account the effect of all federal, state and local income taxes, employment taxes and excise taxes applicable to the Participant (including the excise tax under Section 4999 of the Code), will be greater after the application of this Article 16 than it was before the application of this Article 16; or

(b)    The Committee, at the time of making an Award under the Plan or at any time thereafter, specifies in writing that such Award shall be subject to this Article 16 (regardless of the after-tax value of such Award to the Participant). 

If this Article 16 applies to an Award, it shall supersede any contrary provision of the Plan or of any Award granted under the Plan.

16.2    Basic Rule.  In the event that the Auditors determine that any payment or transfer by the Company under the Plan to or for the benefit of a Participant (a "Payment") would be nondeductible by the Company for federal income tax purposes because of the provisions concerning "excess parachute payments" in Section 280G of the Code, then the aggregate present value of all Payments shall be reduced (but not below zero) to the Reduced Amount.  For purposes of this Article 16, the "Reduced Amount" shall be the amount, expressed as a present value, which maximizes the aggregate present value of the Payments without causing any Payment to be nondeductible by the Company because of Section 280G of the Code.

16.3    Reduction of Payments.  If the Auditors determine that any Payment would be nondeductible by the Company because of Section 280G of the Code, then the Company shall promptly give the Participant notice to that effect and a copy of the detailed calculation thereof and of the Reduced Amount.  If none of the payments are subject to Section 409A, the Participant may then elect, in his or her sole discretion, which and how much of the Payments shall be eliminated or reduced (as long as after such election the aggregate present value of the Payments equals the Reduced Amount) and shall advise the Company in writing of his or her election within 10 days of receipt of notice.  If no such election is made by the Participant within such 10-day period, or if any Payment is subject to Section 409A, the reduction will occur in the following order: (i) cancellation of acceleration of vesting of any equity Awards for which the exercise price (if any) exceeds the then-Fair Market Value of the underlying equity; (ii) reduction of cash payments (with such reduction being applied to the payments in the reverse order in which they would otherwise be made (that is, later payments will be reduced before earlier payments )); and (iii) cancellation of acceleration of vesting of equity Awards not covered under (i) above; provided, however, that in the event that acceleration of vesting of equity Awards is to be canceled, such acceleration of vesting will be canceled in the reverse order of the date of grant of such equity Awards (that is, later equity Awards will be canceled before earlier equity awards).  If two or more equity Awards are granted on the same date, each Award will be reduced on a pro-rata basis.  For purposes of this Article 16, present value shall be determined in accordance with Section 280G(d)(4) of the Code. All determinations made by the Auditors under this Article 16 shall be binding upon the Company and the Participant and shall be made within 60 days of the date when a Payment becomes payable or transferable.  As promptly as practicable following such determination and the elections hereunder, the Company shall pay or transfer to or for the benefit of the Participant such amounts as are then due to him or her under the Plan and shall promptly pay or transfer to or for the benefit of the Participant in the future such amounts as become due to him or her under the Plan.

16.4    Overpayments and Underpayments.  As a result of uncertainty in the application of Section 280G of the Code at the time of an initial determination by the Auditors hereunder, it is possible that Payments will have been made by the Company which should not have been made (an "Overpayment") or that additional Payments which will not have been made by the Company could have been made (an "Underpayment"), consistent in each case with the calculation of the Reduced Amount hereunder.  In the event that the Auditors, based upon the assertion 
15

of a deficiency by the Internal Revenue Service against the Company or the Participant that the Auditors believe has a high probability of success, determine that an Overpayment has been made, such Overpayment shall be treated for all purposes as a loan to the Participant that he or she shall repay to the Company, together with interest at the applicable federal rate provided in Section 7872(f)(2) of the Code; provided, however, that no amount shall be payable by the Participant to the Company if and to the extent that such payment would not reduce the amount that is subject to taxation under Section 4999 of the Code.  In the event that the Auditors determine that an Underpayment has occurred, such Underpayment shall promptly be paid or transferred by the Company to or for the benefit of the Participant, together with interest at the applicable federal rate provided in Section 7872(f)(2) of the Code.

16.5    Related Corporations.  For purposes of this Article 16, the term "Company" shall include affiliated corporations to the extent determined by the Auditors in accordance with Section 280G(d)(5) of the Code.

ARTICLE 17.  FUTURE OF THE PLAN.

17.1    Term of the Plan.  The Plan, as set forth herein, shall become effective on October 2, 2020.  The Plan shall remain in effect until the earlier of (a) the date when the Plan is terminated under Section 17.2 or (b) October 2, 2032.

17.2    Amendment or Termination.  Except as provided in Section 17.3, the Board may, at any time and for any reason, amend or terminate the Plan. No Awards shall be granted under the Plan after the termination thereof.  The termination of the Plan, or any amendment thereof, shall not affect any Award previously granted under the Plan.

17.3    Stockholder Approval.  No amendment to the Plan may:

(a)    without the approval of the stockholders, (i) increase, subject to adjustments permitted herein, the maximum number of Common Shares that may be issued through the Plan, (ii) materially increase the benefits accruing to Participants under the Plan, (iii) materially expand the classes of persons eligible to participate in the Plan, (iv) expand the types of Awards available for grant under the Plan, (v) materially extend the term of the Plan, (vi) materially change the method of determining the Exercise Price of Options or SARs, or (vii) amend Sections 6.7 or 8.8 to permit a reduction in the Exercise Price of Options or SARs; or

(b)    materially impair, without the consent of the recipient, an Award previously granted.

ARTICLE 18.  MISCELLANEOUS.

18.1    Unfunded Plan/No Establishment of a Trust Fund.  Nothing contained in the Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Company and any Participant, beneficiary, legal representative, or any other person.  To the extent that any person acquires a right to receive payments from the Company under the Plan, such right shall be no greater than the right of an unsecured general creditor of the Company.  All payments to be made hereunder shall be paid from the general funds of the Company and no special or separate fund shall be established and no segregation of assets shall be made to assure payment of such amounts, except as expressly set forth in the Plan.  No property shall be set aside nor shall a trust fund of any kind be established to secure the rights of any Participant under the Plan.  The Plan is not intended to be subject to the Employee Retirement Income Security Act of 1974, as amended.

18.2    Indemnification of the Committee.  The Company shall indemnify each present and future member of the Committee against, and each member of the Committee shall be entitled without further action on his or her part to indemnity from the Company for, all expenses (including attorney's fees, the amount of judgments and the amount of approved settlements made with a view to the curtailment of costs of litigation, other than amounts paid to the Company itself) reasonably incurred by such member in connection with or arising out of any action, suit or proceeding in which such member may be involved by reason of such member being or having been a member of 
16

the Committee, whether or not he or she continues to be a member of the Committee at the time of incurring the expenses, including, without limitation, matters as to which such member shall be finally adjudged in any action, suit or proceeding to have been negligent in the performance of such member's duty as a member of the Committee.  However, this indemnity shall not include any expenses incurred by any member of the Committee in respect of matters as to which such member shall be finally adjudged in any action, suit or proceeding to have been guilty of willful misconduct in the performance of his duty as a member of the Committee.  In addition, no right of indemnification under the Plan shall be available to or enforceable by any member of the Committee unless, within 60 days after institution of any action, suit or proceeding, such member shall have offered the Company, in writing, the opportunity to handle and defend same at its own expense.  This right of indemnification shall inure to the benefit of the heirs, executors or administrators of each member of the Committee and shall be in addition to all other rights to which a member of the Committee may be entitled as a matter of law, contract or otherwise.

18.3    Severability.  In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.

18.4    Headings.  Headings of Articles and Sections are included for convenience of reference only and do not constitute part of the Plan and shall not be used in construing the terms and provisions of the Plan.

18.5    Other Compensation Plans.  The adoption of the Plan shall not affect any other option, incentive or other compensation or benefit plans in effect for the Company or any Affiliate, nor shall the Plan preclude the Company from establishing any other forms of incentive compensation arrangements for Employees, Directors or Consultants.

18.6    Successors.  All obligations of the Company under the Plan with respect to Awards granted hereunder shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

18.7    Law Limitations/Governmental Approvals.  The granting of Awards and the issuance of Common Shares under the Plan shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.  All grants and awards under the Plan are subject to the condition subsequent that an appropriate Agreement be signed by the parties.

18.8    Regulatory Approval and Listings.  The Company shall use its best efforts to file with the Securities and Exchange Commission as soon as practicable following approval of the Plan by the stockholders of the Company as provided in Article I, and keep continuously effective, a Registration Statement on Form S-8 with respect to Common Shares subject to Awards.

18.9    Delivery of Title.  The Company shall have no obligation to issue or deliver evidence of title for Common Shares issued under the Plan prior to (a) obtaining any approvals from governmental agencies that the Company determines are necessary or advisable; and (b) completion of any registration or other qualification of the Common Shares under any applicable national or state law or ruling of any governmental body that the Company determines to be necessary or advisable.

18.10    Inability to Obtain Authority.  The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company's counsel to be necessary to the lawful issuance and sale of any Common Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Common Shares as to which such requisite authority shall not have been obtained.

18.11    Investment Representations.  The Committee may require any person receiving Common Shares pursuant to an Award under the Plan to represent and warrant in writing that the person is acquiring the Common Shares for investment and without any present intention to sell or distribute such Common Shares.

17

18.12    Arbitration of Disputes.  Any controversy arising out of or relating to the Plan or an Award Agreement shall be resolved by arbitration conducted in Jackson, Mississippi, pursuant to the arbitration rules of the American Arbitration Association.  The arbitration shall be final and binding on the parties.

18.13    No Fractional Shares.  No fractional Common Shares shall be issued or delivered pursuant to the Plan or any Award.  The Committee shall determine whether cash, additional Awards, or other property shall be issued or paid in lieu of fractional Common Shares or whether such fractional Common Shares or any rights thereto shall be forfeited or otherwise eliminated.

18.14    Clawback/Recovery.  All Awards granted under the Plan will be subject to recoupment in accordance with any clawback policy that the Company is required to adopt pursuant to the listing standards of any national securities exchange or association on which the Company’s securities are listed or as is otherwise required by the Dodd-Frank Wall Street Reform and Consumer Protection Act or other applicable law.  In addition, the Committee may impose such other clawback, recovery or recoupment provisions in an Award Agreement as the Board determines necessary or appropriate, including but not limited to a reacquisition right in respect of previously acquired shares of Common Stock or other cash or property upon the occurrence of Cause.

18.15    Transferability of Awards.  Awards may not be sold, assigned, transferred, pledged or otherwise encumbered by the Participant to whom they are granted, either voluntarily or by operation of law, except by will or the laws of descent and distribution or, other than in the case of an ISO, pursuant to a qualified domestic relations order and, except as provided above, during the life of the Participant, shall be exercisable only by the Participant.

18.16    Paperless Administration.  In the event that the Company establishes, for itself or using the services of a third party, an automated system for the documentation, granting or exercise of Awards, such as a system using an internet website or interactive voice response, then the paperless documentation, granting or exercise of Awards by a Participant may be permitted through the use of such an automated system.

18.17    Governing Law.  The provisions of the Plan and the rights of all persons claiming thereunder shall be construed, administered and governed under the laws of the State of Mississippi, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of the Plan to the substantive law of another jurisdiction. Unless otherwise provided in the Award Agreement, recipients of an Award under the Plan are deemed to submit to the exclusive jurisdiction and venue of the federal or state courts of the State of Mississippi, to resolve any and all issues that may arise out of or relate to the Plan or any related Award Agreement.

18boardwalklease

                                   THE BOARDWALK                                           LEASE          This  Lease  (the  "Lease"),  dated  as  of  the  date  set  forth  in  Section 1  of  the  Summary  of  Basic  Lease  Information (the "Summary"), below, is made by and between TPSC IX, LLC, a Delaware limited liability company  ("Landlord"), and ZENTALIS PHARMACEUTICALS, INC., a Delaware corporation ("Tenant").                          SUMMARY OF BASIC LEASE INFORMATION    TERMS OF LEASE                             DESCRIPTION    1.    Date:                                September 25, 2020.    2.    Premises                                       (Article 1).           2.1   Building:                     10275 Building:  That certain building to be constructed                                              by Landlord and to be located at 10275 Science Center                                              Drive, San Diego, California (the "10275 Building").                                               10285 Building:  That certain building to be constructed                                              by Landlord and to be located at 10285 Science Center                                              Drive, San Diego, California (the "10285 Building").                                               As  used  herein,  the  10275  Building  and  the  10285                                              Building shall be known collectively as the "Building."           2.2   Premises:                     Approximately  117,929  rentable  square  feet  of  space                                              consisting of (i) approximately 74,695 rentable square                                              feet of space located on a portion of the first (1st) floor                                              and the entire second (2nd) floor of the 10275 Building                                              and  which  is  all  of  the  leasable  space  in  the  10275                                              Building, and (ii) approximately 43,234 rentable square                                              feet of space located on the entire first (1st) floor and the                                              entire  second  (2nd)  floor  of  the  10285  Building  and                                              which is all of the leasable space the 10285 Building, as                                              further set forth in Exhibit A to the Lease.    3.    Lease Term                                     (Article 2).           3.1   Length of Term:               Ten (10) years and eight (8) months.           3.2   Lease Commencement            The earlier to occur of (i) the date upon which Tenant                Date:                         first commences to conduct business in the Premises and                                              (ii) the  Possession  Date  (as  that  term  is  defined  in                                              Section 1.1.1 of this Lease).           3.3   Lease Expiration Date:        If the Lease Commencement Date shall be the first day                                              of a calendar month, then the day immediately preceding                                              the  ten  (10)  year  eight  (8)  month  anniversary  of  the                                              Lease  Commencement  Date;  or,  if  the  Lease   822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem                                          [Zentalis Pharmaceuticals, Inc.]

 

                                            Commencement Date shall be other than the first day of                                              a calendar month, then the last day of the month in which                                              the  ten  (10)  year  eight  (8)  month  anniversary  of  the                                              Lease Commencement Date occurs.    4.    Base Rent (Article 3):                                                                          Approximate                                                     Monthly            Monthly Base                                Annual              Installment        Rent per Rentable        Lease Year             Base Rent           of Base Rent          Square Foot*            1**               $7,500,284.40         $625,023.70              $5.30            2**               $7,725,292.92         $643,774.41              $5.46             3                $7,957,051.68         $663,087.64              $5.62             4                $8,195,763.24         $682,980.27              $5.79             5                $8,441,636.16         $703,469.68              $5.97             6                $8,694,885.24         $724,573.77              $6.14             7                $8,955,731.76         $746,310.98              $6.33             8                $9,224,403.72         $768,700.31              $6.52             9                $9,501,135.84         $791,761.32              $6.71             10               $9,786,169.92         $815,514.16              $6.92       11 (eight months)      $10,079,755.08        $839,979.59              $7.12    * The calculation of the Approximate Monthly Base Rent per Rentable Square Foot reflects an annual increase of   3%, rounded to the nearest cent, after the previous Lease Year.    ** Tenant's obligation to pay Monthly Installment of Base Rent for (i) the second (2nd) through ninth (9th) full   calendar months following the Lease Commencement Date with respect to the 10275 Building, and (ii) the second   (2nd) through fourteenth (14th) full calendar months following the Lease Commencement Date with respect to the   10285 Building, shall be subject to the terms of Section 3.2 of the Lease.    5.    Tenant Improvement Allowance (Exhibit B): An amount equal to $240.00 per rentable square foot of                                              the Premises (i.e., $28,302,960.00 based upon 117,929                                              rentable square feet in the Premises).    6.    Tenant's Share                                 (Article 4):                        10275 Building:  One hundred percent (100%).                                                 10285 Building:  One hundred percent (100%).      822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -2-                         [Zentalis Pharmaceuticals, Inc.]

 

 7.    Permitted Use                                  (Article 5):                        The  Premises  shall  be  used  only  for  general  office,                                              research  and  development,  engineering,  laboratory,                                              storage  and/or  warehouse  uses,  including,  but  not                                              limited to, administrative offices and other lawful uses                                              reasonably  related  to  or  incidental  to  such  specified                                              uses,  all  (i)  consistent  with  first  class  life  sciences                                              projects in the La Jolla area of San Diego, California                                              ("First  Class  Life  Sciences  Projects"),  and  (ii)  in                                              compliance with, and subject to, Applicable Laws (as                                              that term is defined in Article 24) and the terms of this                                              Lease.      8.    Letter of Credit                               (Article 21):                       $1,076,985.00.    9.    Parking                                        (Article 28):                       Three  hundred  two  (302)  unreserved  parking  spaces,                                              provided that (i) Tenant shall have the right to convert                                              up to fifteen (15) of Tenant's unreserved parking spaces                                              to reserved parking spaces near the main entrance to the                                              10275 Building or in the 10275 Building's subterranean                                              parking  garage  (subject  to  Landlord's  reasonable                                              designation of the location of such spaces), and (ii) such                                              unreserved parking  spaces  shall  include  the  exclusive                                              use  of  all  of  the  parking  spaces  associated  with  the                                               employees,  subject  to  the  terms  of  Article 28  of  the                                              Lease.    10.   Address of Tenant                              (Section 29.18):                    Zentalis Pharmaceuticals, Inc.                                              10835 Road to the Cure, Suite 205                                              San Diego, CA 92121                                              Attention: Legal Department                                              (Prior to Lease Commencement Date)                                               and                                                   Zentalis Pharmaceuticals, Inc.                                              10285 Science Center Drive                                              San Diego, California  92121                                              Attention: Legal Department                                              (After Lease Commencement Date)    11.   Address of Landlord                            (Section 29.18):                    See Section 29.18 of the Lease.    12.   Broker(s)                                      (Section 29.24):                    Tenant:  Cushman & Wakefield                                               Landlord:  CBRE    822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -3-                         [Zentalis Pharmaceuticals, Inc.]

 

1.    PREMISES, BUILDING, PROJECT, AND COMMON AREAS          1.1   Premises, Building, Project and Common Areas.                1.1.1  The  Premises;  Tender  of  Possession.   Landlord  hereby  leases  to  Tenant  and  Tenant  hereby leases from Landlord the premises set forth in Section 2.2 of the Summary (the "Premises").  The outline of  the Premises is set forth in Exhibit A attached hereto.  The outline of the "Building" and the "Project," as those terms  are defined in Section 1.1.2 below, are further depicted on the Site Plan attached hereto as Exhibit A-1.  The parties  hereto agree that the lease of the Premises is upon and subject to the terms, covenants and conditions herein set forth,  and Tenant covenants as a material part of the consideration for this Lease to keep and perform each and all of such  terms, covenants and conditions by it to be kept and performed and that this Lease is made upon the condition of such  performance.   The  parties  hereto hereby  acknowledge  that  the  purpose  of Exhibit A  is  to  show  the approximate  location of the Premises only, and such Exhibit is not meant to constitute an agreement, representation or warranty as  to the construction of the Premises, the precise area thereof or the specific location of the "Common Areas," as that  term is defined in Section 1.1.3, below, or the elements thereof or of the accessways to the Premises or the "Project,"  as that term is defined in Section 1.1.2, below.  Except as specifically set forth in this Lease and in the Tenant Work  Letter attached hereto as Exhibit B (the "Tenant Work Letter"), Landlord shall tender possession of the Premises to  Tenant in its then existing, "as is" condition, and Landlord shall not be obligated to provide or pay for any improvement  work or services related to the improvement of the Premises.  Landlord shall be deemed to have tendered possession  of the Premises to Tenant upon the date of delivery of the Substantial Completion Certificate to Tenant in connection  with the Tenant Improvements, as those terms are defined in the Tenant Work Letter (the ""Possession Date"), and  no action by Tenant shall be required therefor.  Except as expressly set forth in Section 1.1.5, below, if for any reason,  Landlord is delayed in tendering possession of the Premises to Tenant by any particular date, Landlord shall not be  subject to any liability for such failure, and the validity of this Lease shall not be impaired.  Neither Landlord nor any  agent of Landlord has made any representation or warranty regarding the condition of the Premises, the Building or  the Project or with respect to the suitability of any of the foregoing for the conduct of Tenant's business, except as  specifically set forth in this Lease and the Tenant Work Letter.                  1.1.2  The Building and The Project.  The Premises constitutes the space set forth in Section 2.1  of the Summary.  The Building is part of an office/laboratory project currently known as "The Boardwalk."  The term  "Project," as used in this Lease, shall mean (i) the Building (including the 10275 Building and the 10285 Building)  and the Common Areas, (ii) the land (which is improved with landscaping, parking facilities and other improvements)  upon which the Building and the Common Areas are located, (iii) the other office/laboratory buildings located at  10265 Science Center Drive (the "10265 Building"), and the land upon which such adjacent office/laboratory building  are located, and (iv) at Landlord's discretion, any additional real property, areas, land, buildings or other improvements  added thereto outside of the Project (provided that the addition of such additional area does not materially increase  Tenant's cost hereunder).                  1.1.3  Common Areas.  Tenant shall have the non-exclusive right to use in common with other  tenants in the Project, and subject to the rules and regulations referred to in Article 5 of this Lease, those portions of  the Project which are provided, from time to time, for use in common by Landlord, Tenant and any other tenants of  the Project (such areas, together with such other portions of the Project designated by Landlord, in its discretion, are  collectively referred to herein as the "Common Areas").  The manner in which the Common Areas are maintained  and operated shall be at the sole discretion of Landlord and the use thereof shall be subject to such rules, regulations  and restrictions as Landlord may make from time to time.  Landlord reserves the right to close temporarily, make  alterations or additions to, or change the location of elements of the Project and the Common Areas, provided that, in  connection  therewith,  Landlord  shall  perform  such  closures,  alterations,  additions  or  changes  in  a  commercially  reasonable manner and, in connection therewith, shall use commercially reasonable efforts to minimize any material  interference with Tenant's use of and access to the Premises.                1.1.4  Landlord's  Twelve  Month  Warranty.   Upon  the  Lease  Commencement  Date,  the  Building Systems (as that term is defined in Section 7.2, below) and the roof (including roof membrane) of each  Building  (the  "Warrantied  Improvements")  shall  be  in  good  working  order,  condition  and  repair  (collectively,  "Good Working Order") and Landlord hereby covenants that the Warrantied Improvements shall remain in Good  Working  Order  for  the  period  (the  "Warranty  Period")  commencing  on  the  Lease  Commencement  Date  and   822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem                                          [Zentalis Pharmaceuticals, Inc.]

 

continuing until the first (1st) anniversary of the Lease Commencement Date.  Landlord shall, at Landlord's sole cost  and expense (which shall not be deemed an Operating Expense, as that term is defined in Section 4.2.4 below), repair  or replace any portion of such Warrantied Improvements which is not in Good Working Order during such Warranty  Period ("                           "), provided that the need to repair or replace was not caused by (A)  the misuse, misconduct, damage, destruction, omissions, and/or negligence of Tenant, its subtenants and/or assignees,  if any (collectively, "Tenant Damage"), or (B) any modifications, Alterations or other improvements constructed by  or on behalf of Tenant (collectively, "Tenant Modification").  Landlord's Twelve Month Warranty shall neither (i)  be deemed to require Landlord to replace any portion of any Warrantied Improvements, as opposed to repair such  portion  of  such  Warrantied  Improvements,  nor  (ii)  extend  to  the  costs  of  normal  and  customary  preventive  maintenance  relating  to  the  Warrantied  Improvements  (the  responsibility  and  cost  for  which  will  be  handled  in  accordance with other provisions of this Lease).  To the extent repairs which Landlord is required to make pursuant  to this Section 1.1.4 are necessitated by Tenant Damage or Tenant Modification, then Tenant shall reimburse Landlord  for  the  cost  of  such  repair  (provided  that  if  such  repairs  are  necessitated  in  part  by  Tenant  Damage  or  Tenant  Modification,  then  Tenant  shall  reimburse  Landlord  for  an  equitable  portion  of  the  cost  of  such  repair).   If  it  is  determined that the Warrantied Improvements are not then in Good Working Order prior to the first (1st) anniversary  of the Lease Commencement Date, then Landlord shall not be liable to Tenant for any damages, but, as Tenant's sole  remedy, Landlord, at no cost to Tenant (subject to any repair or replacement necessitated by Tenant Damage or Tenant  Modification), shall promptly commence such work or take such other action as may be necessary to place the same  in Good Working Order, and shall thereafter diligently and continuously pursue the same to completion.                  1.1.5  Occurrence  of  Lease  Commencement  Date.   Landlord  shall  use  its  commercially  reasonable, good faith efforts to cause the Lease Commencement Date to occur on or before November 1, 2021.                       1.1.5.1 Outside Date of Lease Commencement Date.  If Landlord does not cause the  Lease Commencement Date to occur on or before July 1, 2022 (the "Outside Date"), then the sole remedy of Tenant  for such failure shall be the right to deliver a notice to Landlord (a "Termination Notice") electing to terminate this  Lease effective upon the date occurring five (5) business days following receipt by Landlord of the Termination Notice  (the "Effective Date").  The Termination Notice must be delivered by Tenant to Landlord, if at all, not earlier than  the Outside Date (as the same may be extended pursuant to the terms of Section 1.1.5.3, below) nor later than five (5)  business days  after  the  Outside  Date.   The  effectiveness of  any  such  Termination  Notice  delivered by  Tenant  to  Landlord shall be governed by the terms of this Section 1.1.5.                       1.1.5.2 Extension  of  Outside  Date  After  Delivery  of  the  Termination  Notice.   If  Tenant delivers a Termination Notice to Landlord, then Landlord shall have the right to suspend the occurrence of the  Effective Date for a period ending thirty (30) days after the Effective Date by delivering written notice to Tenant, prior  to the Effective Date, that, in Landlord's reasonable, good faith judgment, the Lease Commencement Date will occur  within thirty (30) days after the Effective Date (the "Termination Extension Notice").  If the Lease Commencement  Date occurs within such thirty (30) day suspension period, then the Termination Notice shall be of no force or effect,  but if the Lease Commencement Date does not occur within such thirty (30) day suspension period, then this Lease  shall terminate upon the expiration of such thirty (30) day suspension period.                       1.1.5.3 Extension of Outside Date Prior to the Delivery of Termination Notice.  If,  prior to the Outside Date, Landlord determines that the Lease Commencement Date will not occur by the Outside  Date, then Landlord shall have the right to deliver a written notice to Tenant stating Landlord's opinion as to the date  by which the Lease Commencement Date will occur, and Tenant shall be required, within five (5) business days after  receipt of such notice, to deliver a notice to Landlord pursuant to which Tenant shall elect either (i) to terminate this  Lease, in which case this Lease shall terminate and be of no further force or effect upon Landlord's receipt of such  notice, or (ii) to agree to extend the Outside Date to that date set forth in Landlord's notice to Tenant.  Failure by  Tenant to deliver such notice or to make such election shall be deemed to be Tenant's agreement to extend the Outside  Date to that date set forth in Landlord's notice to Tenant.  If Tenant agrees or is deemed to have agreed to extend the  Outside Date, then Landlord shall have a continuing right to deliver a notice to Tenant which requests Tenant to elect  either to terminate this Lease or to further extend the Outside Date as set forth in this Section 1.1.5.3, above, until the  occurrence of the Lease Commencement Date or until this Lease is terminated.  Upon the delivery of a Termination  Notice by Tenant pursuant to Section 1.1.5.1 above in connection with an Outside Date extended pursuant to this  Section 1.1.5.3, Landlord shall also have the same right to deliver the Termination Extension Notice as to the new  Outside Date, as set forth in Section 1.1.5.2, above.   822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -5-                         [Zentalis Pharmaceuticals, Inc.]

 

                    1.1.5.4 Other Terms.  The Effective Date and the Outside Date shall be extended to the  extent of any delays beyond the reasonable control of Landlord, including any delay or delays caused by "Force  Majeure," as that term is defined in Section 29.16 of this Lease, any Tenant delays pursuant to Section 5.2 of the  Tenant  Work  Letter,  and  any  delay  or  delays  encountered  by  Landlord  affecting  the  construction  of  the  Tenant  Improvements due to waiting periods for obtaining governmental permits or approvals in excess of the time periods  normally required to obtain such permits or approvals for newly constructed, similarly improved space in office and  laboratory buildings in the Torrey Pines market area of San Diego, California.  Upon any termination as set forth in  this Section 1.1.5, Landlord and Tenant shall be relieved from any and all liability to each other resulting hereunder  except that Landlord shall return to Tenant any prepaid rent and the letter of credit.  Tenant's rights to terminate this  Lease, as set forth in this Section 1.1.5, shall be Tenant's sole and exclusive remedy at law or in equity for the failure  of the Lease Commencement Date to occur as set forth above.          1.2   Rentable Square Feet of Premises.  The rentable square footage of the Premises is hereby deemed  to be as set forth in Section 2.2 of the Summary, and shall not be subject to measurement or adjustment during the  Lease Term.            1.3   Temporary Space.  In addition to the Premises, commencing as of the substantial completion  of the tenant improvements in the Temporary Building (as that term is defined below), which is anticipated to  occur on or about November 1, 2020, and continuing until the date that occurs thirty (30) day following the  Lease Commencement Date (the "Temporary Space Term"), Tenant shall lease from HCP University Center  East LLC, a Delaware limited liability company ("Affiliate Landlord"), an affiliate of Landlord, and Affiliate  Landlord shall lease to Tenant approximately 13,251 rentable square feet of space located on the first (1st) floor  of that certain building located at 9381 Judicial Drive, San Diego, California (the "Temporary Building"), as more  particularly  set  forth  on Exhibit  A-2  attached  hereto  (the  "Temporary  Space").   Tenant  shall  lease  the  Temporary  Space  on  all  of  the  same  terms  and  conditions  as  apply  to  the  Premises  pursuant  to  this  Lease  (including, without limitation, Tenant's indemnity and insurance obligations, pursuant to the terms and conditions of  Article 10 of this Lease, below, with respect to the Temporary Space), except that (i) Tenant shall not be obligated  to  pay  any  Base  Rent  with  respect  to  the  Temporary  Space,  (ii) for  purposes  of  determining  the  terms  and  conditions  applicable  to  the  Temporary  Space,  Affiliate  Landlord  shall  be  deemed  to  be  Landlord  and  the  Temporary Building shall be deemed to be the Building, (iii) Tenant shall have no right to sublease or assign the  Temporary Space, (iv) Tenant shall have no right to construct any Alterations or other improvements in the  Temporary  Space,  (v)  Affiliate  Landlord shall construct improvements in  the Temporary Space which  are a  logical extension of the space plan attached hereto as Exhibit A-3, and Tenant shall accept the Temporary Space in  its  then existing, "as-is" condition  without  the  payment of  any  improvement  allowance;  provided,  however,  Landlord shall deduct One Hundred Fifty-Nine Thousand and No/100 Dollars ($159,000.00) from the Tenant  Improvement Allowance in order to reimburse Landlord for certain improvement work requested by Tenant in  the Temporary Space, and (vi) Tenant shall be allowed to use up to thirty-six (36) parking spaces in the parking  facility associated with the Temporary Building.  Notwithstanding the foregoing or anything to the contrary set  forth  in  this  Lease,  Tenant  shall  be  required  to  pay  Tenant's  Share  of  Direct  Expenses  attributable  to  the  Temporary Space and all other Additional Rent (as defined in Section 3.2, below) due pursuant to the terms of  this Lease during the Temporary Space Term, provided that Tenant's Share shall be equal to 14.23%.  Tenant  hereby acknowledges that neither Landlord, Affiliate Landlord nor any agent of Landlord or Affiliate Landlord has  made any representation or warranty regarding the condition of the Temporary Space with respect to the suitability of  such  space  for  the  conduct  of  Tenant's  business;  provided  that  Landlord  represents  and  warrants,  to  its  actual  knowledge without a duty to investigate, that:  (a) the Temporary Space is not in violation of any applicable laws that  would prevent Tenant from occupying the Temporary Space once the improvements are complete, and (b) there are  no damages or defect with respect to the Temporary Space that would not be discoverable during a visual inspection;  provided that if any such damages or defects are discovered the repair shall be governed by the terms of Article 7 of  this  Lease.  Tenant  shall  vacate  and  surrender  the  Temporary  Space  to  Affiliate  Landlord  on  or  before  the  expiration of the Temporary Space Term (provided that if Tenant surrenders the Temporary Space early, Tenant  shall provide at least thirty (30) days' prior notice to Affiliate Landlord of such surrender) empty of all furniture  and personal property of Tenant, "broom clean", and in as good condition as when it was delivered to Tenant,  reasonable wear and tear and casualty damage excepted.  If Tenant fails  to timely vacate and surrender the  Temporary Space, the terms of Article 16 of this Lease shall apply to such holdover, as if the Base Rent payable   822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -6-                         [Zentalis Pharmaceuticals, Inc.]

 

for the Temporary Space was at the same rate per square foot as is then applicable to the Premises (without  considering any free rent attributable to the Premises).  2.    LEASE TERM; OPTION TERM          2.1   Lease Term.  The terms and provisions of this Lease shall be effective as of the date of this Lease.   The term of this Lease (the "Lease Term") shall be as set forth in Section 3.1 of the Summary, shall commence on  the date set forth in Section 3.2 of the Summary (the "Lease Commencement Date"), and shall terminate on the date  set forth in Section 3.3 of the Summary (the "Lease Expiration Date") unless this Lease is sooner terminated as  hereinafter provided.  For purposes of this Lease, the term "Lease Year" shall mean each consecutive twelve (12)  month period during the Lease Term.  At any time during the Lease Term, Landlord may deliver to Tenant a notice in  the form as set forth in Exhibit C, attached hereto, as a confirmation only of the information set forth therein, which  Tenant shall execute and return to Landlord within ten (10) business days of receipt thereof.          2.2   Option Term.                  2.2.1  Option  Right.   Landlord  hereby  grants  to  the  originally  named  Tenant  herein  (the  "Original Tenant") and any "Permitted Transferee Assignee", as that term is defined in Section 14.8 below, two (2)  options to extend the Lease Term for a period of five (5) years each (the "Option Term").  The options to extend shall  be exercisable only by notice delivered by Tenant to Landlord as provided in Section 2.2.3, below, the following  conditions (the "Option Conditions") are satisfied:  (i) as of the date of delivery of such notice, Tenant is not in  default  beyond  any  applicable  notice  and  cure  period  under  this  Lease;  (ii) Tenant  is  not  in  default  beyond  any  applicable notice and cure period under this Lease at the time Landlord and Tenant execute an amendment to this  Lease extending the Lease Term for the applicable Option Term; and (iii) Tenant has not previously been in default  with respect to any monetary obligation or material non-monetary obligation beyond any applicable notice and cure  period under this Lease more than twice in the preceding twelve (12) month period.  Landlord may, at Landlord's  option, exercised in Landlord's sole and absolute discretion, waive any of the Option Conditions in which case the  option, if otherwise properly exercised by Tenant, shall remain in full force and effect.  Upon the proper exercise of  an option to extend, the Lease Term shall be extended for a period of five (5) years.  The rights contained in this  Section 2.2 shall be personal to the Original Tenant and any Permitted Transferee Assignee and may only be exercised  by the Original Tenant or a Permitted Transferee Assignee (and not any other assignee or sublessee or "Transferee,"                                               terest in this Lease) if the Original Tenant or a Permitted  Transferee  Assignee,  as  applicable,  occupies  the  entire  Premises.   In  the  event  that  Tenant  fails  to  timely  and  appropriately exercise its initial option to extend the Lease Term, or its second option to extend the Lease Term, as  the case may be, in accordance with the terms of this Section 2.2, then such option (and any other then-remaining  option to extend the Lease Term, if applicable) shall automatically terminate and shall be of no further force or effect.                2.2.2  Option Rent.  The Rent payable by Tenant during an Option Term (the "Option Rent")  shall be equal to the "Market Rent," as that term is defined in Exhibit F, attached hereto, as such Market Rent is  determined pursuant to Exhibit F, attached hereto.  The calculation of the "Market Rent" shall be derived from a  review of, and comparison to, the "Net Equivalent Lease Rates" of the "Comparable Transactions," as provided for in  Exhibit F, and, thereafter, the Market Rent shall be stated as a "Net Equivalent Lease Rate" for the applicable Option  Term; provided the Option Rent shall increase by three percent (3%) on each anniversary of the comment of the Option  Term.                2.2.3  Exercise of Option.  Such options to extend shall be exercisable only by written notice  delivered by Tenant to Landlord not more than twelve (12) months nor less than nine (9) months prior to the expiration  of the initial Lease Term (or initial Option Term, as the case may be), stating that Tenant is thereby irrevocably  exercising its option to lease the Premises during the Option Term (the "Option Exercise Notice").  Landlord shall,  within thirty (30) days following Landlord's receipt of the Option Exercise Notice, deliver notice (the "Option Rent  Notice") to Tenant setting forth the Option Rent; and (iii) Tenant may, on or before the date occurring fifteen (15)  business days after Tenant's receipt of the Option Rent Notice, deliver written notice to Landlord and accept or reject  the Option Rent set forth in the Option Rent Notice.  If Tenant exercises its option to extend the Lease but fails to  accept or reject the Option Rent set forth in the Option Rent Notice, then Tenant shall be deemed to have accepted the  Option Rent set forth in the Option Rent Notice.    822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -7-                         [Zentalis Pharmaceuticals, Inc.]

 

             2.2.4  Determination of Option Rent.  In the event Tenant timely and appropriately exercises  its option to extend the Lease but rejects the Option Rent set forth in the Option Rent Notice pursuant to Section 2.2.3,  above, then Landlord and Tenant shall attempt to agree upon the Option Rent using their best good-faith efforts.  If  Landlord and Tenant fail to reach agreement upon the Option Rent applicable to the Option Term on or before the  date that is ninety (90) days prior to the expiration of the initial Lease Term (or initial Option Term, as the case may  be) (the "Outside Agreement Date"), then the Option Rent shall be determined by arbitration pursuant to the terms  of this Section 2.2.4.  Each party shall make a separate determination of the Option Rent, within five (5) business days  following the Outside Agreement Date, and such determinations shall be submitted to arbitration in accordance with  Sections 2.2.4.1 through 2.2.4.4, below.                         2.2.4.1 Landlord and Tenant shall each appoint one arbitrator who shall by profession be  a MAI appraiser, real estate broker or real estate lawyer who shall have been active over the five (5) year period ending  on the date of such appointment in the appraising and/or leasing of first class office and laboratory properties in the  vicinity of the Building.  The determination of the arbitrators shall be limited solely to the issue area of whether                                                 the actual Option Rent as determined by the arbitrators,  taking into account the requirements of Section 2.2.2 of this Lease.  Each such arbitrator shall be appointed within  fifteen (15) days after the Outside Agreement Date.  Landlord and Tenant may consult with their selected arbitrators  prior to appointment and may select an arbitrator who is favorable to their respective positions (including an arbitrator  who has previously represented Landlord and/or Tenant, as applicable).  The arbitrators so selected by Landlord and  Tenant shall be deemed "Advocate Arbitrators."                       2.2.4.2 The  two  (2)  Advocate  Arbitrators  so  appointed  shall  be  specifically  required  pursuant to an engagement letter within ten (10) days of the date of the appointment of the last appointed Advocate  Arbitrator to agree upon and appoint a third arbitrator ("Neutral Arbitrator") who shall be qualified under the same  criteria set forth hereinabove for qualification of the two Advocate Arbitrators except that (i) neither the Landlord or  Tenant or either parties' Advocate Arbitrator may, directly or indirectly, consult with the Neutral Arbitrator prior or  subsequent to his or her appearance, and (ii) the Neutral Arbitrator cannot be someone who has represented Landlord  and/or Tenant during the five (5) year period prior to such appointment.  The Neutral Arbitrator shall be retained via                       2.2.4.3 Within ten (10) days following the appointment of the Arbitrator, Landlord and  Tenant shall enter into an arbitration agreement (the "Arbitration Agreement") which shall set forth the following:                              2.2.4.3.1 Each of Landlord's and Tenant's best and final and binding determination  of the Option Rent exchanged by the parties pursuant to Section 2.2.4, above;                              2.2.4.3.2 An agreement to be signed by the Neutral Arbitrator, the form of which  agreement shall be attached as an exhibit to the Arbitration Agreement, whereby the Neutral Arbitrator shall agree to  undertake  the  arbitration  and  render  a  decision  in  accordance  with  the  terms  of  this  Lease,  as  modified  by  the  Arbitration Agreement, and shall require the Neutral Arbitrator to demonstrate to the reasonable satisfaction of the  parties that the Neutral Arbitrator has no conflicts of interest with either Landlord or Tenant;                              2.2.4.3.3 Instructions to be followed by the Neutral Arbitrator when conducting  such arbitration;                              2.2.4.3.4 That  Landlord  and  Tenant  shall  each  have  the  right  to  submit  to  the  Neutral Arbitrator (with a copy to the other party), on or before the date that occurs fifteen (15) days following the  appointment of the Neutral Arbitrator, an advocate statement (and any other information such party deems relevant)  prepared by or on behalf of Landlord or Tenant, as the case may be, in support of Landlord's or Tenant's respective  determination of Option Rent (the "Briefs");                              2.2.4.3.5 That  within  five  (5)  business  days  following  the  exchange  of  Briefs,  Landlord and Tenant shall each have the right to provide the Neutral Arbitrator (with a copy to the other party) with  a written rebuttal to the other party's Brief (the "First Rebuttals"); provided, however, such First Rebuttals shall be  limited to the facts and arguments raised in the other party's Brief and shall identify clearly which argument or fact of  the other party's Brief is intended to be rebutted;   822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -8-                         [Zentalis Pharmaceuticals, Inc.]

 

                           2.2.4.3.6 That within five (5) business days following the parties' receipt of each  other's First Rebuttal, Landlord and Tenant, as applicable, shall each have the right to provide the Neutral Arbitrator  (with a copy to the other party) with a written rebuttal to the other party's First Rebuttal (the "Second Rebuttals");  provided, however, such Second Rebuttals shall be limited to the facts and arguments raised in the other party's First  Rebuttal and shall identify clearly which argument or fact of the other party's First Rebuttal is intended to be rebutted;                              2.2.4.3.7 The date, time and location of the arbitration, which shall be mutually  and reasonably agreed upon by Landlord and Tenant, taking into consideration the schedules of the Neutral Arbitrator,  the Advocate Arbitrators, Landlord and Tenant, and each party's applicable consultants, which date shall in any event  be within forty-five (45) days following the appointment of the Neutral Arbitrator;                              2.2.4.3.8 That  no discovery  shall  take  place  in  connection  with  the  arbitration,  other than to verify the factual information that is presented by Landlord or Tenant;                              2.2.4.3.9 That  the  Neutral  Arbitrator  shall  not  be  allowed  to  undertake  an  independent investigation or consider any factual information other than presented by Landlord or Tenant, except that  the Neutral Arbitrator shall be permitted to visit the Project and the buildings containing the Comparable Transactions;                              2.2.4.3.10   The  specific  persons  that  shall  be  allowed  to  attend  the  arbitration;                              2.2.4.3.11   Tenant  shall  have  the  right  to  present  oral  arguments  to  the  Neutral Arbitrator at the arbitration for a period of time not to exceed three (3) hours ("Tenant's Initial Statement");                              2.2.4.3.12   Following Tenant's Initial Statement, Landlord shall have the  right to present oral arguments to the Neutral Arbitrator at the arbitration for a period of time not to exceed three (3)  hours ("Landlord's Initial Statement");                              2.2.4.3.13   Following Landlord's Initial Statement, Tenant shall have up to  two  (2)  additional  hours  to  present  additional  arguments  and/or  to  rebut  the  arguments  of  Landlord  ("Tenant's  Rebuttal Statement");                              2.2.4.3.14   Following Tenant's Rebuttal Statement, Landlord shall have up  to two (2) additional hours to present additional arguments and/or to rebut the arguments of Tenant ("Landlord's  Rebuttal Statement");                              2.2.4.3.15   That, not later than ten (10) days after the date of the arbitration,  the Neutral Arbitrator shall render a decision (the "Ruling") indicating whether Landlord's or Tenant's submitted  Option Rent is closer to the Option Rent;                              2.2.4.3.16   That  following  notification  of  the  Ruling,  Landlord's  or  Tenant's submitted Option Rent determination, whichever is selected by the Neutral Arbitrator as being closer to the  Option Rent shall become the then applicable Option Rent; and                              2.2.4.3.17   That the decision of the Neutral Arbitrator shall be binding on  Landlord and Tenant.                If a date by which an event described in Section 2.2.4.3, above, is to occur falls on a weekend or a  holiday, the date shall be deemed to be the next business day.                       2.2.4.4 In the event that the Option Rent shall not have been determined pursuant to the  terms hereof prior to the commencement of the Option Term, Tenant shall be required to pay the Option Rent, initially  provided by Landlord to Tenant, and upon the final determination of the Option Rent, the payments made by Tenant  shall be reconciled with the actual amounts due, and the appropriate party shall make any corresponding payment to  the other party.   822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -9-                         [Zentalis Pharmaceuticals, Inc.]

 

       2.3   Tenant Termination Right.  Notwithstanding any provision to the contrary contained in this Lease,  Tenant shall have two (2) options (each, a "Termination Option") to terminate and cancel this Lease effective as of  (i) the last day of the ninety-second (92nd) full calendar month of the Lease Term with respect to the first Termination  Option, and (ii) the last day of the one hundred forth (104th) full calendar month of the Lease Term with respect to the                                       Termination Date             Termination Notice                            ndlord on or before the date which is  twelve (12) full calendar months prior to the applicable Termination Date, and, concurrently with its delivery of such                                                               Termination Fee (A) the total amount of Base Rent and estimated Direct Expenses which would otherwise have been paid by Tenant  (as if this Lease had not been terminated) for the nine (9) calendar months following the Termination Date with respect  to the first Termination Option, and (B) the total amount of Base Rent and estimated Direct Expenses which would  otherwise have been paid by Tenant (as if this Lease had not been terminated) for the seven (7) calendar months  following the Termination Date with respect to the second Termination Option.   of the Termination Notice and the Termination Fee, this Lease shall automatically terminate and be of no further force  or  effect,  and  Landlord  and  Tenant  shall  be  relieved  of  their  respective  obligations  under  this  Lease,  as  of  the  Termination  Date,  except  with  respect  to  those  obligations  set  forth  in  this  Lease, which  specifically  survive  the  expiration or earlier termination of this Lease, including, without limitation, the payment by Tenant of all amounts  owed  by  Tenant  under  this  Lease,  up  to  and  including  the  Termination  Date.   Each  Termination  Option  shall  automatically terminate and be of no further force or effect in the event (x) Tenant fails to properly and timely exercise  such Termination Option as set forth in th been terminated, or (z) Tenant is in default under this Lease (beyond the expiration of all applicable notice and cure                                           ination Notice to Landlord.  The Termination Options granted  to Tenant under this Section 2.3 is personal to the Original Tenant and its Permitted Transferee Assignee and may not  be exercised by any assignee, sublessee, or transferee of th   Permitted Transferee Assignee'  interest in this Lease.          2.4   Expansion Termination Right.                  2.4.1  Exercise  of  Termination  Right.   If  Tenant  requires  additional  space  for  its  business  operations within the Premises, and If Landlord is unable to accommodate Tenant's need for additional space in the  Project, and as a result Tenant and Landlord or an affiliate of Landlord (an entity which is controlled by, controls, or  is under common control with, Landlord) fully execute and deliver a lease for space larger than the then Premises (the  "Expansion Lease"), upon terms mutually acceptable to each party in each party's sole and absolute discretion, then  Tenant may terminate this Lease by delivering written notice to Landlord (the "Termination Notice") at least three  (3) business days prior to Landlord's delivery of the executed Expansion Lease to Tenant, which termination shall be  effective as of the commencement date of the Expansion Lease (the "Termination Date"), and shall be without the  payment of any termination penalty or fee by Tenant.                2.4.2  Termination  of  Lease.   Provided  that  Tenant  timely  elects  to  terminate  this  Lease  in  accordance with Section 2.4.1, above, this Lease shall automatically terminate and be of no further force or effect, and  Landlord and Tenant shall be relieved of their respective obligations under this Lease, as of the Termination Date,  except with respect to those obligations set forth in this Lease which specifically survive the expiration or earlier  termination of this Lease, including, without limitation, the payment by Tenant of all amounts owed by Tenant under  this Lease that accrued prior to the Termination Date.  The termination right contained in this Section 2.4 shall be  personal to the Original Tenant or any Permitted Transferee Assignee, and may only be exercised by Original Tenant  or any Permitted Transferee Assignee (and not by any assignee, sublessee or other Transferee of Tenant's interest in  this Lease) if Original Tenant or any Permitted Transferee Assignee occupies the entire Premises.     3.    BASE RENT           3.1   Base Rent.  Tenant shall pay, without prior notice or demand, to Landlord or Landlord's agent at  the management office of the Project, or, at Landlord's option, at such other place as Landlord may from time to time  designate in writing, by a check for currency which, at the time of payment, is legal tender for private or public debts  in the United States of America, base rent ("Base Rent") as set forth in Section 4 of the Summary, payable in equal  monthly installments as set forth in Section 4 of the Summary  in advance on or before the first day of each and every   822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -10-                        [Zentalis Pharmaceuticals, Inc.]

 

calendar month during the Lease Term, without any setoff or deduction whatsoever.  The Base Rent and Tenant's  Share of the estimated Direct Expenses (as those terms are defined in Sections 4.2.6 and 4.2.2 of this Lease) for the  first full month of the Lease Term in an amount equal to $810,172.70 (i.e., $625,023.70 for the Base Rent and $  185,149.00 for Tenant's Share of the estimated Direct Expenses for the first full month of the Lease Term) shall be  paid at the time of Tenant's execution of this Lease.  If any Rent payment date (including the Lease Commencement  Date) falls on a day of the month other than the first day of such month or if any payment of Rent is for a period which  is shorter than one month, the Rent for any fractional month shall accrue on a daily basis for the period from the date  such payment is due to the end of such calendar month or to the end of the Lease Term at a rate per day which is equal  to 1/365 of the applicable annual Rent.  All other payments or adjustments required to be made under the terms of this  Lease that require proration on a time basis shall be prorated on the same basis.          3.2   Abated Base Rent.  Provided that Tenant is not then in default of this Lease beyond applicable  notice and cure periods, then during (i) the second (2nd) through ninth (9th) full calendar months following the Lease  Commencement  Date  with  respect  to  the  10275  Building,  and  (ii)  the  second  (2nd)  through  fourteenth  (14th)  full                                                                                     Rent  Abatement Period                                   nt otherwise attributable to the Premises during                            Rent Abatement of the Rent Abatement equals (a) $3,167,068.00 with respect to the 10275 Building, and (b) $2,992,571.02 with respect  to the 10275 Building.  Tenant acknowledges and agrees that the foregoing Rent Abatement has been granted to Tenant  as additional consideration for entering into this Lease, and for agreeing to pay the rental and performing the terms  and conditions otherwise required under this Lease.  If Tenant shall be in default under this Lease, and shall fail to  cure such default within the notice and cure period, if any, permitted for cure pursuant to terms and conditions of the  Lease, or if this Lease is terminated                       of this Lease or an event of casualty  or condemnation, at any time prior to the expiration of the Rent Abatement Period, then the dollar amount of the  unapplied portion of the Rent Abatement as of the date of such default or termination, as the case may be, shall be  converted  to  a  credit  to  be  applied  to  the  Base  Rent  applicable  at  the  end  of  the  Lease  Term  and  Tenant  shall  immediately be obligated to begin paying Base Rent for the Premises in full.     4.    ADDITIONAL RENT          4.1   General Terms.                  4.1.1  Direct  Expenses;  Additional  Rent.   In  addition  to  paying  the  Base  Rent  specified  in  Article 3 of this Lease, Tenant shall pay "Tenant's Share" of the annual "Direct Expenses," as those terms are defined  in Sections 4.2.6 and 4.2.2 of this Lease, respectively.  Such payments by Tenant, together with any and all other  amounts payable by Tenant to Landlord pursuant to the terms of this Lease, are hereinafter collectively referred to as  the "Additional Rent", and the Base Rent and the Additional Rent are herein collectively referred to as "Rent."  All  amounts due under this Article 4 as Additional Rent shall be payable for the same periods and in the same manner as  the Base Rent.  Without limitation on other obligations of Tenant which survive the expiration of the Lease Term, the  obligations of Tenant to pay the Additional Rent provided for in this Article 4 shall survive the expiration of the Lease  Term.                4.1.2  Triple Net Lease.  Landlord and Tenant acknowledge that, except as otherwise provided  to the contrary in this Lease, it is their intent and agreement that this Lease be a "TRIPLE NET" lease and that as  such, the provisions contained in this Lease are intended to pass on to Tenant or reimburse Landlord for the costs and  expenses reasonably associated with this Lease, the Building and the Project, and Tenant's operation therefrom.  To  the extent such costs and expenses payable by Tenant cannot be charged directly to, and paid by, Tenant, such costs  and expenses shall be paid by Landlord but reimbursed by Tenant as Additional Rent.          4.2   Definitions of Key Terms Relating to Additional Rent.  As used in this Article 4, the following  terms shall have the meanings hereinafter set forth:                4.2.1  Intentionally Deleted.                 4.2.2  "Direct Expenses" shall mean "Operating Expenses" and "Tax Expenses."    822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -11-                        [Zentalis Pharmaceuticals, Inc.]

 

             4.2.3  "Expense Year" shall mean each calendar year in which any portion of the Lease Term  falls, through and including the calendar year in which the Lease Term expires, provided that Landlord, upon notice  to Tenant, may change the Expense Year from time to time to any other twelve (12) consecutive month period, and,  in the event of any such change, Tenant's Share of Direct Expenses shall be equitably adjusted for any Expense Year  involved in any such change.                4.2.4  "Operating  Expenses"  shall  mean  all  expenses,  costs  and  amounts  of  every  kind  and  nature which Landlord pays or accrues during any Expense Year because of or in connection with the ownership,  management, maintenance, security, repair, replacement, restoration or operation of the Project, or any portion thereof.   Without limiting the generality of the foregoing, Operating Expenses shall specifically include any and all of the  following:  (i) the cost of supplying all utilities, the cost of operating, repairing, maintaining, and renovating the utility,  telephone,  mechanical,  sanitary,  storm  drainage,  and  elevator  systems,  and  the  cost  of  maintenance  and  service  contracts  in  connection  therewith;  (ii)  the  cost  of  licenses,  certificates,  permits  and  inspections  and  the  cost  of  contesting any governmental enactments which may affect Operating Expenses, and the costs incurred in connection  with a governmentally mandated transportation system management program or similar program; (iii) the cost of all  insurance carried by Landlord in connection with the Project and Premises as reasonably determined by Landlord; (iv)  the cost of landscaping, relamping, and all supplies, tools, equipment and materials used in the operation, repair and  maintenance of the Project, or any portion thereof; (v) the cost of parking area operation, repair, restoration, and  maintenance; (vi) fees and other costs, including management and/or incentive fees, consulting fees, legal fees and  accounting fees, of all contractors and consultants in connection with the management, operation, maintenance and  repair  of  the  Project;  (vii)  payments  under  any  equipment  rental  agreements  and  the  fair  rental  value  of  any  management  office  space;  (viii)  subject  to  item  (f),  below,  wages,  salaries  and  other  compensation  and  benefits,  including taxes levied thereon, of all persons engaged in the operation, maintenance and security of the Project; (ix)  costs under any instrument pertaining to the sharing of costs by the Project; (x) operation, repair, maintenance and  replacement of all systems and equipment and components thereof of the Project; (xi) the cost of janitorial, alarm,  security  and  other  services,  replacement  of  wall  and  floor  coverings,  ceiling  tiles  and  fixtures  in  common  areas,  maintenance and replacement of curbs and walkways, repair to roofs and re-roofing; (xii) amortization (including  interest on the unamortized cost) over such period of time as Landlord shall reasonably determine, of the cost of  acquiring or the rental expense of personal property used in the maintenance, operation and repair of the Project, or  any portion thereof; (xiii) the cost of capital improvements or other costs incurred in connection with the Project (A)  which are intended to effect economies in the operation or maintenance of the Project, or any portion thereof, or to  reduce current or future Operating Expenses or to enhance the safety or security of the Project or its occupants, (B)  that  are  required  to  comply  with  present  or  anticipated  conservation  programs,  (C)  which  are  replacements  or  modifications of nonstructural items located in the Common Areas required to keep the Common Areas in good order  or condition, (D) that are required under any governmental law or regulation, or (E) which are repairs, replacements  or modifications to the Building Systems (as defined in Section 7.1, below); provided, however, that any capital  expenditure shall be amortized (including interest on the amortized cost) over such period of time as Landlord shall  reasonably  determine;  and  (xiv)  costs,  fees,  charges  or  assessments  imposed  by,  or  resulting  from  any  mandate  imposed  on  Landlord  by,  any  federal,  state  or  local  government  for  fire  and  police  protection,  trash  removal,  community services, or other services which do not constitute "Tax Expenses" as that term is defined in Section 4.2.5,  below,  (xv) cost  of  tenant  relation  programs  reasonably  established  by  Landlord,  and  (xvi) payments  under  any  easement, license, operating agreement, declaration, restrictive covenant, or instrument pertaining to the sharing of  costs by the Building, including, without limitation, any covenants, conditions and restrictions affecting the property,  and reciprocal easement agreements affecting the property, any parking licenses, and any agreements with transit  agencies  affecting  the  Property  (collectively,  "Underlying  Documents").   Notwithstanding  the  foregoing,  for  purposes of this Lease, Operating Expenses shall not, however, include:                       (a)    costs,  including  legal  fees,  space  planners'  fees,  advertising  and  promotional  expenses  (except  as  otherwise  set  forth  above),  and  brokerage  fees  incurred  in  connection  with  the  original  construction or development, or original or future leasing of the Project, and costs, including permit, license and  inspection  costs,  incurred  with  respect  to  the  installation  of  tenant  improvements  made  for  new  tenants  initially  occupying space in the Project after the Lease Commencement Date or incurred in renovating or otherwise improving,  decorating, painting or redecorating vacant space for tenants or other occupants of the Project (excluding, however,  such costs relating to any common areas of the Project or parking facilities);    822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -12-                        [Zentalis Pharmaceuticals, Inc.]

 

                    (b)    except as set forth in items (xii), (xiii), and (xiv) above, depreciation, interest and  principal payments on mortgages and other debt costs, if any, penalties and interest;                       (c)    costs  for  which  the  Landlord  is  reimbursed  by  any  tenant  or  occupant  of  the  Project or by insurance by its carrier or any tenant's carrier or by anyone else, and electric power costs for which any  tenant directly contracts with the local public service company;                       (d)    any bad debt loss, rent loss, or reserves for bad debts or rent loss;                       (e)    costs associated with the operation of the business of the partnership or entity  which constitutes the Landlord, as the same are distinguished from the costs of operation of the Project (which shall  specifically  include,  but  not  be  limited  to,  accounting  costs  associated  with  the  operation  of  the  Project).   Costs  associated with the operation of the business of the partnership or entity which constitutes the Landlord include costs  of partnership accounting and legal matters, costs of defending any lawsuits with any mortgagee (except as the actions  of  the  Tenant  may  be  in  issue),  costs  of  selling,  syndicating,  financing,  mortgaging  or  hypothecating  any  of  the  Landlord's  interest  in  the  Project,  and  costs  incurred  in  connection  with  any  disputes  between  Landlord  and  its  employees, between Landlord and Project management, or between Landlord and other tenants or occupants;                       (f)    the wages and benefits of any employee who does not devote substantially all of  his or her employed time to the Project unless such wages and benefits are prorated to reflect time spent on operating  and managing the Project vis-a-vis time spent on matters unrelated to operating and managing the Project; provided,  that in no event shall Operating Expenses for purposes of this Lease include wages and/or benefits attributable to  personnel above the level of Project manager;                       (g)    amount paid as ground rental for the Project by the Landlord;                       (h)    except for a Project management fee to the extent allowed pursuant to item (l)  below, overhead and profit increment paid to the Landlord or to subsidiaries or affiliates of the Landlord for services  in the Project to the extent the same exceeds the costs of such services rendered by qualified, first-class unaffiliated  third parties on a competitive basis;                       (i)    any  compensation  paid  to  clerks,  attendants  or  other  persons  in  commercial  concessions operated by the Landlord, provided that any compensation paid to any concierge at the Project shall be  includable as an Operating Expense;                       (j)    rentals and other related expenses incurred in leasing air conditioning systems,  elevators or other equipment which if purchased the cost of which would be excluded from Operating Expenses as a  capital cost, except equipment not affixed to the Project which is used in providing engineering, janitorial or similar  services  and,  further  excepting  from  this  exclusion  such  equipment  rented  or  leased  to  remedy  or  ameliorate  an  emergency condition in the Project ;                       (k)    all  items  and  services  for  which  Tenant  or  any  other  tenant  in  the  Project  reimburses  Landlord  or  which  Landlord  provides  selectively  to  one  or  more  tenants  (other  than  Tenant)  without  reimbursement;                       (l)    any costs expressly excluded from Operating Expenses elsewhere in this Lease;                       (m)    rent for any office space occupied by Project management personnel to the extent  the size or rental rate of such office space exceeds the size or fair market rental value of office space occupied by  management personnel of the comparable buildings in the vicinity of the Building, with adjustment where appropriate  for the size of the applicable project;                       (n)    costs  arising  from  the  gross  negligence  or  willful  misconduct  of  Landlord  in  connection with this Lease;     822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -13-                        [Zentalis Pharmaceuticals, Inc.]

 

                    (o)    costs incurred to comply with laws relating to the removal of hazardous material  (as  defined  under  Applicable  Law)  which  was  in  existence  in  the  Building  or  on  the  Project  prior  to  the  Lease  Commencement Date, and was of such a nature that a federal, State or municipal governmental authority, if it had  then had knowledge of the presence of such hazardous material, in the state, and under the conditions that it then  existed in the Building or on the Project, would have then required the removal of such hazardous material or other  remedial or containment action with respect thereto; and costs incurred to remove, remedy, contain, or treat hazardous  material, which hazardous material is brought into the Building or onto the Project after the date hereof by Landlord  or any other tenant of the Project and is of such a nature, at that time, that a federal, State or municipal governmental  authority,  if  it  had  then  had  knowledge  of  the  presence  of  such  hazardous  material,  in  the  state,  and  under  the  conditions, that it then exists in the Building or on the Project, would have then required the removal of such hazardous  material or other remedial or containment action with respect thereto;                       (p)    costs  of  items  considered  capital  repairs,  replacements,  improvements  and  equipment under sound real estate management and accounting principles consistently applied, except as expressly  included in Operating Expenses pursuant to the definition above, including, without limitation, as otherwise set forth  in item (xiii) of Section 4.2.4 above;                       (q)    charitable or political contributions and membership fees or other payments to  trade organizations;                       (r)    costs of Tenant Improvements which are to be borne by Landlord pursuant to this  Lease;                       (s)    the costs of acquiring investment-grade art;                        (t)    legal fees incurred in negotiating and enforcing tenant leases;                       (u)    costs (i.e., interest and penalties) incurred  or any other lease, mortgage, or other agreement, in each case affecting the Project;                       (v)    interest, fines or penalties for late payment or violations of Applicable Laws by  Landlord, except to the extent incurring such expense is caused by a corresponding late payment or violation of an  Applicable Law by Tenant, in which event Tenant shall be responsible for the full amount of such expense; and                       (w)    any item of expense which, if included in Operating Expenses, would result in a  double collection of such item by Landlord.                In  addition  to  the  foregoing  Operating  Expense  exclusions,  Tenant's  Share  of  the  fees  for  management of the Project included in Operating Expenses shall not exceed two and 75/100 percent (2.75%) of the  aggregate Base Rent and Tenant's Share of Direct Expenses, adjusted and grossed up to reflect Tenant paying full  Rent, as contrasted with free rent, half rent and the like (the "Management Fee").                  4.2.5  Taxes.                       4.2.5.1 "Tax Expenses" shall mean all federal, state, county, or local governmental or  municipal taxes, fees, charges or other impositions of every kind and nature, whether general, special, ordinary or  extraordinary (including, without limitation, real estate taxes, general and special assessments, transit taxes, leasehold  taxes or taxes based upon the receipt of rent, including gross receipts or sales taxes applicable to the receipt of rent,  unless  required  to  be  paid  by  Tenant,  personal  property  taxes  imposed  upon  the  fixtures,  machinery,  equipment,  apparatus, systems and equipment, appurtenances, furniture and other personal property used in connection with the  Project, or any portion thereof), which shall be paid or accrued during any Expense Year (without regard to any  different  fiscal  year  used  by  such  governmental  or  municipal  authority)  because  of  or  in  connection  with  the  ownership, leasing and operation of the Project, or any portion thereof.    822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -14-                        [Zentalis Pharmaceuticals, Inc.]

 

                    4.2.5.2 Tax Expenses shall include, without limitation:  (i) any tax on the rent, right to  rent or other income from the Project, or any portion thereof, or as against the business of leasing the Project, or any  portion thereof; (ii) any assessment, tax, fee, levy or charge in addition to, or in substitution, partially or totally, of any  assessment, tax, fee, levy or charge previously included within the definition of real property tax; (iii) any assessment,  tax, fee, levy, or charge allocable to or measured by the area of the Premises or the Rent payable hereunder, including,  without limitation, any business or gross income tax or excise tax with respect to the receipt of such rent, or upon or  with respect to the possession, leasing, operating, management, maintenance, alteration, repair, use or occupancy by  Tenant of the Premises, or any portion thereof; and (iv) any assessment, tax, fee, levy or charge, upon this transaction  or any document to which Tenant is a party, creating or transferring an interest or an estate in the Premises or the  improvements thereon.                       4.2.5.3 Any costs and expenses (including, without limitation, reasonable attorneys' and  consultants'  fees)  incurred  in  attempting  to  protest,  reduce  or  minimize  Tax  Expenses  shall  be  included  in  Tax  Expenses in the Expense Year such expenses are incurred.  Tax refunds shall be credited against Tax Expenses and  refunded to Tenant regardless of when received, based on the Expense Year to which the refund is applicable, provided  that in no event shall the amount to be refunded to Tenant for any such Expense Year exceed the total amount paid by  Tenant as Additional Rent under this Article 4 for such Expense Year.  If Tax Expenses for any period during the  Lease Term or any extension thereof are increased after payment thereof for any reason, including, without limitation,  error or reassessment by applicable governmental or municipal authorities, Tenant shall pay Landlord upon demand  Tenant's  Share  of  any  such  increased  Tax  Expenses.   Notwithstanding anything  to  the  contrary  contained  in  this  Section 4.2.5, there shall be excluded from Tax Expenses (i) all excess profits taxes, franchise taxes, gift taxes, capital  stock taxes, inheritance and succession taxes, estate taxes, federal and state income taxes, and other taxes to the extent  applicable to Landlord's net income (as opposed to rents, receipts or income attributable to operations at the Project),  (ii) any items included as Operating Expenses, and (iii) any items paid by Tenant under Section 4.5 of this Lease.                4.2.6  "Tenant's Share" shall mean the percentage set forth in Section 6 of the Summary.            4.3   Allocation of Direct Expenses.                 4.3.1  The parties acknowledge that the Building is a part of a multi-building project and that the  costs and expenses incurred in connection with the Project (i.e., the Direct Expenses) should be shared between the  Building and the other buildings in the Project.  Accordingly, as set forth in Section 4.2 above, Direct Expenses (which  consist of Operating Expenses and tax Expenses) are determined annually for the Project as a whole, and a portion of  the Direct Expenses, which portion shall be determined by Landlord on an equitable basis, shall be allocated to the  Building (as opposed to other buildings in the Project).  Such portion of Direct Expenses allocated to the Building  shall include all Direct Expenses attributable solely to the Building and an equitable portion of the Direct Expenses  attributable to the Project as a whole, and shall not include Direct Expenses attributable solely to other buildings in  the Project.                4.3.2  Cost Pools.  Landlord shall have the right, from time to time, to equitably allocate some or  all of the Direct Expenses for the Project among different portions or occupants of the Project (the "Cost Pools"), in  Landlord's reasonable discretion.  Such Cost Pools may include, but shall not be limited to, the office space tenants of  a building of the Project or of the Project, and the laboratory space tenants of a building of the Project or of the Project.   The Direct Expenses within each such Cost Pool shall be allocated and charged to the tenants within such Cost Pool  in an equitable manner.          4.4   Calculation and Payment of Additional Rent.  Tenant shall pay to Landlord, in the manner set  forth in Section 4.4.1, below, and as Additional Rent, Tenant's Share of Direct Expenses for each Expense Year.   Notwithstanding  anything  to the contrary contained in this  Article 4, the  aggregate "Controllable Expenses" (as  defined in this Section 4.4, below) included in Direct Expenses in any Expense Year after the first (1st) Lease Year  shall not increase by more than five percent (5%) on an annual, cumulative and compounded basis, over the actual  aggregate Controllable Expenses included in Direct Expenses for the first (1st) Lease Year.  For purposes of this  Section 4.4, "Controllable Expenses" shall mean all Direct Expenses except:  (i) Tax Expenses, and any and all  assessments, including assessment districts and government-mandated charges with respect to the Building or Project,  or any part thereof (ii) insurance carried by Landlord with respect to Project and/or the operation thereof; (iii) costs of  utilities, including, without limitation, electricity, water, HVAC and sewer charges, utility surcharges and assessments,   822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -15-                        [Zentalis Pharmaceuticals, Inc.]

 

and refuse removal; (iv) Permitted Capital Expenses; (v) the cost of union labor (including janitorial staff and security  personnel), including labor which is not union as of the date of this Lease but which unionizes after the date of this  Lease, and increases in wages, salaries and other compensation and benefits paid to Landlord's contractors engaged  in the operation, management, maintenance or security of the Building or Project, to the extent such increases are due  to increases in the applicable minimum wage legally required to be paid to such personnel, (vi) costs to comply with  applicable laws and other governmental requirements first enacted or made applicable to the Building after the Lease  Commencement Date, and (vii) costs relating to Force Majeure.                  4.4.1  Statement of Actual Direct Expenses and Payment by Tenant.  Landlord shall give to  Tenant following the end of each Expense Year, a statement (the "Statement") which shall state the Direct Expenses  incurred or accrued for such preceding Expense Year, and which shall indicate the amount of Tenant's Share of Direct  Expenses.  Upon receipt of the Statement for each Expense Year commencing or ending during the Lease Term,  Tenant shall pay, with its next installment of Base Rent due, the full amount of Tenant's Share of Direct Expenses for  such Expense Year, less the amounts, if any, paid during such Expense Year as "Estimated Direct Expenses," as that  term is defined in Section 4.4.2, below, and if Tenant paid more as Estimated Direct Expenses than the actual Tenant's  Share of Direct Expenses, Tenant shall receive a credit in the amount of Tenant's overpayment against Rent next due  under this Lease.  The failure of Landlord to timely furnish the Statement for any Expense Year shall not prejudice  Landlord or Tenant from enforcing its rights under this Article 4.  Even though the Lease Term has expired and Tenant  has vacated the Premises, when the final determination is made of Tenant's Share of Direct Expenses for the Expense  Year in which this Lease terminates, Tenant shall immediately pay to Landlord such amount, and if Tenant paid more  as Estimated Direct Expenses than the actual Tenant's Share of Direct Expenses, Landlord shall, within thirty (30)  days, deliver a check payable to Tenant in the amount of the overpayment or apply such overpayment against any  unpaid Rent.  The provisions of this Section 4.4.1 shall survive the expiration or earlier termination of the Lease Term.                4.4.2  Statement of Estimated Direct Expenses.  In addition, Landlord shall endeavor to give  Tenant a yearly expense estimate statement (the "Estimate Statement") which shall set forth Landlord's reasonable  estimate (the "Estimate") of what the total amount of Direct Expenses for the then-current Expense Year shall be and  the estimated Tenant's Share of Direct Expenses (the "Estimated Direct Expenses").  The failure of Landlord to  timely furnish the Estimate Statement for any Expense Year shall not preclude Landlord from enforcing its rights to  collect  any  Estimated  Direct  Expenses  under  this  Article  4,  nor  shall  Landlord  be  prohibited  from  revising  any  Estimate Statement or Estimated Direct Expenses theretofore delivered to the extent necessary.  Thereafter, Tenant  shall pay, with its next installment of Base Rent due, a fraction of the Estimated Direct Expenses for the then-current  Expense Year (reduced by any amounts paid pursuant to the last sentence of this Section 4.4.2).  Such fraction shall  have as its numerator the number of months which have elapsed in such current Expense Year, including the month  of such payment, and twelve (12) as its denominator.  Until a new Estimate Statement is furnished (which Landlord  shall  have  the  right  to  deliver  to  Tenant  at  any  time),  Tenant  shall  pay  monthly,  with  the  monthly  Base  Rent  installments, an amount equal to one-twelfth (1/12) of the total Estimated Direct Expenses set forth in the previous  Estimate Statement delivered by Landlord to Tenant.            4.5   Taxes and Other Charges for Which Tenant Is Directly Responsible.  Tenant  shall  be  liable for and shall pay before delinquency, taxes levied against Tenant's equipment, furniture, fixtures and any other  personal property located in or about the Premises.  If any such taxes on Tenant's equipment, furniture, fixtures and  any other personal property are levied against Landlord or Landlord's property or if the assessed value of Landlord's  property is increased by the inclusion therein of a value placed upon such equipment, furniture, fixtures or any other  personal property and if Landlord pays the taxes based upon such increased assessment, which Landlord shall have  the right to do regardless of the validity thereof but only under proper protest if requested by Tenant, Tenant shall ,                                                repay to Landlord the taxes so levied against Landlord  or the proportion of such taxes resulting from such increase in the assessment, as the case may be.   5.    USE OF PREMISES          5.1   Permitted Use.  Tenant shall use the Premises solely for the Permitted Use set forth in Section 7 of  the Summary and Tenant shall not use or permit the Premises or the Project to be used for any other purpose or  purposes  whatsoever  without  the  prior  written  consent  of  Landlord,  which  may  be  withheld  in  Landlord's  sole  discretion.      822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -16-                        [Zentalis Pharmaceuticals, Inc.]

 

       5.2   Prohibited Uses.  Tenant further covenants and agrees that Tenant shall not use, or suffer or permit  any person or persons to use, the Premises or any part thereof for any use or purpose in violation of the laws of the  United States of America, the State of California, or the ordinances, regulations or requirements of the local municipal  or county governing body or other lawful authorities having jurisdiction over the Project) including, without limitation,  any such laws, ordinances, regulations or requirements relating to hazardous materials or substances, as those terms  are defined by Applicable Laws now or hereafter in effect, or any Underlying Documents.  Landlord shall have the  right to impose reasonable and customary rule and regulations regarding the use of the Project, as reasonably deemed  necessary  by  Landlord  with  respect  to  the  orderly  operation  of  the  Project,  and  Tenant  shall  comply  with  such  reasonable rules and regulations to the extent such rules and regulations are provided to Tenant in writing and apply  on a non-discriminatory basis to all similar tenants of the Project.  Tenant shall not do or permit anything to be done  in or about the Premises which will in any way damage the reputation of the Project or obstruct or interfere with the  rights of other tenants or occupants of the Building, or injure or annoy them or use or allow the Premises to be used  for any improper, unlawful or objectionable purpose, nor shall Tenant cause, maintain or permit any nuisance in, on  or about the Premises.  Tenant shall comply with, and Tenant's rights and obligations under the Lease and Tenant's  use of the Premises shall be subject and subordinate to, all recorded easements, covenants, conditions, and restrictions  now or hereafter affecting the Project.            5.3   Hazardous Materials.                  5.3.1  Tenant's Obligations.                       5.3.1.1 Prohibitions.  As a material inducement to Landlord to enter into this Lease with  Tenant, Tenant has fully and accurately completed Landlo     Environmental Questionnaire              Exhibit E.  Tenant agrees that except for those chemicals  or materials, and their respective quantities, specifically listed on the Environmental Questionnaire, neither Tenant                                               y tier, entities with a contractual relationship with Tenant  (other than Landlord), or any entity acting as an agent or sub-agent of Tenant (collectively, "Tenant's Agents") will  produce, use, store or generate any "Hazardous Materials," as that term is defined below, on, under or about the  Premises, nor cause or permit any Hazardous Material to be brought upon, placed, stored, manufactured, generated,  blended, handled, recycled, used or "Released," as that term is defined below, on, in, under or about the Premises.  If  any  information  provided  to  Landlord  by  Tenant  on  the  Environmental  Questionnaire,  or  otherwise  relating  to  information concerning Hazardous Materials is false, incomplete, or misleading in any material respect, the same shall  be deemed an Event of Default by Tenant under this Lease. Hazardous Materials use for the Premises not described on the initial Environmental Questionnaire, such consent to   Premises.   For  purposes  of  this  Lease,  "Hazardous  Materials"  means  all  flammable  explosives,  petroleum  and  petroleum  products,  waste  oil,  radon,  radioactive  materials,  toxic  pollutants,  asbestos,  polychlorinated  biphenyls   PCBs                                           or  reproductive  toxicity,  pollutants,  contaminants,  hazardous  wastes,  toxic  substances  or  related  materials,  including  without  limitation  any  chemical,  element,  compound, mixture, solution, substance, object, waste or any combination thereof, which is or may be hazardous to  human  health,  safety  or  to  the  environment  due  to  its  radioactivity,  ignitability,  corrosiveness,  reactivity,  explosiveness, toxicity, carcinogenicity, infectiousness or other harmful or potentially harmful properties or effects,  or defined as, regulated as or included in, the definition                               r any Environmental Laws.  The term  this Lease shall also include any mold, fungus or spores, whether or not the same is defined, listed, or otherwise                                                Laws, if such mold, fungus or spores would pose a risk  to human health or the environment or negatively impact the value of the Premises.  For purposes of this Lease,  "Release" or "Released" or "Releases" shall mean any release, deposit, discharge, emission, leaking, spilling, seeping,  migrating, injecting, pumping, pouring, emptying, escaping, dumping, disposing, or other movement of Hazardous  Materials into the environment.  Notwithstanding anything to the contrary set forth in this Lease, Tenant shall be   prior consent.                       5.3.1.2 Notices to Landlord.  Tenant shall notify Landlord in writing as soon as possible  but in no event later than five (5) days after (i) Tenant becomes aware of the occurrence of any actual, alleged or  threatened Release of any Hazardous Material in, on, under, from, about or in the vicinity of the Premises (whether   822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -17-                        [Zentalis Pharmaceuticals, Inc.]

 

past  or  present),  regardless  of  the  source  or  quantity  of  any  such  Release,  or  (ii) Tenant  becomes  aware  of  any  regulatory  actions,  inquiries,  inspections,  investigations,  directives,  or  any  cleanup,  compliance,  enforcement  or  abatement  proceedings  (including  any  threatened  or  contemplated  investigations  or  proceedings)  relating  to  or  potentially affecting the Premises with respect to any Release, or (iii) Tenant becomes aware of any claims by any  person or entity relating to any Hazardous Materials in, on, under, from, about or in the vicinity of the Premises,  whether relating to damage, contribution, cost recovery, compensation, loss or injury.  Collectively, the matters set                                                      Hazardous Materials Claims promptly forward to Landlord copies of all orders, notices, permits, applications and other communications and reports  in connection with any Hazardous Materials Claims.  Additionally, Tenant shall promptly advise Landlord in writing   Landlord to any liability, or restrictions on ownership, occupancy, transferability or use of the Premises under any  "Environmental Laws," as that term is defined below.  Tenant shall not enter into any legal proceeding or other action,  settlement, consent decree or other compromise with respect to any Hazardous Materials Claims without first notifying   Landlord so elects, in such proceedings and in no event shall Tenant enter into any agreements which are binding on  Landlord or the Premises without Landlo participate in, any and all legal or other administrative proceedings concerning any Hazardous Materials Claim.  For                    Environmental Laws of human health, safety, wildlife or the environment, including, without limitation, (i) all requirements pertaining to  reporting, licensing, permitting, investigation and/or remediation of emissions, discharges, Releases, or threatened  Releases of Hazardous Materials, whether solid, liquid, or gaseous in nature, into the air, surface water, groundwater,  or land, or relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling  of  Hazardous  Materials;  and  (ii) all  requirements  pertaining  to  the  health  and  safety  of  employees  or  the  public.   Environmental Laws include, but are not limited to, the Comprehensive Environmental Response, Compensation and  Liability Act of 1980, 42 USC § 9601, et seq., the Hazardous Materials Transportation Authorization Act of 1994,  49 USC § 5101, et seq., the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act  of 1976, and Hazardous and Solid Waste Amendments of 1984, 42 USC § 6901, et seq., the Federal Water Pollution  Control Act, as amended by the Clean Water Act of 1977, 33 USC § 1251, et seq., the Clean Air Act of 1966, 42 USC  § 7401, et seq., the Toxic Substances Control Act of 1976, 15 USC § 2601, et seq., the Safe Drinking Water Act of  1974, 42 USC §§ 300f through 300j, the Occupational Safety and Health Act of 1970, as amended, 29 USC § 651 et  seq., the Oil Pollution Act of 1990, 33 USC § 2701 et seq., the Emergency Planning and Community Right-To-Know  Act of 1986, 42 USC § 11001 et seq., the National Environmental Policy Act of 1969, 42 USC § 4321 et seq., the  Federal Insecticide, Fungicide and Rodenticide Act of 1947, 7 USC § 136 et seq., California Carpenter-Presley-Tanner  Hazardous Substance Account Act, California Health & Safety Code §§ 25300 et seq., Hazardous Materials Release  Response  Plans  and  Inventory  Act,  California Health & Safety  Code, §§ 25500  et  seq.,  Underground  Storage of  Hazardous Substances provisions, California Health & Safety Code, §§ 25280 et seq., California Hazardous Waste  Control Law, California Health & Safety Code, §§ 25100 et seq., and any other state or local law counterparts, as  amended,  as  such  Applicable  Laws,  are  in  effect  as  of  the  Lease  Commencement  Date,  or  thereafter  adopted,  published, or promulgated.                       5.3.1.3 Releases of Hazardous Materials.  If any Release of any Hazardous Material in,  on, under, from or about the Premises shall occur at any time during the Lease and/or if any other Hazardous Material  condition  exists  at  the  Premises  that  requires  response  actions  of  any  kind,  in  addition  to  notifying  Landlord  as  specified above, Tenant, at its own sole cost and expense, shall promptly upon becoming aware of such condition  (i) immediately comply with any and all reporting requirements imposed pursuant to any and all Environmental Laws,  (ii) provide  a  written  certification  to  Landlord  indicating  that  Tenant  has  complied  with  all  applicable  reporting  requirements, (iii) take any and all necessary investigation, corrective and remedial action in accordance with any and  all applicable Environmental Laws, utilizing an environmental consultant approved by Landlord, all in accordance  with the provisions and requirements of this Section 5.3, including, without limitation, Section 5.3.4, and (iv) take any  such  additional  investigative,  remedial  and corrective  actions  as  Landlord  shall  in  its reasonable discretion  deem  necessary such that the Premises are remediated to the condition existing prior to such Release.                         5.3.1.4 Indemnification.                                5.3.1.4.1 In General any other provision of this Lease, Tenant shall be solely responsible for and shall protect, defend, indemnify and hold   822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -18-                        [Zentalis Pharmaceuticals, Inc.]

 

the  Landlord Parties  harmless  from  and  against  any  and  all  claims,  judgments,  losses,  damages,  costs,  expenses,  penalties,  enforcement  actions,  taxes,  fines,  remedial  actions,  liabilities  (including,  without  limitation,  actual                    n, arbitration and administrative proceeding costs, expert and consultant fees and laboratory  costs) including, without limitation, consequential damages and sums paid in settlement of claims, which arise during  or after the Lease Term, whether foreseeable or unforeseeable, that arise during or after the Lease Term in whole or  in part, foreseeable or unforeseeable, directly or indirectly arising out of or attributable to the presence, use, generation,  manufacture,  treatment,  handling,  refining,  production,  processing,  storage,  Release  or  presence  of  Hazardous  Materials in, on, under or about the Premises by Tenant or Tenant's Agents.                               5.3.1.4.2 Limitations.  Notwithstanding anything in Section 5.3.1.4, above, to  the contrary, Tenant's indemnity of Landlord as set forth in Section 5.3.1.4, above, shall not be applicable to claims  based upon Hazardous Materials which may exist in, on or about the Premises as of the Lease Commencement Date  ("Existing Hazardous Materials"), except to the extent that Tenant's construction activities and/or Tenant's other   defined in Section 5.3.4, below, the subject Existing Hazardous Materials during the tenancy of the Premises) caused  or exacerbated the subject claim.                         5.3.1.5 Compliance  with  Environmental  Laws.   Without  limiting  the  generality  of                                                  e provided in this Lease, Tenant shall, at its sole cost  and expense, comply with all Environmental Laws.  Tenant shall obtain and maintain any and all necessary permits,  licenses,  certifications  and  approvals  appropriate  or  required  for  the  use,  handling,  storage,  and  disposal  of  any  Hazardous Materials used, stored, generated, transported, handled, blended, or recycled by Tenant on the Premises.   Landlord shall have a continuing right, without obligation, to require Tenant to obtain, and to review and inspect any  and all such permits, licenses, certifications and approvals, together with copies of any and all Hazardous Materials  management  plans  and  programs,  any  and  all  Hazardous  Materials  risk  management  and  pollution  prevention  programs,  and  any  and  all  Hazardous  Materials  emergency  response  and  employee  training  programs  respecting                                               activities  involving Hazardous  Materials and  showing  to                                      ronmental Laws and the terms of this Lease.                5.3.2  Assurance of Performance.                       5.3.2.1 Environmental  Assessments  In  General.   Landlord  may,  but  shall  not  be  required  to,  engage  from  time  to  time  such  contractors  as  Landlord  determines  to  be  appropriate  to  perform  environmental  assessments  of  a  scope reasonably  determined  by  Landlord  (an  "Environmental  Assessment")  to                                          this Lease with respect to Hazardous Materials.  .                       5.3.2.2 Costs  of  Environmental  Assessments.   All  costs  and  expenses  incurred  by  Landlord in connection with any such Environmental Assessment initially shall be paid by Landlord; provided that if  any such Environmental Assessment shows that Tenant has failed to comply with the provisions of this Section 5.3,  then all of the costs and expenses of such Environmental Assessment shall be reimbursed by Tenant as Additional  Rent within ten (10) business days after receipt of written demand therefor.                5.3.3                                .  At the expiration or earlier termination of the                                             all:  (i) cause an Environmental Assessment of the Premises  to be conducted in accordance with Section 15.3; (ii) cause all Hazardous Materials Released by Tenant to be removed  from the Premises and disposed of in accordance with all Environmental Laws and as necessary to allow the Premises  to be used for any purpose; and (iii) cause to be removed a to store any Hazardous Materials on the Premises, and cause to be repaired any damage to the Premises caused by  such removal.                5.3.4  Clean-up.                       5.3.4.1 Environmental Reports; Clean-Up.  If any written report, including any report                                             Environmental Report any Hazardous Materials as to which Tenant has a removal or remediation obligation under this Section 5.3, and   822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -19-                        [Zentalis Pharmaceuticals, Inc.]

 

(ii) that as a result of same, the investigation, characterization, monitoring, assessment, repair, closure, remediation,                          Clean-up                           ed, Tenant shall immediately prepare  and submit to Landlord within thirty (30) days after receipt of the Environmental Report a comprehensive plan, subject   Premises are restored to the conditions required by this L                                           on on any rights and remedies of Landlord under this Lease,  immediately  implement  such  plan with  a  consultant reasonably  acceptable  to  Landlord  and proceed  to  Clean-Up  Hazardous Materials in accordance with all Applicable Laws and as required by such plan and this Lease.  If, within  thirty (30) days after receiving a copy of such Environmental Report, Tenant fails either (a) to complete such Clean- up, or (b) with respect to any Clean-up that cannot be completed within such thirty-day period, fails to proceed with  diligence to prepare the Clean-up plan and complete the Clean-up as promptly as practicable, then Landlord shall have  the right, but not the obligation, and without waiving any other rights under this Lease, to carry out any Clean-up  recommended by the Environmental Report or required by any governmental authority having jurisdiction over the  Premises,  and  recover  all  of  the  costs  and  expenses  thereof  from  Tenant  as  Additional  Rent,  payable  within  ten  (10) business days after receipt of written demand therefor.                       5.3.4.2 No Rent Abatement.  Tenant shall continue to pay all Rent due or accruing under  this Lease during any Clean-up, and shall not be entitled to any reduction, offset or deferral of any Base Rent or  Additional Rent due or accruing under this Lease during any such Clean-up.                         5.3.4.3 Surrender of Premises.  Tenant shall complete any Clean-up prior to surrender  of the Premises upon the expiration or earlier termination of this Lease.  Tenant shall obtain and deliver to Landlord  a letter or other written determination from the overseeing governmental authority confirming that the Clean-up has  been completed in accordance with all requirements of such governmental authority and that no further response action  of any kind is required for the unr              Closure Letter termination of this Lease, Tenant shall also be obligated to close all permits obtained in connection with Hazardous  Materials in accordance with Applicable Laws.                       5.3.4.4 Failure  to  Timely  Clean-Up.   Should  any  Clean-up  for  which  Tenant  is  responsible  not  be  completed,  or  should  Tenant  not  receive  the  Closure  Letter  and  any  governmental  approvals  required under Environmental Laws in conjunction with such Clean-up prior to the expiration or earlier termination  of this Lease, then Tenant shall be liable to Landlord as a holdover tenant (as more particularly provided in Article 16)  until Tenant has fully complied with its obligations under this Section 5.3.                5.3.5  Confidentiality.  Unless compelled to do so by Applicable Law, Tenant agrees that Tenant  shall not disclose, discuss, disseminate or copy any information, data, findings, communications, conclusions and   attorneys, property managers and employees that have a need to know such information), including any governmental  authority, without the prior written consent of Landlord.  In the event Tenant reasonably believes that disclosure is   information  so  that  Landlord  may  attempt  to  obtain  a  protective  order.   Tenant  may  additionally  release  such  information to bona fide prospective purchasers or lenders,      written agreement to be bound  by the terms of this Section 5.3.                5.3.6  Copies of Environmental Reports.  Within thirty (30) days of receipt thereof, Tenant  shall provide Landlord with a copy of any and all environmental assessments, audits, studies and reports regarding   Clean-up thereof.  Tenant shall be obligated to provide Landlord with a copy of such materials without regard to  whether such materials are generated by Tenant or prepared for Tenant, or how Tenant comes into possession of such  materials.                5.3.7  Intentionally Omitted.                  5.3.8  Signs, Response Plans, Etc.  Tenant shall be responsible for posting on the Premises any  signs required under applicable Environmental Laws.  Tenant shall also complete and file any business response plans    822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -20-                        [Zentalis Pharmaceuticals, Inc.]

 

or inventories required by any Applicable Laws.  Tenant shall concurrently file a copy of any such business response  plan or inventory with Landlord.                5.3.9  Survival.  Each covenant, agreement, representation, warranty and indemnification made  by Tenant set forth in this Section 5.3 shall survive the expiration or earlier termination of this Lease and shall remain                                         ection 5.3 have been completely performed and satisfied.          5.4   Outside Area.  Subject to the terms and conditions contained in this Section 5.4 and elsewhere  in  this  Lease,  and  subject  to  Tenant  obtaining  and  maintaining  all  necessary  and  applicable  governmental  approvals, commencing as of the Lease Commencement Date, Tenant shall have a license during the Lease Term  for the exclusive use of certain space in the Common Area (the "Outside Area"), the location to be mutually  and  reasonably agreed upon  by  Landlord  and Tenant, for  the  construction  (as  a  Tenant Improvement or  an  Alteration) of a shed for the storage of Hazardous Materials used in Tenant's operations from the Premises for the  Permitted Use and disclosed in the Environmental Questionnaire.  The Outside Area shall not be included in the  rentable square feet of the Premises for purposes of this Lease.  The license to use the Outside Area granted to  Tenant hereby is personal to the Original Tenant and any Permitted Transfer Assignee, and shall not be otherwise  assigned, sublet or otherwise transferred in any way or manner.  Tenant also acknowledges that neither Landlord  nor any agent of Landlord has made any representation or warranty regarding the condition of the Outside Area  or the compliance of the Outside Area with any Applicable Laws.  Tenant shall have the right, at Tenant's sole  cost and expense, to alter, change or make improvements to the  Outside Area (as  an Alteration),  subject  to  Landlord's reasonable approval; provided, however, that Tenant shall be responsible, at its sole cost and expense,  for the maintenance and repair of the Outside Area.  Tenant acknowledges and agrees that although Tenant shall  have the exclusive license to use the Outside Area during the Lease Term, Landlord shall have no obligation to  enforce Tenant's exclusive use of the Outside Area, and neither Landlord nor the Landlord Parties shall in no  event be liable for, and Landlord and the Landlord Parties are hereby released from any responsibility for, any  personal injury or property damage sustained by Tenant in connection with or arising from any acts or omissions  with regard to the admission or exclusion from the Outside Area of any person; provided, however, that Landlord  hereby covenants and agrees that it shall not grant any third party the right to use the Outside Area during the  Lease Term, as the same may be extended.  Tenant shall keep the Outside Area clean of all trash and debris and  shall also keep the surrounding areas clean of debris and trash arising from the use of the Outside Area.  Tenant  agrees,  at  its  own  expense,  to  pay  for  all  utilities  used  by  Tenant  in  the  Outside  Area  (including,  without  limitation, all sales, use and other taxes (but excluding real property taxes) imposed thereon by any governmental  authority).  Tenant shall remove any personal property from the Outside Area upon the expiration or earlier  termination of this Lease, or upon the termination of Tenant's license under this Section 5.4, and shall repair any  damage to the Premises and Building caused by such removal.  Except as otherwise set forth in this Lease or  required by Applicable Laws, Tenant shall not be permitted to display any graphics, signs or insignias or the like  in  the  Outside Area.   Tenant's  use of  the  Outside Area shall  be  subject to  such reasonable  additional  rules,  regulations and restrictions as Landlord may make from time to time concerning the Outside Area.  Except as  expressly set forth in this Section 5.4, all of the terms, conditions, limitations and restrictions contained in this   apply equally to the Outside Area and Tenant's use thereof, including, without limitation, Tenant's repair and  maintenance  obligations  set  forth  in  Section 7.1,  Tenant's  responsibilities  and  obligations  with  respect  to  Hazardous  Materials set forth  in  Section 5.3,  Tenant's indemnity  of  Landlord  set  forth  in Section 10.1,  and  Tenant's insurance obligations set forth in Article 10.  The license to use the Outside Area granted to Tenant  hereby shall be revocable by Landlord for cause upon written notice to Tenant, and Landlord thereafter shall  have the right to prevent Tenant's access thereto.  As used in this Section 5.4, "cause" shall include, without  limitation, any of the following:  (i) Landlord's good faith determination that the license granted hereby and/or  the use of the Outside Area threatens the safety and/or security of persons or property or endangers or otherwise  interferes with the use and occupancy of the Building or Project by Landlord, its employees, agents or contractors  or other tenants or occupants of the Building or the Project; (ii) the license granted hereby constitutes a violation  of or otherwise conflicts with any law, statute, ordinance or other governmental rule, regulation or requirement  now in force or which may hereafter be enacted or promulgated (unless Tenant changes its use of the Outside  Area in order to comply with such law, statute, ordinance or other governmental rule, regulation or requirement),   822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -21-                        [Zentalis Pharmaceuticals, Inc.]

 

or results in increased rates of insurance for the Building or Project (unless Tenant pays the cost of such increased  rates to Landlord); (iii) this Lease is terminated for any reason; or (iv) Tenant fails, after any applicable notice  and cure period expressly set forth in this Lease, to comply with any of the terms, conditions, limitations or  restrictions contained in this Section 5.4 or elsewhere in this Lease which apply to the Outside Area or Tenant's  use thereof.   6.    SERVICES AND UTILITIES          6.1   In General.  Landlord shall provide the following services on all days (unless otherwise stated  below) during the Lease Term.                  6.1.1  Subject  to  limitations  imposed  by  all  governmental  rules,  regulations  and  guidelines  applicable  thereto,  Landlord  shall  provide  heating,  ventilation  and  air  conditioning  to  the  office  portions  of  the  Premises ("HVAC") when necessary for normal comfort for normal office use in the Premises, except for the date of  observation of New Year's Day, President's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day,  Christmas  Day  and,  at  Landlord's  discretion,  other  locally  or  nationally  recognized  holidays  (collectively,  the  "Holidays"), 24 hours per day, 7 days per week.  Tenant shall cooperate fully with Landlord at all times and abide by  all non-discriminatory regulations and requirements that Landlord may reasonably prescribe for the proper functioning  and protection of the HVAC, electrical, mechanical and plumbing systems.                  6.1.2  Notwithstanding anything set forth in this Lease to the contrary, electricity is separately  metered (or sub-metered) at the Premises and shall be paid directly by Tenant to the applicable utility provider.  If  electricity is separately sub-metered (as opposed to separately metered), then Tenant shall pay to Landlord the cost of  such  utilities  based  on  such  sub-meter,  including  reimbursement  for  any  penalties  for  usage  or  other  surcharges  imposed by any utility company.  Within thirty (30) days after receipt of Landlord's statement of apportionment or  statement setting forth the charges payable by Tenant, Tenant shall pay to Landlord, as Additional Rent, the cost of  such electrical services so apportioned or so provided by Landlord.  Notwithstanding anything to the contrary set forth  herein, to the extent the Premises generates electricity demand on a shared resource (e.g. electricity for the central  plant), the cost of such electricity shall be allocated to Tenant on a pro rata basis or other reasonable basis consistent  with commercial reasonable property management practices.                  6.1.3  Landlord shall provide city water from the regular Building outlets for drinking, kitchen,  lavatory and toilet purposes in the Building Common Areas and the Premises.                6.1.4  Landlord  shall  not  provide  janitorial  services  for  the  Premises.   Tenant  shall  be  solely  responsible for performing all janitorial services and other cleaning of the Premises, all in compliance with Applicable  Laws.  The janitorial and cleaning of the Premises shall be adequate to maintain the Premises in a manner consistent  with First Class Life Sciences Projects.                  6.1.5  Landlord shall provide janitorial services for the Common Areas in a manner consistent  with First Class Life Sciences Projects.                  6.1.6  System                                                pment, Tenant shall not be entitled to install or operate   installed by Tenant in accordance with terms of Article 8 of this Lease.            Tenant shall cooperate fully with Landlord at all times and abide by all regulations and requirements that  Landlord may reasonably prescribe for the proper functioning and protection of the HVAC, electrical, mechanical and  plumbing  systems;  provided  such  regulations  and  requirements  are  provided  to  Tenant  and  apply  in  a  non- discriminatory manner to similar tenants in the Project.     822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -22-                        [Zentalis Pharmaceuticals, Inc.]

 

       6.2   Interruption of Use.  Tenant agrees that Landlord shall not be liable for damages, by abatement of  Rent (except as set forth in Section 6.5 below) or otherwise, for failure to furnish or delay in furnishing any service  (including telephone and telecommunication services), or for any diminution in the quality or quantity thereof, when  such  failure  or  delay  or  diminution  is  occasioned,  in  whole  or  in  part,  by  breakage,  repairs,  replacements,  or  improvements, by any strike, lockout or other labor trouble, by inability to secure electricity, gas, water, or other fuel  at the Building or Project after reasonable effort to do so, by any riot or other dangerous condition, emergency, accident  or Casualty (as that term is defined in Section 11.1 below) whatsoever, by act or default of Tenant or other parties, or  by any other cause;  and such  failures or delays or diminution shall  never be deemed to constitute  an  eviction or  disturbance of Tenant's use and possession of the Premises or relieve Tenant from paying Rent (except as set forth in  Section 6.5 below) or performing any of its obligations under this Lease.  Furthermore, Landlord shall not be liable  under any circumstances for a loss of, or injury to, property or for injury to, or interference with, Tenant's business,  including, without limitation, loss of profits, however occurring, through or in connection with or incidental to a failure  to furnish any of the services or utilities as set forth in this Article 6.          6.3   Generator.  Tenant shall have the exclusive right to use and control (i) the 550kW emergency  electrical  generator  and  related  equipment  serving  the  10275  Building,  and  (ii)  the  250kW  emergency  electrical  generator  and  related  equipment  serving  the  10285  Building  (all  such  equipment  defined  collectively  as  the  "Emergency Generator"), to be installed by Landlord prior to the Lease Commencement Date.  Except to the extent  arising from the gross negligence or willful misconduct of Landlord, Landlord shall not be liable for any damages  whatsoever  resulting  from  any  failure  in  operation  of  the  Emergency Generator, or  the  failure  of  the  Emergency  Generator to provide suitable or adequate back-up power, including but not limited to, loss of profits, loss of rents or  other revenues, loss of business opportunity, loss of goodwill or loss of use, in each case, however occurring, or loss  to  inventory,  scientific  research,  scientific  experiments,  laboratory  animals,  products,  specimens,  samples,  and/or  scientific, business, accounting and other records of every kind and description kept at the premises and any and all  income derived or derivable therefrom.  Tenant shall not be charged any additional rental or other costs for the use of  the location in which the Emergency Generator is located.  Tenant shall maintain and repair the Emergency Generator  in good condition and repair, and in compliance with all Applicable Laws (including the maintenance of all applicable  permits), at Tenant's sole cost and expense during the Lease Term.  Tenant's obligations with respect to the Premises,  including the insurance and indemnification obligations contained in Article 10, below, shall apply to Tenant's use of  the  Emergency  Generator  and  Tenant  shall  carry  industry  standard  Boiler  and  Machinery  insurance  covering  the  Emergency Generator.  Tenant shall surrender the Emergency Generator (and shall transfer to Landlord all permits  maintained  by  Tenant  in  connection  with  the  Emergency  Generator  during  the  Lease  Term)  concurrent  with  the  surrender of the Premises to Landlord as required hereunder in the same condition as the Emergency Generator were  in as of the date hereof, reasonable wear and tear excepted, with all permits current.          6.4   Energy Performance Disclosure Information.  Tenant hereby acknowledges that Landlord may  be required to disclose certain information concerning the energy performance of the Building pursuant to California                                                                                   Energy  Disclosure Requirements                                 the Data Verification Checklist, as defined                                   Energy Disclosure Information  agrees that (i) Landlord makes no representation or warranty regarding the energy performance of the Building or the  accuracy or completeness of the Energy Disclosure Information, (ii) the Energy Disclosure Information is for the  current occupancy and use of the Building and that the energy performance of the Building may vary depending on  future occupancy and/or use of the Building, and (iii) Landlord shall have no liability to Tenant for any errors or  omissions in the Energy Disclosure Information.  Further, Tenant hereby releases Landlord from any and all losses,  costs,  damages, expenses  and/or  liabilities relating to,  arising out of  and/or resulting from the Energy Disclosure  Requirements, including, without limitation, any liabilities ar Energy Disclosure Information to Tenant prior to the execution of this Lease; provided that the foregoing release shall   acknowledgment of the AS-IS condition of the Premises pursuant to the terms of this Lease shall be deemed to include  the  energy  performance  of  the  Building.   Tenant  further  acknowledges  that  pursuant  to  the  Energy  Disclosure  Requirements, Landlord may be required in the future to di certain third parties, including, without limitation, prospective purchasers, lenders and tenants of the Building (the   Tenant Energy Use Disclosure                         ch Tenant Energy Use Disclosures, and (B)  acknowledges  that  Landlord  shall  not  be  required  to  notify  Tenant  of  any  Tenant  Energy  Use  Disclosure  unless   822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -23-                        [Zentalis Pharmaceuticals, Inc.]

 

Landlord has been informed by Tenant that such information is of a confidential nature.  Further, Tenant hereby  releases Landlord from any and all losses, costs, damages, expenses and liabilities relating to, arising out of and/or  resulting from any Tenant Energy Use Disclosure.  The terms of this Section 6.4 shall survive the expiration or earlier  termination of this Lease.          6.5   Abatement of Rent. In the event that Tenant is prevented from using, and does not use, the Premises  or any portion thereof, as a result of (i) any repair, maintenance or alteration performed by Landlord, or which Landlord  failed to perform, after the Lease Commencement Date and required by this Lease, which substantially interferes with  Tenant's use of the Premises, or (ii) any failure by Landlord to provide services, utilities or access to the Premises  required by this Lease to be provided by Landlord as a result of circumstances within Landlord's control (either such  set of circumstances as set forth in items (i) or (ii), above, to be known as an "Abatement Event"), then Tenant shall  give  Landlord  notice  of  such  Abatement  Event,  and  if  such  Abatement  Event  continues  for  five  (5)  consecutive  business days after Landlord's receipt of any such notice (the "Eligibility Period") and Landlord does not diligently  commence and pursue to completion the remedy of such Abatement Event, then the Base Rent and Tenant's Share of  Direct Expenses shall be abated or reduced, as the case may be, after expiration of the Eligibility Period for such time  that Tenant continues to be so prevented from using, and does not use for the normal conduct of Tenant's business,  the Premises or a portion thereof, in the proportion that the rentable area of the portion of the Premises that Tenant is  prevented from using, and does not use, bears to the total rentable area of the Premises; provided, however, in the  event that Tenant is prevented from using, and does not use, a portion of the Premises for a period of time in excess  of the Eligibility Period and the remaining portion of the Premises is not sufficient to allow Tenant to effectively  conduct its business therein, and if Tenant does not conduct its business from such remaining portion, then for such  time after expiration of the Eligibility Period during which Tenant is so prevented from effectively conducting its  business therein, the Base Rent and Tenant's Share of Direct Expenses for the entire Premises shall be abated for such  time as Tenant continues to be so prevented from using, and does not use, the Premises. If, however, Tenant reoccupies  any portion of the Premises during such period, the Rent allocable to such reoccupied portion, based on the proportion  that the rentable area of such reoccupied portion of the Premises bears to the total rentable area of the Premises, shall  be payable by Tenant from the date Tenant reoccupies such portion of the Premises.  To the extent an Abatement  Event is caused by an event covered by Articles 11 or 13 of this Lease, then Tenant's right to abate rent shall be  governed by the terms of such Article 11 or 13, as applicable, and the Eligibility Period shall not be applicable thereto.  Such right to abate Base Rent and Tenant's Share of Direct Expenses shall be Tenant's sole and exclusive remedy for  rent abatement at law or in equity for an Abatement Event. Except as provided in this Section 6.5, nothing contained  herein shall be interpreted to mean that Tenant is excused from paying Rent due hereunder.   7.    REPAIRS           7.1   Tenant Repair Obligations.  Tenant shall, at Tenant's own expense, keep the Premises, including  all improvements, fixtures and furnishings therein, and the floor or floors of the Building on which the Premises are  located, in good order, repair and condition at all times during the Lease Term, except for damage caused by ordinary  wear and tear or beyond the reasonable control of Tenant or from casualty events.  Landlord may, but shall not be  required  to,  enter  the  Premises  pursuant  to  the  terms  of  Article  27,  below,  to  make  such  repairs,  alterations,  improvements or additions to the Premises or to the Project or to any equipment located in the Project as Landlord  shall desire or deem necessary or as Landlord may be required to do by governmental or quasi-governmental authority  or court order or decree.  Tenant hereby waives any and all rights under and benefits of subsection 1 of Section 1932  and  Sections 1941  and  1942 of  the  California  Civil  Code  or  under  any similar  law,  statute, or ordinance now  or  hereafter in effect.           7.2   Landlord Repair Obligations.  Landlord shall be responsible, as a part of Operating Expenses, for  repairs to and routine maintenance of the Project including without limitation: (1) exterior windows, window frames,  window casements (including the repairing, resealing, cleaning and replacing of exterior windows); (2) exterior doors,  door frames and door closers; (3) the Building (as opposed to the Premises) and Project plumbing, sewer, drainage,  electrical,  fire  protection,  life  safety  and  security  systems  and  equipment,  existing  heating,  ventilation  and  air- conditioning systems, and all other mechanical and HVAC systems and equipment serving the Building as a whole  and not exclusive to a particular floor of the Premises (collectively, the "Building Systems"), (4) the exterior glass,  exterior walls, foundation and roof (including roof membrane) of the Building, the structural portions of the floors of  the  Building  (the  "Building  Structure"),  including,  without  limitation,  any  painting,  sealing,  patching  and  waterproofing of exterior walls, and (5) repairs to the elevator in the Building and underground utilities, except to the   822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -24-                        [Zentalis Pharmaceuticals, Inc.]

 

extent that any such repairs are required due to the negligence or willful misconduct of Tenant (the "Landlord Repair  Obligations"); provided, however, that if such repairs are due to the negligence or willful misconduct of Tenant,  Landlord shall nevertheless make such repairs at Tenant's expense, or, if covered by Landlord's insurance, Tenant  shall only be obligated to pay any deductible in connection therewith.  Costs expended by Landlord in connection  with the Landlord Repair Obligations shall be included in Operating Expenses to the extent allowed pursuant to the  terms of Article 4, above.  Landlord shall reasonably cooperate with Tenant to enforce any warranties that Landlord  holds that could reduce Tenant's maintenance obligations under this Lease.   8.    ADDITIONS AND ALTERATIONS          8.1   Landlord's  Consent  to  Alterations.   Tenant  may  not  make  any  improvements,  alterations,  additions or changes to the Premises or any mechanical, plumbing or HVAC facilities or systems pertaining to the  Premises  (collectively,  the  "Alterations")  without  first  procuring  the  prior  written  consent  of  Landlord  to  such  Alterations, which consent shall be requested by Tenant not less than thirty (30) days prior to the commencement  thereof, and which consent shall not be unreasonably withheld, conditioned or delayed by Landlord, provided it shall  be deemed reasonable for Landlord to withhold its consent to any Alteration which adversely affects the structural  portions or the systems or equipment of the Building or is visible from the exterior of the Building.  Notwithstanding   without Landlord's prior consent, to the extent that such Alterations (i) do not affect the building systems or equipment,  (ii) are not visible from the exterior of the Building, and (iii) cost less than $75,000.00 for a particular job of work.   The construction of the initial improvements to the Premises shall be governed by the terms of the Tenant Work Letter  and not the terms of this Article 8.          8.2   Manner  of  Construction.   Landlord  may  impose,  as  a  condition  of  its  consent  to  any  and  all  Alterations or repairs of the Premises or about the Premises, such requirements as Landlord in its reasonable discretion  may  deem desirable,  including,  but  not  limited  to, the  requirement that upon Landlord's  request, Tenant shall, at  Tenant's expense, remove such Alterations upon the expiration or any early termination of the Lease Term.  Tenant  shall construct such Alterations and perform such repairs in a good and workmanlike manner, in conformance with  any and all applicable federal, state, county or municipal laws, rules and regulations and pursuant to a valid building  permit, issued by the city in which the Building is located (or other applicable governmental authority).  Tenant shall  not  use  (and  upon  notice  from  Landlord  shall  cease  using)  contractors,  services,  workmen,  labor,  materials  or  equipment that, in Landlord's reasonable judgment, would disturb labor harmony with the workforce or trades engaged  in performing other work, labor or services in or about the Building or the Common Areas.  Upon completion of any  Alterations (or repairs), Tenant shall deliver to Landlord final lien waivers from all contractors, subcontractors and  materialmen  who  performed  such  work.   In  addition  to  Tenant's  obligations  under  Article  9  of  this  Lease,  upon  completion of any Alterations, Tenant agrees to cause a Notice of Completion to be recorded in the office of the  Recorder of the County of San Diego in accordance with Section 3093 of the Civil Code of the State of California or  any successor statute, and Tenant shall deliver to the Project construction manager a reproducible copy of the "as  built" drawings of the Alterations as well as all permits, approvals and other documents issued by any governmental  agency in connection with the Alterations.          8.3   Payment for Improvements.  Tenant shall reimburse Landlord for Landlord's reasonable, actual,  out-of-pocket costs and expenses actually incurred in connection with Landlord's review of such work.          8.4   Construction Insurance.  In addition to the requirements of Article 10 of this Lease, in the event  that Tenant makes any Alterations, prior to the commencement of such Alterations, Tenant shall provide Landlord  with evidence that Tenant carries "Builder's All Risk" insurance in an amount approved by Landlord covering the  construction of such Alterations, and such other insurance as Landlord may reasonably require, it being understood  and agreed that all of such Alterations shall be insured by Tenant pursuant to Article 10 of this Lease immediately  upon  completion  thereof.   In  addition,  Tenant's  contractors  and  subcontractors  shall  be  required  to  carry  (i) Commercial General Liability Insurance in an amount approved by Landlord, with Landlord, and, at Landlord's  option, Landlord's property manager and project manager, as additional insureds in an amount approved by Landlord,  and  otherwise  in  accordance  with  the  requirements  of  Article  10  of  this  Lease,  and  (ii) workers  compensation  insurance with a waiver of subrogation in favor of Landlord .  Landlord may, in its discretion, require Tenant to obtain  a lien and completion bond or some alternate form of security satisfactory to Landlord in an amount sufficient to  ensure the lien-free completion of such Alterations and naming Landlord as a co-obligee.   822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -25-                        [Zentalis Pharmaceuticals, Inc.]

 

       8.5   Landlord's Property.  All Alterations, improvements, fixtures, equipment and/or appurtenances  which may be installed or placed in or about the Premises, from time to time, shall be at the sole cost of Tenant and  shall be and become the property of Landlord and remain in place at the Premises following the expiration or earlier  termination of this Lease; provided that the foregoing sha foregoing, Landlord may, by written notice to Tenant prior to the end of the Lease Term, or given following any earlier  termination of this Lease, require Tenant, at Tenant's expense, to remove any Alterations and/or improvements and/or  systems and equipment within the Premises and to repair any damage to the Premises and Building caused by such  removal and return the affected portion of the Premises to a building standard tenant improved condition as determined  by Landlord, provided further, however, notwithstanding the foregoing, upon request by Tenant at the time of Tenant's  request for Landlord's consent to any Alteration or improvement, or at the time of Tenant's notice for any Alteration  that  does  not  require  Landlord's  consent,  Landlord  shall  notify  Tenant  whether  the  applicable  Alteration  or  improvement will be required to be removed pursuant to the terms of this Section 8.5.  If Tenant fails to complete such  removal and/or to repair any damage caused by the removal of any Alterations and/or improvements and/or systems  and equipment in the Premises and return the affected portion of the Premises to a building standard tenant improved  condition as reasonably determined by Landlord, Landlord may do so and may charge the cost thereof to Tenant.   Tenant hereby protects, defends, indemnifies and holds Landlord harmless from any liability, cost, obligation, expense  or claim of lien in any manner relating to the installation, placement, removal or financing of any such Alterations,  improvements, fixtures and/or equipment in, on or about the Premises, which obligations of Tenant shall survive the  expiration or earlier termination of this Lease.   9.    COVENANT AGAINST LIENS     Tenant  shall  keep  the  Project  and  Premises  free  from  any  liens  or  encumbrances arising out of the work performed, materials furnished or obligations incurred by or on behalf of Tenant,  and shall protect, defend, indemnify and hold Landlord harmless from and against any claims, liabilities, judgments  or costs (including, without  limitation, reasonable  attorneys'  fees and costs)  arising out  of  same or in  connection  therewith.  Tenant shall give Landlord notice at least twenty (20) days prior to the commencement of any such work  on  the  Premises  (or  such  additional  time  as  may  be  necessary  under  Applicable  Laws)  to  afford  Landlord  the  opportunity of posting and recording appropriate notices of non-responsibility (to the extent applicable pursuant to  then Applicable Laws).  Tenant shall remove any such lien or encumbrance by bond or otherwise within ten (10)  business days after notice by Landlord, and if Tenant shall fail to do so, Landlord may pay the amount necessary to  remove such lien or encumbrance, without being responsible for investigating the validity thereof.     10.   INSURANCE          10.1  Indemnification and Waiver.  Except to the extent arising from the gross negligence or willful  misconduct of Landlord, Tenant hereby assumes all risk of damage to property or injury to persons in, upon or about  the  Premises  from  any  cause  whatsoever  and  agrees  that  Landlord,  its  partners,  subpartners  and  their  respective  officers,  agents,  servants,  employees,  lenders,  any  property  manager  and  independent  contractors  (collectively,  "Landlord Parties") shall not be liable for, and are hereby released from any responsibility for, any damage either to  person or property or resulting from the loss of use thereof, which damage is sustained by Tenant or by other persons  claiming through Tenant.  Except to the extent arising from the gross negligence or willful misconduct of Landlord,  Tenant shall indemnify, defend, protect, and hold harmless the Landlord Parties from any and all claims, loss, cost,  damage, injury, expense and liability (including without limitation court costs and reasonable attorneys' fees) incurred  in connection with or arising from any cause in, on or about the Premises, any acts, omissions or negligence of Tenant  or of any person claiming by, through or under Tenant, or of the contractors, agents, servants, employees, invitees,  guests or licensees of Tenant or any such person, in, on or about the Project or any breach of the terms of this Lease,  either prior to, during, or after the expiration of the Lease Term, provided that the terms of the foregoing indemnity  shall not apply if and from the time that a final adjudication has resulted in a finding of willful misconduct of Landlord.   Landlord shall indemnify, defend, protect, and hold harmless Tenant from any and all loss, cost, damage, expense and  liability  (including  without  limitation  reasonable  attorneys'  fees)  arising  from  the  gross  negligence  or  willful  misconduct of Landlord in, on or about the Project, except to the extent caused by the negligence or willful misconduct  of the Tenant Parties.  Should either party be named as a defendant in any suit brought against the other party in  connection with or arising out of this Lease, the indemnifying party shall pay to indemnified party its reasonable costs  and  expenses  incurred  in  such  suit,  including  without  limitation,  its  actual  professional  fees  such  as  reasonable  appraisers', accountants' and attorneys' fees.  The provisions of this Section 10.1 shall survive the expiration or sooner  termination of this Lease with respect to any claims or liability arising in connection with any event occurring prior  to such expiration or termination.     822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -26-                        [Zentalis Pharmaceuticals, Inc.]

 

       10.2  Tenant's Compliance With Landlord's Property Insurance.  Landlord shall insure the Building  during the Lease Term against loss or damage under an "all risk" property insurance policy.  Such coverage shall be  in such amounts, from such companies, and on such other terms and conditions, as Landlord may from time to time  reasonably determine.  Additionally, at the option of Landlord, such insurance coverage may include the risks of  earthquakes  and/or  flood  damage  and  additional  hazards,  a  rental  loss  endorsement  and  one  or  more  loss  payee  endorsements in favor of the holders of any mortgages or deeds of trust encumbering the interest of Landlord in the  Building or the ground or underlying lessors of the Building, or any portion thereof.  Tenant shall, at Tenant's expense,  comply with all insurance company requirements pertaining to the use of the Premises.  If Tenant's conduct or use of  the Premises causes any increase in the premium for such insurance policies then Tenant shall reimburse Landlord for  any such increase. Tenant, at Tenant's expense, shall comply with all rules, orders, regulations or requirements of the  American  Insurance  Association  (formerly  the  National  Board  of  Fire  Underwriters)  and  with  any  similar  body.    and any damage to the Premises as they may require in connection with the placement of insurance for the Premises  or the adjusting of any losses to the Premises.          10.3  Tenant's Insurance.  Tenant shall maintain the following coverages in the following amounts.                10.3.1 Commercial  General  Liability  Insurance  on  an  occurrence  form  covering  the  insured  against claims of bodily injury, personal injury and property damage (including loss of use thereof) arising out of  Tenant's operations, and contractual liabilities including a contractual coverage, and including products and completed  operations coverage, for limits of liability on a per location basis of not less than:         Bodily Injury and                       $5,000,000 each occurrence        Property Damage Liability               $5,000,000 annual aggregate         Personal Injury Liability               $3,000,000 each occurrence                                                $3,000,000 annual aggregate                                                   These amounts may be satisfied by a combination of primary and excess or umbrella liability insurance providing  additional limits of coverage.                10.3.2 Property  Insurance  covering  (i)  all  office  furniture,  business  and  trade  fixtures,  office  equipment, free-standing cabinet work, movable partitions, merchandise and all other items of Tenant's property on  the Premises installed by, for, or at the expense of Tenant, (ii) the "Tenant Improvements," as that term is defined in  the Tenant Work Letter, and any other improvements which exist in the Premises as of the Lease Commencement  Date (excluding the Base Building) (the "Original Improvements"), and (iii) all other improvements, alterations and  additions to the Premises.  Such insurance shall be written on an "all risks" of physical loss or damage basis, for the  full replacement cost value (subject to reasonable deductible amounts) new without deduction for depreciation of the  covered  items  and  in  amounts  that  meet  any  co-insurance  clauses  of  the  policies  of  insurance  and  shall  include  coverage for damage or other loss caused by fire or other peril including, but not limited to, vandalism and malicious  mischief, theft, water damage of any type, including sprinkler leakage, bursting or stoppage of pipes, and explosion.                10.3.3 Business  Income  Interruption  for  one  (1)  year  plus  Extra  Expense  insurance  in  such  amounts as will reimburse Tenant for actual direct or indirect loss of earnings attributable to the risks outlined in  Section 10.3.2 above.                10.3.4 Worker's Compensation and Employer's Liability or other similar insurance pursuant to all  applicable  state  and  local  statutes  and  regulations.   The  policy  shall  include  a  waiver  of  subrogation  in  favor  of  Landlord, its employees, Lenders and any property manager or partners.          10.4  Form of Policies.  The minimum limits of policies of insurance required of Tenant under this Lease  shall in no event limit the liability of Tenant under this Lease.  Such insurance shall (i) name Landlord, its subsidiaries  and affiliates, its property manager (if any) and any other party the Landlord so specifies, as an additional insured or  loss payee, as applicable, including Landlord's managing agent, if any; (ii) be issued by an insurance company having   822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -27-                        [Zentalis Pharmaceuticals, Inc.]

 

a rating of not less than A:IX in Best's Insurance Guide or which is otherwise acceptable to Landlord and licensed to  do business in the State of California; (iv) be primary insurance as to all claims thereunder and provide that any  insurance carried by Landlord is excess and is non-contributing with any insurance required of Tenant; and (v) be in  form and content reasonably acceptable to Landlord.  Tenant shall provide Landlord and any mortgagee of Landlord  with written notice if said insurance is expected to be canceled or coverage changed at least thirty (30) days' prior to  such cancelation or modification.  Tenant shall deliver said policy or policies or certificates thereof to Landlord on or  before the Lease Commencement Date and at least ten (10) days before the expiration dates thereof.  In the event  Tenant shall fail to procure such insurance, or to deliver such policies or certificate, Landlord may, at its option,  procure such policies for the account of Tenant, and the cost thereof shall be paid to Landlord within five (5) business  days after delivery to Tenant of bills therefor.          10.5  Subrogation.  Landlord and Tenant hereby agree to look solely to, and seek recovery only from,  their  respective  insurance  carriers  in  the  event  of  a  property  or  business  interruption  loss  to  the  extent  that  such  coverage is agreed to be provided hereunder.  The parties each hereby waive all rights and claims against each other  for such losses, and waive all rights of subrogation of their respective insurers, provided such waiver of subrogation  shall not affect the right to the insured to recover thereunder.  The parties agree that their respective insurance policies  do now, or shall, contain the waiver of subrogation.          10.6  Additional Insurance Obligations.  Tenant shall carry and maintain during the entire Lease Term,  at Tenant's sole cost and expense, increased amounts of the insurance required to be carried by Tenant pursuant to this  Article  10  and  such  other  reasonable  types  of  insurance  coverage  and  in  such  reasonable  amounts  covering  the  Premises and Tenant's operations therein, as may be reasonably requested by Landlord or Landlord's lender, but in no  event in excess of the amounts and types of insurance then being required by landlords of buildings comparable to  and in the vicinity of the Building.   11.   DAMAGE AND DESTRUCTION          11.1  Repair of Damage.  Tenant shall promptly notify Landlord of any damage to the Premises resulting  from fire or any other casualty to the extent Tenant is actually aware of such damage ("Casualty").  If the Premises  or any Common Areas serving or providing access to the Premises shall be damaged by Casualty, Landlord shall  promptly and diligently, subject to reasonable delays for insurance adjustment or other matters beyond Landlord's  reasonable control, and subject to all other terms of this Article 11, restore the Base Building and such Common Areas.   Such restoration shall be to substantially the same condition of the Base Building and the Common Areas prior to the  Casualty, except for modifications required by zoning and building codes and other laws or by the holder of a mortgage  on the Building or Project or any other modifications to the Common Areas deemed desirable by Landlord, which are  consistent with the character of the Project, provided that access to the Premises shall not be materially impaired.   Subject to the terms of Section 11.2, below, Tenant shall, at its sole cost and expense, repair any injury or damage to  the  Tenant  Improvements  and  the  Original  Improvements  installed  in  the  Premises  and  shall  return  such  Tenant  Improvements and Original Improvements to their original condition except for modifications required by zoning and  building codes and other Applicable Laws.  Whether or not Landlord delivers a "Landlord Repair Notice," as that term  is defined in Section 11.2 below, prior to the commencement of construction, Tenant shall submit to Landlord, for  Landlord's review and approval, all plans, specifications and working drawings relating thereto, and Landlord shall  select  the  contractors  to  perform  such  improvement  work.   Tenant  shall  in  addition  cooperate  with  requests  for                                                by providing the requested information within ten (10)  business days after Tenant receives the request.  Landlord shall not be liable for any inconvenience or annoyance to  Tenant or its visitors, or injury to Tenant's business resulting in any way from such damage or the repair thereof;  provided however, that if such Casualty shall have damaged the Premises or Common Areas necessary to Tenant's  occupancy, and the Premises are not occupied by Tenant as a result thereof, then during the time and to the extent the  Premises are unfit for occupancy, the Rent shall be abated in proportion to the ratio that the amount of rentable square  feet of the Premises which is unfit for occupancy for the purposes permitted under this Lease bears to the total rentable  square feet of the Premises.  In the event that Landlord shall not deliver the Landlord Repair Notice, Tenant's right to  rent abatement pursuant to the preceding sentence shall terminate as of the date which is reasonably determined by  Landlord to be the date Tenant should have completed repairs to the Premises assuming Tenant used reasonable due  diligence in connection therewith.  Notwithstanding any contrary provision of this Article 11, the parties hereby agree  as follows:  (i) the closure of the Project, the Building, the Common Areas, or any part thereof to protect public health  shall not constitute a Casualty for purposes of this Lease, (ii) Casualty covered by this Article 11 shall require that the   822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -28-                        [Zentalis Pharmaceuticals, Inc.]

 

physical or structural integrity of the Premises, the Project, the Building, or the Common Areas is degraded as a direct  result of such occurrence, and (iii) a Casualty under this Article 11 shall not be deemed to occur merely because Tenant  is unable to productively use the Premises in the event that the physical and structural integrity of the Premises is  undamaged.          11.2  Landlord's Option to Repair.  Upon the occurrence of any damage to the Premises, Landlord may,  at Landlord's option, deliver a notice (the "Landlord Repair Notice") to Tenant, and upon receipt of a Landlord  Repair Notice Tenant shall assign to Landlord (or to any party designated by Landlord) all insurance proceeds payable  to Tenant under Tenant's insurance required under Section 10.3 of this Lease, and Landlord shall repair any injury or  damage to the Tenant Improvements and the Original Improvements installed in the Premises and shall return such  Tenant Improvements and Original Improvements to their original condition; provided that if the cost of such repair  by  Landlord  exceeds  the  amount  of  insurance  proceeds  received  by  Landlord  from  Tenant's  insurance  carrier  (including by taking into account any deductible or self-insured retention), as assigned by Tenant, the cost of such  repairs  shall  be  paid  by  Tenant  to  Landlord  prior  to  Landlord's  commencement  of  repair  of  the  damage.   Notwithstanding the terms of Section 11.1 of this Lease, Landlord may elect not to rebuild and/or restore the Premises,  Building and/or Project, and instead terminate this Lease, by notifying Tenant in writing of such termination within  sixty (60) days after the date of discovery of the damage, such notice to include a termination date giving Tenant sixty  (60) days to vacate the Premises, but Landlord may so elect only if the Building or Project shall be damaged by  Casualty, whether or not the Premises are affected, and one or more of the following conditions is present: (i) in  Landlord's reasonable judgment, repairs cannot reasonably be completed within one hundred eighty (180) days after  the date of discovery of the damage (when such repairs are made without the payment of overtime or other premiums);  (ii) the holder of any mortgage on the Building or Project or ground lessor with respect to the Building or Project shall  require that the insurance proceeds or any portion thereof be used to retire the mortgage debt, or shall terminate the  ground lease, as the case may be; (iii) the damage is not fully covered by Landlord's insurance policies; (iv) Landlord  decides  to  rebuild  the  Building  or  Common  Areas  so  that  they  will  be  substantially  different  structurally  or  architecturally; (v) the damage occurs during the last twelve (12) months of the Lease Term; or (vi) any owner of any  other portion of the Project, other than Landlord, does not intend to repair the damage to such portion of the Project;  provided, however, that if Landlord does not elect to terminate this Lease pursuant to Landlord's termination right as  provided above, and the repairs cannot, in the reasonable opinion of Landlord, be completed within one hundred eighty  (180) days after being commenced, Tenant may elect, no earlier than sixty (60) days after the date of the damage and  not later than ninety (90) days after the date of such damage, to terminate this Lease by written notice to Landlord  effective as of the date specified in the notice, which date shall not be less than thirty (30) days nor more than sixty  (60) days after the date such notice is given by Tenant.  Notwithstanding the provisions of this Section 11.2, Tenant  shall have the right to terminate this Lease under this Section 11.2 only if each of the following conditions is satisfied:   (a) the damage to the Project by Casualty was not caused by the gross negligence or intentional act of Tenant or its  partners or subpartners and their respective officers, agents, servants, employees, and independent contractors; (b)  Tenant is not then in default under this Lease; (c) as a result of the damage, Tenant cannot reasonably conduct business  from the Premises following such Casualty; and, (d) as a result of the damage to the Project, Tenant does not occupy  or use the Premises at all for the conduct of Tenant's business following such Casualty; provided that storage or  removal of personal property and/or routine maintenance of the Premises shall not be considered use of the Premises  by Tenant for purposes of this Section 11.2.            11.3  Waiver of Statutory Provisions.  The provisions of this Lease, including this Article 11, constitute  an express agreement between Landlord and Tenant with respect to any and all damage to, or destruction of, all or any  part of the Premises, the Building or the Project, and any statute or regulation of the State of California, including,  without limitation, Sections 1932(2) and 1933(4) of the California Civil Code, with respect to any rights or obligations  concerning damage or destruction in the absence of an express agreement between the parties, and any other statute  or regulation, now or hereafter in effect, shall have no application to this Lease or any damage or destruction to all or  any part of the Premises, the Building or the Project.   12.   NONWAIVER     No provision of this Lease shall be deemed waived by either party hereto unless expressly  waived in a writing signed thereby.  The waiver by either party hereto of any breach of any term, covenant or condition  herein contained shall not be deemed to be a waiver of any subsequent breach of same or any other term, covenant or  condition herein contained.  The subsequent acceptance of Rent hereunder by Landlord shall not be deemed to be a  waiver of any preceding breach by Tenant of any term, covenant or condition of this Lease, other than the failure of  Tenant to pay the particular Rent so accepted, regardless of Landlord's knowledge of such preceding breach at the   822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -29-                        [Zentalis Pharmaceuticals, Inc.]

 

time of acceptance of such Rent.  No acceptance of a lesser amount than the Rent herein stipulated shall be deemed a  waiver of Landlord's right to receive the full amount due, nor shall any endorsement or statement on any check or  payment or any letter accompanying such check or payment be deemed an accord and satisfaction, and Landlord may  accept such check or payment without prejudice to Landlord's right to recover the full amount due.  No receipt of  monies by Landlord from Tenant after the termination of this Lease shall in any way alter the length of the Lease Term  or of Tenant's right of possession hereunder, or after the giving of any notice shall reinstate, continue or extend the  Lease Term or affect any notice given Tenant prior to the receipt of such monies, it being agreed that after the service  of notice or the commencement of a suit, or after final judgment for possession of the Premises, Landlord may receive  and collect any Rent due, and the payment of said Rent shall not waive or affect said notice, suit or judgment.   13.   CONDEMNATION         If the whole or any part of the Premises, Building or Project shall be taken by  power of eminent domain or condemned by any competent authority for any public or quasi-public use or purpose, or  if any adjacent property or street shall be so taken or condemned, or reconfigured or vacated by such authority in such  manner as to require the use, reconstruction or remodeling of any part of the Premises, Building or Project, or if  Landlord shall grant a deed or other instrument in lieu of such taking by eminent domain or condemnation, Landlord  shall have the option to terminate this Lease effective as of the date possession is required to be surrendered to the  authority.   Tenant  shall  not  because  of  such  taking  assert  any  claim  against  Landlord  or  the  authority  for  any  compensation because of such taking and Landlord shall be entitled to the entire award or payment in connection  therewith, except that Tenant shall have the right to file any separate claim available to Tenant for any taking of  Tenant's personal property and fixtures belonging to Tenant and removable by Tenant upon expiration of the Lease  Term pursuant to the terms of this Lease, and for moving expenses, so long as such claims do not diminish the award  available to Landlord, its ground lessor with respect to the Building or Project or its mortgagee, and such claim is  payable separately to Tenant.  All Rent shall be apportioned as of the date of such termination.  If any part of the  Premises shall be taken, and this Lease shall  not be so terminated, the Rent shall be proportionately abated.  Tenant  hereby waives any and all rights it might otherwise have pursuant to Section 1265.130 of The California Code of Civil  Procedure.  Notwithstanding anything to the contrary contained in this Article 13, in the event of a temporary taking  of all or any portion of the Premises for a period of one hundred and eighty (180) days or less, then this Lease shall  not terminate but the Base Rent and the Additional Rent shall be abated for the period of such taking in proportion to  the ratio that the amount of rentable square feet of the Premises taken bears to the total rentable square feet of the  Premises.  Landlord shall be entitled to receive the entire award made in connection with any such temporary taking.     Notwithstanding any contrary provision of this Lease, the following governmental actions shall not constitute a taking  or condemnation, either permanent or temporary: (i) an action that requires Tenant's business or the Building or Project  to close during the Lease Term, and (ii) an action taken for the purpose of protecting public safety (e.g., to protect  against acts of war, the spread of communicable diseases, or an infestation), and no such governmental actions shall  entitle Tenant to any compensation from Landlord or any authority, or Rent abatement or any other remedy under this  Lease.   14.   ASSIGNMENT AND SUBLETTING          14.1  Transfers.   Tenant  shall  not,  without  the  prior  written  consent  of  Landlord,  assign,  mortgage,  pledge,  hypothecate,  encumber,  or  permit  any  lien  to  attach  to,  or  otherwise  transfer,  this  Lease  or  any  interest  hereunder, permit any assignment, or other transfer of this Lease or any interest hereunder by operation of law, sublet  the Premises or any part thereof, or enter into any license or concession agreements or otherwise permit the occupancy  or use of the Premises or any part thereof by any persons other than Tenant and its employees and contractors (all of  the foregoing are hereinafter sometimes referred to collectively as "Transfers" and any person to whom any Transfer  is made or sought to be made is hereinafter sometimes referred to as a "Transferee").  If Tenant desires Landlord's  consent to any Transfer, Tenant shall notify Landlord in writing, which notice (the "Transfer Notice") shall include  (i) the proposed effective date of the Transfer, which shall not be less than thirty (30) days nor more than one hundred  eighty (180) days after the date of delivery of the Transfer Notice, (ii) a description of the portion of the Premises to  be transferred (the "Subject Space"), (iii) all of the terms of the proposed Transfer and the consideration therefor,  including calculation of the "Transfer Premium", as that term is defined in Section 14.3 below, in connection with  such Transfer, the name and address of the proposed Transferee, and a copy of all existing executed and/or proposed  documentation pertaining to the proposed Transfer, and (iv) current financial statements of the proposed Transferee  certified by an officer, partner or owner thereof, business credit and personal references and history of the proposed  Transferee and any other information reasonably required by Landlord which will enable Landlord to determine the  financial responsibility, character, and reputation of the proposed Transferee, nature of such Transferee's business and   822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -30-                        [Zentalis Pharmaceuticals, Inc.]

 

proposed use of the Subject Space.  Any Transfer made without Landlord's prior written consent shall, at Landlord's  option, be null, void and of no effect, and shall, at Landlord's option, constitute an Event of Default by Tenant under  this Lease.  Whether or not Landlord consents to any proposed Transfer, Tenant shall pay Landlord's reasonable review  and processing fees, as well as any reasonable professional fees (including, without limitation, attorneys', accountants',  architects', engineers' and consultants' fees) incurred by Landlord, not to exceed $3,000 for a Transfer in the ordinary  course of business, within thirty (30) days after written request by Landlord.          14.2  Landlord's Consent.  Landlord shall not unreasonably withhold, condition or delay its consent to  any proposed Transfer of the Subject Space to the Transferee on the terms specified in the Transfer Notice.  Without  limitation as to other reasonable grounds for withholding consent, the parties hereby agree that it shall be reasonable  under this Lease and under any Applicable Law for Landlord to withhold consent to any proposed Transfer where one  or more of the following apply:                14.2.1 The  Transferee  is  of  a  character  or  reputation  or  engaged  in  a  business  which  is  not  consistent with the quality of the Building or the Project;                14.2.2 The Transferee is either a governmental agency or instrumentality thereof;                14.2.3 The Transferee is not a party of reasonable financial worth and/or financial stability in light  of the responsibilities to be undertaken in connection with the Transfer on the date consent is requested; or                14.2.4 The proposed Transfer would cause a violation of another lease for space in the Project, or  would give an occupant of the Project a right to cancel its lease.          If Landlord consents to any Transfer pursuant to the terms of this Section 14.2 (and does not exercise any  recapture  rights  Landlord  may  have  under  Section 14.4  of  this  Lease),  Tenant  may  within  six  (6)  months  after  Landlord's consent, but not later than the expiration of said six-month period, enter into such Transfer of the Premises  or portion thereof, upon substantially the same terms and conditions as are set forth in the Transfer Notice furnished  by Tenant to Landlord pursuant to Section 14.1 of this Lease, provided that if there are any changes in the terms and  conditions from those specified in the Transfer Notice such that Landlord would initially have been entitled to refuse  its consent to such Transfer under this Section 14.2, Tenant shall again submit the Transfer to Landlord for its approval  and other action under this Article 14 (including Landlord's right of recapture, if any, under Section 14.4 of this Lease).   Notwithstanding anything to the contrary in this Lease, if Tenant or any proposed Transferee claims that Landlord has  unreasonably withheld or delayed its consent under Section 14.2 or otherwise has breached or acted unreasonably  under this Article 14, their sole remedies shall be a suit for contract damages (other than damages for injury to, or  interference with, Tenant's business including, without limitation, loss of profits, however occurring) or declaratory  judgment and an injunction for the relief sought, and Tenant hereby waives all other remedies, including, without  limitation, any right at law or equity to terminate this Lease, on its own behalf and, to the extent permitted under all  Applicable Laws, on behalf of the proposed Transferee.          14.3  Transfer Premium.  If Landlord consents to a Transfer, as a condition thereto which the parties  hereby agree is reasonable, Tenant shall pay to Landlord fifty percent (50%) of any "Transfer Premium," as that  term is defined in this Section 14.3, received by Tenant from such Transferee.  "Transfer Premium" shall mean all  rent, additional rent or other consideration attributable to rent and payable by such Transferee in connection with the  Transfer in excess of the Rent and Additional Rent payable by Tenant under this Lease during the term of the Transfer  on a per rentable square foot basis if less than all of the Premises is transferred, and after deduction of (i) any costs of  improvements  made  to  the  Subject  Space  in  connection  with  such  Transfer,  (ii)  brokerage  commissions  paid  in  connection with such Transfer, and (iii) reasonable legal fees incurred in connection with such Transfer.  "Transfer  Premium" shall also include, but not be limited to, key money, bonus money or other cash consideration paid by  Transferee to Tenant solely in connection with such Transfer which consideration is made in connection with this   including personal property, goodwill, intellectual property, general intangibles, etc. so long as such allocation is not   and any payment in excess of fair market value for services rendered by Tenant to Transferee or for assets, fixtures,  inventory,  equipment,  or  furniture  transferred  by  Tenant  to  Transferee  in  connection  with  such  Transfer.   The    822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -31-                        [Zentalis Pharmaceuticals, Inc.]

 

determination of the amount of Landlord's applicable share of the Transfer Premium shall be made on a monthly basis  as rent or other consideration is received by Tenant under the Transfer.            14.4  Landlord's Option as to Subject Space.  Notwithstanding anything to the contrary contained in  this Article 14, in the event Tenant contemplates a Transfer which, together with all prior Transfers then remaining in  effect, would cause an entire building (i.e., either the 10275 Building or the 10285 Building) or more of the Premises  to be Transferred for the then remaining Lease Term (taking into account any extension of the Lease Term which has  been irrevocably exercised by Tenant) (for purposes hereof, a sublease shall be deemed to be for the then remaining  Lease Term if, assuming all sublease renewal or extension rights are exercised, such sublease shall expire during the  final twelve (12) months of the Lease Term), Tenant shall give Landlord notice (the "Intention to Transfer Notice")  of such contemplated Transfer (whether or not the contemplated Transferee or the terms of such contemplated Transfer  have been determined).  The Intention to Transfer Notice shall specify the portion of and amount of rentable square  feet of the Premises which Tenant intends to Transfer (the "Contemplated Transfer Space"), the contemplated date  of commencement of the Contemplated Transfer (the "Contemplated Effective Date"), and the contemplated length  of the term of such contemplated Transfer, and shall specify that such Intention to Transfer Notice is delivered to  Landlord pursuant to this Section 14.4 in order to allow Landlord to elect to recapture the Contemplated Transfer  Space.  Thereafter, Landlord shall have the option, by giving written notice to Tenant within thirty (30) days after  receipt of any Intention to Transfer Notice, to recapture the Contemplated Transfer Space.  Such recapture shall cancel  and terminate this Lease with respect to such Contemplated Transfer Space as of the Contemplated Effective Date;  provided, however, if Landlord elects to recapture the Contemplated Transfer Space, and such Contemplated Transfer  Space is less than one hundred percent (100%) of the Premises, Tenant may, within five (5) business days, rescind its  Intention to Transfer Notice, in which case the Intention to Transfer Notice shall be of no force or effect and this Lease  shall remain full force and effect.  In the event of a recapture by Landlord, if this Lease shall be canceled with respect  to less than the entire Premises, the Rent reserved herein shall be prorated on the basis of the number of rentable square  feet retained by Tenant in proportion to the number of rentable square feet contained in the Premises, and this Lease  as so amended shall continue thereafter in full force and effect, and upon request of either party, the parties shall  execute written confirmation of the same.  If Landlord declines, or fails to elect in a timely manner, to recapture such  Contemplated Transfer Space under this Section 14.4, then, subject to the other terms of this Article 14, for a period  of nine (9) months (the "Nine Month Period") commencing on the last day of such thirty (30) day period, Landlord  shall not have any right to recapture the Contemplated Transfer Space with respect to any Transfer made during the  Nine Month Period, provided that any such Transfer is substantially on the terms set forth in the Intention to Transfer  Notice, and provided further that any such Transfer shall be subject to the remaining terms of this Article 14.  If such  a Transfer is not so consummated within the Nine Month Period (or if a Transfer is so consummated, then upon the  expiration of the term of any Transfer of such Contemplated Transfer Space consummated within such Nine Month  Period), Tenant shall again be required to submit a new Intention to Transfer Notice to Landlord with respect any  contemplated Transfer, as provided above in this Section 14.4.          14.5  Effect of Transfer.  If Landlord consents to a Transfer, (i) the terms and conditions of this Lease  shall in no way be deemed to have been waived or modified, (ii) such consent shall not be deemed consent to any  further Transfer by either Tenant or a Transferee, (iii) Tenant shall deliver to Landlord, promptly after execution, an  original executed copy of all documentation pertaining to the Transfer in form reasonably acceptable to Landlord, (iv)  Tenant  shall  furnish  upon  Landlord's  request  a  complete  statement,  certified  by  an  independent  certified  public  accountant, or Tenant's chief financial officer, setting forth in detail the computation of any Transfer Premium Tenant  has derived and shall derive from such Transfer, and (v) no Transfer relating to this Lease or agreement entered into  with respect thereto, whether with or without Landlord's consent, shall relieve Tenant or any guarantor of the Lease  from any liability under this Lease, including, without limitation, in connection with the Subject Space.  Landlord or  its authorized representatives shall have the right at all reasonable times to audit the books, records and papers of  Tenant relating to any Transfer, and shall have the right to make copies thereof.  If the Transfer Premium respecting  any Transfer shall be found understated, Tenant shall, within thirty (30) days after demand, pay the deficiency, and if  understated by more than two percent (2%), Tenant shall pay Landlord's costs of such audit.          14.6  Additional Transfers.  For purposes of this Lease, the term "Transfer" shall also include (i) if  Tenant is a partnership, the withdrawal or change, voluntary, involuntary or by operation of law, of fifty percent (50%)  or more of the partners, or transfer of fifty percent (50%) or more of partnership interests, within a twelve (12)-month  period, or the dissolution of the partnership without immediate reconstitution thereof, and (ii) if Tenant is a closely  held corporation (i.e., whose stock is not publicly held and not traded through an exchange or over the counter), (A)   822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -32-                        [Zentalis Pharmaceuticals, Inc.]

 

the dissolution, merger, consolidation or other reorganization of Tenant or (B) the sale or other transfer of an aggregate  of fifty percent (50%) or more of the voting shares of Tenant (other than to immediate family members by reason of  gift or death), within a twelve (12)-month period, or (C) the sale, mortgage, hypothecation or pledge of an aggregate  of fifty percent (50%) or more of the value of the unencumbered assets of Tenant within a twelve (12)-month period.          14.7  Occurrence of Default.  Any Transfer hereunder shall be subordinate and subject to the provisions  of this Lease, and if this Lease shall be terminated during the term of any Transfer, Landlord shall have the right to:   (i) treat such Transfer as cancelled and repossess the Subject Space by any lawful means, or (ii) require that such  Transferee attorn to and recognize Landlord as its landlord under any such Transfer.  If Tenant shall be in default  under this Lease, Landlord is hereby  irrevocably  authorized, as Tenant's agent  and  attorney-in-fact, to direct  any  Transferee to make all payments under or in connection with the Transfer directly to Landlord (which Landlord shall  apply towards Tenant's obligations under this Lease) until such default is cured.  Such Transferee shall rely on any  representation by Landlord that Tenant is in default hereunder, without any need for confirmation thereof by Tenant.   Upon any assignment, the assignee shall assume in writing all obligations and covenants of Tenant thereafter to be  performed or observed under this Lease.  No collection or acceptance of rent by Landlord from any Transferee shall  be deemed a waiver of any provision of this Article 14 or the approval of any Transferee or a release of Tenant from  any obligation under this Lease, whether theretofore or thereafter accruing.  In no event shall Landlord's enforcement  of any provision of this Lease against any Transferee be deemed a waiver of Landlord's right to enforce any term of  this Lease against Tenant or any other person.  If Tenant's obligations hereunder have been guaranteed, Landlord's  consent to any Transfer shall not be effective unless the guarantor also consents to such Transfer.          14.8  Non-Transfers.   Notwithstanding  anything  to  the  contrary  contained  in  this  Lease,  (A) an  assignment or subletting of all or a portion of the Premises to an affiliate of Tenant (an entity which is controlled by,  controls, or is under common control with, Tenant as of the date of this Lease), (B) a sale of corporate shares of capital  stock  in  Tenant  in  connection  with  an  initial  public  offering  of  Tenant's  stock  on  a  nationally-recognized  stock  exchange, (C) a an assignment of this Lease to an entity which acquires all or substantially all of the stock or assets  of Tenant, or (D) an assignment of this Lease to an entity which is the resulting entity of a merger or consolidation of  Tenant during the Lease Term, shall not be deemed a Transfer requiring Landlord's consent under this Article 14 and  shall not be subject to the provisions of Sections 14.3 and 14.5 above (any such assignee or sublessee described in  items  (A)  through  (D)  of  this  Section 14.8  hereinafter  referred  to  as  a  "Permitted  Transferee"),  provided  that  (i) Tenant  notifies  Landlord  promptly  upon  the  effective  date  of  any  such  assignment  or  sublease  and  promptly  supplies Landlord with any documents or information reasonably requested by Landlord regarding such transfer or  transferee as set forth above, (ii) Tenant is not in default, beyond any applicable notice and cure period, and such  assignment or sublease is not a subterfuge by Tenant to avoid its obligations under this Lease, (iii) such Permitted  Transferee (or the Tenant entity immediately preceding the Permitted Transfer (the "Prior Tenant"), if such Prior  Tenant remains the Tenant under this Lease) shall have a tangible net worth (not including goodwill as an asset)  computed in accordance with generally accepted accounting principles ("Net Worth") at least equal to the Net Worth  of Tenant on the day immediately preceding the effective date of such assignment or sublease; provided that if the  Prior Tenant is a surviving entity of such Permitted Transfer but is no longer the Tenant under this Lease, and such  Prior Tenant remains liable under this Lease, then Tenant may combine the Net Worth of the Prior Tenant and the  Permitted Transferee to satisfy the foregoing Net Worth requirement; provided further that, in the event of a subletting  of all or a portion of the Premises to an affiliate of Tenant pursuant to item (A) above, Tenant may combine the Net  Worth of Tenant and such affiliate of Tenant to satisfy the foregoing Net Worth requirement, and (iv) no assignment  relating to this Lease, whether with or without Landlord's consent, shall relieve Tenant from any liability under this  Lease, and, in the event of an assignment of Tenant's entire interest in this Lease, the liability of Tenant and such  transferee (other than a transferee pursuant to a stock or member interest transfer whereby this Lease is not actually  assigned to a new entity) shall be joint and several.  An assignee of Tenant's entire interest in this Lease who qualifies  as a Permitted Transferee may also be referred to herein as a "Permitted Transferee Assignee."  "Control," as used  in this Section 14.8, shall mean the ownership, directly or indirectly, of at least fifty-one percent (51%) of the voting  securities of, or possession of the right to vote, in the ordinary direction of its affairs, of at least fifty-one percent  (51%) of the voting interest in, any person or entity.   15.   SURRENDER OF PREMISES; OWNERSHIP AND REMOVAL OF TRADE FIXTURES          15.1  Surrender of Premises.  No act or thing done by Landlord or any agent or employee of Landlord  during the Lease Term shall be deemed to constitute an acceptance by Landlord of a surrender of the Premises unless   822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -33-                        [Zentalis Pharmaceuticals, Inc.]

 

such intent is specifically acknowledged in writing by Landlord.  The delivery of keys to the Premises to Landlord or  any agent or employee of Landlord shall not constitute a surrender of the Premises or effect a termination of this  Lease, whether or not the keys are thereafter retained by Landlord, and notwithstanding such delivery Tenant shall be  entitled  to the return of  such  keys at  any  reasonable time upon request until this Lease  shall have been properly  terminated.  The voluntary or other surrender of this Lease by Tenant, whether accepted by Landlord or not, or a  mutual termination hereof, shall not work a merger, and at the option of Landlord shall operate as an assignment to  Landlord  of  all  subleases  or  subtenancies  affecting  the  Premises  or  terminate  any  or  all  such  sublessees  or  subtenancies.          15.2  Removal of Tenant Property by Tenant.  Upon the expiration of the Lease Term, or upon any  earlier termination of this Lease, Tenant shall, subject to the provisions of this Article 15, quit and surrender possession  of the Premises to Landlord in as good order and condition as when Tenant took possession and as thereafter improved  by Landlord and/or Tenant, reasonable wear and tear and repairs which are specifically made the responsibility of  Landlord  hereunder  excepted.   Upon  such  expiration  or  termination,  Tenant  shall,  without  expense  to  Landlord,  remove or cause to be removed from the Premises all debris and rubbish, and such items of furniture, equipment, free- standing cabinet work, trade fixtures, movable partitions and other articles of personal property owned by Tenant or  installed or placed by Tenant at its expense in the Premises, and such similar articles of any other persons claiming  under Tenant, as Landlord may, in its sole discretion, require to be removed, and Tenant shall repair at its own expense  all damage to the Premises and Building resulting from such removal.          15.3  Environmental Assessment.  In connection with its surrender of the Premises, Tenant shall submit  to Landlord, at least thirty (30) days prior to the expiration date of this Lease (or in the event of an earlier termination  of  this  Lease,  as  soon  as  reasonably  possible  following  such  termination),  an  environmental  Assessment  of  the  Premises  by  a  competent  and  experienced  environmental  engineer  or  engineering  firm  reasonably  satisfactory  to  Landlord (pursuant to a contract approved by Landlord and providing that Landlord can rely on the Environmental  Assessment),  which  (i)  evidences  that  the  Premises  are  in  a  clean  and  safe  condition  and  free  and  clear  of  any  Hazardous Materials; and (ii) includes a review of the Premises by an environmental consultant for asbestos, mold,  fungus, spores, and other moisture conditions, on-site chemical use, and lead-based paint.  If such Environmental  Assessment reveals that remediation or Clean-up is required under any Environmental Laws, Tenant shall submit a  remediation  plan  prepared  by  a  recognized  environmental  consultant  and  shall  be  responsible  for  all  costs  of  remediation and Clean-up, as more particularly provided in Section 5.3, above.          15.4  Condition of the Building and Premises Upon Surrender.  In addition to the above requirements  of this Article 15, upon the expiration of the Lease Term, or upon any earlier termination of this Lease, Tenant shall,  surrender the Premises and Building such that the same are in compliance with all Applicable Laws and with Tenant                                             is Lease, including those relating to improvement, repair,  maintenance, compliance with law, testing and other related obligations of Tenant set forth in Article 7 of this Lease.   In the event that the Building and Premises shall be surrendered in a condition which does not comply with the terms  of this Section 15.4, because Tenant failed to comply with its obligations set forth in Lease, then following thirty   noncompliance, Landlord shall be entitled to expend all reasonable costs in order to cause the same to comply with  the required condition upon surrender and Tenant shall immediately reimburse Landlord for all such costs upon notice  and Tenant shall be deemed during the period that Tenant or Landlord, as the case may be, perform obligations relating  to the Surrender Improvements to be in holdover under Article 16 of this Lease.   16.   HOLDING OVER         If Tenant holds over after the expiration of the Lease Term or earlier termination  thereof, with the express or implied consent of Landlord, such tenancy shall be from month-to-month only, and shall  not constitute a renewal hereof or an extension for any further term.  If Tenant holds over after the expiration of the  Lease Term of earlier termination thereof, without the express or implied consent of Landlord, such tenancy shall be  deemed to be a tenancy by sufferance only, and shall not constitute a renewal hereof or an extension for any further  term.  In either case, Base Rent shall be payable at a monthly rate equal to (i) one hundred twenty-five percent (125%)  of the Base Rent applicable during the last rental period of the Lease Term under this Lease for the first (1st) month  of such holdover, and (ii) one hundred fifty percent (150%) of the Base Rent applicable during the last rental period  of the Lease Term under this Lease thereafter.  Such month-to-month tenancy or tenancy by sufferance, as the case  may be, shall be subject to every other applicable term, covenant and agreement contained herein.  Nothing contained  in this Article 16 shall be construed as consent by Landlord to any holding over by Tenant, and Landlord expressly   822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -34-                        [Zentalis Pharmaceuticals, Inc.]

 

reserves the right to require Tenant to surrender possession of the Premises to Landlord as provided in this Lease upon  the expiration or other termination of this Lease.  The provisions of this Article 16 shall not be deemed to limit or  constitute a waiver of any other rights or remedies of Landlord provided herein or at law.  If Tenant fails to surrender  the Premises upon the termination or expiration of this Lease, in addition to any other liabilities to Landlord accruing  therefrom,  Tenant  shall  protect,  defend,  indemnify  and  hold  Landlord  harmless  from  all  loss,  costs  (including  reasonable attorneys' fees) and liability resulting from such failure, including, without limiting the generality of the  foregoing, any claims made by any succeeding tenant founded upon such failure to surrender and any lost profits to  Landlord resulting therefrom.   17.   ESTOPPEL CERTIFICATES      Within ten (10) business days following a request in writing by Landlord,  Tenant shall execute, acknowledge and deliver to Landlord an estoppel certificate, which, as submitted by Landlord,  shall  be  substantially  in  the  form  of Exhibit D,  attached  hereto  (or  such  other  form  as  may  be  required  by  any  prospective mortgagee or purchaser of the Project, or any portion thereof), indicating therein any exceptions thereto  that may exist at that time, and shall also contain any other information reasonably requested by Landlord or Landlord's  mortgagee  or  prospective  mortgagee.  Any  such  certificate  may  be  relied  upon  by  any  prospective  mortgagee  or  purchaser of all or any portion of the Project.  Tenant shall execute and deliver whatever other instruments may be  reasonably required for such purposes.  At any time during the Lease Term (but not more than once in any twelve (12)  month period, except in connection with a sale or refinance of the Project, if Tenant is in monetary or material non- monetary default under this Lease, or if Tenant has identified a proposed Transferee under Article 14 above or if  Tenant request Landlord consent to an Alteration), Landlord may require Tenant to provide Landlord with a current  financial statement and the financial statement of the year immediately preceding the current financial statement year.   Such statements shall be prepared in accordance with generally accepted accounting principles and, if such is the  normal practice of Tenant, shall be audited by an independent certified public accountant.  Failure of Tenant to timely  execute, acknowledge and deliver such estoppel certificate or other instruments shall constitute an acceptance of the  Premises and an acknowledgment by Tenant that statements included in the estoppel certificate are true and correct,  without exception.   18.   SUBORDINATION        This Lease shall be subject and subordinate to all present and future ground or  underlying leases of the Building or Project and to the lien of any mortgage, trust deed or other encumbrances now or  hereafter  in  force  against  the  Building  or  Project  or  any  part  thereof,  if  any,  and  to  all  renewals,  extensions,  modifications, consolidations and replacements thereof, and to all advances made or hereafter to be made upon the  security of such mortgages or trust deeds, unless the holders of such mortgages, trust deeds or other encumbrances, or  the  lessors  under  such  ground  lease  or  underlying  leases,  require  in  writing  that  this  Lease  be  superior  thereto                Superior Holders commercially  reasonable  efforts  provide  Tenant  a  subordination  non-disturbance  and  attornment  agreement  in  commercially reasonable form provided by any future Superior Holder, which requires such Superior Holder to accept    SNDAA proceedings are brought for the foreclosure of any such mortgage or deed in lieu thereof (or if any ground lease is  terminated), to attorn, without any deductions or set-offs whatsoever, to the lienholder or purchaser or any successors  thereto upon any such foreclosure sale or deed in lieu thereof (or to the ground lessor), if so requested to do so by such  purchaser or lienholder or ground lessor, and to recognize such purchaser or lienholder or ground lessor as the lessor  under this Lease, provided such lienholder or purchaser or ground lessor shall agree to accept this Lease and not  disturb Tenant's occupancy, so long as Tenant timely pays the rent and observes and performs the terms, covenants  and conditions of this Lease to be observed and performed by Tenant.  Landlord's interest herein may be assigned as  security at any time to any lienholder.  Tenant shall, within ten (10) business days of request by Landlord, execute  such  further  instruments  or  assurances  as  Landlord  may  reasonably  deem  necessary  to  evidence  or  confirm  the  subordination or  superiority of  this Lease  to  any  such  mortgages, trust deeds, ground  leases or underlying leases                                               this Lease except as customarily related to commercially  reasonable subordination agreements.  Tenant waives the provisions of any current or future statute, rule or law which  may give or purport to give Tenant any right or election to terminate or otherwise adversely affect this Lease and the  obligations of the Tenant hereunder in the event of any foreclosure proceeding or sale.    822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -35-                        [Zentalis Pharmaceuticals, Inc.]

 

19.   DEFAULTS; REMEDIES          19.1  Events of Default.  In addition to any other Events of Default specified in this Lease, the occurrence                                                                Event of Default               19.1.1 Any failure by Tenant to pay any Rent or any other charge required to be paid under this  Lease, or any part thereof, within five (5) days following the date due with respect to Base Rent and Tenant's Share  of Direct Expenses, and within five (5) days following written notice of such failure with respect to any other charge  required to be paid under this Lease; or                19.1.2 Except where a specific time period is otherwise set forth for Tenant's performance in this  Lease, in which event the failure to perform by Tenant within such time period shall be a default by Tenant under this  Section 19.1.2, any failure by Tenant to observe or perform any other provision, covenant or condition of this Lease  to be observed or performed by Tenant where such failure continues for thirty (30) days after written notice thereof  from Landlord to Tenant; provided that if the nature of such default is such that the same cannot reasonably be cured  within a thirty (30) day period, Tenant shall not be deemed to be in default if it diligently commences such cure within  such period and thereafter diligently proceeds to rectify and cure such default; or                19.1.3 Abandonment (as defined by Applicable Laws) of the Premises by Tenant; or                19.1.4 The failure by Tenant to observe or perform according to the provisions of Articles 5, 14,  17 or 18 of this Lease  or any provision of the Tenant Work Letter, where, in each instance, such failure continues for  more than three (3) business days after notice from Landlord; or          Any notices to be provided by Landlord under this Section 19.1 shall be in lieu of, and not in addition to, any  notice required under Section 1161 et seq. of the Code of Civil Procedure, and may be served on Tenant in the manner  allowed for service of notices under this Lease.          19.2  Remedies  Upon  Event  of  Default.   Upon  the  occurrence  of  any  Event  of  Default  by  Tenant,  Landlord shall have, in addition to any other remedies available to Landlord at law or in equity (all of which remedies  shall be distinct, separate and cumulative), the option to pursue any one or more of the following remedies  (including,  without limitation, during any eviction moratorium, to the extent allowed by Applicable Law), each and all of which  shall be cumulative and nonexclusive, without any notice or demand whatsoever.                19.2.1 Terminate this Lease, in which event Tenant shall immediately surrender the Premises to  Landlord, and if Tenant fails to do so, Landlord may, without prejudice to any other remedy which it may have for  possession or arrearages in rent, enter upon and take possession of the Premises and expel or remove Tenant and any  other person who may be occupying the Premises or any part thereof, without being liable for prosecution or any claim  or damages therefor; and Landlord may recover from Tenant the following:                       (i)    The worth at the time of award of the unpaid rent which has been earned at the         time of such termination; plus                       (ii)   The worth at the time of award of the amount by which the unpaid rent which         would have been earned after termination until the time of award exceeds the amount of such rental loss that         Tenant proves could have been reasonably avoided; plus                       (iii)  The worth at the time of award of the amount by which the unpaid rent for the         balance of the Lease Term after the time of award exceeds the amount of such rental loss that Tenant proves         could have been reasonably avoided; plus                       (iv)   Any  other  amount  necessary  to  compensate  Landlord  for  all  the  detriment         proximately caused by Tenant's failure to perform its obligations under this Lease or which in the ordinary         course of things  would  be  likely to result therefrom,  specifically  including but not limited  to, brokerage         commissions and advertising expenses incurred, expenses of remodeling the Premises or any portion thereof   822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -36-                        [Zentalis Pharmaceuticals, Inc.]

 

       for a new tenant, whether for the same or a different use, and any special concessions made to obtain a new         tenant; and                       (v)    At  Landlord's  election,  such  other  amounts  in  addition  to  or  in  lieu  of  the         foregoing as may be permitted from time to time by Applicable Law.          The term "rent" as used in this Section 19.2 shall be deemed to be and to mean all sums of every nature  required to be paid by Tenant pursuant to the terms of this Lease, whether to Landlord or to others.  As used in Sections  19.2.1(i) and (ii), above, the "worth at the time of award" shall be computed by allowing interest at the rate set forth  in Article 25 of this Lease, but in no case greater than the maximum amount of such interest permitted by law.  As  used in Section 19.2.1(iii) above, the "worth at the time of award" shall be computed by discounting such amount  at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%).                  19.2.2 Landlord shall have the remedy described in California Civil Code Section 1951.4 (lessor  may continue lease in effect after lessee's breach and abandonment and recover rent as it becomes due, if lessee has  the  right  to  sublet  or  assign,  subject  only  to  reasonable  limitations).   Accordingly,  if  Landlord  does  not  elect  to  terminate  this  Lease  on  account  of  any  Event  of  Default  by  Tenant,  Landlord  may,  from  time  to  time,  without  terminating this Lease, enforce all of its rights and remedies under this Lease, including the right to recover all rent as  it becomes due.                19.2.3 Landlord shall at all times have the rights and remedies (which shall be cumulative with  each other and cumulative and in addition to those rights and remedies available under Sections 19.2.1 and 19.2.2,  above, or any law or other provision of this Lease), without prior demand or notice except as required by Applicable  Law, to seek any declaratory, injunctive or other equitable relief, and specifically enforce this Lease, or restrain or  enjoin a violation or breach of any provision hereof.            19.3  Subleases of Tenant.  Whether or not Landlord elects to terminate this Lease on account of any  Event of Default by Tenant, as set forth in this Article 19, Landlord shall have the right to terminate any and all  subleases, licenses, concessions or other consensual arrangements for possession entered into by Tenant and affecting  the Premises or may, in Landlord's sole discretion, succeed to Tenant's interest in such subleases, licenses, concessions  or arrangements.  In the event of Landlord's election to succeed to Tenant's interest in any such subleases, licenses,  concessions or arrangements, Tenant shall, as of the date of notice by Landlord of such election, have no further right  to or interest in the rent or other consideration receivable thereunder.            19.4  Efforts  to  Relet.   No  re-entry  or  repossession,  repairs,  maintenance,  changes,  alterations  and  additions, reletting, appointment of a receiver to protect Landlord's interests hereunder, or any other action or omission  by Landlord shall be construed as an election by Landlord to terminate this Lease or Tenant's right to possession, or  to accept a surrender of the Premises, nor shall same operate to release Tenant in whole or in part from any of Tenant's  obligations hereunder, unless express written notice of such intention is sent by Landlord to Tenant.  Tenant hereby  irrevocably waives any right otherwise available under any law to redeem or reinstate this Lease.          19.5  Landlord Default.  Landlord shall be in default under this Lease if Landlord fails to perform any  of its obligations hereunder following the Lease Commencement Date and such failure continues for thirty (30) days  after Tenant delivers to Landlord written notice specifying such failure; however, if such failure cannot reasonably be  cured  within  such  30-day  period,  but  Landlord  commences  to  cure  such  failure  within  such  30-day  period  and  thereafter diligently pursues the curing thereof to completion, then Landlord shall not be in default hereunder or liable  for  damages  therefor.   Except  where  the  provisions  of  this  Lease  grant  Tenant  an  express,  exclusive  remedy,  or  expressly deny Tenant a remedy, Tenant's exclusive remedy for Landlord's failure to perform its obligations under  this Lease shall be limited to damages, injunctive relief, or specific performance; in each case, Landlord's liability or  obligations with respect to any such remedy shall be limited as provided in Section 29.13.   20.   COVENANT OF QUIET ENJOYMENT       Landlord covenants that Tenant, on paying the Rent, charges  for  services  and  other  payments  herein  reserved  and  on  keeping,  observing  and  performing  all  the  other  terms,  covenants, conditions, provisions and agreements herein contained on the part of Tenant to be kept, observed and  performed, shall, during the Lease Term, peaceably and quietly have, hold and enjoy the Premises subject to the terms,    822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -37-                        [Zentalis Pharmaceuticals, Inc.]

 

covenants, conditions, provisions and agreements hereof without interference by any persons lawfully claiming by or  through Landlord.  The foregoing covenant is in lieu of any other covenant express or implied.   21.   LETTER OF CREDIT           21.1  Delivery  of  Letter  of  Credit.   Concurrent  with  Tenant's  execution  and  delivery  of  this  Lease,  Tenant shall deliver to Landlord concurrent with Tenant's execution of this Lease, as protection for the full and faithful  performance by Tenant of all of its obligations under this Lease and for all losses and damages Landlord may suffer  (or which Landlord reasonably estimates that it may suffer) as a result of any breach or default by Tenant under this  Lease, an unconditional, clean, irrevocable negotiable standby letter of credit (the "L-C") in the amount set forth in  Section 8 of the Summary (the "L-C Amount"), in the form attached hereto as Exhibit G, payable in the City of San  Diego, California, running in favor of Landlord, drawn on a bank (the "Bank") reasonably approved by Landlord and  which bank must have a rating from Standard and Poors Corporation of A- or better (or any equivalent rating thereto  from any successor or substitute rating service selected by Investor Service of A3 or better (or any equivalent  rating thereto  from any successor  rating  agency thereto)  (the  "Credit  Rating  Threshold"),  and  otherwise  conforming  in  all  respects  to  the  requirements  of  this  Article 21,  including,  without  limitation,  all  of  the  requirements  of  Section 21.2,  below,  all  as  set  forth  more  particularly  hereinbelow.  As of the date of this Lease, Landlord approved Silicon Valley Bank as the Bank.  Tenant shall pay all  expenses, points and/or fees incurred by Tenant in obtaining and maintaining the L-C.  In the event of an assignment  by Tenant of its interest in the Lease (and irrespective of whether Landlord's consent is required for such assignment),  the acceptance of any replacement or substitute letter of credit by Landlord from the assignee shall be subject to  Landlord's prior written approval, in Landlord's reasonable discretion, and the actual out-of-pocket attorney's fees  incurred by Landlord in connection with such determination shall be payable by Tenant to Landlord within ten (10)  business days of billing.  Tenant shall have no right to voluntarily replace the L-C without Landlord's prior written  approval, in Landlord's sole and absolute discretion.  Tenant shall be responsible for the payment of any and all costs  incurred  by  Landlord  relating  to  the  review  of  any  repl                                 ent is required pursuant to this Section or is otherwise requested by Tenant,  and such attorneys' fees shall be payable by Tenant to Landlord within ten (10) business days of billing.  If Landlord  approves any replacement or substitute letter of credit, Landlord shall return the L-C then held by Landlord within  one hundred (100) days following Landlord receipt of the replacement or substitute L-C tendered by Tenant; provided,  however, if Tenant provides evidence reasonably satisfactory to Landlord that Tenant has the ability to satisfy its  monetary obligations under this Lease when and as due, then Landlord shall return the L-C then held by Landlord  within thirty (30) days following Landlord receipt of the replacement or substitute L-C tendered by Tenant.            21.2    In General.  The L-C shall be "callable" at sight, permit partial draws and multiple presentations  and drawings, and be otherwise subject to the Uniform Customs and Practices for Documentary Credits (1993-Rev),  International Chamber of Commerce Publication #500, or the International Standby Practices-ISP 98, International  Chamber of Commerce Publication #590.  The L-C must provide that presentation of a drawing under the L-C may  be made by hand delivery, courier service, overnight mail, or facsimile.  Tenant further covenants and warrants as  follows:                21.2.1  Landlord Right to Transfer.  The L-C shall provide that Landlord, its successors and  assigns, may, at any time and without notice to Tenant and without first obtaining Tenant's consent thereto, transfer  (one or more times) all or any portion of its interest in and to the L-C to another party, person or entity, to Landlord's  lender or in connection with the assignment by Landlord of its rights and interests in and to this Lease.  In the event  of a transfer of Landlord's interest in the Building, Landlord shall transfer the L-C, in whole or in part, to the transferee  and thereupon Landlord shall, without any further agreement between the parties, be released by Tenant from all  liability therefor, and it is agreed that the provisions hereof shall apply to every transfer or assignment of the whole or  any portion of said L-C to a new landlord.  In connection with any such transfer of the L-C by Landlord, Tenant shall,  at Tenant's sole cost and expense, execute and submit to the Bank such applications, documents and instruments as  may  be  necessary  to  effectuate  such  transfer,  and  Tenant shall  be  responsible for paying  the  Bank's  transfer  and  processing fees in connection therewith.                21.2.2 No Assignment by Tenant.  Tenant shall neither assign nor encumber the L-C or any part  thereof.  Neither Landlord nor its successors or assigns will be bound by any assignment, encumbrance, attempted  assignment or attempted encumbrance by Tenant in violation of this Section.    822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -38-                        [Zentalis Pharmaceuticals, Inc.]

 

             21.2.3 Replenishment.  If, as a result of any drawing by Landlord on the L-C pursuant to its rights  set forth in Section 21.3 below, the amount of the L-C shall be less than the L-C Amount, Tenant shall, within the (10)  business days thereafter, provide Landlord with (i) an amendment to the L-C restoring such L-C to the L-C Amount  or  (ii) additional  L-Cs  in  an  amount  equal  to  the  deficiency,  which  additional  L-Cs  shall  comply  with  all  of  the  provisions of this Article 21, and if Tenant fails to comply with the foregoing, notwithstanding anything to the contrary  contained in Section 19.1 above, the same shall constitute an incurable default by Tenant under this Lease (without  the need for any additional notice and/or cure period).                  21.2.4 Renewal; Replacement.  If the L-C expires earlier than the date (the "LC Expiration  Date") that is one hundred (100) days after the expiration of the Lease Term, Tenant shall deliver a new L-C or  certificate of renewal or extension to Landlord at least sixty (60) days prior to the expiration of the L-C then held by  Landlord,  without  any  action  whatsoever  on  the  part  of  Landlord,  which  new  L-C  shall  be  irrevocable  and  automatically renewable through the LC Expiration Date upon the same terms as the expiring L-C or such other terms  as may be acceptable to Landlord in its sole discretion.  In furtherance of the foregoing, Landlord and Tenant agree  that the L-C shall contain a so-called "evergreen provision," whereby the L-C will automatically be renewed unless at                                               provided by the issuer to Landlord; provided, however,  that the final expiration date identified in the L-C, beyond which the L-C shall not automatically renew, shall not be  earlier than the LC Expiration Date.                21.2.5  credit rating is reduced below the Credit Rating Threshold, or if the financial condition of the Bank changes in any  other materially adverse way (either, a "Bank Credit Threat"), then Landlord shall have the right to require that  Tenant  obtain from  a  different  issuer  a  substitute  L-C  that  complies  in  all  respects  with  the  requirements  of  this   written  demand  therefor  (with  no  other  notice  or  cure  or  grace  period  being  applicable  thereto,  notwithstanding   upon the then existing L- C in whole or in part, without notice to Tenant, as more specifically described in Section 21.3,  below.  Tenant shall be responsible for the payment of any and all costs incurred with the review of any replacement   this Section or is otherwise requested by Tenant.            21.3    Application  of  Letter  of  Credit.   Tenant  hereby  acknowledges  and  agrees  that  Landlord  is  entering into this Lease in material reliance upon the ability of Landlord to draw upon the L-C as protection for the  full and faithful  performance by Tenant of all  of its obligations  under  this  Lease and  for  all  losses and damages  Landlord may suffer (or which Landlord reasonably estimates that it may suffer) as a result of any breach or default  by Tenant under this Lease.  Landlord, or its then managing agent, shall have the right to draw down an amount up to  the face amount of the L-C if any of the following shall have occurred or be applicable:  (A) such amount is due to  Landlord  under  the  terms  and  conditions  of  this  Lease,  or  (B) Tenant  has  filed  a  voluntary  petition  under  the  U. S. Bankruptcy  Code  or  any  state  bankruptcy  code  (collectively,  "Bankruptcy  Code"),  or  (C) an  involuntary  petition has been filed against Tenant under the Bankruptcy Code, or (D) the Bank has notified Landlord that the L-C  will not be renewed or extended through the LC Expiration Date, or (E) a Bank Credit Threat or Receivership (as such  term is defined in Section 21.6.1, below) has occurred and Tenant has failed to comply with the requirements of either  Section 21.2.5, above, or Section 21.6, below, as applicable.  If Tenant shall breach any provision of this Lease or  otherwise be in default hereunder or if any of the foregoing events identified in Sections 21.3(B) through (E) shall  have occurred, Landlord may, but without obligation to do so, and without notice to Tenant, draw upon the L-C, in  part or in whole, and the proceeds may be applied by Landlord (i) to cure any breach or default of Tenant and/or to  compensate Landlord for any and all damages of any kind or nature sustained or which Landlord reasonably estimates  that it will sustain resulting from Tenant's breach or default, (ii) against any Rent payable by Tenant under this Lease  that is not paid when due and/or (iii) to pay for all losses and damages that Landlord has suffered or that Landlord  reasonably estimates that it will suffer as a result of any breach or default by Tenant under this Lease.  The use,  application or retention of the L-C, or any portion thereof, by Landlord shall not prevent Landlord from exercising  any other right or remedy provided by this Lease or by any applicable law, it being intended that Landlord shall not  first be required to proceed against the L-C, and shall not operate as a limitation on any recovery to which Landlord  may otherwise be entitled.  Tenant agrees not to interfere in any way with payment to Landlord of the proceeds of the  L-C, either prior to or following a "draw" by Landlord of any portion of the L-C, regardless of whether any dispute  exists between Tenant and Landlord as to Landlord's right to draw upon the L-C.  No condition or term of this Lease   822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -39-                        [Zentalis Pharmaceuticals, Inc.]

 

shall be deemed to render the L-C conditional to justify the issuer of the L-C in failing to honor a drawing upon such  L-C in a timely manner.  Tenant agrees and acknowledges that (a) the L-C constitutes a separate and independent  contract between Landlord and the Bank, (b) Tenant is not a third party beneficiary of such contract, (c) Tenant has  no property interest whatsoever in the L-C or the proceeds thereof, and (d) in the event Tenant becomes a debtor under  any chapter of the Bankruptcy Code, neither Tenant, any trustee, nor Tenant's bankruptcy estate shall have any right  to  restrict  or  limit  Landlord's  claim  and/or  rights  to  the  L-C  and/or  the  proceeds  thereof  by  application  of  Section 502(b)(6) of the U. S. Bankruptcy Code or otherwise.          21.4    Letter of Credit not a Security Deposit.  Landlord and Tenant acknowledge and agree that in  no event or circumstance shall the L-C or any renewal thereof or any proceeds thereof be (i) deemed to be or treated  as a "security deposit" within the meaning of California Civil Code Section 1950.7, (ii) subject to the terms of such  Section 1950.7, or (iii) intended to serve as a "security deposit" within the meaning of such Section 1950.7.  The  parties hereto (A) recite that the L-C is not intended to serve as a security deposit and such Section 1950.7 and any  and all other laws, rules and regulations applicable to security deposits in the commercial context ("Security Deposit  Laws") shall have no applicability or relevancy thereto and (B) waive any and all rights, duties and obligations either  party may now or, in the future, will have relating to or arising from the Security Deposit Laws.          21.5    Proceeds of Draw.  In the event Landlord draws down on the L-C pursuant to Sections 21.3(D)  or (E), above, the proceeds of the L-C may be held by Landlord and applied by Landlord against any Rent payable by  Tenant under this Lease that is not paid when due and/or to pay for all losses and damages that Landlord has suffered  or that Landlord reasonably estimates that it will suffer as a result of any breach or default by Tenant under this Lease.   Any unused proceeds shall constitute the property of Landlord and need not be segregated from Landlord's other  assets.  Tenant hereby (i) agrees that (A) Tenant has no property interest whatsoever in the proceeds from any such  draw, and (B) such proceeds shall not be deemed to be or treated as a "security deposit" under the Security Deposit  Law, and (ii) waives all rights, duties and obligations either party may now or, in the future, will have relating to or  arising from the Security Deposit Laws.  Landlord agrees that the amount of any proceeds of the L-C received by  Landlord, and not (a) applied against any Rent payable by Tenant under this Lease that was not paid when due, or  (b) used to pay for any losses and/or damages suffered by Landlord (or reasonably estimated by Landlord that it will  suffer) as a result of any breach or default by Tenant under this Lease (the "Unused L-C Proceeds"), shall be paid by  Landlord to Tenant (x) upon receipt by Landlord of a replacement L-C in the full L-C Amount, which replacement L- C shall comply in all respects with the requirements of this Article 21, or (y) within thirty (30) days after the LC  Expiration Date; provided, however, that if prior to the LC Expiration Date a voluntary petition is filed by Tenant, or  an involuntary petition is filed against Tenant by any of Tenant's creditors, under the Bankruptcy Code, then Landlord  shall not be obligated to make such payment in the amount of the Unused L-C Proceeds until either all preference  issues relating to payments under this Lease have been resolved in such bankruptcy or reorganization case or such  bankruptcy or reorganization case has been dismissed.           21.6    Bank Placed Into Receivership.                  21.6.1 Bank  Placed Into Receivership.  In the event the  Bank  is  placed  into  receivership or  conservatorship (any such event, a "Receivership") by the Federal Deposit Insurance Corporation or any successor  or similar entity (the "FDIC"), then, effective as of the date such Receivership occurs, the L-C shall be deemed to not  meet the requirements of this Article 21, and, within ten (10) days following Landlord's notice to Tenant of such  Receivership (the "LC Replacement Notice"), Tenant shall replace the L-C with a substitute L-C from a different  issuer reasonably acceptable to Landlord and that complies in all respects with the requirements of this Article 21.  If  Tenant fails to replace such L-C with a substitute L-C from a different issuer pursuant to the terms and conditions of  this Section 21.6.1, then, notwithstanding anything in this Lease to the contrary, Landlord shall have the right, at  Landlord's option, to either (i) declare Tenant in default of this Lease for which there shall be no notice or grace or  cure periods being applicable thereto other than the aforesaid ten (10) day period), in which event, Landlord shall have  the right to pursue any and all remedies available to it under this Lease and at law, including, without limitation,  treating any Receivership as a Bank Credit Threat and exerci       der Section 21.2.5, above,  to the extent possible pursuant to then existing FDIC policy; or (ii) elect to increase the Base Rent due and owing  under the terms of this Lease pursuant to the terms and conditions of Section 21.6.2 of this Lease, below.  Tenant shall  be responsible for the payment of any and all costs incurred with the review of any replacement L- C (including                                                             required pursuant to this Section or is  otherwise requested by Tenant.     822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -40-                        [Zentalis Pharmaceuticals, Inc.]

 

             21.6.2 FAILURE TO REPLACE L-C; LIQUIDATED DAMAGES.  IN THE EVENT THAT  TENANT FAILS TO REPLACE THE L-C PURSUANT TO, AND WITHIN THE TIME PERIODS SET FORTH  IN,  SECTION 21.6.1  OF  THIS  LEASE,  ABOVE,  THEN  TENANT'S  MONTHLY  INSTALLMENT  OF  BASE  RENT SHALL BE INCREASED TO ONE HUNDRED TEN PERCENT (110%) OF ITS THEN EXISTING LEVEL  DURING THE PERIOD COMMENCING ON THE DATE THAT OCCURS TEN (10) DAYS FOLLOWING THE  DATE TENANT RECEIVES THE LC REPLACEMENT NOTICE AND ENDING ON THE EARLIER TO OCCUR  OF (I) THE DATE SUCH REPLACEMENT L-C IS DELIVERED TO LANDLORD PURSUANT TO THE TERMS  OF SECTION 21.6.1, OR (II) THE DATE WHICH IS NINETY (90) DAYS AFTER THE DATE OF SUCH LC  REPLACEMENT  NOTICE.   IN  THE  EVENT  THAT  TENANT  FAILS,  DURING  SUCH  NINETY  (90)  DAY  PERIOD FOLLOWING THE DATE OF THE LC REPLACEMENT NOTICE, TO CAUSE THE REPLACEMENT  L-C  TO  BE  DELIVERED  TO  LANDLORD  PURSUANT  TO  THE  TERMS  OF  SECTION 21.6.1,  THEN  TENANT'S  MONTHLY  INSTALLMENT  OF  BASE  RENT  SHALL  BE  INCREASED  TO  ONE  HUNDRED  TWENTY-FIVE PERCENT (125%) OF ITS THEN EXISTING LEVEL DURING THE PERIOD COMMENCING  ON THE DATE WHICH IS NINETY (90) DAYS AFTER THE DATE OF SUCH LC REPLACEMENT NOTICE  AND ENDING ON THE DATE SUCH REPLACEMENT L-C IS DELIVERED TO LANDLORD PURSUANT TO  THE TERMS OF SECTION 21.6.1, PROVIDED, HOWEVER, THAT THE TOTAL AGGREGATE AMOUNT OF  BASE RENT PAID BY TENANT IN EXCESS OF THE AMOUNT OF BASE RENT THAT TENANT WOULD  HAVE  PAID  HAD  SUCH  L-C  REPLACEMENT  FAILURE  NEVER  OCCURRED  SHALL  IN  NO  EVENT  EXCEED  THE  L-C  AMOUNT.   THE  PARTIES  AGREE  THAT  IT  WOULD  BE  IMPRACTICABLE  AND  EXTREMELY DIFFICULT TO ASCERTAIN THE ACTUAL DAMAGES SUFFERED BY LANDLORD AS A  RESULT OF TENANT'S FAILURE TO TIMELY REPLACE THE L-C FOLLOWING THE LC REPLACEMENT  NOTICE AS REQUIRED IN SECTION 21.6.1, AND THAT UNDER THE CIRCUMSTANCES EXISTING AS OF  THE  DATE  OF  THIS  LEASE,  THE  LIQUIDATED  DAMAGES  PROVIDED  FOR  IN  THIS  SECTION 21.6.2  REPRESENT A REASONABLE ESTIMATE OF THE DAMAGES WHICH LANDLORD WILL INCUR AS A  RESULT OF SUCH FAILURE, PROVIDED, HOWEVER, THAT THIS PROVISION SHALL NOT WAIVE OR  AFFECT  LANDLORD'S  RIGHTS  AND  TENANT'S  INDEMNITY  OBLIGATIONS  UNDER  OTHER  SECTIONS OF  THIS  LEASE.   THE  PARTIES  ACKNOWLEDGE  THAT  THE  PAYMENT  OF  SUCH  LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING  OF CALIFORNIA CIVIL CODE SECTION 3275 OR 3369, BUT IS INTENDED TO CONSTITUTE LIQUIDATED  DAMAGES TO LANDLORD PURSUANT TO CALIFORNIA CIVIL CODE SECTION 1671.     22.   ROOFTOP RIGHTS.  Tenant may, in accordance with, and subject to (A) reasonable construction rules  and regulations promulgated by Landlord and provided to Tenant, (B) the Building standards therefor, and (C) the  terms and conditions set forth in this Lease (including, without limitation, Article 8 and this Article 22), Tenant may                                           and expense, without the payment of Rent (other than costs  allowed to be included in Direct Expenses pursuant to Article 4 of this Lease), one (1) or more antenna or other  telecommunications equipment on the roofs of the Building for the receiving and transmitting of signals or broadcasts  servicing the business conducted by Tenant from within the Premises or otherwise serving the Premises (the "Rooftop  Equipment").  Tenant shall be solely responsible for any and all costs incurred or arising in connection with the  Rooftop Equipment, including but not limited to costs of electricity and insurance related to the Rooftop Equipment.   Landlord makes no representations or warranties whatsoever with respect to the fitness or suitability of the roof of the  Building for the installation, maintenance and operation of the Rooftop Equipment, including, without limitation, with  respect  to the quality and clarity  of any receptions  and  transmissions to or from  the Rooftop Equipment  and the  presence of any interference with such signals whether emanating from the Building or otherwise.  The physical  appearance, size and location of the Rooftop Equipment shall  not be unreasonably withheld, conditioned, or delayed, and Landlord may require Tenant to install screening around                                               t Tenant elects to exercise its right to install the Rooftop  Equipment, then Tenant shall give Landlord no less than ten (10) days' prior notice thereof.  Tenant shall reimburse  to Landlord the actual costs reasonably incurred by Landlord in approving such Rooftop Equipment, including any  third-party consultant fees.  Tenant's rights under this Article 22 shall terminate and shall be of no further force or  effect upon the expiration or earlier termination of this Lease.  Prior to the expiration or earlier termination of this  Lease, Tenant shall remove and restore the affected portion of the rooftop, the Building and the Premises to good  condition and repair, free of leaks (reasonable wear and tear and damage from casualty that is Landlord's obligation  to  repair  pursuant  to  Article 11  excepted).   Such  Rooftop  Equipment  shall  be  installed  pursuant  to  plans  and  specifications  approved  by  Landlord  (specifically  including,  without  limitation,  all  mounting  and  waterproofing   822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -41-                        [Zentalis Pharmaceuticals, Inc.]

 

details), which approval shall not be unreasonably withheld, conditioned or delayed.  Notwithstanding any such review  or  approval  by  Landlord,  Tenant  shall  remain  solely  liab installation, use, maintenance and/or repair of such Rooftop Equipment, including, without limitation, any damage to  any  portion  of  the  roof  or  roof  membrane  and  any  penetrations  to  the  roof.   Except  to  the  extent  caused  by  the  negligence or willful misconduct of Landlord or any Landlord Party, Landlord and Tenant hereby acknowledge and  agree that Landlord shall have no liability in connection with Tenant's use, maintenance and/or repair of such Rooftop  Equipment.  The Rooftop Equipment shall, in all instances, comply with all applicable laws.  Tenant shall not be  entitled to license its Rooftop Equipment to any third party other than a Permitted Transferee, nor shall Tenant be  permitted to receive any revenues, fees or any other consideration for the use of the Rooftop Area and/or such Rooftop  Equipment by any third party, in excess of the sublease rents otherwise payable in accordance with any subletting of                                            all such Rooftop Equipment shall be exclusive (other than  equipment placed on the roof by Landlord which serves the Premises), and Tenant hereby expressly acknowledges                                                                  23.   SIGNS          23.1  Exterior Signage.  Subject to Landlord's prior written approval, which shall not be unreasonably  withheld,  conditioned  or  delayed,  and  provided  all  signs  are  in keeping with  the quality,  design  and style  of  the  Building and Project, Tenant, at its sole cost and expense, may install (i) one (1) exclusive Building top identification  sign on each of the 10275 Building and the 10285 Building, (ii) identification signage on the Project's monument sign  shared by the tenants of the 10265 Building and the 10275 Building, and (iii) identification signage on the Project's  monument  sign  for  the  10285  Building  (collectively,  "Tenant  Signage");  provided,  however,  in  no  event  shall  Tenant's Signage include an "Objectionable Name," as that term is defined in Section 23.3, of this Lease.  All such  signage  shall  be  subject  to  Tenant's  obtaining  all  required  governmental  approvals.   All  permitted  signs  shall  be  maintained by Tenant at its expense in a first-class and safe condition and appearance.  Upon the expiration or earlier  termination  of  this  Lease,  Tenant  shall  remove  all  of  its  signs  at  Tenant's  sole  cost  and  expense.   The  graphics,  materials, color, design, lettering, lighting, size, illumination, specifications and exact location of Tenant's Signage  (collectively, the "Sign Specifications") shall be subject to the prior written approval of Landlord, which approval  shall not be unreasonably withheld, conditioned or delayed, and shall be consistent and compatible with the quality  and nature of the Project.  Tenant hereby acknowledges that, notwithstanding Landlord's approval of Tenant's Signage,  Landlord has made no representation or warranty to Tenant with respect to the probability of obtaining all necessary  governmental  approvals  and  permits  for  Tenant's  Signage.   In  the  event  Tenant  does  not  receive  the  necessary  governmental approvals and permits for Tenant's Signage, Tenant's and Landlord's rights and obligations under the  remaining TCCs of this Lease shall be unaffected.            23.2  Objectionable Name.  Tenant's Signage shall not include a name or logo which relates to an entity  which is of a character or reputation, or is associated with a political faction or orientation, which is inconsistent with  the quality of the Project, or which would otherwise reasonably offend a landlord of the Comparable Buildings (an  "Objectionable Name").  The parties hereby agree that the following name, or any reasonable derivation thereof,  shall be deemed not to constitute an Objectionable Name:  "Zentalis Pharmaceuticals, Inc."           23.3  Prohibited Signage and Other Items.  Any signs, notices, logos, pictures, names or advertisements  which  are  installed  and  that  have  not  been  separately  approved  by  Landlord  may  be  removed  without  notice  by  Landlord at the sole expense of Tenant.  Any signs, window coverings, or blinds (even if the same are located behind  the Landlord-approved window coverings for the Building), or other items visible from the exterior of the Premises  or Building, shall be subject to the prior approval of Landlord, in its sole discretion.          23.4  Termination  of  Right  to  Tenant's  Signage.   The  rights  contained  in  this  Article 23  shall  be  personal to Original Tenant and its Permitted Transferee Assignee, and may only be exercised and maintained by such  parties (and not any other assignee, sublessee or other transferee of the Original Tenant's interest in this Lease) to the  extent (x) they are not in default under this Lease (beyond any applicable notice and cure period) and (y) if they occupy  the entire Premises.    24.   COMPLIANCE WITH LAW        Tenant shall not do anything or suffer anything to be done in or about  the Premises or the Project which will in any way conflict with any law, statute, ordinance or other rule, directive,                                                                                Applicable   822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -42-                        [Zentalis Pharmaceuticals, Inc.]

 

Laws promptly  comply  with  all  such  governmental  measures.   Should  any  standard  or  regulation  now  or  hereafter  be  imposed  on  Landlord  or  Tenant  by  a  state,  federal  or  local  governmental  body  charged  with  the  establishment,  regulation and enforcement of occupational, health or safety standards for employers, employees, landlords or tenants,  then Tenant agrees, at its sole cost and expense, to comply promptly with such standards or regulations.  Tenant shall  be responsible, at its sole cost and expense, to make all alterations to the Building and Premises as are required to  comply with the governmental rules, regulations, requirements or standards described in this Article 24.  The judgment  of any court of competent jurisdiction or the admission of Tenant in any judicial action, regardless of whether Landlord  is a party thereto, that Tenant has violated any of said governmental measures, shall be conclusive of that fact as  between Landlord and Tenant.  For purposes of Section 1938 of the California Civil Code, Landlord hereby discloses  to Tenant, and Tenant hereby acknowledges, that the Project, Building and Premises have not undergone inspection  by a Certified Access Specialist (CASp).  As required by Section 1938(e) of the California Civil Code, Landlord  hereby states as follows:  "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  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 the foregoing, Landlord and Tenant hereby agree as  follows:  (a) any CASp inspection requested by Tenant shall be conducted, at Tenant's sole cost and expense, by a  CASp approved in advance by Landlord; and (b) pursuant to Article 24 below, Tenant, at its cost, is responsible for  making any repairs within the Premises to correct violations of construction-related accessibility standards; and, if  anything done by or for Tenant in its use or occupancy of the Premises shall require repairs to the Building (outside  the Premises) to correct violations of construction-related accessibility standards, then Tenant shall, at Landlord's  option,  either  perform  such  repairs  at  Tenant's  sole  cost  and  expense  or  reimburse  Landlord  upon  demand,  as  Additional Rent, for the cost to Landlord of performing such repairs.     25.   LATE CHARGES         If any installment of Rent or any other sum due from Tenant shall not be received  by Landlord or Landlord's designee within five (5) business days after Tenant's receipt of written notice from Landlord  that said amount is due (the "Late Payment Notice"), then Tenant shall pay to Landlord a late charge equal to five  percent (5%) of the overdue amount plus any reasonable attorneys' fees incurred by Landlord by reason of Tenant's  failure to pay Rent and/or other charges when due hereunder; provided that such late charge shall not be incurred with  respect to the first delinquent payment in any twelve (12) month period if such payment is made within ten (10)  business days after Tenant's receipt of a Late Payment Notice.  The late charge shall be deemed Additional Rent and  the right to require it shall be in addition to all of Landlord's other rights and remedies hereunder or at law and shall  not be construed as liquidated damages or as limiting Landlord's remedies in any manner.  In addition to the late  charge described above, any Rent or other amounts owing hereunder which are not paid within ten (10) days after the  date they are due shall bear interest from the date when due until paid at a rate per annum equal to the lesser of (i) the  annual "Bank Prime Loan" rate cited in the Federal Reserve Statistical Release Publication G.13(415), published on  the first Tuesday of each calendar month (or such other comparable index as Landlord and Tenant shall reasonably  agree upon if such rate ceases to be published) plus four (4) percentage points, and (ii) the highest rate permitted by  Applicable Law.   26.   LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT          26.1  Landlord's Cure.  All covenants and agreements to be kept or performed by Tenant under this  Lease shall be performed by Tenant at Tenant's sole cost and expense and without any reduction of Rent, except to  the extent, if any, otherwise expressly provided herein.  If Tenant shall fail to perform any obligation under this Lease,  and such failure shall continue in excess of the time allowed under Section 19.1.2, above, unless a specific time period  is otherwise stated in this Lease, Landlord may, but shall not be obligated to, make any such payment or perform any  such act on Tenant's part without waiving its rights based upon any default of Tenant and without releasing Tenant  from any obligations hereunder.          26.2  Tenant's Reimbursement.  Except as may be specifically provided to the contrary in this Lease,  Tenant  shall  pay  to  Landlord,  upon  delivery  by  Landlord  to  Tenant  of  statements  therefor:   (i)  sums  equal  to   822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -43-                        [Zentalis Pharmaceuticals, Inc.]

 

expenditures reasonably made and obligations incurred by Landlord in connection with the remedying by Landlord  of Tenant's defaults pursuant to the provisions of Section 26.1; (ii) sums equal to all losses, costs, liabilities, damages  and expenses referred to in Article 10 of this Lease; and (iii) sums equal to all expenditures made and obligations  incurred by Landlord in collecting or attempting to collect the Rent or in enforcing or attempting to enforce any rights  of Landlord under this Lease or pursuant to law, including, without limitation, all reasonable legal fees and other  amounts so expended.  Tenant's obligations under this Section 26.2 shall survive the expiration or sooner termination  of the Lease Term.   27.   ENTRY BY LANDLORD          Landlord reserves the right on at l Tenant and during normal business hours (except in the case of an emergency) to enter the Premises to (i) inspect  them; (ii) show the Premises to prospective purchasers, or to current or prospective mortgagees, ground or underlying  lessors or insurers or, during the last twelve (12) months of the Lease Term, to prospective tenants; (iii) post notices  of nonresponsibility (to the extent applicable pursuant to then Applicable Law); or (iv) alter, improve or repair the  Premises  or  the  Building,  or  for  structural  alterations,  repairs  or  improvements  to  the  Building  or  the  Building's  systems and equipment. Landlord may make any such entries without the abatement of Rent, except as otherwise  provided in this Lease, and may take such reasonable steps as required to accomplish the stated purposes.  In an  emergency, Landlord shall have the right to use any means that Landlord may deem proper to open the doors in and  to the Premises.  Any entry into the Premises by Landlord in the manner hereinbefore described shall not be deemed  to be a forcible or unlawful entry into, or a detainer of, the Premises, or an actual or constructive eviction of Tenant  from any portion of the Premises.  During any such access to the Premises, Landlord shall use commercially reasonable                                               28.   TENANT PARKING       Throughout the Lease Term and any extensions thereof, Landlord shall provide,  and Tenant shall have the right to use, without any additional charge (except to the extent of costs included in Direct  Expenses), the amount of parking set forth in Section 9 of the Summary, in each Building's subterranean parking  garage and the Project's surface parking lot.  Tenant shall abide by all reasonable rules and regulations which are  prescribed from time to time for the orderly operation and use of the parking facility where the parking passes are  located (including any sticker or other identification system established by Landlord and the prohibition of vehicle  repair and maintenance activities in the parking facilities), and shall cooperate in seeing that Tenant's employees and  visitors also comply with such rules and regulations.  Tenant's use of the Project parking facility shall be at Tenant's  sole risk and Tenant acknowledges and agrees that Landlord shall have no liability whatsoever for damage to the  vehicles of Tenant, its employees and/or visitors, or for other personal injury or property damage or theft relating to  or connected with the parking rights granted herein or any of Tenant's, its employees' and/or visitors' use of the parking  facilities.     29.   MISCELLANEOUS PROVISIONS          29.1  Terms; Captions.  The words "Landlord" and "Tenant" as used herein shall include the plural as  well as the singular.  The necessary grammatical  changes required to make the provisions hereof apply either to  corporations or partnerships or individuals, men or women, as the case may require, shall in all cases be assumed as  though in each case fully expressed.  The captions of Articles and Sections are for convenience only and shall not be  deemed to limit, construe, affect or alter the meaning of such Articles and Sections.          29.2  Binding Effect.  Subject to all other provisions of this Lease, each of the covenants, conditions and  provisions of this Lease shall extend to and shall, as the case may require, bind or inure to the benefit not only of  Landlord and of Tenant, but also of their respective heirs, personal representatives, successors or assigns, provided  this clause shall not permit any assignment by Tenant contrary to the provisions of Article 14 of this Lease.          29.3  No Air Rights.  No rights to any view or to light or air over any property, whether belonging to  Landlord or any other person, are granted to Tenant by this Lease.  If at any time any windows of the Premises are  temporarily darkened or the light or view therefrom is obstructed by reason of any repairs, improvements, maintenance  or cleaning in or about the  Project, the same shall be without liability to Landlord and without any reduction or  diminution of Tenant's obligations under this Lease.          29.4  Modification  of  Lease.   Should  any  current  or  prospective  mortgagee  or  ground  lessor  for  the  Building or Project require a modification of this Lease, which modification will not cause an increased cost or expense   822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -44-                        [Zentalis Pharmaceuticals, Inc.]

 

to Tenant or in any other way materially and adversely change the rights and obligations of Tenant hereunder or  modify the Premises, then and in such event, Tenant agrees that this Lease may be so modified and agrees to execute  such documents as are reasonably required therefor and to deliver the same to Landlord within ten (10) business days  following a request therefor.  At the request of Landlord or any mortgagee or ground lessor, Tenant agrees to execute  a short form of Lease and deliver the same to Landlord within ten (10) business days following the request therefor.          29.5  Transfer of Landlord's Interest.  Tenant acknowledges that Landlord has the right to transfer all  or any portion of its interest in the Project or Building and in this Lease, and Tenant agrees that in the event of any  such transfer, Landlord shall automatically be released from all liability under this Lease and Tenant agrees to look  solely to such transferee for the performance of Landlord's obligations hereunder after the date of transfer and such  transferee shall be deemed to have fully assumed and be liable for all obligations of this Lease to be performed by  Landlord, including the return of any Security Deposit, and Tenant shall attorn to such transferee.          29.6  Prohibition Against Recording.  Except as provided in Section 29.4 of this Lease, neither this  Lease, nor any memorandum, affidavit or other writing with respect thereto, shall be recorded by Tenant or by anyone  acting through, under or on behalf of Tenant.          29.7  Landlord's Title.  Landlord's title is and always shall be paramount to the title of Tenant.  Nothing  herein contained shall empower Tenant to do any act which can, shall or may encumber the title of Landlord.          29.8  Relationship of Parties.  Nothing contained in this Lease shall be deemed or construed by the  parties hereto or by any third party to create the relationship of principal and agent, partnership, joint venturer or any  association between Landlord and Tenant.          29.9  Application of Payments.  Landlord shall have the right to apply payments received from Tenant  pursuant  to  this  Lease, regardless of Tenant's  designation  of  such  payments,  to  satisfy  any  obligations  of Tenant  hereunder, in such order and amounts as Landlord, in its sole discretion, may elect.          29.10 Time of Essence.  Time is of the essence with respect to the performance of every provision of this  Lease in which time of performance is a factor.          29.11 Partial Invalidity.  If any term, provision or condition contained in this Lease shall, to any extent,  be invalid or unenforceable, the remainder of this Lease, or the application of such term, provision or condition to  persons or circumstances other than those with respect to which it is invalid or unenforceable, shall not be affected  thereby, and each and every other term, provision and condition of this Lease shall be valid and enforceable to the  fullest extent possible permitted by law.          29.12 No Warranty.  In executing and delivering this Lease, Tenant has not relied on any representations,  including, but not limited to, any representation as to the amount of any item comprising Additional Rent or the amount  of the Additional Rent in the aggregate or that Landlord is furnishing the same services to other tenants, at all, on the  same level or on the same basis, or any warranty or any statement of Landlord which is not set forth herein or in one  or more of the exhibits attached hereto.          29.13 Landlord Exculpation.  The liability of Landlord or the Landlord Parties to Tenant for any default  by Landlord under this Lease or arising in connection herewith or with Landlord's operation, management, leasing,  repair, renovation, alteration or any other matter relating to the Project or the Premises shall be limited solely and  exclusively to an amount which is equal to the interest of Landlord in the Building, provided that in no event shall  such liability extend to any sales or insurance proceeds received by Landlord or the Landlord Parties in connection  with the Project, Building or Premises.  Neither Landlord, nor any of the Landlord Parties shall have any personal  liability therefor, and Tenant hereby expressly waives and releases such personal liability on behalf of itself and all  persons claiming by, through or under Tenant.  The limitations of liability contained in this Section 29.13 shall inure  to the benefit of Landlord's and the Landlord Parties' present and future partners, beneficiaries, officers, directors,  trustees, shareholders, agents and employees, and their respective partners, heirs, successors and assigns.  Under no  circumstances shall any present or future partner of Landlord (if Landlord is a partnership), or trustee or beneficiary  (if Landlord or any partner of Landlord is a trust), have any liability for the performance of Landlord's obligations   822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -45-                        [Zentalis Pharmaceuticals, Inc.]

 

under this Lease.  Notwithstanding any contrary provision herein, neither Landlord nor the Landlord Parties shall be  liable under any circumstances for injury or damage to, or interference with, Tenant's business, including but not  limited to, loss of profits, loss of rents or other revenues, loss of business opportunity, loss of goodwill or loss of use,  in each case, however occurring, or loss to inventory, scientific research, scientific experiments, laboratory animals,  products, specimens, samples, and/or scientific, business, accounting and other records of every kind and description  kept at the premises and any and all income derived or derivable therefrom.          29.14 Entire Agreement.  It is understood and acknowledged that there are no oral agreements between  the parties hereto affecting this Lease and this Lease constitutes the parties' entire agreement with respect to the leasing  of the Premises and supersedes and cancels any and all previous negotiations, arrangements, brochures, agreements  and understandings, if any, between the parties hereto or displayed by Landlord to Tenant with respect to the subject  matter thereof, and none thereof shall be used to interpret or construe this Lease.  None of the terms, covenants,  conditions or provisions of this Lease can be modified, deleted or added to except in writing signed by the parties  hereto.          29.15 Right to Lease.  Landlord reserves the absolute right to effect such other tenancies in the Project as  Landlord in the exercise of its sole business judgment shall determine to best promote the interests of the Building or  Project.  Tenant does not rely on the fact, nor does Landlord represent, that any specific tenant or type or number of  tenants shall, during the Lease Term, occupy any space in the Building or Project.          29.16 Force Majeure.  Notwithstanding anything to the contrary contained in this Lease, any prevention,  delay or stoppage due to strikes, lockouts, labor disputes, acts of God, acts of war, terrorist acts, inability to obtain  services,  labor, or  materials or reasonable substitutes therefor, governmental  actions, civil  commotions, Casualty,   actual or threatened public health emergency (including, without limitation, epidemic, pandemic, famine, disease,  plague, quarantine, and other significant public health risk), governmental edicts, actions, declarations or quarantines  by a governmental entity or health organization (including, without limitation, any shelter-in-place orders, stay at  home orders or any restrictions on travel related thereto that preclude Tenant, its agents, contractors or its employees  from accessing the Premises, national or regional emergency), breaches in cybersecurity, and other causes beyond the  reasonable control of the party obligated to perform, regardless of whether such other causes are (i) foreseeable or  unforeseeable or (ii) related to the specifically enumerated events in this paragraph (collectively, a "Force Majeure"),  shall excuse the performance of such party for a period equal to any such prevention, delay or stoppage.  If this Lease  specifies a time period for performance of an obligation of either party, that time period shall be extended by the  period of any delay in such party's performance caused by a Force Majeure.    Notwithstanding anything to the contrary  in this Lease, no event of Force Majeure shall (i) excuse Tenant's obligations to pay Rent and other charges due  pursuant to this Lease, (ii) be grounds for Tenant to abate any portion of Rent due pursuant to this Lease, or entitle  either party to terminate this Lease, except as allowed pursuant to Articles 11 and 13 of this Lease, or (iii) excuse  Tenant's obligations under Articles 5 and 24 of this Lease.          29.17 Waiver of Redemption by Tenant.  Tenant hereby waives, for Tenant and for all those claiming  under Tenant, any and all rights now or hereafter existing to redeem by order or judgment of any court or by any legal  process or writ, Tenant's right of occupancy of the Premises after any termination of this Lease.          29.18 Notices.   All  notices,  demands,  statements,  designations,  approvals   or  other  communications  (collectively, "Notices") given or required to be given by either party to the other hereunder or by law shall be in  writing,  shall  be  (A)  sent  by  United  States  certified  or  registered  mail,  postage  prepaid,  return  receipt  requested  ("Mail"), (B) transmitted by telecopy, if such telecopy is promptly followed by a Notice sent by Mail, (C) delivered  by a nationally recognized overnight courier, or (D) delivered personally.  Any Notice shall be sent, transmitted, or  delivered, as the case may be, to Tenant at the appropriate address set forth in Section 10 of the Summary, or to such  other place as Tenant may from time to time designate in a Notice to Landlord, or to Landlord at the addresses set  forth below, or to such other places as Landlord may from time to time designate in a Notice to Tenant.  Any Notice  will be deemed given (i) three (3) days after the date it is posted if sent by Mail, (ii) the date the telecopy is transmitted,  (iii) the date the overnight courier delivery is made, or (iv) the date personal delivery is made.  As of the date of this  Lease, any Notices to Landlord must be sent, transmitted, or delivered, as the case may be, to the following addresses:    822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -46-                        [Zentalis Pharmaceuticals, Inc.]

 

                           TPSC IX, LLC                             c/o Healthpeak Properties, Inc.                             1920 Main Street, Suite 1200                             Irvine, CA  92614                             Attn:  Legal Department                             and                              Allen Matkins Leck Gamble Mallory & Natsis LLP                             1901 Avenue of the Stars, Suite 1800                             Los Angeles, California 90067                             Attention:  Anton N. Natsis, Esq.         29.19 Joint and Several.  If there is more than one tenant, the obligations imposed upon Tenant under  this Lease shall be joint and several.           29.20 Authority.  If Tenant is a corporation, trust or partnership, each individual executing this Lease on  behalf of  Tenant hereby  represents  and warrants  that  Tenant  is  a duly  formed and  existing entity qualified to do  business in the State of California and that Tenant has full right and authority to execute and deliver this Lease and  that each person signing on behalf of Tenant is authorized to do so.           29.21 Attorneys' Fees.  In the event that either Landlord or Tenant should bring suit for the possession of  the Premises, for the recovery of any sum due under this Lease, or because of the breach of any provision of this Lease  or for any other relief against the other, then all costs and expenses, including reasonable attorneys' fees, incurred by  the prevailing party therein shall be paid by the other party, which obligation on the part of the other party shall be  deemed to have accrued on the date of the commencement of such action and shall be enforceable whether or not the  action is prosecuted to judgment.         29.22 Governing Law; WAIVER OF TRIAL BY JURY.  This Lease shall be construed and enforced  in  accordance  with  the  laws  of  the  State  of  California.   IN  ANY  ACTION  OR  PROCEEDING  ARISING  HEREFROM,  LANDLORD  AND  TENANT  HEREBY  CONSENT  TO  (I)  THE  JURISDICTION  OF  ANY  COMPETENT COURT WITHIN THE STATE OF CALIFORNIA, (II) SERVICE OF PROCESS BY ANY MEANS  AUTHORIZED BY CALIFORNIA LAW, AND (III) IN THE INTEREST OF SAVING TIME AND EXPENSE,  TRIAL WITHOUT A JURY IN ANY ACTION TO THE FULLEST EXTENT PERMITTED BY APPLICABLE  LAW, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST  THE  OTHER  OR  THEIR  SUCCESSORS  IN  RESPECT  OF  ANY  MATTER  ARISING  OUT  OF  OR  IN  CONNECTION WITH THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, TENANT'S USE  OR  OCCUPANCY  OF  THE  PREMISES,  AND/OR  ANY  CLAIM  FOR  INJURY  OR  DAMAGE,  OR  ANY  EMERGENCY OR STATUTORY REMEDY.  IN THE EVENT LANDLORD COMMENCES ANY SUMMARY  PROCEEDINGS  OR  ACTION  FOR  NONPAYMENT  OF  BASE  RENT  OR  ADDITIONAL  RENT,  TENANT  SHALL NOT INTERPOSE ANY COUNTERCLAIM OF ANY NATURE OR DESCRIPTION (UNLESS SUCH  COUNTERCLAIM SHALL BE MANDATORY) IN ANY SUCH PROCEEDING OR ACTION, BUT SHALL BE  RELEGATED TO AN INDEPENDENT ACTION AT LAW.         29.23 Submission of Lease.  Submission of this instrument for examination or signature by Tenant does  not constitute a reservation of, option for or option to lease, and it is not effective as a lease or otherwise until execution  and delivery by both Landlord and Tenant.         29.24 Brokers.  Landlord and Tenant hereby warrant to each other that they have had no dealings with  any real estate broker or agent in connection with the negotiation of this Lease, excepting only the real estate brokers  or agents specified in Section 12 of the Summary (the "Brokers"), and that they know of no other real estate broker  or agent who is entitled to a commission in connection with this Lease.  Each party agrees to indemnify and defend  the other party against and hold the other party harmless from any and all claims, demands, losses, liabilities, lawsuits,  judgments, costs and expenses (including without limitation reasonable attorneys' fees) with respect to any leasing  commission or equivalent compensation alleged to be owing on account of any dealings with any real estate broker or  agent, other than the Brokers, occurring by, through, or under the indemnifying party.  The terms of this Section 29.24  shall survive the expiration or earlier termination of the Lease Term.  Landlord will pay any commission owed to the  Brokers on account of this Lease pursuant to a separate agreement with the Brokers.    822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -47-                        [Zentalis Pharmaceuticals, Inc.]

 

       29.25 Independent Covenants.  This Lease shall be construed as though the covenants herein between  Landlord and Tenant are independent and not dependent and Tenant hereby expressly waives the benefit of any statute  to the contrary and agrees that if Landlord fails to perform its obligations set forth herein, Tenant shall not be entitled  to make any repairs or perform any acts hereunder at Landlord's expense or to any setoff of the Rent or other amounts  owing hereunder against Landlord.         29.26 Project or Building Name, Address and Signage.  Landlord shall have the right at any time to  change the name and/or address of the Project or Building and to install, affix and maintain any and all signs on the  exterior and on the interior of the Project or Building as Landlord may, in Landlord's sole discretion, desire.  Tenant  shall not use the name of the Project or Building or use pictures or illustrations of the Project or Building in advertising  or  other publicity or for any purpose other than  as the address of  the  business  to be conducted by Tenant  in  the  Premises, without the prior written consent of Landlord.         29.27 Counterparts.  This Lease may be executed in counterparts with the same effect as if both parties  hereto had executed the same document.  Both counterparts shall be construed together and shall constitute a single  lease.         29.28 Confidentiality.  Tenant acknowledges that the content of this Lease and any related documents are  confidential information.  Tenant shall keep such confidential information strictly confidential and shall not disclose  such  confidential  information  to  any  person  or  entity  other  than  Tenant's  financial,  legal,  and  space  planning  consultants.         29.29 Development of the Project.                 29.29.1 Subdivision.  Landlord reserves the right to subdivide all or a portion of the buildings and  Common Areas.   Tenant  agrees  to execute  and deliver,  upon demand by  Landlord and in  the form  requested  by  Landlord, any additional documents needed to conform this Lease to the circumstances resulting from a subdivision  and any all maps in connection therewith.  Notwithstanding anything to the contrary set forth in this Lease, the separate  ownership of any buildings and/or Common Areas by an entity other than Landlord shall not affect the calculation of  Direct Expenses or Tenant's payment of Tenant's Share of Direct Expenses.               29.29.2 Construction  of  Property  and  Other  Improvements.   Tenant  acknowledges  that  portions  of  the  Project  may  be  under  construction  following  Tenant's  occupancy  of  the  Premises,  and  that  such  construction may result in levels of noise, dust, obstruction of access, etc. which are in excess of that present in a fully  constructed project.  Tenant hereby waives any and all rent offsets or claims of constructive eviction which may arise  in connection with such construction; ; provided, however, in undertaking any such construction, Landlord shall use  commercially reasonable efforts to minimize interference with access to the Premises, or any other rights Tenant has under this Lease.         29.30 No Violation.  Tenant hereby warrants and represents that neither its execution of nor performance  under this Lease shall cause Tenant to be in violation of any agreement, instrument, contract, law, rule or regulation  by which Tenant is bound, and Tenant shall protect, defend, indemnify and hold Landlord harmless against any claims,  demands, losses, damages, liabilities, costs and expenses, including, without limitation, reasonable attorneys' fees and  costs, arising from Tenant's breach of this warranty and representation.         29.31 Transportation  Management.   Tenant  shall  fully  comply  with  all  present  or  future  programs  reasonably implemented by Landlord to manage parking, transportation or traffic in and around the Project and/or the  Building,  and  in  connection  therewith,  Tenant  shall  take  responsible  action  for  the  transportation  planning  and  management  of  all  employees  located  at  the  Premises  by  working  directly  with  Landlord,  any  governmental  transportation management organization or any other transportation-related committees or entities.  Such programs  may include, without limitation: (i) restrictions on the number of peak-hour vehicle trips generated by Tenant; (ii)  increased vehicle occupancy; (iii) implementation of an in-house ridesharing program and an employee transportation  coordinator; (iv) working with employees and any Project, Building or area-wide ridesharing program manager; (v)  instituting employer-sponsored incentives (financial or in-kind) to encourage employees to rideshare; and (vi) utilizing  flexible work shifts for employees.         29.32 Signatures.  The parties hereto consent and agree that this Lease may be signed and/or transmitted  by  facsimile,  e-mail  of  a  .pdf  document  or  using  electronic  signature  technology  (e.g.,  via  DocuSign  or  similar  electronic signature technology), and that such signed electronic record shall be valid and as effective to bind the party                                               signature. The parties further consent and agree that (1)   822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -48-                        [Zentalis Pharmaceuticals, Inc.]

 

this Lease electronically, and (2) the electronic signatures appearing on this Lease shall be treated, for purposes of  validity, enforceability and admissibility, the same as handwritten signatures.         29.33 Waiver of Claims.  As a material inducement to Landlord to enter into this Lease, Tenant hereby  releases Landlord from, and hereby waives, any and all losses, costs, damages, expenses, liabilities, claims and causes  of action (collectively, the "Released Claims") arising from or related to Tenant's inability or limitation to conduct  operations from the Premises as a result of any "shelter in place" orders or similar governmental directives, including,  without limitation, any claims for, and/or rights of, termination of this Lease and/or abatement, offset and/or deferral  of Rent under this Lease, at law and/or in equity related to the inability of Tenant to conduct operations from the  Premises as a result of any "shelter in place" orders or similar governmental directives related thereto.  With respect  to the Released Claims, Tenant acknowledges that Tenant has either been advised by legal counsel or has made itself  familiar  with  the  provisions  of  California  Civil  Code  section  1542,  which  provides  as  follows:  A  GENERAL  RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES  NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE  RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS  OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.  Tenant, being aware of the foregoing  code section, hereby expressly waives any rights Tenant may have thereunder, as well as under any other statutes or  common-law principles of similar effect, pertaining to the Released Claims.         29.34 Communications and Computer Line.  Tenant may install, maintain, replace, remove or use any  communications or computer wires and cables serving the Premises (collectively, the "Lines"), provided that Tenant  shall obtain Landlord's reasonable prior written consent, use an experienced and qualified contractor approved in  writing by Landlord, and comply with all of the other provisions of Articles 7 and 8 of this Lease.  Tenant shall pay  all costs in connection therewith.  Landlord reserves the right, upon notice to Tenant prior to the expiration or earlier  termination of this Lease, to require that Tenant, at Tenant's sole cost and expense, remove any Lines installed by  Tenant located in or serving the Premises prior to the expiration or earlier termination of this Lease.         IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be executed the day and date first  above written.    LANDLORD:                                              TENANT:    TPSC IX, LLC,                                          ZENTALIS PHARMACEUTICALS, INC.,   a Delaware limited liability company                   a Delaware corporation    By:    HCP Estates USA Inc.,          a Delaware corporation, Its Managing Member     By:   /s/ Kevin Bunker                                                                            Kevin Bunker        By: /s/ Mike  Dorris                           Mike Dorris                                             Print Name         Name:                                                                                    Its:                                      Title:                                                                                    By:                                                                                                                                                                                                  Print Name                                                           Its:                                                                                                                                           822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -49-                        [Zentalis Pharmaceuticals, Inc.]

 

                                                                      EXHIBIT A                                                                  THE BOARDWALK                                                              OUTLINE OF PREMISES    822610.04/WLA                                                         EXHIBIT A                                                        [THE BOARDWALK] 183362-00050/9-24-20/mem/mem                                                 -1-                                               [Zentalis Pharmaceuticals, Inc.]

 

822610.04/WLA                                                         EXHIBIT A                                                        [THE BOARDWALK] 183362-00050/9-24-20/mem/mem                                                 -2-                                               [Zentalis Pharmaceuticals, Inc.]

 

822610.04/WLA                                                         EXHIBIT A                                                        [THE BOARDWALK] 183362-00050/9-24-20/mem/mem                                                 -3-                                               [Zentalis Pharmaceuticals, Inc.]

 

822610.04/WLA                                                         EXHIBIT A                                                        [THE BOARDWALK] 183362-00050/9-24-20/mem/mem                                                 -4-                                               [Zentalis Pharmaceuticals, Inc.]

 

822610.04/WLA                                                         EXHIBIT A                                                        [THE BOARDWALK] 183362-00050/9-24-20/mem/mem                                                 -5-                                               [Zentalis Pharmaceuticals, Inc.]

 

                                                                                                                                                                822610.04/WLA                                                         EXHIBIT A                                                        [THE BOARDWALK] 183362-00050/9-24-20/mem/mem                                                 -6-                                               [Zentalis Pharmaceuticals, Inc.]

 

                                                                    EXHIBIT A-1                                                                  THE BOARDWALK                                                                 PROJECT SITE PLAN                                                                                                                                                                     822610.04/WLA                                                        EXHIBIT A-1                                                       [THE BOARDWALK] 183362-00050/9-24-20/mem/mem                                                 -1-                                               [Zentalis Pharmaceuticals, Inc.]

 

                                                                    EXHIBIT A-2                                                                 TEMPORARY SPACE                                                                                                                                                                                                                                                       822610.04/WLA                                                        EXHIBIT A-2                                                       [THE BOARDWALK] 183362-00050/9-24-20/mem/mem                                                 -1-                                               [Zentalis Pharmaceuticals, Inc.]

 

                                                                    EXHIBIT A-3                                                            TEMPORARY SPACE PLAN                                                                                                                                                                     822610.04/WLA                                                        EXHIBIT A-3                                                       [THE BOARDWALK] 183362-00050/9-24-20/mem/mem                                                 -1-                                               [Zentalis Pharmaceuticals, Inc.]

 

                                                                                                                                                                 822610.04/WLA                                                        EXHIBIT A-3                                                       [THE BOARDWALK] 183362-00050/9-24-20/mem/mem                                                 -2-                                               [Zentalis Pharmaceuticals, Inc.]

 

                                      EXHIBIT B                                      THE BOARDWALK                                   TENANT WORK LETTER          This Tenant Work Letter shall set forth the terms and conditions relating to the construction of the Premises.   This Tenant Work Letter is essentially organized chronologically and addresses the issues of the construction of the  Premises, in sequence, as such issues will arise during the actual construction of the Premises.  All references in this  Tenant Work Letter to Articles or Sections of "this Lease" shall mean the relevant portions of Articles 1 through 29  of the Office Lease to which this Tenant Work Letter is attached as Exhibit B, and all references in this Tenant Work  Letter to Sections of "this Tenant Work Letter" shall mean the relevant portions of Sections 1 through 5 of this Tenant  Work Letter.                                          SECTION 1           LANDLORD'S INITIAL CONSTRUCTION OF THE BASE BUILDING IMPROVEMENTS          1.1   Construction of Base Building Improvements.  Landlord shall construct, at its sole cost and expense,  in a good workmanlike manner and without deduction from the Tenant Improvement Allowance, the Base Building  improvements (the "Base Building Improvements"), generally as depicted in Schedule 1-A, attached hereto (the  "Base Building Plans"), including the items set forth in Schedule 1-B (the "Base Building Modifications"), subject  to Landlord Minor Changes, as that term is defined herein below.  In the event of a conflict between Schedule 1-A  and Schedule 1-B, Schedule 1-A shall prevail.  Landlord hereby reserves the right to modify the Base Building Plans,  provided  that  such  modifications  (A)  are  required  to  comply  with  Applicable  Laws  or  as  a  condition  of  any  governmental or other third-party approvals or consents that are required to be obtained in connection with the Base  Building Improvements, (B) will not (i) materially and adversely affect Tenant's Permitted Use of the Premises and  the Project or materially increase the cost of the Tenant Improvements or decrease the functionality of the Tenant  Improvements, or (ii) result in the use of materials, systems or components which are not of a materially equivalent  or better quality than the materials, systems and components set forth in the Base Building Plans, or in the Lease, or  (C) pertain to portions of the Project located outside of the Buildings (provided that Landlord may not reduce the  number of parking spaces available for Tenant's use) (collectively, "Landlord Minor Changes").  The Base Building  Improvements, as well as the Common Areas (including the so-called "path of travel") will be constructed in a good  and workmanlike manner, and in compliance with Applicable Laws for unoccupied space as of the date of Substantial  Completion of the Base Building Improvements to the extent required to allow Tenant, subject to the construction of  the Tenant Improvements, to obtain a certificate of occupancy or its legal equivalent allowing the legal occupancy of  the  Premises  for  the  Permitted  Use.  Within five  (5) days  after  the Substantial  Completion  of  the  Base  Building  Improvements, Landlord and Tenant shall have a "walk-through" of the delivered Premises to jointly create a punch- list setting forth any deviations between the required Base Building Improvements and the actual condition of the  Premises (the "Delivery Punch List").  Landlord shall repair or correct the items set forth on the Delivery Punch List  within a commercially reasonable period after the date of such walk through.                                           SECTION 2                                                                              TENANT IMPROVEMENTS          2.1   Tenant  Improvement  Allowance.   Tenant  shall  be  entitled  to  a  one-time  tenant  improvement  allowance (the "Tenant Improvement Allowance") in the amount set forth in Section 5 of the Summary (subject to  the  terms  of  Section  1.3  of  the  Lease)  for  the  costs  relating  to  the  initial  design  and  construction  of  Tenant's  improvements  which  are  permanently  affixed  to  the  Premises  (the  "Tenant  Improvements").   In  no  event  shall  Landlord be obligated to make disbursements pursuant to this Tenant Work Letter in a total amount which exceeds  the Tenant Improvement Allowance.  In the event that the Tenant Improvement Allowance is not fully utilized by  Tenant on or before the first (1st) anniversary of the Lease Commencement Date] (the "TIA Expiration Date"), then  such unused amounts shall revert to Landlord, and Tenant shall have no further rights with respect thereto.  Any    822610.04/WLA                          EXHIBIT B                          [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -1-                         [Zentalis Pharmaceuticals, Inc.]

 

Tenant Improvements that require the use of Building risers, raceways, shafts and/or conduits, shall be subject to  Landlord's reasonable rules, regulations, and restrictions, including the requirement that any cabling vendor must be  selected from a list provided by Landlord, and that the amount and location of any such cabling must be approved by  Landlord.  All Tenant Improvements for which the Tenant Improvement Allowance has been made available shall be  deemed Landlord's property under the terms of the Lease; provided, however, Landlord may, by written notice to  Tenant prior to the end of the Lease Term, or given following any earlier termination of this Lease, require Tenant, at  Tenant's expense, to remove any Tenant Improvements and to repair any damage to the Premises and Building caused  by such removal and return the affected portion of the Premises to their condition existing prior to the installment of  such Tenant Improvements.            2.2   Disbursement  of  the  Tenant  Improvement  Allowance.   Except  as  otherwise  set  forth  in  this  Tenant Work Letter, the Tenant Improvement Allowance shall be disbursed by Landlord (each of which disbursements  shall be made pursuant to Landlord's disbursement process) only for the following items and costs (collectively, the  "Tenant Improvement Allowance Items"):                  2.2.1  Payment of the fees of the "Architect" and the "Engineers," as those terms are defined in  Section 3.1 of this Tenant Work Letter, which fees shall, notwithstanding anything to the contrary contained in this  Tenant Work Letter, not exceed an aggregate amount equal to $3.00 per rentable square foot of the Premises, and  payment of Tenant's project manager not to exceed two percent (2%) of the so called "hard" costs of constructing the  Tenant Improvements, and payment of the fees incurred by, and the cost of documents and materials supplied by,  Landlord and Landlord's consultants in connection with the preparation and review of the "Construction Drawings,"  as that term is defined in Section 3.1 of this Tenant Work Letter;                2.2.2  The payment of plan check, permit and license fees relating to construction of the Tenant  Improvements;                2.2.3  The cost of construction of the Tenant Improvements, including, without limitation, testing  and  inspection  costs,  freight  elevator  usage,  hoisting  and  trash  removal  costs,  and  contractors'  fees  and  general  conditions;                2.2.4  The cost of any changes in the Base, Shell and Core when such changes are required by  the Construction Drawings (including if such changes are due to the fact that such work is prepared on an unoccupied  basis),  such  cost  to  include  all  direct  architectural  and/or  engineering  fees  and  expenses  incurred  in  connection  therewith;                2.2.5  The cost of any changes to the Construction Drawings or Tenant Improvements required  by all applicable building codes (the "Code");                2.2.6  The cost of connection of the Premises to the Building's energy management systems;                2.2.7  The cost of the "Landlord Supervision Fee," as that term is defined in Section 4.3.2 of this  Tenant Work Letter;                2.2.8  Sales and use taxes and Title 24 fees; and                2.2.9  The cost of cabling, signage, furniture, fixtures and equipment installed by Tenant at the  Premises, which costs shall, notwithstanding anything to the contrary contained in this Tenant Work Letter, not exceed  an aggregate amount equal to $15.00 per rentable square foot of the Premises.                 2.2.10  All  other costs  to be expended  by  Landlord in  connection  with the construction of  the  Tenant Improvements.    822610.04/WLA                          EXHIBIT B                          [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -2-                         [Zentalis Pharmaceuticals, Inc.]

 

                                      SECTION 3                                                                             CONSTRUCTION DRAWINGS          3.1   Selection  of  Architect/Construction  Drawings.   Landlord  shall  retain  an  architect  reasonably  approved  by  Tenant  (the  "Architect")  to  prepare  the  "Construction  Drawings,"  as  that  term  is  defined  in  this  Section 3.1.   Landlord  shall  retain  (or  cause  the  Architect  to  retain)  engineering  consultants  (the  "Engineers")  mutually and reasonable approved by Landlord and Tenant to prepare all plans and engineering working drawings.   The plans and drawings to be prepared by Architect and the Engineers hereunder shall be known collectively as the  "Construction Drawings."  All Construction Drawings shall comply with the drawing format and specifications as  determined by Landlord, and shall be subject to Landlord's and Tenant's approval.  Tenant shall be responsible for  ensuring that all elements of the design of the Construction Drawings are suita  of the Construction Drawings shall relieve Tenant from such responsibility.  Landlord shall cause the Architect and  the Engineers to use the "Required Level of Care" (defined below) to cause the Construction Drawings to comply with  Applicable Laws; provided, however, that Tenant, not Landlord, shall be responsible for any violation of Applicable                                                e of the Premises for other than general office purposes                                                                          Required Level of  Care                                        and  engineers  customarily  use  to  cause  drawings  and  specifications to comply with Applicable Laws where such drawings and specifications are prepared for spaces in  buildings comparable in quality to the Building.            3.2   Initial Programming Information.  Within five (5) business days following the full execution and  delivery of this Lease, Tenant shall furnish to Landlord all information necessary in the judgment of Landlord, the  Architect and the Engineers for the preparation of                   Space Plan layout and designation of all offices, rooms and other partitioning, their intended use, and equipment to be contained  therein,  the  number  and  sizes  of  workstations,  number  and  size  of  kitchen,  laboratory,  warehouse,  reception  and                          Initial Programming Information  disapproving the Initial Programming Information within five (5) business days   objections.   If  Landlord  disapproves  the  Initial  Programming  Information,  Tenant  shall  modify  the  Initial   necessary until Landlord has approved the Initial Programming Information.            3.3   Space  Plan.   After  approving  the  Initial  Programming  Information,  Landlord  shall  cause  the  Architect to prepare and deliver to Tenant a Space Plan that conforms to the Initial Programming Information.  Tenant  shall approve or disapprove the Space Pl thereof.  If Tenant disapproves the Space Plan (provided, however, that Tenant may only disapprove the Space Plan  to the extent it is inconsistent with  any revisions Tenant desires in the Space Plan.  After receiving such notice of disapproval, Landlord shall cause the  Architect to revise the Space Plan, taking into account the      oval, and resubmit the Space  Plan to Tenant for its approval.  Such procedure shall be repeated as necessary until Tenant has approved the Space  Plan.            3.4   Additional Programming Information.  Within ten (10) days after Tenant's approval of the Space  Plan, Tenant shall furnish to Landlord all information that, together with the Space Plan, is necessary in the judgment  of Landlord, the Architect and the Engineers to complete the architectural, engineering and final architectural working  drawings for the Premises in a form that is sufficient to enable subcontractors to bid on the work and to obtain all                                          Final Working Drawings telephone requirements, special HVAC requirements, plumbing requirements, and all interior and special finishes                Additional  Programming Information consistent with the Space Plan and shall otherwise be su            approval.  Landlord shall  provide Tenant with notice approving or reasonably disapproving the Additional Programming Information within    822610.04/WLA                          EXHIBIT B                          [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -3-                         [Zentalis Pharmaceuticals, Inc.]

 

and the changes that would be necessary to resolve Landlo Programming  Information,  Tenant  shall  modify  the  Additional  Programming  Information  and  resubmit  it  for                                             be repeated as necessary until Landlord has approved the  Additional Programming Information.            3.5   Approved  Working  Drawings.   After  approving  the  Additional  Programming  Information,  Landlord shall cause the Architect and the Engineers to prepare and deliver to Tenant the Final Working Drawings  that  conform  to  the  approved  Space  Plan  and  the  approved  Additional  Programming  Information.   Within  five  (5) business days after Tenant's receipt thereof, Tenant shall approve or disapprove the Final Working Drawings by   any revisions Tenant desires in the Final Working Drawings (provided, however, that Tenant may only disapprove  the  Final  Working  Drawings  to  the  extent  it  is  inconsistent  with  the  Space  Plan  or  the  Additional  Programming  Information).  After receiving such notice of disapproval, Landlord shall cause the Architect and/or the Engineers to   Working  Drawings  to  Tenant  for  its  approval.   Such  procedure  shall  be  repeated  as  necessary  until  Tenant  has  approved the Final Working Drawings.            3.6   Permits.  The Final Working Drawings shall be approved by Tenant (the "Approved Working  Drawings") prior to the commencement of the construction of the Tenant Improvements.  Landlord shall immediately  submit the Approved Working Drawings to the appropriate municipal authorities for issuance of applicable building  permits necessary to allow "Contractor," as that term is defined in Section 4.1, below, to commence the construction  of the Tenant Improvements (the "Permits").  No changes, modifications or alterations in the Approved Working  Drawings  may  be  made  without  the  prior  written  consent  of  Landlord,  provided  that  Landlord  may  withhold  its  consent, in its sole discretion, to any change in the Approved Working Drawings if such change would directly or  indirectly delay the "Substantial Completion" of the Premises as that term is defined in Section 5.1 of this Tenant  Work Letter.           3.7   Time Deadlines.  Landlord and Tenant shall each use their best, good faith, efforts and all due  diligence to cooperate with the Architect, the Engineers, and each other to complete all phases of the Construction  Drawings and the permitting process, and with Contractor for approval of the "Cost Proposal," as that term is defined  in Section 4.2 of this Tenant Work Letter, as soon as possible after the execution of the Lease.  The applicable dates  for approval of items, plans and drawings as described in this Section 3, Section 4, below, and in this Tenant Work  Letter are set forth (the "Time Deadlines"), attached hereto.  Landlord and Tenant each agree to comply with the Time  Deadlines.                                         SECTION 4                                                                   CONSTRUCTION OF THE TENANT IMPROVEMENTS          4.1   Contractor.  A contractor ("Contractor") to construct the Tenant Improvements shall be selected  pursuant to a competitive bid process whereby the construction of the Tenant Improvements shall be bid out to a  minimum  of  three  (3)  qualified,  licensed  and  reputable  general  contractors  (each  a  "Bidding  Contractor,"  and,  collectively, the "Bidding Contractors") mutually and reasonably selected by Landlord and Tenant.  The Bidding  Contractors shall bid on the construction of the Tenant Improvements utilizing an early set of the Final Working  Drawing.  Such selection shall take into account firm experience with similar projects, proposed project team and  proposed  commercial  terms  (fee,  insurance,  General  Conditions/General  Requirements).   Each  of  the  Bidding  Contractors shall be notified in the bidding package, which shall be prepared by Landlord and reasonably approved in  advance by Tenant, of (i) the time schedule for construction of the Tenant Improvements, (ii) the requirement that,  unless  Landlord  otherwise  requires,  the  selected  Bidding  Contractor  shall  use  the  fire,  life  safety  subcontractor  designated by Landlord, (iii) the requirement that Contractor shall be required to bid each of the major subcontractors  (as reasonably determined by Landlord) with at least three (3) qualified subcontractors, and (iv) the fact that such bids  shall be based on a "Guaranteed Maximum Price" contract for the construction of the Tenant Improvements.  Tenant  shall, within five (5) business days following the date upon which Landlord delivers such bids to Tenant,  select the  Contractor from among the Bidding Contractors that have (a) submitted qualified bids which were consistent with the    822610.04/WLA                          EXHIBIT B                          [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -4-                         [Zentalis Pharmaceuticals, Inc.]

 

bid assumptions and directions, and (b) have committed to Landlord's time schedule for construction of the Tenant  Improvements.            4.2   Cost  Proposal.   After  the  Approved  Working  Drawings  are  signed  by  Landlord  and  Tenant,  Landlord shall provide Tenant with a cost proposal in accordance with the Approved Working Drawings, which cost  proposal shall include, as nearly as possible, the cost of all Tenant Improvement Allowance Items to be incurred by  Tenant in connection with the design and construction of the Tenant Improvements (the "Cost Proposal").  Tenant  shall approve and deliver the Cost Proposal to Landlord within five (5) business days of the receipt of the same, and  upon receipt of the same by Landlord, Landlord shall be released by Tenant to purchase the items set forth in the Cost  Proposal and to commence the construction relating to such items.  The date by which Tenant must approve and  deliver the Cost Proposal to Landlord shall be known hereafter as the "Cost Proposal Delivery Date".          4.3   Construction of Tenant Improvements by Contractor under the Supervision of Landlord.                4.3.1  Over-Allowance Amount.  On the Cost Proposal Delivery Date, Tenant shall deliver to  Landlord cash in an amount (the "Over-Allowance Amount") equal to the difference between (i) the amount of the  Cost Proposal and (ii) the amount of the Tenant Improvement Allowance.  The Over-Allowance Amount shall be  disbursed by Landlord prior to the disbursement of any then remaining portion of the Tenant Improvement Allowance,  and such disbursement shall be pursuant to the same procedure as the Tenant Improvement Allowance.  In the event  that, after the Cost Proposal Delivery Date, any revisions, changes, or substitutions shall be made to the Construction  Drawings or the Tenant Improvements, any additional costs which arise in connection with such revisions, changes  or substitutions or any other additional costs shall be paid by Tenant to Landlord immediately upon Landlord's request  as an addition to the Over-Allowance Amount.                4.3.2  Landlord's  Retention  of  Contractor.   Subject  to  Section  4.1,  Landlord  shall  independently retain Contractor, on behalf of Tenant, to construct the Tenant Improvements in accordance with the  Approved Working Drawings (subject to the following sentence) and the Cost Proposal and Landlord shall supervise  the construction by Contractor, and Tenant shall pay a construction supervision and management fee (the "Landlord  Supervision Fee") to Landlord in an amount equal to two percent (2%) of the so called "hard" costs of constructing  the  Tenant  Improvements.   In  the  event  of  a  conflict  between  the  Approved  Working  Drawings  and  Landlord's  construction rules and regulations, Landlord, in its sole and absolute discretion, shall determine which shall prevail.   Notwithstanding  anything  set  forth  in  this  Tenant  Work  Letter  to  the  contrary,  construction  of  the  Tenant  Improvements shall not commence until (a) Landlord has a fully executed and delivered contract with Contractor for  the construction of the Tenant Improvements, (b) Tenant has procured and delivered to Landlord a copy of all Permits,  and (c) Tenant has delivered to Landlord the Over-Allowance Amount.                  4.3.3  Contractor's  Warranties  and  Guaranties.   Landlord  hereby  assigns  to  Tenant  all  warranties and guaranties by Contractor relating to the Tenant Improvements, and Tenant hereby waives all claims  against Landlord relating to, or arising out of the construction of, the Tenant Improvements.                                         SECTION 5                                                                    COMPLETION OF THE TENANT IMPROVEMENTS;                               LEASE COMMENCEMENT DATE          5.1   Ready  for  Occupancy.   The  Premises  shall  be  deemed "Ready  for  Occupancy"  upon  the  Substantial Completion of the Premises.  For purposes of this Lease, "Substantial Completion" of the Premises shall  occur upon the completion of construction of the Tenant Improvements in the Premises pursuant to the Approved  Working Drawings, with the exception of any punch list items  Use and any tenant fixtures, work-stations, built-in furniture, or equipment to be installed by Tenant or under the  supervision of Contractor.  Upon the Substantial Completion of the Premises, Landlord shall prepare and deliver to  Tenant a certificate signed by both Landlord and Architect (the "Substantial Completion Certificate") certifying  that the construction of the Tenant Improvements has been substantially completed in a good and workmanlike manner  in accordance with the Approved Working Drawings in all material respects, subject only to completion of any punch  list items.  Landlord shall provide Tenant at least thirty (30) days prior written notice of the Substantial Completion  of the Premises.      822610.04/WLA                          EXHIBIT B                          [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -5-                         [Zentalis Pharmaceuticals, Inc.]

 

       5.2   Delay of the Substantial Completion of the Premises.  Except as provided in this Section 5.2, the  Lease Commencement Date shall occur as set forth in the Lease and Section 5.1, above.  If there shall be a delay or  there are delays in the Substantial Completion of the Premises or in the occurrence of any of the other conditions  precedent to the Lease Commencement Date, as set forth in the Lease, as a direct, indirect, partial, or total result of:                5.2.1  Tenant's failure to comply with the Time Deadlines;                5.2.2  Tenant's failure to timely approve any matter requiring Tenant's approval;                5.2.3  A breach by Tenant of the terms of this Tenant Work Letter or the Lease;                5.2.4  Changes in any of the Construction Drawings after disapproval of the same by Landlord  or because the same do not comply with Code or other applicable laws;                5.2.5  Tenant's request for changes in the Approved Working Drawings;                5.2.6  Tenant's requirement for materials, components, finishes or improvements which are not  available in a commercially reasonable time given the anticipated date of Substantial Completion of the Premises, as  set forth in the Lease;                5.2.7  Changes to the Base, Shell and Core required by the Approved Working Drawings; or                5.2.8  Any other acts or omissions of Tenant, or its agents, or employees;   then, notwithstanding anything to the contrary set forth in the Lease or this Tenant Work Letter and regardless of the  actual date of the Substantial Completion of the Premises, the date of the Substantial Completion of the Premises shall  be deemed to be the date the Substantial Completion of the Premises would have occurred if no Tenant delay or delays,  as set forth above, had occurred.                                         SECTION 6                                                                                  MISCELLANEOUS          6.1   Tenant's Entry Into the Premises Prior to Substantial Completion.  Provided that Tenant and  its agents do not interfere with Contractor's work in the Building and the Premises, Contractor shall allow Tenant  access to the Premises up to sixty (60) days prior to the Substantial Completion of the Premises for the purpose of  Tenant installing equipment or fixtures (including Tenant's data and telephone equipment) in the Premises and to  otherwise  move  into  the  Premises.   Prior  to  Tenant's  entry  into  the  Premises  as  permitted  by  the  terms  of  this  Section 6.1, Tenant shall submit a schedule to Landlord and Contractor, for their approval, which schedule shall detail  the timing and purpose of Tenant's entry.  Tenant shall hold Landlord harmless from and indemnify, protect and defend  Landlord against any loss or damage to the Building or Premises and against injury to any persons caused by Tenant's  actions pursuant to this Section 6.1.          6.2   Freight  Elevators.   Landlord  shall  make  the  freight  elevator  reasonably  available  to  Tenant  in  connection with initial decorating, furnishing and moving into the Premises.          6.3   Tenant's  Representative.   Tenant  has  designated  Sean  Owsley  as  its  sole  representative  with  respect  to  the matters  set  forth  in  this  Tenant  Work  Letter,  who,  until  further  notice  to  Landlord,  shall  have  full  authority and responsibility to act on behalf of the Tenant as required in this Tenant Work Letter.          6.4   Landlord's  Representative.   Landlord  has  designated  Jeff  Sobczyk  of  PMA,  Inc.  as  its  sole  representative with respect to the matters set forth in this Tenant Work Letter, who, until further notice to Tenant,  shall have full authority and responsibility to act on behalf of the Landlord as required in this Tenant Work Letter.    822610.04/WLA                          EXHIBIT B                          [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -6-                         [Zentalis Pharmaceuticals, Inc.]

 

       6.5   Tenant's Agents.  All contractors, subcontractors, laborers, materialmen, and suppliers retained  directly by Tenant shall be from a list of supplied by Landlord and shall all be union labor in compliance with the then  existing master labor agreements.          6.6   Time of the Essence in This Tenant Work Letter.  Unless otherwise indicated, all references  herein to a "number of days" shall mean and refer to calendar days.  In all instances where Tenant is required to  approve or deliver an item, if no written notice of approval is given or the item is not delivered within the stated time  period,  at  Landlord's  sole  option,  at  the  end  of  such  period  the  item  shall  automatically  be  deemed  approved  or  delivered by Tenant and the next succeeding time period shall commence.          6.7   Tenant's Lease Default.  Notwithstanding any provision to the contrary contained in this Lease, if  an event of default as described in the Lease, or a default by Tenant under this Tenant Work Letter, has occurred at  any time on or before the TIA Expiration Date, then (i) in addition to all other rights and remedies granted to Landlord  pursuant  to  the  Lease,  Landlord  shall  have  the  right  to  withhold  payment  of  all  or  any  portion  of  the  Tenant  Improvement Allowance and/or Landlord may cause Contractor to cease the construction of the Premises (in which  case, Tenant shall be responsible for any delay in the Substantial Completion of the Premises caused by such work  stoppage as set forth in Section 5 of this Tenant Work Letter), and (ii) all other obligations of Landlord under the  terms of this Tenant Work Letter shall be forgiven until such time as such default is cured pursuant to the terms of the  Lease.    822610.04/WLA                          EXHIBIT B                          [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -7-                         [Zentalis Pharmaceuticals, Inc.]

 

                              SCHEDULE 1-A TO EXHIBIT B                                    BASE BUILDING PLANS      1.  Healthpeak Boardwalk Lot 15 Core & Shell Issued For Construction Volume 1 PDF Package Dated         05/28/2020      2.  Healthpeak Boardwalk Lot 15 Core & Shell Issued For Construction Volume 2 PDF Package Dated         05/28/2020      3.  Healthpeak Boardwalk Lot 15 Tenant Improvement Issued For Construction PDF Package Dated         08/25/2020      4.  Healthpeak Boardwalk Lot 16 Core & Shell Issued For Construction PDF Package Dated 03/18/2020      5.  ASI-01 - Edge of Slab Update for Lot 14 and Lot 16 dated 5/14/2020      6.  ASI-02 - Electrical RFI's for Lot 14/15 dated 5/20/2020      7.  ASI-03 Electrical RFI's for Lot 16 dated 7/31/2020.                                             SCHEDULE 1-A TO   822610.04/WLA                          EXHIBIT B                          [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -1-                         [Zentalis Pharmaceuticals, Inc.]

 

                              SCHEDULE 1-B TO EXHIBIT B                               BASE BUILDING MODIFICATIONS                                         [ATTACHED]                                       SCHEDULE 1-B TO   822610.04/WLA                          EXHIBIT B                          [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -1-                         [Zentalis Pharmaceuticals, Inc.]

 

                                                                            SCHEDULE 1-B TO   822610.04/WLA                                                         EXHIBIT B                                                        [THE BOARDWALK] 183362-00050/9-24-20/mem/mem                                                 -2-                                               [Zentalis Pharmaceuticals, Inc.]

 

                                                                SCHEDULE 1-B TO   822610.04/WLA                                                         EXHIBIT B                                                        [THE BOARDWALK] 183362-00050/9-24-20/mem/mem                                                 -3-                                               [Zentalis Pharmaceuticals, Inc.]

 

                                                                SCHEDULE 1-B TO   822610.04/WLA                                                         EXHIBIT B                                                        [THE BOARDWALK] 183362-00050/9-24-20/mem/mem                                                 -4-                                               [Zentalis Pharmaceuticals, Inc.]

 

                                                                SCHEDULE 1-B TO   822610.04/WLA                                                         EXHIBIT B                                                        [THE BOARDWALK] 183362-00050/9-24-20/mem/mem                                                 -5-                                               [Zentalis Pharmaceuticals, Inc.]

 

                                                                SCHEDULE 1-B TO   822610.04/WLA                                                         EXHIBIT B                                                        [THE BOARDWALK] 183362-00050/9-24-20/mem/mem                                                 -6-                                               [Zentalis Pharmaceuticals, Inc.]

 

                                                                                                                                                                                                                                                    SCHEDULE 1-B TO   822610.04/WLA                                                         EXHIBIT B                                                        [THE BOARDWALK] 183362-00050/9-24-20/mem/mem                                                 -7-                                               [Zentalis Pharmaceuticals, Inc.]

 

                                      EXHIBIT C                                      THE BOARDWALK                               NOTICE OF LEASE TERM DATES   To:   _______________________         _______________________         _______________________         _______________________                   Re:   Lease dated ____________, 20__ between ____________________, a _____________________               ("Landlord"),  and  _______________________,  a  _______________________  ("Tenant")               concerning  Suite  ______  on  floor(s)  __________  of  the  building  located  at                ___________________________, California.   Gentlemen:          In accordance with the Lease (the "Lease"), we wish to advise you and/or confirm as follows:          1.    The Lease Term shall commence on or has commenced on _____________ for a term of               _______________ ending on _______________.          2.    Rent commenced to accrue on ____________, in the amount of ____________.          3.    If the Lease Commencement Date is other than the first day of the month, the first billing will               contain a pro rata adjustment.  Each billing thereafter, with the exception of the final billing, shall               be for the full amount of the monthly installment as provided for in the Lease.          4.    Your rent checks should be made payable to __________ at ______________.          5.    The exact number of rentable/usable square feet within the Premises is _________ square feet.          6.    Tenant's Share as adjusted based upon the exact number of usable square feet within the Premises               is ____________%.                                               "Landlord":                                                                                    ,                                              a                                                 By:                                                       Its:                                                      822610.04/WLA                          EXHIBIT C                          [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -1-                         [Zentalis Pharmaceuticals, Inc.]

 

 Agreed to and Accepted as                     of                , 200  .    "Tenant":    a      By:          Its:      822610.04/WLA                          EXHIBIT C                          [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -2-                         [Zentalis Pharmaceuticals, Inc.]

 

                                      EXHIBIT D                                      THE BOARDWALK                         FORM OF TENANT'S ESTOPPEL CERTIFICATE          The undersigned as Tenant under that certain Lease (the "Lease") made and entered into as of ___________,  20___ by and between _______________ as Landlord, and the undersigned as Tenant, for Premises consisting of the  entire office building located at ______________________________, California, certifies as follows:          1.    Attached  hereto  as Exhibit A  is  a  true  and  correct  copy  of  the  Lease  and  all  amendments  and  modifications thereto.  The documents contained in Exhibit A represent the entire agreement between the parties as  to the Premises.          2.    The  undersigned  currently  occupies  the  Premises  described  in  the  Lease,  the  Lease  Term  commenced on __________, and the Lease Term expires on ___________, and the undersigned has no option to  terminate or cancel the Lease or to purchase all or any part of the Premises, the Building and/or the Project.          3.    Base Rent became payable on ____________.          4.    The Lease is in full force and effect and has not been modified, supplemented or amended in any  way except as provided in Exhibit A.          5.    Tenant has not transferred, assigned, or sublet any portion of the Premises nor entered into any  license or concession agreements with respect thereto except as follows:                                        6.    Tenant shall not modify the documents contained in Exhibit A without the prior written consent of  Landlord's mortgagee.          7.    All monthly installments of Base Rent, all Additional Rent and all monthly installments of estimated  Additional Rent have been paid when due through ___________.  The current monthly installment of Base Rent is  $_____________________.          8.    All conditions of the Lease to be performed by Landlord necessary to the enforceability of the Lease  have been satisfied and Landlord is not in default thereunder.  In addition, the undersigned has not delivered any notice  to Landlord regarding a default by Landlord thereunder.  The Lease does not require Landlord to provide any rental  concessions or to pay any leasing brokerage commissions.            9.    No rental has been paid more than thirty (30) days in advance and no security has been deposited  with Landlord except as provided in the Lease.  Neither Landlord, nor its successors or assigns, shall in any event be  liable or responsible for, or with respect to, the retention, application and/or return to Tenant of any security deposit  paid to any prior landlord of the Premises, whether or not still held by any such prior landlord, unless and until the  party from whom the security deposit is being sought, whether it be a lender, or any of its successors or assigns, has  actually received for its own account, as landlord, the full amount of such security deposit.          10.   As of the date hereof, there are no existing defenses or offsets, or, to the undersigned's knowledge,  claims or any basis for a claim, that the undersigned has against Landlord.    822610.04/WLA                          EXHIBIT D                          [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -1-                         [Zentalis Pharmaceuticals, Inc.]

 

       11.   If Tenant  is  a corporation or  partnership, each individual executing this  Estoppel  Certificate  on  behalf of  Tenant hereby  represents  and warrants  that  Tenant  is  a duly  formed and  existing entity qualified to do  business in California and that Tenant has full right and authority to execute and deliver this Estoppel Certificate and  that each person signing on behalf of Tenant is authorized to do so.          12.   There are no actions pending against the undersigned under the bankruptcy or similar laws of the  United States or any state.          13.   To  its  actual  knowledge,  Tenant  is  in  full  compliance  with  all  federal,  state  and  local  laws,  ordinances, rules and regulations affecting its use of the Premises, including, but not limited to, those laws, ordinances,  rules or regulations relating to hazardous or toxic materials.  Tenant has never permitted or suffered, nor does Tenant  have any knowledge of, the generation, manufacture, treatment, use, storage, disposal or discharge of any hazardous,  toxic or dangerous waste, substance or material in, on, under or about the Project or the Premises or any adjacent  premises or property in violation of any federal, state or local law, ordinance, rule or regulation.          14.   To the undersigned's knowledge, all tenant improvement work to be performed by Landlord under  the  Lease  has  been  completed  in  accordance  with  the  Lease  and  has  been  accepted  by  the  undersigned  and  all  reimbursements and allowances due to the undersigned under the Lease in connection with any tenant improvement  work have been paid in full.  All work (if any) in the common areas required by the Lease to be completed by Landlord  has been completed and all parking spaces required by the Lease have been furnished and/or all parking ratios required  by the Lease have been met.          The undersigned acknowledges that this Estoppel Certificate may be delivered to Landlord or to a prospective  mortgagee or prospective purchaser, and acknowledges that said prospective mortgagee or prospective purchaser will  be relying upon the statements contained herein in making the loan or acquiring the property of which the Premises  are a part and that receipt by it of this certificate is a condition of making such loan or acquiring such property.          Executed at ______________ on the ____ day of ___________, 20__.                                               "Tenant":                                                                                    ,                                              a                                                 By:                                                       Its:                                                  By:                                                       Its:                                                      822610.04/WLA                          EXHIBIT D                          [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -2-                         [Zentalis Pharmaceuticals, Inc.]

 

                                      EXHIBIT E                                      THE BOARDWALK                              ENVIRONMENTAL QUESTIONNAIRE                              ENVIRONMENTAL QUESTIONNAIRE                      FOR COMMERCIAL AND INDUSTRIAL PROPERTIES  Tenant Name:     Lease Address:                             right click to properties):    Primary Lease/Lessee                                                       Sublease from:                                                    Instructions:  The following questionnaire is to be completed by the Lessee representative with  knowledge of the  planned operations for the specified building/location.  Please print clearly and attach additional  sheets as necessary.   1.0  PROCESS INFORMATION        Describe planned site use, including a brief description of manufacturing processes and/or pilot plants planned       for this site, if any.                                                                                     Will (or are) non-waste hazardous materials be/being used or stored at this site?  If so, continue with the next       question.  If not, go to Section 3.0.       2.1  Are any of the following materials handled on the Property?        Yes    No            [A material is handled if it is used, generated, processed, produced, packaged, treated, stored, emitted,            discharged, or disposed.]  If YES, check (right click to properties) the applicable correct Fire Code            hazard categories below.                  Combustible dusts/fibers    Explosives               Flammable liquids                  Combustible liquids (e.g., oils)   Compressed gas - inert   Flammable solids/pyrophorics                                             Compressed gas -                  Cryogenic liquids - inert                            Organic peroxides                                             flammable/pyrophoric                 Cryogenic liquids -                                              Compressed gas - oxidizing   Oxidizers - solid or liquid                 flammable                                                                      Reactives - unstable or water                  Cryogenic liquids - oxidizing   Compressed gas - toxic                                                                       reactive                  Corrosives - solid or liquid   Compressed gas - corrosive   Toxics - solid or liquid        2-2. For all materials checked in Section 2.1 above, please list the specific material(s), use(s), and quantities            of each used or stored on the site in the table below; or attach a separate inventory. NOTE: If            proprietary, the constituents need not be named but the hazard information and volumes are required.    822610.04/WLA                          EXHIBIT E                          [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -1-                         [Zentalis Pharmaceuticals, Inc.]

 

                                      Physical                                      Units (pounds                      Material/       State (Solid,          Number of Containers       for solids,                                                 Container Size            Total Quantity                     Chemical         Liquid, or              Used & Stored          gallons or liters                                         Gas)                                          for liquids, &                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    2-3. Describe the planned storage area location(s) for the materials in Section 2-2 above.  Include site maps and            drawings as appropriate.                         2-4. Other hazardous materials. Check below (right click to properties) if applicable. NOTE: If either of the latter    822610.04/WLA                          EXHIBIT E                          [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -2-                         [Zentalis Pharmaceuticals, Inc.]

 

          two are checked (BSL-3 and/or radioisotope/radiation), be advised that not all lease locations/cities or lease            agreements allow these hazards; and if either of these hazards are planned, additional information will be            required with copies of oversight agency authorizations/licenses as they become available.                 Risk Group 2/Biosafety      Risk Group 3/Biosafety                                                                       Radioisotopes/Radiation                 Level-2 Biohazards          Level-3 Biohazards  3.0  HAZARDOUS WASTE (i.e., REGULATED CHEMICAL WASTE)       Are (or will) hazardous wastes (be) generated?        Yes    No       If YES, continue with the next question.  If not, skip this section and go to section 4.0.         3.1  Are or will any of the following hazardous (CHEMICAL) wastes generated, handled, or disposed of            (where applicable and allowed) on the property?                   Liquids                     Process sludges          PCBs                  Solids                      Metals                   wastewater        3-2. List and estimate the quantities of hazardous waste identified in Question 3-1 above.                                                     WASTE TYPE                                                                                  Non-  APPROX.    DISPOSITION [e.g., off-site            HAZARDOUS (CHEMICAL)                          RCRA  MONTHLY      landfill, incineration, fuel                                      SOURCE       RCRA               WASTE GENERATED                            (Calif- QUANTITY    blending scrap metal;                                                    listed                                                           ornia with units wastewater neutralization (onsite                                                   (federal)                                                                    ONLY or                 or off-site)]                                                          recycle)                                                                                                                                                                                                                                                                                                                                             3-3. Waste characterization by:        Process knowledge        EPA lab analysis       Both        3-4.    Please include name, location, and permit number (e.g. EPA ID No.) for transporter and disposal            facility if  applicable.  Attach separate pages as necessary.                   Hazardous Waste                                Transporter (T) or                                             Facility Location                    Permit Number             Transporter/Disposal Facility Name                  Disposal (D) Facility                                                                                                                                                                                                           3-5. Are pollution controls or monitoring employed in the process to prevent or minimize the release of wastes            into the environment? NOTE: This does NOT mean fume hoods; examples include air scrubbers, cyclones,            carbon or HEPA filters at building exhaust fans, sedimentation tanks, pH neutralization systems for            wastewater, etc.               Yes    No            If YES, please list/describe:      822610.04/WLA                          EXHIBIT E                          [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -3-                         [Zentalis Pharmaceuticals, Inc.]

 

             4.0  OTHER REGULATED WASTE (i.e., REGULATED        4-1.  Will (or do) you generate medical waste?    Yes    No   If NO, skip to Section 5.0.       4-2.  Check the types of waste that will be generated, all of which fall under the California Medical Waste            Act:                  Contaminated sharps (i.e., if                        Pathology waste known or                 contaminated with   Risk     Animal carcasses        suspected to be contaminated                 Group 2 materials)                                   with  Risk Group 2 pathogens)                                                                      Trace Chemotherapeutic Waste                 Red bag  biohazardous waste Human or non-human                                                                      and/or Pharmaceutical waste                 (i.e., with   Risk Group 2  primate blood, tissues, etc.                                                                      NOT otherwise regulated as                 materials) for autoclaving                                             (e.g., clinical specimens) RCRA chemical waste       4-3.   What vendor will be used for off-site autoclaving and/or incineration?         4-5.  Do you have a Medical Waste Permit for this site?     Yes    No, not required.                                                        No, but an application will be submitted.   5.0  UNDERGROUND STORAGE TANKS (USTS) & ABOVEGROUND STORAGE TANKS (ASTS)       5-1.  Are underground storage tanks (USTs), aboveground storage tanks (ASTs), or associated pipelines used for            the storage of petroleum products, chemicals, or liquid wastes present on site (lease renewals) or required for            planned operations (new tenants)?      Yes    No               NOTE: If you will have your own diesel emergency power generator, then you will have at least one AST!            [NOTE: If a backup generator services multiple tenants, then the landlord usually handles the permits.]            If  NO, skip to section 6.0.  If YES, please describe capacity, contents, age, type of the USTs or            ASTs, as well any associated leak  detection/spill prevention measures.  Please attach additional            pages if necessary.               UST or Capacity                        Year                     Associated Leak Detection /                                                         Type (Steel, Fiberglass,  etc.)             AST   (gallons)       Contents       Installed                 Spill Prevention  Measures*                                                                                                                                                                                        *NOTE: The following are examples of leak detection / spill prevention measures:  integrity testing,                   inventory reconciliation, leak detection system, overfill spill protection, secondary containment,                   cathodic protection.       5-2. Please provide copies of written tank integrity test results and/or monitoring documentation, if available.        5-3. Is the UST/AST registered and permitted with the appropriate regulatory agencies?      Yes    No, not yet               If YES, please attach a copy of the required permit(s). See Section 7-1 for the oversight agencies that issue            permits, with the exception of those for diesel emergency power generators which are permitted by the local            Air Quality District (Bay Area Air Quality Management District = BAAQMD; or San Diego Air Pollution            Control District = San Diego APCD).       5-4. If this Questionnaire is being completed for a lease renewal, and if any of the USTs/ASTs have leaked,    822610.04/WLA                          EXHIBIT E                          [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -4-                         [Zentalis Pharmaceuticals, Inc.]

 

          please state the substance released, the media(s) impacted (e.g., soil, water, asphalt, etc.), the actions taken,            and all remedial responses to the incident.                                    5-5. If this Questionnaire is being completed for a lease renewal, have USTs/ASTs been removed from the            Property?                Yes    No            If YES, please provide any official closure letters or reports and supporting documentation (e.g., analytical            test results, remediation report results, etc.).       5-6.   For Lease renewals, are there any above or below ground pipelines on site used to transfer chemicals or            wastes?                                                                            Yes    No            For new tenants, are installations of this type required for the planned operations?    Yes    No            If YES to either question in this section 5-6, please describe.                                    6.0  ASBESTOS CONTAINING BUILDING MATERIALS       Please  be  advised  that  an  asbestos  survey  may  have  been  performed  at  the  Property.  If  provided,  please  review  the       information  that  identifies  the  locations  of  known  asbestos  containing  material  or  presumed  asbestos  containing       material.  All  personnel  and  appropriate  subcontractors  should  be  notified  of  the  presence  of  these  materials,  and       informed not to disturb these materials.  Any activity that involves the disturbance or removal of these materials  must       be done by an appropriately trained individual/contractor.    7.0  OTHER REGULATORY PERMITS/REQUIREMENTS        7-1.   Does the operation have or require an industrial wastewater permit to discharge into the local National            Pollutant Discharge Elimination System (NPDES)? [Example: This applies when wastewater from            equipment cleaning is routed through a pH neutralization system prior to discharge into the sanitary or lab            sewer for certain pharmaceutical manufacturing wastewater; etc.] Permits are obtained from the regional            sanitation district that is treating wastewater.                Yes    No    No, but one will be prepared and submitted to the Landlord property management            company.            If so, please attach a copy of this permit or provide it later when it has been prepared.       7-2.   Has a Hazardous Materials Business Plan (HMBP) been developed for the site and submitted via the State of            California Electronic Reporting System (CERS)? [NOTE: The trigger limits for having to do this are  200            cubic feet if any one type of compressed gas(except for carbon dioxide and inert simple asphyxiant gases,            which have a higher trigger limit of   1,000 cubic feet);  55 gallons if any one type of hazardous chemical            liquid; and 500 pounds of any one type of hazardous chemical solid. So a full-sixe gas cylinder and a 260-            diesel tank size is  55 gallons and it is permitted under the tenant (rather than  under the landlord).]            NOTE: Each local Certified Unified Program Agency (CUPA) in California governs the HMBP process so            start there. Examples: the CUPA for cities in San Mateo County is the County Environmental Health            Department; the CUPA for the City of Hayward, CA is the Hayward Fire Department; the CUPA for            Mountain View is the Mountain View Fire Department; and, the CUPA for San Diego is the County of San            Diego Hazardous Materials Division (HMD),    822610.04/WLA                          EXHIBIT E                          [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -5-                         [Zentalis Pharmaceuticals, Inc.]

 

             Yes    No, not required.   No, but one will be prepared and submitted, and a copy will be provided            to the landlord property management company.            If one has been completed, please attach a copy.  Continue to provide updated versions as they are            completed. This is a legal requirement in that State law requires that the owner/operator of a business located            on leased or rented real property shall notify, in writing, the owner of the property that the business is subject            to and is in compliance with the Hazardous Materials Business Plan requirements (Health and Safety Code            Chapter 6.95 Section 25505.1).       7-3.  NOTE: Please be advised that if you are involved in any tenant improvements that require a construction            permit, you will be asked to provide the local city with a Hazardous Materials Inventory Statement (HMIS)            to ensure that your hazardous chemicals fall within the applicable Fire Code fire control area limits for the            applicable construction occupancy of the particular building.  The HMIS will include much of the             expressly warrants that the inventory provided in Section 2-2 will necessarily meet the applicable California            Fire Code fire control area limits for building occupancy, especially in shared tenant occupancy situations. It            is the responsibility of the tenant to ensure that a facility and site can legally handle the intended operations            and hazardous materials desired/ needed for its operations, but the landlord is happy to assist in this            determination when possible.    CERTIFICATION   I  am  familiar  with  the  real  property  described  in  this  questionnaire.  By  signing  below,  I  represent  and  warrant that  the answers to the above questions are complete and accurate to the best of my knowledge.  I also understand that  Lessor  will  rely  on  the  completeness  and  accuracy  of  my  answers  in  assessing  any  environmental  liability  risks  associated with the property.           Signature:                    Name:                                                        Title:                Date:                Telephone:                                               822610.04/WLA                          EXHIBIT E                          [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -6-                         [Zentalis Pharmaceuticals, Inc.]

 

                                      EXHIBIT F                                  MARKET RENT ANALYSIS          When determining Market Rent, the following rules and instructions shall be followed.          1.    RELEVANT FACTORS.  The "Market Rent," as used in this Lease, shall be derived from an  analysis (as such derivation and analysis are set forth in this Exhibit F) of the "Net Equivalent Lease Rates," of the  "Comparable Transactions".  The "Market Rent," as used in this Lease, shall be equal to the annual rent per rentable  square foot as would be applicable on the commencement of the Option Term at which tenants, are, pursuant to  transactions consummated within the twelve (12) month period immediately preceding the first day of the Option  Term (provided that timing adjustments shall be made to reflect any perceived changes which will occur in the Market  Rent following the date of any particular Comparable Transaction up to the date of the commencement of the Option  Term) leasing non-sublease, non-encumbered, non-equity space comparable in location and quality to the Premises  and consisting of one full floor or greater transactions, for a comparable term, in an arm's-length transaction, which  comparable space is located in the "Comparable Buildings," as that term is defined in Section 4, below (transactions  satisfying the foregoing criteria shall be known as the "Comparable Transactions").  The terms of the Comparable  Transactions shall be calculated as a Net Equivalent Lease Rate pursuant to the terms of this Exhibit F and shall take  into consideration only the following terms and concessions:  (i) the rental rate and escalations for the Comparable  Transactions, (ii) the amount of parking rent per parking permit paid in the Comparable Transactions, (iii) operating  expense and tax escalation protection granted in such Comparable Transactions such as a base year or expense stop  (although  for  each  such  Comparable  Transaction  the  base  rent  shall  be  adjusted  to  a  triple  net  base  rent  using  reasonable  estimates  of  operating  expenses  and  taxes  as  determined  by  Landlord  for  each  such  Comparable  Transaction); (iv) tenant improvements or allowances provided or to be provided for such comparable space, taking  into account, the value of the existing improvements, if any, in the Premises and/or improvement allowances granted  to Tenant, such value of existing improvements to be based upon the age, quality and layout of the improvements and  the extent to which the same could be utilized by general office users (as contrasted to the Tenant), and (v) rental  abatement  concessions,  if  any,  being  granted  such  tenants  in  connection  with  such  comparable  space;  provided,  however, that no consideration shall be given to (1) the fact that Landlord is or is not required to pay a real estate  brokerage commission in connection with the applicable term or the fact that the Comparable Transactions do or do  not involve the payment of real estate brokerage commissions, and (2) any period of rental abatement, if any, granted  to  tenants  in  Comparable  Transactions  in  connection  with  the  design,  permitting  and  construction  of  tenant  improvements in such comparable spaces.  The Market Rent shall include adjustment of the stated size of the Premises,  based upon the standards of measurement utilized in the Comparable Transactions.            2.    TENANT SECURITY.  The Market Rent shall additionally include a determination as to whether,  and if so to what extent, Tenant must provide Landlord with financial security, such as a letter of credit or guaranty,  for Tenant's Rent obligations during the Option Term.  Such determination shall be made by reviewing the extent of  financial security then generally being imposed in Comparable Transactions from tenants of comparable financial  condition and credit history to the then existing financial condition and credit history of Tenant (with appropriate  adjustments to account for differences in the then-existing financial condition of Tenant and such other tenants).            3.    TENANT IMPROVEMENT ALLOWANCE.  If, in determining the Market Rent for an Option  Term, Tenant is entitled to a tenant improvement or comparable allowance for the improvement of the Option Space  (the "Option Term TI Allowance Option  Term  TI Allowance  in  accordance  with  the  following:   (A) to  grant  some  or  all  of  the  Option  Term  TI Allowance to Tenant  in  the form as described above (i.e., as an improvement  allowance),  and/or  (B) to offset  against the rental rate component of the Market Rent all or a portion of the Option Term TI Allowance (in which case  such portion of the Option Term TI Allowance provided in the form of a rental offset shall not be granted to Tenant).   To the extent Landlord elects not to grant the entire Option Term TI Allowance to Tenant as a tenant improvement  allowance, the offset under item (B), above, shall equal the amount of the tenant improvement allowance not granted  to Tenant as a tenant improvement allowance pursuant to the preceding sentence.            4.    COMPARABLE BUILDINGS.  For purposes of this Lease, the term "Comparable Buildings"  shall mean the Building, the other buildings in the Project, and those other first-class institutionally-owned office and    822610.04/WLA                          EXHIBIT F                          [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -1-                         [Zentalis Pharmaceuticals, Inc.]

 

laboratory buildings located in the Torrey Pines market area of San Diego, California that are comparable in age (based  on the date of  original  construction or  the latest  major  renovation) location, quality of construction, services and  amenities.  With respect to Comparable Transactions that are not located in the Building, the Market Rent shall be  adjusted, if necessary, to take into consideration the size, age, quality of construction and appearance, scale, nature  and location of the Comparable Buildings as they the relate to the Building.          5.    METHODOLOGY  FOR  REVIEWING  AND  COMPARING  THE  COMPARABLE  TRANSACTIONS.   In  order  to  analyze  the  Comparable  Transactions  based  on  the  factors  to  be  considered  in  calculating Market Rent, and given that the Comparable Transactions may vary in terms of length or term, rental rate,  concessions, etc., the following steps shall be taken into consideration to "adjust" the objective data from each of the  Comparable  Transactions.   By  taking  this  approach,  a  "Net  Equivalent  Lease  Rate"  for  each  of  the  Comparable  Transactions shall be determined using the following steps to adjust the Comparable Transactions, which will allow  for an "apples to apples" comparison of the Comparable Transactions.                5.1    The contractual rent payments for each of the Comparable Transactions should be arrayed  monthly or annually over the lease term.  All Comparable Transactions should be adjusted to simulate a net rent  structure, wherein the tenant is responsible for the payment of all property operating expenses and taxes in a manner  consistent with this Lease.  This results in the estimate of Net Equivalent Rent received by each landlord for each  Comparable Transaction being expressed as a periodic net rent payment.                5.2    Any free rent or similar inducements received over time should be deducted in the time  period in which they occur, resulting in the net cash flow arrayed over the lease term.                5.3    The  resultant net cash  flow from  the  lease  should be then discounted (using  an  annual  discount rate equal to 8.0%) to the lease commencement date, resulting in a net present value estimate.                5.4    From the net present value, up front inducements (improvements allowances and other  concessions) should be deducted.  These items should be deducted directly, on a "dollar for dollar" basis, without  discounting since they are typically incurred at lease commencement, while rent (which is discounted) is a future  receipt.                5.5    The net present value should then amortized back over the lease term as a level monthly or  annual  net  rent  payment  using  the  same  annual  discount  rate  of  8.0%  used  in  the  present  value  analysis.   This  calculation will result in a hypothetical level or even payment over the option period, termed the "Net Equivalent  Lease Rate" (or constant equivalent in general financial terms).          6.    USE  OF  NET  EQUIVALENT  LEASE  RATES  FOR  COMPARABLE  TRANSACTIONS.   The Net Equivalent Lease Rates for the Comparable Transactions shall then be used to reconcile, in a manner usual  and customary for a real estate appraisal process, to a conclusion of Market Rent which shall be stated as a Net  Equivalent Lease Rate applicable the Option Term.    822610.04/WLA                          EXHIBIT F                          [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              -2-                         [Zentalis Pharmaceuticals, Inc.]

 

                                                                                                                                 EXHIBIT G                                FORM OF LETTER OF CREDIT   IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER _____________   ISSUE DATE: ______________   ISSUING BANK:  SILICON VALLEY BANK  3003 TASMAN DRIVE  2ND FLOOR, MAIL SORT HF210  SANTA CLARA, CALIFORNIA 95054   BENEFICIARY:  TPSC IX, LLC  C/O HEALTHPEAK PROPERTIES, INC.  1920 MAIN STREET, SUITE 1200  IRVINE, CA  92614  ATTN:  LEGAL DEPARTMENT   APPLICANT:  ZENTALIS PHARMACEUTICALS, INC.  530 SEVENTH AVE. STE 2201  NEW YORK, NY  10018                AMOUNT:             US$1,076,985.00 (ONE MILLION SEVENTY-SIX THOUSAND               NINE HUNDRED EIGHTY-FIVE AND 00/100 U.S. DOLLARS)   EXPIRATION DATE:           SEPTEMBER __, 2021 (ONE YEAR FROM DATE THE LC IS ISSUED)       DEAR SIR/MADAM:     WE HEREBY ESTABLISH OUR IRREVOCABLE STANDBY LETTER OF CREDIT NO. SVBS________ IN  YOUR FAVOR FOR THE ACCOUNT OF THE APPLICANT EFFECTIVE IMMEDIATELY, FOR THE SUM  NOT EXCEEDING ONE MILLION SEVENTY-SIX THOUSAND NINE HUNDRED EIGHTY-FIVE AND  00/100 U.S. DOLLARS U.S. DOLLARS ($1,076,985.00)  WHICH EXPIRES ON __________ AT OUR OFFICE   ATTACHED AND ACCOMPANIED BY THE FOLLOWING DOCUMENTS:    1. THE ORIGINAL OF THIS LETTER OF CREDIT AND ALL AMENDMENT(S), IF ANY.     [Type here]  ALL THE DETAILS SET FORTH HEREIN IN THIS LETTER OF CREDIT DRAFT IS APPROVED BY APPLICANT.  IF THERE IS ANY  DISCREPANCY BETWEEN THE DETAILS OF THIS LETTER OF CREDIT DRAFT AND THE LETTER OF CREDIT APPLICATION,  BETWEEN APPLICANT AND SILICON VALLEY BANK, THE DETAILS HEREOF SHALL PREVAIL.  ___________________________                           _______________                                                                                  3  620\3198769.2  

 

                                                                                            WITH INSTRUCTIONS IN BRACKETS THEREIN COMPLETED:    (DEFINED BELOW), OR (B) AS A RESULT OF THE TERMINATION OF SUCH LEASE, HAS THE RIGHT  TO DRAW DOWN THE AMOUNT OF USD(INSERT) IN ACCORDANCE WITH THE TERMS OF THAT  CERTAIN OFFICE LEASE DATED SEPTEMBER ___, 2020 BY AND BETWEEN BENEFICIARY AND  APPLICANT (OR THE SUCCESSOR-IN-INTEREST TO THE ORIGINAL TENANT OF SUCH OFFICE  LEASE), AS THE SAME MAY HAVE BEEN AMENDE AMOUNT CONSTITUTES DAMAGES OWING BY THE TENANT TO BENEFICIARY RESULTING FROM  THE BREACH OF SUCH LEASE BY THE TENANT THEREUNDER, OR THE TERMINATION OF SUCH  LEASE, AND SUCH AMOUNT REMAINS UNPAID    OR                                               EXTEND ITS STANDBY LETTER OF CREDIT NO.  SVBSF(INSERT) AND LESS THAN SIXTY (60) DAYS REMAIN PRIOR TO THE EXPIRATION OF SUCH     OR     FULL AMOUNT OF LETTER OF CREDIT NO. SVBSF(INSERT)  AS THE RESULT OF THE FILING OF A  VOLUNTARY PETITION UNDER THE U.S. BANKRUPTCY CODE OR A STATE BANKRUPTCY CODE BY  THE TENANT UNDER THAT CERTAIN OFFICE LEASE DATED SEPTEMBER ___, 2020 BY AND  BETWEEN BENEFICIARY AND APPLICANT (OR THE SUCCESSOR-IN-INTEREST TO THE ORIGINAL  TENANT OF SUCH OFFICE LEASE), AS THE SAME MAY HAVE BEEN AMENDED (COLLECTIVELY,     OR     FULL AMOUNT OF LETTER OF CREDIT NO. SVBSF(INSERT)  AS THE RESULT OF AN INVOLUNTARY  PETITION HAVING BEEN FILED UNDER THE U.S. BANKRUPTCY CODE OR A STATE BANKRUPTCY  CODE AGAINST THE TENANT UNDER THAT CERTAIN OFFICE LEASE DATED SEPTEMBER ___, 2020  BY AND BETWEEN BENEFICIARY AND APPLICANT (OR THE SUCCESSOR-IN-INTEREST TO THE  ORIGINAL TENANT OF SUCH OFFICE LEASE), AS THE SAME MAY HAVE BEEN AMENDED     OR      FULL AMOUNT OF LETTER OF CREDIT NO. SVBSF(INSERT)  AS THE RESULT OF THE REJECTION, OR  DEEMED REJECTION, OF THAT CERTAIN OFFICE LEASE DATED SEPTEMBER ___, 2020 BY AND  BETWEEN BENEFICIARY AND APPLICANT(OR THE SUCCESSOR-IN-INTEREST TO THE ORIGINAL  TENANT OF SUCH OFFICE LEASE), AS THE SAME MAY HAVE BEEN AMENDED, UNDER SECTION 365     [Type here]  ALL THE DETAILS SET FORTH HEREIN IN THIS LETTER OF CREDIT DRAFT IS APPROVED BY APPLICANT.  IF THERE IS ANY  DISCREPANCY BETWEEN THE DETAILS OF THIS LETTER OF CREDIT DRAFT AND THE LETTER OF CREDIT APPLICATION,  BETWEEN APPLICANT AND SILICON VALLEY BANK, THE DETAILS HEREOF SHALL PREVAIL.  ___________________________                           _______________                                                                                  4  620\3198769.2  

 

                                                                                            PARTIAL DRAWINGS AND MULTIPLE PRESENTATIONS ARE ALLOWED.     NOTWITHSTANDING THE EXPIRATION DATE IDENTIFIED ABOVE IN THIS LETTER OF CREDIT, THIS  LETTER OF CREDIT SHALL BE AUTOMATICALLY EXTENDED FOR AN ADDITIONAL PERIOD OF ONE  YEAR, WITHOUT AMENDMENT, FROM THE PRESENT OR EACH FUTURE EXPIRATION DATE UNLESS  AT LEAST 60 DAYS PRIOR TO THE THEN CURRENT EXPIRATION DATE WE SEND YOU A NOTICE BY  REGISTERED  OR  CERTIFIED  MAIL  OR  OVERNIGHT  COURIER  SERVICE  AT  THE  ABOVE  ADDRESS  THAT THIS LETTER OF CREDIT WILL NOT BE EXTENDED BEYOND THE THEN CURRENT EXPIRATION  DATE.  IN NO EVENT SHALL THIS LETTER OF CREDIT BE AUTOMATICALLY EXTENDED BEYOND  OCTOBER 31, 2032.  IN THE EVENT WE SEND SUCH NOTICE OF NON-EXTENSION, YOU MAY DRAW  HEREUNDER BY YOUR PRESENTATION TO US OF YOUR SIGNED AND DATED STATEMENT STATING  THAT YOU HAVE RECEIVED A NON-EXTENSION NOTICE FROM SILICON VALLEY BANK IN RESPECT  OF LETTER OF CREDIT NO. SVBSF _____________, YOU ARE DRAWING ON SUCH LETTER OF CREDIT  FOR US$_____________, LESS THAN SIXTY (60) DAYS REMAIN PRIOR TO THE EXPIRATION OF THIS  LETTER  OF  CREDIT  AND  YOU  HAVE  NOT  RECEIVED  A  REPLACEMENT  LETTER  OF  CREDIT  ACCEPTABLE TO YOU.    ALL  DEMANDS  FOR  PAYMENT  SHALL  BE  MADE  BY  PRESENTATION  OF   THE  REQUIRED   BANK,  3003 TASMAN DRIVE,  MAIL SORT HF 210,  SANTA  CLARA,  CA  95054,  ATTENTION:  GLOBAL  TRADE FINANCE. AS USED IN THIS LETTER OF CREDIT, "BUSINESS DAY" SHALL MEAN ANY DAY  OTHER THAN A SATURDAY, SUNDAY OR A DAY ON WHICH BANKING INSTITUTIONS IN THE STATE  OF  CALIFORNIA  ARE  AUTHORIZED OR  REQUIRED  BY  LAW  TO  CLOSE.  NOTWITHSTANDING  ANY  PROVISION TO THE CONTRARY IN THE ISP98 (AS HEREINAFTER DEFINED), IF THE EXPIRATION DATE  OR  THE  FINAL  EXPIRATION  DATE  IS  NOT  A  BUSINESS  Day  THEN  SUCH  DATE  SHALL  BE  AUTOMATICALLY EXTENDED TO THE NEXT SUCCEEDING DATE WHICH IS A BUSINESS DAY.    FACSIMILE  PRESENTATIONS  ARE  ALSO  PERMITTED.   EACH  FACSIMILE  TRANSMISSION  SHALL  BE  MADE AT:  (408) 496-2418 OR (408) 969-6510; AND UNDER CONTEMPORANEOUS TELEPHONE ADVICE  TO:  (408)  450-5001  OR  (408)  654-7176,  ATTENTION:  GLOBAL  TRADE  FINANCE.   ABSENCE  OF  THE  AFORESAID  TELEPHONE  ADVICE  SHALL  NOT  AFFECT  OUR  OBLIGATION  TO  HONOR  ANY  DRAW  REQUEST.     THIS LETTER OF CREDIT IS TRANSFERABLE IN WHOLE BUT NOT IN PART ONE OR MORE TIMES, BUT  IN  EACH  INSTANCE  ONLY  TO  A  SINGLE  BENEFICIARY  AS  TRANSFEREE  AND  FOR  THE  THEN  AVAILABLE  AMOUNT,  ASSUMING  SUCH  TRANSFER  TO  SUCH  TRANSFEREE  WOULD  BE  IN  COMPLIANCE WITH THEN APPLICABLE LAW AND REGULATION, INCLUDING BUT NOT LIMITED TO  THE  REGULATIONS  OF  THE  U.S.  DEPARTMENT  OF  TREASURY  AND  U.S.  DEPARTMENT  OF  COMMERCE.  AT THE TIME OF TRANSFER, THE ORIGINAL LETTER OF CREDIT AND ORIGINALS OR  COPIES OF ALL AMENDMENTS, IF ANY, TO THIS LETTER OF CREDIT MUST BE SURRENDERED TO US  AT OUR ADDRESS INDICATED IN THIS LETTER OF CREDIT TOGETHER WITH OUR TRANSFER FORM   OF 1⁄4 OF 1% OF THE TRANSFER AMOUNT (MINIMUM US$250.00) UNDER THIS LETTER OF CREDIT BUT  SUCH  PAYMENT  BY  APPLICANT  SHALL  NOT  BE  A  CONDITION  TO  TRANSFER.  EACH  TRANSFER  SHALL BE EVIDENCED BY EITHER (1) OUR ENDORSEMENT ON THE REVERSE OF THE LETTER OF  CREDIT AND WE SHALL FORWARD THE ORIGINAL OF THE LETTER OF CREDIT SO ENDORSED TO  THE TRANSFEREE OR (2) OUR ISSUING A REPLACEMENT LETTER OF CREDIT TO THE TRANSFEREE  ON  SUBSTANTIALLY  THE  SAME  TERMS  AND  CONDITIONS  AS  THE  TRANSFERRED  LETTER  OF  CREDIT  (IN  WHICH  EVENT  THE  TRANSFERRED  LETTER  OF  CREDIT  SHALL  HAVE  NO  FURTHER  EFFECT).  [Type here]  ALL THE DETAILS SET FORTH HEREIN IN THIS LETTER OF CREDIT DRAFT IS APPROVED BY APPLICANT.  IF THERE IS ANY  DISCREPANCY BETWEEN THE DETAILS OF THIS LETTER OF CREDIT DRAFT AND THE LETTER OF CREDIT APPLICATION,  BETWEEN APPLICANT AND SILICON VALLEY BANK, THE DETAILS HEREOF SHALL PREVAIL.  ___________________________                           _______________                                                                                  5  620\3198769.2  

 

                                                                                              IF DEMAND FOR PAYMENT IS PRESENTED BY 10 A.M. CALIFORNIA TIME AND CONFORMS TO THE  TERMS AND CONDITIONS OF THIS LETTER OF CREDIT, PAYMENT  SHALL BE MADE BY ISSUING  BANK TO YOU OF THE AMOUNT SPECIFIED, IN IMMEDIATELY AVAILABLE FUNDS NO LATER THAN  THE  NEXT  FOLLOWING  BUSINESS  DAY  AFTER  THE  DATE  OF  PRESENTMENT.   IF  DEMAND  FOR  PAYMENT  IS  PRESENTED  BY  YOU  HEREUNDER  AFTER  THE  TIME  SPECIFIED  ABOVE,  AND  CONFORMS TO THE TERMS AND CONDITIONS OF THIS LETTER OF CREDIT, PAYMENT SHALL BE  MADE TO YOU, OF THE AMOUNT OF SPECIFIED, IN IMMEDIATELY AVAILABLE FUNDS NO LATER  THAN THE SECOND BUSINESS DAY AFTER THE DATE OF PRESENTMENT.     WE  HEREBY  AGREE  WITH  THE  BENEFICIARY  THAT  THE  DRAFTS  DRAWN  UNDER  AND  IN  ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS LETTER OF CREDIT SHALL BE DULY  HONORED UPON PRESENTATION TO US ON OR BEFORE THE EXPIRATION DATE OF THIS LETTER OF  CREDIT OR ANY AUTOMATICALLY EXTENDED EXPIRATION DATE.    IF THE ORIGINAL AND/OR ANY AMENDMENTS THERETO OF THIS STANDBY LETTER OF CREDIT NO.  SVBSF______ ARE LOST, STOLEN OR DESTROYED, WE WILL ISSUE YOU A "CERTIFIED TRUE COPY"  OF THIS STANDBY LETTER OF CREDIT NO. SVBSF______ UPON OUR RECEIPT OF YOUR INDEMNITY  LETTER.  IF THE ORIGINAL OF THIS STANDBY LETTER OF CREDIT IS MUTILATED, WE WILL ISSUE  YOU A REPLACEMENT STANDBY LETTER OF CREDIT WITH THE SAME NUMBER, DATE AND TERMS  AS THE ORIGINAL UPON OUR RECEIPT OF THE MUTILATED STANDBY LETTER OF CREDIT.     IF ANY INSTRUCTIONS ACCOMPANYING A DRAWING UNDER THIS LETTER OF CREDIT REQUEST  THAT PAYMENT IS TO BE MADE BY TRANSFER TO YOUR ACCOUNT WITH ANOTHER BANK, WE WILL  ONLY EFFECT SUCH PAYMENT BY FED WIRE TO A U.S. REGULATED BANK, AND WE AND/OR SUCH  OTHER BANK MAY RELY ON AN ACCOUNT NUMBER SPECIFIED IN SUCH INSTRUCTIONS EVEN IF  THE NUMBER IDENTIFIES A PERSON OR ENTITY DIFFERENT FROM THE INTENDED PAYEE.    THIS  LETTER  OF  CREDIT  IS  SUBJECT  TO  THE  INTERNATIONAL  STANDBY  PRACTICES  (ISP98),  INTERNATIONAL CHAMBER OF COMMERCE, PUBLICATION NO. 590.          SILICON VALLEY BANK,                ___________________________                           ___________________________       AUTHORIZED SIGNATURE                                 AUTHORIZED SIGNATURE         [Type here]  ALL THE DETAILS SET FORTH HEREIN IN THIS LETTER OF CREDIT DRAFT IS APPROVED BY APPLICANT.  IF THERE IS ANY  DISCREPANCY BETWEEN THE DETAILS OF THIS LETTER OF CREDIT DRAFT AND THE LETTER OF CREDIT APPLICATION,  BETWEEN APPLICANT AND SILICON VALLEY BANK, THE DETAILS HEREOF SHALL PREVAIL.  ___________________________                           _______________                                                                                  6  620\3198769.2  

 

                                                                                                                             EXHIBIT "A"                                   SIGHT DRAFT                                                                                                                     DATE: _______________                             REF. NO. ___________________      AT SIGHT OF THIS DRAFT      PAY TO THE ORDER OF                                            US$_________________                                           USDOLLARS _____________________________________________________________________           _________________________________________________________________________________                                DRAWN UNDER SILICON VALLEY BANK, SANTA CLARA, CALIFORNIA, STANDBY             LETTER OF CREDIT NUMBER NO. _______________________ DATED ___________________       TO: SILICON VALLEY BANK                      3003 TASMAN DRIVE                            _______________________________        SANTA CLARA, CA 95054                          (BENEFICIARY'S NAME)                                                                                                     ...............................................................                                                                                                                  Authorized Signature                              GUIDELINES TO PREPARE THE DRAFT   1. DATE: ISSUANCE DATE OF DRAFT.  2. REF. NO.: BENEFICIARY'S REFERENCE NUMBER, IF ANY.  3. PAY TO THE ORDER OF: NAME OF BENEFICIARY AS INDICATED IN THE L/C (MAKE     SURE BENEFICIARY ENDORSES IT ON THE REVERSE SIDE).  4. US$: AMOUNT OF DRAWING IN FIGURES.  5. USDOLLARS: AMOUNT OF DRAWING IN WORDS.  6. LETTER OF CREDIT NUMBER: SILICON VALLEY BANK'S STANDBY L/C NUMBER THAT     PERTAINS TO THE DRAWING.  7. DATED: ISSUANCE DATE OF THE STANDBY L/C.  8. BENEFICIARY'S NAME: NAME OF BENEFICIARY AS INDICATED IN THE L/C.  9. AUTHORIZED SIGNATURE: SIGNED BY AN AUTHORIZED SIGNER OF BENEFICIARY.    IF YOU NEED FURTHER ASSISTANCE IN COMPLETING THIS DRAFT, PLEASE CALL OUR L/C  PAYMENT SECTION AT 408-654-6274 OR 408-654-7716.          [Type here]  ALL THE DETAILS SET FORTH HEREIN IN THIS LETTER OF CREDIT DRAFT IS APPROVED BY APPLICANT.  IF THERE IS ANY  DISCREPANCY BETWEEN THE DETAILS OF THIS LETTER OF CREDIT DRAFT AND THE LETTER OF CREDIT APPLICATION,  BETWEEN APPLICANT AND SILICON VALLEY BANK, THE DETAILS HEREOF SHALL PREVAIL.  ___________________________                           _______________                                                                                  7  620\3198769.2  

 

                                                                                                                    IRREVOCABLE STANDBY LETTER OF CREDIT NUMBER __________________      [Type here]  ALL THE DETAILS SET FORTH HEREIN IN THIS LETTER OF CREDIT DRAFT IS APPROVED BY APPLICANT.  IF THERE IS ANY  DISCREPANCY BETWEEN THE DETAILS OF THIS LETTER OF CREDIT DRAFT AND THE LETTER OF CREDIT APPLICATION,  BETWEEN APPLICANT AND SILICON VALLEY BANK, THE DETAILS HEREOF SHALL PREVAIL.  ___________________________                           _______________                                                                                                        8  620\3198769.2  

 

                                                                                                                                                           FORM OF TRANSFER FORM    DATE: ____________________   TO: SILICON VALLEY BANK         3003 TASMAN DRIVE                           RE: IRREVOCABLE STANDBY LETTER OF CREDIT          SANTA CLARA, CA 95054                                           NO. _____________ ISSUED BY         ATTN: GLOBAL TRADE FINANCE                           SILICON VALLEY BANK, SANTA CLARA          STANDBY LETTERS OF CREDIT                       L/C AMOUNT: ___________________    GENTLEMEN:   FOR VALUE RECEIVED, THE UNDERSIGNED BENEFICIARY HEREBY IRREVOCABLY TRANSFERS TO:   _________________________________________________________________________________________  (NAME OF TRANSFEREE)   _________________________________________________________________________________________  (ADDRESS)   ALL RIGHTS OF THE UNDERSIGNED BENEFICIARY TO DRAW UNDER THE ABOVE LETTER OF CREDIT UP TO ITS  AVAILABLE AMOUNT AS SHOWN ABOVE AS OF THE DATE OF THIS TRANSFER.    BY  THIS  TRANSFER,  ALL  RIGHTS  OF  THE  UNDERSIGNED  BENEFICIARY  IN  SUCH  LETTER  OF  CREDIT  ARE  TRANSFERRED  TO  THE  TRANSFEREE.  TRANSFEREE  SHALL  HAVE  THE  SOLE  RIGHTS  AS  BENEFICIARY  THEREOF,  INCLUDING  SOLE  RIGHTS  RELATING  TO  ANY  AMENDMENTS,  WHETHER  INCREASES  OR  EXTENSIONS  OR  OTHER  AMENDMENTS,  AND  WHETHER  NOW  EXISTING  OR  HEREAFTER  MADE.  ALL  AMENDMENTS ARE TO BE ADVISED DIRECTLY TO THE TRANSFEREE WITHOUT NECESSITY OF ANY CONSENT  OF OR NOTICE TO THE UNDERSIGNED BENEFICIARY.   THE  ORIGINAL  OF  SUCH  LETTER  OF  CREDIT  IS  RETURNED  HEREWITH,  AND  WE  ASK  YOU  TO  EITHER  (1)  ENDORSE  THE  TRANSFER  ON  THE  REVERSE  THEREOF,  AND  FORWARD  IT  DIRECTLY  TO  THE  TRANSFEREE  WITH YOUR CUSTOMARY NOTICE OF TRANSFER, OR (2) ISSUE A REPLACEMENT LETTER OF CREDIT TO THE  TRANSFEREE  ON SUBSTANTIALLY THE SAME TERMS AND CONDITIONS AS THE TRANSFERRED LETTER OF  CREDIT (IN WHICH EVENT THE TRANSFERRED LETTER OF CREDIT SHALL HAVE NO FURTHER EFFECT).   SINCERELY,                                                  SIGNATURE AUTHENTICATED                                                   _____________________________                  The name(s), title(s), and signature(s) conform to that/those on file                                                 with us for the company and the signature(s) is/are authorized to                                                 execute this instrument.  _____________________________                    (SIGNATURE OF BENEFICIARY)                     _________________________________________________                                                                      (Name of Bank)  _____________________________                  _________________________________________________          (NAME AND TITLE)                                           (Address of Bank)                                                 _________________________________________________                                                                   (City, State, ZIP Code)                                                 _________________________________________________                                                                    (Authorized Name and Title)                                                                                                  _________________________________________________                                                                                (Authorized Signature)  [Type here]                                    _________________________________________________  ALL THE DETAILS SET FORTH HEREIN IN THIS LETTER     OF     CREDIT              DRAFT         (Telephone IS APPROVED number) BY APPLICANT.   IF THERE IS ANY  DISCREPANCY BETWEEN THE DETAILS OF THIS LETTER OF CREDIT DRAFT AND THE LETTER OF CREDIT APPLICATION,  BETWEEN APPLICANT AND SILICON VALLEY BANK, THE DETAILS HEREOF SHALL PREVAIL.  ___________________________                           _______________                                                                                                        9  620\3198769.2  

 

822610.04/WLA                                                         EXHIBIT G                                                        [THE BOARDWALK] 183362-00050/9-24-20/mem/mem                                                 -1-                                               [Zentalis Pharmaceuticals, Inc.]

 

                                        LEASE                                       THE BOARDWALK                                         TPSC IX, LLC,                               a Delaware limited liability company,                                          as Landlord,                                             and                              ZENTALIS PHARMACEUTICALS, INC.,                                    a Delaware corporation,                                          as Tenant.    822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem                                          [Zentalis Pharmaceuticals, Inc.]

 

                                 TABLE OF CONTENTS                                                                                     Page   1.     PREMISES, BUILDING, PROJECT, AND COMMON AREAS ............................................................... 5  2.     LEASE TERM; OPTION TERM ................................................................................................................. 6  3.     BASE RENT  ............................................................................................................................................... 6  4.     ADDITIONAL RENT .................................................................................................................................. 6  5.     USE OF PREMISES .................................................................................................................................. 11  6.    SERVICES AND UTILITIES .................................................................................................................... 16 7.     REPAIRS  .................................................................................................................................................. 17  8.     ADDITIONS AND ALTERATIONS ........................................................................................................ 17  9.     COVENANT AGAINST LIENS  .............................................................................................................. 19  10.   INSURANCE ............................................................................................................................................. 19  11.   DAMAGE AND DESTRUCTION ............................................................................................................ 21  12.   NONWAIVER  .......................................................................................................................................... 22 13.   CONDEMNATION  .................................................................................................................................. 23  14.   ASSIGNMENT AND SUBLETTING ....................................................................................................... 23  15.   SURRENDER OF PREMISES; OWNERSHIP AND REMOVAL OF TRADE FIXTURES .................. 26  16.   HOLDING OVER  ..................................................................................................................................... 27  17.   ESTOPPEL CERTIFICATES  ................................................................................................................... 27  18.   SUBORDINATION  .................................................................................................................................. 28  19.   DEFAULTS; REMEDIES ......................................................................................................................... 28  20.   COVENANT OF QUIET ENJOYMENT  ................................................................................................. 30  21.   SECURITY DEPOSIT  .............................................................................................................................. 30  22.   COMMUNICATIONS AND COMPUTER LINE  .................................................................................... 30  23.   SIGNS ........................................................................................................................................................ 30  24.   COMPLIANCE WITH LAW  ................................................................................................................... 31  25.   LATE CHARGES  ..................................................................................................................................... 31  26.   LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT .......................................... 32  27.   ENTRY BY LANDLORD  ........................................................................................................................ 32  28.   TENANT PARKING  ................................................................................................................................ 32  29.   MISCELLANEOUS PROVISIONS .......................................................................................................... 32             EXHIBITS   A     OUTLINE OF PREMISES  B     TENANT WORK LETTER  C     FORM OF NOTICE OF LEASE TERM DATES  D     FORM OF TENANT'S ESTOPPEL CERTIFICATE  E     ENVIRONMENTAL QUESTIONNAIRE  F     MARKET RENT ANALYSIS  G     FORM OF LETTER OF CREDIT        822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              (i)                         [Zentalis Pharmaceuticals, Inc.]

 

                                        INDEX                                                                                   Page(s)   Abatement Event ..................................................................................................................................................... 24  Advocate Arbitrators. ................................................................................................................................................ 8  Alterations ............................................................................................................................................................... 25  Arbitration Agreement ............................................................................................................................................... 8  Base Building Improvements ....................................................................................................................... Exhibit B  Base Building Modifications ........................................................................................................................ Exhibit B  Base Building Plans ...................................................................................................................................... Exhibit B  Base Rent ................................................................................................................................................................. 10  Briefs ......................................................................................................................................................................... 8  Brokers .................................................................................................................................................................... 47  Building ..................................................................................................................................................................... 1  Casualty ................................................................................................................................................................... 28  Common Areas .......................................................................................................................................................... 4  Contemplated Effective Date ................................................................................................................................... 32  Contemplated Transfer Space .................................................................................................................................. 32  Controllable Expenses ............................................................................................................................................. 15  Deliver Punch List ........................................................................................................................................ Exhibit B  Direct Expenses ....................................................................................................................................................... 11  Effective Date ............................................................................................................................................................ 5  Eligibility Period ..................................................................................................................................................... 24  Emergency Generator .............................................................................................................................................. 23  Estimate ................................................................................................................................................................... 16  Estimate Statement .................................................................................................................................................. 16  Estimated Direct Expenses ...................................................................................................................................... 16  Existing Hazardous Materials .................................................................................................................................. 19  Expense Year ........................................................................................................................................................... 12  First Rebuttals ............................................................................................................................................................ 8  Force Majeure .......................................................................................................................................................... 46  Holidays ................................................................................................................................................................... 22  HVAC ...................................................................................................................................................................... 22  Intention to Transfer Notice ..................................................................................................................................... 32  Landlord .................................................................................................................................................................... 1  Landlord Minor Changes .............................................................................................................................. Exhibit B  Landlord Parties ....................................................................................................................................................... 26  Landlord Repair Notice ........................................................................................................................................... 29  Landlord's Initial Statement ....................................................................................................................................... 9  Landlord's Rebuttal Statement ................................................................................................................................... 9  Lease .......................................................................................................................................................................... 1  Lease Commencement Date ...................................................................................................................................... 7  Lease Expiration Date ............................................................................................................................................... 7  Lease Term ................................................................................................................................................................ 7  Lease Year ................................................................................................................................................................. 7  Lines ........................................................................................................................................................................ 49  Mail ......................................................................................................................................................................... 46  Market Rent ............................................................................................................................................................... 7  Market Rent, .............................................................................................................................................................. 7  Net Worth ................................................................................................................................................................ 33  Neutral Arbitrator ...................................................................................................................................................... 8  Nine Month Period .................................................................................................................................................. 32  Notices ..................................................................................................................................................................... 46    822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              (ii)                        [Zentalis Pharmaceuticals, Inc.]

 

                                                                                 Page(s)   Objectionable Name ................................................................................................................................................ 42  Operating Expenses ................................................................................................................................................. 12  Option Conditions ..................................................................................................................................................... 7  Option Rent ............................................................................................................................................................... 7  Option Term .............................................................................................................................................................. 7  Option Term TI Allowance ....................................................................................................................................... 1  Original Improvements ............................................................................................................................................ 27  Outside Agreement Date ........................................................................................................................................... 8  Outside Area ............................................................................................................................................................ 21  Outside Date .............................................................................................................................................................. 5  Permitted Transferee ................................................................................................................................................ 33  Permitted Transferee Assignee. ............................................................................................................................... 33  Possession Date ......................................................................................................................................................... 4  Premises ..................................................................................................................................................................... 4  Project, ....................................................................................................................................................................... 4  Rooftop Equipment ............................................................................................................................................... 41  Ruling ........................................................................................................................................................................ 9  Second Rebuttals ....................................................................................................................................................... 9  Sign Specifications .................................................................................................................................................. 42  SNDAA ................................................................................................................................................................... 35  Statement ................................................................................................................................................................. 16  Subject Space ........................................................................................................................................................... 30  Summary.................................................................................................................................................................... 1  Superior Holders.................................................................................................................................................... 35  Tax Expenses ........................................................................................................................................................... 14  Tenant ........................................................................................................................................................................ 1  Tenant Work Letter ................................................................................................................................................... 4             ity System ........................................................................................................................................ 22  Tenant's Initial Statement .......................................................................................................................................... 9  Tenant's Rebuttal Statement ...................................................................................................................................... 9  Tenant's Share .......................................................................................................................................................... 15  Termination Date ..................................................................................................................................................... 10  Termination Extension Notice ................................................................................................................................... 5  Termination Fee ....................................................................................................................................................... 10  Termination Notice .............................................................................................................................................. 5, 10  Transfer Notice ........................................................................................................................................................ 30  Transferee ................................................................................................................................................................ 30      822610.04/WLA                                                             [THE BOARDWALK] 183362-00050/9-24-20/mem/mem              (iii)                       [Zentalis Pharmaceuticals, Inc.]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00314-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00314-of-00352.parquet"}]]