Document:

exv10w1

 

Exhibit 10.1

February 4, 2006

Gregory L. Weaver, CPA, MBA

Dear Greg:

     This letter shall serve to set forth the terms of employment offered to you by Sirna
Therapeutics, Inc. (the “Company”) and acknowledge your acceptance of the employment on such terms
as detailed below. This letter (“Agreement”) shall become effective on February 13, 2006 (the
“Effective Time”).

     Capitalized terms used herein and not otherwise defined herein shall have the meanings
ascribed to them on Attachment A hereto, which is incorporated herein.

     1. Positions, Location and Scope of Employment. Upon the Effective Time, you shall
serve as Senior Vice President and Chief Financial Officer of the Company and will be based in San
Francisco, California at the Company’s corporate headquarters. You shall render such business and
professional services in the performance of your duties, consistent with your position within the
Company, consistent with the Bylaws of the Company and the fiduciary duties of a corporate officer
of the Company, and as shall reasonably be assigned to you by the Company’s President and Chief
Executive Officer and/or the Board of Directors (the “Board”), and you shall report directly to the
President and Chief Executive Officer. You shall perform your duties faithfully and to the best of
your ability and shall devote your full business efforts and time to the Company. You hereby agree
to relocate to and establish your primary residence in San Francisco Bay area within ninety (90)
days of the Effective Time.

     2. Compensation.

          (a) Base Salary; Annual Reviews. During the period beginning as of the Effective Time
and ending on December 31, 2006, the Company shall pay to you as compensation for your services a
base salary at the annualized rate of $295,000 (the “Base Salary”). Thereafter, your Base Salary
shall be subject to annual performance review by the President and Chief Executive Officer. Your
Base Salary shall be paid in accordance with the Company’s normal payroll practices.

          (b) Signing and Retention Bonus. The Company shall pay you a one-time signing bonus in
an amount equal to $10,000 on the Effective Time. In addition, Company agrees to pay you a
retention bonus in an amount equal to $10,000 on the six (6) month anniversary of the Employment
Time and an additional $10,000 in retention bonus on the twelve (12) month anniversary of the
Employment Time. These payments

 

 

will be made to you only in the event you continue to be a full-time employee at the Company
and within thirty (30) days after the milestones set forth above.

          (c) Performance Bonus. In each calendar year of your employment with the Company you
shall be eligible to earn a bonus, which shall be payable in cash, Company stock option or Company
stock at the discretion of the Board of Directors of the Company. The annual bonus shall be based
upon attainment of goals which shall be mutually agreed upon by you and the President and Chief
Executive Officer. The amount of the annual bonus which you shall be eligible to earn shall be
equal to twenty five percent (25%) of your then current annual Base Salary in the event: (a) you
achieve such goals, (b) the Company achieves its corporate goals, and (iii) any other business,
economic or other factors deemed relevant at the time the Board makes bonus determinations for
Company executives. Your bonus shall be reasonably increased or decreased based on the
overachievement or underachievement of such personal and corporate goals. Such bonus shall be
payable within sixty (60) days after the end of the calendar year with respect to which the bonus
is payable.

          (d)
Options. The Board shall grant to you a stock option to purchase
300,000 shares of the Company’s common stock. The stock option grant shall be governed by the
terms of Company’s Stock Option Plan. Such options shall be exercisable for a period of ten (10)
years at an exercise price equal to the Fair Market Value (as defined in the Company’s Stock Option
Plan) as of the date of the stock option grant. Twenty five percent (25%) of the stock options
granted herein shall vest on the first anniversary of your employment with the Company and the
remaining seventy five percent (75%) of the stock options shall vest thereafter on a monthly basis
over the subsequent (3) years so as to be fully vested at the end of a period of four (4) years
after the date of the stock option grant. Each stock option grant shall be in the form of
incentive stock options in the maximum amount permitted by applicable law. You will also be
considered for additional grants of stock options in connection with reviews by the Board.

          (e) Employee Benefits. During your employment with the Company, you shall be entitled
to participate in the employee benefit plans currently and hereafter maintained by the Company,
which shall include, without limitation, the following:

               (i) group PPO medical and dental insurance plans (the coverage under which shall include your
dependents and contain no restrictions relative to pre-existing conditions and will be effective on
the first day of the first month after Effective Time);

               (ii) short-term disability insurance and long-term disability insurance (which coverage shall
contain no restrictions relative to pre-existing conditions);

               (iii) term life insurance in the guaranteed amount of $425,000 with the option of completing
an application and providing evidence of insurability for an additional $75,000 (as determined by
the insurance company issuing the policy), and with your having the right to designate the
beneficiary(ies) thereof;

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               (iv) participation in the Company’s 401(k) plan, your contributions to which may be matched by
the Company with contributions of shares of its common stock if approved by the Board; provided
that any such matching contributions shall vest over three (3) years of service (you can enroll on
the first available date allowed under the plan following the Effective Time);

               (v) participation in the Company’s Flexible Spending Account; and

               (vi) participation in the Company’s Stock Purchase Plan in which you can enroll on the first
available date allowed under the Plan following the Effective Time.

          The Company reserves the right to revise, add or rescind any benefits at any time for its
employees generally; provided that any such permitted revision, addition or rescission of benefits
by the Company shall be without prejudice to your rights provided in Section 4(d) hereof.

          (f) Vacation Days; Sick Days; Holidays. You shall be entitled to paid vacation, sick
days and holidays in accordance with the Company’s policies as in effect from time to time, as well
as all applicable state and federal laws.

          (g) Expenses. The Company shall reimburse you for reasonable travel, entertainment or
other expenses incurred by you in the furtherance of or in connection with the performance of your
duties on behalf of the Company and/or for the Company approved personal professional development
in accordance with the Company’s expense reimbursement policy as in effect from time to time.

     3. Termination.

          (a) At-Will Employment. You and the Company agree that your employment with the
Company shall be “at-will” employment, that you are free to resign and, subject to the provisions
hereof, the Company is free to terminate your employment at any time for any reason or no reason.

          (b) Voluntary Termination; Termination for Cause. In the event that your employment
with the Company is terminated voluntarily by you or for Cause by the Company, then (i) all options
which have vested shall continue to be exercisable in accordance with the terms of the Company’s
stock option plan and applicable legal requirements; (ii) all payments of Base Salary accrued but
unpaid on the date of termination, as well as all expenses incurred to the date of termination,
shall be due and payable to within the required timeframe allowed by law and all further
compensation by the Company to you hereunder shall terminate as of the date of termination; and
(iii) you shall be entitled to continue medical and dental insurance coverage for yourself and your
dependents, at your expense, at the same level of coverage as was provided to the you under the
Company’s insurance plan immediately prior to the termination (“Health Care Coverage”) by electing
COBRA continuation coverage (“COBRA”) in accordance with applicable law. In the event of
termination of your employment with the Company under this section 3(b), then you shall not be
entitled to any payments or benefits as severance. Your only entitlements shall be those described
in this Paragraph 3(b).

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          (c) Termination upon Death or Disability. In the event that your employment with the
Company is terminated as a result of your death or permanent disability then (i) all options which
have vested shall continue to be exercisable in accordance with the terms of the Company’s stock
option plan and applicable legal requirements; (ii) the Company shall pay to you, your estate or
your designated trust, as applicable, all payments of Base Salary and bonuses accrued but unpaid on
the date of termination, as well as expenses incurred to the date of termination, immediately upon
the date of termination and all further compensation by the Company to you hereunder shall
terminate as of the date of termination; and (iii) you shall be entitled to continue medical and
dental insurance coverage for yourself and your dependents, at your expense, at the same level of
coverage as was provided to you under the Company’s Health Care Coverage by electing COBRA in
accordance with applicable law. For purposes hereof, the term “permanent disability” shall mean
your inability to perform your duties as they exist at the time disability commences on account of
illness, accident or other physical or mental incapacity which shall continue for a consecutive
period of ninety (90) days or an aggregate of one hundred twenty (120) days in any consecutive
twelve-month period.

          (d) Termination without Cause. In the event that your employment with the Company is
terminated by the Company without Cause, then (i) all options which have vested shall continue to
be exercisable in accordance with the terms of the Company’s stock option plan and applicable legal
requirements; (ii) all payments of Base Salary and bonuses accrued in accordance with the Company’s
policy, but unpaid on the date of termination, as well as all expenses incurred to the date of
termination, shall be due and payable to you immediately; (iii) subject to the provisions of
Section 4 hereof, your unvested options shall continue to vest, on a monthly basis, during the nine
(9) month severance period described in Section 3(d)(iv) below, but such continuing vesting of your
unvested options shall cease upon your obtaining new employment during the applicable severance
period; (iv) the Company shall pay to you a severance payment, in monthly installments (two pay
checks per month in accordance with the Company’s standard payroll practices), equal to your
monthly Base Salary for a period of nine (9) months; provided, however, that in the event you are
terminated as a result of a Change of Control (other than for Cause), the amount of such severance
payment shall be twelve (12) months’ severance; provided, further, that in the event you obtain
other employment during the applicable nine (9) or twelve (12) month severance period, your
severance payments thereafter shall be reduced on a prospective basis (not to less than 0) in the
amount of cash compensation received by you during the remainder of such applicable severance
period; and (v) the Company shall be responsible for all costs relating to maintaining your Health
Care Coverage for you and your dependents under COBRA during the applicable severance period. You
shall be entitled to continue medical and dental insurance coverage for yourself and your
dependents for the remaining period, at your expense in accordance with applicable law. However,
such Health Care Coverage shall terminate upon your obtaining your own alternative Health Care
Coverage, whether from a new employer or otherwise (after completing any waiting periods for such
coverage to become effective).

          (e) Conditions of Severance. In order to receive any severance under this Section 3
above, you must do the following: (i) you must execute a Post-Termination General Release of All
Claims Agreement, in a form provided by the

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Company that is substantially similar in all material respects to Attachment B hereto, which
is made a part of this Agreement (“General Release”), provided, however, that the General Release
must become effective and enforceable in accordance with its terms; (iii) you must provide,
cooperatively and in good faith, to those person(s) designated by the Company, all information
necessary to effectively transition to others your job duties and responsibilities, knowledge, work
product and pending work, as and to the extent requested by the Company during the 60 day period
after your termination date; and (iv) you must comply with your obligations under the PIIA in
accordance with its terms (see below).

     4. Change of Control. Notwithstanding anything to the contrary contained herein, in
the event of a Change of Control of the Company if your employment is terminated by the Company
within one (1) year after the Change of Control (other than for Cause), then: (i) the greater of
(a) fifty percent (50%) of your unvested options shall vest immediately, or (b) your unvested
options (after taking into account the consequence of subsection (a) of this sentence) shall
continue to vest, on a monthly basis, during the twelve (12) month severance period described in
Section 3(d)(iv) above; and (ii) the Company shall pay to you a severance payment in accordance
with the provisions of Section 3(d) above.

     5. Proprietary
Information & Inventions Assignment Agreement (“PIIA”). As
a condition of your employment at the Company you will be required to sign a Proprietary
Information & Inventions Assignment Agreement (“PIIA”), attached and incorporated herein as
Attachment C, at the time of the signing of this Agreement.

     6. Directors’ and Officers’ Liability Policy. You will be covered under the Company’s
directors’ and officers’ liability insurance policy, which shall provide coverage in an amount and
upon terms customary to similarly situated companies. The Company shall maintain a policy
throughout the duration of your employment.

     7. Relocation Expenses associated with this Agreement. Terms for reimbursement of
expenses associated with you and your family’s relocation from Newcastle, Washington to San
Francisco Bay Area, California shall be in accordance with the terms set forth in the Company’s
standard relocation policy as set forth in the enclosed Attachment D. If employment is terminated
voluntarily or for Cause within one (1) year of payment/reimbursement by the Company, then one
hundred percent (100%) of relocation expenses paid to you or on your behalf by the Company shall be
promptly (but in no event later than thirty (30) days following the termination) repaid by you to
the Company.

     8. Indemnification. The Company agrees that if you are made a party or are threatened
to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or
investigative (a “Proceeding”), by reason of the fact that you are or were a director, officer,
employee or agent of the Company or any subsidiary or affiliate of the Company, whether or not the
basis of such Proceeding is alleged action in an official capacity as a director, officer, employee
or agent, you shall be indemnified and held harmless by the Company to the fullest extent
authorized by Delaware law, as the same exists or may hereafter amended, against all damages,
losses, judgments, liabilities, fines, penalties, excise taxes, settlements and costs, including
reasonable attorneys’ fees,

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accountants’ fees and disbursement, incurred or suffered by you in connection therewith
(including the advancement of your defense costs and expenses as and when incurred) and such
indemnification shall continue as to you even if you have ceased to be an officer, director or
agent and are no longer employed by the Company and shall inure to the benefit of your heirs,
executors and administrators.

     9. Assignment. This Agreement shall be binding upon and inure to the benefit of (a)
your heirs, executors and legal representatives upon your death and (b) any successor or assignee
of the Company. Any successor of the Company shall be deemed substituted for the Company under the
terms of this Agreement for all purposes. For this purpose, “successor” means any person, firm,
corporation or other business entity which at any time, whether by purchase, merger or otherwise,
directly or indirectly acquires all or substantially all of the assets or business of the Company.

     10. Notices. All notices, requests, demands and other communications provided
hereunder shall be in writing and shall be deemed given (i) on the date of delivery if delivered
personally, (ii) one (1) day after being sent by a well established commercial overnight service,
or (iii) four (4) days after being mailed by registered or certified mail, return receipt
requested, prepaid and addressed to the parties or their successors at the following addresses, or
at such other addresses as the parties may later designate in writing:

If to the Company:

SIRNA THERAPEUTICS, INC.

185 Berry Street, Suite 6504

San Francisco, California 94107

Attn: President & CEO

Copy to: V. P. Legal Affairs

If to you:

at the last residential address known by the Company.

     11. Severability. In the event that any provision hereof becomes or is declared by a
court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue
in full force and effect without said provision.

     12. Integration. Upon the Effective Time, this Agreement, together with the PIIA,
shall constitute the full and complete agreement and understanding between you and the Company as
to all subject matters covered herein. This Agreement supersedes and replaces all prior or
contemporaneous representations and agreements, whether written or oral. No waiver, alteration, or
modification of any of the provisions of this Agreement shall be binding unless in writing and
signed by duly authorized representatives of the parties hereto.

     13. Governing Law. This Agreement shall be governed by and interpreted in accordance
with the laws of the State of California, without reference to principles of conflict of laws. You
and the Company each hereby submits, exclusive jurisdiction of the courts located in San Francisco,
California and any courts of appeal therefrom, and waives any objection (on the grounds of lack of
jurisdiction, or forum non coveniens or otherwise) to the exercise of such jurisdiction by any such
courts.

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     14. Effective Time. This Agreement shall become effective at the Effective Time.

Please sign this Agreement and the enclosed PIIA and return one set of signed original copy to me,
acknowledging your agreement with and acceptance of these terms of employment.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	Sincerely,	 	 
	 
	 	 	 	 	SIRNA THERAPEUTICS, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	     /s/ Howard W. Robin	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	Name: Howard W. Robin	 	 
	 	 	 	 	Title:   President & CEO	 	 
	 
	 	 	 	 	 	 	 	 
	Agreed and accepted:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	     /s/ Gregory L. Weaver
 

Gregory L. Weaver

	 	 	 	 	 	 	 	 
	 
	Dated: February 4, 2006
	 	 	 	 	 	 	 	 

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Attachment A

DEFINITIONS

     Cause. “Cause” is defined as (i) conviction of a felony crime involving moral
turpitude, (ii) an intentional action or intentional failure to act which was performed in bad
faith and to the material detriment of the Company, (iii) continued intentional refusal or
intentional failure to act in accordance with any lawful and proper direction or order of the
Board, (iv) willful and habitual neglect of the duties of employment, (v) breach of the
Non-Disclosure Agreement, contemplated hereunder, or (vi) failure to establish employee’s primary
residence in San Francisco Bay area within ninety (90) days of the Effective Time; provided,
however, that with respect to the events of “cause” described under clauses (ii) through (v) above,
the Company shall have first provided to you written notice describing the nature of the event and,
thereafter, provided a reasonable opportunity to cure such event, which reasonable opportunity
shall in no event be less than thirty (30) days following receipt of such notice.

     Change of Control. “Change of Control” of the Company is defined as: (i) any “person”
(as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended) becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Company representing fifty percent (50%) or more of the total
voting power represented by the Company’s then outstanding voting securities; or (ii) the
consummation of a merger or consolidation of the Company with any other corporation that has been
approved by the stockholders of the Company, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting securities of the
surviving entity) more than fifty percent (50%) of the total voting power represented by the voting
securities of the Company or such surviving entity outstanding immediately after such merger or
consolidation, or the stockholders of the Company approve a plan of complete liquidation of the
Company; or (iii) the consummation of the sale or disposition by the Company of all or
substantially all the Company’s assets; or (iv) when the individuals who on the date hereof
constitute the Board and any new director (other than a director designated by a person or entity
who has entered into an agreement to effect a transaction described in clause (i), (ii) or (iii)
above), whose nomination and/or election to the Board was approved by a vote of at least a majority
of the directors still in office who either were directors on the date hereof or whose election or
nomination for election was previously approved, cease for any reason constitute a majority of the
Board.

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Attachment B

GENERAL RELEASE

POST-TERMINATION GENERAL RELEASE OF ALL CLAIMS AGREEMENT

I, Gregory Weaver, on behalf of myself, my heirs, executors, administrators and
assigns, hereby make the following agreements and acknowledgements in exchange for the severance
described in Section 3 of the “Offer of Employment” letter to me from Sirna Therapeutics
(“Company”), dated February 4, 2006 (“Offer”).

1. I acknowledge that:

a. I have received all cash compensation earned by me, and all other amounts owed to me, through
and as of the effective date of the termination of my employment with the Company (“Termination
Date”); and

b. I have returned to the Company:

	 	•	 	all items of property provided or paid by the Company (or predecessor) for my use
during employment (including but not limited to keys, access badge, computer equipment,
pager, Treo/Blackberry and such other handheld device and equipment, cell phone, credit
and telephone calling cards) with the Company (or predecessor), and
	 
	 	•	 	all documents (paper and electronic) created or received by me during my employment
with the Company (or predecessor), except my personal copies of documents evidencing my
hire, compensation, benefits, stock and stock options, and documents I may have received
as a shareholder of the Company.

c. I understand that I must sign and deliver to the Company this Post-Termination General Release
of All Claims Agreement (“General Release”), and it must become effective and enforceable, within
the applicable time period set forth in Paragraph 8, below.

2. I agree that I fully and forever waive, release, acquit and discharge the Company, and any and
all past, current and future parent, subsidiary and affiliated companies, predecessors and
successors thereto, as well as their respective officers, directors, agents, employees, affiliates,
representatives, shareholders and assigns (collectively, the “Releasees”), from any and all
claims, actions, charges, complaints, grievances and causes of action of whatever nature, whether
now known or unknown, which exist or may in the future exist, that arise from or relate to events,
acts or omissions prior to the Effective Date of this General Release including, but not limited
to, my recruitment, hiring, services to, and employment with the Company and the termination
thereof, such as but not limited to:

	 	•	 	claims for unpaid wages, bonuses, or severance (except pursuant Paragraph 9(c) of my
Offer); claims of breach of contract and of the covenant of good faith and fair dealing,
wrongful termination, violation of public policy, fraud, intentional or negligent
misrepresentation, defamation, personal injury, infliction of emotional distress;
	 
	 	•	 	claims under applicable equal employment opportunity and non discrimination laws such
as Title VII of the 1964 Civil Rights Act, the Equal Pay Act of 1963, the Age
Discrimination in Employment Act (“ADEA”), the Americans with Disabilities Act,
the Civil Rights Act of 1866, the Worker Adjustment Retraining Notification Act, the
Employee Retirement Income Security Act of 1974, the Family Medical Leave Act; and
	 
	 	•	 	claims under any local, state and federal statutory, regulatory or common law relating
to employment,

except any claim I may have for:

a. unemployment pursuant to the terms of applicable state law;

b. workers’ compensation insurance benefits pursuant to Division 4 of the California Labor Code or
comparable provisions of other applicable state law, under the terms of any worker’s compensation
insurance policy or fund of the Company;

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c. continued participation in certain of the Company’s group health benefit plans pursuant to the
terms and conditions of the federal law known as “COBRA,” if applicable, or any applicable state
law counterpart to COBRA;

d. any benefit entitlements vested as the date of my termination, pursuant to written terms of any
applicable ERISA employee benefit plan sponsored by the Company; and

e. any shares of stock and stock options pursuant to the terms of existing stock option, stock
purchase, and/or stock issuance agreement(s) and any addenda or waivers thereto, between me and the
Company.

3. I understand and agree that in furtherance of waiving and releasing “unknown” claims, per
Paragraph 2, above, I waive, release and discharge all rights and benefits conferred on me, if any,
the Section 1542 of the Civil Code of the State of California, or applicable and comparable state
law. I understand that Section 1542 states as follows (parentheticals added):

A general release does not extend to claims which the creditor (i.e., me) does not know or
suspect to exist in his favor at the time of executing the release, which if known by him must
have materially affected his settlement with the debtor (i.e., Releasees).

I understand that this means that, if I later discover facts different from or in addition to those
that I now know or believe to be true, that the waivers, releases and discharges of this General
Release shall be and remain in full force and effect in all respects notwithstanding such different
or additional facts or my later discovery of such facts.

4. I agree that neither the fact nor any aspect of this General Release is intended, or should be
construed at any time, to be an admission of liability or wrongdoing by either myself or by any of
the Releasees.

5. I agree that I will not make any negative or disparaging statements or comments, either as fact
or as opinion, about the Releases including, but not limited to, the services, business, market
position, performance and other similar information concerning the Company and any of the
Releasees.

6. I agree that if any provision, or portion of a provision, of this General Release is, for any
reason, held to be unenforceable, such unenforceability will not affect any other provision (or
portion of a provision) and this General Release shall be construed as if such unenforceable
provision (or portion of provision) had never been contained herein.

7. I understand and acknowledge that, even if I did not sign this General Release, I would still be
bound by existing obligations that survive termination of employment with the Company under the
Proprietary Information and Inventions Assignment Agreement (“PIIA”) I signed in connection with my
employment with the Company.

8. I understand that I cannot sign this General Release any earlier than my Termination Date. I
also understand and agree that:

     a. If I am under age 40 as of my Termination Date, the Effective Date of this General Release
will be the date I have signed and delivered it the Company; provided that such date is no later
than 21 days after the Termination Date.

     b. If I am age 40 or older as of my Termination Date, the Effective Date of this General
Release will be the eighth day after the date I have signed and delivered it the Company; provided
that such date is no later than 21 days after my Termination Date. I also understand that for
seven (7) days after I sign this General Release, I may revoke it and, if I wish to revoke this
General Release, I must deliver written notice of my revocation to the Company, no later than the
seventh day after I have signed this General Release.

c. This General Release, as signed by me, and any revocation pursuant to Paragraph 8.b., above,
should be delivered by U.S. mail, hand or overnight delivery or facsimile to:

Sirna Therapeutics Inc.

185 Berry Street, Suite 6504

San Francisco, CA 94107

Attention: President & CEO

Copy to: V. P. Legal Affairs

d. If this General Release does not become effective and enforceable by the date specified in
Paragraph 8.a. or 8.b., above (as applicable), I shall not be entitled to receive any severance
pursuant to the Offer.

e. If this General Release does become effective and enforceable by the date specified in Paragraph
8.a. or 8.b., above (as applicable), the severance to which I am entitled will commence

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with the pay period in which the Effective Date of this General Release occurs, but will be subject
to my ongoing compliance with the obligations of Section 9(c) of the Offer.

9. In executing this General Release and, allowing it to become effective and enforceable, I
represent and warrant that I am not relying on any statements, representations, negotiations,
promises or agreements that are not expressly set forth in this General Release or in the Offer.
I agree and understand that this General Release contains my entire understanding, and the entire
agreement by me, with respect to the matters covered herein; and that this General Release merges,
cancels, supersedes and replaces all prior statements, representations, negotiations, promises or
agreements relating to the subject matters covered by this General Release that may have been made
by any of the Releasees, except the following agreements and obligations that remain in full force
and effect:

	 	•	 	the Offer;
	 
	 	•	 	those referenced in Paragraphs 2.d., 2.e. and 7., above; and
	 
	 	•	 	any repayment obligation(s) I owe to the Company (if any), as of my Termination Date.

I HAVE READ THIS GENERAL RELEASE; I UNDERSTAND IT AND KNOW THAT I AM GIVING UP IMPORTANT
RIGHTS; 

I AM AWARE OF MY RIGHT TO CONSULT WITH AN ATTORNEY OF MY OWN CHOOSING BEFORE SIGNING THIS
GENERAL RELEASE, AND I HAVE BEEN ENCOURAGED TO UNDERTAKE SUCH CONSULTATION; AND 

I SIGN THIS GENERAL RELEASE FREELY AND VOLUNTARILY, WITHOUT COERCION OR DURESS.

Dated: February 4, 2006

Employee’s Signature:

	 	 	 
	/s/ Gregory L. Weaver	 	 
	 

Gregory Weaver
	 	 

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Attachment C

PROPRIETARY INFORMATION & INVENTIONS ASSIGNMENT AGREEMENT

In consideration of my employment or continued employment by SIRNA THERAPEUTICS, INC. (the
“Company”) in California, and the compensation now and hereafter paid to me, I hereby enter into
this Proprietary Information and Inventions Assignment Agreement (the “Agreement”) and agree as
follows:

 

 

1. Nondisclosure.

     1.1 Recognition of Company’s Rights; Nondisclosure. I understand and acknowledge that my
employment by the Company creates a relationship of confidence and trust with respect to the
Company’s Proprietary Information (defined below) and that the Company has a protectable interest
therein.

     1.2 Proprietary Information. The term “Proprietary Information” shall mean any and all
confidential and/or proprietary knowledge, data or information of the Company, its affiliates,
alliance members, parents and subsidiaries, developers, partners, customers and prospective
customers, whether having existed, now existing, or to be developed during my employment. By way
of illustration but not limitation, “Proprietary Information” includes (a) trade secrets,
inventions, mask works, ideas, processes, formulas, formulations, processes, discoveries, data,
programs, other works of authorship, know-how, improvements, discoveries, developments, designs,
technologies and techniques and any other proprietary technology (hereinafter collectively referred
to as “Inventions”); (b) information regarding research, research and development plans, new
products, manufacturing processes, marketing and selling, business plans, budgets and unpublished
financial statements, licenses, prices and costs, pricing, methods of obtaining business,
forecasts, future plans and potential strategies, financial projections and business strategies,
operational plans, financing and capital-raising plans, activities and agreements, internal
services and operational manuals, methods of conducting business, suppliers and supplier
information, and names, types, quantities and sources of supply materials used or sold by the
Company, purchasing history and plans; (c) information regarding customers and potential customers
of the Company, including customer lists, names, representatives, their needs or desires with
respect to the types of products or services offered by the Company, proposals, bids, contracts and
their contents and parties, the type and quantity of products and services provided or sought to be
provided to customers and potential customers of the Company and other non-public information
relating to customers and potential customers; (d) information regarding any of the Company’s
business partners, joint venturers and their services, including names; representatives, proposals,
bids, contracts and their contents and parties, the type and quantity of products and services
received by the Company, and other non-public information relating to business partners and joint
venturers; (e) information regarding the Company’s employees and consultants (“Service Providers”),
lists of Service Provider names and other information, compensation, performance and skills, and
the Company’s strategies with respect to recruiting, attracting and engaging the services of
Service Providers; (f) valuable confidential business information of the Company that does not
qualify as a trade secret; (g) any other non-public information which a competitor of the Company
could use to the competitive disadvantage of the Company; and (h) any intellectual property
transferred to the Company from its predecessors or their former affiliates. Notwithstanding the
foregoing, it is understood that Proprietary Information excludes information that is generally
known in the trade or industry through no breach of this Agreement or other wrongful act or
omission by me, and nothing in this Agreement prevents me from discussing or disclosing to others
my personal compensation as an employee of the Company.

     1.3 Nondisclosure. At all times during my employment at all times thereafter, I will hold in
strictest confidence and will not disclose, use, lecture upon or publish any of the Company’s
Proprietary Information, except as such disclosure, use or publication may be required in
connection with my work for the Company, or unless the Chief Executive Officer of the Company
expressly authorizes such in writing. I will obtain the Company’s written approval before
publishing or submitting for publication any material (written, verbal, or otherwise) that relates
to my work at the Company and/or incorporates any Proprietary Information. I hereby assign to the
Company any rights I may have or acquire in such Proprietary Information and recognize that all
Proprietary Information shall be the sole property of the Company and its assigns. I will take all
reasonable precautions to prevent the inadvertent or accidental disclosure of the Company’s
Proprietary Information. I understand and agree that the covenants, restrictions and prohibitions
against disclosure of Proprietary Information are in addition to, and not in lieu of, any rights or
remedies which the Company may have available pursuant to the laws of any jurisdiction or at common
law to prevent disclosure of trade secrets or proprietary information, and the enforcement by the
Company of its rights and remedies pursuant to this Agreement shall not be construed as a waiver of
any other rights or available remedies which it may possess in law or equity absent this Agreement.

     1.4 Third Party Information. I understand, in addition, that the Company has received in
confidence and in the future will receive in confidence from third parties, including (without
limitation), affiliates, alliance members, developers and partners of the Company or its
predecessors, confidential and/or proprietary information and data, and trade secrets belonging to
such third parties (“Third Party Information”). During my employment and thereafter, I will hold
Third Party Information in the strictest confidence and will not use it, nor will I disclose it to
anyone (other than Company personnel who need to know such information in connection with their
work for the Company), except in connection with my work for the Company, or unless expressly
authorized in writing by the Chief Executive Officer of the Company.

 

 

			
	Greg Weaver
	 	 February 4, 2006
	Confidential
	 	 

     1.5 No Improper Use of Information of Prior Employers and Others. During my employment by the
Company I will not improperly use or disclose any confidential or proprietary information or trade
secrets, if any, of any former employer or any other person or entity to whom I have an obligation
of confidentiality, and I will not bring onto the premises of the Company any unpublished documents
or any property belonging to any former employer or any other person or entity to whom I have an
obligation of confidentiality unless consented to in writing by that former employer, person or
entity. Notwithstanding the foregoing, it is understood that, at all such times, I am free to use
information that is generally known in the trade or industry through no wrongful act or omission by
me of my obligation of confidentiality to any former employer or other person or entity.

2. Assignment Of Inventions.

     2.1 Proprietary Rights. The term “Proprietary Rights” shall mean all trade secret, patent,
copyright, mask work and other intellectual property rights throughout the world.

     2.2 Prior Inventions. Inventions, if any, patented or unpatented, which I made prior to the
commencement of my employment with the Company are excluded from the scope of this Agreement. If,
in the course of my employment with the Company, I incorporate a Prior Invention into a Company
product, process or machine, the Company is hereby granted and shall have a nonexclusive,
royalty-free, irrevocable, perpetual, worldwide license (with rights to sublicense through multiple
tiers of sublicensees) to make, have made, modify, use and sell such Prior Invention.
Notwithstanding the foregoing, I agree that I will not incorporate, or permit to be incorporated,
Prior Inventions in any Company Inventions without the Company’s prior written consent.

     2.3 Assignment of Inventions. Subject to Section 2.6, I hereby assign and agree to assign in
the future (when any such Inventions or Proprietary Rights are first reduced to practice or first
fixed in a tangible medium, as applicable) to the Company all my right, title and interest in and
to any and all Inventions (and all Proprietary Rights with respect thereto) whether or not
patentable or registrable under copyright or similar statutes, made or conceived or reduced to
practice or learned by me, either alone or jointly with others, during the period of my employment
with the Company. Inventions assignable to the Company, or to a third party as directed by the
Company pursuant to Section 2.6, are hereinafter referred to as “Company Inventions.”

     2.4 Nonassignable Inventions. I recognize that this Agreement will not be deemed to require
assignment of any Invention that, pursuant to applicable law, is not subject to compelled
assignment (“Specific Inventions Law”). I understands that Inventions, whether or not patentable
or protectable by copyright or trade secret, made or conceived, reduced to practice, or learned by
me, not subject to compelled assignment include those that meet each of the following criteria:
(a) are developed entirely on my own time; and (b) are developed without use of any equipment,
supplies, facility or trade secret of the Company; and (c) (i) do not relate, at the time
conceived or reduced to practice, to the Company’s business or its actual or demonstrably
anticipated research or development, or (ii) do not result from any service provided or work
performed by me for the Company.

     2.5 Obligation to Keep Company Informed. During the period of my employment and for one (1)
year after termination of my employment with the Company, I will promptly disclose to the Company
fully and in writing all Inventions authored, conceived or reduced to practice by me, either alone
or jointly with others. In addition, I will promptly disclose to the Company all patent
applications filed by me or on my behalf within one (1) year after termination of employment. At
the time of each such disclosure, I will advise the Company in writing of any Inventions that I
believe fully qualify for protection under the provisions of a Specific Inventions Law; and I will
at that time provide to the Company in writing all evidence necessary to substantiate that belief.
The Company will keep in confidence and will not use for any purpose or disclose to third parties
without my consent any confidential information disclosed in writing to the Company pursuant to
this Agreement relating to Inventions that qualify fully for protection under a Specific Inventions
Law. I will preserve the confidentiality of any Invention that does not fully qualify for
protection under a Specific Inventions Law.

     2.6 Government or Third Party. I also agree to assign all my right, title and interest in and
to any particular Company Invention to a third party, including without limitation the United
States, as directed by the Company.

     2.7 Works for Hire. I acknowledge that all original works of authorship which are made by me
(solely or jointly with others) within the scope of my employment and which are protectable by
copyright are “works made for hire,” pursuant to United States Copyright Act (17 U.S.C., Section
101).

	 	 	 	 	 	 	 
	185 Berry Street, Ste. 6504, San Francisco, CA 94107
	 	Phone: 415-512-7624
	 	Fax: 415-512-7022
	 	http://www.sirna.com

 

 

			
	Greg Weaver
	 	 February 4, 2006
	Confidential
	 	 

     2.8 Enforcement of Proprietary Rights. I will assist the Company in every proper way to
obtain, and from time to time enforce, United States and foreign Proprietary Rights relating to
Company Inventions in any and all countries. To that end I will execute, verify and deliver such
documents and perform such other acts (including appearances as a witness) as the Company may
reasonably request for use in applying for, obtaining, perfecting, evidencing, sustaining and
enforcing such Proprietary Rights and the assignment thereof. In addition, I will execute, verify
and deliver assignments of such Proprietary Rights to the Company or its designee. My obligation
to assist the Company with respect to Proprietary Rights relating to such Company Inventions in any
and all countries shall continue beyond the termination of my employment, but the Company shall
compensate me at a reasonable rate after my termination for the time actually spent by me at the
Company’s request on such assistance.

     2.9 In the event the Company is unable for any reason, after reasonable effort, to secure my
signature on any document needed in connection with the actions specified in the preceding
paragraph, I hereby irrevocably designate and appoint the Company and its duly authorized officers
and agents as my agent and attorney in fact, which appointment is coupled with an interest, to act
for and in my behalf to execute, verify and file any such documents and to do all other lawfully
permitted acts to further the purposes of the preceding paragraph with the same legal force and
effect as if executed by me. I hereby waive and quitclaim to the Company any and all claims, of
any nature whatsoever, which I now or may hereafter have for infringement of any Proprietary Rights
assigned hereunder to the Company.

3. Records. I agree to keep and maintain adequate and current records (in the form of
notes, sketches, drawings and in any other form that may be required by the Company) of all
Proprietary Information developed by me and all Inventions made by me during the period of my
employment at the Company, which records shall be available to and remain the sole property of the
Company at all times.

4. Duty of Loyalty & Best Efforts During Employment. I agree that during the period of my
employment by the Company I will not, without the Company’s express written consent, engage in any
employment or business activity that (i) is competitive in any way with the business, or planned
business, of the Company or (ii) would conflict with, or otherwise interfere with my ability to
satisfactorily perform the duties and responsibilities of, my employment by the Company.

5. No Solicitation of Service Providers or Customers. I agree that during the period of
my employment with the Company, and for the period of one (1) year after the date my employment
with the Company ends for any reason, including but not limited to voluntary termination by me or
involuntary termination by the Company, I will not, as an officer, director, employee, consultant,
owner, partner of another person or entity, or in any other capacity, either directly or through
others:

     5.1 solicit, induce, encourage, or participate, directly or indirectly, in soliciting,
inducing, or encouraging any Service Provider to terminate or reduce his or her relationship with
the Company; or

     5.2 solicit, divert or appropriate or attempt to solicit, divert or appropriate, by use of
Proprietary Information, any customer or prospective customer of the Company with whom I had
contact and/or on whom I had Proprietary Information during my employment with the Company, for the
purpose of selling or providing to that customer or prospective customer any services or products
competitive with those available from the Company.

6. REASONABLENESS OF RESTRICTIONS.

     6.1 I agree that I have read this entire Agreement and understand it. I agree that this
Agreement does not prevent me from earning a living or pursuing my career. I agree that the
restrictions contained in this Agreement are reasonable, proper, and necessitated by the Company’s
legitimate business interests. I represent and agree that I am entering into this Agreement freely
and with knowledge of its contents with the intent to be bound by the Agreement and the
restrictions contained herein.

     6.2 In the event that, any one or more of the restrictions or obligations of Sections 1, 2
and/or 5 of this Agreement shall for any reason be held to be unenforceable for any reason
including, but not limited to, being excessively broad as to duration, scope, activity or subject,
it shall be construed or modified by limiting and reducing it, so as to provide the Company with
the maximum protection of its business interests and yet be enforceable under the applicable law as
it shall then appear.

	 	 	 	 	 	 	 
	185 Berry Street, Ste. 6504, San Francisco, CA 94107
	 	Phone: 415-512-7624
	 	Fax: 415-512-7022
	 	http://www.sirna.com

 

 

			
	Greg Weaver
	 	 February 4, 2006
	Confidential
	 	 

7. No Conflicting Agreement or Obligation. I represent that my performance of all the
terms of this Agreement and as an employee of the Company does not and will not breach any
agreement to keep in confidence information acquired by me in confidence or in trust prior to my
employment by the Company. I have not entered into, and I agree that I shall not in the future
enter into, any agreement either written or oral that conflicts with this Agreement.

8. Return Of Company Property. When I leave the employ of the Company, or during my
employment if so requested by the Company, I will deliver to the Company any and all drawings,
notes, memoranda, specifications, devices, formulas, and documents, together with all copies
thereof, and any other material containing or disclosing any Company Inventions, Third Party
Information or Proprietary Information of the Company. I further agree that any property situated
on the Company’s premises and owned by the Company, including disks and other storage media, filing
cabinets or other work areas, is subject to inspection by Company personnel at any time with or
without notice. Prior to leaving, I will cooperate with the Company in completing and signing the
Company’s termination statement if requested by the Company to do so.

9. LEGAL AND EQUITABLE REMEDIES.

     9.1 I agree that it may be impossible to assess the damages caused by my violation of this
Agreement or any of its terms. I agree that any threatened or actual violation of this Agreement
or any of its terms will constitute immediate and irreparable injury to the Company and the Company
shall have the right to enforce this Agreement and any of its provisions by injunction, specific
performance or other equitable relief, without bond and without prejudice to any other rights and
remedies that the Company may have for a breach or threatened breach of this Agreement.

     9.2 I agree that if the Company is successful in whole or in part in any legal or equitable
action against me under this Agreement, the Company shall be entitled to payment of all costs,
including reasonable attorney’s fees, from me.

     9.3 In the event the Company enforces this Agreement through a court order, I agree that the
restrictions of Section 5 shall remain in effect for a period specified in the order enforcing this
Agreement, and I understand and agree that such period may extend the date specified in Section 5
in order to remedy any period of my violation of Section 5.

10. Notices. Any notices required or permitted hereunder shall be given to the
appropriate party at the address specified below or at such other address as the party shall
specify in writing. Such notice shall be deemed given upon personal delivery to the appropriate
address or if sent by certified or registered mail, three (3) days after the date of mailing.

11. Notification Of New Employer. In the event that I leave the employ of the Company, I
hereby consent to the notification of my new employer of my rights and obligations under this
Agreement.

12. General Provisions.

     12.1 Governing Law. This Agreement will be governed by and construed according to the laws of
the State of California.

     12.2 Severability. Except as provided by Subsection 6.2, in case any one or more of the
provisions, subsections, or sentences contained in this Agreement shall, for any reason, be held to
be invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect the other provisions of this Agreement, and this Agreement shall
be construed as if such invalid, illegal or unenforceable provision had never been contained
herein.

     12.3 Successors and Assigns. This Agreement is for the benefit of the Company, its
successors, assigns, parent corporations, subsidiaries, affiliates, and purchasers, and will be
binding upon my heirs, executors, administrators and other legal representatives.

     12.4 Survival. The provisions of this Agreement shall survive the termination of my
employment, regardless of the reason, and the assignment of this Agreement by the Company to any
successor in interest or other assignee.

     12.5 Employment At-Will. I agree and understand that nothing in this Agreement shall change
my at-will employment status or confer any right with respect to continuation of employment by the
Company, nor shall it

	 	 	 	 	 	 	 
	185 Berry Street, Ste. 6504, San Francisco, CA 94107
	 	Phone: 415-512-7624
	 	Fax: 415-512-7022
	 	http://www.sirna.com

 

 

			
	Greg Weaver
	 	 February 4, 2006
	Confidential
	 	 

interfere in any way with my right or the Company’s right to terminate my employment at any
time, with or without cause or advance notice.

     12.6 Waiver. No waiver by the Company of any breach of this Agreement shall be a waiver of any
preceding or succeeding breach. No waiver by the Company of any right under this Agreement shall
be construed as a waiver of any other right. The Company shall not be required to give notice to
enforce strict adherence to all terms of this Agreement.

     12.7 Advice of Counsel. I ACKNOWLEDGE THAT, IN EXECUTING THIS AGREEMENT, I HAVE HAD THE
OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL. THIS AGREEMENT SHALL NOT BE CONSTRUED
AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.

     12.8 Entire Agreement. The obligations pursuant to Sections 1 and 2 (except Subsection 2.7) of
this Agreement shall apply to any time during which I was previously engaged, or am in the future
engaged, by the Company as a consultant if no other agreement governs nondisclosure of Proprietary
Information and assignment of inventions during such period(s). This Agreement is the final,
complete and exclusive agreement of the parties with respect to the subject matters hereof and this
Agreement supersedes and merges all prior discussions and agreements between me and the Company
with respect to such subject matters.

     12.9 Modification. No modification of or amendment to this Agreement, nor any waiver of any
rights under this Agreement, will be effective unless in writing and signed by the party to be
charged. Any subsequent change or changes in my duties, salary or compensation will not affect the
validity or scope of this Agreement.

     12.10 Effective Date. This Agreement shall be effective as of the first day of my employment
with the Company.

I have read this agreement carefully and understand its terms. I accept and agree to the
terms and conditions of this Agreement:

Dated: February 4, 2006

	 	 	 
	/s/ Gregory L. Weaver

	 	 
	 

(Signature)

	 	 
	 
	 	 
	Gregory L. Weaver
	 	 
	 

(Printed Name)

	 	 

	 	 	 	 	 	 	 
	185 Berry Street, Ste. 6504, San Francisco, CA 94107
	 	Phone: 415-512-7624
	 	Fax: 415-512-7022
	 	http://www.sirna.com

 

 

			
	Greg Weaver
	 	 February 4, 2006
	Confidential
	 	 

Attachment D

RELOCATION SUMMARY

Sirna Executive Relocation Policy Summary sheet

	 	 	 
	Relocation Item	 	Sirna Policy
	Home Sale Support

	 	Employee fully responsible for sale of home.
	 
	 	 
	Home Sale Expenses

	 	Reasonable and customary costs associated with home sale including,
appraisal, real estate fees up to 6%, and inspections, but in no
event shall the real estate fees be paid for that portion of the
sale price exceeding the following amounts:

CEO: $3MM

Officers & SVPs: $2MM

VPs: $1MM
	 
	 	 
	Loss Protection

	 	None
	 
	 	 
	Bridge Loan

	 	None
	 
	 	 
	Home Finding Trips

	 	2 Trips with reasonable expenses
	 
	 	 
	Temporary Housing in

the San Francisco Bay

Area

	 	Up to 2 months of reasonable expenses for Mr. Weaver and up to an
additional 4 months for Mr. Weaver’s family upon their respective
relocation. Reasonable expenses shall include reasonable
rent/lease payments (to pre-approved in writing by the CEO) and do
not include meals, laundry and other expenses that would have to be
incurred at primary residence.
	 
	 	 
	Temporary Living Trips

Home

	 	None
	 
	 	 
	Home Purchase

	 	Reimbursable new home purchase costs set forth in the policy,
including a origination fee of up to 3%, provided however this loan
origination fee is not be used to lower the interest rate below the
rate under the employee’s existing mortgage
	 
	 	 
	Transportation Costs
and storage

	 	•    Company approves individual choice of moving company.

•    Reasonable storage costs for up to 2 months for Mr.
Weaver’s relocation and an additional period of up to 4 months in
connection with relocation of Mr. Weaver’s family.

	 
	 	 
	Final Move

	 	Reasonable Expenses
	 
	 	 
	Spousal Support

	 	None
	 
	 	 
	Miscellaneous Allowance

	 	One half month of base salary at the time of Mr. Weaver’s relocation
	 
	 	 
	State of CA Incentive
Program

	 	To the extent that any expenses under the Relocation Policy can be
reimbursed through the State of CA Incentive Program, the employee
is required to utilize such reimbursement in lieu of reimbursement
by Sirna.
	 
	 	 
	Gross Up

	 	All expenses under the Relocation Policy that have no off-setting
tax deduction for the employee.
	 
	 	 
	Termination

	 	Should Mr. Weaver voluntarily separate from the Company or if the
employment is terminated for cause, within 1 year of the completion
date of the move/relocation then all costs incurred by Company in
connection with the move/relocation are to be fully and promptly
reimbursed by the employee.

	 	 	 	 	 	 	 
	185 Berry Street, Ste. 6504, San Francisco, CA 94107
	 	Phone: 415-512-7624
	 	Fax: 415-512-7022
	 	http://www.sirna.com

 

 

			
	Greg Weaver
	 	 February 4, 2006
	Confidential
	 	 

Reimbursable New Home Purchase Costs

     The Company will reimburse normal, non-recurring closing costs for items which, by local
custom, are normally paid by the buyer. The following is a list of reimbursable closing costs:

	 	•	 	Mortgage fees
	 
	 	•	 	New loan origination fee, the equivalent of the origination on prior residence loan
up to three percent (3%) of the new mortgage balance
	 
	 	•	 	Credit report
	 
	 	•	 	Pest inspection (if required)
	 
	 	•	 	Survey (if required)
	 
	 	•	 	Title examination and title insurance (lender’s coverage); owners coverage is
reimbursable only if mandated by state or local laws
	 
	 	•	 	Abstract/title search
	 
	 	•	 	Attorney’s fees
	 
	 	•	 	Escrow fees
	 
	 	•	 	Notary fees
	 
	 	•	 	Recording fees
	 
	 	•	 	Settlement or closing fees
	 
	 	•	 	Tax service fees
	 
	 	•	 	Home inspection/engineering report ordered by purchaser
	 
	 	•	 	Appraisal ordered by purchaser
	 
	 	•	 	Mortgage and deed tax
	 
	 	•	 	Transfer fee (purchaser’s portion)
	 
	 	•	 	Home or component warranties of any type

Non-reimbursable New Home Closing Costs

     A
guideline of closing cost and expenses not eligible for reimbursement include:

	 	•	 	Real estate and personal property taxes
	 
	 	•	 	Hazard, fire, flood and any other type of homeowner’s insurance
	 
	 	•	 	Mortgage insurance
	 
	 	•	 	Mortgage insurance application fees
	 
	 	•	 	Pro-rated waste collection fee
	 
	 	•	 	Improvement assessments by State/City/County taxing authorities
	 
	 	•	 	Title insurance owner’s policy (where not mandated by state or local laws)
	 
	 	•	 	Prepaid or pro-rated interest on mortgage
	 
	 	•	 	Pro-rated rent
	 
	 	•	 	Pro-rated water, electric, gas billings, etc.
	 
	 	•	 	VA/FHA points or any other discount points or costs
normally charged to the seller
	 
	 	•	 	Condominium or association fees

	 	 	 	 	 	 	 
	185 Berry Street, Ste. 6504, San Francisco, CA 94107
	 	Phone: 415-512-7624
	 	Fax: 415-512-7022
	 	http://www.sirna.comexv10w2

 

Exhibit 10.2

LEASE AGREEMENT

     THIS LEASE AGREEMENT (this “Lease”) is made this 8th day of February, 2006,
between ARE-SAN FRANCISCO NO. 26, LLC, a Delaware limited liability company (“Landlord”), and SIRNA
THERAPEUTICS, INC., a Delaware corporation (“Tenant”).

	 	 	 
	Building:

	 	The to be constructed building to be known as1700 Owens Street, San
Francisco, California
	 
	 	 
	Premises:

	 	The entire fourth floor of the Building, containing approximately
33,042 rentable square feet, as determined by Landlord, as shown on Exhibit A-1
(the “Fourth Floor Premises”), and that certain portion of the fifth floor of
the Building, containing approximately 3,714 rentable square feet, as
determined by Landlord, as shown on Exhibit A-2 (the “Fifth Floor Premises”).
	 
	 	 
	Project:

	 	The real property on which the Building in which the Premises will be
located, together with all improvements thereon and appurtenances thereto as
described on Exhibit B.
	 
	 	 
	Base Rent:

	 	$3.00 per rentable square foot per month for the Fourth Floor
Premises and $2.50 per rentable square foot per month for the Fifth Floor
Premises, all subject to adjustment as provided for in Section 4 hereof.
	 
	 	 
	Rentable Area of
Premises: 36,756 sq. ft., subject to adjustment as provided for in the last paragraph of Section 5 hereof.
	 
	 	 
	Rentable Area of Project: 157,340 sq. ft., subject to adjustment as provided for in the last paragraph of Section 5 hereof.
	 
	 	 
	Tenant’s Share of Operating Expenses: 23.36%, subject to adjustment as provided for in the last paragraph of Section 5 hereof.
	 
	 	 
	Security Deposit: $889,029.00
	 
	 	 
	Rent Adjustment Percentage: Greater of 3% or the CPI Adjustment Percentage (as hereinafter defined) not to exceed 6%
	 
	 	 
	Target Commencement Date: November 15, 2006
	 
	 	 
	Base Term:

	 	Beginning on the Commencement Date and ending 84
months from the first day of the first full month
following the Commencement Date (as defined in
Section 2 hereof).

	 	 	 
	Permitted Use:

	 	Research and development laboratory
(including, without limitation, laboratory uses for
chemistry and biology), related office and other
related uses consistent with the character of the
Project and otherwise in compliance with the
provisions of Section 7 hereof.

	 	 	 
	Address for Rent Payment:

	 	Landlord’s Notice Address:
	385 E. Colorado Boulevard, Suite 299

	 	385 E. Colorado Boulevard, Suite 299
	Pasadena, CA 91101

	 	Pasadena, CA 91101
	Attention: Accounts Receivable

	 	Attention: Corporate Secretary
	 
	 	 
	Tenant’s Notice Address:
	 	 

 

 

			
	Net Multi-Tenant Office/Laboratory
	 	1700 Owens/Sirna — Page 2

2950 Wilderness Place

Boulder, Colorado 80301

Attention: Bharat Chowrira

The following Exhibits and Addenda are attached hereto and incorporated herein by this reference:

	 	 	 
	[X]
EXHIBIT A — PREMISES DESCRIPTION

	 	[X] EXHIBIT B — DESCRIPTION OF PROJECT
	[X] EXHIBIT C — WORK LETTER

	 	[X] EXHIBIT D
— COMMENCEMENT DATE
	[X]
EXHIBIT E — RULES AND REGULATIONS

	 	[X] EXHIBIT F — TENANT’S PERSONAL PROPERTY
	[X] EXHIBIT G — TENANT’S SCOPE OF WORK

	 	[X] EXHIBIT H — BASE BUILDING
	[X] EXHIBIT I — PARKING

	 	[X] EXHIBIT J — MISSION BAY REQUIREMENTS
	[X] EXHIBIT K — SUCCESSOR PROJECT LABOR AGREEMENT
	 	 

     1. Lease of Premises. Upon and subject to all of the terms and conditions hereof, Landlord
hereby leases the Premises to Tenant and Tenant hereby leases the Premises from Landlord. The
portions of the Project which are for the non-exclusive use of tenants of the Project are
collectively referred to herein as the “Common Areas.” Landlord reserves the right to modify
Common Areas, provided that such modifications do not materially adversely affect Tenant’s use of
the Premises for the Permitted Use.

     2. Delivery; Acceptance of Premises; Commencement Date. Landlord shall construct the Building
in general conformance with the Construction Drawings dated August 5, 2005, prepared by Dowler
Gruman Associates. Landlord shall have the right to modify such Construction Drawings in Landlord’s
sole discretion; provided, however, that such modifications do not preclude or significantly
restrict Tenant’s use of the Premises for the Permitted Use and further provided that Landlord
shall notify Tenant of any material modifications to the Construction Drawings materially impacting
Tenant’s use of the Premises for the Permitted Use. The Building shell shall include the items
described on Exhibit H attached hereto. Landlord shall use reasonable efforts to deliver the
Premises to Tenant on or before the Target Commencement Date, with Landlord’s Work Substantially
Completed (“Delivery” or “Deliver”). If Landlord fails to timely Deliver the Premises, Landlord
shall not be liable to Tenant for any loss or damage resulting therefrom, and this Lease shall not
be void or voidable except as provided herein. If Landlord does not Deliver the Premises within 6
months of the Target Commencement Date for any reason other than Force Majeure Delays and Tenant
Delays, this Lease may be terminated by Landlord or Tenant by written notice to the other, and, if
so terminated by either: (a) the Security Deposit, or any balance thereof (i.e., after deducting
therefrom all amounts to which Landlord is entitled under the provisions of this Lease), shall be
returned to Tenant, and (b) neither Landlord nor Tenant shall have any further rights, duties or
obligations under this Lease, except with respect to provisions which expressly survive termination
of this Lease. As used herein, the terms “Landlord’s Work,” “Tenants’ Work,” "Force Majeure
Delays,” "Tenant Delays” and “Substantially Completed” shall have the meanings set forth for such
terms in the Work Letter. If neither Landlord nor Tenant elects to void this Lease within 10
business days of the lapse of such 9 month period, such right to void this Lease shall be waived
and this Lease shall remain in full force and effect.

     The “Commencement Date” shall be the earlier of: (i) the date Landlord Delivers the Premises
to Tenant; and (ii) the date Landlord could have Delivered the Premises but for Tenant Delays.
Upon request of Landlord, Tenant shall execute and deliver a written acknowledgment of the
Commencement Date and the expiration date of the Term when such are established in the form of the
“Acknowledgement of Commencement Date” attached to this Lease as Exhibit D; provided,
however, Tenant’s failure to execute and deliver such acknowledgment shall not affect
Landlord’s rights hereunder. The “Term” of this Lease shall be the Base Term, as defined above on
the first page of this Lease.

     Except as expressly set forth in this Lease and as set forth in the Work Letter, if
applicable: (i) Tenant shall accept the Premises in their condition as of the Commencement Date,
subject to all applicable Legal Requirements (as defined in Section 7 hereof); (ii)
Landlord shall have no obligation for

 

 

			
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any defects in the Premises; and (iii) Tenant’s taking possession of the Premises shall be
conclusive evidence that Tenant accepts the Premises and that the Premises were in good condition
at the time possession was taken. Any occupancy of the Premises by Tenant before the Commencement
Date shall be subject to all of the terms and conditions of this Lease.

     Tenant agrees and acknowledges that neither Landlord nor any agent of Landlord has made any
representation or warranty with respect to the condition of all or any portion of the Premises or
the Project, and/or the suitability of the Premises or the Project for the conduct of Tenant’s
business, and Tenant waives any implied warranty that the Premises or the Project are suitable for
the Permitted Use. This Lease constitutes the complete agreement of Landlord and Tenant with
respect to the subject matter hereof and supersedes any and all prior representations, inducements,
promises, agreements, understandings and negotiations which are not contained herein. Landlord in
executing this Lease does so in reliance upon Tenant’s representations, warranties, acknowledgments
and agreements contained herein.

     3. Rent.

     (a) Base Rent. The first month’s Base Rent shall be due and payable on delivery of an
executed copy of this Lease to Landlord. Tenant shall pay to Landlord in advance, without demand,
abatement, deduction or set-off, monthly installments of Base Rent on or before the first day of
each calendar month during the Term hereof, in lawful money of the United States of America, at the
office of Landlord for payment of Rent set forth above, or to such other person or at such other
place as Landlord may from time to time designate in writing. Payments of Base Rent for any
fractional calendar month shall be prorated. The obligation of Tenant to pay Base Rent and other
sums to Landlord and the obligations of Landlord under this Lease are independent obligations.
Tenant shall have no right at any time to abate, reduce, or set-off any Rent (as defined in
Section 5) due hereunder except for any abatement as may be expressly provided in this
Lease

     (b) Additional Lump Sump Base Rent Payments. As additional Base Rent, Tenant shall make the
following lump sum payments to Landlord: (i) $222,500 on January 1, 2008; and (ii) $222,500 on
January 1, 2009.

     (c) Additional Rent. In addition to Base Rent, Tenant agrees to pay to Landlord as additional
rent (“Additional Rent”): (i) Tenant’s Share of “Operating Expenses” (as defined in Section
5), and (ii) any and all other amounts Tenant assumes or agrees to pay under the provisions of
this Lease, including, without limitation, any and all other sums that may become due by reason of
any default of Tenant or failure to comply with the agreements, terms, covenants and conditions of
this Lease to be performed by Tenant, after any applicable notice and cure period.

     4. Base Rent Adjustments.

     (a) Base Rent for the Fourth Floor Premises shall be increased: (i) on the first anniversary
of the Commencement Date from $3.00 per rentable square foot per month to $3.50 per rentable square
foot per month; and (ii) on the second anniversary of the Commencement Date from $3.50 per rentable
square foot per month to $3.75 per rentable square foot per month. Base Rent for the Fifth Floor
Premises shall be increased: (i) on the first anniversary of the Commencement Date from $2.50 per
rentable square foot per month to $2.58 per rentable square foot per month; and (ii) on the second
anniversary of the Commencement Date from $2.58 per rentable square foot per month to $2.67 per
rentable square foot per month.

     (b) Annual CPI Adjustments. Commencing on the 3rd anniversary of the Commencement
Date and on each anniversary thereafter (each an “Adjustment Date”), Base Rent shall be increased
by multiplying the Base Rent payable immediately before such Adjustment Date by the Rent Adjustment
Percentage and adding the resulting amount to the Base Rent payable immediately before such
Adjustment Date. Base Rent, as so adjusted, shall thereafter be due as provided herein. Base Rent

 

 

			
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adjustments
for any fractional calendar month shall be prorated. “CPI Adjustment Percentage”
means (i) a fraction, stated as a percentage, the numerator of which shall be the Index for the
calendar month 3 months before the month in which the Adjustment Date occurs, and the denominator
of which shall be the Index for the calendar month 3 months before the last Adjustment Date or, if
no prior Base Rent adjustment has been made, 3 months before the second anniversary of the
Commencement Date, less (ii) 1.00. “Index” means the “Consumer Price Index-All Urban Consumers-San
Francisco-Oakland-San Jose, All Items” compiled by the U.S. Department of Labor, Bureau of Labor
Statistics, (1982-84 = 100). If a substantial change is made in the Index, the revised Index shall
be used, subject to such adjustments as Landlord may reasonably deem appropriate in order to make
the revised Index comparable to the prior Index. If the Bureau of Labor Statistics ceases to
publish the Index, then the successor or most nearly comparable index, as reasonably determined by
Landlord, shall be used, subject to such adjustments as Landlord may reasonably deem appropriate in
order to make the new index comparable to the Index. Landlord shall give Tenant written notice
indicating the Base Rent, as adjusted pursuant to this Section, and the method of computation and
Tenant shall pay to Landlord an amount equal to any underpayment of Base Rent by Tenant within 15
days of Landlord’s notice to Tenant. Failure to deliver such notice shall not reduce, abate, waive
or diminish Tenant’s obligation to pay the adjusted Base Rent.

     5. Operating Expense Payments. Landlord shall deliver to Tenant a written estimate of
Operating Expenses for each calendar year during the Term (the “Annual Estimate”), which may be
revised by Landlord from time to time during such calendar year. Commencing on the Commencement
Date and thereafter on the first day of each month of the Term, Tenant shall pay Landlord an amount
equal to 1/12th of Tenant’s Share of the Annual Estimate. Payments for any fractional
calendar month shall be prorated.

     The term “Operating Expenses” means all costs and expenses of any kind or description
whatsoever incurred or accrued each calendar year by Landlord with respect to the Project
(including, without duplication, Taxes (as defined in Section 9), capital repairs and
improvements amortized over the lesser of 10 years and the useful life of such capital items, and
the costs of Landlord’s third party property manager in the amount of 3.0% of Base Rent or, if
there is no third party property manager, administration rent in the amount of 3.0% of Base Rent),
excluding only:

     (a) the original construction costs of the Project and renovation prior to the date of the
Lease and costs of correcting defects in such original construction or renovation;

     (b) capital expenditures for expansion of the Project;

     (c) interest, principal payments of Mortgage (as defined in Section 27) debts of
Landlord, financing costs and amortization of funds borrowed by Landlord, whether secured or
unsecured and all payments of base rent (but not taxes or operating expenses) under any ground
lease or other underlying lease of all or any portion of the Project;

     (d) depreciation of the Project (except for capital improvements, the cost of which are
includable in Operating Expenses);

     (e) advertising, legal and space planning expenses and leasing commissions and other costs and
expenses incurred in procuring and leasing space to tenants for the Project, including any leasing
office maintained in the Project, free rent and construction allowances for tenants;

     (f) legal and other expenses incurred in the negotiation or enforcement of leases;

     (g) completing, fixturing, improving, renovating, painting, redecorating or other work, which
Landlord pays for or performs for other tenants within their premises, and costs of correcting
defects in such work;

     (h) costs of utilities outside normal business hours sold to tenants of the Project;

 

 

			
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     (i) costs to be reimbursed by other tenants of the Project or Taxes to be paid directly by
Tenant or other tenants of the Project, whether or not actually paid;

     (j) salaries, wages, benefits and other compensation paid to officers and employees of
Landlord who are not assigned in whole or in part to the operation, management, maintenance or
repair of the Project;

     (k) general organizational, administrative and overhead costs relating to maintaining
Landlord’s existence, either as a corporation, partnership, or other entity, including general
corporate, legal and accounting expenses;

     (l) costs (including attorneys’ fees and costs of settlement, judgments and payments in lieu
thereof) incurred in connection with disputes with tenants, other occupants, or prospective
tenants, and costs and expenses, including legal fees, incurred in connection with negotiations or
disputes with employees, consultants, management agents, leasing agents, purchasers or mortgagees
of the Building;

     (m) costs incurred by Landlord due to the violation by Landlord, its employees, agents or
contractors or any tenant of the terms and conditions of any lease of space in the Project or any
Legal Requirement (as defined in Section 7);

     (n) penalties, fines or interest incurred as a result of Landlord’s inability or failure to
make payment of Taxes and/or to file any tax or informational returns when due, or from Landlord«’s
failure to make any payment of Taxes required to be made by Landlord hereunder before delinquency;

     (o) overhead and profit increment paid to Landlord or to subsidiaries or affiliates of
Landlord for goods and/or services in or to the Project to the extent the same exceeds the costs of
such goods and/or services rendered by unaffiliated third parties on a competitive basis;

     (p) costs of Landlord’s charitable or political contributions, or of fine art maintained at
the Project;

     (q) costs in connection with services (including electricity), items or other benefits of a
type which are not standard for the Project and which are not available to Tenant without specific
charges therefor, but which are provided to another tenant or occupant of the Project, whether or
not such other tenant or occupant is specifically charged therefor by Landlord;

     (r) costs incurred in the sale or refinancing of the Project;

     (s) net income taxes of Landlord or the owner of any interest in the Project, franchise,
capital stock, gift, estate or inheritance taxes or any federal, state or local documentary taxes
imposed against the Project or any portion thereof or interest therein;

     (t) any expenses otherwise includable within Operating Expenses to the extent actually
reimbursed by persons other than tenants of the Project under leases for space in the Project;

     (u) Landlord’s earthquake-related insurance deductibles but only to the extent that Tenant’s
Share of such deductibles exceed $100,000. Tenant shall have the right to elect to fully amortize
(with annualized interest on the unamortized amount at the lesser of 10% or the maximum rate
permitted by law in connection with this Lease) Tenant’s Share of such deductibles over the greater
of the then remaining number of months in the Term of the Lease or 18 months and such payments
shall be due on the first day of each month for the balance of the Term; and

     (v) the costs of any Phase I or similar non-invasive environmental audits conducted by
Landlord with respect to the Premises or the Project.

 

 

			
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     Within 90 days after the end of each calendar year (or such longer period as may be reasonably
required), Landlord shall furnish to Tenant a statement (an “Annual Statement”) showing in
reasonable detail: (a) the total and Tenant’s Share of actual Operating Expenses for the previous
calendar year, and (b) the total of Tenant’s payments in respect of Operating Expenses for such
year. If Tenant’s Share of actual Operating Expenses for such year exceeds Tenant’s payments of
Operating Expenses for such year, the excess shall be due and payable by Tenant as Rent within 30
days after delivery of such Annual Statement to Tenant. If Tenant’s payments of Operating Expenses
for such year exceed Tenant’s Share of actual Operating Expenses for such year Landlord shall pay
the excess to Tenant within 30 days after delivery of such Annual Statement, except that after the
expiration, or earlier termination of the Term or if Tenant is delinquent in its obligation to pay
Rent, Landlord shall pay the excess to Tenant after deducting all other amounts due Landlord.

     The Annual Statement shall be final and binding upon Tenant unless Tenant, within 30 days
after Tenant’s receipt thereof, shall contest any item therein by giving written notice to
Landlord, specifying each item contested and the reason therefor. If, during such 30 day period,
Tenant reasonably and in good faith questions or contests the accuracy of Landlord’s statement of
Tenant’s Share of Operating Expenses, Landlord will provide Tenant with access to Landlord’s books
and records relating to the operation of the Project and such information as Landlord reasonably
determines to be responsive to Tenant’s questions (the “Expense Information”). If after Tenant’s
review of such Expense Information, Landlord and Tenant cannot agree upon the amount of Tenant’s
Share of Operating Expenses, then Tenant shall have the right to have an independent public
accounting firm selected by Tenant from among the 4 largest in the United States, working pursuant
to a fee arrangement other than a contingent fee (at Tenant’s sole cost and expense) and approved
by Landlord (which approval shall not be unreasonably withheld or delayed), audit and/or review the
Expense Information for the year in question (the “Independent Review”). The results of any such
Independent Review shall be binding on Landlord and Tenant. If the Independent Review shows that
the payments actually made by Tenant with respect to Operating Expenses for the calendar year in
question exceeded Tenant’s Share of Operating Expenses for such calendar year, Landlord shall at
Landlord’s option either (i) credit the excess amount to the next succeeding installments of
estimated Operating Expenses or (ii) pay the excess to Tenant within 30 days after delivery of such
statement, except that after the expiration or earlier termination of this Lease or if Tenant is
delinquent in its obligation to pay Rent, Landlord shall pay the excess to Tenant after deducting
all other amounts due Landlord. If the Independent Review shows that Tenant’s payments with
respect to Operating Expenses for such calendar year were less than Tenant’s Share of Operating
Expenses for the calendar year, Tenant shall pay the deficiency to Landlord within 30 days after
delivery of such statement. If the Independent Review shows that Tenant has overpaid with respect
to Operating Expenses by more than 5% then Landlord shall reimburse Tenant for all costs incurred
by Tenant for the Independent Review. Operating Expenses for the calendar years in which Tenant’s
obligation to share therein begins and ends shall be prorated. Notwithstanding anything set forth
herein to the contrary, if the Building is not at least 95% occupied on average during any year of
the Term, Tenant’s Share of Operating Expenses for such year shall be computed as though the
Building had been 95% occupied on average during such year.

     Landlord shall, within 120 days after Substantial Completion of the Tenant Improvements, cause
the rentable square footage of the Premises and the Building to be measured in accordance with the
1996 Standard Method of Measuring Floor Area in Office Buildings as adopted by the Building Owners
and Managers Association (ANSI/BOMA Z65.1-1996). A copy of the letter or report from Landlord’s
architect or engineer setting forth the Rentable Area of the Premises and the Building, together
with all documentary support therefor, shall be furnished to Tenant. If the actual square footage
of the Premises and Building deviates from the amount specified in the definitions of “Premises”,
“Rentable Area of Premises” and “Rentable Area of Project” on page 1 of this Lease, then, promptly
following such measurement, this Lease shall be amended so as to (i) reflect the actual square
footage thereof in the definitions of “Premises”, “Rentable Area of Premises” and “Rentable Area of
Project”, and (ii) appropriately adjust the amount set forth in the definition of “Tenant’s Share
of Operating Expenses” which was calculated based on the estimated square footage of the Premises
and the Building; provided, however, that in no event shall the actual square footage of the
Premises (and the related calculation of Tenant’s Share of Operating Expenses) change, as a result
of such measurement, by more than 1,000

 

 

			
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square feet from that set forth on Page 1 of this Lease. The results of the measurement
provided for in the first sentence of this paragraph shall conclusively be deemed to be the
rentable square footage of the Premises shall not be subject to further remeasurement. Tenant’s
Share of Operating Expenses shall be subject to further adjustment for changes in the physical size
of the Building or the Project occurring thereafter. If Landlord has a reasonable basis for doing
so, Landlord may equitably increase Tenant’s Share for any item of expense or cost reimbursable by
Tenant that relates to a repair, replacement, or service that benefits only the Premises or only a
portion of the Project that includes the Premises or that varies with occupancy or use. Landlord
agrees to use reasonable efforts to include the foregoing sentence or a provision similar thereto
in other tenant leases at the Project. Base Rent, Tenant’s Share of Operating Expenses and all
other amounts payable by Tenant to Landlord hereunder are collectively referred to herein as
“Rent.”

     6. Security Deposit. Tenant shall deposit with Landlord, upon delivery of an executed copy
of this Lease to Landlord, a security deposit (the “Security Deposit”) for the performance of all
of Tenant’s obligations hereunder in the amount set forth on page 1 of this Lease, which Security
Deposit shall be in the form of an unconditional and irrevocable letter of credit (the “Letter of
Credit”): (i) in form and substance satisfactory to Landlord, (ii) naming Landlord as beneficiary,
(iii) expressly allowing Landlord to draw upon it at any time from time to time by delivering to
the issuer notice that Landlord is entitled to draw thereunder, (iv) issued by an FDIC-insured
financial institution satisfactory to Landlord, and (v) redeemable by presentation of a sight draft
in the state of Landlord’s choice. If Tenant does not provide Landlord with a substitute Letter of
Credit complying with all of the requirements hereof at least 10 days before the stated expiration
date of any then current Letter of Credit, Landlord shall have the right to draw the full amount of
the current Letter of Credit and hold the funds drawn in cash without obligation for interest
thereon as the Security Deposit. The Security Deposit shall be held by Landlord as security for
the performance of Tenant’s obligations under this Lease. The Security Deposit is not an advance
rental deposit or a measure of Landlord’s damages in case of Tenant’s default. Upon each
occurrence of a Default (as defined in Section 20), Landlord may use all or any part of the
Security Deposit to pay delinquent payments due under this Lease, and the cost of any damage,
injury, expense or liability caused by such Default, without prejudice to any other remedy provided
herein or provided by law. Upon any such use of all or any portion of the Security Deposit, Tenant
shall pay Landlord on demand the amount that will restore the Security Deposit to the amount set
forth on page 1 of this Lease. Tenant hereby waives the provisions of any law, now or hereafter in
force, which provide that Landlord may claim from a security deposit only those sums reasonably
necessary to remedy defaults in the payment of Rent, to repair damage caused by Tenant or to clean
the Premises, it being agreed that Landlord may, in addition, claim those sums reasonably necessary
to compensate Landlord for any other loss or damage, foreseeable or unforeseeable, caused by the
act or omission of Tenant or any officer, employee, agent or invitee of Tenant. Upon bankruptcy or
other debtor-creditor proceedings against Tenant, the Security Deposit shall be deemed to be
applied first to the payment of Rent and other charges due Landlord for periods prior to the filing
of such proceedings. Upon any such use of all or any portion of the Security Deposit, Tenant
shall, within 5 days after demand from Landlord, restore the Security Deposit to its original
amount. If Tenant shall fully perform every provision of this Lease to be performed by Tenant, the
Security Deposit, or any balance thereof (i.e., after deducting therefrom all amounts to which
Landlord is entitled under the provisions of this Lease), shall be returned to Tenant (or, at
Landlord’s option, to the last assignee of Tenant’s interest hereunder) within 60 days after the
expiration or earlier termination of this Lease. Notwithstanding anything to the contrary
contained herein, Tenant shall have the right to deliver 50% of the Security Deposit to Landlord
concurrently with Tenant’s delivery of an executed copy of this Lease to Landlord and the remaining
50% of the Security Deposit within 10 business days after the Commencement Date.

     Landlord shall, upon Tenant’s written request, reduce the Security Deposit by $74,085.75 each
calendar year during the Term of this Lease; provided, however, that at the time of each request:
(i) Tenant provides Landlord with written evidence reasonably satisfactory to Landlord that Tenant
has a market capitalization of at least $500,000,000, and (ii) Tenant has not been in default under
this Lease. Notwithstanding anything to the contrary contained in the preceding sentence, in no
event shall the Security Deposit be reduced to an amount of less than $222,257.25. After each
reduction, the amount of the Security Deposit then being held by Landlord shall be the “Reduced
Security Deposit”. The

 

 

			
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reduction of the Security Deposit shall be effectuated either by Tenant providing Landlord with a new Letter
of Credit and Landlord then returning the then current Letter of Credit to Tenant or Landlord
drawing down on the then current Letter of Credit in the amount of the applicable reduction and
paying the draw down amount to Tenant. If Landlord returns to Tenant any portion of the Security
Deposit in accordance with this Section, then from and after the date such monies are returned to
Tenant, the “Security Deposit” shall be deemed to be the Reduced Security Deposit for all purposes
of this Lease.

     If Landlord transfers its interest in the Project or this Lease, Landlord shall either (a)
transfer any Security Deposit then held by Landlord to a person or entity assuming Landlord’s
obligations under this Section 6, or (b) return to Tenant any Security Deposit then held by
Landlord and remaining after the deductions permitted herein. Upon such transfer to such
transferee or the return of the Security Deposit to Tenant, Landlord shall have no further
obligation with respect to the Security Deposit, and Tenant’s right to the return of the Security
Deposit shall apply solely against Landlord’s transferee. The Security Deposit is not an advance
rental deposit or a measure of Landlord’s damages in case of Tenant’s default. Landlord’s
obligation respecting the Security Deposit is that of a debtor, not a trustee, and no interest
shall accrue thereon.

     7. Use. The Premises shall be used solely for the Permitted Use set forth in the basic lease
provisions on page 1 of this Lease, and in compliance with all laws, orders, judgments, ordinances,
regulations, codes, directives, permits, licenses, covenants and restrictions now or hereafter
applicable to the Premises, and to the use and occupancy thereof, including, without limitation,
the Americans With Disabilities Act, 42 U.S.C. § 12101, et seq. (together with the regulations
promulgated pursuant thereto, “ADA”) (collectively, “Legal Requirements” and each, a “Legal
Requirement”). Tenant shall, upon 5 days’ written notice from Landlord, discontinue any use of the
Premises which is declared by any Governmental Authority (as defined in Section 9) having
jurisdiction to be a violation of a Legal Requirement. Tenant will not use or permit the Premises
to be used for any purpose or in any manner that would void Tenant’s or Landlord’s insurance,
increase the insurance risk, or cause the disallowance of any sprinkler or other credits. Tenant
shall not permit any part of the Premises to be used as a “place of public accommodation”, as
defined in the ADA or any similar legal requirement. Tenant shall reimburse Landlord promptly upon
demand for any additional premium charged for any such insurance policy by reason of Tenant’s
failure to comply with the provisions of this Section or otherwise caused by Tenant’s use and/or
occupancy of the Premises; provided, however, that Landlord shall provide Tenant with reasonable
evidence that the demand for additional premium is a result of Tenant’s failure to comply with the
provisions of this Section or otherwise caused by Tenant’s use and/or occupancy of the Premises.
Tenant will use the Premises in a safe and proper manner and will not commit or permit waste,
overload the floor or structure of the Premises, subject the Premises to use that would damage the
Premises or obstruct or interfere with the rights of Landlord or other tenants or occupants of the
Project, including conducting or giving notice of any auction, liquidation, or going out of
business sale on the Premises, or using or allowing the Premises to be used for any unlawful
purpose. Nothing contained in the preceding sentence is intended to preclude reinforcement, if
necessary, of the floor structure as part of the Tenant Improvements or preclude the use of any
equipment shown on the TI Construction Drawings (as defined in the Work Letter). Tenant shall cause
any equipment or machinery to be installed in the Premises so as to reasonably prevent sounds or
vibrations from the Premises from extending into Common Areas, or other space in the Project.
Tenant shall not place any machinery or equipment weighing 500 pounds or more in or upon the
Premises or transport or move such items through the Common Areas of the Project or in the Project
elevators without the prior written consent of Landlord. Tenant shall not, without the prior
written consent of Landlord, use the Premises in any manner which will require ventilation, air
exchange, heating, gas, steam, electricity or water beyond the existing capacity of the Project as
proportionately allocated to the Premises based upon Tenant’s Share as usually furnished for the
Permitted Use.

     Following the Commencement Date (i.e. Substantial Completion of the Tenant Improvements),
Tenant, at its sole expense, shall make any alterations or modifications to the interior or the
exterior of the Premises or the Project that are required by Legal Requirements (including, without
limitation, compliance of the Premises with the ADA) related to Tenant’s use or occupancy of the
Premises. Notwithstanding any other provision herein to the contrary, Tenant shall be responsible
for any and all demands, claims,

 

 

			
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liabilities, losses, costs, expenses, actions, causes of action,
damages or judgments, and all reasonable
expenses incurred in investigating or resisting the same (including, without limitation,
reasonable attorneys’ fees, charges and disbursements and costs of suit) (collectively, “Claims”)
arising out of or in connection with Legal Requirements, and Tenant shall indemnify, defend, hold
and save Landlord harmless from and against any and all Claims arising out of or in connection with
any failure of the Premises to comply with any Legal Requirement.

     8. Holding Over. If, with Landlord’s express written consent, Tenant retains possession of
the Premises after the termination of the Term, (i) unless otherwise agreed in such written
consent, such possession shall be subject to immediate termination by Landlord at any time, (ii)
all of the other terms and provisions of this Lease (including, without limitation, the adjustment
of Base Rent pursuant to Section 4 hereof) shall remain in full force and effect (excluding
any expansion or renewal option or other similar right or option) during such holdover period,
(iii) Tenant shall continue to pay Base Rent in the amount payable upon the date of the expiration
or earlier termination of this Lease or such other amount as Landlord may indicate, in Landlord’s
sole and absolute discretion, in such written consent, and (iv) all other payments shall continue
under the terms of this Lease. If Tenant remains in possession of the Premises after the
expiration or earlier termination of the Term without the express written consent of Landlord, (A)
Tenant shall become a tenant at sufferance upon the terms of this Lease except that the monthly
rental shall be equal to 150% of Rent in effect during the last 30 days of the Term, and (B) Tenant
shall be responsible for all damages suffered by Landlord resulting from or occasioned by Tenant’s
holding over, including consequential damages. No holding over by Tenant, whether with or without
consent of Landlord, shall operate to extend this Lease except as otherwise expressly provided, and
this Section 8 shall not be construed as consent for Tenant to retain possession of the
Premises. Acceptance by Landlord of Rent after the expiration of the Term or earlier termination
of this Lease shall not result in a renewal or reinstatement of this Lease.

     9. Taxes. Landlord shall pay, as part of Operating Expenses, all taxes, levies, community
facility district fees and/or bonds, assessments and governmental charges of any kind (collectively
referred to as “Taxes”) imposed by any federal, state, regional, municipal, local or other
governmental authority or agency, including, without limitation, quasi-public agencies
(collectively, “Governmental Authority”) during the Term, including, without limitation, all Taxes:
(i) imposed on or measured by or based, in whole or in part, on rent payable to Landlord under
this Lease and/or from the rental by Landlord of the Project or any portion thereof, or (ii) based
on the square footage, assessed value or other measure or evaluation of any kind of the Premises or
the Project, or (iii) assessed or imposed by or on the operation or maintenance of any portion of
the Premises or the Project, including parking, or (iv) assessed or imposed by, or at the direction
of, or resulting from statutes or regulations, or interpretations thereof, promulgated by, any
Governmental Authority, or (v) imposed as a license or other fee on Landlord’s business of leasing
space in the Project. Landlord may contest by appropriate legal proceedings the amount, validity,
or application of any Taxes or liens securing Taxes. Taxes shall not include any net income taxes
imposed on Landlord unless such net income taxes are in substitution for any Taxes payable
hereunder. If any such Tax is levied or assessed directly against Tenant, then Tenant shall be
responsible for and shall pay the same at such times and in such manner as the taxing authority
shall require. Tenant shall pay, prior to delinquency, any and all Taxes levied or assessed
against any personal property or trade fixtures placed by Tenant in the Premises, whether levied or
assessed against Landlord or Tenant. If any Taxes on Tenant’s personal property or trade fixtures
are levied against Landlord or Landlord’s property, or if the assessed valuation of the Project is
increased by a value attributable to improvements in or alterations to the Premises, whether owned
by Landlord or Tenant and whether or not affixed to the real property so as to become a part
thereof, higher than the base valuation on which Landlord from time-to-time allocates Taxes to all
tenants in the Project, Landlord shall have the right, but not the obligation, to pay such Taxes.
Landlord’s reasonable determination of any excess assessed valuation shall be binding and
conclusive, absent manifest error. The amount of any such payment by Landlord shall constitute
Additional Rent due from Tenant to Landlord immediately upon demand.

     10. Parking. Subject to all matters of record, Force Majeure, a Taking (as defined in
Section 19 below) and the exercise by Landlord of its rights hereunder, Tenant shall have
the right to use 1.4

 

 

			
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parking spaces per 1,000 rentable square feet of the Premises which parking
shall be in those areas
designated by Landlord for non-reserved parking on land adjacent to or nearby the Project,
subject in each case to Landlord’s rules and regulations and payment of $125 per month for each
surface parking space and $250 per month for each structured parking space. Commencing on the
first anniversary of the Commencement Date and on each anniversary thereafter, the parking charges
provided for in the preceding sentence shall be increased by the Rent Adjustment Percentage. With
respect to the parking allocated to Tenant pursuant to this Section 10, Landlord shall make
the determination of how many of such spaces shall be surface parking spaces and how many shall be
structured parking spaces (after such structure has been constructed). Landlord shall not be
responsible for enforcing Tenant’s parking rights against any third parties, including other
tenants of the Project. Nothing contained herein shall obligate Tenant to use any of the parking
spaces allocated to Tenant pursuant to this Section 10. In the event that Tenant at any
time elects not to use and/or ceases to use any of the parking spaces allocated to Tenant pursuant
to this Section 10, Tenant shall be deemed to have forever waived its right to use such
parking spaces; provided, however, that in no event shall Tenant be deemed to have waived its
rights with respect to or elected not to use any of the parking spaces allocated to it prior to the
Commencement Date.

     Tenant shall comply with the requirements and participate in the Transportation Management
Association (“TMA”) that was formed to implement and administer the Transportation System
Management Plan (“TSMP”) for Mission Bay and comply with the requirements set forth in Exhibit I
attached hereto setting forth certain requirements relating to parking and transportation demand
management which are binding on tenant in the Project. Tenant acknowledges that Operating Expenses
shall include expenses and assessments related to the TMA and TSMP.

     11. Utilities, Services.

     Landlord shall provide, subject to the terms of this Section 11, water, electricity,
heat, light, power, telephone, a minimum point of entry for IT, sewer, and other utilities
(including gas and fire sprinklers to the extent the Project is plumbed for such services), refuse
and trash collection and janitorial services (collectively, “Utilities”). Except for any
separately metered Utilities to the Premises, Landlord shall pay, as Operating Expenses or subject
to Tenant’s reimbursement obligation, for all Utilities used on the Premises, all maintenance
charges for Utilities, and any storm sewer charges or other similar charges for Utilities imposed
by any Governmental Authority or Utility provider, and any taxes, penalties, surcharges or similar
charges thereon. If Landlord has a reasonable basis for doing so (e.g., Tenant use of any
Utilities is excessive relative to other tenants), Landlord may cause, at Tenant’s expense, any
Utilities to be separately metered or charged directly to Tenant by the provider. Tenant shall pay
directly to the Utility provider, prior to delinquency, any separately metered Utilities and
services which may be furnished to Tenant or the Premises during the Term. Tenant shall pay, as
part of Operating Expenses, its share of all charges for jointly metered Utilities based upon
consumption, as reasonably determined by Landlord. No interruption or failure of Utilities, from
any cause whatsoever other than Landlord’s willful misconduct, shall result in eviction or
constructive eviction of Tenant, termination of this Lease or the abatement of Rent. Tenant agrees
to limit use of water and sewer with respect to Common Areas to normal restroom use.

     12. Alterations and Tenant’s Property. Any alterations, additions, or improvements made to
the Premises by or on behalf of Tenant, including additional locks or bolts of any kind or nature
upon any doors or windows in the Premises, but excluding installation, removal or realignment of
furniture systems (other than removal of furniture systems owned or paid for by Landlord) not
involving any modifications to the structure or connections (other then by ordinary plugs or jacks)
to Building Systems (as defined in Section 13) (“Alterations”) shall be subject to
Landlord’s prior written consent, which may not be unreasonably withheld, conditioned or delayed;
provided, however, that such consent may be given or withheld in Landlord’s sole discretion if any
such Alteration affects the structural elements or Building Systems. If Landlord approves any
Alterations, Landlord may impose such conditions on Tenant in connection with the commencement,
performance and completion of such Alterations as Landlord may deem appropriate in Landlord’s sole
and absolute discretion. Any request for approval shall be in writing, delivered not less than 15
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plans, specifications,
bid proposals, work contracts and such other information concerning the nature and
cost of the alterations as may be reasonably requested by Landlord, including the identities
and mailing addresses of all persons performing work or supplying materials. Landlord’s right to
review plans and specifications and to monitor construction shall be solely for its own benefit,
and Landlord shall have no duty to ensure that such plans and specifications or construction comply
with applicable Legal Requirements. Tenant shall cause, at its sole cost and expense, all
Alterations to comply with insurance requirements and with Legal Requirements and shall implement
at its sole cost and expense any alteration or modification required by Legal Requirements as a
result of any Alterations. Tenant shall pay to Landlord, as Additional Rent, on demand an amount
equal to 5% of all charges incurred by Tenant or its contractors or agents in connection with any
Alteration to cover Landlord’s overhead and expenses for plan review, coordination, scheduling and
supervision. Before Tenant begins any Alteration, Landlord may post on and about the Premises
notices of non-responsibility pursuant to applicable law. Tenant shall reimburse Landlord for, and
indemnify and hold Landlord harmless from, any expense incurred by Landlord by reason of faulty
work done by Tenant or its contractors, delays caused by such work, or inadequate cleanup.

     Tenant shall furnish security or make other arrangements reasonably satisfactory to Landlord
to assure payment for the completion of all Alterations work free and clear of liens, and shall
provide (and cause each contractor or subcontractor to provide) certificates of insurance for
workers’ compensation and other coverage in amounts and from an insurance company reasonably
satisfactory to Landlord protecting Landlord against liability for personal injury or property
damage during construction. Upon completion of any Alterations, Tenant shall deliver to Landlord:
(i) final lien waivers from all contractors and subcontractors who did the work; and (ii) “as
built” plans for any such Alteration.

     Except for Removable Installations (as hereinafter defined), all Installations (as hereinafter
defined) shall be and shall remain the property of Landlord during the Term and following the
expiration or earlier termination of the Term, shall not be removed by Tenant at any time during
the Term, and shall remain upon and be surrendered with the Premises as a part thereof.
Notwithstanding the foregoing, Landlord may, at the time its approval of any such Installation is
requested, notify Tenant that Landlord requires that Tenant remove such Installation upon the
expiration or earlier termination of the Term, in which event Tenant shall remove such Installation
in accordance with the immediately succeeding sentence. Upon the expiration or earlier termination
of the Term, Tenant shall remove (i) all wires, cables or similar equipment which Tenant has
installed in the Premises or in the risers or plenums of the Building, (ii) any Installations for
which Landlord has given Tenant notice of removal in accordance with the immediately preceding
sentence, and (iii) all of Tenant’s Property (as hereinafter defined), and Tenant shall restore and
repair any damage caused by or occasioned as a result of such removal, including, without
limitation, capping off all such connections behind the walls of the Premises and repairing any
holes. During any restoration period beyond 7 days after the expiration or earlier termination of
the Term, Tenant shall pay Rent to Landlord as provided herein as if said space were otherwise
occupied by Tenant.

     For purposes of this Lease, (w) “Removable Installations” means any items listed on Exhibit F
attached hereto and any items agreed by Landlord in writing to be included on Exhibit F in the
future, (x) “Tenant’s Property” means Removable Installations and, other than Installations, any
personal property or equipment of Tenant that may be removed without material damage to the
Premises, and (z) “Installations” means all property of any kind paid for with the TI Fund or by
Landlord, all Alterations, all fixtures, and all partitions, hardware, built-in machinery, built-in
casework and cabinets and other similar additions, equipment, property and improvements built into
the Premises so as to become an integral part of the Premises, including, without limitation, fume
hoods which penetrate the roof or plenum area, built-in cold rooms, built-in warm rooms, walk-in
cold rooms, walk-in warm rooms, deionized water systems, glass washing equipment, autoclaves,
chillers, built-in plumbing, electrical and mechanical equipment and systems, and any power
generator and transfer switch.

     13. Landlord’s Repairs. Landlord, as an Operating Expense, shall maintain all of the
structural, exterior, parking and other Common Areas of the Project, including HVAC, plumbing, fire
sprinklers, elevators and all other building systems serving the Premises and other portions of the
Project

 

 

			
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(“Building Systems”), in good repair, reasonable wear and tear and uninsured losses and
damages
caused by Tenant, or by any of Tenant’s agents, servants, employees, invitees and contractors
(collectively, “Tenant Parties”) excluded. Losses and damages caused by Tenant or any Tenant Party
shall be repaired by Landlord, to the extent not covered by insurance, at Tenant’s sole cost and
expense. Landlord reserves the right to stop Building Systems services when necessary (i) by
reason of accident or emergency, or (ii) for planned repairs, alterations or improvements, which
are, in the judgment of Landlord, desirable or necessary to be made, until said repairs,
alterations or improvements shall have been completed. Landlord shall use reasonable efforts to
minimize interference with Tenant’s normal business operations at the Premises in connection with
any planned stoppages of Building Systems. Landlord shall have no responsibility or liability for
failure to supply Building Systems services during any such period of interruption;
provided, however, that Landlord shall, except in case of emergency, make a
commercially reasonable effort to give Tenant 24 hours advance notice of any planned stoppage of
Building Systems services for routine maintenance, repairs, alterations or improvements. Tenant
shall promptly give Landlord written notice of any repair required by Landlord pursuant to this
Section, after which Landlord shall make a commercially reasonable effort to effect such repair.
Landlord shall not be liable for any failure to make any repairs or to perform any maintenance
unless such failure shall persist for an unreasonable time after Tenant’s written notice of the
need for such repairs or maintenance. Tenant waives its rights under any state or local law to
terminate this Lease or to make such repairs at Landlord’s expense and agrees that the parties’
respective rights with respect to such matters shall be solely as set forth herein. Repairs
required as the result of fire, earthquake, flood, vandalism, war, or similar cause of damage or
destruction shall be controlled by Section 18.

     14. Tenant’s Repairs. Subject to Section 13 hereof, Tenant, at its expense, shall
repair, replace and maintain in good condition all portions of the Premises, including, without
limitation, entries, doors, ceilings, interior windows, interior walls, and the interior side of
demising walls. Such repair and replacement may include capital expenditures and repairs whose
benefit may extend beyond the Term. Should Tenant fail to make any such repair or replacement or
fail to maintain the Premises, Landlord shall give Tenant notice of such failure. If Tenant fails
to commence cure of such failure within 10 days of Landlord’s notice, and thereafter diligently
prosecute such cure to completion, Landlord may perform such work and shall be reimbursed by Tenant
within 10 days after demand therefor; provided, however, that if such failure by Tenant creates or
could create an emergency, Landlord may immediately commence cure of such failure and shall
thereafter be entitled to recover the costs of such cure from Tenant. Subject to Sections
17 and 18, Tenant shall bear the full uninsured cost of any repair or replacement to
any part of the Project that results from damage caused by Tenant or any Tenant Party and any
repair that benefits only the Premises.

     15. Mechanic’s Liens. Tenant shall discharge, by bond or otherwise, any mechanic’s lien filed
against the Premises or against the Project for work claimed to have been done for, or materials
claimed to have been furnished to, Tenant within 10 days after the filing thereof, at Tenant’s sole
cost and shall otherwise keep the Premises and the Project free from any liens arising out of work
performed, materials furnished or obligations incurred by Tenant. Should Tenant fail to discharge
any lien described herein, Landlord shall have the right, but not the obligation, to pay such claim
or post a bond or otherwise provide security to eliminate the lien as a claim against title to the
Project and the cost thereof shall be immediately due from Tenant as Additional Rent. If Tenant
shall lease or finance the acquisition of office equipment, furnishings, or other personal property
of a removable nature utilized by Tenant in the operation of Tenant’s business, Tenant warrants
that any Uniform Commercial Code Financing Statement filed as a matter of public record by any
lessor or creditor of Tenant will upon its face or by exhibit thereto indicate that such Financing
Statement is applicable only to removable personal property of Tenant located within the Premises.
In no event shall the address of the Project be furnished on the statement without qualifying
language as to applicability of the lien only to removable personal property, located in an
identified suite held by Tenant.

     16. Indemnification. Tenant hereby indemnifies and agrees to defend, save and hold Landlord
harmless from and against any and all Claims for injury or death to persons or damage to property
occurring within or about the Premises, arising directly or indirectly out of use or occupancy of
the Premises or a breach or default by Tenant in the performance of any of its obligations
hereunder,

 

 

			
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unless caused solely by the willful misconduct or gross negligence of Landlord.
Landlord shall not be
liable to Tenant for, and Tenant assumes all risk of damage to, personal property (including,
without limitation, loss of records kept within the Premises). Tenant further waives any and all
Claims for injury to Tenant’s business or loss of income relating to any such damage or destruction
of personal property (including, without limitation, any loss of records). Landlord shall not be
liable for any damages arising from any act, omission or neglect of any tenant in the Project or of
any other third party.

     17. Insurance. Landlord shall maintain all risk property and, if applicable, sprinkler damage
insurance covering the full replacement cost of the Project. Landlord shall further procure and
maintain commercial general liability insurance with a single loss limit of not less than
$2,000,000 for bodily injury and property damage with respect to the Project. Landlord may, but is
not obligated to, maintain such other insurance and additional coverages as it may deem necessary,
including, but not limited to, flood, environmental hazard and earthquake, loss or failure of
building equipment, errors and omissions, rental loss during the period of repair or rebuilding,
workers’ compensation insurance and fidelity bonds for employees employed to perform services and
insurance for any improvements installed by Tenant or which are in addition to the standard
improvements customarily furnished by Landlord without regard to whether or not such are made a
part of the Project. All such insurance shall be included as part of the Operating Expenses
subject to the provisions of Section 5. The Project may be included in a blanket policy
(in which case the cost of such insurance allocable to the Project will be determined by Landlord
based upon the insurer’s cost calculations). Tenant shall also reimburse Landlord for any
increased premiums or additional insurance which Landlord reasonably deems necessary as a result of
Tenant’s use of the Premises and upon delivery by Landlord to Tenant of satisfactory evidence
indicating that such increased premiums or additional insurance are a direct result of Tenant’s use
of the Premises.

     Tenant, at its sole cost and expense, shall maintain during the Term: all risk property
insurance with business interruption and extra expense coverage, covering the full replacement cost
of all property and improvements installed or placed in the Premises by Tenant at Tenant’s expense;
workers’ compensation insurance with no less than the minimum limits required by law; employer’s
liability insurance with such limits as required by law; and commercial general liability
insurance, with a minimum limit of not less than $2,000,000 per occurrence for bodily injury and
property damage with respect to the Premises. The commercial general liability insurance policy
shall name Landlord, its officers, directors, employees, managers, agents, invitees and contractors
(collectively, “Landlord Parties”), as additional insureds. The commercial general liability
insurance policy shall insure on an occurrence and not a claims-made basis; shall be issued by
insurance companies which have a rating of not less than policyholder rating of A and financial
category rating of at least Class X in “Best’s Insurance Guide”; shall not be cancelable for
nonpayment of premium unless 10 days prior written notice shall have been given to Landlord from
the insurer; contain a hostile fire endorsement and a contractual liability endorsement; and
provide primary coverage to Landlord (any policy issued to Landlord providing duplicate or similar
coverage shall be deemed excess over Tenant’s policies). Copies of such policies (if requested by
Landlord), or certificates of insurance showing the limits of coverage required hereunder and
showing Landlord as an additional insured, along with reasonable evidence of the payment of
premiums for the applicable period, shall be delivered to Landlord by Tenant upon commencement of
the Term and upon each renewal of said insurance. Tenant’s policy may be a “blanket policy” with
an aggregate per location endorsement which specifically provides that the amount of insurance
shall not be prejudiced by other losses covered by the policy. Tenant shall, at least 5 days prior
to the expiration of such policies, furnish Landlord with renewal certificates.

     In each instance where insurance is to name Landlord as an additional insured, Tenant shall
upon written request of Landlord also designate and furnish certificates so evidencing Landlord as
additional insured to: (i) any lender of Landlord holding a security interest in the Project or
any portion thereof, (ii) the landlord under any lease wherein Landlord is tenant of the real
property on which the Project is located, if the interest of Landlord is or shall become that of a
tenant under a ground or other underlying lease rather than that of a fee owner, and/or (iii) any
management company retained by Landlord to manage the Project.

 

 

			
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     The property insurance obtained by Landlord and Tenant shall include a waiver of subrogation
by the insurers and all rights based upon an assignment from its insured, against Landlord or
Tenant, and
their respective officers, directors, employees, managers, agents, invitees and contractors
(“Related Parties”), in connection with any loss or damage thereby insured against. Neither party
nor its respective Related Parties shall be liable to the other for loss or damage caused by any
risk insured against under property insurance required to be maintained hereunder, and each party
waives any claims against the other party, and its respective Related Parties, for such loss or
damage. The failure of a party to insure its property shall not void this waiver. Landlord and
its respective Related Parties shall not be liable for, and Tenant hereby waives all claims against
such parties for, business interruption and losses occasioned thereby sustained by Tenant or any
person claiming through Tenant resulting from any accident or occurrence in or upon the Premises or
the Project from any cause whatsoever. If the foregoing waivers shall contravene any law with
respect to exculpatory agreements, the liability of Landlord or Tenant shall be deemed not released
but shall be secondary to the other’s insurer.

     Landlord may require insurance policy limits to be raised to conform with requirements of
Landlord’s lender and/or to bring coverage limits to levels then being generally required of new
tenants within the Project.

     18. Restoration. If, at any time during the Term, the Project or the Premises are damaged or
destroyed by a fire or other insured casualty, Landlord shall notify Tenant within 60 days after
discovery of such damage as to the amount of time Landlord reasonably estimates it will take to
restore the Project or the Premises, as applicable (the “Restoration Period”). If the Restoration
Period is estimated to exceed 12 months (the “Maximum Restoration Period”), Landlord may, in such
notice, elect to terminate this Lease as of the date that is 75 days after the date of discovery of
such damage or destruction; provided, however, that notwithstanding Landlord’s election to restore,
Tenant may elect to terminate this Lease by written notice to Landlord delivered within 5 business
days of receipt of a notice from Landlord estimating a Restoration Period for the Premises longer
than the Maximum Restoration Period. Unless Landlord or Tenant so elect to terminate this Lease,
Landlord shall, subject to receipt of sufficient insurance proceeds (with, subject to the
provisions of Section 5, any deductible to be treated as a current Operating Expense),
promptly restore the Premises (excluding the improvements installed by Tenant or by Landlord and
paid for by Tenant), subject to delays arising from the collection of insurance proceeds, from
Force Majeure events or as needed to obtain any license, clearance or other authorization of any
kind required to enter into and restore the Premises issued by any Governmental Authority having
jurisdiction over the use, storage, handling, treatment, generation, release, disposal, removal or
remediation of Hazardous Materials (as defined in Section 30) in, on or about the Premises
(collectively referred to herein as “Hazardous Materials Clearances”); provided,
however, that if repair or restoration of the Premises is not substantially complete as of
the end of the Maximum Restoration Period or, if longer, the Restoration Period, Landlord may, in
its sole and absolute discretion, elect not to proceed with such repair and restoration, or Tenant
may by written notice to Landlord delivered within 5 business days of the expiration of the Maximum
Restoration Period or, if longer, the Restoration Period, elect to terminate this Lease, in which
event Landlord shall be relieved of its obligation to make such repairs or restoration and this
Lease shall terminate as of the date that is 75 days after the later of: (i) discovery of such
damage or destruction, or (ii) the date all required Hazardous Materials Clearances are obtained,
but Landlord shall retain any Rent paid and the right to any Rent payable by Tenant prior to such
election by Landlord or Tenant. Notwithstanding the foregoing, if repair or restoration of the
Premises is not substantially complete as of the end of the Maximum Restoration Period or, if
longer, the Restoration Period, Landlord may not then elect to discriminate against Tenant by
terminating this Lease without terminating the leases at the Project of all of similarly affected
tenants.

     Tenant, at its expense, shall promptly perform, subject to delays arising from the collection
of insurance proceeds, from Force Majeure (as defined in Section 34) events or to obtain
Hazardous Material Clearances, all repairs or restoration not required to be done by Landlord and
shall promptly re-enter the Premises and commence doing business in accordance with this Lease.
Notwithstanding the foregoing, Landlord may terminate this Lease if the Premises are damaged during
the last 1 year of the Term and Landlord reasonably estimates that it will take more than 2 months
to repair such damage, or if insurance proceeds are not available for such restoration. Rent shall
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Hazardous Material Clearances required in order to proceed
with the repair and/or restoration of the Premises, if any, are obtained until the Premises are
repaired and restored, in the proportion which the
area of the Premises, if any, which is not usable by Tenant bears to the total area of the
Premises, unless Landlord provides Tenant with other space during the period of repair that is
suitable for the temporary conduct of Tenant’s business. Such abatement shall be the sole remedy
of Tenant, and except as provided in this Section 18, Tenant waives any right to terminate
the Lease by reason of damage or casualty loss.

     The provisions of this Lease, including this Section 18, 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, or any other portion of the Project, and any statute or regulation
which is now or may hereafter be in effect shall have no application to this Lease or any damage or
destruction to all or any part of the Premises or any other portion of the Project, the parties
hereto expressly agreeing that this Section 18 sets forth their entire understanding and
agreement with respect to such matters.

     19. Condemnation. If the whole or any material part of the Premises or the Project is taken
for any public or quasi-public use under governmental law, ordinance, or regulation, or by right of
eminent domain, or by private purchase in lieu thereof (a “Taking” or “Taken”), and the Taking
would either prevent or materially interfere with Tenant’s use of the Premises (as resolved, if the
parties are unable to agree, by arbitration by a single arbitrator with the qualifications and
experience appropriate to resolve the matter and appointed pursuant to and acting in accordance
with the rules of the American Arbitration Association) or, in Landlord’s reasonable judgment,
materially interfere with or impair Landlord’s ownership or operation of the Project, then upon
written notice by Tenant or Landlord, as applicable, this Lease shall terminate and Rent shall be
apportioned as of said date. If part of the Premises shall be Taken, and this Lease is not
terminated as provided above, Landlord shall promptly restore the Premises and the Project as
nearly as is commercially reasonable under the circumstances to their condition prior to such
partial Taking and the rentable square footage of the Building, the rentable square footage of the
Premises, Tenant’s Share of Operating Expenses and the Rent payable hereunder during the unexpired
Term shall be reduced to such extent as may be fair and reasonable under the circumstances. Upon
any such Taking, Landlord shall be entitled to receive the entire price or award from any such
Taking without any payment to Tenant, and Tenant hereby assigns to Landlord Tenant’s interest, if
any, in such award. Tenant shall have the right, to the extent that same shall not diminish
Landlord’s award, to make a separate claim against the condemning authority (but not Landlord) for
such compensation as may be separately awarded or recoverable by Tenant for moving expenses and
damage to Tenant’s trade fixtures, if a separate award for such items is made to Tenant. Tenant
hereby waives any and all rights it might otherwise have pursuant to any provision of state law to
terminate this Lease upon a partial Taking of the Premises or the Project.

     20. Events of Default. Each of the following events shall be a default (“Default”) by Tenant
under this Lease:

     (a) Payment Defaults. Tenant shall fail to pay any installment of Rent or any other payment
hereunder when due; provided, however, that Landlord will give Tenant notice and an opportunity to
cure any failure to pay Rent within 3 days of any such notice not more than once in any 12 month
period.

     (b) Insurance. Any insurance required to be maintained by Tenant pursuant to this Lease shall
be canceled or terminated or shall expire or shall be reduced or materially changed, or Landlord
shall receive a notice of nonrenewal of any such insurance and Tenant shall fail to obtain
replacement insurance at least 20 days before the expiration of the current coverage.

     (c) Abandonment. Tenant shall abandon the Premises.

     (d) Improper Transfer. Tenant shall assign, sublease or otherwise transfer or attempt to
transfer all or any portion of Tenant’s interest in this Lease or the Premises except as expressly
permitted herein, or Tenant’s interest in this Lease shall be attached, executed upon, or otherwise
judicially seized and such action is not released within 90 days of the action.

 

 

			
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     (e) Liens. Tenant shall fail to discharge or otherwise obtain the release of any lien placed
upon the Premises in violation of this Lease within 10 days after any such lien is filed against
the Premises.

     (f) Insolvency Events. Tenant or any guarantor or surety of Tenant’s obligations hereunder
shall: (A) make a general assignment for the benefit of creditors; (B) commence any case,
proceeding or other action seeking to have an order for relief entered on its behalf as a debtor or
to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
liquidation, dissolution or composition of it or its debts or seeking appointment of a receiver,
trustee, custodian or other similar official for it or for all or of any substantial part of its
property (collectively a “Proceeding for Relief”); (C) become the subject of any Proceeding for
Relief which is not dismissed within 90 days of its filing or entry; or (D) die or suffer a legal
disability (if Tenant, guarantor, or surety is an individual) or be dissolved or otherwise fail to
maintain its legal existence (if Tenant, guarantor or surety is a corporation, partnership or other
entity).

     (g) Estoppel Certificate or Subordination Agreement. Tenant fails to execute any document
required from Tenant under Sections 23 or 27 within 5 days after a second notice
requesting such document.

     (h) Other Defaults. Tenant shall fail to comply with any provision of this Lease other than
those specifically referred to in this Section 20, and, except as otherwise expressly
provided herein, such failure shall continue for a period of 10 days after written notice thereof
from Landlord to Tenant.

     Any notice given under Section 20(h) hereof shall: (i) specify the alleged default,
(ii) demand that Tenant cure such default, (iii) be in lieu of, and not in addition to, or shall be
deemed to be, any notice required under any provision of applicable law, and (iv) not be deemed a
forfeiture or a termination of this Lease unless Landlord elects otherwise in such notice;
provided that if the nature of Tenant’s default pursuant to Section 20(h) is such
that it cannot be cured by the payment of money and reasonably requires more than 10 days to cure,
then Tenant shall not be deemed to be in default if Tenant commences such cure within said 10 day
period and thereafter diligently prosecutes the same to completion; provided,
however, that such cure shall be completed no later than 30 days from the date of
Landlord’s notice.

     21. Landlord’s Remedies.

     (a) Payment By Landlord; Interest. Upon a Default by Tenant hereunder, Landlord may, without
waiving or releasing any obligation of Tenant hereunder, make such payment or perform such act.
All sums so paid or incurred by Landlord, together with interest thereon, from the date such sums
were paid or incurred, at the annual rate equal to 12% per annum or the highest rate permitted by
law (the “Default Rate”), whichever is less, shall be payable to Landlord on demand as Additional
Rent. Nothing herein shall be construed to create or impose a duty on Landlord to mitigate any
damages resulting from Tenant’s Default hereunder.

     (b) Late Payment Rent. Late payment by Tenant to Landlord of Rent and other sums due will
cause Landlord to incur costs not contemplated by this Lease, the exact amount of which will be
extremely difficult and impracticable to ascertain. Such costs include, but are not limited to,
processing and accounting charges and late charges which may be imposed on Landlord under any
Mortgage covering the Premises. Therefore, if any installment of Rent due from Tenant is not
received by Landlord within 5 days after the date such payment is due, Tenant shall pay to Landlord
an additional sum equal to 6% of the overdue Rent as a late charge. The parties agree that this
late charge represents a fair and reasonable estimate of the costs Landlord will incur by reason of
late payment by Tenant. In addition to the late charge, Rent not paid when due shall bear interest
at the Default Rate from the 5th day after the date due until paid.

 

 

			
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     (c) Remedies. Upon the occurrence of a Default, Landlord, at its option, without further
notice or demand to Tenant, shall have in addition to all other rights and remedies provided in
this Lease, at law or in equity, the option to pursue any one or more of the following remedies,
each and all of which shall be cumulative and nonexclusive, without any notice or demand
whatsoever.

     (i) Terminate this Lease, or at Landlord’s option, Tenant’s right to possession only,
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;

     (ii) Upon any termination of this Lease, whether pursuant to the foregoing Section
21(c)(i) or otherwise, Landlord may recover from Tenant the following:

     (A) The worth at the time of award of any unpaid rent which has been earned at
the time of such termination; plus

     (B) 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

     (C) The worth at the time of award of the amount by which the unpaid rent for
the balance of the Term after the time of award exceeds the amount of such rental
loss that Tenant proves could have been reasonably avoided; plus

     (D) Any other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant’s failure to perform its obligations under this Lease
or which in the ordinary course of things would be likely to result therefrom,
specifically including, but not limited to, the following costs: brokerage
commissions and advertising expenses incurred, expenses of remodeling the Premises
or any portion thereof for a new tenant, whether for the same or a different use,
and any special concessions made to obtain a new tenant; provided, however that
Tenant only shall be responsible for it pro-rata share of such brokerage
commissions, advertising expenses, remodeling expenses and special concessions (with
the numerator being the number of months that would have remained in the Term of
this Lease but for the termination and the denominator being the amount of the
numerator plus the term of the new lease).

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

The term “rent” as used in this Section 21 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 21(c)(ii) (A) and
(B), above, the “worth at the time of award” shall be computed by allowing interest
at the Default Rate. As used in Section 21(c)(ii)(C) 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 1%.

     (iii) Landlord may continue this Lease in effect after Tenant’s Default and recover
rent as it becomes due (Landlord and Tenant hereby agreeing that Tenant has the right to
sublet or assign hereunder, subject only to reasonable limitations). Accordingly, if
Landlord does not elect to terminate this Lease following a Default by Tenant, Landlord may,
from time to time, without terminating this Lease, enforce all of its rights and remedies
hereunder, including the right to recover all Rent as it becomes due.

 

 

			
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     (iv) Whether or not Landlord elects to terminate this Lease following a Default by
Tenant, 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. Upon 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.

     (v) Independent of the exercise of any other remedy of Landlord hereunder or under
applicable law, Landlord may conduct an environmental test of the Premises as generally
described in Section 30(d) hereof, at Tenant’s expense.

     (d) Effect of Exercise. Exercise by Landlord of any remedies hereunder or otherwise available
shall not be deemed to be an acceptance of surrender of the Premises and/or a termination of this
Lease by Landlord, it being understood that such surrender and/or termination can be effected only
by the express written agreement of Landlord and Tenant. Any law, usage, or custom to the contrary
notwithstanding, Landlord shall have the right at all times to enforce the provisions of this Lease
in strict accordance with the terms hereof; and the failure of Landlord at any time to enforce its
rights under this Lease strictly in accordance with same shall not be construed as having created a
custom in any way or manner contrary to the specific terms, provisions, and covenants of this Lease
or as having modified the same and shall not be deemed a waiver of Landlord’s right to enforce one
or more of its rights in connection with any subsequent default. A receipt by Landlord of Rent or
other payment with knowledge of the breach of any covenant hereof shall not be deemed a waiver of
such breach, and no waiver by Landlord of any provision of this Lease shall be deemed to have been
made unless expressed in writing and signed by Landlord. To the greatest extent permitted by law,
Tenant waives the service of notice of Landlord’s intention to re-enter, re-take or otherwise
obtain possession of the Premises as provided in any statute, or to institute legal proceedings to
that end, and also waives all right of redemption in case Tenant shall be dispossessed by a
judgment or by warrant of any court or judge. Any reletting of the Premises or any portion thereof
shall be on such terms and conditions as Landlord in its sole discretion may determine. Landlord
shall not be liable for, nor shall Tenant’s obligations hereunder be diminished because of,
Landlord’s failure to relet the Premises or collect rent due in respect of such reletting or
otherwise to mitigate any damages arising by reason of Tenant’s Default.

     22. Assignment and Subletting.

     (a) General Prohibition. Without Landlord’s prior written consent subject to and on the
conditions described in this Section 22, Tenant shall not, directly or indirectly,
voluntarily or by operation of law, assign this Lease or sublease the Premises or any part thereof
or mortgage, pledge, or hypothecate its leasehold interest or grant any concession or license
within the Premises, and any attempt to do any of the foregoing shall be void and of no effect. If
Tenant is a corporation, partnership or limited liability company, the shares or other ownership
interests thereof which are not actively traded upon a stock exchange or in the over-the-counter
market, a transfer or series of transfers whereby 25% or more of the issued and outstanding shares
or other ownership interests of such corporation are, or voting control is, transferred (but
excepting transfers upon deaths of individual owners) from a person or persons or entity or
entities which were owners thereof at time of execution of this Lease to persons or entities who
were not owners of shares or other ownership interests of the corporation, partnership or limited
liability company at time of execution of this Lease, shall be deemed an assignment of this Lease
requiring the consent of Landlord as provided in this Section 22.

     (b) Permitted Transfers. If Tenant desires to assign, sublease, hypothecate or otherwise
transfer this Lease or sublet the Premises other than pursuant to a Permitted Assignment (as
defined below), then at least 15 business days, but not more than 45 business days, before the date
Tenant desires the assignment or sublease to be effective (the “Assignment Date”), Tenant shall
give Landlord a notice (the “Assignment Notice”) containing such information about the proposed
assignee or sublessee, including the proposed use of the Premises and any Hazardous Materials
proposed to be

 

 

			
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used, stored handled, treated, generated in or released or disposed of from the Premises, the Assignment
Date, any relationship between Tenant and the proposed assignee or sublessee, and all material
terms and conditions of the proposed assignment or sublease, including a copy of any proposed
assignment or sublease in its final form, and such other information as Landlord may deem
reasonably necessary or appropriate to its consideration whether to grant its consent. Landlord
may, by giving written notice to Tenant within 15 business days after receipt of the Assignment
Notice: (i) grant such consent, (ii) refuse such consent, in its reasonable discretion; provided
that it shall be reasonable for Landlord to withhold its consent to any assignment or subletting to
an assignee or subtenant whose business or financial reputation is objectionable in Landlord’s
reasonable judgment, or that is engaged in areas of scientific research or other business concerns
that are controversial, in Landlord’s reasonable judgment, or that is at that time negotiating with
Landlord or any affiliates of Landlord for the lease of other space at the Project, or that would
require the removal of, or result in any changes, to Landlord’s Work, or (iii) terminate this
Lease with respect to the space described in the Assignment Notice as of the Assignment Date (an
“Assignment Termination”). If Landlord delivers notice of its election to exercise an Assignment
Termination, Tenant shall have the right to withdraw such Assignment Notice by written notice to
Landlord of such election within 5 business days after Landlord’s notice electing to exercise the
Assignment Termination. If Tenant withdraws such Assignment Notice, this Lease shall continue in
full force and effect. If Tenant does not withdraw such Assignment Notice, this Lease, and the
term and estate herein granted, shall terminate as of the Assignment Date with respect to the space
described in such Assignment Notice. No failure of Landlord to exercise any such option to
terminate this Lease, or to deliver a timely notice in response to the Assignment Notice, shall be
deemed to be Landlord’s consent to the proposed assignment, sublease or other transfer. Tenant
shall reimburse Landlord for all of Landlord’s reasonable out-of-pocket expenses in connection with
its consideration of any Assignment Notice.

     Notwithstanding the foregoing, Landlord’s consent to an assignment of this Lease or a
subletting of any portion of the Premises to any entity controlling, controlled by or under common
control with Tenant (a “Control Permitted Assignment”) shall not be required, provided that
Landlord shall have the right to approve the form of any such sublease or assignment. In addition,
Tenant shall have the right to assign this Lease, upon 30 days prior written notice to Landlord, to
a corporation or other entity which is a successor-in-interest to Tenant, by way of merger,
consolidation or corporate reorganization, or by the purchase of all or substantially all of the
assets or the ownership interests of Tenant provided that (i) such merger or consolidation, or such
acquisition or assumption, as the case may be, is for a good business purpose and not principally
for the purpose of transferring the Lease, and (ii) the net worth (as determined in accordance with
generally accepted accounting principles (“GAAP”)) of the assignee is not less than the net worth
(as determined in accordance with GAAP) of Tenant as of the date of Tenant’s most current quarterly
or annual financial statements, and (iii) such assignee shall agree in writing to assume all of the
terms, covenants and conditions of this Lease arising after the effective date of the assignment (a
“Corporate Permitted Assignment”). Control Permitted Assignments and Corporate Permitted
Assignments are hereinafter referred to as “Permitted Assignments.”

     (c) Additional Conditions. As a condition to any such assignment or subletting, whether or
not Landlord’s consent is required, Landlord may require:

     (i) that any assignee or subtenant agree, in writing at the time of such assignment or
subletting, that if Landlord gives such party notice that Tenant is in default under this
Lease, such party shall thereafter make all payments otherwise due Tenant directly to
Landlord, which payments will be received by Landlord without any liability except to credit
such payment against those due under the Lease, and any such third party shall agree to
attorn to Landlord or its successors and assigns should this Lease be terminated for any
reason; provided, however, in no event shall Landlord or its successors or
assigns be obligated to accept such attornment; and

     (ii) A list of Hazardous Materials, certified by the proposed assignee or sublessee to
be true and correct, which the proposed assignee or sublessee intends to use, store, handle,
treat, generate in or release or dispose of from the Premises, together with copies of all
documents relating to such use, storage, handling, treatment, generation, release or
disposal of

 

 

			
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Hazardous Materials by the proposed assignee or subtenant in the Premises or on the
Project, prior to the proposed assignment or subletting, including, without limitation:
permits; approvals; reports and correspondence; storage and management plans; plans relating
to the installation of any storage tanks to be installed in or under the Project (provided,
said installation of tanks shall only be permitted after Landlord has given its written
consent to do so, which consent may be withheld in Landlord’s sole and absolute discretion);
and all closure plans or any other documents required by any and all federal, state and
local Governmental Authorities for any storage tanks installed in, on or under the Project
for the closure of any such tanks. Neither Tenant nor any such proposed assignee or
subtenant is required, however, to provide Landlord with any portion(s) of the such
documents containing information of a proprietary nature which, in and of themselves, do not
contain a reference to any Hazardous Materials or hazardous activities.

     (d) No Release of Tenant, Excess Rents. Notwithstanding any assignment or subletting, Tenant
and any guarantor or surety of Tenant’s obligations under this Lease shall at all times remain
fully and primarily responsible and liable for the payment of Rent and for compliance with all of
Tenant’s other obligations under this Lease. If the Rent due and payable by a sublessee or
assignee (or a combination of the rental payable under such sublease or assignment plus any bonus
or other consideration therefor or incident thereto in any form) exceeds the rental payable under
this Lease (excluding however, any Rent payable under this Section) and the actual and reasonable
brokerage fees and legal costs and other commercially reasonably incurred costs and expenses
directly related to such sublease (“Excess Rent”), then Tenant shall be bound and obligated to pay
Landlord as Additional Rent hereunder 100% of such Excess Rent within 10 days following receipt
thereof by Tenant. If Tenant shall sublet the Premises or any part thereof, Tenant hereby
immediately and irrevocably assigns to Landlord, as security for Tenant’s obligations under this
Lease, all rent from any such subletting, and Landlord as assignee and as attorney-in-fact for
Tenant, or a receiver for Tenant appointed on Landlord’s application, may collect such rent and
apply it toward Tenant’s obligations under this Lease; except that, until the occurrence of a
Default, Tenant shall have the right to collect such rent.

     (e) No Waiver. The consent by Landlord to an assignment or subletting shall not relieve
Tenant or any assignees of this Lease or any sublessees of the Premises from obtaining the consent
of Landlord to any further assignment or subletting nor shall it release Tenant or any assignee or
sublessee of Tenant from full and primary liability under the Lease. The acceptance of Rent
hereunder, or the acceptance of performance of any other term, covenant, or condition thereof, from
any other person or entity shall not be deemed to be a waiver of any of the provisions of this
Lease or a consent to any subletting, assignment or other transfer of the Premises.

     (f) Prior Conduct of Proposed Transferee. Notwithstanding any other provision of this
Section 22, if (i) the proposed assignee or sublessee of Tenant has been required by any
prior landlord, lender or Governmental Authority to take remedial action in connection with
Hazardous Materials contaminating a property, where the contamination resulted from such party’s
action or use of the property in question, (ii) the proposed assignee or sublessee is subject to an
enforcement order issued by any Governmental Authority in connection with the use, storage,
handling, treatment, generation, release or disposal of Hazardous Materials (including, without
limitation, any order related to the failure to make a required reporting to any Governmental
Authority), or (iii) because of the existence of a pre-existing environmental condition in the
vicinity of or underlying the Project, the risk that Landlord would be targeted as a responsible
party in connection with the remediation of such pre-existing environmental condition would be
materially increased or exacerbated by the proposed use of Hazardous Materials by such proposed
assignee or sublessee, Landlord shall have the absolute right to refuse to consent to any
assignment or subletting to any such party. .

     23. Estoppel Certificate. Tenant shall, within 10 business days of written notice from
Landlord, execute, acknowledge and deliver a statement in writing in any form reasonably requested
by a proposed lender or purchaser, (i) certifying that this Lease is unmodified and in full force
and effect (or, if modified, stating the nature of such modification and certifying that this Lease
as so modified is in full force and effect) and the dates to which the rental and other charges are
paid in advance, if any, (ii) acknowledging that there are not any uncured defaults on the part of
Landlord hereunder, or specifying

 

 

			
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such defaults if any are claimed, and (iii) setting forth such further information with
respect to the status of this Lease or the Premises as may be requested thereon. Any such
statement may be relied upon by any prospective purchaser or encumbrancer of all or any portion of
the real property of which the Premises are a part. Tenant’s failure to deliver such statement
within such time shall, at the option of Landlord, constitute a Default under this Lease, and, in
any event, shall be conclusive upon Tenant that the Lease is in full force and effect and without
modification except as may be represented by Landlord in any certificate prepared by Landlord and
delivered to Tenant for execution.

     24. Quiet Enjoyment. So long as Tenant shall perform all of the covenants and agreements
herein required to be performed by Tenant, Tenant shall, subject to the terms of this Lease, at all
times during the Term, have peaceful and quiet enjoyment of the Premises against any person
claiming by, through or under Landlord.

     25. Prorations. All prorations required or permitted to be made hereunder shall be made on
the basis of a 360 day year and 30 day months.

     26. Rules and Regulations. Tenant shall, at all times during the Term and any extension
thereof, comply with all reasonable rules and regulations at any time or from time to time
established by Landlord covering use of the Premises and the Project. The current rules and
regulations are attached hereto as Exhibit E. If there is any conflict between said rules and
regulations and other provisions of this Lease, the terms and provisions of this Lease shall
control. Landlord shall not have any liability or obligation for the breach of any rules or
regulations by other tenants in the Project and shall not enforce such rules and regulations in a
discriminatory manner.

     27. Subordination. This Lease and Tenant’s interest and rights hereunder are hereby made and
shall be subject and subordinate at all times to the lien of any Mortgage now existing or hereafter
created on or against the Project or the Premises, and all amendments, restatements, renewals,
modifications, consolidations, refinancing, assignments and extensions thereof, without the
necessity of any further instrument or act on the part of Tenant; provided, however
that so long as there is no Default hereunder, Tenant’s right to possession of the Premises shall
not be disturbed by the Holder of any such Mortgage. Tenant agrees, at the election of the Holder
of any such Mortgage, to attorn to any such Holder. Tenant agrees upon demand to execute,
acknowledge and deliver such instruments, confirming such subordination, and such instruments of
attornment as shall be requested by any such Holder, provided any such instruments contain
appropriate commercially reasonable non-disturbance provisions assuring Tenant’s quiet enjoyment of
the Premises as set forth in Section 24 hereof. Notwithstanding the foregoing, any such
Holder may at any time subordinate its Mortgage to this Lease, without Tenant’s consent, by notice
in writing to Tenant, and thereupon this Lease shall be deemed prior to such Mortgage without
regard to their respective dates of execution, delivery or recording and in that event such Holder
shall have the same rights with respect to this Lease as though this Lease had been executed prior
to the execution, delivery and recording of such Mortgage and had been assigned to such Holder.
The term “Mortgage” whenever used in this Lease shall be deemed to include deeds of trust, security
assignments and any other encumbrances, and any reference to the “Holder” of a Mortgage shall be
deemed to include the beneficiary under a deed of trust.

     28. Surrender. Upon the expiration of the Term or earlier termination of Tenant’s right of
possession, Tenant shall surrender the Premises to Landlord in the same condition as received,
subject to any Alterations or Installations permitted by Landlord to remain in the Premises, free
of Hazardous Materials brought upon, kept, used, stored, handled, treated, generated in, or
released or disposed of from, the Premises by any person other than a Landlord Party (collectively,
“Tenant HazMat Operations”) and released of all Hazardous Materials Clearances, broom clean,
ordinary wear and tear and casualty loss and condemnation covered by Sections 18 and
19 excepted. At least 3 months prior to the surrender of the Premises, Tenant shall
deliver to Landlord a narrative description of the actions proposed (or required by any
Governmental Authority) to be taken by Tenant in order to surrender the Premises (including any
Installations permitted by Landlord to remain in the Premises) at the expiration or earlier
termination of the Term, free from any residual impact from the Tenant HazMat Operations and
otherwise released for unrestricted use and occupancy (the “Surrender Plan”). Such Surrender Plan

 

 

			
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shall be accompanied by a current listing of (i) all Hazardous Materials licenses and permits held
by or on behalf of any Tenant Party with respect to the Premises, and (ii) all Hazardous Materials
used, stored, handled, treated, generated, released or disposed of from the Premises, and shall be
subject to the review and approval of Landlord’s environmental consultant. In connection with the
review and approval of the Surrender Plan, upon the request of Landlord, Tenant shall deliver to
Landlord or its consultant such additional non-proprietary information concerning Tenant HazMat
Operations as Landlord shall request. On or before such surrender, Tenant shall deliver to
Landlord evidence that the approved Surrender Plan shall have been satisfactorily completed and
Landlord shall have the right, subject to reimbursement at Tenant’s expense as set forth below, to
cause Landlord’s environmental consultant to inspect the Premises and perform such additional
procedures as may be deemed reasonably necessary to confirm that the Premises are, as of the
effective date of such surrender or early termination of the Lease, free from any residual impact
from Tenant HazMat Operations. Tenant shall reimburse Landlord, as Additional Rent, for the actual
out-of pocket expense incurred by Landlord for Landlord’s environmental consultant to review and
approve the Surrender Plan and to visit the Premises and verify satisfactory completion of the
same, which cost shall not exceed $5,000. Landlord shall have the unrestricted right to deliver
such Surrender Plan and any report by Landlord’s environmental consultant with respect to the
surrender of the Premises to third parties.

     If Tenant shall fail to prepare or submit a Surrender Plan approved by Landlord, or if Tenant
shall fail to complete the approved Surrender Plan, or if such Surrender Plan, whether or not
approved by Landlord, shall fail to adequately address any residual effect of Tenant HazMat
Operations in, on or about the Premises, Landlord shall have the right to take such actions as
Landlord may deem reasonable or appropriate to assure that the Premises and the Project are
surrendered free from any residual impact from Tenant HazMat Operations, the cost of which actions
shall be reimbursed by Tenant as Additional Rent, without regard to the limitation set forth in the
first paragraph of this Section 28.

     Tenant shall immediately return to Landlord all keys and/or access cards to parking, the
Project, restrooms or all or any portion of the Premises furnished to or otherwise procured by
Tenant. If any such access card or key is lost, Tenant shall pay to Landlord, at Landlord’s
election, either the cost of replacing such lost access card or key or the cost of reprogramming
the access security system in which such access card was used or changing the lock or locks opened
by such lost key. Any Tenant’s Property, Alterations and property not so removed by Tenant as
permitted or required herein shall be deemed abandoned and may be stored, removed, and disposed of
by Landlord at Tenant’s expense, and Tenant waives all claims against Landlord for any damages
resulting from Landlord’s retention and/or disposition of such property. All obligations of Tenant
hereunder not fully performed as of the termination of the Term, including the obligations of
Tenant under Section 30 hereof, shall survive the expiration or earlier termination of the
Term, including, without limitation, indemnity obligations, payment obligations with respect to
Rent and obligations concerning the condition and repair of the Premises.

     29. Waiver of Jury Trial. TENANT AND LANDLORD WAIVE ANY RIGHT TO TRIAL BY JURY OR TO HAVE A
JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE,
BETWEEN LANDLORD AND TENANT ARISING OUT OF THIS LEASE OR ANY OTHER INSTRUMENT, DOCUMENT, OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO.

     30. Environmental Requirements.

     (a) Prohibition/Compliance/Indemnity. Tenant shall not cause or permit any Hazardous
Materials (as hereinafter defined) to be brought upon, kept, used, stored, handled, treated,
generated in or about, or released or disposed of from, the Premises or the Project in violation
of applicable Environmental Requirements (as hereinafter defined) by Tenant or any Tenant Party.
If Tenant breaches the obligation stated in the preceding sentence, or if the presence of Hazardous
Materials in the Premises during the Term or any holding over results in contamination of the
Premises, the Project or any adjacent property or if contamination of the Premises, the Project or
any adjacent property by Hazardous Materials brought into, kept, used, stored, handled, treated,
generated in or about, or released or disposed of from, the Premises by anyone other than Landlord
and Landlord’s employees, agents and contractors

 

 

			
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otherwise occurs during the Term or any holding over, Tenant hereby indemnifies and shall
defend and hold Landlord, its officers, directors, employees, agents and contractors harmless from
any and all actions (including, without limitation, remedial or enforcement actions of any kind,
administrative or judicial proceedings, and orders or judgments arising out of or resulting
therefrom), costs, claims, damages (including, without limitation, punitive damages and damages
based upon diminution in value of the Premises or the Project, or the loss of, or restriction on,
use of the Premises or any portion of the Project), expenses (including, without limitation,
attorneys’, consultants’ and experts’ fees, court costs and amounts paid in settlement of any
claims or actions), fines, forfeitures or other civil, administrative or criminal penalties,
injunctive or other relief (whether or not based upon personal injury, property damage, or
contamination of, or adverse effects upon, the environment, water tables or natural resources),
liabilities or losses (collectively, “Environmental Claims”) which arise during or after the Term
as a result of such contamination. This indemnification of Landlord by Tenant includes, without
limitation, costs incurred in connection with any investigation of site conditions or any cleanup,
treatment, remedial, removal, or restoration work required by any federal, state or local
Governmental Authority because of Hazardous Materials present in the air, soil or ground water
above, on, or under the Premises. Without limiting the foregoing, if the presence of any Hazardous
Materials on the Premises, the Project or any adjacent property caused or permitted by Tenant or
any Tenant Party results in any contamination of the Premises, the Project or any adjacent
property, Tenant shall promptly take all actions at its sole expense and in accordance with
applicable Environmental Requirements as are necessary to return the Premises, the Building, the
Project or any adjacent property to the condition existing prior to the time of such contamination,
provided that Landlord’s approval of such action shall first be obtained, which approval shall not
unreasonably be withheld so long as such actions would not potentially have any material adverse
long-term or short-term effect on the Premises or the Project.

     (b) Business. Landlord acknowledges that it is not the intent of this Section 30 to
prohibit Tenant from using the Premises for the Permitted Use. Tenant may operate its business
according to prudent industry practices so long as the use or presence of Hazardous Materials is
strictly and properly monitored according to all then applicable Environmental Requirements. As a
material inducement to Landlord to allow Tenant to use Hazardous Materials in connection with its
business, Tenant agrees to deliver to Landlord prior to the Commencement Date a list identifying
each type of Hazardous Materials to be brought upon, kept, used, stored, handled, treated,
generated on, or released or disposed of from, the Premises and setting forth any and all
governmental approvals or permits required in connection with the presence, use, storage, handling,
treatment, generation, release or disposal of such Hazardous Materials on or from the Premises
(“Hazardous Materials List”). Landlord shall treat the Hazardous Materials List as confidential
and shall endeavor not to release the same except as necessary to its consultants and advisors,
prospective lenders and buyers in the ordinary course of Landlord’s operations and as may be
required by applicable Legal Requirements. Landlord shall inform such parties as to the
confidential nature of the Hazardous Materials List. Tenant shall deliver to Landlord an updated
Hazardous Materials List at least once a year and shall also deliver an updated list before any new
Hazardous Material is brought onto, kept, used, stored, handled, treated, generated on, or released
or disposed of from, the Premises. Tenant shall deliver to Landlord true and correct copies of the
following documents (the “Haz Mat Documents”) relating to the use, storage, handling, treatment,
generation, release or disposal of Hazardous Materials prior to the Commencement Date, or if
unavailable at that time, concurrent with the receipt from or submission to a Governmental
Authority: permits; approvals; reports and correspondence; storage and management plans, notice of
violations of any Legal Requirements; plans relating to the installation of any storage tanks to be
installed in or under the Project (provided, said installation of tanks shall only be permitted
after Landlord has given Tenant its written consent to do so, which consent may be withheld in
Landlord’s sole and absolute discretion); all closure plans or any other documents required by any
and all federal, state and local Governmental Authorities for any storage tanks installed in, on or
under the Project for the closure of any such tanks; and a Surrender Plan (to the extent surrender
in accordance with Section 28 cannot be accomplished in 3 months). Tenant is not required,
however, to provide Landlord with any portion(s) of the Haz Mat Documents containing information of
a proprietary nature which, in and of themselves, do not contain a reference to any Hazardous
Materials or hazardous activities. It is not the intent of this Section to provide Landlord with
information which could be detrimental to Tenant’s business should such information become
possessed by Tenant’s competitors.

 

 

			
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     (c) Tenant Representation and Warranty. Tenant hereby represents and warrants to Landlord
that (i) neither Tenant nor any of its legal predecessors has been required by any prior landlord,
lender or Governmental Authority at any time to take remedial action in connection with Hazardous
Materials contaminating a property which contamination was permitted by Tenant of such predecessor
or resulted from Tenant’s or such predecessor’s action or use of the property in question, and (ii)
Tenant is not subject to any enforcement order issued by any Governmental Authority in connection
with the use, storage, handling, treatment, generation, release or disposal of Hazardous Materials
(including, without limitation, any order related to the failure to make a required reporting to
any Governmental Authority). If Landlord determines that this representation and warranty was not
true as of the date of this lease, Landlord shall have the right to terminate this Lease in
Landlord’s sole and absolute discretion.

     (d) Testing. Landlord shall have the right to conduct annual tests of the Premises to
determine whether any contamination of the Premises or the Project by Hazardous Materials has
occurred as a result of Tenant’s use. Tenant shall be required to pay the cost of such annual test
of the Premises only if such test discloses that Tenant is in violation of the terms and
requirements of this Section 30. In addition, prior to the expiration or earlier
termination of the Term and upon ten (10) days prior written notice to Tenant, Landlord shall have
the right to conduct appropriate tests of the Premises and the Project to determine if
contamination has occurred as a result of Tenant’s use of the Premises. In connection with such
testing, upon the request of Landlord, Tenant shall deliver to Landlord or its consultant such
non-proprietary information concerning the use of Hazardous Materials in or about the Premises by
Tenant or any Tenant Party. If contamination has occurred for which Tenant is liable under this
Section 30, Tenant shall pay all costs to conduct such tests. If no such contamination is
found, Landlord shall pay the costs of such tests (which shall not constitute an Operating
Expense). Landlord shall provide Tenant with a copy of all third party, non-confidential reports
and tests of the Premises made by or on behalf of Landlord during the Term without representation
or warranty and subject to a confidentiality agreement. Tenant shall, at its sole cost and
expense, promptly and satisfactorily remediate any environmental conditions identified by such
testing in accordance with all Environmental Requirements. Landlord’s receipt of or satisfaction
with any environmental assessment in no way waives any rights which Landlord may have against
Tenant.

     (e) Underground Tanks. If underground or other storage tanks storing Hazardous Materials
located on the Premises or the Project are used by Tenant or are hereafter placed on the Premises
or the Project by Tenant, Tenant shall install, use, monitor, operate, maintain, upgrade and manage
such storage tanks, maintain appropriate records, obtain and maintain appropriate insurance,
implement reporting procedures, properly close any underground storage tanks, and take or cause to
be taken all other actions necessary or required under applicable state and federal Legal
Requirements, as such now exists or may hereafter be adopted or amended in connection with the
installation, use, maintenance, management, operation, upgrading and closure of such storage tanks.

     (f) Tenant’s Obligations. Tenant’s obligations under this Section 30 shall survive
the expiration or earlier termination of the Lease. During any period of time after the expiration
or earlier termination of this Lease required by Tenant or Landlord to complete the removal from
the Premises of any Hazardous Materials (including, without limitation, the release and termination
of any licenses or permits restricting the use of the Premises and the completion of the approved
Surrender Plan), Tenant shall continue to pay the full Rent in accordance with this Lease for any
portion of the Premises not relet by Landlord in Landlord’s sole discretion, which Rent shall be
prorated daily.

     (g) Definitions. As used herein, the term “Environmental Requirements” means all applicable
present and future statutes, regulations, ordinances, rules, codes, judgments, orders or other
similar enactments of any Governmental Authority regulating or relating to health, safety, or
environmental conditions on, under, or about the Premises or the Project, or the environment,
including without limitation, the following: the Comprehensive Environmental Response,
Compensation and Liability Act; the Resource Conservation and Recovery Act; and all state and local
counterparts thereto, and any regulations or policies promulgated or issued thereunder. As used
herein, the term “Hazardous Materials” means and includes any substance, material, waste,
pollutant, or contaminant listed or defined as hazardous or toxic, or regulated by reason of its
impact or potential impact on humans, animals and/or

 

 

			
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the environment under any Environmental Requirements, asbestos and petroleum, including crude
oil or any fraction thereof, natural gas liquids, liquefied natural gas, or synthetic gas usable
for fuel (or mixtures of natural gas and such synthetic gas). As defined in Environmental
Requirements, Tenant is and shall be deemed to be the “operator” of Tenant’s “facility” and the
“owner” of all Hazardous Materials brought on the Premises by Tenant or any Tenant Party, and the
wastes, by-products, or residues generated, resulting, or produced therefrom.

     31. Tenant’s Remedies/Limitation of Liability. Landlord shall not be in default hereunder
unless Landlord fails to perform any of its obligations hereunder within 30 days after written
notice from Tenant specifying such failure (unless such performance will, due to the nature of the
obligation, require a period of time in excess of 30 days, then after such period of time as is
reasonably necessary). Upon any default by Landlord, Tenant shall give notice by registered or
certified mail to any Holder of a Mortgage covering the Premises and to any landlord of any lease
of property in or on which the Premises are located and Tenant shall offer such Holder and/or
landlord a reasonable opportunity to cure the default, including time to obtain possession of the
Project by power of sale or a judicial action if such should prove necessary to effect a cure;
provided Landlord shall have furnished to Tenant in writing the names and addresses of all
such persons who are to receive such notices. All obligations of Landlord hereunder shall be
construed as covenants, not conditions; and, except as may be otherwise expressly provided in this
Lease, Tenant may not terminate this Lease for breach of Landlord’s obligations hereunder.

     All obligations of Landlord under this Lease will be binding upon Landlord only during the
period of its ownership of the Premises and not thereafter. The term “Landlord” in this Lease
shall mean only the owner for the time being of the Premises. Upon the transfer by such owner of
its interest in the Premises, such owner shall thereupon be released and discharged from all
obligations of Landlord thereafter accruing, but such obligations shall be binding during the Term
upon each new owner for the duration of such owner’s ownership.

     32. Inspection and Access. Landlord and its agents, representatives, and contractors may
enter the Premises at any reasonable time upon not less than 24 hours advance notice (except in the
case of an emergency) to inspect the Premises and to make such repairs as may be required or
permitted pursuant to this Lease and for any other business purpose. Landlord and Landlord’s
representatives may enter the Premises during business hours on not less than 48 hours advance
written notice (except in the case of emergencies in which case no such notice shall be required
and such entry may be at any time) for the purpose of effecting any such repairs, inspecting the
Premises, showing the Premises to prospective purchasers and, during the last year of the Term, to
prospective tenants or for any other business purpose. Landlord may erect a suitable sign on the
Premises stating the Premises are available to let or that the Project is available for sale.
Landlord may grant easements, make public dedications, designate Common Areas and create
restrictions on or about the Premises, provided that no such easement, dedication,
designation or restriction materially, adversely affects Tenant’s use or occupancy of the Premises
for the Permitted Use. At Landlord’s request, Tenant shall execute such instruments as may be
necessary for such easements, dedications or restrictions. Tenant shall at all times, except in
the case of emergencies, have the right to escort Landlord or its agents, representatives,
contractors or guests while the same are in the Premises, provided such escort does not materially
and adversely affect Landlord’s access rights hereunder.

     33. Security. Tenant acknowledges and agrees that security devices and services, if any,
while intended to deter crime may not in given instances prevent theft or other criminal acts and
that Landlord is not providing any security services with respect to the Premises. Tenant agrees
that Landlord shall not be liable to Tenant for, and Tenant waives any claim against Landlord with
respect to, any loss by theft or any other damage suffered or incurred by Tenant in connection with
any unauthorized entry into the Premises or any other breach of security with respect to the
Premises. Tenant shall be solely responsible for the personal safety of Tenant’s officers,
employees, agents, contractors, guests and invitees while any such person is in, on or about the
Premises and/or the Project. Tenant shall at Tenant’s cost obtain insurance coverage to the extent
Tenant desires protection against such criminal acts.

 

 

			
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     34. Force Majeure. Landlord shall not responsible or liable for delays in the performance of
its obligations hereunder when caused by, related to, or arising out of acts of God, strikes,
lockouts, or other labor disputes, embargoes, quarantines, weather, national, regional, or local
disasters, calamities, or catastrophes, inability to obtain labor or materials (or reasonable
substitutes therefor) at reasonable costs or failure of, or inability to obtain, utilities
necessary for performance, governmental restrictions, orders, limitations, regulations, or
controls, national emergencies, delay in issuance or revocation of permits, enemy or hostile
governmental action, terrorism, insurrection, riots, civil disturbance or commotion, fire or other
casualty, and other causes or events beyond the reasonable control of Landlord (“Force Majeure”).

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

     36. Limitation on Landlord’s Liability. NOTWITHSTANDING ANYTHING SET FORTH HEREIN OR IN ANY
OTHER AGREEMENT BETWEEN LANDLORD AND TENANT TO THE CONTRARY: (A) LANDLORD SHALL NOT BE LIABLE TO
TENANT OR ANY OTHER PERSON FOR (AND TENANT AND EACH SUCH OTHER PERSON ASSUME ALL RISK OF) LOSS,
DAMAGE OR INJURY, WHETHER ACTUAL OR CONSEQUENTIAL TO: TENANT’S PERSONAL PROPERTY OF EVERY KIND AND
DESCRIPTION, INCLUDING, WITHOUT LIMITATION TRADE FIXTURES, EQUIPMENT, INVENTORY, SCIENTIFIC
RESEARCH, SCIENTIFIC EXPERIMENTS, LABORATORY ANIMALS, PRODUCT, 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; (B) THERE SHALL BE NO PERSONAL
RECOURSE TO LANDLORD FOR ANY ACT OR OCCURRENCE IN, ON OR ABOUT THE PREMISES OR ARISING IN ANY WAY
UNDER THIS LEASE OR ANY OTHER AGREEMENT BETWEEN LANDLORD AND TENANT WITH RESPECT TO THE SUBJECT
MATTER HEREOF AND ANY LIABILITY OF LANDLORD HEREUNDER SHALL BE STRICTLY LIMITED SOLELY TO
LANDLORD’S INTEREST IN THE PROJECT OR ANY PROCEEDS FROM SALE OR CONDEMNATION THEREOF AND ANY
INSURANCE PROCEEDS PAYABLE IN RESPECT OF LANDLORD’S INTEREST IN THE PROJECT OR IN CONNECTION WITH
ANY SUCH LOSS; AND (C) IN NO EVENT SHALL ANY PERSONAL LIABILITY BE ASSERTED AGAINST LANDLORD IN
CONNECTION WITH THIS LEASE NOR SHALL ANY RECOURSE BE HAD TO ANY OTHER PROPERTY OR ASSETS OF
LANDLORD OR ANY OF LANDLORD’S OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR CONTRACTORS. UNDER NO
CIRCUMSTANCES SHALL LANDLORD OR ANY OF LANDLORD’S OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR
CONTRACTORS BE LIABLE FOR INJURY TO TENANT’S BUSINESS OR FOR ANY LOSS OF INCOME OR PROFIT
THEREFROM.

     37. Severability. If any clause or provision of this Lease is illegal, invalid or
unenforceable under present or future laws, then and in that event, it is the intention of the
parties hereto that the remainder of this Lease shall not be affected thereby. It is also the
intention of the parties to this Lease that in lieu of each clause or provision of this Lease that
is illegal, invalid or unenforceable, there be added, as a part of this Lease, a clause or
provision as similar in effect to such illegal, invalid or unenforceable clause or provision as
shall be legal, valid and enforceable.

     38. Signs; Exterior Appearance. Tenant shall not, without the prior written consent of
Landlord, which may be granted or withheld in Landlord’s sole discretion: (i) attach any awnings,
exterior lights, decorations, balloons, flags, pennants, banners, painting or other projection to
any outside wall of the Project, (ii) use any curtains, blinds, shades or screens other than
Landlord’s standard window coverings, (iii) coat or otherwise sunscreen the interior or exterior of
any windows, (iv) place any bottles, parcels, or other articles on the window sills, (v) place any
equipment, furniture or other items of personal property on any exterior balcony, or (vi) paint,
affix or exhibit on any part of the Premises or the Project

 

 

	 	 	 
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any signs, notices, window or door lettering, placards, decorations, or advertising media of
any type which can be viewed from the exterior of the Premises. Interior signs on doors and the
directory tablet shall be inscribed, painted or affixed for Tenant by Landlord at the sole cost and
expense of Tenant, and shall be of a size, color and type acceptable to Landlord. Nothing may be
placed on the exterior of corridor walls or corridor doors other than Landlord’s standard
lettering.

     39. Intentionally Omitted.

     40. Miscellaneous.

     (a) Notices. All notices or other communications between the parties shall be in writing and
shall be deemed duly given upon delivery or refusal to accept delivery by the addressee thereof if
delivered in person, or upon actual receipt if delivered by reputable overnight guaranty courier,
addressed and sent to the parties at their addresses set forth above. Landlord and Tenant may from
time to time by written notice to the other designate another address for receipt of future
notices.

     (b) Joint and Several Liability. If and when included within the term “Tenant,” as used in
this instrument, there is more than one person or entity, each shall be jointly and severally
liable for the obligations of Tenant.

     (c) Intentionally Omitted.

     (d) Recordation. Neither this Lease nor a memorandum of lease shall be filed by or on behalf
of Tenant in any public record. Landlord may prepare and file, and upon request by Landlord Tenant
will execute, a memorandum of lease.

     (e) Interpretation. The normal rule of construction to the effect that any ambiguities are to
be resolved against the drafting party shall not be employed in the interpretation of this Lease or
any exhibits or amendments hereto. Words of any gender used in this Lease shall be held and
construed to include any other gender, and words in the singular number shall be held to include
the plural, unless the context otherwise requires. The captions inserted in this Lease are for
convenience only and in no way define, limit or otherwise describe the scope or intent of this
Lease, or any provision hereof, or in any way affect the interpretation of this Lease.

     (f) Not Binding Until Executed. The submission by Landlord to Tenant of this Lease shall have
no binding force or effect, shall not constitute an option for the leasing of the Premises, nor
confer any right or impose any obligations upon either party until execution of this Lease by both
parties.

     (g) Limitations on Interest. It is expressly the intent of Landlord and Tenant at all times
to comply with applicable law governing the maximum rate or amount of any interest payable on or in
connection with this Lease. If applicable law is ever judicially interpreted so as to render
usurious any interest called for under this Lease, or contracted for, charged, taken, reserved, or
received with respect to this Lease, then it is Landlord’s and Tenant’s express intent that all
excess amounts theretofore collected by Landlord be credited on the applicable obligation (or, if
the obligation has been or would thereby be paid in full, refunded to Tenant), and the provisions
of this Lease immediately shall be deemed reformed and the amounts thereafter collectible hereunder
reduced, without the necessity of the execution of any new document, so as to comply with the
applicable law, but so as to permit the recovery of the fullest amount otherwise called for
hereunder.

     (h) Choice of Law. Construction and interpretation of this Lease shall be governed by the
internal laws of the state in which the Premises are located, excluding any principles of conflicts
of laws.

     (i) Time. Time is of the essence as to the performance of Tenant’s obligations under this
Lease.

 

 

	 	 	 
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     (j) Incorporation by Reference. All exhibits and addenda attached hereto are hereby
incorporated into this Lease and made a part hereof. If there is any conflict between such
exhibits or addenda and the terms of this Lease, such exhibits or addenda shall control.

     (k) Hazardous Activities. Notwithstanding any other provision of this Lease, Landlord, for
itself and its employees, agents and contractors, reserves the right to refuse to perform any
repairs or services in any portion of the Premises which, pursuant to Tenant’s routine safety
guidelines, practices or custom or prudent industry practices, require any form of protective
clothing or equipment other than safety glasses. In any such case, Tenant shall contract with
parties who are acceptable to Landlord, in Landlord’s reasonable discretion, for all such repairs
and services, and Landlord shall, to the extent required, equitably adjust Tenant’s Share of
Operating Expenses in respect of such repairs or services to reflect that Landlord is not providing
such repairs or services to Tenant.

     (l) Mission Bay Requirements. Tenant acknowledges and agrees that the use and operation of
the Project are governed by, among other things, the requirements and disclosures set forth on
Exhibit J attached hereto.

 

 

	 	 	 
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     IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the day and year first
above written.

	 	 	 	 	 	 	 
	 	 	TENANT:	 	 
	 
	 	 	 	 	 	 
	 	 	SIRNA THERAPEUTICS, INC.,	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	          /s/ Howard W. Robin	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Howard W. Robin	 	 
	 

	 	Title:
	 	President and Chief Executive Officer	 	 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	LANDLORD:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	ARE-SAN FRANCISCO NO. 26, LLC,	 	 
	 	 	a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	ALEXANDRIA REAL ESTATE EQUITIES, L.P.,

a Delaware limited partnership,
managing member	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	ARE-QRS CORP., a Maryland corporation,
general partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ Jennifer Pappas	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Its:
	 	VP and Assistant Secretary	 	 

 

 

1700 Owens/Sirna — Page 1

EXHIBIT A-1 TO LEASE

DESCRIPTION OF FOURTH FLOOR PREMISES

[Attached]

 

 

1700 Owens/Sirna — Page 1

EXHIBIT A-2 TO LEASE

DESCRIPTION OF FIFTH FLOOR PREMISES

Landlord and Tenant acknowledge that Tenant has not yet selected which of the two Space Plans
Tenant would like use for the Fifth Floor Premises and accordingly both are being attached as
Exhibit A-2 and Exhibit G.

 

 

1700 Owens/Sirna — Page 1

EXHIBIT B TO LEASE

DESCRIPTION OF PROJECT

Real property in the City of San Francisco, County of San Francisco, State of California,
described as follows:

LOT 7, AS SAID LOT IS SHOWN ON THAT CERTAIN MAP ENTITLED “FINAL MAP PLANNED DEVELOPMENT MISSION
BAY, BEING PHASE 1 OF A SUBDIVISION OF LOT 1 OF ASSESSOR’S BLOCK 8709, AS SHOWN ON THAT CERTAIN MAP
ENTITLED ‘MAP OF MISSION BAY’ RECORDED ON JULY 19, 1999, IN BOOK Z OF MAPS AT PAGES 97-119 IN THE
OFFICE OF THE RECORDER OF THE CITY AND COUNTY OF SAN FRANCISCO, CALIFORNIA”, FILED JANUARY 25, 2001
IN BOOK Z OF MAPS AT PAGES 154 TO 162, INCLUSIVE, IN THE OFFICE OF THE RECORDER OF THE CITY AND
COUNTY OF SAN FRANCISCO, CALIFORNIA, AS SUCH FINAL MAP WAS CORRECTED BY THAT CERTAIN “CERTIFICATE
OF CORRECTION” RECORDED APRIL 2, 2003, IN REEL I357, IMAGE 396, SERIES NO. 2003-H398817, IN THE
OFFICE OF SUCH RECORDER.

[The foregoing legal description does not include any exceptions or reservations or any
easements that may be appurtenant to such real property]

 

 

1700 Owens/Sirna — Page 1

EXHIBIT C TO LEASE

WORK LETTER

     THIS WORK LETTER dated February 8, 2006 (this “Work Letter”) is made and entered into by and
between ARE-SAN FRANCISCO NO. 26, LLC, LLC, a Delaware limited liability company (“Landlord”), and
SIRNA THERAPEUTICS, INC.,, a Delaware corporation (“Tenant”), and is attached to and made a part of
the Lease dated February 8, 2006 (the “Lease”), by and between Landlord and Tenant. Any initially
capitalized terms used but not defined herein shall have the meanings given them in the Lease.

     1. General Requirements.

     (a) Tenant’s Authorized Representative. Tenant designates Michael French and Bharat Chowrira
(either such individual acting alone, “Tenant’s Representative”) as the only persons authorized to
act for Tenant pursuant to this Work Letter. Landlord shall not be obligated to respond to or act
upon any request, approval, inquiry or other communication (“Communication”) from or on behalf of
Tenant in connection with this Work Letter unless such Communication is in writing from Tenant’s
Representative. Tenant may change either Tenant’s Representative at any time upon not less than 5
business days advance written notice to Landlord. Neither Tenant nor Tenant’s Representative shall
be authorized to direct Landlord’s contractors in the performance of Landlord’s Work (as
hereinafter defined).

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

     (c) Architects, Consultants and Contractors. Landlord and Tenant hereby acknowledge and agree
that: (i) the general contractor shall be Turner Construction Company for the Tenant Improvements,
and (ii) Dowler Gruman Associates shall be the architect (the “TI Architect”) for the Tenant
Improvements. Landlord shall use reasonable efforts to competitively bid the Tenant Improvements
which are to be performed by subcontractors and the subcontractors shall be reasonably acceptable
to Tenant.

     (d) Meetings. Landlord shall arrange regular constructions meetings in connection with the
construction of the Tenant Improvements and Tenant shall be invited to attend the same.

     2. Tenant Improvements.

     (a) Tenant Improvements Defined. As used herein, “Tenant Improvements” shall mean all
improvements to the Project of a fixed and permanent nature as shown on the TI Construction
Drawings, as defined in Section 2(c) below. Other than Landlord’s Work (as defined in Section 3(a)
below, Landlord shall not have any obligation whatsoever with respect to the finishing of the
Premises for Tenant’s use and occupancy.

     (b) Tenant’s Space Plans. Landlord and Tenant acknowledge and agree that the plan prepared by
Dowler Gruman Associates and scope of work attached hereto as Exhibit G (collectively, the “TI
Space Plan”) have been approved by both Landlord and Tenant. Landlord and Tenant further
acknowledge that Tenant has not yet selected which of the two Space Plans Tenant would like use for
the Fifth Floor Premises and accordingly both are being attached as Exhibit A-2 and Exhibit G.
Landlord

 

 

1700 Owens/Sirna — Page 2

and Tenant further acknowledge and agree that any changes to the TI Space Plan constitute
Change
Requests the costs of which changes shall be paid for by Tenant. Tenant shall be solely
responsible for all costs incurred by Landlord to alter the Building (or Landlord’ s plans for the
Building) as a result of Tenant’s requested changes.

     (c) Working Drawings. Not later than March 20, 2006, Landlord shall cause the TI Architect to
prepare and deliver to Tenant for review and comment construction plans, specifications and
drawings for the Tenant Improvements (“TI Construction Drawings”), which TI Construction Drawings
shall be prepared substantially in accordance with the TI Space Plan. Tenant shall be solely
responsible for ensuring that the TI Construction Drawings reflect Tenant’s requirements for the
Tenant Improvements. Tenant shall deliver its written comments on the TI Construction Drawings to
Landlord not later than 10 business days after Tenant’s receipt of the same; provided, however,
that Tenant may not disapprove any matter that is consistent with the TI Space Plan without
submitting a Change Request. Landlord and the TI Architect shall consider all such comments in
good faith and shall, within 10 business days after receipt, notify Tenant how Landlord proposes to
respond to such comments, but Tenant’s review rights pursuant to the foregoing sentence shall not
delay the design or construction schedule for the Tenant Improvements. Any disputes in connection
with such comments shall be resolved in accordance with Section 2(d) hereof. Provided that the
design reflected in the TI Construction Drawings is consistent with the TI Space Plan, Tenant shall
approve the TI Construction Drawings submitted by Landlord, unless Tenant submits a Change Request.
Once approved by Tenant, subject to the provisions of Section 4 below, Landlord shall not
materially modify the TI Construction Drawings except as may be reasonably required in connection
with the issuance of the TI Permit (as defined in Section 3(b) below).

     (d) Approval and Completion. It is hereby acknowledged by Landlord and Tenant that the TI
Construction Drawings must be completed and approved not later than April 1, 2006, in order for the
Landlord’s Work to be Substantially Complete by the Target Commencement Date (as defined in the
Lease). Upon any dispute regarding the design of the Tenant Improvements, which is not settled
within 10 business days after notice of such dispute is delivered by one party to the other, Tenant
may make the final decision regarding the design of the Tenant Improvements, provided (i) Tenant
acts reasonably and such final decision is either consistent with or a compromise between
Landlord’s and Tenant’s positions with respect to such dispute, (ii) that all costs and expenses
resulting from any such decision by Tenant shall be payable out of the TI Fund (as defined in
Section 5(d) below), and (iii) Tenant’s decision will not affect the base Building, structural
components of the Building or any Building systems. Any changes to the TI Construction Drawings
following Landlord’s and Tenant’s approval of same requested by Tenant shall be processed as
provided in Section 4 hereof.

     3. Performance of Landlord’s Work.

     (a) Definition of Landlord’s Work. As used herein, “Landlord’s Work” shall mean the work of
constructing the Tenant Improvements.

     (b) Commencement and Permitting. Landlord shall commence construction of the Tenant
Improvements upon obtaining a building permit (the “TI Permit”) authorizing the construction of the
Tenant Improvements consistent with the TI Construction Drawings approved by Tenant. The cost of
obtaining the TI Permit shall be payable from the TI Fund. Tenant shall assist Landlord in
obtaining the TI Permit. If any Governmental Authority having jurisdiction over the construction
of Landlord’s Work or any portion thereof shall impose terms or conditions upon the construction
thereof that: (i) are inconsistent with Landlord’s obligations hereunder, (ii) increase the cost
of constructing Landlord’s Work, or (iii) will materially delay the construction of Landlord’s
Work, Landlord and Tenant shall reasonably and in good faith seek means by which to mitigate or
eliminate any such adverse terms and conditions.

     (c) Completion of Landlord’s Work. On or before the Target Commencement Date (subject to
Tenant Delays and Force-Majeure Delays), Landlord shall substantially complete or cause to be
substantially completed Landlord’s Work in a good and workmanlike manner, in accordance with the TI

 

 

1700 Owens/Sirna — Page 3

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

     (d) Selection of Materials. Where more than one type of material or structure is indicated on
the TI Construction Drawings approved by Landlord and Tenant, the option will be selected at
Landlord’s sole and absolute subjective discretion. If Tenant has expressed a preference with
respect to the type of material indicated on the TI Construction Drawings Landlord shall endeavor
to take Tenant’s preference into account when making any selections. As to all building materials
and equipment that Landlord is obligated to supply under this Work Letter, Landlord shall select
the manufacturer thereof in its sole and absolute subjective discretion.

     (e) Delivery of the Premises. When Landlord’s Work is Substantially Complete, subject to the
remaining terms and provisions of this Section 3(e), Tenant shall accept the Premises. Tenant’s
taking possession and acceptance of the Premises shall not constitute a waiver of: (i) any
warranty with respect to workmanship (including installation of equipment) or material (exclusive
of equipment provided directly by manufacturers), (ii) any non-compliance of Landlord’s Work with
applicable Legal Requirements, or (iii) any claim that Landlord’s Work was not completed
substantially in accordance with the TI Construction Drawings (subject to Minor Variations and such
other changes as are permitted hereunder) (collectively, a “Construction Defect”). Tenant shall
have one year after Substantial Completion within which to notify Landlord of any such Construction
Defect discovered by Tenant, and Landlord shall use reasonable efforts to remedy or cause the
responsible contractor to remedy any such Construction Defect within 90 days thereafter.
Notwithstanding the foregoing, Landlord shall not be in default under the Lease if the applicable
contractor, despite Landlord’s reasonable efforts, fails to remedy such Construction Defect within
such 90-day period, in which case Landlord shall cooperate, at no cost to Landlord, with Tenant
should Tenant elect to pursue a claim against such contractor.

     Tenant shall be entitled to receive the benefit of all construction warranties and
manufacturer’s equipment warranties relating to equipment installed in the Premises. If requested
by Tenant, Landlord shall attempt to obtain extended warranties from manufacturers and suppliers of
such equipment, but the cost of any such extended warranties shall be borne solely out of the TI
Fund. Landlord shall promptly undertake and complete, or cause to be completed, all punch list
items.

     (f) Commencement Date Delay. Except as otherwise provided in the Lease, Delivery of the
Premises shall occur when Landlord’s Work has been Substantially Completed, except to the extent
that completion of Landlord’s Work shall have been actually delayed by any one or more of the
following causes (“Tenant Delay”):

     (i) Tenant’s Representative was not available to give or receive any Communication or
to take any other action required to be taken by Tenant hereunder;

     (ii) Tenant’s request for Change Requests (as defined in Section 4(a) below) whether or
not any such Change Requests are actually performed;

     (iii) Construction of any Change Requests;

 

 

1700 Owens/Sirna — Page 4

     (iv) Tenant’s request for materials, finishes or installations requiring unusually long
lead times;

     (v) Tenant’s delay in reviewing, revising or approving plans and specifications beyond
the periods set forth herein;

     (vi) Tenant’s delay in providing information critical to the normal progression of the
Project. Tenant shall provide such information as soon as reasonably possible, but in no
event longer than one week after receipt of any request for such information from Landlord;

     (vii) Tenant’s delay in making payments to Landlord for Excess TI Costs (as defined in
Section 5(d) below); or

     (viii) Any other act or omission by Tenant or any Tenant Party (as defined in the
Lease), or persons employed by any of such persons.

If Delivery is delayed for any of the foregoing reasons, then Landlord shall cause the TI Architect
to certify the date on which the Tenant Improvements would have been completed but for such Tenant
Delay and such certified date shall be the date of Delivery.

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

     (a) Tenant’s Request For Changes. If Tenant shall request changes to the Tenant Improvements
(“Changes”), Tenant shall request such Changes by notifying Landlord in writing in substantially
the same form as the AIA standard change order form (a “Change Request”), which Change Request
shall detail the nature and extent of any such Change. Such Change Request must be signed by
Tenant’s Representative. Landlord shall, before proceeding with any Change, use commercially
reasonable efforts to respond to Tenant as soon as is reasonably possible with an estimate of: (i)
the time it will take, and (ii) the architectural and engineering fees and costs that will be
incurred, to analyze such Change Request (which costs shall be paid from the TI Fund to the extent
actually incurred, whether or not such change is implemented). Landlord shall thereafter submit to
Tenant in writing, within 5 business days of receipt of the Change Request (or such longer period
of time as is reasonably required depending on the extent of the Change Request), an analysis of
the additional cost or savings involved, including, without limitation, architectural and
engineering costs and the period of time, if any, that the Change will extend the date on which
Landlord’s Work will be Substantially Complete. Any such delay in the completion of Landlord’s
Work caused by a Change, including any suspension of Landlord’s Work while any such Change is being
evaluated and/or designed, shall be Tenant Delay.

     (b) Implementation of Changes. If Tenant: (i) approves in writing the cost or savings and
the estimated extension in the time for completion of Landlord’s Work, if any, and (ii) deposits
with Landlord any Excess TI Costs required in connection with such Change, Landlord shall cause the
approved Change to be instituted. Notwithstanding any approval or disapproval by Tenant of any
estimate of the delay caused by such proposed Change, the TI Architect’s determination of the
amount of Tenant Delay in connection with such Change shall be final and binding on Landlord and
Tenant.

     5. Costs.

     (a) Budget For Tenant Improvements. Before the commencement of construction of the Tenant
Improvements, Landlord shall obtain a detailed breakdown by trade of the costs incurred or that
will be incurred in connection with the design and construction of the Tenant Improvements (the
“Budget”). The Budget shall be based upon the TI Construction Drawings approved by Tenant and
shall

 

 

1700 Owens/Sirna — Page 5

include a payment to Landlord of administrative rent (“Administrative Rent”) equal to $3.00
per rentable square foot of the Premises for monitoring and inspecting the construction of the
Tenant Improvements and Changes, which sum shall be payable from the TI Fund (as defined in Section
5(d). Administrative Rent shall include, without limitation, all out-of-pocket costs, expenses and
fees incurred by or on behalf
of Landlord arising from, out of, or in connection with monitoring the construction of the
Tenant Improvements and Changes, and shall be payable out of the TI Fund. If the Budget is greater
than the TI Allowance, Tenant shall deposit with Landlord the difference, in cash, prior to the
commencement of construction of the Tenant Improvements or Changes, for disbursement by Landlord as
described in Section 5(d).

     (b) TI Allowance. TI Allowance. Landlord shall provide to Tenant a tenant improvement
allowance (the “TI Allowance”) of $185 per rentable square foot of the Premises. The TI Allowance
shall be disbursed in accordance with this Work Letter.

     Tenant shall have no right to the use or benefit (including any reduction to or payment of
Base Rent) of any portion of the TI Allowance not required for the construction of (i) the Tenant
Improvements described in the TI Construction Drawings approved pursuant to Section 2(d) or (ii)
any Changes pursuant to Section 4.

     (c) Costs Includable in TI Fund. The TI Fund shall be used solely for the payment of design,
permits and construction costs in connection with the construction of the Tenant Improvements,
including, without limitation, the cost of electrical power and other utilities used in connection
with the construction of the Tenant Improvements, the cost of preparing the TI Space Plan and the
TI Construction Drawings, all costs set forth in the Budget, including Landlord’s Administrative
Rent, Landlord’s out-of-pocket expenses, costs resulting from Tenant Delays and the cost of Changes
(collectively, “TI Costs”). Notwithstanding anything to the contrary contained herein, the TI Fund
shall not be used to purchase any furniture, personal property or other non-Building system
materials or equipment, including, but not limited to, Tenant’s voice or data cabling, non-ducted
biological safety cabinets and other scientific equipment not incorporated into the Tenant
Improvements.

     (d) Excess TI Costs. Landlord shall have no obligation to bear any portion of the cost of any
of the Tenant Improvements except to the extent of the TI Allowance. If at any time the remaining
TI Costs under the Budget exceed the remaining unexpended TI Allowance, Tenant shall deposit with
Landlord, as a condition precedent to Landlord’s obligation to complete the Tenant Improvements,
100% of the then current TI Cost in excess of the remaining TI Allowance (“Excess TI Costs”). If
Tenant fails to deposit any Excess TI Costs with Landlord, Landlord shall have all of the rights
and remedies set forth in the Lease for nonpayment of Rent (including, but not limited to, the
right to interest at the Default Rate and the right to assess a late charge). For purposes of any
litigation instituted with regard to such amounts, those amounts will be deemed Rent under the
Lease. The TI Allowance and Excess TI Costs are herein referred to as the “TI Fund.” Funds
deposited by Tenant shall be the first disbursed to pay TI Costs. Notwithstanding anything to the
contrary set forth in this Section 5(d), Tenant shall be fully and solely liable for TI Costs and
the cost of Minor Variations in excess of the TI Allowance. If upon Substantial Completion of the
Tenant Improvements and the payment of all sums due in connection therewith there remains any
undisbursed portion of the TI Fund, Tenant shall be entitled to such undisbursed TI Fund solely to
the extent of any Excess TI Costs deposit Tenant has actually made with Landlord

     6. Tenant Access.

     (a) Tenant’s Access Rights. Landlord hereby agrees to permit Tenant access, at Tenant’s sole
risk and expense, to the Building (i) 15 days prior to the Commencement Date to perform any work
(“Tenant’s Work”) required by Tenant other than Landlord’s Work, provided that such Tenant’s Work
is coordinated with the TI Architect and the general contractor, and complies with the Lease and
all other reasonable restrictions and conditions Landlord may impose, and (ii) prior to the
completion of Landlord’s

 

 

1700 Owens/Sirna — Page 6

Work, to inspect and observe work in process; all such access shall be during normal business
hours or at such other times as are reasonably designated by Landlord. Notwithstanding the
foregoing, Tenant shall have no right to enter onto the Premises or the Project unless and until
Tenant shall deliver to Landlord evidence reasonably satisfactory to Landlord demonstrating that
any insurance reasonably required by Landlord in connection with such pre-commencement access
(including, but not limited to, any insurance that Landlord may require pursuant to the Lease) is
in full force and effect. Any entry by
Tenant shall comply with all established safety practices of Landlord’s contractor and
Landlord until completion of Landlord’s Work and acceptance thereof by Tenant.

     (b) No Interference. Neither Tenant nor any Tenant Party (as defined in the Lease) shall
interfere with the performance of Landlord’s Work, nor with any inspections or issuance of final
approvals by applicable Governmental Authorities, and upon any such interference, Landlord shall
have the right to exclude Tenant and any Tenant Party from the Premises and the Project until
Substantial Completion of Landlord’s Work.

     (c) No Acceptance of Premises. The fact that Tenant may, with Landlord’s consent, enter into
the Project prior to the date Landlord’s Work is Substantially Complete for the purpose of
performing Tenant’s Work shall not be deemed an acceptance by Tenant of possession of the Premises,
but in such event Tenant shall defend with counsel reasonably acceptable by Landlord, indemnify and
hold Landlord harmless from and against any loss of or damage to Tenant’s property, completed work,
fixtures, equipment, materials or merchandise, and from liability for death of, or injury to, any
person, caused by the act or omission of Tenant or any Tenant Party.

     7. Miscellaneous.

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

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

 

 

1700 Owens/Sirna — Page 7

     IN WITNESS WHEREOF, Landlord and Tenant have executed this Work Letter to be effective on the
date first above written.

	 	 	 	 	 	 	 
	 	 	TENANT:	 	 
	 
	 	 	 	 	 	 
	 	 	SIRNA THERAPEUTICS, INC.,	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Howard W. Robin	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:
	 	Howard W. Robin	 	 
	 

	 	Title:
	 	President and Chief Executive Officer	 	 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	LANDLORD:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	ARE-SAN FRANCISCO NO. 26, LLC,	 	 
	 	 	a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	ALEXANDRIA REAL ESTATE EQUITIES, L.P.,
a Delaware limited partnership,
managing member	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	ARE-QRS CORP., a Maryland corporation,
general partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ Jennifer Pappas	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Its:
	 	VP and Assistant Secretary	 	 

 

 

1700 Owens/Sirna — Page 1

EXHIBIT D TO LEASE

ACKNOWLEDGMENT OF COMMENCEMENT DATE

     This ACKNOWLEDGMENT OF COMMENCEMENT DATE is made this
                     day of
                    , 200_,
between ARE-SAN FRANCISCO NO. 26, LLC, a Delaware limited liability company (“Landlord”), and SIRNA
THERAPEUTICS, INC., a Delaware corporation (“Tenant”), and is attached to and made a part of the
Lease dated February ___, 2006 (the “Lease”), by and between Landlord and Tenant. Any initially
capitalized terms used but not defined herein shall have the meanings given them in the Lease.

     Landlord and Tenant hereby acknowledge and agree, for all purposes of the Lease, that the
Commencement Date of the Base Term of the Lease is                     ,
                    , and the termination
date of the Base Term of the Lease shall be midnight on                     ,
                    .

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

	 	 	 	 	 	 	 
	 	 	TENANT:	 	 
	 
	 	 	 	 	 	 
	 	 	SIRNA THERAPEUTICS, INC.,	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	LANDLORD:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	ARE-SAN FRANCISCO NO. 26, LLC,	 	 
	 	 	a Delaware limited liability company	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	ALEXANDRIA REAL ESTATE EQUITIES, L.P.,

a Delaware limited partnership,
managing member	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	ARE-QRS CORP., a Maryland corporation,
general partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 

 

 

1700 Owens/Sirna — Page 1

EXHIBIT E TO LEASE

RULES AND REGULATIONS

     1. The sidewalk, entries, and driveways of the Project shall not be obstructed by Tenant, or
any Tenant Party, or used by them for any purpose other than ingress and egress to and from the
Premises.

     2. Tenant shall not place any objects, including antennas, outdoor furniture, etc., in the
parking areas, landscaped areas or other areas outside of its Premises, or on the roof of the
Project.

     3. Except for animals assisting the disabled, no animals shall be allowed in the offices,
halls, or corridors in the Project.

     4. Tenant shall not disturb the occupants of the Project or adjoining buildings by the use of
any radio or musical instrument or by the making of loud or improper noises.

     5. If Tenant desires telegraphic, telephonic or other electric connections in the Premises,
Landlord or its agent will direct the electrician as to where and how the wires may be introduced;
and, without such direction, no boring or cutting of wires will be permitted. Any such
installation or connection shall be made at Tenant’s expense.

     6. Tenant shall not install or operate any steam or gas engine or boiler, or other mechanical
apparatus in the Premises, except as specifically approved in the Lease and the TI Construction
Drawings. The use of oil, gas or inflammable liquids for heating, lighting or any other purpose is
expressly prohibited. Explosives or other articles deemed extra hazardous shall not be brought
into the Project.

     7. Parking any type of recreational vehicles is specifically prohibited on or about the
Project. Except for the overnight parking of operative vehicles, no vehicle of any type shall be
stored in the parking areas at any time. In the event that a vehicle is disabled, it shall be
removed within 48 hours. There shall be no “For Sale” or other advertising signs on or about any
parked vehicle. All vehicles shall be parked in the designated parking areas in conformity with
all signs and other markings. All parking will be open parking, and no reserved parking, numbering
or lettering of individual spaces will be permitted except as specified by Landlord.

     8. Tenant shall maintain the Premises free from rodents, insects and other pests.

     9. Landlord reserves the right to exclude or expel from the Project any person who, in the
judgment of Landlord, is intoxicated or under the influence of liquor or drugs or who shall in any
manner do any act in violation of the Rules and Regulations of the Project.

     10. Tenant shall not cause any unnecessary labor by reason of Tenant’s carelessness or
indifference in the preservation of good order and cleanliness. Landlord shall not be responsible
to Tenant for any loss of property on the Premises, however occurring, or for any damage done to
the effects of Tenant by the janitors or any other employee or person.

     11. Tenant shall give Landlord prompt notice of any defects in the water, lawn sprinkler,
sewage, gas pipes, electrical lights and fixtures, heating apparatus, or any other service
equipment affecting the Premises.

     12. Tenant shall not permit storage outside the Premises, including without limitation,
outside storage of trucks and other vehicles, or dumping of waste or refuse or permit any harmful
materials to be placed in any drainage system or sanitary system in or about the Premises.

 

 

1700 Owens/Sirna — Page 2

     13. All moveable trash receptacles provided by the trash disposal firm for the Premises must
be kept in the trash enclosure areas, if any, provided for that purpose.

     14. No auction, public or private, will be permitted on the Premises or the Project.

     15. No awnings shall be placed over the windows in the Premises except with the prior written
consent of Landlord.

     16. The Premises shall not be used for lodging, sleeping or cooking (except with respect to
the use of a microwave in a kitchen or small kitchenette) or for any immoral or illegal purposes or
for any purpose other than that specified in the Lease. No gaming devices shall be operated in the
Premises.

     17. Tenant shall ascertain from Landlord the maximum amount of electrical current which can
safely be used in the Premises, taking into account the capacity of the electrical wiring in the
Project and the Premises and the needs of other tenants, and shall not use more than such safe
capacity. Landlord’s consent to the installation of electric equipment shall not relieve Tenant
from the obligation not to use more electricity than such safe capacity.

     18. Tenant assumes full responsibility for protecting the Premises from theft, robbery and
pilferage.

     19. Tenant shall not install or operate on the Premises any machinery or mechanical devices of
a nature not directly related to Tenant’s ordinary use of the Premises and shall keep all such
machinery free of vibration, noise and air waves which may be transmitted beyond the Premises.

 

 

1700 Owens/Sirna — Page 1

EXHIBIT F TO LEASE

TENANT’S PERSONAL PROPERTY

None except as set forth below:

Nuclear Magnetic Resonance machine

Mass Spectrometer

Dryer

Autoclave

Glass washer

Autoclave Cage Waster

8 fume hoods in Chemistry Lab(s)

Walk-in fume hood in Large Chemistry Lab

Microscope

Notwithstanding anything to the contrary contained in the Lease or in this Exhibit F, none of the
items above shall constitute a Removable Installation unless all of the following conditions are
true with respect to the item in question: (i) the cost of the item is paid for solely by Tenant
(and not paid for by Landlord or paid for out of the TI Fund), and (ii) the item is not an item
listed on Exhibit G that is noted as Provided By Alexandria.

 

 

1700 Owens/Sirna — Page 1

EXHIBIT G TO LEASE

TENANT’S SCOPE OF WORK

Provided by Alexandria

Alexandria is proposing to provide the following building common systems and finishes to specified
areas, which are described in detail later in this memo:

	 	•	 	Ceiling Heights: 10’ in labs and open office areas, 10’ stepping up to 12’ at mullion
for offices and conference rooms along window line.
	 
	 	•	 	Doors: maple 8’ or 9’ (except hollow metal for vivarium, tissue culture, and glass wash
areas).
	 
	 	•	 	Flooring: VCT flooring in lab and lab support areas, except epoxy flooring in vivarium
and glass wash, and sheet vinyl flooring in tissue culture, and chemical storage room.
	 
	 	•	 	Metal lab casework with wood door and drawer fronts.
	 
	 	•	 	Convenience power throughout, wire mold to lab benches.
	 
	 	•	 	Emergency power for 50% of exhaust fans, and to typical freezers and refrigerators.
	 
	 	•	 	Ceilings: Vinyl faced ceiling tile in all lab areas, except hard lid ceilings in
vivarium, tissue culture, and glass wash areas. Standard drop ceilings in all other areas.
	 
	 	•	 	ARE Standard light fixtures throughout (parabolic).
	 
	 	•	 	ARE Standard 2’ side lights on private offices.
	 
	 	•	 	Ring and string (“R&S”) provided throughout for subsequent tenant-provided telephone and
data cabling and installation.
	 
	 	•	 	Base building security system on the ground floor and to the exterior building. After
hour key card access only to Sirna’s floor from elevator cab.

The detailed list that follows is organized by room, and includes key building features and
services that ARE will provide per the Lease. Please also refer to the conceptual floor plan
attached at the end of this list.

Any item that is “dashed” on the floor plan is to be tenant-provided (except for reagent racks on
the peninsulas).

Biology Lab & Lab Support Areas

	 	•	 	Bio Lab (20): 4 peninsulas with reagent racks (2 of the peninsulas each have 1 sink),
fume hoods in biology labs are: 6’ (this lab contains 1 fume hood), flammable/solvent base
cabinets, adjacent to fume hood is casework, some epower to equipment walls. 1 emergency
shower/eyewash combo.
	 
	 	•	 	Bio Lab (12): 2, 6’ fume hoods, 2 wall benches (1 with a sink, 2 peninsulas with
reagent racks, some epower on equipment wall, 1 emergency shower/eyewash combo.
	 
	 	•	 	Cold Room: Cold box.

Tissue Culture

	 	•	 	In each room: HEPA filtered, 1 sink with base cabinet, casework, some epower.

Vivarium

	 	•	 	HEPA filters throughout.
	 
	 	•	 	Metal casework (no wood drawer fronts).
	 
	 	•	 	Ceilings: Vinyl faced ceiling tiles in the hallways and clean/dirty cage areas.
	 
	 	•	 	Hot water heater for cage washer.
	 
	 	•	 	Holding rooms with some epower and ventilation drops.
	 
	 	•	 	Clean side of Cage Wash room: floor sink, floor drain, and single water drop to bottle feeder.

 

 

1700 Owens/Sirna — Page 2

	 	•	 	Dirty side of Cage Wash room: scullery sink, floor sink, floor drain, emergency
shower/eyewash combo in Hallway.
	 
	 	•	 	Framed openings for cage washer and autoclave.
	 
	 	•	 	2 Procedure rooms with 1 sink each and casework.
	 
	 	•	 	1 Procedure room with 1 sink, casework, 4 foot fume hood.
	 
	 	•	 	1 unisex bathroom with 1 toilet, 1 sink, and 1 shower.

Glass Wash/Media Prep

	 	•	 	Floor sink on dirty side, scullery sink with case work, glassware cabinets.
	 
	 	•	 	Framed openings for glass washer, autoclave, dryer.

NMR

	 	•	 	Some epower, 220V/20A service, (otherwise no special construction).

Microscope Room

	 	•	 	Some epower.

Mechanical Room

	 	•	 	200V/9A and epower.

Equipment Hallway

	 	•	 	Some epower and 208 outlets on both walls.

Synthesis Purification

	 	•	 	Some epower, rough-in of sink plumbing.

Chemistry Lab — Large

	 	•	 	Emergency shower/eyewash combo at each exit door (2 total),
	 
	 	•	 	At each of 10, 8’ fume hoods: cup sink and argon gas only.
	 
	 	•	 	3 peninsulas of casework, reagent racks, each having 1 sink.
	 
	 	•	 	Some epower to tenant provided equipment along walls.
	 
	 	•	 	Argon distribution system.
	 
	 	•	 	Nine additional argon gas drops to future fume hood locations. These nine argon gas
drops may be split between the large and small chemistry room at Tenant’s election

Chemistry
Lab — Small

	 	•	 	Viewing window between 9 Carrel Office and Small Chemistry Lab (no racks on casework
against common wall with 9 Carrel Office).
	 
	 	•	 	Emergency shower/eyewash combo.
	 
	 	•	 	1 peninsula of casework with 1 sink.
	 
	 	•	 	1 wall bench with 1 sink.
	 
	 	•	 	Argon distribution system stubbed into room.

Office/Lobby

	 	•	 	Lobby: stone tiles.
	 
	 	•	 	Conference/Library, Seminar, and Board Room: carpet, power and ring & string data to
center of room. Full height walls and insulation in Conf./Library, Board Room, and seminar
room.
	 
	 	•	 	Walls between Seminar Room and the lobby to be 4 pieces of floor to ceiling glass on
Seminar Room and 3 pieces of floor to ceiling glass on Conference/Library.
	 
	 	•	 	Open Office Left, Right, & Right Corner: Carpet. Power.
	 
	 	•	 	Private Offices (unless specified otherwise): Power and R&S for data.
	 
	 	•	 	Copy/Mail: VCT, power, R&S for data.

 

 

1700 Owens/Sirna — Page 3

	 	•	 	CEO’s Conf Rooms (in the CEO suite area): Power & R&S for data, full height walls and
insulation.
	 
	 	•	 	CEO’s Office: 3 pieces of floor to ceiling glass, power & R&S for data, full height
walls and insulation.
	 
	 	•	 	Private offices proximate to CEO’s office (6 total): Full height walls and insulation.
	 
	 	•	 	Carrels (9): Power in the walls and ceiling.
	 
	 	•	 	Carrels (15): Power in the walls and ceiling.
	 
	 	•	 	Break room: Sink, counter space, cabinets, VCT, power.
	 
	 	•	 	File Server room with house air VAV box, epower, VCT.

Provided by Tenant

Lab equipment, lab and office furniture, or system upgrades from those specified above are to be
provided at Tenant’s option and cost. This may include and not be limited to the following items:

	 	•	 	All furniture (conference room tables and chairs, carrels tables, cubicles, reception
desk and curved divider in lobby).
	 
	 	•	 	Equipment such as glass wash, autoclave, cage washer, vivarium autoclave, (steam
generator for both autoclaves), dryer, dishwasher, bio-safety hoods, future fume hoods, and
walk-in fume hood.
	 
	 	•	 	Trim pieces for equipment such as cage wash, glass wash, and autoclave.
	 
	 	•	 	Watering system for animals.
	 
	 	•	 	Process piping and equipment for services such as vacuum, CDA, CO2, nitrogen, and D/I
water, etc.
	 
	 	•	 	Data and phone cabling, file server, file server racks, phone switch.
	 
	 	•	 	Security system or card readers for access to suite, and any interior doors to labs and offices.

 

 

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EXHIBIT H TO LEASE

BASE BUILDING

Building shell shall include steel structure with foundations, fireproofing, roof, curtainwall,
flashings and sealants. Includes finished restrooms, code required exit stairs, elevators and
elevator lobbies. Includes electrical switchgear and transformers with vertical distribution to on
floor electrical room and TI provided electrical service. Includes water service plumbing risers
and both lab and domestic under slab waste mains. Includes HVAC chillers, boilers, exhaust fans and
on floor supply fans. Includes code compliant fire alarm main panel and risers.

 

 

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EXHIBIT I TO LEASE

PARKING

[To be attached upon creation of Landlord’s TMP plan]

 

 

1700 Owens/Sirna — Page 1

EXHIBIT J TO LEASE

MISSION BAY REQUIREMENTS

NOTICES AND RESTRICTIONS

APPLICABLE TO MISSION BAY REDEVELOPMENT AREA

     1. Environmental Covenant. The Project may contain hazardous materials in soils and
in the ground water under the Project, and is subject to a deed restriction (Covenant and
Environmental Restriction on Property) dated as of February 23, 2000, and recorded in the Official
Records on March 21, 2000, as Document No. 2000-G748552-00, Reel H598, Image 172 (the
“Environmental Covenant”), which Environmental Covenant imposes certain covenants,
conditions, and restrictions on usage of the Project. The foregoing statement is required by
the Environmental Covenant and is not a declaration that a hazard exists. The Environmental
Covenant references and requires compliance with the provisions of the Risk Management Plan,
Mission Bay Area, San Francisco, California, dated May 11, 1999 (the “RMP”). Tenant hereby
acknowledges receipt of a copy of the RMP, and hereby covenants (i) to comply with the RMP (to the
extent the RMP applies to Tenant’s activities), (ii) to obligate other entities with which Tenant
contracts for construction, property maintenance, or other activities that may disturb soil or
groundwater to comply with the applicable provisions of the RMP, and (iii) to refrain (and to cause
the entities with which it so contracts to refrain) from interfering with Landlord’s compliance
with the RMP.

     2. Special Tax Acknowledgment. In accordance with Section 53341.5 of the California
Government Code, Tenant previously has delivered to Landlord acknowledgments, duly executed by
Tenant, confirming that Tenant has been advised of the terms and conditions of the “CFDs”
(as defined below), including that the Project is subject to the “CFD Assessments” (as
defined below). As used herein, (a) “CFDs” shall mean, collectively, (i) the Redevelopment
Agency of the City and County of San Francisco Community Facilities District No. 5 (Mission Bay
Maintenance District) (the “Maintenance CFD”) (established to pay a portion of the costs of
ongoing maintenance of open space parcels in Mission Bay), (ii) the Redevelopment Agency of the
City and County of San Francisco Community Facilities District No. 6 (Mission Bay South Public
Improvements) (the “Infrastructure CFD”) (established to pay a portion of the costs of
constructing and installing public infrastructure in Mission Bay), and (iii) the San Francisco
Unified School District of the City and County of San Francisco Community Facilities District No.
90-1 (Public School Facilities) (the “Public School CFD”) (established to pay a portion of
the costs of acquiring and/or constructing public school facilities), and (b) “CFD
Assessments” shall mean the special taxes (i) to be levied on the Project and other property in
Mission Bay in accordance with the terms and conditions of the “Rate and Method of Apportionment of
Special Tax” applicable to the Infrastructure CFD and the Maintenance CFD, respectively, and (ii)
to be levied on the Project and other property in accordance with the terms and conditions
applicable to the Public School CFD. Tenant acknowledges that, pursuant to the CFDs, CFD
Assessments may be levied on the Project and that, without limiting the generality of any other
provision contained in this Lease, Operating Expenses shall include such CFD Assessments.

     3. Project Labor Agreement. Tenant has been informed by Landlord of the following:
(a) Catellus Development Corporation (“CDC”) and the individual members of the San
Francisco Building and Construction Trades Council, AFL-CIO (“Council”), originally entered
into a certain Mission Bay Project Agreement (the “Original Project Labor Agreement”) for
the Mission Bay project on October 8, 1990, pursuant to which CDC agreed, to the fullest extent
possible, to award all construction contracts in Mission Bay for “Covered Work” (as defined in the
Original Project Labor Agreement) to unionized construction firms; and (b) in 2003, CDC and the
Council entered into an Addendum to Agreement (“Addendum”) that amended certain terms of
the Original Project Labor Agreement (the Original Project Labor Agreement, as amended by the
Addendum, shall be referred to as the “Project Labor Agreement”), pursuant to which CDC
agreed that CDC would require, as a condition of any sale, conveyance, ground

 

 

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lease, or donation of real property covered by the Project Labor Agreement (“Covered
Property”), that any and all successors in interest and/or assignees, buyers, ground lessees,
or donees (any of the foregoing,
a “Covered Successor”) of Covered Property shall require any contractors to which the
Covered Successor contracts work that is covered by the Project Labor Agreement to sign and become
a party to the Project Labor Agreement through the execution and delivery of a successor project
agreement (a “Successor Project Labor Agreement”). Tenant acknowledges that the Project is
Covered Property, that Landlord is a Covered Successor, and that Landlord has agreed to require any
contractors to which Landlord contracts work with respect to the Project that is covered by the
Project Labor Agreement to sign and become a party to the Project Labor Agreement through the
execution and delivery of a Successor Project Labor Agreement (the form of which is attached hereto
as Exhibit K). Accordingly, Tenant hereby agrees that Tenant shall require any contractors
to which Tenant or any of its contractors contract work with respect to the Project that is covered
by the Project Labor Agreement to execute and deliver a Successor Project Labor Agreement. Tenant
will cause its general contractor to execute the Successor Project Labor Agreement and shall
deliver an executed original of the Successor Project Labor Agreement to Landlord. Following
Landlord’s receipt of such executed original of the Successor Project Labor Agreement, Landlord
shall use commercially reasonable efforts to obtain full execution of the Successor Project Labor
Agreement by the union signatories, but Tenant acknowledges that Landlord shall have no liability
whatsoever if full execution of the Successor Project Labor Agreement is not obtained.

     4. First Source Hiring Program. Tenant has been informed by Landlord that there is a
City-wide “First Source Hiring Program” (FSHP) (adopted by the City and County of San Francisco on
August 3, 1998, Ordinance No. 264-98; codified at San Francisco Administrative Code Sections
83.1-83.1(8)). Tenant hereby acknowledges that its activities with respect to the Project are or
may be subject to the FSHP. Accordingly, Tenant shall comply with any provisions of the FSHP that
are applicable to the Premises or any construction in, or use or development of, the Premises by
Tenant.

     5. Non-Discrimination. Without limiting the generality of any other provision of this
Lease, there shall be no discrimination against, or segregation of, any person or group of persons
or any employee or applicant for employment on account of race, color, creed, religion, sex,
marital or domestic partner status, familial status, national origin, ancestry, lawful source of
income (as defined in Section 3304 of the San Francisco Police Code), gender identity, sexual
orientation, age, or disability (including, without limitation, HIV/AIDS status) in the sale,
lease, sublease, transfer, use, occupancy, tenure, or enjoyment of any part of the Project, nor
shall Tenant or any person claiming under or through Tenant, establish or permit any such practice
or practices of discrimination or segregation with reference to the selection, location, number,
use, or occupancy of tenants, lessees, subtenants, sublessees, or vendees in any part of the
Project. All deeds, leases, subleases, or contracts concerning the Project shall contain the
non-discrimination and non-segregation clauses specified for each type of document in Section 33436
of the California Health and Safety Code (except to the extent any party to any such document is
not required by applicable law to include such non-discrimination and non-segregation clauses in
such document).

     6. Tax Exempt Entities. Tenant acknowledges that it has received and reviewed a
certain Tax Payment Agreement dated November 15, 2005, executed and acknowledged on behalf of
FOCIL-MB, LLC and Landlord, recorded November 15, 2005, as Document No. 2005-I072105 in the
Official Records of the City and County of San Francisco, California. Such Tax Payment Agreement
contains certain covenants by Landlord if (a) Landlord (or any successor) becomes an entity that is
exempt from property taxation (a “Tax Exempt Entity”), (b) there is any sale, assignment,
conveyance, lease, sublease, or other alienation of any portion of the Project to a Tax Exempt
Entity, or (c) there is a grant to a Tax Exempt Entity of occupancy rights (such as under a space
lease) where, as the result of such grant, all or any portion of any improvements on all or any
portion of the Project would or could be exempt from property taxation. Accordingly,
notwithstanding any other provision of this Lease, Tenant shall not assign, convey, sublease, or
otherwise alienate any portion of the Project to a Tax Exempt Entity, and shall not grant to a Tax
Exempt Entity any occupancy rights where, as the result of such grant,

 

 

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all or any portion of any improvements on all or any portion of the Project would or could be
exempt from property taxation, without Landlord’s prior written consent, which may be withheld in
Landlord’s sole and absolute discretion. Any such purported action by Tenant without Landlord’s
prior written consent shall be null and void ab initio.

 

 

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EXHIBIT K TO LEASE

SUCCESSOR PROJECT LABOR AGREEMENT

[Attached]

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