Document:

EXHIBIT 10.65

 

LEASE
AGREEMENT

 

THIS LEASE
AGREEMENT is made this 12th day of June 2003, between GRA Associates Limited,
L.L.C., an Ohio limited liability company, doing business in North Carolina as
GRA Durham Associates Limited, L.L.C. (“Landlord”), and the Tenant named below.

 

	
  Tenant:

  	
   

  	
  Gilead
  Sciences, Inc., a Delaware corporation

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tenant’s representative,

  address and telephone/fax no.:

  	
   

  	
  John Sung

  
	
   

  	
  333 Lakeside
  Drive, Foster City, CA  94404  (650) 522-5833 / (650) 522-5455 (fax)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Premises:

  	
   

  	
  University
  Place IV and V (consisting of approximately 100,126 total rentable square
  feet);allocated as follows, approximately 51,302 rentable square feet located
  at 4611 University Drive and approximately 48,824 rentable square feet
  located at  4615 University Drive,
  Durham, North Carolina (collectively referred to herein as the “Buildings” or
  each individually as the “Building”) as shown in Exhibit A attached hereto
  and incorporated by reference.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lease Term:

  	
   

  	
  Beginning on
  the  Commencement
  Date and ending on the last day of the seventy-second (72nd) full
  calendar month thereafter, plus two (2) seven (7) year options to renew as
  set forth in Addendum One, Section 9 below.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Commencement Date:

  	
   

  	
  October 1,
  2003

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Initial Monthly Base Rent:

  	
   

  	
  $120,985.58

  
	
   

  	
   

  	
  [See
  Addendum One, Section I as to Rent Schedule]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Initial Estimated Monthly
  Operating
  Expense Payments:

  (estimates
  only and subject to adjustment to actual costs and expenses according to the

  provisions
  of this Lease)

  	
   

  	
  1.

  	
   

  	
  Utilities:

  	
   

  	
  Tenant’s
  responsibility [See Paragraph 7]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  2.

  	
   

  	
  Common Area
  Charges:

  	
   

  	
  $

  	
  11,597.93

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  3.

  	
   

  	
  Taxes:

  	
   

  	
  Tenant’s
  responsibility [See Paragraph 8]

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.

  	
   

  	
  Insurance:

  	
   

  	
  $

  	
  3,003.78

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  5.

  	
   

  	
  Others:

  	
   

  	
  $

  	
  0.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Initial Estimated Monthly Operating Expense
  Payments:

  	
   

  	
  Total:

  	
   

  	
  $

  	
  14,601.71

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Initial Monthly Base Rent and Operating
  Expense Payments:

  	
   

  	
   

  	
   

  	
  $

  	
  135,587.29

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Security Deposit:

  	
   

  	
  N/A

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Broker:

  	
   

  	
  Craig Davis
  Properties, Inc. representing Landlord and

  Advantis Real Estate Services Company representing Tenant

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Addenda:

  	
   

  	
  One:

  	
  Additional
  Lease Provisions

  
	
   

  	
   

  	
  Two:

  	
  Move-Out
  Conditions Checklist

  
	
   

  	
   

  	
  Three:

  	
  Agreement of
  Subordination Nondisturbance and Attornment

  
	
   

  	
   

  	
  Four:

  	
  Memorandum
  of Lease

  
														

 

1.     Granting Clause.  In consideration of the obligation of Tenant to pay rent as
herein provided and in consideration of the other terms, covenants, and
conditions hereof, Landlord leases to Tenant, and Tenant takes from Landlord,
the Premises, to have and to hold for the Lease Term, subject to the terms,
covenants and conditions of this Lease. 
The “Premises” shall include the separate legal parcel of land upon
which each Building is situated together with the Buildings and other
improvements located thereon, and a right of access thereto from adjacent
public streets.

 

2.     Acceptance of Premises.  Tenant shall accept the Premises in its condition as
of the effective date of this Lease subject to all applicable laws, ordinances,
regulations, covenants and restrictions. 
Landlord has made no representation or warranty as to the suitability of
the Premises for the conduct of Tenant’s business, and Tenant waives any
implied warranty that the Premises are suitable for Tenant’s intended
purposes.  Except as provided in
Addendum One, Section 4 and/or Paragraph 10, in no event shall Landlord have
any obligation for any defects in the Premises or any limitation on its
use.  The taking of possession of the
Premises, as of the effective date of this Lease, shall be conclusive evidence
that Tenant accepts the Premises and that the Premises were in good condition
at the time possession was taken except for items that are Landlord’s
responsibility under Addendum One, Section 4 and/or Paragraph 10.

 

3.     Use. 
The Premises shall be used only for the purpose of general office,
commercial research and development activities, and for such other lawful
purposes as may be incidental thereto. 
Tenant shall not conduct or give notice of any auction, liquidation, or
going out of business sale on the Premises. 
Tenant will use the Premises in a careful, safe and proper manner and
will not commit waste, overload the floor or structure of the Premises or
subject the Premises to use that would damage the Premises.  Tenant shall not permit any unreasonable and
objectionable or unpleasant odors, smoke, dust, gas, noise, or vibrations to
emanate from the Premises, or take any other  action that would constitute a nuisance
or would disturb, unreasonably interfere with, or endanger Landlord or any tenants.  Outside storage, including without
limitation, storage of inoperable trucks and other vehicles not used in
Tenant’s daily business operations, is prohibited without Landlord’s prior
written consent.  Tenant, at its sole
expense, shall use and occupy the Premises in compliance with all laws,
including, without limitation, the Americans With Disabilities Act, orders,
judgments, ordinances, regulations, codes, directives, permits, licenses,
covenants and restrictions now or hereafter applicable to the Premises
(collectively, “Legal Requirements”). 
The Premises shall not be used as a place of public accommodation under
the Americans With Disabilities Act or similar state statutes or local
ordinances or any regulations promulgated thereunder, all as may be amended
from time to time.  Tenant shall, at its
expense, make any alterations or modifications, within or without the Premises
that are 

 

1

 

required by Legal Requirements related to Tenant’s use
or occupation of the Premises. 
Notwithstanding the aforesaid, Landlord shall be responsible to make any
alterations or improvements on the exterior of the Buildings required by Legal
Requirements not related to Tenant’s specific use or occupation of the Premises.  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 or increase the insurance risk.  If any increase in the cost of any insurance on the Premises is
caused by Tenant’s use or occupation of the Premises, or because Tenant vacates
the Premises, then Tenant shall pay the amount of such increase to
Landlord.  Any occupation of the
Premises by Tenant prior to the Commencement Date shall be subject to all
obligations of Tenant under this Lease.

 

4.     Base Rent. 
Tenant shall pay Base Rent in the amount set forth above.  The first month’s Base Rent and the first
monthly installment of estimated Operating Expenses (as hereafter defined)
shall be due and payable on the Commencement Date.  Tenant promises to pay to Landlord in advance, without demand,
deduction or set-off during the term hereof, monthly installments of Base Rent
on or before the first day of each calendar month succeeding the Commencement
Date except as otherwise provided herein. 
Payments of Base Rent for any fractional calendar month shall be
prorated.  All payments required to be
made by Tenant to Landlord hereunder shall be payable at such address as
Landlord may specify from time to time by written notice delivered in
accordance herewith.  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 due hereunder except as may be expressly
provided in this Lease.  If Tenant is
delinquent in any monthly installment of Base Rent or of estimated Operating
Expenses for more than fifteen (15) days, Tenant shall pay to Landlord on
demand a late charge equal to three and one half percent (3.5%) of such
delinquent sum, provided however, Landlord shall forgive Tenant one (1) late
charge per calendar year.  The provision
for such late charge shall be in addition to all of Landlord’s other rights and
remedies hereunder or at law.

 

5.     Security Deposit.  N/A

 

6.     Operating Expense Payments.

 

6.1            During each month
of the Lease Term, on the same date that Base Rent is due, Tenant shall pay
Landlord an amount equal to 1/12 of the annual cost, as estimated by Landlord
from time to time, of Operating Expenses for the Premises.  Payments thereof for any fractional calendar
month shall be prorated.  The term
“Operating Expenses” means all costs and expenses incurred by Landlord with
respect to the ownership, maintenance, and operation of the Premises including,
but not limited to costs of: insurance; utilities; maintenance and repair of
all portions of the Premises, including without limitation, paving and parking
areas, mowing, landscaping, utility lines, exterior lighting, irrigation, storm
water charges; reasonable amounts paid to nonaffiliated contractors and
subcontractors for work or services performed in connection with any of the
foregoing; charges or assessments of The University Place Owners Association;
property management fees payable to a property manager, not to exceed two
percent (2%) of the Base Rent collected; security services, if any; and
additions or alterations made by Landlord to the Premises in order to comply
with Legal Requirements (other than those expressly required herein to be made
by Tenant). See Addendum One, Section 5.

 

6.2           If
any of the expenses described above are required to be capitalized under
regulations of the Internal Revenue Code, then the maximum amount of such
expenses included in Operating Expenses for any period shall be limited to an
allocable portion of such capital expenditure, together with reasonable
interest thereon, amortized over the estimated useful life of the capital item
or fifteen (15) years, whichever is shorter.

 

6.3            If
Tenant’s total payments of estimated Operating Expenses for any year are less
than Tenant’s actual Operating Expenses for such year, then Tenant shall pay
the difference to Landlord within thirty (30) days after demand, and if more,
then Landlord shall retain such excess and credit it against Tenant’s next
payments.  For purposes of calculating
Tenant’s Operating Expenses, a year shall mean a calendar year except the first
year, which shall begin on the Commencement Date, and the last year, which
shall end on the expiration of this Lease, in which case, Tenant’s
proportionate share of Operating Expenses shall be established as the number of
months of tenancy under the Lease in that particular year divided by a twelve
(12) month calendar year.

 

6.4           Notwithstanding
anything to the contrary contained herein, for purposes of this Lease, the term
“Operating Expenses” shall not include any of the following: (i) costs,
expenses, depreciation or amortization for capital repairs and capital
replacements required to be made by Landlord under Paragraph 10 of this Lease
and any expense reserves; (ii) any expense that is an Operating Expense for
which Landlord is actually reimbursed by insurance; (iii) the costs of repair
or other work necessitated by the exercise of the power of eminent domain or by
virtue of any casualty loss to the Premises, (iv) costs associated with the
investigation and/or remediation of Hazardous Materials (hereafter defined)
present in, on or about any portion of the Project, unless such costs and expenses
are the responsibility of Tenant, in which event such costs and expenses shall
be paid solely by Tenant; (v) overhead and profit increment paid to Landlord or
to subsidiaries or affiliates of Landlord for goods and/or services in the
Project to the extent the same exceeds the costs of such by unaffiliated third
parties on a competitive basis; (vi) any costs for Landlord’s general
administrative expenses, management of the Project, time spent by Landlord or
any of Landlord Parties, other than the property management fee specified in Paragraph
6.1, (vii) debt service under mortgages or ground rent under ground
leases or master leases; (viii) costs incurred by Landlord in repairing
structural portions of the roof and/or structural portions of the perimeter
walls of the Building; (ix) costs incurred by Landlord in connection with the
negotiation, performance or non-performance of any lease, (x) any costs arising
from Landlord’s default under this Lease or Landlord’s violation of Legal
Requirements or the gross negligence or willful misconduct of Landlord or (a)
the individual partners, members, directors, officers, shareholders, agents or
employees of Landlord, including without limitation, any property management
company of Landlord and (b) the partners, members, directors, heirs, employees,
representatives, agents, contractors, successors and assigns or any of person
or entity mentioned in clause (a) above (collectively “Landlord Parties”); (xi)
any capital improvement or repair cost incurred to reduce Operating Expenses to
the extent such cost exceeds the Operating Expense reduction attributable
thereto or to the extent such improvement or repair cost exceeds the amortized
portion thereof permitted to be included in Operating Expenses as provided
above; (xii) costs arising as a consequence of Landlord’s breach of this Lease;
(xiii) costs arising as a consequence of the negligence, willful misconduct or
violation of Legal Requirements of other members of the University Place Owners
Association; (xiv) any Taxes, which shall be governed by 

 

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Paragraph 7 below;
or (xv) any costs or liabilities arising in connection with the remediation,
removal, investigation, mitigation, or clean up of any Hazardous Materials
located on or about the Premises except to the extent caused by Tenant, its
employees, contractors, agents and/or invitees.

 

6.5           By
March 31st of each calendar year, or as soon thereafter as
reasonably possible, Landlord shall furnish Tenant with an accounting of actual
and accrued Operating Expenses (the “Annual Statement”) for the prior calendar
year. Within thirty (30) days of Landlord’s delivery of such accounting, Tenant
shall pay to Landlord the amount of any underpayment. Notwithstanding the foregoing,
failure by Landlord to give such accounting by such date shall not constitute a
waiver by Landlord of its right to collect any underpayment by Tenant at any
time.  Landlord shall credit the amount
of any overpayment by Tenant toward the next estimated monthly installment(s)
falling due, or where the Term of the Lease has expired, refund the amount of
overpayment to Tenant as soon as possible thereafter. If the Term of the Lease
expires prior to the annual reconciliation of expenses Landlord shall have the
right to reasonably estimate such expenses, and if Landlord determines that
there has been an underpayment, Landlord may invoice Tenant for such amount
which Tenant shall pay within thirty (30) days of its receipt thereof.  Failure by Landlord to accurately estimate
such expenses or to otherwise perform such reconciliation of expenses shall not
constitute a waiver of Landlord’s right to collect any of Tenant’s
underpayment, or, subject to Addendum One Section 5, to adjust Tenant’s monthly
estimated Operating Expense payments, at any time during the Term of the Lease
or to so collect at any time after the expiration or earlier termination of
this Lease.

 

6.6           After
delivery to Landlord of at least thirty (30) days prior written notice, Tenant,
at its sole cost and expense through any accountant designated by it, shall
have the right to review, examine and/or audit the books and records of
Landlord evidencing costs and expenses for which Tenant was billed for the
previous calendar year, during Landlord’s reasonable business hours, but not
more frequently than once during any calendar year. Any such accounting firm
designated by Tenant may not be compensated on a contingency fee basis. The
results of any such audit (and any negotiations between the parties related
thereto) shall be maintained strictly confidential by Tenant and its accounting
firm and shall not be disclosed, published or otherwise disseminated to any
other party other than to Landlord and its authorized agents except as required
by Legal Requirements or to permit Tenant to enforce its rights hereunder in
any legal or other proceeding. Landlord and Tenant each shall use all
reasonable efforts to cooperate in such negotiations and to promptly resolve
any discrepancies between Landlord and Tenant in the accounting of such costs
and expenses.  If Tenant gives no
written request to Landlord to conduct such an audit within one-hundred-twenty
(120) days of its receipt of Landlord’s prior year Annual Statement, Tenant’s
right to audit shall cease, and the Landlord’s statement of costs and expenses
shall be deemed accurate.

 

7.     Utilities.  Tenant
shall pay for all water, gas, electricity, heat, light, power, telephone,
sewer, sprinkler services, refuse and trash collection, and other utilities and
services used on the Premises, all maintenance charges for utilities, and any
other charges for utilities imposed by any governmental entity or utility
provider, together with any taxes, penalties, surcharges or the like pertaining
to Tenant’s use of the Premises.  Tenant
shall pay its share of all charges for jointly metered utilities based upon
consumption, as reasonably determined by Landlord.  No interruption or failure of utilities shall result in the
termination of this Lease or the abatement of rent, except that if such
interruption or failure of utilities results from a cause within Landlord’s
reasonable control and the Premises are not useable by Tenant for the conduct
of Tenant’s business as a result thereof, Base Rent and applicable Operating
Expenses not actually incurred by Tenant shall be abated for the period which
commences three (3) business days after the date Tenant gives Landlord notice
of such interruption until such utilities are restored.

 

8.     Taxes. 
Tenant shall pay all taxes, assessments and governmental charges
(collectively referred to as “Taxes”) that accrue against the Premises during
the Lease Term, before such amounts accrue any interest or penalties.  Tenant shall provide Landlord with evidence that
the Taxes have been timely paid.  Not
satisfying the tax liability on or before the due date of same shall be
considered an Event of Default (as hereafter defined) under this Lease.  Provided Tenant does not take adequate
action to contest taxes, when applicable, Landlord, at Tenant’s reasonable
expense, may contest by appropriate legal proceedings the amount, validity, or
application of any Taxes or liens thereof. 
All capital levies or other taxes assessed or imposed on Landlord upon
the rents payable to Landlord under this Lease and any franchise tax, any
excise, transaction, sales or privilege tax, assessment, levy or charge
measured by or based, in whole or in part, upon such rents from the Premises
shall be paid by Tenant to Landlord monthly in estimated installments or upon
demand, at the option of Landlord, as additional rent; provided, however, in no
event shall Tenant be liable for any net income taxes imposed on Landlord
unless such net income taxes are in substitution for any Taxes payable
hereunder.  If any such tax or excise 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
be liable for all taxes levied or assessed against any personal property or
fixtures placed in the Premises, whether levied or assessed against Landlord or
Tenant.  See Addendum One, Section 6.

 

9.     Insurance.

 

9.1           Landlord shall
maintain all-risk property insurance covering the full replacement cost of the
Premises.  Subject to Landlord’s, and
its lender’s, approval, Tenant has the right to maintain and pay for such
insurance if Tenant can obtain such insurance at more favorable terms.  Landlord may, but is not obligated to,
maintain such other insurance and 
Except as otherwise expressly provided herein, premiums paid by Landlord
for all such insurance shall be included as part of the Operating Expenses
charged to Tenant.  The Premises may be
included in a blanket policy (in which case the cost of such insurance
allocable to the Premises 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
particular use of the Premises.

 

9.2           Tenant, at its expense, shall
maintain during the Lease Term: all risk property insurance covering the full
replacement cost of all property and improvements installed or placed in the
Premises by Tenant at Tenant’s expense; worker’s 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 liability insurance, with a
minimum limit of $1,000,000 per 

 

3

 

occurrence and a minimum umbrella limit of $5,000,000,
for a total minimum combined general liability and umbrella limit of $6,000,000
(together with such additional umbrella coverage as Landlord may reasonably
require) for property damage, personal injuries, or deaths of persons occurring
in or about the Premises.  Landlord may
from time to time require reasonable increases in any such limits.  The commercial liability policies shall name
Landlord as an additional insured, insure on an occurrence and not a
claims-made basis, be issued by insurance companies which are reasonably
acceptable to Landlord, not be cancelable unless thirty (30) days’ prior
written notice shall have been given to Landlord, contain hostile fire coverage
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).  Such policies or certificates thereof shall be delivered to Landlord
by Tenant prior to commencement of the Lease Term and at least thirty (30) days
prior to each renewal of said insurance.

 

9.3           The all-risk
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, their officers, directors, employees,
managers, agents, invitees and contractors, in connection with any loss or
damage thereby insured against.  Neither
party nor its officers, directors, employees, managers, agents, invitees or
contractors shall be liable to the other for loss or damage caused by any risk
coverable by all-risk property insurance, and each party waives any claims
against the other party, and its officers, directors, employees, managers,
agents, invitees and contractors for such loss or damage.  The failure of a party to insure its
property shall not void this waiver.  As
to personalty only, Landlord and its agents, employees and contractors 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 from any cause whatsoever.

 

10    Landlord’s Maintenance and Repair Obligations

 

10.1         Landlord shall, at
its expense, maintain properly, repair and replace, as necessary, the
structural portions of the roof, foundation, and exterior walls of each
Building comprising a portion of the Premises, reasonable wear and tear and
uninsured losses and damages caused by Tenant, its agents and contractors
excluded.  The term “walls” as used in
this Paragraph 10 shall not include windows, glass or plate glass, doors or
overhead doors, special store fronts, dock bumpers, dock plates or levelers, or
office entries.  Tenant shall promptly
give Landlord written notice of any repair required by Landlord pursuant to
this Paragraph 10, after which Landlord shall have a reasonable opportunity to
repair.

 

10.2         Landlord, subject to
reimbursement by Tenant pursuant to the provisions of Paragraph 6.1, shall
maintain in good repair and condition portions of the Premises outside the foot
prints of each of the Buildings, including but not limited to parking areas,
driveways, alleys, landscape and grounds surrounding the Premises.

 

11    Tenant’s Repairs. 
Subject to Landlord’s obligation in Paragraph 10 and subject
to Paragraphs 6.4, 9, and 15, Tenant, at its expense, shall repair, replace and
maintain in good condition all portions of the Premises and all areas,
improvements and systems exclusively serving the Premises including, without
limitation, dock and loading areas, truck doors, plumbing, water and sewer
lines up to points of common connection, fire sprinklers and fire protection
systems, entries, doors, ceilings and roof membrane, windows, interior walls,
and the interior side of demising walls, and heating, ventilation and air
conditioning systems.  Heating,
ventilation and air conditioning systems and other mechanical and building
systems serving the Premises shall be maintained at Tenant’s expense pursuant
to maintenance service contracts entered into by Tenant (see Addendum One,
Section 3 and Section 4).  If Tenant
fails to perform any repair or replacement for which it is responsible within
five (5) days after notice to Tenant, Landlord may perform such work and be
reimbursed by Tenant within thirty (30) days after demand therefor.  Subject to Paragraphs 9 and 15, Tenant shall
bear the full cost of any repair or replacement to any part of the Premises
that results from uninsured damage caused by Tenant, its agents, contractors,
employees, or invitees and any repair that benefits only the Premises.  Landlord shall bear the full cost of repair
or replacement to any part of the Premises that results from uninsured damage
caused by Landlord, its agents, employees, or contractors.

 

12.   Tenant-Made
Alterations and Trade Fixtures.

 

12.1         Any
alterations, additions, or improvements exceeding $100,000 in cost or any
alterations, additions, or improvements structural in nature, made by or on
behalf of Tenant to the Premises (“Tenant-Made Alterations”) shall be subject
to Landlord’s prior written consent, which consent shall not be unreasonably
withheld or delayed.  Tenant shall
cause, at its expense, all Tenant-Made Alterations to comply with insurance
requirements and with Legal Requirements and shall construct at its expense any
alteration or modification required by Legal Requirements as a result of any Tenant-Made
Alterations.  All Tenant-Made
Alterations shall be constructed in a good and workmanlike manner by
contractors reasonably acceptable to Landlord and only good grades of materials
shall be used.  All plans and
specifications for any Tenant-Made Alterations, structural changes and/or
office modifications, shall be submitted to Landlord.  As to those plans and specifications for Tenant-Made Alterations
requiring Landlord’s approval, such plans and specifications must receive
Landlord’s approval prior to construction and/or installation thereof.  All Tenant Made Alterations, plans and
specifications are deemed approved by Landlord if not approved or disapproved
within ten (10) working days.  Landlord
may monitor construction of the Tenant-Made Alterations.  Tenant shall reimburse Landlord for its
reasonable costs in reviewing plans and specifications.  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 see that such plans and specifications or
construction comply with applicable laws, codes, rules and regulations.  Upon Landlord’s written request Tenant shall
provide Landlord with the identities and mailing addresses of all persons
performing work or supplying materials, prior to beginning such construction,
and Landlord may post on and about the Premises notices of non-responsibility
pursuant to applicable law.  Tenant
shall be solely responsible for payment for, and the completion of, all work
free and clear of liens and shall provide certificates of insurance for
worker’s compensation and other coverage in amounts and from an insurance
company satisfactory to Landlord protecting Landlord against liability for
personal injury or property damage during construction.  Upon completion of any Tenant-Made
Alterations, Tenant shall deliver to Landlord sworn statements setting forth
the names of all contractors and subcontractors who did work on the Tenant-Made
Alterations and final lien waivers from all such contractors and
subcontractors.  Upon surrender of the
Premises, all Tenant-Made 

 

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Alterations and any leasehold
improvements constructed by Landlord or Tenant shall remain on the Premises as
Landlord’s property, except to the extent Landlord requires removal at Tenant’s
expense of any such items or Landlord and Tenant have otherwise agreed in
writing in connection with Landlord’s consent to any Tenant-Made
Alterations.  Tenant shall repair any
damage caused by such removal.

 

12.2         Tenant,
at its own cost and expense and without Landlord’s prior approval, may install
or erect such shelves, bins, laboratory equipment, plumbing, electrical and
data wiring, machinery and other trade fixtures (collectively “Trade Fixtures”)
in the ordinary course of its business provided that such items do not alter
the basic character of the Premises, do not overload or damage the Premises,
and may be removed without injury to the Premises, and the construction,
erection, and installation thereof complies with all Legal Requirements and, if
applicable, with Landlord’s requirements set forth above.  Tenant shall remove its Trade Fixtures and
shall repair any damage caused by such removal, provided, however, with respect
to plumbing and wiring, upon removal of Trade Fixtures connected to such wiring
or plumbing, Tenant may elect to leave the plumbing and wiring in place and
neatly cap such items to Landlord’s reasonable satisfaction at the level of the
wall or ceiling as the case may be.

 

12.3         Ownership by
Tenant.  During the term of
this Lease, Tenant’s personal property (hereinafter referred to as “Tenant’s
Property”) shall at all times be owned by Tenant, and Tenant shall be entitled
to all depreciation, amortization and other tax benefits with respect
thereto.  Landlord shall have no lien or
other interest whatsoever in any such item of Tenant’s Property during the
Lease Term, and, except as expressly set forth in this Paragraph 12 to the contrary, Landlord hereby
waives all liens and interests in Tenant’s Property and shall have no right to
require surrender of any Tenant’s Property. 
Within twenty (20) days following Tenant’s request, Landlord shall
execute documents in form reasonably acceptable to Tenant and Landlord
evidencing Landlord’s waiver of any right, title, lien or interest in such
property of Tenant located in the Premises other than the rights of Landlord
set forth in this Paragraph 12.  If Landlord incurs any cost or expense, including the cost of
Landlord’s employees, in connection with obtaining the consent of Landlord’s
lender to any requirement of Tenant in connection with Tenant’s Property,
Tenant shall pay Landlord, as Additional Rent, for such cost or expense within
ten (10) days after Landlord notifies Tenant of the amounts due

 

13.   Signs.  Tenant
shall not make any changes to the exterior of the Premises, install any
exterior lights, decorations, balloons, flags, pennants, banners, or painting,
or erect or install any signs, windows or door lettering, placards, decorations,
or advertising media of any type which can be viewed from the exterior of the
Premises, without Landlord’s prior written consent, which consent shall not be
unreasonably withheld or delayed.  Upon
surrender or vacation of the Premises, Tenant shall have removed all signs and
repair, paint, and/or replace the Premises facia surface to which its signs are
attached.  Tenant shall obtain all
applicable governmental permits and approvals for sign and exterior treatments.  All signs, decorations, advertising media,
blinds, draperies and other window treatment or bars or other security
installations visible from outside the Premises shall be subject to Landlord’s
approval and conform in all respects to any applicable University Place signage
restrictions and/or specifications. 
Notwithstanding anything herein to the contrary, Tenant’s signage on the
exterior of the Buildings where the Premises are located, and the Premises, on
the date thereof, is hereby approved for all purposes, and Landlord and Tenant
shall have the exclusive right to maintain signage on the exterior of such
Buildings during the Lease Term.

 

14.   Parking. 
Tenant shall be entitled to use all of the parking located around the
Premises, as shown on Exhibit B attached hereto and incorporated by
reference.  Landlord shall not be
responsible for enforcing Tenant’s parking rights against any third parties.

 

15.   Restoration.

 

15.1         Following
damage or destruction to the Premises, within the sixty (60) day period
(“Restoration Estimate Period”) following the occurrence of the damage or
destruction, Landlord’s architect shall give to Landlord and Tenant a
reasonable estimate (“Landlord Architect’s Estimate”) of the time required to
restore the Building or Buildings and other improvements comprising the
Premises excluding Tenant’s specialty improvements (“Landlord’s Work”), and
excluding from such time estimate the time required to replace any specialty
improvements installed in connection with Tenant’s research and development
activities in the Premises, including without limitation, laboratory equipment
and ancillary building service equipment required because of such research and
development activities. If Landlord gives the Landlord Architect’s Estimate to
Tenant within the Restoration Estimate Period, then the Landlord Architect’s
Estimate shall be the “Architect’s Certificate”, and Paragraph 15.2  shall be of no force or effect.

 

15.2         During
the Restoration Estimate Period, Tenant may select an architect to prepare a
reasonable estimate of the time required to complete the Landlord’s Work
(“Tenant Architect’s Estimate”), and, if (i) the Landlord fails to give Tenant
the Landlord Architect’s Estimate within the Restoration Estimate Period and
(ii) Tenant gives Landlord the Tenant’s Architect’s Estimate within the
Restoration Estimate Period, then the Tenant Architect’s Estimate shall be the
“Architect’s Certificate”.

 

15.3         If
within the Restoration Estimate Period (i) Landlord’s Architect fails to give
the Landlord Architect’s Estimate and (ii) the Tenant’s Architect fails to give
the Tenant Architect’s Estimate, then it shall be deemed that the Landlord
Architect’s Estimate was given on such 60th day and shall be deemed to be the
“Architect’s Estimate”, and it shall be deemed that the Landlord’s Work can be
restored in nine (9) months or less following the occurrence of the loss.

 

15.4         If
the Architect’s Estimate is that the Landlord’s Work cannot be completed in
nine (9) months or less, then either Landlord or Tenant may elect to terminate
this Lease in its entirety upon notice to the other party given no later than
thirty (30) days after Tenant’s receipt of the Architect’s Estimate.  If neither party elects to terminate this
Lease or if the Architect’s Certificate states that Landlord’s Work will take
six (6) months or less, then, subject to receipt of sufficient insurance
proceeds, Landlord shall promptly restore the Premises excluding the specialty
improvements installed by Tenant or by Landlord and paid for by Tenant, subject
to delays arising from the collection of insurance proceeds or from Force
Majeure events.  Within ninety (90) days
following the occurrence of the loss, Landlord shall notify Tenant in writing
whether or not Landlord has sufficient insurance proceeds to complete
Landlord’s Work, and if 

 

5

 

Landlord does not in such
notice confirm the sufficiency of insurance proceeds, Tenant shall have the
right to terminate this Lease.  Except
in the event the Lease is terminated or as otherwise provided herein, Tenant at Tenant’s expense, except if same is necessitated by
Landlord’s acts or omissions, shall promptly perform, subject to delays arising
from the collection of insurance proceeds, or from Force Majeure events, 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,
either party may terminate this Lease if the Premises are materially damaged
during the last year of the Lease Term and Landlord reasonably estimates that
it will take more than one month to repair such damage.  Tenant shall pay to Landlord with respect to
any damage to the Premises the pro-rata amount of the commercially reasonable
deductible (up to $25,000) under Landlord’s insurance policy within ten (10)
days after presentment of Landlord’s invoice. 
If the damage involves the premises of other tenants, Tenant shall pay
the portion of the deductible that the cost of the restoration of the Premises
bears to the total cost of restoration, as determined by Landlord.  Base Rent, Operating Expenses and Taxes
shall be abated for the period of repair and restoration 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.  Such
abatement shall be the sole remedy of Tenant, and except as provided herein,
Tenant waives any right to terminate the Lease by reason of damage or casualty
loss.

 

16.   Condemnation.  If any part of the Premises or the parking lot servicing the
Premises should be 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 prevent
or materially interfere with Tenant’s use of the Premises or in Landlord’s
judgment would materially interfere with or impair its ownership or operation
of the Premises, then upon written notice by Tenant or Landlord respectively, this
Lease shall terminate, and Base 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, the Base Rent payable hereunder
during the unexpired Lease Term shall be reduced to such extent as may be fair
and reasonable under the circumstances. 
In the event of 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 damages for cessation
or interruption of Tenant’s business, moving expenses and damage to Tenant’s
Trade Fixtures and other personal property.

 

17.   Assignment and Subletting.

 

17.1         Without Landlord’s
prior written consent, which consent shall not be unreasonably conditioned,
delayed or withheld (see Addendum One, Section 8), Tenant shall not 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.   Tenant shall reimburse
Landlord for all of Landlord’s reasonable out-of-pocket expenses in connection
with any assignment or sublease.

 

17.2         Notwithstanding any
assignment or subletting, Tenant and any guarantor or surety of Tenant’s
obligations under this Lease shall at all times remain fully responsible and
liable for the payment of the rent and for compliance with all of Tenant’s
other obligations under this Lease (regardless of whether Landlord’s approval
has been obtained for any such assignments or sublettings).  In the event that 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) exceeds the rental payable under this Lease, then Tenant
shall be bound and obligated to pay Landlord as additional rent , within ten
(10) days following receipt thereof by Tenant hereunder, fifty percent (50%) of
such excess rental and other excess consideration after deducting therefrom (i)
the rental value attributable to Tenant’s improvements installed at Tenant’s
expense after the commencement of this Lease, if any, and (ii) reasonable and
customary expenses, if any, incurred by Tenant for commissions, legal costs,
and other additional costs reasonably associated with the sublease.

 

17.3         If this Lease be
assigned or if the Premises be subleased (whether in whole or in part) or in
the event of the mortgage, pledge, or hypothecation of Tenant’s leasehold
interest or grant of any concession or license within the Premises or if the
Premises be occupied in whole or in part by anyone other than Tenant, then upon
a default by Tenant hereunder Landlord may collect rent from the assignee,
sublessee, mortgagee, pledgee, party to whom the leasehold interest was
hypothecated, concessionee or licensee or other occupant and, except to the
extent set forth in the preceding paragraph, apply the amount collected to the
next rent payable hereunder; and all such rentals collected by Tenant shall be
held in trust for Landlord and immediately forwarded to Landlord.  No such transaction or collection of rent or
application thereof by Landlord, however, shall be deemed a waiver of these
provisions or a release of Tenant from the further performance by Tenant of its
covenants, duties, or obligations hereunder.

 

17.4         Notwithstanding
anything herein to the contrary, Landlord acknowledges that portions of the
Premises were subleased to (1) Trimeris, Inc., a Delaware corporation, pursuant
to the Agreement of Sublease, dated December 14, 2001, executed by Tenant and
Trimeris, Inc., and Landlord has consented thereto, and (2) Krenitsky
Pharmaceuticals, Inc., a North Carolina corporation, pursuant to the Sublease,
dated February 20, 1996, and the First Amendment thereto, dated August 10,
1998, each as executed by Tenant and Krenitsky Pharmaceuticals, Inc., and
Landlord has consented thereto.

 

17.5         Notwithstanding
anything to the contrary in this Paragraph 17, the assignment or subletting
by Tenant of all or any portion of this Lease or the Premises to (i) a parent
or subsidiary of Tenant, or (ii) any person or entity which controls, is
controlled by or under the common control with Tenant, or (iii) any entity
which purchases all or substantially all of the assets of Tenant, or (iv) any
entity into which Tenant is merged or that is merged into Tenant or
consolidated (all such persons or entities described in clauses (i), (ii),
(iii) and (iv) being sometimes herein referred to as “Affiliates”) shall not be
deemed a Transfer under this Paragraph 17 (hence, the aforesaid events
shall not be subject to obtaining Landlord’s prior consent), provided in all
instances that:

 

6

 

17.5.1      Any
such assignment or sublease shall be subject to all of the terms and provisions
of this Lease, and such assignee or sublessee (i.e. any such Affiliate), other
than in the case of an Affiliate resulting from a merger or consolidation,
shall assume and any sublessee shall agree to be bound by, in a written
document reasonably satisfactory to Landlord and delivered to Landlord upon or
prior to the effective date of such assignment or sublease, all the obligations
of Tenant under this Lease; and

 

17.5.2      As to
any assignment or sublease, Tenant and any guarantor shall remain fully liable
for all obligations to be performed by Tenant under this Lease, except in the
case of an Affiliate resulting from the acquisition of all or substantially all
of the assets of Tenant or from a merger or consolidation, provided (i) such
merger, consolidation, or transfer of assets is for a good business purpose and
not principally for the purpose of transferring Tenant’s leasehold estate and
(ii) the assignee or successor entity has a net worth of at least $100 million
dollars.

 

18.   Indemnification.

 

18.1         Tenant
Indemnity.  Subject to Paragraph 8 and
except for the negligence or willful misconduct of Landlord, its agents,
employees or contractors, and to the extent permitted by law, Tenant agrees to
indemnify, defend and hold harmless Landlord, and Landlord’s agents, employees
and contractors, from and against any and all losses, liabilities, damages,
costs and expenses (including reasonable attorneys’ fees) resulting from claims
by third parties for injuries to any person and damage to or theft or
misappropriation or loss of property occurring in or about the Premises and
arising from the use and occupancy of the Premises or from any activity, work,
or thing done, permitted or suffered by Tenant in or about the Premises or due
to any other act or omission of Tenant, its subtenants, assignees, invitees,
employees, contractors and agents.  The
furnishing of insurance required hereunder shall not be deemed to limit
Tenant’s obligations under this Paragraph 18.

 

18.2         Landlord
Indemnity.  Subject to Paragraph 8
and except for the negligence or willful misconduct of Tenant, its agents,
employees or contractors, and to the extent permitted by law, Landlord agrees
to indemnify, defend and hold harmless Tenant and Tenant’s agents, employees
and contractors, from and against any losses, liabilities, damages, costs and
expenses (including reasonable attorney’s fees) resulting from claims by third
parties for injuries to any person or damage to or theft or misappropriation or
loss of property occurring in or about the Premises and arising from any act or
omission of Landlord, its assignees, employees, contractors, and agents.  The furnishing of insurance required
hereunder shall not be deemed to limit Landlord’s obligations under this Paragraph 18.

 

19.   Inspection
and Access.  Landlord and its
agents, representatives, and contractors may, with one (1) business day prior
telephonic notice and escort by a representative of Tenant (which Tenant is
responsible to provide), enter the Premises at any reasonable time 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, provided, however, that in
the case of an emergency, prior telephonic notice from Landlord shall be deemed
sufficient; provided, further, that Landlord or its inspecting representative
shall at all times comply with applicable health and safety regulations, shall
take all steps reasonably requested to protect and preserve Tenant property,
and shall avoid any unnecessary interference with Tenant’s business operations.
Landlord and Landlord’s representatives may enter the Premises during business
hours for the purpose of showing the Premises to prospective purchasers and,
during the last year of the Lease Term, to prospective tenants.  Upon the expiration or nonexercising of
Tenant’s Renewal Options as set forth in Addendum One Section 9 Landlord may
erect a suitable sign on the Premises stating the Premises are available to let
or that the Premises is available for sale. 
Other than within, over or under the Buildings, 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 interferes with Tenant’s use
or occupancy of the Premises.  At
Landlord’s request, Tenant shall execute such instruments as may be necessary
for such easements, dedications or restrictions.

 

20.   Quiet
Enjoyment.  If 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 Lease Term, have peaceful and quiet enjoyment of the Premises against any
person claiming by, through or under Landlord.

 

21.   Surrender.  Upon termination of the Lease Term or
earlier termination of Tenant’s right of possession, Tenant shall surrender the
Premises to Landlord in the same condition as received, broom clean, ordinary
wear and tear and casualty loss and condemnation covered by Paragraphs 15 and
16 excepted.  Any Trade Fixtures,
Tenant-Made 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
disposition of such property.  All
obligations of Tenant or Landlord hereunder not fully performed as of the
termination of the Lease Term shall survive the termination of the Lease Term,
including without limitation, indemnity obligations, payment obligations with
respect to Operating Expenses and obligations concerning the condition and
repair of the Premises.  See also
Addendum Two.

 

22.   Holding Over.  If Tenant retains possession of the Premises
after the termination of the Lease Term, unless otherwise agreed in writing,
such possession shall be subject to immediate termination by Landlord at any
time, and all of the other terms and provisions of this Lease (excluding any
expansion or renewal option or other similar right or option) shall be
applicable during such holdover period, except that Tenant shall pay Landlord
from time to time, within ten (10) days of demand, as Base Rent an amount equal
to one hundred fifty percent (150%) of the Base Rent in effect on the
termination date, computed on a monthly basis for each month or part thereof
during such holding over.  All other
payments shall continue under the terms of this Lease.  In addition, Tenant shall be liable for all
damages incurred by Landlord as a result of such holding over.  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 Paragraph 22 shall not be construed as
consent for Tenant to retain possession of the Premises.

 

23.   Events of
Default.  Each of the
following events shall be an event of default (“Event of Default”) by Tenant
under this Lease:

 

7

 

23.1         Tenant shall fail to
pay any installment of Base Rent or fail to make any other payment required herein
when due, and such failure shall continue for a period of ten (10) days after
Tenant’s receipt of written notice of such failure from Landlord, provided
however that Landlord shall be obligated to provide such written notice no more
than twice in any consecutive twelve (12) month period during the Lease Term
whereafter any such failure by Tenant to pay within ten (10) days of the date
such payment was due shall constitute an Event of Default hereunder.

 

23.2         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 one-hundred-twenty (120) 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).

 

23.3         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, except,
in each case, as permitted in this Lease, where such failure continues for five
(5) days after written notice of such failure.

 

23.4         Tenant shall not
occupy or shall vacate the Premises or shall fail to continuously operate its
business at the Premises for the permitted use set forth herein, whether or not
Tenant is in monetary or other default under this Lease, and fail to insure
that the Premises (i) are adequately secured and not readily subject to
vandalism, (ii) are and will be properly maintained and adequately heated after
such vacation, and (iii) continue to comply with Tenant’s insurance obligations
hereunder.

 

23.5         Tenant shall assign,
sublease or otherwise transfer Tenant’s interest in or with respect to this
Lease except as otherwise permitted in this Lease, where not rescinded within
five (5) days written notice of such transfer.

 

23.6         Tenant shall fail to
discharge, bond or insure over, any lien placed upon the Premises in violation
of this Lease within thirty (30) days after Tenant has received written notice
that any such lien or encumbrance is filed against the Premises.

 

23.7         Tenant shall fail to comply with any
provision of this Lease other than those specifically referred to in this
Paragraph 23, and except as otherwise expressly provided herein, where such
default shall continue for more than thirty (30) days after  written notice from Landlord.  However, it shall not be an Event of Default
hereunder if such failure cannot reasonably be cured within such thirty (30)
day period, and Tenant promptly commences the cure of such default and
thereafter diligently proceeds with same to completion, taking all actions
necessary to cure such failure as soon as is reasonably possible, but in no
event shall the completion of such cure be later than ninety (90) days after
the date on which Landlord delivers to Tenant written notice of such failure,
unless Landlord, agrees in writing to a longer period of time based upon circumstances
relating to such failure as well as the nature of the failure and the nature of
the actions necessary to cure such failure.

 

24.   Landlord’s Remedies.

 

24.1         Upon each occurrence
of an Event of Default and so long as such Event of Default shall be continuing,
Landlord may at any time thereafter at its election: terminate this Lease or
Tenant’s right of possession, (but Tenant shall remain liable as hereinafter
provided) and/or pursue any other remedies at law or in equity.  Upon the termination of this Lease or
termination of Tenant’s right of possession, it shall be lawful for Landlord,
without formal demand or notice of any kind, to re-enter the Premises by
summary dispossession proceedings or any other action or proceeding authorized
by law and to remove Tenant and all persons and property therefrom.  If Landlord re-enters the Premises, Landlord
shall have the right to keep in place and use, or remove and store, all of the
furniture, fixtures and equipment at the Premises.

 

24.2         If Landlord terminates this Lease,
Landlord may recover from Tenant the sum of all Base Rent and all other amounts
accrued hereunder to the date of such termination; the cost of reletting the
whole or any part of the Premises, including without limitation brokerage fees
and/or leasing commissions incurred by Landlord, and costs of removing and
storing Tenant’s or any other occupant’s property, repairing, altering,
remodeling, or otherwise putting the Premises into condition acceptable to a
new tenant or tenants, and all reasonable expenses incurred by Landlord in
pursuing its remedies, including reasonable attorneys’ fees and court costs;
and the excess of the then present value of the Base Rent and other amounts
payable by Tenant under this Lease as would otherwise have been required to be
paid by Tenant to Landlord during the period following the termination of this
Lease measured from the date of such termination to the expiration date stated
in this Lease, over the present value of any net amounts which Tenant
establishes Landlord can reasonably expect to recover by reletting the Premises
for such period, taking into consideration the availability of acceptable
tenants and other market conditions affecting leasing.  Such present values shall be calculated at a
discount rate equal to the 90-day U.S. Treasury bill rate at the date of such
termination.

 

24.3         If Landlord terminates Tenant’s right
of possession (but not this Lease), Landlord will make commercially reasonable
efforts to relet the Premises for the account of Tenant for such rent and upon
such terms as shall be reasonably satisfactory to Landlord without thereby
releasing Tenant from any liability hereunder and without demand or notice of
any kind to Tenant.  For the purpose of such
reletting Landlord is authorized to make any repairs, changes, alterations, or
additions in or to the Premises as Landlord deems reasonably necessary or
desirable.  If the Premises are not
relet, then Tenant shall pay to Landlord as damages a sum equal to the amount
of the rental reserved in this Lease for such period or periods, plus the cost
of recovering possession of the Premises (including attorneys’ fees and costs
of suit), the unpaid Base Rent and other amounts accrued hereunder at the time
of repossession, and the costs incurred in any attempt by Landlord to relet the
Premises.  If the Premises are relet and
a sufficient sum shall not be realized from such 

 

8

 

reletting [after first deducting therefrom, for
retention by Landlord, the unpaid Base Rent and other amounts accrued hereunder
at the time of reletting, the cost of recovering possession (including
attorneys’ fees and costs of suit), all of the costs and expense of repairs,
changes, alterations, and additions, the expense of such reletting (including
without limitation brokerage fees and leasing commissions) and the cost of
collection of the rent accruing therefrom to satisfy the rent provided for in
this Lease to be paid, then Tenant shall immediately satisfy and pay any such
deficiency.  Any such payments due
Landlord shall be made upon demand therefor from time to time and Tenant agrees
that Landlord may file suit to recover any sums falling due from time to time.  Notwithstanding any such reletting without
termination, Landlord may at any time thereafter elect in writing to terminate
this Lease for such previous breach.

 

24.4         Exercise by Landlord of any one or more
remedies hereunder granted 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, whether by agreement or by operation of law, it being understood that
such surrender and/or termination can be effected only by the 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.  Tenant and Landlord further agree that
forbearance or waiver by Landlord to enforce its rights pursuant to this Lease
or at law or in equity, shall not be 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 as provided for 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.  The terms “enter,” “re-enter,” “entry” or
“re-entry,’ as used in this Lease, are not restricted to their technical legal
meanings.  Any reletting of the Premises
shall be on such terms and conditions as Landlord in its sole discretion may
determine (including without limitation a term different than the remaining
Lease Term, rental concessions, alterations and repair of the Premises, and
lease of less than the entire Premises to any tenant .  Landlord shall not be liable, 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, unless
Landlord has not made commercially reasonable efforts in regards thereto.

 

25.   Tenant’s Remedies/Limitation of Liability.  Landlord shall not be in default hereunder
unless Landlord fails to perform any of its obligations hereunder within thirty
(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 thirty (30) days, then after such period of time as is reasonably
necessary).  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.  If Landlord defaults in the performance of its repair obligations
pursuant to Paragraph 10 of the Lease and does not cure such default within
thirty (30) days after written notice from Tenant specifying the default (or
does not within said period commence and diligently proceed and continue to
cure such default within a reasonable period of time), Tenant, without waiver of
or prejudice to any other right or remedy it may have, shall have the right, at
any time thereafter, to cure such default for Landlord’s account, and Landlord
shall reimburse Tenant within thirty (30) days of receipt of invoice for any
reasonable amount paid to effect such cure and any expense or contractual
liability so incurred, with interest from the date of disbursement at the
Default Rate.  All obligations of
Landlord under this Lease will be binding upon Landlord only as to 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, and in the event of 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 Lease Term upon each new owner for the
duration of such owner’s ownership.  Any
liability of Landlord under this Lease shall be limited solely to its interest
in the Premises, and 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.

 

26.   Subordination.

 

26.1         This Lease and Tenant’s
interest and rights hereunder are and shall be subject and subordinate at all
times to the lien of any first mortgage, now existing or hereafter created on
or against 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.  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 reasonably requested by any such
holder.  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.

 

26.2         Notwithstanding
anything herein to the contrary, the subordination of this Lease and Tenant’s
obligation to attorn to anyone other than the Landlord named herein is
contingent upon the written agreement, in recordable form, of any beneficiary
under any deed of trust affecting the Premises or any subsequent owner of the
Premises agreeing, provided there has been no Event of Default by Tenant, to
not disturb the possession of Tenant of the Premises in the event of any
foreclosure of any deed of trust or other transfer of the Premises in
substantially the form and content as attached hereto as Addendum Three.

 

27.   Mechanic’s Liens. 
Tenant has no express or implied authority to create or place
any lien or encumbrance of any 

 

9

 

kind upon, or in any manner to bind the interest of
Landlord or Tenant in, the Premises or to charge the rentals payable hereunder
for any claim in favor of any person dealing with Tenant, including those who
may furnish materials or perform labor for any construction or repairs.  Tenant covenants and agrees that it will pay
or cause to be paid all sums legally due and payable by it on account of any
labor performed or materials furnished in connection with any work performed on
the Premises and that it will save and hold Landlord harmless from all loss,
cost or expense based on or arising of asserted claims or liens against the
leasehold estate or against the interest of Landlord in the Premises or under
this Lease.  Tenant shall give Landlord
immediate written notice of the placing of any lien or encumbrance against the
Premises and cause such lien or encumbrance to be discharged within thirty (30)
days of Tenant’s receipt of notice of the filing of recording thereof;
provided, however, Tenant may contest such liens or encumbrances as long as such
contest prevents foreclosure of the lien or encumbrance and Tenant causes such
lien or encumbrance to be bonded or insured over in a manner satisfactory to
Landlord within such thirty (30) day period.

 

28.   Estoppel Certificates.  Within fifteen (15) business days after receipt of a
written request therefore by Landlord, or any mortgagee of Landlord’s interest
in the Premises, or in the event that upon any sale, assignment or
hypothecation of the Premises, or any part thereof or interest therein by
Landlord, if an estoppel certificate shall be required from Tenant, Tenant
agrees to deliver, in recordable form, a certificate to any mortgagee or
proposed mortgagee or purchaser, or to Landlord, certifying and confirming all
material terms of the Lease, including, but not limited to, that Tenant is in
possession of the Premises, has unconditionally accepted the same and is
currently paying the Base Rent reserved herein; that this Lease is unmodified
and in full force and effect (or if there have been modifications; that the
Lease is in full force and effect as modified and stating the modifications);
that, to Tenant’s knowledge, there are no defaults by Landlord therein, and no
defenses or offsets thereto, or stating those claimed by Tenant.  Such certificate shall also state the date
to which the Base Rent and other charges hereunder have been paid by
Tenant.  Failure of Tenant to respond
within said fifteen (15) business day period in addition to constituting a
default hereunder, shall constitute an acknowledgment that the matters set
forth in such request and the proposed certificate, if any, so submitted are
true and accurate.  Tenant shall also
cause each Guarantor of Tenant’s  obligations under this Lease, if any, to
join in such estoppel certificate.

 

29.   Environmental Requirements.

 

29.1         Except for Hazardous
Materials (hereinafter defined) contained in products used by Tenant and de
minimis quantities for ordinary cleaning and office purposes, Tenant shall not
permit or cause any party to bring any Hazardous Material upon the Premises or
transport, store, use, generate, manufacture or release any Hazardous Materials
in or about the Premises without Landlord’s prior written consent.  Tenant, at its sole cost and expense, shall
operate its business in the Premises in strict compliance with all
Environmental Requirements and shall remediate Hazardous Materials released on
or from the Premises by Tenant, its agents, employees, contractors, subtenants
or invitees as required by the Environmental Requirements.  Tenant shall complete and certify to
disclosure statements as requested by Landlord from time to time relating to
Tenant’s transportation, storage, use, generation, manufacture or release of
Hazardous Materials on the Premises. 
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 or agency regulating or
relating to health, safety, or environmental conditions on, under, or about the
Premises 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.  The term “Hazardous Materials” means and
includes any substance, material, waste, pollutant, or contaminant listed or
defined as hazardous or toxic, 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, its agents, employees, contractors
or invitees, and the wastes, by-products, or residues generated, resulting, or
produced therefrom.

 

29.2         Tenant shall indemnify, defend, and
hold Landlord harmless from and against any and all losses (including, without
limitation, diminution in value of the Premises and loss of rental income),
claims, demands, actions, suits, damages (including, without limitation,
punitive damages), expenses (including, without limitation, remediation,
removal, repair, corrective action, or cleanup expenses), and costs (including,
without limitation, actual attorneys’ fees, consultant fees or expert fees and
including, without limitation, removal or management of any asbestos brought
into the property or disturbed in breach of the requirements of this Paragraph
29, regardless of whether such removal or management is required by law) which
are brought or recoverable against, or suffered or incurred by Landlord as a
result of any release of Hazardous Materials for which Tenant is obligated to
remediate as provided above or any other breach of the requirements under this
Paragraph 29 by Tenant, its agents, employees, contractors, subtenants,
assignees or invitees, regardless of whether Tenant had knowledge of such
noncompliance.  The obligations of
Tenant under this Paragraph 29 shall survive any termination of this Lease.

 

29.3         Landlord shall have access to, and a
right to perform inspections and tests of, the Premises to determine Tenant’s
compliance with Environmental Requirements, its obligations under this
Paragraph 29, or the environmental condition of the Premises.  Access shall be granted to Landlord upon
Landlord’s prior notice to Tenant and at such times so as to minimize, so far
as may be reasonable under the circumstances, any disturbance to Tenant’s
operations.  Such inspections and tests
shall be conducted at Landlord’s expense, unless such inspections or tests
reveal that Tenant has not complied with any Environmental Requirement, in
which case Tenant shall reimburse Landlord for the reasonable cost of such
inspection and tests.  In all cases,
Landlord shall promptly provide Tenant with written results of such inspections
and tests.  Landlord’s receipt of or
satisfaction with any environmental assessment in no way waives any rights that
Landlord holds against Tenant.

 

29.4         If Hazardous
Materials are hereafter discovered on the Premises, and the presence of such
Hazardous Materials is not the result of Tenant’s use of the Premises or any
act or omission of Tenant or its agents, employees, contractors, subtenants or
invitees, and the presence of such Hazardous Materials results in any
contamination, damages, or injury to the Premises that materially and adversely
affects Tenant’s occupancy or use of the Premises, Landlord shall 

 

10

 

promptly take all actions at
its sole expense as are necessary to remediate such Hazardous Materials and as
may be required by the Environmental Requirements.  Within 30 days after notification from Tenant supported by
reasonable documentation setting forth such presence or release of Hazardous
Materials, and after Landlord has been given 
a reasonable period of time after such 30-day period to conduct its own
investigation to confirm such presence or release of Hazardous Materials,
Landlord shall either terminate this Lease or commence to remediate such
Hazardous Materials within sixty (60) days after the completion of Landlord’s
investigation and thereafter diligently prosecute such remediation to
completion.  If Landlord fails to
commence such remediation or if Landlord commences such remediation and fails
to diligently prosecute same until completion, then Tenant may terminate this
Lease by written notice to Landlord after expiration of 30 days following a
notice to Landlord that Tenant intends to terminate this Lease if Landlord does
not promptly commence or diligently prosecute the remediation within such
30-day period.  If Landlord commences
remediation pursuant to this paragraph, Base Rent and Operating Expenses shall
be equitably adjusted if and to the extent and during the period the Premises
are unsuitable for Tenant’s business. 
Notwithstanding anything herein to the contrary, if Landlord obtains a
letter from the appropriate governmental authority that no further remediation
is required prior to the effective date of any such termination, such
termination shall be null and void and this Lease shall remain in full force
and effect.

 

30.           Rules and Regulations.  Tenant shall, at all times during the Lease
Term and any extension thereof, comply with the current rules and regulations
established by Landlord covering use of the Premises which are attached hereto
and may be modified from time to time with written agreement of Landlord and
Tenant.  In the event of any conflict
between said rules and regulations and other provisions of this Lease, the
other terms and provisions of this Lease shall control.

 

31.           Security Service.  Tenant acknowledges and agrees
that, while Landlord may patrol the Premises, Landlord is not providing any
security services with respect to the Premises and 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.

 

32.           Force Majeure.  Neither Landlord nor Tenant shall be held
responsible for delays in the performance of their respective nonmonetary
obligations hereunder when caused by strikes, lockouts, labor disputes, acts of
God, inability to obtain labor or materials or reasonable substitutes therefor,
governmental restrictions, governmental regulations, governmental controls,
delay in issuance of permits, enemy or hostile governmental action, civil
commotion, fire or other casualty, and other causes beyond the reasonable
control of Landlord or Tenant as the case may be (“Force Majeure”).

 

33.           Entire Agreement.  This Lease constitutes the complete
agreement of Landlord and Tenant with respect to the subject matter
hereof.  No representations,
inducements, promises or agreements, oral or written, have been made by
Landlord or Tenant, or anyone acting on behalf of Landlord or Tenant, which are
not contained herein, and any prior agreements, promises, negotiations, or
representations are superseded by this Lease. 
This Lease may not be amended except by an instrument in writing signed
by both parties hereto.

 

34.           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 terms to such illegal, invalid or unenforceable clause or
provision as may be possible and be legal, valid and enforceable.

 

35.          Brokers.

 

35.1         Tenant represents and warrants that it
has dealt with no broker, agent or other person in connection with this
transaction and that no broker, agent or other person brought about this
transaction, other than the broker, if any, set forth on the first page of this
Lease, and Tenant agrees to indemnify and hold Landlord harmless from and
against any claims by any other broker, agent or other person claiming a
commission or other form of compensation by virtue of having dealt with Tenant
with regard to this leasing transaction.

 

35.2         Landlord
represents and warrants that it has dealt with no broker, agent or other person
in connection with this transaction other than the broker set forth on the
first page of this Lease and that no other broker, agent or other person
brought about this transaction, and Landlord agrees to indemnify and hold
Tenant harmless from any and all claims by any broker, agent or other person
claiming a commission or other form of compensation by virtue of having dealt
with Landlord with regard to this leasing transaction.

 

36.          Miscellaneous.

 

36.1         Any payments or charges due from Tenant
to Landlord hereunder shall be considered rent for all purposes of this Lease.

 

36.2         If and when included within the term
“Tenant,” as used in this instrument, there is more than one person, firm or corporation,
each shall be jointly and severally liable for the obligations of Tenant.

 

36.3         All notices required or permitted to be
given under this Lease shall be in writing and shall be sent by registered or
certified mail, return receipt requested, or by a reputable national overnight
courier service, postage prepaid, or by hand delivery addressed to the parties
at their addresses below:

 

11

 

	
  Landlord:

  	
   

  	
  GRA Durham Associates Limited, L.L.C.

  
	
   

  	
   

  	
  Attn:  Peter Galvin

  
	
   

  	
   

  	
  1840 Stonelake Drive

  
	
   

  	
   

  	
  Cleveland, OH 
  44122

  
	
   

  	
   

  	
   

  
	
  With a Copy to:

  	
   

  	
  Craig Davis Properties, Inc.

  
	
   

  	
   

  	
  Attn:  UP
  Property Manager

  
	
   

  	
   

  	
  940 N.W. Cary Parkway, Suite 101

  
	
   

  	
   

  	
  Cary, NC 
  27513

  
	
   

  	
   

  	
   

  
	
  Tenant:

  	
   

  	
  Gilead Sciences, Inc.

  
	
   

  	
   

  	
  Attn:  John
  Sung

  
	
   

  	
   

  	
  333 Lakeside Drive

  
	
   

  	
   

  	
  Foster City, California  94404

  
	
   

  	
   

  	
  cc:  Legal
  Department

  

 

Either party may
by notice given aforesaid change its address for all subsequent notices.  Except where otherwise expressly provided to
the contrary, notice shall be deemed given upon delivery.

 

36.4         Except as otherwise expressly provided
in this Lease, neither party shall unreasonably withhold, condition or delay
any consent or approval.

 

36.5         At Landlord’s request from time to time
Tenant shall furnish Landlord with true and complete copies of its most recent
annual and quarterly financial statements prepared by Tenant or Tenant’s
accountants and reported on Forms 10K and 10Q.

 

36.6         Upon Tenant’s written request, Landlord
shall prepare and execute a memorandum of lease to be recorded in the Durham
County Registry, such memorandum to be substantially similar in form and
content to the memorandum attached hereto as Addendum Four.

 

36.7         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.

 

36.8         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.

 

36.9         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.

 

36.10       Any amount, other than Base Rent or
Operating Expenses, not paid by Tenant within ten (10) days after its due date
in accordance with the terms of this Lease shall bear interest from such due
date until paid in full at the lesser of an interest rate equivalent to the
Prime Rate as published in the Wall Street Journal on the date said amount was
due plus five percent (5%), or fifteen (15) percent per year.
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.

 

36.11       Construction and interpretation of this
Lease shall be governed by the laws of the state in which the Premises is located,
excluding any principles of conflicts of laws.

 

36.12       Time is of the essence as to the
performance of Tenant’s and Landlord’s obligations under this Lease.

 

36.13       All exhibits and addenda attached hereto
are hereby incorporated into this Lease and made a part hereof. In the event of
any conflict between such exhibits or addenda and the terms of this Lease, such
exhibits or addenda shall control.

 

12

 

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

 

 

	
  LANDLORD

  	
   

  	
  TENANT

  
	
   

  	
   

  	
   

  
	
  GRA
  ASSOCIATES LIMITED, L.L.C., an Ohio

  Limited liability company, doing business in

  North Carolina as

  GRA DURHAM ASSOCIATES LIMITED, L.L.C.

  	
   

  	
  GILEAD
  SCIENCES, INC.

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Thomas W. Adler

  	
   

  	
   

  	
  By:

  	
  /s/ Mark L. Perry

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  Thomas W. Adler

  	
   

  	
   

  	
  Name:

  	
  Mark L. Perry

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
  MANAGING PRINCIPAL

  	
   

  	
   

  	
  Its:

  	
  Executive Vice President, Operations

  	
   

  
									

 

13

 

Rules and Regulations

 

1.     The sidewalk, entries, and driveways of the
Premises shall not be obstructed by Tenant, or its agents, 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 Premises,
without the prior written consent of Landlord, not to be unreasonably withheld.

 

3.     Except for seeing-eye dogs or animals used
in Tenant’s normal business operations, no animals shall be allowed in the
offices, halls, or corridors in the Premises.

 

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

 

5.     Parking any type of recreational vehicles
is specifically prohibited on or about the Premises.  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 of determination of said disability.   All vehicles shall be parked in the
designated parking areas in conformity with all signs and other markings.

 

6.     Tenant shall make reasonable efforts to
maintain the Premises free from rodents, insects and other pests not used in
Tenant’s normal business operations.

 

7.     Landlord reserves the right to exclude or
expel from the Premises 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 Premises.

 

8.     Tenant shall not cause Landlord to incur
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.

 

9.     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.

 

10.   Tenant shall not permit illegal storage
outside the Premises or the illegal dumping of waste or refuse or permit any
harmful materials to be illegally placed in any drainage system or sanitary
system in or about the Premises.

 

11.   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.

 

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

 

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

 

14.   Tenant shall utilize only forklifts with
non-marking or non-skid tires, and shall be responsible for the removal of any
hand truck or forklift skid marks on the warehouse floor.

 

15.   The Premises shall not be used for lodging,
sleeping or cooking 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.

 

16.   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 Premises, 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.

 

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

 

18.   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.

 

19.   Tenant may bring upon the Premises and
Property such hazardous substances as may be typically used for Tenant’s
permitted use or to fulfill Tenant’s obligations under this Lease, without
being in default hereunder, as long as said hazardous substances are used,
stored and transported in compliance with all applicable laws, and specific
written notice thereof is given to Landlord.

 

14

 

ADDENDUM ONE

 

ATTACHED TO AND A PART OF THE LEASE AGREEMENT

DATED June 12th, 2003
BETWEEN

GRA DURHAM ASSOCIATES LIMITED, L.L.C.

and

GILEAD SCIENCES, INC.

 

 

SECTION 1 – BASE RENT ADJUSTMENTS

 

Monthly Base
Rent shall equal the following amounts for the respective periods of time set
forth below:

 

	
  Period

  	
   

  	
  Monthly Base Rent

  	
   

  
	
  Months 01 through 12

  	
   

  	
  $

  	
  120,985.58

  	
   

  
	
  Months 13 through 24

  	
   

  	
  $

  	
  124,615.15

  	
   

  
	
  Months 25 through 36

  	
   

  	
  $

  	
  128,353.60

  	
   

  
	
  Months 37 through 48

  	
   

  	
  $

  	
  132,204.21

  	
   

  
	
  Months 49 through 60

  	
   

  	
  $

  	
  136,170.34

  	
   

  
	
  Months 61 through 72

  	
   

  	
  $

  	
  140,255.45

  	
   

  

 

SECTION 2 – TENANT IMPROVEMENTS

 

Tenant agrees
to spend at least $750,000 on HVAC repairs and/or modifications (in order to
bring those systems up to a level of operation deemed satisfactory by Tenant)
and at least $50,000 on mutually agreed to interior improvements (i.e., new
paint and carpet) within the first twelve (12) months of the Lease Term.  The cost of any repairs and/or modifications
that Tenant makes to the HVAC systems or towards interior improvements from
November 1, 2002 up to the Commencement Date shall be credited toward the
stated $750,000 and $50,000 minimum amounts, respectively.  As a material inducement to Landlord to
enter into and execute this Lease, Tenant shall be required to spend this money
on an on-going basis over the first twelve (12) months of the Lease Term.  At the completion of the twelfth (12th)
month of the Lease Term, Tenant shall, on a cumulative basis have spent at
least $750,000 towards HVAC and at least $50,000 towards interior
improvements.  At the completion of the
twelfth (12th) month of the Lease Term, Tenant shall be required to
provide Landlord with copies of paid invoices for such stated expenditures for
that period of time.  If Tenant fails to
make such stipulated expenditures within said time periods, Tenant will pay
Landlord, within forty-five (45) days thereafter, an amount equal to the
difference between the stipulated expenditure amounts and the amounts actually
spent thereon by Tenant.

 

SECTION 3 – HVAC MAINTENANCE CONTRACT

 

After having made the
repairs and/or modifications to the HVAC systems referred to in Section 3,
above, Tenant agrees to enter into and maintain through the term of the Lease,
a regularly scheduled preventative maintenance/service contract for servicing
all hot water, heating and air conditioning systems and equipment within the
Premises. The Tenant shall have a qualified HVAC contractor, approved by
Landlord, which approval shall not be unreasonably withheld, perform this
work.  Tenant is required to start the
maintenance/service contract within thirty (30) days of completion of the
repairs and/or modifications to the HVAC system, and service visits shall be
performed on a quarterly basis thereafter. 
A copy of the maintenance/service contract must be provided to the
Landlord within forty-five (45) days of the repairs and/or modifications to the
HVAC systems.

 

The contract shall indicate the term of service (preferably one year)
and include, but not be limited to, these service items as a part of the
maintenance/service contract:

1)     Adjust belt tension;

2)     Lubricate all moving parts,
as necessary;

3)     Inspect and adjust all
temperature and safety controls;

4)     Check refrigeration system
for leaks and operation;

5)     Check refrigeration system
for moisture;

6)     Inspect compressor oil
level and crank case heaters;

7)     Check head pressure,
suction pressure and oil pressure;

8)     Inspect air filters and
replace when necessary;

9)     Check space conditions;

10)   Check condensate drains and
drain pans and clean, if necessary;

11)   Inspect and adjust all
valves;

12)   Check and adjust dampers;

13)   Run machine through complete
cycle.

 

SECTION 4 – CAP ON HVAC REPAIRS

 

Landlord shall
place a cap at $15,000 per occurrence and/or at $50,000 per consecutive twelve
(12) months on Tenant’s cost responsibility for future HVAC repairs, provided
Tenant:  (i) completes at least $750,000
worth of mutually agreed to repairs and modifications to improve the overall
performance and effectiveness of the systems from November 1, 2002 until the
expiration of the first twelve (12) months of the Lease Term; (ii) provides
Landlord with a certificate at the completion of said HVAC
repairs/modifications from the HVAC contractor performing the work certifying
that the systems are in proper working order; (iii) properly maintains the HVAC
systems and is reasonable as to both the scope of work surrounding any
necessary repairs and the costs expended for same; and (iv) has not been in
default of the Lease.  Landlord shall
reimburse Tenant for any reasonable HVAC expenditures in

 

15

 

excess of the cap described
above within thirty (30) days of receipt from Tenant of a detailed description
of the work along with the associated HVAC contractor’s invoices for such work.

 

SECTION 5 – CAP ON CONTROLLABLE
OPERATING EXPENSES

 

5.1           Tenant shall not be responsible to pay for Controllable
Operating Expenses as hereinafter defined in excess of one hundred eight
percent (108%) of the actual Controllable Operating Expenses of the previous
year.  For purposes of this Section 5,
Controllable Operating Expenses shall mean all routinely occurring Operating
Expenses other than insurance, taxes, utility costs and snow removal.  Controllable Operating Expenses shall be
determined on an aggregate basis and not on an individual basis.

 

5.2           Notwithstanding
the foregoing, Tenant shall not be obligated to pay for estimated Controllable
Operating Expenses for calendar year 2003 to the extent they exceed one hundred
five percent (105%) of actual Controllable Operating Expenses for calendar year
2002.

 

SECTION 6 – RIGHT TO AUDIT

 

If Tenant
disputes the amount of Operating Expenses as set forth in the Annual Statement
from the Landlord, then Tenant may have Landlord’s books and records relating
to Operating Expenses audited by a qualified professional selected by Tenant or
by Tenant itself, provided (i) Tenant gives written notice of the audit within
one hundred twenty (120) days of Tenant’s receipt of the Annual Statement, and
(ii) Tenant is not in default under the Lease. 
No subtenant shall have any right to conduct an audit and no assigns
shall conduct an audit for any period during which such assignee was not in
possession of the Premises.

 

Books and
records necessary to accomplish any audit permitted under this Section shall be
retained for twelve months after the end of each calendar year, and on receipt
of notice of Tenant’s dispute of the Operating Expenses shall be made available
to Tenant to conduct the audit, which (at Landlord’s option) may be either at
the Premises, or at Landlord’s designated office in Raleigh, North
Carolina.  If Tenant and Landlord
dispute the amount of Operating Expenses after Tenant’s Audit, then Landlord’s
independent certified public accountant shall consult with Tenant’s
professional to reconcile any discrepancies.

 

SECTION 7 — ASSIGNMENT AND SUBLETTING
CONSENT

 

7.1           Although
Landlord shall not unreasonably withhold its consent to Tenant’s request for
permission to assign the Lease or sublease all or part of the Premises, it
shall be reasonable for the Landlord to withhold its consent to any assignment
or sublease in any of the following instances:

 

(i)                                     The
assignee or sublessee does not have a net worth of at least five million
dollars ($5,000,000) calculated according to generally accepted accounting
principles;

 

(ii)                                  The
intended use of the Premises by the assignee or sublessee is not reasonably
satisfactory to Landlord;

 

(iii)                               Occupancy
of the Premises by the assignee or sublessee would, in Landlord’s opinion,
violate any agreement binding upon Landlord with regard to the identity of
tenants, usage within University Place, or similar matters;

 

(iv)                              The
identity or business reputation of the assignee or sublessee will, in the good
faith judgment of Landlord, tend to damage the goodwill or reputation of the
Project;

 

(v)                                 In
the case of a sublease, the subtenant has not acknowledged that the Lease
controls over any inconsistent provision in the sublease; or

 

(vi)                              The
proposed assignee or sublessee is a government entity.

 

7.2           The foregoing criteria shall not exclude any
other reasonable basis for Landlord to refuse its consent to such assignment or
sublease.

 

(a)                                  Any
approved assignment or sublease shall be expressly subject to the terms and
conditions of this Lease.

 

(b)                                 Tenant
shall provide to Landlord all information concerning the assignee or sublessee
as Landlord may reasonably request.

 

(c)                                  Landlord
may revoke its consent immediately and without notice if, as of the effective
date of the assignment or sublease, there has occurred and is continuing any
default under the Lease.

 

16

 

SECTION 8 – TWO
RENEWAL OPTIONS

 

8.1           Provided
that as of the time of the giving of the First Extension Notice and the
Commencement Date of the Extension Term, (x) Tenant is the Tenant originally
named herein, (y) Tenant actually occupies all of the Premises initially demised
under this Lease and any space added to the Premises, and (z) no Event of
Default exists or would exist but for the passage of time or the giving of
notice, or both; then Tenant shall have the right to extend the Lease Term for
an additional term of seven (7) years (such additional term is hereinafter
called the “First Extension Term”) commencing on the day following the
expiration of the Lease Term (hereinafter referred to as the “Commencement Date
of the First Extension Term”).  Tenant
shall give Landlord notice (hereinafter called the First Extension Notice”) of
its election to extend the term of the Lease Term at least twelve (12) months
prior to the scheduled expiration date of the Lease Term.

 

8.2           Provided
that as of the time of the giving of the Second Extension Notice and the
Commencement Date of the Second Extension Term, (x) Tenant is the Tenant
originally named herein, (y) Tenant actually occupies all of the Premises
initially demised under this Lease and any space added to the Premises, and
(z) no Event of Default exists or would exist but for the passage of time
or the giving of notice, or both and provided Tenant has exercised its option
for the First Extension Term; then Tenant shall have the right to extend the
Lease Term for an additional term of seven (7) years (such additional term is
hereinafter called the “ Second Extension Term”) commencing on the day
following the expiration of the First Extension Term (hereinafter referred to
as the “Commencement Date of the Second Extension Term”).  Tenant shall give Landlord notice
(hereinafter called the “Second Extension Notice”) of its election to
extend the term of the Lease Term at least fourteen (14) months, prior to the
scheduled expiration date of the First Extension Term.

 

8.3           The
Monthly Base Rent payable by Tenant to Landlord during the First Extension Term
shall equal the following amounts for the respective period of time set forth
below:

 

	
  Period

  	
   

  	
  Monthly
  Base Rent

  	
   

  
	
  Months 73 through 84

  	
   

  	
  $

  	
  148,670.78

  	
   

  
	
  Months 85 through 96

  	
   

  	
  $

  	
  153,130.90

  	
   

  
	
  Months 97 through 108

  	
   

  	
  $

  	
  157,724.83

  	
   

  
	
  Months 109 through 120

  	
   

  	
  $

  	
  162,456.57

  	
   

  
	
  Months 121 through 132

  	
   

  	
  $

  	
  167,330.27 

  	
   

  
	
  Months 133 through 144

  	
   

  	
  $

  	
  172,350.18

  	
   

  
	
  Months 145 through 156

  	
   

  	
  $

  	
  177,520.68

  	
   

  

 

8.4           The
Base Rent payable by Tenant to Landlord during the Second Extension Term shall
be the then prevailing market rate for comparable space in comparable buildings
in the Raleigh-Durham area, taking into account the size of the Premises, the
length of the renewal term, market escalations and the credit of Tenant.  The Base Rent shall not be reduced by reason
of any costs or expenses saved by Landlord by reason of Landlord’s not having
to find a new tenant for such Premises, nor increased by reason of Tenant not
having to incur relocation expenses.  In
the event Landlord and Tenant fail to reach an agreement on such rental rate
and execute the Amendment (defined below) at least fourteen (14) months prior
to the expiration of the First Extension Term, then each party shall appoint a
reputable, SIOR designated, commercial real estate broker located in, and with
at least five (5) years commercial brokerage experience, in the Raleigh/Durham,
North Carolina area to, within thirty (30) days thereafter, agree in writing on
said market rate and subsequent annual market escalations applying the
aforementioned factors. If the two (2) broker’ written opinions as to
prevailing market rate are within ten percent (10%) of each other, the two
rates shall be averaged to determine the market rate for all purposes hereunder.  If the two (2) brokers’ opinions are not
within ten (10%) of each other, they will jointly appoint a third, reputable,
SIOR designated, commercial real estate broker located, and with at least five
(5) years commercial brokerage experience in, the Raleigh/Durham area, such
broker to be subject to the reasonable approval of Landlord and Tenant, (the
“Third Broker”).   Within thirty (30)
days from the date of his appointment, the Third Broker shall make his determination
of the proposed fair rental to be used to determine the Base Rent during the
Second Extension Term.  If the Third
Broker’s opinion is equal to one of the opinions of the first two brokers or is
greater than the lower of the two brokers, but less than the higher of the two
brokers, the Third Broker’s opinion shall be deemed to be the proposed fair
rental to be used to determine the Base Rent during the Second Extension
Term.  Otherwise, the broker’s opinion
farthest from that of the Third Broker shall be disregarded and the average of
the remaining two opinions shall be deemed to be the fair rental value to be
used to determine the Base Rent during the Second Extension Term.

 

8.5           The
determination of Monthly Base Rent does not reduce the Tenant’s obligation to
pay or reimburse Landlord for Operating Expenses and other reimbursable items
as set forth in the Lease, and Tenant shall reimburse and pay Landlord as set
forth in the Lease with respect to such Operating Expenses and other items with
respect to the Premises during the First Extension Term and Second Extension
Term without regard to any cap on such expenses set forth in the Lease.

 

8.6           Except
for the Monthly Base Rent as determined above, Tenant’s occupancy of the
Premises during the First Extension Term and Second Extension Term shall be on
the same terms and conditions as are in effect immediately prior to the
expiration of the initial Lease Term; provided, however, Tenant shall have no
further right to any options to expand, contract, renew or extend the Lease.

 

8.7           If
Tenant does not give the First Extension Notice or Second Extension Notice
within the period set forth in paragraphs (8.1) or (8.2) above respectively,
Tenant’s right to extend the Lease Term shall automatically terminate.  Time is of the essence as to the giving of
the First Extension Notice and Second Extension Notice.

 

17

 

8.8           If the Lease is extended for either the First Extension
Term or Second Extension Term, then Landlord shall prepare and Tenant shall
execute an amendment to the Lease confirming the extension of the Lease Term
and the other provisions applicable thereto (the “Amendment”).

 

8.9           If
Tenant exercises its right to extend the term of the Lease for the First
Extension Term or Second Extension Term pursuant to this Section 9, the
term  “Lease Term” as used in the Lease,
shall be construed to include, when practicable, the First Extension Term or
Second Extension Term, as applicable, except as provided in (8.6) above.

 

18

 

ADDENDUM TWO

 

MOVE-OUT CONDITIONS CHECKLIST

 

ATTACHED TO AND A PART OF THE
LEASE AGREEMENT

DATED June 12th, 2003
BETWEEN

GRA DURHAM ASSOCIATES LIMITED, L.L.C.

and

GILEAD SCIENCES, INC.

 

 

Move-Out Conditions.

 

Per paragraph
21, Tenant is obligated to check and address prior to move-out of the facility
the following items.  Landlord expects
to receive the space in a well maintained condition, with normal wear and tear
of certain areas acceptable.  The
following list is designed to assist in the move-out procedures but is not
intended to be all inclusive.

 

1.     All lighting is to be placed into good
working order.  This includes
replacement of bulbs, ballasts, and lenses as needed.

 

2.     All truck doors and dock levelers should be
serviced and placed in good operating order. 
This would include the necessary replacement of any dented truck door
panels and adjustment of door tension to insure proper operation. All door
panels which are replaced need to be painted to match the Premises.

 

3.     All structural steel columns in the
warehouse and office should be inspected for damage.  Repairs of this nature should be pre-approved by the Landlord
prior to implementation.

 

4.     Heating/air conditioning systems should be
placed in good working order, including the necessary replacement of any parts
to return the unit to a well-maintained condition.  This includes warehouse heaters and exhaust fans (if any).  Upon move-out, Landlord will have an exit
inspection performed by a certified mechanical contractor to determine the
condition.

 

5.     All holes in the sheet rock walls should be
repaired prior to move-out.

 

6.     The carpets and vinyl tiles should be in a
clean, stain free, condition and should not have any holes or chips in
them.  Landlord will accept normal wear
on these items provided they appear to be in a maintained condition.

 

7.     Facilities should be returned in a clean
condition, which would include cleaning of the coffee bar, restroom areas,
windows, and other portions of the space.

 

8.     The warehouse should be in clean condition
with all inventory and racking removed. 
There should be no protrusions of anchors from the warehouse floor and
all holes should be appropriately patched and forklift marks, oil and other
stains removed and the warehouse floor otherwise cleaned.  If machinery/equipment is removed, the
electrical lines should be properly terminated at the nearest junction box.

 

9.     All exterior windows with cracks or
breakage should be replaced.

 

10.   The Tenant shall provide keys for all locks
on the Premises, including front doors, rear doors, and interior doors.

 

11.   Items that have been added by the Tenant and
affixed to the Premises will remain the property of Landlord, unless agreed
otherwise.  This would include but is
not limited to mini-blinds, air conditioners, electrical, water heaters,
cabinets, flooring, etc.  Please note
that if modifications have been made to the space, Landlord retains the right
to have the Tenant remove these at Tenant’s expense.

 

12.   All electrical systems should be left in a safe
condition that conforms to code.  Bare
wires and dangerous installations should be corrected prior to move-out.

 

13.   All plumbing fixtures should be in good
condition and working order, including the water heater.  Faucets and toilets should not leak.

 

14.   All dock bumpers must be left in place and
well secured.

 

15.   Tenant shall not be required under any
provision of this Lease to place any portion of the Premises in better
condition in which same was delivered to Tenant.

 

19

 

ADDENDUM
THREE

 

AGREEMENT OF SUBORDINATION 

NONDISTURBANCE AND ATTORNMENT

 

ATTACHED TO AND A PART OF THE
LEASE AGREEMENT

DATED June 12th, 2003
BETWEEN

GRA DURHAM ASSOCIATES LIMITED, L.L.C.

and

GILEAD SCIENCES, INC.

 

 

THIS AGREEMENT is dated the
            day of
                 ,
2003 between ALLSTATE INVESTMENTS, LLC, a Delaware limited liability company,
as agent and investment manager for one or more of its affiliated insurance
companies (“Lender”), Gilead Sciences, Inc., a Delaware corporation (“Tenant”),
GRA Associates Limited, L.L.C., an Ohio limited liability company (“Borrower”).

 

RECITALS:

 

A.                   Tenant has
executed that certain lease dated June 12th, 2003 (the “Lease”) covering the
premises described in the Lease (“Premises”) in those certain buildings located
at 4611 & 4615 University Drive, Durham, NC (the “Property”) and more
particularly described in Exhibit A attached hereto and made a part hereof, by
this reference; and

 

B.                    Borrower is
or will become the Landlord under the Lease; and

 

C.                    Lender has
made or has agreed to make a mortgage loan to Borrower secured by a mortgage or
deed of trust encumbering the Property which includes an assignment of the
Landlord’s interest in the Lease (the “Mortgage”); and

 

D.                   Tenant,
Borrower and Lender desire to confirm their understanding with respect to the
Lease and the Mortgage.

 

NOW, THEREFORE, in consideration of the
covenants, terms, conditions, agreements contained herein, the parties hereto
agree as follows:

 

1.             The Lease and any extensions,
modifications or renewals thereof, including but not limited to any option to
purchase or right of first refusal to purchase the Property or any portion
thereof, if any, is and shall continue to be subject and subordinate in all
respects to the Mortgage and the lien created thereby, and to any advancements
made thereunder and to any consolidations, extensions, modifications or
renewals thereof.

 

2.             Tenant agrees to deliver to Lender,
in the manner set forth in Paragraph 7, a copy of any notice of default sent to
the Landlord by Tenant.  If the Landlord
fails to cure such default within the time provided in the Lease, Lender shall
have the right, but not the obligation to cure such default on behalf of the Landlord
within thirty (30) calendar days after the time provided for the Landlord to
cure such default in the Lease or within a reasonable period if such default
cannot be cured within that time, provided Lender is proceeding with due
diligence to cure such default.  In such
event Tenant shall not terminate the Lease while such remedies are being
diligently pursued by Lender.  Further,
Tenant shall not terminate the Lease on the basis of any default by the
Landlord which is incurable by Lender (such as, for example, the bankruptcy of
the Landlord or breach of any representation by the Landlord), provided Lender
is proceeding with due diligence to commence an action to appoint a receiver or
to obtain the right to possession of the Property by foreclosure, deed in lieu
of foreclosure, or otherwise (“Foreclosure”) Tenant hereby agrees that no
action taken by Lender to enforce any rights under the Mortgage or related
security documents, by reason of any default thereunder (including without
limitation, the appointment of a receiver, any Foreclosure or any demand for
rent under any assignment of rents or leases) shall give rise to any right of
Tenant to terminate the Lease nor shall such action invalidate or constitute a
breach of any of the terms of the Lease.

 

3.             So long as Tenant is not in default
under the Lease, Tenant’s possession and occupancy of the Premises shall not be
disturbed by Lender during the term of the Lease or any extension thereof.

 

4.             If Lender succeeds to the interest
of the Landlord under the Lease, subject to Tenant’s performance of its
obligations under the Lease, the Lease will continue in full force and effect
as a direct lease between Lender and Tenant, and subject to all the terms,
covenants and conditions of the Lease and (b) Lender shall not disturb Tenant’s
right of quiet possession of the Premises or interfere with Tenant’s other
rights under the terms of the Lease so long as Tenant is not in default, beyond
any applicable grace period, of any term, covenant or condition of the Lease
and subject to the limitations herein set forth, shall

 

20

 

perform the obligations on the
Landlord’s part to be performed under the Lease after the date Lender acquires
Title to the Premises.

 

5.             Tenant agrees that, if Lender shall
succeed to the interest of the Landlord under the Lease, Lender, its successors
and assigns, shall not be:

 

(a)                                  liable for any prior
act or omission of the Landlord or any prior Landlord or consequential damages
arising therefrom; except to the extent such act or omission continues after
Lender succeeds to the interest of the Landlord under the Lease; or

(b)                                 subject to any offsets
or defenses which Tenant might have as to the Landlord or any prior Landlord;
or

(c)                                  required or obligated
to credit Tenant with any rent or additional rent for any rental period beyond
the then current month which Tenant might have paid the Landlord; or

(d)                                 bound by any
cancellation or termination of the Lease (other than a unilateral termination
made by Tenant pursuant to the terms of the Lease) or any material amendments
or modifications of the Lease such as those affecting rent, term or permitted
use made without Lender’s prior written consent; or

(e)                                  liable for refund of
all or any part of any security deposit unless such security deposit  shall have been actually received by Lender.

 

The foregoing shall not,
however:  (i)  relieve Lender or any other party succeeding to the interests of
the Landlord as a result of any foreclosure of the obligation to remedy or cure
conditions at the Premises which constitute a Landlord default under the Lease
and which continue at the time of such succession or acquisition, and (ii)
constitute a waiver by Tenant of any claims or causes of action it may have
against the Landlord as a result of conditions or events which occurred prior
to the succession by Lender to the interests of the Landlord.

 

6.             The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assignees. 
The works, “Lender,” “Borrower” and “Tenant” shall include their
respective heirs, legatees, executors, administrators, beneficiaries,
successors and assigns.

 

7.             All notices, and all other
communication with respect to this Agreement, shall be directed as
follows:  if to Lender, c/o Commercial
Mortgage Division,  3075 Sanders Road,
Suite GSC, Northbrook, IL  60062-7127,
Attention: Servicing Manager or such other address as Lender may designate in
writing to Tenant and, if to Tenant, at the address set forth in the Lease or
at such other address as Tenant may designate in writing to Lender.  All notices shall be in writing and shall
be:  (a) hand-delivered;  (b) 
sent by United States express mail or by private overnight courier; or
(c)  served by certified mail postage prepaid,
return receipt requested, to the appropriate address set forth above.  Notices served as provided in (a) and (b)
shall be deemed to be effective upon delivery. 
Any notice served by certified mail shall be deposited in the United
States mail with postage thereon fully prepaid and shall be deemed effective on
the day of actual delivery as shown by the addressee’s return receipt or the
expiration of three business days after the date of mailing, whichever is
earlier in time.

 

8.             Borrower has agreed under the
Mortgage and other loan documents that rentals payable under the Lease shall be
paid directly by Tenant to Lender upon any default by Borrower under the
Mortgage.  After receipt of notice from
Lender to Tenant, at the address set forth above or at such other address as to
which Lender has been notified in writing, that rentals under the Lease should
be paid to Lender, Tenant shall pay to Lender, or at the direction of Lender,
all monies due or to become due to the Landlord under the Lease.  Tenant shall have no responsibility to
ascertain whether such demand by Lender is permitted under the Mortgage, or to
inquire into the existence of a default. 
Borrower hereby waives any right, claim, or demand it may now or
hereafter have against Tenant by reason of such payment to Lender, and any such
payment shall discharge the obligations of Tenant to make such payment to the
Landlord.

 

9.             This Agreement contains the entire
agreement between the parties and no modifications shall be binding upon any
party hereto unless set forth in a document duly executed by or on behalf of
such party.

 

10.           This Agreement may be executed in
multiple counterparts, all of which shall be deemed originals and with the same
effect as if all parties had signed the same document.  All of such counterparts shall be construed
together and shall constitute one instrument.

 

21

 

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

 

	
  LENDER:

  	
   

  	
  TENANT:

  
	
  ALLSTATE
  INVESTMENTS, LLC,

  As agent and investment manager

  	
   

  	
  GILEAD
  SCIENCES, INC., a

  Delaware corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Ralph
  Bergholtz

  	
   

  	
   

  	
  By:

  	
    /s/ Mark L. Perry

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
  Authorized
  Signatory

  	
   

  	
  Its:

  	
    Executive Vice President,
  Operations

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BORROWER:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  GRA
  ASSOCIATES LIMITED, L.L.C.

  an Ohio limited liability company

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Thomas W. Adler

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Its:

  	
  MANAGER

  	
   

  	
   

  	
   

  	
   

  
												

 

22

 

ADDENDUM FOUR

MEMORANDUM OF LEASE

 

	
   

  	
  STATE
  OF:                 

  	
   

  	
  NORTH CAROLINA

  
	
   

  	
   

  	
  MEMORANDUM OF LEASE

  
	
   

  	
   

  	
   

  
	
  COUNTY
  OF:                    

  	
   

  	
   

  

 

GRA
ASSOCIATES LIMITED, L.L.C., a Ohio Limited Liability
Company, doing business in North Carolina as, GRA DURHAM ASSOCIATES LIMITED, L.L.C.
(“Landlord”), whose address is 1840 Stonelake Drive, Cleveland, Ohio  44122, hereby leases to Gilead Sciences,
Inc., for a term beginning on October 1, 2003 and continuing for a period of
seventy-two (72) months, approximately 100,126 square feet of space; allocated
as follows, approximately 51,302 rentable square feet located at 4611
University Drive and approximately 48,824 rentable square feet located at  4615 University Drive, Durham, North
Carolina.

 

The Lease does
not contain an option to purchase.

 

The provisions
set forth in a written lease agreement between the parties dated  June 12th , 2003 are
incorporated herein by reference in this Memorandum.

 

This the 1st
day of July, 2003

 

	
   

  	
  LANDLORD:

  	
   

  
	
   

  	
   

  
	
   

  	
  GRA ASSOCIATES LIMITED, L.L.C.,
  an Ohio

  Limited liability company, doing business in

  North Carolina as

  GRA
  DURHAM ASSOCIATES LIMITED, L.L.C

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Thomas  W. Adler

  	
   

  
	
   

  	
  Title:

  	
  Manager

  	
   

  
							

 

	
  STATE OF
  OHIO

  	
   

  	
  :

  
	
   

  
	
  COUNTY OF

  	
   

  	
  Cuyahoga

  	
   

  	
  :

  
							

 

I, the undersigned Notary Public, certify
that Thomas W. Adler, the Manager of GRA DURHAM ASSOCIATES LIMITED, LLC, a North
Carolina Limited liability company, personally appeared before me this day and
acknowledged the due execution of the foregoing instrument on behalf of the
company.

 

Witness my hand and Notarial
Stamp/Seal this 1st day of July, 2003.

 

	
   

  	
  Valarie Blondin

  	
   

  	
   

  
	
   

  	
  Notary Public

  	
   

  
	
  My
  Commission Expires:

  	
  3-23-05

  	
   

  

 

23

 

EXHIBIT A

 

THE PREMISES

 

(To Be Attached)

 

24

 

EXHIBIT B

 

PARKING PLAN

 

(To Be Attached)

 

25Exhibit
10.82

 

[Lonza Biologics plc
Letterhead]

 

 

Patrick Murphy

Senior Vice President, Production Services

Abgenix, Inc.

6701 Kaiser Drive

Fremont, CA 94555

 

27th June 2003

 

Dear Mr. Patrick Murphy,

 

1.             The
purpose of this letter agreement (“the Variation”) is to (i) acknowledge
termination of that certain Product Supply Agreement (relating to product
supply from the South Western Fermenter Hall), made between Lonza Biologics
plc” (“LB”) and Abgenix, Inc. (“Abgenix”) on 20th November 2000
(“the Agreement”) and (ii) to modify the termination payment due LB from
Abgenix under the Agreement.  All
capitalized terms not otherwise defined in this Variation shall have the
meanings set out in the Agreement.

 

2.             Under Clause 18.1
of Schedule 4 to the Agreement, Abgenix has the right to terminate the
Agreement by notice in writing to LB. 
LB agrees that Abgenix has served such notice and the parties agree that
the Agreement shall terminate on 30th June 2003.

 

3.             Notwithstanding any
provisions of the Agreement, the parties agree that, in consideration for LB
being released from all of its obligations under the Agreement, the termination
fee payable by Abgenix under Clause 18 of Schedule 4 to the Agreement shall be
reduced to ₤17,000,000 (pounds sterling seventeen million).  Such termination fee shall be in full and
final settlement of Abgenix’s obligations arising under Clauses 18.1 and 18.2
and LB’s obligations arising under Clause 18.3 of the Agreement.  Such termination fee shall be considered due
in full on 30th June 2003 and shall be payable in 4 (four) equal
installments of ₤4,250,000 on 1st October 2003, 1st
February 2004, 1st May 2004 and 1st August 2004.  In the event that a payment is late, the
full sum outstanding shall become payable immediately and interest shall accrue
on any amount overdue at the rate of 4% (four percent) above the base lending
rate from time to time of HSBC Bank, interest to accrue on a day to day basis
both before and after judgment.

 

4.             LB hereby agrees,
at no charge to Abgenix, to release those vials of Abgenix product currently
under final release review at such time in 2003, after the date of this
Variation when such final release review is complete.

 

5.             Each of the parties
hereby agrees that, apart from the obligations set forth in this Variation, it
has no claim against the other arising in respect of the Agreement.

 

 

6.             The parties
acknowledge that as partial inducement to entering into this Variation, LB has
agreed to make available manufacturing services to Abgenix on terms and conditions
to be reflected in a separate agreement.

 

7.             Any clauses in the
Agreement expressed to survive the termination of the Agreement shall so
survive.

 

	
  Yours sincerely,

  
	
   

  
	
  /s/ Markus
  Gemuend

  	
   

  
	
   

  
	
  Markus Gemuend

  
	
  Chief Executive Officer

  
	
  For and on behalf of Lonza plc

  
	
   

  
	
  Accepted in full the above terms:

  
	
   

  
	
  /s/ Kurt
  Leutzinger

  	
   

  
	
   

  
	
  Name:  Kurt
  Leutzinger

  
	
  Title:  CFO

  
	
  For and on behalf of Abgenix, Inc.

  

 

2

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