Document:

exv10w2

 

Exhibit 10.2

SECURITY DEPOSIT PLEDGE AGREEMENT

(Loan)

          This Security Deposit Pledge Agreement (this “Agreement”) is made and entered into as of
the 26th day of March 2007, by and between Genitope Corporation a Delaware corporation with its
principal place of business at 6900 Dumbarton Circle, Fremont, CA 94555, (“Debtor”) and General
Electric Capital Corporation, a Delaware corporation, with its principal place of business at 83
Wooster Heights Road, 5th Floor, Danbury, CT 06810 (“Secured Party”).

     In consideration of, and as an inducement for Secured Party to lend funds to Debtor under the
Master Security Agreement, dated as of October 31, 2006, and any Collateral Schedules and
Promissory Notes thereunder (the “Master Security Agreement and all Collateral Schedules and
Promissory Notes thereto being referred to as the “Loan Documents”), and to secure the payment and
performance of all of Debtor’s obligations under the Loan Documents, Debtor hereby deposits and
pledges with Secured Party the sum of One Hundred Thirty-Three Thousand Nine Hundred Sixty-Five and
59/00 Dollars $133,965.59 (the “Security Deposit”), such pledge to be upon the terms and conditions
set forth below (all capitalized terms not otherwise defined herein shall have the meanings set
forth in the Loan Documents):

     1. Debtor delivers the Security Deposit to Secured Party to secure Debtor’s performance of
its obligations under the Loan Documents, including, but not limited to, the timely payment of the
Periodic Installments.

     2. The Security Deposit deposited with Secured Party shall accrue interest at 4% simple
interest per annum from the date of deposit through the date such Security Deposit is returned to
Debtor in connection with Section 5 hereof. Secured Party may commingle the Security Deposit with
its other funds.

     3. Upon any default by Debtor under the Loan Documents, interest accrual on the Security
Deposit shall cease and Secured Party may, at its option, apply the Security Deposit towards the
satisfaction of Debtor’s obligations under the Loan Documents and the payment of all costs and
expenses incurred by Secured Party as a result of such default, including but not limited to, costs
of repossessing equipment and reasonable attorneys’ fees. Such application shall not excuse the
performance at the time and in the manner prescribed of any obligation of Debtor or cure a default
of Debtor. Upon the application by Secured Party of any amount of the Security Deposit pursuant to
the terms of this paragraph, Debtor shall be obligated to immediately pay to Secured Party an
amount sufficient to cause the Security Deposit to equal the amount first set forth above as
reduced in accordance with Section 5 herein.

     4. Secured Party shall have no duty to first commence an action against or seek recourse from
Debtor, in the event of a default under the Loan Documents, before enforcing the provisions of, and
proceedings under the provisions of this Agreement. The obligations of Debtor under this Agreement
shall be absolute and unconditional and shall remain in full force and effect without regard to,
and shall not be released or discharged or in any way affected by:

	 	(a)	 	any amendment or modification of or supplement to the Loan Documents;
	 
	 	(b)	 	any exercise or non-exercise of any right, remedy or privilege under or in respect
to this Agreement, the Loan Documents, or any other instrument provided for in the Loan
Documents, or any waiver, consent, explanation, indulgence or actions or inaction with
respect to any such instrument; or

 

 

	 	(c)	 	any bankruptcy, insolvency, reorganization, arrangement, readjustment,
composition, liquidation or similar proceeding of Debtor.

     5. So long as Debtor is not in default under the Loan Documents or under any other material
financial obligation, Secured Party agrees to reduce the Security Deposit to an amount equivalent
to 25% of the outstanding principal balance of the Loan. The Secured Party shall then refund to
Debtor any Security Deposit in excess of the reduced Security Deposit and accrued interest on the
refunded amount (less any portion of same cashed, sold, assigned or delivered pursuant to, and
under the circumstances specified in Paragraph 3 hereof). The refunds will take place every six
months commencing ___.

     6. So long as Debtor is not in default under the Loan Documents, and in the event Debtor has
(i) borrowed $6,666,666.00 from Secured Party prior to November 30, 2006 and (ii) received the Food
and Drug Administration’s (“FDA”) approval of the marketing and use of Debtor’s drug, MyVax
personalized immunotherapy, Secured Party agrees to deliver to Debtor the Security Deposit and
accrued interest thereon (less any portion of same cashed, sold, assigned or delivered pursuant to
and under the conditions specified in paragraphs 3 and 5 hereof), but in no event will said refund
occur prior to August 31, 2007. Prior to the refund, Debtor shall supply Secured Party with
documented proof of the FDA approval acceptable to Secured Party in its sole discretion. Nothing
in this Section shall be deemed to require Secured Party to refund to Debtor any amount greater
than the amount of the Security Deposit on the date of such scheduled refund. Upon such refund,
Debtor will no longer be required to deposit any Security Deposit with Secured Party, and this
Agreement shall thereupon be without further effect.

     7. So long as Debtor is not in default under the Loan Documents, and in the event Debtor has
(i) borrowed $6,666,666.00 from Secured Party after November 30, 2006 and prior to December 30,
2006, and (ii) received the Food and Drug Administration’s (“FDA”) approval of the marketing and
use of Debtor’s drug, MyVax personalized immunotherapy, Secured Party agrees to deliver to Debtor
the Security Deposit and accrued interest thereon (less any portion of same cashed, sold, assigned
or delivered pursuant to and under the conditions specified in paragraphs 3 and 5 hereof), but in
no event will said refund occur prior to October 30, 2007. Prior to the refund, Debtor shall supply
Secured Party with documented proof of the FDA approval acceptable to Secured Party in its sole
discretion. Nothing in this Section shall be deemed to require Secured Party to refund to Debtor
any amount greater than the amount of the Security Deposit on the date of such scheduled refund.
Upon such refund, Debtor will no longer be required to deposit any Security Deposit with Secured
Party, and this Agreement shall thereupon be without further effect.

     8. Upon the termination of the Loan Documents and the satisfaction of all of the
obligations of Debtor thereunder, Secured Party shall deliver to Debtor the Security Deposit and
accrued interest thereon (less any portion of same cashed, sold, assigned or delivered pursuant
to and under the conditions specified in paragraphs 3 and 5 hereof), and this Agreement shall
thereupon be without further effect.

     9. Secured Party may, without the consent of Debtor, assign this Agreement to another
financial institution reasonably acceptable to Debtor. Debtor agrees that if Debtor receives
written notice of an
assignment from Secured Party, Debtor will pay all amounts due hereunder to such assignee or as
instructed by Secured Party. Debtor also agrees to confirm in writing receipt of the notice of
assignment as may be reasonably requested by assignee. Debtor hereby waives and agrees not to
assert against any such assignee any defense, set-off, recoupment claim or counterclaim, which
Debtor has or may at any time have against Secured Party for any reason whatsoever.

 

 

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

	 	 	 	 	 	 	 	 	 	 	 
	SECURED PARTY:	 	 	 	DEBTOR:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	General Electric Capital Corporation	 	 	 	Genitope Corporation	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Danijela Gjenero 	 	 	 	By:	 	/s/ John Vuko 	 	 
	 

	 	 

	 	 
	 	 	 	 

	 	 
	Name:

	 	Danijela Gjenero 	 	 	 	Name:	 	John Vuko 	 	 
	 

	 	 

	 	 
	 	 	 	 

	 	 
	Title:

	 	Duly Authorized Signatory 	 	 	 	Title:	 	CFOexv10w24

 

Exhibit 10.24

LEASE

	 	 	 
	Landlord:

	 	Britannia Hacienda VIII LLC
	 
	 	 
	Tenant:

	 	Alexza Pharmaceuticals, Inc.
	 
	 	 
	Date:

	 	August 25, 2006

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	1.	 	PROPERTY	 	 	1	 
	 
	 	1.1	 	Lease of Premises	 	 	1	 
	 
	 	1.2	 	Landlord’s Reserved Rights	 	 	2	 
	 
	 	1.3	 	First Refusal Right to Lease	 	 	2	 
	 
	 	1.4	 	Right of First Offer to Lease	 	 	4	 
	2.	 	TERM	 	 	5	 
	 
	 	2.1	 	Term	 	 	5	 
	 
	 	2.2	 	Early Possession	 	 	5	 
	 
	 	2.3	 	Condition of Premises	 	 	5	 
	 
	 	2.4	 	Acknowledgment of Rent Commencement Date	 	 	8	 
	 
	 	2.5	 	Holding Over	 	 	8	 
	 
	 	2.6	 	Option to Extend Term	 	 	8	 
	3.	 	RENTAL	 	 	9	 
	 
	 	3.1	 	Minimum Rental	 	 	9	 
	 
	 	 	 	(a)     Rental Amounts	 	 	9	 
	 
	 	 	 	(b)     Rental Amounts During Extended Term(s)	 	 	10	 
	 
	 	 	 	(c)     Square Footage of Premises	 	 	10	 
	 
	 	3.2	 	Late Charge	 	 	10	 
	4.	 	TAXES	 	 	11	 
	 
	 	4.1	 	Personal Property	 	 	11	 
	 
	 	4.2	 	Real Property	 	 	11	 
	5.	 	OPERATING EXPENSES	 	 	12	 
	 
	 	5.1	 	Payment of Operating Expenses	 	 	12	 
	 
	 	5.2	 	Definition of Operating Expenses	 	 	12	 
	 
	 	5.3	 	Determination of Operating Expenses	 	 	14	 
	 
	 	5.4	 	Final Accounting for Expense Year	 	 	14	 
	 
	 	5.5	 	Proration	 	 	15	 
	6.	 	UTILITIES	 	 	15	 
	 
	 	6.1	 	Payment	 	 	15	 
	 
	 	6.2	 	Interruption	 	 	16	 
	7.	 	ALTERATIONS; SIGNS	 	 	16	 
	 
	 	7.1	 	Right to Make Alterations	 	 	16	 
	 
	 	7.2	 	Title to Alterations	 	 	17	 
	 
	 	7.3	 	Tenant Trade Fixtures	 	 	18	 
	 
	 	7.4	 	No Liens	 	 	18	 
	 
	 	7.5	 	Signs	 	 	18	 

 

	 	 	 	 	 	 	 	 	 
	8.
	 	MAINTENANCE AND REPAIRS	 	 	18	 
	 
	 	8.1	 	Landlord’s Obligation for Maintenance	 	 	18	 
	 
	 	8.2	 	Tenant’s Obligation for Maintenance	 	 	19	 
	 
	 	 	 	(a)     Good
Order, Condition and Repair	 	 	19	 
	 
	 	 	 	(b)     Landlord’s Remedy	 	 	19	 
	 
	 	 	 	(c)     Condition upon Surrender	 	 	20	 
	9.	 	USE OF PROPERTY	 	 	20	 
	 
	 	9.1	 	Permitted Use	 	 	20	 
	 
	 	9.2	 	[Intentionally Omitted.]	 	 	20	 
	 
	 	9.3	 	No Nuisance	 	 	20	 
	 
	 	9.4	 	Compliance with Laws	 	 	21	 
	 
	 	9.5	 	Liquidation Sales	 	 	21	 
	 
	 	9.6	 	Environmental Matters	 	 	21	 
	10.	 	INSURANCE AND INDEMNITY	 	 	27	 
	 
	 	10.1	 	Insurance	 	 	27	 
	 
	 	10.2	 	Quality of Policies and Certificates	 	 	30	 
	 
	 	10.3	 	Workers’ Compensation; Employees	 	 	30	 
	 
	 	10.4	 	Waiver of Subrogation	 	 	30	 
	 
	 	10.5	 	Increase in Premiums	 	 	31	 
	 
	 	10.6	 	Indemnification	 	 	31	 
	 
	 	10.7	 	Blanket Policy	 	 	32	 
	11.	 	SUBLEASE AND ASSIGNMENT	 	 	32	 
	 
	 	11.1	 	Assignment and Sublease of Building	 	 	32	 
	 
	 	11.2	 	Rights of Landlord	 	 	33	 
	12.	 	RIGHT OF ENTRY AND QUIET ENJOYMENT	 	 	34	 
	 
	 	12.1	 	Right of Entry	 	 	34	 
	 
	 	12.2	 	Quiet Enjoyment	 	 	34	 
	13.	 	CASUALTY AND TAKING	 	 	34	 
	 
	 	13.1	 	Damage or Destruction	 	 	34	 
	 
	 	13.2	 	Condemnation	 	 	36	 
	 
	 	13.3	 	Reservation of Compensation	 	 	37	 
	 
	 	13.4	 	Restoration of Improvements	 	 	37	 
	14.	 	DEFAULT	 	 	37	 
	 
	 	14.1	 	Events of Default	 	 	37	 
	 
	 	 	 	(a)     Abandonment	 	 	37	 
	 
	 	 	 	(b)     Nonpayment	 	 	38	 
	 
	 	 	 	(c)     Other Obligations	 	 	38	 
	 
	 	 	 	(d)     General Assignment	 	 	38	 
	 
	 	 	 	(e)     Bankruptcy	 	 	38	 
	 
	 	 	 	(f)     Receivership	 	 	38	 
	 
	 	 	 	(g)     Attachment	 	 	38	 
	 
	 	 	 	(h)     Insolvency	 	 	39	 
	 
	 	14.2	 	Remedies upon Tenant’s Default	 	 	39	 
	 
	 	14.3	 	Remedies Cumulative	 	 	40	 
	15.	 	SUBORDINATION, ATTORNMENT AND SALE	 	 	40	 
	 
	 	15.1	 	Subordination to Mortgage	 	 	40	 

- ii -

 

	 	 	 	 	 	 	 	 	 
	 
	 	15.2	 	Sale of Landlord’s Interest	 	 	41	 
	 
	 	15.3	 	Estoppel Certificates	 	 	41	 
	 
	 	15.4	 	Subordination to CC&R’s	 	 	41	 
	 
	 	15.5	 	Mortgagee Protection	 	 	42	 
	16.	 	SECURITY	 	 	43	 
	 
	 	16.1	 	Deposit	 	 	43	 
	 
	 	 	 	(a)     Cash Security Deposit	 	 	43	 
	 
	 	 	 	(b)     Letter of Credit	 	 	43	 
	 
	 	 	 	(c)     Adjustment of Security Deposit	 	 	45	 
	17.	 	MISCELLANEOUS	 	 	45	 
	 
	 	17.1	 	Notices	 	 	45	 
	 
	 	17.2	 	Successors and Assigns	 	 	47	 
	 
	 	17.8	 	No Waiver	 	 	47	 
	 
	 	17.4	 	Severability	 	 	47	 
	 
	 	17.5	 	Litigation Between Parties	 	 	47	 
	 
	 	17.6	 	Surrender	 	 	47	 
	 
	 	17.7	 	Interpretation	 	 	47	 
	 
	 	17.8	 	Entire Agreement	 	 	48	 
	 
	 	17.9	 	Governing Law	 	 	48	 
	 
	 	17.10	 	No Partnership	 	 	48	 
	 
	 	17.11	 	Financial Information	 	 	48	 
	 
	 	17.12	 	Costs	 	 	49	 
	 
	 	17.13	 	Time	 	 	49	 
	 
	 	17.14	 	Rules and Regulations	 	 	49	 
	 
	 	17.15	 	Brokers	 	 	49	 
	 
	 	17.16	 	Memorandum of Lease	 	 	49	 
	 
	 	17.17	 	Corporate Authority	 	 	49	 
	 
	 	17.18	 	Execution and Delivery	 	 	50	 
	 
	 	17.19	 	Survival	 	 	50	 
	 
	 	17.20	 	Parking	 	 	50	 

	 	 	 	 	 
	EXHIBITS
	 	 	 	 
	EXHIBIT A- 1
	 	Site Plan (The Center)
	EXHIBIT A-2
	 	Building Plan
	EXHIBIT B
	 	Workletter
	EXHIBIT C
	 	Form of Acknowledgment of Rent Commencement Date
	EXHIBIT D
	 	Existing Tenant Rights

- iii -

 

LEASE

     THIS LEASE (“Lease”) is made and entered into as of August 25, 2006 (the
“Lease Commencement Date”) by and between BRITANNIA HACIENDA VIII LLC, a Delaware
limited liability company (“Landlord”), and ALEXZA PHARMACEUTICALS, INC., a Delaware
corporation (“Tenant”).

THE PARTIES AGREE AS FOLLOWS:

1. PROPERTY 

     1.1 Lease of Premises.

          (a) Landlord leases to Tenant and Tenant hires and leases from Landlord, on the terms,
covenants and conditions hereinafter set forth, the premises (the “Premises”) consisting of
approximately 65,604 square feet of space constituting the building commonly known as 2091 Stierlin
Court (the “Building”) located in the Britannia Shoreline Technology Park (referred to
interchangeably herein as the “Center” or the “Property”) in the City of Mountain
View, County of Santa Clara, State of California. The location of the Premises within the Center is
depicted on the site plan attached hereto as Exhibit A-l and incorporated herein by this
reference (the “Site Plan”). The outline or footprint of the Building is depicted on the
building plan attached hereto as Exhibit A-2 and incorporated herein by this reference (the
“Building Plan”). The parking areas, driveways, sidewalks, landscaped areas and other
portions of the Center that lie outside the exterior walls of the buildings now or hereafter
existing from time to time in the Center, as depicted in the Site Plan and as hereafter modified by
Landlord from time to time in accordance with the provisions of this Lease, are sometimes referred
to herein as the “Common Areas”. Such Common Areas include, but are not limited to, the
“recreational area” which is currently maintained by Landlord in the area between the buildings at
2023 Stierlin Court and 2025 Stierlin Court, provided that the right of Tenant and other
occupants of the Center to use such “recreational area” is subject to the right of the City of
Mountain View to require that a portion of the recreational area be paved and converted to parking
use at a time to be determined at the discretion of the City and/or the potential development of
the area by Landlord or any subsequent owner of the Center.

          (b) As an appurtenance to Tenant’s leasing of the Premises pursuant to Section 1.1(a),
Landlord hereby grants to Tenant, for the benefit of Tenant and its employees, suppliers, shippers,
customers and invitees, during the term of this Lease, the non-exclusive right to use, in common
with others entitled to such use, (i) those portions of the Common Areas improved from time to time
for use as parking areas, driveways, sidewalks, landscaped areas, or for other common purposes, and
(ii) all access easements and similar rights and privileges relating to or appurtenant to the
Center and created or existing from time to time under any access easement agreements, declarations
of covenants, conditions and restrictions, or other written agreements now or hereafter of record
with respect to the Center, subject however to any

 

 

limitations applicable to such rights and privileges under applicable law, under this Lease and/or
under the written agreements creating such rights and privileges.

     1.2 Landlord’s Reserved Rights. To the extent reasonably necessary to permit Landlord
to exercise any rights of Landlord and discharge any obligations of Landlord under this Lease,
Landlord shall have, in addition to the right of entry set forth in Section 12.1 hereof, the
following rights: (i) to make changes to the Common Areas, including, without limitation, changes
in the location, size or shape of any portion of the Common Areas, and to construct and/or relocate
parking structures and/or parking spaces in the Center; (ii) to close temporarily any of the Common
Areas for maintenance or other reasonable purposes; (iii) to construct, alter or add to other
buildings and Common Area improvements in the Center; (iv) to use the Common Areas while engaged in
making additional improvements, repairs or alterations to the Center or any portion thereof; and
(v) to do and perform such other acts with respect to the Common Areas and the Center as may be
necessary or appropriate. Landlord shall not exercise rights reserved to it pursuant to this
Section 1.2 in such a manner as to cause any material diminution of Tenant’s rights, or any
material increase of Tenant’s obligations, under this Lease, or in such a manner as to leave Tenant
without reasonable parking or reasonable access to the Premises or otherwise to materially impair
Tenant’s ability to conduct its activities in the normal manner; provided, however, that
the foregoing shall not limit or restrict Landlord’s right to undertake reasonable construction
activity and Tenant’s use of the Premises shall be subject to reasonable temporary disruption
incidental to such activity diligently prosecuted.

     1.3 First Refusal Right to Lease.

          (a) The four buildings in the Center (collectively referred to herein as the “First
Refusal Buildings” and each designated as a “First Refusal Building” on the Site Plan) which
are commonly known as 2021 Stierlin Court, 2023 Stierlin Court, 2071 Stierlin Court and 2081
Stierlin Court are each presently leased (or, in the case of the building at 2023 Stierlin Court,
partially leased) to existing tenants (collectively, the “Existing Tenants” and
individually, each an “Existing Tenant”) pursuant to written lease agreements (as such
existing lease agreements now exist and as they may be amended from time to time, the “Existing Leases”). Landlord shall not lease all or any portion of any of the First Refusal Buildings at
any time during the term of this Lease (including any extended terms, if applicable), except in
compliance with this Section 1.3; provided, however, that the foregoing restriction shall
not apply during any period in which Tenant is in default under this Lease, beyond any applicable
notice and cure periods, and provided further, however, that Tenant’s rights pursuant to this
Section 1.3 are subordinate to the rights of the Existing Tenants and their respective successors
in interest (if any) pursuant to the Existing Leases and are further subordinate to the existing
rights of all other tenants of the Center as of the Lease Commencement Date and their respective
successors in interest, including (without limitation) any renewal, first refusal, first offer and
other similar rights existing in favor of any other tenant or occupant of the Center as of the date
of this Lease. (The rights of the Existing Tenants and other tenants [if any] in the Center with
respect to the First Refusal Buildings and the ROFO Building [as defined below], to the extent
material with respect to Tenant’s rights under Sections 1.3 and/or 1.4 hereof, are summarized in
Exhibit D attached hereto and incorporated herein by this reference and are hereinafter
collectively referred to as “Existing Tenant Rights”).

- 2 -

 

          (b) If, at any time during the term of this Lease (including any extended
terms, if applicable), Landlord receives and wishes to accept a bona fide written
offer from a person or entity (an “Offeror,”  provided, however, that the term
“Offeror” shall not include any tenant with Existing Tenant Rights, nor shall it include the
Existing Tenants with respect to any rights or negotiations under the Existing Leases) to lease
all or any portion of any First Refusal Building and if Tenant is not then in default under this
Lease (beyond any applicable notice and cure periods), then Landlord shall give written notice of
such bona fide written offer to Tenant (the “First Refusal Notice”), specifying
the material terms on which the Offeror proposes to lease the applicable First Refusal Building or
applicable portion thereof (the “First Refusal Space”), and shall offer to Tenant the
opportunity to lease the First Refusal Space on the terms specified in the First Refusal Notice.
For purposes of this Section 1.3(b), an offer shall be considered bona fide if it is
contained in a letter of intent or other writing signed by the Offeror and specifies the material
terms of the proposed lease. Tenant shall have ten (10) business days after the date of giving of
the First Refusal Notice in which to accept such offer by written notice to Landlord. Upon such
acceptance by Tenant, the First Refusal Space shall be leased to Tenant on the terms set forth in
the First Refusal Notice and on the additional terms and provisions set forth in this Lease
(except to the extent inconsistent with the terms set forth in the First Refusal Notice), and the
parties shall promptly (and in all events within twenty (20) business days after delivery of
Tenant’s acceptance) execute a lease amendment or other written agreement containing the terms of
the First Refusal Notice and all other terms and provisions of this Lease not inconsistent with
the terms of said First Refusal Notice, except as the parties may otherwise mutually agree. If
Tenant does not accept Landlord’s offer within the allotted time or if the parties fail to enter
into such a lease amendment or other written agreement within the required time (notwithstanding
Landlord’s and Tenant’s good faith and diligent efforts to enter into such a lease amendment or
other written agreement, provided that neither party shall be entitled to invoke its own
lack of good faith, diligent efforts, if applicable, as a basis for invoking this parenthetical
qualification), Landlord shall thereafter have the right to lease the First Refusal Space to the
Offeror or to any other third party, at any time within one hundred eighty (180) days after the
expiration of Landlord’s offer under the First Refusal Notice, at a minimum rental and on other
terms and conditions not materially more favorable to the lessee than the minimum rental and other
terms offered to Tenant in the First Refusal Notice. If, in the course of negotiations with the
Offeror or another third party during the 180-day period described in the preceding sentence,
Landlord wishes to modify the minimum rental or other terms set forth in the First Refusal Notice
in a manner materially more favorable to the Offeror or other third party than the minimum rental
or other terms set forth in the First Refusal Notice, then Landlord shall be required to re-offer
the First Refusal Space to Tenant on such more favorable terms pursuant to a new First Refusal
Notice, but Tenant’s time to respond to such new First Refusal Notice shall be limited to five (5)
business days. If Landlord does not lease the First Refusal Space to the Offeror or another third
party during the 180-day period described above, or if Landlord leases the First Refusal Space to
the Offeror or another third party and Landlord later, upon expiration or termination of such
lease, again wishes to lease the First Refusal Space or any portion thereof during the term of
this Lease (including any extended terms, if applicable), then in either such event this First
Refusal Right shall reattach to the First Refusal Space on all of the same terms set forth above.

- 3 -

 

     1.4 Right of First Offer to Lease.

          (a) The building commonly known as 2011 Stierlin Court and designated as “ROFO Building” on
the Site Plan (the “ROFO Building”) is presently leased and occupied by an existing tenant
(the “Existing ROFO Tenant”) pursuant to a written lease agreement (as it now exists and as
it may be amended from time to time). Landlord shall not lease all or any portion of the ROFO
Building at any time during the term of this Lease (including any extended terms, if applicable),
except in compliance with this Section 1.4; provided, however, that the foregoing
restriction shall not apply during any period in which Tenant is in default under this Lease,
beyond any applicable notice and cure periods, and provided further, however, that Tenant’s
rights pursuant to this Section 1.4 are subordinate to the Existing Tenant Rights.

          (b) If, at any time during the term of this Lease (including any extended terms, if
applicable), Landlord intends to lease all or any portion of the ROFO Building (other than pursuant
to the exercise of any Existing Tenant Rights) and if Tenant is not then in default under this
Lease (beyond any applicable notice and cure periods), then Landlord shall give written notice of
such intention to Tenant (the “First Offer Notice”), specifying the rent and other material
terms on which Landlord proposes to lease the ROFO Building or applicable portion thereof (the
“Offered Space”), and shall offer to Tenant the opportunity to lease the Offered Space on
the terms specified in the First Offer Notice. Tenant shall have ten (10) business days after the
date of giving of the First Offer Notice in which to accept such offer by written notice to
Landlord. Upon such acceptance by Tenant, the Offered Space shall be leased to Tenant on the terms
set forth the First Offer Notice and on the additional terms and provisions set forth in this Lease
(except to the extent inconsistent with the terms set forth in the First Offer Notice), and the
parties shall promptly (and in all events within twenty (20) business days after delivery of
Tenant’s acceptance) execute a lease amendment or other written agreement containing the terms of
the First Offer Notice and all other terms and provisions of this Lease not inconsistent with the
terms of said First Offer Notice, except as the parties may otherwise mutually agree. If Tenant
does not accept Landlord’s offer within the allotted time or if the parties fail to enter into such
a lease amendment or other written agreement within the required time (notwithstanding Landlord’s
and Tenant’s good faith and diligent efforts to enter into such a lease amendment or other written
agreement, provided that neither party shall be entitled to invoke its own lack of good
faith, diligent efforts, if applicable, as a basis for invoking this parenthetical qualification),
Landlord shall thereafter have the right to lease the Offered Space to any third party, at any time
within one hundred eighty (180) days after the expiration of Tenant’s acceptance period under the
First Offer Notice, at a minimum rental and on other terms and conditions not materially more
favorable to the lessee than the minimum rental and other terms offered to Tenant in the First
Offer Notice. If, in the course of negotiations with a third party during the 180-day period
described in the preceding sentence, Landlord wishes to modify the minimum rental or other terms
set forth in the First Offer Notice in a manner materially more favorable to the third party than
the minimum rental or other terms set forth in the First Offer Notice, then Landlord shall be
required to re-offer the Offered Space to Tenant on such more favorable terms pursuant to a new
First Offer Notice, but Tenant’s time to respond to such new First Offer Notice shall be limited to
five (5) business days. If Landlord does not lease the Offered Space to a third party during the
180-day period described above, or if Landlord leases

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the Offered Space to third party and Landlord later, upon expiration or termination of such lease,
again wishes to lease the Offered Space or any portion thereof during the term of this Lease
(including any extended terms, if applicable), then in either such event this first offer right
shall reattach to the Offered Space on all of the same terms set forth above.

2. TERM

     2.1 Term. The term of this Lease shall commence on the Lease Commencement Date
as defined above. Tenant’s obligation to pay minimum rental and Operating Expenses under
this Lease shall commence on April 1, 2007 (the “Rent Commencement Date”), except
as otherwise expressly provided in Section 2.2 below (if applicable). The term of this
Lease shall end on the day immediately preceding the eleventh (11th) anniversary of the
Rent Commencement Date (the “Termination Date”), unless sooner terminated or
extended as hereinafter provided.

     2.2 Early Possession. Tenant shall have the nonexclusive right to enter and use
the Premises for the purpose of conducting preliminary inspections and measurements,
preparing drawings, constructing improvements in the Premises (subject to all the terms
and conditions of Article 7 below and of the Workletter as defined below), installing
fixtures and furniture, laboratory equipment, computer equipment, telephone equipment,
low-voltage data wiring and personal property and performing other similar work
preparatory to the commencement of Tenant’s business in the Premises, beginning on the
first (1st) business day following the Lease Commencement Date (the “Early
Access Date”). Such early occupancy and possession by Tenant shall be subject to and
upon all of the terms and conditions of this Lease (including, but not limited to,
conditions relating to the payment of utilities and maintenance of required insurance by
Tenant), except that (i) Tenant shall have no obligation to pay minimum rental or
Operating Expenses for any period prior to the Rent Commencement Date, and (ii) such
early possession shall not advance or otherwise affect the Rent Commencement Date or
Termination Date determined under Section 2.1, except to the extent (if any) expressly
provided above in this Section 2.2. To the extent Landlord and/or its contractors or
consultants are also performing work in the Premises prior to the Rent Commencement Date,
Tenant shall not unreasonably interfere with or delay Landlord’s contractors or
consultants by any early access, occupancy or possession under this Section 2.2, shall
coordinate and cooperate with Landlord and its contractors and consultants (who shall
similarly coordinate and cooperate with Tenant and its contractors) to minimize any
interference or delay by either party with respect to the other party’s work following
the Early Access Date, and shall indemnify Landlord and its agents and employees to the
extent provided in Section 10.6(a) below and in Paragraph 5(c) of the Workletter in
connection with Tenant’s early entry upon the Premises hereunder.

     2.3 Condition of Premises. Tenant has had an opportunity to inspect the condition
of the Premises and agrees to accept the Premises “as is” in their condition existing as
of the Lease Commencement Date, without any obligation on the part of Landlord to
improve, alter, repair or clean the Premises in any way for Tenant’s occupancy hereunder,
except as otherwise expressly provided herein. Notwithstanding the foregoing:

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          (a) Landlord shall deliver the Premises and all Building systems and existing
improvements in “as is” condition, except that Landlord shall, at Landlord’s sole expense,
perform all work necessary to cause the following (collectively, “Landlord’s Work”) to be
true as soon as practicable after the Early Access Date (and in all events prior to the Rent
Commencement Date): (i) the Building roof shall be in good and watertight condition; (ii) all
existing Building systems (including, but not limited to, mechanical, electrical, plumbing and life
safety systems), utilities serving the Premises, Building glazing, Building roll-up doors and other
existing improvements in the Premises shall be in good working condition and operable in their
current locations, prior to modifications (or damage, if any) as a result of Tenant’s improvements
or use, and shall remain so for a period of nine (9) months after the Rent Commencement Date
(subject to the qualification set forth below in this paragraph regarding corrective work
attributable to modifications or damage, if any, in the course of Tenant’s improvements to or use
of the Premises); (iii) the walkways, parking lots, driveways and landscaping in the Common Areas
shall be in good working condition; and (iv) the Premises and existing improvements therein, as
delivered to Tenant prior to modifications (or damage, if any) as a result of Tenant’s improvements
or use, and the Common Areas of the Center shall comply with all applicable laws, ordinances,
regulations and building codes (including, but not limited to, the Americans with Disabilities Act
(“ADA”), subject to the allocation of ADA compliance responsibilities under Section 2.3(c)
below). Landlord shall proceed diligently and with reasonable efforts to complete Landlord’s Work
as promptly as practicable after the Early Access Date, and Landlord and Tenant shall cooperate
reasonably and in good faith with one another (and cause their respective consultants and
contractors to cooperate reasonably and in good faith with one another) in the manner described in
Section 2.2 above in connection with the concurrent performance of their respective work in the
Building. Following Landlord’s written notice to Tenant that Landlord has completed Landlord’s Work
and is delivering the Premises and the existing Building systems and improvements in the condition
required above in this paragraph (“Landlord’s Completion Notice”), Tenant shall thereafter
during the term of this Lease be responsible (subject, however, to any corrective obligations of
Landlord as expressly set forth in this Section 2.3) for maintenance, repair and/or replacement of
all such systems and improvements to the extent required in accordance with Article 8 hereof.
Notwithstanding the preceding sentence, if Landlord’s obligations with respect to Landlord’s Work
under this paragraph are violated in any respect, then it shall be the obligation of Landlord,
after receipt of written notice from Tenant setting forth with specificity the nature of the
violation, to correct promptly and diligently, at Landlord’s sole cost, the condition(s)
constituting such violation, except that Tenant shall be responsible for any such corrective work
to the extent the condition(s) constituting the violation are attributable to modifications (or
damage, if any) in the course of Tenant’s improvements to or use of the Premises; provided,
however, that Tenant’s failure to give such written notice to Landlord regarding any alleged
violation within nine (9) months after the Rent Commencement Date shall give rise to a conclusive
and irrebuttable presumption that Landlord has complied with all Landlord’s obligations under this

paragraph. TENANT ACKNOWLEDGES THAT THE WARRANTIES AND/OR OBLIGATIONS CONTAINED IN THIS SECTION 2.3
ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE PHYSICAL CONDITION OF
THE PREMISES, BUILDING SYSTEMS AND EXISTING IMPROVEMENTS IN THE

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PREMISES, AND THAT LANDLORD MAKES NO OTHER WARRANTIES EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION
2.3.

          (b) As set forth in the Workletter attached hereto as Exhibit B and incorporated
herein by this reference (the “Workletter”), Landlord shall provide Tenant with a tenant
improvement allowance in the amount of up to Eight Million Three Hundred Thirty-One Thousand Seven
Hundred Eight and no/100 Dollars ($8,331,708.00) (the “Tenant Improvement Allowance”)
towards the construction of Tenant Improvements by Tenant in the Premises. Tenant’s construction of
such Tenant Improvements shall be governed by the provisions of Article 7 hereof and of the
Workletter, and such Tenant Improvements shall be constructed in compliance with all of the
provisions thereof (including, without limitation, all conditions relating to Landlord’s approval
of plans and specifications), as well as the provisions of this Section 2.3. The Tenant
Improvement Allowance shall not be used or useable by Tenant for any moving or relocation expenses
of Tenant, or for any cost or expense associated with any moveable furniture, trade fixtures,
personal property or any other item or element which, under the applicable provisions of this
Lease, will not become Landlord’s property and remain with the Building upon expiration or
termination of this Lease, unless (and only to the extent) otherwise expressly agreed in writing by
Landlord in its sole discretion. Any portion of the Tenant Improvement Allowance which has not been
claimed or drawn by Tenant as of the date that is one year after the Rent Commencement Date shall
expire and shall no longer be available to Tenant thereafter. Additional conditions and procedures
relating to the disbursement of the Tenant Improvement Allowance shall be as set forth in the
Workletter or as otherwise reasonably prescribed in writing by Landlord. The Tenant Improvement
Allowance is provided as part of the basic consideration to Tenant under this Lease and will not
result in any rental adjustment or additional rent beyond the rental amounts expressly provided in
Section 3.1 hereof.

          (c) Landlord warrants to Tenant that the Premises as they exist on the date of Landlord’s
Completion Notice, but without regard to Tenant’s improvements therein or to the particular use for
which Tenant will occupy the Premises, shall not violate any covenants or restrictions of record or
any applicable law, building code, regulation or ordinance in effect on the date of Landlord’s
Completion Notice. Tenant warrants to Landlord that the Tenant Improvements and any other
improvements constructed by Tenant from time to time shall not violate any applicable law, building
code, regulation or ordinance in effect at the time such improvements are placed in service. Without
limiting the generality of the foregoing, the parties intend and acknowledge that Landlord shall be
responsible for ADA and building code compliance for all improvements in the Building shell and
Common Areas (including, but not limited to. existing Building access points, doors, entrances and
ramps) as they exist on the date of Landlord’s Completion Notice (except to the extent, if any,
that such improvements in the Building and/or Common Areas consist of or are materially affected by
improvements constructed by Tenant, such as [but not limited to] any construction of additional
Building doors or access points as part of the Tenant Improvements), subject to the express
assignment of certain areas of responsibility to Tenant as set forth below, and that Tenant shall
be responsible for ADA and building code compliance with respect to the restroom cores and other
interior spaces in the Building and any other ADA and building code compliance required in
connection with or as a result of improvements constructed by Tenant (provided, however,
that nothing in

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this sentence is intended to make Tenant responsible for the cost of ADA compliance with respect to
any existing improvements in the Building to the extent such compliance is required solely because
of the dollar value or overall scope of the improvements constructed by Tenant as opposed to the
particular nature of such improvements), subject to the express assignment of certain areas of
responsibility to Landlord as set forth above. If it is determined that any of these warranties has
been violated, then it shall be the obligation of the warranting party, after written notice from
the other party, to correct the condition (s) constituting such violation promptly, at the
warranting party’s sole cost and expense. TENANT ACKNOWLEDGES THAT EXCEPT AS EXPRESSLY SET FORTH IN
THIS LEASE, NEITHER LANDLORD NOR ANY AGENT OF LANDLORD HAS MADE ANY REPRESENTATION OR WARRANTY AS
TO THE PRESENT OR FUTURE SUITABILITY OF THE CENTER OR THE PREMISES FOR THE CONDUCT OF TENANT’S
BUSINESS OR PROPOSED BUSINESS THEREIN.

     2.4 Acknowledgment of Rent Commencement Date. Promptly following the Rent Commencement
Date, Landlord and Tenant shall execute a written acknowledgment of the Rent Commencement Date,
Termination Date and related matters, substantially in the form attached hereto as Exhibit
C (with appropriate insertions), which acknowledgment shall be deemed to be incorporated herein
by this reference. Notwithstanding the foregoing requirement, the failure of either party to
execute such a written acknowledgment shall not affect the determination of the Rent Commencement
Date, Termination Date and related matters in accordance with the provisions of this Lease.

     2.5 Holding Over. If Tenant holds possession of the Premises or any portion
thereof after the term of this Lease with Landlord’s written consent, then except as otherwise
specified in such consent, Tenant shall become a tenant from month to month at one hundred
twenty-five percent (125%) of the minimum rental and otherwise upon the terms herein specified for
the period immediately prior to such holding over and shall continue in such status until the
tenancy is terminated by either party upon not less than thirty (30) days prior written notice. If
Tenant holds possession of the Premises or any portion thereof after the term of this Lease
without Landlord’s written consent, then Landlord in its sole discretion may elect (by
written notice to Tenant) to have Tenant become a tenant either from month to month or at will, at
one hundred fifty percent (150%) of the minimum rental (prorated on a daily basis for an at-will
tenancy, if applicable) and otherwise upon the terms herein specified for the period immediately
prior to such holding over, or may elect to pursue any and all legal remedies available to Landlord
under applicable law with respect to such unconsented holding over by Tenant. Tenant shall
Indemnify and hold Landlord harmless from any loss, damage, claim, liability, cost or expense
(Including reasonable attorneys’ fees) resulting from any delay by Tenant in surrendering the
Premises or any portion thereof, including but not limited to any claims made by a succeeding
tenant by reason of such delay. Acceptance of rent by Landlord following expiration or termination
of this Lease shall not constitute a renewal of this Lease.

     2.6 Option to Extend Term. Tenant shall have the option to extend the term of this
Lease, at the minimum rental set forth in Section 3.1 (b) below and otherwise upon all the terms
and provisions set forth herein with respect to the initial term of this Lease, for up to two (2)
additional periods of five (5) years each, the first commencing upon the expiration of the initial
term hereof and the second commencing upon the expiration of the first extended term hereof.

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Exercise of such option with respect to the first extended term shall be by written notice to
Landlord at least nine (9) months and not more than fifteen (15) months prior to the expiration of
the initial term hereof. Exercise of such option with respect to the second extended term shall be
by written notice to Landlord at least nine (9) months and not more than fifteen (15) months prior
to the expiration of the first extended term hereof. If Tenant is in default hereunder, beyond any
applicable notice and cure periods, on the date of such notice or on the date the applicable
extended term is to commence, then the exercise of the applicable option shall be of no force or
effect, the extended term shall not commence and this Lease shall expire at the end of the then
current term hereof (or at such earlier time as Landlord may elect pursuant to the default
provisions of this Lease). If Tenant properly exercises one or both extension options under this
Section, then all references in this Lease (other than in this Section 2.6) to the “term” of this
Lease shall be construed to include the extension term(s) thus elected by Tenant. Except as
expressly set forth in this Section 2.6, Tenant shall have no right to extend the term of this
Lease beyond its prescribed term.

3. RENTAL

     3.1 Minimum Rental.

          (a) Rental Amounts. Tenant shall pay to Landlord as minimum rental for the
Premises, in advance, without deduction, offset, notice or demand, on or before the Rent
Commencement Date and on or before the first day of each subsequent calendar month of the initial
term of this Lease, the following amounts per month (subject to adjustment under Section 3.1(c)
below, if applicable):

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Monthly
	Months	 	Sq Ft	 	PSF/PM	 	Minimum Rental
	  01 —   12
	 	 	35,000	 	 	$	3,000	 	 	$	105,000.00	 
	  13 —   24
	 	 	50,000	 	 	$	3,000	 	 	$	150,000.00	 
	  25 —   36
	 	 	65,604	 	 	$	3,070	 	 	$	201,404.28	 
	  37 —   48
	 	 	65,604	 	 	$	3,162	 	 	$	207,446.41	 
	  49 —   60
	 	 	65,604	 	 	$	3,257	 	 	$	213,669.80	 
	  61 —   72
	 	 	65,604	 	 	$	3,355	 	 	$	220,079.89	 
	  73 —   84
	 	 	65,604	 	 	$	3,455	 	 	$	226,682.29	 
	  85 —   96
	 	 	65,604	 	 	$	3,559	 	 	$	233,482.76	 
	  97 — 108
	 	 	65,604	 	 	$	3,666	 	 	$	240,487.24	 
	109 — 120
	 	 	65,604	 	 	$	3,776	 	 	$	247,701.86	 
	121 — 132
	 	 	65,604	 	 	$	3,889	 	 	$	255,132.92	 

     If the obligation to pay minimum rental hereunder for the initial term or for any
renewal term commences on other than the first day of a calendar month or if the initial term or
any renewal term of this Lease terminates on other than the last day of a calendar month, the
minimum rental for such first or last month of the applicable initial or renewal term of this
Lease, as the case may be, shall be prorated based on the number of days the applicable term of
this Lease is in effect during such month. If an increase in minimum rental becomes effective on a

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day other than the first day of a calendar month, the minimum rental for that month shall be the
sum of the two applicable rates, each prorated for the portion of the month during which such rate
is in effect.

          (b) Rental Amounts During Extended Term (s). If Tenant properly exercises
its right to extend the term of this Lease pursuant to Section 2.6 hereof, then (i) the monthly
minimum rental during the first twenty-four (24) months of each extended term shall be equal to one
hundred percent (100%) of the monthly minimum rental payable for the last full calendar month
preceding the commencement of such extended term, and (ii) the monthly minimum rental during each
subsequent year of the applicable extended term shall be equal to one hundred three percent (103%)
of the monthly minimum rental payable during the immediately preceding year of the extended term.

          (c) Square Footage of Premises. The Building and Premises were fully constructed prior
to the date of this Lease, have been measured by Landlord’s Architect and, applying the measurement
formula customarily used by Landlord to measure square footage of buildings in the Center, have
been determined to contain 65,604 square feet, which measurement is final and binding on the
parties, is hereby accepted by the parties for all purposes under this Lease and is not subject to
remeasurement or adjustment. The square footages used in Section 3.1 (a) in calculating the monthly
minimum rental for Months 1 through 24, in being less than the entire square footage of the
Premises, are not meant to imply any limitation on Tenant’s right or ability to have access to and
to use the entire Premises during such months and during the period from the Early Access Date
through the Rent Commencement Date, and shall not affect in any way the calculation of Tenant’s
Operating Cost Share under Article 5 below (which shall be based on the entire square footage of
the Premises throughout the term of this Lease, beginning on the Rent Commencement Date); such
reduced square footages in Section 3.1(a) merely represent a method of implementing an economic
agreement between the parties with respect to the calculation of Tenant’s minimum monthly rental
obligation during Months 1 through 24. If and to the extent the Tenant Improvements constructed
pursuant to the Workletter (subject to Landlord’s approval, compliance with applicable laws and all
other applicable conditions as set forth in the Workletter) include an exterior fenced (but not
completely enclosed) area for emergency generator or other equipment-related purposes, Landlord
agrees that the square footage of such exterior area shall not be considered part of the square
footage of the Premises for purposes of any calculations of minimum rent or of Tenant’s Operating
Cost Share under this Lease.

     3.2 Late Charge. If Tenant fails to pay when due rental or other amounts due
Landlord hereunder, such unpaid amounts shall bear interest for the benefit of Landlord at a rate
equal to the lesser of fifteen percent (15%) per annum or the maximum rate permitted by law, from
the date due to the date of actual payment. In addition to such interest, Tenant shall pay to
Landlord a late charge in an amount equal to six percent (6%) of any installment of minimum rental
and any other amounts due Landlord if not paid in full on or before the fifth (5th) day
after such rental or other amount is due; provided, however, that for the first instance of late
payment during any period of twelve (12) consecutive calendar months during the term of this
Lease, Tenant shall not be required to pay such late charge unless Tenant has failed to pay the
past-due amount within three (3) business days after Landlord has given Tenant written notice that
such

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amount is past due. Tenant acknowledges that late payment by Tenant to Landlord of rental of other
amounts due hereunder will cause Landlord to incur costs not contemplated by this Lease,
including, without limitation, processing and accounting charges and late charges which may be
imposed on Landlord by the terms of any loan relating to the Center. Tenant further acknowledges
that it is extremely difficult and impractical to fix the exact amount of such costs and that the
late charge set forth in this Section 3.2 represents a fair and reasonable estimate thereof.
Acceptance of any late charge by Landlord shall not constitute a waiver of Tenant’s default with
respect to overdue rental or other amounts, nor shall such acceptance prevent Landlord from
exercising any other rights and remedies available to it. Acceptance of rent or other payments by
Landlord shall not constitute a waiver of late charges or interest accrued with respect to such
rent or other payments or any prior installments thereof, nor of any other defaults by Tenant,
whether monetary or non-monetary in nature, remaining uncured at the time of such acceptance of
rent or other payments.

4. TAXES

     4.1 Personal Property. From and after the Rent Commencement Date (or, in the
case of items brought onto the Property by Tenant prior to the Rent Commencement Date, from and
after the date such items are brought onto the Property by Tenant), Tenant shall be responsible
for and shall pay prior to delinquency all taxes and assessments levied against or by reason of
any and all alterations, additions and items existing on or in the Premises from time to time
during the term of this Lease and taxed as personal property rather than as real property,
including (but not limited to) all personal property, trade fixtures and other property placed by
Tenant on or about the Premises. Upon request by Landlord, Tenant shall furnish Landlord with
satisfactory evidence of Tenant’s payment thereof. If at any time during the term of this Lease
any of said alterations, additions or personal property, whether or not belonging to Tenant, shall
be taxed or assessed as part of the Center, then such tax or assessment shall be paid by Tenant to
Landlord within fifteen (15) days after presentation by Landlord of copies of the tax bills in
which such taxes and assessments are included (provided, however, that in the case of
taxes or assessments for which Tenant is being asked to make a lump-sum payment or reimbursement
under this Section 4.1 rather than monthly estimated payments as part of Operating Expenses under
Article 5 hereof, Tenant shall not be required to make such lump-sum payment or reimbursement more
than thirty (30) days in advance of the date on which the applicable tax bill becomes delinquent)
and shall, for the purposes of this Lease, be deemed to be personal property taxes or assessments
under this Section 4.1.

     4.2 Real Property. To the extent any real property taxes and assessments on the
Premises are assessed directly to Tenant, Tenant shall be responsible for and shall pay prior to
delinquency all such taxes and assessments levied against the Premises. Upon request by Landlord,
Tenant shall furnish Landlord with satisfactory evidence of Tenant’s payment thereof. To the
extent the Premises are taxed or assessed to Landlord following the Rent Commencement Date, such
real property taxes and assessments shall constitute Operating Expenses (as that term is defined in
Section 5.2 of this Lease) and shall be paid in accordance with the provisions of Article 5 of
this Lease.

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5. OPERATING EXPENSES

     5.1  Payment of Operating Expenses.

          (a) Tenant shall pay to Landlord, at the time and in the manner hereinafter set
forth, as additional rental, Tenant’s Operating Cost Share of the Operating Expenses defined
in Section 5.2, subject to adjustment pursuant to Section 5.1(b) when applicable. For
purposes of this Section 5.1, “Tenant’s Operating Cost Share” shall be (i) in
the case of Operating Expenses that are reasonably allocable solely to the Building,
one hundred percent (100%); and (ii) in the case of Operating Expenses that are
determined and allocated on a Center-wide basis. nine and three-hundredths percent
(9.03%).

          (b) Tenant’s Operating Cost Share as specified in Section 5.1(a) with respect to
matters allocable to the entire Center is based upon an area of 65,604 square feet for the
Premises and upon an aggregate area of 726,508 square feet for all of the buildings
presently located in the Center. If the actual area of the Premises or of any of the
buildings existing from time to time in the Center changes for any reason (including, but
not limited to, modification of existing buildings, construction of new buildings in the
Center, or construction of new buildings on any adjacent property owned by Landlord and
operated, for common area purposes, on an integrated basis with the Center), then
Tenant’s Operating Cost Share shall be adjusted proportionately to reflect the new actual
areas of the Premises and/or such other buildings, as applicable, as determined in good
faith by Landlord’s architect on the same basis of measurement as applied in determining
the existing square footage of the Building.

     5.2 Definition of Operating Expenses.

          (a) Subject to the exclusions and provisions hereinafter contained and the allocation
principles set forth in Section 5.1, the term “Operating Expenses” shall mean the total
costs and expenses incurred by Landlord for management, operation and maintenance of the Building
and the Center, including, without limitation, costs and expenses of (i) insurance (which may
include, at Landlord’s option, environmental and seismic insurance as part of or in addition to any
casualty or property insurance policy), property management landscaping, and the operation, repair
and maintenance of buildings and Common Areas; (ii) all utilities and services; (iii) real and
personal property taxes and assessments or substitutes therefor levied or assessed against the
Center or any part thereof, including (but not limited to) any possessory interest, use, business,
license or other taxes or fees, any taxes imposed directly on gross rents or services, any
assessments or charges for police or fire protection, housing, transit, open space, street or
sidewalk construction or maintenance or other similar services from time to time by any
governmental or quasi-governmental entity, and any other new taxes on landlords in addition to
taxes now in effect (excluding, however, any tax based on net income); (iv) supplies, equipment,
utilities and tools used in management, operation and maintenance of the Center; (v) capital
improvements to the Center or the improvements therein, amortized over the useful life of such
capital improvement as reasonably determined by Landlord or its accountants, (aa) which reduce or
will cause future reduction of other items of Operating Expenses for which Tenant is otherwise
required to contribute or (bb) which are required by law, ordinance, regulation or order of any
governmental authority (excluding, however, any such expenses incurred by Landlord in

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complying with Landlord’s obligations under Section 2.3 above) or (cc) of which Tenant has use or
which benefit Tenant, and which in either event are reasonably consistent with the nature and
quality of the Center as a first-class life science, office and research and development campus;
and (vi) any other costs (including, but not limited to, any parking or utilities fees or
surcharges not otherwise specifically addressed elsewhere in this Lease) allocable to or paid by
Landlord, as owner of the Center, pursuant to any applicable laws, ordinances, regulations or
orders of any governmental or quasi-governmental authority or pursuant to the terms of the
Declaration (as hereinafter defined) or of any other declarations of covenants, conditions and
restrictions now or hereafter affecting the Center or any other property over which Tenant has
non-exclusive usage rights as contemplated in Section 1.1 (b) hereof. Operating Expenses shall not
include (x) any costs attributable to the initial construction of buildings or Common Area
improvements in the Center, nor (y) any costs attributable to buildings the square footage of
which is not taken into account in determining Tenant’s Operating Cost Share under Section 5.1 for
the applicable period, nor (z) costs incurred by Landlord in complying with Landlord’s obligations
under Section 2.3 above. The distinction between items of ordinary operating maintenance and
repair and items of a capital nature shall be made in accordance with generally accepted
accounting principles applied on a consistent basis or in accordance with tax accounting
principles, as determined in good faith by Landlord’s accountants.

          (b) Notwithstanding any other provisions of this Section 5.2, the following shall not
be included within Operating Expenses: (i) rent paid to any
ground lessor; (ii) the cost of
constructing tenant improvements for any tenant of the Center; (iii) the costs of special
services, goods or materials provided to any other tenant of the Center and not offered or made
available to Tenant; (iv) repairs covered by proceeds of insurance or from funds provided by
Tenant or any other tenant of the Center, or as to which any other tenant of the Center is
obligated to make such repairs or to pay the cost thereof; (v) legal fees, advertising costs or
other related expenses incurred by Landlord in connection with the leasing of space to individual
tenants of the Center; (vi) repairs, alterations, additions, improvements or replacements needed
to rectify or correct any defects in the design, materials or workmanship of the Building, the
Center or the Common Areas; (vii) damage and repairs necessitated by the negligence or willful
misconduct of Landlord or of Landlord’s employees, contractors or agents; (viii) executive
salaries or salaries of service personnel to the extent that such personnel perform services other
than in connection with the management, operation, repair or maintenance of the Building or the
Center: (ix) Landlord’s general overhead expenses not related to the Building or the Center; (x)
legal fees, accountants’ fees and other expenses incurred in connection with disputes with tenants
or other occupants of the Center, or in connection with the enforcement of the terms of any leases
with tenants or the defense of Landlord’s title to or interest in the Center or any part thereof;
(xi) costs incurred due to a violation by Landlord or any other tenant of the Center of the terms
and conditions of any lease; (xii) costs of any service provided to Tenant or to other occupants
of the Center for which Landlord is reimbursed other than through recovery of Operating Expenses; (xiii) personal property taxes due and payable by any other tenant of the Center; and (xiv) costs
incurred by Landlord pursuant to Article 13 of this Lease in connection with an event of casualty
or condemnation (including, but not limited to, any applicable deductible and/or co-insurance
amounts under applicable insurance policies with respect to any seismic event).

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     5.3 Determination of Operating Expenses. On or before the
Rent Commencement Date and during the last month of each calendar year of the term of this Lease
(“Expense Year”), or as soon thereafter as practical, Landlord shall provide Tenant notice
of Landlord’s estimate of the Operating Expenses for the ensuing Expense Year or applicable portion
thereof. On or before the first day of each month during the ensuing Expense Year or applicable
portion thereof, beginning on the Rent Commencement Date, Tenant shall pay to Landlord Tenant’s
Operating Cost Share of the portion of such estimated Operating Expenses allocable (on a prorata
basis) to such month; provided, however, that if such notice is not given in the last month
of an Expense Year, Tenant shall continue to pay on the basis of the prior year’s estimate, if any,
until the month after such notice is given. If at any time or times it appears to Landlord that the
actual Operating Expenses for an Expense Year will vary from Landlord’s previous estimate by more
than five percent (5%), Landlord may, by notice to Tenant, revise its estimate for the applicable
Expense Year and subsequent payments by Tenant for such Expense Year shall be based upon such
revised estimate.

     5.4 Final Accounting for Expense Year.

          (a) Within ninety (90) days after the close of each Expense Year, or as soon after such 90-day
period as practicable, Landlord shall deliver to Tenant a statement of Tenant’s Operating Cost
Share of the Operating Expenses for such Expense Year prepared by Landlord from Landlord’s books
and records. If on the basis of such statement Tenant owes an amount that is more or less than the
estimated payments for such Expense Year previously made by Tenant, Tenant or Landlord, as the case
maybe, shall pay the deficiency to the other party within thirty (30) days after delivery of the
statement. Failure or inability of Landlord to deliver the annual statement within such ninety (90)
day period shall not impair or constitute a waiver of Tenant’s obligation to pay Operating
Expenses, or cause Landlord to incur any liability for damages.

          (b) At any time within three (3) months after receipt of Landlord’s annual statement of
Operating Expenses as contemplated in Section 5.4(a), Tenant shall be entitled, upon reasonable
written notice to Landlord and during normal business hours at Landlord’s office or such other
places as Landlord shall designate, to inspect and examine those books and records of Landlord
relating to the determination of Operating Expenses for the immediately preceding Expense Year
covered by such annual statement or, if Tenant so elects by written notice to Landlord, to request
an independent audit of such books and records. Any such independent audit of the books and records
shall be conducted by a certified public accountant reasonably acceptable to both Landlord and
Tenant or, if the parties are unable to agree, by a certified public accountant appointed by the
Presiding Judge of the San Mateo County Superior Court upon the application of either Landlord or
Tenant (with notice to the other party). In either event, such certified public accountant shall be
one who is not then employed in any capacity by Landlord or Tenant or by any of their respective
affiliates. The audit shall be limited to the determination of the amount of Operating Expenses for
the subject Expense Year, and shall be based on generally accepted accounting principles and tax
accounting principles, consistently applied. If it is determined, by mutual agreement of Landlord
and Tenant or by independent audit, that the amount of Operating Expenses billed to or
paid by Tenant for the applicable Expense Year was incorrect, then the appropriate party shall pay
to the other party the deficiency

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or overpayment, as applicable, within thirty (30) days after the final determination of such
deficiency or overpayment. All costs and expenses of the audit shall be paid by Tenant unless the
audit shows that Landlord overstated Operating Expenses for the subject Expense Year by more than
five percent (5%), in which case Landlord shall pay all costs and expenses of the audit. Tenant
shall be deemed to have approved Landlord’s annual statement of Operating Expenses, and shall be
barred from raising any claims regarding Operating Expenses for the period covered by such annual
statement, except to the extent Tenant specifically identifies any objections or claims based on
such annual statement, in reasonable detail, by written notice to Landlord within four (4) months
after Tenant’s receipt of the applicable annual statement. To the extent Tenant provides Landlord
with timely written notice of any such objections or claims, Landlord and Tenant shall cooperate
reasonably and in good faith to try to resolve the objections or claims raised by Tenant, which
cooperation may include the use of an independent audit initiated by Tenant as contemplated above.
Each party agrees to maintain the confidentiality of the findings of any audit in accordance with
the provisions of this Section 5.4.

     5.5 Proration. If the date on which Tenant’s obligation for payment of Tenant’s
Operating Cost Share commences falls on a day other than the first day of an Expense Year or if
this Lease terminates on a day other than the last day of an Expense Year, then the amount of
Operating Expenses payable by Tenant with respect to such first or last partial Expense Year shall
be prorated on the basis which the number of days during such Expense Year in which this Lease is
in effect bears to 365. The termination of this Lease shall not affect the obligations of Landlord
and Tenant pursuant to Section 5.4 to be performed after such termination.

6. UTILITIES

     6.1 Payment. Commencing with the Early Access Date and thereafter throughout the
term of this Lease (including the early possession period under Section 2.2 above), Tenant shall
pay, before delinquency, all charges for water, gas, heat, light, electricity, power, sewer,
telephone, alarm system, janitorial and other services or utilities supplied to or consumed in or
with respect to the Premises (other than any costs for water, electricity or other services or
utilities furnished with respect to the Common Areas, which costs shall be paid by Landlord and
shall constitute Operating Expenses under Section 5.2 hereof), including any taxes on such services
and utilities. It is the intention of the parties that all such services shall be separately
metered to the Premises. In the event that any utilities or services supplied to the Premises are
not separately metered, then the amount thereof shall be allocated in a reasonable, good faith and
appropriate manner by Landlord between the Premises and the other buildings, premises or areas
sharing such utilities or services, and the portion thereof allocable to the Building may, in
Landlord’s discretion, either be included in Operating Expenses allocable to the Building under
Section 5.1 hereof or be billed directly to Tenant and paid or reimbursed by Tenant within thirty
(30) days after receipt of Landlord’s statement and request for payment, accompanied by reasonable
supporting documentation evidencing the calculation or determination of the amount for which
payment or reimbursement is requested. Notwithstanding the foregoing provisions, during any portion
of the period prior to the Rent Commencement Date in which Landlord is performing repairs or
construction of improvements in the Premises, (a) if Tenant is neither operating its business in
the Premises nor performing any material construction of improvements in the Premises, Landlord
shall bear all utilities charges for the Premises; and (b) if Tenant is

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operating its business in the Premises and/or performing any material construction of improvements
in the Premises, utilities charges for the Premises shall be allocated between Landlord and Tenant
on the basis of a reasonable, good faith estimate of their respective usage of such utilities.

     6.2 Interruption. There shall be no abatement of rent or other charges required
to be paid hereunder and Landlord shall not be liable in damages or otherwise for interruption or
failure of any service or utility furnished to or used with respect to the Premises, the Building
or the Center because of accident, making of repairs, alterations or improvements, severe weather,
difficulty or inability in obtaining services or supplies, labor difficulties or any other cause.
Notwithstanding the foregoing provisions of this Section 6.2, however, in the event of any
interruption or failure of any service or utility to the Premises that (a) is caused in whole or in
material part by the active negligence or willful misconduct of Landlord or its agents, employees
or contractors and (b) continues for more than three (3) business days and (c) materially impairs
Tenant’s ability to use the Premises for the intended purpose hereunder, then following such three
(3) business day period, Tenant’s obligations for payment of rent and other charges under this
Lease shall be abated in proportion to the degree of impairment of Tenant’s use of the Premises,
and such abatement shall continue until Tenant’s use of the Premises is no longer materially
impaired thereby. Tenant expressly waives any benefits of any applicable existing or future law
(including, but not limited to, the provisions of California Civil Code Section 1932(1)) permitting
the termination of a lease due to any such interruption or failure of any service or utility, it
being the intention of the parties that their respective rights in such circumstances shall be
governed solely by the provisions of this Section 6.2.

7. ALTERATIONS; SIGNS

     7.1 Right to Make Alterations. Tenant shall make no alterations, additions or
improvements to the Premises, other than interior non-structural alterations in the Premises
costing less than (i) Seventy-Five Thousand Dollars ($75,000) for any single alteration or
improvement or set of related and substantially concurrent alterations or improvements, and (ii)
One Hundred Fifty Thousand Dollars ($150,000) in the aggregate during any twelve (12) month period,
without the prior written consent of Landlord, which consent shall not be unreasonably withheld,
conditioned or delayed. All such alterations, additions and improvements shall be completed with
due diligence in a good and workmanlike manner, in compliance with plans and specifications
approved in writing by Landlord and in compliance with all applicable laws, ordinances, rules and
regulations, and to the extent Landlord’s consent is not otherwise required hereunder for such
alterations, additions or improvements, Tenant shall give prompt written notice thereof to
Landlord. Tenant shall cause any contractors engaged by Tenant for work in the Building or in the
Center to maintain public liability and property damage insurance, and other customary insurance,
with such terms and in such amounts as Landlord may reasonably require, naming as additional
insureds Landlord and any of its partners, shareholders, property managers, project managers and
lenders designated by Landlord for this purpose, and shall furnish Landlord with certificates of
insurance or other evidence that such coverage is in effect. Notwithstanding any other provisions
of this Section 7.1, under no circumstances shall Tenant make any structural alterations or
improvements, or any changes to the roof or equipment installations on the roof, or any alterations
materially affecting any building systems, without

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Landlord’s prior written consent (which consent shall not be unreasonably withheld, conditioned or
delayed).

     7.2 Title to Alterations. All alterations, additions and improvements installed
by Tenant in, on or about the Premises, the Building or the Center (including, but not limited to,
lab benches, fume hoods, clean rooms, cold rooms and other similar improvements and equipment)
shall become part of the Property and shall become the property of Landlord, unless Landlord elects
to require Tenant to remove the same upon the termination of this Lease; provided, however,
that the foregoing shall not apply to Tenant’s movable furniture, equipment and trade fixtures,
except to the extent any such items are specifically described in the parenthetical in the initial
portion of this sentence and are designed to be portable or removable in nature (i.e., installable
and removable without any material adverse impact on the existing improvements and Building systems
in the Building), Tenant shall promptly repair any damage caused by its removal of any such
furniture, equipment or trade fixtures. Notwithstanding any other provisions of this Article 7,
however, (a) under no circumstances shall Tenant have any right to remove from the Premises or the
Building, at the expiration or termination of this Lease, any lab benches, fume hoods, clean rooms,
cold rooms or other similar improvements and equipment installed in the Building, even if such
equipment and improvements were installed by Tenant (other than portable or removable clean rooms
described at the end of the first sentence of this Section); (b) under no circumstances shall
Tenant have any right to remove from the Premises or the Building, at the expiration or termination
of this Lease, any alterations, additions, improvements or equipment acquired, constructed or
installed with the use, in whole or in part, of any funds from the Tenant Improvement Allowance;
(c) if Tenant requests Landlord’s written consent to any alterations, additions or improvements
under Section 7.1 hereof and, in requesting such consent, asks that Landlord specify whether
Landlord will require removal of such alterations, additions or improvements upon termination or
expiration of this Lease, then Landlord shall not be entitled to require such removal unless
Landlord specified its intention to do so at the time of granting of Landlord’s consent to the
requested alterations, additions or improvements; and (d) in the case of Tenant Improvements
constructed by Tenant under the Workletter, Landlord shall not be entitled to require removal upon
termination or expiration of this Lease of any Tenant Improvements that Landlord has approved to be
installed in the Premises in exercising Landlord’s reasonable approval rights under the Workletter
of the plans and specifications for the applicable elements of such Tenant Improvements.
Notwithstanding any other provisions of this Article 7, (x) it is the intention of the parties that
Landlord shall be entitled to claim all tax attributes associated with alterations, additions,
improvements and equipment constructed or installed by Tenant or Landlord with funds provided by
Landlord pursuant to the Tenant Improvement Allowance; and (y) it is the intention of the parties
that Tenant shall be entitled to claim, during the term of this Lease, all tax attributes
associated with alterations, additions, improvements and equipment constructed or installed by
Tenant with Tenant’s own funds (and without any payment or reimbursement by Landlord pursuant to
the Tenant Improvement Allowance), despite the fact that the items described in this clause (y) are
characterized in this Section 7.2 as becoming Landlord’s property upon installation, in
recognition of the fact that Tenant will have installed and paid for such items, will have the
right of possession of such items during the term of this Lease and will have the obligation to pay
(directly or indirectly) property taxes on such items, carry insurance on such items to the extent

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provided in Article 10 hereof and bear the risk of loss with respect to such items to the extent
provided in Article 13 hereof. If and to the extent it becomes necessary, in implementation of the
foregoing intentions, to identify (either specifically or on a percentage basis, as may be required
under applicable tax laws) which alterations, additions, improvements and equipment constructed as
part of the Tenant Improvements have been funded through the Tenant Improvement Allowance and which
(if any) have been constructed or installed with Tenant’s own funds, Landlord and Tenant agree to
cooperate reasonably and in good faith to make such an identification by mutual agreement.

     7.3 Tenant Trade Fixtures. Subject to the third sentence of Section 7.2 and to
Section 7.5, Tenant may install, remove and reinstall trade fixtures without Landlord’s
prior written consent, except that installation and removal of any trade fixtures which
are affixed to the Building or which affect the Building systems or the exterior or
structural portions of the Building shall require Landlord’s written approval, which
approval shall not be unreasonably withheld, conditioned or delayed. Subject to the
provisions of Section 7.5, the foregoing shall apply to Tenant’s signs, which Tenant
shall have the right to place and remove and replace (a) only with Landlord’s prior
written consent as to location, size and composition, which consent shall not be unreasonably
withheld, conditioned or delayed, and (b) only in compliance with all restrictions and requirements
of applicable law and of any covenants, conditions and restrictions or other written agreements now
or hereafter applicable to the Center. Tenant shall immediately repair any damage caused by
installation and removal of trade fixtures under this Section 7.3.

     7.4 No Liens. Tenant shall at all times keep the Building and the Center free from
all liens and claims of any contractors, subcontractors, materialmen, suppliers or any
other parties employed either directly or indirectly by Tenant in construction work on the Building or the Center. Tenant may contest any claim of lien, but only if, prior to
such contest, Tenant either (i) posts security in the amount of the claim, plus estimated
costs and interest, or (ii) records a bond of a responsible corporate surety in such
amount as may be required to release the lien from the Building and the Center. Tenant
shall indemnify, defend and hold Landlord harmless against any and all liability, loss,
damage, cost and other expenses, including, without limitation, reasonable attorneys’
fees, arising out of claims of any lien for work performed or materials or supplies
furnished at the request of Tenant or persons claiming under Tenant.

     7.5 Signs. Without limiting the generality of the provisions of Section 7.3
hereof, Tenant shall have the right to install signage, subject to Landlord’s prior approval as to
location, size, design and composition (which approval shall not be unreasonably withheld or
delayed), subject to the established sign criteria for the Center and subject to all restrictions
and requirements of applicable law and of any covenants, conditions and restrictions or other
written agreements now or hereafter applicable to the Center,

8. MAINTENANCE AND REPAIRS

     8.1 Landlord’s Obligation for Maintenance. Landlord shall repair and maintain
or cause to be repaired and maintained the Common Areas of the Center and the roof, exterior walls
and other structural portions of the Building. The cost of all work performed by Landlord under

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this Section 8.1 shall be an Operating Expense hereunder, except to the extent such work (i) is
required due to the negligence of Landlord; (ii) involves the repair or correction of a condition
or defect that Landlord is required to correct pursuant to Section 2.3 hereof; (iii) is a capital
expense not includible as an Operating Expense under Section 5.2 hereof, or is otherwise expressly
excluded from treatment as an Operating Expense under any other applicable provision of Section
5.2 hereof; (iv) results from an event of casualty or condemnation covered by Article 13 hereof
(in which event the provisions of such Article 13 shall govern the parties’ rights and
obligations); or (v) is required due to the negligence or willful misconduct of Tenant or its
agents, employees or invitees (in which event Tenant shall bear the full cost of such work
pursuant to the indemnification provided in Section 10.6 hereof, subject to the release set forth
in Section 10.4 hereof). Tenant knowingly and voluntarily waives the right to make repairs at
Landlord’s expense, or to offset the cost thereof against rent, under any law, statute, regulation
or ordinance now or hereafter in effect.

     8.2  Tenant’s Obligation for Maintenance.

          (a) Good Order, Condition and Repair. Except as provided in Section 8.1 hereof, and
subject to the provisions of Article 13 hereof (which shall be controlling in the event of any
casualty or condemnation covered by such Article 13) and of Section 2.3 hereof (which shall be
controlling in the event of any repairs or corrective work covered by such Section 2.3), Tenant at
its sole cost and expense shall keep and maintain in good and sanitary order, condition and repair
the Premises and every part thereof, wherever located, including but not limited to the signs,
interior, ceiling, electrical system, plumbing system, telephone and communications systems
serving the Premises, the HVAC equipment and related mechanical systems serving the Premises (for
which equipment and systems Tenant shall enter into a service contract with a person or entity
designated or reasonably approved by Landlord), all doors, door checks, windows, plate glass, door
fronts, exposed plumbing and sewage and other utility facilities, fixtures, lighting, wall
surfaces, floor surfaces and ceiling surfaces of the Premises and all other interior repairs,
foreseen and unforeseen, with respect to the Premises, as required. To the extent Landlord has any
third-party warranties or service contracts on any improvements or systems in the Premises which
are Tenant’s obligation to maintain during the term of this Lease, Landlord agrees to assign such
warranties or service contracts to Tenant, to the extent practicable, and to use reasonable
efforts to enforce for Tenant’s benefit (and at Tenant’s expense) any such warranties or service
contracts which it is not practicable to assign to Tenant.

          (b) Landlord’s Remedy. If Tenant fails to make or perform promptly any repairs or
maintenance which are the obligation of Tenant hereunder and such failure continues for more than
ten (10) days after written notice from Landlord specifying the required repairs (except in case
of emergency, in which event no such prior notice shall be required, and except that in the case
of repairs or maintenance which cannot reasonably be performed within such 10-day period, the
provisions of this paragraph shall apply only if Tenant fails to commence performance within such
10-day period and thereafter to pursue such performance diligently to completion), Landlord shall
have the right, but shall not be required, to enter the Premises and make the repairs or perform
the maintenance necessary to restore the Premises to good and sanitary order, condition and
repair. Immediately on demand from Landlord, the cost of such repairs shall be due and payable by
Tenant to Landlord.

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          (c) Condition upon Surrender. At the expiration or sooner termination
of this
Lease, Tenant shall surrender the Premises and Building and the improvements located therein,
including any additions, alterations and improvements thereto (except for items which Tenant is
permitted and elects to remove, or is required to remove, pursuant to the provisions of this
Lease), broom clean, in good and sanitary order, condition and repair, ordinary wear and tear and
casualty damage (the latter of which shall be governed by the provisions of Article 13 hereof)
excepted, first, however, removing all goods and effects of Tenant and all and fixtures and items
required to be removed or specified to be removed at Landlord’s election pursuant to this Lease
(including, but not limited to, any such removal required as a result of an election duly made by
Landlord to require such removal as contemplated in Section 7.2), and repairing any damage caused
by such removal. Tenant shall not have the right to remove fixtures or equipment if Tenant is in
default hereunder (beyond any applicable cure period), unless Landlord specifically waives this
provision in writing. Tenant expressly waives any and all interest in any personal property and
trade fixtures not removed from the Center by Tenant at the expiration or termination of this
Lease, agrees that any such personal property and trade fixtures may, at Landlord’s election, be
deemed to have been abandoned by Tenant, and authorizes Landlord (at its election and without
prejudice to any other remedies under this Lease or under applicable law) to remove and either
retain, store or dispose of such property at Tenant’s cost and expense, and Tenant waives all
claims against Landlord for any damages resulting from any such removal, storage, retention or
disposal.

9. USE OF PROPERTY

     9.1 Permitted Use. Subject to Sections 9.3, 9.4 and 9.6 hereof, Tenant shall use
the Premises solely for a research and development, engineering, laboratory,
manufacturing and assembly facility and for ancillary uses reasonably incidental to that
primary use, including (but not limited to) among such ancillary uses clean rooms,
administrative offices, warehousing and other lawful purposes reasonably related to or
incidental to such specified uses (subject in each case to receipt of all necessary
approvals from the City of Mountain View and all other governmental agencies having
jurisdiction over the Premises), and for no other purpose, unless Landlord in its
reasonable discretion otherwise consents in writing.

     9.2 [Intentionally Omitted.]

     9.3 No Nuisance. Tenant shall not use the Premises for or carry on or permit
within the Center or any part thereof any offensive, noisy or dangerous trade, business,
manufacture, occupation, odor or fumes, or any nuisance or anything against public
policy, nor interfere with the rights or business of Landlord in the Building or the
Center, nor commit or allow to be committed any waste in, on or about the Center. For
purposes of the preceding sentence, Landlord acknowledges that the conduct of biotech,
life science or manufacturing operations is not by nature inherently offensive, noisy or
dangerous, but nothing in this sentence is intended to limit or impair Landlord’s right
or ability to enforce the preceding sentence to the extent Tenant’s particular manner of
conducting any such operations is offensive or is unreasonably noisy or dangerous. Tenant
shall not do or permit anything to be done in or about the Center, nor bring nor keep
anything therein, which will in any way cause the Center or any portion thereof to

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be uninsurable with respect to the insurance required by this Lease or with respect to standard
fire and extended coverage insurance with vandalism, malicious mischief and riot endorsements.

     9.4 Compliance with Laws. Tenant shall not use the Premises, the Building or the
Center or permit the Premises, the Building or the Center to be used in whole or in part for any
purpose or use that is in violation of any applicable laws, ordinances, regulations or rules of any
governmental agency or public authority. Tenant shall keep the Premises equipped with all safety
appliances required by law, ordinance or insurance on the Center, or any order or regulation of any
public authority, because of Tenant’s particular use of the Premises. Tenant shall procure all
licenses and permits required for use of the Premises. Tenant shall use the Premises in strict
accordance with all applicable ordinances, rules, laws and regulations and shall comply with all
requirements of all governmental authorities now in force or which may hereafter be in force
pertaining to the use of the Premises and the Center by Tenant, including, without limitation,
regulations applicable to noise, water, soil and air pollution, and making such nonstructural
alterations and additions thereto as may be required from time to time by such laws, ordinances,
rules, regulations and requirements of governmental authorities or insurers of the Center
(collectively, “Requirements”) because of Tenant’s construction of improvements in or other
particular use of the Premises or the Center. Any structural alterations or additions required from
time to time by applicable Requirements because of Tenant’s construction of improvements in the
Premises or other particular use of the Center shall, at Landlord’s election, either (i) be made by
Tenant, at Tenant’s sole cost and expense, in accordance with the procedures and standards set
forth in Section 7.1 for alterations by Tenant or (ii) be made by Landlord at Tenant’s sole cost
and expense, in which event Tenant shall pay to Landlord as additional rent, within ten (10) days
after demand by Landlord, an amount equal to all reasonable costs incurred by Landlord in
connection with such alterations or additions. The judgment of any court, or the admission by
Tenant in any proceeding against Tenant, that Tenant has violated any law, statute, ordinance or
governmental rule, regulation or requirement shall be conclusive of such violation as between
Landlord and Tenant.

     9.5 Liquidation Sales. Tenant shall not conduct or permit to be conducted any auction,
bankruptcy sale, liquidation sale, or going out of business sale, in, upon or about the Center,
whether said auction or sale be voluntary, involuntary or pursuant to any assignment for the
benefit of creditors, or pursuant to any bankruptcy or other insolvency proceeding.

     9.6 Environmental Matters.

          (a) For purposes of this Section, “hazardous substance” shall mean (i) the
substances included within the definitions of the term “hazardous substance” under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended. 42
U.S.C. §§ 9601 et seq., and the regulations promulgated thereunder, as amended, (ii) the
substances included within the definition of “hazardous substance” under the California
Carpenter-Presley-Tanner Hazardous Substance Account Act, California Health & Safety Code §§ 25300
et seq., and regulations promulgated thereunder, as amended, (iii) the substances
included within the definition of “hazardous materials” under the Hazardous Materials Release
Response Plans and Inventory Act, California Heath & Safety Code §§ 25500 et seq.,
and regulations promulgated thereunder, as amended, (iv) the substances included within the

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definition of “hazardous substance” under the Underground Storage of Hazardous Substances
provisions set forth in California Health & Safety Code §§ 25280 et seq., and (v)
petroleum or any fraction thereof; “hazardous waste” shall mean (i) any waste listed as or
meeting the identified characteristics of a “hazardous waste” under the Resource Conservation and
Recovery Act of 1976, 42 U.S.C. §§ 6901 et seq., and regulations promulgated
pursuant thereto, as amended (collectively, “RCRA”), (ii) any waste meeting the identified
characteristics of “hazardous waste,” “extremely hazardous waste” or “restricted hazardous waste”
under the California Hazardous Waste Control Law, California Health & Safety Code §§ 205100
et seq., and regulations promulgated pursuant thereto, as amended (collectively,
the “CHWCL”), and/or (iii) any waste meeting the identified characteristics of “medical
waste” under California Health & Safety Code §§ 25015-25027.8, and regulations promulgated
thereunder, as amended; “hazardous waste facility” shall mean a hazardous waste facility
as defined under the CHWCL; and “pollutant” shall mean all substances defined as a
“pollutant,” “pollution,” “waste,” “contamination” or “hazardous substance” under the
Porter-Cologne Water Quality Control Act, California Water Code §§ 13000 et seq.

          (b) Without limiting the generality of the obligations set forth in Section 9.4 of this
Lease:

          (i) Tenant shall not cause or permit any hazardous substance or hazardous
waste to be brought upon, kept, stored or used in or about the Center without the prior
written consent of Landlord, which consent shall not be unreasonably withheld, except that
Tenant, in connection with its permitted use of the Premises and the Center as provided in
Section 9.1, may keep, store and use materials that constitute hazardous substances which
are customary for such permitted use, provided such hazardous substances are kept, stored
and used in quantities which are customary for such permitted use and are kept, stored and
used in full compliance with clauses (ii) and (iii) immediately below.

          (ii)
Tenant shall comply with all applicable laws, rules, regulations, orders,
permits, licenses and operating plans of any governmental authority with respect to the
receipt, use, handling, generation, transportation, storage, treatment and/or disposal of
hazardous substances or wastes by Tenant or its agents or employees, and Tenant will
provide Landlord with copies of all permits, licenses, registrations and other similar
documents that authorize Tenant to conduct any such activities in connection with its
authorized use of the Premises and the Center from time to time.

          (iii) Tenant shall not (A) operate on or about the Center any facility required
to be permitted or licensed as a hazardous waste facility or for which interim status as
such is required, nor (B) store any hazardous wastes on or about the Center for ninety
(90) days or more, nor (C) conduct any other activities on or about the Center that could
result in the Center or any portion thereof being deemed to be a “hazardous waste
facility” (including, but not limited to, any storage or treatment of hazardous substances
or hazardous wastes which could have such a result), nor (D) store any hazardous wastes on
or about the Center in violation of any federal or California laws or in violation of the
terms of any federal or state licenses or permits held by Tenant.

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          (iv) Tenant shall not install any underground storage tanks on the Property without the
prior written consent of Landlord and prior approval by all applicable governmental authorities. If
and to the extent that Tenant obtains all such required consents and approvals and installs any
underground storage tanks on the Property, Tenant shall comply with all applicable laws, rules,
regulations, orders and permits relating to such underground storage tanks (including any
installation. monitoring, maintenance, closure and/or removal of such tanks) as such tanks are
defined in California Health & Safety Code § 25281(x), including, without limitation, complying
with California Health & Safety Code §§ 25280-25299.7 and the regulations promulgated thereunder,
as amended. Tenant shall furnish to Landlord copies of all registrations and permits issued to or
held by Tenant from time to time for any and all underground storage tanks located on or under the
Property.

          (v) If applicable, Tenant shall provide Landlord in writing the following information
and/or documentation within fifteen (15) days after the Rent Commencement Date, and shall update
such information at least annually, on or before each anniversary of the Rent Commencement Date, to
reflect any change in or addition to the required information and/or documentation
(provided, however, that in the case of the materials described in subparagraphs (B), (C)
and (E) below, Tenant shall not be required to deliver copies of such materials to Landlord but
shall maintain copies of such materials to such extent and for such periods as may be required by
applicable law and shall permit Landlord or its representatives to inspect and copy such materials
during normal business hours at any time and from time to time upon reasonable notice to Tenant):

          (A) A list of all hazardous substances, hazardous wastes and/or pollutants that Tenant
receives, uses, handles, generates, transports, stores, treats or disposes of from time to
time in connection with its operations in the Center.

          (B)
All Material Safety Data Sheets (“MSDS’s”). if any, required to be
completed with respect to operations of Tenant at the Center from time to time in
accordance with Title 26, California Code of Regulations § 8-5194 or 42 U.S.C. § 11021, or
any amendments thereto, and any Hazardous Materials Inventory Sheets that detail the
MSDS’s.

          (C) All Hazardous Waste Manifests, if any, that Tenant is required to complete from
time to time under California Health & Safety Code § 25160, any regulations promulgated
thereunder, any similar successor provisions and/or any amendments to any of the foregoing,
in connection with its operations in the Center,

          (D) Any Hazardous Materials Management Plan required from time to time with respect to
Tenant’s operations in the Center, pursuant to California Health & Safety Code §§ 25500
et seq., any regulations promulgated thereunder, any similar successor
provisions and/or any amendments to any of the foregoing.

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          (E) Any Air Toxics Emissions Inventory Plan required from time to time with
respect to Tenant’s operations in the Center, pursuant to California Health &
Safety Code §§ 44340 et seq., any regulations promulgated thereunder, any
similar successor provisions and/or any amendments to any of the foregoing.

          (F) Any biennial Hazardous Waste Generator reports or notifications
furnished by Tenant to the California Department of Toxic Substances Control or
other applicable governmental authorities from time to time pursuant to
California Code of Regulations Title 22. § 66262.41, any similar successor
provisions and/or any amendments to any of the foregoing, in connection with
Tenant’s operations in the Center.

          (G) Any Hazardous Waste Generator Reports regarding source reductions, as
required from time to time pursuant to California Health & Safety Code §§
25244.20 et seq., any regulations promulgated thereunder, any similar
successor provisions and/or any amendments to any of the foregoing, in
connection with Tenant’s operations in the Center.

          (H) Any Hazardous Waste Generator Reports or notifications not otherwise
described in the preceding subparagraphs and required from time to time pursuant to
California Health & Safety Code § 25153.6, California Code of Regulations Title 22.
Division 4.5, Chapter 12, §§66262.10 et seq. (“Standards Applicable to
Generators of Hazardous Waste”), any other regulations promulgated thereunder, any similar
successor provisions and/or any amendments to any of the foregoing, in connection with
Tenant’s operations in the Center.

          (I) All industrial wastewater discharge permits issued to or held by Tenant
from time to time in connection with its operations in the Center, and all air quality
management district permits issued to or held by Tenant from time to time in connection
with its operations in the Center.

          (J) Copies of any other lists or inventories of hazardous substances, hazardous
wastes and/or pollutants on or about the Center that Tenant is otherwise required to
prepare and file from time to time with any governmental or regulatory authority.

          (vi) Tenant shall secure Landlord’s prior written approval for any proposed receipt,
storage, possession, use, transfer or disposal of “radioactive materials” or “radiation,” as such
materials are defined in Title 26, California Code of Regulations § 17-30100, and/or any other
materials possessing the characteristics of the materials so defined, which approval Landlord may
withhold in its sole and absolute discretion; provided, that such approval shall not be
required for any radioactive materials (x) for which Tenant has secured prior written approval of
the Nuclear Regulatory Commission and delivered to Landlord a copy of such approval (if
applicable), or (y) which Tenant is authorized to use pursuant to the terms of any radioactive
materials license issued by the

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State of California. Tenant, in connection with any such authorized receipt storage,
possession, use, transfer or disposal of radioactive materials or radiation, shall:

          (A) Comply with all federal, state and local laws, rules, regulations, orders,
licenses and permits issued to or applicable to Tenant with respect to its operations in
the Center;

          (B) Maintain, to such extent and for such periods as may be required by applicable
law, and permit Landlord and its representatives to inspect during normal business hours at
any time and from time to time upon reasonable notice to Tenant, a list of all radioactive
materials or radiation received, stored, possessed, used, transferred or disposed of by
Tenant or in connection with Tenant’s operations in the Center from time to time, to the
extent not already disclosed through delivery of a copy of a Nuclear Regulatory Commission
approval with respect thereto as contemplated above; and

          (C) Maintain, to such extent and for such periods as may be required by applicable
law, and permit Landlord or its representatives to inspect during normal business hours at
any time and from time to time upon reasonable notice to Tenant, all licenses, registration
materials, inspection reports, governmental orders and permits in connection with the
receipt, storage, possession, use, transfer or disposal of radioactive materials or
radiation by Tenant or in connection with Tenant’s operations in the Center from time to
time.

          (vii) Tenant shall comply with any and all applicable laws, rules, regulations and orders
of any governmental authority with respect to the release into the environment of any hazardous
wastes, hazardous substances, pollutants, radiation or radioactive materials by Tenant or its
agents or employees. Tenant shall give Landlord immediate verbal notice of any unauthorized release
of any such hazardous wastes, hazardous substances, pollutants, radiation or radioactive materials
into the environment, and shall follow such verbal notice with written notice to Landlord of such
release within twenty-four (24) hours of the time at which Tenant became aware of such release.

          (viii) Tenant shall indemnify, defend and hold Landlord harmless from and against any and
all claims, losses (including, but not limited to, loss of rental income), damages, liabilities,
costs, legal fees and expenses of any sort arising out of or relating to (A) any failure by Tenant
to comply with any provisions of this Section 9.6(b), or (B) any receipt, use handling, generation,
transportation, storage, treatment, release and/or disposal of any hazardous substance, hazardous
waste, pollutant, radioactive material or radiation on or about the Center as a proximate result of
Tenant’s use of the Center or as a result of any intentional or negligent acts or omissions of
Tenant or of any agent, employee or invitee of Tenant.

          (ix) Tenant shall cooperate with Landlord in furnishing Landlord with complete
information regarding Tenant’s receipt, handling, use, storage, transportation. generation,
treatment and/or disposal of any hazardous substances, hazardous wastes,

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pollutants, radiation or radioactive materials in or about the Center. Upon request, but
subject to Tenant’s reasonable operating and security procedures, Tenant shall grant Landlord
reasonable access at reasonable times to the Premises to inspect Tenant’s receipt, handling, use,
storage, transportation, generation, treatment and/or disposal of hazardous substances, hazardous
wastes, pollutants, radiation and radioactive materials, without Landlord thereby being deemed
guilty of any disturbance of Tenant’s use or possession or being liable to Tenant in any manner.

          (x) Notwithstanding Landlord’s rights of inspection and review under this Section
9.6(b), Landlord shall have no obligation or duty to so inspect or review, and no third party shall
be entitled to rely on Landlord to conduct any sort of inspection or review by reason of the
provisions of this Section 9.6(b).

          (xi) Landlord has made available for review by Tenant, prior to execution of this Lease,
copies of all third-party studies and reports in Landlord’s possession regarding environmental
conditions in the Building and/or the Property. Landlord has also engaged an environmental
consultant, at Landlord’s sole expense, to conduct a further environmental study of the Building,
evaluating the presence or absence of hazardous substances, hazardous wastes, pollutants, radiation
and radioactive materials in and under the Building, and Landlord shall provide a copy of such
study to Tenant when it becomes available. The purpose of this study is to provide evidence of the
“baseline” condition of the Building prior to Tenant’s occupancy and use thereof, although such
evidence is not intended to be conclusive or irrebuttable. Tenant shall also have the right (but
not the obligation), if it so elects and at its sole expense, to conduct its own environmental
study of the Building and surrounding areas of the Center prior to or at the time of Tenant’s
occupancy of the Building, in which event Tenant shall provide a copy of such study to Landlord;
provided that prior to any drilling, excavation or other physically invasive testing on the
Building or Property in connection with any such study, Tenant or its consultant shall provide
Landlord with a detailed scope of work and such work shall be subject to Landlord’s prior written
approval (which approval shall not be unreasonably withheld or delayed, but may be conditioned upon
compliance by Tenant and its consultant with reasonable insurance requirements, upon notice
requirements prior to actual entry on the Property, and upon other reasonable and customary
requirements).

          (xii) If Tenant or its employees, agents, contractors, vendors, customers or guests
receive, handle, use, store, transport, generate, treat and/or dispose of any hazardous substances
or wastes or radiation or radioactive materials on or about the Center at any time during the term
of this Lease, then within thirty (30) days after the termination or expiration of this Lease, then
(A) Tenant shall be solely responsible for obtaining, at Tenant’s sole expense, (I) any
environmental tests, studies or reports required by any governmental authority for site or permit
closure purposes or other similar purposes, and (II) to the extent not fully covered by any tests,
studies or reports obtained under the immediately preceding clause, a further environmental study,
performed by an expert reasonably satisfactory to Landlord, evaluating the presence or absence of
hazardous substances, hazardous wastes, pollutants, radiation and radioactive materials on and
about those portions of the Center affected by Tenant’s operations in the

- 26 -

 

Center. Such study shall be based on a reasonable and prudent level of tests and
investigations of the Center (if appropriate), which tests shall be conducted no earlier than
the date of termination or expiration of this Lease. Liability for any remedial actions required or
recommended on the basis of such study shall be allocated in accordance with Sections 9.4, 9.6,
10.6 and other applicable provisions of this Lease.

          (c) Landlord shall indemnify, defend and hold Tenant harmless from and against any and all
claims, losses, damages, liabilities, costs, legal fees and expenses of any sort arising out of or
relating to (i) the presence on the Center of any hazardous substances, hazardous wastes,
pollutants, radiation or radioactive materials present on the Center as of the Rent Commencement
Date (other than as a result of any intentional or negligent acts or omissions of Tenant or of any
agent, employee or invitee of Tenant), and/or (ii) any unauthorized release into the environment
(including, but not limited to. the Center) of any hazardous
substances, hazardous wastes,
pollutants, radiation or radioactive materials to the extent such release results from the
negligence of or willful misconduct or omission by Landlord or its agents or employees.

          (d) The provisions of this Section 9.6 shall survive the termination of this Lease.

10. INSURANCE AND INDEMNITY 

     10.1 Insurance.

          (a) Tenant shall procure and maintain in full force and effect at all times during
the term of this Lease, from and after the Early Access Date, at Tenant’s cost and
expense, commercial general liability insurance to protect against liability to the public, or
to any invitee of Tenant or Landlord, arising out of or related to the use of or
resulting from any accident occurring in, upon or about the Premises, with limits of
liability of not less than
(i) Three Million Dollars ($3,000,000.00) per occurrence for bodily injury, personal injury and
death, and Five Hundred Thousand Dollars ($500,000.00) per occurrence for property damage, or (ii)
a combined single limit of liability of not less than Five Million Dollars ($5,000,000.00) per
occurrence for bodily injury (including personal injury and death) and property damage. Such
insurance shall name Landlord, its general partners, its property manager and any lender holding a
deed of trust on the Center from time to time (as designated in writing by Landlord to Tenant from
time to time) as additional insureds thereunder. The amount of such insurance shall not be
construed to limit any liability or obligation of Tenant under this Lease. Tenant shall also
procure and maintain in full force and effect at all times during the term of this Lease, at
Tenant’s cost and expense, products/completed operations coverage on terms and in amounts (A)
customary in Tenant’s industry for companies engaged in the marketing of products on a scale
comparable to that in which Tenant is engaged from time to time and (B) mutually satisfactory to
Landlord and Tenant in their respective reasonable discretion.

          (b) Landlord shall procure and maintain in full force and effect at all times during
the term of this Lease, at Landlord’s cost and expense (but reimbursable as an Operating
Expense under Section 5.2 hereof), commercial general liability insurance to protect
against liability arising out of or related to the use of or resulting from any accident
occurring in, upon or

- 27 -

 

about the Center, with a combined single limit of liability of not less than Five Million
Dollars ($5,000,000.00) per occurrence for bodily injury (including personal injury and death) and
property damage.

          (c) Landlord shall procure and maintain in full force and effect at all times during the term
of this Lease, at Landlord’s cost and expense (but reimbursable as an Operating Expense under
Section 5.2 hereof), policies of property insurance providing protection against “all risk of
direct physical loss” (as defined by and detailed in the Insurance Service Office’s Commercial
Property Program “Cause of Loss—Special Form [CP1030]” or its equivalent) for the shell of the
Building and for the improvements in the Common Areas of the Center, on a full replacement cost
basis (with no co-insurance or, if coverage without co-insurance is not reasonably available, then
on an “agreed amount” basis or with a commercially reasonable margin clause). Such insurance may
include earthquake and/or environmental coverage, as part of the same policy or as a separate
policy or policies, to the extent Landlord in its sole discretion elects to carry such coverage,
and shall have such commercially reasonable deductibles and other terms as Landlord in its
discretion determines to be appropriate. Landlord shall have no obligation to carry property damage
insurance for any alterations, additions or improvements installed by Tenant in the Building or on
or about the Center.

          (d) Landlord shall procure and maintain in full force and effect at all times during the term
of this Lease, at Tenant’s cost and expense (chargeable, in Landlord’s discretion, either as an
Operating Expense allocable 100% to Tenant or as a direct pass-through to Tenant), policies of
property insurance providing protection against “all risk of direct physical loss” (as defined by
and detailed in the Insurance Service Office’s Commercial Property Program “Cause of Loss—Special
Form [CP1030]” or its equivalent) (i) for the tenant improvements existing in the Premises on the
Early Access Date and (ii) in the case of earthquake or seismic insurance only, for Tenant
Improvements constructed pursuant to the Workletter, eligible for expenditure of funds from the
Tenant improvement Allowance pursuant to Section 2.3(b) above, having an aggregate initial Cost of
Improvements (as defined in the Workletter) of not less than the total Tenant Improvement Allowance
paid by Landlord pursuant to this Lease in connection with the construction of the Tenant
Improvements, and listed on a written schedule jointly prepared and mutually approved in writing by
Tenant and Landlord as provided below (but excluding in each instance Tenant’s Property as defined
in paragraph (e) below, which it shall be Tenant’s responsibility to insure pursuant to such
paragraph), in each instance on a full replacement cost basis (with no co-insurance or, if coverage
without co-insurance is not reasonably available, then on an “agreed amount” basis or with a
commercially reasonable margin clause). Such insurance may have such commercially reasonable
deductibles and other terms as Landlord in its reasonable discretion determines to be appropriate.
The coverage required to be maintained under this paragraph (d) may, in Landlord’s discretion, be
added to or combined with Landlord’s master policy carried under paragraph (c) above. Tenant shall
cooperate with Landlord in the preparation of a mutually approved initial list or schedule
identifying in reasonable detail the Tenant Improvements to be insured (for earthquake or seismic
purposes only) by Landlord pursuant to clause (ii) above, and Tenant shall thereafter provide to
Landlord from time to time, upon request by Landlord annually or at other reasonable intervals, (x)
an updated schedule of values for the existing tenant improvements described in clause (i) above
and (y) an updated

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schedule of values for the Tenant Improvements to be insured by Landlord (for earthquake or seismic
purposes only) pursuant to clause (ii) above (the intended purpose of such updating being in each
instance to reflect any modification or removal of any such items that would have the effect of
eliminating them from the scope of Landlord’s insurance obligation under clause (i) or (ii) above,
as applicable, and to identify current full replacement cost values for such items), and Landlord
shall have no obligation or liability to Tenant with respect to any underinsurance of existing
tenant improvements or of Tenant Improvements (for earthquake or seismic purposes only), as
applicable, that results from Tenant’s failure to keep Landlord informed from time to time, on a
current basis, of the insurable value of such items (on a full replacement cost basis) pursuant to
this paragraph. In addition, Tenant shall provide Landlord with final construction cost figures for
the Tenant Improvements (or for each phase thereof, if constructed in phases), for Landlord’s use in
determining appropriate insurance coverage for the Tenant Improvements to be insured by Landlord
under clause (ii) above. Landlord, in its discretion, may elect from time to time to obtain
appraisals, at Landlord’s sole cost and expense, of any or all alterations, additions, improvements
and tenant improvements (if any) which Landlord is required to insure hereunder, but no such
ordering or receipt of appraisals by Landlord shall constitute a waiver or release of Tenant’s
obligations under the immediately preceding sentence.

          (e) Tenant shall procure and maintain in full force and effect at all times during the term of
this Lease, from and after the Early Access Date, at Tenant’s cost and expense, policies of
property insurance providing protection against “all risk of direct physical loss” (as defined by
and detailed in the Insurance Service Office’s Commercial Property Program “Cause of Loss-Special
Form [CP1030]” or its equivalent) for Tenant’s movable personal property, office furniture, movable
equipment and trade fixtures, for the Tenant Improvements constructed by Tenant pursuant to the
Workletter (except, in the case of earthquake or seismic insurance only, to the extent such
insurance responsibility is allocated to Landlord pursuant to paragraph (d) above), and for all
other alterations, additions and improvements placed or installed by Tenant from time to time in or
about the Premises (collectively, “Tenant’s
Property,” which term is not intended to imply
any conclusion regarding ultimate ownership of alterations, additions and improvements that are
otherwise covered by Article 7 above, but is used solely as a defined term for purposes of the
specific contexts in which it is used as such in this Lease), on a full replacement cost basis
(with no co-insurance or, if coverage without co-insurance is not reasonably available, then on an
“agreed amount” basis or with a commercially reasonable margin clause). Such insurance may have
such commercially reasonable deductibles and other terms as Tenant in its discretion determines to
be appropriate, and shall name both Tenant and Landlord as insureds as their interests may appear.

          (f) During
the construction of the Tenant Improvements, Tenant shall also procure and maintain
in full force and effect, at its sole cost and expense, a policy of builder’s risk insurance on the
Tenant Improvements, in such amounts and with such commercially reasonable deductibles as Landlord
and Tenant may mutually and reasonably determine to be appropriate with respect to such insurance.
Without limiting the generality of the foregoing provisions, Tenant’s builder’s risk insurance with
respect to the Tenant Improvements shall in all events include earthquake insurance in an amount at
least equal to the cumulative amount of the Tenant Improvement Allowance paid by Landlord from time
to time in connection with the

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construction of such Tenant Improvements. Upon written request by Tenant, Landlord will cooperate
with Tenant in using commercially reasonable efforts to cause the builder’s risk earthquake
coverage required under the preceding sentence to be provided under Landlord’s applicable insurance
policy or policies, at Tenant’s sole expense (payable by Tenant to Landlord within ten (10) days
after demand therefor by Landlord, accompanied by invoices or calculations reasonably evidencing
the amount of the allocable earthquake insurance premium for which payment or reimbursement is
being requested), in a manner similar to Landlord’s provision of earthquake insurance on certain
completed Tenant Improvements pursuant to paragraph (d) above, but to the extent it is not feasible
for such coverage to be provided under Landlord’s applicable insurance policy or policies, Tenant
shall remain responsible for the provision of such coverage as required under this paragraph.

     10.2 Quality of Policies and Certificates. All policies of insurance required
hereunder shall be issued by responsible insurers and, in the case of policies carried or required
to be carried by Tenant, shall be written as primary policies not contributing with and not in
excess of any coverage that Landlord may carry. Tenant shall deliver to Landlord copies of policies
or certificates of insurance showing that said policies are in effect. The coverage provided by such
policies shall include the clause or endorsement referred to in Section 10.4. If Tenant fails to
acquire, maintain or renew any insurance required to be maintained by it under this Article 10 or
to pay the premium therefor, then Landlord, at its option and in addition to its other remedies,
but without obligation so to do, may procure such insurance, and any sums expended by it to procure
any such insurance on behalf of or in place of Tenant shall be repaid upon demand, with interest as
provided in Section 3.2 hereof. Tenant shall give Landlord at least thirty (30) days prior written
notice of any cancellation or nonrenewal of insurance required to be maintained under this Article
10, and shall obtain written undertakings from each insurer under policies required to be
maintained by it to endeavor to notify all insureds thereunder at least thirty (30) days prior to
cancellation of coverage.

     10.3 Workers’ Compensation; Employees. Tenant shall maintain in full force and effect
during the term of this Lease workers’ compensation insurance in at least the minimum amounts
required by law, covering all of Tenant’s employees working at or about the Premises. In addition,
Tenant shall maintain in full force and effect during the term of this Lease employer’s liability
coverage with limits of liability of not less than One Hundred Thousand Dollars ($100,000) per
accident, One Hundred Thousand Dollars ($100,000) per employee for disease, and Five Hundred
Thousand Dollars ($500,000) policy limit for disease.

     10.4 Waiver of Subrogation. Notwithstanding anything to the contrary contained in this
Lease, to the extent permitted by law and without affecting the coverage provided by insurance
required to be maintained hereunder, Landlord and Tenant each waive any right to recover against
the other with respect to (i) damage to property, (ii) damage to the Center or any part thereof, or
(iii) claims arising by reason of any of the foregoing, but only to the extent that any of the
foregoing damages and claims under clauses (i)-(iii) hereof are covered, and only to the extent of
such coverage, by property insurance actually carried or required to be carried hereunder by either
Landlord or Tenant. This provision is intended to waive fully, and for the benefit of each party,
any rights and claims which might give rise to a right of subrogation in any insurance carrier.
Each party shall procure a clause or endorsement on any property insurance

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policy denying to the insurer rights of subrogation against the other party to the extent rights
have been waived by the insured prior to the occurrence of injury or loss. Coverage provided by
insurance maintained by Landlord or Tenant shall not be limited, reduced or diminished by virtue
of the subrogation waiver herein contained.

     10.5 Increase in Premiums. Tenant shall do all acts and pay all expenses necessary to
ensure that the Premises are not used for purposes prohibited by any applicable fire insurance,
and that Tenant’s use of the Premises, Building and Center complies with all requirements
necessary to obtain any such insurance. If Tenant uses or permits the Premises, Building or Center
to be used in a manner which increases the existing rate of any insurance carried by Landlord on
the Center and such use continues for longer than a reasonable period specified in any written
notice from Landlord to Tenant identifying the rate increase and the factors causing the same,
then Tenant shall pay the amount of the increase in premium caused thereby, and Landlord’s costs
of obtaining other replacement insurance policies, including any increase in premium, within
thirty (30) days after demand therefor by Landlord.

     10.6 Indemnification.

          (a) Except
as otherwise expressly provided for in this Lease, Tenant shall indemnify, defend
and hold Landlord and its members, partners, shareholders, officers, directors, agents, employees
and contractors harmless from any and all liability for injury to or death of any person, or loss
of or damage to the property of any person, and all actions, claims, demands, costs (including,
without limitation, reasonable attorneys’ fees), damages or expenses of any kind arising therefrom
which may be brought or made against Landlord or which Landlord may pay or incur by reason of the
use, occupancy and enjoyment of the Center by Tenant or any invitees, sublessees, licensees,
assignees, employees, agents or contractors of Tenant or holding under Tenant (including, but not
limited to, any such matters arising out of or in connection with any early entry upon the Center
by Tenant pursuant to Section 2.2 hereof) from any cause whatsoever other than negligence or
willful misconduct or omission by Landlord or its agents, employees or contractors. Except as
otherwise expressly provided for in this Lease, Landlord and its members, partners, shareholders,
officers, directors, agents, employees and contractors shall not be liable for, and Tenant hereby
waives all claims against such persons for, damages to goods, wares and merchandise in or upon the
Center, or for injuries to Tenant, its agents or third persons in or upon the Center, from any
cause whatsoever other than negligence or willful misconduct or omission by Landlord or its
agents, employees or contractors. Tenant shall give prompt notice to Landlord of any casualty or
accident in, on or about the Center.

          (b) Except as otherwise expressly provided for in this Lease, Landlord shall indemnify,
defend and hold Tenant and its partners, shareholders, officers, directors, agents, employees and
contractors harmless from any and all liability for injury to or death of any person, or loss of
or damage to the property of any person, and all actions, claims, demands, costs (including,
without limitation, reasonable attorneys’ fees), damages or expenses of any kind arising therefrom
which may be brought or made against Tenant or which Tenant may pay or incur, to the extent such
liabilities or other matters arise in, on or about the Center by reason of any negligence or
willful misconduct or omission by Landlord or its agents (including,

- 31 -

 

without limitation, Landlord’s Project Manager as defined in the Workletter), employees or
contractors.

     10.7 Blanket Policy. Any policy required to be maintained hereunder may be
maintained under a so-called “blanket policy” insuring other parties and other locations so long
as the amount of insurance required to be provided hereunder is not thereby diminished. Without
limiting the generality of the requirement set forth at the end of the preceding sentence,
property insurance provided under a blanket policy shall provide full replacement cost coverage
and liability insurance provided under a blanket policy shall include per location aggregate
limits meeting or exceeding the limits required under this Article 10.

11. SUBLEASE AND ASSIGNMENT

     11.1 Assignment and Sublease of Building. Except in the case of a Permitted
Transfer,
Tenant shall not have the right or power to assign its interest in this Lease, or make any
sublease of the Premises or any portion thereof, nor shall any interest of Tenant under this
Lease be assignable involuntarily or by operation of law, without on each occasion obtaining the
prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned
or delayed. Any purported sublease or assignment of Tenant’s interest in this Lease requiring but
not having received Landlord’s consent thereto (to the extent such consent is required hereunder)
shall be void. Without limiting the generality of the foregoing provisions. Landlord may withhold
consent to any proposed subletting or assignment solely on the ground, if applicable, that the
use by the proposed subtenant or assignee is reasonably likely to be incompatible with Landlord’s
use of the balance of the Center, unless such proposed use is within the primary permitted uses
described in Section 9.1 above. Except in the case of a Permitted Transfer, any dissolution,
consolidation, merger or other reorganization of Tenant, or any sale or transfer of substantially
all of the stock or assets of Tenant in a single transaction or series of related transactions,
shall be deemed to be an assignment hereunder and shall be void without the prior written consent
of Landlord as required above. Notwithstanding the foregoing, (i) neither an initial public
offering of the common stock of Tenant nor any other sale of Tenant’s capital stock through any
public securities exchange or market nor any other issuance of Tenant’s capital stock for bona
fide financing purposes shall be deemed to be an assignment, subletting or transfer hereunder;
and (ii) Tenant shall have the right to assign this Lease or sublet the Premises, or any portion
thereof, without Landlord’s consent (but with prior or concurrent written notice by Tenant to
Landlord), to any Affiliate of Tenant, or to any entity which results from a merger or
consolidation involving Tenant, or to any entity which acquires substantially all of the stock or
assets of Tenant as a going concern (each, a
“Permitted Transfer”). For purposes of the
preceding sentence, an “Affiliate” of Tenant shall mean any entity in which Tenant owns
at least a fifty percent (50%) equity interest, any entity which owns at least a fifty percent
(50%) equity interest in Tenant, and/or any entity which is related to Tenant by a chain of
ownership interests involving at least a fifty percent (50%) equity interest at each level in the
chain. Landlord shall have no right to terminate this Lease in connection with, and shall have no
right to any sums or other economic consideration resulting from, any Permitted Transfer. Except
as expressly set forth in this Section 11.1, however, the provisions of Section 11.2 shall remain
applicable to any Permitted Transfer and the transferee under such Permitted Transfer shall be
and remain subject to all of the terms and provisions of this Lease.

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     11.2 Rights of Landlord.

          (a) Consent by Landlord to one or more assignments of this Lease, or to one or more
sublettings of the Premises or any portion thereof, or collection of rent by Landlord from any
assignee or sublessee, shall not operate to exhaust Landlord’s rights under this Article 11, nor
constitute consent to any subsequent assignment or subletting. No assignment of Tenant’s interest
in this Lease and no sublease shall relieve Tenant of its obligations hereunder, notwithstanding
any waiver or extension of time granted by Landlord to any assignee or sublessee, or the failure of
Landlord to assert its rights against any assignee or sublessee, and regardless of whether
Landlord’s consent thereto is given or required to be given hereunder. In the event of a default by
any assignee, sublessee or other successor of Tenant in the performance of any of the terms or
obligations of Tenant under this Lease, Landlord may proceed directly against Tenant without the
necessity of exhausting remedies against any such assignee, sublessee or other successor. In
addition, Tenant immediately and irrevocably assigns to Landlord, as security for Tenant’s
obligations under this Lease, all rent from any subletting of all or a part of the Premises as
permitted under this Lease, and Landlord, as Tenant’s assignee and as attorney-in-fact for Tenant,
or any receiver for Tenant appointed on Landlord’s application, may collect such rent and apply it
toward Tenant’s obligations under this Lease; except that until the occurrence (and then only
during the continuance) of an event of default by Tenant, Tenant shall have the right to collect
such rent and to retain all sublease profits (subject to the provisions of Section 11.2(c), below).

          (b) Upon any assignment of Tenant’s interest in this Lease for which Landlord’s consent is
required under Section 11.1 hereof, Tenant shall pay to Landlord, within ten (10) days after
receipt thereof by Tenant from time to time, one-half(1/2) of all cash sums
and other economic considerations received by Tenant in connection with or as a result of such
assignment, after first deducting therefrom (i) any costs incurred by Tenant for leasehold
improvements (including, but not limited to, third-party architectural and space planning costs) in
the Premises in connection with such assignment, amortized over the remaining term of this Lease,
and (ii) any reasonable real estate commissions and/or reasonable attorneys’ fees actually incurred
by Tenant in connection with such assignment.

          (c) Upon any sublease of all or any portion of the Premises for which Landlord’s consent is
required under Section 11.1 hereof, Tenant shall pay to Landlord, within ten (10) days after
receipt thereof by Tenant from time to time, one-half (1/2) of all cash sums
and other economic considerations received by Tenant in connection with or as a result of such
sublease, after first deducting therefrom (i) the minimum rental due hereunder for the
corresponding period, prorated (on the basis of the average per-square-foot cost paid by Tenant for
the Premises for the applicable period under this Lease) to reflect the size of the subleased
portion of the Premises, (ii) any costs incurred by Tenant for leasehold improvements in the
subleased portion of the Premises (including, but not limited to, third-party architectural and
space planning costs) for the specific benefit of the sublessee in connection with such sublease,
amortized over the remaining term of this Lease, and (iii) any reasonable real estate commissions
and/or reasonable attorneys’ fees actually incurred by Tenant in connection with such sublease,
amortized over the term of such sublease.

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12. RIGHT OF ENTRY AND QUIET ENJOYMENT

     12.1 Right of Entry. Landlord and its authorized representatives shall have the right,
subject to Tenant’s reasonable operating and security procedures, to enter the Premises at any time
during the term of this Lease during normal business hours and upon not less than twenty-four (24)
hours prior notice, except in the case of emergency (in which event no notice shall be required and
entry may be made at any time), for the purpose of inspecting and determining the condition of the
Premises and Building or for any other proper purpose including, without limitation, to make
repairs, replacements or improvements which Landlord may deem necessary, to show the Premises and
Building to prospective purchasers, to show the Premises and Building to prospective tenants (but
only during the final year of the term of this Lease), and to post notices of nonresponsibility,
Landlord shall not be liable for inconvenience, annoyance, disturbance, loss of business, quiet
enjoyment or other damage or loss to Tenant by reason of making any repairs or performing any work
upon the Building or the Center or by reason of erecting or maintaining any protective barricades
in connection with any such work, and the obligations of Tenant under this Lease shall not thereby
be affected in any manner whatsoever, provided, however, Landlord shall use reasonable efforts to
minimize the inconvenience to Tenant’s normal business operations caused thereby.

     12.2 Quiet Enjoyment. Landlord covenants that Tenant, upon paying the rent and
performing its obligations hereunder and subject to all the terms and conditions of this Lease,
shall peacefully and quietly have, hold and enjoy the Premises and the Center throughout the term
of this Lease, or until this Lease is terminated as provided by this Lease.

13. CASUALTY AND TAKING

     13.1 Damage or Destruction.

          (a) If the Premises or any portion of the Building or Common Areas of the Center
reasonably necessary for Tenant’s use and occupancy of the Premises is damaged or destroyed in
whole or in any substantial part during the term of this Lease, Landlord shall obtain from
Landlord’s architect, as soon as practicable (and in all events within forty-five (45) days)
following the damage or destruction, (i) the architect’s reasonable, good faith estimate of the
time within which repair and restoration of the Premises and Common Areas (if applicable) can
reasonably be expected to be completed to the extent necessary to enable Tenant to resume its full
business operations in the Premises without material impairment and (ii) the architect’s
reasonable, good faith opinion as to whether repair and restoration to that extent will be
permitted under applicable governmental laws, regulations and building codes then in effect
(collectively, the “Architect’s Estimate”). If the damage or destruction materially impairs
Tenant’s ability to conduct its business operations in the Premises, and if either (A) the
estimated repair time specified in the Architect’s Estimate exceeds nine (9) months (or, in the
case of an occurrence during the final year of the term of this Lease, sixty (60) days) or (B) the
Architect’s Estimate states that repair and restoration of the affected areas to the extent
necessary to enable Tenant to resume its full business operations in the Premises without material
impairment will not be permitted under applicable governmental laws, regulations and building codes
then in effect, then in either such event either Landlord or Tenant may terminate this Lease as of
the date

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of the occurrence by giving written notice to the other party within thirty (30) days after the
date of the occurrence or fifteen (15) days after delivery of the Architect’s Estimate, whichever
is later. If the circumstances creating a termination right under the preceding sentence do not
exist, or if such circumstances exist but neither party timely exercises its termination right,
then this Lease shall remain in full force and effect and (x) Landlord, as to the Common Areas of
fee Center and as to the shell of the Building and the alterations, additions and improvements
that Landlord is required to insure under Section 10.1(d) above, and (y) Tenant, as to the
alterations, additions and improvements that Tenant is required to insure under Section 10.1(e)
above, shall respectively commence and complete, with all due diligence and as promptly as is
reasonably practicable under the conditions then existing, the repair and restoration of such
respective portions of the Property and Premises to a condition substantially comparable to that
which existed immediately prior to the damage or destruction; provided, however, that
Tenant in its discretion may elect not to repair, rebuild or replace any or all of the items which
would otherwise be Tenant’s responsibility under clause (y) of this sentence to the extent such
items were constructed or installed at Tenant’s sole expense and without any use of funds from the
Tenant Improvement Allowance.

          (b) If this Lease is terminated pursuant to the foregoing provisions of this Section 13.1
following an occurrence which is a peril actually insured or required to be insured against
pursuant to Section 10.1(c), (d) and/or (e), Landlord and Tenant agree (and any Lender shall be
asked to agree) that such insurance proceeds shall be allocated between Landlord and Tenant in a
manner which fairly and reasonably reflects (i) their respective ownership rights under this
Lease, as of the termination or expiration of the term of this Lease, with respect to the
improvements, fixtures, equipment and other items to which such insurance proceeds are
attributable and (ii) in the case of insurance proceeds allocable to improvements, equipment and
other items which Tenant can demonstrate were installed or constructed by Tenant solely with its
own fends and without any use of the Tenant Improvement Allowance or of any other Landlord funds,
the unamortized portion of the original cost of acquisition or construction of such items,
assuming amortization on a straight-line basis over the initial term of this Lease (without regard
to any renewal options).

          (c) From and after the date of an occurrence resulting in damage to or destruction of the
Premises or of Common Areas necessary for Tenant’s use and occupancy of the Premises, and
continuing until repair and restoration thereof are completed to the extent necessary to enable
Tenant to resume operation of its business in the Premises without material impairment, there
shall be an equitable abatement of minimum rental and of Tenant’s Operating Cost Share of
Operating Expenses based upon the degree to which Tenant’s ability to conduct its business in the
Premises is impaired.

          (d) Each
party expressly waives the provisions of California. Civil Code Sections 1932(2),
1933(4) and any other applicable existing or future law permitting the termination of a lease
agreement in the event of damage to or destruction of the leased property, it being the intention
of the parties that their respective rights in such circumstances shall be governed solely by the
provisions of this Article 13.

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     13.2 Condemnation.

          (a) If during the term of this Lease the Premises or any Common Areas of the Center that
axe necessary for Tenant’s use and occupancy of the Premises, or any substantial part of either of
them, is taken by eminent domain or by reason of any public improvement ot condemnation
proceeding, or in any manner by exercise of the right of eminent domain (including any transfer in
lieu of or in avoidance of an exercise of the power of eminent
domain), or receives irreparable
damage by reason of anything lawfully done by or under color of any public authority, then (i) this
Lease shall terminate as to the entire Premises at Landlord’s election by written notice given to
Tenant within thirty (30) days after the taking has occurred, and (ii) this Lease shall terminate
as to the entire Premises at Tenant’s election, by written notice given to Landlord within thirty
(30) days after the nature and extent of the taking have been finally determined, if the portion of
the Building or Center taken is of such extent and nature as substantially to handicap, impede or
permanently impair Tenant’s use of the Premises. If Tenant elects to terminate this Lease, Tenant
shall also notify Landlord of the date of termination, which date shall not be earlier than thirty
(30) days nor later than ninety (90) days after Tenant has notified Landlord of Tenant’s election
to terminate, except that this Lease shall terminate on the date of
taking if such date falls on
any date before the date of termination designated by Tenant. If neither party elects to terminate
this Lease as hereinabove provided, this Lease shall continue in full force and effect (except
that there shall be an equitable abatement of minimum rental and of Tenant’s Operating Cost Share
of Operating Expenses based upon the degree to which Tenant’s ability to conduct its business in
the Premises is impaired), Landlord shall restore the improvements for which Landlord is
responsible under clause (x) of Section 13.1(a) above to a complete architectural whole and a
functional condition and as nearly as reasonably possible to the condition existing before the
taking, and Tenant shall restore the improvements for which Tenant is responsible under clause (y)
of Section 13.1(a) above to a complete architectural whole and a functional condition and as nearly
as reasonably possible to the condition existing before the taking;
provided, however, that Tenant
in its discretion may elect not to repair, restore or replace any or all of the items which would
otherwise be Tenant’s responsibility to the extent such items were constructed or installed at
Tenant’s sole expense and without any use of funds from the Tenant Improvement Allowance. In
connection with any such restoration, each party shall use reasonable efforts (including, without
limitation, any necessary negotiation or intercession with its respective lender, if any) to ensure
that any severance damages or other condemnation awards intended to provide compensation for
rebuilding or restoration costs are promptly collected and made available to Landlord and Tenant in
portions reasonably corresponding to the cost and scope of their respective restoration
obligations, subject only to such payment controls as either party or its lender may reasonably
require in order to ensure the proper application of such proceeds toward the restoration of the
Building and the Center. Each party expressly waives the provisions of California Code of Civil
Procedure Section 1265.130 and of any other existing or future law allowing either party to
terminate (or to petition the Superior Court to terminate) a lease in the event of a partial
condemnation or taking of the leased property, it being the intention of the parties that their
respective rights in such circumstances shall be governed solely by the provisions of this Article
13.

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          (b) If this Lease is terminated pursuant to the foregoing provisions of this Section
13.2, or if this Lease remains in effect but any condemnation awards or other proceeds become
available as compensation for the loss or destruction of the Building and/or the Center, then
Landlord and Tenant agree (and any Lender shall be asked to agree) that such proceeds shall be
allocated between Landlord and Tenant, respectively, in the respective proportions in which
Landlord and Tenant would have shared, under Section 13.1 (b), the proceeds of any applicable
insurance following damage to or destruction of the applicable improvements due to an insured
casualty.

     13.3 Reservation of Compensation. Landlord reserves, and Tenant waives and assigns to
Landlord, all rights to any award or compensation for damage to the Center, the improvements
located therein and the leasehold estate created hereby, accruing by reason of any taking in any
public improvement, condemnation or eminent domain proceeding or in any other maimer by exercise of
the right of eminent domain or of anything lawfully done by public authority, except that (a)
Tenant shall be entitled to pursue recovery from the applicable public authority for Tenant’s
moving expenses, trade fixtures and equipment and any leasehold improvements installed by Tenant in
the Premises or Building at its own sole expense, but only to the extent Tenant would have been
entitled to remove such items at the expiration of the term of this Lease and then only to the
extent of the then remaining unamortized value of such improvements computed on a straight-line
basis over the term of this Lease, and (b) any condemnation awards or proceeds described in Section
13.2(b) shall be allocated and disbursed in accordance with the provisions of Section 13.2(b),
notwithstanding any contrary provisions of this Section 13.3.

     13.4 Restoration of Improvements. In connection with any repair or restoration of
improvements by either party following a casualty or taking as hereinabove set forth, the party
responsible for such repair or restoration shall, to the extent possible, return such improvements
to a condition substantially equal to that which existed immediately prior to the casualty or
taking. To the extent such party wishes to make material modifications to such improvements, such
modifications shall be subject to the prior written approval of the other party (not to be
unreasonably withheld or delayed), except that no such approval shall be required for modifications
that axe required by applicable governmental authorities as a condition of the repair or
restoration, unless such required modifications would impair or impede Tenant’s conduct of its
business in the Premises (in which case any such modifications in Landlord’s work shall require
Tenant’s consent, not unreasonably withheld or delayed) or would materially and adversely affect
the exterior appearance, the structural integrity or the mechanical or other operating systems of
the Premises or Building (in which case any such modifications in Tenant’s work shall require
Landlord’s consent, not unreasonably withheld or delayed).

14. DEFAULT

     14.1 Events of Default. The occurrence of any of the following shall constitute an
event of default on the part of Tenant:

          (a) Abandonment. Abandonment of the Premises. “Abandonment” is hereby
defined to include, but is not limited to, any absence by Tenant from the Premises for fifteen (15)
consecutive days or more while Tenant is in default under any other provision of this

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Lease. Tenant waives any right Tenant may have to notice under Section 1951.3 of the
California Civil Code, the terms of this subsection (a) being deemed such notice to Tenant as
required by said Section 1951.3;

          (b) Nonpayment. Failure to pay, when due, any amount payable to Landlord hereunder,
such failure continuing for a period of five (5) business days after written notice of such
failure; provided, however, that any such notice shall be in lieu of, and not in addition
to, any notice required under California Code of Civil Procedure Section 1161 et seq., as
amended from time to time;

          (c) Other Obligations. Failure to perform any obligation, agreement or covenant under
this Lease other than those matters specified in subsection (b) hereof (including, but not limited
to, any breach by Tenant of the Master Declaration or Association Documents as provided in Section
15.4 below), such failure continuing for thirty (30) days after written notice of such failure;
provided, however, that if such failure is curable in nature but cannot reasonably be cured
within such 30-day period, then Tenant shall not be in default if, and so long as, Tenant promptly
(and in all events within such 30-day period) commences such cure and thereafter diligently pursues
such cure to completion; and provided further, however, that any such notice shall be in lieu of,
and not in addition to, any notice required under California Code of Civil Procedure Section 1161
et seq., as amended from time to time;

          (d)
General Assignment. A general assignment by Tenant, for the benefit of
creditors;

          (e)
Bankruptcy. The filing of any voluntary petition in bankruptcy
by Tenant, or the
filing of an involuntary petition by Tenant’s creditors, which involuntary petition remains
undischarged for a period of sixty (60) days. In the event that under applicable law the trustee in
bankruptcy or Tenant has the right to affirm this Lease and continue to perform the obligations of
Tenant hereunder, such trustee or Tenant shall, in such time period as may be permitted by the
bankruptcy court having jurisdiction, cure all defaults of Tenant hereunder outstanding as of the
date of the affirmance of this Lease and provide to Landlord such adequate assurances as may be
necessary to ensure Landlord of the continued performance of
Tenant’s obligations under this Lease.
Specifically, but without limiting the generality of the foregoing, such adequate assurances must
include assurances that the Premises continue to be operated only for the use permitted hereunder.
The provisions hereof are to assure that the basic understandings between Landlord and Tenant with
respect to Tenant’s use of the Center and the benefits to Landlord therefrom are preserved,
consistent with the purpose and intent of applicable bankruptcy laws;

          (f)
Receivership. The employment of a receiver appointed by court order to take
possession of substantially all of Tenant’s assets or the Premises, if such receivership remains
undissolved for a period of thirty (30) days;

          (g) Attachment. The attachment, execution or other judicial seizure of all or
substantially all of Tenant’s assets or the Premises, if such attachment or other seizure remains
undismissed or undischarged for a period of thirty (30) days after the levy thereof; or

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          (h) Insolvency. The admission by Tenant in writing of its inability to pay its debts as
they become due, the filing by Tenant of a petition seeking any reorganization or arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any present or future
statute, law or regulation, the filing by Tenant of an answer admitting or failing timely to
contest a material allegation of a petition filed against Tenant in any such proceeding or, if
within thirty (30) days after the commencement of any proceeding against Tenant seeking any
reorganization or arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future statute, law or regulation, such proceeding shall not have been
dismissed.

     14.2 Remedies upon Tenant’s Default.

          (a) Upon the occurrence of any event of default described in Section 14.1 hereof, Landlord, in
addition to and without prejudice to any other rights or remedies it may have, shall have the
immediate right (subject to compliance with applicable laws) to re-enter the Premises or any part
thereof and repossess the same, expelling and removing therefrom all persons and property (which
property maybe stored in a public warehouse or elsewhere at the cost and risk of and for the
account of Tenant), using such force as may be necessary to do so (as to which Tenant hereby waives
any claim for loss or damage that may thereby occur). In addition to such re-entry, and without
prejudice to any other rights or remedies it may have, Landlord shall have the right to terminate
this Lease and recover from Tenant all damages incurred by Landlord as a result of Tenant’s
default, as hereinafter provided. Alternatively, in lieu of such re-entry, and without prejudice to
any other rights or remedies it may have, Landlord shall have the right to continue this Lease in
effect and recover rent and other charges and amounts as they become due.

          (b) Even if Tenant has breached this Lease and abandoned the Premises, this Lease shall
continue in effect for so long as Landlord does not terminate Tenant’s right to possession under
subsection (a) hereof and Landlord may enforce all of its rights and remedies under this Lease,
including the right to recover rent as it becomes due, and Landlord, without terminating this
Lease, may exercise all of the rights and remedies of a lessor under California Civil Code Section
1951.4 (lessor may continue lease in effect after lessee’s breach and abandonment and recover rent
as it becomes due, if lessee has right to sublet or assign, subject only to reasonable
limitations), or any successor Code section. Acts of maintenance, preservation or efforts to relet
the Premises or the appointment of a receiver upon application of Landlord to protect Landlord’s
interests under this Lease shall not constitute a termination of Tenant’s right to possession.

          (c) If Landlord terminates this Lease pursuant to this Section 14.2, Landlord shall have all
of the rights and remedies of a landlord provided by Section 1951.2 of the Civil Code of the State
of California, or any successor Code section, which remedies include Landlord’s right to recover
from Tenant (i) the worth at the time of award of the unpaid rent and additional rent which had
been earned at the time of termination, (ii) the worth at the time of award of the amount by which
the unpaid rent and additional rent which would have been earned after termination until the time
of award exceeds the amount of such rental loss that Tenant proves could have been reasonably
avoided, (iii) the worth at the time of award of the amount by

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which the unpaid rent and additional rent fox the balance of the term after the time of award
exceeds the amount of such rental loss that Tenant proves could be reasonably avoided, and (iv) any
other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant’s
failure to perform its obligations under this Lease or which in the ordinary course of things would
be likely to result therefrom, including, but not limited to, the cost of recovering possession of
the Premises, expenses of reletting, including necessary repair, renovation and alteration of the
Premises, reasonable attorneys’ fees, and other reasonable
costs. The “worth at the time of
award” of the amounts referred to in clauses (i) and (ii) above shall be computed by allowing
interest at ten percent (10%) per annum from the date such amounts accrued to Landlord. The
“worth at the time of award” of the amounts referred to in clause (iii) above shall be
computed by discounting such amount at one percentage point above the discount rate of the Federal
Reserve Bank of San Francisco at the time of award.

     14.3 Remedies Cumulative. All rights, privileges and elections or remedies of
Landlord contained in this Article 14 are cumulative and not alternative to the extent permitted by
law and except as otherwise provided herein.

15.
SUBORDINATION, ATTORNMENT AND SALE

     15.1 Subordination to Mortgage. This Lease, and any sublease entered into by
Tenant under the provisions of this Lease, shall be subject and
subordinate to any ground lease,
mortgage, deed of trust, sale/leaseback transaction or any other hypothecation for security now or
hereafter placed upon the Premises, the Building, the Center, or any of them, and the rights of any
assignee of Landlord or of any ground lessor, mortgagee, trustee, beneficiary or leaseback lessor
under any of the foregoing, and to any and all advances made on the security thereof and to all
renewals, modifications, consolidations, replacements and extensions thereof; provided,
however, that such subordination in the case of any future ground lease, mortgage, deed of trust,
sale/leaseback transaction or any other hypothecation for security placed upon the Premises, the
Building, the Center, or any of them shall be conditioned on Tenant’s receipt from the ground
lessor, mortgagee, trustee, beneficiary or leaseback lessor of a Non-Disturbance Agreement in a
form reasonably acceptable to Tenant (i) confirming that so long as Tenant is not in material
default hereunder beyond any applicable cure period (for which purpose the occurrence and
continuance of any event of default under Section 14.1 hereof shall be deemed to be “material”),
Tenant’s rights hereunder shall not be disturbed by such person or entity and (ii) agreeing that
the benefit of such Non-Disturbance Agreement shall be transferable to any transferee under a
Permitted Transfer and to any other assignee or subtenant that is acceptable to the ground lessor,
mortgagee, trustee, beneficiary or leaseback lessor at the time of transfer. If any mortgagee,
trustee, beneficiary, ground lessor, sale/leaseback lessor or assignee elects to have this Lease be
an encumbrance upon the Center prior to the lien of its mortgage, deed of trust, ground lease or
leaseback lease or other security arrangement and gives notice thereof to Tenant, this Lease shall
be deemed prior thereto, whether this Lease is dated prior or subsequent to the date thereof or the
date of recording thereof. Tenant and any sublessee, shall execute such documents as may reasonably
be requested by any mortgagee, trustee, beneficiary, ground lessor, sale/leaseback lessor or
assignee to evidence the subordination herein set forth, subject to the conditions set forth above,
or to make this Lease prior to the lien of any mortgage, deed of trust, ground lease, leaseback
lease or other security, arrangement as the case maybe. Upon any default by Landlord

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in the performance of its obligations under any mortgage, deed of trust, ground lease, leaseback
lease or assignment, Tenant (and any sublessee) shall, notwithstanding any subordination
hereunder, attorn to the mortgagee, trustee, beneficiary, ground lessor, leaseback lessor or
assignee thereunder upon demand and become the tenant of the successor in interest to Landlord, at
the option of such successor in interest, and shall execute and deliver any instrument or
instruments confirming the attornment herein provided for. Landlord represents and warrants to
Tenant that as of the Lease Commencement Date, there is no ground lessor, mortgagee, trustee,
beneficiary or leaseback lessor holding any title to or interest in the Property or any portion
thereof.

     15.2 Sale of Landlord’s Interest. Upon sale, transfer or assignment of
Landlord’s entire interest in the Building and the Center, Landlord shall be relieved of its
obligations hereunder with respect to liabilities accruing from and after the date of such
sale, transfer or assignment.

     15.3 Estoppel Certificates. Tenant or Landlord (the “responding party”), as
applicable, shall at any time and from time to time, within ten (10) business days after written
request by the other party (the “requesting party”), execute, acknowledge and deliver to
the requesting party a certificate in writing staring: (i) that this Lease is unmodified and in
full force and effect, or if there have been any modifications, that this Lease is in full force
and effect as modified and stating the date and the nature of each modification; (ii) the date to
which rental and all other sums payable hereunder have been paid; (iii) that the requesting party
is not in default in the performance of any of its obligations under this Lease, that the
certifying party has given no notice of default to the requesting party and that no event has
occurred which, but for the expiration of the applicable time period, would constitute an event of
default hereunder, or if the responding party alleges that any such default, notice or event has
occurred, specifying the same in reasonable detail; and (iv) such other matters as may reasonably
be requested by the requesting party or by any institutional lender, mortgagee, trustee,
beneficiary, ground lessor, sale/leaseback lessor or prospective purchaser of the Center, or
prospective sublessee or assignee of this Lease. Any such certificate provided under this Section
15.3 may be relied upon by any lender, mortgagee, trustee, beneficiary, assignee or successor in
interest to the requesting party, by any prospective purchaser, by any purchaser on foreclosure or
sale, by any grantee under a deed in lieu of foreclosure of any mortgage or deed of trust on the
Property, by any subtenant or assignee, or by any other third party. Failure to execute and return
within the required time any estoppel certificate requested hereunder, if such failure continues
for five (5) days after a second written request by the requesting party for such estoppel
certificate, shall be deemed to be an admission of the truth of the matters set forth in the form
of certificate submitted to the responding party for execution.

     15.4 Subordination to CC&R’s. This Lease, and any permitted sublease entered into by
Tenant under the provisions of this Lease, and the interests in real property conveyed hereby and
thereby shall be subject and subordinate (a) to any declarations of covenants, conditions and
restrictions or other recorded restrictions affecting the Center or any portion thereof from time
to time, provided that the terms of such declarations or restrictions are reasonable (or,
to the extent they are not reasonable, are mandated by applicable law), do not materially impair
Tenant’s ability to conduct the uses permitted hereunder on the Premises and in the Center, and do
not

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discriminate
against Tenant relative to other similarly situated tenants occupying the portion(s)
of the Center covered by such declarations or restrictions, and (b) to the Declaration of
Covenants, Conditions and Restrictions of Shoreline Technology Park, Mountain View, California,
dated October 24, 1986 and recorded on October 24, 1986 as
Instrument No. 8997310, Book J895, Page
456, Official Records of Santa Clara County, as the same may be amended from time to time (the
“Declaration”), the provisions of which Declaration are an integral part of this Lease.
Tenant agrees to execute, upon request by Landlord, any documents reasonably required from time to
time to evidence the foregoing subordination. Notwithstanding the foregoing, Tenant shall not be
bound by any modification to the Declaration subsequent to the Lease Commencement Date unless such
modification satisfies the requirements of clause (a) above.

     15.5 Mortgagee Protection. If, following a default by Landlord under any mortgage,
deed of trust, ground lease, leaseback lease or other security arrangement covering the Building,
the Center, or any portion of them, the Building and/or the Center, as applicable, is acquired by
the mortgagee, beneficiary, master lessor or other secured party, or by any other successor owner,
pursuant to a foreclosure, trustee’s sale, sheriff’s sale, lease termination or other similar
procedure (or deed in lieu thereof), then any such person or entity so acquiring the Building
and/or the Center shall not be:

          (a) liable for any act or omission of a prior landlord or owner of the Center
(including, but not limited to, Landlord);

          (b) subject to any offsets or defenses that Tenant may have against any prior
landlord or owner of the Center (including, but not limited to, Landlord);

          (c) bound by any rent or additional rent that Tenant may have paid in advance to any
prior landlord or owner of the Center (including, but not limited to, Landlord) for a period
in excess of one month, or by any security deposit, cleaning deposit or other prepaid charge
that Tenant may have paid in advance to any prior landlord or owner (including, but not
limited to, Landlord), except to the extent such deposit or prepaid amount has been
expressly turned over to or credited to the successor owner thus acquiring the Center;

          (d) liable for any warranties or representations of any nature whatsoever, whether
pursuant to this Lease or otherwise, by any prior landlord or owner of the Center
(including, but not limited to, Landlord) with respect to the use, construction, zoning,
compliance with laws, title, habitability, fitness for purpose or possession, or physical
condition (including, without limitation, environmental matters) of the Building or the
Center; or

          (e) liable to Tenant in any amount beyond the interest of such mortgagee,
beneficiary, master lessor or other secured party or successor owner in the Center as it
exists from time to time, it being the intent of this provision that Tenant shall look
solely to the interest of any such, mortgagee, beneficiary, master lessor or other
secured party or successor owner in the Center for the payment and discharge of the
landlord’s obligations under this Lease and that such mortgagee, beneficiary, master
lessor or other secured party or successor owner shall have no separate personal
liability for any such obligations.

- 42 -

 

16. SECURITY

     16.1 Deposit.

          (a) Cash Security Deposit.  Within ten (10) days after the Lease Commencement Date,
Tenant shall deposit with Landlord the sum of Four Hundred Thousand and No/100 Dollars
($400,000.00), which sum, subject to and including any adjustment thereto pursuant to Section
16.1(c) below (as so adjusted, if applicable, the “Security Deposit”) shall be held by
Landlord as security for the faithful performance of all of the terms, covenants and conditions
of this Lease to be kept and performed by Tenant during the term hereof. If Tenant defaults
(beyond any applicable cure period) with respect to any provision of this Lease, including,
without limitation, the provisions relating to the payment of rental and other sums due
hereunder, Landlord shall have the right, but shall not be required, to use, apply or retain such
portion of the Security Deposit as is sufficient for the payment of rental or any other amount
which Landlord may spend or become obligated to spend by reason of Tenant’s default or to
compensate Landlord for any other loss or damage which Landlord may suffer by reason of Tenant’s
default. If any portion of the Security Deposit is so used or applied, Tenant shall, within ten
(10) business days after written demand therefor, deposit cash with Landlord in an amount
sufficient to restore the Security Deposit to its original amount and Tenant’s failure to do so
shall be a material breach of this Lease. Landlord shall not be required to keep any deposit
under this Section separate from Landlord’s general funds, and Tenant shall not be entitled to
interest thereon. Provided that no uncured event of default by Tenant then exists under this
Lease, the Security Deposit and the Letter of Credit as defined below (if applicable), or any
balance thereof, shall be returned to Tenant or, at Landlord’s option, to the last assignee of
Tenant’s interest hereunder (unless alternative instructions have been presented to Landlord in a
writing signed by both Tenant and such assignee), at the expiration of the term of this Lease and
after Tenant has vacated the Property. In the event of termination of Landlord’s interest in this
Lease, Landlord shall transfer all deposits then held by Landlord under this Section to
Landlord’s successor in interest, whereupon Tenant agrees to release Landlord from all liability
for the return of such deposit or the accounting thereof.

          (b) Letter of Credit. As an alternative to the cash Security Deposit described in
Section 16.1(a), Tenant may instead deliver to Landlord, within ten (10) days after the Lease
Commencement Date, an irrevocable standby letter of credit (the “Letter of Credit”)
issued in favor of Landlord by a federally insured commercial bank or trust company approved in
writing by Landlord (which approval shall not be unreasonably withheld, and for which purpose
Landlord hereby agrees in advance that Silicon Valley Bank is an approved issuer for the Letter
of Credit), in form and substance reasonably satisfactory to Landlord, to be held by Landlord as
security for the faithful performance of all the obligations of Tenant under this Lease, subject
to the following terms and conditions:

          (i) The amount of the Letter of Credit shall be Four Hundred Thousand and
No/100 Dollars ($400,000.00), subject to and including any adjustment thereto pursuant to
the provisions of Section 16.1(c) below (as so adjusted, if applicable, the “Required
Amount”), and Tenant shall maintain the Letter of Credit in the Required Amount in
full force and effect throughout the term of this Lease (including any

- 43 -

 

extensions thereof) and until thirty (30) days after the expiration of the term of this Lease,
unless Tenant elects at any time to replace the Letter of Credit with a full cash Security Deposit
in compliance with Section 16.1(a). The Letter of Credit may be for an initial one-year term, with
automatic renewal provisions, provided that Landlord shall be given at least thirty (30) days prior
written notice if the Letter of Credit will not be renewed as of any otherwise applicable renewal
date and shall be entitled to draw against the expiring Letter of Credit if a replacement Letter of
Credit is not furnished to Landlord at least twenty (20) days prior to the scheduled expiration
date, as provided in Section 16.1(b)(iii)(A) below. The Letter of Credit must provide that it is
transferable to any successor in interest to Landlord under this Lease, and any transfer fees and
other related costs and expenses payable in connection with any such transfer shall be borne solely
by Tenant.

          (ii) Landlord shall be entitled (but shall not be required) to draw against the Letter
of Credit and receive and retain the proceeds thereof upon any default (beyond any applicable cure
period) by Tenant in the payment of any rent or other amounts required to be paid by Tenant under
this Lease, or upon the occurrence of any other event of default (beyond any applicable cure
period) under this Lease, by presenting to the issuer a written statement by Landlord that Landlord
is entitled to draw the requested amount under the Letter of Credit pursuant to the terms of this
Lease. The amount of the draw shall not exceed the amount of the payments (if any) as to which
Tenant is then in default and/or the amount reasonably necessary to cure any non-monetary events of
default by Tenant, and shall be applied by Landlord to the cure of the applicable default(s).
Following any partial draw under this paragraph (ii), if Tenant fully cures all outstanding
defaults and provides Landlord with a new Letter of Credit in the full Required Amount under this
Section 16.1, Landlord shall surrender and return to Tenant, within ten (10) days after Tenant’s
satisfaction of the foregoing conditions, the Letter of Credit under which the partial draw was
made.

          (iii) Landlord shall also be entitled (but shall not be required) to draw against the Letter
of Credit in full and to receive the entire proceeds thereof under either of the following
circumstances:

          (A) If the Letter of Credit will expire as of a date prior to the date thirty (30)
days after the expiration of the term of this Lease and Tenant fails to provide to Landlord
an extension or replacement of such Letter of Credit, in at least the minimum Required
Amount, at least twenty (20) days prior to the scheduled expiration date of the Letter of
Credit; or

          (B) If, as a result of a draw against the Letter of Credit by Landlord or for any
other reason, the amount of the Letter of Credit falls below the minimum Required Amount
and Tenant has failed to cause the Letter of Credit to be restored to at least the minimum
Required Amount within ten (10) business days after written demand by Landlord or, in lieu
thereof, has failed to put up cash in an amount equal to the amount required to be restored
(which cash,

- 44 -

 

if put up by Tenant, shall be retained by Landlord as a cash security deposit
in accordance with Section 16.1(a) hereof).

          (iv) If Landlord draws against the Letter of Credit in any of the circumstances
described in subparagraph (iii) above, Landlord may use, apply and/or retain the amount
drawn for the cure of any then existing defaults under this Lease. Any amount drawn that is
not immediately so used or applied by Landlord shall be retained by Landlord as a cash
Security Deposit, subject to and in accordance with the provisions of Section 16.1(a).

          (v) Any actual or purported withdrawal, rescission, termination or revocation of
the Letter of Credit by the issuer thereof prior to the expiration of the term of this Lease
(except when replaced prior to the effectiveness of such withdrawal, rescission, termination
or revocation by a replacement Letter of Credit as contemplated in Section 16.1(b)(iii)(A)
hereof) shall be a material breach of this Lease.

          (vi) The Letter of Credit shall provide that it is governed by the
International Standby Practices (ISP98), ICC Publication No. 590.

          (c) Adjustment of Security Deposit. If on the third (3rd) anniversary of the
Rent Commencement Date there is no uncured event of default by Tenant under this Lease, and no
event which, if remaining uncured after notice and/or passage of time, would constitute an event of
default by Tenant under this Lease, then effective as of the third (3rd) anniversary of the Rent
Commencement Date, the required amount of the Security Deposit under Section 16.1(a) above and the
Required Amount for purposes of the Letter of Credit (if any) under Section 16.1(b) above shall
each be reduced to Two Hundred Thousand and No/100 Dollars ($200,000.00). If Landlord is holding a
Letter of Credit in a larger amount at the time any such reduction becomes effective, Landlord
agrees to cooperate reasonably with Tenant and the issuer in surrendering such Letter of Credit
upon Landlord’s receipt of a replacement Letter of Credit in not less than the adjusted minimum
amount required pursuant to this paragraph.

17. MISCELLANEOUS

     17.1 Notices. All notices, consents, waivers and other communications which this
Lease requires or permits either party to give to the other shall be in writing and shall be deemed
given when delivered personally (including delivery by private same-day or overnight courier or
express delivery service) or by telecopier with mechanical confirmation of transmission, effective
upon personal delivery to or refusal of delivery by the recipient (in the case of personal
delivery by any of the means described above) or upon telecopier transmission during normal
business hours at the recipient’s office (in the case of telecopier transmission, with any
transmission outside of normal business hours being effective as of the beginning of the first
business day commencing after the time of actual transmission) to the parties at their respective
addresses as follows:

- 45 -

 

	 	 	 
	To Tenant:

	 	(until the Rent Commencement Date)
	 

	 	Alexza Pharmaceuticals, Inc.
	 

	 	1020 East Meadow Circle
	 

	 	Palo Alto, CA 94303
	 

	 	Attn: August J. Moretti, CFO
	 

	 	Telecopier: (650) 687-3999
	 
	 	 
	 

	 	(after the Rent Commencement Date)
	 

	 	Alexza Pharmaceuticals, Inc.
	 

	 	2091 Stierlin Court
	 

	 	Mountain View, CA 94043
	 

	 	Attn: August J. Moretti, CFO
	 

	 	Telecopier: (408)                     [to be determined]
	 
	 	 
	with a copy to:

	 	K. William Neuman, Esq.
	 

	 	Heller Ehrman LLP
	 

	 	333 Bush Street, Suite 3000
	 

	 	San Francisco, CA 94104
	 

	 	Telecopier: (415) 772-2064
	 
	 	 
	To Landlord:

	 	Britannia Hacienda VIII LLC
	 

	 	c/o Slough Estates USA Inc.
	 

	 	444 North Michigan Avenue, Suite 3230
	 

	 	Chicago, IL 60611
	 

	 	Attn: Randy Rohner
	 

	 	Telecopier: (312) 755-0717
	 
	 	 
	with a copy to:

	 	Britannia Management Services, Inc.
	 

	 	555 Twelfth Street, Suite 1650
	 

	 	Oakland, CA 94607
	 

	 	Attn: Magdalena Shushan
	 

	 	Telecopier: (510) 763-6262
	 
	 	 
	and a copy to:

	 	Folger Levin & Kahn llp
	 

	 	Embarcadero Center West
	 

	 	275 Battery Street, 23rd Floor
	 

	 	San Francisco, CA 94111
	 

	 	Attn: Donald E. Kelley, Jr.
	 

	 	Telecopier: (415) 986-2827

or to such other address(es) as may be contained in a notice of address change given by either
party to the other pursuant to this Section, effective no earlier than fifteen (15) days after
delivery of such notice to the receiving party. Rental payments and other sums required by this
Lease to be paid by Tenant shall be delivered to Landlord in care of Britannia Management Services,
Inc., 555 Twelfth Street, Suite 1650, Oakland, CA 94607, or at such other address as

- 46 -

 

Landlord may from time to time specify in writing to Tenant, and shall be deemed to be paid
only upon actual receipt.

     17.2 Successors and Assigns. The obligations of this Lease shall run with the
land, and this Lease shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the original Landlord named herein and each
successive Landlord under this Lease shall be liable only for obligations accruing during the
period of its ownership of the Center, and any liability for obligations accruing after termination
of such ownership shall terminate as of the date of such termination of ownership and shall pass to
the successor lessor.

     17.3 No Waiver. The failure of either party to seek redress for violation, or to
insist upon the strict performance, of any covenant or condition of this Lease shall not be deemed
a waiver of such violation, or prevent a subsequent act which would originally have constituted a
violation from having all the force and effect of an original violation.

     17.4 Severability. If any provision of this Lease or the application thereof is
held to be invalid or unenforceable, the remainder of this Lease or the application of such
provision to persons or circumstances other than those as to which it is invalid or unenforceable
shall not be affected thereby, and each of the provisions of this Lease shall be valid and
enforceable, unless enforcement of this Lease as so invalidated would be unreasonable or grossly
inequitable under all the circumstances or would materially frustrate the purposes of this Lease.

     17.5 Litigation Between Parties. In the event of any litigation or other dispute
resolution proceedings between the parties hereto arising out of or in connection with this
Lease, the prevailing party shall be reimbursed for all reasonable costs, including, but
not limited to, reasonable accountants’ fees and attorneys’ fees, incurred in
connection with such proceedings (including, but not limited to, any appellate
proceedings relating thereto) or in connection with the enforcement of any judgment or
award rendered in such proceedings. “Prevailing party” within the meaning of this
Section shall include, without limitation, a party who dismisses an action for recovery
hereunder in exchange for payment of the sums allegedly due, performance of covenants
allegedly breached or consideration substantially equal to the relief sought in the
action.

     17.6 Surrender. A voluntary or other surrender of this Lease by Tenant, or a
mutual termination thereof between Landlord and Tenant, shall not result in a merger but
shall, at the option of Landlord, operate either as an assignment to Landlord of any and
all existing subleases and subtenancies, or a termination of all or any existing
subleases and subtenancies. This provision shall be contained in any and all assignments
or subleases made pursuant to this Lease.

     17.7 Interpretation. The provisions of this Lease shall be construed as a whole,
according to their common meaning, and not strictly for or against Landlord or Tenant.
The captions preceding the text of each Section and subsection hereof are included only
for convenience of reference and shall be disregarded in the construction or
interpretation of this Lease.

- 47 -

 

     17.8 Entire Agreement. This written Lease, together with the exhibits hereto,
contains
all the representations and the entire understanding between the parties hereto with respect to the
subject matter hereof. Any prior correspondence, memoranda or agreements are replaced in total by
this Lease and the exhibits hereto. This Lease may be modified only by an agreement in writing
signed by each of the parties.

     17.9 Governing Law. This Lease and all exhibits hereto shall be construed and
interpreted in accordance with and be governed by all the provisions of the laws of the State
of California.

     17.10 No Partnership. The relationship between Landlord and Tenant is solely that of
a lessor and lessee. Nothing contained in this Lease shall be construed as creating any
type or manner of partnership, joint venture or joint enterprise with or between Landlord
and Tenant.

     17.11 Financial Information. From time to time Tenant shall promptly provide
directly to prospective lenders and purchasers of the Center designated by Landlord such
financial information pertaining to the financial status of Tenant as Landlord may
reasonably request; provided, Tenant shall be permitted to provide such financial
information in a manner which Tenant deems reasonably necessary to protect the
confidentiality of such information. In addition, from time to time, Tenant shall provide
Landlord with such financial information pertaining to the financial status of Tenant as
Landlord may reasonably request. Landlord agrees that all financial information supplied
to Landlord by Tenant shall be treated as confidential material, and shall not be
disseminated to any party or entity (including any entity affiliated with Landlord)
without Tenant’s prior written consent, except that Landlord shall be entitled to provide
such information, subject to reasonable precautions to protect the confidential nature
thereof, (i) to Landlord’s partners and professional advisors, solely to use in connection
with Landlord’s execution and enforcement of this Lease, and (ii) to prospective lenders
and/or purchasers of the Center, solely for use in connection with their bona fide
consideration of a proposed financing or purchase of the Center, provided that
such prospective lenders and/or purchasers are not then engaged in businesses directly
competitive with the business then being conducted by Tenant. For purposes of this
Section, without limiting the generality of the obligations provided herein, it shall be
deemed reasonable for Landlord to request copies of Tenant’s most recent audited annual
financial statements, or, if audited statements have not been prepared, unaudited
financial statements for Tenant’s most recent fiscal year, accompanied by a certificate
of Tenant’s chief financial officer that such financial statements fairly present
Tenant’s financial condition as of the date(s) indicated. Notwithstanding any other provisions
of this Section 17.11, during any period in which Tenant has outstanding a class of
publicly traded securities and is filing with the Securities and Exchange Commission, on
a regular basis, Forms 10Q and 10K and any other periodic filings required under the
Securities Exchange Act of 1934, as amended, it shall constitute sufficient compliance
under this Section 17.11 for Tenant to furnish Landlord with copies of such periodic
filings substantially concurrently with the filing thereof with the Securities and
Exchange Commission.

          Landlord and Tenant recognize the need of Tenant to maintain the confidentiality of
information regarding its financial status and the need of Landlord to be informed of, and to
provide to prospective lenders and purchasers of the Center financial information pertaining to,

- 48 -

 

Tenant’s financial status. Landlord and Tenant agree to cooperate with each other in achieving
these needs within the context of the obligations set forth in this Section.

     17.12 Costs. If Tenant requests the consent of Landlord under any provision of this
Lease for any act that Tenant proposes to do hereunder, including, without limitation, assignment
or subletting of the Premises, Tenant shall, as a condition to doing any such act and the receipt
of such consent, reimburse Landlord promptly for any and all reasonable costs and expenses
incurred by Landlord in connection therewith, including, without limitation, reasonable attorneys’
fees.

     17.13 Time. Time is of the essence of this Lease, and of every term and
condition hereof.

     17.14 Rules and Regulations. Tenant shall observe, comply with and obey, and shall
cause its employees, agents and, to the best of Tenant’s ability, invitees to observe, comply with
and obey such reasonable rules and regulations for the safety, care, cleanliness, order and use of
the Building and the Center as Landlord may promulgate and deliver to Tenant from time to time,
provided that such rules and regulations are reasonable (or, to the extent they are not
reasonable, are mandated by applicable law), do not materially impair Tenant’s ability to conduct
the uses permitted hereunder on the Premises and in the Center, and do not discriminate against
Tenant relative to other similarly situated tenants occupying portions of the Center.

     17.15 Brokers. Landlord agrees to pay a brokerage commission in connection with
the consummation of this Lease (a) to Landlord’s broker, CB Richard Ellis, Inc., and (b)
to Tenant’s broker, CRESA Partners, each in accordance with a separate written agreement.
Each party represents and warrants that no other broker participated in the consummation
of this Lease and agrees to indemnify, defend and hold the other party harmless against
any liability, cost or expense, including, without limitation, reasonable attorneys’
fees, arising out of any claims for brokerage commissions or other similar compensation
in connection with any conversations, prior negotiations or other dealings by the
indemnifying party with any other broker.

     17.16 Memorandum of Lease. At any time during the term of this Lease, either party,
at its sole expense, shall be entitled to record a memorandum of this Lease and, if
either party so requests, both parties agree to cooperate in the preparation, execution,
acknowledgment and recordation of such document in reasonable form. Tenant expressly
requests that such a memorandum be prepared and recorded promptly following the Lease
Commencement Date, and Landlord agrees to cooperate in such preparation and recording. If
such a memorandum of lease is recorded, then upon expiration or termination of this
Lease, Tenant agrees promptly to execute, acknowledge and deliver to Landlord, upon
written request by Landlord, a Termination of Memorandum of Lease in such form as
Landlord may reasonably request, for the purpose of terminating any continuing effect of
the previously recorded memorandum of lease as a cloud upon title to the Property.

     17.17 Corporate Authority. Each party to this Lease represents and warrants that
the person signing this Lease on behalf of such respective party is fully authorized to
do so and, by so doing, to bind such party.

- 49 -

 

     17.18 Execution and Delivery. Submission of this Lease for examination or signature
by Tenant does not constitute an agreement or reservation of or option for lease of the Premises.
This instrument shall not be effective or binding upon either party, as a lease or otherwise, until
executed and delivered by both Landlord and Tenant. This Lease may be executed in one or more
counterparts and by separate parties on separate counterparts, but each such counterpart shall
constitute an original and all such counterparts together shall constitute one and the same
instrument.

     17.19 Survival. Without limiting survival provisions which would otherwise be implied
or construed under applicable law, the provisions of Sections 2.5, 5.4, 7.2, 7.3, 7.4, 8.2,
9.6,10.6, 16.1(a), 17.5 and 17.16 hereof shall survive the termination of this Lease with respect
to matters occurring prior to the expiration of this Lease.

     17.20 Parking. Landlord agrees that the Common Areas, taken as a whole, shall include
parking in amounts sufficient to satisfy the minimum parking requirements of the City of Mountain
View applicable to the Center from time to time; that Tenant shall have the nonexclusive and
non-reserved use of approximately 3.2 automobile parking stalls per 1,000 rentable square feet of
space in the Premises; and that there shall be no additional cost or charge to Tenant for the
nonexclusive use of such parking by Tenant and its employees and invitees.

[signature page follows]

- 50 -

 

     IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the day and year first
set forth above.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 			 	“Landlord”	 	 	 	 		“Tenant”
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	BRITANNIA HACIENDA VIII LLC, a 

Delaware limited liability company	 	 	 	ALEXZA PHARMACEUTICALS, INC., a 

Delaware corporation
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	Slough Estates USA Inc., Its	 	By:	 	/s/ August J. Moretti
 

	 
	 

	 	Operations Manager and Member
	
	 	 	Name:
	 	August J. Moretti
 

	 	 
	 

	 	 	 	 	 	 	 	Title:
	 	 
CFO
	 	 
	 

	 	 	 	 	 	 	 	 	 	 

	 	 
	 

	 	By:
	 	/s/ Jonathan M. Bergschneider	 	 	 	 	 	 	 	 
	 

	 	 	 	Jonathan M. Bergschneider
 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	Senior Vice President
	 	 	 	Name:
	 	 

	 	 
	 

	 	 	 	
	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 	 	 	 	 

	 	 

The undersigned entities, being all of the fee owners (as tenants in common) of the Center and the
Property, hereby acknowledge, confirm and agree that: (i) they approve and accept the terms of the
foregoing Lease; (ii) Britannia Hacienda VIII, LLC is authorized to enter into the Lease and to
perform all of the obligations of Landlord thereunder; and (iii) in the event they or any of them
succeed to the right, title and interest of Landlord under the Lease, in consideration of and
conditional upon attornment by Tenant or by any permitted assignee of Tenant’s interest under the
Lease as contemplated in the final sentence of Section 15.1 of the Lease, they will not disturb
the rights or occupancy of Tenant or of such permitted assignee, as applicable, so long as Tenant
or such permitted assignee, as applicable, is not in material default under the Lease beyond any
applicable cure periods (for which purpose the occurrence and continuance of any event of default
under Section 14.1 of the Lease shall be deemed to be “material”).

	 	 	 	 	 
	Slough CDEC II, LLC, a Delaware limited liability company	 	 
	 
	 	 	 	 
	By:

	 	/s/ Jonathan M. Bergschneider
 

Jonathan M. Bergschneider, Secretary
	 	 
	 
	 	 	 	 
	Slough CDEC III, LLC, a Delaware limited liability company	 	 
	 
	 	 	 	 
	By:

	 	/s/ Jonathan M. Bergschneider
 

Jonathan M. Bergschneider, Secretary
	 	 
	 
	 	 	 	 
	Slough CDEC IV, LLC, a Delaware limited liability company	 	 
	 
	 	 	 	 
	By:

	 	/s/ Jonathan M. Bergschneider
 

Jonathan M. Bergschneider, Secretary
	 	 
	 
	 	 	 	 

- 51 -

 

EXHIBITS

	 	 	 
	EXHIBIT A-1

	 	Site Plan (The Center)
	 
	 	 
	EXHIBIT A-2

	 	Building Plan
	 
	 	 
	EXHIBIT B

	 	Workletter
	 
	 	 
	EXHIBIT C

	 	Form of Acknowledgment of Rent Commencement Date
	 
	 	 
	EXHIBIT D

	 	Existing Tenant Rights

- 52 -

 

EXHIBIT A-l 

SITE PLAN (THE CENTER)

[See attached two (2) pages.]

 EXHIBIT A-l TO LEASE

   

 

	Site Plan 
EXHIBIT A-1 (page 1 of 2) 	 	Shoreline Technology Party

MOUNTAIN VIEW, CALIFORNIA 

  

 

	Site Plan 
EXHIBIT A-1
(page 2 of 2) 	 	Shoreline Technology Party

MOUNTAIN VIEW, CALIFORNIA 

  

 

EXHIBIT A-2

BUILDING PLAN

[See
attached one (1) page.]

EXHIBIT A-2 TO LEASE

  

 

	Building Plan 
EXHIBIT A-2  	 	Shoreline Technology Park

MOUNTAIN VIEW, CALIFORNIA 

  

 

EXHIBIT B

WORKLETTER

     This Workletter
(“Workletter”) constitutes part of the Lease dated as of August 25,
2006 (the “Lease”) between BRITANNIA HACIENDA VIII LLC, a Delaware limited liability company
(“Landlord”), and ALEXZA PHARMACEUTICALS, INC., a Delaware corporation (“Tenant”).
The terms of this Workletter are incorporated in the Lease for all purposes.

1. Defined Terms. As used in this Workletter. the following capitalized terms have the
following meanings:

     (a)
Approved Plans: Plans and specifications prepared by the Architect for the
Tenant Improvements and approved by Landlord in accordance with Paragraph 2 of this
Workletter, subject to further modification from time to time to the extent provided in and in
accordance with such Paragraph 2.

     (b) Architect: The Architect for the Tenant Improvements shall be selected by
Tenant with the written approval of Landlord, which approval shall not be unreasonably
withheld, conditioned or delayed.

     (c) Cost of Improvement: See definition in Paragraph 2(b) hereof.

     (d) Final Working Drawings: See definition in Paragraph 2(a) hereof.

     (e) General Contractor: The General Contractor for the Tenant Improvements shall be
selected by Tenant with the written approval of Landlord, which approval shall not be unreasonably
withheld, conditioned or delayed, as contemplated in Paragraph 4(a) hereof.

     (f) Project Manager. Project Management Advisors, Inc., or any other project manager
designated by Landlord in its sole discretion from time to time by written notice to Tenant to act
in an oversight and coordinating capacity on behalf of Landlord, as contemplated in Paragraph 2(d)
below, in connection with the design and construction of the Tenant Improvements.

     (g) Tenant Improvements: The improvements to or within the Premises as shown on the
Approved Plans from time to time and to be constructed by Tenant pursuant to the Lease and this
Workletter. The Tenant Improvements may also include an exterior fenced (but not completely
enclosed) area for emergency generator or other equipment-related purposes, subject to Landlord’s
approval of the Approved Plans therefor, to compliance with applicable laws and to all other
applicable conditions as set forth in the Workletter, provided that the construction and
operation of such exterior fenced area does not increase the required number of parking spaces or
the required parking ratios for the Center.

     (h) Capitalized terms not otherwise defined in this Workletter shall have the
definitions set forth in the Lease.

 

 

2. Plans, Cost of Improvements and Construction. Landlord and
 Tenant shall comply with
the procedures set forth in this Paragraph 2 in preparing, delivering and approving matters
relating to the Tenant Improvements.

     (a) Approved Plans and Working Drawings for Tenant’s Work. Tenant shall promptly and
diligently cause to be prepared and delivered to Landlord for approval (which approval shall not be
unreasonably withheld, conditioned or delayed by Landlord) a space plan and outline specifications
for the Tenant Improvements that Tenant wishes to construct in the
Premises (the “Schematic
Plans”). Following mutual approval of the Schematic Plans. Tenant shall then promptly and
diligently cause to be prepared and delivered to Landlord for approval (which approval shall not be
unreasonably withheld, conditioned or delayed by Landlord) final working drawings and
specifications for the Tenant Improvements, including any applicable life safety, mechanical and
electrical working drawings and final architectural drawings (collectively, the “Final Working
Drawings”). The Final Working Drawings shall substantially conform to the approved Schematic
Plans. Landlord shall either approve the Final Working Drawings or set forth in writing with
particularity any changes necessary to bring the Final Working Drawings into substantial conformity
with the approved Schematic Plans or into a form which will be acceptable to Landlord. Upon
approval of the Final Working Drawings by Landlord and Tenant, the Final Working Drawings shall
constitute the “Approved Plans”, superseding (to the extent of any inconsistencies) any
inconsistent features of the previously approved Schematic Plans.
After Approved plans are
available, Tenant may submit the same to the appropriate governmental authorities for all
applicable building permits. Tenant hereby agrees that neither Landlord nor Landlord’s consultants
shall be responsible for obtaining any building permit or certificate of occupancy for the Premises
and that obtaining the same shall be Tenant’s responsibility; provided, however, that Landlord
shall cooperate with Tenant in executing permit applications and performing other ministerial acts
reasonably necessary to enable Tenant to obtain any such permit or certificate of occupancy and, if
applicable, shall submit plans and timely complete all of Landlord’s Work under Section 2.3 of the
Lease as reasonably required to allow Tenant to obtain a permit or certificate of occupancy. Prior
to commencing construction of the Tenant Improvements, Tenant shall provide Landlord with a copy of
all required permits.

     (b) Cost of Improvements.
 “Cost of Improvement” shall mean, with respect to
any item or component for which a cost must be determined in order to allocate such cost, or an
increase in such cost, to Landlord and/or Tenant pursuant to this Workletter, the sum of the
following (unless otherwise agreed in writing by Landlord and Tenant with respect to any specific
item or component or any category of items or components): (i) all sums paid to contractors or
subcontractors for labor and materials furnished in connection with construction of such item or
component; (ii) all costs, expenses, payments, fees and charges (other than penalties) paid or
incurred to or at the direction of any city, county or other governmental or quasi-governmental
authority or agency which are required to be paid in order to obtain all necessary governmental
permits, licenses, inspections and approvals relating to construction of such item or component;
(iii) engineering and architectural fees for services rendered in connection with the design and
construction of such item or component (including, but not limited to, the Architect for such item
or component and an electrical engineer, mechanical engineer and civil engineer, if applicable);
(iv) sales and use taxes; (v) testing and inspection costs; (vi) the cost of power, water and
other utility facilities and the cost of collection and removal of debris required in connection
with construction of such item or component; and

B - 2

 

(vii) all other “hard” and “soft” costs incurred
in the construction of such item or component in
accordance with the Approved Plans and this Workletter.

     (c) Changes. If Tenant at any time desires to make any changes, alterations or
additions to the Approved Plans, such changes, alterations or additions shall be subject to
approval by Landlord in the same manner as the original Approved
Plans as provided above; provided,
however, that Landlord shall respond to any such request by Tenant within ten (10) days after
submission thereof by Tenant, and Landlord’s failure to respond within the required time shall be
deemed to constitute Landlord’s approval of the requested change.

     (d) Project Management. Unless and until revoked by Landlord by written notice
delivered to Tenant, Landlord hereby (i) delegates to Project
Manager the authority to exercise all
approval rights and other rights and powers of Landlord under this Workletter with respect to the
design and construction of the Tenant Improvements, and (ii) requests that Tenant work with Project
Manager with respect to any logistical or other coordination matters arising in the course of
construction of the Tenant Improvements, including (but not limited to) reviewing and processing
Tenant’s requests for disbursement of the Tenant Improvement Allowance, monitoring Tenant’s and
Landlord’s compliance with their respective obligations under this Workletter and under the Lease
with respect to the design and construction of the Tenant Improvements, and addressing any
coordination issues that may arise from any concurrent performance of Landlord’s Work under Section
2.3 of the Lease and Tenant’s construction of the Tenant Improvements. Tenant acknowledges the
foregoing delegation and request, and agrees to cooperate reasonably with Project Manager as
Landlord’s representative pursuant to such delegation and request. As between Landlord and Tenant,
however, Landlord shall be bound by and be fully responsible for all acts and omissions of Project
Manager and for the performance of all of Landlord’s obligations under the Lease and this
Workletter, notwithstanding such delegation of authority to Project Manager. Notwithstanding the
preceding sentence, neither Landlord’s delegation of authority to Project Manager nor Project
Manager’s performance of the functions and responsibilities contemplated in this paragraph shall
cause Landlord or Project Manager to incur any obligations or responsibilities for the design,
construction or delivery of the Tenant Improvements, except to the extent of the specific
obligations and responsibilities expressly set forth in the Lease and in this Workletter. All fees
and charges of Project Manager for services rendered to or on behalf of Landlord under this
Workletter shall be at Landlord’s sole expense.

3. Payment of Costs. Except as otherwise expressly provided in this Workletter or by mutual
written agreement of Landlord and Tenant, the Cost of Improvement of the Tenant Improvements shall
be paid or reimbursed by Landlord up to a maximum contribution by Landlord equal to Eight Million
Three Hundred Thirty-One Thousand Seven Hundred Eight and no/100 Dollars ($8,331,708.00) (the
“Tenant Improvement Allowance”), less any reduction in or charge against such sums pursuant
to any applicable provisions of the Lease or of this Workletter. Tenant shall be responsible, at
its sole cost and expense, for payment of the entire Cost of Improvements of the Tenant
Improvements in the Premises in excess of the Tenant Improvement Allowance or such portion thereof
as Tenant elects to use (if any such excess occurs), including (but not limited to) any costs or
cost increases incurred as a result of unavoidable delays, governmental requirements or
unanticipated conditions, but Tenant shall be entitled to utilize the entire Tenant Improvement
Allowance (or so much thereof as Tenant elects

B - 3

 

to use) for the Tenant Improvements prior to being required to expend any of Tenant’s own funds on
an unreimbursed basis for the Tenant Improvements (except to the extent any costs are incurred
which are not eligible for payment or reimbursement out of the Tenant Improvement Allowance under
the express provisions governing the Tenant Improvement Allowance,
including, without limitation,
the express restrictions set forth below in this paragraph). The funding of the Tenant Improvement
Allowance (or so much thereof as Tenant elects to use) shall be made on a monthly basis or at other
convenient Intervals mutually approved by Landlord and Tenant, and in all other respects shall be
based on such commercially reasonable disbursement conditions and procedures as Landlord, Project
Manager and Landlord’s lender (if any) may reasonably prescribe (which conditions may include,
without limitation, delivery of invoices, architect’s certifications and/or other evidence
reasonably satisfactory to Landlord or Project Manager that expenses have been incurred for the
design and construction of alterations and improvements for which the Tenant Improvement Allowance
is eligible to be expended or applied, and delivery of conditional or unconditional lien releases
from all parties performing the applicable work). An example of Landlord’s standard “Invoicing
Instructions” is attached hereto as Schedule B-l and incorporated herein by this reference,
but Landlord reserves the right to modify or supplement such instructions in a commercially
reasonable manner as provided in the preceding sentence. Notwithstanding the foregoing provisions,
(i) under no circumstances shall the Tenant Improvement Allowance or any portion thereof be used or
useable for any moving or relocation expenses of Tenant, or for any Cost of Improvement (or any
other cost or expense) associated with any moveable furniture, trade fixtures, personal property or
any other item or element which, under the applicable provisions of the Lease, will not become
Landlord’s property and remain with the Building upon expiration or termination of the Lease,
unless (and only to the extent) otherwise expressly agreed in writing by Landlord in its sole
discretion, and (ii) any portion of the Tenant Improvement Allowance which has not been claimed or
drawn by Tenant as of the date that is one year after the Rent Commencement Date shall expire and
shall no longer be available to Tenant thereafter. The Tenant Improvement Allowance is provided as
part of the basic consideration to Tenant under the Lease and will not result in any rental
adjustment or additional rent beyond the rental amounts expressly provided in Section 3.1 of the
Lease.

4. Tenant’s Work. Tenant shall construct and install the Tenant Improvements in the
Premises substantially in accordance with the Approved Plans. Tenant’s construction of the Tenant
Improvements shall be performed in accordance with, and shall in all respects be subject to, the
terms and conditions of the Lease (to the extent not inconsistent with this Workletter), and shall
also be subject to the following conditions:

     (a) Contractor Requirements. The general contractor engaged by Tenant for construction
of the Tenant Improvements, and any subcontractors, shall be duly licensed in California and shall
be subject to Landlord’s prior written approval (in accordance with and to the extent provided in
Paragraph 1 (e) above). Tenant shall engage only union contractors for the construction of the
Tenant Improvements and for the installation of Tenant’s fixtures and equipment in the Building,
and shall require all such contractors engaged by Tenant, and all of their subcontractors, to use
only union labor on or in connection with such work, except to the extent Landlord determines, in
its reasonable discretion, that the use of non-union labor would not create a material risk of
labor disputes, picketing or work interruptions at the Center, in

B - 4

 

which event Landlord shall, to that extent, waive such union labor requirement at Tenant’s
request.

     (b) Costs and Expenses of Tenant Improvements. Subject to Landlord’s payment or
reimbursement obligations under Paragraph 3 hereof with respect to Landlord’s share of the Cost of
Improvements for the Tenant Improvements, Tenant shall promptly pay all costs and expenses arising
out of the design and construction of the Tenant Improvements (including the costs of permits) and
shall furnish Landlord with evidence of payment on request. Tenant shall provide Landlord with ten
(10) days prior written notice before commencing any construction activities on the Property. Upon
completion of construction of the Tenant Improvements, Tenant shall deliver to Landlord a release
and unconditional lien waiver executed by each contractor, subcontractor and materialman involved
in the design or construction of the Tenant Improvements.

     (c) Tenant’s Indemnification. Tenant shall indemnify, defend (with counsel reasonably
satisfactory to Landlord) and hold Landlord harmless from all suits, claims, actions, losses, costs
and expenses (including, but not limited to, claims for workers’ compensation, attorneys’ fees and
costs) based on personal injury or property damage or contract claims (including, but not limited
to, claims for breach of warranty) arising from the design and construction of the Tenant
Improvements from any cause whatsoever other than negligence or willful misconduct or omission by
Landlord or its agents, employees or contractors. Tenant shall repair or replace (or, at Landlord’s
election, reimburse Landlord for the cost of repairing or replacing) any portion of the buildings
or other existing improvements on the Property and/or any of Landlord’s real or personal property
or equipment that is damaged, lost or destroyed in the course of or in connection with the
construction of the Tenant Improvements, except to the extent (i) any such damage, loss or
destruction is caused by negligence or willful misconduct or omission by Landlord or its agents,
employees or contractors, or (ii) any demolition or removal of existing improvements is explicitly
contemplated in the Approved Plans as approved by Landlord.

     (d) Insurance. With respect to the construction of the Tenant Improvements, Tenant’s
contractors shall obtain and provide to Landlord certificates evidencing workers’ compensation,
employer’s liability, public liability and property damage insurance in amounts and forms and with
companies reasonably satisfactory to Landlord, and Tenant shall provide to Landlord certificates
evidencing Tenant’s compliance with the insurance requirements of Article 10 of the Lease (except
to the extent any such requirements, such as the products/completed operations coverage described
in the final sentence of Section 10.1(a) of the Lease, by their terms are clearly relevant only
after Tenant’s commencement of business operations on the Premises). In addition, to the extent
Landlord or Project Manager advises Tenant of any specific insurance requirements that are
commercially reasonable and customary during a “course of construction” period (such as, but not
limited to, designation of specified “additional insureds” who would not ordinarily be required to
be named in that capacity during the Lease term under Article 10 of the Lease), Tenant shall comply
with and/or cause its contractors (as applicable) to comply with such additional requirements.

     (e) Rules and Regulations. Tenant and Tenant’s contractors shall comply with any
rules, regulations and requirements that Landlord, Project Manager or Landlord’s property

B - 5

 

manager or general contractor (if any) may reasonably impose with respect to the construction
of the Tenant Improvements. Tenant’s agreement with Tenant’s contractors shall require each
contractor to provide reasonable and customary daily cleanup of the construction area to the extent
that such cleanup is necessitated by the performance of such contractor’s activities in connection
with the construction of the Tenant Improvements and to the extent that such cleanup is reasonably
practical under the circumstances.

     (f) Risk of Loss. All materials, work, installations and decorations of any nature
brought onto or installed in the Building, by or at the direction of Tenant or in connection with
the construction of the Tenant Improvements, prior to the Rent Commencement Date shall be at
Tenant’s risk, and neither Landlord nor any party acting on Landlord’s behalf shall be
responsible for any damage, loss or destruction thereof.

     (g) Condition of Tenant’s Work. All work performed by Tenant shall be performed in a
good and workmanlike manner, shall be free from defects in design, materials and workmanship, and
shall be completed in compliance with the Approved Plans in all material respects and in
compliance with all applicable governmental laws, ordinances, codes and regulations in force at
the time such work is completed. Without limiting the generality of the foregoing, Tenant shall
be responsible (i) for obtaining all permits and approvals necessary for the construction of the
Tenant Improvements, and (ii) for compliance of all Tenant Improvements with the requirements of
the ADA and all similar or related requirements under federal, state or local laws pertaining to
access by persons with disabilities.

     (h) As-Built
Drawings. At the conclusion of construction, Tenant shall cause
the Architect and General Contractor (A) to update the Approved Drawings as necessary to reflect
all changes made to the Approved Drawings during the course of construction, (B) to certify to
the best of their knowledge that the “record-set” of as-built drawings are true and correct,
which certification shall survive the expiration or termination of this Lease, and (C) to deliver
to Landlord two (2) sets of copies of such record set of drawings within ninety (90) days
following issuance of a certificate of occupancy for the Premises.

5. No Agency. Nothing contained in this Workletter shall make or constitute Tenant as
the agent of Landlord.

6. Survival. Without limiting any survival provisions which would otherwise be implied or
construed under applicable law, the provisions of Paragraph 4(c) of this Workletter shall survive
the termination of the Lease with respect to matters occurring prior to expiration of the Lease.

7. Miscellaneous. All references in this Workletter to a number of days shall be
construed to refer to calendar days, unless otherwise specified herein. If any item requiring
approval by Landlord is disapproved by Landlord in a timely manner, the procedure for preparation
and approval of that item shall be repeated.

[rest of page intentionally left blank]

B - 6

 

     IN
WITNESS WHEREOF, the parties have executed this Workletter concurrently with and as of the
date of the Lease.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	“Landlord”
	 	 	 	“Tenant”	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	BRITANNIA HACIENDA VIII LLC, a 

Delaware limited liability company	 	ALEXZA PHARMACEUTICALS, INC., a

Delaware corporation
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	Slough Estates USA Inc., Its	 	 	 	 	 	 	 	 	 	 
	 	 	Operations Manager and Member	 	By:	 	/s/ [ILLEGIBLE]	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Its:	 	CFO	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jonathan M. Bergschneider	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Jonathan M. Bergschneider
	 	By:	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Senior Vice President
	 	Its:	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 

Attachment: Schedule B-l (Sample Invoicing Instructions)

B - 7

 

Schedule B-l

Sample Invoicing Instructions

TI ALLOWANCE DISBURSEMENT INSTRUCTIONS

	1.	 	Tenant shall assemble a package of applicable vendor invoices eligible for Tenant
Allowance distribution per the requirements of the lease Workletter. This package should
contain:

	 	•	 	a cover letter
	 
	 	•	 	an invoice summary that clearly indicates the vendor, the invoice
number(s), the invoice date(s), the amounts due, and a reference to the TI project
at                     .
	 
	 	•	 	copies of the invoices, bearing the written approval of Tenant

	2.	 	Tenant shall send 2 copies of the entire package for processing to:

Project Management Advisors, Inc.

400 Oyster Point Blvd., Suite 336

South San Francisco, CA 94080 

Attn: Bernard Baker

	3.	 	Invoice packages must be received by PMA not later than the 5th of the month in
order to be included in the monthly payment request to Slough Estates. Packages received after
the 5th of the month wiil be included in the following month’s payment request.
	 
	4.	 	The Owner will make every attempt to issue the Tenant Improvement Allowance disbursement by
the end of the month for those packages received by PMA on or before
the 5th of the
month.
	 
	5.	 	All invoices must be submitted with the following attachments:

	 	•	 	Conditional Waiver of Lien covering the amount being invoiced.
	 
	 	•	 	Unconditional Waiver of Lien covering payment of the prior month’s invoice.
	 
	 	•	 	Copies of receipts (i.e. reimbursable expenses, subcontractor invoices).
	 
	 	•	 	Subcontractor waiver(s), if applicable.
	 
	 	•	 	General contractor shall submit (2) original wet signature invoices/application
for payment,

     signed and notarized

     Construction Invoices shall have:

	 	-	 	Architect’s signature (when appropriate)
	 
	 	-	 	Tenant’s signature

Invoices submitted without proper Lien Waiver documentation will not be included in the
payment request.

Schedule B-l to Workletter

 

 

     EXHIBIT C

     
ACKNOWLEDGMENT OF RENT COMMENCEMENT DATE

     This
Acknowledgment is executed as
of                                        , 200               
, by BRITANNIA
HACIENDA VIII LLC, a Delaware limited liability company (“Landlord”), and ALEXZA
PHARMACEUTICALS, INC., a Delaware corporation (“Tenant”), pursuant to Section 2.4 of the
Lease dated August 25, 2006 between Landlord and Tenant (the “Lease”) covering premises
located at 2091 Stierlin Court, Mountain View, CA 94043 (the “Premises”).

     Landlord and Tenant hereby acknowledge and agree as follows:

     1. The
Rent Commencement Date under the Lease is
                                        ,
200               .

     2. The termination date under the Lease shall be                                         , 200                    , subject
to any applicable provisions of the Lease for extension or early termination thereof.

     3. The square footage of the Premises is 65,604 square feet.

     4. Tenant accepts the Premises, subject only to Landlord’s warranties,
representations and obligations expressly set forth in Section 2.3 of the Lease.

     This Acknowledgment is executed as of the date first set forth above.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	“Landlord”
	 	 	 	 	 	“Tenant”	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	BRITANNIA HACIENDA VIII LLC, a 

Delaware limited liability company	 	ALEXZA PHARMACEUTICALS, INC., a

Delaware corporation
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	Slough Estates USA Inc., Its	 	 	 	 	 	 	 	 	 	 
	 

	 	Operations Manager and Member
	 	 
	 	By:	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Its:	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Jonathan M. Bergschneider
	 	 	 	By:	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Senior Vice President
	 	 	 	Its:	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 

EXHIBIT C TO LEASE

 

 

     EXHIBIT D

     EXISTING
TENANT RIGHTS

	1.	 	Boston Scientific Corp.:

Tenant of 2011 Stierlin Court

Holds first offer right with 5-day response period on 2091 Stierlin Court building (the

	 	 	 	Premises), which right has already expired or been waived prior to Lease

Commencement Date

	 	 	Lease expires 2/28/2011, subject to one 5-year renewal option

	2.	 	FoxHollow Technologies, Inc.

Tenant of 2081 Stierlin Court

	 	 	Holds first refusal right with 10-business-day response period on 2091 Stierlin Court

	 	 	 	building (the Premises), which right has already expired or been waived prior to

Lease Commencement Date

	 	 	Lease expires 12/31/2016, subject to two 5-year renewal options

	3.	 	Actel Corp.:

	 	 	Tenant of 2061 Stierlin Court

Holds first offer right with 10-day response period on 2071 Stierlin Court building (one

	 	 	 	of the First Refusal Buildings)

	 	 	Lease expires 1/31/2014, subject
to two 5-year renewal options

EXHIBIT D TO LEASE

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