Build To Suit Lease

Exhibit 10.1


CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.


BUILD-TO-SUIT LEASE


Landlord: Slough BTC, LLC


Tenant: EOS Biotechnology, Inc.


Date: June 1, 2001


TABLE OF CONTENTS


1. PROPERTY..........................................................................1
1.1 Lease of Building........................................................1
1.2 Landlord's Reserved Rights...............................................1
1.3 Right of First Offer.....................................................2


2. TERM..............................................................................2
2.1 Term.....................................................................2
2.2 Early Possession.........................................................3
2.3 Delay In Possession......................................................3
2.4 Acknowledgment Of Rent Commencement......................................5
2.5 Holding Over.............................................................5
2.6 Option To Extend Term....................................................5


3. RENTAL............................................................................6
3.1 Minimum Rental...........................................................6
(a) Rental Amounts..................................................6
(b) Rental Amounts During First Extended Term.......................6
(c) Rental Amounts During Second Extended Term......................7
(d) Rental Adjustment Due to Change in Square Footage...............7
(e) Rental Adjustment Due to Tenant Improvement Costs...............7
3.2 Late Charge..............................................................8


4. STOCK WARRANTS....................................................................8
4.1 Stock Warrants...........................................................8


5. CONSTRUCTION......................................................................9
5.1 Construction of Improvements.............................................9
5.2 Condition of Property....................................................9
5.3 Compliance with Law......................................................9


6. TAXES............................................................................10
6.1 Personal Property.......................................................10
6.2 Real Property...........................................................10


7. OPERATING EXPENSES...............................................................10
7.1 Payment of Operating Expenses...........................................10
7.2 Definition Of Operating Expenses........................................11
7.3 Determination Of Operating Expenses.....................................12
7.4 Final Accounting For Lease Year.........................................13
7.5 Proration...............................................................13


8. UTILITIES........................................................................13
8.1 Payment.................................................................13
8.2 Interruption............................................................14


9. ALTERATIONS; SIGNS...............................................................14
9.1 Right To Make Alterations...............................................14
9.2 Title To Alterations....................................................14
9.3 Tenant Trade Fixtures...................................................15
9.4 No Liens................................................................15
9.5 Signs...................................................................16


10. MAINTENANCE AND REPAIRS..........................................................16
10.1 Landlord's Work.........................................................16
10.2 Tenant's Obligation For Maintenance.....................................16
(a) Good Order, Condition And Repair...............................16
(b) Landlord's Remedy..............................................16
(c) Condition Upon Surrender.......................................16


11. USE OF PROPERTY..................................................................17
11.1 Permitted Use...........................................................17
11.2 Requirement of Continued Use............................................17
11.3 No Nuisance.............................................................17
11.4 Compliance With Laws....................................................17
11.5 Liquidation Sales.......................................................18
11.6 Environmental Matters...................................................18


12. INSURANCE AND INDEMNITY..........................................................22
12.1 Insurance...............................................................22
12.2 Quality Of Policies And Certificates....................................23
12.3 Workers' Compensation...................................................24
12.4 Waiver Of Subrogation...................................................24
12.5 Increase In Premiums....................................................24
12.6 Indemnification.........................................................24
12.7 Blanket Policy..........................................................25


13. SUBLEASE AND ASSIGNMENT..........................................................25
13.1 Assignment And Sublease Of Building.....................................25
13.2 Rights Of Landlord......................................................25


14. RIGHT OF ENTRY AND QUIET ENJOYMENT...............................................26
14.1 Right Of Entry..........................................................26
14.2 Quiet Enjoyment.........................................................26


15. CASUALTY AND TAKING..............................................................27
15.1 Damage or Destruction...................................................27
15.2 Condemnation............................................................28
15.3 Reservation Of Compensation.............................................29
15.4 Restoration Of Improvements.............................................29


16. DEFAULT..........................................................................30
16.1 Events Of Default.......................................................30
(a) Abandonment....................................................30
(b) Nonpayment.....................................................30
(c) Other Obligations..............................................30
(d) General Assignment.............................................30
(e) Bankruptcy.....................................................30
(f) Receivership...................................................30
(g) Attachment.....................................................30
(h) Insolvency.....................................................31
16.2 Remedies Upon Tenant's Default..........................................31
16.3 Remedies Cumulative.....................................................32


17. SUBORDINATION, ATTORNMENT AND SALE...............................................32


17.1 Subordination To Mortgage...............................................32
17.2 Sale Of Landlord's Interest.............................................32
17.3 Estoppel Certificates...................................................32
17.4 Subordination to CC&R's.................................................33
17.5 Mortgagee Protection....................................................33


18. SECURITY.........................................................................34
18.1 Deposit.................................................................34


19. MISCELLANEOUS....................................................................35
19.1 Notices.................................................................35
19.2 Successors And Assigns..................................................36
19.3 No Waiver...............................................................37
19.4 Severability............................................................37
19.5 Litigation Between Parties..............................................37
19.6 Surrender...............................................................37
19.7 Interpretation..........................................................37
19.8 Entire Agreement........................................................37
19.9 Governing Law...........................................................37
19.10 No Partnership..........................................................37
19.11 Financial Information...................................................37
19.12 Costs...................................................................38
19.13 Time....................................................................38
19.14 Rules And Regulations...................................................38
19.15 Brokers.................................................................38
19.16 Memorandum Of Lease.....................................................38
19.17 Corporate Authority.....................................................39
19.18 Execution and Delivery..................................................39
19.19 Survival................................................................39
19.20 Parking and Traffic.....................................................39


-iv-


EXHIBITS


EXHIBIT A Real Property Description


EXHIBIT B Site Plan


EXHIBIT C Workletter


EXHIBIT D Estimated Construction Schedule


EXHIBIT E Acknowledgment of Rent Commencement Date


-v-


BUILD-TO-SUIT LEASE


THIS BUILD-TO-SUIT LEASE ("LEASE") is made and entered into as of June 1, 2001, by and between SLOUGH BTC, LLC, a Delaware limited liability company ("LANDLORD"), and EOS BIOTECHNOLOGY, INC., a Delaware corporation ("TENANT").


THE PARTIES AGREE AS FOLLOWS:


1. PROPERTY


1.1 LEASE OF BUILDING.


(a) Landlord leases to Tenant and Tenant hires and leases from Landlord, on the terms, covenants and conditions hereinafter set forth, the building (the "BUILDING") to be constructed pursuant to Article 5 hereof and EXHIBIT C attached hereto on a portion of the real property described in EXHIBIT A attached hereto (the "PROPERTY"), to consist of a three-story office and laboratory building containing approximately 82,000 square feet. The location of the Building on the Property is intended to be substantially as shown for the building designated "BUILDING D" on the site plan attached hereto as EXHIBIT B (the "SITE PLAN"). The Property is commonly known as Britannia Oyster Point (the "CENTER") and is located at Oyster Point Boulevard and Veterans Boulevard in the City of South San Francisco, County of San Mateo, State of California. The Building and the other improvements to be constructed on the Property pursuant to Article 5 hereof and EXHIBIT C attached hereto are sometimes referred to collectively herein as the "IMPROVEMENTS." The parking areas, driveways, sidewalks, landscaped areas and other portions of the Center that lie outside the exterior walls of the buildings to be constructed 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."


(b) As an appurtenance to Tenant's leasing of the Building 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 16.1 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, PROVIDED that reasonable parking and reasonable access to the Building remain available; (iii) to construct, alter or add to other buildings and Common Area improvements in the Center; (iv) to build in areas adjacent to the Center and to add such areas to the Center; (v) to use the Common Areas while engaged in making additional improvements, repairs or alterations to the Center or any portion thereof; and (vi) to do and perform such other acts with respect to the Common Areas and the Center as may be necessary or appropriate; PROVIDED, however, that notwithstanding anything to the contrary in this Section 1.2, Landlord's exercise of its rights hereunder shall not cause any


material diminution of Tenant's rights, nor any material increase of Tenant's obligations, under this Lease.


1.3 RIGHT OF FIRST OFFER. Tenant shall have the following right of first offer ("RIGHT OF FIRST OFFER") to lease additional space in or adjacent to the Center, PROVIDED, however, that such Right of First Offer shall not arise or be effective if Tenant is in default hereunder, beyond any applicable notice and cure periods, on the date Landlord would otherwise be required to notify Tenant of the commencement and terms of such Right of First Offer pursuant to this Section 1.3. Landlord has advised Tenant (a) that it is presently Landlord's intention to develop Building E of the Center, as shown on the Site Plan ("BUILDING E"), as an office building rather than a biotechnology building, and (b) that the property lying easterly of the Property and commonly known as 333 Oyster Point Boulevard, South San Francisco ("333 OYSTER POINT"), presently operated as a commercial warehouse facility, is presently owned by Landlord. In the event that either (x) Landlord decides, in its sole discretion, to develop Building E as a biotechnology building or (y) Landlord or any affiliate of Landlord to which 333 Oyster Point may be transferred, as applicable, decides to redevelop 333 Oyster Point as a biotechnology facility, then in either such event Tenant shall have a Right of First Offer to lease a minimum of 100,000 square feet of space in Building E (or the entirety of Building E, if less than 100,000 square feet) or the redeveloped 333 Oyster Point facility, as applicable, and neither Landlord nor its affiliate, if applicable, shall lease space in Building E or in the redeveloped 333 Oyster Point facility (excluding any leases which, individually and in the aggregate, leave at least 100,000 square feet of space in the applicable building or facility to be offered to Tenant pursuant to this Right of First Offer) without first complying with all applicable provisions of this Section 1.3. Tenant's Right of First Offer with respect to Building E or 333 Oyster Point, as applicable, shall commence upon Tenant's receipt of written notice from Landlord (a "FIRST OFFER NOTICE") identifying the building or facility to which the Right of First Offer applies, the amount of space available in such building or facility (not to be less than 100,000 square feet or the entirety of the applicable building or facility, if less than 100,000 square feet) and the rent, improvement allowance and other material terms upon which Landlord proposes to offer space in such building or facility. Tenant shall have ten (10) business days after receipt of a First Offer Notice in which to reach agreement on all terms and achieve execution of a written lease agreement with Landlord or its affiliate, as applicable, regarding Tenant's leasing and occupancy of at least 100,000 square feet of space in the building or facility covered by the First Offer Notice (or the entirety of such building or facility, if less than 100,000 square feet). It is generally the intention of the parties that the form of lease for any such leasing of space pursuant to a First Offer Notice would be substantially identical to this Lease, excluding this Section 1.3 and subject only to such other modifications as may be reasonably necessary to reflect differences in the particular space to be occupied pursuant to such new lease and/or in the economic terms applicable to Tenant's leasing of such space. If Landlord and Tenant fail to reach agreement on all terms and achieve execution of a written lease within ten (10) business days after Tenant's receipt of a First Offer Notice, then Tenant shall have no further rights under this Section 1.3 with respect to the building or facility covered by such First Offer Notice and Landlord shall thereafter be free to proceed with the leasing of such building or facility at any time and from time to time without any further obligation to Tenant. If Tenant leases space in either Building E or 333 Oyster Point pursuant to a First Offer Notice under this Section 1.3, then Tenant shall have no further rights under this Section 1.3 with respect to either of such buildings or facilities (except Tenant's rights under the written lease agreement entered into with respect to the particular space covered by such First Offer Notice) and Landlord shall thereafter be free to proceed with the further leasing of both such building and such facility at any time and from time to time without any further obligation to Tenant.


2. TERM


-2-


2.1 TERM. The term of this Lease shall commence upon mutual execution of this Lease by Landlord and Tenant. Tenant's minimum rental and Operating Expense obligations shall commence on the earlier of (i) one hundred eighty (180) days after Landlord's completion of the principal structural components of the Building Shell (as hereinafter defined) pursuant to the Workletter attached hereto as EXHIBIT C (the "WORKLETTER"), subject to any adjustments in such time period to the extent authorized or required under the provisions of such Workletter, which completion shall be evidenced by Landlord's delivery of the Structural Completion Certificate pursuant to the Workletter, or (ii) the date Tenant takes occupancy of and commences operation of its business in the Building, the earlier of such dates being herein called the "RENT COMMENCEMENT DATE"; PROVIDED, however, that in no event shall the Rent Commencement Date occur earlier than January 1, 2003 unless determined pursuant to clause (ii) of this sentence or unless an earlier date is hereafter mutually agreed upon in writing by Landlord and Tenant. The term of this Lease shall end on the day (the "TERMINATION DATE") immediately preceding the fifteenth (15th) anniversary of the Rent Commencement Date, unless sooner terminated or extended as hereinafter provided.


2.2 EARLY POSSESSION. Tenant shall have the nonexclusive right to occupy and use the Building from and after the date of Landlord's delivery of the Structural Completion Certificate described in clause (i) of Section 2.1, even though Landlord may be continuing to construct the balance of Landlord's Work as contemplated in the Workletter, for the purpose of constructing Tenant's Work as contemplated in the Workletter and for the purpose of installing fixtures and furniture, laboratory equipment, computer equipment, telephone equipment, low voltage data wiring and personal property and other similar work related to the construction of Tenant's Work and/or preparatory to the commencement of Tenant's business in the Building. Such occupancy and possession, and any early access under the next sentence of this Section 2.2, shall be subject to and upon all of the terms and conditions of this Lease and of the Workletter (including, but not limited to, conditions relating to the maintenance of required insurance), except that Tenant shall have no obligation to pay minimum rental or Operating Expenses for any period prior to the Rent Commencement Date as determined under Section 2.1; such early possession shall not advance or otherwise affect the Rent Commencement Date or Termination Date determined under Section 2.1. Tenant shall also be entitled to have early access to the Building and the Property at all appropriate times prior to Landlord's delivery of the Structural Completion Certificate, subject to the approval of Landlord and its general contractor (which approval shall not be unreasonably withheld or delayed) and to all other provisions of this Section 2.2, for the purpose of performing work preparatory to the construction of Tenant's Work or necessary for the orderly sequencing of such Work and/or for the actual construction of Tenant's Work pursuant to the Workletter, and Tenant shall not be required to pay minimum rental or Operating Expenses by reason of such early access until the Rent Commencement Date otherwise occurs; without limiting the generality of the preceding portion of this sentence, Tenant shall be entitled to have early access to the Property and the Building as soon as the roof metal decking is in place to begin hanging electrical, mechanical and plumbing services from the overhead structure, subject to all of the provisions of this Section 2.2. Tenant shall not unreasonably interfere with or delay Landlord's contractors by any early access, occupancy or possession under this Section 2.2, shall coordinate and cooperate with Landlord and its contractors (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 Landlord's delivery of the Structural Completion Certificate, and shall indemnify, defend and hold harmless Landlord and its agents and employees from and against any and all claims, demands, liabilities, actions, losses, costs and expenses, including (but not limited to) reasonable attorneys' fees, arising out of or in connection with Tenant's early entry upon the Property hereunder.


2.3 DELAY IN POSSESSION. Landlord agrees to use its best reasonable efforts to complete its portion of the work described in Section 5.1 and the Workletter promptly, diligently and within the respective time periods set forth in the Estimated Construction Schedule attached hereto as EXHIBIT D and incorporated herein by this reference, as such schedule may be modified from time to time by mutual written agreement of Landlord and Tenant, and subject to the effects of any delays caused by or attributable to Tenant or any other circumstances beyond Landlord's reasonable control (excluding financial inability); PROVIDED, however, that Landlord shall not be liable for any damages caused by any delay in the completion of such work, nor shall any such


-3-


delay affect the validity of this Lease or the obligations of Tenant hereunder. [***]


[***]
[***]


-4-


[***] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.


[***]


2.4 ACKNOWLEDGMENT OF RENT COMMENCEMENT. 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 E (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 Property 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 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 Property 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 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 Property or any portion thereof, including but not limited to any claims made by a succeeding tenant by reason of such delay; PROVIDED, however, that the indemnification and hold harmless obligation set forth in this sentence shall not apply with respect to any holdover period to which Landlord has consented in ...