<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the period ended JUNE 30, 1996
---------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _____________ TO _____________
Commission File No.
0-19731
GILEAD SCIENCES, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-3047598
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
353 Lakeside Drive, Foster City, California 94404
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 415-574-3000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
------ ------
Number of shares outstanding of the issuer's common stock, par value $.001
per share, as of July 19, 1996: 28,486,798.
<PAGE>
GILEAD SCIENCES, INC.
INDEX
PART I. FINANCIAL INFORMATION PAGE NO.
--------
Item 1. Condensed Consolidated Financial Statements and Notes
Condensed Consolidated Balance Sheets - June 30, 1996 and
December 31, 1995. . . . . . . . . . . . . . . . . . . . . . . . . 3
Condensed Consolidated Statements of Operations - for the three
months and six months ended June 30, 1996 and 1995 . . . . . . . . 4
Condensed Consolidated Statements of Cash Flows - for the six
months ended June 30, 1996 and 1995. . . . . . . . . . . . . . . . 5
Notes to Condensed Consolidated Financial Statements . . . . . . . 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations. . . . . . . . . . . . . . . . 7
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Securities Holders . . . . . . 9
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . .10
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements and Notes
GILEAD SCIENCES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
ASSETS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1996 1995
----------- ------------
Current assets: (unaudited) (Note)
<S> <C> <C>
Cash and cash equivalents $ 182,918 $ 27,420
Short-term investments 107,481 128,239
Accounts receivable (less allowances of $220 at June 30, 1996) 1,537 -
Prepaid expenses and other current assets 3,235 1,558
---------- ----------
Total current assets 295,171 157,217
Property and equipment, net 7,774 8,369
Other assets 1,015 1,073
---------- ----------
$ 303,960 $ 166,659
---------- ----------
---------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,142 $ 2,412
Accrued clinical and preclinical expenses 5,276 3,923
Other accrued liabilities 3,480 2,229
Deferred contract revenues 1,750 208
Current portion of equipment financing obligations
and long-term debt 2,943 2,906
---------- ----------
Total current liabilities 14,591 11,678
Noncurrent portion of equipment financing obligations
and long-term debt 2,090 3,482
Commitments
Stockholders' equity:
Common stock, par value $.001 per share; 60,000,000
shares authorized; 28,341,999 shares and
23,769,878 shares issued and outstanding at
June 30, 1996 and December 31, 1995, respectively 28 24
Additional paid-in capital 424,559 265,460
Unrealized gains (losses) on investments, net (654) 167
Accumulated deficit (135,714) (112,754)
Deferred compensation (940) (1,398)
---------- ----------
Total stockholders' equity 287,279 151,499
---------- ----------
$ 303,960 $ 166,659
---------- ----------
---------- ----------
</TABLE>
Note: The consolidated balance sheet at December 31, 1995 has been derived
from audited financial statements at that date but does not include
all of the information and footnotes required by generally accepted
accounting principles for complete financial statements.
See accompanying notes.
3
<PAGE>
GILEAD SCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------ ---------------------
1996 1995 1996 1995
---------- ----------- --------- ---------
<S> <C> <C> <C> <C>
Revenues:
Product sales, net $ 1,403 $ - $ 1,403 $ -
Contract sales 803 935 1,582 1,865
--------- -------- -------- ---------
Total revenues 2,206 935 2,985 1,865
--------- -------- -------- ---------
Costs and expenses:
Cost of sales 101 - 101 -
Research and development 10,563 7,500 19,846 15,554
Selling, general and administrative 7,440 2,415 12,305 5,180
--------- -------- -------- ---------
Total costs and expenses 18,104 9,915 32,252 20,734
--------- -------- -------- ---------
Loss from operations (15,898) (8,980) (29,267) (18,869)
Interest income, net 3,740 1,045 6,307 2,061
--------- -------- -------- ---------
Net loss $(12,158) $(7,935) $(22,960) $(16,808)
--------- -------- -------- ---------
--------- -------- -------- ---------
Net loss per share $ (0.43) $ (0.41) $ (0.85) $ (0.88)
--------- -------- -------- ---------
--------- -------- -------- ---------
Common shares used in the
calculation of net loss per share 28,330 19,165 26,999 19,135
--------- -------- -------- ---------
--------- -------- -------- ---------
</TABLE>
See accompanying notes.
4
<PAGE>
GILEAD SCIENCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Increase (decrease) in cash and cash equivalents
(unaudited)
(in thousands)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
-------------------------
1996 1995
---------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (22,960) $(16,808)
Adjustments used to reconcile net loss
to net cash used in operating activities:
Depreciation and amortization 2,883 2,188
Changes in assets and liabilities:
Accounts receivable (1,537) -
Prepaid expenses and other current assets (1,677) (275)
Other assets 58 153
Accounts payable (1,270) (31)
Accrued clinical and preclinical expenses 1,353 563
Other accrued liabilities 1,251 281
Deferred contract revenues 1,542 (1,600)
--------- --------
Total adjustments 2,603 1,279
--------- --------
Net cash used in operating activities (20,357) (15,529)
--------- --------
Cash flows from investing activities:
Purchases of short-term investments (225,523) (70,799)
Sales of short-term investments 128,250 10,455
Maturities of short-term investments 117,210 69,556
Capital expenditures (1,124) (255)
--------- --------
Net cash provided by
investing activities 18,813 8,957
--------- --------
Cash flows from financing activities:
Payments of equipment financing obligations
and long-term debt (1,355) (1,394)
Proceeds from issuance of common stock 158,397 1,201
--------- --------
Net cash provided by (used in)
financing activities 157,042 (193)
--------- --------
Net increase (decrease) in cash and cash equivalents 155,498 (6,765)
Cash and cash equivalents at beginning of period 27,420 15,296
--------- --------
Cash and cash equivalents at end of period $182,918 $ 8,531
--------- --------
--------- --------
</TABLE>
See accompanying notes.
5
<PAGE>
GILEAD SCIENCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1996
(unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The information at June 30, 1996, and for the three and six month periods
ended June 30, 1996 and 1995, is unaudited but includes all adjustments
(consisting only of normal recurring adjustments) which, in the opinion of
management, are necessary to state fairly the financial information set forth
therein in accordance with generally accepted accounting principles. The
interim results are not necessarily indicative of results to be expected for
the full fiscal year. These financial statements should be read in
conjunction with the audited financial statements for the nine month period
ended December 31, 1995 included in the Company's annual report to security
holders furnished to the Securities and Exchange Commission pursuant to Rule
14a-3(b) in connection with the Company's 1996 Annual Meeting of Stockholders
and the interim financial statements included in the previously filed
quarterly report (Form 10-Q) for the three months ended March 31, 1996.
NET LOSS PER SHARE
Net loss per share is computed using the weighted average number of common
shares outstanding during the period. Common stock equivalents relating to
stock options are excluded from the computation as their effect is antidilutive.
DEFERRED COMPENSATION
The Company records deferred compensation on option grants for the
difference between the grant price and the market value on the date of grant and
amortizes such amounts over the five year vesting period of the options.
2. INVESTMENTS
Management determines the appropriate classification of debt securities at
the time of purchase and reevaluates such designation as of each balance sheet
date. The Company's debt securities, which consist primarily of commercial
paper of major U.S. corporations, U.S. Treasury Securities and Certificates of
Deposit, are classified as available-for-sale and are carried at estimated fair
value in cash equivalents and short-term investments. Unrealized gains and
losses are reported as a separate component of stockholders' equity. The
amortized cost of debt securities in this category is adjusted for amortization
of premiums and accretion of discounts to maturity. Such amortization is
included in interest income. Realized gains and losses on available-for-sale
securities are included in interest income and expense. The cost of securities
sold is based on the specific identification method. Interest and dividends on
securities classified as available-for-sale are included in interest income. At
June 30, 1996, the contractual maturities of the debt securities do not exceed
three years.
6
<PAGE>
3. AUTHORIZED COMMON STOCK
On May 14, 1996, the stockholders approved an amendment to the Company's
certificate of incorporation, increasing the number of shares of common stock
the Company is authorized to issue from 35,000,000 to 60,000,000.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
OVERVIEW
Since its inception in June 1987, Gilead has devoted substantially all of
its resources to its research and development programs. The Company has been
unprofitable since its inception and expects to incur substantial losses for the
next several years, due primarily to its research and development programs,
including preclinical studies, clinical trials and manufacturing, as well as
increasing marketing and sales efforts in support of VISTIDE-Registered
Trademark- (cidofovir injection) sales. On June 26, 1996 the U. S. Food and
Drug Administration (FDA) granted marketing clearance of VISTIDE for the
treatment of cytomegalovirus retinitis (CMV) in patients with AIDS. The Company
is independently marketing VISTIDE in the United States with an antiviral
specialty sales force. The Company expects that losses will fluctuate from
quarter to quarter and that such fluctuations may be substantial. There can be
no assurance that the Company will successfully develop, commercialize,
manufacture and market additional products or ever achieve or sustain
profitability. As of June 30, 1996, the Company's accumulated deficit was
approximately $135.7 million.
The successful development and commercialization of the Company's products
will require substantial and ongoing efforts at the forefront of the life
sciences industry. The Company is pursuing preclinical or clinical development
of a number of additional product candidates. Even if these product candidates
appear promising during various stages of development, they may not reach the
market for a number of reasons. Such reasons include the possibilities that the
potential products will be found ineffective or unduly toxic during preclinical
or clinical trials, fail to receive necessary regulatory approvals, be difficult
to manufacture on a large scale, be uneconomical to market or be precluded from
commercialization by proprietary rights of others.
As a company in an industry undergoing rapid change, the Company faces
significant challenges and risks, including the risks inherent in its research
and development programs, uncertainties in obtaining and enforcing patents, the
lengthy and expensive regulatory approval process, intense competition from
pharmaceutical and biotechnology companies, increasing pressure on
pharmaceutical pricing from payors, patients and government agencies,
limitations on the availability of capital and uncertainties associated with the
eventual market acceptance of VISTIDE or any of the Company's products in
development. These risks are discussed in greater detail in the Company's
Annual Report on Form 10-K for the nine month period ended December 31, 1995.
Stockholders and potential investors in the Company should carefully
consider these risks in evaluating the Company and should be aware that the
realization of any of these risks could have a dramatic and negative impact
on the Company's stock price.
This Report contains forward-looking statements that involve risks and
uncertainties. The Company's actual results may differ significantly from the
results discussed in the forward-looking statements. Factors that might cause
such a difference include, but are not limited to, the risks discussed in the
Company's Annual Report on Form 10-K for the nine month period ended December
31, 1995.
7
<PAGE>
RESULTS OF OPERATIONS
REVENUES
The Company had total revenues of $2.2 million and $0.9 million for the
quarters ended June 30, 1996 and 1995, respectively. Total revenues for the six
month periods ended June 30, 1996 and 1995 were $3.0 million and $1.9 million,
respectively. Revenues increased during the three and six month periods ended
June 30, 1996, primarily due to net product sales of $1.4 million derived from
the launch of VISTIDE in June 1996. Other revenue resulted primarily from the
Company's collaborative research and development agreement with Glaxo. In March
1996, the Company and Glaxo entered into a new collaborative research agreement,
extending for five years the existing collaboration between the parties.
COSTS AND EXPENSES
For the quarter ended June 30, 1996, the Company's research and development
expenses increased 41% to $10.6 million from $7.5 million for the same period in
1995. The Company's research and development expenses increased 27% to $19.8
million for the six month period ended June 30, 1996 from $15.6 million for the
same period in 1995. This increase was due primarily to increases in expenses
associated with the Company's ongoing clinical trials for several product
candidates, as well as increases in research and development staffing and
preclinical expenses. The Company expects its research and development expenses
in the remainder of 1996 will grow significantly reflecting anticipated
increased expenses related to clinical trials and manufacturing.
Selling, general and administrative expenses were $7.4 million and $2.4
million for the quarters ended June 30, 1996 and 1995, respectively,
representing an increase of 208%. For the six month periods ended June 30, 1996
and 1995, such expenses were $12.3 million and $5.2 million, respectively, an
increase of 136%. This increase is attributable primarily to the establishment
of marketing and sales capabilities in connection with the launch of VISTIDE, as
well as activities in support of the Company's expanded research and development
efforts. The Company expects its selling, general and administrative expenses
to significantly increase during the remainder of 1996 in connection with on-
going marketing and sales activities, as well as increased corporate development
activities.
NET INTEREST INCOME
The Company had net interest income of $3.7 million and $1.0 million for
the quarters ended June 30, 1996 and 1995, respectively, representing an
increase of 270%. Net interest income for the six month periods ended June 30,
1996 and 1995 was $6.3 million and $2.1 million, respectively. Net interest
income has significantly increased due to the Company's higher average cash and
cash equivalents and short-term investment balances which resulted from the
Company's two public offerings of common stock completed in February 1996 and
August 1995.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents and short-term investments were $290.4 million at
June 30, 1996 compared to $155.7 million at December 31, 1995. This increase is
the result of the Company's public offering of common stock in February 1996
which generated $155.6 million in net proceeds. The Company expects to incur
construction and equipment costs of approximately $3.0 million related to the
build-out of a 37,000 square foot facility leased in August 1996. The costs
will be incurred during the third and fourth quarter of 1996 and the Company
expects to occupy this space by October 1996. During 1996, the Company expects
to incur substantial and
8
<PAGE>
increasing research and development and selling, general and administrative
expenses. The Company is actively seeking additional collaborative
agreements with corporate partners. There can be no assurance, however, that
any such agreements will be entered into or that they will reduce the
Company's funding requirements. The Company expects that additional equity
or debt financings may be required to fund its operations. There can be no
assurance that such funds will be available on favorable terms, if at all.
Net cash used in operations was $20.4 million and $15.5 million for each
of the six month periods ended June 30, 1996 and 1995, respectively. The
Company expects its cash requirements to grow in future periods due to higher
expenses. However, the Company believes that its existing capital resources,
including net product revenues, will be adequate to satisfy its capital needs
for the foreseeable future. The Company's future capital requirements will
depend on many factors, including the progress of the Company's research and
development, the scope and results of preclinical studies and clinical trials,
the cost, timing and outcomes of regulatory reviews, the rate of technological
advances, determinations as to the commercial potential of the Company's
products under development, the commercial performance of VISTIDE and any of the
Company's products in development that receive marketing approval,
administrative and legal expenses, the status of competitive products, the
establishment of manufacturing capacity or third-party manufacturing
arrangements, the establishment of sales and marketing capabilities and the
establishment of collaborative relationships with other companies.
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
At the Company's Annual Meeting of Stockholders on May 14, 1996, the
stockholders elected six directors to serve until the next annual meeting. They
also approved the amendments to the Company's 1991 Stock Option Plan ("Option
Plan"), approved the adoption of the Company's 1995 Non-Employee Directors'
Stock Option Plan ("Directors' Plan"), ratified an amendment to the Company's
Restated Certificate of Incorporation increasing the Company's authorized shares
of common stock ("Certificate of Incorporation"), and ratified the selection of
Ernst & Young LLP as independent auditors of the Company for its fiscal year
ending December 31, 1996 ("Selection of Auditors").
Of the 28,288,416 shares of Common Stock of the Company outstanding as of
the March 25, 1996 record date for the Annual Meeting (the "Outstanding
Shares"), the votes regarding the election of directors were as follows:
Votes
Votes Against or Broker
For Withheld Abstentions Non-votes
---------- ---------- ----------- ---------
Etienne F. Davignon 24,072,775 248,983 N/A N/A
James M. Denny, Sr. 24,072,675 249,083 N/A N/A
Gordon E. Moore 24,072,674 249,084 N/A N/A
Michael L. Riordan 24,072,763 248,995 N/A N/A
Donald H. Rumsfeld 24,072,575 249,183 N/A N/A
George P. Shultz 24,072,575 249,183 N/A N/A
Of the Outstanding Shares, 13,345,091 shares were voted for the
ratification of the amendments to the Option Plan, increasing the aggregate
number of shares of Common Stock authorized for issuance under such plan by
2,250,000 shares and adding provisions with respect to Section 162(m) of the
Internal Revenue Code of 1986, as amended; 6,299,367 shares were
9
<PAGE>
voted against or were withheld; 22,775 shares abstained; and no shares were
broker non-votes.
Of the Outstanding Shares, 16,577,948 shares were voted for the
ratification of the Directors' Plan; 46,874 shares abstained; and no shares
were broker non-votes.
Of the Outstanding Shares, 23,865,650 shares were voted for the
ratification of the amendment to the Certificate of Incorporation; 315,903
shares were voted against or were withheld; 21,935 shares abstained; and no
shares were broker non-votes.
Of the Outstanding Shares, 24,272,401 shares were voted for the
ratification of the Selection of Auditors; 15,564 shares were voted against or
were withheld; 33,493 shares abstained; and no shares were broker non-votes.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
10.35 Agreement among Registrant and Michael F. Bigham.
10.36 Vintage Park Research and Development Lease by and between
Registrant and WCB Sixteen Limited Partnership dated June 24,
1996 for premises located at 333 Lakeside Drive, Foster City,
California.
10.37 Amendment No. 1 to Vintage Park Research and Development Lease by
and between Registrant and WCB Seventeen Limited Partnership dated
June 24, 1996 for premises located at 335 Lakeside Drive, Foster
City, California.
10.38 Amendment No. 2 to Vintage Park Research and Development Lease by
and between Registrant and WCB Seventeen Limited Partnership dated
June 24, 1996 for premises located at 344B, 346 and 353 Lakeside
Drive, Foster City, California.
10.39 Amendment No. 2 to Vintage Park Research and Development Lease by
and between Registrant and WCB Sixteen Limited Partnership dated
June 24, 1996 for premises located at 342A and 368 Lakeside Drive,
Foster City, California.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed for the Quarter ended June 30,
1996.
10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GILEAD SCIENCES, INC.
---------------------------------------
(Registrant)
Date: July 26, 1996 /s/ John C. Martin
---------------------------------------
John C. Martin
President and Chief Executive Officer
Date: July 26, 1996 /s/ Mark L. Perry
---------------------------------------
Mark L. Perry
Vice President, Chief Financial Officer
and General Counsel
11
<PAGE>
AGREEMENT
This Agreement (this "Agreement") is made and entered into by and between
Gilead Sciences, Inc., a Delaware corporation ("Gilead") and Michael F. Bigham
("Employee"), effective as of May 24, 1996.
WHEREAS, Employee has tendered his resignation from all positions he
holds with Gilead, effective as set forth below, in order to accept a position
as President and Chief Executive Officer of another company; and
WHEREAS, Gilead has accepted Employee's resignation, and wishes to
provide him with certain benefits in consideration of Employee's promises and
covenants as contained herein;
NOW THEREFORE, in consideration of the mutual promises and covenants
contained herein, it is hereby agreed by and between the parties hereto as
follows:
1. RESIGNATION. Employee hereby resigns from the position of Executive
Vice President for Operations and Chief Financial Officer and from all other
positions he holds with the Company, effective as of July 1, 1996. Gilead
hereby accepts such resignation. From the effective date of this Agreement
through July 1, 1996, Employee shall remain in his current position at his
current level of salary and benefits, subject to Gilead's policies and
procedures. After July 1, 1996, the parties shall have no further obligations
to each other except as provided in this Agreement or in other written
agreements between Employee and Gilead.
2. STOCK OPTIONS. Exhibit A attached hereto sets forth all of the Gilead
stock options held by Employee as of the date of this Agreement, identified as
Option A through Option G on Exhibit A (the "Options"). Employee and Gilead
agree that the Options are hereby amended as follows, effective as of the date
of this Agreement:
(a) All of the unvested shares remaining under Option A (currently 32,396
shares) shall be accelerated and Option A shall become exercisable in
full upon the granting of marketing approval for Vistide-Registered
Trademark- (cidofovir injection) by the U.S. Food and Drug
Administration, provided such approval occurs before May 1, 1997.
(b) Options B and C are converted from incentive stock options to
nonqualified stock options.
(c) Vesting under all of the Options shall continue until July 1, 1996
and shall thereafter terminate, except to the extent provided in (a)
above with respect to Option A.
(d) To the extent vested, all of the Options shall be exercisable at any
time on or before May 1, 1998, in whole or in part, notwithstanding the
termination of Employee's employment.
3. LOAN. The Loan Agreement entered into between the Company and Employee
as of August 18, 1992 is hereby modified such that the $100,000 loan Employee
received thereunder shall be due and payable in full on the earlier of May 1,
1997 or the date on which Employee's new employer replaces such loan, without
interest if paid by such date, payable as otherwise provided in such Loan
Agreement.
1.
<PAGE>
4. RELEASE OF CLAIMS. Gilead and Employee each agree to release and
forever discharge the other party from any claims, disputes, damages, payments
or obligations of any kind arising out of or related to Employee's employment by
or resignation from Gilead, to the extent such claims, disputes, damages,
payments or obligations arise out of agreements, events or conduct occurring at
any time prior to the date of this Agreement. Each party acknowledges that it
has read and understands Section 1542 of the Civil Code of the State of
California regarding general releases of unknown claims, and expressly waives
the benefits and rights created by such section with respect to the release
granted in this Agreement. This release shall not apply to or affect any claims
that either party may have arising out of the obligations created by this
Agreement or other written agreements between Employee and Gilead.
5. GENERAL PROVISIONS.
a. GOVERNING LAW. This Agreement shall be governed in
all respects by the laws of the State of California as such laws are applied to
agreements between California residents entered into and performed entirely in
California.
b. SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and administrators of
the parties hereto.
c. ENTIRE AGREEMENT. This Agreement constitutes the full
and entire understanding and agreement between the parties with regard to the
subject matter hereof and neither party shall be liable or bound to the other
party in any manner by any representations, warranties, covenants and agreements
except as specifically set forth herein and therein.
d. SEPARABILITY. In case any provision of this Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
e. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
IN WITNESS WHEREOF, the parties have duly authorized and caused this
Agreement to be executed as of the effective date first set forth above.
GILEAD SCIENCES, INC. EMPLOYEE
By
----------------------- -------------------------
Michael F. Bigham
2.
<PAGE>
VINTAGE PARK
Foster City, California
GILEAD SCIENCES
RESEARCH AND DEVELOPMENT
LEASE
BASIC LEASE INFORMATION
Date: June 24, 1996
Landlord: WCB SIXTEEN LIMITED PARTNERSHIP
Tenant: GILEAD SCIENCES, INC., a Delaware corporation
Lease Reference
---------------
Premises and 333 Lakeside Drive Paragraph 1
Building Foster City, California
approximately 37,104
square feet
Term Commencement: August 1, 1996 Paragraph 2
Term Expiration: March 31, 2006 Paragraph 2
Base Rent: Paragraph 3(a)
August 1, 1996 through
July 31, 1997 $48,235.20 per mo.
August 1, 1997 through
July 31, 1998 $50,646.96 per mo.
August 1, 1998 through
July 31, 1999 $53,179.31 per mo.
August 1, 1999 through
July 31, 2000 $55,838.27 per mo.
August 1, 2000 through
July 31, 2001 $58,630.19 per mo.
August 1, 2001 through
July 31, 2002 $61,561.70 per mo.
August 1, 2002 through
July 31, 2003 $64,639.78 per mo.
August 1, 2003 through
July 31, 2004 $67,871.77 per mo.
-i-
<PAGE>
August 1, 2004 through
July 31, 2005 $71,265.35 per mo.
August 1, 2005 through
March 31, 2006 $74,828.62 per mo.
Tenant's Percentage Share 100% Paragraph 4(a)
Initial Estimated Monthly $0.37 per square foot per Paragraph 4(c)
Operating Expenses and month
Property Taxes:
Security Deposit: None Paragraph 15
Landlord's Address WCB Sixteen Limited Paragraph 19
for Notices: Partnership
c/o WCB Properties
393 Vintage Park Drive,
Suite 200
Foster City, CA 94404
Tenant's Address for Gilead Sciences, Inc.
Notices: 353 Lakeside Drive
Foster City, CA 94404
Attn: General Counsel
Exhibits EXHIBIT A: Diagrams of Paragraph 25
Premises
EXHIBIT B: 355 Lakeside Drive
First Offer Space Paragraph 21
The provisions of the Lease identified above in the margin are those provisions
where references to particular Basic Lease Information appear. Each such
reference shall incorporate the applicable Basic Lease Information. In the
event of any conflict between any Basic Lease Information and the Lease, the
latter shall control.
TENANT:
LANDLORD:
GILEAD SCIENCES, INC., a WCB SIXTEEN LIMITED PARTNERSHIP,
Delaware corporation a Delaware limited partnership
By /s/ John C. Martin By: WCB Sixteen, Inc.,
--------------------------------- a Delaware corporation,
Its CEO general partner
-------------------------------
By /s/ Mark L. Perry By /s/ Wallace G. Murfit
--------------------------------- ------------------------------------
Its Vice President Its V.P.
and General Counsel ----------------------------------
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VINTAGE PARK
GILEAD SCIENCES
RESEARCH AND DEVELOPMENT LEASE
INDEX
1. Premises............................................................... 1
2. Term................................................................... 1
3. Rent................................................................... 1
4. Taxes and Operating Expenses........................................... 3
5. Other Taxes............................................................ 5
6. Use.................................................................... 6
7. Utilities.............................................................. 7
8. Maintenance, Repairs and Alterations................................... 7
9. Insurance and Indemnity................................................ 9
10. Damage or Destruction.................................................. 10
11. Eminent Domain......................................................... 11
12. Assignment and Subletting.............................................. 11
13. Default by Tenant...................................................... 14
14. Default by Landlord.................................................... 16
15. Security Deposit....................................................... 16
16. Estoppel Certificate................................................... 16
17. Subordination.......................................................... 16
18. Attorneys' Fees........................................................ 17
19. Notices................................................................ 17
20. Options to Extend Term................................................. 17
21. Rights of First Offer.................................................. 19
22. Parking................................................................ 20
23. Personal Property...................................................... 20
24. Signs.................................................................. 20
25. General Provisions..................................................... 20
26. Exhibits............................................................... 22
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GILEAD SCIENCES
RESEARCH AND DEVELOPMENT
LEASE
--------------------------------------------
THIS LEASE, dated June 24, 1996, for purposes of reference only,
is made and entered into by and between WCB SIXTEEN LIMITED PARTNERSHIP, a
Delaware limited partnership ("Landlord"), and GILEAD SCIENCES, INC., a Delaware
corporation ("Tenant").
WITNESSETH
1. PREMISES. Landlord hereby leases to Tenant, and Tenant hereby
leases from Landlord for the term of this Lease and at the rental and upon the
conditions set forth below, the premises described in the Basic Lease
Information and identified on the floor plan attached hereto as Exhibit A.
Tenant shall accept the premises in its "as-is" condition at the commencement of
the term. Landlord shall use commercially reasonable efforts to enforce any
warranty rights it may have against any contractor or manufacturer with regard
to any defects in workmanship or materials in connection with the premises and
any tenant improvements installed therein by Landlord. The premises are located
within the building (the "Building") commonly known as described in the Basic
Lease Information. Notwithstanding the foregoing, Landlord shall be responsible
at its sole cost and expense for any improvements or modifications to all
exterior areas on the parcel on which the Building is located which are required
to be made pursuant to the Americans with Disabilities Act (42 U.S.C. Sections
12101-12213).
2. TERM.
The term of this Lease shall commence on the date described in
this paragraph 2 and, unless sooner terminated as hereinafter provided, shall
end on the date specified in the Basic Lease Information. The premises are
currently occupied by Nortel who has agreed with Landlord to vacate and deliver
the premises to Tenant on or before August 1, 1996. Landlord at its expense
shall exercise due diligence in order to be able to deliver possession of the
premises to Tenant by August 1, 1996 and, if Landlord is unable to cause
possession of the premises to be delivered to Tenant by August 1, 1996, this
Lease shall not be void or voidable, nor shall Landlord be liable to Tenant for
any loss or damage resulting therefrom, but the commencement date shall be
postponed until the premises shall be delivered to Tenant. No delay in delivery
of possession shall operate to extend the term.
3. RENT.
(a) Tenant shall pay to Landlord as rental the amount specified
in the Basic Lease Information as the Base Rent, payable in advance on the
commencement of the term and on or before the first day of each and every
successive calendar month during the term.
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If the term commences on other than the first day of a calendar month, the first
payment of rent shall be appropriately prorated on the basis of a 30-day month.
(b) Tenant shall pay, as additional rent, all amounts of money
required to be paid to Landlord by Tenant hereunder in addition to monthly rent,
whether or not the same be designated "additional rent." If such amounts are not
paid at the time provided in this Lease, they shall nevertheless be a
collectable as additional rent With the next installment of monthly rent
thereafter falling due, but nothing herein contained shall be deemed to suspend
or delay the payment of any amount of money at the time the same becomes due and
payable hereunder, or limit any other remedy of Landlord.
(c) Tenant hereby acknowledges that late payment by Tenant to
Landlord of rent and other amounts due hereunder after the expiration of any
applicable grace period will cause Landlord to incur costs not contemplated by
this Lease, the exact amount of which will be extremely difficult to ascertain.
Such costs include, but are not limited to, processing and accounting charges,
and late charges which may be imposed on Landlord by the terms of any trust deed
covering the premises. Accordingly, if any installment of rent or any other
sums due from Tenant shall not be received by Landlord for a period of ten days
after notice by Landlord the same is due, which ten day notice period shall
include any other notice period provided Tenant under California law (provided
that if Tenant has failed one or more times in the prior 12-month period to pay
any rent or other sum when due, no grace period shall be applicable hereunder),
Tenant shall pay to Landlord a late charge equal to 6% of such overdue amount.
The parties hereby agree that such late charge represents a fair and reasonable
estimate of the costs Landlord will incur by reason of late payment by Tenant.
Acceptance of such late charge by Landlord shall in no event constitute a waiver
of Tenant's default with respect to such overdue amount, nor prevent Landlord
from exercising any of the other rights and remedies granted hereunder.
(d) Any amount due to Landlord, if not paid for a period of ten
days after notice by Landlord the same is due, Which ten day notice period shall
include any other notice period provided Tenant under California law (provided
that if Tenant has failed one or more times in the prior 12-month period to pay
any rent or other sum when due, no grace period shall be applicable hereunder)
shall bear interest from the date due until paid at the rate of 10% per annum
or, if a higher rate is legally permissible, at the highest rate legally
permitted, provided that interest shall not be payable on late charges incurred
by Tenant nor on any amounts upon which late charges are paid by Tenant to the
extent such interest would cause the total interest to be in excess of that
legally permitted. Payment of interest shall not excuse or cure any default
hereunder by Tenant.
(e) All payments due from Tenant to Landlord hereunder shall be
made to Landlord without deduction or offset in lawful money of the United
States of America at Landlord's address for notices hereunder, or to such other
person or at such other place as Landlord may from time to time designate in
writing to Tenant.
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4. TAXES AND OPERATING EXPENSES.
(a) This Lease is a net lease and Base Rent and additional rent
shall be paid to and received by Landlord net of all costs and expenses to
Landlord other than taxes upon the income of Landlord from all sources. Tenant
shall pay its percentage share, as specified in the Basic Lease Information, of
all Property Taxes assessed in respect of the Building during the term, and its
percentage share of all Operating Expenses paid or incurred by Landlord during
the term. For the purposes hereof, "Property Taxes" shall mean all real
property taxes and assessments or governmentally imposed fees or charges (and
any tax or fee levied wholly or partly in lieu thereof) levied, assessed,
confirmed, imposed, or which have become a lien against the Building (which for
the purposes of defining "Property Taxes" shall include the land underlying the
Building) or payable during the term. For the purposes hereof, "Operating
Expenses" shall mean all expenses and costs of every kind and nature which
Landlord shall pay or become obligated to pay because of or in connection with
the ownership and operation of the Building and surrounding property and
supporting facilities, including, without limitation: (1) all costs of
operation, maintenance and repair of the Building, (2) the cost of all insurance
maintained by Landlord with respect to the Building, and (3) the share allocable
to the Building of dues and assessments payable under any reciprocal easement or
common area maintenance agreements or declarations or to any owners'
associations affecting the Building. Landlord shall not collect in excess of
one hundred percent (100%) of all of Landlord's Operating Expenses and Landlord
shall not recover, through Operating Expenses, any item of cost more than once.
Operating Expenses for each calendar year shall be adjusted to equal Landlord's
reasonable estimate of Operating Expenses had the total rentable area of the
Building been occupied.
(b) In the event the Building is not separately assessed for
tax purposes, then the Property Taxes to be paid by Tenant shall be Tenant's
percentage share of the product obtained by multiplying the total of the real
property taxes and assessments levied against the tax parcel of which the
Building is a part by a fraction the numerator of which is the rentable area of
the Building and the denominator of which is total rentable area of all
improvements located within the tax parcel of which the Building is a part.
(c) Tenant shall pay to Landlord each month at the same time
and in the same manner as monthly rent Tenant's percentage share of 1/12th of
Landlord's estimate of Property Taxes and Operating Expenses for the then
current calendar year, which for the calendar year for term commencement as set
forth in the Basic Lease Information shall be the monthly amount specified
therein. Within 90 days after the close of each calendar year, or as soon after
such 90-day period as practicable, Landlord shall deliver to Tenant a statement
of actual Property Taxes and Operating Expenses for such calendar year. If on
the basis of such statement Tenant owes an amount that is less than the
estimated payments for such calendar year previously made by Tenant, Landlord
shall refund such excess to Tenant. If on the basis of such statement Tenant
owes an amount that is more than the estimated payments for such calendar year
previously made by Tenant, Tenant shall pay the deficiency to Landlord within 30
days after delivery of the statement. The obligations of Landlord and Tenant
under this subparagraph with respect to the reconciliation between estimated
payments and actual Property Taxes and Operating Expenses for the last year of
the term
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shall survive the termination of the Lease. Tenant shall have the right, upon
reasonable prior notice given within 90 days following the delivery of
Landlord's statement to Tenant, to audit Landlord's records as such pertain to
the calculation of Operating Expenses and Property Taxes during the period
covered by Landlord's statement.
(d) Notwithstanding anything in the foregoing to the contrary,
Operating Expenses shall not include the following:
(i) leasing commissions, attorneys' fees, costs,
disbursements, and other expenses incurred in connection with
negotiations or leasing, renovating, or improving space for tenants or
other occupants or prospective tenants or other occupants of the
Building;
(ii) costs, including those for permits, licenses and
inspection fees incurred in renovating or otherwise improving or
decorating, painting or redecorating vacant space or space for other
tenants or occupants of the Building;
(iii) Landlord's cost of any service sold to any tenant
or other occupant for which Landlord is entitled to be reimbursed as an
additional charge or rental over and above the basic rent and escalations
payable under the lease with that tenant or other occupant;
(iv) costs incurred by Landlord for alterations or
additions that are considered capital improvements and replacements under
generally accepted accounting principles, except for the cost or portion
thereof properly allocable to the premises of any capital improvements
made to the Building by Landlord after the date of this Lease that
reduces other Operating Expenses or are required for the health and
safety of tenants, or made to the Building by Landlord after the date of
this Lease that are required under any governmental law or regulation
that Was not applicable to the Building at the time it was constructed
(except for any required improvements associated with the Americans with
Disabilities Act pursuant to paragraph 1), such cost or allocable portion
thereof to be amortized over such reasonable period as Landlord shall
determine together with interest on the unamortized balance at the rate
of 10% per annum or such higher rate as may have been paid by Landlord on
funds borrowed for the purpose of constructing such capital improvements;
(v) any depreciation and amortization on the Building;
(vi) expenses in connection with services or other
benefits of a type that are not provided Tenant but which are provided
another tenant or occupant in the Building;
(vii) management fees in excess of 5% of gross rentals
from the Building paid to Landlord's subsidiaries or affiliates for
management or other services on or to the Building or for supplies or
other materials to the extent that the costs of the services, supplies,
or materials exceed the cost that would have been paid had the
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services, supplies or materials been provided by unaffiliated parties on
a competitive basis;
(viii) interest on debt or amortization payments, or
increases in interest or debt under any mortgages and rental under any
ground or underlying lease or changes in deeds of trust or other debt for
borrowed money;
(ix) any compensation paid to clerks, attendants, or
other persons in commercial concessions operated by Landlord;
(x) rental or other expenses incurred in leasing air
conditioning systems, elevators, or other equipment ordinarily considered
to be of a capital nature except equipment used in providing janitorial
services, when such equipment is not affixed to the Building;
(xi) all items and services for which Tenant reimburses
Landlord or pays third persons or which Landlord provides selectively to
one or more tenants without reimbursement;
(xii) advertising and promotional expenditures;
(xiii) repairs and other work occasioned by fire,
windstorm or other casualty of an insurable nature paid from insurance or
condemnation proceeds;
(xiv) Landlord's cost of electricity and other services
that are sold to any tenant, including Tenant, and for which Landlord is
reimbursed as an additional charge, over and above the basic rent and any
increases payable under the lease with any such tenant;
(xv) acquisition costs for sculpture, paintings or
other objects of art;
(xvi) wages, salaries or other compensation paid to any
executive employees above the grade of property manager;
(xvii) the cost of correcting any code violations which
were violations prior to the commencement of the term of the Lease; and
(xviii) all costs of remedying any contamination by
hazardous Materials (as defined in paragraph 6 below) of the Building,
the underlying land and the surrounding area, unless such materials are
discharged on or from the Building by Tenant, its agents, subtenants,
contractors or assigns.
5. OTHER TAXES. Tenant shall pay or reimburse Landlord for (i) any
taxes upon, measured by or reasonably attributable to the cost or value of
Tenant's equipment, furniture, fixtures, and other personal property located in
the premises or leasehold improvements made in or to the premises at Tenant's
expense, (ii) any taxes, assessments, fees, or charges
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imposed by any public authority or private community maintenance association
upon or by reason of the development, possession, use or occupancy of the
premises or the parking facilities used by Tenant in connection with the
premises, and (iii) any gross receipts tax imposed with respect to the rental
payable hereunder.
6. USE.
(a) The premises shall be used and occupied by Tenant solely
for general office, chemistry laboratory, biology laboratory, animal testing
facility, and pilot manufacturing of pharmaceuticals and for no other purposes
without the prior consent of Landlord, which consent shall not unreasonably be
withheld with respect to proposed uses which are not inconsistent with those
then-existing within the Vintage Park Project. Tenant shall, at Tenant's
expense, comply promptly with all applicable statutes, ordinances, rules,
regulations, orders, and requirements in effect during the term regulating
Tenant's activities or the use by Tenant of the premises. Tenant shall not use
or permit the use of the premises in any manner that will tend to create waste
or a nuisance, which shall tend unreasonably to disturb other tenants of the
Building, or which shall violate the terms of any recorded restrictions
affecting the Building, nor shall Tenant place or maintain any signs on or
visible from the exterior of the premises without Landlord's written consent, or
use any corridors, sidewalks, or other areas outside of the premises for storage
or any purpose other than access to the premises. Subject to the provisions of
paragraph 6(b) below, Tenant shall not use, keep, or permit to be used or kept
on the premises any foul or noxious gas or substance or any hazardous or toxic
material, nor shall Tenant do or permit to be done anything in and about the
premises, either in connection with activities hereunder expressly permitted or
otherwise, which would cause a cancellation of any policy of insurance
maintained by Landlord in connection with the premises or the Building or which
would violate the terms of any covenants, conditions, or restrictions affecting
the Building or the land on which it is located.
(b) Tenant may use, generate, store and dispose of any
hazardous, toxic, or radioactive materials (collectively "Hazardous Materials"),
but Landlord may prohibit Tenant's use, generation, storage or disposal of any
Hazardous Materials at any time provided that the Landlord shall have reasonable
justification for such prohibition taking into consideration the uses in
comparable business parks which permit bio-technology or pharmaceutical uses.
In this event, Tenant shall cease to use such Hazardous Materials within fifteen
(15) days after receipt of written notice by Landlord specifying the grounds for
such prohibition. Tenant shall endeavor to give Landlord prior notice of the
use, generation, storage or disposal of such materials and shall in any event
provide such notice not later than 30 days following commencement of such use,
generation, storage or disposal. Tenant shall strictly comply with all
statutes, laws, ordinances, rules, regulations, and precautions now or hereafter
mandated or advised by any federal, state, local or other governmental agency
with respect to the use, generation, storage, or disposal of Hazardous
Materials. As herein used, Hazardous Materials shall include, but not be
limited to, those materials identified in Sections 66680 through 66685 of Title
22 of the California Administrative Code, Division 4, Chapter 30, as amended
from time to time, and those substances defined as "hazardous substances,"
"hazardous materials," "hazardous wastes," or other similar designations in the
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Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, 42 U.S.C. Section 9601 et seq., the Resource Conservation and Recovery
Act, 42 U.S.C. Section 6901 et seq., the Hazardous Materials Transportation Act,
49 U.S.C. Section 1801 et seq. and any other applicable governmental statutes,
laws, ordinances, rules, regulations, and precautions. Tenant shall provide
Landlord a complete and accurate list of all Hazardous Materials used,
generated, stored, or disposed of on or about the premises or the Building at
any time within ten days of a request by Landlord for such list, provided such
request does not occur more than one time in any 12-month period, except if an
extraordinary event occurs (i.e., sale or refinancing of the Building). Tenant
shall also provide Landlord with copies of any Business Plans or other permanent
application for the use of Hazardous Materials that Tenant has submitted, or
will submit, to any governmental agencies as well as copies of any notices to
Tenant from governmental agencies with respect to Hazardous Materials. In
addition to Landlord's other inspection rights, Tenant shall permit Landlord to
enter upon the premises at reasonable times, accompanied by an employee of
Tenant, to determine the existence and means of use, storage and disposal by
Tenant of Hazardous Materials. Landlord's right of inspection shall be subject
to compliance with applicable government secrecy and Tenant's reasonable
security requirements and Landlord shall maintain any trade secrets it obtains
in the course of such inspections in strict confidence and shall not disclose
such information except as may be required by law.
7. UTILITIES.
(a) Tenant shall pay for all water, sewer, gas, electricity,
heat, cooling energy, telephone, refuse collection, and other utility-type
services furnished to Tenant or the premises, together with all related
installation or connection charges or deposits. Wherever it is practical to do
so such services shall be separately metered or charged to Tenant by the
provider thereof and paid for directly by Tenant. If, in Landlord's reasonable
judgment, Tenant's use of water in any portion of the premises located in a
multi-tenant building, is extraordinary, Landlord may install a meter to measure
Tenant's water consumption, and Tenant shall reimburse Landlord for the cost of
such meter within 30 days of Landlord's request. To the extent any of the
foregoing services are provided by Landlord, Tenant shall reimburse Landlord for
all costs incurred by Landlord in connection with the proVision of such services
based on Landlord's reasonable estimate of the level of Tenant's use or
consumption of such services. Landlord shall bill Tenant on a monthly or other
periodic basis for such services and payment shall be made by Tenant within 10
days after submittal of Landlord's statement.
(b) Landlord shall not be in default hereunder or be liable for
any damages directly or indirectly resulting therefrom, and there shall not be
any rent abatement, by reason of any interruption or curtailment whatsoever in
utility services.
8. MAINTENANCE, REPAIRS AND ALTERATIONS.
(a) Subject to the provisions of paragraph 10 below, and except
for damages caused by Tenant, its agents or invitees, Landlord shall keep in
good condition and
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repair the foundations and exterior walls and roof of the Building and all
common areas within the Building not leased to tenants.
(b) Tenant shall, at Tenant's expense, maintain the interior
portion of the premises (including, but not limited to, all plumbing and
electrical connections, outlets and lightbulbs) and any exterior glass or
skylights in good condition and repair. If Tenant fails to do so Landlord may,
but shall not be required to, enter the premises and put them in good condition,
and Landlord's costs thereof shall automatically become due and payable as
additional rent. Tenant shall be responsible for the provision, at its own
expense, of appropriate janitorial service for the premises. Tenant shall also
cause to be maintained, at its expense and in good operating condition and
repair, all heat, ventilating, and air conditioning equipment installed in the
premises. If Landlord so elects, by notice to Tenant following Landlord's
determination that Tenant has not itself maintained such heating, ventilating
and air conditioning equipment in good operating condition and repair, Tenant
shall retain the services of Landlord or a maintenance company retained by it to
perform maintenance of Tenant's heating, ventilating and air conditioning
equipment and shall reimburse Landlord for the cost thereof upon demand. At the
expiration of the term Tenant shall deliver up possession of the premises in
good condition and repair, only ordinary wear and tear excepted; and subject to
Tenant's rights under the damage and destruction provisions of paragraph 10 and
the condemnation provisions of paragraph 11 below.
(c) Tenant shall not, without Landlord's prior consent, make
any alterations, improvements, or additions in or about the premises with a cost
individually or in the aggregate as to each project in excess of $25,000, or
involving any structural changes. In requesting Landlord's consent, Tenant
shall submit to Landlord complete drawings and specifications describing such
work and the identity of the proposed contractor. Landlord shall not
unreasonably withhold its consent to proposed alterations or improvements which
are consistent with the quality and design of office and laboratory improvements
previously constructed by Tenant within the premises including structural
modifications necessary for any additional roof-mounted HVAC systems, exterior
slabs for equipment required to be located on the exterior of the Building, and
alterations and improvements necessary for the construction of animal testing
facilities or otherwise reasonably related to the uses permitted under this
Lease. Before commencing any work relating to alterations, additions, or
improvements affecting the premises, Tenant shall notify Landlord of the
expected date of commencement thereof and of the anticipated cost thereof, and
shall furnish such information as shall reasonably be requested by Landlord
substantiating Tenant's ability to pay for such work. Landlord shall then have
the right at any time and from time to time to post and maintain on the premises
Such notices as Landlord reasonably deems necessary to protect the premises and
Landlord from mechanics' liens or any other liens. In any event, Tenant shall
pay when due all claims for labor or materials furnished to or for Tenant at or
for use in the premises. Tenant shall not permit any mechanics' liens to be
levied against the premises or the Building for any labor or materials furnished
to Tenant or to Tenant's agents or contractors in connection with work of any
character performed or claimed to have been performed on the premises by or at
the direction of Tenant, and if such liens are levied, Tenant shall cause them
to be removed by bonding or otherwise within five days of the date any such lien
is filed. All alterations, improvements, or additions in or about the premises
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performed by or on behalf of Tenant shall be done in a first-class, workmanlike
manner and in compliance with all applicable laws, ordinances, regulations, and
orders of any governmental authority having jurisdiction thereover, as well as
the requirements of insurers of the premises and the Building. Upon Landlord's
request, Tenant shall remove any contractor, subcontractor, or material supplier
from the premises and the Building if the work or presence of such person or
entity results in labor disputes in or about the Building, or damage to the
premises or Building. All alterations, improvements, or additions which may be
made on the premises shall become the property of Landlord and remain upon and
be surrendered with the premises at the termination or expiration of the term;
provided, however, that Tenant's machinery, equipment, and trade fixtures, other
than any which may be affixed to the premises so that they cannot be removed
without material damage to the premises, shall remain the property of Tenant and
shall be removed by Tenant at the expiration or earlier termination of the term.
9. INSURANCE AND INDEMNITY.
(a) Tenant shall obtain and maintain during the term of this
Lease general liability insurance on an occurrence basis with a combined single
limit for personal injury and property damage in a form and with carriers
acceptable to Landlord and an amount not less than $1,000,000, and employer's
liability and workers' compensation insurance as required by law. Tenant's
comprehensive general liability insurance policy shall be endorsed to provide
that (i) it may not be cancelled or altered in such a manner as adversely to
affect the coverage afforded thereby without 30 days' prior written notice to
Landlord, (ii) Landlord is named as additional insured, (iii) the insurer
acknowledges acceptance of the mutual waiver of claims by Landlord and Tenant
pursuant to subparagraph (b) below, and (iv) such insurance is primary with
respect to Landlord and that any other insurance maintained by Landlord is
excess and noncontributing with such insurance. If, in the opinion of
Landlord's insurance adviser, based on a substantial increase in recovered
liability claims generally, the specified amounts of coverage are no longer
adequate, such coverage shall be appropriately increased. Prior to the
commencement of the term, Tenant shall deliver to Landlord a duplicate of such
policy or a certificate thereof to Landlord for retention by it, with
endorsements, and at least 30 days prior to the expiration of such policy or any
renewal thereof, Tenant shall deliver to Landlord a replacement or renewal
binder, followed by a duplicate policy or certificate within a reasonable time
thereafter. If Tenant fails to obtain such insurance or to furnish Landlord any
such duplicate policy or certificate as herein required, Landlord may, at its
election, upon five days' prior notice to Tenant but without any obligation to
do so, procure and maintain such coverage and Tenant shall reimburse Landlord on
demand as additional rent for any premium so paid by Landlord.
(b) Landlord shall obtain and maintain during the term of this
Lease insurance against such casualties, with such limits and deductibles and in
such forms as are then being maintained from time to time by the owners of
buildings similar to the Building in the San Francisco Bay Area.
(c) Landlord hereby waives all claims against Tenant, and
Tenant's officers, directors, partners, employees, agents and representatives
for loss or damage to the
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extent that such loss or damage is insured against under any valid and
collectable insurance policy insuring Landlord or would have been insured
against but for any deductible amount under any such policy, and Tenant waives
all claims against Landlord including Landlord's officers, directors, partners,
employees, agents, and representatives for loss or damage to the extent such
loss or damage is insured against under any valid and collectable insurance
policy insuring Tenant or required to be maintained by Tenant under this Lease,
or would have been insured against but for any deductible amount under any such
policy.
(d) As this Lease does not involve the public interest and
insurance is available to Tenant which will protect it against such claims,
damage, injury or death, Tenant hereby waives all claims against Landlord for
damage to any property or injury to or death of any person in, upon or about the
premises or the Building arising at any time and from any cause. Tenant shall
hold Landlord harmless from and defend Landlord against all claims (except those
arising from the negligence or willful misconduct of Landlord, its agents,
employees or contractors) (i) for damage to any property or injury to or death
of any person arising from the use of the premises by Tenant, or (ii) arising
from the negligence or willful misconduct of Tenant, its employees, agents, or
contractors in, upon or about those portions of the Building other than the
premises. The foregoing indemnity obligation of Tenant shall include reasonable
attorneys' fees, investigation costs, and all other reasonable costs and
expenses incurred by Landlord from the first notice that any claim or demand is
to be made or may be made. The provisions of this paragraph 9 shall survive the
termination of this Lease with respect to any damage, injury, or death occurring
prior to such termination.
10. DAMAGE OR DESTRUCTION.
(a) If during the term the premises are totally or partially
destroyed, or any other portion of the Building is damaged in such a way that
Tenant's use of the premises is materially interfered with, then, subject to the
provisions below, this Lease shall remain in full force and effect unless and
until Landlord gives notice to Tenant that Landlord intends to demolish the
Building and not to reconstruct it. Landlord shall give notice of its intention
to Tenant as soon as reasonably practicable following the event of damage or
destruction and, if Landlord elects to reconstruct or repair the damage or
destruction it shall do so with reasonable diligence. Notwithstanding the
foregoing, if Landlord elects to reconstruct the Building but, in the opinion of
the Landlord's architect, the work of repair cannot be completed within 270
days, Tenant may at its election, by notice to Landlord given within 30 days of
Landlord's notice to Tenant concerning such architect's determination, terminate
this Lease.
(b) In case of destruction or damage which materially
interferes with Tenant's use of the premises, if this Lease is not terminated as
above provided, rent shall be abated during the period required for the work of
repair based upon the degree of interference with Tenant's use of the premises.
Except for abatement of rent, Tenant shall have no claim against Landlord for
any loss suffered by Tenant due to damage or destruction of the premises or any
work of repair undertaken as herein provided. The provisions of this paragraph
10 shall supersede any provisions of Section 1932 and Section 1933(4) of the
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California Civil Code (which might permit Tenant to terminate the Lease or
withhold rent) to the contrary.
11. EMINENT DOMAIN. If all or any part of the premises shall be taken
as a result of the exercise of the power of eminent domain or sold by Landlord
under threat of the exercise of such power, this Lease shall terminate as to the
part so taken as of the date of taking or sale, and, in the case of a partial
taking, either Landlord or Tenant shall have the right to terminate this Lease
as to the balance of the premises by notice to the other within 30 days after
such date if the portion of the premises taken shall be of such extent and
nature as substantially to handicap, impede or impair Tenant's use of the
balance of the premises for Tenant's purposes. In the event of any taking or
such sale, Landlord shall be entitled to any and all compensation, damages,
income, rent, awards, or any interest therein whatsoever which may be paid or
made in connection therewith, and Tenant shall have no claim against Landlord
for the value of any unexpired term of this Lease or otherwise. In the event of
a partial taking or sale of the premises which does not result in a termination
of this Lease, the monthly rental thereafter to be paid shall be equitably
reduced on a square footage basis. Notwithstanding the foregoing, Tenant shall
have the right separately to claim and prove for recovery of moving expenses and
the value of its trade fixtures, equipment, and moveable furniture so taken.
12. ASSIGNMENT AND SUBLETTING.
(a) Tenant shall not assign this Lease or any interest herein
or sublet the premises or any part thereof without the prior consent of
Landlord, which consent shall not be unreasonably withheld; Tenant shall not
hypothecate this Lease or any interest herein or permit the use of the premises
by any party other than Tenant without the prior consent of Landlord, which
consent may be withheld by Landlord in its absolute discretion. This Lease
shall not, nor shall any interest herein, be assignable as to the interest of
Tenant by operation of law without the consent of Landlord. Any of the
foregoing acts without such consent shall be void and shall, at the option of
Landlord, terminate this Lease. In connection with each consent requested by
Tenant, Tenant shall submit to Landlord the terms of the proposed transaction,
the identity of the parties to the transaction, the proposed documentation for
the transaction, current financial statements of any proposed assignee or
sublessee and all other information reasonably requested by Landlord concerning
the proposed transaction and the parties involved therein.
(b) Without limiting the other instances in which it may be
reasonable for Landlord to withhold its consent to an assignment or subletting,
Landlord and Tenant acknowledge that it shall be reasonable for Landlord to
withhold its consent in the following instances:
(1) if the proposed assignee or sublessee is a
governmental agency;
(2) if, in Landlord's reasonable judgment, the use of
the premises by the proposed assignee or sublessee would entail any alterations
which would lessen the
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value of the leasehold improvements in the premises, or would require increased
services by Landlord;
(3) if, in Landlord's reasonable judgment, the
financial worth of the proposed assignee or sublessee does not meet the credit
standards applied by Landlord for other tenants under leases with comparable
terms, or the character, reputation or business of the proposed assignee or
sublessee is not consistent with the quality of the other tenancies in the
Building;
(4) in the case of a subletting of less than the
entire premises, if the subletting would result in the division of the premises
into any subparcel smaller than 6,000 square feet in rentable area, would create
a subparcel of a configuration that is not suitable for normal leasing purposes,
or would require access to be provided through space leased or held for lease to
another tenant or improvements to be made outside of the premises; or
(5) if at the time consent is requested or at any time
prior to the granting of consent, Tenant is in default under the Lease and any
applicable grace or cure period has expired.
(c) If at any time or from time to time during the term of this
Lease Tenant desires to sublet all or any part of the premises, Tenant shall
give notice to Landlord setting forth the terms of the proposed subletting and
the space so proposed to be sublet. Landlord shall have the option, exercisable
by notice given to Tenant within 20 days after Tenant's notice is given, either
to sublet from Tenant such space at the rental and other terms set forth in
Tenant's notice, or, if the proposed subletting is for the entire premises for a
sublet term ending within the last year of the term of this Lease, to terminate
this Lease. If Landlord does not exercise such option, Tenant shall be free to
sublet such space to any third party on the same terms set forth in the notice
given to Landlord, subject to obtaining Landlord's prior consent as hereinabove
provided. For purposes of this paragraph (c), the term "sublet" or "subletting"
shall not include, and Landlord shall not be entitled to any payment under
paragraph (g) below, as a result of a subletting to an entity controlled by,
controlling, or under common control with, Tenant.
(d) As used in this paragraph 12, the term "assign" or
"assignment" shall include, without limitation, any sale, transfer, or other
disposition of all or any portion of Tenant's estate under this Lease, whether
voluntary or involuntary, and whether by operation of law or otherwise including
any of the following:
(1) If Tenant is a corporation: (i) any dissolution,
merger, consolidation, or other reorganization of Tenant or (ii) a sale of more
than 50% of the value of the assets of Tenant or (iii) if Tenant is a
corporation with fewer than 500 shareholders, sale or other transfer of a
controlling percentage of the capital stock of Tenant. The phrase "controlling
percentage" means the ownership of, and the right to vote, stocks possessing at
least 50% of the total combined voting power of all classes of Tenant's stock
issues, outstanding and permitted to vote for the election of directors;
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(2) If Tenant is a trust the transfer of more than 50%
of the beneficial interest of Tenant, or the dissolution of the trust;
(3) If Tenant is a partnership or joint venture, the
withdrawal, or the transfer of the interest of any general partner or joint
venturer or the dissolution of the partnership or joint venture;
(4) If Tenant is composed of tenants-in-common, the
transfer of interest of any co-tenants or the partition or dissolution of the
co-tenancy.
Notwithstanding anything to the contrary in subparagraphs (1)
through (4) of this paragraph 12(d), the term "assigned" or "assignment" shall
not include, and Landlord shall not be entitled to any payment under paragraph
(f) below as a result of, a joint venture between Tenant and any other party, or
the merger with or acquisition of Tenant by another entity, including, but not
limited to, an entity controlled by, controlling, or under common control with,
Tenant. In the event that Tenant's shares become publicly traded, all the
restrictions listed in this paragraph (d) shall cease.
(e) No sublessee (other than Landlord if it exercises its
option pursuant to subparagraph (c) above) shall have a right further to sublet,
and any assignment by a sublessee of its sublease shall be subject to Landlord's
prior consent in the same manner as if Tenant were entering into a new sublease.
(f) In the case of an assignment, one-half of any sums or other
economic consideration received by Tenant as a result of such assignment shall
be paid to Landlord after first deducting the unamortized cost of leasehold
improvements paid for by Tenant, the cost of any real estate commissions
incurred in connection with such assignment and any amounts received by Tenant
as reimbursement for the cost of utilities paid by Tenant. In the event such
consideration is received by Tenant in installments, the portion of each
installment to be paid to Landlord shall be determined by multiplying the
installment by a fraction, the numerator of which is the total amount of the
foregoing permitted deductions and the denominator of which is the total
consideration receivable by Tenant as a result of such assignment.
(g) In the case of a subletting, one-half of any sums or
economic consideration received by Tenant as a result of such subletting shall
be paid to Landlord after first deducting (i) the rental due hereunder, prorated
to reflect only rental allocable to the sublet portion of the premises, (ii) the
cost of leasehold improvements made to the sublet portion of the premises at
Tenant's cost, amortized over the term of this Lease except for leasehold
improvements made for the specific benefit of the sublessee, which shall be
amortized over the term of the sublease, (iii) the cost of any real estate
commissions incurred in connection with such subletting, amortized over the term
of the sublease, and (iv) amounts payable by Tenant for Operating Expenses and
Property Taxes.
(h) Regardless of Landlord's consent, no subletting or
assignment shall release Tenant of Tenant's obligation or alter the primary
liability of Tenant to pay the rental
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and to perform all other obligations to be performed by Tenant hereunder. The
acceptance of rental by Landlord from any other person shall not be deemed to be
a waiver by Landlord of any provision hereof. Consent to one assignment or
subletting shall not be deemed consent to any subsequent assignment or
subletting. In the event of default by any assignee of Tenant or any successor
of Tenant in the performance of any of the terms hereof, Landlord may proceed
directly against Tenant without the necessity of exhausting remedies against
such assignee or successor. Landlord may consent to subsequent assignments or
subletting of this Lease or amendments or modifications to this Lease with
assignees of Tenant, without notifying Tenant, or any successor of Tenant, and
without obtaining its or their consent thereto and such action shall not relieve
Tenant of liability under this Lease.
(i) In the event Tenant shall assign or sublet the premises or
request the consent of Landlord to any assignment or subletting or if Tenant
shall request the consent of Landlord for any act that Tenant proposes to do,
then Tenant shall pay Landlord's reasonable attorneys' fees incurred in
connection therewith, not to exceed $500 in connection with each such request.
13. DEFAULT BY TENANT.
(a) The following events shall constitute "Events of Default"
under this Lease:
(1) a default by Tenant in the payment of any rent or
other sum payable hereunder for a period of 10 days after notice by Landlord
that the same is due, provided that if Tenant has failed one or more times in
any twelve-month period to pay any rent or other sum within 10 days after the
due date, no grace period shall thereafter be applicable hereunder (such 10-day
notice period shall include any other notice period provided Tenant under
California law);
(2) a default by Tenant in the performance of any of
the other terms, covenants, agreements, or conditions contained herein and, if
the default is curable, the continuation of such default for a period of 15 days
after notice by Landlord or beyond the time reasonably necessary for cure if the
default is of the nature to require more than 15 days to remedy, provided that
if Tenant has defaulted in the performance of the same obligation one or more
times in any twelve-month period and notice of such default has been given by
Landlord in each instance, no cure period shall thereafter be applicable
hereunder;
(3) the bankruptcy or insolvency of Tenant, any
transfer by Tenant in fraud of creditors, assignment by Tenant for the benefit
of creditors, or the commencement of any proceedings of any kind by or against
Tenant under any provision of the Federal Bankruptcy Act or under any other
insolvency, bankruptcy or reorganization act unless, in the event any such
proceedings are involuntary, Tenant is discharged from the same within 60 days
thereafter; the appointment of a receiver for a substantial part of the assets
of Tenant; or the levy upon this Lease or any estate of Tenant hereunder by any
attachment or execution;
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(4) the abandonment of the premises; or
(5) an Event of Default under that certain Vintage
Park Gilead Sciences Research and Development Lease dated March 27, 1992, as
amended, between WCB Seventeen Limited Partnership, as successor to Vintage Park
Associates, as Landlord, and Tenant.
(b) Upon the occurrence of any Event of Default by Tenant
hereunder, Landlord may, at its option and without any further notice or demand,
in addition to any other rights and remedies given hereunder or by law, do any
of the following:
(1) Landlord shall have the right, so long as such
default continues, to give notice of termination to Tenant, and on the date
specified in such notice this Lease shall terminate.
(2) In the event of any such termination of this
Lease, Landlord may then or at any time thereafter, re-enter the premises and
remove therefrom all persons and property and again repossess and enjoy the
premises, without prejudice to any other remedies that Landlord may have by
reason of Tenant's default or of such termination.
(3) In the event of any such termination of this
Lease, and in addition to any other rights and remedies Landlord may have,
Landlord shall have all of the rights and remedies of a landlord provided by
Section 1951.2 of the California Civil Code. The amount of damages which
Landlord may recover in event of such termination shall include, without
limitation, (i) the worth at the time of award (computed by discounting such
amount at the discount rate of the Federal Reserve Bank of San Francisco at the
time of award plus one percent) of the amount by which the unpaid rent for
balance of the term after the time of award exceeds the amount of rental loss
that Tenant proves could be reasonably avoided, (ii) all legal expenses and
other related costs incurred by Landlord following Tenant's default, (iii) all
costs incurred by Landlord in restoring the premises to good order and
condition, or in remodeling, renovating or otherwise preparing the premises for
reletting, and (iv) all costs (including, without limitation, any brokerage
commissions) incurred by Landlord in reletting the premises.
(4) For the purpose of determining the unpaid rent in
the event of a termination of this Lease, or the rent due hereunder in the event
of a reletting of the premises, the monthly rent reserved in this Lease shall be
deemed to be the sum of the rental due under paragraph 3 above and the amounts
last payable by Tenant pursuant to paragraph 4 above.
(5) After terminating this Lease, Landlord may remove
any and all personal property located in the premises and place such property in
a public or private warehouse or elsewhere at the sole cost and expense of
Tenant.
(c) Even though Tenant has breached this Lease and abandoned
the premises, this Lease shall continue in effect for so long as Landlord does
not terminate
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Tenant's right to possession, and Landlord may enforce all its rights and
remedies under this Lease, including the right to recover rental as it becomes
due under this Lease. Acts of maintenance or preservation, efforts to relet the
premises, or the appointment of a receiver upon initiative of Landlord to
protect Landlord's interest under this Lease, shall not constitute a termination
of Tenant's right to possession.
(d) The remedies provided for in this Lease are in addition to
any other remedies available to Landlord at law or in equity, by statute or
otherwise.
14. DEFAULT BY LANDLORD. Landlord shall not be in default unless
Landlord fails to perform obligations required of Landlord hereunder within a
reasonable time, but in no event later than 30 days after notice by Tenant to
Landlord specifying wherein Landlord has failed to perform such obligation;
provided, however, that if the nature of Landlord's obligation is such that more
than 30 days are required for performance, then Landlord shall not be in default
if Landlord commences performance within such 30 day period and thereafter
diligently prosecutes the same to completion.
15. SECURITY DEPOSIT. [Omitted.]
16. ESTOPPEL CERTIFICATE.
(a) Tenant shall at any time upon not more than 10 days' prior
notice from Landlord execute, acknowledge and deliver to Landlord a statement
certifying (i) that this Lease is unmodified and in full force and effect (or,
if modified, stating the nature of such modification and certifying that this
Lease, as so modified, is in full force and effect) (ii) the date to which the
rent, security deposit, and other sums payable hereunder have been paid, (iii)
acknowledging that there are not, to Tenant's knowledge, any uncured defaults on
the part of Landlord hereunder, or specifying such defaults, if any, which are
claimed, and (iv) such other matters as may reasonably be requested by Landlord.
Any such statement may be conclusively relied upon by any prospective purchaser
or encumbrancer of the Building.
(b) Tenant's failure to deliver such statement within such time
shall be conclusive upon Tenant, (i) that this Lease is in full force and
effect, without modification except as may be represented by Landlord, (ii) that
there are no uncured defaults in Landlord's performance, and (iii) that not more
than one month's rent has been paid in advance.
(c) If Landlord desires to finance or refinance the Building,
Tenant agrees to deliver to any lender designated by Landlord such financial
statements of Tenant as may be reasonably required by such lender. All such
financial statements shall be received by Landlord in confidence and shall be
used only for the purposes herein set forth.
17. SUBORDINATION. This Lease, at Landlord's option, shall
subordinate to any ground lease, mortgage, deed of trust, or any other
hypothecation for security now or hereafter placed upon the Building and to any
and all advances made on the security thereof and to all renewals,
modifications, consolidations, replacements and extensions thereof.
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Such subordination shall be conditioned upon Tenant's receipt of an agreement
from the mortgagee, trustee, or ground lessor, as the case may be, confirming
that Tenant's rights under this Lease shall not be disturbed if Tenant is not in
default and pays rent and observes and performs all of the provisions of this
Lease, and such agreement is otherwise in a form which does not materially
diminish Tenant's rights or materially increase Tenant's obligations under this
Lease. In addition, Landlord shall use commercially reasonable good faith
efforts to obtain such nondisturbance agreement from any mortgagee, trustee or
ground lessor with respect to the premises existing at the time of execution of
this Lease as soon as possible following execution. If any mortgagee, trustee,
or ground lessor shall elect to have this Lease prior to the lien of its
mortgage, deed of trust or ground lease, and shall give notice thereof to
Tenant, this Lease shall be deemed prior to such mortgage, deed of trust, or
ground lease, whether this Lease is dated prior to or subsequent to the date of
said mortgage, deed of trust or ground lease or the date of recording thereof.
If any mortgage or deed of trust to which this Lease is subordinate is
foreclosed or a deed in lieu of foreclosure is given to the mortgagee or
beneficiary, Tenant shall attorn to the purchaser at the foreclosure sale or to
the grantee under the deed in lieu of foreclosure; if any ground lease to which
this Lease is subordinate is terminated, Tenant shall attorn to the ground
lessor. Tenant agrees to execute any documents required to effectuate such
subordination or to make this Lease prior to the lien of any mortgage, deed of
trust or ground lease, as the case may be, or to evidence such attornment.
18. ATTORNEYS' FEES. In any legal action brought by one party against
the other under this Lease, the prevailing party shall be entitled to recover
for the fees of its attorneys in such amount as the court may adjudge
reasonable.
19. NOTICES. All notices, consents, demands, and other communications
from one party to the other given pursuant to the terms of this Lease shall be
in writing and shall be deemed to have been fully given when deposited in the
United States mail, certified or registered, postage prepaid, and addressed as
follows: to Tenant at the address specified in the Basic Lease Information or to
such other place as Tenant may from time to time designate in a notice to
Landlord, to Landlord at the address specified in the Basic Lease Information,
or to such other place and with such other copies as Landlord may from time to
time designate in a notice to Tenant; or, in the case of Tenant, delivered to
Tenant at the premises.
20. OPTIONS TO EXTEND TERM.
(a) Tenant shall have two options to extend the term of this
Lease, each for a period of five years (an "Option Period"), with the first
Option Period commencing April 1, 2006, subject to the terms and conditions of
this paragraph 20.
(b) Tenant's notice of exercise shall be given to Landlord not
more than 15 months, nor less than nine months, prior to the expiration of the
initial term, as to the first Option Period, and not more than 15 months nor
less than nine months prior to the expiration of the first Option Period, as to
the second Option Period.
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(c) At the time of exercise of each option to extend, and at
the commencement of the Option Period, this Lease shall be in full force and
effect, Tenant shall not be in default under the Lease and, as to the second
Option Period, Tenant shall have timely exercised its option with respect to the
first Option Period.
(d) Upon the timely exercise of its option with respect to an
Option Period, the Lease shall be extended for the term of the Option Period
upon all the terms and conditions of the Lease; provided, however, that the Base
Rent shall be the then Fair Market Rent for the premises.
(e) If Tenant exercises its option with respect to an Option
Period, Landlord shall give its determination of Fair Market Rent by notice to
Tenant not later than eight months prior to the commencement of the Option
Period. Tenant shall then, within 30 days of the giving of Landlord's notice of
its determination, elect by notice to Landlord either (1) to accept Landlord's
determination as the Fair Market Rent for the Option Period, (2) to have the
Fair Market Rent determined by appraisal, or (3) rescind its exercise of the
option. If Tenant does not timely respond to Landlord's notice of
determination, it shall be deemed to have accepted Landlord's determination. If
Fair Market Rent is to be determined by appraisal, then it shall be so
determined as follows:
(i) Within 30 days after Tenant's notice to Landlord
of its election to have Fair Market Rent determined by appraisal, each
party, at its own cost and by giving notice to the other party, shall
appoint a real estate appraiser, with a membership in the American
Institute of Real Estate Appraisers or the Society of Real Estate
Appraisers and at least five years full-time commercial appraisal
experience in the San Francisco Bay area, to appraise and determine the
Fair Market Rent. If in the time provided, only one party shall give
notice of appointment of an appraiser, the single appraiser appointed
shall determine the Fair Market Rent. If two appraisers are appointed by
the parties, the two appraisers shall independently, and without
consultation, prepare a written appraisal of the Fair Market Rent within
30 days. Each appraiser shall seal its respective appraisal after
completion. After both appraisals are completed, the resulting estimates
of the Fair Market Rent shall be opened and compared. If the value of
the appraisals differ by not more than ten percent (10%) of the value of
the higher appraisal, then the Fair Market Rent shall be the average of
the two appraisals.
(ii) If the values of the appraisals differ by more
than ten percent (10%) of the value of the higher appraisal, the two
appraisers shall designate a third appraiser meeting the qualifications
set forth in subsection (i) above. If the two appraisers have not agreed
on the third appraiser after 10 days, either Landlord or Tenant, by
giving ten (10) days notice to the other party, may apply to the then
Presiding Judge of the Superior Court of San Mateo for the selection of a
third appraiser who meets the qualifications set forth in subsection (i),
above. The third appraiser, however elected, shall be a person who has
not previously acted in any capacity for either party. The third
appraiser shall make an appraisal of the Fair Market Rent within 10 days
after selection and without consultation with the first two
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appraisers. The Fair Market Rent shall be the rent selected by one of
the two appraisers which is closest, on a dollar basis, discounted to
present value, if rental escalations are provided for in any of the
appraisals, to the Fair Market Rent selected by the third appraiser.
(iii) If the determination of the Fair Market Rent is
delayed beyond the Option Period commencement, Tenant shall pay Base Rent
in the amount set forth in Landlord's determination of Fair Market Rent
from the Option Period commencement until the first day of the month
following the determination of the Fair Market Rent. If Landlord does
not deliver Landlord's determination of Fair Market Rent to Tenant,
Tenant shall continue to pay the Base Rent in effect immediately
preceding the Option Period commencement until the first day of the month
following the determination of the Fair Market Rent. On the first day of
the month following the determination of the Fair Market Rent, there
shall be an adjustment made to the Base Rent payment then due for the
difference between the amount of the Base Rent Tenant has paid to
Landlord since the Option Period commencement and the amount that Tenant
would have paid if the Base Rent as adjusted pursuant to this subsection
had been in effect as of the Option Period commencement.
(iv) Each party shall pay the fees and expenses of its
own appraiser, and fifty percent (50%) of the fees and expenses of the
third appraiser.
(v) The appraisers shall determine the Fair Market
Rent using the "market comparisons approach", with the relevant market
being that for similar office and research and development facilities in
the Foster City/San Mateo area at the time of the Option Period
commencement, taking into consideration location, condition of and
improvements to the space, the length of the contemplated lease term and
any rental concessions being granted for similar leases. The
determination of Fair Market Rent shall be based upon the assumption that
the premises does not include improvements made by Tenant which are in
excess of those with a cost of $15 per square foot in 1992, increased in
accordance with the percentage increase in the Engineering News Record
Construction Cost Index (20 cities), from March 1992 through the month
prior to the month in which the determination is made. The appraisers
shall use their best efforts to fairly and reasonably appraise and
determine the Fair Market Rent in accordance with the terms of the Lease
and shall not act as advocates for either Landlord or Tenant. Fair
Market Rent may mean an amount which increases over time by a
pre-determined amount or in accordance with a formula or index.
(vi) The appraisers shall have no power to modify the
provisions of this Lease, and their sole function shall be to determine
the Market Rent in accordance with this paragraph 20.
21. RIGHTS OF FIRST OFFER. Tenant shall have rights of first offer to
lease those spaces located in the Building known as 355 Lakeside Drive
identified as the Penederm
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space on the second floor consisting of approximately 4353 square feet, and the
Entex space on the second floor consisting of approximately 13,018 square feet,
both as identified on EXHIBIT B to this Lease. The Penederm space will become
available on or before May 1, 1998 and the Entex space will become available on
or before October 12, 1998. Tenant acknowledges that such leases may be
terminated prior to the scheduled expiration dates. In any event, approximately
60 days prior to the date either of such spaces becomes available for lease, or
such lesser period as may be applicable due to circumstances not under
Landlord's control, Landlord shall give notice to Tenant of the anticipated date
of availability for lease of such space and the terms under which Landlord
desires to offer such space to Tenant and to the open market. If Tenant desires
to negotiate for the potential addition of such space to the premises, Tenant
shall give notice of such intent within ten business days following Landlord's
notice of availability to Tenant, and Landlord and Tenant shall proceed to
negotiate in good faith for up to 30 days following Tenant's notice regarding
the terms upon which such space may be added to the premises. If Landlord and
Tenant have not reached some other agreement on or before the end of such 30-day
period, then Landlord shall be free thereafter to offer such space to any person
or entity for lease and to enter into leases for such space without further
reference to Tenant; provided that, if Landlord proposes to lease such space to
another person or entity on terms less favorable to Landlord than evidenced by
Landlord's last offer to Tenant in the aforementioned negotiations, then
Landlord shall so notify Tenant and Tenant shall have the right to lease such
space on the same terms and conditions as proposed with such other person or
entity.
22. PARKING. During the term, Tenant shall have the non-exclusive
right to park 3.3 automobiles per 1,000 rentable square feet of space occupied
in the parking area adjacent to the Building.
23. PERSONAL PROPERTY. Landlord acknowledges that Tenant may desire
to obtain additional financing secured by the following items: casework,
benches, fume hoods, modular cold rooms, and glassware washers. Landlord agrees
to execute such documents as may be reasonably requested by any lender providing
such financing and to otherwise cooperate with Tenant in order that such
financing may be obtained. In addition, these items may be removed at the
expiration of the lease term provided Tenant repairs all damage made to the
premises as a result of such removal.
24. SIGNS. Tenant shall have the right, at its expense, to substitute
its name for that of Nortel on any monument and/or on-building signs at 333
Lakeside Drive, subject to the Vintage Park signage program.
25. GENERAL PROVISIONS.
(a) This Lease shall be governed by and construed in accordance
with the laws of the State of California.
(b) The invalidity of any provision of this Lease, as
determined by a court of competent jurisdiction, shall in no way affect the
validity of any other provision hereof.
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(c) This Lease contains all agreements of the parties with
respect to any matter mentioned herein and only may be modified in a writing
executed by the parties.
(d) No waiver by Landlord of any provision hereof shall be
deemed a waiver of any other provision or of any subsequent breach by Tenant of
the same or any other provision. Landlord's consent to or approval of any act
shall not be deemed to render unnecessary the obtaining of Landlord's consent to
or approval of any subsequent act by Tenant. The acceptance of rent hereunder
by Landlord shall not be a waiver of any preceding breach by Tenant of any
provision hereof, other than the failure of Tenant to pay the particular rent
accepted, regardless of Landlord's knowledge of such preceding breach at the
time of acceptance of such rent.
(e) If Tenant remains in possession of the premises or any part
thereof after the expiration of the term with the consent of Landlord, such
occupancy shall be a tenancy from month to month at a rental in the amount of
150% the last month's rental during the term plus all other charges payable
hereunder, and upon all of the terms hereof.
(f) Subject to the provisions of this Lease restricting
assignment or subletting by Tenant, this Lease shall bind the parties, their
personal representatives, successors, and assigns.
(g) Landlord and Landlord's agents shall have the right to
enter the premises at reasonable times for the purpose of inspecting the same,
showing the same to prospective purchasers or lenders, and making such
alterations, repairs, improvements, or additions to the premises or to the
Building as Landlord may deem necessary or desirable. Landlord may at any time
during the last 120 days of the term place on or about the premises any ordinary
"For Lease" sign.
(h) The voluntary or other surrender of this Lease by Tenant,
the mutual cancellation thereof or the termination of this Lease by Landlord as
a result of Tenant's default shall, at the option of Landlord, terminate all or
any existing subtenancies or may, at the option of Landlord, operate as an
assignment to Landlord of any or all of such subtenancies.
(i) If Tenant is a corporation, each individual executing this
Lease on behalf of Tenant represents and warrants that he is duly authorized to
execute and deliver this Lease on behalf of the corporation in accordance with a
duly adopted resolution of the Board of Directors and that this Lease is binding
upon the corporation in accordance with its terms.
(j) The term "Landlord" as used herein means the then owner of
the Building and in the event of a sale of the Building the selling owner shall
be automatically relieved of all obligations of Landlord hereunder, except for
acts or omissions of Landlord theretofore occurring.
-21-
<PAGE>
(k) Tenant covenants for itself, its heirs, executors,
administrators, and assigns, and all persons claiming under or through it, and
this Lease is made and accepted upon it subject to the condition that there
shall be no discrimination against or segregation of any person or group of
persons, on account of race, color, creed, religion, sex, marital status,
national origin, or ancestry in the leasing, subleasing, transferring, use
occupancy, tenure, or enjoyment of the premises herein leased nor shall the
Tenant itself, or any person claiming under or through it, establish or permit
any such practice or practices of discrimination or segregation with reference
to the selection, location, number, use, or occupancy of tenants, subtenants, or
vendees in the premises.
(l) The term "day" as used herein means a calendar day.
(m) The obligations of Landlord under this Lease do not
constitute personal obligations of the partners, directors, officers,
shareholders, or trustees of Landlord, and Tenant shall look solely to the
Building and to no other assets of the Landlord or any of its trustees,
partners, officers, directors, employees, or consultants for satisfaction of any
liability in respect of this Lease and Tenant will not seek recourse against the
individual partners, directors, officers, shareholders, or trustees of Landlord
or any of their personal assets for such satisfaction.
(n) Within 10 days of Landlord's request therefor, Tenant shall
execute and deliver such amendments of this Lease as shall have been required by
Landlord's lender in connection with the making of a loan to be secured by the
premises or the Building, provided such amendment does not increase the
obligations of Tenant under this Lease or materially adversely affect Tenant's
leasehold interest. Such amendment shall include, without limitation, one
requiring Tenant to provide any such lender with notices hereunder or a copy of
notices sent to Landlord hereunder, or granting any such lender reasonable
opportunities to cure any default by Landlord under this Lease.
26. EXHIBITS. The exhibits and addendum, if any, specified in the
Basic Lease Information are attached to this Lease and by this reference made a
part hereof.
-22-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Lease on the
respective dates indicated below.
TENANT: LANDLORD:
GILEAD SCIENCES, INC., WCB SIXTEEN LIMITED
a Delaware corporation PARTNERSHIP,
a Delaware limited partnership
By /s/ John C. Martin By: WCB Sixteen, Inc.,
--------------------------------- a Delaware corporation,
Its CEO general partner
-------------------------------
By /s/ Mark L. Perry By /s/ Wallace G. Murfit
--------------------------------- ------------------------------
Its Vice President Its V.P.
and General Counsel -----------------------------
------------------------------
Date of Execution Date of Execution
by Tenant: 6/27/96 by Landlord: 6/28/96
----------------------- --------------------------
-23-
<PAGE>
AMENDMENT NO. 1 TO
VINTAGE PARK RESEARCH AND DEVELOPMENT LEASE
THIS AMENDMENT NO. 1 TO VINTAGE PARK RESEARCH AND DEVELOPMENT LEASE is
made and entered into as of June 24, 1996 by and between WCB SEVENTEEN LIMITED
PARTNERSHIP, a Delaware limited partnership ("Landlord"), and GILEAD SCIENCES,
INC., a Delaware corporation ("Tenant").
Landlord's predecessor-in-interest, Vintage Park Associates, and
Tenant entered into that certain Vintage Park Research and Development Lease
("Lease") dated September 16, 1993 with respect to certain premises commonly
identified as 335 Lakeside Drive, Foster City, California. Landlord and Tenant
now desire to amend the Lease in order, among other things, to reflect the
transfer of the Landlord's interest in the premises and to extend the term, all
as more fully set forth below and, accordingly, Landlord and Tenant hereby agree
as follows:
1. TRANSFER OF LANDLORD'S INTEREST. As of December 21, 1994 (the
"Transfer Date"), the Landlord's interest in the premises was transferred to WCB
Seventeen Limited Partnership, a Delaware limited partnership ("WCB Seventeen").
From and after the Transfer Date, WCB Seventeen shall be deemed the Landlord
under the Lease and hereby assumes the obligations of the Landlord under the
Lease accruing on and after the Transfer Date. Tenant hereby attorns to WCB
Seventeen as the Landlord under the Lease from and after the Transfer Date.
2. AMENDMENT OF BASIC LEASE INFORMATION. Those portions of the
Basic Lease Information of the Lease set forth below are hereby amended to read
as follows:
Term Expiration: March 31, 2006
Base Rent:
May 1, 1996 through $32,112.84
April 30, 1997
May 1, 1997 through $31,586.40
March 31, 1998
April 1, 1998 through $32,902.50
March 31, 1999
April 1, 1999 through $35,534.70
March 31, 2000
-1-
<PAGE>
April 1, 2000 through $36,600.74
March 31, 2001
April 1, 2001 through $37,698.76
March 31, 2002
April 1, 2002 through $38,829.72
March 31, 2003
April 1, 2003 through $39,994.62
March 31, 2004
April 1, 2004 through $41,194.45
March 31, 2005
April 1, 2005 through $42,430.29
March 31, 2006
Landlord's Address for Notices:
WCB Seventeen Limited Partnership
c/o WCB Properties
393 Vintage Park Drive, Suite 200
Foster City, CA 94404
3. AMENDMENT OF PARAGRAPH 20. Subparagraph 20(a) of the Lease is
amended to read as follows:
(a) Tenant shall have two options to extend the term of this
Lease, each for a period of five years (an "Option Period"), with the first
Option Period commencing April 1, 2006, subject to the terms and conditions
of this paragraph 20.
4. RATIFICATION. Landlord and Tenant hereby ratify and confirm the
terms of the Lease as amended in paragraphs 1, 2 and 3 above.
-2-
<PAGE>
IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment
as of the date first above written.
TENANT: LANDLORD:
GILEAD SCIENCES, INC., WCB SEVENTEEN LIMITED
a Delaware corporation PARTNERSHIP, a Delaware
limited partnership
By: WCB SEVENTEEN, INC., a
By: /s/ John S. Martin Delaware corporation,
--------------------------- general partner
Its: CEO
-----------------------
By: /s/ Wallace G. Murfit
------------------------------------
Its: V.P.
--------------------------------
-3-
<PAGE>
AMENDMENT NO. 2 TO
VINTAGE PARK RESEARCH AND DEVELOPMENT LEASE
(WCB 16)
THIS AMENDMENT NO. 2 TO VINTAGE PARK RESEARCH AND DEVELOPMENT LEASE is
made and entered into as of June 24, 1996 by and between WCB SIXTEEN LIMITED
PARTNERSHIP, a Delaware limited partnership ("Landlord"), and GILEAD SCIENCES,
INC., a Delaware corporation ("Tenant").
Landlord's predecessor-in-interest, Vintage Park Associates, and
Tenant entered into that certain Vintage Park Research and Development Lease
dated March 27, 1992, as amended by that certain Amendment No. 1 dated October
11, 1993 (collectively, the "Lease"), with respect to space in the Buildings
commonly known as 342A, 344B, 346, 353 and 368 Lakeside Drive, Foster City,
California. Landlord and Tenant now desire to amend the Lease in order, among
other things, to reflect a transfer of the Landlord's interest in certain
portions of the premises, and to change the date for expiration of the term, all
as more fully set forth below and, accordingly, Landlord and Tenant hereby agree
as follows:
1. TRANSFER OF LANDLORD'S INTEREST. As of December 21, 1994 (the
"Transfer Date"), Landlord's interest in those Buildings commonly known as 342A
Lakeside Drive and 368 Lakeside Drive, together with the portions of the
premises therein (the "WCB 16 Premises"), were transferred to WCB Sixteen
Limited Partnership, a Delaware limited partnership ("WCB Sixteen"). From and
after the Transfer Date, WCB Sixteen shall be deemed the Landlord with respect
to the WCB 16 Premises under the terms of the Lease and hereby assumes all of
the obligations of Landlord under the terms of this Lease with respect to the
WCB 16 Premises accruing from and after the Transfer Date. Tenant hereby
attorns to WCB Sixteen as the Landlord under the Lease from and after the
Transfer Date. Simultaneously, on the Transfer Date, the Landlord's interest in
the Lease with respect to those portions of the premises located within 344, 346
and 353 Lakeside Drive (collectively, the "WCB 17 Premises") were transferred to
WCB Seventeen Limited Partnership which from and after the transfer date became
the Landlord under the Lease with respect to the WCB 17 Premises.
Simultaneously with the execution of this Amendment, Tenant and WCB Seventeen
Limited Partnership shall enter into Amendment No. 2 to this Lease under which
WCB Seventeen Limited Partnership assumes the obligations of the Landlord under
the terms of this Lease with respect to the WCB 17 Premises accruing from and
after the Transfer Date.
-1-
<PAGE>
2. AMENDMENT OF BASIC LEASE INFORMATION. Those portions of the
Basic Lease Information of the Lease set forth below are hereby amended to read
as follows:
Premises and Building:
342A Lakeside Drive Approximately 28,335 sq. ft., as
outlined on EXHIBIT A to Amendment No. 1
Ground Floor of 368 Approximately 21,742 sq.
Lakeside Drive ft., as outlined on EXHIBIT A to Amendment
No. 1
Term Commencement:
342A and 368 Lakeside
Drive: August 1, 1995
Term Expiration:
342A Lakeside Drive July 31, 1996
and 368 Lakeside Drive
Base Rent:
342A and 368 Lakeside Drive:
February 1, 1996 through
March 31, 1996 $55,084.70
April 1, 1996 through
July 31, 1996 $57,588.55
Tenant's Percentage Share:
342A Lakeside Drive: 87%
368 Lakeside Drive: 59.34%
Landlord's Address for Notice:
WCB Sixteen Limited Partnership
c/o WCB Properties
393 Vintage Park Drive, Suite 200
Foster City, CA 94404
3. DELETION OF PARAGRAPH 20. Paragraph 20 of the Lease is hereby
deleted with respect to the WCB 16 Premises.
-2-
<PAGE>
4. AMENDMENT OF PARAGRAPH 24. The language added to paragraph 24 of
the Lease pursuant to paragraph 4 of Amendment No. 1 is hereby deleted.
5. RATIFICATION. Landlord and Tenant hereby ratify and confirm the
terms of the Lease as amended in paragraphs 1 through 4 above.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment
as of the date first above written.
TENANT: LANDLORD:
GILEAD SCIENCES, INC., WCB SIXTEEN LIMITED
a Delaware corporation PARTNERSHIP, a Delaware limited partnership
By: WCB SIXTEEN, INC., a
By: /s/ John C Martin Delaware corporation
--------------------------- general partner
Its: CEO
-----------------------
By: /s/ Wallace G. Murfit
------------------------------------
Its: V.P.
--------------------------------
-3-
<PAGE>
AMENDMENT NO. 2 TO
VINTAGE PARK RESEARCH AND DEVELOPMENT LEASE
(WCB 17)
THIS AMENDMENT NO. 2 TO VINTAGE PARK RESEARCH AND DEVELOPMENT LEASE is
made and entered into as of June 24, 1996 by and between WCB SEVENTEEN LIMITED
PARTNERSHIP, a Delaware limited partnership ("Landlord"), and GILEAD SCIENCES,
INC., a Delaware corporation ("Tenant").
Landlord's predecessor-in-interest, Vintage Park Associates, and
Tenant entered into that certain Vintage Park Research and Development Lease
dated March 27, 1992, as amended by that certain Amendment No. 1 dated October
11, 1993 (collectively, the "Lease"), with respect to space in the Buildings
commonly known as 342A, 344B, 346, 353 and 368 Lakeside Drive, Foster City,
California. Landlord and Tenant now desire to amend the Lease in order, among
other things, to reflect a transfer of the Landlord's interest in certain
portions of the premises, to add certain areas to the premises and to extend the
term all as more fully set forth below and, accordingly, Landlord and Tenant
hereby agree as follows:
1. TRANSFER OF LANDLORD'S INTEREST. As of December 21, 1994 (the
"Transfer Date"), Landlord's interest in those certain Buildings commonly known
as 342A Lakeside Drive and 368 Lakeside Drive, together with the portions of the
premises located therein (the "WCB 16 Premises") were transferred to WCB Sixteen
Limited Partnership, a Delaware limited partnership ("WCB Sixteen").
Simultaneously, on the Transfer Date, the Landlord's interest in the Lease with
respect to those portions of the premises located within 344B, 346 and 353
Lakeside Drive ("WCB 17 Premises") were transferred to WCB Seventeen Limited
Partnership, a Delaware limited partnership ("WCB Seventeen"). From and after
the Transfer Date, WCB Seventeen shall be deemed the Landlord under the terms of
the Lease with respect to the WCB 17 Premises and accruing from and after the
Transfer Date and hereby assumes all of the obligations of Landlord under the
terms of this Lease with respect to the WCB 17 Premises accruing from and after
the Transfer Date. Tenant hereby attorns to WCB Seventeen as the Landlord under
the Lease with respect to the WCB 17 Premises from and after the Transfer Date.
Simultaneously with the execution of this Amendment, Tenant and WCB Sixteen
Limited Partnership shall enter into Amendment No. 2 to this Lease under which
WCB Sixteen Limited Partnership assumes the obligations of the Landlord under
the terms of this Lease with respect to the WCB 16 Premises accruing from and
after the Transfer Date.
-1-
<PAGE>
2. AMENDMENT OF BASIC LEASE INFORMATION. Those portions of the
Basic Lease Information of the Lease set forth below are hereby amended to read
as follows:
Premises and Building:
331 Lakeside Drive Approximately 21,108 sq. ft., as outlined on
EXHIBIT A to Amendment No. 2
344B Lakeside Drive Approximately 13,055 sq. ft.
346 Lakeside Drive Approximately 18,961 sq. ft.
353 Lakeside Drive Approximately 29,250 sq. ft.
Term Commencement:
331 Lakeside Drive: January 1, 1997
Term Expiration:
331 Lakeside Drive: March 31, 2006
344B Lakeside Drive: March 31, 2006
346 Lakeside Drive: March 31, 2006
353 Lakeside Drive: March 31, 2006
Monthly Base Rent:
April 1, 1996 through
December 31, 1996 $73,519.20
January 1, 1997 through
March 31, 1997 $98,848.80
April 1, 1997 through
March 31, 1998 $102,967.50
April 1, 1998 through
March 31, 1999 $107,086.20
April 1, 1999 through
March 31, 2000 $111,204.90
April 1, 2000 through
March 31, 2001 $114,541.05
-2-
<PAGE>
April 1, 2001 through
March 31, 2002 $117,977.28
April 1, 2002 through
March 31, 2003 $121,516.60
April 1, 2003 through
March 31, 2004 $125,162.09
April 1, 2004 through
March 31, 2005 $128,916.96
April 1, 2005 through
March 31, 2006 $132,784.47
Tenant's Percentage Share:
331 Lakeside Drive: 100%
344B Lakeside Drive: 44.36%
346 Lakeside Drive: 100%
353 Lakeside Drive: 100%
Landlord's Address for Notice:
WCB Seventeen Limited Partnership
c/o WCB Properties
393 Vintage Park Drive, Suite 200
Foster City, CA 94404
3. AMENDMENT OF PARAGRAPH 2. With respect to 331 Lakeside Drive,
there is added a new last sentence to subparagraph 2(a), as follows:
Notwithstanding the foregoing provisions of this
subparagraph (a), Landlord, at its expense,shall exercise
due diligence in order to deliver possession of the premises
to the Tenant by January 1, 1997; and if Landlord, despite
such due diligence, is unable to deliver possession of the
premises to Tenant by said date, this Lease shall not be
void or voidable, the commencement of the term shall be
postponed until the premises shall be delivered to Tenant.
-3-
<PAGE>
4. AMENDMENT OF PARAGRAPH 13. A new subparagraph (a)(5) is hereby
added to paragraph 13 of the Lease, to read as follows:
(5) an "Event of Default" under that certain Gilead
Sciences Research and Development Lease dated June 24, 1996,
between Tenant and WCB Sixteen Limited Partnership with
respect to premises known as 333 Lakeside Drive, Foster
City.
5. AMENDMENT OF PARAGRAPH 20.
(a) Subparagraph 20(a) of the Lease is amended to read as
follows:
(a) Tenant shall have two options to extend the term of
this Lease, each for a period of five years (an "Option Period"),
with the first Option Period commencing April 1, 2006, subject to
the terms and conditions of this paragraph 20.
(b) Paragraph 20(f) of the Lease, as added under the terms of
Amendment No. 1., is hereby deleted.
6. ADDITION TO PREMISES. Upon the commencement of the term for that
portion of the premises consisting of 331 Lakeside Drive, Tenant shall accept
such portion of the premises in its then "as-is" condition.
7. RATIFICATION. Landlord and Tenant hereby ratify and confirm the
terms of the Lease as amended in paragraphs 1 through 6 above.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment
as of the date first above written.
TENANT: LANDLORD:
GILEAD SCIENCES, INC., WCB SEVENTEEN LIMITED
a Delaware corporation PARTNERSHIP, a Delaware limited partnership
By: WCB SEVENTEEN INC., a
By: /s/ John C. Martin Delaware corporation,
--------------------------- general partner
Its: CEO
------------------------
By: /s/ Wallace G. Murfit
------------------------------------
Its: V.P.
--------------------------------
-4-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 182,918
<SECURITIES> 107,481
<RECEIVABLES> 1,757
<ALLOWANCES> 220
<INVENTORY> 0
<CURRENT-ASSETS> 3,235<F1>
<PP&E> 7,774<F2>
<DEPRECIATION> 0
<TOTAL-ASSETS> 303,960
<CURRENT-LIABILITIES> 14,591
<BONDS> 0
0
0
<COMMON> 28
<OTHER-SE> 287,251
<TOTAL-LIABILITY-AND-EQUITY> 303,960
<SALES> 1,403
<TOTAL-REVENUES> 2,985
<CGS> 101
<TOTAL-COSTS> 101
<OTHER-EXPENSES> 19,846
<LOSS-PROVISION> 220
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (22,960)
<INCOME-TAX> 0
<INCOME-CONTINUING> (22,960)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (22,960)
<EPS-PRIMARY> (0.85)
<EPS-DILUTED> 0
<FN>
<F1>Current assets includes prepaid expenses and other current assets
<F2>Property, plant and equipment is net of depreciation
</FN>
</TABLE>
