Common use of Application of Letter of Credit Clause in Contracts

Application of Letter of Credit. Tenant hereby acknowledges and agrees that Landlord is entering into this Lease in material reliance upon the ability of Landlord to draw upon the L-C as protection for the full and faithful performance by Tenant of all of its obligations under this Lease and for all losses and damages Landlord may suffer (or which Landlord reasonably estimates that it may suffer) as a result of any breach or default by Tenant under this Lease. Landlord, or its then managing agent, shall have the right to draw down an amount up to the face amount of the L-C (provided that if the amount to be drawn by Landlord is greater than the amount of all losses and damages Landlord may suffer (or which Landlord reasonably estimates that it may suffer) as a result of such breach or default by Tenant, then the amount drawn by Landlord must be reasonable under the then circumstances) if any of the following shall have occurred or be applicable: (A) such amount is due to Landlord under the terms and conditions of this Lease, or (B) Tenant has filed a voluntary petition under the U. S. Bankruptcy Code or any state bankruptcy code (collectively, “Bankruptcy Code”), or (C) an involuntary petition has been filed against Tenant under the Bankruptcy Code, or (D) the Bank has notified Landlord that the L-C will not be renewed or extended through the LC Expiration Date, or (E) a Bank Credit Threat or Receivership (as such term is defined in Section 21.6.1 below) has occurred and Tenant has failed to comply with the requirements of either Section 21.2.5 above or 21.6 below, as applicable. If Tenant shall breach any provision of this Lease or otherwise be in default hereunder or if any of the foregoing events identified in Sections 21.3(B) through (E) shall have occurred, Landlord may, but without obligation to do so, and without notice to Tenant, draw upon the L-C, in part or in whole, and the proceeds may be applied by Landlord (i) to cure any breach or default of Tenant and/or to compensate Landlord for any and all damages of any kind or nature sustained or which Landlord reasonably estimates that it will sustain resulting from Tenant’s breach or default, (ii) -36- HCP, INC. [4930 Director’s Place] [Sorrento Therapeutics, Inc.] against any Rent payable by Tenant under this Lease that is not paid when due and/or (iii) to pay for all losses and damages that Landlord has suffered or that Landlord reasonably estimates that it will suffer as a result of any breach or default by Tenant under this Lease. The use, application or retention of the L-C, or any portion thereof, by Landlord shall not prevent Landlord from exercising any other right or remedy provided by this Lease or by any applicable law, it being intended that Landlord shall not first be required to proceed against the L-C, and shall not operate as a limitation on any recovery to which Landlord may otherwise be entitled. Tenant agrees not to interfere in any way with payment to Landlord of the proceeds of the L-C, either prior to or following a “draw” by Landlord of any portion of the L-C, regardless of whether any dispute exists between Tenant and Landlord as to Landlord’s right to draw upon the L-C. No condition or term of this Lease shall be deemed to render the L-C conditional to justify the issuer of the L-C in failing to honor a drawing upon such L-C in a timely manner. Tenant agrees and acknowledges that (a) the L-C constitutes a separate and independent contract between Landlord and the Bank, (b) Tenant is not a third party beneficiary of such contract, (c) Tenant has no property interest whatsoever in the L-C or the proceeds thereof, and (d) in the event Tenant becomes a debtor under any chapter of the Bankruptcy Code, neither Tenant, any trustee, nor Tenant’s bankruptcy estate shall have any right to restrict or limit Landlord’s claim and/or rights to the L-C and/or the proceeds thereof by application of Section 502(b)(6) of the U.S. Bankruptcy Code or otherwise.

Application of Letter of Credit. To the extent Tenant hereby acknowledges and agrees that Landlord is entering into this Lease in material reliance upon the ability of Landlord required to draw upon post the L-C as protection for the full and faithful performance by Tenant of all of its obligations under this Lease and for all losses and damages Landlord may suffer (or which Landlord reasonably estimates that it may suffer) as a result of any breach or default by Tenant under this Lease. Landlord, or its then managing agent, shall have the right pursuant to draw down an amount up to the face amount of the L-C (provided that if the amount to be drawn by Landlord is greater than the amount of all losses and damages Landlord may suffer (or which Landlord reasonably estimates that it may suffer) as a result of such breach or default by Tenant, then the amount drawn by Landlord must be reasonable under the then circumstances) if any of the following shall have occurred or be applicable: (A) such amount is due to Landlord under the terms and conditions of this Lease, such L-C shall be held by Landlord as security for the faithful performance by Tenant of all the TCCs of this Lease to be kept and performed by Tenant during the Lease Term. The L-C shall not be mortgaged, assigned or (B) encumbered in any manner whatsoever by Tenant has filed a voluntary petition under without the U. S. Bankruptcy Code or prior written consent of Landlord. If Tenant defaults with respect to any state bankruptcy code (collectivelyprovisions of this Lease, “Bankruptcy Code”)including, but not limited to, the provisions relating to the payment of Rent, or (C) an involuntary petition has been filed against if Tenant under the Bankruptcy Code, or (D) the Bank has notified Landlord that fails to renew the L-C will not be renewed or extended through the LC Expiration Date, or at least thirty (E30) a Bank Credit Threat or Receivership (as such term is defined in Section 21.6.1 below) has occurred and Tenant has failed to comply with the requirements of either Section 21.2.5 above or 21.6 below, as applicable. If Tenant shall breach any provision of this Lease or otherwise be in default hereunder or if any of the foregoing events identified in Sections 21.3(B) through (E) shall have occurreddays before its expiration, Landlord may, but without obligation to do so, and without notice to Tenantshall not be required to, draw upon all or any portion of the L-CC for payment of any Rent or any other sum in default, in part or in wholefor the payment of any amount that Landlord may reasonably spend or may become obligated to spend by reason of Tenant’s default, and the proceeds may be applied by Landlord (i) to cure any breach or default of Tenant and/or to compensate Landlord for any and all damages other loss or damage that Landlord may suffer by reason of any kind or nature sustained or which Landlord reasonably estimates that it will sustain resulting from Tenant’s breach or default, (ii) -36- HCP, INC. [4930 Director’s Place] [Sorrento Therapeutics, Inc.] against any Rent payable by Tenant under this Lease that is not paid when due and/or (iii) to pay for all losses and damages that Landlord has suffered or that Landlord reasonably estimates that it will suffer as a result of any breach or default by Tenant under this Lease. The use, application or retention of the L-C, or any portion thereof, by Landlord shall not prevent Landlord from exercising any other right or remedy provided by this Lease or by any applicable law, it being intended that Landlord shall not first be required to proceed against the L-C, C and shall not operate as a limitation on any recovery to which Landlord may otherwise be entitled. Tenant agrees not to interfere in any way with payment to Landlord of the proceeds Any amount of the L-CC which is drawn upon by Landlord, either prior to but is not used or following a “draw” applied by Landlord, shall be held by Landlord and deemed a security deposit (the “L-C Security Deposit”) and, in connection with such L-C Security Deposit, Tenant hereby waives the provisions of Section 1950.7(C) of the California Civil Code, or any successor statute. If any portion of the L-CC is drawn upon, regardless of whether any dispute exists between Tenant and shall, within ten (10) days after written demand therefor, either (i) deposit cash with Landlord as to Landlord’s right to draw upon the L-C. No condition or term of this Lease (which cash shall be deemed applied by Landlord to render the L-C conditional Security Deposit) in an amount sufficient to justify cause the issuer sum of the L-C in failing to honor a drawing upon such Security Deposit and the amount of the remaining L-C in a timely manner. Tenant agrees and acknowledges that (a) to be equivalent to the amount of the L-C constitutes a separate and independent contract between Landlord and the Bank, then required under this Lease or (bii) Tenant is not a third party beneficiary of such contract, (c) Tenant has no property interest whatsoever in reinstate the L-C or to the proceeds thereofamount then required under this Lease, and (d) in the event Tenant becomes a debtor under if any chapter portion of the Bankruptcy CodeL-C Security Deposit is used or applied, neither TenantTenant shall, any trusteewithin ten (10) days after written demand therefor, nor Tenant’s bankruptcy estate deposit cash with Landlord (which cash shall have any right to restrict or limit Landlord’s claim and/or rights be applied by Landlord to the L-C Security Deposit) in an amount sufficient to restore the L-C Security Deposit to the amount then required under this Lease, and Tenant’s failure to do so shall be a default under this Lease; provided, however, that upon Tenant’s satisfaction of its economic obligations and restoration of the L-C Security Deposit pursuant to this sentence, any unused portion of the drawn upon funds shall be returned to Tenant. Tenant acknowledges that Landlord has the right to transfer or mortgage its interest in the Project and in this Lease and Tenant agrees that in the event of any such transfer or mortgage, Landlord shall have the right to transfer or assign the L-C Security Deposit and/or the proceeds thereof by application L-C to the transferee or mortgagee, and in the event of Section 502(b)(6) such transfer, Tenant shall look solely to such transferee or mortgagee for the return of the U.S. Bankruptcy Code L-C Security Deposit and/or the L-C. Landlord shall pay all costs associated with the transfer or otherwisere-issuance of the L-C due to Landlord’s transfer or assignment. Tenant shall, within five (5) days of request by Landlord, execute such further instruments or assurances as Landlord may reasonably deem necessary to evidence or confirm Landlord’s transfer or assignment of the L-C Security Deposit and/or the L-C to such transferee or mortgagee. If Tenant is not then in default under this Lease, the L-C Security Deposit and/or the L-C, or any balance thereof, shall be returned to Tenant within thirty (30) days following the expiration of the Lease Term; provided, however, that to the extent Landlord has assigned such L-C, Landlord shall use its commercially reasonable efforts to cooperate with Tenant to have the same timely returned to Tenant.

Application of Letter of Credit. Tenant hereby acknowledges The L-C shall be held by Sublandlord as security for the faithful performance by Subtenant of all the terms, covenants, and agrees that Landlord conditions of this Sublease to be kept and performed by Subtenant during the Sublease Term. The L-C shall not be mortgaged, assigned or encumbered in any manner whatsoever by Subtenant without the prior written consent of Sublandlord. If there is entering into an "Event of Default" (as defined in Section 7.08(a) of the Master Lease (but with the time periods for cure being as defined and limited in Article 13 below)) by Subtenant with respect to any provisions of this Lease in material reliance upon Sublease, including, but not limited to, the ability provisions relating to the payment of Landlord Base Rent or Additional Rent, or if Subtenant fails to draw upon renew the L-C as protection for the full and faithful performance by Tenant of at least thirty (30) days before its expiration, Sublandlord may, but shall not be required to, draw upon all of its obligations under this Lease and for all losses and damages Landlord may suffer (or which Landlord reasonably estimates that it may suffer) as a result of any breach or default by Tenant under this Lease. Landlord, or its then managing agent, shall have the right to draw down an amount up to the face amount portion of the L-C (provided for payment of any Base Rent or Additional Rent or any other sums in default, or for the payment of any amount that if the amount Sublandlord may reasonably spend or may become obligated to be drawn spend by Landlord is greater than the amount reason of all losses and damages Landlord Subtenant's default, or to compensate Sublandlord for any other loss or damage that Sublandlord may suffer (or which Landlord reasonably estimates that it may suffer) as a result by reason of such breach or default by Tenant, then the amount drawn by Landlord must be reasonable under the then circumstances) if any of the following shall have occurred or be applicable: (A) such amount is due to Landlord under the terms and conditions of this Lease, or (B) Tenant has filed a voluntary petition under the U. S. Bankruptcy Code or any state bankruptcy code (collectively, “Bankruptcy Code”), or (C) an involuntary petition has been filed against Tenant under the Bankruptcy Code, or (D) the Bank has notified Landlord that the L-C will not be renewed or extended through the LC Expiration Date, or (E) a Bank Credit Threat or Receivership (as such term is defined in Section 21.6.1 below) has occurred and Tenant has failed to comply with the requirements of either Section 21.2.5 above or 21.6 below, as applicable. If Tenant shall breach any provision of this Lease or otherwise be in default hereunder or if any of the foregoing events identified in Sections 21.3(B) through (E) shall have occurred, Landlord may, but without obligation to do so, and without notice to Tenant, draw upon the L-C, in part or in whole, and the proceeds may be applied by Landlord (i) to cure any breach or default of Tenant and/or to compensate Landlord for any and all damages of any kind or nature sustained or which Landlord reasonably estimates that it will sustain resulting from Tenant’s breach or Subtenant's default, (ii) -36- HCP, INC. [4930 Director’s Place] [Sorrento Therapeutics, Inc.] against any Rent payable by Tenant under this Lease that is not paid when due and/or (iii) to pay for all losses and damages that Landlord has suffered or that Landlord reasonably estimates that it will suffer as a result of any breach or default by Tenant under this Lease. The use, application or retention of the L-C, or any portion thereof, by Landlord Sublandlord shall not prevent Landlord Sublandlord from exercising any other right or remedy provided by this Lease Sublease or by any applicable law, it being intended that Landlord Sublandlord shall not first be required to proceed against the L-C, C and shall not operate as a limitation on any recovery to which Landlord Sublandlord may otherwise be entitled. Tenant agrees not to interfere in any way with payment to Landlord of the proceeds Any amount of the L-CC which is drawn upon by Sublandlord shall first be applied to sums owing to Sublandlord with respect to the Event of Default , either prior to but any sums drawn which are not so used or following applied by Sublandlord shall be held by Sublandlord and deemed a “draw” by Landlord of security deposit (the "L-C Security Deposit"). If any portion of the L-CC is drawn upon, regardless of whether any dispute exists between Tenant and Landlord as to Landlord’s right to draw upon the L-C. No condition or term of this Lease Subtenant shall, within three (3) business days after written demand therefor, either (i) deposit cash with Sublandlord (which cash shall be deemed applied by Sublandlord to render the L-C conditional Security Deposit) in an amount sufficient to justify cause the issuer sum of the L-C in failing to honor a drawing upon such Security Deposit and the amount of the remaining L-C in a timely manner. Tenant agrees and acknowledges that (a) to be equivalent to the amount of the L-C constitutes then required under this Sublease or (ii) reinstate the L-C to the amount then required under this Sublease, and if any portion of the L-C Security Deposit is used or applied, Subtenant shall, within three (3) business days after written demand therefor, deposit cash with Sublandlord (which cash shall be applied by Sublandlord to the L-C Security Deposit) in an amount sufficient to restore the L-C Security Deposit to the amount then required under this Sublease, and Subtenant's failure to do so shall be a separate default under this Sublease. Subtenant acknowledges that Sublandlord has the right to transfer or mortgage its interest in the Master Lease or this Sublease and independent contract between Landlord and Subtenant agrees that in the Bankevent of any such transfer or mortgage, (b) Tenant is not a third party beneficiary Sublandlord shall have the right to transfer or assign the L-C Security Deposit and/or the L-C, provided that Sublandlord delivers commercially reasonable written evidence of such contracttransfer to Subtenant. Subtenant shall, within three (c3) Tenant business days of request by Sublandlord, execute such further instruments or assurances as Sublandlord may reasonably deem necessary to evidence or confirm Sublandlord's transfer or assignment of the L-C Security Deposit and/or the L-C to such transferee or mortgagee. Any transfer fee with respect to the foregoing shall be paid by Sublandlord. If and to the extent Sublandlord advances all or any portion of the Additional Allowance (as defined in Section 9.3 below) to Subtenant for any Phase of the Sublease Premises, and as a condition precedent to such advance, the face amount of the Letter of Credit shall be increased above $1,500,000 on the basis of One and 33/00 Dollars ($1.33) for each Five Dollars ($5.00) of the aggregate Additional Allowance advanced by Sublandlord to Subtenant. Additionally, if and to the extent that Sublandlord advances any tenant improvement allowance with respect to any floor(s) which Subtenant may sublease in Building B or Building C, as applicable, in accordance with Section 2.8 above, as a condition precedent to Sublandlord advancing such tenant improvement allowance, Subtenant shall provide to Sublandlord a letter of credit satisfying all of the requirements of this Article 6 in the face amount required by Section 2.8 above with respect to the sublease of any Building B or Building C floors, as applicable. Provided that Subtenant has neither previously committed an Event of Default under this Sublease nor is then in default under this Sublease (following the expiration of all applicable cure periods without cure), the face amount of the L-C shall be reduced by twenty-percent (20%) per annum on the first anniversary of the Phase III Rent Commencement Date and on each subsequent anniversary date of the Phase III Rent Commencement Date, provided that in no property interest whatsoever event shall the face amount of the L-C ever be reduced below One Hundred Fifty Thousand Dollars ($150,000) plus ten percent (10%) of the amount of the increase in the L-C or resulting from the proceeds thereof, and (d) in the event Tenant becomes a debtor under any chapter advance of the Bankruptcy Code, neither Tenant, any trustee, nor Tenant’s bankruptcy estate shall have any right Additional Allowance by Sublandlord to restrict or limit Landlord’s claim and/or rights to the L-C and/or the proceeds thereof by application of Section 502(b)(6) of the U.S. Bankruptcy Code or otherwiseSubtenant.

Application of Letter of Credit. Tenant hereby acknowledges and agrees that Landlord is entering into this Lease in material reliance upon the ability of Landlord to draw upon the The L-C shall be held by Landlord ------------------------------- as protection security for the full and faithful performance by Tenant of all the TCC's of its obligations under this Lease to be kept and for all losses and damages Landlord may suffer (or which Landlord reasonably estimates that it may suffer) as a result of any breach or default performed by Tenant under during the Lease Term. The L-C shall not be mortgaged, assigned or encumbered in any manner whatsoever by Tenant without the prior written consent of Landlord. If Tenant defaults with respect to any provisions of this Lease. Landlord, including, but not limited to, the provisions relating to the payment of Rent, or if Tenant fails to renew the L-C at least thirty (30) days before its then managing agentexpiration, Landlord may, but shall have the right to not be required to, draw down an amount up to the face amount upon all or any portion of the L-C (provided for payment of any Rent or any other sum in default, or for the payment of any amount that if the amount to be drawn by Landlord is greater than the amount of all losses and damages Landlord may suffer (reasonably spend or which Landlord reasonably estimates that it may suffer) as a result become obligated to spend by reason of such breach or default by Tenant, then the amount drawn by Landlord must be reasonable under the then circumstances) if any of the following shall have occurred or be applicable: (A) such amount is due to Landlord under the terms and conditions of this Lease's default, or (B) Tenant has filed a voluntary petition under the U. S. Bankruptcy Code or any state bankruptcy code (collectively, “Bankruptcy Code”), or (C) an involuntary petition has been filed against Tenant under the Bankruptcy Code, or (D) the Bank has notified Landlord that the L-C will not be renewed or extended through the LC Expiration Date, or (E) a Bank Credit Threat or Receivership (as such term is defined in Section 21.6.1 below) has occurred and Tenant has failed to comply with the requirements of either Section 21.2.5 above or 21.6 below, as applicable. If Tenant shall breach any provision of this Lease or otherwise be in default hereunder or if any of the foregoing events identified in Sections 21.3(B) through (E) shall have occurred, Landlord may, but without obligation to do so, and without notice to Tenant, draw upon the L-C, in part or in whole, and the proceeds may be applied by Landlord (i) to cure any breach or default of Tenant and/or to compensate Landlord for any and all damages of any kind other loss or nature sustained or which Landlord reasonably estimates that it will sustain resulting from Tenant’s breach or default, (ii) -36- HCP, INC. [4930 Director’s Place] [Sorrento Therapeutics, Inc.] against any Rent payable by Tenant under this Lease that is not paid when due and/or (iii) to pay for all losses and damages damage that Landlord has suffered or that Landlord reasonably estimates that it will may suffer as a result by reason of any breach or default by Tenant under this LeaseTenant's default. The use, application or retention of the L-C, or any portion thereof, by Landlord shall not prevent Landlord from exercising any other right or remedy provided by this Lease or by any applicable law, it being intended that Landlord shall not first be required to proceed against the L-C, C and shall not operate as a limitation on any recovery to which Landlord may otherwise be entitled. Tenant agrees not to interfere in any way with payment to Landlord of the proceeds Any amount of the L-CC which is drawn upon by Landlord, either prior to but is not used or following a “draw” applied by Landlord, shall be held by Landlord of and deemed a security deposit (the "L-C SECURITY DEPOSIT"). If any portion of the L-CC is drawn upon, regardless of whether any dispute exists between Tenant and shall, within ten (10) days after written demand therefor, either (i) deposit cash with Landlord as to Landlord’s right to draw upon the L-C. No condition or term of this Lease (which cash shall be deemed applied by Landlord to render the L-C conditional Security Deposit) in an amount sufficient to justify cause the issuer sum of the L-C in failing to honor a drawing upon such Security Deposit and the amount of the remaining L-C in a timely manner. Tenant agrees and acknowledges that (a) to be equivalent to the amount of the L-C constitutes a separate and independent contract between Landlord and the Bank, then required under this Lease or (bii) Tenant is not a third party beneficiary of such contract, (c) Tenant has no property interest whatsoever in reinstate the L-C or to the proceeds thereofamount then required under this Lease, and (d) in the event Tenant becomes a debtor under if any chapter portion of the Bankruptcy CodeL-C Security Deposit is used or applied, neither TenantTenant shall, any trusteewithin ten (10) days after written demand therefor, nor Tenant’s bankruptcy estate deposit cash with Landlord (which cash shall have any right to restrict or limit Landlord’s claim and/or rights be applied by Landlord to the L-C Security Deposit) in an amount sufficient to restore the L-C Security Deposit to the amount then required under this Lease, and Tenant's failure to do so shall be a default under this Lease; provided, however, that upon Tenant's satisfaction of its economic obligations and restoration of the L-C Security Deposit pursuant to this sentence, any unused portion of the drawn upon funds shall be returned to Tenant. Tenant acknowledges that Landlord has the right to transfer or mortgage its interest in the Real Property and the Center and in this Lease and Tenant agrees that in the event of any such transfer or mortgage, Landlord shall have the right to transfer or assign the L-C Security Deposit and/or the proceeds thereof by application L-C to the transferee or mortgagee, and in the event of Section 502(b)(6) such transfer, Tenant shall look solely to such transferee or mortgagee for the return of the U.S. Bankruptcy Code L-C Security Deposit and/or the L-C. Landlord shall pay all costs associated with the transfer or otherwisere-issuance of the L-C due to Landlord's transfer or assignment. Tenant shall, within five (5) days of request by Landlord, execute such further instruments or assurances as Landlord may reasonably deem necessary to evidence or confirm Landlord's transfer or assignment of the L-C Security Deposit and/or the L-C to such transferee or mortgagee. If Tenant is not then in default under this Lease, the L-C Security Deposit and/or the L-C, or any balance thereof, shall be returned to Tenant within thirty (30) days following the expiration of the Lease Term.

Application of Letter of Credit. Tenant hereby acknowledges and agrees that Landlord is entering into this Lease in material reliance upon the ability of Landlord to draw upon the The L-C shall be held by Landlord as protection security for the full and faithful performance by Tenant of all the TCC's of its obligations under this Lease to be kept and for all losses and damages Landlord may suffer (or which Landlord reasonably estimates that it may suffer) as a result of any breach or default performed by Tenant under during the Lease Term. The L-C shall not be mortgaged, assigned or encumbered in any manner whatsoever by Tenant without the prior written consent of Landlord. If Tenant defaults with respect to any provisions of this Lease. Landlord, including, but not limited to, the provisions relating to the payment of Rent, or if Tenant fails to renew the L-C at least thirty (30) days before its then managing agentexpiration, Landlord may, but shall have the right to not be required to, draw down an amount up to the face amount upon all or any portion of the L-C (provided for payment of any Rent or any other sum in default, or for the payment of any amount that if the amount to be drawn by Landlord is greater than the amount of all losses and damages Landlord may suffer (reasonably spend or which Landlord reasonably estimates that it may suffer) as a result become obligated to spend by reason of such breach or default by Tenant, then the amount drawn by Landlord must be reasonable under the then circumstances) if any of the following shall have occurred or be applicable: (A) such amount is due to Landlord under the terms and conditions of this Lease's default, or (B) Tenant has filed a voluntary petition under the U. S. Bankruptcy Code or any state bankruptcy code (collectively, “Bankruptcy Code”), or (C) an involuntary petition has been filed against Tenant under the Bankruptcy Code, or (D) the Bank has notified Landlord that the L-C will not be renewed or extended through the LC Expiration Date, or (E) a Bank Credit Threat or Receivership (as such term is defined in Section 21.6.1 below) has occurred and Tenant has failed to comply with the requirements of either Section 21.2.5 above or 21.6 below, as applicable. If Tenant shall breach any provision of this Lease or otherwise be in default hereunder or if any of the foregoing events identified in Sections 21.3(B) through (E) shall have occurred, Landlord may, but without obligation to do so, and without notice to Tenant, draw upon the L-C, in part or in whole, and the proceeds may be applied by Landlord (i) to cure any breach or default of Tenant and/or to compensate Landlord for any and all damages of any kind other loss or nature sustained or which Landlord reasonably estimates that it will sustain resulting from Tenant’s breach or default, (ii) -36- HCP, INC. [4930 Director’s Place] [Sorrento Therapeutics, Inc.] against any Rent payable by Tenant under this Lease that is not paid when due and/or (iii) to pay for all losses and damages damage that Landlord has suffered or that Landlord reasonably estimates that it will may suffer as a result by reason of any breach or default by Tenant under this LeaseTenant's default. The use, application or retention of the L-C, or any portion thereof, by Landlord shall not prevent Landlord from exercising any other right or remedy provided by this Lease or by any applicable law, it being intended that Landlord shall not first be required to proceed against the L-C, C and shall not operate as a limitation on any recovery to which Landlord may otherwise be entitled. Tenant agrees not to interfere in any way with payment to Landlord of the proceeds Any amount of the L-CC which is drawn upon by Landlord, either prior to but is not used or following a “draw” applied by Landlord, shall be held by Landlord of and deemed a security deposit (the "L-C SECURITY DEPOSIT"). If any portion of the L-CC is drawn upon, regardless of whether any dispute exists between Tenant and shall, within ten (10) days after written demand therefor, either (i) deposit cash with Landlord as to Landlord’s right to draw upon the L-C. No condition or term of this Lease (which cash shall be deemed applied by Landlord to render the L-C conditional Security Deposit) in an amount sufficient to justify cause the issuer sum of the L-C in failing to honor a drawing upon such Security Deposit and the amount of the remaining L-C in a timely manner. Tenant agrees and acknowledges that (a) to be equivalent to the amount of the L-C constitutes a separate and independent contract between Landlord and the Bank, then required under this Lease or (bii) Tenant is not a third party beneficiary of such contract, (c) Tenant has no property interest whatsoever in reinstate the L-C or to the proceeds thereofamount then required under this Lease, and (d) in the event Tenant becomes a debtor under if any chapter portion of the Bankruptcy CodeL-C Security Deposit is used or applied, neither TenantTenant shall, any trusteewithin ten (10) days after written demand therefor, nor Tenant’s bankruptcy estate deposit cash with Landlord (which cash shall have any right to restrict or limit Landlord’s claim and/or rights be applied by Landlord to the L-C Security Deposit) in an amount sufficient to restore the L-C Security Deposit to the amount then required under this Lease, and Tenant's failure to do so shall be a default under this Lease; provided, however, that upon Tenant's satisfaction of its economic obligations and restoration of the L-C Security Deposit pursuant to this sentence, any unused portion of the drawn upon funds shall be returned to Tenant. Tenant acknowledges that Landlord has the right to transfer or mortgage its interest in the Real Property and the Center and in this Lease and Tenant agrees that in the event of any such transfer or mortgage, Landlord shall have the right to transfer or assign the L-C Security Deposit and/or the proceeds thereof by application L-C to the transferee or mortgagee, and in the event of Section 502(b)(6) such transfer, Tenant shall look solely to such transferee or mortgagee for the return of the U.S. Bankruptcy Code L-C Security Deposit and/or the L-C. Landlord shall pay all costs associated with the transfer or otherwisere-issuance of the L-C due to Landlord's transfer or assignment. Tenant shall, within five (5) days of request by Landlord, execute such further instruments or assurances as Landlord may reasonably deem necessary to evidence or confirm Landlord's transfer or assignment of the L-C Security Deposit and/or the L-C to such transferee or mortgagee. If Tenant is not then in default under this Lease, the L-C Security Deposit and/or the L-C, or any balance thereof, shall be returned to Tenant within thirty (30) days following the expiration of the Lease Term.

Application of Letter of Credit. Tenant hereby acknowledges and agrees If Reliant defaults (following any applicable grace periods, it being understood that Landlord is entering into this Lease in material reliance upon the ability no notice of Landlord to draw upon the L-C as protection for the full and faithful performance by Tenant of all of its obligations under this Lease and for all losses and damages Landlord may suffer (or which Landlord reasonably estimates that it may suffer) as a result of any breach or default by Tenant under this Lease. Landlord, Reliant hereunder need be given by Mercury to Reliant if Reliant is the subject of an insolvency event or its then managing agent, shall have the right bankruptcy proceeding) with respect to draw down an amount up to the face amount of the L-C (provided that if the amount to be drawn by Landlord is greater than the amount of all losses and damages Landlord may suffer (or which Landlord reasonably estimates that it may suffer) as a result of such breach or default by Tenant, then the amount drawn by Landlord must be reasonable under the then circumstances) if any of the following shall have occurred or be applicable: (A) such amount is due to Landlord under the terms and conditions of this Lease, or (B) Tenant has filed a voluntary petition under the U. S. Bankruptcy Code or any state bankruptcy code (collectively, “Bankruptcy Code”), or (C) an involuntary petition has been filed against Tenant under the Bankruptcy Code, or (D) the Bank has notified Landlord that the L-C will not be renewed or extended through the LC Expiration Date, or (E) a Bank Credit Threat or Receivership (as such term is defined in Section 21.6.1 below) has occurred and Tenant has failed to comply with the requirements of either Section 21.2.5 above or 21.6 below, as applicable. If Tenant shall breach any provision of this Lease or otherwise be in default hereunder or if any Sub-Sublease, including, but not limited to, provisions relating to the payment of the foregoing events identified in Sections 21.3(B) through (E) shall have occurredRent, Landlord Mercury may, but without obligation to do soshall not be required to, draw down upon all or any portion of the LC for payment of and Rent or other sum in default, and without notice for the payment of any amount that Mercury may spend or may become obligated to Tenant, draw upon the L-C, in part spend by reason of Reliant’s default or in whole, and the proceeds may be applied by Landlord (i) to cure any breach or default of Tenant and/or to compensate Landlord Mercury for any and all damages of any kind loss or nature sustained or damage which Landlord reasonably estimates that it will sustain resulting from Tenant’s breach or default, (ii) -36- HCP, INC. [4930 Director’s Place] [Sorrento Therapeutics, Inc.] against any Rent payable by Tenant under this Lease that is not paid when due and/or (iii) to pay for all losses and damages that Landlord Mercury has suffered or that Landlord reasonably estimates that it will suffer as a result of any breach or default by Tenant under this Leasethereby. The use, application or retention of the L-CLC, or any portion thereof, by Landlord Mercury shall not prevent Landlord Mercury from exercising any other right or remedy provided by this Lease Sub-Sublease or by any applicable lawlaw or in equity, it being intended that Landlord Mercury shall not first be required to proceed against the L-CLC, and the LC shall not operate as a limitation on any recovery to which Landlord Mercury otherwise may otherwise be entitled. Tenant agrees not to interfere in any way with payment to Landlord of the proceeds of the L-C, either prior to If all or following a “draw” by Landlord of any portion of the LLC is drawn upon, Reliant, within five (5) business days after written notification from the bank or Mercury of the amount so applied, shall reinstate the LC to the LC Amount required under this Sub-CSublease by providing either cash (so that the full amount of cash and LC proceeds held by Mercury equals the LC Amount) or a replacement LC upon the identical terms and conditions set forth in this Section (so that the excess LC proceeds and the replacement LC equals the LC Amount). Reliant’s failure to provide Mercury with cash in the required amount or to reinstate the LC as required hereunder shall be further material default under this Sub-Sublease, regardless of whether any dispute exists between Tenant and Landlord as in which case Mercury, without notice to Landlord’s right Reliant, shall be permitted to draw upon down the L-C. No condition or term of this Lease shall be deemed to render the L-C conditional to justify the issuer entire balance of the L-C LC and apply it to any current or future obligations of Reliant. Reliant waives any restriction on the use or application of any proceeds of the LC as set forth in failing to honor a drawing upon such L-C in a timely manner. Tenant agrees California Civil Code Sections 1950.7(a) and acknowledges that (a) the L-C constitutes a separate and independent contract between Landlord and the Bank, (b) Tenant is not a third party beneficiary of such contract, (c) Tenant has no property interest whatsoever in the L-C or the proceeds thereof, and (d) in the event Tenant becomes a debtor under any chapter of the Bankruptcy Code, neither Tenant, any trustee, nor Tenant’s bankruptcy estate shall have any right to restrict or limit Landlord’s claim and/or rights to the L-C and/or the proceeds thereof by application of Section 502(b)(6) of the U.S. Bankruptcy Code or otherwisesuccessor statute thereto.

Application of Letter of Credit. If, (i) as result of any application or use by Landlord of all or any part of the Letter of Credit, the amount of the Letter of Credit shall be less than the Stated Amount, or (ii) the initial Stated Amount shall be increased by the Additional LC Amount, Tenant shall, within ten (10) days after Tenant’s receipt of notice from Landlord, provide Landlord with additional letter(s) of credit in an amount equal to the deficiency (or equal to the Additional LC Amount, as applicable) and any such additional letter of credit shall comply with all of the provisions of this Section 5, and if Tenant fails to comply with the foregoing, the same shall constitute an uncurable default by Tenant. Tenant may satisfy its obligations pursuant to the preceding sentence by instead providing to Landlord a replacement Letter of Credit in the required amount. Tenant further covenants and warrants that it will neither assign nor encumber the Letter of Credit or any part thereof, and that neither Landlord nor its successors or assigns will be bound by any such assignment, encumbrance, attempted assignment or attempted encumbrance. Without limiting the generality of the foregoing, if any such Letter of Credit expires earlier than the LC Expiration Date, Landlord will accept a renewal thereof (such renewal letter of credit to be in effect and delivered to Landlord, as applicable, not later than thirty (30) days prior to the expiration of the Letter of Credit), which shall be irrevocable and automatically renewable as above provided through the LC Expiration Date upon the same terms as the expiring Letter of Credit or such other terms as may be acceptable to Landlord in its sole discretion. However, if any such Letter of Credit is not timely renewed, or if Tenant fails to maintain any such Letter of Credit in the amount and in accordance with the terms set forth in this Section 5, Landlord shall have the right to present the Letter of Credit to the Bank in accordance with the terms of this Section 5 and the proceeds of the Letter of Credit may be applied by Landlord against any Rent payable by Tenant under this Lease that is not paid when due and/or to pay for all losses and damages that Landlord has suffered or that Landlord reasonably and in good faith estimates that it will suffer as a result of any default (beyond the expiration of all applicable notice and cure periods) by Tenant under this Lease. Any unused proceeds shall constitute the property of Landlord and need not be segregated from Landlord’s other assets. Landlord agrees to pay to Tenant within thirty (30) days after the LC Expiration Date the amount of any proceeds of the Letter of Credit received by Landlord and not applied against any Rent payable by Tenant under this Lease that was not paid when due or used to pay for any losses and/or damages suffered by Landlord (or reasonably estimated by Landlord that it will suffer) as a result of any default (beyond the expiration of all applicable notice and cure periods) by Tenant under this Lease; provided, however, that if prior to the LC Expiration Date a voluntary petition is filed by Tenant, or an involuntary petition is filed against Tenant by any of Tenant’s creditors, under the Federal Bankruptcy Code, then Landlord shall not be obligated to make such payment in the amount of the unused Letter of Credit proceeds until either all preference issues relating to payments under this Lease have been resolved in such bankruptcy or reorganization case or such bankruptcy or reorganization case has been dismissed. Tenant hereby acknowledges and agrees that Landlord is entering into this Lease in material reliance upon the ability of Landlord to draw upon the L-C as protection for Letter of Credit upon the full and faithful performance by Tenant occurrence of any default (beyond the expiration of all TXXXXX XXXXX COURT, LA JOLLA [Orexigen Therapeutics, Inc.] applicable notice and cure periods) on the part of its obligations under this Lease and for all losses and damages Landlord may suffer (or which Landlord reasonably estimates that it may suffer) as a result of any breach or default by Tenant under this Lease. Landlord, or its then managing agent, If there shall have occur a default (beyond the right to draw down an amount up to the face amount of the L-C (provided that if the amount to be drawn by Landlord is greater than the amount expiration of all losses applicable notice and damages Landlord may suffer (or which Landlord reasonably estimates that it may suffercure periods) under this Lease as a result of such breach or default by Tenant, then the amount drawn by Landlord must be reasonable under the then circumstances) if any of the following shall have occurred or be applicable: (A) such amount is due to Landlord under the terms and conditions set forth in Section 23 of this Lease, or (B) Tenant has filed a voluntary petition under the U. S. Bankruptcy Code or any state bankruptcy code (collectively, “Bankruptcy Code”), or (C) an involuntary petition has been filed against Tenant under the Bankruptcy Code, or (D) the Bank has notified Landlord that the L-C will not be renewed or extended through the LC Expiration Date, or (E) a Bank Credit Threat or Receivership (as such term is defined in Section 21.6.1 below) has occurred and Tenant has failed to comply with the requirements of either Section 21.2.5 above or 21.6 below, as applicable. If Tenant shall breach any provision of this Lease or otherwise be in default hereunder or if any of the foregoing events identified in Sections 21.3(B) through (E) shall have occurred, Landlord may, but without obligation to do so, and without notice to Tenant, draw upon the L-C, Letter of Credit in part or in whole, and the proceeds may be applied by Landlord (i) to cure any breach or default (within the applicable cure period) of Tenant and/or to compensate Landlord for any and all damages of any kind or nature sustained or which Landlord reasonably and in good faith estimates that it will sustain resulting from Tenant’s breach or default, (ii) -36- HCP, INC. [4930 Director’s Place] [Sorrento Therapeutics, Inc.] against any Rent payable by Tenant under this Lease that is not paid when due and/or (iii) to pay for all losses and damages that Landlord has suffered or that Landlord reasonably estimates that it will suffer as a result of any breach or default by Tenant under this Lease. The use, application or retention of the L-C, or any portion thereof, by Landlord shall not prevent Landlord from exercising any other right or remedy provided by this Lease or by any applicable law, it being intended that Landlord shall not first be required to proceed against the L-C, and shall not operate as a limitation on any recovery to which Landlord may otherwise be entitled. Tenant agrees not to interfere in any way with payment to Landlord of the proceeds of the L-CLetter of Credit, either prior to or following a “draw” by Landlord of any portion of the L-CLetter of Credit, regardless of whether any dispute exists between Tenant and Landlord as to Landlord’s right to draw upon from the L-C. Letter of Credit. No condition or term of this Lease shall be deemed to render the L-C Letter of Credit conditional to justify the issuer of the L-C Letter of Credit in failing to honor a drawing upon such L-C Letter of Credit in a timely manner. Tenant agrees and acknowledges that (a) the L-C constitutes a separate and independent contract between Landlord and the Bank, (b) Tenant is not a third party beneficiary of such contract, (c) Tenant has no property interest whatsoever in the L-C Letter of Credit or the proceeds thereofthereof and that, and (d) in the event Tenant becomes a debtor under any chapter of the Federal Bankruptcy Code, neither Tenant, any trustee, nor Tenant’s bankruptcy estate shall have any right to restrict or limit Landlord’s claim and/or rights to the L-C Letter of Credit and/or the proceeds thereof by application of Section 502(b)(6) of the U.S. Federal Bankruptcy Code. Landlord and Tenant acknowledge and agree that in no event or circumstance shall the Letter of Credit or any renewal thereof or any proceeds thereof be (i) deemed to be or treated as a “security deposit” within the meaning of California Civil Code Section 1950.7, (ii) subject to the terms of such Section 1950.7, or otherwise(iii) intended to serve as a “security deposit” within the meaning of such Section 1950.7. The parties hereto (A) recite that the Letter of Credit is not intended to serve as a security deposit and such Section 1950.7 and any and all other laws, rules and regulations applicable to security deposits in the commercial context (“Security Deposit Laws”) shall have no applicability or relevancy thereto and (B) waive any and all rights, duties and obligations either party may now or, in the future, will have relating to or arising from the Security Deposit Laws.

Application of Letter of Credit. Tenant hereby acknowledges and agrees that Landlord is entering into this Lease in material reliance upon the ability of Landlord to draw upon the The L-C shall be held by Landlord as protection security for the full and faithful performance by Tenant of all the terms, covenants, and conditions of its obligations under this the Lease to be kept and for all losses and damages Landlord may suffer (or which Landlord reasonably estimates that it may suffer) as a result of any breach or default performed by Tenant under this during the Lease Term. The L-C shall not be mortgaged, assigned or encumbered in any manner whatsoever by Tenant without the prior written consent of Landlord. If Tenant defaults with respect to any provisions of the Lease. Landlord, including, but not limited to, the provisions relating to the payment of Rent, or if Tenant fails to renew the L-C at least thirty (30) days before its then managing agentexpiration, Landlord may, but shall have the right to not be required to, draw down an amount up to the face amount upon all or any portion of the L-C (provided for payment of any Rent or any other sum in default, or for the payment of any amount that if the amount to be drawn by Landlord is greater than the amount of all losses and damages Landlord may suffer (reasonably spend or which Landlord reasonably estimates that it may suffer) as a result become obligated to spend by reason of such breach or default by Tenant, then the amount drawn by Landlord must be reasonable under the then circumstances) if any of the following shall have occurred or be applicable: (A) such amount is due to Landlord under the terms and conditions of this Lease’s default, or (B) Tenant has filed a voluntary petition under the U. S. Bankruptcy Code or any state bankruptcy code (collectively, “Bankruptcy Code”), or (C) an involuntary petition has been filed against Tenant under the Bankruptcy Code, or (D) the Bank has notified Landlord that the L-C will not be renewed or extended through the LC Expiration Date, or (E) a Bank Credit Threat or Receivership (as such term is defined in Section 21.6.1 below) has occurred and Tenant has failed to comply with the requirements of either Section 21.2.5 above or 21.6 below, as applicable. If Tenant shall breach any provision of this Lease or otherwise be in default hereunder or if any of the foregoing events identified in Sections 21.3(B) through (E) shall have occurred, Landlord may, but without obligation to do so, and without notice to Tenant, draw upon the L-C, in part or in whole, and the proceeds may be applied by Landlord (i) to cure any breach or default of Tenant and/or to compensate Landlord for any and all damages other loss or damage that Landlord may suffer by reason of any kind or nature sustained or which Landlord reasonably estimates that it will sustain resulting from Tenant’s breach or default, (ii) -36- HCP, INC. [4930 Director’s Place] [Sorrento Therapeutics, Inc.] against any Rent payable by Tenant under this Lease that is not paid when due and/or (iii) to pay for all losses and damages that Landlord has suffered or that Landlord reasonably estimates that it will suffer as a result of any breach or default by Tenant under this Lease. The use, application or retention of the L-C, or any portion thereof, by Landlord shall not prevent Landlord from exercising any other right or remedy provided by this the Lease or by any applicable law, it being intended that Landlord shall not first be required to proceed against the L-C, C and shall not operate as a limitation on any recovery to which Landlord may otherwise be entitled. Tenant agrees not to interfere in any way with payment to Landlord of the proceeds Any amount of the L-CC which is drawn upon by Landlord, either prior to but is not used or following a “draw” applied by Landlord, shall be held by Landlord of and deemed a security deposit (the “L-C Security Deposit”). If any portion of the L-CC is drawn upon, regardless of whether any dispute exists between Tenant and shall, within five (5) business days after written demand therefor, either (i) deposit cash with Landlord as to Landlord’s right to draw upon the L-C. No condition or term of this Lease (which cash shall be deemed applied by Landlord to render the L-C conditional Security Deposit) in an amount sufficient to justify cause the issuer sum of the L-C in failing to honor a drawing upon such Security Deposit and the amount of the remaining L-C in a timely manner. Tenant agrees and acknowledges that (a) to be equivalent to the amount of the L-C constitutes a separate and independent contract between Landlord and then required under the Bank, Lease or (bii) Tenant is not a third party beneficiary of such contract, (c) Tenant has no property interest whatsoever in reinstate the L-C or to the proceeds thereofamount then required under the Lease, and (d) in the event Tenant becomes a debtor under if any chapter portion of the Bankruptcy CodeL-C Security Deposit is used or applied, neither TenantTenant shall, any trusteewithin five (5) business days after written demand therefor, nor Tenant’s bankruptcy estate deposit cash with Landlord (which cash shall have any right to restrict or limit Landlord’s claim and/or rights be applied by Landlord to the L-C Security Deposit) in an amount sufficient to restore the L-C Security Deposit to the amount then required under this Lease, and Tenant’s failure to do so shall be a default under the Lease. Tenant acknowledges that Landlord has the right to transfer or mortgage its interest in the Building and in the Lease and Tenant agrees that in the event of any such transfer or mortgage, Landlord shall have the right to transfer or assign the L-C Security Deposit and/or the proceeds thereof by application L-C to the transferee or mortgagee, and in the event of Section 502(b)(6) such transfer, Tenant shall look solely to such transferee or mortgagee for the return of the U.S. Bankruptcy Code Security Deposit and/or the L-C. Tenant shall, within ten (10) business days of request by Landlord, execute such further instruments or otherwiseassurances as Landlord may reasonably deem necessary to evidence or confirm Landlord’s transfer or assignment of the L-C Security Deposit and/or the L-C to such transferee or mortgagee.

Application of Letter of Credit. Tenant hereby acknowledges and agrees that Landlord is entering into this Lease in material reliance upon the ability of Landlord to draw upon the The L-C shall be held by Landlord as protection security for the full and faithful performance by Tenant of all the terms, covenants, and conditions of its obligations under this Lease to be kept and for all losses and damages Landlord may suffer (or which Landlord reasonably estimates that it may suffer) as a result of any breach or default performed by Tenant under during the Lease Term. The L-C shall not be mortgaged, assigned or encumbered in any manner whatsoever by Tenant without the prior written consent of Landlord. If Tenant defaults with respect to any provisions of this Lease. Landlord, including, but not limited to, the provisions relating to the payment of Rent, or if Tenant fails to renew the L-C at least thirty (30) days before its then managing agentexpiration, Landlord may, but shall have the right to not be required to, draw down an amount up to the face amount upon all or any portion of the L-C (provided for payment of any Rent or any other sum in default, or for the payment of any amount that if the amount to be drawn by Landlord is greater than the amount of all losses and damages Landlord may suffer (reasonably spend or which Landlord reasonably estimates that it may suffer) as a result become obligated to spend by reason of such breach or default by Tenant, then the amount drawn by Landlord must be reasonable under the then circumstances) if any of the following shall have occurred or be applicable: (A) such amount is due to Landlord under the terms and conditions of this Lease’s default, or (B) Tenant has filed a voluntary petition under the U. S. Bankruptcy Code or any state bankruptcy code (collectively, “Bankruptcy Code”), or (C) an involuntary petition has been filed against Tenant under the Bankruptcy Code, or (D) the Bank has notified Landlord that the L-C will not be renewed or extended through the LC Expiration Date, or (E) a Bank Credit Threat or Receivership (as such term is defined in Section 21.6.1 below) has occurred and Tenant has failed to comply with the requirements of either Section 21.2.5 above or 21.6 below, as applicable. If Tenant shall breach any provision of this Lease or otherwise be in default hereunder or if any of the foregoing events identified in Sections 21.3(B) through (E) shall have occurred, Landlord may, but without obligation to do so, and without notice to Tenant, draw upon the L-C, in part or in whole, and the proceeds may be applied by Landlord (i) to cure any breach or default of Tenant and/or to compensate Landlord for any and all damages other loss or damage that Landlord may suffer by reason of any kind or nature sustained or which Landlord reasonably estimates that it will sustain resulting from Tenant’s breach or default, (ii) -36- HCP, INC. [4930 Director’s Place] [Sorrento Therapeutics, Inc.] against any Rent payable by Tenant under this Lease that is not paid when due and/or (iii) to pay for all losses and damages that Landlord has suffered or that Landlord reasonably estimates that it will suffer as a result of any breach or default by Tenant under this Lease. The use, application or retention of the L-C, or any portion thereof, by Landlord shall not (a) prevent Landlord from exercising any other right or remedy provided by this Lease or by any applicable law, it being intended that Landlord shall not first be required to proceed against the L-C, and shall not nor (b) operate as a limitation on any recovery to which Landlord may otherwise be entitled. Tenant agrees not to interfere in any way with payment to Landlord of the proceeds Any amount of the L-CC which is drawn upon by Landlord, either prior to but is not used or following a “draw” applied by Landlord of shall be held by Landlord and deemed a security deposit (the “L-C Security Deposit”). If any portion of the L-CC is drawn upon, regardless of whether any dispute exists between Tenant and shall, within five (5) days after written demand therefor, either (i) deposit cash with Landlord as to Landlord’s right to draw upon the L-C. No condition or term of this Lease (which cash shall be deemed applied by Landlord to render the L-C conditional Security Deposit) in an amount sufficient to justify cause the issuer sum of the L-C in failing to honor a drawing upon such Security Deposit and the amount of the remaining L-C in a timely manner. Tenant agrees and acknowledges that (a) to be equivalent to the amount of the L-C constitutes a separate and independent contract between Landlord and the Bankthen required under this Lease, or (bii) Tenant is not a third party beneficiary of such contract, (c) Tenant has no property interest whatsoever in reinstate the L-C or to the proceeds thereofamount then required under this Lease, and (d) in the event Tenant becomes a debtor under if any chapter portion of the Bankruptcy CodeL-C Security Deposit is used or applied, neither TenantTenant shall, any trusteewithin five (5) days after written demand therefor, nor Tenant’s bankruptcy estate deposit cash with Landlord (which cash shall have any right to restrict or limit Landlord’s claim and/or rights be applied by Landlord to the L-C Security Deposit) in an amount sufficient to restore the L-C Security Deposit to the amount then required under this Lease, and Tenant’s failure to do so shall be a default under this Lease. Tenant acknowledges that Landlord has the right to transfer or mortgage its interest in the Project and the Building and in this Lease and Tenant agrees that in the event of any such transfer or mortgage, Landlord shall have the right to transfer or assign the L-C Security Deposit and/or the proceeds thereof by application L-C to the transferee or mortgagee, and in the event of Section 502(b)(6) such transfer, Tenant shall look solely to such transferee or mortgagee for the return of the U.S. Bankruptcy Code L-C Security Deposit and/or the L-C. If Tenant shall fully and faithfully perform every provision of this Lease to be performed by it, the L-C Security Deposit and/or the L-C, or otherwiseany balance thereof, shall be returned to Tenant within thirty (30) days following the expiration of the Lease Term.

Application of Letter of Credit. Tenant hereby acknowledges and agrees that Landlord is entering into this Lease in material reliance upon the ability of Landlord to draw upon the The L-C shall be held by Landlord as protection security for the full and faithful performance by Tenant of all the TCCs of its obligations under this Lease to be kept and for all losses and damages Landlord may suffer (or which Landlord reasonably estimates that it may suffer) as a result of any breach or default performed by Tenant under during the Lease Term. The L-C shall not be mortgaged, assigned or encumbered in any manner whatsoever by Tenant without the prior written consent of Landlord. If Tenant defaults with respect to any provisions of this Lease. Landlord, including, but not limited to, the provisions relating to the payment of Rent, or if Tenant fails to renew the L-C at least thirty (30) days before its then managing agentexpiration, Landlord may, but shall have the right to not be required to, draw down an amount up to the face amount upon all or any portion of the L-C (provided for payment of any Rent or any other sum in default, or for the payment of any amount that if the amount to be drawn by Landlord is greater than the amount of all losses and damages Landlord may suffer (reasonably spend or which Landlord reasonably estimates that it may suffer) as a result become obligated to spend by reason of such breach or default by Tenant, then the amount drawn by Landlord must be reasonable under the then circumstances) if any of the following shall have occurred or be applicable: (A) such amount is due to Landlord under the terms and conditions of this Lease’s default, or (B) Tenant has filed a voluntary petition under the U. S. Bankruptcy Code or any state bankruptcy code (collectively, “Bankruptcy Code”), or (C) an involuntary petition has been filed against Tenant under the Bankruptcy Code, or (D) the Bank has notified Landlord that the L-C will not be renewed or extended through the LC Expiration Date, or (E) a Bank Credit Threat or Receivership (as such term is defined in Section 21.6.1 below) has occurred and Tenant has failed to comply with the requirements of either Section 21.2.5 above or 21.6 below, as applicable. If Tenant shall breach any provision of this Lease or otherwise be in default hereunder or if any of the foregoing events identified in Sections 21.3(B) through (E) shall have occurred, Landlord may, but without obligation to do so, and without notice to Tenant, draw upon the L-C, in part or in whole, and the proceeds may be applied by Landlord (i) to cure any breach or default of Tenant and/or to compensate Landlord for any and all damages other loss or damage that Landlord may suffer by reason of any kind or nature sustained or which Landlord reasonably estimates that it will sustain resulting from Tenant’s breach or default, (ii) -36- HCP, INC. [4930 Director’s Place] [Sorrento Therapeutics, Inc.] against any Rent payable by Tenant under this Lease that is not paid when due and/or (iii) to pay for all losses and damages that Landlord has suffered or that Landlord reasonably estimates that it will suffer as a result of any breach or default by Tenant under this Lease. The use, application or retention of the L-C, or any portion thereof, by Landlord shall not prevent Landlord from exercising any other right or remedy provided by this Lease or by any applicable law, it being intended that Landlord shall not first be required to proceed against the L-C, C and shall not operate as a limitation on any recovery to which Landlord may otherwise be entitled. Tenant agrees not to interfere in any way with payment to Landlord of the proceeds Any amount of the L-CC which is drawn upon by Landlord, either prior to but is not used or following a “draw” applied by Landlord, shall be held by Landlord and deemed a security deposit (the “L-C Security Deposit”) and, in connection with such L-C Security Deposit, Tenant hereby waives the provisions of Section 1950.7 of the California Civil Code, or any successor statute. If any portion of the L-CC is drawn upon and used or applied by Landlord, regardless of whether any dispute exists between Tenant and shall, within ten (10) days after written demand therefor, either (i) deposit cash with Landlord as to Landlord’s right to draw upon the L-C. No condition or term of this Lease (which cash shall be deemed to render the L-C conditional to justify the issuer constitute part of the L-C Security Deposit) in failing an amount sufficient to honor a drawing upon cause the sum of the L-C Security Deposit and the amount of the remaining L-C to be equivalent to the amount of the L-C then required under this Lease (and if any portion of the L-C Security Deposit is thereafter used or applied, Tenant shall restore such L-C in a timely manner. Tenant agrees and acknowledges that Security Deposit to the amount then required under this Lease pursuant to the foregoing), or (aii) reinstate the L-C constitutes a separate to the amount then required under this Lease, in which case any unused portion of the then-existing L-C Security Deposit shall be returned to Tenant. Tenant acknowledges that Landlord has the right to transfer or mortgage its interest in the Project and independent contract between in this Lease and Tenant agrees that in the event of any such transfer or mortgage, Landlord and shall have the Bank, (b) Tenant is not a third party beneficiary of such contract, (c) Tenant has no property interest whatsoever in right to transfer or assign the L-C or the proceeds thereof, and (d) in the event Tenant becomes a debtor under any chapter of the Bankruptcy Code, neither Tenant, any trustee, nor Tenant’s bankruptcy estate shall have any right to restrict or limit Landlord’s claim Security Deposit and/or rights to the L-C and/or the proceeds thereof by application of Section 502(b)(6) of the U.S. Bankruptcy Code or otherwise.the

Application of Letter of Credit. Tenant hereby acknowledges and agrees that Landlord is entering into this Lease in material reliance upon the ability of Landlord to draw upon the The L-C shall be held by Landlord as protection security for the full and faithful performance by Tenant of all the terms, covenants, and conditions of its obligations under this Lease to be kept and for all losses and damages Landlord may suffer (or which Landlord reasonably estimates that it may suffer) as a result of any breach or default performed by Tenant under during the Lease Term. The L-C shall not be mortgaged, assigned or encumbered in any manner whatsoever by Tenant without the prior written consent of Landlord. If Tenant defaults with respect to any provisions of this Lease. Landlord, including, but not limited to, the provisions relating to the payment of Rent, or if Tenant fails to renew the L-C at least thirty (30) days before its then managing agentexpiration, Landlord may, but shall have the right to not be required to, draw down an amount up to the face amount upon all or any portion of the L-C (provided for payment of any Rent or any other sum in default, or for the payment of any amount that if the amount to be drawn by Landlord is greater than the amount of all losses and damages Landlord may suffer (reasonably spend or which Landlord reasonably estimates that it may suffer) as a result become obligated to spend by reason of such breach or default by Tenant, then the amount drawn by Landlord must be reasonable under the then circumstances) if any of the following shall have occurred or be applicable: (A) such amount is due to Landlord under the terms and conditions of this Lease's default, or (B) Tenant has filed a voluntary petition under the U. S. Bankruptcy Code or any state bankruptcy code (collectively, “Bankruptcy Code”), or (C) an involuntary petition has been filed against Tenant under the Bankruptcy Code, or (D) the Bank has notified Landlord that the L-C will not be renewed or extended through the LC Expiration Date, or (E) a Bank Credit Threat or Receivership (as such term is defined in Section 21.6.1 below) has occurred and Tenant has failed to comply with the requirements of either Section 21.2.5 above or 21.6 below, as applicable. If Tenant shall breach any provision of this Lease or otherwise be in default hereunder or if any of the foregoing events identified in Sections 21.3(B) through (E) shall have occurred, Landlord may, but without obligation to do so, and without notice to Tenant, draw upon the L-C, in part or in whole, and the proceeds may be applied by Landlord (i) to cure any breach or default of Tenant and/or to compensate Landlord for any and all damages of any kind other loss or nature sustained or which Landlord reasonably estimates that it will sustain resulting from Tenant’s breach or default, (ii) -36- HCP, INC. [4930 Director’s Place] [Sorrento Therapeutics, Inc.] against any Rent payable by Tenant under this Lease that is not paid when due and/or (iii) to pay for all losses and damages damage that Landlord has suffered or that Landlord reasonably estimates that it will may suffer as a result by reason of any breach or default by Tenant under this LeaseTenant's default. The use, application or retention of the L-C, or any portion thereof, by Landlord shall not prevent Landlord from exercising any other right or remedy provided by this Lease or by any applicable law, it being intended that Landlord shall not first be required to proceed against the L-C, C and shall not operate as a limitation on any recovery to which Landlord may otherwise be entitled. Tenant agrees not to interfere in any way with payment to Landlord of the proceeds Any amount of the L-CC which is drawn upon by Landlord, either prior to but is not used or following a “draw” applied by Landlord, shall be held by Landlord of and deemed a security deposit (the "L-C Security Deposit"). If any portion of the L-CC is drawn upon, regardless of whether any dispute exists between Tenant and shall, within ten (10) business days after written demand therefor, either (i) deposit cash with Landlord as to Landlord’s right to draw upon the L-C. No condition or term of this Lease (which cash shall be deemed applied by Landlord to render the L-C conditional Security Deposit) in an amount sufficient to justify cause the issuer sum of the L-C in failing to honor a drawing upon such Security Deposit and the amount of the remaining L-C in a timely manner. Tenant agrees and acknowledges that (a) to be equivalent to the amount of the L-C constitutes a separate and independent contract between Landlord and the Bank, then required under this Lease or (bii) Tenant is not a third party beneficiary of such contract, (c) Tenant has no property interest whatsoever in reinstate the L-C or to the proceeds thereofamount then required under this Lease, and (d) in the event Tenant becomes a debtor under if any chapter portion of the Bankruptcy CodeL-C Security Deposit is used or applied, neither TenantTenant shall, any trusteewithin ten (10) business days after written demand therefor, nor Tenant’s bankruptcy estate deposit cash with Landlord (which cash shall have any right to restrict or limit Landlord’s claim and/or rights be applied by Landlord to the L-C Security Deposit) in an amount sufficient to restore the L-C Security Deposit to the amount then required under this Lease, and Tenant's failure to do so shall be a default under this Lease. Tenant acknowledges that Landlord has the right to transfer or mortgage its interest in the Real Property and the Building and in this Lease and Tenant agrees that in the event of any such transfer or mortgage, Landlord shall have the right to transfer or assign the L-C Security Deposit and/or the proceeds thereof by application L-C to the transferee or mortgagee, and in the event of Section 502(b)(6) such transfer, Tenant shall look solely to such transferee or mortgagee for the return of the U.S. Bankruptcy Code L-C Security Deposit and/or the L-C. Tenant shall, within ten (10) business days of request by Landlord, execute such further instruments or otherwiseassurances as Landlord may reasonably deem necessary to evidence or confirm Landlord's transfer or assignment of the L-C Security Deposit and/or the L-C to such transferee or mortgagee.

Application of Letter of Credit. Tenant hereby acknowledges and agrees that Landlord is entering into this Lease in material reliance upon the ability of Landlord to draw upon the The L-C shall be held by Landlord as protection security for the full and faithful performance by Tenant of all the TCC's of its obligations under this Lease to be kept and for all losses and damages Landlord may suffer (or which Landlord reasonably estimates that it may suffer) as a result of any breach or default performed by Tenant under during the Lease Term. The L-C shall not be mortgaged, assigned or encumbered in any manner whatsoever by Tenant without the prior written consent of Landlord. If Tenant defaults with respect to any provisions of this Lease. Landlord, including, but not limited to, the provisions relating to the payment of Rent, or if Tenant fails to renew the L-C at least thirty (30) days before its then managing agentexpiration, Landlord may, but shall have the right to not be required to, draw down an amount up to the face amount upon all or any portion of the L-C (provided for payment of any Rent or any other sum in default, or for the payment of any amount that if the amount to be drawn by Landlord is greater than the amount of all losses and damages Landlord may suffer (reasonably spend or which Landlord reasonably estimates that it may suffer) as a result become obligated to spend by reason of such breach or default by Tenant, then the amount drawn by Landlord must be reasonable under the then circumstances) if any of the following shall have occurred or be applicable: (A) such amount is due to Landlord under the terms and conditions of this Lease's default, or (B) Tenant has filed a voluntary petition under the U. S. Bankruptcy Code or any state bankruptcy code (collectively, “Bankruptcy Code”), or (C) an involuntary petition has been filed against Tenant under the Bankruptcy Code, or (D) the Bank has notified Landlord that the L-C will not be renewed or extended through the LC Expiration Date, or (E) a Bank Credit Threat or Receivership (as such term is defined in Section 21.6.1 below) has occurred and Tenant has failed to comply with the requirements of either Section 21.2.5 above or 21.6 below, as applicable. If Tenant shall breach any provision of this Lease or otherwise be in default hereunder or if any of the foregoing events identified in Sections 21.3(B) through (E) shall have occurred, Landlord may, but without obligation to do so, and without notice to Tenant, draw upon the L-C, in part or in whole, and the proceeds may be applied by Landlord (i) to cure any breach or default of Tenant and/or to compensate Landlord for any and all damages of any kind other loss or nature sustained or which Landlord reasonably estimates that it will sustain resulting from Tenant’s breach or default, (ii) -36- HCP, INC. [4930 Director’s Place] [Sorrento Therapeutics, Inc.] against any Rent payable by Tenant under this Lease that is not paid when due and/or (iii) to pay for all losses and damages damage that Landlord has suffered or that Landlord reasonably estimates that it will may suffer as a result by reason of any breach or default by Tenant under this LeaseTenant's default. The use, application or retention of the L-C, or any portion thereof, by Landlord shall not prevent Landlord from exercising any other right or remedy provided by this Lease or by any applicable law, it being intended that Landlord shall not first be required to proceed against the L-C, C and shall not operate as a limitation on any recovery to which Landlord may otherwise be entitled. Tenant agrees not to interfere in any way with payment to Landlord of the proceeds Any amount of the L-CC which is drawn upon by Landlord, either prior to but is not used or following a “draw” applied by Landlord, shall be held by Landlord and deemed a security deposit (the "L-C SECURITY DEPOSIT"), and, in connection with any such L-C Security Deposit, Tenant hereby waives the provisions of Section 1950.7 of the California Civil Code, or any successor statute. If any portion of the L-CC is drawn upon, regardless of whether any dispute exists between Tenant and shall, within ten (10) days after written demand therefor, either (i) deposit cash with Landlord as to Landlord’s right to draw upon the L-C. No condition or term of this Lease (which cash shall be deemed applied by Landlord to render the L-C conditional Security Deposit) in an amount sufficient to justify cause the issuer sum of the L-C in failing to honor a drawing upon such Security Deposit and the amount of the remaining L-C in a timely manner. Tenant agrees and acknowledges that (a) to be equivalent to the amount of the L-C constitutes a separate and independent contract between Landlord and the Bank, then required under this Lease or (bii) Tenant is not a third party beneficiary of such contract, (c) Tenant has no property interest whatsoever in reinstate the L-C or to the proceeds thereofamount then required under this Lease, and (d) in the event Tenant becomes a debtor under if any chapter portion of the Bankruptcy CodeL-C Security Deposit is used or applied, neither TenantTenant shall, any trusteewithin ten (10) days after written demand therefor, nor Tenant’s bankruptcy estate deposit cash with Landlord (which cash shall have any right to restrict or limit Landlord’s claim and/or rights be applied by Landlord to the L-C Security Deposit) in an amount sufficient to restore the L-C Security Deposit to the amount then required under this Lease, and Tenant's failure to do so shall be a default under this Lease; provided, however, that upon Tenant's satisfaction of its economic obligations and restoration of the L-C Security Deposit pursuant to this sentence, any unused portion of the drawn upon funds shall be returned to Tenant. Tenant acknowledges that Landlord has the right to transfer or mortgage its interest in the Real Property and the Center and in this Lease and Tenant agrees that in the event of any such transfer or mortgage, Landlord shall have the right to transfer or assign the L-C Security Deposit and/or the proceeds thereof by application L-C to the transferee or mortgagee, and in the event of Section 502(b)(6) such transfer, Tenant shall look solely to such transferee or mortgagee for the return of the U.S. Bankruptcy Code L-C Security Deposit and/or the L-C. Landlord shall pay all costs associated with the transfer or otherwisere-issuance of the L-C due to Landlord's transfer or assignment. Tenant shall, within five (5) days of request by Landlord, execute such further instruments or assurances as Landlord may reasonably deem necessary to evidence or confirm Landlord's transfer or assignment of the L-C Security Deposit and/or the L-C to such transferee or mortgagee. If Tenant is not then in default under this Lease, the L-C Security Deposit and/or the L-C, or any balance thereof, shall be returned to Tenant within thirty (30) days following the expiration of the Lease Term.

Application of Letter of Credit. Tenant hereby acknowledges and agrees that Landlord is entering into this Lease and the Companion Lease in material reliance upon the ability of Landlord to draw upon the L-C as protection for the full and faithful performance by Tenant of all of its obligations under this Lease and the Companion Lease, and for all losses and damages Landlord may suffer (or which Landlord reasonably estimates that it may suffer) as a result of any breach or default by Tenant under this Lease or the Companion Lease. Landlord, or its then managing agent, shall have the right to draw down an amount up to the face amount of the L-C (provided that if the amount to be drawn by Landlord is greater than the amount of all losses and damages Landlord may suffer (or which Landlord reasonably estimates that it may suffer) as a result of such breach or default by Tenant, then the amount drawn by Landlord must be reasonable under the then circumstances) if any of the following shall have occurred or be applicable: (A1) such amount is due to Landlord under the terms and conditions of this Lease or the Companion Lease, or (B2) Tenant has filed a voluntary petition under the U. S. Bankruptcy Code or any state bankruptcy code (collectively, “Bankruptcy Code”), or (C3) an involuntary petition has been filed against Tenant under the Bankruptcy Code, or (D4) the Bank has notified Landlord that the L-C will not be renewed or extended through the LC Expiration DateDate and Tenant fails to obtain a substitute L-C in the form required by this Section 3.5 prior to the date that is fifteen (15) days prior to the expiration date of the then-existing L-C, or (E5) a Bank Credit Threat or Receivership (as such term is defined in Section 21.6.1 3.5.F(1), below) has occurred and Tenant has failed to comply with the requirements of either Section 21.2.5 3.5.B(5) above or 21.6 Section 3.5.F below, as applicable. If Tenant shall breach any provision of this Lease or the Companion Lease, or otherwise be in default hereunder or under the Companion Lease, or if any of the foregoing events identified in Sections 21.3(Bthis Section 3.5.C(2) through (E5) shall have occurred, Landlord may, but without obligation to do so, and without notice to Tenant, draw upon the L-C, in part or in whole, and the proceeds may be applied by Landlord (i) to cure any breach or default of Tenant and/or to compensate Landlord for any and all damages of any kind or nature sustained or which Landlord reasonably estimates that it will sustain resulting from Tenant’s breach or default, (ii) -36- HCP, INC. [4930 Director’s Place] [Sorrento Therapeutics, Inc.] against any Rent payable by Tenant under this Lease that is not paid when due and/or (iii) to pay for all losses and damages that Landlord has suffered or that Landlord reasonably estimates that it will suffer as a result of any breach or default by Tenant under this Leasetherefrom. The use, application or retention of the L-C, or any portion thereof, by Landlord shall not prevent Landlord from exercising any other right or remedy provided by this Lease Lease, by the Companion Lease, or by any applicable law, it being intended that Landlord shall not first be required to proceed against the L-C, and shall not operate as a limitation on any recovery to which Landlord may otherwise be entitled. Tenant agrees not to interfere in any way with payment to Landlord of the proceeds of the L-C, either prior to or following a “draw” by Landlord of any portion of the L-CC under the provisions thereof, regardless of whether any dispute exists between Tenant and Landlord as to Landlord’s right to draw upon the L-C. No condition or term of this Lease shall be deemed to render the L-C conditional to justify the issuer of the L-C in failing to honor a drawing upon such L-C in a timely manner. manner in accordance with the requirements of the L-C. Tenant agrees and acknowledges that (ai) the L-C constitutes a separate and independent contract between Landlord and the Bank, (bii) Tenant is not a third party beneficiary of such contract, (ciii) Tenant has no property interest whatsoever in the L-C or the proceeds thereof, and (div) in the event Tenant becomes a debtor under any chapter of the Bankruptcy Code, neither Tenant, any trustee, nor Tenant’s bankruptcy estate shall have any right to restrict or limit Landlord’s claim and/or rights to the L-C and/or the proceeds thereof by application of Section 502(b)(6) of the U.S. U. S. Bankruptcy Code or otherwise.