PDL BioPharma (PDLI)

Section 7.01 Property/Rental Insurance for Premises

At all times during the Lease Term, Lessor shall keep Building 9, any tenant improvements or Alterations made by Lessee therein and the Project insured against loss or damage by fire and those risks normally included in the term “all risk,” extended coverage, fire and casualty insurance, including, without limitation, coverage for (i) earthquake and earthquake sprinkler leakage, (ii) flood, (iii) loss of rents and extra expense for eighteen (18) months, including scheduled rent increases, (iv) boiler and machinery, and (v) fire damage legal liability, including waiver of subrogation. Lessee shall pay Lessee’s Share of any deductibles. The amount of such insurance shall not be less than 100% of replacement cost. Insurance shall include a Building Ordinance and Increased Cost of Construction Endorsement insuring the increased cost of reconstructing the Premises incurred due to the need to comply with applicable statutes, ordinances and requirements of all municipal, state and federal authorities now in force, which or may be in force hereafter. Any recovery received from said insurance policy shall be paid to Lessor and thereafter applied by Lessor to the reconstruction of the Premises in accordance with the provisions of Article VIII below. Lessee, as part of the Operating Expenses, shall reimburse Lessor for Lessee’s Share of the cost of the premiums for all such insurance in accordance with Article IV. Such reimbursement shall be made within fifteen (15) days of Lessee’s receipt of a copy of Lessor’s statement therefore. To the extent commercially available in Lessor’s reasonable business judgment, Lessor’s insurance shall have a deductible not greater than fifteen percent (15%) for earthquake and ten percent (10%) for the basic “all risk” coverage.

Notwithstanding the foregoing, Lessee may, at Lessee’s election, maintain at Lessee’s sole cost and expense a separate, additional policy of insurance insuring the Improvements or Alterations made by Lessee against loss or damage by fire and those risks normally included in the term “all risk,” extended coverage, fire and casualty insurance. Any recovery received from said insurance policy shall be paid to Lessee in accordance with the provisions of Article VIII below.

Section 7.01 Property/Rental Insurance for Premises

At all times during the Lease Term, Lessor shall keep Building 10, any Tenant Improvements or Alterations made by Lessee therein and the Project insured against loss or damage by fire and those risks normally included in the term “all risk,” extended coverage, fire and casualty insurance, including, without limitation, coverage for (i) earthquake and earthquake sprinkler leakage, (ii) flood, (iii) loss of rents and extra expense for eighteen (18) months, including scheduled rent increases, (iv) boiler and machinery, and (v) fire damage legal liability, including waiver of subrogation. Lessee shall pay Lessee’s Share of any deductibles. The amount of such insurance shall not be less than 100% of replacement cost. Insurance shall include a Building Ordinance and Increased Cost of Construction Endorsement insuring the increased cost of reconstructing the Premises incurred due to the need to comply with applicable statutes, ordinances and requirements of all municipal, state and federal authorities now in force, which or may be in force hereafter. Any recovery received from said insurance policy shall be paid to Lessor and thereafter applied by Lessor to the reconstruction of the Premises in accordance with the provisions of Article VIII below. Lessee, as part of the Operating Expenses, shall reimburse Lessor for Lessee’s Share of the cost of the premiums for all such insurance in accordance with Article IV. Such reimbursement shall be made within fifteen (15) days of Lessee’s receipt of a copy of Lessor’s statement therefore. To the extent commercially available in Lessor’s reasonable business judgment, Lessor’s insurance shall have a deductible not greater than fifteen percent (15%) for earthquake and ten percent (10%) for the basic “all risk” coverage.

Notwithstanding the foregoing, Lessee may, at Lessee’s election, maintain at Lessee’s sole cost and expense a separate, additional policy of insurance insuring the Improvements or Alterations made by Lessee against loss or damage by fire and those risks normally included in the term “all risk,” extended coverage, fire and casualty insurance. Any recovery received from said insurance policy shall be paid to Lessee in accordance with the provisions of Article VIII below.