EXHIBIT 10.44
STANDARD INDUSTRIAL GROSS LEASE
This STANDARD INDUSTRIAL GROSS LEASE ("Lease") is entered into as of December
12, 1996, by and between Sorrento Business Complex, a Limited Partnership
("Landlord"), and Sequenom, Inc., a California Corporation ("Tenant").
1. BASIC LEASE TERMS.
The basic terms of the Lease set forth in this Article 1 shall be read in
conjunction with the other Articles of this Lease, which define and explain the
basic terms.
1.1 Address for Notice (see Section 24.19):
Landlord: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tenant: At the Premises, or
----------------
Address for Tenant other than at the Premises (required):
-------------------------------------------------------------
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1.2 Description of Premises:
Center Name: Sorrento Business Complex
Address: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Suite/Unit: see Exhibit "A"
Approximate Rentable Square Footage (see Exhibit "A"): 11,971
1.3 Commencement Date: April 1, 1997.
1.4 Lease Term (see Article 3): Approximately three (3) years and -0- months,
beginning on the Commencement Date and ending on the last day of the
calendar month of March, 2000 (the "Expiration Date").
1.5 Minimum Monthly Rent: $12,000.00 per month for the first Lease Year, as
provided in Article 4. The Minimum Monthly Rent shall be increased on the
first day of the second Lease Year and each Lease Year thereafter to be
fixed as follows: 4/l/98 - 3/31/99 - $18,585 per month; 4/l/99 - 3/31/2000
- $19,235 per month.
1.6 Security Deposit: $12, 000.00 (see Article 5).
1.7 Base Years:
(a) Base Year for Real Property Taxes (paid by Landlord): Tax Year 1996 -
1997 (see Article 8).
(b) Base Year for Insurance Premiums (paid by Landlord): 1997 (see
Article 9).
1.8 Permitted Use (see Article 11): the legal office, research and
development, storage and science related uses associated with a
biotechnology company and for no other use.
1.9 Tenant's Guarantor (if none, so state): none
1.10 Tenant's Parking Spaces (Unassigned) (see Section 11.6): thirty-six (36)
1.11 Landlord's Broker (if none, so state): Asset Management Group
Tenant's Broker (if none, so state): ▇▇▇▇ ▇▇▇▇▇▇▇ & Company
1.12 Additional Provisions: The following additional provisions are attached
to and made a part of this Lease (if none, so state): First Addendum
1.13 Exhibits: The following Exhibits are attached to and made a part of this
Lease:
Exhibit "A" Description of Premises
Exhibit "B" Rules and Regulations
Exhibit "C" Sign Criteria
2. LEASE OF PREMISES.
Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord,
the premises (the "Premises") described in Section 1.2, which are indicated on
the site/floor plan attached as Exhibit "A". The Premises are part of the
office or industry center identified in Section 1.2 (the "Center"). The
approximate Rentable Square Footage identified in Section 1 ___________
measurement of the net leasable floor area of the Premises, as determined by
Landlord and applied on a consistent basis throughout the Center.
3. LEASE TERM.
3.1 Commencement. The term of this Lease (the "Lease Term") shall
commence on the Commencement Date stated in Section 1.3 and shall continue for
the period stated in Section 1.4, unless sooner terminated pursuant to any
provision of this Lease.
3.2 Delay In Commencement. If Landlord cannot deliver possession of the
Premises to Tenant on the Commencement Date specified in Section 1 .3 for any
reason, Landlord shall not be subject to any liability therefor. Such non-
delivery shall not affect the validity of this Lease nor the obligations of
Tenant hereunder. However: (a) Tenant shall not be obligated to pay rent until
possession of the Premises is delivered to Tenant, (b) if possession of the
Premises is not delivered to Tenant within thirty (30) days of the Commencement
Date, the last day of the Lease Term shall be extended by the total number of
days that possession is so delayed, plus the minimum number of additional days
necessary to make the Expiration Date the last day of a calendar month, and (c)
if Landlord has not delivered possession of the Premises within ninety (90) days
after the Commencement Date, Tenant may elect to terminate this Lease by
delivering written notice to Landlord within ten (10) days thereafter, in which
event the parties shall be discharged from all further obligations hereunder.
3.3 Early Occupancy. If Tenant occupies the Premises prior to the
Commencement Date, such occupancy shall be subject to all provisions of this
Lease. Such occupancy shall not advance the Expiration Date.
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4. RENT.
4.1 Minimum Monthly Rent. Tenant shall pay minimum monthly rent ("Minimum
Monthly Rent") in the initial amount stated in Section 1.5, which amount shall
be subject to increase as provided in Sections 1.5 and 4.3. Tenant shall pay the
Minimum Monthly Rent on or before the first day of each calendar month, in
advance, at the office of Landlord or at such other place designated by
Landlord, without deduction, offset or prior demand. If the Commencement Date
is not the first day of a calendar month, the rent for the partial month at the
beginning of the Lease Term shall be prorated on a per diem basis and shall be
due on the first day of such partial month.
4.2 Lease Year. As used in this Lease, the term "Lease Year" means (i)
the first period of twelve full calendar months following the Commencement Date
(including, if the Commencement Date is not the first day of a calendar month,
the period between the Commencement Date and the next first day of the month),
(ii) each period of twelve full calendar months thereafter, and(iii) any
remaining period at the end of the Lease Term of less than twelve full calendar
months.
4.3 Deleted.
4.4 Additional Rent. All charges payable by Tenant in addition to Minimum
Monthly Rent shall constitute Additional Rent to Landlord. All remedies
available to Landlord for nonpayment of rent shall be available for nonpayment
of any such Additional Rent. Unless this Lease provides otherwise, all
Additional Rent shall be paid by Tenant, without limitation or offset, within
fifteen (15) days after Tenant's receipt of a statement from Landlord.
Additional Rent includes, without limitation, Maintenance and Repairs (see
Article 7), excess Real Property Taxes (see Article 8), excess insurance costs
(see Article 9), Utilities (see Article 10), and attorneys' fees and costs (see
Article 24). All Minimum Monthly Rent, Additional Rent, and all other charges
and monetary amounts due Landlord from Tenant hereunder shall constitute rent.
4.5 Impounds. Landlord shall have the right, but not the obligation, to
collect and impound, in advance, any or all components of Real Property Taxes
and insurance costs based upon Landlord's reasonable estimate of Tenant's future
liability or such amounts under this Lease. Landlord shall initially establish
the monthly amount of such impound ("Monthly Impound Payments"), based upon its
estimate of one-twelfth of Tenant's annual liability therefor. Landlord shall
have the right, at any time during the Lease Term, to adjust the amount of the
Monthly Impound Payment upon notice to Tenant. The Monthly Impound Payment
shall be due and payable on the first day of each month throughout the Lease
Term. Any failure to pay the Monthly Impound Payment when due shall be an Event
of Default under this Lease and shall entitle Landlord to exercise any or all of
its remedies available in the same manner as the failure to pay rent, including
the imposition of late charges and interest, and the right of Landlord to
require that future payment of the Monthly Impound Payments be made by cashier's
check. Upon the occurrence of any Event of Default by Tenant hereunder,
Landlord shall have the right to apply all unapplied amounts of Monthly Impound
Payments to Tenant's default. Within ninety (90) days after the end of each
calendar year, Landlord shall deliver to Tenant an accounting of Tenant's actual
liability for Real Property Taxes and insurance costs and the estimated amounts
paid by Tenant. Any overpayment by Tenant shall be credited against next
Monthly Impound Payments due hereunder, or, at Landlord's option, shall be
remitted to Tenant forthwith. Tenant shall pay the amount of any underpayment
within fifteen (15) days after receipt of the accounting. Tenant acknowledges
that the Monthly Impound Payments are
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estimates only and not a representation or the amount of Tenant's ultimate
liability for Real Property Taxes and insurance costs.
5. SECURITY DEPOSIT.
Upon execution of this Lease, Tenant shall deposit with Landlord the amount
specified in Section 1.6 (the "Security Deposit"), to be held by Landlord,
without liability for interest, as security for Tenant's performance of its
obligations under this Lease. Landlord shall not be required to keep the
Security Deposit separate from its other accounts. Landlord may apply all or a
part of the Security Deposit to any unpaid rent or other monetary payments due
from Tenant (including unpaid Additional Rent or Monthly Impound Payments) or to
cure any other default of Tenant hereunder and to compensate Landlord for all
damage and expense sustained as a result of such default. If all or any portion
of the Security Deposit is so applied, Tenant shall deposit cash sufficient to
restore the Security Deposit to its original amount within fifteen (15) days
after receipt of Landlord's written demand. If Tenant fully and faithfully
performs each of its obligations under this Lease, the Security Deposit or any
balance thereof shall be returned to Tenant within 30 days of the later of the
expiration or earlier termination of this Lease or the vacation of the Premises
by Tenant. At Landlord's request, Tenant shall accompany Landlord or Landlord's
representative on a "walk-through" of the Premises prior to Landlord's return of
the Security Deposit.
6. COMMON FACILITIES.
"Common Facilities" means all areas, facilities, utilities, equipment and
services provided by Landlord for the common use or benefit of the occupants of
the Center, and their employees, agents, customers and other invitees, including
without limitation: building lobbies, common corridors and hallways, restrooms,
pedestrian walkways, driveways and access roads, access facilities for disabled
persons (including elevators), truck serviceways, loading docks, garages,
driveways, parking lots, landscaped areas, stairways, elevators, retaining
walls, all areas required to be maintained under the conditions of governmental
approvals for the Center, and other generally understood public or common areas.
Landlord reserves the right to relocate, alter, improve, or adjust the size and
location of any Common Facilities from time to time without liability to Tenant.
7. MAINTENANCE AND REPAIRS.
7.1 Tenant's Obligations. Except as provided in Section 7.2 and the
Addendum; Tenant shall keep the Premises in good order, condition and repair
during the Lease Term, including without limitation: all nonstructural,
interior, exterior, and landscaped areas, all heating, ventilation and air
conditioning systems and equipment exclusively serving the Premises; all glass,
glazing, windows, window moldings, partitions, doors and door hardware; all
interior painting; all fixtures and appurtenances in the Premises or exclusively
serving the Premises including electrical, lighting and plumbing fixtures; and
all other portions of the Premises seen or unseen. Tenant shall replace at its
sole cost and expense any of the systems and other portions of the Premises for
which it is responsible hereunder during the Lease Term, if necessary. Tenant
shall promptly replace any portion of the Premises or system or equipment
exclusively serving the Premises in the Premises which cannot be fully repaired,
regardless of whether the benefit of such replacement extends beyond the Lease
Term. If any heating and air conditioning system or equipment exclusively
serves the Premises, Tenant shall additionally obtain and keep in force a
preventive maintenance contract providing for the regular (at least quarterly)
inspection and maintenance of the heating and air conditioning system (including
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leaks around ducts, pipes, vents, and other parts of the air conditioning) by a
reputable licensed heating and air conditioning contractor acceptable to
Landlord. Prior to April 1 of each calendar year, Tenant shall deliver Landlord
written confirmation from such contractor verifying that such a contract has
been entered into and that the required service will be provided.
Notwithstanding the foregoing, Landlord shall have the right, upon written
notice to Tenant, to undertake the responsibility for preventive maintenance and
repair of the heating and air conditioning system, at Tenant's sole cost and
expense.
7.2 Landlord's Obligations. Landlord shall repair and maintain the Common
Facilities, and the roof, the foundations and structural portions of the
Premises and any building of which the Premises are a part. Provided, however,
that except to the extent paid for by insurance proceeds Tenant shall pay the
(a) the full amount of any maintenance and repairs necessitated by any act,
omission, conduct or activity of, or beach of this lease by, Tenant or any of
Tenant's officers, agents, customers or invitees (plus fifteen percent (15%) of
the cost thereof to reimburse Landlord for overhead), and (b) any maintenance
and repairs necessitated by breaking and entering of the Premises. Tenant shall
pay the cost of such required repairs, as Additional Rent, within
fifteen(l5)days after receipt of a statement from Landlord. There shall be no
abatement of rent, and no liability of Landlord, by reason of any injury to or
interference with Tenant's business arising from the making of any repairs, to
any portion of the Premises or the Center. Except as provided in Article 16
(Damage and Destruction) and Article 17 (Condemnation), Landlord shall have
absolutely no other responsibility to repair, maintain or replace any portion of
the Premises at any time. Tenant waives the right to make repairs at Landlord's
expense under California Civil Code Section 1942, or under any other law,
statute or ordinance now or hereafter in effect. Landlord's obligations under
this Section are not intended to alter or modify in any way the provisions of
Article 12.
7.3 Performance By Landlord. If Tenant refuses or neglects to perform its
maintenance obligations hereunder to the reasonable satisfaction of Landlord,
Landlord shall have the right (but not the obligation), upon ten (10) days'
prior notice to Tenant, to enter the Premises and perform such repairs and
maintenance on behalf of Tenant. Landlord shall also have the right (but not
the obligation), without prior notice to Tenant, to correct or remove any
dangerous or hazardous condition or to repair the heating, ventilation, air-
conditioning and plumbing systems and broken glass or glazing if Tenant fails to
correct or repair the same within 24 hours after the need arises. Landlord
shall not be liable to Tenant for any loss or damage to Tenant's merchandise,
fixtures, or other property or to Tenant's business in connection with
Landlord's performance hereunder, and Tenant shall pay Landlord's costs plus
fifteen percent (15%) of such amount for overhead, upon presentation of a
statement therefor, as Additional Rent. Tenant shall also pay interest at the
rate provided in Section 22.4 from the date of completion of repairs by Landlord
to the date paid by Tenant.
8. REAL PROPERTY TAXES.
8.1 Payment of Excess Real Property Taxes by Tenant. Tenant shall pay all
Real Property Taxes applicable to the Premises during the Lease Term that
exceed, during any tax year the Real Property Taxes for the Base Year identified
in Section 1.7. If the Premises are not separately assessed, a share of the tax
▇▇▇▇ that includes the Premises shall be allocated to the Premises. Such share
shall be equitably determined by Landlord based upon the Rentable Square Footage
of the Premises compared to the total Rentable Square Footage covered by the tax
▇▇▇▇, the respective valuations assigned in the assessor's worksheet, or other
reasonably available information. Tenant shall pay such obligation for excess
Real Property Taxes to
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Landlord, to the extent such obligation exceeds any amount thereof impounded
under Section 4.5, within fifteen (15) days after receipt of a statement from
Landlord.
8.2 Real Property Taxes Defined. "Real Property Taxes" means all taxes,
assessments, levies, fees and other governmental charges levied on or
attributable to the Premises or any part thereof, including without limitation:
(a) real property taxes and assessments levied with respect to all or a portion
of the Premises, (b) assessments, charges and fees charged by governmental
agencies or districts for services or facilities provided to the Premises, (c)
transfer, transaction, rental, gross receipts, license or similar taxes or
charges measured by rent received by Landlord, excluding any federal or state
income, franchise, estate or inheritance taxes of Landlord, (d) taxes based upon
a reassessment of the Premises due to a transfer or change of ownership, and (e)
any assessment, charge or fee that is a substitute in whole or in part for any
tax now or previously included within the definition of Real Property Taxes. If
Landlord elects to contest an assessment of any Real Property Taxes, Landlord
shall have the right to recover its actual costs of such contest (including
attorneys' fees and costs) as part of Real Property Taxes, but only to the
extent such contest has resulted in a reduction of Real Property Taxes. Tenant
shall not be entitled to the benefit of any reduction, refund, rebate or credit
accruing or payable to Landlord prior to the commencement of or after the
expiration or other termination of the Lease Term.
8.3 Personal Property Taxes. Tenant shall pay prior to delinquency all
taxes charged against trade fixtures, furnishings, equipment or any other
personal property belonging to Tenant. Tenant shall attempt to have such
personal property taxed separately from the Premises. If any such taxes on
Tenant's personal property are levied against Landlord or the Premises, or if
the assessed value of the Premises is increased by inclusion of a value placed
upon such personal property of Tenant, then: (a) Landlord, after written notice
to Tenant, shall have the right to pay the taxes levied against Landlord, or the
taxes based upon such increased valuation, but under protest if so requested by
Tenant in writing, and (b) Tenant shall pay to Landlord the taxes levied against
Landlord, or the taxes resulting from such increased valuation, within fifteen
(15) days after Tenant's receipt of written statement from Landlord.
9 INSURANCE.
9.1 All Risk Coverage. During the Lease Term, Landlord shall maintain
insurance covering loss or damage to the Premises (excluding Tenant's
Alterations, fixtures, equipment and personal property), insuring against any or
all risks of physical loss (and including, at Landlord's option, flood and
earthquake coverage), with the scope and amounts of such coverage as determined
by Landlord. Said insurance shall provide for payment of loss thereunder to
Landlord or to the holder of a first mortgage or deed of trust on the Premises.
Landlord shall also maintain during the Lease Term, at Tenant's expense, a
policy of rental income insurance covering a period of one year, with loss
payable to Landlord.
9.2 Tenant's Personal Property and Fixtures. Tenant shall at all times
maintain insurance against any or all risks of physical loss in an amount
adequate to cover the cost of replacement of all of Tenant's Alterations, trade
fixtures, equipment and personal property. Such policy shall be issued by an
insurance company approved by Landlord, shall name Landlord and Landlord's
lender as additional insureds, and shall provide that no cancellation or
reduction in coverage shall be effective until thirty (30) days after written
notice to Landlord and Landlord's lender. Tenant shall deliver a certificate
evidencing such insurance to Landlord and a renewal or binder at least twenty
(20) days prior to expiration. Tenant acknowledges that Landlord's insurance is
not intended to cover Tenant's Alterations, trade fixtures, equipment, and
personal
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property. Provided, however, insurance required of it, that Landlord may obtain
at Tenant's expense any or all of the insurance described in this Section.
9.3 Tenant's Liability Insurance. Tenant shall, at Tenant's sole cost and
expense, provide comprehensive general liability insurance, fully covering and
indemnifying Landlord and Landlord's officers, directors, shareholders,
partners, principals, employees, agents, representatives, and other related
entities and individuals (together with, at Landlord's election, Landlord's
lender), as additional insureds, against any and all claims arising from
personal injury, death, and/or property damage occurring in or about the
Premises or the Center during the period of Tenant's possession (actual and/or
constructive) at the Premises. The initial limits of such insurance shall be at
least $2,000,000 combined single liability limit if the Rentable Square Footage
of the Premises (as indicated in Section 1.2) exceeds 3,000 square feet, or
$1,000,000 combined single liability limit if such Rentable Square Footage is
3,000 square feet or less. Such limits shall be subject to periodic increase,
at Landlord's option, based upon inflation, increased liability awards, lender
requirements, the recommendations of Landlord's professional insurance advisors,
and other relevant factors. Such liability insurance limits shall be subject to
periodic increase, at Landlord's election, based upon inflation, increased
liability awards, lender requirements, the recommendations of Landlord's
professional insurance advisors, and other relevant factors. Tenant shall also,
at its sole cost and expense, obtain workers' compensation insurance for the
protection of its employees such as will relieve Landlord of all liability to
such employees for any and all accidents that may arise on or about the Premises
or the Center. All insurance required to be carried by Tenant shall be primary
and noncontributory to any insurance carried by Landlord, regardless of the
absence of negligence or other fault of Tenant for alleged injury, death and/or
property damage. Each policy of insurance required to be carried by Tenant
hereunder shall: (a) contain cross-liability and contractual liability
endorsements, (b) provide that no cancellation or reduction in coverage shall be
effective until thirty (30) days after written notice to Landlord and Landlord's
lender, (c) be issued by an insurer licensed in California and reasonably
approved by Landlord, and (d) shall insure Tenant's performance of the indemnity
provisions of Article 13, but the amount of such insurance shall not limit
Tenant's liability nor relieve Tenant of any obligation hereunder. Prior to the
Commencement Date, Tenant shall deliver a certificate evidencing all such
insurance to Landlord. Tenant shall deliver a renewal binder of such policy at
least thirty (30) days prior to expiration thereof. Tenant shall, at Tenant's
expense, maintain such other liability insurance as Tenant deems necessary to
protect Tenant. Tenant shall be in material breach of this Lease if Tenant
fails to obtain the insurance required under this Section, or if Tenant obtains
insurance with terms, conditions and/or exclusions that are inconsistent with
the requirements and terms of this Lease.
9.4 Payment of Insurance Premium Increases and Deductibles. Tenant shall
pay directly all premiums for its liability insurance required under Section
9.3, for its personal property insurance to be carried by Tenant as required
under this Article, and for all other insurance Tenant elects to carry. Tenant
shall pay the premiums for the insurance to be carried or obtained by Landlord
as required under this Article in excess of the premiums payable during the Base
Year described in Section 1.7(b), whether such increase is the result of lender
requirements, increased valuation of the Premises, or general rate increases.
If the Lease Term expires before the expiration of any such insurance policy,
Tenant's liability for premiums shall be prorated on an annual basis. Tenant
shall pay such obligation for excess insurance premiums to Landlord, to the
extent such obligation exceeds any amount thereof impounded under Section 4.5,
within fifteen (15) days after receipt of a statement from Landlord. If any
insurance policy
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maintained by Landlord covers improvements or real property other than the
Premises, Landlord shall reasonably determine the portion of the premiums
applicable to the Premises, and Tenant shall pay such its share thereof of the
excess thereof as provided in this Section. In addition, Tenant shall pay the
full amount of any deductible amount under Landlord's insurance policies, or
where applicable its share thereof as equitably determined by Landlord, within
fifteen (15) days after receipt of a statement from Landlord.
9.5 Waiver of Subrogation. Each party waives all rights of recovery
against the other party, and its officers, employees, agents and representatives
for any claims for loss or damage to person or property caused by or resulting
from fire or any other risks insured against under any insurance policy in force
at the time of such loss or damage. Each party shall cause each insurance
policy obtained by it to provide that the insurer waives all rights of recovery
by way of subrogation against the other party in connection with any damage
covered by such policy.
9.6 Tenant's Use Not to Increase Premium. Tenant shall not keep, use,
manufacture, assemble, sell or offer for sale in or upon the Premises any
article that may be prohibited by, or that might invalidate, in whole or in
part, the coverage afforded by, a standard form of fire or all risk insurance
policy. Tenant shall pay the entire amount of any increase in premiums that may
be charged during the Lease Term for the insurance that may be maintained by
Landlord on the Premises or the Center resulting from the type of materials or
products stored, manufactured, assembled or sold by Tenant in the Premises,
whether or not Landlord has consented to the same. In determining whether
increased premiums are the result of Tenant's use of the Premises, a schedule
issued by the entity making the insurance rate on the Premises showing the
various components of such rate shall be conclusive evidence of the items and
charges that make up the fire insurance rate on the Premises.
9.7 Boiler and Machinery Coverage. At Landlord's option, Landlord may
maintain, at Tenant's expense, boiler broad form insurance, if applicable, in
the amount of One Hundred Fifty Thousand Dollars ($150,000) in the name of
Landlord. Tenant shall pay the premium therefor, or its share thereof equitably
determined by Landlord if the Premises are a part of a multi-tenant building.
10. UTILITIES.
Tenant shall pay the cost of all water, gas, heat, light, power, sewer,
telephone, refuse disposal, and all other utilities and services supplied to the
Premises. Tenant shall make payments for all separately metered utilities, when
due, directly to the appropriate supplier. Landlord shall have the right to
require Tenant to install, at Tenant's sole expense, separate meters for any
utility for which a separate meter is not installed as of the Commencement Date.
If any utilities or services are not separately metered to the Premises,
Landlord shall determine Tenant's equitable share thereof, based on rentable
square footage, intensity of use of any Utility, hours of operation, and such
other factors as Landlord deems relevant. Tenant shall pay its equitable share
of such utilities to Landlord, to the extent such obligation exceeds any amount
thereof impounded under Section 4.5, within fifteen (15) days after receipt of a
statement from Landlord. Landlord shall not be liable in damages or otherwise
for any failure or interruption of any utility service, and no such failure or
interruption shall entitle Tenant to terminate this Lease or ▇▇▇▇▇ the rent due
hereunder.
11. USE.
11.1 Permitted Use. The Premises shall be used and occupied only for the
permitted uses specified in Section 1.8. The Premises shall not be used or
occupied for any other purposes
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without the prior written consent of Landlord. Tenant shall provide such
information about such proposed use as may be reasonably requested by Landlord.
Landlord shall not unreasonably withhold or delay its consent to any requested
change of use, and shall have the right to impose reasonable restrictions on
such other use. Factors that Landlord may take into account in granting or
withholding its consent shall include, without limitation, whether the proposed
use is compatible with the character and tenant mix of the Center, whether the
proposed use poses any increased risk to Landlord or any other occupant of the
Center, whether any proposed Alterations to accommodate such proposed use might
decrease the rental or sale value of the Premises or the Center, and whether
Tenant has the requisite expertise and financial ability to successfully operate
in the Premises with the proposed use.
11.2 Compliance with Law and Other Requirements. Tenant shall not do or
permit anything to be done in or about the Premises in conflict with all laws,
ordinances, rules, regulations, orders, requirements, and recorded covenants and
restrictions applicable to the Premises, whether now in force or hereafter in
effect, including any requirement to make alterations or to install additional
facilities required by Tenant's specific occupancy or the conduct of Tenant's
specific business, and Tenant shall promptly comply with the same at its sole
expense.
11.3 Waste, Quiet Conduct. Tenant shall not use or permit the use of the
Premises in any manner that tends to create waste or a nuisance, that will cause
objectionable noise or odors, or that may disturb the quiet enjoyment of any
other tenant in the Center.
11.4 Rules and Regulations. Tenant shall comply with the Rules and
Regulations for the Center attached as Exhibit "B", as the same may be amended
by Landlord from time to time, upon notice to Tenant.
11.5 Signs. Tenant agrees, at Tenant's sole cost, to install a sign in
strict conformance with Landlord's sign criteria, attached hereto as Exhibit
"C", within fifteen (15) days after first occupying the Premises. Tenant shall
maintain all approved signs and other items described herein in good condition
and repair at all times. All signs must be fabricated by a contractor selected
by Landlord. Prior to construction of any such sign, a detailed drawing of the
proposed sign shall be prepared by the Landlord's contractor, at the sole
expense of Tenant, and submitted to Landlord and Tenant for written approval.
No sign, placard, pennant, flag, awning, canopy, or advertising matter of any
kind shall be placed or maintained on any exterior door, wall or window of the
Premises or in any area outside the Premises, and no decoration, lettering or
advertising matter shall be placed or maintained on the glass of any window or
door, or that can be seen through the glass, of the Premises without first
obtaining Landlord's written approval. All signs and sign cases shall be
considered fixtures and improvements and shall become the property of Landlord
upon expiration or termination of the Lease. Landlord shall have the right from
time to time after three (3) years after the Commencement Date to revise the
sign criteria, and within sixty (60) days after Tenant's receipt of written
notice of any new sign criteria, Tenant shall, at Tenant's expense, remove all
existing exterior signs and replace the same with new signs conforming to the
new sign criteria.
11.6 Parking. Tenant shall have the nonexclusive right, in common with
others, to use the parking areas of the Center; provided, however, that Tenant
shall not use more than the number of parking spaces designated in Section 1.10,
or if no number of such spaces is so indicated, Tenant shall not use more than
its reasonable share of parking spaces, as Landlord shall determine. Landlord
reserves the right, without liability to Tenant, to modify the parking
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areas, to designate the specific location of the parking for Tenant and Tenant's
customers and employees, and to adopt reasonable rules and regulations for use
of the parking areas.
11.7 Entry by Landlord. Tenant shall permit Landlord and Landlord's
agents to enter the Premises at all reasonable times for any of the following
purposes: (a) to inspect the Premises, (b) to supply any services or to perform
any maintenance obligations of Landlord, including the erection and maintenance
of such scaffolding, canopies, fences, and props as may be required, (c) to make
such improvements, replacements or additions to the Premises or the Center as
Landlord deems necessary or desirable, (d) to post notices of non -
responsibility, (e) to place any usual or ordinary "for sale" signs, or (e)
within six (6) months prior to the expiration of this Lease, to place any usual
or ordinary "for lease" signs. No such entry shall result in any rebate of rent
or any liability to Tenant for any loss of occupation or quiet enjoyment of the
Premises. Landlord shall give reasonable notice to Tenant prior to any entry
except in an emergency or unless Tenant consents at the time of entry. If
Tenant is not personally present to open and permit an entry into the Premises,
at any time when for any reason an entry therein shall be necessary by reason of
emergency or otherwise or permissible, Landlord or Landlord's agents may enter
the same by a master key, or may forcibly enter the same without rendering
Landlord or such agents liable therefor, and without in any manner affecting the
obligations and covenants of this Lease. Nothing herein contained, however,
shall be deemed or construed to impose upon Landlord any obligation,
responsibility or liability whatsoever for the care, maintenance or repair of
the Premises or any part thereof, except as otherwise specifically provided
herein.
12. ACCEPTANCE OF PREMISES; NON-LIABILITY OF LANDLORD; DISCLAIMER.
12.1 Acceptance of Premises. By taking possession hereunder, Tenant
acknowledges that it has examined the Premises and accepts the condition
thereof. Tenant acknowledges and agrees that Landlord has no obligation to
improve the Premises other than as set forth specifically in this Lease, if at
all. In particular, Tenant acknowledges that any additional improvements or
alterations needed to accommodate Tenant's intended use shall be made solely at
Tenant's sole cost and expense, and strictly in accordance with the requirements
of this Lease (including the requirement to obtain Landlord's consent thereto),
unless such improvements and alterations are specifically required of Landlord.
Landlord shall have no responsibility to do any work required under any building
codes or other governmental requirements not in effect or applicable at the time
the Premises were constructed, including without limitation any requirements
related to sprinkler retrofitting, seismic structural requirements,
accommodation of disabled persons, or hazardous materials. Landlord shall be
under no obligation to provide utility, telephone or other service or access
beyond that which exists at the Premises as of the date of this Lease, unless
Landlord specifically agrees in writing to provide the same. If it is
anticipated that Tenant will be doing any Alterations or installations prior to
taking occupancy, any delays encountered by Tenant in accomplishing such work or
obtaining any required permits therefor shall not delay the Commencement Date or
the date that Tenant becomes liable to pay rent, or the date that Landlord may
effectively deliver possession of the Premises to Tenant. By taking possession
hereunder, Tenant acknowledges that it accepts the square footage of the
Premises as delivered and as stated in this Lease. No discovery or alleged
discovery after such acceptance of any variance in such square footage as set
forth in this Lease (or in any proposal, advertisement or other description
thereof) shall be grounds for any adjustment in any element of
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the rent payable hereunder, unless such adjustment is initiated by and
implemented by Landlord in writing.
12.2 Landlord's Exemption From Liability. Landlord shall not be liable
for injury to Tenant's business or loss of income therefrom, or for personal
injury or property damage that may be sustained by Tenant or any subtenant of
Tenant, or their respective employees, invitees, customers, agents or
contractors or any other person in or about the Premises, caused by or resulting
from fire, flood, earthquake or other natural disaster, or from steam,
electricity, gas, water or rain, that may leak or flow from or into any part of
the Premises, or from the breakage, leakage, obstruction or other defects of
pipes, sprinklers, wires, appliances, plumbing, air-conditioning or lighting
fixtures, whether such damage or injury results from conditions arising upon the
Premises or upon other portions of the building of which the Premises are a
part, or from other sources, and regardless of whether the cause of such damage
or injury or the means of repairing the same is inaccessible to Tenant.
Landlord shall not be liable for any damages to property or for personal injury
or loss of life arising from any use, act or failure to act of any third parties
(including other occupants of the Center) occurring in, or about the Premises or
in or about the Center (including without limitation the criminal acts of any
third parties). Landlord shall not be liable for any latent defect in the
Premises or in the building of which the Premises are a part. All property of
Tenant kept or stored on the Premises shall be so kept or stored at the risk of
Tenant only, and Tenant shall indemnify, defend and hold Landlord harmless from
and against any claims arising out of damage to the same, including subrogation
claims by Tenant's insurance carriers. Provided, however, that the
indemnifications and waivers of Tenant set forth in this Section shall not apply
to damage and liability caused (i) by the gross negligence or wilful misconduct
of Landlord, and (ii) through no fault of Tenant, its assignees or subtenants,
or their respective agents, contractors, employees, customers, invitees or
licensees.
12.3 No Warranties or Representations.
(a) Neither Landlord nor Landlord's agents make any warranty or
representation with respect to the suitability or fitness of the space for the
conduct of Tenant's business, or for any other purpose.
(b) Neither Landlord nor Landlord's agents make any warranty or
representation with respect to any other tenants or users that may or may not
construct improvements, occupy space or conduct business within the Center, and
Tenant hereby acknowledges and agrees that it is not relying on any warranty or
representation relating thereto in entering into this Lease.
(c) Landlord specifically disavows any oral representations made by or
on behalf of its employees, agents and independent contractors, and Tenant
hereby acknowledges and agrees that it is not relying and has not relied on any
oral representations in entering into this Lease.
(d) Landlord has not made any promises or representations, expressed
or implied, that it will renew, extend or modify this Lease in favor of Tenant
or any permitted transferee of Tenant, except as may be specifically set forth
herein or in except in a written instrument signed by both parties amending this
Lease in the future.
(e) Notwithstanding that the rent payable to Landlord hereunder may at
times include the cost of guard service or other security measures, it is
specifically understood that Landlord does not represent, guarantee or assume
responsibility that Tenant will be secure from any damage, injury or loss of
life because of such guard service. Landlord shall have no obligation to hire,
maintain or provide such services, which may be withdrawn or changed at any
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time with or without notice to Tenant or any other person and without liability
to Landlord. To induce Landlord to provide such service if Landlord elects in
its sole discretion to do so, Tenant agrees that (i) Landlord shall not be
liable for any damage, injury or loss of life related to the provision or non-
provision of such service, and (ii) Landlord shall have no responsibility to
protect Tenant, or its employees, agents, from the acts of any third parties
(including other occupants of the Center) occurring in, or about the Premises or
in or about the Center (including without limitation the criminal acts of any
third parties), whether or not the same could have been prevented by any such
guard service or other security measures.
13. INDEMNIFICATION.
Tenant shall indemnify, hold harmless and defend Landlord and Landlord's
officers, directors, shareholders, partners, principals, employees, agents,
representatives, and other related entities and individuals (collectively,
"Landlord's Related Entities"), from and against any and all claims, actions,
damages, liability, costs, and expenses, including attorneys' fees and costs,
arising from personal injury, death, and/or property damage and arising from:
(a) Tenant's use or occupation of the Premises or any work or activity allowed
or permitted by Tenant in or about the Premises, (b) any activity, condition or
occurrence in the Premises or other area under the control of Tenant, (c) any
breach or failure to perform any obligation imposed on Tenant under this Lease;
or (d) any other act or omission of Tenant or its assignees or subtenants or
their respective agents, contractors, employees, customers, invitees or
licensees. Tenant's obligation to defend and indemnify shall include, but not
be limited to, claims based on duties, obligations, or liabilities imposed on
Landlord or Landlord's Related Entities by statute, ordinance, regulation, or
other law, such as claims based on theories of peculiar risk and non-delegable
duty, and to any and all other claims based on the negligent act or omission of
Landlord or Landlord's Related Entities. The parties intend that this provision
be interpreted as the broadest Type I indemnity provision as defined in McDonald
& ▇▇▇▇▇, Inc. v. San ▇▇▇▇ Steel Co., 29 Cal. App. 3rd 413 (1972), and as
allowed by law between a landlord and a tenant. Upon notice from Landlord,
Tenant shall, at Tenant's sole expense and by counsel satisfactory to Landlord,
defend any action or proceeding brought against Landlord or Landlord's Related
Entities by reason of any such claim. If Landlord or any of Landlord's Related
Entities is made a party to any litigation commenced by or against Tenant, then
Tenant shall hold harmless and defend Landlord and Landlord's Related Entities
and pay all costs, expenses and attorneys' fees and costs incurred or paid in
connection with such litigation. Tenant, as a material part of the
consideration to Landlord hereunder, assumes all risk of, and waives all claims
against Landlord for, personal injury or property damage in, upon or about the
Premises, from any cause whatsoever. Provided, however, that the
indemnifications and waivers of Tenant set forth in this Section shall not apply
to damage and liability caused (i) by the gross negligence or wilful misconduct
of Landlord, and (ii) through no fault of Tenant, its assignees or subtenants,
or their respective agents, contractors, employees, customers, invitees or
licensees.
14. HAZARDOUS MATERIALS.
14.1 Definitions. "Hazardous Materials Laws" means any and all federal,
state or local laws, ordinances, rules, decrees, orders, regulations or court
decisions relating to hazardous substances, hazardous materials, hazardous
waste, toxic substances, environmental conditions on, under or about the
Premises, or soil and ground water conditions, including, but not limited to,
the Comprehensive Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), as amended, 42 U.S.C. (S)9601, et seq., the Resource Conservation
and Recovery Act ("RCRA"), 42 U.S.C. (S)6901, et seq., the Hazardous Materials
Transportation Act, 49 U.S.C.
12
(S)1801, et seq., the California Hazardous Waste Control Act, Cal. Health and
Safety Code (S)25100, et seq., the ▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇-▇▇▇▇▇▇ Hazardous Substances
Account Act, Cal. Health and Safety Code (S)25300, et seq., the Safe Drinking
Water and Toxic Enforcement Act, Cal. Health and Safety Code (S)25249.5, et
seq., the ▇▇▇▇▇▇-Cologne Water Quality Control Act, Cal. Water Code (S) 13000,
et. seq., any amendments to the foregoing, and any similar federal, state or
local laws, ordinances, rules, decrees, orders or regulations. "Hazardous
Materials" means any chemical, compound, material, substance or other matter
that: (a) is defined as a hazardous substance, hazardous material, hazardous
waste or toxic substance under any Hazardous Materials Law, (b) is controlled or
governed by any Hazardous Materials Law or gives rise to any reporting, notice
or publication requirements hereunder, or gives rise to any liability,
responsibility or duty on the part of Tenant or Landlord with respect to any
third person hereunder; or (c) is flammable or explosive material, oil,
asbestos, urea formaldehyde, radioactive material, nuclear medicine material,
drug, vaccine, bacteria, virus, hazardous waste, toxic substance, or related
injurious or potentially injurious material (by itself or in combination with
other materials).
14.2 Use of Hazardous Materials. Tenant shall not allow any Hazardous
Material to be used, generated, manufactured, released, stored or disposed of
on, under or about, or transported from, the Premises, unless: (a) such use is
specifically disclosed to and approved by Landlord in writing prior to such use,
and (b) such use is conducted in compliance with the provisions of this Article.
Landlord's consent may be withheld in Landlord's sole discretion and, if
granted, may be revoked at any time. Landlord may approve such use subject to
reasonable conditions to protect the Premises and Landlord's interests.
Landlord may withhold approval if Landlord determines that such proposed use
involves a material risk of a release or discharge of Hazardous Materials or a
violation of any Hazardous Materials Laws or that Tenant has not provided
reasonably sufficient assurances of its ability to remedy such a violation and
fulfill its obligations under this Article. Notwithstanding the foregoing,
Landlord hereby consents to Tenant's use, storage or disposal of products
containing small quantities of Hazardous Materials, which products are of a type
customarily found in offices and households (such as aerosol cans containing
insecticides, toner for copies, paints, paint remover and the like), provided
that Tenant shall handle, use, store and dispose of such Hazardous Materials in
a safe and lawful manner and shall not allow such Hazardous Materials to
contaminate the Premises.
14.3 Compliance With Laws; Handling Hazardous Materials. Tenant shall
strictly comply with, and shall maintain the Premises in compliance with, all
Hazardous Materials Laws. Tenant shall obtain, maintain in effect and comply
with the conditions of all permits, licenses and other governmental approvals
required for Tenant's operations on the Premises under any Hazardous Materials
Laws, including, but not limited to, the discharge of appropriately treated
Hazardous Materials into or through any sanitary sewer serving the Premises. At
Landlord's request, Tenant shall deliver copies of, or allow Landlord to
inspect, all such permits, licenses and approvals. All Hazardous Materials
removed from the Premises shall be removed and transported by duly licensed
haulers to duly licensed disposal facilities, in compliance with all Hazardous
Materials Laws. Tenant shall perform any monitoring, testing, investigation,
clean-up, removal, detoxification, preparation of closure or other required
plans and any other remedial work required by any governmental agency or lender,
or recommended by Landlord's environmental consultants, as a result of any
release or discharge or potential release or discharge of Hazardous Materials
affecting the Premises or the Center or any violation or potential violation of
Hazardous Materials Laws by Tenant or any assignee or subtenant of
13
Tenant or their respective agents, contractors, employees, licensees or invitees
(collectively, "Remedial Work"). Landlord shall have the right to intervene in
any governmental action or proceeding involving any Remedial Work, and to
approve performance of the work, in order to protect Landlord's interests.
Tenant shall not enter into any settlement agreement, consent decree or other
compromise with respect to any claims relating to Hazardous Materials without
notifying Landlord and providing ample opportunity for Landlord to intervene.
Tenant shall additionally comply with the recommendations of Landlord's and
Tenant's insurers based upon National Fire Protection Association standards or
other applicable guidelines regarding the management and handling of Hazardous
Materials.
14.4 Notice; Reporting. Tenant shall notify Landlord, in writing, within
three (3) days after any of the following: (a) Tenant has knowledge, or has
reasonable cause to believe, that any Hazardous Material has been released,
discharged or is located on, under or about the Premises, whether or not the
release or discharge is in quantities that would otherwise be reportable to a
public agency, (b) Tenant receives any order of a governmental agency requiring
any Remedial Work pursuant to any Hazardous Materials Laws, (c) Tenant receives
any warning, notice of inspection, notice of violation or alleged violation or
Tenant receives notice or knowledge of any proceeding, investigation or
enforcement action, pursuant to any Hazardous Materials Laws; or (d) Tenant
receives notice or knowledge of any claims made or threatened by any third party
against Tenant or the Premises relating to any loss or injury resulting from
Hazardous Materials. If the potential risk of any of the foregoing events is
material, Tenant shall deliver immediate verbal notice to Landlord, in addition
to written notice as set forth above. Tenant shall deliver to Landlord copies
of all test results, reports and business or management plans required to be
filed with any governmental agency pursuant to any Hazardous Materials Laws.
14.5 Indemnity. Tenant shall indemnify, protect, defend and hold Landlord
(and its partners and their respective officers, directors, employees and
agents) harmless from and against any and all liabilities, claims, suits,
judgments, actions, investigations, proceedings, costs and expenses (including
attorneys' fees and costs) arising out of or in connection with any breach of
any provisions of this Article or directly or indirectly arising out of the use,
generation, storage, release, disposal or transportation of Hazardous Materials
by Tenant, or any assignee or subtenant of Tenant, or their respective agents,
contractors, employees, licensees, or invitees, on, under or about the Premises
during the Lease Term or any other period of Tenant's actual or constructive
occupancy of the Premises, including, but not limited to, all foreseeable and
unforeseeable consequential damages and the cost of any Remedial Work. Any
defense of Tenant pursuant to this Section shall be by counsel reasonably
acceptable to Landlord. Neither the consent by Landlord to the use, generation,
storage, release disposal or transportation of Hazardous Materials nor the
strict compliance with all Hazardous Materials Laws shall excuse Tenant from
Tenant's indemnification obligations pursuant to this Article. The foregoing
indemnity shall be in addition to and not a limitation of the indemnification
provisions of Article 13 of this Lease. Tenant's obligations pursuant to this
Article shall survive the termination or expiration of this Lease.
14.6 Entry and Inspection; Cure. Landlord, and its agents, employees and
contractors, shall have the right, but not the obligation, to enter the Premises
at all reasonable times to inspect the Premises and Tenant's compliance with the
terms and conditions of this Article, or to conduct investigations and tests.
No prior notice to Tenant shall be required in the event of an emergency, or if
Landlord has reasonable cause to believe that violations of this
14
Article have occurred, or if Tenant consents at the time of entry. In all other
cases, Landlord shall give at least 24 hours' prior notice to Tenant. Landlord
shall have the right, and not the obligation, to remedy any violation by Tenant
of the provisions of this Article pursuant to Section 22.3 of this Lease or to
perform any Remedial Work. Tenant shall pay, upon demand, all costs incurred by
Landlord in investigating any such violations or potential violations or
performing Remedial Work, plus interest thereon at the rate specified in this
Lease from the date of demand until the date paid by Tenant.
14.7 Termination/Expiration. Upon termination or expiration of this
Lease, Tenant shall, at Tenant's cost, remove any equipment, improvements or
storage facilities utilized in connection with any Hazardous Materials and shall
clean up, detoxify, repair and otherwise restore the Premises to a condition
free of Hazardous Materials, to the extent such condition is caused by Tenant or
any assignee or subtenant of Tenant or their respective agents, contractors,
employees, licensees or invitees.
14.8 Event of Default. The release or discharge of any Hazardous Material
or the violation of any Hazardous Materials Law by Tenant or any assignee or
subtenant of Tenant shall be a material Event of Default by Tenant under this
Lease. In addition to or in lieu of the remedies available under this Lease as
a result of such Event of Default, Landlord shall have the right, without
terminating this Lease, to require Tenant to suspend its operations and
activities on the Premises until Landlord is satisfied that appropriate Remedial
Work has been or is being adequately performed; Landlord's election of this
remedy shall not constitute a waiver of Landlord's right thereafter to declare
an Event of Default and pursue other remedies set forth in this Lease.
15. ALTERATIONS; LIENS.
15.1 Alterations by Tenant. Tenant shall not make any alterations,
additions or improvements ("Alterations") to the Premises without Landlord's
prior written consent (which shall not be unreasonably withheld or delayed),
except for nonstructural Alterations that cost $5,000 or less and are not
visible from the exterior of the Premises. All Alterations installed by Tenant
shall be new or completely reconditioned. Landlord shall have the right to
approve the contractor, the method of payment of the contractor, and the plans
and specifications for all proposed Alterations. Tenant shall obtain Landlord's
consent to all proposed alterations requiring Landlord's consent prior to the
commencement of any such Alterations. Tenant's request for consent shall be
accompanied by information identifying the contractor and method of payment and
two (2) copies of the proposed plans and specifications. All Alterations of
whatever kind and nature shall become at once a part of the realty and shall be
surrendered with the Premises upon expiration or earlier termination of the
Lease Term, unless Landlord requires Tenant to remove the same as provided in
Article 20. During the Lease Term, Tenant agrees to provide, at Tenant's
expense, a policy of insurance covering loss or damage to Alterations made by
Tenant, in an amount adequate to repair or replace the same, naming Landlord as
an additional insured. Provided, however, Tenant may install movable furniture,
trade fixtures, machinery or equipment in conformance with applicable
governmental rules and ordinances and remove the same upon expiration or earlier
termination of this Lease as provided in Article 20.
15.2 Permits and Governmental Requirements. Tenant shall obtain, at
Tenant's sole cost and expense, all building permits and other permits of every
kind and nature required by any governmental agency having jurisdiction in
connection with the Alterations. Tenant shall indemnify, hold harmless and
defend Landlord and Landlord's officers, directors, shareholders, partners,
principals, employees and agents, and their respective successors and assigns,
from and
15
against any and all claims, actions, damages, liability, costs, and expenses,
including attorneys' fees and costs, arising out of any failure by Tenant or
Tenant's contractor or agents to obtain all required permits, regardless of when
such failure is discovered. Tenant shall do any and all additional construction,
alterations, improvements and retrofittings required to be made to the Premises
and/or the Center, or any other property of Landlord as a result of, or as may
be may be triggered by, Tenant's Alterations. Landlord shall have the right to
do such construction itself; but in all instances Tenant shall pay all costs
directly or indirectly related to such work and shall indemnify, defend and hold
Landlord and Landlord's officers, directors, shareholders, partners, principals,
employees and agents, and their respective successors and assigns, harmless from
and against any and all claims, actions, damages, liability, costs, and
expenses, including attorneys' fees and costs, arising out of any such
additionally required work. All payment and indemnification obligations under
this Section shall survive the expiration or earlier termination of the Lease
Term.
15.3 Liens. Tenant shall pay when due all claims for any work performed,
materials furnished or obligations incurred by or for Tenant, and Tenant shall
keep the Premises free from any liens arising with respect thereto. If Tenant
fails to cause any such lien to be released within fifteen (15) days after
imposition, by payment or posting of a proper bond, Landlord shall have the
right (but not the obligation) to cause such release by such means as Landlord
deems proper. Tenant shall reimburse Landlord upon demand for all costs
incurred by Landlord in connection therewith (including attorneys' fees and
costs), with interest at the rate specified in Section 22.4 from the date of
payment by Landlord to the date of payment by Tenant. Tenant will notify
Landlord in writing thirty (30) days prior to commencing any alterations,
additions, improvements or repairs in order to allow Landlord timely to file a
notice of non-responsibility.
16. DAMAGE AND DESTRUCTION.
16.1 Partial Insured Damage. If the Premises or any building in which the
Premises are located are partially damaged or destroyed during the Lease Term,
Landlord shall make the necessary repairs, provided such repairs can reasonably
be completed within sixty (60) days after the date of the damage or destruction
in accordance with applicable laws and regulations and provided that Landlord
receives sufficient insurance proceeds to pay the cost of such repairs. In such
event, this Lease shall continue in full force and effect. If such repairs
cannot reasonably be completed within sixty (60) days after the date of the
damage or destruction or if Landlord does not receive sufficient insurance
proceeds, then Landlord may, at its option, elect within 45 days of the date of
the damage or destruction to proceed with the necessary repairs, in which event
this Lease shall continue in full force and effect and Landlord shall complete
the same within a reasonable time. If Landlord does not so elect to make such
repairs or if such repairs cannot be made under applicable laws and regulations,
this Lease may be terminated at the option of either party within 90 days of the
occurrence of such damage or destruction.
16.2 Insurance Deductible. If Landlord elects to repair any damage caused
by an insured casualty as provided in Section 16.1, Tenant shall, within fifteen
(15) days after receipt of written notice from Landlord, pay the amount of any
deductible (or its share thereof) under any insurance policy covering such
damage or destruction, in accordance with Section 9.4 above.
16.3 Uninsured Damage. In the event of any damage or destruction of the
Premises or any building in which the Premises are located by an uninsured
casualty, Landlord shall have the right to elect either to repair such damage or
to terminate this Lease. Such election shall be exercised by written notice to
Tenant within forty-five (45) days of such damage or destruction.
16
16.4 Total Destruction. A total destruction (including any destruction
required by any authorized public authority) of either the Premises or any
building in which the Premises are located shall terminate this Lease.
16.5 Partial Destruction of Center. If fifty percent (50%) or more of the
rentable area of the Center is damaged or destroyed by fire or other cause,
notwithstanding that the Premises may be unaffected, Landlord shall have the
right, to be exercised by notice in writing delivered to Tenant within ninety
(90) days after said occurrence, to elect to terminate this Lease.
16.6 Tenant's Obligations. Landlord shall not be required to repair any
injury or damage by fire or other cause, or to make any restoration or
replacement of any Alterations, trade fixtures, equipment or personal property
placed or installed in the Premises by or on behalf of Tenant. Unless this
Lease is terminated pursuant to this Article, Tenant shall promptly repair,
restore or replace the same in the event of damage. Nothing contained in this
Article shall be construed as a limitation on Tenant's liability for any damage
or destruction if such liability otherwise exists.
16.7 Rent Abatement. If Landlord repairs the Premises or the building
after damage or destruction as described in this Article, rent payable by Tenant
hereunder from the date of damage until the repairs are completed shall be
equitably reduced, based upon the extent to which such repairs interfere with
the business carried on by Tenant in the Premises, but only to the extent
Landlord receives proceeds from rental income insurance paid for by Tenant.
Landlord agrees to take reasonable steps to make a claim for and collect any
rental income insurance proceeds that might be available.
16.8 Waiver of Inconsistent Statutes. The parties' rights and obligations
in the event of damage or destruction shall be governed by the provisions of
this Lease; accordingly, Tenant waives the provisions of California Civil Code
Sections 1932(2) and 1933(4), and any other statute, code or judicial decisions
that grants a tenant a right to terminate a lease in the event of damage or
destruction of a leased premises.
17. CONDEMNATION.
17.1 Condemnation of Premises. If any portion of the Premises is taken or
condemned for a public or quasi-public use ("Condemnation"), and a portion
remains that is susceptible of occupation, then this Lease shall terminate as to
the portion so taken as of the date title vests in the condemnor, but shall
remain in full force and effect as to the remaining Premises. Landlord shall,
within a reasonable period of time, restore the remaining Premises as nearly as
practicable to the condition existing prior to the condemnation; provided,
however, if Landlord receives insufficient funds from the condemnor for such
purpose, Landlord may elect to terminate this Lease. If this Lease continues in
effect, the Minimum Monthly Rent shall be equitably adjusted, based upon the
value of the Premises remaining after the Condemnation compared to the value of
the Premises prior to Condemnation. Provided, however, in the event of any such
partial condemnation, Landlord shall have the option to terminate this Lease
entirely as of the date title vests in the condemnor. If all the Premises are
condemned, or such portion so that there does not remain a portion that is
susceptible of occupation, or if such a substantial portion of the Center is
condemned that it is no longer economically appropriate to lease the Premises on
the terms and conditions of this Lease, as reasonably determined by Landlord,
then at the election of Landlord this Lease shall terminate as of the date title
vests in the condemnor.
17.2 Condemnation of Parking Area. If all or any portion of the parking
area in the Center is condemned such that the ratio of the total square footage
of parking and other Common Facilities compared to the total rentable building
square footage of the Center is reduced to a
17
ratio below two to one, then at the election of Landlord this Lease shall
terminate as of the date title vests in the condemnor.
17.3 Condemnation Award. All compensation awarded upon any such partial
or total Condemnation shall be paid to Landlord and Tenant shall have no claim
thereto, and Tenant hereby irrevocably assigns and transfers to Landlord any
right to compensation or damages by reason of any such Condemnation. Provided,
however, that Tenant shall have the right to claim and recover from the
condemning authority, but not from Landlord, such compensation as may be
separately awarded or recoverable by Tenant in Tenant's own right on account of
any damage to Tenant's business by reason of the Condemnation and on account of
any cost that Tenant may incur in removing Tenant's merchandise, furniture,
fixtures, leasehold improvements and equipment. If this Lease is terminated, in
whole or in part, in accordance with this Article as a result of a Condemnation,
Tenant shall have no claim for the value of any unexpired term of this Lease.
18. ASSIGNMENT AND SUBLETTING.
18.1 Landlord's Consent Required. Tenant shall not voluntarily or
involuntarily assign, sublease, mortgage, encumber, or otherwise transfer all or
any portion of the Premises or its interest in this Lease (collectively,
"Transfer") without Landlord's prior written consent, which consent Landlord
shall not unreasonably withhold or delay. Landlord may withhold its consent
until Tenant has complied with the provisions of Sections 18.2 and 18.3. Any
attempted Transfer without Landlord's written consent shall be void and shall
constitute a non-curable Event of Default under this Lease. If Tenant is a
corporation, any cumulative Transfer of more than twenty percent (20%) of the
voting stock of such corporation shall constitute a Transfer requiring
Landlord's consent hereunder; provided, however that this sentence shall not
apply to any corporation whose stock is publicly traded. If Tenant is a
partnership, limited liability company, trust or other entity, any cumulative
Transfer of more than twenty percent (20%) of the partnership, membership,
beneficial or other ownership interests therein shall constitute a Transfer
requiring Landlord's consent hereunder. Tenant shall not have the right to
consummate a Transfer or to request Landlord's consent to any Transfer if any
Event of Default has occurred and is continuing or if Tenant or any affiliate of
Tenant is in default under any lease of any other real property owned or managed
(in whole or in part) by Landlord or any affiliate of Landlord.
18.2 Landlord's Election. Tenant's request for consent to any Transfer shall
be accompanied by a written statement setting forth the details of the proposed
Transfer, including the name, business and financial condition of the
prospective Transferee, financial details of the proposed Transfer (e.g., the
term and the rent and security deposit payable), and any other related
information that Landlord may reasonably require. Landlord shall have the
right: (a) to withhold consent to the Transfer, if reasonable, (b) to grant
consent, (c) to terminate this Lease as to the portion of the Premises affected
by any proposed Transfer, in which event Landlord may enter into a lease
directly with the proposed Transferee, or (d) to consent on the condition that
Landlord be paid, as Additional Rent hereunder, 50% of all subrent or other
consideration to be paid to Tenant under the terms of the Transfer in excess of
the total rent due hereunder. The grounds on which Landlord may reasonably
withhold its consent to any requested Transfer include, without limitation,
that: (i) the proposed Transferee's contemplated use of the Premises following
the proposed Transfer is not reasonably similar to the use of the Premises
permitted hereunder, (ii) in Landlord's reasonable business judgment, the
proposed Transferee lacks sufficient business reputation or experience to
operate a successful business of the type and quality permitted under this
Lease, (iii) in Landlord's reasonable business judgment, the
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proposed Transferee lacks sufficient net worth, working capital, anticipated
cash flow and other indications of financial strength to meet all of its
obligations under this Lease, (iv) the proposed Transfer would breach any
covenant of Landlord respecting a radius restriction, location, use or
exclusivity in any other lease, financing agreement, or other agreement relating
to the Center, and (v) in Landlord's reasonable business judgment, the
possibility of a release of Hazardous Materials is materially increased as a
result of the Transfer or if Landlord does not receive sufficient assurances
that the proposed Transferee has the experience and financial ability to remedy
a violation of Hazardous Materials and to fulfill its obligations under Articles
13 and 14. Landlord need only respond to any request by Tenant hereunder within
a reasonable time of not less that ten (10) business days after receipt of all
information and other submission required in connection with such request.
18.3 Transfer Fee. Tenant shall pay all attorneys' fees and costs
incurred by Landlord and a fee of $350 to reimburse Landlord for costs and
expenses incurred in connection with any request by Tenant for Landlord's
consent to a Transfer. Such fee shall be delivered to Landlord concurrently
with Tenant's request for consent.
18.4 Assumption; No Release of Tenant. Any permitted transferee shall
assume in writing all obligations of Tenant under this Lease, utilizing a form
of assumption agreement provided or approved by Landlord, and an executed copy
of such assumption agreement shall be delivered to Landlord within fifteen (15)
days after the effective date of the Transfer. The taking of possession of all
or any part of the Premises by any such permitted assignee or subtenant shall
constitute an agreement by such person or entity to assume without limitation or
qualification all of the obligations of Tenant under this Lease, notwithstanding
any failure by such person to execute the assumption agreement required in the
immediately preceding sentence. No permitted Transfer shall release or change
Tenant's primary liability to pay the rent and to perform all other obligations
of Tenant under this Lease. Landlord's acceptance of rent from any other person
is not a waiver of any provision of this Article or a consent to Transfer.
Consent to one Transfer shall not constitute a consent to any subsequent
Transfer. If any transferee defaults under this Lease, Landlord may proceed
directly against Tenant without pursuing remedies against the transferee.
Landlord may consent to subsequent Transfers or modifications of this Lease by
Tenant's transferee, without notifying Tenant or obtaining its consent, and such
action shall not relieve Tenant of its liability under this Lease.
18.5 No Merger. No merger shall result from any Transfer pursuant to this
Article, any surrender by Tenant of its interest under this Lease, or any
termination hereof in any other manner. In any such event, Landlord may either
terminate any or all subleases or succeed to the interest of Tenant thereunder.
18.6 Reasonable Restriction. Tenant acknowledges that the restrictions on
Transfer contained herein are reasonable restrictions for purposes of Section
22.2 of this Lease and California Civil Code Section 1951 .4.
19. SUBORDINATION; ATTORNMENT; ESTOPPEL CERTIFICATE.
19.1 Subordination. This Lease is junior and subordinate to all ground
leases, mortgages, deeds of trust, and other security instruments now or
hereafter affecting the real property of which the Premises are a part, and to
all advances made on the security thereof, and to all renewals, modifications,
consolidations, replacements and extensions thereof. If any mortgagee,
beneficiary under deed of trust or ground lessor shall elect to have this Lease
prior to the lien of its mortgage, deed of trust or ground lease, and gives
written notice thereof to Tenant, this Lease shall be deemed prior thereto.
Tenant agrees to execute any documents required to
19
effectuate such subordination or to make this Lease prior to the lien of any
such mortgage, deed of trust or ground lease, as the case may be, and if Tenant
fails to do so within fifteen (15) days after written demand, Tenant does hereby
make, constitute and irrevocably appoint Landlord as Tenant's attorney-in-fact
and in Tenant's name, place and stead, to do so.
19.2 Attornment. If Landlord sells, transfers, or conveys its interest in
the Premises or this Lease, or if the same is foreclosed judicially or
nonjudicially, or is otherwise acquired, by a mortgagee, beneficiary under deed
of trust or ground lessor, upon the request and at the sole election of
Landlord's lawful successor, Tenant shall attorn to said successor, provided
said successor accepts the Premises subject to this Lease. Tenant shall, upon
request of Landlord or any such mortgagee, beneficiary under deed of trust or
ground lessor, execute an attornment agreement confirming the same, in form and
substance acceptable to Landlord. Such agreement shall provide, among other
things, that said successor shall not be bound by (a) any prepayment of more
than one (1) month's rent (except any Security Deposit) or (b) any material
amendment of this Lease made after the later of the initial effective date of
this Lease, or the date that such successor's lien or interest first arose,
unless said successor shall have consented to such amendment.
19.3 Estoppel Certificates. Within fifteen (15) days after written
request from Landlord, Tenant at Tenant's sole cost shall execute, acknowledge
and deliver to Landlord a written statement certifying: (a) that this Lease is
unmodified and in full force and effect (or, if modified, stating the nature of
such modifications and certifying that this Lease is in full force and effect as
so modified), (b) the amount of any rent paid in advance, and (c) that, to
Tenant's knowledge, there are no uncured defaults on the part of Landlord, or
specifying the nature of such defaults if any are claimed. Any such statement
may be conclusively relied upon by any prospective purchaser of or lender on the
Premises. If Tenant fails to deliver such statement within said 15-day period,
Tenant shall be liable for the immediate payment of all foreseeable and
unforeseeable damages, penalties and attorneys' fees and costs incurred by
Landlord as a result of such failure. Tenant's failure to deliver such
statement within said 15-day period shall constitute a conclusive acknowledgment
by Tenant: (i) that this Lease is in full force and effect without modification
except as may be represented by Landlord, (ii) that not more than one month's
rent has been paid in advance, and (iii) that there are no uncured defaults in
Landlord's performance.
20. SURRENDER OF PREMISES.
20.1 Condition of Premises. Upon the expiration or earlier termination of
this Lease, Tenant shall surrender the Premises to Landlord, broom clean and in
the same condition and state of repair as at the commencement of the Lease Term,
except for casualty, damage by fire, condemnation, and ordinary wear and tear
that Tenant is not otherwise obligated to remedy under the provisions of this
Lease. Tenant shall deliver all keys to the Premises and the building of which
the Premises are a part to Landlord. Upon Tenant's vacation of the Premises,
Tenant shall remove all portable furniture, trade fixtures, machinery,
equipment, signs and other items of personal property (unless prohibited from
doing the same under Section 20.2), and shall remove any Alterations (whether or
not made with Landlord's consent) that Landlord may require Tenant to remove.
Tenant shall repair all damage to the Premises caused by such removal, and shall
restore the Premises to its prior condition, all at Tenant's expense. Such
repairs shall be performed in a manner satisfactory to Landlord and shall
include, but are not limited to, the following: capping all plumbing, capping
all electrical wiring, repairing all holes in walls, restoring damaged floor
and/or ceiling tiles, and thorough cleaning of the Premises. If Tenant
20
fails to remove any items that Tenant has an obligation to remove under this
Section when required by Landlord or otherwise, such items shall, at Landlord's
option, become the property of Landlord and Landlord shall have the right to
remove and retain or dispose of the same in any manner, without any obligation
to account to Tenant for the proceeds thereof. Tenant waives all claims against
Landlord for any damages to Tenant resulting from Landlord's retention or
disposition of such Alterations or personal property. Tenant shall be liable to
Landlord for Landlord's costs of removing, storing and disposing of such items.
20.2 Removal of Certain Alterations, Fixtures and Equipment Prohibited.
All Alterations, fixtures (whether or not trade fixtures), machinery, equipment,
signs and other items of personal property that Landlord has not required Tenant
to remove under Section 20.1 shall become Landlord's property and shall be
surrendered to Landlord with the Premises, regardless of who paid for the same.
In particular and without limiting the foregoing, Tenant shall not remove any of
the following materials or equipment without Landlord's prior written consent,
regardless of who paid for the same and regardless of whether the same are
permanently attached to the Premises: any power wiring and power panels; any
piping for industrial gasses or liquids; any laboratory benches, sinks, cabinets
and casework; fume hoods or specialized air-handling and evacuation systems; any
drains or other equipment for he handling of waste water or hazardous materials;
computer, telephone, telecommunications wiring, panels and equipment; lighting
and lighting fixtures; wall coverings; drapes, blinds and other window
coverings; carpets and other floor coverings; heaters, air conditioners and
other heating or air conditioning equipment; fencing; security gates and
systems; and other building operating equipment and decorations.
20.3 Holding Over. Tenant shall vacate the Premises upon the expiration
or earlier termination of this Lease, and Tenant shall indemnify Landlord
against all liabilities, damages and expenses incurred by Landlord as a result
of any delay by Tenant in vacating the Premises. If Tenant remains in
possession of the Premises or any part thereof after the expiration of the Lease
Term with Landlord's written permission, Tenant's occupancy shall be a tenancy
from month-to-month only, and not a renewal or extension hereof. All provisions
of this Lease (other than those relating to the term) shall apply to such month-
to-month tenancy, except that the Minimum Monthly Rent shall be increased to
200% of the Minimum Monthly Rent in effect during the last month of the Lease
Term. No acceptance of rent, negotiation of rent checks or other act or
omission of Landlord or its agents shall extend the Expiration Date of this
Lease other than a writing executed by Landlord giving Tenant permission to
remain in occupancy beyond the Expiration Date under the terms of the
immediately preceding sentence.
21. DEFAULT BY TENANT.
The occurrence of any of the following shall constitute an "Event of
Default" under this Lease by Tenant:
(c) Abandonment or vacation of the Premises by Tenant, or failure to occupy
the Premises for a period of ten (10) consecutive days.
(d) If any of the following occurs: (i) A petition is filed for an order
of relief under the federal Bankruptcy Code or for an order or decree of
insolvency or reorganization or rearrangement under any state or federal law,
and such petition is not dismissed within sixty (60) days after the filing
thereof; (ii) Tenant makes a general assignment for the benefit of creditors;
(iii) a receiver or trustee is appointed to take possession of any substantial
part of Tenant's assets, unless such appointment vacated within sixty (60) days
after the date thereof; (d) Tenant consents to or suffers an attachment,
execution or other judicial seizure of any substantial part of
21
its assets or its interest under this Lease, unless such process is released or
satisfied within sixty (60) days after the occurrence thereof; or If a court of
competent jurisdiction determines that any of the foregoing events is not a
default under this Lease, and a trustee is appointed to take possession (or if
Tenant remains a debtor in possession), and such trustee or Tenant transfers
Tenant's interest hereunder, then Landlord shall receive, as Additional Rent,
the difference between the rent (or other consideration) paid in connection with
such transfer and the rent payable by Tenant hereunder. Any assignee pursuant to
the provisions of any bankruptcy law shall be deemed without further act to have
assumed all of the obligations of the Tenant hereunder arising on or after the
date of such assignment. Any such assignee shall upon demand execute and deliver
to Landlord an instrument confirming such assumption.
(e) The occurrence of any other event that is deemed to be an Event of
Default under any other provision of this Lease.
22. REMEDIES.
Upon the occurrence of any Event of Default by Tenant, Landlord shall have
the following remedies, each of which shall be cumulative and in addition to any
other remedies now or hereafter available at law or in equity.
22.1 Termination of Lease. Landlord can terminate this Lease and Tenant's
right to possession of the Premises by giving written notice of termination, and
then re-enter the Premises and take possession thereof. No act by Landlord
other than giving written notice to Tenant of such termination shall terminate
this Lease. Upon termination, Landlord has the right to recover all damages
incurred by Landlord as a result of Tenant's default, including:
(a) The worth at the time of award of any unpaid rent that had been
earned at the time of such termination; plus
(b) The worth at the time of award of the amount by which the unpaid
rent that would have been earned after the date of termination until the time of
award exceeds the amount of the loss of rent that Tenant proves could have been
reasonably avoided; plus
(c) The worth at the time of award of the amount by which the unpaid
rent for the balance of the Lease Term after the time of award exceeds the
amount of such rental loss that Tenant proves could have been reasonably
avoided; plus
(d) Any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant's default, including, but not limited to
expenses for cleaning, repairing or restoring the Premises, (ii) expenses for
altering, remodeling or otherwise improving the Premises for the purpose of
reletting, (iii) brokers' fees and commissions, advertising costs and other
expenses of reletting the Premises, (iv) costs of carrying the Premises such as
taxes, insurance premiums, utilities and security precautions, (v) expenses in
retaking possession of the Premises, (vi) attorneys' fees and costs, (vii) any
unearned brokerage commissions paid in connection with this Lease and (viii)
reimbursement of any previously waived or abated Minimum Monthly Rent and/or
Additional Rent; plus
(e) At Landlord's election, such other amounts in addition to or in
lieu of the foregoing as may be permitted from time to time under applicable
California law. As used in paragraphs (a) and (b) above, the "worth at the time
of award" shall be computed by allowing interest at the maximum permissible
legal rate. As used in paragraph (c) above, the "worth at the time of award"
shall be 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 (1%).
22.2 Continuation of Lease. Landlord has the remedy described in
California Civil Code Section 1951.4 (Landlord may continue the Lease in effect
after Tenant's breach and
22
abandonment and recover rent as it becomes due, if Tenant has the right to
sublet or assign, subject only to reasonable limitations), as follows:
(a) Landlord can continue this Lease in full force and effect without
terminating Tenant's right of possession, and Landlord shall have the right to
collect rent and other monetary charges when due and to enforce all other
obligations of Tenant hereunder. Landlord shall have the right to enter the
Property to do acts of maintenance and preservation of the Property, to make
alterations and repairs in order to re-let the Property, and/or to undertake
other efforts to re-let the Property. Landlord may also remove personal
property from the Property and store the same in a public warehouse at Tenant's
expense and risk. No act by Landlord permitted under this paragraph shall
terminate this Lease unless a written notice of termination is given by Landlord
to Tenant or unless the termination is decreed by a court of competent
jurisdiction.
(b) In furtherance of the remedy set forth in this Section, Landlord
may re-let the Property or any part thereof for Tenant's account, for such term
(which may extend beyond the Lease Term), at such rent, and on such other terms
and conditions as Landlord may deem advisable in its sole discretion. Tenant
shall be liable immediately to Landlord for all costs Landlord incurs in
reletting the Property. Any rents received by Landlord from such reletting
shall be applied to the payment of: (i) any indebtedness other than rent due
hereunder from Tenant to Landlord, (ii) the costs of such reletting, including
brokerage and attorneys' fees and costs, and the cost of any alterations and
repairs to the Property, and (iii) the payment of rent due and unpaid hereunder,
including any previously waived or abated rent (if any). Any remainder shall be
held by Landlord and applied in payment of future amounts as the same become due
and payable hereunder. In no event shall Tenant be entitled to any excess rent
received by Landlord after an Event of Default by Tenant and the exercise of
Landlord's remedies hereunder. If the rent from such reletting during any month
is less than the rent payable hereunder, Tenant shall pay such deficiency to
Landlord immediately upon demand.
(c) Landlord shall not, by any reentry or other act, be deemed to have
accepted any surrender by Tenant of the Property or Tenant's interest therein,
or be deemed to have terminated this Lease or Tenant's right to possession of
the Property or the liability of Tenant to pay rent thereafter to accrue or
Tenant's liability for damages under any of the provisions hereof, unless
Landlord shall have given Tenant notice in writing that it has so elected to
terminate this Lease.
(d) Tenant acknowledges and agrees that the restrictions on the
Transfer of the Lease set forth in Article 18 of this Lease constitute
reasonable restrictions on such transfer for purposes of this Section and
California Civil Code Section 1951.4.
22.3 Performance By Landlord. If Tenant fails to pay any sum of money or
perform any other act to be performed by Tenant hereunder and such failure
continues for fifteen (15) days after notice by Landlord, Landlord shall have
the right (but not the obligation) to make such payment or perform such other
act without waiving or releasing Tenant from its obligations. All sums so paid
by Landlord and all necessary incidental costs, together with interest thereon
at the rate specified in Section 22.4, shall be payable to Landlord on demand.
Landlord shall have the same rights and remedies in the event of non-payment by
Tenant as in the case of default by Tenant in the payment of the rent.
22.4 Late Charge; Interest on Overdue Payments. The parties acknowledge
that late payment by Tenant of Minimum Monthly Rent or any Additional Rent will
cause Landlord to incur costs not contemplated by this Lease, the exact amount
of which will be extremely difficult and impractical to determine, including,
but not limited to, processing and accounting
23
charges, administrative expenses, and additional interest expenses or late
charges that Landlord may be required to pay as a result of late payment on
Landlord's obligations. Therefore, if any installment of Minimum Monthly Rent or
Additional Rent is not received by Landlord on the due date, and without regard
to whether Landlord gives Tenant notice of such failure or exercises any of its
remedies upon an Event of Default, Tenant shall pay a late charge equal to the
greater of five percent (5%) of the overdue amount or $100, as Additional Rent
hereunder. The parties hereby agree that such late charge represents a fair and
reasonable estimate of the damages Landlord will incur by reason of late payment
by Tenant. In addition, any amount due from Tenant that is not paid when due
shall bear interest at a rate equal to 2% over the then current Bank of America
prime or reference rate, but not to exceed the maximum permissible legal rate,
from the date such payment is due until the date paid by Tenant. Landlord's
acceptance of any interest or late charge shall not constitute a waiver of
Tenant's default or prevent Landlord from exercising any other rights or
remedies available to Landlord.
22.5 Landlord's Right to Require Advance Payment of Rent; Cashier's
Checks. If Tenant is late in paying any component of rent more than three (3)
times during the Lease Term, Landlord shall have the right, upon notice to
Tenant, to require that all rent be paid three (3) months in advance.
Additionally, if any of Tenant's checks are returned for non-sufficient funds,
or if Landlord at any time serves upon Tenant a Three Day Notice to Pay Rent or
Quit (pursuant to California Civil Code Sections 1161 et seq. or any successor
or similar unlawful detainer statutes), Landlord may, at its option, require
that all future rent (including any sums demanded in any subsequent three (3)
day notice) be paid exclusively by money order or cashier's check.
23. DEFAULT BY LANDLORD.
23.1 Notice to Landlord. Landlord shall not be in default under this
Lease unless Landlord fails to perform an obligation required of Landlord within
a reasonable time, but in no event later than thirty (30) days after written
notice by Tenant to Landlord and to each Mortgagee as provided in Section 23.2,
specifying the nature of the alleged default; provided, however, that if the
nature of the obligation is such that more than thirty (30) business 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.
23.2 Notice to Mortgagees. Tenant agrees to give each mortgagee or trust
deed holder on the Premises or the Center ("Mortgagee"), by registered mail, a
copy of any notice of default served upon Landlord, provided that Tenant has
been previously notified in writing of the address of such Mortgagee. Tenant
further agrees that if Landlord fails to cure such default within the time
provided for in this Lease, then the Mortgagees shall have an additional thirty
(30) days within which to cure such default, or if such default cannot
reasonably be cured within that time, then such additional time as may be
necessary if, within said 30 day period, any Mortgagee has commenced and is
diligently pursuing the remedies necessary to cure the default (including but
not limited to commencement of foreclosure proceedings if necessary to affect
such cure), in which event this Lease shall not be terminated while such
remedies are being so diligently pursued.
23.3 Limitations on Remedies Against Landlord. In the event Tenant has
any claim or cause of action against Landlord: (a) Tenant's sole and exclusive
remedy shall be against Landlord's interest in the building of which the
Premises are a part, and neither Landlord nor any partner of Landlord nor any
other property of Landlord shall be liable for any deficiency, (b) no partner of
Landlord shall be sued or named as a party in any suit or action (except as may
be
24
necessary to secure jurisdiction over Landlord), (c) no service of process shall
be made against any partner of Landlord (except as may be necessary to secure
jurisdiction over the partnership), and no such partner shall be required to
answer or otherwise plead to any service of process, (d) no judgment shall be
taken against any partner of Landlord and any judgment taken against any partner
of Landlord may be vacated and set aside at any time, and (e) no writ of
execution will ever be levied against the assets of any partner of Landlord. The
covenants and agreements set forth in this Section shall be enforceable by
Landlord and/or by any partner of Landlord. If Landlord fails to give any
consent that a court later holds Landlord was required to give under the terms
of this Lease, Tenant shall be entitled solely to specific performance and such
other remedies as may be specifically reserved to Tenant under this Lease, but
in no event shall Landlord be responsible for monetary damages (including
incidental and consequential damages) for such failure to give consent.
24. GENERAL PROVISIONS.
24.2 Arbitration and Mediation: Waiver of Jury Trial. Except as provided
in this Section, if any dispute ensues between Landlord and Tenant arising out
of or concerning this Lease and if said dispute cannot be settled through direct
discussions between the parties, the parties shall first to attempt to settle
the dispute through mediation before a mutually acceptable mediator. The cost
of mediation shall be divided equally between the parties. Thereafter, any
remaining, unresolved disputes or claims shall be resolved by binding
arbitration in accordance with the rules of the American Arbitration
Association, and judgment upon the award rendered by the arbitrator may be
entered in any court of competent jurisdiction. The prevailing party in any
such arbitration shall be entitled to recover reasonable costs and attorneys'
fees and costs as determined by the arbitrator. Provided, however, that the
foregoing provisions regarding mediation and arbitration shall not apply to (a)
any issue or claim that might properly be adjudicated in an unlawful detainer
proceeding, or (b) to any issue or claim that Landlord elects not to have
resolved through arbitration and with respect to which Landlord commences an
action in law or equity to determine the same. Without limiting the foregoing,
Landlord and Tenant hereby waive trial by jury in any action, proceeding or
counterclaim (including any claim of injury or damage and any emergency and
other statutory remedy in respect thereof) brought by either against the other
on any matter arising out of or in any way connected with this Lease, the
relationship of Landlord and Tenant, or Tenant's use or occupancy of the
Premises.
24.3 Attorneys' Fees. If either party brings any legal action or
proceeding, declaratory or otherwise, arising out of this Lease, including any
suit by Landlord to recover rent or possession of the Premises or to otherwise
enforce this Lease, the losing party shall pay the prevailing party's costs and
attorneys' fees and costs incurred in such proceeding. If Landlord issues
notice(s) to pay rent, notice(s) to perform covenant, notice(s) of abandonment
or comparable documents as a result of Tenant's default under this Lease, and if
Tenant cures such default, Tenant shall pay to Landlord the reasonable costs
incurred by Landlord, including Landlord's attorneys' fees and costs, of
preparation and delivery of same.
24.4 Authority of Tenant. Tenant represents and warrants that it has full
power and authority to execute and fully perform its obligations under this
Lease pursuant to its governing instruments, without the need for any further
action, and that the person(s) executing this Agreement on behalf of Tenant are
the duly designated agents of Tenant and are authorized to do so. Prior to
execution of this Lease, Tenant shall supply Landlord with such evidence as
Landlord may request regarding the authority of Tenant to enter into this Lease.
Any actual or
25
constructive taking of possession of the Premises by Tenant shall constitute a
ratification of this Lease by Tenant.
24.5 Binding Effect. Subject to the provisions of Article 18 restricting
transfers by Tenant and subject to Section 24.27 regarding transfer of
Landlord's interest, all of the provisions of this Lease shall bind and inure to
the benefit of the parties hereto and their respective heirs, legal
representatives, successors and assigns.
24.6 Brokers. Tenant warrants that it has had no dealings with any real
estate brokers or agents in connection with the negotiation of this transaction
except only the broker whose name is set forth in the Basic Lease Provisions,
and it knows of no other real estate broker or agents who is entitled to a
commission in connection with this transaction. Tenant agrees to indemnify,
hold harmless and defend the Landlord from and against any obligation or
liability to pay any commission or compensation to any other party arising from
the act or agreement of Tenant.
24.7 Construction. The headings and captions used in this Lease are for
convenience only and are not a part of the terms and provisions of this Lease.
In any provision relating to the conduct, acts or omissions of Tenant, the term
"Tenant" shall include Tenant, its subtenants and assigns and their respective
agents, employees, contractors, and invitees, and any others using the Premises
with Tenant's express or implied permission. Any use in this Lease, or in any
addendum, amendment or other document related hereto, of the terms "lessor" or
"lessee" to refer to a party to this Lease shall be deemed to be references to
Landlord and Tenant, respectively.
24.8 Counterparts. This Lease may be executed in multiple copies, each of
which shall be deemed an original, but all of which shall constitute one Lease
binding on all parties after all parties have signed such a counterpart.
24.9 Covenants and Conditions. Each provision to be performed by Tenant
shall be deemed to be both a covenant and a condition.
24.10 Entire Agreement. This Lease, together with, constitutes the entire
agreement between the parties with respect to the subject matter hereof. There
are no oral or written agreements or representations between the parties hereto
affecting this Lease, and this Lease supersedes, cancels, merges any and all
previous verbal or written negotiations, arrangements, representations,
brochures, displays, models, photographs, renderings, floor plans, elevations,
projections, estimates, agreements and understandings if any, made by or between
Landlord and Tenant and their agents, with respect to the subject matter, and
none thereof shall be used to interpret, construe, supplement or contradict this
Lease. This Lease and all amendments thereto is and shall be considered to be
the only agreement between the parties hereto and their representatives and
agents. There are no other representations or warranties between the parties,
and all reliance with respect to representations is solely based upon the
representations and agreements contained in this Lease.
24.11 Exhibits. All exhibits, addenda and riders attached or referred to
herein are hereby incorporated herein by reference.
24.12 Financial Statements. Within ten (10) days after written request
from Landlord, Tenant shall deliver to Landlord such financial statements as are
reasonably requested by Landlord to verify the net worth of Tenant, or any
assignee, subtenant, or guarantor of Tenant. In addition, Tenant shall deliver
to any proposed or actual lender or purchaser of the Premises designated by
Landlord any financial statements required by such party to facilitate the sale,
financing or refinancing of the Premises, including the past three years'
financial statements.
26
Tenant represents and warrants to Landlord that: (a) each such financial
statement is a true and accurate statement as of the date of such statement; and
(b) at all times during the Lease Term or any extension thereof, Tenant's net
worth shall not be reduced below Tenant's net worth as of the date of execution
of this Lease. All such financial statement shall be received in confidence and
shall be used only for the purposes set forth herein. Tenant hereby irrevocably
authorizes Landlord to do credit checks or other investigations into Tenant's
financial affairs.
24.13 Force Majeure. If Landlord is delayed in performing any of its
obligations hereunder due to strikes, labor problems, inability to procure
utilities, materials, equipment or transportation, governmental regulations,
weather conditions, riots, insurrection, war or other events beyond Landlord's
control, then the time for performance of such obligation shall be extended to
the extent reasonably necessary as a result of such event.
24.14 Governing Law. This Lease shall be governed, construed and enforced
in accordance with the laws of the State of California.
24.15 Joint and Several Liability. If more than one person or entity
executes this Lease as Tenant, each of them is jointly and severally liable for
all of the obligations of Tenant hereunder.
24.16 Modification. The provisions of this Lease may not be modified or
amended, except by a written instrument signed by both parties.
24.18 Nondiscrimination. Tenant for itself and its officers, directors,
shareholders, partners, principals, employees, agents, representatives, and
other related entities and individuals, agrees to comply fully with any and all
laws and other requirements prohibiting discrimination against any person or
group of persons on account of race, color, religion, creed, sex, marital
status, sexual orientation, national origin, ancestry, age, physical handicap or
medical condition, in the use occupancy or patronage of the Premises and/or of
Tenant's business, Tenant shall indemnify and hold Landlord and its affiliates
harmless from and against all damage and liability incurred by Landlord in the
event of any violation of the foregoing covenant or because of any event of or
practice of discrimination against any such persons or group of persons by
Tenant or its officers, directors, shareholders, partners, principals,
employees, agents, representatives, and other related entities and individuals
in accordance with the indemnification provisions of Article 13.
24.19 Notice. Any and all notices to either party shall be personally
delivered or sent by regular mail, postage prepaid, addressed to the party to be
notified at the address specified in Section 1.1 , or at such other address as
such party may from time to time designate in writing. Notice shall be deemed
delivered on the date of personal delivery or three (3) business days after
deposit in the U.S. Mail, certified, return receipt requested.
24.20 Partial Invalidity. If any provision of this Lease is determined by
a court of competent jurisdiction to be invalid or unenforceable, the remainder
of this Lease shall not be affected thereby. Each provision shall be valid and
enforceable to the fullest extent permitted by law.
24.21 Quiet Enjoyment. Landlord agrees that Tenant, upon paying the rent
and performing the terms, covenants and conditions of this Lease, may quietly
have, hold and enjoy the Premises from and after Landlord's delivery of the
Premises to Tenant and until the end of the Lease Term, subject, however, to the
lien and provisions of any mortgage or deed of trust to which this Lease is or
shall become subordinate.
24.22 Recording. Tenant shall not record this Lease or any memorandum
hereof without Landlord's prior written consent.
27
24.23 Relationship of the Parties. Nothing contained in this Lease shall
be deemed or construed as creating a partnership, joint venture, principal-
agent, or employer-employee relationship between Landlord and any other person
or entity (including, without limitation, Tenant) or as causing Landlord to be
responsible in any way for the debts or obligations of such other person or
entity.
24.25 Rights of Redemption Waived. Tenant hereby expressly waives any and
all rights of redemption under any present or future laws in the event Tenant is
evicted or dispossessed for any cause, or in the event Landlord obtains
possession of the Premises by reason of Tenant's violation of any of the
covenants and conditions of this Lease or otherwise.
24.26 Time of Essence. Time is of the essence of each and every provision
of this Lease.
24.27 Transfer of Landlord's Interest. In the event of a sale,
assignment, exchange or other disposition of Landlord's interest in the
Premises, other than a transfer for security purposes only, Landlord shall be
relieved of all obligations and liabilities accruing hereunder after the
effective date of said sale, assignment, exchange or other disposition, provided
that any Security Deposit or other funds then held by Landlord in which Tenant
has an interest are delivered to Landlord's successor. The obligations to be
performed by Landlord hereunder shall be binding on Landlord's successors and
assigns only during their respective periods of ownership.
24.28 Waiver. No provision of this Lease or the breach thereof shall be
deemed waived, except by written consent of the party against whom the waiver is
claimed. A waiver of any such breach shall not be deemed a waiver of any
preceding or succeeding breach of the same or any other provision. No delay or
omission by Landlord in exercising any of its remedies shall impair or be
construed as a waiver thereof, unless such waiver is expressly set forth in a
writing signed by Landlord. The subsequent acceptance of rent hereunder by
Landlord shall not be deemed to be a waiver of any preceding breach by Tenant,
other than the failure of Tenant to pay the particular rental so accepted,
regardless of Landlord's knowledge of such preceding breach at the time of
acceptance of such rent.
THE SUBMISSION OF THIS LEASE FOR EXAMINATION AND/OR SIGNATURE BY
TENANT IS NOT A COMMITMENT BY LANDLORD OR ITS AGENTS TO RESERVE THE
PREMISES OR TO LEASE THE PREMISES TO TENANT. THIS LEASE SHALL BECOME
EFFECTIVE AND LEGALLY BINDING UPON ONLY UPON FULL EXECUTION AND
DELIVERY BY BOTH LANDLORD AND TENANT. UNTIL LANDLORD DELIVERS A FULLY
EXECUTED COUNTERPART HEREOF TO TENANT, LANDLORD HAS THE RIGHT TO OFFER
AND TO LEASE THE PREMISES TO ANY OTHER PERSON TO THE EXCLUSION OF
TENANT.
28
EXECUTED, by Landlord and Tenant as of the date first written above.
TENANT: LANDLORD:
Sequenom, Inc. Sorrento Business Complex, a Limited
a California corporation Partnership, by: ▇▇▇▇▇▇▇ Development Company,
General Partner
By:/s/ illegible By:/s/ illegible
---------------------------------- -------------------------------------
Title: President CEO Sequenom, Inc. Title:
------------------------------- ----------------------------------
By: By:/s/ illegible
---------------------------------- -------------------------------------
Title: Title:
------------------------------ ---------------------------------
Tenant's Information:
Driver's Lic. No. _______________
SSNEIN __________________________
29
FIRST ADDENDUM TO STANDARD INDUSTRIAL GROSS LEASE
-------------------------------------------------
This Addendum is made to that certain Standard Industrial Gross Lease dated
December 4, 1996, by and between Sorrento Business Complex, a Limited
Partnership ("Landlord") and Sequenom, Inc., a California corporation ("Tenant")
for Suite A, located at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
containing approximately 11,971 square feet.
25. Tenant Improvements:
-------------------
25.1 Space Plan; Construction: Tenant shall arrange to have tenant improvements
------------------------
("Tenant Improvements") constructed in the premises in accordance with plans and
specifications ("Plans and Specifications") prepared by Tenant's architect and
approved by Landlord and Tenant, which approval shall not be unreasonably
withheld, within fifteen (15) days of Tenant's submitting the same to Landlord
("Approval"). Upon full execution of the lease and as soon after the Approval
as is reasonably practicable, Tenant shall cause its general contractor to
commence construction of the Tenant Improvements and shall thereafter exercise
reasonable efforts to complete the Tenant Improvements by April 1, 1997. The
rent shall commence April 1, 1997, regardless of whether the Tenant Improvements
are completed by Tenant prior to April 1, 1997, or thereafter.
25.2 Tenant Improvement Allowance: Landlord hereby grants to Tenant a tenant
----------------------------
improvement allowance ("Allowance") of Twenty Five Thousand Dollars ($25,000),
which Landlord shall pay to Tenant to reimburse Tenant for the cost of the
Tenant Improvements. Prior to the commencement of construction of the Tenant
Improvements, Tenant shall prepare and submit to Landlord for Landlord's
approval a line item construction budget ("Budget") setting forth the cost of
the Tenant Improvements. If the Budget (as approved by Landlord) exceeds the
Allowance, the excess costs ("Excess Costs") shall he borne by Tenant. The
tenant improvement allowance shall be promptly paid to Tenant as follows: fifty
percent (50%) upon fifty percent (50%) completion of the work and fifty percent
(50%) upon the completion of tenant improvements. Tenant shall request
reimbursement of said allowance in writing and provide receipts evidencing the
completion of the construction, together with lien releases, building permits
and any other documentation reasonably required by Landlord. If Tenant does not
complete such Tenant Improvements by April 30, 1997, the allowance shall expire
and Landlord shall have no obligation to further supply said allowance.
25.3 Changes to Tenant Improvements: Should Tenant desire to make any changes
-------------------------------
or additions to the Tenant Improvements, Tenant shall request such changes in
writing, which request shall be accompanied by a sufficiently detailed
description of the requested changes or additions, and, if reasonably requested
by Landlord, a set of working drawings for such requested changes or additions.
Landlord shall have the right to approve such requested changes or additions, or
disapprove such requested changes or additions if, in the Landlord's good faith
judgment, the requested changes or additions will have an adverse effect on the
value of the premises for reletting. If Landlord approves such requested
changes or additions, Tenant shall bear 100% of the cost (if any) attributable
to such changes or additions. Any increased costs due to delays in the work
caused by the integration of such changes or additions, any delays in the work
to be done by Tenant, and any deficiencies, errors or omissions in any plans,
specifications or other documents provided by Tenant shall be paid by Tenant.
26. Option to Renew. Provided Tenant is not in default under the term of this
----------------
Lease beyond applicable cure periods, and provided further that no condition
exists that, with the giving of notice or the passage of time or both would
constitute a default under this Lease, Tenant shall have the option (the
"Option") to extend the term of this Lease for one (1) additional period of two
(2) years upon all of the terms and conditions of the Lease, other than the
Minimum Monthly Rent, which shall be determined as described below. The Option
must be exercised, if at all, by Tenant giving Landlord written notice of the
exercise thereof no less than one hundred eighty (180) days prior to the
expiration of the Lease Term. Any failure of Tenant to give due notice of its
exercise of the Option within such time shall constitute an irrevocable election
on the part of Tenant not to exercise the Option.
The Minimum Monthly Rent during the Option Term shall be the then "Fair Market
Rental Value" of the Premises, as defined below; provided, however, that in no
event shall the Minimum Monthly Rent for any portion of the Option Term be less
than the Minimum Monthly Rent in effect for the last month of the Term
immediately preceding the commencement of the Option Term, regardless of any
determination of a Fair Market Rental Value
1
pursuant to the other provisions of this Section that would result in a lower
Minimum Monthly Rent. Upon exercise of the Option, Landlord and Tenant shall, in
good faith, attempt to reach a mutually acceptable Fair Market Rental Value of
the Premises and consequent Minimum Monthly Rent for the Option Term.
If Landlord and Tenant cannot agree upon the Fair Market Rental Value within
thirty (30) days of Tenant's exercise of the Option, then, within five (5) days
thereafter, Landlord and Tenant shall each select and notify the other of the
name of an "Evaluator," who, for purposes of the Lease, shall be an independent
and impartial real estate professional (such as a licensed real estate agent)
having more than ten years' experience in the leasing of space comparable to the
Premises. Each Evaluator shall promptly proceed to select a third Evaluator,
who shall have the aforesaid qualifications of an Evaluator. Such third
Evaluator shall determine the Fair Market Rental Value of the Premises and shall
deliver to both Landlord and Tenant a copy of such determination within thirty
(30) days after his or her appointment as the third Evaluator. The parties
agree that the third Evaluator's determination as aforesaid shall be considered
as the Fair Market Rental Value of the Premises and shall be conclusive and
binding upon Landlord and Tenant. If the original two Evaluators shall fail to
agree upon the selection of a third Evaluator, the same shall be designated by
the president of the San Diego Board of Realtors, or any successor organization
thereto. Landlord and Tenant shall each pay any fees of their own Evaluator and
shall share equally the fees of the third Evaluator, if any.
As used herein, the term "Fair Market Rental Value" shall mean the then-
prevailing rental for space comparable to the Premises in the Sorrento Valley
area of the City of San Diego that a willing, comparable Tenant would pay to a
willing Landlord, neither of whom is compelled to rent, at arms length during a
term as the case may be on all of the terms and conditions of the Lease (other
than the Minimum Monthly Rent, which is to be determined pursuant to this
Section, and taking into account the option lease term elected by Tenant). The
determination of Fair Market Rental Value shall also include any appropriate
adjustments over the term of the Option Term in the Minimum Monthly Rent based
on the cost of living or otherwise, including any minimums and maximums in the
adjustment thereof.
27. Right of First Offer on Adjacent Space. Provided that Tenant is not in
--------------------------------------
default under the terms of this Lease beyond applicable cure periods, and
provided that no condition exists that with the giving of notice or the passage
of time or both would constitute a default under this Lease, Landlord agrees
that it will offer to lease any unleased portion of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
(the "Additional Space") to Tenant prior to offering the Additional Space to any
other person. Tenant shall have ten (10) days after receipt of such offer to
accept or reject the same. Tenant's failure to accept the same in writing
unconditionally and without change within such 10-day period shall constitute a
rejection of such offer. The rental rate and term of occupancy applicable to
the Additional Space shall be as set forth in this Lease, except that (i) the
Minimum Monthly Rent shall be increased by the proportion that the square
footage of the Premises is thereby increased, effective upon the date possession
of the Additional Space is delivered to Tenant (thereby resulting in the same
per-square-foot rate as then applicable to the initial Premises), (ii) Tenant
shall not be entitled to any abated rent or rental concession, notwithstanding
any such items as may have been contained it this Lease, and (iii) Tenant's
share of Maintenance and Repairs, excess Real Property Taxes, excess insurance
costs and other items (and any impound thereof) shall be increased by the
proportion that the square footage of the Premises is thereby increased,
effective upon the date possession of the Additional Space is delivered to
Tenant. If Landlord's offer is rejected or deemed rejected, then Landlord shall
be free to let the Additional Space covered by such offer to any person, on
terms and conditions determined by Landlord (which may be more or less
advantageous than those offered to Tenant).
28. Replacement/Upgrade of HVAC System. Notwithstanding anything to the
----------------------------------
contrary contained in the Lease, in the event the existing HVAC equipment
serving the Premises requires replacement during the Lease Term. Landlord shall
not include in the cost of Maintenance or Repairs the expense of any replacement
HVAC system with capacity substantially similar to the existing HVAC system.
The parties acknowledge that Tenant may desire to increase the HVAC capacity
serving the Premises and may elect (subject to all of the other terms and
conditions of this Lease) to install additional HVAC equipment serving the
Premises. However, in order to achieve efficiencies of equipment expense and
air handling in the Premises, Tenant agrees to give Landlord the opportunity to
replace the existing HVAC equipment serving the Premises with a system with an
increased capacity equal to that of the existing system plus that of the
additional system planned by Tenant. If Landlord elects to replace the existing
HVAC system at the time of such upgrade, then Landlord shall undertake to do
such work, and Tenant shall only pay the increased cost of the system
attributable to the increase in the system's capacity required by Tenant. In no
2
event shall Tenant be required to pay more that it otherwise would have paid for
an additional, separate system. Landlord shall have the right to require
Tenant's contribution to be deposited with Landlord prior to the commencement of
the work.
For example, if the replacement of Landlord's system would have cost $200,000
and if Tenant's additional HVAC equipment would have cost $40,000, and if a
single system with a capacity equal to the combined capacities of the Landlord's
initial system and Tenant's additional system costs $220,000, then Tenant's
contribution shall be $20,000.
29. Additional Rent; Audit at Election of Tenant. Notwithstanding my provision
--------------------------------------------
in Section 4.6 to the contrary, Tenant shall have the right to audit Landlord's
determination of any Additional Rent due with an accounting firm reasonably
acceptable to Landlord. If such accounting firm shall determine that Landlord's
determination of any Additional Rent is overstated by more than five (5)
percent. Landlord shall bear the cost of such audit. The determination of such
accounting firm shall be final. Any overpayments or underpayment shall be
subject to the provisions of Section 4.5 herein.
30. Damage or Destruction; Condemnation.
-----------------------------------
30.1 Notwithstanding anything in Section 16.9 to the contrary, if any damage,
by any casualty occurs that decreases the rentable square footage of the
Premises by 25% or more, and if the remaining portion of the Premises is
insufficient for Tenant's use, and if such damage is expected to take or shall
take more than one hundred twenty (120) days to repair or if such casualty
occurs during the last six (6) months of the then-current term of the Lease,
then Tenant may terminate this Lease within 30 days of the occurrence of such
damage.
30.2 Notwithstanding anything in Section 17.1 to the contrary, if any
Condemnation occurs that permanently decreases the rentable square footage of
the Premises by 25% or more, and if the remaining portion of the Premises is
insufficient for Tenant's use, the lease will terminate at Tenants electing with
30 days written notice.
31. Non-Disturbance. Notwithstanding anything in Section 19.1 to the contrary,
---------------
Tenant's obligation to subordinate this Lease (and the automatic subordination
of this Lease under the terms of Section 19.1) shall, with respect to all future
ground leases, mortgages, deeds of trust and other security instruments, be
conditioned upon Tenant having first have received an executed non-disturbance
agreement wherein such ground lessor, mortgagee or beneficiary agrees not to
disturb Tenant's right to quiet possession and other rights under this Lease so
long as Tenant pays the rent and performs its other obligations under this
Lease.
32. Limit on Additional Rent in First Lease Year. Notwithstanding anything in
--------------------------------------------
Section 29 to the contrary, if any amounts due under the Lease are based upon
Tenant's Rentable Square Footage in the Building (including, without limitation,
excess Real Property Taxes, excess insurance premiums and Utilities), during the
first Lease Year Tenant's Rentable Square Footage shall be 9,515 square feet
until such time as Tenant occupies and makes use of the space comprising 2,500
square feet and identified on Exhibit A as the "Other Lease Area," during which
time Tenant's Rentable Square Foot shall increase to 11,971 square feet. The
foregoing provision shall have no force or effect after the first Lease Year.
32. Early Occupancy. Tenant shall have the right to occupy the Premises
---------------
beginning March 15, 1997. Tenant shall not be responsible for the payment of
minimum monthly rent during such early occupancy.
33. Balance of Any Overpaid Impound Amounts. If a positive balance of any
---------------------------------------
impound account under Section 4.5 exists as of the date the term of this Lease
expires or has otherwise terminated, then such overpayment shall be paid by
Landlord to Tenant promptly after the expiration or the termination of this
Lease.
34. Documentation of Additional Rent Charges. At Tenant's request, Landlord
----------------------------------------
shall provide documentation reasonably satisfactory to Tenant concerning
Tenant's obligation to pay excess Real Property Taxes or personal property taxes
under Section 8.1 and/or 8.3, and Tenant's obligation to pay excess insurance
premiums under Section 9.4.
3
35. Calculation of Excess Real Property Taxes. Notwithstanding the provisions
-----------------------------------------
of Section 8.2 to the contrary, Landlord agrees not to impose upon Tenant any
charges for excess real property taxes attributable to assessments or other Real
Property Taxes not paid over the longest period of time permitted by law without
penalty or additional charge.
36. Utility Interruption. Notwithstanding anything set forth in Article 10 to
--------------------
the contrary, if any failure or interruption of utilities lasts more than
fifteen (15) consecutive days, and if such failure or interruption is caused by
the sole negligence of Landlord, Tenant shall be entitled to an equitable
abatement of rent commencing after such fifteenth (15th) day to the extent such
failure or interruption interferes with Tenant's operations.
37. Permitted Transfers. Notwithstanding the provisions of Section 18.1,
-------------------
Landlord's consent shall not be required to any Transfer in the event of any
merger of Tenant into or with any other entity, sale of Tenant as a going
concern, or any corporate consolidation or reorganization of Tenant, so long as
the combined entity has a net worth and current assets ratio at least equal to
that of Tenant at the time of such event and Tenant promptly gives Landlord
notice thereof.
38. Remedies. Sections 2l(a), 21(b) and 2l(c) are hereby deleted and replaced
--------
with the following:
(a) Failure to pay when due the rent or any other monetary sums
required hereunder if such failure continues for ten (10) days after
written notice by Landlord to Tenant. Landlord's notice described herein
is intended to satisfy, and is not in addition to, any and all legal
notices required prior to commencement of an unlawful detainer action,
including without limitation the notice requirements of California Code of
Civil Procedure Sections 1161 et seq.
(b) Failure to perform any other agreement or obligation of
Tenant hereunder, if such failure continues for thirty (30) days after
written notice by Landlord to Tenant, except as to those Events of Default
that are non-curable, in which case no such grace period shall apply
(provided, however, that if such default cannot be cured within such thirty
(30) day period, then so long as Tenant is diligently pursuing a cure, such
period shall be extended for up to one hundred twenty (120) days).
Landlord's notice described herein is intended to satisfy, and is not in
addition to, any and all legal notices required prior to commencement of an
unlawful detainer action, including without limitation the notice
requirements of California Code of Civil Procedure Sections 1161 et. seq.
(c) Abandonment or vacation of the Premises by Tenant, or failure
to occupy the Premises for a period of ten (10) consecutive days, unless
Tenant continues to pay rent and is performing it other obligations under
this Lease..
39. Late Charge. Notwithstanding Section 22.4, Landlord shall only impose the
-----------
late charge required under Section 22.4 for the first late payment in any twelve
(12) month period only after thirty (30) days have elapsed from the date such
payment was due.
40. Financial Statements. Notwithstanding Section 24.12, so long as Sequenom,
--------------------
Inc. has not assigned or sublet the Premises or any part thereof, Landlord
agrees that Tenant's year-end financial statements for the year immediately past
shall be sufficient financial statements for the purposes described in Section
24.12.
41. Rules and Regulations. With respect to the Rules and Regulations, Landlord
---------------------
agrees not to unreasonably withhold or delay its consent to the installation of
any aerial, satellite dish, transceiver or other electronic communication
equipment under Section 2 of the Rules and Regulations. Additionally, Landlord
agrees that Section 7 of the Rules and Regulations shall not prohibit Tenant
from maintaining a microwave oven, toaster or coffee machine in the Premises.
4
42. Notice to Lender. In Section 9.3. the words "Landlord's lender" that
----------------
appear in two places are hereby replaced with the words "Landlord's lender of
which Tenant is given written notice."
All other terms and conditions of said Lease shall remain in full force and
effect.
Sequenom, Inc., Sorrento Business Complex, a Limited
a California corporation Partnership
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ By: ▇▇▇▇▇▇▇ Development Company,
--------------------------------- General Partner
By: President By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------- ----------------------------
By ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
"Tenant" "Landlord"
Date 2/13/97 Date 2/18/97
--------------- ------------------
5
SECOND AMENDMENT TO STANDARD INDUSTRIAL GROSS LEASE
---------------------------------------------------
This Second Amendment ("Second Amendment") is made to that certain Standard
Industrial Gross Lease dated December 12, 1996, and amended 3/31/98, (the
"Master Lease") by and between Sorrento Business Complex, a Limited Partnership
("Landlord") and Sequenom, Inc., a California Corporation ("Tenant"), for Suite
A, located at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, containing
approximately 11,971 square feet, which was subsequently expanded to 15,784
square feet, per the First Amendment.
RECITALS
A. Tenant desires to increase its square footage by an additional 940
square feet on the second floor of the building located at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇.
B. Tenant desires to increase its square footage by 1,210 square feet of
warehouse area located at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇.
C. Tenant desires to occupy both of these additional premises for the
duration of the existing lease, which term ends on March 31, 2000.
The lease is hereby amended as follows:
Section 1.2 Description of Premises: Tenant square footage shall increase
------------------------------------
by an additional 940 square feet, known as Suite G, located at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, and an additional 1,210 square feet, known
as Suite 207, located at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
(each a "Premise" and collectively, the "Premises"). The total square footage
shall be 17,934 square feet.
Section 1.3 Commencement Date on Expansion Area: The commencement date
------------------------------------------------
for Suite G, consisting of 940 square feet, at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, shall
be December 15, 1998. The commencement date for Suite 207, located at ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, consisting of 1,210 square feet, shall be November 1,
1998.
Section 3.2 Delay in Commencement: If Landlord can not deliver possession
---------------------------------
of either expansion Premise to Tenant on such Premises commencement date
specified in this Second Amendment for any reason, Landlord shall not be subject
to any liability therefore. Such non-delivery shall not affect the validity of
the Master Lease nor the obligation of the Tenant hereunder, provided, however,
(a) Tenant shall not be obligated to pay rent for either of the expansion
Premises until the possession of such Premise is delivered to Tenant, and (b) if
the possession of either of the Premises is not delivered to Tenant within sixty
(60) days of such Premises commencement date, Tenant may at its sole discretion
elect to terminate this Second Amendment with respect to the undelivered Premise
by delivering written notice to Landlord within ten (10) days thereafter, in
which event the parties shall be discharged from all further obligations
hereunder.
Section 1.4 Lease Term: The Premises shall be leased co-terminus with the
----------------------
master lease and shall begin on the commencement date and end on the last day of
the calendar month of March, 2000, the expiration of the Master Lease.
Section 1.5 Minimum Monthly Rent: If the premises are not delivered to the
--------------------------------
Tenant on such Premises' respective commencement date, the rent listed below
will be reduced pro rata for each day (including the commencement day) that
Tenant is unable to occupy the undelivered Premise.
11/1/98- $24,628 per month;
12/15/98-3/13/99 $25,850 per month.
4/1/99-3/31/2000 $26,978 per month.
Tenant Improvements: Landlord, at Landlord's sole expense, shall provide
-------------------
the following:
1. The existing electrical, mechanical, lighting and plumbing systems to
be in good working order for both Suite G and Suite 207 within the Sorrento
Business Complex upon the commencement date of the lease.
2. Suite G, located at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, shall be re-painted and
if Tenant reasonably determines that the carpet needs to be replaced, it will be
replaced at building standard.
3. Suite 207, located at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, shall be cleaned and
will be provided on an "as is" basis, provided that Tenant shall agree to the
"as is" basis immediately prior to its occupancy of such Premise. By taking
possession of the Premises, Tenant acknowledges that it has examine the Premises
and accepts the condition of the Premises as to "good working order" as used in
this Second Amendment. All of the provisions of the Master Lease regarding
acceptance of the Premises shall apply to both Suite G and Suite 207.
All other terms and conditions contained in the Master Lease shall remain in
full force and effect.
Sequenom, Inc., Sorrento Business Complex, a Limited
a California Corporation Partnership, by: ▇▇▇▇▇▇▇ Development ▇▇▇▇▇▇▇
Development Company, General Partner
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------ ---------------------------------------
By By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------ ---------------------------------------
"Tenant" "Landlord"
Date 11/2/98 Date 11/19/98
---------------------------- -------------------------------------
2
THIRD AMENDMENT TO STANDARD INDUSTRIAL GROSS LEASE
--------------------------------------------------
This Third Amendment ("Third Amendment") is made to that certain Standard
Industrial Gross Lease dated December 12, 1996, and amended 3/31/98 and 11/2/98,
(the "Master Lease") by and between Sorrento Business Complex, a Limited
Partnership ("Landlord") and Sequenom, Inc., a California Corporation
("Tenant"), for Suite A, located at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, containing approximately 11,971 square feet, which was subsequently
expanded to 15,784 square feet, per the First Amendment and 17,934 square feet
per the Second Amendment.
RECITALS
A. Tenant desires to increase its square footage by an additional 5,105
square feet of space on the second floor of the building located at ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇.
B. Tenant desires to extend its lease term for an additional two (2) years
through 3/31/2002.
The lease is hereby amended as follows:
Section 1.2 Description of Premises: Tenant square footage shall increase
------------------------------------
by an additional 5,105 square feet, known as Suite F & H, located at ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇. The total square footage shall be
23,039 square feet.
Section 1.3 Commencement Date of Rent on Expansion Area: The commencement
--------------------------------------------------------
date for Suite F & H shall be February 1, 1999.
Section 3.2 Delay in Commencement: If Landlord can not deliver possession
----------------------------------
of the expansion premises to Tenant on such premises commencement date specified
in this Third Amendment for any reason, Landlord shall not be subject for
liability therefore. Such non-delivery shall not affect the validity of the
Master Lease nor the obligation of the Tenant hereunder; provided, however, (a)
Tenant shall not be obligated to pay rent for the expansion premises until the
possession of Suite F & H is delivered to Tenant, and (b) if the possession of
Suite F & H is not delivered to Tenant within sixty (60) days of such
commencement date, Tenant may at its sole discretion elect to terminate the
Third Amendment with respect to the undelivered premises by delivering written
notice to Landlord within ten (10) days thereafter, in which event the parties
shall be discharged from all further obligations with regard to the expansion
premises hereunder.
Section 1.4 Lease Term: The lease term shall be extended for an additional
-----------------------
two (2) years, commencing April 1, 2000 and ending on the last day of the
calendar month of March, 2002, the new expiration date of the lease.
Section 1.5 Minimum Monthly Rent: If the expansion premises in Suite F & H
---------------------------------
are not delivered to the Tenant on such premises' commencement date, the rent
listed below will be reduced pro rata for each day (including the commencement
day) that Tenant is unable to occupy the undelivered expansion premise.
Section 1.5 Minimum Monthly Rent Continued:
-------------------------------------------
The minimum monthly rent shall be as follows:
2/1/1999 - 3/31/2000 $32,942 per month
4/1/2000 - 3/31/2001 - $46,087 per month
4/1/2001 - 3/31/2002 - $47,921 per month
1. Tenant Improvement Allowance: Landlord hereby grants to Tenant a
---------------------------------
Tenant Improvement Allowance ("Allowance") of Twenty-Five Thousand Dollars
($25,000), which Landlord shall pay to Tenant to reimburse Tenant for the Cost
of the Tenant Improvements. Prior to the commencement of construction of the
Tenant Improvements, Tenant shall prepare and submit to Landlord for Landlord's
reasonable approval a line item construction budget
("Budget") setting forth the costs of Tenant Improvements,. If the Budget (as
approved by Landlord) exceeds the Allowance, the excess costs ("Excess Costs")
shall be borne by Tenant. The Tenant Improvement Allowance shall be promptly
paid to Tenant upon completion of the Tenant Improvements. Tenant shall request
reimbursement of said allowance in writing and provide receipts evidencing the
completion of the construction, together with lien releases, appropriate
building permits and any other documentation reasonably required by Landlord. If
Tenant does not complete such Tenant Improvements by December 31, 1999, the
allowance shall expire and Landlord shall have no obligation to further supply
said allowance.
It is understood that the premises shall be cleaned and is being provided
on an "as is" basis, provided that Tenant agrees to the "as is" basis
immediately prior to its occupancy of the expansion area. By taking possession
of the premises, Tenant acknowledges that it has examined the expansion premises
and accepts the condition of the expansion premises as to "good working order"
as used in this Third Amendment. All of the provisions of the Master Lease
regarding acceptance of the premises shall apply to the expansion suites.
Right of First Offer on Remaining Space in Building: During the entire
----------------------------------------------------
Term prior to leasing or offering to lease any space in the Building contiguous
to the Premises on the open market, Landlord agrees to first offer the space to
Tenant, 2/99 - 3/00 $.28/sq ft, 4/00 - 3/01 $2.00/sq ft, 4/01 - 3/02 $2.08/sq
ft, for such space as determined by the Landlord in its sole discretion. If,
within five (5) business days of such an offer, Tenant agrees to rent such
space, the Additional Space shall be included in the Premises and be leased to
Tenant under the offered terms. If Landlord's offer is rejected or deemed
rejected, then Landlord shall be free to let the Additional Space to any person,
on terms and conditions as may be acceptable to Landlord. If Landlord has not
received a proposal from a potential tenant that leads to the consummation of
the lease for the Additional Space within four (4) months of the date Tenant
rejects or is deemed to have rejected Landlord's offer, then Landlord shall not
let the Additional Space without re-offering the same to Tenant pursuant to the
Terms of this Section.
All other terms and conditions contained in the Master Lease remain in full
force and effect.
Sorrento Business Complex, a
Limited Partnership, by: ▇▇▇▇▇▇▇
Sequenom, Inc., Development Company,
a California Corporation General Partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By: /s/ illegible
--------------------------- -------------------------
By: /s/ illegible By: /s/ illegible
--------------------------- -------------------------
"Tenant" "Landlord"
Date: 2/12/99 Date: 2/19/99
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