SINGLE-TENANT INDUSTRIAL LEASE
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(TRIPLE NET)
LANDLORD:
WHAMC REAL ESTATE LIMITED PARTNERSHIP,
A DELAWARE LIMITED PARTNERSHIP
TENANT:
ALLIANCE PHARMACEUTICAL CORP.,
A NEW YORK CORPORATION
STANDARD FORM SINGLE-TENANT INDUSTRIAL LEASE
TABLE OF CONTENTS
SECTION TITLE PAGE
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SUMMARY OF BASIC LEASE INFORMATION AND DEFINITIONS...............iii
1. Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
2. Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
3. Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
4. Common Area; Operating Expenses. . . . . . . . . . . . . . . . . .3
5. Security Deposit . . . . . . . . . . . . . . . . . . . . . . . . .5
6. Use. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
7. Payments and Notices . . . . . . . . . . . . . . . . . . . . . . .8
8. Brokers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
9. Surrender; Holding Over. . . . . . . . . . . . . . . . . . . . . .8
10. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
11. Repairs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
12. Alterations. . . . . . . . . . . . . . . . . . . . . . . . . . . 10
13. Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
14. Assignment and Subletting. . . . . . . . . . . . . . . . . . . . 11
15. Entry by Landlord. . . . . . . . . . . . . . . . . . . . . . . . 12
16. Utilities and Services . . . . . . . . . . . . . . . . . . . . . 12
17. Indemnification and Exculpation. . . . . . . . . . . . . . . . . 13
18. Damage or Destruction. . . . . . . . . . . . . . . . . . . . . . 13
19. Eminent Domain . . . . . . . . . . . . . . . . . . . . . . . . . 14
20. Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
21. Waiver of Subrogation. . . . . . . . . . . . . . . . . . . . . . 16
22. Tenant's Default and Landlord's Remedies . . . . . . . . . . . . 16
23. Landlord's Default . . . . . . . . . . . . . . . . . . . . . . . 18
24. Subordination. . . . . . . . . . . . . . . . . . . . . . . . . . 18
25. Estoppel Certificate . . . . . . . . . . . . . . . . . . . . . . 18
26. Intentionally Omitted. . . . . . . . . . . . . . . . . . . . . . 19
27. Modification and Cure Rights of Landlord's Mortgagees and Lessors19
28. Quiet Enjoyment. . . . . . . . . . . . . . . . . . . . . . . . . 19
29. Transfer of Landlord's Interest. . . . . . . . . . . . . . . . . 19
30. Limitation on Landlord's Liability . . . . . . . . . . . . . . . 19
31. Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . 19
32. Lease Execution. . . . . . . . . . . . . . . . . . . . . . . . . 21
33. Cancellation Option. . . . . . . . . . . . . . . . . . . . . . . 21
34. Arbitration. . . . . . . . . . . . . . . . . . . . . . . . . . . 21
EXHIBITS
EXHIBIT "A-1" Project Site Plan
EXHIBIT "A-2" Project Legal Description
EXHIBIT "B" Description of Premises
EXHIBIT "C" Work Letter Agreement
EXHIBIT "D" Sample Form of Notice of Lease Term Dates
EXHIBIT "E" Environmental Questionnaire
EXHIBIT "F" Sample Form of Tenant Estoppel Certificate
EXHIBIT "G" Special Improvements
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STANDARD FORM SINGLE-TENANT INDUSTRIAL LEASE
INDEX OF DEFINED TERMS
Abandonment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Actual Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
ADA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Additional Landlord's Work . . . . . . . . . . . . . . . . . . . .EXHIBIT C
Affiliate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Audit Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
BOMA Standard. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Building's Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Cancellation Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Cancellation Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Cancellation Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Cancellation Option. . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Cancellation Period. . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Cap. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
Common Area. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Control. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Declaration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Early Occupancy Date . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Election Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Estimate Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
Existing Tenant. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Extension Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Fair Market Rental . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Force Majeure Delays . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Hazardous Materials. . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Indemnified Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Landlord . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Landlord Indemnified Parties . . . . . . . . . . . . . . . . . . . . . . .6
Landlord's Cost Cap. . . . . . . . . . . . . . . . . . . . . . . .EXHIBIT C
Landlord's Work. . . . . . . . . . . . . . . . . . . . . . . . . .EXHIBIT C
Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Lease. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Occupied Portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Option Period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Other Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Outside Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
PCBs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
Permitted Business . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Pre-Approved Change. . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Preliminary Plans. . . . . . . . . . . . . . . . . . . . . . . . .EXHIBIT C
Real Property Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . .8
Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
rentable area. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
rentable square footage. . . . . . . . . . . . . . . . . . . . . . . . . .1
Special Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Special Transferee . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Tenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Tenant Change. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Tenant Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Tenant Improvements. . . . . . . . . . . . . . . . . . . . . . . .EXHIBIT C
Tenant Indemnified Parties . . . . . . . . . . . . . . . . . . . . . . . 13
Tenant's Monthly Operating Expense Charge. . . . . . . . . . . . . . . . .4
Tenant's Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Tenant's Security System . . . . . . . . . . . . . . . . . . . . . . . . 12
Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Transfer Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Transfer Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Transferee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
usable area. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
usable square footage. . . . . . . . . . . . . . . . . . . . . . . . . . .1
Vacation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Work Letter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
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SUMMARY OF BASIC LEASE INFORMATION AND DEFINITIONS
This SUMMARY OF BASIC LEASE INFORMATION AND DEFINITIONS ("SUMMARY") is hereby
incorporated into and made a part of the attached Single-Tenant Industrial Lease
which pertains to the Premises described in Section 1.4 below. All references
in the Lease to the "Lease" shall include this Summary. All references in the
Lease to any term defined in this Summary shall have the meaning set forth in
this Summary for such term. Any initially capitalized terms used in this
Summary and any initially capitalized terms in the Lease which are not otherwise
defined in this Summary shall have the meaning given to such terms in the Lease.
1.1 LANDLORD'S ADDRESS: WHAMC REAL ESTATE LIMITED PARTNERSHIP
c/o WCB Properties
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: Mr. ▇▇▇▇▇▇ Lack
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
1.2 TENANT'S ADDRESS: ALLIANCE PHARMACEUTICAL CORP.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
1.3 PROJECT: The industrial development known as Pacific Corporate Plaza in
the City of San Diego, County of San Diego, State of California, as
shown on the project site plan attached hereto as EXHIBIT "A-1" and the
legal description of which is attached hereto as EXHIBIT "A-2". The
Project includes all buildings, improvements and facilities now or
subsequently located within such development, including, without
limitation, the Building constituting the Premises.
1.4 PREMISES: That certain 56,799 rentable square foot building
("Building") located within the Project known as ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ and more particularly described in EXHIBIT "A-1"
and EXHIBIT "B" attached hereto.
1.5 TERM: Ten (10) years.
1.6 COMMENCEMENT DATE: The earlier of (i) that date which is one hundred
twenty (120) days after the date of the full execution and delivery of
this Lease by Landlord and Tenant, (ii) the date Tenant commences
business operations from the Premises, or (iii) March 1, 1998.
1.7 LEASE EXPIRATION DATE: The last day of the tenth (10th) annual
anniversary of the Commencement Date, subject to two (2) extension
options of three (3) years pursuant to Section 2.4 of the Lease.
1.8 RENT
PERIOD ANNUAL RENT MONTHLY RENT
------ ----------- ------------
1-12 $647,508.60 $53,959.05
13-24 $670,171.39 $55,847.61
25-36 $693,627.31 $57,802.28
37-48 $717,904.26 $59,825.35
49-60 $743,030.84 $61,919.24
61-72 $769,036.91 $64,086.41
73-84 $795,953.20 $66,329.43
85-96 $823,811.52 $68,650.96
97-108 $852,644.92 $71,053.74
109-120 $882,487.45 $73,540.62
1.9 SECURITY DEPOSIT: $297,330.00 subject to the terms of Section 5 below.
1.10 PERMITTED USE: The Premises may be used only for general office and
biomedical manufacturing and any other legally permitted use consistent
with the character of the Project and approved by Landlord in Landlord's
reasonable discretion.
1.11 BROKERS: CB Commercial Real Estate Group, Inc. representing Landlord
and The ▇▇▇▇▇▇ ▇▇▇▇▇▇ Group, Inc. representing Tenant.
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1.12 INTEREST RATE: The lesser of: (a) the rate announced from time to time
by ▇▇▇▇▇ Fargo Bank or, if ▇▇▇▇▇ Fargo Bank ceases to exist or ceases to
publish such rate, then the rate announced from time to time by the
largest (as measured by deposits) chartered operating bank operating in
California, as its "prime rate" or "reference rate", plus three percent
(3%); or (b) the maximum rate permitted by law.
1.13 TENANT IMPROVEMENTS: The tenant improvements installed or to be
installed in the Premises by Tenant, as described in the Work Letter
Agreement attached hereto as EXHIBIT "C".
1.14 PARKING PASSES: One hundred sixty eight (168) parking privileges
consisting of (i) one hundred and sixty (160) unreserved, uncovered
parking privileges, and (ii) eight (8) unreserved, uncovered guest
parking privileges (which guest parking shall be identified as such and
located in front of the main entrance to the Building).
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SINGLE-TENANT INDUSTRIAL LEASE
This LEASE ("LEASE"), which includes the preceding Summary of Basic Lease
Information and Definitions ("SUMMARY") attached hereto and incorporated herein
by this reference, is made as of the 7th day of November, 1997, by and between
WHAMC REAL ESTATE LIMITED PARTNERSHIP, a Delaware limited partnership
("LANDLORD"), and ALLIANCE PHARMACEUTICAL CORP., a New York corporation
("TENANT").
1. PREMISES.
1.1 LEASE OF PREMISES. Landlord hereby leases to Tenant and Tenant hereby
leases from Landlord the Premises upon and subject to the terms, covenants and
conditions contained in this Lease to be performed by each party. Throughout
the Term of this Lease, Tenant shall have the right to the exclusive use of that
portion of that certain building in the Project commonly known as ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (the "OTHER BUILDING") where the existing HVAC
system serving the Premises is situated only so long as such Other Building
contains the HVAC system servicing the Premises; provided, however, that
Tenant's exclusive use is limited to such portion of the Other Building (where
the existing HVAC system servicing the Premises is situated) and Tenant's use is
further limited for the express purposes of Tenant's access, maintenance and
repair of such HVAC system and for no other purpose. Such Other Building shall
be deemed to be part of the Premises for all purposes under this Lease except
that Tenant will not be obligated to pay Monthly Rent for such Other Building.
1.2 MEASUREMENT OF PREMISES AND/OR PROJECT. At Landlord's discretion, the
number of rentable square feet of the Premises and/or the Project shall be
subject to verification from time to time by Landlord's space measurement
consultant, and such verification shall be made in accordance with the
provisions of this Section 1.2. Tenant's architect may consult with Landlord's
space measurement consultant regarding verification of the number of rentable
square feet of the Premises; however, the reasonable determination of Landlord's
space measurement consultant shall be conclusive and binding upon the parties.
In the event that Landlord's space measurement consultant determines that the
amounts thereof shall be different from those set forth in this Lease, Landlord
shall modify all amounts, percentages and figures appearing or referred to in
this Lease to conform to such corrected rentable square footage (including,
without limitation, the amount of the "Rent," as that term is defined in
Section 3 of this Lease). If such modification is made, it will be confirmed in
writing by Landlord to Tenant. As used in this Lease, the following terms have
the meanings indicated:
(a) The term "USABLE AREA" or "USABLE SQUARE FOOTAGE" means the usable area
as determined in accordance with the Standard Method for Measuring Floor
Area in Office Buildings, ANSI/BOMA Z65.1 - 1996 (the "BOMA STANDARD");
and
(b) The term "RENTABLE AREA" or "RENTABLE SQUARE FOOTAGE" means the rentable
area measured in accordance with the BOMA Standard.
2. TERM.
2.1 TERM; NOTICE OF LEASE DATES. This Lease shall be effective upon the
date first above written (the "EFFECTIVE DATE"). Subject to Section 2.4 below,
the term of this Lease (the "TERM") shall commence upon the Commencement Date
and shall expire on the Lease Expiration Date, unless sooner terminated or
extended as permitted herein, and if extended, the "Term" will include the
applicable Option Period.
2.2 EARLY OCCUPANCY. Subject to Section 2.4 below, Landlord shall deliver
possession of the Premises but not the Occupied Portion (as such term is defined
in Section 2.4 below) within three (3) days following the full execution and
delivery of this Lease (the "EARLY OCCUPANCY DATE") for purposes of construction
of improvements to the Premises (but not the Occupied Portion) in accordance
with the Work Letter attached hereto as EXHIBIT "C" ("WORK LETTER"). Such early
occupancy shall be subject to all of the terms and conditions of this Lease,
including, without limitation, those provisions requiring that Tenant shall be
responsible for all costs, expenses and obligations relating to the Premises
(including, without limitation, Sections 3.2, 3.3, 4, 6, 10, 11, 17, 20 and 22)
except that Tenant will not be obligated to pay Monthly Rent during the period
of such early occupancy and Tenant will not, unless and until Tenant enters or
occupies such Occupied Portion, be subject to any of the terms and conditions of
this Lease for the Occupied Portion until Landlord delivers possession of the
Occupied Portion to Tenant, which delivery date is anticipated to occur on or
about January 1, 1998, subject to the surrender of such Occupied Portion by the
existing tenant thereof.
2.3 OPTIONS TO EXTEND. Tenant shall have two (2) options (each, an
"EXTENSION OPTION") to extend the Term (for the entire Premises only) for a
period (each, an "OPTION PERIOD") of three (3) years, commencing upon the Lease
Expiration Date or, as applicable, the second Option Period, upon the same terms
and conditions previously applicable, except for the grant of any exercised
Extension Option and Annual Rent (which shall be determined as set forth below).
Each Extension Option may be validly exercised only by notice in writing
received by Landlord not later than three hundred sixty (360) calendar days
prior to commencement of the applicable Option Period; provided, however, that
each such Extension Option may be validly exercised only if no uncured material
Tenant default exists as of the date of exercise and, at Landlord's option, as
of the commencement of the applicable Option Period. If Tenant does not
exercise the applicable Extension Option during the exercise period set forth
above in strict accordance with the provisions hereof, the Extension Option and
any unexercised Extension Option (if any) shall forever terminate and be of no
further force or effect. Each such Extension Option is personal to the original
Tenant, may not be exercised by any person or entity other than the original
Tenant and shall become null and void if the original Tenant assigns its
interest in this Lease unless such assignment is to an Affiliate of Tenant (as
that term is defined in Section 14.5) or to a Transferee
who is a Permitted Business (as defined in Section 14.1) but only to the extent
such Transferee is conducting the biomedical manufacturing portion of Tenant's
Permitted Use ("SPECIAL TRANSFEREE"). For purposes of this Section 2.3 and
Section 33, the term "material" relative to a Tenant default shall mean any
monetary default and any material non-monetary default.
Annual Rent during the applicable Option Period shall be equal to ninety-five
percent (95%) of the Fair Market Rental as of the commencement of the applicable
Option Period, but in no event less than Annual Rent payable immediately prior
to the applicable Option Period. For purposes hereof, "FAIR MARKET RENTAL"
shall mean the base rent then being charged to renewal tenants by Landlord in
the Project (or, if not enough comparable transactions exist in the Project,
then the base rent payable during the applicable Option Period to a willing
landlord by a willing renewal tenant for comparable space in comparable
buildings in the vicinity of the Building) with tenants having a similar
financial responsibility, credit rating and capitalization as Tenant then has,
taking into account all other relevant factors for like and comparable space,
improved with tenant improvements of like and comparable quality to those then
existing in the Premises. At least four (4) months prior to the applicable
Option Period, Landlord shall notify Tenant of the Fair Market Rental as
determined by Landlord. Any dispute between the parties hereto with respect to
the amount so determined shall be resolved by arbitration, as set forth below;
provided, however, that there shall be deemed not to be such a dispute unless
Tenant notifies Landlord thereof in writing within one (1) month after Landlord
so notifies Tenant of the Fair Market Rental and Tenant sets forth in such
notice Tenant's determination of Fair Market Rental. If, in the event of a
dispute, the arbitrators have not determined the Fair Market Rental by
commencement of the applicable Option Period, Tenant shall pay as Annual Rent
the amount determined by Landlord until such time as the Fair Market Rental has
been determined by arbitration, whereupon Tenant shall pay any additional amount
due to Landlord based upon such subsequent determination of Fair Market Rental.
If the Annual Rent so paid by Tenant is higher than that ultimately determined
by the arbitration process, then Landlord shall reimburse such difference to
Tenant.
If Tenant timely notifies Landlord in writing of Tenant's dispute regarding
Landlord's determination of the Fair Market Rental, then Fair Market Rental
shall be determined as follows. Landlord and Tenant shall each appoint one
arbitrator who shall by profession be a real estate appraiser active over the
five (5) year period ending on the date of such appointment in the appraisal of
commercial properties in San Diego County and who shall not have been employed
or engaged by either party during said five (5) year period. Each such
arbitrator shall be appointed within fifteen (15) days after Tenant notifies
Landlord of Tenant's dispute of Landlord's determination of Fair Market Rental.
The two arbitrators so appointed shall within fifteen (15) days of the date of
the appointment of the last appointed arbitrator agree upon and appoint a third
arbitrator who shall be qualified under the same criteria set forth above. The
three arbitrators shall, within thirty (30) days of the appointment of the third
arbitrator, reach a decision as to whether the parties shall use Landlord's or
Tenant's submitted Fair Market Rental for the Premises, and shall notify
Landlord and Tenant thereof. Such decision shall be based upon the criteria and
variables set forth above. The new Annual Rent shall thereafter be equal to the
Fair Market Rental of the Premises so selected by the arbitrators. The decision
of the majority of the three arbitrators shall be binding upon Landlord and
Tenant. If either Landlord or Tenant fails to appoint an arbitrator within the
time period specified hereinabove, the arbitrator appointed by one of them shall
reach a decision, notify Landlord and Tenant thereof, and such arbitrator's
decision shall be binding upon Landlord and Tenant. If the two arbitrators fail
to agree upon and appoint a third arbitrator, both arbitrators shall be
dismissed and the matter to be decided shall be forthwith submitted to
arbitration under the provisions of the American Arbitration Association in
accordance with the method described above. The cost of arbitration shall be
paid by Landlord and Tenant equally.
2.4 CONDITIONS PRECEDENT. Landlord will not be obligated to deliver
possession of the Premises to Tenant (but Tenant will be liable, subject to
Section 2.2 hereof and the occurrence of the Commencement Date, for Rent if
Landlord can otherwise deliver the Premises, or the applicable portion thereof,
to Tenant as required hereunder) until (A) Landlord has received from Tenant all
of the following: (i) a copy of this Lease fully executed by Tenant;
(ii) evidence satisfactory to Landlord of the deposit of the Security Deposit in
accordance with Section 5 below, and the first installment of Monthly Rent in
accordance with Section 3.1 below; and (iii) copies of policies of insurance or
certificates thereof as required under Section 21 of this Lease and
(B) NextLevel Systems, Inc., the existing tenant ("EXISTING TENANT") in a
portion (the "OCCUPIED PORTION") of the Premises as of the date hereof has
vacated the Premises; provided, however, that Landlord and Tenant acknowledge
and agree that, subject to the other condition precedents set forth in this
Section 2.4, Landlord shall deliver possession of the Premises (but not the
Occupied Portion) to Tenant in accordance with Section 2.2 and Tenant shall
accept possession of such portion of the Premises on the date of Landlord's
delivery thereof. Notwithstanding anything above to the contrary, the
Commencement Date of this Lease shall occur in the event that Landlord is unable
to deliver possession of the Occupied Portion to Tenant by the Commencement Date
of the Lease with respect to the other portion of the Premises (not including
the Occupied Portion); provided, however, that (i) Tenant's obligation to pay
Monthly Rent with respect to the Occupied Portion of the Premises will, on a per
diem basis, be waived by Landlord (in the proportion that the rentable square
feet of the Occupied Portion bears to the total rentable square feet of the
Premises), for each day past March 1, 1998 ("OUTSIDE DATE") that Landlord so
fails to deliver possession of the Occupied Portion of the Premises to Tenant
and (ii) in accordance with, and subject to, Section 2.2 of this Lease, Tenant
will not be subject to any of the other terms and conditions of this Lease until
Landlord delivers possession of the Occupied Portion to Tenant (unless Tenant
enters or occupies such Occupied Portion).
3. RENT.
3.1 ANNUAL RENT. Tenant agrees to pay Landlord, as rent for the Premises,
the Annual Rent designated in Section 1.8 of the Summary. The Annual Rent shall
be paid by Tenant in twelve (12) equal monthly installments of Monthly Rent in
the amounts designated in Section 1.8 of the Summary in advance on the first day
of each and every calendar month commencing upon the Commencement Date, except
that the first full month's Monthly Rent for the Premises shall be paid upon
execution of this Lease by Tenant. Monthly Rent for any partial month shall be
prorated in the proportion that the number of days this Lease is in effect
during such month bears to the actual number of days in such month.
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3.2 ADDITIONAL RENT. All amounts and charges payable by Tenant under this
Lease in addition to the Annual Rent described in Section 3.1 above shall be
considered additional rent for the purposes of this Lease, and the word "RENT"
in this Lease shall include such additional rent unless the context specifically
or clearly implies that only the Annual Rent is referenced. The Annual Rent and
additional rent shall be paid to Landlord as provided in Section 7, without any
prior demand therefor and without any deduction or offset except as specified
elsewhere in the Lease, in lawful money of the United States of America.
3.3 LATE PAYMENTS. Late payments of Monthly Rent and/or any item of
additional rent will be subject to interest and a late charge as provided in
Sections 22.6 and 22.7 below.
3.4 TENANT'S OBLIGATIONS. Except as otherwise provided herein, all Rent
shall be absolutely net to Landlord so that this Lease shall yield net to
Landlord, the Rent to be paid each month during the Term of this Lease. Nothing
herein contained shall be deemed to require Tenant to pay or discharge any liens
or mortgages of any character whatsoever which may exist or hereafter be placed
upon the Premises by an affirmative act or omission of Landlord.
4. COMMON AREA; OPERATING EXPENSES.
4.1 DEFINITION OF COMMON AREA. The term "COMMON AREA," as used in this
Lease means all areas and the improvements thereon within the exterior
boundaries of the Project now or later made available for the general use of
Landlord, Tenant and other persons entitled to occupy floor area in the Project
and their customers, including, without limitation, the parking facilities of
the Project, loading and unloading areas, trash areas, roadways, sidewalks,
walkways, parkways, driveways, landscaped areas, and similar areas and
facilities situated within the Project which are not reserved for the exclusive
use of any Project occupants and the exterior surfaces and roofs of all
buildings (including the Building) located within the Project. Without limiting
this definition, Landlord may include in the Common Area those portions of the
Project presently or later sold or leased to purchasers or tenants, as the case
may be, until the commencement of construction of the building(s) thereon, at
which time there shall be withdrawn from the Common Area those areas not
provided by such owner or lessee for common use. Common Area shall not include
(i) the entryway to a tenant's premises, (ii) any improvements installed by a
tenant outside of its premises, whether with or without Landlord's knowledge or
consent, or (iii) any areas or facilities that are included in the description
of premises leased to a tenant.
4.2 MAINTENANCE AND USE OF COMMON AREA. The manner in which the Common Area
shall be maintained shall be solely determined by Landlord in Landlord's
reasonable discretion. If any owner or tenant of any portion of the Project
maintains Common Area located upon its parcel or demised premises (Landlord
shall have the right in its sole discretion to allow any purchaser or tenant to
so maintain Common Area located upon its parcel or demised premises and to be
excluded from participation in the payment of Common Area Expenses as provided
below), Landlord shall not have any responsibility for the maintenance of that
portion of the Common Area and Tenant shall have no claims against Landlord
arising out of any failure of such owner or tenant to so maintain its portion of
the Common Area. The use and occupancy by Tenant of the Premises shall include
the right to use the Common Area (except areas used in the maintenance or
operation of the Project), in common with Landlord and other tenants of the
Project and their customers and invitees, subject to (i) any covenants,
conditions and restrictions now or hereafter of record (the "DECLARATION"), and
(ii) such reasonable, non-discriminatory rules and regulations concerning the
Project as may be established by Landlord from time to time. Tenant agrees to
promptly comply with all such rules and regulations and any reasonable,
non-discriminatory amendments thereto upon receipt of written notice from
Landlord.
4.3 CONTROL OF AND CHANGES TO COMMON AREA. Landlord shall have the sole and
exclusive control of the Common Area, as well as the right to make reasonable
changes to the Common Area. Provided Landlord does not materially interfere
with Tenant's use of and access to the Premises, Landlord's rights shall
include, but not be limited to, the right to (a) restrain the use of the Common
Area by unauthorized persons; (b) cause Tenant to remove or restrain persons
from any unauthorized use of the Common Area if they are using the Common Area
by reason of Tenant's presence in the Project; (c) utilize from time to time any
portion of the Common Area for promotional, entertainment, and related matters;
(d) temporarily close any portion of the Common Area for repairs, improvements
or alterations, to discourage non-customer use, to prevent public dedication or
an easement by prescription from arising, or for any other reason deemed
appropriate in Landlord's judgment; and (e) reasonably change the shape and size
of the Common Area, add, eliminate or change the location of improvements to the
Common Area, including, without limitation, buildings, lighting, parking areas,
landscaped areas, roadways, walkways, drive aisles and curb cuts.
4.4 OPERATING EXPENSES. As used in this Section 4.4, the term "BUILDING'S
SHARE" shall mean a fraction, the numerator of which is the rentable square
footage of the Building, and the denominator of which is the rentable square
footage of the Project. Throughout the Term of this Lease, commencing on the
Commencement Date, and in addition to Tenant's obligations set forth in Section
3.4 hereof, Tenant agrees to pay Landlord, as additional rent in accordance with
the terms of this Section 4, the Building's Share of Operating Expenses for the
operation, maintenance, repair, and replacement of the Project and the Common
Area including, without limitation: (i) any form of real property tax,
assessment (including, without limitation, change in ownership taxes and
assessments), license fee, license tax, business license fee, commercial rental
tax, levy, charge, improvement bond or similar imposition of any kind or nature
imposed by any authority having the direct power to tax, including any city,
county, state or federal government, or any school, agricultural, lighting,
drainage or other improvement or special assessment district thereof; (ii) any
and all assessments under any covenants, conditions and restrictions affecting
the Project; (iii) water, sewer and other utility charges for the Common Area;
(iv) costs of commercially reasonable insurance obtained by Landlord; (v) waste
disposal and janitorial services; (vi) security (if any); (vii) labor; (viii)
commercially reasonable management costs including, without limitation: (A)
wages and salaries (and payroll taxes and similar charges ) of property
management employees for the Common Area, (B) management office rental,
supplies, equipment and related operating expenses for the Common Area;
(C) commercially reasonable management/administrative fees; and (D) association
fees and assessments; (ix) supplies, materials, equipment and tools including
rental of personal property; (x) repair and maintenance of the structural
portions of the buildings within the Project, including the plumbing, heating,
ventilating, air-conditioning and electrical systems
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installed or furnished by Landlord; (xi) maintenance, sweeping, repairs,
resurfacing, and upkeep of all parking and other Common Areas; (xii)
amortization on a straight line basis over the useful life together with
interest at the Interest Rate on the unamortized balance of all capitalized
expenditures to the Project; (xiii) gardening and landscaping; (xiv) maintenance
of signs (other than signs of tenants of the Project); (xv) personal property
taxes levied on or attributable to personal property used in connection with the
Common Areas; (xvi) reasonable accounting, audit, verification, legal and other
consulting fees; and (xvii) any other costs and expenses of repairs,
maintenance, painting, lighting, cleaning, and similar items, including
commercially reasonable reserves. Notwithstanding anything above to the
contrary, the term "Operating Expenses" shall not include costs to correct
latent defects in the base, shell and core of the Premises to the extent not
caused by Tenant or Tenant's improvements to the Premises.
4.5 TENANT'S MONTHLY OPERATING EXPENSE CHARGE. From and after the
Commencement Date, Tenant shall pay to Landlord, on the first day of each
calendar month during the Term of this Lease, the Building's Share of an amount
estimated by Landlord to be the Monthly Operating Expenses for the Project for
that month ("TENANT'S MONTHLY OPERATING EXPENSE CHARGE"). Notwithstanding
anything in this Section 4 to the contrary, in no event will Tenant be liable,
in any calendar year of this Lease, for Operating Expense increases in excess of
ten percent (10%) over the Operating Expenses for the immediately preceding
calendar year (the "CAP"); provided, however, that for purposes of the Cap,
costs of commercially reasonable insurance maintained by Landlord, Real Property
Taxes and the costs of capital expenditures, shall not be deemed to be part of
Operating Expenses.
4.6 ESTIMATE STATEMENT. Prior to the Commencement Date and on or about May
1st of each subsequent calendar year during the Term of this Lease, Landlord
will endeavor to deliver to Tenant a statement ("ESTIMATE STATEMENT") wherein
Landlord will estimate Tenant's Monthly Operating Expense Charge for the then
current calendar year. Tenant agrees to pay Landlord, as additional rent,
Tenant's estimated Monthly Operating Expense Charge each month thereafter,
beginning with the next installment of rent due, until such time as Landlord
issues a revised Estimate Statement or the Estimate Statement for the succeeding
calendar year; except that, concurrently with the regular monthly rent payment
next due following the receipt of each such Estimate Statement, Tenant agrees to
pay Landlord an amount equal to one monthly installment of Tenant's estimated
Monthly Operating Expense Charge (less any applicable Operating Expenses already
paid) multiplied by the number of months from January, in the current calendar
year, to the month of such rent payment next due, all months inclusive. If at
any time during the Term of this Lease, but not more often than quarterly,
Landlord reasonably determines that the Building's Share of Operating Expenses
for the current calendar year will be greater than the amount set forth in the
then current Estimate Statement, Landlord may issue a revised Estimate Statement
and Tenant agrees to pay Landlord, within thirty (30) days of receipt of the
revised Estimate Statement, the difference between the amount owed by Tenant
under such revised Estimate Statement and the amount owed by Tenant under the
original Estimate Statement for the portion of the then current calendar year
which has expired. Thereafter Tenant agrees to pay Tenant's Monthly Operating
Expense Charge based on such revised Estimate Statement until Tenant receives
the next calendar year's Estimate Statement or a new revised Estimate Statement
for the current calendar year.
4.7 ACTUAL STATEMENT. By May 1st of each calendar year during the Term of
this Lease, Landlord will also endeavor to deliver to Tenant a statement
("ACTUAL STATEMENT") which states the Building's Share of the actual Operating
Expenses for the preceding calendar year. If the Actual Statement reveals that
the Building's Share of the actual Operating Expenses is more than the total
Additional Rent paid by Tenant for Operating Expenses on account of the
preceding calendar year, Tenant agrees to pay Landlord the difference in a lump
sum within thirty (30) days of receipt of the Actual Statement. If the Actual
Statement reveals that the Building's Share of the actual Operating Expenses is
less than the Additional Rent paid by Tenant for Operating Expenses on account
of the preceding calendar year, Landlord will credit any overpayment toward the
next monthly installment(s) of the Building's Share of the Operating Expenses
due under this Lease. Such obligation will be a continuing one which will
survive the expiration or earlier termination of this Lease. Prior to the
expiration or sooner termination of the Lease Term and Landlord's acceptance of
Tenant's surrender of the Premises, Landlord will have the right to estimate the
actual Operating Expenses for the then current Lease Year and to collect from
Tenant prior to Tenant's surrender of the Premises, the Building's Share of any
excess of such actual Operating Expenses over the estimated Operating Expenses
paid by Tenant in such Lease Year.
4.8 MISCELLANEOUS. Any delay or failure by Landlord in delivering any
Estimate Statement or Actual Statement pursuant to this Section 4 will not
constitute a waiver of its right to require an increase in additional rent for
Operating Expenses nor will it relieve Tenant of its obligations pursuant to
this Section 4, except that Tenant will not be obligated to make any payments
based on such Estimate Statement or Actual Statement until thirty (30) days
after receipt of such Estimate Statement or Actual Statement. If Tenant does
not object to any Estimate Statement or Actual Statement within ninety (90) days
after Tenant receives any such statement, such statement will be deemed final
and binding on Tenant. Even though the Term has expired and Tenant has vacated
the Premises, when the final determination is made of the Building's Share of
the actual Operating Expenses for the year in which this Lease terminates,
Tenant agrees to promptly pay any increase due over the estimated expenses paid
and, conversely, any overpayment made in the event said expenses decrease shall
promptly be rebated by Landlord to Tenant. Such obligation will be a continuing
one which will survive the expiration or termination of this Lease.
4.9 BOOKS AND RECORDS. Landlord shall maintain books and records in
accordance with sound accounting and management practices, reflecting the
Operating Expenses. If Tenant wishes to review or audit the amount of the
Building's Share of Operating Expenses, Tenant must deliver to Landlord a
written notice of Tenant's desire to review or audit Landlord's books and
records ("AUDIT NOTICE") within three (3) months following Tenant's receipt of
Landlord's first annual reconciliation. Thereafter, if Tenant wishes to review
or audit the Building's Share of Operating Expenses as to any subsequent Lease
Year, Tenant and its duly authorized representatives (which representatives
(including Tenant's auditors, if any) shall be subject to Landlord's approval)
shall have the right to do so with respect to any calendar year within six (6)
months following receipt of the applicable Actual Statement for such calendar
year, upon thirty (30) days' prior delivery of an Audit Notice. Such audit will
be conducted (i) during normal business hours at Landlord's California business
offices or at the management office of the Building; (ii) on consecutive
business days until completed; and
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(iii) in an expeditious manner so as to minimize interference with Landlord's
operations. Landlord agrees that Tenant or its auditors shall have the right to
photocopy Landlord's books and records at Tenant's sole cost and expense.
Tenant shall pay in a timely manner as required by this Lease any amounts stated
as due on the Actual Statement, provided that such payment shall not waive any
right to audit and/or dispute by Tenant as set forth herein. In no event will
Landlord or its property manager be required to (i) photocopy any accounting
records or other items or contracts (provided however, that Tenant or its
auditors shall have the right to photocopy Landlord's books and records at
Tenant's sole cost and expense as provided above), (ii) create any ledgers or
schedules not already in existence, (iii) incur any costs or expenses relative
to such inspection, or (iv) perform any other tasks other than making available
such accounting records as are described in this paragraph. Tenant agrees to
deliver to Landlord the results of any such audit within thirty (30) days of
completion of the audit. If Tenant does not deliver an Audit Notice as to any
annual reconciliation within the time frames set forth hereinabove, then Tenant
acknowledges and agrees that such annual reconciliation, and the Actual
Statement and/or any Estimate Statement for such Lease Year, will be
conclusively binding on Tenant.
If Tenant's audit or review reveals that Landlord has overcharged Tenant and
Landlord agrees with the results of such audit or the results of such audit are
confirmed in an arbitration between the parties pursuant to Section 34, then
within thirty (30) days after the results of such audit are made available to
Landlord, Landlord agrees to reimburse Tenant the amount of such overcharge plus
interest at the Interest Rate stated in Section 1.12 of the Summary. If the
audit reveals that Tenant was undercharged, then within thirty (30) days after
the results of the audit are made available to Tenant, Tenant agrees to
reimburse Landlord the amount of such undercharge plus interest thereon at the
Interest Rate stated in Section 1.12 of the Summary within thirty (30) days of
demand by Landlord. Tenant agrees to pay the cost of such audit, provided that
if the audit reveals that Landlord's determination of the Building's Share of
Operating Expenses as set forth in a certified statement sent to Tenant was in
error in Landlord's favor by more than six percent (6%) of the amount paid by
Tenant prior to delivering the Audit Notice and Landlord agrees with the results
of such audit or the results of such audit are confirmed in an arbitration
between the parties pursuant to Section 34, then Landlord agrees to pay the
reasonable, third-party cost of such audit incurred by Tenant within thirty (30)
days of demand by Tenant. To the extent Landlord must pay the cost of such
audit, such cost shall not exceed a reasonable hourly charge for a reasonable
amount of hours spent by such third-party in connection with the audit.
Landlord shall not be liable for any contingency fee payments to any auditors or
consultants of Tenant. Tenant agrees to keep the results of the audit (and any
settlement, if any, resulting therefrom) confidential and will cause its agents,
employees and contractors to keep such results (and any settlement, if any,
resulting therefrom) confidential. If Landlord disputes the results of Tenant's
audit of Operating Expenses, Landlord shall have the right to initiate an
arbitration of the dispute as provided in Section 34.
5. SECURITY DEPOSIT.
5.1 DELIVERY OF LETTER OF CREDIT. On or before December 10, 1997, Tenant
shall deliver to Landlord the Security Deposit in the form of an unconditional,
irrevocable and renewable letter of credit ("Letter of Credit") in favor of
Landlord in form and issued by a bank with an office (capable of honoring a
demand on the Letter of Credit) located in San Diego County, California,
reasonably satisfactory to Landlord, in the initial principal amount specified
in Section 1.9 of the Summary, as security for the faithful performance and
observance by Tenant of the terms, provisions and conditions of this Lease. The
Letter of Credit shall state that an authorized officer or other representative
of Landlord may make demand on Landlord's behalf for the amount owed by Tenant
to Landlord, and that the issuing bank must immediately honor such demand,
without qualification or satisfaction of any conditions, except the proper
identification of the party making such demand and a certification that Tenant
is in default under this Lease, which default is continuing after notice and
expiration of any applicable notice and cure period required by this Lease. In
addition, the Letter of Credit shall indicate that it is transferable in its
entirety by Landlord as beneficiary and that upon receiving written notice of
transfer, and upon presentation to the issuer of the original Letter of Credit,
the issuer will reissue the Letter of Credit naming such transferee as the
beneficiary. If the term of the Letter of Credit held by Landlord will expire
prior to thirty (30) days following the last day of the Term and it is not
extended, or a new Letter of Credit for an extended period of time is not
substituted, within thirty (30) days prior to the expiration of the Letter of
Credit, then Landlord may deliver written notice of such fact to Tenant and if
Tenant does not extend the Letter of Credit or substitute a new Letter of Credit
within ten (10) business days after Tenant's receipt of such notice from
Landlord, Landlord shall be entitled to make demand for the principal amount of
said Letter of Credit and, thereafter, to hold such funds in accordance with
Section 5.3 below. In the event Tenant fails to deliver such Letter of Credit
to Landlord on or before December 10, 1997 then Landlord, in addition to any of
its other rights and remedies, shall have the right to immediately terminate
this Lease or cause Tenant to cease construction of its Tenant Improvements
until such Letter of Credit is furnished to Landlord.
5.2 PRINCIPAL AMOUNT OF LETTER OF CREDIT. The principal amount of the
Letter of Credit shall be as follows:
REQUIRED
MONTHS OF TERM PRINCIPAL AMOUNT
-------------- ----------------
1-60 $297,330.00
61-120 To be equal to the Monthly Rent due
and payable by Tenant for the sixty-
first (61st) month of the Lease Term.
Notwithstanding the foregoing, if as of the applicable reduction date set forth
above, (i) Tenant is in default under this Lease, or (ii) circumstances exist
that would, with notice or lapse of time, or both, constitute a default, then
the principal amount shall not be reduced, unless and until such default or
circumstances shall have been fully cured, at which time the principal amount
may be reduced as hereinabove described. Further notwithstanding the foregoing,
the reduction of the Security Deposit after the sixtieth (60th) month shall also
be conditioned upon (i) Landlord's not having given Tenant written notice of a
failure to pay Rent pursuant to Section 22.1(b) more than three (3) times during
the preceding sixty (60) month period and (ii) Tenant not exercising its
Termination Option (as defined in Section 33 hereof).
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5.3 APPLICATION OF LETTER OF CREDIT. The Letter of Credit shall be held by
Landlord as security for the faithful performance by Tenant of all of the terms,
covenants and conditions of this Lease. If Tenant commits a default with
respect to any provision of this Lease, Landlord may (but shall not be required
to) draw upon the Letter of Credit and use, apply or retain all or any part of
the proceeds for the payment of any sum which is in default, or for the payment
of any other amount which Landlord may spend or become obligated to spend by
reason of Tenant's default or to compensate Landlord for any loss or damage
which Landlord may suffer by reason of Tenant's default. If any portion of the
Letter of Credit is so used or applied, Tenant shall, within ten (10) business
days after demand therefor, post an additional Letter of Credit in an amount
sufficient to restore the Letter of Credit to the principal amount required
under Section 5.2 above. Landlord shall not be required to keep any proceeds
from the Letter of Credit separate from its general funds and Tenant shall not
be entitled to any interest on such proceeds. Should Landlord sell its interest
in the Premises during the Term and if Landlord deposits with the purchaser
thereof the Letter of Credit or any proceeds of the Letter of Credit, thereupon
Landlord shall be discharged from any further liability with respect to the
Letter of Credit and said proceeds.
6. USE.
6.1 GENERAL. Tenant shall use the Premises solely for the Permitted Use
specified in Section 1.10 of the Summary, and shall not use or permit the
Premises to be used for any other use or purpose whatsoever. Except for
Landlord's obligations under Section 11.2 of this Lease, Tenant shall, at its
sole cost and expense, observe and comply with all requirements of any board of
fire underwriters or similar body relating to the Premises, and all laws,
statutes, codes, rules and regulations now or hereafter in force relating to or
affecting the use, occupancy, alteration or improvement (whether structural or
non-structural, including unforeseen and/or extraordinary alterations or
improvements, and regardless of the period of time remaining in the Term) of the
Premises, including, without limitation, the provisions of the Americans with
Disabilities Act ("ADA") as it pertains to Tenant's use, occupancy, improvement
and alteration (whether structural or non-structural, including unforeseen
and/or extraordinary alterations or improvements, and regardless of the period
of time remaining in the Term) of the Premises. Tenant shall not use or allow
the Premises to be used (a) in violation of any recorded covenants, conditions
and restrictions affecting the Premises or of any law or governmental rule or
regulation, or of any certificate of occupancy issued for the Premises, or (b)
for any improper, immoral, unlawful or reasonably objectionable purpose. Tenant
shall not cause, maintain or permit any nuisance in, on or about the Premises,
nor commit or suffer to be committed any waste in, on or about the Premises.
6.2 SIGNS, AWNINGS AND CANOPIES. Tenant shall have the right, at Tenant's
sole cost and expense to install a sign on the Building constituting the
Premises, provided Tenant complies with any covenants of record and obtains
approval from all governmental authorities having jurisdiction over the Premises
and from Landlord, which approval shall not be unreasonably withheld. To the
extent Landlord installs a signage monument adjacent to the Premises, Tenant
shall have the right, at Tenant's sole cost and expense, to install its name on
such signage monument if and when such signage monument is installed by
Landlord. The exact location, dimensions, color, illumination and other
features of all of Tenant's signage shall be subject to Landlord's prior written
approval and otherwise in accordance with the Project's signage program. All of
Tenant's exterior sign rights are personal to the original Tenant executing this
Lease, to any Affiliate of the original Tenant, and to any Special Transferee,
only so long as the original Tenant and/or any Affiliate of the original Tenant
and/or any Special Transferee is occupying at least seventy-five percent (75%)
of the total rental square feet comprising the Premises. Tenant agrees, at
Tenant's sole cost and expense, to maintain any such sign, awning, canopy,
decoration, lettering or advertising matter as may be approved by Landlord in
good condition and repair at all times. At the expiration or earlier
termination of this Lease, at Landlord's election, Tenant shall remove all
signs, awnings, canopies, decorations, lettering and advertising installed by or
at the direction of Tenant and shall repair any damage to the Premises resulting
therefrom all at Tenant's sole cost and expense. If Tenant fails to maintain
any such approved sign, awning, decoration, lettering, or advertising, Landlord
may do so and Tenant shall reimburse Landlord for such cost plus a twenty
percent (20%) overhead fee. If, without Landlord's prior written consent,
Tenant installs any sign, awning, decoration, lettering or advertising, or fails
to remove any such item(s) at the expiration or earlier termination of this
Lease, Landlord may have such item(s) removed and stored and may repair any
damage to the Premises at Tenant's expense. The removal, repair and/or storage
costs shall bear interest until paid at the Interest Rate specified in
Section 1.12 of the Summary.
6.3 HAZARDOUS MATERIALS. Except for ordinary and general office supplies,
such as copier toner, liquid paper, glue, ink and common household cleaning
materials and, to the extent approved in writing by Landlord (which shall not be
unreasonably withheld), materials reasonably necessary for the conduct of
Tenant's business that are used and stored in compliance with all applicable
laws (some or all of which may constitute "Hazardous Materials" as defined in
this Lease), Tenant agrees not to cause or permit any Hazardous Materials to be
brought upon, stored, used, handled, generated, released or disposed of on, in,
under or about the Premises by Tenant, its agents, employees, subtenants,
assignees, licensees, contractors or invitees (collectively, "TENANT'S
PARTIES"), without the prior written consent of Landlord, which consent Landlord
may, except as otherwise expressly provided above (with respect to materials
reasonably necessary for the conduct of Tenant's business that are used and
stored in compliance with all applicable laws), withhold in its sole and
absolute discretion. Concurrently with the execution of this Lease, Tenant
agrees to complete and deliver to Landlord an Environmental Questionnaire in the
form of EXHIBIT "E" attached hereto. Upon the expiration or earlier termination
of this Lease, Tenant agrees to promptly remove from the Premises, at its sole
cost and expense, any and all Hazardous Materials, including any equipment or
systems containing Hazardous Materials which are installed, brought upon,
stored, used, generated or released upon, in, under or about the Premises by
Tenant or any of Tenant's Parties. To the fullest extent permitted by law,
Tenant agrees to promptly indemnify, protect, defend and hold harmless Landlord
and Landlord's partners, officers, directors, employees, agents, successors and
assigns (collectively, "LANDLORD INDEMNIFIED PARTIES") from and against any and
all claims, damages, judgments, suits, causes of action, losses, liabilities,
penalties, fines, expenses and costs (including, without limitation, clean-up,
removal, remediation and restoration costs, sums paid in settlement of claims,
attorneys' fees, consultant fees and expert fees and court costs) which arise or
result from the presence of Hazardous Materials on, in, under or about the
Premises and which are caused or permitted by Tenant or any of Tenant's Parties.
Tenant agrees to promptly notify Landlord of any release of Hazardous Materials
which Tenant becomes aware of during the Term of this Lease, whether caused by
Tenant or any other persons or entities. In the
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event of any release of Hazardous Materials caused or permitted by Tenant or any
of Tenant's Parties or any other persons or entities, Landlord shall have the
right, but not the obligation, to cause Tenant to immediately take all steps
Landlord deems necessary or appropriate to remediate such release and prevent
any similar future release to the satisfaction of Landlord and Landlord's
mortgagee(s). At all times during the Term of this Lease and in accordance with
Section 15 hereof, Landlord will have the right, but not the obligation, to
enter upon the Premises to inspect, investigate, sample and/or monitor the
Premises to determine if Tenant is in compliance with the terms of this Lease
regarding Hazardous Materials. Tenant will, upon the reasonable request of
Landlord (which request shall not, unless Tenant has failed to comply with the
terms and provisions of this Section 6.3 or except in cases of emergency, be
made more than once every six (6) months throughout the Term of this Lease,
cause to be performed an environmental audit of the Premises at Tenant's expense
by an environmental consulting firm reasonably acceptable to Landlord. As used
in this Lease, the term "HAZARDOUS MATERIALS" shall mean and include any
hazardous or toxic materials, substances or wastes as now or hereafter
designated under any law, statute, ordinance, rule, regulation, order or ruling
of any agency of the State, the United States Government or any local
governmental authority, including, without limitation, asbestos, petroleum,
petroleum hydrocarbons and petroleum based products, urea formaldehyde foam
insulation, polychlorinated biphenyls ("PCBs"), freon and other
chlorofluorocarbons, and any material defined as a "biohazardous waste" or
"medical waste" or other waste under California Health and Safety Code,
Division 20, Chapter 6.1 (Medical Waste Management Act). The provisions of this
Section 6.3 will survive the expiration or earlier termination of this Lease.
Tenant shall immediately advise Landlord in writing of, and provide Landlord a
copy of:
(1) Any notice of violation or potential or alleged violation of any
law concerning Hazardous Materials received by Tenant from any
governmental agency; and
(2) Any and all inquiry, investigation, enforcement, clean-up,
removal or governmental or regulatory actions instituted or
threatened relating to the Premises.
Landlord shall indemnify, defend and hold harmless Tenant from and against any
and all claims, judgments, damages, penalties, fines, costs, liabilities and
losses (including, without limitation, sums paid in settlement of claims and for
reasonable attorneys' fees, consultant fees and expert fees, (but specifically
excluding special, indirect or consequential damages including but not limited
to claims for loss of use, anticipated profit or business opportunity,
market-based stigma damages or business interruption, or mental or emotional
distress or fear of injury or disease) to the extent arising as a result of any
Hazardous Materials (1) located in, on or under the Building as of the
commencement of Tenant's occupancy of the Premises, or (2) hereafter caused to
be located in, on or under the Building by Landlord and/or any of Landlord's
employees, agents or representatives or any other persons or entities (except
Tenant or Tenant's Parties). This indemnification of Tenant by Landlord
includes, without limitation, costs incurred in connection with any
investigation of site conditions or any clean-up, remedial, removal or
restoration work. The provisions of this paragraph shall survive the expiration
of the Term or earlier termination of this Lease. Notwithstanding anything
above to the contrary, the foregoing indemnity shall not extend to Hazardous
Materials caused to be located in, on or under the Building by Tenant or any of
Tenant's Parties.
6.4 REFUSE AND SEWAGE. Tenant agrees not to keep any trash, garbage, waste
or other refuse on the Premises except in sanitary containers and agrees to
regularly and frequently remove same from the Premises. Tenant shall keep all
containers or other equipment used for storage of such materials in a clean and
sanitary condition. Tenant shall, at Tenant's sole cost and expense, properly
dispose of all sanitary sewage and shall not use the sewage disposal system for
the disposal of anything except sanitary sewage. Tenant shall keep the sewage
disposal system free of all obstructions and in good operating condition.
Tenant shall contract directly for all trash disposal services at Tenant's sole
cost and expense.
6.5 PARKING.
(a) TENANT'S PARKING PRIVILEGES. During the Term of this Lease, Landlord
shall lease to Tenant, and Tenant shall lease from Landlord, the number
of parking privileges specified in Section 1.14 of the Summary hereof
for use by Tenant's employees in the common parking areas for the
Premises within the Project, as designated by Landlord from time to
time. Landlord shall at all times have the right to reasonably
establish and modify the nature and extent of the parking areas for the
Premises and Project (including whether such areas shall be surface,
underground and/or other structures) as long as Tenant is provided the
number of parking privileges designated in Section 1.14 of the Summary.
In addition, Landlord may, in its sole discretion, assign any unreserved
and unassigned parking privileges, and/or make all or a portion of such
privileges reserved, or unreserved so long as Tenant is provided the
total number of parking privileges in Section 1.14 of the Summary.
(b) PARKING CHARGES; LOSS OF PRIVILEGES. Each of Tenant's parking
privileges set forth in Section 1.14 of the Summary hereof shall not be
subject to any additional charge to Tenant. In addition to such parking
privileges for use by Tenant's employees, Landlord shall permit access
to the parking areas for Tenant's visitors, subject to availability of
spaces.
(c) PARKING RULES. The use of the parking areas shall be subject to any
reasonable, non-discriminatory rules and regulations adopted by Landlord
and/or Landlord's parking operators from time to time, including any
system for controlled ingress and egress and charging visitors and
invitees, with appropriate provision for validation of such charges.
Tenant shall not use more parking privileges than its allotment and
shall not use any parking spaces specifically assigned by Landlord to
other tenants of the Project or for such other uses as visitor parking.
Tenant's parking privileges shall be used only for parking by vehicles
no larger than normally sized passenger automobiles or pick-up trucks.
Tenant shall not permit or allow any vehicles that belong to or are
controlled by Tenant or Tenant's employees, suppliers, shippers,
customers or invitees to be loaded, unloaded, or parked in areas other
than those designated by Landlord for such activities. If Tenant
permits or allows any of the prohibited activities described herein,
then Landlord shall have the right, without notice, in addition to such
other
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rights and remedies that it may have, to remove or tow away the vehicle
involved and charge the cost thereof to Tenant, which cost shall be
immediately payable by Tenant upon demand by Landlord.
7. PAYMENTS AND NOTICES. All Rent and other sums payable by Tenant to
Landlord hereunder shall be paid to Landlord at the address designated in
Section 1.1 of the Summary, or to such other persons and/or at such other places
as Landlord may hereafter designate in writing. Any notice required or
permitted to be given hereunder must be in writing and may be given by personal
delivery (including delivery by nationally recognized overnight courier or
express mailing service), facsimile transmission, or by registered or certified
mail, postage prepaid, return receipt requested, addressed to Tenant at the
address(es) designated in Section 1.2 of the Summary, or to Landlord at the
address(es) designated in Section 1.1 of the Summary. Either party may, by
written notice to the other, specify a different address for notice purposes.
Any such notice shall be deemed duly served or given when actually (i) delivered
or refused, if personally delivered or sent by registered or certified mail or
(ii) recorded as transmitted, if by facsimile transmission.
8. BROKERS. The parties recognize that the broker(s) who negotiated this
Lease are stated in Section 1.11 of the Summary. Each party represents and
warrants to the other, that, to its knowledge, no other broker, agent or finder
(a) negotiated or was instrumental in negotiating or consummating this Lease on
its behalf, and (b) is or might be entitled to a commission or compensation in
connection with this Lease. Any broker, agent or finder of Tenant whom Tenant
has failed to disclose herein shall be paid by Tenant. Tenant shall indemnify,
protect, defend (by counsel reasonably approved in writing by Landlord) and hold
Landlord harmless from and against any and all claims, judgments, suits, causes
of action, damages, losses, liabilities and expenses (including attorneys' fees
and court costs) resulting from any breach by Tenant of the foregoing
representation, including, without limitation, any claims that may be asserted
against Landlord by any broker, agent or finder undisclosed by Tenant herein.
Landlord shall indemnify, protect, defend (by counsel reasonably approved in
writing by Tenant) and hold Tenant harmless from and against any and all claims,
judgments, suits, causes of action, damages, losses, liabilities and expenses
(including attorneys' fees and court costs) resulting from any breach by
Landlord of the foregoing representation, including, without limitation, any
claims that may be asserted against Tenant by any broker, agent or finder
undisclosed by Landlord herein. The foregoing indemnities shall survive the
expiration or earlier termination of this Lease.
9. SURRENDER; HOLDING OVER.
9.1 SURRENDER OF PREMISES. Upon the expiration or sooner termination of
this Lease, Tenant shall surrender all keys for the Premises to Landlord, and
Tenant shall deliver exclusive possession of the Premises to Landlord broom
clean and in first-class condition and repair, reasonable wear and tear excepted
(and casualty damage excepted if this Lease is terminated as a result thereof
pursuant to Section 18), with all of Tenant's personal property (and those
items, if any, of Tenant Improvements and Tenant Changes identified by Landlord
pursuant to Section 12.2 below) removed therefrom and all damage caused by such
removal repaired, as required pursuant to Sections 12.2 and 12.3 below. If, for
any reason, Tenant fails to surrender the Premises on the expiration or earlier
termination of this Lease, with such removal and repair obligations completed,
then, in addition to the provisions of Section 9.3 below and Landlord's rights
and remedies under Section 12.4 and the other provisions of this Lease, Tenant
shall indemnify, protect, defend (by counsel reasonably approved in writing by
Landlord) and hold Landlord harmless from and against any and all claims,
judgments, suits, causes of action, damages, losses, liabilities and expenses
(including attorneys' fees and court costs) resulting from such failure to
surrender, including, without limitation, any claim made by any succeeding
tenant based thereon. The foregoing indemnity shall survive the expiration or
earlier termination of this Lease.
9.2 HOLDING OVER. If Tenant holds over after the expiration or earlier
termination of the Lease Term, then, without waiver of any right on the part of
Landlord as a result of Tenant's failure to timely surrender possession of the
Premises to Landlord, Tenant shall become a tenant at sufferance only, upon the
terms and conditions set forth in this Lease so far as applicable (including
Tenant's obligation to pay all costs, expenses and any other additional rent
under this Lease), but at a Monthly Rent equal to one hundred fifty percent
(150%) of the Monthly Rent applicable to the Premises immediately prior to the
date of such expiration or earlier termination. Acceptance by Landlord of rent
after such expiration or earlier termination shall not constitute a consent to a
hold over hereunder or result in an extension of this Lease. Tenant shall pay
an entire month's Monthly Rent calculated in accordance with this Section 9.2
for any portion of a month it holds over and remains in possession of the
Premises pursuant to this Section 9.2.
9.3 NO EFFECT ON LANDLORD'S RIGHTS. The foregoing provisions of this
Section 9 are in addition to, and do not affect, Landlord's right of re-entry or
any other rights of Landlord hereunder or otherwise provided at law or in
equity.
10. TAXES.
10.1 REAL PROPERTY TAXES. Tenant agrees to pay the Building's Share of all
general and special real property taxes, assessments (including, without
limitation, change in ownership taxes or assessments), liens, bond obligations,
license fees or taxes and any similar impositions in-lieu of other impositions
now or previously within the definition of real property taxes or assessments
and any and all assessments under any covenants, conditions and restrictions
affecting the Project (collectively "REAL PROPERTY TAXES") which may be now or
hereafter levied or assessed against the Project applicable to the period from
the Early Occupancy Date, until the expiration or sooner termination of this
Lease. Notwithstanding the foregoing provisions, if the Real Property Taxes are
not levied and assessed against the entire Project by means of a single tax ▇▇▇▇
(i.e., if the Project is separated into two (2) or more separate tax parcels for
purposes of levying and assessing the Real Property Taxes), then, at Landlord's
option, Tenant shall pay Tenant's pro rata share of all Real Property Taxes
which may be levied or assessed by any lawful authority against the land and
improvements of the separate tax parcel on which the Premises are located.
Tenant's pro rata share under such circumstances shall be apportioned according
to the floor area of the Premises as it relates to the total leasable floor area
of all of the buildings (including the Premises) situated in the separate tax
parcel in which the Premises is located. Notwithstanding anything in this
Section 10.1 to the contrary, "Real Property Taxes" shall not include Landlord's
federal or state income, franchise, inheritance or estate taxes. Upon Tenant's
request, Landlord shall, at Tenant's sole cost and expense, contest the
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amount of Real Property Taxes for the Project, which contest shall be undertaken
in a manner to be reasonably determined by Landlord.
All Real Property Taxes for the tax year in which the Early Occupancy Date
occurs and for the tax year in which this Lease terminates shall be apportioned
and adjusted so that Tenant shall not be responsible for any Real Property Taxes
for a period of time occurring prior to the Early Occupancy Date or subsequent
to the expiration of the Lease term.
The amount to be paid pursuant to the provisions of this Section 10.1 shall be
paid monthly in advance as part of Tenant's Monthly Operating Expense Charge as
estimated by Landlord based on the most recent tax bills and estimates of
reappraised values (if reappraisal is to occur), commencing with the month (or
partial month on a prorated basis if such be the case) that the Commencement
Date occurs. The initial estimated monthly charge for the Building's Share of
Real Property Taxes is included in the Monthly Operating Expense Charge as
provided in Section 4.
Notwithstanding anything in this Lease to the contrary, Tenant shall be solely
responsible for, and shall pay directly to Landlord (in addition to Tenant's
Monthly Operating Expense Charge pertaining to Real Property Taxes), any
increase in Real Property Taxes on account of any improvements made to the
Premises by Tenant including, but not limited to, the Tenant Improvements.
If at any time during the Term under the laws of the United States, or the
state, county, municipality, or any political subdivision thereof in which the
Premises is located, a tax or excise on rent or any other tax however described
is levied or assessed by any such political body against Landlord on account of
rent payable to Landlord hereunder or any tax based on or measured by
expenditures made by Tenant on behalf of Landlord, such tax or excise shall be
considered "Real Property Taxes" for purposes of this Section 10.1, and shall be
payable in full by Tenant. Such taxes or excises shall be payable within thirty
(30) days after Tenant's receipt of the tax ▇▇▇▇ therefor from Landlord.
10.2 PERSONAL PROPERTY TAXES. Tenant shall be liable for, and shall pay
before delinquency, all taxes and assessments (real and personal) levied against
(a) any personal property or trade fixtures placed by Tenant in or about the
Premises (including any increase in the assessed value of the Premises based
upon the value of any such personal property or trade fixtures); and (b) any
Tenant Improvements or alterations in the Premises (whether installed and/or
paid for by Landlord or Tenant). If any such taxes or assessments are levied
against Landlord or Landlord's property, Landlord may, after written notice to
Tenant (and under proper protest if requested by Tenant) pay such taxes and
assessments, and Tenant shall reimburse Landlord therefor within thirty (30)
days after demand by Landlord; provided, however, Tenant, at its sole cost and
expense, shall have the right, with Landlord's cooperation, to bring suit in any
court of competent jurisdiction to recover the amount of any such taxes and
assessments so paid under protest.
11. REPAIRS.
11.1 TENANT'S REPAIR OBLIGATIONS. Except for Landlord's obligations under
Section 11.2 and except for latent defects in the Premises not caused by Tenant
or Tenant's improvements to the Premises, Tenant shall at all times and at
Tenant's sole cost and expense, keep, maintain, clean, repair, renovate,
retrofit, replace and preserve the Premises and all parts thereof, structural
and non-structural, including, without limitation, utility meters, plumbing,
pipes and conduits, all heating, ventilating and air conditioning systems
located within the Premises, all fixtures, furniture and equipment, Tenant's
signs, if any, locks, closing devices, security devices, windows, window sashes,
casements and frames, floors and floor coverings, shelving, restrooms, ceilings,
interior walls, roof, skylights, interior and demising walls, doors, electrical
and lighting equipment, sprinkler systems, walkways, loading dock areas and
doors, rail spur areas, fences, signs, and any Tenant Improvements, Tenant
Changes or other alterations, additions and other property and/or fixtures
located within the Premises in good condition and repair, reasonable wear and
tear excepted. Tenant shall at all times during the Term make all structural
and non-structural changes, repairs and improvements to the Premises of every
kind and nature, whether ordinary or extraordinary, foreseen or unforeseen,
which may be required by any Laws or for the safety of the Premises Tenant
agrees to procure and maintain maintenance contracts for all heating,
ventilating and air conditioning systems with reputable contractors reasonably
approved by Landlord. Tenant agrees, at Tenant's sole cost and expense, to use
contractors designated or otherwise approved by Landlord for any repairs to, or
that will adversely affect, the Building's systems and equipment. Such
maintenance and repairs shall be performed with due diligence, lien-free and in
a good and workmanlike manner, by licensed contractor(s) which are selected by
Tenant and approved by Landlord, which approval Landlord shall not unreasonably
withhold or delay.
11.2 LANDLORD'S REPAIR RIGHTS AND OBLIGATIONS. Except as provided in this
Section 11.2, Landlord has no obligation whatsoever to alter, remodel, improve,
repair, renovate, retrofit, replace, redecorate or paint all or any part of the
Premises. Tenant waives the right to make repairs at Landlord's expense under
any law, statute or ordinance now or hereafter in effect (including the
provisions of California Civil Code Section 1942 and any successive sections or
statutes of a similar nature). If Tenant fails to perform Tenant's obligations
under Section 11.1 hereof, or under any other provision of this Lease, then
Landlord shall have the option (but not the obligation) to enter upon the
Premises after ten (10) days' prior written notice to Tenant, or in the case of
an emergency immediately without prior notice, to perform such obligations on
Tenant's behalf necessary to return the Premises to good order, condition and
repair, whereupon the costs incurred by Landlord shall become due and payable to
Landlord, upon demand, together with a fee of ten percent (10%) of the costs of
such work for Landlord's managing agent. In addition, Landlord shall, as part
of Operating Expenses (but subject, to the extent applicable, Section 4.4(xii)
hereof) for the Project, repair and maintain the Building shell, exterior walls,
foundations and structural portions of the roof; provided, however, to the
extent such maintenance or repairs are required as a result of any act, neglect,
fault or omission of Tenant or any of Tenant's Parties or otherwise made
necessary due to Tenant's use or occupancy of the Premises, Tenant shall pay to
Landlord upon demand, as additional rent, the costs of such maintenance and
repairs, together with a fee of ten percent (10%) of said costs.
11.3 AS-IS. Tenant acknowledges and agrees that, except to the extent
specifically set forth in this Lease and except for latent defects in the
Premises not caused by Tenant or Tenant's improvements to the Premises, Landlord
has not
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made, does not make and specifically negates and disclaims any representations,
warranties, promises, covenants, agreements or guarantees of any kind or
character whatsoever concerning or with respect to (a) the value, nature,
quality or condition of the Premises; (b) the suitability of the Premises for
any and all activities and uses which Tenant may conduct thereon; (c) the
compliance of the Premises with any laws, rules, ordinances or regulations of
any applicable governmental authority or body, including, without limitation,
environmental laws (collectively, "LAWS"); (d) the habitability,
merchantability, marketability, profitability or fitness for a particular
purpose of the Premises; (e) the manner or quality of the construction or
materials incorporated into the Premises; (f) the manner, quality, state of
repair or lack of repair of the Premises; or (g) any other matter with respect
to the Premises. Tenant further acknowledges and agrees that having been given
the opportunity to inspect the Premises, Tenant is relying solely on its own
investigation of the Premises and not on any information provided or to be
provided by Landlord. Tenant further acknowledges and agrees that any
information provided or to be provided by or on behalf of Landlord with respect
to the Premises, was obtained from a variety of sources and that Landlord has
not made any independent investigation or verification of such information and
makes no representations as to the accuracy or completeness of such information.
Tenant further acknowledges and agrees that, except to the extent specifically
set forth in this Lease, the leasing of the Premises as provided for herein is
made on an "AS-IS" condition and basis with all faults. Except as otherwise
expressly provided in this Lease, Landlord shall have no liability or
responsibility for any latent or patent defects in the Premises. Tenant and
anyone claiming by, through or under Tenant hereby fully and irrevocably
releases Landlord from any and all claims that it may now have or hereafter
acquire against Landlord for any cost, loss, liability, damage, expense, demand,
action or cause of action arising from or related to any construction defects,
errors, omissions or other conditions, including, but not limited to,
environmental matters (but subject to Landlord's indemnity set forth in
Section 6.3 hereof), now or hereafter affecting the Premises. This release
includes claims of which Tenant is presently unaware or which Tenant does not
presently suspect to exist in its favor which, if known by Tenant, would
materially affect Tenant's release of Landlord. Tenant specifically waives the
provision of California Civil Code Section 1542, which provides as follows: "A
general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor."
12. ALTERATIONS.
12.1 TENANT CHANGES; CONDITIONS.
(a) Tenant shall not make any alterations, additions, improvements or
decorations to the Premises (collectively, "TENANT CHANGES," and
individually, a "TENANT CHANGE") unless Tenant first obtains Landlord's
prior written approval thereof, which approval Landlord shall not
unreasonably withhold or delay. Notwithstanding the foregoing,
Landlord's prior approval shall not be required for any Tenant Change
which satisfies all of the following conditions (hereinafter a
"PRE-APPROVED CHANGE"): (i) the costs of such Tenant Change does not
exceed Twenty-Five Thousand Dollars ($25,000.00) individually; (ii) the
costs of such Tenant Change when aggregated with the costs of all other
Tenant Changes made by Tenant do not exceed One Hundred Thousand Dollars
($100,000.00) in any one (1) year period; (iii) Tenant delivers to
Landlord final plans, specifications and working drawings for such
Tenant Change at least ten (10) days prior to commencement of the work
thereof; (iv) Tenant and such Tenant Change otherwise satisfy all other
conditions set forth in this Section 12.1; and (v) the Tenant Change
does not affect the structural, mechanical, life-safety, the roof or the
exterior of the Premises.
(b) All Tenant Changes shall be performed: (i) in accordance with the
approved plans, specifications and working drawings; (ii) lien-free and
in a good and workmanlike manner; (iii) in compliance with all laws,
rules and regulations of all governmental agencies and authorities
including, without limitation, the provisions of Title III of the ADA;
and (iv) at such times, in such manner and subject to such rules and
regulations as Landlord may from time to time reasonably designate.
(c) Throughout the performance of the Tenant Changes, Tenant shall obtain,
or cause its contractors to obtain, workers compensation insurance and
commercial general liability insurance in compliance with the provisions
of Section 20 of this Lease.
12.2 REMOVAL OF TENANT CHANGES AND TENANT IMPROVEMENTS. All Tenant Changes
and the initial Tenant Improvements in the Premises (whether installed or paid
for by Landlord or Tenant), shall become the property of Landlord and shall
remain upon and be surrendered with the Premises at the end of the Term of this
Lease; provided, however, Landlord may, by written notice delivered to Tenant on
or before the expiration of the Lease Term (or upon any sooner termination of
this Lease) identify those items of the initial Tenant Improvements and Tenant
Changes which Landlord shall require Tenant to remove at the end of the Term of
this Lease. Landlord shall notify Tenant nine (9) months before the expiration
of the Lease Term of any Tenant Changes and Tenant Improvements that Landlord
shall require Tenant to remove at the end of the Term of this Lease. If
Landlord requires Tenant to remove any such items as described above, Tenant
shall, at its sole cost, remove the identified items on or before the expiration
or sooner termination of this Lease and repair any damage to the Premises caused
by such removal (or, at Landlord's option, shall pay to Landlord all of
Landlord's costs of such removal and repair). Notwithstanding anything above to
the contrary, Tenant shall have the right, at Tenant's sole cost and expense, to
remove any Tenant Improvements in the Premises that constitute Tenant's
biomedical manufacturing use improvements (as opposed to those Tenant
Improvements that are general office type improvements) (the "SPECIAL
IMPROVEMENTS"), which Special Improvements are more particularly described on
EXHIBIT "G", attached hereto; provided, however that Tenant shall remove such
Special Improvements on or before the expiration or sooner termination of this
Lease and repair any damage to the Premises caused by the removal of such
Special Improvements (or, at Landlord's option, shall pay to Landlord all of
Landlord's costs of such removal and repair).
12.3 REMOVAL OF PERSONAL PROPERTY. All articles of personal property owned
by Tenant or installed by Tenant at its expense in the Premises (including
business and trade fixtures, furniture and movable partitions) shall be, and
remain,
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the property of Tenant, and shall be removed by Tenant from the Premises, at
Tenant's sole cost and expense, on or before the expiration or sooner
termination of this Lease. Tenant shall repair any damage caused by such
removal.
12.4 TENANT'S FAILURE TO REMOVE. If Tenant fails to remove by the expiration
or sooner termination of this Lease all of its personal property, or any items
of Tenant Improvements or Tenant Changes identified by Landlord for removal
pursuant to Section 12.2 above, Landlord may, (without liability to Tenant for
loss thereof), at Tenant's sole cost and in addition to Landlord's other rights
and remedies under this Lease, at law or in equity: (a) remove and store such
items in accordance with applicable law; and/or (b) upon ten (10) days' prior
notice to Tenant sell all or any such items at private or public sale for such
price as Landlord may obtain as permitted under applicable law. Landlord shall
apply the proceeds of any such sale to any amounts due to Landlord under this
Lease from Tenant (including Landlord's attorneys' fees and other costs incurred
in the removal, storage and/or sale of such items), with any remainder to be
paid to Tenant.
13. LIENS. Tenant shall not permit any mechanic's, materialmen's or other
liens to be filed against all or any part of the Premises, nor against Tenant's
leasehold interest in the Premises, by reason of or in connection with any
repairs, alterations, improvements or other work contracted for or undertaken by
Tenant or any other act or omission of Tenant or Tenant's agents, employees,
contractors, licensees or invitees. Tenant shall, at Landlord's request,
provide Landlord with enforceable, conditional and final lien releases (and
other reasonable evidence reasonably requested by Landlord to demonstrate
protection from liens) from all persons furnishing labor and/or materials with
respect to the Premises. Landlord shall have the right at all reasonable times
to post on the Premises and record any notices of non-responsibility which it
deems necessary for protection from such liens. If any such liens are filed,
Tenant shall, at its sole cost, immediately cause such lien to be released of
record or bonded so that it no longer affects title to the Premises. If Tenant
fails to cause such lien to be so released or bonded within thirty (30) days
after filing thereof, Landlord may, without waiving its rights and remedies
based on such breach, and without releasing Tenant from any of its obligations,
cause such lien to be released by any means it shall deem proper, including
payment in satisfaction of the claim giving rise to such lien. Tenant shall pay
to Landlord within thirty (30) days after receipt of invoice from Landlord, any
sum paid by Landlord to remove such liens, together with interest at the
Interest Rate from the date of such payment by Landlord.
14. ASSIGNMENT AND SUBLETTING.
14.1 RESTRICTION ON TRANSFER. Tenant will not assign or encumber this Lease
in whole or in part, nor sublet all or any part of the Premises, without the
prior written consent of Landlord, which consent Landlord will not unreasonably
withhold, except as provided in this Section 14. The consent by Landlord to any
assignment, encumbrance or subletting shall not constitute a waiver of the
necessity for such consent to any subsequent assignment or subletting. This
prohibition against assigning or subletting shall be construed to include a
prohibition against any assignment or subletting by operation of law. If this
Lease is assigned by Tenant, or if the Premises or any part thereof are sublet
or occupied by any person or entity other than Tenant, Landlord may collect rent
from the assignee, subtenant or occupant, and apply the net amount collected to
the rent herein reserved, but no such assignment, subletting, occupancy or
collection shall be deemed a waiver on the part of Landlord, or the acceptance
of the assignee, subtenant or occupant as Tenant, or a release of Tenant from
the further performance by Tenant of covenants on the part of Tenant herein
contained unless expressly made in writing by Landlord. Irrespective of any
assignment or sublease, Tenant shall remain fully liable under this Lease and
shall not be released from performing any of the terms, covenants and conditions
of this Lease. Without limiting in any way Landlord's right to withhold its
consent on any reasonable grounds, it is agreed that Landlord will not be acting
unreasonably in refusing to consent to an assignment or sublease if, in
Landlord's opinion, (i) the net worth or financial capabilities of such assignee
is less than that of Tenant at the date hereof, (ii) the proposed assignee or
subtenant does not have the financial capability to fulfill the obligations
imposed by the assignment, (iii) the proposed assignment or sublease involves a
change of use of the Premises from that specified herein, or (iv) the proposed
assignee or subtenant is not, in Landlord's reasonable opinion, of reputable or
good character. Any proposed assignee or subtenant which Landlord does not
disapprove shall be deemed a "PERMITTED BUSINESS." Except with respect to a
transfer of stock of Tenant if Tenant is a publicly-held corporation and such
stock is transferred publicly or through a recognized security exchange or
over-the-counter market, if Tenant is a corporation, or is an unincorporated
association or partnership, the transfer, assignment or hypothecation of any
stock or interest in such corporation, association or partnership in the
aggregate in excess of forty-nine percent (49%) shall be deemed an assignment
within the meaning and provisions of this Section 14.1.
14.2 TRANSFER NOTICE. If Tenant desires to effect an assignment, encumbrance
or subletting (a "TRANSFER"), then at least thirty (30) days prior to the date
when Tenant desires the Transfer to be effective (the "TRANSFER DATE"), Tenant
agrees to give Landlord a notice (the "TRANSFER NOTICE"), stating the name,
address and business of the proposed assignee, sublessee or other transferee
(sometimes referred to hereinafter as "TRANSFEREE"), reasonable information
(including references) concerning the character, ownership, and financial
condition of the proposed Transferee, the Transfer Date, any ownership or
commercial relationship between Tenant and the proposed Transferee, and the
consideration and all other material terms and conditions of the proposed
Transfer, all in such detail as Landlord may reasonably require.
14.3 LANDLORD'S OPTIONS. Within fifteen (15) days of Landlord's receipt of
any Transfer Notice, and any additional information requested by Landlord
concerning the proposed Transferee's financial responsibility, Landlord will
notify Tenant of its election to do one of the following: (i) consent to the
proposed Transfer subject to such reasonable conditions as Landlord may impose
in providing such consent; or (ii) refuse such consent, which refusal shall be
on reasonable grounds; or (iii) with respect to a Transfer (but not including a
Transfer to an Affiliate or to a Special Transferee) of more than fifty-one
percent (51%) of the Premises, terminate this Lease as to all of the Premises
or, in Landlord's sole and absolute discretion, such portion of the Premises
which is proposed to be sublet or assigned and recapture all or such portion of
the Premises for reletting by Landlord.
14.4 ADDITIONAL CONDITIONS. A condition to Landlord's consent to any
Transfer of this Lease will be the delivery to Landlord of a true copy of the
fully executed instrument of assignment, sublease, transfer or hypothecation, in
form and
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substance reasonably satisfactory to Landlord. Tenant agrees to pay to
Landlord, as additional rent, fifty percent (50%) of all sums and other
consideration payable to and for the benefit of Tenant by the assignee or
sublessee in excess of the rent payable under this Lease for the same period
and portion of the Premises. In calculating excess rent or other
consideration which may be payable to Landlord under this Section, Tenant
will be entitled to deduct commercially reasonable third party brokerage
commissions and attorneys' fees and other amounts reasonably and actually
expended by Tenant in connection with such assignment or subletting if
acceptable written evidence of such expenditures is provided to Landlord. No
Transfer will release Tenant of Tenant's obligations under this Lease or
alter the primary liability of Tenant to pay the Rent and to perform all
other obligations to be performed by Tenant hereunder. Landlord may require
that any Transferee remit directly to Landlord on a monthly basis, all monies
due Tenant by said Transferee, and each sublease shall provide that if
Landlord gives said sublessee written notice that Tenant is in default under
this Lease, said sublessee will thereafter make all payments due under the
sublease directly to or as directed by Landlord, which payments will be
credited against any payments due under this Lease. Tenant hereby
irrevocably and unconditionally assigns to Landlord all rents and other sums
payable under any sublease of the Premises; provided, however, that Landlord
hereby grants Tenant a license to collect all such rents and other sums so
long as Tenant is not in default under this Lease. Tenant shall, within ten
(10) days after the execution and delivery of any assignment or sublease,
deliver a duplicate original copy thereof to Landlord. Consent by Landlord
to one Transfer will not be deemed consent to any subsequent Transfer. In
the event of default by any Transferee of Tenant or any successor of Tenant
in the performance of any of the terms hereof, Landlord may proceed directly
against Tenant without the necessity of exhausting remedies against such
Transferee or successor. If Tenant effects a Transfer or requests the
consent of Landlord to any Transfer (whether or not such Transfer is
consummated), then, upon demand, and as a condition precedent to Landlord's
consideration of the proposed assignment or sublease, Tenant agrees to pay
Landlord a non-refundable administrative fee of Five Hundred Dollars
($500.00), plus Landlord's reasonable attorneys' fees and costs and other
costs incurred by Landlord in reviewing such proposed assignment or sublease.
Notwithstanding any contrary provision of this Lease, if Tenant or any
proposed Transferee claims that Landlord has unreasonably withheld or delayed
its consent to a proposed Transfer or otherwise has breached its obligations
under this Section 14, Tenant's and such Transferee's only remedy shall be to
seek a declaratory judgment and/or injunctive relief, and Tenant, on behalf
of itself and, to the extent permitted by law, such proposed Transferee
waives, unless Landlord's consent was withheld in bad faith, all other
remedies against Landlord, including without limitation, the right to seek
monetary damages or to terminate this Lease.
14.5 PERMITTED TRANSFERS. Notwithstanding anything to the contrary contained
in this Article 14, Landlord consents to the Transfer of the Premises to an
adequately capitalized entity which is controlled by, controls, or is under
common control with, Tenant (an "AFFILIATE"), provided that Tenant notifies
Landlord of any such Transfer prior to the effective date thereof and promptly
supplies Landlord with any documents or information requested by Landlord
regarding such Transfer or such Affiliate (including an assumption of Tenant's
obligations under this Lease), and further provided that such Transfer is not a
subterfuge by Tenant to avoid its obligations under this Lease. "CONTROL," as
used in this Section 14.5, shall mean the ownership, directly or indirectly, of
greater than fifty percent (50%) of the voting interest in an entity.
15. ENTRY BY LANDLORD. Landlord and its employees and agents shall at all
reasonable times following prior notice to Tenant (which notice, except in the
case of emergencies and except with respect to ordinary services to be provided
by Landlord within the Premises, shall be no less than twenty-four (24) hours
prior notice), have the right to enter the Premises to inspect the same, to
exhibit the Premises to prospective lenders or purchasers (or during the last
twelve (12) months of the Term, to prospective tenants), to post notices of
non-responsibility, and/or to alter, improve or repair the Premises as
contemplated by Section 11.2 in the event Tenant fails to perform its
obligations under Section 11.1, all without being deemed guilty of or liable for
any breach of Landlord's covenant of quiet enjoyment or any eviction of Tenant,
and without abatement of rent. In exercising such entry rights, Landlord shall
endeavor to minimize, as reasonably practicable, the interference with Tenant's
business, and shall provide Tenant with reasonable advance written notice of
such entry (except in emergency situations). Landlord shall have the means
which Landlord may deem proper to open Tenant's doors in an emergency in order
to obtain entry to the Premises. Any such entry (in accordance with the terms
hereof) to the Premises obtained by Landlord by any of said means or otherwise
shall not under any circumstances be construed or deemed to be a forcible or
unlawful entry into, or a detainer of, the Premises, or an eviction of Tenant
from the Premises or any portion thereof, or grounds for any abatement or
reduction of Rent and Landlord shall not have any liability to Tenant for any
damages or losses on account of any such entry by Landlord except, subject to
the provisions of Sections 21.1 and 23, to the extent of Landlord's gross
negligence or willful misconduct. Except for services (if any) required to be
provided by Landlord to the Premises under this Lease and except in the case of
emergencies, Landlord's entry rights are conditioned upon a representative of
Tenant (but only to the extent a representative is available) accompanying
Landlord during any other entry into the Premises.
16. UTILITIES AND SERVICES. Except for Landlord's Work (as such term is
defined in EXHIBIT "C"), Tenant shall be solely responsible for obtaining and
shall promptly pay all charges for heat, air conditioning, water, gas,
electricity or any other utility used, consumed or provided in, furnished to or
attributable to the Premises directly to the supplying utility companies.
Tenant shall reimburse Landlord within thirty (30) days of billing for fixture
charges and/or water tariffs, if applicable, which are charged to Landlord by
utility companies. Landlord will notify Tenant of this charge as soon as it
becomes known. This charge will increase or decrease with current charges being
levied against Landlord or the Premises by the local utility company, and will
be due as additional rent. In no event shall Rent ▇▇▇▇▇ or shall Landlord be
liable for any interruption or failure in the supply of any such utility
services to Tenant. Tenant acknowledges and agrees that Tenant shall be solely
responsible for providing security for the Premises and that Landlord shall not
be liable for, and Landlord is hereby released from any responsibility for, any
damage either to persons or property sustained by Tenant or any Tenant Parties
on account of any acts of third parties. Tenant may, at its own expense,
install its own security system ("TENANT'S SECURITY SYSTEM") in the Premises;
provided, however, that Tenant shall coordinate the installation and operation
of Tenant's Security System with Landlord to assure that Tenant's Security
System is compatible with the Building's systems and equipment and to the extent
that Tenant's Security System is not compatible
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with the Building's systems and equipment, Tenant shall not be entitled to
install or operate it. Tenant shall be solely responsible, at Tenant's sole
cost and expense, for the monitoring, operation and removal of Tenant's Security
System.
17. INDEMNIFICATION AND EXCULPATION.
17.1 TENANT'S ASSUMPTION OF RISK AND WAIVER. Except to the extent such
matter is not covered by the insurance required to be maintained by Tenant under
this Lease and such matter is attributable to the gross negligence or willful
misconduct of Landlord or Landlord's agent(s), Landlord shall not be liable to
Tenant, Tenant's employees, agents or invitees for: (i) any damage to property
of Tenant, or of others, located in, on or about the Premises, (ii) the loss of
or damage to any property of Tenant or of others by theft or otherwise,
(iii) any injury or damage to persons or property resulting from fire,
explosion, falling plaster, steam, gas, electricity, water, rain or leaks from
any part of the Premises or from the pipes, appliance of plumbing works or from
the roof, street or subsurface or from any other places or by dampness or by any
other cause of whatsoever nature, or (iv) any such damage caused by other
persons in the Premises, occupants of adjacent property, or the public, or
caused by operations in construction of any private, public or quasi-public
work. Landlord shall in no event be liable for any consequential damages or
loss of business or profits and Tenant hereby waives any and all claims for any
such damages. All property of Tenant kept or stored on the Premises shall be so
kept or stored at the sole risk of Tenant and Tenant shall hold Landlord
harmless from any claims arising out of damage to the same, including
subrogation claims by Tenant's insurance carriers, unless such damage shall be
caused by the gross negligence or willful misconduct of Landlord or Landlord's
agent(s). Landlord or its agents shall not be liable for interference with the
light or other intangible rights.
17.2 INDEMNIFICATION. Tenant shall be liable for, and shall indemnify,
defend, protect and hold Landlord and Landlord's partners, officers, directors,
employees, agents, successors and assigns (collectively, "Landlord Indemnified
Parties") harmless from and against, any and all claims, damages, judgments,
suits, causes of action, losses, liabilities and expenses, including attorneys'
fees and court costs (collectively, "INDEMNIFIED CLAIMS"), arising or resulting
from (a) any act or omission of Tenant or any of Tenant's agents, employees,
contractors, subtenants, assignees, licensees or Tenant's invitees
(collectively, "TENANT PARTIES"); (b) the use of the Premises and conduct of
Tenant's business by Tenant or any Tenant Parties, or any other activity, work
or thing done, permitted or suffered by Tenant or any Tenant Parties, in or
about the Premises; and/or (c) any default by Tenant of any obligations on
Tenant's part to be performed under the terms of this Lease. In case any action
or proceeding is brought against Landlord or any Landlord Indemnified Parties by
reason of any such Indemnified Claims, Tenant, upon notice from Landlord, shall
defend the same at Tenant's expense by counsel approved in writing by Landlord,
which approval shall not be unreasonably withheld.
17.3 LANDLORD'S INDEMNIFICATION OF TENANT. Notwithstanding anything to the
contrary contained in Section 17.2 above, subject to the limitation on
Landlord's liability contained in Section 30 below and the mutual waivers
contained in Section 21.1 below, Landlord will be liable for, and agrees to
indemnify, protect, defend and hold harmless Tenant and Tenant's agents,
successors and assigns (collectively, "TENANT INDEMNIFIED PARTIES"), from and
against, any Indemnified Claims (as defined in Section 17.2 above) (but not for
injury to, or interference with, Tenant's or any Tenant Indemnified Parties'
business or for consequential damages), to the extent any such Indemnified Claim
arises or results from (a) any negligent or willful act or omission of Landlord;
(b) any default by Landlord of any obligations on Landlord's part to be
performed under the terms of this Lease; and (c) to the extent covered by the
insurance required to be maintained by Landlord under this Lease (or which would
have been covered if Landlord had carried such required insurance), any acts or
omissions of any third parties occurring in the Common Areas other than the
gross negligence or willful misconduct of Tenant or any Tenant's Parties;
provided, however, that Landlord's indemnity shall not apply or extend to any
such damage or injury which occurs within the Premises which is covered by any
insurance maintained by Tenant or any Tenant Indemnified Parties (or which would
have been covered had Tenant obtained the insurance required under this Lease).
In case any action or proceeding is brought against Tenant or any Tenant
Indemnified Parties by reason of any such injury or damage indemnified by
Landlord as set forth hereinabove, Landlord, upon notice from Tenant, agrees to
defend the same at Landlord's expense by counsel approved in writing by Tenant,
which approval Tenant will not unreasonably withhold.
17.4 SURVIVAL; NO RELEASE OF INSURERS. Tenant's indemnification obligation
under Section 17.2, shall survive the expiration or earlier termination of this
Lease. Tenant's covenants, agreements and indemnification in Sections 17.1 and
17.2 above, are not intended to and shall not relieve any insurance carrier of
its obligations under policies required to be carried by Tenant, pursuant to the
provisions of this Lease.
18. DAMAGE OR DESTRUCTION.
18.1 LANDLORD'S RIGHTS AND OBLIGATIONS. In the event the Premises are
damaged by fire or other casualty to an extent not exceeding forty percent (40%)
of the full replacement cost thereof, and Landlord's contractor estimates in a
writing delivered to the parties that the damage thereto is such that the
Premises may be repaired, reconstructed or restored to substantially its
condition immediately prior to such damage within two hundred ten (210) days
from the date of such casualty, AND Landlord will receive insurance proceeds
sufficient to cover the costs of such repairs, reconstruction and restoration
(including proceeds from Tenant and/or Tenant's insurance which Tenant is
required to deliver to Landlord pursuant to Section 18.2 below), then Landlord
shall commence and proceed diligently with the work of repair, reconstruction
and restoration and this Lease shall continue in full force and effect. If,
however, the Premises are damaged to an extent exceeding forty percent (40%) of
the full replacement cost thereof, or Landlord's contractor estimates that such
work of repair, reconstruction and restoration will require longer than two
hundred ten (210) days to complete, OR Landlord will not receive insurance
proceeds (and/or proceeds from Tenant, as applicable) sufficient to cover the
costs of such repairs, reconstruction and restoration, then Landlord may elect
to either:
(a) repair, reconstruct and restore the portion of the Premises damaged by
such casualty (including the Tenant Improvements and Tenant Changes to
the extent of insurance proceeds received from Tenant) to substantially
the same condition as existed before the damage or destruction, except
for modifications required by building
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codes and other laws and except for any reasonable modifications to the
common areas, in which case this Lease shall continue in full force and
effect; or
(b) terminate this Lease effective as of the date which is thirty (30) days
after Tenant's receipt of Landlord's election to so terminate.
Under any of the conditions of this Section 18.1, Landlord shall give written
notice ("ELECTION NOTICE") to Tenant of its intention to repair or terminate
within the later of sixty (60) days after the occurrence of such casualty, or
fifteen (15) days after Landlord's receipt of the estimate from Landlord's
contractor. Notwithstanding anything above to the contrary, in the event of a
damage or destruction of the Premises where Landlord has made the election in
Section 18.1(a) above, Tenant shall have the right to elect to perform the
reconstruction and restoration of the Tenant Improvements, which reconstruction
and restoration shall be performed in a diligent manner and in accordance with
the Work Letter Agreement attached hereto and otherwise in accordance with
Section 12 hereof.
18.2 TENANT'S COSTS AND INSURANCE PROCEEDS. In the event of any damage or
destruction of all or any part of the Premises, Tenant shall immediately: (a)
notify Landlord thereof; and (b) deliver to Landlord all insurance proceeds
received by Tenant with respect to the Tenant Improvements and Tenant Changes in
the Premises (excluding proceeds for Tenant's furniture and other personal
property), whether or not this Lease is terminated as permitted in this Section
18, and Tenant hereby assigns to Landlord all rights to receive such insurance
proceeds. In the event Tenant has elected to reconstruct and restore the Tenant
Improvements pursuant to Section 18.1 above, then Landlord shall disburse such
insurance proceeds to Tenant on a progress payment basis during Tenant's
reconstruction and restoration of the Tenant Improvements. If, for any reason
(including Tenant's failure to obtain insurance for the full replacement cost of
any Tenant Changes which Tenant is required to insure pursuant to Sections 12.1
and/or 20.1(a) hereof), Tenant fails to receive insurance proceeds covering the
full replacement cost of such Tenant Improvements and Tenant Changes which are
damaged, Tenant shall be deemed to have self-insured the replacement cost of
such Tenant Improvements and Tenant Changes, and upon any damage or destruction
thereto, Tenant shall immediately pay to Landlord the full replacement cost of
such items, less any insurance proceeds actually received by Landlord from
Landlord's or Tenant's insurance with respect to such items.
18.3 ABATEMENT OF RENT. In the event that as a result of any such damage,
repair, reconstruction and/or restoration of the Premises, Tenant is prevented
from using, and does not use, the Premises or any portion thereof, then the rent
shall be abated or reduced, as the case may be, during the period that Tenant
continues to be so prevented from using and does not use the Premises or portion
thereof, in the proportion that the rentable square feet of the portion of the
Premises that Tenant is prevented from using, and does not use, bears to the
total rentable square feet of the Premises. Notwithstanding the foregoing to
the contrary, if the damage is due to the negligence or willful misconduct of
Tenant or any Tenant Parties, there shall be no abatement of rent. Except for
abatement of rent as provided hereinabove, Tenant shall not be entitled to any
compensation or damages for loss of, or interference with, Tenant's business or
use or access of all or any part of the Premises resulting from any such damage,
repair, reconstruction or restoration.
18.4 INABILITY TO COMPLETE. Notwithstanding anything to the contrary
contained in this Section 18, if Landlord is obligated or elects to repair,
reconstruct and/or restore the damaged portion of the Premises pursuant to
Section 18.1 above, but is delayed from completing such repair, reconstruction
and/or restoration beyond the date which is two hundred ten (210) days after the
date of the damage or destruction or the date specified in Landlord's Election
Notice, whichever is later, then any party who has not caused such delay may
elect to terminate this Lease upon thirty (30) days' prior written notice sent
to the other; provided, however, if Tenant terminates this Lease, Landlord may
rescind such termination by completing such work within twenty (20) days
following Landlord's receipt of Tenant's written notice to terminate. In no
event will Tenant have the right to terminate this Lease pursuant to this
Section 18.4 to the extent Tenant has elected to perform the reconstruction and
restoration of the Tenant Improvements pursuant to Section 18.1 above.
18.5 DAMAGE TO THE PROJECT. If there is a total destruction of the Project
or a partial destruction of the Project, the cost of restoration of which would
exceed one-third (1/3) of the then replacement value of the Project, by any
cause whatsoever, whether or not insured against and whether or not the Premises
are partially or totally destroyed, Landlord may within a period of one hundred
eighty (180) days after the occurrence of such destruction, notify Tenant in
writing that it elects not to so reconstruct or restore the Project, in which
event this Lease shall cease and terminate as of the date of such destruction.
18.6 DAMAGE NEAR END OF TERM. In addition to its termination rights in
Sections 18.1 and 18.4 above, Landlord shall have the right to terminate this
Lease if any damage to the Premises occurs during the last twelve (12) months of
the Term of this Lease and Landlord's contractor estimates in a writing
delivered to the parties that the repair, reconstruction or restoration of such
damage cannot be completed within the earlier of (a) the scheduled expiration
date of the Lease Term, or (b) sixty (60) days after the date of such casualty.
18.7 WAIVER OF TERMINATION RIGHT. This Lease sets forth the terms and
conditions upon which this Lease may terminate in the event of any damage or
destruction. Accordingly, the parties hereby waive the provisions of California
Civil Code Section 1932, Subsection 2, and Section 1933, Subsection 4 (and any
successor statutes thereof permitting the parties to terminate this Lease as a
result of any damage or destruction).
19. EMINENT DOMAIN.
19.1 TOTAL OR PARTIAL TAKING. In case all of the Premises, or such part
thereof as shall materially and substantially interfere with Tenant's ability to
conduct its business upon the Premises, shall be taken for any public or
quasi-public purpose by any lawful power or authority by exercise of the right
of appropriation, condemnation or eminent domain, or sold to prevent such
taking, Tenant shall have the right to terminate this Lease effective as of the
date possession is required to be surrendered to said authority. Tenant shall
not assert any claim against Landlord or the taking authority for any
compensation because of such taking, and Landlord shall be entitled to receive
the entire amount of any award
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without deduction for any estate or interest of Tenant; provided, however, in
the event of such a taking, Tenant shall be entitled to such portion of the
award as shall be attributable to the loss of the unamortized cost of the
improvements to the Premises made and paid for by Tenant pursuant to EXHIBIT "C"
(such amortization being the same as that used by Tenant for federal income tax
purposes), goodwill and for damage to, or the cost of removal of, Tenant's
personal property. In the event the amount of property or the type of estate
taken shall not materially and substantially interfere with the ability of
Tenant to conduct its business upon the Premises, Landlord shall be entitled to
the entire amount of the award without deduction for any estate or interest of
Tenant, Landlord shall restore the Premises to substantially their same
condition prior to such partial taking to the extent of any award proceeds
received by Landlord, and a fair and equitable abatement shall be made to Tenant
for the Annual Rent corresponding to the time during which, and to the part of
the Premises of which, Tenant shall be so deprived on account of such taking and
restoration. If the award proceeds from the taking are insufficient to restore
the Premises as required by the preceding sentence and Landlord does not provide
its own funds to so restore the Premises, and if as a result thereof Tenant's
ability to use the Premises as contemplated by this Lease is materially and
substantially impaired, then Tenant may elect to terminate this Lease by giving
Landlord written notice thereof; provided, however, Landlord may rescind such
termination by giving Tenant written notice within ten (10) business days
following Landlord's receipt of such termination notice from Tenant that
Landlord will provide the necessary funds to so restore the Premises.
Notwithstanding anything above to the contrary, if any part of the Project shall
be taken (whether or not such taking substantially interferes with Tenant's use
of the Premises), Landlord may terminate this Lease upon thirty (30) days' prior
written notice to Tenant as long as Landlord also terminates leases of all other
tenants leasing comparably sized space within the Project for comparable lease
terms.
19.2 TEMPORARY TAKING. In the event of taking of the Premises or any part
thereof for temporary use, (i) this Lease shall be and remain unaffected thereby
and Rent shall not ▇▇▇▇▇, and (ii) Tenant shall be entitled to receive for
itself such portion or portions of any award made for such use with respect to
the period of the taking which is within the Lease Term. For purposes of this
Section 19.2, a temporary taking shall be defined as a taking for a period of
one (1) year or less.
19.3 WAIVER OF TERMINATION. Tenant and Landlord waive any right to terminate
this Lease under Section 1265.130 of the California Code of Civil Procedure, or
any similar statute or law now or hereafter in force.
20. INSURANCE.
20.1 TYPES OF TENANT'S INSURANCE. On or before the earlier of the Early
Occupancy Date or the date Tenant commences or causes to be commenced any work
of any type in or on any portion of the Premises, and continuing during the
entire Term, Tenant shall obtain and keep in full force and effect respecting
the Premises, the following insurance:
(a) All Risk insurance, including fire and extended coverage, sprinkler
leakage (including earthquake sprinkler leakage), vandalism and
malicious mischief upon property of every description and kind located
on the Premises, including, without limitation, furniture, equipment and
any other personal property, any Tenant Changes and the Tenant
Improvements (but excluding any improvements previously existing in the
Premises) in an amount not less then the full replacement cost thereof.
In the event that there shall be a dispute as to the amount which
comprises full replacement cost, the decision of Landlord or the
mortgagees of Landlord shall be presumptive.
(b) Commercial general liability insurance coverage, including personal
injury, bodily injury (including wrongful death), broad form property
damage, operations hazard, owner's protective coverage, contractual
liability, liquor liability (if Tenant serves or stores alcohol on the
Premises), products and completed operations liability, and
owned/non-owned auto liability, with a general aggregate of not less
than Two Million Dollars ($2,000,000.00). The general aggregate amount
of such commercial general liability insurance shall be increased every
three (3) years during the Term of this Lease to an amount reasonably
required by Landlord but only to the extent such increase is required of
tenants comparable to Tenant by landlords of buildings comparable to the
Building.
(c) Worker's compensation and employer's liability insurance, in statutory
amounts and limits, covering all persons employed in connection with any
work done in, on or about the Premises for which claims for death or
bodily injury could be asserted against Landlord, Tenant or the
Premises.
(d) Any other form or forms of insurance as Tenant or Landlord or the
mortgagees of Landlord may reasonably require from time to time, in
form, amounts and for insurance risks against which a prudent tenant
would protect itself, but only to the extent such risks and amounts are
available in the insurance market at commercially reasonable costs and
is required of tenants comparable to Tenant by landlords of buildings
comparable to the Building.
20.2 REQUIREMENTS. Each policy required to be obtained by Tenant hereunder
shall: (a) be issued by insurers authorized to do business in the state in which
the Premises is located and rated not less than financial class VII, and not
less than policyholder rating A- in the most recent version of Best's Key Rating
Guide (provided that, in any event, the same insurance company shall provide the
coverages described in Section 20.1(a) above); (b) be in form reasonably
satisfactory from time to time to Landlord; (c) name Tenant as named insured
thereunder and shall name Landlord and, at Landlord's request, Landlord's
mortgagees and ground lessors of which Tenant has been informed in writing, as
additional insureds (and with respect to the insurance described in
Section 20.1(a) above, as loss-payees) thereunder, all as their respective
interests may appear; (d) shall not have a property insurance deductible amount
exceeding Twenty-Five Thousand Dollars ($25,000.00); (e) specifically provide
that the insurance afforded by such policy for the benefit of Landlord and
Landlord's mortgagees and ground lessors shall be primary, and any insurance
carried by Landlord or Landlord's mortgagees and ground lessors shall be excess
and non-contributing; (f) except for worker's compensation insurance, contain an
endorsement that the insurer waives its right to subrogation as described in
Section 22 below; and
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(g) contain an undertaking by the insurer to notify Landlord (and the mortgagees
and ground lessors of Landlord who are named as additional insureds) in writing
not less than thirty (30) days prior to any change, reduction in coverage,
cancellation or other termination thereof. Tenant agrees to deliver to
Landlord, as soon as practicable after the placing of the required insurance,
but in no event later than ten (10) days after the date Tenant takes possession
of all or any part of the Premises, certificates from the insurance company
evidencing the existence of such insurance and Tenant's compliance with the
foregoing provisions of this Section 20). Tenant shall cause replacement
certificates to be delivered to Landlord not less than thirty (30) days prior to
the expiration of any such policy or policies. If any such initial or
replacement certificates are not furnished within the time(s) specified herein,
Tenant shall be deemed to be in material default under this Lease without the
benefit of any additional notice or cure period provided in Section 22.1 below,
and Landlord shall have the right, but not the obligation, to procure such
policies and certificates at Tenant's expense.
20.3 EFFECT ON INSURANCE. Tenant shall not do or permit to be done anything
which (a) will violate or invalidate any insurance policy maintained by Tenant
or Landlord hereunder or (b) increase the costs of any insurance policy
maintained by Landlord pursuant to Section 20.4 below. If Tenant's occupancy or
conduct of its business in or on the Premises results in any increase in
premiums for any insurance carried by Landlord with respect to the Building
and/or the Project, Tenant shall pay such increase as additional rent within
thirty (30) days after being billed therefor by Landlord. If any insurance
coverage carried by Landlord shall be cancelled or reduced (or cancellation or
reduction thereof shall be threatened) by reason of the use or occupancy of the
Premises by Tenant or by anyone permitted by Tenant to be upon the Premises, and
if Tenant fails to remedy such condition within five (5) business days after
notice thereof, Tenant shall be deemed to be in default under this Lease,
without the benefit of any additional notice or cure period specified in Section
22.1 below, and Landlord shall have all remedies provided in this Lease, at law
or in equity, including, without limitation, the right (but not the obligation)
to enter upon the Premises and attempt to remedy such condition at Tenant's
cost.
20.4 LANDLORD'S INSURANCE. During the Term, Landlord shall insure the Common
Area improvements and the Premises (excluding, however, Tenant's furniture,
equipment, personal property, the Tenant Improvements and Tenant Changes)
against damage by fire and standard extended coverage perils and with vandalism
and malicious mischief endorsements, rental loss coverage, at Landlord's option,
earthquake damage coverage, and such additional coverage as Landlord deems
appropriate. Landlord shall also carry commercial general liability insurance,
in such reasonable amounts and with such reasonable deductibles as would be
carried by a prudent owner of a similar building in the state in which the
Building is located. At Landlord's option, all such insurance may be carried
under any blanket or umbrella policies which Landlord has in force for other
buildings and projects. In addition, at Landlord's option, Landlord may elect
to self-insure all or any part of such required insurance coverage. Landlord
may, but shall not be obligated to, carry any other form or forms of insurance
as Landlord or the mortgagees or ground lessors of Landlord may reasonably
determine is advisable. The cost of insurance obtained by Landlord pursuant to
this Section 20.4 (including self-insured amounts and deductibles) shall be
included in Operating Expenses.
21. WAIVER OF SUBROGATION.
21.1 WAIVER. Tenant and Landlord hereby waive their rights against each
other with respect to any claims or damages or losses which are caused by or
result from (a) damage insured against under any insurance policy carried by
Tenant or Landlord (as the case may be) pursuant to the provisions of this Lease
and enforceable at the time of such damage or loss, or (b) damage which would
have been covered under any insurance required to be obtained and maintained by
Tenant or Landlord (as the case may be) under Section 20 of this Lease had such
insurance been obtained and maintained as required therein. The foregoing
waiver shall be in addition to, and not a limitation of, any other waivers or
releases contained in this Lease.
21.2 WAIVER OF INSURERS. Tenant shall cause each insurance policy required
to be obtained by it pursuant to Section 20 to provide that the insurer waives
all rights of recovery by way of subrogation against Landlord in connection with
any claims, losses and damages covered by such policy. If Tenant fails to
maintain property insurance required hereunder, such insurance shall be deemed
to be self-insured with a deemed full waiver of subrogation as set forth in the
immediately preceding sentence.
22. TENANT'S DEFAULT AND LANDLORD'S REMEDIES.
22.1 TENANT'S DEFAULT. The occurrence of any one or more of the following
events shall constitute a default under this Lease by Tenant:
(a) the vacation or abandonment of the Premises by Tenant. "ABANDONMENT" is
herein defined to include, but is not limited to, any absence by Tenant
from the Premises for eight (8) business days or longer while in default
in the payment of Rent. "VACATION" shall mean vacating the Premises
without providing a reasonable level of security to minimize the
potential for vandalism, or where the coverage of the property insurance
under Section 20.1(a) is jeopardized as a result thereof;
(b) the failure by Tenant to make any payment of Rent or any other payment
required to be made by Tenant hereunder, within ten (10) days of written
notice from Landlord that such payment was not received;
(c) the failure by Tenant to observe or perform any of the express or
implied covenants or provisions of this Lease to be observed or
performed by Tenant, other than as specified in Sections 22.1(a) or (b)
above, where such failure shall continue for a period of thirty (30)
days after written notice thereof from Landlord to Tenant; provided,
however, that if the nature of Tenant's default is such that more than
thirty (30) days are reasonably required for its cure, then Tenant shall
not be deemed to be in default if Tenant shall commence such cure within
said thirty (30) day period and thereafter diligently prosecute such
cure to completion; and
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(d) (i) the making by Tenant of any general assignment for the benefit of
creditors, (ii) the filing by or against Tenant of a petition to have
Tenant adjudged a bankrupt or a petition for reorganization or
arrangement under any law relating to bankruptcy (unless, in the case of
a petition filed against the Tenant, the same is dismissed within sixty
(60) days), (iii) the appointment of a trustee or receiver to take
possession of substantially all of Tenant's assets located at the
Premises or of Tenant's interest in this Lease, where possession is not
restored to Tenant within sixty (60) days, or (iv) the attachment,
execution or other judicial seizure of substantially all of Tenant's
assets located at the Premises or of Tenant's interest in this Lease
where such seizure is not discharged within sixty (60) days.
(e) Any notice given under this Section 22.1 shall be in lieu of, and not in
addition to, any notice required under California Code of Civil
Procedure, Section 1161.
22.2 LANDLORD'S REMEDIES; TERMINATION. In the event of any such default by
Tenant, in addition to any other remedies available to Landlord under this
Lease, at law or in equity, Landlord shall have the immediate option to
terminate this Lease and all rights of Tenant hereunder. In the event that
Landlord shall elect to so terminate this Lease, then Landlord may recover from
Tenant:
(a) the worth at the time of award of any unpaid rent which had been earned
at the time of such termination; plus
(b) the worth at the time of the award of the amount by which the unpaid
rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss 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 term after the time of award exceeds the amount
of such rental loss that Tenant proves could be reasonably avoided; plus
(d) any other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant's failure to perform its obligations under
this Lease or which, in the ordinary course of things, would be likely
to result therefrom including, but not limited to: unamortized Tenant
Improvement costs; attorneys' fees; unamortized brokers' commissions;
the costs of refurbishment, alterations, renovation and repair of the
Premises; and removal (including the repair of any damage caused by such
removal) and storage (or disposal) of Tenant's personal property,
equipment, fixtures, Tenant Changes, Tenant Improvements and any other
items which Tenant is required under this Lease to remove but does not
remove.
As used in Sections 22.2(a) and 22.2(b) above, the "worth at the time of award"
is computed by allowing interest at the Interest Rate set forth in Section 1.12
of the Summary. As used in Section 22.2(c) above, the "worth at the time of
award" is 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%).
22.3 LANDLORD'S REMEDIES; RE-ENTRY RIGHTS. In the event of any such default
by Tenant (with all applicable notice and cure periods having expired), in
addition to any other remedies available to Landlord under this Lease, at law or
in equity, Landlord shall also have the right as permitted by applicable law,
with or without terminating this Lease, to re-enter the Premises and remove all
persons and property from the Premises; such property may be removed, stored
and/or disposed of pursuant to Section 12.4 of this Lease or any other
procedures permitted by applicable law. No re-entry or taking possession of the
Premises by Landlord pursuant to this Section 22.3, and no acceptance of
surrender of the Premises or other action on Landlord's part, shall be construed
as an election to terminate this Lease unless a written notice of such intention
be given to Tenant or unless the termination thereof be decreed by a court of
competent jurisdiction.
22.4 LANDLORD'S REMEDIES; CONTINUATION OF LEASE. In the event of any such
default by Tenant, in addition to any other remedies available to Landlord under
this Lease, at law or in equity, Landlord shall have the right to continue this
Lease in full force and effect, whether or not Tenant shall have abandoned the
Premises. The foregoing remedy shall also be available to Landlord pursuant to
California Civil Code Section 1951.4 and any successor statute thereof in the
event Tenant has abandoned the Premises. In the event Landlord elects to
continue this Lease in full force and effect pursuant to this Section 22.4, then
Landlord shall be entitled to enforce all of its rights and remedies under this
Lease, including the right to recover rent as it becomes due. Landlord's
election not to terminate this Lease pursuant to this Section 22.4 or pursuant
to any other provision of this Lease, at law or in equity, shall not preclude
Landlord from subsequently electing to terminate this Lease or pursuing any of
its other remedies.
22.5 LANDLORD'S RIGHT TO PERFORM. Except as specifically provided otherwise
in this Lease, all covenants and agreements by Tenant under this Lease shall be
performed by Tenant at Tenant's sole cost and expense and without any abatement
or offset of rent. If Tenant shall fail to pay any sum of money (other than
Annual Rent) or perform any other act on its part to be paid or performed
hereunder and such failure shall continue for ten (10) days with respect to
monetary obligations (or thirty (30) days with respect to non-monetary
obligations) after Tenant's receipt of written notice thereof from Landlord,
Landlord may, without waiving or releasing Tenant from any of Tenant's
obligations, make such payment or perform such other act on behalf of Tenant.
All sums so paid by Landlord and all necessary incidental costs incurred by
Landlord in performing such other acts shall be payable by Tenant to Landlord
within five (5) days after demand therefor as additional rent.
22.6 INTEREST. If any monthly installment of Annual Rent, or any other
amount payable by Tenant hereunder is not received by Landlord by the date which
is ten (10) days from the date when due, it shall bear interest at the Interest
Rate set forth in Section 1.12 of the Summary from the date due until paid. All
interest, and any late charges imposed pursuant to Section 22.7 below, shall be
considered additional rent due from Tenant to Landlord under the terms of this
Lease.
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22.7 LATE CHARGES. Tenant acknowledges that, in addition to interest costs,
the late payments by Tenant to Landlord of any Annual Rent or other sums due
under this Lease will cause Landlord to incur costs not contemplated by this
Lease, the exact amount of such costs being extremely difficult and impractical
to fix. Such other costs include, without limitation, processing,
administrative and accounting charges and late charges that may be imposed on
Landlord by the terms of any mortgage, deed of trust or related loan documents
encumbering the Premises. Accordingly, if any monthly installment of Annual
Rent or any other amount payable by Tenant hereunder is not received by Landlord
by that date which is ten (10) days from the due date thereof, Tenant shall pay
to Landlord an additional sum of six percent (6%) of the overdue amount as a
late charge, but in no event more than the maximum late charge allowed by law.
The parties agree that such late charge represents a fair and reasonable
estimate of the costs that Landlord will incur by reason of any late payment as
hereinabove referred to by Tenant, and the payment of late charges and interest
are distinct and separate in that the payment of interest is to compensate
Landlord for the use of Landlord's money by Tenant, while the payment of late
charges is to compensate Landlord for Landlord's processing, administrative and
other costs incurred by Landlord as a result of Tenant's delinquent payments.
Acceptance of a late charge or interest shall not constitute a waiver of
Tenant's default with respect to the overdue amount or prevent Landlord from
exercising any of the other rights and remedies available to Landlord under this
Lease or at law or in equity now or hereafter in effect.
22.8 [INTENTIONALLY DELETED].
22.9 RIGHTS AND REMEDIES CUMULATIVE. All rights, options and remedies of
Landlord contained in this Section 22 and elsewhere in this Lease shall be
construed and held to be cumulative, and no one of them shall be exclusive of
the other, and Landlord shall have the right to pursue any one or all of such
remedies or any other remedy or relief which may be provided by law or in
equity, whether or not stated in this Lease. Nothing in this Section 22 shall
be deemed to limit or otherwise affect Tenant's indemnification of Landlord
pursuant to any provision of this Lease.
23. LANDLORD'S DEFAULT. Landlord shall not be in default in the performance
of any obligation required to be performed by Landlord under this Lease unless
Landlord has failed to perform such obligation within thirty (30) days after the
receipt of written notice from Tenant specifying in detail Landlord's failure to
perform; provided however, that if the nature of Landlord's obligation is such
that more than thirty (30) days are required for its performance, then Landlord
shall not be deemed in default if it commences such performance within such
thirty (30) day period and thereafter diligently pursues the same to completion.
Upon any such uncured default by Landlord, Tenant may exercise any of its rights
provided in law or at equity; provided, however: (a) Tenant shall have no right
to offset or ▇▇▇▇▇ Rent in the event of any default by Landlord under this
Lease; and (b) Tenant's rights and remedies hereunder shall be limited to the
extent (i) Tenant has expressly waived in this Lease any of such rights or
remedies, and/or (ii) this Lease otherwise expressly limits Tenant's rights or
remedies, including the limitation on Landlord's liability contained in Section
30 hereof.
24. SUBORDINATION. Without the necessity of any additional document being
executed by Tenant for the purpose of effecting a subordination, this Lease
shall be subject and subordinate at all times to (a) all ground leases or
underlying leases which may now exist or hereafter be executed affecting the
Premises and/or the land upon which the Premises and Project are situated, or
both and (b) any mortgage or deed of trust which may now exist or be placed upon
the Building, the Project and/or the land upon which the Premises or the Project
are situated and (c) any ground lease or underlying leases, or Landlord's
interest or estate in any of said items, which is specified as security.
Notwithstanding the foregoing, Landlord shall have the right to subordinate or
cause to be subordinated any such ground leases or underlying leases or any such
liens to this Lease. In the event that any ground lease or underlying lease
terminates for any reason, or any mortgage or deed of trust is foreclosed or a
conveyance in lieu of foreclosure is made for any reason, Tenant shall,
notwithstanding any subordination, attorn to and become the Tenant of the
successor in interest to Landlord and Tenant shall not be disturbed in its
possession under this Lease by such successor in interest so long as Tenant is
not in default under this Lease. Within ten (10) days after request by
Landlord, Tenant shall execute and deliver any additional documents evidencing
Tenant's attornment or the subordination of this Lease with respect to any such
ground leases or underlying leases or any such mortgage or deed of trust, in the
form requested by Landlord or by any ground landlord, mortgagee, or beneficiary
under a deed of trust, subject to such nondisturbance requirement.
Notwithstanding anything above to the contrary, any subordination of this Lease
to any such future mortgage, ground lease or deed of trust is conditioned upon
any such future mortgagee, lessor or beneficiary providing Tenant with a
commercially reasonable form of non-disturbance agreement. Tenant hereby waives
its rights under any current or future law which gives or purports to give
Tenant any right to terminate or otherwise adversely affect this Lease and the
obligations of Tenant hereunder in the event of any such foreclosure proceeding
or sale. Should Tenant fail to sign and return any such additional documents
within the ten (10) day period referred to above, Tenant shall be in default
hereunder without the benefit of any additional notice or cure periods specified
in Section 22.1 above. Landlord agrees to cause the mortgagees existing as of
the date hereof to provide Tenant with a commercially reasonable non-disturbance
agreement within a commercially reasonable period of time after Tenant's request
therefor.
25. ESTOPPEL CERTIFICATE.
25.1 TENANT'S OBLIGATIONS. Within ten (10) business days following
Landlord's written request, Tenant shall execute and deliver to Landlord an
estoppel certificate, in a form substantially similar to the form of EXHIBIT "F"
attached hereto, certifying: (a) the Commencement Date of this Lease; (b) that
this Lease is unmodified and in full force and effect (or, if modified, that
this Lease is in full force and effect as modified, and stating the date and
nature of such modifications); (c) the date to which the Rent and other sums
payable under this Lease have been paid; (d) that there are not, to the best of
Tenant's knowledge, any defaults under this Lease by either Landlord or Tenant,
except as specified in such certificate; and (e) such other matters as are set
forth in EXHIBIT "F" or are reasonably requested by Landlord. Any such estoppel
certificate delivered pursuant to this Section 25.1 may be relied upon by any
mortgagee, beneficiary, purchaser or prospective purchaser of any portion of the
Premises, as well as their assignees.
25.2 TENANT'S FAILURE TO DELIVER. Tenant's failure to deliver such estoppel
certificate within such time shall constitute a default hereunder without the
applicability of notice and cure periods specified in Section 22.1 above and
shall be
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conclusive upon Tenant that: (a) this Lease is in full force and effect without
modification, except as may be represented by Landlord; (b) there are no uncured
defaults in Landlord's or Tenant's performance (other than Tenant's failure to
deliver the estoppel certificate); and (c) not more than one (1) month's rental
has been paid in advance.
26. INTENTIONALLY OMITTED.
27. MODIFICATION AND CURE RIGHTS OF LANDLORD'S MORTGAGEES AND LESSORS.
27.1 MODIFICATIONS. If, in connection with Landlord's obtaining or entering
into any financing or ground lease for any portion of the Premises, the lender
or ground lessor shall request modifications to this Lease, Tenant shall, within
ten (10) days after request therefor, execute an amendment to this Lease
including such modifications, provided such modifications are reasonable, do not
increase the obligations of Tenant hereunder, or adversely affect the leasehold
estate created hereby or Tenant's rights hereunder.
27.2 CURE RIGHTS. In the event of any default on the part of Landlord,
Tenant will give notice by registered or certified mail to any beneficiary of a
deed of trust or mortgagee covering the Premises or ground lessor of Landlord
whose address shall have been furnished to Tenant, and shall offer such
beneficiary, mortgagee or ground lessor a reasonable opportunity to cure the
default (including with respect to any such beneficiary or mortgagee, time to
obtain possession of the Premises, subject to this Lease and Tenant's rights
hereunder, by power of sale or judicial foreclosure, if such should prove
necessary to effect a cure).
28. QUIET ENJOYMENT. Landlord covenants and agrees with Tenant that, upon
Tenant performing all of the covenants and provisions on Tenant's part to be
observed and performed under this Lease (including payment of rent hereunder),
Tenant shall and may peaceably and quietly have, hold and enjoy the Premises in
accordance with and subject to the terms and conditions of this Lease as against
all persons claiming by, through or under Landlord.
29. TRANSFER OF LANDLORD'S INTEREST. The term "Landlord" as used in this
Lease, so far as covenants or obligations on the part of the Landlord are
concerned, shall be limited to mean and include only the owner or owners, at the
time in question, of the fee title to, or a lessee's interest in a ground lease
of, the Premises. In the event of any transfer or conveyance of any such title
or interest (other than a transfer for security purposes only), the transferor
shall be automatically relieved of all covenants and obligations on the part of
Landlord contained in this Lease accruing after the date of such transfer or
conveyance. Landlord and Landlord's transferees and assignees shall have the
absolute right to transfer all or any portion of their respective title and
interest in the Premises and/or this Lease without the consent of Tenant, and
such transfer or subsequent transfer shall not be deemed a violation on
Landlord's part of any of the terms and conditions of this Lease.
30. LIMITATION ON LANDLORD'S LIABILITY. Notwithstanding anything contained
in this Lease to the contrary, the obligations of Landlord under this Lease
(including any actual or alleged breach or default by Landlord) do not
constitute personal obligations of the individual partners, directors, officers
or shareholders of Landlord or Landlord's partners, and Tenant shall not seek
recourse against the individual partners, directors, officers or shareholders of
Landlord or Landlord's partners, or any of their personal assets for
satisfaction of any liability with respect to this Lease. In addition, in
consideration of the benefits accruing hereunder to Tenant and notwithstanding
anything contained in this Lease to the contrary, Tenant hereby covenants and
agrees for itself and all of its successors and assigns that the liability of
Landlord for its obligations under this Lease (including any liability as a
result of any actual or alleged failure, breach or default hereunder by
Landlord), shall be limited solely to, and Tenant's and its successors' and
assigns' sole and exclusive remedy shall be against, Landlord's interest in the
Premises, and no other assets of Landlord.
31. MISCELLANEOUS.
31.1 GOVERNING LAW. This Lease shall be governed by, and construed pursuant
to, the laws of the state in which the Premises is located.
31.2 SUCCESSORS AND ASSIGNS. Subject to the provisions of Section 29 above,
and except as otherwise provided in this Lease, all of the covenants, conditions
and provisions of this Lease shall be binding upon, and shall inure to the
benefit of, the parties hereto and their respective heirs, personal
representatives and permitted successors and assigns; provided, however, no
rights shall inure to the benefit of any Transferee of Tenant unless the
Transfer to such Transferee is made in compliance with the provisions of Section
14, and no options or other rights which are expressly made personal to the
original Tenant or an Affiliate of Tenant or in any rider attached hereto shall
be assignable to or exercisable by anyone other than the original Tenant or an
Affiliate of Tenant.
31.3 NO MERGER. The voluntary or other surrender of this Lease by Tenant or
a mutual termination thereof shall not work as a merger and shall, at the option
of Landlord, either (a) terminate all or any existing subleases, or (b) operate
as an assignment to Landlord of Tenant's interest under any or all such
subleases.
31.4 PROFESSIONAL FEES. If either Landlord or Tenant should bring suit
against the other with respect to this Lease, including for unlawful detainer or
any other relief against the other hereunder, then all costs and expenses
incurred by the prevailing party therein (including, without limitation, its
actual appraisers', accountants', attorneys' and other professional fees,
expenses and court costs), shall be paid by the other party.
31.5 WAIVER. The waiver by either party of any breach by the other party of
any term, covenant or condition herein contained shall not be deemed to be a
waiver of any subsequent breach of the same or any other term, covenant and
condition herein contained, nor shall any custom or practice which may become
established between the parties in the administration of the terms hereof be
deemed a waiver of, or in any way affect, the right of any party to insist upon
the
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performance by the other in strict accordance with said terms. No waiver of any
default of either party hereunder shall be implied from any acceptance by
Landlord or delivery by Tenant (as the case may be) of any rent or other
payments due hereunder or any omission by the non-defaulting party to take any
action on account of such default if such default persists or is repeated, and
no express waiver shall affect defaults other than as specified in said waiver.
The subsequent acceptance of rent hereunder by Landlord shall not be deemed to
be a waiver of any preceding breach by Tenant of any term, covenant or condition
of this Lease other than the failure of Tenant to pay the particular rent so
accepted, regardless of Landlord's knowledge of such preceding breach at the
time of acceptance of such rent.
31.6 TERMS AND HEADINGS; INTERPRETATION. The words "Landlord" and "Tenant"
as used herein shall include the plural as well as the singular. Words used in
any gender include other genders. The Section headings of this Lease are not a
part of this Lease and shall have no effect upon the construction or
interpretation of any part hereof. Any deletion of language from this Lease
prior to its execution by Landlord and Tenant shall not be construed to raise
any presumption, canon of construction or implication, including, without
limitation, any implication that the parties intended thereby to state the
converse of the deleted language.
31.7 TIME. Time is of the essence with respect to performance of every
provision of this Lease in which time or performance is a factor. All
references in this Lease to "days" shall mean calendar days unless specifically
modified herein to be "business" days.
31.8 PRIOR AGREEMENTS; AMENDMENTS. This Lease, including the Summary and all
Exhibits and Riders attached hereto contains all of the covenants, provisions,
agreements, conditions and understandings between Landlord and Tenant concerning
the Premises and any other matter covered or mentioned in this Lease, and no
prior agreement or understanding, oral or written, express or implied,
pertaining to the Premises or any such other matter shall be effective for any
purpose. No provision of this Lease may be amended or added to except by an
agreement in writing signed by the parties hereto or their respective successors
in interest. The parties acknowledge that all prior agreements, representations
and negotiations are deemed superseded by the execution of this Lease to the
extent they are not expressly incorporated herein.
31.9 SEPARABILITY. The invalidity or unenforceability of any provision of
this Lease (except for Tenant's obligation to pay Rent) shall in no way affect,
impair or invalidate any other provision hereof, and such other provisions shall
remain valid and in full force and effect to the fullest extent permitted by
law.
31.10 RECORDING. Neither Landlord nor Tenant shall record this Lease. In
addition, neither party shall record a short form memorandum of this Lease
without the prior written consent (and signature on the memorandum) of the
other, and provided that prior to recordation Tenant executes and delivers to
Landlord, in recordable form, a properly acknowledged quitclaim deed or other
instrument extinguishing all of the Tenant's rights and interest in and to the
Premises, and designating Landlord as the transferee, which deed or other
instrument shall be held by Landlord and may be recorded by Landlord once this
Lease terminates or expires (but not prior thereto). If such short form
memorandum is recorded in accordance with the foregoing, the party requesting
the recording shall pay for all costs of or related to such recording,
including, but not limited to, recording charges and documentary transfer taxes.
31.11 EXHIBITS AND RIDERS. All Exhibits attached to this Lease are hereby
incorporated in this Lease for all purposes as though set forth at length
herein.
31.12 AUCTIONS. Tenant shall have no right to conduct any auction in, on or
about the Premises.
31.13 ACCORD AND SATISFACTION. No payment by Tenant or receipt by Landlord of
a lesser amount than the rent payment herein stipulated shall be deemed to be
other than on account of the rent, nor shall any endorsement or statement on any
check or any letter accompanying any check or payment as rent be deemed an
accord and satisfaction, and Landlord may accept such check or payment without
prejudice to Landlord's right to recover the balance of such rent or pursue any
other remedy provided in this Lease. Tenant agrees that each of the foregoing
covenants and agreements shall be applicable to any covenant or agreement either
expressly contained in this Lease or imposed by any statute or at common law.
31.14 FINANCIAL STATEMENTS. Upon ten (10) days prior written request from
Landlord (which Landlord may make at any time during the Term but no more often
than once in any calendar year), Tenant shall deliver to Landlord a current 10-Q
quarterly report and/or 10-K annual report ("STATEMENTS") of Tenant and any
guarantor of this Lease. Such Statements shall be prepared in accordance with
generally acceptable accounting principles and certified as true in all material
respects by Tenant (if Tenant is an individual) or by an authorized officer or
general partner of Tenant (if Tenant is a corporation or partnership,
respectively).
31.15 NO PARTNERSHIP. Landlord does not, in any way or for any purpose,
become a partner of Tenant in the conduct of its business, or otherwise, or
joint venturer or a member of a joint enterprise with Tenant by reason of this
Lease.
31.16 FORCE MAJEURE. In the event that either party hereto shall be delayed
or hindered in or prevented from the performance of any act required hereunder
by reason of strikes, lock-outs, labor troubles, inability to procure materials,
failure of power, governmental moratorium or other governmental action or
inaction (including failure, refusal or delay in issuing permits, approvals
and/or authorizations), injunction or court order, riots, insurrection, war,
fire, earthquake, flood or other natural disaster or other reason of a like
nature not the fault of the party delaying in performing work or doing acts
required under the terms of this Lease (but excluding delays due to financial
inability) (herein collectively, "FORCE MAJEURE DELAYS"), then performance of
such act shall be excused for the period of the delay and the period for the
performance of any such act shall be extended for a period equivalent to the
period of such delay. The provisions of this
-20-
Section 31.16 shall not apply to nor operate to excuse Tenant from the payment
of Rent strictly in accordance with the terms of this Lease.
31.17 COUNTERPARTS. This Lease may be executed in one or more counterparts,
each of which shall constitute an original and all of which shall be one and the
same agreement.
31.18 NONDISCLOSURE OF LEASE TERMS. Tenant acknowledges and agrees that the
terms of this Lease are confidential and constitute proprietary information of
Landlord. Disclosure of the terms could adversely affect the ability of
Landlord to negotiate other leases and impair Landlord's relationship with other
tenants. Accordingly, Tenant agrees that it, and its partners, officers,
directors, employees, agents and attorneys, shall not intentionally and
voluntarily disclose the terms and conditions of this Lease to any newspaper or
other publication or any other tenant or apparent prospective tenant of the
Building or other portion of the Premises, or real estate agent, either directly
or indirectly, without the prior written consent of Landlord, provided, however,
that Tenant may disclose the terms to prospective subtenants or assignees under
this Lease.
31.19 NON-DISCRIMINATION. Tenant acknowledges and agrees that there shall be
no discrimination against, or segregation of, any person, group of persons, or
entity on the basis of race, color, creed, religion, age, sex, marital status,
national origin, or ancestry in the leasing, subleasing, transferring,
assignment, occupancy, tenure, use, or enjoyment of the Premises, or any portion
thereof.
32. LEASE EXECUTION.
32.1 TENANT'S AUTHORITY. If Tenant executes this Lease as a partnership or
corporation, then Tenant and the persons and/or entities executing this Lease on
behalf of Tenant represent and warrant that: (a) Tenant is a duly authorized and
existing partnership or corporation, as the case may be, and is qualified to do
business in the state in which the Premises are located; (b) such persons and/or
entities executing this Lease are duly authorized to execute and deliver this
Lease on Tenant's behalf in accordance with the Tenant's partnership agreement
(if Tenant is a partnership), or a duly adopted resolution of Tenant's board of
directors and the Tenant's by-laws (if Tenant is a corporation); and (c) this
Lease is binding upon Tenant in accordance with its terms.
32.2 JOINT AND SEVERAL LIABILITY. If more than one person or entity executes
this Lease as Tenant: (a) each of them is and shall be jointly and severally
liable for the covenants, conditions, provisions and agreements of this Lease to
be kept, observed and performed by Tenant; and (b) the act or signature of, or
notice from or to, any one or more of them with respect to this Lease shall be
binding upon each and all of the persons and entities executing this Lease as
Tenant with the same force and effect as if each and all of them had so acted or
signed, or given or received such notice.
32.3 NO OPTION. The submission of this Lease for examination or execution by
Tenant does not constitute a reservation of or option for the Premises and this
Lease shall not become effective as a Lease until it has been executed by
Landlord and delivered to Tenant.
33. CANCELLATION OPTION. Provided Tenant fully and completely satisfies
each of the conditions set forth in this Section 33, Tenant shall have a
one-time option ("CANCELLATION OPTION") to terminate this Lease effective
between the period ("CANCELLATION PERIOD") commencing on January 1, 2003 to
March 31, 2003, with the exact cancellation date ("CANCELLATION DATE") to be the
date within the Cancellation Period specified by Tenant in Tenant's Cancellation
Notice (as defined below) but in no event earlier than nine (9) months after the
date of Tenant's Cancellation Notice. In order to exercise the Cancellation
Option, Tenant must fully and completely satisfy each and every one of the
following conditions: (a) Tenant must give Landlord written notice
("CANCELLATION NOTICE") of its intention to terminate this Lease, which
Cancellation Notice must be delivered to Landlord at least nine (9) months prior
to the expiration of the Cancellation Period, (b) at the time of the
Cancellation Notice, Tenant shall not be in material default under this Lease
after expiration of applicable notice and cure periods, (c) concurrently with
Tenant's delivery of the Cancellation Notice to Landlord, Tenant shall pay to
Landlord a cancellation fee ("CANCELLATION FEE") equal to the sum of (i) the
unamortized balance, as of the Cancellation Date, of the brokerage commissions
paid by Landlord in connection with this Lease, plus (ii) an amount equal to
four (4) months' Monthly Rent calculated at the rate payable at the time of the
Cancellation Date and (d) Tenant shall have satisfied all of Tenant's surrender
obligations under Section 9.1 of the Lease. On the Cancellation Date, the
parties shall be relieved of any further obligations under this Lease except for
those obligations in the Lease which survive the termination or expiration
thereof. Amortization pursuant to this Section 33 shall be calculated on a ten
(10) year amortization schedule commencing as of the Commencement Date based
upon equal monthly payments of principal and interest, with interest imputed on
the outstanding principal balance at the rate of ten percent (10%) per annum.
34. ARBITRATION. In the event of any dispute by Landlord of Tenant's audit
of the Building's Share of Operating Expenses as set forth in Section 4.9, such
dispute shall be resolved through binding arbitration pursuant to this
Section 34. If demand for arbitration is timely made as provided in
Subsection (a) below, such arbitration shall be conducted in accordance with
Title 9 of the California Code of Civil Procedure, Section 1280, ET SEQ., unless
otherwise specified herein. The arbitrator shall be selected from the
Commercial Arbitration panel of the American Arbitration Association and shall
have commercial real estate leasing and, with respect to a dispute under
Section 4.9 hereof, accounting expertise. Any such arbitration shall be held
and conducted, within thirty (30) days after the selection of an arbitrator, in
San Diego County, California. The provisions of the Commercial Arbitration
Rules of the American Arbitration Association shall apply and govern such
arbitration, subject, however, to the following:
(a) Any demand for arbitration shall be in writing and must be made and
served on Tenant within a reasonable time after the claim, dispute or
other matter in questions has arisen and in no event shall the demand
for arbitration be made after the date that institution of legal or
equitable proceedings based on such claim, dispute, or other matter
would be barred by the applicable statute of limitations.
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(b) All proceedings involving the parties shall be reported by a certified
shorthand court reporter and written transcripts of the proceedings
shall be prepared and made available to the parties.
(c) A party can require the arbitrator to make specific rulings on specific
items or questions of fact. The arbitrator shall be bound by the
provisions of this Lease, and shall not add to, subtract from or
otherwise modify such provisions.
(d) Final decision by the arbitrator must be provided to the parties within
thirty (30) days from the date on which the matter is submitted to the
arbitrator.
(e) The prevailing party (as defined below) shall be awarded reasonable
attorneys' fees, expert and nonexpert witness costs and expenses
(including without limitation the fees and costs of the court reporter
described in Subsection (c) above), and other costs and expenses
incurred in connection with the arbitration, unless the arbitrator for
good cause determines otherwise.
(f) As used herein, the term "prevailing party" shall mean the party, if
any, that the arbitrator determines is "clearly the prevailing party."
(g) Costs and fees of the arbitrator shall be borne by the nonprevailing
party, unless the arbitrator for good cause determines otherwise. If
there is no prevailing party, the parties shall bear their own fees and
costs and split the fees and costs of the arbitrator and court reporter.
(h) The award or decision of the arbitrator, which may include equitable
relief, shall be final and judgment may be entered on it in accordance
with applicable law in any court having jurisdiction over the matter.
The provisions of this Section 34 are not intended to alter the
applicable provisions of law which provide the grounds on which a court
may vacate an arbitration award.
(i) The provisions of this Section 34 are not intended to require
(1) Landlord to arbitrate any matters relating to any monetary default
by Tenant under this Lease, which matters shall, at the election of
Landlord, be governed by the applicable provisions of this Lease and/or
applicable law, or (2) either party to arbitrate any matters arising
under this Lease which are not described in the first sentence of this
Section 34.
IN WITNESS WHEREOF, the parties have executed this Lease as of the day and year
first above written.
"TENANT" ALLIANCE PHARMACEUTICAL CORP.,
a New York corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------------
Title: Chief Executive Officer
---------------------------------------
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------------
Title: Executive Vice President
---------------------------------------
"LANDLORD" WHAMC REAL ESTATE LIMITED PARTNERSHIP,
a Delaware limited partnership
By: WHAMC Gen-Par, Inc., a Delaware corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
Its: Senior Vice President - Southern
California
-22-
EXHIBIT "A-1"
PROJECT SITE PLAN
AMCC BUILDING - 6175 & ▇▇▇▇ ▇▇▇▇ ▇▇▇▇.
SITE PLAN
[MAP]
EXHIBIT "A-1"
EXHIBIT "A-2"
PROJECT LEGAL DESCRIPTION
THE LAND REFERRED TO HEREIN IS SITUATED IN THE STATE OF CALIFORNIA, COUNTY OF
SAN DIEGO AND IS DESCRIBED AS FOLLOWS:
▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇. ▇, ▇▇ THE CITY OF SAN DIEGO, COUNTY
OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 11561, FILED IN
THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, JULY 9, 1986.
EXHIBIT "B"
DESCRIPTION OF PREMISES
[FLOOR PLATE]
EXHIBIT "B"
Page 1 of 2
[FLOOR PLATE]
EXHIBIT "B"
Page 2 of 2
WORK LETTER AGREEMENT
1. Tenant shall, at Tenant's sole cost and expense, improve the
Premises in accordance with plans and specifications approved in writing by
Landlord and in accordance with the requirements of all Laws. It is
contemplated by the parties that the improvements to the Premises will include
all interior and exterior improvements that are permanently affixed to the
Building (the "TENANT IMPROVEMENTS") as described or depicted on SCHEDULE 1
attached hereto (the "PRELIMINARY PLANS"), which Preliminary Plans are hereby
approved by Landlord and Tenant. As part of the material consideration to
Landlord entering into this Lease, Tenant covenants to expend between Four
Million Dollars ($4,000,000.00) and Six Million Dollars ($6,000,000.00) in the
design and construction of Tenant Improvements in the Premises and to provide
Landlord with evidence reasonably satisfactory to Landlord of such expenditure.
Within thirty (30) days following the Effective Date, Tenant shall provide to
Landlord working drawings for the Tenant's Improvements (including signage)
based upon and conforming with the Preliminary Plans and prepared by a licensed
architect or engineer. Within five (5) days of Landlord's receipt of such
working drawings, Landlord shall notify Tenant of any required changes to the
working drawings. Landlord's failure to so notify Tenant of any such required
changes to the working drawings within said five (5) day period shall be deemed
to constitute Landlord's approval thereof. Tenant shall revise the working
drawings in accordance with Landlord's comments and deliver the same to Landlord
within ten (10) days of Tenant's receipt of Landlord's comments. Tenant shall,
at its sole cost and expense, be responsible for obtaining all permits and
approvals from governmental authorities necessary for the construction of such
improvements and the operation of Tenant's business. Landlord will reasonably
cooperate with Tenant (at no cost to Landlord) in Tenant's efforts to obtain all
such permits and approvals. Landlord makes no representation concerning the
availability of such permits or approvals.
2. No improvement of any kind to the Premises shall be erected
or maintained unless and until the plans, specifications and proposed location
of such improvement have been approved in by Landlord, which approval shall not
be unreasonably withheld or delayed. Tenant shall not be charged for any
supervision by Landlord in connection with Tenant's design and construction of
the Tenant Improvements. Landlord's review and approval of the plans and
specifications for the improvements shall create no liability or responsibility
on the part of Landlord for the completeness of such plans or their design
sufficiency or compliance with Laws.
3. Landlord shall not be responsible for any costs associated
with Tenant's construction of any improvements and Tenant acknowledges that
Tenant is accepting the Premises in its "as-is" and "where-is" state, subject to
Landlord's obligations under Section 11.2 of the Lease.
4. No work of any kind shall be commenced on and no building or
other material shall be delivered until at least five (5) business days after
written notice has been given by Tenant to Landlord of the initial commencement
of such work or the delivery of such materials.
5. The improvements shall be constructed, and all work
performed on the Premises, shall be in accordance with all Laws. All work
performed on the Premises shall be done in a good, workmanlike and lien free
manner and only with new materials of good quality and high standards. All work
required in the construction of the improvements shall be performed only by
competent contractors duly licensed as such under the laws of the State of
California and approved by Landlord. The following contractors/subcontractors,
if used by Tenant, are hereby preapproved by Landlord: (i) DPR; (ii) Biostruct;
(iii) ▇▇▇▇▇▇▇▇; (iv) ▇▇▇▇ Electric; (v) Dynalectric; (vi) Eickler; (vii) Weather
Eng.; (viii) Pacific Rim Eng.; (ix) ▇▇ ▇▇▇▇; and (x) Kinetic Systems. Tenant
will competitively bid the construction with contractors approved by Landlord.
Tenant shall then enter into a construction contract approved by Landlord (which
approval shall not be unreasonably withheld or delayed) with the selected
contractor to construct the Tenant Improvements and Tenant shall be responsible
for all aspects of coordinating the construction management.
6. Notwithstanding anything above to the contrary, Landlord
shall, prior to the Commencement Date, perform the following work in the
Premises ("LANDLORD'S WORK") in Landlord's standard manner using
building-standard materials:
(i) Modify existing HVAC system located in the Other
Building located in the Project to exclusively service the Premises; and
(ii) Install metering and/or submetering devices in the
Premises pertaining to water, gas and electricity services serving the
Premises as of the date of the Lease.
So long as Tenant has not exercised its Cancellation Option and subject to the
terms hereof, Landlord also agrees to retrofit the existing HVAC system located
in the Other Building to accommodate R123 (or equivalent) HVAC coolant
("ADDITIONAL LANDLORD'S WORK") but only to the extent that Tenant notifies
Landlord, on or before the last day of the third (3rd) annual anniversary of the
Commencement Date, that Tenant desires Landlord to perform such Additional
Landlord's Work; provided, however, that prior to performing such Additional
Landlord's Work (and as a condition precedent to Landlord's obligation to
perform such Additional Landlord's Work), Tenant shall pay to Landlord any costs
in excess of Fifty Thousand Dollars ($50,000.00) ("LANDLORD'S COST CAP") that is
required by Landlord to perform such Additional Landlord's Work, which excess
costs shall be (i) evidenced by a contractor's bid selected by Landlord, and
(ii) due and payable by Tenant to Landlord within thirty (30) days after
Landlord's request therefor (and prior to the performance of such Additional
Landlord's Work). In no event will Landlord be obligated to pay for any costs
in excess of Landlord's Cost Cap to cause such Additional Landlord's Work to be
performed, it being the intent of Landlord and Tenant that such excess cost
shall be borne solely by Tenant. In the event that Tenant fails to notify
Landlord on or before the last day of the third annual anniversary of the
Commencement Date that Tenant desires Landlord to perform
EXHIBIT "C"
such Additional Landlord's Work, then Landlord shall have no obligation
whatsoever to perform such Additional Landlord's Work.
C-2
SCHEDULE 1
PRELIMINARY PLANS
1. Those certain plans prepared by McGraw/▇▇▇▇▇▇▇ Architects as Project
No. 97006 and dated October 28, 1997; and
2. Those certain plans prepared by McGraw/▇▇▇▇▇▇▇ Architects as Project
No. 972928 and dated October 30, 1997.
SCHEDULE 1
SAMPLE FORM OF NOTICE OF LEASE TERM DATES
To: Date:
------------------------- ------------------
-------------------------
Re: Lease dated ________________________, 19___ between
___________________________, Landlord, and ___________________________________,
Tenant, concerning premises located at __________________________ ("PREMISES").
Gentlemen:
In accordance with the above-referenced Lease, we wish to advise and/or confirm
as follows:
1. That the Premises have been accepted by Tenant in accordance with the
Lease.
2. That Tenant has accepted and is in possession of the Premises, and
acknowledges that under the provisions of the Lease, the Term of the Lease
expires on ________________ (subject to earlier termination as provided in the
Lease), with one option to renew for 5 years, and commenced upon ______________.
3 That in accordance with the Lease, rental payment has commenced.
4. If the Actual Commencement Date of the Lease is other than the first day
of the month, the first billing will contain a pro rata adjustment. Each
billing thereafter, with the exception of the final billing, shall be for the
full amount of the monthly installment as provided for in the Lease.
5. Monthly Rent is due and payable in advance on the first day of each and
every month during the Term of the Lease. Your rent checks should be made
payable to _________________________ at _______________________________.
AGREED AND ACCEPTED
TENANT: LANDLORD:
------------------------------ ------------------------------
By: By:
-------------------------- --------------------------
By:
--------------------------
SAMPLE ONLY [NOT FOR EXECUTION]
EXHIBIT "D"
ENVIRONMENTAL QUESTIONNAIRE
The purpose of this form is to obtain information regarding the use or proposed
use of hazardous materials at the premises. Prospective tenants should answer
the questions in light of their proposed operations at the premises. Existing
tenants should answer the questions as they relate to ongoing operations at the
premises and should update any information previously submitted. If additional
space is needed to answer the questions, you may attach separate sheets of paper
to this form.
Your cooperation in this matter is appreciated.
1. GENERAL INFORMATION
Name of Responding Company: .
--------------------------------------------
Check the Applicable Status: Prospective Tenant __ Existing Tenant __
Mailing Address:
--------------------------------------------------------
Contact Person and Title:
-----------------------------------------------
Telephone Number: ( )
----- ------------------------
Address of Leased Premises:
---------------------------------------------
Length of Lease Term:
--------------------------------------------------
Describe the proposed operations to take place on the premises,
including principal products manufactured or services to be conducted.
Existing tenants should describe any proposed changes to ongoing
operations.
------------------------------------------------------------------------
------------------------------------------------------------------------
2. STORAGE OF HAZARDOUS MATERIALS
2.1 Will any hazardous materials be used or stored on-site?
Wastes Yes _____ No _____
Chemical Products Yes _____ No _____
2.2 Attach a list of any hazardous materials to be used or stored,
the quantities that will be on-site at any given time, and the
location and method of storage (e.g., 55-gallon drums on concrete
pad).
3. STORAGE TANKS AND SUMPS
3.1 Is any above or below ground storage of gasoline, diesel or other
hazardous substances in tanks or sumps proposed or currently
conducted at the premises?
Yes _____ No _____
If yes, describe the materials to be stored, and the type, size
and construction of the sump or tank. Attach copies of any
permits obtained for the storage of such substances.
-----------------------------------------------------------------
-----------------------------------------------------------------
3.2 Have any of the tanks or sumps been inspected or tested for
leakage?
Yes _____ No _____
If so, attach the results.
3.3 Have any spills or leaks occurred from such tanks or sumps?
Yes _____ No _____
If so, describe.
-----------------------------------------------------------------
-----------------------------------------------------------------
3.4 Were any regulatory agencies notified of the spill or leak?
Yes _____ No _____
If so, attach copies of any spill reports filed, any clearance
letters or other correspondence from regulatory agencies relating
to the spill or leak.
3.5 Have any underground storage tanks or sumps been taken out of
service or removed?
Yes _____ No _____
If yes, attach copies of any closure permits and clearance
obtained from regulatory agencies relating to closure and removal
of such tanks.
EXHIBIT "E"
4. SPILLS
4.1 During the past year, have any spills occurred at the premises?
Yes _____ No _____
If yes, please describe the location of the spill.
-----------------------------------------------------------------
-----------------------------------------------------------------
4.2 Were any agencies notified in connection with such spills?
Yes _____ No _____
If yes, attach copies of any spill reports or other
correspondence with regulatory agencies.
4.3 Were any clean-up actions undertaken in connection with the
spills?
Yes _____ No _____
Attach copies of any clearance letters obtained from any
regulatory agencies involved and the results of any final soil or
groundwater sampling done upon completion of the clean-up work.
5. WASTE MANAGEMENT
5.1 Has your company been issued an EPA Hazardous Waste Generator
I.D. Number?
Yes _____ No _____
5.2 Has your company filed a biennial report as a hazardous waste
generator?
Yes _____ No _____
If so, attach a copy of the most recent report filed.
5.3 Attach a list of the hazardous wastes, if any, generated or to be
generated at the premises, its hazard class and the quantity
generated on a monthly basis.
5.4 Describe the method(s) of disposal for each waste. Indicate
where and how often disposal will take place.
_____ On-site treatment or recovery ____________________
_____ Discharged to sewer ____________________
_____ Transported and disposed of off-site ____________________
_____ Incinerator ____________________
5.5 Indicate the name of the person(s) responsible for maintaining
copies of hazardous waste manifests completed for off-site
shipments of hazardous waste.
-----------------------------------------------------------------
5.6 Is any treatment of processing of hazardous wastes currently
conducted or proposed to be conducted at the premises:
Yes _____ No _____
If yes, please describe any existing or proposed treatment
methods.
-------------------------------------------------------
-----------------------------------------------------------------
5.7 Attach copies of any hazardous waste permits or licenses issued
to your company with respect to its operations at the premises.
6. WASTEWATER TREATMENT/DISCHARGE
6.1 Do you discharge wastewater to:
_____ storm drain? _____ sewer?
_____ surface water? _____ no industrial discharge
6.2 Is your wastewater treated before discharge?
Yes _____ No _____
If yes, describe the type of treatment conducted.
-----------------------------------------------------------------
-----------------------------------------------------------------
6.3 Attach copies of any wastewater discharge permits issued to your
company with respect to its operations at the premises.
E-2
7. AIR DISCHARGES
7.1 Do you have any filtration systems or stacks that discharge into
the air?
Yes _____ No _____
7.2 Do you operate any of the following types of equipment or any
other equipment requiring an air emissions permit?
_____ Spray booth
_____ Dip tank
_____ Drying oven
_____ Incinerator
_____ Other (please describe) _________________________
_____ No equipment requiring air permits
7.3 Are air emissions from your operations monitored?
Yes _____ No _____
If so, indicate the frequency of monitoring and a description of
the monitoring results.
-----------------------------------------------------------------
7.4 Attach copies of any air emissions permits pertaining to your
operations at the premises.
8. HAZARDOUS MATERIALS DISCLOSURES
8.1 Does your company handle hazardous materials in a quantity equal
to or exceeding an aggregate of 500 pounds, 55 gallons, or 200
cubic feet per month?
Yes _____ No _____
8.2 Has your company prepared a hazardous materials management plan
pursuant to any applicable requirements of a local fire
department or governmental agency?
Yes _____ No _____
If so, attach a copy of the business plan.
8.3 Has your company adopted any voluntary environmental, health or
safety program?
Yes _____ No _____
If so, attach a copy of the program. No formal program. We
recycle paper, aluminum cans, and scrap aluminum.
9. ENFORCEMENT ACTIONS, COMPLAINTS
9.1 Has your company ever been subject to any agency enforcement
actions, administrative orders, or consent decrees?
Yes _____ No _____
If so, describe the actions and any continuing compliance
obligations imposed as a result of these actions.
-----------------------------------------------------------------
9.2 Has your company ever received requests for information, notice
or demand letters, or any other inquiries regarding its
operations?
Yes _____ No _____
9.3 Have there ever been, or are there now pending, any lawsuits
against the company regarding any environmental or health and
safety concerns?
Yes _____ No _____
9.4 Has an environmental audit ever been conducted at your company's
current facility?
Yes _____ No _____
If so, identify who conducted the audit and when it was
conducted.
-----------------------------------------------------------------
Company
By:
------------------------
Title:
------------------------
Date:
------------------------
E-3
SAMPLE FORM OF TENANT ESTOPPEL CERTIFICATE
The undersigned ("TENANT") hereby certifies to _________________________________
("LANDLORD"), and ____________________________, as follows:
1. Attached hereto is a true, correct and complete copy of that certain
Lease dated _______________________, 19___ between Landlord and Tenant (the
"LEASE"), which demises Premises which are located at __________________________
___________________________________. The Lease is now in full force and effect
and has not been amended, modified or supplemented, except as set forth in
Section 6 below.
2. The term of the Lease commenced on ________________, 19__ (Office
Building), ________________, 19__ (Manufacturing Building, and ________________,
19__ (Parking Lot).
3. The term of the Lease is currently scheduled to expire on
________________, 19__.
4. Tenant has no option to renew or extend the Term of the Lease except:
________________________________.
5. Tenant has no preferential right to purchase the Premises.
6. The Lease has: (Initial One)
( ) not been amended, modified, supplemented, extended, renewed or assigned.
( ) been amended, modified, supplemented, extended, renewed or assigned by
the following described agreements, copies of which are attached hereto:
__________________________________________________________________.
7. Tenant has accepted and is now in possession of the Premises and has not
sublet, assigned or encumbered the Lease, the Premises or any portion thereof
except as follows: __________________________________.
8. The current Monthly Rent is $______________.
9. The amount of security deposit (if any) is $________________. No other
security deposits have been made.
10. All rental payments payable by Tenant have been paid in full as of the
date hereof. No rent under the Lease has been paid for more than thirty (30)
days in advance of its due date except as follows: ____________________________
________________________________________________________________________.
11. All work required to be performed by Landlord under the Lease has been
completed and has been accepted by Tenant, and all tenant improvement allowances
have been paid in full except as follows: _____________________________________
________________________________________________________________________.
12. To the best of Tenant's knowledge, as of the date hereof, there are no
defaults on the part of Landlord or Tenant under the Lease except as follows:
________________________________________________________________________________
_____________________________________.
13. Tenant has no defense as to its obligations under the Lease and claims
no set-off or counterclaim against Landlord except as follows: ________________
_________________________________________________________.
14. Tenant has no right to any concession (rental or otherwise) or similar
compensation in connection with renting the space it occupies, except as
expressly provided in the Lease except as follows: ____________________________
________________________________________________________________________.
15. All insurance required of Tenant under the Lease has been provided by
Tenant and all premiums have been paid except as follows: _____________________
________________________________________________________________________.
16. There has not been filed by or against Tenant a petition in bankruptcy,
voluntary or otherwise, any assignment for the benefit of creditors, any
petition seeking reorganization or arrangement under the bankruptcy laws of the
United States or any state thereof, or any other action brought pursuant to such
bankruptcy laws with respect to Tenant except as follows: _____________________
___________________________________________________________________________.
17. Tenant pays rent due Landlord under the Lease to Landlord and does not
have any knowledge of any other person who has any right to such rents by
collateral assignment or otherwise except as follows: _________________________
________________________________________________________________________________
_____.
EXHIBIT "F"
The foregoing certification is made with the knowledge that
________________________ is about to [FUND A LOAN TO LANDLORD OR PURCHASE THE
PREMISES FROM LANDLORD], and that ________________________ is relying upon the
representations herein made in [FUNDING SUCH LOAN OR PURCHASING THE PREMISES].
Dated: ________________, 19__.
"TENANT"
-------------------------
By:
---------------------
By:
---------------------
SAMPLE ONLY (NOT FOR EXECUTION)
F-2
SPECIAL IMPROVEMENTS
List of Special Improvements to be provided by Tenant to Landlord within
thirty (30) days after the Commencement Date and from time to time
thereafter, which list shall be subject to Landlord's reasonable
approval.
EXHIBIT "G"