LEASE AGREEMENT (SINGLE TENANT – NNN)
Exhibit 10.1
LEASE AGREEMENT (SINGLE TENANT – NNN)
by and between
Centennial Valley Properties I, LLC “Landlord”
and
Biodesix, Inc.
“Tenant”
TABLE OF CONTENTS
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3 |
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ARTICLE III ACCEPTANCE AND DELIVERY OF PREMISES; SUBDIVISION OF PREMISES |
4 |
5 |
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6 |
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ARTICLE VI TENANT'S RESPONSIBILITY FOR TAXES, OTHER REAL ESTATE CHARGE |
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14 |
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15 |
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17 |
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18 |
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19 |
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19 |
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20 |
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21 |
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ARTICLE XV WAIVER OF LIABILITY; MUTUAL WAIVER OF SUBROGATION |
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24 |
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25 |
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25 |
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27 |
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ARTICLE XX SURRENDER OF PREMISES; OWNERSHIP AND REMOVAL OF TRADE FIXTURES |
28 |
30 |
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33 |
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34 |
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34 |
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36 |
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36 |
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37 |
List of Exhibits |
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Exhibit A |
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Site Plan of the Premises and Building |
Exhibit B |
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Legal Description of the Premises |
Exhibit C |
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[intentionally omitted] |
Exhibit D |
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Depiction of Subdivision Boundaries |
Exhibit E |
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Form of Hazardous Materials Disclosure Certificate |
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Exhibit F |
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Commencement Date Certificate |
Exhibit G |
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Form Memorandum of Lease |
Exhibit H |
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Option to Extend Addendum |
Exhibit I |
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Work Letter |
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LEASE AGREEMENT (SINGLE TENANT – NNN)
This Lease Agreement (Single Tenant – NNN) (“Lease”) is entered into as of 3/11/2022, (the “Effective Date”), by and between Landlord and Tenant as defined in Article I below
ARTICLE I
BASIC PROVISIONS AND CERTAIN DEFINITIONS
1.1 Definitions. The following list sets out certain defined terms and certain financial and other information pertaining to this Lease:
c/o Koelbel and Company ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Attn:
and
c/o Koelbel and Company ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Attn:
With a copy to:
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, LLP ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Attn:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Legal Affairs
Exhibit B.
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For purposes of determining the Commencement Date, to “conduct business” means to conduct revenue generating business, rather than activities in preparation for revenue generating business, such as verification and validation of equipment.
Period |
Annualized Base Rent Rate per square foot of Building |
Base Rent/Year |
Base Rent/Month |
1-12 |
*$34.00 |
$2,719,320.00 |
$226,610.00 |
13-24 |
⸶$34.00 |
$2,719,320.00 |
$226,610.00 |
25-36 |
$35.02 |
$2,800,899.60 |
$233,408.30 |
37-48 |
$36.07 |
$2,884,878.60 |
$240,406.55 |
49-60 |
$37.15 |
$2,971,257.00 |
$247,604.75 |
61-72 |
$38.27 |
$3,060,834.60 |
$255,069.55 |
73-84 |
$39.42 |
$3,152,811.60 |
$262,734.30 |
85-96 |
$40.60 |
$3,247,188.00 |
$270,599.00 |
97-108 |
$41.82 |
$3,344,763.60 |
$278,730.30 |
109-120 |
$43.07 |
$3,444,738.60 |
$287,061.55 |
121-132 |
$44.36 |
$3,547,912.80 |
$295,659.40 |
133-144 |
$45.69 |
$3,654,286.20 |
$304,523.85 |
* Subject to Abated Rent pursuant to Section 8.7(a).
⸶ Subject to Partial Abated Rent pursuant to Section 8.7(b).
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1.2 Address for Rent Payments: All amounts payable by Tenant to Landlord shall, until further notice from Landlord, be paid to Landlord by ACH or Wire Transfer pursuant to the following instructions:
[information has been omitted]
1.3 Net Lease. 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 and Tenant shall pay either directly or as reimbursement to Landlord for all costs, expenses and obligations of every kind or nature whatsoever relating to the Premises which may arise or become due during the Term of this Lease including, without limitation, all costs and expenses of operation, maintenance and repairs, utilities, insurance and taxes relating to the Premises.
ARTICLE II
GRANTING CLAUSE
2.1 Grant and Acceptance. Landlord leases the Premises to Tenant and Tenant accepts the Premises from Landlord for the Lease Term, upon and subject to the terms and conditions set forth in this Lease.
2.2 Title Matters; REA. Landlord and Tenant acknowledge and agree the Premises and this Lease are subject to the Permitted Encumbrances, and Tenant (for itself, and any permitted assignee or subtenant) hereby covenants and agrees not to violate any provision of the Permitted Encumbrances including the REA.
2.3 Quiet Enjoyment. Upon payment by Tenant of the Rents herein provided, and upon the observance and performance of all terms, provisions, covenants and conditions on Tenant's part to be observed and performed, Tenant shall, subject to all of the terms, provisions, covenants and conditions of this Lease and the Permitted Exceptions, peaceably and quietly hold and enjoy the Premises for the entire Lease Term without hindrance or molestation from all persons claiming by, through or under Landlord.
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2.4 Financing Contingency. Landlord’s obligations under this Lease are expressly contingent upon Landlord obtaining financing for the Premises, Landlord’s obligations for the Landlord Work and the Allowance on such terms as Landlord deems acceptable in its sole discretion (“Landlord’s Financing Contingency”). If, for any reason, Landlord’s Financing Contingency is not satisfied or waived on or before the April 1, 2022 (the “Landlord Financing Deadline”), Landlord may elect to terminate this Lease upon written notice to Tenant delivered on or before the date that is five (5) business days after the Landlord Financing Deadline in which event the Security Deposit or the Letter of Credit, as applicable, shall be returned to Tenant and each party shall be relieved of all further obligations and liabilities under this Lease other than any indemnification obligations and Tenant’s obligation to surrender the Premises as provided for under this Lease. Landlord may waive the Landlord’s Financing Continency prior to the Landlord Financing Deadline only upon written notice to Tenant.
ARTICLE III
ACCEPTANCE AND DELIVERY OF PREMISES; SUBDIVISION OF PREMISES
3.1 Acceptance of Premises. Except for Landlord's express assumption of construction obligations for the Landlord Work under the Work Letter attached as Exhibit I to this Lease, or as otherwise provided for under this Lease, the Premises are leased “AS IS,” with Tenant accepting all defects, if any; and Landlord makes no warranty of any kind, express or implied, with respect to the Premises (without limitation, Landlord makes no warranty as to the habitability, fitness or suitability of the Premises for a particular purpose, nor as to compliance with any laws, rules or regulations). Notwithstanding the foregoing, Landlord represents and warrants that, to Landlord’s actual knowledge, as of the Effective Date, the Premises does not contain any asbestos containing materials or Hazardous Materials in excess of amounts permitted under Environmental Laws. This Section 3.1 is subject to any contrary requirements under Applicable Laws; however, in this regard, Tenant acknowledges that it has been given the opportunity to inspect the Premises and to have qualified experts inspect the Premises prior to the execution of this Lease.
3.2 Delivery; Construction Period. Landlord shall deliver the Premises to Tenant on or before the date that is three (3) business days after the Effective Date and the date of Landlord’s delivery shall be the “Delivery Date.” Tenant may enter and occupy the Premises from and after the Delivery Date even though the Delivery Date is prior to the Commencement Date (“Construction Period”) solely for the purpose of performing Tenant Work (as defined in the Work Letter) and any tests, inspections, and investigations in connection therewith, and to commence preparing the Premises for its operations. Tenant agrees (a) any such early entry into the Premises by Tenant shall be at Tenant’s sole risk, (b) Tenant shall not unreasonably interfere with Landlord or Landlord’s agents in the performance and completion of the Landlord Work (as defined in the Work Letter), (c) Tenant shall comply with and be bound by all provisions of this Lease during the period of any such early entry except (i) for the payment of Base Rent and Pass-Through Costs and the costs for electricity and water to the Premises, (ii) for carrying property insurance as set forth in Section 14.214.2(b), provided that Tenant’s property insurance requirements otherwise being satisfied by its Contractor in accordance with insurance standards required under the Work Letter and (iii) for carrying business interruption service as set forth in Section 11.2(b), (d) prior to entry upon the Premises by Tenant, Tenant shall pay for and provide to Landlord certificates evidencing the existence and amounts of liability insurance carried by Tenant, which coverage must comply with the provisions of this Lease relating to insurance, and (e) Tenant shall, and shall require Tenant’s Construction Agents (as defined in the Work Letter) to, comply with the Work Letter and all Laws required to perform its work during the early entry on the Premises.
3.3 Remeasurement of Premises. Notwithstanding the Rentable Area set forth in Section 1.1(h) above, Tenant is entitled to verify the area of the Building and establish a modified Rentable Area pursuant to the terms of this Section 3.3. Tenant’s option to remeasure the Building is subject to (a) such remeasurement being performed and certified by a licensed architect using the BOMA 2017 (ANSI Z65.1-2017) standard; and (b) delivery of a copy of the certified measurement to Landlord on or before the date that is sixty (60) days following the Effective Date. If the certified remeasurement is different from the Rentable Area set forth above, the parties shall enter into an amendment modifying the Lease to reflect the new Rentable Area and adjusting the Base Rent and the Allowance. Landlord agrees that notwithstanding the methodology of measurement cited above, the mezzanine space existing as of the Effective Date shall not be included in Tenant’s remeasurement.
3.4 Subdivision of Premises. As of the Effective Date, the Land is a single subdivided parcel and tax
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parcel. Landlord reserves the right, from time to time, to subdivide the Land and create one or more separate legal and tax parcels generally in the area depicted on Exhibit D attached hereto (each, a “Subdivision”) without Tenant’s consent; provided, however, that such Subdivision (a) shall not materially and adversely impact Tenant’s Permitted Use; (b) shall not adversely impact access to Tenant’s loading docks by delivery trucks, (c) shall not result in a parking ratio of less than 2.5 spaces per 1,000 square feet of Rentable Area; and (d) shall otherwise be in compliance with the terms and conditions of this Section 3.4 Upon Landlord’s election to affect a Subdivision the area of the Land comprising the Premises shall be deemed reduced to exclude the area or areas so subdivided. For each Subdivision, if any, Tenant agrees to execute an amendment to this Lease so reducing the area of the Land. In the event of a Subdivision, from and after the date of such Subdivision: (i) any Pass-Through Costs attributable to the subdivided area or areas shall be excluded from Tenant’s Pass-Through Costs; (ii) any Pass-Through Costs attributable to the Premises and one or more subdivided areas shall be allocated between the Premises and such other areas in proportion to the relative area of the Premises and such subdivided areas as relates to the area of the Land; (iii) the Premises and any such subdivided parcels shall be considered part of the “Center” in which case, the term Center as used in this Lease shall apply and (iv) Landlord shall be entitled to designate portions of the Center, from time to time, for use in common by, inter alia, Landlord, Tenant and any other occupants of the Center and such other parties as provided for under the REA.
ARTICLE IV
PERMITTED USE
4.1 Permitted Use of Premises. The Premises shall be used only for contemporary office, light assembly, distribution, laboratory research and laboratory testing lab use including, but not limited to:, laboratory machines, fume hoods, associated laboratory support, light assembly and distribution equipment, offices, open furniture systems, meeting space, computer and communications network room, collaborative open environments, food and beverage areas with minimal food preparation, catering preparation and layout consistent with the Environmental Questionnaire (as defined in Section 5.1(a) below) and for such other lawful purposes as are incidental thereto and subject to all other provisions hereof. Tenant covenants and warrants that Tenant will not operate a Vivarium at the Premises. Tenant acknowledges that the specification of a “permitted use” means only that Landlord has no objection to the specified use and does not include any representation or warranty by Landlord as to whether or not such specified use complies with Applicable Laws and/or requires special governmental permits. Use of the Premises shall be subject to such rules, regulations and restrictions which Landlord may make from time to time; provided such rules and regulations do not materially increase Tenant’s obligations or materially decrease Tenant’s rights under the Lease is and provided further that Tenant has received a written copy of all such rules and regulations and no less than sixty (60) days to comply with such new or modified Rules and Regulations (collectively, “Rules and Regulations”).
4.2 Prohibited Uses. Tenant further covenants and agrees that Tenant shall not use, or suffer or permit any person or persons to use, the Premises or any part thereof for any use or purpose in violation of Applicable Laws. Tenant shall not do or permit anything to be done in or about the Premises from and after the Delivery Date which will in any way (a) damage the reputation of the Premises or, if applicable, the Center (provided, however, the use of the Premises for the Permitted Use shall not be deemed in and of itself to damage such reputation), (b) impair, interfere with or otherwise diminish the use of any of the Premises or, if applicable, the Center, (c) obstruct or interfere with the rights of other tenants or occupants of the Center, if applicable, (d) use or allow the Premises to be used for any improper, unlawful or objectionable purpose, (e) void Tenant's or Landlord's insurance, increase the cost of insurance or cause the disallowance of sprinkler credits, provided that if Tenant causes any increase in the cost of Landlord’s insurance, then Tenant shall pay to Landlord the amount of such increase as Additional Rent, or (f) cause or permit the storage of trucks, trailers boats, recreational vehicles or storage containers in the parking area of the Premises other than those owned or used by Tenant for standard business operations which may include up to five (5) vans owned and operated by Tenant and trailer trucks located in or adjacent to the Building’s loading docks.
4.3 Care of Premises by Tenant. Tenant shall take good care of the Premises and shall operate in the Premises in a safe, careful and proper manner; shall not commit or suffer waste in or about the Premises, nor to any facility or equipment for which Tenant is responsible pursuant to Section 9.2 of this Lease; shall not cause damage or permit any trucks or vehicles visiting the Premises to cause any damage to the Premises or the Building
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(and, if any such damage should occur, which shall not include normal wear and tear to the roads or parking lots, shall immediately repair same or, if Landlord so elects, reimburse Landlord for Landlord's reasonable cost in repairing same); and shall keep the Premises free of insects, rodents, vermin and other pests. Tenant shall keep the Premises secure, Tenant hereby acknowledging that security is Tenant's responsibility, and that Tenant is not relying on any representation or warranty by Landlord in this regard. Tenant shall not overload the floors in the Premises, nor deface or injure the Premises. Tenant shall store all trash and garbage within the Premises, or in a trash dumpster or similar container approved by Landlord in Landlord's reasonable discretion; and Tenant shall arrange for the regular pick-up of such trash and garbage at Tenant's expense. Receiving and delivery of goods and merchandise and removal of garbage and trash shall be made only in the manner and areas prescribed by Landlord. Outside storage, including, without limitation, storage of containers, trailers, trucks and other vehicles (except as permitted in Section 4.2 above), is prohibited without Landlord's prior written consent which may be withheld in Landlord's sole and absolute discretion. Tenant shall be responsible for janitorial services within the Building.
ARTICLE V
HAZARDOUS MATERIALS
5.1 Tenant’s Obligations.
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7
8
9
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5.2 Chemical Safety Program.
5.3 Biohazard and Hazardous Waste Removal. Tenant shall be responsible, at its sole cost and expense, for Hazardous Material and other biohazard disposal services for the Premises. Such services shall be performed on a sufficient basis to ensure that the Premises are at all times kept neat, clean and free of Hazardous Materials and biohazards except in appropriate, specially marked containers. In addition, if any Applicable Laws or the trash removal company requires that any substances be disposed of separately from ordinary trash, Tenant shall make arrangements at Tenant’s expense for such disposal directly with a qualified and licensed disposal company at a lawful disposal site.
5.4 Landlord’s Obligations. Within sixty (60) days after the Effective Date, Landlord will deliver to Tenant a Phase I Environmental Site Assessment (“Phase I”) with respect to the Land. Such Phase one shall have been completed no earlier than six (6) months prior to the Effective Date. Tenant shall have no responsibility for the remediation of (i) any Hazardous Materials existing on the Land prior to the Delivery Date, or (ii) any Hazardous Materials brought onto the Land during the Lease Term by Landlord or any third party, the remediation of which shall be the responsibility of Landlord.
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ARTICLE VI
TENANT'S RESPONSIBILITY FOR TAXES,
OTHER REAL ESTATE CHARGES, INSURANCE EXPENSES AND OPERATING EXPENSES
6.1 Personal Property. Tenant shall be liable for all taxes levied against personal property and trade fixtures placed by Tenant in the Premises. If any such taxes are levied against Landlord or Landlord's property and if Landlord elects to pay the same or if the assessed value of Landlord's property is increased by inclusion of personal property and trade fixtures placed by Tenant in the Premises and Landlord elects to pay the taxes based on such increase, Tenant shall pay to Landlord upon demand that part of such taxes for which Tenant is liable under this Section 6.1.
6.2 Real Estate Charges; Insurance Expenses and Operating Expenses. Tenant shall also be liable for all Real Estate Charges (as defined below) and Insurance Expenses (as defined below) and Operating Expenses (as defined below) related to the Premises or Landlord's ownership of the Premises. All payments for which Tenant is liable pursuant to this Section 6.2 shall be considered for all purposes to be Additional Rent (as defined in Section 8.1 below) under this Lease and shall be payable as provided for under Article VIII.
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6.3 Separate Tax Assessments. To the extent the Premises constitute a separate tax parcel, Landlord may require Tenant to pay Real Estate Charges directly to the tax assessor, and if Landlord imposes such requirement, Tenant agrees to pay such assessment before it becomes delinquent and to keep the Premises free from any lien or attachment; moreover, as to all periods of time during the Lease Term, this covenant of Tenant shall survive the termination of this Lease.
6.4 Right to Contest. Tenant shall have the right to contest or review by legal proceedings, as permitted under Applicable Laws, taxes levied against the Premises (other than taxes levied directly against Tenant's personal property within the Premises); provided that, unless Tenant has paid such tax or assessment under protest, Tenant shall furnish to Landlord (i) proof reasonably satisfactory to Landlord that such protest or contest may be maintained without payment under protest, and (ii) a surety bond or other security reasonably satisfactory to Landlord securing the payment of such contested item or items and all interest, penalty, and cost in connection therewith upon the final determination of such contest or review. Landlord shall, if it determines it is reasonable to
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do so, and if so requested by Tenant, join in any proceeding for contest or review of such taxes or assessments, but the entire cost of such joinder in the proceedings (including all costs, expenses, and attorneys’ fees reasonably sustained by Landlord in connection therewith) shall be borne by Tenant. Any amount already paid by Tenant and subsequently recovered as the result of such contest or review shall be for the account of Tenant.
ARTICLE VII
PARKING; GENERATOR; OTHER AREAS
7.1 Parking. During the Lease Term, Tenant shall be entitled to use all parking spaces on the Premises. Tenant's parking rights are the personal rights of Tenant and its employees and visitors, and Tenant shall not transfer, assign or otherwise convey its parking rights separate and apart from this Lease. Landlord shall not be responsible for enforcing Tenant's parking rights against any third parties.
7.2 Back-Up Generator.
7.3 Solar Panels. Subject to the terms and conditions of this Section 7.2 and the REA, Landlord grants to Tenant the exclusive right, for the Lease Term, to install, operate, maintain and repair solar electrical panels on the roof of the Building. If Tenant elects to install Solar Panels, the panels and related infrastructure shall be subject
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to all terms and conditions applicable to Tenant’s Generator under this Lease. Notwithstanding the foregoing, Landlord shall not be entitled to require Tenant to remove such solar panels at the end of the Lease Term or earlier termination unless such solar panels are owned by a third party and Landlord has not agreed, in its sole discretion, to assume the lease or other use agreement with such third-party with respect to the solar panels.
7.4 Other Areas. Landlord shall have the exclusive rights to use, possess, lease, convey interests in, alter, transfer, construct on, or otherwise manage the portions of the Premises other than the Building and the parking areas provided the same does not materially and unreasonably interfere with Tenant's use of the Premises for the Permitted Use.
ARTICLE VIII
RENT
8.1 Rent. For purposes of this Lease, the terms “Rent,” “Rents,” “Rental” or “Rentals” shall be deemed to include Base Rent, Tenant's required payments for Real Estate Charges and Insurance Expenses, Operating Expenses and any other Additional Rent. Landlord and Tenant agree that each provision of this Lease for determining Rent adequately and sufficiently describes to Tenant the method by which such Rent is to be computed. Any and all other sums of money or charges to be paid by Tenant pursuant to the provisions of this Lease other than Base Rent are hereby designated as and included in the term “Additional Rent.” A failure to pay Additional Rent shall be treated in all events as a failure to pay Rent.
8.2 Payment of Rent. Rent shall accrue from the Commencement Date and shall be payable to Landlord at Landlord's address specified in Section 1.2 of this Lease, or at any other address which Landlord may subsequently designate in a written notice to Tenant.
8.3 Base Rent. Subject to Abated Rent and Partial Abated Rent, Tenant shall pay to Landlord Base Rent in monthly installments in the amount(s) specified in Section 1.1(m) of this Lease. Installments shall be due and payable on or before the first day of each calendar month during the Lease Term.
8.4 Pass-Through Costs.
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8.5 Survival of Pass-Through Costs. Tenant's obligation with respect to the Pass-Through Costs shall survive the expiration or early termination of this Lease and Landlord shall have the right to retain the Security Deposit (if any), or so much thereof as is necessary, to secure payment of the actual Pass-Through Costs for the portion of the final calendar year of the Lease Term during which Tenant was obligated to pay such expenses, with any portion of the Security Deposit due back to Tenant to be paid to Tenant within one hundred eighty (180) days after the final assessment of the Pass-Through Costs. If Tenant occupies the Premises for less than a full calendar year during the first or last calendar years of the Lease Term, the Pass-Through Costs for such partial year shall be calculated by proportionately reducing the Pass-Through Costs to reflect the number of months in such year during which Tenant occupied the Premises. Tenant shall pay the Pass-Through Costs within thirty (30) days following receipt of notice thereof.
8.6 Due Dates for Rent; Late Charge. The parties agree that each monthly installment of Base Rent and, unless otherwise elected by Landlord, Tenant's monthly payments for the Pass-Through Costs are payable on or before the first day of each calendar month. Any such payment of Rent which is not received on or before the first day of a particular calendar month shall be deemed past-due. The parties further agree that each annual adjustment payment from Tenant (such as the payments prescribed in Article VI and Section 8.3) is payable within thirty (30) days after receipt of Landlord's written statement requesting such payment from Tenant; and any such prescribed payment which is not so received shall be deemed past-due. All Rent shall be due and payable in advance, without demand, offset or deduction of any nature. In the event any Rent which is payable pursuant to this Lease is not actually received by Landlord within five (5) business days after notice from Landlord to Tenant that such payment is delinquent Tenant shall pay to Landlord a late charge in an amount equal to five percent (5%) of the past due Rent. Any such late charge shall be payable as Additional Rent under this Lease and shall be payable immediately upon written demand. .
8.7 Rent Abatement.
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ARTICLE IX
MAINTENANCE AND REPAIR OF PREMISES
9.1 Maintenance by Landlord. Except to the extent that (i) latent defects in the Premises (excluding defects related to the Tenant Work and excluding wear and tear) are discovered by Tenant and reported in writing to Landlord within the first thirty-six (36) months following the Commencement Date that were not capable of being identified prior to the Commencement Date, (ii) latent defects in the Premises (excluding defects related to the Tenant Work and excluding wear and tear) are discovered at any time during the Lease Term which materially and adversely impact Tenant’s business operations or materially and adversely impact safety at the Premises, Landlord shall have no obligation whatsoever to maintain or repair the Building or any portion thereof throughout the Term of this Lease. Tenant waives the right to make repairs at Landlord's expense under any Applicable Laws except as specifically provided for under Section 21.9 below. Landlord shall keep all portions of the Premises excluding the Building in good, clean and habitable condition and in accordance with the requirements set forth in this Lease and shall make all needed repairs and replacements, to the portions of the Premises excluding the Building, including all parking areas, landscaping and landscaping equipment and exterior lighting and irrigation, subject to reimbursement through Operating Expenses.
9.2 Maintenance by Tenant. Tenant shall keep all portions of the Building in good, clean and habitable condition and in accordance with the requirements set forth in this Lease and shall at its sole cost and expense make all needed repairs and replacements to the Premises but specifically excluding those items Landlord has agreed to maintain under this Lease. Without limiting the coverage of the previous sentence, it is understood that Tenant's responsibilities therein include maintenance, repair and replacement of all of the following facilities and equipment, to the extent located within or upon the Premises: the non-structural elements of the Building including the roof membrane and all exterior walls and plate glass; all windows, doors and other exterior openings; dock bumpers, dock plates or levelers; office entries or store fronts; window and door frames, closure devices, locks and hardware; lighting, heating, air-conditioning, plumbing and other electrical, mechanical and electromotive equipment and fixtures; signs, placards and other advertising media of any type; and exterior and interior painting and other treatment of interior walls, all exterior areas of the Premises including, but not limited to, roof leaks resulting from any cause including, without limitation, from Tenant's installation, replacement or maintenance of air-conditioning equipment or any other roof penetration or placement); all lighting, heat air-conditioning and ventilation equipment, fire-protection and sprinkler systems, plumbing, exhaust systems, and other electrical, mechanical and electromotive installations, equipment and fixtures. In addition, Tenant's responsibilities shall also include all repairs of all ducts, conduits, pipes and wiring, and any sewer stoppage located in, under and above the Premises, regardless of when or how the defect or other cause for repair or replacement occurred or became apparent. If any repairs required to be made by Tenant hereunder are not made within thirty (30) days after written notice delivered to Tenant by Landlord (or less time, in the case of a situation which by its nature requires an immediate response or a response within less time), Landlord may at its option make such repairs without liability to Tenant for any loss or damage which may result to its stock or business by reason of such repairs. Promptly following completion of any work undertaken by Landlord pursuant to the terms of this Section 9.2, Landlord shall deliver a detailed invoice of the work completed, the materials used, and the costs relating thereto. Tenant shall reimburse Tenant for the reasonable out-of-pocket costs of such cure within thirty (30) days after receipt of such invoice and other supporting documentation as Additional Rent hereunder.
9.3 HVAC Maintenance; Roof Maintenance. Without limiting Tenant’s obligations under this Article IX, Tenant shall be responsible for the cost of performing adequate monthly preventive maintenance on the hot water, heating, ventilation and air-conditioning equipment (“HVAC”) for the Premises pursuant to maintenance
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service contracts entered into by Tenant with a licensed or qualified HVAC contractor reasonably approved by Landlord in advance (the “HVAC Contractor”) and a scope of services reasonably approved by Landlord. Executed copies of such service contracts must be delivered to Landlord within thirty (30) days after the Delivery Date. Without limiting the generality of the immediately preceding sentence, the following maintenance shall be performed at Tenant's expense: (a) the replacement of all filters in the HVAC system at least quarterly; (b) inspection of the entire heating, ventilation and air-conditioning equipment by the HVAC Contractor at least quarterly; and (c) cleaning and inspection of valves, belts, and safety controls by the HVAC Contractor at least quarterly.
ARTICLE X
ALTERATIONS
10.1 Tenant's Alterations. Tenant shall not make any alterations, additions or improvements to the Premises other than the Tenant Work (“Alterations”) in excess of $50,000.00 at any one time or of a structural nature without the prior written consent of Landlord, which shall not be unreasonably withheld, conditioned or delayed. Whenever Tenant proposes to make any Alterations within the Premises, Tenant shall first furnish to Landlord plans and specifications in such detail as Landlord may request covering all such work, together with an identification of the contractor(s) whom Tenant plans to employ for the work. All such work shall be completed promptly, in a good and workmanlike manner and using only good grades of materials. Landlord may, at its election, monitor or engage a third party to monitor such work. Tenant shall reimburse Landlord for all reasonable documented out-of-pocket expenses incurred by Landlord (including, without limitation, any construction management or similar fees and related costs payable by Landlord to a third party engaged by Landlord to monitor such work) in connection with Landlord's review of Tenant's plans and other submissions as requested by Landlord and for monitoring such construction in connection with Alterations, provided that such costs shall not exceed $2,500.00 for each Alteration. Notwithstanding the rights accorded to Landlord pursuant to the immediately preceding sentences, Tenant acknowledges and agrees that Landlord's permission for Tenant to commence construction or monitoring of such work shall in no way constitute any representation or warranty by Landlord as to the adequacy or sufficiency of such plans and specifications, the improvements to which they relate, the capabilities of such contractors or the compliance of any such work with any Applicable Laws, codes or other requirements; instead, any such permission or monitoring shall merely be the consent of Landlord as required hereunder. Without limiting the generality of the preceding sentences in this Section 10.1, Tenant acknowledges and agrees that any installation or replacement of Tenant's HVAC equipment must be subject to such preceding sentences and must be effected in accordance with Landlord's reasonable instructions regarding same.
10.2 Quality of Work by Tenant. All Alterations made by Tenant within the Premises shall be performed in a good and workmanlike manner, lien-free and in compliance with all governmental, legal, and insurance requirements. Without limiting the generality of the foregoing, Tenant agrees to indemnify Landlord and hold Landlord harmless against any loss, liability or damage resulting from such Alterations, and Tenant shall, if requested by Landlord, furnish a bond or other security reasonably satisfactory to Landlord against any such loss, liability or damage.
10.3 Lien Waivers; Insurance; Plans. In the event Tenant uses a general contractor or other third party to perform Alterations within the Premises, Tenant shall, prior to the commencement of such work, require said general contractor or other third party to execute and deliver to Landlord a waiver and release of any and all claims against Landlord and liens against the Building and the Premises to which such contractor or other third party might at any time be entitled to assert a mechanic's lien claim in accordance with applicable law. The delivery of the applicable waiver and release of lien shall be a condition precedent to Tenant's ability to enter on and begin its Alterations at the Premises and if applicable, to any reimbursement from Landlord for such Alterations. Upon completion of the Alterations, Tenant shall deliver to Landlord final lien waivers from all contractors and suppliers. Landlord may post at the Premises such notices of non-responsibility as may be provided for under applicable law. With respect to the Tenant Work, Tenant shall provide to Landlord certificates of insurance for workers' compensation and other coverage as required under the Work Letter or in such amounts as Landlord may reasonably require to protect Landlord from liability for personal injury and property damage in connection with the Tenant Work. Tenant shall provide Landlord with as-built plans and specifications for all Alterations performed by Tenant.
10.4 Removal of Alterations. Landlord may impose, as a condition of its consent to any and all Alterations to the Premises or about the Premises, such requirements as Landlord in its reasonable discretion may
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deem desirable, including, but not limited to, the requirement that upon Landlord’s request, Tenant shall, at Tenant’s expense, remove such Alterations upon the expiration or any early termination of the Lease Term. If Tenant does not agree with Landlord’s requirements, including any requirement to remove the Alterations, then Tenant shall have the right to modify or withdraw its request to make such Alterations.
10.5 Trade Fixtures. Tenant may, without Landlord's consent, at Tenant's sole cost, and in compliance with all Applicable Laws and codes, install equipment, racking and other trade fixtures in the ordinary course of its business, so long as such trade fixtures do not alter, overload or damage the Building and may be removed without causing any material damage to the Building. At the end of the Lease Term all such trade fixtures shall be removed at Tenant's cost and the Premises restored to its original condition at Tenant's expense, ordinary wear and tear excepted.
ARTICLE XI
LANDLORD'S RIGHT OF ACCESS
11.1 Right of Entry. Landlord shall have the right to enter upon the Premises upon at least twenty-four
(24) hours' notice (unless in the event of an emergency, in which case prior notice is not required) for the purpose of inspecting the same, or of making repairs to the Premises, or of showing the Premises to prospective purchasers, lenders, (or tenants, within the last twelve (12) months of the Lease Term only) all without being deemed guilty of or liable for any breach of any covenant of quiet enjoyment or eviction of Tenant and without abatement of Rent. This Section 11.1, however, shall not be deemed to impose any obligation upon Landlord to enter the Premises, except if and to the extent that any such obligation may be specifically required pursuant to another express provision of this Lease. Tenant shall reasonably cooperate with Landlord in connection with any and all showings of the Premises to prospective tenants during the last twelve (12) months of the Lease Term. Provided such actions are consistent with applicable law, any entry 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. Notwithstanding anything to the contrary, Landlord acknowledges that all individuals accessing the Premises must comply with Tenant’s security policies for visitors, including but not limited to Tenant’s COVID protocols.
ARTICLE XII
SIGNS; EXTERIOR OF PREMISES
12.1 Signs.
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12.2 Exterior. Tenant shall not, without Landlord's prior written consent, which consent may be withheld in Landlord's sole and absolute discretion, (a) make any changes to the exterior of the Building or (b) except for the Exterior Signage, (i) install any exterior lighting, decorations, banners, placards, balloons, flags, awnings, canopies or the like or (ii) erect or install any signs, lettering, decorations or advertising media of any type which can be viewed from the exterior of the Building. All signs, lettering, placards, decorations and advertising media shall conform in all respects to any rules and regulations established under the Permitted Exceptions as well as all Applicable Laws, codes and regulations and any covenants affecting the Premises or the Building and shall be subject to Landlord's reasonable requirements as to construction, method of attachment, size, shape, height, lighting, color and general appearance. Any signs, window treatment, bars or other installations visible from outside the Building shall be removed by Tenant at the end of the Lease Term, at Tenant's sole cost, and Tenant shall restore the Premises to its original condition, ordinary wear and tear excepted.
ARTICLE XIII
UTILITIES
13.1 Service to Premises. From and after the Delivery Date, Tenant shall contract with all utility providers to arrange service to the Premises and shall provide to such utility providers access to the electric lines, feeders, risers, wiring and any other facilities within or servicing the Premises. Tenant shall promptly pay all charges and maintenance costs for electricity, water, gas (but only if provided by Landlord), telephone service, sewerage service, sprinkler service and other utilities or services furnished to the Premises plus all applicable deposits, surcharges, taxes, penalties or other costs related to such services. Tenant acknowledges and agrees that (a) the electrical power for lighting the parking areas within the Premises and illuminated signage within the Premises (but excluding such lighting and signage attached to the Building) will be powered by electricity from the Building’s electrical service and paid for by Tenant; and (b) water for irrigation landscaping within the Premises will be provided through the water service to the Premises paid for by Tenant.
13.2 Interruption of Service. Landlord shall not be liable for any interruption whatsoever in utility services, whether or not furnished by Landlord, for any reason, including, without limitation, due to fire, accident,
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strike, acts of God or other causes beyond the control of Landlord or which are necessary or useful in connection with making any alterations, repairs or improvements. None of such interruptions shall constitute an actual or constructive eviction, in whole or in part, nor shall any such interruption entitle Tenant to any abatement or diminution of Rent. Without limiting the generality of the foregoing, Landlord shall in no way be liable or responsible for any loss, damage, or expense that Tenant may sustain or incur by reason of any failure, interference, disruption, or defect in the supply or character of the electric energy furnished to the Premises, or if the quantity or character of the electric energy supplied by any utility or service provider is no longer available or suitable for Tenant's requirement, and no such failure, defect, unavailability or unsuitability shall constitute an actual or constructive eviction, in whole or in part, or entitle Tenant to any abatement or diminution of Rent. Notwithstanding the foregoing, if such service interruption is the result of alterations made to the Land by Landlord or otherwise caused by the gross negligence or willful misconduct of Landlord and if such interruption renders the Premises unusable for Tenant’s operations and if Landlord fails to cure such interruption within three (3) business days after notice from Tenant, then Tenant may ▇▇▇▇▇ Base Rent payable under this Lease on a per diem basis until the date Landlord cures such interruption of services.
ARTICLE XIV
INSURANCE COVERAGES
14.1 Insurance by Landlord. Landlord shall procure and maintain throughout the Lease Term, at a minimum, a policy or policies of insurance, at its sole cost and expense (but subject to Article VI above) (a) property insurance on the Premises (exclusive of foundations) including the Tenant Work but excluding Tenant’s Property and any Alterations in an amount equal to the full replacement value of such property covering fire, vandalism, malicious mischief, extended coverage and so-called “special form” or special cause of loss property insurance; and (b) commercial general liability insurance against claims of bodily injury, personal injury and property damage arising out of Landlord’s operation of the Premises in such amount as a prudent owner of similar property would carry or as otherwise required by any Superior Rights Holder. The foregoing insurance may be maintained in the form of a blanket policy covering the Building as well as other properties owned by Landlord and Landlord’s affiliates.
14.2 Insurance by Tenant. Tenant shall maintain the following coverages in the following amounts. Landlord makes no representation or warranty to Tenant that the amount of insurance required to be carried by Tenant under the terms of this Lease is adequate to fully protect Tenant’s interests. Tenant is encouraged to evaluate its insurance needs and obtain whatever additional types or amounts of insurance that it may deem desirable or appropriate.
Bodily Injury and |
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$5,000,000 each occurrence |
Property Damage Liability |
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$5,000,000 annual aggregate |
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Personal Injury Liability |
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$5,000,000 each occurrence |
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$5,000,000 annual aggregate |
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0% Insured's participation |
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$1,000,000 per accident limit for bodily injury and property damage;
If the operations of Tenant should change in a material manner from those conducted on the Commencement Date and in the opinion of Landlord or Landlord's insurance advisor, the amount or scope of such coverage is reasonably deemed inadequate at any time during the Lease Term, Tenant shall increase such coverage to such reasonable amounts or scope as Landlord or Landlord's advisor deems adequate. All insurance procured and maintained by Tenant shall be written by insurance companies satisfactory to Landlord which are licensed to do business in the state in which the Premises is located with a general policyholder's rating of not less than A and a financial rating of not less than Class VIII, as rated in the most current edition of Best's Key Rating Guide. With respect to the insurance prescribed in subsections (a), (e) and (f) above, Landlord, any Superior Rights Holders and property manager and any other parties identified by Landlord in writing together with their respective agents, members, partners, employees, offices, directors, and shareholders shall be named as additional insureds under all insurance maintained by Tenant, and Tenant shall obtain waivers of subrogation in favor of Landlord as its interests may appear, as specified in Section 15.3 below; moreover, Tenant shall notify Landlord at least thirty (30) days prior to cancellation of such insurance. Tenant shall provide Landlord with an original Certificate of Insurance demonstrating that the insurance required by this Lease was purchased and is in effect. Tenant shall also provide Landlord with a copy of the Additional Insured, Waiver of Subrogation and Primary and Noncontributory endorsements or such other policy language demonstrating that the insurance policies comply with this Lease. If Tenant should fail to comply with the foregoing requirements relating to insurance, Landlord may obtain such insurance and Tenant shall pay to Landlord on demand as Additional Rent hereunder the premium cost thereof plus interest as provided in Section 21.2(a). Tenant hereby acknowledges and agrees that any such payment and interest shall be payable immediately on demand as Additional Rent and that the same are cumulative with, and do not supersede or reduce in any way, Landlord's rights as specified in Article XXI of this Lease. Landlord makes no representation or warranty to Tenant that the amount of insurance required to be carried by Tenant under this Lease is adequate to fully protect Tenant’s interests or cover Tenant’s obligations.
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ARTICLE XV
WAIVER OF LIABILITY; MUTUAL WAIVER OF SUBROGATION
15.1 Non-Liability of Landlord. Landlord and Landlord's agents and employees shall not be liable to Tenant or to Tenant's employees, subtenants, concessionaires, agents, invitees, or visitors, or to any other person whomsoever, for any injury to person or damage to property caused by the Premises becoming out of repair, or by defect or failure of any structural element of the Premises or of any equipment, pipes or wiring, or broken glass, or by the backing up of drains, or by gas, water, steam, electricity or oil leaking, escaping or flowing into the Premises, nor shall Landlord be liable to Tenant, or to Tenant's employees, subtenants, concessionaires, agents, invitees, or visitors, or to any other person whomsoever, for any loss or damage that may be occasioned by or through the acts or omissions of any other persons whomsoever unless same were (i) a result of the Landlord Work, or (ii) caused by Landlord's gross negligence or intentional misconduct. Landlord shall not be held responsible in any way on account of any construction, repair or reconstruction (including widening) of any private or public roadways, walkways or utility lines. This Section 15.1 shall survive the expiration or earlier termination of this Lease.
15.2 Indemnity by Tenant. Landlord shall not be liable to Tenant or to Tenant's employees, agents, or visitors, or to any other person whomsoever, for any injury to person or damage to property on or about the Premises caused by the negligence or misconduct of Tenant, its employees, subtenants, licensees or concessionaires, or of any other person entering the Premises under express or implied invitation of Tenant, or arising out of the use of the Premises by Tenant and the conduct of its business therein, or arising out of any breach or default by Tenant in the performance of its obligations under this Lease; and Tenant hereby agrees to indemnify Landlord and its partners, members, affiliates and subsidiaries, and all of their respective officers, trustees, directors, employees, stockholders, partners, representatives, servants, insurers, and agents and Landlord's designated property management company (collectively, the “Landlord Indemnitees”) and hold each of the Landlord Indemnitees harmless from any loss, expense, cost, damage, or claim arising out of such damage or injury. Except for the gross negligence or willful misconduct of Landlord, its agents, employees or contractors, and to the extent permitted by Applicable Laws, Tenant agrees to indemnify, defend and hold harmless the Landlord Indemnitees from and against any and all losses, liabilities, damages, costs and expenses (including reasonable attorneys' fees and costs) resulting from claims by third parties for injuries to any person and damage to or theft or misappropriation or loss of property occurring in or about the Premises and arising from the use and occupancy of the Premises or from any activity, work, or thing done, permitted or suffered by Tenant in or about the Premises or due to any other act or omission of Tenant, its subtenants, assignees, invitees, employees, contractors or agents. Landlord shall in no event be liable to Tenant or any other person for any consequential damages, special or punitive damages, or for loss of business, revenue, income or profits and Tenant hereby waives any and all claims for any such damages. Notwithstanding anything to the contrary contained in this Section 15.2, all property of Tenant and its contractors, employees, customers and invitees, kept or stored on the Premises, whether leased or owned by any such parties, 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. Landlord or its agents shall not be liable for interference with light or other intangible rights. The furnishing by Tenant of the insurance required under this Lease shall not be deemed to limit Tenant's obligations under this Section 15.2. This Section 15.2 shall survive the expiration or earlier termination of this Lease.
15.3 Waiver of Claims; Waiver of Subrogation. Landlord and Tenant intend that their respective property loss risks shall be borne by reasonable insurance carriers to the extent above provided, and Landlord and Tenant hereby agree to look solely to, and seek recovery only from, their respective insurance carriers in the event of a property or business interruption loss to the extent that such coverage is agreed to be provided hereunder. The parties each hereby waive all rights and claims against each other for such losses and waive all rights of subrogation of their respective insurers, provided such waiver of subrogation shall not affect the right to the insured to recover thereunder. The parties agree that their respective insurance policies are now, or shall be, endorsed such that the waiver of subrogation shall not affect the right of the insured to recover thereunder, so long as no material additional premium is charged therefor. The release and waiver specified in this Section 15.3 is cumulative with any releases or exculpations which may be contained in other provisions of this Lease.
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ARTICLE XVI
DAMAGES BY CASUALTY
16.1 Repair of Damage to Premises by Landlord.
16.2 Landlord’s Option to Repair. Notwithstanding the terms of Section 16.1 above, Landlord may elect not to rebuild and/or restore the Premises and instead terminate this Lease, by notifying Tenant in writing of such termination such notice to include a termination date giving Tenant sixty (60) days to vacate the Premises, but Landlord may so elect only if the Building shall be damaged by Casualty and one or more of the following conditions is present: (a) in Landlord’s reasonable judgment, repairs cannot reasonably be completed within twelve (12) months after the date of discovery of the damage (when such repairs are made without the payment of overtime or other premiums); (ii) a Superior Rights Holder shall require that the insurance proceeds or any portion thereof be used to retire the mortgage debt, or shall terminate the ground lease, as the case may be; (iii) the damage is not fully covered by the insurance policies required to be maintained by Landlord hereunder; or (iv) the damage occurs during the last twelve (12) months of the Lease Term (and Tenant does not, within thirty (30) days after such Casualty, elect to exercise its option to extend the Lease Term pursuant to its Renewal Option, if any such option then remains); provided, however, that if Landlord does not elect to terminate this Lease pursuant to Landlord’s termination right as provided above, and the repairs cannot, in the reasonable opinion of Landlord, be completed within twelve (12) months after being commenced and as a result of the damage, Tenant cannot reasonably, and does not, conduct business from the Premises, Tenant may elect, no earlier than sixty (60) days after the date of the damage and not later than ninety (90) days after the date of such damage, to terminate this Lease by written notice to Landlord effective as of the date specified in the notice, which date shall not be less than thirty (30) days nor more than sixty (60) days after the date such notice is given by Tenant.
16.3 Abatement. In the event of any Casualty affecting the Premises, Base Rent and Tenant’s regular monthly payments of Additional Rent shall be equitably abated for the period from the date of such Casualty until the earlier of (a) the date Tenant reoccupies any portion of the Premises for the conduct of its business (in which case the Base Rent and Additional Rent allocable to such reoccupied portion shall be payable by Tenant from the date of such occupancy), and (b) the date that Landlord provides written notice to Tenant that Landlord has substantially completed Landlord’s restoration of the Premises excluding Tenant’s Scope.
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ARTICLE XVII
EMINENT DOMAIN
17.1 Termination for Taking of Premises. In the event that the whole or any part of the Premises is taken or condemned by any competent authority for any public use or purpose (including a deed given in lieu of condemnation) (“Taken” and each occurrence, a “Taking”) and the Building is thereby rendered untenantable, this Lease shall terminate as of the date title vests in such authority, and Base Rent and Additional Rent shall be apportioned as of such date. Notwithstanding anything to the contrary herein set forth, in the event the Taking is temporary (for less than the remaining Lease Term), Landlord may elect to either (a) terminate this Lease or (ii) permit Tenant to receive the entire award attributable to the Premises in which case Tenant shall continue to pay Rent and this Lease shall not terminate.
17.2 Adjustment for Partial Taking of Premises In the event a part of the Premises is Taken, and this Lease is not terminated, this Lease shall be amended to reduce the Base Rent to reflect any reduction in the Rentable Area of the Building as a result of such Taking. Landlord, upon receipt and to the extent of the award in condemnation (or proceeds of sale) shall make necessary repairs and restorations to the Building to the extent necessary to cause the remaining portions of the Building to be an architectural whole.
17.3 Condemnation Awards. All compensation awarded for any Taking (or the proceeds of sale) of the Premises shall be the sole property of Landlord, and Tenant hereby assigns its interest in any such award to Landlord; provided, however, Landlord shall have no interest in any award made to Tenant for Tenant's moving and relocation expenses or for the loss of Tenant's fixtures and other tangible personal property if a separate award for such items is made to Tenant, as long as such separate award does not reduce the amount of the award that would otherwise be awarded to Landlord.
ARTICLE XVIII
ASSIGNMENT AND SUBLETTING
18.1 Prohibition.
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18.2 Recapture Right. Notwithstanding anything to the contrary contained in this Article XVIII, in the event Tenant contemplates a Transfer of the entire Building for substantially the remainder of the Lease Term (excluding an assignment pursuant to a Permitted Transfer as defined in Section 18.3 below), Landlord shall have the option, by giving written notice to Tenant within ten (10) days after receipt of any Transfer Notice, to recapture the entirety of the Premises; provided, however, if Landlord elects to recapture the Premises, Tenant may elect to withdraw its Transfer Notice by written notice to Landlord within ten (10) days of Landlord’s election. Such recapture, if not withdrawn by Tenant pursuant to the immediately preceding sentence, shall cancel and terminate this Lease with respect to such space as of the proposed effective date of the Transfer.
18.3 Permitted Transfer. Notwithstanding anything to the contrary contained in this Article XVIII, Tenant shall have the right, without the prior written consent of Landlord, to (a) assign this Lease to an Affiliate (as defined below), to an entity created by merger, reorganization or recapitalization of or with Tenant, or to a purchaser of all or substantially all of Tenant’s assets or (b) to sublease the Premises or any part thereof to an Affiliate (each, a “Permitted Transfer”); provided, however, that (i) such Permitted Transfer is for a valid business purpose and not to avoid any obligations under this Lease, (ii) the Transferee is publicly traded and shall have, immediately after giving effect to such assignment, a Comparable Financial Status (as defined below), (iii) no later than twenty (20) days prior to the effective date of the Permitted Transfer, Tenant shall give notice to Landlord, which notice shall include the full name and address of the Transferee, and a copy of all agreements executed between Tenant and the Transferee with respect to the Premises or part thereof, as may be the case, (iv) no later than fifteen (15) days after the effective date of the Permitted Transfer, the assignee or sublessee shall provide the documentation required pursuant to Section 18.1(b) above, and (v) within ten (10) days after Landlord’s written request, provide such reasonable documents or information which Landlord reasonably requests for the purpose of substantiating whether or not the Permitted Transfer is to an Affiliate or is otherwise in accordance with the terms and conditions of this Section. As used herein, “Affiliate” shall mean any Person (as defined below) which is currently owned or Controlled by, owns or Controls, or is under common ownership or Control with Tenant. For purposes of this definition, the word “Control,” as used above means, with respect to a Person that is a corporation, the right to exercise, directly or indirectly, more than fifty percent (50%) of the voting rights attributable to the
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shares of the Controlled corporation and, with respect to a Person that is not a corporation, the possession, directly or indirectly, of the power at all times to direct or cause the direction of the management and policies of the Controlled Person. The term “Comparable Financial Status” shall mean a market capitalization equal to 90% of the initial Tenant’s market capitalization as of the Effective Date. The word “Person” means an individual, partnership, trust, corporation, firm or other entity. Tenant shall not have the right to perform a Permitted Transfer, if, as of the date of the effective date of the Permitted Transfer, an Event of Default is then continuing.
18.4 Assumption by Assignee. Any assignee or sublessee of an interest in and to this Lease shall be deemed, by acceptance of such assignment or sublease or by taking actual or constructive possession of all or any portion of the Premises, to have assumed all of the obligations set forth in or arising under this Lease. Such assumption shall be effective as of the earlier of the date of such assignment or sublease or the date on which the assignee or sublessee obtains possession of all or any portion of the Premises; however, with specific regard to any assignment, the assignee shall be responsible for all unsatisfied obligations of Tenant under this Lease, regardless of when such obligations arose and when such assumption became effective.
18.5 Tenant Remains Liable; Excess Rent. Notwithstanding any assignment or subletting, Tenant shall at all times remain fully responsible and liable for the payment of the Rent herein specified and for compliance with all of Tenant's other obligations under this Lease (even if future assignments and sublettings occur subsequent to the assignment or subletting by Tenant, and regardless of whether or not Landlord's approval has been obtained for such future assignments and sublettings). Moreover, in the event that the Rental due and payable by a sublessee (or a combination of the rental payable under such sublease plus any bonus or other consideration therefor or incident thereto) exceeds the Rent payable under this Lease, or if with respect to a permitted assignment or sublease, permitted license or other transfer by Tenant permitted by Landlord, the consideration payable to Tenant by the assignee, sublessee, licensee or other transferee exceeds the rental payable under this Lease, then Tenant shall be bound and obligated to pay Landlord fifty percent (50%) of such excess rental and other excess consideration (after deduction of all customary transaction costs, including but not limited to, brokerage fees, legal fees, free rent and any subtenant improvement expenses) within ten (10) days following receipt thereof by Tenant from such sublessee, assignee, licensee or other transferee, as the case may be.
18.6 No Encumbrances. Tenant shall not mortgage, pledge, hypothecate, encumber, or permit any lien to attach to, or otherwise encumber its interest in this Lease or in the Premises.
18.7 Transfer by Landlord. In the event of the transfer and assignment by Landlord of its interest in this Lease and in the Building to a person expressly assuming Landlord's obligations under this Lease, Landlord shall thereby be released from any further obligations hereunder, and Tenant agrees to look solely to such successor-in- interest of the Landlord for performance of such obligations. In addition, as described more fully in Section 24.3 of this Lease, any Security Deposit given by Tenant to secure performance of Tenant's obligations hereunder shall be assigned and transferred by Landlord to such successor-in-interest, and Landlord shall thereby be discharged of any further obligation relating thereto.
ARTICLE XIX
SUBORDINATION; ATTORNMENT; ESTOPPELS
19.1 Subordination. Tenant accepts this Lease subject and subordinate to any mortgage, deed of trust, ground lease or other lien presently existing or hereafter placed upon the Building or any portion of the Premises, and to any renewals and extensions thereof (collectively, “Superior Rights” and the holder of any such rights a “Superior Rights Holder”). Tenant agrees that any Superior Rights Holder shall have no duty, liability or obligation to perform any of the obligations of Landlord under this Lease and shall have the right at any time to subordinate its mortgage, deed of trust, ground lease or other lien to this Lease; provided, however, notwithstanding that this Lease may be (or may become) superior to a Superior Rights Holder, the Superior Rights Holder shall not be liable for prepaid rentals, security deposits and claims accruing during Landlord's ownership; and further provided that the provisions of a mortgage, deed of trust, ground lease or other lien relative to the rights of the mortgagee with respect to proceeds arising from an eminent domain taking (including a voluntary conveyance by Landlord) and provisions relative to proceeds arising from insurance payable by reason of damage to or destruction of the Premises shall be prior and superior to any contrary provisions contained in this Lease with respect to the payment or usage thereof. Landlord is hereby irrevocably vested with full power and authority to subordinate this Lease to any Superior Rights hereafter placed upon the Premises. The foregoing agreements shall be effective without the execution of any further documents, provided, however, that Tenant hereby agrees upon demand to execute such
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further instruments subordinating this Lease as Landlord or a Superior Rights Holder may request, including, without limitation, such Superior Rights Holder's standard form of subordination, non-disturbance and attornment agreement. Landlord shall use commercially reasonable efforts to obtain from any such Superior Rights Holder a written agreement that after a foreclosure (or a deed in lieu of foreclosure) the rights of Tenant shall remain in full force and effect during the term of this Lease so long as Tenant shall continue to recognize and timely perform all of the covenants and conditions of this Lease. Tenant shall recognize as its landlord and attorn to any person succeeding to Landlord under this Lease upon any foreclosure or deed in lieu of foreclosure by Landlord's mortgagee at the election of such mortgagee or successor-in-interest. Upon request of such mortgagee or successor-in-interest, Tenant shall execute and deliver an instrument or instruments confirming its attornment; provided, however, that any successor-in-interest will not be (i) bound by payment of rent for more than one month in advance (except as otherwise required under this Lease), (ii) bound by any amendment or modification to this Lease which was subject to approval by such mortgagee or successor- in-interest pursuant to such mortgagee's agreements with Landlord, if such amendment or modification to this Lease was in fact made without the consent of the mortgagee, (iii) liable for any security deposit not actually received by such mortgagee or successor-in-interest (provided, that if Landlord has not transferred the Security Deposit to such successor-in-interest, then Tenant may look to Landlord for return of the Security Deposit even if Landlord is no longer the landlord under this Lease), or (iv) liable for or subject to claims or offsets accruing during Landlord's ownership or previous acts or omissions of Landlord.
19.2 Notice to Holder. At any time when the holder of an outstanding Superior Right (or Landlord) has given Tenant written notice of such Superior Rights Holder’s interest in this Lease and the contact information for such Superior Rights Holder, Tenant may not exercise any remedies for default by Landlord hereunder unless and until such Superior Rights Holder shall have received written notice of such default and a reasonable time (not less than thirty (30) days) shall thereafter have elapsed without the default having been cured.
19.3 Estoppel Certificate. Landlord and Tenant agree that they will, within ten (10) business days following request by the other party, execute and deliver to the other party a written statement (an “Estoppel Certificate”) addressed to the other party, (and/or parties designated by the other party), which statement shall identify Landlord, Tenant and this Lease, shall certify that this Lease is unmodified and in full force and effect (or if there have been modifications, that the same is in full force and effect as so modified), shall confirm that Landlord or Tenant, as applicable, is not in default as to any obligations under this Lease (or if there is a default, specifying any default), shall state the dates to which the rent and other changes have been paid in advance, if any, and shall contain such other information or confirmations as Landlord or Tenant, as applicable, may reasonably require. If a party fails to do so within thirty (30) business days after the delivery of a written request from the other party, then such failure shall be a default under the Lease and the non-defaulting party will have all rights and remedies accorded to it pursuant to Article XIXI of this Lease.
19.4 Financial Information. If Landlord desires to finance, refinance, or sell the Building, the Premises, or any part thereof, Tenant shall deliver to any potential lender or purchaser designated by Landlord such financial statements as may be reasonably required by such lender or purchaser. The forgoing shall not apply to Tenant if Tenant is a publicly held entity.
ARTICLE XX
SURRENDER OF PREMISES; OWNERSHIP AND REMOVAL OF TRADE FIXTURES
20.1 Surrender of Premises. No act or thing done by Landlord or any agent or employee of Landlord during the Lease Term shall be deemed to constitute an acceptance by Landlord of a surrender of the Premises unless such intent is specifically acknowledged in writing by Landlord. The delivery of keys to the Premises to Landlord or any agent or employee of Landlord shall not constitute a surrender of the Premises or effect a termination of this Lease, whether or not the keys are thereafter retained by Landlord, and notwithstanding such delivery Tenant shall be entitled to the return of such keys at any reasonable time upon request until this Lease shall have been properly terminated. The voluntary or other surrender of this Lease by Tenant, whether accepted by Landlord or not, or a mutual termination hereof, shall not work a merger.
20.2 Removal of Tenant Property by Tenant. Upon the expiration of the Lease Term, or upon any earlier termination of this Lease, Tenant shall, subject to the provisions of this Article XX, peaceably quit and surrender possession of the Premises to Landlord broom clean and otherwise in as good order and condition as when Tenant took possession and as thereafter improved by Landlord and/or Tenant, reasonable wear and tear, repairs which are specifically made the responsibility of Landlord hereunder, and damage due to a Casualty
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excepted. Upon such expiration or termination, Tenant shall, without expense to Landlord, remove or cause to be removed from the Premises all debris and rubbish, and all items of furniture, equipment, free-standing cabinet work, movable partitions and other articles of personal property owned by Tenant or installed or placed by Tenant at its expense in the Premises, and such similar articles of any other persons claiming under Tenant, and all Alterations designated by Landlord for removal in accordance with Section 10.4 above, and Tenant shall repair at its own expense all damage to the Premises and Building resulting from the installation thereof and/or from such removal. Notwithstanding anything to the contrary contained herein, Tenant shall, at its sole cost and expense, remove from the Premises, prior to the end of the Term, any item installed by or for Tenant and which, pursuant to Applicable Laws, must be removed therefrom before the Premises may be used by a subsequent tenant. If Tenant fails to remove any property from the Building or the Premises which Tenant is obligated by the terms of this Lease to remove within ten (10) days after written notice from Landlord, all or any of such property (the “Abandoned Property”) shall, at Landlord’s option be conclusively deemed to have been abandoned and may either be retained by Landlord as its property or sold or otherwise disposed of in such manner as Landlord may see fit. If any item of Abandoned Property shall be sold, Tenant hereby agrees that Landlord may receive and retain the proceeds of such sale and apply the same, at its option, to the expenses of the sale, the cost of moving and storage, any damages to which Landlord may be entitled hereunder or pursuant to law, and to any arrears of Rent.
20.3 Decommissioning; Surrender Plan.
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20.4 Condition of the Building and Premises Upon Surrender. In addition to the above requirements of this Article XX, upon the expiration of the Lease Term, or upon any earlier termination of this Lease, Tenant shall surrender the Premises and Building such that the same are in compliance with all Applicable Laws and with Tenant having complied with all of Tenant’s obligations under this Lease, including those relating to improvement, repair, maintenance, compliance with law, testing and other related obligations of Tenant hereunder. In the event that the Building and Premises shall be surrendered in a condition which does not comply with the terms of this Article XX because Tenant failed to comply with its obligations set forth in Lease, then Landlord shall be entitled to expend all reasonable costs in order to cause the same to comply with the required condition upon surrender and Tenant shall immediately reimburse Landlord for all such costs upon notice.
ARTICLE XXI
DEFAULT BY TENANT AND REMEDIES
21.1 Events of Default. The following events shall be deemed to be events of default (each, a “default” or “Event of Default”) by Tenant under this Lease:
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21.2 Landlord's Remedies. Upon the occurrence of any such Events of Default, then in addition to the remedies available to Landlord under the other provisions of this Lease and all Applicable Laws, Landlord shall also have the option to pursue any one or more of the following remedies. Landlord's election of any one remedy under this Section 21.2 shall in no way prejudice Landlord's right at any time thereafter to exercise any other remedy.
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The term “rent” as used in this Section 21.2 shall be deemed to be and to mean all sums of every nature required to be paid by Tenant pursuant to the terms of this Lease, whether to Landlord or to others, and shall be calculated on the assumption that all Additional Rent would have increased at the rate of three percent (3%) per annum. As used in Sections 21.2(d)(i) and (ii) above, the “worth at the time of award” shall be computed by allowing interest at the rate set forth in Section 8.6 of this Lease, but in no case greater than the maximum amount of such interest permitted by law. As used in Section 21.2(d)(iii) the “worth at the time of award” shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%).
Suit or suits for the recovery of such damages, or any installments thereof, may be brought by Landlord from time to time at its election, and nothing contained herein shall be deemed to require Landlord to postpone suit until the date when the Lease Term would have expired if it had not been terminated hereunder.
21.3 Monthly Rent. It is expressly agreed that in determining “the monthly Rent and other charges provided in this Lease,” as that term is used throughout Section 21.2 above, the term “Rent” includes, without limitation, all payments prescribed in Section 8.1 of this Lease.
21.4 Landlord Expenses. It is further agreed that, in addition to all payments required pursuant to Section 21.2 above, and solely for expenses relating to actions taken under 21.2 above, Tenant shall compensate Landlord for expenses incurred by Landlord in repossession (including, among other expenses, any increase in insurance premiums caused by the vacancy of the Premises), expenses incurred by Landlord in reletting (including repairs, replacements, advertisements and brokerage fees), and all actual losses incurred by Landlord as a direct result of Tenant's default (including, among other losses, any claims asserted by Landlord's mortgagee which result in any loss, cost or expense to Landlord).
21.5 Injunctive Remedies. Landlord may restrain or enjoin any breach or threatened breach of any covenant, duty or obligation of Tenant herein contained without the necessity of proving the inadequacy of any legal remedy or irreparable harm. The remedies of Landlord hereunder shall be deemed cumulative and not exclusive of each other.
21.6 Attorneys' Fees and Costs. If either Landlord or Tenant shall commence any action or other proceeding against the other arising out of, or relating to, this Lease or the Premises, the prevailing party shall be entitled to recover from the losing party, in addition to any other relief, its actual attorneys’ fees. In addition, Tenant shall reimburse Landlord, upon demand, for all reasonable attorneys’ fees incurred in collecting Rent or otherwise seeking enforcement against Tenant, its sublessees and assigns, of Tenant’s obligations under this Lease.
21.7 Use of Security Deposit. Tenant acknowledges its obligation to deposit with Landlord the sum stated in Section 1.1(n) above, to be held by Landlord for the performance by Tenant of Tenant's covenants and obligations under this Lease. Upon the occurrence of any Event of Default by Tenant, Landlord may, from time to time, without prejudice to any other remedy provided herein or provided by law, use such funds to the extent necessary to make
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good any arrears of Rent and any other documentable damage, injury, expense or liability caused to Landlord by such event of default; and in such event, Tenant shall pay to Landlord on demand the amount so applied in order to restore the Security Deposit to its original amount.
21.8 Remedies Not Exclusive. No agreement to accept a surrender of the Premises and no act or omission by Landlord or Landlord's agent during the Lease Term shall constitute an acceptance or surrender of the Premises unless made in writing and signed by Landlord. No reentry or taking possession of the Premises by Landlord permitted hereunder or under Applicable Law shall constitute an election by Landlord to terminate this Lease unless a written notice of such intention is given to Tenant. Pursuit of any of the above remedies shall not preclude pursuit of any other remedies prescribed in other sections of this Lease and any other remedies provided by law. Forbearance by Landlord to enforce one or more of the remedies herein provided upon an event of default shall not be deemed or construed to constitute a waiver of such default or any remedy therefor.
21.9 Landlord Default; Tenant Self-Help.
(a) Landlord Default. Landlord’s failure to perform or observe any of its obligations under this Lease shall constitute a default by Landlord under this Lease only if such failure shall continue for a period of thirty (30) days (or the additional time, if any, that is reasonably necessary to promptly and diligently cure the failure) (“Landlord Cure Period”) after Landlord receives written notice from Tenant specifying the default, which notice shall describe in reasonable detail the nature and extent of the failure and shall identify the Lease provision(s) containing the obligation(s) in question. Subject to the remaining provisions of this Lease, following the occurrence of any such default, Tenant shall have the right to pursue any remedy available under Applicable Laws for such default by Landlord; provided, however, that in no case shall Tenant have any right to terminate this Lease on account of any such default, or to setoff, ▇▇▇▇▇ or reduce Rent before entry of a non-appealable final judgment in Tenant’s favor against Landlord. Tenant will have no claim against Landlord or defense to a claim by Landlord unless Tenant gives Landlord written notice of the circumstances giving rise to the claim or defense within one hundred eighty (180) days after the circumstances arise.
ARTICLE XXII
HOLDING OVER
22.1 Holdover. Tenant is not permitted to hold over possession of the Premises after the expiration or earlier termination of the Lease Term without the express prior written consent of Landlord, which consent Landlord may withhold in its sole and absolute discretion. If Tenant holds over after the expiration or earlier termination of the Lease Term without the express written consent of Landlord, then, in addition to all other remedies available to Landlord at law or at equity or under this Lease, Tenant shall become a tenant at sufferance only, upon the terms and conditions set forth in this Lease so far as applicable. During such holdover period, Tenant shall pay to Landlord a monthly Base Rent equivalent to (i) one hundred ten percent (110%) of Base Rent payable by Tenant to Landlord during the last month of the Lease Term for the first two (2) months of such holdover, and (ii) thereafter, one hundred fifty percent (150%) of Base Rent payable by Tenant to Landlord during the last month
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of the Lease Term. Acceptance by Landlord of Rent after such expiration or earlier termination shall not constitute consent to a holdover hereunder or result in an extension of this Lease. This Section 22.1 shall not be construed to create any express or implied right to hold over beyond the expiration of the Lease Term or any extension thereof. Tenant shall be liable, and shall pay to Landlord for all actual losses incurred by Landlord as a result of such holdover, and shall, subject to at least thirty (30) days’ prior notice that Landlord requires the Premises for a third party, indemnify, defend and hold Landlord and the Landlord Indemnitees harmless from and against all liabilities, damages, losses, claims, suits, costs and expenses (including reasonable attorneys' fees and costs) arising from or relating to any such holdover tenancy, including without limitation, any claim for damages made by a proposed succeeding tenant. Tenant's indemnification obligation hereunder shall survive the expiration or earlier termination of this Lease.
ARTICLE XXIII
NOTICES
23.1 Method and Addresses. Wherever any notice is required or permitted under this Lease, such notice shall be in writing. Any notice or document required or permitted to be delivered under this Lease shall be deemed to be delivered when it is actually received by the designated addressee or, if earlier and regardless of whether actually received or not, when it is either (i) deposited in the United States mail, postage prepaid, certified mail, return receipt requested, or (ii) delivered to the custody of a reputable messenger service or overnight courier service, addressed to the applicable party to whom it is being delivered at the respective address for such party as is set out in Section 1.1 above, or at such other address as such applicable party may have theretofore specified to the delivering party by written notice.
23.2 Multiple Parties. If and when included within the term “Landlord'' as used in this Lease there be more than one person, firm or corporation, all shall jointly arrange among themselves for their joint execution of such notice specifying some individual at some specific address for the receipt of notices and payments to the Landlord; if and when included within the term “Tenant” as used in this Lease there be more than one person, firm or corporation, all shall jointly arrange among themselves for their joint execution of such a notice specifying some individual at some specific address for the receipt of notices and payments to Tenant. All parties included within the terms “Landlord” and “Tenant,” respectively, shall be bound by notices and payments given in accordance with the provisions of this Article to the same effect as if each had received such notice or payment. In addition, Tenant agrees that notices to Tenant may be given by Landlord's attorney, property manager or other agent.
ARTICLE XXIV
SECURITY DEPOSIT
24.1 Comingling; Restoration. The Security Deposit prescribed in Section 1.1(n) of this Lease shall be held by Landlord without liability for interest and as security for the performance by Tenant of Tenant's covenants and obligations under this Lease, it being expressly understood that the Security Deposit shall not be considered an advance payment of Rent or a measure of Landlord's damages in case of default by Tenant. Landlord may commingle the Security Deposit with Landlord's other business funds. As prescribed in Section 21.7 of this Lease, Landlord may, without prejudice to any other remedy, use the Security Deposit to the extent necessary to make good any Rent delinquencies or to satisfy any other covenant or obligation of Tenant hereunder; and following any such application of the Security Deposit, Tenant shall pay to Landlord on demand the amount so applied in order to restore the Security Deposit to its original amount. No part of the Security Deposit shall be considered to be held in trust, to bear interest, or to be prepayment for any monies to be paid by Tenant under this Lease.
24.2 Return of Deposit. Subject to Section 8.5 above, within sixty (60) days after Tenant (i) has surrendered the Premises to Landlord as required under Article XX, and (ii) has provided Landlord with a forwarding address, Landlord shall return to Tenant the portion of the Security Deposit remaining after deducting all documented damages (which have been itemized and delivered to Tenant no later than thirty (30) days from Landlord’s accepting surrender of the Premises or termination of this Lease), charges and other amounts permitted by the terms of this Lease and applicable law. Tenant acknowledges and agrees that if Tenant has breached this Lease before or during Tenant's surrendering the Premises to Landlord, then Landlord shall be entitled to deduct from the Security Deposit being returned to Tenant (if any) all documentable damages and losses that Landlord has suffered as a result of such breach of this Lease by Tenant.
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24.3 Assignment of Deposit. If Landlord transfers its interest in the Premises during the term of this Lease, Landlord shall assign the Security Deposit to the transferee; and upon such transfer and the transferee's acknowledgement of responsibility to Tenant for the Security Deposit, Landlord shall thereafter have no further liability for the return of the Security Deposit.
24.4 Letter of Credit as Security Deposit.
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24.5 Reduction of Security Deposit / Letter of Credit Amount. Provided (i) as of Reduction Effective Date (as defined below) no Event of Default is continuing and (ii) no Monetary Default has occurred within the twelve (12)-month period prior to any Reduction Effective Date, Tenant shall be entitled to reduce the amount of the Security Deposit as follows (each, an “Incremental Reduction”): (i) to an amount equal to $4,000,000.00 effective as of the last day of the thirty-sixth (36th) calendar month following the Commencement Date; (ii) to an amount equal to $3,000,000.00 effective as of the last day of the sixtieth (60th) full calendar month following the Commencement Date; (ii) to an amount equal to $2,000,000.00 effective as of the last day of the eighty-fourth (84th) full calendar month following the Commencement Date; and (iv) to an amount equal to the sum of the monthly Base Rent applicable to the last month of the Lease Term and the Pass-Through Costs applicable to the one hundred seventh (107th ) month, effective as of the last day of the one hundred eighth (108th) full calendar month following the Commencement Date. If Tenant is not entitled to reduce the Letter of Credit Amount as of any of the reduction effective dates set forth above (each a “Reduction Effective Date”) due to the occurrence of an Event of Default or a Monetary Default during the twelve (12) months prior to such Reduction Effective Date, then such Reduction Effective Date and, if applicable, the subsequent Reduction Effective Dates shall be postponed for a period equal to twelve (12) months from the date that Tenant cures such Event of Default or Monetary Default. Any reduction in the Letter of Credit Amount shall be accomplished by Tenant providing Landlord with a substitute letter of credit in the applicable reduced Letter of Credit Amount or an amendment so reducing the Letter of Credit Amount.
ARTICLE XXV
COMMISSIONS
25.1 Brokers. Landlord and Tenant hereby warrant to each other that they have had no dealings with any real estate broker or agent in connection with the negotiation of this Lease, excepting only (a) ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ of CBRE (for Landlord) and (b) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ of ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ (for Tenant) (the “Brokers”), and that they know of no other real estate broker or agent who is entitled to a commission in connection with this Lease. Landlord shall pay a commission to the Brokers pursuant to a separate agreement. Each party agrees to indemnify and defend the other party against and hold the other party harmless from any and all claims with respect to any leasing commission or equivalent compensation alleged to be owing on account of any dealings with any real estate broker or agent, other than the Brokers, occurring by, through, or under the indemnifying party. The terms of this Section 25.1 shall survive the expiration or earlier termination of the Lease Term.
ARTICLE XXVI
LAWS AND REGULATIONS
26.1 Applicable Laws. Tenant shall not do anything or suffer anything to be done in or about the Premises which will in any way conflict with any law, statute, ordinance or other rule, directive, order, regulation, guideline or requirement of any local, state or federal governmental entity or governmental agency (the “Applicable Laws”) now in force or which may hereafter be enacted or promulgated relating to or affecting the Premises and Tenant’s Permitted Use. Applicable laws shall include all Environmental Laws. At its sole cost and expense, Tenant shall promptly comply with all Applicable Laws. Should any standard or regulation now or hereafter be imposed on
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Landlord or Tenant by a state, federal or local governmental body charged with the establishment, regulation and enforcement of occupational, health or safety standards for employers, employees, landlords or tenants, then Tenant agrees, at its sole cost and expense, to comply promptly with such standards or regulations. Tenant shall be responsible, at its sole cost and expense, to make all alterations to the Building as are required by Tenant to comply with the governmental rules, regulations, requirements or standards described in this Article XXVI.
26.2 Permits. Tenant shall, at Tenant’s sole cost and expense, apply for, seek and obtain prior to the date on which Tenant commences occupancy of all or any portion of the Premises all necessary federal, state, county and municipal licenses, permits and approvals needed for the operation of Tenant’s business in the Premises, including any and all necessary permits and approvals directly or indirectly relating or incident to the conduct of its activities on the Premises, its scientific experimentation, transportation, storage, handling, use and disposal of any Hazardous Materials or animals or laboratory specimens (collectively, the “Required Permits”). Tenant shall thereafter maintain all Required Permits. Tenant, at Tenant’s expense, shall at all times comply with the terms and conditions of each Required Permit. Within ten (10) days of request by Landlord, Tenant shall furnish Landlord with copies of all Required Permits that Tenant has obtained together with a certificate certifying that such permits are all of the permits that Tenant has obtained with respect to the Premises. At Landlord's request, Tenant shall deliver to Landlord copies of all Required Permits to Landlord.
26.3 OFAC Compliance. Each of Landlord and Tenant certifies, represents, warrants and covenants that: (a) it is not acting and will not act, directly or indirectly, for or on behalf of any person, group, entity, or nation named by any Executive Order or the United States Treasury Department as a terrorist, “Specially Designated National and Blocked Person”, or other banned or blocked person, entity, nation or transaction pursuant to any law, order, rule, or regulation that is enforced or administered by the Office of Foreign Assets Control; and (ii) it is not engaged in this transaction, directly or indirectly on behalf of, or instigating or facilitating this transaction, directly or indirectly on behalf of, any such person, group, entity or nation.
ARTICLE XXVII
MISCELLANEOUS
27.1 Relationship of Parties. Nothing in this Lease shall be deemed or construed by the parties hereto, nor by any third party, as creating the relationship of principal and agent or of partnership or of joint venture between the parties hereto, it being understood and agreed that neither the method of computation of rent, nor any other provision contained herein, nor any acts of the parties hereto, shall be deemed to create any relationship between the parties hereto other than the relationship of landlord and tenant.
27.2 No Offset; Independent Covenants. Tenant shall not for any reason withhold or reduce Tenant's required payments of Rent and other charges provided in this Lease, it being agreed (i) that the obligations of Landlord under this Lease are independent of Tenant's obligations except as may be otherwise expressly provided in this Lease and (ii) that to the maximum extent permitted under Applicable Laws, Tenant hereby waives all rights which it might otherwise have to withhold Rent. The immediately preceding sentence shall not be deemed to deny Tenant the ability of pursuing all rights granted it under this Lease or at law (with the exception of any right of Tenant to offset or withhold the payment of Rent, which right is hereby waived to the maximum extent permitted by applicable law); however, at the direction of Landlord, Tenant's claims in this regard shall be litigated in proceedings different from any litigation involving Rent claims or other claims by Landlord against Tenant (i.e., each party may proceed to a separate judgment without consolidation, counterclaim or offset as to the claims asserted by the other party).
27.3 Limitation on Liability. The liability of Landlord to Tenant for any default by Landlord under the terms of this Lease shall be limited solely to Landlord's proceeds in the Premises and the rents derived therefrom, and Landlord shall not be personally liable for any deficiency, except that Landlord shall, subject to the provisions of Sections 18.7 and 24.3 of this Lease, remain liable to account to Tenant for any security deposit under this Lease. This Section 27.3 shall not be deemed to limit or deny any remedies which Tenant may have in the event of default by Landlord hereunder which do not involve the personal liability of Landlord. Notwithstanding anything contained in this Lease to the contrary, the obligations of Landlord under this Lease (including as to any actual or alleged breach or default by Landlord) do not constitute personal obligations of the individual members, managers, investors, partners, directors, officers, or shareholders of Landlord or Landlord's members, affiliates, or partners, and Tenant shall not seek recourse against the individual members, managers, investors, partners, directors, officers, or shareholders of Landlord or Landlord's members, affiliates or partners or any other persons or entities
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having any interest in Landlord, 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 any default by Landlord under the terms of this Lease shall be limited solely to the Landlord's interest in the Building and no other assets of Landlord, and Landlord shall not be personally liable for any deficiency. 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. 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, the Building, 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.
27.4 No Continuing Waiver. One or more waivers of any covenant, term or condition of this Lease by either party shall not be construed as a waiver of a subsequent breach of the same covenant, term or condition. The consent or approval by either party to or of any act by the other party requiring such consent or approval shall not be deemed to waive or render unnecessary consent to or approval of any subsequent similar act.
27.5 Force Majeure. Notwithstanding anything to the contrary contained in this Lease, any prevention, delay or stoppage due to strikes, lockouts, labor disputes, acts of God, acts of war, terrorist acts, inability to obtain services, labor, or materials or reasonable substitutes therefor, governmental actions, civil commotions, Casualty, actual or threatened public health emergency (including epidemic, pandemic, famine, disease, plague, quarantine, and other significant public health risk), governmental edicts, actions, declarations or quarantines by a governmental entity or health organization (including any shelter-in-place orders, stay at home orders or any restrictions on travel related thereto that preclude either party, its agents, contractors or its employees from accessing the Premises, national or regional emergency), breaches in cybersecurity, and other causes beyond the reasonable control of the party obligated to perform, regardless of whether such other causes are (i) foreseeable or unforeseeable or (ii) related to the specifically enumerated events in this paragraph (collectively, a “Force Majeure”), shall excuse the non-monetary performance of such party for a period equal to any such prevention, delay or stoppage. If this Lease specifies a time period for performance of a non-monetary obligation of either party, that time period shall be extended by the period of any delay in such party’s performance caused by a Force Majeure. Notwithstanding anything to the contrary in this Lease, in no event shall financial inability be deemed to be, or be a cause of, an event of Force Majeure, and no event of Force Majeure shall (i) excuse Tenant’s obligations to pay Rent and other charges due pursuant to this Lease, (ii) be grounds for Tenant to ▇▇▇▇▇ any portion of Rent due pursuant to this Lease, or entitle either party to terminate this Lease, except as allowed pursuant to Article XVI or Article XVII of this Lease, or (iii) excuse Tenant’s obligations under Article IV and Section 14.2 and Article XXVI of this Lease.
27.6 Tenant Financial Statements. Landlord acknowledges that Tenant is a publicly traded company and Tenant’s financial information is publicly available. If Tenant should cease to be a publicly traded company, then Tenant agrees, within ten (10) days after a request from Landlord, to deliver to Landlord such financial statements as are reasonably required by Landlord to verify the net worth of Tenant, or an affiliate or parent company of Tenant as Landlord may request. Tenant represents and warrants to Landlord that all such financial statements provided in connection with this Lease including, without limitation, any that have been provided prior to the Effective Date, are true, complete and correct as of the date thereof.
27.7 Landlord's Manager. Tenant is hereby notified that Landlord may, from time to time, appoint a manager for the Premises (each a “Landlord's Manager”) to whom Landlord may delegate some or all of Landlord's obligations under this Lease. Upon appointment of a Landlord's Manager and notice to Tenant of the same; (a) Tenant shall be required and authorized to take direction from Landlord's Manager with respect to Tenant's obligations under this Lease and (b) any release or indemnification of Landlord under this Lease shall also apply to Landlord's Manager.
27.8 Severability. In the event that any provision or part of this Lease should be held to be invalid or unenforceable by a court of competent jurisdiction, such provision shall be reformed and enforced to the maximum extent permitted by law. If such provision cannot be reformed, then it shall be severed from this Lease and the validity
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and enforceability of the remaining provisions of this Lease shall not be affected thereby.
27.9 Intentionally Omitted.
27.10 Governing Law; Venue. The laws of the state of Colorado shall govern the interpretation, validity, performance and enforcement of this Lease. Except to the extent required otherwise by applicable law, the venue for any action relating to this Lease shall be brought solely and exclusively in the state and the county in which the Premises are located.
27.11 Headings. The captions and headings used herein are for convenience only and do not limit or amplify the provisions hereof.
27.12 Number; Gender. Whenever herein the singular number is used, the same shall include the plural, and words of any gender shall include each other gender.
27.13 Inurement. The terms, provisions and covenants contained in this Lease shall apply to, inure to the benefit of and be binding upon the parties hereto and their respective heirs, successors-in-interest and legal representatives except as otherwise herein expressly provided.
27.14 Entire Agreement; Amendments. This Lease contains the entire agreement between the parties, and no rights are created in favor of either party on account of any condition or event other than as specified or expressly contemplated in this Lease. No brochure, rendering, information or correspondence shall be deemed to be a part of this agreement unless specifically incorporated herein by reference. In addition, no agreement shall be effective to change, modify or terminate this Lease in whole or in part unless such is in writing and duly signed by the party against whom enforcement of such change, modification or termination is sought.
27.15 Intentionally Omitted.
27.16 No Offer. The submission by Landlord of this instrument to Tenant for examination, negotiation or signature does not constitute an offer of, an option for, or a representation by Landlord regarding, a prospective lease. This Lease shall be effective if and when (and only if and when) it has been executed and delivered by both Landlord and Tenant.
27.17 Waiver of Trial by Jury. It is mutually agreed by and between Landlord and Tenant that the respective parties hereto shall, and each hereby does, waive trial by jury (unless such waiver would preclude a right to counterclaim) in any action, proceeding or counterclaim brought by either of the parties hereto against the other on any matters whatsoever arising out of or in any way connected with this Lease, the relationship of Landlord and Tenant, Tenant's use or occupancy of the Premises, and any emergency statutory or other statutory remedy. It is further mutually agreed that in the event Landlord commences any summary proceedings for non-payment of Rent or other sums due hereunder, Tenant will not interpose any non-mandatory counterclaim of whatever nature or description in any such proceedings.
27.18 Memorandum of Lease. Landlord and Tenant will, at the request of the other, promptly execute a Memorandum of Lease substantially in the form of Exhibit G attached hereto, which shall be filed for record in the real property records of the county in which the Premises is located but in no event earlier than the date that is two (2) business days after the Landlord Financing Deadline or Landlord’s earlier waiver of the Landlord’s Financing Contingency.
27.19 Counterparts; Signatures. This Lease may be executed in two (2)or more duplicate originals. Each duplicate original shall be deemed to be an original hereof. Landlord and Tenant consent and agree that this Lease may be signed and/or transmitted by e-mail of a .pdf document and that such signed electronic record shall be valid and as effective to bind the party so signing as a paper copy bearing such party’s handwritten signature.
[Landlord and Tenant signatures, next page.]
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EXECUTED to be effective as of the later of the dates accompanying a signature by Landlord or Tenant below; provided, however, that if the later of the dates accompanying a signature by Landlord or Tenant below is different from the date specified as the “Effective Date” on the first page of this Lease, then the date so specified on the first page of this Lease shall be deemed to be the “Effective Date “ for all purposes.
LANDLORD:
Centennial Valley Properties I, LLC, a Colorado limited liability company
By: ▇▇▇▇▇▇▇ and Company,
a Colorado corporation, its manager
By: |
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. |
Name printed: |
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. |
Title: |
▇▇▇▇▇▇▇ and Company |
Date of Signature: |
3/11/2022 |
TENANT:
Biodesix, Inc., a Delaware corporation
By: |
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ |
Name printed: |
▇▇▇▇▇ ▇▇▇▇▇▇ Cowie |
Title: |
CFO |
Date of Signature: |
3/11/2022 |
40
EXHIBIT A
Site Plan of the Premises and Building
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EXHIBIT B
Legal Description of the Premises
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EXHIBIT C
[intentionally omitted]
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EXHIBIT D
Approximate Depiction of Subdivision Boundaries
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EXHIBIT E
ENVIRONMENTAL QUESTIONNAIRE
FOR COMMERCIAL AND INDUSTRIAL PROPERTIES
Tenant Name:
Lease Address:
Lease Type (check correct box – right click to properties): ☐ Primary Lease/Lessee
Instructions: The following questionnaire is to be completed by the Lessee representative with knowledge of the planned operations for the specified building/location. Please print clearly and attach additional sheets as necessary.
1.0 PROCESS INFORMATION
Describe planned site use, including a brief description of manufacturing processes and/or pilot plants planned for this site, if any.
2.0 HAZARDOUS MATERIALS – OTHER THAN WASTE
Will (or are) non-waste hazardous materials be/being used or stored at this site? If so, continue with the next question. If not, go to Section 3.0.
2.1 Are any of the following materials handled on the Project? ☐ Yes ☐ No
[A material is handled if it is used, generated, processed, produced, packaged, treated, stored, emitted, discharged, or disposed.] If YES, check (right click to properties) the applicable correct Fire Code hazard categories below.
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Combustible dusts/fibers |
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Explosives |
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Flammable liquids |
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Combustible liquids (e.g., oils) |
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Compressed gas - inert |
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Flammable solids/pyrophorics |
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Cryogenic liquids - inert |
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Compressed gas - flammable/pyrophoric |
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Organic peroxides |
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Cryogenic liquids - flammable |
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Compressed gas - oxidizing |
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Oxidizers - solid or liquid |
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Cryogenic liquids - oxidizing |
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Compressed gas - toxic |
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Reactives - unstable or water reactive |
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Corrosives - solid or liquid |
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Compressed gas - corrosive |
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Toxics - solid or liquid |
2-2. For all materials checked in Section 2.1 above, please list the specific material(s), use(s), and quantities of each used or stored on the site in the table below; or attach a separate inventory. NOTE: If proprietary, the constituents need not be named but the hazard information and volumes are required.
E-1
Material/ Chemical |
Physical State (Solid, Liquid, or Gas) |
Container Size |
Number of Containers Used & Stored |
Total Quantity |
Units (pounds for solids, gallons or liters for liquids, & cubic feet for gases) |
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2-3. Describe the planned storage area location(s) for the materials in Section 2-2 above. Include site maps and drawings as appropriate.
2-4. Other hazardous materials. Check below (right click to properties) if applicable. NOTE: If either of the latter two are checked (BSL-3 and/or radioisotope/radiation), be advised that not all lease locations/cities or lease agreements allow these hazards; and if either of these hazards are planned, additional information will be required with copies of oversight agency authorizations/licenses as they become available.
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Risk Group 2/Biosafety ▇▇▇▇▇- ▇ Biohazards |
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3.0 HAZARDOUS WASTE (i.e., REGULATED CHEMICAL WASTE)
Are (or will) hazardous wastes (be) generated? ☐ Yes ☐ No
If YES, continue with the next question. If not, skip this section and go to section 4.0.
3.1 Are or will any of the following hazardous (CHEMICAL) wastes generated, handled, or disposed of (where applicable and allowed) on the Project?
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3-2. List and estimate the quantities of hazardous waste identified in Question 3-1 above.
E-2
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APPROX. MONTHLY QUANTITY with units |
off-site landfill, incineration, fuel blending scrap metal; wastewater neutralization (onsite or off-site)] |
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3-3. Waste characterization by: Process knowledge ☐ EPA lab analysis ☐ Both ☐
3-4. Please include name, location, and permit number (e.g. EPA ID No.) for transporter and disposal facility if applicable. Attach separate pages as necessary. If not yet known, write “TBD.”
Hazardous Waste Transporter/Disposal Facility Name |
Facility Location |
Transporter (T) or Disposal (D) Facility |
Permit Number |
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3-5. Are pollution controls or monitoring employed in the process to prevent or minimize the release of wastes into the environment? NOTE: This does NOT mean fume hoods; examples include air scrubbers, cyclones, carbon or HEPA filters at building exhaust fans, sedimentation tanks, pH neutralization systems for wastewater, etc.
If YES, please list/describe:
4.0 OTHER REGULATED WASTE (i.e., REGULATED BIOLOGICAL OR MEDICAL WASTE referred to as “Medical Waste” in California)
4-1. Will (or do) you generate medical waste? ☐ Yes ☐ No If NO, skip to Section 5.0.
4-2. Check the types of waste that will be generated, all of which fall under the California Medical Waste Act:
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Contaminated sharps (i.e., if contaminated with ≥ Risk Group 2 materials) |
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Animal carcasses |
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Pathology waste known or suspected to be contaminated with ≥ Risk Group 2 pathogens) |
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Red bag biohazardous waste (i.e., with ≥ Risk Group 2 materials) for autoclaving |
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Human or non-human primate blood, tissues, etc. (e.g., clinical specimens) |
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Trace Chemotherapeutic Waste and/or Pharmaceutical waste NOT otherwise regulated as RCRA chemical waste |
4-3. What vendor will be used for off-site autoclaving and/or incineration?
E-3
4-5. Do you have a Medical Waste Permit for this site? ☐ Yes ☐ No, not required.
5.0 UNDERGROUND STORAGE TANKS (USTS) & ABOVEGROUND STORAGE TANKS (ASTS)
5-1. Are underground storage tanks (USTs), aboveground storage tanks (ASTs), or associated pipelines used for the storage of petroleum products, chemicals, or liquid wastes present on site (lease renewals) or required for planned operations (new tenants)? ☐ Yes ☐ No
NOTE: If you will have your own diesel emergency power generator, then you will have at least one AST! [NOTE: If a backup generator services multiple tenants, then the landlord usually handles the permits.]
If NO, skip to section 6.0. If YES, please describe capacity, contents, age, type of the USTs or ASTs, as well any associated leak detection/spill prevention measures. Please attach additional pages if necessary.
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Year Installed |
Type (Steel, Fiberglass, etc.) |
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*NOTE: The following are examples of leak detection / spill prevention measures: integrity testing, inventory reconciliation, leak detection system, overfill spill protection, secondary containment, cathodic protection.
5-2. Please provide copies of written tank integrity test results and/or monitoring documentation, if available. 5-3. Is the UST/AST registered and permitted with the appropriate regulatory agencies? ☐ Yes ☐ No, not
yet
If YES, please attach a copy of the required permit(s) See Section 7-1 for the oversight agencies that issue permits, with the exception of those for diesel emergency power generators which are permitted by the local Air Quality District (Bay Area Air Quality Management District = BAAQMD; or San Diego Air Pollution Control District = San Diego APCD).
5-4. If this Questionnaire is being completed for a lease renewal, and if any of the USTs/ASTs have leaked, please state the substance released, the media(s) impacted (e.g., soil, water, asphalt, etc.), the actions taken, and all remedial responses to the incident.
5-5. If this Questionnaire is being completed for a lease renewal, have USTs/ASTs been removed from the Project?
If YES, please provide any official closure letters or reports and supporting documentation (e.g., analytical test results, remediation report results, etc.).
5-6. For Lease renewals, are there any above or below ground pipelines on site used to transfer chemicals or wastes?
For new tenants, are installations of this type required for the planned operations? ☐ Yes ☐ No
If YES to either question in this section 5-6, please describe.
6.0 ASBESTOS CONTAINING BUILDING MATERIALS
E-4
Please be advised that an asbestos survey may have been performed at the Project. If provided, please review the information that identifies the locations of known asbestos containing material or presumed asbestos containing material. All personnel and appropriate subcontractors should be notified of the presence of these materials, and informed not to disturb these materials. Any activity that involves the disturbance or removal of these materials must be done by an appropriately trained individual/contractor.
7.0 OTHER REGULATORY PERMITS/REQUIREMENTS
7-1. Does the operation have or require an industrial wastewater permit to discharge into the local National Pollutant Discharge Elimination System (NPDES)? [Example: This applies when wastewater from equipment cleaning is routed through a pH neutralization system prior to discharge into the sanitary or lab sewer for certain pharmaceutical manufacturing wastewater; etc.] Permits are obtained from the regional sanitation district that is treating wastewater.
If so, please attach a copy of this permit or provide it later when it has been prepared.
7-2. [intentionally omitted]
7-3. NOTE: Please be advised that if you are involved in any tenant improvements that require a construction permit, you will be asked to provide the local city with a Hazardous Materials Inventory Statement (HMIS) to ensure that your hazardous chemicals fall within the applicable Fire Code fire control area limits for the applicable construction occupancy of the particular building. The HMIS will include much of the information listed in Section 2-2. Neither the landlord nor the landlord’s property management company expressly warrants that the inventory provided in Section 2-2 will necessarily meet the applicable fire code fire control area limits for building occupancy, especially in shared tenant occupancy situations. It is the responsibility of the tenant to ensure that a facility and site can legally handle the intended operations and hazardous materials desired/ needed for its operations, but the landlord is happy to assist in this determination when possible.
E-5
CERTIFICATION
I am familiar with the real property described in this questionnaire. By signing below, I represent and warrant that the answers to the above questions are complete and accurate to the best of my knowledge. I also understand that Lessor will rely on the completeness and accuracy of my answers in assessing any environmental liability risks associated with the Project.
Signature:
Name:
Title:
Date:
Telephone:
E-6
EXHIBIT F
Commencement Date Certificate
[SAMPLE ONLY – FORM TO BE COMPLETED BY LANDLORD AND EXECUTED BY TENANT ON OR AFTER COMMENCEMENT DATE]
LANDLORD:
TENANT:
LEASE DATE: ,
PREMISES:
Tenant hereby accepts the Premises as being in the condition required under the Lease.
Landlord: |
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[DO NOT SIGN] |
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F-1
EXHIBIT G
MEMORANDUM OF LEASE
THIS MEMORANDUM OF LEASE (this “Memorandum”) is made as of the day of (the “Effective Date”), by and between Centennial Valley Properties I, LLC, a Colorado limited liability company (“Landlord”) and Biodesix, Inc., a Delaware corporation (“Tenant”).
[Remainder of Page Left Intentionally Blank]
G-1
IN WITNESS WHEREOF, Landlord and Tenant have executed this Memorandum as of the date set forth above.
LANDLORD: |
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Dated:__________ |
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Centennial Valley Properties I, LLC, a Colorado limited liability company. |
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By: ▇▇▇▇▇▇▇ and Company, a Colorado corporation, its manager |
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STATE OF COLORADO )
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COUNTY OF )
The foregoing instrument was acknowledged before me the day of ______, 20__ by ________________________ as ___________ for Centennial Valley Properties I, LLC, a Colorado limited liability company.
Witness my hand and official seal.
My commission expires: _______
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TENANT: |
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STATE OF COLORADO )
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COUNTY OF )
The foregoing instrument was acknowledged before me the day of ______, 20__ by ________________________ as ___________ for Centennial Valley Properties I, LLC, a Colorado limited liability company.
Witness my hand and official seal.
My commission expires: _______
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G-2
EXHIBIT H
Option to Extend Addendum
H-1
(10) days after the expiration of such twenty (20) day period, the two (2) appraisers shall select a third appraiser meeting the aforementioned criteria. Once the third appraiser (i.e. arbitrator) has been selected as provided for above, then, as soon thereafter as practicable but in any case, within fourteen (14) days, the arbitrator shall make his determination of which of the two (2) Estimates most closely reflects the Prevailing Market Rate and such Estimate shall be binding on both Landlord and Tenant as the Base Rent rate for the Premises, and the parties shall enter into the Renewal Amendment as described and defined above. If the arbitrator believes that expert advice would materially assist him, he may retain one or more qualified persons to provide such expert advice. The parties shall share equally in the costs of the arbitrator and of any experts retained by the arbitrator. Any fees of any appraiser, counsel or experts engaged directly by Landlord or Tenant, however, shall be borne by the party retaining such appraiser, counsel or expert.
H-2
EXHIBIT I
WORK LETTER
This “Work Letter” is attached to and made a part of the Lease Agreement (Single Tenant – NNN) (the “Lease”) by and between Centennial Valley Properties I, LLC, a Colorado limited liability company (“Landlord”), and Biodesix, Inc., a Delaware corporation (“Tenant”) for the Premises as defined in the Lease. Capitalized terms not otherwise defined in this Work Letter shall have the meanings given to such terms in the Lease.
This Work Letter sets forth the rights and obligations of Landlord and Tenant with respect to the improvements to be performed in and at the Premises for Tenant’s use. It is agreed that construction of the Tenant Work (as defined in Section 4.1) shall be completed in accordance with the Approved Construction Drawings (as defined in Section 3.3) at Tenant’s sole cost and expense, subject to the Allowance as defined in Section 2.1) and disbursed by Landlord pursuant to the terms of this Work Letter.
SECTION 1
LANDLORD WORK; ALLOWANCE
1.1 Landlord’s Delivery. Except as otherwise specified in Section 1.2 below, Landlord shall have no obligation for construction work or improvements in the Premises. Landlord’s contribution to the construction and improvements consists only of (a) delivery of possession of the Premises to Tenant in the condition provided for under the Lease, and (b) disbursement to Tenant of the Allowance in accordance with the terms and conditions of this Work Letter.
1.2 Landlord Work. Simultaneously with the construction of the Tenant Work, Landlord shall, at Landlord’s sole cost and expense, perform the work substantially in accordance with permittable construction drawings based on the pricing plans set described on Schedule 1 attached hereto (collectively, the “Landlord Work”). As provided for in the above-referenced pricing plan, the Landlord Work does not include exterior signage shown on the pricing plan. Landlord shall perform the construction of the Landlord Work in a good and workmanlike manner consistent with first class standards and in accordance with all Applicable Laws. Landlord shall use commercially reasonable efforts to achieve substantial completion of the Landlord Work on or before the Commencement Date. Landlord shall assign to Tenant any guarantees or warrantees procured by Landlord from contractors, subcontractors, or materialmen relating to any Landlord Work on items that Tenant is required to maintain under the Lease. By execution of the Lease, Tenant acknowledges receipt of a copy of the pricing plans described in Schedule 1.
1.3 Punchlist. Upon Substantial Completion of the Landlord Work, Landlord and Tenant shall jointly inspect the Landlord Work to develop a list of items under Section 1.2 that are not complete (the “Punchlist Items”). The existence of the punchlist (and completion of the Punchlist Items thereon) shall not delay the Commencement Date and shall not affect Tenant’s obligation pay Rent in accordance with the provisions of the Lease. Landlord shall complete the Punchlist Items with reasonable diligence. Notwithstanding Landlord’s obligation to complete the Punchlist Items, Tenant shall be responsible, at Tenant’s sole cost and expense, for repairing or replacing any portion of the Landlord Work damaged by Tenant or Tenant's Construction Agents before or after Landlord has completed the Landlord Work, and such items may not be included as Punchlist Items.
1.4 Landlord’s Rights. Landlord shall have the right to approve any contractors, subcontractors, and engineers used by Tenant in connection with the Tenant Work as provided for herein. Further, Landlord shall have the right to post and maintain any notices of non-responsibility in or about the Premises during the performance of the Tenant Work.
1.5 Coordination of Work. Landlord retains the right to access the Premises during the Construction Period in order to complete the Landlord Work. Landlord and Tenant hereby agree to fairly allocate the usage of the Premises during the concurrent performance of Landlord Work and Tenant Work and to cooperate with such overlapping work in the Premises and the Building. Furthermore, Landlord and Tenant shall, and shall cause all of their respective Construction Agents (as defined in Section 4.1(b)) to, coordinate their respective construction activities in connection with the Landlord Work and the Tenant Work, including the introduction and storage of their materials and equipment and the execution of their work and shall coordinate such work as the circumstances may require to effect timely completion of the Landlord Work and Tenant Work.
I-1
SECTION 2
ALLOWANCE ITEMS; DISBURSEMENT
2.1 Allowance.
2.2 Disbursement of the Allowance.
I-2
SECTION 3
CONSTRUCTION DRAWINGS
3.1 Selection of Architect, Contractor and Engineer/Construction Drawings. Tenant shall retain DLR Group (the “Architect”) to prepare the Construction Drawings. Tenant shall retain Swinerton Construction (the “Contractor”) as Tenant’s general contractor. Tenant shall retain the engineering consultants designated by Landlord (the “Engineer”) to prepare all plans and engineering working drawings relating to the structural, mechanical, electrical, plumbing, HVAC, life safety, and sprinkler work in the Premises, which work is not part of the Base Building. Tenant may retain a project manager to oversee the Tenant Work (the “Project Manager”), the cost of which shall be included in the Allowance, subject to Section 2 above. Landlord may, at its sole cost and expense, retain a project manager to oversee
I-3
the Tenant Work to ensure that the Tenant Work is performed in compliance with Laws, and the terms and conditions of the Lease and this Work Letter (including, without limitation, compliance with the Approved Construction Drawings and all Schedules attached hereto). The plans and drawings to be prepared by Architect and the Engineers hereunder in connection with the Tenant Work (which plans and drawings may also include some portion of the Landlord Work) shall be known collectively as the “Construction Drawings”. All Construction Drawings shall be subject to Landlord's approval, which approval shall not be unreasonably withheld, conditioned, or delayed. Landlord shall advise Tenant, in writing, within ten (10) business days after Landlord’s receipt of the Construction Drawings if the same is unsatisfactory or incomplete in any respect (and specify in such written notice the unsatisfactory items). Landlord's failure to respond within ten (10) business days after its receipt of the Construction Drawings shall be deemed as Landlord's approval. Tenant and Architect shall verify, in the field, the dimensions and conditions as shown on the relevant portions of the Base Building plans, and Tenant and Architect shall be solely responsible for the same, and Landlord shall have no responsibility in connection therewith. Landlord's review of the Construction Drawings shall be for its sole purpose and shall not imply Landlord's review of the same, or obligate Landlord to review the same, for quality, design, compliance with Laws, or other like matters. Accordingly, notwithstanding that any Construction Drawings are reviewed by Landlord or its space planner, architect, engineers, and consultants and notwithstanding any advice or assistance which may be rendered to Tenant by Landlord or Landlord's space planner, architect, engineers, and consultants, Landlord shall have no liability whatsoever in connection therewith and shall not be responsible for any omissions or errors contained in the Construction Drawings, and Tenant’s waiver and indemnity set forth in the Lease shall specifically apply to the Construction Drawings. Tenant shall be fully responsible and liable for the sufficiently of the design to conform to all Applicable Laws and as necessary to accommodate the use and storage of Tenant’s Hazardous Materials.
3.2 Final Construction Drawings. Tenant shall supply the Architect and the Engineer with a complete listing of standard and non-standard equipment and specifications, including, without limitation, HVAC requirements, electrical requirements, and special electrical receptacle requirements for the Premises to enable the Architect and the Engineer to complete the Final Construction Drawings in the manner as set forth below. Tenant shall promptly cause the Architect and the Engineer to complete the architectural and engineering drawings for the Tenant Work, and Architect shall compile a fully-coordinated set of architectural, structural (if required), mechanical, electrical, and plumbing working drawings in a form which is complete to allow subcontractors to bid on the work and to obtain all applicable permits (collectively, the “Final Construction Drawings”) and shall submit the same to Landlord for Landlord's approval, which approval shall not be unreasonably withheld, conditioned, or delayed. Tenant shall supply Landlord with two (2) copies signed by Tenant of such Final Construction Drawings. Landlord shall advise Tenant, in writing, within ten (10) business days after Landlord's receipt of the Final Construction Drawings for the Tenant Work if the same is unsatisfactory or incomplete in any respect (and specify in such written notice the unsatisfactory items). If Landlord so advises Tenant, Tenant shall promptly revise the Final Construction Drawings in accordance with such review and any disapproval of Landlord in connection therewith. Landlord's failure to respond within ten
(10) business days after its receipt of the Final Construction Drawings shall be deemed as Landlord's approval.
3.3 Approved Construction Drawings. The Final Construction Drawings with the changes required by Landlord pursuant to Section 3.2 above, if any, (the “Approved Construction Drawings”) shall be submitted by Tenant to the appropriate municipal authorities for all applicable building permits. Tenant hereby agrees that neither Landlord nor Landlord's consultants shall be responsible for obtaining any building permit or certificate of occupancy for the Premises and that obtaining the same shall be Tenant's sole responsibility; provided, however, that Landlord shall cooperate, at no cost to Landlord, with Tenant in executing permit applications and performing other ministerial acts necessary to enable Tenant to obtain any such permit or certificate of occupancy. No changes, modifications, or alterations in the Approved Construction Drawings may be made without the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned, or delayed.
3.4 Plan Review Costs. Tenant shall reimburse Landlord for all actual third-party costs and expenses (“Plan Review Costs”) incurred by Landlord for the review and approval of any structural work included in the Construction Drawings, Final Construction Drawings, and any other proposed plans and specifications relating to structural aspects of the Tenant Work. Tenant shall pay such Plan Review Costs to Landlord within ten (10) business days after receipt of Landlord's invoices therefor.
I-4
SECTION 4
CONSTRUCTION OF THE TENANT IMPROVEMENTS
4.1 Tenant’s Selection of Contractors.
4.2 Construction of the Tenant Work by Tenant’s Construction Agents.
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SECTION 5
CONSTRUCTION PERIOD
5.1 Construction Period. During the Construction Period, Landlord shall adopt a construction schedule consistent with Tenant's construction schedule, and Tenant and Landlord and their contractors shall work in harmony and not interfere with or delay the performance of Tenant Work or Landlord Work, or with the work of any other tenant or occupant of the Building. All work performed by Tenant or Tenant's contractors shall be performed in a good and workmanlike manner consistent with first class standards and in accordance with all Laws, and subject to such rules and regulations as Landlord shall reasonably prescribe.
5.2 Tenant Responsibility. Tenant assumes full responsibility for all acts of Tenant, the Tenant Related Parties, and Tenant’s Construction Agents and for all property, equipment, materials, tools, or machinery placed or stored in the Premises by Tenant, Tenant Related Parties, or Tenant's Construction Agents, except as relates Losses arising from the negligence or willful misconduct of Landlord or Landlord's contractors, subcontractors, or materialmen. Tenant shall promptly repair or cause to be repaired, at its sole cost and expense, all damage caused to the Premises or the Property by Tenant or any of the Tenant Related Parties or Tenant's Construction Agents. Tenant shall indemnify and hold Landlord and Landlord Indemnified Parties harmless from and against any and all Losses of any nature occurring during the Construction Period, including damage or delays to completion of the Landlord Work as a result of the actions or omissions of Tenant, Tenant Related Parties, or Tenant’s Construction Agents.
SECTION 6
GENERAL PROVISIONS
6.1 Tenant Representative. Tenant has designated ▇▇▇▇ ▇▇▇▇▇▇▇ as its sole representative with respect to the matters set forth in this Work Letter, who shall have full authority and responsibility to act on behalf of the Tenant as required in this Work Letter, until further written notice to Landlord.
6.2 Landlord Representative. Landlord has designated ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and/or ▇▇▇▇ ▇▇▇▇▇▇ as its representatives with respect to the matters set forth in this Work Letter, who, until further notice to Tenant, shall have full authority and responsibility to act on behalf of the Landlord as required in this Work Letter.
6.3 “As-Built” Drawings and Specifications. Within thirty (30) days after the completion of the Tenant Work, Tenant shall deliver to Landlord, at Tenant's sole cost and expense, a CADD file in a format reasonably acceptable to Landlord and a set of mylar reproducibles of all "as-built" drawings and specifications of the Premises (reflecting all field changes and including, without limitation, architectural, structural, mechanical, and electrical drawings and specifications) prepared by all of Tenant’s Construction Agents.
6.4 Force and Effect. The terms and conditions of this Work Letter supplement the Lease and shall be construed to be a part of the Lease and are incorporated in the Lease. Without limiting the generality of the foregoing, any default by any party hereunder shall have the same force and effect as a default under the Lease. Should any inconsistency arise between this Work Letter and the Lease as to the specific matters which are the subject of this Work Letter, the terms and conditions of this Work Letter shall control.
6.5 Applicability. This Exhibit shall not be deemed applicable to any additional space added to the Premises at any time or from time to time, whether by any options under the Lease or otherwise, or to any portion of the original Premises or any additions to the Premises in the event of a renewal or extension of the original Term of the Lease, whether by any options under the Lease or otherwise, unless expressly so provided in the Lease or any amendment or
I-6
supplement to the Lease.
I-7
SCHEDULE 1 TO EXHIBIT C (WORK LETTER) LANDLORD WORK
▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇ Renovation Pricing Set – 01/27/2022 prepared by DLR Group reference No. ▇▇-▇▇▇▇▇-▇▇ Pricing Set Sheet List
0.1 |
|
Cover Sheet |
1.1 |
|
Demolition Plan |
1.2 |
|
Demolition Roof Plan |
1.3 |
|
Demolition Elevations |
1.4 |
|
New Plan |
1.6 |
|
New Elevations |
1.7 |
|
New Elevations – Rendered |
1.8 |
|
Perspective Views & Materials |
S1.1 |
|
Structural Foundation Demo Plan |
S1.2 |
|
Structural Framing Plan |
SD 1.1 |
|
Structural Foundation Plan |
SD 1.2 |
|
Structural Framing Plan |
Schedule 1 – I-1
SCHEDULE 2 TO EXHIBIT C (WORK LETTER) INSURANCE REQUIREMENTS
SECTION 1. General. The Contractor shall procure and maintain in effect until final completion of the Tenant Work, or such longer periods as may be required as set forth in the Work Letter, the Lease or in any other agreements or contracts governing the construction of the Tenant Work (collectively, the “Contract Documents”), the insurance coverages described below.
Parties; and
Schedule 2 I-1
SECTION 2. Subcontractors.
SECTION 3. Design. The Architect, Engineer, Contractor, or any subcontractor who performs professional design services shall procure and maintain Professional Liability Errors and Omissions Insurance which shall be provided in accordance with the following:
SECTION 4. Terms and Conditions.
Schedule 2 I-2
Schedule 2 I-3