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Exhibit 10.30
SUBLEASE AGREEMENT
This SUBLEASE AGREEMENT ("Sublease") is made and entered into
as of January 31, 1997 by and between GENSIA, INC., a Delaware corporation
("Sublandlord") and AMYLIN PHARMACEUTICALS, INC., a Delaware corporation
("Subtenant").
WHEREAS, ▇▇▇▇ PROPERTY COMPANY, a California general
partnership, as landlord ("Landlord"), and Sublandlord, as tenant, are parties
to a certain Lease Agreement dated as of December 21, 1993 ("Master Lease")
whereby Landlord leased to Tenant the buildings (collectively, the "Building")
located at 9360 and ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Master
Premises"), as more particularly described in the Master Lease, upon the terms
and conditions contained therein. All capitalized terms used herein shall have
the same meaning ascribed to them in the Master Lease unless otherwise defined
herein. A copy of those portions of the Master Lease which are applicable to
this Sublease is attached hereto as Exhibit "A" and made a part hereof.
Hereinafter, the term "Master Lease" shall refer to only those portions of the
Master Lease which are intended to be applicable to this Sublease, as attached
hereto as Exhibit "A". Sublandlord is vested with the leasehold estate
described in the Master Lease.
WHEREAS, Sublandlord and Subtenant are desirous of entering
into a sublease of that portion of the Master Premises so indicated on the
demising plan annexed hereto as Exhibit "B" and made a part hereof ("Sublease
Premises") on the terms and conditions hereafter set forth.
NOW, THEREFORE, in consideration of the mutual
covenants herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
mutually covenant and agree as follows:
1. Demise. Sublandlord hereby subleases and demises to
Subtenant and Subtenant hereby hires and subleases from Sublandlord the
Sublease Premises consisting of: approximately 11,800 rentable square feet of
office space located on the first floor of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (the "9360
Premises"); and approximately 15,734 rentable square feet of office and
laboratory space located on the first and second floors of ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ (the "9390 Premises"), upon and subject to the terms, covenants and
conditions hereinafter set forth. The parties stipulate that the square
footage of the Sublease Premise shall be as specified above.
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2. Lease Term.
(a) Lease Term. The term of this Sublease
("Term") shall commence on the earlier of (i) February 11, 1997, as to the 9360
Premises, and the 9390 Premises, or (ii) as to each of the 9360 Premises and
the 9390 Premises, the date upon which Subtenant, or any person occupying any
of said Premises with Subtenant's permission, commences business operations
from the such Premises (in each such case, the "Sublease Commencement Date")
and end, unless sooner terminated or extended as provided herein, as to the
entirety of the Sublease Premises, on June 30, 1998 ("Sublease Expiration
Date").
(b) Options to Extend. Notwithstanding the
provisions of Section 2(a) to the contrary and provided Subtenant is not in
default under this Sublease at the time of the exercise thereof or at the time
of its occupancy pursuant thereto, Subtenant shall have an aggregate of three
(3) options to extend this Sublease (each, an "Option to Extend") as to the
Sublease Premises. Subtenant shall have two (2) consecutive Options to Extend
with respect to the 9360 Premises for an additional six (6) month period each.
Subtenant shall have one (1) Option to Extend with respect to the 9390 Premises
for an additional three (3) month period. Each Option to Extend shall be
exercisable by Subtenant upon delivery of prior written notice (the "Exercise
Notice") thereof to Sublandlord. Each Exercise Notice shall be given not later
than ninety (90) days prior to the then-expiration of the Term applicable to
the relevant portion of the Sublease Premises. In the event Subtenant shall
exercise an Option to Extend pursuant to the provisions set forth herein, the
Term of this Sublease shall be extended by the period applicable to such Option
to Extend and the Sublease Expiration Date as to such portion of the Sublease
Premises shall be deemed to be the expiration date of such extended Term of
this Sublease. Such extended Term shall be on all the terms and conditions of
this Sublease, as applicable, including the rental rate applicable to the
portion of the Sublease Premises for which occupancy is so extended. As to the
9360 Premises, Subtenant shall have exercised the first Option to Extend as a
condition to its exercise of the second Option to Extend.
3. Use. The Sublease Premises shall be used and
occupied by Subtenant solely for office and laboratory uses in compliance with
the Master Lease and for no other purpose.
4. Subrental.
(a) Base Rental. Beginning with the Sublease
Commencement Date and thereafter during the Term of this Sublease and ending on
the Sublease Expiration Date, Subtenant shall pay to Sublandlord monthly
installments of base rent ("Base Rental") with respect to the Sublease
Premises, as follows:
(i) With respect to the 9360 Premises,
Base Rental of $17,700; and
(ii) With respect to the 9390 Premises,
Base Rental of $55,069.
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The first monthly installment of Base Rental shall be paid by Subtenant upon
the execution of this Sublease. Base Rental and additional rent shall
hereinafter be collectively referred to as "Rent."
(b) Prorations. If the Sublease Commencement
Date is not the first (1st) day of a month, or if the Sublease Expiration Date
is not the last day of a month, a prorated installment of monthly Base Rental
based on a thirty (30) day month shall be paid for the fractional month during
which the Term commenced or terminated.
(c) Additional Rent. Beginning with the Sublease
Commencement Date and continuing to the Sublease Expiration Date, Subtenant
shall pay to Sublandlord as additional rent for this subletting the cost of all
additional expenses, costs and charges payable to Landlord or to third party
providers by Sublandlord which are not Normal Operating Expenses (as defined
below) for the Building and result from Subtenant's use of the Sublease
Premises. The term "Normal Operating Expenses" shall mean the full cost of all
operating expenses applicable to the Sublease Premises (including Building
maintenance, common area expenses, insurance premiums for casualty insurance
maintained by Sublandlord with respect to the Building (but excluding any
insurance coverages for Subtenant's personal property), security and janitorial
services provided by Sublandlord), real estate taxes, and utilities (natural
gas, water, and electricity) which are allocable to Subtenant's normal and
customary use of the Sublease Premises in accordance with this Sublease.
Normal Operating Expenses shall not include Subtenant's utility charges for
usage which is in excess of reasonably expected normal quantities for
Subtenant's use and occupancy of the Sublease Premises, as determined by
Sublandlord in its sole but reasonable discretion, and other excess or
non-standard costs, expenses or charges incurred with respect to the
Subtenant's use or occupancy of the Sublease Premises which are incurred or
requested by Subtenant. Subtenant shall not be responsible for payment of any
Impositions (as defined in Paragraph 9(a) of the Master Lease) which are part
of the Normal Operating Expenses or which are not otherwise made the
responsibility of Subtenant pursuant to this Sublease.
(d) Payment of Rent. Except as otherwise
specifically provided in this Sublease, Rent shall be payable in lawful money
without demand, and without offset, counterclaim, or setoff in monthly
installments, in advance, on the first day of each and every month during the
Term of this Sublease. All of said Rent is to be paid to Sublandlord at its
office at the address set forth in Section 13 herein, or at such other place or
to such agent and at such place as Sublandlord may designate by notice to
Subtenant. Any additional rent payable on account of items which are not
payable monthly by Sublandlord to Landlord under the Master Lease is to be paid
to Sublandlord as and when such items are payable by Sublandlord to third
parties or to Landlord under the Master Lease unless a different time for
payment is elsewhere stated herein. Upon written request therefor, Sublandlord
agrees to provide Subtenant with copies of any statements or invoices received
by Sublandlord from Landlord pursuant to the terms of the Master Lease.
(e) Late Charge. Subtenant shall pay to
Sublandlord an administrative charge at an annual interest rate equal to the
Prime Rate plus three percent (3%) ("Interest Rate") on all amounts of Rent
payable hereunder which are not paid within three (3) business days of the date
on which such payment is due, such charge to accrue from the date upon which
such amount was due until paid.
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(f) Tenant Improvement Credit. Subtenant shall
receive a credit in the amount of $20,000 (the "T/I Credit") against Base
Rental due for the Sublease Premises towards Subtenant's installation of
certain tenant improvements requested by Subtenant to be made to the Sublease
Premises. The T/I Credit shall be credited monthly against Base Rental for the
Sublease Premises in the amount of $1,111 per month. To be eligible for the
T/I Credit, Subtenant shall have installed tenant improvements to the Sublease
Premises during the initial Term of the Sublease, having a cost equal to or
greater than the amount of the T/I Credit, as reasonably verified by
Sublandlord. Subtenant shall have no right to remove any such tenant
improvements upon the expiration of the Sublease and the grant of the T/I
Credit does not constitute Sublandlord's consent to tenant improvements
proposed to be installed in the Sublease Premises by Subtenant, such approval
to be governed by all other provisions of this Sublease applicable to
alterations in the Sublease Premises.
5. Security Deposit. Concurrently with the execution of
this Sublease, Subtenant shall deposit with Sublandlord the sum of Seventeen
Thousand Seven Hundred Dollars ($17,700) with respect to the 9360 Premises and
Fifty-Five Thousand Sixty-Nine Dollars ($55,069) as to the 9390 Premises
(collectively, the "Deposit"), which shall be held by Sublandlord as security
for the full and faithful performance by Subtenant of its covenants and
obligations under this Sublease. The Deposit is not an advance Rent deposit,
an advance payment of any other kind, or a measure of Sublandlord's damage in
case of Subtenant's default. If Subtenant defaults in the full and timely
performance of any or all of Subtenant's covenants and obligations set forth in
this Sublease, then Sublandlord may, from time to time, without waiving any
other remedy available to Sublandlord, use the Deposit, or any portion of it,
to the extent necessary to cure or remedy the default or to compensate
Sublandlord for all or a part of the damages sustained by Sublandlord resulting
from Subtenant's default. Subtenant shall immediately pay to Sublandlord
within five (5) days following demand, the amount so applied in order to
restore the Deposit to its original amount, and Subtenant's failure to
immediately do so shall constitute a default under this Sublease. If Subtenant
is not in default with respect to the covenants and obligations set forth in
this Sublease at the expiration or earlier termination of the Sublease,
Sublandlord shall return the Deposit to Subtenant after the expiration or
earlier termination of this Sublease in accordance with the provisions of
California Civil Code Section 1950.7. Sublandlord's obligations with respect
to the Deposit are those of a debtor and not a trustee. Sublandlord shall not
be required to maintain the Deposit separate and apart from Sublandlord's
general or other funds and Sublandlord may commingle the Deposit with any of
Sublandlord's general or other funds. Subtenant shall not at any time be
entitled to interest on the Deposit. The Deposit shall be allocated between
the 9360 Premises and the 9390 Premises in the event concurrent expiration of
the Term of this Sublease does not occur with respect to each such portion of
the Sublease Premises.
6. Signage. Subtenant shall have no right to maintain
Subtenant identification signs in any location in, on, or about the Premises
other than a listing in the lobby directory for the Building and an
identification sign located at Tenant's respective entries to the 9360 Premises
and the 9390 Premises, the size, appearance and location of such signs to be
subject to Sublandlord's prior approval. The cost of such signs, including the
installation, maintenance and removal thereof, shall be at Subtenant's sole
cost and expense. If Subtenant fails to maintain its Sublease Premises sign,
or if Subtenant fails to remove same upon the expiration or earlier termination
of this Sublease and repair any damage caused by such removal,
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Sublandlord may do so at Subtenant's expense and Subtenant shall reimburse
Sublandlord for all actual costs incurred by Sublandlord to effect such
removal.
7. Parking. At no additional rent or charge, Subtenant
shall have the right, during the Term of this Sublease, to use on a
non-reserved basis up to forty-seven (47) parking spaces with respect to the
9360 Premises and sixty-three (63) parking spaces with respect to the 9390
Premises in the parking facilities of the Building. All such parking
privileges shall be subject to the terms and conditions set forth in the Master
Lease.
8. Incorporation of Terms of Master Lease.
(a) This Sublease is subject and subordinate to
the Master Lease. Subject to the modifications set forth in this Sublease, the
terms of the Master Lease are incorporated herein by reference, and shall, as
between Sublandlord and Subtenant (as if they were "Landlord" and "Tenant,"
respectively, under the Master Lease) constitute the terms of this Sublease
except to the extent that they are inapplicable to, inconsistent with, or
modified by, the terms of this Sublease. Notwithstanding the foregoing, to the
extent provisions of the Master Lease are unique and personal to Sublandlord's
interest in the Building pursuant to the Master Lease or are indicated on the
attached Exhibit "A" as intentionally omitted from the Master Lease, Subtenant
shall not be required to comply with such provisions. Provisions which are
personal and unique to Sublandlord under the Master Lease include, but are not
limited to, Paragraphs 17, 18 and 19 of the Master Lease. In the event of any
inconsistencies between the terms and provisions of the Master Lease and the
terms and provisions of this Sublease, the terms and provisions of this
Sublease shall govern. Subtenant acknowledges that it has reviewed the Master
Lease and is familiar with the terms and conditions thereof.
(b) For the purposes of incorporation herein, the
terms of the Master Lease are subject to the following additional
modifications:
(i) In all provisions of the Master
Lease (under the terms thereof and without regard to modifications
thereof for purposes of incorporation into this Sublease) requiring
the approval or consent of Landlord, Subtenant shall be required to
obtain the approval or consent of both Sublandlord and Landlord.
(ii) In all provisions of the Master
Lease requiring Tenant to submit, exhibit to, supply or provide
Landlord with evidence, certificates, or any other matter or thing,
including, without limitation, the provisions of Sections 10(c) and
10(f) thereof, Subtenant shall be required to submit, exhibit to,
supply or provide, as the case may be, the same to both Landlord and
Sublandlord. In any such instance, Sublandlord shall determine if
such evidence, certificate or other matter or thing shall be
satisfactory.
(iii) In the event of any taking by
eminent domain or casualty to the Sublease Premises such that
Subtenant is deprived of the use and occupancy of greater than fifty
percent (50%) of the Sublease Premises for a period in excess of sixty
(60) days, Subtenant and Sublandlord shall each have the right to
terminate this Sublease upon not less than thirty (30) days written
notice to the other. In the event of any such taking by eminent
domain or casualty such that Subtenant is deprived of fifty percent
(50%) or less of the use and occupancy of the Sublease
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Premises, or in the event Subtenant elects to continue occupancy of
the remaining portion of the Sublease Premises after the occurrence of
a taking or casualty giving Subtenant a right to terminate this
Sublease, the Rent shall be proportionally reduced for the portion of
the Term during which Subtenant is prevented from using and occupying
the damaged or taken portion of the Sublease Premises. Sublandlord
shall have no obligation to restore or rebuild any portion of the
Sublease Premises after any destruction or taking by eminent domain,
and Subtenant shall have no rights to any portion of the award in any
eminent domain proceeding affecting the Sublease Premises.
(iv) Subtenant shall not be required
to comply with the following provisions of the Master Lease:
(A) Paragraph 3(c), without,
however, limiting in any way the provisions of Section 15 of this
Sublease.
(B) Paragraph 3(e).
(C) Paragraph 9(b) to the extent it
applies to Escrow Payments imposed on Sublandlord as a result of a Monetary
Event of Default by Sublandlord under the Master Lease which is not the result
of a default by Subtenant under this Sublease, however Subtenenat shall, in all
events, be responsible for Escrow Charges comprising real estate taxes on the
Sublease Premises imposed as a result of alterations to the Sublease Premises
made by, or for, Subtenant during the Term.
(D) Paragraph 10(i).
(E) Paragraph 12(a), to the extent
it requires Subtenant to repair or maintain Building Systems Equipment, it
being expressly acknowledged by Subtenant hereunder that it has no right to
repair or maintain any Building Systems Equipment.
(F) Paragraph 15(a), to the extent
it requires indemnity from Subtenant for the acts or omissions of any Person
other than Subtenant, its agents, employees, representatives, parents,
affiliates or subsidiaries, or any Person acting on behalf of, or with the
permission of, or at the sufferance of, Subtenant and only in connection with
events on, about or arising from the Sublease Premises.
(c) During the Term, Subtenant shall not be
required to maintain casualty insurance policies and coverages with respect to
the Sublease Premises and Subtenant shall be named as an additional insured
under such policies maintained by Sublandlord (to the extent of Subtenant's
interest in the Sublease Premises), evidence of such coverage to be in the form
of a certificate of insurance provided by Sublandlord to Subtenant; provided,
however, such policies and coverages maintained by Sublandlord with respect to
the Building and the Sublease Premises shall not include coverage for
Subtenant's personal property and Subtenant, at its sole cost and expense,
shall maintain such policies and coverages with respect to its personal
property as it may elect. During the Term, Subtenant shall maintain a policy
of comprehensive general liability insurance with respect to its occupancy of,
and activities on, the Sublease Premises and related common areas, which
coverage shall be subject to any required
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waivers of subrogation as are described under Paragraph 16 of the Master Lease
and shall have a minimum policy limit of $4,000,000 and shall otherwise meet
the requirements of the Master Lease for such insurance coverage. All such
policies shall name Sublandlord, Landlord and any other party required to be so
named under the Master Lease as additional insureds thereunder and shall be
with carriers reasonably acceptable to Sublandlord and, in all events, in
accordance with the requirements of the Master Lease except as otherwise
provided hereinabove. In the event Subtenant elects to carry its own policies
of casualty insurance with respect to the Sublease Premises, all such policies
shall name Sublandlord as an additional insured thereunder.
(d) Sublandlord and Subtenant acknowledge that
this Sublease is of short duration in relation to the term of the Master Lease
and, as a result, the parties do not intend that Subtenant shall be required to
comply with any obligations or requirements under the Master Lease (except
those which are specifically referenced as an obligation of Subtenant under
this Sublease) which are of a character or nature as is reasonably determined
to be inconsistent with the scope and Term of occupancy of the Sublease
Premises by Subtenant under this Sublease. In the event of a dispute regarding
Subtenant's obligation to comply with any such obligations or requirements of
the Master Lease, the determination of the applicability of such obligations or
requirements shall be made by Sublandlord and Subtenant in good faith with
reference to current statutory and case law in California interpreting the
relative obligations of a landlord and tenant in circumstances similar to the
Sublease with respect to the nature of the obligation for which compliance is
sought. In the event Sublandlord and Subtenant are unable to reasonably agree
on the scope of responsibility of such obligation for which compliance is
sought under the Master Lease, each party shall refer the matter to its most
senior executive who shall jointly attempt to resolve such issue not later than
five (5) business days after such reference. In the event such reference is
unsuccessful, each party may exercise its rights and remedies under law with
respect to a final determination of such dispute.
9. Subtenant's Obligations. Subtenant covenants and
agrees that all obligations of Sublandlord under the Master Lease shall be done
or performed by Subtenant with respect to the Sublease Premises, except as
otherwise provided by this Sublease, and Subtenant's obligations shall run to
Sublandlord and Landlord as Sublandlord may determine to be appropriate or be
required by the respective interests of Sublandlord and Landlord. Subtenant
agrees to indemnify Sublandlord, and hold it harmless, from and against any and
all claims, damages, losses, expenses and liabilities (including reasonable
attorneys' fees) incurred as a result of the non-performance, non-observance or
non- payment of any of Sublandlord's obligations under the Master Lease which,
as a result of this Sublease, became an obligation of Subtenant. If Subtenant
makes any payment to Sublandlord pursuant to this indemnity, Subtenant shall be
subrogated to the rights of Sublandlord concerning said payment. Subtenant
shall not do, nor permit to be done, any act or thing which is, or with notice
or the passage of time would be, a default under this Sublease or the Master
Lease.
10. Sublandlord's Obligations. Sublandlord covenants and
agrees that all obligations of Sublandlord under the Master Lease, other than
those which are to be done or performed by Subtenant, with respect to the
Sublease Premises shall be done or performed by Sublandlord. Sublandlord
agrees that Subtenant shall be entitled to receive all services and repairs to
be provided by Landlord to Sublandlord under the Master Lease. Subtenant shall
look solely to Landlord for all such services and shall not, under any
circumstances, seek nor require Sublandlord to perform any of such services,
nor shall Subtenant make any claim upon
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Sublandlord for any damages which may arise by reason of Landlord's default
under the Master Lease; provided, however, Sublandlord shall provide all
necessary assistance and cooperation to Subtenant (at no material cost or
liability to Sublandlord) to enforce Sublandlord's rights under the Master
Lease to compel performance by Landlord with respect to such services or
repairs to which Subtenant is entitled. Any condition resulting from a default
by Landlord shall not constitute as between Sublandlord and Subtenant an
eviction, actual or constructive, of Subtenant and no such default shall excuse
Subtenant from the performance or observance of any of its obligations to be
performed or observed under this Sublease, or entitle Subtenant to receive any
reduction in or abatement of the Rent provided for in this Sublease unless, and
to the extent, Sublandlord is excused from performance, or entitled to a
reduction or abatement of its rental obligations to Landlord under the Master
Lease also. In furtherance of the foregoing, Subtenant does hereby waive any
cause of action and any right to bring any action against Sublandlord by reason
of any act or omission of Landlord under the Master Lease, subject to the right
of assistance and cooperation from Sublandlord described above. Sublandlord
covenants and agrees with Subtenant that Sublandlord will pay all fixed rent
and additional rent payable by Sublandlord pursuant to the Master Lease to the
extent that failure to perform the same would adversely affect Subtenant's use
or occupancy of the Sublease Premises. Sublandlord shall extend all reasonable
cooperation to Subtenant (at no material cost or liability to Sublandlord) to
enable Subtenant to receive the benefits under this Sublease, as the same are
dependent upon performance under the Master Lease.
11. Default by Subtenant. In the event Subtenant shall
be in default of any covenant of, or shall fail to honor any obligation under,
this Sublease, Sublandlord shall have available to it against Subtenant all of
the remedies available (a) to Landlord under the Master Lease in the event of a
similar default on the part of Sublandlord thereunder or (b) at law.
12. Quiet Enjoyment. So long as Subtenant pays all of
the Rent due hereunder and performs all of Subtenant's other obligations
hereunder, Sublandlord shall do nothing to affect Subtenant's right to
peaceably and quietly have, hold and enjoy the Sublease Premises.
13. Notices. Anything contained in any provision of this
Sublease to the contrary notwithstanding, Subtenant agrees, with respect to the
Sublease Premises, to comply with and remedy any default in this Sublease or
the Master Lease which is Subtenant's obligation to cure, within the period
allowed to Sublandlord under the Master Lease, even if such time period is
shorter than the period otherwise allowed therein due to the fact that notice
of default from Sublandlord to Subtenant is given after the corresponding
notice of default from Landlord to Sublandlord. Sublandlord agrees to forward
to Subtenant, promptly upon receipt thereof by Sublandlord, a copy of each
notice of default received by Sublandlord in its capacity as Tenant under the
Master Lease. Subtenant agrees to forward to Sublandlord, promptly upon
receipt thereof, copies of any notices received by Subtenant from Landlord or
from any governmental authorities. All notices, demands and requests shall be
in writing and shall be sent either by hand delivery or by a nationally
recognized overnight courier service (e.g., Federal Express), in either case
return receipt requested, to the address of the appropriate party. Notices,
demands and requests so sent shall be deemed given when the same are received.
Notices to Sublandlord shall be sent to the attention of:
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Gensia, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
with a copy to:
Pillsbury Madison & Sutro, LLP
▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Notices to Subtenant shall be sent to the attention
of:
Amylin Pharmaceuticals, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
V.P. and General Counsel
With a copy to:
Cooley, Godward, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
14. Broker. Sublandlord and Subtenant represent and
warrant to each other that no brokers other than ▇▇▇▇ ▇▇▇▇▇▇▇ & Company were
involved in connection with the negotiation or consummation of this Sublease.
Each party agrees to indemnify the other, and hold it harmless, from and
against any and all claims, damages, losses, expenses and liabilities
(including reasonable attorneys' fees) incurred by said party as a result of a
breach of this representation and warranty by the other party.
15. Condition of Premises.
(a) Commencement. Subtenant acknowledges (i)
that it is subleasing the Sublease Premises "as-is" in an unfurnished condition
(as confirmed to Subtenant's satisfaction not later than the Sublease
Commencement Date), (ii) that Sublandlord is not making any representation or
warranty concerning the condition of the Sublease Premises, and (iii) that
Sublandlord is not obligated to perform any work to prepare the Sublease
Premises for Subtenant's occupancy other than to deliver the Sublease Premises
in broom-clean condition and, as regards the 9360 Premises, complete the
installation of a new door in the eastern hallway and the repair of any
non-operating light fixtures. Such work on the 9360 Premises shall be
completed not later than sixty (60) days following the Sublease Commencement
Date as to the 9360 Premises. Subtenant shall also conduct a Phase I
Environmental Assessment (the "Base Line Study") with respect to the Sublease
Premises in accordance with ASTM Standard E 1257-
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94 which, pursuant to such Standard, shall not include any surface or
subsurface testing on the Sublease Premises. The Base Line Study shall assess
the condition of the Sublease Premises as it exists prior to any occupancy
thereof by Subtenant and shall be completed and approved by Subtenant as soon
as possible. If the Base Line Study is not completed and approved by Subtenant
on or prior to the Sublease Commencement Date, such completion and approval
shall have occurred not later than thirty (30) days following the Sublease
Commencement Date. Subtenant's failure to approve the results of such Base
Line Study within five (5) days of its completion shall permit Subtenant to
terminate this Sublease, subject, however, to Sublandlord's right (without any
obligation of exercise) to cure such disapproved matter to Subtenant's
reasonable satisfaction within a reasonable period of time after Sublandlord's
receipt of notice of such disapproval. Subtenant shall deliver a copy of the
Base Line Study to Sublandlord upon its completion. Subtenant acknowledges
that it is not authorized to make or do any alterations or improvements in or
to the Sublease Premises without Sublandlord's prior written consent, which
consent may not be unreasonably withheld and which may impose additional
requirements applicable to the construction and completion of such alterations
or improvements in addition to requiring Subtenant's compliance with
requirements of the Master Lease. Sublandlord shall not be deemed to be
unreasonable in withholding its consent to any alteration or improvement which
does not conform with the use requirements under this Sublease or which is
materially different from alterations or improvements customarily seen in
first-class office and laboratory space, as applicable.
(b) Vacation. Subtenant further acknowledges
that it must deliver the Sublease Premises to Sublandlord on the Sublease
Expiration Date in the condition substantially the same as that on the Sublease
Commencement Date; provided, however, all tenant improvements constructed by
Subtenant and for which the T/I Credit was provided shall remain in the
Sublease Premises unless Sublandlord requires that Subtenant remove same.
Subtenant shall also conduct an exit environmental assessment (the "Subtenant
Exit Study") substantially the same in scope as the Base Line Study. The
Subtenant Exit Study shall be conducted not earlier than fifteen (15) days
prior to Subtenant's vacation of the Sublease Premises. In the event the
Subtenant Exit Study reveals contamination not described in the Base Line
Study, then, to the extent such contamination is the result of the act or
omission of Subtenant, its agents, employees, contractors, invitees or
licensees, Subtenant shall promptly remediate or remove such contamination in
its entirety. Subtenant shall maintain the results of the Base Line Study and
the Subtenant Exit Study in strict confidence and shall not, without
Sublandlord's prior written consent, which may be withheld in its sole
discretion, disclose the results thereof, or any portion thereof to any third
party, excepting Subtenant's directors, officers, employees, representatives
and consultants on a need-to-know basis, unless Subtenant is compelled under
applicable law to disclose all or any portion of said Studies. All such
Studies shall be delivered to Sublandlord.
(c) Inspection Rights. In addition to all other
rights under the provisions of the Master Lease incorporated into this
Sublease, Sublandlord expressly reserves the right to conduct the inspections
and testing in the Sublease Premises during the Term as described in Paragraph
10 of the Master Lease. During the Term of the Sublease, Subtenant shall
deliver to Sublandlord, upon Sublandlord's request therefor, copies of all
notices, filings and permits delivered to, or received from, regulatory and
governmental entities having jurisdiction over Subtenant's operations on the
Sublease Premises with respect to the use,
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storage or disposal of Hazardous Substances and a current inventory of all
Hazardous Substances used and/or stored on the Sublease Premises.
16. Consent of Landlord. Section 21(b) of the Master
Lease requires Sublandlord to provide written notice to Landlord regarding this
Sublease. Sublandlord has provided such notice as of the date of this
Sublease. If Sublandlord receives any objection from Landlord to this Sublease
during the initial sixty (60) days of the Term, Sublandlord shall notify
Subtenant thereof and use reasonable best efforts to remove such objection. If
such objection cannot be removed within said 60-day period and the continuation
of this Sublease would place Sublandlord in material breach of the Master
Lease, as determined by Sublandlord in its sole discretion, this Sublease may
be terminated by either party hereto upon notice to the other, and upon such
termination neither party hereto shall have any further rights against or
obligations to the other party hereto, other than Subtenant's obligation to
leave the Sublease Premises in the same condition as that existing on the
Sublease Commencement Date.
17. Termination of the Lease. If for any reason the term
of the Master Lease shall terminate prior to the Sublease Expiration Date, this
Sublease shall automatically be terminated and Sublandlord shall not be liable
to Subtenant by reason thereof unless said termination shall have been caused
by the default of Sublandlord under the Master Lease, and said Sublandlord
default was not as a result of a Subtenant default hereunder, or such
termination is the result of any election or exercise of a right or option held
by Sublandlord under the Master Lease to effect such termination, or is the
result of Sublandlord's mutual agreement with Landlord to terminate the Master
Lease outside the parameters of the Master Lease.
18. Assignment and Subletting.
(a) Independent of and in addition to any
provisions of the Master Lease, including without limitation the obligation to
obtain Landlord's consent to any assignment, it is understood and agreed that
Subtenant shall have no right to sublet the Sublease Premises or any portion
thereof or any right or privilege appurtenant thereto; provided, however, that
Subtenant shall have the right to assign this Sublease or any interest therein,
and to suffer or permit any other person (other than agents, servants or
associates of the Subtenant) to occupy or use the Sublease Premises, only upon
the prior written consent of Sublandlord and Landlord, which consent shall not
be unreasonably withheld. Any assignment by Subtenant without Sublandlord's
prior written consent shall be void and shall, at the option of Sublandlord,
terminate this Sublease.
(b) Subtenant shall advise Sublandlord by notice
of (i) Subtenant's intent to assign this Sublease, (ii) the name of the
proposed assignee and evidence reasonably satisfactory to Sublandlord that such
proposed assignee is comparable in reputation, stature and financial condition
to tenants then leasing comparable space in comparable buildings, and (iii) the
terms of the proposed assignment. Sublandlord shall, within twenty (20) days
of receipt of such notice, and any additional information requested by Landlord
concerning the proposed assignee's financial responsibility, elect one of the
following:
(i) Consent to such proposed assignment;
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(ii) Refuse such consent, which refusal
shall be on reasonable grounds; or
(iii) Elect to terminate the Sublease.
(c) In the event that Sublandlord shall consent
to an assignment under the provisions of this Section 18, Subtenant shall pay
Sublandlord's reasonable processing costs and reasonable attorneys' fees
incurred in giving such consent (not to exceed $2,500 in any one instance).
Notwithstanding any permitted assignment, Subtenant shall at all times remain
directly, primarily and fully responsible and liable for all payments owed by
Subtenant under the Sublease and for compliance with all obligations under the
terms, provisions and covenants of the Sublease. If for any proposed
assignment or sublease, Subtenant receives Rent or other consideration, either
initially or over the term of the assignment or sublease, in excess of the Rent
required by this Sublease, after a deduction for the following: (a) any
brokerage commission paid by Subtenant in connection therewith and (b) any
reasonable attorneys' fees in connection with preparing and negotiating an
assignment or sublease document ("Profit"), Subtenant shall pay to Sublandlord
as additional Rent, fifty percent (50%) of such Profit or other consideration
received by Subtenant within five (5) days of its receipt by Subtenant or, in
the event the assignee makes payment directly to Sublandlord, Sublandlord shall
refund fifty percent (50%) of the Profit to Subtenant after deducting (a) and
(b) above.
(d) Occupancy of all or part of the Sublease
Premises by parent, subsidiary, or affiliated companies or a joint venture
partnership of Subtenant shall not be deemed an assignment or subletting
provided that such parent, subsidiary or affiliated companies or a joint
venture partnership were not formed as a subterfuge to avoid the obligation of
this Section 18. If Subtenant is a corporation, unincorporated association,
trust or general or limited partnership, then the sale, assignment, transfer or
hypothecation of any shares, partnership interest, or other ownership interest
of such entity or the dissolution, merger, consolidation, or other
reorganization of such entity, or the sale, assignment, transfer or
hypothecation of the assets of such entity, shall not be deemed an assignment
or sublease subject to the provisions of this Section 18.
19. Limitation of Estate. Subtenant's estate shall in
all respects be limited to, and be construed in a fashion consistent with, the
estate granted to Sublandlord by Landlord. Subtenant shall stand in the place
of Sublandlord and shall defend, indemnify and hold Sublandlord harmless with
respect to all covenants, warranties, obligations, and payments made by
Sublandlord under or required of Sublandlord by the Master Lease with respect
to the Subleased Premises. In the event Sublandlord is prevented from
performing any of its obligations under this Sublease by a breach by Landlord
of a term of the Master Lease, then Sublandlord's sole obligation in regard to
its obligation under this Sublease shall be to use reasonable efforts in
diligently pursuing the correction or cure by Landlord of Landlord's breach.
20. Entire Agreement. It is understood and acknowledged
that there are no oral agreements between the parties hereto affecting this
Sublease and this Sublease supersedes and cancels any and all previous
negotiations, arrangements, brochures, agreements and understandings, if any,
between the parties hereto or displayed by Sublandlord to Subtenant with
respect to the subject matter thereof, and none thereof shall be used to
interpret or construe this Sublease. This Sublease, and the exhibits and
schedules attached hereto, contain all of the
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terms, covenants, conditions, warranties and agreements of the parties relating
in any manner to the rental, use and occupancy of the Sublease Premises and
shall be considered to be the only agreements between the parties hereto and
their representatives and agents. None of the terms, covenants, conditions or
provisions of this Sublease can be modified, deleted or added to except in
writing signed by the parties hereto. All negotiations and oral agreements
acceptable to both parties have been merged into and are
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included herein. There are no other representations or warranties between the
parties, and all reliance with respect to representations is based totally upon
the representations and agreements contained in this Sublease.
IN WITNESS WHEREOF, the parties have entered into this Sublease as of
the date first written above.
SUBLANDLORD:
GENSIA, INC.,
a Delaware corporation
By: Gene Tutwieler
Its: Vice President of Research
SUBTENANT:
AMYLIN PHARMACEUTICALS, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Its: Vice President and General Counsel
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EXHIBIT "A"
COPY OF MASTER LEASE
LEASE AGREEMENT
by and between
▇▇▇▇ PROPERTY COMPANY,
a California partnership
as LANDLORD
and
GENSIA, INC.,
a Delaware corporation,
as TENANT
Premises: San Diego, California
Dated as of: December 21, 1993
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TABLE OF CONTENTS
Page
1. Demise of Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
3. Title and Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4. Use of Leased Premises; Quiet Enjoyment . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5. Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6. Basic Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7. Additional Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
8. Net Lease; Non-Terminability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
9. Payment of Impositions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
10. Compliance with Laws and Easement Agreements; Environmental Matters . . . . . . . . . . . . . 21
11. Liens; Recording . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
12. Maintenance and Repair . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
13. Alterations and Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
14. Permitted Contests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
15. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
16. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
17. Casualty and Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
18. Early Termination Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
19. Restoration; Reduction of Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
20. Procedures Upon Purchase by Tenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
21. Assignment and Subletting; Prohibition against Leasehold Financing . . . . . . . . . . . . . . 39
22. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
23. Remedies and Damages Upon Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
24. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
25. Estoppel Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
26. Surrender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
27. No Merger of Title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
28. Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
29. Security Deposit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
30. Non-Recourse as to Landlord . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
31. Financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
32. Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
33. Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
34. Tax Treatment; Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
35. Right of First Refusal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
36. Financing Major Alterations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
37. Initial Lender Rights re: Letter of Credit . . . . . . . . . . . . . . . . . . . . . . . . . 62
38. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
EXHIBIT A LEGAL DESCRIPTION OF LAND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
EXHIBIT B DESCRIPTION OF BUILDING SYSTEMS EQUIPMENT . . . . . . . . . . . . . . . . . . . . . . 1
EXHIBIT C SCHEDULE OF PERMITTED ENCUMBRANCES . . . . . . . . . . . . . . . . . . . . . . . . . . 1
EXHIBIT D BASIC RENT SCHEDULE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
EXHIBIT E TENANT'S FINANCIAL COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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EXHIBIT F SCHEDULE OF EXISTING LEASES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
EXHIBIT G [Form of Letter of Credit] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
EXHIBIT H TENANT ESTOPPEL CERTIFICATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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LEASE AGREEMENT, made as of this 21st day of December, 1993, between
▇▇▇▇ PROPERTY COMPANY, a California partnership, ("Landlord") the partners of
which are ▇▇▇▇ (CA) QRS 11-25, INC., a California corporation ("▇▇▇▇:11") and
▇▇▇▇ (CA) QRS 12-1, INC., a California corporation ("▇▇▇▇:12") with an address
c/o W. P. ▇▇▇▇▇ & Co., Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and
GENSIA, INC. ("Tenant"), a Delaware corporation with an address at ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
In consideration of the rents and provisions herein stipulated to be
paid and performed, Landlord and Tenant hereby covenant and agree as follows:
1. Demise of Premises. Landlord hereby demises and lets
to Tenant, and Tenant hereby takes and leases from Landlord, for the term and
upon the provisions hereinafter specified, the following described property
(collectively, the "Leased Premises"): (a) the real property described in
Exhibit "A-1" hereto, together with the Appurtenances (collectively, the
"Land"); (b) the buildings, structures, driveways, walkways and other
improvements now or hereafter constructed on the Land (collectively, the
"Structures"); and (c) the Building Systems Equipment (as defined in Paragraph
2).
2. Certain Definitions.
"Additional Rent" shall mean Additional Rent as
defined in Paragraph 7.
"Adjoining Property" shall mean all appurtenant
sidewalks, driveways, curbs, gores and vault spaces which are located on land
adjoining the Land and which Tenant is entitled to use and responsible to
repair.
"Affiliate" with respect to Tenant shall mean any
other Person controlling, controlled by or under common control with Tenant and
"control" shall mean the power to direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.
"Alterations" shall mean all changes, additions,
improvements or repairs to, all alterations, reconstructions, renewals,
replacements or removals of and all substitutions or replacements for any of
the Improvements, both interior and exterior, structural and non-structural,
and ordinary and extraordinary.
"Appurtenances" shall mean all tenements,
hereditaments, easements, rights-of-way, rights, privileges in and to the Land,
including (a) easements over other lands granted by any Easement Agreement and
(b) rights to use any streets, ways, alleys, vaults, gores or strips of land
adjoining the Land.
"Assignment by Landlord" shall mean any assignment of
rents and leases from Landlord to a Lender which (a) encumbers any of the
Leased Premises and (b) secures Landlord's obligation to repay a Loan, as the
same may be amended, supplemented or modified from time to time.
"Basic Rent" shall mean Basic Rent as defined in
Paragraph 6 and computed pursuant to Exhibit "D".
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"Basic Rent Commencement Date" shall mean January 1,
1994.
"Basic Rent Payment Dates" shall mean the Basic Rent
Payment Dates as defined in Paragraph 6 below.
"Building Systems Equipment" shall mean the Building
Systems Equipment described on Exhibit "B" which is installed or located in or
on the Structures on the date hereof and paid for by Landlord. Building
Systems Equipment shall include (i) that portion of the Tenant Improvements
that is within the definition of Building Systems Equipment and (ii)
Alterations to the Building Systems Equipment whether paid for by Landlord or,
if required by the terms of this Lease, Tenant.
"Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions are authorized or
obligated to close in the State of California.
"Casualty" shall mean any loss of or damage to any,
property except Tenant's personal property and Tenant's, Equipment included
within the Leased Premises or to any property in which Landlord has an
ownership interest.
"Condemnation" shall mean a Taking and/or a
Requisition, as defined below in this Paragraph 2.
"Condemnation Notice" shall mean notice or knowledge
of the institution of or intention to institute any proceeding for
Condemnation.
"Consolidated Tangible Net Worth" shall mean
Consolidated Tangible Net Worth as defined in Exhibit "E".
"Construction Contracts" shall mean those certain
Construction Contracts described in the Construction Management Agreement and
any other contracts between Tenant, as construction manager for Landlord, and
Contractors, pursuant to which the Tenant Improvements will be constructed.
"Construction Management Agreement" shall mean that
certain Construction Management Agreement of even date between Landlord, as
owner, and Tenant, as manager for Landlord, in connection with the installation
and construction of the Tenant Improvements.
"Contractors" shall mean those contractors who are
parties to the Construction Contracts.
"Costs" of a Person or associated with a specified
transaction shall mean all reasonable costs and expenses incurred by such
Person or associated with such transaction, including without limitation,
attorneys' fees and expenses, court costs, brokerage fees, escrow fees, title
insurance premiums, mortgage commitment fees, mortgage points, recording fees
and transfer taxes, as the circumstances require.
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"Covenant Breach" shall mean Covenant Breach as
defined in Paragraph 29(e).
"Covenant Event of Default" shall mean a Covenant
Breach for which a Letter of Credit is not issued in accordance with the
provisions of Paragraph 29(e).
"CPI" shall mean the CPI as defined in Exhibit "D".
"Debt Rent" shall mean Debt Rent as defined in
Paragraph 37(a)(ii).
"Default Rate" shall mean the Default Rate as defined
in Paragraph 7(a)(iv).
"Direct Costs" shall mean Direct Costs as defined in
Section 1.01 of the Construction Management Agreement.
"Early Termination Amount" shall mean [INTENTIONALLY
OMITTED].
"Early Termination Date" shall mean Early Termination
Date as defined in Paragraph 18.
"Early Termination Event" shall mean an Early
Termination Event as defined in Paragraph 18.
"Early Termination Notice" shall mean Early
Termination Notice as defined in Paragraph 18.
"Easement Agreements" shall mean any recorded
conditions, covenants, restrictions, easements, declarations, licenses and
other agreements affecting the Leased Premises. The initial Easement
Agreements are listed on the Schedule of Permitted Encumbrances attached hereto
as Exhibit "C". Tenant shall not negotiate or execute any Easement Agreement
without Landlord's prior written consent, which shall not be unreasonably
withheld or delayed. If Tenant or Landlord subsequently negotiates and the
other party approves Easement Agreements in addition to those listed on Exhibit
"C", such additional Easement Agreements shall be deemed to be included as
Easement Agreements to which this Lease applies. Neither Tenant nor Landlord
shall be bound by any Easement Agreements which are not listed on Exhibit "C"
unless Landlord and Tenant expressly agree in writing to be bound thereby. If
either Landlord or Tenant do not so agree to be bound by any Easement
Agreements not listed on Exhibit "C" (the "Excluded Easement Agreements"), the
Excluded Easement Agreements shall not be included as Easement Agreements or
Permitted Encumbrances. Easement Agreements other than Excluded Easement
Agreements are Permitted Encumbrances.
"Environmental Law" shall mean (i) whenever enacted
or promulgated, any applicable federal, state, foreign and local law, statute,
ordinance, rule, regulation, license, permit, authorization, approval, consent,
court order, judgment, decree, injunction, code, requirement or agreement with
any governmental entity, (x) relating to pollution (or the cleanup thereof), or
the protection of air, water vapor, surface water, groundwater, drinking water
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supply, land (including land surface or subsurface), plant, aquatic and animal
life from injury caused by a Hazardous Substance or (y) concerning exposure to,
or the use, containment, storage, recycling, reclamation, reuse, treatment,
generation, discharge, transportation, processing, handling, labeling,
production, disposal or remediation of Hazardous Substances, Hazardous
Conditions or Hazardous Activities, in each case as amended and as now or
hereafter in effect, and (ii) any common law or equitable doctrine (including,
without limitation, injunctive relief and tort doctrines such as negligence,
nuisance, trespass and strict liability) that may impose liability or
obligations or injuries or damages due to or threatened as a result of the
presence of, exposure to, or ingestion of, any Hazardous Substance. The term
Environmental Law includes, without limitation, the federal Comprehensive
Environmental Response Compensation and Liability Act of 1980, the Superfund
Amendments and Reauthorization Act, the federal Water Pollution Control Act,
the federal Clean Air Act, the federal Clean Water Act, the federal Resources
Conservation and Recovery Act of 1976 (including the Hazardous and Solid Waste
Amendments to RCRA), the federal Solid Waste Disposal Act, the federal Toxic
Substance Control Act, the federal Insecticide, Fungicide and Rodenticide Act,
the federal Occupational Safety and Health Act of 1970, the federal National
Environmental Policy Act and the federal Hazardous Materials Transportation
Act, each as amended and as now or hereafter in effect and any similar state or
local Law.
"Environmental Violation" shall mean (a) any direct
or indirect discharge, disposal, spillage, emission, escape, pumping, pouring,
injection, leaching, release, seepage, filtration or transporting of any
Hazardous Substance at, upon, under, onto or within the Leased Premises, or
from the Leased Premises to the environment, in violation of any Environmental
Law or in excess of any reportable quantity established under any Environmental
Law or which could result in any liability to Landlord, Tenant or Lender, any
Federal, state or local government or any other Person for the costs of any
removal or remedial action or natural resources damage or for bodily injury or
property damage, (b) any deposit, storage, dumping, placement or use of any
Hazardous Substance at, upon, under or within the Leased Premises or which
extends to any Adjoining Property in violation of any Environmental Law or in
excess of any reportable quantity established under any Environmental Law or
which could result in any liability to any Federal, state or local government
or to any other Person for the costs of any removal or remedial action or
natural resources damage or for bodily injury or property damage, (c) the
abandonment or discarding of any barrels, containers or other receptacles
containing any Hazardous Substances in violation of any Environmental Laws, (d)
any activity, occurrence or condition which could result in any liability, cost
or expense to Landlord or Lender or any other owner or occupier of the Leased
Premises, or which could result in a creation of a lien on the Leased Premises,
under any Environmental Law, or (e) any violation of or noncompliance with any
Environmental Law.
"Equipment" shall mean Building Systems Equipment and
Tenant's Equipment.
"Equity Rent" shall mean Equity Rent as defined in
Paragraph 37(b).
"Event of Default" shall mean an Event of Default as
defined in Paragraph 22(a).
"Existing Leases" is defined in Paragraph 21.
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"Fair Market Rent" shall mean Fair Market Rent as
determined in accordance with Section 3 of Exhibit "D".
"Federal Funds" shall mean federal or other
immediately available funds which at the time of payment are legal tender for
the payment of public and private debts in the United States of America.
"Final Release Conditions" shall mean Final Release
Conditions as defined in Paragraph 29.
"Financial Covenants" shall mean the financial
covenants of Tenant described on Exhibit "E".
"Funded Indebtedness" shall mean Funded Indebtedness
as defined in Exhibit "E".
"Funding Deadline" shall mean [INTENTIONALLY
OMITTED].
"GAAP" shall mean generally accepted accounting
principles as in effect from time to time and followed consistently throughout
the relevant period.
"Hazardous Activity" means any activity, process,
procedure or undertaking which directly or indirectly (i) procures, generates
or creates any Hazardous Substance; (ii) causes or results in (or threatens to
cause or result in) the release, seepage, spill, leak, flow, discharge or
emission of any Hazardous Substance into the environment (including the air,
ground water, watercourses or water systems), (iii) involves the containment or
storage of any Hazardous Substance; or (iv) would cause the Leased Premises or
any portion thereof to become a hazardous waste treatment, recycling,
reclamation, processing, storage or disposal facility within the meaning of any
Environmental Law; provided, however, that notwithstanding anything in this
sentence or this Lease to the contrary, Tenant shall not be deemed to be
engaged in a Hazardous Activity if the subject activity, process, procedure or
undertaking is done or performed in accordance with applicable Law and/or
governmental permit.
"Hazardous Condition" means any condition which would
support any claim or liability under any Environmental Law, including the
presence of underground storage tanks.
"Hazardous Substance" means (i) any substance,
material, product, petroleum, petroleum product, derivative, compound or
mixture, mineral (including asbestos), chemical, gas, medical waste, or other
pollutant, in each case whether naturally occurring, man-made or the by-product
of any process, that is toxic, harmful or hazardous or acutely hazardous to the
environment or public health or safety or (ii) any substance supporting a claim
under any Environmental Law, whether or not defined as hazardous as such under
any Environmental Law. Hazardous Substances include, without limitation, any
toxic or hazardous waste, pollutant, contaminant, industrial waste, petroleum
or petroleum-derived substances or waste, radon, radioactive materials,
asbestos, asbestos containing materials, urea formaldehyde foam insulation,
lead and polychlorinated biphenyls.
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23
"Impositions" shall mean the Impositions as defined
in Paragraph 9(a).
"Improvements" shall mean the Structures as defined
in Paragraph 1, Building Systems Equipment (as defined above) and Tenant
Improvements (as defined below).
"Indemnitee" shall mean an Indemnitee as defined in
Paragraph 15.
"Indirect Costs" shall mean Indirect Costs as defined
in Section 1.01 of the Construction Management Agreement.
"Initial Lender" shall mean The Northwestern Mutual
Life Insurance Company and its successors and assigns with respect to the
Initial Loan.
"Initial Loan" shall mean the [INTENTIONALLY
OMITTED]loan from Initial Lender to Landlord.
"Initial Term" shall mean the Initial Term as defined
in Paragraph 5.
"Initial Term Commencement Date" shall mean Initial
Term Commencement Date as defined in Paragraph 5(a).
"Initial Term Expiration Date" shall mean Initial
Term Commencement Date as defined in Paragraph 5(a).
"Insurance Requirements" shall mean the requirements
of all insurance policies required to be maintained in accordance with this
Lease.
"Land" shall mean the Land as defined in Paragraph 1
and described in Exhibit "A-1".
"Landlord's Cash Contribution" shall mean
[INTENTIONALLY OMITTED].
"Landlord's Maximum Contribution" shall mean
[INTENTIONALLY OMITTED].
"Landlord's Share of Project Costs" shall mean
[INTENTIONALLY OMITTED].
"Law" shall mean any constitution, statute, rule of
law, code, ordinance, order, judgment, decree, injunction, rule, regulation,
policy, requirement or administrative or judicial determination, even if
unforeseen or extraordinary, of every duly constituted governmental authority,
court or agency, now or hereafter enacted or in effect.
"Lease" shall mean this Lease Agreement.
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24
"Leased Premises" shall mean the Leased Premises as
defined in Paragraph 1.
"Legal Requirements" shall mean all present and
future Laws (including but not limited to Environmental Laws and Laws relating
to accessibility to, usability by, and discrimination against, disabled
individuals) and all covenants, restrictions and conditions now or hereafter of
record which may be applicable to Tenant or to any of the Leased Premises, or
to the use, manner of use, occupancy, possession, operation, maintenance,
alteration, repair or restoration of any of the Leased Premises, even if
compliance therewith necessitates structural changes or improvements or results
in interference with the use or enjoyment of any of the Leased Premises.
"Lender" shall mean (a) Initial Lender, its
successors and assigns, and (b) any person or entity (and their respective
successors and assigns) which may, after the date hereof, make a Loan to
Landlord or is the holder of any Note.
"Letter of Credit" shall mean an unconditional,
irrevocable letter of credit in the form attached hereto as Exhibit "G" in the
amount then required by Paragraph 29, with such modifications as may be
reasonably requested by the beneficiary thereof from time to time and issued by
a commercial bank with a B rating or better according to the Sheshunoff Bank
Quarterly or, if no longer available, a similar publication satisfactory to the
then beneficiary thereof. The Letter of Credit shall name Landlord or, at
Landlord's direction, Lender as beneficiary.
"Loan" shall mean the Initial Loan and any other loan
made by one or more Lenders to Landlord, which Initial Loan or other loan, as
the case may be, is secured by a Mortgage and an Assignment by Landlord and
evidenced by a Note.
"Major Alterations" shall mean Major Alterations as
defined in Paragraph 36(a).
"Monetary Event of Default" shall mean a failure by
Tenant to pay Rent or any other Monetary Obligation within the cure period, if
any, as provided in this Lease.
"Monetary Obligations" shall mean Rent and all other
sums payable by Tenant under this Lease.
"Mortgage" shall mean any mortgage or deed of trust
from Landlord to a Lender which (a) encumbers any of the Leased Premises and
(b) secures Landlord's obligation to repay a Loan, as the same may be amended,
supplemented or modified.
"Net Award" shall mean (a) the entire award payable
to Landlord or Lender by reason of a Condemnation whether pursuant to a
judgment or by agreement or otherwise, or (b) the entire proceeds of any
insurance required under clauses (i), (ii) (to the extent payable to Landlord
or Lender), (iv), (v) or (vi) of Paragraph 16(a) (to the extent payable to
Landlord, Tenant or Lender), as the case may be, less any expenses incurred by
Landlord, Tenant and Lender in collecting such award or proceeds.
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"Note" shall mean any promissory note evidencing
Landlord's obligation to repay a Loan, as the same may be amended, supplemented
or modified.
"Notice Receipt Date" shall mean Notice Receipt Date
as defined in Paragraph 18(b).
"Occupancy Date" shall mean the date on which each of
the following events has occurred: (i) the Tenant Improvements have been
completed substantially in accordance with the Plans, as certified to Landlord
by the Architect (as defined in the Construction Management Agreement), and
(ii) all permanent permits and licenses required for the occupancy of the
Leased Premises have been obtained.
"Partial Casualty" shall mean any Casualty which does
not constitute an Early Termination Event.
"Partial Condemnation" shall mean any Condemnation
which does not constitute an Early Termination Event.
"Partial Release Conditions" shall mean Partial
Release Conditions as defined in Paragraph 29(b).
"Permitted Encroachments" shall mean the
encroachments listed on that certain ALTA/ACSM Land Title Survey of the Land
dated December 2, 1992 and revised November 21, 1993 which was prepared by ▇▇▇▇
& Clark's National Surveyors Network.
"Permitted Encumbrances" shall mean the existing
state of title to the Leased Premises including those covenants, restrictions,
reservations, liens, conditions and easements and other encumbrances, other
than any Mortgage or Assignment by Landlord, listed on Exhibit "C" hereto. It
is agreed that such listing shall not be deemed to revive any such encumbrances
that have expired or terminated or are otherwise invalid or unenforceable.
"Person" shall mean an individual, partnership,
association, corporation or other entity.
"Plans" shall mean the plans and specifications
prepared and to be prepared by McGraw ▇▇▇▇▇▇▇ Architects or another architect
selected by Tenant for the installation and construction of the Tenant
Improvements. A list of the existing Plans is attached to the Construction
Management Agreement. Any amendments, modifications or additions to the Plans
shall be approved as provided in the Construction Management Agreement.
"Prepayment Premium" shall mean any payment (other
than a payment of principal and/or interest which Landlord is required to make
under a Note or a Mortgage) by reason of any prepayment by Landlord of any
principal due under a Note or Mortgage as the result of the occurrence of an
Early Termination Event or an Event of Default or the purchase of the Leased
Premises by Tenant upon the occurrence of an Environmental Violation pursuant
to Paragraph 10(h), and which may be (in lieu of such prepayment premium or
prepayment penalty) a "make whole" clause requiring a prepayment premium in an
amount sufficient to compensate the Lender for the loss of the benefit of the
Loan due to a prepayment.
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26
"Present Value" of any amount shall mean
[INTENTIONALLY OMITTED].
"Primary Term Expiration Date" shall mean Primary
Term Expiration Date as defined in Paragraph 5(a).
"Prime Rate" shall mean the annual interest rate as
published, from time to time, in the Wall Street Journal as the "Prime Rate" in
its column entitled "Money Rates". The Prime Rate may not be the lowest rate
of interest charged by any "large U.S. money center commercial banks" and
Landlord makes no representations or warranties to that effect. In the event
the Wall Street Journal ceases publication or ceases to publish the "Prime
Rate" as described above, the Prime Rate shall be the average per annum
discount rate (the "Discount Rate") on ninety-one (91) day bills ("Treasury
Bills") issued from time to time by the United States Treasury at is most
recent auction, plus three hundred (300) basis points. If no such 91-day
Treasury Bills are then being issued, the Discount Rate shall be the discount
rate on Treasury Bills then being issued for the period of time closest to
ninety-one (91) days.
"Project Costs" shall mean [INTENTIONALLY OMITTED].
"Reciprocal Easement Agreement" means that certain
Reciprocal Easement Agreement executed between Landlord, as owner of the Land,
and Tenant, as owner of a parcel of land contiguous to the Land. The
Reciprocal Easement Agreement is an Easement Agreement.
"Remaining Obligations" shall mean Remaining
Obligations as defined in Paragraph 18(c).
"Remaining Sum" shall mean Remaining Sum as defined
in Paragraph 19(c).
"Renewal Term" shall mean Renewal Term as defined in
Paragraph 5.
"Rent" shall mean, collectively, Basic Rent and
Additional Rent.
"Rent Determination Date" shall mean the date when
the Fair Market Rent is determined in accordance with Section 3 of Exhibit "D".
"Requisition" shall mean any temporary requisition or
confiscation of the use or occupancy of any of the Leased Premises by any
governmental authority, civil or military, whether pursuant to an agreement
with such governmental authority in settlement of or under threat of any such
requisition or confiscation, or otherwise.
"Retention Date" shall mean the later of the date on
which the amount of the Remaining Sum is finally determined or the date on
which Landlord's right to the Remaining Sum is finally determined.
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"Site Assessment" shall mean a Site Assessment as
defined in Paragraph 10(c).
"State" shall mean the State of California.
"Structures" shall mean the Structures as defined in
Paragraph 1.
"Surviving Obligations" shall mean any obligations of
Tenant under this Lease, actual or contingent, which arise on or prior to the
expiration or prior termination of this Lease or which survive such expiration
or termination by their own terms.
"Taking" shall mean (a) any taking or damaging of all
or a portion of any of the Leased Premises (i) in or by condemnation or other
eminent domain proceedings pursuant to any Law, general or special, or (ii) by
reason of any agreement with any condemnor in settlement of or under threat of
any such condemnation or other eminent domain proceeding, or (b) any inverse or
other de facto condemnation. The Taking shall be considered to have taken
place as of the later of the date actual physical possession is taken by the
condemnor, or the date on which the right to compensation and damages accrues
under the Law applicable to the Leased Premises.
"Tenant Improvements" shall mean all interior
improvements and equipment to be purchased, paid for, constructed and/or
installed in the Structures, all in accordance with the Plans and the terms of
the Construction Management Agreement. The Tenant Improvements, including the
Building Systems Equipment, shall not include Tenant's Equipment.
"Tenant's Equipment" shall mean all furniture,
fixtures and equipment which are owned and paid for by Tenant at any time
before or during the Term and transferred to and installed in the Structures
and any replacements thereof, except that Alterations to Building Systems
Equipment shall be Building Systems Equipment even if paid for by Tenant.
Tenant's Equipment shall not include the Tenant Improvements.
"Term" shall mean the Primary Term and the Initial
Term, plus any exercised Renewal Terms.
"Third Party Purchaser" shall mean Third Party
Purchaser as defined in Paragraph 21(j).
"Total Capitalization" shall mean Total
Capitalization as defined in Exhibit "E".
3. Title and Condition.
(a) The Leased Premises are demised and let subject to
(i) the Mortgage and Assignment by Landlord presently in effect, (ii) the
rights of any Persons in possession of the Leased Premises, (iii) the existing
state of title of any of the Leased Premises, including any Permitted
Encumbrances, (iv) any state of facts which an accurate survey or physical
inspection of the Leased Premises might show, (v) all Legal Requirements,
including any existing violation
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of any thereof, and (vi) the condition of the Leased Premises as of the
commencement of the Term, without representation or warranty by Landlord.
(b) Tenant acknowledges that the Leased Premises are in
good condition and repair at the inception of this Lease. LANDLORD LEASES AND
WILL LEASE AND TENANT TAKES AND WILL TAKE THE LEASED PREMISES AS IS. TENANT
ACKNOWLEDGES THAT LANDLORD (WHETHER ACTING AS LANDLORD HEREUNDER OR IN ANY
OTHER CAPACITY) HAS NOT MADE AND WILL NOT MAKE, NOR SHALL LANDLORD BE DEEMED TO
HAVE MADE, ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT TO
ANY OF THE LEASED PREMISES, INCLUDING ANY WARRANTY OR REPRESENTATION AS TO (i)
ITS FITNESS, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE, (ii) THE
QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, (iii) THE EXISTENCE OF ANY
DEFECT, LATENT OR PATENT, (iv) LANDLORD'S TITLE THERETO, (v) VALUE, (vi)
COMPLIANCE WITH SPECIFICATIONS, (vii) LOCATION, (viii) USE, (ix) CONDITION, (x)
MERCHANTABILITY, (xi) QUALITY, (xii) DESCRIPTION, (xiii) DURABILITY, (xiv)
OPERATION, (xv) THE EXISTENCE OF ANY HAZARDOUS SUBSTANCE, HAZARDOUS CONDITION
OR HAZARDOUS ACTIVITY OR (xvi) COMPLIANCE OF THE LEASED PREMISES WITH ANY LAW
OR LEGAL REQUIREMENT. ALL RISKS INCIDENT TO THE FOREGOING ARE TO BE BORNE BY
TENANT. TENANT ACKNOWLEDGES THAT THE LEASED PREMISES ARE OF ITS SELECTION AND
TO ITS SPECIFICATIONS AND THAT AS OF THE OCCUPANCY DATE THE LEASED PREMISES
WILL HAVE BEEN INSPECTED BY TENANT AND SATISFACTORY TO IT. IN THE EVENT OF ANY
DEFECT OR DEFICIENCY IN ANY OF THE LEASED PREMISES OF ANY NATURE, WHETHER
LATENT OR PATENT, LANDLORD SHALL NOT HAVE ANY RESPONSIBILITY OR LIABILITY WITH
RESPECT THERETO OR FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING
STRICT LIABILITY IN TORT). THE PROVISIONS OF THIS PARAGRAPH 3(b) HAVE BEEN
NEGOTIATED, AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY
WARRANTIES BY LANDLORD, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE LEASED
PREMISES, ARISING PURSUANT TO THE UNIFORM COMMERCIAL CODE OR ANY OTHER LAW NOW
OR HEREAFTER IN EFFECT OR ARISING OTHERWISE.
(c) Tenant represents to Landlord that Tenant has
examined the title to the Leased Premises prior to the execution and delivery
of this Lease and has found the same to be satisfactory for the purposes
contemplated hereby. Tenant acknowledges that (i) fee simple title (both legal
and equitable) is in Landlord and that Tenant has only the leasehold right of
possession and use of the Leased Premises as provided herein, (ii) the
Structures conform to all material Legal Requirements and all Insurance
Requirements, (iii) all easements necessary or appropriate for the use or
operation of the Leased Premises have been obtained, (iv) except as shown on
the schedule of even date delivered to Landlord, all contractors and
subcontractors who have performed work on or supplied materials to the Leased
Premises have been fully paid, and all materials and supplies have been fully
paid for, (v) the Structures (except for the Tenant Improvements) have been
fully completed in all material respects in a workmanlike manner of first class
quality, (vi) all Equipment (except for the Tenant Improvements) necessary or
appropriate for the use or operation of the Leased Premises has been installed
and is presently fully operative in all material respects, and (vii) upon
completion of the Tenant Improvements
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the Tenant Improvements will be fully completed, installed and operative in all
respects and of a first class quality.
(d) Landlord hereby assigns to Tenant, without recourse
or warranty whatsoever, all warranties, guaranties, indemnities and similar
rights which Landlord may have against any manufacturer, seller, engineer,
contractor or builder in respect of any of the Leased Premises. Such
assignment shall remain in effect until an Event of Default occurs or until the
expiration or earlier termination of this Lease, whereupon such assignment
shall cease and all of said warranties, guaranties, indemnities and other
rights shall automatically revert to Landlord.
(e) Pursuant to the Construction Management Agreement,
Tenant will cause the Tenant Improvements to be constructed and installed with
funds more particularly described in the Construction Management Agreement.
The Tenant Improvements will be owned by Landlord and are included within the
Leased Premises. Tenant acknowledges that the Tenant Improvements have not yet
been completed and that, pursuant to the Construction Management Agreement,
Tenant has the responsibility for causing the Tenant Improvements to be
completed in accordance with the terms of the Construction Management
Agreement. Landlord will not make any representations or warranties with
respect to the Tenant Improvements. Tenant further acknowledges that, upon
occurrence of an Event of Default, Landlord may terminate the Construction
Management Agreement, in addition to all other remedies of Landlord under this
Lease, Landlord shall have the right but not the obligation to complete
construction of the Tenant Improvements in accordance with the Plans. If
Landlord so completes construction of the Tenant Improvements, Tenant will not
be excused from paying all Rent due pursuant to the terms of this Lease, and,
whether or not Landlord completes the Tenant Improvements, Landlord shall have
the right to exercise any or all of its remedies hereunder following an Event
of Default. All acknowledgments of Tenant regarding the Leased Premises
contained in Paragraph 3(b) shall be deemed to have been made again as of the
Occupancy Date.
4. Use of Leased Premises; Quiet Enjoyment.
(a) Tenant may occupy and use the Leased Premises for
office use and for research, development, testing, manufacturing, sale and use
of pharmaceutical, medical, chemical and related products and devices and uses
ancillary thereto, including without limitation the performance of clinical
experiment programs and the operation of a delicatessen or restaurant, as long
as such uses are permitted under and conducted in accordance with applicable
Law, and for no other purpose without having first received the prior written
approval of Landlord, which approval shall not be unreasonably withheld or
delayed. Tenant shall not use or occupy or permit any of the Leased Premises
to be used or occupied, nor do or permit anything to be done in or on any of
the Leased Premises, in a manner which would or might (i) violate any Law or
Legal Requirement, (ii) make void or voidable or cause any insurer to cancel
any insurance required by this Lease, or make it difficult or impossible to
obtain any such insurance at commercially reasonable rates, (iii) cause
structural injury to any of the Structures or (iv) constitute a public or
private nuisance or waste.
(b) Subject to the provisions hereof, so long as no Event
of Default has occurred and is continuing, Tenant shall quietly hold, occupy
and enjoy the Leased Premises throughout the Term, without any hindrance,
ejection or molestation by Landlord with respect to matters that arise after
the date hereof, provided that Landlord and Lender may enter upon
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30
and examine any of the Leased Premises at such reasonable times as Landlord or
Lender may select for the purpose of inspecting the Leased Premises, verifying
compliance or non-compliance by Tenant with its obligations hereunder and the
existence or non-existence of an Event of Default or event which with the
passage of time and/or notice would constitute an Event of Default, showing the
Leased Premises to prospective Lenders and purchasers and taking such other
action with respect to the Leased Premises as is permitted by any provision
hereof. Tenant may reasonably limit the extent of any such inspection so as to
minimize disclosure by Tenant of confidential or proprietary products being
developed or manufactured by Tenant.
5. Term.
(a) Subject to all of the provisions of this Lease,
Tenant shall have and hold the Leased Premises for a primary term ("Primary
Term") commencing on the date hereof and ending on the last day of the calendar
month in which the Funding Deadline occurs (the "Primary Term Expiration Date")
and for an initial term (the "Initial Term") commencing on the first day of the
first month following the Primary Term Expiration Date (the "Initial Term
Commencement Date") and ending on the last day (the "Initial Term Expiration
Date") of the one hundred eightieth (180th) calendar month next following the
date on which the Initial Term commences. If all Rent and all other sums due
hereunder shall not have been fully paid by the end of the Term, Landlord may,
at its option, extend the Term on a month-to-month basis until all said sums
shall have been fully paid.
(b) Provided that if, on or prior to the Initial Term
Expiration Date or any other Renewal Date (as hereinafter defined) this Lease
shall not have been terminated pursuant to any provision hereof, then on the
Initial Term Expiration Date and on the tenth (10th), twentieth (20th) and
thirtieth (30th) anniversaries of the Initial Term Expiration Date (the Initial
Term Expiration Date and each such anniversary being a "Renewal Date"), the
Term shall be deemed to have been automatically extended for an additional
period of ten (10) years (each such ten (10) year period, a "Renewal Term"),
unless Tenant shall notify Landlord in writing at least one (1) year prior to
the next Renewal Date that Tenant is terminating this Lease as of the next
Renewal Date. If Tenant so notifies Landlord of Tenant's election to terminate
this Lease, Tenant shall deliver to Landlord such additional documents in
recordable form as are necessary to delete from the public records any
reference to the leasehold estate and other rights of Tenant hereunder. Any
such extension of the Term shall be subject to all of the provisions of this
Lease, as the same may be amended, supplemented or modified.
(c) If Tenant exercises its option not to extend or
further extend the Term, or if an Event of Default occurs, then Landlord shall
have the right during the remainder of the Term then in effect and, in any
event, Landlord shall have the right during the last year of the Term, to (i)
advertise the availability of the Leased Premises for sale or reletting and to
erect upon the Leased Premises signs indicating such availability and (ii) show
the Leased Premises to prospective purchasers or tenants or their agents at
such reasonable times as Landlord may select. Tenant may reasonably limit the
extent of any such inspection so as to minimize disclosure by Tenant of
confidential or proprietary products being developed or manufactured by Tenant.
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31
6. Basic Rent. Tenant shall pay to Landlord, as annual
rent for the Leased Premises during the Term, the amounts determined in
accordance with Exhibit "D" hereto ("Basic Rent"). [PORTION OF PARAGRAPH
INTENTIONALLY OMITTED] Basic Rent shall be payable monthly in advance (each
such monthly day being a "Basic Rent Payment Date"). Each such rental payment
shall be made, at Landlord's sole discretion, (a) to Landlord at its address
set forth above and/or to such one or more other Persons, at such addresses and
in such proportions as Landlord may direct by fifteen (15) days' prior written
notice to Tenant (in which event Tenant shall give Landlord notice of each such
payment concurrent with the making thereof), and (b) in Federal Funds.
7. Additional Rent.
(a) Subject to any specific provisions of this Lease to
the contrary, Tenant shall pay and discharge, as additional rent (collectively,
"Additional Rent"):
(i) [INTENTIONALLY OMITTED]
(J) any other items specifically required to
be paid by Tenant under this Lease, which costs and expenses shall include,
without limitation, all Costs, judgments, settlement amounts, Impositions,
insurance premiums, appraisal fees, the cost of performing and reporting Site
Assessments to the extent provided in Paragraph 10(c), the cost of curing any
Environmental Violation, and the cost of complying with all Legal Requirements,
fines, penalties and interest.
(ii) after the date all or any portion of any
installment of Basic Rent is due and not paid, an amount equal to three percent
(3%) of the amount of such unpaid installment or portion thereof ("Late
Charge"), provided, however, that with respect to the first two late payments
of all or any portion of any installment of Basic Rent in any consecutive
twelve (12) month period the Late Charge shall not be due and payable unless
the Basic Rent has not been paid within three (3) Business Days following the
due date thereof;
(iii) a sum equal to any additional sums (including
any late charge, default penalties, interest and fees of Lender's counsel)
which are actually paid by Landlord to any Lender under any Note by reason of
Tenant's late payment or non-payment of Basic Rent or by reason of an Event of
Default or as a result of Tenant's failure to comply with Paragraph 28 hereof;
and
(iv) interest at the rate (the "Default Rate")
equal to the lower of (A) the maximum rate permitted by Law, or (B) three
percent (3%) over the Prime Rate per annum on the following sums until paid in
full: (1) all overdue installments of Basic Rent from the respective due dates
thereof, provided that the Default Rate shall not be due on any installment not
paid as a result of Initial Lender's failure to draw on the Letter of Credit
pursuant to Paragraph 37(b) hereof, (2) all overdue amounts of Additional Rent
relating to obligations which Landlord or Lender shall have paid on behalf of
Tenant, beginning five (5) Business Days after notice of payment thereof by
Landlord or Lender, and (3) all other overdue amounts of Additional Rent, from
the date when any such amount becomes overdue.
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32
(b) Subject to any specific provisions of this Lease to
the contrary, Tenant shall pay and discharge (i) any Additional Rent referred
to in Paragraph 7(a)(i) when the same shall become due, provided that amounts
which are billed to Landlord, Lender or any third party, but not to Tenant,
shall be paid within ten (10) days after Landlord's or Lender's written demand
for payment thereof, and (ii) any other Additional Rent, within fifteen (15)
days following Landlord's demand for payment thereof. At the time Landlord
makes demand for payment, Landlord shall furnish to Tenant reasonably detailed
invoices or statements for all items of Additional Rent paid by Landlord or
Lender.
(c) Notwithstanding anything in this Paragraph 7 to the
contrary, Tenant shall not be responsible for paying any costs of Landlord
and/or any Lender incurred with respect to any sale, transfer, or financing of
the Leased Premises by Landlord unless Tenant purchases the Leased Premises
from Landlord pursuant to any provision of this Lease which requires Tenant to
pay such costs.
8. Net Lease; Non-Terminability.
(a) This is a net lease and all Monetary Obligations
shall be paid without notice or demand and without set-off, counterclaim,
recoupment, abatement, suspension, deferment, diminution, deduction, reduction
or defense (collectively, a "Set-Off").
(b) Except as otherwise expressly provided herein, this
Lease and the rights of Landlord and the obligations of Tenant hereunder shall
not be affected by any event or for any reason, including the following: (i)
any damage to or theft, loss or destruction of any of the Leased Premises, (ii)
any Condemnation, (iii) the prohibition, limitation or restriction of Tenant's
use of any of the Leased Premises, (iv) any eviction by paramount title or
otherwise, (v) Tenant's acquisition of ownership of any of the Leased Premises
other than pursuant to an express provision of this Lease, (vi) any default on
the part of Landlord hereunder or under any Note, Mortgage, Assignment by
Landlord or any other agreement, (vii) any latent or other defect in any of the
Leased Premises, (viii) the breach of any warranty of any seller or
manufacturer of any of the Equipment, (ix) any violation of Paragraph 4(b) or
any other provision of this Lease by Landlord, (x) the bankruptcy, insolvency,
reorganization, composition, readjustment, liquidation, dissolution or
winding-up of, or other proceeding affecting Landlord, (xi) the exercise of any
remedy, including foreclosure, under any Mortgage or Assignment by Landlord,
(xii) any action with respect to this Lease (including the disaffirmance
hereof) which may be taken by Landlord, any trustee, receiver or liquidator of
Landlord or any court under the Federal Bankruptcy Code or otherwise, (xiii)
any interference with Tenant's use of the Leased Premises, (xiv) market or
economic changes, (xv) failure to complete the Tenant Improvements, (xvi)
failure of Landlord to pay Landlord's Share of Project Costs, or (xvi) any
other cause, whether similar or dissimilar to the foregoing, any present or
future Law to the contrary notwithstanding.
(c) Except as may be specifically provided herein to the
contrary, the obligations of Tenant hereunder shall be separate and independent
covenants and agreements, all Monetary Obligations shall continue to be payable
in all events, and the obligations of Tenant hereunder shall continue
unaffected by any breach of any provision hereof by Landlord unless the
requirement to pay or perform the same shall have been terminated pursuant to
an express provision of this Lease. All Rent payable by Tenant hereunder shall
constitute "rent" for all purposes (including Section 502(b)(6) of the
Bankruptcy Code).
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33
(d) Except as otherwise expressly provided in this Lease,
Tenant shall have no right and hereby waives all rights which it may have under
any Law (i) to quit, terminate or surrender this Lease or any of the Leased
Premises, or (ii) to any Set-Off of any Monetary Obligations.
9. Payment of Impositions.
(a) Tenant shall, before interest or penalties are due
thereon, pay and discharge all taxes (including real and personal property,
franchise, sales and rent taxes), all charges for any easement or agreement
maintained for the benefit of any of the Leased Premises, all assessments and
levies, all permit, inspection and license fees, all rents and charges for
water, sewer, utility and communication services relating to the any of Leased
Premises, all ground rents and all other public charges whether of a like or
different nature, even if unforeseen or extraordinary, imposed upon or assessed
against (i) Tenant, (ii) any of the Leased Premises, (iii) Landlord as a result
of or arising in respect of the acquisition, ownership, occupancy, leasing,
use, possession or sale of any of the Leased Premises, any activity conducted
on any of the Leased Premises, or the Rent, or (iv) any Lender by reason of any
Note, Mortgage, Assignment by Landlord or other document evidencing or securing
a Loan and which (as to this clause (iv)) Landlord has agreed to pay
(collectively, the "Impositions"); provided, however, that nothing herein shall
obligate Tenant to pay (A) income, excess profits or other taxes of Landlord
(or Lender) which are determined on the basis of Landlord's (or Lender's) net
income or net worth (unless and only to the extent that such taxes are in lieu
of or a substitute for any other tax, assessment or other charge upon or with
respect to the Leased Premises which, if it were in effect, would be payable by
Tenant under the provisions hereof or by the terms of such tax, assessment or
other charge), (B) any estate, inheritance, succession, gift or similar tax
imposed on Landlord, (C) any capital gains tax imposed on Landlord in
connection with the sale of the Leased Premises to any Person, (D) installments
of principal and/or interest payable by Landlord on any Loan, (E) property
management fees payable by Landlord or (F) increases in real estate taxes which
result from a transfer of the Leased Premises during the first three (3) years
of the Initial Term or from a transfer of the Leased Premises at any time to
any affiliate of Landlord or of Corporate Property Associates 11 Incorporated
or Corporate Property Associates 12 Incorporated. If any Imposition may be
paid in installments without interest or penalty, Tenant shall have the option
to pay such Imposition in installments; in such event, Tenant shall be liable
only for those installments which accrue or become due and payable during the
Term. Tenant shall prepare and file all tax reports required by governmental
authorities which relate to the Impositions. Tenant shall deliver to Landlord
(1) copies of all settlements and notices pertaining to the Impositions which
may be issued by any governmental authority within ten (10) days after Tenant's
receipt thereof, (2) receipts for payment of all taxes required to be paid by
Tenant hereunder within thirty (30) days after the due date thereof and (3)
receipts for payment of all other Impositions within ten (10) days after
Landlord's request therefor.
(b) At any time following the occurrence of a Monetary
Event of Default or at any time following a draw on the Letter of Credit,
Landlord shall have the right to require Tenant to pay to Landlord an
additional monthly sum (each an "Escrow Payment") sufficient to pay the Escrow
Charges (as hereinafter defined) as they become due on an annual basis and in
the amounts actually payable. As used herein, "Escrow Charges" shall mean real
estate taxes on the Leased Premises or payments in lieu thereof and premiums on
any property and general
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34
liability insurance required by this Lease. Landlord shall determine the
amount of the Escrow Charges and of each Escrow Payment. If the Escrow
Payments are held by Lender, the Escrow Payments may be commingled with other
funds of Lender. If the Escrow Payments are held by Landlord, the Escrow
Payments shall not be commingled with other funds of Landlord, shall be
invested and interest thereon shall accrue to the benefit of Tenant. Landlord
shall apply the Escrow Payments to the payment of the Escrow Charges in such
order or priority as Landlord shall determine or as required by law. If at any
time the Escrow Payments theretofore paid to Landlord shall be insufficient for
the payment of the Escrow Charges, Tenant, within ten (10) days after
Landlord's demand therefor, shall pay the amount of the deficiency to Landlord.
10. Compliance with Laws and Easement Agreements;
Environmental Matters.
(a) Tenant shall, at its expense, comply with and conform
to, and cause any other Person occupying any part of the Leased Premises to
comply with and conform to, all Insurance Requirements and Legal Requirements
(including all applicable Environmental Laws). Tenant shall not at any time
(i) cause, permit or suffer to occur any Environmental Violation or (ii) permit
any sublessee, assignee or other Person occupying the Leased Premises under or
through Tenant to cause, permit or suffer to occur any Environmental Violation.
(b) Tenant, at its sole cost and expense, will at all
times promptly and faithfully abide by, discharge and perform all of the
covenants, conditions and agreements contained in any Easement Agreement on the
part of Landlord or the occupier to be kept and performed thereunder. Tenant
will not alter, modify, amend or terminate any Easement Agreement, give any
consent or approval thereunder, or enter into any new Easement Agreement
without, in each case, the prior written consent of Landlord.
(c) Upon prior written notice from Landlord, Tenant shall
permit such persons as Landlord may designate ("Site Reviewers") to visit the
Leased Premises during normal business hours and perform, as agents of Tenant,
environmental site investigations and assessments ("Site Assessments") on the
Leased Premises for the purpose of determining whether there exists on the
Leased Premises any Environmental Violation or any condition which could result
in any Environmental Violation. Such Site Assessments may include both above
and below the ground testing for Environmental Violations and such other tests
as may be necessary, in the opinion of the Site Reviewers, to conduct the Site
Assessments. Tenant shall supply to the Site Reviewers such historical and
operational information regarding the Leased Premises as may be reasonably
requested by the Site Reviewers to facilitate the Site Assessments, and shall
make available for meetings with the Site Reviewers appropriate personnel
having knowledge of such matters. The Cost of any Site Assessment conducted at
the request of Landlord, including any out-of-pocket costs incurred by Tenant,
shall be paid by Landlord unless the Site Reviewers confirm the existence of a
previously undisclosed Environmental Violation, in which case the Cost shall be
paid by Tenant. Landlord shall not have the right to conduct a Site Assessment
more than one time every three years during the Term except that such
limitation shall not apply to any Site Assessment conducted in connection with
a financing, refinancing or sale of the Leased Premises or if Landlord has
reasonable cause to believe that an Environmental Violation exists in violation
of Law or if Landlord is required to conduct a Site Assessment by any
governmental agency or in order to monitor an existing Environmental Violation.
Provided that no Monetary Event of Default shall have occurred and
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35
be continuing, Tenant shall have the right to consent to the selection of the
Site Reviewers, which consent shall not be unreasonably withheld or delayed.
If a Monetary Event of Default exists, Tenant shall not have any right to
consent to the selection of the Site Reviewers so long as the Site Reviewers
shall be a nationally recognized firm of licensed engineers with an office in
San Diego County, experienced in handling environmental matters in such county
and who specialize in (i) conducting environmental site assessments to
determine whether specific properties are in compliance with Environmental Laws
and (ii) formulating, implementing and managing the remediation of the
discharge or release of Hazardous Substances.
(d) If an Environmental Violation occurs or is found to
exist and, in Landlord's reasonable judgment, the cost of remediation of the
same is likely to exceed $500,000, Tenant shall provide to Landlord, within ten
(10) days after Landlord's request therefor, reasonable financial assurances
that Tenant will effect such remediation in accordance with applicable
Environmental Laws. Such financial assurances shall not exceed the financial
assurances that would be required by an applicable governmental agency.
(e) Notwithstanding any other provision of this Lease, if
an Environmental Violation occurs or is found to exist and the Term would
otherwise terminate or expire, then, at the option of Landlord, the Term shall
be automatically extended beyond the date of termination or expiration and this
Lease shall remain in full force and effect beyond such date until the earlier
to occur of (i) the completion of all remedial action in accordance with
applicable Environmental Laws or (ii) the date specified in a written notice
from Landlord to Tenant terminating this Lease.
(f) Tenant shall notify Landlord immediately after
becoming aware of any Environmental Violation (or receipt of formal notice of
any alleged Environmental Violation) or noncompliance with any of the covenants
contained in this Paragraph 10 and shall forward to Landlord immediately upon
receipt thereof copies of all orders, reports, notices, permits, applications
or other communications relating to any such violation or noncompliance.
(g) All future leases, subleases or concession agreements
relating to the Leased Premises entered into by Tenant shall require the other
Person thereto to comply with all Environmental Laws with respect to its use
and occupancy of the Leased Premises.
(h) [INTENTIONALLY OMITTED]
(i) Tenant agrees that, no later than January 31, 1994,
Tenant (1) shall seal all cracks on the floor of the storage room (Room #2) of
the underground parking garage of the Structure known as ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ with silicon caulking or similar material to prevent further seepage of
radon gas and (2) shall provide to Landlord and Initial Lender satisfactory
documentation of such remediation.
11. Liens; Recording.
(a) Tenant shall not, directly or indirectly, create or
permit to be created or to remain and shall promptly discharge or remove any
lien, levy or encumbrance on any of the Leased Premises or on any Rent or any
other sums payable by Tenant under this Lease, other than any Mortgage or
Assignment by Landlord, the Permitted Encumbrances and any mortgage,
-▇▇-
▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ or other charge created by or resulting solely from any act
or omission of Landlord. NOTICE IS HEREBY GIVEN THAT LANDLORD SHALL NOT BE
LIABLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO
TENANT OR TO ANYONE HOLDING OR OCCUPYING ANY OF THE LEASED PREMISES THROUGH OR
UNDER TENANT, AND THAT NO MECHANICS' OR OTHER LIENS FOR ANY SUCH LABOR,
SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF LANDLORD IN AND
TO ANY OF THE LEASED PREMISES. LANDLORD MAY AT ANY TIME, AND AT LANDLORD'S
REQUEST TENANT SHALL PROMPTLY, POST ANY NOTICES ON THE LEASED PREMISES
REGARDING SUCH NON-LIABILITY OF LANDLORD.
(b) Landlord and Tenant shall execute, deliver and
record, file or register (collectively, "record") all such instruments as may
be required or permitted by any present or future Law in order to evidence the
respective interests of Landlord and Tenant in the Leased Premises, and Tenant
shall cause a memorandum of this Lease (or, if such a memorandum cannot be
recorded, this Lease), and any supplement hereto or thereto, to be recorded in
such manner and in such places as may be required or permitted by any present
or future Law in order to protect the validity and priority of this Lease.
12. Maintenance and Repair.
(a) Except for ordinary wear and tear, Tenant shall at
all times maintain the Leased Premises and the Adjoining Property in as good
repair and appearance as they are in on the Occupancy Date and fit to be used
for their intended use in accordance with the practices generally recognized as
then acceptable by other companies engaged in similar industries in San Diego,
California, and, in the case of the Building Systems Equipment, in as good
mechanical condition as it was on the later of the Occupancy Date or the date
of its installation, except for ordinary wear and tear. Tenant shall take such
actions as may be reasonably necessary or appropriate for the preservation and
safety of the Leased Premises. Tenant shall promptly make all Alterations of
every kind and nature, whether foreseen or unforeseen, which may be required to
comply with the foregoing requirements of this Paragraph 12(a). Landlord shall
not be required to make any Alteration, whether foreseen or unforeseen, or to
maintain any of the Leased Premises or Adjoining Property in any way, and
Tenant hereby expressly waives any right which may be provided for in any Law
now or hereafter in effect to make Alterations at the expense of Landlord or to
require Landlord to make Alterations. Any Alteration made by Tenant pursuant
to this Paragraph 12 shall be made in conformity with the provisions of
Paragraph 13.
(b) Except for Permitted Encroachments, if any
Improvement, now or hereafter constructed, shall (i) encroach upon any setback
or any property, street or right-of-way adjoining the Leased Premises, (ii)
violate the provisions of any restrictive covenant affecting the Leased
Premises, (iii) hinder or obstruct any easement or right-of-way to which any of
the Leased Premises is subject or (iv) impair the rights of others in, to or
under any of the foregoing, Tenant shall, promptly after receiving notice or
otherwise acquiring knowledge thereof, either (A) obtain from all necessary
parties waivers or settlements of all claims, liabilities and damages resulting
from each such encroachment, violation, hindrance, obstruction or impairment,
whether the same shall affect Landlord, Tenant or both, or (B) take such action
as shall be
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37
necessary to remove all such encroachments, hindrances or obstructions and to
end all such violations or impairments, including, if necessary, making
Alterations.
13. Alterations and Improvements.
(a) In addition to Alterations required by Paragraphs 12
and 17 Tenant shall have the right, without having to obtain the prior written
consent of Landlord and Lender, to (i) make any Alterations to the Structures
for a cost of not more than [INTENTIONALLY OMITTED] in any one instance, or
(ii) install Building Systems Equipment in the Structures or accessions to the
Building Systems Equipment the cost of which as to such Building Systems
Equipment or series of related Building Systems Equipment, does not exceed
[INTENTIONALLY OMITTED] . The consent of Landlord and Lender shall be required
(A) if a Monetary Event of Default exists, or (B) if the Alterations (or a
series of related Alterations) exceeds [INTENTIONALLY OMITTED] , or (C) if
Tenant desires to remove and not upgrade or replace during the Term any Tenant
Improvements which had an initial cost in the aggregate in excess of
[INTENTIONALLY OMITTED] , or (D) if Tenant desires to construct upon the Land
any additional Improvements, provided that, with respect to (C) and (D) above,
such consent shall not be unreasonably withheld or delayed. In any event, the
consent of Landlord and Lender will not be withheld on the basis of the type of
Alterations (i.e., laboratory or office space) to be constructed.
(b) If Tenant makes any Alterations pursuant to this
Paragraph 13 or Paragraph 36 or as required by Paragraph 12 or 17 (such
Alterations and actions being hereinafter collectively referred to as "Work"),
whether or not Landlord's consent is required, then (i) all such Work shall be
performed by Tenant in a good and workmanlike manner; (ii) all such Work shall
be expeditiously completed in compliance with all Legal Requirements; (iii) all
such Work shall comply with the Insurance Requirements; (iv) if any such Work
involves the replacement of Building Systems Equipment because of additions or
changes to the Structures (as opposed to repairs or replacements of Building
Systems Equipment as part of an on-going maintenance program), all replacements
of Building Systems Equipment shall have a value and useful life equal to the
greater of (A) the value and useful life on the date hereof of the Building
Systems Equipment being replaced, or (B) the value and useful life on the
Occupancy Date of the Building Systems Equipment being replaced, or (C) the
value and useful life of the Building Systems Equipment being replaced
immediately prior to the occurrence of the event which required its
replacement; (v) if any such Work involves the replacement of Building Systems
Equipment or parts thereto in connection with an on-going maintenance program,
reconditioned equipment and parts may be used and upon completion the Building
Systems Equipment need not have a value and useful life greater than the value
and useful life of the Building Systems Equipment or parts being replaced
immediately prior to the occurrence of the event which requires its
replacement; (vi) Tenant shall promptly discharge or remove all liens filed
against any of the Leased Premises arising out of such Work; (vii) Tenant shall
procure and pay for all permits and licenses required in connection with any
such Work; (viii) all such Work shall be subject to this Lease; and (ix) Tenant
shall comply, to the extent requested by Landlord or required by this Lease,
with the provisions of Paragraph 19(a), whether or not such Work involves
restoration of the Leased Premises.
(c) If, after the Occupancy Date, Tenant makes any
Alterations to existing Tenant's Equipment or installs any additional Tenant's
Equipment in the Structures, Tenant shall
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38
retain title to such Alterations and additional Tenant's Equipment ("Tenant
Alterations") (except for replacements of, or repairs to, or substitutions for,
the Structures and Building Systems Equipment) and shall have the right to
remove the same upon the expiration or earlier termination of this Lease,
provided that (1) such removal will not cause material damage to the Leased
Premises, and (2) Tenant promptly repairs any damage caused by such removal.
Title to any Alterations which are not Tenant Alterations shall vest in
Landlord, and Tenant shall not be entitled to remove the same upon the
expiration or earlier termination of this Lease.
14. Permitted Contests.
(a) Notwithstanding any other provision of this Lease,
Tenant shall not be required to (a) pay any Imposition, (b) comply with any
Legal Requirement, (c) discharge or remove any lien referred to any Paragraph
of this Lease except Paragraph 21 or (d) take any action with respect to any
encroachment, violation, hindrance, obstruction or impairment referred to in
Paragraph 12(b) (such non-compliance with the terms hereof being hereinafter
referred to collectively as "Permitted Violations"), so long as at the time of
such contest no Monetary Event of Default or Covenant Event of Default exists
and so long as Tenant shall contest, in good faith, the existence, amount or
validity thereof, the amount of the damages caused thereby, or the extent of
its or Landlord's liability therefor by appropriate proceedings which shall
operate during the pendency thereof to prevent or stay (i) the collection of,
or other realization upon, the Permitted Violation so contested, (ii) the sale,
forfeiture or loss of any of the Leased Premises or any Rent to satisfy or to
pay any damages caused by any Permitted Violation, (iii) any interference with
the use or occupancy of any of the Leased Premises, (iv) any interference with
the payment of any Rent, (v) the cancellation or increase in the rate of any
insurance policy or a statement by the carrier that coverage will be denied or
(vi) the enforcement or execution of any injunction, order or Legal Requirement
with respect to the Permitted Violation.
(b) Tenant shall provide Landlord security which is
satisfactory, in Landlord's reasonable judgment, to assure that such Permitted
Violation is corrected, including all Costs, interest and penalties that may be
incurred or become due in connection therewith. If such security is in the
form of a cash deposit, interest thereon shall accrue for the benefit of
Tenant, and Landlord shall not commingle any such cash security provided by
Tenant with other funds of Landlord. While any proceedings which comply with
the requirements of this Paragraph 14 are pending and the required security is
held by Landlord, Landlord shall not have the right to correct any Permitted
Violation thereby being contested unless Landlord is required by law to correct
such Permitted Violation and Tenant's contest does not prevent or stay such
requirement as to Landlord. Each such contest shall be promptly and diligently
prosecuted by Tenant to a final conclusion, except that Tenant, so long as the
conditions of this Paragraph 14 are at all times complied with, shall have the
right to attempt to settle or compromise such contest through negotiations.
Tenant shall pay any and all losses, judgments, decrees and Costs in connection
with any such contest and shall, promptly after the final determination of such
contest, fully pay and discharge the amounts which shall be levied, assessed,
charged or imposed or be determined to be payable therein or in connection
therewith, together with all penalties, fines, interest and Costs thereof or in
connection therewith, and perform all acts the performance of which shall be
ordered or decreed as a result thereof.
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(c) Notwithstanding the foregoing, no provision of this
Lease shall allow the Tenant to continue any contest or other activity which
shall subject Landlord to any risk of criminal liability.
15. Indemnification.
(a) Tenant shall pay, protect, indemnify, save and hold
harmless Landlord, Lender and all other Persons described in Paragraph 30 (each
an "Indemnitee") from and against any and all liabilities, losses, damages
(including punitive damages), penalties, Costs, causes of action, suits,
claims, demands or judgments of any nature whatsoever, howsoever caused (unless
and to the extent caused by such Indemnitee's gross negligence or willful
misconduct), without regard to the form of action and whether based on strict
liability, gross negligence, negligence or any other theory of recovery at law
or in equity, arising from (i) any matter pertaining to the acquisition (or the
negotiations leading thereto), ownership, use, non-use, occupancy, operation,
condition, design, construction, maintenance, repair or restoration of the
Leased Premises or Adjoining Property, (ii) any casualty in any manner arising
from the Leased Premises or Adjoining Property, whether or not Landlord has or
should have knowledge or notice of any defect or condition causing or
contributing to said casualty, (iii) any violation by Tenant of any provision
of this Lease, any contract or agreement to which Tenant is a party, any Legal
Requirement or any Permitted Encumbrance, (iv) any alleged, threatened or
actual Environmental Violation, including (A) liability for response costs and
for costs of removal and remedial action incurred by the United States
Government, any state or local governmental unit or any other Person, or
damages from injury to or destruction or loss of natural resources, including
the reasonable costs of assessing such injury, destruction or loss, incurred
pursuant to Section 107 of CERCLA, or any successor section or act or provision
of any similar state or local Law, (B) liability for costs and expenses of
abatement, correction or clean-up, fines, damages, response costs or penalties
which arise from the provisions of any of the other Environmental Laws and (C)
liability for personal injury or property damage arising under any statutory or
common-law tort theory, including damages assessed for the maintenance of a
public or private nuisance or for carrying on of a dangerous activity or (v)
any claim against an Indemnitee under that certain Indemnity Agreement of even
date executed by Landlord and other Persons in favor of Initial Lender.
(b) In case any action or proceeding is brought against
any Indemnitee by reason of any such claim, such Indemnitee shall promptly
notify Tenant in writing of any such action or proceeding. If an Indemnitee
fails to give Tenant prompt notice of any such claim and Tenant is prejudiced
as a result of Indemnitee's delay, Tenant shall not be obligated to indemnify
Indemnitee to the extent Tenant is thereby prejudiced. Upon receipt of notice
from any Indemnitee, Tenant shall, subject to the preceding sentence, resist or
defend such action or proceeding by retaining counsel reasonably satisfactory
to such Indemnitee, and such Indemnitee will cooperate and assist in the
defense of such action or proceeding if reasonably requested so to do by
Tenant. Any Indemnitee may retain separate counsel to represent Indemnitee,
but only at such Indemnitee's sole cost and expense.
(c) The obligations of Tenant under this Paragraph 15
shall survive any termination or expiration of this Lease.
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40
16. Insurance.
(a) Tenant shall maintain the following insurance on or
in connection with the Leased Premises:
(i) Insurance against physical loss or damage to
the Improvements as provided under a standard "All Risk" property policy
including but not limited to flood (if the Leased Premises are in a flood zone)
and earthquake coverage. The amount of coverage shall not be less than the
actual replacement cost of the Improvements, except for the Flood and
Earthquake insurance which shall be provided with limits of $5,000,000 and
$10,000,000 respectively. Such policies shall contain deductibles of not more
than $100,000, except for Flood and Earthquake Insurance which shall have the
customary deductibles reasonably available for such properties.
(ii) Commercial General Liability Insurance
against claims for personal and bodily injury, death or property damage
occurring on, in or as a result of the use of the Leased Premises, in an amount
not less than $10,000,000 per occurrence/annual aggregate, including but not
limited to Garagekeepers Liability, Host Liquor Liability, and all other
coverage extensions that are usual and customary for properties of this size
and type.
(iii) Worker's Compensation Insurance covering all
of the Tenant's employees for claims for death, disease or bodily injury that
may be asserted against Tenant. In lieu of such Worker's Compensation
Insurance, a program of self-insurance complying with the rules, regulations
and requirements of the appropriate agency of the State.
(iv) Comprehensive Boiler and Machinery Insurance
including but not limited to Service Interruption, Expediting Expenses, Ammonia
Contamination in an amount not less than $5,000,000 for damage to property
resulting from such covered perils as found in a standard Comprehensive Boiler
and Machinery Policy. Such policies may contain a deductible not in excess of
$100,000.
(v) Business Income/Interruption Insurance to
include Loss of Rents on an Actual Loss Sustained basis with a period of
indemnity not less than one year from the time of loss. Such insurance shall
name Landlord and Lender as "loss payee" solely with respect to Rent payable to
or for the benefit of Landlord under this Lease.
(vi) During construction of the Tenant
Improvements and during any period in which substantial Alterations at the
Leased Premises are being undertaken, (A) Builder's Risk Insurance covering the
total completed value including any "soft costs" with respect to the
Improvements being altered or repaired (on a completed value, non-reporting
basis), replacement cost of work performed and equipment, supplies and
materials furnished in connection with such construction or repair of
Improvements and (B) General Liability, Worker's Compensation and Automobile
Liability Insurance with respect to the Improvements being constructed, altered
or repaired.
(vii) Such other insurance (or other terms with
respect to any insurance required pursuant to this Paragraph 16, including
without limitation amounts of coverage, deductibles, form of mortgagee clause)
on or in connection with any of the Leased Premises as
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Landlord or Lender may reasonably require, which at the time is usual and
commonly obtained in connection with properties located in the greater San
Diego area and similar in type of building size and use to the Leased Premises.
(b) The insurance required by Paragraph 16(a) shall be
written by companies which have a Best's rating of A:X or above and are
approved to write insurance policies by the State Insurance Department of
California. The insurance policies (i) shall be in amounts sufficient at all
times to satisfy any coinsurance requirements thereof and (ii) shall (except
for the worker's compensation insurance referred to in Paragraph 16(a)(iii)
hereof) name Landlord, Tenant and Lender as insured parties, as their
respective interests may appear. If said insurance or any part thereof shall
expire, be withdrawn, become void for any reason whatsoever, Tenant shall
immediately obtain new or additional insurance to comply with the requirements
of this Lease.
(c) All proceeds of any insurance required under clauses
(i), (ii) (except proceeds payable to a Person other than Tenant, Landlord or
Lender), (iv) and (v) of Paragraph 16(a) shall be payable to Landlord and
Tenant as their respective interests may appear or, if required by the
Mortgage, to Lender and with respect to proceeds of insurance described in
Paragraph (a)(v) paid to Landlord. Tenant shall receive a credit against
installments of Equity Rent to the extent such proceeds are received by
Landlord and Debt Rent received by Lender on behalf of Landlord. Each
insurance policy referred to in clauses (i), (iv), (v) and (vi) of Paragraph
16(a) shall contain standard non- contributory mortgagee clauses in favor of
and acceptable to Lender. Each policy required by any provision of Paragraph
16(a), except clause (iii) thereof, shall provide that it may not be canceled
except after thirty (30) days' prior notice to Landlord and Lender. Each such
policy shall also provide that any loss otherwise payable thereunder shall be
payable notwithstanding (i) any act or omission of the Landlord or Tenant which
might, absent such provision, result in a forfeiture of all or a part of such
insurance payment, (ii) the occupation or use of any of the Leased Premises for
purposes more hazardous than those permitted by the provisions of such policy,
(iii) any foreclosure or other action or proceeding taken by Lender pursuant to
any provision of the Mortgage, Note, Assignment by Landlord or other document
evidencing or securing the Loan upon the happening of an event of default
therein or (iv) any change in title to or ownership of any of the Leased
Premises.
(d) Tenant shall pay as they become due all premiums for
the insurance required by Paragraph 16(a), shall renew or replace each policy
and deliver to Landlord and Lender evidence of the payment of the full premium
therefor or installment then due at least thirty (30) days prior to the
expiration date of such policy, and Tenant shall deliver evidence of insurance
acceptable to Landlord and Lender or, if requested by Landlord or Lender,
certified copies of all policies required within thirty (30) days prior to the
expiration date of such policy.
(e) Anything in this Paragraph 16 to the contrary
notwithstanding, any insurance which Tenant is required to obtain pursuant to
Paragraph 16(a) may be carried under a "blanket" or umbrella policy or policies
covering other properties or liabilities of Tenant. The amount of the total
insurance allocated to the Leased Premises, which amount shall be not less than
the amounts required pursuant to this Paragraph 16, shall be specified either
(i) in each such "blanket" or umbrella policy or (ii) in a written statement,
which Tenant shall deliver to Landlord, from the insurer thereunder.
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(f) Tenant shall promptly comply with and conform to (i)
all provisions of each insurance policy required by this Paragraph 16 and (ii)
all requirements of the insurers thereunder applicable to any of the Leased
Premises or to the use, manner of use, occupancy, possession, operation,
maintenance, alteration or repair of any of the Leased Premises, even if such
compliance necessitates Alterations or results in interference with the use or
enjoyment of any of the Leased Premises.
(g) Tenant shall not carry separate insurance concurrent
in form or contributing in the event of a Casualty with that required in this
Paragraph 16 unless (i) Landlord and Lender are included therein as named
insureds, with loss payable as provided herein, and (ii) such separate
insurance complies with the other provisions of this Paragraph 16. Tenant
shall immediately notify Landlord of such separate insurance. However, Tenant
is permitted to carry insurance limits in excess of the amounts required by
Paragraph 16 for Tenant's own protection and Tenant is not required to include
Landlord and Lender as named insureds as respects these excess insurances.
(h) All policies except for Worker's Compensation
Insurance shall contain effective waivers by the carrier against all claims for
insurance premiums against Landlord and shall contain full waivers of
subrogation against the Landlord. With regard to Worker's Compensation
Insurance, a waiver of subrogation will be provided to the extent reasonably
commercially available.
17. Casualty and Condemnation.
(a) Subject to Paragraph 17(b) and the immediately
following sentence, Landlord and/or Lender shall be entitled to adjust, collect
and compromise insurance claims which relate to any Casualty involving property
damage to the Leased Premises. Notwithstanding anything in this Lease to the
contrary, Tenant shall be entitled to adjust, collect and compromise all
insurance claims which relate to: (i) the Business Income/Interruption
Insurance provided for in Paragraph 16(a)(v), subject, however, to Landlord's
rights to Rent; (ii) Tenant's Equipment; and (iii) any other insurance claim
not involving property damage to the Leased Premises.
(b) If any Casualty in excess of Fifty Thousand Dollars
($50,000) occurs, Tenant shall give Landlord and Lender immediate notice
thereof. Except as specifically provided for in the following sentence,
Landlord and Lender are hereby authorized to adjust, collect and compromise, in
their discretion and upon notice to Tenant (except that no notice to Tenant
shall be required if a Monetary Event of Default has occurred and is
continuing), all claims relating to any Casualty and to execute and deliver on
behalf of Tenant all necessary proofs of loss, receipts, vouchers and releases
required by the insurers. Provided that no Monetary Event of Default has
occurred and is continuing, Tenant shall be entitled to adjust, collect and
compromise any Net Award that is less than Fifty Thousand Dollars ($50,000)
without any notice to or consent of Landlord or Lender and shall be entitled to
participate with Landlord and Lender in any adjustment, collection and
compromise of the Net Award payable in connection with a Casualty that is
reasonably estimated by Landlord and Lender to be more than Fifty Thousand
Dollars ($50,000). Tenant agrees to sign, upon the request of Landlord or
Lender, all such proofs of loss, receipts, vouchers and releases. If Landlord
or Lender so requests, Tenant shall adjust, collect and compromise any and all
such claims equal to or in
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excess of Fifty Thousand Dollars ($50,000), and Landlord and Lender shall have
the right to join with Tenant therein. Any adjustment, settlement or
compromise of any such claim equal to or in excess of Fifty Thousand Dollars
($50,000) shall be subject to the prior written approval of Landlord and
Lender, and Landlord and Lender shall have the right to prosecute or contest,
or to require Tenant to prosecute or contest, any such claim, adjustment,
settlement or compromise. Each insurer is hereby authorized and directed to
make payment under said policies in excess of Fifty Thousand Dollars ($50,000),
directly to Landlord or, if required by the Mortgage, to Lender instead of to
Landlord and Tenant jointly. Tenant hereby appoints each of Landlord and Lender
as Tenant's attorneys-in-fact to endorse any draft for payments to be made to
Landlord and/or Lender. Any payment of a Net Award of Fifty Thousand Dollars
($50,000) or less shall be paid directly to Tenant by the insurance company.
(c) Tenant, immediately upon receiving a Condemnation
Notice, shall notify Landlord and Lender thereof. If Landlord receives a
Condemnation Notice, Landlord shall give Tenant and Lender prompt notice
thereof. Except as specifically provided in the following sentence, Landlord
and Lender are authorized to collect, settle and compromise, in their
discretion (and, if no Monetary Event of Default exists, upon notice to
Tenant), the amount of any Net Award. Provided that no Monetary Event of
Default has occurred and is continuing, Tenant shall be entitled to participate
with Landlord and Lender in any Condemnation proceeding or negotiations under
threat thereof and to contest the Condemnation or the amount of the Net Award
therefor. No agreement with any condemnor in settlement or under threat of any
Condemnation shall be made by Tenant without the written consent of Landlord
and Lender. Subject to the provisions of this Paragraph 17(c), Tenant hereby
irrevocably assigns to Landlord any award or payment to which Tenant is or may
be entitled by reason of any Condemnation, whether the same shall be paid or
payable for Tenant's leasehold interest hereunder or otherwise. Nothing in
this Lease shall, however, impair Tenant's right to any award or payment on
account of Tenant's Equipment, moving expenses or loss of business, if
available, to the extent that and so long as (i) Tenant shall have the right to
make, and does make, a separate claim therefor against the condemnor and (ii)
such claim does not in any way reduce either the amount of the award otherwise
payable to Landlord for the Condemnation of Landlord's fee interest in the
Leased Premises or the amount of the award (if any) otherwise payable for the
Condemnation of Tenant's leasehold interest hereunder.
(d) If any Partial Casualty (whether or not insured
against) or Partial Condemnation shall occur, this Lease shall continue,
notwithstanding such event, and there shall be no abatement or reduction of any
Monetary Obligations, except as provided in Paragraph 17(e) and 19(c).
Promptly after such Partial Casualty or Partial Condemnation, Tenant, as
required in Paragraph 12(a), shall commence and diligently continue to restore
the Leased Premises as nearly as possible to their value, condition and
character immediately prior to such event. Any Net Award of such Partial
Casualty or Partial Condemnation payable to Landlord or Lender shall be made
available to Tenant for restoration as promptly as practicable in accordance
with and subject to the provisions of Paragraph 19(a). If any Casualty or
Condemnation which constitutes an Early Termination Event shall occur, Tenant
shall comply with the terms and conditions of Paragraph 18.
(e) In the event of a Requisition of any of the Leased
Premises the Net Award payable by reason of such Requisition shall, at the
election of Landlord, either be (i) retained by Landlord and credited against
installments of Basic Rent for the period of such
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Requisition as the same shall become due and payable or (ii) paid to Tenant on
a monthly basis in an amount equal to the installment of Basic Rent then due
and payable until such Net Award has been applied in full or until the Term has
expired, whichever first occurs. Any portion of such Net Award which is
allocable to any period after the expiration of the Term shall be retained by
Landlord.
18. Early Termination Events.
(a) If (i) the Leased Premises shall be taken in its
entirety by a Taking or (ii) all or a substantial portion of the Leased
Premises shall be damaged or destroyed by a Casualty or any substantial portion
of the Leased Premises shall be taken by a Taking and, in the case of (i)
above, Tenant certifies and covenants to Landlord that it will abandon its
operations at the Leased Premises for three (3) years following the date of the
Taking or Casualty (except that no such certification and covenant shall be
required if Tenant notifies Landlord that it is electing to make an offer to
terminate this Lease for an Early Termination Amount equal to [INTENTIONALLY
OMITTED]), as the case may be (each of the events described in the above
clauses (i) and (ii) shall hereinafter be referred to as an "Early Termination
Event"), then (x) in the case of (i) above, Tenant shall be obligated, within
thirty (30) days after Tenant receives a Condemnation Notice and (y) in the
case of (ii) above, Tenant shall have the option, within thirty (30) days after
Tenant receives a Condemnation Notice or thirty (30) days after the Casualty,
as the case may be, to give to Landlord written notice of the Tenant's offer to
terminate this Lease (an "Early Termination Notice") in the form described in
Paragraph 18(b). Notwithstanding anything in this Lease to the contrary, the
provisions of this Paragraph 18(a) shall not be applicable if the Net Award
received by Landlord is equal to or greater than [INTENTIONALLY OMITTED], it
being agreed that Tenant shall have the right to provide funds in such amount
as may be necessary to make the actual amount of the Net Award received by
Landlord as a result of the Casualty or Taking equal to [INTENTIONALLY
OMITTED].
(b) An Early Termination Notice shall contain (i) notice
of Tenant's intention to terminate this Lease on the first Basic Rent Payment
Date (the "Early Termination Date") which occurs at least sixty (60) days after
the date of receipt ("Notice Receipt Date") by Landlord of the Early
Termination Notice, (ii) a binding and irrevocable offer of Tenant to pay the
Early Termination Amount and (iii) if the Early Termination Event is an event
described in Paragraph 18(a)(ii), the certification and covenants described in
the foregoing Paragraph 18(a) and a certified resolution of the Board of
Directors of Tenant authorizing the same (unless Tenant elects to pay an Early
Termination Amount equal to [INTENTIONALLY OMITTED].
(c) If Landlord shall reject such offer to terminate this
Lease by written notice to Tenant (a "Rejection"), which Rejection shall
contain the written consent of Lender, not later than forty-five (45) days
following the Notice Receipt Date, then this Lease shall terminate as of the
Early Termination Date; provided, however, that, if Tenant has not satisfied
all Monetary Obligations and all other obligations and liabilities under this
Lease which have arisen on or prior to the Early Termination Date
(collectively, "Remaining Obligations") on the Early Termination Date, then
Landlord may, at its option, extend the date on which this Lease may terminate
to a date which is no later than the first Basic Rent Payment Date after the
Early Termination Date on which Tenant has satisfied all Remaining Obligations.
Upon such termination (i) all obligations of Tenant hereunder shall terminate
except for any Surviving Obligations, (ii) Tenant shall immediately vacate and
shall have no further right, title or interest
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in or to any of the Leased Premises and (iii) the Net Award shall be retained
by Landlord. Notwithstanding anything to the contrary hereinabove contained,
if Tenant shall have received a Rejection and, on the date when this Lease
would otherwise terminate as provided above, Landlord shall not have received
the full amount of the Net Award payable by reason of the applicable Early
Termination Event due to any action by Tenant, then the date on which this
Lease is to terminate automatically shall be extended to the first Basic Rent
Payment Date after the receipt by Landlord of the full amount of the Net Award;
provided, however, that, if Tenant has not satisfied all Remaining Obligations
on such date, then Landlord may, at its option, extend the date on which this
Lease may terminate to a date which is no later than the first Basic Rent
Payment Date after such date on which Tenant has satisfied all such Remaining
Obligations.
(d) Unless Tenant shall have received a Rejection not
later than the forty-fifth (45th) day following the Notice Receipt Date,
Landlord shall be conclusively presumed to have accepted such offer. If such
offer is accepted by Landlord then, on the Early Termination Date, Tenant shall
pay to Landlord the Early Termination Amount and all Remaining Obligations and,
if requested by Tenant, Landlord and Lender shall (i) convey to Tenant the
Leased Premises or the remaining portion thereof, if any, and (ii) pay to or
assign to Tenant their entire interest in and to the Net Award, all in
accordance with Paragraph 20.
19. Restoration; Reduction of Rent.
(a) The Net Award shall be made available by Landlord for
the restoration of the Leased Premises, and, if the Net Award is less than
[INTENTIONALLY OMITTED] and at the date of payment no Monetary Event of Default
exists, the Net Award shall be paid directly to Tenant in which event Tenant
shall comply with the provisions of Paragraph 13(b) and Paragraph 19(a)(iii) in
connection with such restoration. If the Net Award is [INTENTIONALLY OMITTED]
or more, Landlord (or Lender if required by any Mortgage) shall hold such Net
Award in a fund (the "Restoration Fund") and disburse amounts from the
Restoration Fund only in accordance with the following conditions:
(i) prior to commencement of restoration, the
architects, contracts, contractors, plans and specifications for the
restoration shall have been reasonably approved by Landlord and Lender if the
cost of restoration exceeds [INTENTIONALLY OMITTED] as soon as reasonably
practical;
(ii) at the time of any disbursement, no Event of
Default shall exist and no mechanics' or materialmen's liens shall have been
filed against any of the Leased Premises and remain undischarged;
(iii) disbursements shall be made from time to time
in an amount not exceeding the cost of the work completed since the last
disbursement, upon receipt of (A) satisfactory evidence, including architects'
certificates, of the stage of completion, the estimated total cost of
completion and performance of the work to date in a good and workmanlike manner
in accordance with the contracts, plans and specifications, (B) waivers of
mechanics liens, (C) contractors' and subcontractors' sworn statements as to
completed work and the cost thereof for which payment is requested, (D) other
evidence of cost and payment so that Landlord can verify that the amounts
disbursed from time to time are represented by work that is
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completed, in place and free and clear of mechanics' and materialmen's lien
claims and (E) an endorsement to Landlord's and Lender's title insurance
policies insuring against any liens arising from the restoration;
(iv) each request for disbursement shall be
accompanied by a certificate of Tenant, signed by the president or a vice
president of Tenant, describing the work for which payment is requested,
stating the cost incurred in connection therewith, stating that Tenant has not
previously received payment for such work and, upon completion of the work,
also stating that the work has been fully completed and complies with the
applicable requirements of this Lease;
(v) the Restoration Fund shall be held in a
separate account and invested in any of the following investments and for such
maturities as Landlord and Tenant shall agree: obligations of the United
States, its agencies, or United States Government sponsored enterprises or
obligations, the principal of and interest on which are guaranteed by the
United States or its agencies or obligations of a state, a territory, or a
possession of the United States, or any political subdivision of any of the
foregoing or of the District of Columbia, which investment shall be graded in
the highest three (3) major grades as determined by at least one (1) national
rating service, or banker's acceptances, commercial accounts, certificates of
deposit, or depository receipts issued by a bank, trust company, savings and
loan association, savings bank, credit union or other financial institution
whose deposits are, as appropriate, insured by the Federal Deposit Insurance
Corporation or the National Credit Union Administration or any successor
entity, which investment shall be rated at the time of purchase within the two
(2) highest classifications established by at least one (1) national rating
service, and which matures within one hundred eighty (180) days; and
(vi) such other reasonable conditions as Landlord
or Lender may impose.
(b) Prior to commencement of restoration and at any time
during restoration, if the estimated cost of completing the restoration work
free and clear of all liens, as determined by Landlord, exceeds the amount of
the Net Award available for such restoration, the Tenant shall provide to
Landlord and Lender assurances reasonably satisfactory to Landlord and Lender
of the availability of funds necessary to complete such restoration work. Any
sums deposited by Tenant in the Restoration Fund which remain in the
Restoration Fund upon completion of restoration shall be refunded to Tenant.
For purposes of determining the source of funds with respect to the disposition
of funds remaining after the completion of restoration, the Net Award shall be
deemed to be disbursed prior to any amount added by Tenant.
(c) If any sum remains in the Restoration Fund after
completion of the restoration and any refund to Tenant pursuant to Paragraph
19(b), such sum (the "Remaining Sum") shall be retained by Landlord or, if
required by a Note or Mortgage, paid by Landlord to a Lender. If the Remaining
Sum is (i) retained by Landlord, that portion of each installment of Basic Rent
payable on or after the Retention Date shall be reduced by the amount, if any,
of the Remaining Sum not required to be paid to Lender, or (ii) paid to Lender,
then each installment of Basic Rent thereafter payable shall be reduced in the
same amount as payments are reduced under any Note if the Loan corresponding to
such Note is reamortized to reflect such payment, in each case until such
Remaining Sum has been applied in full or until the Term has expired,
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whichever occurs first. Upon the expiration of the Term, any portion of the
Remaining Sum which has not been so applied shall be retained by Landlord.
20. Procedures Upon Purchase by Tenant. [INTENTIONALLY
OMITTED].
21. Assignment and Subletting; Prohibition against
Leasehold Financing.
(a) Tenant shall have the right, upon thirty (30) days
prior written notice to Landlord, with no consent of Landlord whatsoever being
required or necessary ("Preapproved Assignment") to assign this Lease in any of
the circumstances set forth in subparagraphs (i) and (ii) below;
(i) to any Person ("Preapproved Assignee")
(whether by operation of law or in connection with the transfer or sale of all
or substantially all of Tenant's business or the merger or consolidation of
Tenant or similar transaction) which, immediately following such assignment has
a publicly traded unsecured senior debt rating of "Baa2" or better from ▇▇▇▇▇'▇
Investors Services, Inc. or a rating of "BBB" or better from Standard & Poor's
Corporation, and in the event all of such rating agencies cease to furnish such
ratings, then a comparable rating by any rating agency reasonably acceptable to
Landlord and Lender; or
(ii) to an Affiliate of Tenant.
(b) Tenant shall have the right, upon thirty (30) days
prior written notice to Landlord and Lender, to sublet (i) up to but not in
excess of twenty-five percent (25%) of the leasable space in the Structures to
any Person, or (ii) in excess of twenty-five percent (25%) of the leasable
space within the Structures to any Person who has, immediately following such
sublease, the debt rating described in Paragraph (a)(i) above, or (iii) to an
Affiliate of Tenant, in any such case with no consent of Landlord whatsoever
being required or necessary with respect thereto ("Preapproved Sublet").
(c) Except as provided in Paragraphs 21(a) and (b) above,
Tenant shall not have the right to assign this Lease or its interest herein or
to sublease more than twenty-five percent (25%) of the leasable space in the
Structures to any Person, without having first obtained the prior written
consent of Landlord, which consent shall not be unreasonably withheld,
conditioned or delayed, subject, however, to subparagraphs (i) and (ii) below.
(i) If the proposed assignment will be to a
Person which is not an Affiliate of Tenant's or to a Preapproved Assignee,
Landlord shall have the right to consider the following criteria as they relate
to the proposed assignee:
(A) its credit history;
(B) its capital structure, net worth and
unsecured senior debt rating;
(C) its management and real estate management
record;
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(D) its operating history;
(E) its intended use of the Leased Premises;
and
(F) other factors associated with the
proposed assignee's business as it relates to the use of the Leased Premises,
including potential environmental concerns and liabilities.
(ii) In exercising its right of approval under
this Paragraph 21(c) with respect to a sublease which is not a Preapproved
Sublet, Landlord shall limit its consideration to whether or not the proposed
sublessee, by virtue of its business, is significantly more likely to expose
the Leased Premises to a higher risk of Environmental Violation than Tenant in
Tenant's use of the Leased Premises prior to the date of such subletting.
(d) Any Preapproved Assignee or other assignee under any
assignment to which Landlord has consented shall expressly assume all the
obligations of Tenant hereunder pursuant to a written instrument delivered to
Tenant at the time of such assignment. In addition, within ten (10) days after
execution of any assignment, Tenant shall deliver to Landlord and Lender a
conformed copy thereof.
(e) No sublease or assignment entered into in accordance
with the provisions of this Paragraph 21 shall affect or reduce any obligations
of Tenant or rights of Landlord hereunder, and all obligations of Tenant
hereunder shall continue in full effect as the obligations of a principal and
not a guarantor or surety, as though no subletting or assignment had been made.
(f) With respect to any Preapproved Assignment or
Preapproved Sublet, Tenant shall provide to Landlord information reasonably
required by Landlord to establish that any proposed Preapproved Assignment or
Preapproved Sublet satisfies the criteria set forth above, it being agreed that
Tenant shall not be obligated to disclose to Landlord any confidential or
proprietary information.
(g) As of the date hereof, portions of the Structures are
subject to certain leases ("Existing Leases") described in Exhibit "F". Tenant
covenants and agrees that it has provided to Landlord true and correct copies
of the Existing Leases, that it will not extend the term of any Existing Lease
(except pursuant to any option contained therein that is exercised by the
tenant thereunder) but will enter into a new lease with any Tenant that desires
to extend its Existing Lease, and that any such new lease will expressly
provide that it is subject and subordinate to the terms of this Lease and the
Mortgage. It is understood that the Leased Premises include the space leased
under the Existing Leases.
(h) As security for performance of its obligations under
this Lease, Tenant hereby grants, conveys and assigns to Landlord all right,
title and interest of Tenant in and to all Existing Leases and any subleases
hereinafter entered into for any or all of the Leased Premises (the Existing
Leases and future subleases, collectively, the "Subleases"), any and all
extensions, modifications and renewals thereof and all rents, issues and
profits therefrom. Landlord hereby grants to Tenant a license to collect and
enjoy all rents and other sums of money payable under any Sublease of any of
the Leased Premises; provided, however, that following the occurrence
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of any Event of Default Landlord shall have the absolute right at any time upon
notice to Tenant and any subtenants to revoke said license and to collect such
rents and sums of money and to retain the same. If Landlord collects such
rents and sums of money, Tenant shall receive a credit against installments of
Basic Rent or against damages (as the case may be) equal to any basic rent
collected by Landlord under the Subleases, less reasonable Costs incurred by
Landlord in connection with collecting from defaulting tenants or subtenants
which are not paid or reimbursed by such tenants. Tenant shall not consent to,
cause or allow any extension of the terms of any of the Subleases (except to
the extent that such Subleases already contain options to extend) or any
reduction in the rentals payable thereunder, without the prior written approval
of Landlord, which consent shall not be unreasonably withheld. In addition,
Tenant shall not accept any rents more than thirty (30) days in advance of the
accrual thereof (other than security deposits and first month's rent), permit
anything to be done, the doing of which, or omit or refrain from doing
anything, the omission of which, will or could be a breach of or default in the
terms of any of the Subleases.
(i) Tenant shall not have the power to mortgage, pledge
or otherwise encumber its interest under this Lease or any Sublease, and any
such mortgage, pledge or encumbrance made in violation of this Paragraph 21
shall be void.
(j) Subject to Tenant's rights under Paragraph 9(a) and
Paragraph 35, Landlord may sell or transfer the Leased Premises at any time
without Tenant's consent to any third party (each a "Third Party Purchaser").
In the event of any such transfer, Tenant shall attorn to any Third Party
Purchaser as Landlord so long as such Third Party Purchaser assumes in writing
the obligations of Landlord hereunder and Third Party Purchaser and Landlord
notify Tenant in writing of such transfer. At the request of Landlord, Tenant
will execute such documents confirming the agreement referred to above and such
other agreements as Landlord may reasonably request, provided that such
agreements do not increase the liabilities and obligations of Tenant hereunder.
22. Events of Default.
(a) The occurrence of any one or more of the following
(after expiration of any applicable cure period as provided in Paragraph 22(c))
shall, at the sole option of Landlord, constitute an "Event of Default" under
this Lease:
(i) Subject to the provisions of Paragraph 29(a),
a failure by Tenant to make any payment of any Monetary Obligation, regardless
of the reason for such failure;
(ii) Subject to the provisions of Paragraph 14, a
failure by Tenant duly to perform and observe, or a violation or breach of, any
other provision hereof in any material respect not otherwise specifically
mentioned in this Paragraph 22(a); provided, however, that any failure to
provide the insurance required by Paragraph 16 (except earthquake and flood
insurance if such coverages are not available in the Southern California area)
or any uncured Environmental Violation with respect to the Leased Premises
shall be deemed to be material;
(iii) any representation or warranty made by Tenant
herein or in any certificate, demand or request made pursuant hereto proves to
be incorrect, now or hereafter, in any material respect;
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(iv) a default beyond any applicable cure period
by Tenant in any payment of principal or interest on any obligations for
borrowed money having an original principal balance of $10,000,000 or more in
the aggregate, or in the performance of any other provision contained in any
instrument under which any such obligation is created or secured (including the
breach of any covenant thereunder), if an effect of such default is to cause,
or permit any Person to cause, such obligation to become due prior to its
stated maturity;
(v) a default by Tenant beyond any applicable
cure period in the payment of rent or any other monetary obligation under any
other leases in the United States with rental obligations over the terms
thereof of $5,000,000 or more in the aggregate;
(vi) a final, non-appealable judgment or judgments
for the payment of money in excess of $15,000,000 in the aggregate shall be
rendered against Tenant and the same shall remain undischarged for a period of
sixty (60) consecutive days;
(vii) a Covenant Event of Default shall exist;
(viii) Tenant shall (A) voluntarily be adjudicated a
bankrupt or insolvent, (B) seek or consent to the appointment of a receiver or
trustee for itself or for the Leased Premises, (C) file a petition seeking
relief under the bankruptcy or other similar laws of the United States, any
state or any jurisdiction, (D) make a general assignment for the benefit of
creditors, or (E) be unable to pay its debts as they mature;
(ix) a court shall enter an order, judgment or
decree appointing, without the consent of Tenant, a receiver or trustee for it
or for any of the Leased Premises or approving a petition filed against Tenant
which seeks relief under the bankruptcy or other similar laws of the United
States, any state or any jurisdiction, and such order, judgment or decree shall
remain undischarged or unstayed ninety (90) days after it is entered;
(x) either of the primary Structures shall have
been vacated for one hundred twenty (120) days or abandoned or Tenant shall
fail to occupy the Leased Premises for normal business operations within sixty
(60) days after the Occupancy Date;
(xi) Tenant shall be liquidated or dissolved or
shall begin proceedings towards its liquidation or dissolution except in
connection with a Preapproved Assignment pursuant to the terms of Paragraph
21(a) of this Lease;
(xii) the estate or interest of Tenant in any of
the Leased Premises shall be levied upon or attached in any proceeding and such
estate or interest is about to be sold or transferred or such process shall not
be vacated or discharged within ninety (90) days after it is made;
(xiii) a failure by Tenant to perform or observe, or
a violation or breach of, the Acknowledgment, Subordination, Non-Disturbance
and Attornment Agreement of even date (the "Subordination Agreement") among
Landlord, Initial Lender and Tenant or any other document between Tenant and
Lender, if such failure, violation or breach gives rise to a default beyond any
applicable cure period with respect to any Loan;
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(xiv) Tenant shall sell or transfer all or substantially all
of its assets, except to a Preapproved Assignee to whom this Lease has been
assigned pursuant to the terms of Paragraph 21(a)(i) or except in a cash
transaction which results in the retention by Tenant of all of the proceeds of
such sale (net of normal and customary closing costs);
(xv) an Event of Default (as defined in the Construction
Management Agreement) shall exist under the Construction Management Agreement
beyond any applicable cure period;
(xvi) Tenant shall fail to restore any amounts drawn under
the Letter of Credit within one hundred twenty (120) days following the date of
such draw or shall fail to deliver to Landlord any Letter of Credit required
under Paragraph 29 within the applicable time period specified therein; or
(xvii) The Initial Lender shall draw all of the Letter of
Credit following the occurrence of any of the events set forth in Paragraph
37(a)(i), (ii), (iii), (iv) or (v).
(b) No notice or cure period shall be required in any one
or more of the following events:
(A) the occurrence of an Event of Default under
clause (i) (except as otherwise set forth below), (iii), (iv), (v), (vi),
(vii), (viii), (ix), (x), (xi), (xii), (xiii), (xiv), (xv), (xvi) or (xvii) of
Paragraph 22(a); or
(B) the default consists of a failure to provide any
insurance required by Paragraph 16 except for the failure to provide earthquake
or flood insurance if the same is not available or an assignment or sublease
entered into in violation of Paragraph 21; or
(C) the default is such that any delay in the
exercise of a remedy by Landlord would reasonably be expected to cause
irreparable harm to Landlord.
(c) If the default consists of the failure to pay any
Monetary Obligation under clause (i) of Paragraph 22(a), the applicable cure
period shall be five (5) Business Days from the date on which notice is given,
but Landlord shall not be obligated to give notice of, or allow any cure period
for, any such default more than twice during the Term. Subject to the
limitation set forth in the following sentence, if the default consists of a
default under clause (ii) of Paragraph 22(a), other than the events specified
in clauses (B) and (C) of Paragraph 22(b), the applicable cure period shall be
thirty (30) days from the date on which notice is given or, if the default
cannot be cured within such thirty (30) day period and delay in the exercise of
a remedy would not (in Landlord's reasonable judgment) cause any material
adverse harm to Landlord or any of the Leased Premises, the cure period shall
be extended for the period required to cure the default (but such cure period,
including any extension, shall not in the aggregate exceed sixty (60) days,
provided that Tenant shall commence to cure the default within the said
thirty-day period and shall actively, diligently and in good faith proceed with
and continue the curing of such default. Notwithstanding anything in this
Paragraph 22 to the contrary, in the event of an Environmental Violation such
cure period shall not be limited to said sixty (60) day period), provided that
Tenant shall commence to cure the default within the said thirty-day period,
shall
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actively, diligently and in good faith proceed with and continue the curing of
the Environmental Violation until it shall be fully cured and, for so long as
the Initial Loan is outstanding, shall have deposited an amount sufficient in
Initial Lender's reasonable judgment to cure such Event of Default in an escrow
account satisfactory to Initial Lender. Funds so deposited with Initial Lender
shall be disbursed to cure such Event of Default as provided in the
Subordination Agreement. Notwithstanding the foregoing, so long as the Initial
Loan is in effect Landlord shall not be obligated to give Tenant notice and an
opportunity to cure any default under Paragraph 22(a)(ii) more than two times.
23. Remedies and Damages Upon Default.
(a) If an Event of Default shall have occurred and is
continuing, Landlord shall have the right, at its sole option, then or at any
time thereafter, to exercise its remedies and to collect damages from Tenant in
accordance with this Paragraph 23, without demand upon or notice to Tenant
except as otherwise provided in Paragraph 22(c) and this Paragraph 23. Upon
the occurrence of an Event of Default, Landlord's remedies include the right to
elect to terminate the Lease or keep the Lease in effect and collect the
damages specified below.
(b) If Landlord elects to terminate the Lease, Landlord
shall give Tenant notice of Landlord's intention to terminate this Lease on a
date specified in such notice. Upon such date, this Lease, the estate hereby
granted and all rights of Tenant hereunder shall expire and terminate. Upon
such termination, Tenant shall immediately surrender and deliver possession of
the Leased Premises to Landlord in accordance with Paragraph 26. If Tenant
does not so surrender and deliver possession of the Leased Premises, Landlord
may re-enter and repossess the Leased Premises, as provided in Paragraph 23(f)
below.
(c) In addition to its other rights under this Lease,
Landlord has the remedy described in California Civil Code Section 1951.4 which
provides substantially as follows: Landlord may continue the Lease in effect
after Tenant's breach and abandonment and recover the Rent as it becomes due,
provided Tenant has the right to sublet or assign, subject to the limitations
specified in Paragraph 21. In accordance with California Civil Code Section
1951.4 (or any successor statute), Tenant acknowledges that in the event Tenant
breaches this Lease and abandoned the Leased Premises, this Lease shall
continue in effect for so long as Landlord does not terminate Tenant's right to
possession, and Landlord may enforce all its rights and remedies under this
Lease, including the right to recover the rent as it becomes due under this
Lease. Acts of maintenance or preservation or efforts to relet the Leased
Premises or the appointment of a receiver upon initiative of Landlord to
protect Landlord's interest under this Lease shall not constitute a termination
of Tenant's right to possession.
(d) If Landlord elects, pursuant to Paragraph 23(b), to
terminate this Lease upon a default by Tenant, Landlord may collect from Tenant
damages computed in accordance with the following provisions in addition to
Landlord's other remedies under this Lease:
(i) the worth at the time of award of any unpaid
Rent which has been earned at the time of such termination; plus
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(ii) the worth at the time of award of the amount
by which any unpaid Rent which would have been earned after termination until
the time of award exceeds the amount of such rental loss that Tenant proves
could have been reasonably avoided; plus
(iii) the worth at the time of award of the amount
by which the unpaid Rent for the balance of the Term after the time of award
exceeds the amount of such rental loss that Tenant proves could be reasonably
avoided, plus
(iv) any other Cost necessary to compensate
Landlord for all the detriment proximately caused by Tenant's failure to
perform its obligations under this Lease or which in the ordinary course of
things would be likely to result therefrom including, without limitation,
brokerage commissions, the cost of repairing and reletting the Leased Premises
and reasonable attorneys' fees; plus
(v) at Landlord's election, such other amounts in
addition to or in lieu of the foregoing as may be permitted from time to time
by applicable state law. Damages shall be due and payable from the date of
termination.
For the purposes of clauses (i) and (ii) of this Paragraph,
the "worth at the time of award" shall be computed by adding interest at the
Default Rate (as specified in Paragraph 7(a)(iv)) to the past due Rent. For the
purposes of clause (iii) of this Paragraph 23(d), 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 the award, plus one
percent (1%).
(e) If, in the Event of a Default by Tenant, Landlord
elects to keep the Lease in effect, Landlord may, to the extent permitted by
applicable Law, declare by notice to Tenant the entire Basic Rent (in the
amount of Basic Rent then in effect) for the remainder of the then current Term
to be immediately due and payable. Tenant shall immediately pay to Landlord
all such Basic Rent discounted to its Present Value, all accrued Rent then due
and unpaid, all other Monetary Obligations which are then due and unpaid and
all Monetary Obligations which arise or become due by reason of such Event of
Default (including any Costs of Landlord). Upon receipt by Landlord of all
such accelerated Basic Rent and Monetary Obligations, this Lease shall remain
in full force and effect and Tenant shall have the right to possession of the
Leased Premises from the date of such receipt by Landlord to the end of the
Term, and subject to all the provisions of this Lease, including the obligation
to pay all increases in Basic Rent and all Monetary Obligations that
subsequently become due, except that no Basic Rent which has been prepaid under
this Lease shall be due thereafter during the Term.
(f) Upon the occurrence of an Event of Default, Landlord
shall also have the right, with or without terminating this Lease, to enter the
Leased Premises in accordance with applicable Law and remove all persons and
personal property from the Leased Premises, such property being removed and
stored in a public warehouse or elsewhere at Tenant's sole cost and expense. No
removal by Landlord of any persons or property in the Leased Premises shall
constitute an election to terminate this Lease. Such an election to terminate
may only be made by Landlord in writing, or decreed by a court of competent
jurisdiction. Landlord's right of entry shall include the right to remodel the
Leased Premises and re-let the Leased Premises. All Costs incurred in such
entry and re-letting shall be paid by Tenant. Rents collected by Landlord from
any other tenant which occupies the Leased Premises shall be offset against the
amounts owed
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to Landlord by Tenant. Tenant shall be responsible for any amounts not
recovered by Landlord from any other tenant. Any payments made by Tenant shall
be credited to the amounts owed by Tenant in the sole order and discretion of
Landlord, irrespective of any designation or request by Tenant. No entry by
Landlord shall prevent Landlord from later terminating the Lease by written
notice.
(g) Landlord shall be entitled to draw on the Letter of
Credit and apply the proceeds therefrom to any amounts due under Paragraph
23(d) hereof if this Lease shall be terminated, or, if this Lease shall remain
in full force and effect, in the following order: (i) to past due Basic Rent,
(ii) to cure any other Monetary Event of Default and (iii) to installments of
Basic Rent in inverse order of maturity, commencing with the last installment
of the Term.
(h) Notwithstanding anything to the contrary herein
contained, in lieu of or in addition to any of the foregoing remedies and
damages, Landlord may exercise any remedies and collect any damages available
to it at law or in equity. If Landlord is unable to obtain full satisfaction
pursuant to the exercise of any remedy, it may pursue any other remedy which it
has hereunder or at law or in equity.
(i) Landlord shall not be required to mitigate any of its
damages hereunder unless required to by applicable Law. If any Law shall
validly limit the amount of any damages provided for herein to an amount which
is less than the amount agreed to herein, Landlord shall be entitled to the
maximum amount available under such Law.
(j) No termination of this Lease, repossession or
reletting of the Leased Premises, exercise of any remedy or collection of any
damages pursuant to this Paragraph 23 shall relieve Tenant of any Surviving
Obligations.
(k) WITH RESPECT TO ANY REMEDY OR PROCEEDING OF LANDLORD
HEREUNDER, TENANT WAIVES ANY RIGHT TO A TRIAL BY JURY.
(l) Upon the occurrence of any Event of Default, Landlord
shall have the right (but no obligation) to perform any act required of Tenant
hereunder and, if performance of such act requires that Landlord enter the
Leased Premises, Landlord may enter the Leased Premises for such purpose.
(m) No failure of Landlord (i) to insist at any time upon
the strict performance of any provision of this Lease or (ii) to exercise any
option, right, power or remedy contained in this Lease shall be construed as a
waiver, modification or relinquishment thereof. A receipt by Landlord of any
sum in satisfaction of any Monetary Obligation with knowledge of the breach of
any provision hereof shall not be deemed a waiver of such breach, and no waiver
by Landlord of any provision hereof shall be deemed to have been made unless
expressed in a writing signed by Landlord.
(n) Tenant hereby waives and surrenders, for itself and
all those claiming under it, including creditors of all kinds, (i) any right
and privilege which it or any of them may have under any present or future Law
to redeem any of the Leased Premises or to have a continuance of this Lease
after termination of this Lease or of Tenant's right of occupancy or
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possession pursuant to any court order or any provision hereof, and (ii) the
benefits of any present or future Law which exempts property from liability for
debt or for distress for rent.
(o) Except as otherwise provided herein, all remedies are
cumulative and concurrent and no remedy is exclusive of any other remedy. Each
remedy may be exercised at any time an Event of Default has occurred and is
continuing and may be exercised from time to time. No remedy shall be
exhausted by any exercise thereof.
24. Notices. All notices, demands, requests, consents,
approvals, offers, statements and other instruments or communications required
or permitted to be given pursuant to the provisions of this Lease shall be in
writing and shall be deemed to have been given for all purposes when delivered
in person or by Federal Express or other reliable 24-hour delivery service or
five (5) Business Days after being deposited in the United States mail, by
registered or certified mail, return receipt requested, postage prepaid,
addressed to the other party at its address stated above. A copy of any notice
given by Tenant to Landlord shall simultaneously be given by Tenant to ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: Chairman, Real Estate Department. For the purposes of this
Paragraph, any party may substitute another address stated above (or
substituted by a previous notice) for its address by giving fifteen (15) days'
notice of the new address to the other party, in the manner provided above.
25. Estoppel Certificates. Landlord or Tenant, as the
case may be, shall, at any time upon not less than ten (10) days' prior written
request by the other party, deliver to the other party a statement ("Tenant
Estoppel Certificate") in writing, executed by the president or a vice
president of Landlord or Tenant, as the case may be, certifying that:
(a) Except as otherwise specified, this Lease is
unmodified and in full force and effect;
(b) The Basic Rent, Additional Rent and all other
Monetary Obligations have been paid to the dates stated in such certificate;
(c) The certifying party has not filed a voluntary or
involuntary bankruptcy petition;
(d) To the knowledge of the signer, based on reasonable
inquiry and except as may otherwise be specified, no default by either Landlord
or Tenant exists under this Lease;
(e) Landlord or Tenant, as the case may be, has performed
all of its obligations under the Lease with respect to the construction of the
Tenant Improvements;
(f) The current amount of the Letter of Credit is as
stated in such certificate; and
(g) The correctness of the other matters specified in the
form of Tenant Estoppel Certificate attached hereto as Exhibit "H".
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26. Surrender. Upon the expiration or earlier
termination of this Lease, Tenant shall peaceably leave and surrender the
Leased Premises to Landlord in the same condition in which the Leased Premises
was at the Occupancy Date, except as repaired, rebuilt, restored, altered,
replaced or added to as permitted or required by any provision of this Lease,
and except for ordinary wear and tear. Upon such surrender, Tenant shall (a)
remove from the Leased Premises all property which is owned by Tenant or third
parties other than Landlord and (b) repair any damage caused by such removal.
Property of Tenant or such third party not so removed shall become the property
of Landlord, and Landlord may thereafter cause such property to be removed from
the Leased Premises. The cost of removing and disposing of such property and
repairing any damage to any of the Leased Premises caused by such removal shall
be paid by Tenant to Landlord upon demand. Landlord shall not in any manner or
to any extent be obligated to reimburse Tenant for any such property which
becomes the property of Landlord pursuant to this Paragraph 26.
27. No Merger of Title. There shall be no merger of the
leasehold estate created by this Lease with the fee estate in any of the Leased
Premises by reason of the fact that the same Person may acquire or hold or own,
directly or indirectly, (a) the leasehold estate created hereby or any part
thereof or interest therein and (b) the fee estate in any of the Leased
Premises or any part thereof or interest therein, unless and until all Persons
having any interest in the interests described in clauses (a) and (b) above
which are sought to be merged shall join in a written instrument effecting such
merger and shall duly record the same.
28. Books and Records. Tenant shall furnish Landlord
with the following:
(i) As soon as available and in any event within
sixty (60) days after the end of each quarterly accounting period in each
fiscal year of Tenant (with the exception of the last quarter), Tenant shall
furnish copies of a consolidated balance sheet of Tenant and its consolidated
affiliates as of the last day of such quarterly accounting period, and copies
of the related consolidated statements of income and of changes in
shareholders' equity and in financial position of Tenant and its consolidated
affiliates for such quarterly accounting period and for the elapsed portion of
the current fiscal year ended with the last day of such quarterly accounting
period. All such statements shall be prepared in accordance with GAAP (except
that interim quarterly financials are not required to include notes) and, if
Tenant ceases to be a publicly traded company, certified as complete and
correct in all material respects by the chief financial officer of Tenant
(subject to year-end audit adjustments).
(ii) As soon as available and in any event within
one hundred twenty (120) days after the end of each fiscal year of Tenant,
Tenant shall furnish copies of a consolidated balance sheet of Tenant and its
consolidated Affiliates as of the end of such fiscal year, and copies of the
related consolidated statements of income and of changes in shareholders'
equity and in financial position of Tenant and its consolidated affiliates for
such fiscal year. All such statements shall be in reasonable detail and with
appropriate notes, if any, and be prepared in accordance with GAAP and state in
comparative form the corresponding figures as of the end of and for the
previous fiscal year, and shall be accompanied by an opinion or report thereon,
in scope and substance satisfactory to Landlord, by Tenant's nationally
recognized independent certified public accountants.
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(iii) Tenant shall furnish copies of all regular
and periodic reports or filings, including without limitation Form 10-K and
Form 10-Q, which Tenant or any Affiliate shall make or be required to file with
the Securities and Exchange Commission or any other federal or state regulatory
agency or with any municipal or other local body, and such other public,
non-proprietary information relating to the business, affairs and financial
condition of Tenant as Landlord may from time to time reasonably request.
(iv) As soon as available and in any event within
one hundred twenty (120) days after the end of each fiscal year of Tenant,
Tenant shall provide to Landlord and Lender unaudited financial statements on
the Leased Premises which shall include reasonably detailed information about
the cost of operating, maintaining and repairing the Leased Premises. Such
information shall include, without limitation, information about the cost of
utilities, taxes, tenant improvement costs, landscaping, janitorial services
and other similar services and shall be certified as complete and correct by
the chief financial officer of Tenant and that such statements have been
prepared in accordance with GAAP.
(v) Upon reasonable advance notice to Tenant,
Landlord and Lender shall have the right to periodically visit the Leased
Premises to meet with officers of Tenant for the purpose of discussing the
operating history of the Leased Premises and the general condition of Tenant's
business. At no time shall Tenant be obligated to disclose to Landlord, Lender
or any third party any confidential or proprietary information about Tenant or
Tenant's business. The scope and nature of the information to be so provided
by Tenant to Landlord and/or Lender shall be limited to that which would be
customarily provided to investment analysts employed by investment banking
firms.
29. Security Deposit.
(a) Concurrently with the execution of this Lease, Tenant
shall deliver to Landlord a Letter of Credit in the amount of [INTENTIONALLY
OMITTED] . The Letter of Credit shall (subject to a reduction in the amount of
the Letter of Credit as set forth in Paragraph 29(b)) remain in full force and
effect until satisfaction of the Final Release Conditions (as hereinafter
defined), or with respect to any Letter of Credit issued pursuant to the terms
of Paragraph 29(e) or Paragraph 29(f), until satisfaction of the provisions for
release set forth therein. The Letter of Credit shall be security for the
payment by Tenant of the Rent and all other charges or payments to be paid
hereunder and the performance of the covenants and obligations contained
herein, and the Letter of Credit shall be renewed at least thirty (30) days
prior to any expiration thereof. In addition to its other rights and remedies
under the Letter of Credit, Landlord shall have the right to draw on the Letter
of Credit to pay any installment of Basic Rent not paid within three (3)
Business Days after the due date thereof, and, with respect to the first three
(3) (but in no event more than three (3)) such draws so long as the Letter of
Credit remains in effect and Tenant replenishes any amount drawn under the
Letter of Credit within one hundred twenty (120) days (but in any event at
least thirty (30) days prior to the expiration thereof) after such draw no
Event of Default shall exist by reason of any such draw.
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[THE REMAINDER OF THIS PARAGRAPH INTENTIONALLY OMITTED]. 30.
Non-Recourse as to Landlord.
(a) Anything contained herein to the contrary
notwithstanding, any claim based on or in respect of any liability of Landlord
under this Lease shall be enforced only against the Leased Premises and not
against any other assets, properties or funds of (a) Landlord or any party
thereof, (b) any director, officer, general partner, shareholder, limited
partner, employee or agent of Landlord or any general partner of Landlord,
▇▇▇▇:11 or ▇▇▇▇:12 or any of its general partners (or any legal representative,
heir, estate, successor or assign of any thereof), (c) any predecessor or
successor partnership or corporation (or other entity) of Landlord or any of
its general partners, shareholders, officers, directors, employees or agents,
either directly or through Landlord or its general partners, shareholders,
officers, directors, employees or agents or any predecessor or successor
partnership or corporation (or other entity), or (d) any other Person
(including ▇▇▇▇▇ Property Advisors, ▇▇▇▇▇ Fiduciary Advisors, Inc., W. P. ▇▇▇▇▇
& Co. Inc., and any Person affiliated with any of the foregoing, or any
director, officer, employee or agent of any thereof); provided, however, that
Landlord shall at all times maintain an "Equity Interest" (as defined below) in
the Leased Premises of at least the lesser of (1) twenty percent (20%) of the
Fair Market Value of the Leased Premises or (2) Landlord's Cash Contribution
("Landlord's Minimum Equity"). If Landlord fails to maintain Landlord's
Minimum Equity, the provisions of this Paragraph 30 limiting Tenant's right to
recover damages from the Leased Premises as provided above shall cease to be of
any force or effect and Tenant shall have the right to recover damages from any
and all assets of Landlord. The term "Equity Interest" shall mean the
difference between the Fair Market Value of the Leased Premises and the then
outstanding principal amount of all Mortgages placed on the Leased Premises by
Landlord. For purposes of this definition of Equity Interest, during the first
five (5) years of the Term the Fair Market Value of the Leased Premises shall
be equal to the Project Cost. In the event that the Leased Premises become
part of a pool of properties securing the debt (the "Blanket Indebtedness") of
one Person, Landlord's Equity Interest shall be equal to the difference between
twenty percent (20%) of the Fair Market Value of the Leased Premises and the
portion of the Blanket Indebtedness reasonably allocated to the Leased Premises
by the Lender holding the Blanket Indebtedness.
(b) Nothing in this Paragraph 30 shall be construed as
waiving or limiting any equitable remedies which Tenant may have against
Landlord and/or any of the foregoing Persons by reason of any breach of this
Lease by Landlord and/or such Persons.
31. Financing.
(a) If Landlord desires to obtain or refinance any Loan,
Tenant shall negotiate in good faith with Landlord concerning any request made
by any Lender or proposed Lender for changes to or modifications of this Lease;
provided no such changes or modifications shall increase Tenant's obligations
under this Lease. In particular, Tenant shall agree, upon request of Landlord,
to supply any such Lender with such notices and information as Tenant is
required to give to Landlord hereunder and to acknowledge that the rights of
Landlord hereunder have been assigned by Landlord to such Lender and to consent
to such financing if such consent is requested by such Lender. Tenant shall
provide any other consent or statement and shall execute any and all other
documents that such Lender reasonably requires in connection with such
financing, including any environmental indemnity agreement and
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subordination, non-disturbance and attornment agreement, so long as the same do
not adversely affect any right, benefit or privilege of Tenant under this Lease
or materially increase Tenant's obligations under this Lease; provided,
however, that in no event shall Tenant be obligated to provide any Lender with
any confidential or proprietary information about Tenant or its business. Such
subordination, non-disturbance and attornment agreement shall be in form and
substance reasonably satisfactory to Tenant and may require Tenant to confirm
that (a) Lender and its assigns will not be liable for any misrepresentation,
act or omission of Landlord and (b) Lender and its assigns will not be subject
to any counterclaim, demand or offset which Tenant may have against Landlord.
(b) During the Term the Leased Premises shall not be
encumbered by any Mortgage the original principal balance of which exceeds
[INTENTIONALLY OMITTED] unless the Leased Premises are part of a pool of
properties securing debt of one Person, in which event such limit shall not
apply. If the Leased Premises are part of such a pool of properties, the deed
of trust or mortgage which encumbers the Leased Premises shall specify a
release price for the Leased Premises not in excess of the Project Cost.
32. Subordination. Subject to the provisions of
Paragraph 31(a), this Lease and Tenant's interest hereunder shall be
subordinate to any Mortgage or other security instrument hereafter placed upon
the Leased Premises by Landlord, and to any and all advances made or to be made
thereunder, to the interest thereon, and all renewals, replacements and
extensions thereof, provided that the holder of any such Mortgage or other
security instrument enters into a subordination, non-disturbance and attornment
agreement with and reasonably satisfactory to Tenant which recognizes this
Lease and all Tenant's rights hereunder unless and until (i) an Event of
Default exists or (ii) Landlord shall have the right to terminate this Lease
pursuant to any applicable provision hereof.
33. Financial Covenants. [INTENTIONALLY OMITTED].
34. Tax Treatment; Reporting. Landlord and Tenant each
acknowledge that each shall treat this transaction as a true lease for state
law purposes and shall report this transaction as a true lease for Federal
income tax purposes. For Federal income tax purposes each shall report this
Lease with Landlord as the owner of the Leased Premises, including the Building
Systems Equipment, and Tenant as the lessee of the Leased Premises and Building
Systems Equipment, including: (1) treating Landlord as the owner of the
property eligible to claim depreciation deductions under Section 167 or 168 of
the Internal Revenue Code of 1986 (the "Code") with respect to the Leased
Premises and the Building Systems Equipment, (2) Tenant reporting its Rent
payments as rent expense under Section 162 of the Code, and (3) Landlord
reporting the Rent payments as rental income.
35. Right of First Refusal. [INTENTIONALLY OMITTED].
36. Financing Major Alterations. [INTENTIONALLY
OMITTED].
37. Initial Lender Rights re: Letter of Credit.
[INTENTIONALLY OMITTED].
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38. Miscellaneous.
(a) The paragraph headings in this Lease are used only
for convenience of reference and are not part of this Lease or to be used in
determining the intent of the parties or otherwise interpreting this Lease.
(b) As used in this Lease, the singular shall include the
plural and any gender shall include all genders as the context requires and the
following words and phrases shall have the following meanings: (i) "including"
shall mean "including without limitation"; (ii) "provisions" shall mean
"provisions, terms, agreements, covenants and/or conditions"; (iii) "lien"
shall mean "lien, charge, encumbrance, title retention agreement, pledge,
security interest, mortgage and/or deed of trust"; (iv) "obligation" shall mean
"obligation, duty, agreement, liability, covenant and/or condition"; (v) "any
of the Leased Premises" shall mean "the Leased Premises or any part thereof or
interest therein"; (vi) "any of the Land" shall mean "the Land or any part
thereof or interest therein"; (vii) "any of the Improvements" shall mean "the
Improvements or any part thereof or interest therein"; (viii) "any of the
Equipment" shall mean "the Equipment or any part thereof or interest therein";
and (ix) "any of the Adjoining Property" shall mean "the Adjoining Property or
any part thereof or interest therein".
(c) Any act which Landlord is permitted to perform under
this Lease may be performed at any time and from time to time by Landlord or
any person or entity designated by Landlord. Each appointment of Landlord as
attorney-in-fact for Tenant hereunder is irrevocable and coupled with an
interest. Except as otherwise specifically provided herein, Landlord shall
have the right, at its sole option, to withhold or delay its consent whenever
such consent is required under this Lease for any reason or no reason. Time is
of the essence with respect to the performance by Tenant of its obligations
under this Lease.
(d) Landlord shall in no event be construed for any
purpose to be a partner, joint venturer or associate of Tenant or of any
subtenant, operator, concessionaire or licensee of Tenant with respect to any
of the Leased Premises or otherwise in the conduct of their respective
businesses.
(e) This Lease and any documents which may be executed by
Tenant on or about the effective date hereof at Landlord's request constitute
the entire agreement between the parties and supersede all prior understandings
and agreements, whether written or oral, between the parties hereto relating to
the Leased Premises and the transactions provided for herein. Landlord and
Tenant are business entities having substantial experience with the subject
matter of this Lease and have each fully participated in the neotiation and
drafting of this Lease. Accordingly, this Lease shall be construed without
regard to the rule that ambiguities in a document are to be construed against
the drafter.
(f) This Lease may be modified, amended, discharged or
waived only by an agreement in writing signed by the party against whom
enforcement of any such modification, amendment, discharge or waiver is sought.
(g) The covenants of this Lease shall run with the land
and bind Tenant, its successors and assigns and all present and subsequent
encumbrancers and subtenants of any of
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the Leased Premises, and shall inure to the benefit of Landlord, its successors
and assigns. If there is more than one Tenant, the obligations of each shall
be joint and several.
(h) If any one or more of the provisions contained in
this Lease shall for any reason be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not
affect any other provision of this Lease, but this Lease shall be construed as
if such invalid, illegal or unenforceable provision had never been contained
herein.
(i) This Lease shall be governed by and construed and
enforced in accordance with the Laws of the State.
IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease
to be duly executed under seal as of the day and year first above written.
LANDLORD:
▇▇▇▇ PROPERTY COMPANY, a
California partnership
ATTEST: By: ▇▇▇▇ (CA) QRS 11-25, INC.,
a general partner
By:__________________________ By:__________________________
Title: Assistant Secretary Title: Executive Vice President
[Corporate Seal]
ATTEST: By: ▇▇▇▇ (CA) QRS 12-1, INC.,
a general partner
By:__________________________ By:__________________________
Title: Assistant Secretary Title: Executive Vice President
[Corporate Seal]
TENANT:
ATTEST: GENSIA, INC.,
a Delaware corporation
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By:__________________________ By:__________________________
Title: Vice President Title: President
[Corporate Seal]
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EXHIBIT A
LEGAL DESCRIPTION OF LAND
The Land is located in the City of San Diego, County of San Diego,
State of California and is more particularly described as follows:
PARCEL A:
LOTS 1 AND 3 OF NEXUS TECHNOLOGY CENTRE UNIT NO. 1, IN THE CITY OF SAN DIEGO,
COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 11876,
FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, AUGUST 7, 1987.
PARCEL B:
NON-EXCLUSIVE EASEMENTS FOR VEHICULAR AND PEDESTRIAN INGRESS AND EGRESS ON AND
OVER DESIGNATED PEDESTRIAN AND VEHICULAR TRAFFIC CIRCULATION PATTERNS NOW
EXISTING OR CREATED, INCLUDING WITHOUT LIMITATIONS, ALL DRIVEWAYS, ROAD,
STREETS, WALKWAYS, SIDEWALKS AND SURFACE PARKING AREAS; FOR PARKING ON AND
ACROSS ALL SURFACE PARKING AREAS DESIGNATED FOR PARKING BY STRIPPING OR OTHER
MEANS; FOR PRIVATE AND COMMON UTILITIES AND INCIDENTAL THERETO; AND TEMPORARY
EASEMENTS FOR CONSTRUCTION PURPOSES, AS SET FORTH, DESCRIBED, CREATED AND
CONVEYED IN THAT CERTAIN DOCUMENT ENTITLED "RECIPROCAL EASEMENT AGREEMENT" BY
AND BETWEEN GENSIA, INC., A DELAWARE CORPORATION AND ▇▇▇▇ PROPERTY COMPANY, A
CALIFORNIA GENERAL PARTNERSHIP, RECORDED ON DECEMBER __, 1993 AS INSTRUMENT NO.
_______________, IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY,
CALIFORNIA.
A-1
64
EXHIBIT B
DESCRIPTION OF BUILDING SYSTEMS EQUIPMENT
"Building Systems Equipment" shall mean all plumbing, heating,
ventilation and air conditioning equipment, electrical systems, mechanical
equipment, lighting systems, emergency life support equipment, fire safety
equipment, sprinkler systems and other equipment which is customarily part of a
"shell building" for each Building. Building Systems Equipment shall include
any Alterations to the Building Systems Equipment, whether paid for by Landlord
or by Tenant, as may be required by the terms of this Lease.
B-1
65
EXHIBIT C
SCHEDULE OF PERMITTED ENCUMBRANCES
C-1
66
EXHIBIT D
BASIC RENT SCHEDULE
[INTENTIONALLY OMITTED]
D-1
67
EXHIBIT E
TENANT'S FINANCIAL COVENANTS
[INTENTIONALLY OMITTED]
▇-▇
▇▇
▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇ OF EXISTING LEASES
[INTENTIONALLY OMITTED]
F-1
69
EXHIBIT G
[Form of Letter of Credit]
[INTENTIONALLY OMITTED]
G-1
70
EXHIBIT H
TENANT ESTOPPEL CERTIFICATE
(Lender)
The undersigned, _______________________ ("Tenant"), hereby certifies
to ______________________, a ________________ ("Lender") and/or ______________
_______________("Purchaser"), as follows:
1. Attached hereto is a true, correct and complete copy of that
certain lease dated ____________________ 19__, between ___________________, a
______________________________ ("Landlord"), and Tenant (the "Lease"), the
demised premises of which ("Premises") are located at
_________________________________________________________________ in the City of
________________, County of __________________, State of ___________________,
which Premises are more particularly described in the Lease. The Lease (as
attached) represents the entire agreement between the parties as to the
Premises, is now in full force and effect, and has not been amended, modified
or supplemented, except as set forth in Paragraph 5 below.
2. The term of the Lease commenced on ____________, 19__. Rent
commenced to accrue on _________________, 19__.
3. The undersigned is in occupancy of the Premises.
4. The initial term of the Lease shall expire on _______________,
19__, with ____ renewal option(s) of a period of ______ years each.
5. The Lease has not been amended, modified, supplemented,
extended, renewed or assigned, except: _______________________________________
_______________________________________________________________________________
_________________________________________________________.
6. All conditions of the Lease to be performed by Landlord
thereunder and necessary to the enforceability of the Lease have been
satisfied, except: ____________________________________________________________
_______________________________________________________________________________
______________________________________________________________.
7. The amount of the installment of Basic Rent being paid
currently is $____________.
8. The current amount of the Letter of Credit outstanding under
Paragraph 29 of this Lease is $____________.
9. Tenant is paying the full Basic Rent under the Lease, which
Rent has been paid in full through ____________. No Basic Rent under the Lease
has been paid for more than thirty (30) days in advance of its due date.
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71
10. To the best of the knowledge of the undersigned, based on
reasonable injury, Tenant has no defense as to its obligations under the Lease
and claims no set-off or counterclaim against Landlord.
11. To the best knowledge of the undersigned, there are no
defaults on the part of Landlord or Tenant under the Lease, and there are no
events currently existing (or with the passage of time, giving of notice or
both, which would exist) which give Tenant the right to cancel or terminate the
Lease.
12. Tenant has no right to any concession (rental or otherwise) or
similar compensation in connection with renting the space it occupies, except
as provided in the Lease.
13. There are no actions, whether voluntary or otherwise, pending
against the undersigned or any guarantor of the undersigned's obligations under
the Lease pursuant to the bankruptcy or insolvency laws of the United States or
any state thereof.
14. It is Tenant's understanding that the present Landlord of the
Premises is__________________________ _______________________________.
15. Tenant's address for notices under the terms of the Lease is:
______________________________________________________________________________.
16. Tenant hereby acknowledges that Lender intends to make a loan
to Landlord for _____________________________________, that Landlord intends to
assign the Lease to Lender in connection with such financing, and that Lender
is relying upon the representations herein made in funding such loan. Upon
such assignment and upon written request from Lender, Tenant agrees to send all
rents, payments and other amounts due under the Lease and assigned to Lender
pursuant to said financing to such address as may be indicated in writing by
Lender to Tenant. Tenant agrees that no modification, adjustment, revision,
cancellation or renewal of the Lease or amendments thereto shall be effective
unless the written consent of Lender is obtained. Tenant has not received any
notice of any other sale, pledge, transfer or assignment of the Lease or of the
rentals thereunder by Landlord.
17. Tenant shall deliver to Lender a copy of all notices of
default or termination served on or received from Landlord.
18. Lender is hereby given the right to cure Landlord's defaults
under the Lease within thirty (30) days after receipt of written notice by the
undersigned of Landlord's failure so to do; provided, however, that said thirty
(30) day period shall be extended (a) so long as within said thirty (30) day
period Lender has commenced to cure and is proceeding with due diligence to
cure said defaults, or (b) so long as Lender is proceeding with a foreclosure
action against Landlord and will commence to cure and will proceed with due
diligence to cure said defaults upon the resolution of said foreclosure action.
19. Tenant acknowledges that Lender shall assume no liability or
obligations under the Lease, or any renewal thereof, either by virtue of the
assignment thereof or any receipt or collection of rents under the Lease,
except in the event that Lender acquires title to the Leased Premises.
▇-▇
▇▇
▇▇. All provisions of the Lease and the amendments thereto (if
any) referred to above are hereby ratified.
DATED: ___________, 19__ "Tenant":
GENSIA, INC.,
a Delaware corporation
By:
---------------------------
Its:
--------------------------
By:
---------------------------
Its:
--------------------------
G-4
73
EXHIBIT "B"
DEMISING PLAN
Exhibit B to the sublease agreement depicts the layout of the floor plans.
G-5