EXHIBIT 10.20
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STANDARD NNN LEASE--MULTI-TENANT PROPERTY
WITNESSETH
This lease ("LEASE") is entered into by and between Limar Realty Corp. #18, a
California corporation ("LANDLORD") and BioMarin Pharmaceutical, Inc., a
Delaware corporation ("TENANT"). For and in consideration of the payment of
rents and the performance of the covenants herein set forth by Tenant, Landlord
does lease to Tenant and Tenant accepts the Premises described below subject to
the agreements herein contained.
1. BASIC LEASE TERMS
a. DATE OF LEASE: June 25, 1998
b. TENANT: BioMarin Pharmaceutical, Inc.
Address (of the Premises): ▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
Address (for Notices): (Please provide if other than Premises.)
c. LANDLORD: Limar Realty Corp. #18
Address (for Notices): ▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
d. TENANT'S USE OF PREMISES: General office, laboratory research and
development, production and warehousing.
e. PREMISES AREA: 31,056 Rentable Square Feet
f. BUILDING: ▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
g. PROPERTY: ▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
h. INSURING PARTY: Landlord is the "Insuring Party" unless
otherwise stated herein.
i. TERM (inclusive): Commencement Date: See (P)30.
("Commencement Date")
Expiration Date: August 31, 2003
("Expiration Date")
Number of Months: Approximately 60 months
j. TENANT'S SHARE OF BUILDING: 44.46% (31,056 / 69,849)
k. TENANT'S SHARE OF PROPERTY: 44.46% (31,056 / 69,849)
l. TENANT'S NUMBER OF
NON-RESERVED PARKING SPACES: 55
m. INITIAL BASE RENT: Thirty Seven Thousand Nine Hundred
Eighty Five & 44/100 Dollars
($37,985.44) per month.
n. BASE RENT ADJUSTMENT:
The cost of living provisions of (P)4.b.) apply using the CPI Index
for the CMSA of San Francisco-Oakland, California and the annual floor
limit ("FLOOR LIMIT") shall be an increase of three and one-third
percent (3-1/3%) and the annual ceiling limit ("CEILING LIMIT") shall
be an increase of seven and one-third percent (7-1/3%).
o. TOTAL TERM BASE RENT(exclusive of any adjustments due to (P)4.b. &
(P)5. and assuming an exact 60 month lease term): $2,279,126.40.
p. PREPAID BASE RENT: $37,985.44
q. SECURITY DEPOSIT: $114,000.00
r. BROKER(S): Meridian Commercial, Inc. (Tenant)
s. EXHIBITS: Exhibits lettered "A" through "D" are
attached hereto and made a part hereof.
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2. PREMISES, PARKING AND COMMON AREAS
a. PREMISES. The Premises as described in (P)1. and Exhibit A, are a
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portion of a building, herein sometimes referred to as the "BUILDING"
identified in (P)1. The Premises, the Building, the Common Areas, the
land upon which the same are located, along with all other buildings
and improvements thereon or thereunder, are herein collectively
referred to as the "PROPERTY" as described in (P)1. and Exhibit B.
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Landlord hereby leases to Tenant and Tenant leases from Landlord for
the Term (as defined below), at the rental, and upon all of the
conditions set forth herein, the real property referred to in the
Basic Lease Terms, (P)1. as the "PREMISES", including rights to the
Common Areas as hereinafter specified. Subject to any additional work
Landlord has agreed herein to do, Tenant hereby accepts the Premises
in their condition existing as of the date of the execution hereof,
subject to all applicable zoning, municipal, county and state laws,
ordinances and regulations governing and regulating the use of the
Premises, and accepts this Lease subject thereto and to all matters
disclosed thereby and by any exhibits attached hereto. Tenant agrees
with the square footage specified for the Premises in (P)1 and will
not hereafter challenge such determination and agreement. The rental
payable by Tenant pursuant to this Lease is not subject to revision in
the event of any discrepancy in the rentable square footage for the
Premises.
b. VEHICLE PARKING. So long as Tenant is not in default, and subject to
the Rules and Regulations attached hereto as Exhibit C, and as
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established by Landlord from time to time, Tenant shall be entitled to
use the number of parking spaces set forth in (P)1. If Tenant commits,
permits or allows any of the prohibited activities described in the
Lease or the Rules and Regulations then in effect, then Landlord shall
have the right, without notice, in addition to such other rights and
remedies that it may have, to remove or tow away the vehicle involved
and charge the cost to Tenant, which cost shall be immediately payable
upon demand by Landlord.
c. COMMON AREAS -- DEFINITION. The term "Common Areas" is defined as all
areas and facilities outside the Premises and within the exterior
boundary line of the Property that are provided and designated by the
Landlord from time to time for the general non-exclusive use of
Landlord, Tenant and of other tenants of the Property and their
respective employees, suppliers, shippers, customers and invitees,
including but not limited to common entrances, lobbies, corridors,
stairways and stairwells, public restrooms, elevators, parking areas
to the extent not otherwise prohibited by this Lease, loading and
unloading areas, trash areas, roadways, sidewalks, walkways, parkways,
ramps, driveways, landscaped areas and decorative walls.
d. COMMON AREAS -- RULES AND REGULATIONS. Tenant agrees to abide by and
conform to the Rules and Regulations attached hereto as Exhibit C with
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respect to the Property and Common Areas, and to cause its employees,
suppliers, shippers, customers and invitees to so abide and conform.
Landlord, or such other person(s) as Landlord may appoint, shall have
the exclusive control and management of the Common Areas and shall
have the right, from time to time, to modify, amend and enforce said
rules and regulations. Landlord shall not be responsible to Tenant for
the non-compliance with said rules and regulations by other tenants,
their agents, employees and invitees.
e. BUILDING AND COMMON AREAS -- CHANGES. Landlord shall have the right,
in Landlord's sole discretion, from time to time:
1) To make changes to the Building interior and exterior and Common
Areas, including, without limitation, changes in the location,
size, shape, number and appearance thereof, including but not
limited to the lobbies, windows, stairways, air shafts,
elevators, restrooms, driveways, entrances, parking spaces,
parking areas, loading and unloading areas, ingress, egress,
direction of traffic, decorative walls, landscaped areas and
walkways, so long as the changes do not materially adversely
affect Tenant's use and occupancy of the Premises pursuant to
(P)1 d. hereof
2) To close temporarily any of the Common Areas for maintenance
purposes so long as reasonable access to the Premises remains
available;
3) To add additional buildings and improvements to the Common Areas;
4) To use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Property or any
portion thereof; and
5) To do and perform such other acts and make such other changes in,
to or with respect to the Common Areas and Property as Landlord
may, in the exercise of sound business judgment deem to be
appropriate.
f. ACCEPTANCE; QUIET ENJOYMENT. Landlord represents that it is the fee
simple owner of the Premises and has full right and authority to make
this Lease. Landlord hereby leases the Premises to Tenant and Tenant
hereby accepts the same from Landlord, in accordance with the
provisions of this Lease. Landlord covenants that Tenant shall have
peaceful and quiet enjoyment of the Premises during the Term (as
defined below) of this Lease. Tenant covenants that it will not
interfere with other tenants' quiet enjoyment of their premises.
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3. TERM. The term ("Term") of this Lease is for the period that commences at
12:01 a.m. on the Commencement Date and expires at 11:59 p.m. on the
Expiration Date. If Landlord, for any reason, cannot deliver possession of
the Premises to Tenant on or before the Commencement Date, this Lease shall
not be void or voidable, nor shall Landlord be liable to Tenant for any
loss or damage resulting from such delay. In that event, however, there
shall be an abatement of Base Rent (as defined below) covering the period
between the Commencement Date and the date when Landlord delivers
possession to Tenant, all other terms and conditions of this Lease shall
remain in full force and effect. If a delay in possession is caused by
Tenant's failure to perform any obligation in accordance with this Lease,
the Term shall commence as of the Commencement Date, and there shall be no
reduction of Base Rent between the Commencement Date and the time Tenant
takes possession. Notwithstanding the other provisions of this (P)3., if
Landlord has not delivered possession of the Premises to Tenant for the
installation of the Approved Work as set forth in (P)29.b. by Tenant within
ninety (90) days of Lease execution by Landlord and Tenant, Tenant shall
have the right to terminate the Lease upon written notice to Landlord
within ten (10) days after the expiration of said ninety (90) day period
and Landlord shall not be liable to Tenant for any loss or damage resulting
from such delay.
4. RENT
a. BASE RENT. Tenant shall pay Landlord in lawful money of the United
States, without notice, demand, offset or deduction, rent in the
amount(s) set forth in (P)1. which shall be payable in advance on the
first day of each and every calendar month ("Base Rent") provided,
however, the first month's Base Rent is due and payable upon execution
of this Lease. Unless otherwise specified in writing by Landlord, all
installments of Base Rent shall be payable to Limar Realty Corp. #18,
Department #44294, ▇.▇. ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-
4294. Base Rent for any partial month at the beginning or end of this
Lease will be prorated in accordance with the number of days in the
subject month. For purposes of Section 467 of the Internal Revenue
Code, the parties to this Lease hereby agree to allocate the stated
Base Rent provided herein to the periods which correspond to the
actual Base Rent payments as provided under the terms and conditions
of this Agreement.
b. COST OF LIVING ADJUSTMENT. The Base Rent shall be subject to increase
on each annual anniversary of the Commencement Date. The base for
computing the increase is the Consumer Price Index. All Urban
Consumers for the CMSA referenced in 111. (1982-84 base year = 100),
published by the United States Department of Labor, Bureau of Labor
Statistics ("INDEX"), which is in effect on the ninetieth (90th) day
preceding the date of the Commencement Date ("BEGINNING INDEX"). The
Index ("ADJUSTMENT INDEX") published and in effect on the ninetieth
(90th) day preceding each annual anniversary ("ANNUAL ANNIVERSARY") of
the Commencement Date is to be used in determining the amount of the
increase from one year to the next. Beginning with the Base Rent due
on and after the first anniversary, the Base Rent shall be increased
to equal the product achieved by multiplying the Base Rent amount by a
fraction, the numerator of which will be the Adjustment Index and the
denominator of which will be the Beginning Index. If there is a
decline from one Annual Anniversary to the next in the Adjustment
Index, the Base Rent due during the subsequent lease year shall equal
the Base Rent due during the then present lease year (i.e., there
shall be no decrease in Base Rent). Notwithstanding the foregoing
provisions of this (P)4 b.), each Base Rent adjustment shall be
subject to a minimum adjustment in accordance with the Floor Limit if
specified in (P)1. and a maximum adjustment in accordance with the
Ceiling Limit if specified in (P)1.
If the Index is changed so that the base year differs from
1982-84 = 100, the Index shall be converted in accordance with the
conversion factor published by the United States Department of Labor,
Bureau of Labor Statistics. If the Index is discontinued or revised
during the Term, such other government index or computation with which
it is replaced shall be used in order to obtain substantially the same
result as, in Landlord's reasonable opinion, would be obtained if the
Index had not been discontinued or revised.
c. RENT WITHOUT OFFSET AND LATE CHARGE. All Rent shall be paid without
prior demand or notice and without any deduction or offset whatsoever.
All Rent shall be paid in lawful currency of the United States of
America. Tenant acknowledges that late payment by Tenant to Landlord
of any Rent will cause Landlord to incur costs not contemplated by
this Lease, the exact amount of such cost being extremely difficult
and impracticable to ascertain. Such costs include, without
limitation, processing and accounting charges and late charges that
may be imposed on Landlord by the terms of any encumbrance or note
secured by the Premises. Therefor, if any Rent is not received by
Landlord within five (5) days of its due date, Tenant shall pay to
Landlord a late charge equal to six percent (6%) of such overdue
payment. Landlord and Tenant hereby agree that such late charge
represents a fair and reasonable estimate of the costs that Landlord
will incur by reason of any such late payment and that the late charge
is in addition to any and all remedies available to the Landlord and
that the assessment and/or collection of the late charge shall not. be
deemed a waiver of any other default. Additionally, all such
delinquent Rent or other sums, plus this late charge, shall bear
interest from the due date thereof at the lesser of ten percent (10%)
per annum or the maximum legal interest rate permitted by law. Any
payments of any kind returned for insufficient funds will be subject
to an additional handling charge of $25.00, and thereafter for the
remainder of the Term hereof, Landlord may require Tenant to pay all
future payments of Rent or other sums due by cashier's check.
d. PREPAID BASE RENT. Upon the execution of this Lease, Tenant shall pay
to Landlord the Prepaid Base Rent set forth in (P)1., and such Prepaid
Base Rent shall be applied toward the Base Rent due for the first
month of the Term for which Rent is due. Landlord shall be entitled to
immediately endorse and cash Tenant's Prepaid Base Rent; however, such
endorsement and cashing shall not constitute Landlord's
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acceptance of this Lease. In the event Landlord does not accept this
Lease, Landlord shall return said Prepaid Base Rent.
e. RENT. The term "Rent" as used in this Lease shall refer to Base Rent,
Prepaid Base Rent, Real Property Taxes, Operating Expenses, repairs
and maintenance costs, insurance, utilities, late charges and other
similar charges payable by Tenant pursuant to this Lease either
directly to Landlord or otherwise.
5. OPERATING EXPENSES.
a. PAYMENT BY TENANT. During the Term of this Lease, Tenant shall pay to
Landlord, as additional Rent, on a monthly basis Tenant's Share of the
Operating Expenses. To the extent that Operating Expenses are
accounted for on a building by building basis, the Tenant's Share of
Building shall apply. To the extent that Operating Expenses are
accounted for on an overall Property basis, then Tenant's Share of
Property shall apply.
b. OPERATING EXPENSES. The term "OPERATING EXPENSES" shall mean all
expenses, costs and disbursements (not specifically excluded from the
definition of Operating Expenses below) of every kind and nature which
Landlord shall pay or become obligated to pay because of or in
connection with the ownership, maintenance, repair and operation of
the Property or any portion thereof (including all Buildings and
Common Areas of the Property). Operating Expenses shall include, but
not be limited to the following:
1) Wages and salaries of all employees engaged in the operation,
maintenance and security of the Property, including taxes,
insurance and benefits relating thereto; and the rental cost and
overhead of any office and storage space used to provide such
services.
2) All supplies and materials used in the operation, repair or
maintenance of the Property.
3) Cost of all utilities, including surcharges, for the Property,
including the cost of water, power and lighting which are not
separately billed to and paid for by Tenant
4) Cost of all maintenance and service agreements for the Property
and the equipment thereon, including but not limited to, security
services, exterior window cleaning, janitorial service,
engineers, gardeners and trash removal services.
5) All Insurance Costs, as such term is defined in (P)16.
6) Cost of repairs and general maintenance (excluding repairs and
general maintenance paid by proceeds of Insurance or by Tenant or
other third parties, and alterations attributable solely to the
other tenants of the Property) including repair and maintenance
of the roofing.
7) A reasonable management fee for the property management of the
Property, which includes the cost of Landlord's Property Manager,
which management fee shall not exceed three percent (3%) of Rent.
8) The costs of any additional services not provided to the Property
at the Commencement Date but thereafter provided by Landlord in
its management of the Property.
9) The cost of any capital improvements to the Property or any part
thereof which are made during the Term hereof which shall be
amortized over the useful life of the improvement(s).
10) Real Property Taxes, as that term is defined in (P)11.
11) Assessments, dues and other amounts payable pursuant to the
CC&R's described in (P)7.b.
c. OPERATING EXPENSES SHALL NOT INCLUDE:
1) Costs paid for directly by Tenant;
2) Principal and interest payments on loans secured by deeds of
trust recorded against the Property or the Building of which the
Property is a part;
3) Real estate sales or leasing brokerage commissions;
4) Executive salaries of off-site personnel employed by Landlord
except for the charge (or pro rata share) of the property manager
of the Property; or
5) Costs to maintain the foundations, exterior walls and roof
structure of the Property.
d. EXTRAORDINARY SERVICES. Tenant shall pay within ten (10) days of
receipt of an invoice from Landlord the cost of additional or
extraordinary services provided to Tenant at Tenant's request and not
paid or payable by Tenant pursuant to other provisions of this Lease.
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e. IMPOUND. Landlord reserves the right, at Landlord's option, to
estimate the annual cost of OPERATING Expenses performed by Landlord
("PROJECTED OPERATING EXPENSES") and to require same to be paid in
advance. Tenant shall pay to Landlord, monthly in advance as
additional Rent, one-twelfth (1/12) of the Projected Operating
Expenses.
f. ADJUSTMENT.
1) ACCOUNTING. Within ninety (90) days (or as soon thereafter as
possible) after the close of each calendar year or portion
thereof of occupancy, Landlord shall provide Tenant a statement
of such year's actual Operating Expenses compared to the
Projected Operating Expenses. If the actual Operating Expenses
are more than the Projected Operating Expenses then Tenant shall
pay Landlord, within ten (10) days of receipt of a ▇▇▇▇ therefor,
the difference. If the actual Operating Expenses are less than
the Projected Operating Expenses, then Tenant shall receive a
credit against future Operating Expenses payments equal to the
difference; provided, that in the case of an overpayment for the
final lease year of the Term, Landlord shall credit the
difference against any sums due from Tenant to Landlord in
accordance with the terms of this Lease; and if no sums are due
and unpaid, shall promptly refund the net amount to Tenant.
2) PRORATION. Tenant's liability to pay Operating Expenses shall be
prorated on the basis of a 365 (or 366, as the case may be) day
year to account for any fractional portion of a year included at
the commencement or expiration of the Term of this Lease.
3) SURVIVAL. Landlord and Tenant's obligations to pay for or credit
any increase or decrease in payments pursuant to this (P)5. shall
survive this Lease.
g. FAILURE TO PAY. Failure of Tenant to pay any of the charges required
to be paid under this (P)5. shall constitute a material default and
breach of this Lease and Landlord's remedies shall be as specified in
(P)21
6. SECURITY DEPOSIT. Upon execution of this Lease, Tenant shall deposit a
security deposit ("SECURITY DEPOSIT") in the amount set forth in (P)1. with
Landlord, said Deposit to be in the form of a mutually acceptable
Irrevocable Letter of Credit. If Tenant is in default, Landlord can use the
Security Deposit or any portion of it to cure the default or to compensate
Landlord for any damages sustained by Landlord resulting from Tenant's
default. Upon demand, Tenant shall immediately pay to Landlord a sum equal
to the portion of the Security Deposit expended or applied by Landlord to
restore the Security Deposit to its full amount including any interest
which would have been earned on the portion of the Security Deposit
expended or applied by the Landlord, from the date of such expense or
application. In no event will Tenant have the right to apply any part of
the Security Deposit to any Rent due under this Lease. Landlord's
obligations with respect to the Security Deposit are those of a debtor and
not a trustee, and Landlord can commingle the Security Deposit with
Landlord's general funds. Landlord shall not be required to pay Tenant
interest on the Security Deposit. Landlord shall be entitled to immediately
endorse and cash Tenant's Security Deposit; however, such endorsement and
cashing shall not constitute Landlord's acceptance of this Lease. In the
event Landlord does not accept this Lease, Landlord shall return said
Security Deposit. Each time the Base Rent is increased, Tenant shall
deposit additional funds with Landlord sufficient to increase the Security
Deposit to an amount which bears the same relationship to the Base Rent as
the initial Security Deposit bore to the initial Base Rent. If Tenant is
not in default at the expiration or termination of this Lease and has fully
complied with the provisions of (P)9., (P)13.d.6) and (P)26., Landlord
shall return the Security Deposit to Tenant.
7. USE OF PREMISES
a. TENANT'S USE. Tenant shall use the Premises solely for the purposes
stated in (P)1. and for no other purposes without obtaining the prior
written consent of Landlord, which consent shall not be unreasonably
withheld. Tenant acknowledges that neither Landlord nor any agent of
Landlord has made any representation or warranty with respect to the
Premises or with respect to the suitability of the Premises to the
conduct of Tenant's business, nor has Landlord agreed to undertake any
modification, alteration or improvement to the Premises, except as
provided in writing in this Lease. Tenant shall promptly comply with
all laws, statutes, ordinances, orders and governmental regulations
affecting the Premises. Tenant shall not do or permit anything to be
done in or about the Premises or bring or keep anything in the
Premises that will in any way increase the premiums paid by Landlord
on its insurance related to the Premises. Tenant will not perform any
act or carry on any practices that may injure the Premises. Tenant
shall not use the Premises for sleeping, washing clothes, cooking or
the preparation, manufacture or mixing of anything that emits any
objectionable odor, noises, vibrations or lights onto such other
tenants. If, in Landlord's reasonable judgment, sound insulation is
required to muffle noise produced by Tenant on the Premises, Tenant at
its own cost shall provide all necessary insulation. Tenant shall not
do anything on the Premises which will overload any existing parking
or service to the Premises. Pets and/or animals of any type shall not
be kept on or about the Premises. Tenant covenants that it will not
interfere with other tenants' quiet enjoyment of their premises.
b. CC&R'S. Tenant agrees that this Lease is subject and subordinate to
the Covenants, Conditions and Restrictions, a copy of which is
attached hereto as Exhibit D, as they may be amended from time to time
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("CC&R'S"), and further agrees that the CC&R's are an integral part of
this Lease. Throughout the Term or any extension thereof,
notwithstanding any other provision hereof, Tenant shall faithfully
and timely assume and perform all obligations of Landlord and/or
Tenant under the CC&R's and any modifications or
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amendments thereto, including the payment of any periodic or special
dues or assessments against the Premises. Such dues and assessments
shall be included within the definition of Operating Expenses pursuant
to (P)5.b.11), and Tenant shall pay such amounts as further set forth
in (P)5. Tenant shall hold Landlord, its subsidiaries, shareholders,
directors, officers, agents and employees harmless and indemnify
Landlord, its subsidiaries, shareholders, directors, officers, agents
and employees against any loss, expense and damage, including
attorneys' fees and costs, arising out of the failure of Tenant to
perform or comply with the CC&R's.
c. Rules and Regulations. Tenant shall comply with and use the Premises
in accordance with the Rules and Regulations attached hereto as
Exhibit C and to any reasonable modifications to such Rules and
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Regulations as Landlord may adopt from time to time.
8. EMISSIONS; STORAGE, USE AND DISPOSAL OF WASTE
a. EMISSIONS. Tenant shall not:
1) Permit any vehicle on the Premises or in the Commons Areas to
emit exhaust which is in violation of any governmental law, rule,
regulation or requirement;
2) Discharge, emit or permit to be discharged or emitted, any
liquid, solid or gaseous matter, or any combination thereof, into
the atmosphere or on, into or under the Premises, any building or
other improvements of which the Premises are a part, or the
ground or any body of water which matter, as reasonably
determined by Landlord or any governmental entity, does or may
pollute or contaminate the same, or is, or may become,
radioactive or does, or may, adversely affect (a) the health or
safety of persons, wherever located, whether on the Premises or
anywhere else, (b) the condition, use or enjoyment of the
Premises or any other real or personal property, whether on the
Premises or anywhere else, or (c) the Premises or any of the
improvements thereto including buildings, foundations, pipes,
utility lines, landscaping or parking areas;
3) Produce, or permit to be produced, any intense glare, light or
heat;
4) Create, or permit to be created, any sound pressure level which
will interfere with the quiet enjoyment of any real property
outside the Premises, or which will create a nuisance or violate
any governmental law, rule, regulation or requirement;
5) Create, or permit to be created, any vibration that is
discernible outside the Premises; or
6) Transmit, receive or permit to be transmitted or received, any
electromagnetic, microwave or other radiation which is or may be
harmful or hazardous to any person or property in, or about the
Premises, or anywhere else.
b. STORAGE AND USE.
1) STORAGE. Subject to the uses permitted and prohibited to Tenant
under this Lease, Tenant shall store in appropriate leak proof
containers all solid, liquid or gaseous matter, or any
combination thereof, which matter, if discharged or emitted into
the atmosphere, the ground or any body of water, does or may (a)
pollute or contaminate the same, or (b) adversely affect the (i)
health or safety of persons, whether on the Premises or anywhere
else, (ii) condition, use or enjoyment of the Premises or any
real or personal property, whether on the Premises or anywhere
else, or (iii) Premises.
2) USE. In addition, without Landlord's prior written consent,
Tenant shall not use, store or permit to remain on or about the
Premises any solid, liquid or gaseous matter which is, or may
become radioactive. If Landlord does give its consent, Tenant
shall store the materials in such a manner that no radioactivity
will be detectable outside a designated storage area and Tenant
shall use the materials in such a manner that (a) no real or
personal property outside the designated storage area shall
become contaminated thereby and (b) there are and shall be no
adverse effects on the (i) health or safety of persons, whether
on the Premises or anywhere else, (ii) condition, use or
enjoyment of the Premises or any real or personal property
thereon or therein, or (iii) Premises or any of the improvements
thereto or thereon.
3) HAZARDOUS MATERIALS. Subject to the uses permitted and
prohibited to Tenant under this Lease, Tenant shall store, use,
employ, transport and otherwise deal with all Hazardous Materials
(as defined below) employed on or about the Premises in
accordance with all federal, state, or local law, ordinances,
rules or regulations applicable to Hazardous Materials in
connection with or respect to the Premises.
c. DISPOSAL OF WASTE.
1) REFUSE DISPOSAL. Tenant shall not keep any trash, garbage, waste
or other refuse on the Premises except in sanitary containers and
shall regularly and frequently remove same from the Premises.
Tenant shall keep all incinerators, containers or other equipment
used for storage or disposal of such materials in a clean and
sanitary condition.
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2) SEWAGE DISPOSAL. Tenant shall properly dispose of all sanitary
sewage and shall not use the sewage disposal system (a) for the
disposal of anything except sanitary sewage or (b) amounts in
excess of the lesser of: (i) that reasonably contemplated by the
uses permitted under this Lease or (ii) that permitted by any
governmental entity. Tenant shall keep the sewage disposal system
free of all obstructions and in good operating condition.
3) DISPOSAL OF OTHER WASTE. Tenant shall properly dispose of all
other waste or other matter delivered to, stored upon, located
upon or within, used on, or removed from, the Premises in such a
manner that it does not, and will not, adversely affect the (a)
health or safety of persons, wherever located, whether on the
Premises or elsewhere, (b) condition, use or enjoyment of the
Premises or any other real or personal property, wherever
located, whether on the Premises or anywhere else, or (c)
Premises or any of the improvements thereto or thereon including
buildings, foundations, pipes, utility lines, landscaping or
parking areas.
d. INFORMATION. Tenant shall provide Landlord with any and all
information regarding Hazardous Materials in the Premises, including
copies of all filings and reports to governmental entities at the time
they are originated, and any other information requested by Landlord.
In the event of any accident, spill or other incident involving
Hazardous Materials, Tenant shall immediately report the same to
Landlord and supply Landlord with all information and reports with
respect to the same. All information described herein shall be
provided to Landlord regardless of any claim by Tenant that it is
confidential or privileged.
e. COMPLIANCE WITH LAW. Notwithstanding any other provision in this
Lease to the contrary, Tenant shall comply with all laws, statutes,
ordinances, regulations, rules and other governmental requirements in
complying with its obligations under this Lease, and in particular,
relating to the storage, use and disposal of Hazardous Materials.
f. INDEMNITY. Tenant hereby agrees to indemnify, defend and hold
Landlord, its agents, employees, lenders, shareholders, directors,
representatives, successors and assigns harmless from and against any
and all actions, causes of action, losses, damages, costs, claims,
expenses, penalties, obligations or liabilities of any kind whatsoever
(including but not limited to reasonable attorneys' fees) arising out
of or relating to any Hazardous Materials employed, used, transported
across, or otherwise dealt with by Tenant (or investees, or persons or
entities under the control of Tenant) in connection with or with
respect to the Premises and the Property. Notwithstanding any other
provision of this Lease, the indemnity obligation of Tenant pursuant
to this (P)8.f. shall survive the termination of this Lease and shall
relate to any occurrence as described in this (P)8. occurring in
connection with this Lease. Landlord hereby agrees to indemnify,
defend and hold Tenant harmless from and against any all actions,
causes of action, losses, damages, costs, claims, expenses, penalties,
obligations or liabilities of any kind whatsoever (including
reasonable attorney's fees) arising out of or relating to hazardous
materials employed, used, transported to the Building, for which the
Premises are a part thereof, by Landlord, its agent's or employees.
For purposes of this Lease the term "HAZARDOUS MATERIALS" shall mean
any hazardous, toxic or dangerous waste, substance or material,
pollutant or contaminant, as defined for purposes of the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (42
U.S.C. Sections 9601 et seq.), as amended, or the Resource
Conservation and Recovery Act (42 U.S.C. Sections 6901 et seq.), as
amended, or any other federal, state, or local law, ordinance, rule or
regulation applicable to the Premises, or any substance which is
toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic, or otherwise hazardous, or any substance
which contains gasoline, diesel fuel or other petroleum hydrocarbons,
polychlorinated biphenyis (PCB's), or radon gas, urea formaldehyde,
asbestos or lead.
9. SIGNS. Tenant shall not place any sign upon the Premises or the Property,
except that Tenant may, with Landlord's prior written consent, install (but
not on the roof) such signs as are reasonably required to indicate Tenant's
company name or logo provided such signs are in compliance with all
applicable governmental requirements and the CC&R's. The installation of
any sign on or adjacent to the Premises by or for Tenant shall be subject
to the provisions of (P)13. (Repairs and Maintenance) Tenant shall remove
any sign placed on or adjacent to the Premises by Tenant upon the
expiration of the Term or sooner termination of this Lease, and Tenant
shall repair any damage or injury to the Premises or the Property caused
thereby, all at Tenant's expense. If any signs are not removed, or
necessary repairs not made, Landlord shall have the right to remove the
signs and repair any damage or injury to the Premises at Tenant's sole cost
and expense. Landlord reserves all rights to the use of the roof and the
right to install, and all revenues from the installation of, such signs on
the Premises, including the roof, as do not unreasonably interfere with the
conduct of Tenant's business within the Premises.
10. PERSONAL PROPERTY TAXES. Tenant shall pay prior to delinquency all taxes
assessed against and levied upon Tenant owned leasehold improvements, trade
fixtures, furnishings, equipment and all personal property of Tenant
contained in the Premises or elsewhere. When possible, Tenant shall cause
its leasehold improvements, trade fixtures, furnishings, equipment and all
other personal property to be assessed and billed separately from the real
property of Landlord. If any of Tenant's said personal property shall be
assessed with Landlord's real property, Tenant shall pay Landlord the taxes
attributable to Tenant within ten (10) days after receipt of a written
statement setting forth the taxes applicable to Tenant's property.
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11. REAL PROPERTY TAXES.
a. PAYMENT OF TAXES. Landlord shall pay the Building's Real Property
Taxes, as defined in (P)11.c., during the Term of this Lease. Subject
to (P)11.b., Tenant shall promptly reimburse Landlord according to
(P)5. for Tenant's Share of Property of such Real Property Taxes paid
by Landlord.
b. ADVANCE PAYMENT. In order to ensure payment when due and before
delinquency of any or all Real Property Taxes, Landlord reserves the
right, at Landlord's option, to estimate the current Real Property
Taxes applicable to the Premises, and to require each installment of
the Real Property Taxes to be paid in advance to Landlord by Tenant,
either: (i) in a lump sum amount, at least twenty (20) days prior to
the applicable delinquency date, or (ii) monthly in advance with the
payment of the Base Rent. If Landlord elects to require payment
monthly in advance, the monthly payment shall be that equal monthly
amount which, over the number of months remaining before the month in
which the applicable tax installment would become delinquent, would
provide a fund large enough to fully discharge before delinquency the
estimated installment of Real Property Taxes to be paid. When the
actual amount of the applicable tax ▇▇▇▇ is known, Landlord may, but
is not required to, adjust the amount of such equal monthly advance
payment so as to provide the funds needed to pay the applicable Real
Property Taxes before delinquency. If the amounts paid to Landlord by
Tenant under the provisions of this (P)11 are insufficient to
discharge the obligations of Tenant to pay such Real Property Taxes as
the same become due, Tenant shall pay to Landlord, upon Landlord's
demand, such additional sums as are necessary to pay such obligations.
All moneys paid to Landlord under this (P)11. may be intermingled with
other moneys of Landlord and shall not bear interest. In the event of
a breach by Tenant in the performance of the obligations of Tenant
under this Lease, then any balance of funds paid to Landlord under the
provisions of this (P)11 may, at the option of Landlord, be treated as
an additional Security Deposit under (P)6.
c. DEFINITION OF "REAL PROPERTY TAXES". As used herein, the term "REAL
PROPERTY TAXES" shall include any form of real estate tax or
assessment, general, special, ordinary or extraordinary, and any
license fee, commercial rental tax, improvement bond or bonds, levy or
tax or other fee, charge, or excise which may be imposed as a
substitute for any of the foregoing (other than inheritance, personal
income or estate taxes) imposed upon the Property by any authority
having the direct or indirect power to tax, including any city,
county, state or federal government, or any school, agricultural,
sanitary, fire, street, drainage or other improvement district
thereof, levied against any legal or equitable interest of Landlord in
the Property, Landlord's right to rent or other income therefrom,
and/or Landlord's business of leasing the Property. The term "Real
Property Taxes" shall also include any tax, fee, levy, assessment or
charge, or any increase therein, imposed by reason of events
occurring, or changes in applicable law taking effect, during the Term
of this Lease, including but not limited to a change in the ownership
of the Property or in the improvements thereon, the execution of this
Lease, or any modification, amendment or transfer thereof, and whether
or not contemplated by the parties hereto.
12. UTILITIES. Tenant shall pay for all water, gas, heat, light, power,
telephone, trash disposal and other utilities and services supplied to the
Premises, together with any taxes thereon, if any such services are not
separately metered to Tenant, Tenant shall pay a reasonable proportion, to
be determined by Landlord, of all charges jointly metered with other
premises.
13. REPAIRS AND MAINTENANCE
a. LANDLORD'S OBLIGATIONS. Landlord shall keep the Property, including
the foundation, exterior walls, roof. and common area of the Building,
and the equipment whether used exclusively for the Premises or in
common with other premises, in good condition and repair subject to
reimbursement by Tenant in accordance with (P)5. There shall be no
abatement of Rent or liability to Tenant on account of any injury or
interference with Tenant's business with respect to any improvements,
alterations or repairs made by Landlord to the Property or any part
thereof, provided that if any of the foregoing prevent Tenant from
using the Premises for more than ten(10) consecutive business days,
then commencing upon the expiration of such ten (10) business day
period, Rent shall ▇▇▇▇▇ until Tenant's use of the Premises is
restored.
b. TENANT'S OBLIGATIONS.
1) General. Tenant shall, at Tenant's sole cost and expense and at
all times, contract for janitorial services and supplies, keep
the Premises in good order, condition and repair, including,
without limiting the generality of the foregoing, all equipment
or facilities serving the Premises, such as plumbing, heating,
air conditioning, ventilating, electrical, lighting facilities,
boilers, fired or unfired pressure vessels, fixtures, interior
walls, ceilings, floors, windows, window frames, interior and
exterior doors and door frames, plate glass and skylights. Tenant
shall not cause or permit any Hazardous Material to be spilled or
released in, on, under or about the Premises (including through
the plumbing or sanitary sewer system) and shall promptly, at
Tenant's expense, take all investigatory and/or remedial action
reasonably recommended, whether or not formally ordered or
required, for the cleanup of any contamination of, and for the
maintenance, security and/or monitoring of the Premises, the
elements surrounding same, or neighboring properties, that was
caused or materially contributed to by Tenant, or pertaining to
or involving any Hazardous Materials and/or storage tank brought
onto the Premises by or for Tenant or under its control. Tenant,
in keeping the Premises in good order, condition and repair,
shall exercise and perform good maintenance practices. Tenant's
obligations shall include restorations, replacements or
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renewals when necessary to keep the Premises and all improvements
thereon or a part thereof in good order, condition and state of
repair.
2) CONTRACTS. Tenant shall, at Tenant's sole cost and expense,
procure and maintain contracts, with copies to Landlord, in
customary form and substance for, and with contractors
specializing and experienced in, the inspection, maintenance and
service of heating, air conditioning and ventilation equipment,
if any, servicing the Premises. Tenant shall keep a detailed
preventative maintenance schedule and log showing the frequency
of maintenance on all HVAC, mechanical, electrical and other
systems servicing the Premises and provide Landlord with a copy
of same quarterly.
3) AS-IS CONDITION. The parties affirm that Landlord, its
subsidiaries, officers, shareholders, directors, agents and/or
employees have made no representations to Tenant respecting the
condition of the Premises except as specifically stated herein.
4) AMERICANS WITH DISABILITIES ACT. Tenant acknowledges that as of
the Commencement Date, the Premises may not comply with the
Americans with Disabilities Act of 1990 ("ADA"), and that
Landlord shall have no obligation with respect to any such
failure of the Premises to so comply. Tenant shall, at its cost,
at any time during the Term as required by any applicable
governmental agency having jurisdiction over the Premises, make
such modifications and alterations to the Premises as may be
required in order to fully comply with the provisions of the ADA,
as from time to time amended, and any and all regulations issued
pursuant to or in connection with the ADA in such a manner as to
satisfy the applicable governmental agency or agencies requiring
remediation. Tenant shall at least thirty (30) days prior to the
commencement of any construction in connection with satisfaction
of the ADA, give written notice to Landlord of its intended
commencement of construction together with sufficient details so
as to reasonably disclose to Landlord the nature of the proposed
construction, copies of any notices received by Tenant from
applicable governmental agencies in connection with the ADA and
such other documents or information as Landlord may reasonably
request. In any event, notwithstanding anything to the contrary
contained in this Lease, prior to the termination of the Term,
Tenant shall, at its cost, make such modifications and
alterations to the Premises as may be required to comply fully
with the ADA as from time to time amended and any and all
regulations issued thereunder. Tenant shall give the Landlord
thirty (30) days prior written notice as described above in
connection with any such construction. Any and all construction
required to so comply with the ADA shall be completed by Tenant
prior to the expiration of the Term.
c. COMPLIANCE WITH GOVERNMENTAL REGULATIONS. Tenant shall, at its own
cost and expense, promptly and properly observe and comply with all
present and future orders, regulations, directions, rules, laws,
ordinances, and requirements of all governmental authorities
(including but not limited to state, municipal, county and federal
governments and their departments, bureaus, boards and officials)
arising from the use or occupancy of, or applicable to, the Premises
or privileges appurtenant to or in connection with the enjoyment of
the Premises. Tenant shall also comply with all such rules, laws,
ordinances and requirements at the time Tenant makes any alteration,
addition or change to the Premises.
d. MISCELLANEOUS.
1) Landlord and Tenant shall each do all acts required to comply
with all applicable laws, ordinances and rules of any public
authority relating to their respective maintenance obligations as
set forth herein.
2) Tenant expressly waives the benefits of any statute now or
hereafter in effect which would otherwise afford the Tenant the
right to make repairs at Landlord's expense or to terminate this
Lease because of Landlord's failure to keep the Premises and the
Property in good order condition and repair. Specifically, Tenant
waives the provisions of California Civil Code Sections 1941 and
1942 with respect to Landlord's obligations for Tenant
tenantability of the Premises and Tenant's right to make repairs
and deduct the expenses of such repairs from Rent.
3) Tenant shall not place a load upon any floor of the Premises
which exceeds the load per square foot which such floor was
designed to carry, as determined by Landlord or Landlord's
structural engineer. The cost of any such determination made by
Landlord's structural engineer shall be paid for by Tenant upon
demand.
4) Except as otherwise expressly provided in this Lease, Landlord
shall have no liability to Tenant nor shall Tenant's obligations
under this Lease be reduced or abated in any manner whatsoever by
reason of any inconvenience, annoyance, interruption or injury to
business arising from Landlord making any repairs or changes
which Landlord is required to make or is permitted to make by
this Lease or by any tenant's lease or is required by law to make
in or to any portion of the Premises. Landlord shall nevertheless
use reasonable efforts to minimize any interference with Tenant's
business in the Premises.
5) Tenant shall give Landlord prompt notice of any damage to or
defective condition in any part or appurtenance of the Premises'
mechanical, electrical, plumbing, HVAC or other systems serving
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located in or passing through the Premises. Upon request by
Landlord, Tenant shall provide Landlord with evidence reasonably
acceptable to Landlord of service contracts on such systems.
6) Upon the expiration or early termination of this Lease, Tenant
shall return the Premises to Landlord clean and in the same
condition as on the date Tenant took possession, except for
normal wear and tear, but including the Approved Work as set
forth in (P)29.b. hereof. Any damage to the Premises, including
any structural damage, resulting from Tenant's use or from the
removal of Tenant's fixtures, furnishings and equipment shall be
repaired by Tenant prior to the end of the Term at Tenant's
expense.
7) Landlord may, at Landlord's option, choose to perform any of the
Tenant's obligations in this 1113. The cost of any such Tenant's
obligations so performed by Landlord shall be at Tenant's sole
cost and expense. Tenant shall reimburse Landlord for any such
costs incurred by Landlord in the performance of such Tenant's
obligations within ten (10) days of receipt of a billing from
Landlord.
14. ALTERATIONS. Tenant shall not make any alterations to the Premises or the
Property without Landlord's prior written consent. If Landlord gives its
consent to such alterations, Landlord may post notices in accordance with
the laws of the state in which the Premises are located. All alterations
made by Tenant, whether or not subject to the approval of Landlord, shall
be performed by Tenant and its contractors in a first class workmanlike
manner and permits and inspections shall be obtained from all required
governmental entities. Any alterations made shall remain on and be
surrendered with the Premises upon expiration or termination of this Lease,
except that Landlord may, within thirty (30) days before or thirty (30)
days after expiration of the Term, elect to require Tenant to remove some
or all of the alterations which Tenant may have made to the Premises except
for the Approved Work as set forth in (P)29.b. hereof. If Landlord so
elects, Tenant shall at its own cost restore the Premises to the condition
designated by Landlord in its election, before the last day of the Term or
within thirty (30) days after notice of its election is given, whichever is
later. Should Landlord consent in writing to Tenant's alteration of the
Premises, Tenant shall contract with a contractor approved by Landlord for
the construction of such alterations, shall secure all appropriate
governmental approvals and permits, and shall complete such alterations
with due diligence in compliance with plans and specifications approved by
Landlord. Tenant shall pay all costs for such construction and shall keep
the Premises free and clear of all mechanics' liens which may result from
construction by Tenant.
15. RELEASE AND INDEMNITY. As material consideration to Landlord, Tenant
agrees that Landlord shall not be liable to Tenant for any damage to Tenant
or Tenant's property from any cause, except for damages resulting from
Landlord's gross negligence or willful misconduct, and Tenant waives all
claims against Landlord for damage to persons or property arising for any
reason, except for damage resulting directly from Landlord's breach of its
express obligations under this Lease which Landlord has not cured within a
reasonable time after written notice of such breach from Tenant. Tenant
shall indemnify and hold Landlord harmless from all damages including
attorneys' fees and costs arising out of any damage to any person or
property occurring in, on or about the Premises or Tenant's use of the
Premises or Tenant's breach of any term of this Lease. Landlord shall
indemnify and hold Tenant harmless from all damages including reasonable
attorney's fees and costs arising out of damage to any person or property
occurring in, on or about the Premises as a result of Landlord's gross
negligence or willful misconduct.
16. INSURANCE
a. PAYMENT FOR INSURANCE. Regardless of whether the Landlord or Tenant
is the Insuring Party, Tenant shall pay for all insurance required
under this I]16. ("Insurance Costs") either directly or by
reimbursement to Landlord as specified in this (P)16. Premiums for
policy periods commencing prior to or extending beyond the Lease Term
shall be prorated to correspond to the Lease Term Payment shall be
made by Tenant to Landlord within ten (10) days following receipt of
an invoice for any amount due.
b. LIABILITY INSURANCE.
1) Carried by Tenant. Whether or not Tenant is the Insuring Party,
Tenant shall obtain and keep in force during the Term of this
Lease a commercial general liability policy of insurance
protection Tenant and Landlord (as an additional insured) against
claims for bodily injury, personal injury and property damage
based upon, involving or arising out of the ownership, use,
occupancy or maintenance of the Premises and all areas
appurtenant thereto. Such insurance shall be on an occurrence
basis providing single limit coverage in an amount not less than
$2,000,000 per occurrence with an "Additional Insured-Managers or
Landlords of Premises" endorsement and contain an "Amendment of
the Pollution Exclusion" for damage caused by heat, smoke or
fumes from a hostile fire. The policy shall not contain any
intra-insured exclusions as between insured persons or
organizations, but shall include coverage for liability assumed
under this Lease as an "insured contract" for the performance of
Tenant's indemnity obligations under this Lease. The limits of
said insurance required by this Lease or as carried by Tenant
shall not, however, limit the liability of Tenant nor relieve
Tenant of any obligation hereunder. All insurance to be carried
by Tenant shall be primary to and not contributory with any
similar insurance carried by Landlord whose insurance shall be
considered excess insurance only. All insurance coverage required
pursuant to this (P)16. which is to name Landlord as a named
insured shall also name Landlord's subsidiaries, directors,
agents, officers and employees as named insureds.
2) CARRIED BY LANDLORD. In the event Landlord is the Insuring
Party, Landlord shall also maintain liability insurance as
described in (P)16.b. 1), in addition to, and not in lieu of the
insurance required
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to be maintained by Tenant. In the event Tenant is the Insuring
Party, Landlord shall in addition carry Landlord's Risk Coverage
and insure the Premises on Landlord's umbrella policy and Tenant
shall reimburse Landlord the cost thereof. Tenant shall not be
named as an additional insured therein under any insurance
obtained by Landlord in accordance with this (P)16.b.2).
c. PROPERTY INSURANCE -- BUILDING, IMPROVEMENTS AND RENTAL VALUE.
1) BUILDING AND IMPROVEMENTS. The Insuring Party shall obtain and
keep in force during the Term of this Lease a policy or policies
in the name of Landlord, with loss payable to Landlord and to the
holders of any mortgages, deeds of trust or ground leases on the
Property ("LENDER(S)"), insuring loss or damage to the Property.
The amount of such insurance shall be equal to the full
replacement cost of the Property, as the same shall exist from
time to time, or the amount required by Lender(s), but in no
event more than the commercially reasonable and available
insurable value thereof if, by reason of the unique nature or age
of the improvements involved, such latter amount is less than
full replacement cost. Such policy or policies shall insure
against all risks of direct physical loss or damage (including
Boiler and Machinery coverage and the perils of flood and
earthquake), including coverage for any additional costs
resulting from debris removal and reasonable amounts of coverage
for the enforcement of any ordinance or law regulating the
reconstruction or replacement of any undamaged sections of the
Property required to be demolished shall also contain an agreed
valuation provision in lieu of any coinsurance clause, waiver of
subrogation and inflation guard protection causing an increase in
the annual property insurance coverage amount by a factor of not
less than the adjusted U.S. Department of Labor Consumer Price
Index for All Urban Consumers for the city nearest to where the
Property is located. If such insurance coverage has a deductible
clause, then Tenant shall be liable for such deductible amount.
Even if Landlord is the Insuring Party, Tenant's personal
property shall be insured by Tenant under (P)16.d. rather than by
Landlord.
2) RENTAL VALUE. The Insuring Party shall, in addition, obtain and
keep in force during the term of this Lease a policy or policies
in the name of Landlord, with loss payable to Landlord and
Lender(s), insuring the loss of the full rental and other charges
payable by Tenant to Landlord under this Lease for one (1) year
(including all Real Property Taxes, Insurance Costs and any
scheduled Rent increases). Said insurance shall provide that in
the event the Lease is terminated by reason of an insured loss,
the period of indemnity for such coverage shall be extended
beyond the date of the completion of repairs or replacement of
the Premises, to provide for one full year's loss of Rent from
the date of any such loss. Said insurance shall contain an agreed
valuation provision in lieu of any coinsurance clause, and the
amount of coverage shall be adjusted annually to reflect the
projected Rent, Real Property Taxes, Insurance Costs and other
expenses, if any, otherwise payable by Tenant, for the next
twelve (12) month period. Tenant shall be liable for any
deductible amount in the event of such loss.
3) ADJACENT PREMISES. If the Premises are part of a larger
building, or if the Premises are part of a group of buildings
owned by Landlord which are adjacent to the Premises, the Tenant
shall pay for any increase in the premiums for the property
insurance of such building or buildings if said increase is
caused by Tenant's acts, omissions, use or occupancy of the
Premises.
4) TENANT'S IMPROVEMENTS. If the Landlord is the Insuring Party,
the Landlord shall not be required to insure Tenant's personal
property and leasehold improvements unless the item in question
has become the property of Landlord under the terms of this
Lease. If Tenant is the Insuring Party, the policy carried by
Tenant under this (P)16.c. shall insure Tenant's personal
property and leasehold improvements.
d. TENANT'S PROPERTY INSURANCE. Subject to the requirements of (P)16.e.,
Tenant at its cost shall either by separate policy, or at Landlord's
option, by endorsement to a policy already carried, maintain insurance
coverage on all of Tenant's personal property and Tenant owned
leasehold improvements in, on or about the Premises similar in
coverage to that carried by the Insuring Party under (P)16.c. Such
insurance shall be full replacement cost coverage with a deductible of
not to exceed $10,000 per occurrence. The proceeds from any such
insurance shall be used by Tenant for the replacement of personal
property or the restoration of Tenant owned leasehold improvements.
Tenant shall be the Insuring Party with respect to the insurance
required by this (P)16.d. and shall provide Landlord with written
evidence that such insurance is in force.
e. INSURANCE POLICIES. If Tenant is the Insuring Party, insurance
required per this (P)16. shall be with companies duly licensed to
transact business in the state where the Premises are located, and
maintaining during the policy term a "General Policyholders Rating" of
at least A-X, or such other minimal rating as may be required by
Lender(s) as set forth in the most current issue of "Best's Insurance
Guide" Tenant shall not do or permit to be done anything which shall
invalidate the insurance policies referred to in this (P)16. If Tenant
is the Insuring Party, Tenant shall cause to be delivered to Landlord
certified copies of policies of such insurance or certificates
evidencing the existence and amounts of such insurance with the
insureds and loss payable clauses as required by this Lease. No such
policy shall be cancelable or subject to modification except after
thirty (30) days prior written notice to Landlord. Tenant shall at
least thirty (30) days prior to the expiration of such policies,
furnish Landlord with evidence of renewals or "insurance binders"
evidencing renewal thereof, or Landlord may order such insurance and
charge the cost thereof to Tenant, which amount shall be payable by
Tenant to Landlord upon demand. If the
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Insuring Party shall fail to procure and maintain the insurance
required to be carded by the Insuring Party under this (P)16., the
other Party may, but shall not be required to, procure and maintain
the same, but at Tenant's expense.
f. MUTUAL WAIVER. Notwithstanding anything to the contrary contained in
this Lease, to the extent that this release and waiver does not
invalidate or impair their respective insurance policies, the parties
hereto release each other and their respective agents, employees,
officers, directors, shareholders, successors, assignees and
subtenants from all liability for injury to any person or damage to
any property that is caused by or results from a risk which is
actually insured against pursuant to the provisions of this Lease
without regard to the negligence or willful misconduct of the parties
so released. Each party shall use its best efforts to cause each
insurance policy it obtains to provide that the insurer thereunder
waives all right of recovery by way of subrogation as required herein
in connection with any injury or damage covered by the policy. If such
insurance policy cannot be obtained with such waiver of subrogation,
or if such waiver of subrogation is only available at additional cost
and the party for whose benefit the waiver is not obtained does not
pay such additional costs after reasonable notice, then the party
obtaining such insurance shall promptly notify the other party of the
inability to obtain insurance coverage with the waiver of subrogation
17. DAMAGE AND DESTRUCTION
a. DAMAGE -- RESTORATION REQUIRED. In the event that the Building
containing the Premises is damaged by fire or other casualty which is
covered under insurance pursuant to the provisions of (P)16. above,
Landlord shall restore such damage provided that: (i) the destruction
of the Building containing the Premises does not exceed sixty percent
(60%) of the then replacement value of the Building containing the
Premises; (ii) the insurance proceeds are available (inclusive of any
deductible amounts) to pay one hundred percent (100%) of the cost of
restoration; and (iii) in the reasonable judgment of Landlord, the
restoration can be completed within two hundred and seventy (270) days
after the date of the damage or casualty under the laws and
regulations of the state, federal, county and municipal authorities
having jurisdiction. The deductible amount of any insurance coverage
for damage to the Premises shall be paid by Tenant. If such conditions
apply so as to require Landlord to restore such damage pursuant to
this 1117.a., this Lease shall continue in full force and effect,
unless otherwise agreed to in writing by Landlord and Tenant. Tenant
shall be entitled to a proportionate reduction of Rent while such
restoration takes place, such proportionate reduction to be based on
the extent to which the damage and restoration efforts interfere with
Tenant's business in the Premises. Tenant's right to a reduction of
Rent hereunder shall be Tenant's sole and exclusive remedy in
connection with any such damage.
b. DAMAGE -- RESTORATION NOT REQUIRED. In the event that the Building
containing the Premises is damaged by a fire or other casualty and
Landlord is not required to restore such damage in accordance with the
provisions of (P)17.a. immediately above, Landlord shall have the
option to either (i) repair or restore such damage, with the Lease
continuing in full force and effect, but Rent to be proportionately
abated as provided in (P)17.a. above; or (ii) give notice to Tenant at
any time within thirty (30) days after the occurrence of such damage
terminating this Lease as of a date to be specified in such notice
which date shall not be less than thirty (30) nor more than sixty (60)
days after the date on which such notice of termination is given. In
the event of the giving of such notice of termination, this Lease
shall expire and all interest of Tenant in the Premises shall
terminate on the date so specified in such notice and the Rent
reduced by any proportionate reduction in Rent as provided for in
(P)17.a. above, shall be paid to the date of such termination.
Notwithstanding the foregoing, if Tenant delivers to Landlord the
funds necessary to make up the shortage (or absence) in insurance
proceeds and the restoration can be completed in a two hundred seventy
(270) day period, as reasonably determined by Landlord, and the
destruction of the Building containing the Premises does not exceed
sixty percent (60%) of the then replacement value, Landlord shall
restore the Premises as provided in (P)17.a. above.
c. END OF TERM CASUALTY. Notwithstanding the provisions of (P)17.a. and
(P)17.b. above, either Landlord or Tenant may terminate this Lease if
the Building containing the Premises is damaged by fire or other
casualty, Landlord's reasonably estimated cost of restoration of the
Building containing the Premises exceeds ten percent (10%) of the then
replacement value of the Building containing the Premises and such
damage or casualty occurs during the last twelve (12) months of the
Term of this Lease (or the Term of any renewal option, if applicable)
by giving the other notice thereof at any time within thirty (30) days
following the occurrence of such damage or casualty. Such notice shall
specify the date of such termination which date shall not be less than
thirty (30) nor more than sixty (60) days following the date or which
such notice of termination is given, in the event of the giving of
such notice of termination, this Lease shall expire and all interest
of Tenant in the Premises shall terminate on the date so specified in
such notice and the Rent shall be paid to the date of such
termination.
d. TERMINATION BY TENANT. In the event that the destruction to the
Building containing the Premises cannot be restored as required herein
under applicable laws and regulations within two hundred seventy (270
days of the damage or casualty, notwithstanding the availability of
insurance proceeds, Tenant shall have the right to terminate this
Lease by giving the Landlord notice thereof within thirty (30) days of
date of the occurrence of such casualty specifying the date of
termination which shall not be less than thirty (30) days nor more
than sixty (60) days following the date on which such notice of
termination is given. In the eve of the giving of such notice of
termination, this Lease shall expire and all interest of Tenant in the
Premises shall terminate on the date so specified in such notice and
the Rent, reduced by any proportional reduction in Rent as provided
for in (P)17a. above, shall be paid to the date of such termination.
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e. RESTORATION. Landlord agrees that, in any case in which Landlord is
required to, or otherwise agrees to restore the Building containing
the Premises, Landlord shall proceed with due diligence to make all
appropriate claims and applications for the proceeds of insurance and
to apply for and obtain all permits necessary for the restoration of
the Building containing the Premises. Landlord shall use reasonable
efforts to enforce any and all provisions in any mortgage, deed of
trust or other encumbrance on the Building containing the Premises
requiring Landlord and Lender to permit insurance proceeds to be used
for restoration. Landlord shall restore the Premises at least equal to
the condition existing prior to the date of the damage if permitted by
applicable law.
18. CONDEMNATION
a. DEFINITIONS. The following definitions shall apply: (1)
"CONDEMNATION" means (a) the exercise of any governmental power of
eminent domain, whether by legal proceedings or otherwise by
condemnor, or (b) the voluntary sale or transfer by Landlord to any
condemnor either under threat of condemnation or while legal
proceedings for condemnation are proceeding; (2) "DATE OF TAKING"
means the date the condemnor has right to possession of the property
being condemned; (3) "AWARD" means all compensation, sums or anything
of value awarded, paid or received on a total or partial Condemnation;
and (4) "CONDEMNOR" means any public or quasi-public authority, or
private corporation or individual, having power of Condemnation.
b. OBLIGATIONS TO BE GOVERNED BY LEASE. If during the Term of the Lease
there is any taking of all or any part of the Building containing the
Premises, the rights and obligations of the parties shall be
determined strictly pursuant to this Lease.
c. TOTAL OR PARTIAL TAKING. If the Building containing the Premises are
totally taken by Condemnation, this Lease shall terminate on the Date
of Taking. If any portion of the Building containing the Premises is
taken by Condemnation, this Lease shall remain in effect, except that
Tenant can elect to terminate this Lease if the remaining portion of
the Premises is rendered unsuitable for Tenant's continued use of the
Premises. If Tenant elects to terminate this Lease, Tenant must
exercise its right to terminate by giving notice to Landlord within
thirty (30) days after the nature and extent of the Condemnation have
been finally determined. If Tenant elects to terminate this Lease,
Tenant shall also notify Landlord of the date of termination, which
date shall not be earlier than thirty (30) days nor later than ninety
(90) days after Tenant has notified Landlord of its election to
terminate; except that this Lease shall terminate on the Date of
Taking if the Date of Taking falls on a date before the date of
termination as designated by Tenant. If any portion of the Premises is
taken by Condemnation and this Lease remains in full force and effect,
on the Date of Taking the Base Rent shall be reduced by an amount in
the same ratio as the total number of square feet in the Premises
taken bears to the total number of square feet in the Premises
immediately before the Date of Taking. Any Award for the taking of all
or any part of the Premises under the power of eminent domain or any
payment made under threat of the exercise of such power shall be the
property of Landlord, whether such Award shall be made as compensation
for diminution in value of the leasehold or for the taking of the fee,
or as severance damages; provided, however, that Tenant shall be
entitled to any compensation separately awarded to Tenant for Tenant's
relocation expenses and/or loss of Tenant's trade fixtures.
19. ASSIGNMENT OR SUBLEASE
a. Tenant shall not assign or encumber its interest in this Lease or the
Premises or sublease all or any part of the Premises or allow any
other person or entity (except Tenant's authorized representatives,
employees, invitees or guests) to occupy or use all or any part of the
Premises without first obtaining Landlord's consent, which consent
shall not be unreasonably withheld. Any assignment, encumbrance or
sublease without Landlord's prior written consent shall be voidable
and at Landlord's election, shall constitute a default. If Tenant is a
partnership, a withdrawal or change, voluntary, involuntary or by
operation of law of any partner, or the dissolution of the
partnership, shall be deemed a voluntary assignment. If Tenant
consists of more than one person, a purported assignment, voluntary or
involuntary or by operation of law from one person to the other shall
be deemed a voluntary assignment. If Tenant is a corporation, any
dissolution, merger, consolidation or other reorganization of Tenant,
or sale or other transfer of a controlling percentage of the capital
stock of Tenant, or the sale of at least fifty percent (50%) of the
value of the assets of Tenant shall be deemed a voluntary assignment.
Seventy-five percent (75%) of all Rent received by Tenant from its
subtenants in excess of the Rent payable by Tenant to Landlord under
this Lease applicable to the portion of the Premises subleased shall
be paid to Landlord, or seventy-five percent (75%) of any sums to be
paid by an assignee to Tenant in consideration of the assignment of
this Lease shall be paid to Landlord less Tenant's reasonable cost of
real estate commissions, tenant improvements and reasonable legal fees
in connection with said assignment or sublet. If Tenant requests
Landlord to consent to a proposed assignment or subletting, Tenant
shall pay to Landlord, whether or not consent is ultimately given, an
amount equal to Landlord's reasonable attorneys' fees and costs
incurred in connection with such request. Each request for consent to
an assignment or subletting shall be in writing, and shall be
accompanied by information as may be relevant to Landlord's
determination as to the financial and operational responsibility and
stability of the proposed assignee or sublessee and the
appropriateness of the proposed use by such assignee or sublessee.
Such information shall include a summary of the proposed use of, and
any proposed modifications to, the Premises. Tenant shall provide
Landlord with such other or additional information and/or
documentation as may reasonably be requested by Landlord. Tenant
shall, upon completion of any assignment or subletting of all or any
portion of the Premises, immediately and irrevocably assign to
Landlord as security for Tenant's obligations under the
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Lease, all Rent from any such subletting or assignment. Landlord, as
assignee and attorney in fact for Tenant, shall have the right to
collect all rent and other revenues collectable pursuant to any such
sublet or assignment and apply such rent and other revenues towards
Tenants obligations under the Lease.
b. No interest of Tenant in this Lease shall be assignable by involuntary
assignment through operation of law (including without limitation the
transfer of this Lease by testacy or intestacy). Each of the following
acts shall be considered an involuntary assignment: (a) if Tenant is
or becomes bankrupt or insolvent, makes an assignment for the benefit
of creditors, or institutes proceedings under the Bankruptcy Act in
which Tenant is the bankrupt; or if Tenant is a partnership or
consists of more than one person or entity, if any partner of the
partnership or other person or entity is or becomes bankrupt or
insolvent, or makes an assignment for the benefit of creditors; or (b)
if a writ of attachment or execution is levied on this Lease; or (c)
if in any proceeding or action to which Tenant is a party, a receiver
is appointed with authority to take possession of the Premises. An
involuntary assignment shall constitute a default by Tenant and
Landlord shall have the right to elect to terminate this Lease, in
which case this Lease shall not be treated as an asset of Tenant.
c. Landlord may, at its option, elect to terminate the Lease instead of
approving the requested assignment or sublease. Should Landlord so
elect to terminate this Lease, all of the obligations of the parties
thereunder shall terminate on the later of sixty (60) days following
Landlord's notice to Tenant of its election hereunder, or the
effective date of the proposed assignment or subletting sought by the
Tenant, but in no event later than one hundred twenty (120) days
following the date of Landlord's electron under this (P)19.c. At the
time of termination, all obligations of both parties hereunder shall
terminate as to obligations thereafter accruing except as otherwise
expressly provided in this Lease.
20. DEFAULT. The occurrence of any of the following shall constitute a default
by Tenant: (a) a failure of Tenant to pay Rent within five (5) days of its
due date; (b) abandonment and vacation of the Premises (failure to occupy
and operate the Premises for ten (10) consecutive days shall be deemed an
abandonment and vacation); or (c) failure to timely perform any other
provision of this Lease within ten (10) days of Landlord's notice thereof
to Tenant.
21. LANDLORD'S REMEDIES. Landlord shall have the following remedies if Tenant
is in default. (These remedies are not exclusive; they are cumulative and
in addition to any remedies now or later allowed by law):
a. Landlord may continue this Lease in full force and effect, and this
Lease will continue in effect so long as Landlord does not terminate
Tenant's right to possession, and Landlord shall have the right to
collect Rent when due. During the period Tenant is in default,
Landlord can enter the Premises and relet the Premises, or any part of
the Premises, to third parties for Tenant's account. Tenant shall be
liable immediately to Landlord for all costs Landlord incurs in
reletting the Premises, including without limitation, brokers'
commissions, expenses of remodeling the Premises required by the
reletting, and like costs. Reletting can be for a period shorter or
longer than the remaining Term of this Lease. Tenant shall pay to
Landlord the Rent due under this Lease on the dates the Rent is due,
less the Rent Landlord receives from any reletting. No act by Landlord
allowed by this (P)21.a. shall terminate this Lease unless Landlord
notifies Tenant in writing that Landlord elects to terminate this
Lease. After Tenant's default and for so long as Landlord does not
terminate Tenant's right to possession of the Premises, if Tenant
obtains Landlords consent, Tenant shall have the right to assign or
sublet its interest in this Lease, but Tenant shall not be released
from liability. Landlord's consent to such a proposed assignment or
subletting shall not be unreasonably withheld. If Landlord elects to
relet the Premises as provided in this (P)21.a., Rent that Landlord
receives from reletting shall be applied to the payment of first, any
indebtedness from Tenant to Landlord other than Rent due from Tenant;
second, all costs, including for maintenance incurred by Landlord in
reletting; and third, Rent due and unpaid under this Lease. After
deducting the payments referred to in this (P)21.a., any sum remaining
from the Rent Landlord receives from reletting shall be held by
Landlord and applied in payment of future Rent as Rent becomes due
under this Lease. In no event shall Tenant be entitled to any excess
Rent received by Landlord. If, on the date Rent is due under this
Lease, the Rent received from the reletting is less than the Rent due
on that date, Tenant shall pay to Landlord, in addition to the
remaining Rent due, all costs including for maintenance Landlord
incurred in relating that remain after applying the Rent received from
the reletting as provided in this (P)21.a.; and
b. Landlord may terminate Tenant's right to possession of the Premises at
any time. No act by Landlord other than giving express written notice
thereof to Tenant shall terminate this Lease. Acts of maintenance,
efforts to relet the Premises, or the appointment of a receiver on
Landlord's initiative to protect Landlord's interest under this Lease
shall not constitute a termination of Tenant's right to possession.
Upon termination of Tenant's right to possession, Landlord has the
right to recover from Tenant: (1) the Worth of the unpaid Rent that
had been earned at the time of termination of Tenants right to
possession; (2) the Worth of the amount by which the unpaid Rent that
would have been earned after the date of termination until the time of
award exceeds the amount of the loss of Rent that Tenant proves could
have been reasonably avoided; (3) the Worth of the amount of the
unpaid Rent that would have been earned after the award throughout the
remaining Term of the Lease to the extent such unpaid Rent exceeds the
amount of the loss of Rent that Tenant proves could have been
reasonably avoided; and (4) any other amount, including but not
limited to, expenses incurred to relet the Premises, court costs,
attorneys' fees and collection costs necessary to compensate Landlord
for all detriment caused by Tenant's default. The "Worth", as used
above in (1) and (2) in this (P)21.b. is to be computed by allowing
interest at the lesser of 18 percent per annum or the maximum legal
interest rate permitted by law. The "Worth", as used above in (3) in
this (P)21.b., is to be computed by discounting the amount at the
discount rate of the Federal Reserve Bank of San Francisco at the time
of the award, plus one percent (1%).
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22. ENTRY OF PREMISES. Landlord and/or its authorized representatives shall
have the right to enter the Premises at all reasonable times with
reasonable prior notice to Tenant except for emergencies for any of the
following purposes: (a) to determine whether the Premises are in good
condition and whether Tenant is complying with its obligations under this
Lease; (b) to do any necessary maintenance and to make any restoration to
the Premises that Landlord has the right or obligation to perform; (c) to
post "for sale" signs at any time during the Term, or to post "for rent" or
"for lease" signs during the last ninety (90) days of the Term or during
any period while Tenant is in default; (d) to show the Premises to
prospective brokers, agents, buyers, tenants or persons interested in
leasing or purchasing the Premises, at any time during the Term; or (e) to
repair, maintain or improve the Premises and to erect scaffolding and
protective barricades around and about the Premises but not so as to
prevent entry to the Premises and to do any other act or thing necessary
for the safety or preservation of the Premises. Landlord shall not be
liable in any manner for any inconvenience, disturbance, loss of business,
nuisance or other damage arising out of Landlord's entry onto the Premises
as provided in this (P)22. Tenant shall not be entitled to an abatement or
reduction of Rent if Landlord exercises any rights reserved in this (P)22.
Landlord shall conduct its activities on the Premises as provided herein in
a commercially reasonable manner that will lessen the inconvenience,
annoyance or disturbance to Tenant.
23. SUBORDINATION
a. AUTOMATIC SUBORDINATION. Without the necessity of any additional
document being executed by Tenant for the purpose of effecting a
subordination, and at the election of Landlord or any Lender(s)
against the Building containing the Premises, this Lease shall be
subject and subordinate at all times to (i) all ground leases or
underlying leases which may now exist or hereafter be executed
affecting the Building containing the Premises, (ii) the lien of any
mortgage or deed of trust which may hereafter be executed affecting
the Building containing the Premises, and (iii) the lien of any
mortgage or deed of trust which may hereafter be executed in any
amount for which the Premises, ground leases or underlying leases, or
Landlord's interest or estate in any of said items is specified as
security. In the event that any ground lease or underlying lease
terminates for any reason or any mortgage or deed of trust is
foreclosed or a conveyance in lieu of foreclosure is made for any
reason, Tenant shall, notwithstanding any subordination, attorn to and
become the Tenant of the successor in interest to Landlord. In
connection with any such termination of a ground lease or underlying
lease or any foreclosure or conveyance in lieu of foreclosure made in
connection with any mortgage or deed of trust, then so long as Tenant
is not in default pursuant to this Lease, Tenant shall not be
disturbed in its possession of the Premises or in the enjoyment of its
rights pursuant to this Lease during the Term of this Lease or any
extension or renewal thereof.
b. ADDITIONAL SUBORDINATION. From time to time at the request of
Landlord, Tenant covenants and agrees to execute and deliver within
ten (10) days following the date of written request from Landlord,
documents evidencing the priority or subordination of this Lease with
respect to any ground lease or underlying lease or the lien of any
mortgage or deed of trust in connection with the Building containing
the Premises. Any and all such documents shall be in such form as is
reasonably acceptable to Tenant and Landlord as well as the Lender(s)
and other applicable party. Any subordination agreement so requested
by Landlord shall provide for Tenant to attorn to the successor in
interest to Landlord and shall further provide that Tenant shall not
be disturbed in its possession of the Premises or in the enjoyment of
its rights pursuant to this Lease so long as Tenant is not in default
with respect to its obligations pursuant to the Lease. Any such
Subordination, Non-disturbance and Attornment Agreement shall be
recorded in the official records of the office of the County Recorder
in the County in which the Premises is located. Tenant hereby
irrevocably appoints Landlord as attorney-in-fact of Tenant to
execute, deliver and record any such document in the name of and on
behalf of Tenant.
c. NOTICE FROM LENDER. Tenant shall be entitled to rely upon any notice
given by Lender(s) in connection with the Premises requesting that
Tenant make all future Rent payments to such Lender(s), and Tenant
shall not be liable to Landlord for any payment made to such
Lender(s)in accordance with such notice.
24. ESTOPPEL CERTIFICATE; TENANT FINANCIAL STATEMENTS. Tenant, at any time and
from time to time, upon not less than ten (10) days written notice from
Landlord, will execute, acknowledge and deliver to Landlord and, at
Landlord's request, to any existing or prospective purchaser, ground lessor
or mortgagee of any part of the Premises, a certificate of Tenant stating:
(a) that Tenant has accepted the Premises (or, if Tenant has not done so,
Tenant has not accepted the Premises and specifying the reasons therefor);
(b) the Commencement and Expiration Dates of this Lease; (c) that this
Lease is unmodified and in full force and effect (or, if there have been
modifications, that same is in full force and effect as modified and
stating the modifications); (d) whether or not to the best of Tenant's
knowledge there are then existing any defenses against the enforcement of
any of the obligations of Tenant under this Lease (and, if so, specifying
same); (e) whether or not to the best of Tenants knowledge there are then
existing any defaults by Landlord in the performance of its obligations
under this Lease (and, if so, specifying same); (f) the dates, if any, to
which the Rent and other charges under this Lease have been paid; (g)
whether or not there are Rent increases during the Lease Term and if so the
amount of same, (h) whether or not the Lease contains any options or rights
of first offer or first refusal; (i) the amount of any Security Deposit or
other sums due Tenant; (j) the current notice address for Tenant; and (k)
any other information that may reasonably be required by any of such
persons. It is intended that any such certificate of Tenant delivered
pursuant to this (P)24. may be relied upon by Landlord and any existing or
prospective purchaser, ground lessor or mortgagee of the Building
containing the Premises. Tenant agrees, at any time upon request by
Landlord, to deliver to Landlord the current financial statements of Tenant
with an opinion from a certified public accountant, if available, including
a balance sheet and profit and loss statement for the most recent prior
three fiscal years, all prepared in accordance with generally accepted
accounting principles consistently applied.
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25. WAIVER. No delay or omission in the exercise of any right or remedy by
Landlord shall impair such right or remedy or be construed as a waiver. No
act or conduct of Landlord, including without limitation, acceptance of the
keys to the Premises, shall constitute an acceptance of the surrender of
the Premises by Tenant before the expiration of the Term. Only written
notice from Landlord to Tenant shall constitute acceptance of the surrender
of the Premises and accomplish termination of the Lease. Landlord's consent
to or approval of any act by Tenant requiring Landlord's consent or
approval shall not be deemed to waive or render unnecessary Landlord's
consent to or approval of any subsequent act by Tenant. Any waiver by
Landlord of any Default must be in writing and shall not be a waiver of any
other Default concerning the same or any other provision of the Lease.
26. SURRENDER OF PREMISES. Upon expiration of the Term, Tenant shall surrender
to Landlord the Premises and all tenant improvements and alterations in the
same condition as existed at the Commencement Date which shall include the
Approved Work as set forth in (P)29.b. hereof, except for ordinary wear and
tear and alterations which Tenant has the right or is obligated to remove
under the provisions of (P)14. herein. Tenant shall remove all personal
property including, without limitation, all wallpaper, paneling and other
decorative improvements or fixtures and shall perform all restoration made
necessary by the removal of any alterations made subsequent to the
installation of the Approved Work or Tenant's personal property before the
expiration of the Term, including, for example, restoring all wall surfaces
to their condition as of the Commencement Date. Landlord can elect to
retain or dispose of in any manner Tenant's personal property not removed
from the Premises by Tenant prior to the expiration of the Term. Tenant
waives all claims against Landlord for any damage to Tenant resulting from
Landlord's retention or disposition of Tenant's personal property. Tenant
shall be liable to Landlord for Landlord's cost for storage, removal and
disposal of Tenant's personal property.
27. HOLDOVER. If Tenant with Landlord's consent remains in possession of the
Premises after expiration of the Term or after the date in any notice given
by Landlord to Tenant terminating this Lease, such possession by Tenant
shall be deemed to be a month to month tenancy cancelable by either party
on thirty (30) days written notice given at any time by either party and
all provisions of this Lease, except those pertaining to Term, renewal
options and Base Rent, shall apply and Tenant shall thereafter pay monthly
Base Rent computed on a per-month basis, for each month or part thereof
(without reduction for any partial month) that Tenant remains in
possession, in an amount equal to one hundred fifty percent (150%) of the
Base Rent that was in effect for the last full calendar month immediately
preceding expiration of the Term.
28. NOTICES. All notices, demands, or other communications required or
contemplated under this Lease shall be in writing and shall be deemed to
have been duly given 72 hours from the time of mailing if mailed by
registered or certified mail, return receipt requested, postage prepaid, or
24 hours from the time of shipping by overnight carrier, or the actual time
of delivery if delivered by personal service to the parties at the
addresses specified in (P)1. Either Tenant or Landlord may change the
address to which notices are to be given to such party hereunder by giving
written notice of such change of address to the other in accordance with
the notice provisions hereof.
29. TENANT IMPROVEMENTS.
a. EXISTING CONDITIONS. The Premises shall be delivered in its "as is"
condition as of the Commencement Date of the Lease with the following
exceptions:
1) Landlord, at Landlord's sole cost and expense, shall inspect
prior to the Commencement Date and, if required by said
inspection, repair the HVAC system including the replacement of
compressors and exchangers if necessary. Landlord shall provide
Tenant with a copy of any written inspection report.
2) Landlord, at Landlord's sole cost and expense, shall inspect and,
if required, repair the roof prior to the Commencement Date of
the Lease.
3) The interior fire sprinkler system risers serving the Premises
shall be braced (if such bracing does not currently exist) as
required to meet current code at Landlord's sole cost and expense
within sixty (60) days of full Lease execution.
b. ADDITIONAL TENANT IMPROVEMENTS. Landlord hereby grants Tenant a
Construction Allowance of Fifteen Dollars ($15.00) per rentable square
foot ("LANDLORD'S CONSTRUCTION ALLOWANCE") for the cost of additional
generic tenant improvements to be installed by Tenant in the Premises
(the "ADDITIONAL TENANT IMPROVEMENTS"). Tenant shall submit its plans
for the Additional Tenant Improvements for Landlord's approval (the
"APPROVED WORK") prior to the commencement of construction of the
Approved Work Tenant may, at Tenant's option, submit to Landlord
conceptual plans for the Additional Tenant Improvements for Landlord's
approval, which conceptual plans shall indicate the type and general
nature of the Additional Tenant Improvements and the approximate
location of the Additional Tenant Improvements if said conceptual
plans have been prepared, initialed and attached hereto, the plans are
deemed approved by Landlord and Tenant. Landlord agrees to reasonably
approve subsequent detailed construction plans so long as said
construction plans substantially conform to the previously approved
conceptual plans. Landlord shall pay Tenant's outside vendors or
contractors for materials and services constituting the Approved Work,
up to the maximum Landlord's Construction Allowance set forth in this
(P)29.b., upon Tenant's submittal to Landlord of approved invoices and
lien releases for payment. Subject to the total amount available
within the Landlord's Construction Allowance, Tenant shall also be
reimbursed from Landlord's Construction Allowance for the reasonable
cost of plans and permits relating to the installation of the Approved
Work. All of the work to be done by Tenant under this (P)29 b shall be
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done in accordance with the provisions of (P)14. hereof and Tenant
shall be required to follow Landlord's reasonable rules and
regulations relating to contractors working in the Building. Landlord
shall have the right to reasonably approve all of Tenant's proposed
contractors and subcontractors related to the installation of the
Approved Work.
30. COMMENCEMENT DATE. The Term of the Lease shall commence on the earliest to
occur of:
1) Substantial completion of the Approved Work as determined by the
Building Architect; or
2) Tenant's commencement of occupancy of the Premises; or
3) September 1, 1998.
31. EARLY POSSESSION. Notwithstanding the provisions of (P)3. hereof and with
the written permission of the existing tenant in the Premises, Tenant shall
have the right to enter the Premises prior to the Commencement Date so that
Tenant can commence the installation of the Approved Work pursuant to
(P)29.b. above (the "Construction Period"). All of the terms and conditions
of the Lease, except for Tenant's obligations to pay Rent and Operating
Expenses, shall be in effect during the Construction Period provided,
however, Tenant shall be required to pay for utilities consumed in the
Premises during the Construction Period.
32. OPTION TO RENEW.
▇. ▇▇▇▇▇ OF OPTION. Tenant shall have the right, at its option, to
extend the Lease for one (1) additional period of five (5) years (the
"EXTENDED TERM") commencing at the expiration of the Term, provided
that at the time of exercise and at the time of commencement of the
Extended Term, Tenant is not in default beyond any applicable cure
period under this Lease.
b. EXERCISE OF OPTION. If Tenant decides to extend the Lease for the
Extended Term, Tenant shall give written notice to Landlord of its
election to extend not less than ten (10) months prior to the
expiration of the Term. Tenant's failure to give timely notice to
Landlord of Tenant's election to extend shall be deemed a waiver of
Tenant's right to extend. The terms and conditions applicable to the
Extended Term shall be the same terms and conditions contained in this
Lease except that Tenant shall not be entitled to any further option
to extend beyond the Extended Term. The Base Rent for the Extended
Term shall be as determined in accordance with (P)32.c.
c. DETERMINATION OF BASE RENT DURING THE EXTENDED TERM.
1) AGREEMENT ON INITIAL BASE RENT. Landlord shall not be obligated
to provide Tenant with the proposed fair market rental value
until six (6) months prior to the expiration of the Term.
Landlord and Tenant shall have thirty (30) days after Landlord
provides the proposed fair market rental value in which to agree
on the Base Rent during the Extended Term, which shall be the
fair market rental value of the Premises during the Extended
Term. The fair market rental value of the Premises during the
Extended Term shall be based on the uses of the Premises
permitted under this Lease, the quality, size, design and
location of the Premises, and the rental value for lease renewals
or extensions of comparable size and quality located in the Bel
Marin Keys area of Novato, California. If Landlord and Tenant
agree on the Base Rent for the Extended Term during the thirty
(30) day period, they shall immediately execute an amendment to
this Lease stating the new Base Rent. The establishment of the
Base Rent in accordance with this (P)32. shall be without regard
to the additional tenant improvement allowance for the additional
Approved Work, as set forth in (P)32.a. hereof.
2) SELECTION OF APPRAISERS. If Landlord and Tenant are unable to
agree on the Base Rent for the Extended Term within the thirty
(30) day period, then within ten (10) days after the expiration
of the thirty (30) day period and provided that Tenant has timely
exercised the subject renewal option in accordance with (P)32.b.,
Landlord and Tenant each at its own cost and by giving notice to
the other party, shall appoint a competent and disinterested real
estate appraiser with at least five (5) years full-time
commercial appraisal experience in the Bel Marin Keys area of
Novato California market area to appraise the fair market rental
value of the Premises and set the Base Rent during the Extended
Term. If either Landlord or Tenant does not appoint an appraiser
within said ten (10) days, the single appraiser appointed shall
be the sole appraiser and shall set the Base Rent during the
Extended Term. If two (2) appraisers are appointed by Landlord
and Tenant as stated herein, they shall meet promptly and attempt
to set the Base Rent for said Extender Term. If the two (2)
appraisers are unable to agree within thirty (30) days after the
second appraiser has been appointed, they shall attempt to
select a third appraiser meeting the same qualifications within
ten (10) days after the last day the two (2) appraisers are given
to set the Base Rent. If they are unable to agree on the third
appraiser, either Landlord or Tenant, by giving ten (10) days'
notice to the other party, can apply to the then President of the
Real Estate Board. or to the Presiding Judge of the Superior
Court of the County in which the Premises are located for the
selection of a third appraiser who meets the qualifications
stated herein. Landlord and Tenant each shall bear one-half (1/2)
of the cost of appointing the third appraiser and of paying the
third appraiser's fee. The third appraiser, however selected,
shall be a person who has not previously acted in any capacity
for either Landlord or Tenant, or their affiliates.
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3) VALUE DETERMINED BY THREE (3) APPRAISERS. Within thirty (30)
days after the selection of the third appraiser, a majority of
the appraisers shall set the Base Rent for the Extended Term. If
a majority of the appraisers are unable to set the Base Rent
within the stipulated period of time, Landlord's appraiser shall
arrange for simultaneous exchange of written appraisals from each
of the appraisers and the three (3) appraisals shall be added
together and their total divided by three (3); the resulting
quotient shall be the Base Rent for the Premises during the
Extended Term. If, however, the low appraisal and/or the high
appraisal are/is more than fifteen percent (15%) lower and/or
higher than the middle appraisal, such low appraisal and/or high
appraisal shall be disregarded. If only one (1) appraisal is
disregarded, the remaining two (2) appraisals shall be added
together and their total divided by two (2); the resulting
quotient shall be the Base Rent for the Premises during the
Extended Term. If both the low appraisal and the high appraisal
are disregarded as stated in this (P)32.c.3), the middle
appraisal shall be the Base Rent for the Premises during the
Extended Term.
4) MINIMUM BASE RENT LEVEL. Notwithstanding any other provision of
this Lease, in no event shall the Base Rent for the Extended Term
as determined above be less than the Base Rent prevailing
immediately prior to the expiration of the initial Term, and, in
any event, the Base Rent during the Extended Term as determined
above shall be increased in accordance with (P)1.n. ("BASE RENT
ADJUSTMENT") hereof during each of the last four (4) years of the
Extended Term.
33. MISCELLANEOUS PROVISIONS.
a. TIME OF ESSENCE. Time is of the essence of each provision of this
Lease.
b. SUCCESSOR. This Lease shall be binding on and inure to the benefit of
the parties and their successors, except as provided in (P)19.
c. LANDLORD'S CONSENT. Any consent required by Landlord under this Lease
must be granted in writing and may be withheld or conditioned by
Landlord in its sole and absolute discretion unless otherwise
provided.
d. PERSONAL RIGHTS. Notwithstanding any other provision(s) of this Lease
to the contrary, any provisions of this Lease providing for the
renewal, extension or early termination of the Lease and/or for the
expansion of the Premises (to include without limitation rights to
negotiate, rights of first refusal, etc.) shall be (i) personal to the
original Tenant and shall not be assignable or otherwise transferable
(either voluntarily or involuntarily) to any third party for any
reason whatsoever, and (ii) conditioned upon Tenant not then being in
default under this Lease.
e. COMMISSIONS. Each party represents that it has not had dealings with
any real estate broker, finder or other person with respect to this
Lease in any manner, except for the Broker(s) identified in (P)1., who
shall be compensated by Landlord in accordance with the separate
agreement between Landlord and the Broker(s).
f. OTHER CHARGES; LEGAL FEES. If Landlord becomes a party to any
litigation concerning this Lease or the Premises by reason of any act
or omission of Tenant or Tenants authorized representatives, Tenant
shall be liable to Landlord for reasonable attorneys' fees and court
costs incurred by Landlord in the litigation. Should the court render
a decision which is thereafter appealed by any party thereto, Tenant
shall be liable to Landlord for reasonable attorneys' fees and court
costs incurred by Landlord in connection with such appeal.
If either party commences any litigation against the other party or
files an appeal of a decision arising out of or in connection with the
Lease, the prevailing party shall be entitled to recover from the
other party reasonable attorneys' fees and costs of suit. If Landlord
employs a collection agency to recover delinquent charges, Tenant
agrees to pay all collection agency and attorneys' fees charged to
Landlord in addition to Rent, late charges, interest and other sums
payable under this Lease.
g. LANDLORD'S SUCCESSORS. In the event of a sale or conveyance by
Landlord of the Building containing the Premises, the same shall
operate to release Landlord from any liability under this Lease, and
in such event Landlord's successor in interest shall be solely
responsible for all obligations of Landlord under this Lease.
h. INTERPRETATION. This Lease shall be construed and interpreted in
accordance with the laws of the state in which the Premises are
located. This Lease constitutes the entire agreement between the
parties with respect to the Premises, except for such guarantees or
modifications as may be executed in writing by the parties from time
to time. When required by the context of this Lease, the singular
shall include the plural, and the masculine shall include the feminine
and/or neuter. "Party" shall mean Landlord or Tenant. If more than one
person or entity constitutes Landlord or Tenant, the obligations
imposed upon that party shall be joint and several. The
enforceability, invalidity or illegality of any provision shall not
render the other provisions unenforceable, invalid or illegal.
i. AUCTIONS. Tenant shall not conduct, nor permit to be conducted,
either voluntarily or involuntarily, any auction upon the Premises
without first having obtained Landlord's prior written consent.
Notwithstanding anything to the contrary in this Lease, Landlord shall
not be obligated to exercise any standard of reasonableness in
determining whether to grant such consent.
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j. CONFLICT. Any conflict between the printed provisions of this Lease
and the typewritten or handwritten provisions shall be controlled by
the typewritten or handwritten provisions.
k. OFFER. Preparation of this Lease by Landlord or Landlord's agent and
submission of same to Tenant shall not be deemed an offer to lease to
Tenant. This Lease is not intended to be binding until executed by all
Parties hereto.
l. AMENDMENTS. This Lease may be modified only in writing, signed by the
Parties in interest at the time of the modification. The parties shall
amend this Lease from time to time to reflect any adjustments that are
made to the Base Rent or other Rent payable under this Lease. As long
as they do not materially change Tenant's obligations hereunder,
Tenant agrees to make reasonable non-monetary modifications to this
Lease as may be reasonably required by Lender(s) in connection with
the obtaining of normal financing or refinancing of the property of
which the Premises are a part.
m. CONSTRUCTION. The Landlord and Tenant acknowledge that each has had
its counsel review this Lease, and hereby agree that the normal rule
of construction to the effect that any ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation
of this Lease or in any amendments or exhibits hereto.
n. CAPTIONS. Article, section and paragraph captions are not a part
hereof.
o. EXHIBITS. For reference purposes the Exhibits are listed below:
Exhibit A: The Premises
Exhibit B: Property
Exhibit C: Rules and Regulations
Exhibit D: Covenants, Conditions And Restrictions
LANDLORD: TENANT:
LIMAR REALTY CORP. #18 BIOMARIN PHARMACEUTICAL, INC.
a California corporation a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ By: /s/ [SIGNATURE]
_____________________________ _____________________________
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
President Name: [NAME]
____________________________
Title: [TITLE]
___________________________
Date: 8/7/98 Date: July 24, 1998
____________________________ ___________________________
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