1
Exhibit 10.17
LEASE
BETWEEN
HALL PROPERTIES, INC.
("Landlord")
and
RIBOGENE, INC.
("Tenant")
TABLE OF CONTENTS
BASIC LEASE INFORMATION ................................................. iv
1. PREMISES ........................................................... 1
1.1. Premises ..................................................... 1
1.2. Landlord's Reserved Rights ................................... 1
1.3. First Refusal Right .......................................... 1
2. TERM ............................................................... 2
2.1. Term ......................................................... 2
2.2. Early Possession ............................................. 2
2.3. Delay In Possession .......................................... 2
2.4 Construction .................................................
2.5. Acknowledgement Of Lease Commencement ........................
2.6. Holding Over .................................................
2.7. Option To Extend Term ........................................
3. RENTAL .............................................................
3.1. Minimum Rental ...............................................
3.2 Late Charge ..................................................
TAXES ..............................................................
4.1 Personal Property ............................................
5. OPERATING EXPENSES .................................................
5.1. Payment Of Operating Expenses ................................
5.2. Definition Of Operating Expenses .............................
5.3. Determination Of Operating Expenses ..........................
5.4. Final Accounting For Lease Year ..............................
5.5. Proration .................................................... 9
6. UTILITIES .......................................................... 9
6.1. Payment ...................................................... 9
6.2. Interruption ................................................. 9
7. ALTERATIONS ........................................................ 10
7.1. Right To Make Alterations .................................... 10
7.2. Title To Alterations ......................................... 10
7.3. Tenant Fixtures .............................................. 10
7.4. No Liens ..................................................... 10
8. MAINTENANCE AND REPAIRS ............................................ 11
8.1. Landlord's Work .............................................. 11
(a) Maintenance of Common Areas ............................. 11
(b) Repair and Maintenance of Building ...................... 11
8.2. Tenant's Obligation For Maintenance .......................... 11
(a) Good Order, Condition And Repair ........................ 11
(b) Remedies for Work in Premises ........................... 11
(c) Condition Upon Surrender ................................ 11
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9. USE OF PREMISES .................................................... 12
9.1. Permitted Use ............................................... 12
9.2. Requirement Of Continued Use ................................ 12
9.3. No Nuisance ................................................. 12
9.4. Compliance With Laws ........................................ 12
9.5. Liquidation Sales ........................................... 12
9.6. Environmental Matters ....................................... 12
10. INSURANCE AND INDEMNITY ............................................ 15
10.1. Liability Insurance ......................................... 15
10.2. Quality Of Policies And Certificates ........................ 15
10.3. Workers' Compensation ....................................... 15
10.4. Waiver Of Subrogation ....................................... 15
10.5. Increase In Premiums ........................................ 15
10.6. Tenant's Indemnification .................................... 16
10.7. Blanket Policy .............................................. 16
11. SUBLEASE AND ASSIGNMENT ............................................ 16
11.1. Assignment And Sublease Of Premises ......................... 16
11.2. Rights Of Landlord .......................................... 17
12. RIGHT OF ENTRY AND QUIET ENJOYMENT ................................. 17
12.1. Right Of Entry .............................................. 17
12.2. Quiet Enjoyment ............................................. 18
13. CASUALTY AND TAKING ................................................ 18
13.1. Termination Or Reconstruction ............................... 18
13.2. Tenant's Rights ............................................. 18
13.3. Lease To Remain In Effect ................................... 18
13.4. Reservation Of Compensation ................................. 18
13.5. Restoration Of Fixtures ..................................... 19
14. DEFAULT ............................................................ 19
14.1. Events Of Default ........................................... 19
(a) Abandonment ............................................ 19
(b) Nonpayment ............................................. 19
(c) Other Obligations ...................................... 19
(d) General Assignment ..................................... 19
(e) Bankruptcy ............................................. 19
(f) Receivership ........................................... 19
(g) Attachment ............................................. 19
(h) Insolvency ............................................. 20
14.2. Remedies Upon Default ....................................... 20
14.3. Remedies Cumulative ......................................... 20
15. SUBORDINATION, ATTORNMENT AND SALE ................................. 20
15.1. Subordination To Mortgage ................................... 20
15.2. Sale Of Landlord's Interest ................................. 21
15.3. Estoppel Certificates ....................................... 21
15.4. Subordination to CC&R's ..................................... 21
16. SECURITY ........................................................... 21
16.1. Deposit; Letter of Credit ................................... 21
17. MISCELLANEOUS ...................................................... 24
17.1. Notices ..................................................... 24
17.2. Successors And Assigns ...................................... 25
17.3. No Waiver ................................................... 25
17.4. Severability ................................................ 25
17.5. Litigation Between Parties .................................. 25
17.6. Surrender ................................................... 25
17.7. Construction ................................................ 25
17.8. Entire Agreement ............................................ 25
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17.9. Governing Law ............................................... 25
17.10. No Partnership .............................................. 25
17.11. Financial Information ....................................... 25
17.12. Costs ....................................................... 26
17.13. Time ........................................................ 26
17.14. Rules And Regulations ....................................... 26
17.15. Brokers ..................................................... 26
17.16. Memorandum Of Lease ......................................... 26
17.17. Corporate Authority ......................................... 26
17.18. Approvals ................................................... 26
17.19. Reasonable Expenditures ..................................... 27
EXHIBIT
A Location of Premises
B Real Property Description
C Construction
C-1 Schedule of Existing Laboratory Equipment and Systems
D Acknowledgement of Lease Commencement
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Date: February 6, 1992
Landlord: Hall Properties, Inc., an Arizona corporation
Landlord's Representative: Heron Financial Corporation
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Tenant: Ribogene, Inc., a California corporation
Premises: ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇▇▇▇ Business Center Building B),
Hayward, California
Area of the Premises: 20,325 square feet
Tenant's Shares of Operating Expenses: 14.8% (with specified caps and
adjustments)
Term: Sixty (60) months (subject to early termination right)
Term Commencement: March 31, 1997 (estimated)
Term Expiration: March 31, 1997 (estimated)
Minimum Rent: Month Amount
1-36 $10,162.50 (adjusted depending upon early
37-48 11,178.75 termination right)
49-60 13,211.25
Security Deposit: $23,162.50 (initially) plus letter of credit
($82,500.00, initially, in month 7)
Option Periods: Two three (3) year options
Option Rent: 90% of fair market rent; CPI increases after 18 months
of each option term
Expansion Options: First Refusal Right on designated adjacent space
Notice Addresses: See Section 17.1
Permitted Use: Research and development, laboratories, production of
instruments and reagents and related office and
administrative uses
Landlord's Broker: ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ of California, Inc.
Tenant's Broker: Blickman Turkus
NOTE: This Basic Lease Information is a summary provided for reference
purposes only and is qualified in its entirety by the actual terms of
the Lease; in the event of any conflict between the terms of the Lease
and the information contained herein, the terms of the Lease shall be
controlling.
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LEASE
THIS LEASE is made and entered into as of the 6 day of February, 1992,
by and between HALL PROPERTIES, INC., an Arizona corporation, hereinafter
called "Landlord," and RIBOGENE, INC., a California corporation, hereinafter
called "Tenant."
THE PARTIES AGREE AS FOLLOWS:
1. PREMISES
1.1. Premises. Landlord leases to Tenant and Tenant hires and leases
from Landlord, on the terms, covenants and conditions hereinafter set forth,
the premises (the "Premises") designated in Exhibit A attached hereto and
incorporated herein by this reference, consisting of approximately 20,325
square feet located within Building B (the "Building") in the Britannia
Business Center (the "Center") in the City of Hayward, County of Alameda, State
of California, commonly known as ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, and located on the real
property (the "Property") described in Exhibit B attached hereto and
incorporated herein by this reference, together with the nonexclusive right to
use any common parking spaces (including, however, five (5) parking spaces
identified as "Reserved for RiboGene") and other common areas existing from
time to time on the Property and/or designated from time to time in any
Declaration of Covenants, Conditions and Restrictions or similar document
affecting the Center.
1.2. Landlord's Reserved Rights. Landlord reserves the right from time
to time to (i) install, use, maintain, repair and replace pipes, ducts,
conduits, wires and appurtenant meters and equipment for service to other parts
of the Building above the ceiling surfaces, below the floor surfaces, within the
walls or leading through the Premises in locations which will not materially
interfere with Tenant's use thereof, (ii) relocate any pipes, ducts, conduits,
wires and appurtenant meters and equipment included in the Premises which are so
located elsewhere outside the Premises, (iii) make alterations or additions to
the Building, (iv) construct, alter or add to other buildings or improvements on
the Property, (v) build adjoining to the Property, and (vi) lease any part of
the Property for the construction of improvements or buildings. Landlord may
modify or enlarge the common area, alter or relocate accesses to the Premises,
or alter or relocate any common facility. Landlord shall not exercise rights
reserved to it pursuant to this Section 1.2 in such a manner as to materially
impair Tenant's ability to conduct its activities in the normal manner,
provided, however, that the foregoing shall not limit or restrict Landlord's
right to undertake reasonable construction activity and Tenant's use of the
Premises shall be subject to reasonable temporary disruption incidental to such
activity diligently prosecuted. Notwithstanding the foregoing, if Landlord
alters any common area in or about the Building, such alteration shall not
unreasonably interfere with Tenant's use of the Premises or Tenant's parking
rights.
1.3. First Refusal Right. Landlord shall not lease all or any portion
of the space designated "Option Space" in Exhibit A attached hereto (the "Option
Space"), consisting of approximately 11,345 square feet of space located
adjacent to the Premises as defined in Section 1.1 hereof (which Option Space
comprises the option space labeled on Exhibit A as "Option Space 'A'" which
consists of approximately 1,650 square feet of space and as "Option Space 'B'"
which consists of approximately 9,695 square feet of space), at any time during
the initial term of this Lease, except in compliance with this Section 1.3. If
Landlord receives a bona fide third-party offer during the initial term of this
Lease to lease all or any portion of the Option Space, Landlord shall give
written notice of such offer to Tenant, specifying the material terms on which
the offeror proposes to lease the Option Space or portion thereof (the "Offered
Space"), and shall offer to Tenant the opportunity to lease the Offered Space on
the terms specified in Landlord's notice. Tenant shall have ten (10) calendar
days after the date of giving of such notice by Landlord in which to accept such
offer by written notice to Landlord. Upon such acceptance by Tenant, the Offered
Space shall be leased to Tenant on the terms set forth in Landlord's notice and
on the additional terms and provisions set forth herein (except to the extent
inconsistent with the terms set forth in Landlord's said notice) and the parties
shall promptly execute an amendment to this Lease adding the Offered Space to
the Premises and making any appropriate amendments to provisions of this Lease
to reflect different rent and other obligations applicable to the Offered Space
under the terms of Landlord's said notice. If Tenant does not accept Landlord's
offer within the
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[ILLEGIBLE]
third party, at any time within one hundred eighty (180) days after Tenant's
failure to accept Landlord's offer, at a minimum rental and on other terms and
conditions not more favorable to the lessee than the minimum rental and other
terms offered to Tenant in Landlord's said notice. If Tenant does not accept
Landlord's offer and Landlord does not lease the Offered Space to a third party
within one hundred eighty (180) days, this First Right of Refusal shall
reattach to that space.
2. TERM
2.1. Term.
(a) The term of this Lease shall commence on March 15, 1992
(the "Commencement Date") and shall end on the last day of the month in which
the fifth (5th) anniversary of the Commencement Date occurs, unless sooner
terminated or extended (if applicable) as hereinafter provided.
(b) Notwithstanding any other provisions of this Lease,
Tenant shall have the right to terminate this Lease, without penalty (except as
otherwise provided in Section 16.1(a) hereof), as of the first anniversary of
the Commencement Date, provided that Tenant gives Landlord written notice of
Tenant's exercise of such termination right within six (6) months after the
Commencement Date.
2.2. Early Possession. If Landlord permits Tenant to occupy or use
the Premises prior to the Commencement Date set forth in Section 2.1, such
occupancy or use shall be subject to and upon all of the terms and conditions
of this Lease, including the obligation to pay rent and other charges, unless
Landlord and Tenant agree otherwise; provided, however, that such early
possession shall not advance or otherwise affect the termination date set forth
in Section 2.1.
2.3. Delay In Possession. It is acknowledged and agreed that if a
Casualty or Taking occurs prior to the Commencement Date, Tenant and Landlord
shall have the same rights with respect to termination as are applicable during
the term under Article 13. If the Commencement Date has not occurred by April
15, 1992 for any reason which is reasonably within Landlord's control, Tenant
may terminate this Lease by five (5) days written notice to Landlord, whereupon
any monies previously paid by Tenant to Landlord shall be promptly reimbursed
with interest at the legal rate of interest (as described in Section 3.2).
2.4. Construction.
(a) Landlord shall have no responsibilities or obligations
with respect to the preparation of the Premises for Tenant's occupancy on the
Commencement Date. The obligation of Landlord thereafter to perform work to
improve the Premises is set forth in Exhibit C attached hereto and incorporated
herein by this reference. Such work, to the extent it becomes applicable under
Exhibit C, shall be constructed (i) in accordance with plans and specifications
prepared by Landlord and approved by Tenant pursuant to Exhibit C and (ii) in a
first class and workmanlike manner, using new materials and equipment of good
quality. When such work pursuant to this Section 2.4 and Exhibit C is
substantially complete and there remains no incomplete or defective item of
such work that would materially affect Tenant's intended use of the Premises
("Substantial Completion"), Landlord shall notify Tenant that Substantial
Completion of such work has occurred and Landlord shall have no further
responsibility of any kind or character in connection with such work; provided,
however, that (i) within thirty (30) days after Substantial Completion of
Landlord's work, Tenant may furnish to Landlord a "punch list" identifying any
items or matters in the Premises that require correction and that are within
the scope of Tenant's "punch list" rights under Exhibit C hereto, and Landlord
shall promptly and diligently correct all such matters at its sole cost and
expense; and (ii) Landlord shall at its sole cost and expense correct any
construction defects in the improvements constructed pursuant to Exhibit C
provided that Tenant gives Landlord written notice of such construction defects
no later than one year following Substantial Completion of such improvements.
(b) Landlord agrees to use its best reasonable efforts to
complete promptly the work described in Section 2.4 and Exhibit C promptly
following the time (if any) that
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Landlord's obligation to perform such work becomes applicable; provided,
however, Landlord shall not be liable for any damages caused by any delay in
the completion of such work, nor shall any such delay affect the validity of
this Lease or the obligations of Tenant hereunder.
2.5. Acknowledgement Of Lease Commencement. Upon commencement of
the term of this Lease, Landlord and Tenant shall execute a written
acknowledgement of the Commencement Date, date of termination and related
matters, substantially in the form attached hereto as Exhibit D (with
appropriate insertions), which acknowledgement shall be deemed to be
incorporated herein by this reference.
2.6. Holding Over. If Tenant holds possession of the Premises after
the term of this Lease, with or without Landlord's written consent, then except
as otherwise specified in such consent, Tenant shall become a tenant from month
to month at one hundred fifty percent (150%) of the rental and otherwise upon
the terms herein specified for the period immediately prior to such holding
over and shall continue in such status until the tenancy is terminated by
either party upon not less than thirty (30) days prior written notice.
Acceptance of rent by Landlord following expiration or termination of this
Lease shall not constitute a renewal of this Lease.
2.7 Option To Extend Term. Tenant shall have the option to extend
the term of this Lease, at the minimum rental set forth in Section 3.1(d) and
(e) and otherwise upon all the terms and provisions set forth herein with
respect to the initial term of this Lease, for up to two (2) additional periods
of three (3) years each, commencing upon expiration of the initial term hereof.
Exercise of such option with respect to the first such extended term shall be
by written notice to Landlord at least six (6) months and not more than eight
(8) months prior to the expiration of the initial term hereof; exercise of such
option with respect to each subsequent extended term, if all previous extension
options have been duly exercised, shall be by like written notice to Landlord
at least six (6) months and not more than eight (8) months prior to the
expiration of the immediately preceding extended term hereof. If Tenant is in
default hereunder on the date of such notice or the date any extended term is
to commence, the option shall be of no force or effect, the extended term shall
not commence and this Lease shall expire at the end of the then current term
hereof (or at such earlier time as Landlord may elect pursuant to the default
provisions of this Lease). Except as expressly set forth in this Section 2.7,
Tenant shall have no right to extend the term of this Lease beyond its
prescribed term.
3. RENTAL
3.1 Minimum Rental.
(a) Tenant shall pay to Landlord as minimum rental for the
Premises, in advance, without deduction, offset, notice or demand, on or before
the Commencement Date and on or before the first day of each subsequent
calendar month of the term of this Lease, the following amounts per month:
Months Minimum Rental
------ --------------
1-36 $ 10,162.50 x 36 = $365,832
37-48 11,178.75 x 24 = 268,272
49-60 (expiration) 13,211.25 x 12 = 158,532
Notwithstanding the foregoing provisions of this paragraph (a), however, if
Tenant waives or otherwise fails to exercise its early termination right within
the time permitted under Section 2.1(b) hereof, then the monthly minimum rental
for months 7-12 following the Commencement Date shall be reduced to zero ($0).
If the obligation to pay minimum rental hereunder commences on other than the
first day of a calendar month or if the term of this Lease terminates on other
than the last day of a calendar month, the minimum rental for such first or
last month of the term of this Lease, as the case may be, shall be prorated
based on the number of days the term of this Lease is in effect during such
month. If an increase in minimum rental becomes effective on a day other than
the first day of a calendar month, the minimum rental for that month shall be
the sum of the two applicable rates, each prorated for the portion of the month
during which such rate is in effect.
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(b) The minimum rental amounts specified in this Section 3.1 are
based upon an estimated area of 20,325 square feet for the Premises. If the
actual area of the Premises, when completed, is greater or less than 20,325
square feet, then the minimum rentals specified in this Section 3.1 shall be
adjusted proportionately to the change in the area of the Premises, as
determined in good faith by Landlord's architect on a basis consistent with
that used in measuring other leased premises within the Center.
(c) The minimum rental amounts specified in this Section 3.1 are
based upon an estimated tenant improvement allowance of Five and No/100 Dollars
($5.00) per square foot for the work to be performed by Landlord on the Premises
under Section 2.4 and Exhibit C. If, as a result of changes requested by Tenant
in the plans and specifications originally approved by Landlord and Tenant
pursuant to Exhibit C hereto, Landlord's total direct costs of such work
(including, but not limited to, construction costs, permit fees and charges,
architects', engineers' and other consulting and professional fees and all other
related costs incurred in connection with the design and construction of the
work) exceed or are less than the product of Five and No/100 Dollars ($5.00)
times the area of the Premises (in square feet) for the work in the Premises
("Total Allowable Costs"), with such area in each case to be determined in good
faith by Landlord's architect on a basis consistent with that used in measuring
other leased premises within the Center, then Tenant's minimum monthly rental
hereunder, beginning on the Commencement Date and continuing throughout the term
hereof, shall be increased or reduced (but not below zero ($0)), as applicable,
by an amount equal to the minimum amount necessary to fully amortize, on a
straight-line basis over the remaining term of this Lease with interest at the
rate of ten percent (10%) per annum, the amount (if any) by which such
respective total costs ("Total Improvement Costs") exceed or are less than the
Total Allowable Costs; provided, however, that if the Total Improvement Costs
are less than the Total Allowable Costs, Tenant may elect to have Landlord apply
some or all of the remaining sums ("Improvement Reserve") to the cost of any
further alterations, additions or improvements to the Premises which Tenant
elects to construct in accordance with Article 7 of this Lease during the first
year of the term of the Lease. If the minimum monthly rental amount has been
reduced in accordance with the prior sentence prior to the time Tenant elects to
have the Improvement Reserve applied to additional improvements, (i) the
Improvement Reserve available for such purposes shall be reduced by an amount
equal to the total rental reduction that Tenant has received at the time of
Tenant's election and (ii) the minimum rental amounts specified in Section
3.1(a) for periods after the date of Tenant's election shall be readjusted in
accordance with the prior sentence based on the sum of the Total Improvement
Costs plus the additional amounts paid out of the Improvement Reserve.
(d) If Tenant properly exercises its right to extend the term of
this Lease pursuant to Section 2.7 hereof, the minimum rental during the first
extended term (subject to adjustment pursuant to Section 3.1(f) hereof) shall be
equal to the greater of (i) the minimum rental payable immediately prior to
commencement of such extended term or (ii) ninety percent (90%) of the fair
market rental value of the Premises (as theretofore improved under Section 2.4
and Exhibit C) from time to time, determined as of the commencement of such
extended term in accordance with this paragraph. Upon Landlord's receipt of a
proper notice of Tenant's exercise of its option to extend the term of this
Lease, the parties shall have sixty (60) days in which to agree on the fair
market rental for the Premises (as theretofore improved under Section 2.4 and
Exhibit C) at the commencement of the first extended term for the uses permitted
hereunder. If the parties agree on such fair market rental, they shall execute
an amendment to this Lease stating the amount of the applicable minimum monthly
rental. If the parties are unable to agree on such rental within such sixty (60)
day period, then within fifteen (15) days after the expiration of such period
each party, as its cost and by giving notice to the other party, shall appoint a
real estate appraiser with at least five (5) years experience appraising similar
commercial properties in Hayward, California or neighboring areas to appraise
and set the fair market rental for the Premises at the commencement of the first
extended term. If either party fails to appoint an appraiser within the allotted
time, the single appraiser appointed by the other party shall be the sole
appraiser. If an appraiser is appointed by each party and the two appraisers so
appointed are unable to agree upon a fair market rental within thirty (30) days
after the appointment of the second, they shall, within ten (10) days after
expiration of such 30-day period (i) prepare and exchange written statements of
their respective determinations of the rental value which would represent ninety
percent (90%) of the fair market rental value of the Premises and should be set
as the rental for the Premises for
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the extended term ("Determination Statement") and (ii) appoint a third
qualified appraiser; if they are unable to agree upon a third appraiser, either
party may, upon not less than five (5) days notice to the other party, apply to
the Presiding Judge of the Alameda County Superior Court for the appointment of
a third qualified appraiser. Each party shall bear its own legal fees in
connection with appointment of the third appraiser and shall bear one-half of
any other costs of appointment of the third appraiser and of such third
appraiser's fee. The third appraiser, however selected, shall be a person who
has not previously acted for either party in any capacity. Within thirty (30)
days after the appointment of the third appraiser, the third appraiser shall
select one of the two Determination Statements that the third appraiser believes
is closest to ninety percent (90%) of the fair market rental value of the
Premises and the rental value set forth in such Determination Statement shall be
the rental for the first extended term and shall be binding on the parties and
shall be enforceable in any further proceedings relating to this Lease. In
selecting a Determination Statement, the third appraiser shall not render an
average between the determinations of the first two appraisers or in any way
modify the Determination Statement that is selected.
(e) If Tenant properly exercises its right to a second extended
term of this Lease pursuant to Section 2.7 hereof, the minimum rental during
such second extended term shall be determined in the same manner provided in
the preceding paragraph for the first extended term, except that the
determination shall be made as of the commencement of the second extended term.
(f) If Tenant properly exercises its right to one or both extended
terms of this Lease, minimum rental hereunder shall be subject to adjustment on,
and effective as of, the date eighteen (18) months after the respective dates on
which such extended term(s) commence (each such date eighteen (18) months after
commencement of an extended term being herein called an "Adjustment Date"), in
accordance with the provisions of this paragraph. The base for computing such
adjustments shall be, for each extended term, the Consumer Price Index for All
Urban Consumers, San Francisco/Oakland/San ▇▇▇▇ Metropolitan Area, All Items
(1982-84 = 100), produced by the United States Department of Labor, Bureau of
Labor Statistics ("Index") which is published for or includes the month in which
the applicable extended term commenced (each such Index, as applicable, being
hereinafter called the "Beginning Index"). If the Index which is published for
or includes the applicable Adjustment Date ("Extension Index") has increased
over the applicable Beginning Index, the minimum rental payable thereafter shall
be set by multiplying the minimum rental then in effect by a fraction, the
numerator of which is the Extension Index and the denominator of which is the
Beginning Index; provided, however, in no event shall minimum rental at any time
be adjusted downward. If the Extension Index is not available until after the
Adjustment Date, Tenant shall continue to pay the then prevailing minimum rental
until the Extension Index is published, whereupon the adjustment provided in
this paragraph shall be made retroactive to the Adjustment Date and any
accumulated excess of the adjusted minimum rental over the amounts actually paid
by Tenant since the Adjustment Date shall be paid promptly by Tenant to Landlord
upon notice by Landlord to Tenant of the adjusted minimum rental. If the Index
is changed so that the base year differs from the base year used as of the
Commencement Date, 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 substantially revised during
the term of this Lease, any comparable governmental index or computation with
which it is replaced (or, if none is available, any privately published index
which is comparable in coverage and purpose) shall be used in order to obtain
substantially the same result as would have been obtained if the Index had not
been discontinued or revised. Upon any adjustment of the monthly minimum rental
in accordance with the provisions of this paragraph, Landlord and Tenant shall
immediately execute a written acknowledgement of the new minimum rental as
adjusted, which acknowledgement shall be deemed to be incorporated herein by
this reference.
3.2. Late Charge. If Tenant fails to pay when due rental or other
amounts due Landlord hereunder, such unpaid amounts shall bear interest for the
benefit of Landlord at a rate equal to the lesser of the legal rate of interest
under California Civil Code Section 3289, (or any legal rate of interest which
replaces the rate specified in Section 3289) per annum or the maximum rate
permitted by law, from the date due to the date of payment. In addition to such
interest Tenant shall pay to Landlord a late charge in an amount equal to five
percent (5%) of any installment of minimum rental and any
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other amounts due Landlord if not paid in full on or before the fifth (5th) day
after such rental or other amount is due; provided, however, on the first
occasion in each calendar year of which Tenant fails to pay such rental or other
amount on or before the fifth day after it is due, the late charge shall not
apply if Tenant pays the delinquent amount within five days after receiving
written notice from Landlord that the amount is past due. Tenant acknowledges
that late payment by Tenant to Landlord of rental or other amounts due hereunder
will cause Landlord to incur costs not contemplated by this case, including,
without limitation, processing and accounting charges and late charges which may
be imposed on Landlord by the terms of any loan relating to the Premises. Tenant
further acknowledges that it is extremely difficult and impractical to fix the
exact amount of such costs and that the late charge set forth in this Section
3.2 represents a fair and reasonable estimate thereof. Acceptance of any late
charge by Landlord shall not constitute a waiver of Tenant's default with
respect to overdue rental or other amounts, nor shall such acceptance prevent
Landlord from exercising any other rights and remedies available to it.
Acceptance of rent or other payments by Landlord shall not constitute a waiver
of late charges or interest accrued with respect to such rent or other payments
or any prior installments thereof, nor of any other defaults by Tenant, whether
monetary or non-monetary in nature, remaining uncured at the time of such
acceptance of rent or other payments.
4. TAXES
4.1. Personal Property. Tenant shall be responsible for and shall
pay prior to delinquency all taxes and assessments levied against or by reason
of all alterations and additions and all other items installed or paid for by
Tenant under this Lease, and the personal property, trade fixtures and all of
the property placed by Tenant in or about the Premises. Upon demand by
Landlord, Tenant shall furnish Landlord with satisfactory evidence of payment
thereof. If at an time during the term of this Lease any of said alterations,
additions or personal property, whether or not belonging to Tenant, shall be
taxed or assessed as part of the Property, then such tax or assessment shall be
paid by Tenant to Landlord immediately upon presentation by Landlord of copies
of the tax bills in which such taxes and assessments are included and shall,
for the purposes of this Lease, be deemed to be personal property taxes or
assessments under this Section 4.1.
5. OPERATING EXPENSES
5.1. Payment Of Operating Expenses.
(a) Tenant shall pay to Landlord, at the time and in the manner
hereinafter set forth, as additional rental, an amount equal to fourteen and
eight-tenths percent (14.8%) ("Tenant's Operating Cost Share") of the Operating
Expenses defined in Section 5.2; provided, however, that in no event shall the
amount payable by Tenant pursuant to Tenant's Operating Cost Share during the
first twelve (12) months of the term of this Lease exceed Fourteen Cents ($0.14)
per share foot per month (applied to the "deemed" square footage occupied by
Tenant as described in this paragraph), nor shall the amount per square foot per
month payable by Tenant pursuant to Tenant's Operating Cost Share during any
subsequent 12-month period of the initial term beginning on an anniversary of
the Commencement Date exceed one hundred five percent (105%) of the maximum
amount per square foot per month applicable to the immediately preceding
12-month period pursuant to this proviso (so that, for example, the maximum
amount payable in the second such 12-month period shall be $0.147 per square
foot per month and the maximum amount payable in the third such 12-month period
shall be $0.15435 per square foot per month); and provided further, however,
that notwithstanding any other provisions of this Lease, if Tenant waives or
otherwise fails to exercise its early termination right within the time
permitted under Section 2.1(b) hereof, then during months 7 through 12 of the
term of this Lease, Tenant shall not be required to pay any Operating Expenses.
(b) Tenant's Operating Cost Share as specified in paragraph (a)
of this Section is based upon an estimated area of 20,325 square feet for the
Premises and an aggregate area of 137,580 square feet for the buildings owned by
Landlord on the Property. If the actual area of the Premises (when completed) or
of the buildings owned by Landlord, as determined in good faith by Landlord's
architect on a basis consistent with that used in measuring other leased
premises within the Center, differs from the assumed numbers set forth above, or
if the area of the Premises increases due to Tenant's exercise of its
11
first refusal right under Section 1.3 hereof, Tenant's Operating Cost Share
shall be adjusted to reflect the actual areas so determined.
(c) If Landlord constructs additional buildings on the Property from
time to time, Tenant's Operating Cost Share shall be adjusted to be equal to
the percentage determined by dividing the gross square footage of the Premises
(including any additional space occupied by Tenant from time to time) by the
gross square footage of all buildings located on portions of the Property
owned by Landlord. In determining said percentage, a building shall be taken
into account from and after the date on which a tenant first enters into
possession of the building or a portion thereof, and the good faith
determination of the gross square footage of any such building by Landlord's
architects shall be final and binding upon the parties.
5.2. Definition of Operating Expenses.
(a) Subject to the exclusions and provisions hereinafter contained,
the term "Operating Expenses" shall mean the total costs and expenses incurred
by or allocable to Landlord ("Costs") for management, operation and maintenance
of the Building and the Property, including, without limitation, (i) insurance,
property management, building maintenance, landscaping and common area
maintenance; (ii) all utilities and services; (iii) real and personal property
taxes and assessments or substitutes therefor and new taxes on landlords in
addition to taxes now in effect; (iv) supplies, equipment, utilities and tools
used in management, operation and maintenance; and (v) capital improvements to
the Property or Building, amortized in accordance with generally accepted
accounting principles over an appropriate period, (aa) which reduce or will
cause future reduction of other items of Operating Expenses for which Tenant is
otherwise required to contribute or (bb) of which Tenant has use or which
benefit Tenant or (cc) which are allocable to or paid by Landlord, as owner of
the Property or Building, pursuant to the terms of any declarations of
covenants, conditions and restrictions ("CC&R's"), all underwriter's
requirements and all rules, regulations, statutes, ordinances, laws and building
codes ("Laws") affecting the Property. Capital improvements shall not include
any costs attributable to increasing the size of or otherwise expanding the
Building or the cost of the work for which Landlord is required to pay under
Section 2.4 or Exhibit C. The distinction between items of ordinary operating
maintenance and repair and items of a capital nature shall be made in accordance
with generally accepted accounting principles applied on a consistent basis.
(b) Notwithstanding Section 5.2(a), in no event shall Operating
Expenses be deemed to include the following:
(i) Costs occasioned by the violation of Law by Landlord or its
agents;
(ii) Costs for which Landlord has been reimbursed by others;
(iii) Increases in taxes, assessments and/or other governmental
levies after the Commencement Date occasioned by (A) a voluntary or involuntary
change of ownership or other conveyance of the real property of which the
Premises is a part (1) to any person or entity affiliated with or related to
Landlord or the partners, shareholders, officers or directors of Landlord or (2)
in connection with estate planning or (3) which is not otherwise a bona fide,
arm's length sale to an unrelated third party; and (B) construction of
improvements for other occupants of the Building or the Center; provided,
however, that increases that result from the construction of improvements in
areas which are in "shell condition" as of the date of this Lease shall only be
excluded from Operating Expenses to the extent that the increases result from
construction costs that exceed Twenty-Five Dollars ($25.00) per square foot,
which sum shall be adjusted annually on the anniversary of the date of this
Lease to reflect increases, but not decreases in the Consumer Price Index, which
adjustment shall be made in accordance with provisions comparable to those set
forth in Section 3.1(f);
(iv) Governmental fees or levies that are occasioned by the
particular uses of the Building or the Center by occupants other than Tenant;
12
(v) Costs to bring the Premises, the Building or the Center into
compliance with any CC&R's, underwriter's requirements or Laws applicable
thereto on the Commencement Date;
(vi) Costs (A) arising from a disproportionate use of any
utility or service supplied by Landlord to any other occupant of the Center or
(B) associated with utilities and services of a type not provided to Tenant;
(vii) The cost of any renovation, improvement, painting or
redecorating of the interior of the premises of other occupants of the Center
(other than capital improvements of the type described in Section 5.2(a)(v));
(viii) Fees, commissions, attorneys' fees, or other Costs incurred
in connection with negotiations or disputes with any other occupant of the
Center and costs arising from the violation by Landlord or any occupant of the
Center (other than Tenant) of the terms and conditions of any lease or other
agreement;
(ix) Depreciation or amortization (other than depreciation or
amortization on capital items of the type described in Section 5.2(a)(v)) or
expense reserves;
(x) Interest, charges and fees incurred on debt, payments on
mortgages and rent under any ground leases;
(xi) Costs incurred in connection with the operating of any
commercial parking concessions or other commercial concessions within the
Center;
(xii) Advertising or promotional costs;
(xiii) Lease payments and acquisition costs for capital machinery
and equipment such as air conditioners, elevators and the like (other than for
capital items of the type described in Section 5.2(a)(v));
(xiv) Costs of sculptures, paintings and other art objects;
(xv) Increases in insurance Costs caused by the activities of
another occupant of the Center and any commercially unreasonable insurance
costs;
(xvi) Costs incurred to investigate the presence of any hazardous
substance (as defined in Section 9.6), Costs to respond to any claim of
hazardous substance contamination or damage, Costs to remove any hazardous
substance from the Center and any judgments or other Costs incurred in
connection with any hazardous substance exposure or releases, it being
understood, however, that all such Costs attributable to Tenant's handling,
use, storage, transportation, generation, treatment and/or disposal of
hazardous substance shall be reimbursed by Tenant to Landlord in accordance
with Tenant's obligations under other provisions of this Lease;
(xvii) Wages, salaries, compensation and labor burden for
any employee, but only to the extent such employee's services do not relate to
the Building or the Center, and any fee, profit or compensation retained by
Landlord or its affiliates for management and administration of the Center in
excess of the management fee which would be charged by a professional
management service for operation of comparable centers in the vicinity; and
(xviii) Costs for which Tenant reimburses Landlord directly or
which Tenant pays directly to a third person but only to the extent such
payment to a third person reduces Landlord's Costs.
(c) Notwithstanding Section 5.2(a), if, at any time prior to expiration
of the initial term of this Lease (approximately 60 months), the property on
which the Premises are located is sold in a transaction not described in
Section 5.2(b)(iii)(A) of this Lease and such sale results in a reassessment of
the property for California property tax purposes, then for the remainder of
the initial term of this Lease, Tenant shall receive a credit against each
payment of its Operating Cost Share in an amount equal to that portion (if
any) of such payment of Tenant's Operating Cost Share that represents
13
increased California property taxes and assessments attributable solely to the
change in ownership that occurred in connection with such sale.
5.3. Determination Of Operating Expenses. On or before the
Commencement Date and during the last month of each calendar year of the term of
this Lease ("Lease Year"), or as soon thereafter as practical, Landlord shall
provide Tenant notice of Landlord's estimate of the Operating Expenses for the
ensuing Lease Year or applicable portion thereof. On or before the first day of
each month during the ensuing Lease year or applicable portion thereof,
beginning on the Commencement Date, Tenant shall ????? to Landlord Tenant's
Operating Cost Share of the portion of such estimated Operating Expenses
allocable (on a prorata basis) to such month; provided, however, that if such
notice is not given in the last month of a Lease year, Tenant shall continue to
pay on the basis of the prior year's estimate, if any, until the month after
such notice is given. If at any time or times it appears to Landlord that the
actual Operating Expenses will vary from Landlord's estimate by more than five
percent (5%), Landlord may, by notice to Tenant, revise its estimate for such
year and subsequent payments by Tenant for such year shall be based upon such
revised estimate.
5.4. Final Accounting For Lease Year. Within ninety (90) days after
the close of each Lease Year, or as soon after such 90-day period as
practicable, Landlord shall deliver to Tenant a statement of Tenant's Operating
Cost Share of the Operating Expenses for such Lease Year prepared by Landlord
from Landlord's books and records. If on the basis of such statement Tenant owes
an amount that is more or less than the estimated payments for such calendar
year previously made by Tenant, Tenant or Landlord, as the case may be, shall
pay the deficiency to the other party within thirty (30) days after delivery of
the statement. Upon five (5) days written notice to Landlord given not later
than sixty (60) days after Tenant's receipt of an annual statement of Tenant's
Operating Cost Share of the Operating Expenses for such Lease Year, Tenant shall
be entitled to conduct an audit of Landlord's records to verify actual Operating
Expenses. Tenant and all recipients of information from Landlord's records shall
hold such information in the strictest confidence and fully compensate Landlord
for any damages that result for any breach of such confidentiality. Tenant shall
provide a copy of the audit report to Landlord. If it is determined that Tenant
owes an amount that is more or less than the amount shown in Landlord's
statement, Tenant or Landlord, as the case may be, shall pay the deficiency to
the other party within thirty (30) days after such determination has been made.
If it is determined that the amount shown in Landlord's statement as Tenant's
Operating Cost Share of the Operating Expenses for the Lease Year audit exceeds
by more than five percent (5%) the correct amount of Tenant's Operating Cost
Share of the Operating Expenses for such year, Landlord shall promptly reimburse
the reasonable costs incurred by Tenant in conducting the audit. If it is
determined that the amount shown in Landlord's statement is correct or that
Tenant owes an additional amount, Tenant shall promptly reimburse the reasonable
costs incurred by Landlord in connection with the audit. In all other cases,
each party shall bear their own expenses in connection with the audit.
5.5. Proration. If the Commencement Date falls on a day other than the
first day of a Lease Year or if this Lease terminates on a day other than the
last day of a Lease Year, the amount of Tenant's Operating Cost Share payable
by Tenant applicable to such first and last partial Lease Year shall be
prorated on the basis which the number of days during such Lease Year in which
this Lease is in effect bears to 365. The termination of this Lease shall not
affect the obligations of Landlord and Tenant pursuant to Section 5.4 to be
performed after such termination.
6. UTILITIES
6.1. Payment. Commencing with the Commencement Date and thereafter
throughout the term of this Lease, Tenant shall pay, before delinquency, all
separately metered charges, if any, for water, gas, heat, electricity, power,
sewer, telephone, alarm system, janitorial and other services or utilities
supplied to or consumed in or upon the Premises. In the event that any of the
utility services supplied to the Premises are not separately metered, then the
amount thereof shall be an item of Operating Expenses and shall be paid as
provided in Article 5.
6.2. Interruption. Except as expressly provided in this Section 6.2,
there shall be no abatement of rent or other charges required to be paid
hereunder and Landlord shall
14
not be liable in damages or otherwise for interruption or failure of any service
or utility furnished to or used in the Premises ("Service Interruption") because
of accident, making of repairs, alterations or improvements, severe weather,
difficulty or inability in obtaining services or supplies, labor difficulties or
any other cause. If Landlord is the cause of a Service Interruption and Tenant
has not itself been a contributing cause of the Service Interruption and the
Service Interruption continues for five or more consecutive days and is of such
a nature as materially to impair Tenant's use of the Premises, beginning on the
sixth day Tenant's rental and Tenant's Operating Cost Share shall ▇▇▇▇▇ to the
extent Tenant's use of the Premises is impaired until the Service Interruption
ends. If a Service Interruption of the type described in the prior sentence
continues for 120 or more days, Tenant may elect to terminate this Lease by
giving Landlord written notice which notice may be given at any time before the
Service Interruption ends. Landlord shall use reasonable efforts to avoid
causing Service Interruptions that impair Tenant's use of the Premises, and if
such a Service Interruption cannot reasonably be avoided, Landlord shall use
reasonable efforts to minimize the inconvenience to Tenant's normal business
operations.
7. ALTERATIONS
7.1. Right To Make Alterations. Tenant shall make no alterations,
additions or improvements to the Premises, other than interior non-structural
alterations costing less than Five Thousand Dollars ($5,000.00) in each
instance, without the prior written consent of Landlord which consent shall not
be unreasonably withheld or delayed. All such alterations, additions and
improvements shall be completed with due diligence in a first-class workmanlike
manner and in compliance with plans and specifications approved in writing by
Landlord and all applicable laws, ordinances, rules and regulations.
7.2. Title To Alterations. All alterations, additions and
improvements installed pursuant to this Lease shall be part of the Building and
the property of Landlord, unless Landlord elects to require Tenant to remove the
same upon the termination of this Lease; provided, however, that the foregoing
shall not apply to Tenant's personal property, including but not limited to
movable furniture and trade fixtures not affixed to the Property ("Tenant's
Property"), which shall at all times remain the sole property of Tenant and as
between Tenant and Landlord, Tenant shall be entitled to all depreciation,
amortization and other tax benefits with respect to Tenant's Property.
7.3. Tenant Fixtures. Notwithstanding the foregoing, Tenant may
install, remove and reinstall Tenant's Property without Landlord's prior written
consent, except that any fixtures which are affixed to the Premises or which
affect the exterior or structural portions of the Building shall require
Landlord's written approval, and except that Tenant shall have no right to
remove laboratory equipment and systems or other improvements installed or left
on the Premises by Landlord at the Commencement Date pursuant to Exhibit C
hereto. The preceding sentence shall apply to Tenant's signs, logos and
insignia, all of which Tenant shall have the right to place and remove and
replace solely with Landlord's prior written consent as to location, size and
composition. Tenant shall immediately repair any damage caused by installation
and removal of fixtures under this Section 7.3. Without limiting the generality
of this Section 7.3, and notwithstanding anything to the contrary in Section
16.1(a) hereof, the walk-in refrigerator listed on Exhibit C-1 hereto is the
property of Landlord and Tenant shall have no right to remove such walk-in
refrigerator.
7.4. No Liens. Tenant shall at all times keep the Premises free from
all liens and claims of any contractors, subcontractors, materialmen, suppliers
or any other parties employed either directly or indirectly by Tenant in
construction work on the Premises. Tenant may contest any claim of lien, but
only if, prior to such contest, Tenant either (i) posts security in the amount
of the claim, plus estimated costs and interest, or (ii) records a bond of a
responsible corporate surety in such amount as may be required to release the
lien from the Premises. Tenant shall indemnify, defend and hold Landlord
harmless against liability, loss, damage, cost and all other expenses,
including, without limitation, reasonable attorneys' fees, arising out of claims
of any lien for work performed or materials or supplies furnished at the request
of Tenant or persons claiming under Tenant. Landlord shall have no lien on any
item of Tenant's Property and hereby waives any such lien. Within ten (10) days
following receipt of Tenant's written request, Landlord shall execute a written
acknowledgement for the benefit of any supplier, lessor
15
or lender of Tenant that Landlord waives any rights or liens it may have or
acquire with respect to Tenant's Property, if the supplier, lessor or lender
agrees in writing that (i) if it intends to exercise its rights with respect to
the Tenant's Property specified in the acknowledgement, it will remove such
Tenant's Property before the expiration of the term of the Lease or within
fifteen days after it has been notified that the Lease has been terminated
early, (ii) if it removes Tenant's Property from the Premises, it will repair
any damages caused by such removal and (iii) Landlord shall have no obligation
to it as a result of any act or omission of the Tenant with respect to such
Tenant's Property.
8. MAINTENANCE AND REPAIRS
8.1 Landlord's Work.
(a) Maintenance of Common Areas. Landlord shall maintain the
parking lots and other common areas existing from time to time on the Property
at maintenance levels generally provided for comparable buildings in the
vicinity of the Premises.
(b) Repair and Maintenance of Building. Landlord shall repair
and maintain or cause to be repaired and maintained those portions of the
Building outside of the Premises and the exterior walls and other structural
portions of the Building. The cost of all work performed by Landlord under this
Section 8.1(a) shall be an Operating Expense hereunder, except to the extent
such work (i) is required due to the negligence of Landlord or any other tenant
of the Building, (ii) is a service to a specific tenant or tenants, other than
Tenant, (iii) is a capital expense not includible as an Operating Expense under
Section 5.2 hereof, (iv) is required due to the negligence or willful
misconduct of Tenant or its agents, employees or invitees (in which event
Tenant shall bear the full cost of such work pursuant to the indemnification
provided in Section 10.6 hereof), (v) is required as a consequence of any
violation of any Laws applicable to the Building as of the Commencement Date,
(vi) is work for which Landlord has been reimbursed by others, but only to the
extent of such reimbursement or (vii) is nonstructural work done within any
interior portion of the Building outside the demising walls of the Premises and
is not of a type described in Section 5.3(a)(v).
8.2 Tenant's Obligation For Maintenance.
(a) Good Order, Condition And Repair. By accepting possession
of the Premises, Tenant acknowledges that the Premises are in good and sanitary
order, condition and repair, but such acceptance shall not be deemed a waiver
of Tenant's right to have defects in the Premises repaired at Landlord's
expense as otherwise provided in this Lease. Except as provided in Section 8.1
hereof, Tenant at its sole cost and expense shall keep and maintain in good and
sanitary order, condition and repair the Premises and every part thereof,
wherever located, including but not limited to the signs, interior, the face of
the ceiling over Tenant's floor space, HVAC equipment and related mechanical
systems serving the Premises, all doors, door checks, windows, plate glass,
door fronts, exposed plumbing and sewage and other utility facilities,
fixtures, lighting, wall surfaces, floor surfaces and ceiling surfaces and all
other interior repairs, foreseen and unforeseen, as required.
(b) Remedies for Work in Premises. If either party, after
notice from the other, fails to make or perform promptly any repairs or
maintenance within the Premises which are the obligation of such party, the
party giving notice shall have the right, but shall not be required, to enter
the Premises and make the repairs or perform the maintenance necessary to
restore the Premises to good and sanitary order, condition and repair.
Immediately on demand from the party giving notice, the cost of such repairs
shall be due and payable by the other party to the party giving notice.
(c) Condition Upon Surrender. At the expiration or sooner
termination of this Lease, Tenant shall surrender the Premises, including any
additions, alterations and improvements thereto, broom clean, in good and
sanitary order, condition and repair, ordinary wear and tear excepted, first,
however, removing all goods and effects of Tenant, and fixtures and items
required to be removed or specified to be removed at Landlord's election
pursuant to this Lease, and repairing any damage caused by such removal.
16
9. USE OF PREMISES
9.1. Permitted Use. Tenant shall use the Premises solely for
research and development, laboratories, production of instruments and reagents
and related office and administrative uses, and for no other purpose.
9.2. Requirement Of Continued Use. Tenant shall not at any time
leave the Premises unoccupied or vacant, and shall continuously during the term
of this Lease conduct and carry on in the Premises the use permitted hereunder.
9.3. No Nuisance. Tenant shall not use the Premises for or carry on
or permit upon the Premises or any part thereof any offensive, noisy or
dangerous trade, business, manufacture, occupation, odor or fumes, or any
nuisance or anything against public policy, nor interfere with the rights or
business of any other tenants or of Landlord in the Building, nor make any
other unreasonable use of the Premises. Tenant shall not do or permit anything
to be done in or about the Premises, nor bring nor keep anything therein, which
will in any way cause the Premises to be uninsurable with respect to the
insurance required by this Lease or with respect to standard fire and extended
coverage insurance with vandalism, malicious mischief and riot endorsements.
9.4. Compliance With Laws. Tenant shall not use the Premises or permit the
Premises to be used in whole or in part for any purpose or use that is in
violation of any applicable laws, ordinances, regulations or rules of any
governmental agency or public authority. Tenant shall keep the Premises equipped
with all safety appliances required by law, ordinance or insurance on the
Premises, or any order or regulation of any public authority because of Tenant's
particular use of the Premises. Tenant shall procure all licenses and permits
required for use of the Premises. Tenant shall use the Premises in strict
accordance with all applicable ordinances, rules, laws and regulations and shall
comply with all requirements of all governmental authorities now in force or
which may hereafter be in force pertaining to the use of the Premises by Tenant,
including, without limitation, regulations applicable to noise, water, soil and
air pollution, and making such nonstructural alterations and additions thereto
as may be required from time to time by such laws, ordinances, rules,
regulations and requirements of governmental authorities or insurers of the
Premises (collectively and inclusive of all "Laws" as defined in Section 5.2,
"Requirements") because of Tenant's construction of improvements in or other
particular use of the Premises. Notwithstanding the foregoing, if on the
Commencement Date the Premises are not in compliance with all then applicable
Requirements, Landlord and not Tenant shall be responsible for causing the
Premises to comply with such Requirements and Tenant shall not be required to
pay and of the cost of such compliance. Any structural alterations or additions
required from time to time by applicable Requirements because of Tenant's
construction of improvements in or other particular use of the Premises shall,
at Landlord's election, either (i) be made by Tenant, at Tenant's sole cost and
expense, in accordance with the procedures and standards set forth in Section
7.1 for alterations by Tenant, or (ii) be made by Landlord at Tenant's sole cost
and expense, in which event Tenant shall pay to Landlord as additional rent,
within ten (10) days after demand by Landlord, an amount equal to all costs
incurred by Landlord in connection with such alterations or additions.
9.5. Liquidation Sales. Tenant shall not conduct or permit to be
conducted any bankruptcy sale, liquidation sale, or going out of business sale,
in, upon or about the Premises, whether said auction or sale be voluntary,
involuntary or pursuant to any assignment for the benefit of creditors, or
pursuant to any bankruptcy or other insolvency proceeding.
9.6. Environmental Matters.
(a) For purposes of this Section, "hazardous substance"
shall mean the substances included within the definitions of the term
"hazardous substance" under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. Sections 9601 et
seq. and to regulations promulgated thereunder, as amended, and the California
▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇-▇▇▇▇▇▇ Hazardous Substance Account Act, California Health &
Safety Code Sections 25300 et seq., and regulations promulgated thereunder, as
amended; "hazardous waste" shall mean (i) any waste listed as or meeting the
identified characteristics of a "hazardous waste" under the Resource
Conservation and Recovery Act of 1976, 42 U.S.C. Sections 6901 et seq., and
regulations promulgated pursuant
17
thereto, as amended ??????????????????????????????????????????????
characteristics of "hazardous waste," "extremely hazardous waste," or
"restricted hazardous waste" under the California Hazardous Waste Control Law,
California Health & Safety Code Section 25100 et seq. and regulations
promulgated pursuant thereto, as amended (collectively, the "CHWCL"), and/or
(iii) any waste meeting the characteristics of "medical waste" under California
Health and Safety Code Section 25015-25027.8, and regulations promulgated
thereunder, as amended; and "hazardous waste facility" shall mean a hazardous
waste facility as defined under the CHWCL. "Radioactive materials" or
???liation," shall mean the materials defined in Title 26, California Code of
Regulations .7-30100, and/or any other materials possessing the characteristics
of the materials so defined.
(b) Without limiting the generality of the obligations set forth in
Section 9.4 above, Tenant covenants that it will comply with all applicable
laws, rules, regulations, orders, permits, licenses and operating plans of any
governmental authority with respect to Tenant's receipt, use, handling,
generation, transportation, storage, treatment and/or disposal of hazardous
substances or wastes and any radiation and radioactive materials. Without
limiting the generality of the foregoing.
(i) Tenant agrees that it shall not (A) operate on the Premises
any facility required to be permitted or licensed as a hazardous waste facility
or for which interim status as such is legally required, nor (B) store any
hazardous wastes on the Premises beyond the period permitted by law.
(ii) Tenant agrees to comply with all applicable laws, rules,
regulations, orders and permits relating to underground storage tanks which are
installed or used by Tenant (including any installation, monitoring,
maintenance, closure and/or removal of such tanks) as such tanks are defined in
California Health & Safety Code Section 25281(x), including, without limitation,
complying with California Health & Safety Code Sections 25280-25299.7 and the
regulations promulgated thereunder, as amended.
(c) If requested by Landlord, Tenant will promptly provide Landlord
with copies of the following:
(i) All permits, licenses, registrations and other similar
documents that authorize Tenant to conduct any activities involving the
receipt, use, handling, generation, transportation, storage, treatment and/or
disposal of hazardous substances or wastes and any radiation and radioactive
materials in connection with Tenant's authorized use of the Premises,
including, but not limited to, all industrial wastewater discharge permits and
permits for underground storage tanks which are installed or used by Tenant;
(ii) A list of all hazardous substances and/or wastes and
radiation and/or radioactive materials that Tenant receives, uses, handles,
generates, transports, stores, treats or disposes of in connection with its
operations on the Premises, which list may be in any reasonable form selected by
Tenant and may, for example, consist of copies of all Material Safety Data
Sheets ("MSDS's"), if any, required to be completed with respect to operations
of Tenant at the Premises in accordance with Title 26, California Code of
Regulations Section 8-5194(g) or 42 U.S.C. Section 11021, or any amendments
thereto, or any Hazardous Materials Inventory Sheet that details the MSDS's, so
long as the materials provided by Tenant list all such hazardous substances
and/or wastes and radiation and radioactive materials;
(iii) A copy of any Hazardous Materials Management Plan required
by law with respect to Tenant's operations at the Premises;
(iv) Copies of any Contingency Plans and Emergency Procedures
required of Tenant due to its operations in accordance with Title 26,
California Code of Regulations Section 22-67140 et seq. and any amendments
thereto; and
(v) Any information of the type described in clauses (i) through
(iv) which changes, updates, or supplements any such information previously
provided to Landlord.
(d) If requested by Landlord in connection with Landlord's sale or
refinancing of the Center or the Building or in connection with the sale of
reorganization of Landlord's business or assets. Tenants shall provide Landlord
with access to, and shall
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allow Landlord to copy at Landlord's expense, any other information or
materials which Tenant is legally required to prepare or maintain relating to
hazardous substances and/or wastes and radiator and/or radioactive materials
that Tenant receives, uses, handles, generates, transports, stores, treats or
disposes of in connection with its operations on the Premises, including, but
not limited to:
(i) Copies of all hazardous waste manifests (as defined in
Title 26, California Code of Regulations Section 22-66481), if any, that Tenant
is required to complete in connection with its operations at the Premises;
(ii) Copies of any biennial reports to be furnished to the
California Department of Health Services relating to hazardous substances or
wastes;
(iii) Copies of any other lists, inventories and any Form R or
inventory reports of hazardous substances and/or wastes on or about the
Property or Premises that Tenant is otherwise required to prepare and file with
any governmental or regulatory authority; and
(iv) All inspection reports and other materials that tenant is
legally required to maintain and/or file with any governmental or regulatory
authority in connection with the receipt, storage, possession, use, transfer or
disposal of radioactive materials or radiation.
(e) Landlord agrees that if any information provided by Tenant
under Section 9.6(c) or 9.6(d) includes information which is proprietary or
confidential to Tenant and is not otherwise publicly available and if such
information is marked by Tenant as "confidential," "proprietary" or with a
similar designation, all recipients of such information, including but not
limited to Landlord, shall hold such information in the strictest confidence
and compensate Tenant for any damages resulting from any breach of such
confidentiality.
(f) Tenant agrees to notify Landlord in writing of any unauthorized
release by Tenant into the environment of any hazardous wastes or substances or
radiation or radioactive materials within twenty-four hours of the time at
which Tenant became aware of such release.
(g) Tenant shall indemnify, defend and hold Landlord harmless from
and against any and all claims, losses (including, but not limited to, loss of
rental income and loss due to business interruption), damages, liabilities,
costs, legal fees and expenses of any sort arising out of or relating to any
unauthorized release into the environment of hazardous substances or wastes or
radiation or radioactive materials by Tenant, or Tenant's failure to comply
with any subparagraphs of this paragraph 9.6. Landlord shall indemnify, defend
and hold Tenant harmless from and against any and all claims, losses
(including, but not limited to, loss of rental income and loss due to business
interruption), damages, liabilities, costs, legal fees and expenses of any sort
arising out of or relating to any unauthorized release into the environment of
hazardous substances or wastes or radiation or radioactive materials (i) which
are present in the Building or Center on the date of this Lease or (ii) to the
extent they result from the negligence or willful misconduct or omission by
Landlord.
(h) Notwithstanding Landlord's rights of inspection and review,
under this paragraph 9.6, Landlord shall have no obligation or duty to so
inspect or review, and no third party shall be entitled to rely on Landlord to
conduct any sort of inspection or review by reason of the provisions of this
paragraph 9.6.
(i) If Tenant receives, handles, uses, stores, transports,
generates, treats and/or disposes of any hazardous substances or wastes or
radiation or radioactive materials on the Premises at any time during the term
of this Lease, then within thirty (30) days after termination or expiration of
this Lease, Tenant, at its sole cost and expense shall obtain and deliver to
Landlord an environmental study, performed by an expert reasonably satisfactory
to Landlord, evaluating the presence or absence of hazardous substances and
wastes, radiation and radioactive materials on the Premises. Such study shall
be based on a reasonable and prudent level of tests and investigations of the
Premises, which tests shall be conducted no earlier than the date of
termination or expiration of this Lease. Liability for any remedial actions
required or recommended on the basis of such study
19
shall be allocated in accordance with Sections 9.4, 9.6, 10.6 and other
applicable provisions of this Lease, except Tenant shall not be responsible for
substances or wastes not handled, used, stored, transported, generated, treated
and/or disposed of on or about the Premises by Tenant.
(j) The provisions of this Section 9.6 shall survive the termination
of this lease.
10. INSURANCE AND INDEMNITY
10.1. Liability Insurance. Tenant shall procure and maintain in full force
and effect during the term of this Lease comprehensive public liability and
property damage insurance to protect against any liability to the public, or to
any invitee of Tenant or Landlord, arising out of or related to the use of or
resulting from any accident occurring in, upon or about the Premises, with
limits of liability of not less than (i) One Million Dollars ($1,000,000.00)
for injury to or death of one person, (ii) Three Million Dollars
($3,000,000.00) for personal injury or death, per occurrence, and (iii) Five
Hundred Thousand Dollars ($500,000.00) for property damage or a combined single
limit of public liability and property damage insurance of not less than five
Million Dollars ($5,000,000.00). Such insurance shall name Landlord as an
additional insured thereunder.
10.2 Quality Of Policies And Certificates. All policies of insurance
required hereunder shall be issued by responsible insurers. Tenant shall
deliver to Landlord copies of policies or certificates of insurance showing
that said policies are in effect. The coverage provided by such policies shall
include the clause or endorsement referred to in Section 10.4. If Tenant fails
to acquire, maintain or renew any insurance required to be maintained by it
under this Article 10 or to pay the premium therefor, then Landlord, at its
option and in addition to its other remedies, but without obligation so to do,
may procure such insurance, and any sums expended by it to procure any such
insurance shall be repaid upon demand, with interest as provided in Section 3.2
hereof. Tenant shall obtain written undertakings from each insurer under
policies required to be maintained by it to notify all insureds thereunder at
least thirty (30) days prior to cancellation, amendment or revision of
coverage.
10.3 Workers' Compensation. Tenant shall maintain in full force and
effect during term of this Lease workers' compensation insurance covering all
of Tenant's employees working on the Premises.
10.4 Waiver Of Subrogation. To the extent permitted by law and without
affecting the coverage by insurance required to be maintained hereunder,
Landlord and Tenant each waive any right to recover against the other (i)
damages for injury to or death of persons, (ii) damage to property, (iii)
damage to the Premises or any part thereof, or (iv) claims arising by reason of
any of the foregoing, but only to the extent that any of the foregoing damages
and claims under subparts (i)-(iv) hereof are covered, and only to the extent
of such coverage, by insurance actually carried or required to be carried
hereunder by either Landlord or Tenant. This provision is intended to waive
fully, and for the benefit of each party, any rights and claims which might
give rise to a right of subrogation in any insurance carrier. Each party shall
use its best efforts to procure a clause or endorsement on any policy required
under this Article 10 denying to the insurer rights of subrogation against the
other party to the extent rights have been waived by the insured prior to the
occurrence of injury or loss. If such insurance policies 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 ay such additional cost, then the party obtaining such
insurance shall immediately notify the other party of that fact and such waiver
shall not be required. Coverage provided by insurance maintained by Tenant
under this Article 10 shall not be limited, reduced or diminished by virtue of
the subrogation waiver herein contained.
10.5. Increase In Premiums. Tenant shall do all acts and pay all
expenses necessary to insure that the Premises are not used for purposes
prohibited by any applicable fire insurance, and that Tenant's use of the
Premises complies with all requirements necessary to obtain any such insurance.
If Tenant uses or permits the Premises to be used in a manner which increases
the existing rate of any insurance on the Premises carried by Landlord, Tenant
shall pay the amount of the increase in premium caused thereby, and
20
Landlords's costs of obtaining other replacement insurance policies, including
any increase in premium, within ten (10) days after demand therefor by Landlord.
10.6. Tenant's Indemnification. Tenant shall indemnify, defend and
hold Landlord, its partners, shareholders, officers, directors, affiliates,
agents, employees and contractors, harmless from any and all liability for
injury to or death of any person, or loss of or damage to the property of any
person, and all actions, claims, demands, costs (including, without limitation,
reasonable attorneys' fees), damages or expenses of any kind arising therefrom
which may be brought or made against Landlord or which Landlord may pay or incur
by reason of the use, occupancy and enjoyment of the Premises by Tenant or any
invitees, sublessees, licensees, assignees, employees, agents or contractors of
Tenant or holding under Tenant from any cause whatsoever other than the gross
negligence or willful misconduct or omission by Landlord, its agents or
employees. Landlord, its partners, shareholders, officers, directors,
affiliates, agents, employees and contractors shall not be liable for, and
Tenant hereby waives all claims against such persons for, damages to goods,
wares and merchandise in or upon the Premises, or for injuries to Tenant, its
agents or third persons in or upon the Premises, from any cause whatsoever other
than (a) the gross negligence or willful misconduct or omission by Landlord, its
agent or employees, for which Landlord shall indemnify, defend and hold Tenant,
its partners, shareholders, officers, directors, affiliates, agents, employees
and contractors, harmless from any and all liability for injury to or death of
any person, or loss of or damage to the property of any person, and all actions,
claims, demands, costs (including, without limitation, reasonable attorneys'
fees), damages or expenses of any kind arising therefrom which may be brought or
made against Tenant or which Tenant may pay or incur by reason of such gross
negligence or willful misconduct or omission by Landlord, its agents or
employees (b) claims to which Landlord's indemnification obligations under
Section 9.6(g) apply.
10.7. Blanket Policy. Any policy required to be maintained hereunder
may be maintained under a so-called "blanket policy" insuring other parties and
other locations so long as the amount of insurance required to be provided
hereunder is not thereby diminished.
11. SUBLEASE AND ASSIGNMENT
11.1. Assignment And Sublease Of Premises. Tenant shall not have the
right or ?????? to assign its interest in this Lease, or make any sublease, nor
shall any interest of Tenant under this Lease be assignable involuntarily or by
operation of law, without on each occasion obtaining the prior written consent
of Landlord, which consent shall not be unreasonably withheld or delayed. Any
purported sublease or assignment of Tenant's interest in this Lease requiring
but not having receive Landlord's consent thereto shall be void. Without
limiting the generality of the foregoing, Landlord may withhold consent to any
proposed subletting or assignment solely on the ground that the proposed
subtenant or assignee is reasonably likely to be incompatible with Landlord's
use of the balance of the Building or Property. Any dissolution, consolidation,
merger or other reorganization of Tenant, or any sale or transfer of the stock
of or other interest in Tenant, or any series of one or more of such events,
involving in the aggregate a change of fifty percent (50%) or more in the
beneficial ownership of Tenant or its assets shall be deemed to be an
assignment hereunder and shall be void without the prior written consent of
Landlord as required above. Notwithstanding any other provisions of this
Section 11.1, Landlord's written consent shall not be required for (a) any
assignment or sublease by Tenant to a parent, subsidiary or affiliate of
Tenant, provided that Tenant provides Landlord with prior written notice of
such assignment or sublease, that the assignee (if applicable) shall expressly
assume in writing, for the benefit of Landlord, the obligations of Tenant under
this Lease, and that all other provisions of this Article 11 shall remain
applicable to such assignment or sublease; or (b) any consolidation, merger or
other reorganization of Tenant or sale of substantially all of the stock or
assets of Tenant, provided that the successor (if a different legal entity from
Tenant) or asset purchaser shall expressly assume in writing, for the benefit
of Landlord, the obligations of Tenant under this Lease, that such successor or
asset purchaser shall have a net worth and net current assets (each determined
in accordance with generally accepted accounting principles) not materially
less than those of Tenant both at the execution of this Lease and immediately
prior to the applicable transaction, that all other provisions of this Article
11 shall remain applicable to the parties to such transaction and that Tenant
21
shall provide Landlord with prior written notice of the transaction and with
evidence reasonably satisfactory to Landlord of the satisfaction of the
foregoing conditions.
11.2. Rights Of Landlord.
(a) Consent by Landlord to one or more assignments of this
Lease, or to one or more sublettings of the Premises, or collection of rent
by Landlord from any assignee or sublessee, shall not operate to exhaust
Landlord's rights under this Article ??? or constitute consent to any subsequent
assignment or subletting. No assignment of Tenant's interest in this Lease and
no sublease shall relieve Tenant of its obligations hereunder, notwithstanding
any waiver or extension of time granted by Landlord to any assignee or
sublessee, or the failure of Landlord to assert its rights against any assignee
or sublessee, and regardless of whether Landlord's consent thereto is given or
required to be given hereunder. In the event of a default by any assignee,
sublessee or other successor of Tenant in the performance of any of the terms or
obligations of Tenant under this Lease, Landlord may proceed directly against
Tenant without the necessity of exhausting remedies against any such assignee,
sublessee or other successor. In addition, Tenant immediately and irrevocably
assigns to Landlord, as security for Tenant's obligations under this Lease, all
rent from any subletting of all or a part of the Premises as permitted under
this Lease, and Landlord, as Tenant's assignee and as attorney-in-fact for
Tenant, or any receiver for Tenant appointed on Landlord's application, may
collect such rent and apply it toward Tenant's obligations under this Lease;
except that, until the occurrence of an act of default by Tenant, Tenant shall
have the right to collect such rent.
(b) Upon any assignment of Tenant's interest in this Lease, Tenant
shall pay to Landlord, within ten (10) days after receipt thereof by Tenant from
time to time, one-half (1/2) of all cash sums and other economic considerations
received by Tenant in connection with or as a result of such assignment, after
first deducting therefrom (i) the unamortized cost of any leasehold improvements
previously made in the Premises and paid for by Tenant (for which purpose
improvements paid for by Landlord pursuant to any tenant improvement allowance
under Exhibit C hereto shall not be construed to have been paid for by Tenant),
(ii) any costs incurred by Tenant for leasehold improvements (including, but not
limited to, third-party architectural and space planning costs) in the Premises
in connection with such assignment, and (iii) any real estate commissions and/or
attorneys' fees incurred by Tenant in connection with such assignment.
(c) Upon any sublease of all or any portion of Premises, Tenant
shall pay to Landlord, within ten (10) days after receipt thereof by Tenant
from time to time, one-half (1/2) of all cash sums and other economic
considerations received by Tenant in connection with or as a result of such
sublease, after first deducting therefrom (i) the rental due hereunder for the
corresponding period, prorated to reflect only rental allocable to the
subleased portion of the Premises, (ii) any costs incurred by Tenant for
leasehold improvements in the subleased portion of the Premises (including, but
not limited to, third-party architectural and space planning costs) for the
specific benefit of the sublessee in connection with such sublease, amortized
over the term of the sublease, (iii) any real estate commissions and/or
attorneys' fees incurred by Tenant in connection with such sublease, amortized
over the term of such sublease, and (iv) the unamortized cost of any leasehold
improvements previously made and paid for by Tenant with respect to the
subleased portion of the Premises (subject to the same limitation set forth in
clause (b)(i) above.)
12. RIGHT OF ENTRY AND QUIET ENJOYMENT
12.1. Right Of Entry. Landlord and its authorized representatives
shall have the right to enter the Premises at any time during the term of this
Lease during normal business hours and upon not less than twenty-four (24)
hours prior notice and shall at all times be accompanied by one of Tenant's
employees, except in the case of emergency, for the purpose of inspecting and
determining the condition of the Premises or for any other proper purpose
including, without limitation, to make repairs, replacements or improvements
which Landlord may deem necessary, to show the Premises to prospective
purchasers, to show the Premises to prospective tenants, and to post notices
of nonresponsibility. Landlord shall not be liable for inconvenience,
annoyance, disturbance, loss of business, quiet enjoyment or other damage or
loss to Tenant by reason of making any repairs or performing any work upon the
Premises and the obligations of Tenant
22
under this Lease shall not thereby be affected in any manner whatsoever,
provided, however, Landlord shall use reasonable efforts to minimize the
inconvenience to Tenant's normal business operations caused thereby. Landlord
shall fully comply with Tenant's reasonable rules and regulations while
entering or inspecting the Premises provided that Tenant has informed Landlord
of such rules and regulations.
12.2. Quiet Enjoyment. Landlord covenants that Tenant, upon paying
the rent and performing its obligations hereunder and subject to all the terms
and conditions of this Lease, shall peacefully and quietly have, hold and enjoy
the Premises throughout the term of this Lease, or until this Lease is
terminated as provided by this Lease.
13. CASUALTY AND TAKING
13.1. Termination Or Reconstruction. If during the term of this
Lease the Premises or Building, or any substantial part of either, (i) are
damaged materially by fire or other casualty or by action of public or other
authority in consequence thereof and cannot reasonably be expected to be
substantially repairable within 120 days following the date on which the damage
was sustained, (ii) are taken by eminent domain or by reason of any public
improvement or condemnation proceeding, or in any manner by exercise of the
right of eminent domain (including any transfer in avoidance of an exercise of
the power of eminent domain), or (iii) receive irreparable damage by reason of
anything lawfully done under color of public or other authority (the foregoing
events are herein collectively referred to as a "Casualty or Taking"), this
Lease shall terminate as to the entire Premises at Landlord's election by
written notice given to Tenant within sixty (60) days after the Casualty or
Taking has occurred. If Landlord does not elect to terminate this Lease as
hereinabove provided and Tenant does not elect to terminate the Lease as
provided in Section 13.2, Landlord shall repair and restore the Premises and
the Building as nearly as reasonably possible to the condition existing before
the Casualty or Taking.
13.2. Tenant's Rights. If any portion of the Premises is affected by
a Casualty or Taking and, if the event is a Casualty, provided that the
Casualty was not caused by Tenant, Tenant may elect to terminate this Lease if
the affected portion of the Premises is of such extent and nature as
substantially to handicap, impede or permanently impair Tenant's use of the
balance of the Premises. Tenant must exercise its right to terminate by giving
notice to Landlord within thirty (30) days after the Casualty has occurred or
the nature and extent of the Taking have been finally determined. If Tenant
elects to terminate this Lease, Tenant shall also notify Landlord of the date
of termination, which ??? (i) in the case of a Taking, 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 any date before the date
of termination designated by Tenant and (ii), in the case of a Casualty shall
be the date specified in Tenant's notice but in no event more than thirty (30)
days after the Casualty occurs.
13.3. Lease To Remain In Effect. If Landlord or Tenant does not
terminate this Lease as hereinabove provided, this Lease shall continue in full
force and effect, except that rental and Tenant's Operating Cost Share shall
▇▇▇▇▇ to the extent Tenant's use of the Premises is impaired for any period
that any portion of the Premises is unusable or inaccessible because of a
Casualty or Taking hereinabove described. Each party waives the provisions of
Code of Civil Procedure Section 1265.130, allowing either party to petition the
Superior Court to terminate this Lease in the event of a partial condemnation
of the Premises.
13.4. Reservation Of Compensation. Landlord reserves, and Tenant
waives and assigns to Landlord, all rights to any award or compensation for
damage to the Premises, Building, Property and the leasehold estate created
hereby, accruing by reason of any taking in any public improvement,
condemnation or eminent domain proceeding or in any other manner by exercise of
the right of eminent domain or of anything lawfully done by public authority,
except that Tenant shall be entitled to any and all compensation or damages
paid for or on account of Tenant's loss of goodwill as a consequences of the
condemnation, moving expenses, Tenant's Property and any leasehold improvements
in the Premises, the cost of which was borne by Tenant, but only to the extent
of the then remaining unamortized value of such improvements computed on a
straight-line basis over the term of this Lease and any then remaining option
term under Section 2.7
23
unless the time for exercising an option has passed without exercise by Tenant.
Tenant covenants to deliver such further assignments of the foregoing as
Landlord may from time to time request.
13.5. Restoration Of Fixtures. If Landlord repairs or causes repair
of the Premises after such damage or taking, Tenant as its sole expense shall
repair and replace promptly all fixtures, equipment and other property of
Tenant located at, in or upon the Premises with all additions, alterations and
improvements and all other items installed or paid for by Tenant under this
Lease that were damaged or taken, so as to restore the same to a condition
substantially equal to that which existed immediately prior to the damage or
taking. Tenant shall have the right to make modifications to the Premises,
fixtures and improvements, subject to the terms of this Lease. In its review of
Tenant's plans and specifications, Landlord may take into consideration the
effect of the proposed modifications on the exterior appearance, the structural
integrity and the mechanical and other operating systems of the Building.
14. DEFAULT
14.1. Events Of Default. The occurrence of any of the following shall
constitute an event of default on the part of Tenant:
(a) Abandonment. Abandonment of the Premises. Tenant waives any right
Tenant may have to notice under Section 1951.3 of the California Civil Code,
the terms of this subsection (a) being deemed such notice to Tenant as required
by said Section 1951.3;
(b) Nonpayment. Failure to pay, when due, any amount payable to
Landlord hereunder, such failure continuing for a period of five (5) days after
written notice of such failure;
(c) Other Obligations. Failure to perform any obligation, agreement
or covenant under this Lease other than those matters specified in subsection
(b) hereof, such failure continuing for fifteen (15) days after written notice
of such failure. No default shall be deemed to have occurred if it is not
possible to cure such failure to perform within fifteen (15) days, but Tenant
has commenced cure within said fifteen (15) day period and proceeds diligently
to complete cure;
(d) General Assignment. A general assignment by Tenant for the
benefit of creditors;
(e) Bankruptcy. The filing of any voluntary petition in bankruptcy by
Tenant, or the filing of an involuntary petition by Tenant's creditors, which
involuntary petition remains undischarged for a period of thirty (30) days. In
the event that under applicable law the trustee in bankruptcy or Tenant has the
right to affirm this Lease and continue to perform the obligations of Tenant
hereunder, such trustee or Tenant shall, in such time period as may be
permitted by the bankruptcy court having jurisdiction, cure all defaults of
Tenant hereunder outstanding as of the date of the affirmance of this Lease and
provide to Landlord such adequate assurances as may be necessary to ensure
Landlord of the continued performance of Tenant's obligations under this Lease.
Specifically, but without limiting the generality of the foregoing, such
adequate assurances must include assurances that the Premises continue to be
operated only for the use permitted hereunder. The provisions hereof are to
assure that the basic understandings between Landlord and Tenant with respect
to Tenant's use of the Premises and the benefits to Landlord therefrom are
preserved, consistent with the purpose and intent of applicable bankruptcy
laws;
(f) Receivership. The employment of a receiver appointed by court
order to take possession of substantially all of Tenant's assets or the
Premises, if such receivership remains undissolved for a period of thirty (30)
days;
(g) Attachment. The attachment, execution or other judicial seizure
of all or substantially all of Tenant's assets or the Premises, if such
attachment or other seizure remains undismissed or undischarged for a period of
thirty (30) days after the levy thereof; or
24
(h) Insolvency. The admission by Tenant in writing of its
inability to pay its debts as they become due, the filing by Tenant of a
petition seeking any reorganization or arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future statute,
law or regulation, the filing by Tenant of an answer admitting or failing
timely to contest a material allegation of a petition filed against Tenant in
any such proceeding or, if within thirty (30) days after the commencement of
any proceeding against Tenant seeking any reorganization or arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
present or future statute, law or regulation, such proceeding shall not have
been dismissed.
14.2. Remedies Upon Default.
(a) Upon the occurrence of any event of default described
in Section 14.1 hereof, Landlord, in addition to and without prejudice to any
other rights or remedies it may have, shall have the immediate right to
re-enter the Premises or any part thereof and repossess the same, expelling and
removing therefrom all persons and property (which property may be stored in a
public warehouse or elsewhere at the cost and risk of and for the account of
Tenant). In addition to or in lieu of such re-entry, and without prejudice to
any other rights or remedies it may have, Landlord shall have the right either
(i) to terminate this Lease and recover from Tenant all damages incurred by
Landlord as a result of Tenant's default, as hereinafter provided, or (ii) to
continue this Lease in effect and recover rent and other charges and amounts as
they become due.
(b) Even if Tenant has breached this Lease or abandoned the
Premises, this Lease shall continue in effect for so long as Landlord does not
terminate Tenant's right to possession under subsection (a) hereof and Landlord
may enforce all of its rights and remedies under this Lease, including the
right to recover rent as it becomes due, and Landlord, without terminating this
Lease, may exercise all of the rights and remedies of a lessor under California
Civil Code Section 1951.4 (lessor may continue lease in effect after lessee's
breach and abandonment and recover rent as it becomes due, if lessee has right
to sublet or assign, subject only to reasonable limitations), or any successor
Code section. Acts of maintenance, preservation or efforts to relet the
Premises or the appointment of a receiver upon application of Landlord to
protect Landlord's interests under this Lease shall not constitute a
termination of Tenant's right to possession.
(c) If Landlord terminates this Lease pursuant to this
Section 14.2, Landlord shall have all of the rights and remedies of a landlord
provided by Section 1951.2 of the Civil Code of the State of California, or any
successor Code section.
14.3. Remedies Cumulative. All rights, privileges and elections or
remedies of Landlord contained in this Article 14 are cumulative and not
alternative to the extent permitted by law and except as otherwise provided
herein.
15. SUBORDINATION, ATTORNMENT AND SALE
15.1. Subordination To Mortgage. This Lease, and any sublease entered
into by Tenant under the provisions of this Lease, shall be subject and
subordinate to any ground lease, mortgage, deed of trust, sale/leaseback
transaction or any other hypothecation for security now or hereafter placed
upon the Building, the Property, or both, and the rights of any assignee of
Landlord or mortgagee, trustee, beneficiary, landlord or leaseback lessor under
any of the foregoing ("Lien Holder"), and to any and all advances made on the
security thereof and to all renewals, modifications, consolidations,
replacements and extensions thereof; provided, however, that if any Lien Holder
whose interest in the Building is not presently of record requires that this
Lease be so subordinate to such interest, this Lease shall be so subordinate
only if the Lien Holder executes a recognition and non-disturbance agreement
which (i) provides that this Lease shall not be terminated by the Lien Holder
or its successors in interest so long as Tenant is not in default under this
Lease and (ii) recognizes all of Tenant's rights hereunder. if any mortgagee,
trustee, beneficiary, ground lessor, sale/leaseback lessor or assignee elects
to have this Lease be an encumbrance upon the Property prior to the lien of its
mortgage, deed of trust, ground lease or leaseback lease or other security
arrangement and gives notice thereof to Tenant, this Lease shall be deemed
prior thereto, whether this Lease is dated prior or subsequent to the date
thereof or the date of recording thereof. Tenant, and any sublessee, shall
execute such documents as may reasonably be requested by any
25
mortgagee, trustee, beneficiary, ground lessor, sale/leaseback lessor or
assignee to evidence the subordination herein set forth or to make Lease prior
to the lien of any mortgage, deed of trust, ground lease, leaseback lease or
other security arrangement, as the case may be, and if Tenant fails to do so
within ten (10) days after demand from Landlord, Tenant constitutes and
appoints Landlord as Tenant's attorney-in-fact and in Tenant's name, place and
stead to do so. Upon any default by Landlord in the performance of its
obligations under any mortgage, deed of trust, ground lease, leaseback ????? or
assignment, Tenant (and any sublessee) shall attorn to the mortgagee, trustee,
beneficiary, ground lessor, leaseback lessor or assignee thereunder upon demand
and shall execute and deliver any instrument or instruments confirming the
attornment herein provided for; provided, however, Tenant shall have no such
obligation to execute such instruments unless the Lien Holder or
succesor-in-interest in question assumes, in writing, the obligations to be
performed by Landlord accruing on or after the effective date of the transfer.
15.2. Sale Of Landlord's Interest. Upon sale, transfer or assignment
of Landlord's entire interest in the Building and Property, Landlord shall be
relieved of its obligations hereunder with respect to liabilities accruing from
and after the date of such sale, transfer or assignment; provided, however, in
the event of a voluntary sale by Landlord, such termination of liability shall
be effective only if the purchaser expressly assumes in writing the obligations
of Landlord under this Lease accruing on or after the effective date of the
sale.
15.3. Estoppel Certificates. Tenant shall at any time and from time
to time, within ten (10) days after written request by Landlord, execute,
acknowledge and deliver to Landlord a certificate in writing stating: (i) that
this Lease is unmodified and in full force and effect, or if there have been
any modifications, that this Lease is in full force and effect as modified and
stating the date and the nature of each modification; (ii) the date to which
rental and all other sums payable hereunder have been paid; (iii) that Landlord
is not in default in the performance of any of its obligations under this
Lease, that Tenant has given no notice of default to Landlord and that no event
has occurred which, but for the expiration of the applicable time period, would
constitute an event of default hereunder, or if Tenant alleges that any such
default, notice or event has occurred, specifying the same in reasonable
detail; and (iv) such other matters as may reasonably be requested by Landlord
or any institutional lender, mortgagee, trustee, beneficiary, ?????? lessor,
sale/leaseback lessor or prospective purchaser of the Property. Any such
certificate provided under this Section 15.3 may be relied upon by any lender,
mortgagee, trustee, beneficiary, assignee or successor in interest to Landlord,
by any prospective purchaser, by any purchaser on foreclosure or sale, or upon
any grant of a deed in lieu of foreclosure of any mortgage or deed of trust on
the Property or Premises, or by any other third party. Failure to execute and
return within the required time any estoppel certificate requested hereunder
shall be deemed to be an admission of the truth of the matters set forth in the
form of certificate submitted to Tenant for execution. This Section 15.3 shall
impose a reciprocal obligation on Landlord to execute, acknowledge and deliver
estoppel certificates as described above for the benefit of Tenant.
15.4. Subordination to CC&R's. This Lease, and any permitted
sublease entered into by Tenant under the provisions of this Lease, shall be
subject and subordinate to any declarations of covenants, conditions and
restrictions recorded by Landlord with respect to the Property from time to
time, provided that the terms of such declarations are reasonable and do not
discriminate against Tenant relative to other tenants occupying portions of the
Property. Tenant agrees to execute, upon request by Landlord, any documents
reasonably required from time to time to evidence such subordination.
16. SECURITY
16.1. Deposit; Letter of Credit.
(a) Concurrently with Tenant's execution of this Lease,
Tenant shall deposit with Landlord the sum of Twenty Three Thousand One
Hundred Sixty-Two and 50/100 Dollars ($23,162.50) which sum (the "Security
Deposit") shall be held by Landlord as security for the faithful performance of
all of the terms, covenants, and conditions of this Lease to be kept and
performed by Tenant during the term hereof. If Tenant waives or otherwise fails
to exercise its early termination right within the time permitted under Section
2.1(B) hereof and if Tenant is not then in default hereunder, the sum of
26
Thirteen Thousand and No/100 Dollars ($13,000.00) from the Security Deposit
shall be credited against minimum monthly rent due under Section 3.1 on months
13 and 14 (partial credit only) following the Commencement Date, and Landlord
shall continue to hold the remaining $10,162.50 as a Security Deposit. The
Security Deposit shall be increased by Tenant at the time of each increase in
minimum rental due under this Lease, so that the Security Deposit will always
equal or exceed the monthly minimum rental as in effect from time to time. If
Tenant defaults with respect to any provision of this Lease, including, without
limitation, the provisions relating to the payment of rental and other sums due
hereunder, Landlord shall have the right, but shall not be required, to use,
apply or retain all or any part of the Security Deposit for the payment of
rental or any other amount which Landlord may spend or become obligated to spend
by reason of Tenant's default or to compensate Landlord for any other loss or
damage which Landlord may suffer by reason of Tenant's default. If any portion
of the Security Deposit is so used and applied, Tenant shall, within ten (10)
days after written demand therefor, deposit cash with Landlord in an amount
sufficient to restore the Security Deposit to its original amount and Tenant's
failure to do so shall be a material breach of this Lease. Landlord shall not be
required to keep any deposit under this Section separate from Landlord's general
funds, and Tenant shall not be entitled to interest thereon. If Tenant fully and
faithfully performs every provision of this Lease to be performed by it, the
Security Deposit, or any balance thereof, shall be returned to Tenant or, at
Landlord's option, to the last assignee of Tenant's interest hereunder, at the
expiration of the term of this Lease and after Tenant as vacated the Premises;
provided, however, that if Tenant exercises its early termination right under
Section 2.1(b) hereof, Landlord shall retain (and have no obligation to return
to Tenant) Thirteen Thousand and No/100 Dollars ($13,000.00) of the Security
Deposit as reimbursement for the cost of the walk-in refrigerator listed in
Exhibit C-1 hereto. In the event of termination of Landlord's interest in this
Lease, Landlord shall transfer all deposits then held by Landlord under this
Section to Landlord's successor in interest, whereupon Tenant agrees to release
Landlord from all liability for the return of such deposit or the accounting
thereof.
(b) On or before the first day of the seventh (7th) month after
the Commencement Date, unless Tenant has theretofore exercised Tenant's early
termination right under Section 2.1(b) hereof, Tenant shall deliver to Landlord
(and shall thereafter maintain in favor of Landlord during the remainder of the
first forty-two (42) months of term of this Lease) an irrevocable standby letter
of credit (i) issued in favor of Landlord by a federally chartered commercial
bank or trust company that has met or exceeded applicable regulatory capital
requirements and that is approved in writing by Landlord (which approval shall
not be unreasonably withheld) and (ii) satisfying the conditions described in
subparagraph (c) below (the "Letter of Credit"), to be held by Landlord as
additional security for the performance of Tenant's obligations under this
Lease. The amount of such Letter of Credit shall be Eighty-Two Thousand Five
Hundred and No/100 Dollars ($82,500.00) from the issuance date until the date
thirty (30) months after the Commencement Date, then (provided that Tenant is
not then in default under this Lease) may be reduced to Fifty-Five Thousand and
No/100 Dollars ($55,000.00) during months 31-36 after the Commencement Date,
may be reduced to Forty-One Thousand Two Hundred Fifty and No/100 Dollars
($41,250.00) during months 37-42 after the Commencement Date, and may be
revoked and withdrawn entirely after the date forty-two (42) months after the
Commencement Date. Notwithstanding the foregoing provisions of this paragraph
(b), however, if the cost of Landlord's improvements under Section 2.4 and
Exhibit C (excluding any matters not chargeable against the tenant improvement
allowance under Exhibit C) exceeds or is less than One Hundred One Thousand Six
Hundred Twenty-Five and No/100 Dollars ($101,625.00) for any reason, including
(but not limited to) (i) changes requested by Tenant that increase the cost of
such work or (ii) an increase in the size of Premises because of Tenant's
exercise of its rights under Section 1.3 of this Lease, then each of the
foregoing required amounts for the Letter of Credit shall be multiplied by a
fraction, the numerator of which is the aggregate cost of such improvements
made by Landlord and the denominator of which is $101,625.00.
(c) The Letter of Credit shall be unconditional, except for the
following conditions:
27
(i) It may be drawn upon at sight by a draft
referring to such Letter of Credit presented at the offices of the issuer,
accompanied by the original Letter of Credit and by the statement required under
clause (iii) below;
(ii) It shall be subject to the Uniform Customs and
Practices for Documentary Credits (1983 Revision), International Chamber of
Commerce Publication [ILLEGIBLE] 400, and any subsequent amendments thereof;
(iii) It may recite that it is issued in connection
with this Lease and shall provide that any draft against such Letter of Credit
must be accompanied by a written statement, signed by an authorized agent of
Landlord, reading as follows: "The undersigned certifies that pursuant to the
terms of that certain Lease dated as of February 6, 1992, between Hall
Properties, Inc. as Landlord and Ribogene, Inc. as Tenant, as the same may be
amended from time to time, the undersigned Landlord is entitled to draw against
and receive the proceeds of [or a specified portion of the proceeds of] the
Letter of Credit submitted herewith";
(iv) It shall provide that it may be drawn against in
whole or in part, and that in the event of a draft for less than the full amount
of the Letter of Credit, a new Letter of Credit shall be issued in the amount of
the remaining balance of the funds available under the surrendered Letter of
Credit and otherwise in compliance with all of the terms and conditions of this
paragraph; and
(v) Subject to the effect of subparagraph (e)(i)
below, it shall provide for an expiration date which shall not be earlier than
forty-three (43) months after the estimated Commencement Date.
(d) Landlord shall be entitled to draw against the Letter
of Credit and receive proceeds thereof if Tenant defaults with respect to any
provisions of this Lease including, but not limited to, the provisions relating
to the payment of rent. Landlord may (but shall not be required to) draw on the
Letter of Credit for the payment of any rent or any other sum in default, or
for the payment of any amount which Landlord may spend or become obligated to
spend by reason of Tenant's default, or to compensate Landlord for any other
loss or damage which Landlord may suffer by reason of Tenant's default.
(e) Landlord shall also be entitled to draw against the
Letter of Credit and receive the proceeds thereof under any of the following
circumstances:
(i) If the Letter of Credit in effect from time to
time (the "current Letter of Credit") will expire sooner than forty-three (43)
months after the Commencement Date and Tenant fails to provide to Landlord a
replacement Letter of Credit satisfying all of the terms and conditions hereof
at least twenty (20) days prior to the expiration date of the current Letter of
Credit;
(ii) If Landlord notifies Tenant that Landlord
intends to transfer its interest in the premises covered by this Lease and
Tenant fails to provide to Landlord, within fifteen (15) business days after
such notice, either (A) written confirmation by the issuer of the Letter of
Credit that Landlord's proposed transferee may be substituted in place of
Landlord as a party entitled to draw against and receive the proceeds of the
Letter of Credit or (B) a written commitment by the issuer to issue, upon
Landlord's surrender of the current Letter of Credit, a replacement Letter of
Credit in favor of Landlord's proposed transferee and otherwise identical in
form and substance to the current Letter of Credit; or
(iii) If Landlord has drawn against the Letter of
Credit in part and Tenant has failed (despite the requirements of this Section
16.1) to furnish to Landlord, within five (5) days after written demand by
Landlord (as contemplated in paragraph (f) below), a further Letter of Credit
and/or cash in an amount equal to the amount drawn by Landlord and otherwise
satisfying all of the terms and conditions hereof, so that Landlord will
continue to hold cash and/or Letters of Credit in an aggregate amount at least
equal to the amount of the Letter of Credit required to be maintained hereunder.
(f) If Landlord draws against the Letter of Credit in any
of the circumstances described in paragraph (e) above, Landlord shall use,
apply and/or retain
28
all or any part of the amount drawn for the payment of any amount in default
at, or subsequent to, the time of the draw. Any amount drawn that is not
immediately used or applied by Landlord shall be retained by Landlord as an
additional cash Security Deposit on the same terms set forth in paragraph (a)
hereof. Tenant agrees that upon any use or application by Landlord of all or
any portion of such Security Deposit to cure, or compensate Landlord for, any
default by Tenant (as contemplated in this paragraph (f) or in paragraph (d)
above), Tenant shall promptly (and in all events within five (5) days after
written demand from Landlord) furnish to Landlord an additional security
deposit, in the form of cash or a Letter of Credit satisfying the conditions
set forth in paragraph (c) above or a combination of the two, in an amount such
that Landlord continues to hold an aggregate Security Deposit of at least the
aggregate minimum amounts then required to be maintained under paragraphs (a)
and (b) hereof.
(g) Landlord agrees to reimburse Tenant, within fifteen (15) days
after written demand by Tenant accompanied by appropriate supporting
documentation for the amounts claimed, for all origination fees, maintenance
charges and similar fees or costs paid by Tenant to the issuing bank from time
to time as costs of establishing and maintaining the Letter of Credit in
accordance with this Section 16.1.
17. MISCELLANEOUS
17.1 Notices. All notices, consents, waivers and other communications
which this Lease requires or permits either party to give to the other shall be
in writing and shall be deemed given when delivered personally (including
delivery by private courier or express delivery service) or four (4) days after
deposit in the United States mail, registered or certified mail, postage
prepaid, return receipt requested, addressed to the parties at their respective
addresses as follows:
To Tenant: (until Commencement Date)
Ribogene, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇
(after Commencement Date)
Ribogene, Inc.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇
with copy to: Wilson, Sonsini, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
To Landlord: Hall Properties, Inc.
c/o Heron Financial Corporation
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ 9014
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
with copy to: ▇▇▇▇▇▇ & ▇▇▇▇▇
Embarcadero Center West
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
or to such other address as may be contained in a notice at least fifteen (15)
days prior to the address change from either party to the other given pursuant
to this Section. Rental payments and other sums required by this Lease to be
paid by Tenant shall be delivered to Landlord at Landlord's address provided in
this Section, or to such other
29
address as Landlord may from time to time specify in writing to Tenant, and
shall be deemed to be paid only upon actual receipt.
17.2 Successors And Assigns. The obligations of this Lease shall run
with the land, and this Lease shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns, except that the
original Landlord named herein and each successive Landlord under this Lease
shall be liable only for obligations accruing during the period of its
ownership of the Property, said liability terminating upon termination of such
ownership and passing to the successor lessor.
17.3 No Waiver. The failure of Landlord to seek redress for violation,
or to insist upon the strict performance, of any covenant or condition of this
Lease shall not be deemed a waiver of such violation, or prevent a subsequent
act which would originally have constituted a violation from having all the
force and effect of an original violation.
17.4 Severability. If any provision of this Lease or the application
thereof is held to be invalid or unenforceable, the remainder of this Lease or
the application of such provision to persons or circumstances other than those
as to which it is invalid or unenforceable shall not be affected thereby, and
each of the provisions of this Lease shall be valid and enforceable, unless
enforcement of this Lease as so invalidated would be unreasonable or grossly
inequitable under all the circumstances or would materially frustrate the
purposes of this Lease.
17.5 Litigation Between Parties. In the event of any litigation between
the parties hereto growing out of this Lease, the prevailing party shall be
reimbursed for all reasonable costs, including, but not limited to, reasonable
accountants' fees and attorneys' fees. "Prevailing party" within the meaning of
this Section shall include, without limitation, a party who dismisses an action
for recovery hereunder in exchange for payment of the sums allegedly due,
performance of covenants allegedly breached or consideration substantially
equal to the relief sought in the action.
17.6 Surrender. A voluntary or other surrender of this Lease by Tenant,
or a mutual termination thereof between Landlord and Tenant, shall not result
in a merger but shall, at the option of Landlord, operate either as an
assignment to Landlord of any and all existing subleases and subtenancies, or a
termination of all or any existing subleases and subtenancies. This provision
shall be contained in any and all assignments or subleases made pursuant to
this Lease.
17.7 Construction. The provisions of this Lease shall be construed as a
whole according to their common meaning and not strictly for or against
Landlord or Tenant. The captions preceding the text of each Section and
subsection hereof are included only for convenience of reference and shall be
disregarded in the construction or interpretation of this Lease.
17.8 Entire Agreement. This written Lease, together with the exhibits
hereto, contains all the representations and the entire understandings between
the parties hereto with respect to the subject matter hereof. Any prior
correspondence, memoranda or agreements are replaced in total by this Lease and
the exhibits hereto. This Lease may be modified only by an agreement in writing
signed by each of the parties.
17.9 Governing Law. This Lease and all exhibits hereto shall be
construed and interpreted in accordance with and be governed by all the
provisions of the laws of the State of California.
17.10 No Partnership. Nothing contained in this Lease shall be construed
as creating any type or manner of partnership, joint venture or joint
enterprise with or between Landlord and Tenant.
17.11 Financial Information. Solely in connection with Landlord's sale
or refinancing of the Center or the Building or in connection with the sale or
reorganization of Landlord's business or assets, from time to time Tenant shall
promptly provide directly to prospective lenders, purchasers or investors
designated by Landlord such financial information pertaining to the financial
status of Tenant as Landlord may reasonably request; provided, Tenant shall be
permitted to provide such financial information in a manner which Tenant deems
reasonably necessary to protect the confidentiality of such
30
information, and all recipients of such financial information, including but
not limited to Landlord, shall hold such financial information in the strictest
confidence and fully compensate Tenant for any damages resulting from any breach
of such confidentiality. Landlord agrees that all financial information
supplied to Landlord by Tenant shall be treated as confidential material, and
shall not be disseminated to any party or entity (including any entity
affiliated with Landlord) other than the prospective lenders, purchasers or
investors for use it has been requested without Tenant's prior written consent.
For purposes of this Section, without limiting the generality of the
obligations provided herein, it shall be deemed reasonable for Landlord to
request copies of Tenant's most recent audited annual financial statements, or,
if audited statements have not been prepared, unaudited financial statements
for Tenant's most recent fiscal year, accompanied by a certificate of Tenant's
chief financial officer that such financial statements fairly present Tenant's
financial condition as of the date(s) indicated.
Landlord and Tenant recognize the need of Tenant to maintain the
confidentiality of information regarding its financial status and the need of
Landlord to be informed of, and to provide to prospective lenders and
purchasers of the Premises, financial information pertaining to Tenant's
financial status. Landlord and Tenant agree to cooperate with each other in
achieving these needs within the context of the obligations set forth in this
Section.
17.12. Costs. If Tenant requests the consent of Landlord under any
provision of this Lease for any act that Tenant proposes to do hereunder,
including, without limitation, assignment or subletting of the Premises, Tenant
shall, as a condition to doing any such act and the receipt of such consent,
reimburse Landlord promptly for any and all reasonable costs and expenses
incurred by Landlord in connection therewith, including, without limitation,
reasonable attorneys' fees.
17.13. Time. Time is of the essence of this Lease, and of every term
and condition hereof.
17.14. Rules And Regulations. Tenant shall observe and obey such
rules and regulations as Landlord may promulgate from time to time for the
safety, care, cleanliness, order and use of the Premises and the Building;
provided, however, Tenant shall not be required to comply with any rule or
regulation unless the same applies non-discriminatorily to all occupants of the
Center and the Building and does not unreasonably interfere with Tenant's use
of the Premises or Tenant's parking rights.
17.15. Brokers. Landlord agrees to pay a one-half (1/2) brokerage
commission to ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ of California, Inc. and a full brokerage
commission to Blickman Turkus, at the times and rates established in Landlord's
existing separate agreement with ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ of California, Inc., in
connection with the consummation of this Lease. Tenant represents and warrants
that no other broker participated in the consummation of this Lease and agrees
to indemnify, defend and hold Landlord harmless against any liability, cost or
expense, including, without limitation, reasonable attorneys' fees, arising out
of claims or brokerage commissions in connection with conversations, prior
negotiations or other dealings by Tenant with any other broker.
17.16. Memorandum Of Lease. At any time during the term of this
Lease, either party, at its sole expense, shall be entitled to record a
memorandum of this Lease and, if either party so elects, both parties agree to
cooperate in the preparation, execution, acknowledgement and recordation of
such document in reasonable form.
17.17. Corporate Authority. Each person signing this Lease warrants
that he or she is fully authorized to do so and, by so doing, to bind the
entity for which he or she is signing. As evidence of such authority, the
parties shall deliver to each other, upon or prior to execution of this Lease,
a certified copy of a resolution of their respective board of directors
authorizing the execution of this Lease and naming the officer that is
authorized to execute this Lease on behalf of such party.
17.18. Approvals. Whenever this Lease requires an approval, consent,
designation, determination or judgment by either Landlord or Tenant, such
approval, consent, designation, determination or judgment (including, without
limiting the generality of the foregoing, those required in connection with
assignment and subletting) shall not be unreasonably withheld or delayed and in
exercising any right or remedy hereunder, each party shall at all times act
reasonably and in good faith.
31
17.19 Reasonable Expenditures. Any expenditure by a party permitted
or required under this Lease, for which such party is entitled to demand and
does demand reimbursement from the other party, shall be limited to the fair
market value of the goods and services involved, shall be reasonably incurred,
and shall be substantiated by documentary evidence available for inspection and
review by the other party or its representatives during normal business hours
and on reasonable advance notice, provided that such right of Inspection and
review is exercised not later than sixty (60) days after the party incurring
the expense has requested reimbursement.
IN WITNESS WHEREOF, the parties hereto have executed this Lease
as of the day and year first set forth above.
"Landlord" "Tenant"
HALL PROPERTIES, INC., an RIBOGENE,INC., a California
Arizona corporation corporation
By: [SIG] By: [SIG]
----------------------------- -----------------------------
Its: President Its: President/CEO 2/7/9?
----------------------------- ----------------------------
32
EXHIBITS
EXHIBIT A Location of Premises
EXHIBIT B Real Property Description
EXHIBIT C Construction
EXHIBIT C-1 Schedule of Existing Laboratory Equipment and
Systems
EXHIBIT D Acknowledgement of Lease Commencement
33
EXHIBIT A
Ribogene Premises
20,325 s.f.
[FLOOR PLAN DIAGRAM]
34
EXHIBIT B
REAL PROPERTY DESCRIPTION
Improved real property located in the City of Hayward, County of Alameda, State
of California, more particularly described as follows:
▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇▇, filed July 22, 1977, Map Book 96, page 13, Alameda County
Records.
35
EXHIBIT C
CONSTRUCTION
Landlord, at its sole cost and expense, shall undertake and diligently
complete, subject to delays for causes beyond its reasonable control, leasehold
improvements to the Initial Premises in accordance with plans and
specifications to be prepared by Landlord, subject to approval by Tenant, which
approval shall not be unreasonably withheld or delayed. Such work shall be
performed in a neat and workmanlike manner by a contractor selected by Landlord
and approved by Tenant (which approval shall not be unreasonably withheld or
delayed), and shall conform to all applicable governmental codes, laws and
regulations in force at the time such work is completed.
Landlord's work pursuant to Section 2.4 and this Exhibit C shall be
performed only after Tenant's early termination right under Section 2.1(b) of
the Lease has been waived by Tenant or has expired unexercised, and after
Tenant has provided to Landlord the letter of credit required under Section
16.1(b) of the Lease. Such work shall consist of improvements to be designed
and constructed in accordance with the preceding paragraph and subject to the
tenant improvement allowance limitations set forth in the following paragraph.
Landlord has agreed to provide a maximum allowance of Five Dollars
($5.00) per square foot ($101,625 total) for the work in the initial Premises
pursuant to Section 2.4 and this Exhibit C. Any greater or lesser costs
relating to changes requested by Tenant to such work shall result in a rental
adjustment pursuant to Section 3.1(c) of this Lease. In addition to this
specified allowance, Landlord has agreed to provide up to an additional Three
and No/100 Dollars ($3.00) per square foot, if necessary, for tenant
improvement work in the initial Premises, subject to rental adjustments in
accordance with the preceding sentence; provided, that under no circumstances
shall Landlord be required to provide or spend more than the specified
allowance plus such additional $3.00 per square foot for such improvements,
unless Landlord in its sole discretion elects and agrees to do so.
Attached hereto as Exhibit C-1 and incorporated herein by this
reference is a schedule of certain existing laboratory equipment and systems
affixed to or located in the Initial Premises, all of which shall be left in
place by Landlord, for use by Tenant, as part of the leasehold improvements,
during the term of this Lease. All such equipment and systems shall remain the
property of the Landlord and shall be left in place by Tenant, in the
condition required under Section 8.2(c) of this Lease, at the expiration of the
term of this Lease.
Landlord represents and warrants that (a) the equipment listed in
Exhibit C-1 and (b) the electrical, plumbing, HVAC and sprinkler and other
operating systems ("Building Systems") in the Premises are in good working
order and that to the extent any additional work is necessary to place such
equipment or systems in good working order at the commencement of Tenant's
occupancy of the Premises, the cost of such work shall be borne solely by
Landlord and shall not be charged against the tenant improvement allowance, it
being further understood, however, that if the work under this Exhibit C
includes the installation of new portions of the Building Systems not presently
in existence, the cost of such new portions will be charged against the tenant
improvement allowance in the same manner as other work is to be charged
hereunder.
The scope of Tenant's "punch list" rights under Section 2.4 of the
Lease shall be as follows:
Tenant may object to (within the permitted time periods), and Landlord
shall be required to correct, any defects in the work required to be performed
by Landlord under this Exhibit C including (but not limited to) any respect in
which such work is not in accordance with approved plans and specifications,
was not performed in a first class and workmanlike manner or does not conform
to applicable governmental codes, laws and regulations.
36
RIBOGENE PREMISES
Equipment Test Laboratory Areas (see attached sketch)
LAB. I Permalab Fume Hood
Model H-804-X Quantity (2)
Misc. floor-mounted cabinets
with two sinks
LAB. II Permalab Fume Hoods
Model H-804-X Quantity (1)
Model H-854-X Quantity (1)
Misc. floor-mounted cabinets
with two sinks
LAB. III Misc. floor-mounted cabinets
with sink
LAB. IV Permalab Fume Hoods
Model H-854-X Quantity (2)
Model H-804-X Quantity (1)
Misc. floor-mounted cabinets
with sink
LAB. V Permalab Fume Hood
Model H-804-X Quantity (1)
Misc. floor-mounted cabinets
LUNCH ROOM Misc. floor-mounted cabinet
with sink
LAB. VI Permalab Fume Hoods
No model number Quantity (2)
Misc. floor-mounted cabinets
with sink
AB. VII Permalab Fume Hoods
Model H-854-X Quantity (3)
No model number Quantity (1)
Floor-to-ceiling Fume Hoods
No model number Quantity (4)
Misc. floor-mounted cabinets
One cabinet with sink
REAR AREA Walk-in refrigerator as existing
EXHIBIT C-1 (page 1)
37
EXHIBIT C-1
[FLOOR PLAN]
38
ACKNOWLEDGEMENT OF LEASE COMMENCEMENT
This Acknowledgement is executed as of _______________, 1992, by HALL
PROPERTIES, INC., an Arizona corporation ("Landlord"), and RIBOGENE, INC., a
_______________ corporation ("Tenant"), pursuant to Section 2.5 of the Lease
dated February __, 1992 between Landlord and Tenant (the "Lease") covering
premises located at ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (the "Premises").
Landlord and Tenant hereby acknowledge and agree as follows:
1. The Commencement Date under the Lease is ______________, 19__.
2. The termination date under the Lease shall be ______________, 19__,
subject to any applicable provisions of the Lease for extension or early
termination thereof.
3. Tenant accepts the Premises and acknowledges the satisfactory completion
of all improvements therein (if any) required to be made by Landlord, subject
only to any applicable "punch list" or similar procedures specifically provided
under the Lease.
EXECUTED as of the date first set forth above.
"Landlord" "Tenant"
HALL PROPERTIES, INC., an RIBOGENE, INC., a California
Arizona corporation corporation
By: By:
------------------------- -----------------------------
Its: Its:
------------------------- -----------------------------
39
FIRST AMENDMENT TO RIBOGENE LEASE
THIS FIRST AMENDMENT TO RIBOGENE LEASE ("Amendment") is executed as of
____________ , 1993, between Hall Properties, Inc., an Arizona corporation
("Landlord"), and Ribogene, Inc., a California corporation ("Tenant"), with
reference to the following facts:
A. Landlord and Tenant are parties to a Lease dated as of February
6, 1992 (the "Lease"), covering approximately 20,325 square feet of space
commonly known as ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (the "Premises").
Capitalized terms used in this Amendment and not otherwise defined shall have
the meaning given in the Lease.
B. Landlord has contracted to sell the Property and the
improvements thereon (including the Premises) to ▇▇▇▇▇▇ Man ▇▇▇▇▇ ▇▇▇▇▇ and
▇▇▇▇▇ Van Change (collectively, "Buyers"). This Amendment is to be delivered
through escrow on the closing of the sale to Buyers.
C. Under conditions specified in Section 2.4 and Exhibit C of the
Lease, Landlord was to construct tenant improvements (the "Improvements") and
fund such Improvements through a tenant improvement allowance (the
"Allowance"). As of the date of this Amendment, the Improvements have not been
constructed and the Allowance therefore has not been spent.
D. Tenant has determined that it does not wish to have the
Improvements constructed and Landlord has agreed, pursuant to Section 3.1(c) of
the Lease, to reduce Tenant's rent in accordance with the terms of this
Amendment.
NOW, THEREFORE, in consideration of the mutual covenants and obligations
contained herein, Landlord and Tenant agree as follows:
1. Improvements Not to be Constructed. Notwithstanding any contrary
term of the Lease, Landlord and Tenant agree that Landlord shall have no
obligation to construct the Improvements or to fund the Allowance.
2. Adjustment to Rent. In satisfaction of the adjustment
provisions in Section 3.1(c) of the Lease, the minimum rental amount payable by
Tenant under Section 3.1 of the Lease shall be reduced by $2,886.26 per month
from the date of this Amendment until the end of the term of this Lease.
Accordingly, the minimum rental amounts specified in Section 3.1(a) of the
Lease shall be modified as follows:
40
Month Minimum Rental
----- --------------
Amendment Date -- Month 36 $ 7,276.24
Months 37-48 8,292.49
Months 49-60 (expiration) 10,324.99
If the date of this Amendment is other than the first day of a calendar month,
minimum rental for the partial calendar month following the date of this
Amendment shall be prorated based on the number of days during such partial
calendar month. After giving effect to the rental adjustment provided in this
Paragraph 2, the terms of Section 3.1(c) of the Lease shall be of no further
force or effect.
3. Letter of Credit. The parties acknowledge that Tenant has not
provided the letter of credit specified in Section 16.1(b) of the Lease, and
agree that, notwithstanding any contrary term of the Lease, Tenant shall have
no obligation to provide such a letter of credit and Sections 16.1(b) through
(g) of the Lease shall be of no further force or effect.
4. Effective on Closing Date. This Amendment is to be delivered and
take effect only on the date that a deed conveying the Property to Buyers is
delivered (through recordation) by Landlord (the "Closing Date"), which Closing
Date shall be inserted in the first paragraph of this Amendment by the escrow
holder who records such deed; provided that in no event shall this Amendment be
delivered or take effect if the Closing Date does not occur on or before
November 30, 1993.
5. Lease Remains In Effect. Subject only to the provisions of this
Amendment, the Lease has not been modified or amended and remains in full force
and effect.
IN WITNESS WHEREOF, Landlord and Tenant have executed and delivered
this Amendment as of the Closing Date.
"Landlord" "Tenant"
HALL PROPERTIES, INC., an RIBOGENE, INC., a
Arizona corporation California corporation
By: [SIG] By: [SIG]
----------------------------- ---------------------------
Its: Executive Vice President Its:
----------------------------- ---------------------------
-2-
41
October 27, 1993
In connection with the Lease Agreement dated February 6, 1992 between Hall
Properties, Inc., an Arizona corporation ("Landlord") and Ribogene, Inc., a
California corporation ("Tenant"), this letter will confirm the following:
1. Ribogene, Inc. waived its option of first refusal per Section 1.3 of the
lease, thereby allowing Bianchi USA, Inc. to occupy the space;
2. Ribogene's option to terminate the lease upon the first anniversary of the
commencement date, per Section 2.1(b) of lease was not exercised; and
3. The amount of the security deposit held by the Landlord per Section 16.1(a)
of the lease is $10,162,50. There is no letter of credit required as a
security deposit per Section 16.1(b) of the lease as "the aggregate cost of
such improvements made by Landlord" is zero ($0).
AGREED BY:
HALL PROPERTIES, INC., an Arizona corporation
By: [SIG]
------------------------------------------
Its: Executive Vice President
-----------------------------------------
Date: 11/1/93
----------------------------------------
RIBOGENE, INC., a California corporation
By: [SIG]
------------------------------------------
Its: President
-----------------------------------------
Date: 10/29/93
----------------------------------------