WORK LETTER This Lease is supplemented by that certain Work Letter of even date executed by Lessor and Lessee, attached hereto as Exhibit C, and incorporated herein by this reference.
Final Space Plan Tenant shall supply Landlord with four (4) copies signed by Tenant of its final space plan for the Premises before any architectural working drawings or engineering drawings have been commenced. The final space plan (the “Final Space Plan”) shall include a layout and designation of all offices, rooms and other partitioning, their intended use, and equipment to be contained therein. Landlord may request clarification or more specific drawings for special use items not included in the Final Space Plan. Landlord shall advise Tenant within five (5) business days after Landlord’s receipt of the Final Space Plan for the Premises if the same is unsatisfactory or incomplete in any respect. If Tenant is so advised, Tenant shall promptly (i) cause the Final Space Plan to be revised to correct any deficiencies or other matters Landlord may reasonably require, and (ii) deliver such revised Final Space Plan to Landlord.
Landlord Improvements (a) On the Commencement Date, Landlord will deliver the Leased Premises to Tenant in a broom clean condition, and, along with the lighting, electrical (excluding the UPS system and the diesel generator), mechanical and plumbing fixtures, plumbing systems, dock doors and HVAC servicing the Leased Premises, hot water, doors and plate-glass, will be delivered to Tenant in good condition and repair, as defined in Section 5.05 above.
(b) After receipt of the Letter of Credit and any required building permit, Landlord will commence and diligently pursue to completion, the construction of the improvements to the Leased Premises (the “Landlord Improvements”), in accordance with plans and specifications as shown in Exhibit B, subject to approval by local regulatory authorities (the “Plans”), which Plans are made a part of this Lease by reference. Any changes or modifications to the Plans must be made and accepted by written change order or agreement signed by Landlord and Tenant and will constitute an amendment to this Lease. Any Landlord Improvements made by Landlord are the property of Landlord and must be surrendered to Landlord upon the termination of this Lease without credit to Tenant. Upon completion of any Landlord Improvements and issuance of a final certificate of occupancy (to be applied for by Landlord’s general contractor) and certification from Landlord’s general contractor certifying to Tenant that all Landlord Improvements have been completed in accordance with the Plans (the “General Contractor’s Certificate”), thereafter Landlord shall provide and Tenant shall acknowledge receipt and acceptance of “as-built plans” of all work done in accordance with this Section 6.01.
(c) Landlord shall furnish an allowance of up to $172,800.00 (One hundred seventy-two thousand, eight hundred dollars) (“Landlord Improvement Allowance”) to be credited against the cost of the construction of the Landlord Improvements. If the actual cost of construction of the Landlord Improvements is less than the Landlord Improvement Allowance (“Allowance Overage”), Tenant shall have no right or claim to such difference; provided however, that if there is an Allowance Overage, Landlord, upon submission of supporting documentation by Tenant, will reimburse Tenant for any third party costs of low voltage wiring and laboratory benches for the Leased Premises, but such reimbursement shall not exceed the lesser of the Allowance Overage or 69,120.00 (Sixty-nine thousand, one hundred twenty & xx/100 dollars). If the actual cost of construction of the Landlord Improvements exceeds the Landlord Improvement Allowance, Tenant shall pay such excess cost to Landlord within ten (10) business days after receipt of supporting documentation and the General Contractor’s Certificate,.
(d) Notwithstanding anything contained in Section 6.01 (c) above, within 30 days after the issuance of the General Contractor’s Certificate, Landlord will determine the sum of (i) the actual cost of the Landlord Improvements, plus (ii) if any, the actual costs submitted by Tenant towards the Contingent Allowance, and the product of the calculation shall be rounded to the next $1,000.00 (One Thousand Dollars). If the resultant amount is less than the Landlord Improvement Allowance, Landlord shall reduce the monthly Base Rent by $20.25 (“Base Rent Reduction Factor”) for each whole $1,000.00 (One Thousand Dollars) of such amount effective January 1, 2012. If it is determined that the monthly Base Rent is to be reduced and if Tenant has already paid Base Rent in a pre-reduction amount, Landlord shall give Tenant credit for any such excess payment, and reduction in monthly Base Rent shall be memorialized in an amendment to this Lease. In the event that the monthly Base Rent is reduced in accordance with this Section 6.01(d), there shall be no reduction in the Security Deposit Amount or in the requirements set forth for the Letter of Credit. The following example illustrates the intentions of the parties hereto as to computation of any reduction of the monthly Base Rent: Assumptions:
1. Actual cost of the Landlord Improvements: $100,000.00
2. Actual cost of qualifying costs for Contingent Allowance: $50,500.00 Total cost of Landlord Improvements and Contingent Allowance Costs: ($100,000.00 + $50,500.00) = $150,500.00 Determination of reduction in monthly Base Rent: Total Landlord Improvement Allowance $ 172,800.00 Less total cost of Landlord Improvements and contingent costs 150,500.00 $ 22300.00 Rounded to next $1,000.00 (One Thousand Dollars) $ 23,000.00 Divided by $1,000.00 (One Thousand Dollars) 1,000.00 Base Rent Reduction Factor 20.25 Reduction in monthly Base Rent $ 465.75
(e) In addition to the Landlord Improvements, Landlord, at Landlord’s sole cost and expense, shall have the following additional work performed on the Leased Premises prior to delivery of possession to Tenant, such work to be coordinated with the construction of the Landlord Improvements:
(i) Replace all stained, damaged or missing ceiling tiles,
(ii) Paint all walls in the Leased Premises, the color to be designated by Tenant,
(iii) Replace all vinyl floor tiles in the open laboratory area as shown in Exhibit C,
(iv) Shampoo all carpets in the office areas and hallways and
(v) Any existing water supply or drainage pipes in the open lab area that are not initially utilized by Tenant shall be capped and made reasonably flush with the floor, but such capping shall allow for those pipes to be tapped by Tenant for future use.
(vi) Re-caulk all perimeter flashing; install new pads under all gas line blocking; repair any loose or open curb or wall flashing; repack all pitch pans; repair any open joints on gravel guard; repair any loose scupper flashing; clean, prime and install EPDM peel and stick tape to all roof side tilt wall joints; clean all debris from around drains and entire roof; install Xxxxxx 97 asbestos free aluminum coating to entire roof surface
(vii) Repair any existing alligator or pothole areas.
Landlord’s Repairs Landlord, as an Operating Expense, shall maintain all of the structural, exterior, parking and other Common Areas of the Project, including HVAC, plumbing, fire sprinklers, elevators and all other building systems serving the Premises and other portions of the Project (“Building Systems”), in good repair, reasonable wear and tear and uninsured losses and damages caused by Tenant, or by any of Tenant’s agents, servants, employees, invitees and contractors (collectively, “Tenant Parties”) excluded. Losses and damages caused by Tenant or any Tenant Party shall be repaired by Landlord, to the extent not covered by insurance, at Tenant’s sole cost and expense. Landlord reserves the right to stop Building Systems services when necessary (i) by reason of accident or emergency, or (ii) for planned repairs, alterations or improvements, which are, in the judgment of Landlord, desirable or necessary to be made, until said repairs, alterations or improvements shall have been completed. Landlord shall have no responsibility or liability for failure to supply Building Systems services during any such period of interruption; provided, however, that Landlord shall, except in case of emergency, make a commercially reasonable effort to give Tenant 24 hours advance notice of any planned stoppage of Building Systems services for routine maintenance, repairs, alterations or improvements. Tenant shall promptly give Landlord written notice of any repair required by Landlord pursuant to this Section, after which Landlord shall make a commercially reasonable effort to effect such repair. Landlord shall not be liable for any failure to make any repairs or to perform any maintenance unless such failure shall persist for an unreasonable time after Tenant’s written notice of the need for such repairs or maintenance. Tenant waives its rights under any state or local law to terminate this Lease or to make such repairs at Landlord’s expense and agrees that the parties’ respective rights with respect to such matters shall be solely as set forth herein. Repairs required as the result of fire, earthquake, flood, vandalism, war, or similar cause of damage or destruction shall be controlled by Section 18.
Landlord Work Landlord shall, at Landlord’s sole cost and expense, concurrently with Tenant’s construction of the Tenant Improvements, remove the existing demising wall and construct a Building standard demising wall at the Expansion Premises, which shall include studs, acoustical insulation and dry wall ready for finish on the Tenant side only and any necessary penetrations, fire dampers and sound traps (collectively, the “Demising Wall”), which Demising Wall shall be adjacent to the Expansion Premises as set forth on Exhibit A to this Amendment (collectively, the “Landlord Work”). Tenant may not change or alter the Landlord Work. Landlord shall use commercially reasonable efforts to Substantially Complete the Landlord Work no later than forty-five (45) days after the Expansion Delivery Date. In addition, Landlord shall, at Landlord’s sole cost and expense, to the extent required in order to allow Tenant to obtain a certificate of occupancy, or its legal equivalent, for the Expansion Premises for general office use assuming a normal and customary office occupancy density, cause the Landlord Work and the Building Common Areas (including the Base Building restrooms on the seventh (7th) floor of the Building), to comply with applicable building codes and other governmental laws, ordinances and regulations related to handicap access, which were enacted and enforced as of the date of this Amendment. Because Landlord shall be constructing the Landlord Work concurrently with Tenant’s construction of the Tenant Improvements, there will be a certain “overlap” period pursuant to which both Landlord’s representatives, employees, vendors and contractors and Tenant’s representatives, employees, vendors and contractors may be present and performing work in a portion of the Premises. During any such “overlap” period(s) when both parties and/or their respective employees, vendors, contractors or consultants are concurrently performing work in, or accessing, any portion of the Premises, neither party shall unreasonably interfere with or delay the work of the other party and/or its contractors or consultants, and both parties shall mutually coordinate and cooperate with each other, and shall cause their respective employees, vendors, contractors, and consultants to work in harmony with and to mutually coordinate and cooperate with the other’s employees, vendors, contractors and consultants, respectively, to minimize any interference or delay by either party with respect to the other party’s work. In addition, Landlord shall, and shall cause the other Landlord Parties to, use commercially reasonable efforts to minimize any interference with Tenant’s operations in the Existing Premises. Landlord shall have no obligation to move any furniture or other personal property of Tenant in the performance of Landlord Work. Tenant hereby agrees that the construction of the Landlord Work shall in no way constitute a constructive eviction of Tenant nor entitle Tenant to any abatement of rent. Except as otherwise expressly provided in the Lease (including this Tenant Work Letter), Landlord shall have no responsibility or for any reason be liable to Tenant for any direct or indirect injury to or interference with Tenant’s business arising from the Landlord Work, nor shall Tenant be entitled to any compensation or damages from Landlord for loss of the use of the whole or any part of the Premises or of Tenant’s personal property or improvements resulting from the Landlord Work or Landlord’s actions in connection with the Landlord Work, or for any inconvenience or annoyance occasioned by the Landlord Work or Landlord’s actions in connection with the Landlord Work.
Additional Space Commencing on May 1, 2001, Sublessor herein grants unto the Sublessee a Right of First Refusal on any space that shall be and/or becomes available in the building during the remaining Term of this Sublease. Prior to May 1, 2001 and thereafter prior to the first day of May of any calendar year during the remaining Term hereof, Sublessor shall notify Sublessee by written notice of the availability of any such space in the building. Should Sublessee desire to exercise its Right of First Refusal and sublease such available space, Sublessee must notify Sublessor in writing of its desire to sublease the available space within seven (7) calendar days of Sublessee's receipt of Landlord's notice of availability. Within thirty (30) days of the receipt of Sublessee's notice exercising the right to sublease such available space, Sublessee and Sublessor shall enter into an amendment of this agreement setting forth the terms under which the additional space is subleased to Sublessee. The Base Rental shall be at a rental mutually agreed between Sublessee and Sublessor. Failure by Sublessee to exercise its Right of First Refusal within said seven (7) calendar day period, or if exercised, failure to enter into an amendment of this agreement within thirty (30) days of Sublessor's receipt of Sublessee's notice, shall be deemed a waiver of such right and Sublessor shall thereafter be free of any obligation under this Article 2.04 for a period of 12 months. Any exercise by Sublessee of this Right of First Refusal shall be for a minimum of 5,000 rental square feet.
Additional Work If changes in the work seem merited by Consultant or the City, and informal consultations with the other party indicate that a change is warranted, it shall be processed in the following manner: a letter outlining the changes shall be forwarded to the City by Consultant with a statement of estimated changes in fee or time schedule. An amendment to this Agreement shall be prepared by the City and executed by both Parties before performance of such services, or the City will not be required to pay for the changes in the scope of work. Such amendment shall not render ineffective or invalidate unaffected portions of this Agreement.
Landlord Repairs Landlord shall maintain, at its expense, the structural soundness of the roof, foundations, and exterior walls of the Site and all common areas within the Site in good repair, reasonable wear and tear and damages caused by Tenant, its agents and contractors excluded; provided, however, that Landlord’s costs of maintenance and repair of the common areas may be included within Site Operating Costs as provided and subject to the limitations thereon set forth in Section 9 above; and provided, further, that Landlord shall also make all such repairs and restorations which may be required as a result of any patent or latent defects in Landlord’s Work pursuant to Landlord’s warranty set forth in Section 6 of Exhibit “B”. The term “walls” as used in this Section shall not include windows, glass or plate glass, doors or overhead doors, special store fronts, dock bumpers, dock plates or levelers, or office entries. Tenant shall promptly give Landlord written notice of any repair required by Landlord pursuant to this Section, after which Landlord shall have a reasonable opportunity to repair; provided, however, that Landlord shall in any event have commenced and diligently pursue all such repairs to completion within thirty (30) days after receipt of Tenant’s written notice therefor; provided, further, that if such repairs are not capable of being completed within said 30-day period, then Landlord shall have such additional period of time as may be reasonably necessary to complete such repairs so long as Landlord commences such repairs within said thirty (30) day period and diligently pursues such repairs to completion. If the repairs required to be made by Landlord materially and adversely affect Tenant’s use of the Premises for its Permitted Use and Tenant’s notice clearly and conspicuously labels the repair a “Critical Repair” and summarizes the requirements of this Section, Landlord shall commence and diligently pursue such repairs to completion within five (5) business days after receipt of the foregoing written notice from Tenant and, if Landlord fails to commence and diligently pursue such repairs within said five (5) business day period, Tenant shall have the right to elect to perform such repairs on behalf of Landlord, the actual, reasonable costs of which shall be reimbursed by Landlord to Tenant within thirty (30) days after Landlord’s receipt of a written invoice or statement therefor from Tenant and, if such costs and expenses are not so reimbursed to Tenant within said 30-day period, Tenant shall have the right to offset the same, together with interest at a per-annum rate equal to the Prime Rate plus ten percent (10%), from the next and subsequent installments of Base Rent payable under this Lease until the foregoing amount is fully offset.
Tenant Improvements Landlord shall cause the Core and Shell Contractor or another Contractor designated by Landlord and approved by Tenant, such consent not to be unreasonably withheld or delayed (“TI Contractor”, and together with Core and Shell Contractor, “Contractor”) to commence and thereafter diligently prosecute the construction of the tenant improvements in the Premises pursuant to the Work Letter (the “Tenant Improvements”); provided, however, that before performing the Tenant Improvements, Landlord shall prepare in good faith an estimated budget for the construction of the Tenant Improvements and deliver such budget to Tenant for Tenant’s written approval prior the start of construction (the “Budget”). Landlord and Tenant shall work together cooperatively and in good faith to achieve a mutually acceptable Budget. Landlord shall update the Budget for Tenant’s review and approval at reasonable intervals and shall notify Tenant in writing if the Budget is likely to be exceeded. If there is an indication that the Budget is likely to be exceeded, Landlord and Tenant shall work together cooperatively, if required by Tenant, to modify the scope of the Tenant Improvements to bring the same in line with a budget reasonably acceptable to Tenant. The Tenant Improvements shall be performed in a workmanlike manner and shall substantially conform with Applicable Laws and the Approved TI Plans (as defined in the Work Letter). Tenant shall pay all TI Costs, except that Landlord shall pay for TI Costs that do not exceed the TI Allowance. The “TI Allowance” shall mean (a) One Hundred Twenty Five Dollars ($125.00) per rentable square foot of the Premises (the “Initial TI Allowance”), together with (b) the Additional Allowance. The “TI Costs” shall mean all Tenant Core and Shell Costs (as defined in the Work Letter) and all costs and expenses of performing the TI Work, including without limitation the hard and soft costs of (i) construction, (ii) the Construction Management Fee (as such term is defined in the Work Letter) and any Project or construction management fees paid by Tenant to an unaffiliated third party (such fees not to exceed three percent (3%) of the TI Allowance), (iii) space planning, design, architect, engineering, data and phone cabling and other related services, (iv) costs and expenses for labor, material, equipment, data and phone cabling and fixtures (including, without limitation, any of the Attached Property (as defined in Section 18.5), (v) building permits and other taxes, fees, charges and levies by governmental and quasi-governmental agencies for permits or for inspections of the Tenant Improvements, and (vi) the Warm Shell Costs. In no event shall the TI Allowance be used for: (w) the purchase of any furniture, personal property or other non-building system equipment, (x) costs resulting from a Tenant Delay, (y) costs resulting from any default by Tenant of its obligations under this Lease, or (z) costs that are recoverable or reasonably recoverable by Tenant from a third party (e.g., insurers, warrantors, or tortfeasors). In the event the estimated total TI Costs (as set forth in the Budget) exceed the TI Allowance, Tenant shall deposit with Landlord such overage (the “TI Allowance Excess”), within five (5) business days of receiving the Budget (the “TI Deposit”). In the event Landlord determines the estimate of the TI Costs set forth in the Budget underestimates the amount of TI Costs so that the TI Deposit will not be sufficient to cover the TI Allowance Excess, then Landlord shall communicate the same to Tenant and, if required by Tenant, the parties shall discuss revisions to the Budget and Tenant may make a TI Tenant Change Order Request to reduce TI Costs, and unless the TI Costs are reduced to be within the Budget and previously paid TI Deposit, Tenant shall promptly pay the additional amount to Landlord, and such additional amount shall be added to the TI Deposit. If the sum of the TI Allowance plus the TI Deposit is not sufficient to cover the TI Costs, Tenant shall reimburse Landlord the difference between (a) the TI Costs and (b) the sum of the TI Allowance and the TI Deposit. However, Landlord shall be solely responsible for any costs related to the Tenant Improvements to the extent the same result from Landlord’s gross negligence, intentional misconduct or breach of Lease. Landlord and Tenant shall work together cooperatively at no cost or risk to Landlord to maximize Tenant’s ability, to the extent reasonably possible, to obtain the benefit of any applicable research and development tax credits with respect to the Tenant Improvements.
Landlord’s Option to Repair Notwithstanding the terms of Section 11.1 of this Lease, Landlord may elect not to rebuild and/or restore the Premises, Building and/or Project, in which event this Lease shall terminate, by notifying Tenant in writing of such termination within sixty (60) days after the date of discovery of the damage, such notice will include a termination date giving Tenant sixty (60) days to vacate the Premises, but this Lease may be so terminated Landlord may so elect only if the Building or Project shall be damaged by fire or other casualty or cause, whether or not the Premises are affected, and one or more of the following conditions is present: (i) in Landlord’s reasonable judgment, repairs cannot reasonably be completed within one hundred eighty (180) days after the date of discovery of the damage (when such repairs are made without the payment of overtime or other premiums); (ii) the holder of any mortgage on the Building or Project or ground lessor with respect to the Building or Project shall require that the insurance proceeds or any portion thereof be used to retire the mortgage debt, or shall terminate the ground lease, as the case may be; (iii) the damage is not fully covered by Landlord’s insurance policies or that portion of the proceeds from Landlord’s insurance policies allocable to the Building or the Project, as the case may be; (iv) Landlord decides to rebuild the Building or Common Areas so that they will be substantially different structurally or architecturally; (v) the damage occurs during the last twelve (12) months of the Lease Term; or (vi) any owner of any other portion of the Project, other than Landlord, does not intend to repair the damage to such portion of the Project; provided, however, that if such fire or other casualty shall have damaged the Premises or a portion thereof or Common Areas necessary to Tenant’s occupancy and as a result of such damage the Premises are unfit for occupancy, and provided that Landlord does not elect to terminate this Lease pursuant to Landlord’s termination right as provided above, and either (a) the repairs cannot, in the reasonable opinion of Landlord’s contractor, be completed within two hundred seventy (270) days after being commenced, or (b) the damage occurs during the last twelve months of the Lease Term and will reasonably require in excess of ninety (90) days to repair, Tenant may elect, no earlier than sixty (60) days after the date of the damage and not later than ninety (90) days after the date of such damage, to terminate this Lease by written notice to Landlord effective as of the date specified in the notice, which date shall not be less than thirty (30) days nor more than sixty (60) days after the date such notice is given by Tenant.
