LEASE
METROPOLITAN LIFE INSURANCE COMPANY
a New York corporation
as Landlord
and
ADVANCED POLYMER SYSTEMS,
a Delaware corporation
as Tenant
SEAPORT CENTRE
REDWOOD CITY, CALIFORNIA
TABLE OF CONTENTS
PARAGRAPH 1 LEASE OF PREMISES; TERM
PARAGRAPH 2 BASIC ANNUAL RENT AND RENT ADJUSTMENTS
PARAGRAPH 3 ADDITIONAL RENT
PARAGRAPH 4 SECURITY DEPOSIT
PARAGRAPH 5 SUBSTITUTED PREMISES
PARAGRAPH 6 REPAIRS
PARAGRAPH 7 IMPROVEMENTS AND ALTERATIONS
PARAGRAPH 8 LIENS
PARAGRAPH 9 USE OF PREMISES
PARAGRAPH 10 UTILITIES AND SERVICES
PARAGRAPH 11 RULES AND REGULATIONS
PARAGRAPH 12 TAXES ON TENANT'S PROPERTY
PARAGRAPH 13 FIRE OR CASUALTY
PARAGRAPH 14 EMINENT DOMAIN
PARAGRAPH 15 ASSIGNMENT AND SUBLETTING
PARAGRAPH 16 ACCESS
PARAGRAPH 17 SUBORDINATION; ATTORNMENT; ESTOPPEL CERTIFICATES
PARAGRAPH 18 SALE BY LANDLORD
PARAGRAPH 19 NON-LIABILITY AND INDEMNIFICATION OF LANDLORD; INSURANCE
PARAGRAPH 20 WAIVER OF SUBROGATION
PARAGRAPH 21 ATTORNEYS' FEES
PARAGRAPH 22 WAIVER
PARAGRAPH 23 NOTICES
PARAGRAPH 24 INSOLVENCY OR BANKRUPTCY
PARAGRAPH 25 DEFAULT
PARAGRAPH 26 HOLDING OVER
PARAGRAPH 27 CONDITION OF PREMISES
PARAGRAPH 28 QUIET POSSESSION
PARAGRAPH 29 NOTICE OF DAMAGE
PARAGRAPH 30 GOVERNING LAW
PARAGRAPH 31 COMMON FACILITIES; PARKING
PARAGRAPH 32 SIGNAGE
PARAGRAPH 33 SUCCESSORS AND ASSIGNS
PARAGRAPH 34 BROKERS
PARAGRAPH 35 NAME
PARAGRAPH 36 EXAMINATION OF LEASE
PARAGRAPH 37 INTEREST ON TENANT'S OBLIGATIONS; LATE CHARGE
PARAGRAPH 38 TIME
PARAGRAPH 39 DEFINED TERMS AND MARGINAL HEADINGS
PARAGRAPH 40 PRIOR AGREEMENTS; SEVERABILITY
PARAGRAPH 41 CORPORATE AUTHORITY
PARAGRAPH 42 NO LIGHT, AIR OR VIEW EASEMENTS
PARAGRAPH 43 LANDLORD'S APPROVALS
PARAGRAPH 44 EXERCISE FACILITY
PARAGRAPH 45 MISCELLANEOUS
PARAGRAPH 46 WAIVER OF JURY TRIAL
ADDENDUM TO OFFICE LEASE
CONSTRUCTION ADDENDUM
EXHIBIT A Site Plan of Project
EXHIBIT B Site Plan of Premises
EXHIBIT C Confirmation of Lease Term
EXHIBIT D Permitted Hazardous Materials
EXHIBIT E (Intentionally Omitted)
EXHIBIT F Form of Subordination, Nondisturbance & Attornment
Agreement
LEASE
THIS LEASE is made as of November 7, 1997 by and between
METROPOLITAN LIFE INSURANCE COMPANY, a New York corporation ("Landlord"),
and ADVANCED POLYMER SYSTEMS, a Delaware corporation ("Tenant" or
"Advanced Polymer").
BASIC LEASE PROVISIONS
1. PREMISES LOCATION: a part of Xxxxxxxx 0, Xxxxx X xx Xxxxxxx Xxxxxx; 000
Xxxxxxx Xxxxx, Xxxxxxx Xxxx, Xxxxxxxxxx 00000.
2. RENTABLE AREA: Approximately 26,067 rentable square feet.
3. INITIAL BASIC ANNUAL RENT: $594,327.60 ($22.80 per rentable square foot
per year) (i.e., $1.90 per month)
4. INITIAL MONTHLY RENTAL INSTALLMENTS: $49,527.30 ($1.90 per rentable
square foot)
5. RENT ADJUSTMENT DATES (AND BASIC ANNUAL RENT AND MONTHLY RENTAL
INSTALLMENTS THEREAFTER): The Rent Adjustment Date(s) are the
respective anniversaries of the Commencement Date set forth below with
corresponding new Basic Annual Rent and Monthly Rental Installments
effective until the next Rent Adjustment Date:
Basic Monthly Monthly
Annual Rental Rate/
Date Rent Installment RSF
---- ------ ----------- -------
1st Anniversary $609,967.80 $50,830.65 $1.95
2nd Anniversary $625,608.00 $52,137.00 $2.00
3rd Anniversary $641,248.20 $53,437.35 $2.05
4th Anniversary $656,888.40 $54,740.70 $2.10
5th Anniversary $672,528.60 $56,044.05 $2.15
6th Anniversary $688,168.80 $57,347.40 $2.20
6. TENANT'S SHARE OF OPERATING EXPENSES:
Tenant's Building Share: 42.5%
Tenant's Phase Share: 8.64%
Tenant's Project Share: 2.61%
7. TERM OF LEASE: Seven (7) years
8. COMMENCEMENT DATE: November 15, 1997 or earlier as provided in
Paragraph 1(c)
9. EXPIRATION DATE: Seven (7) years after the Commencement Date
10. SECURITY DEPOSIT: $150,000.00 due upon execution and delivery of
this Lease by Tenant.
11. LISTING BROKER: Cornish & Xxxxx Commercial
12. COOPERATING BROKER: Ernst & Young LLP
13. SOLE PERMITTED USE: Office, research and development,
warehousing
and no other use, but in no event in
violation
of any provision of any rules and
regulations
for the Project.
14. PARKING SPACES: 86
IN WITNESS WHEREOF, the parties hereto have executed this Lease,
consisting of the foregoing Basic Lease Provisions and Paragraphs 1
through 46 which follow, together with the attached Rider to Lease,
Construction Addendum and Exhibits A through C inclusive, incorporated
herein by this reference, as of the date first above written. The
foregoing Basic Lease Provisions are an integral part of this Lease;
however, in the event of any conflict between any Basic Lease Provision
and the balance of this Lease, the latter shall control.
LANDLORD: TENANT:
METROPOLITAN LIFE INSURANCE ADVANCED POLYMER SYSTEMS,
COMPANY, a New York corporation a Delaware corporation
By: /s/Xxxxxx X. Xxxxx By: /s/Xxxxxxx O'Connnell
------------------------- --------------------
Its: Assistant Vice President Its: Executive VP/CFO
------------------------ --------------------
LEASE OF PREMISES; TERM
-----------------------
PARAGRAPH 1
(a) SEAPORT CENTRE. The real property shown on the map attached
hereto as EXHIBIT A, together with all improvements now or hereafter
located on such real property, is referred to in this Lease as the
"Project." The Project is more commonly known as Seaport Centre and is
located in Redwood City, California. The Project is comprised of Phase I,
Phase II and Phase III, which are generally designated on EXHIBIT A, each
of which shall individually be referred to in this Lease as a "Phase."
The Phase in which the Premises (as defined in Paragraph 1(b) herein) are
located is indicated in Item 1 of the Basic Lease Provisions and is
referred to in this Lease as "Tenant's Phase." The building in which the
Premises are located is indicated in Item 1 of the Basic Lease Provisions
and is referred to in this Lease as the "Building." Landlord reserves the
right to amend at any time the definition of "Tenant's Phase" to include
any other buildings located in the Project which are owned by Landlord, in
which event Tenant's Phase Share (as defined in Paragraph 3(a) below)
shall be adjusted to reflect the inclusion of any such additional
buildings in the definition of "Tenant's Phase."
(b) LEASE OF PREMISES. Landlord hereby leases to Tenant and Tenant
hereby hires from Landlord, subject to all the terms and conditions
hereinafter set forth, those certain premises (the "Premises") described
in Items 1 and 2 of the Basic Lease Provisions above and substantially as
shown in the floor plan attached hereto as EXHIBIT B.
(c) TERM. The term of this Lease (the "Term") shall be as shown in
Item 7 of the Basic Lease Provisions and shall commence on the earlier to
occur of the commencement date shown in Item 8 of the Basic Lease
Provisions or the date of Substantial Completion of the Tenant
Improvements (defined in the Construction Addendum attached hereto) or
such earlier date as Tenant takes possession or commences use of all or
any portion of the Premises for any purpose other than the construction
and installation therein of the Tenant Improvements (the "Commencement
Date") and shall expire, if not sooner terminated pursuant to the terms of
this Lease, as of the date set forth in Item 9 of the Basic Lease
Provisions (the "Expiration Date"). As used herein, "Substantial
Completion" of the Tenant Improvements shall mean that the work of
constructing the Tenant Improvements shall be complete, as stated in a
notice prepared by Landlord's architect, notwithstanding that minor
details of construction, mechanical adjustments or decorations which do
not materially interfere with Tenant's use of the Premises (so-called
"punchlist" items) remain to be performed or that Tenant's furniture,
telephones, telecopiers, photocopiers, computers and other business
machines or equipment have not been installed by Tenant. The actual
Commencement Date shall be confirmed by Landlord in the Confirmation of
Lease Term attached hereto as EXHIBIT C upon such commencement.
Notwithstanding the foregoing, in no event shall the Expiration Date be
extended.
BASIC ANNUAL RENT AND RENT ADJUSTMENTS
PARAGRAPH 2
(a) BASIC ANNUAL RENT. Tenant agrees to pay as Basic Annual Rent
for the Premises the initial sum shown in Item 3 of the Basic Lease
Provisions, increased as set forth in Paragraph 2(b) below. The Basic
Annual Rent shall be payable in monthly installments as shown in Items 4
and 5 of the Basic Lease Provisions, each payable in advance and without
deduction, abatement or offset. A monthly installment shall be paid to
Landlord on the date of this Lease in the full amount and, subsequently,
monthly installments shall be paid to Landlord on the first day of the
first calendar month commencing after the Commencement Date and continuing
on the first day of each calendar month during the Term thereafter. If
the Term commences or ends on a day other than the first or last day,
respectively, of a calendar month, then the Basic Annual Rent for each
such partial month shall be prorated in the proportion that the number of
days this Lease is in effect during such partial month bears to the total
number of days in such calendar month, and such Basic Annual Rent shall be
payable at the commencement of such partial month.
(b) RENT INCREASES. The amount of Basic Annual Rent and the
Monthly Rental Installments shall be adjusted on each Rent Adjustment Date
set forth in Item 5 of the Basic Lease Provisions, to be the amount shown
in the Basic Lease Provisions.
(c) RENT. Tenant acknowledges and agrees that Landlord has entered
into this Lease in reliance upon Tenant's agreement to timely pay all of
the Basic Annual Rent, the Additional Rent (as defined in Paragraph 3
below) and all other amounts required to be paid under this Lease
(including all Addenda and Exhibits hereto and subsequent amendments
hereof) and in no event would Landlord have agreed to grant any occupancy
rights in and to the Premises to Tenant for less than all such amounts,
however described or designated herein. Accordingly, all sums payable by
Tenant to Landlord hereunder are sometimes collectively referred to as,
and shall collectively constitute, "rent" for all purposes hereunder, at
law and in equity.
ADDITIONAL RENT
PARAGRAPH 3
(a) TENANT'S SHARE OF COSTS. Tenant shall pay as "Additional Rent"
Tenant's proportionate share ("Tenant's Building Share") of the Building
Operating Expenses (as defined below), plus Tenant's proportionate share
("Tenant's Phase Share") of Phase Operating Expenses (as defined below),
plus Tenant's proportionate share ("Tenant's Project Share") of Project
Operating Expenses (as defined below). Tenant's Building Share shall be
the percentage obtained by dividing the rentable square footage of the
Premises by the total rentable square footage of the Building and Tenant's
Phase Share shall be the percentage obtained by dividing the rentable
square footage of the Premises by the total rentable square footage of the
Phase. Tenant's Project Share shall be the percentage obtained by
dividing the rentable square footage of the Premises by the total rentable
square footage of the Project. Tenant's Building Share, Tenant's Phase
Share and Tenant's Project Share shall initially be as set forth in Item 6
of the Basic Lease Provisions.
(b) OPERATING EXPENSES DEFINED. "Operating Expenses" shall include
all costs incurred by Landlord in the management, operation, maintenance,
overhauling and repair of the Building, Tenant's Phase and the Project.
"Building Operating Expenses" shall include Operating Expenses that are
directly and separately identifiable to the operation and maintenance of
the Building. "Project Operating Expenses" shall include all Operating
Expenses incurred in the operation and maintenance of the Project which
are neither Building Operating Expenses nor Operating Expenses directly
and separately identifiable to the operation and maintenance of any other
office building in the Project. "Phase Operating Expenses" may include
Building Operating Expenses that are incurred by each building, including
the Building, in Tenant's Phase, and also may include Project Operating
Expenses that are separately identifiable to Tenant's Phase. Landlord
shall have the right to allocate a particular expense as a Building
Operating Expense, Project Operating Expense or Phase Operating Expense;
however, in no event shall any portion of Building Operating Expenses,
Project Operating Expenses or Phase Operating Expenses be assessed or
counted against Tenant more than once.
(c) EXAMPLES OF OPERATING EXPENSES. Operating Expenses shall
include the following costs, by way of illustration only and not
limitation: (1) all "Property Taxes" (as defined below), and all costs and
expenses to contest the amount or validity of any of the same; (2) all
insurance premiums and other costs (including deductibles), including the
cost of rental insurance; (3) all license, permit and inspection fees; (4)
all costs of utilities, fuels and related services, including water,
sewer, light, telephone, power and steam connection, service and related
charges; (5) all costs to repair, maintain and operate heating,
ventilating and air conditioning systems, including, without limitation,
preventive maintenance; (6) all janitorial, landscaping and security
services; (7) all wages, salaries, payroll taxes, fringe benefits and
other labor costs, including the cost of workers' compensation and
disability insurance; (8) all costs of operation, maintenance and repair
of all parking facilities and other common areas; (9) all supplies,
materials, equipment and tools; (10) dues of and expenses and assessments
incurred in connection with membership in the Seaport Centre Owners'
Association; (11) modifications to the Building or the Project occasioned
by any applicable laws, statutes, ordinances, orders, requirements, rules
or regulations now or hereafter in effect of any governmental or quasi-
governmental authority; (12) the total charges of any independent
contractors employed in the care, operation, maintenance, repair, leasing
and cleaning of the Project, including, without limitation, landscaping,
roof maintenance, and repair, maintenance and monitoring of life-safety
systems, plumbing systems, electrical wiring and Project signage; (13) the
cost of accounting services necessary to compute the rents and charges
payable by tenants at the Project; (14) window and exterior wall cleaning
and painting; (15) managerial and administrative expenses; (16) all costs
in connection with the exercise facility at the Project; (17) all costs
and expenses related to Landlord's retention of consultants in connection
with the routine review, inspection, testing, monitoring, analysis, and
control of Hazardous Materials (defined in Paragraph 9(b) below) and
retention of consultants in connection with the clean-up of Hazardous
Materials (to the extent not recoverable from a particular tenant of the
Project), and all costs and expenses related to the implementation of
recommendations made by such consultants concerning the use, generation,
storage, manufacture, production, storage, release, discharge, disposal or
clean-up of Hazardous Materials on, under or about the Premises or the
Project (to the extent not recoverable from a particular tenant of the
Project); (18) all capital improvements made that reduce other Operating
Expenses, and all other capital expenditures, but only as amortized over
such reasonable period as Landlord shall determine, with a return on
capital at the rate of ten percent (10%) per annum or at such higher rate
as may have been available to Landlord on funds borrowed for the purpose
of constructing such capital improvements; (19) all property management
costs and fees, including, without limitation, all costs incurred in
connection with the Project property management office; and (20) all fees
or other charges incurred in conjunction with voluntary or involuntary
membership in any energy conservation, air quality, environmental, traffic
management or similar organizations.
(d) PROPERTY TAXES. "Property Taxes" shall include (1) all real
estate taxes, personal property taxes and other taxes, charges and general
and special assessments which are levied with respect to any portion of
the Building or the Project or any improvements, fixtures, equipment or
other property of Landlord, real or personal, located in or about the
Building or Project or used in connection with the operation thereof, (2)
any tax, surcharge, assessment or service or other fee which shall be
levied or collected in addition to or in lieu of real estate or personal
property taxes, other than taxes covered by Paragraph 12 below, (3) any
service or other fees collected by governmental agencies in addition to or
in lieu of property taxes for services provided by such agencies, and (4)
any rental, excise, sales, transaction privilege or other tax or levy,
however denominated, imposed upon or measured by any rent reserved
hereunder or on Landlord's business of leasing the Premises, excepting
only net income taxes.
(e) STATEMENT OF EXPENSES. Prior to the commencement of the Term
and of each calendar year thereafter, Landlord shall give Tenant a written
estimate of the amount of Operating Expenses for the applicable year, as
well as Tenant's share thereof, which amount shall be payable by Tenant as
Additional Rent for the ensuing year or portion thereof. During the
calendar year that is the subject of Landlord's statement of estimated
Operating Expenses, Tenant shall pay such estimated amount to Landlord in
twelve (12) equal monthly installments, in advance, on the first (1st) day
of each calendar month. Within one hundred twenty (120) days after the
end of each calendar year or as soon thereafter as reasonably possible,
Landlord shall furnish to Tenant a statement showing in reasonable detail
the actual Building Operating Expenses, Phase Operating Expenses and
Project Operating Expenses incurred by Landlord for such period and
Tenant's proportionate share thereof in accordance with this Paragraph 3,
and Tenant shall within thirty (30) days thereafter make any payment
necessary to adjust its previous actual payments to the amount shown as
due from Tenant on such annual statement. Any actual overpayment by
Tenant shall be credited against installments of Additional Rent next
coming due from Tenant under this Paragraph 3. Nothing contained in this
Paragraph 3(e) shall be construed to limit the right of Landlord from time
to time during any calendar year to revise its estimates of the Operating
Expenses which are the subject of this Paragraph and to reflect such
revision by prospective adjustments in xxxxxxxx to Tenant for Tenant's
monthly installments payable under this Paragraph over the remainder of
such year. Tenant's share of such Operating Expenses for any partial year
during the Term shall be that proportion of Tenant's Building Share of
Building Operating Expenses, Tenant's Phase Share of Phase Operating
Expenses and Tenant's Project Share of Project Operating Expenses for the
full year which is the same proportion as the number of days in such
partial year is to three hundred sixty-five (365).
(f) ADJUSTMENT TO OPERATING EXPENSES. Notwithstanding anything to
the contrary contained in this Paragraph 3, as to each specific category
of Operating Expense which one or more tenants of the Building either pays
directly to third parties or specifically reimburses to Landlord (for
example, separately contracted janitorial services or property taxes
directly reimbursed to Landlord), then, on a category by category basis,
the amount of Operating Expenses for the affected period shall be adjusted
as follows: (1) all such tenant payments with respect to such category of
expense and all of Landlord's costs reimbursed thereby shall be excluded
from Operating Expenses and Tenant's Building Share, Tenant's Phase Share
or Tenant's Project Share, as the case may be, for such category of
Operating Expense shall be adjusted by excluding the square footage of all
such tenants, and (2) if Tenant pays or directly reimburses Landlord for
such category of Operating Expense, such category of Operating Expense
shall be excluded from the determination of Operating Expenses for the
purposes of this Lease.
(g) EXCLUSIONS FROM OPERATING EXPENSES. Notwithstanding anything
to the contrary in this Xxxxxxxxx 0, Xxxxxxxx and Tenant agree that
Operating Expenses shall not include: (1) depreciation on the Building,
Tenant's Phase or the Project; (2) costs incurred in renovating or
improving vacant space or space for other tenants of the Project; (3)
finders' fee and real estate brokers' commissions; (4) ground lease
payments or mortgage principal or interest except to the extent to pay
financed capital expenditures included in Operating Expenses pursuant to
Paragraph 3(c)(18); (5) repairs due to casualty or condemnation and
reimbursed by net proceeds of insurance coverage; (6) any cost due to
Landlord's breach of this Lease in excess of the cost which would be
includable in Operating Expenses if Landlord had not breached this Lease;
(7) penalties imposed on Landlord due to Landlord's failure to comply with
a law, ordinance or regulation applicable to the Building, Tenant's Phase
or the Project; (8) attorneys' fees and other costs and expenses incurred
in connection with disputes with other tenants of the Project or
associated with the enforcement of any lease for space at the Project
other than Tenant's, or the defense of Landlord's title to or interest in
the Building; (9) costs incurred to clean up, contain, remove or otherwise
remediate Hazardous Materials (defined in Paragraph 9(b) below)
contamination, if any, present in the Project prior to the Commencement
Date; or (10) the cost of repairs, alterations or replacements needed to
correct any defects in the original design, materials or workmanship of
the Building, Tenant's Phase or the Project.
SECURITY DEPOSIT
PARAGRAPH 4
Tenant has paid or, upon execution of this Lease, will pay Landlord
the sum set forth in Item 9 of the Basic Lease Provisions (the "Security
Deposit") as security for the performance of the terms of this Lease by
Tenant. Landlord shall not be required to keep the Security Deposit
separate from its general funds, and Tenant shall not be entitled to
interest thereon. If Tenant defaults with respect to any provision of
this Lease, including, without limitation, the provisions relating to the
payment of rent or the condition of the Premises upon the termination of
this Lease, Landlord may, but shall not be required to, use, apply or
retain all or any part of the Security Deposit for the payment of any rent
or other sum in default 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, including, without limitation, costs and attorneys'
fees incurred by Landlord to recover possession of the Premises following
a default by Tenant hereunder. If any portion of the Security Deposit is
so used or applied, Tenant shall, within ten (10) days following
Landlord's 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 within ten (10) days following Landlord's
demand, shall constitute a default hereunder by Tenant. If Tenant shall
fully and faithfully perform every provision of this Lease to be performed
by it, the Security Deposit or any balance thereof shall be returned,
without interest, to Tenant (or, at Landlord's option, to the last
assignee of Tenant's interest hereunder) within a reasonable time after
the expiration of the Term and surrender of possession of the Premises to
Landlord.
SUBSTITUTED PREMISES
PARAGRAPH 5 [Intentionally Omitted]
REPAIRS
PARAGRAPH 6
(a) LANDLORD'S REPAIRS. Subject to Paragraph 6(b), Landlord shall
maintain the structural portions of the Building, the roof, exterior walls
and exterior doors, foundation, and underslab standard sewer system of the
Building in good, clean and safe condition. Notwithstanding the
foregoing, Landlord shall have no responsibility to repair the Building's
heating, ventilation and air conditioning equipment, and all such repairs
shall be performed by Tenant pursuant to the terms of Paragraph 6(b)
below. Landlord shall also maintain the landscaping, parking facilities
and other common areas of the Project. Except as provided in Paragraphs
13 and 14, there shall be no abatement of rent, no allowance to Tenant for
diminution of rental value and no liability of Landlord by reason of
inconvenience, annoyance or any injury to or interference with Tenant's
business arising from the making of or the failure to make any repairs,
alterations or improvements in or to any portion of the Project or in or
to any fixtures, appurtenances or equipment therein. Tenant waives the
right to make repairs at Landlord's expense under any law, statute or
ordinance now or hereafter in effect.
(b) TENANT'S REPAIRS. Tenant shall, at Tenant's sole cost and
expense: (i) make all repairs to the Premises and fixtures therein which
Landlord is not required to make pursuant to Paragraph 6(a) above,
including, without limitation, repairs to the interior walls, ceilings and
windows of the Premises, the interior doors, Tenant's signage, and the
electrical, life-safety, plumbing and heating, ventilation and air
conditioning ("HVAC") systems located within or serving the Premises; (ii)
use reasonable efforts, through a program of regularly scheduled
preventive maintenance approved by Landlord, to keep the HVAC equipment
serving the Premises in reasonably good order and condition; and (iii)
maintain the Premises, the fixtures and utilities systems therein, and the
area immediately surrounding the Premises (including all garbage
enclosures), in a good, clean and safe condition. Tenant shall deliver to
Landlord a copy of any maintenance contract entered into by Tenant with
respect to the Premises. Tenant shall also, at Tenant's expense, keep any
non-standard heating, ventilating and air conditioning equipment and other
non-standard equipment in the Building in good condition and repair, using
contractors approved in advance, in writing, by Landlord. Notwithstanding
Paragraph 6(a) above, Tenant will pay for any repairs to the Building or
the Project which are caused by any negligence or carelessness of Tenant
or its assignees, subtenants or employees, or of the respective agents of
any of the foregoing persons, or of any other persons permitted in the
Building or elsewhere in the Project by Tenant or any of them. Tenant
will maintain the Premises, and will leave the Premises upon termination
of this Lease, in a safe, clean, neat and sanitary condition.
IMPROVEMENTS AND ALTERATIONS
PARAGRAPH 7
(a) COMMON AREA. Landlord shall have the right at any time to
change the arrangement and location of the common area of the Building or
the Project and, upon giving Tenant reasonable notice thereof, to change
any name, number or designation by which the Premises, the Building, the
Phase or the Project is commonly known.
(b) ALTERATIONS.
(1) Except for Minor Alterations (as defined in Paragraph
7(b)(3) below), Tenant shall not make any alterations, additions, or
improvements of or to the Premises without the prior written consent of
Landlord, which Landlord may give or deny in its sole and absolute
discretion. At the time such consent is requested, Tenant shall furnish
to Landlord for Landlord's written approval (which shall not be
unreasonably withheld) the names of Tenant's architect, Tenant's
contractor(s) and all subcontractors who will be supplying materials or
performing work in connection with such alterations, additions and
improvements, a copy of all plans for the proposed work, an estimate of
the cost thereof and such other information as shall be requested by
Landlord substantiating Tenant's ability to pay for such work. No less
than ten (10) days prior to the commencement of any alterations, additions
and improvements of or to the Premises, Tenant shall deliver to Landlord
certificates of insurance from the carrier(s) providing insurance to
Tenant's architect and Tenant's contractor(s) evidencing the following
types of coverage in such amounts as are reasonably determined by Landlord
to be necessary: (i) professional liability insurance; (ii) commercial
general liability insurance; (iii) business automobile liability
insurance; (iv) workers' compensation insurance; and (v) umbrella
liability insurance. The insurance specified in (i), (ii), (iii) and (v)
above shall name Landlord as an additional insured, and all such policies
shall provide that thirty (30) days' written notice must be given to
Landlord prior to termination or cancellation. Landlord, at its sole
option, may require as a condition to the granting of such consent to any
work costing in excess of $25,000, that Tenant provide to Landlord, at
Tenant's sole cost and expense, a lien and completion bond in an amount
equal to one and one-half (1-1/2) times any and all estimated costs of the
proposed work, to insure Landlord against any liability for mechanics' and
materialmen's liens and to insure completion of the work. Landlord may
also require as a condition to Landlord's consent to any alterations,
additions or improvements pursuant to this Paragraph 7(b) that, following
completion of any such alterations, additions or improvements, Tenant
shall provide Landlord with unconditional waivers of lien in statutory
form from all parties performing labor and/or supplying equipment and/or
materials in connection with such alterations, additions or improvements,
including Tenant's architect(s). Before commencing any work, Tenant shall
give Landlord at least ten (10) days written notice of the proposed
commencement of such work in order to give Landlord an opportunity to
prepare, post and record such notice as may be permitted by law to protect
Landlord's interest in the Premises and the Building from mechanics' and
materialmen's liens. Within a reasonable period following completion of
any work, Tenant shall furnish to Landlord, at Tenant's cost, "as built"
plans showing the changes made to the Premises including one (1) complete
set of reproducible drawings for the entire Premises (including, but not
limited to, a floor plan, HVAC, plumbing, electrical and reflected
ceiling), including such alterations, additions or improvements.
(2) All such alterations, additions and improvements shall be
made at Tenant's sole expense (including, without limitation, the
reasonable cost of any review of Tenant's plans by Landlord's architect
and/or Landlord's engineer) and in conformity with plans therefor approved
by Landlord in writing prior to the commencement of such work, and such
work shall be performed by a contractor(s) approved by Landlord. All work
performed by Tenant shall comply with the laws, rules, orders, directions,
regulations and requirements of all governmental entities having
jurisdiction over such work and shall comply with the rules, orders,
directions, regulations and requirements of any nationally recognized
board of insurance underwriters. Tenant shall use all commercially
reasonable efforts (including, without limitation, scheduling overtime and
weekend work) not to interfere with other tenants in the Building and the
Project when performing any alterations, additions or improvements. All
such alterations, additions or improvements (except movable furniture,
furnishings and trade fixtures) shall, at Landlord's option, become the
property of Landlord and shall be surrendered with the Premises, as a part
thereof, at the expiration or earlier termination of the Term. Upon any
termination of this Lease, Tenant shall, upon demand by Landlord and at
Tenant's sole expense, immediately remove any alterations, additions or
improvements installed at the Premises except for the initial Tenant
Improvements approved by Landlord pursuant to the Construction Addendum
and Tenant shall repair and restore the Premises to their original
condition, reasonable wear and tear excepted. Any personal property left
on the Premises at the expiration or other termination of this Lease may,
at the option of Landlord, either be deemed abandoned or be placed in
storage at a public warehouse in the name of and for the account of and at
the expense and risk of Tenant or otherwise disposed of by Landlord in the
manner provided by law; or, alternatively, in the event that Tenant leaves
personal property on the Premises following the expiration or other
termination of this Lease, Landlord may, in Landlord's sole and absolute
discretion, deem Tenant to be holding over pursuant to the terms of
Paragraph 26 below. Tenant expressly releases Landlord of and from any
and all claims and liability for damage to or destruction or loss of
property left by Tenant upon the Premises at the expiration or other
termination of this Lease and, to the extent permitted by then applicable
law, Tenant shall protect, indemnify, defend and hold Landlord harmless
from and against any and all claims and liability with respect thereto.
(3) Notwithstanding any provision of the foregoing to the
contrary, Tenant may make Minor Alterations without Landlord's prior
written consent thereto or approval of Tenant's architect, contractor or
subcontractor, but subject to all other requirements of this Lease
applicable to alterations, additions, improvements or work by or for
Tenant, its assignees or sublessees. For purposes of this Lease, "Minor
Alterations" shall mean alterations, additions or improvements (i)
subsequent to those done pursuant to the Construction Addendum; (ii)
costing less than Fifteen Thousand Dollars ($15,000.00) in any twelve (12)
month period; and (iii) not affecting any structural portions of the
Building, the roof, exterior walls, exterior doors, foundation, HVAC, fire
protection systems, electrical system, or underslab standard sewer system
of the Building.
LIENS
PARAGRAPH 8
Tenant shall keep the Premises free from any liens arising out of
any work performed, materials furnished or obligations incurred by or for
Tenant, its assignees or sublessees. In the event that Tenant shall not,
within ten (10) days following the imposition of any such lien, cause such
lien to be released of record by payment or posting of a proper bond,
Landlord shall have, in addition to all other remedies provided herein and
by law, the right but not the obligation to cause such lien to be released
by such means as Landlord shall deem proper, including payment of or
defense against the claim giving rise to such lien. All sums paid by
Landlord and all expenses incurred by it in connection therewith shall
create automatically an obligation of Tenant to pay an equivalent amount
to Landlord as rent on Landlord's demand therefor, together with interest
at the lesser of eighteen percent (18%) per annum or the maximum rate then
permitted by law until paid to Landlord. Nothing herein shall imply any
consent by Landlord to subject Landlord's estate to liability under any
mechanics' or other lien law.
Tenant shall give Landlord adequate opportunity, and Landlord shall
have the right at all times, to post such notices of nonresponsibility as
are provided for in the mechanics' lien laws of California.
USE OF PREMISES
PARAGRAPH 9
(a) COMPLIANCE WITH LAW. Tenant shall use the Premises only as set
forth in Item 13 of the Basic Lease Provisions and shall not use or permit
the Premises to be used for any other purpose. Tenant shall not use or
occupy the Premises in violation of any law or of the certificate of
occupancy issued for the Building and shall, upon five (5) days' written
notice from Landlord, discontinue any use of the Premises which is
declared by any governmental authority having jurisdiction to be a
violation of law or of such certificate of occupancy. Tenant shall comply
with any direction of any governmental authority having jurisdiction which
shall, by reason of the nature of Tenant's use or occupancy of the
Premises, impose any duty upon Tenant or Landlord with respect to the
Premises or with respect to the use or occupancy thereof. Tenant shall
comply with all covenants, conditions and restrictions affecting the
Project, as such may be amended from time to time, and all articles,
bylaws and rules of the Seaport Centre Owners' Association. Tenant shall
be responsible for obtaining all necessary governmental approvals in
connection with Tenant's use of the Premises. Tenant shall not do or
permit to be done anything which will invalidate, or increase the cost of,
any fire, extended coverage or other insurance policy covering any part of
the Project or any property located thereon. Notwithstanding the
provisions of Paragraph 3 above, Tenant shall, within ten (10) days
following Landlord's demand, reimburse Landlord for the full amount of any
additional premium charged for any such policy by reason of Tenant's
failure to comply with the provisions of this Paragraph 9(a), it being
understood that such demand for reimbursement shall not be Landlord's
exclusive remedy. Tenant shall not in any way obstruct or interfere with
the rights of other tenants or occupants of the Building or the Project,
or injure or annoy them, or use or allow the Premises to be used for any
improper, immoral, unlawful or objectionable purpose; nor shall Tenant
cause, maintain or permit any nuisance in, on or about the Premises or
commit or suffer to be committed any waste in or upon the Premises.
(b) HAZARDOUS MATERIALS. Except as provided in Paragraph 9(b)(1)
below Tenant shall not use, generate, manufacture, produce, store,
release, discharge, or dispose of, on, under or about the Premises or any
part of the Project, or transport to or from the Premises or any part of
the Project, any Hazardous Material (as defined below) or allow its
employees, agents, contractors, licensees, invitees or any other person or
entity to do so.
(1) Notwithstanding the foregoing, Tenant shall be permitted
to use and store in, and transport to and from, the Premises the Hazardous
Materials identified on EXHIBIT D hereto and by this reference
incorporated herein, including wastes generated from the use of such
identified Hazardous Materials ("Permitted Hazardous Materials") so long
as: (a) each of the Permitted Hazardous Materials is used or stored in, or
transported to and from, the Premises only to the extent necessary for
Tenant's operation of its business at the Premises; (b) at no time shall
any Permitted Hazardous Material be on, under or about the Premises in
excess of the quantity specified therefor in EXHIBIT D; and (c) the
conditions set forth in this Paragraph 9(b) are strictly complied with.
If Tenant desires to use, store in, or transport to the Premises Hazardous
Materials other than Permitted Hazardous Materials used by Tenant in the
quantities designated on EXHIBIT D Tenant shall notify Landlord at least
thirty (30) days prior to such proposed use, storage or transportation,
and any such use, storage or transportation of additional Hazardous
Materials (and any related amendment or supplement of EXHIBIT D) shall be
subject to Landlord's prior written consent, which consent may be withheld
in Landlord's sole discretion. The right to use and store in, and
transport to and from, the Premises the Permitted Hazardous Materials is
personal to Advanced Polymer and may not be assigned or otherwise
transferred by Advanced Polymer without the prior written consent of
Landlord, which consent may be withheld in Landlord's sole discretion. Any
consent by Landlord pursuant to Paragraph 15 of this Lease to an
assignment, transfer, subletting, mortgage, pledge, hypothecation or
encumbrance of this Lease, and any interest therein or right or privilege
appurtenant thereto, shall not constitute consent by Landlord to the use
or storage in, or transportation to, the Premises of any Hazardous
Material (including a Permitted Hazardous Material) by any such assignee,
sublessee or transferee unless Landlord expressly agrees otherwise in
writing. Any consent by Landlord to the use or storage in, or
transportation to or from the Premises, of any Hazardous Material
(including a Permitted Hazardous Material) by an assignee, sublessee or
transferee of Tenant shall not constitute a waiver of Landlord's right to
refuse such consent as to any subsequent assignee or transferee.
(2) Tenant shall comply with and shall cause Tenant's
employees, agents, contractors, licensees and invitees (collectively,
"Tenant's Agents") to comply with, and shall keep and maintain the
Premises and cause Tenant's Agents to keep and maintain the Premises, in
compliance with all Environ-mental Laws (as defined below). Neither Tenant
nor Tenant's Agents shall violate, or cause or permit the Premises to be
in violation of, any Environmental Laws.
Tenant shall, at its own expense during Tenant's use or
occupancy, procure, maintain in effect and comply with all conditions of
any and all permits, licenses and other governmental and regulatory
approvals required for Tenant's use of the Premises. Following the
Commencement Date or such earlier date as Tenant takes possession of or
commences use of the Premises for construction of Tenant Improvements or
otherwise, Tenant shall cause any and all Hazardous Materials removed from
the Premises to be removed and transported solely by duly licensed
handlers to duly licensed facilities for final disposal of such materials
and wastes. Tenant acknowledges that the sewer piping at the Project is
made of ABS plastic. Accordingly, without Landlord's prior written
consent, which may be given or withheld in Landlord's sole discretion,
only ordinary domestic sewage is permitted to be put into the drains at
the Premises. UNDER NO CIRCUMSTANCES SHALL TENANT EVER DEPOSIT ANY ESTERS
OR KETONES (USUALLY FOUND IN SOLVENTS TO CLEAN UP PETROLEUM PRODUCTS) IN
THE DRAINS AT THE PREMISES. If Tenant desires to put any substances other
than ordinary domestic sewage into the drains, it shall first submit to
Landlord a complete description of each such substance, including its
chemical composition, and a sample of such substance suitable for
laboratory testing. Landlord shall promptly determine whether or not the
substance can be deposited into the drains and its determination shall be
absolutely binding on Tenant. Upon demand, Tenant shall reimburse Landlord
for expenses incurred by Landlord in making such determination. If any
substances not so approved hereunder are deposited in the drains in
Tenant's Premises, Tenant shall be liable to Landlord for all damages
resulting therefrom, including, but not limited to, all costs and expenses
incurred by Landlord in repairing or replacing the piping so damaged.
Tenant agrees to provide Landlord with: (a) a copy of any
hazardous material management plan or similar document required by any
federal, state or local governmental or regulatory authority to be
submitted by Tenant; (b) copies of all permits, licenses and other
governmental and regulatory approvals with respect to the use of Hazardous
Materials; (c) copies of hazardous waste manifests reflecting the legal
and proper disposal of all Hazardous Materials removed from the Premises;
and (d) copies of all reports, studies and written results of tests or
inspections concerning the Premises or any part of the Project with
respect to Hazardous Materials, including, without limitation, the "Plans"
hereinafter defined (collectively "Documents"). Tenant shall deliver all
Documents to Landlord promptly following the earlier of (i) Tenant's
submission of such Documents to the requesting governmental agency, or
(ii) Tenant's receipt of such Documents (Tenant hereby agreeing that it
shall exercise diligent efforts to expeditiously obtain copies of any such
Documents known by Tenant to exist).
(3) Upon commencing any activity involving Hazardous Materials
on the Premises, and continuing thereafter throughout the term of this
Lease, Tenant shall initiate and maintain the systems set forth in the
following (collectively, "Plans") in order to ensure the routine
monitoring of the levels of Hazardous Materials which may be present on,
under or about the Premises or any part of the Project or properties
adjoining or in the vicinity of the Project as the result of the
activities of Tenant or Tenant's Agents and to ensure continued compliance
with the procedures and regulations concerning the handling, storage, use
and disposal of Hazardous Materials: (a) each permit, license or other
governmental or regulatory approval with respect to the use of Hazardous
Materials, (b) each Hazardous Materials management plan or similar
document required by any federal, state, or local governmental or
regulatory entity, (c) each plan for handling and disposing of Hazardous
Materials necessary to comply with Environmental Laws prepared by or on
behalf of Tenant or Tenant's Agents (whether or not required to be
submitted to a governmental agency). Tenant shall provide Landlord copies
of the foregoing described Plans within five (5) days after each is so
issued or is so required to be prepared or is so required to be submitted
by Tenant to a governmental agency.
(4) Not less often than once each calendar quarter during the
term of this Lease, Tenant shall provide Landlord with a written report
which shall set forth the results of the monitoring of Hazardous Materials
during the previous calendar quarter. Landlord may elect (but shall not be
obligated) to retain an independent consultant experienced in the use and
management of Hazardous Materials for the purpose of reviewing any
information received by Landlord in connection with Hazardous Materials.
Pursuant to such review, Landlord's consultant may make recommendations in
connection with Tenant's control of Hazardous Materials on the Premises,
and Tenant shall implement, at Tenant's sole cost, the recommendations of
Landlord's consultant relating to Tenant's improper use or management of
Hazardous Materials in violation of Environmental Laws. Landlord's
failure to appoint any consultant shall not relieve Tenant of any of
Tenant's obligations under this Lease relating to Hazardous Materials nor
constitute a waiver of Landlord's rights under this Lease.
(5) Landlord may install permanent or other testing xxxxx or
devices at or about the Premises or any part of the Project, and may cause
the ground water to be tested to detect the presence of Hazardous
Materials at least once every twelve (12) months during the term of this
Lease by the use of such xxxxx or devices as are then customarily used for
such purposes. If Tenant so requests in writing, Landlord shall supply
Tenant with a copy of any such test results. The costs of any such tests,
and the installation, maintenance, repair, removal, closure and
replacement of such xxxxx or devices shall be an Operating Expense
pursuant to Paragraph 3 of this Lease; provided, however, such costs shall
be borne solely by Tenant if the same are incurred by Landlord because
Tenant is in breach of its obligations under this Paragraph 9(b) or if,
following the initiation of such testing, the presence of Hazardous
Materials is detected and Tenant or Tenant's Agents are responsible
therefor. Tenant's obligations under this Paragraph 9(b)(5) shall survive
the expiration or earlier termination of this Lease.
(6) Landlord and its representative shall have the right, at
the following times, to enter the Premises and to: (i) conduct any
testing, monitoring and analysis for Hazardous Materials; (ii) review any
documents, materials, inventory, financial data or notices or
correspondence to or from private parties or governmental or regulatory
authorities in connection therewith; and (iii) review all storage, use,
transportation and disposal facilities and procedures associated with the
storage, use, transportation and disposal of Hazardous Materials provided
that Landlord (x) shall comply with all of Tenant's safety procedures, (y)
shall not unreasonably interfere with Tenant's operations and (z) shall
keep confidential any proprietary testing, processes or research of
Tenant of which Tenant has notified Landlord of their confidential and
proprietary status (collectively, "Inspection"):
a. Once every three months for the first twelve (12)
months after the Commencement Date and once every twelve (12) months
thereafter throughout the term of this Lease.
b. At any time during the term of this Lease if, in
Landlord's reasonable judgment, Tenant is breaching its obligation under
this Paragraph 9(b) or is not in compliance with any other provision of
this Lease.
All costs and expenses incurred by Landlord in connection with
any Inspection pursuant to this Paragraph 9(b)(6) shall, subject to
Paragraph 9(b)(15) below, become due and payable by Tenant as Additional
Rent, upon presentation by Landlord of an invoice for up to one such
Inspection every twelve (12) month period and additional Inspections as
follows: (x) if at the time of such Inspection Tenant is not in
compliance with the provisions of this Paragraph 9(b) and (y) in any event
to the extent such expenses are related to Tenant's improper use or
management of Hazardous Materials in violation of Environmental Laws.
(7) Tenant shall give prompt written notice to Landlord of:
a. any proceeding or inquiry by, notice from, or order of
any governmental authority (including, without limitation, the California
State Department of Health Services) with respect to the presence of any
Hazardous Material on, under or about the Premises or any part of the
Project or the migration thereof from or to other property;
b. all claims made or threatened by any third party
against Tenant, the Premises or any part of the Project relating to any
loss or injury resulting from any Hazardous Materials; and
c. any spill, release, discharge or non-routine disposal
of Hazardous Materials that occurs with respect to the Premises or
operations at the Premises by Tenant or Tenant's Agents;
d. all matters of which Tenant is required to give notice
pursuant to Sections 25249.5 ET SEQ. and 25359.7 of the California Health
and Safety Code; and
e. Tenant's discovery of any occurrence or condition on,
under or about the Premises or any part of the Project or any real
property adjoining or in the vicinity of the Premises or the Project that
could cause the Premises or any part of the Project to be subject to any
restrictions on the ownership, occupancy, transferability or use of the
Premises or any part of the Project under any Environmental Law, including
without limitation, Tenant's discovery of any occurrence or condition on
any real property adjoining or in the vicinity of the Premises or the
Project that could cause the Premises or any part of the Project to be
classified as "border zone property" under the provisions of California
Health and Safety Code Sections 25220 ET SEQ. or any regulation adopted in
accordance therewith, or to be otherwise subject to any restrictions on
the ownership, occupancy, transferability or use of the Premises or any
part of the Project under any Environmental Law.
(8) Landlord shall have the right to join and participate in,
as a party if it so elects, any legal proceedings or actions affecting the
Premises or any part of the Project initiated in connection with any
Environmental Law and have its attorneys' fees in connection therewith
paid by Tenant to the extent such fees relate to (w) the violation by
Tenant of Environmental Laws, or (x) any third party's allegation of such
violation, or (y) any third party's allegation regarding emergency
response, clean-up or remediation or right of contribution under any
Environmental Laws or any third party's allegation of bodily injury
arising from any alleged Release as defined in Paragraph 9(b)(9) below.
In addition, Tenant shall not take any remedial action in response to the
presence of any Hazardous Materials in, under, or about the Premises or
the Project (except in the case where loss of life or substantial property
damage is imminent or immediate action is required by any governmental
entity, in which event Tenant shall take immediate remedial action), nor
enter into any settlement agreement, consent decree or other compromise in
respect to any claims relating to any Hazardous Materials in any way
connected with the Premises or the Project, without first notifying
Landlord of Tenant's intention to do so and affording Landlord ample
opportunity to appear, intervene or otherwise appropriately assert and
protect Landlord's interest with respect thereto.
(9) To the fullest extent permitted by law, Tenant shall
protect, defend, indemnify and hold harmless Landlord, its directors,
officers, partners, employees, agents, successors and assigns from and
against any and all claims, fines, judgments, penalties, losses, damages,
costs, expenses or liability (including attorneys' fees and costs)
directly or indirectly arising out of or attributable to a Release
(defined below), but only to the extent of such activities of Tenant or
Tenant's Agents, including, without limitation: (a) all foreseeable
consequential damages, including, without limitation, loss of rental
income and diminution in property value; (b) the costs of any
investigation, monitoring, removal, restoration, abatement, repair,
cleanup, detoxification or other ameliorative work of any kind or nature
(collectively "Remedial Work") and the preparation and implementation of
any closure, remedial or other required plans; (c) any injury to or death
of persons or damage to or destruction of property; and (d) any failure of
Tenant or Tenant's Agents to observe the foregoing covenants. For
purposes of this Paragraph 9(b)(9), "Release" means the use, generation,
manufacture, production, storage, release, threatened release, discharge,
disposal, transportation to or from, or presence of any Hazardous Material
on, in or under the Premises or any part of the Project resulting from the
acts or omissions of Tenant or Tenant's Agents at the Premises or Project
during the period of use or occupancy of the Premises by Tenant or
Tenant's Agents. For purposes of this Paragraph 9(b)(9), any acts or
omissions of Tenant or Tenant's Agents (whether or not they are negligent,
intentional, willful or unlawful) shall be strictly attributable to
Tenant. Tenant's obligations under this Paragraph 9(b)(9) shall survive
the expiration or earlier termination of this Lease.
In no event shall Landlord be responsible to Tenant for the
presence of Hazardous Materials in, on or about the Premises or the
Project to the extent caused or contributed to by any third party.
Tenant shall have no liability for any and all claims,
judgments, damages, penalties, fines, liabilities, losses (including,
without limitation, diminution in value of the Premises, the Building, the
Project, or any portion of any of the foregoing, damages for the loss of
or restriction on the use of rentable or usable space), suits,
administrative proceedings and costs (including, but not limited to,
attorneys' and consultant fees and court costs) (i) arising at any time
prior to the term of this Lease in connection with or related to, directly
or indirectly, the use, presence, transportation, storage, disposal,
migration, removal, spill, release or discharge of Hazardous Materials on,
in or under the Premises, the Building, the Project or in any Common Areas
or parking lots (to the extent such areas are not considered part of the
Premises) or (ii) arising during the term of this Lease in connection with
or related to, directly or indirectly, the use, presence, transportation,
storage, disposal, migration, removal, spill, release or discharge of
Hazardous Materials on, in or under the Premises, the Building, the
Project or in any Common Areas or parking lots (to the extent such areas
are not considered part of the Premises) as a result (directly or
indirectly) of the intentional or negligent acts or omissions of Landlord
or any other tenants at the Project; provided, however, that the foregoing
does not relieve Tenant of (or diminish) Tenant's obligation to pay
Tenant's proportionate share(s) of all costs and expenses includable in
Operating Expenses pursuant to Paragraph 3(c)(17).
(10) Within ninety (90) days following the end of Tenant's
fiscal year, Tenant shall provide Landlord with financial statements
prepared in accordance with generally accepted accounting principles
consistently applied and certified as true and correct by Tenant's
independent certified public accountant setting forth Tenant's performance
for the applicable fiscal year. As of the execution of this Lease,
Tenant's fiscal year ends December 31. Tenant shall provide Landlord with
prompt written notice of any change in Tenant's fiscal year. If at any
time it reasonably appears to Landlord that Tenant is not maintaining
sufficient insurance or is not otherwise financially capable of fulfilling
its obligations under this Paragraph 9(b), whether or not such obligations
have accrued, become liquidated, conditional or contingent, Tenant shall
procure and thereafter maintain in full force and effect such insurance or
other form of financial assurance, with or from companies or persons and
in forms reasonably acceptable to Landlord, as Landlord may from time to
time request.
(11) Upon any Release (as defined above in Paragraph 9(b)(9)),
Tenant shall, subject to Paragraph 9(b)(8), promptly notify Landlord of
the Release and shall, at its sole expense and immediately after demand by
Landlord, commence to perform and thereafter diligently prosecute to
completion such Remedial Work as is necessary to restore the Premises,
Project or any other property affected by the Release to the condition
existing prior to the use of any Hazardous Materials. All such Remedial
Work shall be performed: (a) in conformance with the requirements of all
applicable Environmental Laws; (b) by one or more contractors, approved in
advance in writing by Landlord; and (c) under the supervision of a
consulting engineer approved in advance in writing by Landlord. All costs
and expenses of such Remedial Work shall be paid by Tenant including,
without limita-tion, the charges of such contractor(s) and/or the
consulting engineer and Landlord's reasonable attorneys' fees and costs
incurred in connection with the monitoring or review of such Remedial
Work. In the event Tenant shall fail to timely commence, or cause to be
commenced, or fail to diligently prosecute to completion, such Remedial
Work, Landlord may, but shall not be required to, cause such Remedial Work
to be performed and all costs and expenses thereof, or incurred in
connection therewith, shall become immediately due and payable by Tenant.
Tenant's obligations under this Paragraph 9(b)(11) shall survive the
expiration or sooner termination of this Lease.
(12) "Hazardous Materials" shall include, without limitation,
(i) those substances included within the definitions of "hazardous
substances," "hazardous materials," "toxic substances" or "solid waste"
under all present and future federal, state and local laws (whether under
common law, statute, rule, regulation or otherwise) relating to the
protection of human health or the environment, including, without
limitation, California Senate Xxxx 245 (Statutes of 1987, Chapter 1302),
the Safe Drinking Water and Toxic Enforcement Act of 1986 (commonly known
as Proposition 65) and the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section 9601
ET SEQ., the Resource Conservation and Recovery Act of 1976, 42 U.S.C.
Section 6901 ET SEQ., and the Hazardous Materials Transportation Act, 49
U.S.C. Sections 1801, ET SEQ., all as heretofore and hereafter amended, or
in any regulations promulgated pursuant to said laws; (ii) those
substances defined as "hazardous wastes" in Section 25117 of the
California Health & Safety Code or as "hazardous substances" in Section
25316 of the California Health & Safety Code, or in any regulations
promulgated pursuant to said laws; (iii) those substances listed in the
United States Department of Transportation Table (49 CFR 172.101 and
amendments thereto) or designated by the Environmental Protection Agency
(or any successor agency) as hazardous substances (SEE, E.G., 40 CFR Part
302 and amendments thereto); (iv) such other substances, materials and
wastes which are or become regulated under applicable local, state or
federal law or by the United States government or which are or become
classified as hazardous or toxic under federal, state or local laws or
regulations, including, without limitation, California Health & Safety
Code, Division 20, and Title 26 of the California Code of Regulations; and
(v) any material, waste or substance which contains petroleum, asbestos or
polychlorinated biphenyls, is designated as a "hazardous substance"
pursuant to Section 311 of the Clean Water Act of 1977, 33 U.S.C. Sections
1251, ET SEQ. (33 U.S.C. ss. 1321) or listed pursuant to Section 307 of
the Clean Water Act of 1977 (33 U.S.C. ss. 1317) or contains any
flammable, explosive or radioactive material.
(13) "Environmental Laws" shall mean any federal, state or
local law, statute, ordinance, or regulation now in effect or hereafter
enacted pertaining to health, industrial hygiene, or the environmental
conditions on, under or about the Premises or any part of the Project,
including without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980 ("CERCLA") as amended, 42 U.S.C.
section 9601 ET SEQ, and the Resource Conservation and Recovery Act of
1976 ("RCRA"), 42 U.S.C. sections 6901 ET SEQ.
(14) In addition to Tenant's obligations pursuant to Paragraph
27(b) of this Lease, Tenant shall, on the expiration or sooner termination
of this Lease, surrender the Premises to Landlord free of Hazardous
Materials used, generated, manufactured, produced, stored, released,
discharged or disposed on, in or under the Premises, or transported to or
from the Premises, resulting from the acts or omissions of Tenant or
Tenant's Agents at the Premises or Project during the period of use or
occupancy of the Premises by Tenant or Tenant's Agents. If Tenant fails
to so surrender the Premises and the Project, the provisions of Paragraph
9(b)(9) shall apply. Landlord shall have the right, but not the
obligation, to appoint a consultant, at Tenant's expense, to conduct an
investigation to determine whether any Hazardous Materials are located in
or about the Premises or the Project, and to determine the corrective
measures required to remove such Hazardous Materials. Tenant, at its
expense, shall comply with all recommendations of the consultant. A
failure by Landlord to appoint such a consultant shall in no way relieve
Tenant of any of Tenant's obligations set forth in this Lease relating to
Hazardous Materials, nor constitute a waiver of Landlord's rights under
this Lease. Tenant's obligations under this Paragraph 9(b)(14) shall
survive the expiration or earlier termination of this Lease.
(15) Except as otherwise provided in Paragraphs 9(b)(4)
(concerning the implementation of consultant recommendations) and 9(b)(11)
(concerning the monitoring and review of Remedial Work), all costs
incurred by Landlord in retaining a consultant for any purpose contained
in this Paragraph 9(b) shall be an Operating Expense under Paragraph 3 of
this Lease unless Landlord retains a consultant pursuant to this Paragraph
9(b) and such consultant reasonably determines after appropriate review of
information and/or inspection that Tenant is breaching its obligations
under this Lease to comply with this Paragraph 9(b), in which event to the
extent that the costs and expenses incurred by Landlord in connection with
any such review, inspection, and/or implementation of recommendations
pursuant to this Paragraph 9(b) relate to the Premises or to Tenant's
breach, such costs and expenses shall become due and payable by Tenant as
Additional Rent, upon presentation by Landlord of an invoice therefor.
(16) Upon any violation of any of the foregoing covenants,
Landlord shall be entitled to exercise all remedies available to a
landlord against a defaulting tenant, including but not limited to those
set forth in Paragraph 25(b) of this Lease. Without limiting the
generality of the foregoing, Tenant expressly agrees that upon any such
violation Landlord may, at its option (i) immediately terminate this
Lease, or (ii) continue this Lease in effect until compliance by Tenant
with its clean-up and removal covenant (notwithstanding the expiration of
the Term). No action by Landlord hereunder shall impair the obligations
of Tenant pursuant to this Paragraph 9(b).
(c) ADA. Tenant acknowledges that the Americans with Disabilities
Act of 1990 (as amended and as supplemented by further laws from time to
time, the "ADA") imposes certain requirements upon the owners, lessees and
operators of commercial facilities and places of public accommodation,
including, without limitation, prohibitions on discrimination against any
individual on the basis of disability. Accordingly, but without limiting
the generality of and in addition to all other requirements under this
Lease, Tenant agrees to take all proper and necessary action to cause the
Premises to be maintained, used and occupied in compliance with the ADA
and, further, to otherwise assume all responsibility to ensure the
Premises' continued compliance with all provisions of the ADA throughout
the Term.
UTILITIES AND SERVICES
PARAGRAPH 10
(a) PAYMENT BY TENANT. Tenant shall be responsible for and shall
pay promptly all charges for gas, electricity, sewer, heat, light, power,
telephone, refuse pickup (to be performed on a regularly scheduled basis
so that accumulated refuse does not exceed the capacity of Tenant's refuse
bins), janitorial service and all other utilities, materials and services
furnished directly to or used by Tenant in, on or about the Premises,
together with all taxes thereon. Tenant shall contract directly with the
providing companies for such utilities and services.
(b) NO ABATEMENT OF RENT. Landlord shall not be liable for, and
Tenant shall not be entitled to, any abatement or reduction of rent by
reason of any failure or interruption of any utility or other service
furnished to the Premises or the Project. No such failure, stoppage, or
interruption of any such utility or service shall constitute an eviction
of Tenant or relieve Tenant of the obligation to perform any covenant or
agreement of this Lease to be performed by Tenant. In the event of any
such failure, stoppage or interruption of the utilities or services to be
supplied by Landlord, Landlord shall use good faith efforts to have
service promptly resumed. Where the cause of any such failure, stoppage
or interruption of such utilities or services is within the control of a
public utility or other public or quasi-public entity outside Landlord's
control, notification to such utility or entity of such failure, stoppage
or interruption and request to remedy the same shall constitute "good
faith efforts" by Landlord to have service promptly resumed.
RULES AND REGULATIONS
PARAGRAPH 11
Tenant agrees to abide by all rules and regulations for use of the
Premises, the Building, the Phase and the Project imposed by Landlord, as
the same may be revised from time to time, including, without limitation,
the following: (a) Tenant shall comply with all of the requirements of
Landlord's emergency response plan, as the same may be amended from time
to time; and (b) Tenant shall not place any furniture, furnishings,
fixtures or equipment in the Premises in a manner so as to obstruct the
windows of the Premises to cause the Building, in Landlord's good faith
determination, to appear unsightly from the exterior. Such rules and
regulations are and shall be imposed for the cleanliness, good appearance,
proper maintenance, good order and reasonable use of the Premises, the
Building, the Phase and the Project and as may be necessary for the
enjoyment of the Building and the Project by all tenants and their
clients, customers, and employees. Landlord shall not be liable for the
failure of any tenant or of the agents or employees of any tenant to
conform to such rules and regulations.
TAXES ON TENANT'S PROPERTY
PARAGRAPH 12
Tenant shall be liable for, and shall pay, at least ten (10) days
before delinquency, all taxes, levies and assessments levied against any
personal property or trade fixtures placed by Tenant in or about the
Premises or against the cost or value of any leasehold improvements made
in or to the Premises by or for Tenant regardless of whether title to such
improvements shall be in Tenant or Landlord. If any such tax, levy or
assessment on Tenant's personal property, trade fixtures or leasehold
improvements is levied against Landlord or Landlord's property, or if the
assessed value of the Building or the Project is increased by the
inclusion therein of a value placed upon such personal property, trade
fixtures or leasehold improvements of Tenant and if Landlord pays such
taxes, levies or assessment based upon such increased assessment (which
Landlord shall have the right to do regardless of the validity thereof),
Tenant shall upon demand repay to Landlord the amount of such taxes,
levies or assessments so levied against Landlord, or the proportion of any
taxes, levies or assessments resulting from such increase in assessment.
Tenant shall also be liable for and shall upon demand repay to Landlord
the amount of any rental, excise, sales, transaction privilege or other
tax or levy, however denominated, imposed upon or measured by the rent
reserved hereunder or on Landlord's business of leasing the Premises,
excepting only net income taxes, franchise taxes and estate, inheritance
or gift taxes.
FIRE OR CASUALTY
PARAGRAPH 13
(a) OBLIGATION TO RESTORE. Except as otherwise provided below, in
the event the Premises or access thereto is wholly or partially destroyed
by fire or other casualty covered by the form of fire and extended
coverage insurance maintained by Landlord, Landlord shall rebuild, repair
or restore the Premises and access thereto to substantially the same
condition as when the same were furnished to Tenant, excluding any
improvements installed by Tenant, and this Lease shall continue in full
force and effect, except that rent shall xxxxx during the period which,
and to the extent to which, any portion of the Premises is untenantable
and is not used by Tenant. Notwithstanding the foregoing, in no event
shall Landlord be required to expend more than the amount of insurance
proceeds received by Landlord in respect of any such casualty in
connection with Landlord's restoration of the Premises.
(b) ELECTION NOT TO RESTORE. In the event that the Building is
damaged or destroyed to the extent of more than fifty percent (50%) of its
replacement cost or to the extent of more than twenty-five percent (25%)
of its replacement cost if the damage or destruction occurs during the
last year of the Term or to any extent by a casualty not so covered, or if
the buildings at the Project shall be damaged to the extent of fifty
percent (50%) or more of the replacement value or to any extent by a
casualty not so covered, and regardless of whether or not the Premises be
damaged, Landlord may elect by written notice to Tenant given within
thirty (30) days after the occurrence of the casualty to terminate this
Lease in lieu of so restoring the Premises, in which event this Lease
shall terminate as of the date specified in Landlord's notice, which date
shall be no later than sixty (60) days following the date of Landlord's
notice.
(c) RESTORATION. Upon the occurrence of a casualty as to which
Landlord does not elect to terminate this Lease, Landlord shall, within
thirty (30) days after the date of such casualty, or as soon thereafter as
reasonably possible, notify Tenant in writing of the time estimated by
Landlord to repair or restore the damage caused by such casualty. If
Landlord's estimated time to complete such restoration is more than twelve
(12) months from the date of the occurrence and such damage or destruction
materially adversely interferes with Tenant's use of the Premises, Tenant
may elect to terminate this Lease by written notice to Landlord given
within fifteen (15) days after receipt of Landlord's estimate. If Tenant
has the right to terminate this Lease and timely and properly exercises
such right, this Lease shall terminate on the date of Tenant's notice to
Landlord. If Tenant is not entitled to terminate this Lease or if Tenant
is so entitled but fails to do so in time and in the manner herein
specified, Landlord shall repair or restore the Premises as promptly as
practicable and this Lease shall continue in effect. Landlord shall in no
event be obligated to make any repairs or replacement of any items other
than those items installed by and at the expense of Landlord. If the
Premises are rendered totally untenantable, rent shall xxxxx during the
period that the Premises remain untenantable and Tenant does not use the
Premises. However, in no event shall Tenant be entitled to any
compensation or damages for loss of the use of the whole or any part of
the Premises, for damage to Tenant's personal property in or improvements
to the Premises or for any inconvenience or annoyance occasioned by any
such destruction, rebuilding or restoration of the Premises or the
Building or access thereto. Tenant waives the provisions of California
Civil Code Sections 1932(2) and 1933(4) and any present or future laws or
case decisions to the same effect.
(d) Landlord, in repairing the Building and the Premises, shall
repair any damage to the Building itself, including any damage to the
shell of the Premises as existing as of the date hereof, and Tenant shall
pay the cost of repairing or replacing the Tenant Improvements in the
Premises equal to the value of the Tenant Improvements existing
immediately prior to the occurrence of any damage, and with the same kind
and quality of Tenant Improvements or such other Tenant Improvements for
which Tenant obtains Landlord's prior written approval, and Tenant shall
repair or replace all of Tenant's trade fixtures, furnishings, equipment
and other personal property. Landlord shall not be required to repair any
injury or damage to the personal property of Tenant, or to make any
repairs to or replacement of any alterations, additions, improvements or
fixtures installed on the Premises by or for Tenant.
EMINENT DOMAIN
PARAGRAPH 14
(a) TERMINATION OF LEASE. In case the whole of the Premises, or
such part thereof as shall substantially interfere with Tenant's use and
occupancy thereof, shall be taken by any lawful power or authority by
exercise of the right of eminent domain, or shall be sold to prevent such
taking, either Tenant or Landlord may terminate this Lease effective as of
the date possession is required to be surrendered to such authority. If
at least fifty percent (50%) of the leasable area of Tenant's Phase, or
twenty-five percent (25%) of the leasable area of the Project, is taken by
any lawful power or authority by exercise of the right of eminent domain,
or shall be sold to prevent such taking, Landlord may terminate this Lease
effective as of the date possession is required to be surrendered to such
authority. Landlord may, without any obligation to Tenant, agree to sell
or convey to the taking authority the Premises, the Building, Tenant's
Phase, the Project or any portion thereof sought by the taking authority,
free from this Lease and the right of Tenant hereunder, without first
requiring that any action or proceeding be instituted or, if instituted,
pursued to a judgment.
(b) PARTIAL TAKING. In the event the amount of property or the
type of estate taken shall not substantially interfere with Tenant's use
of the Premises, and neither Landlord nor Tenant shall have terminated
this Lease pursuant to Paragraph 14(a) above, then Landlord shall promptly
restore the Premises to substantially their condition prior to such
partial taking and this Lease shall continue in full force and effect
except that a proportionate allowance shall be made to Tenant for the rent
corresponding to the time during which, and to the part of the Premises of
which, Tenant shall be deprived on account of such taking and restoration.
(c) AWARDS. Except as expressly provided herein, Tenant shall not
because of any taking of all or any portion of the Premises assert any
claim against Landlord or the taking authority for any compensation
because of such taking, and Landlord shall be entitled to receive the
entire amount of any award therefor without deduction for any estate or
interest of Tenant. Nothing contained in this subparagraph, however,
shall be deemed to give Landlord any interest in, or prevent Tenant from
seeking any award against the taking authority independent of Landlord,
and without in any manner interfering with or reducing any claim of
Landlord against the taking authority for, the taking of personal property
and fixtures belonging to Tenant or for relocation or business
interruption expenses recoverable from the taking authority.
ASSIGNMENT AND SUBLETTING
PARAGRAPH 15
(a) LANDLORD'S CONSENT. Tenant shall not voluntarily or
involuntarily assign, sublet, mortgage or otherwise transfer or encumber
all or any portion of its interest in this Lease or in the Premises or
permit the use of the Premises by any party other than Tenant without
obtaining the prior written consent of Landlord, which consent shall not
be unreasonably withheld. Any such attempted assignment, subletting,
mortgaging, transfer or other encumbering without such consent shall be
null and void and of no effect. Without limiting the generality of the
foregoing, it shall be reasonable for Landlord to deny any proposed
assignment or sublease if (1) the use to be made of the Premises by the
proposed assignee or subtenant is not generally consistent with the
character and nature of all other tenancies in the Project, or (2) the
proposed assignee or subtenant uses Hazardous Materials, or (3) the
character, reputation or financial responsibility of the proposed assignee
or subtenant is not satisfactory to Landlord or in any event is not at
least equal to that which was possessed by Tenant as of the date of
execution of this Lease, or (4) the proposed assignee or subtenant is an
existing tenant in the Project or is negotiating with Landlord or
Landlord's representative, or the owner (or the owner's representative) of
any other Phase of the Project, to lease space at the Project, or (5)
Tenant is in default hereunder, or a condition exists which, with the
passage of time or the giving of notice or both, would constitute such a
default.
(b) NO RELIEF. No permitted assignment, subletting, mortgaging or
other encumbering of Tenant's interest in this Lease shall relieve Tenant
of its obligation to pay the rent and to perform all of the other
obligations to be performed by Tenant hereunder. The acceptance of rent
by Landlord from any person other than Tenant shall not be deemed to be a
waiver by Landlord of any provision of this Lease or to be a consent to
any subletting, assignment, mortgaging or other encumbering of the
Premises. Consent to an assignment, sublease, mortgage or other
encumbrance shall not be deemed to constitute consent to any subsequent
attempted assignment, sublease, mortgage or other encumbrance.
(c) NOTICE TO LANDLORD. If Tenant desires at any time to assign
this Lease or to sublet the Premises or any portion thereof, it shall
first notify Landlord of its desire to do so and shall submit in writing
to Landlord (1) the name of the proposed subtenant or assignee, (2) the
nature of the proposed subtenant's or assignee's business to be carried on
in the Premises, (3) copies of all applicable documentation in connection
with the proposed sublease or assignment, and (4) such financial and other
information as Landlord may reasonably request concerning the proposed
subtenant or assignee.
(d) CONDITION TO CONSENT. As a condition to Landlord's consent to
such assignment or subletting, if the net aggregate rental paid or given
by any sublessee or assignee exceeds, on a square foot basis, the amount
per square foot payable by Tenant to Landlord for the Premises, then
Tenant shall pay to Landlord as additional rental hereunder, monthly as
received, fifty percent (50%) of such excess rental. Net aggregate rental
as used herein shall mean gross rental and additional consideration of any
kind or type received by Tenant with respect to the subleased or assigned
premises, less the following actual and documented out-of-pocket costs
incurred by Tenant (amortized, in the case of a sublease, over the term of
said sublease, on a straight line basis): Tenant's actual costs of any
commercially reasonable commission paid by Tenant to a broker independent
of Tenant in connection with such sublease or assignment, reasonable legal
fees in processing such assignment or subletting, reasonable advertising
costs and commercially reasonable costs to remodel or renovate the area
subject to such subletting or assignment. "Sublet" and "sublease" shall
include a sublease as to which Tenant is sublessor and any sub-sublease or
other sub-subtenancy, irrespective of the number of tenancies and tenancy
levels between the ultimate occupant and Landlord, as to which Tenant
receives any consideration. Tenant shall require on any sublease which it
executes that Tenant receive all profit from all sub-subtenancies,
irrespective of the number of levels thereof. Any rent or other
consideration which is to be passed through to Landlord by Tenant pursuant
to this Paragraph 15(d) shall be paid to Landlord promptly upon receipt by
Tenant and shall be paid in cash, irrespective of the form in which
received by Tenant from any subtenant or assignee. In the event that any
rent or other consideration received by Tenant from a subtenant or
assignee is in a form other than cash, Tenant shall pay to Landlord in
cash the fair value of such consideration.
(e) LANDLORD'S ELECTION. At any time within thirty (30) days after
Landlord's receipt of the information specified in Paragraph 15(c) above,
Landlord may by written notice to Tenant elect to (1) consent to the
proposed sublease or assignment; (2) sublease the Premises or the portion
thereof so proposed to be subleased by Tenant or take an assignment of
Tenant's leasehold estate hereunder or such part thereof as shall be
specified in such notice to Landlord, in each case upon the same terms
stated in this Lease, and concurrently enter into the proposed sublease or
assignment to the proposed subtenant or assignee on the same terms as
those offered by Tenant, as the case may be; or (3) reasonably withhold
its consent to the proposed sublease or assignment.
(f) NO MERGER. The voluntary or other surrender of this Lease by
Tenant or a mutual cancellation hereof shall not work a merger but shall,
at the option of Landlord, either terminate all or any existing subleases
or subtenancies or operate as an assignment to Landlord of such subleases
or subtenancies. If Tenant is a corporation which under the then current
guidelines published by the Commissioner of Corporations of the State of
California, is not deemed to be a public corporation or is an
unincorporated association or partnership, then the transfer, assignment
or hypothecation of any stock or interest in such corporation, association
or partnership in the aggregate in excess of twenty-five percent (25%)
shall be deemed to be an assignment within the meaning and provisions of
this Paragraph 15.
(g) ASSIGNMENT OF RENT. 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 by
this Lease, and Landlord, as assignee and attorney-in-fact for Tenant, or
a receiver for Tenant appointed on Landlord's application, may collect
such rent and apply it toward Tenant's obligation under this Lease; except
that, until the occurrence of an act of default by Tenant, Tenant shall
have the right to collect such rent.
(h) LANDLORD'S COSTS. Tenant agrees to reimburse Landlord for
Landlord's costs and attorneys' fees incurred in conjunction with the
processing and documentation of any requested assignment, subletting,
transfer, change of ownership or hypothecation of this Lease or Tenant's
interest in and to the Premises which is submitted for approval to
Landlord, whether or not Landlord approves the same.
ACCESS
PARAGRAPH 16
Landlord reserves and shall at all times have the right to enter the
Premises upon twenty-four (24) hours notice (except in case of emergency,
when no notice shall be required) to inspect the same, to supply any
service to be provided by Landlord to Tenant hereunder, to submit the
Premises to prospective purchasers or tenants, to post notices of
nonresponsibility, to use and maintain pipes and conduits in and through
the Premises and to alter, improve or repair the Premises or any other
portion of the Building, all without being deemed guilty of an eviction of
Tenant and without abatement of rent provided that Landlord shall not
unreasonably interfere with Tenant's operations and shall comply with all
of Tenant's safety procedures. Landlord may, for the purpose of altering,
improving or repairing the Premises or any other portion of the Building,
erect scaffolding and other necessary structures where reasonably required
by the character of the work to be performed. Landlord shall use
commercially reasonable efforts where practicable to conduct such entries
and activities in a workmanlike manner so as to reasonably minimize
interference with Tenant's ability to conduct its business at the Premises
and Tenant hereby waives any claim for damages for any injury or
inconvenience to or interference with Tenant's business, any loss of
occupancy or quiet enjoyment of the Premises and any other loss occasioned
thereby or arising therefrom. Landlord shall have the right at all times
to have and retain a key with which to unlock all of the doors in, upon
and about the Premises, excluding Tenant's vaults and safes, if any.
Landlord shall have the right to use any and all means which Landlord may
deem proper to open such doors in an emergency in order to obtain entry to
the Premises and any such entry shall not under any circumstances be
construed or deemed to be a forcible or unlawful entry into, or a detainer
of, the Premises or an eviction of Tenant from the Premises or any portion
thereof. No provision of this Paragraph 16 shall be construed as
obligating Landlord to perform any repairs, alterations or decoration not
otherwise expressly required of Landlord under this Lease.
SUBORDINATION; ATTORNMENT; ESTOPPEL CERTIFICATES
PARAGRAPH 17
(a) SUBORDINATION; ATTORNMENT; NONDISTURBANCE; SUPERIORITY.
(1) SUBORDINATION. Subject to the last sentence of this
Paragraph 17(a)(1) and to Paragraph 17(a)(2), this Lease is junior,
subject and subordinate to all declarations of restrictions and all
mortgages, deeds of trust and other security instruments of any kind now
covering the Premises, the Project, or any portion of thereof. Landlord
reserves the right to place liens or encumbrances on the Premises, the
Project, or any part of or interest in any of the foregoing, and, subject
to the last sentence of this Paragraph 17(a), this Lease shall be subject
and subordinate to any such liens or encumbrances now or hereafter imposed
by Landlord without the necessity of the execution and delivery of any
further instruments on the part of Tenant to effectuate such
subordination. Notwithstanding the foregoing, Tenant covenants and agrees
to execute and deliver upon demand such further instruments evidencing any
such subordination of this Lease as may be requested by Landlord. In the
event Tenant fails to so execute any such further instrument within ten
(10) business days after demand therefor, Landlord may execute such
instrument on behalf of Tenant as Tenant's attorney-in-fact (and Tenant
hereby makes, constitutes and irrevocably appoints Landlord as Tenant's
attorney-in-fact and in Tenant's name, place and stead to execute such
instruments) and such failure shall constitute a material breach of this
Lease. In the event of the foreclosure of any such lien or encumbrance,
Tenant shall attorn to the then owner who owns or acquires title to the
Premises or the Project and will recognize such owner as Landlord under
this Lease. Tenant hereby waives any right to terminate this Lease
because of any such foreclosure. Notwithstanding the foregoing, Tenant
agrees that if any holder of a mortgage, deed of trust or other security
instrument covering the Premises or the Project desires this Lease to be
superior to the lien of such mortgage, deed of trust or security
instrument, upon written notice from Landlord or such holder to Tenant
indicating such desire, this Lease shall automatically become superior to
such mortgage, deed of trust or security instrument and Tenant agrees to
execute, promptly upon Landlord's or such holder's demand therefor, such
instruments as Landlord or such holder shall reasonably require confirming
the priority of this Lease, but Tenant's failure to execute such
instrument shall not affect such holder's election to cause this Lease to
be superior to such holder's lien.
(2) NONDISTURBANCE. Notwithstanding any provision of the
Lease to the contrary, provided that: (i) Tenant has executed and
delivered a subordination, nondisturbance and attornment agreement
substantially in the form of EXHIBIT F hereto, with such changes thereto
as any mortgagee, trustee, beneficiary or holder of other security
interest ("Mortgagee") may reasonably require ("Nondisturbance Agreement")
and complies with the provisions thereof, and (ii) Tenant is not in
default under this Lease, no foreclosure, sale pursuant to power of sale
or conveyance by deed in lieu of foreclosure shall affect Tenant's rights
under this Lease, except to the extent provided by such Nondisturbance
Agreement. If Tenant fails to execute and deliver any Nondisturbance
Agreement within fifteen (15) days of a request therefor from Landlord,
Tenant hereby constitutes Landlord as Tenant's attorney-in-fact to execute
and deliver such instrument. Landlord's inability to obtain the signature
of any Mortgagee on any such Nondisturbance Agreement shall not constitute
a default by Landlord under this Lease, but so long as default by Tenant
under this Lease is not the reason for Landlord's inability to obtain such
signature, any such lessor or Mortgagee shall be deemed to have elected
that this Lease be superior to the lease, mortgage or deed of trust in
question, and Tenant shall, at the request of such lessor, mortgagee or
beneficiary (or purchaser at any sale pursuant to the mortgage or deed of
trust), attorn to any such party or enter into a new lease with such party
(as Landlord) for the balance of the Term then remaining hereunder upon
the same terms and conditions as those herein.
(b) ESTOPPEL CERTIFICATES. Tenant shall at any time and from time
to time, upon not less than three (3) days' prior notice from Landlord,
execute, acknowledge and deliver to Landlord a statement in writing
certifying that this Lease is unmodified and in full force and effect (or
if there have been modifications, that this Lease is in full force and
effect as modified and describing the same), the dates through which the
Basic Annual Rent, Additional Rent and all other charges have been paid in
advance, if any, and stating whether or not, to the best knowledge of
Tenant, Landlord is in default in the performance of any covenant,
agreement or condition contained in this Lease and, if so, specifying each
such default. Any such statement delivered pursuant to this Paragraph
17(b) may be relied upon by any prospective purchaser or encumbrancer (and
all successors thereof) of any interest of Landlord in or to Tenant's
Phase or the Project and Tenant shall be liable for all loss, cost or
expense resulting from the failure of any sale or funding of any loan
caused by any material misstatement contained in any such statement or
other estoppel certificate supplied to Landlord by Tenant. Tenant's
failure to timely deliver any such statement shall be conclusive upon
Tenant that (1) this Lease is in full force and effect, without
modification except as may be represented by Landlord, (2) there are no
uncured defaults in Landlord's performance, and (3) not more than one
month's Basic Annual Rent has been paid in advance.
SALE BY LANDLORD
PARAGRAPH 18
In the event of a sale or conveyance by Landlord of the Premises,
such transfer shall operate to release Landlord from any and all liability
under this Lease. Subject to the provisions of Paragraph 17 above,
Tenant's right to quiet possession of the Premises shall not, however, be
disturbed on account of such transfer, so long as Tenant shall pay all
rent and observe and perform all provisions of this Lease to be observed
and performed by Tenant, unless this Lease is terminated pursuant to
specific provisions relating to termination contained in this Lease. If
any security deposit has been made by Tenant, Landlord may transfer the
then balance of such deposit to Landlord's transferee in connection with
the sale or conveyance of the Premises, and thereupon Landlord shall be
discharged from any further liability in connection with such deposit.
NON-LIABILITY AND INDEMNIFICATION OF LANDLORD; INSURANCE
PARAGRAPH 19
(a) LANDLORD'S NON-LIABILITY. Except to the extent caused solely
by the gross active negligence or intentional misconduct of Landlord,
Landlord shall not be liable for any injury or damage which may be
sustained by any person or any goods, wares, merchandise or other property
of Tenant, of Tenant's employees, invitees or customers or of any other
person in or about the Premises resulting from any cause whatsoever
(including, without limitation, fire, steam, electricity, gas, water, rain
or dampness which may occur, leak or flow from or into any part of the
Premises or any other place, any breakage, leakage, obstruction or other
defect in the pipes, sprinklers, wires, appliances, plumbing, air
conditioning or lighting fixtures of the Premises, theft, explosion or
falling plaster). In no event shall Landlord be liable for any damage
arising from any act or neglect of any other tenant of the Project or any
of their officers, employees, agents, representatives, customers, visitors
or invitees, for any damage to Tenant's property entrusted to employees of
Landlord or its agents, for any interference with light or other
incorporeal hereditaments or for any damage arising from any latent defect
in the Premises or the Project.
(b) INDEMNIFICATION. To the fullest extent permitted by then
applicable law, Tenant shall protect, indemnify and hold Landlord harmless
from, and defend Landlord against any and all claims, losses, costs,
damages, expenses, or liabilities, including, without limitation,
attorneys' fees and costs of defense, for any bodily injury or property
damage to any person or property whatsoever caused in part or in whole by
the act, neglect, fault or omission of Tenant or its assignees, subtenants
or agents, of the respective servants, employees or invitees of any of the
foregoing persons or of any other persons permitted in the Building or
elsewhere in the Project by Tenant or any of such persons; excluding,
however, such damage to the extent caused solely by the gross active
negligence or intentional misconduct of Landlord. This indemnity shall
not require payment by Landlord as a condition precedent to recovery from
Tenant.
(c) TENANT'S INSURANCE. Tenant hereby agrees to maintain in full
force and effect at all times during the Term and any other period of its
occupancy or possession of the Premises, at its own expense, for the
protection of Tenant and Landlord, as their interests may appear, policies
of insurance which afford the following coverages: (1) Worker's
Compensation and Employer's Liability Insurance to the extent required by
then applicable law, (2) Commercial General Liability Insurance (including
protective liability coverage on operations of independent contractors
engaged in construction, coverage of Tenant's indemnity obligations under
this Lease and blanket contractual liability insurance) on an "occurrence"
basis against claims for "bodily injury" liability, including, without
limitation, bodily injury, death and property damage liability, with a
limit of not less than Three Million Dollars ($3,000,000) in the event of
"bodily injury" to any number of persons or of damages to property arising
out of any single "occurrence," (3) insurance against loss or damage by
fire and such other risks and hazards as are insurable under then
applicable standard forms of "all risk" fire and extended coverage
insurance policies to all of the Tenant Improvements and the personal
property, furniture, furnishings and fixtures belonging to Tenant used or
located in the Premises for not less than one hundred percent (100%) of
the actual replacement value thereof (the proceeds of which insurance, so
long as this Lease remains in effect, shall be used to repair or replace
such Tenant Improvements, personal property, furnishings and fixtures in
the Premises; provided, however, that upon any termination of this Lease
pursuant to Paragraph 13 above, all such proceeds to the extent of one
hundred percent (100%) of the actual replacement value of such Tenant
Improvements shall be the property of Landlord), and (4) business
interruption or loss of income insurance in an amount equal to the Basic
Annual Rent for a period of at least twelve (12) months commencing with
the date of loss (the proceeds of which insurance shall be paid to
Landlord to the extent of any abatement of rent under the Lease, but only
to the extent that Landlord does not otherwise receive net insurance
proceeds for rental loss).
(d) DEDUCTIBLES. Tenant may, with the prior written consent of
Landlord, elect to have reasonable deductibles in connection with the
policies of insurance required to be maintained by Tenant under Paragraph
19(c)(3) above.
(e) CERTIFICATES OF INSURANCE. Tenant shall deliver to Landlord at
least thirty (30) days prior to the time such insurance is first required
to be carried by Tenant, and thereafter at least thirty (30) days prior to
expiration of each such policy, certificates of insurance from the carrier
providing such insurance evidencing the above coverages with limits not
less than those specified above. Such certificates, with the exception of
worker's compensation, shall designate Landlord, each of its partners,
subsidiaries, affiliates, directors, agents and employees, as additional
insureds and shall expressly provide that the interest of such persons
therein shall not be affected by any breach by Tenant of any policy
provision for which such certificates evidence coverage. Further, each
such certificate shall expressly provide that no less than thirty (30)
days' prior written notice shall be given to Landlord in the event of
cancellation of the coverages evidenced by such certificate unless such
cancellation is caused by nonpayment of premiums, in which case Landlord
shall be given not less than ten (10) days prior written notice. The
insurance which Tenant is required to maintain in force and effect under
this Paragraph 19 shall be primary insurance as respects Landlord (and any
other additional insureds designated by Landlord) and not excess over or
contributory with any other available insurance. Certificates of
insurance evidencing the liability insurance coverage required under
Paragraph 19(c)(2) above shall contain an endorsement providing, in
substance, that such insurance as is afforded thereby for the benefit of
Landlord (and any other additional insureds designated by Landlord) shall
be primary and any insurance carried by Landlord (and any other such
additional insureds) shall be excess and not contributory.
(f) INCREASE IN COVERAGE. Upon demand, Tenant shall provide
Landlord, at Tenant's expense, with such increased amounts of existing
insurance and such other coverages and insurance as Landlord may
reasonably require.
(g) NO CO-INSURANCE. If on account of the failure of Tenant to
comply with the provisions of this Paragraph 19, Landlord or any other
person is adjudged a co-insurer by its insurance carrier, then any loss or
damage which Landlord or such other person shall sustain by reason thereof
shall be borne by Tenant and shall be immediately paid by Tenant upon
receipt of a xxxx therefor and evidence of such loss.
(h) INSURANCE LIMITS. Landlord makes no representation that the
limits of liability specified to be carried by Tenant under this Lease are
adequate to protect Tenant against Tenant's undertaking under this Lease.
In the event Tenant believes that any such required coverage is
insufficient, Tenant shall provide, at its own expense, such additional
insurance as Tenant deems adequate. In no event shall the limits of any
coverage maintained by Tenant pursuant to this Paragraph 19 be considered
as limiting Tenant's liability under this Lease.
(i) CONSEQUENTIAL DAMAGES. In no event shall Landlord be liable to
Tenant for any damage by reason of loss of profits, business interruption
or other consequential damage.
(j) GENERAL REQUIREMENTS. All insurance required to be carried by
Tenant hereunder shall be with companies reasonably acceptable to
Landlord. All certificates of insurance delivered by Tenant pursuant to
this Paragraph shall contain liability limits not less than those set
forth herein, shall list all additional insureds and shall specify all
endorsements and special coverages required by this Paragraph. Any
insurance required to be maintained by Tenant may be maintained pursuant
to so-called "blanket" policies of insurance so long as the Premises are
specifically identified therein (by endorsement or otherwise) as included
in the coverage provided and such policies otherwise comply with the
provisions of this Lease. Within ten (10) days after request by Landlord,
Tenant shall deliver to Landlord copies of all polices (and renewals) to
be maintained by Tenant hereunder.
WAIVER OF SUBROGATION
PARAGRAPH 20
(a) Without affecting any other rights or remedies hereunder, at
law or in equity, Landlord and Tenant each hereby waives all rights of
recovery against the other, any other tenant or occupant in the Building
or the Project and all officers, employees, agents, representatives,
customers and business visitors of such persons for loss of or damage to
property at the Project arising from any cause insured against under any
policy of all-risk insurance either required to be carried by such waiving
party pursuant to the provisions of this Lease or actually carried by such
waiving party. The foregoing waiver shall be effective whether or not
such waiving party shall actually obtain and maintain the "all risk"
insurance required pursuant to this Lease. Tenant shall, upon obtaining
the policies of insurance which it is required to maintain under this
Lease, give notice to its insurance carriers that the foregoing waiver of
subrogation is contained in this Lease.
(b) In the event either Landlord or Tenant notifies the other that
an insurer under any policy described in Paragraph 20(a) above has refused
to consent to or permit the waiver of subrogation thereunder in any
fashion or has conditioned the same upon the payment of an additional
premium, then such waiver shall be of no force or effect with respect to
loss or damage covered by such policy during the period commencing five
(5) business days after such other party's receipt of such notice and
continuing until such insurer reinstates such consent; provided, however,
that if such other party elects to reimburse the notifying party for any
required additional premium, the notifying party shall obtain such
insurer's consent.
ATTORNEYS' FEES
PARAGRAPH 21
In the event any party to this Lease brings any suit or other
proceeding with respect to the subject matter or enforcement of this Lease
(including all addenda and exhibits hereto), the prevailing party (as
determined by the court, agency or other authority before which such suit
or proceeding is commenced) shall, in addition to such other relief as may
be awarded, be entitled to recover attorneys' fees, expenses and costs of
investigation as actually incurred (including, without limitation,
attorneys' fees, expenses and costs of investigation incurred in appellate
proceedings or in connection with the enforcement or collection of any
judgment obtained in any suit or other proceeding with respect to the
subject matter or enforcement of this Lease, costs incurred in
establishing any right to indemnification, or in any action or
participation, or in connection with, any case or proceeding under
Chapters 7, 11 or 13 of the Bankruptcy Code, 11 United States Code Section
101 ET SEQ., or any successor statutes). The parties hereto expressly
agree that (i) any attorneys' fees incurred in connection with the
enforcement or collection of any judgment obtained in any suit or other
proceeding with respect to the subject matter or enforcement of this Lease
shall be recoverable as a separate item, (ii) the provisions of this
Paragraph 21 shall survive the entry of any judgment with respect to the
subject matter or enforcement of this Lease, and (iii) the provisions of
this Paragraph 21 will not merge, or be deemed to have merged, into any
such judgment.
WAIVER
PARAGRAPH 22
No waiver by Landlord of any provision of this Lease or of any
breach by Tenant hereunder shall be deemed to be a waiver of any other
provision hereof or of any subsequent breach by Tenant of the same or any
other provision. Landlord's consent to or approval of any act by Tenant
requiring Landlord's consent or approval shall not be deemed to render
unnecessary the obtaining of Landlord's consent to or approval of any
subsequent act of Tenant. No act or thing done by Landlord or Landlord's
agents during the Term, including, without limitation, Tenant's delivery
of the keys to the Premises to any employee or agent of Landlord, shall
operate as or be deemed to be a termination of this Lease, a surrender of
the Premises or an acceptance of a surrender of the Premises unless
expressly stated in a writing signed by Landlord. The acceptance of any
rent by Landlord following a breach of this Lease by Tenant shall not
constitute a waiver by Landlord of such breach or any other breach unless
such waiver is expressly stated in a writing signed by Landlord. The
acceptance of any payment from a debtor-in-possession, a trustee, a
receiver or any other person acting on behalf of Tenant or Tenant's estate
shall not constitute a waiver of or cure a default under Paragraphs 15 or
24 hereof.
NOTICES
PARAGRAPH 23
(a) Any notice required by law to be given by Landlord to Tenant as
a condition to the filing of an action alleging an unlawful detainer of
the Premises, including, without limitation, any three (3) days' notice
under Section 1161(2) or (3) of the California Code of Civil Procedure,
and any service of process made by Landlord in connection with any action
arising out of or related to this Lease or the Premises shall be effective
only if in writing and either sent by registered or certified mail, return
receipt requested, or delivered personally to Tenant either (1) at the
Premises, or (2) at any place where Tenant or any agent or employee of
Tenant may be found.
(b) Except as otherwise expressly provided in this Lease, any
notice, demand, request or other communication not described in (a) above
given or required to be given by Landlord hereunder shall be effective
only if in writing and either sent by registered or certified mail, return
receipt requested, or by recognized overnight courier or delivered
personally to each of the following:
Advanced Polymer Systems
000 Xxxxxxx Xxxxx
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
(c) Except as otherwise expressly provided in this Lease, any
notice, demand, request or other communication given or required to be
given by Tenant hereunder shall be effective only if in writing and either
sent by registered or certified mail, return receipt requested, or by
recognized overnight courier or delivered personally to each of the
following:
(1) METROPOLITAN LIFE INSURANCE COMPANY
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx Xxxxx
Xxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Vice President
(2) METROPOLITAN LIFE INSURANCE COMPANY
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx Xxxxx
Xxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Associate General Counsel
(3) INSIGNIA COMMERCIAL GROUP, INC.
Xxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Property Manager, Seaport Centre
(d) Tenant and Landlord may designate new addresses for notice for
the purposes of (b) or (c) above (however, in no event may any party have
more than four (4) separate designations at any one time) by notice given
to the other in accordance with the provisions of this Paragraph 23.
(e) Any notice hereunder shall be deemed effectively given upon its
delivery or the addressee's refusal to accept delivery as indicated by the
person attempting such personal delivery, by the applicable return
receipt, if sent by registered or certified mail, or by similar advice
from the recognized courier company, as the case may be.
INSOLVENCY OR BANKRUPTCY
PARAGRAPH 24
(a) PRIOR TO TERM. If at any time prior to the date herein fixed
as the commencement of the Term there shall be filed by or against Tenant
in any court pursuant to any statute either of the United States or of any
State a petition in bankruptcy or insolvency or for reorganization or for
the appointment of a receiver or trustee or conservator of all or a
portion of Tenant's property, or if Tenant makes an assignment for the
benefit of creditors (collectively, an "Insolvency Event"), this Lease
shall IPSO FACTO be canceled and terminated and in such event neither
Tenant nor any person claiming through or under Tenant or by virtue of any
statute or by an order of any court shall be entitled to possession of the
Premises and Landlord, in addition to the other rights and remedies given
by Paragraph 25(b) hereof or by virtue of any other provision in this
Lease contained or by virtue of any statute or rule of law, may retain as
damages any rent, security, deposit or moneys received by it from Tenant
or others on behalf of Tenant.
(b) NO ASSIGNMENT. In no event shall this Lease be assigned or
assignable by operation of law and in no event shall this Lease be an
asset of Tenant in any receivership, bankruptcy, insolvency or
reorganization proceeding.
DEFAULT
PARAGRAPH 25
(a) DEFAULT BY TENANT. The occurrence of any of the following
shall constitute a material default and breach of this Lease by Tenant:
(1) Any failure by Tenant to pay rent or to make any other
payment required to be made by Tenant hereunder at the time specified for
payment.
(2) Any abandonment or vacation of the Premises by Tenant
without payment of rent in full.
(3) Any warranty, representation or statement made or
furnished by Tenant to Landlord at any time in connection with this Lease
or any other agreement to which Tenant and Landlord are parties is
determined to have been false or misleading in any material respect when
made or furnished.
(4) Any attempted assignment, sublease, mortgage or
encumbrance in violation of Paragraph 15 above.
(5) The occurrence of any Insolvency Event filed against
Tenant by a third party other than Landlord which is not dismissed within
thirty (30) days after such occurrence or the occurrence of any other
Insolvency Event.
(6) Any failure by Tenant to observe and perform any other
provision of this Lease (or of the addenda attached hereto) to be observed
or performed by Tenant, where such failure continues for fifteen (15) days
(except where a different period is specified in this Lease or in the
addenda) after written notice thereof by Landlord to Tenant; provided,
however, that any such notice shall be in lieu of, and not in addition to,
any notice required under Section 1161 ET SEQ. of the California Code of
Civil Procedure, and provided, further, that if the nature of such default
is such that the same cannot reasonably be cured within such fifteen (15)
day period, Tenant shall not be deemed to be default if Tenant shall
within such period commence such cure and thereafter diligently prosecute
the same to completion; but in no event shall any such cure period exceed
ninety (90) days in the aggregate.
(b) REMEDIES. In the event of any such default by Tenant, then in
addition to all other remedies available to Landlord at law or in equity:
(1) Landlord shall have the immediate option to terminate
this Lease and all rights of Tenant hereunder by giving Tenant written
notice of such intention to terminate, in which event Landlord may recover
from Tenant all of the following: (i) the worth at the time of award of
any unpaid rent which had been earned at the time of such termination;
plus (ii) the worth at the time of award of the amount by which the unpaid
rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss Tenant proves reasonably
could have been avoided; plus (iii) the worth at the time of award of the
amount by which the unpaid rent for the balance of the term after the time
of award exceeds the amount of such rental loss that Tenant proves
reasonably could be avoided; plus (iv) any other amount necessary to
compensate Landlord for all the detriment proximately caused by Tenant's
failure to perform its obligations under this Lease or which in the
ordinary course of things would be likely to result therefrom; plus (v) at
Landlord's election, such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to time by applicable California
law. As used in (i) and (ii) above, the "worth at the time of award"
shall be computed by allowing interest at the rate specified in Paragraph
36(a) below and as used in (iii) above, the "worth at the time of award"
shall be computed by discounting such amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of award plus one
percent (1%).
(2) Landlord shall also have the right, with or without
terminating this Lease, to re-enter the Premises and remove all persons
and property from the Premises. Such property may be removed and stored
in a public warehouse or elsewhere at the cost of and for the account of
Tenant.
(3) In the event Landlord elects to re-enter the Premises
under (2) above or takes possession of the Premises pursuant to any
proceeding or notice provided by law or Tenant vacates or abandons the
Premises, but Landlord does not elect to terminate this Lease as provided
in this Xxxxxxxxx 00, Xxxxxxxx may from time to time without terminating
this Lease either recover from Tenant all rent as it becomes due or relet
the Premises or any part thereof upon such terms and conditions as
Landlord in its sole discretion may deem advisable, with the right of
Landlord to make alterations and repairs to the Premises. In the event of
any such reletting, rental and other charges received by Landlord
therefrom shall be applied in the following order: (i) to the payment of
any indebtedness other than rent due hereunder from Tenant to Landlord,
(ii) to the payment of all costs of such reletting, (iii) to the payment
of the cost of any alterations and repairs to the Premises, and (iv) to
the payment of rent and other charges due and unpaid hereunder. The
residue, if any, shall be held by Landlord and applied in payment of
future rent and other charges due hereunder, as the same may become due.
In the event the rental and other charges received by Landlord from such
reletting are at any time less than the then aggregate of (i) through (iv)
above, Tenant shall pay such deficiency to Landlord immediately upon
demand therefor, but not more often than monthly.
(4) No re-entry or taking possession of the Premises by
Landlord pursuant to this Paragraph 25 shall be construed as an election
to terminate this Lease unless a written notice of such intention shall be
given to Tenant or unless such termination shall be decreed by a court of
competent jurisdiction. Notwithstanding any reletting without termination
by Landlord because of any default by Tenant, Landlord may at any time
after such reletting elect to terminate this Lease for any such default.
(5) In any action for unlawful detainer commenced by Landlord
against Tenant by reason of any default hereunder, the reasonable rental
value of the Premises for the period of the unlawful detainer shall be the
amount of rent reserved in this Lease for such period, unless Landlord or
Tenant shall prove to the contrary by competent evidence. The rights and
remedies reserved to Landlord herein, including those not specifically
described, shall be cumulative and, except as otherwise provided by then
applicable California law, Landlord may pursue any or all of such rights
and remedies at the same time or otherwise.
(6) Provided that Landlord serves notice in accordance with
the provisions of this Paragraph 25 and Paragraph 23 above, Tenant hereby
waives any notice required by Section 1161 of the California Code of Civil
Procedure.
(c) DEFAULT BY LANDLORD. Landlord shall not be in default or
breach of this Lease unless Landlord fails to observe or perform an
obligation required under this Lease to be observed or performed by
Landlord and such failure continues for thirty (30) days (except where a
different period is specified in this Lease) after written notice thereof
by Tenant to Landlord; provided, however, that if the nature of such
default is such that the same cannot reasonably be cured within such
thirty (30) day period, Landlord shall not be deemed to be default if
Landlord shall within such period commence such cure and thereafter
diligently prosecute the same to completion.
HOLDING OVER
PARAGRAPH 26
If Tenant holds over after the expiration or earlier termination of
the Term without the express written consent of Landlord, Tenant shall
become a tenant at sufferance only at either the then prevailing market
rate, as determined by Landlord in its sole and absolute discretion, for
the Premises or, at Landlord's option, one hundred and fifty percent
(150%) of the Basic Annual Rental, in each case in effect upon the date of
such expiration or earlier termination (subject to such adjustments as may
be provided for in Paragraph 2 above and prorated on a daily basis) and
otherwise upon the terms, covenants and conditions herein specified, so
far as applicable. Acceptance by Landlord of rent after such expiration
or earlier termination shall not constitute a consent to a holdover
hereunder or result in a renewal of this Lease. The foregoing provisions
of this Paragraph are in addition to and do not affect Landlord's right of
re-entry or any other rights of Landlord hereunder or as otherwise
provided by law, including without limitation Landlord's right to receive
damages, consequential and direct, sustained by reason of Tenant's
retention of possession.
CONDITION OF PREMISES
PARAGRAPH 27
(a) PRESMISES LEASED "AS-IS". Tenant acknowledges and agrees that
except as may be expressly specifically provided herein, if at all: (i)
Tenant has been afforded ample opportunity to inspect the Premises and the
Building, and has investigated their condition to the extent Tenant
desires to do so; (ii) Tenant is leasing the Premises in its "AS-IS"
condition; (iii) no representation regarding the condition of the Premises
or the Building has been made by or on behalf of Landlord; (iv) Landlord
has no obligation to remodel or to make any repairs, alterations or
improvements to the Premises in connection with Tenant's initial
occupancy; (v) any repairs, alterations or improvements to the Premises in
connection with Tenant's initial occupancy shall be Tenant's
responsibility and subject to the Construction Addendum, except to the
extent of any Tenant Improvement Allowance from Landlord pursuant to the
Construction Addendum.
(b) SURRENDER OF PREMISES. Upon the expiration or early
termination of this Lease, Tenant shall surrender the Premises to Landlord
in safe, clean and good condition (except for ordinary wear and tear
associated with normal office use) and free of Hazardous Materials as
provided in Paragraph 9(b)(14) above. Tenant shall remove all of its
personal property as of the expiration date or termination date, as the
case may be. In addition, at Landlord's option, Landlord may require
Tenant to remove all alterations installed by Tenant or for Tenant's
benefit at the Premises except the initial Tenant Improvements approved by
Landlord pursuant to the Construction Addendum. If Tenant shall remove or
restore any such property or alterations, Tenant shall repair any damage
arising from such removal. The terms of this Paragraph 27(b) shall
survive the expiration or earlier termination of this Lease.
QUIET POSSESSION
PARAGRAPH 28
Upon Tenant's paying the rent reserved hereunder and observing and
performing all of the covenants, conditions and provisions on Tenant's
part to be observed and performed hereunder, Tenant shall have quiet
possession of the Premises for the entire Term, subject to all the
provisions of this Lease.
NOTICE OF DAMAGE
PARAGRAPH 29
Tenant shall give prompt notice to Landlord in case of fire or
accidents in the Premises or at the Project or of any defects discovered
therein or in their fixtures or equipment.
GOVERNING LAW
PARAGRAPH 30
This Lease shall be governed by, and construed in accordance with
the laws of the State of California.
COMMON FACILITIES; PARKING
PARAGRAPH 31
(a) RIGHT TO USE COMMON FACILITIES. Tenant shall have the non-
exclusive right, in common with others, to the use of any common
entrances, ramps, drives and similar access and serviceways and other
common facilities in the Project. The rights of Tenant hereunder in and
to the common facilities shall at all times be subject to the rights of
Landlord and other tenants and owners in the Project who use the same in
common with Tenant, and it shall be the duty of Tenant to keep all the
common facilities free and clear of any obstructions created or permitted
by Tenant or resulting from Tenant's operations. Tenant shall not use the
common areas of the Building or the Project, including, without
limitation, the Building's electrical room, parking lot or trash
enclosures, for storage purposes. Nothing herein shall affect the right
of Landlord at any time to remove any persons not authorized to use the
common facilities from such facilities or to prevent the use of such
facilities by unauthorized persons.
(b) CHANGES IN COMMON FACILITIES. Landlord reserves the right, at
any time and from time to time to (i) make alterations in or additions to
the common areas or facilities of the Project, including, without
limitation, constructing new buildings or changing the location, size,
shape or number of the driveways, entrances, parking spaces, parking
areas, loading and unloading areas, landscape areas and walkways, (ii)
designate property to be included in or eliminate property from the common
areas or facilities of the Project, (iii) close temporarily any of the
common areas or facilities of the Project for maintenance purposes, and
(4) use the common areas and facilities of the Project while engaged in
making alterations in or additions and repairs to the Project; provided,
however, that reasonable access to the Premises and parking at or near the
Project remains available.
(c) PARKING. Landlord shall make available to Tenant, and Tenant
shall have the right to use, throughout the term of the Lease the number
of parking spaces indicated on Item 14 of the Basic Lease Provisions on an
unassigned basis on that portion of the Project designated by Landlord
from time to time for parking. The parking spaces shall be used for
parking only by vehicles no larger than full-sized passenger automobiles
or pick-up trucks, and Tenant shall park no vehicles at the Project
overnight. Landlord shall have the right to impose rules and regulations
on parking at the Project. Landlord shall also have the right, in
addition to all other rights and remedies that it may have under this
Lease, to remove or tow away a vehicle which is in violation of Landlord's
rules, without prior notice to Tenant, and Tenant shall pay the cost
thereof to Landlord within ten (10) days after notice from Landlord to
Tenant. Upon any sale by Landlord of any building located at the Project,
Landlord shall have the right to alter the parking area.
SIGNAGE
PARAGRAPH 32
Tenant shall not install any signage within the Project, the
Building or the Premises without obtaining the prior written approval of
Landlord, and Tenant shall be responsible for the maintenance of any such
signage installed by Tenant. Any such signage shall comply with
Landlord's current Project signage criteria and all applicable
governmental requirements.
SUCCESSORS AND ASSIGNS
PARAGRAPH 33
Except as otherwise provided in this Lease, and subject to the terms
of Paragraph 15 above, all of the covenants, conditions, and provisions of
this Lease shall be binding upon and shall inure to the benefit of the
parties hereto and their respective heirs, personal representatives,
successors, and assigns.
BROKERS
PARAGRAPH 34
Tenant warrants that it has had no dealings with any real estate
broker or agent in connection with the negotiation of this Lease,
excepting only the broker named in Item 12 of the Basic Lease Provisions
as the "Cooperating Broker", and that it knows of no other real estate
broker or agent who is or might be entitled to a commission or finder's or
similar fee in connection with this Lease excepting only the broker named
in Item 11 of the Basic Lease Provisions as the "Listing Broker". Tenant
agrees to indemnify, protect, defend and hold Landlord harmless from and
against any and all costs, expenses and liabilities for any compensation
claimed by the Cooperating Broker in excess of the maximum commission
previously disclosed in writing to Landlord or claimed by any other
broker, finder or agent in connection with the negotiation of this Lease
other than brokers claiming solely through Landlord.
NAME
PARAGRAPH 35
Tenant shall not, without the prior written consent of Landlord, use
the name of the Building or the Project for any purpose other than as the
address of the business to be conducted by Tenant in the Premises and in
no event shall Tenant acquire any rights in or to such names.
EXAMINATION OF LEASE
PARAGRAPH 36
Submission of this Lease for examination or signature by Tenant does
not constitute a reservation of or option for lease, and it is not
effective as a lease or otherwise until execution by and delivery to both
Landlord and Tenant.
INTEREST ON TENANT'S OBLIGATIONS; LATE CHARGE
PARAGRAPH 37
(a) Any amount due from Tenant to Landlord which is not paid when
due shall bear interest at the lesser of eighteen percent (18%) per annum
or the maximum rate then permitted by law in this context from the date
such payment is due until paid. The rate so determined shall continue in
effect following any default by Tenant pursuant to this Lease. Payment of
such interest shall not excuse or cure any default by Tenant under this
Lease.
(b) In the event Landlord does not receive any installment of rent
due under this Lease within three (3) business days after the date such
installment is due, Tenant shall pay Landlord a late charge equal to five
percent (5%) of the delinquent installment of rent. The parties agree
that the amount of such late charge represents a reasonable estimate of
the cost and expense that will be incurred by Landlord in processing each
delinquent payment of rent by Tenant and that such late charge shall be
paid to Landlord as liquidated damages for each delinquent payment
pursuant to Section 1671 of the California Civil Code. The parties
further agree that the payment of late charges and the payment of interest
provided for in Paragraph 36(a) above are distinct and separate from one
another in that the payment of interest is to compensate Landlord for its
inability to use the money improperly withheld by Tenant, while the
payment of late charges is to compensate Landlord for its additional
administrative expenses in handling and processing delinquent payments.
TIME
PARAGRAPH 38
Time is and shall be of the essence of this Lease and each and all
of its provisions.
DEFINED TERMS AND MARGINAL HEADINGS
PARAGRAPH 39
The words "Landlord" and "Tenant" as used herein shall include the
plural as well as the singular. If more than one person is named as
Tenant under this Lease, the obligations of such persons shall be joint
and several. Whenever under the provisions of this Lease Landlord is
required or agrees to take certain action, Landlord's obligation to do so
shall be deemed fulfilled if Landlord causes such action to be taken by
any other person. The marginal headings and titles to the Paragraphs and
other divisions of this Lease are not a part of this Lease and shall have
no effect upon the construction or interpretation of any part hereof.
PRIOR AGREEMENTS; SEVERABILITY
PARAGRAPH 40
This Lease, including all of the Addenda and Exhibits attached
hereto, contains all of the agreements of the parties hereto with respect
to any matter covered or mentioned in this Lease, and no prior agreement,
understanding or representation pertaining to any such matter shall be
effective for any purpose. No provision of this Lease may be amended or
added to except by an agreement in writing signed by the parties hereto or
their respective successors in interest. If any term or provision of this
Lease the deletion of which would not adversely affect the receipt of any
material benefit by either party hereunder shall be held invalid or
unenforceable to any extent, the remainder of this Lease shall not be
affected thereby and each term and provision of this Lease shall be valid
and enforceable to the fullest extent permitted by law.
CORPORATE AUTHORITY
PARAGRAPH 41
Each individual executing this Lease on behalf of Landlord and
Tenant represents and warrants that (a) such individual has full power and
authority to execute this Lease on behalf of its party, and (b) the
execution and delivery of this Lease have been duly authorized by such
party. If Tenant is a corporation Tenant shall, within ten (10) days
after execution of this Lease, deliver to Landlord a certified copy of a
resolution of the Board of Directors of Tenant authorizing or ratifying
the execution of this Lease.
NO LIGHT, AIR OR VIEW EASEMENTS
PARAGRAPH 42
Any diminution or shutting off of light, air or view by any
structure which may be erected on lands adjacent to the Building or the
Project shall in no way affect this Lease or impose any liability on
Landlord.
LANDLORD'S APPROVALS
PARAGRAPH 43
In no event shall the review, approval, inspection or examination by
Landlord of any item to be reviewed, approved, inspected or examined by
Landlord under the terms of this Lease be deemed to be an approval of or
representation or warranty as to the adequacy, accuracy, sufficiency or
soundness of any such item or the quality or suitability of such item for
its intended use. Any such review, approval, inspection or examination by
Landlord shall be for the sole purpose of protecting Landlord's interests
in the Building and the Project and under this Lease and no third parties
shall have any rights pursuant thereto.
EXERCISE FACILITY
PARAGRAPH 44
Tenant agrees to inform all employees of Tenant of the following:
(i) the exercise facility is available for the use of the employees of
tenants of the Project only and for no other person; (ii) use of the
facility is at the risk of Tenant or Tenant's employees, and all users
must sign a release; (iii) the facility is unsupervised; and (iv) users of
the facility must report any needed equipment maintenance or any unsafe
conditions to the Landlord immediately. Landlord may discontinue
providing such facility at Landlord's sole option at any time without
incurring any liability. As a condition to the use of the exercise
facility, Tenant and each of Tenant's employees that uses the exercise
facility shall first sign a written release in form and substance
acceptable to Landlord. Landlord may change the rules and/or hours of the
exercise facility at any time, and Landlord reserves the right to deny
access to the exercise facility to anyone due to misuse of the facility or
noncompliance with rules and regulations of the facility. Tenant will
indemnify, defend and hold harmless Landlord from any claims, liabilities
or damages resulting from use of the exercise facility in the Project by
Tenant, Tenant's employees or invitees except to the extent caused by
Landlord's gross active negligence or intentional misconduct.
MISCELLANEOUS
PARAGRAPH 45
(a) At the expiration or earlier termination of this Lease, Tenant
shall execute, acknowledge and deliver to Landlord, within five (5) days
after written demand from Landlord to Tenant, any quitclaim deed or other
document as may be reasonably requested by any title insurance company to
remove this Lease as a matter affecting title to the Premises.
(b) Tenant acknowledges that the liability of Landlord with respect
to its obligations pursuant to this Lease is limited to Landlord's equity
interest in the Building. Tenant shall look solely to Landlord's equity
interest in the Building to satisfy any claim or judgment against or any
liability or obligation of Landlord to Tenant. No recourse shall be had
by Tenant against Landlord or the assets of Landlord (other than the
equity interest of Landlord in the Building) to satisfy any claim or
judgment of Tenant against Landlord or any obligation or liability of
Landlord to Tenant.
WAIVER OF JURY TRIAL
PARAGRAPH 46
Landlord and Tenant (including any assignee, successor or personal
representative of such party) HEREBY WAIVE THEIR RESPECTIVE RIGHT TO TRIAL
BY JURY of any cause of action, claim, counterclaim or cross-complaint in
any action, proceeding and/or hearing brought by either Landlord against
Tenant or Tenant against Landlord on any matter whatsoever arising out of,
or in any way connected with, this Lease, the relationship of Landlord and
Tenant, Tenant's use or occupancy of the Premises, or any claim of injury
or damage, or the enforcement of any remedy under any law, statute, or
regulation, emergency or otherwise, now or hereafter in effect. Neither
party will seek to consolidate any such action in which a jury has been
waived, with any other action in which a jury trial cannot or has not been
waived. THE PROVISIONS OF THIS PARAGRAPH HAVE BEEN FULLY DISCUSSED BY THE
PARTIES HERETO, AND EACH PARTY HAS RECEIVED THE ADVICE OF COUNSEL WITH
RESPECT TO SUCH WAIVER. IT IS THE INTENTION OF THE PARTIES THAT THESE
PROVISIONS SHALL BE SUBJECT TO NO EXCEPTIONS. BY EXECUTING THIS LEASE,
LANDLORD AND TENANT AGREE THAT THIS PROVISION MAY BE FILED BY ANY PARTY
HERETO WITH THE CLERK OR JUDGE BEFORE WHOM ANY ACTION IS INSTITUTED, WHICH
FILING SHALL CONSTITUTE THE WRITTEN CONSENT TO A WAIVER OF JURY TRIAL
REQUIRED PURSUANT TO AND IN ACCORDANCE WITH SECTION 631 OF THE CALIFORNIA
CODE OF CIVIL PROCEDURE. NO PARTY HAS IN ANY WAY AGREED WITH OR
REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS PARAGRAPH WILL
NOT BE FULLY ENFORCED IN ALL INSTANCES.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as
of the date first set forth on page 1 hereof.
LANDLORD: TENANT:
METROPOLITAN LIFE INSURANCE ADVANCED POLYMER SYSTEMS,
COMPANY, a New York corporation a Delaware corporation
By: /s/Xxxxxx X. Xxxxx By: /s/Xxxxxxx X'Xxxxxxx
------------------------- --------------------
Its: Assistant Vice President Its: Executive VP/CFO
------------------------ --------------------
EXHIBIT A
SITE PLAN OF PROJECT
This exhibit includes a map of the Project.
EXHIBIT B
SITE PLAN OF PREMISES
This exhibit includes a floor plan of the premises.
EXHIBIT C
CONFIRMATION OF LEASE TERM
THIS MEMORANDUM is made as of ____________________, 1997, between
METROPOLITAN LIFE INSURANCE COMPANY, a New York corporation ("Landlord"),
and ADVANCED POLYMER SYSTEMS, a Delaware corporation ("Tenant"), who
entered into a lease dated for reference purposes as of November 7, 1997,
covering certain premises located at Seaport Centre, Redwood City,
California, which premises are commonly known as 000 Xxxxxxx Xxxxx.
Xxxxxxx Xxxx, Xxxxxxxxxx. All capitalized terms, if not defined herein,
shall be defined as they are defined in the Lease.
1. The parties to this Memorandum hereby agree that the date of
_________________, 19___ is the "Commencement Date" of the Term and that
_______________, 19___ is the "Expiration Date" of the Term.
2. Tenant hereby confirms the following:
(a) That it has accepted possession of the Premises pursuant
to the terms of the Lease;
(b) That Landlord has fulfilled all of its duties of an
inducement nature;
(c) That the Lease has not been modified, altered or amended,
except as follows:
________________________________________________
________________________________________________
________________________________________________
(d) That there are no offsets or credits against rentals, nor
has any security deposit been paid except as provided pursuant to the
terms of the Lease; and
(e) That the Lease is in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this
Confirmation of Lease Term as of the date first set forth above.
LANDLORD: TENANT:
METROPOLITAN LIFE INSURANCE ADVANCED POLYMER SYSTEMS,
COMPANY, a New York corporation a Delaware corporation
By: By:
------------------------- ------------------------
Its: Its:
------------------------ -------------------------
EXHIBIT D
PERMITTED HAZARDOUS MATERIALS
This exhibit includes a table listing of permitted hazardous materials.
EXHIBIT E
This exhibit is not used.
EXHIBIT F
FORM OF SUBORDINATION, NONDISTURBANCE & ATTORNMENT AGREEMENT
RECORDING REQUESTED
BY AND WHEN
RECORDED RETURN TO:
____________________, Esq.
____________________
____________________
____________________
SUBORDINATION,
NONDISTURBANCE
AND ATTORNMENT AGREEMENT
NOTICE: THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT
AGREEMENT RESULTS IN YOUR LEASEHOLD ESTATE IN THE
PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY
THAN THE LIEN OF SOME OTHER OR LATER SECURITY
INSTRUMENT.
DEFINED TERMS
Execution Date:
Beneficiary & Address:
Attn.:
with a copy to:
Tenant & Address:
Landlord & Address:
Loan: A first mortgage loan in the original principal amount of $
from Beneficiary to Landlord.
Note: A Promissory Note executed by Landlord in favor of Beneficiary in
the amount of the Loan dated as of
Deed of Trust: A Deed of Trust, Security Agreement and Fixture Filing
dated as of
executed by Landlord, to as Trustee, for the benefit
of Beneficiary securing repayment of the Note to be recorded in the
records of the County in which the Property is located.
Lease and Lease Date: The lease entered into by Landlord and Tenant dated
as of covering the Premises.
[Add amendments]
Property: [Property Name]
[Street Address 1]
[City, State, Zip]
The Property is more particularly described on Exhibit A.
THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT
(the "Agreement") is made by and among Tenant, Landlord, and Beneficiary
and affects the Property described in Exhibit A. Certain terms used in
this Agreement are defined in the Defined Terms. This Agreement is entered
into as of the Execution Date with reference to the following facts:
A. Landlord and Tenant have entered into the Lease covering
certain space in the improvements located in and upon the Property (the
"Premises").
B. Beneficiary has made or is making the Loan to Landlord
evidenced by the Note. The Note is secured, among other documents, by the
Deed of Trust.
C. Landlord, Tenant and Beneficiary all wish to subordinate
the Lease to the lien of the Deed of Trust.
D. Tenant has requested that Beneficiary agree not to disturb
Tenant's rights in the Premises pursuant to the Lease in the event
Beneficiary forecloses the Deed of Trust, or acquires the Property
pursuant to the trustee's power of sale contained in the Deed of Trust or
receives a transfer of the Property by a conveyance in lieu of foreclosure
of the Property (collectively, a "Foreclosure Sale") but only if Tenant is
not then in default under the Lease and Tenant attorns to Beneficiary or a
third party purchaser at the Foreclosure Sale (a "Foreclosure Purchaser").
NOW THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties agree as follows:
1. Subordination. The Lease and the leasehold estate created
by the Lease and all of Tenant's rights under the Lease are and shall
remain subordinate to the Deed of Trust and the lien of the Deed of Trust,
to all rights of Beneficiary under the Deed of Trust and to all renewals,
amendments, modifications and extensions of the Deed of Trust.
2. Acknowledgments by Tenant. Tenant agrees that: (a) Tenant
has notice that the Lease and the rent and all other sums due under the
Lease have been or are to be assigned to Beneficiary as security for the
Loan. In the event that Beneficiary notifies Tenant of a default under the
Deed of Trust and requests Tenant to pay its rent and all other sums due
under the Lease to Beneficiary, Tenant shall pay such sums directly to
Beneficiary or as Beneficiary may otherwise request. (b) Tenant shall send
a copy of any notice or statement under the Lease to Beneficiary at the
same time Tenant sends such notice or statement to Landlord. (c) This
Agreement satisfies any condition or requirement in the Lease relating to
the granting of a nondisturbance agreement.
3. Foreclosure and Sale. In the event of a Foreclosure Sale,
(a) So long as Tenant complies with this Agreement and
is not in default under any of the provisions of the Lease, the Lease
shall continue in full force and effect as a direct lease between
Beneficiary and Tenant, and Beneficiary will not disturb the possession of
Tenant, subject to this Agreement. Tenant agrees to attorn to and accept
Beneficiary as landlord under the Lease and to be bound by and perform all
of the obligations imposed by the Lease. Upon Beneficiary's acquisition
of title to the Property, Beneficiary will perform all of the obligations
imposed on the Landlord by the Lease except as set forth in this
Agreement; provided, however, that Beneficiary shall not be: (i) liable
for any act or omission of a prior landlord (including Landlord); or (ii)
subject to any offsets that Tenant might have against any prior landlord
(including Landlord); or (iii) bound by any rent or additional rent which
Tenant might have paid in advance to any prior landlord (including
Landlord) for a period in excess of one month or by any security deposit,
cleaning deposit or other sum that Tenant may have paid in advance to any
prior landlord (including Landlord); or (iv) bound by any amendment,
modification, assignment or termination of the Lease made without the
written consent of Beneficiary; (v) obligated or liable with respect to
any representations or warranties contained in the Lease; (vi) liable to
Tenant or any other party for any conflict between the provisions of the
Lease and the provisions of any other lease affecting the Property which
is not entered into by Beneficiary; or (vii) subject to any defenses that
Tenant might have against any prior landlord (including Landlord) except:
(x) after foreclosure, to the extent of a failure by
Beneficiary, after notice and expiration of any grace or cure period
applicable to a landlord default, to cure a continuing condition of
default of landlord under the Lease which is capable of cure by
Beneficiary; and
(y) before foreclosure, if landlord shall have failed to cure a default of
landlord within the time provided for in the Lease, and if Beneficiary has
failed to cure such default within an additional thirty (30) days after
receipt of notice thereof, or if such default cannot be cured within that
time, then within such additional time as may be necessary, if, within
such thirty (30) days, Beneficiary has commenced and is diligently
pursuing the remedies necessary to cure such default (including
commencement of foreclosure proceedings or other proceedings to acquire
possession of the Property, if necessary to effect such cure), and such
period of time shall be extended by any period within which Beneficiary is
prevented from commencing or pursuing such foreclosure proceedings or
other proceedings to acquire possession of the Property by reason of
landlord's bankruptcy, and until the time allowed as aforesaid for
Beneficiary to cure such defaults has expired without cure, Tenant shall
have no right to, and shall not, terminate the Lease on account of
default.
(b) Upon the written request of Bene-ficiary after a
Foreclosure Sale, the parties shall execute a lease of the Premises upon
the same provisions as contained in the Lease between Landlord and Tenant,
except as set forth in this Agreement, for the unexpired term of the
Lease.
4. Subordination and Release of Purchase Options. Lessee
represents that it has no right or option of any nature to purchase the
Property or any portion of the Property or any interest in the Borrower.
To the extent Tenant has or acquires any such right or option, these
rights or options are acknowledged to be subject and subordinate to the
Mortgage and are waived and released as to Beneficiary and any Foreclosure
Purchaser.
5. Acknowledgment by Landlord. In the event of a default
under the Deed of Trust, at the election of Beneficiary, Tenant shall and
is directed to pay all rent and all other sums due under the Lease to
Beneficiary.
6. Construction of Improvements. Beneficiary shall not have
any obligation or incur any liability with respect to the completion of
the improvements in which the Premises are located at the commencement of
the term of the Lease.
7. Notice. All notices under this Agreement shall be deemed
to have been properly given if delivered by overnight courier service or
mailed by United States certified mail, with return receipt requested,
postage prepaid to the party receiving the notice at its address set forth
in the Defined Terms (or at such other address as shall be given in
writing by such party to the other parties) and shall be deemed complete
upon receipt or refusal of delivery.
8. Miscellaneous. Beneficiary shall not be subject to any
provision of the Lease that is incon-sistent with this Agreement. Nothing
contained in this Agreement shall be construed to derogate from or in any
way impair or affect the lien or the provisions of the Deed of Trust. This
Agreement shall be governed by and construed in accordance with the laws
of the State of in which the Property is located.
9. Liability and Successors and Assigns. In the event that
Beneficiary acquires title to the Premises or the Property, Beneficiary
shall have no obligation nor incur any liability beyond Beneficiary's then
equity interest in the building in which the Premises is located, and
Tenant shall look solely to such equity interest for the payment and
performance of any obligations imposed upon Beneficiary under this
Agreement or under the Lease. This Agreement shall run with the land and
shall inure to the benefit of the parties and, their respective successors
and permitted assigns including a Foreclosure Purchaser. If a Foreclosure
Purchaser acquires the Property or if Beneficiary assigns or transfers its
interest in the Note and Deed of Trust or the Property, all obligations
and liabilities of Beneficiary under this Agreement shall terminate and be
the responsibility of the Foreclosure Purchaser or other party to whom
Beneficiary's interest is assigned or transferred. The interest of Tenant
under this Agreement may not be assigned or transferred except in
connection with an assignment of its interest in the Lease which has been
consented to by Beneficiary.
IN WITNESS WHEREOF, the parties have executed this
Subordination, Nondisturbance and Attornment Agreement as of the Execution
Date.
NOTICE: THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT
CONTAINS PROVISIONS WHICH ALLOW THE PERSON OBLIGATED ON THE LEASE TO
OBTAIN A LOAN, A PORTION OF WHICH MAY BE EXPENDED FOR OTHER PURPOS-ES THAN
IMPROVEMENT OF THE PROPERTY.
IT IS RECOMMENDED THAT THE PARTIES CONSULT WITH THEIR ATTORNEYS PRIOR TO
THE EXECUTION OF THIS SUBORDINATION, NONDISTURBANCE AND ATTORNMENT
AGREEMENT.
BENEFICIARY: ___________________________________,
a _________________________________
By ________________________________,
Its ________________________________
TENANT: ___________________________________,
a _________________________________
By ________________________________
Its ________________________________
LANDLORD: __________________________________,
a _________________________________
By ________________________________,
Its ________________________________
EXHIBIT A OF SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT
PROPERTY DESCRIPTION
State of _____________
County of ____________
On ______________, 199_ before me, ____________________, personally
appeared ___________________, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her authorized capacity, and that by his/her
signature on the instrument the person, or the entity upon behalf of which
the person acted, executed the instrument.
WITNESS my hand and official seal.
Signature ________________________________ (Seal)
***************************************************
State of _____________
County of ____________
On ______________, 199_ before me, ____________________, personally
appeared ___________________, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her authorized capacity, and that by his/her
signature on the instrument the person, or the entity upon behalf of which
the person acted, executed the instrument.
WITNESS my hand and official seal.
Signature ________________________________ (Seal)
***************************************************
State of _____________
County of ____________
On ______________, 199_ before me, ____________________, personally
appeared ___________________, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person whose name is
subscribed to the within instrument and acknowledged to me that he/she
executed the same in his/her authorized capacity, and that by his/her
signature on the instrument the person, or the entity upon behalf of which
the person acted, executed the instrument.
WITNESS my hand and official seal.
Signature ________________________________ (Seal)
RIDER TO LEASE
ADDITIONAL PROVISIONS
This Rider to Lease ("Rider") is attached to and a part of a certain
Lease dated as of November 7, 1997 executed concurrently herewith by
METROPOLITAN LIFE INSURANCE COMPANY, a New York corporation, as Landlord,
and ADVANCED POLYMER SYSTEMS, a Delaware corporation (for purposes of this
Rider, "Advanced Polymer" or "Tenant"), as Tenant, for the Premises as
described therein (the "Lease").
SECTION 1. DEFINED TERMS; FORCE AND EFFECT
Capitalized terms used in this Rider shall have the same meanings set
forth in the Lease except as otherwise specified herein and except for
terms capitalized in the ordinary course of punctuation. This Rider forms
a part of the Lease and is being entered into as an additional
consideration for this Lease. Without limiting the generality of the
foregoing, any default by any party hereunder shall have the same force
and effect as a default under the Lease. Should any inconsistency arise
between this Rider and any other provision of the Lease as to the specific
matters which are the subject of this Rider, the terms and conditions of
this Rider shall control.
SECTION 2. CONDITION PRECEDENT TO LEASE.
This Lease and the obligations of each party hereunder are expressly
subject to the condition precedent of Landlord successfully entering into
and obtaining a legally binding written agreement with The 3DO Company
("3DO") modifying 3DO's pre-existing lease of the Premises to provide for
3DO's surrender of possession of the Premises and termination of 3DO's
rights to the Premises satisfactory in all respects in form and substance
to Landlord, in Landlord's sole discretion (the "3DO Surrender
Agreement"). If such condition precedent is not satisfied or waived in
writing by Landlord in its sole discretion, this Lease shall be null and
void, and of no force or effect. Landlord shall give Tenant written
notice (by telecopy or by any other means permitted by the Lease) of the
satisfaction of this condition precedent or shall notify Tenant of the
satisfaction of this condition precedent by delivering to Tenant the keys
and possession of the Premises.
SECTION 3. OPTION TO EXTEND.
(a) Landlord hereby grants Tenant a single option to extend the
initial Term of the Lease for an additional period of five (5) years (such
period may be referred to as the "Option Term"), as to the entire Premises
as it may then exist, upon and subject to the terms and conditions of this
Section (the "Option To Extend"), and provided that at the time of
exercise of such right: (i) Tenant must be in occupancy of the entire
Premises; and (ii) there has been no material adverse change in Tenant's
financial position from such position as of the date of execution of the
Lease, as certified by Tenant's independent certified public accountants,
and as supported by Tenant's certified financial statements, copies of
which shall be delivered to Landlord with Tenant's written notice
exercising its right hereunder.
(b) Tenant's election (the "Election Notice") to exercise the
Option To Extend must be given to Landlord in writing no earlier than the
date which is two hundred and seventy (270) days before the Expiration
Date and no later than the date which is one hundred and eighty (180) days
prior to the Expiration Date. If Tenant either fails or elects not to
exercise its Option to Extend by not timely giving its Election Notice,
then the Option to Extend shall be null and void.
(c) The Option Term shall commence immediately after the
expiration of the initial Term of the Lease. Tenant's leasing of the
Premises during the Option Term shall be upon and subject to the same
terms and conditions contained in the Lease except that (i) the Basic
Annual Rent pursuant to the Lease shall be amended to equal the "Option
Term Basic Annual Rent", defined and determined in the manner set forth in
the immediately following Subsection; (ii) the Security Deposit shall not
be reduced; (iii) Tenant shall accept the Premises in its "as is"
condition without any obligation of Landlord to repaint, remodel, repair,
improve or alter the Premises or to provide Tenant any allowance therefor;
and (iv) there shall be no further option or right to extend the term of
the Lease. If Tenant timely and properly exercises the Option To Extend,
references in the Lease to the Term shall be deemed to mean the initial
Term as extended by the Option Term unless the context clearly requires
otherwise.
(d) The Option Term Basic Annual Rent shall mean the greater of
(i) the Basic Annual Rent payable by Tenant under this Lease calculated at
the rate applicable for the last year of the initial Term, or (ii) the new
basic annual rents which would apply (with Additional Rent payable as
provided under this Lease) at the "Prevailing Market Rent". As used
herein Prevailing Market Rent shall mean the rent and all other monetary
payments and escalations, including consumer price increases, that
Landlord could obtain from a third party desiring to lease the Premises
for a term equal to the Option Term and commencing when the Option Term is
to commence under market leasing conditions, and taking into account the
following: the size, location and floor levels of the Premises; the type
and quality of tenant improvements; age and location of the Project;
quality of construction of the Project; services to be provided by
Landlord or by tenant; the rent, all other monetary payments and
escalations obtainable for new leases of space comparable to the Premises
in the Project and in comparable office/research and development buildings
within an eight (8) mile radius, and other factors that would be relevant
to such a third party in determining what such party would be willing to
pay therefor, provided, however, that Prevailing Market Rent shall be
determined without reduction or adjustment for "Tenant Concessions" (as
defined below), if any, being offered to prospective new tenants of
comparable space. For purposes of the preceding sentence, the term
"Tenant Concessions" shall include, without limitation, so-called free
rent, tenant improvement allowances and work, moving allowances, and lease
takeovers. The determination of Prevailing Market Rent based upon the
foregoing criteria shall be made by Landlord, in the good faith exercise
of Landlord's business judgment. Within thirty (30) days after Tenant's
exercise of the Option To Extend, Landlord shall notify Tenant of
Landlord's determination of Option Term Rent for the Premises. If
Landlord's determination of Prevailing Market Rent is greater than the
Preceding Rent, and if Tenant, in Tenant's sole discretion, disagrees with
the amount of Prevailing Market Rent determined by Landlord, Tenant may
elect to revoke and rescind the exercise of the option by giving written
notice thereof to Landlord within thirty (30) days after notice of
Landlord's determination of Prevailing Market Rent.
(e) This Option to Extend is personal to Advanced Polymer and may
not be used by, and shall not be transferable or assignable (voluntarily
or involuntarily) to any person or entity.
(f) Upon the occurrence of any of the following events, Landlord
shall have the option, exercisable at any time prior to commencement of
the Option Term, to terminate all of the provisions of this Section with
respect to the Option to Extend, with the effect of canceling and voiding
any prior or subsequent exercise so this Option to Extend is of no force
or effect:
(i) Tenant's failure to timely exercise the Option to Extend
in accordance with the provisions of this Section.
(ii) The existence at the time Tenant exercises the Option to
Extend or at the commencement of the Option Term of any default on the
part of Tenant under the Lease or of any state of facts which with the
passage of time or the giving of notice, or both, would constitute such a
default.
(iii) Tenant's third default under the Lease prior to the
commencement of the Option Term, notwithstanding that all such defaults
may subsequently be cured.
In the event of Landlord's termination of the Option to Extend pursuant to
this Section, Tenant shall reimburse Landlord for all costs and expenses
Landlord incurs in connection with Tenant's exercise of the Option to
Extend including, without limitation, costs and expenses with respect to
any brokerage commissions and attorneys' fees, and with respect to the
design, construction or making of any tenant improvements, repairs or
renovation or with respect to any payment of all or part of any allowance
for any of the foregoing.
(g) Without limiting the generality of any provision of the Lease,
time shall be of the essence with respect to all of the provisions of this
Section.
IN WITNESS WHEREOF, the parties hereto have executed this Rider as
of the date first set forth in the Lease.
LANDLORD: TENANT:
METROPOLITAN LIFE INSURANCE ADVANCED POLYMER SYSTEMS,
COMPANY, a New York corporation a Delaware corporation
By: /s/Xxxxxx X. Xxxxx By: /s/Xxxxxxx X'Xxxxxxx
------------------------- ------------------------
Its: Assistant Vice President Its: Executive VP/CFO
------------------------ ------------------------
CONSTRUCTION ADDENDUM
This Construction Addendum ("Addendum") is made and entered into as
of November 7, 1997, by and between Metropolitan Life Insurance Company, a
New York corporation ("Landlord"), and Advanced Polymer Systems, a
Delaware corporation ("Tenant").
RECITALS
A. Pursuant to the terms of that certain Lease of even date
herewith (the "Lease"), Landlord leased to Tenant, and Tenant hired from
Landlord, those certain premises consisting of approximately 26,067 square
feet of space (the "Premises"), which is a part of Building No. 1 (the
"Building") in Phase I of Seaport Centre, Redwood City, California (the
"Project"), as more particularly described in the Lease.
B. Subject to the terms and provisions hereof, Landlord has agreed
that Tenant may construct certain tenant improvements in the Premises.
Accordingly, Landlord and Tenant now desire to set forth the terms and
conditions upon which Tenant shall construct the tenant improvements in
the Premises, as more particularly set forth hereinbelow. Capitalized
terms used but not defined herein shall have the meaning ascribed to them
in the Lease.
NOW THEREFORE, the parties agree as follows:
1. GENERAL REQUIREMENTS FOR CONSTRUCTION.
1.1 TENANT'S OBLIGATION TO CONSRUCT. Tenant shall construct
and install, in a good and workmanlike manner, the tenant improvements and
fixtures generally described in Exhibit "A" attached hereto (the "Tenant
Improvements") in accordance with the Final Plans (as defined in Section
2.2 below) and otherwise in strict compliance with this Addendum. Tenant
shall be solely responsible for all cost and expenses related to the
construction and installation of the Tenant Improvements, subject to
reimbursement by Landlord pursuant to Section 4 below.
1.2 TENANT'S ACCESS TO THE PRESMISES. Tenant shall
coordinate with the Seaport Centre project manager for access to the
Premises and the scheduling of construction work therein. Tenant shall
exercise due diligence and best efforts to ensure that Tenant's
construction and installation of the Tenant Improvements does not
unreasonably interfere with the use and enjoyment of other tenants of the
Building or the Project. If any shutdown of plumbing, electrical or air
conditioning equipment of the Building becomes necessary during the course
of construction of the Tenant Improvements, Tenant shall notify Landlord
and Landlord and Tenant shall agree upon when, and upon what conditions,
such shutdown may be made in order to cause the least disruption to other
tenants in the Building. Any damage to the Building or the Project caused
by Tenant or its contractor or subcontractors in connection with the
construction of the Tenant Improvements shall be immediately repaired at
Tenant's sole cost and expense.
2. DEVELOPMENT OF PLANS.
2.1 PRELIMINARY PLANS. Prior to Tenant's commencement of the
construction and installation of the Tenant Improvements, Tenant shall
prepare and deliver to Landlord preliminary plans and specifications (the
"Preliminary Plans") setting forth the Tenant Improvements to be
constructed in the Premises. Within five (5) business days following
delivery of the Preliminary Plans, Landlord shall approve the Preliminary
Plans or deliver to Tenant written notice of Landlord's disapproval of the
Preliminary Plans. Such notice shall specify all changes that must be
made to the Preliminary Plans as a condition of Landlord's approval
thereof. Within five (5) business days following receipt of Landlord's
notice of disapproval, Tenant shall deliver a revised set of Preliminary
Plans to Landlord, which Preliminary Plans shall incorporate all changes
specified in Landlord's notice of disapproval.
2.2 FINAL PLANS. As soon as the Preliminary Plans are
approved by Landlord, Tenant shall prepare final plans, specifications and
working drawings for the Tenant Improvements (the "Final Plans") that are
consistent with and logical evolutions of the approved Preliminary Plans
and shall deliver the same to Landlord for approval. Concurrently with
the delivery of the Final Plans, Tenant shall deliver to Landlord for
Landlord's approval a schedule of values ("Schedule of Values") allocating
costs to the various portions of the work involved in the construction and
installation of the Tenant Improvements and setting forth Tenant's
reasonable, good faith estimate of the timing of Landlord's disbursements
of the Tenant Improvement Allowance (as defined in Section 4.1 below) and
the amount of each such disbursement. If Landlord disapproves the Final
Plans and/or the Schedule of Values, Landlord shall deliver to Tenant, as
soon as reasonably possible but within five (5) business days following
receipt thereof, written notice of such disapproval. Such notice shall
specify all changes that must be made to the Final Plans and/or the
Schedule of Values as a condition of Landlord's approval thereof. Within
five (5) business days following receipt of Landlord's notice of
disapproval, Tenant shall deliver a revised set of Final Plans and/or
Schedule of Values to Landlord, which Final Plans and/or Schedule of
Values shall incorporate all changes specified in Landlord's notice of
disapproval. As soon as Landlord approves the Final Plans and the
Schedule of Values submitted by Tenant, Landlord and Tenant shall each
sign the same. Except as otherwise specifically provided in this
Addendum, the term "Final Plans" as hereinafter used shall mean the final
plans, specifications, working drawings and Schedule of Values approved by
Landlord for the construction of the Tenant Improvements.
2.3 FORM OF FINAL PLANS; APPROVAL OF ARCHITECT. The Final
Plans shall include tracings and other reproducible drawings, shall be in
a form satisfactory for filing with appropriate governmental authorities
and shall conform to all applicable codes, rules, regulations and
ordinances of all governing authorities. All plans submitted by Tenant to
Landlord shall be prepared by an architect selected by Tenant and approved
by Landlord. Landlord's approval of Tenant's architect shall not
constitute Landlord's warranty that said architect is professionally
qualified.
2.4 LANDLORD'S APPROVAL. If the Final Plans otherwise
conform to the Preliminary Plans and this Addendum, Landlord's approval
thereof shall not be unreasonably withheld. If the Final Plans show work
requiring a modification or change to the shell of the Building, Landlord
shall not be deemed unreasonable if Landlord disapproves such Final Plans
or if Landlord conditions its consent to such Final Plans upon Tenant
paying to Landlord, prior to the commencement of construction, the full
cost of modifying or changing the shell of the Building. Landlord may, at
Landlord's option, have the Preliminary Plans or the Final Plans reviewed
by Landlord's architect, engineer and/or construction manager; provided,
however, that any such review shall be performed within the time periods
set forth above for Landlord's review of the Preliminary Plans and the
Final Plans. The cost of any such review shall be reimbursed by Tenant to
Landlord within ten (10) days following demand therefor by Landlord. In
no event shall the approval by Landlord (or Landlord's architect, engineer
or construction manager) of the Preliminary Plans or the Final Plans
constitute a representation or warranty by Landlord (or Landlord's
architect, engineer or construction manager) of: (i) the accuracy or
completeness thereof, (ii) the absence of design defects or construction
flaws therein, or (iii) the compliance thereof with applicable laws; and
the parties agree that Landlord (and Landlord's architect, engineer and
construction manager) shall incur no liability by reason of such approval.
2.5 CHANGES. There shall be no changes to the Final Plans
without the prior written consent of Landlord. All change orders
requested by Tenant shall be made in writing and shall specify any added
or reduced cost resulting therefrom. Any change proposed by Tenant shall
be approved or disapproved by Landlord within five (5) business days
following Landlord's receipt of plans and specifications therefor.
Landlord's failure to approve any proposed change within said five (5) day
period shall be deemed Landlord's disapproval thereof.
3. CONSTRUCTION OF TENANT IMPROVEMENTS.
3.1 PERMITS AND APPROVALS. Tenant shall submit the Final
Plans to all appropriate governmental agencies for approval and shall not
commence construction or installation of the Tenant Improvements described
therein unless and until Tenant has obtained all necessary permits and
approvals required for the construction and installation of the same and
has delivered a copy or copies thereof to Landlord.
3.2 CONSTRUCTION DOCUMENTS. Prior to the commencement of
construction and installation of the Tenant Improvements, Tenant shall
submit to Landlord, for Landlord's approval, the following (collectively,
the "Construction Documents"): (a) the name of the proposed general
contractor and a copy of the proposed construction contract for the Tenant
Improvements, which shall be consistent with the terms hereof, (b) a
written assignment of such construction contract, creating in favor of
Landlord a prior perfected security interest in all of Tenant's rights
thereunder and containing the written consent of Tenant's general
contractor to such assignment, (c) a copy of the architect's contract for
the Tenant Improvements, which shall be consistent with the terms hereof,
(d) a written assignment of such architect's contract, creating in favor
of Landlord a prior perfected security interest in all of Tenant's rights
under said architect's contract and containing the written consent of
Tenant's architect to
such assignment, and (e) a list of all subcontractors and materials
suppliers proposed to be used by Tenant in connection with the
construction of the Tenant Improvements. Within five (5) business days
following the delivery of all of the Construction Documents, Landlord
shall approve such information or deliver to Tenant written notice of
Landlord's disapproval of all or any information contained therein. If
Landlord disapproves the proposed construction contract or the proposed
architect's contract for the Tenant Improvements, Landlord's notice shall
specify all changes that must be made to the proposed architect's and/or
contractor's agreements as a condition of Landlord's approval thereof.
Within five (5) business days following receipt of Landlord's notice of
disapproval, Tenant shall deliver to Landlord revised copies of the
proposed architect's and/or contractor's agreements, which revised copies
shall incorporate all changes specified in Landlord's notice of
disapproval. If Landlord disapproves the general contractor, any
subcontractor or materials supplier, the parties shall negotiate in good
faith to select another contractor, subcontractor or materials supplier
mutually acceptable to the parties. Landlord shall be entitled to
withhold its approval of the general contractor, any subcontractor, or any
materials supplier, who, in Landlord's determination, is financially or
otherwise professionally unqualified to construct the Tenant Improvements.
In addition, Landlord may condition its approval of a general contractor
upon Tenant obtaining a performance bond and labor and materials payment
bond, each in an amount equal to one hundred percent (100%) of the
estimated cost of the Tenant Improvements and in a form acceptable to
Landlord, in the event Landlord determines that such bonds are necessary
to ensure lien-free completion of the Tenant Improvements. Landlord's
failure to disapprove a contractor, subcontractor or materials supplier
shall not constitute Landlord's warranty that any contractor,
subcontractor or supplier not so disapproved is in fact qualified.
Following approval by Landlord, Tenant shall not materially amend or
consent to the material amendment of the construction contract or the
bonds, if the same are required, without Landlord's prior written
approval.
3.3 COMMENCEMENT AND COMPLETION OF CONSTRUCTION. Following
Tenant's satisfaction of all of the requirements of Section 2 above and
this Section 3, Tenant shall commence construction and installation of the
Tenant Improvements in accordance with the Final Plans and shall pursue
the same diligently to completion. Tenant covenants to give Landlord at
least ten (10) days' prior written notice of its commencement of
construction or delivery of materials related thereto to enable Landlord
to post a notice of nonresponsibility respecting the Tenant Improvements
to be constructed in the Premises.
All work done in connection with the Tenant Improvements shall
be performed in compliance with all applicable laws, ordinances, rules,
orders and regulations of all federal, state, county and municipal
governments or agencies now in force or that may be enacted hereafter,
with the requirements and standards of any insurance underwriting board,
inspection bureau or insurance carrier insuring the Premises pursuant to
the terms of the Lease, and with all directives, rules and regulations of
the fire marshal, health officer, building inspector, or other proper
officers of any governmental agency now having or hereafter acquiring
jurisdiction.
3.4 BUILDING SYSTEMS. In no event shall Tenant interfere
with the provision of heating, plumbing, electrical or mechanical system
services to the Building, make any structural changes to the Building,
make any changes to the heating, plumbing, electrical or mechanical
systems of the Building, or make any changes to the Premises which would
weaken or impair the structural integrity of the Building, alter the
aesthetic appearance of the Building exterior, or which would affect any
warranties applicable to the Building or any improvements constructed or
installed by Landlord therein, without Landlord's prior written consent,
which consent may be withheld in Landlord's sole discretion.
3.5 INSPECTIONS. In addition to any right of Landlord under
the Lease and this Addendum to enter the Premises for the purpose of
posting notices of nonresponsibility, Landlord and its officers, agents or
employees shall have the right at all reasonable times to enter upon the
Premises and inspect the Tenant Improvements and to determine that the
same are in conformity with the Final Plans and all of the requirements of
this Addendum. Landlord, however, is under no obligation to supervise,
inspect or inform Tenant of the progress of construction and Tenant shall
not rely upon Landlord therefor. Neither the right herein granted to
Landlord to make such inspections, nor the making of such inspections by
Landlord, shall operate as a waiver of any rights of Landlord to require
that the construction and installation of the Tenant Improvements conform
with the Final Plans and all the requirements of this Addendum.
3.6 PROTECTION AGAINST LIEN CLAIMS. Tenant agrees to fully
pay and discharge all claims for labor done and materials and services
furnished in connection with the construction of the Tenant Improvements,
to diligently file or procure the filing of a valid notice of completion
within ten (10) days following completion of construction of the Tenant
Improvements, to diligently file or procure the filing of a notice of
cessation upon any cessation of labor on the Tenant Improvements for a
continuous period of thirty (30) days or more, and to take all reasonable
steps to forestall the assertion of claims of lien against the Premises or
the Project, or any part thereof, or any right or interest appurtenant
thereto. Upon the request of Landlord, Tenant shall provide Landlord with
satisfactory evidence of the release or removal (including removal by
appropriate surety bond) of all liens recorded against the Premises, the
Project, or any portion thereof, and all stop notices received by Tenant.
3.7 INSURANCE.
(a) At least five (5) days prior to the date Tenant
commences construction of the Tenant Improvements, Tenant shall submit to
Landlord evidence of the following insurance coverage: (i) general
liability insurance as required by Paragraph 19 of the Lease, which shall
include contractor's protective liability coverage; (ii) workers'
compensation insurance as required by Paragraph 19 of the Lease, with
limits in accordance with the statutory requirements of the State of
California; and (iii) broad form "Builder's Risk" property damage
insurance with limits of not less than one hundred percent (100%) of the
estimated value of the Tenant Improvements. All such policies shall
provide that thirty (30) days' written notice must be given to Landlord
prior to termination or cancellation. The insurance specified in (i) and
(iii) above shall name Landlord and Landlord's property manager as
additional insureds and shall provide that Landlord, although an
additional insured, may recover for any loss suffered by Landlord or
Landlord's agents by reason of the negligence of Tenant or Tenant's
contractors, subcontractors and/or employees. Tenant hereby waives, and
Tenant shall use best efforts to cause each of its contractors and
subcontractors to waive, all rights to recover against Landlord and its
agents, contractors and employees for any loss or damage arising from a
cause covered by insurance required to be carried by Tenant hereunder to
the extent of such coverage and shall cause each respective insurer to
waive all rights of subrogation against Landlord and its agents,
contractors and employees in connection therewith to the same extent.
(b) At least five (5) days prior to the date Tenant
commences construction of the Tenant Improvements, Tenant shall deliver to
Landlord certificates of insurance from the carrier(s) providing insurance
to Tenant's contractor(s) (and, upon Landlord's request, from the
carrier(s) providing insurance to Tenant's architect) evidencing the
following types of coverage in such amounts as are reasonably determined
by Landlord to be necessary: (i) professional liability insurance; (ii)
commercial general liability insurance; (iii) business automobile
liability insurance; (iv) workers' compensation insurance; and (v)
umbrella liability insurance. The insurance specified in (i), (ii), (iii)
and (v) above shall name Landlord and Landlord's property manager as
additional insureds, and all such policies shall provide that thirty (30)
days' written notice must be given to Landlord prior to termination or
cancellation.
3.8 Final Documents. Following completion of the Tenant
Improvements, Tenant shall comply with the following: (a) Tenant shall
obtain and deliver to Landlord a copy of the certificate of occupancy for
the Tenant Improvements from the governmental agency having jurisdiction
thereof; (b) Tenant shall promptly cause a notice of completion to be
validly recorded for the Tenant Improvements; (c) Tenant shall furnish
Landlord with unconditional waivers of lien in statutory form from all
parties performing labor and/or supplying equipment and/or materials in
connection with the Tenant Improvements, including Tenant's architect(s);
(d) Tenant shall deliver to Landlord a certificate of Tenant's
architect(s) certifying completion of the Tenant Improvements in
substantial accordance with the Final Plans; (e) Tenant shall deliver to
Landlord a certificate of Tenant's contractor(s) certifying completion of
the Tenant Improvements in substantial accordance with the construction
contract(s) approved by Landlord; (f) Tenant shall deliver to Landlord a
full set of reproducible as-built drawings (signed and dated by the
general contractor and each responsible subcontractor) for the Tenant
Improvements; and (g) Tenant shall deliver to Landlord copies of all
written construction and equipment warranties and manuals related to the
Tenant Improvements.
3.9 Indemnification. Tenant shall, at Tenant's sole cost and
expense, defend, indemnify, save and hold Landlord harmless from and
against any and all claims, liabilities, demands, losses, expenses,
damages or causes of actions (whether legal or equitable in nature)
asserted by any person, firm, corporation, governmental body or agency or
entity arising out of the construction of the Tenant Improvements. Tenant
shall pay to Landlord upon demand all claims, judgments, damages, losses
or expenses (including attorneys' fees) incurred by Landlord as a result
of any legal action arising out of the construction of the Tenant
Improvements.
4. TENANT IMPROVEMENT ALLOWANCE.
4.1 AMOUNT OF ALLOWANCE. Subject to the terms and conditions
of this Addendum, Landlord shall pay to Tenant an amount not in excess of
$104,268.00 (the "Tenant Improvement Allowance") on account of all
construction costs, space planning and design fees, architecture and
engineering fees, permit fees and construction management fees (including
Landlord's construction management fee) incurred by Tenant in designing
and constructing the Tenant Improvements in the Premises. In no event
shall Tenant be entitled to any cash payment, credit, offset or other
benefit whatsoever based on any excess of the Tenant Improvement Allowance
over the actual costs of the construction and installation of the Tenant
Improvements.
4.2 TENANT'S COST. Any cost incurred in the design or
construction of the Tenant Improvements in excess of the Tenant
Improvement Allowance shall be borne by Tenant in accordance with the
terms and conditions set forth below. Prior to the construction of the
Tenant Improvements, Tenant shall cause its general contractor to submit
an estimate of the total cost of constructing the Tenant Improvements. In
the event that the aggregate of the cost estimated by Tenant's general
contractor and the cost of designing the Tenant Improvements
(collectively, the "Improvements Cost") exceeds the Tenant Improvement
Allowance, Landlord and Tenant shall determine Landlord's share of the
Improvements Cost ("Landlord's Share") and Tenant's share of the
Improvements Cost ("Tenant's Share") as follows:
(a) Landlord's Share shall be a fraction, the numerator
of which is the Tenant Improvement Allowance, and the denominator of which
is the Improvements Cost.
(b) Tenant's Share shall be a fraction, the numerator
of which is the portion of the Improvements Cost that exceeds the Tenant
Improvement Allowance, and the denominator of which is the Improvements
Cost.
(c) Prior to the commencement of construction of the
Tenant Improvements, Tenant shall deposit in a separate bank account
("Tenant's Construction Account") funds equal to Tenant's Share of the
Improvements Cost and shall deliver to Landlord reasonable evidence of the
establishment of Tenant's Construction Account and the deposit therein of
Tenant's Share of the Improvements Cost. Tenant's Construction Account
shall be used only for the purpose of funding Tenant's Share of the
Improvements Cost, and Tenant shall instruct the bank maintaining Tenant's
Construction Account to send to Landlord duplicate statements of each
disbursement or withdrawal from Tenant's Construction Account. In the
event of any change order or other event which would increase the
Improvements Cost, Tenant's Share shall be appropriately adjusted to
reflect the increase in the Improvements Cost, and Tenant shall promptly
deposit sufficient funds into Tenant's Construction Account to equal the
then outstanding unpaid amount of Tenant's Share of such increased
Improvements Cost.
4.3 PROCEDURE FOR DISBURSEMENT OF THE TENANT IMPROVEMENT
ALLOWANCE. On or before the twenty-fifth (25th) day of each calendar
month during the construction of the Tenant Improvements, but in no event
more frequently than once every thirty (30) days, Tenant shall deliver to
Landlord such invoices marked paid and other evidence as Landlord shall
reasonably require of the cost of the design of the Tenant Improvements
and the cost of the Tenant Improvements already constructed and Landlord
shall pay within forty-five (45) days of confirmation of such amount
Landlord's Share of each amount invoiced by Tenant's architect or Tenant's
general contractor; provided, however, that such invoices and other
evidence shall not be submitted by Tenant to Landlord until all of the
following, if appropriate, have occurred: (i) Landlord has reasonably and
timely determined that all of the Tenant Improvements constructed to date
have been satisfactorily completed in accord-ance with the Construction
Documents, based upon certifications satisfactory to Landlord delivered by
Tenant and Tenant's architect; and (ii) Tenant has delivered to Land-lord
unconditional partial lien releases from the general contractor and each
subcontractor. Following substantial completion of the Tenant
Improvements and prior to Landlord's final disbursement of the Tenant
Improvement Allowance (which shall include a retention of ten percent
(10%) of the Tenant Improvement Allowance), Tenant shall comply with the
requirements set forth in Section 3.8 above, together with the following:
(a) Tenant shall have submitted to Landlord a cost breakdown of Tenant's
final and total construction costs incurred in connection with the Tenant
Improvements, together with receipted invoices showing evidence of full
payment therefor; (b) Tenant shall have completed Landlord's punchlist
items, which list shall be provided by Landlord to Tenant in accordance
with Section 5 below; and (c) the Lease shall be in full force and effect
and there shall exist no event of default under the Lease or this
Addendum, and no condition, event or act which, with the passage of time
or the giving of notice, or both, would constitute an event of default
under the Lease or this Addendum. Notwithstanding any provision hereof to
the contrary, the Tenant Improvement Allowance is available only to
reimburse Tenant to the extent of qualified applications, if any, for
reimbursement which meet all the requirements of this Addendum and which
are submitted by Tenant to Landlord within one year after the date of the
Lease, and Landlord has no obligation to pay or fund any balance of the
Tenant Improvement Allowance in excess of the total of qualified
applications, if any, submitted by such date and such remaining amount
shall be retained by Landlord as its property free of any claim by Tenant
to such amount.
4.4 CONSTRUCTION MANAGEMENT. Insignia Commercial Group, Inc.
shall be retained by Landlord to supervise the construction of the Tenant
Improvements. A construction management fee, in an amount not to exceed
the lesser of (a) Ten Thousand Dollars or (b) two percent (2.0 %) of the
total amount of the construction contract(s) with Tenant's general
contractor(s) for all the work in connection with construction of the
Tenant Improvements, shall be payable out of the Tenant Improvement
Allowance.
5. WALK-THROUGH OF TENANT IMPROVEMENTS. Within two (2) business
days following the completion of the Tenant Improvements, Tenant shall
notify Landlord of the completion thereof and shall provide Landlord an
opportunity to inspect the Tenant Improvements. Within ten (10) business
days following Tenant's notice, Landlord (or its representative) shall
walk-through and inspect Tenant's work on the Tenant Improvements and
shall either approve Tenant's work or advise Tenant in writing of any
defects or uncompleted items. Tenant shall promptly repair such defects
or uncompleted items to Landlord's reasonable satisfaction. Landlord's
approval of the Tenant Improvements, or Landlord's failure to advise
Tenant of any defects or uncompleted items in the Tenant Improvements,
shall not relieve Tenant of responsibility for constructing and installing
the Tenant Improvements in accordance with the Final Plans and this
Addendum, and in compliance with all applicable laws.
6. NATURE OF IMPROVEMENTS. The ownership of the Tenant
Improvements shall be governed by Paragraph 7 of the Lease, with the
Tenant Improvements constituting "alterations, additions, or improvements"
to or of the Premises as used thereunder.
7. DEFAULT. Each of the following events shall constitute an
event of default ("Default") under this Addendum:
(a) Failure to comply with those conditions set forth in this
Addendum which are required to be fulfilled by Tenant prior to the
commencement and installation of Tenant Improvements;
(b) Failure to commence and/or complete construction of the
Tenant Improvements in compliance with this Addendum;
(c) Deviations in construction from the Final Plans (as
determined by Landlord or its representative) without the approval of
Landlord, the appearance of defective workmanship or materials in the
construction of the Tenant Improvements which are not corrected by Tenant
within thirty (30) days after notice from Landlord (or if the defect is
such that it cannot reasonably be corrected within said thirty (30) day
period, the correction of such defect is not initiated by Tenant within
said thirty (30) day period and thereafter prosecuted diligently to
completion), or any other failure by Tenant to complete construction and
installation of the Tenant Improvements in accordance with the conditions
set forth in this Addendum; and
(d) The default or breach by Tenant of any provision of the
Lease.
8. REMEDIES. In the event of a default by Tenant hereunder,
Landlord shall thereafter have no further obligation to disburse any
portion of the Tenant Improvement Allowance unless and until such default
is cured, and any such default shall be a default under the Lease and
shall entitle Landlord to exercise all remedies set forth in the Lease.
In addition, upon the occurrence of a default by Tenant hereunder,
Landlord shall have the right (but not the obligation), at Tenant's sole
cost and expense, to enter upon the Premises and take over and complete
construction and installation only as to those areas where the
construction or installation of the Tenant Improvements has been commenced
and such other areas to the extent necessary to relet the Premises, and to
make disbursements from the Tenant Improvement Allowance toward completion
of the Tenant Improvements. In connection therewith, Landlord may
discharge or replace the contractors or subcontractors performing such
work. In no event shall Landlord be required to expend its own funds to
complete the Tenant Improvements if the Tenant Improvement Allowance is
insufficient. Where substantial deviations from the Final Plans have
occurred which have not been approved by Landlord, or defective or
unworkmanlike labor or materials are being used in construction of the
Tenant Improvements, Landlord shall have the right to demand that such
labor or materials be corrected, and if the same are not so corrected,
shall have the right to immediately order the stoppage of all construction
until such condition is corrected. After issuance of such an order in
writing, no further work shall be done on the Tenant Improvements without
the prior written consent of Landlord unless and until said condition has
been fully corrected.
9. MISCELLANEOUS. Time is of the essence of this Addendum. The
invalidity or unenforceability of any one or more provisions of this
Addendum will in no way affect the validity or enforceability of any other
provision. This Addendum and the Lease to which this Addendum is attached
constitute the entire agreement of the parties with respect to the subject
matter hereof. This Addendum may not be modified or amended except by a
written agreement signed by Landlord and Tenant. The captions of the
paragraphs of this Addendum are for convenience and reference only, and in
no way modify, amplify or interpret the provisions of this Addendum.
10. ATTORNEYS' FEES. If any action or proceeding is commenced to
enforce the provisions of this Addendum, the prevailing party in such
action or proceeding will have the right to recover from the other party
its reasonable attorneys' fees and costs and expenses of litigation.
11. CONFLICT. In the event of any conflict between the terms of
the Lease and the terms of this Addendum concerning the construction of
the Tenant Improvements, the terms of this Addendum shall prevail.
LANDLORD:
Metropolitan Life Insurance Company,
a New York corporation
By: /s/Xxxxxx X. Xxxxx
-----------------------------------
Its: Assistant Vice President
-----------------------------------
TENANT:
Advanced Polymer Systems,
a Delaware corporation
By: /s/Xxxxxxx X'Xxxxxxx
-----------------------------------
Its: Executive VP/CFO
-----------------------------------
EXHIBIT A
This exhibit includes a floor plan of construction improvements to the
original premises.
