1
EXHIBIT 10.25
FIRST AMENDMENT TO MULTI-TENANT INDUSTRIAL LEASE
(TRIPLE NET)
This FIRST AMENDMENT TO MULTI-TENANT INDUSTRIAL LEASE (TRIPLE NET) (the "FIRST
AMENDMENT") is entered into as of June 12, 1997, by and between AEW/LBA
ACQUISITION CO. II, LLC, a California limited liability company ("LANDLORD") and
AURORA BIOSCIENCES CORPORATION, a Delaware corporation ("TENANT").
R E C I T A L S :
A. Landlord and Tenant entered into that certain Multi-Tenant Industrial Lease
(Triple Net) dated April 7, 1997 (the "LEASE") for certain premises (the
"ORIGINAL PREMISES") located within a multi-tenant industrial building located
at 00000 Xxxxxxxxx Xxxx, Xx Xxxxx, Xxxxxxxxxx 00000. All terms not otherwise
defined in this First Amendment shall have the same meanings as set forth in the
Lease.
B. Tenant desires to expand the Original Premises to include approximately
12,000 rentable square feet located on the second (2nd) floor of the Building
and depicted on Exhibit "A" attached hereto (the "EXPANSION PREMISES").
C. Landlord and Tenant desire to amend the Lease to provide for the
inclusion of the Expansion Premises into the Premises upon the terms set
forth herein.
A G R E E M E N T :
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. EXPANSION PREMISES. Section 1.5 of the Summary is amended to include
the Expansion Premises within the definition of the Premises, for a total of
67,000 rentable square feet.
2. MONTHLY OPERATING EXPENSE CHARGE. Section 1.6 of the Summary is
amended to increase Tenant's Share from 67.73% to 82.51%.
3. RENT. Section 1.9 of the Summary is deleted and the following is
substituted therefor:
ANNUAL BASE RENT MONTHLY BASIC RENT
1* $1,320,000.00** $110,000.00**
2 $1,488,762.00 $124,063.50
3 $1,533,424.80 $127,785.70
4 $1,579,427.50 $131,618.96
5 $1,626,810.20 $135,567.52
6 $1,675,614.40 $139,634.54
7 $1,725,882.80 $143,823.57
8 $1,777,659.20 $148,138.27
9 $1,830,988.90 $152,582.41
10 $1,885,918.50 $157,159.88
11 $1,942,496.00 $161,874,67
* Plus any partial month at the beginning of the Term.
** Reflects the agreement that rent is paid only on 2,500 square feet of
the Expansion Premises for the first year.
4. RIGHT OF FIRST REFUSAL. Tenant's right of first refusal under Section
1.4 of the Lease shall continue with respect to the remaining portion of the
second (2nd) floor of the Building.
5. VERIFICATION OF RENTABLE SQUARE FEET OF PREMISES. In the event that, pursuant
to Section 1.5 of the Lease, it is determined that the rentable square footage
of the Original Premises and/or the Expansion Premises is different from that
set forth in the Lease and this First Amendment, respectively, then in
connection with the modification of Basic Rent, the parties agree that (i) the
initial Monthly Basic Rent for the Original Premises is based on $1.95 per
rentable square foot and (ii) the initial Monthly Basic Rent for the Expansion
Premises is based on $1.10 per rentable square foot.
6. MANAGEMENT FEE. Section 3.4 of the Lease is amended to provide that
the initial Management Fee is Thirty-Two Thousand One Hundred Sixty Dollars
($32,160.00).
2
7. BROKERS. The provisions of Section 8 of the Lease concerning brokers
applies to this First Amendment and the Expansion Premises.
8. CONSTRUCTION ALLOWANCE. The Construction Allowance under Paragraph 6 of the
Work Letter Agreement is increased by One Hundred Eleven Thousand Dollars (which
is based on $10.00 per rentable square foot of the Expansion Premises, less
$9,000.00), for a total of Three Million One Hundred Ninety Three Thousand, Four
Hundred Seventy-Five Dollars ($3,193,475.00).
9. SPECIFIC IMPROVEMENTS BY LANDLORD. Landlord's obligation under Section 11.2
of the Lease to cause the Common Areas to comply with the Act and all other laws
applicable thereto shall apply to the restrooms on the second (2nd) floor of the
Building and the elevators. In addition, Landlord will, at its sole cost and
expense, improve the lobby in the area shown on Exhibit "A" attached hereto and
the restrooms on the second (2nd) floor of the Building in accordance with
Landlord's standard design criteria for the Building.
10. SPECIFIC TENANT IMPROVEMENTS. Tenant will, at its sole cost (but
subject to reimbursement from the Construction Allowance), be responsible for
any cosmetic improvements to the elevator cabs, subject to Landlord's
approval of the plans therefor.
11. CONTINUED EFFECTIVENESS OF LEASE. Except as provided herein, the Lease
remains in full force and effect.
IN WITNESS WHEREOF, the parties have executed this First Amendment as of the day
and year first above written.
"TENANT" AURORA BIOSCIENCES CORPORATION,
a Delaware corporation
By: /s/ XXXXXXX X. TOWER
-----------------------------------
Name:
-----------------------------------
Title: Senior Director, Finance
and Administration
-----------------------------------
"LANDLORD" AEW/LBA ACQUISITION CO. II, LLC,
a California limited liability company
By: LBA, Inc., a California corporation,
its agent
By: /s/ XXXXXX X. XXXXXXX
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
-2-
3
EXHIBIT "A"
EXPANSION PREMISES
[Depict Expansion Premises and the lobby area that Landlord will improve]
EXHIBIT "A"
4
SUMMARY OF BASIC LEASE INFORMATION AND DEFINITIONS
This SUMMARY OF BASIC LEASE INFORMATION AND DEFINITIONS ("SUMMARY") is hereby
incorporated into and made a part of the attached Multi-Tenant Industrial Lease
which pertains to the Building described in Section 1.4 below. All references in
the Lease to the "Lease" shall include this Summary. All references in the Lease
to any term defined in this Summary shall have the meaning set forth in this
Summary for such term. Any initially capitalized terms used in this Summary and
any initially capitalized terms in the Lease which are not otherwise defined in
this Summary shall have the meaning given to such terms in the Lease. If there
is any inconsistency between this Summary and the Lease, the provisions of the
Lease shall control.
1.1 LANDLORD'S ADDRESS: AEW/LBA Acquisition Co., LLC
c/o Xxxxxx Xxxxxxx Associates
00000 Xxxxx Xxxxxxxx Xxxxxxx, Xxxxx 000
Attn: Xx. Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
1.2 TENANT'S ADDRESS: Before Commencement Date:
Aurora Biosciences Corporation
00000 Xxxxx Xxxxxx Xxxxx Xxxx
Xxxxx 000
Xx Xxxxx, Xxxxxxxxxx 00000
Attn: Ms. Xxxxxxx Tower
Telephone: (000) 000-0000
After Commencement Date:
Aurora Biosciences Corporation
00000 Xxxxxxxxx Xxxx
Xx Xxxxx, Xxxxxxxxxx 00000
Attn: Ms. Xxxxxxx Tower
Telephone: (000) 000-0000
1.3 PROJECT: The industrial development located at 00000 Xxxxxxxxx Xxxx in
the City of La Jolla, County of San Diego, State of California, as
shown on the site plan attached hereto as Exhibit "A". The Project
includes all buildings, improvements and facilities, now or
subsequently located within such development from time to time,
including, without limitation, the Building currently located within
the Project, as depicted on the site plan attached hereto as Exhibit
"A".
1.4 BUILDING: A multi-tenant industrial building located in the Project,
containing 81,204 rentable square feet, the address of which is 00000
Xxxxxxxxx Xxxx, Xx Xxxxx, Xxxxxxxxxx 00000.
1.5 PREMISES: Those certain premises within the Building shown on the floor
plan attached hereto as Exhibit "B", containing approximately 55,000
rentable square feet on the ground and third floors.
1.6 MONTHLY OPERATING EXPENSE CHARGE: Tenant's Share of Operating Expenses
as provided in Section 4. Tenant's Share is initially 67.73% (see
Section 1.3).
1.7 COMMENCEMENT DATE: The earlier to occur of (i) September 15, 1997 or
(ii) the date Tenant commences business operations in the entire
Premises. Subject to Section 11.1, Landlord will deliver the Premises
to Tenant within two (2) business days following the full execution and
delivery of this Lease.
1.8 TERM: Eleven (11) years.
1.9 RENT:
YEAR ANNUAL BASIC RENT MONTHLY BASIC RENT
1 $1,287,000.00 $107,250.00
2 $1,325,610.00 $110,467.50
3 $1,365,378.20 $113,781.52
4 $1,406,339.50 $117,194.96
5 $1,448,529.60 $120,710.80
6 $1,491,985.40 $124,332.12
7 $1,536,744.90 $128,062.08
8 $1,582,847.20 $131,903.94
9 $1,630,332.60 $135,861.05
10 $1,679,242.50 $139,936.88
11 $1,729,619.70 $144,134.98
1.10 [INTENTIONALLY OMITTED]
-iii-
5
MULTI-TENANT INDUSTRIAL LEASE
(TRIPLE NET)
LANDLORD:
AEW/LBA ACQUISITION CO. II, LLC,
A CALIFORNIA LIMITED LIABILITY COMPANY
TENANT:
AURORA BIOSCIENCES CORPORATION,
A DELAWARE CORPORATION
6
STANDARD FORM MULTI-TENANT INDUSTRIAL LEASE
TABLE OF CONTENTS
SECTION TITLE PAGE
------- ----- ----
1. Premises...............................................................1
2. Term...................................................................2
3. Rent...................................................................3
4. Common Area; Operating Expenses........................................3
5. Security Deposit.......................................................6
6. Use....................................................................7
7. Payments and Notices...................................................9
8. Brokers................................................................9
9. Surrender; Holding Over...............................................10
10. Taxes.................................................................10
11. Possession; Condition of Premises; Repairs............................11
12. Alterations...........................................................12
13. Liens.................................................................13
14. Assignment and Subletting.............................................13
15. Entry by Landlord.....................................................15
16. Utilities and Services................................................15
17. Indemnification and Exculpation.......................................15
18. Damage or Destruction.................................................16
19. Eminent Domain........................................................17
20. Tenant's Insurance....................................................18
21. Landlord's Insurance..................................................19
22. Waivers of Subrogation................................................19
23. Tenant's Default and Landlord's Remedies..............................19
24. Landlord's Default....................................................21
25. Subordination.........................................................21
26. Estoppel Certificate..................................................21
27. Intentionally Omitted.................................................22
28. Modification and Cure Rights of Landlord's Mortgagees and Lessors.....22
29. Quiet Enjoyment.......................................................22
30. Transfer of Landlord's Interest.......................................22
31. Limitation on Landlord's Liability....................................22
32. Miscellaneous.........................................................22
33. Lease Execution.......................................................24
34. Intentionally Omitted.................................................24
EXHIBITS
EXHIBIT "A" Project Site Plan
EXHIBIT "B" Floor Plan
EXHIBIT "C" Work Letter Agreement
EXHIBIT "D" Sample Form of Notice of Lease Term Dates
EXHIBIT "E" Rules and Regulations
EXHIBIT "F" Sample Form of Tenant Estoppel Certificate
EXHIBIT "G" Tenant Environmental Questionnaire
-i-
7
STANDARD FORM MULTI-TENANT INDUSTRIAL LEASE
INDEX OF DEFINED TERMS
TERM PAGE
Abandonment...................................................................19
Acceptance.....................................................................6
Act...........................................................................12
Actual Statement...............................................................5
Applicable Laws................................................................7
Applicable Reassessment.......................................................11
Audit Notice...................................................................5
BMS............................................................................6
BOMA...........................................................................1
Common Area....................................................................3
Construction Allowance.................................................Exhibit C
Declaration....................................................................3
Draw Request...........................................................Exhibit C
Election Date..................................................................1
Estimate Statement.............................................................5
Evidence of Completion.................................................Exhibit C
Extension Option...............................................................2
Extension Options..............................................................2
Fair Market Rental.............................................................2
First Refusal Notice...........................................................1
First Refusal Space............................................................1
Force Majeure Delays..........................................................23
Hazardous Materials............................................................8
Increase Date..................................................................6
Indemnified Claims............................................................15
Initial Reduction Date.........................................................6
Landlord.......................................................................1
Landlord Delay.........................................................Exhibit C
Landlord Indemnified Parties...................................................8
LC Delivery Date...............................................................6
Lease..........................................................................1
Letter of Credit...............................................................6
Lilly..........................................................................6
Management Fee.................................................................3
Nondisturbance Condition......................................................21
Option Period..................................................................2
PCBs...........................................................................8
Permitted Business............................................................14
Permitted Transfer............................................................14
Permitted Transferee..........................................................14
Pre-Approved Change...........................................................12
Preliminary Plans......................................................Exhibit C
Proposition 13 Protection Amount..............................................11
Proposition 13 Purchase Price.................................................11
Real Property Taxes...........................................................10
Reassessment..................................................................11
Summary........................................................................1
Tax Increase..................................................................11
Tenant.........................................................................1
Tenant Change.................................................................12
Tenant Changes................................................................12
Tenant Improvement Allowance Items.....................................Exhibit C
Tenant Improvements....................................................Exhibit C
Tenant Indemnified Parties....................................................15
Tenant Parties................................................................15
Tenant's Election Notice.......................................................1
Tenant's Monthly Operating Expense Charge......................................5
Tenant's Parties...............................................................8
Tenant's Share.................................................................1
Transfer......................................................................13
Transfer Date.................................................................14
Transfer Notice...............................................................14
Transferee....................................................................14
-ii-
8
1.11 SECURITY DEPOSIT: See Section 5.
1.12 PERMITTED USE: General office, research and development, screen
development and screening services and the assembly and integration of
Tenant's ultra-high throughput screening system, and any other lawful
use incidental thereto.
1.13 BROKERS: Xxxx Xxxxxxx & Company representing Landlord and Xxxx Xxxxxxx
& Company representing Tenant.
1.14 INTEREST RATE: The lesser of: (a) the rate announced from time to time
by Xxxxx Fargo Bank or, if Xxxxx Fargo Bank ceases to exist or ceases
to publish such rate, then the rate announced from time to time by the
largest (as measured by deposits) chartered operating bank operating in
California, as its "prime rate" or "reference rate", plus two percent
(2%); or (b) the maximum rate permitted by law.
1.15 TENANT IMPROVEMENTS: The tenant improvements to be installed in the
Premises by Tenant as described in the Work Letter Agreement attached
hereto as Exhibit "C".
---------------------- ------------------------
Landlord's Initials Tenants Initials
-iv-
9
MULTI-TENANT INDUSTRIAL LEASE
This LEASE ("LEASE"), which includes the preceding Summary of Basic Lease
Information and Definitions ("SUMMARY") attached hereto and incorporated herein
by this reference, is made as of the 7th day of April, 1997, by and
between AEW/LBA ACQUISITION CO. II, LLC, a California limited liability company
("LANDLORD"), and AURORA BIOSCIENCES CORPORATION, a Delaware corporation
("TENANT").
1. PREMISES.
1.1 PREMISES. Landlord hereby leases to Tenant and Tenant hereby leases
from Landlord the Premises upon and subject to the terms, covenants and
conditions contained in this Lease to be performed by each party.
1.2 LANDLORD'S RESERVATION OF RIGHTS. Provided Tenant's use of and access
to the Premises is not interfered with in an unreasonable manner, Landlord
reserves the right from time to time to install, use, maintain, repair, replace
and relocate pipes, ducts, conduits, wires and appurtenant meters and equipment
above the ceiling surfaces, below the floor surfaces and within the walls of the
Building and the Premises.
1.3 TENANT'S SHARE. "TENANT'S SHARE" means a fraction, the numerator of
which is the total rentable square footage of the Premises and the denominator
of which is the total rentable square footage of all buildings in the Project,
including the Premises, which from time to time have been constructed within the
Project (commencing at such time as the occupants of such buildings commence to
pay rent or Operating Expenses or open for business, whichever is earlier). From
time to time at Landlord's option, Landlord's architect may determine and
redetermine the actual rentable square footage of the Premises and other
building(s) in question (calculated in accordance with ANSI/BOMA Z65.1-1996),
and thereupon Tenant's Share will be adjusted accordingly.
1.4 RIGHT OF FIRST REFUSAL. In the event that at any time during the first
two (2) years of the Term, Landlord receives a bona fide offer to lease any
space on the second (2nd) floor of the Building ("FIRST REFUSAL SPACE") that
Landlord desires to accept, Landlord shall give Tenant written notice ("FIRST
REFUSAL NOTICE") of such offer. The First Refusal Notice shall set forth the
offer and the terms thereof. On or before the date which is five (5) days after
Tenant's receipt of the First Refusal Notice (the "ELECTION DATE"), Tenant shall
deliver written notice to Landlord ("TENANT'S ELECTION NOTICE") pursuant to
which Tenant shall elect either to (i) lease the entire First Refusal Space
described in the First Refusal Notice upon the terms set forth in the First
Refusal Notice; (ii) decline to lease such First Refusal Space identified in the
First Refusal Notice, specifying that such decline is not based upon the terms
set forth in the First Refusal Notice, but upon Tenant's lack of need for such
First Refusal Space, in which event Landlord may lease such First Refusal Space
to any entity on any terms Landlord desires and Tenant's right of first refusal
with respect to the First Refusal Space specified in the First Refusal Notice
shall thereupon terminate and be of no further force or effect; or (iii) decline
to lease the First Refusal Space, specifying that such decline is based upon the
terms set forth in the First Refusal Notice, in which event Tenant shall also
specify in Tenant's Election Notice revised terms upon which Tenant would be
willing to lease such First Refusal Space. If Tenant does not so respond in
writing to the First Refusal Notice by the Election Date, Tenant shall be deemed
to have elected the option described in clause (ii) above. If Tenant timely
delivers to Landlord Tenant's Election Notice pursuant to clause (iii) above,
Landlord may elect either to: (a) lease such First Refusal Space to Tenant upon
the revised terms specified by Tenant in Tenant's Election Notice; or (b) lease
the First Refusal Space to any person or entity upon any terms Landlord desires;
provided, however, if (1) the terms of Landlord's proposed lease to said third
party are more favorable in any material way to the third party than those terms
proposed by Tenant in Tenant's Election Notice, or (2) the size of the First
Refusal Space to be leased to such third party is less than the size of the
First Refusal Space offered to Tenant, before entering into such third party
lease, Landlord shall notify Tenant of such more favorable terms (or such
reduced size) and Tenant shall have the right to lease the First Refusal Space
upon such more favorable terms (or as to such reduced size) by delivering
written notice thereof to Landlord within five (5) days after Tenant's receipt
of Landlord's notice. If Tenant does not elect to lease such space from Landlord
within said five (5) day period, Tenant shall be deemed to have elected the
option described in clause (ii) above. In determining whether the terms of
Landlord's proposed lease to a third party are more favorable to the third party
than those terms proposed by Tenant in Tenant's Election Notice, all concessions
shall be blended into an effective rental rate over the term of the proposed
lease to said third party and such effective rental rate shall be compared with
the effective rental rate of the terms proposed by Tenant in Tenant's Election
Notice. If Tenant leases any First Refusal Space pursuant to this Section 1.4,
as soon as reasonably possible after the Election Date, Landlord and Tenant
shall enter into a lease incorporating the terms of Tenant's lease of the First
Refusal Space. The right of first refusal set forth in this Section 1.4 shall be
exercisable by the original Tenant and a Permitted Transferee only if the
original Tenant or Permitted Transferee, as applicable, occupies the entire
Premises as of the date it exercises its right in accordance with the terms of
this Section 1.4. Tenant shall not have the right to exercise its right of first
refusal if, as of the date of the attempted exercise of such right by Tenant,
Tenant is in default under this Lease after the expiration of all applicable
cure periods.
1.5 VERIFICATION OF RENTABLE SQUARE FEET OF PREMISES AND BUILDING. For
purposes of this Lease, "rentable square feet" shall be calculated pursuant to
the Standard Method for Measuring Floor Area in Office Buildings, ANSI/BOMA
Z65.1--1996 for rentable area ("BOMA"), and Tenant acknowledges that the
rentable square footage of the Building may include all of, and the rentable
square footage of the Premises therefore may include a portion of, the square
footage of the ground floor Common Areas located within the Building and the
Common Area and other space in the Building dedicated to the service of the
Building. At either party's election by giving written notice thereof to the
other within sixty (60) days following the date hereof, the number of rentable
square feet of the Premises and the Building shall be subject to verification in
accordance with the provisions of this Section 1.5 by Xxxxxxxxx Systems. In the
event that Xxxxxxxxx Systems determines that the amounts thereof shall be
different from those set forth in this Lease, the parties shall modify all
amounts, percentages and figures appearing or referred to in this Lease to
conform to such corrected rentable square
10
footage, including Tenant's Share of Operating Expenses, Basic Rent, the
Management Fee and the Construction Allowance.
2. TERM.
2.1 TERM; NOTICE OF LEASE DATES. The Term of this Lease shall be for the
period designated in Section 1.8 of the Summary commencing on the Commencement
Date, and ending on the expiration of such period, unless the Term is sooner
terminated or extended as provided in this Lease. Notwithstanding the foregoing,
if the Commencement Date falls on any day other than the first day of a calendar
month then the term of this Lease will be measured from the first day of the
month following the month in which the Commencement Date occurs. Within ten (10)
days after Landlord's written request, Tenant shall execute a written
confirmation of the Commencement Date and expiration date of the Term in the
form of the Notice of Lease Term Dates attached hereto as Exhibit "D".
2.2 EARLY OCCUPANCY OF THE GROUND FLOOR. It is contemplated that Tenant may
complete the Tenant Improvements and commence business operations in a portion
of the ground floor of the Premises prior to the Commencement Date. In such
event, Tenant shall provide Landlord with prior notice of the date of completion
of such Tenant Improvements and commencement of business operations in that
portion of the ground floor of the Premises. Such early occupancy prior to the
Commencement Date shall be subject to all of the provisions of this Lease,
except that Tenant shall have no obligation to pay Monthly Basic Rent, the
Management Fee or Tenant's Share of Operating Expenses during such period, but
Tenant shall pay the water and utility charges set forth in Section 3.6.
2.3 OPTIONS TO EXTEND. Tenant shall have two (2) options (individually, an
"EXTENSION OPTION" and collectively, the "EXTENSION OPTIONS") to extend the Term
for a period (individually, an "OPTION PERIOD") of five (5) years each,
commencing upon the expiration of the initial Term and the expiration of the
first (1st) Option Period, as the case may be, upon the same terms and
conditions previously applicable, except for the grant of any exercised
Extension Option and Annual Basic Rent (which shall be determined as set forth
below). Each Extension Option may be validly exercised only by notice in writing
received by Landlord not later than six (6) months prior to commencement of the
Option Period; provided, however, that the Extension Option may be validly
exercised only if no material default (which default is continuing after notice
and the expiration of any applicable grace period provided for in this Lease)
exists as of the date of exercise and, at Landlord's option, as of the
commencement of the Option Period. If Tenant does not exercise an Extension
Option during the exercise period set forth above in strict accordance with the
provisions hereof, the Extension Options shall forever terminate and be of no
further force or effect. The Extension Options are personal to the original
Tenant and any Permitted Transferee, may not be exercised by any person or
entity other than the original Tenant or any Permitted Transferee, and shall
become null and void if the original Tenant assigns its interest in this Lease
or sublets any portion of the Premises to anyone other than a Permitted
Transferee.
Annual Basic Rent during each Option Period shall be equal to Fair Market Rental
as of the commencement of such Option Period. For purposes hereof, "FAIR MARKET
RENTAL" shall mean the base rent, including escalators, payable during the
relevant Option Period to a willing landlord by a willing tenant having a
similar financial responsibility, credit rating and capitalization as Tenant
then has, taking into account all other relevant factors for like and comparable
laboratory/office space improved with tenant improvements of like and comparable
quality to those then existing in the Premises in the Xxxxxx Xxxxx/University
Towne Centre market, but excluding the then-existing value of any Tenant
Improvements or Tenant Changes paid for by Tenant in excess of the Construction
Allowance. At least five (5) months prior to the Option Period, Landlord shall
notify Tenant of the Fair Market Rental as determined by Landlord. Any dispute
between the parties hereto with respect to the amount so determined shall be
resolved by appraisal, as set forth below; provided, however, that there shall
be deemed not to be such a dispute unless Tenant notifies Landlord thereof in
writing within two (2) months after Landlord so notifies Tenant of the Fair
Market Rental and Tenant sets forth in such notice Tenant's determination of
Fair Market Rental. If, in the event of a dispute, the appraisers have not
determined the Fair Market Rental by commencement of the Option Period, Tenant
shall pay as Annual Basic Rent the amount determined by Landlord until such time
as the Fair Market Rental has been determined by appraisal, whereupon Tenant
shall pay any additional amount due to Landlord based upon such subsequent
determination of Fair Market Rental. If the Annual Basic Rent so paid by Tenant
is higher than that ultimately determined by the appraisal process, then
Landlord shall reimburse such difference to Tenant.
If Tenant timely notifies Landlord in writing of Tenant's dispute regarding
Landlord's determination of the Fair Market Rental, then Fair Market Rental
shall be determined as follows. Landlord and Tenant shall each appoint one
appraiser who shall by profession be a real estate appraiser active over the
five (5) year period ending on the date of such appointment in the appraisal of
commercial properties in San Diego County and who shall not have been employed
or engaged by either party during said five (5) year period. Each such appraiser
shall be appointed within fifteen (15) days after Tenant notifies Landlord of
Tenant's dispute of Landlord's determination of Fair Market Rental. The two
appraisers so appointed shall within fifteen (15) days of the date of the
appointment of the last appointed appraiser agree upon and appoint a third
appraiser who shall be qualified under the same criteria set forth above. The
three appraisers shall, within thirty (30) days of the appointment of the third
appraiser, reach a decision as to whether the parties shall use Landlord's or
Tenant's submitted Fair Market Rental for the Premises, and shall notify
Landlord and Tenant thereof. Such decision shall be based upon the criteria and
variables set forth above. The new Annual Basic Rent shall thereafter be equal
to the Fair Market Rental of the Premises so selected by the appraisers. The
decision of the majority of the three appraisers shall be binding upon Landlord
and Tenant. If either Landlord or Tenant fails to appoint an appraiser within
the time period specified hereinabove, the appraiser appointed by one of them
shall reach a decision, notify Landlord and Tenant thereof, and such appraiser's
decision shall be binding upon Landlord and Tenant. If the two appraisers fail
to agree upon and appoint a third appraiser, the two appraisers shall request
the presiding judge of the Superior Court of San Diego, acting in his private
capacity, or the head of the local chapter of the leading appraisal group, to
appoint the third appraiser. Each party shall pay for its own appraiser and
one-half (1/2) of the cost of the third appraiser.
-2-
11
3. RENT.
3.1 BASIC RENT. Tenant agrees to pay Landlord, as basic rent for the
Premises, the Annual Basic Rent designated in Section 1.9 of the Summary. The
Annual Basic Rent shall be paid by Tenant in twelve (12) equal monthly
installments of Monthly Basic Rent in the amounts designated in Section 1.9 of
the Summary in advance on the first day of each and every calendar month during
the Term, except that the first full month's Monthly Basic Rent shall be paid
upon execution of this Lease by Tenant. Monthly Basic Rent for any partial month
shall be prorated in the proportion that the number of days this Lease is in
effect during such month bears to the actual number of days in such month.
3.2 ADDITIONAL RENT. All amounts and charges payable by Tenant under this
Lease in addition to the Annual Basic Rent described in Section 3.1 above shall
be considered additional rent for the purposes of this Lease, and the word
"rent" in this Lease shall include such additional rent unless the context
specifically or clearly implies that only the Annual Basic Rent is referenced.
The Annual Basic Rent and additional rent shall be paid to Landlord as provided
in Section 7, without any prior demand therefor and without any deduction or
offset except as otherwise provided herein, in lawful money of the United States
of America.
3.3 LATE PAYMENTS. Late payments of Monthly Basic Rent and/or any item of
additional rent will be subject to interest and a late charge as provided in
Section 23.7 below.
3.4 MANAGEMENT FEE. Tenant shall pay to Landlord as additional rent an
annual management fee equal to [TO BE BASED UPON .48/RSF WHEN RSF IS DETERMINED
PRIOR TO LEASE EXECUTION] (the "MANAGEMENT FEE"). The Management Fee shall be
increased on each anniversary of the Commencement Date (or the first day of the
month following the anniversary of the Commencement Date if the Commencement
Date is not the first day of a month) by an amount equal to three percent (3%)
of the Management Fee payable immediately prior to such adjustment. In the event
Tenant exercises the First Negotiation Right under Section 1.4 and leases the
entire Building, the Management Fee shall thereafter be equal to two percent
(2%) of the Annual Basic Rent for the Premises (taking into account the annual
increases in Annual Basic Rent and the fair market value increases in Annual
Basic Rent during the Extension Options). The Management Fee shall be payable in
twelve (12) equal monthly installments together with Monthly Rent.
3.5 TRIPLE-NET LEASE. Except as specifically set forth herein, all rent
shall be absolutely net to Landlord so that this Lease shall yield net to
Landlord, the rent to be paid each month during the Term of this Lease.
Accordingly, except as specifically set forth herein, all costs, expenses and
obligations of every kind or nature whatsoever relating to the Premises, and
Tenant's Share of all costs, expenses and obligations of every kind or nature
whatsoever relating to the remaining portion of the Project, which may arise or
become due during the Term of this Lease shall be paid by Tenant. Nothing herein
contained shall be deemed to require Tenant to pay or discharge any liens or
mortgages of any character whatsoever which may exist or hereafter be placed
upon the Project by an affirmative act or omission of Landlord.
3.6 PRE-COMMENCEMENT DATE CHARGES. From and after the delivery of the
Premises to Tenant and continuing until the Commencement Date, Tenant shall pay
to Landlord, as additional rent and within thirty (30) days following receipt of
an invoice therefor, all water and utility charges for the Project.
4. COMMON AREA; OPERATING EXPENSES.
4.1 DEFINITION OF COMMON AREA. The term "COMMON AREA," as used in this
Lease means all areas and the improvements thereon within the exterior
boundaries of the Project now or later made available for the general use of
Landlord, Tenant and other persons entitled to occupy floor area in the Project
and their customers, including, without limitation, the parking facilities of
the Project, loading and unloading areas, trash areas, roadways, sidewalks,
walkways, parkways, driveways, landscaped areas, and similar areas and
facilities situated within the Project which are not reserved for the exclusive
use of any Project occupants and the exterior surfaces and roofs of all
buildings (including the Building) located within the Project. Common Area shall
not include (i) the entryway to a tenant's premises, (ii) any improvements
installed by a tenant outside of its premises, whether with or without
Landlord's knowledge or consent, or (iii) any areas or facilities that are
included in the description of premises leased to a tenant, but Common Area
shall include the ground floor entryway threshold, ground floor lobby, elevators
and all stairwells (except the middle stairwell).
4.2 MAINTENANCE AND USE OF COMMON AREA. The manner in which the Common Area
shall be maintained shall be solely determined by Landlord, but shall be
consistent with the standard of such space in similar office and research and
development projects in the vicinity. If any owner or tenant of any portion of
the Project maintains Common Area located upon its parcel or demised premises
(Landlord shall have the right in its sole discretion to allow any purchaser or
tenant to so maintain Common Area located upon its parcel or demised premises
and to be excluded from participation in the payment of Common Area Expenses as
provided below), Landlord shall not have any responsibility for the maintenance
of that portion of the Common Area and Tenant shall have no claims against
Landlord arising out of any failure of such owner or tenant to so maintain its
portion of the Common Area. The use and occupancy by Tenant of the Premises
shall include the right to use the Common Area (except areas used in the
maintenance or operation of the Project), in common with Landlord and other
tenants of the Project and their customers and invitees, subject to (i) any
covenants, conditions and restrictions now or hereafter of record (the
"DECLARATION"), and (ii) such reasonable, non-discriminatory rules and
regulations concerning the Project as may be established by Landlord from time
to time including, without limitation, the Rules and Regulations attached hereto
as Exhibit "E". Tenant agrees to promptly comply with all such rules and
regulations and any reasonable, non-discriminatory amendments thereto upon
receipt of written notice from Landlord. Notwithstanding anything herein to the
contrary, Landlord agrees that the Rules and Regulations attached to this Lease
as Exhibit "E" shall not be modified or added to by Landlord in such a way as to
unreasonably interfere with Tenant's permitted use of the Premises as set forth
in this Lease.
4.3 CONTROL OF AND CHANGES TO COMMON AREA. Landlord shall have the sole and
exclusive control of the Common Area, as well as the right to make reasonable
changes to the Common Area. Provided Landlord does not materially interfere with
Tenant's use of and access to the Premises, Landlord's rights shall include, but
not be limited to, the right to
-3-
12
(a) restrain the use of the Common Area by unauthorized persons; (b) cause
Tenant to remove or restrain persons from any unauthorized use of the Common
Area if they are using the Common Area by reason of Tenant's presence in the
Project; (c) utilize from time to time any portion of the Common Area for
promotional, entertainment, and related matters; (d) temporarily close any
portion of the Common Area for repairs, improvements or alterations, to
discourage non-customer use, to prevent public dedication or an easement by
prescription from arising, or for any other reason deemed appropriate in
Landlord's judgment; and (e) reasonably change the shape and size of the Common
Area, add, eliminate or change the location of improvements to the Common Area,
including, without limitation, buildings, lighting, parking areas, landscaped
areas, roadways, walkways, drive aisles and curb cuts.
4.4 OPERATING EXPENSES. Throughout the Term of this Lease, commencing on
the Commencement Date, Tenant agrees to pay Landlord as additional rent in
accordance with the terms of this Section 4, Tenant's Share of Operating
Expenses for the taxes and insurance for the Project and for all costs and
expenses for the operation, maintenance, repair, and replacement of the Project
including, without limitation: (i) any form of real property tax, assessment,
license fee, license tax, business license fee, commercial rental tax, levy,
charge, improvement bond or similar imposition of any kind or nature imposed by
any authority having the direct power to tax, including any city, county, state
or federal government, or any school, agricultural, lighting, drainage or other
improvement or special assessment district thereof; (ii) any and all assessments
under any covenants, conditions and restrictions affecting the Project; (iii)
water, sewer and other utility charges; (iv) costs of insurance obtained by
Landlord pursuant to Section 21 of this Lease; (v) waste disposal and janitorial
services; (vi) security; (vii) labor; (viii) management costs including, without
limitation: (A) wages and salaries (and payroll taxes and similar charges ) of
property management employees, and (B) management office rental, supplies,
equipment and related operating expenses and commercially reasonable
management/administrative fees; (ix) supplies, materials, equipment and tools
including rental of personal property; (x) repair and maintenance of the
structural portions of the buildings within the Project, including the plumbing,
heating, ventilating, air-conditioning and electrical systems installed or
furnished by Landlord; (xi) maintenance, sweeping, repairs, resurfacing, and
upkeep of all parking and other Common Areas; (xii) amortization on a straight
line basis over the useful life [together with interest at the Interest Rate on
the unamortized balance] of all capitalized expenditures which are: (A)
reasonably intended to produce a reduction in operating charges or energy
consumption; or (B) required under any governmental law or regulation that was
not applicable to the Project as of the Commencement Date (however, if such
expenditure by Landlord is required solely due to Tenant's particular use,
occupancy or alteration of the Premises, then regardless of when such law or
regulation became in effect, Tenant shall be responsible for all of such
expenditure); or (C) for replacement or restoration of any Project equipment
and/or improvements needed to operate and/or maintain the Project at the same
quality levels as prior to the replacement or restoration; (xiii) gardening and
landscaping; (xiv) maintenance of signs (other than signs of tenants of the
Project); (xv) personal property taxes levied on or attributable to personal
property used in connection with the Common Areas; (xvi) reasonable accounting,
audit, verification, legal and other consulting fees; and (xvii) any other costs
and expenses of repairs, maintenance, painting, lighting, cleaning, and similar
items, including appropriate reserves.
Notwithstanding anything to the contrary in the definition of Operating Expenses
set forth in this Lease, Operating Expenses shall not include the following:
(a) depreciation on the Building and Project;
(b) interest, principal, points and fees on debt or amortization on any
mortgages and deeds of trust or other debt instruments secured by the
Building or the Project or any underlying ground lease;
(c) costs of repairs and general maintenance paid from insurance proceeds
but excluding the amount of any deductibles paid by Landlord;
(d) repairs and replacements covered by warranties or guaranties (to the
extent actually collected by Landlord); and the cost of any repairs,
alterations and additions made to rectify or correct any major defects
or significant design errors relating to the initial design or
construction of the Building and Project;
(e) costs of items considered capital repairs, replacements, improvements
and equipment under generally accepted accounting principles
consistently applied except for those items expressly permitted in
clause (xii) above;
(f) costs of special services rendered to individual tenants (including
Tenant) for which a special charge is made to the tenant(s) receiving
such special services;
(g) costs of improvements for other tenants in the Building or Project;
(h) costs of the Landlord for which a tenant is obligated to separately
reimburse Landlord (as opposed to reimbursement of a pro rata share
thereof as an Operating Expense), including, for example, taxes and
property insurance premiums on improvements for tenants of the Building
and Project that are above the building standard;
(i) costs incurred by Landlord in connection with the enforcement of the
terms and conditions of any lease in the Building or Project;
(j) all costs, expenses, penalties, damages, fines and judgments from any
investigation, site monitoring, containment, cleanup, removal,
restoration or other remedial work of any kind or nature required under
any local, state or federal law or regulation, any judicial order, or
by any governmental or nongovernmental entity or person as a result of
or in connection with any Hazardous Material or Hazardous Materials
contamination;
(k) Landlord's general corporate overhead and general and administrative
expenses;
-4-
13
(l) Marketing costs, including, without limitation, leasing commissions,
attorneys' fees, space planning costs and other costs and expenses
incurred in connection with the leasing of the Building or Project; and
(m) Overhead and profit increment paid to Landlord and Landlord's
subsidiaries for goods and/or services in or to the Building or Project
to the extent the same exceeds the costs of such goods and/or services
rendered by unaffiliated third parties on a competitive basis.
4.5 TENANT'S MONTHLY OPERATING EXPENSE CHARGE. From and after the
Commencement Date, Tenant shall pay to Landlord, on the first day of each
calendar month during the Term of this Lease, Tenant's share of an amount
estimated by Landlord to be the Monthly Operating Expenses for the Project for
that month ("TENANT'S MONTHLY OPERATING EXPENSE CHARGE").
4.6 ESTIMATE STATEMENT. Prior to the Commencement Date and on or about
March 1st of each subsequent calendar year during the Term of this Lease,
Landlord will endeavor to deliver to Tenant a statement ("ESTIMATE STATEMENT")
wherein Landlord will estimate both the Operating Expenses and Tenant's Monthly
Operating Expense Charge for the then current calendar year. Tenant agrees to
pay Landlord, as additional rent, Tenant's estimated Monthly Operating Expense
Charge each month thereafter, beginning with the next installment of rent due,
until such time as Landlord issues a revised Estimate Statement or the Estimate
Statement for the succeeding calendar year; except that, concurrently with the
regular monthly rent payment next due following the receipt of each such
Estimate Statement, Tenant agrees to pay Landlord an amount equal to one monthly
installment of Tenant's estimated Monthly Operating Expense Charge (less any
applicable Operating Expenses already paid) multiplied by the number of months
from January, in the current calendar year, to the month of such rent payment
next due, all months inclusive. If at any time during the Term of this Lease,
but not more often than quarterly, Landlord reasonably determines that Tenant's
Share of Operating Expenses for the current calendar year will be greater than
the amount set forth in the then current Estimate Statement, Landlord may issue
a revised Estimate Statement and Tenant agrees to pay Landlord, within ten (10)
days of receipt of the revised Estimate Statement, the difference between the
amount owed by Tenant under such revised Estimate Statement and the amount owed
by Tenant under the original Estimate Statement for the portion of the then
current calendar year which has expired. Thereafter Tenant agrees to pay
Tenant's Monthly Operating Expense Charge based on such revised Estimate
Statement until Tenant receives the next calendar year's Estimate Statement or a
new revised Estimate Statement for the current calendar year.
4.7 ACTUAL STATEMENT. By March 1st of each calendar year during the Term of
this Lease, Landlord will also endeavor to deliver to Tenant a statement
("ACTUAL STATEMENT") which states Tenant's Share of the actual Operating
Expenses for the preceding calendar year. If the Actual Statement reveals that
Tenant's Share of the actual Operating Expenses is more than the total
Additional Rent paid by Tenant for Operating Expenses on account of the
preceding calendar year, Tenant agrees to pay Landlord the difference in a lump
sum within ten (10) days of receipt of the Actual Statement. If the Actual
Statement reveals that Tenant's Share of the actual Operating Expenses is less
than the Additional Rent paid by Tenant for Operating Expenses on account of the
preceding calendar year, Landlord will credit any overpayment toward the next
monthly installment(s) of Tenant's Share of the Operating Expenses due under
this Lease. Such obligation will be a continuing one which will survive the
expiration or earlier termination of this Lease. Prior to the expiration or
sooner termination of the Lease Term and Landlord's acceptance of Tenant's
surrender of the Premises, Landlord will have the right to estimate the actual
Operating Expenses for the then current Lease Year and to collect from Tenant
prior to Tenant's surrender of the Premises, Tenant's Percentage of any excess
of such actual Operating Expenses over the estimated Operating Expenses paid by
Tenant in such Lease Year.
4.8 MISCELLANEOUS. Any delay or failure by Landlord in delivering any
Estimate Statement or Actual Statement pursuant to this Section 4 will not
constitute a waiver of its right to require an increase in additional rent for
Operating Expenses nor will it relieve Tenant of its obligations pursuant to
this Section 4, except that Tenant will not be obligated to make any payments
based on such Estimate Statement or Actual Statement until ten (10) days after
receipt of such Estimate Statement or Actual Statement. If Tenant does not
object to any Actual Statement within ninety (90) days after Tenant receives any
such statement, such statement will be deemed final and binding on Tenant. Even
though the Term has expired and Tenant has vacated the Premises, when the final
determination is made of Tenant's Share of the actual Operating Expenses for the
year in which this Lease terminates, Tenant agrees to promptly pay any increase
due over the estimated expenses paid and, conversely, any overpayment made in
the event said expenses decrease shall promptly be rebated by Landlord to
Tenant. Such obligation will be a continuing one which will survive the
expiration or termination of this Lease. Prior to the expiration or sooner
termination of the Lease Term and Landlord's acceptance of Tenant's surrender of
the Premises, Landlord will have the right to estimate the actual Operating
Expenses for the then current Lease Year and to collect from Tenant prior to
Tenant's surrender of the Premises, Tenant's Share of any excess of such actual
Operating Expenses over the estimated Operating Expenses paid by Tenant in such
Lease Year.
4.9 BOOKS AND RECORDS; AUDIT. Landlord shall maintain books and records of
the Operating Expenses in accordance with sound accounting and management
practices. If Tenant wishes to audit the amount of Operating Expenses or any
component thereof as to a particular year, Tenant must deliver to Landlord
written notice of Tenant's desire to audit Landlord's books and records ("AUDIT
NOTICE"). Such audit will be conducted (i) within sixty (60) days following
delivery of the Audit Notice, (ii) during normal business hours at Landlord's
business offices or at the management office of the Building; (iii) on
consecutive business days until completed; (iv) in an expeditious manner so as
to minimize interference with Landlord's books and records at Tenant's sole cost
and expense; and (v) by an auditor reasonably acceptable to Landlord and Tenant
(without limiting other reasons, it will be reasonable for Landlord to
disapprove an auditor on the basis that the auditor is paid on a contingency fee
basis). Tenant shall pay in a timely manner as required by this Lease any
amounts stated as due on the Actual Statement, provided that such payment shall
not waive any right to audit and/or dispute by Tenant as set forth herein.
Tenant agrees to deliver to Landlord the results of any such audit within ninety
(90) days of completion of the audit. If Tenant does not deliver an Audit Notice
as to any Actual Statement within the time frames set forth hereinabove, then
such Actual Statement will be conclusively binding on Tenant.
-5-
14
If Tenant's audit reveals that Landlord has overcharged Tenant, then within
thirty (30) days after the results of such audit are made available to Landlord,
Landlord shall reimburse Tenant the amount of such overcharge. If the audit
reveals that Tenant was undercharged, then within thirty (30) days after the
results of the audit are made available to Tenant, Tenant shall reimburse
Landlord the amount of such undercharge. Tenant shall pay the cost of such
audit, provided that if the audit reveals that Landlord's determination of
Tenant's Share of Operating Expenses as set forth in an Actual Statement was in
error in Landlord's favor by more than five percent (5%) of the amount paid by
Tenant prior to delivering the Audit Notice, then Landlord shall pay the
reasonable, third-party cost of such audit incurred by Tenant within thirty (30)
days of demand by Tenant. To the extent Landlord must pay the cost of such
audit, such cost shall not exceed a reasonable hourly charge for a reasonable
amount of hours spent by such third-party in connection with the audit. Landlord
shall not be liable for any contingency fee payments to any consultants of
Tenant. Tenant agrees to keep the results of the audit and any settlement
resulting therefrom confidential and will cause its agents, employees and
contractors to keep the same confidential.
5. SECURITY DEPOSIT.
5.1 DELIVERY OF LETTER OF CREDIT. Within ten (10) days following the
delivery of the Premises to Tenant ("LC DELIVERY DATE"), and again within ten
(10) days following the date Landlord gives Tenant written notice that Landlord
has disbursed $1,250,000.00 of the Construction Allowance (the "INCREASE DATE"),
Tenant shall deliver to Landlord the Security Deposit in the form of an
unconditional, irrevocable and renewable letter of credit ("LETTER OF CREDIT")
in favor of Landlord in form and issued by a bank with an office (capable of
honoring a demand on the Letter of Credit) located in Orange County or San Diego
County, California, reasonably satisfactory to Landlord, in the applicable
principal amount specified in Section 5.2 below, as security for the faithful
performance and observance by Tenant of the terms, provisions and conditions of
this Lease. The Letter of Credit shall state that an authorized officer or other
representative of Landlord may make demand on Landlord's behalf for the amount
owed by Tenant to Landlord, and that the issuing bank must immediately honor
such demand, without qualification or satisfaction of any conditions, except the
proper identification of the party making such demand and a certification that
Tenant is in default under this Lease, which default is continuing after notice
and expiration of any applicable grace period required by this Lease. In
addition, the Letter of Credit shall indicate that it is transferable in its
entirety by Landlord as beneficiary and that upon receiving written notice of
transfer, and upon presentation to the issuer of the original Letter of Credit,
the issuer will reissue the Letter of Credit naming such transferee as the
beneficiary. If the term of the Letter of Credit held by Landlord will expire
prior to the last day of the Term and it is not extended, or a new Letter of
Credit for an extended period of time is not substituted, within thirty (30)
days prior to the expiration of the Letter of Credit, then Landlord may deliver
written notice of such fact to Tenant and if Tenant does not extend the Letter
of Credit or substitute a new Letter of Credit within ten (10) days after
Tenant's receipt of such notice from Landlord, Landlord shall be entitled to
make demand for the principal amount of said Letter of Credit and, thereafter,
to hold such funds in accordance with Section 5.3 below. Tenant may, at any
time, substitute the Letter of Credit by delivering to Landlord cash in the
amount of the required principal of the Letter of Credit.
5.2 INCREASE AND REDUCTION IN PRINCIPAL AMOUNT OF LETTER OF CREDIT. The
principal amount of the Letter of Credit shall be as follows:
REQUIRED
PORTION OF TERM PRINCIPAL AMOUNT
LC Delivery Date - Increase Date` $1,250,000.00
Increase Date - Initial Reduction Date $2,500,000.00
First year following Initial Reduction Date $1,000,000.00
Second year following Initial Reduction Date $666,666.00
Third Year following Initial Reduction Date $333,333.00
Remaining Term Equal to then-current
Monthly Basic Rent
The "INITIAL REDUCTION DATE" shall be the date that the satisfaction of the
conditions described in clause (a) below and either of clauses (b) and (c) below
occur:
(a) Tenant's receipt of payment from Xxx Xxxxx ("XXXXX") and Bristol Xxxxx
Squibb ("BMS") upon Acceptance by each company of the Automated Storage
and Retrieval module for the Ultra-High Throughput Screening System.
Evidence of payment will be provided by Tenant and will include a copy
of the check or wire transfer notification and written confirmation by
Lilly and BMS that such payment is made for Acceptance of the Automated
Storage and Retrieval module. "Acceptance" is defined per existing
contract language with BMS and Lilly, which Tenant represents and
warrants to Landlord is accurately described as follows:
(i) BMS: When BMS has determined that all Deliverables for the
Automated Storage and Retrieval Module have successfully
conformed to or satisfied the Specifications in all material
respects, BMS shall give Aurora written notice thereof
("ACCEPTANCE"), in which event BMS shall become obligated to
pay such amounts as triggered under this Agreement as a result
hereof.
(ii) LILLY: When the LILLY UHTSS Steering Committee has determined
that the Automated Storage and Retrieval module meet the
Specifications for such module. Upon Completion (Acceptance)
of the Automated Storage and retrieval module at Xxxxx, Xxxxxx
shall give Lilly written notice and Lilly shall become
obligated to pay such amounts provided for in the agreement.
-6-
15
(b) Tenant's entering into an agreement with another major pharmaceutical
company that is similar in scope and nature to Tenant's existing
agreements with BMS and Xxx Xxxxx concerning the production of Tenant's
Ultra-HTS system.
(c) Completion of an initial public offering of securities in Tenant traded
on a United States stock exchange raising at least Ten Million Dollars
($10,000,000.00) in equity.
Notwithstanding the foregoing, if as of the applicable reduction date set forth
above, (i) Tenant is in material default under this Lease, or (ii) Landlord has
given Tenant written notice that circumstances exist that would, with notice or
lapse of time, or both, constitute a material default, then the principal amount
shall not be reduced, unless and until such default or circumstances shall have
been fully cured, at which time the principal amount may be reduced as
hereinabove described.
5.3 APPLICATION OF LETTER OF CREDIT. The Letter of Credit shall be held by
Landlord as security for the faithful performance by Tenant of all of the terms,
covenants and conditions of this Lease. If Tenant commits a default with respect
to any provision of this Lease, Landlord may (but shall not be required to) draw
upon the Letter of Credit and use, apply or retain all or any part of the
proceeds for the payment of any sum which is in default, or for the payment of
any other amount which Landlord may spend or become obligated to spend by reason
of Tenant's default or to compensate Landlord for any loss or damage which
Landlord may suffer by reason of Tenant's default. If any portion of the Letter
of Credit is so used or applied, Tenant shall, within ten (10) days after demand
therefor, post an additional Letter of Credit in an amount sufficient to restore
the Letter of Credit to the principal amount required under Section 5.2 above.
Landlord shall not be required to keep any proceeds from the Letter of Credit
separate from its general funds and Tenant shall not be entitled to any interest
on such proceeds. Should Landlord sell its interest in the Premises during the
Term and if Landlord deposits with the purchaser thereof the Letter of Credit or
any proceeds of the Letter of Credit, thereupon Landlord shall be discharged
from any further liability with respect to the Letter of Credit and said
proceeds.
6. USE.
6.1 GENERAL. Tenant shall use the Premises solely for the Permitted Use
specified in Section 1.12 of the Summary, and shall not use or permit the
Premises to be used for any other use or purpose whatsoever without Landlord's
consent, which shall not be unreasonably withheld. Tenant shall observe and
comply with the "Rules and Regulations" attached hereto as Exhibit "E", and all
reasonable non-discriminatory modifications thereof and additions thereto from
time to time put into effect and furnished to Tenant by Landlord. Landlord shall
endeavor to uniformly enforce the Rules and Regulations, but shall have no
liability to Tenant for the violation or non-performance by any other tenant or
occupant of the Project of any such Rules and Regulations. Tenant shall, at its
sole cost and expense, observe and comply with all requirements of any board of
fire underwriters or similar body relating to the Premises, and all laws,
statutes, codes, rules and regulations now or hereafter in force relating to or
affecting the use, occupancy, alteration or improvement (whether structural or
non-structural) of the Premises, including, without limitation, the provisions
of Title III of the Americans with Disabilities Act of 1990 as it pertains to
Tenant's use, occupancy, improvement and alteration of the Premises. Tenant
shall not use or allow the Premises to be used (a) in violation of the
Declaration or any other recorded covenants, conditions and restrictions
affecting the Project or of any law or governmental rule or regulation, or of
any certificate of occupancy issued for the Premises or the Building, or (b) for
any improper, immoral, unlawful or reasonably objectionable purpose. Tenant
shall not do or permit to be done anything which will obstruct or unreasonably
interfere with the rights of other tenants or occupants of the Project, or
injure or annoy them. Tenant shall not cause, maintain or permit any nuisance
in, on or about the Premises, the Building or the Project, nor commit or suffer
to be committed any waste in, on or about the Premises. Tenant and Tenant's
employees and agents shall not solicit business in the Common Area, nor shall
Tenant distribute any handbills or other advertising matter in the Common Area.
Notwithstanding the foregoing or anything to the contrary contained in this
Lease, Tenant shall not be responsible for compliance with any laws, statutes,
codes, ordinances, rules, regulations or other governmental directives
(collectively, "APPLICABLE LAWS") where such compliance is not specifically
related to or required by Tenant's particular use, occupancy or alteration of
the Premises. For example, if any governmental authority should require the
Building or the Premises to be structurally strengthened against earthquake, or
should require the removal of asbestos from the Premises and such measures are
imposed as a general requirement applicable to all tenants rather than as a
condition to or a result of Tenant's particular use, occupancy or alteration of
the Premises, such work shall be performed by and (except to the extent such
cost is a permissible Operating Expense) at the sole cost of Landlord.
6.2 PARKING. Tenant and its employees shall park their vehicles only in
those portions of the Common Area from time to time designated for such purpose
by Landlord. Subject to Sections 18 and 19, Landlord shall maintain a parking
ratio at the Project of at least 3.5 spaces per 1000 rentable square feet of
leased space at the Project, and shall designate five (5) spaces near the front
entrance of the Building for use by visitors of the Building. The use of the
parking area shall be subject to the Parking Rules and Regulations attached
hereto as Exhibit "E" and any other reasonable, non-discriminatory rules and
regulations adopted by Landlord from time to time. Tenant shall be responsible
for ensuring that its employees comply with all the provisions of this Section
and such other parking rules and regulations as may be adopted and implemented
by Landlord from time to time.
6.3 SIGNS, AWNINGS AND CANOPIES. Tenant will not place or suffer to be
placed or maintained on the roof or on any exterior door, wall or window (or
within 48 inches of any window) of the Premises any sign, awning or canopy, or
advertising matter on the glass of any window or door of the Premises without
Landlord's prior written consent which shall not be unreasonably withheld.
Tenant agrees to maintain any such sign, awning, canopy, decoration, lettering
or advertising matter as may be approved by Landlord in good condition and
repair at all times. At the expiration or earlier termination of this Lease, at
Landlord's election, Tenant shall remove all signs, awnings, canopies,
decorations, lettering and advertising and shall repair any damage to the
Building, the Premises or the Project resulting therefrom all at Tenant's sole
cost and expense. If Tenant fails to maintain any such approved sign, awning,
decoration, lettering, or advertising, Landlord may do so and Tenant shall
reimburse Landlord for such cost. If, without Landlord's prior written
-7-
16
consent, Tenant installs any sign, awning, decoration, lettering or advertising,
or fails to remove any such item(s) at the expiration or earlier termination of
this Lease, Landlord may have such item(s) removed and stored and may repair any
damage to the Building, the Premises or the Project at Tenant's expense. The
removal, repair and/or storage costs shall bear interest until paid at the
maximum rate allowed by law.
Notwithstanding the foregoing, Tenant shall have the non-exclusive right to
place its name on the monument sign at the Project and the non-exclusive right
to place its name on a sign on the Building, all in compliance with applicable
laws and subject to Landlord's reasonable approval. Subject to compliance with
all applicable laws and Landlord's reasonable approval, Tenant may replace the
existing monument sign with a larger one, and upon the lien-free completion
thereof Landlord will reimburse Tenant one-third (1/3) of the pre-approved
actual costs thereof. Tenant's signage on the monument sign will be in a
priority position over other tenants of the Project. Tenant's rights under this
paragraph shall be personal to Tenant and any Permitted Transferee.
6.4 HAZARDOUS MATERIALS.
(a) Except for ordinary and general office supplies, such as copier toner,
liquid paper, glue, ink and common household cleaning materials (some
or all of which may constitute "Hazardous Materials" as defined in this
Lease), Tenant agrees not to cause or permit any Hazardous Materials to
be brought upon, stored, used, handled, generated, released or disposed
of on, in, under or about the Premises, the Building, the Common Areas
or any other portion of the Project by Tenant, its agents, employees,
subtenants, assignees, licensees, contractors or invitees
(collectively, "TENANT'S PARTIES"), without the prior written consent
of Landlord, which consent Landlord may withhold in its sole and
absolute discretion. Concurrently with the execution of this Lease,
Tenant agrees to complete and deliver to Landlord an Environmental
Questionnaire in the form of Exhibit "G" attached hereto. Upon the
expiration or earlier termination of this Lease, Tenant agrees to
promptly remove from the Premises, the Building and the Project, at its
sole cost and expense, any and all Hazardous Materials, including any
equipment or systems containing Hazardous Materials which are
installed, brought upon, stored, used, generated or released upon, in,
under or about the Premises, the Building and/or the Project or any
portion thereof by Tenant or any of Tenant's Parties. To the fullest
extent permitted by law, Tenant agrees to promptly indemnify, protect,
defend and hold harmless Landlord and Landlord's partners, officers,
directors, employees, agents, successors and assigns (collectively,
"LANDLORD INDEMNIFIED PARTIES") from and against any and all claims,
damages, judgments, suits, causes of action, losses, liabilities,
penalties, fines, expenses and costs (including, without limitation,
clean-up, removal, remediation and restoration costs, sums paid in
settlement of claims, attorneys' fees, consultant fees and expert fees
and court costs) which arise or result from the presence of Hazardous
Materials on, in, under or about the Premises, the Building or any
other portion of the Project and which are caused or permitted by
Tenant or any of Tenant's Parties. Tenant agrees to promptly notify
Landlord of any release of Hazardous Materials in the Premises, the
Building or any other portion of the Project which Tenant becomes aware
of during the Term of this Lease, whether caused by Tenant or any other
persons or entities. In the event of any release of Hazardous Materials
caused or permitted by Tenant or any of Tenant's Parties, Landlord
shall have the right, but not the obligation, to cause Tenant to
immediately take all steps Landlord deems necessary or appropriate to
remediate such release and prevent any similar future release to the
satisfaction of Landlord. At all times during the Term of this Lease,
Landlord will have the right, but not the obligation, to enter upon the
Premises to inspect, investigate, sample and/or monitor the Premises to
determine if Tenant is in compliance with the terms of this Lease
regarding Hazardous Materials. As used in this Lease, the term
"HAZARDOUS MATERIALS" shall mean and include any hazardous or toxic
materials, substances or wastes as now or hereafter designated under
any law, statute, ordinance, rule, regulation, order or ruling of any
agency of the State, the United States Government or any local
governmental authority, including, without limitation, asbestos,
petroleum, petroleum hydrocarbons and petroleum based products, urea
formaldehyde foam insulation, polychlorinated biphenyls ("PCBs"), and
freon and other chlorofluorocarbons. The provisions of this Section 6.4
will survive the expiration or earlier termination of this Lease.
(b) Landlord represents and warrants to Tenant that as of the date of this
Lease and to Landlord's actual knowledge and except as disclosed in
that certain Xxxxx 0 dated December 18, 1996, prepared by Dames & Xxxxx
(i) there are no Hazardous Materials in, on, under, below or otherwise
located on or about the Premises in violation of applicable law, and
(ii) there has been no release or migration of any Hazardous Materials
in violation of applicable law onto, beneath, upon or about the
Premises.
(c) Notwithstanding the foregoing, Landlord consents to the storage and use
at the Premises, and disposal from the Premises, of certain Hazardous
Materials upon the following conditions:
(i) The Hazardous Materials are only those materials that are
necessary from time to time for the initial Permitted Use
described in Section 1.12 of the Summary;
(ii) The storage, use and disposal of the Hazardous Materials
complies with all applicable laws, and Tenant provides to
Landlord promptly following the preparation thereof a copy of
Tenant's quarterly injury and illness prevention program
inspection (which inspection Tenant agrees to perform on at
least a quarterly basis);
(iii) The storage, use and disposal of the Hazardous Materials does
not result in objectionable odors or health hazards to other
tenants or occupants of the Project;
(iv) Tenant obtains and maintains all permits and approvals
necessary for the storage, use and disposal of the Hazardous
Materials;
(v) Tenant has not assigned this Lease to any third party (other
than to a Permitted Transferee);
-8-
17
(vi) On the first day of each calendar year during the Term, Tenant
shall deliver to Landlord a disclosure statement containing
the following:
(1) A list containing all Hazardous Materials and the
quantities thereof stored, used or disposed from the
Premises during the preceding calendar year;
(2) A statement that (A) the use, storage and disposal of
such Hazardous Materials complies with all applicable
laws, (B) Tenant has all necessary permits and
approvals for the use, storage and disposal thereof,
and (C) identifies the method of disposal of such
Hazardous Materials; and
(3) Copies of all necessary permits and approvals
relating to the use, storage and disposal of such
Hazardous Materials to the extent not previously
delivered to Landlord;
(vii) Tenant shall immediately advise Landlord in writing of, and
provide Landlord a copy of:
(1) Any notice of violation or potential or alleged
violation of any law concerning Hazardous Materials
received by Tenant from any governmental agency;
(2) Any and all inquiry, investigation, enforcement,
clean-up, removal or governmental or regulatory
actions instituted or threatened relating to Tenant
or the Premises; and
(3) All claims made or threatened by any third party
against Tenant or the Premises relating to any
Hazardous Materials.
(viii) The provisions of this subparagraph (c) shall not apply to the
storage, use and disposal of Hazardous Materials by a
subtenant, unless the subtenant is a Permitted Transferee.
In the event any of the preceding conditions are not satisfied, Tenant shall
immediately cease the use, storage and disposal of Hazardous Materials until all
such conditions are satisfied. Landlord's consent to the use, storage and
disposal of such Hazardous Materials shall not constitute an assumption of the
risk respecting the same and Tenant shall indemnify, protect, defend and hold
the Landlord Indemnified Parties harmless from and against the same as required
by this Section 6.4.
6.5 REFUSE AND SEWAGE. Tenant agrees not to keep any trash, garbage, waste
or other refuse on the Premises except in sanitary containers and agrees to
regularly and frequently remove same from the Premises. Tenant shall keep all
containers or other equipment used for storage of such materials in a clean and
sanitary condition. Tenant shall properly dispose of all sanitary sewage and
shall not use the sewage disposal system for the disposal of anything except as
permitted by law. Tenant shall keep the sewage disposal system free of all
obstructions and in good operating condition. If the volume of Tenant's trash
becomes excessive in Landlord's judgment, Landlord shall have the right to
charge Tenant for additional trash disposal services and/or to require that
Tenant contract directly for additional trash disposal services at Tenant's sole
cost and expense.
6.6 PEST CONTROL. Tenant shall, at its own cost, retain a licensed, bonded
professional pest and sanitation control service to perform inspections of the
Premises as needed for the purpose of eliminating infestation by and controlling
the presence of insects, rodents and vermin and shall promptly cause any
corrective or extermination work recommended by such service to be performed.
Such work shall be performed pursuant to a written contract, a copy of which
shall be delivered to Landlord by Tenant upon request.
6.7 EXTRAORDINARY SERVICES. If Landlord incurs Operating Expenses or other
costs for any increase in services provided to or for the benefit of Tenant
above those services normally provided by Landlord to the other tenants in the
Project and such increased services or costs result from any act, conduct,
extraordinary use and/or special request by Tenant or its employees or
customers, Tenant agrees to reimburse Landlord for the costs of such
extraordinary services, within thirty (30) days of delivery to Tenant of written
invoice for such extraordinary services. By way of example only, if Tenant
should request or if Tenant's business operation should require extraordinary
security services, lighting, cleaning and/or repair, such extraordinary services
may be billed directly to Tenant as provided in this Section 6.7 and shall be
reimbursed by Tenant to Landlord as provided herein.
7. PAYMENTS AND NOTICES. All rent and other sums payable by Tenant to
Landlord hereunder shall be paid to Landlord at the address designated in
Section 1.1 of the Summary, or to such other persons and/or at such other places
as Landlord may hereafter designate in writing. Any notice required or permitted
to be given hereunder must be in writing and may be given by personal delivery
(including delivery by nationally recognized overnight courier or express
mailing service), or by registered or certified mail, postage prepaid, return
receipt requested, addressed to Tenant at the address(es) designated in Section
1.2 of the Summary, or to Landlord at the address(es) designated in Section 1.1
of the Summary. Either party may, by written notice to the other, specify a
different address for notice purposes.
8. BROKERS. The parties recognize that the broker(s) who negotiated this
Lease are stated in Section 1.13 of the Summary, and agree that Landlord shall
be solely responsible for the payment of brokerage commissions to said
broker(s), and that Tenant shall have no responsibility therefor unless written
provision to the contrary has been made. Each party represents and warrants to
the other, that, to its knowledge, no other broker, agent or finder (a)
negotiated or was instrumental in negotiating or consummating this Lease on its
behalf, and (b) is or might be entitled to a commission or compensation in
connection with this Lease. Any broker, agent or finder of Tenant whom Tenant
has failed to disclose herein shall be paid by Tenant. Tenant shall indemnify,
protect, defend (by counsel reasonably approved in writing by Landlord) and hold
Landlord harmless from and against any and all claims, judgments, suits, causes
of action, damages, losses, liabilities and expenses (including attorneys' fees
and court costs) resulting from any breach by Tenant of the foregoing
representation, including, without limitation, any claims that may be asserted
against Landlord by any broker,
-9-
18
agent or finder undisclosed by Tenant herein. Landlord shall indemnify, protect,
defend (by counsel reasonably approved in writing by Tenant) and hold Tenant
harmless from and against any and all claims, judgments, suits, causes of
action, damages, losses, liabilities and expenses (including attorneys' fees and
court costs) resulting from any breach by Landlord of the foregoing
representation, including, without limitation, any claims that may be asserted
against Tenant by any broker, agent or finder undisclosed by Landlord herein.
The foregoing indemnities shall survive the expiration or earlier termination of
this Lease.
9. SURRENDER; HOLDING OVER.
9.1 SURRENDER OF PREMISES. Upon the expiration or sooner termination of
this Lease, Tenant shall surrender all keys for the Premises to Landlord, and
Tenant shall deliver exclusive possession of the Premises to Landlord broom
clean and in good condition and repair, reasonable wear and tear and casualty
damage excepted), with all of Tenant's personal property (and those items, if
any, of Tenant Improvements and Tenant Changes identified by Landlord pursuant
to Section 12.2 below) removed therefrom and all damage caused by such removal
repaired, as required pursuant to Sections 12.2 and 12.3 below. If, for any
reason, Tenant fails to surrender the Premises on the expiration or earlier
termination of this Lease (including upon the expiration of any subsequent
month-to-month tenancy consented to by Landlord pursuant to Section 9.2 below),
with such removal and repair obligations completed, then, in addition to the
provisions of Section 9.3 below and Landlord's rights and remedies under Section
12.4 and the other provisions of this Lease, Tenant shall indemnify, protect,
defend (by counsel reasonably approved in writing by Landlord) and hold Landlord
harmless from and against any and all claims, judgments, suits, causes of
action, damages, losses, liabilities and expenses (including reasonable
attorneys' fees and court costs) resulting from such failure to surrender,
including, without limitation, any claim made by any succeeding tenant based
thereon. The foregoing indemnity shall survive the expiration or earlier
termination of this Lease.
9.2 HOLDING OVER. If without Landlord's consent, Tenant holds over after
the expiration or earlier termination of the Lease Term, Tenant shall become a
tenant at sufferance only, upon the terms and conditions set forth in this Lease
so far as applicable (including Tenant's obligation to pay all Common Area
Expenses and any other additional rent under this Lease), but at a Monthly Basic
Rent equal to one hundred twenty-five percent (125%) of the Monthly Basic Rent
applicable to the Premises immediately prior to the date of such expiration or
earlier termination. Acceptance by Landlord of rent after such expiration or
earlier termination shall not constitute a consent to a hold over hereunder or
result in an extension of this Lease.
9.3 NO EFFECT ON LANDLORD'S RIGHTS. The foregoing provisions of this
Section 9 are in addition to, and do not affect, Landlord's right of re-entry or
any other rights of Landlord hereunder or otherwise provided at law or in
equity.
10. TAXES.
10.1 REAL PROPERTY TAXES. Tenant agrees to pay its pro rata share of all
general and special real property taxes, assessments (including, without
limitation, change in ownership taxes or assessments), liens, bond obligations,
license fees or taxes and any similar impositions in-lieu of other impositions
now or previously within the definition of real property taxes or assessments
(collectively "REAL PROPERTY TAXES") which may be levied or assessed by any
lawful authority against the Project applicable to the period from the
Commencement Date until the expiration or sooner termination of this Lease.
Tenant's pro rata share shall be apportioned according to the floor area of the
Premises as it relates to the total leasable floor area of the Building or
buildings located within the Project (including the Premises). Notwithstanding
the foregoing provisions, if the Real Property Taxes are not levied and assessed
against the entire Project by means of a single tax xxxx (i.e., if the Project
is separated into two (2) or more separate tax parcels for purposes of levying
and assessing the Real Property Taxes), then, at Landlord's option, Tenant shall
pay Tenant's pro rata share of all Real Property Taxes which may be levied or
assessed by any lawful authority against the land and improvements of the
separate tax parcel on which the Building containing the Premises is located.
Tenant's pro rata share under such circumstances shall be apportioned according
to the floor area of the Premises as it relates to the total leasable floor area
of the Building or buildings situated in the separate tax parcel in which the
Premises is located.
All Real Property Taxes for the tax year in which the Commencement Date occurs
and for the tax year in which this Lease terminates shall be apportioned and
adjusted so that Tenant shall not be responsible for any Real Property Taxes for
a period of time occurring prior to the Commencement Date or subsequent to the
expiration of the Term.
The amount to be paid pursuant to the provisions of this Section 10.1 shall be
paid monthly in advance as part of Tenant's Monthly Operating Expense Charge as
estimated by Landlord based on the most recent tax bills and estimates of
reappraised values (if reappraisal is to occur), commencing with the month (or
partial month on a prorated basis if such be the case) that the Commencement
Date occurs. The initial estimated monthly charge for Tenant's pro rata share of
Real Property Taxes is included in the Monthly Operating Expense Charge as
provided in Section 4.
If at any time during the Term under the laws of the United States, or the
state, county, municipality, or any political subdivision thereof in which the
Project is located, a tax or excise on rent or any other tax however described
is levied or assessed by any such political body against Landlord on account of
rent payable to Landlord hereunder or any tax based on or measured by
expenditures made by Tenant on behalf of Landlord, such tax or excise shall be
considered "Real Property Taxes" for purposes of this Section 10.1, and shall be
payable in full by Tenant. At Landlord's option, such taxes or excises shall be
payable monthly in advance on an estimated basis as provided in this Section
10.1 or shall be payable within ten (10) days after Tenant's receipt of the tax
xxxx therefor from Landlord.
10.2 PERSONAL PROPERTY TAXES. Tenant shall be liable for, and shall pay
before delinquency, all taxes and assessments (real and personal) levied against
(a) any personal property or trade fixtures placed by Tenant in or about the
Premises (including any increase in the assessed value of the Premises based
upon the value of any such personal property or trade fixtures); and (b) any
Tenant Improvements or alterations in the Premises (whether installed and/or
paid for by Landlord or Tenant). If any such taxes or assessments are levied
against Landlord or Landlord's property,
-10-
19
Landlord may, after written notice to Tenant (and under proper protest if
requested by Tenant) pay such taxes and assessments, and Tenant shall reimburse
Landlord therefor within ten (10) business days after demand by Landlord;
provided, however, Tenant, at its sole cost and expense, shall have the right,
with Landlord's cooperation, to bring suit in any court of competent
jurisdiction to recover the amount of any such taxes and assessments so paid
under protest.
10.3 TENANT'S PAYMENT OF CERTAIN TAX EXPENSES. Notwithstanding anything to
the contrary contained in this Lease, in the event that, at any time during the
initial Term, a change in ownership of the Project is consummated, and as a
result thereof, and to the extent that in connection therewith, the Project is
reassessed (the "REASSESSMENT") for real estate tax purposes by the appropriate
governmental authority pursuant to the terms of Proposition 13, then the terms
of this Section 10.3 shall apply to such Reassessment. This Section 10.3 shall
not apply during any Option Period.
(a) THE TAX INCREASE. For purposes of this Article 10, the term "TAX
INCREASE" shall mean that portion of the Real Property Taxes, as
calculated immediately following the Reassessment, which is
attributable solely to the Reassessment. Accordingly, the term Tax
Increase shall not include any portion of the Real Property Taxes, as
calculated immediately following the Reassessment, which (i) is
attributable to the initial assessment of the value of the Project,
(ii) is attributable to assessments which were pending immediately
prior to the Reassessment which assessments were conducted during, and
included in, such Reassessment, or which assessments were otherwise
rendered unnecessary following the Reassessment, or (iii) is
attributable to the annual inflationary increase of Real Property
Taxes.
(b) PROTECTION. Tenant shall be obligated to pay Tenant's pro rata share of
the first Tax Increase, but Tenant shall not be obligated to pay any
portion of any subsequent Tax Increase.
(c) LANDLORD'S RIGHT TO PURCHASE THE PROPOSITION 13 PROTECTION AMOUNT
ATTRIBUTABLE TO A PARTICULAR REASSESSMENT. The amount of Real Property
Taxes which Tenant is not obligated to pay or will not be obligated to
pay during the Term in connection with a particular Reassessment
pursuant to the terms of Section 10.3 shall be sometimes referred to
hereafter as a "PROPOSITION 13 PROTECTION AMOUNT." If the occurrence of
a Reassessment is reasonably foreseeable by Landlord and the
Proposition 13 Protection Amount attributable to such Reassessment can
be reasonably quantified or estimated for each year commencing with the
year in which the Reassessment will occur, the terms of this Section
10.3(c) shall apply to each such Reassessment. Upon notice to Tenant,
Landlord shall have the right to purchase the Proposition 13 Protection
Amount relating to the applicable Reassessment (the "APPLICABLE
REASSESSMENT"), at any time, by paying to Tenant an amount equal to the
"PROPOSITION 13 PURCHASE PRICE," as that term is defined below. As used
herein, "PROPOSITION 13 PURCHASE PRICE" shall mean the present value of
the Proposition 13 Protection Amount remaining during the Term, as of
the date of payment of the Proposition 13 Purchase Price by Landlord.
Such present value shall be calculated (i) by using the portion of the
Proposition 13 Protection Amount attributable to each remaining year
during the Term that such protection is available (as though the
portion of such Proposition 13 Protection Amount benefited Tenant at
the end of each year), as the amounts to be discounted, and (ii) by
using discount rates for each amount to be discounted equal to (A) the
prime interest rate, as reported in the Wall Street Journal as of the
date of Landlord's exercise of its right to purchase plus (B) two
percent (2%) per annum. Upon such payment of the Proposition 13
Purchase Price, the provisions of Section 10.3(b) shall not apply to
any Tax Increase attributable to the Applicable Reassessment. As
Landlord will estimate the Proposition 13 Purchase Price because a
Reassessment has not yet occurred, then when such Reassessment occurs,
if Landlord has underestimated the Proposition 13 Purchase Price, then
upon notice by Landlord to Tenant, Tenant's rent next due shall be
credited with the amount of such underestimation, and if Landlord
overestimates the Proposition 13 Purchase Price, then upon notice by
Landlord to Tenant, rent next due shall be increased by the amount of
the overestimation.
11. POSSESSION; CONDITION OF PREMISES; REPAIRS.
11.1 DELIVERY OF POSSESSION. Landlord will deliver possession of the
Premises to Tenant in its current "as-is" condition (subject, however, to
Section 11.2) on or before the date required by Section 1.7 of the Summary. If,
for any reason not caused by Tenant, Landlord cannot deliver possession of the
Premises to Tenant by the date required by Section 1.7 of the Summary, this
Lease will not be void or voidable, nor will Landlord be liable to Tenant for
any loss or damage resulting from such delay. If the delay in possession is
caused by Tenant, then the Term and Tenant's obligation to pay rent will
commence as of the date the Commencement Date would have occurred but for
Tenant's delay, even though Tenant does not yet have possession. Notwithstanding
the foregoing, Landlord will not be obligated to deliver possession of the
Premises to Tenant (but Tenant will be liable for rent if Landlord can otherwise
deliver the Premises to Tenant) until Landlord has received from Tenant all of
the following: (i) a copy of this Lease fully executed by Tenant; (ii)the first
installment of Monthly Basic Rent; and (iii) copies of policies of insurance or
certificates thereof as required under Section 21 of this Lease. Notwithstanding
anything to the contrary contained herein, if Landlord has not delivered the
Premises to Tenant within fifteen (15) days from the date hereof for any reason,
including but not limited to force majeure delays, Tenant shall have the right
thereafter (but prior to delivery of the Premises) to cancel this Lease by
giving Landlord written notice thereof, and upon such cancellation, Landlord
shall return all sums theretofore deposited by Tenant with Landlord, and neither
party shall have any further liability to the other hereunder.
11.2 CONDITION OF PREMISES. Tenant acknowledges that, except as otherwise
expressly set forth in this Lease, neither Landlord nor any agent of Landlord
has made any representation or warranty with respect to the Premises, the
Building or the Project or their condition, or with respect to the suitability
thereof for the conduct of Tenant's business. The taking of possession of the
Premises by Tenant shall conclusively establish that the Project, the Premises,
the Tenant Improvements therein, the Building and the Common Areas were at such
time complete and in good, sanitary and satisfactory condition and repair and
without any obligation on Landlord's part to make any alterations, upgrades or
improvements thereto. Notwithstanding anything to the contrary in Section 11.1
or this Section 11.2, as of the Commencement Date (i) all plumbing, electrical,
HVAC and mechanical systems in the Premises shall be in good working order (with
the exception of failures to such systems caused by Tenant and the repairs
needed to the HVAC
-11-
20
system identified in the Due Diligence Report dated December 11, 1996 prepared
by Weather Engineering, the responsibility of which will be Tenant's at its cost
and expense, but with respect to the HVAC repairs, subject to reimbursement by
Landlord from the Construction Allowance) and (ii) the Common Areas shall comply
with Title III of the Americans with Disabilities Act of 1990 (the "ACT") and
all other laws applicable thereto (but without regard to the Tenant
Improvements, for which Tenant shall be responsible to ensure compliance with
the Act and all other laws applicable thereto). In the event it is determined
that the condition of the Premises or Common Areas is not as required by this
Section 11.2, then it shall be the obligation of Landlord, after written notice
from Tenant, to promptly, at Landlord's sole cost and expense, rectify any such
condition. In the event Tenant does not give Landlord written notice that any of
the plumbing, electrical, HVAC or mechanical systems are not in good working
order within eighteen (18) days from the Commencement Date, the correction of
same shall be the responsibility of Tenant at Tenant's cost.
Landlord warrants that: (i) as of the date hereof and as of the Commencement
Date Landlord has no actual knowledge of any material defects in the Premises or
Building which could reasonably be expected by Landlord to unreasonably
interfere with Tenant's use and enjoyment of the Premises (however, this
warranty shall not apply to defects caused by Tenant); (ii) as of the date
hereof, Landlord is the fee owner of the Premises and has the right and
authority to lease the Premises to Tenant on the terms and conditions set forth
in the Lease; and (iii) as of the Commencement Date, or as soon thereafter as is
reasonably practicable, Landlord shall complete its currently planned
improvements to the exterior of the Building. As the exclusive remedy for a
breach of the foregoing warranties, Landlord shall, promptly following written
notice thereof from Tenant, correct any violation of the foregoing warranties at
Landlord's sole cost and expense. Subject to the foregoing warranties, by entry
upon the Premises, Tenant agrees to accept the Premises in their "as is"
condition.
Notwithstanding the foregoing, Tenant acknowledges that certain repairs to the
Premises are needed due to vandalism, and that Tenant will be responsible for
the repair of same, subject to reimbursement by Landlord from the Construction
Allowance.
11.3 LANDLORD'S REPAIR OBLIGATIONS. Except as provided in Section 11.2
above, Landlord shall, as part of the Operating Expenses, repair, maintain and
replace, as necessary, (a) the Building shell and other structural portions of
the Building (including the roof and foundations), (b) the basic plumbing,
heating, ventilating, air conditioning, sprinkler and electrical systems within
the Building core (but not any conduits or connections thereto or distribution
systems thereof within the Premises or any other tenant's premises), and (c) the
Common Areas of the Project; provided, however, to the extent such maintenance
or repairs are required as a result of any act, neglect, fault or omission of
Tenant or any of Tenant's agents, employees, contractors, licensees or invitees,
Tenant shall pay to Landlord, as additional rent, the costs of such maintenance
and repairs. Landlord shall not be liable to Tenant for failure to perform any
such repairs or maintenance, unless Landlord shall fail to make such repairs and
such failure shall continue for an unreasonable time following written notice
from Tenant to Landlord of the need for such repairs. Without limiting the
foregoing, Tenant waives the right to make repairs at Landlord's expense under
any law, statute or ordinance now or hereafter in effect (including the
provisions of California Civil Code Section 1942 and any successive sections or
statutes of a similar nature).
11.4 TENANT'S REPAIR OBLIGATIONS. Except for Landlord's obligations
specifically set forth in Sections 11.2, 11.3, 18.1 and 19.2 hereof, Tenant
shall at all times and at Tenant's sole cost and expense, keep, maintain, clean,
repair and preserve and replace, as necessary, the Premises and all parts
thereof including, without limitation, all Tenant Improvements, Tenant Changes,
utility meters, pipes and conduits, all heating, ventilating and air
conditioning systems located within the Premises, all fixtures, furniture and
equipment, Tenant's storefront and signs, if any, locks, closing devices,
security devices, windows, window sashes, casements and frames, floors and floor
coverings, shelving, restrooms, if any, and any alterations, additions and other
property located within the Premises in good condition and repair, reasonable
wear and tear excepted. Tenant shall replace, at its expense, any and all plate
and other glass in and about the Premises which is damaged or broken from any
cause whatsoever except due to the gross negligence or willful misconduct of
Landlord, its agents or employees. Such maintenance and repairs shall be
performed with due diligence, lien-free and in a good and workmanlike manner, by
licensed contractor(s) which are selected by Tenant and approved by Landlord,
which approval Landlord shall not unreasonably withhold or delay. Except as
otherwise expressly provided in this Lease, Landlord shall have no obligation to
alter, remodel, improve, repair, renovate, redecorate or paint all or any part
of the Premises.
12. ALTERATIONS.
12.1 TENANT CHANGES; CONDITIONS.
(a) Tenant shall not make any alterations, additions, improvements or
decorations to the Premises (collectively, "TENANT CHANGES," and
individually, a "TENANT CHANGE") unless Tenant first obtains Landlord's
prior written approval thereof, which approval Landlord shall not
unreasonably withhold. Notwithstanding the foregoing, Landlord's prior
approval shall not be required for any Tenant Change which satisfies
all of the following conditions (hereinafter a "PRE-APPROVED CHANGE"):
(i) the costs of such Tenant Change does not exceed Twenty-Five
Thousand Dollars ($25,000.00) individually; (ii) the costs of such
Tenant Change when aggregated with the costs of all other Tenant
Changes made by Tenant during the Term of this Lease do not exceed One
Hundred Thousand Dollars ($100,000.00); (iii) Tenant delivers to
Landlord final plans, specifications and working drawings for such
Tenant Change at least ten (10) days prior to commencement of the work
thereof; (iv) the Tenant Change does not affect the mechanical,
electrical, plumbing or life safety systems of the Premises, the roof
or structural components of the Premises or the exterior of the
Premises; and (v) Tenant and such Tenant Change otherwise satisfy all
other conditions set forth in this Section 12.1.
(b) All Tenant Changes shall be performed: (i) in accordance with the
approved plans, specifications and working drawings; (ii) lien-free and
in a good and workmanlike manner; (iii) in compliance with all laws,
rules and regulations of all governmental agencies and authorities
including, without limitation, the provisions of Title III of
-12-
21
the Americans with Disabilities Act of 1990; (iv) in such a manner so
as not to unreasonably interfere with the occupancy of any other tenant
in the Building or any other building located within the Project, nor
impose any additional expense upon nor delay Landlord in the
maintenance and operation of the Building or any other building located
within the Project; and (v) at such times, in such manner and subject
to such rules and regulations as Landlord may from time to time
reasonably designate.
(c) Throughout the performance of the Tenant Changes, Tenant shall obtain,
or cause its contractors to obtain, workers compensation insurance and
commercial general liability insurance in compliance with the
provisions of Section 20 of this Lease.
12.2 REMOVAL OF TENANT CHANGES AND TENANT IMPROVEMENTS. All Tenant Changes
and the initial Tenant Improvements in the Premises (whether installed or paid
for by Landlord or Tenant), shall become the property of Landlord and shall
remain upon and be surrendered with the Premises at the end of the Term of this
Lease; provided, however, Landlord may, by written notice delivered to on or
before the expiration of the Lease Term (or upon any sooner termination of this
Lease) identify those items of the initial Tenant Improvements and Tenant
Changes which Landlord shall require Tenant to remove at the end of the Term of
this Lease. If Landlord requires Tenant to remove any such items as described
above, Tenant shall, at its sole cost, remove the identified items on or before
the expiration or sooner termination of this Lease and repair any damage to the
Premises caused by such removal (or, at Landlord's option, shall pay to Landlord
all of Landlord's costs of such removal and repair).
Notwithstanding anything to the contrary contained herein, Tenant shall not be
required to remove (i) any of the initial Tenant Improvements constructed by or
on behalf of Tenant, and (ii) any Tenant Change for which Tenant has obtained
Landlord's consent (unless at the time of Landlord's granting of such consent,
Landlord required the removal of such Tenant Change as a condition to such
consent). Tenant shall be entitled, but not required, to remove the following
described items, provided Tenant repairs any damage to the Premises caused by
such removal: phone system and security system (if Tenant elects to remove any
such system, Tenant shall also remove all wiring associated with such system.
12.3 REMOVAL OF PERSONAL PROPERTY. All articles of personal property owned
by Tenant or installed by Tenant at its expense in the Premises (including
business and trade fixtures, furniture and movable partitions) shall be, and
remain, the property of Tenant, and shall be removed by Tenant from the
Premises, at Tenant's sole cost and expense, on or before the expiration or
sooner termination of this Lease. Tenant shall repair any damage caused by such
removal.
12.4 TENANT'S FAILURE TO REMOVE. If Tenant fails to remove by the expiration
or sooner termination of this Lease all of its personal property, or any items
of Tenant Improvements or Tenant Changes identified by Landlord for removal
pursuant to Section 12.2 above, Landlord may, (without liability to Tenant for
loss thereof), at Tenant's sole cost and in addition to Landlord's other rights
and remedies under this Lease, at law or in equity: (a) remove and store such
items in accordance with applicable law; and/or (b) upon ten (10) days' prior
notice to Tenant, sell all or any such items at private or public sale for such
price as Landlord may obtain as permitted under applicable law. Landlord shall
apply the proceeds of any such sale to any amounts due to Landlord under this
Lease from Tenant (including Landlord's reasonable attorneys' fees and other
costs incurred in the removal, storage and/or sale of such items), with any
remainder to be paid to Tenant.
13. LIENS. Tenant shall not permit any mechanic's, materialmen's or other
liens to be filed against all or any part of the Project, the Building or the
Premises, nor against Tenant's leasehold interest in the Premises, by reason of
or in connection with any repairs, alterations, improvements or other work
contracted for or undertaken by Tenant or any other act or omission of Tenant or
Tenant's agents, employees, contractors, licensees or invitees. Tenant shall, at
Landlord's request, provide Landlord with enforceable, conditional and final
lien releases (and other reasonable evidence reasonably requested by Landlord to
demonstrate protection from liens) from all persons furnishing labor and/or
materials with respect to the Premises. Landlord shall have the right at all
reasonable times to post on the Premises and record any notices of
non-responsibility which it deems necessary for protection from such liens. If
any such liens are filed, Tenant shall, at its sole cost, immediately cause such
lien to be released of record or bonded so that it no longer affects title to
the Project, the Building or the Premises. If Tenant fails to cause such lien to
be so released or bonded within twenty (20) days after filing thereof, Landlord
may, without waiving its rights and remedies based on such breach, and without
releasing Tenant from any of its obligations, cause such lien to be released by
any means it shall deem proper, including payment in satisfaction of the claim
giving rise to such lien. Tenant shall pay to Landlord within five (5) days
after receipt of invoice from Landlord, any sum paid by Landlord to remove such
liens, together with interest at the Interest Rate from the date of such payment
by Landlord.
14. ASSIGNMENT AND SUBLETTING.
14.1 RESTRICTION ON TRANSFER. Tenant will not assign or encumber this Lease
in whole or in part, nor sublet all or any part of the Premises (collectively
and individually, a "TRANSFER"), without the prior written consent of Landlord,
which consent Landlord will not unreasonably withhold, except as provided in
this Section 14. The consent by Landlord to any Transfer shall not constitute a
waiver of the necessity for such consent to any subsequent Transfer. This
prohibition against Transfers shall be construed to include a prohibition
against any assignment or subletting by operation of law. If this Lease is
Transferred by Tenant, or if the Premises or any part thereof are Transferred or
occupied by any person or entity other than Tenant, Landlord may collect rent
from the assignee, subtenant or occupant, and apply the net amount collected to
the rent herein reserved during any time that a default (after notice and
expiration of applicable grace periods) exists hereunder. No such Transfer,
occupancy or collection shall be deemed a waiver on the part of Landlord, or the
acceptance of the assignee, subtenant or occupant as Tenant, or a release of
Tenant from the further performance by Tenant of covenants on the part of Tenant
herein contained unless expressly made in writing by Landlord. Irrespective of
any Transfer, Tenant shall remain fully liable under this Lease and shall not be
released from performing any of the terms, covenants and conditions of this
Lease. Without limiting in any way Landlord's right to withhold its consent on
any reasonable grounds, it is agreed that Landlord will not be acting
unreasonably in refusing to consent to a
-13-
22
Transfer if, in Landlord's opinion, (i) the net worth or financial capabilities
of such assignee or subtenant is less than that of Tenant at the date hereof,
(ii) the proposed assignee or subtenant does not have the financial capability
to fulfill the obligations imposed by the Transfer, (iii) the proposed Transfer
involves a change of use of the Premises from that specified herein, or (iv) the
proposed assignee or subtenant is not, in Landlord's reasonable opinion, of
reputable or good character or consistent with Landlord's desired tenant mix for
the Project. Any proposed assignee or subtenant which Landlord does not
disapprove shall be deemed a "PERMITTED BUSINESS." If Tenant is a corporation,
or is an unincorporated association or partnership, the transfer, assignment or
hypothecation of any stock or interest in such corporation, association or
partnership in the aggregate in excess of fifty percent (50%) shall be deemed an
assignment within the meaning and provisions of this Section 14.1.
Notwithstanding anything to the contrary contained in this Lease, Landlord
agrees that Tenant may assign this Lease or sublet the Premises, or any portion
thereof, without Landlord's consent, to any entity which controls, is controlled
by, or is under common control with Tenant; to any entity which results from a
reincorporation, merger or consolidation with Tenant; to any entity engaged in a
joint venture with Tenant; or to any entity that acquires all or substantially
all of the stock or assets of Tenant, (hereinafter each a "PERMITTED TRANSFER"
or "PERMITTED TRANSFEREE," as applicable), provided (i) with respect to any
entity that acquires all or substantially all of the stock or assets of Tenant
or an entity that results from a merger or consolidation (i.e., where Tenant is
not the surviving entity), such Permitted Transferee has a net worth equal to
Tenant's as of the date hereof, (ii) Tenant gives Landlord written notice of the
Permitted Transfer at least ten (10) days prior to the effective date thereof,
which notice provides Landlord with sufficient information to verify the
satisfaction of the criteria for a Permitted Transfer, (iii) in the case of an
assignment of this Lease, the Permitted Transferee assumes the obligations of
Tenant hereunder pursuant to an instrument reasonably acceptable to Landlord,
and (iv) the Permitted Transfer is effectuated for a bona fide business purpose
and not as a means to avoid Tenant's obligations under this Lease. In addition,
any sale or transfer of the capital stock of Tenant shall be deemed a Permitted
Transfer if (1) such sale or transfer occurs in connection with any bona fide
financing or capitalization for the benefit of Tenant, or (2) Tenant becomes a
publicly traded corporation, or (3) such sale or transfer is made to any
publicly traded corporation. Without limiting the generality of the foregoing,
Landlord shall have no right to any sums or other economic consideration
resulting from any Permitted Transfer as otherwise permitted in Section 14.4 and
shall have no right to terminate this Lease as a result of any Permitted
Transfer as otherwise permitted in Section 14.3.
14.2 TRANSFER NOTICE. If Tenant desires to effect a Transfer, then at least
thirty (30) days prior to the date when Tenant desires the Transfer to be
effective (the "TRANSFER DATE"), Tenant agrees to give Landlord a notice (the
"TRANSFER NOTICE"), stating the name, address and business of the proposed
assignee, sublessee or other transferee (sometimes referred to hereinafter as
"TRANSFEREE"), reasonable information (including references) concerning the
character, ownership, and financial condition of the proposed Transferee, the
Transfer Date, any ownership or commercial relationship between Tenant and the
proposed Transferee, and the consideration and all other material terms and
conditions of the proposed Transfer, all in such detail as Landlord may
reasonably require.
14.3 LANDLORD'S OPTIONS. Within fifteen (15) days of Landlord's receipt of
any Transfer Notice, and any additional information requested by Landlord
concerning the proposed Transferee's financial responsibility, Landlord will
notify Tenant of its election to do one of the following: (i) consent to the
proposed Transfer subject to such reasonable conditions as Landlord may impose
in providing such consent; or (ii) refuse such consent, which refusal shall be
on reasonable grounds.
14.4 ADDITIONAL CONDITIONS. A condition to Landlord's consent to any
Transfer of this Lease will be the delivery to Landlord of a true copy of the
fully executed instrument of assignment, sublease, transfer or hypothecation, in
form and substance reasonably satisfactory to Landlord. Tenant agrees to pay to
Landlord, as additional rent, one-half (1/2) of all sums and other consideration
payable to and for the benefit of Tenant by the Transferee in excess of the rent
payable under this Lease for the same period and portion of the Premises. In
calculating excess rent or other consideration which may be payable to Landlord
under this Section, Tenant will be entitled to deduct commercially reasonable
third party brokerage commissions and attorneys' fees and other amounts
reasonably and actually expended by Tenant in connection with such assignment or
subletting (together with the unamortized cost of any Tenant Improvements or
Tenant Changes paid by Tenant in excess of the Construction Allowance, which
unamortized cost shall be amortized over the remaining term of this Lease) if
acceptable written evidence of such expenditures is provided to Landlord. No
Transfer (including a Permitted Transfer) will release Tenant of Tenant's
obligations under this Lease or alter the primary liability of Tenant to pay the
rent and to perform all other obligations to be performed by Tenant hereunder.
During any time that a default (after notice and expiration of applicable grace
periods) exists hereunder, Landlord may require that any Transferee remit
directly to Landlord on a monthly basis, all monies due Tenant by said
Transferee. Consent by Landlord to one Transfer will not be deemed consent to
any subsequent Transfer. In the event of default by any Transferee of Tenant or
any successor of Tenant in the performance of any of the terms hereof, Landlord
may proceed directly against Tenant without the necessity of exhausting remedies
against such Transferee or successor. If Tenant effects a Transfer (including a
Permitted Transfer) or requests the consent of Landlord to any Transfer
(including a Permitted Transfer) (whether or not such Transfer is consummated),
then, upon demand, and as a condition precedent to Landlord's consideration of
the proposed assignment or sublease, Tenant agrees to pay Landlord's reasonable
attorneys' fees and costs and other costs actually incurred by Landlord in
reviewing such proposed assignment or sublease.
15. ENTRY BY LANDLORD. Landlord and its employees and agents shall at all
reasonable times have the right to enter the Premises to inspect the same, to
supply any service required to be provided by Landlord to Tenant under this
Lease, to exhibit the Premises to prospective lenders or purchasers (or during
the last year of the Term, to prospective tenants), to post notices of
non-responsibility, and/or to alter, improve or repair the Premises or any other
portion of the Building, all without being deemed guilty of or liable for any
breach of Landlord's covenant of quiet enjoyment or any eviction of Tenant, and
without abatement of rent. In exercising such entry rights, Landlord shall
endeavor to minimize, as reasonably practicable, the interference with Tenant's
business, and shall provide Tenant with reasonable advance written notice of
such entry (except in emergency situations). Landlord shall have the means which
Landlord may deem proper to open Tenant's doors in an emergency in order to
obtain entry to the Premises. Any entry to the Premises obtained by Landlord by
any of said means or otherwise shall not under any circumstances be construed or
deemed to be
-14-
23
a forcible or unlawful entry into, or a detainer of, the Premises, or an
eviction of Tenant from the Premises or any portion thereof, or grounds for any
abatement or reduction of rent and Landlord shall not have any liability to
Tenant for any damages or losses on account of any such entry by Landlord
except, subject to the provisions of Section 22.1, to the extent of Landlord's
gross negligence or willful misconduct, but Landlord shall promptly repair, at
its sole cost, all damage caused by its entry to the extent such damage is not
covered by insurance Tenant carries or is required to carry hereunder.
16. UTILITIES AND SERVICES. Tenant shall be solely responsible for and
shall promptly pay all charges for heat, air conditioning, water, gas,
electricity or any other utility used, consumed or provided in, furnished to or
attributable to the Premises at the rates charged by the supplying utility
companies and/or Landlord. Should Landlord elect to supply any or all of such
utilities, Tenant agrees to purchase and pay for the same as additional rent as
apportioned by Landlord. The rate to be charged to Landlord to Tenant shall not
exceed the rate charged to Landlord by any supplying utility. Tenant shall
reimburse Landlord within ten (10) days of billing for fixture charges and/or
water tariffs, if applicable, which are charged to Landlord by local utility
companies. Landlord will notify Tenant of this charge as soon as it becomes
known. This charge will increase or decrease with current charges being levied
against Landlord, the Premises or the Building by the local utility company, and
will be due as additional rent. In no event shall Landlord be liable for any
interruption or failure in the supply of any such utility services to Tenant
unless such interruption or failure is caused by a default hereunder by Landlord
or by Landlord's gross negligence or willful misconduct, in which event Landlord
will be liable for damages caused by such interruption to the extent such
damages are not covered by the insurance Tenant maintains or is required to
maintain hereunder.
17. INDEMNIFICATION AND EXCULPATION.
17.1 TENANT'S ASSUMPTION OF RISK AND WAIVER. Except to the extent such
matter is not covered by the insurance required to be maintained by Tenant under
this Lease and such matter is attributable to the gross negligence or willful
misconduct of Landlord, Landlord shall not be liable to Tenant, Tenant's
employees, agents or invitees for: (i) any damage to property of Tenant, or of
others, located in, on or about the Premises, (ii) the loss of or damage to any
property of Tenant or of others by theft or otherwise, (iii) any injury or
damage to persons or property resulting from fire, explosion, falling plaster,
steam, gas, electricity, water, rain or leaks from any part of the Premises or
from the pipes, appliance of plumbing works or from the roof, street or
subsurface or from any other places or by dampness or by any other cause of
whatsoever nature, or (iv) any such damage caused by other tenants or persons in
the Premises, occupants of adjacent property of the Project, or the public, or
caused by operations in construction of any private, public or quasi-public
work. Landlord shall in no event be liable for any consequential damages or loss
of business or profits and Tenant hereby waives any and all claims for any such
damages. All property of Tenant kept or stored on the Premises shall be so kept
or stored at the sole risk of Tenant and Tenant shall hold Landlord harmless
from any claims arising out of damage to the same, including subrogation claims
by Tenant's insurance carriers, unless such damage shall be caused by the
negligence or willful misconduct of Landlord or a breach by Landlord of its
obligations under the lease and is not covered by insurance Tenant carries or is
required to carry hereunder. Landlord or its agents shall not be liable for
interference with the light or other intangible rights.
17.2 TENANT'S INDEMNIFICATION OF LANDLORD. Tenant shall be liable for, and
shall indemnify, defend, protect and hold Landlord and Landlord's partners,
officers, directors, employees, agents, successors and assigns (collectively,
"LANDLORD INDEMNIFIED PARTIES") harmless from and against, any and all claims,
damages, judgments, suits, causes of action, losses, liabilities and expenses,
including reasonable attorneys' fees and court costs (collectively, "INDEMNIFIED
CLAIMS"), arising or resulting from (a) any negligent or willful act or omission
of Tenant or any of Tenant's agents, employees, contractors, subtenants,
assignees, licensees or with respect to acts or omissions within the Premises
only, Tenant's invitees (collectively, "TENANT PARTIES"); (b) the use of the
Premises and Common Areas and conduct of Tenant's business by Tenant or any
Tenant Parties, or any other activity, work or thing done, permitted or suffered
by Tenant or any Tenant Parties, in or about the Premises, the Building or
elsewhere on the Project; and/or (c) any default by Tenant of any obligations on
Tenant's part to be performed under the terms of this Lease. In case any action
or proceeding is brought against Landlord or any Landlord Indemnified Parties by
reason of any such Indemnified Claims, Tenant, upon notice from Landlord, shall
defend the same at Tenant's expense by counsel approved in writing by Landlord,
which approval shall not be unreasonably withheld.
17.3 LANDLORD'S INDEMNIFICATION OF TENANT. Except for matters (i) covered by
insurance obtained or required to be obtained by Tenant under this Lease or (ii)
the negligence or willful misconduct of the Tenant Parties, Landlord will be
liable for, and shall indemnify, protect, defend and hold harmless Tenant and
Tenant's partners, officers, directors, employees, agents, successors and
assigns (collectively, "TENANT INDEMNIFIED PARTIES"), from and against, any
Indemnified Claims, to the extent any such Indemnified Claim arises or results
from (a) any negligent or willful act or omission of Landlord or any Landlord
Parties; (b) any default by Landlord of any obligations on Landlord's part to be
performed under the terms of this Lease; and (c) to the extent covered by the
insurance required to be maintained by Landlord under this Lease (or which would
have been covered if Landlord had carried such required insurance), any acts or
omissions of any third parties occurring in the Common Areas. In case any action
or proceeding is brought against Tenant or any Tenant Indemnified Parties by
reason of any such injury or damage indemnified by Landlord as set forth
hereinabove, Landlord, upon notice from Tenant, agrees to defend the same at
Landlord's expense by counsel approved in writing by Tenant, which approval
Tenant will not unreasonably withhold.
17.4 SURVIVAL; NO RELEASE OF INSURERS. The respective indemnification
obligations of Tenant and Landlord under Sections 17.2 and 17.3, shall survive
the expiration or earlier termination of this Lease. The respective covenants,
agreements and indemnification in Sections 17.1, 17.2 and 17.3 above, are not
intended to and shall not relieve any insurance carrier of its obligations under
policies required to be carried by Tenant or Landlord, pursuant to the
provisions of this Lease.
-15-
24
18. DAMAGE OR DESTRUCTION.
18.1 LANDLORD'S RIGHTS AND OBLIGATIONS. In the event the Premises are
damaged by fire or other casualty that is not required to be insured hereunder
by Landlord, which damage does not exceed ten percent (10%) of the full
replacement cost thereof, or, regardless of the amount of damage, if Landlord
will receive insurance proceeds sufficient to cover the costs of such repairs,
reconstruction and restoration (or Landlord would have received sufficient
proceeds had Landlord maintained the insurance required of Landlord hereunder)
and if Landlord's contractor estimates in a writing delivered to the parties
that the damage is such that the Premises may be repaired, reconstructed or
restored to substantially its condition immediately prior to such damage within
one hundred eighty (180) days from the date of such damage, then Landlord shall
commence and proceed diligently with the work of repair, reconstruction and
restoration of the Premises (including the Tenant Improvements but excluding
Tenant Changes unless Tenant delivers sufficient proceeds therefor) and this
Lease shall continue in full force and effect. If Landlord is not required to
repair, reconstruct or restore the Premises pursuant to the prior sentence, then
Landlord may elect to either:
(a) promptly repair, reconstruct and restore the portion of the Premises
damaged by such casualty (including the Tenant Improvements but
excluding Tenant Changes unless Tenant delivers sufficient proceeds
therefor), in which case this Lease shall continue in full force and
effect; or
(b) terminate this Lease effective as of the date which is thirty (30) days
after Tenant's receipt of Landlord's election to so terminate.
Under any of the conditions of this Section 18.1, Landlord shall give written
notice to Tenant of its intention to repair or terminate within the earlier of
forty-five (45) days after the occurrence of such casualty, or fifteen (15) days
after Landlord's receipt of the estimate from Landlord's contractor. If
Landlord's contractor's written estimate of the time to complete the repair or
restoration exceeds one hundred eighty (180) days from the date Landlord has
knowledge of the casualty, Tenant shall also have the right to terminate this
Lease by giving written notice to Landlord within thirty (30) days after
Tenant's receipt of such written estimate.
If Landlord elects to terminate this Lease because of insufficient insurance
proceeds, Tenant shall have the right within ten (10) days after the receipt of
such notice to give notice to Landlord of Tenant's intention to fund such
insufficiency in insurance proceeds, in which event this Lease shall continue in
full force and effect, and Tenant shall promptly deposit such funds with
Landlord and thereafter Landlord shall restore the Premises. If Tenant does not
give such notice within such ten (10) day period this Lease shall be terminated
as of the date of Landlord's termination.
Upon termination of this Lease pursuant to this Section 18, an equitable
adjustment shall be made concerning advance rent and any advance payments made
by Tenant to Landlord. Landlord shall, in addition, return to Tenant within
fifteen (15) days following such termination so much of Tenant's security
deposit as has not theretofore been applied by Landlord.
18.2 TENANT'S COSTS AND INSURANCE PROCEEDS. In the event of any damage or
destruction of all or any part of the Premises, Tenant shall immediately: (a)
notify Landlord thereof; and (b) deliver to Landlord all insurance proceeds
received by Tenant with respect to the Tenant Improvements and Tenant Changes in
the Premises to the extent such items are not covered by Landlord's casualty
insurance obtained by Landlord pursuant to Section 21 below (excluding proceeds
for Tenant's furniture and other personal property), whether or not this Lease
is terminated as permitted in this Section 18, and Tenant hereby assigns to
Landlord all rights to receive such insurance proceeds; provided, however, with
respect to proceeds of insurance for those Tenant Changes paid for by Tenant, in
the event of a termination of this Lease, Tenant may retain a portion of the
insurance proceeds applicable to such Tenant Changes based upon a fraction, the
numerator of which is the number of months remaining in the Term (had this Lease
not been terminated), and the denominator of which is the number of months
remaining in the Term at the time the Tenant Change was installed in the
Premises.
18.3 ABATEMENT OF RENT. In the event that as a result of any such damage,
repair, reconstruction and/or restoration of the Premises, Tenant's use of the
Premises or any portion thereof is impaired, then the rent shall be equitably
abated during the period that Tenant's use of the Premises is impaired based
upon the degree of such impairment. Notwithstanding the foregoing to the
contrary, if the damage is due to the negligence or willful misconduct of Tenant
or any Tenant Parties, there shall be no abatement of rent. Except for abatement
of rent as provided hereinabove, Tenant shall not be entitled to any
compensation or damages for loss of, or interference with, Tenant's business or
use or access of all or any part of the Premises resulting from any such damage,
repair, reconstruction or restoration.
18.4 INABILITY TO COMPLETE. Notwithstanding anything to the contrary
contained in this Section 18, if Landlord is obligated or elects to repair,
reconstruct and/or restore the damaged portion of the Premises pursuant to
Section 18.1 above, but is delayed from completing such repair, reconstruction
and/or restoration beyond the date which is four (4) months after the date
estimated by Landlord's contractor for completion thereof pursuant to Section
18.1, by reason of any causes beyond the reasonable control of Landlord
(including, without limitation, any delay due to Force Majeure as defined in
Section 32.16, and delays caused by Tenant or any Tenant Parties), then either
party may elect to terminate this Lease upon thirty (30) days' prior written
notice to the other given prior to completion of such repair, reconstruction
and/or restoration; provided, however, (i) Tenant may not make such election if
the delay was caused by Tenant or Tenant's Parties or if the remaining damage
does not materially impair Tenant's use of the Premises and (ii) if Tenant is
permitted to and does make such election, Landlord may rescind such election by
completing the repairs, reconstruction and/or restoration within thirty (30)
days following Tenant's election. In addition, if Landlord is required or elects
to restore the Premises under the provisions of this Section 18 and does not
commence such restoration within one hundred twenty (120) days of the date
Landlord has knowledge of the damage, and if such damage material impairs
Tenant's use of the Premises, Tenant may, at Tenant's option, terminate this
Lease by giving Landlord notice thereof at any time prior to the commencement of
such restoration. In such event, this Lease shall terminate as of the date of
such
-16-
25
notice; provided, however, Landlord may rescind such termination by commencing
such restoration within thirty (30) days following such termination.
18.5 DAMAGE TO THE PROJECT. If there is a total destruction of the Project
or a partial destruction of the Project, the cost of restoration of which would
exceed one-third (1/3) of the then replacement value of the Project, by any
cause whatsoever, whether or not insured against and whether or not the Premises
are partially or totally destroyed, Landlord may within the earlier of fifteen
(15) days after Landlord's receipt of the estimate from Landlord's contractor or
forty-five (45) days after the occurrence of such destruction, notify Tenant in
writing that it elects not to so reconstruct or restore the Project, in which
event this Lease shall cease and terminate as of the date of such destruction.
18.6 DAMAGE NEAR END OF TERM. In addition to the termination rights in
Sections 18.1 and 18.4 above, Landlord and Tenant shall have the right to
terminate this Lease if any damage to the Building or Premises occurs during the
last twelve (12) months of the Term of this Lease and Landlord's contractor
estimates in a writing delivered to the parties that the repair, reconstruction
or restoration of such damage cannot be completed within the earlier of (a) the
scheduled expiration date of the Lease Term, or (b) sixty (60) days after the
date of such casualty, provided Landlord so notifies Tenant within the earlier
of fifteen (15) days after Landlord's receipt of the estimate from Landlord's
contractor or forty-five (45) days of the casualty, and provided further that
Tenant's termination right under this Section 18.6 shall apply only to damage to
the Premises or material damage to the parking areas or access to the Premises.
In addition, in the event of damage to the Premises during the second (2nd) to
the last year of the Term that is not required to be insured by Landlord
hereunder and which will require more than ninety (90) days to repair, Landlord
shall have the right to terminate this Lease by giving Tenant written notice
thereof within the same time period required in the preceding sentence;
provided, however, if Landlord does so terminate this Lease, Tenant shall have
the right within ten (10) days after the receipt of such notice to give notice
to Landlord of Tenant's intention to pay for the cost of such repair, in which
event this Lease shall continue in full force and effect and Tenant shall
promptly deposit such funds with Landlord and thereafter Landlord shall repair
the Premises.
Notwithstanding anything to the contrary in this Lease, if, at the time of such
damage, Tenant has an Extension Option and the time for the exercise of the
Extension Option has not then expired, Tenant shall have a period of ten (10)
days from Landlord's election to terminate this Lease pursuant to this Section
18.6 in which to elect to exercise the Extension Option. If Tenant exercises
such Extension Option during said ten (10) day period, Landlord's election to
terminate this Lease under this Section 18.6 shall be rescinded and the other
relevant provisions of Section 18 shall govern the respective rights and
obligations of the parties with respect to such damage.
18.7 WAIVER OF TERMINATION RIGHT. This Lease sets forth the terms and
conditions upon which this Lease may terminate in the event of any damage or
destruction. Accordingly, the parties hereby waive the provisions of California
Civil Code Section 1932, Subsection 2, and Section 1933, Subsection 4 (and any
successor statutes thereof permitting the parties to terminate this Lease as a
result of any damage or destruction).
19. EMINENT DOMAIN.
19.1 SUBSTANTIAL TAKING. Subject to the provisions of Section 19.4 below, in
case the whole of the Premises, or such part thereof as shall substantially
interfere with Tenant's use and occupancy of the Premises as reasonably
determined by Landlord, shall be taken for any public or quasi-public purpose by
any lawful power or authority by exercise of the right of appropriation,
condemnation or eminent domain, or sold to prevent such taking, either party
shall have the right to terminate this Lease effective as of the date possession
is required to be surrendered to said authority.
19.2 PARTIAL TAKING; ABATEMENT OF RENT. In the event of a taking of a
portion of the Premises which does not substantially interfere with the conduct
of Tenant's business, then, except as otherwise provided in the immediately
following sentence, neither party shall have the right to terminate this Lease
and Landlord shall thereafter proceed to make a functional unit of the remaining
portion of the Premises (but only to the extent Landlord receives proceeds
therefor from the condemning authority), and rent shall be abated with respect
to the part of the Premises which Tenant shall be so deprived on account of such
taking. Notwithstanding the immediately preceding sentence to the contrary, if
any part of the Building or the Project shall be taken (whether or not such
taking substantially interferes with Tenant's use of the Premises), Landlord may
terminate this Lease upon thirty (30) days' prior written notice to Tenant as
long as Landlord also terminates leases of all other tenants leasing comparably
sized space within the Building for comparable lease terms.
19.3 CONDEMNATION AWARD. Subject to the provisions of Section 19.4 below, in
connection with any taking of the Premises or the Building, Landlord shall be
entitled to receive the entire amount of any award which may be made or given in
such taking or condemnation, without deduction or apportionment for any estate
or interest of Tenant, it being expressly understood and agreed by Tenant that
no portion of any such award shall be allowed or paid to Tenant for any
so-called bonus or excess value of this Lease, and such bonus or excess value
shall be the sole property of Landlord. Tenant shall not assert any claim
against Landlord or the taking authority for any compensation because of such
taking (including any claim for bonus or excess value of this Lease); provided,
however, if any portion of the Premises is taken, Tenant shall be granted the
right to recover from the condemning authority (but not from Landlord) any
compensation as may be separately awarded or recoverable by Tenant for the
taking of Tenant's furniture, fixtures, equipment and other personal property
within the Premises, for Tenant's relocation expenses, and for any loss of
goodwill or other damage to Tenant's business by reason of such taking and for a
prorata share of the value of that portion of the Tenant Improvements and Tenant
Changes paid for by Tenant in excess of the Construction Allowance, which
prorata share shall be based upon a fraction, the numerator of which is the
number of months remaining in the Term (had this Lease not been terminated), and
the denominator of which is the number of months remaining in the term at the
time the Tenant Improvements and Tenant Changes were installed in the Premises.
19.4 TEMPORARY TAKING. In the event of a taking of the Premises or any part
thereof for temporary use, (a) this Lease shall be and remain unaffected thereby
and rent shall not xxxxx, and (b) Tenant shall be entitled to receive for
-17-
26
itself such portion or portions of any award made for such use with respect to
the period of the taking which is within the Term, provided that if such taking
shall remain in force at the expiration or earlier termination of this Lease,
Tenant shall perform its obligations under Section 9 with respect to surrender
of the Premises and shall pay to Landlord the portion of any award which is
attributable to any period of time beyond the Term expiration date. For purpose
of this Section 19.4, a temporary taking shall be defined as a taking for a
period of one hundred twenty (120) days or less.
19.5 WAIVER OF TERMINATION RIGHT. This Lease sets forth the terms and
conditions upon which this Lease may terminate in the event of a taking.
Accordingly, the parties waive the provisions of the California Code of Civil
Procedure Section 1265.130 and any successor or similar statutes permitting the
parties to terminate this Lease as a result of a taking.
20. TENANT'S INSURANCE.
20.1 TYPES OF INSURANCE. On or before the earlier of the Commencement Date
or the date Tenant commences or causes to be commenced any work of any type in
or on the Premises pursuant to this Lease, and continuing during the entire
Term, Tenant shall obtain and keep in full force and effect, the following
insurance:
(a) All Risk insurance, including fire and extended coverage, sprinkler
leakage, vandalism and malicious mischief upon property of every
description and kind owned by Tenant and located in the Premises or the
Building, or for which Tenant is legally liable or installed by or on
behalf of Tenant including, without limitation, furniture, equipment
and any other personal property, and any Tenant Changes (but excluding
the initial Tenant Improvements previously existing or installed in the
Premises), in an amount not less then the full replacement cost
thereof.
(b) Commercial general liability insurance coverage, including personal
injury, bodily injury (including wrongful death), broad form property
damage, operations hazard, owner's protective coverage, contractual
liability (including Tenant's indemnification obligations under this
Lease, including Section 17 hereof), liquor liability (if Tenant serves
alcohol on the Premises), products and completed operations liability,
and owned/non-owned auto liability, with a general aggregate of not
less than Two Million Dollars ($2,000,000.00), except that products and
completed operations liability limits may be not less than One Million
Dollars ($1,000,000.00). The general aggregate amount of such
commercial general liability insurance shall be increased every five
(5) years during the Term of this Lease to an amount reasonably
required by Landlord and prudent industry practice.
(c) Worker's compensation and employer's liability insurance, in statutory
amounts and limits.
(d) Loss of income, extra expense and business interruption insurance in
such amounts as will reimburse Tenant for direct or indirect loss of
earnings attributable to all perils commonly insured against by prudent
tenants or attributable to prevention of access to the Premises,
Tenant's parking areas or to the Building as a result of such perils.
Tenant may elect to self-insure this risk.
(e) Any other form or forms of insurance as Tenant or Landlord or the
mortgagees of Landlord may reasonably require from time to time, in
form, amounts and for insurance risks against which a prudent tenant
would protect itself, but only to the extent such risks and amounts are
available in the insurance market at commercially reasonable costs.
20.2 REQUIREMENTS. Each policy required to be obtained by Tenant hereunder
shall: (a) be issued by insurers authorized to do business in the state in which
the Building is located and rated not less than financial class X, and not less
than policyholder rating A in the most recent version of Best's Key Rating Guide
(provided that, in any event, the same insurance company shall provide the
coverages described in Sections 20.1(a) and 20.1(d) above); (b) be in form
reasonably satisfactory from time to time to Landlord; (c) name Tenant as named
insured thereunder and shall name Landlord and, at Landlord's request,
Landlord's mortgagees and ground lessors of which Tenant has been informed in
writing, as additional insureds thereunder, all as their respective interests
may appear; (d) shall not have a deductible amount exceeding Five Thousand
Dollars ($5,000.00); (e) specifically provide that the insurance afforded by
such policy for the benefit of Landlord and Landlord's mortgagees and ground
lessors shall be primary, and any insurance carried by Landlord or Landlord's
mortgagees and ground lessors shall be excess and non-contributing; (f) except
for worker's compensation insurance, contain an endorsement that the insurer
waives its right to subrogation as described in Section 22 below; and (g)
contain an undertaking by the insurer to notify Landlord (and the mortgagees and
ground lessors of Landlord who are named as additional insureds) in writing not
less than thirty (30) days prior to any material change, reduction in coverage,
cancellation or other termination thereof. Tenant agrees to deliver to Landlord,
as soon as practicable after the placing of the required insurance, but in no
event later than ten (10) days after the date Tenant takes possession of all or
any part of the Premises, certificates from the insurance company evidencing the
existence of such insurance and Tenant's compliance with the foregoing
provisions of this Section 20). Tenant shall cause replacement certificates to
be delivered to Landlord not less than thirty (30) days prior to the expiration
of any such policy or policies. If any such initial or replacement certificates
are not furnished within the time(s) specified herein, Tenant shall be deemed to
be in default under this Lease, and Landlord shall have the right, but not the
obligation, to procure such policies and certificates at Tenant's expense.
20.3 EFFECT ON INSURANCE. Tenant shall not do or permit to be done anything
which will (a) violate or invalidate any insurance policy maintained by Landlord
or Tenant hereunder, or (b) increase the costs of any insurance policy
maintained by Landlord pursuant to Section 21 or otherwise with respect to the
Building or the Project. If Tenant's occupancy or conduct of its business in or
on the Premises results in any increase in premiums for any insurance carried by
Landlord with respect to the Building or the Project, Tenant shall pay such
increase as additional rent within ten (10) days after being billed therefor by
Landlord. If any insurance coverage carried by Landlord pursuant to Section 21
or otherwise with respect to the Building or the Project shall be cancelled or
reduced (or cancellation or reduction thereof shall be threatened) by reason of
the use or occupancy of the Premises by Tenant or by anyone permitted by Tenant
to
-18-
27
be upon the Premises, and if Tenant fails to remedy such condition within five
(5) days after notice thereof, Tenant shall be deemed to be in default under
this Lease, and Landlord shall have all remedies provided in this Lease, at law
or in equity, including, without limitation, the right (but not the obligation)
to enter upon the Premises and attempt to remedy such condition at Tenant's
cost.
21. LANDLORD'S INSURANCE. During the Term, Landlord shall insure the Common
Area improvements, the Building, the Premises and the Tenant Improvements
initially installed in the Premises pursuant to Exhibit "C" (excluding, however,
Tenant's furniture, equipment and other personal property and Tenant Changes) at
their full replacement cost against damage by fire and standard extended
coverage perils and with vandalism and malicious mischief endorsements, rental
loss coverage, at Landlord's option, earthquake damage coverage, and such
additional coverage as Landlord deems appropriate. Landlord shall also carry
commercial general liability insurance (in an amount not less than required of
Tenant under Section 20.1(b) above) and with such reasonable deductibles as
would be carried by a prudent owner of a similar building in the state in which
the Building is located. At Landlord's option, all such insurance may be carried
under any blanket or umbrella policies which Landlord has in force for other
buildings and projects. In addition, at Landlord's option, Landlord may elect to
self-insure all or any part of such required insurance coverage. Landlord may,
but shall not be obligated to, carry any other form or forms of insurance as
Landlord or the mortgagees or ground lessors of Landlord may reasonably
determine is advisable. The cost of insurance obtained by Landlord pursuant to
this Section 21 (including self-insured amounts and deductibles) shall be
included in Operating Expenses, except that any increase in the premium for the
property insurance attributable to the replacement cost of the Tenant
Improvements in excess of the Construction Allowance shall not be included as
Operating Expenses, but shall be paid by Tenant concurrently with Tenant's
monthly installment of its share of Operating Expenses.
22. WAIVERS OF SUBROGATION.
22.1 MUTUAL WAIVER OF PARTIES. Landlord and Tenant hereby waive their rights
against each other with respect to any claims or damages or losses which are
caused by or result from (a) property damage insured against under any property
insurance policy carried by Landlord or Tenant (as the case may be) pursuant to
the provisions of this Lease and enforceable at the time of such damage or loss,
or (b) property damage which would have been covered under any insurance
required to be obtained and maintained by Landlord or Tenant (as the case may
be) under Sections 20 and 21 of this Lease (as applicable) had such insurance
been obtained and maintained as required therein. The foregoing waivers shall be
in addition to, and not a limitation of, any other waivers or releases contained
in this Lease.
22.2 WAIVER OF INSURERS. Each party shall cause each property insurance
policy required to be obtained by it pursuant to Sections 20 and 21 to provide
that the insurer waives all rights of recovery by way of subrogation against
either Landlord or Tenant, as the case may be, in connection with any claims,
losses and damages covered by such policy. If either party fails to maintain
property insurance required hereunder, such insurance shall be deemed to be
self-insured with a deemed full waiver of subrogation as set forth in the
immediately preceding sentence.
23. TENANT'S DEFAULT AND LANDLORD'S REMEDIES.
23.1 TENANT'S DEFAULT. The occurrence of any one or more of the following
events shall constitute a default under this Lease by Tenant:
(a) the abandonment of the Premises by Tenant. "ABANDONMENT" is herein
defined to include, but is not limited to, any absence by Tenant from
the Premises for fourteen (14) business days or longer while in default
of any monetary provision of this Lease;
(b) the failure by Tenant to make any payment of rent or additional rent or
any other payment required to be made by Tenant hereunder, within seven
(7) days of when due;
(c) the failure by Tenant to observe or perform any of the express or
implied covenants or provisions of this Lease to be observed or
performed by Tenant, other than as specified in Sections 23.1(a) or (b)
above, where such failure shall continue for a period of thirty (30)
days after written notice thereof from Landlord to Tenant; however,
that any such notice shall be in lieu of, and not in addition to, any
notice required under California Code of Civil Procedure, Section 1161
and provided further that, if the nature of Tenant's default is such
that more than thirty (30) days are reasonably required for its cure,
then Tenant shall not be deemed to be in default if Tenant shall
commence such cure within said thirty (30) day period and thereafter
diligently prosecute such cure to completion; and
(d) (i) the making by Tenant of any general assignment for the benefit of
creditors, (ii) the filing by or against Tenant of a petition to have
Tenant adjudged a bankrupt or a petition for reorganization or
arrangement under any law relating to bankruptcy (unless, in the case
of a petition filed against the Tenant, the same is dismissed within
sixty (60) days), (iii) the appointment of a trustee or receiver to
take possession of substantially all of Tenant's assets located at the
Premises or of Tenant's interest in this Lease, where possession is not
restored to Tenant within sixty (60) days, or (iv) the attachment,
execution or other judicial seizure of substantially all of Tenant's
assets located at the Premises or of Tenant's interest in this Lease
where such seizure is not discharged within sixty (60) days.
23.2 LANDLORD'S REMEDIES; TERMINATION. In the event of any such default by
Tenant, in addition to any other remedies available to Landlord under this
Lease, at law or in equity, Landlord shall have the immediate option to
terminate this Lease and all rights of Tenant hereunder. In the event that
Landlord shall elect to so terminate this Lease, then Landlord may recover from
Tenant:
(a) the worth at the time of award of any unpaid rent which had been earned
at the time of such termination; plus
-19-
28
(b) the worth at the time of the 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 that Tenant proves could
have been reasonably avoided; plus
(c) the worth at the time of award of the amount by which the unpaid rent
for the balance of the term after the time of award exceeds the amount
of such rental loss that Tenant proves could be reasonably avoided;
plus
(d) 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 including, but not limited to: unamortized Tenant
Improvement costs; attorneys' fees; unamortized brokers' commissions;
the costs of refurbishment, renovation and repair of the Premises; and
removal (including the repair of any damage caused by such removal) and
storage (or disposal) of Tenant's personal property, equipment,
fixtures, Tenant Changes, Tenant Improvements and any other items which
Tenant is required under this Lease to remove but does not remove.
As used in Sections 23.2(a) and 23.2(b) above, the "worth at the time of award"
is computed by allowing interest at the Interest Rate set forth in Section 1.14
of the Summary. As used in Section 23.2(c) above, the "worth at the time of
award" is 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%).
23.3 LANDLORD'S REMEDIES; RE-ENTRY RIGHTS. In the event of any such default
by Tenant, in addition to any other remedies available to Landlord under this
Lease, at law or in equity, 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, stored and/or disposed
of pursuant to Section 12.4 of this Lease or any other procedures permitted by
applicable law. No re-entry or taking possession of the Premises by Landlord
pursuant to this Section 23.3, and no acceptance of surrender of the Premises or
other action on Landlord's part, shall be construed as an election to terminate
this Lease unless a written notice of such intention be given to Tenant or
unless the termination thereof be decreed by a court of competent jurisdiction.
23.4 LANDLORD'S REMEDIES; CONTINUATION OF LEASE. In the event of any such
default by Tenant, in addition to any other remedies available to Landlord under
this Lease, at law or in equity, Landlord shall have the right to continue this
Lease in full force and effect, whether or not Tenant shall have abandoned the
Premises. The foregoing remedy shall also be available to Landlord pursuant to
California Civil Code Section 1951.4 and any successor statute thereof in the
event Tenant has abandoned the Premises. In the event Landlord elects to
continue this Lease in full force and effect pursuant to this Section 23.4, then
Landlord shall be entitled to enforce all of its rights and remedies under this
Lease, including the right to recover rent as it becomes due. Landlord's
election not to terminate this Lease pursuant to this Section 23.4 or pursuant
to any other provision of this Lease, at law or in equity, shall not preclude
Landlord from subsequently electing to terminate this Lease or pursuing any of
its other remedies.
23.5 LANDLORD'S RIGHT TO PERFORM. Except as specifically provided otherwise
in this Lease, all covenants and agreements by Tenant under this Lease shall be
performed by Tenant at Tenant's sole cost and expense and without any abatement
or offset of rent. If Tenant shall fail to pay any sum of money (other than
Annual Basic Rent) or perform any other act on its part to be paid or performed
hereunder and such failure shall continue for seven (7) days with respect to
monetary obligations (or thirty (30) days with respect to non-monetary
obligations or, in the event of an emergency, such shorter period of time as may
be reasonable under the circumstances) after Tenant's receipt of written notice
thereof from Landlord, Landlord may, without waiving or releasing Tenant from
any of Tenant's obligations, make such payment or perform such other act on
behalf of Tenant. All sums so paid by Landlord and all necessary incidental
costs incurred by Landlord in performing such other acts shall be payable by
Tenant to Landlord within ten (10) days after demand therefor as additional
rent.
23.6 INTEREST. If any monthly installment of Annual Basic Rent or Common
Area Expenses, or any other amount payable by Tenant hereunder is not received
by Landlord by the date when due, it shall bear interest at the Interest Rate
set forth in Section 1.14 of the Summary from the date due until paid. All
interest, and any late charges imposed pursuant to Section 23.7 below, shall be
considered additional rent due from Tenant to Landlord under the terms of this
Lease.
23.7 LATE CHARGES. Tenant acknowledges that, in addition to interest costs,
the late payments by Tenant to Landlord of any Annual Basic Rent or other sums
due under this Lease will cause Landlord to incur costs not contemplated by this
Lease, the exact amount of such costs being extremely difficult and impractical
to fix. Such other costs include, without limitation, processing, administrative
and accounting charges and late charges that may be imposed on Landlord by the
terms of any mortgage, deed of trust or related loan documents encumbering the
Premises, the Building or the Project. Accordingly, if any monthly installment
of Annual Basic Rent or Operating Expenses or any other amount payable by Tenant
hereunder is not received by Landlord within ten (10) days of the due date
thereof, Tenant shall pay to Landlord an additional sum of five percent (5%) of
the overdue amount as a late charge, but in no event more than the maximum late
charge allowed by law. The parties agree that such late charge represents a fair
and reasonable estimate of the costs that Landlord will incur by reason of any
late payment as hereinabove referred to by Tenant, and the payment of late
charges and interest are distinct and separate in that the payment of interest
is to compensate Landlord for the use of Landlord's money by Tenant, while the
payment of late charges is to compensate Landlord for Landlord's processing,
administrative and other costs incurred by Landlord as a result of Tenant's
delinquent payments. Acceptance of a late charge or interest shall not
constitute a waiver of Tenant's default with respect to the overdue amount or
prevent Landlord from exercising any of the other rights and remedies available
to Landlord under this Lease or at law or in equity now or hereafter in effect.
23.8 [INTENTIONALLY OMITTED].
-20-
29
23.9 RIGHTS AND REMEDIES CUMULATIVE. All rights, options and remedies of
Landlord contained in this Section 23 and elsewhere in this Lease shall be
construed and held to be cumulative, and no one of them shall be exclusive of
the other, and Landlord shall have the right to pursue any one or all of such
remedies or any other remedy or relief which may be provided by law or in
equity, whether or not stated in this Lease. Nothing in this Section 23 shall be
deemed to limit or otherwise affect Tenant's indemnification of Landlord
pursuant to any provision of this Lease.
24. LANDLORD'S DEFAULT. Landlord shall not be in default in the performance
of any obligation required to be performed by Landlord under this Lease unless
Landlord has failed to perform such obligation within thirty (30) days after the
receipt of written notice from Tenant specifying in detail Landlord's failure to
perform; provided however, that if the nature of Landlord's obligation is such
that more than thirty (30) days are required for its performance, then Landlord
shall not be deemed in default if it commences such performance within such
thirty (30) day period and thereafter diligently pursues the same to completion.
Upon any such uncured default by Landlord, Tenant may exercise any of its rights
provided in law or at equity; provided, however: (a) Tenant shall have no right
to offset or xxxxx rent in the event of any default by Landlord under this
Lease, except to the extent offset rights are specifically provided to Tenant in
this Lease; (b) Tenant shall have no right to terminate this Lease; and (c)
Tenant's rights and remedies hereunder shall be limited to the extent (i) Tenant
has expressly waived in this Lease any of such rights or remedies and/or (ii)
this Lease otherwise expressly limits Tenant's rights or remedies, including the
limitation on Landlord's liability contained in Section 31 hereof.
25. SUBORDINATION. Without the necessity of any additional document being
executed by Tenant for the purpose of effecting a subordination, and at the
election of Landlord or any mortgagee of a mortgage or a beneficiary of a deed
of trust now or hereafter encumbering all or any portion of the Building or the
Project, or any lessor of any ground or master lease now or hereafter affecting
all or any portion of the Building or the Project, this Lease shall be subject
and subordinate at all times to such ground or master leases (and such
extensions and modifications thereof), and to the lien of such mortgages and
deeds of trust (as well as to any advances made thereunder and to all renewals,
replacements, modifications and extensions thereof). Notwithstanding the
foregoing, Landlord shall have the right to subordinate or cause to be
subordinated any or all ground or master leases or the lien of any or all
mortgages or deeds of trust to this Lease. In the event that any ground or
master lease terminates for any reason or any mortgage or deed of trust is
foreclosed or a conveyance in lieu of foreclosure is made for any reason, at the
election of Landlord's successor in interest, Tenant shall attorn to and become
the tenant of such successor, provided such successor assumes in full and in
writing Landlord's obligations under this Lease accruing subsequent to the date
such successor acquires Landlord's interest. Tenant hereby waives its rights
under any current or future law which gives or purports to give Tenant any right
to terminate or otherwise adversely affect this Lease and the obligations of
Tenant hereunder in the event of any such foreclosure proceeding or sale. Tenant
covenants and agrees to execute and deliver to Landlord within ten (10) days
after receipt of written demand by Landlord and in the form reasonably required
by Landlord, any additional documents evidencing the priority or subordination
of this Lease with respect to any such ground or master lease or the lien of any
such mortgage or deed of trust.
Notwithstanding the foregoing, in consideration of, and as a condition precedent
to, the subordination of this Lease to any ground Lease or the lien of any
mortgage or deed of trust not in existence as of the date hereof, Landlord shall
have provided Tenant with a commercially reasonable non-disturbance agreement in
favor of Tenant, in form reasonably acceptable to Tenant, from the ground lessor
or holder of the mortgage or deed of trust, as applicable. Said non-disturbance
agreement shall be in recordable form.
Tenant's obligations under this Lease are subject to Landlord providing to
Tenant within thirty (30) days following the full execution and delivery of this
Lease by the parties, a non-disturbance and attornment agreement, in a
recordable form reasonably acceptable to Tenant, from any ground lessor or any
lender that has a mortgage, deed of trust or other security device encumbering
any portion of the Project as of the date of this Lease (the "NONDISTURBANCE
CONDITION"). Landlord shall exercise good faith efforts to assist in the
satisfaction of the Nondisturbance Condition. If the Nondisturbance Condition is
not satisfied within such thirty (30) day period, Tenant may, within ten (10)
days thereafter, terminate this Lease (as Tenant's sole remedy) by giving
Landlord written notice thereof prior to the date Landlord delivers such
non-disturbance agreement to Tenant. If Tenant does not elect to terminate this
Lease within said ten (10) day period, then Tenant shall be deemed to have
waived the Nondisturbance Condition and this Lease shall no longer be subject to
termination pursuant to this Section 25.
26. ESTOPPEL CERTIFICATE.
26.1 OBLIGATIONS. Within ten (10) business days following a party's written
request, the other party shall execute and deliver to the requesting party an
estoppel certificate, in a form substantially similar to the form of Exhibit "F"
attached hereto (if Landlord is the certifying party, the provisions of Exhibit
"F" will be modified as appropriate), certifying: (a) the Commencement Date of
this Lease; (b) that this Lease is unmodified and in full force and effect (or,
if modified, that this Lease is in full force and effect as modified, and
stating the date and nature of such modifications); (c) the date to which the
rent and other sums payable under this Lease have been paid; (d) that there are
not, to the best of the certifying party's knowledge, any defaults under this
Lease by either Landlord or Tenant, except as specified in such certificate; and
(e) such other matters as are reasonably requested by the requesting party. Any
such estoppel certificate delivered pursuant to this Section 26.1 may be relied
upon by any mortgagee, beneficiary, purchaser or prospective purchaser of any
portion of the Project or Tenant's leasehold estate therein, as well as their
assignees.
26.2 FAILURE TO DELIVER. In addition to constituting a default hereunder, a
party's failure to deliver such estoppel certificate within such time shall be
conclusive upon the certifying party that: (a) this Lease is in full force and
effect without modification, except as may be represented by the requesting
party; (b) there are no uncured defaults in Landlord's or Tenant's performance
(other than the certifying party's failure to deliver the estoppel certificate);
and (c) not more than one (1) month's rental has been paid in advance.
27. INTENTIONALLY OMITTED..
-21-
30
28. MODIFICATION AND CURE RIGHTS OF LANDLORD'S MORTGAGEES AND LESSORS.
28.1 MODIFICATIONS. If, in connection with Landlord's obtaining or entering
into any financing or ground lease for any portion of the Building or the
Project, the lender or ground lessor shall request modifications to this Lease,
Tenant shall, within ten (10) days after request therefor, execute an amendment
to this Lease including such modifications, provided such modifications are
reasonable, do not increase the obligations of Tenant hereunder, or adversely
affect the leasehold estate created hereby or Tenant's rights hereunder.
28.2 CURE RIGHTS. In the event of any default on the part of Landlord,
Tenant will give notice by registered or certified mail to any beneficiary of a
deed of trust or mortgagee covering the Premises or ground lessor of Landlord
whose address shall have been furnished to Tenant, and shall offer such
beneficiary, mortgagee or ground lessor the same opportunity to cure the default
as is provided to Landlord hereunder.
29. QUIET ENJOYMENT. Landlord covenants and agrees with Tenant that, upon
Tenant performing all of the covenants and provisions on Tenant's part to be
observed and performed under this Lease (including payment of rent hereunder),
Tenant shall and may peaceably and quietly have, hold and enjoy the Premises in
accordance with and subject to the terms and conditions of this Lease as against
all persons lawfully claiming the Premises.
30. TRANSFER OF LANDLORD'S INTEREST. The term "Landlord" as used in this
Lease, so far as covenants or obligations on the part of the Landlord are
concerned, shall be limited to mean and include only the owner or owners, at the
time in question, of the fee title to, or a lessee's interest in a ground lease
of, the Project. In the event of any transfer or conveyance of any such title or
interest (other than a transfer for security purposes only), the transferor
shall be automatically relieved of all covenants and obligations on the part of
Landlord contained in this Lease accruing after the date of such transfer or
conveyance. Landlord and Landlord's transferees and assignees shall have the
absolute right to transfer all or any portion of their respective title and
interest in the Project, the Building, the Premises and/or this Lease without
the consent of Tenant, and such transfer or subsequent transfer shall not be
deemed a violation on Landlord's part of any of the terms and conditions of this
Lease.
31. LIMITATION ON LANDLORD'S LIABILITY. Notwithstanding anything contained
in this Lease to the contrary, the obligations of Landlord under this Lease
(including any actual or alleged breach or default by Landlord) do not
constitute personal obligations of the individual partners, directors, officers
or shareholders of Landlord or Landlord's partners, and Tenant shall not seek
recourse against the individual partners, directors, officers or shareholders of
Landlord or Landlord's partners, or any of their personal assets for
satisfaction of any liability with respect to this Lease. In addition, in
consideration of the benefits accruing hereunder to Tenant and notwithstanding
anything contained in this Lease to the contrary, Tenant hereby covenants and
agrees for itself and all of its successors and assigns that the liability of
Landlord for its obligations under this Lease (including any liability as a
result of any actual or alleged failure, breach or default hereunder by
Landlord), shall be limited solely to, and Tenant's and its successors' and
assigns' sole and exclusive remedy shall be against, Landlord's interest in the
Project, and no other assets of Landlord.
32. MISCELLANEOUS.
32.1 GOVERNING LAW. This Lease shall be governed by, and construed pursuant
to, the laws of the state in which the Project is located.
32.2 SUCCESSORS AND ASSIGNS. Subject to the provisions of Section 30 above,
and except as otherwise provided in this Lease, 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 and permitted successors and assigns; provided, however, no
rights shall inure to the benefit of any Transferee of Tenant unless the
Transfer to such Transferee is made in compliance with the provisions of Section
14, and no options or other rights which are expressly made personal to the
original Tenant hereunder or in any rider attached hereto shall be assignable to
or exercisable by anyone other than the original Tenant under this Lease, except
as otherwise provided herein.
32.3 NO MERGER. The voluntary or other surrender of this Lease by Tenant or
a mutual termination thereof shall not work as a merger and shall, at the option
of Landlord, either (a) terminate all or any existing subleases, or (b) operate
as an assignment to Landlord of Tenant's interest under any or all such
subleases.
32.4 PROFESSIONAL FEES. If either Landlord or Tenant should bring suit
against the other with respect to this Lease, including for unlawful detainer or
any other relief against the other hereunder, then all costs and expenses
incurred by the prevailing party therein (including, without limitation, its
actual appraisers', accountants', attorneys' and other professional fees,
expenses and court costs), shall be paid by the other party.
32.5 WAIVER. The waiver by either party of any breach by the other party of
any term, covenant or condition herein contained shall not be deemed to be a
waiver of any subsequent breach of the same or any other term, covenant and
condition herein contained, nor shall any custom or practice which may become
established between the parties in the administration of the terms hereof be
deemed a waiver of, or in any way affect, the right of any party to insist upon
the performance by the other in strict accordance with said terms. No waiver of
any default of either party hereunder shall be implied from any acceptance by
Landlord or delivery by Tenant (as the case may be) of any rent or other
payments due hereunder or any omission by the non-defaulting party to take any
action on account of such default if such default persists or is repeated, and
no express waiver shall affect defaults other than as specified in said waiver.
The subsequent acceptance of rent hereunder by Landlord shall not be deemed to
be a waiver of any preceding breach by Tenant of any term, covenant or condition
of this Lease other than the failure of Tenant to pay the particular rent so
accepted, regardless of Landlord's knowledge of such preceding breach at the
time of acceptance of such rent.
-22-
31
32.6 TERMS AND HEADINGS. The words "Landlord" and "Tenant" as used herein
shall include the plural as well as the singular. Words used in any gender
include other genders. The Section headings of this Lease are not a part of this
Lease and shall have no effect upon the construction or interpretation of any
part hereof.
32.7 TIME. Time is of the essence with respect to performance of every
provision of this Lease in which time or performance is a factor. All references
in this Lease to "days" shall mean calendar days unless specifically modified
herein to be "business" days.
32.8 PRIOR AGREEMENTS; AMENDMENTS. This Lease, including the Summary and all
Exhibits and Riders attached hereto contains all of the covenants, provisions,
agreements, conditions and understandings between Landlord and Tenant concerning
the Premises and any other matter covered or mentioned in this Lease, and no
prior agreement or understanding, oral or written, express or implied,
pertaining to the Premises or any such other 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. The parties acknowledge that all prior agreements, representations
and negotiations are deemed superseded by the execution of this Lease to the
extent they are not expressly incorporated herein.
32.9 SEPARABILITY. The invalidity or unenforceability of any provision of
this Lease (except for Tenant's obligation to pay Annual Basic Rent and
Operating Expenses under Sections 3 and 4 hereof) shall in no way affect, impair
or invalidate any other provision hereof, and such other provisions shall remain
valid and in full force and effect to the fullest extent permitted by law.
32.10 RECORDING. Neither Landlord nor Tenant shall record this Lease.
However, either party may record a short form memorandum of this Lease provided
the form and substance thereof is reasonably acceptable to the other party, and
provided that prior to recordation Tenant executes and delivers to Landlord, in
recordable form, a properly acknowledged quitclaim deed or other instrument
extinguishing all of the Tenant's rights and interest in and to the Project, the
Building and the Premises, and designating Landlord as the transferee, which
deed or other instrument shall be held by Landlord and may be recorded by
Landlord once this Lease terminates or expires (but not prior thereto). If such
short form memorandum is recorded in accordance with the foregoing, the party
requesting the recording shall pay for all costs of or related to such
recording, including, but not limited to, recording charges and documentary
transfer taxes.
32.11 EXHIBITS AND RIDERS. All Exhibits and Riders attached to this Lease are
hereby incorporated in this Lease for all purposes as though set forth at length
herein.
32.12 AUCTIONS. Tenant shall have no right to conduct any auction in, on or
about the Premises, the Building or the Project.
32.13 ACCORD AND SATISFACTION. No payment by Tenant or receipt by Landlord of
a lesser amount than the rent payment herein stipulated shall be deemed to be
other than on account of the rent, nor shall any endorsement or statement on any
check or any letter accompanying any check or payment as rent be deemed an
accord and satisfaction, and Landlord may accept such check or payment without
prejudice to Landlord's right to recover the balance of such rent or pursue any
other remedy provided in this Lease. Tenant agrees that each of the foregoing
covenants and agreements shall be applicable to any covenant or agreement either
expressly contained in this Lease or imposed by any statute or at common law.
32.14 FINANCIAL STATEMENTS. Upon ten (10) days prior written request from
Landlord (which Landlord may make at any time during the Term but no more often
than once in any calendar year), Tenant shall deliver to Landlord a current
financial statement of Tenant and any guarantor of this Lease. Such statements
shall be prepared in accordance with generally acceptable accounting principles
and certified as true in all material respects by Tenant (if Tenant is an
individual) or by an authorized officer or general partner of Tenant (if Tenant
is a corporation or partnership, respectively).
32.15 NO PARTNERSHIP. Landlord does not, in any way or for any purpose,
become a partner of Tenant in the conduct of its business, or otherwise, or
joint venturer or a member of a joint enterprise with Tenant by reason of this
Lease. The provisions of this Lease relating to Percentage Rent payable
hereunder, if any, are included solely for the purpose of providing a method
whereby rent is to be measured and ascertained.
32.16 FORCE MAJEURE. In the event that either party hereto shall be delayed
or hindered in or prevented from the performance of any act required hereunder
by reason of strikes, lock-outs, labor troubles, inability to procure materials,
failure of power, governmental moratorium or other governmental action or
inaction (including failure, refusal or delay in issuing permits, approvals
and/or authorizations), injunction or court order, riots, insurrection, war,
fire, earthquake, flood or other natural disaster or other reason of a like
nature not the fault of the party delaying in performing work or doing acts
required under the terms of this Lease (but excluding delays due to financial
inability) (herein collectively, "FORCE MAJEURE DELAYS"), then performance of
such act shall be excused for the period of the delay and the period for the
performance of any such act shall be extended for a period equivalent to the
period of such delay. The provisions of this Section 32.16 shall not apply to
nor operate to excuse Tenant from the payment of Monthly Basic Rent, Operating
Expenses, percentage rent, if any, additional rent or any other payments
strictly in accordance with the terms of this Lease.
32.17 COUNTERPARTS. This Lease may be executed in one or more counterparts,
each of which shall constitute an original and all of which shall be one and the
same agreement.
32.18 NONDISCLOSURE OF LEASE TERMS. Tenant acknowledges and agrees that the
terms of this Lease are confidential and constitute proprietary information of
Landlord. Disclosure of the terms could adversely affect the ability of Landlord
to negotiate other leases and impair Landlord's relationship with other tenants.
Accordingly, Tenant agrees that it, and its
-23-
32
partners, officers, directors, employees, agents and attorneys, shall not
intentionally and voluntarily disclose the terms and conditions of this Lease to
any newspaper or other publication or any other tenant or apparent prospective
tenant of the Building or other portion of the Project, or real estate agent,
either directly or indirectly, without the prior written consent of Landlord,
provided, however, that Tenant may disclose the terms to prospective subtenants
or assignees under this Lease or as otherwise required by law.
32.19 NON-DISCRIMINATION. Tenant acknowledges and agrees that there shall be
no discrimination against, or segregation of, any person, group of persons, or
entity on the basis of race, color, creed, religion, age, sex, marital status,
national origin, or ancestry in the leasing, subleasing, transferring,
assignment, occupancy, tenure, use, or enjoyment of the Premises, or any portion
thereof.
33. LEASE EXECUTION.
33.1 TENANT'S AUTHORITY. If Tenant executes this Lease as a partnership or
corporation, then Tenant and the persons and/or entities executing this Lease on
behalf of Tenant represent and warrant that: (a) Tenant is a duly authorized and
existing partnership or corporation, as the case may be, and is qualified to do
business in the state in which the Building is located; (b) such persons and/or
entities executing this Lease are duly authorized to execute and deliver this
Lease on Tenant's behalf in accordance with the Tenant's partnership agreement
(if Tenant is a partnership), or a duly adopted resolution of Tenant's board of
directors and the Tenant's by-laws (if Tenant is a corporation); and (c) this
Lease is binding upon Tenant in accordance with its terms.
33.2 JOINT AND SEVERAL LIABILITY. If more than one person or entity executes
this Lease as Tenant: (a) each of them is and shall be jointly and severally
liable for the covenants, conditions, provisions and agreements of this Lease to
be kept, observed and performed by Tenant; and (b) the act or signature of, or
notice from or to, any one or more of them with respect to this Lease shall be
binding upon each and all of the persons and entities executing this Lease as
Tenant with the same force and effect as if each and all of them had so acted or
signed, or given or received such notice.
33.3 LANDLORD'S AUTHORITY. Landlord represents and warrants to Tenant that:
(a) Landlord is a duly authorized and existing limited liability company and is
qualified to do business in California; (b) the persons and entities executing
this Lease are duly authorized to execute and deliver this Lease on Landlord's
behalf in accordance with Landlord's operating agreement; and (c) this Lease is
binding upon Landlord in accordance with its terms.
33.4 NO OPTION. The submission of this Lease for examination or execution by
Tenant does not constitute a reservation of or option for the Premises and this
Lease shall not become effective as a Lease until it has been executed by
Landlord and delivered to Tenant.
34. [INTENTIONALLY OMITTED].
IN WITNESS WHEREOF, the parties have executed this Lease as of the day and year
first above written.
"TENANT" AURORA BIOSCIENCES CORPORATION,
a Delaware corporation
By: /s/ XXXXXXX X. XXXX
--------------------------------------------------
Name: Xxxxxxx X. Xxxx
---------------------------------------------
Title: President and Chief Executive Officer
--------------------------------------------
By: /s/ XXXXXXX X. TOWER
--------------------------------------------------
Name: Xxxxxxx X. Tower
---------------------------------------------
Title: Senior Director, Finance and Administration
--------------------------------------------
"LANDLORD" AEW/LBA ACQUISITION CO. II, LLC,
a California limited liability company
By: LBA, Inc., a California corporation,
its agent
By: /s/ XXXX XXXXXXX
--------------------------------------------
Name: Xxxx Xxxxxxx
---------------------------------------
Title: Principal
--------------------------------------
By:
--------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
-24-
33
PROJECT SITE PLAN
EXHIBIT "A"
34
FLOOR PLAN
EXHIBIT "B"
35
EXHIBIT "C"
WORK LETTER AGREEMENT
1. Tenant shall, at Tenant's sole cost and expense (but subject to partial
reimbursement by Landlord pursuant to Paragraph 6 below), improve the Premises
in accordance with plans and specifications approved in writing by Landlord and
in accordance with the requirements of all laws. It is contemplated by the
parties that the improvements to the Premises (the "TENANT IMPROVEMENTS") will
be as described or depicted on Schedule 1 attached hereto (the "PRELIMINARY
PLANS"). Within thirty (30) days following the Effective Date, Tenant shall
provide to Landlord working drawings for the Tenant's Improvements (including
signage) based upon and conforming with the Preliminary Plans and prepared by a
licensed architect or engineer. Within five (5) business days of Landlord's
receipt of such working drawings, Landlord shall notify Tenant of any required
changes to the working drawings. Landlord's failure to so notify Tenant of any
such required changes to the working drawings within said five (5) business day
period shall be deemed to constitute Landlord's approval thereof. Tenant shall
revise the working drawings in accordance with Landlord's comments and deliver
the same to Landlord within ten (10) days of Tenant's receipt of Landlord's
comments. Tenant shall, at its sole cost and expense, be responsible for
obtaining all permits and approvals from governmental authorities necessary for
the construction of such improvements and the operation of Tenant's business.
Landlord will reasonably cooperate with Tenant (at no cost to Landlord) in
Tenant's efforts to obtain all such permits and approvals. Landlord makes no
representation concerning the availability of such permits or approvals.
2. No improvement of any kind to the Premises shall be erected or
maintained unless and until the plans, specifications and proposed location of
such improvement have been approved in by Landlord, which approval shall not be
unreasonably withheld or delayed. Landlord's review and approval of the plans
and specifications for the improvements shall create no liability or
responsibility on the part of Landlord for the completeness of such plans or
their design sufficiency or compliance with Laws.
3. Except for Landlord's reimbursement pursuant to Paragraph 6 below,
Landlord shall not be responsible for any costs associated with Tenant's
construction of any improvements and Tenant acknowledges that Tenant is
accepting the Premises in its "as-is" and "where-is" state, subject to
Landlord's obligations under Sections 11.2 and 11.3 of the Lease.
4. No work of any kind shall be commenced on and no building or other
material shall be delivered until at least five (5) business days after written
notice has been given by Tenant to Landlord of the commencement of such work or
the delivery of such materials or earlier if agreed to by Landlord.
5. The improvements shall be constructed, and all work performed on the
Premises, shall be in accordance with all laws. All work performed on the
Premises shall be done in a good, workmanlike and lien free manner and only with
new materials of good quality and high standards. All work required in the
construction of the improvements shall be performed only by competent
contractors duly licensed as such under the laws of the State of California.
Tenant will competitively bid the construction with contractors approved by
Landlord, which approval shall not be unreasonably withheld. Tenant shall then
enter into a construction contract approved by Landlord (which approval shall
not be unreasonably withheld or delayed) with the selected contractor to
construct the Tenant Improvements and Tenant shall be responsible for all
aspects of coordinating the construction management.
6. Landlord agrees to contribute the sum ("CONSTRUCTION ALLOWANCE") of up
to Three Million Eighty-Two Thousand Four Hundred Seventy-Five Dollars
($3,082,475.00) toward the cost of the Tenant Improvements. Landlord shall only
be obligated to make disbursements from the Construction Allowance to the extent
costs are incurred by Tenant for Tenant Improvement Allowance Items. The
Construction Allowance shall be disbursed by Landlord only for the following
items and costs (collectively, the "TENANT IMPROVEMENT ALLOWANCE ITEMS"):
(a) Payment of the fees of Tenant's architect and engineers in connection
with the preparation of the plans and specifications and final working
drawings;
(b) The payment of plan check, permit and license fees relating to
construction of the Tenant Improvements; and
(c) The cost of construction of those items of the Tenant Improvements; and
(d) HVAC and vandalism repairs as described in Section 11.2 of the Lease.
Provided Tenant is not in material default under the Lease (and no circumstance
exists that would, with notice or lapse of time, or both, constitute a material
default under the Lease), Landlord shall make periodic disbursements (but no
more often than monthly) of the Construction Allowance for Tenant Improvements
and shall authorize the release of monies for the benefit of Tenant in
accordance with the disbursement procedure established by the construction
contract as reasonably approved by Landlord. Landlord may, at its election, make
disbursement checks payable jointly to Tenant and the contractor. As to each
disbursement, the appropriate portion of the Allowance shall be disbursed to
Tenant (less 10% retention) within thirty (30) days following the date Landlord
has received the following ("EVIDENCE OF COMPLETION"):
(d) Tenant has delivered to Landlord a draw request ("DRAW REQUEST") in the
form of AIA Document G702 and G703 (or other form acceptable to
Landlord) specifying that the requisite portion of Tenant Improvements
has been completed, together with invoices, receipts and bills
evidencing the costs and expenses set forth in such Draw Request;
(e) The architect for the Tenant Improvements has certified to Landlord
that the Tenant Improvements have been completed to the level indicated
in the Draw Request in accordance with the approved plans;
36
(f) Tenant has delivered to Landlord conditional lien releases from the
contractor and all relevant subcontractors and materialmen with respect
to work covered by the current Draw Request and unconditional lien
releases from the contractor and all relevant subcontractors and
materialmen with respect to work covered by prior Draw Requests;
(g) Landlord or Landlord's architect or construction representative has
inspected the Tenant Improvements and determined, in its reasonable
judgment and with all diligence, that the portion of the Tenant
Improvements covered by the Draw Request has been completed in a good
and workmanlike manner, and Landlord is satisfied, in its reasonable
judgment, that the cost to complete the Tenant Improvements does not
exceed the remaining Construction Allowance and other sums available to
Tenant for the payment of such costs;
(h) The Letter of Credit in the amount required by Section 5 of the Lease.
The final disbursement of the balance of the Construction Allowance (i.e., the
retention) shall be disbursed only when Landlord has received Evidence of
Completion as to all of the Tenant Improvements as provided hereinabove and the
following conditions have been satisfied:
(i) Sixty (60) days shall have elapsed following the filing of a
valid notice of completion by Tenant for the Tenant
Improvements;
(ii) A final or temporary certificate of occupancy for the Premises
(if a temporary certificate, the conditions set forth therein
shall be satisfactory to Landlord in its reasonable judgment)
has been issued by the appropriate governmental body or final
sign-off by the subject jurisdiction, if such jurisdiction
does not issue certificates of occupancy;
(iii) Tenant shall have delivered to Landlord one set of
reproducible "As Built" plans for the Tenant Improvements as
prepared by Tenant's architect;
(iv) A complete list of the names, addresses, telephone numbers and
contract amount for all contractors, subcontractors, vendors
and/or suppliers providing materials and/or labor for Tenant's
work;
(v) No claim of lien shall be of record respecting the Tenant
Improvements;
(vi) Tenant shall have delivered to Landlord conditional or
unconditional lien releases, as applicable, in accordance with
California Civil Code Section 3262 as to all of the Tenant
Improvements;
(vii) Copies of all building permits, indicating inspection and
approval of the Premises by the issuer of said permits; and
(viii) Tenant is not in material default under the Lease and Landlord
has not given Tenant notice that a circumstance exists that
would, with notice or lapse of time, or both, constitute a
material default under the Lease.
Landlord, at any time within six (6) months after Tenant takes possession of the
Premises and upon at least five (5) business days prior written notice to
Tenant, may cause an audit to be made of Tenant's books and records relating to
Tenant's expenditures in connection with the construction of the Tenant
Improvements. Tenant shall maintain complete and accurate books and records in
accordance with generally accepted accounting principles of these expenditures
for at least one (1) year. Tenant shall make available to Landlord's auditor
within ten (10) days following Landlord's notice requiring the audit, all books
and records maintained by Tenant pertaining to the construction and completion
of the Tenant Improvements. In addition to all other remedies which Landlord may
have pursuant to the Lease, Landlord may recover from Tenant the reasonable cost
of its audit if the audit discloses that Tenant falsely and knowingly reported
to Landlord expenditures which were not in fact made or falsely and knowingly
reported a material amount of any expenditure or the aggregate expenditures.
7. If substantial completion of the Tenant Improvements is delayed beyond
the date specified in clause (i) of Section 1.7 of the Summary as a direct
result of a Landlord Delay, then such date shall, for purposes of determining
the Commencement Date, be extended by one (1) day for each day of such delay in
the substantial completion of the Tenant Improvements. No Landlord Delay shall
be deemed to have occurred unless and until Tenant has provided written notice
to Landlord specifying the action or inaction that Tenant contends constitutes a
Landlord Delay. If such action or inaction is not cured within two (2) business
days after receipt of such notice, then a Landlord Delay, as set forth in the
notice, shall be deemed to have occurred, commencing as of the date such notice
is received and continuing for the number of days that substantial completion of
the Tenant Improvements was delayed as a direct result of such action or
inaction. For purposes of this Paragraph, a "LANDLORD DELAY" shall mean any
delay in the completion of the Tenant Improvements which is directly due to any
act or omission (but in the case of an omission, only if Landlord had a duty to
act) of Landlord, its agents or contractors, including but not limited to any
delay in the giving of authorizations or approvals of Landlord required under
this Lease, or delay by Landlord in administering any paying when due the
Construction Allowance.
C-2
37
SCHEDULE 1
DESCRIPTION OR DEPICTION OF TENANT IMPROVEMENTS
38
SAMPLE FORM OF NOTICE OF LEASE TERM DATES
To: _____________________________ Date:_____________________
_____________________________
Re: Project Lease dated ______________________, 19__ between
___________________________, Landlord, and
___________________________________________, Tenant, concerning Suite
____________ ("Premises") located at
Gentlemen:
In accordance with the above-referenced Lease, we wish to advise and/or confirm
as follows:
1. That the Premises have been accepted by Tenant as being substantially
complete in accordance with the Lease.
2. That Tenant has accepted and is in possession of the Premises, and
acknowledges that under the provisions of the Lease, the Term of the Lease is
for ______________ (___) years, with ______________ (___) options to renew for
______________ (___) years each, and commenced upon the Commencement Date of
________________, 19__ and is currently scheduled to expire on
________________________, subject to earlier termination as provided in the
Lease.
3 That in accordance with the Lease, rental payment has commenced (or
shall commence) on ______________.
4. If the Commencement Date of the Lease is other than the first day of
the month, the first billing will contain a pro rata adjustment. Each billing
thereafter, with the exception of the final billing, shall be for the full
amount of the monthly installment as provided for in the Lease.
5. Rent is due and payable in advance on the first day of each and every
month during the Term of the Lease. Your rent checks should be made payable to
_________________________ at _______________________________.
6. The exact number of rentable square feet within the Premises is
____________ square feet. The exact number of usable square feet within the
Premises is ____________ square feet.
7. Tenant's Monthly Operating Expense Charge is $________________________.
AGREED AND ACCEPTED
TENANT: LANDLORD:
___________________________________ ___________________________________
By:________________________________ By:________________________________
By:________________________________
SAMPLE ONLY [NOT FOR EXECUTION]
EXHIBIT "D"
39
EXHIBIT "E"
RULES AND REGULATIONS
1. No sign, advertisement, name or notice shall be installed or displayed
on any part of the outside or inside of the Building or in any part of the
Common Area without the prior written consent of Landlord. Landlord shall have
the right to remove, at Tenant's expense and without notice, any sign installed
or displayed in violation of this rule. All approved signs or lettering on doors
and walls shall be printed, painted, affixed or inscribed at the expense of
Tenant by a person approved by Landlord, using materials and in a style and
format approved by Landlord.
2. Tenant shall not place anything or allow anything to be placed near the
glass of any window, door, partition or wall which may appear unsightly from
outside the Premises, in Landlord's reasonable discretion. No awnings or other
projection shall be attached to the outside walls of the Building without the
prior written consent of Landlord.
3. Tenant shall not obstruct any sidewalks, halls, passages, exits,
entrances, or loading docks of the Building. Neither Tenant nor any employee,
invitee, agent, licensee or contractor of Tenant shall go upon or be entitled to
use any portion of the roof of the Building. Notwithstanding the foregoing,
Tenant has exclusive use of the loading area.
4. Unless expressly set forth to the contrary in Tenant's Lease, Tenant
shall have no right or entitlement to the display of Tenant's name or logo on
any Project sign, monument sign or pylon sign.
5. All cleaning and janitorial services for the Premises shall be
provided, at Tenant's sole cost and expense, exclusively by or through Tenant or
Tenant's janitorial contractors in accordance with the provisions of Tenant's
Lease. Tenant shall not cause any unnecessary labor by carelessness or
indifference to the good order and cleanliness of the Premises.
6. Landlord will furnish Tenant, free of charge, with two keys to each
door lock in the Premises. Landlord may impose a reasonable charge for any
additional keys. Tenant, upon termination of its tenancy, shall deliver to
Landlord the keys of all doors which have been furnished to, or otherwise
procured by Tenant.
7. Electric wires, telephones, burglar alarms or other similar apparatus
shall not be installed in the Premises except with the approval and under the
direction of Landlord. The location of telephones, call boxes and any other
equipment affixed to the Premises shall be subject to the approval of Landlord.
Any installation of telephones, telegraphs, electric wires or other electric
apparatus made without permission shall be removed by Tenant at Tenant's own
expense.
8. Tenant shall not use or keep in the Premises any kerosene, gasoline or
inflammable or combustible fluid or material other than those limited quantities
necessary for the operation or maintenance of office equipment, subject to any
express provisions of Tenant's Lease to the contrary. Tenant shall not use or
permit to be used in the Premises any foul or noxious gas or substance, or
permit or allow the Premises to be occupied or used in a manner offensive or
objectionable to Landlord or other occupants of the Building by reason of noise,
odors or vibrations, nor shall Tenant bring into or keep in or about the
Premises any birds or animals.
9. Except for space heaters, Tenant shall not use any method of heating or
air-conditioning other than that supplied by Landlord.
10. Landlord reserves the right from time to time, in Landlord's sole and
absolute discretion, exercisable without prior notice and without liability to
Tenant: (a) to name or change the name of the Building or Project; (b) to change
the address of the Building, and/or (c) to install, replace or change any signs
in, on or about the Common Areas, the Building or Project (except for Tenant's
signs, if any, which are expressly permitted by Tenant's Lease).
11. Tenant shall close and lock all doors of its Premises and entirely shut
off all water faucets or other water apparatus, unless otherwise needed for
Tenant's business and, except with regard to Tenant's computers and other
equipment, if any, which reasonably require electricity on a 24-hour basis, all
electricity, gas or air outlets before Tenant and its employees leave the
Premises. Tenant shall be responsible for any damage or injuries sustained by
other tenants or occupants of the Building or by Landlord for noncompliance with
this rule.
12. The toilet rooms, toilets, urinals, wash bowls and other apparatus
shall not be used for any purpose other than that for which they were
constructed, and no foreign substances of any kind whatsoever shall be thrown
therein.
13. Tenant shall not make any room-to-room solicitation of business from
other tenants in the Building. Tenant shall not use the Premises for any
business or activity other than that specifically provided for in the Lease.
14. Tenant shall not install any radio or television antenna, loudspeaker
or other device on the roof or exterior walls of the Building. Tenant shall not
interfere with radio or television broadcasting or reception from or in the
Building or elsewhere.
15. Except as expressly permitted in Tenant's Lease, Tenant shall not xxxx,
drive nails, screw or drill into the partitions, window mullions, woodwork or
plaster, or in any way deface the Premises or any part thereof, except to
install normal wall hangings. Tenant shall repair any damage resulting from
noncompliance under this rule.
16. Canvassing, soliciting and distribution of handbills or any other
written material, and peddling in the Common Area and other portions of the
Project are expressly prohibited, and each tenant shall cooperate to prevent
same.
40
17. Landlord reserves the right to exclude or expel from the Project any
person who, in Landlord's judgment, is intoxicated or under the influence of
liquor or drugs or who is in violation of any of the Rules and Regulations of
the Project.
18. Tenant shall store all its trash and garbage within its Premises or in
designated trash containers or enclosures within the Project. Tenant shall not
place in any trash box or receptacle any material which cannot be disposed of in
the ordinary and customary manner of trash and garbage disposal. All garbage and
refuse disposal shall be made in accordance with directions reasonably issued
from time to time by Landlord.
19. The Premises shall not be used for lodging of any kind.
20. Tenant agrees that it shall comply with all fire and security
regulations that may be issued from time to time by Landlord, and Tenant also
shall provide Landlord with the name of a designated responsible principal or
employee to represent Tenant in all matters pertaining to such fire or security
regulations. Tenant shall cooperate fully with Landlord in all matters
concerning fire and other emergency procedures.
21. Tenant assumes any and all responsibility for protecting its Premises
from theft, robbery and pilferage. Such responsibility shall include keeping
doors locked and other means of entry to the Premises closed.
22. The requirements of Tenant will be attended to only upon the
appropriate application to Landlord or Landlord's designated representative by
an authorized individual. Employees of Landlord shall not perform any work or do
anything outside of their regular duties unless under special instructions from
Landlord.
23. Landlord may waive any one or more of these Rules and Regulations for
the benefit of Tenant or any other tenant, but no such waiver by Landlord shall
be construed as a waiver of such Rules and Regulations in favor of Tenant or any
other such tenant, nor prevent Landlord from thereafter enforcing any such Rules
and Regulations against any and all of the tenants in the Building.
24. These Rules and Regulations are in addition to, and shall not be
construed to in any way modify or amend, in whole or in part, the terms,
covenants, agreements and conditions of any lease of premises in the Project.
25. Landlord reserves the right to make such other and reasonable Rules and
Regulations as, in its judgment, may from time to time be needed for safety,
security, care and cleanliness of the Project and for the preservation of good
order therein. Tenant agrees to abide by all such Rules and Regulations
hereinabove stated and any additional rules and regulations which are adopted.
26. Tenant shall be responsible for the observance of all of the foregoing
rules by Tenant's employees, agents, clients, customers, invitees or guests.
PARKING RULES AND REGULATIONS
In addition to the foregoing rules and regulations and the parking provisions
contained in the Lease to which this Exhibit "E" is attached, the following
rules and regulations shall apply with respect to the use of the Project's
parking areas.
1. Every xxxxxx is required to park and lock his/her own vehicle. All
responsibility for damage to or loss of vehicles is assumed by the xxxxxx and
Landlord shall not be responsible for any such damage or loss by water, fire,
defective brakes, the act or omissions of others, theft, or for any other cause.
2. Tenant and its employees shall only park in parking areas designated by
Landlord. Tenant shall not leave vehicles in the parking areas overnight nor
park any vehicles in the parking areas other than automobiles, motorcycles,
motor driven or non-motor driven bicycles or four wheeled trucks.
3. No overnight or extended term storage of vehicles shall be permitted,
except that employees may, with notice to Landlord, park their vehicles
overnight for a period not to exceed five (5) business days.
4. Vehicles must be parked entirely within painted stall lines of a single
parking stall.
5. All directional signs and arrows must be observed.
6. The speed limit within all parking areas shall be five (5) miles per
hour.
7. Parking is prohibited: (a) in areas not striped for parking; (b) in
aisles; (c) where "no parking" signs are posted; (d) on ramps; (e) in
cross-hatched areas; and (f) in reserved spaces and in such other areas as may
be designated by Landlord.
8. Washing, waxing, cleaning or servicing of any vehicle not owned by an
employee of Tenant is prohibited.
9. Landlord may refuse to permit any person who violates these rules to
park in the parking areas, and any violation of the rules shall subject the
vehicle to removal, at such vehicle owner's expense.
E-2
41
EXHIBIT "F"
SAMPLE FORM OF TENANT ESTOPPEL CERTIFICATE
The undersigned ("Tenant") hereby certifies to _______________________________
("Landlord"), and ____________________________, as follows:
1. Attached hereto is a true, correct and complete copy of that certain
Project Lease dated ________________________, 19__ between Landlord and Tenant
(the "Lease"), which demises Premises which are located at
________________________________________________. The Lease is now in full force
and effect and has not been amended, modified or supplemented, except as set
forth in Section 6 below.
2. The term of the Lease commenced on ________________, 19__.
3. The term of the Lease is currently scheduled to expire on
________________, 19__.
4. Tenant has no option to renew or extend the Term of the Lease except:
________________________________.
5. Tenant has no preferential right to purchase the Premises or any
portion of the Building or Project upon which the Premises are located, and
Tenant has no rights or options to expand into other space in the Building
except: ________________________________________________________________________
6. The Lease has: (Initial One)
( ) not been amended, modified, supplemented, extended, renewed
or assigned.
( ) been amended, modified, supplemented, extended, renewed or
assigned by the following described agreements, copies
of which are attached hereto:_______________________________.
7. Tenant has accepted and is now in possession of the Premises and has
not sublet, assigned or encumbered the Lease, the Premises or any portion
thereof except as follows: ________________________________.
8. The current Monthly Basic Rent is $______________; and current monthly
parking charges are $____________.
9. Tenant's Monthly Operating Expense Charge currently payable by Tenant
is $____________ per month.
10. The amount of security deposit (if any) is $________________. No other
security deposits have been made.
11. All rental payments payable by Tenant have been paid in full as of the
date hereof. No rent under the Lease has been paid for more than thirty (30)
days in advance of its due date.
12. All work required to be performed by Landlord under the Lease has been
completed and has been accepted by Tenant, and all tenant improvement allowances
have been paid in full.
13. To the best of Tenant's knowledge, as of the date hereof, there are no
defaults on the part of Landlord or Tenant under the Lease.
14. Tenant has no defense as to its obligations under the Lease and claims
no set-off or counterclaim against Landlord.
15. Tenant has no right to any concession (rental or otherwise) or similar
compensation in connection with renting the space it occupies, except as
expressly provided in the Lease.
16. All insurance required of Tenant under the Lease has been provided by
Tenant and all premiums have been paid.
17. There has not been filed by or against Tenant a petition in bankruptcy,
voluntary or otherwise, any assignment for the benefit of creditors, any
petition seeking reorganization or arrangement under the bankruptcy laws of the
United States or any state thereof, or any other action brought pursuant to such
bankruptcy laws with respect to Tenant, except as follows _____________________.
18. Tenant pays rent due Landlord under the Lease to Landlord and does not
have any knowledge of any other person who has any right to such rents by
collateral assignment or otherwise.
42
The foregoing certification is made with the knowledge that
________________________ is about to [FUND A LOAN TO LANDLORD OR PURCHASE THE
BUILDING FROM LANDLORD], and that ________________________ is relying upon the
representations herein made in [FUNDING SUCH LOAN OR PURCHASING THE BUILDING].
Dated: ________________, 19__.
"TENANT"
___________________________________
By:________________________________
By:________________________________
SAMPLE ONLY (NOT FOR EXECUTION)
F-2
43
EXHIBIT "G"
TENANT ENVIRONMENTAL QUESTIONNAIRE
The purpose of this form is to obtain information regarding the use or proposed
use of hazardous materials at the premises. Prospective tenants should answer
the questions in light of their proposed operations at the premises. Existing
tenants should answer the questions as they relate to ongoing operations at the
premises and should update any information previously submitted. If additional
space is needed to answer the questions, you may attach separate sheets of paper
to this form.
Your cooperation in this matter is appreciated.
1. GENERAL INFORMATION
Name of Responding Company:___________________________________________.
Check the Applicable Status: Prospective Tenant _____ Existing Tenant _____
Mailing Address:_______________________________________________________
Contact Person and Title:______________________________________________
Telephone Number: (_____) ________________________
Address of Leased Premises:____________________________________________
Length of Lease Term:__________________________________________________
Describe the proposed operations to take place on the premises,
including principal products manufactured or services to be conducted.
Existing tenants should describe any proposed changes to ongoing
operations.
________________________________________________________________________________
________________________________________________________________________________
2. STORAGE OF HAZARDOUS MATERIALS
2.1 Will any hazardous materials be used or stored on-site?
Wastes Yes _____ No _____
Chemical Products Yes _____ No _____
2.2 Attach a list of any hazardous materials to be used or stored,
the quantities that will be on-site at any given time, and the
location and method of storage (e.g., 55-gallon drums on
concrete pad).
3. STORAGE TANKS AND SUMPS
3.1 Is any above or below ground storage of gasoline, diesel or
other hazardous substances in tanks or sumps proposed or
currently conducted at the premises?
Yes ______ No _____
If yes, describe the materials to be stored, and the type,
size and construction of the sump or tank. Attach copies of
any permits obtained for the storage of such substances.
______________________________________________________________
______________________________________________________________
3.2 Have any of the tanks or sumps been inspected or tested for
leakage?
Yes ______ No _____
If so, attach the results.
3.3 Have any spills or leaks occurred from such tanks or sumps?
Yes ______ No _____
If so, describe.
______________________________________________________________
______________________________________________________________
3.4 Were any regulatory agencies notified of the spill or leak?
Yes ______ No _____
If so, attach copies of any spill reports filed, any clearance
letters or other correspondence from regulatory agencies
relating to the spill or leak.
3.5 Have any underground storage tanks or sumps been taken out of
service or removed?
Yes ______ No _____
If yes, attach copies of any closure permits and clearance
obtained from regulatory agencies relating to closure and
removal of such tanks.
44
4. SPILLS
4.1 During the past year, have any spills occurred at the
premises?
Yes ______ No _____
If yes, please describe the location of the spill.
______________________________________________________________
______________________________________________________________
4.2 Were any agencies notified in connection with such spills?
Yes ______ No _____
If yes, attach copies of any spill reports or other
correspondence with regulatory agencies.
4.3 Were any clean-up actions undertaken in connection with the
spills?
Yes ______ No _____
Attach copies of any clearance letters obtained from any
regulatory agencies involved and the results of any final soil
or groundwater sampling done upon completion of the clean-up
work.
5. WASTE MANAGEMENT
5.1 Has your company been issued an EPA Hazardous Waste Generator
I.D. Number?
Yes ______ No _____
5.2 Has your company filed a biennial report as a hazardous waste
generator?
Yes ______ No _____
If so, attach a copy of the most recent report filed.
5.3 Attach a list of the hazardous wastes, if any, generated or to
be generated at the premises, its hazard class and the
quantity generated on a monthly basis.
5.4 Describe the method(s) of disposal for each waste. Indicate
where and how often disposal will take place.
_____ On-site treatment or recovery _____________________
_____ Discharged to sewer _______________________________
_____ Transported and disposed of off-site ______________
_____ Incinerator _______________________________________
5.5 Indicate the name of the person(s) responsible for maintaining
copies of hazardous waste manifests completed for off-site
shipments of hazardous waste.
5.6 Is any treatment of processing of hazardous wastes currently
conducted or proposed to be conducted at the premises:
Yes ______ No _____
If yes, please describe any existing or proposed treatment
methods. _____________________________________________________
______________________________________________________________
5.7 Attach copies of any hazardous waste permits or licenses
issued to your company with respect to its operations at the
premises.
6. WASTEWATER TREATMENT/DISCHARGE
6.1 Do you discharge wastewater to:
_____ storm drain? _____ sewer?
_____ surface water? _____ no industrial discharge
6.2 Is your wastewater treated before discharge?
Yes ______ No _____
If yes, describe the type of treatment conducted.
______________________________________________________________
______________________________________________________________
6.3 Attach copies of any wastewater discharge permits issued to
your company with respect to its operations at the premises.
G-2
45
7. AIR DISCHARGES
7.1 Do you have any filtration systems or stacks that discharge
into the air?
Yes ______ No _____
7.2 Do you operate any of the following types of equipment or any
other equipment requiring an air emissions permit?
_____ Spray booth
_____ Dip tank
_____ Drying oven
_____ Incinerator
_____ Other (please describe) ___________________________
_____ No equipment requiring air permits
7.3 Are air emissions from your operations monitored?
Yes ______ No _____
If so, indicate the frequency of monitoring and a description
of the monitoring results.
______________________________________________________________
7.4 Attach copies of any air emissions permits pertaining to your
operations at the premises.
8. HAZARDOUS MATERIALS DISCLOSURES
8.1 Does your company handle hazardous materials in a quantity
equal to or exceeding an aggregate of 500 pounds, 55 gallons,
or 200 cubic feet per month?
Yes ______ No _____
8.2 Has your company prepared a hazardous materials management
plan pursuant to any applicable requirements of a local fire
department or governmental agency?
Yes ______ No _____
If so, attach a copy of the business plan.
8.3 Has your company adopted any voluntary environmental, health
or safety program?
Yes _____ No _____
If so, attach a copy of the program. No formal program. We
recycle paper, aluminum cans, and scrap aluminum.
9. ENFORCEMENT ACTIONS, COMPLAINTS
9.1 Has your company ever been subject to any agency enforcement
actions, administrative orders, or consent decrees?
Yes ______ No _____
If so, describe the actions and any continuing compliance
obligations imposed as a result of these actions.
______________________________________________________________
9.2 Has your company ever received requests for information,
notice or demand letters, or any other inquiries regarding its
operations?
Yes ______ No _____
9.3 Have there ever been, or are there now pending, any lawsuits
against the company regarding any environmental or health and
safety concerns?
Yes ______ No _____
9.4 Has an environmental audit ever been conducted at your
company's current facility?
Yes ______ No _____
If so, identify who conducted the audit and when it was
conducted.
______________________________________________________________
Company
By:___________________________
Title:________________________
Date:_________________________
G-3
