AMENDMENT TO BUILDING E LEASE
AMENDMENT made and entered into this 21 day of April, 1988, by and between
SEVENTH STREET PROPERTIES II ("Lessor") and XOMA CORPORATION ("Lessee") to that
certain Triple Net Lease (the "Building E Lease") entered into between Lessor
and Lessee for approximately 35,000 square feet in Building E of Aquatic Park
Center and dated , 1987 as amended by a Letter Agreement between Lessor and
Lessee dated June 26, 1987.
Lessor and Lessee hereby agree to amend the Building E Lease as follows:
The definition of "shell condition" as used in the Building E Lease shall
be as defined in Exhibit B of the Building E Lease, except that the following
improvements shall be deleted from the definition of shell condition: (1) fire
sprinklers, (2) landscaping, (3) parking lot and (4) site lighting. The Premises
shall be delivered by Lessor to Lessee without the above four listed
improvements.
Except as specifically amended above, the Building E Lease shall remain
unmodified and in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment to the
Building E Lease on the day and year first written above.
LESSOR: LESSEE:
SEVENTH STREET PROPERTIES II XOMA CORPORATION
0000 Xxx Xxxxxx, Xxxxx 000 0000 0xx Xxxxxx
Xxx Xxxxxx, XX 00000 Xxxxxxxx, XX 00000
By /s/ Xxxxxxx X. Xxxxxxx By /s/ X.X. Xxxxxx
---------------------------- -----------------------------
(Signature) (Signature)
Xxxxxxx X. Xxxxxxx X.X. Xxxxxx - V.P Operations
---------------------------- -----------------------------
(Print Name & Title) (Print name and title)
It is agreed that shell has been completed sufficient for build out to begin as
of May 1, 1988.
By /s/ Xxxxxxx X. Xxxxxxx By /s/ X.X. Xxxxxx
---------------------------- -----------------------------
(Signature) (Signature)
NOTED
AUG 3, 1987
H.R.H.
June 26, 1987
Xx. Xx Xxxxxxxx
Xoma Corporation
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
RE: BUILDING E OF AQUATIC PARK CENTER.
Dear Xx. Xxxxxxxx:
On or about the date of this letter, Xoma Corporation ("Xoma") and Seventh
Street Properties II ("Lessor") entered into a lease of Building E at Aquatic
Park Center (the "Lease").
With respect to Building E, the parties hereby agree as follows:
1. Right Of First Refusal. Xoma shall have the right of first refusal to
purchase Building E from Lessor if and when Lessor elects to sell its entire
interest in Building E. If Lessor proposes to sell the Building, it shall first
serve written notice on Xoma setting forth the terms on which Building E shall
be sold (the "Initial Notice"). Xoma shall have 15 calendar days after receipt
of the Initial Notice in which to inform Lessor in writing that it wishes to
purchase the Building on the terms set forth in the Initial Notice. Notices
shall be delivered in accordance with the terms of the Lease. Failure of Xoma to
serve such written notice within the 15 day period or to close the sale within
45 days after serving notice on Lessor of its intent to purchase (other than as
a result of Lessor's default) shall be deemed to be a waiver of its right of
first refusal, and Lessor shall be free thereafter to sell Building E to third
parties. Notwithstanding the above, if Lessor proposes to offer more favorable
terms to third parties than set forth in the Initial Notice, then Lessor shall
serve another written notice on Xoma and again go through the procedure set
forth above, provided that Lessor shall not need to serve another written notice
or go through the procedure if Xoma had previously elected to purchase Building
E but failed to close the transaction within the time stated above.
Xx. Xx Xxxxxxxx
Xxxx 26, 1987
Page 2
2. Laboratory Animal Ordinance. If at any time during the term of the
Lease, the City of Berkeley passes an ordinance which prohibits the use of all
laboratory animals, then Xoma may elect to have the rent abated for up to 5,000
square feet of animal laboratory space in Building E and to receive a $15 per
square foot tenant improvement allowance (the "Allowance") for the purpose of
converting such laboratory space to other uses. Xoma may exercise such right
only by serving written notice on Lessor within 30 calendar days after the
ordinance goes into effect. The rent abatement shall commence at the date
specified in Xoma's notice to Lessor, which in no event shall be later than 90
days after the ordinance goes into effect. Notwithstanding anything to the
contrary above, rent shall in no case be abated for more than 180 days. Xoma
shall be responsible for building out all tenant improvements. The Allowance
shall be paid to Xoma upon substantial completion of the improvements and their
approval by Lessor. Nothing herein shall release Xoma from the terms of the
Lease in connection with such tenant improvements including, but not limited to,
the responsibility of having Lessor approve any such tenant improvements in
advance, which approval shall not be unreasonably withheld.
3. Forgiveness Of Rent. It is agreed that the monthly rent owing pursuant
to Paragraph 4.1 of the Lease shall be forgiven and shall not be payable by Xoma
through the six month anniversary of the Commencement Date. Accordingly, the
first month's rent to be deposited at the execution of the Lease shall be
applied against the rent owing for the first month following the six month
anniversary of the Commencement Date.
Please confirm by signing below your agreement with this amendment to the
Lease and your acknowledgment that except for this specific amendment, all terms
and conditions of the Lease shall remain unmodified and in full force and
effect.
Sincerely,
SEVENTH STREET PROPERTIES II
By /s/ Xxxxxxx X. Xxxxxxx
-----------------------------
(Signature)
Xxxxxxx X. Xxxxxxx
-----------------------------
(Print Name And Title)
Xx. Xx Xxxxxxxx
Xxxx 26, 1987
Page 3
The terms set forth above are hereby agreed to on 22 July, 1987.
XOMA CORPORATION
By /s/ Xxxxxx X. Xxxxxxx
----------------------------
(Signature)
Xxxxxx X. Xxxxxxx/ CEO
----------------------------
(Print Name & Title)
XOMA CORPORATION
BUILDING E
TRIPLE NET LEASE
Table Of Contents
Paragraph Title Page
1.0 BASIC LEASE TERMS ..............................................1
1.1 Commencement Of Lease ...............................1
1.2 Lease Term ..........................................1
1.3 Monthly Rent ........................................1
1.4 Lessee's Pro Rata Share .............................1
1.5 Security Deposit ....................................1
1.6 Use .................................................1
2.0 PREMISES .......................................................2
2.1 Description .........................................2
2.2 Work Of Improvement .................................2
2.3 Possession ..........................................2
3.0 TERM ...........................................................2
3.1 Commencement ........................................2
3.2 Delay In Commencement ...............................2
3.3 Option To Terminate .................................2
3.4 Option To Extend Term ...............................2
3.5 Term ................................................3
3.6 Fair Market Lease Rate ..............................3
4.0 RENT ...........................................................4
4.1 Monthly Rent ........................................4
4.2 Rent Adjustment .....................................4
4.3 Mode Of Payment .....................................5
4.4 Triple Net Lease ....................................5
4.5 Estimated Payments ..................................5
4.6 Security Deposit ....................................6
4.7 Late Charges ........................................6
5.0 TAXES ..........................................................7
5.1 Real Property Taxes .................................7
5.2 Personal Property Taxes .............................7
6.0 INSURANCE ......................................................8
6.1 Property/Rental Insurance -
Premises ...........................................8
6.2 Property Insurance - Fixtures And
Inventory ..........................................8
6.3 Lessor's Liability Insurance ........................8
6.4 Lessee's Liability Insurance ........................8
6.5 Waiver Of Subrogation ...............................9
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6.6 Indemnification .....................................9
6.7 Plate Glass Replacement .............................9
6.8 Workers' Compensation Insurance .....................10
7.0 MAINTENANCE ....................................................10
7.1 Premises ............................................10
7.2 Building ............................................10
7.3 Common Areas ........................................10
7.4 Alterations, Changes And Additions
By Lessee ..........................................11
7.5 Plumbing ............................................11
7.6 Liens ...............................................11
8.0 MANAGEMENT .....................................................12
9.0 UTILITIES AND SERVICES .........................................12
9.1 Premises ............................................12
9.2 Common Areas ........................................12
10.0 USE OF PREMISES ................................................13
10.1 Use .................................................13
10.2 Suitability .........................................13
10.3 Uses Prohibited .....................................13
10.4 Lessee's Warranty ...................................14
11.0 DEFAULT PROVISIONS .............................................14
11.1 Insolvency ..........................................14
11.2 Non-Payment, Breach Or Vacating .....................14
11.3 Default Under Other Leases ..........................15
11.4 Lessor's Right To Relet .............................15
11.5 Right To Terminate ..................................15
11.6 Default By Lessor ...................................15
12.0 EXPIRATION OR TERMINATION ......................................16
12.1 Surrender Of Possession .............................16
12.2 Holding Over ........................................16
12.3 Voluntary Surrender .................................16
13.0 CONDEMNATION OF PREMISES .......................................16
13.1 Total Condemnation ..................................16
13.2 Partial Condemnation ................................17
13.3 Award To Lessee .....................................17
14.0 ENTRY BY LESSOR ................................................17
15.0 INDEMNIFICATION ................................................18
16.0 ASSIGNMENT AND SUBLETTING ......................................18
17.0 DAMAGE OR DESTRUCTION ..........................................19
17.1 Right To Termination On Destruction
Of Premises ........................................19
17.2 Repairs By Lessor ...................................19
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17.3 Reduction of Rent During Repairs ....................19
17.4 Arbitration .........................................19
17.5 Lessor's Overriding Right To
Terminate ..........................................19
18.0 MISCELLANEOUS PROVISIONS .......................................20
18.1 Waiver ..............................................20
18.2 Successors And Assigns ..............................20
18.3 Notices .............................................20
18.4 Partial Invalidity ..................................20
18.5 Number And Gender ...................................20
18.6 Descriptive Headings ................................20
18.7 Time Is Of The Essence ..............................20
18.8 Entire Agreement ....................................20
18.9 Memorandum Of Lease .................................21
18.10 Applicable Law ......................................21
18.11 Corporate Authority .................................21
18.12 Litigation Expense ..................................21
18.13 Subordination Of Leasehold ..........................21
18.14 Lessee's Certificate ................................21
18.15 Attornment ..........................................22
18.16 Day .................................................22
18.17 Brokers .............................................22
EXHIBIT A - DESCRIPTION OF THE PREMISES AND PROPERTY
EXHIBIT B - WORK TO BE PERFORMED BEFORE OCCUPANCY OF PREMISES
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XOMA CORPORATION
BUILDING E
TRIPLE NET LEASE
LEASE made and entered into this 22 day of July 1987, between SEVENTH
STREET PROPERTIES II ("Lessor") and XOMA CORPORATION ("Lessee").
R E C I T A L S:
A. Concurrently with the execution of this Lease, Lessee is entering into
three other leases, specifically one with Lessor for approximately 6,720 square
feet in Building C at Aquatic Park Center (the "Building C Lease") another with
Lessor for approximately 20,000 square feet in Building F at Aquatic Park Center
(the "Building F Lease"), and another with Seventh Street Properties, an
affiliate of Lessor, for approximately 24,275 square feet at 000 Xxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxxxx (the "Heinz Street Lease").
B. The Building C Lease, the Heinz Street Lease and this Lease are intended
to be read together so that a breach of one is deemed a breach of the other.
A G R E E M E N T:
NOW, THEREFORE, the parties hereby agree as follows:
1.0 BASIC LEASE TERMS.
1.1 Commencement Of Lease: The term of this Lease shall commence on the
earlier of:
a. The date Lessor notifies Lessee in writing that the construction to be
performed by Lessor pursuant to Paragraph 2.2 hereof has been substantially
completed. Substantial completion shall occur when the Premises are in such
condition as to permit Lessor to file a Notice of Completion with respect to its
work; or
b. The date Lessee actually commences to do business at the Premises.
1.2 Lease Term: Through April 30, 2003.
1.3 Monthly Rent: $38,500.
1.4 Lessee's Pro Rata Share: 29.17%.
1.5 Security Deposit: $38,500.
1.6 Use: Pharmaceutical manufacturing, offices, laboratories, shipping and
receiving relating to pharmaceutical products.
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2.0 PREMISES.
2.1 Description. Lessor hereby leases to Lessee all of Building E (the
"Premises") constituting approximately 35,000 square feet, which constitute a
portion of a larger piece of real property owned by Lessor and known as the
Aquatic Park Center (the "Property"). Exhibit A attached hereto further
describes the Premises and the Property.
2.2 Work Of Improvement. The respective obligations of Lessor and Lessee to
perform the work and supply material and labor to prepare the Premises for
occupancy are set forth in Exhibit B attached hereto and incorporated herein.
Lessor and Lessee shall expend all funds and do all acts required of them
respectively in Exhibit B and shall have the work performed promptly and
diligently in a first-class, workmanlike manner. Lessee shall not commence
construction of the improvements to be undertaken by Lessee until Lessor has
approved in writing the final drawings for said improvements, which approval
shall neither be unreasonably withheld nor delayed.
2.3 Possession. Lessor shall deliver occupancy of the Premises to Lessee on
the Commencement Date as hereinafter defined.
3.0 TERM.
3.1 Commencement. The Lease shall commence on the date specified in
Paragraph 1.1 above (the "Commencement Date") and shall continue thereafter for
the term specified in Paragraph 1.2 above (the "Initial Term"), unless sooner
terminated pursuant to this Lease.
3.2 Delay In Commencement. If for any reason Lessor cannot deliver
possession of the Premises to Lessee on the Commencement Date, such failure
shall not affect the validity of this Lease nor shall it extend the Term or
render Lessor liable to Lessee for any loss or damage resulting therefrom;
except that if possession is not delivered to Lessee on the Commencement Date,
Tenant shall not be obligated to pay rent until possession of the Premises is
tendered to Lessee. Notwithstanding the above, if Lessor does not deliver
possession of the Premises to Lessee by June 30, 1988, then Lessee shall have
the option of terminating this Lease by serving written notice on Lessor on or
before July 15, 1988.
3.3 Option To Terminate. Lessee is hereby granted an option to terminate
the Lease effective April 30, 1998 by giving written notice to Lessor of
Lessee's intent to terminate (the "Termination Notice") on or before July 31,
1997.
3.4 Option To Extend Term. Lessee is hereby granted an option to extend the
term for a five year period following the expiration of the Initial Term (the
"Option Term") by giving written notice to the Lessor of Lessee's intent to
exercise such option (the "Option Notice") at least 270 days before the
expiration of the Initial Term. The Option Term shall be on the same terms and
conditions in effect immediately before the end of the Initial Term, except that
the rent shall
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be set at 95% of the fair market lease rate for comparable space in the Berkeley
area, provided that in no event shall the rental rate for the Option Term be
less than the rental rate as of the last day of the Initial Term.
Notwithstanding anything to the contrary above, if Lessee is in default in the
payment of rent, in the making of other payments required to be made by Lessee
under this lease or otherwise under this Lease on the date the Option Notice is
delivered to Lessor or on the date the Option Term is to commence, the Option
Term shall not commence and this Lease shall expire at the end of the Initial
Term.
3.5 Term. All references to the "Term" in this Lease shall include the
Initial Term set forth in Paragraph 3.1 plus any extensions pursuant to
Paragraph 3.4.
3.6 Fair Market Lease Rate. Lessor shall give Lessee notice ("Lessor's
Notice") of the fair market lease rate after receiving Lessee's written notice
of intent to exercise the Option, provided that Lessor's Notice shall not be
delivered later than 120 days prior to the commencement of the Option Term. If
Lessee believes that the fair market lease rate as established by Lessor is
incorrect, Lessee shall notify Lessor in writing within 20 days of Lessee's
receipt of the notice from Lessor that Lessee desires to submit the matter to
appraisal with a designation of an MAI qualified appraiser. If Lessor agrees
with the identity of such appraiser, it shall within 10 days notify the
appraiser and Lessee that such appraiser shall determine the fair market lease
rate (including fair market increases during the Option Term). If not, Lessor
shall submit the name of its appraiser to Lessee within said 10 days. The two
appraisers so selected shall choose a third appraiser and the three together
shall determine the fair market lease rate (including fair market increases
during the Option Term). If the two appraisers cannot select a third appraiser
within 20 days after Lessor submits the name of its appraiser, either party may
at any time apply to the presiding judge of any court of competent jurisdiction
for the appointment of the third appraiser. If the three appraisers are unable
to agree on the fair market lease rate they shall each determine the fair market
lease rate assuming annual CPI increases during the Option Term and then average
their determinations by tossing out the high and low appraisal and accepting the
middle appraisal as the fair market lease rate. The costs of the appraisal
process shall be borne by Lessee unless the fair market lease rate as determined
by the appraisal is more than 10% below the lease rate set forth in Lessor's
Notice in which case Lessor and Lessee shall share the costs of the appraisal
process equally. The appraisal process shall be completed as quickly as
reasonably possible. If for any reason the Option Term commences prior to the
conclusion of the appraisal process, Lessee shall continue to pay the monthly
base rent then in effect to Lessor plus 10% of such amount, which 10% only shall
be held by Lessor in escrow pending completion of the appraisal process, at
which time all funds held in escrow shall be distributed to Lessee and/or Lessor
in accordance with the outcome of the appraisal process, and Lessee shall
subsequently be bound by the lease rate as determined by the appraisal process.
The rent during the Option Term shall continue to be adjusted as agreed upon
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between Lessor and Lessee or as determined by the appraisal process.
4.0 RENT
4.1 Monthly Rent. Lessee shall pay to Lessor as rent for the Premises in
advance on the first day of each calendar month of the Term without deduction,
offset, prior notice or demand, in lawful money of the United States, the sum
specified in Paragraph 1.3 above which is based on $1.10 per square foot and the
square footage set forth in Paragraph 2.1. The rent owing shall be adjusted as
necessary if the actual square footage is shown to be other than as set forth in
Paragraph 2.1. Notwithstanding the above, Lessee shall not be required to pay
rent until the Commencement Date under the Building C Lease. If the Commencement
Date is not the first day of a calendar month, the first monthly installment of
such rent shall be applied on a per diem basis against payment of the rent from
the Commencement Date until the first day of the first succeeding calendar
month. Any unused portion of said amount shall be applied against payment of the
rent for such first succeeding calendar month, and the balance of the rent for
that month shall be due on the first day thereof. Concurrent with Lessee's
execution of this Lease, Lessee shall pay to Lessor the first monthly
installment of rent.
4.2 Rent Adjustment. For the period through April 30, 1998 the base rent
set forth in Paragraph 4.1 above shall be adjusted as follows. On October 1,
1990 and every three years thereafter (the "Adjustment Dates"), the base rent
shall be adjusted by the percentage increase in the Consumer Price Index (all
items) for all urban consumers in the San Francisco-Oakland metropolitan area,
published by the United States Department of Labor, Bureau of Labor Statistics.
The monthly rent until the next Adjustment Date shall be the greater of (a) the
rent in effect immediately before the Adjustment Date or (b) the initial rent
set forth in Paragraph 4.1 above multiplied by a fraction, the numerator of
which shall be said Index number for the calendar month three months prior to
the Adjustment Date and the denominator of which shall be said Index number for
the calendar month three months prior to the first full calendar month following
the Commencement Date. Notwithstanding the above, in no case shall the increase
as of any Adjustment Date exceed 21% plus the Carry Forward. As used above, the
"Carry Forward" shall mean the percentage increases in CPI which are not used at
earlier Adjustment Dates to adjust the rent because of this limitation. For
example, if the CPI increase is 15% on October 1, 1990, then the Carry Forward
is six percent and the CPI increase on October 1, 1993 shall be the actual CPI
increase, not to exceed 27%. If the actual CPI increase on October 1, 1993 were
23%, then the Carry Forward to October 1, 1996 would be four percent. Should the
Bureau discontinue the publication of said Index numbers, or publish the same
less frequently, or alter the same in some other manner, then Lessor shall adopt
a substitute index or procedure which reasonably reflects consumer prices.
Commencing May 1, 1998, the adjustment mechanism set forth above shall be
discarded and rent shall be adjusted to 95% of
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the fair market lease rate as of May 1, 1998 for comparable space in the
Berkeley area, provided that in no event shall the new rental rate be less than
the rental rate in effect immediately before such adjustment. (Adjustments
subsequent to May 1, 1998 shall be determined in the course of establishing the
fair market lease rate.) On or before January 1, 1998, Lessor shall provide
Lessee with notice of the May 1, 1998 fair market lease rate. The fair market
lease rate shall then be determined in accordance with Paragraph 3.6, and the
notice referenced above shall be deemed "Lessor's Notice."
4.3 Mode Of Payment. Lessee shall pay all rent due Lessor at Lessor's
address set forth on the signature page hereof, or any such other place as
Lessor may designate from time to time in writing.
4.4 Triple Net Lease. This Lease is what is commonly called a "Net, Net,
Net Lease," it being understood that Lessor shall receive the rent set forth
herein free and clear of any and all other impositions, taxes, liens, charges or
expenses of any nature whatsoever in connection with the ownership and operation
of the Premises. All references herein to Lessee's pro rata share of any expense
shall mean the total expense of any such item multiplied by a fraction, the
numerator of which shall be the total floor area of the Premises and the
denominator of which shall be the total floor area available for lease by Lessor
of Buildings C, E and F on the Property. "Floor area" shall be measured from the
exterior surface of all exterior walls and from the center of all walls
separating the Premises from adjacent premises. Based upon the square footage
numbers set forth in Paragraph 2.1, Lessee's pro rata share has been calculated
and is set forth in Paragraph 1.4. Lessee's pro rata share shall be adjusted as
necessary if the actual square footage is shown to be other than as set forth in
Paragraph 2.1 or upon any subdivision of the Property. In the event of
non-payment of all or any portion of such charges, costs and expenses, Lessor
shall have the same rights and remedies as provided in this Lease for failure of
Lessee to pay rent. Lessee shall in no event be entitled to any abatement or
reduction of rent or other monetary sums payable hereunder, except as expressly
provided herein, notwithstanding any present or future law to the contrary.
4.5 Estimated Payments. Lessee shall be notified by Lessor of Estimated
Payments for taxes, insurance, maintenance of common areas and common area
utilities and services from time to time. The Estimated Payments shall be paid
by Lessee together with rent, on the first day of each month throughout the
Term. The Estimated Payments may be increased or decreased by Lessor upon 30
days' written notice to Lessee based upon statements received or charges
incurred by Lessor, information available to Lessor as to the probable cost of
expected charges and expenses, or the reasonable estimate of Lessor as to the
probable amount of expected charges or expenses. Lessor shall be entitled to
retain the monies received from such payments in its general fund pending
payment of all such costs and charges. No more frequently than once each
calendar quarter, the actual costs shall be determined by Lessor, and Lessee
shall remit to Lessor on demand its unpaid pro rata share of the actual expense.
In the event Lessee paid more than its pro
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rata share of the actual expenses for such period of time, Lessor shall apply
such overpayment towards the next Estimated Payments owing by Lessee. At the
termination of this Lease, an accounting for such charges and expenses shall be
made to the nearest practical accounting period, and Lessee shall pay to Lessor
any balance due, or the Lessor shall refund to Lessee any excess amount paid.
4.6 Security Deposit. Concurrent with Lessee's execution of this Lease,
Lessee shall deposit with Lessor as a security deposit the sum specified in
Paragraph 1.5 above (the "Deposit"). On May 1, 1998 and May 1, 2003 (unless the
Lease is terminated or the Option is not exercised, as the case may be) Lessee
shall increase the Deposit to that amount which is equal to the newly
established monthly rental. The Deposit shall be held by Lessor as a security
deposit for the faithful performance by Lessee of all terms, covenants, and
conditions of this Lease to be kept and performed by Lessee during the Term. If
Lessee defaults with respect to any provisions of this Lease, including but not
limited to the provisions relating to the payment of rent and any of the
monetary sums due hereunder, Lessor may (but shall not be required to) use,
apply or retain any part or all of the Deposit for the payment of any amount
which Lessor may spend or become obligated to spend by reason of Lessee's
default or to compensate Lessor for any loss or damage which Lessor may suffer
by reason of Lessee's default. If any portion of the Deposit is so used or
applied, Lessee shall, within 10 days after written demand therefor, deposit
cash with Lessor in an amount sufficient to restore the Deposit to its original
amount; Lessee's failure to do so shall be a material breach of this Lease.
Lessor shall not be required to keep the Deposit separate from its general
funds, and Lessee shall not be entitled to interest on the Deposit. If Lessee
shall fully and faithfully perform every provision of this Lease to be performed
by it, the Deposit or any balance thereof shall be returned to Lessee (or, at
Lessor's option, to the last assignee of Lessee's interests hereunder) at the
expiration of the Term and after Lessee has vacated the Premises. In the event
of termination of Lessor's interest in this Lease, Lessor shall transfer the
Deposit to Lessor's successor in interest, whereupon Lessee agrees to release
Lessor from all liability for the return of the Deposit or the accounting
therefor.
4.7 Late Charges. Lessee hereby acknowledges that late payment by Lessee to
Lessor of rent and other sums due hereunder will cause Lessor to incur costs not
contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not limited to, processing
and accounting charges, and late charges which may be imposed on the Lessor by
the terms of any mortgage or trust deed covering the Premises. Accordingly, if
any installment of rent or any other sum due from Lessee shall not be received
by Lessor or Lessor's designee within 10 days after such amount shall be due,
Lessee shall pay to Lessor a late charge equal to five percent of such overdue
amount. The parties hereby agree that such late charge represents a fair and
reasonable estimate of the costs Lessor will incur by reason of late payment by
Lessee. Acceptance of such late charge by Lessor shall in no event constitute a
waiver of
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Lessee's default with respect to such overdue amount, nor prevent a Lessor from
exercising any of the other rights and remedies granted hereunder.
5.0 TAXES.
5.1 Real Property Taxes. Lessee agrees to pay to Lessor in addition to the
rent and other charges herein its pro rata share of all Designated Real Property
Taxes in accordance with Paragraph 4.5. As used herein, "Real Property Taxes"
shall include any form of assessment, license, fee, rent, tax, levy, penalty or
tax imposed by any authority having the direct or indirect power to tax,
including any improvement district, as against any legal or equitable interest
of Lessor in the Property or as against Lessor's business of renting the
Property. As used herein, "Designated Real Property Taxes" shall mean all Real
Property Taxes except those Real Property Taxes which are shown on the tax xxxx
for the Property as applying to the improvements constituting Buildings A and B,
as shown on Exhibit B, and 86.82% of (a) the Real Property Taxes applying to the
land and (b) special assessments against the Property. Such percentage was
determined by comparing the square footage of all of the land within the
Property to the square footage of all such land not occupied by Buildings A and
B, plus 14,000 square feet of the Property attributed to Buildings A and B.
Lessee's share of Designated Real Property Taxes shall be equitably prorated to
cover only the period of time within the fiscal tax year during which this Lease
is in effect. With respect to any assessments which may be levied against or
upon the Premises, and which may be paid in annual installments, only the amount
of such annual installments (with appropriate proration for any partial year)
and interest due thereon shall be included within the computation of the annual
Designated Real Property Taxes. Lessor represents that, to the best of its
knowledge, there are no assessment or improvement districts being planned which
would affect the Property other than as in effect as of the date of this Lease.
If the Property becomes subdivided, the formulas above shall continue to apply
(unless Building E is split off into a separate parcel without any other
buildings) but Lessee's pro rata share and the percentage shown above shall be
adjusted to reflect the new square footage of the resulting parcels. If Building
E is split off from the Property into a separate parcel without any other
buildings, it shall be assessed by itself and Lessee shall be responsible for
all of the Real Property Taxes relating thereto.
5.2 Personal Property Taxes. Lessee shall pay before delinquency all taxes
levied or assessed on Lessee's fixtures, improvements, furnishings, merchandise,
equipment and personal property in and on the Premises, whether or not affixed
to the real property. If Lessee in good faith contests the validity of any such
personal property taxes, then Lessee shall at its sole expense defend itself and
Lessor against the same and shall pay and satisfy any adverse determination or
judgment that may be rendered thereon and shall furnish Lessor with a surety
bond satisfactory to Lessor in an amount equal to 150% of such contested taxes.
Lessee shall indemnify Lessor against liability for any such taxes and/or any
liens placed on the Premises or the Property in connection with such taxes.
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[If at any time after any tax or assessment has become due or payable Lessee or
its legal representative neglects to pay such tax or assessment, Lessor shall be
entitled, but not obligated, to pay the same at any time thereafter and such
amount so paid by Lessor shall be repaid by Lessee to Lessor with Lessee's next
rent installment together with interest at the highest rate allowable by law.
6.0 INSURANCE.
6.1 Property/Rental Insurance - Premises. During the Term, Lessor shall
keep the Property insured against loss or damage by fire and those risks
normally included in the term "all risk" including (a) flood coverage at the
election of Lessor, (b) earthquake coverage at the reasonable election of
Lessor, (c) coverage for loss of rents and (d) boiler and machinery coverage if
the Lessor deems necessary. Any deductibles shall be paid by Lessee if the
deductible arises from damage solely to the Premises. If the damage covers a
greater portion of the Property than the Premises, then Lessee shall pay that
portion of the deductible which the total floor area of the Premises bears to
the total floor area of the Property which is available for lease by Lessor and
which suffered damage. The amount of such insurance shall be not less than 100%
of the replacement value of the Premises. Any recovery received from said
insurance policy shall be paid to Lessor. Lessee, in addition to the rent and
other charges provided herein, agrees to pay to Lessor its pro rata share of the
premiums for all insurance for the Property, excluding that insurance applicable
to Buildings A and B as shown by the insurance company (or its broker) issuing
such insurance. The insurance premiums shall be paid in accordance with
Paragraph 4.5. Lessee shall pay to Lessor any deductibles owing within 15 days
after receipt of notice from Lessor of the amount owing.
6.2 Property Insurance - Fixtures And Inventory. During the Term, Lessee
shall, at its sole expense, maintain insurance with "all risk" coverage on any
fixtures, leasehold improvements, furnishings, merchandise, equipment or
personal property in or on the Premises, whether in place as of the date hereof
or installed hereafter, for the full replacement value thereof, and Lessee shall
also have sole responsibility and cost for maintaining any other types of
insurance relating to Lessee's use of the Premises. Any deductibles shall be
paid by Lessee.
6.3 Lessor's Liability Insurance. During the Term, Lessor shall maintain a
policy or policies of comprehensive general liability insurance insuring Lessor
(and such others as designated by Lessor) against liability for bodily injury,
death and property damage on or about the Property, with combined single limit
coverage of not less than $2,000,000.
6.4 Lessee's Liability Insurance. During the Term, Lessee shall, at its
sole expense, maintain for the mutual benefit of Lessor and Lessee,
comprehensive general liability and property damage insurance against claims for
bodily injury, death or property damage occurring in or about the Premises or
arising out of the use or occupancy of the Premises, with combined single limit
coverage of not less than $2,000,000.
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The limits of such insurance shall not limit the liability of Lessee. Lessee
shall furnish to Lessor prior to the Commencement Date, and at least 30 days
prior to the expiration date of any policy, certificates indicating that the
liability insurance required by Lessee above is in full force and effect, that
Lessor has been named as an additional insured; and that all such policies will
not be cancelled unless 30 days' prior written notice of the proposed
cancellation has been given to Lessor. The insurance shall be with insurers
reasonably approved by Lessor and with policies in form reasonably satisfactory
to Lessor. Said policies shall provide that Lessor, although an additional
insured, may recover for any loss suffered by Lessor by reason of Lessee's
negligence, and shall include a broadform liability endorsement.
6.5 Waiver Of Subrogation. Lessor hereby releases Lessee, and Lessee hereby
releases Lessor, and their respective officers, agents, employees and servants,
from any and all claims or demands of damages, loss, expense or injury to the
Premises, or to the furnishings and fixtures and equipment, or inventory or
other property of either Lessor or Lessee in, about or upon the Premises, which
is caused by or results from perils, events or happenings which are the subject
of insurance carried by the respective parties and in force at the time of any
such loss; provided, however, that such waiver shall be effective only to the
extent permitted by the insurance covering such loss and to the extent such
insurance is not prejudiced thereby. Each party shall cause each insurance
policy obtained by it to provide that the insurance company waives all right of
recovery by way of subrogation against either party in connection with any
damage covered by any policy.
6.6 Indemnification. Except to the extent of intentional misconduct by
Lessor or Lessor's negligence, Lessee will indemnify Lessor and save it harmless
from and against any and all claims, actions, damages, liability and expense in
connection with loss of life, personal injury and/or damage to property arising
from or out of any occurrence in, upon or at the Premises, or the occupancy or
use by Lessee of the Premises or any part thereof, or occasioned wholly or in
part by any acts or omissions of Lessee, its agents, contractors, employees,
servants, licensees or concessionaires or by anyone permitted to be on the
Premises by Lessee. In case Lessor shall be made a party to any such litigation
commenced by or against Lessee, then Lessee shall protect and hold Lessor
harmless from all claims, liabilities, costs and expenses, and shall pay all
costs, expenses and reasonable legal fees incurred by Lessor in connection with
such litigation.
6.7 Plate Glass Replacement. Lessee shall replace at its sole expense, any
and all plate glass and other glass in and about the Premises which is damaged
or broken by vandalism. If any plate glass or other glass in and about the
Premises is damaged or broken by causes other than vandalism, then Lessee shall
pay Lessor an amount equal to Lessor's cost of replacement, provided that such
amount shall not exceed the deductible then in effect on Lessor's insurance
policy, if any, covering the damaged glass. Nothing herein shall be construed to
require Lessor to carry plate glass insurance.
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6.8 Workers' Compensation Insurance. Lessee shall, at its sole expense,
maintain and keep in force during the Term a policy or policies of Workers'
Compensation Insurance and any other employee benefit insurance sufficient to
comply with all applicable laws, statutes, ordinances and governmental rules,
regulations or requirements.
7.0 MAINTENANCE.
7.1 Premises. Throughout the Term, Lessee agrees to keep and maintain all
improvements and appurtenances upon the Premises, including all sewer
connections, plumbing, heating and cooling appliances, wiring and glass, in good
order and repair including the replacement of such improvements and
appurtenances when necessary. Lessee hereby expressly waives the provisions of
any law permitting repairs by a tenant at the expense of a landlord, including,
without limitation, all rights of Lessee under Sections 1941 and 1942 of the
California Civil Code. Lessee agrees to keep the Premises clean and in sanitary
condition as required by the health, sanitary and police ordinances and
regulations of any political subdivision having jurisdiction. Lessee further
agrees to keep the interior of the Premises, such as the windows, floors, walls,
doors, showcases and fixtures clean and neat in appearance and to remove all
trash and debris which may be found in or around the Premises. If Lessor deems
any repairs and/or maintenance to be made by Lessee necessary and Lessee refuses
or neglects to commence such repairs and/or maintenance and complete the same
with reasonable dispatch upon demand, Lessor may enter the Premises and cause
such repairs and/or maintenance to be made and shall not be responsible to
Lessee for any loss or damage occasioned thereby except to the extent that
Lessee's personal property is damaged by the intentional misconduct or
negligence of Lessor or its contractors. Lessee agrees that upon demand, it
shall pay to Lessor the cost of any such repairs, together with accrued interest
from the date of payment at the highest rate allowable by law.
7.2 Building. Lessor shall maintain the foundation, roof and exterior walls
(the "Structural Components") of the Premises in reasonably good order and
repair, except that damage occasioned by the act of Lessee shall be repaired by
Lessor at Lessee's expense. Lessee shall have the obligation to notify Lessor,
in writing, of any repairs or maintenance to the Structural Components which may
be required, and Lessor shall have a reasonable time to make such repairs. The
manner and method of maintenance and repair of the Structural Components shall
be at the reasonable discretion of Lessor. Lessee, in addition to the rent and
other charges provided herein, agrees to pay to Lessor all of the costs of
maintaining the Structural Components as billed to Lessee by Lessor.
7.3 Common Areas. Lessor shall maintain the common areas of the Property
which shall include without limitation the landscaping, plazas and parking lots
in reasonably good order and condition, except that damage occasioned by the act
of Lessee shall be repaired by Lessor at Lessee's expense. Lessee shall have the
obligation to notify Lessor, in writing, of any repairs or maintenance to the
common areas which may be
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required, and Lessor shall have a reasonable time to make such repairs. The
manner and method of maintenance and repair of the common areas shall be at the
reasonable discretion of Lessor. Lessee, in addition to the rent and other
charges provided herein, agrees to pay to Lessor its pro rata share of the costs
of maintaining the common areas in accordance with Paragraph 4.5.
7.4 Alterations, Changes And Additions By Lessee. No changes, alterations,
or additions shall be made by Lessee to the Premises without the prior written
consent of Lessor which Lessor will not unreasonably withhold. Notwithstanding
the above, non-structural changes aggregating no more than $10,000 in any 12
month period may be made by Lessee without Lessor's consent. As used herein,
alterations include utility installations such as ducting, power panels,
fluorescent fixtures, base heaters, conduit and wiring. As a condition to giving
such consent, Lessor may require that Lessee agree to remove any such
alterations, additions or improvements at the expiration of the Term and to
restore the Premises to their prior condition. As a further condition to giving
such consent, Lessor may require Lessee to provide Lessor, at Lessee's sole cost
and expense, with a lien and completion bond in an amount equal to one and
one-half times the estimated cost of such improvements, to insure Lessor against
any liability for mechanics' and materialmen's liens and to insure completion of
the work. All changes, alterations or additions to be made to the Premises shall
be under the supervision of a competent architect or competent licensed
structural engineer and made in accordance with plans and specifications which
have been furnished to and approved by Lessor prior to commencement of work.
Lessor shall not unreasonably withhold its approval of such proposed
alterations. If the written consent of Lessor to any proposed alterations by
Lessee shall have been obtained, Lessee agrees to advise Lessor in writing of
the date upon which such alterations will commence in order to permit Lessor to
post a notice of nonresponsibility. All such alterations, changes and additions
shall be constructed in a good and workmanlike manner in accordance with all
ordinances and laws relating thereto. Any such changes, alterations or additions
to or on the Premises shall remain for the benefit of and become the property of
Lessor, unless Lessor requires the removal by giving Lessee written notice
within 30 days before the date Lessee is to vacate the Premises, in which case
Lessee shall remove such changes, alterations and additions and restore the
Premises to the condition they were in prior to such changes, alterations or
additions.
7.5 Plumbing. Lessee shall not use the plumbing facilities for any purpose
other than that for which they were constructed. The expense of any breakage,
stoppage or other damage relating to the plumbing and resulting from the
introduction by Lessee, its agents, employees or invitees of foreign substances
into the plumbing facilities shall be borne by Lessee.
7.6 Liens. Lessee shall keep the Premises free from any liens arising out
of work performed, materials furnished or obligations incurred by Lessee and
shall indemnify, hold harmless and defend Lessor from any liens and encumbrances
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arising out of any work performed or materials furnished by or at the direction
of Lessee. In the event that Lessee shall not, within 20 days following the
imposition of any such lien, cause such lien to be released of record by payment
or posting of a proper bond, Lessor shall have, in addition to all other
remedies provided herein and by law, the right, but not the obligation, to cause
the same to be released by such means as it shall deem proper, including payment
of the claim giving rise to such lien. All such sums paid by Lessor and all
expenses incurred by it in connection therewith including attorneys' fees and
costs shall be payable to Lessor by Lessee on demand with interest at the
highest rate allowable by law. Lessor shall have the right at all times to post
and keep posted on the Premises any notices permitted or required by law, or
which Lessor shall deem proper, for the protection of Lessor and the Premises,
and any other party having an interest therein, from mechanics' and
materialmen's liens, and Lessee shall give to Lessor at least 10 business days'
prior written notice of the expected date of commencement of any work relating
to alterations or additions to the Premises.
8.0 MANAGEMENT.
Lessee shall bear its share of the costs to Lessor of managing the
Property. Lessee understands that Wareham Property Group, or another affiliated
or unaffiliated third party will be responsible for the management of the
Property. For the period through April 30, 1998, Lessee shall pay to Lessor a
property management fee equal to five percent of the monthly rent. Thereafter,
the monthly property management fee payable by Lessee shall be equal to the
monthly property management fee owing by Lessee immediately prior to May 1,
1998, subject to adjustment as follows. Commencing May 1, 1998 and each
anniversary thereafter, the monthly property management fee shall be adjusted
upwards by increases in the CPI between the Adjustment Date and the same date
one year earlier. The monthly property management fee shall be payable with
monthly rent.
9.0 UTILITIES AND SERVICES.
9.1 Premises. Lessee shall pay prior to delinquency throughout the Term the
cost of water, gas, heating, cooling, sewer, telephone, electricity, garbage,
air conditioning and ventilating, janitorial services and all other materials
and utilities supplied to the Premises, provided that if payment is to be made
to Lessor, it shall be made by Lessee within 30 days of receipt of the statement
for such charges.
9.2 Common Areas. Lessor shall provide first-class landscaping, utilities,
janitorial and security services for the common areas of the Property. Lessee
shall bear its pro rata share of such common area costs to Lessor in providing
such services in accordance with Paragraph 4.5. Security services shall include
hiring of guards in the discretion of Lessor during hours determined by Lessor.
Notwithstanding the above, any extraordinary landscaping, utilities, janitorial
and/or security services incurred on the Property as a result of special events
held by the tenants of Buildings A and B shall not be included in such common
area costs.
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10.0 USE OF PREMISES.
10.1 Use. The Premises shall be used and occupied by Lessee for only the
purposes specified in Paragraph 1.6 and for no other purposes whatsoever without
obtaining the prior written consent of Lessor which shall not be unreasonably
withheld.
10.2 Suitability. This Lease shall be subject to all applicable zoning
ordinances and to any municipal, county and state laws and regulations governing
and regulating the use of the Premises. Lessee acknowledges that neither Lessor
nor Lessor's agent has made any representation or warranty as to the suitability
of the Premises for the conduct of Lessee's business.
10.3 Uses Prohibited.
a. Rate Of Insurance. Lessee shall not do or permit anything to be done in
or about the Premises which will cause the existing rate of insurance upon the
Premises (unless Lessee shall pay an increased premium as a result of such use
or acts) or cause the cancellation of any insurance policy covering said
Premises, nor shall Lessee sell or permit to be kept, used or sold in or about
such Premises any articles which may be prohibited by a standard form policy of
fire insurance.
b. Interfere With Other Tenants. Lessee shall not do or permit anything to
be done in or about the Premises which will in any way obstruct or unreasonably
interfere with the rights of other tenants or occupants of the Property or
injure or annoy them or use or allow the Premises to be used for any unlawful or
objectionable purpose, nor shall Lessee cause, maintain or permit any nuisance
in, or about the Premises. Lessee shall not commit or suffer to be committed any
waste in or upon the Premises.
c. Applicable Laws. Lessee shall not use the Premises or permit anything to
be done in or about the Premises which will in any way conflict with any law,
statute, zoning restriction, ordinance, governmental rule, regulation or
requirements of duly constituted public authorities whether now in force or
which may hereafter be enacted or promulgated. Lessee shall at its sole cost and
expense properly comply with all laws, statutes, ordinances and governmental
rules, regulations or requirements now in force or which may hereafter be in
force and with the requirements of any board of fire underwriters or other
similar body now or hereafter constituted relating to or affecting the
condition, use or occupancy of the Premises. The judgment of any court of
competent jurisdiction or the admission of Lessee in any action against Lessee,
whether Lessor be a party thereto or not, that Lessee has violated any law,
statute, ordinance or government rule, regulation or requirement, shall be
conclusive of that fact as between Lessor and Lessee.
d. Signs. Lessee shall not place any sign upon the Premises or conduct any
auction thereon without Lessor's prior written consent.
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10.4 Lessee's Warranty. Lessee warrants that its use of the Premises
presently complies and shall comply with applicable federal, state and local
laws and regulations pertaining to (i) the use, storage and disposal of
radiological materials and/or toxic chemicals, (ii) the disposal of hazardous
waste and (iii) the safety of persons on the Premises, including but not limited
to, the general industry safety orders as set forth in Title 8 of the California
Administrative Code. Lessee further warrants that it will not interfere with any
actions by Lessor made in furtherance of the above laws and regulations and it
shall comply with any reasonable procedures and/or regulations promulgated by
Lessor from time to time in connection with the matters covered by such laws and
regulations, provided that Lessor shall have no duty to establish any procedures
or regulations or to supervise in any way Lessee's activities on the Premises.
Lessee warrants that all governmental inspections of the Premises as required
under the laws referenced above have been made and will be made, and Lessee
shall deliver within 15 days of the date hereof to Lessor a copy of the reports
of each such inspection most recently conducted. Lessee shall provide a copy of
the reports for each such future inspection within 15 days of Lessee's receipt
of such report. Except in instances when a governmental report of such
inspection has been made within the last 12 month period, Lessee shall obtain at
its sole cost an inspection by a private engineering firm, resulting in a
written report specifying Lessee's compliance, or enumerating the reasons for
Lessee's lack of compliance, with such regulations. Lessee indemnifies and shall
hold Lessor harmless from a breach of the above warranty and from any claim
arising from Lessee's particular use of the Premises, including but not limited
to, (a) the disposal or use of hazardous waste, or (b) the disposal or escape of
odorous, carcinogenic and/or pathogenic exhaust from the Premises. Lessee shall
pay all of Lessor's costs and reasonable attorneys' fees arising from a breach
of Lessee's warranty set forth above, whether or not litigation is commenced,
including but not limited to, the costs of defending any claims made against
Lessor as a result of such breach. Lessor shall have the right to defend such
claims with attorneys of its own election and Lessee shall pay the cost thereof.
Nothing herein shall suggest that Lessee shall be responsible for the condition
of the Property prior to its first obtaining possession of the Premises.
11.0 DEFAULT PROVISIONS.
11.1 Insolvency. If, during the Term, Lessee shall be declared insolvent or
bankrupt, or if any assignment of Lessee's property shall be made for the
benefit of creditors or otherwise, or if Lessee's leasehold interest herein
shall be levied upon under execution or seized by virtue of any writ of any
court of law, or a trustee in bankruptcy or a receiver be appointed for the
property of Lessee, any such occurrence shall be a material default of this
Lease, and entitle Lessor at its election to terminate the Lease.
11.2 Non-Payment, Breach Or Vacating. If (a) Lessee shall fail to make
payment of any rent or any charge owing
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hereunder, or (b) any other covenant, condition, agreement or obligation of
Lessee hereunder is not timely performed and either the breach is not cured
within 15 days after written notice from Lessor or the cure of the breach is not
commenced within 15 days after written notice from Lessor and thereafter
diligently prosecuted towards completion, Lessee shall be in default and Lessor
shall be entitled to take the actions set forth in Paragraphs 11.4 and 11.5
below and Lessor may pursue any other remedy available by law.
11.3 Default Under Other Leases. Any default under either the Building C
Lease or the Xxxxx Xxxxxx Lease shall be deemed a default under this Lease,
entitling Lessor to take the actions set forth in Paragraphs 11.4 and 11.5 below
and Lessor may pursue any other remedy available by law.
11.4 Lessor's Right To Relet. Upon recovery of possession of the Premises,
whether with or without legal proceedings, by reason of Lessee's breach of this
Lease, Lessor may, at its option, at any time and from time to time, remove any
signs and property of Lessee therefrom and relet the Premises or any part
thereof at such rent and upon such terms and conditions as Lessor in its
discretion shall determine, and the term of such reletting may be for a term
extending beyond the Term. Such reletting shall neither void nor terminate this
Lease. For the purpose of such reletting, Lessor is authorized to make repairs
or alterations in or to the Premises at the sole expense of Lessee as may be
necessary or desirable for the purpose of such reletting. The costs and expenses
of such reletting, including repairs and alterations and any reasonable real
estate commissions associated with such reletting shall be paid by Lessee. If a
sum shall not be realized from such reletting to equal the monthly rent payable
hereunder plus all other monthly charges to be paid by Lessee hereunder, less
any amount of rental loss for the same period which Lessee proves could be
reasonably avoided by Lessor, Lessee will pay such deficiency each month to
Lessor. In no event shall Lessor be entitled to any excess rent received by
Lessor. No re-entry, taking of possession or reletting of the Premises by Lessor
shall be construed as an election to terminate this Lease unless written notice
of such intention is given to Lessee or unless terminated thereof is decreed by
a court of competent jurisdiction.
11.5 Right To Terminate. Notwithstanding any such reletting without
termination, Lessor may at any time during the Term elect to terminate the Lease
by reason of a previous breach. In the event that Lessor shall at any time
terminate this Lease by reason of breach thereof by Lessee, then Lessor, in
addition to any other remedy it may have, may recover from Lessee any damages
incurred by reason of such breach including, without limitation, the cost of
recovering the Premises, and the amount by which the rent then unpaid for the
balance of the Term exceeds the amount of such rental loss for the same period
which the Lessee proves could be reasonably avoided by Lessor. Lessee hereby
waives all statutory rights inconsistent with this Paragraph.
11.6 Default By Lessor. Lessor will be in default if Lessor fails to
perform any obligation required of Lessor
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(other than a delay in delivery of possession as provided for in Paragraph 3.2
above) within 30 days after written notice by Lessee, specifying wherein Lessor
has failed to perform such obligation; provided that if the nature of Lessor's
obligation is such that more than 30 days are required for performance, then
Lessor shall not be in default if Lessor commences performance within such 30
day period and thereafter diligently prosecutes the same to completion; and
provided further that if the performance of any obligation required by Lessor is
necessary to correct a condition that poses a threat to life or property, then
Lessor shall perform such obligation as soon as reasonably possible after
receiving written notice from Lessee, specifying that the condition is
threatening.
12.0 EXPIRATION OR TERMINATION.
12.1 Surrender Of Possession. Lessee agrees to deliver up and surrender to
Lessor possession of the Premises and all improvements thereon, subject to the
terms of Paragraph 7.4 above, in as good order and condition as when possession
was taken by Lessee, excepting only ordinary wear and tear. Upon termination of
this Lease, Lessor may reenter the Premises and remove all persons and property
therefrom. If Lessee shall fail to remove any effects which it is entitled to
remove from the Premises upon the termination of this Lease, for any cause
whatsoever, Lessor, at its option, may remove the same and store or dispose of
them, and Lessee agrees to pay to Lessor on demand any and all expenses incurred
in such removal and in making the Premises free from all dirt, litter, debris
and obstruction, including all storage and insurance charges. If the Premises
are not surrendered at the end of the Term, Lessee shall indemnify Lessor
against loss or liability resulting from delay by Lessee in so surrendering the
Premises, including, without limitation, any claims made by any succeeding
Lessee founded on such delay.
12.2 Holding Over. If Lessee, with Lessor's consent, remains in possession
of the Premises after expiration of the term and if Lessor and Lessee have not
executed an express written agreement as to such holding over, then such
occupancy shall be a tenancy from month to month at a monthly rental equivalent
to 110% of the monthly rental in effect immediately prior to such expiration,
such payments to be made as herein provided. In the event of such holding over
all of the terms of this Lease including the payment of all charges owing
hereunder other than rent shall remain in force and effect on said month to
month basis.
12.3 Voluntary Surrender. The voluntary or other surrender of this Lease by
Lessee, or a mutual cancellation thereof, shall not work a merger, but shall, at
the option of Lessor, terminate all or any existing subleases or subtenancies,
or operate as an assignment to Lessor of any or all such subleases or
subtenancies.
13.0 CONDEMNATION OF PREMISES.
13.1 Total Condemnation. If the entire Premises, whether by exercise of
governmental power or the sale or transfer by Lessor to any condemnor under
threat of
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condemnation or while proceedings for condemnation are pending, at any time
during the Term, shall be taken by condemnation such that there does not remain
a portion suitable for occupation, this Lease shall then terminate as of the
date transfer of possession is required. Upon such condemnation, all rent shall
be paid up to the date transfer of possession is required, and Lessee shall have
no claim against Lessor for the value of the unexpired term of this Lease.
13.2 Partial Condemnation. If any portion of the Premises is taken by
condemnation during the Term, whether by exercise of governmental power or the
sale or transfer by Lessor to any condemnor under threat of condemnation or
while proceedings for condemnation are pending, this Lease shall remain in full
force and effect; except that in the event a partial taking leaves the Premises
unfit for normal and proper conduct of the business of Lessee, then Lessee shall
have the right to terminate this Lease effective upon the date transfer of
possession is required. Moreover, Lessor shall have the right to terminate this
Lease effective on the date transfer of possession is required if more than 33%
of the total square footage of the Premises or the Property is taken by
condemnation. Lessee and Lessor may elect to exercise their respective rights to
terminate this Lease pursuant to this Paragraph by serving written notice to the
other within 30 days of their receipt of notice of condemnation. All rent shall
be paid up to the date of termination, and Lessee shall have no claim against
Lessor for the value of any unexpired term of this Lease. If this Lease shall
not be cancelled, the rent after such partial taking shall be that percentage of
the adjusted base rent specified herein, equal to the percentage which the
square footage of the untaken part of the Premises, immediately after the
taking, bears to the square footage of the entire Premises immediately before
the taking. Any sums owing hereunder which are calculated on the basis of
Lessee's pro rata share (as set forth in Paragraph 1.4) shall also be adjusted
to reflect the decreased square footage of the Premises due to the condemnation.
If Lessee's continued use of the Premises requires alterations and repairs by
reason of a partial taking, all such alterations and repairs shall be made by
Lessee at Lessee's expense.
13.3 Award To Lessee. In the event of any condemnation, whether total or
partial, Lessee shall have the right to claim and recover from the condemning
authority such compensation as may be separately awarded or recoverable by
Lessee for loss of business, fixtures or equipment belonging to Lessee
immediately prior to the condemnation. The balance of any condemnation award
shall belong to Lessor and Lessee shall have no further right to recover from
Lessor or the condemning authority for any additional claims arising out of such
taking.
14.0 ENTRY BY LESSOR.
Lessee shall permit Lessor and its agents to enter the Premises at all
reasonable times for any of the following purposes: to inspect the Premises; to
maintain the Structural Components of the Premises; to make such repairs to the
Premises as Lessor is obligated or may elect to make; to make repairs,
alterations or additions to any other portion of the
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Property; to show the Premises and post "To Lease" signs for the purposes of
reletting during the last 90 days of the Term; to show the Premises as part of a
prospective sale by Lessor or to post notices of nonresponsibility.
Notwithstanding the above, except in the case of emergencies, Lessor shall give
at least 24 hours prior written notice before entry to either the laboratories
or other non-office restricted areas. Lessor shall have such right of entry
without any rebate of rent to Lessee for any loss of occupancy or quiet
enjoyment of the Premises thereby occasioned.
15.0 INDEMNIFICATION.
Lessee agrees not to hold Lessor liable for any injury or damage, either
proximate or remote, occurring through or caused by any repairs or alterations
to the Premises, except to the extent such injury or damage arises from the
willful misconduct or negligence of Lessor. Lessee agrees that Lessor shall not
be liable for any injury or damage occasioned by defective electric wiring, or
the breaking, bursting, stoppage or leaking of any part of the plumbing, air
conditioning, heating, fire-control sprinkler systems or gas, sewer or steam
pipes, except to the extent such injury or damage arises from the willful
misconduct or negligence of Lessor. Lessee will save and hold harmless Lessor
from all loss, expense, damage or injury to persons or property arising from or
occurring by reason of its occupation or use of the Premises, except to the
extent such losses or injuries are proximately caused by any willful misconduct
or negligence of Lessor. Lessor shall not be liable for any damage to or loss of
property of Lessee or other persons located on the Premises, and Lessee shall
hold Lessor harmless from any claims arising out of damage to the same, except
to the extent such loss or damage is proximately caused by the willful
misconduct or negligence of Lessor.
16.0 ASSIGNMENT AND SUBLETTING.
Lessee shall not assign this Lease in whole or in part, or sublet the
Premises or any part thereof, or license the use of all or any portion of the
Premises or business conducted thereon, or encumber or hypothecate this Lease,
without first obtaining the written consent of Lessor, which consent will not be
unreasonably withheld. Lessee shall submit in writing to Lessor: (a) the name
and legal composition of the proposed sublessee; (b) the nature of the proposed
sublessee's business to be carried on in the Premises; (c) the terms and
provisions of the proposed sublease; and (d) such financial and other reasonable
information as Lessor may request concerning the proposed sublessee. Any
assignment, subletting, licensing, encumbering, or hypothecating of this Lease
without such prior written consent shall, at the option of Lessor, constitute
grounds for termination of this Lease. Lessor's consent to any assignment or
sublease shall not constitute a waiver of the necessity for such consent to any
subsequent assignment or sublease. This prohibition against assignment and
subletting shall be construed to include a prohibition against assignment or
subletting by operation of law. Notwithstanding any assignment or subletting
with Lessor's consent, Lessee shall remain fully liable on this Lease and shall
not be released from its obligations
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hereunder. In the event Lessor shall consent to a sublease or assignment under
this Paragraph, Lessee shall pay Lessor's reasonable attorneys' fees incurred in
connection with giving such consent. In addition, Lessee shall pay to Lessor
with its regularly scheduled rent payments 75% of all sums collected by Lessee
from a sublessee or assignee which are in excess of the rent and charges then
owing to Lessor pursuant to this Lease.
17.0 DAMAGE OR DESTRUCTION.
17.1 Right To Terminate On Destruction Of Premises. Lessor shall have the
right to terminate this Lease if, during the Term, the Premises are damaged to
an extent exceeding 33% of the then reconstruction cost of the Premises as a
whole. Lessor shall also have the right to terminate this Lease if any portion
of the Premises is damaged by an uninsured peril. In either case, Lessor may
elect to so terminate by written notice to Lessee delivered within 30 days of
the happening of such damage.
17.2 Repairs By Lessor. If Lessor shall not elect to terminate this Lease
pursuant to Paragraph 17.1, Lessor shall, immediately upon receipt of insurance
proceeds paid in connection with such casualty, but in no event later than 90
days after such damage has occurred, proceed to repair or rebuild the Premises,
on the same plan and design as existed immediately before such damage or
destruction occurred, subject to such delays as may be reasonably attributable
to governmental restrictions or failure to obtain materials or labor, or other
causes beyond the control of Lessor. Lessee shall be liable for the repair and
replacement of all fixtures, leasehold improvements, furnishings, merchandise,
equipment and personal property not covered by the property insurance described
in Paragraph 6.2.
17.3 Reduction Of Rent During Repairs. In the event Lessee is able to
continue to conduct its business during the making of repairs, the rent then
prevailing will be equitably reduced in the proportion that the unusable part of
the Premises bears to the whole thereof for the period that repairs are being
made. No rent shall be payable while the Premises are wholly unusable due to
casualty damage.
17.4 Arbitration. Any controversy or claim arising out of or relating to
this Paragraph shall be settled by arbitration in accordance with the rules of
the American Arbitration Association as then in effect, and judgment upon the
award rendered by the arbitration may be entered in any court having
jurisdiction. The expenses of arbitration shall be borne by the parties as
allocated by the arbitrators. The party desiring arbitration shall serve notice
upon the other party, together with designation of the first party's arbitrator.
17.5 Lessor's Overriding Right To Terminate. Notwithstanding anything to
the contrary herein, if the discounted present value of the rent due hereunder
for the balance of the Term, using as the discount rate the prime commercial
lending rate in effect at the Bank of America as of the date Lessor is to
commence repairs pursuant to Paragraph
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17.2 hereof, is less than the cost of repairing the damage to the Premises,
Lessor may at its option terminate this Lease upon 10 days' written notice.
18.0 MISCELLANEOUS PROVISIONS.
18.1 Waiver. No waiver of any breach of any of the covenants or conditions
of this Lease shall be construed to be a waiver of any other breach or to be a
consent to any further or succeeding breach of the same or other covenant or
condition. The subsequent acceptance of rent hereunder by Lessor shall not be
deemed to be a waiver of any preceding breach by Lessee of any term, covenant or
condition of this Lease, other than the failure of Lessee to pay the particular
rent so accepted, regardless of Lessor's knowledge of such preceding breach at
the time of acceptance of such rent.
18.2 Successors And Assigns. Except as otherwise provided herein, the
provisions hereof shall be binding upon and shall inure to the benefit of the
heirs, personal representatives, successors and assigns of the parties.
18.3 Notices. All notices, requests, demands and other communications
required or permitted to be given hereunder shall be in writing and either
personally delivered or sent by certified mail, return receipt requested,
postage prepaid, properly addressed to the other party at the address set forth
next to its signature below, or at such other address or addresses as may from
time to time be designated in like manner by one party to the other. Any such
notice shall be deemed given when personally delivered or on the date indicated
on the Post Office's certified mail receipt.
18.4 Partial Invalidity. If for any reason any provision of this Lease
shall be determined to be invalid or inoperative, the validity and effect of the
other provisions hereof shall not be affected thereby.
18.5 Number And Gender. All terms in this Lease shall be construed to mean
either the singular or the plural, masculine, feminine or neuter, as the
situation may demand.
18.6 Descriptive Headings. The headings used herein and in any of the
documents attached hereto as schedules, lists or exhibits are descriptive only
and for the convenience of identifying provisions, and are not determinative of
the meaning or effect of any such provisions.
18.7 Time Is Of The Essence. In all matters time is of the essence in the
performance of all obligations under this Lease.
18.8 Entire Agreement. This Lease and the documents attached hereto as
schedules, lists or exhibits, constitute the entire agreement and understanding
between the parties with respect to the subject matters herein and therein, and
supersede and replace any prior agreements and understandings, whether oral or
written, between and among them with respect to the lease of the Premises,
rental therefor, use thereof and all other such matters. The provisions of this
Lease may be
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waived, altered, amended or repealed in whole or in part only upon the written
consent of Lessor and Lessee.
18.9 Memorandum Of Lease. Lessor and Lessee mutually agree that they will
not file or record a copy of this Lease, but that in the event Lessor or Lessee
requests a recording, Lessor and Lessee shall execute and acknowledge a
memorandum of this Lease in a form approved by the parties setting forth in said
memorandum the description of the Premises, the date of the Lease, the
Commencement Date and the date of termination. Said memorandum of Lease may be
recorded in the Recorder's Office of the County in which the Premises are
located.
18.10 Applicable Law. This Lease Agreement shall be construed and
interpreted in accordance with the laws of the State of California.
18.11 Corporate Authority. Each individual executing this Lease on behalf
of a corporation represents and warrants that he is duly authorized to execute
and deliver this Lease on behalf of the corporation in accordance with a duly
adopted resolution of the Board of Directors of the corporation, and that this
Lease is binding upon said corporation in accordance with its terms.
18.12 Litigation Expense. If any party shall bring an action against any
other party hereto by reason of the breach of any covenant, warranty,
representation or condition hereof, or otherwise arising out of this Agreement
or any schedule list or exhibit hereto, whether for declaratory or other relief,
the prevailing party in such suit shall be entitled to such party's costs of
suit and attorneys' fees, which shall be payable whether or not such action is
prosecuted to judgment.
18.13 Subordination Of Leasehold. Lessee agrees that this Lease is and
shall be, at all times, subject and subordinate to the lien of any mortgage or
other encumbrances which Lessor may create against the Premises including all
renewals, replacements and extensions thereof; provided, however, that
regardless of any default under any such mortgage or encumbrance or any sale of
the Premises under such mortgage, so long as Lessee performs all covenants and
conditions of this Lease and continues to make all payments hereunder, this
Lease and Lessee's possession and rights hereunder shall not be disturbed by the
mortgagees or anyone claiming under or through such mortgages. Lessee agrees to
execute any and all instruments in writing which may be required by Lessor to
subordinate Lessee's rights to the lien of such mortgage.
18.14 Lessee's Certificate. Within 15 days following Lessor's request,
Lessee shall complete, execute and deliver to Lessor a Lessee's Certificate,
setting forth the information requested therein including, but not limited to
(a) certification that this Lease is unmodified and in full force and effect (or
if modified, stating the nature of such modification and certifying that this
Lease as so modified is in full force and effect) and the date to which the
rental and other charges are paid in advance, if any, (b) acknowledgement that
there are not, to Lessee's knowledge, any uncured defaults
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on the part of Lessor hereunder, or specifying such defaults if any are claimed
and (c) setting forth the date of commencement and expiration of the Term.
Failure of Lessee to deliver such Certificate within said 15 days shall be
deemed to be an acknowledgement that Lessor is not in default under the Lease,
and that the terms of the Lease have not been modified or supplemented in any
way. It is intended that such Certificate may be relied upon by any prospective
purchaser, lender or assignee of any lender of the Premises.
18.15 Attornment. Lessee shall, in the event of any sale of the Premises or
if proceedings are brought for the foreclosure of, or in the event of exercise
of the power of sale under, any mortgage, installment land contract or deed of
trust made by Lessor covering the Premises, attorn to the mortgagee or the
purchaser upon any such foreclosure or sale and recognize such mortgagee or
purchaser as Lessor under this Lease, provided that Lessee's possession and
rights hereunder shall not be disturbed by the mortgagee or purchaser.
18.16 Day. As used herein, the term "day" shall mean, unless otherwise
specifically stated, a calendar day.
18.17 Brokers. The only broker's fees in connection with this Lease shall
be payable by Lessor to Coldwell Banker. Each party hereby indemnifies and
agrees to hold the other harmless from any and all other broker fees.
IN WITNESS WHEREOF, the parties have executed this Lease on the day and
year first written above.
LESSOR: LESSEE:
SEVENTH STREET PROPERTIES II XOMA CORPORATION
0000 Xxx Xxxxxx, Xxxxx 000 _______________________________
Xxx Xxxxxx, XX 00000 _______________________________
(Address)
By /s/ Xxxxxxx X. Xxxxxxx By /s/ Xxxxxx X. Xxxxxxx
---------------------------- -----------------------------
(Signature) (Signature)
Xxxxxxx X. Xxxxxxx Xxxxxx X. Xxxxxxx/ CEO
---------------------------- --------------------------------
(Print Name & Title) (Print Name & Title)
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EXHIBIT A
DESCRIPTION OF PREMISES AND PROPERTY
(Drawing of Premises appears here)
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EXHIBIT B
WORK TO BE PERFORMED BEFORE OCCUPANCY OF PREMISES
Lessor shall deliver the Premises to Lessee in shell condition. As used
herein, "shell condition" shall mean that the Premises shall include all of the
following: exterior walls with windows and doors, roof structure and roofing,
concrete slab on the first floor and wood floors on the second floor, elevator
with equipment room, two stairs and exit enclosures, exterior painting, fire
sprinklers (one layer below roof structure and second layer below wood floor),
roof drainage, standard building utilities brought to the Premises but not
distributed, male and female toilets on the first and second floors,
landscaping, recessed and covered loading dock with drainage and roll-up door,
parking lot, storm sewers, sidewalks, electrical secondary cable and conduit,
site lighting, roof hatch and ladder, rock below slab, finished lobby area on
the first floor and finished core areas on the second floor. The parties
recognize that Lessor shall incur additional costs in constructing the shell of
the Premises due to Lessee's desire to utilize some of the Premises for
laboratory purposes; specifically, there will be substantially increased
interstitial space required in the Premises than is typical in a two story
office building. The increased costs of the construction and the working
drawings as a result of the interstitial space shall be the responsibility of
Lessee. The increased costs of the interstitial space shall be designated as
such by the contractor and/or architect, as the case may be, and Lessor shall
forward to Lessee a copy of such designations. Any dispute as to the computation
of the increased costs shall be settled by arbitration in the same manner as
Paragraph 17.4 of this Lease. All such increased costs to Lessor (the "Increased
Costs") shall be deducted from the Allowance paid to Lessee, as set forth below.
Lessee shall construct all tenant improvements to be placed on the Premises
in accordance with the working drawings approved in writing by Lessor. Lessee
shall be entitled to an allowance of $21.00 per square foot of leaseable space
(the "Allowance") for the construction of the tenant improvements and the
preparation of the working drawings therefor. If the cost of the tenant
improvements exceeds the Allowance, such excess shall be borne by Lessee, at its
own expense. The Allowance, less the Increased Costs, shall be paid to Lessee in
cash within 15 days of occupancy of the Premises by Lessee and approval of the
tenant improvements by Lessor.
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