BRITISH PACIFIC CENTRE
BRITISH PACIFIC PROPERTIES CORPORATION
A CALIFORNIA CORPORATION
BRITISH PACIFIC CENTRE OFFICE BUILDING LEASE
BETWEEN
BRITISH PACIFIC PROPERTIES CORPORATION,
A CALIFORNIA CORPORATION
(LANDLORD)
AND
MAXIM PHARMACEUTICALS,
A DELAWARE CORPORATION
BRITISH PACIFIC CENTRE OFFICE BUILDING LEASE
BASIC LEASE PROVISIONS
The following constitutes a summary of the Basic Lease Provisions set forth
in the British Pacific Centre Office Building Lease ("Lease") between the
parties and regarding the Premises specified below. The Basic Lease Provisions
are an integral part of this Lease and each reference in this Lease to any of
the Basic Lease Provisions shall be construed to incorporate all of the terms
provided under each such Basic Lease Provision. In the event of any conflict
between any Basic Lease Provisions and the balance of the Lease, the latter
shall control.
1. DATE: January 13, 1998 (for reference purposes only)
2. PARTIES:
LANDLORD: British Pacific Properties Corporation, a
California corporation
TENANT: Maxim Pharmaceuticals, a Delaware Corporation
3. PREMISES:
3.1. Building Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
3.2. Floor: Second Floor
3.3. Suite No.: 200
3.4. Rentable Square Footage: Approximately 12,407 rentable
square feet.
3.5. Parking Spaces: Forty-three (43) unreserved, covered,
and free for the term of the Lease.
4. TERM:
4.1. Term of Lease: One two (2) year initial term
with a one (1) year Option to
Renew
4.2. Commencement Date: February 15, 1998 and terminating
February 14, 2000
5. RENT:
5.1. Initial Monthly
Base Rent: $28,536.10 ($2.30 per rentable sq. ft.
per month)
5.2. Annual Increase
to Base Rent
MONTHLY MONTHLY BASE RENT PER
LEASE TERM BASE RENT SQ. FT. OF NET RENTABLE AREA
---------- --------- ----------------------------
02/15/98 - 02/14/99 $2.30 $28,536.10 (plus electricity)
02/15/99 - 02/14/00 $2.35 $29,756.45 (plus electricity)
5.3. Base Rent Paid Upon
Execution $28,536.10 for the period February 15,
1998 through March 15, 1998.
6. TENANT'S EXPENSE STOP BASE: To be determined based upon actual
expenses during the base year, which is
calendar year 1998, as adjusted to
achieve 95% occupancy. Increases in
Operating Expenses payable by Tenant
shall be limited to six percent (6%) of
their proportionate share of the
controllable expenses over the base
year. Controllable expenses are all
those expenses other than taxes.
7. TENANT'S OPERATING
EXPENSE PERCENTAGE: 12.8%
8. TENANT'S ALLOWANCE
FOR LEASEHOLD IMPROVEMENTS: $7.00 per usable square foot.
9. SECURITY DEPOSIT: $29,156.45
10. PERMITTED USE OF PREMISES: Tenant may use the Premises for general
office use and for no other purpose.
11. TENANT'S INITIAL LIABILITY
INSURANCE LIMITS: $3,000,000.00 per person for personal
injury or death;
$3,000,000.00 per occurrence for
personal injury or death; and
$1,000,000.00 per occurrence for
damage to property
12. BROKER(S):
12.1.Landlord's Broker: Colliers International
12.2.Tenant's Broker: ▇▇▇▇ ▇▇▇▇▇▇▇ & Company
13. GUARANTOR(S): None
14. NOTICE:
To LANDLORD:
BRITIISH PACIFIC PROPERTIES
c/o Kohler Kompany
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ #▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
To TENANT:
Maxim Pharmaceuticals
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
15. EXHIBITS AND ADDENDA: Exhibits A through F and Addenda 1 are
attached to this Lease and incorporated
herein by reference.
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BRITISH PACIFIC CENTRE OFFICE BUILDING LEASE
This Lease, made at San Diego, California, on the 13th day of January,
1998, between BRITISH PACIFIC PROPERTIES CORPORATION, a California corporation
("Landlord"), and Maxim Pharmaceuticals, a Delaware Corporation ("Tenant"):
W I T N E S S E T H:
1. PREMISES AND COMMON AREAS.
1.1. PREMISES. Landlord hereby leases to Tenant and Tenant
hereby leases from Landlord, for the term, at the rental, and upon all
of the terms, covenants and conditions set forth herein, those certain
premises ("Premises"), described in the Basic Lease Provisions and
depicted on the floor plan attached hereto as Exhibit "A," located at
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, including parking
facilities, landscaping and appurtenances ("Building"). The Premises,
the Building, the Common Areas (defined below) and the land upon which
the same are located, are included within the development commonly
described as British Pacific Centre ("Project"). Unless otherwise
provided herein, any statement of square footage set forth in this
Lease, or that may have been used in calculating rental, is an
approximation which Landlord and Tenant agree is reasonable, and the
rental based thereon is not subject to revision whether or not the
actual square footage is more or less.
1.2. COMMON AREAS. All areas of the Building and the real
property in the Project that are provided and designated by the
Landlord from time to time for the general, non-exclusive use of
Landlord, tenants of the Building and the Project and their respective
agents, employees, suppliers, shippers, customers and invitees,
including, without limiting the generality of the foregoing, entrances
and exits, hallways, stairwells, elevators, restrooms, sidewalks,
driveways, parking areas (subject to the right of Landlord or its
licensee to control access thereto, and to charge for its use),
landscaped areas, and other areas and improvements provided by
Landlord for the common use of Landlord and tenants and their
respective employees and invitees, shall be deemed "Common Areas."
The Premises shall include the non-exclusive right to use the Common
Areas in common with and subject to the right of other tenants in the
Building and the Project, and subject to the rules and regulations
established by Landlord.
1.3. COMMON AREAS RULES AND REGULATIONS. Tenant agrees to
abide by and conform to the Rules and Regulations attached hereto as
Exhibit "B" with respect to the Project and Common Areas, and to cause
its employees, suppliers, shippers, customers and invitees to so abide
and conform. Landlord or such other person(s) as Landlord may appoint
shall have exclusive control and management of the Common Areas and
shall have the right, from time to time, to modify, amend and enforce
said Rules and Regulations. Landlord shall not be responsible to
Tenant for the non-compliance with said Rules and Regulations by other
tenants of the Project, their agents, employees and invitees.
Landlord's rights pursuant to this Paragraph 1.3 shall be subject to
the condition that exercise of any of such rights shall not
unreasonably interfere with Tenant's use of the Premises.
1.4. CONDITION OF PREMISES.
1.4.1. Landlord shall deliver the Premises to
Tenant in a clean condition on the Lease Commencement Date
(unless Tenant is already in possession) and Landlord warrants to
Tenant that the plumbing, lighting, air conditioning, and heating
system in the Premises shall be in good operating condition. In
the event that it is determined that this warranty has been
violated, then it shall be the obligation of Landlord, after
receipt of written notice from Tenant setting forth with
specificity the nature of the violation, to promptly, at
Landlord's sole cost, rectify such violation. Tenant's failure
to give such written notice to Landlord within thirty (30) days
after the Lease Commencement Date or the date that Tenant takes
possession of the Premises, whichever is earlier, shall result in
the conclusive presumption that Landlord has complied with all of
its obligations hereunder, that the Premises are fully completed
and are suitable for Tenant's purposes, that the Building and
every part of it, including the Premises, are in good and
satisfactory condition, and that Tenant waives any defects
therein. Notwithstanding any of the foregoing, should a
non-compliance with this warranty be of a latent nature, such
thirty (30) day time limitation shall not apply, and Landlord
shall rectify such non-compliance, at Landlord's sole cost and
expense, promptly after receipt of written notice thereof.
1.4.2. Landlord warrants to Tenant that the
Premises, in the state existing on the date that the Lease Term
commences, but without regard to alterations or improvements made
by Tenant or to the use for which Tenant will occupy the
Premises, does not violate any covenants or restrictions of
record, or any applicable law or ordinance in effect on the Lease
Commencement Date, that would substantially and adversely affect
the operation and profitability of Tenant's business conducted
from the Premises. In the event that it is determined that this
warranty has been violated, then it shall be the obligation of
Landlord, after receipt of written notice from Tenant setting
forth with specificity the nature of the violation, to promptly,
at Landlord's sole cost, rectify such violation.
1.4.3. Except as otherwise provided in this
Lease, Tenant hereby accepts the Premises and the Building
Project in their condition existing as of the Lease Commencement
Date or the date that Tenant takes possession of the Premises,
whichever is earlier, subject to all applicable zoning,
municipal, county and state laws, ordinances and regulations
governing and regulating the use of the Premises, and any
easements, covenants or restrictions of record, and accepts this
Lease subject thereto and to all matters disclosed thereby and by
any exhibits attached hereto. Tenant acknowledges that it has
satisfied itself by its own independent investigation that the
Premises are suitable for its intended use, and that neither
Landlord nor Landlord's agent or agents has made any
representation or warranty as to the present or future
suitability of the Premises, Common Areas, or Building Project
for the conduct of Tenant's business.
1
1.4.4. Notwithstanding anything in this Lease
to the contrary, Landlord warrants to Tenant that on the
commencement of the term hereof, the Premises and any
improvements to be constructed by Lessor (a) shall be free from
material structural defects, (b) shall comply with all applicable
covenants and restrictions of record, statutes, ordinances,
codes, rules, regulations, orders, and requirements, including
Title 24 of the California Administrative Code and the Americans
with Disabilities Act, and (c) are free from contamination by any
toxic or hazardous materials (hereafter "Hazardous Materials")
which now or hereafter become regulated by any federal, state, or
local government, or agency thereof (for purposes of this
subclause, the Premises shall be deemed to include the underlying
soil and ground water). In the event of a breach of the
foregoing warranties, Landlord shall promptly rectify such breach
at its sole cost and expense. Landlord also shall protect,
indemnify, defend, and hold Tenant harmless from and against any
and all liability, loss, suits, claims, actions, costs, and
expense (including, without limitation, attorneys' fees) arising
from (a) any breach of the foregoing warranties and (b) any
contamination of the Premises (including the underlying land and
ground water) by any Hazardous Materials, where such
contamination was not caused by Tenant. The provisions of this
paragraph shall survive the termination of this Lease.
2. CHANGES TO COMMON AREAS. Landlord shall
have the right, in Landlord's sole discretion, from time to time to:
(a) make changes to the Building interior and exterior and Common Areas,
including, without limitation, changes in the location, size, shape,
number, and appearance thereof, including but not limited to the lobbies,
windows, stairways, air shafts, elevators, escalators, restrooms,
driveways, entrances, parking spaces, parking areas, loading and unloading
areas, ingress, egress, direction of traffic, decorative walls, landscaped
areas and walkways; provided, however, Landlord shall at all times provide
the parking facilities required by applicable law; (b) close temporarily
any of the Common Areas for maintenance purposes so long as reasonable
access to the Premises remains available; (c) designate other land and
improvements outside the boundaries of the Project to be a part of the
Common Areas, provided that such other land and improvements have a
reasonable and functional relationship to the Project; (d) add additional
buildings and improvements to the Common Areas; (e) use the Common Areas
while engaged in making additional improvements, repairs or alterations to
the Project, or any portion thereof; and (f) do and perform such other acts
and make such other changes in, to or with respect to the Common Areas and
Project as Landlord may, in the exercise of sound business judgment deem to
be appropriate, and no such changes shall entitle Tenant to any abatement
of rent. LANDLORD'S RIGHTS PURSUANT TO THIS PARAGRAPH 1.5 SHALL BE SUBJECT
TO THE CONDITION THAT EXERCISE OF ANY SUCH RIGHTS SHALL NOT UNREASONABLY
INTERFERE WITH TENANT'S USE OF THE PREMISES OR REDUCE THE NUMBER OF
TENANT'S PARKING SPACES.
2.1. LENGTH OF TERM. The term of this Lease ("Term") shall
be for the Term specified in the Basic Lease Provisions, plus any
partial month following the commencement of the Term ("Commencement
Date") if such date is other than the first day of a calendar month.
2.2. COMMENCEMENT DATE. The Commencement Date shall be the
earliest of (a) the date on which Tenant takes possession of or
commences business operations upon the Premises or any part thereof
("Lease Commencement Date"); or (b) the date on which Landlord's Work
(as described in Section 14 below) is substantially completed as
determined by Landlord ("Rental Commencement Date").
2.2.1. Notwithstanding the Scheduled
Commencement Date set forth in the Basic Lease Provisions, if for
any reason Landlord cannot deliver possession of the Premises to
Tenant on said date, Landlord shall not be subject to any
liability therefor, nor shall such failure affect the validity of
this Lease or the obligations of Tenant hereunder or extend the
term hereof; but in such case, Tenant shall not be obligated to
pay rent or perform any other obligations of Tenant under the
terms of this Lease, except as may be otherwise provided in this
Lease, until possession of the Premises is delivered to Tenant.
If, however, Landlord shall not have delivered possession of the
Premises within ninety (90) days following said Scheduled
Commencement Date for any reason, other than Tenant's Delays as
defined in the Work Letter attached hereto as Exhibit "D," Tenant
may, at Tenant's option, by notice in writing to Landlord within
ten (10) days thereafter, advise Landlord of Tenant's intent to
cancel this Lease. Within ten (10) days after its receipt of
such notice, Landlord shall submit to Tenant a statement of all
costs and expenses incurred or irrevocably committed by Landlord
for non-standard improvements to the Premises up to the date of
Landlord's receipt of Tenant's notice of intent to cancel. This
Lease shall thereafter be canceled, and the parties shall be
discharged from all obligations hereunder, if and only if Tenant
reimburses Landlord for all such costs and expenses as stated in
Landlord's notice within ten (10) days after Tenant's receipt
thereof, and Landlord shall thereupon return any money previously
deposited by Tenant. If such written notice of intent to cancel
by Tenant is not timely received by Landlord, or Tenant's
reimbursement for such costs and expenses is not timely received
by Landlord, as aforesaid, then in either such event Tenant's
right to cancel this Lease hereunder shall terminate and be of no
further force or effect.
2.2.2. Possession of the premises shall be
deemed delivered to Tenant when (1) the improvements to be
provided by Landlord under this Lease are substantially
completed, (2) the Building Utilities are ready for use in the
Premises, and (3) Tenant has reasonable access to the Premises.
2.2.3. If Tenant occupies the Premises prior to
said Commencement Date, such occupancy shall be subject to all
provisions of this Lease, such occupancy shall not change the
termination date, and Tenant shall pay rent for such occupancy.
3. RENT.
3.1. BASE RENT. Subject to adjustment as provided in this
Lease, Tenant shall pay to Landlord for each full calendar month
during the Term the Monthly Base Rent specified in the Basic Lease
Provisions and other charges under this Lease. The Monthly Base Rent
shall be payable in advance on the first day of each calendar month
without any deduction or offset. The Monthly Base Rent for any
fractional part of a calendar month at the beginning or end of the
term shall be prorated based upon a 30-day month and 360-day year.
Payment of Base Rent shall be made to Landlord at its address stated
herein or to such other persons or at such other addresses as Landlord
may from time to time designate in writing to Tenant.
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3.2. ANNUAL INCREASE TO BASE RENT.
3.2.4. PERCENTAGE ADJUSTMENT. If Item 5(b) of
the Basic Lease Provisions is initialed, the Monthly Base Rent
shall be adjusted on each annual anniversary of the Commencement
Date by the percentage increase as set forth in Item 5(b) of the
Basic Lease Provisions.
3.3. ADDITIONAL RENT.
3.3.1. In addition to the Monthly Base Rent and
other sums to be paid by Tenant to Landlord, Tenant shall pay to
Landlord as additional rent the amount by which Tenant's share of
Operating Expenses (defined below) for any lease year or part
thereof during the term exceeds Tenant's Expense Stop Base, as
set forth in the Basic Lease Provisions. Tenant's share of
Operating Expenses shall be an amount equal to the product of the
Operating Expenses multiplied by Tenant's Operating Expense
Percentage specified in the Basic Lease Provisions. For partial
lease years during the term, the annual Operating Expenses and
Tenant's Expense Stop Base shall be prorated on a daily basis
using a 30-day month and 360-day year to determine the amount of
additional rent due to Landlord.
3.3.2. Landlord shall be entitled to make an
estimate of Operating Expenses projected for each lease year.
Landlord shall be entitled to revise such estimate at any time
and from time to time during the lease year to increase or
decrease the estimate of Operating Expenses. If Landlord
notifies Tenant that Landlord's estimate (or any revised
estimate) of Operating Expenses would result in an obligation of
Tenant to pay additional rent, then upon request by Landlord,
Tenant shall pay one-twelfth (1/12) of such estimated additional
rent on the first day of each month in advance together with the
Monthly Base Rent. If Landlord shall so notify Tenant after the
commencement of a lease year, then with the next payment of rent
due, Tenant shall also pay to Landlord one-twelfth (1/12) of such
estimated additional rent for each month of such lease year which
has already elapsed.
3.3.3. Landlord shall provide Tenant with an
annual statement showing Tenant's share of the annual Operating
Expenses over Tenant's Expense Stop Base, if any, for the prior
lease year, together with any proration. Landlord shall use all
reasonable efforts to deliver the annual statement within one
hundred twenty (120) days after the end of the lease year;
provided, however, that failure of Landlord to deliver the annual
statement within such period shall not impair or constitute a
waiver of Tenant's obligations to pay additional rent or cause
Landlord to incur any obligation for damages. If the amount of
the additional rent due for the lease year exceeds any amount
paid by Tenant as estimated additional rent for such lease year,
then Tenant shall pay such excess to Landlord within ten (10)
days of receipt of Landlord's statement. If the amounts paid as
estimated additional rent for a lease year exceed the amount of
Tenant's obligation shown on the annual statement, then Tenant
shall be entitled to a credit against monthly installments of
estimated additional rent due for the then current year. If no
further sums of additional rent are or will become due against
which the excess can be credited, then, subject to offset at
Landlord's election against other sums owed by Tenant, Landlord
shall pay such excess to Tenant within ten (10) days after
delivery of the annual statement. All obligations to pay
additional rent and/or the obligation of Landlord to credit or
reimburse Tenant for any excess payment of estimated additional
rent shall survive expiration of the term or earlier termination
of this Lease.
3.3.4. Tenant shall have a period of thirty
(30) days after delivery of the annual statement of Operating
Expenses to question or challenge the amount shown thereon by
giving written notice to Landlord specifying the items which are
challenged. Tenant waives and relinquishes the right to
challenge or object to the amounts shown at any time after
expiration of such thirty (30) day period. If Tenant timely
challenges any item shown on the annual statement, Tenant shall
then have a period of sixty (60) days in which to inspect, during
business hours upon reasonable written notice to Landlord at
Landlord's office, Landlord's records relating to the challenged
item or items. Tenant shall give written notice to Landlord
prior to expiration of such sixty (60) days of whether Tenant
continues to challenge any of the items originally objected to,
in which case a certification as to proper amount shall be made
by Landlord's independent certified public accountant, which
certification shall be final and conclusive. The cost of such
review shall be paid by Tenant, unless such review reveals an
error resulting in an overcharge to Tenant of five percent (5%)
or more, in which case the cost of such review shall be paid by
Landlord. If Tenant fails to review the records or fails to give
timely written notice to Landlord that it continues to object,
then Tenant shall be deemed to have waived its objection and
shall have no further right to challenge or object thereto.
Notwithstanding any objection or challenge of Tenant, Tenant
shall pay the amount claimed by Landlord to be due as and when
provided for herein, pending the resolution of Tenant's
objection.
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3.3.5. "Operating Expenses" of the Building
mean any and all costs and expenses of ownership, operation,
management, maintenance and repair of the Building, including the
parking facilities and Common Areas. Operating Expenses include,
but are not limited to, each of the following costs and expenses:
3.3.5.1. All costs and expenses of
utilities furnished to the Building and not separately
metered to individual tenants, including, without
limitation, all costs and expenses attributable to
supply of electrical service, water and sewage service,
natural gas, cable television or other electronic or
microwave signal reception, telephone service or other
communication, steam, heat, cooling, or any other
service which is now or in the future a utility
furnished to the Building.
3.3.5.2. All real property taxes, which
shall include (a) any form of tax or assessment,
license fee, license tax, tax or excise on rent or any
other levy, charge, expense or imposition made or
required by any federal, state, county, city, district
or other political subdivision on any interest of
Landlord and/or Tenant in the Premises or the Building,
including without limitation, the underlying real
property and appurtenances; (b) any fee for services
charged by any governmental agency or
quasi-governmental agency for any services such as fire
protection, street, sidewalk and road maintenance,
refuse collection, school systems, or other services
provided to property owners and residents within the
general area of the Building; (c) any governmental
impositions allocable to or measured by the area of the
Premises or the amount of any rent payable under this
Lease, including, without limitation, any tax on gross
receipts or any excise tax or other charges levied by
any federal, state, county, city, district or other
governmental agency or political subdivision with
respect to rent or upon or with respect to the
possession, leasing, operation, maintenance,
alteration, repair, use or occupancy of the Premises or
any portion thereof; (d) any impositions by any
governmental agency on this Lease transaction or with
respect to any document to which Tenant is a party
creating or transferring an interest or an estate in
the Premises; and (e) any increase in any of the
foregoing based upon construction of improvements at
the Building or changes in ownership (as defined in the
California Revenue and Taxation Code) of the Building.
Real property taxes shall not include taxes on the
Landlord's net income, state franchise taxes or any
inheritance, estate or gift taxes.
3.3.5.3. Operating costs and common
facilities costs, which shall include all costs of
managing, operating, maintaining and repairing the
Building, including all Common Areas and facilities of
the Building. Such costs shall include, without
limitation, all expenses for insurance obtained by
Landlord (including, without limitation, public
liability, contractual liability, property damage, fire
and extended coverage, sprinkler damage, theft,
malicious mischief and vandalism, flood, rental
interruption, boiler and machinery, earthquake, all
risk coverage, and other coverages in such amounts as
Landlord determines appropriate to carry in connection
with ownership and operation of a first class building
in San Diego County, California, or such other
insurance as may be required by any present or future
lender of loans secured by the Building), labor and
supplies, license, permit and inspection fees, all
assessments and special assessments due to deed
restrictions, declarations and/or owners associations
which accrue against the Building, the cost of
compensation (including employment taxes, similar
governmental charges, and fringe benefits) with respect
to all persons who perform duties in connection with
landscaping, janitorial, painting, window washing and
general cleaning services, security services and any
other services related to the operation, maintenance or
repair of the Building (as well as the cost of all
supplies, materials, tools and equipment used in
conjunction therewith), costs of clean-up and removal
of "Hazardous Materials," "Environmental Conditions"
and "Environmental Noncompliance" (in each case as
defined in Section 12 hereof) at the Building, the fair
market rental value of the Building management office,
management fees (at an attributed fair market rate if
Landlord itself provides such management services),
legal expenses, accounting expenses, and consultant's
fees.
3.3.5.4. If the Building is not at
least 95% occupied during all or a portion of any lease
year, then Landlord shall make an appropriate
adjustment of the Operating Expenses for such lease
year to determine what the Operating Expenses would
have been for such year if the Building had been 95%
occupied, and the amount so determined shall be deemed
to be the amount of the Operating Expenses for such
year.
3.3.5.5. All costs and expenses for
replacements of equipment or improvements that have a
useful life of five (5) years or less, amortized on a
straight line basis over such useful life.
3.3.5.6. All costs and expenses for
operation, management, maintenance and repair of the
parking facilities.
3.3.5.7. Any other service to be
provided by Landlord that is elsewhere in this Lease
stated to be an "Operating Expense."
3.3.6. Operating Expenses shall not include the
following costs and expenses:
3.3.6.1. Depreciation of the
Building.
3.3.6.2. Payments of principal and
interest on any loans secured by the Building,
commissions paid for leasing, construction permits and
fees, or costs of alteration of the Building; provided,
however, that Operating Expenses shall include the
costs of any capital improvements made to the Building
for the purpose of reducing Operating Expenses or
pursuant to the requirements of any governmental
entity, such costs to be amortized over a reasonable
period as Landlord shall determine.
3.3.6.3. Any expenses paid by Tenant
directly to third parties, or as to which Landlord is
otherwise reimbursed by any third party, any other
tenant or insurance proceeds.
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3.3.7. Additional Rent: Notwithstanding
anything in the Lease to the contrary, the following shall not be
included within Operating Expenses: (a) leasing commission,
attorneys' fees, costs, disbursements, and other expenses
incurred in connection with negotiations or disputes with
tenants, or in connection with leasing, renovating, or improving
space for tenants or other occupants or prospective tenants or
other occupants of the Building or Project; (b) the cost of any
service sold to any tenant (including Tenant) or other occupant
for which Landlord is entitled to be reimbursed as an additional
charge or rental over and above the basic rent and escalations
payable under the lease with that tenant; (c) any depreciation
on the Building or Project; (d) costs of a capital nature,
including but not limited to capital improvements and
alterations, capital repairs, capital equipment, and capital
tools as determined in accordance with generally accepted
accounting principals; (e) expenses in connection with services
or other benefits of a type that are not provided to Tenant but
which are provided another tenant or occupancy of the Building or
Project; (f) costs incurred due to Landlord's violation of any
terms or conditions of this Lease or any other lease relating to
the Building or Project; (g) Overhead profit increments paid to
Landlord's subsidiaries or affiliates for management or other
services on or to the Building or Project or for supplies or
other materials to the extent that the cost of the services,
supplies, or materials exceeds the cost that would have been paid
had the services, supplies, or materials been provided by
unaffiliated parties on a competitive basis; (h) all interest,
loan fees, and other carrying costs related to any mortgage or
deed of trust or related to any capital item, and all rental and
other payable due under any ground or underlying lease, or any
lease for any equipment ordinarily considered to be of a capital
nature (except janitorial equipment which is not affixed to the
Building); (i) any compensation paid to clerks, attendants, or
other persons in commercial concessions operated by Landlord;
(j) advertising and promotional expenditures; (k) costs of
repairs and other work occasioned by fire, windstorm, or other
casualty of an insurable nature; (l) any costs, fines, or
penalties incurred due to violations by Landlord of any
governmental rule or authority, this Lease or any other lease in
the Project, or due to Landlord's negligence or willful
misconduct; (m) management fees to the extent they exceed
management costs charged for similar facilities in the area and
in any event, to the extent they exceed five percent (5%) of all
other Operating Expenses; (n) costs for sculpture, paints, or
other objects of art (nor insurance thereon or extraordinary
security in connection therewith); (o) wages, salaries, or
other compensation paid to any executive employees above the
grade of building manager; (p) The cost of correcting any
building code or other violations which were violations prior to
the Commencement Date; (q) The cost of containing, removing, or
otherwise remediating any contamination (including the underlying
land and ground water) by any toxic or hazardous materials
(including, without limitation, asbestos and "PCB's") where such
contamination was not caused by Tenant; (r) Any other expense
that under generally accepted accounting principles and practice
consistently applied would not be considered a normal maintenance
or operating expense.
3.4. TENANT'S CHARGES. Charges for any services, goods or
materials furnished by Landlord at Tenant's request, and charges for
services, goods and materials furnished by Landlord as a result of
extraordinary uses or demands by Tenant in excess of those typical of
other tenants in the Building with general office usage, shall not be
included in Operating Expenses but shall be payable by Tenant as
additional rent within ten (10) days after Landlord delivers a
statement for such services, goods or materials to Tenant.
3.5. LATE CHARGES. Tenant hereby acknowledges that late
payment by Tenant to Landlord of the Monthly Base Rent, Tenant's share
of Operating Expenses or other sums due hereunder will cause Landlord
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, administrative, processing and accounting
charges, and late charges which may be imposed on Landlord by the
terms of any mortgage or trust deed covering the Project. Accordingly,
if any installment of the Monthly Base Rent, Operating Expenses, or
any other sum due from Tenant shall not be received by Landlord or
Landlord's designee within ten (10) days after such amount shall be
due, then, without any requirement for notice to Tenant, Tenant shall
pay to Landlord a late charge equal to 10% of such overdue amount. The
parties hereby agree that such late charge represents a fair and
reasonable estimate of the costs Landlord will incur by reason of late
payment by Tenant. Acceptance of such late charge by Landlord shall
in no event constitute a waiver of Tenant's default with respect to
such overdue amount, nor prevent Landlord from exercising any of the
other rights and remedies granted hereunder. Notwithstanding anything
to the contrary in the Lease, Landlord will grant one (1) grace period
for late rent, provided, after notice from Landlord, Tenant remits the
late rental payment within three (3) days of said notice.
3.6. INTEREST ON PAST DUE OBLIGATIONS. Any amount due from
Tenant to Landlord hereunder which is not paid when due shall bear
interest at the maximum rate then allowable by law or judgment from
the date of notice of delinquency from Landlord. The payment of
interest on such amounts shall not excuse or cure any default by
Tenant under this Lease; provided, however, that interest shall not be
payable on late charges to be paid by Tenant under this Lease.
3.7. SECURITY DEPOSIT. Tenant shall pay to Landlord,
immediately upon execution of this Lease, the sum specified in the
Basic Lease Provisions as security for the full and faithful
performance of every provision of this Lease to be performed by
Tenant. If Tenant defaults with respect to any provisions of this
Lease, including, but not limited to, the provisions relating to the
payment of rent, Landlord may (but shall not be required to) use,
apply or retain all or any part of this security deposit for the
payment of any rent or any other sum 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 other
loss or damage which Landlord may suffer by reason of Tenant's
default. If any portion of said deposit is so used or applied, Tenant
shall, within five (5) days after written demand therefor, deposit
cash with Landlord in an amount sufficient to restore the security
deposit to its original amount and Tenant's failure to do so shall be
a material breach of this Lease. At Landlord's election, if the
monthly Base Rent shall from time to time increase during the term of
this Lease, Tenant shall, within ten (10) days after request by
Landlord, deposit with Landlord additional money as a security deposit
so that the total amount of the security deposit held by Landlord
shall bear the same proportion to the then current Base Rent as the
initial security deposit bears to the initial Base Rent as set forth
in the Basic Lease Provisions. Landlord shall not be required to
keep this security deposit separate from its general funds, and Tenant
shall not be entitled to interest on such deposit. No trust
relationship is created hereby with respect to such security deposit.
If Tenant shall fully and faithfully perform every provision of this
Lease to be performed by it, the security deposit or any balance
thereof shall be returned to the Tenant (or at the Landlord's option,
to the last assignee of Tenant's interests hereunder) at the
expiration of the Term, provided that Landlord may retain the security
deposit until such time as any amount due from the Tenant in
accordance hereof has been determined and paid in full.
5
4. USE.
4.1. PERMITTED USES. Tenant shall use and occupy the
Premises during the Term of this Lease solely for and in accordance
with the use specified in the Basic Lease Provisions and for no other
use or uses without the prior written consent of Landlord, which
consent can be granted or withheld in Landlord's absolute discretion.
Tenant shall not use or permit the use of the Premises in a manner
that creates waste or a nuisance, or that disturbs owners and/or
occupants of, or causes damage to, neighboring premises or properties.
4.2. PROHIBITED USES. Notwithstanding any other provision
of this Lease, Tenant shall not use the Premises or any part thereof
for the purpose of operating an executive, administrative or legal
business center providing office space, administrative and support
services to sublessees or other users occupying the Premises for
general office purposes.
4.3. CHANGES IN USE. No change in the restrictions on use
of the Premises set forth in this Lease shall be permitted without the
prior written consent of Landlord, which consent may be granted or
withheld in the sole and absolute discretion of Landlord.
4.4. COMPLIANCE WITH LAWS. Tenant shall comply with all
laws, ordinances, rules and regulations pertaining to the use of the
Premises or the Building. Tenant shall maintain the Premises in a
clean, safe, sanitary and proper manner and shall pay for any damage
to the Premises or to any other part of the Building caused by any
negligence, willful act, misuse or abuse by Tenant or any of its
agents, employees, licensees or invitees. Tenant shall conduct its
business and occupy the Premises, shall not create any nuisance,
interfere with, annoy or disturb any other tenant in the Building or
Landlord in its management thereof, and shall not injure the
reputation of the Building. Tenant agrees to abide by all reasonable
rules and regulations established by Landlord from time to time with
respect to the Building. A copy of the rules and regulations in
existence on the date of this Lease is attached hereto as Exhibit "B,"
but Landlord reserves the right to amend the rules and regulations at
any time by giving notice of amendment to Tenant, if Landlord
determines such amendments to be to the best interests of the Building
and its tenants. Notwithstanding anything to the contrary contained
in this Lease, throughout the term hereof, Tenant shall not be
responsible for compliance with any laws, codes, or ordinances where
such compliance is not related specifically to Tenant's particular use
and occupancy of the Premises. For example, if any governmental
authority should require buildings to be structurally strengthened
against earthquake, such compliance shall be performed by and at the
sole cost of Landlord. Additionally, Landlord's rights pursuant to
this Section 4.4 shall be subject to the condition that exercise of
any of such rights shall not unreasonably interfere with Tenant's use
of the Premises.
4.5. INSURANCE USE REQUIREMENTS. Tenant shall neither use
nor occupy the Premises in any manner, nor commit or omit any act,
resulting in a cancellation or reduction of any insurance or increase
in premiums on any insurance policy covering the Premises, or the
property or Building. Tenant shall, at its expense, comply with all
requirements of any insurer pertaining to the use of the Premises and
reasonably necessary for maintenance of economic and proper fire,
liability and other insurance desired to be carried by Landlord.
Tenant shall promptly, upon demand, reimburse Landlord for any
additional premium charged for any insurance policy by reason of
Tenant's failure to comply with the provisions of this Section.
5. MAINTENANCE, REPAIR AND ALTERATION OF
PREMISES.
5.1. MAINTENANCE AND REPAIR. Landlord shall repair and
maintain the structural and mechanical portions of the Building,
including basic plumbing, heating, ventilating, air conditioning and
electrical systems installed or furnished by Landlord, and Landlord
shall keep all Common Areas in good, clean and sanitary order, and the
costs thereof shall be includable as Operating Expenses; provided,
however, that if maintenance and repairs are caused by the act,
neglect, or omission of any duty by Tenant, its agents, servants,
employees or contractors, then Tenant shall pay to Landlord, as
additional rent, the reasonable cost of such maintenance and repairs.
Except as provided in Paragraph 8.5, there shall be no abatement of
rent or liability to Tenant on account of any injury or interference
with Tenant's business with respect to any improvements, alterations
or repairs made by Landlord to the Project or any part thereof.
Tenant expressly waives the benefits of any statute now or hereafter
in effect which would otherwise afford to Tenant a right to make
repairs at Landlord's expense or to terminate this Lease because of
Landlord's failure to keep the Premises in good order, condition and
repair. Notwithstanding Landlord's obligation to the keep the
Premises in good condition and repair, for that portion of the cost of
any maintenance and repair of the Premises or any equipment (wherever
located) that serves only Tenant or the Premises, Tenant shall be
responsible for payment of the cost thereof to Landlord as additional
rent to the extent such cost is attributable to causes beyond normal
wear and tear. Tenant shall be responsible for the cost of repairing
or replacing any Premises improvements that are not ordinarily a part
of the Building or that are above then Building Standards. Landlord
may, at its option, upon reasonable notice, elect to have Tenant
perform any maintenance or repair, the cost of which is Tenant's
responsibility hereunder. Notwithstanding the provisions of Section
5.1, if Landlord fails to perform its maintenance and repair
obligations hereunder within a reasonable time, and, as a consequence,
Tenant's use of the Premises is substantially impaired, Tenant shall
have the right to cause such repair or maintenance to be performed at
Landlord's expense and to deduct the costs thereof, together with
interest thereon at the highest rate permitted by law, from the rent
payable to Landlord.
5.2. ALTERATIONS. Tenant shall make no alterations,
additions or improvements to the Premises (whether structural or
non-structural) without Landlord's prior written consent, which
consent may be withheld for any reason. If any alteration, addition
or improvement is made by Tenant without such consent, Landlord shall
have the right to require Tenant to remove the same at any time during
the Term. If Tenant shall request Landlord's consent for any
alterations, additions or improvements, then Tenant shall submit
detailed plans, specifications and an itemized budget for making such
alterations, additions or improvements. Landlord may impose any
conditions to any consent as Landlord shall in its discretion deem to
be necessary or advisable, including without limitation the hours when
work may be performed. Any approved alteration, addition or
improvement shall be made only by contractors or mechanics approved by
Landlord. Tenant shall provide Landlord with as-built plans and
specifications for any alterations, additions or improvements. Tenant
covenants and agrees that all work done by Tenant shall be performed
in full compliance with all laws, rules, orders, ordinances,
regulations, permits and requirements of any insurance rating bureau
used by insurers selected to carry Landlord's insurance, and of any
similar body. Tenant shall pay, when due, all claims for labor or
materials furnished or alleged to have been furnished to or for Tenant
at or for use on the Premises, which claims are or
6
may be secured by any mechanics or materialmen's lien against the
Premises or any interest therein. If Tenant shall, in good faith,
contest the validity of any such lien, claim or demand, then Tenant
shall, at its sole expense defend and protect itself, Landlord, and
the Premises against the same and shall pay and satisfy any such
adverse judgment that may be rendered thereon before the enforcement
thereof against the Landlord or the Premises. In addition, Landlord
may require Tenant to pay Landlord's attorneys' fees and costs in
participating in such action if Landlord shall decide it is to its
best interest to do so. Before commencing any work, Tenant shall give
Landlord at least ten (10) days written notice of the proposed
commencement of such work and shall, if required by Landlord, secure
at Tenant's own cost and expense, a completion and lien indemnity bond
satisfactory to Landlord for said work and such other comprehensive
general public liability insurance, builders risk insurance, and other
such insurance coverages so as to protect the insurable interests of
Landlord, Tenant, contractors and subcontractors in amounts and on
forms as may be requested by Landlord. Landlord may enter upon the
Premises, in such case, for the purpose of posting appropriate
notices, including, but not limited to, notices of non-responsibility.
5.3. CONDITION ON TERMINATION. On the last day of the Term
hereof, or on any sooner termination, Tenant shall surrender the
Premises to Landlord in the same condition as received, ordinary wear
and tear excepted, clean and free of debris. Any damage or
deterioration of the Premises shall not be deemed ordinary wear and
tear if the same could have been prevented by good maintenance
practices by Tenant. Landlord may require the removal of any or all
alterations, additions or improvements made by Tenant prior to the
termination of the Lease and restoration of the Premises and the
Project to their prior condition (i.e., the condition as of the
Commencement Date), at Tenant's expense. All alterations, additions
and improvements which Landlord does not require Tenant to remove
shall become Landlord's property and shall be surrendered to Landlord
upon termination of the Lease. Other than personal property, in no
event shall Tenant remove any materials or equipment from the Premises
without Landlord's prior written consent, including, but not limited
to, any power wiring or power panels, lighting or lighting fixtures,
wall coverings, window coverings, carpets, other floor coverings,
heaters, air conditioners or any other heating or air conditioning
equipment, fencing or security gates or other similar Building
operating equipment and decorations. Notwithstanding the provisions
of Section 5.3, Tenant shall not be required to remove any
alterations, additions, improvements or utility installations for
which Tenant has obtained Landlord's consent, unless Landlord has
indicated at the time of granting such consent, that such removal will
be required at the end of the Lease Term.
6. UTILITIES AND SERVICES.
6.1. UTILITIES AND SERVICES FURNISHED BY LANDLORD. Provided
that Tenant is not in default under this Lease, Landlord agrees to
furnish or cause to be furnished to the occupied portion of the
Premises the utilities and services described in Exhibit "C."
6.2. UTILITIES AND SERVICES FURNISHED BY TENANT. Tenant
shall pay for all water, gas, heat, light, power, telephone and other
utilities and services specially or exclusively supplied and/or
metered exclusively to the Premises or to Tenant, together with any
taxes thereon.
6.3. INTERRUPTION OF SERVICE. Unless due to Landlord's
gross negligence or willful misconduct, Landlord shall not be liable
in damages or otherwise for any failure or interruption of any utility
service being furnished to the Premises and no such failure or
interruption shall entitle Tenant to terminate this Lease, or to an
abatement of the Monthly Base Rent, additional rent or other charges
due hereunder.
7. INSURANCE AND INDEMNITY.
7.1. TENANT'S LIABILITY INSURANCE. Tenant shall carry at
its own expense throughout the term of this Lease, commercial general
liability insurance covering the Premises and appurtenant areas, and
Tenant's use thereof, and protecting Tenant and Landlord (as an
additional insured) against claims for bodily injury, personal injury
and property damage based upon, involving or arising out of the
ownership, use, occupancy or maintenance of the Premises and all areas
appurtenant thereto. Such insurance shall be on an occurrence basis
providing single limit coverage in an amount not less than $1,000,000
per occurrence with an "Additional Insured - Managers or Lessors of
Premises" Endorsement and shall contain the "Amendment of Pollution
Exclusion" for damage caused by heat, smoke or fumes from a hostile
fire. The policy shall not contain any intra-insured exclusions as
between insured persons or organizations, but shall include coverage
for liability assumed under this Lease as an "insured contract" for
the performance of Tenant's indemnity obligations under this Lease.
Such insurance shall also cover Tenant's contractual liability under
this Lease in an amount periodically adjusted as hereinafter provided
to conform to then current standard business practices for comparable
business operations, but in no case less than the amounts shown in the
applicable Basic Lease Provisions. The liability limit of such
insurance shall not, however, limit Tenant's liabilities assumed under
this Lease. Tenant shall keep in full force and effect a policy or
policies of worker's compensation insurance as required by law, and
with employer's liability coverage for bodily injury by accident of
not less than $3,000,000 for each accident, and for bodily injury by
disease of not less than $3,000,000 for each employee and for the
policy limit. If required by Landlord, then the amounts of general
liability and employer's liability insurance shall be increased from
time to time (but in no event more frequently than once every three
(3) years) to an amount reasonably determined by Landlord as may be
required, given the then current economic conditions and the size of
damage awards generally, to approximate the same level of protection
as was provided on the Commencement Date.
7.2. TENANT'S CASUALTY INSURANCE. Tenant shall, at Tenant's
expense, obtain and keep in force during the term of this Lease,
replacement cost, fire and extended coverage insurance, with vandalism
and malicious mischief, sprinkler leakage and earthquake endorsements,
in an amount sufficient to cover not less than 100% of the full
replacement cost, as the same may exist from time to time, of all of
Tenant's personal property, fixtures, equipment and Tenant
improvements. Tenant agrees that all personal property of whatever
kind, including, without limitation, inventory and/or goods stored at
or about the Premises, Tenant's trade fixtures and Tenant's interest
in tenant improvements which may be at any time located in, on or
about the Premises or the Building, whether owned by Tenant or third
parties, shall be at Tenant's sole risk or at the risk of those
claiming through Tenant, and that Landlord shall not be liable for any
damage to or loss of such property except for loss or damage arising
from or caused by the sole gross negligence of Landlord or any of
Landlord's officers, employees, agents or authorized representatives
acting within the scope of their authority.
7
7.3. FORM OF INSURANCE POLICIES. Insurance required
hereunder shall be in companies duly licensed to transact business in
the state where the Premises are located, and maintaining during the
policy term a "General Policyholders Rating" of at least B+, V, or
such other rating as may be required by any lender having a lien on
the Premises, as set forth in the most current issue of "Bests
Insurance Guide." Tenant shall not do or permit to be done anything
which shall invalidate any insurance policy referred to in this
Paragraph 7. Tenant shall provide Landlord with copies of insurance
policies or certificates of insurance prior to the Commencement Date
of the Lease and shall provide to Landlord copies of replacement
policies at least ninety (90) days prior to the date of expiration of
a policy. A binder or certificate of insurance shall be sufficient
evidence of insurance pending issuance of a policy; provided, however,
that Tenant shall forward a copy of each policy to Landlord when
issued. Such insurance policies shall be on forms reasonably
acceptable to Landlord and shall be on an occurrence basis. Such
insurance shall name Landlord, any management agent from time to time
designated by Landlord, any lender of Landlord as additional insureds,
and shall provide that coverage of additional insureds shall be
primary and that any insurance maintained by Landlord shall be excess
only. Such insurance shall provide that the interests of Landlord,
Tenant and other insureds shall be severable such that the act or
omission of one insured shall not avoid or reduce the coverage of
other insureds. Such insurance shall contain endorsements (a) stating
that the insurer agrees to notify Landlord in writing not less than
thirty (30) days in advance of modification or cancellation thereof,
(b) deleting any employee exclusion on personal injury coverage, (c)
including employees as additional insureds, (d) deleting any exclusion
from liability caused by serving alcoholic beverages incidental to
Tenant's business, and (e) providing for coverage for employer's
non-owned automobile liability. Failure of Tenant to maintain
insurance coverages required by this Lease for any time period during
the Term or failure of Tenant to deliver evidence of insurance or
copies of policies shall be material defaults under this Lease.
7.4. LANDLORD INSURANCE. Landlord shall carry such
insurance with respect to the Building, of the type and amounts as
Landlord, in its sole discretion, shall deem reasonably appropriate.
The cost of any such insurance shall be includable as Operating
Expenses pursuant to Section 3.3 above. If Tenant fails to maintain,
or to provide Landlord with, evidence of the required insurance
coverages, Landlord shall have the right, but not the obligation, to
obtain such insurance coverages on Tenant's behalf. The cost of such
insurance coverages shall be deemed additional rent payable by Tenant
to Landlord upon demand.
7.5. WAIVER OF LIABILITY OF LANDLORD. Except in the event
of Landlord's sole gross negligence, Tenant hereby agrees that
Landlord shall not be liable for (a) injury to Tenant's business or
any loss of income therefrom, (b) loss of or damage to the goods,
wares, merchandise or other property of Tenant, Tenant's employees,
invitees, customers, or any other person in or about the Premises or
the Project, or (c) injury to the person of Tenant, Tenant's
employees, agents, contractors, invitees, customers, or any other
person in or about the Premises or the Project, whether such damage or
injury is caused by or results from theft, fire, steam, electricity,
gas, water or rain, or from the breakage, leakage, obstruction or
other defects of pipes, sprinklers, wires, appliances, plumbing, air
conditioning or lighting fixtures, from indoor air pollution,
electromagnetic radiation or other conditions associated with the
so-called "sick building syndrome," or from any other cause, whether
damage or injury results from conditions arising upon the Premises or
upon other portions of the Project, or from other sources or places
appurtenant to the Premises and regardless of whether the cause of
such damage or injury or the means of repairing the same is
inaccessible to Tenant. Landlord shall not be liable for any damages
arising from any act or neglect of any other tenant, occupant, or user
of the Project, nor from the failure of Landlord to enforce the
provisions of any other lease of any other tenant of the Project.
7.6. INDEMNIFICATION. Tenant shall indemnify and save
harmless Landlord from and against any and all liability, liens,
claims, demands, expenses, fees, costs, fines, penalties, suits,
proceedings, actions and causes of action of any and every kind and
nature arising or growing out of or relating to Tenant's use,
occupancy, management or control of the Premises or Tenant's
operations, conduct or activities in the Project. Landlord shall
indemnify and save harmless Tenant from and against any and all
liability, liens, claims, demands, expenses, fees, costs, fines,
penalties, suits, proceedings, actions and causes of action of any and
every kind and nature arising or growing out of or relating to a
breach of Landlord of its obligations to Tenant pursuant to this
Lease, or the gross negligence or willful misconduct of Landlord.
7.7. WAIVER OF SUBROGATION. Tenant and Landlord each hereby
release and relieve the other, and waive their entire right of
recovery against the other, for direct or consequential loss or damage
arising out of or incident to the perils covered by property insurance
carried by such party, whether due to the negligence of Landlord or
Tenant or their agents, employees, contractors and/or invitees. If
necessary all property insurance policies required under this Lease
shall be endorsed to so provide.
8. DAMAGE OR DESTRUCTION.
8.1. DEFINITIONS.
8.1.1. "Premises Damage" shall mean that the
Premises are damaged or destroyed to any extent.
8.1.2. "Building Partial Damage" shall mean
that the Building of which the Premises are a part is damaged or
destroyed to the extent that the cost to repair is less than
fifty percent (50%) of the then Replacement Cost of the Building.
8.1.3. "Building Total Destruction" shall mean
that the Building of which the Premises are a part is damaged or
destroyed to the extent that the cost to repair is fifty percent
(50%) or more of the then Replacement Cost of the Building.
8.1.4. "Project Total Destruction" shall mean
that the Project (as defined in paragraph 1.1) is damaged or
destroyed to the extent that the cost of repair is fifty percent
(50%) or more of the then Replacement Cost of the Project.
8.1.5. "Insured Loss" shall mean damage or
destruction caused by an event required to be covered by the
insurance described in Section 7. The fact that an Insured Loss
has a deductible amount shall not make the loss an uninsured
loss.
8.1.6. "Replacement Cost" shall mean the amount
of money necessary to be spent in order to repair or rebuild the
damaged area to the condition that existed immediately prior to
the occurrence of the damage, excluding all improvements made by
tenants, other than those installed by Landlord at Tenant's
expense.
8
8.2. PREMISES DAMAGE; PREMISES BUILDING PARTIAL DAMAGE.
8.2.1. INSURED LOSS. Subject to
the provisions of paragraphs 8.4 and 8.5, if at any time during
the term of this Lease there is damage which is an Insured Loss
and which falls into the classification of either Premises Damage
or Building Partial Damage, then Landlord shall, as soon as
reasonably possible and to the extent the required materials and
labor are readily available through usual commercial channels, at
Landlord's expense, repair such damage (but not Tenant's
fixtures, equipment or tenant improvements originally paid for by
Tenant) to its condition existing at the time of the damage, and
this Lease shall continue in full force and effect.
8.2.2. UNINSURED LOSS. Subject
to the provisions of paragraphs 8.4 and 8.5, if at any time
during the term of this Lease there is damage which is not an
Insured Loss and which falls within the classification of
Premises Damage or Building Partial Damage, unless caused by a
negligent or willful act of Tenant (in which event Tenant shall
make the repairs at Tenant's expenses), which damage prevents
Tenant from making any substantial use of the Premises, Landlord
may at Landlord's option either (i) repair such damage as soon as
reasonably possible at Landlord's expense, in which event this
Lease shall continue in full force and effect, or (ii) give
written notice to Tenant within thirty (30) days after the date
of the occurrence of such damage of Landlord's intention to
cancel and terminate this Lease as of the date of the occurrence
of such damage, in which event Tenant shall have the option to
repair the damage at Tenant's expense. If Tenant does not choose
to make such repairs, event this Lease shall terminate as of the
date of the occurrence of such damage.
8.3. BUILDING TOTAL DESTRUCTION; PROJECT TOTAL DESTRUCTION.
Subject to the provisions of paragraphs 8.4 and 8.5, if at any time
during the term of this Lease there is damage, whether or not it is an
Insured Loss, which falls in the classifications of either
(i) Building Total Destruction, or (ii) Project Total Destruction,
then Landlord may at Landlord's option either (i) repair such damage
or destruction as soon as reasonably possible at Landlord's expense
(to the extent the required materials are readily available through
usual commercial channels) to its condition existing at the time of
the damage, but not Tenant's fixtures, equipment or tenant
improvements, and this Lease shall continue in full force and effect,
or (ii) give written notice to Tenant within thirty (30) days after
the date of occurrence of such damage of Landlord's intention to
cancel and terminate this Lease, in which case this Lease shall
terminate as of the date of the occurrence of such damage.
8.4. DAMAGE NEAR END OF TERM.
8.4.1. Subject to paragraph 8.4.2, if at any
time during the last twelve (12) months of the term of this Lease
there is substantial damage to the Premises, Landlord or Tenant
may cancel and terminate this Lease as of the date of occurrence
of such damage by giving written notice to the other within
thirty (30) days after the date of occurrence of such damage.
8.4.2. Notwithstanding paragraph 8.4.1, in the
event that Tenant has an option to extend or renew this Lease,
and the time within which said option may be exercised has not
yet expired, Tenant shall exercise such option, if it is to be
exercised at all, no later than twenty (20) days after the
occurrence of an Insured Loss falling within the classification
of Premises Damage during the last twelve (12) months of the term
of this Lease. If Tenant duly exercises such option during said
twenty (20) day period, Landlord shall, at Landlord's expense,
repair such damage, but not Tenant's fixtures, equipment or
tenant improvements, as soon as reasonably possible and this
Lease shall continue in full force and effect. If Tenant fails
to exercise such option during said twenty (20) day period, then
Landlord may at Landlord's option terminate and cancel this Lease
as of the expiration of said twenty (20) day period by giving
written notice to Tenant of Landlord's election to do so within
ten (10) days after the expiration of said twenty (20) day
period, notwithstanding any term or provision in the grant of
option to the contrary.
8.5. ABATEMENT OF RENT; TENANT'S REMEDIES.
8.5.1. In the event Landlord repairs or
restores the Building or Premises pursuant to the provisions of
Section 8, and any part of the Premises are not useable
(including loss of use due to loss of access or essential
services), the rent payable hereunder (including Tenant's Share
of Operating Expenses) for the period during which such damage,
repair or restoration continues shall be abated, provided (1) the
damage was not the result of the negligence of Tenant, and (2)
such abatement shall only be to the extent of the pro-rata share
of the Premises that is adversely affected. Except for said
abatement of rent, if any, Tenant shall have no claim against
Landlord for any damage suffered by reason of any such damage,
destruction, repair or restoration, unless caused by Landlord's
gross negligence or willful misconduct.
8.5.2. If Landlord shall be obligated to repair
or restore the Premises under the provisions of this Section 8
and shall not commence, in a substantial and meaningful way, the
repair or restoration of the Premises within ninety (90) days
after such obligation shall accrue, Tenant may, at any time prior
to the commencement of such repair or restoration, give written
notice to Landlord and to any lenders of which Tenant has actual
notice of Tenant's election to terminate this Lease on a date not
less than sixty (60) days following the giving of such notice.
If Tenant gives such notice to Landlord and such lenders and such
repair or restoration is not commenced within thirty (30) days
after receipt of such notice, this Lease shall terminate as of
the date specified in said notice. If Landlord or a lender
commences the repair or restoration of the Premises within thirty
(30) days after receipt of such notice, this Lease shall continue
in full force and effect. "COMMENCE" as used in this Paragraph
shall mean either the unconditional authorization of the
preparation of the required plans, or the beginning of the actual
work on the Premises, whichever first occurs.
8.5.2.1. Notwithstanding anything to
the contrary in Paragraph 15: (a) If Landlord is
required to or elects to repair or restore the
Premises, Landlord shall notify Tenant within thirty
(30) days of the date of such casualty, and such notice
shall specify Landlord's architect's or engineer's
reasonable estimate as to the time required to repair
or restore the Premises; (b) If, in the reasonable
opinion of Landlord's architect or engineer, the
Premises will take longer than one hundred and twenty
(120) days to repair or restore, Tenant may,
notwithstanding Landlord's election to rebuild,
terminate this Lease by written notice to Landlord
within five (5) days after Tenant's receipt
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of Landlord's notice. Such termination shall be
effective thirty (30) days after the giving of Tenant's
notice; (c) If Landlord fails to repair or restore the
premises (including reasonable means of access thereto)
within a period which is thirty (30) days longer than
the period stated in Landlord's notice to Tenant as the
estimated rebuilding period, Tenant, at any time
thereafter until such rebuilding is completed, may
terminate this Lease by delivering written notice to
Landlord of such termination, in which event this Lease
shall terminate as of the date of the giving of such
notice. (d) Subject to Tenant's right of termination
pursuant to subparagraph (b) above, if the casualty to
the Premises or the Building is due to Landlord's
negligence or willful misconduct, Landlord shall be
obligated to rebuild or restore the same
notwithstanding any insufficiency of insurance
proceeds. (e) Lessee's rights to termination hereunder
shall be in addition to its right of termination under
Section 8.5.2 of this Lease.
8.5.3. Tenant agrees to cooperate with Landlord
in connection with any such restoration and repair, including but
not limited to the approval and/or execution of plans and
specifications required.
8.6. TERMINATION-ADVANCE PAYMENTS. Upon termination of this
Lease pursuant to Section 8, 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 so much of
Tenant's security deposit as has not theretofore been applied by
Landlord.
8.7. WAIVER. Landlord and Tenant waive the provisions of
any statute which relates to termination of leases when leased
property is destroyed and agree that such event shall be governed by
the terms of this Lease.
8.8. INSURANCE LIMITATION. Notwithstanding anything else to
the contrary contained in this Section 8, Landlord shall have no
obligation to pay for the repair or restoration of damage or
destruction to the Premises caused by fire or other casualty more than
the amount of the insurance proceeds payable for the benefit of
Landlord by reason of such damage or destruction, plus any amounts
actually paid by Tenant as required in this Section 8 for the excess
of the cost of reconstructing tenant improvements over the original
cost of such tenant improvements paid initially by Landlord. If the
sum of such insurance proceeds, plus the amount so paid by Tenant, are
not sufficient to cover the cost of such repairs, then Landlord may
elect to so repair or restore and the Lease shall continue in full
force and effect, or Landlord may elect not to repair or restore and
the Lease shall then terminate. Landlord and Tenant waive the
provisions of any statute which relate to termination of leases when
leased property is destroyed and agree that such event shall be
governed by the terms of this Lease.
9. TAXES.
Tenant shall pay all taxes and license fees levied, assessed or imposed by
reason of Tenant's use of the Premises, and all taxes on Tenant's trade
fixtures, furnishings, equipment and all other personal property located on the
Premises. If any of Tenant's personal property shall be assessed with
Landlord's real property, Tenant shall pay to Landlord the taxes attributable to
Tenant within ten (10) days after receipt of a written statement setting forth
the taxes applicable to Tenant's property. Landlord shall pay all property
taxes or assessments applicable to the Project, subject to reimbursement by
Tenant of Tenant's share of such taxes in accordance with the provisions of
Section 3.3.
10. ASSIGNMENT AND SUBLETTING.
10.1. PROHIBITION OF ASSIGNMENT OR SUBLET. Except as
otherwise provided herein, Tenant shall not assign, transfer, mortgage
or otherwise encumber, voluntarily or by operation of law, this Lease
or any interest hereof, or sublet the Premises or any portion thereof,
or permit any other person to occupy the Premises or any portion
thereof without the express written consent of Landlord, which consent
may not be unreasonably withheld and shall, in any event, be subject
to the provisions of Section 10.2 below. Consent to one assignment or
subletting shall not constitute a waiver of this provision or consent
to any further assignment or subletting. Tenant shall reimburse
Landlord for any reasonable costs and expenses, including but not
limited to legal expenses, incurred by Landlord in connection with its
review of any proposed assignment or subletting, whether or not
Landlord gives its consent. No assignee for the benefit of creditors,
trustee in bankruptcy or purchaser at any execution sale, shall have
the right to possess or occupy the Premises or any part thereof, or
claim and right hereunder or assignment. For the purposes of this
Lease, provided that the use of the Premises does not change, an
assignment and sublet shall not be deemed to include any transfer,
assignment or subletting of the Premises (or any portion thereof) to
any entity which controls, is controlled by, or is under common
control with Tenant; to any entity which result from a merger of,
reorganization of or consolidation with Tenant; or to any entity which
acquires substantially all of the assets of Tenant, as a going
concern, with respect to the business that is being conducted in the
Premises; nor shall assignment or sublet include the transfer or sale
of stock, or the transfer of the beneficial ownership or effective
voting control of Tenant from the person(s) having effective voting
control as of the date of Tenant's execution of this Lease, where such
transfer occurs in connection with any BONA FIDE financing or
capitalization for the benefit of Tenant.
10.2. PROCEDURE FOR CONSENT. In the event Tenant wishes to
sublet or assign the Premises, or any portion thereof, the following
procedure shall apply:
10.2.1. Tenant shall submit in writing to
Landlord the name of the proposed subtenant or assignee, the
nature of the business to be carried on the Premises, a copy of
the proposed sublease or assignment, including all terms and
conditions thereof, and such reasonable financial information
regarding such subtenant or assignee as Landlord shall request;
10.2.2. At any time within thirty (30) days of
Landlord's receipt of the information specified in Section 10.2,
Landlord may, by written notice to Tenant, elect either to (a)
consent to the subletting or assignment of the Premises upon the
same terms and conditions as those offered to the proposed
subtenant or assignee; (b) terminate this Lease with respect to
the portion of the Premises proposed to be subleased or assigned,
with a proportionate abatement of rent payable hereunder; (c)
consent to such subletting or assignment, in which event such
consent shall be conditioned upon the agreement by Tenant to pay
over to Landlord the amount by which any rent or other
consideration received by Tenant from subtenant or assignee
exceeds the amount of rent payable by Tenant to Landlord pursuant
to this Lease as offset by Tenant's costs of subletting; or (d)
withhold Landlord's consent.
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10.3. CONTINUING OBLIGATION OF TENANT. No transfer, even
with the consent of Landlord, shall release Tenant of its obligation
to pay the rent and to perform all other obligations of Tenant
hereunder. Neither a delay in the approval or disapproval of an
assignment or subletting, nor the acceptance by Landlord of any
payment due hereunder from any source other than Tenant shall be
deemed a waiver by Landlord of any provision of this Lease or to be a
consent to any assignment or subletting. If Tenant's obligations
under this Lease have been guaranteed by third parties, then an
assignment or sublease, and Landlord's consent thereto, shall not be
effective unless said guarantors give their written consent to such
sublease and the terms thereof. In the event of any default under
this Lease, Landlord may proceed directly against Tenant, any
guarantors or anyone else responsible for the performance of this
Lease, including the subtenant, without first exhausting Landlord's
remedies against any other person or entity responsible therefor to
Landlord, or any security held by Landlord or Tenant. Landlord may
consent to subsequent assignments or modifications of this Lease by
Tenant's transferee, without notifying Tenant or obtaining its
consent. Such action shall not relieve Tenant's liability under this
Lease.
10.4. Landlord's written consent to any assignment or
subletting of the Premises by Tenant shall not constitute an
acknowledgment that no Default then exists under this Lease of the
obligations to be performed by Tenant, nor shall such consent be
deemed a waiver of any then existing Default, except as may be
otherwise stated by Landlord at the time.
10.5. The discovery of the fact that any financial statement
relied upon by Landlord in giving its consent to an assignment or
subletting was materially false or misleading shall, at Landlord's
election, render Landlord's said consent null and void.
10.6. ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO
SUBLETTING. The following terms and conditions shall apply to any
subletting by Tenant of all or any of the Premises and shall be deemed
included in all subleases under this Lease whether or not expressly
incorporated therein.
10.6.1. Tenant hereby assigns and transfers to
Landlord all of Tenant's interest in all rentals and income
arising from any sublease of all or any portion of the Premises
heretofore or hereafter made by Tenant, and Landlord may collect
such rent and income and apply the same toward Tenant's
obligations under this Lease; provided, however, that until a
Default (as defined in Section 11) shall occur in the performance
of Tenant's obligations under this Lease, Tenant may collect and
enjoy rents accruing under such sublease. Landlord shall not, by
reason of this or any other assignment of such sublease to
Landlord, nor by reason of the collection of the rents from a
sublease, be deemed liable to the subtenant for any failure of
Tenant to perform and comply with any of Tenant's obligations to
such subtenant under such sublease. Tenant hereby irrevocably
authorizes and directs any such subtenant, upon receipt of a
written notice from Landlord stating that a default exists in the
performance of Tenant's obligations under this Lease, to pay to
Landlord the rents and other charges due and to become due under
the sublease. Subtenant shall rely upon any such statement and
request from Landlord and shall pay such rents and other charges
to Landlord without any obligation or right to inquire as to
whether such default exists and notwithstanding any notice from
or claim from Tenant to the contrary. Tenant shall have no right
or claim against said subtenant, or until the Default has been
cured, against Landlord, for any such rents and other charges so
paid by said subtenant to Landlord.
10.6.2. In the event of a default by Tenant in
the performance of its obligations under this Lease, Landlord at
its option and without any obligation to do so may require any
subtenant to attorn to Landlord in which event Landlord shall
undertake the obligations of the sublandlord under such sublease
from the time of the exercise of said option to the expiration of
such sublease; provided, however, Landlord shall not be liable
for any prepaid rents or security deposit previously paid by the
subtenant to such sublandlord (unless such prepaid rents or
security deposit have been delivered to Landlord) or for any
other prior defaults of such sublandlord under such sublease.
10.6.3. Any matter or thing requiring the
consent of the sublandlord under a sublease shall also require
the consent of Landlord herein.
10.6.4. No subtenant shall further assign or
sublet all or any part of the premises without Landlord's prior
written consent.
10.7. EXCESS RENT. Notwithstanding any other provision of
Section 10 to the contrary, if the consideration Tenant receives for
any assignment, sublease or transfer exceeds the rent payable under
this Lease for the same period and portion of the Premises, the excess
shall be immediately due and payable by Tenant to Landlord as
additional rent under this Lease as offset by Tenant's costs of
subletting.
10.8. NO MERGER. No merger shall result from Tenant's
sublease of the Premises under this Section 10, Tenant's surrender of
this Lease or the termination of this Lease in any other manner. In
any such event, Landlord may terminate any or all subtenancies or
succeed to the interest of Tenant as sublandlord thereunder.
11. DEFAULT.
11.1. DEFAULT BY TENANT. The occurrence of any one or more
of the following events shall constitute a material Default of this
Lease by Tenant:
11.1.1. The vacation or abandonment of the
Premises by Tenant. Vacation of the Premises shall include the
failure to occupy the Premises for a continuous period of thirty
(30) days or more, whether or not the rent is paid.
11.1.2. The failure by Tenant to make any
payment of rent or any other payment required to be made by
Tenant hereunder, as and when due, where such failure shall
continue for a period of three (3) days after written notice
thereof from Landlord to Tenant. In the event that Landlord
serves Tenant with a Notice to Pay Rent or Quit pursuant to
applicable unlawful detainer statutes such Notice to Pay Rent or
Quit shall also constitute the notice required by this
subsection.
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11.1.3. The failure by Tenant to observe or
perform any of the express or implied covenants, conditions or
provisions of this Lease to be observed or performed by Tenant
other than that referenced in subsection 11.1.2 above, where such
failure shall continue for a period of thirty (30) days after
written notice thereof from Landlord to Tenant; provided,
however, that if the nature of Tenant's noncompliance 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
commenced such cure within said thirty (30) day period and
thereafter diligently pursues such cure to completion. To the
extent permitted by law, such thirty (30) day notice shall
constitute the sole and exclusive notice required to be given to
Tenant under applicable unlawful detainer statutes.
11.1.4. The making by Tenant of a general
assignment for the benefit of creditors; (b) Tenant's becoming a
"debtor" as defined in 11 U.S.C. Section 101 or any successor
statute thereto (unless, in the case of a petition filed against
Tenant, the same is dismissed within sixty (60) days); (c) 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 within thirty (30) days; or (d) 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 thirty
(30) days. In the event that any provision of this subsection
11.1.4 is contrary to any applicable law, such provision shall be
of no force or effect.
11.1.5. The discovery by Landlord that any
financial statement given to Landlord by Tenant, or is successor
in interest or by any guarantor of Tenant's obligation hereunder
was materially false or misleading.
11.1.6. If the performance of Tenant's
obligations under this Lease is guaranteed: (a) the termination
of a guarantor's liability with respect to this Lease other than
in accordance with the terms of such guaranty, (b) a guarantor's
becoming insolvent or the subject of a bankruptcy filing, (c) a
guarantor's refusal or inability to honor the guarantee, or (d) a
guarantor's breach of its guarantee obligation, and Tenant's
failure within sixty (60) days following written notice by or on
behalf of Landlord to Tenant of any such event, to provide
Landlord with written alternative assurance or security, which,
when coupled with the then existing resources of Tenant, equals
or exceeds the combined financial resources of Tenant and the
guarantors that existed at the time of execution of this Lease.
11.2. LANDLORD'S REMEDIES. In the event of any material
Default of this Lease by Tenant, Landlord may at any time thereafter,
with or without notice or demand and without limiting Landlord in the
exercise of any right or remedy which Landlord may have by reason of
such default:
11.2.1. Terminate Tenant's right to possession
of the Premises by any lawful means, in which case this Lease and
the term hereof shall terminate and Tenant shall immediately
surrender possession of the Premises to Landlord. In such event
Landlord shall be entitled to recover from Tenant all reasonable
damages incurred by Landlord by reason of Tenant's default
including, but not limited to, the cost of recovering possession
of the Premises; expenses of reletting, including necessary
renovation and alteration of the Premises, reasonable attorneys'
fees, and any real estate commission actually paid; the worth at
the time of award by the court having jurisdiction thereof of the
amount by which the unpaid rent for the balance of the term after
the time of such award exceeds the amount of such rental loss for
the same period that Tenant proves could be reasonably avoided;
that portion of the leasing commission paid by Landlord pursuant
to Section 27 applicable to the unexpired term of this Lease.
11.2.2. Maintain Tenant's right to possession
in which case this Lease shall continue in effect whether or not
Tenant shall have vacated or abandoned the Premises. In such
event, Landlord shall be entitled to enforce all of Landlord's
rights and remedies under this Lease, including the right to
recover the rent as it becomes due hereunder.
11.2.3. Pursue any other remedy now or
hereafter available to Landlord under the laws or judicial
decisions of the state wherein the Premises are located. Unpaid
installments of rent and other unpaid monetary obligations of
Tenant under the terms of this Lease shall bear interest from the
date due at the maximum rate then allowable by law.
11.2.4. The expiration or termination of this
Lease and/or the termination of Tenant's right to possession
shall not relieve Tenant from liability under any indemnity
provisions of this Lease as to matters occurring or accruing
during the Term hereof or by reason of Tenant's occupancy of the
Premises.
11.3. INDUCEMENT, RECAPTURE AND EFFECT OF BREACH. Any
agreement by Landlord for free or abated rent or other charges
applicable to the Premises, or for the giving or paying by Landlord to
or for Tenant of any cash or other bonus, inducement or consideration
for Tenant's entering into this Lease, all of which concessions are
hereinafter referred to as "Inducement Provisions," shall be deemed
conditioned upon Tenant's full and faithful performance of all the
terms, covenants and conditions of this Lease to be performed or
observed by Tenant during the term hereof as the same may be extended.
Upon the occurrence of a breach of this Lease by Tenant, as defined in
paragraph 11.1, any such Inducement Provision shall automatically be
deemed deleted from this Lease and of no further force or effect, as
though it had never been a part hereof, and any rent, other charge,
bonus, inducement, or consideration theretofore abated, given or paid
by Landlord under such an Inducement Provision shall be immediately
due and payable by Tenant to Landlord, and recoverable by Landlord as
additional rent due under this Lease, notwithstanding any subsequent
cure of said breach by Tenant. The acceptance by Landlord of rent or
the cure of the breach which initiated the operation of this paragraph
shall not be deemed a waiver by Landlord of the provisions of this
paragraph unless specifically so stated in writing by Landlord at the
time of such acceptance.
11.4. RIGHT OF LANDLORD TO RE-ENTER. In the event of any
termination of this Lease, Landlord shall have the immediate right to
enter upon and repossess the Premises, and any personal property of
Tenant may be removed from the Premises and stored in any public
warehouse at the risk and expense of Tenant.
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11.5. DEFAULT BY LANDLORD. Landlord shall not be in default
unless Landlord fails to perform obligations required of Landlord
within a reasonable time, but in no event later than thirty (30) days
after written notice by Tenant to Landlord and to the holder of any
first mortgage or deed of trust covering the Premises whose name and
address shall have theretofor been furnished to Tenant in writing,
specifying wherein Landlord has failed to perform such obligation;
provided, however, that if the nature of Landlord's obligation is such
that more than thirty (30) days are required for performance then
Landlord shall not be in default if Landlord commences performance
within such 30-day period and thereafter diligently pursues the same
to completion.
12. ENVIRONMENTAL MATTERS
12.1. DEFINITIONS. For purposes of this Section 12:
12.1.1. With the exception of standard office
products "Hazardous Materials" means any product, chemical,
material or waste whose presence, nature, quantity and/or
intensity of existence, use, manufacture, disposal,
transportation, spill, release or effect, either by itself or in
combination with other materials expected to be on the Premises,
is either: (a) potentially injurious to the public health, safety
or welfare, the environment or Premises, (b) regulated or
monitored by any governmental authority, or (c) a basis for
liability of Landlord to any governmental agency or third party
under any applicable statute or common law theory. Hazardous
Materials include, but are not limited to, substances defined as
"hazardous wastes," "hazardous substances," "toxic substances,"
"pollutants," "contaminants," "chemicals known to the State to
cause cancer or reproductive toxicity," "radioactive materials,"
or other similar designations in, or otherwise subject to
regulation under, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the
Superfund Amendments and Reauthorization Act of 1986 ("CERCLA"),
42 U.S.C. Section 9601 et seq.; the Hazardous Substances Account
Act ("HSAA"), California Health and Safety Code Section 25300 et
seq.; the Toxic Substance Control Act ("TSCA"), 15 U.S.C. Section
2601 et seq.; the Hazardous Materials Transportation Act, 49
U.S.C. Section 1802; the Resource Conservation and Recovery Act
("RCRA"), 42 U.S.C. Section 9601 et seq.; the Hazardous Waste
Control Law ("HWCL"), California Health and Safety Code Section
25100 et seq.; the Safe Drinking Water and Toxic Enforcement Act
of 1986, California Health and Safety Code Section 25249.5 et
seq.; the ▇▇▇▇▇▇-Cologne Water Quality Control Act
("▇▇▇▇▇▇-Cologne"), California Water Code Section 13000 et seq.;
the Clean Water Act ("CWA"), 33 U.S.C. Section 1251 et seq.; the
Safe Drinking Water Act, 42 U.S.C. Section 300f et seq.; the
Clean Air Act ("CAA"), 42 U.S.C. Section 7401 et seq.; the
California Air Pollution Control Law, California Health and
Safety Code Section 39000 et seq.; and in the plans, rules,
regulations or ordinances adopted, or other criteria and
guidelines promulgated pursuant to the preceding laws or other
similar laws, regulations, rule or ordinance now or hereafter in
effect (collectively the "Environmental Laws"); and any other
substances, constituents or wastes subject to environmental
regulations under any applicable federal, state or local law,
regulation or ordinance now or hereafter in effect.
12.1.2. "Environmental Conditions" means
conditions of the environment, including the ocean, natural
resources (including flora and fauna), soil, surface water,
ground water, any present or potential drinking water supply,
subsurface strata or the ambient air, relating to or arising out
of the use, handling, storage, treatment, recycling, generation,
transportation, release, spilling, leaking, pumping, pouring,
emptying, discharging, injecting, escaping, leaching, disposal,
dumping or threatened release of Hazardous Materials by Tenant or
Tenant's successors in interest, agents, representatives,
employees or independent contractors. With respect to claims by
employees, Environmental Conditions also includes the exposure of
persons to Hazardous Materials within a workplace.
12.1.3. "Environmental Noncompliance" includes,
without limitation: (1) the release or threatened release of any
Hazardous Materials into the environment, any storm drain, sewer,
septic system or publicly owned treatment works, in violation of
any effluent or emission limitations, standards or other criteria
or guidelines established by any federal, state or local law,
regulation, rule, ordinance, plan or order; (2) any noncompliance
of physical structure, equipment, process or facility with the
requirements of building or fire codes, zoning or land use
regulations or ordinances, conditional use permits and the like;
(3) any noncompliance with federal, state or local requirements
governing occupational safety and health; (4) any facility
operations, procedures, designs, etc. which do not conform to the
statutory or regulatory requirements of the CAA, the CWA, the
TSCA, the RCRA, the HSAA, the HWCL, ▇▇▇▇▇▇-Cologne or any other
Environmental Laws intended to protect public health, welfare and
the environment; (5) the failure to have obtained permits,
variances or other authorizations necessary for the legal
operation of any equipment, process, facility or any other
activity; (6) the operation of any facility or equipment in
violation of any permit condition, schedule of compliance,
administrative or court order and the like.
12.1.4. "Claims" shall include, without
limitation; claims, demands, suits, causes of action for personal
injury or property damage (including any depreciation of property
values, lost use of property, consequential damages arising
directly or indirectly out of Environmental Conditions); actual
or threatened damages to natural resources; claims for the
recovery of response costs, or administrative or judicial orders
directing the performance of investigations, response or remedial
actions under CERCLA, RCRA, HSAA, RCRA or other Environmental
Laws; a requirement to implement "corrective action" pursuant to
any order or permit issued pursuant to RCRA; claims for
restitution, contribution or equitable indemnity from third
parties or any governmental agency; fines, penalties, liens
against property; claims for injunctive relief or other orders or
notices of violation from federal, state or local agencies or
courts; and, with regard to any present or former employees,
exposure to or injury from Environmental Conditions.
12.1.5. "Expenses" shall include any liability,
loss, cost or expense including, without limitation, costs of
investigation, cleanup, remedial or response action, the costs
associated with posting financial assurances for the completion
of response, remedial or corrective actions, the preparation of
any closure or other necessary or required plans or analyses, or
other reports or analyses submitted to or prepared by regulating
agencies, including the cost of health assessments,
epidemiological studies and the like, retention of engineers and
other expert consultants, legal counsel, capital improvements,
operation and maintenance testing and monitoring costs, power and
utility costs and pumping taxes or fees, and administrative costs
incurred by governmental agencies.
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12.2. LEGAL REQUIREMENTS. Legal requirements shall mean all
present and future laws (including but not limited to environmental
laws) and all covenants, restrictions and conditions now or hereafter
of record which may be applicable to Tenant or to the Premises or to
the use, manner of use, occupancy, possession, operation, maintenance,
alteration, repair, or restoration of the Premises, even if compliance
therewith necessitates structural changes within the Premises or
results in interference with the use or enjoyment of the leased
Premises. Tenant shall at its expense comply with and conform to all
legal requirements including all applicable environmental laws.
12.3. ENVIRONMENTAL INDEMNIFICATION BY TENANT. Tenant agrees
to indemnify, defend by counsel acceptable to Landlord, and hold
harmless Landlord, its subsidiaries, affiliates, successors and
assigns and their respective directors, officers, employees,
shareholders, representatives and agents, from and against and in
respect of any and all Claims, damages (including, without limitation,
diminution in value), losses, liabilities and Expenses, lawsuits,
deficiencies, interest, penalties, attorneys' fees and all amounts
paid in defense or settlement of the foregoing whether or not arising
out of third-party claims, which may be imposed upon or incurred by
Landlord or asserted against Landlord by any other party or parties
(including Governmental Entities), in connection with any
Environmental Conditions or the remediation of any Environmental
Conditions (whether now known or hereafter discovered), or any
Environmental Noncompliance arising out of, resulting from, or
attributable to, the assets, business, or operations of Tenant at the
Premises, including without limitation any Claims, Expenses, losses,
liabilities, etc. resulting from the alleged exposure of any person to
Environmental Conditions, provided that such Environmental Conditions
or exposure resulted from activities of Tenant or Tenant's agents,
representatives, employees or independent contractors. Tenant's
obligations pursuant to this Section shall exist regardless of whether
Landlord is alleged or held to be strictly and/or jointly and
severally liable.
12.3.1. Landlord shall defend, indemnify, and
hold Tenant harmless from and against any and all liability,
damages, loss, suits, claims, actions, costs and expenses,
including without limitation any attorneys' fees, arising from
any contamination of the Premises (including the underlying
ground water and land) by any Hazardous Materials, where such
contamination was not caused by Tenant or Tenant's agents,
representatives, employees or independent contractors. Landlord
warrants that as of the commencement of this Lease to the best of
his knowledge the Premises are free from contamination by any
Hazardous Materials. The provisions of this paragraph shall
survive the termination of this Lease.
12.4. TENANT'S REMEDIAL ACTION RESPONSIBILITY.
12.4.1. It Tenant knows, or has reasonable cause
to believe, that a Hazardous Material or Environmental Condition
(other than previously consented to by Landlord) has come to be
located in, on, under or about the Premises, Tenant shall
immediately notify Landlord in writing of the condition.
12.4.2. In the event that Environmental
Noncompliance and/or Environmental Conditions resulting from the
activities of Tenant or Tenant's agents, representatives,
employees or independent contractors is discovered or alleged to
exist at the Premises subsequent to the date hereof, Tenant will
pay all reasonable costs incurred by Landlord in defending and
correcting the conditions which constitute Environmental
Noncompliance and/or Environmental Conditions.
12.4.3. Tenant shall be exclusively responsible
for the integrity of all facilities at the Premises which handle,
treat, store, recycle or dispose of Hazardous Materials. Any
incident following the date hereof which results in an actual or
threatened release of Hazardous Materials into the environment,
or which results or may result in any Environmental Conditions or
Environmental Noncompliance, or which contributes or may
contribute to known or unknown Environmental Conditions or
Environmental Noncompliance, shall be included in Tenant's
indemnification obligations to Landlord under this Article.
12.5. INSPECTION RIGHTS. Landlord shall have the right to
enter and inspect the Premises and the business operations of Tenant,
upon reasonable notice and in a manner so as not to interfere
unreasonably with the conduct of Tenant's business, to investigate the
possibility of any Environmental Condition or Environmental
Noncompliance at the Premises. Landlord may exercise this right at
its sole discretion. During such inspection, Landlord shall have the
right to take such samples and conduct such tests as it may determine
in its sole discretion to be necessary or advisable. The incurrence
by Landlord of any expense under the provisions of this Section 12.4
shall not impair any claim for indemnification Landlord may have under
the provisions of this Section 12.
12.6. SURVIVAL OF ARTICLE. The provisions of this Section 12
shall survive, and remain in full force and effect after, the
termination or expiration of this Lease.
13. LANDLORD'S RIGHT TO ENTRY AND TO
RELOCATE PREMISES.
13.1. RIGHT TO ENTRY. Landlord and Landlord's agents have
the right to enter the Premises at any and all reasonable times to
inspect the same, to supply janitorial service and any other service
to be provided by Landlord to Tenant hereunder, to show the Premises
to prospective purchasers or tenants, to post notices of
nonresponsibility, to alter, improve or repair the Premises or any
other portion of the Building, all without such entry constituting any
actual or constructive eviction of Tenant and without abatement of
rent. Landlord may, in order to carry out such purposes, erect
scaffolding and other necessary structures where reasonably required
by the character of the work to be performed, provided that Landlord
shall use reasonable efforts to minimize interference with the
business of Tenant. Landlord may at any time, place on or about the
Premises or the Building any ordinary "For Sale" signs, and Landlord
may at any time during the last 120 days of the term hereof place on
or about the Premises any ordinary "For Lease" signs. Tenant hereby
waives any claim for damages, for any injury or inconvenience to or
interference with Tenant's business, any loss of occupancy or quiet
enjoyment of the Premises, and any other loss in, upon and about the
Premises. Landlord's rights pursuant to this Section 13.1 shall be
subject to the condition that exercise of any of such rights shall not
unreasonably interfere with Tenant's use of the Premises.
14
14. CONSTRUCTION OF PREMISES.
As promptly as may be reasonably possible, subject to delays arising from
causes beyond Landlord's reasonable control, Landlord shall commence and
complete such work ("Landlord's Work"), if any, as shall be necessary to
complete the construction of the Premises in conformity with the description of
Landlord's Work set forth in Exhibit "D" attached hereto. Landlord's Work in
the Premises shall be in conformity with Exhibit "D," and Landlord's Work shall
be deemed approved by Tenant in all respects when Tenant occupies the Premises,
except as to items which are not completed or do not conform to Exhibit "D" and
as to which Tenant shall give Landlord written notice of Tenant's reasonable
disapproval within ten (10) days after Tenant occupies the Premises. It is
acknowledged and agreed that there shall be no Landlord's Work with respect to
the Premises except as set forth in Exhibit "D".
15. SIGNS.
Tenant shall not place any sign upon the Premises or the Project without
Landlord's prior written consent. Under no circumstances shall Tenant place a
sign on any roof of the Project, or upon or visible from the Common Areas or the
exterior of the Building.
16. SECURITY.
Tenant acknowledges that it has been advised by Landlord to satisfy itself
with respect to the condition of the Premises from a security standpoint.
Tenant has made such an investigation as it deems necessary with reference to
security matters. Tenant expressly assumes all responsibility for the
protection of the Premises, Tenant, its employees, agents, invitees, contractors
and their property from the acts of third parties.
17. EMINENT DOMAIN.
If the Premises or any portion thereof or the Project are taken under the
power of eminent domain, or sold under the threat of the exercise of said power,
this Lease shall terminate as to the part so taken as of the date the condemning
authority takes title or possession, whichever first occurs; provided that if so
much of the Premises or the Project are taken by such condemnation as would
substantially and adversely affect the operation and profitability of Tenant's
business conducted from the Premises, Tenant shall have the option, to be
exercised only in writing within thirty (30) days after Landlord shall have
given Tenant written notice of such taking (or in the absence of such notice,
within thirty (30) days after the condemning authority shall have taken
possession), to terminate this Lease as of the date the condemning authority
takes such possession. If Tenant does not terminate this Lease in accordance
with the foregoing, this Lease shall remain in full force and effect as to the
portion of the Premises remaining, except that the rent and Tenant's share of
Operating Expenses shall be reduced in the proportion that the floor area of the
Premises taken bears to the total floor area of the Premises. Common Areas
taken shall be excluded from the Common Areas usable by Tenant and no reduction
of rent shall occur with respect thereto or by reason thereof. Landlord shall
have the option in its sole discretion to terminate this Lease as of the taking
of possession by the condemning authority, by giving written notice to Tenant of
such election within thirty (30) days after receipt of notice of taking by
condemnation of any part of the Premises or the Project. Any award for the
taking of all or any part of the Premises or the Project under the power of
eminent domain or any payment made under threat of the exercise of such power
shall be the property of Landlord, whether such award shall be made as
compensation for diminution in value of the leasehold or for the taking of the
fee, or as severance damages; provided, however, that Tenant shall be entitled
to any separate award for loss of or damage to Tenant's trade fixtures,
removable personal property or for damages for cessation or interruption of
Tenant's business.
In the event that this Lease is not terminated by reason of such
condemnation, Landlord shall to the extent of severance damages received by
Landlord in connection with such condemnation, repair any damage to the Premises
caused by such condemnation except to the extent that Tenant has been reimbursed
therefor by the condemning authority. Tenant shall pay any amount in excess of
such severance damages required to complete such repair.
18. SUBORDINATION.
This Lease and any Option granted hereby shall be, at Landlord's option,
either superior or subordinate to any mortgage or deed of trust that may exist
or hereafter be placed upon the Building or any part thereof and to any and all
advances to be made thereunder and to the interest thereon and to all renewals,
replacements and extensions thereof. Tenant shall, upon written demand by
Landlord, execute such instruments as may be required at any time and, from time
to time, to subordinate the rights and interests of Tenant under this Lease to
the lien of any such mortgage or deed of trust, or, if requested by Landlord, to
subordinate any such mortgage or deed of trust to this Lease. Provided,
however, that Tenant shall, in the event any proceedings are brought for the
foreclosure of any such mortgage or deed of trust, attorn to the purchaser upon
foreclosure sale or sale under power of sale, and shall recognize such purchaser
as Landlord under this Lease.
19. ESTOPPEL CERTIFICATE.
Provided the information contained therein is true, Tenant shall at any
time and, from time to time, upon not less than fifteen (15) days' prior written
notice from Landlord execute, acknowledge and deliver to Landlord a statement in
writing (a) certifying 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 dates to
which the rent and any other charges are paid in advance, if any, (b)
acknowledging that there are not, to Tenant's knowledge, any uncured default on
the part of Landlord, or specifying such defaults if any are claimed, and (c)
containing any other information that Landlord may reasonably require. Any such
statement may be relied upon conclusively by any prospective purchaser or
encumbrancer of the Building. Tenant's failure to deliver such statement within
such time shall be conclusive upon Tenant (a) that this Lease is in full force
and effect, without modification, except as may be represented by Landlord, (b)
that there are no uncured defaults in Landlord's performance, (c) that not more
than one month's rent has been paid in advance, and (d) that any other
information included in such statement by Landlord is true and correct.
20. ATTORNEYS' FEES.
If either party named herein brings an action to enforce the terms hereof
or declare rights hereunder, the prevailing party in any such action, trial or
appeal thereon, shall be entitled to reasonable attorneys' fees to be paid by
the losing party as fixed by the court in the same or a separate suit, and
whether or not such action is pursued to decision or judgment. The attorneys'
fee award shall not be computed in accordance with any court fee schedule, but
shall be such as to fully reimburse all attorneys' fees reasonably incurred in
good faith. Landlord shall be entitled to reasonable attorneys' fees and all
other costs and expenses incurred in the preparation and service of notices of
default and consultations in connection therewith, whether or not a legal action
is subsequently commenced in connection with such default.
15
21. PARKING.
So long as Tenant is not in default, and subject to such rules and
regulations as may be established by Landlord from time to time, Tenant shall be
entitled to use, on a monthly basis, the number of parking spaces in the
Project's on-site parking facilities specified in the Basic Lease Provisions.
Landlord shall have the right to designate the location of such parking spaces
and may reserve certain spaces from Tenant's use, as Landlord, in its sole
discretion, may determine.
22. NOTICE.
22.1. MANNER OF SERVICE. All notices, demands or requests
from one party to another shall be in writing and may be personally
delivered or sent by mail, certified or registered, postage prepaid,
to the addresses specified in the Basic Lease Provisions.
22.2. CHANGE OF PLACE OF SERVICE. Each party shall have the
right, from time to time, to designate a different address by notice
given in conformity with this Section to the other party.
23. HOLDING OVER BY TENANT.
Tenant agrees upon the expiration or termination of this Lease, immediately
and peaceably to yield up and surrender the Premises; notice to quit or vacate
is hereby expressly waived. Tenant shall be liable to Landlord for any and all
damages incurred by Landlord as the result of any failure by Tenant to timely
surrender possession of the Premises as required herein. If Tenant, with
Landlord's consent, remains in possession of the Premises or any part thereof
after the expiration of the Term hereof, such occupancy shall be a tenancy from
month to month upon all the provisions of this Lease pertaining to the
obligations of Tenant, except that the rent payable shall be one hundred
twenty-five percent (125%) of the rent payable immediately preceding the
termination date of this Lease, and all options, if any, granted under the terms
of this Lease shall be deemed terminated and of no further effect during said
month to month tenancy.
24. WAIVER.
No waiver by Landlord of any provision hereof shall be deemed a waiver of
any other provision hereof or of any subsequent breach by Tenant of the same or
any other provision. Landlord's consent to, or approval of, any act shall not
be deemed to render unnecessary the obtaining of Landlord's consent to or
approval of any subsequent act by Tenant. The acceptance of rent hereunder by
Landlord shall not be a waiver of any preceding breach by Tenant of any
provision hereof, 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.
25. TIME OF THE ESSENCE.
TIME IS OF THE ESSENCE OF THIS LEASE WITH RESPECT TO THE OBLIGATIONS TO BE
PERFORMED UNDER THIS LEASE.
26. SUCCESSORS AND ASSIGNS.
The covenants and conditions herein contained shall, subject to the
provisions as to assignments, apply to and bind the heirs, successors,
executors, administrators and assigns of the respective parties hereof. If more
than one person or entity is indicated as Tenant herein, each person or entity
subscribing as Tenant shall be jointly and severally liable for all obligations
of Tenant hereunder.
27. LANDLORD'S RESERVATIONS.
In addition to its other rights retained or reserved herein, Landlord shall
have the right to change the name, number or designation of the Building or the
Project without notice or liability to Tenant. In addition, Tenant shall not,
without Landlord's prior written consent, use the name of the Building or the
Project for any purpose other than as the address of the business to be
conducted by Tenant at the Premises, and in no event shall Tenant acquire any
rights in or to such names. Landlord shall have the right to (a) at Tenant's
expense, provide and install Building standard graphics or art on the door to
the Premises and/or such portions of the Common Areas as Landlord shall
reasonably deem appropriate; (b) permit any Tenant the exclusive right to
conduct any business as long as such exclusive does not conflict with any rights
expressly given herein; (c) place such signs, notices or displays as Landlord
reasonably deems necessary or advisable upon the roof, exterior of the buildings
or the Project or on pole signs in the Common Areas; (d) reasonably designate,
limit, restrict and control any business and any service in or to the Building
or its tenants; (e) keep, and to use in appropriate instances, keys to all doors
into and within the Premises. Tenant hereby agrees that no locks shall be
changed or added without the prior written consent of Landlord. Landlord
reserves to itself the right, from time to time, to grant such easements, rights
and dedications that Landlord deems necessary or desirable and to cause the
recordation of Parcel Maps and restrictions, so long as such easements, rights,
dedications, Maps and restrictions do not unreasonably interfere with the use of
the Premises by Tenant. Tenant shall sign any of the aforementioned documents
within ten (10) days after written request by Landlord, and failure to do so
shall constitute a material default under this Lease by Tenant without the need
for further notice to Tenant.
28. BROKERAGE COMMISSION.
With the exception of the real estate brokerage commission, if any, payable
to the party identified in the Basic Lease Provisions, pursuant to separate
written agreement with Landlord, and which commission Landlord hereby agrees to
pay, Tenant and Landlord each represent and warrant to the other that neither
has had any dealings with any person, firm, broker or finder in connection with
the negotiation of this Lease and/or the consummation of the transaction
contemplated hereby, and no other broker or other person, firm or entity is
entitled to any commission or finder's fee in connection with said transaction
and Tenant and Landlord do each hereby indemnify and hold the other harmless
from and against any costs, expenses, attorneys' fees or liability for
compensation or charges which may be claimed by any such unnamed broker, finder
or other similar party by reason of any dealings or actions of the indemnifying
party.
29. WAIVER OF RIGHT TO JURY TRIAL.
Landlord and Tenant each waives the right to trial by jury.
30. GOVERNING LAW.
This Lease shall be governed by, construed and enforced in accordance with
the laws of the State of California.
16
31. CAPTIONS AND INTERPRETATIONS.
The section and paragraph captions contained in this Lease are for
convenience only and shall not be considered in the construction or
interpretation of any provision hereof.
32. SEVERABILITY.
If any term, covenant, condition or provision of this Lease is held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the provisions shall remain in full force and effect and shall in
no way be affected, impaired or invalidated.
33. LEASE NOT EFFECTIVE UNTIL EXECUTED.
Submission by Landlord of this Lease for examination or signature by Tenant
shall not constitute an option and this Lease shall not become effective until
executed by both Tenant and Landlord and delivery of the fully executed
instrument to such parties. This Lease shall not be deemed to be executed by
Landlord until signed by an authorized officer of Landlord.
34. EXHIBITS AND ADDENDA TO LEASE.
All Exhibits or Addenda referenced in this Lease (or which are executed
concurrently herewith and attached hereto and refer to this Lease) are
incorporated herein by reference and shall constitute a part of this Lease.
35. RECORDATION OF LEASE.
Neither this Lease nor any Memorandum hereof shall be recorded without the
express written consent of Landlord.
36. ENTIRE AGREEMENT.
This Lease constitutes the entire agreement between the parties hereto
pertaining to the subject matter hereof, fully supersedes any and all prior
negotiations, understandings, representations, warranties and agreements between
the parties hereto, or any of them, pertaining to the subject matter hereof, and
may be modified only by written agreement, signed by all of the parties hereto.
37. COVENANTS AND REPRESENTS.
Notwithstanding anything to the contrary contained in this Lease:
37.1. LANDLORD. Landlord covenants and represents to Tenant
that it has good and marketable title to the Project at the
commencement of this Lease, free and clear of all ground leases, liens
and encumbrances affecting the Premises or the rights granted to
Tenant.
37.2. RECIPROCAL. Landlord and Tenant covenant and represent
that they have full and complete authority to enter into this Lease
under all of the terms, covenants and provisions set forth herein and
so long as Tenant and Landlord perform each and every term, provision,
and condition herein contained on the part of Tenant and Landlord to
be performed. Tenant may peacefully and quietly enjoy the Premises
without hindrance or molestation by Landlord or Landlord's agents.
LANDLORD AND TENANT HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND
EACH TERM AND PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF
THIS LEASE SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE
PARTIES HEREBY AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE
TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE
INTENT AND PURPOSE OF LANDLORD AND TENANT WITH RESPECT TO THE
PREMISES.
IN WITNESS WHEREOF, the parties hereto have executed this Lease the
day and year first hereinabove written.
EXECUTED AT SAN DIEGO, CA EXECUTED AT
----------------------------------- ---------------------------------
ON JANUARY 21, 1998 ON
----------------------------------- ---------------------------------
BY TENANT: BY LANDLORD:
MAXIM PHARMACEUTICALS BRITISH PACIFIC PROPERTIES
a Delaware Corporation a California Corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ By:
-------------------------------- -------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇ Name:
------------------------------ ------------------------------
Title: Chief Financial Officer Title:
----------------------------- -----------------------------
By: By:
-------------------------------- --------------------------------
Name: Name:
------------------------------ --------------------------------
Title: Title:
----------------------------- --------------------------------
17
EXHIBIT "A"
FLOOR PLAN WITH PREMISES DEPICTED.
EXHIBIT "B"
RULES AND REGULATIONS FOR BRITISH PACIFIC CENTRE
1. No tenant or its agents or employees shall loiter in the mall areas or
other Common Areas of the Building, nor shall they in any way obstruct the
sidewalks, entry passages, pedestrian passageways, driveways, entrances and
exits to the Building, and they shall use the same only as passageways to
and from their respective premises. Landlord reserves the right to exclude
or expel from the Building any person who, in the judgment of Landlord, is
intoxicated or under the influence of liquor or drugs, or who shall in any
manner do any act in violation of the rules and regulations of the
Building.
2. No sash doors, sashes, windows, glass doors, lights and skylights that
reflect or admit light into the Common Areas of the Building shall be
covered or obstructed by any tenant, and doors leading into the Common
Areas from tenant premises shall not be left open by any tenant.
3. Water closets and urinals shall not be used for any purpose other than
those for which they were constructed, and no rubbish, newspapers, food or
other substances of any kind shall be thrown into them. No tenant or his
agents and employees shall throw or discard cigar or cigarette butts or
other substances or litter of any kind in or about the Building, except in
receptacles placed therein for such purposes by Landlord or governmental
authorities. All garbage, including wet garbage, refuse or trash shall be
placed by each tenant in the receptacles provided by Landlord for that
purpose and only during those times prescribed by Landlord.
4. Tenants shall not ▇▇▇▇, drive nails, screw or drill into, paint or in any
way deface any exterior walls, roof foundations, bearing walls or pillars
without the prior written consent of Landlord. No boring or cutting for
wires shall be allowed, except with the consent of Landlord. The expense
of repairing any breakage, stoppage or damage resulting from a violation of
this rule or the preceding rule shall be borne by the tenant violating or
responsible for the violation of such rule.
5. Tenant shall not alter any lock or install new or additional locks or bolts
in or about the Premises, without the written approval of Landlord.
6. No curtains, blinds, screens, shades or other window coverings shall be
attached to or hung in any window visible from the exterior of the Premises
without the prior written consent of Landlord.
7. No tenant shall do anything in any premises, or bring or keep anything
therein, which will in any way increase or tend to increase the risk of
fire or the rate of fire insurance or which shall conflict with applicable
law, rules or regulations established by any governmental body or official
having jurisdiction, the regulations of the fire department or the
provisions or requirements of any insurance policy on such premises or any
part thereof. Tenant shall not use any machinery in its premises, even
though the installation may have been originally permitted, which may cause
any unreasonable noise or jar, or tremor to the floors or walls, or which
by its weight might injure the walls or floors of such premises or any
other portion of the Building.
8. Landlord may limit the weight, size and position of all safes, fixtures and
other equipment used in any premises. In the event any tenant shall
require extra heavy equipment, such tenant shall notify Landlord of such
fact and shall pay the cost of any structural bracing required to
accommodate the same. All damage done to such premises or to any other
portion of the Building resulting from installing, removing or maintaining
extra heavy equipment shall be repaired at the expense of the tenant which
maintains such equipment.
9. No tenant or its agents and employees shall make or permit any loud,
unusual or improper noises in the Building, nor interfere in any way with
other tenants or those having business with them, nor bring into nor keep
within the Building any animal or bird (with the exception of the
authorized pet store), or any bicycle or other vehicle, except such
vehicles as tenants are permitted to park in the Building parking lot, and
shall park only in the areas designated from time to time for employee
parking generally. No aerial shall be erected on the roof or exterior walls
of any premises, or on the ground, without in each instance, the written
consent of Landlord. Any aerial so installed without such written consent
shall be subject to removal without notice at any time.
10. All freight must be moved into, within and out of tenant premises only
during such hours and according to such regulations and may be posted from
time to time in Landlord's general offices.
11. Tenant shall not employ any service or contractor for services or work to
be performed in the Building, except as approved by Landlord.
12. Tenant shall return all keys at the termination of its tenancy and shall be
responsible for the cost of replacing any keys that are lost.
13. Tenant shall not suffer or permit smoking or carrying of lighted cigars or
cigarettes in areas designated by Landlord or by applicable governmental
agencies as non-smoking areas.
14. Tenant shall not use any method of heating or air conditioning other than
as provided by Landlord.
15. Tenant shall not install, maintain or operate any vending machine upon the
Premises without Landlord's written consent.
16. The Premises shall not be used for lodging, manufacturing or food
preparation.
17. Tenants are required to observe all security regulations issued by Landlord
and to comply with instructions and/or directions of the duly authorized
security personnel for the protection of the Building and all tenants
therein. Access by any tenant to his premises or the Building before or
after hours of operation of the Building shall be subject to clearance by
the security personnel of the Building and to compliance with such
procedures as may be imposed by such personnel, including presentation of
identification to such personnel.
18. No waiver of any rule or regulation by Landlord shall be effective unless
expressed in writing and signed by Landlord.
19. Landlord reserves the right, but shall not have the obligation, to close
and keep locked any and all entrances and exit doors and gates of the
Building and gates or doors closing the parking areas thereof during such
hours as Landlord may deem to be advisable for the adequate protection of
the Building and all tenants therein.
B-1
20. Parking areas shall be used only for parking by vehicles no longer than
full size, passenger automobiles.
21. Tenant shall not permit or allow any vehicles that belong to or are
controlled by Tenant or Tenant's employees, suppliers, shippers, customers,
or invitees to be loaded, unloaded, or parked in areas other than those
designed by Landlord for such activities.
22. Parking stickers or identification devices shall be the property of
Landlord and be returned to Landlord by the holder thereof upon termination
of the holder's parking privileges. Tenant will pay such replacement
charge as is reasonably established by Landlord for the loss of such
devices.
23. Landlord reserves the right to refuse the sale of monthly identification
devices to any person or entity that willfully refuses to comply with the
applicable rules, regulations, laws and/or agreements.
24. Landlord reserves the right to relocate all or a part of parking spaces
from floor to floor, within one floor, and/or to reasonably adjacent
offsite location(s), and to reasonably allocate them between compact and
standard size spaces, as long as the same complies with applicable laws,
ordinances and regulations.
25. Users of the parking area will obey all posted signs and park only in the
areas designated for vehicle parking.
26. Unless otherwise instructed, every person using the parking area is
required to park and lock his own vehicle. Landlord will not be
responsible for any damage to vehicles, injury to persons or loss of
property, all of which risks are assumed by the party using the parking
area.
27. Validation, if established, will be permissible only by such method or
methods as Landlord and/or its licensee may establish at rates generally
applicable to visitor parking.
28. The maintenance, washing, waxing or cleaning of vehicles in the parking
structure or Common Areas is prohibited.
29. Tenant shall be responsible for seeing that all of its employees, agents
and invitees comply with the applicable parking rules, regulations, laws
and agreements.
30. Such parking use as is herein provided is intended merely as a license only
and no bailment is intended or shall be created hereby.
31. Landlord reserves the right at any time to change or rescind any one or
more of these rules and regulations or to make such other and further
reasonable rules and regulations as in Landlord's judgment may from time to
time be necessary for the management, safety, care and cleanliness of the
Building, for the preservation of good order therein and for the
convenience of tenants and visitors to the Building. Any such amendments,
deletions or additions to these rules and regulations shall be effective
immediately upon delivery of written notice thereof to tenants.
32. Each tenant shall abide by any additional rules or regulations which are
ordered or requested by any governmental or military authority.
33. Landlord shall not be responsible to any tenant or any other person for the
non-observance or violation of these rules and regulations by any other
tenant or other person.
34. A copy of these rules and regulations shall be attached to and form a part
of each tenant lease at the Building. Each tenant who executes a lease of
space at the Building shall be deemed to have read these rules and
regulations and to have agreed to abide by them as a condition to its
occupancy of space at the Building.
In the event of any conflict between these rules and regulations, or any
amendments or additions thereto, and the provision of any tenant's lease, such
lease provisions shall control.
B-2
EXHIBIT "C"
STANDARDS FOR UTILITIES AND SERVICES
Landlord shall provide the utilities and services set forth in this Exhibit
at all times during the term of the Lease, subject to the provisions of the
Lease concerning Landlord's inability to supply such utilities and services due
to causes beyond Landlord's control. Landlord reserves the right to adopt such
reasonable nondiscriminatory modifications and additions to the following
standards as it deems necessary and appropriate from time to time. Landlord
shall not be obligated to supply any utilities or services to Tenant at any time
during which Tenant is in default under the terms of the Lease.
1. Landlord shall provide automatic elevator services on Monday through
Friday from 7:00 a.m. to 6:00 p.m. and on Saturday from 9:00 a.m. to 1:00 p.m.;
provided, however, that Landlord shall not be obligated to provide such elevator
services on the following federal holidays: New Year's Day, President's Day,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day, Day after
Thanksgiving, and Christmas Day (such times referred to in this Exhibit as
"Business Hours"). At all other times Landlord shall provide at least one
elevator operated by security personnel or by an automatic security access
system.
2. Landlord shall provide to the Premises, during Business Hours (and at
other times for an additional charge to be fixed by Landlord), heating,
ventilation, and air conditioning ("HVAC") when and to the extent in the
judgment of Landlord any such sources may be required for the comfortable
occupancy of the Premises for general office purposes. Landlord shall not be
responsible for room temperatures and conditions in the Premises if the lighting
or receptacle load for Tenant's equipment and fixtures exceed those listed in
Section 3 of this Exhibit, if the Premises are used for other than general
office purposes or if the building standard blinds and curtains in the Premises
are not used and/or closed to screen the rays of direct sunlight. If any
lights, machines or equipment (excluding desktop computers) are used by Tenant
in the Premises which materially affect the temperature otherwise maintained by
the Building HVAC or generate substantially more heat in the Premises than would
be generated by the Building standard lights and usual fractional horsepower
office equipment, Landlord shall have the right to install any machinery and
equipment which Landlord reasonably deems necessary to restore temperature
balance (including, without limitation, modifications to the standard air
conditioning equipment) and the cost thereof, including the cost of installation
and any additional cost of operation and maintenance occasioned thereby, shall
be paid by Tenant to Landlord upon demand by Landlord.
3. Landlord shall furnish to the Premises during Business Hours electric
current for routine lighting and operation of general office machines such as
typewriters, dictating equipment, desk model adding machines, and similar
devices which operate on 110 volt alternating current electrical power with
demands, wattages and ampere draws which do not exceed the reasonable capacity
of building standard office lighting and receptacles and are not in excess of
limits imposed or recommended by governmental authorities. Landlord shall
replace bulbs and/or ballasts in building standard florescent lighting fixtures
within the Premises. Tenant shall be responsible for replacing all other non
building standard items (non standard bulbs, ballasts, ceiling tiles, etc.).
Landlord shall furnish to the lavatories within the Premises or within the
Common Areas water for normal lavatory and drinking purposes.
4. No special electrical equipment, air conditioning systems, heating
systems, or space heaters shall be installed nor shall any changes be made the
HVAC, electrical or plumbing systems in the Building without the prior written
approval of Landlord in accordance with the provisions of the Lease governing
alterations requested by Tenant. Tenant shall not without the prior written
consent of Landlord, which consent shall not be unreasonably withheld, use any
apparatus, machines or devices in the Premises (including, without limitation,
photocopier or duplicating machines, computers, printers, vending machines, or
other equipment) which uses current in excess of 110 volts AC or which has a
demand, wattage or ampere draw which exceeds the electrical systems installed in
the Building or in any way which will increase the amount of electricity or
water usually supplied for the use of the Premises for general office purposes.
5. Landlord may impose reasonable conditions upon any consent for use of
any apparatus, machine or device which exceeds the limitations set forth in this
Exhibit. Tenant agrees to cooperate fully with Landlord at all times to abide
by all regulations and requirements which Landlord may prescribe for proper
functioning and protection of the Building HVAC, electrical and plumbing
systems. Tenant shall comply with all laws, statutes, ordinances and
governmental rules and regulations now in force or which may be enacted or
promulgated in connection with building services furnished to the Premises,
including, without limitation, any governmental rule or regulation relating to
the heating or cooling of the Building.
6. Landlord shall provide janitorial services to the Premises on each day
Sunday through Thursday (except for the above listed federal holidays) provided
the Premises are used exclusively for the uses permitted by the Lease and are
kept in reasonable order by Tenant. Tenant shall pay to Landlord any extra cost
for cleaning or removal of any rubbish or garbage to the extent the nature or
amount of such cleaning, refuse or garbage exceeds the amount which is generally
produced by use of the Premises for general office purposes.
EXHIBIT "D"
WORK LETTER
CONCURRENTLY WITH THE EXECUTION OF THIS WORK LETTER AGREEMENT (the "Work
Letter Agreement"), Landlord and Tenant have executed a Standard Form Lease (the
"Lease"), covering the Premises. Unless the context otherwise requires, the
terms defined in the Lease shall have the same meanings when used herein. This
Work Letter Agreement is incorporated into the Lease as Exhibit "D" thereto.
Tenant desires that certain work be performed by Landlord in the Premises to
make the Premises ready for Tenant.
NOW, THEREFORE, in consideration of the mutual covenants contained in the
Lease and in this Work Letter Agreement, Landlord and Tenant agree as follows:
1. DEFINITIONS.
34.1. "Approved Plans" are defined in Section 5.1 below.
34.2. "Estimated Work Cost" is defined in Section 4.2 below.
34.3. "Preliminary Plans" are defined in Section 3.1 below.
34.4. "Space Planner" shall mean Landlord's Space Planner.
34.5. "Contractor" shall mean Landlord's Contractor, Kohler
Kompany, and regardless of what other subcontractors may be
selected, all mechanical engineering and construction work
shall be performed by ▇▇▇▇▇▇▇ & Blanc.
34.6. "Standards" shall mean Landlord's usual specifications for
standard leasehold improvements in the Building.
34.7. "Tenant Improvements" shall mean all improvements made to
the Premises other than those that are physically in place
at the Premises as of the date of the execution of the
Lease.
34.8. "Tenant's Allowance" shall mean the sum of up to $7.00 per
usable square foot of the Premises, which shall be paid by
Landlord toward the cost of completion of the Tenant
Improvements. In no event shall Tenant's Allowance exceed
$75,936.00.
34.9. "Tenant's Programming Information" shall mean all
information necessary for the preparation of the Preliminary
Plans, including without limitation electrical requirements,
telephone, special heat generating equipment, plumbing
requirements, special finishes, number and sizes of offices,
number of secretarial stations and special data processing
requirements.
34.10. Tenant approval, authorization, consent or other required
action shall mean such action taken or authorized by Tenant.
Landlord shall have the right to rely on such approval,
authorization, consent or other action, until Tenant advises
Landlord in writing that some other person has such
authority.
34.11. Other terms are defined in this Work Letter Agreement. In
addition, terms defined in the Lease shall have the same
meanings where used herein, unless the context otherwise
requires.
35. SCHEDULE.
35.1. Landlord shall furnish to Tenant the Estimated Work Cost
within ten (10) days following Landlord's receipt of
Tenant's Preliminary Plans.
35.2. Tenant shall furnish to Landlord written notice of its
acceptance or rejection of the Estimated Work Cost within
five (5) days after receipt of same from Landlord.
35.3. If Tenant rejects the Estimated Work Cost, Tenant shall meet
with the Space Planner and Landlord's Contractor to revise
the Preliminary Plans within five (5) days after furnishing
such rejection to Landlord.
35.4. Landlord shall cause its architect and engineer to prepare,
and Landlord shall furnish to Tenant, construction drawings
and specifications for Tenant Improvements based on the
Preliminary Plans within seven (7) days following Tenant's
approval of the Preliminary Plans.
35.5. Tenant shall furnish to Landlord written notice of its
acceptance or rejection of the construction drawings within
five (5) days after receipt of same from Landlord.
35.6. Landlord shall prepare and furnish to Tenant a final cost
proposal based upon the Approved Plans within five (5) days
after Tenant's approval or deemed approval of the Approved
Plans.
35.7. If the final cost proposal is greater than the Estimated
Work Cost, Tenant shall furnish to Landlord written notice
of its acceptance or rejection of the final cost proposal
within five (5) days after receipt of same from Landlord.
35.8. Landlord shall cause its Contractor to complete the
construction of the Tenant Improvements within forty-five
(45) days following approval of the Approved Plans, and/or
approval of the final cost proposal, whichever is later.
36. PRELIMINARY PLANS.
D-1
36.1. Tenant shall furnish to Landlord Tenant's Programming
Information by the time set forth in Section 2.1 above.
Promptly thereafter, Tenant shall cause the Space Planner to
prepare preliminary space plans and specifications (the
"Preliminary Plans") for all leasehold improvements to be
constructed by Landlord for Tenant in the Premises, which
Preliminary Plans shall be sufficient to obtain a
preliminary cost estimate for the construction and
installation of the Tenant Improvements as shown thereon.
The cost of the preparation of Preliminary Plans shall be
charged against the Tenant's Allowance. Tenant shall
furnish the Preliminary Plans to Landlord by the time set
forth in Section 2.2 above. Landlord shall furnish the
Estimated Work Cost to Tenant by the time set forth in
Section 2.3 above.
36.2. In the preparation of Preliminary Plans and Approved Plans,
no deviation shall be permitted from the Standards with
respect to entry doors and hardware, entry graphics, ceiling
systems, life safety systems or perimeter window coverings.
Subject to Landlord's approval, Tenant may deviate from the
Standards as to partitions, floor coverings, wall finishes,
special lighting fixtures or other items as to which
deviations may be permitted, provided that no deviation
shall be of lesser quality than the Standards. Landlord
will not approve of any deviations which (a) do not conform
to applicable governmental regulations or are disapproved by
any governmental agency, (b) that require Building service
beyond the level normally provided to other tenants in the
Building, (c) that because of fabrication time or other
factors would delay the construction schedule (unless Tenant
agrees that the Commencement Date will not be extended by
such delay), or (d) that in Landlord's reasonable opinion
are of a nature or quality that are inconsistent with
Landlord's overall plan or objectives for the Building.
37. TENANT'S ALLOWANCE.
37.1. Landlord shall pay for the construction and installation of
the Tenant Improvements up to but not in excess of the
Tenant's Allowance. Tenant shall pay the cost of all Tenant
Improvements in excess of the Tenant's Allowance. The cost
of Tenant Improvements shall include the cost of all labor
and materials for the construction and installation of the
Tenant Improvements; the cost of all permits, licenses and
fees; all amounts paid to Landlord's Contractors under and
pursuant to contracts for the construction and installation
of the Tenant Improvements; all architectural, engineering,
space planning and other consultants' fees; all amounts paid
for mechanical drawings, plans, specifications, shop
drawings, designs and layouts; and incidental costs related
to the foregoing.
37.2. Landlord shall obtain an estimate of the cost of Tenant
Improvements as shown on the Preliminary Plans. Landlord
shall promptly notify Tenant of the amount of such cost
estimate plus the amount required to pay for the preparation
of architectural and engineering construction drawings for
the Tenant Improvements (the "Estimated Work Cost").
LANDLORD CANNOT AND DOES NOT GUARANTY THE ACCURACY OF SUCH
ESTIMATED WORK COST. If the Estimated Work Cost is less
than or equal to the Tenant's Allowance then Landlord shall
proceed in accordance with Section 5 below.
37.3. If the Estimated Work Cost is greater than the Tenant's
Allowance, then Tenant shall give written notice to Landlord
of Tenant's acceptance or rejection of the Estimated Work
Cost within the time period set forth in Section 2.4 above.
Unless Landlord receives Tenant's written rejection within
such period, the Estimated Work Cost shall be deemed
accepted by Tenant. If within such period Landlord receives
Tenant's written rejection of the Estimated Work Cost, then
within the time period set forth in Section 2.5 above,
Tenant shall meet with the Space Planner and the Landlord's
Contractor to revise the Preliminary Plans. At such
meetings, Tenant may, at Tenant's option, elect to eliminate
one or more items shown on the Preliminary Plans so as to
reduce the Estimated Work Cost. All costs of
Tenant-initiated changes requiring revisions, including
engineering, estimating, coordination, layout and printing
of drawings, specification changes and any other incidental
expenses, shall be included in the cost of the Tenant
Improvements. Following such revisions, Landlord shall
submit a new Estimated Work Cost to Tenant, and the same
procedure will be followed as set forth above until Tenant
has accepted a proposal. Any time consumed in revising
plans or in revising the Estimated Work Cost shall be
considered a Tenant Delay (as defined in Section 6.2 hereof)
and shall not delay the Commencement Date of the Lease. If
Tenant does not so elect to revise the Preliminary Plans, or
if Tenant does so elect but the Estimated Work Cost after
accounting for the revisions is still greater than the
Tenant's Allowance, or if Tenant otherwise approves or is
deemed to have approved of the Estimated Work Cost, then
Tenant shall forthwith deposit with Landlord an amount (the
"Construction Deposit") equal to the difference between the
Tenant's Allowance and the Estimated Work Cost (as the same
may have been revised), whereupon Landlord shall proceed in
accordance with Section 5 below.
37.4. The Tenant's Allowance shall be available only for the cost
of Tenant Improvements as described in Section 4.1 above.
If the cost of Tenant Improvements is less than the Tenant's
Allowance, the difference shall be retained by Landlord.
38. CONSTRUCTION OF TENANT IMPROVEMENTS.
38.1. Landlord shall cause its architect and engineer to prepare
construction drawings and specifications for the Tenant
Improvements based strictly on the Preliminary Plans within
the time period set forth in Section 2.6 above. Prior to
the commencement of construction, Tenant shall be given an
opportunity to review the construction drawings to confirm
that they conform to the Preliminary Plans. Tenant shall
have the time period set forth in Section 2.7 above in which
to give written notice to Landlord of Tenant's acceptance or
rejection of the construction drawings. Unless Landlord
receives Tenant's written rejection within such period, the
construction drawings shall be deemed approved by Tenant
("Approved Plans"). Such Approved Plans shall create no
responsibility or liability on the part of Landlord for the
completeness of such plans, their design sufficiency or
compliance with applicable statutes, ordinances or
regulations.
38.2. Within the time period set forth in Section 2.8 above,
Landlord shall prepare a final cost proposal based upon the
Approved Plans. The final cost proposal shall contain a
complete cost breakdown by line item, including without
limitation costs of architectural and engineering fees, plan
check and permit fees and other governmental fees, sales and
use taxes and all other costs to be expended by or on behalf
of Landlord in connection with the construction and
installation of the Tenant Improvements. If the final cost
proposal is less than or equal to the Estimated Work Cost,
Landlord shall authorize construction to commence. If the
final cost proposal is greater than the Estimated Work Cost,
Tenant shall have the time period set forth in Section 2.9
above in which to give written notice to Landlord of
D-2
Tenant's acceptance or rejection of the final cost
proposal. If Tenant rejects such cost proposal, Tenant
shall meet with Landlord, the Space Planner and Landlord's
Contractor to make revisions. All costs of Tenant-initiated
changes requiring such revisions shall be included in the
cost of the Tenant Improvements. Following such revisions,
Landlord shall submit a new cost proposal to Tenant, and the
same procedure will be followed as set forth above until
Tenant has accepted a proposal. Any time consumed in
revising the drawings or revising the estimated cost of
construction shall be considered a Tenant Delay and shall
not delay the Commencement Date of the Lease.
38.3. No work shall commence until the Approved Plans are filed
with the governmental agencies having jurisdiction thereof,
all required building permits have been obtained, and the
Space Planner has certified that to the best of its
knowledge, if performed in accordance with the Approved
Plans, the work will comply with all laws, codes,
regulations and statutes applicable to such work.
38.4. Landlord shall cause the Tenant Improvements to be
constructed or installed in the Premises by its designated
general Contractor in accordance with the Approved Plans.
38.5. Landlord shall have no obligation to Tenant for defects in
design, workmanship or materials, but shall use its
reasonable best efforts to enforce the Contractor's
obligations therefor and shall, as appropriate under the
terms of the Lease, assign to Tenant any manufacturer's
warranties with respect to the work.
38.6. Upon substantial completion of the construction and
installation of the Tenant Improvements, Tenant shall pay to
Landlord on demand the amount, if any, by which the actual
costs incurred by or on behalf of Landlord in connection
with the construction and installation of the Tenant
Improvements, including the costs of any authorized change
orders as defined below, exceeds the sum of the Tenant's
Allowance and any amounts previously delivered by Tenant to
Landlord pursuant to Section 4.3 above.
38.7. Any changes to the construction work may be made only upon
written request by Tenant approved in writing by Landlord,
or as may be required by any governmental agency, or as may
be required due to structural or unanticipated field
conditions, in each instance evidenced by a written change
order describing the change.
39. COMPLETION AND DELAYS.
39.1. The work to be performed by Landlord under this Work Letter
Agreement shall be deemed substantially completed on the
date on which Landlord delivers to Tenant either (a) an
occupancy permit (permanent or temporary) from the
governmental agency responsible for issuing the same, or (b)
a certification from Landlord's Space Planner stating that
the Premises are substantially complete and ready for
occupancy in accordance with the Approved Plans, or that any
remaining work fully described by the Space Planner on a
"punch list" thereafter to be completed with due diligence
by the Landlord's Contractor will not substantially
adversely affect Tenant's ability to occupy said Premises.
39.2. If Landlord is delayed in substantially completing any work
as a result of any of the following circumstances or events
("Tenant Delays"), the Commencement Date shall not be
deferred by reason of such delay, to wit:
39.2.1. Tenant's failure to furnish information in
accordance with Section 2 above;
39.2.2. Tenant's request for any special, long-lead
materials or installations as part of the Tenant
Improvements that do not conform to the Standards;
39.2.3. Tenant's changes in any drawings, plans or
specifications, after the date of submission of
the Approved Plans;
39.2.4. Any changes initiated by Tenant by reason of
Tenant's disapproval of cost proposals or
resulting in the preparation of revised cost
proposals;
39.2.5. Field changes to the construction work;
39.2.6. The delivery, installation or completion of any
Tenant-finish work performed by Tenant's employees
or agents;
39.2.7. The performance of any Additional Tenant Work, or
any failure to complete or delay in completion of
such work; or
39.2.8. Any other act or omission of Tenant.
39.3. If, for any reason, Landlord cannot complete the Tenant
Improvements by the Estimated Commencement Date, deliver
possession of the Premises to Tenant on the Estimated
Commencement Date, or perform any other covenant contained
in this Work Letter Agreement or in the Lease related to the
work described in this Work Letter Agreement, Landlord shall
not be in breach of this Work Letter Agreement or the Lease,
and shall not be subject to any liability therefor, nor
shall such failure affect the validity of this Lease or the
obligations of Tenant hereunder, except that in any such
case (unless caused by Tenant Delays), Tenant shall not be
obligated to pay rent or perform any other obligation of
Tenant under the terms of the Lease (other than payment and
performance due in advance of occupancy as provided in the
Lease or this Work Letter Agreement), until possession of
the Premises is tendered to Tenant.
40. GENERAL.
40.1. All drawings, space plans, plans and specifications for any
improvements or installations in the Premises are expressly
subject to Landlord's prior written approval. Any approval
by Landlord or Landlord's architects or engineers of any of
Tenant's drawings, plans or specifications which are
prepared in connection with construction of improvements in
the Premises shall not in any way bind Landlord or
constitute a representation or warranty by Landlord as to
the adequacy or sufficiency of such drawings, plans or
specifications, or the improvements to which they relate,
for any use, purpose or condition, but such approval shall
merely evidence the consent of Landlord to Tenant's
construction of improvements in the Premises in accordance
with such drawings, plans or specifications.
40.2. Any failure by Tenant to pay any amounts due hereunder shall
have the same effect under the Lease as a failure to pay
rent. Any such failure, or the failure by Tenant to perform
any of its other obligations hereunder, shall constitute an
event of default under the Lease, entitling Landlord to all
of its remedies under the Lease, at law and in equity.
D-3
IN WITNESS WHEREOF, the parties have executed this Work Letter Agreement,
at San Diego, California, concurrently with their execution of the Lease.
TENANT: LANDLORD:
MAXIM PHARMACEUTICALS, BRITISH PACIFIC PROPERTIES CORPORATION,
a Delaware Corporation a California corporation
By: By:
------------------------------ ------------------------------
Name: Name:
------------------------------ ------------------------------
Title: Title:
----------------------------- -----------------------------
By: By:
------------------------------ ------------------------------
Name: Name:
------------------------------ ------------------------------
Title: Title:
----------------------------- -----------------------------
D-4
TABLE OF CONTENTS
SECTION PAGE
1. PREMISES AND COMMON AREAS 1
1.1 Premises 1
1.2 Common Areas 1
1.3 Common Areas Rules and Regulations 1
1.4 Conditions of Premises 1
1.5 Changes to Common Areas 2
2. TERM 2
2.1 Length of Term 2
2.2 Commencement Date 2
3. RENT 2
3.1 Base Rent 2
3.2 Annual Increase to Base Rent 3
3.3 Additional Rent 3
3.4 Tenant's Charges 5
3.5 Late Charges 5
3.6 Interest on Past Due Obligations 5
3.7 Security Deposit 5
4. USE 6
4.1 Permitted Uses 6
4.2 Prohibited Uses 6
4.4 Compliance With Laws 6
4.5 Insurance Use Requirements 6
5. MAINTENANCE, REPAIR AND ALTERATION OF PREMISES 6
5.1 Maintenance and Repair 6
5.2 Alterations 6
5.3 Condition on Termination 7
6. UTILITIES AND SERVICES 7
6.1 Utilities and Services Furnished by Landlord 7
6.2 Utilities and Services Furnished by Tenant 7
6.3 Interruption of Service 7
7. INSURANCE AND INDEMNITY 7
7.1 Tenant's Liability Insurance 7
7.2 Tenant's Casualty Insurance 7
7.3 Form of Insurance Policies 8
7.4 Landlord Insurance 8
7.5 Waiver of Liability of Landlord 8
7.6 Indemnity by Tenant of Landlord 8
7.7 Waiver of Subrogation 8
8. DAMAGE OR DESTRUCTION 8
8.1 Definitions 8
8.2 Premises Damage; Premises Building Partial Damage 9
8.3 Building Total Destruction; Project Total Destruction 9
8.4 Damage Near End of Term 9
8.5 Abatement of Rent; Tenant's Remedies 9
8.6 Termination-Advance Payments 10
8.7 Waiver 10
8.8 Insurance Limitation 10
9. TAXES 10
10. ASSIGNMENT AND SUBLETTING 10
10.1 Prohibition of Assignment or Sublet 10
10.2 Procedure for Consent 10
10.3 Continuing Obligation of Tenant 11
10.6 Additional Terms and Conditions Applicable to Subletting 11
10.7 Excess Rent 11
10.8 No Merger 11
11. DEFAULT 11
11.1 Default by Tenant 11
11.2 Landlord's Remedies 12
11.3 Inducement, Recapture and Effect of Breach. 12
11.4 Right of Landlord to Re-Enter 12
11.5 Default by Landlord 13
12. ENVIRONMENTAL MATTERS 13
12.1 Definitions 13
12.2 Legal Requirements 14
12.3 Environmental Indemnification By Tenant 14
12.4 Tenant's Remedial Action Responsibility 14
12.5 Inspection Rights 14
12.6 Survival of Article 14
13. LANDLORD'S RIGHT TO ENTRY AND TO RELOCATE PREMISES 14
13.1 Right to Entry 14
13.2 Relocation of Premises 14
14. CONSTRUCTION OF PREMISES 15
15. SIGNS 15
16. SECURITY. 15
17. EMINENT DOMAIN 15
18. SUBORDINATION 15
19. ESTOPPEL CERTIFICATE 15
20. ATTORNEYS' FEES 15
21. PARKING 16
22. NOTICE 16
22.1 Manner of Service 16
22.2 Change of Place of Service 16
23. HOLDING OVER BY TENANT 16
24. WAIVER 16
25. TIME OF THE ESSENCE 16
26. SUCCESSORS AND ASSIGNS 16
27. LANDLORD'S RESERVATIONS 16
28. BROKERAGE COMMISSION 16
29. WAIVER OF RIGHT TO JURY TRIAL 16
30. GOVERNING LAW 16
31. CAPTIONS AND INTERPRETATIONS 17
32. SEVERABILITY 17
33. LEASE NOT EFFECTIVE UNTIL EXECUTED 17
ii
34. EXHIBITS AND ADDENDA TO LEASE 17
35. RECORDATION OF LEASE 17
36. ENTIRE AGREEMENT 17
37. COVENANTS AND REPRESENTS 17
EXHIBITS
Section
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A Premises Floor Plan 1.1
B Rules and Regulations 4.3
C Standards for Utilities and Services 6.1
D Work Letter Agreement 14.
E Form of Tenant's Estoppel Certificate 19.
F Notice of Lease Term Dates
ADDENDA
Rent Section 3
Utilities & Services Section 6
Parking Section 20
Option to Extend Lease Term Section 39
iii
ADDENDUM
This ADDENDUM is attached to and made a part of that certain British
Pacific Centre Office Building Lease ("Lease") dated as of January 13, 1998, by
and between British Pacific Properties Corporation, a California corporation,
("Landlord"), and Maxim Pharmaceuticals, a Delaware Corporation, ("Tenant").
SECTION 3. RENT
3.1 BASE RENT. (Continued) Tenant shall pay to Landlord, immediately upon
execution of this Lease, the Initial Monthly Base Rent payable for the first
full calendar month of the Term of this Lease.
SECTION 6. UTILITIES AND SERVICES.
6.1 UTILITIES AND SERVICES FURNISHED BY LANDLORD. (Continued)
6.1.2 Tenant shall be responsible for the cost of their
proportional electricity relating to the use of lighting and electrical
outlets within their leased premises. This amount shall be in excess of
their Base Rent and be due on a monthly basis at the same time and under
the same conditions as the Base Rent.
SECTION 20. PARKING (Continued)
Notwithstanding any other provision in this Section to the contrary, Tenant
and Tenant's Invitees shall be entitled to use, free of charge, the number of
parking spaces located in the Project's on-site parking facilities specified in
the Basic Lease Provisions for the Term of this Lease.
SECTION 39. OPTION TO EXTEND LEASE TERM
39.1 OPTION TO EXTEND TERM AND METHOD OF EXERCISE. Provided Tenant is not
in default under this Lease, Tenant shall be entitled to extend the Term of this
Lease (the "Option Term") for a one (1) year period. Such Option Term shall be
exercised by Tenant by delivery of written notice to Landlord at least five (5)
months and no more than (9) months prior to the then scheduled expiration date
of the Term. The option to extend is personal to Tenant and may not be
exercised by any transferee of Tenant, even if Landlord has consented to the
transfer.
39.2 EFFECT OF EXERCISE.
(a) INCORPORATION OF LEASE BY REFERENCE. All of the terms, covenants
and conditions (including, without limitation, defined terms) contained in
this Lease shall be applicable to each Option Term in the event of exercise
by Tenant" provided, however, that the Term and the Monthly Base Rent shall
be modified as provided herein.
(b) RENT. Subject to adjustment as hereafter provided, the Monthly
Base Rent effective as of the commencement date of the Option Term shall be
the prevailing Market Rent described below.
(c) PREVAILING MARKET RENT. The "Prevailing Market Rent" shall be
equal to the rental per square foot of Rentable Square Footage per year as
of the date which is six months prior to the expiration of the Term of the
Lease, including any previously exercised extensions thereof, at which
Landlord is actually leasing comparable improved space in the Building for
a term comparable to the period of the extension permitted by exercise of
the option, multiplied by the Rentable Square Footage of the Premises;
provided, however, that in no event shall the Prevailing Market Rent be
less than the rent in effect under this Lease immediately prior to the
commencement of the Option Term. If there is no such comparable improved
space in the Building offered to prospective tenants by Landlord for a
comparable term, then the Prevailing Market Rent shall be based upon the
rent as of six months prior to the end of the Term as aforesaid, prevailing
for comparable improved office space in first class office buildings
located in the business district in the University Towne Centre area of San
Diego, California. In determining the Prevailing Market Rent, whether for
comparable improved space within the Building or in the business district,
the following factors shall be taken into account:
(i) The particular configuration, frontage along a public
thoroughfare, signage visible to the public, parking facilities, and
general level of quality of improvements and location of each
comparison building shall be relevant.
(ii) No rent which has not been set or adjusted during the
twelve month period immediately preceding the expiration date of the
initial term shall be considered prevailing or current.
If Tenant has timely exercised the option, Landlord shall notify Tenant in
writing of the proposed new, Monthly Base Rent determined by Landlord for the
Option Term at least ninety (90) days prior to the Commencement Date of the
Option Term. Unless Tenant objects to the amount determined by Landlord within
fifteen (15) days after receipt of such notice, the amount stated in such notice
shall be the new Monthly Base Rent. If Tenant objects to Landlord's proposal,
then the new Monthly Base Rent shall be determined by an MAI Appraiser chosen by
Landlord and approved by Tenant. If Tenant does not disapprove of Landlord's
choice of any appraiser by delivery of written notice of disapproval naming a
Tenant's appraiser within five (5) days after written notice of such choice by
Landlord, then Landlord's appraiser shall be deemed to e approved by Tenant. If
Tenant does disapprove of Landlord's choice of an appraiser within the said five
(5) days, then Tenant's notice of disapproval shall name an MAI Appraiser
designated by tenant. Within ten (10) days after the date of Tenant's notice of
disapproval, Landlord's appraiser and Tenant's appraiser together shall select a
neutral third MAI Appraiser. If they are unable to agree on a third MAI
Appraiser within the said ten (10) days, then upon the application of either
party, the third MAI Appraiser shall be designated by the Presiding Judge of the
Superior Court for San Diego County, California. Landlords' appraiser and
Tenant's appraiser each shall determine a Prevailing
1
Market Rent, to be submitted in writing to Landlord, Tenant and the third MAI
Appraiser within thirty (30) days after the date of Tenant's notice of
disapproval. Within fifteen (15) days after receipt of those two appraisals,
the third MAI Appraiser shall select one of the other of those two appraisals,
and the one so selected shall be and become the Prevailing Market Rent effective
as of the commencement date of the Option Term. The cost of the third (3rd) MAI
Appraiser shall be split equally by Landlord and Tenant, and Landlord and Tenant
shall each be responsible for the fees and costs of the appraiser which it
appoints. If the Monthly Base Rent shall not have been determined by the
commencement date of the Option Term, then until it is determined, Tenant shall
pay Monthly Base Rent when due during the Option Term determined using
Landlord's proposed Monthly Base Rent, and when the actual adjusted Monthly Base
Rent is determined, Tenant shall pay to Landlord any additional rent due for the
months which are elapsed in the Option Term, or Landlord shall credit any excess
payment for the elapsed months to the next Monthly Base Rent becoming due.
39.3 EFFECT OF DEFAULT. If Tenant is in material default or any event or
condition has occurred which after notice or passage of time or both shall
constitute a default during the time period when it may otherwise exercise the
option, then any attempt to exercise the option shall be null, void and of no
force or effect. If Tenant exercises the option and if Tenant is in material
default or any event or condition has occurred which after notice or passage of
time or both shall constitute a material default at any time after exercise of
the option or on the first day for commencement of the Option Term, then the
exercise of the option by tenant shall be null, void and of no force or effect.
If Tenant has been in default in payment of any sum required by this Lease where
a late charge has become due under this Lease for more than three times during
any twelve-month period, then the provisions of this option to extend the Term
shall be canceled and shall be of no force or effect. No condition of the
Premises, including, without limitation, any alteration or improvement made by
Tenant, oral intention expressed by Tenant or detrimental reliance by Tenant on
any statement, act or omission by Landlord shall best any rights in tenant for
exercise of this option or to possess the premises during any period set for
extension of the Term in this option, or estop Landlord from eviction of tenant
after the end of the Term of this Lease then in effect, or give rise to any
equitable defense to such eviction. Tenant hereby waives any and all equitable
remedies with respect to this option unless Tenant has complied in all respect
with the written notice requirements set forth herein. The sole and exclusive
method for exercise of the option contained herein shall be delivery of the
written notice called for herein by Tenant to Landlord on a timely basis.
Landlord and Tenant hereby agree that time is of the essence with respect to
delivery of any notice of exercise by Tenant to Landlord. The date for delivery
of any notice required or permitted in this option shall be determined by the
provisions for delivery of notice contained in this Lease.
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EXHIBIT E
BRITISH PACIFIC CENTRE
FORM OF TENANT'S ESTOPPEL CERTIFICATE
The undersigned as Tenant under that certain Office Lease (the "Lease")
made and entered into as of February 4, 1998 and between BRITISH PACIFIC
PROPERTIES CORPORATION, a California Corporation, as Landlord, and the
undersigned as Tenant, for Premises on the second floor of the Office Building
located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ certifies as
follows:
1. Attached hereto as Exhibit A is a true and correct copy of the Lease
and all amendments and modifications thereto. The documents contained in
Exhibit A represent the entire agreement between the parties as to the Premises.
2. The undersigned has commenced occupancy of the Premises described in
the Lease, currently occupies the Premises, and the Lease Term commenced on
________________.
3. The Lease is in full force and effect and has not been modified,
supplemented or amended in any way except as provided in Exhibit A.
4. Tenant has not transferred, assigned, or sublet any portion of the
Premises nor entered into any license or concession agreements with respect
thereto except as follows:
5. Tenant shall not modify the documents contained in Exhibit A or prepay
any amounts owing under the Lease to Landlord in excess of thirty (30) days
without the prior written consent of Landlord's mortgagee.
6. Base Rent became payable on _____________________.
7. The Lease Term expires on ______________________.
8. All conditions of the Lease to be performed by Landlord necessary to
the enforceability of the Lease have been satisfied and Landlord is not in
default thereunder.
9. No rental has been paid in advance and no security has been deposited
with Landlord except as provided in the Lease.
10. As of the date hereof, there are no existing defenses or offsets that
the undersigned has, which preclude enforcement of the Lease by Landlord.
11. All monthly installments of Base Rent, all Additional Rent and all
monthly installments of estimated Additional Rent have been paid when due
through _________________. The current monthly installment of Base Rent is
$________________.
12. The undersigned acknowledges that this Estoppel certificate may be
delivered to Landlord's prospective mortgagee, or a prospective purchaser, and
acknowledges that it recognizes that if same is done, said mortgagee,
prospective mortgagee, or prospective purchaser will be relying upon the
statements contained herein in making the loan or acquiring the property of
which the Premises are a part, and in accepting an assignment of the Lease as
collateral security, and that receipt by it of this certificate is a condition
of making of the loan or acquisition of such property.
13. If Tenant is a corporation or partnership, each individual executing
this Estoppel Certificate on behalf of Tenant hereby represents and warrants
that Tenant is a duly formed and existing entity qualified to do business in
California and that Tenant has full right and authority to execute and deliver
this Estoppel Certificate and that each person signing on behalf of Tenant is
authorized to do so.
Executed at ________________________ on the ____________________ day of
__________________, 19____.
"TENANT":
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a
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By:
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Its:
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By:
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Its:
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EXHIBIT F
BRITISH PACIFIC CENTRE
NOTICE OF LEASE TERM DATES
To:
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Re: Office Lease dated February 4, 1998, between BRITISH PACIFIC
PROPERTIES CORPORATION, a California Corporation ("Landlord"),
and MAXIM PHARMACEUTICALS, a California Corporation ("Tenant")
concerning Suite #200 on the second floor of the Office Building
located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇.
Ladies and Gentlemen:
In accordance with the Office Lease (the "Lease"), we wish to advise you
and/or confirm as follows:
1. That the Premises are Ready for Occupancy, and that the Lease Term
shall commence as of __________________ for a term of
__________________________ (______) months ending on
________________________.
2. That in accordance with the Lease, Rent commenced to accrue on
_______________________.
3. If the Lease Commencement Date 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.
4. Rent is due and payable in advance on the first day of each and every
month during the Lease Term. Your rent checks should be made payable
to ___________________________________________________________ at
______________________________________________________________________
______________________.
5. The exact number of rentable square feet within the Premises is
________________ square feet.
6. Tenant's Share as adjusted based upon the exact number of rentable
square feet within the Premises is ________________ and
___________________________ percent (___________%).
"LANDLORD":
BRITISH PACIFIC PROPERTIES CORPORATION,
a California Corporation
By:
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Its:
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Landlord's Federal Taxpayer Identification
No.:
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Agreed to and Accepted as of ________________________, 19______.
"TENANT":
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a
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By:
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Its:
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By:
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Its:
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