Exhibit 10.3
Agreement No._________
* CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
DEVELOPMENT AGREEMENT
THIS DEVELOPMENT AGREEMENT, dated as of October 6, 2000, (hereinafter
referred to as "Agreement"), is entered into between SRI International, a
California nonprofit public benefit corporation ("SRI"), having a place of
business located at 000 Xxxxxxxxxx Xxxxxx, Xxxxx Xxxx, XX 00000, and Lipid
Sciences, Inc., a Delaware corporation ("LSI"), having a principal place of
business located at 0000 Xxxx Xxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxxxx
00000.
WITNESSETH
WHEREAS, SRI owns or has rights in certain intellectual property relating
to hollow fiber membranes and other separation technologies, and product
development for medical devices.
WHEREAS, SRI is willing to grant LSI certain license rights in such
intellectual property on the terms, and subject to, the conditions of this
Agreement.
WHEREAS, LSI owns or has rights in certain intellectual property relating
to processes and apparatuses for lipid removal from biological fluids, including
blood, blood products and blood components.
WHEREAS, LSI desires to financially support the development by SRI of a
medical device for use by LSI in modifying the lipid composition of biological
fluids on the terms, and subject to, the conditions of this Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein contained, the parties hereby agree as follows:
ARTICLES
1. DEFINITIONS
For purposes of this Agreement, the terms defined in this article shall
have the respective meanings set forth below:
1.1 "Field of Use" shall mean methods, devices and compositions of
matter for use in the in vivo, in vitro and ex vivo sampling,
removal, manipulation or treatment of blood, blood products, blood
components, lipids, lipid-containing cells and molecules, products
of lipid metabolism, and biological fluids including, without
limitation,
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human, non-human and synthetic plasma, serum, cells, pathogens and
lipoproteins.
1.2 "Development Period" shall mean the period commencing on October 6,
2000 and unless terminated earlier as provided in this Agreement or
extended by the mutual written agreement of the parties, expiring on
March 9, 2001.
1.3 "Development Program" shall mean the development program described
generally in the Development Proposal as consisting of a Phase I and
a Phase II.
1.4 "Development Proposal" shall mean the development plan attached
hereto as Exhibit A, as revised from time-to-time by the written
agreement of the parties.
1.5 "Development Program Intellectual Property" shall mean and include
any invention, patent, patent application, work of authorship, trade
dress, trademark, trade secret, design, drawing, method, process,
specification, and formulae, which is made, conceived, authored or
reduced to practice, whether individually or jointly, by or on
behalf of either or both of LSI and SRI, in connection with the
performance of the Development Program. Such Intellectual Property
includes, without limitation, all patents and patent applications of
any effective filing date that claim an invention which has been
conceived or reduced to practice by LSI, or jointly by LSI and SRI
in connection with the performance of the Development Program.
Development Program Intellectual Property also includes the know-how
embodied in the disclosures listed in Exhibit B of this Agreement.
1.6 "Internal Research Purposes" shall mean the furtherance of skills or
knowledge of a person or persons employed by SRI, for confidential
use of such skills and knowledge during the course of such persons
employment with SRI and/or the provision of research and development
services to a government agency. Disclosure to third parties or use
thereby, other than in connection with providing services to a
government agency, of Intellectual Property whose use by SRI is
authorized only for Internal Research Purposes is strictly
prohibited.
1.7 "Person" shall mean an individual, corporation, partnership, trust,
business trust, association, joint stock company, joint venture,
pool, syndicate, sole proprietorship, unincorporated organization,
governmental authority or any other form of entity not specifically
listed herein.
1.8 "SRI Intellectual Property" shall mean any invention, patent, patent
application, work of authorship, trade secret, technical know-how,
design, drawing, method, process, specification, and formulae which
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SRI owns and has the right to grant a non-exclusive license to in
the Field of Use in the Territory as of October 6, 2000.
1.9 "Territory" shall mean worldwide.
1.10 "Warrant" shall have the meaning set forth in Article 4.
2. DEVELOPMENT PROGRAM
2.1 Conduct of Development Program. During the Development Period, SRI
shall exercise commercially reasonable efforts to conduct Phase I of
the Development Program ("Phase I") in accordance with the
Development Proposal. SRI shall conduct Phase I in good scientific
manner, and in compliance in all material respects with all
requirements of applicable laws and regulations and all applicable
good laboratory and clinical practices. Because the services to be
performed are of an advisory or experimental nature, SRI does not
represent or warrant that Phase I in whole or in part will be
successful or achieve the objectives set forth in the Development
Proposal.
2.2 Funding for Development Program.
2.2.1 In consideration for the services to be performed by SRI
during Phase I of the Development Program, LSI shall pay SRI
research fees not-to-exceed one million five hundred seventeen
thousand dollars ($1,517,000), inclusive of the deposit
required by Section 2.2.2. Such payments shall be made in
accord with Sections 2.2.3 through 2.2.8, below.
2.2.2 The fees for Phase II of the Development Program ("Phase II")
shall be determined during Phase I and shall be funded,
subject to the terms and conditions of this Agreement, by
letter amendment to this Agreement.
2.2.3 LSI shall have no obligation to pay SRI any amount in excess
of the total amount of the research fee agreed upon for each
Phase, unless a greater fee has been expressly agreed to in
writing by both parties. If it appears to SRI that a Phase
cannot be completed without incurring expenses in excess of
such total fee allowed for such Phase, then within five (5)
business days of making such determination, SRI shall provide
LSI with an estimate of the cost to complete the Phase. LSI
shall then promptly determine whether to (a) discontinue the
Development Program when such total amount has been spent; (b)
authorize SRI to spend additional amounts; or, (c) revise the
scope of the Development Program as appropriate. All research
fees paid by LSI under this Article 2.2 are non-refundable and
non-creditable against future royalties.
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2.2.4 Immediately upon execution of this Agreement, LSI shall pay to
SRI a non-refundable deposit of five hundred thousand dollars
($500,000), against the project charges to be incurred during
Phase I. Immediately upon execution of the Phase II letter
amendment to this Agreement, LSI shall pay to SRI a
non-refundable deposit for Phase II of five hundred thousand
dollars ($500,000) against the project charges to be incurred
during Phase II. Upon receipt of each such deposit, SRI shall
initiate work on the phase of the Development Program for
which the deposit is to be applied, and shall deliver to LSI a
paid-memo invoice for receipt of the deposit paid.
2.2.5 The deposit for each of Phase I and Phase II paid LSI under
Section 2.2.4 shall be held by SRI until such time that the
estimated cost to complete the phase to which the deposit
applies is equal to the amount defined by Section 2.2.7,
below. At such time, if neither party has terminated the
agreement under Article 6.3, draws by SRI against such deposit
shall be made in accord with Section 2.2.7, below. In the
event LSI terminates the Agreement under Article 6.2 during
Phase I or Phase II, SRI shall retain the balance of the
deposit for such Phase as additional consideration for the
rights granted to LSI under this Agreement.
2.2.6 On execution of this Agreement, and thereafter at recurring
intervals of thirty (30) days, SRI shall provide LSI with an
invoice estimating the project charges to be incurred during
the following 30 day period. The amount of each invoiced
estimate shall not exceed $250,000 for any 30 day period,
unless a greater charge for a particular 30 day period has
been agreed upon in writing by the parties. LSI shall pay the
invoiced estimate, within five (5) business days of its
receipt from SRI.
2.2.7 When the aggregate charges invoiced under Section 2.2.6 during
a phase of work equal the total research fee for such Phase
allowed under Section 2.2.1, less the amount of the deposit
for the Phase described in Section 2.2.4, all subsequent
invoices for project charges shall be of a memorandum type,
and shall be issued monthly. Each such memorandum invoice
shall credit the amount of project charges for the previous
month against the deposit.
2.2.8 Upon completion or termination of the Development Program, SRI
shall render a final invoice to LSI. If and when SRI receives
late charges of a significant amount from a third party after
a final invoice has been rendered to LSI, SRI shall render a
special invoice to LSI. Subject to the limitations of
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Section 2.2.3, and the payment requirements for the estimating
invoices set forth in Article 2.2.6, all invoices submitted by
SRI to LSI under this Section 2.2.8 are due and payable, net
30 days.
2.3 Records. SRI shall maintain records, in sufficient detail and in
good scientific manner, which shall reflect all work done and
results achieved in the performance of the Development Program
(including all data in the form required under all applicable laws
and regulations). To enable its compliance with the rules and
regulations of any governing legal authority including, without
limitation, a patent authority of any country and the Food and Drug
Administration, LSI shall be entitled to review, duplicate and
distribute copies of such records, on request therefor following
reasonable notice, subject to the confidentiality provisions of this
Agreement. Following the expiration or earlier termination of this
Agreement, LSI shall pay SRI, at its normal commercial rates, for
any assistance SRI provides in connection with such records.
2.4 Reports. During the term of the Development Program, SRI shall keep
LSI generally informed of the progress under the Development
Program. Within thirty (30) days following the expiration or
termination of the Development Program for Phase I for any reason,
SRI shall prepare and provide LSI with a written report which shall
describe the work performed by SRI under the Development Program
during Phase I. Towards the latter part of Phase I SRI will prepare
and provide LSI with a detailed budget and plan for the Phase II
development effort.
3. INTELLECTUAL PROPERTY RIGHTS
3.1 Ownership of Intellectual Property. All Development Program
Intellectual Property shall be solely owned by LSI. SRI further
agrees that all employees and other Persons acting on its behalf
under the Development Agreement shall be required to assign any
rights they would otherwise hold in such Development Program
Intellectual Property to LSI. If any such Person is under an
existing obligation to assign their rights in Development Program
Intellectual Property to SRI, then SRI agrees to take all reasonable
and necessary steps to ensure that such rights become assigned to
LSI.
3.2 Disclosure of Development Program Intellectual Property. Each party
shall promptly disclose to the other party the conception,
authorship or making of Development Program Intellectual Property,
and shall promptly make all information concerning such Development
Program Intellectual Property available to such other party. Such
disclosure will be made in a mutually agreeable, and preferably
written, format.
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3.3 Intellectual Property Rights. LSI shall be responsible for the costs
and shall control the preparation, filing, prosecution, maintenance
and enforcement of all applications for registration or protection
of any aspect of the Development Program Intellectual Property
including, without limitation, patent applications and patents.
During the term of this Agreement, if LSI elects not to file a
patent application in any country or to abandon any pending
application or granted patent in any country with respect to
patentable Development Program Intellectual Property, LSI shall
provide adequate notice to SRI and give SRI the opportunity to file
or maintain such application or patent at its own expense. If SRI so
elects, it shall have the right to file, prosecute and maintain such
patent in SRI's name, and SRI shall be the sole owner of such
Development Program Intellectual Property and the related patent
application and patent, if any. SRI and LSI shall cooperate with the
other party and shall execute all lawful papers and instruments and
make all rightful oaths and declarations as may be necessary in
connection therewith.
3.4 License Grant to SRI for Use Outside the Field of Use. LSI hereby
grants to SRI a perpetual, exclusive, royalty-free license
(including the rights to grant sublicenses) to practice, make, have
made, use, import, sell, and offer to sell the Development Program
Intellectual Property for all purposes outside of the Field of Use,
throughout the Territory.
3.5 License Grant to SRI for Internal Research Purposes. LSI hereby
grants to SRI a perpetual, non-exclusive, royalty-free license
(including the rights to grant sublicenses) to practice and use the
Development Program Intellectual Property for Internal Research
Purposes.
3.6 Waiver of Rights. To the extent any use of the Development Program
Intellectual Property in the Field of Use in the Territory by LSI or
any licensee, sublicensee or assignee of LSI infringes any SRI
Intellectual Property which SRI owns or controls as of the date of
such infringement, SRI waives in perpetuity the right to enforce
such SRI Intellectual Property, by suit for infringement, or by any
other method or process.
3.7 Technical Know-How. With reasonable advance notice, SRI agrees to
cooperate with, and provide technical assistance to, LSI after the
conclusion of the Development Program as needed to permit LSI to
make, use, sell, test or commercialize the Development Program
Intellectual Property. LSI shall compensate SRI at SRI's normal
commercial rates for such assistance.
3.8 DISCLAIMER OF WARRANTIES. NOTHING IN THIS AGREEMENT SHALL BE
CONSTRUED AS A REPRESENTATION MADE OR WARRANTY GIVEN BY SRI OR LSI
THAT THE USE OF ANY INVENTION OR DELIVERABLE UNDER THE DEVELOPMENT
PROGRAM WILL NOT INFRINGE THE PATENT OR PROPRIETARY RIGHTS OF ANY
OTHER PERSON. FURTHERMORE, NEITHER SRI NOR LSI MAKES ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE
INVENTIONS, DELIVERABLES, OR WORK PERFORMED, INCLUDING WITHOUT
LIMITATION, ANY
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WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
4. EQUITY INCENTIVE
LSI will issue to SRI a warrant (the "Warrant"), the form of which is
attached hereto as Exhibit C. The Warrant will be concurrently executed
with this Agreement.
5. CONFIDENTIALITY
5.1 Confidential Information. During the term of this Agreement, and
five (5) years thereafter, following the expiration or earlier
termination hereof, each party shall exercise reasonable care to
maintain in confidence all information of the other party (including
samples) disclosed by the other party and identified at the time of
disclosure, to be confidential ("Confidential Information"), and
shall not use, disclose or grant the use of the Confidential
Information except on a need-to-know basis to those directors,
officers, employees, agents, permitted sublicensees and permitted
assignees, to the extent such disclosure is reasonably necessary in
connection with such party's activities as expressly authorized by
this Agreement. To the extent that disclosure is authorized by this
Agreement, prior to disclosure, each party hereto shall obtain the
written agreement of any such Person, who is not otherwise bound by
fiduciary obligations to such party, to hold in confidence and not
make use of the Confidential Information for any purpose other than
those permitted by this Agreement. Each party shall notify the other
promptly upon discovery of any unauthorized use or disclosure of the
other party's Confidential Information.
5.2 Permitted Disclosures. The nonuse and nondisclosure obligations
contained in this article shall not apply to the extent that (a) any
receiving party ("Recipient") is required to (i) disclose
information by law, order or regulation of a governmental agency or
a court of competent jurisdiction; or (ii) disclose information to
any governmental agency for purposes of obtaining approval to test
or market a product, provided in either case that Recipient shall
provide written notice thereof to the other party and sufficient
opportunity to object, time permitting, to any such disclosure or to
request confidential treatment thereof; or (b) Recipient can
demonstrate that (i) the information was public knowledge at the
time of such disclosure by Recipient, or thereafter became public
knowledge, other than as a result of acts attributable to Recipient
in violation hereof; (ii) the information was rightfully known by
Recipient (as shown by its written records) prior to the date of
disclosure to Recipient by the other party hereunder; (iii) the
information was disclosed to Recipient on an unrestricted basis from
a third party not
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under a duty of confidentiality to the other party; or, (iv) the
information was independently developed by employees or agents of
Recipient without access to the Confidential Information of the
other party.
5.3 Terms of this Agreement. Except as otherwise provided in this
Article, SRI and LSI shall not disclose any terms or conditions of
this Agreement to any third party without the prior consent of the
other party.
5.4 No Use of Name. Except as otherwise required by applicable law,
regulation or order of a governmental agency or court of competent
jurisdiction, neither party shall use the name of the other party or
the other party's directors, officers or employees in any
advertising, news release or other publication, without the prior
express written consent of the other party.
6. TERM AND TERMINATION
6.1 Expiration. Subject to the provisions of this article, this
Agreement shall expire on completion of the Development Program as
described in Exhibit A.
6.2 Termination by LSI. LSI may terminate this Agreement, in its sole
discretion, upon thirty (30) days prior written notice to SRI. In
the event of termination under this Article 6.2, SRI shall not be
obligated to refund LSI any fees paid for project charges actually
incurred then to date, any remaining balance of a deposit paid under
Section 2.2.4, or any stock issued to SRI.
6.3 Termination for Cause. Except as otherwise provided in Article 9,
herein, regarding force majeure, either party may terminate this
Agreement (a) upon or after the breach of any material provision of
this Agreement by the other party if the other party has not cured
such breach within thirty (30) days after written notice thereof by
the non-breaching party; or, (b) if the other party voluntarily
commences any action or seeks any relief regarding its liquidation,
reorganization, dissolution or similar act or under any bankruptcy,
insolvency or similar law; or, (c) if a proceeding is commenced or
an order, judgment or decree is entered seeking the liquidation,
reorganization, dissolution or similar act or any other relief under
any bankruptcy, insolvency or similar law against the other party,
without its consent, which continues undismissed or unstayed for a
period of sixty (60) days.
6.4 Effect of Expiration or Termination. Expiration or termination of
this Agreement shall not relieve the parties of any obligation
accruing prior to such expiration or termination, and the provisions
of Articles 3, 4, 5, 6, and 7, herein, shall survive the expiration
or termination of
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this Agreement. Upon termination or expiration of this Agreement, or
upon written request, each party shall promptly return all copies of
the other party's Confidential Information, except each party may
retain one copy for its legal files.
7. INDEMNIFICATION AND INSURANCE
7.1 Indemnification.
7.1.1 SRI shall indemnify, defend and hold harmless LSI, its
directors, officers, employees and agents from all losses,
liabilities, damages and expenses (including reasonable
attorneys' fees and costs) that they may suffer as a result of
any claims, demands, actions or other proceedings made or
instituted by any third party against any of them and arising
out of or relating to any gross negligence or intentional act
or omission by SRI in the performance of the Development
Program.
7.1.2 LSI shall indemnify, defend and hold harmless SRI, its
directors, officers, employees and agents from all losses,
liabilities, damages and expenses (including reasonable
attorneys' fees and costs) that they may suffer as a result of
any claims, demands, actions or other proceedings made or
instituted by any third party against any of them and arising
out of or relating to the use by LSI of any Development
Program Intellectual Property, and any SRI Intellectual
Property to which the right to use is licensed to LSI under
this Agreement.
7.2 Indemnification Procedure. A party ("Indemnitee") that intends to
claim indemnification under this article shall promptly notify the
other party ("Indemnitor") of any loss, liability, damage or
expense, or any claim, demand, action or other proceeding with
respect to which Indemnitee intends to claim such indemnification.
Indemnitor's indemnity obligations under this article shall not
apply to amounts paid in any settlement if effected without the
consent of Indemnitor, which consent shall not be unreasonably
withheld or delayed. Indemnitor shall not settle or consent to an
adverse judgment in any such claim, demand, action or other
proceeding that adversely affects the rights or interests of any
Indemnitee or imposes additional obligations on such Indemnitee,
without the prior express written consent of such Indemnitee.
Indemnitee, its employees and agents, shall cooperate fully with
Indemnitor and its legal representatives in the investigation of any
action, claim or liability covered by this indemnification.
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7.3 Insurance.
7.3.1 By SRI. SRI shall maintain comprehensive general liability
insurance, including contractual liability insurance, against
claims for bodily injury or property damage arising from its
activities contemplated by this Agreement, with such insurance
companies and in such amounts as SRI customarily maintains for
similar activities. SRI shall maintain such insurance during
the term of this Agreement and thereafter for so long as SRI
maintains insurance for itself covering such activities. Upon
request, SRI shall provide LSI with certificates of insurance
evidencing SRI's compliance with the insurance requirements of
this Article.
7.3.2 By LSI. LSI shall maintain comprehensive general liability
insurance, including contractual and product liability
insurance, against claims for bodily injury or property damage
arising from its activities contemplated by this Agreement,
with insurance companies reasonably acceptable to SRI, and in
amounts not less than two-million dollars ($2,000,000) per
occurrence and five-million dollars ($5,000,000) in the
aggregate. LSI shall maintain such insurance for so long as it
continues to conduct its activities contemplated by this
Agreement and thereafter for so long as LSI maintains
insurance for itself covering such activities. Upon request,
LSI shall provide SRI with certificates of insurance
evidencing LSI's compliance with the insurance requirements of
this Article.
7.4 Limited Liability. In no event shall SRI be liable to LSI or any
third party for any special, consequential or incidental damages
arising out of or related to this Agreement or with respect to any
claim, demand, action or other proceeding relating to this
Agreement, however caused, and on any theory of liability (including
negligence) and whether or not SRI has been advised of the
possibility of such damages. In no event shall SRI's liability owing
to LSI or any third party with respect to any claim, demand, action
or other proceeding relating to the Development Program under this
Agreement or the results thereof exceed the total amount actually
paid to SRI under this Agreement.
7.5 Authority. Each party represents and warrants that it has all right
and authority necessary to perform its obligations under the
Agreement.
8. LSI STAFF ON-SITE
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8.1 LSI Access. LSI representatives will have access to the SRI
facilities during normal business hours to permit LSI to conduct
those activities as described in the Exhibit A Development Program.
LSI shall have reasonable access to all SRI personnel involved in
the Development Program. While on SRI's site, LSI employees will
abide by SRI safety rules and policy according to the terms of SRI's
standard Lease Agreement (Exhibit E).
8.2 LSI Release. LSI shall defend, indemnify, release, and hold harmless
SRI, its officers, agents, subcontractors, and employees from any
and all claims, demands, damages, injuries, actions, or causes of
action and to pay all attorneys fees, expert witness fees, court
costs, and other costs of the defense of such action, seeking
recovery for damages to the property of any person or injury to any
person (including death) arising out of or as the result of LSI
employees, subcontractors, or representatives witnessing
experiments, performing work, or otherwise participating in
experiments on SRI premises or using SRI facilities pursuant to this
Agreement. LSI agrees that this obligation to defend, indemnify,
release and hold harmless shall not be diminished or eliminated even
if the damages or injury is the result of SRI's negligence, or of
the negligence of its officers, agents, employees, or
subcontractors, and shall not be diminished or eliminated even if
liability without fault is imposed or sought to be imposed. LSI
employees, subcontractors, or representatives will be required to
execute the attached Client Observer Agreement (Exhibit D), prior to
being allowed access to SRI facilities.
9. FORCE MAJEURE
Neither party shall be held liable or responsible to the other party nor
be deemed to have defaulted under or breached this Agreement for failure
or delay in fulfilling or performing any term of this Agreement to the
extent, and for so long as, such failure or delay is caused by or results
from causes beyond the reasonable control of the affected party including
but not limited to fires, earthquakes, floods, embargoes, wars, acts of
war (whether war is declared or not), insurrections, riots, civil
commotions, strikes, lockouts or other labor disturbances, acts of God or
acts, omissions or delays in acting by any governmental authority or other
party.
10. DISPUTE RESOLUTION
10.1 The parties shall first use any and all reasonable efforts to
amicably resolve any disputes arising out of or relating to this
Agreement by direct discussions between persons authorized to enter
into a binding agreement or through mediation. If the parties fail
to resolve the dispute either by direct discussions or mediation,
either party may submit the dispute to final and binding arbitration
to be held in
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San Francisco, California, USA. The parties shall negotiate in good
faith to select an arbitrator or a nationally recognized alternative
dispute resolution service which shall administer the arbitration.
10.2 The arbitration shall be conducted by three (3) impartial
arbitrators. Each party shall select one arbitrator. The two
arbitrators so selected shall together select a third arbitrator.
The arbitrators shall apply California Arbitration Law to any
proceeding conducted hereunder, except in the event a stay is sought
pursuant to the California Code of Civil Procedure Section
1281.2(c), in which event the parties agree that the issue shall be
resolved under the United States Arbitration Act.
10.3 The arbitrators' award shall be a final and binding determination of
the dispute and shall be fully enforceable as an arbitration award
by the California courts in accordance with California Arbitration
Law. If awarded by the arbitrators, the prevailing party shall be
entitled to recover its reasonable attorneys' fees and expenses,
including arbitration administration fees incurred in connection
with such proceeding. No participant in the arbitration whether a
party, a witness, or an arbitrator, may disclose the existence,
content, or results of any arbitration hereunder without the prior
written consent of both parties.
10.4 Notwithstanding the above, either party may seek from any court
having jurisdiction hereof any interim, provisional or injunctive
relief that may be necessary to protect the rights or property of
any party or to maintain the status quo before, during or after the
pendency of the arbitration proceeding. The institution and
maintenance of any judicial action or proceeding for any such
interim, provisional or injunctive relief shall not constitute a
waiver of the right or obligation of either party to submit the
dispute to arbitration, including any claims or disputes arising
from the exercise of any such interim, provisional or injunctive
relief.
11. MISCELLANEOUS
11.1 Notices. Any consent, notice or report required or permitted to be
given or made under this Agreement by one party to the other party
shall be in writing, delivered personally or by facsimile (and
promptly confirmed by personal delivery, U.S. first class mail,
courier or nationally-recognized delivery service), U.S. first class
mail postage prepaid, courier or nationally-recognized delivery
service, and addressed to the other party at its address indicated
below, or to such other address as the addressee shall have last
furnished in writing to the addressor. Except as otherwise provided
in this Agreement, such consent, notice or report shall be effective
upon receipt by the addressee.
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If to SRI, for technical If to SRI, for all other
matters: matters:
SRI International SRI International
000 Xxxxxxxxxx Xxxxxx 000 Xxxxxxxxxx Xxxxxx
Xxxxx Xxxx, XX 00000 Xxxxx Xxxx, XX 00000
Attn: Xxxx Xxxxxxxxx Attn: Xxxxxxx Xxxxxx
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
If to LSI, for technical If to LSI, for all other
matters: matters:
Lipid Sciences, Inc. Lipid Sciences, Inc.
0000 Xxxx Xxxxxx Xxxxxxx, 0000 Xxxx Xxxxxx Xxxxxxx,
Xxxxx 000 Xxxxx 000
Xxxxxxxxxx, XX 00000 Xxxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxxx Attn: Xxxx Xxxxxxx
Telephone: 000-000-0000 Telephone: 000-000-0000
Facsimile: 000-000-0000 Facsimile: 000-000-0000
11.2 No Solicitation. LSI and SRI agree that during the term of this
Agreement, LSI and SRI will have access to each other's business and
employees, including certain valuable proprietary information. LSI
and SRI recognize that misuse of such information, including
interference with the employment relationship between a party and
its employees, would cause substantial loss and irreparable harm to
such party. Therefore, as part of the consideration for this
Agreement, LSI and SRI hereby covenant and agree that they will not,
either during the term of this Agreement or for a period of one (1)
year after termination or expiration of this Agreement, either
directly or indirectly, by any means or device whatsoever, solicit
any of the other party's scientific, laboratory personnel or
management involved with or working on any project for LSI or
otherwise induce or attempt to induce such personnel to terminate
their employment with such party.
11.3 Governing Law. This Agreement, including the decision to arbitrate
and any decision by an arbitrator pursuant to Article 9, herein,
shall be governed by and construed in accordance with the laws of
the State of California, without regard to the conflicts of law
principles thereof, and shall not be governed by the United Nations
Convention on Contracts for the International Sale of Goods.
11.4 U.S. Export Laws and Regulations. Each party hereby acknowledges
that the rights and obligations of this Agreement are subject to the
laws and regulations of the United States relating to the export of
products and technical information. Without limitation, each party
shall comply with all such laws and regulations.
Page 13 of 54
Agreement No. _____
11.5 Assignment. LSI shall not assign its rights or obligations under
this Agreement, in whole or in part, by operation of law or
otherwise, without the prior written consent of SRI. Any purported
assignment in violation of this article shall be null and void.
11.6 Severability. Any of the provisions of this Agreement which are
determined to be invalid or unenforceable in any jurisdiction shall
be ineffective to the extent of such invalidity or unenforceability
in such jurisdiction, without rendering invalid or unenforceable the
remaining provisions hereof and without affecting the validity or
enforceability of any of the terms of this Agreement in any other
jurisdiction.
11.7 Waiver. The waiver by either party hereto of any right hereunder or
the failure to perform or of a breach by the other party shall not
be deemed a waiver of any other right hereunder or of any other
breach or failure by said other party whether of a similar nature or
otherwise.
11.8 Entire Agreement. This Agreement embodies the entire understanding
between the parties and supersedes any prior understanding and
agreements between and among them respecting the subject matter
hereof. There are no representations, agreements, arrangements or
understandings, oral or written, between the parties hereto relating
to the subject matter of this Agreement which are not fully
expressed herein. No change, modification, extension, termination or
waiver of this Agreement, or any of the provisions herein contained,
shall be valid unless made in writing and signed by duly authorized
representatives of the parties hereto.
11.9 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
SRI INTERNATIONAL LIPID SCIENCES, INC.
/s/ Xxxxxx X. Xxxxxxx /s/ Xxxx Xxxxxxx
_____________________________ _____________________________
Xxxxxx X. Xxxxxxx Xxxx Xxxxxxx
Name: _______________________ Name: ______________________
CEO President/CEO
Title: ______________________ Title: ________________________
Page 14 of 54
Agreement No._________
EXHIBIT A
DEVELOPMENT PLAN
Development of Plasma Delipidation Device for Lipid Sciences, Inc.
[* ]
Phase II: Scope not included in this Program Plan
Page 15 of 54
Agreement No._________
EXHIBIT B
DISCLOSURES
[ * ]
Page 16 of 54
Agreement No. _____
EXHIBIT C
WARRANT AND SHAREHOLDERS RIGHTS AGREEMENT
This security has been acquired for investment and has not been registered under
the Securities Act of 1933, as amended, or applicable state securities laws.
This security may not be sold, pledged or otherwise transferred in the absence
of this registration or pursuant to an exemption therefrom under the Act and
laws, supported by an opinion of counsel, reasonably satisfactory to the Company
and its counsel, that registration is not required.
For the Purchase of
500,000 shares
COMMON STOCK PURCHASE WARRANT
FOR THE PURCHASE OF
SHARES OF COMMON STOCK OF
LIPID SCIENCES, INC.
Lipid Sciences, Inc., a Delaware corporation ("Company"), hereby certifies that
for value received, SRI International, or its registered assigns ("Holder"), is
entitled, subject to the terms set forth below, to purchase from the Company, at
any time or from time to time during the period commencing on October 6, 2000
("Grant Date") and ending on October 6, 2007, five hundred thousand (500,000)
shares of common stock, $.01 par value, of the Company "Common Stock"), at an
initial exercise price equal to $5.00 per share. The number of shares of Common
Stock purchasable upon exercise of this Warrant, and the exercise price per
share, each as adjusted from time to time pursuant to the provisions of this
Warrant, are hereinafter referred to as the "Warrant Shares" and the "Exercise
Price," respectively.
Exercise.
(a) The Warrant will be exercisable as follows:
(i) Upon completion of Phase I of the Development Program, as
defined in that certain Development Agreement between the Company and SRI, the
Warrant will become exercisable with respect to one hundred thousand fifty
(150,000) shares of LSI common stock.
(ii) Upon demonstration of the medical device at the end of Phase II
of the Development Program, the Warrant will become exercisable with respect to
three hundred fifty thousand (350,000) shares of LSI common stock.
(b) This Warrant may be exercised by the Holder, in whole or in part, by
the surrender of this Warrant (with the Notice of Exercise Form attached hereto
as Attachment 1 duly executed by the Holder who is registered on the Company
books as the Holder (the "Registered Holder")) at the principal office of the
Company, or at any other office or agency the Company designates, accompanied by
payment in full, in lawful money of the United States, of an
Page 17 of 54
Agreement No. _____
amount equal to the then applicable Exercise Price multiplied by the number of
Warrant Shares then being purchased upon exercise.
(c) Each exercise of this Warrant will be deemed to have been effected
immediately prior to the close of business on the day on which this Warrant is
surrendered to the Company as provided in subsection 1(b) above. At that time,
the person or persons in whose name or names any certificates for Warrant Shares
will be issuable upon exercise as provided in subsection 1(d) below will be
deemed to have become the holder or holders of record of the Warrant Shares
represented by these certificates.
(d) Within three (3) business days after the exercise of the purchase
right represented by this Warrant, the Company at its expense will use its best
efforts to cause to be issued in the name of, and delivered to, the Holder, or,
subject to the terms and conditions hereof, to any other individual or entity as
Holder (upon payment by Holder of any applicable transfer taxes) may direct:
(i) a certificate or certificates for the number of full shares of
Warrant Shares to which Holder is entitled upon exercise plus, in lieu of any
fractional share to which Holder would otherwise be entitled, cash in an amount
determined pursuant to Section 3 hereof, and
(ii) in case the exercise is in part only, a new warrant or warrants
(dated the date hereof) of like tenor, stating on the face or faces thereof the
number of shares currently stated on the face of this Warrant minus the number
of shares purchased by the Registered Holder upon exercise as provided in
subsection 1(b) above.
(e) Conversion Right. In lieu of the payment of the Exercise Price in the
manner required by Section 1(b), the Holder will have the right (but not the
obligation ) to convert any exercisable but unexercised portion of this Warrant
into Common Stock ("Conversion Right") as follows: upon exercise of the
Conversion Right, the Company will deliver to the Holder (without payment by the
Holder of any of the Exercise Price in cash) that number of shares of Common
Stock equal to the quotient obtained by dividing (x) the "Value" (as defined
below) of the portion of the Warrant being converted by (y) the Market Price (as
defined below). The "Value" of the portion of the Warrant being converted equals
the remainder derived from subtracting (a) the Exercise Price multiplied by the
number of shares of Common Stock underlying the portion of the Warrant being
converted from (b) the Market Price of the Common Stock multiplied by the number
of shares of Common Stock underlying the portion of the Warrant being converted.
As used herein, the term "Market Price" means the last reported sale price of
the Common Stock on the date prior to the date the Conversion Right is
exercised. If no reported sale takes place on that day, the term "Market Price"
means the average of the last reported sale prices for the immediately preceding
three trading days. In either case, the reported sale price is the one
officially reported by the principal securities exchange on which the Common
Stock is listed or admitted to trading, or, if the Common Stock is not listed or
admitted to trading on any national securities exchange or if any exchange on
which the Common Stock is listed is not its principal trading market, the last
reported sale price as furnished by the National Association of Securities
Dealers, Inc. ("NASD") through the Nasdaq Stock Market, or, if applicable, the
OTC Bulletin Board. If the Common Stock is not listed or admitted to trading on
any of the foregoing markets, or similar organization, the term "Market Price"
means the price determined in good faith by
Page 18 of 54
Agreement No. _____
resolution of the Board of Directors of the Company, based on the best
information available to it. The Conversion Right may be exercised by the Holder
on any business day on or after the Grant Date and not later than the Expiration
Date by delivering this Warrant to the Company with a duly executed exercise
form attached hereto with the conversion section completed.
Adjustments.
(a) Split, Subdivision or Combination of Shares. While this Warrant
remains outstanding and unexpired, if the outstanding shares of the Company's
Common Stock at any time is subdivided or split into a greater number of shares
or a dividend in Common Stock will be paid in respect of Common Stock, or if the
outstanding shares of Common Stock are combined or reverse-split into a smaller
number of shares the Exercise Price and the number and kind of Warrant Shares
issuable upon exercise of this Warrant as in effect immediately prior to such
action shall be proportionately adjusted so that the Holder may receive the
aggregate number and kind of shares of capital stock of the Company which such
Holder would have owned immediately following such action if this Warrant had
been exercised immediately prior to such action.
(b) Reclassification Reorganization, Consolidation or Merger. In the case
of any reclassification of the Common Stock (other than a change in par value or
a subdivision or combination as provided for in subsection 2(a) above), or any
reorganization, consolidation or merger of the Company with or into another
corporation, or a transfer of all or substantially all of the assets of the
Company, or the payment of a liquidating distribution then, as part of any such
reorganization, reclassification, consolidation, merger, sale or liquidating
distribution, lawful provision will be made so that the Holder of this Warrant
will have the right thereafter to receive upon the exercise hereof (to the
extent, if any, still exercisable) the kind and amount of shares of stock or
other securities or property that Holder would have been entitled to receive if,
immediately prior to any reorganization, reclassification, consolidation,
merger, sale or liquidating distribution, as the case may be, Holder had held
the number of shares of Common Stock that were then purchasable upon the
exercise of this Warrant. In any case, appropriate adjustment (as reasonably
determined by the Board of Directors of the Company) will be made in the
application of the provisions set forth herein with respect to the rights and
interests thereafter of the Holder of this Warrant so that the provisions set
forth in this Section 2 (including provisions with respect to the Exercise
Price) will thereafter be applicable, as nearly as is reasonably practicable, in
relation to any shares of stock or other securities or property thereafter
deliverable upon the exercise of this Warrant.
(c) Price Adjustment. No adjustment in the Exercise Price will be required
unless the adjustment requires an increase or decrease in the Exercise Price of
at least $0.01. But, any adjustments that by reason of this subsection are not
required to be made will be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 2 will be made to the
nearest cent or to the nearest 1/100th of a share.
(d) Price Reduction. Notwithstanding any other provision set forth in this
Warrant, while this Warrant is exercisable, the Company in its sole discretion
may reduce the Exercise Price or extend the period that this Warrant is
exercisable.
Page 19 of 54
Agreement No. _____
(e) No Impairment. The Company may not, by amendment of its Articles of
Incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Company. The Company will at all times in
good faith assist in the carrying out of all the provisions of this Section 2
and will take all actions as may be necessary or appropriate in order to protect
against impairment of the rights of the Holder of this Warrant to adjustments in
the Exercise Price.
(f) Notice of Adjustment. If any event requires an adjustment of the
Exercise Price hereunder, the Company will promptly give written notice thereof
to the Holder of this Warrant stating the adjusted Exercise Price and the
adjusted number of Warrant Shares resulting from the event and setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based.
Fractional Shares. The Company is not required upon this Warrant's exercise to
issue any fractional shares, but will make an adjustment in cash on the basis of
the Market Price of the Company's Common Stock.
Limitation on Sales. Each holder of this Warrant acknowledges that this Warrant
and the Warrant Shares have not been registered under the Securities Act of
1933, as amended ("Act"), as of the date of issuance hereof and agrees not to
sell, pledge, distribute, offer for sale, transfer or otherwise dispose of this
Warrant, or any Warrant Shares issued upon its exercise except under
circumstances which will not result in a violation of applicable federal and
state securities laws and the terms and conditions of this Warrant.
Without limiting the generality of the foregoing, unless the offer and
sale of the Warrant Shares to be issued on the particular exercise of the
Warrant have been effectively registered under the Act, the Company is under no
obligation to issue the shares covered by the exercise unless the Holder has
executed an investment letter, the form attached hereto as Attachment 2; it
being understood that the box referenced in item (f) of such investment letter
need be checked. Any stock certificate representing Warrant Shares will be
imprinted with a legend in substantially the following form:
This security has been acquired for investment and has not been registered
under the Securities Act of 1933, as amended, or applicable state securities
laws. This security may not be sold, pledged or otherwise transferred in the
absence of such registration or pursuant to an exemption therefrom under said
Act and such laws.
Market Stand-off.
Holder may not, without the prior written consent of the Company's Board of
Directors, during the period commencing on the effective date of the first
public offering of the Common Stock of the Company to the general public which
is effected pursuant to a registration statement filed with the Securities and
Exchange Commission under the Act ("IPO") and ending on the second anniversary
of this date (i) lend, offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
Page 20 of 54
Agreement No. _____
right or warrant to purchase, or otherwise transfer or dispose of, directly or
indirectly, any shares of the Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock (whether such shares or any such
securities are then owned by Holder or are thereafter acquired), or (ii) enter
into any swap or other arrangement that transfers to another, in whole or in
part, any of the economic consequences of ownership of the Common Stock, whether
any such transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise. In
order to enforce the covenant in this Section, the Company may impose
stop-transfer instructions with respect to the shares of Holder until the end of
the relevant period. The agreed upon "lock-up" has been established with the
understanding that LSI employees are presently restricted from selling the stock
they receive from LSI until two (2) years following LSI's IPO. Should the
"lock-up" period for LSI's employees be reduced such that they can sell their
stock prior to two (2) years following LSI's IPO, then the "lock-up" period
applicable to SRI's shares shall be reduced to the same extent. SRI may transfer
all or a portion of the Warrant under the terms of its Intellectual Property and
Equity Sharing Policy. All persons who receive any portion of the Warrant will
be subject to the market stand-off described in this section.
Registration Rights.
(a) Grant of Right. The Holders will have the right until October 6, 2007,
to include the Warrant Shares as part of any registration of securities filed by
the Company (other than in connection with a transaction contemplated by Rule
145(a) promulgated under the Securities Act or under Form S-8 or any equivalent
form). The Company is not required to include Warrant Shares in a registration
statement relating to an offering of securities if the managing underwriter has
advised the Company that marketing factors require a limitation of the number of
shares to be included (in which case the amount of securities to be offered for
the accounts of Holders will be reduced pro rata (according to the shares
proposed for registration) to the extent necessary to reduce the total amount of
securities to be included in the offering to the amount recommended by the
managing underwriter. Any such limitation may reduce the number of Warrant
Shares registered for the Holder to not less than thirty percent (30%) of the
total number of Warrant Shares requested to be included).
(b) Terms. The Company will bear all fees and expenses attendant to
registering the Warrant Shares, but Holders will pay any and all underwriting
commissions and the expenses of any legal counsel selected by Holders to
represent them in connection with the sale of the Warrant Shares. In the event
of a proposed registration, the Company will furnish the then Holders with not
less than 30 days' written notice prior to the proposed date of filing of such
registration statement. This notice will continue to be given for each
registration statement filed by the Company until the earlier of (i) such time
as all of the Warrant Shares have been sold by the Holders thereof or (ii) the
expiration of the "piggy-back" rights provided for herein. The Holders will
exercise the "piggy-back" rights provided for herein by giving written notice
within 20 days of the receipt of the Company's notice of its intention to file
a registration statement. The Company will cause any registration statement
filed pursuant to the above "piggy-back" rights to remain effective for a period
of at least nine consecutive months from the date that the Holders of the
Warrant Shares covered by the registration statement are first given the
opportunity to sell all of the securities. Notwithstanding the
Page 21 of 54
Agreement No. _____
provisions of this Section, the Company will have the right at any time after it
will have given written notice of its intention to file a registration statement
(irrespective of whether a written request for inclusion of any Warrant Shares
will have been made) to elect not to file any proposed registration statement,
or to withdraw the same after the filing but prior to the effective date
thereof.
(c) Indemnification. The Company will indemnify the Holder(s) of the
Warrant Shares to be sold pursuant to any registration statement hereunder and
each person, if any, who controls such Holders within the meaning of Section 15
of the Securities Act or Section 20(a) of the Securities Exchange Act of 1934,
as amended ("Exchange Act"), against all loss, claim, damage, expense or
liability (including all reasonable attorneys' fees and other expenses
reasonably incurred in investigating, preparing or defending against any claim
whatsoever) to which any of them may become subject under the Securities Act,
the Exchange Act or otherwise, arising out of or based upon any untrue statement
or alleged untrue statement of a material fact contained in (i) such
registration statement; or (ii) any application or other document or written
communication (in this paragraph (c) collectively called "application") executed
by the Company or based upon written information furnished by the Company in any
jurisdiction in order to qualify the Warrant Shares under the securities laws
thereof or filed with the Commission, any state securities commission or agency,
Nasdaq or any securities exchange; or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, unless such statement or omission was made in reliance
upon, and in strict conformity with, written information furnished to the
Company with respect to the Holder(s) by or on behalf of the Holder(s) expressly
for use in such registration statement or in any application, as the case may
be. The Company agrees promptly to notify the Holder(s) of the commencement of
any litigation or proceedings against the Company or any of its officers,
directors or controlling persons in connection with the issue and sale of the
Warrant Shares or in connection with the registration statement or any
application. The Holder(s) and their successors and assigns will severally, and
not jointly, indemnify the Company, against all loss, claim, damage, expense or
liability (including all reasonable attorneys' fees and other expenses
reasonably incurred in investigating, preparing or defending against any claim
whatsoever) to which they may become subject under the Securities Act, the
Exchange Act or otherwise, arising from information furnished by or on behalf of
such Holders, with respect to such Holders, in writing, for specific inclusion
in such registration statement or any application.
(d) Elimination of Registration Rights. Notwithstanding anything to the
contrary in paragraphs (a) and (b) of this Section 6, no Holders are entitled to
have their Warrant Shares registered under the Securities Act if, in the opinion
of counsel to the Company, they may be sold without restriction under Rule
144(k) promulgated under the Securities Act and any restrictive legends under
the Securities Act are removed from the certificates representing such
securities and any stop transfer order for the certificates is removed.
(e) Successors and Assigns. The registration rights granted to the Holders
inure to the benefit of all the Holders' successors, heirs, pledgees, assignees,
transferees and purchasers of the Warrant Shares.
Page 22 of 54
Agreement No. _____
(f) Exercise of Warrants. Nothing contained in this Agreement will be
construed as requiring the Holder(s) to exercise their Warrants prior to or
after the initial filing of any registration statement or the effectiveness
thereof.
(g) Documents Delivered to Holders. The Company will furnish to each
Holder participating in any of the foregoing offerings and to each underwriter
of any such offering, if any, a signed counterpart, addressed to such Holder or
underwriter, of (i) an opinion of counsel to the Company, dated the effective
date of the registration statement (and, if the registration includes an
underwritten public offering, an opinion dated the date of the closing under any
underwriting agreement related thereto), and (ii) a "cold comfort" letter dated
the effective date of the registration statement (and, if the registration
includes an underwritten public offering, a letter dated the date of the closing
under the underwriting agreement) signed by the independent public accountants
who have issued a report on the Company's financial statements included in the
registration statement, in each case covering substantially the same matters
with respect to the registration statement (and the prospectus included therein)
and, in the case of the accountants' letter, with respect to events subsequent
to the date of the financial statements, as are customarily covered in opinions
of issuer's counsel and in accountants' letters delivered to underwriters in
underwritten public offerings of securities. The Company will also deliver
promptly to each Holder participating in the offering requesting the
correspondence and memoranda described below and to the managing underwriter
copies of all correspondence between the Commission and the Company, its counsel
or auditors and all memoranda relating to discussions with the Commission or its
staff with respect to the registration statement and permit each Holder and
underwriter to do such investigation, upon reasonable advance notice, with
respect to information contained in or omitted from the registration statement
as it deems reasonably necessary to comply with applicable securities laws or
rules of the National Association of Securities Dealers, Inc.
Notices of Record Date. If:
(a) the Company takes a record of the holders of its Common Stock (or
other stock or securities at the time deliverable upon the exercise of this
Warrant) for the purpose of entitling or enabling them to receive any dividend
or other distribution, or to receive any right to subscribe for or purchase any
shares of any class or any other securities, or to receive any other right, or
(b) the Company enters into any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation or
merger of the Company with or into another corporation (other than a
consolidation or merger in which the Company is the surviving entity), or any
transfer of all or substantially all of the assets of the Company, or
(c) the Company is the subject of the voluntary or involuntary
dissolution, liquidation or winding-up of the Company, then, and in each case,
the Company will mail or cause to be mailed to the Registered Holder of this
Warrant a notice specifying, as the case may be, (i) the date on which a record
is to be taken for the purpose of such dividend, distribution or right, and
stating the amount and character of such dividend, distribution or right, or
(ii) the effective date on which such reorganization, reclassification,
consolidation, merger, transfer, dissolution, liquidation or winding-up is to
take place, and the time, if any is to be fixed, as of which the holders of
record of Common Stock (or such other
Page 23 of 54
Agreement No. _____
stock or securities at the time deliverable upon the exercise of this Warrant)
will be entitled to exchange their shares of Common Stock (or such other stock
or securities) for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, transfer, dissolution,
liquidation or winding-up. Such notice will be mailed at least fifteen (15) days
prior to the record date or effective date for the event specified in such
notice, provided that the failure to mail such notice will not affect the
legality or validity of any such action.
Reservation of Stock. The Company will at all times reserve and keep available,
solely for issuance and delivery upon the exercise of this Warrant, Warrant
Shares and other stock, securities and property, as from time to time will be
issuable upon the exercise of this Warrant.
Replacement of Warrants. Upon receipt of evidence reasonably satisfactory to the
Company of the loss, theft, destruction or mutilation of this Warrant and (in
the case of loss, theft or destruction) upon delivery of an indemnity agreement
(with surety if reasonably required) in an amount reasonably satisfactory to the
Company, or (in the case of mutilation) upon surrender and cancellation of this
Warrant, the Company will issue, in lieu thereof, a new Warrant of like tenor.
Transfers, etc.
(a) The Company will maintain a register containing the names and
addresses of the Holders of this Warrant. Any Holder may change its, his or her
address as shown on the warrant register by written notice to the Company
requesting such change.
(b) Until any transfer of this Warrant is made in the warrant register,
the Company may treat the registered Holder of this Warrant as the absolute
owner hereof for all purposes; provided, however, that if and when this Warrant
is properly assigned in blank, the Company may (but will not be obligated to)
treat the bearer hereof as the absolute owner hereof for all purposes,
notwithstanding any notice to the contrary.
No Rights as Stockholder. Until the exercise of this Warrant, the Holder of this
Warrant does not have or exercise any rights by virtue hereof as a stockholder
of the Company.
Successors. The rights and obligations of the parties to this Warrant inure to
the benefit of and are binding on the parties and their respective heirs,
successors, assigns, pledgees, transferees and purchasers. Without limiting the
foregoing, the registration rights set forth in this Warrant inure to the
benefit of the Registered Holder and all the Registered Holder's successors,
heirs, pledgees, assignees, transferees and purchasers of this Warrant and the
Warrant Shares.
Change or Waiver. Any term of this Warrant may be changed or waived only by an
instrument in writing signed by the party against whom enforcement of the change
or waiver is sought.
Headings. The headings in this Warrant are for purposes of reference only
and will not limit or otherwise affect the meaning of any provision of this
Warrant.
Page 24 of 54
Agreement No. _____
Governing Law. This Warrant is governed by and construed in accordance with the
laws of the State of California as these laws are applied to contracts made and
to be fully performed entirely within that state between residents of that
state.
Jurisdiction and Venue. The Company (i) agrees that any legal suit, action or
proceeding arising out of or relating to this Warrant will be instituted
exclusively in California, (ii) waives any objection to the venue of any such
suit, action or proceeding and the right to assert that such forum is not a
convenient forum.
Mailing of Notices, etc. All notices and other communications under this Warrant
(except payment) will be in writing and will be sufficiently given if delivered
to the addressees in person, by Federal Express or similar receipt delivery, or
if mailed, postage prepaid, by certified mail, return receipt requested, as
follows:
Holder: To his, her or its address on page 1
of this Warrant.
The Company: Lipid Sciences, Inc.
0000 Xxxx Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
In either case, with a copy to: Xxxxxx Xxxxx
Xxxxx & Lardner
000 X. Xxxxxxxx 00xx Xxxxx
Xxx Xxxxx, XX
(000)000-0000 FAX
or to any other address as any of them, by notice to the others may designate
from time to time. Time will be counted to, or from, as the case may be, the
delivery in person or by mailing.
LIPID SCIENCES, INC.
By: ___________________________
Xxxxxxx X. Xxxxxxx, Ph.D
President & CEO
Page 25 of 54
Agreement No. _____
ATTACHMENT 1
NOTICE OF EXERCISE
TO: Lipid Sciences, Inc.
The undersigned hereby elects irrevocably to purchase _____ shares of Common
Stock of Lipid Sciences, Inc., pursuant to terms of the attached Warrant, and
tenders herewith payment of the exercise price of such shares in full, together
with all applicable transfer taxes, if any. Please issue a certificate or
certificates representing said shares of the Common Stock in the name of the
undersigned or in such other name as is specified below.
or
The undersigned hereby elects irrevocably to exercise the within Warrant and to
purchase ____________ shares of Common Stock of Lipid Sciences, Inc. by
surrender of the unexercised portion of the within (with a "Value" of $________
based on a "Market Price" of $__________). Please issue a certificate or
certificates representing said shares of Common Stock in the name of the
undersigned or in such other name as is specified below.
_____________________________________
(Name)
_____________________________________
(Address)
_____________________________________
_____________________________________
(Taxpayer Identification Number)
_________________________________________
[print name of Holder]
By: _____________________________________
Title:___________________________________
Date:____________________________________
NOTICE: The signature to this form must correspond with the name as
written upon the face of the within Warrant in every particular without
alteration or enlargement or any change whatsoever.
Page 26 of 54
Agreement No. _____
ATTACHMENT 2
INVESTMENT REPRESENTATION CERTIFICATE
Purchaser:
Company: [COMPANY]
Security: Common Stock
Amount:
Date:
(a) In connection with the purchase of the above-listed securities (the
"Securities"), the undersigned (the "Purchaser") represents to the Company as
follows:
(b) The Purchaser is aware of the Company's business affairs and financial
condition, and has acquired sufficient information about the Company to reach an
informed and knowledgeable decision to acquire the Securities. The Purchaser is
purchasing the Securities for its own account for investment purposes only and
not with a view to, or for the resale in connection with, any "distribution"
thereof for purposes of the Securities Act of 1933, as amended (the "Securities
Act");
(c) The Purchaser understands that the Securities have not been registered under
the Securities Act in reliance upon a specific exemption therefor, which
exemption depends upon, among other things, the bona fide nature of the
Purchaser's investment intent as expressed herein;
(d) The Purchaser further understands that the Securities must be held
indefinitely unless subsequently registered under the Securities Act or unless
an exemption from registration is otherwise available. In addition, the
Purchaser understands that the certificate evidencing the Securities will be
imprinted with the legend referred to in the Warrant under which the Securities
are being purchased; and
(e) The Purchaser is aware of the provisions of Rule 144, promulgated under the
Securities Act, which, in substance, permit limited public resale of "restricted
securities" acquired, directly or indirectly, from the issuer thereof (or from
an affiliate of such issuer), in a non-public offering subject to the
satisfaction of certain conditions, if applicable, including, among other
things: (i) the availability of certain public information about the Company;
(ii) the resale occurring not less than one (1) year after the party has
purchased and paid for the securities to be sold; (iii) the sale being made
through a broker in an unsolicited "broker's transaction" or in transactions
directly with a market maker (as said term is defined under the Securities
Exchange Act of 1934) and the amount of securities being sold during any
three-month period not exceeding the specified limitations stated therein.
(f) Please check the box if you are an accredited investor as that term is
defined under Regulation D promulgated under the Securities Act. [ ]
PURCHASER: ____________________________ Date: ______________________
Page 27 of 54
Agreement No. _____
EXHIBIT D
CLIENT OBSERVER AGREEMENT
In consideration of SRI International permitting me to enter onto the premises
of SRI, or into a site or an area under the control of SRI, for the purposes of
witnessing or participating in a research program(s) or experiment(s) being
conducted by SRI International, its staff, agents or subcontractors, I agree as
follows:
1. I understand that the nature of the research program, or the experiment
I am witnessing or participating in, may in itself, contain elements which are
inherently or potentially dangerous and could cause damage or injury to persons
or property, including death. I accept the risk of any injury to my person or
property which may arise out of or during the research program or the experiment
I am witnessing or participating in. I agree that no legal duty of any kind for
the safety of my person or property shall be imposed upon SRI, its staff,
agents, or subcontractors in connection with the research program or the
experiment I am witnessing or participating in.
2. I agree to follow all safety rules and requirements established for the
premises, or required by the overriding contract, if any, of which the
experiment or program is a part, and to follow safety instructions or directions
of SRI representatives.
3. I agree to defend, indemnify and hold harmless SRI, its officers,
agents and employees from any and all claims, demands, actions or causes of
action and to pay all attorneys fees, expert witness fees and costs of the
defense of such action, seeking recovery for damages to the property of any
person or injury to any person (including myself) arising out of my
participation (active or passive) in the research project or experiment or
arising out of my presence as a witness at the research project or experiment. I
agree that this obligation to defend, indemnify and hold harmless shall not be
diminished or eliminated even if the damages or injury is the result of SRI's
negligence, or of the negligence of its officers, agents, employees or
subcontractors, and shall not be diminished or eliminated even if liability
without fault is imposed or sought to be imposed.
4. I agree that during this association with SRI I will not be considered
an employee nor shall I be entitled to any compensation, since the benefit to
SRI, if any, by reason of my activities under this Agreement, is expected to be
merely incidental.
5. I agree not to publish or make known to any one outside of SRI any data
or results of a confidential nature which I learn of while at SRI, without
written authorization from the President of SRI except as specified in a duly
executed written contract.
Page 28 of 54
Agreement No._________
Client Observer Agreement Page 2
6. I agree to disclose to SRI, or its designee, any invention or discovery
which I make while engaged in a research assignment at SRI. If the terms of the
research contract, if any, for such assignment require that any such invention
or discovery be assigned to the research client, I agree to make such an
assignment. Otherwise, I will assign all rights to SRI. I agree to cooperate
with the patent attorney of SRI or the research client in the preparation of a
patent application if so requested.
7. I agree that upon leaving SRI I will not take with me without the
consent of the President of SRI any drawings, blueprints, research or other data
of any description or other reproduction of any information except as specified
in a duly executed contract.
8. All of the terms of this Agreement are subject to the terms of the
Development Agreement of October 6, 2000 between Lipid Sciences, Inc. and SRI.
To the extent that the terms of this Agreement may be inconsistent with those of
the Development Agreement, the terms of the latter shall govern.
9. This Agreement shall be governed by, and interpreted in accord
with, the laws of the State of California.
My stay at SRI shall begin on ________________________ and end on
__________________.
IN WITNESS WHEREOF, I have affixed my signature hereto in the presence of a
witness the day and year first above written.
___________________________ ___________________________________
(WITNESS) Participant/Client Observer
______________________________
(FOR SRI INTERNATIONAL)
Page 29 of 54
Agreement No._________
EXHIBIT E
FORM OF SRI STANDARD LEASE AGREEMENT
LEASE
This lease ("Lease") is entered into as of ___________, ____, by and between SRI
International, a California nonprofit corporation ("Landlord") and
________________, a ___________ corporation ("Tenant").
Subject to the terms and conditions set forth in this Lease, Landlord hereby
leases to Tenant, and Tenant hereby leases from Landlord, for the Term as
defined below and subject to the covenants hereinafter set forth, to all of
which Landlord and Tenant hereby agree, approximately ________________________
(____) square feet of office space (the "Leased Space") in Building __ (the
"Building"), at 000 Xxxxxxxxxx Xxxxxx, Xxxxx Xxxx, Xxxxxxxxxx, as shown in
Exhibit A, and incorporated herein by this reference. Landlord reserves the
right to renumber and redesignate at any time during this Lease the number of
any space in the Building, including the Leased Space.
1. TERM
This Lease shall run month-to-month but shall not exceed ________ (__)
month(s) commencing at 12:01 a.m. on ___________, ____, ("Commencement
Date") and ending at 11:59 p.m. on _____________, ____, ("Termination
Date") unless terminated earlier as provided in this Lease ("Term").
2. BASIC RENT
2.1 During the Term of this Lease, Tenant agrees to pay to Landlord, as
basic monthly rent, for the use and occupancy of the Leased Space, a
rate of __________________ dollars ($_______) per square foot for a
total monthly rent of __________________ dollars ($_______) (the
"Rent").
2.2 Tenant shall pay the Rent to Landlord, without notice, demand,
deduction or offset, in lawful money of the United States of
America, at the following address of Landlord: 000 Xxxxxxxxxx
Xxxxxx, Xxxx XX000, Building A, Menlo Park, California, 94025, or
any other place or places that Landlord may from time to time
designate in writing.
2.3 Should the Commencement Date occur on a day other than the first day
of a calendar month, or if the Termination Date should occur on a
day other than the last day of a calendar month, then the Rent for
such fractional month shall be prorated upon a daily basis based
upon a thirty (30) day calendar month.
2.4 In the event any installment of Rent or Additional Rent (as defined
in paragraph 5.3, below) due hereunder is not paid within ten (10)
calendar days after it is due, then Tenant shall also pay to
Landlord as Additional
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Agreement No._________
Rent a late payment equal to four percent (4%) of such delinquent
Rent for each and every month or part thereof that such Rent remains
unpaid.
2.5 All amounts of money payable by Tenant to Landlord hereunder, if not
paid when due, shall bear interest from the due date until paid at
the maximum annual interest rate of prime plus three percent (3%)
with such rate not to exceed eighteen percent (18%).
2.6 The obligation of Tenant with respect to the payment of Rent, or
Additional Rent as defined herein, accrued and unpaid during the
Term of this Lease, shall survive the expiration or earlier
termination of this Lease.
3. USE OF PREMISES AND COMPLIANCE WITH LAWS
3.1 The Leased Space shall be used for general office purposes by Tenant
and for no other use or uses without the prior express written
consent of Landlord.
3.2 Tenant covenants and agrees that Tenant shall at all times be
responsible and liable for, and be in complete and strict compliance
with, all federal, state, local and regional laws, ordinances,
rules, codes and regulations, as amended from time to time.
4. PROHIBITED USES AND ACTS
Tenant shall not commit or permit the commission of any acts on the Leased
Space nor use or permit the use of the Leased Space for any of the
following purposes:
4.1 Increases the existing rates for or causes cancellation of any fire,
casualty, liability, or other insurance policy insuring the Building
or its contents;
4.2 Violates or conflicts with any law, statute, ordinance, or
governmental rule or regulation, whether now in force or hereinafter
enacted, governing the Leased Space or the Building;
4.3 Obstructs or interferes with the rights of other tenants or
occupants of the Building or injures or annoys them;
4.4 Constitutes the commission of waste on the Leased Space or the
commission or maintenance of a nuisance as defined by the laws of
California;
4.5 No discharge of chemicals or hazardous materials shall be made to
the sewer or regular trash.
4.6 Tenant agrees that during the Term of this Lease, Tenant will have
contact with and access to Landlord's employees. Tenant recognizes
that interference with the employment relationship between Landlord
and its employees would cause substantial and irreparable harm to
Landlord. Therefore, as part of the consideration for this Lease,
Tenant hereby covenants and agrees that it will not, either during
the Term of this Lease or for a period of one (1) year after
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Agreement No._________
termination or expiration of this Lease, either directly or
indirectly, by any means or device whatsoever, solicit or otherwise
induce or attempt to induce any of Landlord's employees to terminate
their employment with Landlord.
5. ALTERATIONS BY TENANT
5.1 No alteration, addition, or improvement to the Leased Space shall be
made by Tenant without the prior written consent of Landlord.
Concurrently with requesting Landlord's consent to the proposed
alteration, addition, or improvement, Tenant shall submit to
Landlord preliminary plans for the alteration, addition, or
improvement. Landlord shall, in its reasonable discretion, approve
or disapprove the proposed alteration, addition, or improvement,
within thirty (30) days after its receipt of Tenant's written
request for approval. If Landlord fails to affirmatively approve or
disapprove the proposed alteration, addition, or improvement within
the thirty (30) day period, the proposed alteration, addition, or
improvement shall be deemed disapproved. If Landlord gives such
written consent to any alteration, addition, or improvement to the
Leased Space, Landlord and Tenant shall agree in writing at that
time to the date when that undertaking shall be completed.
5.2 All alterations, additions, or improvements shall be performed by
Landlord's staff or its designee. Tenant shall obtain all necessary
governmental permits required for any alteration, addition, or
improvement approved by Landlord and shall comply with all
applicable governmental law, regulations, ordinances, and codes. Any
alteration, addition, or improvement not including removable
equipment made by Tenant after consent has been given, and any
fixtures installed as part of the construction, shall at Landlord's
option become the property of Landlord on the expiration or other
earlier termination of this Lease; provided, however, that Landlord
shall have the right to require Tenant to remove the fixtures at
Tenant's cost on termination of this Lease. If Tenant is required by
Landlord to remove the fixtures on termination of this Lease, Tenant
shall repair and restore any damages to the Leased Space caused by
such removal.
5.3 Except for the alterations which Landlord may make at its sole
option in order to prepare the Leased Space for Tenant's occupancy,
the costs of any alterations ("Alteration Costs") required by or
requested by Tenant shall be paid for by Tenant within thirty (30)
days of receipt of Landlord's invoice. In Landlord's sole
discretion, the Alteration Costs may become additional rent
("Additional Rent") and shall be paid by Tenant according to such
terms as the parties may agree. Landlord reserves the right to
require that Tenant execute a non-terminable extension to this Lease
as a condition of Landlord's accepting payment for the Alteration
Costs as Additional Rent. Should Tenant vacate or abandon the Leased
Space prior to payment of all of the Additional Rent, all
outstanding Additional Rent shall immediately become due upon
Tenant's notice of termination to Landlord or upon
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Agreement No._________
termination of this Lease if Tenant fails to give notice of
termination to Landlord. The outstanding sum must be paid whether or
not Tenant has properly terminated this Lease. Landlord may treat
Tenant's failure to pay Additional Rent as it would any other
material breach of this Lease.
6. SERVICES PROVIDED BY LANDLORD
6.1 Landlord shall provide heat, HVAC, electricity, water, and
janitorial service, all of which shall be included in the Rent.
Landlord shall also provide health and safety response, which shall
include emergency response, fire code and health and safety
inspections, liaison services in dealing with fire code matters
only, pest control, and investigation and abatement of air quality
issues.
6.2 Landlord may, in its sole discretion, provide Tenant with telephone
and other communication equipment and lines which shall be installed
and maintained by Landlord's PRB Telecommunication Services pursuant
to a Services Agreement to be executed contemporaneously with this
Lease. Landlord reserves the right to modify its telecommunications
system if, in the reasonable opinion of Landlord, it is advisable or
desirable. Tenant shall be responsible for the costs of all of
Tenant's incoming or outgoing calls. If Landlord provides telephone
service, Tenant agrees to execute such other agreements as Landlord
may reasonably require including but not limited to a hold harmless
agreement.
6.3 Cleaning and maintenance of the office space in the Leased Space
shall be regularly performed according to a schedule established by
Landlord, in Landlord's sole discretion.
7. SERVICES NOT PROVIDED BY LANDLORD
Space is provided on an "AS IS" basis. Any improvements, alterations, or
modifications of the Leased Space will be at Tenant's sole expense. Tenant
shall obtain SRI's approval prior to altering the Leased Space. SRI
reserves the right to refuse any improvement requests. All work done must
be performed by SRI Facility staff.
8. MAINTENANCE AND REPAIRS OF LEASED SPACE
8.1 Subject to the duty of the Landlord under this Lease to provide
regular cleaning service for the Leased Space and to perform routine
maintenance and repairs for the Leased Space as needed, Tenant shall
during the Term of this Lease maintain the Leased Space, in a good,
clean, and safe condition, and shall upon expiration or earlier
termination of this Lease surrender the Leased Space to Landlord in
as good condition and repair as existed on the date of this Lease,
reasonable wear and tear and damage by the elements excepted.
Tenant, at Tenant's own expense, shall pay the reasonable costs
Page 33 of 54
Agreement No._________
to repair all deterioration or damages to the Leased Space or to the
Building occasioned by Tenant's negligence or willful misconduct.
8.2 Except as otherwise provided in this Lease, Landlord shall perform,
at Landlord's sole expense, all repairs and maintenance for the
Leased Space and the Building. Any repairs by Landlord shall be made
promptly with first-class materials, in a good and workmanlike
manner, in compliance with all applicable laws of all governmental
authorities, and in a style, character, and quality conforming to
the existing construction. Except in the case of any emergency,
Landlord shall not enter the Leased Space for the purpose of
effecting the repairs, alterations, or improvements other than
during normal business hours, and shall give Tenant twenty-four (24)
hours notice of the intention to enter for those purposes.
8.3 Except for cases of emergency, Landlord shall make all repairs
required hereunder as soon as is reasonably practical.
9. INSPECTION BY LANDLORD
Upon twenty-four (24) hours prior written notice from Landlord, Tenant
shall permit Landlord or Landlord's agents, representatives, or employees
to enter the Leased Space at all reasonable times for the purpose of
inspecting the Leased Space to determine whether Tenant is complying with
the terms of this Lease and for the purpose of doing other lawful acts
that may be necessary to protect Landlord's interests. In the event Tenant
fails to timely perform its obligations under this Lease, Landlord shall
have the right (but shall not be obligated) to perform Tenant's
obligations under this paragraph, in which event, Tenant shall pay to
Landlord, as Additional Rent, in ten (10) days, the costs and expenses
thereof.
10. COMMON AREAS OF BUILDING
10.1 Landlord shall make available at all reasonable times during the
Term of this Lease in any portion of the Building that Landlord from
time to time designates or relocates, automobile parking and common
areas (jointly referred to as "common areas," as that term is
defined below) as Landlord shall from time to time deem appropriate.
Tenant shall have the non-exclusive right during the Term of this
Lease to use the common areas for itself, its employees, agents,
customers, clients, invitees, and licensees.
10.2 The term "common areas" means the portions of the Building that, at
the time in question, have been designated and improved for common
use by or for the benefit of more than one tenant of the Building,
including the parking areas; access and perimeter roads; landscaped
areas; exterior walks, roofs, stairways, elevators, escalators
and/or ramps; interior corridors, elevators, stairs, and balconies;
directory equipment; the main entry lobby; restrooms; and drinking
fountains. Landlord reserves the right to redesignate a common area
for a non-common use or to designate as a
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Agreement No._________
common area a portion of the Building not previously designated a
common area.
10.3 All common areas shall be subject to the exclusive control and
management of Landlord or any other persons or nominees that
Landlord may have delegated or assigned to exercise management or
control, in whole or in part, in Landlord's place and stead.
Landlord shall have the right to close, if necessary, all or any
portion of the common areas as is deemed reasonably necessary by
Landlord in order to effect necessary repairs, maintenance, or
construction, or to maintain the safety of tenants or the general
public. Landlord will maintain the common areas in a clean, orderly,
and sanitary manner. Landlord is responsible for all repairs of the
common areas, except those required due to the negligent or
intentional conduct of Tenant.
10.4 Landlord and Landlord's nominees and assignees shall have the right
to establish, modify, amend, and enforce reasonable rules and
regulations with respect to the common areas and the Building.
Tenant shall fully and faithfully comply with and observe the rules
and regulations for the common areas and the Building ("the Building
Rules and Regulations"), of which the Leased Space is a part,
including any additions or amendments to the Building rules and
Regulations that may be hereafter enacted by Landlord in Landlord's
sole discretion. Tenant acknowledges receipt of a copy of the
Building Rules and Regulations, which are attached hereto and
incorporated into this Lease as Exhibit B. Landlord shall not be
liable in any way for failure of any other occupant of the Building,
other than the Landlord, of which the Leased Space is a part to
comply with and observe these rules and regulations.
11. PARKING RIGHTS AND OBLIGATIONS
Included in the Rent payable by Tenant under this Lease for the Leased
Space, Tenant shall have the non-exclusive right to ___________ (__)
parking spaces in the parking area, for use by it and its employees.
Subject to availability, Tenant may lease additional spaces at an
additional cost of fifty dollars ($50.00) per space, per month. Landlord
may in its sole discretion reconfigure the parking area and renumber the
parking spaces or reassign Tenant or other tenants different parking
spaces, provided that Tenant at all times is entitled to _______ (__)
parking spaces.
12. TENANT'S LIABILITY INSURANCE
12.1 For the mutual benefit of Landlord and Tenant, Tenant, at Tenant's
sole expense, shall during the Term of this Lease cause to be issued
and maintained public liability and automobile insurance in the sum
of at least five hundred thousand dollars ($500,000.00) for injury
to or death of one person, and one million dollars ($1,000,000.00)
for injury to or death of more than one person in any one accident,
insuring that Tenant against liability for injury and/or death
occurring in or on the Leased Space or the common areas. Landlord
shall be named as an additional insured and the
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Agreement No._________
policy shall contain cross-liability endorsements. Tenant shall
maintain all such insurance in full force and effect during the
entire Term of this Lease and shall pay all premiums for the
insurance. Evidence of insurance and of the payment of premiums
shall be delivered to Landlord upon request.
12.2 All insurance required under this Lease shall be issued by insurance
companies authorized to do business in California and having a
policyholder rating of at least "A". Each policy shall contain an
endorsement requiring thirty (30) days written notice from the
insurance company to Landlord before cancellation or any change in
coverage, scope, or amount of any policy. Each policy, or a
certificate showing it is in effect, together with evidence of
payment of premiums, shall be deposited with Landlord at the
commencement of the Term, and renewal certificates or copies of
renewal policies shall be delivered to Landlord at least thirty (30)
days prior to the expiration date of any policy.
12.3 Tenant shall provide and maintain at its own expense during the Term
of this Lease, or any renewals thereof, workers compensation
insurance in amounts required by applicable state laws.
12.4 If, at any time during the Term, Tenant should fail to secure or
maintain the foregoing insurance, Landlord shall be permitted but
not required to obtain such insurance in Tenant's name or as the
agent of Tenant and shall be compensated by Tenant for the cost of
the insurance premiums. Provided that, prior to purchasing the
insurance, Landlord shall provide Tenant with notice of its default
and ten (10) days in which to correct the default. Tenant shall pay
Landlord interest on paid insurance premiums at the rate of prime
plus three percent (3%) per annum with such rate not to exceed
eighteen percent (18%) per annum computed from the date written
notices are received that the premiums have been paid.
12.5 The parties hereto release each other and their respective agents,
employees, successors, assignees and subtenants from all liability
for injury to any person or damage to any property that is caused by
or results from a risk which is actually insured against, which is
required to be insured against under this Lease, or which would
normally be covered by the standard form of "all risk-extended
coverage" casualty insurance, without regard to the negligence or
willful misconduct of the entity so released. Each party shall use
its best efforts to cause each insurance policy it obtains to
provide that the insurer thereunder waives all right of recovery by
way of subrogation as required herein in connection with any injury
or damage covered by the policy. If such insurance policy cannot be
obtained with such waiver of subrogation, or if such waiver of
subrogation is only available at additional cost and the party for
whose benefit the waiver is not obtained does not pay such
additional cost, then the party obtaining such insurance shall
immediately notify the other party of that fact.
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Agreement No._________
12.6 Proceeds from any such policy or policies shall be payable to
Landlord, Tenant, and mortgagee, if any, as their interests may
appear, who shall use such proceeds to make repairs as provided
below.
12.7 Notwithstanding the fact that any liability of Tenant to Landlord
may be covered by Tenant's insurance, Tenant's liability shall in no
way be limited by the amount of insurance recovery.
13. INSURANCE FOR TENANT'S PERSONAL PROPERTY
Tenant agrees at all times during the Term of this Lease to keep, at
Tenant's sole expense, all of Tenant's personal property, including trade
fixtures and equipment that may be on or in the Leased Space from time to
time, insured against loss or damage by fire and/or theft in an amount
that will ensure the ability of Tenant to fully replace the personal
property, trade fixtures, and equipment.
14. LIABILITY INSURANCE
14.1 Landlord's Liability Insurance. Landlord shall obtain and keep in
force during the Term of this Lease a policy of Combined Single
Limit Bodily Injury and Broad Form Property Damage Insurance, plus
coverage against such other risks Landlord deems advisable from
time-to-time, insuring Landlord, but not Tenant, against liability
arising out of the ownership, use, occupancy or maintenance of the
Building.
14.2 Tenant's Liability Insurance. For the mutual benefit of Landlord and
Tenant, Tenant shall, during the Term of this Lease, cause to be
issued and maintained, public liability insurance in the sum of at
least five hundred thousand dollars ($500,000.00) for injury to or
death of one person, and one million dollars ($1,000,000.00) for
injury to or death of more than one person in any one accident,
insuring Tenant against liability for injury and/or death occurring
in or on the Leased Space or the common areas. Landlord shall be
named as an additional insured and the policy shall contain
cross-liability endorsements. Tenant shall maintain all such
insurance in full force and effect during the entire Term of this
Lease and shall pay all premiums for the insurance. Proof of
insurance and of the payment of premiums shall be delivered to
Landlord upon request.
15. LANDLORD'S PROPERTY INSURANCE
15.1 Landlord shall obtain and keep in force during the Term of this
Lease a policy or policies of insurance covering loss or damage to
the Building, but not Tenant's personal property, fixtures,
equipment or tenant improvements, in the amount of the full
replacement cost thereof, as the same may exist from time to time,
utilizing Insurance Services Office standard form, or equivalent,
providing protection against all perils included within the
classification of fire, extended coverage, vandalism, malicious
mischief, plate glass, and such other perils as Landlord deems
advisable or may be
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Agreement No._________
required by a lender having a lien on the Building. In addition,
Landlord shall obtain and keep in force, during the Term of this
Lease, a policy of rental value insurance covering a period of one
(1) year, with loss payable to Landlord. Tenant will not be named in
any such policies by Landlord and shall have no right to any
proceeds therefrom. The policies required by these Paragraphs 14 and
15 shall contain such deductibles as Landlord or the aforesaid
lender may determine. Tenant shall not do or permit to be done
anything which shall invalidate the insurance policies carried by
Landlord. Tenant shall pay the entirety of any increase in the
property insurance premium for the Building over what it was
immediately prior to the commencement of the Term of this Lease if
the increase is specified by Landlord's insurance carrier as being
caused by the nature of Tenant's occupancy or any act or omission of
Tenant.
15.2 The obligation to pay for increase in the property insurance premium
for the Building shall not apply to the extent such increase is
caused by a shift of the Building to a rental property occupied by
tenants unaffiliated with Landlord.
16. NO REPRESENTATION OF ADEQUATE COVERAGE
Landlord makes no representation that the limits or forms of coverage of
insurance specified in Paragraph 12, above, are adequate to cover Tenant's
property or obligations under this Lease.
17. INDEMNIFICATION
17.1 Landlord shall not be liable to Tenant, and Tenant hereby waives any
and all claims against Landlord, for any injury or damage to any
person or property in or about the Leased Space or any part of the
Leased Space by or from any cause whatsoever, except injury or
damage to Tenant resulting from the negligence or willful misconduct
of Landlord or Landlord's authorized agents.
17.2 Tenant shall hold Landlord harmless from and indemnify Landlord
against any and all claims or liability for any injury or damage to
any person or property whatsoever (1) occurring in, on, or about the
Leased Space or any part of it; and (2) occurring in, on, or about
the common areas of the Building when that injury or damage was
caused in part or in whole by the act or omission of Tenant, its
agents, servants, employees, or invitees.
17.3 The indemnity obligations of Tenant under this paragraph shall
survive the expiration or earlier termination of the Term of this
Lease.
17.4 Tenant hereby agrees that Landlord shall not be liable for injury to
Tenant's business or any loss of income therefrom or for 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
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Agreement No._________
Building, nor shall Landlord be liable for injury to the person of
Tenant, Tenant's employees, agents or contractors, whether such
damage or injury is caused by or results from theft, fire, steam,
electricity, gas, water or rain, or from any other cause, whether
said damage or injury results from conditions arising upon the
Premises or upon other portions of the Building, or from other
sources or places, or from new construction or the repair,
alteration or improvement of any part of the Building, or of the
equipment, fixtures or appurtenances applicable thereto, and
regardless of whether the cause of such damage or injury or the
means of repairing the same is inaccessible, Landlord shall not be
liable for any damages arising from any act or neglect of any other
tenant, occupant or user of the Building, nor from the failure of
Landlord to enforce the provisions of any other lease of any other
tenant of the Building.
17.5 Notwithstanding the foregoing terms of this paragraph, Landlord
shall not be exempt from liability for damage or injury to the
extent such damage or injury is caused by Landlord's negligence or a
breach by it of its obligations under this Lease.
18. DAMAGE OF LEASED SPACE OR BUILDING
18.1 Definitions
(a) "Premises Damage" shall mean if the Premises are damaged or
destroyed to any extent.
(b) "Premises Building Partial Damage" shall mean if 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.
(c) "Premises Building Total Destruction" shall mean if 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.
(d) "Insured Loss" shall mean damage or destruction which was
caused by an event required to be covered by the insurance
described in Paragraphs 12 through 15, above. The fact that an
Insured Loss has a deductible amount shall not make the loss
an uninsured loss.
(e) "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 damage
occurring, excluding all improvements made by Tenant.
18.2 Premises Damage; Premises Building Partial Damage
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(a) Insured Loss: Subject to the provisions of Paragraphs 18.4
and 18.5, below, 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
Premises 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.
(b) Uninsured Loss: Subject to the provisions of Paragraphs 18.4
and 18.5, below, 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
Premises Building Partial Damage, unless caused by a
negligent or willful act of Tenant (in which event Tenant
shall make the repairs at Tenant's expense) provided,
however, that Tenant shall only be obligated to pay for the
cost of repairs to the extent such cost exceeds insurance
proceeds actually received by the Landlord and Landlord has
used reasonable efforts to collect such proceeds 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 this Lease shall terminate as of
the date of the occurrence of such damage. However, if
Tenant at its option is willing to pay the cost of repairs
in excess of the insurance proceeds actually received by
Landlord, Landlord shall not be permitted to terminate the
Lease, provided Tenant pays such excess amount or provides
such other reasonable security therefor to Landlord prior to
the commencement of the repairs or restoration
18.3 Premises Building Total Destruction; Office Building Project Total
Destruction
Subject to the provisions of Paragraphs 18.4 and 18.5, below, if at
any time during the Term of this Lease there is damage, whether or
not it is an Insured Loss, which results in the Premises Building
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
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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. In the event the repair by Landlord would require more than
one hundred eighty (180) days, Tenant at its option may terminate
the Lease by giving written notice to the Landlord within thirty
(30) days after the date of the occurrence of the Premises Building
Total Destruction.
18.4 Damage Near End of Term
(a) Subject to Paragraph 18.4(b), below, if at any time during the
last nine (9) months of the Term of this Lease there is
substantial damage to the Premises, Landlord may at Landlord's
option cancel and terminate this Lease as of the date of such
damage by giving written notice to Tenant of Landlord's
election to do so within thirty (30) days after the date of
occurrence of such damage.
(b) Notwithstanding Paragraph 18.4(a), above, 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 nine (9)
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. Notwithstanding anything to the
contrary in this Lease: Tenant shall have the right to
exercise its option to extend the Term of this Lease, if
there is a Premises Building Total Destruction within the
last twelve (12) months of the Term or any extended term.
18.5 Abatement of Rent; Tenant's Remedies
(a) In the event Landlord repairs or restores the Building or
Premises, pursuant to the provisions of this Paragraph 18,
and any part of the Premises are not usable (including loss
of use due to loss of access or essential services), the
Rent payable hereunder 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
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Tenant; and (2) such abatement shall only be to the extent of
the actual proceeds received by Landlord under any rental
value insurance required to be maintained by Landlord under
this Lease and only to the extent such proceeds are allocable
in Landlord's reasonable judgment to the Premises. 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.
(b) If Landlord shall be obligated to repair or restore the
Premises or the Building, under the provisions of this
Paragraph 18, and shall not commence such repair or
restoration within ninety (90) days after such occurrence,
or if Landlord shall not complete the restoration and repair
within six (6) months after such occurrence, Tenant may at
Tenant's option cancel and terminate this Lease by giving
Landlord written notice of Tenant's election to do so at any
time prior to the commencement or completion, respectively,
of such repair or restoration. In such event this Lease
shall terminate as of the date of such notice.
(c) 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.
18.6 Termination -- Advance Payments
Upon termination of this Lease, pursuant to this Paragraph 18, an
equitable adjustment shall be made concerning advance Rent and any
advance payments made by Tenant to Landlord. Landlord shall, in
addition, return to Tenant so much of Tenant's security deposit as
has not theretofore been applied by Landlord.
18.7 Waiver
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.
19. CONDEMNATION
19.1 If all or any part of the Leased Space is taken by any public or
quasi-public agency or entity under the power of eminent domain
during the Term of this Lease;
(a) Either Landlord or Tenant may terminate this Lease by giving
the other ten (10) days written notice of termination;
provided, however, that Tenant cannot terminate this Lease
unless the portion of the Leased Space taken by eminent domain
is so extensive as to render the
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Agreement No. _____
remainder of the Leased Space useless for the uses permitted
by this Lease.
(b) If only a portion of the Leased Space is taken by eminent
domain and neither Landlord nor Tenant terminates this Lease,
the Rent thereafter payable under this Lease shall be
equitably reduced by the same percentage that the floor area
of the portion taken by eminent domain bears to the floor area
of the entire Leased Space.
19.2 If any portion of the Building other than the Leased Space is taken
by eminent domain, Landlord may, at its option, terminate this Lease
by written notice to Tenant.
19.3 Any and all damages and compensation awarded or paid because of a
taking of the Leased Space or the Building shall belong to Landlord,
and Tenant shall have no claim against Landlord or the entity
exercising eminent domain power for the value of the unexpired Term
of this Lease or any other right arising from this Lease.
19.4 Nothing in this paragraph shall preclude Tenant from filing a
separate claim against the condemning authority for the
undepreciated value of its leasehold improvements and relocation
expenses provided that any award to Tenant will not result in a
diminution of any award to Landlord.
20. ASSIGNMENT AND SUBLETTING
Tenant shall not encumber, assign, or otherwise transfer this Lease, any
right or interest in this Lease, or any right or interest in the Leased
Space without first obtaining the express prior written consent of
Landlord. Furthermore, Tenant shall not sublet the Leased Space or any
part of it or allow any other persons, other than Tenant's employees and
agents, to occupy or use the Leased Space or any part of it without the
prior, written consent of Landlord. A consent by Landlord to one
assignment subletting or occupation and use by another person shall not be
deemed to be a consent to any subsequent assignment, subletting, or
occupation and use by another person. Any encumbrance, assignment,
transfer, or subletting without the prior written consent of Landlord,
whether voluntary or involuntary, by operation of law or otherwise, is
void and shall, at the option of Landlord, terminate this Lease. The
consent of Landlord to any assignment of Tenant's interest in this Lease
or the subletting by Tenant of the Leased Space shall not be unreasonably
withheld.
21. FACILITY SECURITY
Tenant has been informed that Landlord's facility is a secure facility
which conducts classified work for the United States Government. Tenant
agrees to abide by Landlord's security policies and procedures, including
the wearing of Landlord issued identification badges by all employees and
visitors and to adhere to the provisions of the Landlord's Technology
Control Plan ("TCP"). Copies of these policies, procedures, and plans are
available in Landlord's security office.
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22. ACTS CONSTITUTING BREACH BY TENANT
At a minimum, the acts or omissions listed in this paragraph constitute a
default under and a breach of this Lease by Tenant.
22.1 The nonpayment of Rent or Additional Rent when due, when the
nonpayment continues for ten (10) days after written notice to pay
or surrender possession of the Leased Space has been given by
Landlord to Tenant;
22.2 A failure to perform any provision, covenant, or condition of this
Lease other than one for the payment of Rent, when that failure is
not cured within thirty (30) days after written notice of the
specific failure is given by Landlord to Tenant, or such longer time
as may reasonably be required to cure the default provided, however,
that Tenant has notified Landlord that it will require additional
time to cure the default and has taken substantial steps towards
curing the default in order not to be considered in breach of this
Lease.
22.3 The breach of this Lease and abandonment of the Leased Space
before expiration of the Term of this Lease;
22.4 A receiver is appointed to take possession of all or substantially
all of Tenant's assets, when the seizure is not discharged within
ten (10) days;
22.5 Tenant makes a general assignment for the benefit of creditors;
22.6 The execution, attachment, or other judicial seizure of
substantially all of Tenant's assets, when the seizure is not
discharged within ten (10) days; or
22.7 The filing by or against Tenant of a petition to have Tenant
adjudged or a petition for reorganization or arrangement under the
federal bankruptcy law unless, in the case of a petition filed
against Tenant, it is dismissed within ten (10) days.
23. LANDLORD'S REMEDIES
23.1 If Tenant breaches or is in default under this Lease, Landlord,
shall have the right at any time to give a written termination
notice to Tenant and, on the date specified in such notice, Tenant's
right to possession shall terminate and this Lease shall terminate.
Upon such termination, Landlord shall have the right to recover from
Tenant:
(a) The worth at the time of award of all unpaid Rent which had
been earned at the time of termination;
(b) The worth at the time of award of the amount by which all
unpaid Rent which would have been earned after termination
until the time of award exceeds the amount of such rental loss
that Tenant proves could have been reasonably avoided;
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(c) The worth at the time of award of the amount by which all
unpaid Rent for the balance of the Term of this Lease after
the time of award exceeds the amount of such rental loss that
Tenant proves could be reasonably avoided; and
(d) All other amounts necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform
all of Tenant's obligations under this Lease or which in the
ordinary course of things would be likely to result therefrom.
The "worth at the time of award" of the amounts referred to in
clauses (a) and (b), above, shall be computed by allowing
interest at the maximum annual interest rate of prime plus
three percent (3%), but not to exceed eighteen percent (18%).
The "worth at the time of award" of the amount referred to in
clause (c), above, shall be computed by discounting such
amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent (1%).
23.2 Even though Tenant has breached this Lease, this Lease shall
continue in effect for so long as Landlord does not terminate
Tenant's right to possession, and Landlord shall have the right to
enforce all its rights and remedies under this Lease, including the
right to recover all Rent and Additional Rent as it becomes due
under this Lease. Acts of maintenance or preservation or efforts to
relet the Leased Space or the appointment of a receiver upon
initiative of Landlord to protect Landlord's interest under this
Lease shall not constitute a termination of Tenant's right to
possession unless written notice of termination is given by Landlord
to Tenant. In addition to all other rights and remedies it may have,
Landlord shall have all of the rights and remedies of a landlord
under Section 1951.4 of the California Civil Code which reads, in
part:
"The lessor has the remedy described in California Civil Code
Section 1951.4 (lessor may continue lease in effect after
lessee's breach and abandonment and recover rent as it becomes
due, if lessee has right to sublet or assign, subject only to
reasonable limitations)."
23.3 The remedies provided for in this Lease are in addition to all other
remedies available to Landlord at law or in equity by statute or
otherwise.
23.4 All agreements and covenants to be performed or observed by Tenant
under this Lease shall be at Tenant's sole cost and expense and
without any abatement of Rent. If Tenant fails to pay any sum of
money to be paid by Tenant or to perform any other act to be
performed by Tenant under this Lease, Landlord shall have the right,
but shall not be obligated, and without waiving or releasing Tenant
from any obligations of Tenant, to make any such payment or to
perform any such other act on behalf of Tenant in accordance with
this Lease. All sums so paid by Landlord and all necessary
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incidental costs shall be deemed Additional Rent hereunder and shall
be payable by Tenant to Landlord on demand, together with interest
on all such sums from the date of expenditure by Landlord to the
date of repayment by Tenant at the annual interest rate of prime
plus three percent (3%), but not to exceed eighteen percent (18%)
per annum. Landlord shall have, in addition to all other rights and
remedies of Landlord, the same rights and remedies in the event of
the nonpayment of such sums plus interest by Tenant as in the case
of default by Tenant in the payment of Rent.
23.5 If Tenant abandons or surrenders the Premises, or is dispossessed by
process of law or otherwise, any movable furniture, equipment, trade
fixtures or personal property belonging to Tenant and left in the
Premises shall be deemed to be abandoned, at the option of Landlord,
and Landlord shall have the right to sell or otherwise dispose of
such personal property in any commercially reasonable manner.
24. DEFAULT BY TENANT
Tenant shall not be in default unless Tenant fails to perform obligations
required of Tenant within a reasonable time, but in no event later than
thirty (30) days after written notice by Landlord to Tenant and to the
holder of any first mortgage or deed of trust covering the Premises whose
name and address shall have theretofore been furnished to Landlord in
writing, specifying wherein Tenant has failed to perform such obligation;
provided, however, that if the nature of Tenant's obligation is such that
more than thirty (30) days are required for performance then Tenant shall
not be in default if Tenant commences performance within such thirty (30)
day period and thereafter diligently pursues the same to completion. If
Tenant fails to perform or commence performance as required by this
paragraph within the thirty (30) days, then Tenant shall have the right to
either terminate this Lease, effective upon the expiration of the thirty
(30) days, or to cure said default. Tenant shall upon presentation of paid
receipts by Landlord pay to Landlord its reasonable expenses associated
with said cure.
25. TERMINATION NOTICE
25.1 Either Landlord or Tenant may terminate this Lease with or without
cause upon giving written notice at least sixty (60) days before the
effective date of the termination to the other party. No act of
Landlord, including but not limited to Landlord's entry on the
Leased Space or efforts to relet the Leased Space, or the giving by
Landlord to Tenant of a notice of default, shall be construed as an
election to terminate this Lease unless a written notice of
Landlord's election to do so is given to Tenant.
25.2 No act of Landlord, including but not limited to Landlord's entry on
the Leased Space or efforts to relet the Leased Space, or the giving
by Landlord to Tenant of a notice of default, shall be construed as
an election to terminate this Lease unless a written notice of
Landlord's election to do so is given to Tenant.
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26. TENANT HOLDOVER
26.1 With Landlord Consent. If Tenant continues, with the knowledge and
written consent of Landlord obtained at least thirty (30) days prior
to the expiration of the Term of this Lease, to remain in the
premises after the expiration of the Term of this Lease, then and in
that event, Tenant shall, by virtue of this holdover agreement,
become a tenant by the month at the Rent stipulated by Landlord in
said holdover agreement, commencing said monthly tenancy with the
first day next after the end of the Term above demised. Tenant shall
give to Landlord at least thirty (30) days written notice of any
intention to quit said premises. Tenant shall be entitled to thirty
(30) days written notice to quit said premises, except in the event
of nonpayment of Rent in advance or of the breach of any other
covenant by Tenant, in which event Tenant shall not be entitled to
any notice to quit, the usual thirty (30) days notice to quit being
hereby expressly waived.
26.2 Without Landlord Consent. In the event that Tenant, without the
consent of Landlord, shall hold over the expiration of the Term
hereby created, then Tenant hereby waives all notice to quit and
agrees to pay to Landlord for the period that Tenant is in
possession after the expiration of this Lease, a monthly Rent which
is one and one-half times the total Rent (Rent, as stipulated in
Paragraph 2, above, plus Additional Rent) applicable to the last
month of this Lease. Tenant expressly agrees to hold Landlord
harmless from all loss and damages, direct and consequential, which
Landlord may suffer in defense of claims by other parties against
Landlord arising out of the holding over by Tenant, including
without limitation attorneys' fees which may be incurred by Landlord
in defense of such claims. Acceptance of Rent as defined by this
paragraph by Landlord subsequent to the expiration of the Term of
this Lease, shall not constitute consent to any holding over.
Landlord shall have the right to apply all payments received after
the expiration date of this Lease or any renewal thereof toward
payment for use and occupancy of the premises subsequent to the
expiration of the Term and toward any other sums owed by Tenant to
Landlord. Landlord, at its option, may forthwith re-enter and take
possession of said premises without process, or by any legal process
in force. Notwithstanding the foregoing, Tenant's holdover without
Landlord consent due to acts of God, riot, or war shall be at the
total Rent applicable to the last month of the term for the duration
of the condition (but not to exceed ten (10) days), but such
continued occupancy shall not create any renewal of the Term of this
Lease or a tenancy from year-to-year, and Tenant shall be liable for
any loss and damages suffered by Landlord as described above.
27. QUIET ENJOYMENT
So long as Tenant shall observe and perform the covenants and agreements
binding on it hereunder, Tenant shall at all times during the Term herein
granted, peacefully and quietly have and enjoy possession of the premises
without any encumbrance or
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hindrance by, from or through Landlord, except as provided for elsewhere
under this Lease. Nothing in this paragraph shall prevent Landlord from
performing alterations or repairs on other portions of the building not
leased to Tenant, nor shall performance of such alterations or repairs be
construed as a breach of this covenant by Landlord.
28. WAIVER OF JURY TRIAL
Landlord and Tenant hereby waive trial by jury in any action, proceeding
or counterclaim brought by either of the parties hereto against the other
one or in respect of any matter whatsoever arising out of or in any way
connected with this Lease, the relationship of Landlord and Tenant
hereunder, Tenant's use or occupancy of the demised premises, and/or any
claim of "injury or damage."
29. LIMITATION OF LIABILITY
Notwithstanding anything to the contrary contained in this Lease, if any
provision of this Lease expressly or impliedly obligates Landlord not to
unreasonably withhold its consent or approval, an action for declaratory
judgment or specific performance will be Tenant's sole right and remedy in
any dispute as to whether Landlord has breached such obligation.
30. PRONOUNS AND DEFINITIONS
30.1 Feminine or neuter pronouns shall be substituted for those of the
masculine form, and the plural shall be substituted for the singular
number, in any place or places herein in which the context may
require such substitution or substitutions. Landlord and Tenant
herein for convenience have been referred to in the neuter form.
30.2 Wherever the word "premises" or "demised premises" is used in this
Lease, it shall refer to the Leased Space as defined herein, unless
the context clearly requires otherwise.
31. WAIVER OF BREACH
Landlord's waiver of any breach by Tenant shall not be effective unless in
writing. The waiver by Landlord of any breach by Tenant of any of the
provisions of this Lease shall not constitute a continuing waiver or a
waiver of any subsequent default or breach by Tenant either of the same or
a different provision of this Lease.
31. NOTICES
31.1 Except as otherwise expressly provided by law, any and all notices
or other communications required or permitted by this Lease or by
law to be served on or given to either party to this Lease by the
other party shall be in writing, and shall be deemed duly served and
given when personally delivered to the party to whom it is directed
or the below identified representative of the party or designee or,
in lieu of personal service, when
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deposited in the United States mail, certified mail, return receipt
requested, postage prepaid, addressed to Landlord at 000 Xxxxxxxxxx
Xxxxxx, Xxxxx Xxxx, Xxxxxxxxxx 00000 or to Tenant at 000 Xxxxxxxxxx
Xxxxxx, Xxxxx Xxxx, Xxxxxxxxxx 00000. Any notice properly addressed
and given by United States certified mail, postage prepaid,
return-receipt requested, shall be deemed given three (3) business
days after such notice is deposited in the United States mail.
Either party may change its address for purposes of this paragraph
by giving written notice of the change to the other party in the
manner provided in this paragraph.
31.2 For purposes of all communications to occur during the Term of this
Lease, the parties initially have identified the following
representatives:
Landlord's Representative Tenant's Representative
_________________________ _______________________
Xxxxxx Xxxxxx ______________
Corporate Director, Support Operations ______________________
The parties may, upon notice given as required by this Lease, change
their designated representative.
33. ATTORNEYS' FEES
If any litigation is commenced between the parties to this Lease
concerning the Leased Space, this Lease, or the rights and duties of
either in relation to the Leased Space or the lease, the party prevailing
in that litigation shall be entitled, in addition to any other relief
granted, to a reasonable sum as and for its attorneys' fees in litigation,
which sum shall be determined by the court in that litigation.
34. BINDING ON HEIRS AND SUCCESSORS
This Lease shall be binding on and shall inure to the benefit of the
heirs, executors, administrators, successors, and assigns of the parties,
but nothing in this paragraph shall be construed as a consent by Landlord
to any assignment of this Lease or any interest therein by Tenant.
35. TIME OF ESSENCE
Time is expressly declared to be of the essence in this Lease.
36. SOLE AND ONLY AGREEMENT
This instrument constitutes the sole and only agreement between Landlord
and Tenant respecting the Leased Space or the leasing of the Leased Space
to Tenant, and sets forth the obligations of Landlord and Tenant to each
other as of its date. Any agreements or representations respecting the
Leased Space or their leasing by Landlord to Tenant not expressly set
forth in this instrument or an amendment hereto executed by both parties
are null and void.
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37. CONSENT
Whenever this Lease requires an approval, consent, designation,
determination or judgment by either Landlord or Tenant, such approval,
consent, designation, determination or judgment shall be reasonable, shall
not be unreasonably withheld or delayed unless otherwise indicated herein,
and, in exercising any right or remedy hereunder, each party shall at all
times act reasonably and in good faith.
38. BROKERS
Each party represents that it has not had dealings with any real estate
broker, finder or other person, with respect to this Lease. Landlord shall
indemnify and hold Tenant harmless from all liability and damages
resulting from any claims that may be asserted against Landlord and/or
Tenant by any broker, finder or other person with whom the Landlord or its
agents or employees has, or purportedly has, dealt. Tenant shall indemnify
and hold Landlord harmless from all liability or damages resulting from
any claims that may be asserted against Landlord and/or Tenant by any
broker, finder or other person with whom the Tenant or its agents or
employees has, or purportedly has dealt.
39. MISCELLANEOUS
39.1 This Lease shall be governed by and construed in accordance with the
laws of the State of California, other than the law regarding
conflicts of laws.
39.2 Should any provision of this Lease be held to be void, invalid, or
inoperative, the remaining provisions of this Lease shall not be
affected and shall continue in effect as though such provisions were
deleted.
39.3 Neither party shall be deemed in default of this Lease to the extent
that performance of their obligations or attempts to cure any breach
are delayed or prevented by reason of any act of God, fire, natural
disaster, accident, act of government, shortages of materials or
supplies, or any other cause beyond the control of such party
("Force Majeure") provided that such party gives the other party
written notice thereof promptly and, in any event, within fifteen
(15) days of discovery thereof and uses its best efforts to cure the
delay. In the event of such Force Majeure, the time for performance
or cure shall be extended for a period equal to the duration of the
Force Majeure or three (3) months, whichever is shorter.
39.4 This Lease may be executed in duplicate counterparts, each of which
will be deemed to be an original but both of which together will
constitute one and the same instrument.
EXECUTED on ______________, ____, at Menlo Park, San Mateo County, California.
SRI INTERNATIONAL TENANT
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Agreement No._________
By: _____________________________ By: ________________________________
Name: ___________________________ Name: ______________________________
Title: __________________________ Title: _____________________________
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Agreement No._________
EXHIBIT A TO LEASE
LEASED SPACE
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Agreement No._________
EXHIBIT B TO LEASE
BUILDING RULES AND REGULATIONS
B.1 Halls and Stairways. Tenants shall not loiter in the halls and entryways,
nor permit their employees or patrons to loiter in the halls and
entryways, and shall not obstruct in any way the entryways, passages,
stairways, elevators, and halls of the Building or use them for any other
purpose than ingress and egress to and from their respective offices.
B.2 Signs. No sign, placard, picture, name advertisement, or notice visible
from outside a Tenant's premises shall be displayed in or on the Building
without the express written consent of Landlord, and Landlord may remove,
at the expense of Tenant, any sign, placard, picture, name, advertisement,
or notice so displayed. Landlord shall prepare and install signs
identifying Tenant's location at Tenant's expense.
B.3 Locks and Keys. Tenant shall not change or alter any lock without
Landlord's prior written consent. No additional lock or locks shall be
placed on any door in the Leased Space by Tenant without the prior written
consent of Landlord. Tenant shall receive, without cost, two (2) keys to
each door having a lock in Tenant's Leased Space. If Tenant desires extra
keys to any door, Tenant must obtain them from Landlord and Landlord may
impose a reasonable charge for them.
B.4 Wiring and Electricity. Wiring of any kind shall be introduced in the
Building and connected only as directed by Landlord, and no boring or
cutting for wires will be allowed except with the prior consent of
Landlord. The location of all telephones and call boxes affixed to the
Building shall be prescribed by Landlord.
B.5 Connection of Machinery. Tenant shall not connect any apparatus,
machinery, or device to the electric wires, water, or air pipes of the
Building without the consent of Landlord.
B.6 Moving Furniture and Equipment. Landlord shall prescribe the
permissible times for moving equipment and furniture into the Building
and Tenant's Leased Space. Tenant shall give Landlord at least
twenty-four (24) hours' advance notice of the time Tenant intends to
move furniture or equipment into Tenant's Leased Space. Landlord shall
not be liable for any damage or loss caused by the moving of the
furniture or equipment, and any damage to Building or Leased Space
caused by the moving furniture or equipment shall be repaired by
Landlord at Tenant's expense.
B.7 Obstructing Light. The glass doors, windows, lights, and skylights
admitting light into the halls and other common areas of the Building
shall not at any time be covered or obstructed by Tenant.
B.8 Landlord's Office and Employees. Any request of Tenant for service or any
other matter connected with the Building must be made to and at the SRI
Facilities department in Building 303, (000) 000-0000, Monday through
Friday during
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Agreement No._________
regular business hours. In the event of an emergency during off-hours,
Tenant shall contact SRI Security, Building E, (000) 000-0000.
B.9 Locking of Entrance Doors. All entrance and exit doors of the Building
shall be open and unlocked by Landlord during the following hours:
Monday through Friday, from 6:30 a.m. to 6:00 p.m. At all other times,
including all national holidays, all entrance and exit doors shall be
locked.
B.10 Entry After Building Closed. Any person entering or leaving the Building
at any time when its entrance and exit doors are closed and locked may be
questioned about his or her business in entering or leaving the Building,
and may be required to sign the Building register by security personnel.
Any person not satisfying the security personnel that he or she has a
right to enter the Building may be excluded from the Building.
Tenant shall notify Landlord's Security Department any time Tenant or its
employees will perform hazardous chemical operations outside of normal
business hours. Tenant must provide notice prior to commencement of the
operation and at its conclusion.
B.11 Removal of Persons. Landlord reserves the right to exclude and expel from
the Building any person who, in the judgment of Landlord, is intoxicated
or under the influence of any intoxicating beverage or drug or who in any
manner violates any of these rules and regulations or creates, in the
judgment of Landlord, a disturbance in the Building.
B.12 No Canvassing or Soliciting. Canvassing, soliciting, and peddling in the
Building are prohibited and Tenant shall promptly report to Landlord any
person found by him or her to be canvassing, soliciting or peddling in the
Building.
B.13 No Smoking. Tenant acknowledges that Landlord operates a nonsmoking
facility and that smoking is not permitted in or on the Premises at any
time. Tenant shall not allow its employees, guests or invitees to smoke in
or on the Premises at any time.
B.14 Further Rules and Regulations. Landlord reserves the right to amend these
rules and regulations and to make any other and further rules and
regulations for the Building that, from time-to-time in the reasonable
judgment of Landlord, are required for the orderly and safe conduct of
Building operations.
B.15 Pets/Animals on Premises. Except for seeing eye dogs or other handicap
assist trained animals, no pets or animals are permitted in or on the
Premises. Tenant shall not allow its employees, guests or invitees to
bring animals in the Building or on the Premises at any time.
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