LEASE
BY AND BETWEEN
ARE-4757 NEXUS CENTRE, LLC
as Landlord
and
MATRIX PHARMACEUTICAL, INC.
as Tenant
LEASE
THIS LEASE is made as of March 25, 1998 ("Effective Date"), by and
between ARE-4757 NEXUS CENTRE, LLC, a Delaware limited liability company
("Landlord") and MATRIX PHARMACEUTICAL, INC., a Delaware corporation ("Tenant").
1. Lease of Premises
Landlord hereby leases to Tenant and Tenant hereby leases from Landlord
upon the terms and conditions hereof, those certain premises (the "Demised
Premises") located on the land legally described on Exhibit "A" attached hereto
(the "Land") and commonly known as the building located at the address set forth
below in Section 2.1.1 (the "Building"). The real property upon which the
Building is located and all landscaping, parking facilities and other
improvements and appurtenances related thereto, are hereinafter collectively
referred to as the "Project", the site plan and legal description for which is
attached hereto as Exhibit "B". All portions of the Project which in a
multi-tenant complex would be for the non-exclusive use of tenants of the
Building, including, without limitation, driveways, sidewalks, parking areas,
landscaped areas, service corridors, stairways, elevators, public restrooms and
Building lobbies, are hereinafter referred to as "Common Area".
2. Basic Lease Provisions
2.1. For convenience of the parties, certain basic provisions of this
Lease are set forth herein. The provisions set forth herein are subject to the
remaining terms and conditions of this Lease and are to be interpreted in light
of such remaining terms and conditions.
2.1.1 Address of the Building:
0000 Xxxxx Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx
2.1.2 [Intentionally omitted.]
2.1.3 (a) Rentable Area of Demised Premises: 67,050 sq.
ft.
(b) Rentable Area of Building: 67,050 sq. ft.
2.1.4 Initial Basic Annual Rent: $1,920,000
2.1.5 Initial Monthly Rental Installments of Basic Annual
Rent: $160,000
2.1.6 Tenant's Pro Rata Share: 100 % of the Building, and
100% of the Project
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2.1.7 (a) Term Commencement Date: As defined in Section
4.2 hereof.
(b) Term Expiration Date: The last day of the
calendar month in which the thirteenth
anniversary of the Term Commencement Date
occurs, subject to extension or earlier
termination as provided herein.
2.1.8 Security Deposit: $2,580,000, to be deposited in
accordance with and subject to increase and
decrease in accordance with Section 9 hereof.
2.1.9 Permitted Use: Scientific research laboratories and
related manufacturing, distribution and office uses
and incidental storage uses consistent with Section
10 hereof.
2.1.10 Address for Rent Payment:
000 Xxxxx Xxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Corporate Secretary
Address for Notices to Landlord:
000 Xxxxx Xxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: Corporate Secretary
With a copy to:
00000 Xxxx Xxxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
2.1.11 Address for Notices to Tenant:
00000 Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxx
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3. Term
3.1. This Lease shall take effect upon the Effective Date and, except
as specifically otherwise provide within this Lease, each of the provisions
hereof shall be binding upon and inure to the benefit of Landlord and Tenant,
and each of their respective successors and permitted assigns, from the
Effective Date.
3.2. The term of this Lease (the "Term") will be that period from the
Term Commencement Date as defined in Section 4.2 below through the Term
Expiration Date, as such may be terminated or extended as provided herein.
4. Possession and Commencement Date
4.1. Landlord shall tender possession of the Demised Premises to Tenant
on the Effective Date.
4.2. The "Term Commencement Date" shall be the Effective Date.
4.3. [Intentionally omitted.]
4.4. Access to and non-exclusive possession of areas necessary for
utilities, services, safety and operation of the Building and the Project is
reserved to Landlord.
5. Rent
5.1. Tenant agrees, commencing on the Term Commencement Date, to pay
Landlord as Basic Annual Rent for the Demised Premises the sum set forth in
Section 2.1.4 subject to the rental increases provided in Section 6 hereof.
Basic Annual Rent shall be paid in the equal monthly installments set forth in
Section 2.1.5, subject to the rental increases provided in Section 6 hereof,
each in advance on the first day of each and every calendar month during the
Term.
5.2. In addition to Basic Annual Rent, Tenant agrees to pay to Landlord
as additional rent ("Additional Rent") at times hereinafter specified in this
Lease (i) Tenant's pro rata share, as set forth in Section 2.1.6 ("Tenant's Pro
Rata Share") of Operating Expenses as provided in Section 7 and (ii) any other
amounts that Tenant assumes or agrees to pay under the provisions of this Lease
that are owed to Landlord, including, without limitation, any and all other sums
that may become due by reason of any default of Tenant or failure on Tenant's
part to comply with the agreements, terms, covenants and conditions of this
Lease to be performed by Tenant, after notice and lapse of applicable cure
period.
5.3. Basic Annual Rent and Additional Rent shall together be
denominated "Rent". Rent shall be paid to Landlord, without abatement,
deduction, or offset, in lawful money of the United States of America, at the
office of Landlord as set forth in Section 2.1.10 or to such other
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person or at such other place as Landlord may from time designate in writing. In
the event the Term commences or ends on a day other than the first day of a
calendar month, then the Rent for such fraction of a month shall be prorated for
such period on the basis of a thirty (30) day month and shall be paid at the
then current rate for such fractional month.
6. Rent Adjustments
6.1. Basic Annual Rent shall be adjusted on the fifth (5th) anniversary
of the Term Commencement Date, and on such date every three (3) years thereafter
during the Term (each, a "Rent Adjustment Date") in proportion to increases in
the Consumer Price Index (as hereinafter defined) as provided within this
Section 6. The each such adjustment shall become effective commencing on the
Rent Adjustment Date. Basic Annual Rent shall be adjusted upward as follows:
6.2. The Basic Annual Rent shall be adjusted upward as follows:
6.2.1 For purposes of each Rent Adjustment Date, the "Base
Month" shall be that month which is three (3) months prior to the month in which
the previous Rent Adjustment Date occurred, or, in the case of the first Rent
Adjustment Date, the Term Commencement Date. The "Comparison Month" shall be
that month which is three (3) months prior to the month in which the Rent
Adjustment Date occurs.
6.2.2 As used in this Section 6, the term "Consumer Price
Index" means the Consumer Price Index (all items) for all wage earners and
clerical workers in the Los Angeles/Riverside xxxxxxxxxxxx xxxx (0000-00 = 100)
as published by the United States Department of Labor, Bureau of Labor
Statistics. If the 1982-84 base of the Consumer Price Index is hereafter
changed, then the new base will be converted to the 1982-84 base and the base as
so converted shall be used. In the event that the Bureau ceases to publish the
Consumer Price Index at lease once every other month, then the successor or most
nearly comparable index thereto reasonably selected by Landlord shall be used.
6.2.3 In the event that the Consumer Price Index for the
Comparison Month exceeds the Consumer Price Index for the Base Month, the Basic
Annual Rent then payable (as increased by previous adjustments under this
Section 6) shall be multiplied by a fraction, the numerator of which is the
Consumer Price Index figure for the Comparison Month, and the denominator of
which is the Consumer Price Index figure for the Base Month. Such amount as
calculated shall be the Basic Annual Rent to be paid until the next Rent
Adjustment Date.
6.2.4 Notwithstanding the foregoing, on every Rent Adjustment
Date Basic Annual Rent shall increase on account of any such adjustment a
minimum of the aggregate of two percent (2%) of the Basic Annual Rent per year
for each year during the period since the previous Rent Adjustment Date, and
shall not increase more than the aggregate of four percent (4%) of the Basic
Annual Rent per year for each year during the period since the previous Rent
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Adjustment Date.
7. Operating Expenses
7.1. As used herein, the term "Operating Expenses" shall include:
7.1.1 Government impositions including, without limitation,
property tax costs consisting of real and personal property taxes and
assessments (including amounts due under any improvement bond upon the Building
or the Project, including the parcel or parcels of real property upon which the
Building or the Project are located or assessments levied in lieu thereof)
imposed by any governmental authority or agency; any tax on or measured by gross
rentals received from the rental of space in the Building, or tax based on the
square footage of the Demised Premises, the Building or the Project as well as
any parking charges, utilities surcharges, or any other costs levied, assessed
or imposed by, or at the direction of, or resulting from statutes or
regulations, or interpretations thereof, promulgated by any federal, state,
regional, municipal or local government authority in connection with the use or
occupancy of the Building or the parking facilities serving the Building
including those located on any adjacent parcel to the extent used by or
benefitting the Demised Premises; any tax on this transaction or any document to
which Tenant is a party creating or transferring an interest in the Demised
Premises; any fee for a business license to operate an office building; and any
expenses, including the reasonable cost of attorneys or experts, reasonably
incurred by Landlord in seeking reduction by the taxing authority of the
applicable taxes, less tax refunds obtained as a result of an application for
review thereof. Operating Expenses shall not include (i) any net income
franchise, capital stock, estate or inheritance taxes, (ii) taxes which are the
personal obligation of Tenant or of another tenant of the Project, (iii) any
government impositions arising from any legal parcel of the Project adjacent to
the Land whether or not owned by Landlord, and any improvements thereto, to the
extent not used by or benefitting the Demised Premises, (iv) any environmental
assessment, charges or liens arising in connection with remediation of Hazardous
Materials from the Project which are caused by Landlord to be brought upon, kept
or used in or about the Demised Premises, the Building or the Project, (v)
reserves for future taxes and assessments in excess of the installment of taxes
and assessments next coming due, or any documentary transfer taxes arising from
a voluntary transfer of the Project or any portion thereof by Landlord. If a
reduction in real property taxes or assessments is obtained for any year of the
Term during which Tenant paid Tenant's Pro Rata Share of Operating Expenses,
then Operating Expenses for such year shall be retroactively adjusted, and
Landlord shall provide Tenant with a credit against Tenant's next due
obligations for Rent in the amount of such reduction (or, if none, refund such
amount to Tenant within ninety (90) days of such reduction). Landlord hereby
agrees to contest increases in the tax rate and assessed valuation of the
Project, which affect the general real estate tax component of Operating
Expenses or any other increase in taxes customarily protested by prudent owners
of commercial office buildings in the City of San Diego in a manner appropriate
for such an owner if requested by Tenant and provided that Tenant shall bear all
cost and expense in connection with such contest. If, by applicable law, any
taxes or assessments may be paid in installments at the option of the taxpayer,
then whether or not
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Landlord elects to pay taxes and assessments in installments, Tenant's liability
for such taxes and assessments shall be computed as if such election had been
made, and only the installments thereof and any interest or fee payable thereon
which would have become due during the Term shall be included in Tenant's Pro
Rata Share of Operating Expenses.
7.1.2 All other costs of any kind paid or incurred by Landlord
and not otherwise paid by Tenant in connection with the operation and
maintenance of the Building and the Project including, by way of examples and
not as a limitation upon the generality of the foregoing, costs of repairs and
replacements to the Building or the other improvements within the Project as
appropriate to maintain Building or the Project as required hereunder; costs of
utilities furnished to the Common Areas; sewer fees; cable T.V.; trash
collection; cleaning, including windows; heating; ventilation; air-conditioning;
maintenance of landscape and grounds; maintenance of drives and parking areas;
security services and devices; building supplies; maintenance for and
replacement of equipment utilized for operation and maintenance of the Project:
license, permit and inspection fees; sales, use and excise taxes on goods and
services purchased by Landlord in connection with the operation, maintenance or
repair of the Project and Building systems and equipment; telephone, postage,
stationary supplies and other expenses incurred in connection with the
operation, maintenance, or repair of the Project; accounting, legal and other
professional fees and expenses incurred in connection with the Project; the cost
of furniture, draperies, carpeting, landscaping and other customary and ordinary
items of personal property provided by Landlord for use in Common Areas; capital
expenditures; costs of complying with any applicable laws or hazardous waste
remediation rules or regulations; insurance premiums, including premiums for
public liability, property casualty, earthquake and environmental coverages;
portions of insured losses paid by Landlord as part of the deductible portion of
such losses by reason of insurance policy terms; service contracts; costs of
services of independent contractors retained to do work of nature or type herein
referenced; and costs of compensation (including employment taxes and fringe
benefits) of all persons who perform regular and recurring duties connected with
the day-to-day operation and maintenance of the Project, its equipment, the
adjacent walks, landscaped areas, drives, and parking areas below the level of
Project manager, including without limitation, janitors, floor waxers,
window-washers, watchmen, gardeners, sweepers, and handymen and costs of
management services in the amount of $2,000 per month during the Term. The cost
of any capital expenditures by Landlord reimbursed as Operating Expenses
pursuant to this Lease shall be amortized on a straight-line basis over a period
equal to the useful life of the item as determined by reference to the vendor's
or manufacturer's suggested useful life for such capital improvements or, where
such reference does not exist, by reference to generally accepted accounting
principals, consistently applied, but not more than seven years.
7.1.3 Notwithstanding the foregoing, Operating Expenses shall
not include any leasing commissions; expenses which relate to preparation of
rental space for a tenant; expenses of initial development and construction,
including but not limited to, grading, paving, landscaping, and decorating (as
distinguished from maintenance repair and replacement of the foregoing); legal
expenses relating to other tenants; costs of repair to the extent reimbursed by
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payment received by Landlord of insurance proceeds; interest upon loans to
Landlord or secured by mortgages or deeds of trust covering the Project or a
portion thereof (provided interest upon a government assessment or improvement
bond payable in installments is an Operating Expense under Section 7.1.1 above);
salaries of executive officers of Landlord; depreciation claimed by Landlord for
tax purposes (provided this exclusion of "depreciation" is not intended to
delete from Operating Expenses actual costs of repairs and replacements which
are provided for in Section 7.1.2 above); and taxes of the types set forth
within the last sentence of Section 7.1.1 above. Notwithstanding any provision
of this Lease to the contrary, the following shall not be included as Operating
Expenses: (i) any costs incurred solely due to Landlord's violation of any terms
or conditions of this Lease and not otherwise caused or contributed to by
Tenant; (ii) damage and repairs necessitated solely by the gross negligence or
willful misconduct of Landlord or its agents, employees, contractors or invitees
and not otherwise caused or contributed to by Tenant; (iii) advertising,
promotional, and marketing costs, including leasing commissions and attorneys'
fees in connection with the negotiation and preparation of letters, deal memos,
letters of intent, leases or space planning costs with respect to tenants other
than Tenant; (iv) costs, including permit, license and inspection costs,
incurred with respect to the development or construction of any other buildings
of the Project not for the benefit of Tenant, or the installation of other
tenants or other occupants in the Project, improvements made to the demised
premises of other tenants or other occupants in the Project or incurred in
designing, constructing, renovating or otherwise improving, decorating, painting
or redecorating vacant space for tenants or other occupants of the Project other
than Tenant; (v) any costs, fines, or penalties incurred due to violations by
Landlord of any governmental rule or authority, this Lease or any other lease in
the Project and not otherwise caused or contributed to by Tenant, or due to
Landlord's gross negligence or willful misconduct; (vi) Landlord's general
corporate overhead and administrative expenses (which shall be covered by the
costs of management services); and (vii) reserves for Operating Expenses (other
than reasonable reserves for taxes, assessments, insurance and other recurring
charges which are payable less frequently than monthly for payments which are
next coming due, which may be collected and held by Landlord only upon and
during the continuance of a Default). Landlord agrees to exercise care that
there be no duplication of submittals of items of expense for which Tenant is
obligated to pay Landlord under this Lease.
7.2. Tenant shall pay to Landlord on the first day of each calendar
month of the Term, as Additional Rent, Landlord's estimate of Tenant's Pro Rata
Share of Operating Expenses with respect to the Project for such month.
7.2.1 Within ninety (90) days after the conclusion of each
calendar year, (or such longer period as may be reasonably required) Landlord
shall furnish to Tenant a statement showing in reasonable detail the actual
Operating Expenses and Tenant's Pro Rata Share of Operating Expenses for the
previous calendar year. Any additional sum due from Tenant to Landlord shall be
immediately due and payable. If the amounts paid by Tenant pursuant to Section
7.2 exceeds Tenant's Pro Rata Share of Operating Expense for the previous
calendar year, Landlord shall, at Landlord's option, either (i) credit the
excess amount to the next succeeding installments of estimated Additional Rent,
or (ii) pay the excess to Tenant within
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thirty (30) days after delivery of such statements; provided, however, any
excess owing to Tenant after the expiration of the term shall be paid to Tenant
within thirty (30) days after delivery of such statements.
7.2.2 Any amount due under Section 7.2 for any period which is
less than a full month shall be prorated (based on a thirty (30) day month) for
such fractional month.
7.3. Landlord's annual statement shall be final and binding upon Tenant
unless Tenant, within one hundred twenty (120) days after Tenant's receipt
thereof, shall contest any item therein by giving written notice to Landlord,
specifying each item contested and the reason therefor. If, during such one
hundred twenty (120) day period, Tenant reasonably and in good faith questions
or contests the correctness of Landlord's statement of Tenant's Pro Rata Share
of Operating Expenses, Landlord will provide Tenant with access to Landlord's
books and records and such information as Landlord reasonably determines to be
responsive to Tenant' questions. In the event that after Tenant's review of such
information, Landlord and Tenant cannot agree upon the amount of Tenant's Pro
Rata Share of Operating Expenses, then Tenant shall have the right to have an
independent public accounting firm selected from among the ten (10) largest in
the United States hired by Tenant (at Tenant's sole cost and expense except as
hereinafter provided) and approved by Landlord (which approval shall not be
unreasonably withheld or delayed) audit and/or review such Landlord's books and
records for the year in question (the "Independent Review"). The results of any
such Independent Review shall be binding on Landlord and Tenant. If the
Independent Review shows that Tenant's Pro Rata Share of Operating Expenses
actually paid for the calendar year in question exceeded Tenant's obligations
for such calendar year, Landlord shall at Landlord's option either (1) credit
the excess amount to the next succeeding installments of estimated Additional
Rent or (2) pay the excess to Tenant within thirty (30) days after delivery of
such statement and if such Independent Review determines that Tenant's Pro Rata
Share of Operating Expenses actually paid for such year exceeded Tenant's
obligations for such calendar year by the greater of 5% and $5,000, Landlord
shall pay the reasonable cost of such Independent Review. If the Independent
Review shows that Tenant's payments of Tenant's Pro Rata Share of Operating
Expenses for such calendar year were less than Tenant's obligation for the
calendar year, Tenant shall pay the deficiency to the Landlord within thirty
(30) days after delivery of such statement.
7.4. Tenant shall not be responsible for Operating Expenses
attributable to the time period prior to the Term Commencement Date. The
responsibility of Tenant for Tenant's Pro Rata Share of Operating Expenses shall
continue to the latest of (i) the Term Expiration Date or (ii) the date Tenant
has fully vacated the Demised Premises (including, without limitation, the
removal of all items required hereby to be removed and the completion of all
procedures necessary to fully release and terminate any permits or licenses
restricting the use of the Demised Premises in any manner), or (iii) if
termination of the Lease is due to the default of Tenant, the date of rental
commencement of a replacement tenant.
7.5. Operating Expenses for the calendar year in which Tenant's
obligation to share
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therein commences and in the calendar year in which such obligation ceases,
shall be prorated on a basis reasonably determined by Landlord. Expenses such as
taxes, assessments and insurance premiums which are incurred for an extended
time period shall be prorated based upon time periods to which applicable so
that the amounts attributed to the Demised Premises relate in a reasonable
manner to the time period wherein Tenant has an obligation to share in Operating
Expenses. In the event that any Operating Expenses are allocable to portions of
the Project other than the Demised Premises and the Land, Landlord shall
allocate such Operating Expenses based upon the ratio of the maximum buildable
area of the Land compared to the maximum buildable area of all land comprising
the Project.
7.6. [Intentionally omitted.]
7.7. [Intentionally omitted.].
8. [Intentionally omitted.]
9. Security Deposit
9.1. Tenant has deposited with Landlord the sum set forth in Section
2.1.8 (the "Security Deposit") in cash or a Letter of Credit (as hereinafter
defined) or any combination thereof, which Security Deposit shall be held by
Landlord as security for the performance by Tenant of all of the terms,
covenants, and conditions of this Lease to be kept and performed by Tenant
during the Term (including, without limitation, Tenant's obligations to repair,
maintain and improve the Demised Premises). If Tenant defaults with respect to
any provision of this Lease, including, but not limited to, any provision
relating to the payment of Rent or the repair, maintenance or improvement of the
Demised Premises, Landlord may (but shall not be required to) use, apply or
retain all or any part of the Security Deposit for the payment of any Rent or
any other sum in default, to repair, maintain and improve the Demised Premises
or to compensate Landlord for any other loss or damage which Landlord may suffer
by reason of Tenant's default. If any portion of the Security Deposit is so used
or applied, Tenant shall, upon demand therefor, restore the Security Deposit to
its original amount, and Tenant's failure to do so shall be a material breach of
this Lease. Landlord shall keep the Security Deposit separate from its general
fund, and Tenant shall be entitled to annual payments of interest on any portion
of the Security Deposit held by Landlord as cash, at such rate as Landlord may
receive thereon.
9.2. In lieu of depositing cash as the Security Deposit, Tenant shall
have the right, but not the obligation, to deliver to Landlord an unconditional,
irrevocable standby letter of credit in the amount of $2,580,000 (the "Letter of
Credit"), which Letter of Credit shall (i) be in a form reasonably acceptable to
Landlord, (ii) be issued by Imperial Bank, or such other financial institution
selected by Tenant and reasonably acceptable to Landlord, (iii) be for the
benefit of Landlord, but shall be assignable by Landlord to any subsequent
purchaser or encumbrancer of the Building or the Project, (iv) be automatically
renewable from year to year throughout the Term, (v) be payable by draft sight
in San Diego, California, upon presentation of a certification
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signed by an officer of Landlord which states that a default under the Lease has
occurred and has not been cured within any applicable cure period, and (vi) be
payable in the event such Letter of Credit is not renewed on or before the date
which is thirty (30) days prior to its expiration.
9.3. In the event of bankruptcy or other debtor-creditor proceedings
against Tenant, the Security Deposit shall be deemed to be applied first to the
payment of Rent and other charges due Landlord for all periods prior to the
filing of such proceedings.
9.4. Landlord shall deliver the unapplied and unrefunded portion of the
Security Deposit to any purchaser of Landlord's interest in the Demised Premises
and thereupon Landlord shall be discharged from any further liability with
respect to the Security Deposit. This provision shall also apply to any
subsequent transfers.
9.5. If Tenant shall not then be in default under this Lease, the
Security Deposit, or any balance thereof, shall be returned to Tenant (or, at
Landlord's option, to the last assignee of Tenant's interest hereunder) within
sixty (60) days after the expiration or earlier termination of this Lease.
9.6. [Intentionally omitted.]
9.7. Upon delivery of written evidence reasonably satisfactory to
Landlord that Tenant has completed strategic alliances or joint ventures with a
cumulative value in excess of $10,000,000, as measured by initial and milestone
payments received by Tenant from unaffiliated joint venture or alliance
partners, and provided that no Default, or event which, with the giving of
notice or the passage of time, or both, would constitute a Default, has occurred
and is continuing, the Security Deposit shall be decreased by twenty-five
percent (25%) of the amount then held by Landlord (the "Reduction Amount"), and
(i) Landlord shall return to Tenant the Reduction Amount, if the Security
Deposit is held in cash, within ten (10) days of receipt by Landlord of such
written evidence, or (ii) Landlord shall permit Tenant to deliver a replacement
letter of credit in the amount of the Security Deposit then held by Landlord
less the Reduction Amount, which replacement letter of credit shall otherwise
comply with the terms of Section 9.2, and Landlord shall return to Tenant the
Letter of Credit upon receipt of the replacement letter, at which time the
replacement letter of credit shall become the Letter of Credit.
9.8. If, subsequent to any reduction in the Security Deposit pursuant
to Section 9.7, Landlord receives written evidence reasonably satisfactory to
Landlord that Tenant's net sales from products for the immediately preceding
fiscal year (as reported in Tenant's most recent public filings with the
Securities and Exchange Commission) were no less than $10,000,000, and provided
that no Default, or event which, with the giving of notice or the passage of
time, or both, would constitute a Default, has occurred and is continuing, the
Security Deposit shall be decreased by twenty-five percent (25%) of the amount
then held by Landlord (the "Additional Reduction Amount"), and (i) Landlord
shall return to Tenant the Additional Reduction Amount, if the Security Deposit
is held in cash, within ten (10) days of receipt by Landlord of such written
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evidence, or (ii) Landlord shall permit Tenant to deliver a replacement letter
of credit in the amount of the Security Deposit then held by Landlord less the
Additional Reduction Amount, which replacement letter of credit shall otherwise
comply with the terms of Section 9.2, and Landlord shall return to Tenant the
letter of credit then held by Landlord upon receipt of the replacement letter,
at which time the replacement letter of credit shall become the Letter of
Credit.
10. Use
10.1. Tenant shall use the Demised Premises for the purpose set forth
in Section 2.1.9 and shall not use the Demised Premises, or permit or suffer the
Demised Premises to be used, for any other purpose without the prior written
consent of Landlord which may be withheld in Landlord's sole discretion;
provided, however, that Landlord consents to the Antenna Lease (as hereinafter
defined) to the same extent as in effect as of the Effective Date.
10.2. Tenant shall not use or occupy the Demised Premises in violation
of any federal, state and local laws and regulations, zoning ordinances, or of
the certificate of occupancy issued for the Building, and shall, upon thirty
(30) days' written notice from Landlord, or, if required by law or if resulting
in a threat to human health or safety, then within five (5) days written notice
or as required by law, discontinue any use of the Demised Premises which is
declared or claimed by any governmental authority having jurisdiction to be a
violation of law, regulation or zoning ordinance or of said certificate of
occupancy, subject to Tenant's right to reasonably contest or appeal such
governmental action; provided, however, that such contest rights shall not
suspend Tenant's obligation to so comply during the pendency of any appeal or
contest. Tenant shall comply with any direction of any governmental authority
having jurisdiction which shall, by reason of the nature of Tenant's use or
occupancy of the Demised Premises, impose any duty upon Tenant or Landlord with
respect to the Demised Premises or with respect to the use or occupation
thereof; provided, however (but without limiting Landlord's ability to determine
that the cost thereof constitutes an Operating Expense for which Tenant is
responsible in accordance with the terms hereof), that Tenant shall have no
obligation to make any alterations, replacements or improvements to the Demised
Premises, Building or Project, including without limitation structural or
capital improvements, required to comply with such governmental action if such
alterations, replacements or improvements are not required as a result of
Tenant's use or occupancy of the Demised Premises or as a result of the Tenant
Improvements or any other Tenant alterations to the Demised Premises or
installation of Tenant's personal property in the Demised Premises. For example,
Tenant shall not be responsible for complying with seismic upgrade requirements
imposed by governmental authority beyond Tenant's obligation to pay Tenant's Pro
Rata Share of Operating Expenses associated with such capital improvements.
10.3. Tenant shall not do or permit to be done anything which will
invalidate or permanently increase the cost of any fire, environmental, extended
coverage or any other insurance policy covering the Building and Project and
shall comply with all rules, orders, regulations, and requirements of the
insurers of the Building and Project and Tenant shall promptly upon demand
reimburse Landlord for any additional premium charged for such policy
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by reason of Tenant's failure to comply with the provisions of this Section
10.3.
10.4. [Intentionally omitted.]
10.5. Tenant shall deliver to Landlord copies of all new keys and
access control devices promptly following installation. Tenant must, upon
termination of this Lease return to Landlord all keys to offices and restrooms,
either furnished to, or otherwise procured by Tenant. In the event any key so
furnished is lost, Tenant shall pay to Landlord the cost of replacing the same
or of changing the lock or locks opened by such lost key if Landlord shall deem
it necessary to make such change.
10.6. No awnings or other projection shall be attached to any outside
wall of the building. Neither the interior nor exterior of any windows shall be
coated or otherwise sunscreened without the express written consent of Landlord
(which shall not be unreasonably withheld, conditioned or delayed), nor shall
any bottles, parcels, or other articles be placed on the windowsills. No
equipment, furniture or other items of personal property shall be placed on any
exterior balcony without the express written consent of Landlord.
10.7. No sign, advertisement, or notice shall be exhibited, painted or
affixed by Tenant on any part of the Demised Premises or the Building which is
visible from the exterior of the Building without the prior written consent of
Landlord, which shall not be unreasonably withheld, conditioned or delayed.
10.8. Tenant shall cause any office equipment or machinery to be
installed in the Demised Premises so as to reasonably prevent sounds or
vibrations therefrom from extending into any other building of the Project or
any portion of the Building not leased to or occupied by Tenant. Further, no
equipment exceeding the recommended floor load capacity shall be placed upon the
second floor Demised Premises without advance notice to and approval by
Landlord. Placement of such equipment, if approved by Landlord, shall be only at
a location designed to carry the weight of such equipment.
10.9. Tenant shall not do or permit anything to be done in or about the
Demised Premises which shall in any way obstruct or interfere with the rights of
other tenants of the Project, or injure or unreasonably annoy them, or use or
allow the Demised Premises to be used for immoral or unlawful purpose (provided,
however, that any medical research activity permitted by the United States Food
and Drug Administration shall not be deemed to be an immoral purpose), nor shall
Tenant knowingly cause, maintain or permit any nuisance or commit or permit any
act of waste in, on, or about the Demised Premises, Building or Project.
10.10. Notwithstanding any other provision herein to the contrary,
Tenant shall be responsible for all liabilities, costs and expense arising out
of or in connection with the compliance of the Demised Premises with the
Americans With Disabilities Act, 42 U.S.C. ss. 12101, et seq. (together with
regulations promulgated pursuant thereto, "ADA") and Tenant shall indemnify,
defend and hold harmless from and against any loss, cost, liability or expense
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(including reasonable attorneys fees and disbursements) arising out of any
failure of the Demised Premises to comply with the ADA.
11. Brokers
11.1. Tenant represents and warrants that it has had no dealings with
any real estate broker or agent in connection with the negotiation of this Lease
other than Xxxx Xxxxxxx & Company ("Broker"), as has been disclosed in writing
to Landlord and that Tenant knows of no other real estate broker or agent who is
or might be entitled to a commission in connection with this Lease.
11.2. Tenant hereby indemnifies and shall defend, hold and save
Landlord harmless from and against any and all claims for any commissions or
fees in connection with this Lease made by any broker or finder having worked,
or claiming to have worked, on behalf Tenant, other than Broker. Landlord hereby
indemnifies and shall defend, hold and save Tenant harmless from and against any
and all claims for any commissions or fees in connection with this Lease made by
any broker or finder having worked, or claiming to have worked, on behalf of
Landlord, other than Broker.
11.3. Tenant represents and warrants that no broker or agent has made
any representation or warranty relied upon by Tenant in Tenant's decision to
enter into this Lease other than as contained in this Lease.
11.4. Tenant acknowledges and agrees that the employment of brokers by
Landlord is for the purpose of solicitation of offers of lease from prospective
tenants and no authority is granted to any broker to furnish any representation
(written or oral) or warranty from Landlord unless expressly contained within
this Lease. Landlord in executing this Lease does so in reliance upon Tenant's
representations and warranties contained within Sections 11.1 and 11.3 hereof.
12. Holding Over
12.1. If, with Landlord's express written consent, Tenant holds
possession of all or any part of the Demised Premises after the expiration or
earlier termination Term, Tenant shall become a tenant from month-to-month
(provided, however, that if such holdover is with Landlord's consent and is for
less than 30 days, Tenant's obligation to pay Basic Annual Rent (or such other
amount as Landlord has indicated) shall be on a per diem basis during such
initial 30-day period) upon the Term Expiration Date, and in such case Tenant
shall continue to pay monthly installments of Basic Annual Rent in the amount
payable upon the Term Expiration Date, or such other amount as Landlord may
indicate, in Landlord's sole and absolute discretion, in such written consent,
and all other provisions, representations, covenant and agreements contained
herein, other than with respect to the Term and any extensions thereof, but
specifically including, without limitation, the adjustment of Basic Annual Rent
pursuant to Section 6 hereof,
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shall remain in full force and effect.
12.2. Notwithstanding the foregoing, if Tenant remains in possession of
the Demised Premises after the expiration or earlier termination of the Term
without the express written consent of Landlord, Tenant shall become a tenant at
sufferance upon the terms of this Lease except that the monthly rental shall be
equal to one hundred twenty-five percent (125%) of the Basic Annual Rent and
Additional Rent in effect during the last thirty (30) days of the Term. Tenant
shall be responsible for all damages suffered by Landlord resulting from or
occasioned by Tenant's holding over.
12.3. Acceptance by Landlord of Rent after such expiration or earlier
termination shall not result in a renewal or reinstatement of this Lease.
12.4. The foregoing provisions of this Section 12 are in addition to
and do not affect Landlord's right to re-entry or any other rights of Landlord
hereunder or as otherwise provided by law.
13. Taxes on Tenant's Property
13.1. Tenant shall pay, prior to delinquency, any and all taxes levied
against any personal property or trade fixtures placed by Tenant in or about the
Demised Premises.
13.2. Subject to Tenant's contest rights as provided in Section 13.4
below, if any such taxes on Tenant's personal property or trade fixtures are
levied against Landlord or Landlord's property or, if the assessed valuation of
the Building is increased by the inclusion therein of a value attributable to
Tenant's personal property or trade fixtures, and if Landlord, after written
notice to Tenant, pays the taxes based upon such increase in the assessed
valued, then Tenant shall upon demand repay to Landlord the taxes so levied
against Landlord.
13.3. If any improvements in or alterations to the Demised Premises,
whether owned by Landlord or Tenant and whether or not affixed to the real
property so as to become a part thereof, are assessed for real property tax
purposes at a valuation higher than the valuation at which improvements
conforming to Landlord's "Building Standard" in other spaces in the Project are
assessed, then the real property taxes and assessments levied against Landlord
or the Project by reason of such excess assessed valuation shall be deemed to be
taxes levied against personal property of Tenant and shall be governed by the
provisions of Section 13.2 above. Any such excess assessed valuation due to
improvements in or alterations to space in the Project leased by other tenants
of Landlord shall not be included in the Operating Expenses defined in Section
7.1, but shall be treated, as to such other tenants, as provided in this Section
13.3.
13.4. Tenant shall have the right, by appropriate proceedings, to
protest or contest with the appropriate governmental agency any assessment,
reassessment or allocation of Property Taxes or other taxes payable by Tenant
hereunder, in whole or in part; provided that Tenant
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provides such financial assurances as Landlord may reasonably require in order
to bond over or provide for such taxes and no jeopardy or threat to the Project
or any portion thereof exists as a result. Tenant may act in its own name and
Landlord shall, at Tenant's request and expense, reasonably cooperate with
Tenant in connection with such contest. Tenant may utilize any legal procedure
for payment under protest, if available, and may xxx to recover overpayments.
Tenant shall indemnify, hold harmless and defend Landlord and the Demised
Premises from any liens, liabilities, claims, losses, costs, expenses, fees,
judgments, actions, causes of action or damages (including, without limitation,
reasonable attorneys' fees and expenses) arising out of or related to any
contest of Property Taxes by Tenant and shall pay any Property Taxes ultimately
determined to be due, together with any interest or penalties charged by the
taxing entity.
14. Condition of Demised Premises
14.1. Tenant acknowledges that neither Landlord nor any agent of
Landlord has made any representation or warranty with respect to the condition
of the Demised Premises or the Building or Project, or with respect to the
suitability for the conduct of Tenant's business. The taking of possession of
the Demised Premises by Tenant shall, except as otherwise agreed in writing by
Landlord and Tenant conclusively establish that the Demised Premises and
Building were at such time in good, sanitary and satisfactory condition and
repair. Tenant further acknowledges that, prior to the Effective Date, Tenant
has been in possession of the Demised Premises as owner, that as owner Tenant
has developed an intimate familiarity with the Building and the Project and that
Tenant is accepting the Demised Premises "AS-IS."
15. Common Areas and Parking Facilities
15.1. Tenant shall have the non-exclusive right, in common with other
tenants of the Building or the Project, to use the Common Areas other than
parking facilities (provided, however, that with respect to the Common Areas
within the Building and so long as Tenant is the sole tenant of the Building,
Tenant shall have the exclusive rights thereto, subject to the rights of
Landlord under this Lease), subject to the rules and regulations adopted by
Landlord and attached hereto as Exhibit "C" together with such other reasonable
and nondiscriminatory rules and regulations as are hereafter promulgated by
Landlord in its discretion (the "Rules and Regulations").
15.2. [Intentionally omitted.]
15.3. Tenant shall have the exclusive right to use the parking
facilities located upon the Land, subject to the Rules and Regulations;
provided, however, that nothing in this Section 15.3 is intended to create an
affirmative duty on Landlord's part to monitor parking.
15.4. Landlord reserves the right to modify Common Areas including the
right to add or remove exterior and interior landscaping (provided, however,
that Landlord shall have no right to modify the portion of the Common Area
located within the Building unless a default by Tenant
15
has occurred).
16. Utilities and Services
16.1. Tenant shall pay for all water, (including the cost to service,
repair and replace reverse osmosis, deionized and other treated water) gas,
heat, light, power, telephone and other utilities supplied to the Demised
Premises, the Building and the Common Area, together with any fees, surcharges
and taxes thereon, including, without limitation, water in Common Areas for
drinking and lavatory purposes. If any such utility is not separately metered to
Tenant, Tenant shall pay a reasonable proportion to be determined by Landlord of
all charges jointly metered with other premises as part of Tenant's Pro Rata
Share of Operating Expenses, or in the alternative, Landlord may, at its option,
monitor the usage of such utilities by Tenant and charge Tenant with the cost of
purchasing, installing and monitoring such metering equipment, which shall be
paid by Tenant as Additional Rent. Tenant agrees to pay for its Pro Rata Share
of water consumed in Common Areas, as shown on said meter, as and when bills are
rendered, and on default in making such payment, Landlord may pay such charges
and collect the same from Tenant. Any such costs or expenses incurred, or
payments made by Landlord for any of the reasons or purposes herein above stated
shall be deemed to be Additional Rent payment by Tenant and collectible by
Landlord as such.
16.2. Landlord shall not be liable for, nor shall any eviction of
Tenant result from, the failure to furnish any such utility or service whether
or not such failure is caused by accident, breakage, repairs, strikes, lockouts
or other labor disturbances or labor disputes of any character, governmental
regulation, moratorium or other governmental action, inability despite the
exercise of reasonable diligence or by any other cause, including the gross
negligence of Landlord. In the event of such failure, Tenant shall not be
entitled to any abatement or reduction of Rent (except to the extent of any
rental abatement or interruption insurance proceeds actually received by
Landlord with respect to such period), nor be relieved from the operation of any
covenant or agreement of this Lease.
16.3. Tenant shall pay directly to the applicable utility or service
provider, prior to delinquency, for any separately metered utilities and
services which may be furnished to Tenant or the Demised Premises during the
Term.
16.4. Tenant shall not, without the prior written consent of Landlord,
use any device in the Demised Premises, including, but without limitation, data
processing machines, which will in any way increase the amount of ventilation,
air exchange, gas, steam, electricity or water beyond the existing capacity of
the Building as proportionately allocated to the Demised Premises based upon
Tenant's Pro Rata Share.
16.5. If Tenant shall require services in excess of that usually
furnished or supplied for similar space in the Building, by reason of equipment
operated and/or extended hours of business operation, Tenant may procure the
same all at Tenant's sole cost and expense.
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16.6. Landlord shall provide water to the outdoor portions of the
Common Areas for landscape irrigation purposes only, and Tenant shall pay
Tenant's Pro Rata Share thereof as an Operating Expense.
16.7. Landlord reserves the right to stop service of the elevator,
plumbing, ventilation, air conditioning and electric systems, when necessary, by
reason of accident or emergency or for repairs, alterations or improvements, in
the judgment of Landlord desirable or necessary to be made, until said repairs,
alterations or improvements shall have been completed, and Landlord shall
further have no responsibility or liability for failure to supply elevator
facilities, plumbing, ventilation, air conditioning, electric or other utility
service, when prevented from doing so by strike or accident, or by laws, rules,
order, ordinances, directions, regulations or requirements of any federal,
state, country or municipal authority or failure to deliver gas, oil or other
suitable fuel supply or inability by exercise of reasonable diligence to obtain
gas, oil or other suitable fuel. It is expressly understood and agreed that any
covenants on Landlord's part to furnish any service pursuant to any of the
terms, covenants, conditions, provisions or agreements of this Lease, or to
perform any act or thing for the benefit of Tenant, shall not be deemed breached
if Landlord is unable to furnish or perform the same by virtue of a strike or
labor trouble or any other cause whatsoever.
17. Alterations
17.1. Tenant shall make no alterations, additions or improvements in or
to the Demised Premises without Landlord's prior written consent, which approval
shall not be unreasonably withheld, conditioned or delayed (provided, however,
that in the event any proposed alteration, addition or improvement affects (i)
any structural portions of the Building including exterior walls, roof,
foundation and core of the Building, (ii) the exterior of the Building or (iii)
any Building systems, including elevator, plumbing, air conditioning, heating
electrical, security, life safety and power, then Landlord may withhold its
consent with respect thereto if Tenant does not provide adequate assurance to
Landlord of Tenant's ability to restore the Demised Premises to the condition in
which they existed prior to the construction of such alterations upon the Term
Expiration Date), and then only by architects, contractors, suppliers or
mechanics approved by Landlord in Landlord's sole discretion (provided, however,
that Tenant may make minor alterations to the interior portions of the Building
which do not affect the Building systems, which do not affect the structural
portions of the Building and which do not exceed $100,000 in the aggregate in
value without Landlord's prior consent but upon not less than 14 days' prior
notice to Landlord). In seeking Landlord's approval, Tenant shall provide
Landlord, at least fourteen (14) days in advance of any proposed construction,
with plans, specifications, bid proposals, work contracts and such other
information concerning the nature and cost of the alterations as may be
reasonably requested by Landlord.
17.2. [Intentionally omitted.]
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17.3. Tenant agrees that there shall be no construction of partitions
or other obstructions which might interfere with free access to mechanical
installation or service facilities of the Building or interfere with the moving
of Landlord's equipment to or from the enclosures containing said installations
or facilities.
17.4. Tenant agrees that any work by Tenant shall be accomplished in
such a manner as to permit any fire sprinkler system and fire water supply lines
to remain fully operable at all times.
17.5. Tenant covenants and agrees that all work done by Tenant (whether
or not requiring Landlord's consent) shall be performed in compliance with all
laws, rules, orders, ordinances, directions, regulations, and requirements of
all governmental agencies, offices, departments, bureaus and boards having
jurisdiction, and in full compliance with the rules, orders, directions,
regulations, and requirements of any applicable fire rating bureau. Upon demand
by Landlord, Tenant shall provide Landlord with (i) construction agreements,
building plans, lien releases and other similar documentation with respect to
any improvements or alterations reasonably requested by Landlord or Landlord's
lenders, insurers or investors, and (ii) "as-built" plans showing any change in
the Demised Premises.
17.6. Before commencing any work, Tenant shall give Landlord at least
fourteen (14) days prior written notice of the proposed commencement of such
work and shall, if required by Landlord, secure at Tenant's own cost and
expenses a completion and lien indemnity bond, letter of credit or such other
security reasonably satisfactory to Landlord for said work.
17.7. All alterations, attached equipment, decorations, fixtures, trade
fixtures, additions and improvements, subject to Section 17.9, attached to or
built into the Demised Premises, made by either of Landlord or Tenant, including
(without limiting the generality of the foregoing) all floor and wall covering,
built-in cabinet work and paneling, sinks and related plumbing fixtures,
exterior venting fume hoods and walk-in freezers and refrigerators, clean rooms,
climatized rooms, ductwork, conduits, electrical panels and circuits, shall
become the property of Landlord upon the Term Expiration Date or earlier
termination of the term of this Lease, and shall remain upon and be surrendered
with the Demised Premises as a part thereof; provided, however, that Landlord
may at the time of Landlord's consent to such alterations (or at any time if no
consent is obtained from Landlord) elect to cause Tenant to remove any such
items from the Demised Premises upon the Term Expiration Date or earlier
termination of this Lease, and, if Landlord so elects, Tenant shall remove such
alterations, attached equipment, decorations, fixtures, trade fixtures,
additions and improvements upon the Term Expiration Date or earlier termination
of this Lease and restore any damage caused by or occasioned as a result of such
removal and further provided that Tenant may remove the items listed on Exhibit
"D" attached hereto so long as Tenant restores any damage caused by or
occasioned as a result of such removal.
17.8. Tenant shall repair any damage to the Demised Premises caused by
Tenant's removal of any property from the Demised Premises. During any such
restoration period, Tenant
18
shall pay Rent to Landlord as provided herein as if said space were otherwise
occupied by Tenant.
17.9. Except as to those items listed on Exhibit "D" attached hereto
and incorporated herein, all business and trade fixtures, machinery and
equipment, built-in furniture and cabinets, together with all additions and
accessories thereto, installed in and upon the Demised Premises shall be and
remain the property of Landlord and shall not be moved by Tenant at any time
during the Term. If Tenant shall fail to remove all of its effects from the
Demised Premises prior to expiration or earlier termination of this Lease, then
Landlord may, at its option, remove the same in any manner that Landlord shall
choose, and store said effects without liability to Tenant for loss thereof or
damage thereto, and Tenant agrees to pay Landlord upon demand any expenses
incurred to such removal and storage or Landlord may, at its option, without
notice, sell said property or any of the same, at private sale and without legal
process, for such price as Landlord may obtain and apply the proceeds of such
sale against any amounts due under this Lease from Tenant to Landlord and
against any expenses incident to the removal, storage and sale of said personal
property.
17.10. Notwithstanding any other provision of this Section 17 to the
contrary, except with respect to the items list on Exhibit "D" attached hereto,
in no event may Tenant remove any improvement from the Demised Premises as to
which Landlord contributed payment, without Landlord's prior written consent,
which may be withheld in Landlord's sole discretion.
17.11. Tenant shall pay to Landlord an amount equal to ten percent
(10%) (not to exceed $5,000) of the cost to Tenant of all charges incurred by
Tenant of its contractors or agents in connection with any alterations,
additions or improvements to the Demised Premises for projects less than
$250,000, and $10,000 plus all reasonable out-of-pocket costs and expenses
incurred by Landlord in connection therewith for all projects of $250,000 or
more, to cover Landlord's overhead and expenses for plan review, coordination,
scheduling and supervision thereof. Landlord shall use its good faith efforts to
review, coordinate, schedule and supervise any such project with Landlord's
internal personnel prior to incurring any material out-of-pocket cost related
thereto. For purposes of payment of such sum, Tenant shall submit to Landlord
copies of all bills, invoices, and statements covering the costs of such
charges, which will be accompanied by payment to Landlord of the percentage fee
set forth above. Tenant shall reimburse Landlord for any extra expense
reasonably incurred by Landlord by reason of faulty work done by Tenant or its
contractors, or by reason of inadequate cleanup.
18. Repairs and Maintenance
18.1. Landlord shall repair and maintain the structural portions of the
Demised Premises and the exterior portions of the Common Areas, including,
without limitation, structural portions of the roof system (but not including
the roof membrane), foundations, exterior walls, interior load bearing walls,
landscaping and parking areas (and the full cost thereof shall be included as a
part of Operating Expenses), unless such maintenance or repairs are
19
required in whole or in part because of any act, neglect, fault of or omissions
of any duty by Tenant, its agents, servants, employees or invitees, in which
case Tenant shall pay to Landlord the cost of such maintenance and repairs. If
Landlord fails to perform any of its repair and maintenance obligations under
this Section 18.1, and such failure materially affects Tenant's ability to use
and occupy the Demised Premises for the purposes permitted herein, Tenant shall
have the right, but not the obligation, at Tenant's sole cost and expense to
perform such repairs and/or maintenance if such failure continues for more than
fifteen (15) days after written notice from Tenant to Landlord and any of
Landlord's lenders; provided, however, that if the nature of the repairs and/or
maintenance to be completed by Landlord is such that more than fifteen (15) days
are required to complete such repairs and/or maintenance, Landlord shall have
such additional time as is reasonably necessary to complete such repairs and/or
maintenance so long as Landlord takes appropriate action to commence such
repairs and/or maintenance within such fifteen (15) day period and thereafter
diligently pursues such repairs and/or maintenance to completion.
18.2. Except for services of Landlord, if any, required by Section
18.1, Tenant shall at Tenant's sole cost and expense keep the Demised Premises
and the Common Areas and every part thereof (including, without limitation, the
roof membrane, the plumbing and the fire sprinkler, heating, ventilating, air
conditioning, elevator and electrical systems) in good condition and repair,
damage thereto from ordinary wear and tear and casualty and condemnation not
caused by Tenant excepted. Tenant shall, upon the Term Expiration Date or
earlier termination of this Lease, surrender the Demised Premises to Landlord in
as good as condition as when received, ordinary wear and tear and casualty and
condemnation not caused by Tenant excepted. Landlord shall have no obligation to
alter, remodel, improve, repair, decorate or paint the Demised Premises or any
part thereof, except as specifically set forth in Sections 22 and 23 of this
Lease.
18.3. Landlord shall not be liable for any failure to make any repairs
or to perform any maintenance which is an obligation of Landlord unless such
failure shall persist for an unreasonable time after written notice of the need
of such repairs or maintenance is given to Landlord by Tenant. Tenant waives the
rights under Section 1941 and 1942 of the California Civil Code or under any
similar law, statute or ordinance now or hereafter in effect to make repairs at
Landlord's expense.
18.4. Repairs under this Section 18 which are obligations of Landlord
are subject to allocation among Tenant and other tenants as Operating Expenses.
18.5. This Section 18 relates to repairs and maintenance arising in
ordinary course of operation of the Building, the Project and any related
facilities. In the event of fire, earthquake, flood, vandalism, war, or similar
cause of damage or destruction, this Section 18 shall not be applicable and the
provisions of Section 22 shall apply and control.
19. Liens
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19.1. Subject to the immediately succeeding sentence, Tenant shall keep
the Demised Premises, the Building, the Project and the real property upon which
the Building and the Project are situated free from any liens arising out of
work performed, materials furnished or obligations incurred by Tenant. Tenant
further covenants and agrees that any mechanic's lien filed against the Demised
Premises or against the Building or the Project for work claimed to have been
done for, or materials claimed to have been furnished to Tenant, will be
discharged by Tenant, by bond or otherwise, within ten (10) business days after
the filing thereof, at the sole cost and expense of Tenant, subject, however, to
Tenant's latest rights set forth in Section 19.4 below.
19.2. Should Tenant fail to discharge any lien of the nature described
in Section 19.1, Landlord may at Landlord's election pay such claim or post a
bond or otherwise provide security to eliminate the lien as a claim against
title and the cost thereof shall be immediately due from Tenant as Additional
Rent.
19.3. In the event Tenant shall lease or finance the acquisition of
equipment, furnishings, or other personal property of a removable nature
utilized by Tenant in the operation of Tenant's business, Tenant warrants that
any Uniform Commercial Code Financing Statement executed by Tenant will upon its
face or by exhibit thereto indicate that such Financing Statement is applicable
only to removable personal property of Tenant located within the Demised
Premises. In no event shall the address of the Building be furnished on the
statement without qualifying language as to applicability of the lien only to
removable personal property. Should any holder of a Financing Statement executed
by Tenant record or place of record a Financing Statement which appears to
constitute a lien against any interest of Landlord or against equipment which
may be located other than within the Demised Premises, Tenant shall within ten
(10) days after filing such Financing Statement (i) cause a copy of the Security
Agreement or other documents to which Financing Statement pertains to be
furnished to Landlord to facilitate Landlord's being in a position to show such
lien is not applicable to Landlord's interest, and (ii) cause Tenant's lender to
amend any documents of record so as to clarify that such lien is not applicable
to any interest of Landlord in the Building or the Project. If Tenant desires to
purchase subject to a security interest, lease or obtain a loan secured by
tenant's personal property and requests that Landlord execute a lien waiver or
consent to encumbrance in connection therewith, Landlord agrees to execute such
lien waiver or consent to encumbrance in a form reasonably acceptable to the
Landlord, the delivery of which shall not be unreasonably delayed by the
Landlord.
19.4. Notwithstanding anything to the contrary herein, Tenant may, in
good faith, contest the validity of any lien of the nature described in Section
19.1, or any claim or demand arising therefrom, and, as a condition thereto,
Tenant shall, at its sole expense, indemnity, defend, hold harmless and protect
itself, Landlord and the Demised Premises against the same and shall pay and
satisfy any such adverse judgment that may be rendered thereon before the
enforcement thereof against the Landlord or the Demised Premises or the Project.
If Landlord shall in its discretion require, Tenant shall furnish to Landlord a
letter of credit or surety bond in
21
a form reasonably satisfactory to Landlord and in an amount equal to one and
one-half times the amount of such contested lien claim or demand, indemnifying
Landlord against liability for the same, as required by law for the holding of
the Demised Premises free from the effect of such lien or claim.
20. Indemnification and Exculpation
20.1. Tenant hereby indemnifies and agrees to defend and save Landlord
harmless from and against any and all demands, claims, liabilities, losses,
costs, expenses, actions, causes of action, damages or judgments, and all
reasonable expenses incurred in investigating or resisting the same (including,
without limitation, reasonable attorneys' fees, charges and disbursements), for
injury or death to person or injury to property occurring within or about the
Demised Premises, arising directly or indirectly out of Tenant's, it's
employees, agents or guests use or occupancy of the Demised Premises or a breach
or default by Tenant in the performance of any of its obligations hereunder,
unless caused solely by the willful act or gross negligence of the Landlord.
20.2. Landlord shall not be liable to Tenant and Tenant assumes all
risk of damage to personal property or scientific research, including loss of
records kept within the Demised Premises if the cause of such damage is of a
nature which, if Tenant had elected to maintain fire and theft insurance with
extended coverage and business records endorsement available on a commercially
reasonable basis, would be a loss subject to settlement by the insurance
carrier, including, but not limited to, damage or losses caused by fire,
electrical malfunctions, gas explosion, and water damage of any type, including,
but not limited to, broken water lines, malfunction of fire sprinkler system,
roof leakage or stoppages of lines unless and except if such loss is due to
willful disregard of Landlord after written notice by Tenant of need for a
repair which Landlord is responsible to make for an unreasonable period of time.
Tenant further waives any claim for injury to Tenant's business or loss of
income relating to any such damage or destruction of personal property including
any loss of records.
20.3. Landlord shall not be liable to Tenant for any damages arising
from any act, omission or neglect of any other tenant in the Building or the
Project or of any other third party provided that the foregoing shall not create
any liability of Tenant for any act, omission or neglect of any other tenant in
the Building or Project (other than Tenant's subtenants, licensees, invitees,
agents or contractors).
20.4. Security devices and services, if any, while intended to deter
crime may not in given instances prevent theft or other criminal acts and it is
agreed that Landlord shall not be liable for injuries or losses caused by
criminal acts of third parties and the risk that any security device or service
may malfunction or otherwise be circumvented by a criminal is assumed by Tenant.
Tenant shall at Tenant's cost obtain insurance coverage to the extent Tenant
desires protection against such criminal acts.
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21. Insurance - Waiver of Subrogation
21.1. Landlord, as part of Operating Expenses, shall carry insurance
upon the Building, in an amount equal to full replacement cost (exclusive of the
costs of excavation, foundations, and footings, and without reference to
depreciation taken by Landlord upon its books or tax returns) or such lesser
coverage as Landlord may elect provided such coverage is not less than ninety
percent (90%) of such full replacement cost or the amount of such insurance
Landlord's mortgage lender requires Landlord to maintain, providing protection
against any peril generally included within the classification "Fire and
Extended Coverage" together with insurance against sprinkler damage (if
applicable), vandalism and malicious mischief. Landlord, subject to availability
thereof and, as part of Operating Expenses, shall further insure as Landlord
deems appropriate coverage against flood, environmental hazard and earthquake,
loss or failure of building equipment, rental loss during the period of repair
or rebuild (for a period not exceeding 18 months), workmen's compensation
insurance and fidelity bonds for employees employed to perform services.
Notwithstanding the foregoing, Landlord may, but shall not be deemed required
to, provide insurance as to any improvements installed by Tenant after the
Effective Date or which are in addition to the standard improvements customarily
furnished by Landlord without regard to whether or not such are made a part of
the Building. The insurance maintained by Landlord on the Project shall include
reasonable deductibles as are maintained by prudent owners of similar projects
in the San Diego metropolitan area (which, except with respect to earthquake
coverages, shall not exceed 10% of the replacement value of the Building).
21.2. Landlord, as part of Operating Expenses, shall further carry
public and excess liability insurance with a single loss limit of not less than
Five Million Dollars ($5,000,000) for death or bodily injury, or property damage
with respect to the Project.
21.3. Tenant at its own cost shall procure and continue in effect from
the Term Commencement Date and continuing throughout the Term (and occupancy by
Tenant, if any, after the Term Expiration Date) comprehensive public and excess
liability insurance with limits of not less than Five Million Dollars
($5,000,000) per occurrence for death or bodily injury and not less than Five
Million Dollars ($5,000,000) for property damage with respect to the Demised
Property.
21.4. The aforesaid insurance required of Tenant shall name Landlord
and any mortgage lender of Landlord who so requests as an additional insured.
Said insurance shall be with companies having a rating of not less than
policyholder rating of A and financial category rating of at least Class XII in
"Best's Insurance Guide." Tenant shall obtain for Landlord from the insurance
companies or cause the insurance companies to furnish certificates of coverage
to Landlord. No such policy shall be cancellable or subject to reduction of
coverage or other modification or cancellation except after thirty (30) days
prior written notice to Landlord from the insurer. All such policies shall be
written as primary policies with respect to the Demised Premises, not
contributing with and not in excess of the coverage which Landlord may carry.
Tenant's policy may be a "blanket policy" which specifically provides that the
amount of
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insurance shall not be prejudiced by other losses covered by the policy. Tenant
shall, at least twenty (20) days prior to the expiration of such policies,
furnish Landlord with renewals or binders. Tenant agrees that if Tenant does not
take out and maintain such insurance, Landlord may (but shall not be required
to), upon not less than five (5) days notice to Tenant, procure said insurance
on Tenant's behalf and at its cost to be paid as Additional Rent.
21.5. Tenant assumes the risk of damage to any fixtures, goods,
inventory, merchandise, equipment, and leasehold improvements, and Landlord
shall not be liable for injury to Tenant's business or any loss of income
therefrom relative to such damage all as more particularly heretofore set forth
within this Lease. Tenant at Tenant's cost shall carry such insurance as Tenant
desires for Tenant's protection with respect to personal property of Tenant or
business interruption.
21.6. In each instance where insurance is to name Landlord as
additional insured, Tenant shall upon written request of Landlord also designate
and furnish certificates so evidencing Landlord as additional insured to (i) any
lender of Landlord holding a security interest in the Building or real property
upon which the Building is situated, and/or (ii) the landlord under any lease
wherein Landlord is tenant of the real property whereupon the Building is
located if the interest of Landlord is or shall become that of a tenant under a
ground lease rather than that of a fee owner, and/or (iii) any management
company retained by Landlord to manage the Building or the Project.
21.7. Landlord and Tenant each hereby waive any and all rights of
recovery against the other or against the officers, directors, employees,
agents, and representatives of the other, on account of loss or damage
occasioned to such waiving party or its property or the property of others under
its control to the extent that such loss or damage is insured against under any
fire and extended coverage insurance policy which either may have in force at
the time of such loss or damage. Such waivers shall continue as long as their
respective insurers so permit or such waivers are generally permitted by
insurance carriers in the California market (provided that neither party shall
be required to pay any material amount to their respective insurers in order to
maintain such waivers). Any termination of such a waiver shall be by written
notice of circumstances as hereinafter set forth. Landlord and Tenant upon
obtaining the policies of insurance required or permitted under this Lease shall
give notice to the insurance carrier or carriers that the foregoing mutual
waiver of subrogation is contained in this Lease. If such policies shall not be
obtainable with such waiver or shall be so obtainable only at a premium over
that chargeable without such waiver, the party seeking such policy shall notify
the other thereof, and the latter shall have ten (10) days thereafter to either
(i) procure such insurance with companies reasonably satisfactory to the other
party or (ii) agree to pay such additional premium. If neither (i) nor (ii) are
done, this Section 21.7 shall have no effect during such time as such policies
shall not be obtainable or the party in whose favor a waiver of subrogation is
desired refuses to pay the additional premium. If such policies shall at any
time be unobtainable, but shall be subsequently obtainable, neither party shall
be subsequently liable for a failure to obtain such insurance until a reasonable
time after notification thereof by the other party. If the release
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of either Landlord or Tenant, as set forth in the first sentence of this Section
21.7 shall contravene any law with respect to exculpatory agreements, the
liability of the party in question shall be deemed not released but shall be
secondary to the other's insurer.
21.8. Landlord may require insurance policy limits to be raised to
conform with any reasonable requirements of Landlord's lender and/or to bring
coverage limits to levels then generally being required by institutional
landlords for comparable projects.
22. Damage or Destruction
22.1. In the event of a partial destruction of the Building by fire or
other perils covered by extended coverage insurance, not exceeding twenty-five
percent (25%) of the full replacement cost thereof, and if the damage thereto is
such that the Building may be repaired, reconstructed or restored within a
period of six (6) months from the date of the happening of such casualty and
Landlord will receive insurance proceeds sufficient to cover the cost of such
repairs (except for any deductible amount provided by Landlord's policy, which
deductible amount if paid by Landlord shall be an Operating Expense), Landlord
shall commence and proceed diligently with the work of repair, reconstruction
and restoration and this Lease shall continue in full force and effect.
22.2. In the event of any damage to or destruction of the Building,
other than as provided in Section 22.1, Landlord may elect to repair,
reconstruct and restore the Building, in which case this Lease shall continue in
full force and effect. If Landlord elects not to repair then the Term Expiration
Date shall be (and this Lease shall terminate as of) the date of destruction.
22.3. Landlord shall give written notice to Tenant of its election to
repair or not to repair, reconstruct or restore the Building or Project within
the sixty (60) day period following the date of damage or destruction.
22.4. Upon any termination of this Lease under any of the provisions of
this Section, the parties shall be released thereby without further obligation
to the other from the date possession of the Demised Premises is surrendered to
the Landlord except for items which have theretofore occurred.
22.5. In the event of repair, reconstruction and restoration as herein
provided, the rental provided to be paid under this Lease shall be abated
proportionately based on the extent to which Tenant's use of the Demised
Premises is impaired during the period of such repair, reconstruction or
restoration, unless Landlord provides Tenant with other comparable space during
the period of repair, which in Tenant's reasonable opinion is suitable for the
temporary conduct of Tenant's business and which shall be leased by Tenant on
terms substantially similar to this Lease, but at monthly installments of Basic
Annual Rent equitably reduced to reflect the area and permitted uses of such
temporary premises.
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22.6. Notwithstanding anything to the contrary contained in this
Section, should Landlord be delayed or prevented from completing the repair or
restoration of the damage to the Demised Premises after the occurrence of such
damage or destruction by reason of acts of God or war, governmental
restrictions, inability to procure the necessary labor or materials, strikes, or
other circumstances beyond the control of Landlord, the time for Landlord to
commence or complete repairs shall be extended, provided, at the election of
Landlord, Landlord shall be relieved of its obligation to make such repairs or
restoration and Tenant shall be released from its obligation under this Lease as
of the end of eight (8) months from date of destruction, if repairs required to
provide Tenant use of the Demised Premises are not then substantially complete.
22.7. If Landlord is obligated to or elects to repair or restore as
herein provided, Landlord shall be obligated to make repairs or restoration only
of those portions of the Building and the Demised Premises which were provided
at Landlord's expense; the repair and restoration of items not provide at
Landlord's expense shall be the obligation of Tenant. In the event Tenant
elected to upgrade certain improvements from the standard normally provided by
Landlord, Landlord shall upon the need for replacement due to an insured loss,
provide only the standard Landlord improvements unless Tenant shall elect to
again upgrade and pay any additional cost of such upgrades, except to such
extent as insurance proceeds which, if received, the excess proceeds are
adequate to provide such upgrades, in addition to providing for basic
reconstruction and standard improvements.
22.8. Notwithstanding anything to the contrary contained in this
Section, Landlord shall not have any obligation whatsoever to repair,
reconstruct or restore the Demised Premises to the extent that insurance
proceeds are not available therefor (except for the amount of the deductible
carried by Landlord as permitted hereunder). In addition, notwithstanding
anything to the contrary contained in this Section 22, if at any time during the
last twenty four (24) months of the term of this Lease there is damage for which
the cost to repair exceeds two months' installments of Basic Annual Rent, or the
repair, reconstruction or restoration of which is reasonably determined by
Landlord to exceed two (2) months from the date of damage or destruction, then
Landlord shall have no obligation whatsoever, to repair, reconstruct or restore
the Demised Premises and Landlord may terminate this Lease effective sixty (60)
days following the date of occurrence of such damage by giving written notice to
the Tenant of its election to do so within thirty (30) days after the date of
occurrence of such damage; provided, however, that if Tenant at the time of such
election has an exercisable option to extend this Lease so that the Lease after
exercise of such option would have an unexpired term of not less seven years,
then Tenant may preserve this Lease, notwithstanding Landlord's election to
terminate this Lease, by (a) exercising such option, and (b) providing Landlord
with any shortage in insurance proceeds (or adequate assurance thereof) needed
to make the repairs on or before the earlier of (i) the date which is ten (10)
days after Tenant's receipt of Landlord's written notice purporting to terminate
this Lease, or (ii) the day prior to the date upon which such option expires. If
Tenant duly exercises such option during such period and provides Landlord with
funds (or adequate assurance thereof) to cover any shortage in insurance
proceeds, Landlord shall, at Landlord's expense repair such damage as soon as
reasonably possible and this Lease shall continue in full force and effect. If
26
Tenant fails to exercise such option and provide such funds or assurance during
such period, then this Lease shall terminate as of the date set forth in the
first sentence of this Paragraph 22.8.
23. Eminent Domain
23.1. In the event the whole of the Demised Premises, or such part
thereof or of the Project as shall substantially interfere with the Tenant's use
and occupancy thereof, shall be taken for any public or quasi-public purpose by
any lawful power or authority by exercise of the right of appropriation,
condemnation or eminent domain, or sold to prevent such taking, Tenant or
Landlord may terminate this Lease effective as of the date possession is
required to be surrendered to said authority.
23.2. In the event of a partial taking of the Building, the Project or
of drives, walkways, and parking areas serving the Building or the Project for
any public or quasi-public purpose by any lawful power or authority by exercise
of right of appropriation, condemnation, or eminent domain, or sold to prevent
such taking, then without regard as to whether any portion of the Demised
Premises occupied by Tenant was so taken, Landlord may elect to terminate this
Lease as of such taking if such taking is, in the reasonable opinion of
Landlord, of a material nature such as to make it uneconomical to continue use
of the unappropriated portion for purposes of office rentals, laboratory space
or manufacturing facilities.
23.3. Tenant shall be entitled to any award which is specifically
awarded as compensation for the taking of Tenant's personal property which was
installed at Tenant's expense, for the value of Tenant's good will, for any
damage to Tenant's business and for costs of Tenant moving to a new location.
Except as before set forth, any award for such taking shall belong to Landlord.
23.4. If upon any taking of the nature described in this Section 23
this Lease continues in effect, the Landlord shall promptly proceed to restore
the Demised Premises, Building and the Project to substantially their same
condition prior to such partial taking. To the extent such restoration is
feasible, as determined by Landlord in its sole discretion, the Rent shall be
abated proportionately based upon the extent to which Tenant's use of the
Demised Premises has decreased on the basis of the percentage of the rental
value of the Demised Premises after such taking and the rental value of the
Demised Premises prior to such taking.
24. Defaults and Remedies
24.1. Late payment by Tenant to Landlord of Rent and other sums due
will cause Landlord to incur costs not contemplated by this Lease, the exact
amount of which will be extremely difficult and impracticable to ascertain. Such
costs include, but are not limited to, processing and accounting charges and
late charges which may be imposed on Landlord by the terms of any mortgage or
trust deed covering the Demised Premises. Therefore, if any installment of Rent
due from Tenant is not received by Landlord within ten (10) days after delivery
by Landlord of a notice of delinquency to Tenant, Tenant shall pay to Landlord
an
27
additional sum of three percent (3%) of the overdue Rent as a late charge. The
parties agree that this late charge represents a fair and reasonable estimate of
the costs that Landlord will incur by reason of late payment by Tenant. In
addition to the late charge, Rent not paid when due shall bear interest from the
5th day after date due until paid at the lesser of (i) twelve percent (12%) per
annum or (ii) the maximum rate permitted by law (such rate being referred to
herein as the "Default Rate").
24.2. No payment by Tenant or receipt by Landlord of a lesser amount
than the Rent payment herein stipulated shall be deemed to be other than on
account of the Rent, nor shall any endorsement or statement on any check or any
letter accompanying any check or payment as Rent be deemed an accord and
satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord's right to recover the balance of such Rent or pursue any other remedy
provided. If at any time a dispute shall arise as to any amount or sum of money
to be paid by Tenant to Landlord, Tenant shall have the right to make payment
"under protest" and such payment shall not be regarded as a voluntary payment,
and there shall survive the right on the part of Tenant to institute suit for
recovery of the payment paid under protest.
24.3. If Tenant fails to pay any sum of money required to be paid by it
hereunder, or shall fail to perform any other act on its part to be performed
hereunder, Landlord may, without waiving or releasing Tenant from any
obligations of Tenant, but shall not be obligated to, make such payment or
perform such act. All sums so paid or incurred by Landlord, together with
interest thereon, from the date such sums were paid or incurred, at the Default
Rate shall be payable to Landlord on demand as Additional Rent.
24.4. The occurrence of any one or more of the following events shall
constitute a "Default" hereunder by Tenant:
24.4.1 The abandonment of the Demised Premises by Tenant;
24.4.2 The failure by Tenant to make any payment of Rent
within three days after written notice that the same is due (provided, however,
the Landlord shall have no obligation to give Tenant written notice more than
two times in any twelve month period);
24.4.3 The failure by Tenant to observe or perform any
obligation or covenant contained herein (other than described in Section 24.4.1
and 24.4.2) to be performed by Tenant which results in a threat to the health or
safety of any tenants or occupants of the Building or Project, where such
failure shall continue for a period of three (3) business days after written
notice thereof from Landlord to Tenant.
24.4.4 The failure by Tenant to observe or perform any
obligation or covenant contained herein (other than described in Section 24.4.1,
24.4.2 and 24.4.3) to be performed by Tenant, where such failure shall continue
for a period of thirty (30) days after written notice thereof from Landlord to
Tenant. Such notice shall be in lieu of, and not in addition to, any
28
notice required under California Code or Civil Procedure Section 1161; provided
that if the nature of Tenant's default is such that it reasonably requires more
than thirty (30) days to cure, then Tenant shall not be deemed to be in default
if Tenant shall commence such cure within said thirty (30) day period and
thereafter diligently prosecute the same to completion provided, however, that
such cure is completed no later than sixty (60) days from the date of written
notice;
24.4.5 Tenant makes a general assignment for the benefit of
creditors;
24.4.6 A receiver, trustee or custodian is appointed to, or
does, take title, possession or control of all, or substantially all, of
Tenant's assets;
24.4.7 Tenant files a voluntary petition under the Bankruptcy
Code (or any similar law) or an order for relief is entered against Tenant
pursuant to a voluntary or involuntary proceeding commenced under any chapter of
the Bankruptcy Code;
24.4.8 Any involuntary petition if filed against the Tenant
under any chapter of the Bankruptcy Code and is not dismissed within ninety (90)
days; or
24.4.9 Tenant's interest in this Lease is attached, executed
upon, or otherwise judicially seized and such action is not released within
ninety (90) days of the action.
24.4.10 Tenant defaults beyond any applicable grace period
under that certain Loan and Security Agreement of even date herewith, by and
between Tenant, as borrower, and Landlord, as lender, or any documents or
instruments delivered in connection therewith.
Notices given under this Section 24.4 shall specify the alleged default and
shall demand that Tenant perform the provisions of this Lease or pay the Rent
that is in arrears, as the case may be, within the applicable period of time, or
quit the Demised Premises. No such notice shall be deemed a forfeiture or a
termination of this Lease unless Landlord elects otherwise in such notice.
24.5. During the continuance of a Default by Tenant, with or without
notice or demand and without limiting Landlord in the exercise of any right or
remedy which Landlord may have, Landlord shall be entitled to terminate Tenant's
right to possession of the Demised Premises by any lawful means, in which case
this Lease shall terminate and Tenant shall immediately surrender possession of
the Demised Premises to Landlord. In such event, Landlord shall have the
immediate right to re-enter and remove all persons and property, and such
property may be removed and stored in a public warehouse or elsewhere at the
cost of, and for the account of Tenant, all without service of notice or resort
to legal process and without being deemed guilty of trespass, or becoming liable
for any loss or damage which may be occasioned thereby. In the event that
Landlord shall elect to so terminate this Lease, then Landlord shall be entitled
to recover from Tenant all damages incurred by Landlord by reason of Tenant's
default, including:
29
24.5.1 The worth at the time of award of any unpaid Rent which
had been earned at the time of such termination; plus
24.5.2 The worth at the time of award of the amount by which
the unpaid Rent which would have been earned after termination until the time of
award exceeds that portion of such rental loss which Tenant proves could have
been reasonably avoided; plus
24.5.3 The worth at the time of award of the amount by which
the unpaid Rent for the balance of the term after the time of award exceeds the
amount of such rental loss which Tenant proves could have been reasonably
avoided; plus
24.5.4 Any other amount necessary to compensate Landlord for
all the detriment proximately caused by Tenant's failure to perform its
obligation under this Lease or which in the ordinary course of things would be
likely to result therefrom, including, but not limited to, the cost of restoring
the Demised Premises to the condition required under the terms of this Lease;
plus
24.5.5 At the Landlord's election, such other amounts in
addition to or in lieu of the foregoing as may be permitted from time to time by
applicable law.
As used in Sections 24.5.1 and 24.5.2 above, "worth at the time of award" shall
be computed by allowing interest at the rate specified in Section 24.1. As used
in Section 24.5.3 above, the "worth at the time of the award" shall be computed
by taking the present value of such amount, by using the discount rate of the
Federal Reserve Bank of San Francisco at the time of the award plus six (6)
percentage points.
24.6. If Landlord does not elect to terminate this Lease as provided in
this Section, then Landlord may, from time to time, recover all Rent as it
becomes due under this Lease. At any time thereafter, Landlord may elect to
terminate this Lease and to recover damage to which Landlord is entitled.
24.7. In the event Landlord elects to terminate this Lease and relet
the Demised Premises, it may execute any new lease in its own name. Tenant
hereunder shall have no right or authority whatsoever to collect any Rent from
such tenant. The proceeds of any such reletting shall be applied as follows:
First, to the payment of any indebtedness other than Rent due
hereunder from Tenant to Landlord, including, but not limited to,
storage charges or brokerage commissions owing from Tenant to Landlord
as the result of such reletting;
Second, to the payment of the costs and expenses of reletting
the Demised Premises, including alterations and repairs which Landlord
deems reasonably necessary and advisable and reasonable attorneys'
fees, charges and disbursements incurred by
30
Landlord in connection with the retaking of the Demised Premises and
such reletting;
Third, to the payment of Rent and other charges due and unpaid
hereunder; and
Fourth, to the payment of future Rent and other damages
payable by Tenant under this Lease.
24.8. All rights, options, and remedies of Landlord contained in this
Lease shall be construed and held to be nonexclusive and cumulative. Landlord
shall have the right to pursue any one or all of such remedies or any other
remedy or relief which may be provided by law, whether or not stated in this
Lease. No waiver of any default of Tenant hereunder shall be implied from any
acceptance by Landlord of any Rent or other payments due hereunder or any
omission by Landlord to take any action on account of such default if such
default persists or is repeated, and no express waiver shall affect defaults
other than as specified in said waiver.
24.9. Termination of this Lease or Tenant's right to possession by
Landlord shall not relieve Tenant from any liability to Landlord which has
theretofore accrued or shall arise based upon events which occurred prior to the
last to occur of (i) the Term Expiration Date or (ii) the date possession of
Demised Premises is surrendered.
24.10. Landlord shall not be in default unless Landlord fails to
perform obligations required of Landlord within a reasonable time, but in no
event shall such failure to continue be for more than thirty (30) days after
written notice by Tenant specifying wherein Landlord has failed to perform such
obligation; provided, however, that if the nature of Landlord's obligation is
such that more than thirty (30) days are required for performance, then Landlord
shall not be in default if Landlord commences performance within such thirty
(30) day period and thereafter diligently prosecutes the same to completion.
24.11. In the event of any default on the part of Landlord, Tenant will
give notice by registered or certified mail to any beneficiary of a deed of
trust or mortgagee or a mortgage covering the Demised Premises and to any
landlord of any lease of any building in which Demised Premises is located whose
address shall have been furnished, and Tenant shall offer such beneficiary,
mortgagee and/or landlord a reasonable opportunity to cure the default,
including the minimum amount of time necessary to obtain possession of the
Building by power of sale or a judicial action if such should prove necessary to
effect a cure, provided the Landlord shall have furnished to Tenant in writing
the names and addresses of all such persons who are to receive such notices.
25. Assignment or Subletting
25.1. Except as hereinafter provided, Tenant shall not, either
voluntarily or by operation of law, directly or indirectly, sell, hypothecate,
assign, pledge, encumber or otherwise transfer this Lease, or sublet the Demised
Premises or any part thereof, or permit or suffer the Demised
31
Premises or any part thereof to be used or occupied as work space, storage
space, mailing privileges, concession or otherwise by anyone other than Tenant,
Tenant's employees or consultants, or employees of Tenant's joint venture
partners, without the prior written consent of Landlord in each instance, which
consent may be withheld in Landlord's sole discretion (except as otherwise
provided herein). Notwithstanding anything to the contrary set forth herein,
Landlord does hereby consent to the existing sublease of portions of the Demised
Premises pursuant to that certain Industrial Multi-Tenant Lease between Tenant,
as "Landlord," and Advanced Tissue Sciences, Inc., as "Tenant," dated July 15,
1996, and that certain Building Lease Agreement, dated August 9, 1996 (the
"Antenna Lease"), between Tenant, as "Lessor," and Xxx California PCS, Inc., as
"Lessee," for rooftop communication facilities, which leases and the obligations
of lessor thereunder are being retained by Tenant.
25.2. If Tenant is a corporation, the shares of which are not actively
traded upon a stock exchange or in the over-the-counter market, a transfer or
series of transfers whereby twenty-five percent (25%) or more of the issued and
outstanding shares of such corporation are, or the voting control is,
transferred (but excepting transfers upon deaths of individual shareholders)
from a person or persons or entity or entities which were owners thereof at time
of execution of this Lease to persons or entities who were not owners of shares
of the corporation at time of execution of this Lease shall be deemed an
assignment of this Lease requiring the consent of Landlord as provided in
Section 25.1 above.
25.3. If Tenant desires to assign this Lease to any entity into which
Tenant is merged, with which Tenant is consolidated, which acquires all or
substantially all of the assets of Tenant, or which is controlled by, under
common control with or controls Tenant, provided that the assignee first
executes, acknowledge and delivers to Landlord an agreement whereby the assignee
agrees to be bound by all of the covenants and agreements in this Lease and that
the assignee shall have a net worth (determined in accordance with generally
accepted accounting principles consistently applied) immediately after such
assignment which is at least equal to the net worth (as so determined) of Tenant
immediately prior to the assignment (or as of the date hereof, if greater), then
Landlord, upon receipt of proof of foregoing shall consent to such assignment.
25.4. In the event Tenant desires to assign, sublease, hypothecate or
otherwise transfer this Lease or sublet the Demised Premises, then at least
fifteen (15) days, but not more than ninety (90) days, prior to the date when
Tenant desires the assignment or sublease to be effective (the "Assignment
Date"), Tenant shall give Landlord a notice (the "Assignment Notice") containing
information (including references) concerning the character of the proposed
assignee or sublessee, the Assignment Date, any ownership or commercial
relationship between Tenant and the proposed assignee or sublessee, and the
consideration and all other material terms and conditions of the proposed
assignment or sublease along with such other information as Landlord may
reasonably require, all in such detail as Landlord shall reasonably require.
Tenant shall also tender to Landlord, reasonable attorneys fees and other costs
or overhead expenses incurred by Landlord in reviewing Tenants request for such
assignment.
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25.5. Landlord in making its determination as to whether consent should
be given to a proposed assignment or sublease, may give consideration to the
financial strength of such assignee or subtenant (notwithstanding the assignor
or sublessor remaining liable for Tenant's performance), any change in use which
such assignee or subtenant proposes to make in use of Demised Premises and
desire of Landlord to exercise rights under Section 25.10 to obtain cancellation
of this Lease. In no event shall Landlord be deemed to be unreasonable for
declining to consent to transfer to an assignee or subtenant of poor reputation,
lacking financial qualifications, or seeking change in use.
25.6. As conditions precedent to Landlord considering a request by
Tenant to Tenant's transfer of rights or subletting of the Demises Premises,
Landlord may require any or all of the following:
25.6.1 Tenant shall remain fully liable under this Lease
during the unexpired Term;
25.6.2 Tenant shall provide Landlord with evidence reasonably
satisfactory to Landlord that the value of Landlord's interest under this Lease
will not thereby be diminished or reduced. Such evidence shall include, but need
not be limited to, evidence respecting the relevant business experience and
financial responsibility and status of the third party concerned;
25.6.3 Tenant shall reimburse Landlord for Landlord's actual
costs and expenses, including, without limitation, reasonable attorneys' fees,
charges and disbursements incurred in connection with the review, processing and
documentation of such request;
25.6.4 If Tenant's transfer of rights or sharing of the
Demised Premises provides for the receipt by, on behalf or on account of Tenant
of any consideration of any kind whatsoever (including, but not by way of
limitation, a premium rental for a sublease or lump sum payment for an
assignment) in excess of the rental and other charges due Landlord under this
Lease, Tenant shall be entitled to retain such excess for Tenant's own account
and benefit;
25.6.5 Written agreement from any applicable third party that
in the event Landlord gives such third party notice that Tenant is in default
under this Lease, such third party shall thereafter make all payments otherwise
due Tenant directly to Landlord, which payments will be received by Landlord
without any liability to Landlord except to credit such payment against amounts
due under the Lease, and any such third party shall agree to attorn to Landlord
or its successors and assigns should this Lease be terminated for any reason;
provided, however that in no event shall Landlord or its successors or assigns
be obligated to accept such attornment;
25.6.6 Any such transfer and consent shall be effected on
forms reasonably approved by Landlord as to form and substance;
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25.6.7 Tenant shall not then be in Default hereunder in any
respect;
25.6.8 Such third party's proposed use of the Demised Premises
shall be substantially the same as Tenant's Permitted Use;
25.6.9 Landlord shall not be bound by any provision of any
agreement pertaining to Tenant's transfer of rights or subletting of the Demised
Premises;
25.6.10 Any agreement pertaining to Tenant's transfer of
rights or subletting of the Premises shall be in a form acceptable to Landlord
in Landlord's reasonable discretion and any such agreement shall not be modified
or amended without Landlord's prior written consent, which shall not be
unreasonably withheld;
25.6.11 Tenant shall deliver to Landlord one original executed
copy of any and all written instruments evidencing or relating to Tenant's
transfer of rights or subletting of the Demised Premises; and
25.6.12 A list of Hazardous Materials, certified by the
proposed sublessee to be true and correct, which the proposed sublessee intends
to use or store in the Demised Premises. Additionally, Tenant shall deliver to
Landlord, on or before the date any proposed sublessee takes occupancy of the
Demised Premises, all of the items relating to Hazardous Materials of such
proposed sublessee.
25.7. Any sale, assignment, hypothecation or transfer of this Lease or
subletting of the Demised Premises that is not in compliance with the provisions
of this Section 25 shall be void and shall, at the option of Landlord, terminate
this Lease.
25.8. The consent by Landlord to an assignment or subletting shall not
relieve Tenant or any assignees of this Lease or sublessee of the Demised
Premises from obtaining the consent of Landlord to any further assignment or
subletting nor shall it release Tenant or any assignee or sublessee of Tenant
from full and primary liability under the Lease.
25.9. Notwithstanding any subletting or assignment, Tenant shall remain
fully and primarily liable for the payment of all Rent and other sums due, or to
become due hereunder, and for the full performance of all other terms,
conditions, and covenants to be kept and performed by Tenant. The acceptance of
Rent or any other sum due hereunder, or the acceptance of performance of any
other term, covenant, or condition thereof, from any other person or entity
shall not be deemed to be a waiver of any of the provisions of this Lease or a
consent to any subletting, assignment or other transfer of the Demised Premises.
25.10. If Tenant delivers to Landlord an Assignment Notice indicating a
desire to assign this Lease to an assignee other than as provided within Section
25.3, then Landlord shall have the
34
option, exercisable by giving notice to Tenant at any time within ten (10) days
after Landlord's receipt of the Assignment Notice, to terminate this Lease as of
the date specified in the Assignment Notice as the Assignment Date. If Landlord
exercises such option, then Tenant shall have the right to withdraw such
Assignment Notice by delivery to Landlord written notice of such election within
five (5) days after Landlord's delivery of notice electing to exercise such
option to terminate. In the event Tenant withdraws the Assignment Notice as
herein above provided, this Lease shall continue in full force and effect as if
such Assignment Notice as herein above provided, this Lease, and the term and
estate herein granted, shall terminate as of the Assignment Date. No failure of
Landlord to exercise any such option to terminate this Lease shall be deemed to
be Landlord's consent to the proposed assignment.
25.11. If Tenant shall sublet the Demised Premises or any part, Tenant
hereby immediately and irrevocably assigns to Landlord, as security for Tenant's
obligations under this Lease, all rent from any subletting of all or a part of
the Demised Premises, and Landlord as assignee and as attorney-in-fact for
Tenant, or a receiver for Tenant appointed on Landlord's application, may
collect such rent and apply it toward Tenant's obligations under this Lease;
except that, except during the continuation of a Default by Tenant, Tenant shall
have the right to collect such rent.
26. Attorneys' Fees
If either party commences an action against the other party arising out
of or in connection with this Lease, the prevailing party shall be entitled to
have and recover from the non-prevailing party reasonable attorneys' fees,
charges and disbursements and costs of suit and such reasonable fees, changes
disbursements and costs may be included in and as part of the judgment or
declaration resulting from such action.
27. Bankruptcy
27.1. In the event a debtor, trustee, or debtor in possession under the
Bankruptcy Code, or other person with similar rights, duties and powers under
any other law, proposes to cure any default under this Lease or to assume or
assign this Lease, and is obliged to provide adequate assurance to Landlord that
(i) a default will be cured, (ii) Landlord will be compensated for its damages
arising from any breach of this Lease, or (iii) future performance under this
Lease will occur, then adequate assurance shall include any or all of the
following, as designated by Landlord:
27.1.1 Those acts specified in the Bankruptcy Code or other
law as included within the meaning of adequate assurance, even if this Lease
does not concern a shopping center or other facility described in such laws;
27.1.2 A prompt cash payment to compensate Landlord for any
monetary defaults or actual damages arising directly from a breach of this
Lease;
35
27.1.3 A cash deposit in an amount at least equal to the
Security Deposit as referenced in 2.1.8 originally required at time of execution
of this Lease.
27.1.4 The assumption or assignment of all of Tenant's
interest and obligations under this Lease.
28. Estoppel Certificate
Tenant shall within ten (10) days of written notice from Landlord,
execute, acknowledge and deliver a statement in writing substantially in the
form attached to this Lease as Exhibit "E" with the blanks filled in, and on any
other form reasonably requested by a proposed lender or purchaser, (i)
certifying that this Lease is unmodified and in full force and effect (or, if
modified, stating the nature of such modification and certifying that this Lease
as so modified is in full force and effect) and the dates to which the rental
and other charges are paid in advanced, if any, (ii) acknowledging that there
are not, to Tenant's knowledge, any uncured defaults on the part of Landlord
hereunder, or specifying such defaults if any are claimed and (iii) setting
forth such further information with respect to this Lease or the Demised
Premises as may be reasonably requested thereon. Any such statement may be
relied upon by any prospective purchaser or encumbrancer of all or any portion
of the real property of which the Demised Premises are a part. Tenant's failure
or unreasonable refusal to deliver such statement within such time shall, at the
option of Landlord, constitute a Default under this Lease, and, in any event,
shall be conclusive upon Tenant that the Lease is in full force and effect and
without modification except as may be represented by Landlord in any certificate
prepared by Landlord and delivered to Tenant for execution.
29. [Intentionally Omitted.]
30. Definition of Landlord; Limitation of Landlord's Liability
30.1. The term "Landlord" as used in this Lease, so far as covenants or
obligations on the part of Landlord are concerned, shall be limited to mean and
include only Landlord or the successor-in-interest of Landlord under this Lease
at the time in question. In the event of any transfer, assignment or the
conveyance of Landlord's fee title or leasehold interest, the landlord herein
named (and in case of any subsequent transfers or conveyances, the then grantor)
shall be automatically freed and relieved from, and after the date of such
transfer, assignment or conveyance, of all liability for the performance of any
covenants or obligations contained in this Lease thereafter accruing or to be
performed by Landlord and, without further agreement, the transferee of such
title or leasehold shall be deemed to have assumed and agreed to observe and
perform any and all obligations of Landlord hereunder during its ownership or
ground lease of the Demised Premises. Landlord may transfer its interest in the
Demised Premises or this Lease without the consent of Tenant and such transfer
or subsequent transfer shall not be deemed a violation on the part of Landlord
or the then grantor of any of the terms or conditions of this
36
Lease; provided, however that such transferee shall have delivered to Tenant
written confirmation of such transferee's assumption of Landlord's obligations
hereunder and receipt of the Security Deposit.
30.2. If Landlord is in default of this Lease, and as a consequence,
Tenant recovers a money judgment against Landlord, the judgment shall be
satisfied only out of the proceeds of sale received on execution of the judgment
and levy against the right, title and interest of Landlord in the Building and
Project, and out of rent or other income from such real property receivable by
Landlord or out of the consideration received by Landlord from the sale,
financing, refinancing, or other disposition of all or any part of Landlord's
right, title, and interest in the Building and Project.
30.3. Landlord shall not be personally liable for any deficiency. If
Landlord is a partnership, joint venture, or limited liability company, the
partners or members of such partnership or limited liability company shall not
be personally liable and no partner or member of Landlord or limited liability
company shall be sued or named as a party in any suit or action or service of
process be made against any partner of Landlord except as may be necessary to
secure jurisdiction of the partnership or joint venture. If Landlord is a
corporation, the shareholders, directors, officers, employees, and/or agents of
such corporation shall not be personally liable and no shareholder, director,
officer, employee or agent of Landlord shall be sued or named as a party in any
suit or action or service of process made against any shareholder, director,
officer, employee or agent of Landlord. No partner, shareholder, director,
employee, or agent of Landlord shall be required to answer or otherwise plead to
any service of process and no judgment will be taken or writ of execution levied
against any partner, shareholder, director, employee or agent of Landlord.
30.4. Each of the covenants and agreements of this Section 30 shall be
applicable to any covenant or agreement either expressly contained in this Lease
or imposed by statute or by common law and shall survive the termination of this
Lease.
31. Project Control by Landlord
31.1. Landlord reserves full control over the Project to the extent not
inconsistent with Tenant's enjoyment of the Demised Premises. This reservation
includes but is not limited to right of Landlord to expand the Project,
subdivide the Project, the right to grant easements and licenses to others, the
right to enter the Building and the right to maintain or establish ownership of
the Building separate from fee title to the land on which the Building is
located; provided, however, that any expansion or subdivision of the Project
shall not permanently and unreasonably interfere with Tenant's access to or use
of the Demised Premises and will not directly result in an increase to Tenant's
Pro Rata Share of Operating Costs of more than 5% without Tenant's prior written
consent, which shall not be unreasonably withheld, conditioned or delayed.
37
31.2. Landlord further reserves the right to combine the Project with
any other project in the area of the Project and owned by Landlord or its
affiliates; provided, however, that any combination of the Project shall not
permanently and unreasonably interfere with Tenant's access to or use of the
Demised Premises and will not directly result in an increase to Tenant's Pro
Rata Share of Operating Costs of more than 5% without Tenant's prior written
consent, which shall not be unreasonably withheld, conditioned or delayed.
31.3. Tenant shall, should Landlord so request and of Landlord's sole
cost and expense for the reasonable fees and costs incurred by Tenant pursuant
thereto, promptly join with Landlord in execution of such documents as may be
reasonably appropriate to assist Landlord to implement any such action, provided
that Tenant need not execute any document which is of nature wherein liability
is created in Tenant or, if by reason of the terms of such document, Tenant will
be deprived of the quiet enjoyment and use of the Demised Premises as granted by
this Lease.
31.4. Landlord may, at any and all reasonable times during non-business
hours (or during business hours if Tenant so requests), and upon reasonable
advance notice which, with respect to entry to Tenant's manufacturing facilities
shall be not less than twenty-four hours (provided that no time restrictions
shall apply or advance notice need be given if an emergency necessitates an
immediate entry), enter the Demised Premises to (a) inspect the same and to
determine whether Tenant is in compliance with its obligations hereunder, (b)
supply any service Landlord is required to provide hereunder, (c) show the
Demised Premises to prospective lenders, insurers, investors, purchasers or,
during the last year of the Term, tenants, (d) post notices of
nonresponsibility, (e) access the telephone equipment, electrical substation and
fire risers, and (f) alter, improve or repair any portion of the Building which
Landlord is obligated or entitled to repair or maintain. Tenant and its
designees shall have the right to accompany Landlord personnel in connection
with any entry upon the Demised Premises, and Landlord shall comply with all
other reasonable rules which Tenant may have in connection with any required
access. In connection with any such alteration, improvement or repair, Landlord
may erect in the Demised Premises or elsewhere in the Building or the Project
scaffolding and other structures reasonably required for the work to be
performed. In no event shall Tenant's Rent xxxxx as a result of any such entry
or work; provided, however, that all such work shall be done in such a manner as
to cause as little interference to Tenant as reasonably possible. Landlord shall
at all times retain a key with which to unlock all of the doors in the Demised
Premises. If an emergency necessitates immediate access to the Demised Premises,
Landlord may use whatever force is necessary to enter the Demised Premises and
any such entry to the Demised Premises shall not constitute a forcible or
unlawful entry to the Demised Premises, an unlawful detainer of the Demised
Premises, or an eviction of Tenant from the Demised Premises, or any portion
thereof.
32. Quiet Enjoyment
38
So long as Tenant is not in default, Landlord covenants that Landlord
or anyone acting through or under Landlord will not disturb Tenant's occupancy
of the Demised Premises except as permitted by the provisions of this Lease.
33. Quitclaim Deed
Tenant shall execute and deliver to Landlord on the expiration or
termination of this Lease, immediately on Landlord's request, in recordable
form, a quitclaim deed to the Demised Premises or such other documentation
reasonably requested by Landlord evidencing termination of this Lease, which may
be recorded by Landlord at its sole cost and expense.
34. Rules and Regulations
Tenant shall faithfully observe and comply (and shall cause its
subtenants, guests, invitees, licensees, agents, employees and contractors to
comply) with the Rules and Regulations and all reasonable and nondiscriminatory
modifications thereof and additions thereto from time to time put into effect by
Landlord. Neither Landlord nor Tenant (except with respect to Tenant's
subtenants, guests, invitees, licensees, agents, employees and contractors)
shall be responsible for the violation or non-performance by any other tenant or
any agent, employee or invitee of Landlord of any of said Rules and Regulations.
35. Subordination and Attornment
35.1. This Lease shall be subject and subordinate to the lien of any
mortgage, deed of trust, or lease in which Landlord is tenant now or hereafter
in force against the Project or the Building and to all advances made or
hereafter to be made upon the security thereof without the necessity of the
execution and delivery of any further instruments on the part of Tenant to
effectuate such subordination provided, however, that as a condition to such
subordination, the lender must agree not to disturb Tenant's right of possession
upon and following a foreclosure sale so long as Tenant attorns to the lender or
new purchaser and Tenant is not in Default hereunder.
35.2. Notwithstanding the foregoing, Tenant shall execute and deliver
upon demand such further instrument or instruments evidencing such subordination
of this Lease to the lien of any such mortgage or mortgages or deeds of trust or
lease in which Landlord is tenant as may be reasonably required by Landlord
provided, however, that as a condition to such subordination, the lender must
agree not to disturb Tenant's right of possession upon and following a
foreclosure sale so long as Tenant attorns to the lender or new purchaser and
Tenant is not in default hereunder. However, if any such mortgagee, beneficiary
or landlord under lease wherein Landlord is tenant so elects, this Lease shall
be deemed prior in lien to any such lease, mortgage, or deed of trust upon or
including the Demised Premises regardless of date and Tenant will execute a
statement in writing to such effect at Landlord's request. If Tenant fails or
unreasonably refuses to execute any document reasonably required from Tenant
under this
39
Section within ten (10) days after written request therefor, Tenant hereby
constitutes and appoints Landlord or its special attorney-in-fact to execute and
deliver any such document or documents in the name of Tenant. Such power is
coupled with an interest and is irrevocable.
35.3. In the event any proceedings are brought for foreclosure, or in
the event of the exercise of the power of sale under any mortgage or deed of
trust made by the Landlord covering the Demised Premises, the Tenant shall at
the election of the purchaser at such foreclosure or sale attorn to the
purchaser upon any such foreclosure or sale and recognize such purchaser as the
Landlord under this Lease, so long as, with respect to a new purchaser, such new
purchaser assumes all of Landlord's obligations under this Lease arising from
and after the date of such transfer.
36. Surrender
36.1. No surrender of possession of any part of the Demised Premises
shall release Tenant from any of its obligations hereunder unless accepted by
Landlord.
36.2. The voluntary or other surrender of this Lease by Tenant shall
not work a merger, unless Landlord consents and shall, at the option of
Landlord, operate as an assignment to it of any or all subleases or
subtenancies.
36.3. The voluntary or other surrender of any ground or underlying
lease that now exists or may hereafter be executed affecting the Building or the
Project, or a mutual cancellation, thereof, or of Landlord's interest therein,
shall not work a merger and shall, at the option of the successor of Landlord's
interest in the Building or Project, operate as an assignment of this Lease.
36.4. Upon the expiration or earlier termination of this Lease, Tenant
shall surrender the Demised Premises to Landlord broom clean and free of debris;
with all of Tenant's property and effects removed therefrom except as otherwise
provided under Section 17.7 of this Lease; with all alterations, improvements
and fixtures required by Landlord to be removed from the Demised Premises as
provided under Section 17.7 of this Lease actually removed and all damage as a
result of or caused by such removal repaired; and with all licenses, permits and
similar items which restrict or affect the used of the Demised Premises released
and fully terminated.
37. Waiver and Modification
No provision of this Lease may be modified, amended or added to except
by an agreement in writing. The waiver by Landlord of any breach of any term,
covenant or condition herein contained shall not be deemed to be a waiver of any
subsequent breach of the same or any other term, covenant or condition herein
contained.
38. Waiver of Jury Trial and Counterclaims
40
THE PARTIES HERETO SHALL AND THEY HEREBY DO WAIVE TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO
AGAINST THE OTHER ON ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY
CONNECTED WITH THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, TENANT'S USE
OR OCCUPANCY OF THE DEMISED PREMISES, AND OR ANY CLAIM OF INJURY OR DAMAGE.
39. [Intentionally omitted.]
40. [Intentionally omitted.]
41. Hazardous Materials
41.1. Prohibition/Compliance. Tenant shall not cause or permit any
Hazardous Materials (as hereinafter defined) to be brought upon, kept or used in
or about the Demised Premises, the Building or the Project in violation of
applicable law by Tenant, its agents, employees, contractors or invitees. If
Tenant breaches the obligation stated in the preceding sentence, or if the
presence of Hazardous Materials results in contamination of the Demised
Premises, the Building, the Project or any adjacent property or if contamination
of the Demised Premises, the Building, the Project or any adjacent property by
Hazardous Materials otherwise occurs during the term of this Lease or any
extension or renewal hereof or holding over hereunder, Tenant hereby indemnifies
and shall defend and hold Landlord, its officers, directors, employees, agents
and contractors harmless from any and all claims, judgments, damages, penalties,
fines, costs, liabilities, or losses (including, without limitation, diminution
in value of the Demised Premises or any portion of the building or the Project,
damages for the loss or restriction on use of rentable or usable space or of any
amenity of the Demised Premises, the Building or the Project, damages arising
from any adverse impact on marketing of space in the Demised Premises, the
Building or the Project, and sums paid in settlement of claims, reasonable
attorneys' fees, consultant fees and expert fees) which arise during or after
the Lease term as a result of such contamination. This indemnification of
Landlord by Tenant includes, without limitation, costs incurred in connection
with any investigation of site conditions or any cleanup, remedial, removal, or
restoration work required by any federal, state or local governmental agency or
political subdivision because of Hazardous Materials present in the air, soil or
ground water above on or under the Demised Premises. Without limiting the
foregoing, if the presence of any Hazardous Materials on the Demised Premises,
the Building, the Project or any adjacent property, caused or permitted by
Tenant results in any contamination of the Demised Premises, the Building, the
Project or any adjacent property, Tenant shall promptly take all actions at its
sole expense as are necessary to return the Demised Premises, the Building, the
Project or any adjacent property, to the condition existing prior to the time of
such contamination, provided that Landlord's approval of such action shall first
be obtained, which approval shall not unreasonably be withheld so long as such
actions would not potentially have any material adverse long-term or short-term
effect on the Demised Premises, the Building or the Project.
41
41.2. Business. Landlord acknowledges that it is not the intent of this
Section 41 to prohibit Tenant from operating its business as described in
Section 2.1.9 above. Tenant may operate its business according to the custom of
the industry so long as the use or presence of Hazardous Materials is strictly
and properly monitored according to all applicable governmental requirements. As
a material inducement to Landlord to allow Tenant to use Hazardous Materials in
connection with its business, Tenant agrees to deliver to Landlord prior to the
Term Commencement Date a list identifying each type of Hazardous Materials to be
present on the Demised Premises and setting forth any and all governmental
approvals or permits required in connection with the presence of such Hazardous
Materials on the Demised Premises ("Hazardous Materials List"). Tenant shall
deliver to Landlord an updated Hazardous Materials List at least once a year and
shall also deliver an updated list before any new Hazardous Materials is brought
onto the Demised Premises. Tenant shall deliver to Landlord true and correct
copies of the following documents (the "Documents") relating to the handling,
storage, disposal and emission of Hazardous Materials prior to the Term
Commencement Date, or if unavailable at that time, concurrent with the receipt
from or submission to a governmental agency: permits; approvals; reports and
correspondence; storage and management plans, notice of violations of any laws;
plans relating to the installation of any storage tanks to be installed in or
under Building or the Project (provided, said installation of tanks shall only
be permitted after Landlord has given Tenant its written consent to do so, which
consent may be withheld in Landlord's sole and absolute discretion); and all
closure plans or any other documents required by any and all federal, state and
local governmental agencies and authorities for any storage tanks installed in,
on or under the Building or the Project for the closure of any such tanks.
Tenant is not required, however, to provide Landlord with any portion(s) of the
Documents containing information of a proprietary nature which, in and of
themselves, do not contain a reference to any Hazardous Materials or hazardous
activities. It is not the intent of this Section to provide Landlord with
information which could be detrimental to Tenant's business should such
information become possessed by Tenant's competitors. At the written request of
Landlord, Tenant agrees that it shall enter into a written agreement with other
tenant's at the Building concerning the equitable allocation of fire control
areas (as defined in the Uniform Building Code, and adopted by the City of San
Diego ("UBC")) within the Building for the storage of Hazardous Materials. In
the event that Tenant's use of Hazardous Materials is such that it utilizes fire
control areas in the Building in excess of Tenant's Pro Rata Share of the
Building as set forth in Section 2.1.6 above, Tenant agrees that it shall, at
its own expense, and upon the written request of Landlord, establish and
maintain a separate area of the Demised Premises or the Land classified by the
UBC as an "H" occupancy area, for the use and storage of Hazardous Materials, or
take such other action so that its share of the fire control areas of the
Building is not greater than Tenant's Pro Rata Share of the Building.
41.3. Termination of Lease. Notwithstanding the provisions of Section
41.1 above, if Tenant or the proposed assignee or sublessee is subject to an
enforcement order issued by any governmental authority in connection with the
continued use, disposal or storage of Hazardous Materials in material violation
of any applicable laws, (i) Landlord shall have the right, if Tenant
42
has failed to comply with such enforcement order within thirty (30) days after
written notice from Landlord of such non-compliance (or, if such failure to
comply results in an imminent threat to the health or safety of any tenants or
occupants of the Building or Project, within three (3) business days after
written notice from Landlord), to terminate this Lease in Landlord's sole and
absolute discretion (with respect to any such matter involving Tenant) and (ii)
it shall not be unreasonable for Landlord to withhold its consent to any
proposed assignment or subletting (with respect to any such matter involving a
proposed assignee or sublessee).
41.4. Testing. At any time, and from time to time (but not more
frequently than once in any calendar year unless Landlord reasonably believes
that a hazardous Materials release or spill has occurred), prior to the
expiration or earlier termination of the Term, Landlord shall have the right to
conduct appropriate tests of the Demised Premises, the Building and the Project
to demonstrate that contamination has occurred as a result of Tenant's use of
the Demised Premises. Tenant shall be solely responsible for and shall defend,
indemnify and hold the Landlord, its agents and contractors harmless from and
against any and all claims, costs and liabilities including actual attorneys'
fees, charges and disbursements, arising out of or in connection with any
removal, clean up, restoration and materials required hereunder to return the
Demised Premises and any other property of whatever nature to their condition
existing prior to the time of any such contamination. Tenant shall pay for the
cost of the tests of the Demised Premises.
41.5. Underground Tanks. If underground or other storage tanks storing
Hazardous Materials are located on the Demised Premises or are hereafter placed
on the Demised Premises by any party, Tenant shall monitor the storage tanks,
maintain appropriate records, implement reporting procedures, properly close any
underground storage tanks, and take or cause to be taken all other steps
necessary or required under the California Administrative Code, Title 23,
Chapter 3, Subchapter 16, "Underground Storage Tank Regulations," and Division
20, Chapter 6.7 of the California Health & Safety Code, "Underground Storage of
Hazardous Substances," as they now exist or may hereafter be adopted or amended.
41.6. Tenant's Obligations. Tenant's obligations under this Section 41
shall survive the expiration or earlier termination of the Lease. During any
period of time employed by Tenant or Landlord after the termination of this
Lease to complete the removal from the Demised Premises of any such Hazardous
Materials and the release and termination of any licenses or permits restricting
the use of the Demised Premises, Tenant shall continue to pay the full Rent in
accordance with this Lease, which Rent shall be prorated daily.
41.7. Definition of "Hazardous Materials." As used herein, the term
"Hazardous Materials" means any hazardous or toxic substance, material or waste
which is or becomes regulated by any local governmental authority, the State of
California or the United States government and includes, without limitation, any
material or substance which is (i) defined as a "hazardous waste, " "extremely
hazardous waste" or "restricted hazardous waste" under Section 25515 or 25117,
or listed pursuant to Section 25140, of the California Health and Safety Code,
Division 20, Chapter 6.5 (Hazardous Waste Control Law), (ii) Defined as a
"hazardous
43
substance" under Section 25316 of the California Health and Safety Code,
Division 2, Chapter 6.8 (Xxxxxxxxx-Xxxxxx-Xxxxxx Hazardous Substance Account
Act), (iii) defined as a "hazardous material," "hazardous substance" or
"hazardous waste" under Section 25501 of the California Health and Safety Code,
Division 20, Chapter 6.95 (Hazardous Substances), (v) petroleum, (vi) asbestos,
(vii) listed under Article 9 and defined as hazardous or extremely hazardous
pursuant to Article 11 of Title 22 of the California Administrative Code,
Division 4, Chapter 20, (viii) designated as a "hazardous substance" pursuant to
Section 311 of the Federal Water Pollution Control Act (33 U.S.C. Section 1317),
(ix) defined as a "hazardous waste" pursuant to Section 1004 of the Federal
Resource Conversation and Recovery Act, 42 U.S.C. Section 6901, et. seq. (42
U.S.C. Section 6903), or (x) defined as a "hazardous substance" pursuant to
Section 101 of the Comprehensive Environmental Response Compensation and
Liability Act, 42 U.S.C. Section 9601 et. seq. (42 U.S.C. Section 9601).
42. Option to Extend Term.
Tenant shall have the option to extend the term of the Lease upon the
following terms and conditions:
42.1. Tenant shall have five (5) consecutive options (each, an
"Extension Option") to extend the term of this Lease for five (5) years each
(each, an "Extension Term") on the same terms and conditions as the Lease.
During any Extension Term, Basic Annual Rent shall be payable at the Market Rate
(as defined below), but in no event less than the Basic Annual Rent payable on
the date immediately preceding the commencement such Extension Term, as adjusted
pursuant to Section 6 hereof. Basic Annual Rent shall be adjusted on the
commencement of each Extension Term and on each one (1) year anniversary of the
commencement such Extension Term in accordance with Section 6 above.
42.2. Extension Options are personal to Matrix Pharmaceuticals, Inc.
and its corporate successors and are not assignable separate and apart from this
Lease.
42.3. Extension Options are conditional upon Tenant giving Landlord
written notice of its election to exercise each Extension Option at least one
(1) year prior to the end of the expiration of the initial term of the Lease or
the expiration of any Extension Term.
42.4. Notwithstanding anything set forth above to the contrary,
Extension Options shall not be in effect and Tenant may not exercise any of the
Extension Options:
42.4.1 during any period of time that Tenant is in default
under any provision of this Lease; or
42.4.2 if Tenant has been in default under any provision of
this Lease three (3) or more times, whether or not the defaults are cured,
during the twelve (12) month period immediately prior to the date that Tenant
intends to exercise an Extension Option, whether or not
44
the defaults are cured.
42.5. The period of time within which any Extension Option may be
exercised shall not be extended or enlarged by reason of the Tenant's inability
to exercise the Expansion Option because of the provisions of Section 42.4
above.
42.6. The Extension Option shall terminate and be of no further force
or effect even after Tenant's due and timely exercise of an Extension Option,
if, after such exercise, but prior to the commencement date of an Extension
Term, (1) Tenant fails to timely cure any default by Tenant under this Lease; or
(2) Tenant has defaulted three (3) or more times during the period from the date
of the exercise of an Extension Option to the date of the commencement of the
Extension Term, whether or not such defaults are cured.
42.7. As used herein, "Market Rate" shall mean the price that a ready
and willing tenant would pay, at commencement of the Extension term, as monthly
base rent to a ready and willing landlord if such space were offered for lease
on the open market for a reasonable period of time and be the sum of the fair
market monthly rental rate per rentable square foot multiplied by the Rentable
Area of the Premises determined as follows: (a) as mutually agreed by Landlord
and Tenant within ten (10) days of Landlord's delivery to Tenant of Landlord's
opinion of the Market Rate for the first year of the Extension term ("Landlord
Rent Notice")(which shall be delivered to Tenant within ten (10) days of receipt
of Tenant's written Extension Notice); or (b) in the event that Landlord and
Tenant are unable to so agree within such ten (10) day period, the Market Rate
shall be determined by concurrent appraisals pursuant to subparagraph 42.8
below. The Market Rate shall be determined by considering (i) the highest and
best use of the Premises, (ii) the duration of the Extension Term, (iii) the
quality and prestige of the Premises (as then improved and maintained as
required by the terms and conditions of this Lease), (iv) recent monthly rental
rates for buildings of similar size and location, (v) anticipated CPI Index
changes from the date of the Market Rate determination to the date of the actual
Extension term commencement; (vi) all other relevant terms and conditions of
this Lease; provided, however, that in no event shall the Market Rate be less
than the Basic Annual Rent payable on the date immediately preceding the
commencement such Extension Term, as adjusted pursuant to Section 6 hereof.
42.8. In the event that Landlord and Tenant are unable to agree upon
the Market rate within the required ten (10) day period described above, the
Market Rate shall be determined as follows:
42.8.1 If Tenant rejects the Market Rate proposed by Landlord
in Landlord's Rent Notice, Landlord and Tenant shall attempt to agree in good
faith upon a single appraiser not later than five (5) days after the Landlord
receives notice of Tenant's rejection of Landlord's proposed Market Rate
("Tenant's Rejection Notice"), which date of receipt shall be within ten (10)
days of Landlord's delivery of Landlord's Rent Notice. If Landlord and Tenant
are unable to agree upon a single appraiser within such time period, then
Landlord and Tenant shall each appoint one appraiser not later than ten (10)
days after Landlord's receipt of Tenant's Rejection Notice.
45
Within five (5) days thereafter, the two appointed appraisers shall appoint a
third appraiser. Landlord and Tenant shall instruct the appraiser(s) to complete
the determination of the Market Rate not later than fifteen (15) days after all
appraisers have been appointed.
42.8.2 If either Landlord or Tenant fails to appoint its
appraiser within the prescribed time period, the single appraiser appointed
shall determine the Market Rate of the Premises for the first year of the
Extension Term. If both parties fail to appoint appraisers within the prescribed
time periods, then the first appraiser thereafter selected by a party shall
determine the Market Rate of the Premises for the first year of the Extension
Term.
42.8.3 Landlord and Tenant shall each bear the cost of its own
appraiser and the parties shall share equally the cost of the single or third
appraiser, if applicable. All appraisers so designated herein shall have at
least five (5) years' experience in the appraisal of similar office buildings in
the San Diego area and shall be members of professional organizations such as
MAI or equivalent.
42.8.4 If a single appraiser is chosen, then such appraiser
shall determine the Market Rate of the Premises for the first year of the Option
Term. Otherwise, the Market Rate of the Premises for the first year of the
Option Term shall be the arithmetic average of (2) of the three (3) appraisals
which are closest in amount, and the third appraisal shall be disregarded.
43. Right of First Offer to Purchase.
Tenant shall have a right of first offer (the "Purchase Right") to
purchase the Building upon the following terms and conditions:
43.1. In the event that Landlord desires to sell the Building, no less
than ten (10) days prior to actively marketing the Building, Landlord shall
deliver to Tenant written notice (the "Sale Notice") of Landlord's intent to
sell the Building, together with the terms and conditions under which Landlord
is prepared to sell the Building. Tenant shall have ten (10) days following
delivery of the Sale Notice to deliver to Landlord written notification of
Tenant's exercise of the Purchase Right upon the terms and conditions of the
Sale Notice. In the event Tenant fails to timely deliver such notice, or if on
the date which is thirty (30) days after the delivery of the Sale Notice,
Landlord and Tenant have failed to agree upon any of the terms of the purchase
agreement for the Building after negotiating in good faith, Tenant shall be
deemed to have waived any right to purchase the Building and Landlord may
thereafter sell the Building to any third party free of the Purchase Right;
provided, however, that in the event Tenant does not purchase the Building
following timely exercise of the Purchase Right due to a failure of Landlord and
Tenant to agree upon the terms of the purchase agreement, any purchaser who
subsequently acquires title to the Building shall acquire such title subject to
the Purchase Right and Tenant's rights in connection therewith.
43.2. In the event that Tenant and Landlord enter into a purchase
agreement following
46
the timely exercise of the Purchase Right, the purchase and sale of the Building
shall close no sooner than the date which is nine (9) months, and no later than
the date which is twelve (12) months, following receipt by Landlord of Tenant's
election to exercise the Purchase Right.
43.3. Notwithstanding the above, the Purchase Right shall not be in
effect and may not be exercised by Tenant during any period of time that Tenant
is in Default under any provision of the Lease (provided, however, that
notwithstanding the foregoing Tenant may, as a condition to exercising the
Purchase Right, cure any Default due to failure to any Rent or other sum due
Landlord).
43.4. The Purchase Right is personal to Matrix Pharmaceuticals, Inc.
and its corporate successors and may not be transferred separate and apart from
this Lease or to any other person or entity (including, without limitation, any
successor tenant).
43.5. The Purchase Right shall terminate and be of no further force or
effect upon the expiration or earlier termination of the Term.
43.6. The Purchase Right shall terminate and be of no further force or
effect even after Tenant's due and timely exercise of the Purchase Right, if,
after such exercise, but prior to the closing of the purchase and sale of the
Building, (1) Tenant fails to timely cure any Default by Tenant under the Lease
(provided, however, that notwithstanding the foregoing Tenant may, as a
condition to the closing of the purchase and sale of the Building, cure any
Default due to failure to any Rent or other sum due Landlord); or (2) Tenant has
defaulted three (3) or more times, whether or not such Defaults are cured.
44. Miscellaneous
44.1. Terms and Headings. Where applicable in this Lease, the singular
includes the plural and the masculine or neuter includes the masculine, feminine
and neuter. The section headings of this Lease are not a part of this Lease and
shall have no effect upon the construction or interpretation of any part hereof.
44.2. Examination of Lease. Submission of this instrument for
examination or signature by Tenant does not constitute a reservation of or
option for lease, and it is not effective as a lease or otherwise until
execution by and delivery to both Landlord and Tenant.
44.3. Time. Time is of the essence with respect to the performance of
every provision of this Lease in which time of performance is a factor.
44.4. Covenants and Conditions. Each provision of this Lease
performable by Tenant shall be deemed both a covenant and a condition.
44.5. Consents. Whenever consent or approval of either party is
required, that party
47
shall not unreasonably withhold such consent or approval, except as may be
expressly set forth to the contrary.
44.6. Entire Agreement. The terms of this Lease are intended by the
parties as a final expression of their agreement with respect to the terms as
are included herein, and may not be contradicted by evidence of any prior or
contemporaneous agreement. The Exhibits are incorporated into this Lease and the
Lease and the Exhibits constitute a single document.
44.7. Severability. Any provision of this Lease which shall provide to
be invalid, void, or illegal in no way affects, impairs or invalidates any other
provision hereof, and such other provisions shall remain in full force and
effect.
44.8. Recording. Either party may, but shall not be obligated to,
record a short form memorandum hereof upon reasonable advance notice to the
other party, which shall be executed in recordable form and otherwise in form
satisfying to Landlord within ten (10) business days after receipt of the other
party's written request therefor. Neither parties shall record this Lease.
Tenant shall be responsible for the cost of recording any Memorandum of Lease,
including any transfer or other taxes incurred in connection with said
recordation.
44.9. Impartial Construction. The language in all parts of this Lease
shall be in all cases construed as a whole according to its fair meaning and not
strictly for or against either Landlord or Tenant.
44.10. Inurement. Each of the covenants, conditions and agreements
herein contained shall inure to the benefit of and shall apply to and be binding
upon the parties hereto and their respective heirs, legatees, devisees,
executors, administrators, successors, assigns, sublessees, or any person who
may come into possession of said Demised Premises or any part thereof in any
manner whatsoever. Nothing in this Section 43.10 contained shall in any way
alter the provisions against assignment or subletting in this Lease provided.
44.11. Notices. Any notice, consent, demand, xxxx, statement, or other
communication required or permitted to be given hereunder must be in writing and
may be given by personal delivery, reputable overnight courier or by mail, and
if given by mail shall be deemed sufficiently given two (2) days after time when
deposited in United States Mail is sent by registered or certified mail, and if
given by other means shall be deemed given when received, addressed to Tenant or
Landlord at the addresses shown in Sections 2.1.10 and 2.1.11 of the Basic Lease
Provisions. Either party may, by notice to the other given pursuant to this
Section, specify additional or different addresses for notice purposes.
44.12. Jurisdiction. This Lease has been negotiated and entered into in
the State of California and shall be governed by, construed and enforced in
accordance with the laws of the State of California, applied to contracts made
in California to be wholly performed in California.
44.13. Authority. That individual or those individuals signing this
Lease guarantee,
48
warrant and represent that said individual or individuals have the power,
authority and legal capacity to sign this Lease on behalf of and to bind all
entities, corporations, partnerships, joint venturers or other organizations
and/or entities on whose behalf said individual or individuals have signed.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of
the date first above written.
Landlord:
ARE - 4757 NEXUS CENTRE, LLC,
a Delaware limited liability company
By: Alexandria Real Estate Equities, L.P.,
a Delaware limited partnership,
managing member
By: ARE-QRS Corp., a Maryland
corporation, general partner
By: /s/ Xxxx X. Xxxxxx
----------------------------
Name: Xxxx X. Xxxxxx
----------------------
Its: Chief Executive Officer
-----------------------
Tenant:
MATRIX PHARMACEUTICAL, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxx
-----------------------------
Name: Xxxxxx X. Xxxxx
---------------------------
Its: Vice President of Operations
----------------------------
49
EXHIBITS
EXHIBIT "A" LAND
EXHIBIT "B" PROJECT
EXHIBIT "C" RULES AND REGULATIONS
EXHIBIT "D" TENANT'S PERSONAL PROPERTY
EXHIBIT "E" ESTOPPEL CERTIFICATE
50
Exhibit "A"
LAND
Parcel 1 of Parcel Map 17892, in the City of San Diego, County
of San Diego, State of California, according to Map filed in the Office of the
County Recorder of San Diego County on August 6, 1997.
A-1
Exhibit "B"
PROJECT
Parcels 1 and 2 of Parcel Map 17892, in the City of San Diego,
County of San Diego, State of California, according to Map filed in the Office
of the County Recorder of San Diego County on August 6, 1997.
B-1
EXHIBIT "C"
RULES AND REGULATIONS
-1-
No awnings shall be attached to the outside walls of the Demised
Premises or Building.
-2-
Tenant shall not install any loudspeaker or other devices on the roof
or exterior walls of the Demised Premises or Building. Tenant shall not
interfere with radio or television broadcasting or reception outside the
Building from or in the Premises.
-3-
The sashes, sash doors, skylights, windows and doors that reflect or
admit light and air into the halls, passageways or other public places in the
Demised Premises or Building shall not be covered or obstructed, nor shall any
bottles, parcels or other articles be placed on the windowsills. Neither the
interior nor the exterior of any windows shall be coated or otherwise
sunscreened without Landlord's prior written consent.
-4-
With the exception of signage existing on the Term Commencement Date,
no sign, advertisement or notice shall be exhibited, painted or affixed by
Tenant on any part of, so as to be seen from the outside of the Building without
Landlord's prior written consent. In the event of Tenant's violation of the
foregoing, Landlord may remove the same without any liability and may charge the
expense incurred in such removal to Tenant.
-5-
Tenant shall store all of its trash and garbage within the Demised
Premises or in other facilities provided by Landlord. Tenant shall not place in
any trash box or receptacle any material which cannot be disposed of in the
ordinary and customary manner of trash and garbage disposal.
-6-
Tenant assumes any and all responsibility for protecting the Demised
Premises or Building from theft, robbery and pilferage, which includes keeping
doors locked and other means of entry into the Demised Premises or Building
closed.
-7-
Landlord shall have card key access to the Building for emergency
purposes. Tenant must, upon the termination of its tenancy, give to Landlord all
keys pertaining to the Demised Premises and the Building, and in the event of
the loss of any keys so furnished, Tenant shall pay Landlord the cost of
replacing same or of changing the lock or locks opened by such lost key(s) if
Landlord shall deem it necessary to make such change.
-8-
No windows or other air conditioning or heating units or other similar
apparatus shall be installed or used by Tenant without Landlord's prior written
consent.
-9-
The water and wash closets and other plumbing fixtures shall not be
used for any purpose other than those for which they were constructed and no
sweepings, rubbish, rags or other substances shall be thrown therein. All
damages resulting from any misuse of the fixtures by Tenant of its servants,
employees, agents, visitors or licensees shall be borne by Tenant
1
-10-
Landlord reserves the right to inspect all safes or other heavy or
bulky equipment or articles, the weight of which may exceed the floor load for
which the Building is designed, or such equipment or articles as may violate any
of the provisions of the Lease of which these Rules and Regulations are a part.
Tenant shall not use any machinery or other bulky articles in the Demised
Premises or Building, which by its weight might injure the floor of the Demised
Premises or Building.
-11-
Neither Tenant nor its servants, employees, agents, visitors or
licensees shall at any time bring or keep upon the Demised Premises or Building
any flammable, combustible or explosive fluid, chemical or substance, except for
a reasonable quantity of such material reasonably necessary for the conduct of
Tenant's trade or business.
-12-
Tenant shall not, without Landlord's prior written consent, occupy or
permit any portion of the Demised Premises or Building to be occupied or used
for other than as provided under Section 2.1.9. The Demised Premises or Building
shall not be used for lodging or sleeping.
-13-
Tenant shall not make, or permit to be made, any unseemly or disturbing
noises, or disturb or interfere with neighboring buildings or premises or those
having business with it by the use of any musical instrument, radio, phonographs
or unusual noise, or in any other way. Neither Tenant nor its servants,
employees, agents, visitors or licensees shall throw anything out of doors,
windows or skylights or down the passageways.
-14-
No birds or non-laboratory animals of any kind shall be brought into or
kept in or about the Demised Premises or Building except as required pursuant to
the American with Disabilities Act (ADA), and no cooking shall be done or
permitted by Tenant in its Premises, except that provided for in Tenant's
cafeteria (or similar facility), if any, for the preparation of coffee, tea, hot
chocolate, pastries, sandwiches and similar microwaveable items for Tenant, its
employees and visitors. Tenant shall nor cause or permit any unusual or
objectionable odors to emanate from the Building.
-15-
Except in Tenant's lunch room, no vending or coin operated machines
shall be placed within the Demised Premises or Building without Landlord's prior
written consent.
2
-16-
Landlord shall have the right to prohibit any advertising by Tenant
which, in Landlord's opinion, tends to impair the reputation of the Project or
its desirability as an office/laboratory building, and upon written notice from
Landlord, Tenant shall refrain from or discontinue such advertising. Nothing in
this provision, however, shall be construed to prevent Tenant from installing
reasonable signage at the Building identifying Tenant provided such signage is
located at a place and is of a size and is constructed of a material acceptable
to Landlord.
-17-
Canvassing, soliciting and peddling in the Building are prohibited and
Tenant shall cooperate to prevent same.
-18-
Landlord reserves the right to exclude or expel from the Demised
Premises or Building any person who, in the judgment of Landlord, is intoxicated
or under the influence of liquor or drugs, or who shall in any manner do any act
in violation of the Rules and Regulations of the Building.
-19-
Landlord and Tenant agree that there shall be no consent to any waiver
of any of these Rules or Regulations unless said waiver is done in writing and
acknowledged by Landlord and Tenant.
-20-
Landlord reserves the right at any time to change or rescind any one or
more of these Rules or Regulations, or to make such other and further reasonable
Rules and Regulations as in Landlord's reasonable judgment may from time to time
be necessary for the management, safety, care and cleanliness of the Demised
Premises or Building, and for the preservation of good order therein, as well as
for the convenience of other occupants and tenants of the Building. Landlord
shall not be responsible to Tenant herein or to any other person for the
non-observance of the Rules and Regulations by any other tenant or other person.
Tenant shall be deemed to have read these Rules and Regulations and to have
agreed to abide by them as a condition to its occupancy of the Demised Premises
and Building.
-21-
These Rules and Regulations are in addition to, and shall not be
construed to in any way modify or amend, in whole or in part, the terms,
covenants, agreements and conditions of Tenant's lease of its Premises.
-22-
Tenant shall be responsible for the observance of all of the foregoing
Rules and Regulations by Tenant's employees, agents, clients, customers,
invitees and guests.
3
Exhibit "D"
EXCLUDED PERSONAL PROPERTY
--------------------------
0000 XXXXX XXXXXX XXXXX, XXX XXXXX, XXXXXXXXXX
ITEM DESCRIPTION QTY. LOCATION
1 All conference room furniture and chairs
2 All lab stools and chairs
3 All laboratory equipment and glassware
4 All lunch room furniture and chairs
5 All manufacturing process equipment
6 All office cubicle furniture and chairs
7 All patio furniture and chairs
8 All plug-in refrigerators and freezers
9 All stand-alone corrosive cabinets
10 All stand-alone flammable cabinets
11 Amsco single door autoclave 1 117
12 Xxxxx Edgegard Hood 1 188
13 Xxxxx Edgegard Hood E6552 1
14 Xxxxx Stenigard Hood 1 118
15 Bike Lockers 1
16 BioChem Garb Hood BC-6 1 147
17 BloChem Garb Hood BC-8 1 147
18 BioKlone 2 bio-contamination hood 1 143
19 Captair Labx Ductless Filtration Hood 1 152
20 Continental 2-door refrigerator 1 143
21 Continental 3-door refrigerator (MEIN 11537) 1 115
22 Continental refrigerator w/wheels 1 117
23 Forklift-Komatsu 1
24 Forma incubator, large, model 3919 2 143
25 Forma incubator, small, model 3546 3 143
28 Gallenkamp oven 1
27 Xxxxxx Filter Housing 3
28 Xxxxxxxx SafeAir Hood 1 143
29 Hazardous materials storage 5 Outside
30 Mobile laminar flow hood 3
Exhibit "D"
EXCLUDED PERSONAL PROPERTY
--------------------------
0000 XXXXX XXXXXX XXXXX, XXX XXXXX, XXXXXXXXXX
ITEM DESCRIPTION QTY. LOCATION
31 Portable particle counter- Met one 1
32 Refrigerator recovery unit (maint. tool) 1
33 Remote particle counter - Met One 12
34 Scotsman Icemaker (E-144) 1 117
35 Signage for Reception Xxxx
00 Stainless steel racks
37 Stainless steel trays 1
38 Sterilizer, Xxxxxxx 1
39 Storage Trailers 2 Outside
40 Telephone System (Siemens)
Exhibit "E"
ESTOPPEL CERTIFICATE
THIS TENANT ESTOPPEL CERTIFICATE ("Certificate"), dated as of ________,
19__, is executed by _____________ ("Tenant") in favor of Alexandria Real Estate
Equities, Inc., a Maryland corporation, together with its nominees, designees
and assigns (collectively, "Buyer"), and in favor of _______________ together
with its nominees, designees and assigns (collectively, "Lender").
RECITALS
A. Buyer and _____________ ("Landlord"), have entered into that certain
Purchase and Sale Agreement and Joint Escrow Instructions, dated as of
_________, 19__ (the "Purchase Agreement"), whereby Buyer has agreed to
purchase, among other things, the improved real property located in the City of
_________, County of _________, State of __________, more particularly described
on Exhibit "A" attached to the Purchase Agreement (the "Property").
B. Tenant and Landlord have entered into that certain Lease Agreement,
dated as of ___________ (together with all amendments, modifications,
supplements, guarantees and restatements thereof, the "Lease"), for a portion of
the Property.
C. Pursuant to the Lease, Tenant has agreed that upon the request of
Landlord, Tenant would execute and deliver an estoppel certificate certifying
the status of the Lease.
D. In connection with the Purchase Agreement, Landlord has requested
that Tenant execute this Certificate with an understanding that Lender will rely
on the representations and agreements below in granting to Buyer a loan.
NOW, THEREFORE, Tenant certifies, warrants, and represents to Buyer and
Lender as follows:
Section 1. Lease.
Attached hereto as Exhibit "1" is a true, correct and complete copy of
the Lease, including the following amendments, modifications, supplements,
guarantees and restatements thereof, which together represent all of the
amendments, modifications, supplements, guarantees and restatements thereof:
________________________________________________________________________________
_______________________________________________________________________________.
(If none, please state "None.")
Section 2. Leased Premises.
Pursuant to the Lease, Tenant leases those certain premises (the
"Leased Premises") consisting of approximately ________________ (______)
rentable square feet within the Property, as more particularly described in the
Lease. In addition, pursuant to the terms of the Lease, Tenant has the
[non-exclusive] right to use [_____ parking spaces/the parking area] located on
the Property during the term of the Lease. [Cross-out the preceding sentence or
portions thereof if inapplicable.]
Section 3. Full Force of Lease.
The Lease has been duly authorized, executed and delivered by Tenant,
is in full force and effect has not been terminated and constitutes a legally
valid instrument, binding and enforceable against Tenant in accordance with its
terms, subject only to applicable limitations imposed by laws relating to
bankruptcy and creditor's rights.
Section 4. Complete Agreement.
The Lease constitutes the complete agreement between Landlord and
Tenant for the Leased Premises and the Property, except as modified by the Lease
amendments noted above (if any), has not been modified, altered or amended.
Section 5. Acceptance of Leased Premises.
Tenant has accepted possession and is currently occupying the Leased
Premises.
Section 6. Lease Term.
2
The term of the Lease commenced on _______________ and ends on
_______________, subject to the following options to extend:____________________
____________________________________________________________________.
(If none, please state "None.")
Section 7. Purchase Rights.
Tenant has no option, right of first refusal, right of first offer, or
other right to acquire or purchase all or any portion of the Leased Premises or
all or any portion of, or interest in, the Property, except as follows:_________
________________________________________________________________________________
______________________.
(If none, please state "None.")
Section 8. Rights of Tenant.
Except as expressly stated in this Certificate, Tenant:
(a) has no right to renew or extend the term of the Lease;
(b) has no option or other right to purchase all or any part of the
Leased Premises or all or any part of the Property;
(c) has no right, title, or interest in the Leased Premises, other than
as Tenant under the Lease.
Section 9. Rent.
(a) The obligation to pay rent under the Lease commenced on ___________.
The rent under the Lease is current, and Tenant is not in default in the
performance of any of its obligations under the Lease.
(b) Tenant is currently paying base rent under the Lease in the amount
of _____________________ Dollars ($________) per month. Tenant has not received
and is not, presently, entitled to any abatement, refunds, rebates, concessions
or forgiveness of rent or other charges, free rent, partial rent, or credits,
offsets or reductions in rent, except as follows: ______________________________
________________________________________________________________________________
___________________________.
3
(If none, please state "None.")
(c) Tenant's estimated share of operating expenses, common area charges,
insurance, real estate taxes and administrative and overhead expenses is
___________ percent (_______%) and is currently being paid at the rate of
_______________________ Dollars ($________) per month, payable to:______________
____________________________________________________________________.
(d) There are no existing defenses or offsets against rent due or to
become due under the terms of the Lease, and there presently is no default or
other wrongful act or omission by Landlord under the Lease or otherwise in
connection with Tenant's occupancy of the Leased Premises, nor is there a state
of facts which with the passage of time or the giving of notice or both could
ripen into a default on the part of Tenant, or to the best knowledge of Tenant,
could ripen into a default on the part of Landlord under the Lease, except as
follows: _______________________________________________________________________
________________________________________________________________________________
_______________________________________________________________________________.
(If none, please state "None.")
Section 10. Security Deposit.
The amount of Tenant's security deposit held by Landlord under the Lease
is ___________________ Dollars ($ ___________
Section 11. Prepaid Rent.
The amount of prepaid rent, separate from the security deposit, is
___________________________ Dollars ($_______), covering the period from ______
to ______.
Section 12. Insurance.
All insurance, if any, required to be maintained by Tenant under the
Lease is presently in effect.
Section 13. Pending Actions.
4
There is not pending or, to the knowledge of Tenant, threatened against
or contemplated by the Tenant, any petition in bankruptcy, whether voluntary or
otherwise, any assignment for the benefit of creditors, or any petition seeking
reorganization or arrangement under the federal bankruptcy laws or those of any
state.
Section 14. Tenant Improvements.
As of the date of this Certificate, to the best of Tenant's knowledge,
Landlord has performed all obligations required of Landlord pursuant to the
Lease; no offsets, counterclaims, or defenses of Tenant under the Lease exist
against Land- lord; and no events have occurred that, with the passage of time
or the giving of notice, would constitute a basis for offsets, counterclaims, or
defenses against Landlord, except as follows:___________________________________
________________________________________________________________________________
_________________________.
(If none, please state "None.")
Section 15. Assignments by Landlord.
Tenant has received no notice of any assignment, hypothecation or pledge
of the Lease or rentals under the Lease by Landlord. Tenant hereby consents to
an assignment of the lease and rents to be executed by Landlord to Buyer or
Lender in connection with the Loan and acknowledges that said assignment does
not violate the provisions of the Lease. Tenant acknowledges that the interest
of the Landlord under the Lease is to be assigned to Buyer or Lender solely is
security for the purposes specified in said assignment and Buyer or Lender shall
have no duty, liability or obligation whatsoever under the Lease or any
extension or renewal thereof, either by virtue of said assignment or by any
subsequent receipt or collection of rents thereunder, unless Buyer or Lender
shall specifically undertake such liability in writing. Tenant agrees that upon
receipt of a written notice from Buyer or Lender of a default by Landlord under
the Loan, Tenant will thereafter pay rent to Buyer or Lender in accordance with
the terms of the Lease.
Section 16. Assignments by Tenant.
Tenant has not sublet or assigned the Leased Premises or the Lease or
any portion thereof to any sublessee or assignee. No one except Tenant and its
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employees will occupy the Leased Premises. The address for notices to be sent to
Tenant is as set forth in the Lease.
Section 17. Environmental Matters.
The operation and use of the Leased Premises does not involve the
generation, treatment, storage, disposal or release into the environment of any
hazardous materials, regulated materials and/or solid waste, except those used
in the ordinary course of operating a retail store or otherwise used in
accordance with all applicable laws.
Section 18. Succession of Interest.
Tenant agrees that, in the event Buyer or Lender succeeds to interest of
Landlord under the Lease:
(a) Buyer or Lender shall not be liable for any act or omission of any
prior landlord (including Landlord);
(b) Buyer or Lender shall not be liable for the return of any security
deposit;
(c) Buyer or Lender shall not be bound by any rent or additional rent
which Tenant might have prepaid under the Lease for more than the current month;
(d) Buyer or Lender shall not be bound by any amendments or
modifications of the Lease made without prior consent of Buyer or Lender;
(e) Buyer or Lender shall not be subject to any offsets or defenses
which Tenant might have against any prior landlord (including Landlord); or
(f) Buyer or Lender shall not be liable under the Lease to Tenant for
the performance of Landlord's obligations under the Lease beyond Buyer or
Lender's interest in the Property.
Section 19. Notice of Default.
Tenant agrees to give Buyer and Lender a copy of any notice of default
under the Lease served upon Landlord at the same time as such notice is given to
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the Landlord. Tenant further agrees that if Landlord shall fail to cure such
default within the applicable grace period, if any, provided in the Lease, then
Buyer or Lender shall have an additional sixty (60) days within which to cure
such default, or if such default cannot be cured within such sixty (60) day
period, such sixty (60) day period shall be extended so long as Buyer or Lender
has commenced and is diligently pursuing the remedies necessary to cure such
default (including, but not limited to, commencement of foreclosure proceedings,
if necessary to effect (such cure), in which event the Lease shall not be
terminated while such remedies are being pursued.
Section 20. Notification by Tenant.
From the date of this Certificate and continuing until
_____________, Tenant agrees to immediately notify Buyer and Lender, in writing
by registered or certified mail, return receipt requested, at the following
addresses, on the occurrence of any event or the discovery of any fact that
would make any representation contained in this Certificate inaccurate:
If To Buyer: Alexandria Real Estate Equities, Inc.
000 X. Xxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Corporate Secretary
With A Copy To: Skadden, Arps, Slate, Xxxxxxx & Xxxx
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx
If To Lender:
Tenant makes this Certificate with the knowledge that it will be relied
upon by Buyer and Lender in agreeing to purchase the Property.
Tenant has executed this Certificate as of the date first written above
by the person named below, who is duly authorized to do so.
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TENANT
________________________________________
By: __________________________
Name:
Its:
