ALZA
Ground Lease
EXHIBIT 10.13
GROUND LEASE
THIS GROUND LEASE (this "Lease"), dated this first day of
September, 1997 is made and entered into by and between Xxxxxxx X.
Xxxxx, Trustee, or his Successor Trustee, UTA dated July 20, 1977
(Xxxxxxx X. Xxxxx Separate Property Trust), as amended, and Xxxx
Xxxxxxxxx, Trustee, or his Successor Trustee, UTA dated July 20, 1977
(Xxxx Xxxxxxxxx Survivor's Trust, formerly known as the Arrillaga
Family Trust), as amended (collectively, "Landlord"), and ALZA
Corporation, a Delaware corporation ("Tenant").
Landlord and Tenant (sometimes referred to collectively as the
"Parties") agree to the terms, covenants and conditions of this Lease,
as follows:
1. PREMISES. Landlord hereby leases to Tenant and Tenant hereby
leases from Landlord that certain unimproved parcel of land consisting
of approximately 6.925 acres, located at Amphitheatre Parkway and
Xxxxxx Avenue in Mountain View, California. The 6.925 acres of land
("Premises") leased hereunder is leased strictly on an "as is" basis
and subject to all assessments, covenants, conditions, liens,
encumbrances and title matters and is more particularly described in
Exhibit A attached hereto and by reference made a part hereof. The
Premises together with all buildings ("Buildings") and other
improvements to be located thereon from time to time shall hereafter
be referred to as the "Project".
2. USE.
2.1. Permitted Uses. Subject to all of the terms and provisions of
this Lease, Tenant shall be entitled to use the Project for any lawful
purpose.
2.2. Compliance. Tenant, at its sole cost and expense, shall promptly
comply with all laws, statutes, ordinances and governmental rules,
regulations or requirements now or hereafter in effect relating to the
Project; with the requirements of any board of fire underwriters or
other similar body now or hereafter constituted; and with any
direction or occupancy certificate issued pursuant to law by any
public officer; provided, however, that no such failure shall be
deemed a breach of the provisions of this Lease if Tenant, immediately
upon notification, commences to remedy or rectify said failure. The
judgment of any court of competent jurisdiction, following the
expiration of any appeal period, or the admission of Tenant in any
action against Tenant, whether Landlord be a party thereto or not,
that Tenant has violated any such law, statute, ordinance or
governmental rule, regulation, requirement, direction or provision,
shall be conclusive of that fact as between Landlord and Tenant.
2.3. Restriction on Use. Tenant shall not do or permit to be done in
or about the Project nor bring or keep or permit to be brought or kept
in or about the Project anything which is prohibited by or will in any
way increase the existing rate of (or otherwise adversely affect) fire
or any insurance covering the Project or any part thereof, or any of
its contents, or will cause a cancellation of any insurance covering
the Project or any part thereof, or any of its contents, except to the
extent that Tenant, upon notice thereof, is able to arrange for the
continuation or replacement of such insurance coverage, with any
increased costs of such continued or replacement insurance to be paid
exclusively by Tenant. No materials, supplies, equipment, finished
products or semi-finished products, raw materials or articles of any
nature shall be stored upon or permitted to remain outside any
Building, except in screened storage areas. Tenant shall not commit
or suffer to be committed any waste in or upon the Project. Tenant
shall indemnify, defend and hold Landlord harmless against any loss,
expense, damage, reasonable attorneys' fees, or liability arising out
of failure of Tenant to comply with any applicable law relating to
Tenant's use of the Project or with which Tenant is otherwise
obligated to comply under the terms of this Lease. The provisions of
this Paragraph are for the benefit of Landlord only and shall not be
construed to be for the benefit of any tenant or occupant of the
Project.
2.4. Hazardous Materials. Landlord and Tenant agree as follows with
respect to the existence or use of "Hazardous Materials" (as defined
herein) on, in, under or about the Project and the real property
located beneath said Project (hereinafter collectively referred to as
the "Property"):
A. As used herein, the term "Hazardous Materials" shall mean any
material, waste, chemical, mixture or byproduct which is or hereafter
is defined, listed or designated under Environmental Laws (defined
below) as a pollutant, or as a contaminant, or as a toxic or hazardous
substance, waste or material, or any other hazardous, toxic,
biohazardous, or radioactive material, waste, chemical, mixture or
byproduct, or which is listed, regulated or restricted by any
Environmental Law (including, without limitation, petroleum
hydrocarbons or any distillates or derivatives or fractions thereof,
polychlorinated biphenyls, or asbestos). As used herein, the term
"Environmental Laws" shall mean any applicable Federal, State of
California or local government law (including common law), statute,
regulation, rule, ordinance, permit, license, order, requirement,
agreement, or approval, or any determination, judgment, directive, or
order of any executive or judicial authority at any level of Federal,
State of California or local government (whether now existing or
subsequently adopted or promulgated) relating to pollution or the
protection of the environment, ecology, natural resources, or public
health and safety.
B. As used herein, the term "Tenant's Hazardous Materials
Activities" shall mean any and all use, handling, generation, storage,
disposal, treatment, transportation, discharge, or emission of any
Hazardous Materials on, in, beneath, to, from, at or about the
Property, in connection with Tenant's use of the Property, or by
Tenant or by any of Tenant's agents, employees, contractors, vendors,
invitees, visitors or its future subtenants or assignees. Tenant
agrees that any and all Tenant's Hazardous Materials Activities shall
be conducted in strict, full compliance with applicable Environmental
Laws at Tenant's expense, and shall not result in any contamination of
the Property or the environment. Tenant agrees to provide Landlord
with prompt written notice of any spill or release of Hazardous
Materials at the Property during the term of the Lease of which Tenant
becomes aware, and further agrees to provide Landlord with prompt
written notice of any material violation of Environmental Laws in
connection with Tenant's Hazardous Materials Activities of which
Tenant becomes aware. If Tenant's Hazardous Materials Activities
involve Hazardous Materials other than normal use of customary
landscaping, cleaning, household and office supplies and personal use
items, Tenant also agrees at Tenant's expense: (i) to install such
Hazardous Materials monitoring, storage and containment devices as
required by the governing agencies associated with any Tenant's
Hazardous Materials Activities or otherwise specifically required by
any governing agency of Tenant and (ii) provide Landlord annually with
copy of the Hazardous Materials Business Plan that Tenant is required
to file with the Certified Unified Program Agency ("CUPA") that
exercises jurisdiction over the Property at the same time each year
that Tenant files such plan with the CUPA, as contemplated in the
California Health and Safety Code. Tenant, at its expense, shall
promptly undertake and complete any and all steps necessary, and in
full compliance with applicable Environmental Laws, to fully correct
any and all problems or deficiencies relating to Tenant's Hazardous
Materials Activities, and promptly provide Landlord with documentation
of all such corrections.
C. Prior to termination or expiration of the Lease, Tenant, at
its expense, shall (i) properly remove from the Property all Hazardous
Materials which came to be located at the Property as a result of
Tenant's Hazardous Materials Activities, and (ii) fully comply with
and complete all facility closure requirements of applicable
Environmental Laws regarding Tenant's Hazardous Materials Activities,
including but not limited to (x) properly restoring and repairing the
Property to the extent damaged by such closure activities, and (y) if
applicable, obtaining from the local Fire Department or other
appropriate governmental authority with jurisdiction a written
concurrence that closure has been completed in compliance with
applicable Environmental Laws. Tenant shall promptly provide Landlord
with copies of all claims, notices, work plans, data and reports
prepared, received or submitted in connection with any such closure
activities.
D. If Landlord, in its reasonable discretion, believes that the
Property has become contaminated as a result of Tenant's Hazardous
Materials Activities, Landlord in addition to any other rights it may
have under this Lease or under Environmental Laws or other laws, may
enter upon the Property and conduct inspection, sampling and analysis,
including but not limited to obtaining and analyzing samples of soil
and groundwater, for the purpose of determining the nature and extent
of such contamination. Tenant shall promptly reimburse Landlord for
the costs of such an investigation, including but not limited to
reasonable attorneys' fees, Landlord incurs with respect to any such
investigation that discloses Hazardous Materials contamination for
which Tenant is liable under this Lease. Except as may be required of
Tenant by applicable Environmental Laws, Tenant shall not perform any
invasive sampling, testing, or drilling to identify the presence of
any Hazardous Materials at the Property, without Landlord's prior
written consent which shall not be unreasonably withheld. Tenant
shall promptly provide Landlord with copies of any claims, notices,
work plans, data and reports prepared, received or submitted in
connection with any sampling, testing or drilling performed pursuant
to the preceding sentence.
E. Tenant shall indemnify, defend (with legal counsel
acceptable to Landlord, whose consent shall not unreasonably be
withheld) and hold harmless Landlord, its employees, assigns,
successors, members, and agents from and against any and all claims
(including, but not limited to, third party claims from a private
party or a government authority), liabilities, obligations, losses,
causes of action, demands, governmental proceedings or directives,
fines, penalties, expenses, costs (including but not limited to
reasonable attorneys', consultants' and other experts' fees and
costs), and damages, which arise from or relate to: (i) Tenant's
Hazardous Materials Activities which occur during the Lease Term; (ii)
any Hazardous Materials contamination caused by Tenant prior to the
Lease Commencement Date; or (iii) the breach of any obligation of
Tenant under this Paragraph 2 (collectively, "Tenant's Environmental
Indemnification"). Tenant's Environmental Indemnification shall
include but is not limited to the obligation to promptly and fully
reimburse Landlord for losses in or reductions to rental income, and
diminution in fair market value of the Property caused by or resulting
from any such indemnified matter. Tenant's Environmental
Indemnification shall further include but is not limited to the
obligation to diligently and properly implement to completion, at
Tenant's expense, any and all environmental investigation, removal,
remediation, monitoring, reporting, closure activities, or other
environmental response action (collectively, "Response Actions")
associated with any such indemnified matter. Tenant shall promptly
provide Landlord with copies of any claims, notices, work plans, data
and reports prepared, received or submitted in connection with any
Response Actions.
F. It is agreed that the Tenant's responsibilities related to
Hazardous Materials will survive the expiration or termination of this
Lease and that Landlord may obtain specific performance of Tenant's
responsibilities under this Paragraph 2. It is further acknowledged
by the Parties that Exhibit B attached hereto reflects certain
Hazardous Materials that Tenant and its environmental consultants,
during their earlier analysis, inspection and testing of the Property,
determined existed on or about the Property ("Existing
Contamination"). The Parties agree that notwithstanding anything to
the contrary in this Lease, Tenant's Environmental Indemnification
shall not extend to, and Tenant shall have no responsibility,
liability or indemnification obligation to Landlord under this Lease
or at law for, any Hazardous Materials present in, on, under or about
the Property as of the date of this Lease or for any Hazardous
Materials in groundwater that may hereafter migrate to or under the
Property, including any such Existing Contamination (including, but
not limited to, in the event of any release of any such Existing
Contamination or any migration of any such Existing Contamination onto
or off of the Property), except to the extent, and then only to the
extent, to which Tenant may contribute to any such Existing
Contamination or may cause any such Existing Contamination to be
released or migrate.
3. TERM.
3.1. Commencement Date. The term of this Lease shall commence as of
November 1, 1997 (the "Commencement Date") and shall continue for a
period of thirty-three (33) years and nine (9) months thereafter,
expiring on July 31, 2031 (the "Lease Term"), unless sooner terminated
as provided herein. Prior to the Commencement Date, Tenant shall pay
to Landlord an amount equal to $1,989,396.52 as a lease commitment fee
("Lease Commitment Fee") in consideration for Landlord's holding the
Premises off of the market during the period of negotiation of this
Lease. Tenant's failure to pay such amount to Landlord prior to the
Commencement Date shall create the same rights and remedies in favor
of Landlord as Tenant's failure to pay Rent under this Lease.
3.2. Proration. In the event that the Lease Term for any reason ends
on a date other than the last day of a calendar month, on the first
day of the last calendar month of the Lease Term, Tenant shall pay to
Landlord as rent for the period from the first day of said last
calendar month to and including the last day of the term hereof that
proportion of the rent then due hereunder which the number of days
between the first day of said last calendar month and the last day of
the term hereof bears to thirty (30).
3.3. Rescission Right. Tenant submitted on August 21, 1997 to the
City of Mountain View, California an application for a Planned
Community Permit (the "PCP Permit") seeking approval for Tenant to
proceed generally thereafter with seeking the issuance of building
permits for the construction of two (2) Buildings on the Premises
together with three other buildings on certain adjacent property
(constituting 13.48 acres located at Amphitheatre Parkway and
Charleston Road in Mountain View) which adjacent property is the
subject of a certain Construction Agreement between Tenant and P/A
Charleston Road LLC dated September 1, 1997 (the "Construction
Agreement"). As provided in Section 2C of the Construction Agreement,
either P/A Charleston Road LLC or Tenant shall have the right to
terminate the Construction Agreement and certain other agreements
pursuant to the provisions of the Construction Agreement upon written
notice to the other within five (5) business days after the "Outside
Date", if the City Council of the City of Mountain View, California
fails to finally approve and cause the issuance by the City of
Mountain View of the PCP Permit in satisfaction of the requirements
set forth in Section 1.K of the Construction Agreement (which Section
1.K sets forth the standards for acceptability of the PCP Permit) on
or before the Outside Date (as such Outside Date may have been
extended by Landlord). As provided in the Construction Agreement, the
Outside Date is initially agreed to be the date of October 31, 1997,
but is subject to certain rights of P/A Charleston Road LLC as set
forth in the Construction Agreement to extend the Outside Date. As
respects this Lease, Landlord and Tenant agree that if either P/A
Charleston Road LLC or Tenant validly exercise their right under
Section 2C of the Construction Agreement to terminate the Construction
Agreement, then in such event (i) this Ground Lease shall be deemed
automatically rescinded, (ii) if Tenant has theretofore paid to or
for the benefit of Landlord the Lease Commitment Fee, any Base Rent or
any Additional Rent hereunder, any and all such amounts shall be
promptly repaid by to Tenant by Landlord, (iii) Landlord and Tenant
shall acknowledge in writing the formal rescission of this Lease, and
(iv) Landlord shall thereupon be free to lease the Premises to anyone
without regard to Tenant.
4. RENT.
4.1. Base Rent. Commencing as of the Commencement Date, Tenant
shall pay monthly base rent ("Base Rent") as hereinafter set forth to
Landlord without deduction, offset, prior notice, or demand, in
advance on the first day of each calendar month of the Lease Term and
in lawful money of the United States. On November 1, 1997, the sum of
One Hundred Forty One Thousand Four Hundred Twenty Four and 98/100
Dollars ($141,424.98) shall be due, and a like sum due on the first
day of each month thereafter, through and including August 1, 2001.
The Base Rent shall be increased pursuant to Paragraph 4.2 below. Base
Rent shall be absolutely net to Landlord. Tenant shall pay directly
to the charging entity or authority all other costs, expenses, charges
or required payments of any nature whatsoever related to the Property,
and shall reimburse Landlord for any such charges incurred by Landlord
as provided in Paragraph 4.3 below.
4.2. Base Rent Increases. The Base Rent provided for in Paragraph 4.1
above shall be subject to adjustment on September 1, 2001 (the "First
Adjustment Date"), and annually thereafter on every subsequent
September 1st occurring during the Lease Term (each of which dates is
an "Adjustment Date") as follows:
A. Index. The base for computing the adjustment shall be the
Consumer Price Index for All Urban Consumers (base year 1982-84 = 100)
for the San Francisco/Oakland/ San Xxxx Metropolitan Area, published
by the United States Department of Labor, Bureau of Labor Statistics
(the "Index"). The "Beginning Index" for an Adjustment Date shall be
(i) with respect to the first Adjustment Date (i.e. September 1,
2001), the Index in effect for the month of September 1996, and (ii)
with respect to each subsequent Adjustment Date, the Index for the
month in which the immediately preceding Adjustment Date occurred
(i.e. September of each year beginning with September 2001). The
"Adjustment Index" for an Adjustment Date shall be the Index for the
month in which the Adjustment Date occurs.
B. Calculation of Increase. If the Adjustment Index as of any
Adjustment Date has increased over the Beginning Index, the monthly
Base Rent for the following twelve (12) months (until the next
Adjustment Date) shall be determined by multiplying the Base Rent in
effect on the day prior to said Adjustment Date by a fraction, the
numerator of which is the Adjustment Index and the denominator of
which is the Beginning Index. In no event, however, shall the Base
Rent be reduced from the Base Rate, as previously adjusted. For
Example; if the CPI Index for September 1996 is 147.5 and the CPI
Index for September 2001 is 152.1, the ratio of the CPI Index is 152.1
/ 147.5= 103.119%; therefore the Base Rent in effect for the year
commencing September 1, 2001 shall be $141,424.98 x 103.119% =
$145,836.05; then if the CPI Index for September 2002 is 151.9, the
change in the CPI Index is 151.9 / 152.1 = .9987%; therefore the
monthly Base Rent for the year commencing September 1, 2002 would
remain at $145,836.05.
C. Change in Index. If the Index is changed so that the base year
differs from that in effect on the Commencement Date, the Index shall
be converted in accordance with the conversion factor published by the
United States Department of Labor, Bureau of Labor Statistics. If the
Index remains in effect but is not published for the specific calendar
month which includes the Adjustment Date, then the index which is
published for the most immediately preceding calendar month to the
Adjustment Date shall instead be used. If the Index is discontinued
or revised during the term of the Lease, such other government index
or computation with which it is replaced, as determined by Landlord,
shall be used in order to obtain substantially the same result as
would have been obtained if the Index had not been discontinued or
revised. If no governmental agency publishes a replacement for the
Index, Landlord shall be entitled to use such private index or
computation as most closely approximates the Index, as determined by
Landlord.
D. Acknowledgment of Adjusted Rent. Upon adjustment of the Base
Rent as provided above, the parties shall immediately execute a
written acknowledgment of the new monthly Base Rent. In the event the
Adjustment Index will not be available until after the applicable
Adjustment Date, Tenant shall continue to pay monthly Base Rent at the
rate in effect on the day immediately preceding the applicable
Adjustment Date until such time as the Adjustment Index becomes
available and notice of the adjusted monthly Base Rent is given by
Landlord to Tenant, at which time the adjustment provided in this
Paragraph 4.2 shall be made retroactively to the Adjustment Date, and
Tenant shall promptly pay to Landlord the aggregate amount, if any, by
which the new Base Rent thus determined exceeds the Base Rent actually
paid by Tenant for the period from and after the Adjustment Date. The
monthly Base Rent shall be subject to a CPI adjustment on the
following dates: September 1, 2001; September 1, 2002; September 1,
2003; September 1, 2004; September 1, 2005; September 1, 2006;
September 1, 2007; September 1, 2008; and September 1, 2009; September
1, 2010; September 1, 2011; September 1, 2012; September 1, 2013;
September 1, 2014; September 1, 2015; September 1, 2016; September 1,
2017; September 1, 2018; September 1, 2019; September 1, 2020;
September 1, 2021; September 1, 2022; September 1, 2023; September 1,
2024; September 1, 2025; September 1, 2026; September 1, 2027;
September 1, 2028; September 1, 2029; and September 1, 2030.
4.3. Additional Rent.
A. Tenant shall pay directly to the charging authority or, to the
extent Landlord incurs any of the below-described expenses or charges,
to Landlord, in addition to Base Rent during the Lease Term,
additional rent ("Additional Rent") equal to the sum of the following:
1. All Real Property Taxes relating to the Project as set
forth in Paragraph 10;
2. All Operating Expenses relating to the Project as set forth in
Paragraph 6; and
3. All charges, costs and expenses which Tenant is required to pay
hereunder, together with all interest and penalties, costs and
expenses, including reasonable attorneys' fees and legal expenses,
that may accrue thereon in the event of Tenant's failure to pay such
amounts, and all damages, reasonable costs and expenses which Landlord
may incur by reason of default of Tenant (pursuant to Paragraph 15 of
this Lease, i.e. Tenant has received notice of a default under this
Lease and the applicable cure period has expired and Tenant has not
then cured such default) or failure on Tenant's part to comply with
the terms and conditions of this Lease.
4. Tenant shall be solely responsible and liable for the
Project's share (which is equal to 34% of the total) for the design,
implementation and maintenance (and 34% of all reasonable costs and
expenses related thereto) of the burrowing owl mitigation program as
related to this Project and to the adjacent 13.48 acres located at
Amphitheatre Parkway and Charleston Road in Mountain View. It is
agreed that if the Lease is terminated as set forth in Paragraph 3.3
above, that all such costs for the design, implementation and
maintenance of the burrowing owl mitigation program incurred prior to
the Lease commencement or accrued through the date of such termination
shall be borne by Tenant.
5. It is the intention of the parties hereto that this
Lease shall be deemed and construed to be a "net lease" and that Tenant
shall pay to Landlord, absolutely net, throughout the Term of this
Lease, the Base Rent and other payments due hereunder free of any
charges, assessments, impositions, or expenses or deductions of any
kind and without abatement, deduction or offset, and under no
circumstances or conditions, whether now existing or hereafter
arising, or whether within or beyond the present contemplation of the
parties, shall Landlord bear any such costs.
B. In the event of nonpayment by Tenant of Additional Rent,
Landlord shall have all the rights and remedies with respect thereto as
Landlord has for nonpayment of Base Rent. Notwithstanding anything to
the contrary in the definition of Additional Rent as set forth in
Paragraph 4.3A or Paragraph 10, Additional Rent shall not include any
of the following:
1. Any ground or underlying lease rental;
2. Bad debt expenses and interest, principal, points
and fees on debts, bad debt expenses or amortization on any mortgage
or other debt instrument encumbering all or any portion of the Project;
3. Depreciation on the Project, amortization and interest
(on loans Landlord may have against the Project);
4. Except as otherwise provided in this Lease,
marketing costs, including leasing commissions, attorneys' fees, space
planning costs,and other costs and expenses incurred in connection with
lease negotiations; and
5. Costs incurred due to the violation by Landlord of
the terms and conditions of this Lease.
The Additional Rent due hereunder shall be paid to Landlord or
Landlord's agent (i) within ten (10) days for Real Property Taxes (to
the extent such Real Property Taxes shall be payable to the applicable
taxing authority within thirty (30) days after the date of
presentation of such invoice) and within thirty (30) days for all
other Additional Rent items (if any), after presentation of invoice
from Landlord or Landlord's agent setting forth such Additional Rent
and/or (ii) at the option of Landlord (except with respect to Real
Property Taxes), Tenant shall pay to Landlord monthly, in advance,
Tenant's pro rata share of an amount estimated by Landlord to be
Landlord's approximate average monthly expenditure for such Additional
Rent items, which estimated amount shall be reconciled within one
hundred twenty (120) days after the end of each calendar year, or more
frequently if Landlord elects to do so at Landlord's sole and absolute
discretion, as compared to Landlord's actual expenditure for said
Additional Rent items, with Tenant paying to Landlord, upon demand,
any amount of actual expenses expended by Landlord in excess of said
estimated amount, or Landlord refunding to Tenant (provided Tenant is
not in default in the performance of any of the terms, covenants and
conditions of this Lease pursuant to Paragraph 15 of this Lease, i.e.
Tenant has received notice of a default under this Lease and the
applicable cure period has expired and Tenant has not then cured such
default) any amount of estimated payments made by Tenant in excess of
Landlord's actual expenditures for said Additional Rent items.
4.4. Late Charge and Interest. Notwithstanding any other provision
of this Lease, if any installment of Base Rent and/or Additional Rent
(collectively "Rent") is not received by Landlord from Tenant within
nine (9) calendar days after the same becomes due, Tenant shall
immediately pay to Landlord a late charge in an amount equal to ten
percent (10%) of the amounts due and not so paid. In no event shall
this provision for a late charge be deemed to grant Tenant a grace
period or extension of time within which to pay any Rent installment
as set forth in this Paragraph 4 or to prevent Landlord from
exercising any right or remedy available to Landlord upon Tenant's
failure to pay each Rent installment due under this Lease when due.
If any Rent remains delinquent for a period in excess of nine (9)
calendar days, then, in addition to such late charge, Tenant shall pay
to Landlord interest on any Rent that is not so paid from said ninth
day at the rate of Bank of America's Prime Rate (or equivalent rate)
plus five percent (5%) per annum on the unpaid amount, but in no event
greater then the maximum rate of interest permitted by applicable law,
until paid in full.
4.5. Triple Net Lease. It is intended by the parties (i) that the
Rent provided for in this Paragraph 4 shall be absolutely net to
Landlord throughout the Term of this Lease, free of any expenses,
charge or deduction whatsoever, and that payment of all charges or
expenses, including without limitation, property taxes and
assessments, parking surcharges, rent taxes, environmental
investigations, responses, abatement, amelioration and remediation,
insurance, repair and maintenance, utilities, repairs, constructions,
reconstruction, shall be the responsibility of Tenant and at Tenant's
sole cost and expense and (ii) that the Rent is due as stated in this
Lease regardless of the status of any Buildings or other improvements
that may be constructed by Tenant on the Premises (collectively
"Improvements").
4.6. Place of Payment. All Base Rent hereunder and all payments
hereunder for Additional Rent shall be paid to Landlord at: File 1504,
Xxx 00000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, or to such other person or
to such other place as Landlord may from time to time designate in
writing.
4.7. Audit Rights. Within sixty (60) days after receipt of
Landlord'swritten reconciliation together with supporting documentation,
Tenant shall have the right, at Tenant's sole expense, to commence a review
and/or audit, at a mutually convenient time at Landlord's office, of
Landlord's records relating to the foregoing expenses. Any audit must
be conducted by Tenant or an independent nationally recognized
accounting firm that is not being compensated by Tenant or other third
party on a contingency fee basis. If an audit (not a review) reveals
that Landlord has overcharged Tenant, the amount overcharged shall be
credited to Tenant's account within thirty (30) days after the audit
is concluded.
4.8. Survival. The respective obligations of Landlord and Tenant
under this Paragraph 4 shall survive the expiration or other
termination of the Lease Term.
5. MAINTENANCE AND REPAIRS.
5.1. Tenant's Obligations. Following Tenant's construction of any
Improvements, Tenant shall, at Tenant's sole cost, keep such
Improvements in good and safe condition, order and repair. Tenant
hereby waives the benefit of any statute now or hereinafter in effect
which would otherwise afford Tenant the right to make repairs at
Landlord's expense or to terminate this Lease because of Landlord's
failure to keep the Project in good condition, order and repair.
Tenant specifically waives all rights it may have under Sections
1932(1), 1941, and 1942 of the California Civil Code, and any similar
or successor statute or law.
5.2. No Obligations or Liability for Landlord. Landlord shall not be
obligated to make any repairs or replacements of any kind, nature or
description whatsoever to the Project or any portion thereof.
Landlord shall not be liable for any loss, damage or injury of any
kind, nature or character to any person or property arising from any
use of the Project, or caused by any defect in any Building or other
improvements to be constructed thereon or in any equipment or other
facility therein, or caused by or arising from any act or omission of
Tenant or any of its agents, employees, licensees, or invitees or by
or from any accident on the Project or any fire or other casualty
thereon, or occasioned by the failure of Tenant to maintain the
Project or any Improvements constructed thereon in a safe condition;
and Tenant, as a material part of the consideration of this Lease,
waives on its behalf all claims and demands against Landlord for any
such loss, damage, or injury of Tenant or other third parties.
6. OPERATING EXPENSES. In addition to the Rent to be paid by Tenant
under Xxxxxxxxx 0, Xxxxxx shall at its sole expense, pay for any and
all costs of every kind and nature related to the construction,
maintenance, operation or repair of the Project and/or to Tenant's use
thereof during the term of this Lease.
7. ACCEPTANCE AND SURRENDER OF PREMISES.
7.1. Tenant acknowledges that Tenant is accepting the Premises "as-is"
and has inspected the Premises hereunder and observed its physical
characteristics and conditions and hereby waives any and all
objections to the Premises. Tenant acknowledges that neither Landlord
nor any of Landlord's employees, agents, or representatives has made
any representations, warranties, or agreements concerning the present
use thereof, or the suitability of Tenant's intended use of the
Premises.
7.2. Tenant further acknowledges and agrees that no patent or latent
physical condition of the Premises, whether known or unknown, or
discovered, shall affect the rights or obligations of either party
hereto. All costs, fees, studies, reports, approvals, plans, surveys,
permits, and expenses whatsoever necessary or desirable in connection
with Tenant leasing, using and/or operating the Project shall be
obtained and paid for by and shall be the sole responsibility of
Tenant. Tenant has investigated and has knowledge of operative or
proposed governmental laws and regulations (including, but not limited
to, zoning, environmental (including the Environmental Protection
Agency and the Bay Area Pollution Control District), and land use laws
and regulations and obligations) to which the Project may be subject,
and is leasing the Premises upon the basis of its review and
determination of the applicability and effect of such laws and
regulations. Tenant has neither received nor relied upon any
representations concerning such laws and regulations made by Landlord,
Landlord's employees, agents, or any other person acting on or in
behalf of Landlord.
7.3. Tenant has obtained a Preliminary Title Report (the "Title
Report") on the Premises showing the present state of title, a copy of
which is attached hereto as Exhibit C. Tenant agrees to accept its
leasehold of the Premises in its present state based on its own
investigation and examination and the Title Report and other studies
and investigations Tenant has conducted. Except as expressly provided
in this Lease or in the Purchase Agreement attached hereto as Exhibit
D, Landlord makes no warranty and shall not be liable to Tenant with
respect to this Lease (or title to the Project if Tenant exercises its
Option to Purchase the Premises as set forth in Paragraph 33) or with
respect to the Preliminary Title Report or conditions of title to the
Premises or any unrecorded easements or easements by use or other
conditions or defect of title, if any. Tenant shall be obligated to
make its own investigation as to the state of title to the Premises
and to obtain prior to execution of this Lease any title insurance
that Tenant may desire. Notwithstanding the foregoing, Landlord
agrees that other than any financing which may be permitted by the
terms of this Lease, it shall take no action after the date of this
Lease which would create any lien or other encumbrance upon the
Premises without the prior written consent of Tenant, which consent
Tenant may withhold in its reasonable discretion.
7.4. Tenant agrees on the last day of the Lease Term, or on the sooner
termination of this Lease, to surrender the Project and every portion
thereof promptly to Landlord in good condition and repair (damages by
acts of God, fire, normal wear and tear excepted). Any Improvements
which may have been made in, to, or on the Project and which exist as
of such date shall be surrendered in good condition and repair,
provided that Tenant shall have the right to remove any trade fixtures
and any permanently attached lab fixtures and equipment in any
Building or on the roof of any Building, including any electrical,
plumbing, ventilation or air conditioning equipment associated with
supporting the specific requirements of any other lab equipment
(collectively "Trade Fixtures"). On or before the end of the Lease
Term or sooner termination of this Lease, Tenant shall remove all of
Tenant's personal property and Trade Fixtures from the Project, and
all property not so removed shall be deemed abandoned by Tenant and
title to same shall thereupon pass to Landlord without compensation to
Tenant. Upon termination of this Lease, Landlord may remove all
moveable furniture and equipment so abandoned by Tenant, at Tenant's
sole cost, and repair any damage caused by such removal.
Notwithstanding anything to the contrary herein or in this Lease,
Landlord may, at its sole and absolute discretion, require Tenant (at
Tenant's sole cost and expense) to remove any and/or all of the
Improvements and Alterations to the Project upon Lease Termination.
8. IMPROVEMENTS AND ALTERATIONS.
8.1. Initial Improvements. It is currently contemplated that Tenant
will construct prior to September 1, 2003, at Tenant's sole cost and
expense, one or more Buildings, and all on and off site work,
including landscaping (collectively referred to as "Initial
Improvements"). The Initial Improvements, if constructed, shall in
all events comply with the requirements of the PCP Permit ultimately
issued by the City of Mountain View ("PCP"). Landlord hereby
approves, subject to the terms and conditions of this Lease, Tenant's
construction of the Initial Improvements so long as the exterior
components thereof are generally in conformity with the PCP as such
PCP is ultimately issued by the City of Mountain View. If Tenant
desires to make any material changes to the exterior design of the
Initial Improvements, then prior to submitting any application for
amendment of the PCP to the City of Mountain View, Tenant shall
deliver such proposed amendment to Landlord for Landlord's review and
approval, which approval will not be unreasonably withheld or delayed.
Any such disapproval must be in writing stating with particularity the
reasons for such disapproval and the actions Tenant may take to modify
such proposal in a manner that Landlord would approve. Landlord's
failure to deliver such written disapproval within five (5) business
days after Tenant has delivered such request for approval to Landlord
shall be deemed Landlord's approval of such proposed amendment to the
PCP. Landlord shall cooperate with Tenant as reasonably requested by
Tenant with respect to any required governmental approvals, including,
without limitation, any application for amendment of the PCP, in
connection with the Initial Improvements, including the signing of any
reasonable applications or requests which are required to be signed by
the owner of the Project in order to obtain required approvals,
provided that Landlord shall not be required to incur any costs or
expenses or liability in connection therewith. Without limiting
Landlord's discretion concerning its approval rights as to any
amendments to the PCP that Tenant may reasonably request, the parties
agree that (i) Tenant shall not, without Landlord's prior written
consent, design or seek governmental approvals to construct more than
120,000 square feet of floor area (calculated as square footage is
calculated by the City of Mountain View pursuant to the City of
Mountain View Shoreline West Precise Plan) within the Initial
Improvements, and (ii) the general design of the Initial Improvements
shall be reasonably compatible, as reasonably determined by Landlord,
with the design of the buildings to be constructed on the 13.48 acre
parcel of property located on the opposite side of Amphitheater
Parkway from the Project. Promptly following completion of the
Initial Improvements, Tenant shall deliver to Landlord as built
drawings thereof on original sepia drawn to 1/8" scale, prepared at
Tenant's sole cost. Notwithstanding the foregoing, if Tenant fails to
substantially complete construction of the Initial Improvements on or
before September 1, 2003, then Landlord may, by written notice to
Tenant delivered at any time after such date and prior to substantial
completion of the Initial Improvements, elect to terminate this Lease,
which termination shall be effective ninety (90) days following the
date of delivery of such written notice to Tenant. Notwithstanding
the foregoing, (i) if Tenant substantially completes the construction
of the Initial Improvements prior to the expiration of such ninety-day
period, then such termination notice shall be deemed rescinded, and
(ii) if Tenant delivers to Landlord an Exercise Notice of the Purchase
Option to purchase the Premises as contemplated in Paragraph 34 of
this Lease, prior to the expiration of such 90-day period, then such
termination notice shall be deemed suspended until the date upon which
the closing pursuant to the Purchase Option is scheduled to occur
under the terms of this Lease. If Tenant thereafter fails to perform
its obligations under the Purchase Option after Tenant's delivery of
the Exercise Notice for any reason other than Landlord's failure to
perform its obligations with respect to the Purchase Option, then the
termination notice earlier delivered to Tenant by Landlord shall be
deemed reinstated, effective as of the business day following the
scheduled date for such closing which did not occur.
8.2. Assignment of Plans. Tenant hereby assigns to Landlord,
effective as of (i) the date of rescission of this Lease pursuant to
Paragraph 3.3 above or (ii) the date that Tenant comes to be in
default (pursuant to Paragraph 15 of this Lease, i.e. Tenant has
received notice of a default under this Lease and the applicable cure
period has expired and Tenant has not then cured such default), all of
its interest in and to the plans and specifications prepared for the
Initial Improvements, all studies, data and drawings with respect
thereto prepared by or for Tenant, and the contracts and agreements
relating to such plans and specifications or studies, data and
drawings, or to the construction or the Initial Improvements,
including but not limited to the general contract therefor, in each
case, to the extent assignable and without any representation or
warranty (but fully paid for by Tenant through the date of such
assignment), but Landlord shall not have any obligation under those
contracts or agreements unless it expressly agrees to assume such
obligations in writing. Landlord shall have the right to exercise any
rights of Tenant under those contracts and agreements or with respect
to such plans, specifications, studies, data and drawings at any time
following the occurrence of such assignment. If this Lease terminates
without the Purchase Option or Sales Option being exercised in
accordance with Paragraph 34 of this Lease, then Tenant shall at such
time assign its interest in the foregoing plans and other documents to
Landlord. Any assignment of any plans or other documents under this
Paragraph shall be made by Tenant to Landlord at no charge to
Landlord.
8.3. Subsequent Alterations and Additions. Following the completion
of the Initial Improvements, Tenant may make alterations to any
Building ("Alterations") without the prior written consent of
Landlord, provided Tenant (i) gives Landlord a minimum of five (5)
business days written notice of its intent to make any material
modifications to any Building; and (ii) as to any material Alteration,
provides to Landlord, upon completion of said construction, a 1/8
inch scale sepia "as built" plan reflecting said alterations and/or
additions. Notwithstanding the foregoing, Tenant shall not make any
Alteration to the exterior of any Building that would be inconsistent
with the design approved by the PCP, as amended with Landlord's
consent as provided above, unless Landlord first consents to such
Alteration, which consent shall not be unreasonably withheld.
8.4. Plans and Permits. Any Alteration to the Project which requires
the consent of Landlord shall be presented to Landlord in written form
for Landlord's approval, with proposed detailed plans and
specifications therefor, including an original sepia at 1/8" scale,
prepared at Tenant's sole cost. Any consent by Landlord thereto shall
be deemed conditioned upon Tenant's acquisition of all permits
required to make such Alterations from all appropriate governmental
agencies, the furnishing of copies thereof to Landlord prior to
commencement of the work, and the compliance by Tenant with all
conditions of said permits, all at Tenant's sole cost. Upon
completion of any such Alterations, Tenant shall, at Tenant's sole
cost, immediately deliver to Landlord "as-built" plans and
specifications therefor, including an original sepia at 1/8" scale,
prepared at Tenant's sole cost. Landlord shall cooperate with Tenant
as reasonably requested by Tenant with respect to any required
governmental approvals, including, without limitation, any application
for amendment of the PCP, in connection with the Alterations,
including the signing of any reasonable applications or requests which
are required to be signed by the owner of the Project in order to
obtain required approvals, provided that Landlord shall not be
required to incur any costs or expenses or liability in connection
therewith.
8.5. Construction Work Done by Tenant. All construction work required
or permitted to be done by Tenant, including the Initial Improvements,
shall be performed by a licensed contractor, at Tenant's sole cost and
expense, and in a good and workmanlike manner. All exterior
construction work subsequent to the completion of the Initial
Improvements shall conform in quality and design with that of the
Initial Improvements. All construction work shall be performed in
compliance with all applicable Governmental Regulations. Tenant shall
pay, when due, all claims for labor or materials furnished or alleged
to have been furnished to or for Tenant at or for use in the Project,
which claims are or may be secured by any mechanic's liens.
8.6. Title to Initial Improvements and/or Alterations. Any Initial
Improvements and/or Alterations which may be made on the Project and
not earlier removed by Tenant as a result of any earlier Alterations
to the Project shall become the property of Landlord upon the
expiration or earlier termination of this Lease. Without limiting the
generality of the foregoing, all heating, lighting, electrical
(including all wiring, conduits, main and subpanels), air
conditioning, partitioning (except movable partitions), drapery, and
carpet installations made by Tenant, regardless of how affixed to the
Project, unless included within the definition herein of Trade
Fixtures (as defined in Paragraph 7.4 above), shall be and become the
property of Landlord upon the expiration or earlier termination of
this Lease, and shall remain upon and be surrendered with the Project
at the expiration or sooner termination of this Lease. Tenant's
furnishings, machinery, equipment and Trade Fixtures, shall remain the
property of Tenant and may be removed by Tenant, and Tenant shall, at
Tenant's sole cost, immediately after removal repair any damage to the
Project caused thereby. Tenant shall be solely responsible for the
maintenance and repair of any and all Alterations made by Tenant to
the Project.
8.7. Notice. Tenant shall give Landlord notice of the date of
commencement of any work in the Project not less than five (5)
business days prior thereto, and Landlord shall have the right to post
notices of non-responsibility or similar notices in or on the Project
in connection therewith.
9. UTILITIES AND SERVICES. Tenant shall pay when due all metering
and, if applicable, connection charges and all costs of utility
services used upon or furnished to the Project. Tenant shall pay when
due all charges for water, gas, electricity, telephone, refuse pickup,
janitorial services, and all other utilities and services supplied or
furnished to the Project during the term of this Lease, together with
any taxes thereon, directly to the charging entity, and, if, due to
Tenant's failure to pay any such amounts prior to delinquency,
Landlord should elect to pay any such charges on Tenant's behalf,
Tenant shall reimburse Landlord for such amounts as Additional Rent
within ten (10) days after written request therefor. In no event
shall Landlord be liable to Tenant for any failure or interruption in
utility or service. No failure or interruption of any such utilities
or services shall entitle Tenant to terminate this Lease or to
withhold Rent or other sums due hereunder. Landlord shall not be
responsible for providing security guards or services or any other
services for any portion of the Project, and Tenant shall at its own
expense provide all such services.
10. TAXES.
10.1. Real Property Taxes. Tenant shall pay directly to the
applicable tax collector ("Tax Collector") and prior to delinquency
all Real Property Taxes (as hereinafter defined) which become due
during the Lease Term, as Additional Rent. The term "Real Property
Taxes" as used herein shall mean (1) all taxes, assessments, levies,
and other charges of any kind or nature whatsoever, general and
special, foreseen and unforeseen (including all installments of
principal and interest required to pay any general or special
assessments for public improvements and any increases resulting from
reassessments caused by any change in ownership of the Premises or the
Project) now or hereafter imposed by any governmental or quasi-
governmental authority or special district having the direct or
indirect power to tax or levy assessments, which are levied or
assessed against, or with respect to (a) the value, occupancy, or use
of, all or any portion of the Premises or the Project (as now
constructed or as may at any time hereafter be constructed, altered,
or otherwise changed) or Landlord's interest therein, including
Landlord's interest in this Lease; or (b) any improvements located on
the Premises or the Project (regardless of ownership); and (2) all
area wide taxes, charges, levies or fees imposed by reason of
environmental regulation or other governmental control of the Project.
If at any time during the Lease Term the taxation or assessment of the
Project prevailing as of the Commencement Date shall be altered so
that in lieu of or in addition to any Real Property Taxes described
above there shall be levied, assessed or imposed (whether by reason of
a change in the method of taxation or assessment, creation of a new
tax or charge, or any other cause) an alternate or additional tax or
charge (a) on the value, use or occupancy of the Project or Landlord's
interest therein; (b) on or measured by the gross receipts, income or
rentals from the Project; (c) on Landlord's business of leasing the
Premises; or (d) computed in any manner with respect to the operation
of the Premises or the Project, then any such tax or charge, however
designated, shall be included within the meaning of the term "Real
Property Taxes". Notwithstanding the foregoing, the term "Real
Property Taxes" shall not include estate, inheritance, gift or
franchise taxes of Landlord or the federal or state net income tax
imposed on Landlord's income from all sources. Notwithstanding
anything within this Paragraph 10.1, it is agreed that if any special
assessments for capital improvements are assessed, and if Landlord has
the option to either pay the entire assessment in cash or go to bond,
Landlord shall elect to go to bond so that Tenant will pay such
special assessment in installments rather than in a lump sum. It is
additionally agreed that Tenant shall have the right, at Tenant's sole
cost and expense, to contest with any taxing authority or appellate
body the imposition or amount of any Real Property Tax, but any such
contest shall not excuse Tenant from any of its obligations hereunder
as to paying any such Real Property Tax when payable hereunder. In
addition, Landlord agrees to consult with Tenant in advance of any
contemplated change in ownership of the Project so as to have the
benefit of Tenant's recommendations, if any, as to any possible way to
avoid any reassessment of the Project, but regardless of any such
consultation, Landlord shall have no obligation to Tenant to follow,
or any liability to Tenant for failing to follow, any recommendations
of Tenant.
10.2. Taxes on Tenant's Property. Tenant shall pay at least ten
(10) days prior to delinquency all taxes, license fees and public
charges assessed or levied against all equipment, personal property or
trade fixtures placed by Tenant in or about the Project. If any such
taxes, fees or charges are levied against Landlord or the Project or
if the assessed value of the Project is increased by the inclusion
therein of the value placed upon such equipment, personal property or
trade fixtures of Tenant and if Landlord pays the taxes, fees or
charges based on such increased assessment due to Tenant's failure to
pay the same prior to delinquency, which Landlord shall have the right
to do regardless of the validity thereof, Tenant shall upon demand,
repay to Landlord the taxes, fees or charges so levied against
Landlord, or the proportion thereof such taxes resulting from such
increase in the assessment.
11. INSURANCE.
11.1. Builder's Risk Insurance. Tenant shall obtain and keep in
force, at its sole cost, upon the commencement and during the period
of construction of the Initial Improvements, until completion of
construction of the Initial Improvements, a policy of builder's
completed value risk insurance against all risks of physical loss in
the amount of the guaranteed replacement cost of the Initial
Improvements and insurance against loss or damage to personal property
located on the Project by fire and other hazards covered by such
insurance, for the aggregate cost of the work performed and equipment
and supplies and materials furnished.
11.2. Tenant's Liability Insurance. Tenant shall, at Tenant's
sole cost, keep in force during the Lease Term a policy of commercial
general liability insurance on an occurrence policy form covering
property damage and liability for personal injury occurring in, on or
about the Project, with limits in the amount of at least Five Million
Dollars ($5,000,000) per occurrence combined single limit for injuries
to or death of persons and for property damage, and with a contractual
liability endorsement insuring Tenant's performance of Tenant's
obligation to indemnify Landlord contained in Paragraph 12. Landlord
shall have the right from time to time to require Tenant to increase
coverage limits under the foregoing policy to commercially reasonable
levels. Tenant shall, at Tenant's sole cost, pay all insurance
deductibles. Tenant may provide such insurance coverage under blanket
policies of insurance.
11.3. Property Insurance. Tenant shall, at Tenant's sole cost,
obtain and keep in force during the term of this Lease a policy or
policies of insurance for the benefit of Landlord and Tenant covering
loss or damage to the buildings, the common areas, and all other
portions of the Project, in the amount of the full replacement value
thereof, providing protection against all perils included within the
classification of fire, extended coverage, vandalism, malicious
mischief, special extended perils (all risk), including boiler and
machinery coverage (if applicable) and an inflation endorsement, but
excluding earthquake coverage. The insurance coverage shall include
sprinkler leakage insurance as to all portions of the Project
containing fire sprinklers. Throughout the Term of this Lease Tenant
shall be responsible, at Tenant's sole cost, for paying any and all
insurance deductibles and premiums. Tenant may provide such insurance
under blanket policies of insurance provided that such insurance is on
an occurrence basis.
11.4. Form and Certificates. Each policy of insurance required to
be carried by Tenant pursuant to Paragraph 11.1, 11.2 and 11.3 shall
be with a company rated A:IX or better in "Best's Insurance Guide" and
shall name Landlord and such other parties in interest as Landlord
reasonably designates as additional insured. Tenant's insurance
policy shall also be primary insurance, without right of contribution
from any policy carried by Landlord, and shall contain a cross-
liability and severability endorsement. A certificate of insurance
(ACCORD form) and a copy of each policy shall be provided to Landlord
which indicates that the coverage required hereunder is in effect and
which provides that such policy is not subject to cancellation,
expiration or change, except upon thirty (30) days' prior written
notice to Landlord.
11.5. Payment. Tenant shall pay all of the premiums and
deductibles for any insurance obtained pursuant to this Paragraph 11.
11.6. Waiver of Subrogation. Tenant and Landlord each hereby
waives any and all rights of recovery against the other, and against
the officers, employees, agents and representatives of the other, for
loss of or damage to the property of the waiving party or the property
of others under its control, to the extent such loss or damage is
covered by proceeds received under any insurance policy carried by
Landlord or Tenant and in force at the time of such loss or damage.
Each of Tenant and Landlord shall, upon obtaining the policies of
insurance required hereunder or otherwise carried by such party, give
notice to the insurance carrier or carriers that the foregoing mutual
waiver of subrogation is contained in this Lease.
11.7. No Limitation of Liability. Landlord makes no
representation that the limits of liability specified to be carried by
Tenant or Landlord under the terms of this Lease are adequate to
protect any party. If Tenant believes that the insurance coverage
required under this Lease is insufficient to adequately protect
Tenant, Tenant shall provide, at its own expense, such additional
insurance as Tenant deems adequate.
11.8. Restoration and Disposition of Casualty Insurance
Proceeds. Subject to the provisions of Paragraph 20.2, in the event
any Building and/or any of the Improvements and/or attached
furnishings and equipment located on the Project leased hereunder are
damaged or destroyed by fire or other casualty during the Lease Term,
Tenant shall, at Tenant's sole cost, repair or restore the same to the
external condition approved by the PCP, as the same may be amended
with Landlord's consent as provided in Paragraph 8.1 of this Lease.
The internal condition of the Project may be repaired and restored to
any appropriate condition and configuration in Tenant's reasonable
discretion. Such work of repair or restoration shall be commenced
within one (1) year after the damage or loss occurs and be completed
with due diligence, and shall be otherwise done in accordance with the
requirements of Paragraph 8. The available insurance proceeds
collected for such damage, shall be segregated by Tenant in an
appropriate account for Tenant's benefit to be applied to the cost of
such repairs or restoration, but if such insurance proceeds shall be
insufficient to complete the repairs or restoration, Tenant shall pay
the deficiency out of its own funds. If there are any excess
insurance proceeds following the full payment of the cost of such
repairs or restoration, such excess shall be retained by Tenant.
Until the repair or restoration is completed, Tenant shall keep
Landlord apprised of the amount deposited in and any withdrawals from
such account so as to provide Landlord with reasonable comfort that
the insurance proceeds will be available to be applied by Tenant to
the repair and restoration as required. If any such damage or
destruction occurs at any time on or after September, 1, 2003 and if
Tenant's net worth at the time of such damage or destruction (applying
generally accepted accounting principles, consistently applied) is
less than Five Hundred Million Dollars ($500,000,000) as reflected on
the most recent quarterly or annual audited financial statements of
Tenant preceding the date of such damage or destruction, then in such
event the account to be so established shall provide that any
withdrawals from such account shall require the joint signatures of
Tenant and Landlord (which signature Landlord agrees not to
unreasonably withhold in conjunction with any disbursements requested
by Tenant (i) to pay any reasonably documented costs of repairing and
restoring such damage or destruction and (ii) after the completion of
such repair or restoration, to pay the remaining funds in such account
to Tenant). Should Tenant fail or refuse to make the repairs or
restoration as hereinabove provided, then in such event such failure
or refusal shall constitute a default (under the provisions of
Paragraph 15 of this Lease, i.e. Tenant has received notice of a
default under this Lease and the applicable cure period has expired
and Tenant has not then cured such default) under the covenants and
conditions hereof.
12. WAIVER AND INDEMNIFICATION. Landlord shall not be liable to
Tenant and Tenant hereby waives all claims against Landlord for any
injury to or death of any person or damage to or destruction of
property in or about the Project by or from any cause whatsoever,
including, without limitation, gas, fire, oil electricity or leakage
of any character from the roof, walls, basement or other portion of
the Project except to the extent that the same results primarily from
the willful misconduct or active negligence of Landlord, its agents,
servants, employees, invitees or contractors of which negligence
Landlord has knowledge and reasonable time to correct. Except as to
injury to persons or damage to property to the extent arising from the
willful misconduct or the active negligence of Landlord, its agents,
servants, employees, invitees, or contractors, Tenant shall hold
Landlord harmless from and defend Landlord against any and all
expenses, including reasonable attorneys' fees, in connection
therewith, arising out of any injury to or death of any person or
damage to or destruction of property occurring in, on or about the
Project, or any part thereof, from any cause whatsoever, occurring
during the Lease Term.
13. LIENS. Tenant shall keep the Project free from any liens arising
out of any work performed, materials furnished or obligations incurred
by Tenant. In the event that Tenant shall not, within ten (10) days
following notice of the imposition of any such lien, cause the same to
be released of record, Landlord shall have, in addition to all other
remedies provided herein and by law, the right, but not the
obligation, to cause the same to be released by such means as it shall
deem proper, including payment of the claim giving rise to such lien.
All sums paid by Landlord for such purpose, and all expenses incurred
by it in connection therewith, shall be payable to Landlord by Tenant
on demand with interest at the Bank of America Prime Rate (or
equivalent thereof) of interest plus five percent (5%) per annum, but
in no event greater then the maximum rate of interest permitted by
applicable law. Notwithstanding anything to the contrary in this
Paragraph 13, Tenant shall have the right to provide Landlord with a
bond in the amount of the Lien in a form satisfactory to Landlord and
to contest the Lien, in which event Landlord shall not be entitled to
pay or discharge the Lien, provided the Lien is removed within ninety
(90) days from the date the Lien is filed.
14. ASSIGNMENT AND SUBLETTING.
14.1. Permitted Transfers. Tenant may sublease all or any
portion of the Project or assign this Lease from time to time during
the Term without Landlord's consent, provided that Tenant shall deliver
prior written notice to Landlord, together with a copy of the sublease or
assignment agreement. Notwithstanding any sublease or assignment,
Tenant shall remain liable to Landlord for Tenant's performance of all
of its obligations under the Lease.
14.2. Form of Sublease and Assignment. Tenant shall provide
Landlord with a fully executed copy of any sublease or assignment
promptly upon execution thereof. Each assignment shall provide that
the assignee assumes and agrees to comply with each and every
obligation of Tenant under this Lease from the effective date of the
assignment through the termination date of the Lease, and that the
assignee shall pay all Rent thereafter falling due under this Lease
directly to Landlord. Each sublease shall provide that the subtenant
in its use and occupancy of any portion of the Complex shall observe
and not violate any provisions or restrictions of this Lease to the
extent applicable to the subleased premises from the commencement date
of the sublease through the termination date of the sublease, and that
upon written demand by Landlord in the event of an uncured default by
Tenant hereunder in the payment of Rent, Landlord may require the
subtenant to pay all rent otherwise payable to Tenant under the
sublease to be paid directly to Landlord to be applied against the
obligations of Tenant to Landlord under this Lease.
15. DEFAULT BY TENANT.
15.1. Default. The commencement of a bankruptcy action or
liquidation action or reorganization in bankruptcy action or
insolvency action or an assignment of or by Tenant for the benefit of
creditors, or any similar action undertaken by Tenant, or the
insolvency of Tenant, shall, at Landlord's option, constitute a breach
of this Lease by Tenant. If the trustee or receiver appointed to
serve during a bankruptcy, liquidation, reorganization, insolvency or
similar action elects to reject Tenant's unexpired Lease, the trustee
or receiver shall notify Landlord in writing of its election within
thirty (30) days after any order for relief in any liquidation action
or within thirty (30) days after the commencement of any action.
Within thirty (30) days after the court approval of the
assumption of this Lease, the trustee or receiver shall cure (or
provide adequate assurance to the reasonable satisfaction of Landlord
that the trustee or receiver shall cure) any and all previous defaults
under the unexpired Lease and shall compensate Landlord for all actual
pecuniary loss and shall provide adequate assurance of future
performance under said Lease to the reasonable satisfaction of
Landlord. Adequate assurance of future performance, as used herein,
includes, but shall not be limited to: (i) assurance of source and
payment of Rent, and other consideration due under this Lease; and
(ii) assurance that the assumption or assignment of this Lease will
not breach any provision in any agreement relating to the above
described Premises.
Nothing contained in this Paragraph shall affect the
exercising of any right of Landlord to refuse to accept an assignment
upon commencement or in connection with a bankruptcy, liquidation,
reorganization or insolvency action or an assignment of Tenant for the
benefit of creditors or other similar act. Nothing contained in this
Lease shall be construed as giving or granting or creating an equity
in the Premises to Tenant. In no event shall the leasehold estate
under this Lease, or any interest therein, be assigned by voluntary or
involuntary bankruptcy proceeding without the prior written consent of
Landlord. In no event shall this Lease or any rights or privileges
hereunder be an asset of Tenant under any bankruptcy, insolvency or
reorganization proceedings.
The failure of Tenant to perform or honor any covenant,
condition or representation made under this Lease shall constitute a
default hereunder by Tenant upon expiration of the appropriate grace
period hereinafter provided. Tenant shall have a period of ten (10)
days following the date of written notice from Landlord within which
to cure any default in the payment of Rent when otherwise due
hereunder. Tenant shall have a period of thirty (30) days following
the date of written notice from Landlord within which to cure any
other default by Tenant under this Lease; provided, however, that if
the nature of Tenant's failure is such that more than thirty (30) days
is reasonably required to cure the same, Tenant shall not be in
default so long as Tenant commences performance within such thirty
(30) day period and thereafter prosecutes the same to completion.
Upon an uncured default of this Lease by Tenant, Landlord shall have
the following rights and remedies in addition to any other rights or
remedies available to Landlord at law or in equity:
(a) The rights and remedies provided for by California Civil
Code Section 1951.2 including but not limited to, recovery of the worth at
the time of award of the amount by which the unpaid Rent for the
balance of the Lease Term after the time of award exceeds the amount
of rental loss for the same period that Tenant proves could be
reasonably avoided, as computed pursuant to subsection (b) of said
Section 1951.2.
(b) The rights and remedies provided by California Civil Code
Section 1951.4 which allows Landlord to continue the Lease in effect and to
enforce all of its rights and remedies under this Lease, including the
right to recover Rent as it becomes due, for so long as Landlord does
not terminate Tenant's right to possession; acts of maintenance or
preservation, efforts to relet the Premises, or the appointment of a
receiver upon Landlord's initiative to protect its interest under this
Lease shall not constitute a termination of Tenant's right to
possession.
(c) The right to terminate this Lease by giving notice to Tenant
in accordance with applicable law.
(d) To the extent provided by law, the right and power to enter
the Premises and remove therefrom all persons and property, to store such
property in a public warehouse or elsewhere at the cost of and for the
account of Tenant, and to sell such property and apply such proceeds
therefrom pursuant to applicable California law. Landlord may from
time to time sublet the Premises or any part thereof for such term or
terms (which may extend beyond the Lease Term) and at such Rent and
such other terms as Landlord in its reasonable sole discretion may
deem advisable, with the right to make alterations and repairs to the
Premises. Upon each subletting, (i) Tenant shall be immediately
liable to pay Landlord, in addition to any other indebtedness other
than Rent due from Tenant to Landlord hereunder, the reasonable cost
of such subletting (to the extent allocable to the remaining Lease
Term), including, but not limited to, reasonable attorneys' fees, and
any real estate commissions actually paid, and the cost of such
reasonable alterations and repairs incurred by Landlord and the
amount, if any, by which the Rent hereunder allocable to the subleased
premises for the period of such subletting (to the extent such period
does not exceed the Lease Term) exceeds the amount to be paid as Rent
by the subtenant for the subleased premises for such period or (ii) at
the option of Landlord, rents received from such subletting shall be
applied first to payment of indebtedness other than Rent due hereunder
from Tenant to Landlord; second, to the payment of any costs of such
subletting and of such alterations and repairs; third, to payment of
Rent due and unpaid hereunder; and the residue, if any, shall be held
by Landlord and applied in payment of future Rent as the same becomes
due hereunder. If Tenant has been credited with any Rent to be
received by such subletting under option (i) and such Rent shall not
be promptly paid to Landlord by the subtenant(s), or if such rentals
received from such subletting under option (ii) during any month be
less than that to be paid during the month by Tenant hereunder, Tenant
shall pay any such deficiency to Landlord. Such deficiency shall be
calculated and paid monthly. No taking possession of the Premises by
Landlord shall be construed as an election on its part to terminate
this Lease unless a written notice of such intention be given to
Tenant. Notwithstanding any such subletting without termination,
Landlord may at any time thereafter elect to terminate this Lease for
such then uncured previous default.
(e) The right to have a receiver appointed for Tenant upon
application by Landlord in accordance with applicable laws, to take
possession of the Premises and to apply any rental collected from the
Premises and to exercise all other rights and remedies granted to
Landlord pursuant to this Paragraph 15.
16. DEFAULT BY LANDLORD Landlord shall not be in default unless
Landlord fails to perform obligations required of Landlord within a
reasonable time, but in no event earlier than (30) days after written
notice by Tenant to Landlord (and, after September 1, 2003, to the
holder of any first mortgage or deed of trust covering the Premises
whose name and address shall have theretofore been furnished to Tenant
in writing), specifying wherein Landlord has failed to perform such
obligations; provided, however, that if the nature of Landlord's
obligations 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.
17. RIGHT TO ENCUMBER; SUBORDINATION.
17.1. Landlord's Interest. In the event Landlord's title to the
Premises is encumbered by a deed of trust on or after September 1,
2003, to secure a loan from a lender (hereinafter referred to as
"Lender") to Landlord, Tenant shall, at the request of Landlord or
Lender, execute in writing an agreement (in form reasonably acceptable
to Tenant), subordinating its rights under this Lease (subject to
customary nondisturbance protection in favor of Tenant) to the lien of
such deed of trust, or, if so requested, agreeing that the lien of
Lender's deed of trust shall be or remain subject and subordinate to
the rights of Tenant under this Lease. Notwithstanding any such
subordination, Tenant's possession under this Lease shall not be
disturbed if Tenant is not in default beyond any applicable cure
period and so long as Tenant shall pay all Rent and observe and
perform all of the provisions set forth in this Lease, and any
subordination agreement shall reflect the agreement of the Lender to
the same and the Lender's agreement upon any foreclosure to recognize
this Lease, including Tenant's Purchase Option under Paragraph 34.
hereof. Landlord represents to Tenant that, as of the date of this
Lease, the Premises are not presently encumbered by any mortgage, deed
of trust or other security device in favor of any Lender. Landlord
further agrees that it shall not encumber the Project by the lien of
any mortgage, deed of trust or other security device in favor of any
Lender during the period prior to September 1, 2003.
17.2. Tenant's Interest. Tenant hereby agrees that during the
Term of this Lease, Tenant shall not encumber or pledge (in any manner
whatsoever) its leasehold interest in the Premises.
18. ENTRY BY LANDLORD. Landlord reserves, and shall at all
reasonable times after at least twenty four (24) hours notice (except
in emergencies) have, the right to enter the Project to inspect it; to
perform any services or to make any repairs if Tenant is then in
default in the performance of such obligations under this Lease
pursuant to Paragraph 15 of this Lease, i.e. Tenant has received
notice of a default under this Lease and the applicable cure period
has expired and Tenant has not then cured such default); to submit the
Premises to prospective purchasers or mortgagees (and during the last
12 months of the term of this Lease to prospective tenants); to post
notices of non-responsibility; and (only if Tenant is then in default
in the performance of any of the terms, covenants and conditions of
this Lease pursuant to Paragraph 15 of this Lease, i.e. Tenant has
received notice of a default under this Lease and the applicable cure
period has expired and Tenant has not then cured such default) to
alter, improve or repair any Building or any other portion of the
Project, all without abatement of Rent, and may erect scaffolding and
other necessary structures in or through the Project where reasonably
required by the character of the work to be performed; provided,
however that the business of Tenant shall be interfered with to the
least extent that is reasonably practical. Any entry to the Project
by Landlord for the purposes provided for herein shall not under any
circumstances be construed or deemed to be a forcible or unlawful
entry into or a detainer of the Project or an eviction, actual or
constructive, of Tenant from the Project or any portion thereof.
19. ABANDONMENT. Tenant shall not abandon the Project at any
time during the term of this Lease (except that Tenant may vacate so
long as it pays Rent and otherwise performs its obligations
hereunder), and if Tenant shall abandon or surrender said Project, or
be dispossessed by the process of law, or otherwise, any personal
property belonging to Tenant and left on the Project shall be deemed
to be abandoned, at the option of Landlord.
20. DAMAGE OR DESTRUCTION.
20.1 Destruction. If prior to expiration of the Term, there
is a partial or total destruction of any Buildings or other
Improvements on the Project from any cause, the provisions of
Paragraph 11.8 shall control; provided, however, that if Tenant is
entitled to and does terminate this Lease pursuant to Paragraph 20.2
and if Landlord elects to require the hereinafter described removal of
any damaged Building or other Improvements, Tenant shall remove the
damaged Buildings or other Improvements and restore the affected
portions of the Premises as nearly as possible to the condition that
existed prior to the construction of the damaged Building and other
Improvements. Any and all work described in the prior sentence shall
be done at Tenant's expense, with Tenant to be entitled to all
associated insurance proceeds and shall be solely entitled to
negotiate any insurance claim settlements. Except as expressly
provided in Paragraph 20.2 below, Tenant shall have no right to
terminate this Lease on account of any damage to or destruction of the
Project and no such damage or destruction shall relieve or discharge
Tenant from the payment of any Rent or Additional Rent due hereunder
or from the performance and fulfillment of any of Tenant's obligations
and responsibilities as set forth herein. Notwithstanding any such
termination, Tenant shall fully perform any obligation under this
Lease relating to an event occurring or circumstances existing prior
to the date of termination of this Lease, including the payment of all
Rent and any Real Property Taxes which Tenant is obligated to pay
hereunder.
20.2 Limitation on Obligation to Replace. Tenant shall not
be obligated to repair or replace any Building or any other
Improvements or fixtures situated on or used in connection with the
Project if (i) the destruction occurs within the last twenty four (24)
months of the Lease Term, and (ii) the repair or replacement of the
destroyed building, improvements or fixtures would require more than
one hundred eighty (180) days to complete. If Tenant elects to
terminate this Lease following such destruction, Tenant shall (1)
notify Landlord of such election within twenty (20) days following the
date of such damage, (2) execute, acknowledge and deliver to Landlord
a deed, in form reasonably satisfactory to Landlord, conveying unto
Landlord all right, title and interest herein conveyed to Tenant in
and to the Project, (3) thereupon deliver the Project and any
remaining portion of any Building or other Improvements to Landlord
and (4) assign to Landlord the right to receive any net insurance
proceeds that may have been paid or thereafter be payable to Tenant
relating to the cost of repairing any such damage to any Building or
other Improvements (but excluding Trade Fixtures), net of the cost of
collection of such insurance proceeds and any costs incurred by Tenant
(a) in making the Project safe and secure, (b) in making any
reasonable repairs or restoration necessitated by the circumstances of
any damage or destruction to any Building or other Improvements, and
(c) in removing any Building or other Improvements and restoring the
affected portions of the Premises pursuant to the following sentence.
Notwithstanding the foregoing, Landlord shall be entitled to require
Tenant to remove any damaged Building and Improvements and restore the
affected portions of the Premises as nearly as possible to the
condition that existed prior to the construction of the damaged
Building and other Improvements by delivering written notice of such
election within twenty (20) days following Tenant's delivery to
Landlord of such cancellation notice. Termination of this Lease shall
become effective only upon compliance with the provisions of this
subparagraph, but Rent and Additional Rent shall xxxxx as of the date
of Tenant's delivery of such cancellation notice. Except in the event
of the termination of the Lease as provided above, Tenant shall retain
all proceeds of insurance that remain after Tenant has performed its
obligations to restore or remove under this Paragraph 20.
20.3 Waiver. Each of Landlord and Tenant waives the
provisions of California Civil Code Sections 1932(2) and 1933(4), and
any similar or successor statutes relating to termination of leases
when the thing leased is substantially or entirely destroyed, and
agrees that any such occurrence shall instead be governed by the terms
of this Lease.
21. EMINENT DOMAIN. If title to all or any part of the Project
shall be taken for any public or quasi-public use under any statute,
or eminent domain, or by any conveyance to avoid or compromise and
settle the same or by private or public purchase in lieu of any such
taking, the rights of Landlord and Tenant in such event shall be
determined as follows:
21.1 Total or Partial Taking. The term "total taking" as
used in this Paragraph means the taking of all of the Project under
the power of eminent domain or a taking of so much of the Project as
to prevent or substantially impair the conduct of Tenant's business
thereon in Tenant's reasonable discretion. The term "partial taking"
means the taking of a portion only of the Project which does not
constitute a total taking as above defined.
If, during the Lease Term, there shall be a total
taking by public authority under the power of eminent domain, the
leasehold estate of Tenant in or to the Project shall cease and
terminate as of the date the actual physical possession shall be
taken.
If, during the Lease Term, there shall be a partial
taking of the Project, this Lease shall terminate as to the portion of
the Project taken upon the date upon which actual physical possession
of said portion of the Project is taken pursuant to eminent domain
proceedings, but this Lease shall continue in full force and effect as
to the remainder of the Project. The Rent payable by Tenant for the
balance of the Lease Term shall be abated in the ratio that the square
footage ground area of the Project taken bears to the total ground
area of the Project at the time of such taking.
21.2 Distribution of Award. All compensation and damages
awarded for the taking of the land that constitutes a part of the
Project or any portion thereof shall, except as otherwise herein
provided, belong to and be the sole property of Landlord, and Tenant
shall not have any claim or be entitled to any award for diminution in
value of its leasehold or for the value of any unexpired Lease Term,
provided however that the net amount of any award so received by
Landlord (net of the cost of collection) shall constitute a credit
against the Purchase Price calculated pursuant to Paragraph 34.4
hereof in the event of the exercise of either the Purchase Option or
the Sales Option pursuant to Paragraph 34. All compensation and
damages awarded for the taking of any Building or other Improvements,
or any portion thereof, shall, except as otherwise herein provided,
belong to and be the sole property of Tenant, and Landlord shall not
have any claim or be entitled to any award for diminution in value of
the land as a result thereof, as severance damages or otherwise. In
addition, Tenant shall be entitled to any award specifically awarded
by the agency to Tenant for Tenant's moving and relocation costs
including the value of personal property and equipment of Tenant which
cannot be relocated and Tenant's loss of good will. Notwithstanding
the foregoing, in the event of any taking first occurring on or after
September 1, 2003, then any compensation and damages awarded for the
taking of any Building or other Improvements, or any portion thereof,
net of the cost of collection of such award and the cost of
repairing the Building or other Improvements, shall belong to and be
the sole property of Landlord, provided however that the net amount of
any award so received by Landlord (net of such costs of collection and
repair) shall constitute a credit against the Purchase Price
calculated pursuant to Paragraph 34.4 hereof in the event of the
exercise of either the Purchase Option or the Sales Option pursuant to
Paragraph 34.
21.3 Reconstruction. In the event of a partial taking of
the Project which does not result in a termination of this Lease
pursuant to the foregoing provisions, and subject to Paragraph 8
above, Tenant shall promptly reconstruct or restore the Project and
the buildings and all Improvements located thereon so that the
remainder of the Project and the buildings and Improvements thereon
will be suitable for Tenant's continued use of the Project. Any award
for such partial taking of the land portion of the Project shall be
available to Tenant for Tenant's use in paying the costs (hard and
soft) of the reconstruction or restoration of any sidewalks,
driveways, parking lots, landscaping or the like (provided the cost of
any such reconstruction or restoration was not otherwise included in
the award for the partial taking of any Buildings or other
Improvements). Any award for such partial taking of any Buildings or
other Improvements shall be available to Tenant for Tenant's use in
paying the costs (hard and soft) of the reconstruction or restoration
of the Buildings and other Improvements. Any excess amount of such
awards shall be divided between Landlord and Tenant as provided above
in Paragraph 21.2. Such reconstruction or restoration shall be
performed by Tenant, subject to the following provisions:
A. such reconstruction shall be completed by Tenant as if
they were the Initial Improvements in accordance with Paragraph 8, and
in a good and workmanlike manner and in conformity to, and with, all
requirements pertaining thereto;
B. all the costs and expenses of such reconstruction shall
be paid and borne by Tenant (subject to reimbursement from any award,
as provided above); and
during the period when such reconstruction is being performed, the
monthly Base Rent shall continue without abatement, but adjusted as
provided above.
21.4 Contest. Either Tenant or Landlord may contest any award
made on account of any such taking and may prosecute appeals
therefrom; provided, however, that all of the costs and expenses
thereof shall be paid and borne by the party hereto who so contests
the same.
22. SALE OR CONVEYANCE BY LANDLORD. In the event of a sale or
conveyance of the Premises or any interest therein by any owner of the
reversion then constituting Landlord, upon written assumption by the
successor in interest of the obligations and liabilities under this
Lease, the transferor shall thereby be released from any then current
and any further liability upon any of the terms, covenants or
conditions (express or implied) herein contained in favor of Tenant,
and in such event, insofar as such transfer is concerned, Tenant
agrees to look solely to the responsibility of the successor in
interest of such transferor in and to the Premises and this Lease.
This Lease shall not be affected by any such sale or conveyance, and
Tenant agrees to attorn to the successor in interest of such
transferor. Notwithstanding anything to the contrary set forth above,
if Landlord sells or otherwise conveys its interest in the Premises,
Landlord shall not be relieved of its obligations under the Lease,
unless Landlord's successor in interest assumes, in writing,
Landlord's obligations under the Lease. Prior to any such sale or
conveyance of the Premises or any interest therein, Landlord shall
consult with Tenant as contemplated in Paragraph 10.1.
23. ATTORNMENT TO LENDER OR THIRD PARTY. In the event the interest
of Landlord in the Premises is on or after September 1, 2003,
encumbered by deed of trust, and such interest is thereafter acquired
by the Lender or any third party through judicial foreclosure or by
exercise of a power of sale at private trustee's foreclosure sale,
Tenant hereby agrees, upon receipt of written recognition by the
purchaser of Tenant's interest in the Premises under this Lease
(including Tenant's Purchase Option), to attorn to the purchaser at
any such judicial foreclosure or foreclosure sale and to recognize
such purchaser as the Landlord under this Lease. In the event the
lien of the deed of trust securing the loan from a Lender to Landlord
is prior and paramount to this Lease, this Lease shall nonetheless
continue in full force and effect for the remainder of the unexpired
Term, at the same Rental herein reserved and upon all the other terms,
conditions and covenants herein contained (including Tenant's Purchase
Option).
24. HOLDING OVER. Any holding over by Tenant after expiration or
other termination of the Lease Term with the written consent of
Landlord delivered to Tenant shall not constitute a renewal or
extension of the Lease or give Tenant any rights in or to the Project
except as expressly provided in this Lease. Any holding over after
the expiration or other termination of the Lease Term, with the
consent of Landlord, shall be construed to be a tenancy from month to
month, on the same terms and conditions herein specified insofar as
applicable except that the monthly Base Rent shall be increased to an
amount equal to one hundred fifty (150%) percent of the monthly Base
Rent required during the last month of the Lease Term.
25. ESTOPPEL CERTIFICATE. Tenant and/or Landlord shall at any time
upon not less than ten (10) days prior written notice from the other
party execute, acknowledge and deliver to the requesting party a
statement in writing (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 date to which the Rent and other
charges are paid in advance, if any, and (ii) acknowledging that there
are not, to the party's knowledge, any uncured defaults on the part of
the requesting party hereunder, or specifying such defaults, if any,
are claimed. Any such statement may be conclusively relied upon by
any prospective purchaser or encumbrancer of the Premises or any
portion of the Project, or any assignee or subtenant of the Project.
A requested party's failure to deliver such statement within such time
shall be conclusive upon the requested party that this Lease is in
full force and effect, without modification except as may be
represented by the requesting party; that there are no uncured
defaults in the requesting party's performance, and that not more than
one month's Rent has been paid in advance. Landlord and Tenant
further agree to appropriately and timely respond to the respective
reasonable inquiries of the auditors of the other party, but such
response shall be limited to the respective knowledge of the
responding party.
26. RIGHT OF LANDLORD TO PERFORM. All terms, covenants and
conditions of this Lease to be performed or observed by Tenant shall
be performed or observed by Tenant at Tenant's sole cost and expense
and without any reduction of Rent. If Tenant shall fail to pay any
sum of money, or other Rent, required to be paid by it hereunder or
shall fail to perform any other term of covenant hereunder on its part
to be performed, and such failure shall continue for twenty (20) days
after written notice thereof by Landlord, Landlord, without waiving or
releasing Tenant from any obligation of Tenant hereunder, may, but
shall not be obliged to, make any such payment or perform any such
other term or covenant on Tenant's part to be performed. All sums so
paid by Landlord and all necessary costs of such performance by
Landlord together with interest thereon at the rate of Bank of
America's Prime Rate (or equivalent rate thereof) of interest plus
five percent (5%) per annum, but in no event greater then the maximum
rate of interest permitted by applicable law, from the date of such
payment or performance by Landlord, shall be paid (and Tenant
covenants to make such payment) to Landlord within ten (10) business
days after demand by Landlord, and Landlord shall have (in addition to
any other right or remedy of Landlord) the same rights and remedies in
the event of nonpayment by Tenant as in the case of failure by Tenant
in the payment of Rent hereunder.
ATTORNEYS' FEES.
A. In the event that either Landlord or Tenant should bring
suit for the possession of the Project, for the recovery of any sum
due under this Lease, or because of the breach of any provision of
this Lease, or for any other relief against the other party hereunder,
then all costs and expenses, including reasonable attorneys' fees,
incurred by the prevailing party therein shall be paid by the other
party, which obligation on the part of the other party shall be deemed
to have accrued on the date of the commencement of such action and
shall be enforceable whether or not the action is prosecuted to
judgment.
B. In addition to any other rights of Landlord under this Lease
to defense or indemnification by Tenant, should Landlord be named by a
third party as a defendant in any suit brought by such third party
principally against Tenant in connection with or arising out of
Tenant's alleged improper or tortious conduct associated with the
Project, Tenant shall pay to Landlord Landlord's reasonable costs and
expenses incurred in such suit, including reasonable attorney's fees
(but Landlord agrees to cooperate with Tenant in Tenant's efforts to
provide a joint defense to such suit or otherwise to minimize the
costs of such defense or the settlement of such suit).
28. WAIVER. The waiver by either party of the other party's failure
to perform or observe any term, covenant or condition herein contained
to be performed or observed by such waiving party shall not be deemed
to be a waiver of such term, covenant or condition or of any
subsequent failure of the party failing to perform or observe the same
or any other such term, covenant or condition therein contained, and
no custom or practice which may develop between the parties hereto
during the Lease Term shall be deemed a waiver of, or in any way
affect, the right of either party to insist upon performance and
observance by the other party in strict accordance with the terms
hereof.
29. NOTICES. All notices (including, without limitation, any
Exercise Notice) , demands, requests, advices or designations which
may be or are required to be given by either party to the other
hereunder shall be in writing. All notices, demands, requests,
advices or designations by Landlord to Tenant shall be sufficiently
given, made or delivered if personally delivered to or sent to Tenant
by United States certified or registered mail, postage prepaid or by a
reputable same day or overnight courier service addressed to Tenant at
000 Xxxx Xxxx Xxxx, Xxxx Xxxx, XX 00000, Attn: Manager Corporate Real
Estate ( and if such notice constitutes a notice of default under this
Lease or any Exercise Notice or other notice pertaining either to the
Purchase Option or the Sales Option, then an additional copy shall be
sent to Tenant at 000 Xxxx Xxxx Xxxx, Xxxx Xxxx, XX 00000, Attn:
General Counsel, Legal Department). All notices, demands, requests,
advices or designations by Tenant to Landlord shall be sufficiently
given, made or delivered if personally delivered to or sent to
Landlord by United States certified or registered mail, postage
prepaid, or by a reputable same day or overnight courier service
addressed to Landlord at its offices at c/o Peery/Xxxxxxxxx, 0000
Xxxxxxx Xxxxxxx Xxxx., Xxxxx 000, Xxxxx Xxxxx, XX 00000 Attn: Xxxxxxx
X. Xxxxx. Each notice, request, demand, advice or designation
referred to in this Paragraph shall be deemed received on the date of
receipt or refusal to accept receipt at the address so provided for
notices if sent in the manner herein provided, as the case may be.
Either party shall have the right, upon ten (10) days written notice
to the other, to change its address for notices as provided herein;
however, Landlord shall send Tenant notices to only one address
(provided that in the event of a notice of default and any Exercise
Notice or other notice pertaining either to the Purchase Option or the
Sales Option, Landlord will provide an additional copy of such notice
of default to such one additional addressee as may be duly notified by
Tenant to Landlord in accordance with the provisions of this Lease).
30. EXAMINATION OF LEASE. Submission of this instrument for
examination or signature by either Tenant or Landlord does not
constitute a reservation of or option for a Lease, and this instrument
is not effective as a lease or otherwise until its execution and
delivery by both Landlord and Tenant.
31. CORPORATE AUTHORITY. If Tenant is a corporation (or a
partnership), each individual executing this Lease on behalf of said
corporation (or partnership) represents and warrants that he or she is
duly authorized to execute and deliver this Lease on behalf of said
corporation (or partnership) in accordance with the by-laws of said
corporation (or partnership in accordance with the partnership
agreement) and that this Lease is binding upon said corporation (or
partnership) in accordance with its terms. If Tenant is a
corporation, Tenant shall, within thirty (30) days after execution of
this Lease, deliver to Landlord a certified copy of the resolution of
the Board of Directors of said corporation authorizing or ratifying
the specific execution of this Lease by the individual executing said
Lease. In lieu of said corporate resolution, Tenant may provide
Landlord with an outside legal opinion stating that the parties
executing this Lease on behalf of Tenant are authorized to do so by
the Board of Directors.
CONSENT. Whenever the consent of one party to the other is required
hereunder, such consent shall not be unreasonably withheld.
32. LIMITATION OF LIABILITY. Except as set forth in the final
sentence of this Paragraph 33, in consideration of the benefits
accruing hereunder, Tenant and all successors and assigns to Tenant as
respects Tenant's interest under this Lease, covenant and agree that,
in the event of any actual or alleged failure, breach or default
hereunder by Landlord:
(A) the sole and exclusive remedy shall be against Landlord's
interest in the Project leased herein;
(B) no constituent member and/or no partner of Landlord shall be
sued or named as a party in any suit or action (except as may be
necessary to secure jurisdiction of the limited liability company or
partnership);
(C) no service of process shall be made against any constituent
member or partner of Landlord (except as may be necessary to secure
jurisdiction of the limited liability company or partnership);
(D) no constituent member or partner of Landlord shall be
required to answer or otherwise plead to any service of process;
(E) no judgment will be taken against any constituent member or
partner of Landlord;
(F) any judgment taken against any constituent member or partner
of Landlord may be vacated and set aside at any time without hearing;
(G) no writ of execution will ever be levied against the assets
of any constituent member or any partner of Landlord; and
these covenants and agreements are enforceable both by Landlord and
also by any constituent member or any partner of Landlord.
Tenant agrees that each of the foregoing covenants and agreements
shall be applicable to any covenant or agreement either expressly
contained in this Lease or imposed by statute or at common law with
respect to this Lease. Notwithstanding the foregoing provisions of
this Paragraph 33, such provisions shall not apply to, and Tenant
shall in no event be prohibited from pursuing any remedy against
Landlord, including seeking specific performance to enforce its rights
under the provisions of Paragraph 34 of this Lease, in the event of
Landlord's failure to perform any of its obligations under Paragraph
34 of this Lease (relating to the Purchase Option or Sales Option) or
under the Purchase Agreement to be delivered pursuant to the exercise
of either the Purchase Option or the Sales Option.
34. OPTION TO PURCHASE AND SELL.
34.1 Grant of Option. Landlord hereby grants to Tenant an option
to purchase the Premises "as is", without any warranties or
representations from Landlord, on the terms and conditions contained
in this Paragraph 34 (the "Purchase Option"). If Tenant exercises the
Purchase Option, Tenant shall purchase from Landlord and Landlord
shall sell and convey to Tenant by grant deed fee title to the
Premises for the Purchase Price (as defined below) and on the terms
set forth in this Paragraph 34. Landlord shall also have the option
(the "Sales Option") to elect to sell and to require Tenant to
purchase Landlord's interest in the Premises on the terms and
conditions contained in this Paragraph 34. In the event either
Landlord or Tenant exercises its respective Option, the parties shall
execute a purchase agreement in the form attached hereto as Exhibit D
("Purchase Agreement").
34.2 Exercise of Sales Option. At any time prior to the date of
August 31, 2001, Landlord shall be entitled to exercise the Sales
Option. Landlord shall exercise the Sales Option, if at all, by (i)
delivering to Tenant written notice (the "Sales Notice") of Landlord's
intention to exercise the Sales Option which notice shall include the
Closing Date selected by Landlord as described in Paragraph 34.6
below, and (ii) delivering to Tenant three originals of the Purchase
Agreement duly completed and executed by Landlord. Promptly following
receipt of the foregoing items, Tenant shall execute the three
originals of the Purchase Agreement. Tenant shall then deliver one
such original to Landlord, one such original to the Escrow Agent as
provided for in the Purchase Agreement, and retain one for its own
records. If Tenant defaults in performing its obligations as provided
in the Purchase Agreement to purchase the Premises following delivery
by Landlord of the Sale Notice, then the Purchase Option defined
hereinbelow shall lapse and be of no further force or effect and
Landlord shall be entitled to compel Tenant to purchase the Premises
by bringing an action for specific performance respecting said
purchase obligation.
34.2 Exercise of Purchase Option. The Purchase Option may be
exercised by Tenant at any time following the date of August 31, 2000,
unless the Purchase Option has lapsed pursuant to the terms of this
Paragraph 34. Tenant shall exercise the Purchase Option, if at all,
by (i) delivering to Landlord written notice (the "Exercise Notice")
of Tenant's intention to exercise the Purchase Option which notice
shall include the Closing Date selected by Tenant as described in
Paragraph 34.6 below, and (ii) delivering to Landlord three originals
of the Purchase Agreement duly completed and executed by Tenant.
Promptly following receipt of the foregoing items, Landlord shall
execute the three originals of the Purchase Agreement, then deliver
two of those originals to Tenant. Tenant shall deliver one such
original to the Escrow Agent as provided for in the Purchase
Agreement, and retain one for its own records.
34.4 Purchase Price. Upon exercise of the Sale Option or the
Purchase Option as herein provided, Tenant shall be obligated to
purchase, and Landlord shall be obligated to sell, the Premises at a
purchase price (the "Purchase Price") determined as follows: (i) if
Landlord gives the Sale Notice to Tenant, then the Purchase Price
shall be the sum of Sixteen Million Nine Hundred Seventy Thousand Nine
Hundred Ninety-Seven Dollars ($16,970,997), (ii) if Tenant gives an
Exercise Notice to Landlord, which, in accordance with the provisions
of Paragraph 34.3 above, provides for the Closing Date to occur on or
prior to September 30, 2002, then the Purchase Price shall be the sum
Sixteen Million Nine Hundred Seventy Thousand Nine Hundred Ninety-
Seven Dollars ($16,970,997), and (iii) if Tenant gives an Exercise
Notice to Landlord which, in accordance with the provisions of
Paragraph 34.3 above, provides for the Closing Date to occur after
September 30, 2002, then the Purchase Price shall be determined by
multiplying: (A) the sum of Sixteen Million Nine Hundred Seventy
Thousand Nine Hundred Ninety-Seven Dollars ($16,970,997) by (B) the
Purchase Price Adjustment Factor. The "Purchase Price Adjustment
Factor" shall be that fraction, the numerator of which is the Index
published for the month of September immediately prior to the Closing
Date set forth in the Exercise Notice, and the denominator of which is
the Index published for the month of September 2001.
34.5 Transfer of Title. Subject to the "Permitted Exceptions" as
provided in Section 3.2 of the Purchase Agreement, Landlord shall
convey to Tenant at the Close of Escrow by grant deed (the "Grant
Deed"), fee title to the Premises free of all monetary liens and
encumbrances, except for non-delinquent real property taxes and
assessments and free of any exceptions to title caused by any acts or
wrongful omissions of Landlord which were not otherwise caused or
consented to by Tenant. Landlord shall also assign to Tenant at Close
of Escrow all of Landlord's interest in this Lease and any
reversionary or other interest in any Buildings or other Improvements
then or thereafter to be constructed on the Premises. Tenant's
obligation to purchase shall be conditioned upon its obtaining at
Close of Escrow an ALTA extended coverage title insurance policy
naming Tenant as the insured party in the amount of the Purchase
Price, showing fee title to the Premises and the Project vested in
Tenant free of all such monetary liens and encumbrances other than the
"Permitted Exceptions" as provided in Section 3.2 of the Purchase
Agreement. Landlord agrees that, following the date of this Lease,
Landlord shall not take any actions, or wrongfully omit to take any
action (excepting only actions that are the obligation of Tenant under
this Lease) that would cause any new exceptions to title to the
Premises or the Project to arise without the prior written consent of
Tenant, which consent Tenant may withhold in its reasonable
discretion.
34.6 Escrow.
A. Close of Escrow. If Landlord exercises the Sale
Option, then the date for the Close of Escrow (the "Closing Date")
shall be as selected by Landlord, but no sooner than forty-five (45)
days following the date of delivery of the Sale Notice to Tenant. If
Tenant exercises the Purchase Option, then the Closing Date shall be
as selected by Tenant, but no sooner than one (1) year following the
date of the delivery of the Exercise Notice to Landlord. If any date
so selected as the Closing Date is not a business day, then the next
occurring business day shall be the Closing Date. The "Close of
Escrow" shall be deemed to occur at the moment the Grant Deed is
recorded in the County Recorder's Office.
B. Closing Costs. The Purchase Price shall be paid to
Landlord by Tenant in cash net of all customary closing costs, escrow
fees, transfer taxes and/or other customary closing costs, all of
which shall be paid by Tenant. Notwithstanding the foregoing,
Landlord shall bear its own attorney's fees, if any, any costs and
expenses incurred in clearing any title issues caused by Landlord as
provided in Paragraph 34.5, in prepaying or releasing any financing
obtained by Landlord, or in connection with any Exchange for the
benefit of Landlord.
C. Prorations in Escrow. Current rents and other payments
(if any) received as of the Close of Escrow by Landlord under this
Lease shall be prorated through the Escrow as of the Close of Escrow.
34.7 Cooperate with Tax-Free Exchange. In the event that the
Sale Option or the Purchase Option is exercised, each party agrees to
cooperate in any reasonable manner requested by the other, in order to
accomplish any like-kind exchange (the "Exchange") for the Premises
pursuant to Section 1031 of the Internal Revenue Code of 1986, as
amended, so long as (i) the cooperating party incurs no additional
cost as the result of such cooperation, (ii) is not required to take
or hold title to other property and (iii) the Closing Date is not
extended by more than three (3) months from the date selected pursuant
to Paragraph 34.6. Each Party shall remain fully liable to the other
for any breach of its obligations or any of its representations and
warranties under this Lease and the Purchase Agreement, regardless of
any assignment of this Lease to any third party intermediary in the
Exchange.
35. MEMORANDUM OF LEASE.
35.1 Upon the execution of this Lease, the parties hereto will
also execute and acknowledge the memorandum of lease in the form
attached hereto as Exhibit E for the purposes of recording at either
party's election.
36. MISCELLANEOUS AND GENERAL PROVISIONS.
A. This Lease shall in all respects be governed by and
construed in accordance with the laws of the State of California. If
any provision of this Lease shall be invalid, unenforceable or
ineffective for any reason whatsoever, all other provisions hereof
shall be and remain in full force and effect.
B. The term "Landlord" or any pronoun used in place thereof
includes the plural as well as the singular and the successors and
assigns of Landlord. The term "Tenant" or any pronoun used in place
thereof includes the plural as well as the singular and individuals,
firms, associations, partnerships and corporations, and their and each
of their respective heirs, executors, administrators, successors and
permitted assigns, according to the context hereof, and the provisions
of this Lease shall inure to the benefit of and bind such heirs,
executors, administrators, successors and permitted assigns. The term
"person" includes the plural as well as the singular and individuals,
firms, associations, partnerships and corporations. Words used in any
gender include other genders. If there be more than one Tenant the
obligations of Tenant hereunder are joint and several. The paragraph
headings of this Lease are for convenience of reference only and shall
have no effect upon the construction or interpretation of any
provision hereof.
C. Time is of the essence of this Lease and of each and all of
its provisions.
D. At the expiration or earlier termination of this Lease,
Tenant shall execute, acknowledge and deliver to Landlord, within ten
(10) days after written demand from Landlord to Tenant, any quitclaim
deed or other document required by any reputable title company,
licensed to operate in the State of California, to remove the cloud or
encumbrance created by this Lease from the Premises.
E. This instrument along with any exhibits and attachments
hereto constitutes the entire Agreement between Landlord and Tenant
relative to the Premises and the Project and this agreement and the
exhibits and attachments may be altered, amended or revoked only by an
instrument in writing signed by both Landlord and Tenant. Landlord
and Tenant agree hereby that all prior or contemporaneous oral
agreements between and among themselves and their agents or
representatives relative to the leasing of the Premises are merged in
or revoked by this agreement.
F. Tenant further agrees, following the period of September 1,
2003, to execute any tenant estoppel certificates in favor of Lender
as may be reasonably requested by Landlord in order for Landlord
thereafter to obtain financing for the Premises.
G. All Paragraphs listed in the Lease Summary as additional
paragraphs are added hereto and are included as a part of this Lease.
H. Clauses, plats and riders, if any, signed by Landlord and
Tenant and endorsed on or affixed to this Lease are a part hereof.
I. Tenant covenants and agrees that no diminution or shutting
off of light, air or view by any structure which may be hereafter
erected (whether or not by Landlord) on real property other than the
Premises shall in any way affect his Lease, entitle Tenant to any
reduction of Rent hereunder or result in any liability of Landlord to
Tenant.
J. The voluntary or other surrender of this Lease or the
Premises by Tenant or a mutual cancellation of this Lease shall not
work as a merger and, at the option of Landlord, shall either
terminate all or any existing subleases or subtenancies or operate as
an assignment to Landlord of all or any such subleases or
subtenancies.
37. BROKERS. Landlord shall not be responsible or liable for the
payment of commission to Catalyst Real Estate Group or any third party
broker in connection with the negotiation or consummation of this
Lease (or the purchase of the Premises by Tenant). Tenant agrees to
pay a commission to Catalyst Real Estate Group pursuant to the terms
of their separate written agreement, and to indemnify and hold
Landlord harmless from any cost, expense, or liability for any
compensation, commission or charges claimed by any realtor, broker, or
agent, with respect to this Lease or the negotiation of this Lease or
the potential sale of the Premises pursuant to Paragraph 34. Except
as provided above, each of Landlord and Tenant represents and warrants
to the other that no party is entitled to any real estate brokerage or
salesperson commission or any finders' fee as a result of such party's
action in connection with the leasing of the Premises to Tenant or the
potential sale of said Premises as provided for in Paragraph 34. Each
of Landlord and Tenant shall save, protect, defend, indemnify and hold
the other harmless from and against any claim to the contrary by any
salesperson, broker or finder based upon such salesperson's, broker's
or finder's relationship with such party.
IN WITNESS WHEREOF, Landlord and Tenant have executed and
delivered this Lease as of the day and year last written below.
LANDLORD: TENANT:
Xxxxxxx X. Xxxxx, as Trustee ALZA Corporation,
Under Trust Agreement dated a Delaware corporation
July 20, 1977, as Amended
(Xxxxxxx X. Xxxxx Separate
Property Trust)
By: /s/ Xxxxxxx X. Xxxxx By: s/ Xxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxx, Trustee Xxxx X. Xxxxxxxx
Date: September 12, 1997 Xxxx X. Xxxxxxxx
(Typed or Printed Name)
Xxxx Xxxxxxxxx, as Trustee Title: Senior Vice President,
under Trust Agreement dated Commerical Services
July 20, 1977, as amended(Xxxx
Xxxxxxxxx Survivor's Trust, Date: September 12, 1997
formerly known as the
Arrillaga Family Trust)
By: /s/Xxxx Xxxxxxxxx
Xxxx Xxxxxxxxx, Trustee
Date: September 12, 1997
