EXHIBIT 10.63
*** TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SS.SS.200.80(B)(4),
200.83 AND 240.24B-2
BUILD-TO-SUIT LEASE
Landlord: Britannia Pointe Grand Limited Partnership
Tenant: SUGEN, Inc.
Date: June 11, 1997
TABLE OF CONTENTS
1. PROPERTY................................................................. 1
1.1 Lease of Property................................................... 1
1.2 Landlord's Reserved Rights.......................................... 2
2. TERM..................................................................... 3
2.1 Term................................................................ 3
2.2 Early Possession.................................................... 3
2.3 Delay In Possession................................................. 4
2.4 Acknowledgement Of Rent Commencement................................ 5
2.5 Holding Over........................................................ 5
2.6 Option To Extend Term............................................... 5
2.7 Extension of Initial Term........................................... 6
3. RENTAL................................................................... 6
3.1 Minimum Rental...................................................... 6
(a) Rental Amounts............................................. 6
(b) Rental Adjustment Due to Change in Square Footage.......... 7
(c) Rental Adjustment in Connection with Cost of Improvements.. 7
(d) Rental Adjustment Due to Deferral of Tenant Improvements... 9
(e) Rental Amounts During First Extended Term.................. 9
(f) Rental Amounts During Second Extended Term................. 10
3.2 Late Charge......................................................... 10
4. STOCK WARRANTS........................................................... 11
4.1 Stock Warrants...................................................... 11
5. CONSTRUCTION............................................................. 13
5.1 Construction of Improvements........................................ 13
5.2 Condition of Property............................................... 13
5.3 Compliance with Law................................................. 14
6. EXPANSION OPTIONS........................................................ 15
6.1 Adjacent Property Lock-Up........................................... 15
6.2 Lock-Up Consideration............................................... 15
6.3 Exercise of Phase II Expansion Options.............................. 16
7. REFUSAL RIGHTS WITH RESPECT TO LEASES.................................... 18
7.1 Refusal Rights...................................................... 18
8. TAXES.................................................................... 20
8.1 Personal Property................................................... 20
8.2 Real Property....................................................... 20
9. OPERATING EXPENSES....................................................... 21
9.1 Payment Of Operating Expenses....................................... 21
9.2 Definition Of Operating Expenses.................................... 21
9.3 Determination Of Operating Expenses................................. 24
9.4 Final Accounting For Lease Year..................................... 25
9.5 Proration........................................................... 25
10. UTILITIES............................................................... 26
10.1 Payment............................................................. 26
10.2 Interruption........................................................ 26
11. ALTERATIONS; SIGNS...................................................... 26
11.1 Right To Make Alterations........................................... 26
11.2 Title To Alterations................................................ 27
11.3 Tenant Fixtures..................................................... 28
11.4 No Liens............................................................ 28
11.5 Signs............................................................... 28
12. MAINTENANCE AND REPAIRS................................................. 29
12.1 Landlord's Work..................................................... 29
12.2 Tenant's Obligation For Maintenance................................. 29
(a) Good Order, Condition And Repair........................... 29
(b) Landlord's Remedy.......................................... 30
(c) Condition Upon Surrender................................... 30
13. USE OF PROPERTY......................................................... 30
13.1 Permitted Use....................................................... 30
13.2 [Omitted.].......................................................... 31
13.3 No Nuisance......................................................... 31
13.4 Compliance With Laws................................................ 31
13.5 Liquidation Sales................................................... 31
13.6 Environmental Matters............................................... 32
14. INSURANCE AND INDEMNITY................................................. 36
14.1 Insurance........................................................... 36
14.2 Quality Of Policies And Certificates................................ 38
14.3 Workers' Compensation............................................... 38
14.4 Waiver Of Subrogation............................................... 38
14.5 Increase In Premiums................................................ 38
14.6 Indemnification..................................................... 39
14.7 Blanket Policy...................................................... 39
15. SUBLEASE AND ASSIGNMENT................................................. 40
15.1 Assignment And Sublease Of Property................................. 40
15.2 Rights Of Landlord.................................................. 40
16. RIGHT OF ENTRY AND QUIET ENJOYMENT...................................... 42
16.1 Right Of Entry...................................................... 42
16.2 Quiet Enjoyment..................................................... 42
17. XXXXXXXX AND TAKING..................................................... 42
17.1 Damage or Destruction............................................... 42
17.2 Condemnation........................................................ 44
17.3 Reservation Of Compensation......................................... 45
17.4 Restoration Of Improvements......................................... 45
18. DEFAULT................................................................. 45
18.1 Events Of Default................................................... 45
(a) [Omitted.]................................................. 45
(b) Nonpayment................................................. 46
(c) Other Obligations.......................................... 46
(d) General Assignment......................................... 46
(e) Bankruptcy................................................. 46
(f) Receivership............................................... 46
(g) Attachment................................................. 46
(h) Insolvency................................................. 47
18.2 Remedies Upon Tenant's Default...................................... 47
18.3 Remedies Cumulative................................................. 48
19. SUBORDINATION, ATTORNMENT AND SALE...................................... 48
19.1 Subordination To Mortgage........................................... 48
19.2 Sale Of Landlord's Interest......................................... 49
19.3 Estoppel Certificates............................................... 49
19.4 Subordination to CC&R's............................................. 50
19.5 Mortgagee Protection................................................ 50
20. SECURITY................................................................ 51
20.1 Deposit............................................................. 51
21. MISCELLANEOUS........................................................... 52
21.1 Notices............................................................. 52
21.2 Successors And Assigns.............................................. 53
21.3 No Waiver........................................................... 53
21.4 Severability........................................................ 53
21.5 Litigation Between Parties.......................................... 53
21.6 Surrender........................................................... 54
21.7 Interpretation...................................................... 54
21.8 Entire Agreement.................................................... 54
21.9 Governing Law....................................................... 54
21.10 No Partnership...................................................... 54
21.11 Financial Information............................................... 54
21.12 Costs............................................................... 55
21.13 Time................................................................ 55
21.14 Rules And Regulations............................................... 55
21.15 Brokers............................................................. 55
21.16 Memorandum Of Lease................................................. 56
21.17 Corporate Authority................................................. 56
21.18 Execution and Delivery.............................................. 56
21.19 Survival............................................................ 56
EXHIBITS
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EXHIBIT A Real Property Descriptions (Property and Center)
EXHIBIT B Site Plan
EXHIBIT C Workletter
EXHIBIT D Estimated Construction Schedule
EXHIBIT E Acknowledgement of Rent Commencement Date
BUILD-TO-SUIT LEASE
THIS BUILD-TO-SUIT LEASE ("Lease") is made and entered into as
of June 11, 1997, by and between BRITANNIA POINTE GRAND LIMITED PARTNERSHIP, a
Delaware limited partnership ("Landlord"), and SUGEN, INC., a Delaware
corporation ("Tenant").
THE PARTIES AGREE AS FOLLOWS:
1. PROPERTY
1.1 Lease of Property.
(a) Landlord leases to Tenant and Tenant hires and leases from
Landlord, on the terms, covenants and conditions hereinafter set forth, the
building (the "Initial Building") to be constructed pursuant to Article 5 hereof
and Exhibit C attached hereto on the real property described as "The Property"
in Exhibit A attached hereto (the "Property"), to consist of a two-story office
and laboratory building containing approximately [...*...] square feet. The
location of the Initial Building on the Property is intended to be substantially
as shown for the building designated as "Initial Building" on the site plan
attached hereto as Exhibit B (the "Site Plan"). The Property is part of the
Britannia Pointe Grand Business Park (the "Center") on East Grand Avenue in the
City of South San Francisco, County of San Mateo, State of California, which
presently consists of the real property described as "The Center" in Exhibit A
attached hereto and presently includes the existing buildings designated as
Buildings D, E, F and G on the Site Plan (containing, in the aggregate,
approximately [...*...] square feet of office and research and development
space). The Initial Building and the other improvements to be constructed on the
Property pursuant to Article 5 hereof and Exhibit C attached hereto, partly by
Landlord and partly by Tenant, are sometimes referred to collectively herein as
the "Improvements." The parking areas, driveways, sidewalks, landscaped areas
and other portions of the Center that lie outside the exterior walls of the
buildings now existing or to be constructed in the Center, as depicted in the
Site Plan and as hereafter modified by Landlord from time to time in accordance
with the provisions of this Lease, are sometimes referred to herein as the
"Common Areas."
(b) As an appurtenance to Tenant's leasing of the Initial
Building pursuant to Section 1.1(a), Landlord hereby grants to Tenant, for the
benefit of Tenant and its employees, suppliers, shippers, customers and
invitees, during the term of this Lease, the non-exclusive right to use, in
common with others entitled to such use, (i) those portions of the Common Areas
improved from time to time for use as parking areas, driveways, sidewalks,
landscaped areas,
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*CONFIDENTIAL TREATMENT REQUESTED
1
or for other common purposes, and (ii) all access easements and similar rights
and privileges relating to or appurtenant to the Center and created or existing
from time to time under any access easement agreements, declarations of
covenants, conditions and restrictions, or other written agreements now or
hereafter of record with respect to the Center, subject however to any
limitations applicable to such rights and privileges under applicable law, under
this Lease and/or under the written agreements creating such rights and
privileges. Landlord represents that the Property, in conjunction with the
balance of the Center, shall include parking spaces available for use (on a
non-exclusive basis) by Tenant and its employees, agents and invitees at the
rate of at least 3.5 spaces per 1,000 square feet of building area, and that
Tenant shall be entitled to have ten (10) parking spaces marked as being
reserved for exclusive use by Tenant, at a location to be reasonably designated
by Tenant and approved by Landlord (which approval shall not be unreasonably
withheld or delayed) at an appropriate time in the course of the development of
Common Area plans and Initial Building plans pursuant to Article 5 and Exhibit
C.
1.2 Landlord's Reserved Rights. To the extent reasonably necessary to
permit Landlord to exercise any rights of Landlord and discharge any obligations
of Landlord under this Lease, Landlord shall have, in addition to the right of
entry set forth in Section 16.1 hereof, the following rights: (i) to make
changes to the Common Areas, including, without limitation, changes in the
location, size or shape of any portion of the Common Areas, and to relocate
parking spaces in the Center (but not materially decrease the number of such
parking spaces in areas of the Center generally adjacent to the Initial
Building); (ii) to close temporarily any of the Common Areas for maintenance or
other reasonable purposes, provided that reasonable parking and reasonable
access to the Initial Building remain available; (iii) to construct, alter or
add to any improvements in the Common Areas of the Center, and to construct,
alter or add to buildings and Common Area improvements in the Center (including,
but not limited to, construction of buildings in the areas designated as future
buildings C and H on the Site Plan, and construction of site improvements and
Common Area improvements in adjacent portions of the Center); (iv) to build in
areas adjacent to the Center and to add such areas to the Center; (v) to use the
Common Areas while engaged in making additional improvements, repairs or
alterations to the Center or any portion thereof; and (vi) to do and perform
such other acts with respect to the Common Areas and the Center as may be
necessary or appropriate; provided, however, that notwithstanding anything to
the contrary in this Section 1.2, Landlord's exercise of its rights hereunder
shall not cause any material diminution of Tenant's rights, nor any material
increase of Tenant's obligations, under this Lease or with respect to the
Improvements.
2
2. TERM
2.1 Term.
(a) The term of this Lease shall commence upon mutual
execution of this Lease by Xxxxxxxx and Xxxxxx. Tenant's minimum rental and
Operating Expense obligations shall commence on the earlier of (i) the date
which is one hundred eighty (180) days after the date Landlord delivers to
Tenant a Structural Completion Certificate pursuant to the Workletter attached
hereto as Exhibit C (subject to any adjustments authorized or required under the
provisions of such Exhibit C), notifying Tenant that Landlord's construction of
the shell of the Initial Building pursuant to Article 5 and Exhibit C is
substantially complete, or (ii) the date Tenant takes occupancy of and commences
operation of its business in the Initial Building, the earlier of such dates
being herein called the "Rent Commencement Date." The term of this Lease shall
end on the day (the "Termination Date") immediately preceding the date seventeen
(17) years after the Rent Commencement Date, unless sooner terminated or
extended as hereinafter provided.
(b) Notwithstanding any other provisions of this Lease, Tenant
shall have the right to terminate this Lease by written notice to Landlord, at
any time during the period from July 1, 1997 through July 9, 1997, inclusive, if
the [...*...] has not, by June 30, 1997, confirmed in a writing satisfactory to
Tenant in form and substance (in Tenant's reasonable judgment) the [...*...] of
Landlord's proposed acquisition of the Adjacent Property, including (but not
limited to) the [...*...] with respect to some or all of the Adjacent Property
to the extent necessary to facilitate such acquisition.
2.2 Early Possession. Tenant shall have the nonexclusive right to
occupy and take possession of the Initial Building from and after the date of
Landlord's delivery of the Structural Completion Certificate described in clause
(i) of Section 2.1, even though Landlord will be continuing to construct the
balance of Landlord's Work as contemplated in Exhibit C, for the purpose of
constructing Tenant's Work as contemplated in Exhibit C and for the purpose of
installing fixtures and furniture, laboratory equipment, computer equipment,
telephone equipment, low voltage data wiring and personal property and other
similar work related to the construction of Tenant's Work and/or preparatory to
the commencement of Tenant's business on the Property. Such occupancy and
possession, and any early access under the next sentence of this Section 2.2,
shall be subject to and upon all of the terms and conditions of this Lease and
of the Workletter attached hereto as Exhibit C (including, but not limited to,
conditions relating to the maintenance of required insurance), except that
Tenant shall have no obligation to pay minimum rental or Operating Expenses for
any period prior to the Rent Commencement Date as determined under Section 2.1;
such early possession shall not advance or otherwise affect the Rent
Commencement Date or Termination Date determined under Section 2.1. Tenant shall
also be entitled to have early access to the Property at all appropriate times
prior to Landlord's delivery of the Structural Completion Certificate, subject
to the approval of Landlord and its
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*CONFIDENTIAL TREATMENT REQUESTED
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general contractor (which approval shall not be unreasonably withheld or
delayed) and to all other provisions of this Section 2.2, solely for the purpose
of performing work preparatory to the construction of Tenant's Work or necessary
for the orderly sequencing of such work, and Tenant shall not be required to pay
minimum rental or Operating Expenses by reason of such early access until the
Rent Commencement Date otherwise occurs; without limiting the generality of the
preceding portion of this sentence, Tenant shall be entitled to have early
access to the Property and the Initial Building as soon as the roof metal
decking is in place to begin hanging electrical, mechanical and plumbing
services from the overhead structure, subject to all of the provisions of this
Section 2.2. Tenant shall not interfere with or delay Landlord's contractors by
any early access, occupancy or possession under this Section 2.2, shall
coordinate and cooperate with Landlord and its contractors (who shall similarly
coordinate and cooperate with Tenant and its contractors) to minimize any
interference or delay by either party with respect to the other's work following
Landlord's delivery of the Structural Completion Certificate, and shall
indemnify, defend and hold harmless Landlord and its agents and employees from
and against any and all claims, demands, liabilities, actions, costs and
expenses, including (but not limited to) reasonable attorneys' fees, arising out
of or in connection with Xxxxxx's early entry upon the Property hereunder.
2.3 Delay In Possession. Landlord agrees to use its best reasonable
efforts to complete the work described in Section 5.1 and Exhibit C promptly,
diligently and within the respective time periods set forth in the estimated
construction schedule attached hereto as Exhibit D and incorporated herein by
this reference, as such schedule may be modified from time to time by mutual
agreement of Landlord and Tenant, and subject to the effects of any delays
caused by or attributable to Tenant or any other circumstances beyond Landlord's
reasonable control (excluding any financial inability); provided, however, that
except to the extent caused by a material default by Landlord of its obligations
set forth in this Lease (including, but not limited to, its obligations set
forth in this Section 2.3 and in Section 5.1 and Exhibit C), Landlord shall not
be liable for any damages caused by any delay in the completion of such work,
nor shall any such delay affect the validity of this Lease or the obligations of
Tenant hereunder. Notwithstanding any other provisions of this Section 2.3,
however, if Landlord fails to deliver the Structural Completion Certificate and
tender possession of the completed structural portions of the Building Shell
(i.e., those portions required to be completed as a condition of delivery of the
Structural Completion Certificate) to Tenant by the date which is [...*...]
after the date of this Lease, then Tenant shall have the right to terminate this
Lease without further liability hereunder by written notice delivered to
Landlord at any time prior to Landlord's delivery of the Structural Completion
Certificate and tender of possession of the completed structural portions of the
Building Shell to Tenant; provided, however, that the [...*...] period set forth
in this sentence shall be extended, day for day, for a period equal to the
length of any delays in Landlord's design and construction of the Building Shell
that are caused by any material default by Tenant in the performance of its
obligations under this Lease, including (but not limited to) any failure of
Tenant to make prompt and timely delivery to Landlord of all information
reasonably necessary for Landlord to complete the preparation of all drawings,
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*CONFIDENTIAL TREATMENT REQUESTED
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designs and specifications for the Building Shell and/or any failure of Tenant
to respond in a prompt and timely manner to any requests by Landlord or its
architect for approval of drawings, designs, specifications, changes or other
matters requiring Tenant's review or approval under the provisions of Exhibit C.
2.4 Acknowledgement Of Rent Commencement. Promptly following the Rent
Commencement Date, Landlord and Tenant shall execute a written acknowledgement
of the Rent Commencement Date, Termination Date and related matters,
substantially in the form attached hereto as Exhibit E (with appropriate
insertions), which acknowledgement shall be deemed to be incorporated herein by
this reference. Notwithstanding the foregoing requirement, the failure of either
party to execute such a written acknowledgement shall not affect the
determination of the Rent Commencement Date, Termination Date and related
matters in accordance with the provisions of this Lease.
2.5 Holding Over. If Tenant holds possession of the Property or any
portion thereof after the term of this Lease with Landlord's written consent,
then except as otherwise specified in such consent, Tenant shall become a tenant
from month to month at [...*...] of the rental and otherwise upon the terms
herein specified for the period immediately prior to such holding over and shall
continue in such status until the tenancy is terminated by either party upon not
less than thirty (30) days prior written notice. If Tenant holds possession of
the Property or any portion thereof after the term of this Lease without
Landlord's written consent, then Landlord in its sole discretion may elect (by
written notice to Tenant) to have Tenant become a tenant either from month to
month or at will, at [...*...] of the rental (prorated on a daily basis for an
at-will tenancy, if applicable) and otherwise upon the terms herein specified
for the period immediately prior to such holding over, or may elect to pursue
any and all legal remedies available to Landlord under applicable law with
respect to such unconsented holding over by Xxxxxx. Tenant shall indemnify and
hold Landlord harmless from any loss, damage, claim, liability, cost or expense
(including reasonable attorneys' fees) resulting from any delay by Xxxxxx in
surrendering the Property (except to the extent such delay is with Xxxxxxxx's
prior written consent), including but not limited to any claims made by a
succeeding tenant by reason of such delay. Acceptance of rent by Landlord
following expiration or termination of this Lease shall not constitute a renewal
of this Lease.
2.6 Option To Extend Term. Tenant shall have the option to extend the
term of this Lease, at the minimum rental set forth in Section 3.1(e) and (f)
and otherwise upon all the terms and provisions set forth herein with respect to
the initial term of this Lease, for up to two (2) additional periods of five (5)
years each, commencing upon expiration of the initial term hereof. Exercise of
such option with respect to the first such extended term shall be by written
notice to Landlord at least twelve (12) months prior to the expiration of the
initial term hereof; exercise of such option with respect to the second extended
term, if the first extension option has been duly exercised, shall be by like
written notice to Landlord at least twelve (12) months prior to the expiration
of the first extended term hereof. If Xxxxxx is in default hereunder, beyond any
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applicable notice and cure periods, on the date of such notice or on the date
any extended term is to commence, then the exercise of the option shall be of no
force or effect, the extended term shall not commence and this Lease shall
expire at the end of the then current term hereof (or at such earlier time as
Landlord may elect pursuant to the default provisions of this Lease). If Tenant
properly exercises one or more extension options under this Section, then all
references in this Lease (other than in this Section 2.6) to the "term" of this
Lease shall be construed to include the extension term(s) thus elected by
Xxxxxx. Except as expressly set forth in this Section 2.6 and in Section 2.7,
Tenant shall have no right to extend the term of this Lease beyond its
prescribed term.
2.7 Extension of Initial Term. In the event Tenant exercises any of its
expansion options under Article 6 hereof, the initial term and the Termination
Date shall be extended in accordance with Section 6.3(c), below.
3. RENTAL
3.1 Minimum Rental.
(a) Rental Amounts. Tenant shall pay to Landlord as minimum
rental for the Initial Building, in advance, without deduction, offset, notice
or demand, on or before the Rent Commencement Date and on or before the first
day of each subsequent calendar month of the term of this Lease, the following
amounts per month, subject to adjustment in accordance with the terms of this
Section 3.1:
[rest of page intentionally left blank]
6
Months Monthly Minimum Rental
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001 - 012 $ [...*...] ($[...*...] per square foot)
013 - 024 [...*...] ($[...*...] per square foot)
025 - 036 [...*...] ($[...*...] per square foot)
037 - 048 [...*...] ($[...*...] per square foot)
049 - 060 [...*...] ($[...*...] per square foot)
061 - 072 [...*...] ($[...*...] per square foot)
073 - 084 [...*...] ($[...*...] per square foot)
085 - 096 [...*...] ($[...*...] per square foot)
097 - 108 [...*...] ($[...*...] per square foot)
109 - 120 [...*...] ($[...*...] per square foot)
121 - 132 [...*...] ($[...*...] per square foot)
133 - 144 [...*...] ($[...*...] per square foot)
145 - 156 [...*...] ($[...*...] per square foot)
157 - 168 [...*...] ($[...*...] per square foot)
169 - 180 [...*...] ($[...*...] per square foot)
181 - 192 [...*...] ($[...*...] per square foot)
193 - 204 [...*...] ($[...*...] per square foot)
If the obligation to pay minimum rental hereunder commences on other than the
first day of a calendar month or if the term of this Lease terminates on other
than the last day of a calendar month, the minimum rental for such first or last
month of the term of this Lease, as the case may be, shall be prorated based on
the number of days the term of this Lease is in effect during such month. If an
increase in minimum rental becomes effective on a day other than the first day
of a calendar month, the minimum rental for that month shall be the sum of the
two applicable rates, each prorated for the portion of the month during which
such rate is in effect.
(b) Rental Adjustment Due to Change in Square Footage. The
minimum rental amounts specified in this Section 3.1 are based upon an estimated
area of [...*...] square feet for the Initial Building. If the actual area of
the Initial Building (measured from the exterior faces of exterior walls,
excluding overhangs, which are not expected to be substantial), when completed,
is greater or less than such estimated area, then the minimum rentals specified
in Section 3.1(a) shall be adjusted for each rental period in strict proportion
to the ratio between the actual area of the Initial Building during the
applicable period (determined on the basis of measurement described above in
this sentence) and the assumed area of [...*...] square feet. Measurements of
building area under this paragraph shall be made initially by Xxxxxxxx's
architect, subject to review and approval by Xxxxxx's architect.
(c) Rental Adjustment in Connection with Cost of Improvements.
The minimum rental amounts specified in Section 3.1(a) are based on an assumed
amount of [...*...] per square foot for the Cost of Improvements (determined in
accordance with Exhibit C) of the
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Tenant Improvements to be constructed by Tenant pursuant to Section 5.1 and
Exhibit C (and are thus based on an assumed amount of [...*...] per square foot
for Landlord's share of such Cost of Improvements). Under no circumstances shall
Landlord's liability for such Cost of Improvements exceed the lesser of (i)
[...*...] of the total Cost of Improvements for such Tenant Improvements or (ii)
[...*...] per square foot multiplied by the area of the Initial Building as
determined in accordance with Section 3.1(b) hereof. If, upon completion of
construction of the Tenant Improvements, it is determined that Landlord's share
of the Cost of Improvements of such Tenant Improvements (determined in
accordance with Exhibit C) is less than [...*...] per square foot (using the
area of the Premises as determined in accordance with Section 3.1(b) hereof),
then the minimum rental amounts specified in Section 3.1(a) shall be adjusted as
follows:
(i) If Landlord's share of such Cost of Improvements
is less than [...*...] per square foot but is at least [...*...] per
square foot, then the minimum rental under Section 3.1(a) during months
1 through 84 of the term of this Lease shall be decreased by [...*...]
per square foot per month for each [...*...] per square foot by which
Landlord's share of such Cost of Improvements is less than [...*...]
per square foot (prorated for any portion of such shortfall
representing a fraction of [...*...] per square foot);
(ii) If Landlord's share of such Cost of Improvements
is less than [...*...] per square foot but is at least [...*...] per
square foot, then the minimum rental under Section 3.1(a) during months
1 through 84 of the term of this Lease shall be decreased by the sum of
(A) [...*...] per square foot per month plus (B) [...*...] per square
foot per month for each [...*...] per square foot by which Landlord's
share of such Cost of Improvements is less than [...*...] per square
foot, and the minimum rental under Section 3.1(a) during months 85
through 120 of the term of this Lease shall be decreased by [...*...]
per square foot per month for each [...*...] per square foot by which
Landlord's share of such Cost of Improvements is less than [...*...]
per square foot (prorated, in each case, for any portion of such
shortfall representing a fraction of [...*...] per square foot); and
(iii) If Landlord's share of such Cost of
Improvements is less than [...*...] per square foot but is more than
[...*...] per square foot, then the minimum rental under Section 3.1(a)
during months 1 through 84 of the term of this Lease shall be decreased
by the sum of (A) [...*...] per square foot per month plus (B)
[...*...] per square foot per month for each [...*...] per square foot
by which Landlord's share of such Cost of Improvements is less than
[...*...] per square foot, the minimum rental during months 85 through
120 shall be decreased by the sum of (C) [...*...] per square foot per
month plus (D) [...*...] per square foot per month for each [...*...]
per square foot by which Xxxxxxxx's share of such Cost of Improvements
is less than [...*...] per square foot, and the minimum rental during
months 121 through 168 shall be decreased
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by [...*...] per square foot per month for each [...*...] per square
foot by which Landlord's share of such Cost of Improvements is less
than [...*...] per square foot (prorated, in each case, for any portion
of such shortfall representing a fraction of [...*...] per square
foot).
(d) Rental Adjustment Due to Deferral of Tenant Improvements.
If Tenant elects to defer completion of any portion of the Tenant Improvements
as contemplated in Section 5.1(b) and Exhibit C and, as a result of such
deferral, Landlord's share of the Cost of Improvements of the Tenant
Improvements completed on or about the Rent Commencement Date is less than
[...*...] per square foot, then Tenant's minimum rental obligation under Section
3.1(a) shall be reduced, to reflect such shortfall in Landlord's actual
contribution in accordance with the formula set forth in Section 3.1(c), for the
period from the Rent Commencement Date until the earlier to occur of (i)
substantial completion of the deferred portion of the Tenant Improvements or
(ii) eighteen (18) months after the Rent Commencement Date. Any continued
reduction in minimum rental after the end of the period described in the
preceding sentence shall be made only if construction of the deferred Tenant
Improvements is substantially completed within eighteen (18) months after the
Rent Commencement Date and Landlord's share of the aggregate Cost of
Improvements of the Tenant Improvements (taking into account both the initial
Tenant Improvements and the deferred Tenant Improvements) is less than [...*...]
per square foot, in which event a continuing reduction in minimum rental shall
be implemented in accordance with the formula set forth in Section 3.1(c)
hereof.
(e) Rental Amounts During First Extended Term. If Tenant
properly exercises its right to extend the term of this Lease pursuant to
Section 2.6 hereof, the minimum rental during the first extended term shall be
equal to [...*...] of the fair market rental value of the Initial Building (as
defined below), including any rental increase provisions then customary in the
City of South San Francisco for comparable commercial leases for office,
laboratory and research and development projects, determined as of the
commencement of such extended term in accordance with this paragraph. Upon
Landlord's receipt of a proper notice of Xxxxxx's exercise of its option to
extend the term of this Lease, the parties shall have sixty (60) days in which
to agree on the fair market rental (including any applicable rental increase
provisions) for the Initial Building at the commencement of the first extended
term for the uses permitted hereunder. If the parties agree on such fair market
rental and rental increase provisions (if any), they shall execute an amendment
to this Lease stating the amount of the applicable minimum monthly rental and
any applicable rental increase provisions. If the parties are unable to agree on
such rental (including any applicable rental increase provisions) within such
sixty (60) day period, then within fifteen (15) days after the expiration of
such period each party, at its cost and by giving notice to the other party,
shall appoint a real estate appraiser with at least five (5) years experience
appraising similar commercial properties in northeastern San Mateo County to
appraise and set the fair market rental and any applicable rental increase
provisions for the Initial Building at the commencement of the first extended
term in accordance with the provisions of this Section 3.1(e). If either party
fails to appoint an appraiser within the allotted time, the
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*CONFIDENTIAL TREATMENT REQUESTED
9
single appraiser appointed by the other party shall be the sole appraiser. If an
appraiser is appointed by each party and the two appraisers so appointed are
unable to agree upon a fair market rental (and any appropriate rental increase
provisions) within thirty (30) days after the appointment of the second, the two
appraisers shall appoint a third similarly qualified appraiser within ten (10)
days after the expiration of such 30-day period; if they are unable to agree
upon a third appraiser, then either party may, upon not less than five (5) days
notice to the other party, apply to the Presiding Judge of the San Mateo County
Superior Court for the appointment of a third qualified appraiser. Each party
shall bear its own legal fees in connection with appointment of the third
appraiser and shall bear one-half of any other costs of appointment of the third
appraiser and of such third appraiser's fee. The third appraiser, however
selected, shall be a person who has not previously acted for either party in any
capacity. Within thirty (30) days after the appointment of the third appraiser,
a majority of the three appraisers shall set the fair market rental and any
applicable rental increase provisions for the first extended term and shall so
notify the parties. If a majority are unable to agree within the allotted time,
(i) the three appraised fair market rentals shall be added together and divided
by three and the resulting quotient shall be the fair market rental for the
first extended term, and (ii) the applicable rental increase provision shall be
equal to the mathematical average (or the nearest reasonable approximation
thereof) of the two rental increase provisions that are most nearly comparable,
which determinations shall be binding on the parties and shall be enforceable in
any further proceedings relating to this Lease. For purposes of this Section
3.1(e), the "fair market rental" of the Initial Building shall be determined
with reference to the then prevailing market rental rates for properties in the
City of South San Francisco with shell, office, laboratory and research and
development improvements and site (common area) improvements comparable to those
then existing in the Initial Building and on the Property, including (without
limitation) the Improvements constructed by Landlord pursuant to Section 5.1 and
Exhibit C, the Tenant Improvements constructed by Tenant pursuant to Section 5.1
and Exhibit C and any and all other alterations, additions and improvements
(including, but not limited to, equipment and laboratory improvements, but
excluding any equipment installed by Tenant after substantial completion of
Tenant's initial build-out of the Tenant Improvements pursuant to Section 5.1
and Exhibit C) constructed by or for Tenant, whether at Landlord's or Tenant's
expense and whether paid for in cash or through additional rent or financed in
any other manner.
(f) Rental Amounts During Second Extended Term. If Tenant
properly exercises its right to a second extended term of this Lease pursuant to
Section 2.6 hereof, the minimum rental during such second extended term shall be
determined in the same manner provided in the preceding paragraph for the first
extended term, except that the determination shall be made as of the
commencement of the second extended term.
3.2 Late Charge. If Tenant fails to pay when due rental or other
amounts due Landlord hereunder, such unpaid amounts shall bear interest for the
benefit of Landlord at a rate equal to the lesser of [...*...] per annum or the
[...*...], from the date due to the date of payment. In addition to such
interest, Tenant shall pay to Landlord a late charge in an amount
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*CONFIDENTIAL TREATMENT REQUESTED
10
equal to [...*...] of any installment of minimum rental and any other amounts
due Landlord if not paid in full on or before the fifth (5th) day after such
rental or other amount is due. Tenant acknowledges that late payment by Tenant
to Landlord of rental or other amounts due hereunder will cause Landlord to
incur costs not contemplated by this Lease, including, without limitation,
processing and accounting charges and late charges which may be imposed on
Landlord by the terms of any loan relating to the Property. Tenant further
acknowledges that it is extremely difficult and impractical to fix the exact
amount of such costs and that the late charge set forth in this Section 3.2
represents a fair and reasonable estimate thereof. Acceptance of any late charge
by Landlord shall not constitute a waiver of Tenant's default with respect to
overdue rental or other amounts, nor shall such acceptance prevent Landlord from
exercising any other rights and remedies available to it. Acceptance of rent or
other payments by Landlord shall not constitute a waiver of late charges or
interest accrued with respect to such rent or other payments or any prior
installments thereof, nor of any other defaults by Tenant, whether monetary or
non-monetary in nature, remaining uncured at the time of such acceptance of rent
or other payments.
4. STOCK WARRANTS
4.1 Stock Warrants.
(a) Within thirty (30) days after the execution of this Lease
and as a condition to Landlord's obligations hereunder, Tenant shall deliver to
Landlord or Landlord's assignees (which may be any partners, shareholders or
affiliates of Landlord or any affiliates of any such partners, shareholders or
affiliates of Landlord) warrants registered in the name of Landlord or
Landlord's assignees for the acquisition of an aggregate of [...*...] shares of
Tenant's common stock, which warrants shall be in form and substance mutually
satisfactory to Landlord and Tenant. The warrants shall have an exercise price
per share equal to [...*...] of the average closing price for Tenant's common
stock on the NASDAQ National Market System for the twenty (20) trading days
immediately preceding the date of execution of this Lease and shall be
exercisable for a period of [...*...] years from the date of issuance.
(b) If Tenant elects to exercise the Phase IIA Expansion
Option under Section 6.3(a) hereof, then within thirty (30) days after the
execution of a lease or lease amendment covering the Phase IIA Expansion
Premises and as a condition to Landlord's obligations thereunder, Tenant shall
deliver to Landlord or Landlord's assignees (which may be any partners,
shareholders or affiliates of Landlord or any affiliates of any such partners,
shareholders or affiliates of Landlord) warrants registered in the name of
Landlord or Landlord's assignees for the acquisition of a number of shares of
Tenant's common stock equal to [...*...] of the number of square feet to be
included in the Phase IIA Expansion Premises, subject to adjustment if, between
the date of this Lease and the date of issuance of a warrant pursuant to this
Section, the common stock of Tenant is changed into a different number or class
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*CONFIDENTIAL TREATMENT REQUESTED
11
of shares by reason of any stock dividend, subdivision, reclassification,
recapitalization, split-up, combination or similar transaction, which warrants
shall be in form and substance substantially identical to those issued pursuant
to Section 4.1(a). The warrants shall have an exercise price per share equal to
[...*...] of the average closing price for Tenant's common stock on the NASDAQ
National Market System, or on such other exchange or trading system as Tenant's
common stock, or other security into which such common stock may be changed by
reason of any reclassification, recapitalization, split-up, combination or
similar transaction, may then be listed or traded, for the twenty (20) trading
days immediately preceding the date of execution of the lease or lease amendment
for the Phase IIA Expansion Premises and shall be exercisable for a period of
[...*...] years from the date of issuance.
(c) If Tenant elects to exercise the Phase IIB Expansion
Option under Section 6.3(b) hereof, then within thirty (30) days after the
execution of a lease or lease amendment covering the Phase IIB Expansion
Premises and as a condition to Landlord's obligations thereunder, Tenant shall
deliver to Landlord or Landlord's assignees (which may be any partners,
shareholders or affiliates of Landlord or any affiliates of any such partners,
shareholders or affiliates of Landlord) warrants registered in the name of
Landlord or Landlord's assignees for the acquisition of a number of shares of
Tenant's common stock equal to [...*...] of the number of square feet to be
included in the Phase IIB Expansion Premises, subject to adjustment if, between
the date of this Lease and the date of issuance of a warrant pursuant to this
Section, the common stock of Tenant is changed into a different number or class
of shares by reason of any stock dividend, subdivision, reclassification,
recapitalization, split-up, combination or similar transaction, which warrants
shall be in form and substance substantially identical to those issued pursuant
to Section 4.1(a). The warrants shall have an exercise price per share equal to
[...*...] of the average closing price for Tenant's common stock on the NASDAQ
National Market System, or on such other exchange or trading system as Tenant's
common stock, or other security into which such common stock may be changed by
reason of any reclassification, recapitalization, split-up, combination or
similar transaction, may then be listed or traded, for the twenty (20) trading
days immediately preceding the date of execution of the lease or lease amendment
for the Phase IIB Expansion Premises and shall be exercisable for a period of
[...*...] years from the date of issuance.
(d) Notwithstanding any other provisions of this Section 4.1,
Tenant shall not be committed or obligated, under the terms of paragraphs
4.1(a), (b) and (c) in the aggregate, to issue warrants for more than [...*...]
shares of Tenant's common stock, subject to adjustment if, between the date of
this Lease and the date of issuance of warrants pursuant to Section 4.1(a), (b)
and/or (c), as applicable, the common stock of Tenant is changed into a
different number or class of shares by reason of any stock dividend,
subdivision, reclassification, recapitalization, split-up, combination or
similar transaction. Since the maximum of [...*...] shares has been set with
reference to an anticipated total square footage of [...*...] square feet for
the Initial Premises, the Phase IIA Expansion Premises and the Phase IIB
Expansion Premises, however, nothing in Article 6 or elsewhere in this Lease
shall be construed to require Landlord to make
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*CONFIDENTIAL TREATMENT REQUESTED
12
available to Tenant more than [...*...] square feet of premises in the
aggregate, and to the extent Tenant requests at any time the right to occupy
premises containing, in the aggregate, more than [...*...] square feet, Landlord
shall be entitled to condition its agreement to lease such larger premises upon,
among other things, agreement between Landlord and Tenant on a mutually
satisfactory number of warrants (if any) to be issued in connection with the
expanded premises.
5. CONSTRUCTION
5.1 Construction of Improvements.
(a) Landlord shall, at Landlord's cost and expense (except as
otherwise provided herein and in Exhibit C), construct Landlord's Work as
defined in and in accordance with the terms and conditions of the Workletter
attached hereto as Exhibit C (the "Workletter"). Landlord shall use its best
reasonable efforts to complete such construction promptly, diligently and within
the applicable time periods set forth in the construction schedule developed or
to be developed pursuant to Exhibit D and incorporated herein by this reference,
as such schedule may be modified from time to time in accordance with the
Workletter, subject to the effects of any delays caused by Tenant or any other
circumstances beyond Landlord's reasonable control (excluding any financial
inability), and subject to the provisions of Section 2.3 above.
(b) Tenant shall, at Tenant's cost and expense (except as
otherwise provided herein and in Exhibit C), promptly and diligently construct
Tenant's Work as defined in and in accordance with the terms and conditions of
the Workletter. Notwithstanding the preceding sentence, Tenant shall have the
right, as set forth in the Workletter, to defer completion of the Tenant
Improvements in up to [...*...] square feet of the Initial Building for up to
eighteen (18) months after the Rent Commencement Date. Landlord and Tenant
acknowledge, however, that even within the area as to which such completion of
Tenant Improvements is to be deferred, it is likely to be necessary to complete
a portion of the Tenant Improvements in that area (such as, but not limited to,
plumbing and HVAC) in order for the City of South San Francisco to issue a
certificate of occupancy (or reasonable equivalent thereof) for the Initial
Building at or about the Rent Commencement Date, and that Xxxxxx's right to
defer completion of Tenant Improvements will not extend to any such work that is
necessary in order to obtain a certificate of occupancy for the Initial
Building.
5.2 Condition of Property. Landlord shall deliver the Building Shell
and other Improvements constructed by Landlord to Tenant clean and free of
debris, promptly upon completion of construction thereof, and Landlord warrants
to Tenant that the Building Shell and other Improvements constructed by Landlord
(i) shall be free from material structural defects and shall be in good
operating condition on the Rent Commencement Date, and (ii) shall be constructed
in compliance in all material respects with the plans and specifications
developed pursuant to the Workletter and mutually approved (to the extent
required thereunder) by
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*CONFIDENTIAL TREATMENT REQUESTED
13
Landlord and Tenant, subject to any changes implemented in such plans and
specifications in accordance with the procedures set forth in the Workletter. If
it is determined that this warranty has been violated in any respect, then it
shall be the obligation of Landlord, after receipt of written notice from Tenant
setting forth with specificity the nature of the violation, to promptly, at
Xxxxxxxx's sole cost, correct the condition(s) constituting such violation.
Tenant's failure to give such written notice to Landlord within one (1) year
after the Rent Commencement Date shall give rise to a conclusive presumption
that Landlord has complied with all Landlord's obligations hereunder, except
with respect to latent defects (as to which such one-year limitation shall not
apply). Without limiting the scope of Landlord's obligations under the foregoing
provisions of this Section 5.2, Landlord also agrees to either (x) use its best
reasonable efforts to enforce when and as necessary, for the benefit of Tenant
and the Improvements, any and all contractor's and/or manufacturer's warranties
extending more than one (1) year after the Rent Commencement Date with respect
to any of Landlord's Work or, at Tenant's request, (y) assign any or all of such
warranties to Tenant for enforcement purposes. TENANT ACKNOWLEDGES THAT THE
FOREGOING WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, WITH
RESPECT TO THE PHYSICAL CONDITION OF THE IMPROVEMENTS TO BE CONSTRUCTED BY
LANDLORD AND THAT LANDLORD MAKES NO OTHER WARRANTIES EXCEPT AS EXPRESSLY SET
FORTH IN THIS LEASE.
5.3 Compliance with Law. Landlord warrants to Tenant that the Building
Shell and other Improvements constructed by Landlord (when constructed), as they
exist on the Rent Commencement Date, but without regard to the use for which
Tenant will occupy the Property, shall not violate any covenants or restrictions
of record or any applicable law, building code, regulation or ordinance in
effect on the Rent Commencement Date. Tenant warrants to Landlord that the
Tenant Improvements and any other improvements constructed by Tenant from time
to time shall not violate any applicable law, building code, regulation or
ordinance in effect on the Rent Commencement Date or at the time such
improvements are placed in service. If it is determined that any of these
warranties has been violated, then it shall be the obligation of the warranting
party, after written notice from the other party, to correct the condition(s)
constituting such violation promptly, at the warranting party's sole cost and
expense. Tenant acknowledges that except as expressly set forth in this Lease,
neither Landlord nor any agent of Landlord has made any representation or
warranty as to the present or future suitability of the Property or Improvements
for the conduct of Xxxxxx's business or proposed business thereon.
14
6. EXPANSION OPTIONS
6.1 Adjacent Property Lock-Up. The parties acknowledge that at Tenant's
request and in order to make available to Tenant the expansion rights
contemplated in this Article 6, Xxxxxxxx agrees to attempt to acquire the real
property designated as "Adjacent Property" on the Site Plan (the "Adjacent
Property"), and that such acquisition may [...*...] or other assistance from
[...*...] (as contemplated in Section 2.1(b) hereof). If Landlord acquires the
Adjacent Property at any time during the period from the date of this Lease
until [...*...] after the Rent Commencement Date, then (i) Tenant shall have
certain expansion options with respect to the Adjacent Property, as more
particularly set forth in Section 6.3 hereof, and (ii) until all such expansion
options under Section 6.3 hereof have lapsed, terminated, expired or been
exercised (the "Lock-Up Period"), Landlord shall refrain from entering into an
agreement with any person or entity other than Tenant for the sale or leasing of
the Adjacent Property or of any buildings constructed thereon (provided,
however, that nothing in this Article 6 shall restrict Landlord's right to
construct and lease to one or more third parties a building or buildings in the
southerly portion of the Adjacent Property, as shown on the Site Plan, so long
as Landlord retains the ability, under existing land use restrictions and
requirements, to build at least [...*...] square feet of space for Tenant in the
northerly portion of the Adjacent Property as shown on the Site Plan). Failure
of Tenant to exercise its expansion option(s) on or before the applicable
deadline under Section 6.3 shall result in the lapse or expiration of such
expansion option(s) and the termination of all further rights of Tenant under
this Article 6.
6.2 Lock-Up Consideration. As consideration for Landlord's willingness
to agree to the restrictions set forth in clause (ii) of Section 6.1 for the
duration of the Lock-Up Period, Tenant shall pay or reimburse to Landlord
[...*...] of all reasonable carrying costs incurred by Landlord in connection
with the Adjacent Property during or with respect to the Lock-Up Period
(collectively, "Carrying Costs"), including (but not limited to) (i) interest
expense at the Bank of America prime rate on Landlord's acquisition costs for
the Adjacent Property, (ii) interest expense at the Bank of America prime rate
on Landlord's costs incurred prior to or during the Lock-Up Period for any
construction of utilities, Common Area improvements and other infrastructure
improvements (but not for construction of any buildings) on the Adjacent
Property, and (iii) real property taxes, assessments and insurance on or
allocable to the Adjacent Property; provided, however, that Landlord's Carrying
Costs shall be reduced or offset by the amount of net income, if any, derived by
Landlord from the Adjacent Property during the applicable portion of the Lock-Up
Period from any leasing of any portion of the Adjacent Property to any tenant
other than Tenant. Tenant shall pay Landlord's estimated Carrying Costs during
the Lock-Up Period in advance, on a quarterly basis, as follows: When Landlord
acquires the Adjacent Property, Landlord shall give Tenant prompt written notice
of such acquisition and shall accompany such notice with Xxxxxxxx's written
estimate, in reasonable detail, of the Carrying Costs for the period ending at
the end of the then current calendar quarter. Within fifteen (15) days after
receipt of such notice, Tenant shall pay the amount of such estimated
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*CONFIDENTIAL TREATMENT REQUESTED
15
Carrying Costs to Landlord. Thereafter, on or about the first day of each
calendar quarter during the Lock-Up Period, Landlord shall give Tenant a further
written estimate, in reasonable detail, of the Carrying Costs for such upcoming
calendar quarter and Tenant shall pay the amount of such estimated Carrying
Costs to Landlord within fifteen (15) days after receipt of such notice. Within
fifteen (15) days after the end of each calendar quarter during the Lock-Up
Period, Landlord shall notify Tenant in writing of Landlord's actual Carrying
Costs for such calendar quarter, and within ten (10) days after such notice
either (i) Tenant shall pay Landlord the amount by which such actual Carrying
Costs exceeded the estimated Carrying Costs paid by Tenant for such calendar
quarter or (ii) Landlord shall pay Tenant the amount by which the estimated
Carrying Costs paid by Tenant exceeded the actual Carrying Costs for such
calendar quarter. If taxes or other Carrying Costs allocable to any calendar
quarter are increased or decreased (for example, by a tax reduction or
additional tax assessment) following completion of the reconciliation process
described in the preceding sentence, Landlord shall promptly notify Tenant in
writing of such further increase or decrease and the parties shall make any
further adjustment payments in cash in the same manner contemplated in the
preceding sentence. Failure of Tenant to make any payment when due under this
Section 6.2 shall be deemed a material default by Tenant and shall, if not cured
within ten (10) days after Xxxxxx's receipt of written notice of default from
Landlord, entitle Landlord, at its election and in its sole discretion, to
declare the expansion options terminated and of no further force and effect; the
existence of such termination right, however, shall be without prejudice to any
other remedies available to Landlord under this Lease or under applicable law
with respect to Tenant's breach, including (but not limited to) the right to
seek money damages from Tenant for Xxxxxx's nonpayment of Carrying Costs. The
allocation to Tenant of [...*...] of the Carrying Costs for the Adjacent
Property is based on the assumption that approximately [...*...] square feet of
buildings will be constructed on the Adjacent Property, of which [...*...]
square feet will constitute Tenant's expansion space subject to Section 6.3, but
this allocation is not intended to be mathematically exact or to fluctuate with
minor changes in the size, design or location of the buildings planned for or
actually constructed on the Adjacent Property.
6.3 Exercise of Phase II Expansion Options. Contingent upon Landlord's
acquisition of the Adjacent Property, Tenant shall have the right, on the terms
and conditions set forth in this Section 6.3 and subject to the provisions of
Section 4.1(d) above, to elect to have Landlord construct, for occupancy by
Tenant as expansion space, up to [...*...] square feet of space in new two-story
buildings to be constructed by Landlord at the northerly end of the Adjacent
Property. The Site Plan attached hereto designates as "Phase II" two buildings
of [...*...] square feet and [...*...] square feet, respectively; those building
sizes and locations are illustrative only, and are not to be construed as being
binding on Landlord or Tenant.
(a) At any time within the period beginning on the later of
the Rent Commencement Date or the date on which Landlord acquires the Adjacent
Property and ending on the date which is [...*...] after the Rent Commencement
Date (the "Phase IIA Option
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*CONFIDENTIAL TREATMENT REQUESTED
16
Period"), Tenant shall have the right (the "Phase IIA Expansion Option") to
elect by written notice to Landlord to occupy up to [...*...] square feet of
space in the building(s) to be constructed at the northerly end of the Adjacent
Property (the quantity of space thus designated by Tenant being hereinafter
called the "Phase IIA Expansion Premises"). There is no minimum size for the
Phase IIA Expansion Premises, but if the size of the Phase IIA Expansion
Premises as designated by Tenant is not at least [...*...] square feet, then the
Phase IIB Expansion Option shall not come into effect and Tenant shall have no
further expansion options hereunder. If Tenant timely exercises the Phase IIA
Expansion Option, then Landlord and Tenant shall negotiate diligently and in
good faith toward a new lease or lease amendment covering the Phase IIA
Expansion Premises in accordance with Section 6.3(c) hereof.
(b) At any time within the period beginning on the date of
expiration of the Phase IIA Option Period and ending on the date which is
[...*...] thereafter (the "Phase IIB Option Period"), if Tenant timely exercised
the Phase IIA Expansion Option for at least [...*...] square feet and for less
than [...*...] square feet of space, Tenant shall have the right (the "Phase IIB
Expansion Option") to elect by further written notice to Landlord to occupy
additional space in an amount up to the difference between the size of the Phase
IIA Expansion Premises and [...*...] square feet, again to be located in the
building(s) to be constructed at the northerly end of the Adjacent Property (the
quantity of space thus designated by Tenant in such further notice being
hereinafter called the "Phase IIB Expansion Premises"). If Tenant timely
exercises the Phase IIB Expansion Option, then Landlord and Tenant shall
negotiate diligently and in good faith toward a new lease or lease amendment
covering the Phase IIB Expansion Premises in accordance with Section 6.3(c)
hereof. If Tenant does not timely exercise the Phase IIB Expansion Option or
does not exercise that option in such a way that the aggregate size of the Phase
IIA Expansion Premises and the Phase IIB Expansion Premises is [...*...] square
feet, then Tenant's unexercised expansion rights shall lapse or expire at the
end of the Phase IIB Option Period and shall be of no further force or effect.
Notwithstanding any other provisions of this Article 6, (i) during the Phase IIB
Option Period, Tenant's obligation with respect to payment of Carrying Costs
shall be reduced to the fraction or percentage calculated by dividing the size
of the space remaining available pursuant to the Phase IIB Expansion Option by
[...*...] square feet, and (ii) to the extent Tenant designates a size of
[...*...] square feet or more for the Phase IIA Expansion Premises and/or the
Phase IIB Expansion Premises, Tenant shall be entitled to have each such phase
constituting [...*...] square feet or more designed as a stand-alone building
with Tenant as the sole occupant.
(c) The parties contemplate that except as Landlord and Tenant
may otherwise agree at the time, the general structure of a lease or lease
amendment for the Phase IIA Expansion Premises and/or the Phase IIB Expansion
Premises, as applicable, shall include Landlord's construction of a building
shell or shells on substantially the same economic terms applicable to the
Initial Building (as reflected in this Lease), but adjusted to take into account
changes in costs of land acquisition, costs of construction and cost of money
(determined by
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*CONFIDENTIAL TREATMENT REQUESTED
17
reference to changes in the Bank of America prime rate). The location of such
building(s) shall be determined by Landlord in its reasonable discretion;
Landlord agrees to give reasonable consideration to Xxxxxx's then current needs
and future plans (as communicated to Landlord at the time) in planning the
location of the expansion building(s), but the final decision with respect
thereto shall be Landlord's. The construction and financing of interior tenant
improvements in the expansion building(s) shall be open for negotiation between
Landlord and Tenant; Landlord is not required to agree to construct or fund
tenant improvements and Tenant is not required to agree to have Landlord
construct or fund them, except that Landlord agrees, if Tenant so requests, to
finance construction of tenant improvements of a nature and quality generally
comparable to those to be constructed in the Initial Building on the same
[...*...] basis provided in this Lease for the Tenant Improvements in the
Initial Building. The rent structure for the Phase IIA Expansion Premises or
Phase IIB Expansion Premises, as applicable, shall take into account, in
addition to the cost factors mentioned above, any required construction or
funding of tenant improvements by Landlord, and shall also reflect any changes
in Tenant's financial condition at that time. Stock warrants with respect to the
expansion premises shall be issuable in accordance with Section 4.1(b) or (c)
hereof, as applicable. The lease term for the Phase IIA Expansion Premises or
Phase IIB Expansion Premises, as applicable, shall be fifteen (15) years; in
order to provide for coterminous lease terms, (i) upon execution of a lease or
lease amendment for the Phase IIA Expansion Premises, the Termination Date for
this Lease with respect to the Initial Building under Section 2.1 hereof shall
be deemed to be extended until the expiration date for the 15-year term for the
Phase IIA Expansion Premises, with all other terms of this Lease relating to the
Initial Building to remain the same (and with minimum rental to remain fixed at
the level applicable immediately prior to commencement of the extension period),
and (ii) upon execution of a lease or lease amendment for the Phase IIB
Expansion Premises, the Termination Date for this Lease with respect to the
Initial Building under Section 2.1 hereof and the termination date for the Phase
IIA Expansion Premises shall be deemed to be extended until the expiration date
for the 15-year term for the Phase IIB Expansion Premises, with all other terms
of this Lease relating to the Initial Building and all terms of the lease or
lease amendment with respect to the Phase IIA Expansion Premises to remain the
same (and with minimum rental to remain fixed in both cases at the level
applicable immediately prior to commencement of the extension period).
7. REFUSAL RIGHTS WITH RESPECT TO LEASES
7.1 Refusal Rights.
(a) If Landlord intends during the term of this Lease to lease
all or any portion of the Refusal Space (as hereinafter defined), and if Tenant
is not then in material default (beyond any applicable cure periods) under this
Lease (for which purpose, without limitation, any event of default under Section
18.1 hereof shall be considered "material"), Landlord shall
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*CONFIDENTIAL TREATMENT REQUESTED
18
first give written notice of such intention to Tenant, specifying the material
terms on which Landlord proposes to lease the Refusal Space or portion thereof
(the "Offered Space"), and shall offer to Tenant the opportunity to lease the
Offered Space on the terms specified in Landlord's notice. Tenant shall have
seven (7) business days after the date of Xxxxxx's receipt of such notice from
Landlord in which to accept such offer by written notice to Landlord. Upon such
acceptance by Tenant, the Offered Space shall be leased to Tenant on the terms
set forth in Landlord's notice and on the additional terms and provisions set
forth herein (except to the extent inconsistent with the terms set forth in
Landlord's said notice), and the parties shall promptly execute an amendment to
this Lease adding the Offered Space to the premises covered by this Lease and
making any appropriate amendments to provisions of this Lease to reflect
different rent and other obligations applicable to the Offered Space under the
terms of Landlord's said notice. If Xxxxxx does not accept Xxxxxxxx's offer
within the allotted time, Landlord shall thereafter have the right to lease the
Offered Space to a third party, at any time within [...*...] days after Tenant's
failure to accept Landlord's offer, at a minimum rental and on other terms and
conditions not more favorable to the lessee than the minimum rental and other
terms offered to Tenant in said Landlord's notice. If Xxxxxx does not accept
Xxxxxxxx's offer and Landlord does not lease the Offered Space to a third party
within [...*...] days, Xxxxxx's refusal right under this Section 7.1 shall
reattach to that space.
(b) For purposes of this Section 7.1, the areas constituting
the "Refusal Space" and the priority of Xxxxxx's refusal rights with respect to
such areas are as follows:
(i) Until the later of December 31, 1997 or the date
Landlord enters into an unconditional binding contract or contracts for
the acquisition of the Adjacent Property (as defined in Section 6.1
hereof in connection with Tenant's expansion rights), the Refusal Space
shall include any and all space in the new building to be constructed
in the area marked as "Alternate Expansion" (Building C) on the Site
Plan; after the later of the dates specified in this subparagraph, such
Building C space shall no longer constitute part of the Refusal Space
and Tenant shall have no further refusal rights with respect thereto.
Notwithstanding any other provisions of this Section 7.1, Xxxxxx's
refusal right with respect to the Building C portion of the Refusal
Space is a second refusal right, junior in priority to existing rights
in favor of Cor Therapeutics, Inc.
(ii) Until the date Landlord enters into an
unconditional binding contract or contracts for the acquisition of the
Adjacent Property (as defined in Section 6.1 hereof in connection with
Tenant's expansion rights), the Refusal Space shall include any and all
space in the existing buildings designated as Buildings D, E, F and G
on the Site Plan; after the date specified in this subparagraph, such
Building D, E, F and G space shall no longer constitute part of the
Refusal Space and Tenant shall have no further refusal rights with
respect thereto. Notwithstanding any other provisions of this Section
7.1, Xxxxxx's refusal right with respect to the Building D, E, F and G
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*CONFIDENTIAL TREATMENT REQUESTED
19
portion of the Refusal Space is junior in priority to all existing
rights in favor of Cor Therapeutics, Inc. and/or in favor of any other
existing tenants of the Center.
(iii) If Landlord acquires the Adjacent Property (as
defined in Section 6.1 hereof in connection with Tenant's expansion
rights) and Tenant timely exercises its Phase IIA Expansion Option
under Section 6.3(a) hereof for at least [...*...] square feet of space
on the Adjacent Property, then after the expiration of the Phase IIB
Option Period as defined in Section 6.3(b) hereof, the Refusal Space
shall include any and all space not already occupied by Tenant in the
buildings existing from time to time on the Adjacent Property. Xxxxxx's
refusal right with respect to buildings located from time to time on
the Adjacent Property is a first refusal right and is not junior in
priority to any other existing rights in favor of any other person or
entity.
(iv) For purposes of this Section 7.1(b), a contract
for acquisition of the Adjacent Property or any portion thereof shall
be deemed to be "unconditional" when all "due diligence" conditions
have been waived and the contract remains subject only to conditions
that are customarily satisfied only at the closing date, including (but
not limited to) conditions relating to the seller's delivery of title
and the title company's issuance of a title policy insuring Landlord's
title as buyer subject only to the permitted exceptions defined in the
purchase contract.
8. TAXES
8.1 Personal Property. Tenant shall be responsible for and shall pay
prior to delinquency all taxes and assessments levied against or by reason of
(a) any and all alterations, additions and items installed or placed on the
Property and taxed as personal property rather than as real property, and/or (b)
all personal property, trade fixtures and other property placed by Xxxxxx on or
about the Property. Upon request by Xxxxxxxx, Tenant shall furnish Landlord with
satisfactory evidence of Xxxxxx's payment thereof. If at any time during the
term of this Lease any of said alterations, additions or personal property,
whether or not belonging to Tenant, shall be taxed or assessed as part of the
Center, then such tax or assessment shall be paid by Tenant to Landlord within
fifteen (15) days after presentation by Landlord of copies of the tax bills in
which such taxes and assessments are included and shall, for the purposes of
this Lease, be deemed to be personal property taxes or assessments under this
Section 8.1.
8.2 Real Property. To the extent any real property taxes and
assessments on the Property (including, but not limited to, the Improvements)
are assessed directly to Tenant, Tenant shall be responsible for and shall pay
prior to delinquency all such taxes and assessments levied against the Property.
Upon request by Xxxxxxxx, Tenant shall furnish Landlord with satisfactory
evidence of Xxxxxx's payment thereof. To the extent the Property and/or
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*CONFIDENTIAL TREATMENT REQUESTED
20
Improvements are taxed or assessed to Landlord following the Rent Commencement
Date, such real property taxes and assessments shall constitute Operating
Expenses (as that term is defined in Section 9.2 of this Lease) and shall be
paid in accordance with the provisions of Article 9 of this Lease.
9. OPERATING EXPENSES
9.1 Payment Of Operating Expenses.
(a) Tenant shall pay to Landlord, at the time and in the
manner hereinafter set forth, as additional rental, an amount equal to [...*...]
("Tenant's Operating Cost Share") of the Operating Expenses defined in Section
9.2.
(b) Tenant's Operating Cost Share as specified in paragraph
(a) of this Section is based upon an estimated area of [...*...] square feet for
the Initial Building and upon an aggregate area of [...*...] square feet for the
existing buildings owned by Landlord in the Center (Buildings D, E, F and G) and
the two additional buildings that Landlord is committed to build in the Center
(the Initial Building and Building H, as designated on the Site Plan). If the
actual area of the Initial Building (when completed), of the premises covered by
this Lease or of the buildings owned from time to time by Landlord in the
Center, as determined in good faith by Xxxxxxxx's architect on the basis of
measurement set forth in Section 3.1(b) hereof, differs from the assumed numbers
set forth above, then Xxxxxx's Operating Cost Share shall be adjusted to reflect
the actual areas so determined.
(c) If Landlord constructs additional buildings in the Center,
on the Adjacent Property or on any other adjacent property owned by Landlord and
operated, for common area purposes, on an integrated basis with the Center from
time to time, Tenant's Operating Cost Share shall be adjusted to be equal to the
percentage determined by dividing the gross square footage of the Initial
Building as it then exists by the gross square footage of all buildings located
in the Center, on the Adjacent Property or on any applicable adjacent property
owned by Landlord as described above. In determining said percentage, a building
shall be taken into account from and after the date on which a tenant first
enters into possession of the building or a portion thereof, and the good faith
determination of the gross square footage of any such building by Xxxxxxxx's
architects shall be final and binding upon the parties.
9.2 Definition Of Operating Expenses.
(a) Subject to the exclusions and provisions hereinafter
contained, the term "Operating Expenses" shall mean the total costs and expenses
incurred by or allocable to Landlord for management, operation and maintenance
of the Improvements, the Property and
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*CONFIDENTIAL TREATMENT REQUESTED
21
the Center, including, without limitation, costs and expenses of (i) insurance
(which may include, at Landlord's option, earthquake insurance as part of or in
addition to any casualty or property insurance policy), property management,
landscaping, and the operation, repair and maintenance of buildings and Common
Areas; (ii) all utilities and services; (iii) real and personal property taxes
and assessments or substitutes therefor levied or assessed against the Center or
any part thereof, including (but not limited to) any possessory interest, use,
business, license or other taxes or fees, any taxes imposed directly on rents or
services, any assessments or charges for police or fire protection, housing,
transit, open space, street or sidewalk construction or maintenance or other
similar services from time to time by any governmental or quasi-governmental
entity, and any other new taxes on landlords in addition to taxes now in effect;
(iv) supplies, equipment, utilities and tools used in management, operation and
maintenance of the Center; (v) capital improvements to the Property, the
Improvements or the Center, amortized over a reasonable period, (aa) which
reduce or will cause future reduction of other items of Operating Expenses for
which Tenant is otherwise required to contribute or (bb) which are required by
law, ordinance, regulation or order of any governmental authority or (cc) of
which Tenant has use or which benefit Tenant; and (vi) any other costs
(including, but not limited to, any parking or utilities fees or surcharges)
allocable to or paid by Landlord, as owner of the Center or Improvements,
pursuant to any applicable laws, ordinances, regulations or orders of any
governmental or quasi-governmental authority or pursuant to the terms of any
declarations of covenants, conditions and restrictions now or hereafter
affecting the Center or over which Tenant has non-exclusive usage rights as
contemplated in Section 1.1(b) hereof. Operating Expenses shall not include any
costs attributable to the work for which Landlord is required to pay under
Article 5 or Exhibit C, nor any costs attributable to the initial construction
of buildings or Common Area improvements in the Center. The distinction between
items of ordinary operating maintenance and repair and items of a capital nature
shall be made in accordance with generally accepted accounting principles
applied on a consistent basis or in accordance with tax accounting principles,
as determined in good faith by Xxxxxxxx's accountants.
(b) Notwithstanding anything to the contrary contained in this
Lease, the following shall not be included within Operating Expenses:
(i) Costs of maintenance or repair of the roof
membrane for any building within the Center, except during periods (if any) in
which costs of maintenance or repair of the roof membrane for the building(s)
occupied by Tenant pursuant to this Lease are likewise included as an Operating
Expense (rather than being incurred directly by Tenant or passed through
directly to Tenant on a building-by-building basis);
(ii) Leasing commissions, attorneys' fees, costs,
disbursements, and other expenses incurred in connection with negotiations or
disputes with tenants, or in connection with leasing, renovating or improving
space for tenants or other occupants or prospective tenants or other occupants
of the Center;
22
(iii) The cost of any service sold to any tenant
(including Tenant) or other occupant for which Landlord is entitled to be
reimbursed as an additional charge or rental over and above the basic rent and
operating expenses payable under the lease with that tenant;
(iv) Any depreciation on the Initial Building or on
any other improvements in the Center;
(v) Expenses in connection with services or other
benefits of a type that are not offered or made available to Tenant but that are
provided to another tenant of the Center;
(vi) Costs incurred due to Landlord's violation of
any terms or conditions of this Lease or of any other lease relating to the
Initial Building or to any other portion of the Center or the Property;
(vii) Overhead profit increments paid to any
subsidiary or affiliate of Landlord for management or other services on or to
the Center or any portion thereof or for supplies or other materials to the
extent that the cost of the services, supplies or materials exceeds the cost
that would have been paid had the services, supplies or materials been provided
by unaffiliated parties on a competitive basis;
(viii) All interest, loan fees and other carrying
costs related to any mortgage or deed of trust or related to any capital item,
and all rental and other amounts payable under any ground or underlying lease,
or under any lease for any equipment ordinarily considered to be of a capital
nature (except (A) janitorial equipment which is not affixed to the Building
and/or (B) equipment the cost of which, if purchased, would be considered an
amortizable Operating Expense under the provisions of this Section 9.2,
notwithstanding the capital nature of such equipment);
(ix) Any compensation paid to clerks, attendants or
other persons in commercial concessions operated by Landlord;
(x) Advertising and promotional expenditures;
(xi) Costs of repairs and other work occasioned by
fire, windstorm or other casualty of an insurable nature, except to the extent
of any applicable deductible amounts under insurance actually carried by
Landlord;
(xii) Any costs, fines or penalties incurred due to
violations by Landlord of any governmental rule or authority or of this Lease or
any other lease of any portion of the Center or the Property, or due to
Landlord's negligence or willful misconduct;
23
(xiii) Management costs to the extent they exceed a
reasonable and competitive rate for such services in the market for management
of comparable commercial properties in the San Francisco Bay Area;
(xiv) Costs for sculpture, paintings or other objects
of art, and for any insurance thereon or extraordinary security in connection
therewith;
(xv) Wages, salaries or other compensation paid to
any executive employees above the grade of building manager;
(xvi) The cost of correcting any building code or
other violations which were violations prior to the Rent Commencement Date;
(xvii) The cost of containing, removing or otherwise
remediating any contamination of the Property (including the underlying land and
groundwater) by any toxic or hazardous materials (including, without limitation,
asbestos and PCBs); and
(xviii) Premiums for earthquake insurance coverage,
but only to the extent (if any) that such premiums exceed, in any applicable
period, a commercially reasonable rate, taking into account all relevant factors
(including, but not limited to, the nature, size and location of the Center, the
nature and value of the improvements therein that are owned by or insurable by
Landlord, and the general availability and cost of commercial earthquake
insurance in the insurance markets existing from time to time during the term of
this Lease).
9.3 Determination Of Operating Expenses. On or before the Rent
Commencement Date and during the last month of each calendar year of the term of
this Lease ("Lease Year"), or as soon thereafter as practical, Landlord shall
provide Tenant notice of Landlord's estimate of the Operating Expenses for the
ensuing Lease Year or applicable portion thereof. On or before the first day of
each month during the ensuing Lease Year or applicable portion thereof,
beginning on the Rent Commencement Date, Tenant shall pay to Landlord Tenant's
Operating Cost Share of the portion of such estimated Operating Expenses
allocable (on a prorata basis) to such month; provided, however, that if such
notice is not given in the last month of a Lease Year, Tenant shall continue to
pay on the basis of the prior year's estimate, if any, until the month after
such notice is given. If at any time or times it appears to Landlord that the
actual Operating Expenses will vary from Landlord's estimate by more than
[...*...], Landlord may, by notice to Tenant, revise its estimate for such year
and subsequent payments by Tenant for such year shall be based upon such revised
estimate.
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*CONFIDENTIAL TREATMENT REQUESTED
24
9.4 Final Accounting For Lease Year.
(a) Within ninety (90) days after the close of each Lease
Year, or as soon after such 90-day period as practicable, Landlord shall deliver
to Tenant a statement of Tenant's Operating Cost Share of the Operating Expenses
for such Lease Year prepared by Landlord from Landlord's books and records,
which statement shall be final and binding on Landlord and Tenant (except as
provided in Section 9.4(b)). If on the basis of such statement Tenant owes an
amount that is more or less than the estimated payments for such Lease Year
previously made by Tenant, Tenant or Landlord, as the case may be, shall pay the
deficiency to the other party within thirty (30) days after delivery of the
statement. Failure or inability of Landlord to deliver the annual statement
within such ninety (90) day period shall not impair or constitute a waiver of
Tenant's obligation to pay Operating Expenses, or cause Landlord to incur any
liability for damages.
(b) At any time within three (3) months after receipt of
Landlord's annual statement of Operating Expenses as contemplated in Section
9.4(a), Tenant shall be entitled, upon reasonable written notice to Landlord and
during normal business hours at Landlord's office or such other places as
Landlord shall designate, to inspect and examine those books and records of
Landlord relating to the determination of Operating Expenses for the immediately
preceding Lease Year covered by such annual statement or, if Tenant so elects by
written notice to Landlord, to request an independent audit of such books and
records. The independent audit of the books and records shall be conducted by a
certified public accountant acceptable to both Landlord and Tenant or, if the
parties are unable to agree, by a certified public accountant appointed by the
Presiding Judge of the San Mateo County Superior Court upon the application of
either Landlord or Tenant (with notice to the other party). In either event,
such certified public accountant shall be one who is not then employed in any
capacity by Landlord or Tenant or by any of their respective affiliates. The
audit shall be limited to the determination of the amount of Operating Expenses
for the subject Lease Year, and shall be based on generally accepted accounting
principles and tax accounting principles, consistently applied. If it is
determined, by mutual agreement of Landlord and Tenant or by independent audit,
that the amount of Operating Expenses billed to or paid by Tenant for the
applicable Lease Year was incorrect, then the appropriate party shall pay to the
other party the deficiency or overpayment, as applicable, within thirty (30)
days after the final determination of such deficiency or overpayment. All costs
and expenses of the audit shall be paid by Tenant unless the audit shows that
Landlord overstated Operating Expenses for the subject Lease Year by more than
[...*...], in which case Landlord shall pay all costs and expenses of the audit.
Each party agrees to maintain the confidentiality of the findings of any audit
in accordance with the provisions of this Section 9.4.
9.5 Proration. If the Rent Commencement Date falls on a day other than
the first day of a Lease Year or if this Lease terminates on a day other than
the last day of a Lease Year, the
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*CONFIDENTIAL TREATMENT REQUESTED
25
amount of Operating Expenses payable by Tenant with respect to such first or
last partial Lease Year shall be prorated on the basis which the number of days
during such Lease Year in which this Lease is in effect bears to 365. The
termination of this Lease shall not affect the obligations of Landlord and
Tenant pursuant to Section 9.4 to be performed after such termination.
10. UTILITIES
10.1 Payment. Commencing with the Rent Commencement Date and thereafter
throughout the term of this Lease, Tenant shall pay, before delinquency, all
charges for water, gas, heat, light, electricity, power, sewer, telephone, alarm
system, janitorial and other services or utilities supplied to or consumed in or
upon the Property (other than any separately metered costs for water,
electricity or other services or utilities furnished with respect to the Common
Areas, which costs shall be paid by Landlord and shall constitute Operating
Expenses under Section 9.2 hereof), including any taxes on such services and
utilities. It is the intention of the parties that all such services shall be
separately metered to the Property. In the event that any of such services
supplied to the Property are not separately metered, then the amount thereof
shall be an item of Operating Expenses and shall be paid as provided in Article
9.
10.2 Interruption. There shall be no abatement of rent or other charges
required to be paid hereunder and Landlord shall not be liable in damages or
otherwise for interruption or failure of any service or utility furnished to or
used on the Property because of accident, making of repairs, alterations or
improvements, severe weather, difficulty or inability in obtaining services or
supplies, labor difficulties or any other cause. Notwithstanding the foregoing
provisions of this Section 10.2, however, in the event of any interruption or
failure of any service or utility to the Premises that (i) is caused in whole or
in material part by the active negligence or willful misconduct of Landlord or
its agents or employees and (ii) continues for more than three (3) business days
and (iii) materially impairs Tenant's ability to use the Premises for their
intended purposes hereunder, then following such three (3) business day period,
Xxxxxx's obligations for payment of rent and other charges under this Lease
shall be abated in proportion to the degree of impairment of Tenant's use of the
Premises, and such abatement shall continue until Xxxxxx's use of the Premises
is no longer materially impaired thereby.
11. ALTERATIONS; SIGNS
11.1 Right To Make Alterations. Tenant shall make no alterations,
additions or improvements to the Initial Building or the Property, other than
interior non-structural alterations costing less than [...*...] in the aggregate
during any twelve (12) month period, without the prior written consent of
Landlord, which consent shall not be unreasonably withheld or delayed. All such
alterations, additions and improvements shall be completed with due diligence in
a first-
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*CONFIDENTIAL TREATMENT REQUESTED
26
class workmanlike manner, in compliance with plans and specifications approved
in writing by Landlord and in compliance with all applicable laws, ordinances,
rules and regulations. Tenant shall cause any contractors engaged by Tenant for
work in the Initial Building or on the Property to maintain public liability and
property damage insurance, and other customary insurance, with such terms and in
such amounts as Landlord may reasonably require, naming as additional insureds
Landlord and any of its partners, shareholders, property managers and lenders
designated by Landlord for this purpose, and shall furnish Landlord with
certificates of insurance or other evidence that such coverage is in effect. In
addition, Tenant covenants and agrees that all contractors and subcontractors at
any tier performing any tenant improvements, build-out, alterations, additions,
improvements, renovations, repairs and/or installations of fixtures or other
equipment, or with respect to any other construction work in, on or to the
Premises shall (i) be bound by and signatory to a collective bargaining
agreement with a labor organization (A) whose jurisdiction covers the type of
work to be performed on the Premises, and (B) who is affiliated with the
Building and Construction Trades Department of the AFL-CIO; and (ii) each such
contractor or subcontractor shall observe area standards for wages and other
terms and conditions of employment, including fringe benefits. Notwithstanding
any other provisions of this Section 11.1, under no circumstances shall Tenant
make any structural alterations or improvements, or any substantial changes to
the roof or substantial equipment installations on the roof, or any substantial
changes or alterations to the building systems, without Landlord's prior written
consent (which consent shall not be unreasonably withheld or delayed). If Tenant
so requests in seeking Xxxxxxxx's consent to any alterations, additions or
improvements, Landlord shall specify in granting such consent whether Landlord
intends to require that Tenant remove such alterations, additions or
improvements (or any specified portions thereof) upon expiration or termination
of this Lease. Landlord shall receive no fee for supervision, profit, overhead
or general conditions in connection with any alterations, additions or
improvements constructed or installed by Tenant under this Lease.
11.2 Title To Alterations. All alterations, additions and improvements
installed in, on or about the Initial Building or the Property shall become part
of the Property and shall become the property of Landlord, unless Landlord
elects to require Tenant to remove the same upon the termination of this Lease;
provided, however, that the foregoing shall not apply to Tenant's movable
furniture and equipment and trade fixtures. Tenant shall promptly repair any
damage caused by its removal of any such furniture, equipment or trade fixtures.
Notwithstanding any other provisions of this Article 11, however, (a) under no
circumstances shall Tenant have any right to remove from the Initial Building or
the Property, at the expiration or termination of this Lease, any lab benches,
fume hoods, cold rooms or other similar improvements and equipment installed in
the Initial Building, even if such equipment and improvements were installed by
Tenant and paid for by Tenant in cash or in the form of additional rent; and (b)
if Tenant requests Xxxxxxxx's written consent to any alterations, additions or
improvements under Section 11.1 hereof and, in requesting such consent, asks
that Landlord specify whether Landlord will require removal of such alterations,
additions or improvements upon termination or expiration of this Lease, then
Landlord shall not be entitled to require such removal unless
27
Landlord specified its intention to do so at the time of granting of Landlord's
consent to the requested alterations, additions or improvements.
11.3 Tenant Fixtures. Subject to the final sentence of Section 11.2 and
to Section 11.5, Tenant may install, remove and reinstall trade fixtures without
Landlord's prior written consent, except that installation and removal of any
fixtures which are affixed to the Initial Building or the Property or which
affect the exterior or structural portions of the Initial Building or the
building systems shall require Landlord's prior written approval, which approval
shall not be unreasonably withheld or delayed. Tenant shall immediately repair
any damage caused by installation and removal of fixtures under this Section
11.3.
11.4 No Liens. Tenant shall at all times keep the Initial Building and
the Property free from all liens and claims of any contractors, subcontractors,
materialmen, suppliers or any other parties employed either directly or
indirectly by Tenant in construction work on the Initial Building or the
Property. Tenant may contest any claim of lien, but only if, prior to such
contest, Tenant either (i) posts security in the amount of the claim, plus
estimated costs and interest, or (ii) records a bond of a responsible corporate
surety in such amount as may be required to release the lien from the Initial
Building and the Property. Tenant shall indemnify, defend and hold Landlord
harmless against any and all liability, loss, damage, cost and other expenses,
including, without limitation, reasonable attorneys' fees, arising out of claims
of any lien for work performed or materials or supplies furnished at the request
of Tenant or persons claiming under Tenant. Notwithstanding any other provisions
of this Lease, however, Tenant shall have the right to obtain third-party
financing for Tenant's share of the cost of the Tenant Improvements to be
constructed under the Workletter, and for any other equipment or improvements
installed or constructed by Tenant from time to time during the term of the
Lease, and in connection with such financing shall have the right to grant the
lender a lien on specific items of such Tenant Improvements, and/or on any such
other equipment or improvements, having an aggregate cost not greater than
Tenant's share of the total cost of the applicable Tenant Improvements,
equipment or other improvements; the specific items of such Tenant Improvements,
equipment or other improvements on which Tenant is authorized to grant such
liens shall be negotiated and approved in good faith by Landlord and Tenant,
promptly and diligently following any written request by Tenant from time to
time for identification of such items.
11.5 Signs. Tenant shall have the right to display its corporate name
and logo on the Initial Building and in front of the entrance to the Initial
Building, subject to Landlord's prior approval as to location, size, design and
composition (which approval shall not be unreasonably withheld or delayed),
subject to the established sign criteria for the Center and subject to all
restrictions and requirements of applicable law and of any covenants, conditions
and restrictions and other written agreements now or hereafter applicable to the
Property. Landlord is hereby deemed to have approved, as to location, any
signage the location of which is expressly designated on the Site Plan attached
hereto as Exhibit B or on any Approved Plan listed in or
28
developed pursuant to the Workletter, and Xxxxxxxx agrees that Tenant shall be
permitted to have exterior signage on at least two (2) sides of the Initial
Building (facing Highway 101 and facing East Grand Avenue), subject to all other
requirements and criteria set forth above in this Section 11.5.
12. MAINTENANCE AND REPAIRS
12.1 Landlord's Work.
(a) Landlord shall repair and maintain or cause to be repaired
and maintained the Common Areas of the Center and the roof (structural portions
only), exterior walls and other structural portions of the Initial Building. The
cost of all work performed by Landlord under this Section 12.1 shall be an
Operating Expense hereunder, except to the extent such work (i) is required due
to the negligence of Landlord, (ii) involves the repair or correction of a
condition or defect that Landlord is required to correct pursuant to Section 5.2
hereof, (iii) is a capital expense not includible as an Operating Expense under
Section 9.2 hereof, (iv) is required due to the negligence or willful misconduct
of Tenant or its agents, employees or invitees (in which event Tenant shall bear
the full cost of such work pursuant to the indemnification provided in Section
14.6 hereof, subject to the release set forth in Section 14.4 hereof). Tenant
knowingly and voluntarily waives the right to make repairs at Landlord's
expense, or to offset the cost thereof against rent, under any law, statute,
regulation or ordinance now or hereafter in effect.
(b) If Tenant so requests in writing, Landlord shall also
repair and maintain or cause to be repaired or maintained, on the same basis set
forth in Section 12.1(a), the roof membrane of the Initial Building; provided,
however, that the cost of such repair or maintenance shall not constitute an
Operating Expense hereunder, but shall instead be entirely allocated to and paid
by Tenant as the sole lessee of the Initial Building, except to the extent such
cost falls into one of the categories set forth in clauses (i) through (iii) of
Section 12.1(a), in which case Tenant shall to that extent have no liability or
obligation with respect thereto. Any such payment for which Tenant is
responsible under this Section 12.1(b) shall be paid by Tenant to Landlord in
cash within fifteen (15) days after Xxxxxx's receipt of Landlord's written
request for such payment, accompanied by invoices and other supporting
documentation reasonably evidencing the costs for which such payment is
requested.
12.2 Tenant's Obligation For Maintenance.
(a) Good Order, Condition And Repair. Except as provided in
Section 12.1 hereof, Tenant at its sole cost and expense shall keep and maintain
in good and sanitary order, condition and repair the Initial Building and every
part thereof, wherever located, including but not limited to the roof
(non-structural portions only), signs, interior, ceiling, electrical system,
plumbing system, telephone and communications systems of the Initial Building,
the HVAC
29
equipment and related mechanical systems serving the Initial Building (for which
equipment and systems Tenant shall enter into a service contract with a person
or entity designated or approved by Landlord), all doors, door checks, windows,
plate glass, door fronts, exposed plumbing and sewage and other utility
facilities, fixtures, lighting, wall surfaces, floor surfaces and ceiling
surfaces of the Initial Building and all other interior repairs, foreseen and
unforeseen, with respect to the Initial Building, as required.
(b) Landlord's Remedy. If Tenant, after notice from Landlord,
fails to make or perform promptly any repairs or maintenance which are the
obligation of Tenant hereunder, Landlord shall have the right, but shall not be
required, to enter the Property and make the repairs or perform the maintenance
necessary to restore the Property and the Initial Building to good and sanitary
order, condition and repair. Immediately on demand from Landlord, the cost of
such repairs shall be due and payable by Tenant to Landlord.
(c) Condition Upon Surrender. At the expiration or sooner
termination of this Lease, Tenant shall surrender the Initial Building and the
Improvements, including any additions, alterations and improvements thereto,
broom clean, in good and sanitary order, condition and repair, ordinary wear and
tear excepted, first, however, removing all goods and effects of Tenant and all
and fixtures and items required to be removed or specified to be removed at
Landlord's election pursuant to this Lease, and repairing any damage caused by
such removal. Tenant shall not have the right to remove fixtures or equipment if
Tenant is in default hereunder unless Landlord specifically waives this
provision in writing. Tenant expressly waives any and all interest in any
personal property and trade fixtures not removed from the Property by Tenant at
the expiration or termination of this Lease, agrees that any such personal
property and trade fixtures may, at Landlord's election, be deemed to have been
abandoned by Xxxxxx, and authorizes Landlord (at its election and without
prejudice to any other remedies under this Lease or under applicable law) to
remove and to retain, store or dispose of such property at Tenant's cost and
expense, and Xxxxxx waives all claims against Landlord for any damages resulting
from any such removal, storage, retention or disposal.
13. USE OF PROPERTY
13.1 Permitted Use. Subject to Sections 13.3, 13.4 and 13.6 hereof,
Tenant shall use the Initial Building solely for a laboratory research and
development facility, including (but not limited to) wet chemistry and biology
labs, clean rooms, pilot scale, clinical scale and GMP scale manufacturing,
storage and use of toxic and radioactive materials and laboratory animals,
administrative offices, and other lawful purposes reasonably related to or
incidental to such specified uses (subject in each case to receipt of all
necessary approvals from the City of South San Francisco and other governmental
agencies having jurisdiction over the Property), and for no other purpose.
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13.2 [Omitted.]
13.3 No Nuisance. Tenant shall not use the Property for or carry on or
permit upon the Property or any part thereof any offensive, noisy or dangerous
trade, business, manufacture, occupation, odor or fumes, or any nuisance or
anything against public policy, nor interfere with the rights or business of
Landlord in the Initial Building or the Property, nor commit or allow to be
committed any waste in, on or about the Property. Tenant shall not do or permit
anything to be done in or about the Property, nor bring nor keep anything
therein, which will in any way cause the Property or the Center to be
uninsurable with respect to any insurance required by this Lease or with respect
to standard fire and extended coverage insurance with vandalism, malicious
mischief and riot endorsements.
13.4 Compliance With Laws. Tenant shall not use the Property or permit
the Property or any other portion of the Center to be used in whole or in part
for any purpose or use that is in violation of any applicable laws, ordinances,
regulations or rules of any governmental agency or public authority. Tenant
shall keep the Improvements equipped with all safety appliances required by law,
ordinance or insurance on the Property, or any order or regulation of any public
authority because of Tenant's particular use of the Property. Tenant shall
procure all licenses and permits required for its use of the Property. Tenant
shall use the Property in strict accordance with all applicable ordinances,
rules, laws and regulations and shall comply with all requirements of all
governmental authorities now in force or which may hereafter be in force
pertaining to the use of the Property by Tenant, including, without limitation,
regulations applicable to noise, water, soil and air pollution, and making such
nonstructural alterations and additions thereto as may be required from time to
time by such laws, ordinances, rules, regulations and requirements of
governmental authorities or insurers of the Property (collectively,
"Requirements") because of Tenant's construction of improvements in or other
particular use of the Property. Any structural alterations or additions required
from time to time by applicable Requirements because of Tenant's construction of
improvements in the Initial Building or other particular use of the Property
shall, at Landlord's election, either (i) be made by Tenant, at Tenant's sole
cost and expense, in accordance with the procedures and standards set forth in
Section 11.1 for alterations by Tenant, or (ii) be made by Landlord at Tenant's
sole cost and expense, in which event Tenant shall pay to Landlord as additional
rent, within ten (10) days after demand by Landlord, an amount equal to all
costs incurred by Landlord in connection with such alterations or additions. The
judgment of any court, or the admission by Tenant in any proceeding against
Tenant, that Tenant has violated any law, statute, ordinance or governmental
rule, regulation or requirement shall be conclusive of such violation as between
Landlord and Tenant.
13.5 Liquidation Sales. Tenant shall not conduct or permit to be
conducted any auction, bankruptcy sale, liquidation sale, or going out of
business sale, in, upon or about the Property, whether said auction or sale be
voluntary, involuntary or pursuant to any assignment for the benefit of
creditors, or pursuant to any bankruptcy or other insolvency proceeding.
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13.6 Environmental Matters.
(a) For purposes of this Section, "hazardous substance" shall
mean the substances included within the definitions of the term "hazardous
substance" under (i) the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. xx.xx. 9601 et seq., and the
regulations promulgated thereunder, as amended, (ii) the California
Xxxxxxxxx-Xxxxxxx-Xxxxxx Hazardous Substance Account Act, California Health &
Safety Code xx.xx. 25300 et seq., and regulations promulgated thereunder, as
amended, (iii) the Hazardous Materials Release Response Plans and Inventory Act,
California Heath & Safety Code xx.xx. 25500 et seq., and regulations promulgated
thereunder, as amended, and (iv) petroleum; "hazardous waste" shall mean (i) any
waste listed as or meeting the identified characteristics of a "hazardous waste"
under the Resource Conservation and Recovery Act of 1976, 42 U.S.C. xx.xx. 6901
et seq., and regulations promulgated pursuant thereto, as amended (collectively,
"RCRA"), (ii) any waste meeting the identified characteristics of "hazardous
waste," "extremely hazardous waste" or "restricted hazardous waste" under the
California Hazardous Waste Control Law, California Health & Safety Code xx.xx.
25100 et seq., and regulations promulgated pursuant thereto, as amended
(collectively, the "CHWCL"), and/or (iii) any waste meeting the identified
characteristics of "medical waste" under California Health & Safety Code xx.xx.
25015-25027.8, and regulations promulgated thereunder, as amended; and
"hazardous waste facility" shall mean a hazardous waste facility as defined
under the CHWCL.
(b) Without limiting the generality of the obligations set
forth in Section 13.4 of this Lease:
(i) Tenant shall not cause or permit any hazardous
substance or hazardous waste to be brought upon, kept, stored or used in or
about the Property without the prior written consent of Landlord, which consent
shall not be unreasonably withheld, except that Tenant, in connection with its
permitted use of the Property as provided in Section 13.1, may keep, store and
use materials that constitute hazardous substances which are customary for such
permitted use, provided such hazardous substances are kept, stored and used in
quantities which are customary for such permitted use and are kept, stored and
used in full compliance with clauses (ii) and (iii) immediately below.
(ii) Tenant shall comply with all applicable laws,
rules, regulations, orders, permits, licenses and operating plans of any
governmental authority with respect to the receipt, use, handling, generation,
transportation, storage, treatment and/or disposal of hazardous substances or
wastes by Tenant or its agents or employees, and Tenant will provide Landlord
with copies of all permits, licenses, registrations and other similar documents
that authorize Tenant to conduct any such activities in connection with its
authorized use of the Property from time to time.
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(iii) Tenant shall not (A) operate on or about the
Property any facility required to be permitted or licensed as a hazardous waste
facility or for which interim status as such is required, nor (B) store any
hazardous wastes on or about the Property for ninety (90) days or more, nor (C)
conduct any other activities on or about the Property that could result in the
Property being deemed to be a "hazardous waste facility" (including, but not
limited to, any storage or treatment of hazardous substances or hazardous wastes
which could have such a result).
(iv) Tenant shall comply with all applicable laws,
rules, regulations, orders and permits relating to underground storage tanks
installed by Tenant or its agents or employees or at the request of Tenant
(including any installation, monitoring, maintenance, closure and/or removal of
such tanks) as such tanks are defined in California Health & Safety Code ss.
25281(x), including, without limitation, complying with California Health &
Safety Code xx.xx. 25280-25299.7 and the regulations promulgated thereunder, as
amended. Tenant shall furnish to Landlord copies of all registrations and
permits issued to or held by Tenant from time to time for any and all
underground storage tanks located on or under the Property.
(v) If applicable, Tenant shall provide Landlord in
writing the following information and/or documentation within fifteen (15) days
after the Rent Commencement Date, and shall update such information at least
annually, on or before each anniversary of the Rent Commencement Date, to
reflect any change in or addition to the required information and/or
documentation (provided, however, that in the case of the materials described in
subparagraphs (B), (C) and (E) below, Tenant shall not be required to deliver
copies of such materials to Landlord but shall maintain copies of such materials
to such extent and for such periods as may be required by applicable law and
shall permit Landlord or its representatives to inspect and copy such materials
during normal business hours at any time and from time to time upon reasonable
notice to Tenant):
(A) A list of all hazardous substances
and/or wastes that Tenant receives, uses, handles, generates, transports,
stores, treats or disposes of from time to time in connection with its
operations on the Property.
(B) All Material Safety Data Sheets
("MSDS's"), if any, required to be completed with respect to operations of
Tenant at the Property from time to time in accordance with Title 26, California
Code of Regulations ss. 8-5194 or 42 U.S.C. ss. 11021, or any amendments
thereto, and any Hazardous Materials Inventory Sheets that detail the MSDS's.
(C) All hazardous waste manifests (as
defined in Title 26, California Code of Regulations ss. 22-66481), if any, that
Tenant is required to complete from time to time in connection with its
operations at the Property.
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(D) A copy of any Hazardous Materials
Management Plan required from time to time with respect to Xxxxxx's operations
at the Property, pursuant to California Health & Safety Code xx.xx. 25500 et
seq., and any regulations promulgated thereunder, as amended.
(E) Any Contingency Plans and Emergency
Procedures required of Tenant from time to time due to its operations in
accordance with Title 26, California Code of Regulations xx.xx. 22-67140 et
seq., and any amendments thereto, and any Training Programs and Records required
under Title 26, California Code of Regulations, ss. 22-67105, and any amendments
thereto.
(F) Copies of any biennial reports to be
furnished to the California Department of Health Services from time to time
relating to hazardous substances or wastes, pursuant to Title 26, California
Code of Regulations, ss. 22-66493, and any amendments thereto.
(G) Copies of all industrial wastewater
discharge permits issued to or held by Tenant from time to time in connection
with its operations on the Property.
(H) Copies of any other lists or inventories
of hazardous substances and/or wastes on or about the Property that Tenant is
otherwise required to prepare and file from time to time with any governmental
or regulatory authority.
(vi) Tenant shall secure Xxxxxxxx's prior written
approval for any proposed receipt, storage, possession, use, transfer or
disposal of "radioactive materials" or "radiation," as such materials are
defined in Title 26, California Code of Regulations ss. 17-30100, and/or any
other materials possessing the characteristics of the materials so defined,
which approval Landlord may withhold in its sole and absolute discretion;
provided, that such approval shall not be required for any radioactive materials
for which Tenant has secured prior written approval of the Nuclear Regulatory
Commission and delivered to Landlord a copy of such approval. Tenant, in
connection with any such authorized receipt, storage, possession, use, transfer
or disposal of radioactive materials or radiation, shall:
(A) Comply with all federal, state and local
laws, rules, regulations, orders, licenses and permits issued to or applicable
to Tenant with respect to its business operations on the Property;
(B) Maintain, to such extent and for such
periods as may be required by applicable law, and permit Landlord and its
representatives to inspect during normal business hours at any time and from
time to time upon reasonable notice to Tenant, a list of all radioactive
materials or radiation received, stored, possessed, used, transferred or
disposed of by Tenant or in connection with the operation of Tenant's business
on the Property from time
34
to time, to the extent not already disclosed through delivery of a copy of a
Nuclear Regulatory Commission approval with respect thereto as contemplated
above; and
(C) Maintain, to such extent and for such
periods as may be required by applicable law, and permit Landlord or its
representatives to inspect during normal business hours at any time and from
time to time upon reasonable notice to Tenant, all licenses, registration
materials, inspection reports, governmental orders and permits in connection
with the receipt, storage, possession, use, transfer or disposal of radioactive
materials or radiation by Tenant or in connection with the operation of Tenant's
business on the Property from time to time.
(vii) Tenant shall comply with any and all applicable
laws, rules, regulations and orders of any governmental authority with respect
to the release into the environment of any hazardous wastes or substances or
radiation or radioactive materials by Tenant or its agents or employees. Tenant
shall give Landlord immediate verbal notice of any unauthorized release of any
such hazardous wastes or substances or radiation or radioactive materials into
the environment, and shall follow such verbal notice with written notice to
Landlord of such release within twenty-four (24) hours of the time at which
Xxxxxx became aware of such release.
(viii) Tenant shall indemnify, defend and hold
Landlord harmless from and against any and all claims, losses (including, but
not limited to, loss of rental income), damages, liabilities, costs, legal fees
and expenses of any sort arising out of or relating to (A) any failure by Tenant
to comply with any provisions of this paragraph 13.6(b), or (B) any receipt, use
handling, generation, transportation, storage, treatment, release and/or
disposal of any hazardous substance or waste or any radioactive material or
radiation on or about the Property as a proximate result of Tenant's use of the
Property or as a result of any intentional or negligent acts or omissions of
Tenant or of any agent, employee or invitee of Tenant.
(ix) Tenant shall cooperate with Landlord in
furnishing Landlord with complete information regarding Tenant's receipt,
handling, use, storage, transportation, generation, treatment and/or disposal of
any hazardous substances or wastes or radiation or radioactive materials. Upon
request, Tenant shall grant Landlord reasonable access at reasonable times to
the Property to inspect Tenant's receipt, handling, use, storage,
transportation, generation, treatment and/or disposal of hazardous substances or
wastes or radiation or radioactive materials, without being deemed guilty of any
disturbance of Tenant's use or possession and without being liable to Tenant in
any manner.
(x) Notwithstanding Landlord's rights of inspection
and review under this paragraph 13.6(b), Landlord shall have no obligation or
duty to so inspect or review, and no third party shall be entitled to rely on
Landlord to conduct any sort of inspection or review by reason of the provisions
of this paragraph 13.6(b).
35
(xi) If Tenant receives, handles, uses, stores,
transports, generates, treats and/or disposes of any hazardous substances or
wastes or radiation or radioactive materials on or about the Property at any
time during the term of this Lease, then within thirty (30) days after the
termination or expiration of this Lease, Tenant at its sole cost and expense
shall obtain and deliver to Landlord an environmental study, performed by an
expert reasonably satisfactory to Landlord, evaluating the presence or absence
of hazardous substances and wastes, radiation and radioactive materials on and
about the Property. Such study shall be based on a reasonable and prudent level
of tests and investigations of the Property and surrounding portions of the
Center (if appropriate), which tests shall be conducted no earlier than the date
of termination or expiration of this Lease. Liability for any remedial actions
required or recommended on the basis of such study shall be allocated in
accordance with Sections 13.4, 13.6, 14.6 and other applicable provisions of
this Lease.
(c) Landlord shall indemnify, defend and hold Tenant harmless
from and against any and all claims, losses, damages, liabilities, costs, legal
fees and expenses of any sort arising out of or relating to (i) the presence on
the Property of any hazardous substances or wastes or radiation or radioactive
materials as of the Rent Commencement Date (other than as a result of any
intentional or negligent acts or omissions of Tenant or of any agent, employee
or invitee of Tenant), (ii) any unauthorized release into the environment
(including, but not limited to, the Property) of any hazardous substances or
wastes or radiation or radioactive materials to the extent such release results
from the negligence of or willful misconduct or omission by Landlord or its
agents or employees, and/or (iii) the presence on the Property of any hazardous
substances or wastes or radiation or radioactive materials arising after the
Rent Commencement Date from any cause or source other than as a result of any
intentional or negligent acts or omissions of Tenant or of any agent, employee
or invitee of Tenant.
(d) The provisions of this Section 13.6 shall survive the
termination of this Lease.
14. INSURANCE AND INDEMNITY
14.1 Insurance.
(a) Tenant shall procure and maintain in full force and effect
at all times during the term of this Lease, at Tenant's cost and expense,
commercial general liability insurance to protect against liability to the
public, or to any invitee of Tenant or Landlord, arising out of or related to
the use of or resulting from any accident occurring in, upon or about the
Property, with limits of liability of not less than (i) [...*...] for injury to
or death of one person, (ii) [...*...] for personal injury or death, per
occurrence, and (iii) [...*...] for property damage, or a combined single limit
of liability of not less than [...*...]. Such insurance shall
--------------------------
*CONFIDENTIAL TREATMENT REQUESTED
36
name Landlord, its general partners, its Managing Agent and any lender holding a
deed of trust on the Property from time to time (as designated in writing by
Landlord to Tenant from time to time) as additional insureds thereunder. The
amount of such insurance shall not be construed to limit any liability or
obligation of Tenant under this Lease. Tenant shall also procure and maintain in
full force and effect at all times during the term of this Lease, at Tenant's
cost and expense, products/completed operations coverage on terms and in amounts
(A) customary in Tenant's industry for companies engaged in the marketing of
products on a scale comparable to that in which Xxxxxx is engaged from time to
time and (B) mutually satisfactory to Landlord and Tenant in their respective
reasonable discretion.
(b) Landlord shall procure and maintain in full force and
effect at all times during the term of this Lease, at Landlord's cost and
expense (but reimbursable as an Operating Expense under Section 9.2 hereof),
policies of property insurance providing protection against "all risk of direct
physical loss" (as defined by and detailed in the Insurance Service Office's
Commercial Property Program "Cause of Loss--Special Form [CP1030]" or its
equivalent) on the shell of the Initial Building and on the improvements in the
Common Areas of the Center, on a full replacement cost basis (with no
co-insurance or, if coverage without co-insurance is not reasonably available,
then on an "agreed amount" basis). Such insurance may include earthquake
coverage to the extent Landlord in its discretion elects to carry such coverage,
and shall have such commercially reasonable deductibles and other terms as
Landlord in its discretion determines to be appropriate. Landlord shall have no
obligation to carry property damage insurance for any alterations, additions or
improvements installed by Tenant in or about the Initial Building.
(c) Tenant shall procure and maintain in full force and effect
at all times during the term of this Lease, at Tenant's cost and expense,
policies of property insurance providing protection against "all risk of direct
physical loss" (as defined by and detailed in the Insurance Service Office's
Commercial Property Program "Cause of Loss--Special Form [CP1030]" or its
equivalent) on the Tenant Improvements constructed pursuant to the Workletter
and on all other alterations, additions and improvements installed by Tenant
from time to time in or about the Initial Building, on a full replacement cost
basis (with no co-insurance or, if coverage without co-insurance is not
reasonably available, then on an "agreed amount" basis). Such insurance may have
such commercially reasonable deductibles and other terms as Tenant in its
discretion determines to be appropriate, and shall name both Tenant and Landlord
as insureds as their interests may appear.
(d) During the course of construction of the improvements
being constructed by Landlord and Tenant under Section 5.1 and Exhibit C,
Landlord and Tenant respectively shall each procure and maintain in full force
and effect, at its respective sole cost and expense, policies of builder's risk
insurance on the improvements respectively being constructed by it, in such
amounts and with such commercially reasonable deductibles and other terms as
Landlord in its discretion determines to be appropriate with respect to the
insurance to be maintained by
37
Landlord, and in such amounts and with such commercially reasonable deductibles
and other terms as Landlord and Tenant may mutually and reasonably determine to
be appropriate with respect to the insurance to be maintained by Tenant.
14.2 Quality Of Policies And Certificates. All policies of insurance
required to be maintained by Tenant hereunder shall be issued by responsible
insurers and shall be written as primary policies not contributing with and not
in excess of any coverage that Landlord may carry. Tenant shall deliver to
Landlord copies of policies or certificates of insurance showing that said
policies are in effect. The coverage provided by such policies shall include the
clause or endorsement referred to in Section 14.4. If Tenant fails to acquire,
maintain or renew any insurance required to be maintained by it under this
Article 14 or to pay the premium therefor, and such failure continues for ten
(10) days after written notice from Landlord to Tenant specifying such failure,
then Landlord, at its option and in addition to its other remedies, but without
obligation so to do, may procure such insurance, and any sums expended by it to
procure any such insurance shall be repaid upon demand, with interest as
provided in Section 3.2 hereof. Tenant shall obtain written undertakings from
each insurer under policies required to be maintained by it to notify all
insureds thereunder at least thirty (30) days prior to cancellation of coverage.
14.3 Workers' Compensation. Tenant shall maintain in full force and
effect during the term of this Lease workers' compensation insurance in at least
the minimum amounts required by law, covering all of Tenant's employees working
on the Property.
14.4 Waiver Of Subrogation. To the extent permitted by law and without
affecting the coverage provided by insurance required to be maintained
hereunder, Landlord and Tenant each waive any right to recover against the other
with respect to (i) damage to property, (ii) damage to the Property or any part
thereof, or (iii) claims arising by reason of any of the foregoing, but only to
the extent that any of the foregoing damages and claims under clauses (i) -
(iii) hereof are covered, and only to the extent of such coverage, by casualty
insurance actually carried or required to be carried hereunder by either
Landlord or Xxxxxx. This provision is intended to waive fully, and for the
benefit of each party, any rights and claims which might give rise to a right of
subrogation in any insurance carrier. Each party shall procure a clause or
endorsement on any casualty insurance policy denying to the insurer rights of
subrogation against the other party to the extent rights have been waived by the
insured prior to the occurrence of injury or loss. Coverage provided by
insurance maintained by Tenant shall not be limited, reduced or diminished by
virtue of the subrogation waiver herein contained.
14.5 Increase In Premiums. Tenant shall do all acts and pay all
expenses necessary to insure that the Property is not used for purposes
prohibited by any applicable fire insurance, and that Tenant's use of the
Property complies with all requirements necessary to obtain any such insurance.
If Tenant uses or permits the Property to be used in a manner which increases
the existing rate of any insurance carried by Landlord on the Center and such
use continues for
38
longer than a reasonable period specified in any written notice from Landlord to
Tenant identifying the rate increase and the factors causing the same, then
Tenant shall pay the amount of the increase in premium caused thereby, and
Landlord's costs of obtaining other replacement insurance policies, including
any increase in premium, within ten (10) days after demand therefor by Landlord.
14.6 Indemnification.
(a) Tenant shall indemnify, defend and hold Landlord and its
partners, shareholders, officers, directors, agents and employees harmless from
any and all liability for injury to or death of any person, or loss of or damage
to the property of any person, and all actions, claims, demands, costs
(including, without limitation, reasonable attorneys' fees), damages or expenses
of any kind arising therefrom which may be brought or made against Landlord or
which Landlord may pay or incur by reason of the use, occupancy and enjoyment of
the Property by Tenant or any invitees, sublessees, licensees, assignees,
employees, agents or contractors of Tenant or holding under Tenant (including,
but not limited to, any such matters arising out of or in connection with any
early entry upon the Property by Tenant pursuant to Section 2.2 hereof) from any
cause whatsoever other than negligence or willful misconduct or omission by
Landlord, its agents or employees. Landlord and its partners, shareholders,
officers, directors, agents and employees shall not be liable for, and Tenant
hereby waives all claims against such persons for, damages to goods, wares and
merchandise in or upon the Property, or for injuries to Tenant, its agents or
third persons in or upon the Property, from any cause whatsoever other than
negligence or willful misconduct or omission by Landlord, its agents or
employees. Tenant shall give prompt notice to Landlord of any casualty or
accident in, on or about the Property.
(b) Landlord shall indemnify, defend and hold Tenant and its
partners, shareholders, officers, directors, agents and employees harmless from
any and all liability for injury to or death of any person, or loss of or damage
to the property of any person, and all actions, claims, demands, costs
(including, without limitation, reasonable attorneys' fees), damages or expenses
of any kind arising therefrom which may be brought or made against Tenant or
which Tenant may pay or incur, to the extent such liabilities or other matters
arise in, on or about the Property by reason of any negligence or willful
misconduct or omission by Landlord, its agents or employees.
14.7 Blanket Policy. Any policy required to be maintained hereunder may
be maintained under a so-called "blanket policy" insuring other parties and
other locations so long as the amount of insurance required to be provided
hereunder is not thereby diminished.
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15. SUBLEASE AND ASSIGNMENT
15.1 Assignment And Sublease Of Property. Except in the case of a
Permitted Transfer, Tenant shall not have the right or power to assign its
interest in this Lease, or make any sublease of the Initial Building or any
portion thereof, nor shall any interest of Tenant under this Lease be assignable
involuntarily or by operation of law, without on each occasion obtaining the
prior written consent of Landlord, which consent shall not be unreasonably
withheld or delayed. Any purported sublease or assignment of Xxxxxx's interest
in this Lease requiring but not having received Landlord's consent thereto (to
the extent such consent is required hereunder) shall be void. Except in the case
of a Permitted Transfer, any dissolution, consolidation, merger or other
reorganization of Tenant, or any sale or transfer of substantially all of the
stock or assets of Tenant in a single transaction or series of related
transactions, shall be deemed to be an assignment hereunder and shall be void
without the prior written consent of Landlord as required above. Notwithstanding
the foregoing, Tenant shall have the right to assign this Lease or sublet the
Initial Building, or any portion thereof, without Landlord's consent (but with
prior or concurrent written notice by Tenant to Landlord), to any Affiliate of
Tenant, or to any entity which results from a merger or consolidation with
Tenant, or to any entity which acquires substantially all or substantially all
of the stock or assets of Tenant, as a going concern (hereinafter each a
"Permitted Transfer"). For purposes of the preceding sentence, an "Affiliate" of
Tenant shall mean any entity in which Tenant owns at least a twenty percent
(20%) equity interest, any entity which owns at least a twenty percent (20%)
equity interest in Tenant, and/or any entity which is related to Tenant by a
chain of ownership interests involving at least a twenty percent (20%) equity
interest at each level in the chain. Landlord shall have no right to terminate
this Lease in connection with, and shall have no right to any sums or other
economic consideration resulting from, any Permitted Transfer. Except as
expressly set forth in this Section 15.1, however, the provisions of Section
15.2 shall remain applicable to any Permitted Transfer and the transferee under
such Permitted Transfer shall be and remain subject to all of the terms and
provisions of this Lease.
15.2 Rights Of Landlord.
(a) Consent by Landlord to one or more assignments of this
Lease, or to one or more sublettings of the Initial Building or any portion
thereof, or collection of rent by Landlord from any assignee or sublessee, shall
not operate to exhaust Landlord's rights under this Article 15, nor constitute
consent to any subsequent assignment or subletting. No assignment of Xxxxxx's
interest in this Lease and no sublease shall relieve Tenant of its obligations
hereunder, notwithstanding any waiver or extension of time granted by Landlord
to any assignee or sublessee, or the failure of Landlord to assert its rights
against any assignee or sublessee, and regardless of whether Landlord's consent
thereto is given or required to be given hereunder. In the event of a default by
any assignee, sublessee or other successor of Xxxxxx in the performance of any
of the terms or obligations of Tenant under this Lease, Landlord may proceed
directly against Tenant without the necessity of exhausting remedies against any
such
40
assignee, sublessee or other successor. In addition, Tenant immediately and
irrevocably assigns to Landlord, as security for Tenant's obligations under this
Lease, all rent from any subletting of all or any part of the Initial Building
as permitted under this Lease, and Landlord, as Tenant's assignee and as
attorney-in-fact for Tenant, or any receiver for Tenant appointed on Landlord's
application, may collect such rent and apply it toward Tenant's obligations
under this Lease; except that, until the occurrence of an act of default by
Tenant which continues beyond any applicable cure period, Tenant shall have the
right to collect such rent.
(b) Upon any assignment of Xxxxxx's interest in this Lease for
which Xxxxxxxx's consent is required under Section 15.1 hereof, Tenant shall pay
to Landlord, within ten (10) days after receipt thereof by Xxxxxx from time to
time, [...*...] of all cash sums and other economic considerations received by
Tenant in connection with or as a result of such assignment, after first
deducting therefrom (i) the unamortized cost of any leasehold improvements
previously made in the Initial Building and paid for by Tenant, (ii) any costs
incurred by Tenant for leasehold improvements (including, but not limited to,
third-party architectural and space planning costs) in the Initial Building in
connection with such assignment, and (iii) any real estate commissions and/or
attorneys' fees incurred by Tenant in connection with such assignment. Nothing
in this paragraph 15.2(b) shall entitle Landlord to receive any portion of any
consideration received by Tenant in connection with any sale of its personal
property.
(c) Upon any sublease of all or any portion of the Initial
Building for which Landlord's consent is required under Section 15.1 hereof,
Tenant shall pay to Landlord, within ten (10) days after receipt thereof by
Xxxxxx from time to time, [...*...] of all cash sums and other economic
considerations received by Tenant in connection with or as a result of such
sublease, after first deducting therefrom (i) the rental due hereunder for the
corresponding period, prorated (on the basis of the average per-square-foot cost
paid by Tenant for the entire Initial Building for the applicable period under
this Lease) to reflect the size of the subleased portion of the Initial
Building, (ii) any costs incurred by Tenant for leasehold improvements in the
subleased portion of the Initial Building (including, but not limited to,
third-party architectural and space planning costs) for the specific benefit of
the sublessee in connection with such sublease, amortized over the term of the
sublease, (iii) any real estate commissions and/or attorneys' fees incurred by
Tenant in connection with such sublease, amortized over the term of such
sublease, and (iv) the unamortized cost of any leasehold improvements previously
made and paid for by Tenant with respect to the subleased portion of the Initial
Building. Nothing in this paragraph 15.2(c) shall entitle Landlord to receive
any portion of any consideration received by Tenant in connection with any sale
of its personal property.
---------------------------
*CONFIDENTIAL TREATMENT REQUESTED
41
16. RIGHT OF ENTRY AND QUIET ENJOYMENT
16.1 Right Of Entry. Landlord and its authorized representatives shall
have the right to enter the Initial Building at any time during the term of this
Lease during normal business hours and upon not less than twenty-four (24) hours
prior notice, except in the case of emergency (in which event no notice shall be
required and entry may be made at any time), for the purpose of inspecting and
determining the condition of the Initial Building or for any other proper
purpose including, without limitation, to make repairs, replacements or
improvements which Landlord may deem necessary, to show the Initial Building to
prospective purchasers, to show the Initial Building to prospective tenants (but
only during the final year of the term of this Lease), and to post notices of
nonresponsibility. Landlord shall not be liable for inconvenience, annoyance,
disturbance, loss of business, quiet enjoyment or other damage or loss to Tenant
by reason of making any repairs or performing any work upon the Initial Building
or the Property or by reason of erecting or maintaining any protective
barricades in connection with any such work, and the obligations of Tenant under
this Lease shall not thereby be affected in any manner whatsoever, provided,
however, Landlord shall use reasonable efforts to minimize the inconvenience to
Tenant's normal business operations caused thereby.
16.2 Quiet Enjoyment. Landlord covenants that Tenant, upon paying the
rent and performing its obligations hereunder and subject to all the terms and
conditions of this Lease, shall peacefully and quietly have, hold and enjoy the
Initial Building and the Property throughout the term of this Lease, or until
this Lease is terminated as provided by this Lease.
17. CASUALTY AND TAKING
17.1 Damage or Destruction.
(a) If the Initial Building, or the Common Areas of the
Property, are damaged or destroyed in whole or in part under circumstances in
which (i) repair and restoration is permitted under applicable governmental
laws, regulations and building codes then in effect and (ii) repair and
restoration reasonably can be completed within a period of one (1) year (or, in
the case of an occurrence during the last year of the term of this Lease, within
a period of sixty (60) days) following the date of the occurrence, then Landlord
shall commence and complete, with all due diligence and as promptly as is
reasonably practicable under the conditions then existing, all such repair and
restoration as may be required to return the Common Areas of the Property and
the Improvements previously constructed by Landlord under Section 5.1 and
Exhibit C to the condition existing immediately prior to the occurrence. In the
event of damage or destruction the repair of which is not permitted under
applicable governmental laws, regulations and building codes then in effect, if
such damage or destruction (despite being corrected to the extent then permitted
under applicable governmental laws, regulations and building codes) would still
materially impair Tenant's ability to conduct its business in the Initial
42
Building, then either party may terminate this Lease as of the date of the
occurrence by giving written notice to the other within thirty (30) days after
the date of the occurrence; if neither party timely elects such termination, or
if such damage or destruction does not materially impair Tenant's ability to
conduct its business in the Initial Building, then this Lease shall continue in
full force and effect, except that there shall be an equitable adjustment in
monthly minimum rental and of Tenant's Operating Cost Share of Operating
Expenses, based upon the extent to which Xxxxxx's ability to conduct its
business in the Initial Building is impaired, and Landlord shall restore the
Common Areas of the Property and the Improvements previously constructed by
Landlord under Section 5.1 and Exhibit C to a complete architectural whole and
to a functional condition. In the event of damage or destruction which cannot
reasonably be repaired within one (1) year (or, in the case of an occurrence
during the last year of the term of this Lease, within a period of sixty (60)
days) following the date of the occurrence, then either Landlord or Tenant, at
its election, may terminate this Lease as of the date of the occurrence by
giving written notice to the other within thirty (30) days after the date of the
occurrence; if neither party timely elects such termination, then this Lease
shall continue in full force and effect and Landlord shall repair and restore
the Property in accordance with, and to the extent provided in, the first
sentence of this Section 17.1.
(b) Landlord's obligations pursuant to Section 17.1(a) are
subject to the following limitations:
(i) If the occurrence results from an insured
casualty, Landlord's rebuilding obligation shall not exceed the amount of
insurance proceeds received by Landlord from insurers by reason of such
occurrence, plus the amount of any applicable deductible (provided that Landlord
shall be obligated to use its best efforts to recover any available proceeds
from its then existing insurance), and, if such proceeds are insufficient,
either party may terminate the Lease unless the other party promptly elects and
agrees, in writing, to contribute the amount of the shortfall; and
(ii) If the occurrence results from an uninsured
casualty, Landlord shall be required to repair and restore the Initial Building
and Common Areas of the Property (as contemplated in Section 17.1(a)) to the
condition existing immediately prior to the occurrence of such casualty (but
only to the extent of the improvements previously constructed or installed by
Landlord pursuant to this Lease), provided that Landlord's obligation to repair
and restore shall not exceed an amount equal to [...*...] of the aggregate
replacement cost of the Common Area improvements on the Property and the
Improvements originally constructed by Landlord under Section 5.1 and Exhibit C;
if the replacement cost as to Landlord exceeds such amount, then Landlord may
terminate this Lease unless Tenant promptly elects and agrees, in writing, to
contribute the amount of the shortfall.
--------------------------
*CONFIDENTIAL TREATMENT REQUESTED
43
(c) From and after the date of an occurrence resulting in
damage to or destruction of the Initial Building or of the Common Areas of the
Property, and continuing until repair and restoration thereof are completed,
there shall be an equitable abatement of minimum rental and of Tenant's
Operating Cost Share of Operating Expenses based upon the degree to which
Xxxxxx's ability to conduct its business in the Initial Building is impaired.
17.2 Condemnation.
(a) If during the term of this Lease the Property or the
Improvements, or any substantial part of either, is taken by eminent domain or
by reason of any public improvement or condemnation proceeding, or in any manner
by exercise of the right of eminent domain (including any transfer in avoidance
of an exercise of the power of eminent domain), or receives irreparable damage
by reason of anything lawfully done under color of public or other authority,
then (i) this Lease shall terminate as to the entire Property at Landlord's
election by written notice given to Tenant within sixty (60) days after the
taking has occurred, and (ii) this Lease shall terminate as to the entire
Property at Tenant's election, by written notice given to Landlord within thirty
(30) days after the nature and extent of the taking have been finally
determined, if the portion of the Property taken is of such extent and nature as
substantially to handicap, impede or permanently impair Xxxxxx's use of the
balance of the Property. If Tenant elects to terminate this Lease, Tenant shall
also notify Landlord of the date of termination, which date shall not be earlier
than thirty (30) days nor later than ninety (90) days after Xxxxxx has notified
Landlord of Tenant's election to terminate, except that this Lease shall
terminate on the date of taking if such date falls on any date before the date
of termination designated by Tenant. If neither party elects to terminate this
Lease as hereinabove provided, this Lease shall continue in full force and
effect (except that there shall be an equitable abatement of minimum rental and
of Tenant's Operating Cost Share of Operating Expenses based upon the degree to
which Tenant's ability to conduct its business in the Initial Building is
impaired) and Landlord shall restore the Common Areas of the Property and the
Improvements originally constructed by Landlord under Section 5.1 and Exhibit C
to a complete architectural whole and a functional condition and as nearly as
reasonably possible to the condition existing before the taking. In connection
with any such restoration, each party shall use its respective best efforts
(including, without limitation, any necessary negotiation or intercession with
its respective lender, if any) to ensure that any severance damages or other
condemnation awards intended to provide compensation for rebuilding or
restoration costs are promptly collected and made available to Landlord, subject
only to such payment controls as either party's lender may reasonably require in
order to ensure the proper application of such proceeds toward the restoration
of the Improvements. Each party waives the provisions of Code of Civil Procedure
Section 1265.130, allowing either party to petition the Superior Court to
terminate this Lease in the event of a partial condemnation of the Property.
(b) Notwithstanding any of the provisions of Section 17.2(a),
Landlord's obligations to repair and restore pursuant to Section 17.2(a) shall
not exceed, net of any
44
condemnation awards or other proceeds available for and allocable to such
restoration as contemplated in Section 17.2(a), an amount equal to [...*...] of
the aggregate replacement cost of the Common Area improvements on the Property
and of the Improvements originally constructed by Landlord under Section 5.1 and
Exhibit C; if the replacement cost as to Landlord exceeds such amount, then
Landlord may terminate this Lease unless Tenant promptly elects and agrees, in
writing, to contribute the amount of the shortfall.
17.3 Reservation Of Compensation. Landlord reserves, and Tenant waives
and assigns to Landlord, all rights to any award or compensation for damage to
the Improvements, the Property and the leasehold estate created hereby, accruing
by reason of any taking in any public improvement, condemnation or eminent
domain proceeding or in any other manner by exercise of the right of eminent
domain or of anything lawfully done by public authority, except that Tenant
shall be entitled to any and all compensation or damages paid for or on account
of Tenant's moving expenses, trade fixtures, equipment and any leasehold
improvements on the Property installed by Tenant at its own expense, but only to
the extent Tenant would have been entitled to remove such items at the
expiration of the term of this Lease and then only to the extent of the then
remaining unamortized value of such improvements computed on a straight-line
basis over the term of this Lease. Tenant covenants to deliver such further
assignments of the foregoing as Landlord may from time to time request.
17.4 Restoration Of Improvements. In connection with any repair or
restoration of Improvements by either party following a casualty or taking as
hereinabove set forth, the party responsible for such repair or restoration
shall, to the extent possible, return such Improvements to a condition
substantially equal to that which existed immediately prior to the casualty or
taking. To the extent such party wishes to make material modifications to such
Improvements, such modifications shall be subject to the prior written approval
of the other party (not to be unreasonably withheld or delayed), except that no
such approval shall be required for modifications that are required by
applicable governmental authorities as a condition of the repair or restoration,
unless such required modifications would impair or impede Tenant's conduct of
its business in the Initial Building (in which case any such modifications in
Landlord's work shall require Tenant's consent, not unreasonably withheld or
delayed) or would materially and adversely affect the exterior appearance, the
structural integrity or the mechanical or other operating systems of the Initial
Building (in which case any such modifications in Tenant's work shall require
Landlord's consent, not unreasonably withheld or delayed).
18. DEFAULT
18.1 Events Of Default. The occurrence of any of the following shall
constitute an event of default on the part of Tenant:
(a) [Omitted.]
45
(b) Nonpayment. Failure to pay, when due, any amount payable
to Landlord hereunder, such failure continuing for a period of five (5) business
days after written notice of such failure; provided, however, that any such
notice shall be in lieu of, and not in addition to, any notice required under
California Code of Civil Procedure Section 1161 et seq., as amended from time to
time;
(c) Other Obligations. Failure to perform any obligation,
agreement or covenant under this Lease other than those matters specified in
subsection (b) hereof, such failure continuing for thirty (30) days after
written notice of such failure; provided, however, that if such failure is
curable in nature but cannot reasonably be cured within such 30-day period, then
Tenant shall not be in default if, and so long as, Tenant promptly (and in all
events within such 30-day period) commences such cure and thereafter diligently
pursues such cure to completion; and provided further, however, that any such
notice shall be in lieu of, and not in addition to, any notice required under
California Code of Civil Procedure Section 1161 et seq., as amended from time to
time;
(d) General Assignment. A general assignment by Xxxxxx for the
benefit of creditors;
(e) Bankruptcy. The filing of any voluntary petition in
bankruptcy by Xxxxxx, or the filing of an involuntary petition by Xxxxxx's
creditors, which involuntary petition remains undischarged for a period of
thirty (30) days. In the event that under applicable law the trustee in
bankruptcy or Tenant has the right to affirm this Lease and continue to perform
the obligations of Tenant hereunder, such trustee or Tenant shall, in such time
period as may be permitted by the bankruptcy court having jurisdiction, cure all
defaults of Tenant hereunder outstanding as of the date of the affirmance of
this Lease and provide to Landlord such adequate assurances as may be necessary
to ensure Landlord of the continued performance of Tenant's obligations under
this Lease. Specifically, but without limiting the generality of the foregoing,
such adequate assurances must include assurances that the Property continues to
be operated only for the use permitted hereunder. The provisions hereof are to
assure that the basic understandings between Landlord and Tenant with respect to
Xxxxxx's use of the Property and the benefits to Landlord therefrom are
preserved, consistent with the purpose and intent of applicable bankruptcy laws;
(f) Receivership. The employment of a receiver appointed by
court order to take possession of substantially all of Tenant's assets or the
Property, if such receivership remains undissolved for a period of thirty (30)
days;
(g) Attachment. The attachment, execution or other judicial
seizure of all or substantially all of Tenant's assets or the Property, if such
attachment or other seizure remains undismissed or undischarged for a period of
thirty (30) days after the levy thereof; or
46
(h) Insolvency. The admission by Tenant in writing of its
inability to pay its debts as they become due, the filing by Tenant of a
petition seeking any reorganization or arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future statute,
law or regulation, the filing by Tenant of an answer admitting or failing timely
to contest a material allegation of a petition filed against Tenant in any such
proceeding or, if within thirty (30) days after the commencement of any
proceeding against Tenant seeking any reorganization or arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
present or future statute, law or regulation, such proceeding shall not have
been dismissed.
18.2 Remedies Upon Xxxxxx's Default.
(a) Upon the occurrence of any event of default described in
Section 18.1 hereof, Landlord, in addition to and without prejudice to any other
rights or remedies it may have, shall have the immediate right to re-enter the
Property or any part thereof and repossess the same, expelling and removing
therefrom all persons and property (which property may be stored in a public
warehouse or elsewhere at the cost and risk of and for the account of Tenant),
using such force as may be necessary to do so (as to which Tenant hereby waives
any claim for loss or damage that may thereby occur). In addition to or in lieu
of such re-entry, and without prejudice to any other rights or remedies it may
have, Landlord shall have the right either (i) to terminate this Lease and
recover from Tenant all damages incurred by Landlord as a result of Tenant's
default, as hereinafter provided, or (ii) to continue this Lease in effect and
recover rent and other charges and amounts as they become due.
(b) Even if Tenant has breached this Lease, this Lease shall
continue in effect for so long as Landlord does not terminate Tenant's right to
possession under subsection (a) hereof and Landlord may enforce all of its
rights and remedies under this Lease, including the right to recover rent as it
becomes due, and Landlord, without terminating this Lease, may exercise all of
the rights and remedies of a lessor under California Civil Code Section 1951.4
(lessor may continue lease in effect after xxxxxx's breach and abandonment and
recover rent as it becomes due, if lessee has right to sublet or assign, subject
only to reasonable limitations), or any successor Code section. Acts of
maintenance, preservation or efforts to relet the Property or the appointment of
a receiver upon application of Landlord to protect Xxxxxxxx's interests under
this Lease shall not constitute a termination of Tenant's right to possession.
(c) If Landlord terminates this Lease pursuant to this Section
18.2, Landlord shall have all of the rights and remedies of a landlord provided
by Section 1951.2 of the Civil Code of the State of California, or any successor
Code section, which remedies include Xxxxxxxx's right to recover from Tenant (i)
the worth at the time of award of the unpaid rent and additional rent which had
been earned at the time of termination, (ii) the worth at the time of award of
the amount by which the unpaid rent and additional rent which would have been
earned after termination until the time of award exceeds the amount of such
rental loss that
47
Tenant proves could have been reasonably avoided, (iii) the worth at the time of
award of the amount by which the unpaid rent and additional rent for the balance
of the term after the time of award exceeds the amount of such rental loss that
Tenant proves could be reasonably avoided, and (iv) any other amount necessary
to compensate Landlord for all the detriment proximately caused by Xxxxxx's
failure to perform its obligations under this Lease or which in the ordinary
course of things would be likely to result therefrom, including, but not limited
to, the cost of recovering possession of the Property, expenses of reletting,
including necessary repair, renovation and alteration of the Initial Building,
reasonable attorneys' fees, and other reasonable costs. The "worth at the time
of award" of the amounts referred to in clauses (i) and (ii) above shall be
computed by allowing interest at [...*...] per annum from the date such amounts
accrued to Landlord. The "worth at the time of award" of the amounts referred to
in clause (iii) above shall be computed by discounting such amount at [...*...]
above the discount rate of the Federal Reserve Bank of San Francisco at the time
of award.
18.3 Remedies Cumulative. All rights, privileges and elections or
remedies of Landlord contained in this Article 18 are cumulative and not
alternative to the extent permitted by law and except as otherwise provided
herein.
19. SUBORDINATION, ATTORNMENT AND SALE
19.1 Subordination To Mortgage. This Lease, and any sublease entered
into by Tenant under the provisions of this Lease, shall be subject and
subordinate to any ground lease, mortgage, deed of trust, sale/leaseback
transaction or any other hypothecation for security now or hereafter placed upon
the Initial Building, the Property, the Center, or any of them, and the rights
of any assignee of Landlord or of any ground lessor, mortgagee, trustee,
beneficiary or leaseback lessor under any of the foregoing, and to any and all
advances made on the security thereof and to all renewals, modifications,
consolidations, replacements and extensions thereof; provided, however, that
such subordination in the case of any future ground lease, mortgage, deed of
trust, sale/leaseback transaction or any other hypothecation for security placed
upon the Initial Building, the Property, the Center, or any of them shall be
conditioned on Tenant's receipt from the ground lessor, mortgagee, trustee,
beneficiary or leaseback lessor of a Non-Disturbance Agreement in a form
reasonably acceptable to Tenant (i) confirming that so long as Tenant is not in
material default hereunder beyond any applicable cure period (for which purpose
the occurrence of any event of default under Section 18.1 hereof shall be deemed
to be "material"), Xxxxxx's rights hereunder shall not be disturbed by such
person or entity and (ii) agreeing that the benefit of such Non-Disturbance
Agreement shall be transferable to any transferee under a Permitted Transfer and
to any other assignee or subtenant that is acceptable to the ground lessor,
mortgagee, trustee, beneficiary or leaseback lessor at the time of transfer.
Moreover, Tenant's obligations under this Lease shall be conditioned on Xxxxxx's
receipt within thirty (30) days after mutual execution of this Lease, from any
ground lessor, mortgagee,
---------------------------
*CONFIDENTIAL TREATMENT REQUESTED
48
trustee, beneficiary or leaseback lessor currently owning or holding a security
interest in the Property, of a Non-Disturbance Agreement in a form reasonably
acceptable to Tenant confirming (i) that so long as Tenant is not in material
default hereunder beyond any applicable cure period (for which purpose the
occurrence of any event of default under Section 18.1 hereof shall be deemed to
be "material"), Xxxxxx's rights hereunder shall not be disturbed by such person
or entity and (ii) agreeing that the benefit of such Non-Disturbance Agreement
shall be transferable to any transferee under a Permitted Transfer and to any
other assignee or subtenant that is acceptable to the ground lessor, mortgagee,
trustee, beneficiary or leaseback lessor at the time of transfer. If any
mortgagee, trustee, beneficiary, ground lessor, sale/leaseback lessor or
assignee elects to have this Lease be an encumbrance upon the Property prior to
the lien of its mortgage, deed of trust, ground lease or leaseback lease or
other security arrangement and gives notice thereof to Tenant, this Lease shall
be deemed prior thereto, whether this Lease is dated prior or subsequent to the
date thereof or the date of recording thereof. Tenant, and any sublessee, shall
execute such documents as may reasonably be requested by any mortgagee, trustee,
beneficiary, ground lessor, sale/leaseback lessor or assignee to evidence the
subordination herein set forth, subject to the conditions set forth above, or to
make this Lease prior to the lien of any mortgage, deed of trust, ground lease,
leaseback lease or other security arrangement, as the case may be. Upon any
default by Landlord in the performance of its obligations under any mortgage,
deed of trust, ground lease, leaseback lease or assignment, Tenant (and any
sublessee) shall, notwithstanding any subordination hereunder, attorn to the
mortgagee, trustee, beneficiary, ground lessor, leaseback lessor or assignee
thereunder upon demand and become the tenant of the successor in interest to
Landlord, at the option of such successor in interest, and shall execute and
deliver any instrument or instruments confirming the attornment herein provided
for.
19.2 Sale Of Landlord's Interest. Upon sale, transfer or assignment of
Xxxxxxxx's entire interest in the Initial Building and the Property, Landlord
shall be relieved of its obligations hereunder with respect to liabilities
accruing from and after the date of such sale, transfer or assignment.
19.3 Estoppel Certificates. Landlord or Tenant (the "responding
party"), as applicable, shall at any time and from time to time, within ten (10)
days after written request by the other party (the "requesting party"), execute,
acknowledge and deliver to the requesting party a certificate in writing
stating: (i) that this Lease is unmodified and in full force and effect, or if
there have been any modifications, that this Lease is in full force and effect
as modified and stating the date and the nature of each modification; (ii) the
date to which rental and all other sums payable hereunder have been paid; (iii)
that the requesting party is not in default in the performance of any of its
obligations under this Lease, that the responding party has given no notice of
default to the requesting party and that no event has occurred which, but for
the expiration of the applicable time period, would constitute an event of
default hereunder, or if the requesting party alleges that any such default,
notice or event has occurred, specifying the same in reasonable detail; and (iv)
such other matters as may reasonably be requested by the
49
requesting party or any institutional lender, mortgagee, trustee, beneficiary,
ground lessor, sale/leaseback lessor, prospective purchaser of the Property, or
prospective sublessee or assignee of this Lease. Any such certificate provided
under this Section 19.3 may be relied upon by any lender, mortgagee, trustee,
beneficiary, assignee or successor in interest to Landlord or Tenant, by any
prospective purchaser, by any purchaser on foreclosure or sale, by any grantee
under a deed in lieu of foreclosure of any mortgage or deed of trust on the
Property, by any subtenant or assignee, or by any other third party. Failure to
execute and return within the required time any estoppel certificate requested
hereunder, if such failure continues for five (5) days after a second written
request by the requesting party for such estoppel certificate, shall be deemed
to be an admission of the truth of the matters set forth in the form of
certificate submitted by the requesting party for execution.
19.4 Subordination to CC&R's. This Lease, any permitted sublease
entered into by Tenant under the provisions of this Lease, and the interests in
real property conveyed hereby and thereby shall be subject and subordinate (a)
to any declarations of covenants, conditions and restrictions affecting the
Property or the Center from time to time, provided that the terms of such
declarations are reasonable, do not materially impair Xxxxxx's ability to
conduct the uses permitted hereunder on the Property, and do not discriminate
against Tenant relative to other similarly situated tenants occupying portions
of the Center, (b) to the Declaration of Covenants, Conditions and Restrictions
for Pointe Grand Business Park dated November 4, 1991 and recorded on February
25, 1992 as Instrument No. 92025214, Official Records of San Mateo County, as
amended from time to time (the "Master Declaration"), the provisions of which
Master Declaration are an integral part of this Lease, (c) to the Declaration of
Covenants, Conditions and Restrictions dated November 23, 1987 and recorded on
November 24, 1987 as Instrument No. 87177987, Official Records of San Mateo
County, which declaration imposes certain covenants, conditions and restrictions
on the Property, and (d) to the Environmental Restriction and Covenant (Pointe
Grand) dated as of April 16, 1997 and recorded on April 16, 1997 as Instrument
No. 97-043682, Official Records of San Mateo County, which declaration imposes
certain covenants, conditions and restrictions on the Center. Xxxxxx agrees to
execute, upon request by Xxxxxxxx, any documents reasonably required from time
to time to evidence such subordination.
19.5 Mortgagee Protection. If, following a default by Landlord under
any mortgage, deed of trust, ground lease, leaseback lease or other security
arrangement covering the Initial Building, the Property, the Center, or any of
them, the Initial Building, the Property and/or the Center, as applicable, is
acquired by the mortgagee, beneficiary, master lessor or other secured party, or
by any other successor owner, pursuant to a foreclosure, trustee's sale,
sheriff's sale, lease termination or other similar procedure (or deed in lieu
thereof), then any such person or entity so acquiring the Initial Building, the
Property and/or the Center shall not be:
(a) liable for any act or omission of a prior landlord or
owner of the Property (including, but not limited to, Landlord);
50
(b) subject to any offsets or defenses that Tenant may have
against any prior landlord or owner of the Property and/or the Center
(including, but not limited to, Landlord);
(c) bound by any rent or additional rent that Tenant may have
paid in advance to any prior landlord or owner of the Property and/or the Center
(including, but not limited to, Landlord) for a period in excess of one month,
or by any security deposit, cleaning deposit or other prepaid charge that Tenant
may have paid in advance to any prior landlord or owner (including, but not
limited to, Landlord), except to the extent such deposit or prepaid amount has
been expressly turned over to or credited to the successor owner thus acquiring
the Property and/or the Center, as applicable;
(d) liable for any warranties or representations of any nature
whatsoever, whether pursuant to this Lease or otherwise, by any prior landlord
or owner of the Property and/or the Center (including, but not limited to,
Landlord) with respect to the use, construction, zoning, compliance with laws,
title, habitability, fitness for purpose or possession, or physical condition
(including, without limitation, environmental matters) of the Property, the
Initial Building or the Center; or
(e) liable to Tenant in any amount beyond the interest of such
mortgagee, beneficiary, master lessor or other secured party or successor owner
in the Property and the Center as they exist from time to time, it being the
intent of this provision that Tenant shall look solely to the interest of any
such mortgagee, beneficiary, master lessor or other secured party or successor
owner in the Property and Center for the payment and discharge of the landlord's
obligations under this Lease and that such mortgagee, beneficiary, master lessor
or other secured party or successor owner shall have no separate personal
liability for any such obligations.
20. SECURITY
20.1 Deposit. Within thirty (30) days after mutual execution of this
Lease, Tenant shall deposit with Landlord the sum of [...*...] which sum (the
"Security Deposit") shall be held by Landlord as security for the faithful
performance of all of the terms, covenants, and conditions of this Lease to be
kept and performed by Tenant during the term hereof. If Tenant defaults with
respect to any provision of this Lease, including, without limitation, the
provisions relating to the payment of rental and other sums due hereunder,
Landlord shall have the right, but shall not be required, to use, apply or
retain all or any part of the Security Deposit for the payment of rental or any
other amount which Landlord may spend or become obligated to spend by reason of
Tenant's default or to compensate Landlord for any other loss or damage which
Landlord may suffer by reason of Tenant's default. If any portion of the
Security Deposit is so used or applied, Tenant shall, within ten (10) days after
written demand therefor, deposit cash with Landlord in an amount sufficient to
restore the Security Deposit to its original amount and
---------------------------
*CONFIDENTIAL TREATMENT REQUESTED
51
Tenant's failure to do so shall be a material breach of this Lease. Landlord
shall not be required to keep any deposit under this Section separate from
Landlord's general funds, and Tenant shall not be entitled to interest thereon.
If Tenant fully and faithfully performs every provision of this Lease to be
performed by it, the Security Deposit, or any balance thereof, shall be returned
to Tenant or, at Landlord's option, to the last assignee of Tenant's interest
hereunder, at the expiration of the term of this Lease and after Xxxxxx has
vacated the Property. In the event of termination of Xxxxxxxx's interest in this
Lease, Landlord shall transfer all deposits then held by Landlord under this
Section to Landlord's successor in interest, whereupon Tenant agrees to release
Landlord from all liability for the return of such deposit or the accounting
thereof.
21. MISCELLANEOUS
21.1 Notices. All notices, consents, waivers and other communications
which this Lease requires or permits either party to give to the other shall be
in writing and shall be deemed given when delivered personally (including
delivery by private courier or express delivery service) or four (4) days after
deposit in the United States mail, registered or certified mail, postage
prepaid, addressed to the parties at their respective addresses as follows:
To Tenant: (until Rent Commencement Date)
SUGEN, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxxx Xxxx, XX 00000-0000
Attn: Vice President, Finance
(after Rent Commencement Date)
SUGEN, Inc.
_____ East Grand Avenue [to be determined]
South San Francisco, CA 94080
Attn: Vice President, Finance
with copy to: Xxxxxx Godward LLP
0 Xxxx Xxxx Xxxxxx
Xxxx Xxxx, XX 00000-0000
Attn: Xxxx X. Xxxx, Esq.
To Landlord: Britannia Pointe Grand Limited Partnership
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxx Xxxxxxxx
Xxxxxxx, XX 00000
Attn: X. X. Xxxxxxx
52
with copy to: Xxxxxx Xxxxx & Xxxx LLP
Embarcadero Center West
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, Xx.
or to such other address as may be contained in a notice at least fifteen (15)
days prior to the address change from either party to the other given pursuant
to this Section. Rental payments and other sums required by this Lease to be
paid by Tenant shall be delivered to Landlord at Landlord's address provided in
this Section, or to such other address as Landlord may from time to time specify
in writing to Tenant, and shall be deemed to be paid only upon actual receipt.
21.2 Successors And Assigns. The obligations of this Lease shall run
with the land, and this Lease shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns, except that the
original Landlord named herein and each successive Landlord under this Lease
shall be liable only for obligations accruing during the period of its ownership
of the Property, said liability terminating upon termination of such ownership
and passing to the successor lessor.
21.3 No Waiver. The failure of Landlord to seek redress for violation,
or to insist upon the strict performance, of any covenant or condition of this
Lease shall not be deemed a waiver of such violation, or prevent a subsequent
act which would originally have constituted a violation from having all the
force and effect of an original violation.
21.4 Severability. If any provision of this Lease or the application
thereof is held to be invalid or unenforceable, the remainder of this Lease or
the application of such provision to persons or circumstances other than those
as to which it is invalid or unenforceable shall not be affected thereby, and
each of the provisions of this Lease shall be valid and enforceable, unless
enforcement of this Lease as so invalidated would be unreasonable or grossly
inequitable under all the circumstances or would materially frustrate the
purposes of this Lease.
21.5 Litigation Between Parties. In the event of any litigation or
other dispute resolution proceedings between the parties hereto arising out of
or in connection with this Lease, the prevailing party shall be reimbursed for
all reasonable costs, including, but not limited to, reasonable accountants'
fees and attorneys' fees, incurred in connection with such proceedings
(including, but not limited to, any appellate proceedings relating thereto) or
in connection with the enforcement of any judgment or award rendered in such
proceedings. "Prevailing party" within the meaning of this Section shall
include, without limitation, a party who dismisses an action for recovery
hereunder in exchange for payment of the sums allegedly due, performance of
covenants allegedly breached or consideration substantially equal to the relief
sought in the action.
53
21.6 Surrender. A voluntary or other surrender of this Lease by Xxxxxx,
or a mutual termination thereof between Landlord and Tenant, shall not result in
a merger but shall, at the option of Landlord, operate either as an assignment
to Landlord of any and all existing subleases and subtenancies, or a termination
of all or any existing subleases and subtenancies. This provision shall be
contained in any and all assignments or subleases made pursuant to this Lease.
21.7 Interpretation. The provisions of this Lease shall be construed as
a whole, according to their common meaning, and not strictly for or against
Landlord or Tenant. The captions preceding the text of each Section and
subsection hereof are included only for convenience of reference and shall be
disregarded in the construction or interpretation of this Lease.
21.8 Entire Agreement. This written Lease, together with the exhibits
hereto, contains all the representations and the entire understanding between
the parties hereto with respect to the subject matter hereof. Any prior
correspondence, memoranda or agreements are replaced in total by this Lease and
the exhibits hereto. This Lease may be modified only by an agreement in writing
signed by each of the parties.
21.9 Governing Law. This Lease and all exhibits hereto shall be
construed and interpreted in accordance with and be governed by all the
provisions of the laws of the State of California.
21.10 No Partnership. The relationship between Landlord and Xxxxxx is
solely that of a lessor and lessee. Nothing contained in this Lease shall be
construed as creating any type or manner of partnership, joint venture or joint
enterprise with or between Landlord and Tenant.
21.11 Financial Information. From time to time Tenant shall promptly
provide directly to prospective lenders and purchasers of the Property and/or
Center designated by Landlord such financial information pertaining to the
financial status of Tenant as Landlord may reasonably request; provided, Tenant
shall be permitted to provide such financial information in a manner which
Tenant deems reasonably necessary to protect the confidentiality of such
information, including (if Tenant so requests) conditioning disclosure of such
information upon execution of a reasonable confidentiality agreement by Landlord
and by any other proposed or permitted recipient of such information. In
addition, from time to time, Tenant shall provide Landlord with such financial
information pertaining to the financial status of Tenant as Landlord may
reasonably request. Landlord agrees that all financial information supplied to
Landlord by Tenant shall be treated as confidential material, and shall not be
disseminated to any party or entity (including any entity affiliated with
Landlord) without Tenant's prior written consent, except that Landlord shall be
entitled to provide such information, subject to reasonable precautions to
protect the confidential nature thereof, (i) to Landlord's partners and
professional advisors, solely to use in connection with Landlord's execution and
enforcement of this Lease, and (ii) to prospective lenders and/or purchasers of
the Property and/or Center, solely for use
54
in connection with their bona fide consideration of a proposed financing or
purchase of the Property and/or Center, provided that such prospective lenders
and/or purchasers are not then engaged in businesses directly competitive with
the business then being conducted by Xxxxxx. For purposes of this Section,
without limiting the generality of the obligations provided herein, it shall be
deemed reasonable for Landlord to request copies of Xxxxxx's most recent audited
annual financial statements, or, if audited statements have not been prepared,
unaudited financial statements for Xxxxxx's most recent fiscal year, accompanied
by a certificate of Tenant's chief financial officer that such financial
statements fairly present Tenant's financial condition as of the date(s)
indicated. Notwithstanding any other provisions of this Section 21.11, during
any period in which Tenant has outstanding a class of publicly traded securities
and is filing with the Securities and Exchange Commission, on a regular basis,
Forms 10Q and 10K and any other periodic filings required under the Securities
Exchange Act of 1934, as amended, it shall constitute sufficient compliance
under this Section 21.11 for Tenant to furnish Landlord with copies of such
periodic filings substantially concurrently with the filing thereof with the
Securities and Exchange Commission.
Landlord and Xxxxxx recognize the need of Tenant to maintain
the confidentiality of information regarding its financial status and the need
of Landlord to be informed of, and to provide to prospective lenders and
purchasers of the Property and/or Center financial information pertaining to,
Xxxxxx's financial status. Landlord and Xxxxxx agree to cooperate with each
other in achieving these needs within the context of the obligations set forth
in this Section.
21.12 Costs. If Tenant requests the consent of Landlord under any
provision of this Lease for any act that Xxxxxx proposes to do hereunder,
including, without limitation, assignment or subletting of the Property, Tenant
shall, as a condition to doing any such act and the receipt of such consent,
reimburse Landlord promptly for any and all reasonable costs and expenses
incurred by Landlord in connection therewith, including, without limitation,
reasonable attorneys' fees.
21.13 Time. Time is of the essence of this Lease, and of every term and
condition hereof.
21.14 Rules And Regulations. Tenant shall observe, comply with and
obey, and shall cause its employees, agents and, to the best of Tenant's
ability, invitees to observe, comply with and obey such rules and regulations as
Landlord may promulgate from time to time for the safety, care, cleanliness,
order and use of the Improvements, the Property and the Center.
21.15 Brokers. Xxxxxxxx agrees to pay a brokerage commission to
Catalyst Real Estate Group and to Cornish & Xxxxx Commercial in connection with
the consummation of this Lease in accordance with a separate agreement. Tenant
and Landlord each represents and warrants that no other broker participated in
the consummation of this Lease and agrees to indemnify,
55
defend and hold the other party harmless against any liability, cost or expense,
including, without limitation, reasonable attorneys' fees, arising out of any
claims for brokerage commissions or other similar compensation in connection
with any conversations, prior negotiations or other dealings by the indemnifying
party with any other broker.
21.16 Memorandum Of Lease. At any time during the term of this Lease,
either party, at its sole expense, shall be entitled to record a memorandum of
this Lease and, if either party so elects, both parties agree to cooperate in
the preparation, execution, acknowledgement and recordation of such document in
reasonable form.
21.17 Corporate Authority. The person signing this Lease on behalf of
Tenant warrants that he or she is fully authorized to do so and, by so doing, to
bind Xxxxxx. As evidence of such authority, Xxxxxx shall deliver to Landlord,
upon or prior to execution of this Lease, a certified copy of a resolution of
Xxxxxx's board of directors authorizing the execution of this Lease and naming
the officer that is authorized to execute this Lease on behalf of Xxxxxx.
21.18 Execution and Delivery. This Lease may be executed in one or more
counterparts and by separate parties on separate counterparts, but each such
counterpart shall constitute an original and all such counterparts together
shall constitute one and the same instrument.
21.19 Survival. Without limiting survival provisions which would
otherwise be implied or construed under applicable law, the provisions of
Sections 2.6, 9.4, 11.2, 11.3, 11.4, 13.6, 14.6 and 21.5 hereof shall survive
the termination of this Lease with respect to matters occurring prior to the
expiration of this Lease.
IN WITNESS WHEREOF, the parties hereto have executed this
Lease as of the day and year first set forth above.
"Landlord"
BRITANNIA POINTE GRAND LIMITED
PARTNERSHIP, a Delaware limited
partnership
By: BRITANNIA POINTE GRAND,
LLC, a California limited liability
company, General Partner
By: /s/ X.X. Xxxxxxx
------------------------------------
X. X. Xxxxxxx
Its Manager
56
"Tenant"
SUGEN, INC., a Delaware corporation
By: /s/ Xxxxxxx Xxxxx-Freke
----------------------------------
Xxxxxxx Xxxxx-Freke
Its Chairman and Chief Executive
Officer
57
EXHIBITS
--------
EXHIBIT A Real Property Descriptions (Property and Center)
EXHIBIT B Site Plan
EXHIBIT C Workletter
EXHIBIT D Estimated Construction Schedule
EXHIBIT E Acknowledgement of Rent Commencement Date
EXHIBIT A
REAL PROPERTY DESCRIPTIONS
The Property
All that certain real property in the City of South San Francisco, County of San
Mateo, State of California, more particularly described as follows:
Lot 1 as shown on Parcel Map No. 91-284, "Being a resubdivision of the parcels
described in the deeds to Metal and Thermit Corporation, recorded in Book 293,
at Page 394 of Deeds; in Book 49, at Page 490, Official Records; in Book 77, at
Page 415, Official Records; and, except that parcel described in Book 1352, at
Page 373, Official Records," filed on February 25, 1992, in Book 65 of Parcel
Maps, in the Office of the Recorder of the County of San Mateo, California.
The Center
All that certain real property in the City of South San Francisco, County of San
Mateo, State of California, more particularly described as follows:
Lots 1, 2, 3 and 4, inclusive, as shown on Parcel Map No. 91-284, "Being a
resubdivision of the parcels described in the deeds to Metal and Thermit
Corporation, recorded in Book 293, at Page 394 of Deeds; in Book 49, at Page
490, Official Records; in Book 77, at Page 415, Official Records; and, except
that parcel described in Book 1352, at Page 373, Official Records," filed on
February 25, 1992, in Book 65 of Parcel Maps, in the Office of the Recorder of
the County of San Mateo, California.
59
EXHIBIT C
WORKLETTER
This Workletter ("Workletter") constitutes part of the Build-to-Suit
Lease dated as of June 11, 1997 (the "Lease") between BRITANNIA POINTE GRAND
LIMITED PARTNERSHIP, a Delaware limited partnership ("Landlord"), and SUGEN,
INC., a Delaware corporation ("Tenant"). The terms of this Workletter are
incorporated in the Lease for all purposes.
1. Defined Terms. As used in this Workletter, the following capitalized terms
have the following meanings:
(a) Approved Plans: Plans and specifications prepared by the applicable
Architect for the respective Improvements and approved by both Landlord and
Tenant in accordance with Paragraph 2 of this Workletter (subject to further
modification in accordance with such Paragraph 2).
(b) Architect: Chamorro Design Group, or any other architect selected
by Landlord in its sole discretion, with respect to the Building Shell, the Site
Improvements and any other Improvements which Landlord is to design pursuant to
this Workletter; any architect selected by Tenant with the written approval of
Landlord (which approval shall not be unreasonably withheld or delayed), with
respect to the Tenant Improvements and any other Improvements which Tenant is to
design pursuant to this Workletter.
(c) Building Shell: The shell of the Initial Building, as more fully
defined on Schedule C-1 attached to this Workletter.
(d) Change Order: See definition in Paragraph 2(e)(ii) hereof.
(e) Cost of Improvement: See definition in Paragraph 2(c) hereof.
(f) Final Completion Certificate: See definition in Paragraph 3(b)
hereof.
(g) Final Working Drawings: See definition in Paragraph 2(a) hereof.
(h) General Contractor: Concrete Shell Structures, Inc., or any other
general contractor selected by Landlord in its sole discretion, with respect to
Landlord's Work. The General Contractor with respect to Tenant's Work shall be
selected by Xxxxxx, subject to
60
Xxxxxxxx's approval (not to be unreasonably withheld or delayed), as
contemplated in Paragraph 5(a) hereof.
(i) Improvements: The Building Shell, Site Improvements, Tenant
Improvements and other improvements shown on the Approved Plans from time to
time and to be constructed on the Property pursuant to the Lease and this
Workletter.
(j) Landlord Delay: Any of the following types of delay in the
completion of construction of the Tenant Improvements:
(i) Any delay resulting from Xxxxxxxx's failure to furnish, in
a timely manner, information requested by Tenant or by the Architect or General
Contractor for Tenant's Work in connection with the design or construction of
Tenant's Work, or from Landlord's failure to approve in a timely manner any
matters requiring approval by Landlord; or
(ii) Any delay of any other kind or nature caused by Landlord
(or Landlord's contractors, agents or employees) or resulting from the
performance of Landlord's Work.
(k) Landlord's Work: The Building Shell and Site Improvements, and any
other Improvements which Landlord is to construct or install pursuant to this
Workletter or by mutual agreement of Landlord and Tenant from time to time.
(l) Punch List Work: Minor corrections of construction or decoration
details, and minor mechanical adjustments, that are required in order to cause
any applicable portion of the Improvements as constructed to conform to the
Approved Plans in all material respects and that do not materially interfere
with Xxxxxx's use or occupancy of the Initial Building and the Property.
(m) Site Improvements: The parking areas, driveways, landscaping and
other improvements to the Common Areas of the Property that are depicted on
Exhibit B to the Lease (as the same may be modified pursuant to the process of
development and approval of the Approved Plans).
(n) Structural Completion Certificate: See definition in Paragraph 3(a)
hereof.
(o) Tenant Delay: Any of the following types of delay in the completion
of construction of the Building Shell:
(i) Any delay resulting from Xxxxxx's failure to furnish, in a
timely manner, information requested by Landlord or by the Architect or General
Contractor for Landlord's Work in connection with the design or construction of
the Building Shell, or from Tenant's failure to approve in a timely manner any
matters requiring approval by Tenant;
61
(ii) Any delay attributable to any need to construct the
Building Shell in an "above standard" manner;
(iii) Any delay resulting from Change Orders, including any
delay resulting from the need to revise any drawings or obtain further
governmental approvals as a result of any Change Order; or
(iv) Any delay of any other kind or nature caused by Tenant
(or Tenant's contractors, agents or employees) or resulting from the performance
of Xxxxxx's Work.
(p) Tenant Improvements: The improvements to or within the Initial
Building, other than improvements constituting part of the Building Shell, shown
on the Approved Plans from time to time and to be constructed by Tenant (except
as otherwise provided herein) pursuant to the Lease and this Workletter,
including (but not limited to) the improvements listed on Schedule C-2 attached
to this Workletter.
(q) Tenant's Work: All of the Improvements other than those
constituting Landlord's Work, and such other materials and improvements as
Tenant deems necessary or appropriate for Tenant's use and occupancy of the
Initial Building.
(r) Unavoidable Delays: Delays due to acts of God, acts of public
agencies, labor disputes, strikes, fires, freight embargoes, rainy or stormy
weather, inability to obtain supplies, materials, fuels or permits, delays of
contractors or subcontractors, or other causes or contingencies beyond the
reasonable control of Landlord or Tenant, as applicable.
(s) Work Deadlines: The target dates for performance by the applicable
party of the steps listed in the Estimated Construction Schedule attached as
Exhibit D to the Lease.
(t) Capitalized terms not otherwise defined in this Workletter shall
have the definitions set forth in the Lease.
2. Plans, Cost of Improvements and Construction. Landlord and Tenant shall
comply with the procedures set forth in this Paragraph 2 in preparing,
delivering and approving matters relating to the Improvements.
(a) Approved Plans and Working Drawings for Landlord's Work. Landlord
shall promptly and diligently (and in all events prior to any applicable Work
Deadlines, subject to Tenant Delays and Unavoidable Delays) cause to be prepared
and delivered to Tenant, for approval, plans and specifications for the
Improvements constituting Landlord's Work. Following mutual approval of such
plans and specifications, Landlord shall then cause to be prepared and delivered
to Tenant, on or before the applicable Work Deadline (assuming timely delivery
by Tenant of all information, decisions and drawings required to be furnished or
made
62
by Xxxxxx in order to permit complete preparation of plans and drawings), final
working drawings and specifications for the Improvements constituting Landlord's
Work, including structural, fire protection, life safety, mechanical and
electrical working drawings and final architectural drawings (collectively,
"Landlord's Final Working Drawings"). Landlord's Final Working Drawings shall
substantially conform to the Approved Plans. Xxxxxxxx's obligation to deliver
Xxxxxxxx's Final Working Drawings to Tenant within the time period set forth
above shall be extended for any delay encountered by Landlord as a result of a
request by Tenant for changes in accordance with the procedure set forth below,
any other Tenant Delays, or any Unavoidable Delays. No later than the applicable
Work Deadline (assuming timely delivery of plans and drawings by Landlord),
Tenant shall either approve Landlord's Final Working Drawings or set forth in
writing with particularity any changes necessary to bring Landlord's Final
Working Drawings into substantial conformity with the Approved Plans or into a
form which will be acceptable to Tenant. In no event, however, shall Tenant have
the right to object to any aspect of the proposed plans and specifications or
proposed Xxxxxxxx's Final Working Drawings for Landlord's Work (including, but
not limited to, any change from the Approved Plans) that is necessitated by
applicable law, or to any aspect of such proposed plans and specifications or
proposed Landlord's Final Working Drawings that relates to the Building Shell or
Site Improvements, although Landlord agrees to consult with Tenant and to give
reasonable consideration to Tenant's views regarding functional characteristics
of the Building Shell and Site Improvements. Failure of Tenant to deliver to
Landlord written notice of disapproval and specification of required changes on
or before the applicable Work Deadline shall constitute and be deemed to be
approval of Landlord's Final Working Drawings. Upon approval, actual or deemed,
of Landlord's Final Working Drawings by Landlord and Tenant, Landlord's Final
Working Drawings shall be deemed to be incorporated in and considered part of
the Approved Plans, superseding (to the extent of any inconsistencies) any
inconsistent features of the previously existing Approved Plans.
(b) Approved Plans and Working Drawings for Tenant's Work. Tenant shall
promptly and diligently (and in all events prior to any applicable Work
Deadlines, subject to Landlord Delays and Unavoidable Delays) cause to be
prepared and delivered to Landlord, for approval, plans and specifications for
the Improvements constituting Tenant's Work. Following mutual approval of such
plans and specifications, Tenant shall then cause to be prepared and delivered
to Landlord final working drawings and specifications for the Improvements
constituting Tenant's Work, including any applicable life safety, mechanical and
electrical working drawings and final architectural drawings (collectively,
"Xxxxxx's Final Working Drawings"). Tenant's Final Working Drawings shall
substantially conform to the Approved Plans. Landlord shall either approve
Tenant's Final Working Drawings or set forth in writing with particularity any
changes necessary to bring Tenant's Final Working Drawings into substantial
conformity with the Approved Plans or into a form which will be acceptable to
Landlord. Upon approval of Xxxxxx's Final Working Drawings by Landlord and
Tenant, Xxxxxx's Final Working Drawings shall be deemed to be incorporated in
and considered part of
63
the Approved Plans, superseding (to the extent of any inconsistencies) any
inconsistent features of the previously existing Approved Plans.
(c) Cost of Improvements. "Cost of Improvement" shall mean, with
respect to any item or component for which a cost must be determined in order to
allocate such cost, or an increase in such cost, to Landlord and/or Tenant
pursuant to this Workletter, the sum of the following (unless otherwise agreed
in writing by Landlord and Tenant with respect to any specific item or component
or any category of items or components): (i) all sums paid to contractors or
subcontractors for labor and materials furnished in connection with construction
of such item or component; (ii) all costs, expenses, payments, fees and charges
(other than penalties) paid or incurred to or at the direction of any city,
county or other governmental or quasi-governmental authority or agency which are
required to be paid in order to obtain all necessary governmental permits,
licenses, inspections and approvals relating to construction of such item or
component; (iii) engineering and architectural fees for services rendered in
connection with the design and construction of such item or component
(including, but not limited to, the applicable Architect for such item or
component and an electrical engineer, mechanical engineer and civil engineer);
(iv) sales and use taxes; (v) testing and inspection costs; (vi) the cost of
power, water and other utility facilities and the cost of collection and removal
of debris required in connection with construction of such item or component;
and (vii) all other "hard" costs incurred in the construction of such item or
component in accordance with the Approved Plans and this Workletter. Cost of
Improvement shall not include any project management fee relating to the
construction of such item or component.
(d) Construction of Landlord's Work. Promptly following approval of
Xxxxxxxx's Final Working Drawings, Landlord shall apply for and use reasonable
efforts to obtain the necessary permits and approvals to allow construction of
all Improvements constituting Landlord's Work. Upon receipt of such permits and
approvals, Landlord shall, at Landlord's sole expense (except as otherwise
provided in the Lease or in this Workletter), diligently construct and complete
the Improvements constituting Landlord's Work substantially in accordance with
the Approved Plans, subject to Unavoidable Delays and Tenant Delays (if any).
Such construction shall be performed in a neat and workmanlike manner and shall
conform to all applicable governmental codes, laws and regulations in force at
the time such work is completed. Landlord shall use only union labor on or in
connection with Landlord's Work and shall use the General Contractor specified
in Paragraph 1(h) to construct all Improvements constituting Landlord's Work.
(e) Changes.
(i) If Landlord determines at any time that changes in
Landlord's Final Working Drawings or in any other aspect of the Approved Plans
relating to any item of Landlord's Work are required as a result of applicable
law or governmental requirements, or at the insistence of any other third party
whose approval may be required with respect to the
64
Improvements, or as a result of unanticipated conditions encountered in the
course of construction, then Landlord shall promptly (A) advise Tenant of such
circumstances and (B) cause revised Approved Plans and/or Landlord's Final
Working Drawings, as applicable, reflecting such changes to be prepared by
Architect and, to the extent such changes relate to items other than the
Building Shell or Site Improvements, submitted to Tenant for approval in
accordance with the procedure contemplated in Paragraph 2(a) hereof. Upon final
approval of revised drawings by Xxxxxxxx and Tenant (if applicable), Landlord's
Final Working Drawings and/or Approved Plans shall be deemed to be modified
accordingly.
(ii) If Tenant at any time desires any changes, alterations or
additions to the Approved Plans or Landlord's Final Working Drawings with
respect to any of Landlord's Work, Tenant shall submit a detailed written
request to Landlord specifying such changes, alterations or additions (a "Change
Order"). Upon receipt of any such request, Landlord shall promptly notify Tenant
of (A) whether the matters proposed in the Change Order are approved by Landlord
(which approval shall not be unreasonably withheld), (B) Landlord's estimate of
the number of days of delay, if any, which shall be caused by such Change Order
if implemented (including, without limitation, delays due to the need to obtain
any revised plans or drawings and any governmental approvals), and (C)
Xxxxxxxx's estimate of the increase, if any, which shall occur in the Cost of
Improvement for the items or components affected by such Change Order if such
Change Order is implemented (including, but not limited to, any costs of
compliance with laws or governmental regulations that become applicable because
of the requested Change Order). If Tenant notifies Landlord in writing, within
five (5) business days after receipt of such notice from Landlord, of Tenant's
approval of the Change Order (including the estimated delays and cost increases,
if any, described in Landlord's notice), then Landlord shall cause such Change
Order to be implemented and Tenant shall be responsible for all costs or cost
increases resulting from or attributable to the Change Order, subject to the
provisions of Paragraph 4 hereof. If Xxxxxx fails to notify Landlord in writing
of Xxxxxx's approval of such Change Order within said five (5) business day
period, then such Change Order shall be deemed to be withdrawn and shall be of
no further effect.
3. Completion.
(A) When Landlord receives written certification from Architect that
construction of the foundation, structural slab on grade, underslab plumbing
work, structural steel framework, decking and concrete on second floor, roof
structure and installation of main fire sprinkler lines in the Initial Building
have been completed in accordance with the Approved Plans, Landlord shall
prepare and deliver to Tenant a certificate signed by both Landlord and
Architect (the "Structural Completion Certificate") certifying that the
construction of such portions of the Initial Building has been substantially
completed in accordance with the Approved Plans in all material respects and
specifying the date of that completion. The delivery of such Structural
Completion Certificate shall commence the running of the 180-day time period
until the Rent Commencement Date under Section 2.1 of the Lease.
65
(B) When Landlord receives written certification from Architect that
construction of the remaining Improvements constituting Landlord's Work has been
completed in accordance with the Approved Plans (except for Punch List Work),
Landlord shall prepare and deliver to Tenant a certificate signed by both
Landlord and Architect (the "Final Completion Certificate") certifying that the
construction of the remaining Improvements constituting Landlord's Work has been
substantially completed in accordance with the Approved Plans in all material
respects, subject only to completion of Punch List Work, and specifying the date
of that completion. Upon receipt by Tenant of the Final Completion Certificate,
the Improvements constituting Landlord's Work will be deemed delivered to Tenant
for all purposes of the Lease (subject to Landlord's continuing obligations with
respect to the Punch List Work).
(C) Notwithstanding any other provisions of this Workletter or of the
Lease, if Landlord is delayed in substantially completing any of Landlord's Work
necessary for issuance of the Structural Completion Certificate as a result of
any Tenant Delay, then the 180-day period between the delivery of the Structural
Completion Certificate and the Rent Commencement Date pursuant to Section 2.1 of
the Lease shall be reduced, day for day, by the number of days by which such
Tenant Delay delayed completion of the portions of Landlord's Work necessary for
issuance of the Structural Completion Certificate, and Tenant shall reimburse
Landlord in cash, within fifteen (15) days after written demand by Xxxxxxxx
(accompanied by reasonable documentation of the items claimed), for any
increased construction-related costs and expenses incurred by Landlord as a
result of the Tenant Delay.
(D) At any time within thirty (30) days after delivery of the
Structural Completion Certificate or the Final Completion Certificate, as
applicable, Tenant shall be entitled to submit one or more lists to Landlord
specifying Punch List Work to be performed on the applicable Improvements
constituting Landlord's Work, and upon receipt of such list(s), Landlord shall
diligently complete such Punch List Work at Landlord's sole expense. In the
event of any dispute as to completion of any item or component of Landlord's
Work, the certificate of the applicable Architect shall be conclusive. Promptly
after Landlord provides Tenant with the Final Completion Certificate, Landlord
shall cause the recordation of a Notice of Completion (as defined in Section
3093 of the California Civil Code) with respect to Landlord's Work.
4. Payment of Costs.
(a) Landlord's Work. Except as otherwise expressly provided in this
Workletter or by mutual written agreement of Landlord and Tenant, the cost of
construction of Landlord's Work shall be borne by Landlord at its sole cost and
expense, including any costs or cost increases incurred as a result of
Unavoidable Delays, governmental requirements or unanticipated conditions;
provided, however, that notwithstanding any other provisions of this Paragraph
4(a), to the extent the Cost of Improvement relating to the construction of any
item or component of Landlord's Work is increased as a result of any permitted
Change Order or any Tenant Delay, or as a result of any "above standard"
Building Shell components requested by
66
Tenant or otherwise necessitated by Xxxxxx's particular use requirements or by
the contemplated Tenant's Work, or as a result of any other plan changes or
compliance costs attributable to Tenant's particular use requirements or to the
contemplated Tenant's Work, the amount of the increase in the Cost of
Improvement with respect to such item or component shall be reimbursed by Tenant
to Landlord in cash or, by mutual agreement of Landlord and Tenant, may be
deducted from Landlord's maximum obligation under Paragraph 4(b) with respect to
the cost of Tenant's Work.
(b) Tenant's Work. Except as otherwise expressly provided in this
Workletter or by mutual written agreement of Landlord and Tenant, the cost of
construction of the Tenant Improvements shall be borne [...*...] by Landlord and
[...*...] by Tenant, up to a maximum Landlord's obligation of [...*...] per
square foot of space in the Initial Building (measured in accordance with
Section 3.1(b) of the Lease), equating to a total Cost of Improvements for the
Tenant Improvements of [...*...] per square foot. Tenant shall be responsible,
at its sole cost and expense (subject to any third-party financing arrangements
entered into by Tenant as contemplated in Section 11.4 of the Lease), for
payment of [...*...] of the first [...*...] per square foot of the Cost of
Improvements of the Tenant Improvements, for the entire Cost of Improvements of
the Tenant Improvements in excess of [...*...] per square foot (if any such
excess occurs) and for the entire cost of any Tenant's Work that is not part of
the Tenant Improvements, including (but not limited to), in each case, any costs
or cost increases incurred as a result of Unavoidable Delays, governmental
requirements or unanticipated conditions. If Landlord's share of the Cost of
Improvements of the Tenant Improvements is less than [...*...] per square foot
in the aggregate, the amount of such difference shall result in a rental
adjustment pursuant to Section 3.1(c) of the Lease. The timing, conditions and
other procedures for payment or disbursement of Landlord's share of the cost of
the Tenant Improvements (up to the maximum amount specified above) shall be
subject to mutual agreement of Landlord, Tenant and Landlord's lender (if any).
To the extent the Cost of Improvement with respect to the Tenant Improvements
exceeds [...*...] per square foot (reduced by [...*...] any amounts deducted
from Landlord's maximum payment obligation as a result of the final sentence of
Paragraph 4(a) hereof), whether as a result of Change Orders, Tenant Delays
and/or Unavoidable Delays or otherwise, the amount of such excess shall in all
events be Tenant's sole responsibility and expense.
5. Tenant's Work. On or before the applicable Work Deadline (subject to Landlord
Delays and Unavoidable Delays, if any), Tenant shall construct and install in
the Initial Building the Tenant's Work, substantially in accordance with the
Approved Plans or, with respect to Tenant's Work not shown on the Approved
Plans, substantially in accordance with plans and specifications prepared by
Tenant and approved in writing by Landlord (which approval shall not be
unreasonably withheld or delayed). Tenant's Work shall be performed in
accordance with, and shall in all respects be subject to, the terms and
conditions of the Lease (to the extent not inconsistent with this Workletter),
and shall also be subject to the following conditions:
---------------------------
*CONFIDENTIAL TREATMENT REQUESTED
67
(a) Contractor Requirements. The contractor engaged by Tenant for
Tenant's Work, and any subcontractors, shall be duly licensed in California,
shall use only union labor on or in connection with Tenant's Work and shall be
subject to Landlord's prior written approval, which approval shall not be
unreasonably withheld or delayed. Without limiting the generality of the
preceding sentence, Tenant shall engage only union contractors for the
construction and installation of Xxxxxx's furnishings, fixtures and equipment in
the Initial Building and shall require all such contractors engaged by Xxxxxx,
and all of their subcontractors, to use only union labor on or in connection
with such work.
(b) Costs and Expenses of Tenant's Work. Subject to Landlord's payment
or reimbursement obligations under Paragraph 4(b) hereof with respect to
Xxxxxxxx's share of the Cost of Improvements for the Tenant Improvements, Tenant
shall promptly pay all costs and expenses arising out of the performance of
Xxxxxx's Work (including the costs of permits) and shall furnish Landlord with
evidence of payment on request. Tenant shall provide Landlord with ten (10)
days' prior written notice before commencing any Tenant's Work. On completion of
Tenant's Work, Tenant shall deliver to Landlord a release and waiver of lien
executed by each contractor, subcontractor and materialman involved in the
performance of Xxxxxx's Work.
(c) Indemnification. Tenant shall indemnify, defend (with counsel
satisfactory to Landlord) and hold Landlord harmless from all suits, claims,
actions, losses, costs and expenses (including, but not limited to, claims for
workers' compensation, attorneys' fees and costs) based on personal injury or
property damage or contract claims (including, but not limited to, claims for
breach of warranty) arising from the performance of Tenant's Work. Tenant shall
repair or replace (or, at Landlord's election, reimburse Landlord for the cost
of repairing or replacing) any portion of the Improvements and/or any of
Landlord's real or personal property or equipment that is damaged, lost or
destroyed in the course of or in connection with the performance of Xxxxxx's
Work.
(d) Insurance. Tenant's contractors shall obtain and provide to
Landlord certificates evidencing workers' compensation, public liability and
property damage insurance in amounts and forms and with companies satisfactory
to Landlord.
(e) Rules and Regulations. Tenant and Xxxxxx's contractors shall comply
with any other rules, regulations and requirements that Landlord or General
Contractor may reasonably impose with respect to the performance of Xxxxxx's
Work. Tenant's agreement with Xxxxxx's contractors shall require each contractor
to provide daily cleanup of the construction area to the extent that such
cleanup is necessitated by the performance of Tenant's Work.
(f) Early Entry. Landlord shall permit entry of contractors into the
Initial Building for the purposes of performing Tenant's Work, subject to
satisfaction of the conditions set forth in the Lease. This license to enter is
expressly conditioned on the contractor(s) retained by Xxxxxx working in harmony
with, and not interfering with, the workers, mechanics and
68
contractors of Landlord. If at any time the entry or work by Xxxxxx's
contractor(s) causes any material interference with the workers, mechanics or
contractors of Landlord, permission to enter may be withdrawn by Landlord
immediately on written notice to Xxxxxx.
(g) Risk of Loss. All materials, work, installations and decorations of
any nature brought onto or installed in the Initial Building, by or at the
direction of Tenant or in connection with the performance of Tenant's Work,
before the commencement of the Term shall be at Tenant's risk, and neither
Landlord nor any party acting on Landlord's behalf shall be responsible for any
damage, loss or destruction thereof.
(h) Condition of Xxxxxx's Work. All work performed by Tenant shall be
performed in a good and workmanlike manner, shall be free from defects in
design, materials and workmanship, and shall be completed in compliance with the
plans approved by Landlord for such Tenant's Work in all material respects and
in compliance with all applicable governmental laws, ordinances, codes and
regulations in force at the time such work is completed.
(i) Deferral of Construction. Notwithstanding any other provisions of
this Paragraph 5, Tenant shall have the right to defer completion of some or all
of the Tenant Improvements in up to [...*...] square feet of the Initial
Building for up to eighteen (18) months after the Rent Commencement Date under
the Lease. Landlord and Tenant acknowledge, however, that even within the area
as to which such completion of Tenant Improvements is to be deferred, it is
likely to be necessary to complete a portion of the Tenant Improvements in that
area (such as, but not limited to, plumbing and HVAC) in order for the City of
South San Francisco to issue a certificate of occupancy (or reasonable
equivalent thereof) for the Initial Building at or about the Rent Commencement
Date, and that Xxxxxx's right to defer completion of Tenant Improvements will
not extend to any such work that is necessary in order to obtain a certificate
of occupancy for the Initial Building.
6. No Agency. Nothing contained in this Workletter shall make or constitute
Tenant as the agent of Landlord.
7. Survival. Without limiting survival provisions which would otherwise be
implied or construed under applicable law, the provisions of Paragraph 5(c) of
this Workletter shall survive the termination of the Lease with respect to
matters occurring prior to expiration of the Lease.
8. Miscellaneous. All references in this Workletter to a number of days shall be
construed to refer to calendar days, unless otherwise specified herein. In all
instances where Xxxxxx's approval is required, if no written notice of
disapproval is given within the applicable time period, at the end of that
period Tenant shall be deemed to have given approval and the next succeeding
time period shall commence. If any item requiring approval is disapproved by
Tenant in a timely manner, the procedure for preparation of that item and
approval shall be repeated.
---------------------------
*CONFIDENTIAL TREATMENT REQUESTED
69
IN WITNESS WHEREOF, the parties have executed this Workletter
concurrently with and as of the date of the Lease.
"Landlord"
BRITANNIA POINTE GRAND LIMITED
PARTNERSHIP, a Delaware limited
partnership
By: BRITANNIA POINTE GRAND,
LLC, a California limited liability
company, General Partner
By: /s/ X.X. Xxxxxxx
-----------------------------
X. X. Xxxxxxx
Its Manager
"Tenant"
SUGEN, INC., a Delaware corporation
By: /s/ Xxxxxxx Xxxxx-Xxxxx
------------------------------
Xxxxxxx Xxxxx-Xxxxx
Its Chairman and Chief Executive
Officer
70
Schedule C-1 to Workletter
DEFINITION OF BUILDING SHELL
The "Building Shell" as defined in the Workletter to which this Schedule C-1 is
attached shall consist of the following:
A standard shell for a building to be constructed for a biotech company,
considering the uses set forth in this Lease, including but not limited to the
following elements and improvements:
Building envelope (reinforced grade beam foundation on prestressed concrete
piles; ground floor to be 10" thick reinforced concrete slab supported
by concrete piles; second floor to have metal decking with concrete
topping slab; roof structure to be metal deck with concrete for mass
dampening in areas to receive mechanical equipment and rigid insulation
over the balance (at least R-19 to meet Title 24 calculations); roof
membrane to be built-up system, four-ply minimum including mineral
fiber cap sheet, with flashing and sealants; building structural
framing to consist of steel beams, girders, columns with a non-bearing
exterior curtain wall; seismic system utilizing steel braced frames;
floor system designed with live load capacity of 100 psf; roof live
load to be 20 psf with 50 psf in center bays to receive mechanical
loads; floor to floor heights of 17 feet)
Elevator pit
Interior stairs
Roof drains and drain lines
One (1) hour fire protection on columns and beams
Subsurface piping (water, gas, sewer lateral, storm water) sized to Tenant's use
requirements; sanitary plumbing gut line cost to be allocated 50% to
shell and 50% to Tenant Improvements
Trash enclosure/fence/metal gate
Two (2) or more rollup doors, one (1) dock high door or scissors lift
Utilities:
site lighting and exterior lighting
electric transformer
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underground electrical to building pull-section
gas to exterior meter on building
telephone conduit to building
site storm drain system
main sanitary sewer line under ground floor slab
domestic fire and water lines stubbed into building
automatic fire sprinkler system (for shell, but excluding drops to
suspended ceilings)
utility connection and development fees for systems which are part of
shell (but excluding fees based on facilities or elements that are
part of Tenant Improvements)
72
Schedule C-2 to Workletter
DEFINITION OF TENANT IMPROVEMENTS
The "Tenant Improvements" as defined in the Workletter to which this Schedule
C-2 is attached shall include, but not necessarily be limited to, the following:
Toilet cores
Elevator(s)
Specialty items, such as skylights
Variable air volume HVAC system
Building exhaust system
Service yard enclosures
Equipment pad
Roof top mechanical screen
Utilities:
All electrical beyond pull section, including electrical main
disconnect and distribution panels
Gas piping beyond main gas meter
Telephone conduit beyond utility company termination point (inside the
building), and PVC conduit for telephone/data connections (wiring or
fiber optics) to future buildings
Sanitary sewer lines to main "gut" line under ground floor
Laboratory gas piping
Communications wiring
Utility connection fees based on items that are part of Tenant
Improvements
Air Compressor with Dryer/Tank
Purified Water System with Storage Tank
Emergency Generator
Vacuum Pump
Casework
Fume Hoods, Laminor Flow Hoods
73
Mechanical, Electrical, Plumbing Infrastructure not included in Building Shell
and not otherwise described above
Automatic Gas Manifolds
Process Cooling Water Chiller
Animal Rooms, Epoxy Flooring, Animal Racks
Office Areas, Interior Partitioning, Floor Coverings, Lighting, Interior
Finishes
Cold Rooms
Tissue Culture Rooms
Automatic fire sprinkler system drops to suspended ceilings
74
EXHIBIT D
ESTIMATED CONSTRUCTION SCHEDULE
[to be promptly developed by Xxxxxxxx and reviewed and agreed
upon by the parties following execution of Lease, but in no
event later than June 23, 1997; among other things, shall (1)
include a series of window dates for significant tasks and
procedures, including (but not limited to) the need for Tenant
to provide details for shell modifications (steel, etc.) to
accommodate HVAC, plumbing, etc. within a period to be
specified, and (2) provide for an anticipated final completion
date for all tenant improvements and occupancy by Tenant no
later than October 31, 1998]
75
EXHIBIT E
ACKNOWLEDGEMENT OF RENT COMMENCEMENT DATE
This Acknowledgement is executed as of _________________, 199__, by
BRITANNIA POINTE GRAND LIMITED PARTNERSHIP, a Delaware limited partnership
("Landlord"), and SUGEN, INC., a Delaware corporation ("Tenant"), pursuant to
Section 2.4 of the Build-to-Suit Lease dated June ___, 1997 between Landlord and
Tenant (the "Lease") covering premises located at ________ East Grand Avenue,
South San Francisco, CA 94080 (the "Initial Building").
Landlord and Xxxxxx hereby acknowledge and agree as follows:
1. The Rent Commencement Date under the Lease is __________________,
199__.
2. The Termination Date under the Lease shall be _________________, 201__,
subject to any applicable provisions of the Lease for extension or early
termination thereof.
3. Based on the final cost of the Improvements and on any change orders,
delays and other factors reflected in that cost, the rent schedule under Section
3.1(a) of the Lease is amended to read as shown in the schedule attached hereto
and incorporated herein by this reference.
4. Tenant accepts the Initial Building and acknowledges the satisfactory
completion of all Improvements thereon required to be made by Landlord, subject
only to any applicable "punch
76
list" or similar procedures specifically provided under the Lease or under the
Workletter governing such work.
EXECUTED as of the date first set forth above.
"Landlord"
BRITANNIA POINTE GRAND LIMITED
PARTNERSHIP, a Delaware limited
partnership
By: BRITANNIA POINTE GRAND, LLC,
a California limited liability company,
General Partner
By: __________________________
Its Manager
"Tenant"
SUGEN, INC., a Delaware corporation
By: _______________________________
Its: ______________________________
77
