EXHIBIT 10.11
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LEASE
By and Between
PROVIDENT LIFE AND ACCIDENT
INSURANCE COMPANY,
a Tennessee corporation,
Landlord
and
MEGABIOS CORP.,
a California corporation,
Tenant
December 21, 1993
Pertaining to
Premises Located at
000 Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxx
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SUMMARY OF PRINCIPAL LEASE TERMS
(Notwithstanding this Summary,
the Express Terms of the Lease
Shall be Controlling over this Summary)
A. PARTIES
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1. Landlord: PROVIDENT LIFE AND ACCIDENT INSURANCE COMPANY, a
Tennessee corporation
2. Tenant: MEGABIOS CORP., a California corporation
B. BASIC LEASE PROVISIONS
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1. Premises: All of Building A and Portion of Building C at
((Sec.)1) 863 Mitten Burlingame, California
2. Rental Area: Twenty four thousand one hundred thirteen (24,113)
(Initial Estimate) rentable square feet
((Sec.)6(a))
3. Initial Term: Approximately five (5) years
((Sec.)3(a))
4. Targeted
Commencement Date: On or before November 1, 1994
((Sec.)3(c))
5. Basic Rent (Per
Rentable Square
Foot Per Month): Commencement Date through Month 30 = $0.68557
((Sec.)5) Month 31 through End of Initial Term = $0.76057
6. Tenant's Percentage
Share of Direct
Expenses: Fifteen and eighty-three hundredths percent
((Sec.)6(a)) (15.83%)
7. Base Year for
Direct Expenses: 1994
((Sec.)6(c))
8. Option Term: One five (5) year Option Term
((Sec.)3(b))
9. Option Term Basic
Rent: Commencement of Option Term
through Month 30 = $0.78557
(Per Rentable
Square Foot) Month 31 through End of Option Term = $0.81057
((Sec.)3(b))
10. Space Subject to
Option to Lease: All additional space in Building C during
((Sec.)1(c)) Initial Term
11. Semiannual Option
to Lease
Consideration: First Lease Year: None
((Sec.)1(c)(4)) Second Lease Year: $0.20 Per Rentable Square
Foot of Option Space
Third Lease Year: $0.40 Per Rentable Square
Foot of Option Space
Fourth Lease Year: $0.60 Per Rentable Square
Foot of Option Space
Fifth Lease Year: $0.80 Per Rentable Square
Foot of Option Space
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12. Space Subject to
Right of First
Refusal: All Space in 863 Mitten (which includes 866 Xxxxxxx)
((Sec.)1(d))
13. Address for Notices:
((Sec.)34)
LANDLORD: Provident Life and Accident Insurance Company
Corporate Properties
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Xx. Xxxxxx X. Xxxx
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
Copy to: X.X. Xxxxxxxx & Sons
Xxx Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attn: Xx. Xxxxxx X. Xxxxxxxx, Xx.
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
TENANT: MEGABIOS Corp.
Xxx Xxxxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Attn: Xx. Xxxxxxx X. Xxxxx, Vice President
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
Copy to: Heller, Ehrman, White, & XxXxxxxxx
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: K. Xxxxxxx Xxxxxx, Esq.
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
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TABLE OF CONTENTS
Page
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Premises
1. (a) Premises.................................................... 1
(b) Equipment License........................................... 1
(c) Option to Lease Additional Space............................ 2
(1) Option Notice.......................................... 2
(2) Leasing of Additional Space............................ 3
(3) Prerequisite to Exercise of Option..................... 4
(4) Option Consideration................................... 4
(5) Termination of Options................................. 4
(d) Right of First Refusal to Lease............................. 5
(1) Offer Notice........................................... 5
(2) Exercise of Right...................................... 5
(3) Lindlord's Contribution................................ 6
(4) Prerequisite to Exercise of Right...................... 7
(5) Existing FAA Space..................................... 7
Purpose
2. Purpose.......................................................... 7
Term
3. Term............................................................. 7
(a) Initial Term................................................ 7
(b) Option to Extend Initial Term............................... 7
(c) Commencement Date........................................... 8
Possession
4. Possession....................................................... 8
(a) Delay in Possession......................................... 8
(b) Early Possession............................................ 9
Rent
5. Rent............................................................. 10
Additional Rent
6. (a) Additional Rent............................................. 12
(b) Tax Increases and Assessments............................... 13
(c) Direct Expense Increases.................................... 13
Security
7. Security......................................................... 16
Uses Prohibited
8. Uses Prohibited.................................................. 17
Compliance with Law
9. Compliance with Law.............................................. 17
Alterations
10. Alterations...................................................... 18
Repairs
11. (a) Tenant's Repairs............................................ 18
(b) Landlord's Repairs.......................................... 19
Abandonment
12. Abandonment...................................................... 19
Liens
13. Liens............................................................ 19
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TABLE OF CONTENTS
(CONTINUED)
Page
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Assignment and Subletting
14. Assignment and Subletting........................................ 19
Indemnification
15. Indemnification.................................................. 21
Insurance
16. (a) Tenant's Insurance.......................................... 22
(1) Liability Insurance................................... 22
(2) Tenants Property Insurance............................ 22
(3) Worker's Compensation Insurance....................... 23
(4) Business Interruption/Extra Expense Insurance......... 23
(5) Other Coverage........................................ 23
(6) Insurance Criteria.................................... 23
(7) Evidence of Coverage.................................. 23
(b) Landlord's Insurance........................................ 23
(c) Assumption of Risk/Walvers of Subrogation/
Minimization of Duplication of Insurance
Coverage/Limitations on Liability and Damages............... 24
(1) Purpose............................................... 24
(i) Property Insurance.............................. 24
(ii) Damage to Business and Loss of Rents............ 25
(iii) Injury and Death to Individuals................. 25
(iv) Limitation of Liability and Damages............. 25
(d) Allocation of Insured Risks/Subrogation..................... 26
Utilities
17. Utilities........................................................ 26
Personal Property and Other Taxes
18. Personal Property and Other Taxes................................ 26
Rules and Regulations
19. Rules and Regulations............................................ 26
Holding Over
20. Holding Over..................................................... 27
Subordination
21. Subordination.................................................... 27
Entry by Landlord
22. Entry by Landlord................................................ 28
Insolvency or Bankruptcy
23. Insolvency or Bankruptcy......................................... 28
Default
24. Default.......................................................... 28
Destruction or Damage
25. Destruction or Damage............................................ 29
Eminent Domain
26. Eminent Domain................................................... 31
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TABLE OF CONTENTS
(CONTINUED)
Page
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Clauses, Plats and Riders
27. Clauses, Plats and Riders........................................ 31
Sale by Landlord
28. Sale by Landlord................................................. 31
Estoppel Certificates
29. Estoppel Certificates............................................ 31
Right or Landlord to Perform
30. Right of Landlord to Perform..................................... 32
Attorneys' Fees
31. Attorneys' Fees.................................................. 32
Surrender of Premises
32. Surrender of Premises............................................ 32
Waiver
33. Waiver........................................................... 32
Notices
34. Notices.......................................................... 33
Leasehold Mortgage
35. Leasehold Mortgage............................................... 33
(a) Leasehold Mortgage Authorized............................... 33
(b) Notice to Landlord.......................................... 34
(c) Definitions................................................. 34
(i) "Institutional Investor".............................. 34
(ii) "Leasehold Mortgage".................................. 34
(iii) "Leasehold Mortgagee"................................. 34
(iv) "Leasehold Mortgage Purchaser"........................ 34
(d) Consent of Leasehold Mortgagee Required..................... 35
(e) Default Notice.............................................. 35
(f) Notice to Leasehold Mortgagee............................... 35
(g) Procedure on Default........................................ 36
(h) New Lease................................................... 37
(i) Casualty Loss............................................... 38
(j) Legal Proceedings........................................... 38
(k) Security Deposit............................................ 38
(l) Erroneous Payments.......................................... 38
(m) Sublease Rentals............................................ 39
(n) Equipment Mortgages Authorized.............................. 39
(o) Notices..................................................... 39
(p) Leasehold and Equipment Mortgagee Benefitted................ 40
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TABLE OF CONTENTS
(CONTINUED)
Page
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Defined Terms and Marginal Headings
36. Defined Terms and Marginal Headings.............................. 40
Time and Applicable Law
37. Time and Applicable Law.......................................... 40
Successors
38. Successors....................................................... 40
Entire Agreement
39. Entire Agreement................................................. 40
Late Charge
40. Late Charge...................................................... 40
No Discrimination
41. No Discrimination................................................ 40
Additional Provisions
42. Additional Provisions............................................ 41
Existing Tenant
43. Existing Tenant.................................................. 41
Landlord's Work
44. Landlord's Work.................................................. 43
Tenant Improvements
45. (a) Tenant Improvement Plans.................................... 45
(1) Tenant's Designer...................................... 45
(2) Space Plans............................................ 45
(3) Engineering Plans...................................... 45
(4) Construction Documents................................. 45
(b) Permits and Approvals....................................... 46
(c) Seismic Upgrade............................................. 47
(d) Construction................................................ 48
(e) Tenant Construction Allowance............................... 49
(1) Basic Allowance........................................ 49
(2) Tenant Improvement Account............................. 49
(f) Change Orders............................................... 50
(g) Construction Materials...................................... 51
(h) Prompt Construction/General Responsibility for Costs........ 51
(i) Reasonable Diligence........................................ 51
Construction-Related Definitions
46. Construction-Related Definitions................................. 51
Hazardous Materials
47. Hazardous Materials.............................................. 52
Parking
48. Parking.......................................................... 55
Signs
49. Signs............................................................ 56
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Page
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Broker
50. Broker........................................................... 56
Other Documents; Cooperation of Parties
51. Other Documents; Cooperation of Parties.......................... 56
Counterparts
52. Counterparts..................................................... 56
Recording
53. Recording........................................................ 56
Authorization
54. Authorization.................................................... 56
Separability
55. Separability..................................................... 57
Covenants and Conditions
56. Covenants and Conditions......................................... 57
Quiet Enjoyment
57. Quiet Enjoyment.................................................. 57
Cumulative Remedies
58. Cumulative Remedies.............................................. 57
Reasonable Approval Standard
59. Reasonable Approval Standard..................................... 57
EXHIBITS
Exhibit A. Site Plan.............................................. 59
Exhibit A-1. Equipment Area........................... 63
Exhibit A-2. Reserved Parking - Existing Tenant
Vacated.................................. 61
Exhibit A-3. Reserved Parking - Existing Tenant
Remains.................................. 62
Exhibit A-4. Approved Signage Locations............... 63
Exhibit B. Commencement Date Memorandum........................... 64
Exhibit C. Direct Expenses........................................ 65
Exhibit D. Rules and Regulations.................................. 66
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LEASE
Parties This Lease is made as of the 21st day of December, 1993, between
PROVIDENT LIFE AND ACCIDENT INSURANCE COMPANY, a Tennessee
corporation, as "Landlord," and MEGABIOS CORP., a California
corporation, as "Tenant."
WITNESSETH:
Premises 1. (a) Premises. Landlord hereby leases to Tenant and Tenant
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hereby hires from Landlord those certain premises ("Premises")
shown as the shaded portions of the site plan attached as Exhibit
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A (the "Site Plan"), which Premises consist of: (i) subject to
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the provisions of paragraph 43, all of the rentable space within
Building A as shown on the Site Plan commonly known by the street
address of 863 Mitten Road, Burlingame, California ("Building
A"); and (ii) a portion of the rentable space within the adjacent
Building C as shown on the Site Plan commonly known by the street
address of 863 Mitten Road, Burlingame, California ("Building
C"), with the aggregate space being rented in Building A and
Building C being approximately 24,113 rentable square feet.
Building A and Building C are collectively referred to in this
Lease as the "Building." The Building is part of two connected
buildings containing a total of approximately 94,274 rentable
square feet of space commonly known as 000 Xxxxxx Xxxx and 000
Xxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxx (collectively "863 Mitten").
863 Mitten, the four (4) other buildings shown on the Site Plan,
the real property on which 863 Mitten and those other buildings
are located ("Property"), and all other improvements and common
areas located on the Property, are collectively referred to
herein as the "Project."
The parties agree that the rentable area of the Premises set
forth above are their best estimates as of the date of this
Lease, and that the rentable area of the Premises, and the rent
(as defined in paragraph 5(b)) and all other amounts calculated
by reference to rentable area shall be recalculated as provided
in paragraph 5(e) upon completion of the Tenant Improvements (as
defined in paragraph 45) or any other change to the Premises.
l. (b) Equipment License. In addition, Tenant shall have a
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license (i) to use a portion of the Property, which portion shall
be adjacent to the Premises on the east side of the Building,
shall be approximately 800 gross square feet of space including
two (2) adjacent parking stalls and the existing landscaped area
shown on Exhibit A-l (the "Equipment Area"), (ii) to use and
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erect (as part of the First Phase (as defined in paragraph 45(h))
an outdoor platform on the roof of 863 Mitten on which to install
mechanical equipment (the "Roof Platform"), which Roof Platform
shall not exceed 600 square feet in size and the location of such
platform, which must be over the Premises, shall be designed by
Tenant and shall be subject to Landlord's approval as part of
Landlord's approval of Tenant's Space Plans (as defined in
paragraph 45(a)(2)) and Construction Documents (as defined in
paragraph 45(a)(4)), each for the purpose of installing,
maintaining and operating thereon certain mechanical equipment
necessary for Tenant's use of the Premises, on the following
terms and conditions:
(1) Tenant shall deliver notice to Landlord requesting
Landlord's consent to the installation of such equipment.
Tenant's notice shall describe: the equipment to be installed;
Tenant's proposed location for the equipment; whether or not the
equipment emits noise, vibrations, fumes, pollutants,
contaminants or other
substances; any applicable laws regarding Hazardous Materials (as
defined in paragraph 47), permits, licenses, consents or
approvals applicable to the installation, operation, use,
maintenance or removal of the equipment; and Tenant's proposal to
screen view of the equipment and to minimize any noise,
vibrations, fumes, pollutants, contaminants or other substances
emitted from the equipment. Tenant shall also provide any other
information reasonably requested by Landlord.
(2) Landlord shall not unreasonably withhold its consent to
Tenant's request; provided, however, Landlord shall not be
required to consent to the installation, use or operation of any
storage tanks, drums, barrels, xxxxx, clarifiers or other
containers to be installed below the surface of the ground, but
Landlord shall not unreasonably withhold its consent to any in-
ground sumps or pits or above-ground storage tanks provided that
Tenant shall be obligated to comply with all applicable Hazardous
Materials laws and to remove the same upon expiration or
termination of the Lease Term (as defined in paragraph 3(b)). In
addition, Landlord may condition its consent on Tenant's
compliance with any reasonable requirements of Landlord
including, without limitation, changes to Tenant's proposal
outlined in its notice to Landlord as Landlord may reasonably
require.
(3) If Landlord consents to Tenant's request, Tenant shall
install, use, operate, maintain and remove the equipment in
compliance with all applicable laws and any conditions imposed by
Landlord in granting its consent. Notwithstanding any provision
to the contrary in this Lease, Tenant's license pursuant to this
paragraph 1(b) shall be personal to Tenant, and may not be
assigned, sublet or transferred to any other person or entity
except in conjunction with any assignment of this Lease or
subletting of all or a portion of the Premises.
(4) Upon the expiration or earlier termination of this Lease,
the license granted under this paragraph 1(b) shall automatically
terminate.
1. (c) Option to Lease Additional Space. Subject to the terms
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and conditions of this paragraph 1(c), Tenant shall have the
following option to lease additional space in Building C during
the Initial Term (as defined in paragraph 3(a)):
(1) Option Notice. If Tenant desires to lease additional
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space in Building C during the Initial Term of this Lease
pursuant to this paragraph 1(c), Tenant shall provide Landlord
with written notice thereof ("Option Notice") no less than (30)
days before Tenant desires to have such additional space
delivered to Tenant, which notice shall identify the Increment
(as defined below) that Tenant desires to lease and the
Additional Space Delivery Date (as defined below). An "Increment"
of space is a separately demised and discrete unit of space
consisting of at least 1,000 contiguous rentable square feet
within Building C, accessible to a corridor or adjacent to the
Premises and capable of being leased as a unit in compliance with
all applicable laws, rectangular in shape, which does not include
a disproportionate amount of space on either the east or south
walls of the space subject to Tenant's option, and which, if
Tenant's option as to any remaining space in Building C
terminates, would result in such remaining space being reasonably
suitable to lease to other tenants, including reasonable access
to the existing bathrooms in Building C; provided that the exact
size and location of which, within the aforementioned parameters,
shall be in Tenant's reasonable discretion. In addition, no
Increment shall include the
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existing bathrooms in Building C, unless Tenant will then be
leasing all of Building C. The Option Notice shall include (a)
the date on which Tenant desires that Landlord deliver to Tenant
the Increment for Tenant's exclusive use and occupancy for the
purpose of commencement by Tenant of tenant improvements (the
"Additional Space Delivery Date"), which date shall be no less
than thirty (30) days after the date of delivery of Tenant's
notice; and (b) a computation of rentable square feet within such
space (which shall be equal to the actual usable floor area
thereof multiplied by the load factor to be used by Landlord
pursuant to the provisions of paragraph 5(e) ("Adjusted Load
Factor").
(2) Leasing of Additional Space. If Tenant duly exercises
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an option to lease additional space, Landlord shall deliver
possession of the Increment to Tenant on the date specified in
the Option Notice for that Increment. On the date of delivery of
that Increment to Tenant for Tenant's exclusive use and occupancy
that Increment shall become subject to this Lease and shall be
leased to Tenant upon the same terms and conditions as set forth
herein for the then-remaining portion of the Initial Term, except
that each Increment shall be delivered by Landlord to Tenant in
its present "as-is" condition and, except as set forth below,
Landlord shall have no obligation to perform or to pay for any
alterations or improvements therein to prepare the same for
Tenant's occupancy. Notwithstanding the foregoing: (a) Landlord
shall be responsible for removing, at its sole cost and expense,
any Hazardous Materials present or used in or on the floor,
walls, ceiling or other items in the interior area of that
Increment before Landlord delivers possession thereof to Tenant,
with any such removal to be performed in compliance with all
applicable Hazardous Materials laws; (b) Landlord shall pay to
Tenant a tenant improvement allowance (an "Increment Allowance")
of ten dollars ($10.00) per rentable square foot of the Increment
multiplied by a fraction, the numerator of which is the number of
days remaining in the Initial Term as of the date Tenant will
begin rent for the Increment, and the denominator of which is the
number of days in the Initial Term; and (c) Landlord may perform
any seismic work or any other work necessary to cause any
Increment to comply with any applicable laws, ordinances or
codes. Landlord will make payments to Tenant from the Increment
Allowance only in progress payments not more frequently than once
per month, and shall only make payments equal to the amount
Tenant has theretofore accrued as an obligation to Contractor or
subcontractors, and only after receipt by Landlord of conditional
mechanics' lien releases (which mechanics' lien releases shall,
at Landlord's option, be executed by subcontractors, labor
suppliers and materialmen, as reasonably determined by Landlord,
in addition to Contractor). Landlord may withhold the last
fifteen percent (15%) of the Increment Allowance until the lien-
free expiration of the time for the filing of any mechanics'
liens claimed or which might be filed on account of any work
ordered by Tenant or Contractor or any subcontractor of Tenant,
or if any liens are filed, the subsequent receipt of
unconditional lien releases executed by all applicable
contractors (and as reasonably required by Landlord, from any
laborers, mechanics, materialmen, suppliers and design
professionals) who performed tenant improvement work for the
Increment leased pursuant to Tenant's exercise of that particular
option. Tenant may use an Increment Allowance only for the
particular Increment leased pursuant to Tenant's exercise of that
particular option or for associated improvements or alterations
to the immediately adjoining space leased by Tenant which
reasonably relate to integrating the Increment with the adjoining
space.
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The commencement date of the rental obligations as to any
Increment shall begin upon the earlier of (i) the substantial
completion of the tenant's alterations and improvements
associated with such Increment (including any alterations or
improvements to the adjoining space which reasonably relate to
integrating the Increment with the immediately adjoining space)
as certified to Landlord by Tenant's architect, or, if
applicable, the date all such alterations or improvements would
have been substantially complete but for Tenant Delay (as defined
in paragraph 46(b)), (ii) Tenant's occupancy of the Increment for
the conducting of business therein or (iii) one hundred twenty
(120) days after the Additional Space Delivery Date.
(3) Prerequisite to Exercise of Option. Notwithstanding
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anything in this paragraph 1(c) to the contrary, if at the time
of Tenant's exercise of its option to lease any additional space,
Tenant is in default under this Lease (beyond any applicable cure
period), Tenant shall have no right at that time to lease such
additional space and Tenant's attempt to exercise the option to
lease such additional space shall be null and void.
(4) Option Consideration. As consideration for Tenant's
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options to lease additional space pursuant to this paragraph
1(c), Tenant shall pay to Landlord, on the first day of the
thirteenth full calendar month of the Initial Term and on each
day which is six (6) months thereafter, without prior demand,
offset or deduction, the following amounts:
A. During the twelve (12) month period commencing on the
first day of the thirteenth full calendar month of the Initial
Term, Tenant shall pay to Landlord twenty cents ($0.20) per
rentable square foot of additional space in Building C per month;
B. During the twelve (12) month period commencing on the
first day of the twenty-fifth full calendar month of the Initial
Term, Tenant shall pay to Landlord forty cents ($0.40) per
rentable square foot of additional space in Building C per month;
C. During the twelve (12) month period commencing on the
first day of the thirty-seventh full calendar month of the
Initial Term, Tenant shall pay to Landlord sixty cents ($0.60)
per rentable square foot of additional space in Building C per
month; and
D. During the twelve (12) month period commencing on the
first day of the forty-ninth full calendar month of the Initial
Term, Tenant shall pay to Landlord eighty cents ($0.80) per
rentable square foot of additional space in Building C per month.
Landlord shall be entitled to retain all option consideration
paid by Tenant, which shall be non-refundable to Tenant under all
circumstances, and which shall not be applicable to any other
rent payable under this Lease, except as expressly provided in
paragraph 1(c) (5).
(5) Termination of Options. If Tenant fails to pay any
----------------------
option consideration pursuant to paragraph 1(c) (4) within five
(5) business days after written notice from Landlord that such
consideration is due, all of Tenant's options to lease additional
space pursuant to this paragraph 1(c) shall automatically
terminate and be of no further force (and Tenant shall in such
event of termination of the options to lease, be relieved of any
obligation to make any further payments of option consideration
regardless of their scheduled payment date). However, Tenant may
at any time terminate its option as to
-4-
any or all of the additional space then subject to Tenant's option by delivering
written notice to Landlord identifying the additional space as to which the
option is terminated, in which event the option consideration shall be reduced
to an amount equal to the applicable rate set forth in paragraph 1(c)(4)
multiplied by the remaining rentable square feet of additional space which duly
remains subject to Tenant's option. If any lease of additional space commences
within the six-month period following any scheduled date of payment of option
consideration for that space (and Tenant paid that option consideration for that
space), Tenant shall be entitled to a pro rata credit against the rent for such
additional space equal in amount to (i) the option consideration paid for that
six-month period allocable to the additional space as to which the lease is so
commencing multiplied by (ii) the percentage of the six-month option period
which will remain after the commencement date of the lease as to such additional
space. In all events, Tenant's option to lease additional space shall
automatically terminate on the last day of the Initial Term. Tenant shall pay
the applicable option consideration until the earlier of (i) the date Tenant
gives notice of exercise of an option as to an Increment pursuant to this
paragraph 1(c), (ii) the date Landlord receives Tenant's notice terminating its
option to lease any or all of the additional space pursuant to this paragraph
1(c), or (iii) the termination of Tenant's options to lease due to its failure
to pay any option consideration within the five business day notice period
provided above. Notwithstanding the occurrence of an event described in clauses
(i) or (ii) above as to only a portion of the available space, Tenant shall
continue to pay applicable option consideration with respect to all remaining
available space.
l. (d) Right of First Refusal to Lease. Subject to the terms and conditions
-------------------------------
of this paragraph 1(d), Tenant shall have the following right of first refusal
to lease additional space in 863 Mitten (other than the additional space in
Building C during any period that such additional space instead remains subject
to the option to lease pursuant to paragraph 1(c) above) during the Lease Term:
(1) Offer Notice. Within ten (10) days after Landlord receives a bona
------------
fide, arm's length, written offer to lease any such space from a third party
which Landlord would accept, Landlord shall deliver to Tenant written notice
("Offer Notice") of the material terms of that offer. Tenant shall exercise its
right of first refusal to lease that additional space, if at all, by complying
with the provisions of paragraph l(d)(2).
(2) Exercise of Right. Tenant shall exercise its right of first refusal
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to lease all (but not less than all) of the space identified in the Offer Notice
on the terms set forth therein by delivering to Landlord written notice within
five (5) business days after that Offer Notice has been delivered by Landlord to
Tenant. If Tenant does not give to Landlord Tenant's written notice
unconditionally accepting to lease the space identified, and on the terms set
forth, in the Offer Notice within the 5-business day period, Tenant shall be
conclusively deemed to have rejected that Offer Notice, and Landlord shall
thereupon be free to lease that space to any third party on the same terms set
forth in that Offer Notice or on such other terms as Landlord and any third
party may in good faith negotiations agree, provided (i) such other terms are
not materially more favorable to such third party than the terms offered to
Tenant and (ii) Landlord enters into such a lease of that additional space
within one hundred twenty (120) days after that Offer Notice is
-5-
delivered to Tenant. If Tenant unconditionally accepts the Offer Notice, then
Tenant shall sign and deliver to Landlord a new lease covering the additional
space substantially in the form of this Lease but reflecting the economic terms
of the Offer Notice (except as expressly modified by this paragraph 1(d)) within
ten (10) business days after Tenant receives that new lease from Landlord.
(3) Landlord's Contribution. If Tenant duly exercises a right of first
-----------------------
refusal to lease additional space and the initial lease term for such space is
five (5) years or longer, Landlord shall contribute an amount equal to ten
dollars ($10.00) per rentable square foot of such additional space for Tenant's
alterations and improvements to such space (and for any associated alterations
or improvements to any adjoining space leased by Tenant which reasonably relate
to integrating the additional space with the adjoining space). If Tenant duly
exercises a right of first refusal to lease additional space and the initial
lease term for such space is less than five (5) years, Landlord's contribution
shall be an amount equal to ten dollars ($10.00) per rentable square foot of
such additional space multiplied by a fraction, the numerator of which is the
initial lease term for such space, and the denominator of which is five (5)
years. Notwithstanding the foregoing, if an Offer Notice provides for a tenant
improvement allowance exceeding, or tenant improvements by Landlord the cost of
which exceed, ten dollars ($10.00) per rentable square foot, then Landlord's
contribution (the "Additional Allowance") with respect to the additional space
leased pursuant to that Offer Notice shall be calculated at the rate set forth
in that Offer Notice. Landlord will make payments to Tenant from the Additional
Allowance only in progress payments not more frequently than once per month, and
shall only make payments equal to the amount Tenant has theretofore accrued as
an obligation to Contractor or subcontractors, and only after receipt by
Landlord of conditional mechanics' lien releases (which mechanics' lien releases
shall, at Landlord's option, be executed by subcontractors, labor suppliers and
materialmen, as reasonably determined by Landlord, in addition to Contractor).
Landlord may withhold the last fifteen percent (15%) of the Additional Allowance
until the lien-free expiration of the time for the filing of any mechanics'
liens claimed or which might be filed on account of any work ordered by Tenant
or Contractor or any subcontractor of Tenant, or if any liens are filed, the
subsequent receipt of unconditional lien releases executed by all applicable
contractors (and as reasonably required by Landlord, from any laborers,
mechanics, materialmen, suppliers and design professionals) who performed tenant
improvement work for the additional space leased pursuant to Tenant's exercise
of that particular option. Tenant may use the Additional Allowance only for the
particular additional space leased pursuant to Tenant's exercise of that
particular right of first refusal or for associated improvements or alterations
to the immediately adjoining space.
The commencement date of the rental obligations as to any additional space shall
begin upon the earlier of (i) the substantial completion of the tenant's
alterations and improvements associated with such additional space (including
any alterations or improvements to the adjoining space which reasonably relate
to integrating the additional space with the immediately adjoining space) as
certified to Landlord by Tenant's architect or, if applicable, the date all such
alterations or improvements would have been substantially complete but for
Tenant Delay, (ii) Tenant's occupancy of the additional space for the conducting
of business therein, or (iii) one hundred
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twenty (120) days after the delivery of the exclusive use and
occupancy of the additional space to Tenant for the purpose of
commencement by Tenant of its alterations and improvements (or such
longer period of time as may be provided for in the Offer Notice);
provided that the commencement date as so established hereinabove
shall not deny Tenant the right to any post-tenant occupancy free rent
period provided for in the Offer Notice. Landlord shall be responsible
for removing, at its sole cost and expense, any Hazardous Materials
present or used in or on the floor, walls, ceiling or other items in
the interior area of such additional space before Landlord delivers
possession thereof to Tenant, with any such removal to be performed in
compliance with all applicable Hazardous Materials laws.
(4) Prerequisite to Exercise of Right. Notwithstanding
---------------------------------
anything in this paragraph 1(c) to the contrary, if at the time of
Tenant's exercise of its right of first refusal to lease any
additional space, Tenant is in default under this Lease (beyond any
applicable cure period), Tenant's attempt to exercise the right of
first refusal to lease such additional space shall be null and void,
and in any such case Landlord shall have the right at that time to
lease such additional space to a third party for a term of Landlord's
sole discretion.
(5) Existing FAA Space. The Federal Aviation Administration
------------------
("FAA") currently leases approximately 8,000 square feet of usable
space in the northern portion of 863 Mitten commonly referred to as
"Building B" (the "FAA Space") pursuant to a lease which expires
August 31, 1996, and which by its terms does not provide for any
renewal option (the "FAA Lease"). Landlord, if it should desire to
renew the FAA Lease, may on or prior to August 31, 1996 by written
notification to Tenant of the same, renew or extend the term of the
FAA Lease for a term not to exceed one (1) year (through August 31,
1997), without Tenant having any right of first refusal as to the
same. Any renewal for a longer term or for additional space shall be
subject to Tenant's right of first refusal as provided in paragraph
1(d) above (excluding this paragraph l(d)(5)). If Tenant exercises any
right of first refusal to lease the FAA Space, Landlord may allow the
FAA nevertheless to continue to lease and stay in the FAA Space until
Tenant is ready to commence construction therein.
1. (e) Said letting and hiring is upon and subject to the terms,
covenants and conditions herein set forth and Tenant covenants as a
material part of the consideration for this Lease to keep and perform
each and all of said terms, covenants and conditions by it to be kept
and performed and that this Lease is made upon the condition of such
performance.
Purpose 2. The Premises shall be used for a laboratory and offices, and
storage and related uses incident thereto, including animal
facilities, and for no other use or purpose without the prior written
consent of Landlord.
Term 3. (a) Initial Term. The initial term of this Lease shall be for
------------
approximately five (5) years, commencing on the Commencement Date (as
defined in paragraph 3(c)) and ending on the last day of the sixtieth
(60th) full calendar month following the Commencement Date (the
"Initial Term").
3. (b) Option to Extend Initial Term. Provided that Tenant is not
-----------------------------
in default of any of the provisions of this Lease, at the time of the
exercise of the option to extend set forth in this paragraph 3(b),
Tenant may elect to
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extend tne Initial Term for one (1) additional five (5) year
period ("Option Term") by delivering to Landlord at least one
hundred eighty (180) days, but not more than three hundred sixty-
five (365) days, before the end of the Initial Term a written
notice of that election ("Extension Notice"). Landlord's failure
to so receive an Extension Notice shall be deemed Tenant's
election not to extend the Initial Term, and Tenant shall
thereafter have no further right to extend the Initial Term. If
Tenant duly delivers its Extension Notice, the term of this Lease
shall thereupon be extended in accordance with Tenant's election,
and the Option Term shall begin on the day immediately following
the last day of the Initial Term. The Option Term shall be subject
to all the terms and conditions of this Lease, except that: (i)
the Basic Rent for the first thirty (30) months of the Option Term
shall be increased to seventy-eight and 557/1000 cents ($0.78557)
per rentable square foot of the Premises; (ii) the Basic Rent for
the last thirty (30) months of the Option Term shall be increased
to eighty-one and 57/1000 cents ($0.81057) per rentable square
foot of the Premises; and (iii) after Tenant exercises its Option
Term, Tenant shall have no further right to extend the Lease Term
(as defined below).
The Initial Term and the Option Term are collectively referred to
herein as the "Lease Term."
3. (c) Commencement Date. The Initial Term shall commence on the
-----------------
earlier of the following two dates to occur ("Commencement Date"):
(i) November 1, 1994; or (ii) one (1) month after the date of
substantial completion of the Tenant Improvements and issuance of
a certificate of occupancy as to the Premises (during which one
month period Tenant may occupy the Premises for the conducting of
its business upon otherwise complying with the insurance
requirements of this Lease without incurring any obligation to pay
Basic Rent or additional rent other than any utilities consumed by
Tenant during such period). For purposes of this Lease, the Tenant
Improvements (or any other construction work hereunder) shall be
deemed to have been substantially completed as of the date on
which Tenant's architect or engineer issues a certificate to
Landlord and Tenant stating that the Tenant Improvements (or such
other construction work) have been completed in accordance with
the Final Tenant Plans (or such other applicable plans) or, if
applicable, the date the Tenant Improvements (or such other
construction work) would have been substantially complete but for
Tenant Delay. The outside calendar date provided for the
Commencement Date of the Initial Term (or for the commencement of
rental obligations with respect to any additional space pursuant
to paragraphs 1(c) or 1(d) hereof), shall be extended for any
delays in the construction of the applicable tenant's alterations
and improvements caused by any Landlord Delay (as defined in
paragraph 46(c)). Upon determination of the actual Commencement
Date, the parties shall sign a commencement date memorandum in the
form attached hereto as Exhibit B, which shall become a part of
---------
this Lease. However, Tenant's failure to execute the commencement
date memorandum shall not affect the actual Commencement Date or
expiration date of this Lease. If the Commencement Date occurs on
the first day of a calendar month, then the Initial Term shall be
five (5) years. If the Commencement Date occurs on any day other
than the first day of a calendar month, then the Initial Term
shall be the period from the Commencement Date to the first day of
the first full calendar month thereafter, plus the following sixty
(60) full calendar months.
Possession 4. (a) Delay in Possession. If Landlord for any reason
-------------------
whatsoever, cannot deliver possession of the Premises, any
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Increment or any additional space leased pursuant to paragraph 1(d) to Tenant at
the commencement of the applicable term, this Lease shall not be void or
voidable, nor shall Landlord be liable to Tenant for any loss or damage
resulting therefrom, but in that event there shall be a proportionate reduction
of rent covering the period between the commencement of the said term and the
time when Landlord can deliver possession. If possession of the Premises, any
Increment or any additional space leased pursuant to paragraph 1(d) is not
delivered to Tenant within six months from the scheduled commencement date, this
Lease shall, at the option of Tenant exercised by delivering notice to Landlord,
terminate as to that space. Landlord's failure to receive Tenant's termination
notice within ten (10) days after the last day of that 6-month period shall be
conclusively deemed Tenant's election not to terminate this Lease, and this
Lease shall remain in full force. No delay in delivery of possession shall
operate to extend the Lease Term.
4. (b) Early Possession. Before the Commencement Date, Tenant shall be
----------------
entitled to enter the Premises for the purposes of performing the Tenant
Improvements and any other work on the Premises which Tenant desires to perform
and which is in conformity with all the provisions of this Lease, provided that:
(i) Tenant's entry on and early possession of the Premises shall be conducted
in a manner so as not to materially interfere with Landlord's Work; (ii)
Tenant delivers to Landlord before entering on the Premises evidence of
liability insurance coverage required under this Lease; (iii) Tenant at all
times during Tenant's early possession keeps the Premises free of all
mechanic's, materialmen's and design professionals' liens arising from the work
being performed by Tenant and otherwise complies with the provisions of
paragraph 13; (iv) Tenant's early possession hereunder shall be subject to and
governed generally by all the applicable terms and conditions of this Lease, but
Tenant shall not be obligated to pay any Basic Rent or additional rent (with the
exception that Tenant or its contractors shall pay as additional rent the
reasonably allocable cost of any utilities used by Tenant in the Premises in
constructing the Tenant Improvements); and (v) in no event shall Tenant be
permitted to enter the Existing Premises (as defined in paragraph 43(a)) until
Existing Tenant (as defined in paragraph 43(a)) has vacated the Existing
Premises or granted its consent for such entry, with the exception that to the
extent permitted under the Existing Lease and applicable law, Tenant shall be
entitled to enter the Existing Premises to perform Tenant's responsibilities as
to the Seismic Work as provided in paragraph 45(c). Tenant's entering the
Premises is subject to prior compliance, at Tenant's sole expense (except as may
be otherwise expressly provided in this Lease), with all applicable laws
relating to Tenant's possession. However, under no circumstances shall the
provisions of this paragraph 4(b) permit Tenant to conduct business from all or
any part of the Premises. The consumption of electricity during any period of
construction activity by Tenant shall, if economically practicable, be
determined by separate metering and if not practicable, shall be estimated based
upon any increase in consumption of electricity during the period of any
construction over the average monthly consumption in such metered area during
the prior twelve month period (adjusted, however, for any increase or decrease
in tenant occupancy of such metered area). Tenant's contractors and
subcontractors shall be entitled during any period the option to lease
additional space (as provided in paragraph 1(c)) remains in effect, to occupy
any portion of Building C which is then subject to such option to lease
(excluding the Existing Space as defined in paragraph 43 during any period it is
occupied
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by the Existing Tenant) for the purpose or planning or supervising any
construction activities or for the storage of tools, materials or
equipment associated with any such construction. In such event, such
contractors or subcontractors shall, or Tenant shall cause such
contractors or subcontractors to (i) keep the bathrooms in Building C
in a reasonable state of cleanliness in light of any use by such
contractors, subcontractors and their respective employees, and (ii)
when the construction activities are completed, or on any earlier date
that this Lease may terminate, vacate the space, leave the space in
broom clean condition, and repair any damage that may have been caused
to the space by any activities therein by any such contractors or
subcontractors. Tenant shall cause any such space so occupied to be
surrendered to Landlord in the condition required herein upon the
expiration or termination of the option to lease as to such space.
Landlord may, as a condition to allowing any contractor or
subcontractor to occupy any such space, require such party to satisfy
any reasonable requirements as to liability insurance and to enter into
an indemnity agreement as to such party's activities on the Project in
form reasonably acceptable to Landlord.
Rent 5. (a) On or before the first day of each calendar month during the
Lease Term Tenant shall pay to Landlord, as minimum monthly rent for
the Premises, the sum of $16,531.15 ("Basic Rent"). The Basic Rent for
any partial month shall be prorated at the rate of 1/30 of the Basic
Rent per day. Basic Rent shall be paid by Tenant to Landlord, in
advance, without prior demand, deduction or offset, in lawful money of
the United States of America to X.X. Xxxxxxxx & Sons, Xxx Xxxx Xxxxxx,
Xxxxx 0000, Xxx Xxxxxxxxx, XX 00000, Attn: Accounting Department, or
to such other person or at such other place as Landlord may from time
to time designate in writing.
5. (b) All charges and other amounts of any kind payable by Tenant to
Landlord pursuant to this Lease shall be deemed additional rent.
Landlord shall have the same remedies for default in the payment of
additional rent as for default in the payment of Basic Rent. Basic
Rent and additional rent are collectively sometimes hereinafter
referred to as "rent."
5. (c) All rent payable by Tenant to Landlord hereunder, if not
received by Landlord when due, shall bear interest from the due date
until paid at the publicly announced prime rate or reference rate
charged on such due date by the San Francisco Main Office of Bank of
America, NT & SA (or any successor bank) for short term, unsecured
loans to its most creditworthy borrowers, plus one percent (1%) per
annum, but in no event shall such interest exceed the maximum rate
permitted by law. Landlord's acceptance of any interest payments shall
not constitute a waiver of Tenant's default with respect to the overdue
amount or prevent Landlord from exercising any of the rights and
remedies available to Landlord under this Lease or by law.
5. (d) The parties agree that the Basic Rent set forth above is their
best estimate as of the date of this Lease. That estimate is based on:
(i) the estimated rentable area of the Premises set forth in paragraph
l; and (ii) an agreed initial monthly Basic Rent rate of sixty-eight
and 557/1000 cents ($0.68557) per rentable square foot. The rentable
area of the Premises, the rent and all other sums calculated based upon
the rentable area under this Lease shall be recalculated as provided in
paragraph 5(e) upon substantial completion of the Tenant Improvements.
(For informational purposes only, such rental rate equates to $0.525
per rentable square foot base rate plus $0.16057 per rentable square
foot for budgeted Direct Expenses (as
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defined in paragraph 6(c), which rental rate shall not be adjusted for any
changes in such budget or for any variances from the actual Direct Expenses for
the Base Year).
5. (e) Promptly following the date Landlord approves the Construction
Documents (as defined in paragraph 45(a)(4)), Landlord's architect shall
calculate the rentable area of the Premises (which, assuming the Existing Tenant
is relocated, would include all the usable area of Building A, and a portion of
the usable area of Building C, each as increased by the Adjusted Load Factor)
based upon the Building Owners and Managers Association International standard
method of floor measurement for office buildings except as modified herein,
which calculation shall be binding upon the parties absent demonstrated error in
the calculations. The Adjusted Load Factor shall not include as common areas
(but rather treat as usable areas) any portion of the common area washrooms,
washroom alcoves, telephone rooms, roof access points or any other "common
areas" in the Building which are located outside of the boundaries of the
Premises and which are by design, by practical useability or as a result of
their being a duplication of facilities already located within and included as
part of the usable square footage of the Premises (and provided Tenant does not
in fact make any material use of those facilities), more appropriately
considered as principally available to or supporting other tenants, or
prospective tenants, in the Building. The Adjusted Load Factor shall be
calculated in accordance with the following example:
(i) if the total rentable area in the Building is, as it is presently
understood to be, 71,193 square feet, of which the total usable area of space
rented or rentable to tenants in the Building as presently constructed equals
64,538 square feet, and the total common areas in the Building as presently
constructed equals 6,655 square feet; and
(ii) if of the 6,655 square feet of common areas as presently constructed,
(a) 1,806 square feet (relating to the existing bathrooms, bathroom alcoves,
telephone rooms and roof access points in Building A) will upon the Commencement
Date become a part of the usable square footage of the Premises (the "Eliminated
Common Areas"), (b) 3,327 square feet currently constitute washrooms, washroom
alcoves, telephone rooms, roof access points and other common areas in the
Building which are duplicative of such facilities located in the usable square
footage area of the Premises and which support principally other tenants or
prospective tenants of the Building (the "Other Tenant Common Areas"), and (c)
the remaining 1,522 square feet of common areas are for the benefit of all
present or prospective tenants of the Building (the "Remaining Common Areas");
and
(iii) if the usable area of the Premises upon the Commencement Date is
23,599 square feet (including Eliminated Common Areas); then
(iv) the "Adjusted Usable Area" of the Building in this example would be
69,671 square feet, calculated by deducting the Remaining Common Areas (1,522
square feet) from the total Rentable Area of the Building (71,193 square feet);
and the "Adjusted Load Factor" shall equal 2.18%, calculated by dividing the
Remaining Common Areas (1,522 square feet) by the Adjusted Usable Area of the
Building (69,671 square feet); and the rentable area of the Premises shall equal
24,113 square feet, calculated by adding the sum of (A) the usable area of the
Premises (23,599 square feet), and (B) the usable area of the
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Premises (23,599 square feet) multiplied by the Adjusted Load
Factor (2.18%).
Upon substantial completion of the Tenant Improvements, and at any
other time as may be necessary, if the as-built plans disclose a
different rentable area of the Premises, or if the rentable area
of the Premises, the Building, 863 Mitten or the Project changes
for any reason, then Landlord shall deliver to Tenant the
certification of Landlord's architect of such determination, which
determination shall be binding upon the parties absent
demonstrated error in the calculations. The certification of
Landlord's architect is to be addressed jointly to Landlord and to
Tenant certifying the rentable square footage of the Premises and
the manner of calculation of the same, which certificate is to
include the respective square footages for and manner of
calculation of the usable area of the Premises, the useable area
of all leasable space in the Building, the resulting Adjusted
Usable Area of the Building, the square footage area of the Other
Tenant Common Areas and the Remaining Common Areas, the rentable
area of the Building in its entirety and the Adjusted Load Factor.
If any recalculations will affect the sharing of any Direct
Expenses of the Project, such certificate shall clearly identify
the basis for the recalculation of the same. Within thirty (30)
days after any recalculation of the rentable area of the Premises,
the Building, 863 Mitten or the Project, Tenant shall pay to
Landlord all sums due under this Lease for the period from when
the basis for the recalculation was effective to the date of
such recalculation. If Tenant has overpaid rent, Landlord shall
credit the amount of such overpayment against the next
installments of Basic Rent becoming due under this Lease.
5. (f) Commencing on the first day of the thirty-first (31st)
full calendar month of the Initial Term, the monthly Basic Rent
shall be increased (by $0.075 per rentable square foot) to an
amount equal to the product of the rentable area of the Premises
multiplied by seventy-six and 57/1000 cents ($0.76057).
Additional
Rent 6. (a) Additional Rent. In addition to the Basic Rent provided
---------------
for in paragraph 5, Tenant shall pay to Landlord the sums set
forth in this paragraph 6. Tenant's percentage share of permitted
expenses applicable to the entire Project shall be calculated from
time to time by dividing the number of square feet of rentable
area in the Premises by the number of square feet of rentable area
in the Project (the "percentage share"). In the event the rentable
area of the Premises, the Building, 863 Mitten or the Project is
changed, the Tenant's percentage share shall be appropriately
adjusted. Rentable area of the Project and any building shall be
based upon the Building Owners and Managers Association
International standard method of floor measurement for office
buildings, and rentable area of the Premises (or of any Increment
of additional space leased pursuant to paragraph 1(c) or any right
of first refusal space leased pursuant to paragraph 1(d)) shall be
calculated in the manner provided in paragraph 5(e) hereof.
Landlord and Tenant hereby agree that as of the date hereof the
rentable area of the Building is 71,193 square feet, the rentable
area of 863 Mitten is 94,274 square feet, and the rentable area of
the Project is 152,297 square feet, and that based on Tenant's
current rough draft of its Space Plans, the usable area of the
Premises in the Building will be approximately 23,599 square feet
(including Eliminated Common Areas), the Adjusted Usable Area of
the Building will be 69,671 square feet (including Eliminated
Common Areas and Other Tenant Common Areas), the Remaining Common
Areas will be 1,522
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square feet, the Adjusted Load Factor in the Building will be 2.18%, the
rentable area of the Premises will be 24,113 square feet, and Tenant's
percentage share as to the Project will be 15 and 83/l00ths percent (15.83%).
6. (b) Tax Increases and Assessments. Subject to the limitations set forth
-----------------------------
herein, Direct Expenses shall incluade real property taxes and assessments or
other fees or charges in the nature of real property taxes or assessments
imposed by a governmental agency which may be levied on the Premises, 863 Mitten
and the Project, and personal property taxes levied on personal property of
Landlord used in the operation of the Project, including any increases therein,
either by way of increase in the rate or in the assessed valuation thereof. Real
and personal property taxes shall include, without limitation, taxes of every
kind and nature levied and assessed in lieu of or in substitution for existing
or additional real or personal property taxes on the Project as well as any form
of assessment, license, fee, levy or tax imposed by any authority having the
direct or indirect power to tax, including any city, county, state, or federal
government, or any school, agricultural, lighting, drainage, or other
improvement district, as against any legal or equitable interest of Landlord in
the Premises or in the Project, or as against Landlord's right to rent or other
income therefrom, or as against Landlord's business of leasing the Premises, but
expressly excluding any income franchise, state, sales or transfer taxes or
any taxes which may arise from the nature or structure of Landlord or any use
being made of the Project by Landlord or other tenants, or any increase in taxes
or assessments of whatever kind and nature caused by improvements or
installations made by any other tenant in the Project (or by Landlord for the
benefit of any such other tenant), or as a result of any failure of Landlord to
pay any amount when otherwise payable. Any assessments which Landlord may elect
to pay in installments, shall be so paid, and only the installments thereof
which are paid during and which relate to the Lease Term shall be included
as Direct Expenses. Tenant shall during and as it relates to the Lease Term,
separately pay one hundred percent (100%) of any increase in taxes or
assessments of whatsoever kind and nature (including, without limitation, all
personal property taxes) reasonably demonstrated by Landlord to have been
assessed solely as a result of any improvements or installations made by or on
behalf of Tenant to the Premises at any time during the Lease Term (excepting
any Mandatory Seismic Work described in paragraph 45(c)). In the event any taxes
or assessments so separately payable by Tenant are charged to or paid or payable
by Landlord, Tenant forthwith upon demand therefor, shall reimburse Landlord for
all amounts of such taxes or assessments chargeable against Tenant pursuant to
this paragraph 6(b) and paid by Landlord.
6. (c) Direct Expense Increases. Tenant shall pay to Landlord, at the times
------------------------
hereinafter set forth, an amount equal to Tenant's percentage share of any
aggregate increase in Direct Expenses for calendar year 1995 and each subsequent
calendar year during the Lease Term, reasonably and appropriately paid or
incurred by Landlord on account of certain expenses associated with the
operation or maintenance of the Project (as further specified herein) above the
greater of (i) the aggregate amount of such Direct Expenses paid or incurred by
Landlord during the calendar year 1994 or (ii) the aggregate budgeted amount for
such Direct Expenses for calendar year 1994 as reflected on Exhibit C. "Direct
---------
Expenses" as used herein shall mean only those certain categories of costs of
operation and maintenance as are identified on attached Exhibit C without one,
---------
two or three
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stars (*), which aggregate budgeted amount of Direct Expenses for calendar year
1994 as reflected thereon equals $293,454.
The categories of Direct Expenses listed on Exhibit C shall be limited so as
---------
not to include any of the following items:
(i) wages, salaries, fees, and fringe benefits paid to administrative or
executive personnel or officers or partners of Landlord or its agents
unless such persons are employed at competitive rates as independent
contractors, and then only to the extent that the labor of such persons
are reasonably allocable to the operation or maintenance of the Project;
(ii) any charge for depreciation and any interest or other financing charge;
(iii) any taxes, other than those permitted as Direct Expenses pursuant to
paragraph 6(b) hereof;
(iv) all costs relating to activities for the solicitation, negotiation,
execution or enforcement of present or prospective leases of space in
the Project (except enforcement of this Lease against Tenant);
(v) all costs for which Tenant or any other tenant in the Project is being
or may be directly charged other than pursuant to a sharing in Direct
Expenses;
(vi) the costs of any alterations, additions, changes, replacements, and
other items (albeit classified by Landlord as maintenance or repairs)
that under generally accepted accounting principles are properly
classified as capital expenditures;
(vii) any Direct Expenses representing an amount paid (or reimbursed for
expenses) to any management agent, property manager or any other person
or entity that is in excess of what would reasonably and customarily be
expected to be paid for such services;
(viii) the cost of any work or service performed for or facilities or utilities
furnished to any tenant in the Project to a greater extent or in a
manner more favorable to such tenant than that performed for or
furnished to Tenant;
(ix) the cost of any improvements or alterations of space leased to other
tenants in the Project;
(x) the cost of overtime or other expense (including attorney's fees) to
Landlord because of its defaults or performing work expressly provided
in this Lease to be borne at Landlord's expense;
(xi) amounts paid (including interest and penalties) in order to comply with
or cure violations of statutes, laws, notices, or ordinances by Landlord
or any other tenant in the Project (except in the event and to the
extent caused by any act or omission of Tenant, including as a result
of any alterations or improvements made to the Premises by Tenant);
(xii) any expense attributable to alterations, improvements or repairs
required by any law, ordinance, rule or regulation, including any costs
of seismic work in the Project or any costs of management, abatement,
remediation or removal of any Hazardous Materials in
-14-
the Project (except in the event and to the extent caused by any act or
omission of Tenant, including as a result of any alterations or
improvements made to the Premises by Tenant);
(xiii) any taxes assessed due to any improvements to other buildings other than
863 Mitten or to any tenant spaces (excluding improvements made by
Tenant) on any portion of the Project;
(xiv) all costs for which insurance or any other third party is obligated by
law or contract to reimburse Landlord to the extent Landlord either
actually receives such reimbursement or fails to exercise reasonable
efforts to obtain such reimbursement;
(xv) the cost of insurance premiums for any insurance in excess of levels and
coverages reasonably appropriate in light of the value and operations on
the Project, with the premiums, levels and coverages as they exist as of
the date hereof being hereby acknowledged to be reasonable (except in
the event and to the extent caused by any act or omission of Tenant),
but excluding any premiums associated with any insurance coverage of any
tenant improvements (including the Tenant Improvements); and
(xvi) all costs associated with the operation or maintenance (including
repair) of the Building or any other buildings constituting a part of
the Project if such cost or type of cost as it relates to the Premises
is identified under this Lease or on Exhibit C as a cost to be borne
---------
directly by Tenant hereunder.
In the event the Project is not fully occupied during any year or in the event
all of the Project is not provided with standard services during any year, an
adjustment shall be made by Landlord in computing Direct Expenses for such year
so that Direct Expenses shall be computed as though 95% of the Project had been
occupied and 95% of the Project had been provided with standard services during
such year (or such Direct Expenses shall be computed in accordance with actual
occupancy or actual provision of standard services if such respective amounts
shall exceed 95%); provided, however, that in no event shall the aggregate
amount of Direct Expenses collected by Landlord from all tenants in the Project
exceed the actual Direct Expenses for said year.
Detailed statements of the amount of Direct Expenses for the preceding calendar
year and the amount of such increase payable by Tenant shall be determined by
Landlord and shall be given to Tenant within ninety (90) days of the end of each
calendar year.
All amounts payable by Tenant as shown on said statement shall be paid by Tenant
ten (10) business days after receipt thereof, and any overpayment by Tenant
shall be credited against the next installment(s) of additional rent falling due
hereunder. Landlord may estimate the increase in Direct Expenses payable by
Tenant and require Tenant to pay one-twelfth (1/12th) of that amount together
with each payment of Basic Rent. If during any such year Landlord shall in good
faith revise its estimate of Tenant's proportionate share of Direct Expenses for
said year, Landlord shall promptly advise Tenant thereof and commencing on the
next date payment of additional charges are due that is at least ten (10)
business days thereafter, Tenant shall pay all additional charges based on such
revised estimate for the portion of the year already elapsed and shall commence
paying the additional
-15-
charges based on such revised estimate for the remainder of such
year. The determination of Direct Expenses and their allocation
shall be in accordance with generally accepted accounting
principles applied on a consistent basis.
If, for any reason the Lease Term shall terminate on a day other
than the last day of a calendar year, the additional rent payable
by Tenant applicable to the calendar year in which such
termination shall occur shall be prorated on the basis which the
number of days from the commencement of such calendar year to and
including such date of termination bears to three hundred sixty-
five (365).
Tenant shall have the right, at Tenant's sole cost and expense, at
Landlord's office where books and records for the Project are
maintained, and upon reasonable notice to Landlord, to review or
audit any Direct Expenses and Landlord shall fully cooperate with
Tenant or Tenant's agents with respect to the same and shall
maintain reasonably detailed records of such expenses for at least
two (2) years after the submission of its year-end statement of
Direct Expenses for such calendar year to Tenant. If Tenant's
review or audit shall demonstrate any overpayment or underpayment
by Tenant, either Landlord shall, within ten (10) business days
after receiving reasonably detailed documentation of the same,
credit such amount so overpaid against the next installment(s) of
additional rent falling due hereunder, or Tenant shall pay to
Landlord, within that 10-business day period, the amount of such
underpayment.
Security 7. Simultaneously with the execution of this Lease, Tenant shall
deposit with Landlord the sum of $16,500.00, which shall be held
by Landlord as security for the faithful performance by Tenant of
all the terms, covenants and conditions of this Lease. At the end
of the Lease Term Tenant, upon delivering up the Premises to
Landlord, broom clean, and in the same condition as at the
Commencement Date, excepting reasonable wear and tear, damage
Tenant is not obligated to repair under this Lease and any
alterations, additions or improvements Tenant is not obligated to
remove under this Lease, said sum held as security shall be
returned to Tenant. No interest shall be payable thereon and
Landlord shall not be required to keep said sum in a separate
account. If Tenant fails to pay any rent or other charges due
hereunder, or otherwise defaults with respect to any provision of
this Lease, Landlord may at its option apply or retain all or any
portion of the deposit for the payment of any rent or other charge
in default or the payment of any other sum to which Landlord may
become obligated by Tenant's default, or to compensate Landlord
for any loss or damage which Landlord may suffer thereby. If
Landlord so uses or applies all or any portion of the deposit,
then within ten (10) business days after demand therefor Tenant
shall deposit cash with Landlord in an amount sufficient to
restore the deposit to the full amount thereof, and Tenant's
failure to do so shall be a material breach of this Lease.
Landlord's application or retention of the deposit shall not
constitute a waiver of Tenant's default to the extent that the
deposit does not fully compensate Landlord for all losses or
damages incurred by Landlord in connection with such default and
shall not prejudice any other rights or remedies available to
Landlord under this Lease or by law.
No security or guaranty which may now or hereafter be furnished
Landlord for the payment of the rent herein reserved or for
performance by Tenant of the other covenants or conditions of this
Lease shall in any way be a bar or defense to any action in
unlawful detainer, or
-16-
ordinance or governmental rule, regulation or requirement shall be
conclusive of that fact as between Landlord and Tenant.
Alterations 10. Subject to the provisions of this paragraph 10, Tenant may,
without Landlord's prior consent, make alterations, additions or
improvements to the Premises (but not the Equipment Area or the
Roof Platform), at Tenant's expense, including, without
limitation, laboratory benchwork, cabinetry and laboratory
equipment so long as: (a) the cost thereof in any instance is in
good faith estimated to be less than $100,000; and (b) such
alterations, additions or improvements do not affect the
structural portions of 863 Mitten. Tenant shall not make or suffer
to be made any other alterations, additions or improvements to or
of the Premises or any part thereof (including the Equipment Area
and the Roof Platform) without the written consent of Landlord
first had and obtained. Any alterations, additions, or
improvements to or of the Premises, including without limitation
any fixed partitions and all carpeting, shall upon expiration of
the Lease Term become a part of the realty and belong to Landlord.
Movable furniture, equipment and trade fixtures shall remain the
property of Tenant. All alterations, additions or improvements to
the Premises by Tenant shall be made by Tenant at Tenant's sole
cost and expense. Any contractor or person selected by Tenant to
make any alteration, addition or improvement must first be
approved of in writing by Landlord if the alteration, addition or
improvement requires the approval of Landlord hereunder. Upon at
least thirty (30) days written notice before the expiration of the
term, or upon demand by Landlord upon earlier termination of the
term, Tenant, at its sole cost and expense, forthwith and with all
due diligence shall remove any alterations, additions or
improvements made by Tenant designated by Landlord to be removed,
and Tenant, forthwith and with all due diligence, at its sole cost
and expense, shall repair any damage to the Premises caused by
such removal; provided, however, Tenant shall not be obligated to
remove any demising or interior walls or washrooms. Tenant's
obligation to remove any alterations, additions, improvements,
fixtures and/or personal property and to repair any damage from
such removal shall survive the termination of this Lease.
Construction of any alterations, additions, or improvements (i)
shall be completed in accordance with drawings and specifications
approved in advance in writing by Landlord if such alteration,
addition or improvement requires Landlord's approval hereunder,
(ii) shall be carried out in a good and workmanlike manner, and
(iii) shall comply with all applicable requirements of govern-
mental authorities, and Tenant shall comply with paragraph 13, and
Tenant shall deliver as-built plans to Landlord promptly after
such work is substantially complete.
The provisions of this paragraph 10 shall not apply to the Tenant
Improvements, the construction of which is governed by paragraph
45.
Repairs 11. (a) Tenant's Repairs. Tenant accepts the Premises as being
----------------
in good, sanitary order, condition and repair. Except as provided
in paragraph 11(b) and the completion or performance of Landlord's
Work as provided in paragraph 44, Tenant, at Tenant's sole cost
and expense, shall keep the Premises, the Equipment Area, the Roof
Platform and all equipment installed thereon in good condition and
repair, damage thereto by fire, earthquake, act of God or the
elements and other causes beyond Tenant's reasonable control
excepted, Tenant hereby waiving all rights to make
-18-
repairs at the expense or the Landlord as provided by law, statute
or ordinance now or hereafter in effect. Upon the expiration or
sooner termination of the Lease Term, Tenant shall surrender the
Premises to Landlord in the same condition as when received,
ordinary wear and tear and damage by fire, earthquake, act of God
or the elements and other causes beyond Tenant's reasonable
control excepted. It is specifically understood and agreed that
Landlord has no obligation and has made no promises to alter,
remodel, improve, repair, decorate or paint the Premises or any
part thereof and that no representations respecting the condition
of the Premises, the Building or the Project have been made by
Landlord to Tenant except as specifically set forth in this Lease,
including Landlord's Work as provided in paragraph 44 hereof.
11. (b) Landlord's Repairs. Landlord shall maintain and
------------------
repair the structural elements and the roof of 863 Mitten, the
public and common areas of 863 Mitten and of the Project
(including all parking areas, landscaping and trash collection
areas), and all utility lines, pipes and equipment (other than
Tenant's equipment installed pursuant to paragraph 1(b)) outside
of the Premises, as the same may exist from time to time, except
for wear and tear which is the result of a negligent or willful
act or omission of Tenant or its officers, directors,
shareholders, partners, agents, employees, contractors, invitees,
licensees, subtenants or assignees (collectively, "Tenant's
Employees"). Landlord shall have no obligation to make repairs
under this paragraph 11(b) until a reasonable time after receipt
of written notice of the need for such repairs.
Abandonment 12. Tenant shall not abandon the Premises at any time during the
Lease Term, and if Tenant shall abandon, the Premises or be
dispossessed by process of law, or otherwise, any personal
property belonging to Tenant and left on the Premises shall,
subject to the rights of any Leasehold Mortgagee or Equipment
Mortgagee as provided herein, be deemed to be abandoned, at the
option of Landlord.
Liens 13. Tenant shall keep the Premises and the Project free from any
liens arising out of any work performed, materials furnished or
obligations incurred by Tenant. Tenant shall in the event of the
filing of any such lien, post any bond required to release the
Premises therefrom. Should Tenant fail to remove any such lien
within ten (10) business days after notice to do so from Landlord,
Landlord may, in addition to any other remedies, record a bond
pursuant to California Civil Code Section 3143 and all amounts
incurred by Landlord in so doing shall become immediately due and
payable by Tenant to Landlord as additional rent. Landlord shall
have the right to post and keep posted on the Premises any notices
that may be provided by law or which Landlord may deem to be
proper for the protection of Landlord, the Premises and the
Project from such liens.
Assignment
and
Subletting 14. (a) Except as expressly permitted under the terms of this
Lease, Tenant shall not mortgage, pledge, hypothecate or encumber
this Lease or any interest therein. Tenant shall not assign this
Lease or sublet or suffer any other person (the agents and
servants of Tenant excepted) to occupy or use the Premises, or any
part thereof, or sublet any right or privilege appurtenant thereto
without the prior written consent of Landlord. Landlord's consent
to one assignment, subleasing or occupancy shall not be deemed to
be a consent to any subsequent assignment, subleasing or
occupancy.
-19-
14. (b) Provided further and notwithstanding anything herein before set forth:
In the event that at any time or from time to time during the Lease Term, Tenant
desires to sublet all or any part of the Premises, Tenant shall notify the
Landlord in writing (the "Sublet Notice") of the terms of the proposed
subletting, and the area so proposed to be sublet. Tenant shall also deliver an
executed copy of such sublease to Landlord in order to obtain its consent as
required in paragraph 14(a) above. If Landlord consents to a sublease, then such
sublease shall be subject to and made upon the following terms:
(i) any such sublease shall be subject to the terms of this Lease and the
term thereof may not extend beyond the expiration of the Lease Term;
(ii) no subtenant shall have a right to further sublease its premises
without Landlord's prior written consent. If Tenant fails to consummate a
sublease with that proposed subtenant on the terms set forth in the Sublet
Notice within sixty (60) days after Tenant delivers that Sublet Notice, Tenant
shall be required to deliver a new Sublet Notice to Landlord and comply with the
terms and conditions set forth above before any further subletting shall be
permitted.
(iii) if Tenant sublets all or any portion of the Premises as permitted in
this paragraph 14 during the Initial Term, then Tenant shall be entitled to
retain all amounts paid by the subtenant under the sublease to Tenant in excess
of the amounts required to be paid by Tenant (including rental payments to
Landlord) under this Lease until Tenant is reimbursed in full (on a first
priority payment basis) for any leasing commissions paid by Tenant to any
brokers (with any such commissions not to exceed in the aggregate a then
customary brokerage fee for such a transaction) in connection with that
sublease. Tenant shall also be entitled to retain all additional amounts paid by
the subtenant under the sublease to Tenant in excess of the amounts required to
be paid by Tenant (including rental payments to Landlord) under this Lease and
the amount required to reimburse Tenant in full for any such leasing commissions
(the "Net Sublease Consideration"), except that if Tenant sublets all or any
portion of the Premises as permitted in this paragraph 14 during the Option
Term, or if a subtenant under a sublease which commenced during the Initial Term
remains in its Premises during the Option Term, then the following provisions
shall apply as regards the sharing of any Net Sublease Consideration accruing
with respect to the Option Term:
A. Tenant shall pay to Landlord fifty percent (50%) of any Net Sublease
Consideration thereafter accruing under the sublease when received by Tenant
pursuant to any such sublease until the earlier of (i) the expiration or earlier
termination of the Lease Term, or (ii) the date Landlord sells the Project; and
B. If Landlord sells the Project to an independent third party, Tenant
shall thereupon pay all Net Sublease Consideration thereafter accruing under the
sublease when received by Tenant to the party that acquired the Project from
Landlord and thereupon became the successor Landlord hereunder (or to any
successor Landlord thereafter).
14. (c) Regardless of Landlord's consent, no subletting nor assignment shall
release Tenant of Tenant's obligations or alter the primary liability of Tenant
to pay rent and perform other obligations of Tenant under this Lease.
-20-
14. (d) In no event shall Tenant assign this Lease or sublet the
Premises or any portion thereof (i) to any then-existing tenant of
the Project or (ii) to any prospective tenant of the Project with
whom Landlord is engaged in active negotiations provided Landlord
so indicates the same to Tenant in writing promptly upon request
of Tenant as to the names of any prospective tenants with whom
Landlord is then involved in active negotiations.
14. (e) Tenant shall pay Landlord's reasonable costs incurred in
connection with Tenant's request to assign this Lease or sublet
the Premises, regardless whether or not the Landlord consents to
the proposed transfer; provided, however, in no event shall such
costs exceed $1,000.
14. (f) The issuance or transfer of any voting or nonvoting
stock of Tenant shall not constitute an assignment hereunder for
which any consent is required. Tenant may assign this Lease or
sublet the Premises or any portion thereof to any corporation
which controls, is controlled by or is under common control with
Tenant, or to any corporation resulting from merger or
consolidation with Tenant, or to any person or entity which
acquires all the assets as a going concern of the business of
Tenant that is being conducted on the Premises, without Landlord's
consent, but no assignment or subletting shall relieve the
original Tenant hereunder from its continuing liability for the
performance of the obligations of Tenant hereunder.
Indemnifica-
tion 15. Tenant agrees to indemnify and defend Landlord against and
save Landlord harmless from any and all claim, loss, cost,
liability, damage and expense, including without limitation
penalties, fines and reasonable attorneys' fees and costs
(collectively, "Claims"), incurred in connection with or arising
from: (1) any default by Tenant in the observance or performance
of any of the terms, covenants or conditions of this Lease on
Tenant's part to be observed or performed, or (2) the use or
occupancy or manner of the use or occupancy of the Premises by
Tenant or any other person or entity claiming through or under
Tenant, including without limitation, the presence, release,
removal, remediation, abatement, use, generation, storage,
transportation or disposal of any Hazardous Materials (excluding
the existence or migration of any Hazardous Materials that exist
on or about the Premises before the Commencement Date of this
Lease, or any Hazardous Materials used or installed on or about
the Project by any person other than Tenant), or (3) the
condition of the Premises or any occurrence or happening on the
Premises during the Lease Term, or (4) any wrongful or negligent
acts or omissions of Tenant or of Tenant's Employees or any such
person or entity, in, on or about the Premises, the Building or
the Project, either prior to the commencement of, during, or after
the expiration of the Lease Term, including without limitation any
wrongful or negligent acts or omissions in the making or
performing of any alterations. Tenant further agrees to indemnify,
defend and save harmless Landlord, Landlord's agents and the
lessors under any ground or underlying leases, from and against
any and all Claims by any persons by reason of injury to persons
or damage to property occasioned by any use, occupancy, condition,
occurrence, happening, act, omission or negligence referred to in
the preceding sentence. In the event any action or proceeding is
brought against Landlord for any claim against which Tenant is
obligated to indemnify Landlord hereunder, Tenant upon notice from
Landlord shall defend such action or proceeding at Tenant's sole
expense by counsel approved
-21-
by Landlord, which approved shall not be unreasonably withheld.
Tenant's obligations under this paragraph 15 shall not include
any Claims arising from the negligence of Landlord or other
tenants of the Building, or from any breach by Landlord of its
obligations under this Lease. The provisions of this paragraph 15
shall survive the expiration or earlier termination of this Lease.
As used in this paragraph 15, the term "Landlord" shall include
its officers, directors, shareholders, partners, employees,
agents, representatives, affiliates, successors and assigns.
Insurance 16. (a) Tenant's Insurance. Tenant shall have the following
------------------
insurance obligations:
(1) Liability Insurance. Tenant shall obtain and keep in
-------------------
full force a policy or policies of commercial general liability
and property damage insurance (including but not limited to
automobile, personal injury, broad form contractual liability,
owner's (i.e. , Tenant's) contractors protective and broad form
property damage) under which Tenant is named as the insured and
Landlord, X.X. Xxxxxxxx & Sons ("Landlord's Agent") and any ground
lessors and mortgagees (whose names shall have been furnished to
Tenant) are named as additional insureds and under which the
insurer agrees to indemnify and hold Landlord, Landlord's Agent
and all applicable ground lessors and mortgagees harmless from and
against all cost, expense and/or liability arising out of or based
upon the indemnification obligations of this Lease. The minimum
limits of liability shall be a combined single limit with respect
to each occurrence of not less than three million dollars
($3,000,000.00). The policy shall, if such is available on a
commercially reasonable basis, contain a cross liability
endorsement and shall be primary coverage for Tenant and Landlord
for any liability arising out of Tenant's and Tenant's Employees'
use, occupancy or maintenance of the Premises and all areas
appurtenant thereto. Such insurance shall provide that it is
primary insurance and not "excess over" or contributory. The
policy shall contain a severability of interest clause. Not more
frequently than once every three (3) years, if, in the opinion of
Landlord's lender or of the insurance consultant retained by
Landlord, the amount of public liability and property damage
insurance coverage at that time is not adequate, Tenant shall
increase the insurance coverage as required by either Landlords's
lender or Landlord's insurance consultant; provided however, that
in no event shall any such insurance coverage be increased in
excess of that which is from time to time being required by
comparable landlords of comparable tenants leasing comparable
amounts of space in other first-class buildings in the vicinity of
the Building.
(2) Tenant's Property Insurance. Tenant at its cost shall
---------------------------
maintain on all of its Tenant Improvements and on any alterations,
additions or improvements made by Tenant to the Premises and on
all of its personal property in, on, or about the Premises, an
"all risk" property policy including coverage for sprinkler
leakage and containing an agreed amount endorsement in an amount
not less than one hundred percent (100%) of the full replacement
cost valuation, under which Tenant is named as the insured and
Landlord, Landlord's agents and any ground lessors and mortgagees
(whose names shall have been furnished to Tenant) as well as any
Leasehold Mortgagee or Equipment Mortgagee as applicable, are
named as additional insureds, with any Leasehold Mortgagee or
Equipment Mortgagee, as applicable, to be named as loss payee.
Provided this Lease is not terminated as a result of such damage,
(i) the proceeds from any such policy covering personal property
shall be used as necessary by Tenant for the replacement of such
-22-
personal property and (ii) the proceeds from any such policy covering Tenant
Improvements (and any alterations, additions or improvements) shall be made
available when and to the extent needed by Landlord to pay the costs incurred
for the repair and replacement of such Tenant Improvements (and any alterations,
additions or improvements). The "full replacement cost valuation" of the
personal property to be insured under this paragraph 16 shall be furnished to
the company issuing the insurance policy by Tenant at least once every year.
(3) Workers' Compensation Insurance. Tenant shall maintain Workers'
-------------------------------
Compensation insurance as required by law.
(4) Business Interruption/Extra Expense Insurance. Tenant shall maintain
---------------------------------------------
loss of income, business interruption and extra expense insurance in such
amounts as will reimburse Tenant for direct or indirect loss of earnings and
incurred costs attributable to the perils commonly covered by Tenant's property
insurance described above but in no event less than two hundred fifty thousand
dollars ($250,000). Such insurance will be carried with the same insurer that
issues the insurance for the personal property.
(5) Other Coverage. Tenant, at its cost, shall maintain such other
--------------
insurance as Landlord may reasonably require from time to time, provided that in
no event shall any such required other insurance be in excess of that which is
from time to time being required by comparable landlords of comparable tenants
leasing comparable amounts of space in other first-class buildings in the
vicinity of the Building.
(6) Insurance Criteria. All the insurance required to be maintained by
------------------
Tenant under this Lease shall:
(i) Be issued by insurance companies authorized to do business in the
state of California, with a financial rating of at least an A:XIII status for
any property insurance and B+:IX for any liability insurance as rated in the
most recent edition of Best's Insurance Reports;
(ii) Be issued as a primary policy;
(iii) Contain an endorsement requiring thirty (30) days' written notice
from the insurance company to both parties and to Landlord's lender before
cancellation or any material change in the coverage, scope, or amount of any
policy; and
(iv) With respect to property loss or damage, a waiver of subrogation
must be obtained, as required by paragraph 16(d).
(7) Evidence of Coverage. A duplicate original policy, or a certificate of
--------------------
the policy with a duplicate of the actual policy attached, shall be deposited
with Landlord on the Commencement Date, and on renewal of the policy a
certificate of insurance listing the insurance coverages required hereunder and
naming Landlord and any other interested parties as additional insured shall be
deposited with Landlord not less than seven (7) days before expiration of the
term of the policy.
16. (b) Landlord's Insurance. Landlord shall have the following obligations:
--------------------
Landlord shall maintain in effect at all times fire and hazard "all risk"
insurance covering one hundred percent (100%) of the full replacement cost
valuation of the
-23-
Building, the Project and Landlord's personal property including its business
papers, furniture, fixtures and equipment, subject to commercially reasonable
deductibles, in the event of fire, lightning, windstorm, vandalism, malicious
mischief and all other risks normally covered by "all risk" policies in the
Burlingame area, but excluding coverage for any tenant improvements (including
the Tenant Improvements). Landlord shall also obtain and keep in full force (a)
a policy of commercial general liability and property damage insurance, (b) loss
of rent insurance and (c) workers' compensation insurance, all such insurance
being in amounts and with deductibles comparable to the insurance being carried
by landlords of other comparable first-class buildings in the vicinity of the
Building.
16. (c) Assumption of Risk/Waivers of Subrogation/Minimization of Duplication
---------------------------------------------------------------------
of Insurance Coverage/Limitations on Liability and Damages.
----------------------------------------------------------
(1) Purpose. The purpose of this provision is to allow Landlord and Tenant
-------
to allocate and assume certain risks to coincide with insurance coverages
required to be maintained pursuant to the terms of this Lease. Landlord and
Tenant recognize the benefit that each will receive from the waivers of
subrogation each is required to obtain pursuant to this paragraph 16(c) and
paragraph 16(d) and that there are significant advantages to each in connection
with minimizing duplication of insurance coverage. Landlord and Tenant further
agree to accept and place certain limitations on each other's respective
liabilities and responsibility for damages to coincide with required insurance
coverages.
(i) Property Insurance. Landlord agrees to insure in accordance with
------------------
paragraph 16(b) the Building, the Project and Landlord's personal property
including its business papers, furniture, fixtures, and equipment (collectively,
"Landlord's Property"). Accordingly, Landlord agrees that Tenant will have no
liability to Landlord in the event that Tenant damages or destroys, negligently
or otherwise, all or any part of Landlord's Property. Landlord will cause to be
placed in its insurance policies covering Landlord's Property a waiver of
subrogation so that its insurance company will not become subrogated to
Landlord's rights and will not be able to proceed against Tenant in connection
with any such damage or destruction.
Tenant agrees to insure in accordance with paragraph 16(a) the Tenant
Improvements (including any alterations, additions and improvements) and
Tenant's personal property including its business papers, furniture, fixtures,
and equipment (collectively, "Tenant's Property"). Accordingly, Tenant agrees
that Landlord will have no liability to Tenant in the event Landlord damages or
destroys, negligently or otherwise, all or any part of Tenant's Property. Tenant
will cause to be placed in its insurance policies covering Tenant's Property a
waiver of subrogation so that the insurance company will not become subrogated
to Tenant's rights and will not be able to proceed against Landlord in
connection with any such damage or destruction.
Tenant shall not be responsible or liable to Landlord for any damage or
destruction to Landlord's Property caused by Tenant's Employees, and Landlord
hereby releases Tenant from any Claims resulting from damage or destruction to
Landlord's Property caused directly or indirectly by Tenant and/or Tenant's
Employees; provided, however, nothing herein shall be deemed to release Tenant's
independent contractors from any such Claims Landlord may
-24-
have against Tenant's independent contractors. Likewise, Landlord shall not be
responsible or liable to Tenant for any damages or destruction to Tenant's
Property caused by Landlord's employees, agents, invitees, or contractors
(collectively, "Landlord's Associates"), and Tenant hereby releases Landlord
from any Claims resulting from damage or destruction to Tenant's Property caused
directly or indirectly by Landlord and/or Landlord's Associates; provided,
however, nothing herein shall be deemed to release Landlord's independent
contractors from any such Claims Tenant may have against Landlord's independent
contractors.
(ii) Damage to Business and Loss of Rents. Landlord shall carry
------------------------------------
continuation of rent insurance and Tenant shall be responsible for carrying
business interruption insurance (extra expense insurance) all in accordance with
this paragraph 16. Accordingly, in the event that Landlord's Property is damaged
or destroyed because of any act or conduct, negligent or otherwise, by Tenant
and/or by Tenant's Employees, Landlord shall have no rights against Tenant and
hereby releases Tenant from all Claims, including claims for loss of rent, by
Landlord directly or indirectly resulting from the damage or destruction of
Landlord's Property by the conduct of Tenant and/or by Tenant's Employees.
Likewise, in the event that Tenant's Property is damaged or destroyed because of
any act or conduct, negligent or otherwise, by Landlord and/or Landlord's
Associates, Tenant shall have no rights against Landlord and hereby releases
Landlord from all Claims by Tenant directly or indirectly resulting from the
damage or destruction of Tenant's Property by the conduct of Landlord and/or
Landlord's Associates; provided, however, nothing herein shall be deemed to
release Tenant's or Landlord's independent contractors from any liability to
Landlord and/or Tenant, and nothing herein shall affect paragraph 25(b) of this
Lease relating to abatement of rent.
(iii) Injury and Death to Individuals. Landlord and Tenant
-------------------------------
understand that waivers of subrogation do not apply to injury and death to
individuals. Landlord and Tenant shall each carry insurance, as provided by this
paragraph 16, in connection with injury and death to individuals. Landlord
hereby agrees to indemnify and hold harmless Tenant from any liability which
Tenant may otherwise have with respect to injury or death to individuals
occurring within the Project but outside the Premises except to the extent that
such injury or death is caused by the negligence of Tenant and/or Tenant's
Employees and is not covered by the insurance Landlord is required to carry
under this Lease. Likewise, Tenant agrees to defend and hold harmless Landlord
from any liability for injury or death to persons occurring within the Premises
except to the extent such injuries or death are caused by the negligence of
Landlord and/or Landlord's Associates and is not covered by the insurance Tenant
is required to carry under this Lease.
(iv) Limitation of Liability and Damages. Landlord agrees that in the
-----------------------------------
event of a default by Tenant under the Lease, Landlord will not have a right to
collect from Tenant a greater amount of rent than Landlord would have been able
to collect in the event that Tenant did not default under the Lease. Landlord
further agrees that it will use commercially reasonable efforts to mitigate its
damages in connection with any default by Tenant. Nothing herein shall be
construed to prevent Tenant or Landlord, if it is the prevailing party in
connection with any litigation, dispute, or controversy between Landlord and
Tenant, from collecting, and each agrees that under such circumstances the other
shall have a right to collect and
-25-
shall be awarded, (a) its reasonable attorneys' fees, costs, and
expenses incurred in connection with any such litigation, dispute,
or controversy and (b) interest, at the interest rate set forth in
paragraph 5(c), on any amounts not paid when due.
16. (d) Allocation of Insured Risks/Subrogation. Landlord and
---------------------------------------
Tenant release each other from any claims and demands of whatever
nature for damage, loss or injury to the Premises and/or the
Building and/or the Project, or to the other's property in, on or
about the Premises and the Building and the Project, that are
caused by or result from risks or perils insured against under any
property insurance policies required by the Lease to be carried by
Landlord and/or Tenant and in force at the time of any such
damage, loss or injury. Landlord and Tenant shall cause each
insurance policy obtained by them or either of them to provide
that the insurance company waives all right of recovery by way of
subrogation against either Landlord or Tenant in connection with
any damage covered by any such policy or policies. Neither
Landlord nor Tenant shall be liable to the other for any damage
caused by fire or any of the risks insured against under any
insurance policy required by the Lease. If an insurance policy
cannot be obtained with a waiver of subrogation, or is obtainable
only by the payment of an additional premium charge above that
charged by insurance companies issuing policies without waiver of
subrogation, the party undertaking to obtain the insurance shall
notify the other party of this fact. The other party shall have a
period of ten (10) days after receiving the notice either to place
the insurance with a company that is reasonably satisfactory to
the other party and that will carry the insurance with a waiver of
subrogation at no additional cost, or to agree to pay the
additional premium if such a policy is obtainable at additional
cost. If the insurance cannot be obtained or the party in whose
favor a waiver of subrogation is desired refuses to pay the
additional premium charged, the other party is relieved of the
obligation to obtain a waiver of subrogation with respect to the
particular insurance involved.
Utilities 17. Tenant, at its expense, shall install separate utility meters
at the Premises and any additional space which Tenant may lease
pursuant to paragraphs 1(c) and 1(d) for all utilities (excluding
water and sewer which is included as a Direct Expense) serving the
Premises and any such additional space, and Tenant shall pay,
directly to the party providing the same, all costs for all
utilities consumed in, on or about the Premises and any such
additional space leased by Tenant.
Personal
Property and
Other Taxes 18. Tenant shall pay, before delinquency, any and all taxes
levied or assessed and which become payable during the Lease Term
upon Tenant's equipment, furniture, fixtures, trade fixtures and
other personal property located in the Premises; and any and all
taxes or increases therein levied or assessed on Landlord or
Tenant by virtue of alterations, additions or improvements to the
Premises made by Tenant or Landlord at Tenant's request. In the
event said taxes are charged to or paid or payable by Landlord,
Tenant, forthwith upon demand therefor, shall reimburse Landlord
for all of such taxes paid by Landlord.
Rules and
Regulations 19. Tenant shall faithfully observe and comply with the rules and
regulations attached to this Lease as Exhibit D and all
---------
reasonable modifications of and additions thereto applicable to
all tenants of the Project from time to time put into effect by
Landlord of which Tenant shall have
-26-
notice, to the extent such rules and regulations and any
modifications and amendments are consistent with the terms and
intent of this Lease, and the size, location, purposes and uses of
the Premises contemplated by this Lease (which includes the
contemplated presence and use on the Premises of Hazardous
Materials and animals and Tenant having principal responsibility
for its own HVAC, janitorial services and Roof Platform).
Landlord shall not be responsible to Tenant for the nonperformance
by any other tenant or occupant of the Project of any of said
rules and regulations, but Landlord shall not enforce the same in
a discriminatory manner adverse to Tenant. Landlord shall not
unreasonably withhold its approval to any request of Tenant for an
express waiver by Landlord of any rule or regulation as they
relate to Tenant and the Premises.
Holding Over 20. If Tenant holds possession of the Premises after the Lease
Term, Tenant shall (at option of Landlord to be exercised by
Landlord's giving written notice to Tenant and not otherwise)
become a Tenant from month to month upon the terms and conditions
herein specified, so far as applicable, at a monthly rental of
110% of the Basic Rent in effect upon termination of this Lease,
plus all other rent specified herein, payable in advance, in
lawful money, and shall continue to be such Tenant until thirty
(30) days after Tenant shall have given to Landlord or Landlord
shall have given to Tenant a written notice of intent to terminate
such monthly tenancy. Unless Landlord exercises its option under
this paragraph 20, Tenant shall be a Tenant at sufferance only,
whether or not Landlord shall accept any rent from Tenant while
Tenant is so holding over.
Xxxxxxxxx- 00. Subject to the provisions of this paragraph 21 and the
tion provisions of this Lease relating to the rights of any Leasehold
Mortgagee, this Lease shall be subject and subordinate at all
times to all ground or underlying leases which may now exist or
hereafter be executed affecting the Building and/or the Project
and to the lien of any mortgages or deeds of trust in any amount
or amounts whatsoever now or hereafter placed on or against the
Building and/or the Project or on or against the Landlord's
interest or estate therein or on or against any ground or
underlying lease without the necessity of having further
instruments on the part of Tenant to effectuate such
subordination. Tenant covenants and agrees to execute and deliver,
upon demand, such further instruments evidencing such
subordination of this Lease to such ground or underlying leases
and to the lien of any such mortgages or deeds of trust as may be
required by Landlord. Notwithstanding any such subordination, in
the event of termination of any ground or underlying lease, or in
the event of foreclosure or exercise of any power of sale under
any mortgage or deed of trust superior to this Lease or to which
this Lease is subject or subordinate, upon the attornment of
Tenant (or if applicable, any Leasehold Mortgagee or Leasehold
Mortgage Purchaser) to the Lessor under such ground or underlying
lease or to the purchaser at any foreclosure sale or sale pursuant
to the exercise of any power of sale under any mortgage or deed of
trust, this Lease shall not terminate, and Tenant (or if
applicable, any Leasehold Mortgagee or Leasehold Mortgage
Purchaser) shall automatically be and become the tenant under the
terms of this Lease to said lessor under such ground or underlying
lease or to said purchaser, whichever is applicable, and any
subordination agreement requested of Tenant shall so provide.
Landlord's interest in any Tenant Improvements or any alterations,
additions or improvements made by Tenant shall be subordinate to
the interest of any Leasehold Mortgagee and Landlord's interest in
any equipment, fixtures, inventory, furniture, trade fixtures or
other personal property of Tenant shall
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be subordinate to the interest of any Leasehold Mortgagee
or Equipment Mortgagee.
Entry by
Landlord 22. Landlord reserves and shall have the right during business
hours upon reasonable prior notice (except in the event of an
emergency when no notice shall be required) to enter the Premises
to inspect the same, to supply any service to be provided by
Landlord to Tenant hereunder, to submit the Premises to
prospective purchasers or tenants, to post notices of
nonresponsibility, and to alter, improve or repair the Premises
and any portion of 863 Mitten without abatement of rent and may
for that purpose erect scaffolding and other necessary structures
where reasonably required by the character of the work to be
performed, always providing the entrance to 863 Mitten shall not
be blocked thereby and further providing that the business of
Tenant shall not be interfered with unreasonably. Tenant hereby
waives any claim for damages for any injury or inconvenience to or
interference with Tenant's business, any loss of occupancy of
quiet enjoyment of the Premises, and other loss occasioned by such
entry. For each of the aforesaid purposes, Landlord shall at all
times have and retain a key with which to unlock all of the doors,
in, upon and about the Premises excluding Tenant's vaults and
safes, and Landlord shall have the right to use any and all means
which Landlord may deem proper to open said doors in an emergency
in order to obtain entry to the Premises, and any entry to the
Premises obtained by Landlord by any of said means, or otherwise,
shall not under any circumstances be construed or deemed to be a
forcible or unlawful entry into or a detainer of the Premises or
an eviction of Tenant from the Premises or any portion thereof.
Notwithstanding the foregoing, Tenant shall have the right to
reasonably restrict Landlord's access to any confidential
operations in the Premises.
Insolvency or
Bankruptcy 23. Either (a) the appointment of a receiver to take possession
of all or substantially all of the assets of Tenant, (b) an
assignment by Tenant for the benefit of creditors, or (c) any
action taken or suffered by Tenant under any insolvency,
bankruptcy or reorganization act shall constitute a breach of this
Lease by Tenant. Upon the happening of any such event this Lease
shall terminate five (5) days after written notice of termination
from Landlord to Tenant; provided, however, if an involuntary
bankruptcy petition is filed against Tenant, there shall be no
default under this Lease if that petition is dismissed within
sixty (60) days after it is filed. In no event shall this Lease be
assigned or assignable by reason of any voluntary or involuntary
bankruptcy proceedings nor shall any rights or privileges
hereunder be an asset of Tenant in any bankruptcy, insolvency or
reorganization proceedings.
Default 24. Tenant shall not be deemed to be in default under this Lease
until: (1) Tenant fails to pay rent or any other sum due under
this Lease within five (5) business days after Landlord's delivery
of written notice to Tenant of Tenant's failure to pay such sum
when due hereunder; or (ii) Tenant fails to perform any other
obligation of Tenant under this Lease within thirty (30) days
after Landlord's delivery of written notice to Tenant of Tenant's
failure to perform such obligation when due hereunder (provided,
however, the 30-day period shall be extended if Tenant cannot
reasonably cure that default within 30 days so long as Tenant
commences that cure within the 30-day period and diligently
prosecutes that cure to completion). In the event of any such
default by Tenant, then Landlord, besides any other rights and
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remedies of Landlord at law or equity, shall have the right either
to terminate Tenant's right to possession of the Premises and
thereby terminate this Lease or to have this Lease continue in
full force and effect with Tenant at all times having the right to
possession of the Premises. Such property so removed may be stored
in a public warehouse or elsewhere at the cost and for the account
of Tenant. Upon such termination Landlord, in addition to any
other rights and remedies (including rights and remedies under
Subparagraphs (1), (2) and (4) of Subdivision (a) of Section
1951.2 of the California Civil Code of any amendment thereto) ,
shall be entitled to recover from Tenant the worth at the time of
award of the amount by which the unpaid rent for the balance of
the term after the time of award exceeds the amount of such
rental loss that the Tenant proves could be reasonably avoided.
The worth at the time of award of the amount referred to in
Subparagraphs (1) and (2) of Subdivision (a) of Section 1951.2 of
the California Civil Code shall be computed by allowing interest
at the rate provided in paragraph 5(c). The worth at the time of
the award of the amount referred to in Subparagraph (3) of
Subdivision (a) of Section 1951.2 of the California Civil Code
shall be computed by discounting such amount at the discount rate
of the Federal Reserve Bank of San Francisco at the time of the
award plus 1%.
Any proof by Tenant of the amount of rental loss that could be
reasonably avoided shall be made in the following manner: Landlord
and Tenant shall each select a licensed real estate broker in the
business of renting property of the same type and use as the
Premises and in the same geographic vicinity and such two real
estate brokers shall select a third licensed real estate broker
and the three licensed real estate brokers so selected shall
determine the amount of rental loss that could be reasonably
avoided for the balance of the term of this Lease after the time
of award. The decision of the majority of said licensed real
estate brokers shall be final and binding upon the parties hereto.
Should Landlord, following any breach or default of this Lease by
Tenant, elect to keep this Lease in full force and effect, with
Tenant retaining the right to possession of the Premises
(notwithstanding the fact the Tenant may have abandoned the
Premises), then Landlord, besides the rights and remedies
specified in Section 1951.4 of the California Civil Code, "(lessor
may continue lease in effect after lessee's breach and abandonment
and recover rent as it becomes due, if lessee has right to sublet
or assign, subject only to reasonable limitations)" and all other
rights and remedies Landlord may have at law or equity, shall have
the right to enforce all of Landlord's rights and remedies under
this Lease. Notwithstanding any such election to have this Lease
remain in full force and effect, Landlord may at any time
thereafter elect to terminate Tenant's right to possession of the
Premises and thereby terminate this Lease for any previous breach
or default which remains uncured, or for any subsequent breach or
default.
The remedies provided for hereinabove in this paragraph 24, shall,
in the event of the applicability of the liquidated damages
provision of paragraph 45(e) (2)B hereof to any such default, be
inapplicable to such default.
Destruction
or Damage 25. (a) In the event the Premises or a portion of the Building
or a portion of 863 Mitten is damaged by fire or other casualty,
then Landlord shall diligently repair and restore the same to
substantially the same condition as existing immediately prior to
such damage to the fullest
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extent possible, subject to the provisions of this paragraph 25, provided that
if any repairs to the Premises can not reasonably be made within one hundred
eighty (180) days after issuance of a building permit therefor under the laws
and regulations of federal, state and local governmental authorities having
jurisdiction thereof, either Landlord or Tenant may by notice to the other given
within thirty (30) days after the date of such fire or other casualty, elect to
terminate this Lease as of a date specified in such notice. Landlord shall
notify Tenant, within twenty (20) days after the date of such fire or other
casualty, of the estimated period required for repairing any such damage to the
Premises and the estimated cost of repairing such damage. Notwithstanding the
foregoing: (i) if any such damage to the Premises shall occur during the final
year of the Lease Term (with all options to extend having then occurred or
expired or been waived without exercise) and the reasonably estimated cost of
repairing such damage exceeds ten percent (10%) of the full replacement value of
the Premises (including all Tenant Improvements, and any alterations, additions
or other improvements) , either Landlord or Tenant may instead elect to
terminate this Lease upon written notice given to the other within thirty (30)
days after the date of such fire or other casualty, in which event this Lease
shall terminate as of the termination date specified in such notice; and (ii) if
the reasonably estimated cost of repairing any damage to the Premises which is
not covered by any applicable insurance coverage exceeds twenty percent (20%) of
the full replacement value of the Premises (including all Tenant Improvements,
and any alterations, additions or other improvements), then Landlord may instead
elect to terminate this Lease upon written notice given to Tenant within thirty
(30) days after the date of such fire or other casualty, in which event this
Lease shall terminate as of the termination date specified in Landlord's notice.
25. (b) Where more than one party is entitled to and in fact gives any notice
of termination, the earlier of the termination dates specified in such notices
of termination shall be controlling. As to any notice of termination given by
Landlord which provides for a period of notice of termination shorter than
thirty (30) days, Tenant shall have the right by notice to Landlord to require
that such shorter notice period given by Landlord be extended to be a period of
thirty (30) days. In the event of the occurrence of any such damage, an
abatement of rent (both basic and additional rent) under this Lease shall be
allowed Tenant during the period and to the extent Tenant's use of the Premises
in the conduct of its business is materially affected by any damage to, or any
repairs being made to, the Premises or the Project.
25. (c) A total destruction of the Building automatically shall terminate this
Lease. Landlord and Tenant acknowledge that this Lease constitutes the entire
agreement of the parties regarding events of damage or destruction, and Tenant
waives the provisions of California Civil Code Sections 1932(2) and 1933(4) and
any similar statute now or hereafter in force.
25. (d) If the Premises are to be repaired under this paragraph 25, Landlord
shall repair at its cost any injury or damage to the Building and restore the
Premises to the condition existing upon substantial completion of the Tenant
Improvements, as such Tenant Improvements may be modified or supplemented by any
subsequent alterations, additions or improvements. Tenant shall make available
to Landlord the proceeds or any insurance to be maintained by Tenant thereon
pursuant to paragraph 16(a) (2) when and to the extent needed to pay the cost of
any such repairs or
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replacements by Landlord to the Tenant Improvements, as
such Tenant Improvements may have been modified or supplemented
by any subsequent alterations, additions or improvements, and
Tenant shall pay the cost of repairing or replacing all
Tenant's trade fixtures, furnishing, furniture, equipment and
other personal property.
Eminent Domain 26. If any part of the Premises shall be taken or appropriated
by any public or quasi-public authority under the power of
eminent domain, and such taking will substantially impair
Tenant's use of the Premises for more than 9O days, Tenant
shall have the right, at its option, to terminate this Lease as
of the date of such taking. If all of the Premises shall be so
taken, either party may terminate this Lease as of the date of
such taking. If a part of the Premises shall be so taken but
the Lease is not terminated, the rent thereafter to be paid by
Tenant shall be equitably reduced.
Clauses, Plats
and Riders 27. Clauses, plats and riders, if any, signed by Landlord and
Tenant and endorsed on or affixed to this Lease are a part
hereof, and in the event of variation or discrepancy the
duplicate original hereof, including such clauses, plats and
riders, if any, held by Landlord shall control.
Sale By
Landlord 28. In the event the original Landlord hereunder, or any
successor owner of the Building or the Project, shall sell or
convey the Building or the Project, all liabilities and
obligations on the part of the original Landlord, or such
successor owner, under this Lease, accruing thereafter shall
terminate, and thereupon all such liabilities and obligations
shall be binding upon the new owner. Tenant agrees to attorn to
such new owner. If any security be given by Tenant to secure
the faithful performance of all or any of the covenants at this
Lease on the part of Tenant, Landlord may transfer and/or
deliver the security, to the successor in interest of Landlord,
and thereupon Landlord shall be discharged from any further
liability in reference thereto. Except as set forth in this
paragraph 28, this Lease shall not be affected by any such sale
or conveyance.
Estoppel
Certificates 29. At any time and from time to time, within twenty (20) days
after request by either Landlord or Tenant (the "Requesting
Party"), the other party (the "Responding Party") shall
execute, acknowledge and deliver to the Requesting Party a
statement, in the form requested by the Requested Party,
certifying the Commencement Date of this Lease, stating that
this Lease is unmodified and in full force and effect (or if
there have been modifications, that this Lease is in full force
and effect as modified and the date and nature of such
modifications), stating the dates to which the rent has been
paid, stating that the Responding Party has no knowledge of any
uncured defaults by the Requesting Party under the Lease,
stating that the Responding Party has no knowledge of any
material noncompliance with any Hazardous Materials laws at the
Project (or if there is any such noncompliance, identifying all
known instances of such noncompliance), and setting forth such
other matters as may reasonably be requested by the Requesting
Party. Landlord and Tenant intend that any such statement
delivered pursuant to this paragraph 29 may be relied upon by
any mortgagee or the beneficiary of any deed of trust or by any
purchaser or prospective purchaser of the Building or by any
assignee of, sublessee under, Leasehold Mortgagee, Equipment
Mortgagee or other lender to or investor in Tenant. If the
Responding Party fails to so execute, acknowledge and deliver
any such certificate, then the Requesting Party
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may certify any of the foregoing matters, on which any such
person may rely, and the Responding Party shall be estopped
from denying the truth of such facts.
Right of Landlord
to Perform 30. All covenants and agreements to be kept or performed by
Tenant under any of the terms of this Lease shall be
performed by Tenant at Tenant's sole cost and expense and
without any abatement of rent. If Tenant shall fail to pay
any sum of money, other than rent, required to be paid by it
hereunder or shall fail to perform any other act on its part
to be performed hereunder, Landlord may, but shall not be
obligated to, and without waiving any default of Tenant or
releasing Tenant from any obligations of Tenant hereunder,
after expiration of the applicable notice and cure period
provided in paragraph 24, make any such payment or perform
any such other act on Tenant's part to be made or performed
as provided in this Lease. All sums so paid by the Landlord
and all necessary incidental costs, together with interest
thereon at the rate provided in paragraph 5(c) hereof from
the date of such payment by the Landlord, shall be paid to
Landlord forthwith on demand, and Landlord shall have (in
addition to any other right or remedy of Landlord) the same
rights and remedies in the event of nonpayment thereof by
Tenant as in the case of breach by Tenant in payment of rent.
Attorneys'
Fees 31. If as a result of any breach or default on the part of
either party under this Lease ("Defaulting Party"), the other
party uses the services of any attorney in order to secure
compliance with this Lease, the Defaulting Party shall
reimburse the other party upon demand for any and all
attorneys' fees and expenses incurred by the other party,
whether or not formal legal proceedings are instituted.
Should either party bring action against the other party, by
reason of or alleging the failure of the other party to
comply with any or all of its obligations hereunder, whether
for declaratory or other relief, then the party which
prevails in such action shall be entitled to its reasonable
attorneys' fees and expenses related to such action, in
addition to all other recovery or relief. A party shall be
deemed to have prevailed in any such action (without limiting
the generality of the foregoing) if such action is dismissed
upon the payment by the other party of the sums allegedly due
or the performance of obligations allegedly not compiled
with, or if such party obtains substantially the relief
sought by it in the action, irrespective of whether such
action is prosecuted to judgment. In addition, if either
party to this Lease becomes a party to or is involved in any
way in any action concerning this Lease or the Premises by
reason in whole or in part of any act, neglect, fault or
omission of any duty by the other party, its employees or
contractors, the party subjected to said involvement shall be
entitled to reimbursement for any and all reasonable
attorneys' fees and costs.
Surrender
of Premises 32. The voluntary or other surrender of this Lease by Tenant
or mutual cancellation thereof shall not work a merger and,
at the option of Landlord, shall terminate all or any
existing subleases or subtenancies, or at the option of
Landlord, may operate as an assignment to Landlord of any or
all such subleases or subtenancies.
Waiver 33. The waiver by Landlord or Tenant of performance of any
term, covenant or condition herein contained shall not be
deemed to be a waiver of such term, covenant or condition or
any subsequent breach of the same or any other term, covenant
or condition herein contained. The subsequent acceptance of
rent hereunder by Landlord shall not
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be deemed to be a waiver or any preceding breach by Tenant of any
term, covenant or condition of this Lease, other than the failure
of Tenant to pay the particular rent so accepted, regardless of
Landlord's knowledge of such preceding breach at the time of
acceptance of such rent.
Notices 34. All notices, demands, approvals and other communications
provided for in this Lease shall be in writing and shall be
effective (a) when personally delivered (including courier or
other delivery services) to the recipient's address set forth
below; (b) upon receipt at the address provided after deposit in a
sealed envelope in the United States mail, postage prepaid, by
registered or certified mail, return receipt requested, addressed
to the recipient as set forth below; (c) one (1) business day
after deposit with a recognized overnight courier or delivery
service, addressed to the recipient as set forth below; or (d)
upon telephonic confirmation by any person in the office of the
addressee of receipt after transmission by facsimile to the
facsimile number of the recipient set forth below. If the date on
which any notice to be given hereunder falls on a Saturday, Sunday
or legal holiday, then such date shall automatically be extended
to the next business day immediately following such Saturday,
Sunday or legal holiday.
The addresses for notice are:
LANDLORD: Provident Life and Accident Insurance
Company
Corporate Properties
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Xx. Xxxxxx X. Xxxx
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
Copy to: X.X. Xxxxxxxx & Sons
Xxx Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attn: Xx. Xxxxxx X. Xxxxxxxx, Xx.
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
TENANT: MEGABIOS Corp.
Xxx Xxxxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Attn: Xx. Xxxxxxx X. Xxxxx, Vice President
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
Copy to: Heller, Ehrman, White, & XxXxxxxxx
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: K. Xxxxxxx Xxxxxx, Esq
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
Either party may, by written notice to the other given in the
manner set forth above, change its name, address, or its facsimile
or telephone numbers or may include additional parties such as any
fee mortgagee, Leasehold Mortgagee or Equipment Mortgagee.
Leasehold
Mortgage 35. (a) Leasehold Mortgage Authorized. On one or more
-----------------------------
occasions, in accordance with the requirements of this paragraph
35, Tenant may mortgage or otherwise encumber Tenant's leasehold
estate (a "Leasehold Mortgage") to an Institutional Investor (as
hereinafter defined) , under a Leasehold Mortgage and assign
Tenant's interest in this Lease as security for such Leasehold
Mortgage.
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35. (b) Notice to Landlord.
------------------
(1) Tenant shall keep Landlord reasonably informed as to any decision by Tenant
to enter into a Leasehold Mortgage. If Tenant shall mortgage Tenant's leasehold
estate to an Institutional Investor, and if either Tenant or the holder of such
Leasehold Mortgage shall provide Landlord with notice of such Leasehold Mortgage
together with a true copy of such Leasehold Mortgage and the name and address of
mortgagee thereunder (the "Leasehold Mortgagee"), Landlord and Tenant agree
that, following receipt of such notice by Landlord, the provisions of this
paragraph 35 shall apply in respect to such Leasehold Mortgage.
(2) In the event of any assignment of a Leasehold Mortgage or in the event of a
change of address of a Leasehold Mortgagee, notice of the new name or address of
the Leasehold Mortgagee shall be provided to Landlord.
(3) Landlord shall promptly upon receipt of the notice provided for by paragraph
(b) (1) above acknowledge in writing to the Leasehold Mortgagee receipt of such
communication as constituting the notice provided for by paragraph (b) (1)
above.
(4) Aften Landlord has received the notice provided for by paragraph (b) (1)
above, Tenant, upon being requested to do so by Landlord, shall with reasonable
promptness provide Landlord with copies of the note or other obligation secured
by such Leasehold Mortgage and of any other documents pertinent to the Leasehold
Mortgage as specified by Landlord. If requested to do so by Landlord, Tenant
shall thereafter also provide Landlord from time to time with a copy of each
amendment or other modification or supplement to such instruments, and any
assignments or conveyances of the Leasehold Mortgagee's interest.
(5) Tenant shall promptly provide Landlord with a copy of any notice of default
Tenant may receive from Leasehold Mortgagee with respect to the Leasehold
Mortgage.
35. (c) Definitions. The following terms are defined to .shall have the
-----------
following indicated meanings when used in this paragraph 35.
(i) The term "Institutional Investor" shall refer to a savings bank, savings and
loan association, commercial bank, trust company, credit union, insurance
company, college, university, venture capital fund or partnership, real estate
investment trust or pension fund. The term "Institutional Investor" shall also
include other lenders of substance which perform functions similar to any of the
foregoing, and which have assets in excess of fifty million dollars
($50,000,000) at the time the Leasehold Mortgage loan is made.
(ii) The term "Leasehold Mortgage" shall include a mortgage, a deed of trust, a
deed to secure debt, an assignment of rents, issues and profits from the
Premises, or other security instrument by which Tenant's leasehold estate is
mortgaged, conveyed, assigned, or otherwise transferred, to secure a debt or
other obligation.
(iii) The term "Leasehold Mortgagee" shall refer to a holder of a Leasehold
Mortgage in respect to which the notice provided for by paragraph (b) of this
paragraph 35 has been given and received and as to which the provisions of this
paragraph 35 are applicable.
(iv) The term "Leasehold Mortgage Purchaser" shall refer to the purchaser at
any sale of this Lease and of the leasehold estate hereby created in any
proceedings for the
-34-
foreclosure of any Leasehold Mortgage, or the assignee or transferee of this
Lease and of the leasehold estate hereby created under any instrument of
assignment or transfer in lieu of the foreclosure of any Leasehold Mortgage.
35. (d) Consent of Leasehold Mortgagee Required. No cancellation, surrender
---------------------------------------
or modification of this Lease shall be effective as to any Leasehold Mortgagee
unless consented to in writing by such Leasehold Mortgagee.
35. (e) Default Notice. Landlord, upon providing Tenant any notice of (i)
--------------
default under this Lease, or (ii) termination of this Lease, shall at the same
time provide a copy of such notice to any Leasehold Mortgagee. No such notice
by Landlord to Tenant shall be deemed to have been duly given unless and until a
copy thereof has been so provided to the Leasehold Mortgagee. From and after
the date upon which such notice has been given to a Leasehold Mortgagee, such
Leasehold Mortgagee shall have the same period, after the giving of such notice
upon it, for remedying any default or acts or omissions which are the subject
matter of such notice or causing the same to be remedied, as is given Tenant
after the giving of such notice to Tenant, plus in each instance, the additional
periods of time specified in paragraphs (f) and (g) of this paragraph 35 to
remedy, commence remedying or cause to be remedied the defaults or acts or
omissions which are the subject matter of such notice specified in any such
notice. Landlord shall accept such performance by or at the instigation of such
Leasehold Mortgagee as if the same had been done by Tenant. Tenant authorizes
any Leasehold Mortgagee to take any such action at such Leasehold Mortgagee's
option and does hereby authorize entry upon the Premises by the Leasehold
Mortgagee for such purpose.
35. (f) Notice to Leasehold Mortgagee. Anything contained in this Lease to
-----------------------------
the contrary notwithstanding, if any default shall occur which entitles Landlord
to terminate this Lease while there exists a Leasehold Mortgage, Landlord shall
have no right to terminate this Lease unless, following the expiration of the
period of time given Tenant to cure such default or the act or omission which
gave rise to such default, Landlord shall notify the Leasehold Mortgagee of
Landlord's intent to so terminate this Lease ("Termination Notice") at least
20 days in advance of the proposed effective date of such termination if such
default is capable of being cured by the payment of money, and at least 30 days
in advance of the proposed effective date of such termination if such default is
not capable of being cured by the payment of money. The provisions of paragraph
(g) below of this paragraph 35 shall apply if, during such 20 or 30 day
Termination Notice period, any Leasehold Mortgagee shall:
(i) notify Landlord of such Leasehold Mortgagee's desire to nullify such
notice, and
(ii) pay or cause to be paid all rent, additional rent, and other payments
then due and in arrears as specified in the Termination Notice to such Leasehold
Mortgagee and which may become due during such 20 or 30-day period, and
(iii) comply or, in good faith, with reasonable diligence and continuity,
commence to comply with all nonmonetary requirements of this Lease then in
default and reasonably susceptible of being complied with by such Leasehold
Mortgagee; provided, however, that such Leasehold Mortgagee shall not be
required during such 30-day period to cure or commence to cure any default
consisting of Tenant's failure to satisfy and discharge
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any lien, charge or encumbrance against the Tenant's interest in this Lease or
the Premises junior in priority to the lien of the Leasehold Mortgage held by
such Leasehold Mortgagee.
35. (g) Procedure on Default.
--------------------
(1) If Landlord shall elect to terminate this Lease by reason of any
default of Tenant, and a Leasehold Mortgagee shall have proceeded in the manner
provided for by paragraph (f) of this paragraph 35, the specified date for the
termination of this Lease as fixed by Landlord in its Termination Notice shall
be extended for a period of six months, provided that such Leasehold Mortgagee
shall, during such six month period:
(i) Pay or cause to be paid the rent, additional rent and other monetary
obligations of Tenant under this Lease as the same become due, and continue its
good faith efforts to perform all of Tenant's other obligations under this
Lease, excepting (A) obligations of Tenant to satisfy or otherwise discharge any
lien, charge or encumbrance against Tenant's interest in this Lease or the
Premises junior in priority to the lien of the Leasehold Mortgage held by such
Leasehold Mortgagee and (B) past nonmonetary obligations then in default and not
reasonably susceptible of being cured by such Leasehold Mortgagee; and
(ii) If not enjoined or stayed, take steps to acquire or sell Tenant's
interest in this Lease by foreclosure of the Leasehold Mortgage or other
appropriate means and prosecute the same to completion with due diligence .
(2) If at the end of such six (6) month period such Leasehold Mortgagee is
complying, and thereafter continues to comply with paragraph (g)(1), this
Lease shall not then terminate, and the time for completion by such Leasehold
Mortgagee of its proceedings shall continue so long as such Leasehold Mortgagee
is enjoined or stayed and thereafter for so long as such Leasehold Mortgagee
proceeds to complete steps to acquire or sell Tenant's interest in this Lease by
foreclosure of the Leasehold Mortgage or by other appropriate means with
reasonable diligence and continuity. Nothing in this paragraph (g) of this
paragraph 35, however, shall be construed to extend this Lease beyond the
original term thereof as extended by any options to extend the term of this
Lease properly exercised by Tenant or a Leasehold Mortgagee in accordance with
paragraph 35, nor to require a Leasehold Mortgagee to continue such foreclosure
proceedings after the default has been cured. If the default shall be cured and
the Leasehold Mortgagee shall discontinue such foreclosure proceedings, this
Lease shall continue in full force and effect as if Tenant had not defaulted
under this Lease.
(3) If a Leasehold Mortgagee is complying with paragraph (g)(1) of this
paragraph 35, upon the acquisition of Tenant's estate herein by such Leasehold
Mortgagee or its designee or any other Leasehold Mortgage Purchaser and the
discharge of any lien, charge or encumbrance against the Tenant's interest in
this Lease or the Premises which is junior in priority to the lien of the
Leasehold Mortgage held by such Leasehold Mortgagee and which the Tenant is
obligated to satisfy and discharge by reason of the terms of this Lease, this
Lease shall continue in full force and effect as if Tenant had not defaulted
under this Lease.
(4) For the purposes of this paragraph 35, the making of a Leasehold Mortgage
shall not be deemed to constitute an assignment or transfer of this Lease or of
the leasehold
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estate hereby created, nor shall any Leasehold Mortgagee, as such, be deemed to
be an assignee or transferee of this Lease or of the leasehold estate hereby
created so as to require such Leasehold Mortgagee, as such, to assume the
performance of any of the terms, covenants or conditions on the part of the
Tenant to be performed hereunder, but a Leasehold Mortgage Purchaser shall be
deemed to be an assignee or transferee within the meaning of this paragraph 35,
and such Leasehold Mortgage Purchaser shall be deemed to have agreed to perform
all of the terms, covenants and conditions on the part of the Tenant to be
performed hereunder from and after the date of such purchase and assignment, but
only for so long as such Leasehold Mortgage Purchaser is the owner of the
Leasehold Estate.
(5) Any Leasehold Mortgage Purchaser may, upon acquiring Tenant's leasehold
estate hereunder, without further consent of Landlord, sell and assign such
leasehold estate on such terms and to such person or entity as assignee as are
acceptable to such Leasehold Mortgage Purchaser and thereafter be relieved of
all obligations under this Lease, provided that such assignee has delivered to
Landlord its written agreement to be bound by all of the provisions of this
Lease.
(6) Notwithstanding any other provisions of this Lease, any sale of this Lease
and of the leasehold estate hereby created in any proceedings for the
foreclosure of any Leasehold Mortgage, or the assignment or transfer of this
Lease and of the leasehold estate hereby created in lieu of the foreclosure of
any Leasehold Mortgage shall be deemed to be a permitted sale, transfer or
assignment of this Lease and of the leasehold estate hereby created.
35. (h) New Lease. In the event of the termination of this Lease as a result
---------
of Tenant's default, Landlord shall, in addition to providing the notices of
default and termination as required by paragraphs (e) and (f) above of this
paragraph 35, provide any Leasehold Mortgagee with written notice that the Lease
has been terminated, together with a statement of all sums which would at that
time be due under this Lease but for such termination, and of all other
defaults, if any, then known to Landlord. Landlord agrees, at the election of
any Leasehold Mortgagee, to enter into a new lease ("New Lease") of the Premises
with such Leasehold Mortgagee or its designee for the remainder of the term of
this Lease, effective as of the date of termination, at the rent and additional
rent, and upon the terms, covenants and conditions (including all options to
renew but excluding requirements which are not applicable or which have already
been fulfilled) of this Lease, provided:
(i) Such Leasehold Mortgagee shall make written request upon Landlord for such
New Lease within 10 business days after the date such Leasehold Mortgagee
receives Landlord's Notice of Termination of this Lease given pursuant to this
paragraph (h).
(ii) Such Leasehold Mortgagee or its designee shall pay or cause to be paid to
Landlord at the time of the execution and delivery of such New Lease, any and
all sums which would at the time of execution and delivery thereof be due
pursuant to this Lease but for such termination and, in addition thereto, all
reasonable expenses, including reasonable attorneys' fees, which Landlord shall
have incurred by reason of such termination and the execution and delivery of
the New Lease and which have not otherwise been received by Landlord from Tenant
or another party.
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(iii) Such Leasehold Mortgagee or its designee shall agree to remedy any of
Tenant's defaults of which said Leasehold Mortgagee was notified by Landlord's
Notice of Termination and which are reasonably susceptible of being so cured by
Leasehold Mortgagee or its designee.
(iv) Any New Lease made pursuant to this paragraph (h) shall have the same
right, title and interest in and to the Premises and the buildings and
improvements thereon as Tenant had under this Lease.
(v) The tenant under any such New Lease shall be liable to perform the
obligations imposed on the Tenant by such New Lease only during the period such
person has ownership of such Leasehold Estate.
Upon execution and delivery of the New Lease, Landlord, at the expense of the
new tenant thereunder, shall take such action as shall be necessary to cancel
and discharge this Lease and to remove Tenant named herein from the Premises.
Landlord agrees that, until the earlier to occur of (A) the execution and
delivery of the New Lease, or (B) the expiration of the 10 business day period
set forth in subparagraph (h) (i) above without the Leasehold Mortgagee's having
given notice of its request for the New Lease, Landlord shall not modify, amend
or terminate any sublease of any portion of the Premises and that, upon
execution and delivery of any New Lease, Landlord shall assign all of its right,
title and interest in and to all such subleases to the Leasehold Mortgagee or
the Leasehold Mortgage Purchaser. Any sums received by Landlord as rental under
any such subleases shall be credited against any monetary defaults under this
Lease.
35. (i) Casualty Loss. A standard mortgagee clause naming any Leasehold
-------------
Mortgagee may be added to any and all insurance policies required to be carried
by Tenant hereunder on the condition that the insurance proceeds are to be
applied in the manner specified in this Lease and the Leasehold Mortgage shall
so provide.
35. (j) Legal Proceedings. Landlord shall give Leasehold Mortgagee prompt
-----------------
notice of any arbitration or legal proceedings between Landlord and Tenant
involving obligations under this Lease. Leasehold Mortgagee shall have the
right to intervene in any such proceedings and be made a party to such
proceedings, and the parties hereto do hereby consent to such intervention. In
the event that any Leasehold Mortgagee shall not elect to intervene or become a
party to any such proceedings, Landlord shall give the Leasehold Mortgagee
notice of, and a copy of any award or decision made in any such proceedings,
which shall be binding on the Leasehold Mortgagee.
35. (k) Security Deposit. If any Leasehold Mortgagee or Leasehold Mortgage
----------------
Purchaser has acquired the leasehold estate of Tenant pursuant to foreclosure,
conveyance in lieu of foreclosure or other proceedings, or has entered into a
New Lease with Landlord in accordance with paragraph (h) of this paragraph 35,
such Leasehold Mortgagee or Leasehold Mortgage Purchaser shall succeed to the
rights of Tenant, if any, in and to the security deposit paid by Tenant to
Landlord pursuant to the terms of this Lease. In such event, Tenant shall no
longer have any rights to such security deposit and Landlord shall hold such
security deposit for and on behalf of such Leasehold Mortgagee or Leasehold
Mortgage Purchaser.
35. (1) Erroneous Payments. No payment made to Landlord by a Leasehold
------------------
Mortgagee shall constitute agreement that such payment was, in fact, due under
the terms of this Lease; and a Leasehold Mortgagee having made any payment
-38-
to Landlord pursuant to Landlord's wrongful, improper or mistaken notice or
demand shall be entitled to the return of any such payment or portion thereof,
provided that such Leasehold Mortgagee shall have made demand therefor not later
than one year after the date of its payment.
35. (m) Sublease Rentals. Landlord consents to a provision in any Leasehold
----------------
Mortgage or otherwise for an assignment of rents from subleases of the Premises,
as additional security, to any Leasehold Mortgagee.
35. (n) Equipment Mortgages Authorized. On one or more occasions, Tenant may
------------------------------
lease, sell and leaseback, mortgage or otherwise encumber Tenant's interest in
any item or items of furniture, inventory, trade fixtures, equipment (including,
without limitation, any equipment which by its installation in the Premises has
become a fixture) or other personal property then or thereafter to be located or
installed in the Premises (collectively for purposes of this paragraph 35,
"Equipment Mortgage" and "Equipment", respectively) to any company engaged in
the business of selling or financing the same (including but not limited to the
manufacturer, distributor or retailer of any Equipment or any Institutional
Investor) under one or more Equipment Mortgages. If either Tenant or any
Equipment Mortgagee shall provide Landlord with notice of any Equipment
Mortgage, together with a true copy of such Equipment Mortgage and the name and
address of the Equipment Mortgagee, Landlord and Tenant agree that the following
shall apply to such Equipment Mortgage and the Equipment:
(i) Title to the Equipment shall be and remain in the name of either Tenant or
Equipment Mortgagee during the term of the Lease and not that of Landlord, and
as between Landlord and Equipment Mortgagee, shall not be deemed to constitute
real property and may be removed from the Premises by the Equipment Mortgagee at
any time during the term of the Lease in the event of a default by Tenant under
the terms of its Equipment Mortgage.
(ii) In the event of any assignment of an Equipment Mortgage, or in the event of
a change of address of an Equipment Mortgagee, notice of the new name or address
of the Equipment Mortgagee shall be provided to Landlord.
(iii) Landlord shall promptly notify the Equipment Mortgagee of any termination
or expiration of the term of this Lease, and afford any Equipment Mortgagee a
reasonable period of time after Equipment Mortgagee's receipt of such notice in
which Equipment Mortgagee may enter the premises to inspect and remove any
Equipment from the Premises which then remains subject to such Equipment
Mortgage.
(iv) Landlord shall upon request of Tenant, execute any document reasonably
requested of it to evidence in favor of any Equipment Mortgagee (A) the consent
of Landlord to any such Equipment Mortgage, (B) the waiver by Landlord of any
possible rights in or liens upon any such Equipment, and (C) the acknowledgment
by Landlord of the rights of such Equipment Mortgagee in and to such Equipment
(including the rights of Equipment Mortgagee to remove such Equipment upon
termination of this Lease).
35. (o) Notices. Notices from Landlord to any Leasehold Mortgagee or
-------
Equipment Mortgagee shall be mailed to the address furnished Landlord pursuant
to this paragraph 35, and those from the Leasehold Mortgagee or Equipment
Mortgagee to Landlord shall be mailed to the address designated pursuant to the
provisions of paragraph 34 hereof. Such notices, demands and requests shall be
given
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in the manner described in paragraph 34 and shall in all
respects be governed by the provisions of that paragraph.
35. (p) Leasehold and Eguinment Mortgagee Benefitted.
--------------------------------------------
The respective provisions of this paragraph 35 are for the
benefit of, and are to be enforceable by, any Leasehold
Mortgagee, Leasehold Mortgagee Purchaser or Equipment
Mortgagee.
Defined Terms
and Marginal
Headings 36. The words "Landlord" and "Tenant," as used herein shall
include the plural as well as the singular and words used in
masculine gender shall include the feminine and neuter. If
there be more than one Tenant, the obligations hereunder
imposed upon Tenant shall be joint and several. The marginal
headings and titles to the paragraphs of the Lease are not a
part of this Lease and shall have no effect upon the
construction or interpretation of any part hereof.
Time and
Applicable
Law 37. Time is of the essence of this Lease and each and all of
its provisions. This Lease shall in all respects be governed
by the laws of the state in which the Premises are located.
Successors 38. Subject to the provisions of paragraphs 14 and 28 hereof,
the covenants and conditions herein contained shall be
binding upon and inure to the benefits of the heirs,
successors, executors, administrators and assigns of the
parties hereto.
Entire
Agreement 39. This Lease constitutes the entire agreement between
Landlord and Tenant and no promises or representations,
express or implied, either written or oral, not herein set
forth shall be binding upon or inure to the benefit of
Landlord or Tenant. This Lease shall not be modified by any
oral agreement, either express or implied, and all
modifications hereof shall be in writing and signed by both
Landlord and Tenant.
Late Charge 40. In the event Tenant shall fail to pay any rent or other
sums due hereunder within five (5) business days after
written notice from Landlord that such payment is past due,
then and in that event the amount so due and unpaid shall
bear a late charge equal to five percent (5%) of the amount
due together with interest accruing from the date due at the
interest rate provided in paragraph 5(c) hereof, which late
charge and interest shall be payable forthwith upon demand.
(The foregoing shall be in addition to any other right or
remedy of Landlord.)
No Discrimina-
tion 41. Tenant agrees for Tenant and Tenant's heirs, executors,
administrators, successors and assigns and all persons
claiming under or through Tenant, and this Lease is made and
accepted upon the following condition: that there shall be no
discrimination against or segregation of any person or group
of persons on account of race, color, creed, sex, religion,
marital status, ancestry or national origin (whether in the
use, occupancy, subleasing, transferring, tenure or enjoyment
of the Premises or otherwise) nor shall Tenant or any person
claiming through or under Tenant establish or permit any such
practice or practices of discrimination or segregation with
reference to or arising out of the use or occupancy of the
Premises by Tenant or any person claiming through or under
Tenant.
-40-
Additional
Provisions 42. The exhibits and addenda listed below are incorporated by
reference in this Lease.
A. Site Plan
A-l. Equipment Area
A-2. Reserved Parking - Existing Tenant Vacated
A-3. Reserved Parking - Existing Tenant Remains
A-4. Approved Signage Locations
B. Commencement Date Memorandum
C. Direct Expenses
D. Rules and Regulations
Existing
Tenant 43. (a) Tenant acknowledges that approximately 3,317 rentable
square feet of Building A, as shown on the Site Plan ("Existing
Premises"), is currently occupied by Xxxxxxx Xxxxxx dba National
Glass Burlingame ("Existing Tenant") pursuant to that certain
Lease Agreement dated August 10, 1990 originally between B-S-K
Associates, as landlord, and Existing Tenant, as tenant ("Existing
Lease"). Tenant further acknowledges that Existing Tenant has
commenced a proceeding pursuant to Chapter 11 of the United States
Bankruptcy Code, case no. 93-31341 TC, in the United States
Bankruptcy Court for the Northern District of California
("Bankruptcy Court"). Tenant further acknowledges that Landlord
has commenced negotiations with Existing Tenant seeking Existing
Tenant's agreement to terminate the Existing Lease or to relocate
to a portion of the Project other than the Premises, but that
Existing Tenant has not agreed to do so and any such agreement is
currently subject to obtaining Bankruptcy Court approval. Landlord
shall expeditiously and diligently pursue all reasonable means to
cause the Existing Tenant's relocation, including immediately
proceeding with filing an appropriate motion in the Bankruptcy
Court for authority to relocate the Existing Tenant and to
discourage any further extension of the present period for
assumption or rejection of the Existing Lease.
43. (b) Notwithstanding any provision to the contrary in this
Lease, the Premises demised by this Lease shall not include the
Existing Premises unless and until either (i) Existing Tenant
rejects the Existing Lease and vacates the Existing Premises, (ii)
Existing Tenant voluntarily or involuntarily vacates the Existing
Premises without there being any legal requirement for obtaining
any court approval to surrender the Existing Premises to Landlord,
(iii) Landlord has obtained any required Bankruptcy Court approval
of any agreement between Landlord and Existing Tenant pursuant to
which Existing Tenant is to vacate the Existing Premises and
Existing Tenant vacates the Existing Premises, or (iv) Landlord
has obtained any required Bankruptcy Court order (or other order
of any court having jurisdiction over the matter) authorizing
Landlord to proceed with relocating the Existing Tenant (over
Tenant's objection or inaction) and Existing Tenant vacates the
Existing Premises. If any required final Bankruptcy Court approval
or order has not been obtained by January 14, 1994, then Tenant
shall have the right by notice to Landlord at any time thereafter
through the period ending the earlier of (a) April 20, 1994 or (b)
twenty (20) days after receipt of a final Bankruptcy Court
decision or order approving either (A) the rejection of the
Existing Lease or (B) the assumption of the Existing Lease (or any
replacement lease), and determining whether the Existing Tenant
will be required to relocate out of the Existing Premises (the
"Existing Tenant Decision Period"), to terminate this Lease or to
decide to proceed with design, construction and later occupancy
around the Existing Premises. In such later event, Tenant shall
notify Landlord whether it still desires to lease as soon as
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feasible the Existing Premises. The failure of Tenant to make any formal
election prior to the expiration of the Existing Tenant Decision Period, shall
be deemed to constitute the decision of Tenant to proceed with design,
construction and later occupancy around the Existing Premises, with Tenant still
desiring to lease as soon as feasible the Existing Premises. If Tenant does
still so desire to lease as soon as feasible the Existing Premises, then
Landlord shall have a continuing obligation to relocate the Existing Tenant as
quickly as possible and to seek appropriate Bankruptcy Court or other court
approval or orders for the same. If Tenant does not then desire to lease as soon
as feasible the Existing Premises, then (i) Tenant shall design its Tenant
Improvements around the unavailability of the Existing Premises, (ii) Tenant
shall be relieved of any obligation to lease the Existing Premises when it first
becomes available, (iii) Tenant shall be relieved of any obligation under clause
(4) of paragraph 43(b) to bear any portion of any costs to relocate the
Existing Tenant, (iv) Landlord shall be relieved of its continuing obligation to
relocate the Existing Tenant, (v) Tenant's right of first refusal under
paragraph 1(d) hereof shall apply to such Existing Premises (including any
attempted extension of the term of such Existing Lease; and (vi) Tenant shall
have the right during the Initial Term by written notice to Landlord to require
Landlord to renew its efforts to relocate the Existing Tenant as quickly as
possible whereupon Tenant shall be obligated to lease the Existing Premises
when it first becomes available upon the terms provided in this Lease and shall
be obligated pursuant to clause (4) of this paragraph 43(b) to bear a portion
of the costs thereafter incurred to relocate the Existing Tenant. In all events,
Landlord shall remain obligated promptly to perform any Mandatory Seismic Work
to be performed by Landlord under this Lease in the Existing Premises. Unless
and until Tenant may elect as provided above not to lease as soon as feasible
the Existing Premises (with the following covenants of Landlord and Tenant to be
reinstated in the event Tenant subsequently elects pursuant to clause (vi) above
to require Landlord to renew its efforts to relocate the Existing Tenant), the
following covenants shall be applicable with respect to Existing Tenant:
(1) Landlord shall use diligent efforts to expeditiously reach an agreement
with Existing Tenant to terminate the Existing Lease or to otherwise vacate the
Existing Premises. If such agreement involves relocating Existing Tenant to
another portion of the Project, then Landlord shall use its reasonable efforts
to minimize the costs which will be incurred in connection therewith.
(2) As soon as reasonably possible following Existing Tenant's agreement to
terminate the Existing Lease or to otherwise vacate the Existing Premises,
Landlord shall file (or Landlord shall cause Existing Tenant to file) promptly
any required motion with the Bankruptcy Court to obtain approval of such
agreement, and Landlord shall use diligent efforts to obtain such Bankruptcy
Court approval (unless Bankruptcy Court approval is then no longer required for
the same).
(3) If any required Bankruptcy Court or other court approval or order is
obtained, Landlord shall promptly commence such actions as may be reasonably
necessary to relocate Existing Tenant to another portion of the Project other
than the Premises or to terminate the Existing Lease, as the case may be.
(4) If Existing Tenant agrees to relocate to another portion of the Project
other than the Premises, and any
-42-
required Bankruptcy Court approval to that agreement is obtained,
then Tenant agrees to reimburse Landlord for one half (1/2) of all
reasonable out-of-pocket costs to Landlord of constructing the
tenant improvements to relocate the Existing Tenant; provided,
however, Tenant's share of such costs shall not exceed forty
thousand five hundred dollars ($40,500.00). Landlord and Tenant
shall concurrently pay all such costs upon receipt of invoices or
other reasonably satisfactory evidence of such costs. Tenant's
failure to pay any such amount when due shall have the same effect
as Tenant's failure to pay rent under this Lease; provided,
however, Landlord shall also have the right, at its option, to
deduct the amount that Tenant failed to pay from the Basic
Allowance.
Landlord's
Work 44. Provided that (i) Tenant is not in default under this Lease,
(ii) Landlord shall have approved the Construction Documents, and
(iii) the Mandatory Seismic Work (as defined in paragraph 45(c))
shall have been determined and Tenant shall have notified Landlord
whether or not Tenant will cause any of such Mandatory Seismic
Work to be performed pursuant to paragraph 45(c), then Landlord
shall commence and diligently prosecute to substantial completion
(but subject to Force Majeure Delay as defined in paragraph
46(a)), at its sole cost except as specifically provided in
paragraph 45(c), the following work (collectively, "Landlord's
Work"):
(a) demolish all existing improvements in the Premises including
the existing bathrooms in Building A (provided, however, (i)
Landlord shall not have any obligation to demolish any
improvements in the Existing Premises unless Existing Tenant has
vacated the Existing Premises as provided in paragraph 43(b)),
(ii) if Existing Tenant does not vacate but is to remain in the
Existing Premises at the Commencement Date, tire existing
bathrooms in Building A which service the Existing Premises shall
remain, and Landlord shall eliminate to the fullest extent
possible the corridor leading to the same and instead, if
possible, provide Existing Tenant alternative access to such
bathrooms through the Existing Premises (with any such remaining
bathrooms and corridors not to be deemed a common area for
purposes of calculating the Adjusted Load Factor) , and (iii) in
the event of the applicability of clause (ii) above, then upon
Existing Tenant later vacating the Existing Premises and Tenant
exercising any rights under this Lease as to leasing such Existing
Premises, Landlord shall be obligated to demolish the then
existing improvements in the Existing Premises and such bathrooms
and any remaining corridors serving the same).
(b) patch and paint the exterior of the Building as a result of
installation of the windows, doors and skylights referred to in
paragraphs 44(c), 44(d) and 44(e), respectively;
(c) install five (5) windows, each approximately ten (10) feet
long and six (6) feet high, in the exterior wall on the east side
of the Building in the locations proposed by Tenant and approved
by Landlord pursuant to paragraph 45;
(d) install one (1) roll-up door and one (1) double glass door in
the exterior wall on the east side of the Building in the
locations proposed by Tenant and approved by Landlord pursuant to
paragraph 45;
(e) install ten (10) skylights, each approximately six (6) feet
long and six (6) feet wide, in the roof of the Building in the
locations proposed by Tenant and approved by Landlord pursuant to
paragraph 45;
-43-
(f) enclose the Equipment Area and the area currently occupied by equipment on
the exterior of the east side of the Building with a concrete block wall or
poured concrete enclosure (which shall be covered with paint or a stucco-type
surface), or with a chainlink fence with redwood lathe, with such choice to be
at the sole discretion of Tenant, as approved by Landlord pursuant to paragraph
45;
(g) perform all Mandatory Seismic Work, except such work as Tenant may elect to
perform pursuant to paragraph 45(c), pursuant to that certain Seismic Evaluation
Report for 000 Xxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxx, dated August, 1993, prepared
by Xxx Xxxx Engineering, Inc. ("Seismic Report");
(h) modify and install landscaping and an irrigation system in the landscaped
area to be located adjacent to the Equipment Area (however, not to exceed the
amount of $3,000 in additional out-of-pocket costs being incurred by Landlord
after the date of execution of this Lease); and
(i) repair any leaks in the roof that are discovered within the first twelve
(12) months of the Initial Term, unless such leak is demonstrated to have been
caused by Tenant's installation, use or occupancy of the Roof Platform or the
Premises, or by a penetration of the roof by Tenant during the construction of
Tenant Improvements.
All Landlord's Work shall be constructed in a good and workmanlike manner,
consistent with Tenant's Final Plans if applicable, pursuant to Landlord's
standard specifications for, and utilizing the same materials as those used
throughout the Project, and in compliance with all applicable laws. Landlord
shall begin all Landlord's work immediately upon satisfaction of the condition
set forth in paragraph 45(b) hereof, shall pursue all such work diligently and
expediently to completion and shall coordinate the schedule of all Landlord's
Work with the schedule of Tenant's contractors and subcontractors so as not to
unreasonably affect the scheduling and construction of the Tenant Improvements.
Tenant or Tenant's agents shall have the right to inspect and require correction
of Landlord's Work during the progress thereof, it being the intent of the
parties that Tenant shall be reasonable in its inspection of Landlord's Work. In
lieu of Landlord performing some or all of the items of Landlord's Work set
forth above, Landlord and Tenant may separately agree to a monetary sum to be
paid by Landlord to Tenant whereupon Tenant shall assume responsibility for
causing such item or items of Landlord's Work to be performed by Tenant's
Contractor.
Landlord has delivered to Tenant, and Tenant acknowledges receipt of, that
certain Asbestos Survey Summary Report, dated July 6, 1993, prepared by The X.X.
Xxxxxxx Company ("Asbestos Report"). Except as disclosed in the Asbestos Report,
Landlord has no actual knowledge of the presence of any Hazardous Materials in,
on or about the Premises. Landlord shall be responsible for promptly removing as
part of Landlord's Work in accordance with applicable Hazardous Materials laws,
(i) any Hazardous Materials present or installed before the Commencement Date in
or on the floor, walls, ceiling or other items in the interior areas of the
Premises, and (ii) any Hazardous Materials in the roof or parapets which might
otherwise be disturbed in the process of construction of either Landlord's Work
or the Tenant Improvements. Upon Tenant expanding into any additional space
pursuant to paragraphs 1(c) or 1(d) hereof, Landlord shall be similarly
responsible for removing any Hazardous Materials (i) then present or installed
in such additional space and (ii) in the roof or parapets which might otherwise
be disturbed in the process
-44-
or construction or any Tenant improvements for such additional
space. If Tenant should knowingly discover the presence of any
such Hazardous Materials (that Landlord was so obligated to
remove) during the course of constructing any tenant improvements
or any subsequent alterations, additions or improvements in or
about the Premises or in or about any additional space, (A) Tenant
shall promptly notify Landlord of the same and (B) at Tenant's
election, either Landlord shall at its sole cost promptly remove
such Hazardous Materials, or Tenant may instead, by notice to
Landlord, elect to assume responsibility for the removal of any
such Hazardous Materials, with Landlord in such event to be
obligated to reimburse Tenant for all costs reasonably incurred by
Tenant for accomplishing such removal to the extent such costs so
incurred by Tenant do not exceed standard industry costs for
accomplishing such removal, with any such reimbursement to be due
within twenty (20) days after presentation to Landlord by Tenant
of reasonable documentation of the costs so incurred.
Tenant
Improvements 45. Tenant shall construct the improvements shown on the
Construction Documents (the "Tenant Improvements") in accordance
with the following provisions:
45. (a) Tenant Improvement Plans.
------------------------
(1) Tenant's Designer. Tenant shall retain a designer
-----------------
("Designer" with "Tenant's Architect" as used in this Lease to
mean either such Designer or any architect who replaces the
Designer in the supervision of construction of any Tenant
Improvements or of any later alterations, additions, or
improvements to the Premises) to prepare preliminary space plans
("Space Plans") to be utilized in the preparation of the final
working drawings and specifications for the Tenant Improvements.
Such Designer shall be subject to the approval of Landlord, which
approval will not be unreasonably withheld or delayed. Tenant is
currently utilizing Xxxxxxx - Xxxxxxxx as its Designer, and
Landlord hereby approves of the same.
(2) Space Plans. Tenant shall deliver two (2) copies of the
-----------
Space Plans to Landlord within thirty (30) days after the date of
expiration of the Existing Tenant Decision Period. Such Space
Plans are required to reflect the general design of the Premises,
including interior walls and a general idea of the contemplated
use of each separate room therein. Landlord shall approve or
disapprove, for reasonable reasons, the Space Plans within five
(5) business days after Landlord receives the Space Plans and, if
disapproved, Landlord shall return the Space Plans to Tenant, who
shall make all necessary revisions within fifteen (15) business
days after Tenant's receipt thereof. The failure of Landlord to
respond to any Space Plans so submitted within such five business
day period (and if disapproved, stating therein in reasonable
detail, the basis for such disapproval), shall be deemed to
constitute the approval of Landlord thereto. This procedure shall
be repeated until Landlord ultimately approves the Space Plans. As
approved, the Space Plans, as modified, shall be deemed the "Final
Preliminary Plans."
(3) Engineering Plans. Tenant shall select as the
-----------------
mechanical and electrical engineer(s) a qualified company or
companies, experienced in such buildings which company or
companies must possess a reputation for excellence, to prepare all
engineering plans, many of which engineering plans are intended to
be done on a "design-build" basis.
(4) Construction Documents. After the Space Plans are
----------------------
ultimately approved by Landlord and are deemed to be
-45-
the Final Preliminary Plans, Tenant shall cause Designer to
prepare, within seventy-five (75) business days following
Landlord's approval of the Final Preliminary Plans, final plans
and specifications ("Final Tenant Plans") and a reasonably
detailed, line item budget ("Budget") for completion of the Tenant
Improvements. Tenant shall then deliver two (2) sets of the Final
Tenant Plans and the Budget to Landlord. The Final Tenant Plans
shall reflect the proposed locations of the windows, doors and
skylights to be installed by Landlord as part of Landlord's Work,
and all other information required to permit Landlord to proceed
with Landlord's Work. Landlord shall approve or disapprove, for
reasonable reasons (provided, however, Landlord may disapprove the
location of any window, door or skylight to be installed by
Landlord as part of Landlord's Work if any such location would
materially adversely effect the structural integrity of the
Building, would result in significant seismic improvements or
upgrading to install any such item in that location or if
installing any such item in that location would cost more than ten
thousand dollars ($10,000)), the Final Tenant Plans and the Budget
within five (5) business days after Landlord receives the Final
Tenant Plans and the Budget and, if disapproved, Landlord shall
return the Final Tenant Plans and the Budget to Tenant who shall
make all necessary revisions within fifteen (15) business days
after Tenant's receipt thereof. The failure of Landlord to respond
to any Final Tenant Plans and Budget so submitted within such five
business day period (and if disapproved, stating therein in
reasonable detail, the basis for such disapproval), shall be
deemed to constitute the approval of Landlord thereto. This
procedure shall be repeated until Landlord ultimately approves the
Final Tenant Plans and the Budget. As approved, the Final Tenant
Plans and the Budget, as modified, shall be deemed the
"Construction Documents." All deliveries of the Space Plans, Final
Preliminary Plans, Final Tenant Plans and the Budget shall be
delivered by messenger service, by personal hand delivery or by
overnight parcel service. While Landlord has the right to approve
the Space Plans, Final Preliminary Plans, Final Tenant Plans and
the Budget, Landlord's sole interest in doing so is to protect the
Building and Landlord's interests. Accordingly, Tenant shall not
rely upon Landlord's approvals and Landlord shall not be the
guarantor of, nor responsible for, the correctness or accuracy of
any such Space Plans, Final Preliminary Plans, Final Tenant Plans
or the Budget, or the compliance thereof with applicable laws, and
Landlord shall incur no liability of any kind by reason of
granting such approvals. Tenant shall provide Landlord with an
updated version of the Budget within ten (10) days after any
material change to the Budget and within (10) days after
Landlord's written request for an updated version of the Budget
(which requests shall not be more frequent than monthly), but
Landlord shall have no right to approve any revisions to the
Budget. Tenant shall provide Landlord with two sets of "as built"
Final Tenant Plans within forty-five (45) days after completion of
the Tenant Improvements.
45. (b) Permits and Approvals. Tenant shall be responsible for
---------------------
obtaining all governmental approvals of the Construction Documents
to the full extent necessary for the issuance of a building permit
for the Tenant Improvements based upon such Construction
Documents. Landlord shall cooperate with Tenant to the extent
reasonably necessary in obtaining a building permit for the Tenant
Improvements, with such cooperation to be at Tenant's expense as
to any out-of-pocket expenses, if any, reasonably incurred by
Landlord. Tenant shall also cause to be obtained all other
necessary approvals and permits from all governmental agencies
having authority over the
-46-
construction and installation of the Tenant Improvements in
accordance with the approved Construction Documents and shall
undertake all steps necessary to insure that the construction of
the Tenant Improvements is accomplished in strict compliance with
all state or local laws, ordinances, rules and regulations
applicable to such construction and the requirements and standards
of any insurance underwriting board, inspection bureau or
insurance carrier insuring the Premises pursuant to the Lease.
Tenant shall have the right by written notice to Landlord, given
on or before March 31, 1994 to terminate the Lease in the event
Tenant has not been and does not reasonably contemplate becoming
by March 31, 1994 fully successful in obtaining (upon such terms
and conditions as are reasonably acceptable to Tenant) all
required or appropriate governmental approvals, consents, permits
and licenses to build the Tenant Improvements contemplated by
Tenant, to use and store such Hazardous Materials as are
appropriate to the activities contemplated to be conducted by
Tenant in the Premises and, more generally, to conduct the
activities contemplated to be conducted by Tenant in the Premises.
Landlord shall not be obligated either to commence construction of
Landlord's Work or to commence construction of any tenant
improvements associated with relocating the Existing Tenant
pursuant to Paragraph 43 hereof, prior to either (i) the
satisfaction of this condition, (ii) the waiver by Tenant of this
condition, or (iii) the receipt of a written notice from Tenant
requesting Landlord to proceed immediately with Landlord's Work
(and if then applicable, with constructing tenant improvements for
purposes of relocating the Existing Tenant), which notice embodies
the agreement of Tenant in the event of Tenant's subsequent
termination of the Lease pursuant to this condition, to reimburse
Landlord for its out-of-pocket costs reasonably incurred by
Landlord in (a) performing any Landlord's Work and (b) in
thereafter removing any Landlord's Work and returning the Premises
to the condition in which it existed prior to such Landlord's Work
to the extent Landlord elects to remove any of such Landlord's
Work within ninety (90) days after receiving any such notice of
termination, and, if applicable, to reimburse Landlord for a
portion of the costs of such tenant improvements for the Existing
Tenant in the amount required by Paragraph 43(b)(4) of this Lease.
45. (c) Seismic Upgrade. Without limiting paragraph 45(b),
---------------
Tenant acknowledges that governmental approval of the Construction
Documents will result in some mandatory seismic upgrades to 863
Mitten. Accordingly, Tenant agrees to give Landlord reasonable
prior notice of all conversations and meetings with applicable
governmental agencies regarding approval of the Space Plans, Final
Preliminary Plans and Construction Documents to permit Landlord or
its representative to participate in such governmental approval
process. Landlord and Tenant shall cooperate with each other and
act in good faith in obtaining governmental approval of the
Construction Documents and negotiating the scope of any seismic
upgrade work. Landlord and Tenant agree that (i) all work shown on
those certain plans approved by the City of Burlingame during
November, 1993 for the issuance of a building permit with respect
to the Building (the "Approved Seismic Work"); and (ii) any
additional or different work in the nature of seismic upgrade work
which the City of Burlingame may require be done to the Building
in conjunction with its later issuance of a building permit for
any Landlord's Work or Tenant Improvements, or in conjunction with
the approval by city inspectors of any of the same, shall be
herein collectively referred to as the "Mandatory Seismic Work."
The Mandatory Seismic Work shall be part of Landlord's Work;
provided, however, (i) Landlord shall not be responsible for any
costs of
-47-
relocating any then installed Approved Seismic Work caused by the
design of the Tenant Improvements and (ii) Tenant may elect, by
delivering written notice (the "Seismic Election Notice") to
Landlord within five (5) business days after receipt by Tenant of
the Mandatory Seismic Work Cost Estimate (as defined below), to
cause Contractor (as defined in paragraph 45(d) to perform, at
Tenant's sole cost and in accordance with the Seismic Report and
applicable laws, that portion of the Mandatory Seismic Work to
upgrade the Premises from 1973 Uniform Building Code standards to
1985 Uniform Building Code standards. Landlord shall, as soon as
reasonably practicable, notify Tenant of the reasonably estimated
cost of performing the Mandatory Seismic Work, and of the
estimated cost of the portion of the Mandatory Seismic Work to
upgrade the Premises from 1973 Uniform Building Code Standards to
1985 Uniform Building Code Standards ("Landlord's Seismic Work
Cost Estimate"). Landlord's failure to so receive Tenant's Seismic
Election Notice shall be deemed Tenant's election not to perform
any of the Mandatory Seismic Work, in which event Tenant shall pay
to Landlord, upon delivery of invoices or other reasonably
satisfactory evidence, an amount equal to the incremental cost to
upgrade Buildings A, B, C and D, which constitute an approximately
71,193 rentable square foot portion of the two connected buildings
constituting 863 Mitten, from 1973 Uniform Building Code standards
to 1985 Uniform Building Code standards multiplied by a fraction,
the numerator of which shall be the rentable area of the Premises,
and the denominator of which shall be 71,193; provided, however,
in no event shall the foregoing amount to be paid by Tenant exceed
the product of one and 40/100 dollars ($1.40) multiplied by the
rentable area of the Premises (as recalculated as of the
Commencement Date in accordance with paragraph 5(e) hereof).
Tenant's failure to pay any such amount within ten (10) business
days after receipt of invoice shall have the same effect as
Tenant's failure to pay rent under this Lease; provided, however,
Landlord shall also have the right, at its option, to deduct the
amount that Tenant failed to pay from the amount of the Basic
Allowance.
45. (d) Construction. Tenant shall employ an outside
------------
contractor or contractors of Tenant's choice ("Contractor") to
construct the Tenant Improvements in substantial conformance with
the Construction Documents; provided, however, that the Tenant
Improvements must be at least equal, in quality, to Landlord's so-
called "building standard work" and shall include those items and
materials approved by Landlord (or reasonably appropriate
substitute items or materials of at least substantially equivalent
quality to those earlier approved by Landlord) in connection with
the Space Plans, and provided further that Contractor and the
performance of the work shall be subject to the following
conditions:
(1) Contractor shall be duly licensed and subject to
Landlord's prior written approval, which approval shall not be
unreasonably withheld, with Landlord hereby approving in advance
any decision by Tenant later to engage as its Contractor the firm
of Xxxxxxx & Xxxxxxx, Inc.
(2) Landlord or Landlord's agents shall have the right to
inspect the construction work to be conducted by Tenant during the
progress thereof, it being the intent of the parties hereto that
Landlord shall be reasonable in its inspection of the construction
work conducted by Tenant and that Landlord shall recognize, to the
extent commercially reasonable and practicable, the necessity of
field changes based on field conditions. If Landlord shall give
valid notice of faulty construction or any
-48-
other deviation from the Construction Documents, Tenant shall cause Contractor
to make corrections promptly. However, neither the privilege herein granted to
Landlord to make such inspections, nor the making of such inspections by
Landlord, shall operate as a waiver of any rights of Landlord to require good
and workmanlike construction and improvements erected in accordance with the
Construction Documents.
45. (e) Tenant Construction Allowance.
-----------------------------
(1) Basic Allowance. Landlord will pay an amount equal to one-third of
---------------
all costs, but in no event more than $241,130, toward the cost of the design and
construction of the Tenant Improvements to the extent shown on the Budget
approved by Landlord, and for no other purpose (the "Basic Allowance"). The
amount of the Basic Allowance shall adjust upward or downward to any change in
the rentable square footage area of the Premises, with such adjustment to be at
the rate of Ten Dollars ($10.00) per rentable square foot. Landlord will make
payments to Tenant from the Basic Allowance only in progress payments not more
frequently than once per month, and shall only make payments equal to one half
(1/2) of the amount Tenant has theretofore made or thereupon simultaneously
makes to Contractor or subcontractors, and only after receipt by Landlord of
conditional mechanics' lien releases (which mechanics' lien releases shall, at
Landlord's option, be executed by such subcontractors, labor suppliers and
materialmen, as reasonably determined by Landlord, in addition to Contractor).
Landlord shall also withhold the last fifteen percent (15%) of the Basic
Allowance until lien-free expiration of the time for the filing of any
mechanics' liens claimed or which might be filed on account of any work ordered
by Tenant or Contractor or any subcontractor of Tenant as relates to the
completion of the First Phase of the Tenant Improvements. In the event the cost
of construction of the Tenant Improvements exceeds the available amount of the
Basic Allowance, Tenant shall be obligated to pay such excess cost.
(2) Tenant Improvement Account. Prior to or concurrently with the
--------------------------
commencement of construction of any Landlord's Work, Seismic Work, the Tenant
Improvements, or any relocation work for the Existing Tenant, Tenant shall
deposit with a Chicago Title Company, or another escrow company reasonably
acceptable to the parties ("Escrow Agent"), the sum of two hundred fifty
thousand dollars ($250,000.00) to secure Tenant's obligations to complete the
Tenant Improvements, which amount shall be deposited in an interest-bearing
account ("Tenant Improvement Account") in the name of Tenant. Landlord and
Tenant shall execute any instructions reasonably required by Escrow Agent to
disburse the funds from the Escrow Improvement Account. Those funds shall be
disbursed as follows:
A. Provided Tenant is not in default under this Lease, and no event
has occurred and is then continuing for which Tenant has received written notice
which with the passage of time would constitute a default (the "No Default
Condition"), on the date that Tenant has paid to Contractor or Tenant's
subcontractors an amount at least equal to eight hundred thousand dollars
($800,0O0) towards the total cost of the Tenant Improvements, all of the funds
in the Tenant Improvement Account shall then be returned to Tenant. If the No
Default Condition to the return of the funds in the Tenant Improvement Account
is not initially satisfied at the time that Tenant has so paid $800,000, but
such default (or the event which would otherwise constitute a default) is
thereafter cured while this Lease remains in effect, then the funds in the
Tenant
-49-
Improvement Account shall at such time be returned to Tenant.
B. UPON TENANT'S DEFAULT UNDER THIS LEASE WHICH RESULTS IN THE
TERMINATION OF THIS LEASE BEFORE THE EVENT DESCRIBED IN PARAGRAPH 45(E)(2)(A)
OCCURS, ALL FUNDS THEN DEPOSITED IN THE TENANT IMPROVEMENT ACCOUNT SHALL BE
DELIVERED TO LANDLORD. ONE HALF OF THE AMOUNT (THE "FIRST HALF") IN THE TENANT
IMPROVEMENT ACCOUNT SHALL BE APPLIED BY LANDLORD TO PAY ANY AND ALL MECHANICS'
OR MATERIALMEN'S LIENS OR CLAIMS RELATING TO THE CONSTRUCTION OF ANY TENANT
IMPROVEMENTS TO THE PREMISES, AND THE REMAINING ONE-HALF OF SUCH AMOUNT TOGETHER
WITH ANY PORTION OF THE FIRST HALF WHICH EXCEEDS, IF AT ALL, THE SUM OF ALL SUCH
MECHANICS' OR MATERIALMEN'S LIENS OR CLAIMS SHALL BE RETAINED BY LANDLORD AS
LIQUIDATED DAMAGES FOR TERMINATION OF THE LEASE. LANDLORD SHALL HAVE NO OTHER
CLAIMS, CAUSES OF ACTION OR REMEDIES AGAINST TENANT OTHER THAN TO RECOVER ANY
AMOUNT BY WHICH ANY SUCH LIENS OR CLAIMS ACTUALLY PAID BY LANDLORD EXCEED THE
AMOUNT OF THE FIRST HALF. SUCH LIQUIDATED DAMAGES ARE INTENDED TO COMPENSATE
LANDLORD FOR ALL OTHER CLAIMS OR CAUSES OF ACTION IT MIGHT OTHERWISE HAVE
AGAINST TENANT, INCLUDING ANY CLAIMS FOR FUTURE RENT UNDER THE LEASE OR FOR
COMPLETING OR REMOVING ANY TENANT IMPROVEMENTS THEN MADE TO THE PREMISES. IN
LIGHT OF THE DIFFICULTY THE PARTIES WOULD HAVE IN DETERMINING LANDLORD'S ACTUAL
DAMAGES FOR TENANT'S FAILURE TO COMPLETE THE TENANT IMPROVEMENTS AS A RESULT OF
SUCH A DEFAULT, THE PARTIES AGREE THAT THE SO ALLOCABLE PORTION OF THE AMOUNT OF
FUNDS THEN DEPOSITED IN THE TENANT IMPROVEMENT ACCOUNT IS A REASONABLE ESTIMATE
OF THE EXTENT TO WHICH LANDLORD WOULD BE DAMAGED BY SUCH TENANT DEFAULT.
/s/ WB /s/ RR
--------- ----------
Tenant's Landlord's
Initials Initials
C. If Tenant fails to pay any amount required to be paid by Tenant
under this Lease in connection with the Tenant Improvements, such amount, after
expiration of the applicable notice and cure period provided in paragraph 24,
may be paid by Landlord from the funds in the Tenant Improvement Account.
45. (f) Change Orders. In the event that Tenant in writing requests or
-------------
approves of any changes to the Construction Documents (each, a "Change Order"),
Landlord shall not unreasonably withhold its consent to any such Change Order,
provided the Change Orders do not materially affect the Building's structure or
exterior appearance and do not result in the use of materials in the
construction of the Tenant Improvements of a materially lesser quality than the
materials approved by Landlord in connection with the Space Plans. Landlord
shall respond to any request for approval of any Change Order within three (3)
business days, with the failure to respond to be deemed approval of such Change
Order. Notwithstanding the foregoing, Landlord shall have no approval rights as
to any Change Order where the Change Order would not result in any change in the
ultimate cost of construction of the Tenant Improvements of greater than One
Hundred Thousand Dollars ($l00,000.00), and the Change Order does not materially
affect the structural integrity of the Building. If such Change Orders, as
approved by Tenant, increase the cost of completing Landlord's Work, or of
constructing the Tenant Improvements as shown on the Construction Documents in
excess of the Basic Allowance, Tenant shall pay such increased costs provided
that Tenant shall not be responsible for any increase in the cost of Landlord's
Work where the Change Order arises out of any requirement imposed in conjunction
with the issuance of any building permit or occupancy permit or other approval
of Landlord's
-50-
Work by any governmental authorities or as a result of the
failure of Landlord to relocate the Existing Tenant.
45. (g) Construction Materials. Tenant will utilize, for the
----------------------
construction of the Tenant Improvements, the items and
materials designated in the Construction Documents. However,
whenever Tenant determines in its reasonable judgment that it
is not practical or efficient to use such materials, Tenant
shall have the right, to substitute comparable items and
materials.
45. (h) Prompt Construction/General Responsibility for Costs.
----------------------------------------------------
Tenant shall instruct Contractor to build the Tenant
Improvements as soon as reasonably possible; provided, however,
Landlord agrees that Tenant may defer construction of any
portion of the Tenant Improvements ("Deferred Improvements")
until needed by Tenant so long as Tenant does not defer
construction of any Tenant Improvements necessary for Tenant to
obtain a certificate of occupancy for the Premises (the "First
Phase"). Landlord's further consent to construct the Deferred
Improvements shall not be required so long as Tenant is only
constructing the Deferred Improvements and such other
alterations, additions or improvements which do not require the
approval of Landlord under the other provisions of this Lease
(and if any approval is required to any such other alterations,
additions or improvements, such approval rights shall be
confined to the same). Since Landlord's sole economic
responsibility is to pay the Basic Allowance, all of the Tenant
Improvements shall be designed and constructed at Tenant's sole
and entire cost, with Landlord being obligated only to disburse
the Basic Allowance pursuant to the terms hereof.
45. (i) Reasonable Diligence. Both Landlord and Tenant
--------------------
agree to use reasonable diligence in performing all of their
respective obligations and duties under this paragraph 45 and
in proceeding with the construction and completion of all
Tenant Improvements in the Premises.
Construction-
Related Defin-
itions 46. (a) The term "Force Majeure Delay" as used in the Lease
shall mean any delay in the completion of Landlord's Work or
the Tenant Improvements which is attributable to any: (1)
actual delay or failure to perform attributable to any strike,
lockout or other labor or industrial disturbance (whether or
not on the part of the employees of either party hereto), civil
disturbance, future order claiming jurisdiction, act of a
public enemy, war, riot, sabotage, blockade, embargo, inability
to secure customary materials, supplies or labor through
ordinary sources by reason of regulation or order of any
government or regulatory body; (2) delay attributable to the
failure of Landlord and/or Tenant despite reasonable diligence
to secure building permits and approvals; (3) delay in
completing the construction of Landlord's Work because of
changes in any applicable law (including, without limitation,
the Americans with Disabilities Act of 1990, Pub. L. 101-336
(the "ADA")), or the interpretation thereof; or (4) delay
attributable to lightning, earthquake, fire, storm, hurricane,
tornado, flood, washout, explosion, or any other cause beyond
the reasonable control of the party from whom performance is
required, or any of its contractors or other representatives.
Any prevention, delay or stoppage due to any Force Majeure
Delay shall excuse the performance of the party affected for a
period of time equal to any such prevention, delay or stoppage
(except the obligations of either party to pay money, including
rent and other charges, pursuant to the Lease).
-51-
46. (b) The term "Tenant Delay" as used in the Lease shall mean
any delay in the completion of either Landlord's Work or the
Tenant Improvements which is due to any wrongful or negligent act
or omission of Tenant or its agents or contractors (including acts
or omissions while acting as agent or contractor for Landlord).
The term Tenant Delay shall include, but shall not be limited to
any: (1) delay in the giving of information, authorizations or
approvals by Tenant beyond any applicable period provided for in
this Lease; (2) delay attributable to the wrongful or negligent
acts or failures to act, of Tenant, its agents or contractors,
where such acts or failures to act delay the completion of
Landlord's Work or Tenant Improvements; (3) delay attributable to
the material interference of Tenant, its agents or contractors
with the completion of Landlord's Work; or (4) delay attributable
to any Change Order approved by Tenant (provided that Tenant shall
not be responsible for any delay attributable to any Change Order
where the Change Order arises out of any requirement imposed in
conjunction with the issuance of any building permit or occupancy
permit or other approval of Landlord's Work or the Tenant
Improvements by any governmental authorities). Any delay occurring
after the date of this Lease attributable to the uncertainties as
to the anticipated relocation of the Existing Tenant shall not
constitute a Tenant Delay, including but not limited to, any delay
in proceeding with the design of the Premises due to such
uncertainties and any delay or change in the design of the
Premises or any Change Order arising from any redesign due to the
subsequent exclusion or inclusion of the Existing Premises as a
part of the Premises.
46. (c) The term "Landlord Delay" as used in the Lease shall
mean any delay in the completion of either Landlord's Work or the
Tenant Improvements which is due to any wrongful or negligent act
or omission of Landlord or its agents or contractors (including
acts or omissions while acting as agent or contractor for
Landlord). The term Landlord Delay shall include, but shall not be
limited to any: (1) delay in the giving of information,
authorizations or approvals by Landlord beyond any applicable
period provided for in this Lease (subject to approvals being
deemed given pursuant to paragraph 59 hereof); (2) delay
attributable to the wrongful or negligent acts or failures to act,
of Landlord, its agents or contractors, where such acts or
failures to act delay the completion of Landlord's Work or Tenant
Improvements; (3) delay attributable to the material interference
of Landlord, its agents or contractors with the completion of the
Tenant Improvements; or (4) delay in the delivery of the Premises
to Tenant for the commencement of construction of Tenant
Improvements. Any delay occurring after the date of this Lease
attributable to the uncertainties as to the anticipated relocation
of the Existing Tenant shall not constitute a Landlord Delay.
Hazardous
Materials 47. (a) Tenant shall in the use of the Premises comply with all
federal, state or local laws, ordinances or regulations relating
to industrial hygiene and environmental, conditions on, under or
about the Project including, but not limited to, soil and ground
water conditions. Without limiting the generality of the
foregoing, except as permitted herein, Tenant shall not transport,
use, store, maintain, generate, manufacture, handle, dispose,
release or discharge any Hazardous Materials upon or about the
Project, nor permit Tenant's Employees or other occupants of the
Premises to engage in such activities upon or about the Project.
However, the foregoing provisions shall not prohibit the
transportation to and from, and the use, storage, maintenance and
handling within, the Premises of
-52-
substances customarily used in connection with Tenant's permitted uses;
including biotechnical research, provided: (1) such substances shall be used and
maintained only in such quantities as are reasonably necessary for the permitted
use of the Premises set forth in this Lease, strictly in accordance with
applicable laws and the manufacturers' instructions therefor, (2) such
substances shall not be disposed of, released or discharged on the Project, and
shall be transported to and from the Premises in compliance with all applicable
laws, and as Landlord shall reasonably require, (3) if any applicable law or
Landlord's trash removal contractor requires that any such substances be
disposed of separately from ordinary trash, Tenant shall make arrangements at
Tenant's expense for such disposal directly with a qualified and licensed
disposal company at a lawful disposal site and shall ensure that disposal occurs
frequently enough to prevent unnecessary storage of such substances in the
Premises, and (4) any remaining such substances shall be completely, properly
and lawfully removed from the Project upon expiration or earlier termination of
this Lease.
47. (b) Without limiting the generality of paragraph 22 of the Lease, Landlord
shall have the right, at the following times, to enter the Premises in order to
inspect same and to conduct any testing, monitoring or analysis reasonably
required in connection therewith (collectively, "Inspection"):
(1) Once in any calendar year upon reasonable notice to Tenant;
(2) At any time during the Lease Term upon notice as provided herein if, in
Landlord's reasonable judgment, Tenant is violating the use restrictions of this
Lease or is not in strict compliance with the regulations, rules or procedures
of any applicable governmental entity with respect to the transport, use,
storage, maintenance, generation, manufacturing, handling, disposal, release or
discharge of Hazardous Materials at the Premises, in which case Landlord shall
give notice to Tenant of the reason for the Inspection and Tenant shall provide
Landlord with access to the Premises for such Inspection within five (5) days of
any such notice; provided, however, that in an emergency situation Tenant will
provide Landlord with immediate access to the Premises.
If Tenant is violating the use restrictions of this Lease or is not in material
compliance with the regulations, rules or procedures of the applicable
governmental entity, then all reasonable costs and expenses reasonably incurred
by Landlord in connection with any related Inspection shall become due and
payable by Tenant as additional rent, within ten (10) days of presentation by
Landlord of an invoice therefor. If a dispute exists between Landlord and
Tenant as to whether Landlord has sufficient reason to believe that Tenant may
be violating the use restrictions of this Lease or may not be in compliance with
any other provision of this Lease or any applicable governmental entity with
respect to the transport, use, storage, maintenance, generation, manufacturing,
handling, disposal, release or discharge of Hazardous Materials at the Premises,
Tenant will provide Landlord with access to the Premises for an Inspection in
accordance with the provisions of the immediately preceding paragraph; provided,
however, that if there is no such violation or material non-compliance, Landlord
shall be liable for the cost and expense incurred by Landlord in connection with
such Inspection.
47. (c) Tenant shall promptly notify Landlord of: (1) any enforcement, cleanup
or other regulatory action
-53-
taken or threatened by any governmental or regulatory authority with respect to
the presence of any Hazardous Materials on the Premises or the migration thereof
from or to other property, (2) any demands or claims made or threatened by any
party against Tenant or the Premises relating to any loss or injury resulting
from any Hazardous Materials, (3) any release, discharge or nonroutine, improper
or unlawful disposal or transportation of any Hazardous Materials on or from the
Premises, and (4) any matters where Tenant is required by law to give a notice
to any governmental or regulatory authority respecting any Hazardous Materials
on the Premises. Landlord shall have the right (but not the obligation) to join
and participate, as a party, in any legal proceedings or actions affecting the
Premises initiated in connection with any environmental, health or safety law.
At such times as Landlord may reasonably request, Tenant shall provide Landlord
with a written list identifying any Hazardous Materials then used, stored, or
maintained upon the Premises other than common office supplies, the use and
approximate quantity of each such material, a copy of any material safety data
sheet ("MSDS") issued by the manufacturer thereof, written information
concerning the removal, transportation and disposal of the same, and such other
information as Landlord may reasonably require or as may be required by
applicable law. The term "Hazardous Materials" for purposes hereof shall mean
any chemical, substance, material or waste or component thereof which is
now or hereafter listed, defined or regulated as a flammable explosive,
radioactive material, hazardous or toxic chemical, substance, material or waste
or component thereof (whether injurious by themselves or in conjunction with
other materials), any medical or infectious waste (including, without
limitation, "sharps" waste), or any petroleum, including crude oil or any
fraction thereof, by any federal, state or local governing or regulatory body
having jurisdiction, or which would trigger any employee or community "right-to-
know" requirements adopted by any such body, or for which any such body has
adopted any requirements for the preparation or distribution of an MSDS.
Without limiting the generality of the foregoing, Hazardous Materials shall
include, but not be limited to substances defined as "hazardous substances",
"hazardous materials", or "toxic substances" in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section
9601 et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801
-- ---
et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et
-- --- --
seq.; and those substances defined as "hazardous wastes" in Section 25117 of the
---
California Health & Safety Code or as "hazardous substances" in Section 25316 of
the California Health & Safety Code; and in the regulations adopted and
publications promulgated from time to time pursuant to said laws.
47. (d) If any Hazardous Materials are released, discharged or disposed of by
Tenant, Tenant's Employees or any other occupant of the Premises, on or about
the Project in violation of the foregoing provisions, Tenant shall immediately,
properly and in compliance with applicable laws clean up and remove the
Hazardous Materials from the Project and any other affected property and clean
or replace any affected personal property (whether or not owned by Landlord),
at Tenant's expense. Such clean-up and removal work shall be subject to
Landlord's prior written approval (except in emergencies), and shall include,
without limitation, any testing, investigation, and the preparation and
implementation of any remedial action plan required by any governmental body
having jurisdiction or reasonably required by Landlord.
-54-
If Tenant shall fail to comply with the provisions of this paragraph
47(d) within five (5) days after written notice by Landlord, or such
shorter time as may be required by applicable law or in order to
minimize any hazard to persons or property, Landlord may (but shall not
be obligated to) arrange for such compliance directly or as Tenant's
agent through contractors or other parties selected by Landlord, at
Tenant's expense (without limiting Landlord's other remedies under this
Lease or applicable law). If any Hazardous Materials are found to be
present or are released, discharged or disposed of on or about the
Project and such presence, release, discharge or disposal is not caused
by Tenant, Tenant's Employees or other occupants of the Premises,
Landlord shall be responsible for all costs and expenses to manage,
xxxxx, remediate or remove, as required by applicable Hazardous
Materials laws, any such Hazardous Materials and to repair any property
damage caused thereby, provided however as respects any termination
rights of Landlord or Tenant, such release, discharge or disposal shall
be deemed casualty damage under paragraph 25 to the extent that the
Premises or common areas serving the Premises are affected thereby.
Parking 48. (a) Tenant and Tenant's Employees shall have the right to have
assigned and use twenty-four (24) reserved parking spaces. These
reserved parking spaces shall be located on the east side of the
Building, nearest to the main entrance of the Premises as possible
(utilizing parking stalls on both sides of the parking aisle), but
excluding any reserved parking spaces previously granted to (i) the
Existing Tenant until relocated out of Building A (at which time such
reserved parking spaces of the Existing Tenant shall be included as
part of Tenant's reserved parking spaces) and (ii) the FAA for so long
as it remains a tenant of 863 Mitten. Tenant shall request Landlord's
prior written approval of Tenant's selection of such reserved parking
spaces, and all markings and signs identifying such spaces, which
approval shall not be unreasonably withheld or delayed. Landlord hereby
preapproves the twenty-four (24) parking spaces designated on (A)
Exhibit A-2 hereto as reserved parking spaces for Tenant's exclusive
-----------
use effective during the period on and after the date the Existing
Tenant vacates the Existing Premises, and (B) Exhibit A-3 hereto as
-----------
reserved parking spaces for Tenant's exclusive use effective during the
period prior to the date the Existing Tenant vacates the Existing
Premises. Except for approving Tenant's selection of reserved parking
spaces, Landlord shall have no obligation, and shall not be liable to
Tenant in any way, in connection with those reserved spaces, and it
shall be Tenant's obligation, at its sole cost, to xxxx those spaces as
reserved, to post all signs required by applicable laws, to take any
action permitted by applicable laws to remove unauthorized vehicles
from those spaces, and to enforce Tenant's rights to use those reserved
parking spaces; provided, however, Landlord shall publicly acknowledge
Tenant's reserved spaces and, upon request of Tenant, shall take
reasonable action to support Tenant's exclusive right to use such
parking spaces.
48. (b) In addition to the spaces granted to Tenant pursuant to
paragraph 48(a), Tenant and Tenant's Employees shall have the non-
exclusive right during the Lease Term to use additional parking spaces
such that the total number of parking spaces (including the reserved
spaces pursuant to paragraph 48(a)) equals one (1) parking space for
each two hundred eighty-two (282) rentable square feet of the Premises
demised hereunder. If Tenant leases additional space in 863 Mitten as
permitted under this Lease, the number of unreserved parking spaces
shall be increased by one (1) for each two hundred eighty-two (282)
-55-
rentable square feet or additional space; provided, however,
in no event shall the number of reserved spaces be increased.
Signs 49. Tenant may install two (2) signs identifying Tenant on or
about the Premises provided that Landlord approves, in its
reasonable judgment, plans and specifications for such signs
and the locations of such signs, and such signs comply with
all applicable laws, regulations, ordinances and building
codes. Landlord hereby grants its approval to signage that
would be in the following locations and maximum size: (i) a
monument sign facing Mitten Road in the approximate location
indicated on Exhibit A-4 hereto which shall be dedicated
-----------
exclusively to Tenant and (ii) a wall sign on the side of
Building A facing Mitten Road which shall be dedicated
exclusively to Tenant, where each of such signs may have an
overall size not to exceed five (5) feet in height and
fourteen (14) feet in length, and with lettering thereon up
to three (3) feet in height and overall length of lettering
of twelve (12) feet. No approval by Landlord under this
paragraph 49 shall relieve Tenant from its obligations to
comply with applicable laws and obtain applicable
governmental approvals for its signs, and Landlord makes no
representation or warranty that Tenant's proposed signs
comply with any applicable laws or would be approved by any
applicable governmental agency. Landlord, in its approval of
signage in the Project, shall not discriminate in favor of
other tenants or occupants of the Project as to the relative
size or location of signage in relation to the location and
size of the portion of the Project leased or occupied by such
other tenants or occupants as compared to Tenant's approved
signage.
Broker 50. Provided that this Lease is not terminated on or before
the Commencement Date, Landlord agrees to pay a broker's
commission to Xx. Xxxxxxx X. Xxxxxxx ("Broker") pursuant to a
separate agreement between Broker and Landlord. Other than
Broker, each party represents and warrants to the other that
it has not dealt with any other broker or finder in
connection with the Premises or this Lease. Each party shall
indemnify, defend and hold harmless the other party from and
against all claims, liabilities, losses, damages, costs and
expenses (including, without limitation, attorneys' fees) for
any broker's commission or finder's fee asserted as a result
of its own act or omission in connection with this
transaction. The parties' obligations under this paragraph 50
shall survive the expiration or earlier termination of the
Lease Term.
Other Documents;
Cooperation of
Parties 51. Each party agrees to sign any other and further documents
(including, without limitation, any document evidencing
termination of Tenant's options or rights of first refusal
granted herein, in recordable form if required by Landlord)
as may be reasonably necessary or proper in order to
accomplish the intent of this Lease.
Counterparts 52. This Lease may be signed in multiple counterparts which,
when signed by all parties, shall constitute a binding
agreement.
Recording 53. Except as provided herein, Tenant shall not record this
Lease or any memorandum or short form thereof. Landlord
shall, upon Tenant's request, join in executing a memorandum
of short form of this Lease, which shall be recorded at
Tenant's expense.
Authorization 54. Each individual executing the Lease on behalf of Landlord
and Tenant represents and warrants that he/she is
-56-
duly authorized to execute and deliver the Lease on behalf of
Landlord or Tenant in accordance with a duly adopted
resolution of such entity's Board of Directors, and that the
Lease is binding upon such entity in accordance with its
terms. Tenant shall, concurrently with its execution of this
Lease, deliver to Landlord a certified copy of a resolution
of its Board of Directors either authorizing the specific
execution of the Lease or authorizing the person signing this
Lease generally to execute leases. Landlord shall deliver to
Tenant, concurrently with Landlord's execution of this Lease,
reasonably satisfactory evidence that execution of this Lease
was duly authorized. Landlord represents and warrants that to
the best of Landlord's knowledge, it is the record fee owner
of the Project and that the Project is currently unencumbered
by any deed of trust, mortgage, ground lease or other
financing, and that Landlord has full and unencumbered title
and authority to lease the Premises to Tenant and to grant
the options and other rights as to leasing other space in 863
Mitten to Tenant as are granted herein.
Separability 55. The illegality, invalidity or unenforceability of any
term, condition, or provision of the Lease shall in no way
impair or invalidate any other term, provision or condition
of the Lease, and all such other terms, provisions and
conditions shall remain in full force and effect.
Covenants and
Conditions 56. All provisions, whether covenants or conditions, on the
part of Tenant shall be deemed to be both covenants and
conditions.
Quiet Enjoy-
ment 57. Landlord covenants and agrees that Tenant, upon making
all of Tenant's payments as and when due under the Lease, and
upon performing, observing and keeping the covenants,
agreements and conditions of this Lease on its part to be
kept, shall peaceably and quietly hold, occupy and enjoy the
Premises during the term of this Lease Term without hindrance
or molestation from Landlord subject to the terms and
provisions of this Lease.
Cumulative
Remedies 58. No remedy or election provided, allowed or given by any
provision of the Lease shall be deemed exclusive unless so
indicated, but shall, whenever possible, be cumulative with
all other remedies in law or equity.
Reasonable
Approval
Standard 59. Whenever in this Lease the review, acceptance, approval,
or consent of either party ("Reviewing Party") is required to
the taking of or refraining from taking any action under this
Lease, or to the manner of performing or observing any
covenant or condition of this Lease (collectively "Matter"),
the favorable review, acceptance, approval or consent
(collectively "Approval") as to any such Matter shall neither
be unreasonably withheld nor unduly delayed by the Reviewing
Party, and if the Reviewing Party desires to deny or withhold
its Approval as to any such Matter, the Reviewing Party
shall, by written notice to the other party given within the
time period for the giving of such Approval as provided
herein or elsewhere in this Lease, state with particularity
the basis for the denial or withholding by such Reviewing
Party of such Approval. The failure of the Reviewing Party to
so respond in writing to any Matter within twenty (20) days
of receipt of the written request of the other party (or
within such other period of time for response if this Lease
otherwise expressly provides a specific period
-57-
for such Approval), shall be deemed to constitute the
Reviewing Party's Approval of the Matter.
IN WITNESS WHEREOF Landlord and Tenant have executed this Lease as of the
day and year first above written.
Landlord:
Dated: December __, 1993. PROVIDENT LIFE AND ACCIDENT
INSURANCE COMPANY, a Tennessee
corporation
By: /s/ Xxxxxx Xxxx
----------------------------------------
Its: Vice President Corporate Properties
-----------------------------------
Tenant:
Dated: December 22, 1993. MEGABIOS CORP., A California
corporation
By: /s/ Xxxxxxx X. Xxxxx
----------------------------------------
Its: Vice President
-----------------------------------
-58-
EXHIBIT A
SITE PLAN
[MAP APPEARS HERE]
EXHIBIT A-1
EQUIPMENT AREA
[MAP APPEARS HERE]
EXHIBIT A-2
RESERVED PARKING - EXISTING TENANT VACATED
X = 24 RESERVED PARKING SPACES FOR MEGABIOS
[MAP APPEARS HERE]
EXHIBIT A-3
RESERVED PARKING - EXISTING TENANT REMAINS
X = 24 RESERVED PARKING SPACES FOR MEGABIOS
N = 13 PARKING SPACES FOR NATIONAL GLASS
[MAP APPEARS HERE]
EXHIBIT A-4
APPROVED SIGNAGE LOCATIONS
C = LOCATION OF PROPOSED WALL SIGNS
D = LOCATION OF PROPOSED MONUMENTS
[MAP APPEARS HERE]
Exhibit "B"
COMMENCEMENT DATE MEMORANDUM
----------------------------
This Commencement Date Memorandum ("Memorandum") is made this _____ day of
_____________, 1994, by and between PROVIDENT LIFE AND ACCIDENT INSURANCE
-------------------------------------
COMPANY, a Tennessee corporation ("Landlord"), and MEGABIOS CORP., a California
------- -------------
corporation ("Tenant"), with reference to the following facts:
A. Landlord and Tenant entered into that certain Lease dated December __,
1993 (the "Lease") concerning certain premises (the "Premises") which are a
portion of the property commonly known as 000 Xxxxxx Xxxx, Xxxxxxxxxx,
Xxxxxxxxxx, and more particularly described in the Lease. Each capitalized used
term in this Memorandum, but not defined herein, shall have the meaning ascribed
to it in the Lease.
B. In accordance with the Lease, the parties desire to confirm certain
matters with respect to the Lease and the Premises.
Therefore, the parties agree as follows:
1. Landlord's Work has been accepted by Tenant as being substantially
complete in accordance with the Lease.
2. Tenant has possession of the Premises and the Initial Term commenced
_______________, 1994 for a term of approximately five (5) years, ending on
_______________, 1999.
3. Rent commenced to accrue on _____________, 1994, and the initial
amount of monthly Basic Rent is $______________.
4. The rentable square footage of the Premises is __________, measured in
accordance with the terms of the Lease. The Adjusted Load Factor is ______%, and
Tenant's percentage share (as defined in the Lease) is _____%.
LANDLORD: PROVIDENT LIFE AND ACCIDENT INSURANCE
COMPANY, a Tennessee corporation
By:
------------------------------------
Its:
------------------------------------
TENANT: MEGABIOS CORP., a California corporation
By:
------------------------------------
Its:
------------------------------------
-1-
EXHIBIT C
1994 BUDGET
DIRECT EXPENSES
Miscellaneous General and Administration $ 5,395+
Management Fees 42,775+
Legal Fees (for Property Tax Appeals) 6,000+
0+
* Electricity 195,775-
* Gas 62,450-
Water/Sewer 19,224+
* Janitorial Services 44,865-
* Janitorial Supplies 7,560-
* Keys and Locks 2,340-
Pest Control 1,700+
Plant Maintenance (Interior Landscaping) 2,100+
Salaries (Maintenance Person) 29,950+
Window Cleaning 1,000+
Building Repair-Electrical/Lighting 1,500+
Building Repair-Plumbing 1,800+
Building Repair-Roof 1,000+
Building Repair-Signs 1,440+
Other Building Repairs (New) 2,400+
Hardware Supplies 1,425+
** Mechanical Equipment-Elevator Maintenance 840x
** Mechanical Equipment-Elevator Repair 400x
*** HVAC Maintenance 9,720+
*** HVAC Repairs 9,726+
Other Equipment Maintenance/2/ 1,040+
Other Equipment Repairs/3/ 400+
Ground Supplies and Equipment 4,800+
Landscape Contracts 14,640+
0+
Parking Lot Lighting 600+
Paving/Sidewalk Repairs 0+
Striping 0+
Sweeping 1,800+
Security 3,360+
Trash Removal 29,465+
Insurance 10,500+
Real Estate Taxes 109,140+
--------
TOTAL DIRECT EXPENSES $627,130
--------
TOTAL 1994 BUDGETED DIRECT EXPENSES FOR PURPOSES OF
THIS LEASE PURSUANT TO PARAGRAPH 6(C) $293,454
--------
DIRECT EXPENSES PER RENTABLE SQ. FT. PER MONTH FOR THE PROJECT:
(293,454/152,297/12) = $0.16057
* These expenses will be paid separately by Tenant to vendors (not paid by
Landlord and reimbursed by Tenant to Landlord).
** Landlord excludes there expenses and will not be reimbursed by Tenant for
them.
*** These expenses will be paid separately by Tenant to vendors(s); however,
Tenant may choose to use same vendor as Landlord to obtain a better rate.
/2/Quarterly fire sprinkler inspections required by Fire Xxxxxxxx and fire
extinguisher service in common areas.
/3/Repairs to fire sprinkler equipment.
EXHIBIT D
RULES AND REGULATIONS FOR THE BUILDING
ATTACHED TO AND MADE A PART OF THIS LEASE
1. Except as provided or required by Landlord in accordance with building
standards, no sign, placard, picture, advertisement, name or notice shall be
inscribed, displayed, printed, painted or affixed by Tenant on or to any part of
the Building or exterior of the Premises leased to Tenants or to the door or
doors thereof without the written consent of Landlord first obtained and
Landlord shall have the right to remove any such sign, placard, picture,
advertisement, name or notice without notice to and at the expense of Tenant.
2. Except as provided or required by Landlord in accordance with Building
standards, no draperies, curtains, blinds, shades, screens or other devices
shall be hung at or used in connection with any window or exterior door or doors
of the Premises.
3. The bulletin board or directory of the building shall be used primarily
for display of the name and location of Tenants and Landlord reserves the right
to exclude any other names therefrom, to limit the number of names associated
with Tenants to be placed thereon and to charge for names associated with
Tenants to be placed thereon at rates applicable to all Tenants.
4. The sidewalks, halls, passages, exits, entrances, elevators and
stairways of the Building shall not be obstructed by Tenants or used by them for
any purpose other than for ingress to and egress from their respective Premises.
The halls, passages, exits, entrances, elevators, stairways, balconies and roof
of the Building are not for the use of the general public and Landlord in all
cases reserves the right to control the same and prevent access thereto by all
persons whose presence, in the judgment of the Landlord, is or may be
prejudicial to the safety, character, reputation or interests of the Building
and its Tenants; provided however, that Landlord shall not prevent such access
to persons with whom Tenants deal in the ordinary course of business unless such
persons are engaged in illegal activities. No person shall go upon the roof of
the Building unless expressly so authorized by Landlord.
5. Tenants shall not alter any lock nor install any new or additional
locks or any bolts on any interior or exterior door of any Premises leased
to tenant.
6. The doors, windows, light fixtures and any lights or skylights that
reflect or admit light into halls or other places of the Building shall not
be covered or obstructed. The toilet rooms, toilets, urinals, wash bowls and
other apparatus shall not be used for any purpose other than that for which
they were constructed and no foreign substance of any kind whatsoever shall be
thrown or placed therein. The expense of any breakage, stoppage or damage
resulting from the violation of this rule shall be borne by the Tenant who,
or whose employees or invitees, cause such expense.
7. Tenants shall not xxxx, drive nails, screw or drill into the walls,
woodwork or plaster or in any way deface the Building or any Premises leased
to Tenant.
8. Furniture, freight or equipment of every kind shall be moved into or out
of the building only at such times and in such manner as Landlord shall
designate. Landlord may prescribe and limit the weight, size and position of all
equipment to be used by Tenants, other than standard office desks, chairs and
tables and portable office machines. Safes and other heavy equipment shall, if
considered necessary by Landlord, stand on wood strips of such thickness as
Landlord deems necessary to distribute properly the weight thereof. All damage
to the Building or Premises occupied by Tenants caused by moving or maintaining
any property of a Tenant shall be repaired at the expense of such Tenant.
9. No Tenant shall employ any person, other than the janitor provided by
Landlord, for the purposes of cleaning the Premises occupied by such Tenant
unless otherwise agreed to by Landlord. Except with the written consent of
Landlord, no person shall be permitted to enter the Building for the
purpose of cleaning the same. Tenants shall not cause any unnecessary
labor by carelessness or indifference in the preservation of good order and
cleanliness. Landlord shall not be responsible to any Tenant for loss of
property on the Premises, however occurring, or for any damage to the
property of any Tenant caused by the employees or independent
contractors of Landlord or by any other person. Janitor service will not be
furnished when rooms are occupied during the regular hours when janitor
service is provided. Window cleaning shall be done only at the regular and
customary times determined by Landlord for such services.
10. No Tenant shall sweep or throw or permit to be swept or thrown any
dirt or other substance into any of the corridors, halls or elevators or
out of the doors or stairways of the Building; use or keep or permit to be
used or kept any foul or noxious gas or substance; permit or suffer the
Premises occupied by such Tenant to be occupied or used in a manner offensive
or objectionable to Landlord or other Tenants by reason of noise, odors
or vibrations; interfere in any way with other Tenants or persons having
business in the Building; or bring or keep or permit to be brought or
kept in the Building any animal life form, other than human, except seeing-eye
dogs when in the company of their masters.
11. No cooking shall be done or permitted by Tenants in their respective
Premises, nor shall Premises occupied by Tenants be used for the storage
of merchandise, washing clothes, lodging, or any improper, objectionable or
immoral purposes.
12. No Tenant shall use or keep in the Premises or the Building any
kerosene, gasoline or inflammable or combustible fluid or material other than
limited quantities thereof reasonably necessary for the operation or maintenance
of customary office equipment, or, without Landlord's prior written approval,
use any method of heating or air conditioning other than that supplied by
Landlord. No Tenant shall use or keep or permit to be used or kept any foul or
noxious gas or substance in the Premises or permit or suffer the Premises to be
occupied or used in a manner offensive or objectionable to Landlord or other
occupants of the Building by reason of noise, odors or vibrations, or interfere
in any way with other Tenants or those having business therein. Tenant must
comply with any government imposed codes and regulations concerning the use or
storage of any substances on the Premises.
13. No boring or cutting for telephone or electric wires shall be allowed
without the consent of Landlord and any such wires permitted shall be introduced
at the place and in the manner described by Landlord. The location of
telephones, speakers, fire extinguisher and all other office equipment affixed
to Premises occupied by Tenants shall be subject to the approval of Landlord.
Each Tenant shall pay all expenses incurred in connection with the installation
of its equipment, including any telephone and electricity distribution
equipment.
14. Upon termination of occupancy of the Building, each Tenant shall
deliver to Landlord all keys furnished by Landlord, and any reproductions
thereof made by or at the direction of such Tenant, and in the event of loss of
any keys furnished to Tenant shall pay Landlord therefor.
(Page 1 of 3)
15. No Tenant shall affix any floor covering in any manner except as
approved by the Landlord. The expense of repairing any damage caused by removal
of any such floor covering shall be borne by the Tenant by whom, or by whose
contractors, employees or invitees, the damage shall have been caused.
16. No mail, furniture, packages, supplies, equipment, merchandise or
deliveries of any kind will be received in the building or carried up or down in
the elevators except between such hours and in such elevators as shall be
designated by Landlord.
17. On Saturdays, Sundays and legal holidays and between the hours of 6:00
p.m. and 8:00 a.m., access to the Building may be refused unless the person
seeking access is known to the person charged with responsibility for the safety
and protection of the Building and has a pass or is properly identified. In no
case shall Landlord by liable for any loss or damage for any error with respect
to the admission to or exclusion from the Building of any person. In case of
invasion, mob, riot, public excitement or other commotion and at such times as
Landlord deems necessary for the safety and protection of the Building, its
Tenants and all property located therein, Landlord may prohibit and prevent
access to the Building by all persons by any means Landlord deems appropriate.
18. Each Tenant shall see that the exterior doors of its Premises are closed
and securely locked on Sundays and legal holidays and not later than 6:00 p.m.
of each other day each Tenant shall exercise extraordinary care and caution that
all water faucets or water apparatus are entirely shut off each day before its
Premises are left unoccupied and that all electricity or gas shall likewise be
carefully shut off so as to prevent waste or damage to Landlord or to other
Tenants of the Building.
19. Landlord may exclude or expel from the Building any person who, in the
judgment of Landlord, is intoxicated or under the influence of liquor or drugs,
or who shall in any manner do any act in violation of any of the rules and
regulations of the Building.
20. The requirements of Tenants will be attended to only upon application to
Landlord at the office of the Building. Employees of Landlord shall not perform
any work outside of their regular duties unless under special instructions from
Landlord, and no employee of Landlord shall be required to admit any person
(Tenant or otherwise) to any Premises in the Building.
21. No vending or food or beverage dispensing machine or machines of any
description shall be installed, maintained or operated upon any Premise in the
Building without the written permission of the Landlord.
22. Landlord, without notice and without liability to any Tenant, at any
time may change the name or the street address of the Building.
23. The word "Building" as used in these rules and regulations means the
Building of which a part of the Premises are leased pursuant to the Lease to
which these rules and regulations are attached. Each Tenant shall be liable to
Landlord and to each other Tenant of the Building for any loss, cost, expense,
damage or liability, including attorneys' fees, caused or occasioned by the
failure of such first named Tenant to comply with these rules, but Landlord
shall have no liability for such failure or for failing or being unable to
enforce compliance therewith by any Tenant and such failure by Landlord or non-
compliance by any other Tenant shall not be a ground for termination of the
Lease to which these rules and regulations are attached by the Tenant
thereunder.
24. Carpet protector pads shall be used by all desk stations.
25. Each Tenant shall maintain the portions of its Premises which are
visible from the outside of the Building or from hallways or other public areas
of the Building, in a neat, clean and orderly condition.
26. No Tenant shall tamper with or attempt to adjust the temperature control
thermostats in its Premises. Landlord shall adjust such thermostats as required
to maintain heat and air-conditioning at the Building standard temperature.
27. All requests for air-conditioning or heating during hours when such
services are not normally furnished by Landlord must be submitted in writing to
the Building management office by 2:00 p.m. on the preceding Thursday for
weekend service, and by 9:00 a.m. on the preceding business day for holiday
service.
28. No Tenant shall place any items whatsoever on the roof or balcony areas
of the Building without prior written consent of Landlord.
29. No curtains, draperies, blinds, shutters, shades, screens or other
coverings, hangings or decorations shall be attached to, hung or placed in, or
used in connection with any window of the Building without prior written consent
of Landlord. In any event, with the prior written consent of Landlord, such
items shall be installed on the office side of the Landlord's standard window
covering and shall in no way be visible from the exterior of the Building.
30. No Tenant shall obtain or use in the Premises ice, drinking water, food,
beverage, towel or other similar services, except at such reasonable hours and
under reasonable regulations as may he fixed by the Landlord.
3l. Except with the prior written consent of Landlord, no Tenant shall sell,
or permit the sale at retail, of newspapers, magazines, periodicals, tickets or
any other goods or merchandise to the general public in or on the Premises, nor
shall Tenant carry on, or permit or allow any employee or other person to carry
on, the business of stenography, notary, typewriting or similar business in or
from the Premises for the service or accommodation of occupants of any other
portion of the Building, nor shall the Premises of any Tenant be used for
manufacturing of any kind, or any business or activity other than that
specifically provided for in such Tenant's Lease.
32. No Tenant shall install any radio or television antenna, loudspeaker or
other device on the roof or exterior walls of the Building.
33. There shall not be used in any space, or in the public halls of the
Building, either by any Tenant or others, any hand trucks except those equipped
with rubber tires and side guards or such other material handling equipment as
Landlord may approve. No other vehicles of any kind shall be brought by any
Tenant into the Building or kept in or about the Premises.
34. Each Tenant shall store all its trash and garbage within its Premises.
No material shall be placed in the trash boxes or receptacles if such material
is of such nature that it may not be disposed of in the ordinary and customary
manner of removing and disposing of trash and garbage in the City of Burlingame
without being in violation of any law or ordinance governing such disposal. All
garbage and refuse disposal shall be made only through entryways and elevators
provided for such purpose and at such times as Landlord shall designate.
(Page 2 of 3)
35. Canvassing, peddling, soliciting, and distribution of handbills or any
other written materials in or about the Building are prohibited, and each tenant
shall cooperate to prevent same.
36. While in the Building, Tenant's contractors shall be subject to and
under the control and direction of the manager of the Building or the Building
Engineer (but not as an agent or employee of Landlord or said manager or
engineer).
37. Landlord may waive any one or more of these Rules and Regulations for
the benefit of any particular Tenant or Tenants, but no such waiver by
Landlord shall be construed as a waiver of such Rules and Regulations against
any or all of the Tenants of the Building.
38. These Rules and Regulations are in addition to, and shall not be
construed to in any way modify or amend, in whole or in part, the terms,
covenants, agreements and conditions of any Lease of Premises in the Building.
39. Landlord reserves the right to make such other reasonable rules and
regulations as in its judgment may from time to time be needed for the safety,
care and cleanliness of the Building and for the preservation of good order
therein.
(Page 3 of 3)
