Exhibit 10.1
CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
BUILD-TO-SUIT LEASE
Landlord: Slough BTC, LLC
Tenant: EOS Biotechnology, Inc.
Date: June 1, 2001
TABLE OF CONTENTS
1. PROPERTY..........................................................................1
1.1 Lease of Building........................................................1
1.2 Landlord's Reserved Rights...............................................1
1.3 Right of First Offer.....................................................2
2. TERM..............................................................................2
2.1 Term.....................................................................2
2.2 Early Possession.........................................................3
2.3 Delay In Possession......................................................3
2.4 Acknowledgment Of Rent Commencement......................................5
2.5 Holding Over.............................................................5
2.6 Option To Extend Term....................................................5
3. RENTAL............................................................................6
3.1 Minimum Rental...........................................................6
(a) Rental Amounts..................................................6
(b) Rental Amounts During First Extended Term.......................6
(c) Rental Amounts During Second Extended Term......................7
(d) Rental Adjustment Due to Change in Square Footage...............7
(e) Rental Adjustment Due to Tenant Improvement Costs...............7
3.2 Late Charge..............................................................8
4. STOCK WARRANTS....................................................................8
4.1 Stock Warrants...........................................................8
5. CONSTRUCTION......................................................................9
5.1 Construction of Improvements.............................................9
5.2 Condition of Property....................................................9
5.3 Compliance with Law......................................................9
6. TAXES............................................................................10
6.1 Personal Property.......................................................10
6.2 Real Property...........................................................10
7. OPERATING EXPENSES...............................................................10
7.1 Payment of Operating Expenses...........................................10
7.2 Definition Of Operating Expenses........................................11
7.3 Determination Of Operating Expenses.....................................12
7.4 Final Accounting For Lease Year.........................................13
7.5 Proration...............................................................13
8. UTILITIES........................................................................13
8.1 Payment.................................................................13
8.2 Interruption............................................................14
9. ALTERATIONS; SIGNS...............................................................14
9.1 Right To Make Alterations...............................................14
9.2 Title To Alterations....................................................14
9.3 Tenant Trade Fixtures...................................................15
9.4 No Liens................................................................15
9.5 Signs...................................................................16
10. MAINTENANCE AND REPAIRS..........................................................16
10.1 Landlord's Work.........................................................16
10.2 Tenant's Obligation For Maintenance.....................................16
(a) Good Order, Condition And Repair...............................16
(b) Landlord's Remedy..............................................16
(c) Condition Upon Surrender.......................................16
11. USE OF PROPERTY..................................................................17
11.1 Permitted Use...........................................................17
11.2 Requirement of Continued Use............................................17
11.3 No Nuisance.............................................................17
11.4 Compliance With Laws....................................................17
11.5 Liquidation Sales.......................................................18
11.6 Environmental Matters...................................................18
12. INSURANCE AND INDEMNITY..........................................................22
12.1 Insurance...............................................................22
12.2 Quality Of Policies And Certificates....................................23
12.3 Workers' Compensation...................................................24
12.4 Waiver Of Subrogation...................................................24
12.5 Increase In Premiums....................................................24
12.6 Indemnification.........................................................24
12.7 Blanket Policy..........................................................25
13. SUBLEASE AND ASSIGNMENT..........................................................25
13.1 Assignment And Sublease Of Building.....................................25
13.2 Rights Of Landlord......................................................25
14. RIGHT OF ENTRY AND QUIET ENJOYMENT...............................................26
14.1 Right Of Entry..........................................................26
14.2 Quiet Enjoyment.........................................................26
15. CASUALTY AND TAKING..............................................................27
15.1 Damage or Destruction...................................................27
15.2 Condemnation............................................................28
15.3 Reservation Of Compensation.............................................29
15.4 Restoration Of Improvements.............................................29
16. DEFAULT..........................................................................30
16.1 Events Of Default.......................................................30
(a) Abandonment....................................................30
(b) Nonpayment.....................................................30
(c) Other Obligations..............................................30
(d) General Assignment.............................................30
(e) Bankruptcy.....................................................30
(f) Receivership...................................................30
(g) Attachment.....................................................30
(h) Insolvency.....................................................31
16.2 Remedies Upon Tenant's Default..........................................31
16.3 Remedies Cumulative.....................................................32
17. SUBORDINATION, ATTORNMENT AND SALE...............................................32
17.1 Subordination To Mortgage...............................................32
17.2 Sale Of Landlord's Interest.............................................32
17.3 Estoppel Certificates...................................................32
17.4 Subordination to CC&R's.................................................33
17.5 Mortgagee Protection....................................................33
18. SECURITY.........................................................................34
18.1 Deposit.................................................................34
19. MISCELLANEOUS....................................................................35
19.1 Notices.................................................................35
19.2 Successors And Assigns..................................................36
19.3 No Waiver...............................................................37
19.4 Severability............................................................37
19.5 Litigation Between Parties..............................................37
19.6 Surrender...............................................................37
19.7 Interpretation..........................................................37
19.8 Entire Agreement........................................................37
19.9 Governing Law...........................................................37
19.10 No Partnership..........................................................37
19.11 Financial Information...................................................37
19.12 Costs...................................................................38
19.13 Time....................................................................38
19.14 Rules And Regulations...................................................38
19.15 Brokers.................................................................38
19.16 Memorandum Of Lease.....................................................38
19.17 Corporate Authority.....................................................39
19.18 Execution and Delivery..................................................39
19.19 Survival................................................................39
19.20 Parking and Traffic.....................................................39
-iv-
EXHIBITS
EXHIBIT A Real Property Description
EXHIBIT B Site Plan
EXHIBIT C Workletter
EXHIBIT D Estimated Construction Schedule
EXHIBIT E Acknowledgment of Rent Commencement Date
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BUILD-TO-SUIT LEASE
THIS
BUILD-TO-SUIT LEASE ("LEASE") is made and entered into as of June
1, 2001, by and between SLOUGH BTC, LLC, a Delaware limited liability company
("LANDLORD"), and EOS BIOTECHNOLOGY, INC., a Delaware corporation ("TENANT").
THE PARTIES AGREE AS FOLLOWS:
1. PROPERTY
1.1 LEASE OF BUILDING.
(a) Landlord leases to Tenant and Tenant hires and leases
from Landlord, on the terms, covenants and conditions hereinafter set forth,
the building (the "BUILDING") to be constructed pursuant to Article 5 hereof
and EXHIBIT C attached hereto on a portion of the real property described in
EXHIBIT A attached hereto (the "PROPERTY"), to consist of a three-story
office and laboratory building containing approximately 82,000 square feet.
The location of the Building on the Property is intended to be substantially
as shown for the building designated "BUILDING D" on the site plan attached
hereto as EXHIBIT B (the "SITE PLAN"). The Property is commonly known as
Britannia Oyster Point (the "CENTER") and is located at Oyster Point
Boulevard and Veterans Boulevard in the City of South San Francisco, County
of San Mateo, State of
California. The Building and the other improvements to
be constructed on the Property pursuant to Article 5 hereof and EXHIBIT C
attached hereto are sometimes referred to collectively herein as the
"IMPROVEMENTS." The parking areas, driveways, sidewalks, landscaped areas and
other portions of the Center that lie outside the exterior walls of the
buildings to be constructed in the Center, as depicted in the Site Plan and
as hereafter modified by Landlord from time to time in accordance with the
provisions of this Lease, are sometimes referred to herein as the "COMMON
AREAS."
(b) As an appurtenance to Tenant's leasing of the Building
pursuant to Section 1.1(a), Landlord hereby grants to Tenant, for the benefit
of Tenant and its employees, suppliers, shippers, customers and invitees,
during the term of this Lease, the non-exclusive right to use, in common with
others entitled to such use, (i) those portions of the Common Areas improved
from time to time for use as parking areas, driveways, sidewalks, landscaped
areas, or for other common purposes, and (ii) all access easements and
similar rights and privileges relating to or appurtenant to the Center and
created or existing from time to time under any access easement agreements,
declarations of covenants, conditions and restrictions, or other written
agreements now or hereafter of record with respect to the Center, subject
however to any limitations applicable to such rights and privileges under
applicable law, under this Lease and/or under the written agreements creating
such rights and privileges.
1.2 LANDLORD'S RESERVED RIGHTS. To the extent reasonably necessary
to permit Landlord to exercise any rights of Landlord and discharge any
obligations of Landlord under this Lease, Landlord shall have, in addition to
the right of entry set forth in Section 16.1 hereof, the following rights:
(i) to make changes to the Common Areas, including, without limitation,
changes in the location, size or shape of any portion of the Common Areas,
and to construct and/or relocate parking structures and/or parking spaces in
the Center; (ii) to close temporarily any of the Common Areas for maintenance
or other reasonable purposes, PROVIDED that reasonable parking and reasonable
access to the Building remain available; (iii) to construct, alter or add to
other buildings and Common Area improvements in the Center; (iv) to build in
areas adjacent to the Center and to add such areas to the Center; (v) to use
the Common Areas while engaged in making additional improvements, repairs or
alterations to the Center or any portion thereof; and (vi) to do and perform
such other acts with respect to the Common Areas and the Center as may be
necessary or appropriate; PROVIDED, however, that notwithstanding anything to
the contrary in this Section 1.2, Landlord's exercise of its rights hereunder
shall not cause any
material diminution of Tenant's rights, nor any material increase of Tenant's
obligations, under this Lease.
1.3 RIGHT OF FIRST OFFER. Tenant shall have the following right of
first offer ("RIGHT OF FIRST OFFER") to lease additional space in or adjacent
to the Center, PROVIDED, however, that such Right of First Offer shall not
arise or be effective if Tenant is in default hereunder, beyond any
applicable notice and cure periods, on the date Landlord would otherwise be
required to notify Tenant of the commencement and terms of such Right of
First Offer pursuant to this Section 1.3. Landlord has advised Tenant (a)
that it is presently Landlord's intention to develop Building E of the
Center, as shown on the Site Plan ("BUILDING E"), as an office building
rather than a biotechnology building, and (b) that the property lying
easterly of the Property and commonly known as 000 Xxxxxx Xxxxx Xxxxxxxxx,
Xxxxx Xxx Xxxxxxxxx ("333 OYSTER POINT"), presently operated as a commercial
warehouse facility, is presently owned by Landlord. In the event that either
(x) Landlord decides, in its sole discretion, to develop Building E as a
biotechnology building or (y) Landlord or any affiliate of Landlord to which
000 Xxxxxx Xxxxx may be transferred, as applicable, decides to redevelop 000
Xxxxxx Xxxxx as a biotechnology facility, then in either such event Tenant
shall have a Right of First Offer to lease a minimum of 100,000 square feet
of space in Building E (or the entirety of Building E, if less than 100,000
square feet) or the redeveloped 000 Xxxxxx Xxxxx facility, as applicable, and
neither Landlord nor its affiliate, if applicable, shall lease space in
Building E or in the redeveloped 000 Xxxxxx Xxxxx facility (excluding any
leases which, individually and in the aggregate, leave at least 100,000
square feet of space in the applicable building or facility to be offered to
Tenant pursuant to this Right of First Offer) without first complying with
all applicable provisions of this Section 1.3. Tenant's Right of First Offer
with respect to Building E or 000 Xxxxxx Xxxxx, as applicable, shall commence
upon Tenant's receipt of written notice from Landlord (a "FIRST OFFER
NOTICE") identifying the building or facility to which the Right of First
Offer applies, the amount of space available in such building or facility
(not to be less than 100,000 square feet or the entirety of the applicable
building or facility, if less than 100,000 square feet) and the rent,
improvement allowance and other material terms upon which Landlord proposes
to offer space in such building or facility. Tenant shall have ten (10)
business days after receipt of a First Offer Notice in which to reach
agreement on all terms and achieve execution of a written lease agreement
with Landlord or its affiliate, as applicable, regarding Tenant's leasing and
occupancy of at least 100,000 square feet of space in the building or
facility covered by the First Offer Notice (or the entirety of such building
or facility, if less than 100,000 square feet). It is generally the intention
of the parties that the form of lease for any such leasing of space pursuant
to a First Offer Notice would be substantially identical to this Lease,
excluding this Section 1.3 and subject only to such other modifications as
may be reasonably necessary to reflect differences in the particular space to
be occupied pursuant to such new lease and/or in the economic terms
applicable to Tenant's leasing of such space. If Landlord and Tenant fail to
reach agreement on all terms and achieve execution of a written lease within
ten (10) business days after Tenant's receipt of a First Offer Notice, then
Tenant shall have no further rights under this Section 1.3 with respect to
the building or facility covered by such First Offer Notice and Landlord
shall thereafter be free to proceed with the leasing of such building or
facility at any time and from time to time without any further obligation to
Tenant. If Tenant leases space in either Building E or 000 Xxxxxx Xxxxx
pursuant to a First Offer Notice under this Section 1.3, then Tenant shall
have no further rights under this Section 1.3 with respect to either of such
buildings or facilities (except Tenant's rights under the written lease
agreement entered into with respect to the particular space covered by such
First Offer Notice) and Landlord shall thereafter be free to proceed with the
further leasing of both such building and such facility at any time and from
time to time without any further obligation to Tenant.
2. TERM
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2.1 TERM. The term of this Lease shall commence upon mutual
execution of this Lease by Landlord and Tenant. Tenant's minimum rental and
Operating Expense obligations shall commence on the earlier of (i) one
hundred eighty (180) days after Landlord's completion of the principal
structural components of the Building Shell (as hereinafter defined) pursuant
to the Workletter attached hereto as EXHIBIT C (the "WORKLETTER"), subject to
any adjustments in such time period to the extent authorized or required
under the provisions of such Workletter, which completion shall be evidenced
by Landlord's delivery of the Structural Completion Certificate pursuant to
the Workletter, or (ii) the date Tenant takes occupancy of and commences
operation of its business in the Building, the earlier of such dates being
herein called the "RENT COMMENCEMENT DATE"; PROVIDED, however, that in no
event shall the Rent Commencement Date occur earlier than January 1, 2003
unless determined pursuant to clause (ii) of this sentence or unless an
earlier date is hereafter mutually agreed upon in writing by Landlord and
Tenant. The term of this Lease shall end on the day (the "TERMINATION DATE")
immediately preceding the fifteenth (15th) anniversary of the Rent
Commencement Date, unless sooner terminated or extended as hereinafter
provided.
2.2 EARLY POSSESSION. Tenant shall have the nonexclusive right to
occupy and use the Building from and after the date of Landlord's delivery of
the Structural Completion Certificate described in clause (i) of Section 2.1,
even though Landlord may be continuing to construct the balance of Landlord's
Work as contemplated in the Workletter, for the purpose of constructing
Tenant's Work as contemplated in the Workletter and for the purpose of
installing fixtures and furniture, laboratory equipment, computer equipment,
telephone equipment, low voltage data wiring and personal property and other
similar work related to the construction of Tenant's Work and/or preparatory
to the commencement of Tenant's business in the Building. Such occupancy and
possession, and any early access under the next sentence of this Section 2.2,
shall be subject to and upon all of the terms and conditions of this Lease
and of the Workletter (including, but not limited to, conditions relating to
the maintenance of required insurance), except that Tenant shall have no
obligation to pay minimum rental or Operating Expenses for any period prior
to the Rent Commencement Date as determined under Section 2.1; such early
possession shall not advance or otherwise affect the Rent Commencement Date
or Termination Date determined under Section 2.1. Tenant shall also be
entitled to have early access to the Building and the Property at all
appropriate times prior to Landlord's delivery of the Structural Completion
Certificate, subject to the approval of Landlord and its general contractor
(which approval shall not be unreasonably withheld or delayed) and to all
other provisions of this Section 2.2, for the purpose of performing work
preparatory to the construction of Tenant's Work or necessary for the orderly
sequencing of such Work and/or for the actual construction of Tenant's Work
pursuant to the Workletter, and Tenant shall not be required to pay minimum
rental or Operating Expenses by reason of such early access until the Rent
Commencement Date otherwise occurs; without limiting the generality of the
preceding portion of this sentence, Tenant shall be entitled to have early
access to the Property and the Building as soon as the roof metal decking is
in place to begin hanging electrical, mechanical and plumbing services from
the overhead structure, subject to all of the provisions of this Section 2.2.
Tenant shall not unreasonably interfere with or delay Landlord's contractors
by any early access, occupancy or possession under this Section 2.2, shall
coordinate and cooperate with Landlord and its contractors (who shall
similarly coordinate and cooperate with Tenant and its contractors) to
minimize any interference or delay by either party with respect to the other
party's work following Landlord's delivery of the Structural Completion
Certificate, and shall indemnify, defend and hold harmless Landlord and its
agents and employees from and against any and all claims, demands,
liabilities, actions, losses, costs and expenses, including (but not limited
to) reasonable attorneys' fees, arising out of or in connection with Tenant's
early entry upon the Property hereunder.
2.3 DELAY IN POSSESSION. Landlord agrees to use its best reasonable
efforts to complete its portion of the work described in Section 5.1 and the
Workletter promptly, diligently and within the respective time periods set
forth in the Estimated Construction Schedule attached hereto as EXHIBIT D and
incorporated herein by this reference, as such schedule may be modified from
time to time by mutual written agreement of Landlord and Tenant, and subject
to the effects of any delays caused by or attributable to Tenant or any other
circumstances beyond Landlord's reasonable control (excluding financial
inability); PROVIDED, however, that Landlord shall not be liable for any
damages caused by any delay in the completion of such work, nor shall any
such
-3-
delay affect the validity of this Lease or the obligations
of Tenant hereunder. [***]
[***]
[***]
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[***] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.
[***]
2.4 ACKNOWLEDGMENT OF RENT COMMENCEMENT. Promptly following the Rent
Commencement Date, Landlord and Tenant shall execute a written acknowledgment
of the Rent Commencement Date, Termination Date and related matters,
substantially in the form attached hereto as EXHIBIT E (with appropriate
insertions), which acknowledgment shall be deemed to be incorporated herein
by this reference. Notwithstanding the foregoing requirement, the failure of
either party to execute such a written acknowledgment shall not affect the
determination of the Rent Commencement Date, Termination Date and related
matters in accordance with the provisions of this Lease.
2.5 HOLDING OVER. If Tenant holds possession of the Property or any
portion thereof after the term of this Lease WITH Landlord's written consent,
then except as otherwise specified in such consent, Tenant shall become a
tenant from month to month at one hundred twenty-five percent (125%) of the
rental and otherwise upon the terms herein specified for the period
immediately prior to such holding over and shall continue in such status
until the tenancy is terminated by either party upon not less than thirty
(30) days prior written notice. If Tenant holds possession of the Property or
any portion thereof after the term of this Lease WITHOUT Landlord's written
consent, then Landlord in its sole discretion may elect (by written notice to
Tenant) to have Tenant become a tenant either from month to month or at will,
at one hundred fifty percent (150%) of the rental (prorated on a daily basis
for an at-will tenancy, if applicable) and otherwise upon the terms herein
specified for the period immediately prior to such holding over, or may elect
to pursue any and all legal remedies available to Landlord under applicable
law with respect to such unconsented holding over by Tenant. Tenant shall
indemnify and hold Landlord harmless from any loss, damage, claim, liability,
cost or expense (including reasonable attorneys' fees) resulting from any
delay by Tenant in surrendering the Property or any portion thereof,
including but not limited to any claims made by a succeeding tenant by reason
of such delay; PROVIDED, however, that the indemnification and hold harmless
obligation set forth in this sentence shall not apply with respect to any
holdover period to which Landlord has consented in writing, except to the
extent either (i) Tenant fails to vacate and surrender the Premises by the
end of the holdover period to which Landlord has thus consented, or (ii)
Landlord advised Tenant in writing of Landlord's anticipated damages from
Tenant's holding over at the time Landlord granted its written consent to
such holding over. Acceptance of rent by Landlord following expiration or
termination of this Lease shall not constitute a renewal of this Lease.
2.6 OPTION TO EXTEND TERM. Tenant shall have the option to extend
the term of this Lease, at the minimum rental set forth in Section 3.1(b) and
(c) (as applicable) and otherwise upon all the terms and provisions set forth
herein with respect to the initial term of this Lease, for up to two (2)
additional periods of five (5) years each, the first commencing upon the
expiration of the initial term hereof and the second commencing upon the
expiration of the first extended term, if any. Exercise of such option with
respect to the first such extended term shall be by written notice to
Landlord at least nine (9) months and not more than twelve (12) months prior
to the expiration of the initial term hereof; exercise of such option with
respect to the second extended term, if the first extension option has been
duly exercised, shall be by like written notice to Landlord at least nine (9)
months and not more than twelve (12) months prior to the expiration of the
first extended term hereof. If Tenant is in default hereunder, beyond any
applicable notice and cure periods, on the date of such notice or on the date
any extended term is to commence, then the exercise of the option shall be of
no force or effect, the extended term shall not commence and this Lease shall
expire at the end of the then current term hereof (or at such earlier time as
Landlord may elect pursuant to the default provisions of this Lease). If
Tenant properly exercises one or more extension options under this Section,
then all references in this Lease (other than in this Section 2.6) to the
"term" of this Lease shall be construed to include the extension term(s) thus
elected by Tenant. Except as expressly set forth in this Section 2.6, Tenant
shall have no right to extend the term of this Lease beyond its prescribed
term.
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[***] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.
3 RENTAL
3.1 MINIMUM RENTAL.
(a) RENTAL AMOUNTS. Tenant shall pay to Landlord as minimum
rental for the Building, in advance, without deduction, offset, notice or
demand, on or before the Rent Commencement Date and on or before the first
day of each subsequent calendar month of the initial term of this Lease, the
following amounts per month, subject to adjustment in accordance with the
terms of this Section 3.1:
MONTHS MONTHLY MINIMUM RENTAL
------ ----------------------
001 - 012 $ [***]
013 - 024 [***]
025 - 036 [***]
037 - 048 [***]
049 - 060 [***]
061 - 072 [***]
073 - 084 [***]
085 - 096 [***]
097 - 108 [***]
109 - 120 [***]
121 - 132 [***]
133 - 144 [***]
145 - 156 [***]
157 - 168 [***]
169 - 180 [***]
If the obligation to pay minimum rental hereunder commences on other than the
first day of a calendar month or if the term of this Lease terminates on
other than the last day of a calendar month, the minimum rental for such
first or last month of the term of this Lease, as the case may be, shall be
prorated based on the number of days the term of this Lease is in effect
during such month. If an increase in minimum rental becomes effective on a
day other than the first day of a calendar month, the minimum rental for that
month shall be the sum of the two applicable rates, each prorated for the
portion of the month during which such rate is in effect.
(b) RENTAL AMOUNTS DURING FIRST EXTENDED TERM. If Tenant
properly exercises its right to extend the term of this Lease pursuant to
Section 2.6 hereof, the minimum rental during the first year of the first
extended term shall be equal to the fair market rental value of the Building
(as defined below), determined as of the commencement of such extended term
in accordance with this Section 3.1(b), and during each subsequent year of
the first extended term shall be increased in accordance with the rental
increase provisions customary in the City of South San Francisco for
comparable commercial leases for office, laboratory and research and
development projects as of the commencement of the first extended term (which
rental increase provisions shall be determined as of the commencement of the
first extended term in accordance with this Section 3.1(b), but shall in no
event provide for an annual increase of less than [***] percent ([***]) of
the minimum rental in effect during the immediately preceding lease year).
Upon Landlord's receipt of a proper notice of Tenant's exercise of its option
to extend the term of this Lease, the parties shall have sixty (60) days in
which to agree on the initial fair market rental and the applicable rental
increase provisions for the Building as of the commencement of the first
extended term for the uses permitted hereunder. If the parties agree on such
fair market rental and rental increase provisions, they shall execute an
amendment to this Lease stating the amount of the initial minimum monthly
rental and the applicable rental increase provisions for the first extended
term. If the parties are unable to agree on such fair market rental and
rental increase provisions within such sixty (60) day period, then within
fifteen (15) days after the expiration of such period each party, at its cost
and by giving notice to the other party, shall appoint a real estate
appraiser who is a member of the American Institute of Real Estate
Appraisers, or any other similar organization, and has at least five (5)
years experience appraising similar commercial
-6-
[***] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.
properties in northeastern San Mateo County, to determine the fair market
rental and applicable rental increase provisions for the Building as of the
commencement of the first extended term in accordance with the provisions of
this Section 3.1(b). If either party fails to appoint an appraiser within the
allotted time, the single appraiser appointed by the other party shall be the
sole appraiser. If an appraiser is appointed by each party and the two
appraisers so appointed are unable to agree upon the fair market rental and
applicable rental increase provisions within thirty (30) days after the
appointment of the second, the two appraisers shall appoint a third similarly
qualified appraiser within ten (10) days after expiration of such 30-day
period; if they are unable to agree upon a third appraiser, then either party
may, upon not less than five (5) days notice to the other party, apply to the
Presiding Judge of the San Mateo County Superior Court for the appointment of
a third similarly qualified appraiser. Each party shall bear its own legal
fees in connection with appointment of the third appraiser and shall bear
one-half of any other costs of appointment of the third appraiser and of such
third appraiser's fee. The third appraiser, however selected, shall be a
person who has not previously acted for either party in any capacity. Within
thirty (30) days after the appointment of the third appraiser, a majority of
the three appraisers shall determine the fair market rental and applicable
rental increase provisions for the first extended term and shall so notify
the parties. If a majority are unable to agree within the allotted time, (i)
the three appraised fair market rental amounts shall be added together and
divided by three and the resulting quotient shall be the initial fair market
rental for the first extended term, and (ii) the applicable rental increase
provision shall be equal to the mathematical average (or the nearest
reasonable approximation thereto) of the two rental increase provisions that
are most closely comparable (but in no event less than [***] percent ([***])
per year over the minimum rent in effect in the immediately preceding lease
year), which determinations shall be binding on the parties and shall be
enforceable in any further proceedings relating to this Lease. For purposes
of this Section 3.1(b), the "FAIR MARKET RENTAL" of the Building shall be
determined with reference to the then prevailing market rental rates for
properties in the City of South San Francisco with shell and office, research
and development improvements and site (common area) improvements comparable
to those then existing in the Building and on the Property, taking into
account for such determination all tenant improvements then existing in the
Building (including, but not limited to, equipment and laboratory
improvements installed as part of the initial Tenant Improvements pursuant to
Section 5.1 and the Workletter) OTHER THAN improvements or alterations which
were constructed by Tenant at its sole expense and which Tenant has a right
or obligation to remove from the Building at the expiration of this Lease
pursuant to the provisions of Article 9 hereof.
(c) RENTAL AMOUNTS DURING SECOND EXTENDED TERM. If Tenant
properly exercises its right to a second extended term of this Lease pursuant
to Section 2.6 hereof, the minimum rental during such second extended term
shall be determined in the same manner provided in the preceding paragraph
for the first extended term, except that the determination shall be made as
of the commencement of the second extended term.
(d) RENTAL ADJUSTMENT DUE TO CHANGE IN SQUARE FOOTAGE. The
minimum rental amounts specified in Section 3.1(a) are based upon an
estimated area of 82,000 square feet for the Building. If the actual area of
the Building (measured from the exterior faces of exterior walls and from the
dripline of any overhangs), when completed, is greater or less than such
estimated area, then the minimum rentals specified in Section 3.1(a) shall be
adjusted for each rental period in strict proportion to the ratio between the
actual area of the Building during the applicable period (determined on the
basis of measurement described above in this sentence) and the assumed area
of 82,000 square feet. Measurement of building area under this paragraph
shall be made initially by Landlord's architect, subject to review and
approval by Tenant's architect.
(e) RENTAL ADJUSTMENT DUE TO TENANT IMPROVEMENT COSTS. The
minimum rental amounts specified in Section 3.1(a) are based on the
assumption that Landlord will pay out its maximum required Tenant Improvement
Allowance (as defined in the Workletter) of $[***] per square foot, as
specified in the Workletter, in connection with Tenant's construction of
Tenant's Work as described in the Workletter. If, following completion of
Tenant's Work pursuant to the Workletter, the total amount funded by Landlord
as part of the Tenant Improvement Allowance under the Workletter (including
any amounts chargeable against the Tenant Improvement Allowance pursuant to
Paragraph 4(a) of the Workletter, if applicable) is
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[***] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.
less than the maximum Tenant Improvement Allowance of $[***] per square foot,
then for each [***] per square foot (prorated for any amount less than a full
[***] per square foot) by which the total amount thus funded by Landlord is
less than such maximum Tenant Improvement Allowance, the minimum rental
amounts set forth in Section 3.1(a) shall be reduced for each applicable
period by [***] per square foot per month; PROVIDED, however, that the
foregoing adjustment shall not apply to any amounts by which the total amount
funded by Landlord as part of the Tenant Improvement Allowance under the
Workletter (including any amounts chargeable against the Tenant Improvement
Allowance pursuant to Paragraph 4(a) of the Workletter, if applicable) is
less than [***] per square foot, and therefore the maximum potential
reduction in minimum rental amounts under Section 3.1(a) pursuant to this
subsection (e), if the total amount thus funded by Landlord is [***] per
square foot or less, shall be [***] per square foot per month.
3.2 LATE CHARGE. If Tenant fails to pay rental or other amounts due
Landlord hereunder within thirty (30) days after the date such rental or
other amount is due, such unpaid amounts shall bear interest for the benefit
of Landlord at a rate equal to the lesser of fifteen percent (15%) per annum
or the maximum rate permitted by law, from the date thirty (30) days after
the due date to the date of actual payment. In addition to such interest,
Tenant shall pay to Landlord a late charge in an amount equal to six percent
(6%) of any installment of minimum rental and any other amounts due Landlord
if not paid in full on or before the fifth (5th) day after such rental or
other amount is due. Tenant acknowledges that late payment by Tenant to
Landlord of rental or other amounts due hereunder will cause Landlord to
incur costs not contemplated by this Lease, including, without limitation,
processing and accounting charges and late charges which may be imposed on
Landlord by the terms of any loan relating to the Property. Tenant further
acknowledges that it is extremely difficult and impractical to fix the exact
amount of such costs and that the late charge set forth in this Section 3.2
represents a fair and reasonable estimate thereof. Acceptance of any late
charge by Landlord shall not constitute a waiver of Tenant's default with
respect to overdue rental or other amounts, nor shall such acceptance prevent
Landlord from exercising any other rights and remedies available to it.
Acceptance of rent or other payments by Landlord shall not constitute a
waiver of late charges or interest accrued with respect to such rent or other
payments or any prior installments thereof, nor of any other defaults by
Tenant, whether monetary or non-monetary in nature, remaining uncured at the
time of such acceptance of rent or other payments.
4 STOCK WARRANTS
4.1 STOCK WARRANTS. Within thirty (30) days after the mutual
execution of this Lease, Tenant shall deliver to Landlord or Landlord's
designees (which may be any members, partners, shareholders or affiliates of
Landlord or any affiliates of any such members, partners, shareholders or
affiliates of Landlord) warrants registered in the name of Landlord or
Landlord's designees for the acquisition of an aggregate of two hundred
thousand (200,000) shares of Tenant's common stock, which warrants shall be
in form and substance mutually approved by Landlord and Tenant prior to Lease
execution as being mutually satisfactory to them. The warrants shall have an
exercise price per share equal to the greater of (a) the price per share of
preferred stock in the most recently completed arm's-length issuance or sale
of Tenant's preferred stock as of the date of this Lease or (b) the value per
share of Tenant's outstanding preferred stock as determined by Tenant's
independent auditors (presently Ernst & Young, LLP) as of the date of this
Lease, and shall be exercisable for a period beginning on the date of this
Lease and ending on the later to occur of (a) the seventh (7th) anniversary
of the date of this Lease or (b) the fifth (5th) anniversary of the closing
of the initial public offering of Tenant's common stock.
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[***] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.
5 CONSTRUCTION
5.1 CONSTRUCTION OF IMPROVEMENTS.
(a) Landlord shall, at Landlord's cost and expense (except
as otherwise provided herein and in the Workletter), construct Landlord's
Work as defined in and in accordance with the terms and conditions of the
Workletter. Landlord shall use its best reasonable efforts to complete such
construction promptly, diligently and within the applicable time periods set
forth in the Estimated Construction Schedule attached hereto as EXHIBIT D and
incorporated herein by this reference, as such schedule may be modified from
time to time in accordance with the Workletter, subject to the effects of any
delays caused by Tenant or any other circumstances beyond Landlord's
reasonable control (excluding any financial inability), and subject to the
provisions of Section 2.3 above.
(b) Tenant shall, at Tenant's cost and expense (except as
otherwise provided herein and in the Workletter), construct Tenant's Work as
defined in and in accordance with the terms and conditions of the Workletter.
Tenant shall use its best reasonable efforts to complete such construction
promptly, diligently and within the applicable time periods set forth in the
Estimated Construction Schedule attached hereto as EXHIBIT D and incorporated
herein by this reference, as such schedule may be modified from time to time
in accordance with the Workletter, subject to the effects of any delays
caused by Landlord or any other circumstances beyond Tenant's reasonable
control (excluding any financial inability).
5.2 CONDITION OF PROPERTY. Landlord shall deliver the Building Shell
and other Improvements constructed by Landlord to Tenant clean and free of
debris, promptly upon completion of construction thereof, and Landlord
warrants to Tenant that the Building Shell and other Improvements constructed
by Landlord (i) shall be free from material structural defects and shall be
in good operating condition on the Rent Commencement Date, and (ii) shall be
constructed in compliance in all material respects with the plans and
specifications developed pursuant to the Workletter and mutually approved (to
the extent required thereunder) by Landlord and Tenant, subject to any
changes implemented in such plans and specifications in accordance with the
procedures set forth in the Workletter. If this warranty is violated in any
respect, then it shall be the obligation of Landlord, after receipt of
written notice from Tenant setting forth with specificity the nature of the
violation, to correct promptly and diligently, at Landlord's sole cost, the
condition(s) constituting such violation. Tenant's failure to give such
written notice to Landlord within ninety (90) days after the Rent
Commencement Date shall give rise to a conclusive presumption that Landlord
has complied with all Landlord's obligations under this Section 5.2, except
with respect to latent defects (as to which such 90-day limitation shall not
apply). Without limiting the scope of Landlord's obligations under the
foregoing provisions of this Section 5.2, Landlord also agrees to either (x)
use its best reasonable efforts to enforce when and as necessary, for the
benefit of Tenant and the Improvements, any and all contractor's and/or
manufacturer's warranties extending more than ninety (90) days after the Rent
Commencement Date with respect to any of Landlord's Work or, at Tenant's
request, (y) assign any or all of such warranties to Tenant for enforcement
purposes (PROVIDED, however, that Landlord may reserve joint enforcement
rights under such warranties to the extent of Landlord's continuing
obligations or warranties hereunder). TENANT ACKNOWLEDGES THAT THE WARRANTY
CONTAINED IN THIS SECTION IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR
IMPLIED, WITH RESPECT TO THE PHYSICAL CONDITION OF THE IMPROVEMENTS TO BE
CONSTRUCTED BY LANDLORD AND THAT LANDLORD MAKES NO OTHER WARRANTIES EXCEPT AS
EXPRESSLY SET FORTH IN THIS LEASE.
5.3 COMPLIANCE WITH LAW. Landlord warrants to Tenant that the
Building Shell and other Improvements constructed by Landlord (when
constructed), as they exist on the Rent Commencement Date, but without regard
to the use for which Tenant will occupy the Building, shall not violate any
covenants or restrictions of record or any applicable law, building code,
regulation or ordinance in effect on the Rent Commencement Date. Tenant
warrants to Landlord that the Tenant Improvements and any other improvements
constructed by Tenant from time to time shall not violate any applicable law,
building code, regulation or ordinance in effect on the
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Rent Commencement Date or at the time such improvements are placed in
service. If it is determined that any of these warranties has been violated,
then it shall be the obligation of the warranting party, after written notice
from the other party, to correct the condition(s) constituting such violation
promptly, at the warranting party's sole cost and expense. Tenant
acknowledges that except as expressly set forth in this Lease, neither
Landlord nor any agent of Landlord has made any representation or warranty as
to the present or future suitability of the Property or Improvements for the
conduct of Tenant's business or proposed business thereon.
6 TAXES
6.1 PERSONAL PROPERTY. Tenant shall be responsible for and shall pay
prior to delinquency all taxes and assessments levied against or by reason of
(a) any and all alterations, additions and items installed or placed on or in
the Building and taxed as personal property rather than as real property,
and/or (b) all personal property, trade fixtures and other property placed by
Tenant on or about the Property. Upon request by Landlord, Tenant shall
furnish Landlord with satisfactory evidence of Tenant's payment thereof. If
at any time during the term of this Lease any of said alterations, additions
or personal property, whether or not belonging to Tenant, shall be taxed or
assessed as part of the Center, then such tax or assessment shall be paid by
Tenant to Landlord within fifteen (15) days after presentation by Landlord of
copies of the tax bills in which such taxes and assessments are included and
shall, for the purposes of this Lease, be deemed to be personal property
taxes or assessments under this Section 6.1.
6.2 REAL PROPERTY. To the extent any real property taxes and
assessments on the Building (including, but not limited to, the Improvements)
are assessed directly to Tenant, Tenant shall be responsible for and shall
pay prior to delinquency all such taxes and assessments levied against the
Building. Upon request by Landlord, Tenant shall furnish Landlord with
satisfactory evidence of Tenant's payment thereof. To the extent the Property
and/or Improvements are taxed or assessed to Landlord following the Rent
Commencement Date, such real property taxes and assessments shall constitute
Operating Expenses (as that term is defined in Section 7.2 of this Lease) and
shall be paid in accordance with the provisions of Article 7 of this Lease.
7 OPERATING EXPENSES
7.1 PAYMENT OF OPERATING EXPENSES.
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(a) Tenant shall pay to Landlord, at the time and in the
manner hereinafter set forth, as additional rental, an amount equal to
sixteen and ninety-eight hundredths percent (16.98%) ("TENANT'S OPERATING
COST SHARE") of the Operating Expenses defined in Section 7.2, subject to
adjustment pursuant to Sections 7.1(b) and (c) when applicable.
Notwithstanding the foregoing, with respect to liability insurance premiums
(except to the extent separately and specifically allocable to the Building,
in which event Tenant's Operating Cost Share with respect thereto shall be
100%), the land component of real property taxes and assessments, common area
lighting and maintenance expenses, and other similar expenses that are
incurred or measured on a Center-wide basis (rather than being clearly and
reasonably allocable or attributable to the Building alone, in which event
Tenant's Operating Cost Share with respect thereto shall be 100%) or that are
incurred with respect to common area facilities, notwithstanding any other
provisions of this Article 7, Tenant's Operating Cost Share with respect to
such Center-wide and/or common area expenses from and after the Rent
Commencement Date, regardless of the status of construction and occupancy of
the other contemplated buildings in the Center, shall be equal to the
percentage amount which is equivalent to a fraction, the numerator of which
is the square footage of the Building as actually constructed, as determined
in good faith by Landlord's architect on the basis of measurement set forth
in Section 3.1(d) hereof, and the denominator of which is the sum of the
actual square footage of all then completed buildings in the Center plus the
proposed square footage (as reflected in Landlord's entitlements for the
Property) of all not yet completed buildings that Landlord proposes to
construct in the Center (excluding the proposed child care facility and
proposed stand-alone restaurant as hereinafter set forth), in each case as
determined in good faith by Landlord's architect on the basis of measurement
set forth in Section 3.1(d) hereof, consistently applied; PROVIDED, however,
that the adjusted Tenant's Operating Cost Share determined pursuant to this
sentence shall be further adjusted from time to time to reflect (x) any
difference between the actual square footage of an additional building
completed in the Center from time to time and the proposed square footage at
which such additional building was previously included in the application of
the foregoing formula, and (y) any increase or decrease in the aggregate
square footage of the buildings that Landlord proposes to construct in the
Center as part of the initial phased development of the Center (such as, but
not limited to, any decision by Landlord to defer indefinitely, beyond the
normal and reasonable phasing of the Center, the construction of any of the
planned buildings in the Center and/or any action by governmental authorities
to reduce the aggregate square footage of the buildings that Landlord is
entitled to construct in the Center pursuant to Landlord's entitlements as
amended from time to time).
(b) Tenant's Operating Cost Share as specified in Section
7.1(a) is based upon an estimated area of 82,000 square feet for the Building
and upon an aggregate estimated area of 483,000 square feet for all of the
buildings that Landlord presently expects to have in fully constructed and
occupied condition on the Property at the Rent Commencement Date. If the
actual area of the Building (when completed) or of the other buildings
existing from time to time in the Center, as determined in good faith by
Landlord's architect on the basis of measurement set forth in Section 3.1(d)
hereof (which basis of measurement shall be applied consistently for all
buildings in the Center), differs from the assumed numbers set forth above
(including, but not limited to, any such difference arising from the
completion and occupancy of buildings in the Center before or after the Rent
Commencement Date hereunder, as contemplated in Section 7.1(c) below), then
Tenant's Operating Cost Share shall be adjusted to reflect the actual areas
so determined as they exist from time to time. In no event, however, shall
the square footage of any child care facility or stand-alone restaurant on
the Property be included as part of the square footage of buildings on the
Property in calculating Tenant's Operating Cost Share, nor shall any costs or
expenses relating to the proposed child care facility and proposed
stand-alone restaurant on the Premises be included in Operating Expenses as
hereinafter defined.
(c) As Landlord constructs additional buildings in the Center,
Tenant's Operating Cost Share shall be adjusted from time to time to be equal to
the percentage determined by dividing the gross square footage of the Building
as it then exists by the gross square footage of all buildings located in the
Center (subject to the exclusion set forth in Section 7.1(b) with respect to the
proposed child care facility and proposed restaurant). In determining such
percentage, a building shall be taken into account from and after the date on
which a tenant first enters into possession of the building or a portion
thereof; the good faith
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determination of the gross square footage of any such building by Landlord's
architects in a manner consistent with the manner in which other buildings in
the Center are measured shall be final and binding upon the parties; and
costs and expenses relating to a new building shall be taken into account as
Operating Expenses under this Article 7 only from and after the date on which
the square footage of the building is taken into account in determining
Tenant's Operating Cost Share under the criteria set forth in this paragraph.
7.2 DEFINITION OF OPERATING EXPENSES.
(a) Subject to the exclusions and provisions hereinafter
contained, the term "OPERATING EXPENSES" shall mean the total costs and
expenses incurred by or allocable to Landlord for management, operation and
maintenance of the Improvements, the Property and the Center, including,
without limitation, costs and expenses of (i) insurance (including, but not
limited to, earthquake insurance and environmental insurance), property
management, landscaping, and the operation, repair and maintenance of
buildings and Common Areas; (ii) all utilities and services; (iii) real and
personal property taxes and assessments or substitutes therefor levied or
assessed against the Center or any part thereof, including (but not limited
to) any possessory interest, use, business, license or other taxes or fees,
any taxes imposed directly on rents or services, any assessments or charges
for police or fire protection, housing, transit, open space, street or
sidewalk construction or maintenance or other similar services from time to
time by any governmental or quasi-governmental entity, and any other new
taxes on landlords in addition to taxes now in effect; (iv) supplies,
equipment, utilities and tools used in management, operation and maintenance
of the Center; (v) capital improvements to the Property, the Improvements or
the Center, amortized over a reasonable period, (aa) which reduce or will
cause future reduction of other items of Operating Expenses for which Tenant
is otherwise required to contribute or (bb) which are required by law,
ordinance, regulation or order of any governmental authority or (cc) of which
Tenant has use or which benefit Tenant; and (vi) any other costs (including,
but not limited to, any parking or utilities fees or surcharges not otherwise
specifically addressed elsewhere in this Lease) allocable to or paid by
Landlord, as owner of the Center or Improvements, pursuant to any applicable
laws, ordinances, regulations or orders of any governmental or
quasi-governmental authority or pursuant to the terms of any declarations of
covenants, conditions and restrictions now or hereafter affecting the Center
or any other property over which Tenant has non-exclusive usage rights as
contemplated in Section 1.1(b) hereof. Operating Expenses shall not include
any costs attributable to the work for which Landlord is required to pay
under Article 5 or the Workletter, nor any costs attributable to the initial
construction of buildings or Common Area improvements in the Center, nor any
costs attributable to buildings the square footage of which is not taken into
account in determining Tenant's Operating Cost Share under Section 7.1 for
the applicable period. The distinction between items of ordinary operating
maintenance and repair and items of a capital nature shall be made in
accordance with generally accepted accounting principles applied on a
consistent basis or in accordance with tax accounting principles, as
determined in good faith by Landlord's accountants.
(b) Notwithstanding any other provisions of this Section
7.2, the following shall not be included within Operating Expenses: (i) rent
paid to any ground lessor; (ii) the cost of constructing tenant improvements
for any other tenant of the Building or the Center; (iii) the costs of
special services, goods or materials provided to any other tenant of the
Building or the Center and not offered or made available to Tenant; (iv)
repairs covered by proceeds of insurance or from funds provided by Tenant or
any other tenant of the Center, or as to which any other tenant of the Center
is obligated to make such repairs or to pay the cost thereof; (v) legal fees,
advertising costs or other related expenses incurred by Landlord in
connection with the leasing of space to individual tenants of the Center;
(vi) repairs, alterations, additions, improvements or replacements needed to
rectify or correct any defects in the original design, materials or
workmanship of the Building, the Center or the Common Areas; (vii) damage and
repairs necessitated by the negligence or willful misconduct of Landlord or
of Landlord's employees, contractors or agents; (viii) executive salaries or
salaries of service personnel to the extent that such personnel perform
services other than in connection with the management, operation, repair or
maintenance of the Building or the Center; (ix) Landlord's general overhead
expenses not related to the Building or the Center; (x) legal fees,
accountants' fees and other expenses incurred in connection with disputes
with tenants or other occupants of the Center, or in connection with
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the enforcement of the terms of any leases with tenants or the defense of
Landlord's title to or interest in the Center or any part thereof; (xi) costs
incurred due to a violation by Landlord or any other tenant of the Center of
the terms and conditions of any lease; (xii) costs of any service provided to
Tenant or to other occupants of the Building or the Center for which Landlord
is reimbursed other than through recovery of Operating Expenses; (xiii)
personal property taxes due and payable by any other tenant of the Center;
and (xiv) costs incurred by Landlord pursuant to Article 15 of this Lease in
connection with an event of casualty or condemnation.
7.3 DETERMINATION OF OPERATING EXPENSES. On or before the Rent
Commencement Date and during the last month of each calendar year of the term
of this Lease ("LEASE YEAR"), or as soon thereafter as practical, Landlord
shall provide Tenant notice of Landlord's estimate of the Operating Expenses
for the ensuing Lease Year or applicable portion thereof. On or before the
first day of each month during the ensuing Lease Year or applicable portion
thereof, beginning on the Rent Commencement Date, Tenant shall pay to
Landlord Tenant's Operating Cost Share of the portion of such estimated
Operating Expenses allocable (on a pro rata basis) to such month; PROVIDED,
however, that if such notice is not given in the last month of a Lease Year,
Tenant shall continue to pay on the basis of the prior year's estimate, if
any, until the month after such notice is given. If at any time or times it
appears to Landlord that the actual Operating Expenses will vary from
Landlord's estimate by more than five percent (5%), Landlord may, by notice
to Tenant, revise its estimate for such year and subsequent payments by
Tenant for such year shall be based upon such revised estimate.
7.4 FINAL ACCOUNTING FOR LEASE YEAR.
(a) Within ninety (90) days after the close of each Lease
Year, or as soon after such 90-day period as practicable, Landlord shall
deliver to Tenant a statement of Tenant's Operating Cost Share of the
Operating Expenses for such Lease Year prepared by Landlord from Landlord's
books and records, which statement shall be final and binding on Landlord and
Tenant (except as provided in Section 7.4(b)). If on the basis of such
statement Tenant owes an amount that is more or less than the estimated
payments for such Lease Year previously made by Tenant, Tenant or Landlord,
as the case may be, shall pay the deficiency to the other party within thirty
(30) days after delivery of the statement. Failure or inability of Landlord
to deliver the annual statement within such ninety (90) day period shall not
impair or constitute a waiver of Tenant's obligation to pay Operating
Expenses, or cause Landlord to incur any liability for damages.
(b) At any time within three (3) months after receipt of
Landlord's annual statement of Operating Expenses as contemplated in Section
7.4(a), Tenant shall be entitled, upon reasonable written notice to Landlord
and during normal business hours at Landlord's office or such other places as
Landlord shall designate, to inspect and examine those books and records of
Landlord relating to the determination of Operating Expenses for the
immediately preceding Lease Year covered by such annual statement or, if
Tenant so elects by written notice to Landlord, to request an independent
audit of such books and records. The independent audit of the books and
records shall be conducted by a certified public accountant reasonably
acceptable to both Landlord and Tenant or, if the parties are unable to
agree, by a certified public accountant appointed by the Presiding Judge of
the San Mateo County Superior Court upon the application of either Landlord
or Tenant (with notice to the other party). In either event, such certified
public accountant shall be one who is not then employed in any capacity by
Landlord or Tenant or by any of their respective affiliates. The audit shall
be limited to the determination of the amount of Operating Expenses for the
subject Lease Year, and shall be based on generally accepted accounting
principles and tax accounting principles, consistently applied. If it is
determined, by mutual agreement of Landlord and Tenant or by independent
audit, that the amount of Operating Expenses billed to or paid by Tenant for
the applicable Lease Year was incorrect, then the appropriate party shall pay
to the other party the deficiency or overpayment, as applicable, within
thirty (30) days after the final determination of such deficiency or
overpayment. All costs and expenses of the audit shall be paid by Tenant
unless the audit shows that Landlord overstated Operating Expenses for the
subject Lease Year by more than five percent (5%), in which case Landlord
shall pay all costs and expenses of the audit. Each party agrees to maintain
the confidentiality of the findings of any audit in accordance with the
provisions of this Section 7.4.
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7.5 PRORATION. If the Rent Commencement Date falls on a day other
than the first day of a Lease Year or if this Lease terminates on a day other
than the last day of a Lease Year, then the amount of Operating Expenses
payable by Tenant with respect to such first or last partial Lease Year shall
be prorated on the basis which the number of days during such Lease Year in
which this Lease is in effect bears to 365. The termination of this Lease
shall not affect the obligations of Landlord and Tenant pursuant to Section
7.4 to be performed after such termination.
8 UTILITIES
8.1 PAYMENT. Commencing with the Rent Commencement Date and
thereafter throughout the term of this Lease, Tenant shall pay, before
delinquency, all charges for water, gas, heat, light, electricity, power,
sewer, telephone, alarm system, janitorial and other services or utilities
supplied to or consumed in or with respect to the Building (other than any
separately metered costs for water, electricity or other services or
utilities furnished with respect to the Common Areas, which costs shall be
paid by Landlord and shall constitute Operating Expenses under Section 7.2
hereof), including any taxes on such services and utilities. It is the
intention of the parties that all such services shall be separately metered
to the Building. In the event that any of such services supplied to the
Building are not separately metered, then the amount thereof shall be an item
of Operating Expenses and shall be paid as provided in Article 7.
8.2 INTERRUPTION. There shall be no abatement of rent or other
charges required to be paid hereunder and Landlord shall not be liable in
damages or otherwise for interruption or failure of any service or utility
furnished to or used with respect to the Building or Property because of
accident, making of repairs, alterations or improvements, severe weather,
difficulty or inability in obtaining services or supplies, labor difficulties
or any other cause. Notwithstanding the foregoing provisions of this Section
8.2, however, in the event of any interruption or failure of any service or
utility to the Building that (i) is caused in whole or in material part by
the active negligence or willful misconduct of Landlord or its agents,
employees or contractors AND (ii) continues for more than three (3) business
days AND (iii) materially impairs Tenant's ability to use the Building for
its intended purpose hereunder, then following such three (3) business day
period, Tenant's obligations for payment of rent and other charges under this
Lease shall be abated in proportion to the degree of impairment of Tenant's
use of the Building, and such abatement shall continue until Tenant's use of
the Building is no longer materially impaired thereby.
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9 ALTERATIONS; SIGNS
9.1 RIGHT TO MAKE ALTERATIONS. Tenant shall make no alterations,
additions or improvements to the Building or the Property, other than
interior non-structural alterations costing less than Fifty Thousand Dollars
($50,000.00) in the aggregate during any twelve (12) month period, without
the prior written consent of Landlord, which consent shall not be
unreasonably withheld or delayed. All such alterations, additions and
improvements shall be completed with due diligence in a first-class
workmanlike manner, in compliance with plans and specifications approved in
writing by Landlord and in compliance with all applicable laws, ordinances,
rules and regulations, and to the extent Landlord's consent is not otherwise
required hereunder for such alterations, additions or improvements, Tenant
shall give prompt written notice thereof to Landlord. Tenant shall cause any
contractors engaged by Tenant for work in the Building or on the Property to
maintain public liability and property damage insurance, and other customary
insurance, with such terms and in such amounts as Landlord may reasonably
require, naming as additional insureds Landlord and any of its members,
partners, shareholders, property managers and lenders designated by Landlord
for this purpose, and shall furnish Landlord with certificates of insurance
or other evidence that such coverage is in effect. Notwithstanding any other
provisions of this Section 9.1, under no circumstances shall Tenant make any
structural alterations or improvements, or any substantial changes to the
roof or substantial equipment installations on the roof, or any substantial
changes or alterations to the building systems, without Landlord's prior
written consent (which consent shall not be unreasonably withheld or
delayed). If Tenant so requests in seeking Landlord's consent to any
alterations, additions or improvements, Landlord shall specify in granting
such consent whether Landlord intends to require that Tenant remove such
alterations, additions or improvements (or any specified portions thereof)
upon expiration or termination of this Lease.
9.2 TITLE TO ALTERATIONS. All alterations, additions and
improvements installed in, on or about the Building or the Property
(including, but not limited to, lab benches, fume hoods, cold rooms and other
similar improvements and equipment) shall become part of the Property and
shall become the property of Landlord, unless Landlord elects to require
Tenant to remove the same upon the termination of this Lease; PROVIDED,
however, that the foregoing shall not apply to Tenant's movable furniture,
equipment and trade fixtures, except to the extent any such items are
specifically identified in the parenthetical in the initial portion of this
sentence. Tenant shall promptly repair any damage caused by its removal of
any such furniture, equipment or trade fixtures. Notwithstanding any other
provisions of this Article 9, however, (a) under no circumstances shall
Tenant have any right to remove from the Building or the Property, at the
expiration or termination of this Lease, any lab benches, fume hoods, cold
rooms or other similar improvements and equipment installed in the Building,
even if such equipment and improvements were installed by Tenant as part of
Tenant's Work under the Workletter or otherwise; and (b) if Tenant requests
Landlord's written consent to any alterations, additions or improvements
under Section 9.1 hereof and, in requesting such consent, asks that Landlord
specify whether Landlord will require removal of such alterations, additions
or improvements upon termination or expiration of this Lease, then Landlord
shall not be entitled to require such removal unless Landlord specified its
intention to do so at the time of granting of Landlord's consent to the
requested alterations, additions or improvements. Without limiting the
generality of clause (b) of the preceding sentence, Tenant shall not be
required to remove upon termination or expiration of this Lease any of the
improvements constructed by Tenant as part of Tenant's Work under the
Workletter, except to the extent that Landlord, in granting its approval of
the plans and specifications for Tenant's Work under the Workletter, advises
Tenant in writing that Landlord intends to require removal of any specified
elements of such Tenant's Work upon termination or expiration of this Lease.
Notwithstanding any other provisions of this Article 9, (x) it is the
intention of the parties that Landlord shall be entitled to claim all tax
attributes associated with alterations, additions, improvements and equipment
constructed or installed by Tenant or Landlord with funds provided by
Landlord pursuant to the Tenant Improvement Allowance; and (y) it is the
intention of the parties that Tenant shall be entitled to claim, during the
term of this Lease, all tax attributes associated with alterations,
additions, improvements and equipment constructed or installed by Tenant with
Tenant's own funds (and without any payment or reimbursement by Landlord
pursuant to the Tenant Improvement Allowance), despite the fact that the
items described in this clause (y) are characterized in this Section 9.2 as
becoming Landlord's
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property upon installation, in recognition of the fact that Tenant will have
installed and paid for such items, will have the right of possession of such
items during the term of this Lease and will have the obligation to pay
(directly or indirectly) property taxes on such items, carry insurance on
such items and bear the risk of loss with respect to such items under Article
15 hereof. If and to the extent it becomes necessary, in implementation of
the foregoing intentions, to identify (either specifically or on a percentage
basis, as may be required under applicable tax laws) which alterations,
additions, improvements and equipment constructed as part of Tenant's Work
under the Workletter have been funded through the Tenant Improvement
Allowance and which have been constructed or installed with Tenant's own
funds, Landlord and Tenant agree to cooperate reasonably and in good faith to
make such an identification by mutual agreement.
9.3 TENANT TRADE FIXTURES. Subject to the third sentence of Section
9.2 and to Section 9.5 (which shall be controlling in the case of signs,
logos and insignia), Tenant may install, remove and reinstall trade fixtures
without Landlord's prior written consent, except that installation and
removal of any trade fixtures which are affixed to the Building or the
Property or which affect the exterior or structural portions of the Building
or the building systems shall require Landlord's written approval, which
approval shall not be unreasonably withheld or delayed. Tenant shall
immediately repair any damage caused by installation and removal of trade
fixtures under this Section 9.3.
9.4 NO LIENS. Tenant shall at all times keep the Building and the
Property free from all liens and claims of any contractors, subcontractors,
materialmen, suppliers or any other parties employed either directly or
indirectly by Tenant in construction work on the Building or the Property.
Tenant may contest any claim of lien, but only if, prior to such contest,
Tenant either (i) posts security in the amount of the claim, plus estimated
costs and interest, or (ii) records a bond of a responsible corporate surety
in such amount as may be required to release the lien from the Building and
the Property. Tenant shall indemnify, defend and hold Landlord harmless
against any and all liability, loss, damage, cost and other expenses,
including, without limitation, reasonable attorneys' fees, arising out of
claims of any lien for work performed or materials or supplies furnished at
the request of Tenant or persons claiming under Tenant.
9.5 SIGNS. Tenant shall have the right to display its corporate
name, logo and/or insignia on the Building and in front of the entrance to
the Building, subject to (a) Landlord's prior approval as to location, size,
design and composition (which approval shall not be unreasonably withheld or
delayed), (b) the sign criteria established for the Center from time to time
and (c) all restrictions and requirements of applicable law and of any
covenants, conditions and restrictions or other written agreements now or
hereafter applicable to the Property. Tenant shall immediately repair any
damage caused by installation and removal of signs under this Section 9.5.
10 MAINTENANCE AND REPAIRS
10.1 LANDLORD'S WORK. Landlord shall repair and maintain or cause to
be repaired and maintained the Common Areas of the Center and the roof
(structural portions only), exterior walls and other structural portions of
the Building. The cost of all work performed by Landlord under this Section
10.1 shall be an Operating Expense hereunder, except to the extent such work
(i) is required due to the negligence or willful misconduct of Landlord or
its agents, employees or contractors, (ii) involves the repair or correction
of a condition or defect that Landlord is required to correct pursuant to
Section 5.2 hereof, (iii) is a capital expense not includible as an Operating
Expense under Section 7.2 hereof, or (iv) is required due to the negligence
or willful misconduct of Tenant or its agents, employees or invitees (in
which event Tenant shall bear the full cost of such work pursuant to the
indemnification provided in Section 12.6 hereof, subject to the release set
forth in Section 12.4 hereof). Tenant knowingly and voluntarily waives the
right to make repairs at Landlord's expense, or to offset the cost thereof
against rent, under any law, statute, regulation or ordinance now or
hereafter in effect.
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10.2 TENANT'S OBLIGATION FOR MAINTENANCE.
(a) GOOD ORDER, CONDITION AND REPAIR. Except as provided in
Section 10.1 hereof, Tenant at its sole cost and expense shall keep and
maintain in good and sanitary order, condition and repair the Building and
every part thereof, wherever located, including but not limited to the roof
(non-structural portions only), signs, interior, ceiling, electrical system,
plumbing system, telephone and communications systems of the Building, the
HVAC equipment and related mechanical systems serving the Building (for which
equipment and systems Tenant shall enter into a service contract with a
person or entity designated or reasonably approved by Landlord), all doors,
door checks, windows, plate glass, door fronts, exposed plumbing and sewage
and other utility facilities, fixtures, lighting, wall surfaces, floor
surfaces and ceiling surfaces of the Building and all other interior repairs,
foreseen and unforeseen, with respect to the Building, as required.
(b) LANDLORD'S REMEDY. If Tenant, after notice from
Landlord, fails to make or perform promptly any repairs or maintenance which
are the obligation of Tenant hereunder, Landlord shall have the right, but
shall not be required, to enter the Building and make the repairs or perform
the maintenance necessary to restore the Building to good and sanitary order,
condition and repair. Immediately on demand from Landlord, the cost of such
repairs shall be due and payable by Tenant to Landlord.
(c) CONDITION UPON SURRENDER. At the expiration or sooner
termination of this Lease, Tenant shall surrender the Building and the
Improvements, including any additions, alterations and improvements thereto,
broom clean, in good and sanitary order, condition and repair, ordinary wear
and tear and casualty damage (the latter of which shall be governed by the
provisions of Article 15 hereof) excepted, first, however, removing all goods
and effects of Tenant and all and fixtures and items required to be removed
or specified to be removed at Landlord's election pursuant to this Lease
(including, but not limited to, any such removal required as a result of an
election duly made by Landlord to require such removal as contemplated in
Section 9.2), and repairing any damage caused by such removal. Tenant shall
not have the right to remove fixtures or equipment if Tenant is in default
hereunder unless Landlord specifically waives this provision in writing.
Tenant expressly waives any and all interest in any personal property and
trade fixtures not removed from the Property by Tenant at the expiration or
termination of this Lease, agrees that any such personal property and trade
fixtures may, at Landlord's election, be deemed to have been abandoned by
Tenant, and authorizes Landlord (at its election and without prejudice to any
other remedies under this Lease or under applicable law) to remove and either
retain, store or dispose of such property at Tenant's cost and expense, and
Tenant waives all claims against Landlord for any damages resulting from any
such removal, storage, retention or disposal.
11 USE OF PROPERTY
11.1 PERMITTED USE. Subject to Sections 11.3, 11.4 and 11.6 hereof,
Tenant shall use the Building solely for a laboratory and research and
development facility, including (but not limited to) wet chemistry and
biology labs, clean rooms, storage and use of toxic and radioactive materials
(subject to the provisions of Section 11.6 hereof), storage and use of
laboratory animals, administrative offices, and other lawful purposes
reasonably related to or incidental to such specified uses (subject in each
case to receipt of all necessary approvals from the City of South San
Francisco and other governmental agencies having jurisdiction over the
Building), and for no other purpose, unless Landlord in its sole discretion
otherwise consents in writing.
11.2 REQUIREMENT OF CONTINUED USE. Tenant shall not at any time
leave the Building unoccupied or vacant, and shall continuously during the
term of this Lease (except prior to the Rent Commencement Date and during any
period when the Building is unusable by reason of events described in Article
15 hereof) conduct and carry on in the Building the use permitted hereunder.
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11.3 NO NUISANCE. Tenant shall not use the Building for or carry on
or permit upon the Property or any part thereof any nuisance or anything
against public policy, nor interfere with the rights or business of Landlord
in the Building or the Property, nor commit or allow to be committed any
waste in, on or about the Property. Tenant shall not do or permit anything to
be done in or about the Property, nor bring nor keep anything therein, which
will in any way cause the Property to be uninsurable with respect to the
insurance required by this Lease or with respect to standard fire and
extended coverage insurance with vandalism, malicious mischief and riot
endorsements.
11.4 COMPLIANCE WITH LAWS.
(a) Tenant shall not use the Building or Property or permit
the Building or Property to be used in whole or in part for any purpose or
use that is in violation of any applicable laws, ordinances, regulations or
rules of any governmental agency or public authority. Tenant shall keep the
Building and Improvements equipped with all safety appliances required by
law, ordinance or insurance on the Property, or any order or regulation of
any public authority, because of Tenant's particular use of the Property.
Tenant shall procure all licenses and permits required for use of the
Property. Tenant shall use the Property in strict accordance with all
applicable ordinances, rules, laws and regulations and shall comply with all
requirements of all governmental authorities now in force or which may
hereafter be in force pertaining to the use of the Property by Tenant,
including, without limitation, regulations applicable to noise, water, soil
and air pollution, and making such nonstructural alterations and additions
thereto as may be required from time to time by such laws, ordinances, rules,
regulations and requirements of governmental authorities or insurers of the
Property (collectively, "REQUIREMENTS") because of Tenant's construction of
improvements in or other particular use of the Property. Any structural
alterations or additions required from time to time by applicable
Requirements because of Tenant's construction of improvements in the Building
or other particular use of the Property shall, at Landlord's election, either
(i) be made by Tenant, at Tenant's sole cost and expense, in accordance with
the procedures and standards set forth in Section 9.1 for alterations by
Tenant, or (ii) be made by Landlord at Tenant's sole cost and expense, in
which event Tenant shall pay to Landlord as additional rent, within ten (10)
days after demand by Landlord, an amount equal to all reasonable costs
incurred by Landlord in connection with such alterations or additions. The
final judgment of any court, or the admission by Tenant in any proceeding
against Tenant, that Tenant has violated any law, statute, ordinance or
governmental rule, regulation or requirement shall be conclusive of such
violation as between Landlord and Tenant.
(b) In compliance with requirements imposed upon Landlord by
an Owner Participation Agreement between Landlord and The Redevelopment
Agency of the City of South San Francisco, Tenant hereby agrees to and
accepts the following provision:
"Tenant herein covenants by and for itself and its successors
and assigns, and all persons claiming under or through it, and this
Lease is made and accepted upon and subject to the conditions that
there shall be no discrimination against or segregation of any person
or group of persons on account of race, color, religion, creed, sex,
marital status, ancestry or national origin in the leasing, subleasing,
transferring, use, occupancy, tenure or enjoyment of the property
herein leased, nor shall Tenant or any person claiming under or through
it establish or permit any such practice or practices of discrimination
or segregation with reference to the selection, location, number, use
or occupancy of tenants, lessees, sublessees, subtenants or vendees in
the property herein leased."
11.5 LIQUIDATION SALES. Tenant shall not conduct or permit to be
conducted any auction, bankruptcy sale, liquidation sale, or going out of
business sale, in, upon or about the Property, whether said auction or sale
be voluntary, involuntary or pursuant to any assignment for the benefit of
creditors, or pursuant to any bankruptcy or other insolvency proceeding.
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11.6 ENVIRONMENTAL MATTERS.
(a) For purposes of this Section, "HAZARDOUS SUBSTANCE"
shall mean the substances included within the definitions of the term
"hazardous substance" under (i) the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. Sections 9601
ET SEQ., and the regulations promulgated thereunder, as amended, (ii) the
California Xxxxxxxxx-Xxxxxxx-Xxxxxx Hazardous Substance Account Act,
California Health & Safety Code Sections 25300 ET SEQ., and regulations
promulgated thereunder, as amended, (iii) the Hazardous Materials Release
Response Plans and Inventory Act,
California Heath & Safety Code Sections
25500 ET SEQ., and regulations promulgated thereunder, as amended, and (iv)
petroleum; "HAZARDOUS WASTE" shall mean (i) any waste listed as or meeting
the identified characteristics of a "hazardous waste" under the Resource
Conservation and Recovery Act of 1976, 42 U.S.C. Sections 6901 ET SEQ., and
regulations promulgated pursuant thereto, as amended (collectively, "RCRA"),
(ii) any waste meeting the identified characteristics of "hazardous waste,"
"extremely hazardous waste" or "restricted hazardous waste" under the
California Hazardous Waste Control Law,
California Health & Safety Code
Sections 25100 ET SEQ., and regulations promulgated pursuant thereto, as
amended (collectively, the "CHWCL"), and/or (iii) any waste meeting the
identified characteristics of "medical waste" under
California Health &
Safety Code Sections 25015-25027.8, and regulations promulgated thereunder,
as amended; and "HAZARDOUS WASTE FACILITY" shall mean a hazardous waste
facility as defined under the CHWCL.
(b) Without limiting the generality of the obligations set
forth in Section 11.4 of this Lease:
(i) Tenant shall not cause or permit any hazardous
substance or hazardous waste to be brought upon, kept, stored or used in or
about the Property without the prior written consent of Landlord, which
consent shall not be unreasonably withheld, except that Tenant, in connection
with its permitted use of the Property as provided in Section 11.1, may keep,
store and use materials that constitute hazardous substances which are
customary for such permitted use, provided such hazardous substances are
kept, stored and used in quantities which are customary for such permitted
use and are kept, stored and used in full compliance with clauses (ii) and
(iii) immediately below.
(ii) Tenant shall comply with all applicable laws,
rules, regulations, orders, permits, licenses and operating plans of any
governmental authority with respect to the receipt, use, handling,
generation, transportation, storage, treatment and/or disposal of hazardous
substances or wastes by Tenant or its agents or employees, and Tenant will
provide Landlord with copies of all permits, licenses, registrations and
other similar documents that authorize Tenant to conduct any such activities
in connection with its authorized use of the Property from time to time,
which copies shall be provided initially within fifteen (15) days after the
Rent Commencement Date and shall thereafter be updated at least annually, on
or before each anniversary of the Rent Commencement Date.
(iii) Tenant shall not (A) operate on or about the
Property any facility required to be permitted or licensed as a storage
facility (as defined in Section 25123.3 of the CHWCL) or as any other kind of
hazardous waste facility or for which interim status as such is required, nor
(B) store any hazardous wastes on or about the Property for ninety (90) days
or more, nor (C) conduct any other activities on or about the Property that
could result in the Property being deemed to be a "hazardous waste facility"
(including, but not limited to, any storage or treatment of hazardous
substances or hazardous wastes which could have such a result), other than
temporary storage of hazardous wastes generated in the ordinary course of
Tenant's business under conditions and for periods of time that do not
require permitting or licensing of the Property or any part thereof under the
CHWCL, nor (D) store any hazardous wastes on or about the Property in
violation of any federal or
California laws or in violation of the terms of
any federal or
California licenses or permits held by Tenant.
(iv) Tenant shall comply with all applicable laws,
rules, regulations, orders and permits relating to underground storage tanks
installed by Tenant or its agents or employees or at the request of Tenant
(including any installation, monitoring, maintenance,
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closure and/or removal of such tanks) as such tanks are defined in
California
Health & Safety Code Section 25281(x), including, without limitation,
complying with California Health & Safety Code Sections 25280-25299.7 and the
regulations promulgated thereunder, as amended. Tenant shall furnish to
Landlord copies of all registrations and permits issued to or held by Tenant
from time to time for any and all underground storage tanks located on or
under the Property.
(v) If applicable, Tenant shall provide Landlord
in writing the following information and/or documentation within fifteen (15)
days after the Rent Commencement Date, and shall update such information at
least annually, on or before each anniversary of the Rent Commencement Date,
to reflect any change in or addition to the required information and/or
documentation (PROVIDED, however, that in the case of the materials described
in subparagraphs (B), (C) and (E) below, Tenant shall not be required to
deliver copies of such materials to Landlord but shall maintain copies of
such materials to such extent and for such periods as may be required by
applicable law and shall permit Landlord or its representatives to inspect
and copy such materials during normal business hours at any time and from
time to time upon reasonable notice to Tenant):
(A) A list of all hazardous substances
and/or wastes that Tenant receives, uses, handles, generates, transports,
stores, treats or disposes of from time to time in connection with its
operations on the Property.
(B) All Material Safety Data Sheets
("MSDS'S"), if any, required to be completed with respect to operations of
Tenant at the Property from time to time in accordance with Title 26,
California Code of Regulations Section 8-5194 or 42 U.S.C. Section 11021, or
any amendments thereto, and any Hazardous Materials Inventory Sheets that
detail the MSDS's.
(C) All hazardous waste manifests (as
defined in Title 26, California Code of Regulations Section 22-66481), if
any, that Tenant is required to complete from time to time in connection with
its operations at the Property.
(D) A copy of any Hazardous Materials
Management Plan required from time to time with respect to Tenant's
operations at the Property, pursuant to California Health & Safety Code
Sections 25500 ET SEQ., and any regulations promulgated thereunder, as
amended.
(E) Any Contingency Plans and Emergency
Procedures required of Tenant from time to time due to its operations in
accordance with Title 26, California Code of Regulations Sections 22-67140 ET
SEQ., and any amendments thereto, and any Training Programs and Records
required under Title 26, California Code of Regulations, Section 22-67105,
and any amendments thereto.
(F) Copies of any biennial reports to be
furnished to the California Department of Health Services from time to time
relating to hazardous substances or wastes, pursuant to Title 26, California
Code of Regulations, Section 22-66493, and any amendments thereto.
(G) Copies of all industrial wastewater
discharge permits issued to or held by Tenant from time to time in connection
with its operations on the Property.
(H) Copies of any other lists or
inventories of hazardous substances and/or wastes on or about the Property
that Tenant is otherwise required to prepare and file from time to time with
any governmental or regulatory authority.
(vi) Tenant shall secure Landlord's prior written approval
for any proposed receipt, storage, possession, use, transfer or disposal of
"radioactive materials" or "radiation," as such materials are defined in
Title 26, California Code of Regulations Section 17-30100, and/or any other
materials possessing the characteristics of the materials so defined, which
approval Landlord shall not unreasonably withhold; PROVIDED, that such
approval shall not be required for any radioactive materials (x) for which
Tenant has secured prior written approval of
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the Nuclear Regulatory Commission and delivered to Landlord a copy of such
approval (if applicable), or (y) which Tenant is authorized to use pursuant
to the terms of a Radioactive Material License (if any) issued by the State
of California, provided that Tenant has delivered a copy of such License to
Landlord. Tenant, in connection with any such authorized receipt, storage,
possession, use, transfer or disposal of radioactive materials or radiation,
shall:
(A) Comply with all federal, state and
local laws, rules, regulations, orders, licenses and permits issued to or
applicable to Tenant with respect to its business operations on the Property;
(B) Maintain, to such extent and for such
periods as may be required by applicable law, and permit Landlord and its
representatives to inspect during normal business hours at any time and from
time to time upon reasonable notice to Tenant, a list of all radioactive
materials or radiation received, stored, possessed, used, transferred or
disposed of by Tenant or in connection with the operation of Tenant's
business on the Property from time to time, to the extent not already
disclosed through delivery of a copy of a Nuclear Regulatory Commission
approval and/or a California Radioactive Material License with respect
thereto as contemplated above; and
(C) Maintain, to such extent and for such
periods as may be required by applicable law, and permit Landlord or its
representatives to inspect during normal business hours at any time and from
time to time upon reasonable notice to Tenant, all licenses, registration
materials, inspection reports, governmental orders and permits in connection
with the receipt, storage, possession, use, transfer or disposal of
radioactive materials or radiation by Tenant or in connection with the
operation of Tenant's business on the Property from time to time.
(vii) Tenant shall comply with any and all
applicable laws, rules, regulations and orders of any governmental authority
with respect to the release into the environment of any hazardous wastes or
substances or radiation or radioactive materials by Tenant or its agents or
employees. Tenant shall give Landlord verbal notice of any unauthorized
release of any such hazardous wastes or substances or radiation or
radioactive materials into the environment within twenty-four (24) hours of
the time at which Tenant became aware of such release, and shall follow such
verbal notice with written notice to Landlord of such release within
forty-eight (48) hours of the time at which Tenant became aware of such
release.
(viii) Tenant shall indemnify, defend and hold
Landlord harmless from and against any and all claims, losses (including, but
not limited to, loss of rental income), damages, liabilities, costs, legal
fees and expenses of any sort arising out of or relating to (A) any failure
by Tenant to comply with any provisions of this Section 11.6(b), or (B) any
receipt, use handling, generation, transportation, storage, treatment,
release and/or disposal of any hazardous substance or waste or any
radioactive material or radiation on or about the Property as a proximate
result of Tenant's use of the Property or as a result of any intentional or
negligent acts or omissions of Tenant or of any agent, employee or invitee of
Tenant.
(ix) Tenant shall cooperate with Landlord in
furnishing Landlord with complete information regarding Tenant's receipt,
handling, use, storage, transportation, generation, treatment and/or disposal
of any hazardous substances or wastes or radiation or radioactive materials.
Upon request, Tenant shall grant Landlord reasonable access at reasonable
times to the Property to inspect Tenant's receipt, handling, use, storage,
transportation, generation, treatment and/or disposal of hazardous substances
or wastes or radiation or radioactive materials, without being deemed guilty
of any disturbance of Tenant's use or possession and without being liable to
Tenant in any manner.
(x) Notwithstanding Landlord's rights of
inspection and review under this Section 11.6(b), Landlord shall have no
obligation or duty to so inspect or review, and no third party shall be
entitled to rely on Landlord to conduct any sort of inspection or review by
reason of the provisions of this Section 11.6(b).
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(xi) If Tenant or its employees, agents,
contractors, vendors, customers or guests receive, handle, use, store,
transport, generate, treat and/or dispose of any hazardous substances or
wastes or radiation or radioactive materials on or about the Property at any
time during the term of this Lease, then within thirty (30) days after the
termination or expiration of this Lease, Tenant shall, at Tenant's sole cost
and expense, obtain and deliver to Landlord an environmental study, performed
by an expert reasonably satisfactory to Landlord, evaluating the presence or
absence of hazardous substances and wastes, radiation and radioactive
materials in, on, under and about the Building, including (but not limited
to) areas of the Property outside the Building which the expert determines,
based on reasonable inquiry and investigation, to have a reasonable
possibility of having been affected by a release of hazardous substances or
wastes or of radiation or radioactive materials related to or arising in
connection with Tenant's occupancy of the Building and/or the conduct of
Tenant's business on and about the Property. Such study shall be based on a
reasonable and prudent level of tests and investigations of the Building and,
to the extent contemplated in the preceding sentence, any other appropriate
areas of the Property, which tests shall be conducted no earlier than the
date of termination or expiration of this Lease. Liability for any remedial
actions required or recommended on the basis of such study shall be allocated
in accordance with Sections 11.4, 11.6, 12.6 and other applicable provisions
of this Lease. [***]
(c) Landlord shall indemnify, defend and hold Tenant
harmless from and against any and all claims, losses, damages, liabilities,
costs, legal fees and expenses of any sort arising out of or relating to (i)
the presence on the Property of any hazardous substances or wastes or
radiation or radioactive materials, including, but not limited to, "known
conditions" as defined in the RWQCB Mutual Release and Covenant Not to Xxx
dated July 12, 2000, present on the Property as of the Rent Commencement Date
(other than as a result of any intentional or negligent acts or omissions of
Tenant or of any agent, employee or invitee of Tenant), and/or (ii) any
unauthorized release into the environment (including, but not limited to, the
Property) of any hazardous substances or wastes or radiation or radioactive
materials to the extent such release results from the negligence of or
willful misconduct or omission by Landlord or its agents or employees.
(d) The provisions of this Section 11.6 shall survive the
termination of this Lease.
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[***] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.
12. INSURANCE AND INDEMNITY
12.1 INSURANCE.
(a) Tenant shall procure and maintain in full force and
effect at all times during the term of this Lease, at Tenant's cost and
expense, commercial general liability insurance to protect against liability
to the public, or to any invitee of Tenant or Landlord, arising out of or
related to the use of or resulting from any accident occurring in, upon or
about the Property, with limits of liability of not less than (i) Two Million
Dollars ($2,000,000.00) for injury to or death of one person, (ii) Five
Million Dollars ($5,000,000.00) for personal injury or death, per occurrence,
and (iii) One Million Dollars ($1,000,000.00) for property damage, or
combined single limit of liability of not less than Five Million Dollars
($5,000,000.00). Such insurance shall name Landlord, its Manager, its
property manager and any lender holding a deed of trust on the Property from
time to time (as designated in writing by Landlord to Tenant from time to
time) as additional insureds thereunder. The amount of such insurance shall
not be construed to limit any liability or obligation of Tenant under this
Lease. Tenant shall also procure and maintain in full force and effect at all
times during the term of this Lease, at Tenant's cost and expense,
products/completed operations coverage on terms and in amounts (A) customary
in Tenant's industry for companies engaged in the marketing of products on a
scale comparable to that in which Tenant is engaged from time to time and (B)
mutually satisfactory to Landlord and Tenant in their respective reasonable
discretion.
(b) Landlord shall procure and maintain in full force and
effect at all times during the term of this Lease, at Landlord's cost and
expense (but reimbursable as an Operating Expense under Section 7.2 hereof),
commercial general liability insurance to protect against liability arising
out of or related to the use of or resulting from any accident occurring in,
upon or about the Property, with combined single limit of liability of not
less than Five Million Dollars ($5,000,000.00) per occurrence for bodily
injury and property damage.
(c) Landlord shall procure and maintain in full force and
effect at all times during the term of this Lease, at Landlord's cost and
expense (but reimbursable as an Operating Expense under Section 7.2 hereof),
policies of property insurance providing protection against "all risk of
direct physical loss" (as defined by and detailed in the Insurance Service
Office's Commercial Property Program "Cause of Loss--Special Form [CP1030]"
or its equivalent) for the Building Shell (as defined in the Workletter) and
for the improvements in the Common Areas of the Property, on a full
replacement cost basis (with no co-insurance or, if coverage without
co-insurance is not reasonably available, then on an "agreed amount" basis).
Such insurance shall include earthquake coverage and shall have such
commercially reasonable deductibles (not to exceed Fifteen Thousand Dollars
($15,000) per occurrence, except for earthquake and environmental insurance,
which may have higher commercially reasonable deductibles consistent with
conditions and practices generally prevailing in the markets for such
insurance) and other terms as Landlord in its reasonable discretion
determines to be appropriate. Landlord shall have no obligation to carry
property damage insurance for any alterations, additions or improvements
installed by Tenant in the Building or on or about the Property.
(d) Tenant shall procure and maintain in full force and
effect at all times during the term of this Lease, at Tenant's cost and
expense, policies of property insurance providing protection against "all
risk of direct physical loss" (as defined by and detailed in the Insurance
Service Office's Commercial Property Program "Cause of Loss-Special Form
[CP1030]" or its equivalent) for the Tenant Improvements constructed by
Tenant pursuant to the Workletter and on all other alterations, additions and
improvements installed by Tenant from time to time in or about the Building,
on a full replacement cost basis (with no co-insurance or, if coverage
without co-insurance is not reasonably available, then on an "agreed amount"
basis). Such insurance may have such commercially reasonable deductibles (not
to exceed Fifteen Thousand Dollars ($15,000) per occurrence, except for
earthquake and environmental insurance, if any, which may have higher
commercially reasonable deductibles consistent with conditions and practices
generally prevailing in the markets for such insurance) and other terms as
Tenant in its reasonable discretion determines to be appropriate, and shall
name both Tenant and Landlord as insureds as their interests may appear.
Without limiting the generality of the foregoing provisions, Tenant's
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property insurance on the Tenant Improvements shall in all events include
earthquake insurance in an amount at least equal to the amount of the Tenant
Improvement Allowance paid by Landlord pursuant to the Workletter in
connection with the construction of the Tenant Improvements.
(e) During the course of construction of the improvements
being constructed by Landlord and Tenant under Section 5.1 and the
Workletter, Landlord and Tenant respectively shall each procure and maintain
in full force and effect, at its respective sole cost and expense, policies
of builder's risk insurance on the improvements respectively being
constructed by it, in such amounts and with such commercially reasonable
deductibles and other terms as Landlord in its reasonable discretion
determines to be appropriate with respect to the insurance to be maintained
by Landlord, and in such amounts and with such commercially reasonable
deductibles and other terms as Landlord and Tenant may mutually and
reasonably determine to be appropriate with respect to the insurance to be
maintained by Tenant. Without limiting the generality of the foregoing
provisions, Tenant's builder's risk insurance with respect to the Tenant
Improvements shall in all events include earthquake insurance in an amount at
least equal to the cumulative amount of the Tenant Improvement Allowance paid
from time to time by Landlord pursuant to the Workletter in connection with
the construction of the Tenant Improvements.
12.2 QUALITY OF POLICIES AND CERTIFICATES. All policies of insurance
required hereunder shall be issued by responsible insurers and, in the case
of policies carried or required to be carried by Tenant, shall be written as
primary policies not contributing with and not in excess of any coverage that
Landlord may carry. Tenant shall deliver to Landlord copies of policies or
certificates of insurance showing that said policies are in effect. The
coverage provided by such policies shall include the clause or endorsement
referred to in Section 12.4. If Tenant fails to acquire, maintain or renew
any insurance required to be maintained by it under this Article 12 or to pay
the premium therefor, then Landlord, at its option and in addition to its
other remedies, but without obligation so to do, may procure such insurance,
and any sums expended by it to procure any such insurance on behalf of or in
place of Tenant shall be repaid upon demand, with interest as provided in
Section 3.2 hereof. Tenant shall give Landlord at least thirty (30) days
prior written notice of any cancellation or nonrenewal of insurance required
to be maintained under this Article 12, and shall obtain written undertakings
from each insurer under policies required to be maintained by it to endeavor
to notify all insureds thereunder at least thirty (30) days prior to
cancellation of coverage.
12.3 WORKERS' COMPENSATION. Tenant shall maintain in full force and
effect during the term of this Lease workers' compensation insurance in at
least the minimum amounts required by law, covering all of Tenant's employees
working on the Property.
12.4 WAIVER OF SUBROGATION. To the extent permitted by law and
without affecting the coverage provided by insurance required to be
maintained hereunder, Landlord and Tenant each waive any right to recover
against the other with respect to (i) damage to property, (ii) damage to the
Property or any part thereof, or (iii) claims arising by reason of any of the
foregoing, but only to the extent that any of the foregoing damages and
claims under clauses (i)-(iii) hereof are covered, and only to the extent of
such coverage, by property insurance actually carried or required to be
carried hereunder by either Landlord or Tenant. This provision is intended to
waive fully, and for the benefit of each party, any rights and claims which
might give rise to a right of subrogation in any insurance carrier. Each
party shall procure a clause or endorsement on any property insurance policy
denying to the insurer rights of subrogation against the other party to the
extent rights have been waived by the insured prior to the occurrence of
injury or loss. Coverage provided by insurance maintained by Tenant shall not
be limited, reduced or diminished by virtue of the subrogation waiver herein
contained.
12.5 INCREASE IN PREMIUMS. Tenant shall do all acts and pay all
expenses necessary to insure that the Building is not used for purposes
prohibited by any applicable fire insurance, and that Tenant's use of the
Building and Property complies with all requirements necessary to obtain any
such insurance. If Tenant uses or permits the Building or Property to be used
in a manner which increases the existing rate of any insurance carried by
Landlord on the Center and such use continues for longer than a reasonable
period specified in any written notice from Landlord to Tenant identifying
the rate increase and the factors causing the same, then Tenant shall pay the
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amount of the increase in premium caused thereby, and Landlord's costs of
obtaining other replacement insurance policies, including any increase in
premium, within ten (10) days after demand therefor by Landlord.
12.6 INDEMNIFICATION.
(a) Except as otherwise expressly provided for in this
Lease, Tenant shall indemnify, defend and hold Landlord and its members,
partners, shareholders, officers, directors, agents, employees and
contractors harmless from any and all liability for injury to or death of any
person, or loss of or damage to the property of any person, and all actions,
claims, demands, costs (including, without limitation, reasonable attorneys'
fees), damages or expenses of any kind arising therefrom which may be brought
or made against Landlord or which Landlord may pay or incur by reason of the
use, occupancy and enjoyment of the Property by Tenant or any invitees,
sublessees, licensees, assignees, employees, agents or contractors of Tenant
or holding under Tenant (including, but not limited to, any such matters
arising out of or in connection with any early entry upon the Property by
Tenant pursuant to Section 2.2 hereof) from any cause whatsoever other than
negligence or willful misconduct or omission by Landlord or its agents,
employees or contractors. Landlord and its members, partners, shareholders,
officers, directors, agents, employees and contractors shall not be liable
for, and Tenant hereby waives all claims against such persons for, damages to
goods, wares and merchandise in or upon the Property, or for injuries to
Tenant, its agents or third persons in or upon the Property, from any cause
whatsoever other than negligence or willful misconduct or omission by
Landlord or its agents, employees or contractors. Tenant shall give prompt
notice to Landlord of any casualty or accident in, on or about the Property.
(b) Except as otherwise expressly provided for in this
Lease, Landlord shall indemnify, defend and hold Tenant and its partners,
shareholders, officers, directors, agents, employees and contractors harmless
from any and all liability for injury to or death of any person, or loss of
or damage to the property of any person, and all actions, claims, demands,
costs (including, without limitation, reasonable attorneys' fees), damages or
expenses of any kind arising therefrom which may be brought or made against
Tenant or which Tenant may pay or incur, to the extent such liabilities or
other matters arise in, on or about the Property by reason of any negligence
or willful misconduct or omission by Landlord or its agents, employees or
contractors.
12.7 BLANKET POLICY. Any policy required to be maintained hereunder
may be maintained under a so-called "blanket policy" insuring other parties
and other locations so long as the amount of insurance required to be
provided hereunder is not thereby diminished. Without limiting the generality
of the requirement set forth at the end of the preceding sentence, property
insurance provided under a blanket policy shall provide full replacement cost
coverage and liability insurance provided under a blanket policy shall
include per location aggregate limits meeting or exceeding the limits
required under this Article 12.
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13. SUBLEASE AND ASSIGNMENT
13.1 ASSIGNMENT AND SUBLEASE OF BUILDING. Except in the case of a
Permitted Transfer, Tenant shall not have the right or power to assign its
interest in this Lease, or make any sublease of the Building or any portion
thereof, nor shall any interest of Tenant under this Lease be assignable
involuntarily or by operation of law, without on each occasion obtaining the
prior written consent of Landlord, which consent shall not be unreasonably
withheld or delayed. Any purported sublease or assignment of Tenant's
interest in this Lease requiring but not having received Landlord's consent
thereto (to the extent such consent is required hereunder) shall be void.
Without limiting the generality of the foregoing provisions, Landlord may
withhold consent to any proposed subletting or assignment solely on the
ground, if applicable, that the use by the proposed subtenant or assignee is
reasonably likely to be incompatible with Landlord's use of the balance of
the Property or of any adjacent property owned or operated by Landlord.
Except in the case of a Permitted Transfer, any dissolution, consolidation,
merger or other reorganization of Tenant, or any sale or transfer of
substantially all of the stock or assets of Tenant in a single transaction or
series of related transactions, shall be deemed to be an assignment hereunder
and shall be void without the prior written consent of Landlord as required
above. Notwithstanding the foregoing, (i) no issuance or sale of Tenant's
capital stock through any public securities exchange nor any other issuance
of Tenant's capital stock for bona fide financing purposes shall be deemed to
be an assignment, subletting or transfer hereunder; and (ii) Tenant shall
have the right to assign this Lease or sublet the Building, or any portion
thereof, without Landlord's consent (but with prior or concurrent written
notice by Tenant to Landlord), to any Affiliate of Tenant, or to any entity
which results from a merger or consolidation with Tenant, or to any entity
which acquires substantially all of the stock or assets of Tenant as a going
concern (hereinafter each a "PERMITTED TRANSFER"). For purposes of the
preceding sentence, an "AFFILIATE" of Tenant shall mean any entity in which
Tenant owns at least a fifty percent (50%) equity interest, any entity which
owns at least a fifty percent (50%) equity interest in Tenant, and/or any
entity which is related to Tenant by a chain of ownership interests involving
at least a fifty percent (50%) equity interest at each level in the chain.
Landlord shall have no right to terminate this Lease in connection with, and
shall have no right to any sums or other economic consideration resulting
from, any Permitted Transfer. Except as expressly set forth in this Section
13.1, however, the provisions of Section 13.2 shall remain applicable to any
Permitted Transfer and the transferee under such Permitted Transfer shall be
and remain subject to all of the terms and provisions of this Lease.
Notwithstanding any other provision in this Lease, any transferee under a
Permitted Transfer shall be entitled to exercise the option to extend the
term of this Lease as set forth in Section 2.6 above and the right of first
offer as set forth in Section 1.3 above.
13.2 RIGHTS OF LANDLORD.
(a) Consent by Landlord to one or more assignments of this
Lease, or to one or more sublettings of the Building or any portion thereof,
or collection of rent by Landlord from any assignee or sublessee, shall not
operate to exhaust Landlord's rights under this Article 13, nor constitute
consent to any subsequent assignment or subletting. No assignment of Tenant's
interest in this Lease and no sublease shall relieve Tenant of its
obligations hereunder, notwithstanding any waiver or extension of time
granted by Landlord to any assignee or sublessee, or the failure of Landlord
to assert its rights against any assignee or sublessee, and regardless of
whether Landlord's consent thereto is given or required to be given
hereunder. In the event of a default by any assignee, sublessee or other
successor of Tenant in the performance of any of the terms or obligations of
Tenant under this Lease, Landlord may proceed directly against Tenant without
the necessity of exhausting remedies against any such assignee, sublessee or
other successor. In addition, Tenant immediately and irrevocably assigns to
Landlord, as security for Tenant's obligations under this Lease, all rent
from any subletting of all or a part of the Building as permitted under this
Lease, and Landlord, as Tenant's assignee and as attorney-in-fact for Tenant,
or any receiver for Tenant appointed on Landlord's application, may collect
such rent and apply it toward Tenant's obligations under this Lease; except
that, until the occurrence of an act of default by Tenant, Tenant shall have
the right to collect such rent and to retain all sublease profits (subject to
the provisions of Section 13.2(c), below).
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(b) Upon any assignment of Tenant's interest in this Lease
for which Landlord's consent is required under Section 13.1 hereof, Tenant
shall pay to Landlord, within ten (10) days after receipt thereof by Tenant
from time to time, [***] of all cash sums and other economic considerations
received by Tenant in connection with or as a result of such assignment,
after first deducting therefrom (i) any costs incurred by Tenant for
leasehold improvements (including, but not limited to, third-party
architectural and space planning costs) in the Building in connection with
such assignment, amortized over the remaining term of this Lease, and (ii)
any reasonable real estate commissions and/or reasonable attorneys' fees
incurred by Tenant in connection with such assignment.
(c) Upon any sublease of all or any portion of the Building
for which Landlord's consent is required under Section 13.1 hereof, Tenant
shall pay to Landlord, within ten (10) days after receipt thereof by Tenant
from time to time, [***] of all cash sums and other economic considerations
received by Tenant in connection with or as a result of such sublease, after
first deducting therefrom (i) the minimum rental due hereunder for the
corresponding period, prorated (on the basis of the average per-square-foot
cost paid by Tenant for the entire Building for the applicable period under
this Lease) to reflect the size of the subleased portion of the Building,
(ii) any costs incurred by Tenant for leasehold improvements in the subleased
portion of the Building (including, but not limited to, third-party
architectural and space planning costs) for the specific benefit of the
sublessee in connection with such sublease, amortized over the remaining term
of this Lease, and (iii) any reasonable real estate commissions and/or
reasonable attorneys' fees incurred by Tenant in connection with such
sublease, amortized over the term of such sublease.
14. RIGHT OF ENTRY AND QUIET ENJOYMENT
14.1 RIGHT OF ENTRY. Landlord and its authorized representatives
shall have the right to enter the Building at any time during the term of
this Lease during normal business hours and upon not less than twenty-four
(24) hours prior notice, except in the case of emergency (in which event no
notice shall be required and entry may be made at any time), for the purpose
of inspecting and determining the condition of the Building or for any other
proper purpose including, without limitation, to make repairs, replacements
or improvements which Landlord may deem necessary, to show the Building to
prospective purchasers, to show the Building to prospective tenants (but only
during the final year of the term of this Lease), and to post notices of
nonresponsibility. Landlord shall not be liable for inconvenience, annoyance,
disturbance, loss of business, quiet enjoyment or other damage or loss to
Tenant by reason of making any repairs or performing any work upon the
Building or the Property or by reason of erecting or maintaining any
protective barricades in connection with any such work, and the obligations
of Tenant under this Lease shall not thereby be affected in any manner
whatsoever, PROVIDED, however, Landlord shall use reasonable efforts to
minimize the inconvenience to Tenant's normal business operations caused
thereby.
14.2 QUIET ENJOYMENT. Landlord covenants that Tenant, upon paying
the rent and performing its obligations hereunder and subject to all the
terms and conditions of this Lease, shall peacefully and quietly have, hold
and enjoy the Building and the Property throughout the term of this Lease, or
until this Lease is terminated as provided by this Lease.
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[***] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.
15. CASUALTY AND TAKING
15.1 DAMAGE OR DESTRUCTION.
(a) If the Building, or the Common Areas of the Property
necessary for Tenant's use and occupancy of the Building, are damaged or
destroyed in whole or in part under circumstances in which (i) repair and
restoration is permitted under applicable governmental laws, regulations and
building codes then in effect and (ii) repair and restoration reasonably can
be completed within a period of one (1) year following the date of the
occurrence (or, in the case of an occurrence during the last year of the term
of this Lease, within a period of sixty (60) days following the date of the
occurrence, PROVIDED that the provisions of this parenthetical shall not
apply if, within ten (10) days after receipt of a termination notice from
Landlord based on an occurrence during the last year of the term of this
Lease which cannot be repaired within 60 days, Tenant properly exercises a
valid renewal right (if any then remains) under Section 2.6 hereof, and
PROVIDED FURTHER, that no such attempted exercise of a renewal right by
Tenant shall be sufficient to defeat Landlord's termination notice if the
applicable damage or destruction cannot reasonably be expected to be repaired
within one year), then Landlord, as to the Common Areas of the Property and
the Building Shell, and Tenant, as to the Tenant Improvements constructed by
Tenant, shall commence and complete, with all due diligence and as promptly
as is reasonably practicable under the conditions then existing, all such
repair and restoration as may be required to return the affected portions of
the Property to a condition comparable to that existing immediately prior to
the occurrence. In the event of damage or destruction the repair of which is
not permitted under applicable governmental laws, regulations and building
codes then in effect, if such damage or destruction (despite being corrected
to the extent then permitted under applicable governmental laws, regulations
and building codes) would still materially impair Tenant's ability to conduct
its business in the Building, then either party may terminate this Lease as
of the date of the occurrence by giving written notice to the other within
thirty (30) days after the date of the occurrence; if neither party timely
elects such termination, or if such damage or destruction does not materially
impair Tenant's ability to conduct its business in the Building, then this
Lease shall continue in full force and effect, except that there shall be an
equitable adjustment in monthly minimum rental and of Tenant's Operating Cost
Share of Operating Expenses, based upon the extent to which Tenant's ability
to conduct its business in the Building is impaired, and Landlord and Tenant
respectively shall restore the Common Areas and Building Shell and the Tenant
Improvements to a complete architectural whole and to a functional condition.
In the event of damage or destruction which cannot reasonably be repaired
within one (1) year following the date of the occurrence (or, in the case of
an occurrence during the last year of the term of this Lease, within a period
of sixty (60) days following the date of the occurrence, subject to the
provisos set forth in the parallel provision of the first sentence of this
paragraph), then either Landlord or Tenant, at its election, may terminate
this Lease as of the date of the occurrence by giving written notice to the
other within thirty (30) days after the date of the occurrence; if neither
party timely elects such termination, then this Lease shall continue in full
force and effect and Landlord and Tenant shall each repair and restore
applicable portions of the Property in accordance with the first sentence of
this Section 15.1(a).
(b) The respective obligations of Landlord and Tenant pursuant
to Section 15.1(a) are subject to the following limitations:
(i) If the occurrence results from a peril which
is required to be insured pursuant to Section 12.1(c) and (d) above, the
obligations of either party shall not exceed the amount of insurance proceeds
received from insurers (or, in the case of any failure to maintain required
insurance, proceeds that reasonably would have been available if the required
insurance had been maintained) by reason of such occurrence, plus the amount
of the party's permitted deductible (PROVIDED that each party shall be
obligated to use its best efforts to recover any available proceeds from the
insurance which it is required to maintain pursuant to the provisions of
Section 12.1(c) or (d), as applicable), and, if such proceeds (including, in
the case of a failure to maintain required insurance, any proceeds that
reasonably would have been available) are insufficient, either party may
terminate the Lease unless the other party promptly elects and agrees, in
writing, to contribute the amount of the shortfall; and
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(ii) If the occurrence results from a peril which
is not required to be insured pursuant to Section 12.1(c) and (d) above and
is not actually insured, Landlord shall be required to repair and restore the
Building Shell and Common Areas to the extent necessary for Tenant's
continued use and occupancy of the Building, and Tenant shall be required to
repair and restore the Tenant Improvements to the extent necessary for
Tenant's continued use and occupancy of the Building, PROVIDED that each
party's obligation to repair and restore shall not exceed an amount equal to
twenty percent (20%) of the replacement cost of the Building Shell and Common
Area improvements, as to Landlord, or twenty percent (20%) of the replacement
cost of the Tenant Improvements, as to Tenant; if the replacement cost as to
either party exceeds such amount, then the party whose limit has been
exceeded may terminate this Lease unless the other party promptly elects and
agrees, in writing, to contribute the amount of the shortfall.
(c) If this Lease is terminated pursuant to the foregoing
provisions of this Section 15.1 following an occurrence which is a peril
actually insured or required to be insured against pursuant to Section
12.1(c) and (d), Landlord and Tenant agree (and any Lender shall be asked to
agree) that such insurance proceeds shall be allocated between Landlord and
Tenant in a manner which fairly and reasonably reflects their respective
ownership rights under this Lease, as of the termination or expiration of the
term of this Lease, with respect to the improvements, fixtures, equipment and
other items to which such insurance proceeds are attributable.
(d) From and after the date of an occurrence resulting in
damage to or destruction of the Building or of the Common Areas necessary for
Tenant's use and occupancy of the Building, and continuing until repair and
restoration thereof are completed, there shall be an equitable abatement of
minimum rental and of Tenant's Operating Cost Share of Operating Expenses
based upon the degree to which Tenant's ability to conduct its business in
the Building is impaired.
15.2 CONDEMNATION.
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(a) If during the term of this Lease the Building, Property
or Improvements, or any substantial part of any of them, is taken by eminent
domain or by reason of any public improvement or condemnation proceeding, or
in any manner by exercise of the right of eminent domain (including any
transfer in avoidance of an exercise of the power of eminent domain), or
receives irreparable damage by reason of anything lawfully done under color
of public or other authority, then (i) this Lease shall terminate as to the
entire Building at Landlord's election by written notice given to Tenant
within thirty (30) days after the taking has occurred, and (ii) this Lease
shall terminate as to the entire Building at Tenant's election, by written
notice given to Landlord within thirty (30) days after the nature and extent
of the taking have been finally determined, if the portion of the Building
taken is of such extent and nature as substantially to handicap, impede or
permanently impair Tenant's use of the balance of the Building. If Tenant
elects to terminate this Lease, Tenant shall also notify Landlord of the date
of termination, which date shall not be earlier than thirty (30) days nor
later than ninety (90) days after Tenant has notified Landlord of Tenant's
election to terminate, except that this Lease shall terminate on the date of
taking if such date falls on any date before the date of termination
designated by Tenant. If neither party elects to terminate this Lease as
hereinabove provided, this Lease shall continue in full force and effect
(except that there shall be an equitable abatement of minimum rental and of
Tenant's Operating Cost Share of Operating Expenses based upon the degree to
which Tenant's ability to conduct its business in the Building is impaired),
Landlord shall restore the Building Shell and Common Area improvements to a
complete architectural whole and a functional condition and as nearly as
reasonably possible to the condition existing before the taking, and Tenant
shall restore the Tenant Improvements and Tenant's other alterations,
additions and improvements to a complete architectural whole and a functional
condition and as nearly as reasonably possible to the condition existing
before the taking. In connection with any such restoration, each party shall
use its respective best efforts (including, without limitation, any necessary
negotiation or intercession with its respective lender, if any) to ensure
that any severance damages or other condemnation awards intended to provide
compensation for rebuilding or restoration costs are promptly collected and
made available to Landlord and Tenant in portions reasonably corresponding to
the cost and scope of their respective restoration obligations, subject only
to such payment controls as either party or its lender may reasonably require
in order to ensure the proper application of such proceeds toward the
restoration of the Improvements. Each party waives the provisions of Code of
Civil Procedure Section 1265.130, allowing either party to petition the
Superior Court to terminate this Lease in the event of a partial condemnation
of the Building or Property.
(b) The respective obligations of Landlord and Tenant
pursuant to Section 15.2(a) are subject to the following limitations:
(i) Each party's obligation to repair and restore
shall not exceed, net of any condemnation awards or other proceeds available
for and allocable to such restoration as contemplated in Section 15.2(a), an
amount equal to twenty percent (20%) of the replacement cost of the Building
Shell and Common Area improvements, as to Landlord, or twenty percent (20%)
of the replacement cost of the Tenant Improvements, as to Tenant; if the
replacement cost as to either party exceeds such amount, then the party whose
limit has been exceeded may terminate this Lease unless the other party
promptly elects and agrees, in writing, to contribute the amount of the
shortfall; and
(ii) If this Lease is terminated pursuant to the
foregoing provisions of this Section 15.2, or if this Lease remains in effect
but any condemnation awards or other proceeds become available as
compensation for the loss or destruction of any of the Improvements, then
Landlord and Tenant agree (and any Lender shall be asked to agree) that such
proceeds shall be allocated between Landlord and Tenant, respectively, in the
respective proportions in which Landlord and Tenant would have shared, under
Section 15.1(c), the proceeds of any insurance proceeds following loss or
destruction of the applicable Improvements by an insured casualty.
15.3 RESERVATION OF COMPENSATION. Landlord reserves, and Tenant
waives and assigns to Landlord, all rights to any award or compensation for
damage to the Improvements, the Property and the leasehold estate created
hereby, accruing by reason of any taking in any public
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improvement, condemnation or eminent domain proceeding or in any other manner
by exercise of the right of eminent domain or of anything lawfully done by
public authority, except that (a) Tenant shall be entitled to any and all
compensation or damages paid for or on account of Tenant's moving expenses,
trade fixtures and equipment and any leasehold improvements installed by
Tenant in the Building at its own sole expense, but only to the extent Tenant
would have been entitled to remove such items at the expiration of the term
of this Lease and then only to the extent of the then remaining unamortized
value of such improvements computed on a straight-line basis over the term of
this Lease, and (b) any condemnation awards or proceeds described in Section
15.2(b)(ii) shall be allocated and disbursed in accordance with the
provisions of Section 15.2(b)(ii), notwithstanding any contrary provisions of
this Section 15.3.
15.4 RESTORATION OF IMPROVEMENTS. In connection with any repair or
restoration of Improvements by either party following a casualty or taking as
hereinabove set forth, the party responsible for such repair or restoration
shall, to the extent possible, return such Improvements to a condition
substantially equal to that which existed immediately prior to the casualty
or taking. To the extent such party wishes to make material modifications to
such Improvements, such modifications shall be subject to the prior written
approval of the other party (not to be unreasonably withheld or delayed),
except that no such approval shall be required for modifications that are
required by applicable governmental authorities as a condition of the repair
or restoration, unless such required modifications would impair or impede
Tenant's conduct of its business in the Building (in which case any such
modifications in Landlord's work shall require Tenant's consent, not
unreasonably withheld or delayed) or would materially and adversely affect
the exterior appearance, the structural integrity or the mechanical or other
operating systems of the Building (in which case any such modifications in
Tenant's work shall require Landlord's consent, not unreasonably withheld or
delayed).
16. DEFAULT
16.1 EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an event of default on the part of Tenant:
(a) ABANDONMENT. Abandonment of the Building. "ABANDONMENT"
is hereby defined to include, but is not limited to, any absence by Tenant
from the Building for fifteen (15) consecutive days or more while Tenant is
in default under any other provision of this Lease. Tenant waives any right
Tenant may have to notice under Section 1951.3 of the California Civil Code,
the terms of this subsection (a) being deemed such notice to Tenant as
required by said Section 1951.3;
(b) NONPAYMENT. Failure to pay, when due, any amount
payable to Landlord hereunder, such failure continuing for a period of five
(5) business days after written notice of such failure; PROVIDED, however,
that any such notice shall be in lieu of, and not in addition to, any notice
required under California Code of Civil Procedure Section 1161 ET SEQ., as
amended from time to time;
(c) OTHER OBLIGATIONS. Failure to perform any obligation,
agreement or covenant under this Lease other than those matters specified in
subsection (b) hereof, such failure continuing for fifteen (15) days after
written notice of such failure; PROVIDED, however, that if such failure is
curable in nature but cannot reasonably be cured within such 15-day period,
then Tenant shall not be in default if, and so long as, Tenant promptly (and
in all events within such 15-day period) commences such cure and thereafter
diligently pursues such cure to completion; and PROVIDED FURTHER, however,
that any such notice shall be in lieu of, and not in addition to, any notice
required under California Code of Civil Procedure Section 1161 ET SEQ., as
amended from time to time;
(d) GENERAL ASSIGNMENT. A general assignment by Tenant for
the benefit of creditors;
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(e) BANKRUPTCY. The filing of any voluntary petition in
bankruptcy by Tenant, or the filing of an involuntary petition by Tenant's
creditors, which involuntary petition remains undischarged for a period of
thirty (30) days. In the event that under applicable law the trustee in
bankruptcy or Tenant has the right to affirm this Lease and continue to
perform the obligations of Tenant hereunder, such trustee or Tenant shall, in
such time period as may be permitted by the bankruptcy court having
jurisdiction, cure all defaults of Tenant hereunder outstanding as of the
date of the affirmance of this Lease and provide to Landlord such adequate
assurances as may be necessary to ensure Landlord of the continued
performance of Tenant's obligations under this Lease. Specifically, but
without limiting the generality of the foregoing, such adequate assurances
must include assurances that the Building continues to be operated only for
the use permitted hereunder. The provisions hereof are to assure that the
basic understandings between Landlord and Tenant with respect to Tenant's use
of the Property and the benefits to Landlord therefrom are preserved,
consistent with the purpose and intent of applicable bankruptcy laws;
(f) RECEIVERSHIP. The employment of a receiver appointed by
court order to take possession of substantially all of Tenant's assets or the
Building, if such receivership remains undissolved for a period of thirty
(30) days;
(g) ATTACHMENT. The attachment, execution or other judicial
seizure of all or substantially all of Tenant's assets or the Building, if
such attachment or other seizure remains undismissed or undischarged for a
period of thirty (30) days after the levy thereof; or
(h) INSOLVENCY. The admission by Tenant in writing of its
inability to pay its debts as they become due, the filing by Tenant of a
petition seeking any reorganization or arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any present or
future statute, law or regulation, the filing by Tenant of an answer
admitting or failing timely to contest a material allegation of a petition
filed against Tenant in any such proceeding or, if within thirty (30) days
after the commencement of any proceeding against Tenant seeking any
reorganization or arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any present or future statute, law or
regulation, such proceeding shall not have been dismissed.
16.2 REMEDIES UPON TENANT'S DEFAULT.
(a) Upon the occurrence of any event of default described
in Section 16.1 hereof, Landlord, in addition to and without prejudice to any
other rights or remedies it may have, shall have the immediate right to
re-enter the Building or any part thereof and repossess the same, expelling
and removing therefrom all persons and property (which property may be stored
in a public warehouse or elsewhere at the cost and risk of and for the
account of Tenant), using such force as may be necessary to do so (as to
which Tenant hereby waives any claim for loss or damage that may thereby
occur). In addition to or in lieu of such re-entry, and without prejudice to
any other rights or remedies it may have, Landlord shall have the right
either (i) to terminate this Lease and recover from Tenant all damages
incurred by Landlord as a result of Tenant's default, as hereinafter
provided, or (ii) to continue this Lease in effect and recover rent and other
charges and amounts as they become due.
(b) Even if Tenant has breached this Lease and abandoned
the Building, this Lease shall continue in effect for so long as Landlord
does not terminate Tenant's right to possession under subsection (a) hereof
and Landlord may enforce all of its rights and remedies under this Lease,
including the right to recover rent as it becomes due, and Landlord, without
terminating this Lease, may exercise all of the rights and remedies of a
lessor under California Civil Code Section 1951.4 (lessor may continue lease
in effect after 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), or any successor Code section. Acts of maintenance,
preservation or efforts to relet the Building or the appointment of a
receiver upon application of Landlord to protect Landlord's interests under
this Lease shall not constitute a termination of Tenant's right to possession.
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(c) If Landlord terminates this Lease pursuant to this
Section 16.2, Landlord shall have all of the rights and remedies of a
landlord provided by Section 1951.2 of the Civil Code of the State of
California, or any successor Code section, which remedies include Landlord's
right to recover from Tenant (i) the worth at the time of award of the unpaid
rent and additional rent which had been earned at the time of termination,
(ii) the worth at the time of award of the amount by which the unpaid rent
and additional rent which would have been earned after termination until the
time of award exceeds the amount of such rental loss that Tenant proves could
have been reasonably avoided, (iii) the worth at the time of award of the
amount by which the unpaid rent and additional rent for the balance of the
term after the time of award exceeds the amount of such rental loss that
Tenant proves could be reasonably avoided, and (iv) any other amount
necessary to compensate Landlord for all the detriment proximately caused by
Tenant's failure to perform its obligations under this Lease or which in the
ordinary course of things would be likely to result therefrom, including, but
not limited to, the cost of recovering possession of the Building, expenses
of reletting, including necessary repair, renovation and alteration of the
Building, reasonable attorneys' fees, and other reasonable costs. The "WORTH
AT THE TIME OF AWARD" of the amounts referred to in clauses (i) and (ii)
above shall be computed by allowing interest at ten percent (10%) per annum
from the date such amounts accrued to Landlord. The "WORTH AT THE TIME OF
AWARD" of the amounts referred to in clause (iii) above shall be computed by
discounting such amount at one percentage point above the discount rate of
the Federal Reserve Bank of San Francisco at the time of award.
16.3 REMEDIES CUMULATIVE. All rights, privileges and elections or
remedies of Landlord contained in this Article 16 are cumulative and not
alternative to the extent permitted by law and except as otherwise provided
herein.
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17. SUBORDINATION, ATTORNMENT AND SALE
17.1 SUBORDINATION TO MORTGAGE. This Lease, and any sublease entered
into by Tenant under the provisions of this Lease, shall be subject and
subordinate to any ground lease, mortgage, deed of trust, sale/leaseback
transaction or any other hypothecation for security now or hereafter placed
upon the Building, the Property, the Center, or any of them, and the rights
of any assignee of Landlord or of any ground lessor, mortgagee, trustee,
beneficiary or leaseback lessor under any of the foregoing, and to any and
all advances made on the security thereof and to all renewals, modifications,
consolidations, replacements and extensions thereof; PROVIDED, however, that
such subordination in the case of any future ground lease, mortgage, deed of
trust, sale/leaseback transaction or any other hypothecation for security
placed upon the Building, the Property, the Center, or any of them shall be
conditioned on Tenant's receipt from the ground lessor, mortgagee, trustee,
beneficiary or leaseback lessor of a Non-Disturbance Agreement in a form
reasonably acceptable to Tenant (i) confirming that so long as Tenant is not
in material default hereunder beyond any applicable cure period (for which
purpose the occurrence of any event of default under Section 16.1 hereof
shall be deemed to be "material"), Tenant's rights hereunder shall not be
disturbed by such person or entity and (ii) agreeing that the benefit of such
Non-Disturbance Agreement shall be transferable to any transferee under a
Permitted Transfer and to any other assignee or subtenant that is acceptable
to the ground lessor, mortgagee, trustee, beneficiary or leaseback lessor at
the time of transfer. If any mortgagee, trustee, beneficiary, ground lessor,
sale/leaseback lessor or assignee elects to have this Lease be an encumbrance
upon the Property prior to the lien of its mortgage, deed of trust, ground
lease or leaseback lease or other security arrangement and gives notice
thereof to Tenant, this Lease shall be deemed prior thereto, whether this
Lease is dated prior or subsequent to the date thereof or the date of
recording thereof. Tenant, and any sublessee, shall execute such documents as
may reasonably be requested by any mortgagee, trustee, beneficiary, ground
lessor, sale/leaseback lessor or assignee to evidence the subordination
herein set forth, subject to the conditions set forth above, or to make this
Lease prior to the lien of any mortgage, deed of trust, ground lease,
leaseback lease or other security arrangement, as the case may be. Upon any
default by Landlord in the performance of its obligations under any mortgage,
deed of trust, ground lease, leaseback lease or assignment, Tenant (and any
sublessee) shall, notwithstanding any subordination hereunder, attorn to the
mortgagee, trustee, beneficiary, ground lessor, leaseback lessor or assignee
thereunder upon demand and become the tenant of the successor in interest to
Landlord, at the option of such successor in interest, and shall execute and
deliver any instrument or instruments confirming the attornment herein
provided for. Promptly following execution of this Lease, Landlord shall use
commercially reasonable efforts to obtain a Non-Disturbance Agreement
comparable to that described above in this Section 17.1 from any mortgagee,
trustee, beneficiary, ground lessor or leaseback lessor holding an interest
in the Property on the date of this Lease (but Landlord hereby advises Tenant
that in fact there is no mortgagee, trustee, beneficiary, ground lessor or
leaseback lessor holding an interest in the Property on the date of this
Lease).
17.2 SALE OF LANDLORD'S INTEREST. Upon sale, transfer or assignment
of Landlord's entire interest in the Building and the Property, Landlord
shall be relieved of its obligations hereunder with respect to liabilities
accruing from and after the date of such sale, transfer or assignment.
17.3 ESTOPPEL CERTIFICATES. Tenant or Landlord (the "RESPONDING
PARTY"), as applicable, shall at any time and from time to time, within ten
(10) business days after written request by the other party (the "REQUESTING
PARTY"), execute, acknowledge and deliver to the requesting party a
certificate in writing stating: (i) that this Lease is unmodified and in full
force and effect, or if there have been any modifications, that this Lease is
in full force and effect as modified and stating the date and the nature of
each modification; (ii) the date to which rental and all other sums payable
hereunder have been paid; (iii) that the requesting party is not in default
in the performance of any of its obligations under this Lease, that the
certifying party has given no notice of default to the requesting party and
that no event has occurred which, but for the expiration of the applicable
time period, would constitute an event of default hereunder, or if the
responding party alleges that any such default, notice or event has occurred,
specifying the same in reasonable detail; and (iv) such other matters as may
reasonably be requested by the requesting party or by any institutional
lender, mortgagee, trustee, beneficiary, ground lessor, sale/leaseback
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lessor or prospective purchaser of the Property, or prospective sublessee or
assignee of this Lease. Any such certificate provided under this Section 17.3
may be relied upon by any lender, mortgagee, trustee, beneficiary, assignee
or successor in interest to the requesting party, by any prospective
purchaser, by any purchaser on foreclosure or sale, by any grantee under a
deed in lieu of foreclosure of any mortgage or deed of trust on the Property,
by any subtenant or assignee, or by any other third party. Failure to execute
and return within the required time any estoppel certificate requested
hereunder, if such failure continues for five (5) days after a second written
request by the requesting party for such estoppel certificate, shall be
deemed to be an admission of the truth of the matters set forth in the form
of certificate submitted to the responding party for execution.
17.4 SUBORDINATION TO CC&R'S. This Lease, and any permitted sublease
entered into by Tenant under the provisions of this Lease, and the interests
in real property conveyed hereby and thereby shall be subject and subordinate
(a) to any declarations of covenants, conditions and restrictions or other
recorded restrictions affecting the Property or the Center from time to time,
PROVIDED that the terms of such declarations or restrictions are reasonable
(or, to the extent they are not reasonable, are mandated by applicable law),
do not materially impair Tenant's ability to conduct the uses permitted
hereunder on the Property, and do not discriminate against Tenant relative to
other similarly situated tenants occupying portions of the Center, (b) to the
Declaration of Covenants, Conditions and Restrictions and Reciprocal
Easements for Shearwater Project dated January 21, 1998 and recorded on
January 22, 1998 as Instrument No. 98-008277, Official Records of San Mateo
County, as amended from time to time (the "SHEARWATER DECLARATION"), the
provisions of which Shearwater Declaration are an integral part of this
Lease, and (c) to the Covenant and Environmental Restriction dated as of
January 26, 1998 and recorded on February 3, 1998 as Instrument No.
98-013813, Official Records of San Mateo County, as amended from time to time
(the "ENVIRONMENTAL RESTRICTION"), the provisions of which Environmental
Restriction are incorporated herein by this reference. Tenant agrees to
execute, upon request by Landlord, any documents reasonably required from
time to time to evidence the foregoing subordination.
17.5 MORTGAGEE PROTECTION. If, following a default by Landlord under
any mortgage, deed of trust, ground lease, leaseback lease or other security
arrangement covering the Building, the Property, the Center, or any of them,
the Building, the Property and/or the Center, as applicable, is acquired by
the mortgagee, beneficiary, master lessor or other secured party, or by any
other successor owner, pursuant to a foreclosure, trustee's sale, sheriff's
sale, lease termination or other similar procedure (or deed in lieu thereof),
then any such person or entity so acquiring the Building, the Property and/or
the Center shall not be:
(a) liable for any act or omission of a prior landlord or
owner of the Property (including, but not limited to, Landlord);
(b) subject to any offsets or defenses that Tenant may have
against any prior landlord or owner of the Property and/or the Center
(including, but not limited to, Landlord);
(c) bound by any rent or additional rent that Tenant may
have paid in advance to any prior landlord or owner of the Property and/or
the Center (including, but not limited to, Landlord) for a period in excess
of one month, or by any security deposit, cleaning deposit or other prepaid
charge that Tenant may have paid in advance to any prior landlord or owner
(including, but not limited to, Landlord), except to the extent such deposit
or prepaid amount has been expressly turned over to or credited to the
successor owner thus acquiring the Property and/or the Center, as applicable;
(d) liable for any warranties or representations of any
nature whatsoever, whether pursuant to this Lease or otherwise, by any prior
landlord or owner of the Property and/or the Center (including, but not
limited to, Landlord) with respect to the use, construction, zoning,
compliance with laws, title, habitability, fitness for purpose or possession,
or physical condition (including, without limitation, environmental matters)
of the Property, the Building or the Center; or
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(e) liable to Tenant in any amount beyond the interest of
such mortgagee, beneficiary, master lessor or other secured party or
successor owner in the Property and the Center as they exist from time to
time, it being the intent of this provision that Tenant shall look solely to
the interest of any such mortgagee, beneficiary, master lessor or other
secured party or successor owner in the Property and Center for the payment
and discharge of the landlord's obligations under this Lease and that such
mortgagee, beneficiary, master lessor or other secured party or successor
owner shall have no separate personal liability for any such obligations.
18. SECURITY
18.1 DEPOSIT.
(a) Within ten (10) days after mutual execution of this
Lease, Tenant shall deposit with Landlord the sum of Seven Hundred
Thirty-Eight Thousand and No/100 Dollars ($738,000.00), which sum (the
"SECURITY DEPOSIT") shall be held by Landlord as security for the faithful
performance of all of the terms, covenants, and conditions of this Lease to
be kept and performed by Tenant during the term hereof. If Tenant defaults
(beyond any applicable cure period) with respect to any provision of this
Lease, including, without limitation, the provisions relating to the payment
of rental and other sums due hereunder, Landlord shall have the right, but
shall not be required, to use, apply or retain all or any part of the
Security Deposit for the payment of rental or any other amount which Landlord
may spend or become obligated to spend by reason of Tenant's default or to
compensate Landlord for any other loss or damage which Landlord may suffer by
reason of Tenant's default. If any portion of the Security Deposit is so used
or applied, Tenant shall, within ten (10) days after written demand therefor,
deposit cash with Landlord in an amount sufficient to restore the Security
Deposit to its original amount and Tenant's failure to do so shall be a
material breach of this Lease. Landlord shall not be required to keep any
deposit under this Section separate from Landlord's general funds, and Tenant
shall not be entitled to interest thereon. If Tenant fully and faithfully
performs every provision of this Lease to be performed by it, the Security
Deposit, or any balance thereof, shall be returned to Tenant or, at
Landlord's option, to the last assignee of Tenant's interest hereunder, at
the expiration of the term of this Lease and after Tenant has vacated the
Property. In the event of termination of Landlord's interest in this Lease,
Landlord shall transfer all deposits then held by Landlord under this Section
to Landlord's successor in interest, whereupon Tenant agrees to release
Landlord from all liability for the return of such deposit or the accounting
thereof.
(b) As an alternative to the cash Security Deposit
described in Section 18.1(a), Tenant may instead deliver to Landlord, within
ten (10) days after mutual execution of this Lease, an irrevocable standby
letter of credit (the "LETTER OF CREDIT") issued in favor of Landlord by a
federally insured commercial bank or trust company approved in writing by
Landlord (which approval shall not be unreasonably withheld), in form and
substance satisfactory to Landlord, to be held by Landlord as security for
the faithful performance of all the obligations of Tenant under this Lease,
subject to the following terms and conditions:
(i) The amount of the Letter of Credit shall be at
least Seven Hundred Thirty-Eight Thousand and No/100 Dollars ($738,000.00),
and Tenant shall maintain the Letter of Credit in that amount in full force
and effect throughout the term of this Lease (including any extensions
thereof) and until thirty (30) days after the expiration of the term of this
Lease, unless Tenant elects at any time to replace the Letter of Credit with
a full cash Security Deposit in compliance with Section 18.1(a). The Letter
of Credit may be for an initial one-year term, with automatic renewal
provisions, provided that Landlord shall be given at least thirty (30) days
prior written notice if the Letter of Credit will not be renewed as of any
otherwise applicable renewal date and shall be entitled to draw against the
expiring Letter of Credit if a replacement Letter of Credit is not furnished
to Landlord at least twenty (20) days prior to the scheduled expiration date,
as provided in Section 18.2(b)(iii)(A) below.
(ii) Landlord shall be entitled (but shall not be
required) to draw against the Letter of Credit and receive and retain the
proceeds thereof upon any default (beyond any applicable cure period) by
Tenant in the payment of any rent or other amounts required to be paid
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by Tenant under this Lease, or upon the occurrence of any other event of
default (beyond any applicable cure period) under this Lease. The amount of
the draw shall not exceed the amount of the payments (if any) as to which
Tenant is then in default and/or the amount reasonably necessary to cure any
non-monetary events of default by Tenant, and shall be applied by Landlord to
the cure of the applicable default(s). Following any partial draw under this
paragraph (ii), if Tenant fully cures all outstanding defaults and provides
Landlord with a new Letter of Credit in the full required amount under this
Section 18.1, Landlord shall surrender and return to Tenant, within ten (10)
days after Tenant's satisfaction of the foregoing conditions, the Letter of
Credit under which the partial draw was made, together with any proceeds not
already applied by Landlord toward the cure of the applicable default(s).
(iii) Landlord shall also be entitled (but shall
not be required) to draw against the Letter of Credit in full and to receive
the entire proceeds thereof under either of the following circumstances:
(A) If the Letter of Credit will expire
as of a date prior to the thirty (30) days after the expiration of the term
of this Lease and Tenant fails to provide to Landlord an extension or
replacement of such Letter of Credit, in at least the minimum amount required
under this Section 18.1(b), at least twenty (20) days prior to the scheduled
expiration date of the Letter of Credit; or
(B) If, as a result of a draw against the
Letter of Credit by Landlord or for any other reason, the amount of the
Letter of Credit falls below the minimum amount required to be maintained
from time to time pursuant to this Section 18.1(b) and Tenant has failed to
cause the Letter of Credit to be restored to at least the minimum required
amount within ten (10) days after written demand by Landlord.
(iv) If Landlord draws against the Letter of
Credit in any of the circumstances described in subparagraph (iii) above,
Landlord shall use, apply and/or retain all or any part of the amount drawn
for the cure of any then existing defaults under this Lease. Any amount drawn
that is not immediately so used or applied by Landlord shall be retained by
Landlord as a cash security deposit, subject to and in accordance with the
provisions of Section 18.1(a); PROVIDED, however, if Tenant fully cures all
of the outstanding defaults described in subparagraph (iii) above and
provides Landlord with a new Letter of Credit in the full amount required
under this Section 18.1, Landlord shall surrender and return to Tenant,
within ten (10) days after Tenant's satisfaction of the foregoing conditions,
any proceeds drawn by Landlord and not already applied by Landlord toward the
cure of the applicable default(s).
(c) Any actual or purported withdrawal, rescission,
termination or revocation of the Letter of Credit by the issuer thereof prior
to the expiration of the term of this Lease (except when replaced prior to
the effectiveness of such withdrawal, rescission, termination or revocation
by a replacement Letter of Credit as contemplated in Section 18.1(b)(iii)(A)
hereof) shall be a material breach of this Lease.
19. MISCELLANEOUS
19.1 NOTICES. All notices, consents, waivers and other
communications which this Lease requires or permits either party to give to
the other shall be in writing and shall be deemed given when delivered
personally (including delivery by private same-day or overnight courier or
express delivery service) or by telecopier with mechanical confirmation of
transmission, effective upon personal delivery to or refusal of delivery by
the recipient (in the case of personal delivery by any of the means described
above) or upon telecopier transmission during normal business hours at the
recipient's office (in the case of telecopier transmission, with any
transmission outside of normal business hours being effective as of the
beginning of the first business day commencing after the time of actual
transmission) to the parties at their respective addresses as follows:
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To Tenant: (until Rent Commencement Date)
EOS Biotechnology, Inc.
000X Xxxxxxx Xxxxxxxxx
Xxxxx Xxx Xxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxx, VP & CFO
Telecopier: (000) 000-0000
(after Rent Commencement Date)
EOS Biotechnology, Inc.
0000 Xxxxxxxx Xxxxxxxxx
Xxxxx Xxx Xxxxxxxxx, XX 00000
Attn: Xxxx Xxxxxx, VP & CFO
Telecopier: (650) [TO BE DETERMINED]
with a copy to: Xxxxxxx & Xxxxxx
00 X. Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attn: Xxxxxxxx X. Xxxx, Esq.
Telecopier: (000) 000-0000
To Landlord: Slough BTC, LLC
00 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx
Telecopier: (000) 000-0000
with a copy to: Britannia Management Services, Inc.
0000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Telecopier: (000) 000-0000
and a copy to: Xxxxxx Xxxxx & Xxxx LLP
Embarcadero Center West
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, Xx.
Telecopier: (000) 000-0000
or to such other address as may be contained in a notice at least fifteen
(15) days prior to the address change from either party to the other given
pursuant to this Section. Rental payments and other sums required by this
Lease to be paid by Tenant shall be delivered to Landlord in care of
Britannia Management Services, Inc., 0000 Xxxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxx, XX 00000, or at such other address as Landlord may from time to time
specify in writing to Tenant, and shall be deemed to be paid only upon actual
receipt.
19.2 SUCCESSORS AND ASSIGNS. The obligations of this Lease shall run
with the land, and this Lease shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns, except
that the original Landlord named herein and each successive Landlord under
this Lease shall be liable only for obligations accruing during the period of
its ownership of the Property, and any liability for obligations accruing
after termination of such ownership shall terminate as of the date of such
termination of ownership and shall pass to the successor lessor.
19.3 NO WAIVER. The failure of Landlord to seek redress for
violation, or to insist upon the strict performance, of any covenant or
condition of this Lease shall not be deemed a waiver of such violation, or
prevent a subsequent act which would originally have constituted a violation
from having all the force and effect of an original violation.
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19.4 SEVERABILITY. If any provision of this Lease or the application
thereof is held to be invalid or unenforceable, the remainder of this Lease
or the application of such provision to persons or circumstances other than
those as to which it is invalid or unenforceable shall not be affected
thereby, and each of the provisions of this Lease shall be valid and
enforceable, unless enforcement of this Lease as so invalidated would be
unreasonable or grossly inequitable under all the circumstances or would
materially frustrate the purposes of this Lease.
19.5 LITIGATION BETWEEN PARTIES. In the event of any litigation or
other dispute resolution proceedings between the parties hereto arising out
of or in connection with this Lease, the prevailing party shall be reimbursed
for all reasonable costs, including, but not limited to, reasonable
accountants' fees and attorneys' fees, incurred in connection with such
proceedings (including, but not limited to, any appellate proceedings
relating thereto) or in connection with the enforcement of any judgment or
award rendered in such proceedings. "PREVAILING PARTY" within the meaning of
this Section shall include, without limitation, a party who dismisses an
action for recovery hereunder in exchange for payment of the sums allegedly
due, performance of covenants allegedly breached or consideration
substantially equal to the relief sought in the action.
19.6 SURRENDER. A voluntary or other surrender of this Lease by
Tenant, or a mutual termination thereof between Landlord and Tenant, shall
not result in a merger but shall, at the option of Landlord, operate either
as an assignment to Landlord of any and all existing subleases and
subtenancies, or a termination of all or any existing subleases and
subtenancies. This provision shall be contained in any and all assignments or
subleases made pursuant to this Lease.
19.7 INTERPRETATION. The provisions of this Lease shall be construed
as a whole, according to their common meaning, and not strictly for or
against Landlord or Tenant. The captions preceding the text of each Section
and subsection hereof are included only for convenience of reference and
shall be disregarded in the construction or interpretation of this Lease.
19.8 ENTIRE AGREEMENT. This written Lease, together with the
exhibits hereto, contains all the representations and the entire
understanding between the parties hereto with respect to the subject matter
hereof. Any prior correspondence, memoranda or agreements are replaced in
total by this Lease and the exhibits hereto. This Lease may be modified only
by an agreement in writing signed by each of the parties.
19.9 GOVERNING LAW. This Lease and all exhibits hereto shall be
construed and interpreted in accordance with and be governed by all the
provisions of the laws of the State of California.
19.10 NO PARTNERSHIP. The relationship between Landlord and Tenant
is solely that of a lessor and lessee. Nothing contained in this Lease shall
be construed as creating any type or manner of partnership, joint venture or
joint enterprise with or between Landlord and Tenant.
19.11 FINANCIAL INFORMATION. From time to time Tenant shall promptly
provide directly to prospective lenders and purchasers of the Property and/or
Center designated by Landlord such financial information pertaining to the
financial status of Tenant as Landlord may reasonably request; PROVIDED,
Tenant shall be permitted to provide such financial information in a manner
which Tenant deems reasonably necessary to protect the confidentiality of
such information. In addition, from time to time, Tenant shall provide
Landlord with such financial information pertaining to the financial status
of Tenant as Landlord may reasonably request. Landlord agrees that all
financial information supplied to Landlord by Tenant shall be treated as
confidential material, and shall not be disseminated to any party or entity
(including any entity affiliated with Landlord) without Tenant's prior
written consent, except that Landlord shall be entitled to provide such
information, subject to reasonable precautions to protect the confidential
nature thereof, (i) to Landlord's partners and professional advisors, solely
to use in connection with Landlord's execution and enforcement of this Lease,
and (ii) to prospective lenders and/or purchasers of the Property and/or
Center, solely for use in connection with their bona fide consideration of a
proposed financing or purchase of the Property and/or Center, PROVIDED that
such prospective lenders and/or purchasers are not then engaged in businesses
directly
-39-
competitive with the business then being conducted by Tenant. For purposes of
this Section, without limiting the generality of the obligations provided
herein, it shall be deemed reasonable for Landlord to request copies of
Tenant's most recent audited annual financial statements, or, if audited
statements have not been prepared, unaudited financial statements for
Tenant's most recent fiscal year, accompanied by a certificate of Tenant's
chief financial officer that such financial statements fairly present
Tenant's financial condition as of the date(s) indicated. Notwithstanding any
other provisions of this Section 19.11, during any period in which Tenant has
outstanding a class of publicly traded securities and is filing with the
Securities and Exchange Commission, on a regular basis, Forms 10Q and 10K and
any other periodic filings required under the Securities Exchange Act of
1934, as amended, it shall constitute sufficient compliance under this
Section 19.11 for Tenant to furnish Landlord with copies of such periodic
filings substantially concurrently with the filing thereof with the
Securities and Exchange Commission.
Landlord and Tenant recognize the need of Tenant to
maintain the confidentiality of information regarding its financial status
and the need of Landlord to be informed of, and to provide to prospective
lenders and purchasers of the Property and/or Center financial information
pertaining to, Tenant's financial status. Landlord and Tenant agree to
cooperate with each other in achieving these needs within the context of the
obligations set forth in this Section.
19.12 COSTS. If Tenant requests the consent of Landlord under any
provision of this Lease for any act that Tenant proposes to do hereunder,
including, without limitation, assignment of this Lease or subletting of the
Building or any part thereof, Tenant shall, as a condition to doing any such
act and the receipt of such consent, reimburse Landlord promptly for any and
all actual and reasonable costs and expenses incurred by Landlord in
connection therewith, including, without limitation, reasonable attorneys'
fees.
19.13 TIME. Time is of the essence of this Lease, and of every term
and condition hereof.
19.14 RULES AND REGULATIONS. Tenant shall observe, comply with and
obey, and shall cause its employees, agents and, to the best of Tenant's
ability, invitees to observe, comply with and obey such reasonable rules and
regulations as Landlord may promulgate from time to time for the safety,
care, cleanliness, order and use of the Improvements, the Property and the
Center.
19.15 BROKERS. Landlord agrees to pay a brokerage commission to
Tenant's broker, CB Xxxxxxx Xxxxx, in connection with the consummation of
this Lease in accordance with a separate written agreement (providing for a
commission of $6.00 per rentable square foot, payable 50% upon execution of
this Lease and 50% upon occupancy of the Building by Tenant). Each party
represents and warrants that no other broker participated in the consummation
of this Lease and agrees to indemnify, defend and hold the other party
harmless against any liability, cost or expense, including, without
limitation, reasonable attorneys' fees, arising out of any claims for
brokerage commissions or other similar compensation in connection with any
conversations, prior negotiations or other dealings by the indemnifying party
with any other broker.
19.16 MEMORANDUM OF LEASE. At any time during the term of this
Lease, either party, at its sole expense, shall be entitled to record a
memorandum of this Lease and, if either party so elects, both parties agree
to cooperate in the preparation, execution, acknowledgment and recordation of
such document in reasonable form.
19.17 CORPORATE AUTHORITY. The person signing this Lease on behalf
of Tenant warrants that he or she is fully authorized to do so and, by so
doing, to bind Tenant.
19.18 EXECUTION AND DELIVERY. This Lease may be executed in one or
more counterparts and by separate parties on separate counterparts, but each
such counterpart shall constitute an original and all such counterparts
together shall constitute one and the same instrument.
19.19 SURVIVAL. Without limiting survival provisions which would
otherwise be implied or construed under applicable law, the provisions of
Sections 2.5, 7.4, 9.2, 9.3, 9.4, 11.6, 12.6,
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19.5 and 19.20 hereof shall survive the termination of this Lease with
respect to matters occurring prior to the expiration of this Lease.
19.20 PARKING AND TRAFFIC.
(a) Landlord has advised Tenant that the approval of the
Britannia Oyster Point project by the City of South San Francisco was
conditioned upon, among other things, Landlord's development and
implementation of a Transportation Demand Management Plan (the "TDMP")
pursuant to which Landlord is required to undertake various measures to try
to reduce the volume of traffic generated by the Center. Tenant hereby agrees
(i) to designate one of its employees to act as a liaison with Landlord's
designated transportation coordinator in facilitating and coordinating such
programs as may be required from time to time by governmental agencies and/or
by the terms of the TDMP to reduce the traffic generated by the Center (as
required by the City of South San Francisco as part of the conditions of
approval of this project) and to facilitate and encourage the use of public
transportation, (ii) to make reasonable efforts to encourage cooperation and
participation by Tenant's employees in the programs implemented from time to
time pursuant to the TDMP, including (but not limited to) programs described
in this Section 19.20, and (iii) to cooperate with Landlord's designated
transportation coordinator in identifying an appropriate area within the
Building where an information kiosk can be maintained for the dissemination
of transportation-related information, to be updated from time to time by
Landlord's designated transportation coordinator.
(b) The Center is presently intended to contain a maximum
of 3.3 parking spaces per 1,000 square feet of rentable area in the buildings
to be constructed on the Property, subject to approval by appropriate
agencies of the City of South San Francisco. Consistent with the TDMP, a
specified percentage (presently anticipated to be ten percent (10%)) of these
spaces will be designated for carpool, vanpool and clean fuel vehicles. Among
other things, the City of South San Francisco requires, through its approval
of the TDMP that Landlord was required to adopt and implement as a condition
of approval of Landlord's development plans, that Landlord charge a monthly
parking fee for each parking space allocated to tenants and their employees.
The monthly fee per parking space shall be $20 per parking space for each of
the first five (5) years after the Rent Commencement Date, $30 per parking
space for years six (6) through ten (10) after the Rent Commencement Date,
and $35 per parking space for years eleven (11) through fifteen (15) after
the Rent Commencement Date. In accordance with the policies and requirements
of the City of South San Francisco, Landlord recommends that Tenant pass
through these parking charges to Tenant's employees using the spaces. (Thus,
for example, in years one (1) through five (5) of the Lease term, assuming
82,000 square feet in the Building and 3.3 spaces of parking per 1,000 square
feet in the Center, Tenant would have 270 allocable parking spaces at $20 per
space per month, for a total monthly parking fee of $5,400.) Notwithstanding
any other provisions of this Section 19.20(b), however, if at any time during
the term of this Lease (x) Landlord is permitted to terminate the TDMP or to
modify it in such a manner that it no longer requires Landlord to charge
tenants of the Center for parking and (y) Landlord is not then subject to any
other agreement with any governmental authority or to any other law,
ordinance, regulation, order, requirement or policy of any governmental
authority which either requires Landlord to charge tenants of the Center for
parking or imposes any charge or penalty or other material detriment on
Landlord or the Center in the event of any failure of Landlord to charge
tenants of the Center for parking, then for so long as such conditions
continue to exist, then the parking charge imposed on Tenant under this
Section 19.20(b) shall be waived; and if at any time during the term of this
Lease the conditions contemplated in clauses (x) and (y) of the preceding
portion of this sentence are met in a manner which does not permit complete
elimination of parking charges to tenants of the Center but permits a
reduction in the rates that Landlord is required to charge tenants of the
Center for parking, then the parking charge imposed on Tenant under this
Section 19.20(b) shall be correspondingly reduced for so long as such
conditions continue to exist.
(c) On or about the date Tenant commences business in the
Building, Landlord intends to provide Tenant, through Landlord's designated
transportation coordinator, with an appropriate number of packets of employee
transportation information, presently expected to include (but not be limited
to) information about carpool parking; schedules and maps for
-41-
SamTrans, Caltrain, BART and shuttle services operating to and from the
Property; and a bicycle map. Landlord shall thereafter cause its designated
transportation coordinator to provide updated copies of the employee
transportation information packet to Tenant from time to time, as
appropriate, and to make additional copies of the packet available to Tenant
from time to time, upon request by Tenant, for new employees. Tenant shall
distribute copies of the employee transportation information packet to all
employees commuting to the Property at the time Tenant commences business in
the Building, shall thereafter distribute copies of the packet to new
employees from time to time and shall distribute updated packets to all
employees from time to time when and as such updated packets are furnished to
Tenant by Landlord's designated transportation coordinator.
(d) Landlord is required to conduct, pursuant to the TDMP,
annual surveys of its tenants and their employees regarding both quantitative
and qualitative aspects of commuting and transportation patterns at the
Center. Landlord anticipates that these surveys will be prepared,
administered and analyzed by an independent transportation consultant
retained by the City of South San Francisco, and will be summarized by that
consultant in an annual report to be submitted by that consultant to the City
of South San Francisco and its Redevelopment Agency with respect to the
Center. Tenant shall cooperate with Landlord, with Landlord's designated
transportation coordinator and with any independent transportation consultant
retained by the City, and shall use reasonable efforts to cause Tenant's
employees to so cooperate, in the completion and return of such surveys from
time to time, when and as requested by Landlord or its designated
transportation coordinator or the independent consultant. Tenant acknowledges
and understands that employees who fail to respond to such surveys will be
counted as drive-alone commuters.
(e) Landlord has advised Tenant that pursuant to conditions
imposed by the City of South San Francisco and its Redevelopment Agency,
Landlord may incur financial penalties if implementation of the TDMP at the
Center fails to achieve a target rate of at least thirty-five percent (35%)
alternative mode transportation usage (the "ALTERNATIVE MODE STANDARD") by
employees working at the Center, as reflected in the surveys conducted
pursuant to Section 19.20(d) above. Any such financial penalties shall be
imposed by the City of South San Francisco Redevelopment Agency (the
"REDEVELOPMENT AGENCY"), in its sole discretion, based on its review of the
annual reports submitted from time to time pursuant to Section 19.20(d)
above. The amount of such financial penalties is presently set at $15,000 per
year for each percentage point (if any) by which, after a phase-in period
(two (2) years after the granting of a certificate of occupancy) for each
building, the aggregate rate of alternative mode transportation usage by
employees throughout the Center falls short of the Alternative Mode Standard.
If any such financial penalties are imposed on Landlord for failure to meet
the Alternative Mode Standard on a Center-wide basis for any applicable
survey period, then Landlord shall be entitled to pass such financial
penalties through to all tenants of the Center whose employees have failed to
demonstrate (pursuant to the applicable surveys) compliance with the
Alternative Mode Standard for the applicable period (each such tenant being
hereinafter referred to as a "NONCOMPLYING TENANT" for that period), in which
event the actual penalty amount shall be allocated among the Noncomplying
Tenants for the applicable period in the following manner: Each Noncomplying
Tenant shall bear a portion of the applicable penalty amount equal to a
fraction, the numerator of which is the number of employees by which such
Noncomplying Tenant fell short of meeting the Alternative Mode Standard for
the applicable period and the denominator of which is the sum of the
respective numbers of employees by which all Noncomplying Tenants, in the
aggregate, fell short of meeting the Alternative Mode Standard for the
applicable period. Each such Noncomplying Tenant shall pay its share of the
applicable penalty amount to Landlord within thirty (30) days after receipt
of written demand from Landlord, accompanied by supporting documentation
evidencing the applicable penalty amount, as provided by the Redevelopment
Agency or its consultant, and demonstrating in reasonable detail the
calculation of such Noncomplying Tenant's share of that penalty amount. Under
no circumstances shall Tenant be required to bear any portion of any
penalties contemplated in this paragraph with respect to any period as to
which Tenant can demonstrate that its employees, as evidenced by the
applicable survey(s) for that period, met the Alternative Mode Standard. If
Tenant subleases any portion(s) of the Building from time to time, then for
purposes of this Section 19.20, as between Tenant and Landlord, Tenant shall
be fully and solely responsible for compliance by its subtenant(s) and their
-42-
employees with the requirements of this Section 19.20, and all surveys and
reports submitted by Tenant to Landlord or its designated transportation
coordinator or to the independent consultant pursuant to this Section 19.20
shall cover the entire Building and shall report figures for Tenant and its
subtenant(s) on an aggregate basis. Nothing in the preceding sentence,
however, shall preclude Tenant, as between itself and its subtenant(s), from
allocating to such subtenant(s) in the applicable sublease agreement any
compliance obligations and/or penalty reimbursement obligations under this
Section 19.20(e), but no such allocation shall be binding on Landlord or
require Landlord, its designated transportation coordinator or the
independent consultant to deal directly with any such subtenant(s) regarding
the matters addressed in this Section 19.20. If Tenant believes, reasonably
and in good faith, that there are circumstances particular to the nature of
Tenant's business operations that would justify a mitigation of penalties
and/or a modification of the implementation of the TDMP as applied to
Tenant's business, and requests in writing (with supporting information
describing, in reasonable detail, the circumstances on which Tenant is
relying) that Landlord present such mitigation or modification arguments to
the Redevelopment Agency, then Landlord shall use reasonable and good faith
efforts to present or cause its designated transportation coordinator to
present such mitigation and/or modification arguments, but Tenant
acknowledges and understands that any decision with respect to such
mitigation and/or modification arguments will be in the sole discretion of
the Redevelopment Agency and agrees that Landlord shall have no liability to
Tenant if such mitigation and/or modification arguments are not accepted by
the Redevelopment Agency.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as
of the day and year first set forth above.
"Landlord"
SLOUGH BTC, LLC, a Delaware limited liability company
By: Slough Estates USA Inc., a Delaware corporation,
Its Manager
By: /s/ Xxxxxxx Xxxxxxx
-------------------------------
Its: Vice President
------------------------------
"Tenant"
EOS BIOTECHNOLOGY, INC., a Delaware corporation
By: /s/ Xxxxx X. Xxxxxx, Xx. M.D.
-------------------------------
Xxxxx X. Xxxxxx, Xx., M.D.
President and CEO
By: /s/ Xxxx Xxxxxx
-------------------------------
Its: Vice President and CEO
------------------------------
-43-
EXHIBITS
EXHIBIT A Real Property Description
EXHIBIT B Site Plan
EXHIBIT C Workletter
EXHIBIT D Estimated Construction Schedule
EXHIBIT E Acknowledgment of Rent Commencement Date
EXHIBIT A
REAL PROPERTY DESCRIPTION
All that certain real property in the City of South San Francisco, County of
San Mateo, State of California, more particularly described as follows:
Parcels 2, 3, 5 and 6 as shown on the Bay West Cover Final Subdivision Map,
Parcel Map No. 97-027, recorded January 22, 1998 in Book 70, at pages 33-40,
File No. 98-008274, Official Records of San Mateo County, California.
EXHIBIT B
SITE PLAN
[attached]
[Site Plan appears here]
EXHIBIT C
WORKLETTER
This Workletter ("WORKLETTER") constitutes part of the
Build-to-Suit Lease
dated as of June 1, 2001 (the "LEASE") between SLOUGH BTC, LLC, a Delaware
limited liability company ("LANDLORD"), and EOS BIOTECHNOLOGY, INC., a Delaware
corporation ("TENANT"). The terms of this Workletter are incorporated in the
Lease for all purposes.
1. DEFINED TERMS. As used in this Workletter, the following capitalized terms
have the following meanings:
(a) APPROVED PLANS: Plans and specifications prepared by the applicable
Architect for the respective Improvements and approved by Landlord and, to the
extent applicable, Tenant in accordance with Paragraph 2 of this Workletter,
subject to further modification from time to time to the extent provided in and
in accordance with such Paragraph 2.
(b) ARCHITECT: Chamorro Design Group, or any other architect selected by
Landlord in its sole discretion, with respect to the Building Shell, the Site
Improvements and any other Improvements which Landlord is to design pursuant to
this Workletter; any architect selected by Tenant with the written approval of
Landlord (which approval shall not be unreasonably withheld or delayed), with
respect to the Tenant Improvements and any other Improvements which Tenant is to
design pursuant to this Workletter.
(c) BUILDING SHELL: The shell of the Building, as more fully defined in
SCHEDULE C-1 attached to this Workletter.
(d) CHANGE ORDER REQUEST: See definition in Paragraph 2(e)(ii) hereof.
(e) COST OF IMPROVEMENT: See definition in Paragraph 2(c) hereof.
(f) FINAL COMPLETION CERTIFICATE: See definition in Paragraph 3(b) hereof.
(g) FINAL WORKING DRAWINGS: See definition in Paragraph 2(a) hereof.
(h) GENERAL CONTRACTOR: Hathaway Xxxxxxxxx Construction Company, or any
other general contractor selected by Landlord in its sole discretion, with
respect to Landlord's Work. The General Contractor with respect to Tenant's Work
shall be selected by Tenant, subject to Landlord's approval (not to be
unreasonably withheld or delayed), as contemplated in Paragraph 5(a) hereof.
(i) IMPROVEMENTS: The Building Shell, Site Improvements, Tenant
Improvements and other improvements shown on the Approved Plans from time to
time and to be constructed on the Property pursuant to the Lease and this
Workletter.
(j) LANDLORD DELAY: Any of the following types of delay in the completion
of construction of the Tenant Improvements:
(i) Any delay resulting from Landlord's failure to furnish, in a
timely manner, information requested by Tenant or by the Architect or
General Contractor for Tenant's Work in connection with the design or
construction of Tenant's Work, or from Landlord's failure to approve in a
timely manner any matters requiring approval by Landlord; or
(ii) Any delay of any other kind or nature caused by Landlord (or
Landlord's contractors, agents or employees) or resulting from the
performance of Landlord's Work.
(k) LANDLORD'S WORK: The Building Shell and Site Improvements, and any
other Improvements which Landlord is to construct or install pursuant to this
Workletter or by mutual agreement of Landlord and Tenant from time to time.
(l) PUNCH LIST WORK: Minor corrections of construction or decoration
details, and minor mechanical adjustments, that are required in order to cause
any applicable portion of the Improvements as constructed to conform to the
Approved Plans in all material respects and that do not materially interfere
with Tenant's use or occupancy of the Building and the Property.
(m) SITE IMPROVEMENTS: The parking areas, driveways, landscaping and other
improvements to the Common Areas of the Property that are depicted on EXHIBIT B
to the Lease (as the same may be modified by Landlord from time to time pursuant
to the process of development and approval of the Approved Plans).
(n) STRUCTURAL COMPLETION CERTIFICATE: See definition in Paragraph 3(a)
hereof.
(o) TENANT DELAY: Any of the following types of delay in the completion of
construction of the Building Shell:
(i) Any delay resulting from Tenant's failure to furnish, in a timely
manner, information requested by Landlord or by the Architect or General
Contractor for Landlord's Work in connection with the design or
construction of the Building Shell, or from Tenant's failure to approve in
a timely manner any matters requiring approval by Tenant;
(ii) Any delay attributable to any request by Tenant to construct the
Building Shell in an "above standard" manner, or to any use of "above
standard" Building Shell components that is necessitated by Tenant's
particular use requirements or by the contemplated Tenant's Work;
(iii) Any delay resulting from Change Order Requests initiated by
Tenant, including any delay resulting from the need to revise any drawings
or obtain further governmental approvals as a result of any such Change
Order Request; or
(iv) Any delay of any other kind or nature caused by Tenant (or
Tenant's contractors, agents or employees) or resulting from the
performance of Tenant's Work.
(p) TENANT IMPROVEMENTS: The improvements to or within the Building, other
than improvements constituting part of the Building Shell, shown on the Approved
Plans from time to time and to be constructed by Tenant (except as otherwise
provided herein) pursuant to the Lease and this Workletter, including (but not
limited to) the improvements described on SCHEDULE C-2 attached to this
Workletter (except to the extent any such SCHEDULE C-2 improvements are
specifically described as constituting part of the Building Shell).
(q) TENANT'S WORK: All of the Improvements other than those constituting
Landlord's Work, and such other materials and improvements as Tenant deems
necessary or appropriate for Tenant's use and occupancy of the Building.
(r) UNAVOIDABLE DELAYS: Delays due to acts of God, acts of public agencies,
labor disputes, strikes, fires, freight embargoes, rainy or stormy weather,
inability to obtain supplies, materials, fuels or permits, delays of contractors
or subcontractors, or other causes or contingencies beyond the reasonable
control of Landlord or Tenant, as applicable.
(s) WORK DEADLINES: The target dates for performance by the applicable
party of the steps listed in the Estimated Construction Schedule attached as
EXHIBIT D to the Lease.
(t) Capitalized terms not otherwise defined in this Workletter shall have
the definitions set forth in the Lease.
2. PLANS, COST OF IMPROVEMENTS AND CONSTRUCTION. Landlord and Tenant shall
comply with the procedures set forth in this Paragraph 2 in preparing,
delivering and approving matters relating to the Improvements.
C-2
(a) APPROVED PLANS AND WORKING DRAWINGS FOR LANDLORD'S WORK. Landlord shall
promptly and diligently (and in all events prior to any applicable Work
Deadlines, subject to Tenant Delays and Unavoidable Delays) prepare or cause to
be prepared plans and specifications for the Improvements constituting
Landlord's Work. Such plans and specifications shall not be subject to Tenant's
approval, except to the extent (and only to the extent) that Landlord's Work
includes, by mutual agreement of Landlord and Tenant, any portion of the Tenant
Improvements. Landlord shall deliver copies of such plans and specifications to
Tenant for Tenant's approval (but only to the extent provided in the preceding
sentence) and information, to assist Tenant in providing any information and
making any decisions necessary to be provided or made by Tenant in order to
permit preparation of Landlord's Final Working Drawings as hereinafter defined,
and to assist Tenant in preparing plans, specifications and drawings for
Tenant's Work as hereinafter set forth. Following approval of such plans and
specifications by Landlord and, if applicable, by Tenant (as so approved, the
"LANDLORD'S APPROVED PLANS"), Landlord shall then prepare or cause to be
prepared, on or before the applicable Work Deadline (assuming timely delivery by
Tenant of all information and decisions required to be furnished or made by
Tenant in order to permit preparation of Landlord's Final Working Drawings),
final detailed working drawings and specifications for the Improvements
constituting Landlord's Work, including structural, fire protection, life
safety, mechanical and electrical working drawings and final architectural
drawings (collectively, "LANDLORD'S FINAL WORKING DRAWINGS"). Landlord's Final
Working Drawings shall substantially conform to the Landlord's Approved Plans.
Landlord's Final Working Drawings shall not be subject to Tenant's approval,
except to the extent (and only to the extent), as noted above, that Landlord's
Work includes, by mutual agreement of Landlord and Tenant, any portion of the
Tenant Improvements. Landlord shall deliver copies of Landlord's Final Working
Drawings to Tenant for Tenant's approval (but only to the extent provided in the
preceding sentence) and information, and to assist Tenant in preparing plans,
specifications and drawings for Tenant's Work as hereinafter set forth.
Landlord's obligation to deliver Landlord's Final Working Drawings to Tenant
within the time period set forth above shall be extended for any delay
encountered by Landlord as a result of a request by Tenant for changes in
accordance with the procedure set forth below, any other Tenant Delays, or any
Unavoidable Delays. To the extent Tenant has any right of approval over
Landlord's proposed plans and specifications or Landlord's proposed Final
Working Drawings pursuant to the foregoing provisions, no later than the
applicable Work Deadline (assuming timely delivery of plans and drawings by
Landlord), Tenant shall either approve (to the extent of Tenant's approval
right) Landlord's proposed plans and specifications or proposed Landlord's Final
Working Drawings, as applicable, or set forth in writing with particularity any
changes necessary to bring the aspects of such proposed plans and specifications
or proposed Landlord's Final Working Drawings over which Tenant has a right of
approval into a form which will be acceptable to Tenant or, in the case of
Landlord's Final Working Drawings, into substantial conformity with the
Landlord's Approved Plans. Notwithstanding any other provisions of this
paragraph, in no event shall Tenant have the right to object to any aspect of
the Landlord's proposed plans and specifications or proposed Landlord's Final
Working Drawings (including, but not limited to, any subsequently proposed
changes therein from time to time) that is necessitated by applicable law or as
a condition of any governmental or other third-party approvals or consents that
are required to be obtained in connection with Landlord's Work.. Failure of
Tenant to deliver to Landlord written notice of disapproval and specification of
required changes (to the extent Tenant has a right of approval or objection
under this paragraph) on or before the applicable Work Deadline shall constitute
and be deemed to be approval of Landlord's proposed plans and specifications or
proposed Landlord's Final Working Drawings, as applicable. Upon approval, actual
or deemed, of Landlord's Final Working Drawings by Landlord and Tenant (to the
extent Tenant has such a right of approval under this paragraph), Landlord's
Final Working Drawings shall be deemed to be incorporated in and considered part
of the Landlord's Approved Plans, superseding (to the extent of any
inconsistencies) any inconsistent features of the previously existing Landlord's
Approved Plans.
(b) APPROVED PLANS AND WORKING DRAWINGS FOR TENANT'S WORK. Tenant shall
promptly and diligently (and in all events prior to any applicable Work
Deadlines, subject to Landlord Delays and Unavoidable Delays) cause to be
prepared and delivered to Landlord, for approval (which shall not be
unreasonably withheld or delayed by Landlord), a space plan and detailed plans
and specifications for the Improvements constituting Tenant's Work (as so
approved, the "TENANT'S APPROVED PLANS"). Following mutual approval of the
Tenant's Approved Plans, Tenant shall then
C-3
cause to be prepared and delivered to Landlord for approval (which shall not
be unreasonably withheld) final working drawings and specifications for the
Improvements constituting Tenant's Work, including any applicable life
safety, mechanical and electrical working drawings and final architectural
drawings (collectively, "TENANT'S FINAL WORKING DRAWINGS"). Tenant's Final
Working Drawings shall substantially conform to the Tenant's Approved Plans.
Landlord shall either approve Tenant's Final Working Drawings or set forth in
writing with particularity any changes necessary to bring Tenant's Final
Working Drawings into substantial conformity with the Tenant's Approved Plans
or into a form which will be acceptable to Landlord. Upon approval of
Tenant's Final Working Drawings by Landlord and Tenant, Tenant's Final
Working Drawings shall be deemed to be incorporated in and considered part of
the Tenant's Approved Plans, superseding (to the extent of any
inconsistencies) any inconsistent features of the previously existing
Tenant's Approved Plans.
(c) COST OF IMPROVEMENTS. "COST OF IMPROVEMENT" shall mean, with respect to
any item or component for which a cost must be determined in order to allocate
such cost, or an increase in such cost, to Landlord and/or Tenant pursuant to
this Workletter, the sum of the following (unless otherwise agreed in writing by
Landlord and Tenant with respect to any specific item or component or any
category of items or components): (i) all sums paid to contractors or
subcontractors for labor and materials furnished in connection with construction
of such item or component; (ii) all costs, expenses, payments, fees and charges
(other than penalties) paid or incurred to or at the direction of any city,
county or other governmental or quasi-governmental authority or agency which are
required to be paid in order to obtain all necessary governmental permits,
licenses, inspections and approvals relating to construction of such item or
component; (iii) engineering and architectural fees for services rendered in
connection with the design and construction of such item or component
(including, but not limited to, the applicable Architect for such item or
component and an electrical engineer, mechanical engineer and civil engineer);
(iv) sales and use taxes; (v) testing and inspection costs; (vi) the cost of
power, water and other utility facilities and the cost of collection and removal
of debris required in connection with construction of such item or component;
(vii) all other "hard" costs incurred in the construction of such item or
component in accordance with the applicable Approved Plans and this Workletter;
and (viii) as to the Tenant Improvements, all costs and items specifically set
forth or described on SCHEDULE C-2 attached hereto.
(d) CONSTRUCTION OF LANDLORD'S WORK. Promptly following approval of
Landlord's Final Working Drawings, Landlord shall apply for and use reasonable
efforts to obtain the necessary permits and approvals to allow construction of
all Improvements constituting Landlord's Work. Upon receipt of such permits and
approvals, Landlord shall, at Landlord's sole expense (except as otherwise
provided in the Lease or in this Workletter), diligently construct and complete
the Improvements constituting Landlord's Work substantially in accordance with
the Landlord's Approved Plans, subject to Unavoidable Delays and Tenant Delays
(if any). Such construction shall be performed in a good and workmanlike manner
and shall conform to all applicable governmental codes, laws and regulations in
force at the time such work is completed. Without limiting the generality of the
foregoing, Landlord shall be responsible for compliance of all Improvements
designed and constructed by Landlord with the requirements of the Americans with
Disabilities Act and all similar or related requirements pertaining to access by
persons with disabilities. Landlord shall have the right, in its sole
discretion, to decide whether and to what extent to use union labor on or in
connection with Landlord's Work and shall use the General Contractor designated
pursuant to Paragraph 1(h) to construct all Improvements constituting Landlord's
Work.
(e) CHANGES.
C-4
(i) If Landlord determines at any time that changes in Landlord's
Final Working Drawings or in any other aspect of the Landlord's Approved
Plans relating to any item of Landlord's Work are required as a result of
applicable law or governmental requirements, or are required at the
insistence of any other third party whose approval may be required with
respect to the Improvements, or are required as a result of unanticipated
conditions encountered in the course of construction, or are otherwise
deemed desirable by Landlord, then Landlord shall promptly (A) advise
Tenant of such circumstances and (B) cause revised Landlord's Approved
Plans and/or Landlord's Final Working Drawings, as applicable, reflecting
such changes to be prepared by Architect and submitted to Tenant, for
Tenant's information (and to assist Tenant in determining the need for any
related changes in Tenant's Approved Drawings) and, to the extent such
changes relate to Tenant Improvements being constructed by Landlord
pursuant to mutual agreement of Landlord and Tenant, for approval by Tenant
in accordance with the procedure contemplated in Paragraph 2(a) hereof.
Upon final approval of such revised drawings by Landlord and Tenant (if
applicable), Landlord's Final Working Drawings and/or the Landlord's
Approved Plans shall be deemed to be modified accordingly. In the case of
any such changes in Landlord's Final Working Drawings and/or the Landlord's
Approved Plans which are required as a result of applicable law or
governmental requirements, or are required at the insistence of any other
third party whose approval may be required with respect to the
Improvements, or are required as a result of unanticipated conditions
encountered in the course of construction, Landlord shall have no liability
or responsibility for any costs or cost increases incurred by Tenant as a
result of such required changes. However, in the case of any changes in
Landlord's Final Working Drawings and/or the Landlord's Approved Plans
which are merely deemed desirable by Landlord without being required by any
of the circumstances described in the preceding sentence, then Landlord
shall be responsible for all actual costs or cost increases incurred by
Tenant as a result of such changes and shall reimburse Tenant for any such
actual costs or cost increases promptly following receipt of Tenant's
written request for such reimbursement, accompanied by documentation
reasonably supporting Tenant's claimed costs or cost increases and their
relationship to the changes made by Landlord.
(ii) If Tenant at any time desires any changes, alterations or
additions to the Landlord's Approved Plans or Landlord's Final Working
Drawings with respect to any of Landlord's Work, Tenant shall submit a
detailed written request to Landlord specifying such changes, alterations
or additions (a "CHANGE ORDER Request"). Upon receipt of any such request,
Landlord shall promptly notify Tenant of (A) whether the matters proposed
in the Change Order Request are approved by Landlord (which approval shall
not be unreasonably withheld or delayed as to any matters relating to
Tenant Improvements which are being constructed by Landlord pursuant to
mutual agreement of Landlord and Tenant, but may be granted or withheld by
Landlord in its sole discretion as to any other aspects of Landlord's
Work), (B) Landlord's estimate of the number of days of delay, if any,
which shall be caused by such Change Order Request if implemented
(including, without limitation, delays due to the need to obtain any
revised plans or drawings and any governmental approvals), and (C)
Landlord's estimate of the increase, if any, which shall occur in the Cost
of Improvement for the items or components affected by such Change Order
Request if such Change Order Request is implemented (including, but not
limited to, any costs of compliance with laws or governmental regulations
that become applicable because of the implementation of the Change Order
Request). If Landlord approves the Change Order Request and Tenant notifies
Landlord in writing, within five (5) business days after receipt of such
notice from Landlord, of Tenant's approval of the Change Order Request
(including the estimated delays and cost increases, if any, described in
Landlord's notice), then Landlord shall cause such Change Order Request to
be implemented and Tenant shall be responsible for all actual costs or cost
increases resulting from or attributable to the implementation of the
Change Order Request, subject to the provisions of Paragraph 4 hereof. If
Tenant fails to notify Landlord in writing of Tenant's approval of such
Change Order Request within said five (5) business day period, then such
Change Order Request shall be deemed to be withdrawn and shall be of no
further effect.
(iii) If Tenant at any time desires to make any changes, alterations
or additions to the Tenant's Approved Plans, such changes, alterations or
additions shall be subject to approval by Landlord in the same manner as
the original Tenant's Approved Plans as provided above.
C-5
3. COMPLETION.
(a) When Landlord receives written certification from Architect that
construction of the foundation, structural slab on grade (except to the extent
delayed at Tenant's request to accommodate Tenant's design requirements and/or
any underslab aspects of Tenant's Work), Landlord's underslab plumbing work,
structural steel framework, decking and concrete on second and third floors,
roof structure and installation of main fire sprinkler risers in the Building
have been completed in accordance with the Landlord's Approved Plans, Landlord
shall prepare and deliver to Tenant a certificate signed by both Landlord and
Architect (the "STRUCTURAL COMPLETION CERTIFICATE") certifying that the
construction of such portions of the Building has been substantially completed
in accordance with the Landlord's Approved Plans in all material respects and
specifying the date of that completion. The delivery of such Structural
Completion Certificate shall commence the running of the 180-day time period
until the Rent Commencement Date under Section 2.1 of the Lease.
(b) When Landlord receives written certification from Architect that
construction of the remaining Improvements constituting Landlord's Work has been
completed in accordance with the Landlord's Approved Plans (except for Punch
List Work), Landlord shall prepare and deliver to Tenant a certificate signed by
both Landlord and Architect (the "FINAL COMPLETION CERTIFICATE") certifying that
the construction of the remaining Improvements constituting Landlord's Work has
been substantially completed in accordance with the Landlord's Approved Plans in
all material respects, subject only to completion of Punch List Work, and
specifying the date of that completion. Upon receipt by Tenant of the Final
Completion Certificate, the Improvements constituting Landlord's Work will be
deemed delivered to Tenant for all purposes of the Lease (subject to Landlord's
continuing obligations with respect to the Punch List Work).
(c) Notwithstanding any other provisions of this Workletter or of the
Lease, if Landlord is delayed in substantially completing any of Landlord's Work
necessary for issuance of the Structural Completion Certificate as a result of
any Tenant Delay, then the 180-day period between the delivery of the Structural
Completion Certificate and the Rent Commencement Date pursuant to Section 2.1 of
the Lease shall be reduced, day for day, by the number of days by which such
Tenant Delay delayed completion of the portions of Landlord's Work necessary for
issuance of the Structural Completion Certificate, and Tenant shall reimburse
Landlord in cash, within fifteen (15) days after written demand by Landlord
(accompanied by reasonable documentation of the items claimed), for any
increased construction-related costs and expenses actually incurred by Landlord
as a result of the Tenant Delay, if any.
(d) At any time within thirty (30) days after delivery of the Structural
Completion Certificate or the Final Completion Certificate, as applicable,
Tenant shall be entitled to submit one or more lists to Landlord specifying
Punch List Work to be performed on the applicable Improvements constituting
Landlord's Work, and upon receipt of such list(s), Landlord shall diligently
complete such Punch List Work at Landlord's sole expense. In the event of any
dispute as to completion of any item or component of Landlord's Work, the
certificate of Landlord's Architect shall be conclusive. Promptly after Landlord
provides Tenant with the Final Completion Certificate, Landlord shall cause the
recordation of a Notice of Completion (as defined in Section 3093 of the
California Civil Code) with respect to Landlord's Work.
C-6
4. PAYMENT OF COSTS.
(a) LANDLORD'S WORK. Except as otherwise expressly provided in this
Workletter (including, but not limited to, the cost allocations set forth in
SCHEDULE C-2 attached hereto) or by mutual written agreement of Landlord and
Tenant, the cost of construction of Landlord's Work shall be borne by Landlord
at its sole cost and expense, including any costs or cost increases incurred as
a result of Unavoidable Delays, governmental requirements or unanticipated
conditions; PROVIDED, however, that notwithstanding any other provisions of this
Paragraph 4(a), to the extent the Cost of Improvement relating to the
construction of any item or component of Landlord's Work is increased as a
result of any implemented Change Order Request or any Tenant Delay, or as a
result of any "above standard" Building Shell components requested by Tenant or
otherwise necessitated by Tenant's particular use requirements or by the
contemplated Tenant's Work, or as a result of any other plan changes or
compliance costs attributable to Tenant's particular use requirements or to the
contemplated Tenant's Work, the amount of the increase in the Cost of
Improvement with respect to such item or component shall be reimbursed by Tenant
to Landlord in cash or, by mutual agreement of Landlord and Tenant, may be
deducted from Landlord's maximum obligation under Paragraph 4(b) with respect to
the cost of Tenant's Work.
(b) TENANT'S WORK. Except as otherwise expressly provided in this
Workletter (including, but not limited to, the cost allocations set forth in
SCHEDULE C-2 attached hereto) or by mutual written agreement of Landlord and
Tenant, (i) the cost of construction of the Tenant Improvements shall be borne
by Landlord up to a Cost of Improvements of $[***] per square foot of space in
the Building (measured in accordance with Section 3.1(d) of the Lease) for such
Tenant Improvements and (ii) any cost of construction of the Tenant Improvements
in excess of $[***] per square foot of space in the Building for such Tenant
Improvements up to a maximum additional cost of $[***] per square foot shall be
borne fifty percent (50%) by Landlord and fifty percent (50%) by Tenant,
equating to a maximum total contribution by Landlord to the Cost of Improvements
for the Tenant Improvements of $[***] per square foot (the "TENANT IMPROVEMENT
ALLOWANCE") if the total Cost of Improvements for the Tenant Improvements is
$[***] per square foot. Tenant shall be responsible, at its sole cost and
expense, for payment of fifty percent (50%) of the first $[***] per square foot
of the Cost of Improvements of the Tenant Improvements in excess of $[***] per
square foot, for the entire Cost of Improvements of the Tenant Improvements in
excess of $[***] per square foot (if any such excess occurs) and for the entire
cost of any Tenant's Work that is not part of the Tenant Improvements, including
(but not limited to), in each case, any costs or cost increases incurred as a
result of Unavoidable Delays, governmental requirements or unanticipated
conditions. The rental schedule set forth in Section 3.1(a) of the Lease is
subject to adjustment based on the Cost of Improvements of the Tenant
Improvements, to the extent the total final contribution of Landlord toward the
Cost of Improvements for the Tenant Improvements is less than $[***] per square
foot but not less than $[***] per square foot, in accordance with the provisions
of Section 3.1(e) of the Lease. The funding of Landlord's share of the Cost of
Improvements for the Tenant Improvements (100% of the first $[***] per square
foot of such Cost of Improvements and 50% of each $[***] per square foot of such
Cost of Improvements in excess of $[***] per square foot but not in excess of
$[***] per square foot) shall be made on a monthly basis or at other convenient
intervals mutually approved by Landlord and Tenant and shall be based on such
disbursement conditions and procedures as Landlord and Landlord's lender (if
any) may reasonably prescribe, including (but not limited to), as to the shared
portion of such Cost of Improvements, prior or concurrent payment of Tenant's
share of the applicable Cost of Improvements. Notwithstanding any other
provisions of this Paragraph 4(b), to the extent any amounts are deducted from
or charged against the Tenant Improvement Allowance pursuant to the final
sentence of Paragraph 4(a) hereof, whether as a result of implemented Change
Order Requests, Tenant Delays and/or Unavoidable Delays or otherwise, such
amounts shall result in a reduction of the first ($[***] per square foot)
tranche of the Tenant Improvement Allowance that is borne 100% by Landlord with
respect to the Tenant Improvements, and the application of the second tranche of
the Tenant Improvement Allowance ($[***] per square foot, borne 50% by Landlord
and 50% by Tenant, up to a maximum contribution of $[***] per square foot by
Landlord) with respect to the Tenant Improvements shall commence upon exhaustion
of the first tranche of the Tenant Improvement Allowance as so reduced. The
foregoing Tenant Improvement Allowance assumes a building composed of a minimum
of 60% laboratory space and a maximum of 40% office space, and is subject to
reduction (and/or to
C-7
disapproval by Landlord of Tenant's proposed plans and specifications for the
Tenant Improvements) if the proposed laboratory space is less than 60% of the
square footage of the Building.
5. TENANT'S WORK. On or before the applicable Work Deadline (subject to Landlord
Delays and Unavoidable Delays, if any), Tenant shall construct and install in
the Building the Tenant's Work, substantially in accordance with the Tenant's
Approved Plans or, with respect to Tenant's Work not otherwise shown on the
Tenant's Approved Plans, substantially in accordance with plans and
specifications prepared by Tenant and approved in writing by Landlord (which
approval shall not be unreasonably withheld or delayed). Tenant's Work shall be
performed in accordance with, and shall in all respects be subject to, the terms
and conditions of the Lease (to the extent not inconsistent with this
Workletter), and shall also be subject to the following conditions:
(a) CONTRACTOR REQUIREMENTS. The contractor engaged by Tenant for Tenant's
Work, and any subcontractors, shall be duly licensed in California and shall be
subject to Landlord's prior written approval, which approval shall not be
unreasonably withheld or delayed. Tenant shall engage only union contractors for
the construction of Tenant's Work and for the installation of Tenant's fixtures
and equipment in the Building, and shall require all such contractors engaged by
Tenant, and all of their subcontractors, to use only union labor on or in
connection with such work, except to the extent Landlord determines, in its
reasonable discretion, that the use of non-union labor would not create a
material risk of labor disputes, picketing or work interruptions at the Site, in
which event Landlord shall, to that extent, waive such union labor requirement.
(b) COSTS AND EXPENSES OF TENANT'S WORK. Subject to Landlord's payment or
reimbursement obligations under Paragraph 4(b) hereof with respect to Landlord's
share of the Cost of Improvements for the Tenant Improvements, Tenant shall
promptly pay all costs and expenses arising out of the performance of Tenant's
Work (including the costs of permits) and shall furnish Landlord with evidence
of payment on request. Tenant shall provide Landlord with ten (10) days prior
written notice before commencing any Tenant's Work. On completion of Tenant's
Work, Tenant shall deliver to Landlord a release and unconditional lien waiver
executed by each contractor, subcontractor and materialman involved in the
performance of Tenant's Work.
(c) TENANT'S INDEMNIFICATION. Tenant shall indemnify, defend (with counsel
reasonably satisfactory to Landlord) and hold Landlord harmless from all suits,
claims, actions, losses, costs and expenses (including, but not limited to,
claims for workers' compensation, attorneys' fees and costs) based on personal
injury or property damage or contract claims (including, but not limited to,
claims for breach of warranty) arising from the performance of Tenant's Work.
Tenant shall repair or replace (or, at Landlord's election, reimburse Landlord
for the cost of repairing or replacing) any portion of the Improvements and/or
any of Landlord's real or personal property or equipment that is damaged, lost
or destroyed in the course of or in connection with the performance of Tenant's
Work.
(d) INSURANCE. Tenant's contractors shall obtain and provide to Landlord
certificates evidencing workers' compensation, public liability and property
damage insurance in amounts and forms and with companies satisfactory to
Landlord.
(e) RULES AND REGULATIONS. Tenant and Tenant's contractors shall comply
with any other rules, regulations and requirements that Landlord or General
Contractor may reasonably impose with respect to the performance of Tenant's
Work. Tenant's agreement with Tenant's contractors shall require each contractor
to provide daily cleanup of the construction area to the extent that such
cleanup is necessitated by the performance of Tenant's Work.
(f) EARLY ENTRY. Landlord shall permit entry of contractors into the
Building for the purposes of performing Tenant's Work, subject to satisfaction
of the conditions set forth in the Lease. This license to enter is expressly
conditioned on the contractor(s) retained by Tenant working in harmony with, and
not unreasonably interfering with, the workers, mechanics and contractors of
Landlord. If at any time the entry or work by Tenant's contractor(s) causes any
material interference with the workers, mechanics or contractors of Landlord,
permission to enter may be withdrawn by Landlord immediately on written notice
to Tenant.
C-8
(g) RISK OF LOSS. All materials, work, installations and decorations of any
nature brought onto or installed in the Building, by or at the direction of
Tenant or in connection with the performance of Tenant's Work, before the
commencement of the Term shall be at Tenant's risk, and neither Landlord nor any
party acting on Landlord's behalf shall be responsible for any damage, loss or
destruction thereof, unless caused by Landlord's or its agents', employees' or
contractors' gross negligence or willful misconduct.
(h) CONDITION OF TENANT'S WORK. All work performed by Tenant shall be
performed in a good and workmanlike manner, shall be free from defects in
design, materials and workmanship, and shall be completed in compliance with the
plans approved by Landlord for such Tenant's Work in all material respects and
in compliance with all applicable governmental laws, ordinances, codes and
regulations in force at the time such work is completed. Without limiting the
generality of the foregoing, Tenant shall be responsible for compliance of all
Improvements designed and constructed by Tenant with the requirements of the
Americans with Disabilities Act and all similar or related requirements
pertaining to access by persons with disabilities.
6. LANDLORD'S INDEMNIFICATION. Landlord shall indemnify, defend (with counsel
reasonably satisfactory to Tenant) and hold Tenant harmless from all suits,
claims, actions, losses, costs and expenses (including, but not limited to,
claims for workers' compensation, attorneys' fees and costs) based on personal
injury or property damage or contract claims (including, but not limited to,
claims for breach of warranty) arising from the performance of Landlord's Work.
Landlord shall repair or replace (or, at Tenant's election, reimburse Tenant for
the cost of repairing or replacing) any portion of the Tenant Improvements
and/or any of Tenant's real or personal property or equipment that is damaged,
lost or destroyed in the course of or in connection with the performance of
Landlord's Work.
7. NO AGENCY. Nothing contained in this Workletter shall make or constitute
Tenant as the agent of Landlord.
8. SURVIVAL. Without limiting survival provisions which would otherwise be
implied or construed under applicable law, the provisions of Paragraph 5(c) of
this Workletter shall survive the termination of the Lease with respect to
matters occurring prior to expiration of the Lease.
9. MISCELLANEOUS. All references in this Workletter to a number of days shall be
construed to refer to calendar days, unless otherwise specified herein. In all
instances where Tenant's approval is required, if no written notice of
disapproval is given within the applicable time period, at the end of that
period Tenant shall be deemed to have given approval (unless the provision
requiring Tenant's approval expressly states that non-response is deemed to be a
disapproval or withdrawal of the pending action or request, in which event such
express statement shall be controlling over the general statement set forth in
this sentence) and the next succeeding time period shall commence. If any item
requiring approval is disapproved by Tenant in a timely manner, the procedure
for preparation of that item and approval shall be repeated.
IN WITNESS WHEREOF, the parties have executed this Workletter concurrently
with and as of the date of the Lease.
"Landlord" "Tenant"
SLOUGH BTC, LLC, a Delaware limited EOS BIOTECHNOLOGY, INC., a Delaware
liability company corporation
By: SLOUGH ESTATES USA INC., a
Delaware corporation, Its Manager
By: _____________________ By: _________________________
Its: _____________________ Xxxxx X. Xxxxxx, Xx., M.D.
President and CEO
C-9
SCHEDULE C-1 TO WORKLETTER
BUILDING SHELL
[***]
[***] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
Schedule C-1 Page 3 of 2
[***]
[***] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
Schedule C-1 Page 4 of 2
SCHEDULE C-2 TO WORKLETTER
TENANT IMPROVEMENTS
[***]
[***] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
Schedule C-2 Page 1 of 2
[***]
[***] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
Schedule C-2 Page 2 of 2
EXHIBIT D
ESTIMATED CONSTRUCTION SCHEDULE
[attached]
[Hathaway BRITANNIA OYSTER POINT Slough Estates USA, Inc.]
Xxxxxxxxx LOGO] OYSTER POINT, SOUTH SAN FRANCISCO Project Management Advisors, Inc.
BUILDING D (81,223 SF) Chamorro Design Group
LEASE EXHIBIT D Revised Final-5/25/01
MAY 25 2001
ID Task Name Dur Start Finish %
1 BRITANNIA OYSTER POINT 139W WED 6/7/00 SAT 3/1/03 24%
322 BUILDING D 91.8W FRI 2/9/01 SAT 11/30/02 5%
323 SHELL DESIGN 32.8W FRI 2/9/01 MON 10/1/01 39%
324 Schematic Design 7.2w Fri 2/9/01 Fri 3/30/01 100%
325 Steel Package 8w Mon 4/2/01 Fri 5/25/01 55%
326 Design Development 9.8w Mon 4/2/01 Fri 6/8/01 45%
327 Grading / Utility Package 0w Fri 6/8/01 Fri 6/8/01 0%
328 Construction Documents 16w Fri 6/8/01 Mon 10/1/01 0%
329 PERMITS 12.6W TUE 10/2/01 WED 1/2/02 0%
330 Building Permit Review 12.6w Tue 10/2/01 Wed 1/2/02 0%
331 Building Permit 0w Wed 1/2/02 Wed 1/2/02 0%
332 SUBMITTALS / PROCUREMENT 43W MON 4/30/01 TUE 3/5/02 1%
333 Early Involvement Steel Subcontractor 4w Mon 4/30/01 Fri 5/25/01 10%
334 Steel Reservation (Latest Date) 0d Tue 8/7/01 Tue 8/7/01 0%
335 Procure Steel 29w Wed 8/8/01 Tue 3/5/02 0%
336 SHELL CONSTRUCTION 35.8W MON 12/17/01 WED 8/28/02 0%
337 Winterization / Mobilization 2w Mon 12/17/01 Mon 12/31/01 0%
338 Drive Piles 2.8w Wed 1/2/02 Mon 1/21/02 0%
000 Xxxxxxxx Xxxx Xxxx & Xxxxx Xxxxx 0x Wed 1/9/02 Tue 1/22/02 0%
340 Set Templates / Forming 2w Wed 1/16/02 Tue 1/29/02 0%
341 Pour 1st 1/2 Pile Caps & Grade Beams 1d Tue 1/22/02 Tue 1/22/02 0%
342 Pour 2nd 1/2 Pile Caps & Grade Beams 1d Tue 1/29/02 Tue 1/29/02 0%
343 T.I. U'slab, decks & Roof Required 0w Tue 1/22/02 Tue 1/22/02 0%
344 U'gnd Utilities 4.7w Wed 1/30/02 Mon 3/4/02 0%
345 SOG 4.2W THU 4/18/02 THU 5/16/02 0%
346 Edge Forms 1st half SOG 7d Thu 4/18/02 Fri 4/26/02 0%
347 Under Slab Plumbing 20d Thu 4/18/02 Wed 5/15/02 0%
348 Rebar 1st Half SOG 7d Mon 4/29/02 Tue 5/7/02 0%
349 Pour 1st Half SOG 1d Wed 5/8/02 Wed 5/8/02 0%
350 Edge Forms 2nd Half SOG 7d Wed 5/1/02 Thu 5/9/02 0%
351 Rebar 2nd Half SOG 7d Wed 5/8/02 Thu 5/16/02 0%
352 Pour 2nd Half SOG 0d Thu 5/16/02 Thu 5/16/02 0%
353 STRUCTURAL CONSTRUCTION 12W WED 3/6/02 WED 5/29/02 0%
354 Erect, Bolt & Weld Structural Steel 2w Wed 3/6/02 Tue 3/19/02 0%
355 Metal Decking 3.4w Mon 3/18/02 Tue 4/9/02 0%
356 Prep 2nd Deck 4d Mon 4/1/02 Thu 4/4/02 0%
357 Pour 2nd Deck 1d Fri 4/5/02 Fri 4/5/02 0%
358 Prep 3rd Deck 4d Mon 4/8/02 Thu 4/11/02 0%
359 Pour 3rd Deck 1d Fri 4/12/02 Fri 4/12/02 0%
360 Prep Roof 17d Thu 3/28/02 Fri 4/19/02 0%
361 Pour Roof 1d Mon 4/22/02 Mon 4/22/02 0%
362 Pour stair #1 (1 thru Roof) 1d Mon 4/8/02 Mon 4/8/02 0%
363 Pour Stair #2 (1 thru 3) 1d Mon 4/15/02 Mon 4/15/02 0%
364 Fireproofing 5w Fri 4/19/02 Thu 5/23/02 0%
365 Roofing 3w Tue 4/23/02 Mon 5/13/02 0%
366 F/S Risers 2w Wed 5/15/02 Wed 5/29/02 0%
367 Start Curtain Wall 0w Fri 5/17/02 Fri 5/17/02 0%
368 Structural Completion 0w Fri 5/31/02 Fri 5/31/02 0%
369 Complete Construction 12.4w Mon 6/3/02 Wed 8/28/02 0%
370 Shell Complete 0w Wed 8/28/02 Wed 8/28/02 0%
371 TENANT DESIGN (TARGET) 49W THU 6/14/01 FRI 5/31/02 0%
372 TI Programming 12w Thu 6/14/01 Fri 9/7/01 0%
373 Schematic Design 12w Fri 8/31/01 Tue 11/27/01 0%
374 Details of all Tenant U'gnd Utilities & Struct. Const. 0w Mon 11/5/01 Mon 11/5/01 0%
Changes
375 Owner / Tenant Approval of Schematic Package 3w Mon 11/19/01 Tue 12/11/01 0%
376 Owner / Tenant Approved Tenant U'gnd Util. & Struct. 0w Tue 12/11/01 Tue 12/11/01 0%
Const. Changes
377 TI Design Development / Construction Documents 14w Mon 11/19/01 Thu 2/28/02 0%
378 TI Permit 12w Fri 3/8/02 Fri 5/31/02 0%
379 TENANT CONSTRUCTION (TARGET) 25W MON 6/3/02 SAT 11/30/02 0%
380 Tenant Construction 180ed Mon 6/3/02 Sat 11/30/02 0%
381 Building D Move-in (Target) 0ew Sat 11/30/02 Sat 11/30/02 0%
[Flowchart appears here]
EXHIBIT E
ACKNOWLEDGMENT OF RENT COMMENCEMENT DATE
This Acknowledgment is executed as of_________,___ by SLOUGH BTC, LLC, a
Delaware limited liability company ("Landlord"), and EOS BIOTECHNOLOGY, INC.,
a Delaware corporation ("Tenant"), pursuant to Section 2.4 of the
Build-to-Suit Lease dated June 1, 2001 between Landlord and Tenant (the
"Lease") covering premises located at 0000 Xxxxxxxx Xxxxxxxxx, Xxxxx Xxx
Xxxxxxxxx, XX 00000 (the "Building").
Landlord and Tenant hereby acknowledge and agree as follows:
1. The Rent Commencement Date under the Lease is ___________,_____.
2. The termination date under the Lease shall be ____________,___ subject to
any applicable provisions of the Lease for extension or early termination
thereof.
3. The square footage of the Building as finally designed and built, measured
in accordance with Section 3.1(d) of the Lease, is ___________ square feet.
4. Tenant accepts the Building and acknowledges the satisfactory completion
of all Improvements therein required to be made by Landlord subject only to
(a) any applicable "punch list" or similar procedures specifically provided
under the Lease or under the Workletter governing such work, and (b)
Landlord's warranties and representations set forth in Section 5.2 of the
Lease.
EXECUTED as of the date first set forth above.
"Landlord" "Tenant"
SLOUGH BTC, LLC, a Delaware limited EOS BIOTECHNOLOGY, INC., a Delaware
liability company corporation
By: Slough Estates USA Inc., a Delaware corporation,
Its Manager
__________________________________________________
By:
___________________________
Xxxxx X. Xxxxxx, Xx., M.D.
President and CEO
By: By:
_____________________________ ____________________________
Its: Its:
___________________________ __________________________
