California-San Diego-3520/3550 Dunhill Street Lease - General Atomics and Ixsys Inc.
LEASE
BY AND BETWEEN
GENERAL ATOMICS AND IXSYS, INC
1. PARTIES, RECITALS, AND GENERAL AGREEMENT. This Lease, dated, for reference
purposes only, June 1, 1993 is made by and between General Atomics, a California
Corporation (herein called "Lessor") (Refer to Paragraph 47) and IXSYS, Inc., a
Delaware Corporation (herein called "Lessee")
RECITALS:
Under terms of a Lease dated March 21, 1990 and six subsequent amendments,
Lessee occupies approximately 6605 net square feet of improved laboratory and
office space in Building 2, at 3550 General Atomics Court.
Lessee desires to expand its premises and agrees to relocate its operations to
Lessor's buildings at 3520 (Building 6) and 3550 Dunhill Street (Building 3)
located in the Sorrento West Industrial Park.
Lessee desires to terminate its Lease for the premises at 3550 General Atomics
Court as soon as relocation is completed.
Specialty Laboratories, Inc. a tenant occupying approximately 14,000 gross
square feet in Building 6, under lease with Lessor, has laboratory space surplus
to its needs and desires to terminate its Lease and sell its leasehold and
personal property interest to the Lessee.
Lessor desires to accommodate the Specialty Laboratories, Inc. lease termination
in favor of leasing to Lessee all the vacated Specialty Laboratories premises
and the majority of 11,000 gross square feet of administrative space in Building
3.
Lessee desires to have Lessor install and finance certain leasehold improvements
in both Buildings 3 and 6.
Lessee desires to lease said space for a period of five years commencing with
completion of installation of certain leasehold improvements in the space termed
"first-in space".
PARTIES THEREFORE AGREE AS FOLLOWS:
Lessor shall make best effort to make certain that Specialty Laboratories
diligently pursues vacating Building 6 premises by mid-July 1993.
Lessor shall make best effort to prepare design, have leasehold improvements
installed and prepare spaces in Buildings 3 and 6 for Lessee's possession by
September 15, 1993.
Lessor agrees to finance certain leasehold improvements over the term of the
Lease at 12 percent interest to be paid back as added rent by Lessee over the
period remaining on the term of the Lease. Lessee shall have the option to
directly pay for part or all of the leasehold improvements, rather than finance
improvements through Lessor.
Lessee agrees to diligently pursue the specification of needed leasehold
improvements required to be installed prior to taking possession.
Lessee shall make the determination of acceptability of Building 6 Laboratories
(vacated by Specialty Laboratories, Inc.) as it relates to biological hazards
created by the current tenant and confirm its decision regarding need for
decontamination. Determination shall be made prior to Lessor agreeing to
termination of current tenant's lease.
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Lessee shall take possession of the Sorrento West premises as soon as the
"first-in" leasehold improvements are completed, about September 15, 1993.
Lessee shall relocate its operation from Building 2, 3550 General Atomics Court,
and surrender the premises to Lessor in accordance with the Lease dated March
21, 1990. Execution of the Lease of Buildings 3 and 6 is considered formal
notice of Lessee's intent to terminate.
Lessee shall negotiate the terms of an agreement and make a direct purchase of
Specialty Laboratories, Inc. building leasehold interest. Lessee shall provide
Lessor written confirmation of purchase in the form of a contract. Lessee shall
assume responsibility for this leasehold interest pursuant to Paragraphs 6.3 and
7.2(c) of this Lease as if Lessee had installed said leasehold improvements.
Lessee shall negotiate the terms of an agreement and make direct purchase, if it
so desires, of Specialty Laboratories, Inc. personal property and fixture
inventory. Lessee shall provide Lessor written confirmation of purchase in the
form of a contract with attached inventory listing items purchased. Lessee shall
assume responsibility for personal property and fixture installation and removal
pursuant to Paragraph 7.2(c) of this Lease as if Lessee had installed said
equipment.
Lessor shall not be responsible to guarantee or secure the Specialty
Laboratories, Inc. ownership interest of building leasehold improvements, or of
fixtures and personal property purchased by Lessee.
Lessor grants Lessee permission to access the Lessor's Torrey Pines Industrial
Center for use of the central cafeteria, private road (Tower Road), fitness
center and outside recreation center all in accordance with Lessor's site access
and use regulations. This privilege shall not be construed as part of the common
area under Paragraph 2 of the Lease. (Refer to Exhibit A-5).
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STANDARD INDUSTRIAL LEASE -- MULTI-TENANT
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
[LOGO]
2. PREMISES, PARKING AND COMMON AREAS.
2.1 PREMISES. LESSOR hereby LEASES to LESSEE and LESSEE LEASES from LESSOR
for the term, at the rental, and upon all of the conditions set forth herein,
real property situated in the County of San Diego, State of California commonly
known as approximately 9626 GSF of improved office space in Building 3 at 3550
Dunhill Street and approximately 14,000 GSF of improved laboratory space in
Building 6 at 3520 Dunhill Street located and described on Exhibits A-1, A-2,
A-3, A-4, & A-5, herein referred to as the "PREMISES", as may be outlined on an
Exhibit attached hereto, including rights to the Common AREAS as hereinafter
specified but not including any rights to the roof of the PREMISES or to any
Building in the Industrial Center. The PREMISES are a portion of a building,
herein referred to as the "Building." The PREMISES, the Building, the Common
AREAS, the land upon which the same are located, along with all other buildings
and improvements thereon, are herein collectively referred to as the "Industrial
Center."
2.2 VEHICLE PARKING. LESSEE shall be entitled to 71 vehicle parking
spaces, unreserved and unassigned, on those portions of the Common AREAS
designated by LESSOR for parking. LESSEE shall not use more parking spaces than
said number. Said parking spaces shall be used only for parking by vehicles no
larger than full size passenger automobiles or pick-up trucks, herein called
"Permitted Size Vehicles." Vehicles other than Permitted Size Vehicles are
herein referred to as "Oversized Vehicles."
2.2.1 LESSEE shall not permit or allow any vehicles that belong to or
are controlled by LESSEE or LESSEE'S employees, suppliers, shippers, customers,
or invitees to be loaded, unloaded, or parked in AREAS other than those
designated by LESSOR for such activities.
2.2.2 If LESSEE permits or allows any of the prohibited activities
described in paragraph 2.2 of this LEASE, then LESSOR shall have the right,
without notice, in addition to such other rights and remedies that it may have,
to remove or tow away the vehicle involved and charge the cost to LESSEE, which
cost shall be immediately payable upon demand by LESSOR.
2.3 COMMON AREAS -- DEFINITION. The term "Common AREAS" IS DEFINED AS ALL
AREAS and facilities outside the PREMISES and within the exterior boundary line
of the Industrial Center that are provided and designated by the LESSOR from
time to time for the general non-exclusive use of LESSOR, LESSEE and of other
LESSEES of the Industrial Center and their RESPECTIVE EMPLOYEES, suppliers,
shippers, customers and invitees, including parking AREAS, loading and unloading
AREAS, trash AREAS, roadways, sidewalks, walkways, parkways, driveways and
landscaped AREAS.
2.4 COMMON AREAS -- LESSEE'S RIGHTS. LESSOR hereby grants to LESSEE, for
the benefit of LESSEE 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, the Common AREAS as they exist from
time to time, subject to any rights, powers, and privileges reserved by LESSOR
under the terms hereof or under the terms of any rules and regulations or
restrictions governing the use of the Industrial Center. Under no circumstances
shall the right herein granted to use the Common AREAS be deemed to include the
right to store any property, temporarily or permanently, in the Common AREAS.
Any such storage shall be permitted only by the prior written consent of LESSOR
or LESSOR'S DESIGNATED AGENT, which consent may be revoked at any time. In the
event that any unauthorized storage shall occur then LESSOR shall have the
right, without notice, in addition to such other rights and remedies that it may
have, to remove the property and charge the cost to LESSEE, which cost shall be
immediately payable upon demand by LESSOR.
2.5 COMMON AREAS -- RULES AND REGULATIONS. LESSOR or such other person(s)
as LESSOR may appoint shall have the exclusive control and management of the
Common AREAS and shall have the right, from time to time, to establish, modify,
amend and enforce reasonable rules and regulations with respect thereto. LESSEE
agrees to abide by and conform to all such rules and regulations, and to cause
its employees, suppliers, shippers, customers and invitees to so abide and
conform. LESSOR shall not be responsible to LESSEE for the non-compliance with
said rules and regulations by other LESSEES of the Industrial Center.
2.6 COMMON AREAS -- CHANGES. LESSOR shall have the right, in LESSOR'S sole
discretion, from time to time:
(a) To make changes to the Common AREAS, including, without
limitation, changes in the location, size, shape and number of driveways,
entrances, parking spaces, parking AREAS, loading and unloading AREAS, ingress,
egress, direction of traffic, landscaped AREAS and walkways; (b) To close
temporarily any of the Common AREAS for maintenance purposes so long as
reasonable access to the PREMISES remains available; (c) To designate other land
outside the boundaries of the Industrial Center to be a part of the Common
AREAS; (d) To add additional buildings and improvements to the Common AREAS; (e)
To use the Common AREAS while engaged in making additional improvements, repairs
or alterations to the Industrial Center, or any portion thereof; (f) To do and
perform such other acts and make such other changes in, to or with respect to
the Common AREAS and Industrial Center as LESSOR may, in the exercise of sound
business judgment, deem to be appropriate.
2.6.1 LESSOR shall at all times provide the parking facilities
required by applicable law and in no event shall the number of parking spaces
that LESSEE is entitled to under paragraph 2.2 be reduced.
3. TERM.
3.1 TERM. The term of this LEASE shall be for approximately five (5) years
commencing on Refer to Paragraph 49 and ending on Refer to Paragraph 49 unless
sooner terminated pursuant to any provision hereof.
3.2 DELAY IN POSSESSION. Notwithstanding said commencement date, if for
any reason LESSOR cannot deliver possession of the PREMISES to LESSEE on said
date, LESSOR shall not be subject to any liability therefor, nor shall such
failure affect the validity of this LEASE or the obligations of LESSEE hereunder
or extend the term hereof, but in such case, LESSEE shall not be obligated to
pay rent or perform any other obligation of LESSEE under the terms of this
LEASE, except as may be otherwise provided in this LEASE, until possession of
the PREMISES IS TENDERED TO LESSEE; provided, however, that if LESSOR shall not
have delivered possession of the PREMISES within one hundred twenty (120) days
from said commencement date, LESSEE may, at LESSEE'S option, by notice in
writing to LESSOR within ten (10) days thereafter, cancel this LEASE, in which
event the parties shall be discharged from all obligations hereunder; provided
further, however, that if such written notice of LESSEE is not received by
LESSOR within said ten (10) day period, LESSEE'S right to cancel this LEASE
hereunder shall terminate and be of no further force or effect.
3.3 EARLY POSSESSION. If LESSEE occupies the PREMISES prior to said
commencement date, such occupancy shall be subject to all provisions of this
LEASE, such occupancy shall not advance the termination DATE, and LESSEE shall
pay rent for such period at the initial monthly rates set forth below.
4. RENT.
4.1 BASE RENT. LESSEE shall pay to LESSOR, as BASE RENT for the PREMISES,
without any offset or deduction, except as may be otherwise expressly provided
in this LEASE, on the 1st day of each month of the term hereof, monthly payments
in advance of $17,011, Seventeen Thousand Eleven Dollars. LESSEE shall pay
LESSOR upon execution hereof $17,011 as BASE RENT for the first month. Rent for
any period during the term hereof which is for less than one month shall be a
pro rata portion of the BASE RENT. Rent shall be payable in lawful money of the
United States to LESSOR at the address stated herein or to such other persons or
at such other places as LESSOR may designate in writing.
4.2 OPERATING EXPENSES. LESSEE shall pay to LESSOR during the term hereof,
in addition to the BASE RENT, LESSEE'S Share, as hereinafter defined, of all
Operating Expenses, as hereinafter defined, during EACH CALENDAR YEAR of the
term of this LEASE, in accordance with the following provisions:
(a) "LESSEE'S SHARE" is defined, for purposes of this LEASE, AS
__________ percent. Bldg. 3 - 46.24%, Bldg. 6 - 58.06%,
Industrial Ctr - 91.92%.
(b) "OPERATING EXPENSES" is defined, for purposes of this LEASE, as
all costs incurred by LESSOR, if any, for:
(i) The operation, repair and maintenance, in neat, clean, good
order and condition, of the following:
(aa) THE COMMON AREAS, including parking AREAS, loading and
unloading AREAS, trash AREAS, ROADWAYS, SIDEWALKS, WALKWAYS, PARKWAYS,
DRIVEWAYS, LANDSCAPED AREAS, striping, bumpers, irrigation systems, Common AREA
lighting facilities and fences and gates;
(bb) TRASH DISPOSAL SERVICES;
(cc) TENANT DIRECTORIES;
(dd) FIRE DETECTION SYSTEMS including sprinkler system
maintenance and repair;
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(ee) SECURITY SERVICES;
(ff) Any other SERVICE to be provided by LESSOR that is
ELSEWHERE in this LEASE STATED TO BE AN "OPERATING
EXPENSE;"
(ii) Any deductible portion of an insured loss concerning any
of the items or matters described in this paragraph 4.2;
(iii) The cost of the premiums for the liability and property
insurance policies to be maintained by LESSOR under
paragraph 8 hereof;
(iv) The amount of the real property tax to be paid by LESSOR
under paragraph 10.1 hereof;
(v) The cost of water, gas and electricity to service the
Common AREAS.
(c) The inclusion of the improvements, facilities and services set
forth in paragraph 4.2(b)(i) of the definition of Operating Expenses shall not
be deemed to impose an obligation upon LESSOR to either have said improvements
or facilities or to provide those services unless the industrial Center already
has the same. LESSOR already provides the services, or LESSOR has agreed
elsewhere in this LEASE to provide the same or some of them.
(d) LESSEE'S Share of Operating Expenses shall be payable by LESSEE
within ten (10) days after a reasonably detailed statement of actual expenses
is presented to LESSEE by LESSOR. At LESSOR's option, however, an amount may be
estimated by LESSOR from time to time of LESSEE'S Share of annual Operating
Expenses and the same shall be payable monthly or quarterly, as LESSOR shall
designate, during each twelve-month period of the LEASE term, on the same day
as the BASE RENT is due hereunder, in the event that LESSEE PAYS LESSOR's
ESTIMATE OF LESSEE'S SHARE OF OPERATING EXPENSES as aforesaid. LESSOR shall
deliver to LESSEE within sixty (60) days after the expiration of EACH CALENDAR
YEAR A REASONABLY DETAILED STATEMENT SHOWING LESSEE'S Share of the actual
OPERATING EXPENSES incurred during the preceding year. If LESSEE'S payments
under this paragraph 4.2(d) during said preceding year exceed LESSEE'S Share as
indicated on said statement, LESSEE shall be entitled to credit the amount of
such overpayment against LESSEE'S Share of Operating Expenses next falling
due. If LESSEE'S payments under this paragraph during said preceding year were
less than LESSEE'S Share as indicated on said statement. LESSEE shall pay to
LESSOR the amount of the deficiency within ten (10) days after delivery by
LESSOR to LESSEE of said statement.
5. SECURITY DEPOSIT. LESSEE shall deposit with LESSOR upon execution hereof
$24,100 Refer to Paragraph 48 as security for LESSEE'S faithful performance of
LESSEE'S obligations hereunder. If LESSEE fails to pay rent or other charges
due hereunder, or otherwise defaults with respect to any provision of this
LEASE, LESSOR may use, apply or, retain all or any portion of said deposit for
the payment of any rent or other charge in default or for the payment of any
other sum to which LESSOR may become obligated by reason of LESSEE'S default, or
to compensate LESSOR for any loss or damage which LESSOR may suffer thereby. If
LESSOR so uses or applies all or any portion of said deposit, LESSEE shall
within ten (10) days after written demand therefor deposit cash with LESSOR in
an amount sufficient to restore said deposit to the full amount then required of
LESSEE. If the monthly rent shall, from time to time, increase during the term
of this LEASE, LESSEE shall, at the time of such increase, deposit with LESSOR
additional money as a security deposit so that the total amount of the security
deposit held by LESSOR shall at all times bear the same proportion to the then
current BASE RENT as the initial security deposit bears to the initial BASE RENT
set forth in paragraph 4. LESSOR shall not be required to keep said security
deposit separate from its general accounts. If LESSEE performs all of LESSEE'S
obligations hereunder, said deposit, or so much thereof as has not theretofore
been applied by LESSOR, shall be returned, without payment of interest or other
increment for its use, to LESSEE (or, at LESSOR's option, to the last assignee,
if any, of LESSEE'S interest hereunder) at the expiration of the term hereof,
and after LESSEE has vacated the PREMISES. No trust relationship is created
herein BETWEEN LESSOR and LESSEE with respect to said SECURITY DEPOSIT.
6. USE.
6.1 USE. THE PREMISES SHALL BE USED AND OCCUPIED only for office, R&D,
and manufacturing for biomedical products in compliance with M1A zoning under
the City of San Diego Municipal Code or any other use which is reasonably
comparable and for no other purpose.
6.2 COMPLIANCE WITH LAW.
(a) LESSOR warrants to LESSEE that the PREMISES, in the state
existing on the date that the LEASE term commences, but without regard to the
use for which LESSEE will occupy the PREMISES, does not violate any covenants or
restrictions of record, or any applicable building code, regulation of ordinance
in effect on such LEASE term commencement date. In the EVENT IT IS DETERMINED
THAT THIS WARRANTY HAS BEEN VIOLATED, then it shall be the obligation of the
LESSOR, after written notice from LESSEE, to promptly, AT LESSOR'S SOLE COST AND
EXPENSE, rectify any such violation. In the event LESSEE DOES NOT GIVE TO LESSOR
WRITTEN NOTICE of the VIOLATION of this WARRANTY WITHIN SIX MONTHS FROM THE DATE
that the LEASE term commences, the correction of the same shall be the
obligation of the LESSEE at LESSEE'S sole cost. The warranty contained in this
paragraph 6.2(a) shall be of no force or effect if, prior to the date of this
LEASE, LESSEE WAS AN OWNER or OCCUPANT of the PREMISES and, in such event,
LESSEE shall correct any such violation at LESSEE'S sole cost.
(b) Except as provided in paragraph 6.2(a) LESSEE shall, AT LESSEE'S
EXPENSE, promptly comply with all APPLICABLE STATUTES, ORDINANCES, rules,
regulations, orders, covenants and restrictions of record, and requirements of
any fire insurance underwriters or rating bureaus, now in effect or which may
hereafter come into effect, whether or not they reflect a change in policy from
that now existing, during the term or any part of the term hereof, relating in
any manner to the PREMISES and the occupation and use by LESSEE of the PREMISES
and of the Common AREAS. LESSEE shall not use nor permit the use of the PREMISES
or the Common AREAS in any manner that will tend to create waste or a nuisance
or shall tend to disturb other occupants of the Industrial Center. Refer to
Paragraph 52.
6.3 CONDITION OF PREMISES.
(a) LESSOR shall deliver the PREMISES to LESSEE clean and free of
debris on the LEASE commencement date (unless LESSEE is already in possession)
and LESSOR warrants to LESSEE that the plumbing, lighting, air conditioning,
heating, and loading doors that existed in the PREMISES prior to installing
LEASEhold improvements and remain subsequent shall be in good operating
condition on the LEASE commencement date. In the event that it is determined
that this warranty has been violated, then it shall be the obligation of LESSOR,
after receipt of written notice from LESSEE setting forth with specificity the
nature of the violation, to promptly, at LESSOR's sole cost, rectify such
violation. LESSEE'S failure to give such written notice to LESSOR within six
months after the LEASE commencement date shall cause the conclusive presumption
that LESSOR has complied with all of LESSOR's obligations hereunder. The
warranty contained in this paragraph 6.3(a) shall be of no force or effect if
prior to the date of this LEASE. LESSEE was an owner or occupant of the
PREMISES.
(b) Except as otherwise provided in this LEASE, LESSEE hereby accepts the
PREMISES in their condition existing as of the LEASE commencement date or the
date that LESSEE takes possession of the PREMISES, whichever is earlier, subject
to all applicable zoning, municipal county and state laws, ordinances and
regulations governing and regulating the use of the PREMISES, and any covenants
or restrictions of record, and accepts this LEASE subject thereto and to all
matters disclosed thereby and by any exhibits attached hereto. LESSEE
acknowledges that neither LESSOR nor LESSOR's agent has made any representation
or warranty as to the present or future suitability of the PREMISES for the
conduct of LESSEE'S business.
7. MAINTENANCE, REPAIRS, ALTERATIONS AND COMMON AREA SERVICES.
7.1 LESSOR'S OBLIGATIONS. Subject to the provisions of paragraphs 4.2
(Operating Expenses), 6 (Use), 7.2 (LESSEE'S Obligations) and 9 (Damage or
Destruction) and except for damage caused by any negligent or intentional act or
omission of LESSEE, LESSEE'S employees, suppliers, shippers, customers, or
invitees, in which event LESSEE shall repair the damage, LESSOR, at LESSOR's
expense, subject to reimbursement pursuant to paragraph 4.2, shall keep in good
condition and repair the foundations, exterior walls, structural condition of
interior bearing walls, and roof of the PREMISES, as well as the parking lots,
walkways, driveways, landscaping, fences, signs and utility installations of the
Common AREAS and all parts thereof, as well as providing the services for which
there is an Operating Expense pursuant to paragraph 4.2. LESSOR shall not,
however, be obligated to paint the exterior or interior surface of exterior
walls, nor shall LESSOR be required to maintain, repair or replace windows,
doors or plate glass of the PREMISES. LESSOR shall have no obligation to make
repairs under this paragraph 7.1 until a reasonable time after receipt of
written notice from LESSEE of the need for such repairs. LESSEE expressly waives
the benefits of any statute now or hereafter in effect which would otherwise
afford LESSEE the right to make repairs at LESSOR's expense or to terminate this
LEASE because of LESSOR's failure to keep the PREMISES in good order, condition
and repair. LESSOR shall not be liable for damages or loss of any kind or nature
by reason of LESSOR's failure to furnish any Common AREA Services when such
failure is caused by accident, breakage, repairs, strikes, lockout, or other
labor disturbances or disputes of any character, or by any other cause beyond
the reasonable control of LESSOR.
7.2 LESSEE'S OBLIGATIONS.
(a) Subject to the provisions of paragraph 6 (Use), 7.1 (LESSOR's
Obligations, and 9 (Damage or Destruction), LESSEE, at LESSEE'S expense, shall
keep in good order, condition and repair the PREMISES and every part thereof
(whether or not the damaged portion of the PREMISES or the means of repairing
the same are reasonably or readily accessible to LESSEE) including, without
limiting the generality of the foregoing, all plumbing, heating, ventilating and
air conditioning systems (LESSEE shall procure and maintain, at LESSEE'S
EXPENSE, a ventilating and air conditioning system maintenance contract),
electrical and lighting facilities and equipment within the PREMISES, fixtures,
interior walls and interior surfaces of exterior walls, ceilings, windows,
doors, plate glass, and skylights located within the PREMISES. LESSOR reserves
the right to procure and maintain the ventilating and air conditioning system
maintenance contract and if LESSOR so elects, LESSEE shall reimburse LESSOR,
upon demand, for the cost thereof.
(b) If LESSEE fails to perform LESSEE'S obligations under this
paragraph 7.2 or under any other paragraph of this LEASE, LESSOR may enter upon
the PREMISES after ten (10) days' prior written notice to LESSEE (except in the
case of emergency, in which no notice shall be required), perform such
obligations on LESSEE'S behalf and put the PREMISES in good order, condition and
repair, and the cost thereof together with interest thereon at the maximum rate
then allowable by law shall be due and payable as additional rent to LESSER
together with LESSEE'S next BASE RENT installment.
(c) On the last day of the term hereof, or on any sooner termination,
LESSEE shall surrender the PREMISES to LESSOR in the same condition as received,
ordinary wear and tear excepted, clean and free of debris. Any damage or
deterioration of the PREMISES shall not be deemed ordinary wear and tear if the
same could have been prevented by good maintenance practices. LESSEE shall
repair any damage to the PREMISES occasioned by the installation or removal of
LESSEE'S trade fixtures, alterations, furnishings and equipment. Notwithstanding
anything to the contrary otherwise stated in this LEASE. LESSEE shall leave the
air lines, power panels, electrical distribution systems, lighting fixtures,
space heaters, air conditioning, plumbing and fencing on the PREMISES in good
operating condition.
7.3 ALTERATIONS AND ADDITIONS.
(a) LESSEE shall not, without LESSOR's prior written consent which
will not be unreasonably withheld or delayed make any alterations, improvements,
additions, or Utility Installations in, on, or about the PREMISES, or the
Industrial Center except for nonstructural alterations to the PREMISES not
exceeding $2,500 in cumulative costs, during the term of this LEASE. In any
event, whether or not in excess of $2,500 in cumulative cost, LESSEE shall make
no change or alteration to the
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exterior of the PREMISES nor the exterior of the Building nor the Industrial
Center without LESSOR's prior written consent. As used in this paragraph 7.3 the
term "Utility Installation" shall mean carpeting, window coverings, air lines,
power panels, electrical distribution systems, lighting fixtures, space heaters,
air conditioning, plumbing, and fencing. LESSOR may require that LESSEE remove
any or all of said alterations, improvements, additions or Utility Installations
at the expiration of the term, and restore the PREMISES and the Industrial
Center to their prior condition. LESSOR may require LESSEE to provide LESSOR, at
LESSEE'S sole cost and expense, a lien and completion bond in an amount equal to
one and one-half times the estimated cost of such improvements, to insure LESSOR
against any liability for mechanic's and materialmen's liens and to insure
completion of the work. Should LESSEE make any alterations, improvements,
additions or Utility Installations without the prior approval of LESSOR, LESSOR
may, at any time during the term of this LEASE, require that LESSEE remove any
or all of the same.
(b) Any alterations, improvements, additions or Utility Installations
in or about the PREMISES or the Industrial Center that LESSEE shall desire to
make and which requires the consent of the LESSOR shall be presented to LESSOR
in written form, with proposed detailed plans. If LESSOR shall give its consent,
the consent shall be deemed conditioned upon LESSEE acquiring a permit to do so
from appropriate governmental agencies, the furnishing of a copy thereof to
LESSOR prior to the commencement of the work and the compliance by LESSEE of all
conditions of said permit in a prompt and expeditious manner.
(c) LESSEE shall pay, when due, all claims for labor or materials
furnished or alleged to have been furnished to or for LESSEE at or for use in
the PREMISES, which claims are or may be secured by any mechanic's or
materialmen's lien against the PREMISES, or the Industrial Center, or any
interest therein. LESSEE shall give LESSOR not less than ten (10) days' notice
prior to the commencement of any work in the PREMISES, and LESSOR shall have the
right to post notices of non-responsibility in or on the PREMISES or the
Building as provided by law. If LESSEE shall, in good faith, contest the
validity of any such lien, claim or demand, then LESSEE shall, at its sole
expense defend itself and LESSOR against the same and shall pay and satisfy any
such adverse judgment that may be rendered thereon before the enforcement
thereof against the LESSOR or the PREMISES or the Industrial Center upon the
condition that if LESSOR shall require, LESSEE shall furnish to LESSOR a surety
bond satisfactory to LESSOR in an amount equal to such contested lien claim or
demand indemnifying LESSOR against liability for the same and holding the
PREMISES and the Industrial Center free from the effect of such lien or claim.
In addition, LESSOR may require LESSEE to pay LESSOR's attorney's fees and costs
in participating in such action if LESSOR shall decide it is to LESSOR's best
interest to do so.
(d) All alterations, improvements, additions and Utility
Installations which may be made on the PREMISES, shall be the property of
LESSOR and shall remain upon and be surrendered with the PREMISES at the
expiration of the LEASE term, unless LESSOR requires their removal pursuant to
paragraph 7.3(a). Notwithstanding the provisions of this paragraph 7.3(d),
LESSEE'S machinery and equipment, other than that which is affixed to the
PREMISES so that it cannot be removed without material damage to the PREMISES,
and other than Utility Installations, shall remain the property of LESSEE and
may be removed by LESSEE subject to the provisions of paragraph 7.2.
7.4 UTILITY ADDITIONS. LESSOR reserves the right to install new or
additional utility facilities throughout the Building and the Common Areas for
the benefit of LESSOR or LESSEE, or any other LESSEE of the Industrial Center,
including, but not by way of limitation, such utilities as plumbing, electrical
systems, security systems, communication systems, and fire protection and
detection systems, so long as such installations do not unreasonably interfere
with LESSEE'S use of the PREMISES.
8. INSURANCE; INDEMNITY.
8.1 LIABILITY INSURANCE -- LESSEE. LESSEE shall, at LESSEE'S expense,
obtain and keep in force during the term of this LEASE a policy of Combined
Single Limit Bodily Injury and Property Damage insurance insuring LESSEE and
LESSOR against any liability arising out of the use, occupancy or maintenance of
the PREMISES and the Industrial Center. Such insurance shall be in an amount not
less than $1,000,000.00 per occurrence. The policy shall insure performance by
LESSEE of the indemnity provisions of this paragraph 8. The limits of said
insurance shall not, however, limit the liability of LESSEE hereunder.
8.2 LIABILITY INSURANCE -- LESSOR. LESSOR shall obtain and keep in force
during the term of this LEASE a policy of Combined Single Limit Bodily Injury
and Property Damage Insurance, insuring LESSOR, but not LESSEE, against any
liability arising out of the ownership, use, occupancy, or maintenance of the
Industrial Center in an amount not less than $1,000,000.00 per occurrence.
8.3 PROPERTY INSURANCE. LESSOR shall obtain and keep in force during the
term of this LEASE a policy or policies of insurance covering loss or damage to
the Industrial Center improvements, but not LESSEE'S personal property,
fixtures, equipment or tenant improvements, in an amount not to exceed the full
replacement value thereof, as the same may exist from time to time, providing
protection against all perils included within the classification of fire,
extended coverage, vandalism, malicious mischief, flood (in the event same is
required by a lender having a lien on the PREMISES) special extended perils
("all risk", as such term is used in the insurance industry), plate glass
insurance and such other insurance as LESSOR deems advisable. In addition,
LESSOR shall obtain and keep in force, during the term of this LEASE, a policy
of rental value insurance covering a period of one year, with loss payable to
LESSOR, which insurance shall also cover all Operating Expenses for said period.
In the event that the PREMISES shall suffer an insured loss as defined in
paragraph 9.1(g) hereof, the deductible amounts under the casualty insurance
policies relating to the PREMISES shall be paid by LESSEE.
8.4 PAYMENT OF PREMIUM INCREASE.
(a) After the term of this LEASE has commenced, LESSEE shall not be
responsible for paying LESSEE'S Share of any increase in the property insurance
premium for the Industrial Center specified by LESSOR's insurance carrier as
being caused by the use, acts or omissions of any other LESSEE of the Industrial
Center, or by the nature of such other LESSEE'S occupancy which create an
extraordinary or unusual risk.
(b) LESSEE, however, shall pay the entirety of any increase in the
property insurance premium for the Industrial Center over what it was
immediately prior to the commencement of the term of this LEASE if the increase
is specified by LESSOR's insurance carrier as being caused by the nature of
LESSEE'S occupancy or any act or omission of LESSEE.
8.5 INSURANCE POLICIES. Insurance required hereunder shall be in companies
holding a "General Policyholders Rating" of at least B plus, or such other
rating as may be required by a lender having a lien on the PREMISES, as set
forth in the most current issue of "Best's Insurance Guide." LESSEE shall not do
so or permit to be done anything which shall invalidate the insurance policies
carried by LESSOR. LESSEE shall deliver to LESSOR copies of liability insurance
policies required under paragraph 8.1 or certificates evidencing the existence
and amounts of such insurance within seven (7) days after the commencement date
of this LEASE. No such policy shall be cancellable or subject to reduction of
coverage or other modification except after thirty (30) days prior written
notice to LESSOR. LESSEE shall, at least thirty (30) days prior to the
expiration of such policies, furnish LESSOR with renewals or "binders" thereof.
LESSEE'S insurance policies shall name LESSOR as additional insured.
8.6 WAIVER OF SUBROGATION. LESSEE and LESSOR each hereby release and
relieve the other, and waive their entire right of recovery against the other
for loss or damage arising out of or incident to the perils insured against
which perils occur in, on or about the PREMISES, whether due to the negligence
of LESSOR or LESSEE or their agents, employees, contractors and/or invitees.
LESSEE and LESSOR shall, upon obtaining the policies of insurance required give
notice to the insurance carrier or carriers that the foregoing mutual waiver of
subrogation is contained in this LEASE.
8.7 INDEMNITY.
(a) LESSEE shall indemnify and hold harmless LESSOR from and against
any and all claims arising from LESSEE'S use of the Industrial Center, or from
the conduct of LESSEE'S business or from any activity, work or things done,
permitted or suffered by LESSEE in or about the PREMISES or elsewhere and shall
further indemnify and hold harmless LESSOR from and against any and all claims
arising from any breach or default in the performance of any obligation on
LESSEE'S part to be performed under the terms of this LEASE, or arising from any
act or omission of LESSEE, or any of LESSEE'S agents, contractors, or employees,
and from and against all costs, attorney's fees, expenses and liabilities
incurred in the defense of any such claim or any action or proceeding brought
thereon, and in case any action or proceeding be brought against LESSOR by
reason of any such claim. LESSEE upon notice from LESSOR shall defend the same
at LESSEE'S expense by counsel reasonably satisfactory to LESSOR and LESSOR
shall cooperate with LESSEE in such defense. LESSEE, as a material part of the
consideration to LESSOR, hereby assumes all risk of damage to property of LESSEE
or injury to persons, in, upon or about the Industrial Center arising from any
cause and LESSEE hereby waives all claims in respect thereof against LESSOR.
(b) Refer to page 11.
8.8 EXEMPTION OF LESSOR FROM LIABILITY. LESSEE hereby agrees that LESSOR
shall not be liable for injury to LESSEE'S business or any loss of income
therefrom or for damage to the goods, wares, merchandise or other property of
LESSEE, LESSEE'S employees, invitees, customers, or any other person in or about
the PREMISES or the Industrial Center, nor shall LESSOR be liable for injury to
the person of LESSEE, LESSEE'S employees, agents or contractors, whether such
damage or injury is caused by or results from fire, steam, electricity, gas,
water or rain, or from the breakage, leakage, obstruction or other defects of
pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting
fixtures, or from any other cause, whether said damage or injury results from
conditions arising upon the PREMISES or upon other portions of the Industrial
Center, or from other sources or places and regardless of whether the cause of
such damage or injury or the means of repairing the same is inaccessible to
LESSEE. LESSOR shall not be liable for any damages arising from any act or
neglect of any other LESSEE, occupant or user of the Industrial Center, nor from
the failure of LESSOR to enforce the provisions of any other LEASE of the
Industrial Center.
9. DAMAGE OR DESTRUCTION.
9.1 DEFINITIONS.
(a) "Premises Partial Damage" shall mean if the PREMISES are damaged
or destroyed to the extent that the cost of repair is less than fifty percent of
the then replacement cost of the PREMISES.
(b) "Premises Total Destruction" shall mean if the PREMISES are
damaged or destroyed to the extent that the cost of repair is fifty percent or
more of the then replacement cost of the PREMISES.
(c) "Premises Building Partial Damage" shall mean if the Building of
which the PREMISES are a part is damaged or destroyed to the extent that the
cost to repair is less than fifty percent of the then replacement cost of the
Building.
(d) "Premises Building Total Destruction" shall mean if the Building
of which the PREMISES are a part is damaged or destroyed to the extent that the
cost to repair is fifty percent or more of the then replacement cost of the
Building.
(e) "Industrial Center Buildings" shall mean all of the buildings on
the Industrial Center site.
(f) "Industrial Center Buildings Total Destruction" shall mean if the
Industrial Center Buildings are damaged or destroyed to the extent that the cost
of repair is fifty percent or more of the then replacement cost of the
Industrial Center Buildings.
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(g) "Insured Loss" shall mean damage or destruction which was covered
by an event required to be covered by the insurance described in paragraph 8.
The fact that an Insured Loss has a deductible amount shall not make the loss
an uninsured loss.
(h) "Replacement Cost" shall mean the amount of money necessary to be
spent in order to repair or rebuild the damaged area to the condition that
existed immediately prior to the damage occurring excluding all improvements
made by lessees.
9.2 PREMISES PARTIAL DAMAGE; PREMISES BUILDING PARTIAL DAMAGE.
(a) Insured Loss: Subject to the provisions of paragraphs 9.4 and 9.5,
if at any time during the term of this Lease there is damage which is an Insured
Loss and which falls into the classification of either Premises Partial Damage
or Premises Building Partial Damage, then Lessor shall, at Lessor's expense,
repair such damage to the Premises, but not Lessee's fixtures, equipment or
tenant improvements within 120 days, notwithstanding delays caused by local,
state, and federal regulations, and this Lease shall continue in full force and
effect.
(b) Uninsured Loss: Subject to the provisions of paragraphs 9.4 and
9.5, if at any time during the term of this Lease there is damage which is not
an Insured Loss and which falls within the classification of Premises Partial
Damage or Premises Building Partial Damage, unless caused by a negligent or
willful act of Lessee (in which event Lessee shall make the repairs at Lessee's
expense), which damage prevents Lessee from using the Premises, Lessor may at
Lessor's option either (i) repair such damage as soon as reasonably possible at
Lessor's expense, in which event this Lease shall continue in full force and
effect, or (ii) give written notice to Lessee within thirty (30) days after the
date of the occurrence of such damage of Lessor's intention to cancel and
terminate this Lease as of the date of the occurrence of such damage. In the
event Lessor elects to give such notice of Lessor's intention to cancel and
terminate this Lease, Lessee shall have the right within ten (10) days after
the receipt of such notice to give written notice to Lessor of Lessee's
intention to repair such damage at Lessee's expense, without reimbursement from
Lessor, in which event this Lease shall continue in full force and effect, and
Lessee shall proceed to make such repairs as soon as reasonably possible. If
Lessee does not give such notice within such 10-day period this Lease shall be
cancelled and terminated as of the date of the occurrence of such damage.
9.3 PREMISES TOTAL DESTRUCTION; PREMISES BUILDING TOTAL DESTRUCTION;
INDUSTRIAL CENTER BUILDINGS TOTAL DESTRUCTION.
(a) Subject to the provisions of paragraph 9.4 and 9.5, if at any
time during the term of this Lease there is damage, whether or not it is an
Insured Loss, and which falls into the classification of either (i) Premises
Total Destruction, or (ii) Premises Building Total Destruction, or (iii)
Industrial Center Buildings Total Destruction, then Lessor may at Lessor's
option either (i) repair such damage or destruction, but not Lessee's fixtures,
equipment or tenant improvements, as soon as reasonably possible at Lessor's
expense, and this Lease shall continue in full force and effect, or (iii) give
written notice to Lessee within thirty (30) days after the date of occurrence
of such damage of Lessor's intention to cancel and terminate this Lease, in
which case this Lease shall be cancelled and terminated as of the date of the
occurrence of such damage.
9.4 DAMAGE NEAR END OF TERM.
(a) Subject to paragraph 9.4(b), if at any time during the last six
months of the term of this Lease there is substantial damage, whether or not an
Insured Loss, which falls within the classification of Premises Partial Damage,
Lessor may at Lessor's option cancel and terminate this Lease as of the date of
occurrence of such damage by giving written notice to Lessee of Lessor's
election to do so within 30 days after the date of occurrence of such damage.
(b) Notwithstanding paragraph 9.4(a), in the event that Lessee has an
option to extend or renew this Lease, and the time within which said option may
be exercised has not yet expired, Lessee shall exercise such option, if it is
to be exercised at all, no later than twenty (20) days after the occurrence of
an Insured Loss falling within the classification of Premises Partial Damage
during the last six months of the term of this Lease. If Lessee duly exercises
such option during said twenty (20) day period, Lessor shall, at Lessor's
expense, repair such damage, but not Lessee's fixtures, equipment or tenant
improvements, as soon as reasonably possible and this Lease shall continue in
full force and effect. If Lessee fails to exercise such option during said
twenty (20) day period, then Lessor may at Lessor's option terminate and cancel
this Lease as of the expiration of said twenty (20) day period by giving
written notice to Lessee of Lessor's election to do so within ten (10) days
after the expiration of said twenty (20) day period, notwithstanding any term
or provision in the grant of option to the contrary.
9.5 ABATEMENT OF RENT; LESSEE'S REMEDIES.
(a) In the event Lessor repairs or restores the Premises pursuant to
the provisions of this paragraph 9, the rent payable hereunder for the period
during which such damage, repair or restoration continues shall be abated in
proportion to the degree to which Lessee's use of the Premises is impaired.
Except for abatement of rent, if any, Lessee shall have no claim against Lessor
for any damage suffered by reason of any such damage, destruction, repair or
restoration.
(b) If Lessor shall be obligated to repair or restore the Premises
under the provisions of this paragraph 9 and shall commence such repair or
restoration within ninety (90) days after such obligation shall accrue, Lessee
may at Lessee's option cancel and terminate this Lease by giving Lessor written
notice of Lessee's election to do so at any time prior to the commencement of
such repair or restoration. In such event this Lease shall terminate as of the
date of such notice.
9.6 TERMINATION -- ADVANCE PAYMENTS. Upon termination of this Lease
pursuant to this paragraph 9, an equitable adjustment shall be made concerning
advance rent and any advance payment made by Lessee to Lessor. Lessor shall, in
addition, return to Lessee so much of Lessee's security deposit as has not
theretofore been applied by Lessor.
10. REAL PROPERTY TAXES.
10.1 PAYMENT OF TAXES. Lessor shall pay the real property tax, as defined
in paragraph 10.3, applicable to the Industrial Center subject to reimbursement
by Lessee of Lessee's Share of such taxes in accordance with the provision of
paragraph 4.2, except as otherwise provided in paragraph 10.2.
10.2 ADDITIONAL IMPROVEMENTS. Lessee shall not be responsible for paying
Lessee's Share of any increase in real property tax specified in the tax
assessor's records and work sheets as being caused by additional improvements
place upon the Industrial Center by other lessees or by Lessor for the
exclusive enjoyment of such other lessees. Lessee shall, however, pay to Lessor
at the time that Operating Expenses are payable under paragraph 4.2(c) the
entirety of any increase in real property tax if assessed solely by reason of
additional improvements placed upon the Premises by Lessee or at Lessee's
request.
10.3 DEFINITION OF "REAL PROPERTY TAX." As used herein, the term "real
property tax" shall include any form of real estate tax or assessment, general,
special, ordinary or extraordinary, and any license fee, commercial rental tax,
improvement bond or bonds, levy or tax (other than inheritance, personal
income or estate taxes) imposed on the Industrial Center or any portion thereof
by any authority having the direct or indirect power to tax, including any
city, county, state or federal government, or any school, agricultural,
sanitary, fire, street, drainage or other improvement district thereof, as
against any legal or equitable interest of Lessor in the Industrial Center or
in any portion thereof, as against Lessor's right to rent or other income
therefrom, and as against Lessor's business of leasing the Industrial Center.
The term "real property tax" shall also include any tax, fee, levy, assessment
or charge (i) in substitution of, partially or totally, any tax, fee, levy,
assessment or charge hereinabove included within the definition of "real
property tax," or (ii) the nature of which was hereinbefore included within the
definition of "real property tax," or (iii) which is imposed for a service or
right not charged prior to June 1, 1978, or, if previously charged, has been
increased since June 1, 1978, or (v) which is imposed by reason of this
transaction, any modifications or changes hereto, or any transfers hereof.
10.4 JOINT ASSESSMENT. If the Industrial Center is not separately assessed,
Lessee's Share of the real property tax liability shall be an equitable
proportion of the real property taxes for all of the land and improvements
included within the tax parcel assessed, such proportion to be determined by
Lessor from the respective valuations assigned in the assessor's work sheets or
such other information as may be reasonably available, Lessor's reasonable
determination thereof, in good faith, shall be conclusive.
10.5 PERSONAL PROPERTY TAXES.
(a) Lessee shall pay prior to delinquency all taxes assessed against
and levied upon trade fixtures, furnishings, equipment and all other personal
property of Lessee contained in the Premises or elsewhere. When possible,
Lessee shall cause said trade fixtures, furnishings, equipment and all other
personal property to be assessed and billed separately from the real property
of Lessor.
(b) If any of Lessee's said personal property shall be assessed with
Lessor's real property, Lessee shall pay to Lessor the taxes attributable to
Lessee within ten (10) days after receipt of a written statement setting forth
the taxes applicable to Lessee's property.
11. UTILITIES. Lessee shall pay for all water, gas, heat, light, power,
telephone and other utilities and services supplied to the Premises, together
with any taxes thereon. If any such services are not separately metered to the
Premises, Lessee shall pay at Lessor's option, either Lessee's Share or a
reasonable proportion to be determined by Lessor of all charges jointly metered
with other premises in the Building.
12. ASSIGNMENT AND SUBLETTING.
12.1 LESSOR'S CONSENT REQUIRED. Lessee shall not voluntarily or by
operation of law assign, transfer, mortgage, sublet, or otherwise transfer or
encumber all or any part of Lessee's interest in the Lease of in the Premises,
without Lessor's prior written consent, which Lessor shall not unreasonably
withhold or delay. Lessor shall respond to Lessee's request for consent
hereunder in a timely manner and any attempted assignment, transfer, mortgage,
encumbrance or subletting without such consent shall be void, and shall
constitute a breach of this Lease without the need for notice to Lessee under
paragraph 13.1.
12.2 LESSEE AFFILIATE. Notwithstanding the provisions of paragraph 12.1
hereof, Lessee may assign or sublet the Premises, or any portion thereof,
without Lessor's consent, to any corporation which controls, is controlled by
or is under common control with Lessee, or to any corporation resulting from
the merger or consolidation with Lessee or to any person or entity which
acquires all the assets of Lessee as a going concern of the business that is
being conducted on the Premises, all of which are referred to as "Lessee
Affiliate," provided that before such assignment shall be effective said
assignee shall assume, in full, the obligations of Lessee under this Lease. Any
such assignment shall not, in any
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<PAGE> 7
way, affect or limit the liability of Lessee under the terms of this Lease even
if after such assignment or subletting the terms of this Lease are materially
changed or altered without the consent of Lessee, the consent of whom shall not
be necessary.
12.3 TERMS AND CONDITIONS OF ASSIGNMENT. Regardless of Lessor's consent, no
assignment shall release Lessee of Lessee's obligations hereunder or alter the
primary liability of Lessee to pay the Base Rent and Lessee's Share of Operating
Expenses, and to perform all other obligations to be performed by Lessee
hereunder. Lessor may accept rent from any person other than Lessee pending
approval or disapproval of such assignment. Neither a delay in the approval or
disapproval of such assignment nor the acceptance of rent shall constitute a
waiver or estoppel of Lessor's right to exercise its remedies for the breach of
any of the terms or conditions of this paragraph 12 or this Lease. Consent to
one assignment shall not be deemed consent to any subsequent assignment. In the
event of default by any assignee of Lessee or any successor of Lessee, in the
performance of any of the terms hereof, Lessor may proceed directly against
Lessee without the necessity of exhausting remedies against said assignee.
Lessor may consent to subsequent assignments of this Lease or amendments or
modifications to this Lease with assignees of Lessee, without notifying Lessee,
or any successor of Lessee, and without obtaining its or their consent thereto
and such action shall not relieve Lessee of liability under this Lease.
12.4 TERMS AND CONDITIONS APPLICABLE TO SUBLETTING. Regardless of Lessor's
consent, the following terms and conditions shall apply to any subletting by
Lessee of all or any part of the Premises and shall be included in subleases:
(a) Lessee hereby assigns and transfers to Lessor all of Lessee's interest
in all rentals and income arising from any sublease heretofore or hereafter made
by Lessee, and Lessor may collect such rent and income and apply same toward
Lessee's obligations under that Lease; provided, however, that until a default
shall occur in the performance of Lessee's obligations under this Lease, Lessee
may receive, collect and enjoy the rents accruing under such sublease. Lessor
shall not, by reason of this or any other assignment of such sublease to Lessor
nor by reason of the collection of the rents from a sublessee, be deemed liable
to the sublessee for any failure of Lessee to perform and comply with any of
Lessee's obligations to such sublessee under such sublease. Lessee hereby
irrevocably authorizes and directs any such sublessee, upon receipt of a written
notice from Lessor stating that a default exists in the performance of Lessee's
obligations under this Lease, to pay to Lessor the rents due and to become due
under the sublease. Lessee agrees that such sublessee shall have the right to
rely upon any such statement and request from Lessor, and that such sublessee
shall pay such rents to Lessor without any obligation or right to inquire as to
whether such default exists and notwithstanding any notice from or claim from
Lessee to the contrary. Lessee shall have no right or claim against such
sublessee or Lessor for any such rents so paid by said sublessee to Lessor.
(b) No sublease entered into by Lessee shall be effective unless and until
it has been approved in writing by Lessor. In entering into any sublease, Lessee
shall use only such form of sublease as is satisfactory to Lessor, and once
approved by Lessor, such sublease shall not be changed or modified without
Lessor's prior written consent. Any sublessee shall, by reason of entering into
a sublease under this Lease, be deemed, for the benefit of Lessor, to have
assumed and agreed to conform and comply with each and every obligation herein
to be performed by Lessee other than such obligations as are contrary to or
inconsistent with provisions contained in a sublease to which Lessor has
expressly consented in writing.
(c) If Lessee's obligations under this Lease have been guaranteed by third
parties, then a sublease, and Lessor's consent thereto, shall not be effective
unless said guarantors give their written consent to such sublease and the terms
thereof.
(d) The consent by Lessor to any subletting shall not release Lessee from
its obligations or alter the primary liability of Lessee to pay the rent and
perform and comply with all of the obligations of Lessee to be performed under
this Lease.
(e) The consent by Lessor to any subletting shall not constitute a consent
to any subsequent subletting by Lessee or to any assignment or subletting by the
sublessee. However, Lessor may consent to subsequent sublettings and assignments
of the sublease or any amendments or modifications thereto without notifying
Lessee or anyone else liable on the Lease or sublease and without obtaining
their consent and such action shall not relieve such persons from liability.
(f) In the event of any default under this Lease, Lessor may proceed
directly against Lessee, any guarantors or anyone else responsible for the
performance of this Lease, including the sublessee, without first exhausting
Lessor's remedies against any other person or entity responsible therefor to
Lessor, or any security held by Lessor or Lessee.
(g) In the event Lessee shall default in the performance of its
obligations under this Lease, Lessor, at its option and without any obligation
to do so, may require any sublessee to attorn to Lessor, in which event Lessor
shall undertake the obligations of Lessee under such sublease from the time of
the exercise of said option to the termination of such sublease; provided,
however, Lessor shall not be liable for any prepaid rents or security deposit
paid by such sublessee to Lessee or for any other prior defaults of Lessee under
such sublease.
(h) Each and every consent required of Lessee under a sublease shall also
require the consent of Lessor.
(i) No sublessee shall further assign or sublet all or any part of the
Premises without Lessor's prior written consent.
(j) Lessor's written consent to any subletting of the Premises by Lessee
shall not constitute an acknowledgement that no default then exists under this
Lease of the obligations to be performed by Lessee nor shall such consent be
deemed a waiver of any then existing default, except as may be otherwise stated
by Lessor at the time.
(k) With respect to any subletting to which Lessor has consented, Lessor
agrees to deliver a copy of any notice of default by Lessee to the sublessee.
Such sublessee shall have the right to cure a default of Lessee within ten (10)
days after service of said notice of default upon sublessee, and the sublessee
shall have a right of reimbursement and offset from and against Lessee for any
such defaults cured by the sublessee.
12.5 ATTORNEY'S FEES. In the event Lessee shall assign or sublet the
Premises or request the consent of Lessor to any assignment or subletting or if
Lessee shall request the consent of Lessor for any act Lessee proposes to do
then Lessee shall pay Lessor's reasonable attorneys fees incurred in connection
therewith, such attorneys fees not to exceed $450.00 for each such request.
13. DEFAULT; REMEDIES.
13.1 DEFAULT. The occurrence of any one or more of the following events
shall constitute a material default of this Lease by Lessee:
(a) The vacating or abandonment of the Premises by Lessee.
(b) The failure by Lessee to make any payment of rent or any other payment
required to be made by Lessee hereunder, as and when due, where such failure
shall continue for a period of three (3) days after written notice thereof from
Lessor to Lessee. In the event that Lessor serves Lessee with a Notice to Pay
Rent or Quit pursuant to applicable Unlawful Detainer statutes such Notice to
Pay Rent or Quit shall also constitute the notice required by this subparagraph.
(c) Except as otherwise provided in this Lease, the failure by Lessee to
observe or perform any of the covenants, conditions or provisions of this Lease
to be observed or performed by Lessee, other than described in paragraph (b)
above, where such failure shall continue for a period of thirty (30) days after
written notice thereof from Lessor to Lessee; provided, however, that if the
nature of Lessee's noncompliance is such that more than thirty (30) days are
reasonably required for a cure, then Lessee shall not be deemed to be in default
if Lessee commenced with such cure within said thirty (30) day period and
thereafter diligently prosecutes such cure to completion. To the extent
permitted by law, such thirty (30) day notice shall constitute the sole and
exclusive notice required to be given to Lessee upon applicable Unlawful
Detainer statutes.
(d) (i) The making by Lessee of any general arrangement or general
assignment for the benefit of creditors; (ii) Lessee becomes a "debtor" as
defined in 11 U.S.C. Section 101 or any successor statute hereto (unless, in the
case of a petition filed against Lessee, the same is dismissed within sixty (60)
days; (iii) the appointment of a trustee or receiver to take possession of
substantially all of Lessee's assets located at the Premises or of Lessee's
interest in this Lease, where possession is not restored to Lessee within thirty
(30) days; or (iv) the attachment, execution or other judicial seizure of
substantially all of Lessee's assets located at the Premises or of Lessee's
interest in this Lease, where such seizure is not discharged within thirty (30)
days. In the event that any provision of this paragraph 13.1(d) is contrary to
any applicable law, such provision shall be of no force or effect.
(e) The discovery by Lessor that any financial statement given to Lessor
by Lessee, any assignee of Lessee, any subtenant of Lessee, any successor in
interest of Lessee or any guarantor of Lessee's obligation hereunder, was
materially false.
13.2 REMEDIES. In the event of any such material default by Lessee, Lessor
may at any time thereafter, with or without notice or demand and without
limiting Lessor in the exercise of any right or remedy which Lessor may have by
reason of such default:
(a) Terminate Lessee's right to possession of the Premises by any lawful
means, in which case this Lease and the term hereof shall terminate and Lessee
shall immediately surrender possession of the Premises to Lessor. In such event
Lessor shall be entitled to recover from Lessee all damages incurred by Lessor
by reason of Lessee's default including, but not limited to, the cost of
recovering possession of the Premises; expenses of reletting, including
necessary renovation and alteration of the Premises, reasonably attorney's fees,
and any real estate commission actually paid; the worth at the time of award by
the court having jurisdiction thereof of the amount by which the unpaid rent for
the balance of the term after the time of such award exceeds the amount of such
rental loss for the same period that Lessee proves could be reasonably avoided;
that portion of the leasing commission paid by Lessor pursuant to paragraph 15
applicable to the unexpired term of this Lease.
(b) Maintain Lessee's right to possession in which case this Lease shall
continue in effect whether or not Lessee shall have vacated or abandoned the
Premises. In such event Lessor shall be entitled to enforce all of Lessor's
rights and remedies under this Lease, including the right to recover the rent as
it becomes due hereunder.
(c) Pursue any other remedy now or hereafter available to Lessor under the
laws or judicial decisions of the state wherein the Premises are located. Unpaid
installments of rent and other unpaid monetary obligations of Lessee under the
terms of this Lease shall bear interest from the date due at the maximum rate
then allowable by law.
13.3 DEFAULT BY LESSOR. Lessor shall not be in default unless Lessor fails
to perform obligations required of Lessor within a reasonable time, but in no
event later than thirty (30) days after written notice by Lessee to Lessor and
to the holder of any first mortgage or deed of trust covering the Premises whose
name and address shall have theretofore been furnished to Lessee in writing,
specifying wherein Lessor has failed to perform such obligations; provided,
however, that if the nature of Lessor's obligation is such that more than thirty
(30) days are required for performance then Lessor shall not be in default if
Lessor commences performance within such thirty (30) day period and thereafter
diligently prosecutes the same to completion.
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13.4 LATE CHARGES. LESSEE hereby acknowledges that late payment by
LESSEE to LESSOR of Base Rent. LESSEE'S Share of Operating Expenses or other
sums due hereunder will cause LESSOR to incur costs not contemplated by this
LEASE, the exact amount of which will be extremely difficult to ascertain. Such
costs include, but are not limited to processing and accounting charges, and
late charges which may be imposed on LESSOR by the terms of any mortgage or
trust deed covering the Property. Accordingly, if any installment of Base Rent.
Operating Expenses, or any other sum due from LESSEE shall not be received by
LESSOR or LESSOR'S designee within ten (10) days after such amount shall be due,
then, without any requirement for notice to LESSEE. LESSEE shall pay to LESSOR a
late charge equal to 6% of such over due amount. The parties hereby agree that
such late charge represents a fair and reasonable estimate of the costs LESSOR
will incur by reason of late payment by LESSEE. Acceptance of such ate charge by
LESSOR shall in no event constitute a waiver of LESSEE'S default with respect to
such overdue amount, nor prevent LESSOR from exercising any of the other rights
and remedies granted hereunder in the event that a late charge is payable
hereunder, whether or not collected, for three (3) consecutive installments of
any of the aforesaid monetary obligations of LESSEE, then Base Rent shall
automatically become due and payable quarterly in advance, rather than monthly,
notwithstanding paragraph 4.1 or any other provision of this LEASE to the
contrary.
14. CONDEMNATION. If the Premises or any portion thereof or the Industrial
Center are taken under the power of eminent domain, or sold under the threat of
the exercise of said power fall of which are herein called "condemnation"),
this LEASE shall terminate as to the parts so taken as of the date the
condemning authority takes title or possession, whichever first occurs, if
more than ten percent of the floor area of the Premises, or more than
twenty-five percent of that portion of the Common Areas designated as parking
for the Industrial Center is taken by condemnation. LESSEE may, at LESSEE'S
option to be exercised in writing only within ten (10) days after LESSOR shall
have given LESSEE written notice of such taking (or in the absence of such
notice, within ten (10) days after the condemning authority shall have taken
possession) terminate this LEASE as of the date the condemning authority takes
such possession. If LESSEE does not terminate this LEASE in accordance with the
foregoing, this LEASE shall remain in full force and elect as to the portion
of the premises remaining, except that the rent shall be reduced in the
proportion that the floor area of the Premises taken bears to the total floor
area of the Premises No reduction of rent shall occur if the only area taken
is that which does not have the Premises located thereon. Any award for the
taking of all or any part of the Premises under the power of eminent domain or
any payment made under threat of the exercise of such power shall be the
property of LESSOR whether such award shall be made as compensation for
diminution in value of the leasehold or for the taking of the fee, or as
severance damages, provided however, that LESSEE shall be entitled to any award
for loss of or damage to LESSEE'S trade fixtures and removable personal
property in the event that this LEASE is not terminated by reason of such
condemnation. LESSOR shall to the extent of severance damages received by
LESSOR in connection with such condemnation, repair any damage to the Premises
caused by such condemnation except to the extent that LESSEE has been
reimbursed therefor by the condemning authority. LESSEE shall pay any amount in
excess of such severance damages required to complete such repair.
15. BROKER'S FEE.
(a) Upon execution of this LEASE by both parties. LESSOR shall pay to
N/A Refer to Paragraph 51 Licensed real estate broker(s), a fee as set forth in
a separate agreement between LESSOR and said broker(s), or in the event there
is no separate agreement between LESSOR and said broker(s), the sum of $ None,
for brokerage services rendered by said broker(s) to LESSOR in this transaction.
16. ESTOPPEL CERTIFICATE.
(a) Each party (as "responding party") shall at any time upon not less
than ten (10) days prior written notice from the other party ("requesting
party") execute, acknowledge and deliver to the requesting party a statement in
writing (i) certifying that this LEASE is unmodified and in full force and
elect (or, if modified, stating the nature of such modification and certifying
that this LEASE, as so modified, is in full force and effect) and the date to
which the rent and other charges are paid in advance, if any, and (ii)
acknowledging that there are not, to the responding party's knowledge any
uncured defaults of the part of the requesting party, or specifying such
defaults if any are claimed. Any such statement may be conclusively relied upon
by any prospective purchaser or encumbrancer of the Premises or of the business
of the requesting party.
(b) At the requesting party's option, the failure to deliver such
statement within such time shall be a material default of this LEASE by the
party who is to respond, without any further notice to such party, or it shall
be conclusive upon such party that (i) this LEASE is in full force and elect,
without modification except as may be represented by the requesting party, (ii)
there are no uncured defaults in the requesting party's performance and (iii) if
LESSOR is the requesting party, not more than one month's rent has been paid in
advance.
(c) If LESSOR desires of finance, refinance, or sell the Property, or
any part thereof, LESSEE hereby agrees to deliver to any lender or purchaser
designated by LESSOR such financial statements of LESSEE as may be reasonably
required by such lender or purchaser. Such statements shall include the past
three (3) years financial statements of LESSEE. All such financial statements
shall be received by LESSOR and such lender or purchaser in confidence and
shall be used only for the purposes herein set forth.
17. LESSOR'S LIABILITY. The term "LESSOR" as used herein shall mean only
General Atomics, and in the event of any transfer of such title or interest,
LESSOR herein named (and in case of any subsequent transfers then the grantor)
shall be relieved from and after the date of such transfer of all liability as
respects LESSOR'S obligations thereafter to be performed, provided that any
funds in the hands of LESSOR or the then grantor at the time of such transfer,
in which LESSEE has an interest, shall be delivered to the grantee. The
obligations contained in this LEASE to be performed by LESSOR shall, subject as
aforesaid, be binding on LESSOR'S successors and assigns, only during their
respective periods of ownership.
18. SEVERABILITY. The invalidity of any provision of this LEASE as
determined by a court of competent jurisdiction, shall in no way affect the
validity of any other provision hereof.
19. INTEREST ON PAST-DUE OBLIGATIONS. Except as expressly herein provided,
any amount due to LESSOR not paid when due shall bear interest at the maximum
rate then allowable by law from the date due. Payment of such interest shall
not excuse or cure any default by LESSEE under this LEASE, provided, however
that interest shall not be payable on late charges incurred by LESSEE nor on
any amounts upon which late charges are paid by LESSEE.
20. TIME OF ESSENCE. Time is of the essence with respect to the
obligations to be performed under this LEASE.
21. ADDITIONAL RENT. All monetary obligations of LESSEE to LESSOR under the
terms of this LEASE, including but not limited to LESSEE'S Share of Operating
Expenses and insurance and tax expenses payable shall be deemed to be rent.
22. INCORPORATION OF PRIOR AGREEMENTS AMENDMENTS. This LEASE contains all
agreements of the parties with respect to any matter mentioned herein. No prior
or contemporaneous agreement or understanding pertaining to any such matter
shall be effective. This LEASE may be modified in writing only, signed by the
parties in interest at the time of the modification. Except as otherwise stated
in this LEASE. LESSEE hereby acknowledges that neither the real estate broker
listed in paragraph 15 hereof nor any cooperating broker on this transaction
nor the LESSOR or any employee or agents of any of said persons has made any
oral or written warranties or representations to LESSEE relative to the
condition or use by LESSEE of the Premises or the Property and LESSEE
acknowledges that LESSEE assumes all responsibility regarding the Occupational
Safety Health Act, the legal use and adaptability of the Premises and the
compliance thereof with all applicable laws and regulations in effect during
the term of this LEASE except as otherwise specifically stated in this LEASE.
23. NOTICES. Any notice required or permitted to be given hereunder shall be
in writing and may be given by personal delivery or by certified mail, and if
given personally or by mail, shall be deemed sufficiently given if addressed to
LESSEE or to LESSOR at the address noted below the signature of the respective
parties as the case may be. Either party may by notice to the other specify a
different address for notice purposes except that upon LESSEE'S taking
possession of the Premises, the Premises shall constitute LESSEE'S address for
notice purposes. A copy of all notices required or permitted to be given to
LESSOR hereunder shall be concurrently transmitted to such party or parties at
such addresses as LESSOR may from time to time hereafter designate by notice to
LESSEE.
24. WAIVERS. No waiver by LESSOR or any provision hereof shall be deemed a
waiver of any other provision hereof or of any subsequent breach by LESSEE of
the same or any other provision. LESSOR'S consent to, or approval of, any act
shall not be deemed to render unnecessary the obtaining of LESSOR'S consent to
or approval of any subsequent act by LESSEE. The acceptance of rent hereunder
by LESSOR shall not be a waiver of any preceding breach by LESSEE of any
provision hereof, other than the failure of LESSEE to pay the particular rent
so accepted, regardless of LESSOR'S knowledge of such preceding breach at the
time of acceptance of such rent.
26. HOLDING OVER. If LESSEE, with LESSOR'S consent remains in possession of
the Premises or any part thereof after the expiration of the term hereof such
occupancy shall be a tenancy from month to month upon all the provisions of
this LEASE pertaining to the obligations of LESSEE, but all Options, if any,
granted under the terms of this LEASE shall be deemed terminated and be of no
further effect during said month to month tenancy. Such continued tenancy shall
be at a rate of 125% of the amount paid by the LESSEE the last month of the term
thereof.
MULTI TENANT -- MODIFIED NET
(c) American Industrial Real Estate Association 1981
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<PAGE> 9
27. CUMULATIVE REMEDIES. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.
28. COVENANTS AND CONDITIONS. Each provision of this LEASE performable by
LESSEE shall be deemed both a covenant and a condition.
29. BINDING EFFECT; CHOICE OF LAW. Subject to any provisions hereof restricting
assignment or subletting by LESSEE and subject to the provisions of paragraph
17, this LEASE shall bind the parties, their personal representatives,
successors and assigns. This LEASE shall be governed by the laws of the State
where the Industrial Center is located and any litigation concerning this LEASE
between the parties hereto shall be initiated in the county in which the
Industrial Center is located.
30. SUBORDINATION.
(a) This LEASE, and any Option granted hereby, at LESSOR'S option, shall
be subordinate to any ground LEASE, mortgage, deed of trust, or any other
hypothecation or security now or hereafter placed upon the Industrial Center and
to any and all advances made on the security thereof and to all renewals,
modifications, consolidations, replacements and extensions thereof.
Notwithstanding such subordination, LESSEE'S right to quiet possession of the
Premises shall not be disturbed if LESSEE is not in default and so long as
LESSEE shall pay the rent and observe and perform all of the provisions of this
LEASE, unless this LEASE is otherwise terminated pursuant to its terms. If any
mortgagee, trustee or ground LESSOR shall elect to have this LEASE and any
Options granted hereby prior to the lien of its mortgage, deed of trust or
ground LEASE, and shall give written notice thereof to LESSEE, this LEASE and
such Options shall be deemed prior to such mortgage, deed of trust or ground
LEASE, whether this LEASE or such Options are dated prior or subsequent to the
date of said mortgage, deed of trust or ground LEASE or the date of recording
thereof.
(b) LESSEE agrees to execute any reasonable documents required to
effectuate an attornment, a subordination or to make this LEASE or any Option
granted herein prior to the lien of any mortgage, deed of trust or ground LEASE,
as the case may be. LESSEE'S failure to execute such documents within ten (10)
days after written demand shall constitute a material default by LESSEE
hereunder without further notice to LESSEE or, at LESSOR'S option, LESSEE does
hereby make, constitute and irrevocably appoint LESSOR as LESSEE'S
attorney-in-fact and in LESSEE'S name, place and stead, to execute such
documents in accordance with this paragraph 30(b).
31. ATTORNEY'S FEES. If either party or the broker(s) named herein bring an
action to enforce the terms hereof or declare rights hereunder, the prevailing
party in any such action, on trial or appeal, shall be entitled to his
reasonable attorney's fees to be paid by the losing party as fixed by the court.
The provisions of this paragraph shall inure to the benefit of the broker named
herein who seeks to enforce a right hereunder.
32. LESSOR'S ACCESS. LESSOR and LESSOR'S agents shall have the right to enter
the Premises at reasonable times for the purpose of inspecting the same, showing
the same to prospective purchasers, lenders, or LESSEES, and making such
alterations, repairs, improvements or additions to the Premises or to the
building of which they are part as LESSOR may deem necessary or desirable.
LESSOR may at any time place on or about the Premises or the Building any
ordinary "For Sale" signs and LESSOR may at any time during the last 120 days of
the term hereof place on or about the Premises any ordinary "For LEASE" signs.
All activities of LESSOR pursuant to this paragraph shall be without abatement
of rent, nor shall LESSOR have any liability to LESSEE for the same.
33. AUCTIONS. LESSEE shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises or the Common Areas
without first having obtained LESSOR'S prior written consent. Notwithstanding
anything to the contrary in this LEASE, LESSOR shall not be obligated to
exercise any standard of reasonableness in determining whether to grant such
consent.
34. SIGNS. LESSEE shall not place any sign upon the Premises or the Industrial
Center without LESSOR'S prior written consent. Under no circumstances shall
LESSEE place a sign on any roof of the Industrial Center.
35. MERGER. The voluntary or other surrender of this LEASE by LESSEE, or a
mutual cancellation thereof, or a termination by LESSOR, shall not work a
merger, and shall, at the option of LESSOR, terminate all or any existing
subtenancies or may, at the option of LESSOR, operate as an assignment to LESSOR
of any or all of such subtenancies.
36. CONSENTS. Except for paragraph 33 hereof, wherever in this LEASE the
consent of one party is required to an act of the other party such consent shall
not be unreasonably withheld or delayed.
37. GUARANTOR. In the event that there is a guarantor of this LEASE, said
guarantor shall have the same obligations as LESSEE under this LEASE.
38. QUIET POSSESSION. Upon LESSEE paying the rent for the Premises and
observing and performing all of the covenants, conditions and provisions on
LESSEE'S part to be observed and performed hereunder, LESSEE shall have quiet
possession of the Premises for the entire term hereof subject to all of the
provisions of this LEASE. The individuals executing this LEASE on behalf of
LESSOR represent and warrant to LESSEE that they are fully authorized and
legally capable of executing this LEASE on behalf of LESSOR and that such
execution is binding upon all parties holding an ownership interest in the
Property.
39. OPTIONS.
39.1 DEFINITION. As used in this paragraph the word "Option" has the
following meaning: (2) the option to LEASE expansion space.
39.2 OPTIONS PERSONAL. Each Option granted to LESSEE in this LEASE is
personal to the original LESSEE and may be exercised only by the original LESSEE
while occupying the Premises who does so without the intent of thereafter
assigning this LEASE or subletting the Premises or any portion thereof, and may
not be exercised or be assigned, voluntarily or involuntarily, by or to any
person or entity other than LESSEE, provided, however, that an Option may be
exercised by or assigned to any LESSEE Affiliate as defined in paragraph 12.2 of
this LEASE. The Options, if any, herein granted to LESSEE are not assignable
separate and apart from this LEASE, nor may any Option be separated from this
LEASE in any manner, either by reservation or otherwise.
39.3 MULTIPLE OPTIONS. In the event that LESSEE has any multiple options to
extend or renew this LEASE a later option cannot be exercised unless the prior
option to extend or renew this LEASE has been so exercised.
39.4 EFFECT OF DEFAULT ON OPTIONS.
(a) LESSEE shall have no right to exercise an Option, notwithstanding
any provision in the grant of Option to the contrary, (i) during the time
commencing from the date LESSOR gives to LESSEE a notice of default pursuant to
paragraph 13.1(b) or 13.1(c) and continuing until the noncompliance alleged in
said notice of default is cured, or (ii) during the period of time commencing on
the date after a monetary obligation to LESSOR is due from LESSEE and unpaid
(without any necessity for notice thereof to LESSEE) and continuing until the
obligation is paid, or (iii) at any time after an event of default described in
paragraphs 13.1(a), 13.1(d), or 13.1(e) (with LESSOR to give notice of such
default to LESSEE), nor (iv) in the event that LESSOR has given to LESSEE three
or more notices of default under paragraph 13.1(b), or paragraph 13.1(c),
whether or not the defaults are cured, during the 12 month period of time
immediately prior to the time that LESSEE attempts to exercise the subject
Option.
(b) The period of time within which an Option may be exercised shall
not be extended or enlarged by reason of LESSEE'S inability to exercise an
Option because of the provisions of paragraph 39.4(a).
(c) All rights of LESSEE under the provisions of an Option shall
terminate and be of no further force or effect, notwithstanding LESSEE'S due and
timely exercise of the Option, if, after such exercise and during the term of
this LEASE, (i) LESSEE fails to pay to LESSOR a monetary obligation of LESSEE
for a period of thirty (30) days after such obligation becomes due (without any
necessity of LESSOR to give notice thereof to LESSEE), or (ii) LESSEE fails to
commence to cure a default specified in paragraph 13.1(c) within thirty (30)
days after the date that LESSOR gives notice to LESSEE of such default and/or
LESSEE fails thereafter to diligently prosecute said cure to completion, or
(iii) LESSEE commits a default described in paragraph 13.1(a), 13.1(d) or
13.1(e) (without any necessity of LESSOR to give notice of such default to
LESSEE), or (iv) LESSOR gives to LESSEE three or more notices of default under
paragraph 13.1(b), or paragraph 13.1(c), whether or not the defaults are cured.
40. SECURITY MEASURES. LESSEE hereby acknowledges that LESSOR shall have no
obligation whatsoever to provide guard service or other security measures for
the benefit of the Premises or the Industrial Center. LESSEE assumes all
responsibility for the protection of LESSEE, its agents, and invitees and the
property of LESSEE and of LESSEE'S agents and invitees from acts of third
parties. Nothing herein contained shall prevent LESSOR, at LESSOR'S sole option,
from providing security protection for the Industrial Center or any part
thereof, in which event the cost thereof shall be included within the definition
of Operating Expenses, as set forth in paragraph 4.2(b).
41. EASEMENTS. LESSOR reserves to itself the right, from time to time, to grant
such easements, rights and dedications that LESSOR deems necessary or desirable,
and to cause the recordation of Parcel Maps and restrictions, so long as such
easements, rights, dedications, Maps and restrictions do not unreasonably
interfere with the use of the Premises by LESSEE. LESSEE shall sign any of the
aforementioned documents upon request of LESSOR and failure to do so shall
constitute a material default of this LEASE by LESSEE without the need for
further notice to LESSEE.
42. PERFORMANCE UNDER PROTEST. If at any time a dispute shall arise as to any
amount or sum of money to be paid by one party to the other under the provisions
hereof, the party against whom the obligation to pay the money is asserted shall
have the right to make payment "under protest" and such payment shall not be
regarded as a voluntary payment, and there shall survive the right on the part
of said party to institute suit for recovery of such sum. If it shall be
adjudged that there was no legal obligation on the part of said party to pay
such sum or any part thereof, said party shall be entitled to recover such sum
or so much thereof as it was not legally required to pay under the provisions of
this LEASE.
MULTI TENANT -- MODIFIED NET
(c) American Industrial Real Estate Association 1981
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<PAGE> 10
43. AUTHORITY. If Lessee is a corporation, trust, or general or limited
partnership, each individual executing this Lease on behalf of such entity
represents and warrants that he or she is duly authorized to execute and
deliver this Lease on behalf of said entity. If Lessee is a corporation, trust
or partnership, Lessee shall, within thirty (30) days after execution of this
Lease, deliver to Lessor evidence of such authority satisfactory to Lessor.
44. CONFLICT. Any conflict between the printed provisions of this Lease and
the typewritten or handwritten provisions, if any, shall be controlled by the
typewritten or handwritten provisions.
45. OFFER. Preparation of this Lease by Lessor or Lessor's agent and
submission of same to Lessee shall not be deemed an offer to lease. This Lease
shall become binding upon Lessor and Lessee only when fully executed by Lessor
and Lessee.
46. ADDENDUM. Attached hereto is an addendum or addenda containing paragraphs
47 through 54 which constitute a part of this Lease and Exhibits A-1
through A-5.
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN AND BY EXECUTION OF THIS LEASE, SHOW THEIR INFORMED
AND VOLUNTARY CONSENT THERETO THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS
LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND
EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.
THIS LEASE HAS BEEN PREPARED FOR SUBMISSION TO YOUR ATTORNEY FOR APPROVAL.
NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL REAL
ESTATE ASSOCIATION BY THE REAL ESTATE BROKER OR ITS AGENTS OR EMPLOYEES AS
TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE
OR THE TRANSACTION RELATING THERETO THE PARTIES SHALL RELY SOLELY UPON THE
ADVICE OF THEIR OWN LEGAL COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF
THIS LEASE.
LESSOR LESSEE
GENERAL ATOMICS IXSYS, INC.
By By
------------------------- -------------------------
By Director Facilities By Director Facilities
------------------------- -------------------------
Executed on June 30, 1993 Executed on June 30, 1993
---------------- ----------------
(Corporate Seal) (Corporate Seal)
ADDRESS FOR NOTICES AND RENT ADDRESS
-------------------------------- -------------------------------
-------------------------------- -------------------------------
-------------------------------- -------------------------------
For these forms write the American Industrial Real Estate Association, 350
South Figueroa St. Suite 275, Los Angeles, CA 90071 (213) 687-8777
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<PAGE> 11
8.7 (b) Lessor shall indemnify and hold harmless from and against
any and all claims arising from any work or things done, permitted or suffered
by Lessor in or about the Premises arising from any act or omission of Lessor or
any of Lessor's agents, contractors, or employees, or arising from any breach or
default by Lessor under any of its obligations under this Lease, and from and
against all costs, attorney's fees, expenses, liabilities incurred in the
defense of any such claim or any action or proceeding brought thereon.
47. MASTER LEASE
Lessor is the tenant under a certain lease (the "Master Lease") with Sorrento
West Properties Inc. ("Master Lessor") of the Industrial Center. Lessor
covenants, represents, and warrants that Lessor is not in default under the
Master Lease, has not received any notice of termination by Master Lessor, of
the Master Lease, that the execution and performance by Lessor of the terms and
conditions of this Lease will not violate any of the terms of the Master Lease,
and that Lessor will not willfully commit any act or omission which would
violate any term or condition of the Master Lease or cause the termination of
the Master Lease during the term of this Lease.
Allstate Life Insurance Company of New York holds a financial interest in the
industrial center secured by a deed of trust on the property which requires an
assignment of Borrower's interest in the Master Lease and all Subleases in the
unlikely event that the Lender obtains rights of possession through,
foreclosure, deed in lieu of foreclosure, or otherwise. By execution of this
Lease, Lessee acknowledges the Lender's position and Sublessee's obligation as
described in the "AGREEMENT OF SUBORDINATION, NONDISTURBANCE AND ATTORNMENT"
Exhibit A-3, attached to and made a part of this Lease Agreement.
48. RENT AND SECURITY DEPOSIT
Rent for space leased at different times during the term of the Lease shall all
be charged at the same base rate, be prorated to start the date of possession
and shall be due and payable on or before the first day of the month.
48.1 Base Rent. The base rent for "first-in" space shall be at a rate of
$0.72 per gross square foot per month ($0.72 x 14,000 SF + $0.72 x 9626 SF =
$17,011), net of all operating expenses covered in Paragraph 4.2. Starting base
rent for "expansion" space added to the premises shall be at the same base rate
as that being charged for the "first-in" space.
48.2 Rent Increases. On each anniversary of the Lease, the base rent for
all space under lease, "first-in" and "expansion", shall be increased as
described in Paragraph 55 "Rent Escalations".
48.3 Leasehold Improvement Recovery. Upon completion of leasehold
improvements and accumulation of pertinent cost information, the total cost of
leasehold improvements will be determined and total cost amortized at 12% per
annum over the balance of the lease term. Since leasehold improvements for
"expansion" space will be installed after the commencement date of the Lease,
the unpaid balance of the "first-in" leasehold improvements will added to the
cost of leasehold improvements for the "expansion" space and the new balance
amortized at 12% per annum over the remaining period of the five-year term.
48.4 Upon execution of this Lease, Lessee shall pay Lessor a security
deposit in the amount equivalent to one month's rent (23,626 SF @ $0.72) plus
two months' operating expenses (2 x 23,626 SF @ $0.15) or $24,100. The security
deposit shall be adjusted by lease amendment to add one months' leasehold
improvement charge and rent for added "expansion" space as covered in Paragraph
49(b).
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<PAGE> 12
49. COMMENCEMENT DATE, TERM AND EXPANSION SPACE
(a) The term for the "first-in" space shall commence on October 1,
1993. For Building 6 "first-in" space, rent and operating expenses shall start
on September 1, 1993; For Building 3, "first-in" space, rent and operating
expenses shall start concurrent with date of occupancy, or November 1, 1993,
whichever occurs first.
(b) The term of the Lease shall extend for five years commencing
on the date of possession of the "first-in" space. The end of lease term for all
"first-in" and "expansion" space shall be concurrent. Parties agree to execute
at the appropriate dates, a lease amendment that establishes the five year term,
adjusts security deposit and stipulates the prorata share of operating expenses
and leasehold improvement cost recovery during the Lessee's tenancy.
(c) Assuming the Lease is in full force and effect and Lessee is
not in default of terms of the Lease, as can be verified by Lessee by written
notice from Lessor, Lessee shall have the option to expand into space designated
as "expansion" space as shown on Exhibits A-2 and A-3. Lessee shall give Lessor
a minimum of 60 days advance written notice to lease expansion space in Building
3 and a minimum of 120 days advance written notice to lease expansion space in
Building 6. The option to expand shall run for a period of one year from the
commencement date for "first-in" space. Upon expiration of the one year option,
Lessee shall lease and take possession of "expansion" space in Building 3 and
Lessor shall be allowed to lease "expansion" space in Building 6 to other
tenants.
(d) Lessee shall allow Lessor reasonable access to space retained
by the Lessor, for Lessor's beneficial use, and shall afford Lessor permission
to use toilet room facilities, utilities and other common provisions, all to be
cost shared as determined by prorata assignment, metering or agreed to audit
determinations.
(e) If Lessor decides to surrender "retained" space and offer
space for lease, Lessee shall have Right of First Offer to lease said space.
Assuming the Lease is in full force and effect and Lessee is not in default of
terms of the Lease, as can be verified by Lessee through written notice from
Lessor, Lessee shall have one month to give Lessor written notice of its
acceptance. Right of First Offer will not apply to use of the space by Lessor or
its affiliates. If Lessee does not exercise the right of First Offer, Lessee
shall cooperate in redefining common area by surrendering, if requested to do so
by Lessor, exclusive rights to use toilet rooms, access corridors, exits and
other common features required to access "retained" space and to share the
common area features on a prorata cost basis with an adjoining tenant. Space
leased under Right of First Offer shall be at the same base rental rate and
terms and conditions as "First-in" and "expansion" space.
50. LEASEHOLD IMPROVEMENTS
The Parties agree that Lessor shall install certain leasehold improvements
including: 1) minor physical changes and upgraded to the interior of Building 3
space, 2) an upgrade of Building 6 heating, ventilation and air conditioning
system in Specialty Laboratories, Inc. constructed laboratories of Building 3,
and 3) certain improvements in the expansion space of Building 6.
50.1 First-in Space Improvements. Parties shall cooperate to specify
leasehold improvements required to be installed prior to Lessee possession of
the premises. Lessor agrees to have designed, installed and put into operation,
those improvements so designated as "First-in" space improvements.
(a) Parties agree that leasehold improvements for laboratory space
in Building 3 shall be limited to that cost
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<PAGE> 13
involved to change laboratory ventilation from the existing design to a system
that provides 100 percent air exhaust. A budgetary limit of $50,000 is set aside
by Lessor to finance and install these improvements.
(b) Parties agree that leasehold improvements for administrative
space in Building 6 shall be limited to $10.00 per square foot and shall be
expanded for interior improvements that enhance utility of the space but not for
modification of life safety features such as fire corridors, exits or other
structural changes. Lessor shall set aside approximately $110,000 to finance and
install these improvements.
(c) Parties shall cooperate with the existing tenant, Specialty
Laboratories, Inc., to conduct an orderly turnover of the Building 6
laboratories. A punch-list of items requiring repair or correction by the
existing tenant prior to occupancy by the Lessee shall be prepared and agreement
made between Specialty Laboratories, Lessee and Lessor as to the party
responsible for these corrections.
50.2 Expansion Space Improvements. The following applies to new leasehold
improvements in the "expansion" space for Building 6 or improvements to any
portion of the premises requiring building permits:
(a) Design and Construction. Lessor shall cause the construction
of leasehold improvements to the premises including the working drawings,
permits, construction, and final city inspection.
Within 15 business days after formal notice from the Lessee of its
desire to lease Building 6 expansion space, Lessee and Lessor shall initiate
work on a schematic drawing to be prepared by Lessor to included programming
requirements. Promptly following receipt of comments on this schematic drawing
from Lessee (not to exceed five business days), Lessor shall start preparation
of final working drawings and specifications to be prepared by a qualified
architect and engineer(s), for submittal to the City Building Department.
Promptly after obtaining design approval from the City, Lessor shall cause the
construction of leasehold improvements based on competitive bids and selection
of qualified contractors.
(b) Allowance. Lessor agrees to provide Lessee a leasehold
improvement allowance in the amount of Five Hundred Thousand Dollars ($500,000)
for design and construction applied toward expenditures against any and all
costs incurred in the construction of the leasehold improvements, including,
without limitation, any and all fees, charges, costs, or expenses of any kind
incurred by the Lessor in connection with design, engineering, governmental
processing and approval, cost of equipment, materials, labor, construction
overhead and fees, utility hookup, equipment installation, testing, inspection,
or any costs directly related to the leasehold improvements that improve value
of the realty as reflected on the approved drawings and specifications. Excluded
from the allowance are Lessor's direct applied project management costs, cost of
design, purchase, relocation or setup of Lessee's fixtures, or excess costs
incurred by Lessee as covered below.
If the amount of the estimated costs for the leasehold improvements
exceeds the allowance ("excess costs") , then not later than ten business days
after delivery of estimated costs to Lessee, Lessee shall deliver to Lessor
funds in the amount of the excess costs, which Lessor shall apply towards the
cost of completing the leasehold improvements. In addition, if at any time
during the construction of the leasehold improvements, the costs thereof
incurred by Lessor equals the amounts of the allowance plus any excess costs
previously paid by Lessee to Lessor, Lessor shall immediately prepare an
estimate of the amounts reasonably required to complete the construction of the
leasehold improvements, and
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<PAGE> 14
Lessor shall not be obligated to incur any additional expenses or continue
construction of the leasehold improvements until Lessee has deposited with
Lessor funds in the amount of the estimate so prepared by Lessor.
(c) Lessee Delays. In no event shall the substantial completion
dates of these leasehold improvements be extended due to a delay or fault of
Lessee. Delays "due to the fault of Lessee" shall include, without limitation,
delays caused by:
(i) Lessee's failure to timely prepare the preliminary plans
or review preliminary plans, or to timely approve the working plans or the
estimated costs, or to furnish information and cooperation to Lessor for the
preparation by the Lessor and approval by governmental agencies of the final
plans;
(ii) Lessee's request for or use of special materials,
finishes or installations which are different than specified on Lessee approved
drawings and specifications;
(iii) Lessee's failure to timely deposit with Lessor any funds
required for any excess costs or costs in excess of the allowance for the
completion of the tenant improvements;
(iv) Change orders requested by Lessee which actually result
in a delay; or
(v) Interference with Lessor's construction activities
caused by Lessee or Lessee's agents, employees, servants or independent
contractors.
(vi) Lessee's failure to surrender adjoining areas for
construction so Lessor can diligently complete said improvements or connections
to occupied space without undue delays.
Lessor shall give Lessee written notice of any delays due to the
fault of Lessee hereunder promptly (within five (5) business days) after Lessor
obtains knowledge of any such delays.
(d) Change Orders. Lessee may from time to time have need to
obtain change orders during the course of construction of the leasehold
improvements, provided that:
(i) Each such request shall be in writing and signed by
Lessee;
(ii) Each such request shall not result in any major or
structural change in the building or tenant improvements as reasonably
determined by Lessor; and
(iii) All additional charges and costs, including, without
limitation, architectural and engineering costs, construction costs, material
costs, and governmental processing costs, shall be the sole and exclusive
obligation of Lessee.
Upon Lessee's written request for a change order, Lessor shall as
soon as reasonably possible submit to Lessee a written estimate of the increased
cost attributable to the requested change. Within five business days of the date
such estimated cost adjustment is delivered to the Lessee, Lessee shall advise
Lessor whether or not it wishes to proceed with the change order. Unless Lessee
includes in its initial change order request that work in progress at the time
of the request be halted pending approval and execution of a change order,
Lessor shall not stop construction of the tenant improvement, whether or not the
change order relates to work then in progress or about to be started.
(e) Completion of Premises. Within five business days after
substantial completion, Lessee shall conduct a walk-through inspection of the
Premises with Lessor and complete a punch-list of
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<PAGE> 15
items needing correction or additional work, which punch-list shall be approved
in writing by Lessor and Lessee. Lessee shall submit to the Lessor a final
punch-list within 60 days after substantial completion, which shall include all
items requiring correction or additional work and which shall be approved in
writing by Lessor and Lessee. Neither punch-list shall include any damage to the
Premises caused by Lessee or by Lessee's agents, employees, servants, or
independent contractors, which damage shall be repaired or corrected by Lessee
at its expense. If Lessee fails to submit any punch-list to Lessor within such
60 day period, it shall be deemed that there are no items needing additional
work or repair (excluding latent defects). Lessor's contractor shall complete
all Lessor-approved punch-list items within 30 days after submission of the
final punch-list or as soon as practicable thereafter. Upon completion of such
punch-list items, Lessee shall approve such corrected or completed items in
writing to Lessor. If Lessee fails to notify Lessor of its approval or
disapproval of such items within ten business days of completion, such items
shall be deemed approved by Lessee.
50.3 For the purpose of interpreting obligations and ownership under terms of
this lease, "base building improvements" are differentiated from "leasehold
improvements" as being those improvements that pre-existed the installation of
"leasehold improvements" installed in the premises on behalf of either Specialty
Laboratories, Inc or the Lessee.
(a) Under terms of this lease and termination of an existing lease
for Building 6 premises, between Specialty Laboratories, Inc. and the Lessor,
parties agree that Lessee shall purchase the Specialty Laboratories, Inc.
leasehold and perform under obligations of this lease (between Lessor and
Lessee) as if the alterations, improvements (additions and utility
installations) had been installed by the Lessee.
(b) Leasehold improvements installed and financed by the Lessor,
and to be amortized over the term of the lease, shall be the property of the
Lessor and remain upon the property of the Lessor upon expiration of the lease
term unless Lessor requires their removal pursuant to Paragraph 7.3(a).
(c) Leasehold improvements paid for upon installation by the
Lessee, shall be the property of the Lessor and remain upon the property of the
Lessor upon expiration of the lease term unless Lessor requires their removal
pursuant to Paragraph 7.3(a). The leasehold may not be assigned, transferred, or
sublet during the term of the lease without consent of the Lessor.
51. BROKER'S FEE
Lessee represents and warrants to Lessor that it has not engaged any broker,
finder, or other person who would be entitled to any commission or fees in
respect of the negotiation, execution or delivery of this Lease and shall
indemnify and hold harmless Lessor against any loss, cost, liability, or expense
incurred by Lessor as a result of any claim asserted by any broker, finder, or
other person on the basis of any arrangements made or alleged to have been made
by or on behalf of Lessee.
52. HAZARDOUS MATERIALS STORAGE AND USE
Lessee agrees that use of Hazardous Materials is incidental to its operations on
the premises and is not the primary or substantial purpose of its Tenancy.
(a) Lessee shall coordinate any permit application for use,
storage, handling, and disposal of Hazardous Materials with the Lessor and shall
submit updated copies of such permits, applications, and licenses to Lessor for
Lessor's files. At the request of the Lessor, Lessee shall submit a list and
material data sheet for all Hazardous Materials maintained in the Premises.
-15-
<PAGE> 16
(b) Lessor, the Master Lessor, and their respective agents and
Lenders shall have the right to enter the Premises at reasonable times for the
purpose of inspecting the same for "Hazardous Materials" as defined in any
Federal, State, or local law or regulation, showing the same to prospective
purchasers, lenders, or lessees, and making such alterations, repairs,
improvements, or additions to the Premises as Lessor or Master Lessor may deem
necessary or desirable.
(c) Hazardous Materials used, produced, stored, processed,
treated, refined, generated, and disposed of by Lessee shall be the
responsibility of Lessee, and Lessee shall undertake and perform all such
activities in accordance with all applicable laws and regulations and in
accordance with Lessor's standard practices and in a safe and reasonable manner,
during the term of the Lease, when required or appropriate, but in no event
later than the date that the Lease is terminated.
53. As used herein, "Lease" means "Sublease", "Lessor" means "Sublessor" and
"Lessee" means "Sublessee".
-16-
<PAGE> 17
ADDENDUM TO
STANDARD LEASE
DATED June 1, 1993
BY AND BETWEEN General Atomics
Ixsys, Inc.
54 RENT ESCALATIONS
(a) On each anniversary of this Sublease, the monthly rent payable under
paragraph 4 of the attached Lease shall be adjusted by the increase, if any,
from the date this Lease Commenced, in the Consumer Price Index of the Bureau
of Labor Statistics of the U.S. Department of Labor for Urban Wage Earners and
Clerical Workers, Los Angeles-Long Beach-Anaheim, California (1967=100), "All
Items", herein referred to as "C.P.I."
(b) The monthly rent payable in accordance with paragraph (a) of this
Addendum shall be calculated as follows: the rent payable for the first month
of the term of this Lease, as set forth in paragraph 4 of the attached Lease,
shall be multiplied by a fraction the numerator of which shall be the C.P.I. of
the calendar month during which the adjustment is to take effect, and the
denominator of which shall be the C.P.I. for the calendar month in which the
original Lease term commences. The sum so calculated shall constitute the new
monthly rent hereunder, but in no event, shall such new monthly rent be less
than the rent payable for the month immediately preceding the date for rent
adjustment.
(c) Pending receipt of the required C.P.I. and determination of the
actual adjustment, Lessee shall pay an estimated adjusted rental, as reasonably
determined by Lessor by reference to the then available C.P.I. information.
Upon notification of the actual adjustment after publication of the required
C.P.I., any overpayment shall be credited against the next installment of rent
due, and any underpayment shall be immediately due and payable by Lessee.
Lessor's failure to request payment of an estimated or actual rent adjustment
shall not constitute a waiver of the right to any adjustment provided for in
the Lease or this addendum.
(d) In the event the compilation and/or publication of the C.P.I. shall
be transferred to any other governmental department or bureau or agency or
shall be discontinued, then the index most nearly the same as the C.P.I. shall
be used to make such calculation. In the event that Lessor and Lessee cannot
agree on such alternative index, then the matter shall be submitted for
decision to the American Arbitration Association in accordance with the then
rules of said association and the decision of the arbitrators shall be binding
upon the parties. The cost of said Arbitrators shall be paid equally by Lessor
and Lessee.
(e) Annual rent adjustment determined under (a) shall be 4% minimum and
8% maximum.
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RENT ESCALATIONS Form RE-3-383
<PAGE> 18
THE IDEAL LOCATION
Sorrento West is strategically located just off U.S. Interstate 5 at 805,
the major North/South highways that provide easy access to the West's major
markets. All major delivery firms provide regular service. San Diego's port
facilities and international airport are only 15 minutes away.
[MAP]
DIRECTIONS FROM SAN DIEGO: Take the Sorrento Valley Exit off
Interstate 5 (north). Turn left on Roselle Street. Pass
under Interstate 5 and follow Roselle to Sorrento West site.
OR
Take the Sorrento Valley Exit off Interstate 805 (north).
Turn left on Sorrento Valley Road. Follow Sorrento Valley
[MAP] Road to Intersection with Sorrento Valley Blvd. Turn left
over railroad tracks and bridge spanning flood control
channel. Turn right onto Roselle Street and follow Roselle
north to Sorrento West site. Approximately 1 block.
FROM LOS ANGELES: Take Carmel Valley Road Exit off
Interstate 5 (South). Turn right onto Carmel Valley Road
and then left onto Sorrento Valley Road. Follow Sorrento
Valley Road to intersection with Sorrento Valley Boulevard.
Turn right over railroad tracks and bridge spanning flood
control channel. Turn right onto Roselle Street and follow
Roselle to Sorrento West site.
For information contact:
Exhibit A-1
<PAGE> 19
FIRST-IN SPACE LEASED BY IXSYS -9626SF
BUILDING 63
[MAP]
Exhibit A-2
<PAGE> 20
[FLOOR PLAN]
BUILDING 66
Exhibit A-3
<PAGE> 21
RECORDING REQUESTED BY AND )
)
WHEN RECORDED RETURN TO: )
)
PILLSBURY MADISON a SUTRO )
101 West Broadway, Ste. 1800 )
San Diego, CA 92101 )
Attn: Angela M. Yates, Esq. )
--------------------------------------------------------------------------------
(SPACE ABOVE FOR RECORDER'S USE)
AGREEMENT OF SUBORDINATION,
NONDISTURBANCE AND ATTORNMENT
NOTICE: THIS SUBORDINATION AGREEMENT RESULTS IN THE LEASEHOLD ESTATE IN
THE PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE LIEN OF SOME
OTHER OR LATER SECURITY INSTRUMENT.
THIS AGREEMENT OF SUBORDINATION, NONDISTURBANCE AND ATTORNMENT
("Agreement") is dated the ___ day of December, 1991, between Allstate Life
Insurance Company of New York ("Lender") and Ixsys, Inc., a ______________
_______________ ("Subtenant").
RECITALS
A. Sorrento Went Properties, Inc., a Delaware corporation ("Borrower")
and General Atomics, a California corporation ("GA") are the landlord and
tenant, respectively, under that certain Net Lease dated as of December 17, 1987
by and between Genesee Properties, Inc., a Wyoming corporation and GA (formerly
known as "GA Technologies, Inc."), (the "Master Lease").
B. Subtenant has executed that certain lease dated June 1, 1993 (the
Sublease) with GA, as lessor or sublessor ("Landlord"), covering the premises
(the "Premises") in that certain building located at 3520 & 3550 Dunhill Street
San Diego, California (the "Property"); and
C. Lender has made or has agreed to make a mortgage loan to Borrower
secured by a deed of trust on the Property which includes an assignment of
Borrower's interest in the Master Lease and all subleases (the "Mortgage"); and
D. The parties hereto desire to confirm their understanding with
respect to the Sublease and the Mortgage.
NOW, THEREFORE, in consideration of the covenants, terms, conditions and
agreements contained herein, the parties hereto agree as follows:
-1-
<PAGE> 22
1. The Sublease and the Master Lease are and shall continue to be
unconditionally subject and subordinate in all respects to the Mortgage and the
lien created thereby, and to any advancements made thereunder, and to any
consolidations, extensions, modifications or renewals thereof.
2. Subtenant agrees to give Lender a copy of any notice of default
served on the Landlord by certified mail, return receipt requested, with postage
prepaid, at Allstate Plaza West J2A, 3100 Sanders Road, Northbrook, Illinois
60062, Attn: Commercial Mortgage Division. If Landlord fails to cure such
default within the time provided in the Sublease, Lender shall have the right,
but not the obligation to cure such default on behalf of Landlord within thirty
(30) calendar days after the time provided for in the Sublease or within a
reasonable period if such default cannot be cured within that time and Lender is
proceeding with due diligence to cure such default. In such event Subtenant
shall not terminate the Sublease while such remedies are being diligently
pursued by Lender. Further, Subtenant shall not, as to Lender, require cure of
any such default which is not susceptible of cure by Lender.
3. So long an Subtenant is not in default under the Sublease,
Subtenant's possession and occupancy of the Premises shall not be disturbed by
Lender during the term of the Sublease or any extension thereof, subject to the
terms of Section 4 below.
4. If Lender obtains the right to possession of the Premises or if the
Borrower's interest in the Property is transferred to Lender by foreclosure,
deed in lieu of foreclosure, or otherwise, then the Master Lease and the
Sublease shall be deemed automatically terminated, regardless of any contrary
provisions of the Master Lease or the Sublease. However, Lender and Subtenant
agree that, simultaneously with such termination, this Agreement will be deemed
to constitute a new lease on terms identical to those in the Sublease, except
for the identity of the Landlord. All terms and conditions of the Sublease are
incorporated herein by this reference as if met forth in full. The provisions of
this Paragraph 4 are intended to be self-effectuating.
5. If Lender succeeds to Landlord's interest under the Sublease, Lender
shall not be:
(a) liable for any act or omission of Landlord, Borrower or any
prior landlord; or
(b) subject to any offsets or defenses which Subtenant might have
against Landlord, Borrower or any prior landlord; or
-2-
<PAGE> 23
(c) required or obligated to credit Subtenant with any rent or
additional rent for any rental period beyond the then current month which
Subtenant might have paid Landlord, Borrower or any prior landlord; or
(d) bound by any amendments or modifications of the Sublease made
without Lender's consent, other than exercise of rights, options or elections
contained in the Sublease, including without limitation options to extend the
term of the Sublease; or
(e) liable for the return of any security deposit unless such
security deposit shall have been actually received by Lender. In the event of
receipt of any such security deposit, Lender's obligations with respect thereto
shall be limited to the amount of such security deposit actually received by
Lender, and Lender shall be entitled to all rights, privileges and benefits of
Landlord met forth in the Sublease with respect thereto.
6. Subtenant declares, agrees and acknowledges that:
(a) Lender is not obligated to determine whether its loan proceeds
are used for the purposes provided for in its loan agreement. If the Borrower
uses or applies the loan proceeds for purposes other than those permitted in its
loan agreement, that will not affect the subordination herein; and
(b) Subtenant intentionally and unconditionally waives, subjects
and subordinates the Sublease and the leasehold estate created by the Sublease
in favor of the lien of the Mortgage. Subtenant acknowledges that Lender is
relying upon this waiver, subjection and subordination in making a loan to
Borrower and that loan would not be made without this waiver, subjection and
subordination.
7. The provisions of this Agreement shall be binding upon and inure to
the benefit of Lender and Subtenant and their respective successors and assigns.
Furthermore, the provisions of this Agreement shall be binding upon any
guarantor of Subtenant's obligations under the Sublease. The words "Lender,"
"Landlord" and "Subtenant" shall include their respective heirs, legatees,
executors, administrators, beneficiaries, successors and assigns. This Agreement
shall be governed by the laws of the State of California.
8. Any notices to Subtenant hereunder shall be effective upon mailing
notice to Subtenant by certified mail, return receipt requested, with postage
prepaid, at the address set forth in the Sublease or at such other address as
the Subtenant may designate in writing to Lender at the address set forth in
paragraph 2.
-3-
<PAGE> 24
9. This Agreement contains the entire agreement between the parties and
no modifications shall be binding upon any party hereto unless set forth in a
document duly executed by or on behalf of such party.
10. The Agreement may be executed in multiple counterparts, all of which
shall be deemed originals and with the same effect as if all parties had signed
the same document. All of such counterparts shall be construed together and
shall constitute one instrument.
11. Subtenant will, within ten days after Lender's request, execute,
acknowledge, deliver and furnish such documents or take such further action as
Lender may deem necessary or desirable to evidence this Agreement as a direct
lease between Lender and Subtenant, upon the occurrence of the events described
in Paragraph 4 above, or to otherwise carry out the terms of this Agreement.
NOTICE: THIS SUBORDINATION AGREEMENT CONTAINS A PROVISION WHICH MAY ALLOW
THE PARTIES AGAINST WHOM YOU CLAIM AN EQUITABLE INTEREST IN REAL PROPERTY TO
OBTAIN A LOAN A PORTION OF WHICH MAY BE EXPENDED FOR PURPOSES OTHER THAN
IMPROVEMENT OF THE LAND.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
LENDER: SUBTENANT:
ALLSTATE LIFE INSURANCE IXSYS, INC.
COMPANY OF NEW YORK
By: By: [Signature Illegible]
---------------------------------- --------------------------------
By: Name: [Illegible]
---------------------------------- ------------------------------
Its Authorized Signatories Title: V.P. Business/[Illegible]
-----------------------------
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<PAGE> 25
We consent to the terms and conditions of the above Agreement and
acknowledge and agree that, upon the occurrence of any of the events described
in Paragraph 4 of this Agreement, we shall have no right, title or interest in
and to any rents or other payments payable to Lender by Subtenant, accruing
after the date of termination.
LANDLORD: BORROWER:
GENERAL ATOMICS, SORRENTO WEST PROPERTIES, INC.
a California corporation a Delaware corporation
By: By:
-------------------------------- ------------------------------------
Name: Name:
------------------------------ ----------------------------------
Title: Title:
----------------------------- ---------------------------------
-5-
<PAGE> 26
State of California )
)
County of )
)
On___________________________, before me, _______________________________
_________________________________, a notary Public, personally appeared
_______________________________________________________________________________
________________________________________, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument, the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature________________________________ (Seal)
State of ___________________)
)
County of___________________)
On____________________, before me, __________________________________
________________________________, a notary public, personally appeared
_______________________________________________________________________________,
authorized signatories of Allstate Life Insurance Company of New York,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument, the person(s), or the entity upon behalf of which the person(s)
acted, executed the Instrument.
WITNESS my hand and official seal.
Signature _________________________________ (Seal)
-6-
<PAGE> 27
State of California )
)
County of )
On____________________, before me ________________________________
_____________________________________, a notary public, personally appeared
_______________________________________________________________________________
______________________________________________, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her their signature(s) on the instrument, the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature _____________________________________ (Seal)
State of California )
)
County of )
On _________________________________, before me _________________________
______________________________, a notary public, personally appeared
_______________________________________________________________________________
_________________________________________________, personally known to me (or
proved to me on the basis of satisfactory evidence) to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument, the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature _______________________________________ (Seal)
-7-
<PAGE> 28
EXHIBIT "A-5"
GENERAL ATOMICS RULES & REGULATIONS
ATTACHED AND MADE A PART OF THE LEASE
DATED JUNE 1, 1993
BY AND BETWEEN GENERAL ATOMICS
AND IXSYS, INC.
1. Lessor agrees that Lessee is entitled to, and shall have the quiet
enjoyment of the premises described in the Lease.
2. Lessee shall not litter or allow materials such as shipping containers,
pallets, and discarded fixtures to accumulate or be stored outside
buildings, on the roof, in the landscaping, parking lots, or common areas.
3. The water closets, urinals and other plumbing shall be used for the
purpose for which they were constructed and no rubbish, newspapers or
other substances of any kind shall be thrown into them. Lessee shall not
mark, install screws or drill into, or in any way deface the exterior
walls, wood, paint, stone, metal work, or entrances of the buildings
without the express consent of the Lessor.
4. Lessee shall not install or use any equipment in the premises which might
damage the floors, roofs, or exterior walls of the buildings. All damage
to the buildings caused by installing or removing any fixtures, furniture,
equipment or other property shall be repaired at the expense of Lessee.
5. Lessee and Lessee's agent and employees shall not play any musical
instrument, including radio and television, in a loud or objectionable
manner, use exterior speakers, or make or permit any improper noises in
the buildings or the Industrial Center, or interfere in any way with other
Lessees or those having business with them.
6. Lessee shall not conduct any auction, or sell goods, wares or merchandise
on the premises.
7. Lessor shall not be responsible for loss of or damage to any furniture,
equipment, fixtures, or business products from any cause.
8. Although Lessor may have given Lessee approval to use the name of the
buildings in connection with any business on the property, Lessor shall
have the right to prohibit any advertising by any agent which in Lessor's
opinion, tends to impair the reputation of the buildings or its
desirability as buildings for approved use under terms of the Lease. Upon
written notice from Lessor, Lessee shall refrain from or discontinue such
advertising.
9. Lessee shall not install blinds, shades, awnings or other form of inside
or outside window covering, or window ventilators or similar devices
without the prior written consent of Lessor.
10. Lessee shall give Lessor prompt notice of any accidents to or defects in
the water pipes, gas pipes, electric distribution system, and building
systems.
11. No cooking shall be done or permitted by Lessee on the premises, except in
areas specifically designed for the purpose, without the consent of
Lessor, nor shall the premises be used for the storage of merchandise, for
lodging, or for any improper, objectionable or immoral purposes.
12. Lessee shall see that the doors of the premises are closed and securely
locked before leaving the premises.
-1-
<PAGE> 29
13. Lessee shall not disturb, solicit or canvass any occupant of the
Industrial Center and shall cooperate to prevent same.
14. Lessee's identification sign(s) shall be subject to prior approval by
Lessor.
15. Lessee's employees shall be allowed to access Lessor's Torrey Pines
Industrial Center for specific reasons on condition that any Lessee
employee seeking this privilege follows Lessor's Rules and Regulations for
site access and use. Access privileges shall be limited to business visits
with Torrey Pines tenants, use of Tower Road for access between Torrey
Pines and Sorrento West Industrial Centers, use of the central cafeteria,
and use of the Fitness Center and outside recreation complex at the
Torrey Pines Industrial Center. Lessor, at its sole option, reserves the
right to change or discontinue part or all of Lessee's privileges based
on reasons such as, but not limited to, governmental regulations,
liability exposure, economics, change of ownership, or uncured defaults
related to Lessee's violation of Lessor's Rules and Regulations.
16. Lessee shall provide its own janitorial services to maintain premises in a
clean and safe condition. Trash shall be placed in appropriate disposal
containers at locations designated by Lessor for pick-up and disposal by
Lessor's service. Controlled wastes such as RAD waste and biowaste shall
remain inside the buildings or in a licensed, controlled enclosure
connected to the buildings for disposal by Lessee. Lessee shall be
responsible for disposal of the controlled waste in accordance with
applicable laws and regulations.
17. Smoking shall not be allowed inside those portions of the buildings where
Lessee and Lessor share space served by a common ventilation system.
Smoking shall be allowed outside at designated areas posted by Lessor.
18. From time to time it may become advantageous to make amendments to this
list which are in the best interests of both Lessor and Lessee and which
are not inconsistent with the Lease. Lessor reserves the right to make
such amendments by giving notice to Lessee.
-2-
<PAGE> 30
AMENDMENT #1 TO THE SUBLEASE
BY AND BETWEEN
GENERAL ATOMICS AND IXSYS, INC.
PARTIES, RECITALS AND GENERAL AGREEMENT
This Lease Amendment dated for reference purposes only, March 1, 1994 is made by
and between General Atomics, a California Corporation (herein called "Lessor")
and IXSYS, Inc., a Delaware Corporation (herein called "Lessee".)
RECITALS
A. Parties hereto entered into a Lease Agreement dated June 1, 1993 for
space located at Lessors' Sorrento West Properties at Building 3, 3550 Dunhill
Street and Building 6, at 3520 Dunhill Street. Refer to Exhibit A-1.
B. Under a separate Asset Purchase Agreement, dated June 25, 1993,
Lessee purchased from the previous tenant, Specialty Laboratories, Inc. (SLI) a
leasehold interest owned and installed by SLI in the 14,000sf laboratory at
Building 6. The purchase value of the leasehold interest was $310,000.
C. When the Lease for Building 3 and 6 was first executed, Lessee
intended to enter into a direct purchase of SLI fixtures, an asset separate and
distinct from the leasehold interest described in Paragraph B above. After
review and investigation, Lessee opted to purchase its own fixtures for the
14,000sf space.
D. Lessor agreed to terminate its December 27, 1989 Lease with SLI and
pursuant to terms of said Lease, and a Lease Termination and Assignment of
Leasehold executed by the three parties of interest, agreed to accept the
premises, lease same to Lessee and accommodate assignment of the SLI leasehold
interest from SLI to the Lessee.
E. Lessor agreed to finance and install certain leasehold improvements
in three separate space blocks; 1) in the 14,000sf "first-in" space block in
Building 6, Exhibit A-3; 2) in the 9626sf "first-in" space block in Building 3,
Exhibit A-2, and; 3) in the 6218sf, (now corrected to 5525sf - refer to 49. (c)
of this Agreement) , "expansion" space block in Building 6. A leasehold
improvement allowance of $650,000 was provided by the Lessor for the three
combined space blocks.
F. Lessee agreed to pay rent and operating expenses for the "first-in"
space block in Building 6 starting the date of possession or November 1, 1993,
whichever occurred first, and to pay rent and operating expenses for other space
blocks upon Substantial completion of leasehold improvements or upon possession
in the respective space block whichever occurred first.
K. Lessee agreed to diligently pursue the specification of needed
leasehold improvements for the three distinct space blocks and provide Lessor
criteria for preparing leasehold improvement working drawings.
L. Lessor agreed to make best effort to make certain Specialty
Laboratories diligently pursued vacating its 14,000sf premises in Building 6 and
to successfully surrender said premises in a condition acceptable to both the
Lessor and Lessee.
M. Lessee determined after reviewing its needs that leasehold
improvements of a magnitude more substantial than originally envisioned, were
required for both "first-in" laboratory and "first-in" administrative space
blocks.
-1-
<PAGE> 31
N. Lessee requested Lessor extend the Lease term for all space blocks,
increase the total amount of leasehold financing, and extend the amortization
period for recovery of all Lessor financed leasehold improvement costs.
O. Lessee requested that Lessor abate rent and operating expenses until
the time Lessee received beneficial possession of the respective space blocks,
and extend the term of the option to expand in Building 3 until year end 1994.
NOW THEREFORE, in consideration of the forgoing, and in consideration of mutual
covenants and agreements of the parties hereto, the parties mutually covenant
and agree as follows:
2.1 PREMISES. Change to read: Lessons hereby leases to Lessee and Lessee
leases from Lessor for the term, at the rental, and upon all of the conditions
set forth herein, real property situated in the County of San Diego, State of
California commonly known as:
Building 3 3550 Dunhill Street (approximately 9626sf)
Building 6 3520 Dunhill Street (approximately 14000sf)
Building 6 3520 Dunhill Street (approximately 5525sf)
Total: approximately 29151sf
3.1 TERM. Change the term from five (5) years to ten (10) years.
3.2 DELAY OF POSSESSION. Delete this section in its entirety.
4.1 BASE RENT. Restatement of Paragraph 48.1: The base rent for "first-in"
space shall be at a rate of $0.72 per gross square foot per month ($0.72 x
14,000 SF + $0.72 x 9626 SF = $17,011), net of all operating expenses covered in
Paragraph 4.2. Starting base rent for "expansion" space added to the premises
shall be at the same base rate as that being charged for the "first-in" space.
4.2 OPERATING EXPENSES. Change as follows:
Building 3 no change
Building 6 from: 58.06% to: 80.97%
Industrial Center from: 19.92% to: 24.57%
48.2 RENT ESCALATIONS. Change Paragraph to correct Reference Paragraph should
read: On each anniversary of the Lease, the base rent for all space under Lease,
"first-in" and "expansion" shall be increased as described in Paragraph 54.
48.3 LEASEHOLD IMPROVEMENT RECOVERY. Delete Paragraph in its entirety and
replace with the following:
Starting April 1, 1994, the Lessee shall pay monthly payments in the
amount of $11,710.23 to amortize the $670k leasehold improvement cost over the
period of seven (7) years, at an interest of 12% per annum, Exhibit A-5. The
$670k is comprised of Lessor committed funding effective the date of this
Amendment as follows:
Building 3 "first-in" space block improvements - $237k
Building 6 "first-in" space block improvements - $396k
Building 6 "expansion" space block improvements - 37k
-----
Total: $670k
once leasehold improvements are complete in the 5525sf "expansion space" in
Building 6, and all costs are determined, the actual leasehold allowance total
shall be determined and a new monthly payment schedule shall be calculated using
the actual total cost of improvements for the three separate space blocks, less
the principal reduction paid to amortize the $670k. The new schedule
-2-
<PAGE> 32
shall use this new principal amount amortized over the remaining period of the
7-year term calculated at an interest of 12% per annum.
48.4 SECURITY DEPOSIT. Delete in its entirety and replace with the following:
Lessor has on record a security deposit from the Lessee in the amount of
$24,000. Effective the commencement date for the final amortization schedule,
Paragraph 48.3, Lessee shall pay an additional deposit, or the amount equivalent
to one month's rent, one month's leasehold payment and two month's operating
expenses.
49. COMMENCEMENT DATE, TERM AND EXPANSION SPACE. Delete Paragraph (a) in its
entirety and replace with the following:
(a) The ten (10) year Lease term shall start December 17, 1993,
coincident with the date of substantial completion of "first-in" space block in
Building 6. The term for all space blocks, "first-in", "expansion" or
"Right-of-First-offer", shall terminate concurrently, on December 16, 2003.
Delete Paragraph (b) in its entirety and replace with the following:
(b) Parties agree that this Lease Amendment establishes effective Lease
commencement date as December 17, 1993; changes the lease term from five (5)
years to ten (10) years; and authorizes Lessor to assess Lessee for rent and
operating expenses for Building 6 "first-in" space block starting December 17,
1993 and Building 3 "first-in" space block starting January 19, 1994.
Delete Paragraph (c) in its entirety and replace with the following:
(c) Parties mutually agree that Lessee has executed its option to expand
into the Building 6 "expansion" space block shown on attached Exhibit A-3. This
space block as currently identified on working drawings prepared by the Lessor,
is hereby changed from 6218sf to approximately 5525sf. Further, Lessee shall
give Lessor a minimum of 60 days advance written notice to exercise its option
to lease the 1374sf "expansion" space block in Building 3. This option to expand
shall run for a period starting December 17, 1993 and ending December 31, 1994.
Upon expiration of the option period, Lessee shall lease and take possession of
the said "expansion" space block.
50. LEASEHOLD IMPROVEMENTS. Delete in its entirety and replace with the
following:
The parties mutually agree that Lessor shall install certain leasehold
improvements including: 1) Lessee specified leasehold improvements to Building 6
laboratory "first-in" laboratory space block; 2) Lessee specified leasehold
improvements in the Building 3 administrative "first-in" space block; and 3)
Lessee specified leasehold improvements to Building 6 laboratory "expansion"
space block. Total leasehold improvement costs financed by the Lessor shall not
exceed $900k for all improvements including "first-in" and "expansion" or
"Right-of-First Offer" space.
50.1 FIRST-IN SPACE IMPROVEMENTS. Delete in its entirety and replace with the
following:
Parties shall cooperate to specify leasehold improvements required to be
installed prior to Lessee possession of the premises. Lessor agrees to have
designed, installed and put into operation, those improvements so designated as
"first-in" space improvements.
-3-
<PAGE> 33
(a) Parties agree that leasehold improvements for "first-in" space block
in Building 6 shall be comprised of the combination of leasehold improvements
purchased by the Lessee from the previous tenant and those improvements to be
installed by the Lessor, on behalf of the Lessee.
(b) Parties agree that leasehold improvements for "first-in" space block
in Building 3 shall be those generally specified in a space planning study
prepared by a consultant of the Lessee and more specifically described on
working drawings prepared by the Lessor.
(c) Parties agree that the previous tenant, Specialty Laboratories, Inc.
satisfied its obligation by vacating Building 6 and returning the premises to
the Lessor and Lessee including the leasehold interest purchased by the Lessee.
A list was prepared and a final settlement was consummated pursuant to the
agreement between the three parties of interest. This list is attached as
Exhibit A-5 showing a summary with the total settlement amount of $24,843.
Lessor agrees to credit this settlement amount to cost incurred by Lessor in the
installation of Lessees' fixtures, Paragraph (d), in the Building 6 "first-in"
space block.
(d) Lessee agrees to reimburse Lessor for costs incurred in the
installation of Lessees' fixtures authorized under contract between the Lessor
and subcontractors engaged in the installation of leasehold improvements for
Building 6 "first-in" space. Reimbursement shall include the cost incurred under
these subcontracts, less the settlement amount covered in Paragraph (c), and
said reimbursement shall be made to the Lessor within (10) days after a summary
of costs is submitted to the Lessee by invoice.
50.2 EXPANSION SPACE IMPROVEMENTS.
(b) ALLOWANCE. Delete in its entirety the first paragraph and replace
with the following:
Lessor agrees to provide Lessee a leasehold improvement allowance in the amount
not to exceed the total allowance set-aside of $900,000 less the sum of the
costs incurred for leasehold improvements for "first-in" space in Buildings 3
and 6, as covered in Paragraphs 50.1 (a) and (b). The allowance shall be
applied toward expenditures against any and all costs incurred in the
construction of the leasehold improvements, including, without limitation, any
and all fees, charges, costs, or expenses of any kind incurred by the Lessor in
connection with design, engineering, governmental processing and approval, cost
of equipment, materials, labor, construction overhead and fees, utility hookups,
equipment installation, testing, inspection, or any costs directly related to
the leasehold improvements that improves value of the realty as reflected on
approved working drawings and specifications. Excluded from the allowance are
Lessors' direct applied project management costs, cost of design, purchase,
relocation or setup of Lessees' fixtures, or excess costs incurred by Lessee as
covered below.
Lessee agrees to reimburse Lessor for costs incurred in the installation of
Lessees' fixtures authorized under contract between the Lessor and
subcontractors engaged in the installation of leasehold improvements for
Building 6 "expansion" space. Reimbursement shall include the cost incurred
under these subcontracts and said reimbursement shall be made to the Lessor
within (10) days after a summary of costs is submitted to the Lessee by invoice.
54. RENT ESCALATIONS. Change to delete Rent CPI minimum and maximum limits,
Paragraph (e).
-4-
<PAGE> 34
Except as hereby amended, all other terms and conditions of said Lease shall
remain unchanged and in full force and effect.
LESSOR: LESSEE,
GENERAL ATOMICS IXSYS, INC.
By: /s/ R.H. DALRY By: /s/ JANINE TAYLOR
------------------------------ -----------------------------
R.H. Dalry Janine Taylor
Director Facilities Director of Finance and
Administration
Date: March 9, 1994 Date: March 15, 1994
---------------------------- ---------------------------
-5-
<PAGE> 35
[LOGO]
ADDENDUM TO
STANDARD LEASE
DATED March 1, 1994
-----------------------------------
BY AND BETWEEN General Atomics
--------------------------
IXSYS, Inc.
----------------------------------------
54 RENT ESCALATIONS
(a) On each anniversary of this Sublease the monthly rent payable under
paragraph 4 of the attached Lease shall be adjusted by the increase, if any,
from the date this Lease commenced, in the Consumer Price Index of the Bureau
of Labor Statistics of the U.S. Department of Labor for Urban Wage Earners and
Clerical Workers, Los Angeles-Long Beach-Anaheim, California (1967=100). "All
Items", herein referred to as "C.P.I."
(b) The monthly rent payable in accordance with paragraph (a) of this
Addendum shall be calculated as follows: the rent payable for the first month
of the term of this Lease, as set forth in paragraph 4 of the attached Lease,
shall be multiplied by a fraction the numerator of which shall be the C.P.I.
of the calendar month during which the adjustment is to take effect, and the
denominator of which shall be the C.P.I. for the calendar month in which the
original Lease term commences. The sum so calculated shall constitute the new
monthly rent hereunder, but in no event, shall such new monthly rent be less
than the rent payable for the month immediately preceding the date for rent
adjustment.
(c) Pending receipt of the required C.P.I. and determination of the
actual adjustment, Lessee shall pay an estimated adjusted rental, as reasonably
determined by Lessor by reference to the then available C.P.I. information.
Upon notification of the actual adjustment after publication of the required
C.P.I., any overpayment shall be credited against the next installment of rent
due, and any underpayment shall be immediately due and payable by Lessee.
Lessor's failure to request payment of an estimated or actual rent adjustment
shall not constitute a waiver of the right to any adjustment provided for in
the Lease or this addendum.
(d) In the event the compilation and/or publication of the C.P.I. shall
be transferred to any other governmental department or bureau or agency or
shall be discontinued, then the index most nearly the same as the C.P.I. shall
be used to make such calculation. In the event that Lessor and Lessee cannot
agree on such alternative index, then the matter shall be submitted for
decision to the American Arbitration Association in accordance with the then
rules of said association and the decision of the arbitrators shall be binding
upon the parties. The cost of said Arbitrators shall be paid equally by Lessor
and Lessee.
<PAGE> 36
THE IDEAL LOCATION
Sorrento West is strategically located just off U.S. Interstate 5 at 805,
the major North/South highways that provide easy access to the West's major
markets. All major delivery firms provide regular service. San Diego's port
facilities and international airport are only 15 minutes away.
[MAP]
[MAP]
DIRECTIONS FROM SAN DIEGO: Take the Sorrento Valley Exit off
Interstate 5 (north). Turn left on Roselle Street. Pass
under Interstate 5 and follow Roselle to Sorrento West site.
OR
Take the Sorrento Valley Exit off Interstate 805 (north).
Turn left on Sorrento Valley Road. Follow Sorrento Valley
[MAP] Road to Intersection with Sorrento Valley Blvd. Turn left
over railroad tracks and bridge spanning flood control
channel. Turn right onto Roselle Street and follow Roselle
north to Sorrento West site. Approximately 1 block.
FROM LOS ANGELES: Take Carmel Valley Road Exit off
Interstate 5 (south). Turn right onto Carmel Valley Road
and then left onto Sorrento Valley Road. Follow Sorrento
Valley Road to intersection with Sorrento Valley Boulevard.
Turn right over railroad tracks and bridge spanning flood
control channel. Turn right onto Roselle Street and follow
Roselle to Sorrento West site.
For information contact:
Exhibit A-1
Amendment #1
<PAGE> 37
[BUILDING 63 FLOOR PLAN]
Exhibit A-2
Amendment #1
<PAGE> 38
[BUILDING 66 FLOOR PLAN]
Exhibit A-3
Amendment #1
<PAGE> 39
IXSYS LEASEHOLD IMPROVEMENTS March 1, 1994
Loan Amount $670,000.00
Interest Rate 12.0%
Term (in months) 84
Monthly payment $11,710.23
<TABLE>
<CAPTION>
PAYMENT DATE PAYMENT INTEREST BALANCE
------------ ------- -------- -------
<S> <C> <C> <C>
$670,000.00
April 1, 1994 $11,710.23 $0.00 658,289.77
May 1, 1994 11,710.23 6,582.90 653,162.44
June 1, 1994 11,710.23 6,531.62 647,983.83
July 1, 1994 11,710.23 6,479.84 642,753.44
August 1,1994 11,710.23 6,427.53 637,470.74
September 1, 1994 11,710.23 6,374.71 632,135.22
October 1, 1994 11,710.23 6,321.35 626,746.34
November 1, 1994 11,710.23 6,267.46 621,303.58
December 1, 1994 11,710.23 6,213.04 615,806.38
January 1, 1995 11,710.23 6,158.06 610,254.22
February 1, 1995 11,710.23 6,102.54 604,646.53
March 1, 1995 11,710.23 6,046.47 598,982.77
April 1, 1995 11,710.23 5,989.83 593,262.36
May 1, 1995 11,710.23 5,932.62 587,484.76
June 1, 1995 11,710.23 5,874.85 581,649.37
July 1, 1995 11,710.23 5,816.49 575,755.64
August 1,1995 11,710.23 5,757.56 569,802.96
September 1, 1995 11,710.23 5,698.03 563,790.76
October 1, 1995 11,710.23 5,637.91 557,718.44
November 1, 1995 11,710.23 5,577.18 551,585.40
December 1, 1995 11,710.23 5,515.85 545,391.02
January 1, 1996 11,710.23 5,453.91 539,134.70
February 1, 1996 11,710.23 5,391.35 532,815.82
March 1, 1996 11,710.23 5,328.16 526,433.74
April 1, 1996 11,710.23 5,264.34 519,987.85
May 1, 1995 11,710.23 5,199.88 513.477.50
June 1, 1996 11,710.23 5,134.78 506,902.05
July 1, 1996 11,710.23 5,069.02 500,260.84
August 1,1996 11,710.23 5,002.61 493,553.21
September 1, 1996 11,710.23 4,935.53 486,778.52
October 1, 1996 11,710.23 4,867.79 479,936.07
November 1, 1996 11,710.23 4,799.36 473,025.20
December 1, 1996 11,710.23 4,730.25 466,045.22
January 1, 1997 11,710.23 4,660.45 458,995.45
February 1, 1997 11,710.23 4,598.95 451,875.17
March 1, 1997 11,710.23 4,518.75 444,683.69
April 1, 1997 11,710.23 4,446.84 437,420.30
May 1, 1997 11,710.23 4,374.20 430,084.27
June 1, 1997 11,710.23 4,300.84 422,674.89
</TABLE>
Exhibit A-4
Amendment #1
Page 1 of 2
<PAGE> 40
IXSYS LEASEHOLD IMPROVEMENTS March 1, 1994
<TABLE>
<S> <C> <C> <C>
July 1, 1997 11,710.23 4,226.75 415,191.40
August 1, 1997 11,710.23 4,151,91 407,633.09
September 1, 1997 11,710.23 4,076.33 399,999.19
October 1, 1997 11,710.23 3,999.99 392,288.95
November 1, 1997 11,710.23 3.922.89 384,501.61
December 1, 1997 11,710.23 3,845.02 376,636.40
January 1, 1998 11,710.23 3,766.36 368,692.53
February 1, 1998 11,710.23 3,686.93 360,669.23
March 1, 1998 11,710.23 3,606.69 352,565.69
April 1, 1998 11,710.23 3.525.66 344,381.12
May 1, 1998 11,710.23 3,443.81 366,114.70
June 1, 1998 11,710.23 3,361.15 327,765.61
July 1, 1998 11,710.23 3,227.66 319,333.04
August 1, 1998 11,710.23 3,193.33 310,816.14
September 1, 1998 11,710.23 3,108.16 302,214.07
October 1, 1998 11,710.23 3,022.14 293,525.98
November 1, 1998 11,710.23 2,935.26 284,751.01
December 1, 1998 11,710.23 2,847.51 275,888.29
January 1, 1999 11,710.23 2,758.88 266,936.95
February 1, 1999 11,710.23 2,669.37 257,896.08
March 1, 1999 11,710.23 2,578.96 248,764.82
April 1, 1999 11,710.23 2,487.65 239,542.23
May 1, 1999 11,710.23 2,395.42 230,227.43
June 1, 1999 11,710.23 2,302.27 220,819.47
July 1, 1999 11,710.23 2,208.19 211,317.44
August 1, 1999 11,710.23 2,113.17 201,720.38
September 1, 1999 11,710.23 2,017.20 192,027.35
October 1, 1999 11,710.23 1,920.27 182,237.40
November 1, 1999 11,710.23 1,822.37 172,349.54
December 1, 1999 11,710.23 1,723.50 162,362.81
January 1, 2000 11,710.23 1,623.61 152,276.20
February 1, 2000 11,710.23 1,522,76 142,088.74
March 1, 2000 11,710.23 1,420.89 131,799.39
April 1, 2000 11,710.23 1,317.99 121,407.16
May 1, 2000 11,710.23 1,214.07 110,911.00
June 1, 2000 11,710.23 1,109.11 100,309.88
July 1, 2000 11,710.23 1,003.10 89,602.75
August 1, 2000 11,710.23 896.03 78,788.55
September 1, 2000 11,710.23 787.89 67,866.20
October 1, 2000 11,710.23 678.66 56,834.63
November 1, 2000 11,710.23 568.35 45,692.75
December 1, 2000 11,710.23 456.93 34,439.45
January 1, 2001 11,710.23 344.39 23,073.61
February 1, 2001 11,710.23 230.74 11,594.12
March 1, 2001 11,710.23 115.94 (0.17)
</TABLE>
EXHIBIT A-4
Amendment #1
Page 2 of 2
<PAGE> 41
BUILDING 6 SPECIALTY LABS RESTORATION REQUIREMENTS
Revised 12/16/93
<TABLE>
<S> <C> <C>
MECHANICAL
o Inspect general conditions of HVAC units;
inspect fans, motor, belts,
compressors and filters cleanliness.
o Inspect ducting for cleanliness.
o Estimate needed repairs.
Jackson & Blanc $702
FLOORING
o Replace sheet vinyl floor covering where
seams and broken edges cannot be repaired.
Harvey Interiors $19,300
CLEANING
o Professionally clean all carpet and vinyl floor
that will not be replaced. $400
o Professionally clean blinds. 50 blinds
@ $8.00/each $400
PAINTING
o Repair all holes in dry wall, fill, sand and
paint with one coat.
o Paint wall covering in Director's office after
patching holes in the wall.
McMurray Painting $2,300
REMOVED OR MISSING LEASEHOLD ITEMS
1. Manning Development, Inc. Change Order #2 851.50
Plug strips 102.18
GC & OH @ 12%
--------
953.68
2. Manning Development Change Order #21
Projection screen 408.00
GC & OH @ 12% 48.96
--------
456.96
3. Manning Development Change Order #22
2 Coats of wax VCT flooring $625.00
GC & OH @ 12% 75.00
--------
4. Manning Development Change Order #23
Provide and install 6 fire extinguishers $301.95
GC & OH @ 12% 36.23
--------
338.18
5/6 of cost (5 extinguishers missing) $281.82
--------
Total $2392.46
o Discounted value 310K x $2392 = $1,741
----
426K
TOTAL $24,843
Less Security Deposit (8,680)
Less Specialty Lab's Check #017782 dated 8/27/93 (11,320)
Less Final Payment $(4,843)
-------
Balance Due -0-
</TABLE>
Exhibit A-5
Amendment #1
<PAGE> 42
AMENDMENT #2 TO THE SUBLEASE
BY AND BETWEEN
GENERAL ATOMICS AND IXSYS, INC.
This Sublease Amendment #2 ("Amendment #2") dated for reference purposes only,
January 1, 1995, is made by and between General Atomics, a California
Corporation (herein called "Lessor") and IXSYS, Inc., a Delaware Corporation
(herein called "Lessee"):
RECITALS
WHEREAS, Parties entered into a Sublease Agreement dated June 1, 1993, and
Amendment #1 dated March 1, 1994, for certain Premises designated as "FIRST-IN"
and "EXPANSION";
WHEREAS, Lessor has completed the leasehold improvements for "EXPANSION"
space at Building 6, 3520 Dunhill Street, the last of three separate agreed to
improvements, and has given notice to the Lessee of the change in leasehold
payment schedule;
WHEREAS, Lessee Subleases from Lessor, on a month-to-month basis, part of
the designated "EXPANSION" space in Building 3, 3550 Dunhill Street and Parties
agreed by previous Amendment that the whole Building 3 "EXPANSION" space block
would be added to the Lessee's Premises effective January 1, 1995; and herein
amended to March 1, 1995;
WHEREAS, Parties herein desire to modify the Sublease in certain respects
to clarify agreements and note for the record completion of certain commitments;
NOW THEREFORE, in consideration of the forgoing, and in consideration of
mutual covenants and agreements of the Parties hereto, the Parties mutually
covenant and agree as follows:
2.1 PREMISES. Following is a summary of the Lessee's possession dates of all
space blocks under terms of the base Sublease and Amendments #1 and #2 (refer
to Exhibit A-2, Building 3 Floor Plan; Exhibit A-3, Building 6 Floor Plan:
<TABLE>
<CAPTION>
BUILDING DESIGNATION SIZE (SF) POSSESSION DATE
-------- ----------- -------- ---------------
<S> <C> <C> <C>
6 "FIRST-IN" (Phase I) 14,000 December 17, 1993
3 "FIRST-IN" (Admin) 9,626 January 19, 1994
6 "EXPANSION" (Phase II) 3,910 July 1, 1994
3 "EXPANSION" 475 July 1, 1994
3 "EXPANSION" 899 March 1, 1995
TOTAL: 28,910
</TABLE>
3.1 TERM. The Term of the Sublease shall remain unchanged. The Sublease period
is for ten years with a commencement date of December 17, 1993 and termination
date of December 16, 2003. End of term for all space blocks, "FIRST-IN" and
"EXPANSION", shall be coterminous.
-1-
<PAGE> 43
4.1 BASE RENT. Monthly rent for space blocks designated "FIRST-IN" or
"EXPANSION", shall remain at a rate of $0.72 per gross square foot until
adjusted in accordance with Paragraph 54.
4.2 OPERATING EXPENSES. Effective the date of this Amendment, the Lessee's
prorata portion of the operating expenses shall be calculated as follows:
<TABLE>
<CAPTION>
BLDG/PARK TOTAL SIZE(SF) LESSEE OCCUPIED(SF) PERCENTAGE
--------- -------------- ------------------- ----------
<S> <C> <C> <C>
3 20,817 11,000 52.84
6 24,113 17,910 74.28
4, 5 & 7 73,702 -0- -0-
------- ------ -----
Park 118,632 28,910 24.37
</TABLE>
48.2 RENT ESCALATIONS. The first Rent Escalation for "FIRST-IN" and
"EXPANSION" space shall be deferred until January 1, 1996 and shall be indexed
as stipulated in Paragraph 54.
48.3 LEASEHOLD IMPROVEMENT RECOVERY. Previous Sublease Agreements provided for
Lessor's leasehold improvement financing for those space blocks designated as
"FIRST-IN" and "EXPANSION". Three separate projects were completed and funded
for these designated spaces. These include: Building 6 (Phase I); Building 3
(Admin.) and Building 6 (Phase II). A leasehold payment schedule dated March 1,
1994 was established for the purpose of recovering costs of improvements on the
first two stated projects and cost of the design for the third stated project.
Further, Sublease Amendment #1 stipulated that upon substantial completion of
Building 6 (Phase II), then designated as 5,525sf and herein corrected to the
actual space block size of 3,910sf, a new amortization schedule would be
determined using actual expenditures of the three separate projects. The March
1, 1994 payment schedule is hereby replaced by a revised schedule dated January
1, 1995, with a starting balance determined as follows:
<TABLE>
<S> <C>
Building 6 (Phase I) - Portion Financed by Lessor $397,487.50
Building 6 (Phase II) - Portion Financed by Lessor $284,322.68
Building 3 (Admin.) - Portion Financed by Lessor $231,269.49
Total Financed by Lessor $913,079.67
Less Principal Reduction: 3-1-94 Payment Schedule $ 54,193.62
Starting Balance: 1-1-95 Payment Schedule $858,886.00
MONTHLY LEASEHOLD IMPROVEMENT PAYMENT: $ 16,170.94
</TABLE>
The new balance is amortized at the previously agreed rate of 12% per annum,
over the remaining term of the original seven year financing term that started
April 1, 1994 and ends March 1, 2001 (seventy-five months). Refer to Exhibit A-5
for the new payment schedule.
48.4 SECURITY DEPOSIT. The Sublease Agreement stipulates that Lessee shall pay
a security deposit in the amount equivalent to one month's rent plus two months'
-2-
<PAGE> 44
operating expenses and one month's leasehold payment. The security deposit due
upon execution of this Sublease Amendment is calculated as follows:
<TABLE>
<CAPTION>
APPLICATION SIZE RATE AMOUNT
----------- ---- ---- -------
<S> <C> <C> <C>
Building 6 "FIRST IN" 14,000 $0.72 $10,080
Building 3 "FIRST IN" 9,626 $0.72 $ 6,931
Building 6 "EXPANSION" 3,910 $0.72 $ 2,815
Building 3 "EXPANSION" 1,374 $0.72 $ 989
Operating Expenses 28,910 $0.15(x2) $ 8,673
Building 6 "Exp" Elect. Uil. 3,910 $0.50 $ 1,955
Monthly Leasehold Payment $16,171
-------
TOTAL DEPOSIT $47,614
Deposit on Record $29,317
DEPOSIT DUE: $18,297
</TABLE>
50. LEASEHOLD IMPROVEMENTS. Delete in its entirety and replace with the
following:
This Sublease Amendment notes for the record the actual costs incurred by the
Lessor to install Lessee's leasehold improvements for "FIRST-IN" and "EXPANSION"
space blocks. This Amendment also notes for record, a revised payment schedule
required for Lessee's payment of the leasehold improvements and adjusted
security deposit. Parties agree that Lessor has fulfilled its obligation to
finance and install leasehold improvements for the "FIRST-IN" and "EXPANSION"
space.
50.1 "FIRST-IN" SPACE IMPROVEMENTS. Delete in its entirety.
50.2 "EXPANSION" SPACE IMPROVEMENTS. Delete in its entirety.
EXCEPT AS HEREBY AMENDED, ALL OTHER TERMS AND CONDITIONS SAID SUBLEASE SHALL
REMAIN UNCHANGED AND IN FULL FORCE AND EFFECT.
LESSOR: LESSEE:
GENERAL ATOMICS IXSYS, INC.
By: /s/ ROBERT H. DALRY By: /s/ JANINE TAYLOR
---------------------------- ----------------------------
R.H. Dalry Janine Taylor
Director Facilities CFO and VP Finance and Admin.
Date: June 16, 1995 Date: September 22, 1997
-------------------------- --------------------------
-3-
<PAGE> 45
[AIR LOGO]
ADDENDUM TO
STANDARD LEASE
DATED January 1, 1995
BY AND BETWEEN General Atomics
IXSYS, Inc.
54 RENT ESCALATIONS
(a) On January 1, 1996 and every anniversary date thereafter, the monthly
rent payable under paragraph 4 of the attached Lease shall be adjusted by the
increase, if any, from the date this Lease commenced, in the Consumer Price
Index of the Bureau of Labor Statistics of the U.S. Department of Labor for
Urban Wage Earners and Clerical Workers. Los Angeles-Long Beach-Anaheim,
California (1967=100). "All Items", herein referred to as "C.P.I."
(b) The monthly rent payable in accordance with paragraph (a) of this
Addendum shall be calculated as follows: the rent payable for the first month
of the term of this Lease, as set forth in paragraph 4 of the attached Lease,
shall be multiplied by a fraction the numerator of which shall be the C.P.I. of
the calendar month during which the adjustment is to take effect, and the
denominator of which shall be the C.P.I. for the calendar month in which the
original Lease term commences. The sum so calculated shall constitute the new
monthly rent hereunder, but in no event shall such new monthly rent be less
than the rent payable for the month immediately preceding the date for rent
adjustment.
(c) Pending receipt of the required C.P.I. and determination of the actual
adjustment, Lessee shall pay an estimated adjusted rental, as reasonably
determined by Lessor by reference to the then available C.P.I. information. Upon
notification of the actual adjustment after publication of the required C.P.I.,
any overpayment shall be credited against the next installment of rent due, and
any underpayment shall be immediately due and payable by Lessee. Lessor's
failure to request payment of an estimated or actual rent adjustment shall not
constitute a waiver of the right to any adjustment provided for in the Lease or
this addendum.
(d) In the event the compilation and/or publication of the C.P.I. shall be
transferred to any other governmental department or bureau or agency or shall be
discontinued, then the index most nearly the same as the C.P.I. shall be used to
make such calculation. In the event that Lessor and Lessee cannot agree on such
alternative index, then the matter shall be submitted for decision to the
American Arbitration Association in accordance with the then rules of said
association and the decision of the arbitrators shall be binding upon the
parties. The cost of said Arbitrators shall be paid equally by Lessor and
Lessee.
RENT ESCALATIONS
<PAGE> 46
THE IDEAL LOCATION
Sorrento West is strategically located just off U.S. Interstate 5 at 805, the
major North/South highways that provide easy access to the West's major
markets. All major delivery firms provide regular service. San Diego's port
facilities and international airport are only 15 minutes away.
DIRECTIONS
[Map]
FROM SAN DIEGO: Take the Sorrento Valley exit off Interstate 5 (north). Turn
left on Roselle Street. Pass under Interstate 5 and follow Roselle to Sorrento
West site.
OR
Take the Sorrento Valley Exit off Interstate 805 (north). Turn left on Sorrento
Valley Road. Follow Sorrento Valley Road to intersection with Sorrento Valley
Blvd. Turn left over railroad tracks and bridge spanning flood control channel.
Turn right onto Roselle Street and follow Roselle north to Sorrento West site.
Approximately 1 block.
FROM LOS ANGELES: Take Carmel Valley Road exit off Interstate 5 (south). Turn
right onto Carmel Valley Road and then left onto Sorrento Valley Road. Follow
Sorrento Valley Road to intersection with Sorrento Valley Boulevard. Turn right
over railroad tracks and bridge spanning flood control channel. Turn right onto
Roselle Street and follow Roselle to Sorrento West site.
[Map]
Exhibit A-1
Site Map
<PAGE> 47
BUILDING 3
[FLOOR PLAN]
Exhibit A-2
Building 3 Floor Plan
<PAGE> 48
[FLOOR PLAN]
Exhibit A-3
Building 6 Floor Plan
<PAGE> 49
Amortization Schedule for Recovery of Costs for Ixsys Leasehold Improvements
January 1, 1995
<TABLE>
<S> <C>
Loan Amount $858,886.00
Interest Rate 12.0%
Term (in months) 75
Monthly payment $ 16,170.94
</TABLE>
<TABLE>
<CAPTION>
Payment Date Payment Interest Balance
------------ ---------- --------- -----------
<S> <C> <C> <C>
$858,886.00
January 1, 1995 $16,170.94 $ 0.00 842,715.06
February 1, 1995 $16,170.94 $8,427.15 834,971.27
March 1, 1995 $16,170.94 $8,349.71 827,150.04
April 1, 1995 $16,170.94 $8,271.50 819,250.60
May 1, 1995 $16,170.94 $8,192.51 811,272.17
June 1, 1995 $16,170.94 $8,112.72 803,213.95
July 1, 1995 $16,170.94 $8,032.14 795,075.15
August 1, 1995 $16,170.94 $7,950.75 786,854.96
September 1, 1995 $16,170.94 $7,868.55 778,552.57
October 1, 1995 $16,170.94 $7,785.53 770,167.16
November 1, 1995 $16,170.94 $7,701.67 761,697.89
December 1, 1995 $16,170.94 $7,616.98 753,143.93
January 1, 1996 $16,170.94 $7,531.44 744,504.43
February 1, 1996 $16,170.94 $7,445.04 735,778.53
March 1, 1996 $16,170.94 $7,357.79 726,965.38
April 1, 1996 $16,170.94 $7,269.65 718,064.09
May 1, 1996 $16,170.94 $7,180.64 709,073.79
June 1, 1996 $16,170.94 $7,090.74 699,993.59
July 1, 1996 $16,170.94 $6,999.94 690,822.59
August 1, 1996 $16,170.94 $6,908.23 681,559.87
September 1, 1996 $16,170.94 $6,815.60 672,204.53
October 1, 1996 $16,170.94 $6,722.05 662,755.64
November 1, 1996 $16,170.94 $6,627.56 653,212.25
December 1, 1996 $16,170.94 $6,532.12 643,573.43
January 1, 1997 $16,170.94 $6,435.73 633,838.23
February 1, 1997 $16,170.94 $6,338.38 624,005.67
March 1, 1997 $16,170.94 $6,240.06 614,074.79
April 1, 1997 $16,170.94 $6,140.75 604,044.60
May 1, 1997 $16,170.94 $6,040.45 593,914.10
June 1, 1997 $16,170.94 $5,939.14 583,682.30
July 1, 1997 $16,170.94 $5,836.82 573,348.19
August 1, 1997 $16,170.94 $5,733.48 562,910.73
September 1, 1997 $16,170.94 $5,629.11 552,368.89
October 1, 1997 $16,170.94 $5,523.69 541,721.64
November 1, 1997 $16,170.94 $5,417.22 530,967.92
December 1, 1997 $16,170.94 $5,309.68 520,106.66
January 1, 1998 $16,170.94 $5,201.07 509,136.79
February 1, 1998 $16,170.94 $5,091.37 498,057.21
March 1, 1998 $16,170.94 $4,980.57 486,866.85
April 1, 1998 $16,170.94 $4,868.67 475,564.57
May 1, 1998 $16,170.94 $4,755.65 464,149.28
June 1, 1998 $16,170.94 $4,641.49 452,619.83
July 1, 1998 $16,170.94 $4,526.20 440,975.09
August 1, 1998 $16,170.94 $4,409.75 429,213.90
September 1, 1998 $16,170.94 $4,292.14 417,335.10
October 1, 1998 $16,170.94 $4,173.35 405,337.51
November 1, 1998 $16,170.94 $4,053.38 393,219.95
December 1, 1998 $16,170.94 $3,932.20 380,981.21
January 1, 1999 $16,170.94 $3,809.81 368,620.08
February 1, 1999 $16,170.94 $3,686.20 356,135.34
March 1, 1999 $16,170.94 $3,561.35 343,525.75
</TABLE>
Exhibit A-4
(Page 1 of 2)
<PAGE> 50
Amortization Schedule for Recovery of Costs for Ixsys Leasehold Improvements
(Continued)
<TABLE>
<S> <C> <C> <C>
April 1, 1999 $16,170.94 $3,435.26 330,790.07
May 1, 1999 $16,170.94 $3,037.90 317,927.03
June 1, 1999 $16,170.94 $3,179.27 304,935.36
July 1, 1999 $16,170.94 $3,049.35 291,813.78
August 1, 1999 $16,170.94 $2,918.14 278,560.97
September 1, 1999 $16,170.94 $2,785.61 265,175.64
October 1, 1999 $16,170.94 $2,651.76 251,656.46
November 1, 1999 $16,170.94 $2,516.56 238,002.08
December 1, 1999 $16,170.94 $2,380.02 224,211.16
January 1, 2000 $16,170.94 $2,242.11 210,282.34
February 1, 2000 $16,170.94 $2,102.82 196,214.22
March 1, 2000 $16,170.94 $1,962.14 182,005.42
April 1, 2000 $16,170.94 $1,820.05 167,654.54
May 1, 2000 $16,170.94 $1,676.55 153,160.14
June 1, 2000 $16,170.94 $1,531.60 138,520.80
July 1, 2000 $16,170.94 $1,385.21 123,735.07
August 1, 2000 $16,170.94 $1,237.35 108,801.48
September 1, 2000 $16,170.94 $1,088.01 93,718.56
October 1, 2000 $16,170.94 $ 937.19 78,484.80
November 1, 2000 $16,170.94 $ 784.85 63,098.71
December 1, 2000 $16,170.94 $ 630.99 47,558.76
January 1, 2001 $16,170.94 $ 475.59 31,863.40
February 1, 2001 $16,170.94 $ 318.63 16,011.10
March 1, 2001 $16,170.94 $ 160.11 0.27
</TABLE>
Amor_IXSYS
Exhibit A-4
(Page 2 of 2)
<PAGE> 51
AMENDMENT #3 TO THE SUBLEASE
BY AND BETWEEN
GENERAL ATOMICS AND IXSYS, INC.
This Sublease Amendment #3 ("Amendment #3"), dated October 1, 1997 for reference
purposes only, is made by and between General Atomics, ("Lessor") and Ixsys,
Inc. ("Lessee").
RECITALS
Lessee and Lessor are Parties to a certain Sublease Agreement dated June 1,
1993, Amendment #1 dated March 1, 1994, and Amendment #2 dated January 1, 1995,
for certain Premises at Buildings 3 and 6 of Lessor's Sorrento West Commercial
Park.
Ixsys, Inc. subleases a portion of Builds 3 and 6 and desires to reduce the size
of its Premises, vacate Building 3 (approximately 11,000sf of improved office
space) and consolidate its operations to Building 6.
Biosite Diagnostics, Inc., a Tenant that currently subleases 9,817sf of Building
3, has a need to expand its Premises and by a concurrent sublease amendment
agrees to sublease all Building 3 space vacated by Ixsys, Inc.
Ixsys, Inc. has a need to expand its Premises in Building 6 to accommodate the
surrender of the Building 3 Premises and agrees to sublease approximately
6,203sf of Building 6 improved space from General Atomics.
Effective the date of Amendment #3, Ixsys, Inc. remains indebted to General
Atomics for approximately $145,868 expended by General Atomics for Leasehold
Improvements installed specifically for Ixsys, Inc. at Building 3, and Ixsys
Inc. has agreed to continue monthly payments until the debt is fully paid.
General Atomics consents to the assignment of the Building 3 Premises to Biosite
Diagnostics, Inc., and the concurrent subleasing of added space in Building 6 to
Ixsys, Inc. on a short term, subject to the condition that Lessor incurs no
additional costs, loss of Rent and Loss of Operating Expenses, except that
associated with the net reduction in length of lease term for Building 3, Suite
B.
NOW THEREFORE, in consideration of the foregoing, and in consideration of
mutual covenants and agreements of the Parties hereto, the Parties mutually
covenant and agree as follows:
2.1 PREMISES. Amendment #3 reduces Lessee's Building 3 Premises by
approximately 11,000sf (Surrendered Space) more specifically shown on attached
Exhibit A-2, and increases Building 6 Premises by 6,203sf (Added Space) more
specifically shown on attached Exhibit A-3. Following is a summary of the
Lessee's space blocks, the date of Possession (or Surrender), the approximate
size, and respective leasehold improvement phase for which leasehold financing
is attributed:
<TABLE>
<CAPTION>
POSSESSION SPACE IMPROVEMENT
LOCATION SIZE(GSF) SURRENDER DATES DESIGNATION PHASE
-------- -------- --------------- ----------- -----------
<S> <C> <C> <C> <C>
Building 6 14,000 12/17/93 First-in Phase 1
Building 3 9,626 01/19/94 First-in Admin.
Building 6 3,910 07/01/94 Expansion Phase 2
Building 3 475 07/01/94 Expansion N/A
Building 3 899 03/01/95 Expansion N/A
Building 3 11,000 12/01/97 Surrendered N/A
Building 6 6,203 12/01/97 Added N/A
Building 3 00
Building 6 24,113
------
TOTAL 24,113 REVISED
</TABLE>
3.0 TERM. Delete in its entirety and replace with the following: End of Term
for the SURRENDERED Space and start of Term for ADDED Space shall be as noted
under Paragraph 2.1. End of Term for ADDED space shall be as described in
Paragraph 39.5.
4.1 RENT. Delete in its entirety and replace with the following: Starting
Monthly Rent for the ADDED Space shall be $4,466. Monthly Rent for Building 6
CURRENT Space shall remain unchanged at $13,599. If the Lessee retains
Possession of ADDED Space, then effective January 1, 2001, rental rate for ADDED
Space shall be at the same rate for CURRENT SPACE.
4.2(a) OPERATING EXPENSES. Delete in its entirety and replace with the
following: Lessee shall pay its prorata share of Operating Expenses for all
leased space including ADDED Space. Amendment #3 changes the Lessee's prorata
share of Operating Expense for the REVISED Space to: Building 3:00%; Building
6:100%; Park: 20.33%.
<PAGE> 52
6.3 CONDITION OF THE PREMISES. Add Paragraph 6.3(c): Except for the Heating,
Ventilation and Air-conditioning Systems, for which Lessor agrees to warrant as
being in good operating condition for a period of twelve months, Lessee accepts
the Building 6 ADDED Space in "as-is" condition, cleaned, with other building
systems warranted by the Lessor for 30 days as in good working condition.
Lessee agrees to vacate Building 3 SURRENDERED Space, cleaned and acceptable to
the Lessor and Assignee (Biosite Diagnostics), and to warrant to the Assignee,
the SURRENDERED Space as being in good working condition for a thirty-day
period after date of Assignment.
39 Options. Add Paragraph 39.5
39.5 Provided Lessee is not in default of terms and conditions of the Sublease
Agreement, Lessor grants to Lessee two one-year options ("Options") to extend
the Term for the ADDED Space. Lessee shall notify Lessor three months in
advance of its intent to surrender ADDED Space.
Unless the Lessor is service formal notice of Lessee's intent to surrender
ADDED Space prior to the first or second Option Terms (successive terms
starting January 1, 1999 and January 1, 2000), Lessor shall proceed on the
basis that the Lessee will retain Possession through the forthcoming Option
Year. If the Lessee waives its right to surrender ADDED Space three months
prior to the end of the second Option Year, then Lessor shall proceed on the
basis that the Lessee elects to sublease the ADDED Space through a term
coterminous with that for CURRENT Space, or December 16, 2003.
For the first one-year Option Term, Lessee shall have the option to surrender
all ADDED Space but retain Room Number 126, in which event, Lessee shall bear
the cost to meter electrical usage for the retained ADDED Space.
46 ADDENDUM. Add Exhibit 1 by Amendment #3
48.2
&54 RENT ESCALATIONS. Delete in its entirety and replace with the following:
Effective the dates shown in the summary below, Monthly Rent shall be indexed
at a fixed three percent (3%), compounded and cumulative. This summary is
presented under the assumption that the Lessee exercises both one-year Options
for ADDED Space, and retains the ADDED Space through a term coterminous with
CURRENT Space. If the Lessee elects to surrender ADDED Space, then Rent
reduction shall be in direct relationship to that amount then in effect for the
ADDED Space as shown in the summary below:
<TABLE>
<CAPTION>
MONTHLY RENT
------------------ ADDED
EFFECTIVE CURRENT ADDED SPACE
DATE SPACE SPACE NOTES
--------- ------- ----- -----
<S> <C> <C> <C>
10/01/97 $13,599 N/A Pre-possession
11/01/97 Same $4,466 Possession Date
01/01/98 $14,007 $4,466 Base Year
01/01/99 $14,427 $4,600 Option Year 1
01/01/00 $14,860 $4,738 Option Year 2
01/01/01 $15,306 $5,301 Same as Current
01/01/02 $15,765 $5,460 Same as Current
01/01/03 $16,238 $5,624 Same as Current
</TABLE>
48.3 LEASEHOLD IMPROVEMENT RECOVERY. Lessee shall continue with monthly payment
of Leasehold Improvements in the amount established in Sublease Amendment #2.
Parties agree that the obligation for payment of debt for improvements in
Building 3 SURRENDERED Space shall be performed and observed under Amendment #3
with the same force and effect as if performed and observed prior to execution
of Amendment #3, and failure to make monthly payment of a portion or all of the
leasehold payments shall be deemed a material default as covered in Sublease
Agreement, Paragraph 13. In the event that the Lessee's controlling interest or
the majority ownership changes, the Lessor shall have the option to demand full
payment of debt remaining for Building 3 leasehold improvements with said
payment within thirty days after formal demand from the Lessor.
48.4 SECURITY DEPOSIT. Delete in its entirety and replace with the following:
Lessee shall have on Record with Lessor a Security Deposit adequate to secure
payment of Rent, Leasehold Improvement recovery and Operating Expenses in the
amount equivalent to one month's Rent, one month's Leasehold Payments and two
month's average Operating Expenses. The following summarizes the Security
Deposit required upon execution of Amendment #3:
-2-
<PAGE> 53
<TABLE>
<S> <C>
One month's Rent Building 6 - CURRENT Space $13,599
One month's Rent Building 6 - ADDED Space $ 4,466
Two Month's Operating Ex. 24,113sf x $0.15/mo x 2mo $ 7,234
Monthly Leasehold Payment - Buildings 3 and 6 $16,171
-------
Total $41,470
Less Security Deposit on Record: $47,614
-------
SURPLUS SECURITY DEPOSIT EFFECTIVE THIS AMENDMENT $ 6,144
</TABLE>
Lessor shall credit surplus Security Deposit to the Lessee's first and second
month's Added Space Rent.
55. EARLY POSSESSION. Add new Paragraph: Effective with execution of this
Amendment, Lessor grants Lessee early access to vacant ADDED Space, specifically
Room 126, for design and alteration purposes on condition that the adjoining
Tenants in occupied ADDED Space are not detrimentally affected by noise, dust,
loss of power or construction mishaps.
EXCEPT AS HEREBY AMENDED, ALL OTHER TERMS AND CONDITIONS OF SAID SUBLEASE, AND
SUBLEASE AMENDMENTS, SHALL REMAIN UNCHANGED AND IN FULL FORCE AND EFFECT.
LESSOR: LESSEE:
GENERAL ATOMICS XSYS, INCORPORATED
By: /s/ ROBERT H. DALRY By: /s/ JANINE M. TAYLOR
---------------------- --------------------------
Name: Robert H. Dalry Name: Janine M. Taylor
-------------------- ------------------------
Title: Director Facilities Title: V.P. Finance & Admin.
------------------- -----------------------
Chief Financial Officer
Date: Sept. 25, 1997 Date: September 24, 1997
-------------------- ------------------------
-3-
<PAGE> 54
EXHIBIT A-2
[DIAGRAM OF FLOOR PLAN]
BUILDING 3
SUITE A AND SUITE B
OCTOBER 1, 1997
PAGE 1 OF 2
<PAGE> 55
EXHIBIT A-3
[DIAGRAM OF FLOOR PLAN]
BUILDING 6
OCTOBER 1, 1997
PAGE 2 OF 2