California-Marina del Rey-4503 Glencoe Avenue Lease - Spieker Properties LP and John Wayne Cancer Institute
BASIC LEASE INFORMATION
OFFICE NET
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LEASE DATE: As of July 22, 1999
(same as date in first paragraph of Lease)
TENANT: John Wayne Cancer Institute, a non-profit
corporation
TENANT'S NOTICE ADDRESS: 4503 Glencoe Avenue
Marina del Rey, California
TENANT'S BILLING ADDRESS: 4503 Glencoe Avenue
Marina del Rey, California
TENANT CONTACT: DR. JAMES PHONE NUMBER: (310) 449-5262
HARDIN FAX NUMBER: (310) 582-7185
LANDLORD: Spieker Properties, L.P., a California limited partnership
LANDLORD'S NOTICE 13160 Mindanao Way, Ste, 184
ADDRESS: Marina del Rey, California 90292
LANDLORD'S REMITTANCE ADDRESS: Department 12281, P.O. Box 60077
Los Angeles, CA 90060-0077
Project Description: A project commonly known as Marina Business Center
consisting of one office building located at 13160 Mindanao
Way and three industrial buildings located at
4501-4503-4505 Glencoe Avenue, Marina del Rey,
California as shown on Exhibit B attached hereto.
Building Description: An industrial building with approximately 50,750 square
feet with ground floor and mezzanine space located at 4503
Glencoe Avenue, Marina del Rey, California as shown on
Exhibit B attached hereto.
Premises: Approximately 25,600 rentable square feet of space
commonly referred to as Suite 100 at 4503 Glencoe
Avenue, Marina del Rey, California as shown on Exhibit
"B" attached hereto.
Permitted Use: Normal office use and medical research, light manufacturing
for medical research and/or laboratory use, provided that
the Premises may not be used for (i) any medical procedures
on humans or the treatment of humans in any manner, or (ii)
any medical research on or with respect to or any medical
treatment of animals.
Occupancy Density: Seventy-seven (77) people (3 people per 1,000 rentable
square feet of the Premises).
Parking Density: Seventy-seven (77) non-exclusive spaces.
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TABLE OF CONTENTS
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1. PREMISES ....................................................................... 3
2. POSSESSION AND LEASE COMMENCEMENT .............................................. 3
3. TERM ........................................................................... 3
4. USE ............................................................................ 3
5. RULES AND REGULATIONS .......................................................... 5
6. RENT ........................................................................... 5
7. OPERATING EXPENSES ............................................................. 5
8. INSURANCE AND INDEMNIFICATION .................................................. 10
9. WAIVER OF SUBROGATION .......................................................... 11
10. LANDLORD'S REPAIRS AND MAINTENANCE ............................................. 11
11. TENANT'S REPAIRS AND MAINTENANCE ............................................... 12
12. ALTERATIONS .................................................................... 12
13. SIGNS .......................................................................... 13
14. INSPECTION/POSTING NOTICES ..................................................... 13
15. SERVICES AND UTILITIES ......................................................... 13
16. SUBORDINATION .................................................................. 14
17. FINANCIAL STATEMENTS ........................................................... 15
18. ESTOPPEL CERTIFICATE ........................................................... 15
19. SECURITY DEPOSIT ............................................................... 15
20. LIMITATION OF TENANT'S REMEDIES ................................................ 15
21. ASSIGNMENT AND SUBLETTING ...................................................... 16
22. AUTHORITY ...................................................................... 17
23. CONDEMNATION ................................................................... 17
24. CASUALTY DAMAGE ................................................................ 18
25. HOLDING OVER ................................................................... 18
26. DEFAULT ........................................................................ 19
27. LIENS .......................................................................... 20
28. Intentionally Omitted ........................................... 20
29. TRANSFERS BY LANDLORD .......................................................... 20
30. RIGHT OF LANDLORD TO PERFORM TENANT'S COVENANTS ................................ 20
31. WAIVER ......................................................................... 21
32. NOTICES ........................................................................ 21
33. ATTORNEYS' FEES ................................................................ 21
34. SUCCESSORS AND ASSIGNS ......................................................... 21
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35. FORCE MAJEURE................................................................... 21
36. SURRENDER OF PREMISES........................................................... 21
37. PARKING......................................................................... 22
38. MISCELLANEOUS................................................................... 22
39. ADDITIONAL PROVISIONS........................................................... 24
40. JURY TRIAL WAIVER............................................................... 28
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EXHIBITS
EXHIBIT "A" Rules and Regulations
EXHIBIT "C" Lease Improvement Agreement
EXHIBIT "D" Superior Rights
EXHIBIT "E" Form of Letter of Credit
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PARKING AND PARKING CHARGE: Notwithstanding the foregoing, provided
Tenant is not in default under this
Lease, during the initial Term, (i) up
to five (5) of such non-exclusive spaces
may be converted to reserved
parking spaces (at the then prevailing
parking charges for such reserved spaces),
subject to the discount described in (ii)
below, (ii) the original Tenant (and not any
assignee, subtenant or other transferee)
shall be granted a twenty percept (20%)
discount off of the then prevailing
parking charges on all of said
seventy-seven (77) parking spaces
(including the five (5) reserved parking
spaces referenced above), (iii) parking
charges shall not increase during the
first calendar year of this Lease and
thereafter shall not increase by more
than five percent (5%) per annum,
calculated on a cumulative and
compounded basis, and (iv) Tenant shall
have the right to lease additional
parking spaces, as available (as
determined by Landlord in its sole
discretion), on a month-to-month basis
at one hundred percent (100%) of the
then prevailing parking charges
(including any city tax).
SCHEDULED TERM COMMENCEMENT DATE: August 15, 1999.
SCHEDULED LENGTH OF TERM: Ten (10) years.
SCHEDULED TERM EXPIRATION DATE: August 14, 2009.
RENT:
BASE RENT: $30,208,00 per month ($1.18)
per rentable square foot per month)
(subject to adjustment as provided in
Paragraph 39A. hereof)
ESTIMATED FIRST YEAR $6,055,00 per month.
OPERATING EXPENSES:
SECURITY DEPOSIT: $350,000 (subject to
application in accordance with Paragraph
19 below).
TENANT'S PROPORTIONATE SHARE 50.44%, subject to adjustment if either
OF BUILDING: the Premises or Building is expanded or
reduced, calculated by multiplying the
rentable square feet of the Premises by
100 and dividing the product by the
total rentable square feet in the
Building.
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The foregoing Basic Lease Information is incorporated into and made a part of
this Lease. Each reference in this Lease to any of the Basic Lease Information
shall mean the respective information above and shall be construed to
incorporate all of the terms provided under the particular Lease paragraph
pertaining to such information. In the event of any conflict between the Basic
Lease Information and the Lease, the latter shall control.
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LANDLORD TENANT
Spieker Properties, L.P., JOHN WAYNE CANCER INSTITUTE
a California limited partnership a non-profit corporation
By: Spieker Properties, Inc., By:
a Maryland corporation, Its: COO/Exec. V.P.
its general partner
By:
Its: Vice President
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LEASE
THIS LEASE is made as of the 22nd day of July, 1999, by and between
Spieker Properties, L.P., a California limited partnership (hereinafter called
"Landlord"), and John Wayne Cancer Institute, a non-profit
corporation (hereinafter called "Tenant").
1. PREMISES
Subject to Section 39C relating to Tenant's right to expand Landlord leases to
Tenant and Tenant leases from Landlord, upon the terms and conditions
hereinafter set forth, those premises (the "Premises") outlined
in red on Exhibit B and described in the Basic Lease Information. The Premises
shall be all or part of a building (the "Building") and of a
project (the "Project"), which consists of one office building
and three industrial buildings, as described in the Basic Lease
Information. The Building and Project are outlined in blue and green
respectively on Exhibit B. Landlord and Tenant acknowledge That physical changes
may occur from time to time in the Premises, Building or Project, and that the
number of buildings and additional facilities which constitute the Project may
change from time to time, which may result in an adjustment in
Tenant's Proportionate Share, as defined in the Basic Lease Information, as
provided in Paragraph 7.A.
2. POSSESSION AND LEASE COMMENCEMENT
A. Construction of Improvements. The term commencement date
("Term Commencement Date") shall occur on the earlier of August
15, 1999, or the date Tenant first commences business operations from some or
all of the Premises.
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3. TERM
Subject to Tenant's right to extend the Term under Section 39B, the term of this
Lease (the "Term") shall commence on the Term Commencement Date
and continue in full force and effect for the number of years
specified as the Length of Term in the Basic Lease Information or until this
Lease is terminated as otherwise provided herein. If the Term Commencement Date
is a date other than the first day of the calendar month, the Term shall be the
number of years of the Length of Term in addition to the
remainder of the calendar month following the Term Commencement Date.
4. USE
A. GENERAL. Tenant shall use the Premises for the permitted use specified
in the Basic Lease Information ("Permitted Use") and for no other
use or purpose, without Landlord's prior written consent which may be withheld
in Landlord's sole and absolute discretion. Tenant shall control
Tenant's employees, agents, customers, visitors, invitees, licensees,
contractors, assignees and subtenants (collectively, "Tenant's
Parties") in such a manner that Tenant and Tenant's Parties
cumulatively do not exceed the occupant density (the "Occupancy
Density") or the parking density (the "Parking Density")
specified in the Basic Lease Information at any time. Tenant shall pay the
Parking Charge specified in the Basic Lease Information as Additional Rent (as
hereinafter defined) hereunder. So long as Tenant is occupying the Premises,
Tenant and Tenant's Parties shall have the nonexclusive right to
use, in common with other parties occupying the Building or Project, the parking
areas, driveways and other common areas of the Building and Project, subject to
the terms of this Lease and such rules and regulations as Landlord may from time
to time prescribe (provided Landlord has delivered or otherwise notified Tenant
of such rules and regulations at least ten (10) days in advance of the
effectiveness thereof). Landlord reserves the right, without notice or liability
to Tenant, and without the same constituting an actual or constructive eviction,
to alter or modify the common areas from time to time, including the location
and configuration thereof, and the amenities and facilities which Landlord may
determine to provide from time to time. Subject to all of the terms and
conditions of this Lease. Tenant shall have full and unimpaired access to the
Premises at all times during the Term.
B. LIMITATIONS. Tenant shall not permit any odors, smoke, dust, gas,
substances, noise or vibrations to emanate from the Premises or from any portion
of the common areas as a result of Tenant's or any
of Tenant's Parties' use thereof, nor take any action which would constitute a
nuisance or would disturb, obstruct or endanger any other tenants or occupants
of the Building or Project or elsewhere, or interfere with their use of their
respective premises or common areas. Storage outside the Premises of materials,
vehicles or any other items is prohibited. Tenant shall not use or allow the
Premises to be used for any immoral, improper or unlawful purpose, nor shall
Tenant cause or maintain or permit any nuisance in, on or about the Premises.
Tenant shall not commit or suffer the commission of any waste in, on or about
the Premises. Tenant shall not allow any sale by auction upon the Premises, or
place any loads upon the floors, walls or ceilings which could endanger the
structure, or place any harmful substances in the drainage system of the
Building or Project. No waste, materials or refuse shall be dumped upon or
permitted to remain outside the Premises. Landlord shall not be responsible to
Tenant for the non-compliance by any other tenant or occupant of the Building or
Project with any of the above-referenced rules or any other terms or provisions
of such tenant's or occupant's lease or other contract, except to
the extent such non-compliance results from Landlord's failure to enforce said
rules in a non-discriminatory manner against all tenants in the Project.
C. COMPLIANCE WITH REGULATIONS. By taking possession of the
Premises, Tenant accepts the Premises in the condition existing as of the date
of such entry. Tenant shall not use the Premises or allow the use
of the Premises for any purpose that violates any existing or future applicable
municipal, state and federal and other governmental statutes, rules,
requirements, regulations, laws and ordinances, including zoning ordinances and
regulations, and covenants, easements and restrictions of record governing and
relating to the use, occupancy or possession of the Premises, or
Tenant's use of the common areas, provided Landlord does not
amend or enter into any restrictions that contravene the provisions of this
Lease or otherwise adversely affect Tenant's use of the Premises, or the use,
storage, generation or disposal of Hazardous Materials (hereinafter defined)
(collectively "Regulations"). Tenant shall at its sole cost and
expense obtain any and all licenses or permits necessary for
Tenant's use of the Premises. Tenant shall at its sole cost and expense promptly
comply with the requirements of any board of fire underwriters or other similar
body now or hereafter constituted. Tenant shall not do or permit anything to be
done in, on, under or about the Project or bring or keep anything which will in
any way increase the rate of any insurance upon the Premises, Building or
Project or upon any contents therein or cause a cancellation of said insurance
or otherwise affect said insurance in any manner. Tenant shall indemnify, defend
(by counsel reasonably acceptable to Landlord), protect and hold Landlord
harmless from and against any loss, cost, expense, damage,
attorneys' fees or liability arising out of the failure of Tenant to comply with
any Regulation. Tenant's obligations pursuant to the foregoing
indemnity shall survive the expiration or earlier termination of this Lease.
D. HAZARDOUS MATERIALS. As used in this Lease, "Hazardous
Materials shall include, but not be limited to, hazardous, toxic and
radioactive materials and those substances defined as "hazardous
substances, "hazardous materials," "hazardous
wastes," "toxic substances," or other similar designations in
any Regulation, but shall not include any common household or restroom products
or cleaning substances which are used in accordance with all applicable
Regulations. Tenant shall not cause, or allow any of Tenant's
Parties to cause, any Hazardous Materials to be handled, used, generated,
stored, released or disposed of in, on, under or about the Premises, the
Building or the Project or surrounding land or environment in violation of any
Regulations.
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Tenant must obtain Landlord's written consent prior to the introduction of any
Hazardous Materials onto the Project. Notwithstanding the foregoing, Tenant may
handle, store, use and dispose of products containing small quantities of
Hazardous Materials for "general office purposes" (such as toner for copiers) to
the extent customary and necessary for the Permitted Use of the Premises;
provided that Tenant shall always handle, store, use, and dispose of any such
Hazardous Materials in a safe and lawful manner and never allow such Hazardous
Materials to contaminate the Premises, Building, or Project or surrounding land
or environment. Tenant shall immediately notify Landlord in writing of any
Hazardous Materials' contamination of any portion of the Project of which Tenant
becomes aware, whether or not caused by Tenant. Landlord shall have the right at
all reasonable times to inspect the Premises and to conduct tests and
investigations to determine whether Tenant is in compliance with the foregoing
provisions, and provided Landlord has a reasonable belief that Hazardous
Materials have been released in the Premises, the costs of all such inspections,
tests and investigations will be borne by Tenant. Tenant shall indemnify, defend
(by counsel reasonably acceptable to Landlord), protect and hold Landlord
harmless from and against any and all claims, liabilities, losses, costs, loss
of rents, liens, damages, injuries or expenses (including attorneys' and
consultants' fees and court costs), demands, causes of action, or judgments
resulting from the use, generation, storage, release, or disposal of Hazardous
Materials by Tenant or any of Tenant's Parties in, on, under or about the
Premises, the Building or the Project or surrounding land or environment, which
indemnity shall include, without limitation, damages for personal or bodily
injury, property damage, damage to the environment or natural resources
occurring on or off the Premises, losses attributable to diminution in value or
adverse effects on marketability, the cost of any investigation, monitoring,
government oversight, repair, removal, remediation, restoration, abatement, and
disposal, and the preparation of any closure or other required plans, whether
such action is required or necessary prior to or following the expiration or
earlier termination of this Lease. Neither the consent by Landlord to the use,
generation, storage, release or disposal of Hazardous Materials nor the strict
compliance by Tenant with all laws pertaining to Hazardous Materials shall
excuse Tenant from Tenant's obligation of indemnification pursuant to this
Paragraph 4.D. Tenant's obligations pursuant to the foregoing indemnity shall
survive the expiration or earlier termination of this Lease.
E. Without limiting the generality of the foregoing. Tenant, at its sole
cost and expense, covenants to conduct its business operations from the Premises
strictly in accordance with all city, county, state and federal laws, rules,
regulations and ordinances to the extent same presently exist or may exist in
the future, including but not limited to, (i) compliance with any and all
Occupational Safety and Health Administration ("OSHA") guidelines, rules and
standards, and (ii) ensuring that all waste products generated or present within
the Premises are appropriately handled, disposed of and/or transported in strict
accordance with such laws, regulations, ordinances, standards and practices.
Tenant shall use only biological waste ("Biological Waste") disposal methods and
procedures which fully comply with all of such laws, regulations, ordinances,
standards and practices. Tenant shall engage or employ only such services which
are duly licensed, permitted or otherwise authorized by any agency, of any city,
state or federal government which may govern the handling, disposal or
transportation for disposal of such Biological Waste. Tenant shall develop and
maintain written policies and procedures which shall be given and adhered to any
all of Tenant's employee, agents, representatives, and/or independent
contractors involved in the handling and disposal of such Biological Waste.
5. RULES AND REGULATIONS
Tenant shall faithfully observe and comply with the building rules and
regulations attached hereto as Exhibit A and any other rules and regulations and
any modifications or additions thereto which Landlord may from time to time
prescribe in writing for the purpose of maintaining the proper care,
cleanliness, safety, traffic flow and general order of the Premises or the
Building or Project as long as: (1) such rules and regulations do not require
the payment of additional rent without Tenant's consent and the provision of an
additional or specialized service to tenants; (2) no amendment or addition is
binding on Tenant until Tenant has received notice thereof and no amendment or
addition applies retroactively; and (3) the rules and regulations do not
conflict with or take precedence over the Terms of this Lease. Tenant shall
cause Tenant's Parties to comply with such rules and regulations. If Landlord
acts reasonably and in good faith in enforcing the rules and regulations, then
Landlord shall not be responsible to Tenant for the non-compliance by any other
tenant or occupant of the Building or Project with any of such rules and
regulations, any other tenant's or occupant's lease or any Regulations.
6. RENT
A. Base Rent. Tenant shall pay to Landlord and Landlord shall receive,
without notice or demand throughout the Term, Base Rent as specified in the
Basic Lease Information, payable in monthly installments in advance on or before
the first day of each calendar month, in lawful money of the United States,
without deduction or offset except as set forth in Sections 7(A)(1)(a) and 19),
at the Remittance Address specified in the Basic Lease Information or to such
other place as Landlord may from time to time designate in writing. Base Rent
for the first full month of the Term shall be paid by Tenant upon Tenant's
execution of this Lease. If the obligation for payment of Base Rent commences on
a day other than the first day of a month, then Base Rent shall be prorated and
the prorated installment shall be paid on the first day of the calendar month
next succeeding the Term Commencement Date. The Base Rent payable by Tenant
hereunder is subject to adjustment as provided elsewhere in this Lease, as
applicable. As used herein, the term "Base Rent" shall mean the Base Rent
specified in the Basic Lease Information as it may be so adjusted from time to
time.
B. Additional Rent. All monies other than Base Rent required to be paid by
Tenant hereunder, including, but not limited to, Tenant's Proportionate Share of
the Building of Operating Expenses, as specified in Paragraph 7 of this Lease,
charges to be paid by Tenant under Paragraph 15, the interest and late charge
described in Paragraphs 26.C. and D., and any monies spent by Landlord pursuant
to Paragraph 30, shall be considered additional rent ("Additional Rent"). "Rent"
shall mean Base Rent and Additional Rent.
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7. OPERATING EXPENSES
A. OPERATING EXPENSES. In addition to the Base Rent required to be paid
hereunder, Tenant shall pay as Additional Rent, Tenant's Proportionate Share of
the Building, as defined in the Basic Lease Information, of Operating Expenses
(defined below) in the manner set forth below. Tenant shall pay the applicable
Tenant's Proportionate Share of each such Operating Expenses, provided that
Controllable Expenses (defined below for each calendar year during the initial
Term shall not exceed 106% of Controllable Expenses for the immediately
preceding calendar year (calculated on a cumulative and compounded basis).
Landlord and Tenant acknowledge that if the number of buildings which constitute
the Project increases or decreases, or if physical changes are made to the
Premises, or Building or the configuration of any thereof, Landlord may at its
discretion reasonably adjust Tenant's Proportionate Share of the Building to
reflect the change. Landlord's determination of Tenant's Proportionate Share of
the Building shall be conclusive so long as it is reasonably and consistently
applied. "Operating Expenses" shall mean all expenses and costs, and only those
expenses and costs, of every kind and nature which Landlord shall pay or become
obligated to pay, because of or in connection with the ownership, management,
maintenance, repair, preservation, replacement and operation of the Building and
its supporting facilities and such additional facilities now and in subsequent
years as may be determined by Landlord to be necessary or desirable to the
Building (as determined in a reasonable manner) other than those expenses and
costs which are specifically attributable to Tenant or which are expressly made
the financial responsibility of Landlord or specific tenants of the Building
pursuant to this Lease, or (without limitation) those expenses attributable to
Landlord's capital expenses (except to the extent expressly included as an
Operating Expense hereunder), reimbursable expenses, expenses related to the
business of operating Landlord (as opposed to the operation of the Project), or
costs associated with financing or leasing the Project. Operating Expenses shall
include, but are not limited to, the Building's Proportionate Share (defined
below) of the Project Expenses (defined below) and the following:
(1) TAXES. All real property taxes and assessments, possessory
interest taxes, sales taxes, personal property taxes, business or
license taxes or fees, gross receipts taxes, service payments in lieu
of such taxes or fees, annual or periodic license or use fees, excises,
transit charges, and other impositions, general and special, ordinary
and extraordinary, unforeseen as well as foreseen, of any kind
(including fees "in-lieu" of any such tax or assessment) which are now
or hereafter assessed, levied, charged, confirmed, or imposed by any
public authority upon the Building, its operations or the Rent (or any
portion or component thereof), excluding any income taxes, or any tax,
assessment or fee imposed in substitution, partially or totally, of any
of the above. Operating Expenses shall also include any taxes,
assessments, reassessments, or other fees or impositions with respect
to the development, leasing, management, maintenance, alteration,
repair, use or occupancy of the Premises, or Building or any portion
thereof, including, without limitation, by or for Tenant, and all
increases therein or reassessments thereof whether the increases or
reassessments result from increased rate and/or valuation (whether upon
a transfer of the Building or any portion thereof or any interest
therein or for any other reason). Operating Expenses shall not include
inheritance or estate taxes imposed upon or assessed against the
interest of any person in the Project, or taxes computed upon the basis
of the net income of any owners of any interest in the Project. If it
shall not be lawful for Tenant to reimburse Landlord for all or any
part of such taxes, the monthly rental payable to Landlord under this
Lease shall be revised to net Landlord the same net rental after
imposition of any such taxes by Landlord as would have been payable to
Landlord prior to the payment of any such taxes.
(a) Proposition 13 Protection. Despite any other
provision of this Lease, if during the initial Term, any sale,
refinancing, or change in ownership of the Building is
consummated and, as a result, all or part of the Building is
reassessed (Reassessment) for real estate tax purposes by the
appropriate government authority under the terms of
Proposition 13 (as adopted by the voters of the State of
California in the June 1978 election), the terms of this
Paragraph 7(A)(l)(a) shall apply.
1. For purposes of this Paragraph 7(A)(l)(a), the term "Tax
Increase" shall mean the product of (i) that portion of the Taxes, as calculated
immediately following the Reassessment, that is attributable solely to the
Reassessment, multiplied by the Prop. 13 Percentage Protection (defined below).
The term "Prop. 13 Percentage Protection" shall mean (I)) with respect to a
Reassessment which occurs during the first 24 months of the Term, 100%. (II)
with respect to a Reassessment which occurs during months 25-48 of the Term,
75%. (III) with respect to a Reassessment which occurs during months 49-72 of
the Term, 50%. (IV) with respect to a Reassessment which occurs during months
73-96 of the Term, 25% and (V) with respect to a Reassessment which occurs
during months 97-120, 0%. Accordingly, the Tax Increase shall not include any
portion of the Taxes, as calculated immediately following the Reassessment, that
is:
(1) Attributable to the initial assessment of the value
of the Building, the base, shell and core of the Building, or
the tenant improvements located in the Building;
(2) Attributable to assessments pending immediately
before the Reassessment that were conducted during, and
included in, that Reassessment or that were otherwise rendered
unnecessary following the Reassessment; or
(3) Attributable to the annual inflationary increase in
real estate taxes.
II. During the initial Term, Tenant shall not be obligated to pay
the Tax Increase relating to a Reassessment occurring during the initial Term.
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III. The amount of Taxes that Tenant is not obligated to pay or
shall not be obligated to pay during the Term in connection with a particular
Reassessment under the terms of this Paragraph 7(A)(1)(a) shall be referred to
as the "Proposition 13 Protection Amount." If a Reassessment is reasonably
foreseeable by Landlord and the Proposition 13 Protection Amount attributable to
that Reassessment may be reasonably quantified or estimated for each Lease Year
beginning with the Lease Year in which the Reassessment will occur, the terms of
this Paragraph 7(A)(1)(a) shall apply to each such Reassessment. On notice to
Tenant, Landlord shall have the right to purchase the Proposition 13 Protection
Amount relating to the applicable Reassesment (Applicable Reassessment), at any
time during the Term, by paying to Tenant an amount equal to the Proposition 13
Purchase Price, as defined below, as long as the right of any successor of
Landlord to exercise its right to purchase the Proposition 13 Protection Amount
shall not apply to any Reassessment that results from the event under which that
successor became Landlord under this Lease. As used in this Lease, the term
"Proposition 13 Purchase Price" shall mean the present value of the Proposition
13 Protection Amount remaining during the Term, as of the date of payment of the
Proposition 13 Purchase Price by Landlord. The present value shall be calculated
by:
(1) Using the portion of the Proposition 13 Protection
Amount attributable to each remaining Lease Year assuming no
additional Tax Increases (as though the portion of that
Proposition 13 Protection Amount benefited Tenant at the end
of each Lease Year) as the amounts to be discounted; and
(2) Using discount rates for each amount to be discounted
equal to:
(A) The average rates of yield for United States
Treasury Obligations with maturity dates as close as
reasonably possible to the end of each Lease Year
during which the portions of the Proposition 13
Protection Amount would have benefited Tenant, using
the rates in effect as of Landlord's exercise of its
right to purchase, as set forth in this Paragraph
7(A)(1)(a);plus
(B) two percent (2%) per annum.
On payment to Tenant of the Proposition 13 Purchase Price,
subparagraph (II) of this Paragraph 7(A)(1)(a) shall not apply
to any Taxes attributable to the Applicable Reassessment.
Because Landlord is estimating the Proposition 13 Purchase
Price because a Reassessment has not yet occurred, an
adjustment shall be made when a Reassessment occurs. If
Landlord has underestimated the Proposition 13 Purchase Price,
Landlord shall, on notice to Tenant, credit Tenant's Rent next
due with the amount of that underestimation. If Landlord has
overestimated the Proposition 13 Purchase Price, Landlord
shall, on notice to Tenant, increase Tenant's Rent next due by
the amount of the overestimation. Landlord will supply to
Tenant documentation supporting the basis for its conclusion
about any such underestimation or overestimation.
(2) INSURANCE. All insurance premiums and costs, including, but
not limited to, any deductible amounts, premiums and other costs of
insurance incurred by Landlord related to the Building, including for
the insurance coverage set forth in Paragraph 8.A. herein.
(3) COMMON AREA MAINTENANCE.
(a) Repairs, replacements, and general maintenance of and
for the Building and public and common areas
and facilities of and comprising the Building
including, but not limited to, the roof and roof membrane,
windows, elevators, restrooms, conference rooms, health club
facilities, lobbies, mezzanines, balconies, mechanical rooms,
building exteriors, alarm systems, pest extermination,
landscaped areas, parking and service areas, driveways,
sidewalks, loading areas, fire sprinkler systems, sanitary and
storm sewer lines, utility services, heating/ventilation/air
conditioning systems, electrical, mechanical or other systems,
telephone equipment and wiring servicing, plumbing, lighting,
and any other items or areas which affect the operation or
appearance of the Building, which determination
shall be at Landlord's discretion, except
for: those items expressly made the financial responsibility
of Landlord pursuant to Paragraph 10 hereof; those items to
the extent paid for by the proceeds of insurance; those items
paid for or reimbursed by Tenant, and those items attributable
solely or jointly to specific tenants of the Building
(b) Repairs, replacements, and general maintenance shall
include the cost of any capital improvements made to or
capital assets acquired for the Building, only
to the extent that such improvements reduce any other
Operating Expenses, including present or future repair work,
are reasonably necessary for the health and safety of the
occupants of the Building, or are required to
comply with any Regulation, such costs or allocable portions
thereof to be amortized over such reasonable period as
Landlord shall determine, together with interest on the
unamortized balance at the publicly announced
"prime rate" charged by Wells Fargo Bank, N.A. (San Francisco)
or its successor at the time such improvements or capital
assets are constructed or acquired, plus two (2) percentage
points, or in the absence of such prime rate, then at the U.S.
Treasury six-month market note (or bond, if so designated)
rate as published by any national financial publication
selected by Landlord, plus four (4) percentage points, but in
no event more than the maximum rate permitted by law, plus
reasonable financing charges.
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(c) Payment under or for any easement, license, permit,
operating agreement, declaration, restrictive covenant or
instrument relating to the Building.
(d) All expenses and rental related to services and costs
of supplies, materials and equipment used in operating,
managing and maintaining the Premises, and the Building, the
equipment therein and the adjacent sidewalks, driveways,
parking and service areas, including, without limitation,
expenses related to service agreements regarding security,
fire and other alarm systems, janitorial services, window
cleaning, elevator maintenance, Building exterior maintenance,
landscaping and expenses related to the administration,
management and operation of the Building, including without
limitation salaries, wages and benefits and management office
rent, except to the extent that those costs and expenses are
included in the management fees described in Section 7F below,
and expressly excluding costs associated with Landlord's
business or corporate overhead expenses (including partnership
or corporate accounting and legal matters) as distinguished
from the cost of Building operations.
(e) The cost of supplying any services and utilities
which benefit all or a portion of the Premises, or Building,
including without limitation services and utilities provided
pursuant to Paragraph 15 hereof.
(f) Legal expenses and the cost of audits by certified
public accountants; provided, however, that legal expenses
chargeable as Operating Expenses shall not include the cost of
negotiating leases, collecting rents, evicting tenants nor
shall it include costs incurred in legal proceedings with or
against any tenant or to enforce the provisions of any lease.
If the rentable area of the Building and/or Project is
not fully occupied during any fiscal year of the Term as determined by
Landlord, an adjustment may be made in Landlord's
discretion in computing the variable component (which is affected by
variations in occupancy levels) of Operating Expenses for such year so
that Tenant pays an equitable portion of all variable items (e.g.,
utilities, janitorial services and other component expenses that are
affected by variations in occupancy levels) of Operating Expenses, as
reasonably determined by Landlord; provided, however, that in no event
shall Landlord be entitled to collect in excess of one hundred percent
(100%) of the total Operating Expenses from all of the tenants in the
Building or Project, as the case may be.
In addition to any other exclusions specifically provided herein,
Operating Expenses shall not include the cost of providing tenant
improvements or other specific costs incurred for the account of,
separately billed to and paid by specific tenants of the Building or
Project, the initial construction cost of the Building, or debt service
on any mortgage or deed of trust recorded with respect to the Project
other than pursuant to Paragraph 7.A.(3)(b) above. Notwithstanding
anything to the contrary contained in this Lease, Operating Expenses
shall not include any of the following:
(i) Costs incurred in connection with the original
construction of the Building or in connection with any major change in
the Building, such as adding or deleting floors to any buildings or
construction of new buildings;
(ii) Costs of alterations or improvements to the Premises
or the premises of other tenants;
(iii) Interest and principal payments on mortgages, and
other debt costs, if any;
(iv) Costs of correcting detects in or inadequacy of the
initial design or construction of the Building or any part thereof;
(v) Legal fees, space planners' fees real estate brokers'
leasing commissions, and advertising expenses incurred in connection
with the development or leasing of the Building or any part thereof;
(vi) Costs reimbursable (other than an operating expense)
by any tenant or occupant of the Building or by insurance by its
carrier or any tenant's carrier or by anyone else;
(vii) Any bad debt loss, rent loss, or reserves for bad
debts or rent loss;
(viii) Costs associated with the operation the business of
the partnership or entity which constitutes the Landlord, as the same
are distinguished from the costs of operation of the building,
including partnership accounting and legal matters, costs of defending
any lawsuits with any mortgagee, costs of selling, syndicating,
financing, mortgaging or hypothecating any of Landlord's interest in
the Building, costs (including attorneys' fees and costs of settlement
judgments and payments in lieu thereof) arising from claims, disputes
or potential dispute in connection with potential or actual claims,
litigation or arbitration pertaining to Landlord and/ or the Building
and/or the site upon which the Building is situated;
(ix) The wages and benefits of any employee who does not
devote substantially all of his or her time to the Building unless such
wages and benefits are prorated to reflect time spent on operating and
managing the Building vis-a-vis time spent on matters unrelated to
operating and managing the Building;
(x) Amounts paid as ground rental by Landlord;
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(xi) Earthquake and flood insurance, unless the cost of
such insurance is included in Operating Expenses for the Base Year;
(xii) Wages and fees incurred in connection with the
ownership, management and operation of the parking areas (except to the
extent parking expenses exceed parking revenues);
(xiii) Capital expenditures to comply with applicable laws,
to the extent arising from the presence of Hazardous Materials in or
about the Building, or the site upon which the Building, is situated,
including, without limitation, Hazardous Materials in the ground water
or soil;
(xiv) Costs, including permit, license and inspection
costs incurred with respect to the installation of tenant improvements
made for new tenants in the Building or incurred in renovating or
otherwise improving, decorating, painting or redecorating vacant space
for tenants or other occupants of the Building;
(xv) Overhead and profit increment paid to Landlord or to
subsidiaries or affiliates of Landlord for services in the Building to
the extent the same exceeds the cost of such services rendered by
unaffiliated third parties on a competitive basis;
(xvi) Any compensation paid to clerks, attendants or other
persons in commercial concessions operated by Landlord or in the
parking areas servicing the Building;
(xvii) Rentals and other related expenses incurred in
leasing air conditioning systems, elevators or other equipment
ordinarily considered to be of a capital nature if purchased, except(i)
equipment not affixed to the Building which is used in providing
janitorial or similar services, and (ii) capital expenditures which are
otherwise included in Operating Expenses.
(xviii) All items and services for which Tenant or any other
tenant in the Building reimburses Landlord or which Landlord provides
selectively to one or more tenants (and without offering to Tenant)
without reimbursement;
(xix) Electric power costs for which any tenant directly
contracts with the local public service company;
(xx) Costs arising from Landlord's political or charitable
contributions;
(xxi) Costs arising from latent detects in the Building or
improvements installed by Landlord or its repair thereof;
(xxii) Costs, other than those incurred in ordinary
maintenance, for sculpture, paintings or other objects of art;
(xxiii) Tax penalties incurred as a result of Landlord's
negligence, inability or unwillingness to make payments when due;
(xxiv) Non-cash expenses (i.e. depreciation and
obsolescence);
(xxv) Costs arising from the negligence or fault of
Landlord or its agents, or any vendors, contractors, or providers of
materials or services selected, hired or engaged by Landlord or its
agents including, without limitation, the selection of building
materials;
(xxvi) Landlord's general overhead and administrative
expenses; and
(xxvii) Costs incurred by Landlord due to the violation by
Landlord or any tenant of the terms and conditions of any lease of
space in the Building.
The above enumeration of services and facilities shall not be deemed to
impose an obligation on Landlord to make available or provide such
services or facilities except to the extent if any that Landlord has
specifically agreed elsewhere in this Lease to make the same available
or provide the same. Without limiting the generality of the foregoing,
Tenant acknowledges and agrees that it shall be responsible for
providing adequate security for its use of the Premises, the Building
and the Project and that Landlord shall have no obligation or liability
with respect thereto, except to the extent if any that Landlord has
specifically agreed elsewhere in this I ease to provide the same.
As used herein, the term "Controllable Expenses" shall mean all
Operating Expenses other than (a) Taxes, (b) the cost of all charges
for electricity, gas, water and other utilities furnished to the
Building, including any taxes thereon, (c) the cost of all charges for
fire and extended coverage, liability and all other insurance for the
Building carried by Landlord, (d) costs incurred in connection with
upgrading the Premises to comply with disability, life, seismic, fire
and safety codes, ordinances, statutes, or other laws which become
effective on or after the Term Commencement Date, and (e) those
services which support or specifically relate to Tenant's specialized
clean room and/or laboratory/research use in the Premises.
B. PAYMENT OF ESTIMATED OPERATING EXPENSES.
"Estimated Operating Expenses" for any particular year shall mean
Landlord's estimate of the Operating Expenses for the
Building for such fiscal year made with respect to such fiscal year as
hereinafter provided. Landlord shall have the right from time to time
to revise its fiscal year
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and interim accounting periods so long as the periods as so revised are
reconciled with prior periods in a reasonable manner. During the last
month of each fiscal year during the Term, or as soon thereafter as
practicable, Landlord shall give Tenant written notice of the Estimated
Operating Expenses for the ensuing fiscal year. Tenant shall pay
Tenant's Proportionate Share of the Estimated Operating Expenses with
installments of Base Rent for the fiscal year to which the Estimated
Operating Expenses applies in monthly installments on the first day of
each calendar month during such year, in advance. Such payment shall be
construed to be Additional Rent for all purposes hereunder. Subject to
the limitations on increases to Additional Rent set forth in this
Section 7 and elsewhere in this Lease, if at any time during the course
of the fiscal year, Landlord determines that Operating Expenses are
projected to vary from the then Estimated Operating Expenses by more
than five percent (5%), Landlord may, by written notice to Tenant,
revise the Estimated Operating Expenses for the balance of such fiscal
year, and Tenant's monthly installments for the remainder of such year
shall be adjusted so that by the end of such fiscal year Tenant has
paid to Landlord Tenant's Proportionate Share of the revised Estimated
Operating Expenses for such year, such revised installment amounts to
be Additional Rent for all purposes hereunder.
C. COMPUTATION OF OPERATING EXPENSE ADJUSTMENT. "Operating
Expense Adjustment" shall mean the difference between Estimated
Operating Expenses and actual Operating Expenses for any fiscal year
determined as hereinafter provided. Within one hundred twenty (120)
days after the end of each fiscal year, or as soon thereafter as
practicable, Landlord shall deliver to Tenant a statement of actual
Operating Expenses for the fiscal year just ended, accompanied by a
computation of Operating Expense Adjustment. If such statement shows
that Tenant's payment based upon Estimated Operating Expenses is less
than Tenant's Proportionate Share of Operating Expenses, then Tenant
shall pay to Landlord the difference within twenty (20) days after
receipt of such statement, such payment to constitute Additional Rent
for all purposes hereunder. If such statement shows that Tenant's
payments of Estimated Operating Expenses exceed Tenant's Proportionate
Share of Operating Expenses, then (provided that Tenant is not in
default under this Lease) Landlord shall pay to Tenant the difference
within twenty (20) days after delivery of such statement to Tenant. If
this Lease has been terminated or the Term hereof has expired prior to
the date of such statement, then the Operating Expense Adjustment shall
be paid by the appropriate party within twenty (20) days after the date
of delivery of the statement. Should this Lease commence or terminate
at any time other than the first day of the fiscal year, Tenant's
Proportionate Share of the Operating Expense Adjustment shall be
prorated based on a month of 30 days and the number of calendar months
during such fiscal year that this Lease is in effect. Notwithstanding
anything to the contrary contained in Paragraph 7.A or 7.B, Landlord's
failure to provide any notices or statements within the time periods
specified in those paragraphs shall in no way excuse Tenant from its
obligation to pay Tenant's Proportionate Share of Operating Expenses,
but Tenant shall not be obligated to pay its Proportionate Share until
such notices or statements are delivered.
D. NET LEASE. This shall be a triple net Lease and Base Rent shall be
paid to Landlord absolutely net of all costs and expenses allocated to
Tenant, except as specifically provided to the contrary in this Lease.
The provisions for payment of Operating Expenses and the Operating
Expense Adjustment are intended to pass on to Tenant and reimburse
Landlord for all costs and expenses of the nature described in
Paragraph 7.A. incurred in connection with the ownership, management,
maintenance, repair, preservation, replacement and operation of the
Building and its supporting facilities and such additional facilities,
now and in subsequent years as may be determined by Landlord to be
necessary or desirable to the Building.
E. TENANT AUDIT. Tenant or its authorized representatives may not later
than ninety (90) days following receipt of a statement and upon the
condition that Tenant shall first deposit with Landlord the full amount
in dispute, cause Landlord's books and records with respect to
Operating Expenses for such fiscal year to be audited, inspected,
examined or copied by independent certified public accountants selected
by Tenant. The Operating Expense Adjustment shall be appropriately
adjusted on the basis of such audit. If such audit discloses a
liability for a refund in excess of five percent(5%) of Tenant's
Proportionate Share of the Operating Expenses previously reported, the
cost of such audit shall be borne by Landlord; otherwise the cost of
such audit shall be paid by Tenant. If Tenant shall not request an
audit in accordance with the provisions of this Paragraph 7.E. within
ninety (90) days after receipt of Landlord's statement provided
pursuant to Paragraph 7.B. or 7.C., such statement shall be final and
binding for all purposes hereof unless Landlord submits a corrected
statement.
F. PROJECT EXPENSES. The term "Project Expenses" shall mean all
costs and expenses incurred by Landlord in connection with the
maintenance, operation, replacement, ownership and repair of the
Project, but only to the extent such costs and expenditures are not
directly and separately identifiable through the operation and
maintenance of the Building or the Other Buildings (defined below)
Project Expenses shall include, without limitation, (i) property taxes
and assessments due and owing with respect to the Project (to the
extent the Building is not located on a parcel which is separately
assessed for tax purposes), (ii) a management and accounting cost to
recovery fee, provided such fee does not exceed five (5%) percent of
the sum of the Project's base rents and Operating Expenses (other than
such management and accounting fee), (iii) costs related to the
administration, management and operation of the Project (i.e. salaries,
wages and benefits and management office rent), and (iv) all costs for
the repair/replacement and maintenance of common area
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walks, landscaped areas, other common areas, security and the parking
facilities of the Project. The term "Building's Proportionate Share"
shall mean the proportionate share of the Project Expenses which is
Allocable to the building (which proportionate share may differ with
respect to a particular expense item) as determined by Landlord. In its
reasonable discretion, based upon a variety of factors, including
without limitation, the rentable square footage of the Building
compared to the rentable square footage of all of the buildings in the
Project and the extent to which particular Project Expenses affect or
relate to the Building. The term "Other Buildings" shall mean the
industrial buildings located at 4501 and 4505 Glencoe Avenue, Marina
Del Rey, California and the office building located at 13160 Mindanao
Way, Marina Del Rey California.
8. INSURANCE AND INDEMNIFICATION
A. LANDLORD'S INSURANCE. All insurance maintained
by Landlord shall be for the sole benefit of Landlord and under
Landlord's sole control.
(1) PROPERTY INSURANCE. Landlord agrees to maintain
property insurance insuring the Building against damage or
destruction due to risk including fire, vandalism, and
malicious mischief in an amount not less than the replacement
cost thereof, in the form and with deductibles and
endorsements as selected by Landlord. At its election,
Landlord may instead (but shall have no obligation to) obtain
"All Risk" coverage, and may also obtain earthquake,
pollution, and/or flood insurance in amounts selected by
Landlord.
(2) OPTIONAL INSURANCE. Landlord, at
Landlord's option, may also (but shall have no obligation to)
carry insurance against loss of rent, in an amount equal to
the amount of Base Rent and Additional Rent that Landlord
could be required to abate to all Building tenants in the
event of condemnation or casualty damage for a period of
twelve (12) months. Landlord may also (but shall have no
obligation to) carry such other insurance as Landlord may deem
prudent or advisable, including, without limitation, liability
insurance in such amounts and on such terms as Landlord shall
determine. Landlord shall not be obligated to insure, and
shall have no responsibility whatsoever for any damage to, any
furniture, machinery, goods, inventory or supplies, or other
personal property or fixtures which Tenant may keep or
maintain in the Premises, or any leasehold improvements,
additions or alterations within the Premises.
B. TENANT'S INSURANCE
(1) PROPERTY INSURANCE. Tenant shall procure at
Tenant's sole cost and expense and keep in effect from
the date of this Lease and at all times until the end of the
Term, insurance on all personal property and fixtures of
Tenant and all improvements, additions or alterations made by
or for Tenant to the Premises on an "All Risk"
basis, insuring such property for the full replacement value
of such property.
(2) LIABILITY INSURANCE. Tenant shall procure at Tenant's
sole cost and expense and keep in effect from the date of this
Lease and at all times until the end of the Term Commercial
General Liability insurance covering bodily injury and
property damage liability occurring in or about the Premises
or arising out of the use and occupancy of the Premises and
the Project, and any part of either, and any areas adjacent
thereto, and the business operated by Tenant or by any other
occupant of the Premises. Such insurance shall include
contractual liability insurance coverage insuring all of
Tenant's indemnity obligations under this Lease. Such coverage
shall have a minimum combined single limit of liability of at
least Two Million Dollars ($2,000,000.00), and a minimum
general aggregate limit of Three Million Dollars
($3,000,000.00), with an "Additional Insured - Managers or
Landlords of Premises Endorsement." All such policies shall be
written to apply to all bodily injury (including death),
property damage or loss, personal and advertising injury and
other covered loss, however occasioned, occurring during the
policy term, shall be endorsed to add Landlord and any party
holding an interest to which this Lease may be subordinated as
an additional insured, and shall provide that such coverage
shall be "primary" and non-contributing with any insurance
maintained by Landlord, which shall be excess insurance only.
Such coverage shall also contain endorsements including
employees as additional insureds if not covered by Tenant's
Commercial General Liability Insurance. All such insurance
shall provide for the severability of interests of insureds;
and shall be written on an "OCCURRENCE" basis, which shall
afford coverage for all claims based on acts, omissions,
injury and damage, which occurred or arose (or the onset of
which occurred or arose) in whole or in part during the policy
period.
(3) WORKERS' COMPENSATION AND
EMPLOYERS' LIABILITY INSURANCE. Tenant shall carry
Workers' Compensation Insurance as required by any Regulation,
throughout the Term at Tenant's sole cost and
expense. Tenant shall also carry Employers'
Liability Insurance in amounts not less than One Million
Dollars ($1,000,000) each accident for bodily injury by
accident; One Million Dollars ($1,000,000) policy limit for
bodily injury by disease; and One Million Dollars ($1,000,000)
each employee for bodily injury by disease, throughout the
Term at Tenant's sole cost and expense.
(4) GENERAL INSURANCE REQUIREMENTS. All coverages
described in this Paragraph 8.B. shall be endorsed to (i)
provide Landlord with thirty (30) days' notice
of cancellation or change in terms; and (ii) waive all rights
of subrogation by the insurance carrier against Landlord. If
at any time during the Term the amount or coverage of
insurance which Tenant is required to carry under this
Paragraph 8.B. is, in Landlord's reasonable
judgment, materially less than the amount or type of insurance
coverage typically carried by owners or tenants of properties
located in the general area in which the Premises are located
which are similar to and operated for similar purposes as the
Premises or if Tenant's use of the Premises
should change with or without Landlord's
consent, Landlord shall have the right to require Tenant to
increase the amount or
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change the types of insurance coverage required under this
Paragraph 8.B. All insurance policies required to be carried
by Tenant under this Lease shall be written by companies rated
A X or better in "Best's Insurance Guide" and
authorized to do business in the State of California. In any
event deductible amounts under all insurance policies required
to be carried by Tenant under this Lease shall not exceed Five
Thousand Dollars ($5,000.00) per occurrence. Tenant shall
deliver to Landlord on or before the Term Commencement Date,
and thereafter at least thirty (30) days before the expiration
dates of the expired policies, certified copies of
Tenant's insurance policies, or a certificate evidencing
the same issued by the insurer thereunder; and, if Tenant
shall fail to procure such insurance, or to deliver such
policies or certificates, Landlord may, at
Landlord's option and in addition to Landlord's
other remedies in the event of a default by Tenant hereunder,
procure the same for the account of Tenant, and the cost
thereof shall be paid to Landlord as Additional Rent.
C. INDEMNIFICATION. Tenant shall indemnify, defend by counsel
reasonably acceptable to Landlord, protect and hold Landlord harmless
from and against any and all claims, liabilities, losses, costs, liens,
damages, injuries or expenses, including reasonable attorneys' and
consultants' fees and court costs, demands, causes of action, or
judgments, directly or indirectly arising, out of or related to: (1)
claims of injury to or death of persons or damage to property occurring
or resulting directly or indirectly from the use or occupancy of the
Premises, Building or Project by Tenant or, Tenant's Parties, or from
activities or failures to act of Tenant or Tenant's Parties (including,
without limitation, claims relating to or arising out of the
construction of the Tenant Improvements); (2) claims arising from work
or labor performed, or for materials or supplies furnished to or at the
request or for the account of Tenant in connection with performance of
any work done for the account of Tenant within the Premises or Project,
except to the extent such work is performed or meterials are supplied
by Landlord; (3) claims arising from any breach or default on the part
of Tenant in the performance of any covenant contained in this Lease;
and (4) claims arising from the negligence or intentional acts or
omissions of Tenant or Tenant's Parties. The foregoing indemnity by
Tenant shall not be applicable to claims to the extent caused by or
arising from the negligence or willful misconduct of Landlord. Landlord
shall not be liable to Tenant and Tenant hereby waives all claims
against Landlord for any injury or damage to any person or property in
or about the Premises, Building or Project by or from any cause
whatsoever (other than Landlord's gross negligence or willful
misconduct) and, without limiting the generality of the foregoing,
whether caused by water leakage of any character from the roof, walls,
basement or other portion of the Premises, Building or Project, or
caused by gas, fire, oil or electricity in, on or about the Premises,
Building or Project. The provisions of this Paragraph shall survive the
expiration or earlier termination of this Lease.
9. WAIVER OF SUBROGATION
To the extent permitted by law and without affecting the coverage
provided by insurance to be maintained hereunder or any other rights or
remedies, Landlord and Tenant each waive any right to recover against
the other for: (a) damages for injury to or death of persons; (b)
damages to property, including personal property; (c) damages to the
Premises or any part thereof; and (d) claims arising by reason of the
foregoing due to hazards covered by insurance maintained or required to
be maintained pursuant to this Lease to the extent of proceeds
recovered therefrom, or proceeds which would have been recoverable
therefrom in the case of the failure of any party to maintain any
insurance coverage required to be maintained by such party pursuant to
this Lease. This provision is intended to waive fully, any rights
and/or claims arising by reason of the foregoing, but only to the
extent that any of the foregoing damages and/or claims referred to
above are covered or would be covered, and only to the extent of such
coverage, by insurance actually carried or required to be maintained
pursuant to this Lease by either Landlord or Tenant. This provision is
also intended to waive fully, and for the benefit of each party, any
rights and/or claims which might give rise to a right of subrogation on
any insurance carrier. Subject to all qualifications of this Paragraph
9, Landlord waives its rights as specified in this Paragraph 9 with
respect to any subtenant that it has approved pursuant to Paragraph 21
but only in exchange for the written waiver of such rights to be given
by such subtenant to Landlord upon such subtenant taking possession of
the Premises or a portion thereof. Each party shall cause each
insurance policy obtained by it to provide that the insurance company
waives all right of recovery by way of subrogation against either party
in connection with any damage covered by any policy.
10. LANDLORD'S REPAIRS AND MAINTENANCE
Landlord shall at Landlord's expense (i) repair and maintain in good
order, reasonable wear and tear excepted, all common areas located in
the Building and Project, the structural soundness of the roof,
foundations, and exterior walls of the Premises and Building and all
building systems located outside the Premises, and (ii) repair any
cracked or broken windows in the Premises as of the date hereof. The
term "exterior walls" as used herein shall not include windows, glass
or plate glass, doors, special store fronts or office entries. Any
damage caused by or repairs necessitated by any negligence or act of
Tenant or Tenant's Parties may be repaired by Landlord at Landlord's
option and Tenant's expense. Tenant shall immediately give Landlord
written notice of any defect or need of repairs in such components of
the Building for which Landlord is responsible, after which Landlord
shall have a reasonable opportunity and the right to enter the Premises
at all reasonable times to repair same. Landlord's liability with
respect to any defects, repairs, or maintenance for which Landlord is
responsible under any of the provisions of this Lease shall be limited
to the cost of such repairs or maintenance, and there shall be no
liability of Landlord by reason of any injury to or interference with
Tenant's business arising from the making of repairs, alterations or
improvements in or to any portion of the Premises, the Building or the
Project or to fixtures, appurtenances or equipment in the Building,
except as provided in Paragraph 24. By taking possession of the
Premises, Tenant accepts them "as is," as being in good order,
condition and repair and the condition in which Landlord is obligated
to deliver them and suitable for the Permitted Use and Tenant's
intended operations in the Premises, whether or not any notice of
acceptance is given.
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11. TENANT'S REPAIRS AND MAINTENANCE
Subject to Section 23 and 24, Tenant shall at all times during the Term
at Tenant's expense maintain the non-structural portions of the
Premises and such portions of the Building, including building systems,
as are within the exclusive control of Tenant in a first-class, good,
clean and secure condition and promptly make all necessary repairs and
replacements, as determined by Landlord, with materials and workmanship
of the same character, kind and quality as the original unless such
repairs or replacements are necessary because of Landlord's negligence
or willful misconduct. Notwithstanding anything to the contrary
contained herein, Tenant shall, at its expense, promptly repair any
damage to the Premises or the Building or Project resulting from or
caused by any negligence or act of Tenant or Tenant's Parties.
12. ALTERATIONS
A. During the Term of this Lease, Tenant shall not make, or allow to be
made, any alterations, physical additions, improvements or partitions,
including without limitation the attachment of any fixtures or
equipment, in, about or to the Premises ("Alterations") without
obtaining the prior written consent of Landlord, which consent shall
not be unreasonably withheld with respect to proposed Alterations
which: (a) comply with all applicable Regulations; (b) are, in
Landlord's opinion, compatible with the Building or the Project and its
mechanical, plumbing, electrical, heating/ventilation/air conditioning
systems, and will not cause the Building or Project or such systems to
be required to be modified to comply with any Regulations (including,
without limitation, the Americans With Disabilities Act); and (c) will
not interfere with the use and occupancy of any other portion of the
Building or Project by any other tenant or its invitees. Specifically,
but without limiting the generality of the foregoing, Landlord shall
have the right of written consent for all plans and specifications for
the proposed Alterations, construction means and methods, all
appropriate permits and licenses, any contractor or subcontractor to be
employed on the work of Alterations, and the time for performance of
such work, and may impose rules and regulations for contractors and
subcontractors performing such work. Tenant shall also supply to
Landlord any documents and information reasonably requested by Landlord
in connection with Landlord's consideration of a request for approval
hereunder. Tenant shall cause all Alterations to be accomplished in a
first-class, good and workmanlike manner, and to comply with all
applicable Regulations and Paragraph 27 hereof. Tenant shall at
Tenant's sole expense, perform any additional work required under
applicable Regulations due to the Alterations hereunder. No review or
consent by Landlord of or to any proposed Alteration or additional work
shall constitute a waiver of Tenant's obligations under this Paragraph
12, nor constitute any warranty or representation that the same
complies with all applicable Regulations, for which Tenant shall at all
times be solely responsible. Tenant shall reimburse Landlord for all
costs which Landlord may incur in connection with granting approval to
Tenant for any such Alterations, including any costs or expenses which
Landlord may incur in electing to have outside architects and engineers
review said plans and specifications, in an amount not to exceed one
thousand dollars ($1000.00), and shall pay Landlord an administration
fee of three percent (3%) of the cost of the Alterations as Additional
Rent hereunder. All such Alterations shall remain the property of
Tenant until the expiration or earlier termination of this Lease, at
which time they shall be and become the property of Landlord; provided,
however, that (except with respect to Alterations expressly
contemplated in this Lease, i.e., the Tenant Improvements performed in
accordance with the Improvement Agreement attached hereto as Exhibit
"C") Landlord may, at Landlord's option and upon notice to Tenant in
writing given concurrently with Landlord's approval of any Alterations,
require that Tenant, at Tenant's expense, remove any or all Alterations
made by Tenant as specified by Landlord in such notice (specifically
excluding any improvements which existed in the Premises before Tenant
took possession thereof) and restore the Premises by the expiration or
earlier termination of this Lease, to the condition existing prior to
the construction of any such Alterations. All such removals and
restoration shall be accomplished in a first-class and good and
workmanlike manner so as not to cause any damage to the Premises or
Project whatsoever. If Tenant fails to remove such Alterations or
Tenant's trade fixtures or furniture or other personal property after
receiving a written request from Landlord to do so, Landlord may keep
and use them or remove any of them and cause them to be stored or sold
in accordance with applicable law, at Tenant's sole expense. In
addition to and wholly apart from Tenant's obligation to pay Tenant's
Proportionate Share of Operating Expenses, Tenant shall be responsible
for and shall pay prior to delinquency any taxes or governmental
service fees, possessory interest taxes, fees or charges in lieu of any
such taxes, capital levies, or other charges imposed upon, levied with
respect to or assessed against its fixtures or personal property, on
the value of Alterations within the Premises, and on Tenant's interest
pursuant to this Lease, or any increase in any of the foregoing based
on such Alterations. To the extent that any such taxes are not
separately assessed or billed to Tenant, Tenant shall pay the amount
thereof as invoiced to Tenant by Landlord.
B. In compliance with Paragraph 27 hereof, at least ten (10)
business days before beginning construction of any Alteration during
the Term of this Lease, Tenant shall give Landlord written notice of
the expected commencement date of that construction to permit Landlord
to post and record a notice of non-responsibility. Upon substantial
completion of construction, if the law so provides, Tenant shall cause
a timely notice of completion to be recorded in the office of the
recorder of the county in which the Building is located.
13. SIGNS
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Provided the main entrance in the Premises is located in
the lobby of the Building. Tenant may install or place a sign in or
adjacent to the entrance to the Premises (in said lobby) with a design,
size, and exact location acceptable to Landlord, in its reasonable
discretion. Tenant shall pay all costs associated with such sign,
including removal thereof. In addition, Tenant's name shall be included
in any Building-standard door and directory signage, if any, in
accordance with Landlord's Building signage program, including without
limitation, inclusion in any monument sign installed by Landlord (in
accordance with Paragraph 39E below) detailing the names of tenants,
and payment by Tenant of any fee charged by Landlord for maintaining
such signage, which fee shall constitute Additional Rent hereunder. Any
installation of signs, notices, graphics or banners on or about the
Premises or Project approved by Landlord shall be subject to any
Regulations and to any other requirements imposed by Landlord. Tenant
shall remove all such signs or graphics by the expiration or any
earlier termination of this Lease. Such installations and removals
shall be made in such manner as to avoid injury to or defacement of the
Premises, Building or Project and any other improvements contained
therein, and Tenant shall repair any injury or defacement including
without limitation discoloration caused by such installation or
removal.
14. INSPECTION/POSTING NOTICES
After reasonable notice, except in emergencies where no such notice
shall be required, Landlord and Landlord's agents and representatives,
shall have the right to enter the Premises to inspect the same, to
clean, to perform such work as may be permitted or required hereunder,
to make repairs, improvements or alterations to the Premises, Building
or Project or to other tenant spaces therein, to deal with emergencies,
to post such notices as may be permitted or required by law to prevent
the perfection of liens against Landlord's interest in the Project or
to exhibit the Premises to prospective tenants, purchasers,
encumbrancers or to others, or for any other purpose as Landlord may
deem necessary or desirable; provided, however, that Landlord shall use
commercially reasonable efforts not to interfere with Tenant's business
operations. Tenant shall not be entitled to any abatement of Rent by
reason of the exercise of any such right of entry. Tenant waives any
claim for damages for any injury or inconvenience to or interference
with Tenant's business, any loss of occupancy or quiet enjoyment of the
Premises, and any other loss occasioned thereby. Landlord shall at all
times have and retain a key with which to unlock all of the doors in,
upon and about the Premises, excluding Tenant's vaults and safes or
special security areas (designated in advance), and Landlord shall have
the right to use any and all means which Landlord may deem necessary or
proper to open said doors in an emergency, in order to obtain entry to
any portion of the Premises, and any entry to the Premises or portions
thereof obtained by Landlord by any of said means, or otherwise, shall
not be construed to be a forcible or unlawful entry into, or a detainer
of, the Premises, or an eviction, actual or constructive, of Tenant
from the Premises or any portions thereof. At any time within six (6)
months prior to the expiration of the Term or following any earlier
termination of this Lease or agreement to terminate this Lease,
Landlord shall have the right to erect on the Premises, Building and/or
Project a suitable sign indicating that the Premises are available for
lease.
15. SERVICES AND UTILITIES
A. Provided Tenant shall not be in default hereunder, and subject
to the provisions elsewhere herein contained and to the rules and
regulations of the Building, Landlord shall furnish to the Premises
water for lavatory and drinking purposes and heat and air conditioning
as usually furnished or supplied for use of the Premises for reasonable
and normal office use and reasonable comfort as of the date Tenant
takes possession of the Premises as determined by Landlord (but not
including above-standard or continuous cooling for excessive
heat-generating machines, excess lighting or equipment), and elevator
service, which shall mean service either by nonattended automatic
elevators or elevators with attendants, or both, at the option of
Landlord seven (7) days a week. Tenant acknowledges that Tenant has
inspected and accepts the water, heat and air conditioning and other
utilities and services being supplied or furnished to the Premises as
of the date Tenant takes possession of the Premises, as being
sufficient for use of the Premises for reasonable and normal office use
in their present condition, "as is," and suitable for the Permitted
Use, and for Tenant's intended operations in the Premises. Landlord
shall have no obligation to provide additional or after-hours heating
or air conditioning, but if Landlord elects to provide such services at
Tenant's request, Tenant shall pay to Landlord a reasonable charge for
such services as determined by Landlord. Tenant agrees to keep and
cause to be kept closed all window covering when necessary because of
the sun's position, and Tenant also agrees at all times to cooperate
fully with Landlord and to abide by all of the regulations and
requirements which Landlord may prescribe for the proper functioning
and protection of electrical, heating, ventilating and air conditioning
systems. Wherever heat-generating machines, excess lighting or
equipment are used in the Premises which affect the temperature
otherwise maintained by the air conditioning system, Landlord reserves
the right to install supplementary air conditioning units in the
Premises and the cost thereof, including the cost of installation and
the cost of operation and maintenance thereof, shall be paid by Tenant
to Landlord upon demand by Landlord to the extent such units benefit
the Premises.
B. Tenant shall not without written consent of Landlord use any
apparatus, equipment or device in the Premises, including without
limitation, computers, electronic data processing machines, copying
machines, and other machines, using excess lighting,,
water, or any other resource in excess of or which will in any way
increase the amount of, water, or any other resource
being furnished or supplied for the use of the Premises for reasonable
and normal office use, in each case as of the date Tenant takes
possession of the Premises as determined by Landlord, or which will
require additions or alterations to or interfere with the Building
power distribution systems; nor connect with electric current, except
through existing electrical outlets in the Premises or water pipes, any
apparatus, equipment or device for the purpose of using electrical
current, water, or any other resource. If Tenant shall require water or
any other resource in excess of that being furnished or
supplied for the use of the Premises
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<PAGE>
as of the date Tenant takes possession of the Premises as determined by
Landlord, Tenant shall first procure the written consent of Landlord
which Landlord may refuse, to the use thereof, and Landlord may cause a
special meter to be installed in the Premises so as to measure the
amount of water or other resource consumed for any such
other use. Subject to Section 15D below. Tenant shall pay directly to
Landlord as an addition to and separate from payment of Operating
Expenses the cost of all such additional resources, energy, utility
service and meters (and of installation, maintenance and repair thereof
and of any additional circuits or other equipment necessary to furnish
such additional resources, energy, utility or service). Landlord may
add to the separate or metered charge a recovery of additional expense
incurred in keeping account of the excess water or other
resource so consumed. Landlord shall not be liable for any damages
directly or indirectly resulting from nor shall the Rent
or any monies owed Landlord under this Lease herein reserved be abated
by reason of: (a) the installation, use or interruption of use of any
equipment used in connection with the furnishing of any such utilities
or services, or any change in the character or means of supplying or
providing any such utilities or services or any supplier thereof; (b)
the failure to furnish or delay in furnishing any such utilities or
services when such failure or delay is caused by acts of God or the
elements, labor disturbances of any character, or any other accidents
or other conditions beyond the reasonable control of Landlord or
because of any interruption of service due to Tenant's
use of water, electric current or other resource in excess of that
being supplied or furnished for the use of the Premises as of the date
Tenant takes possession of the Premises; (c) the inadequacy,
limitation, curtailment, rationing or restriction on use of water,
electricity, gas or any other form of energy or any other service or
utility whatsoever serving the Premises or Project, whether by
Regulation or otherwise; or (d) the partial or total unavailability of
any such utilities or services to the Premises or the Building, whether
by Regulation or otherwise; nor shall any such occurrence constitute an
actual or constructive eviction of Tenant. Landlord shall further have
no obligation to protect or preserve any apparatus, equipment or device
installed by Tenant in the Premises, including without limitation by
providing additional or after-hours heating or air conditioning.
Landlord shall be entitled to cooperate voluntarily and in a reasonable
manner with the efforts of national, state or local governmental
agencies or utility suppliers in reducing energy or other resource
consumption. The obligation to make services available hereunder shall
be subject to the limitations of any such voluntary, reasonable
program. In addition, Landlord reserves the right to change the
supplier or provider of any such utility or service from time to time.
Tenant shall cooperate with Landlord and any supplier or
provider of such services designated by Landlord from time to time to
facilitate the delivery of such services to Tenant at the Premises and
to the Building and Project, including without limitation allowing
Landlord and Landlord's suppliers or providers, and
their respective agents and contractors, reasonable access to the
Premises for the purpose of installing, maintaining, repairing,
replacing or upgrading such service or any equipment or machinery
associated therewith.
C. Tenant shall pay, upon demand, for all utilities furnished to
the Premises, or if not separately billed to or metered to Tenant,
Tenant's Proportionate Share of all charges jointly
serving the Building in accordance with Paragraph 7. All
sums payable under this Paragraph 15 shall constitute. Additional Rent
hereunder.
D. Notwithstanding anything to the contrary contained in this Paragraph
15, Tenant agrees to pay all charges for electricity and water consumed
in the Premises. Such consumption shall be measured by an electricity
meter and water submeter respectively installed by Landlord as part of
Landlord's Base Building Work. Tenant also agrees to be solely
responsible, at Tenant's expense, for contracting with a janitorial
service company to provide janitorial services within the Premises (in
accordance with the terms of this Lease, including without limitation
Paragraph 4E above). Tenant acknowledges that if required by Landlord,
said janitorial contractor shall be a union contractor. Landlord shall
not be liable for any acts of such janitorial service company
contracted by Tenant, whether or not the janitorial service company
contracted by Tenant currently works in the Project for Landlord or any
other tenant. Landlord shall not be liable, in any manner whatsoever,
for and Tenant shall not be entitled to an abatement or reduction of
rent by reason of Landlord's failure to furnish any of the foregoing
utilities when such failure is caused by accidents, breakage, repairs,
strikes, brownouts, blackouts, lockouts or other labor disturbances or
labor disputes of any character, or by any other cause, similar or
dissimilar, beyond the reasonable control of Landlord, nor shall such
failure under such circumstances be construed as a constructive or
actual eviction of Tenant. Landlord shall not be liable under any
circumstances for loss or injury for interference with Tenant's
business and/or operations through or in connection with or incidental
to. Landlord's failure to furnish any of said services or utilities. If
Tenant fails to pay any charges referred to in this paragraph 15, when
due. Landlord may pay the same, and any amount so paid by Landlord
shall, thereupon become due to Landlord from Tenant as Additional Rent.
16. SUBORDINATION
Without the necessity of any additional document being executed by
Tenant for the purpose of effecting a subordination, this Lease shall
be and is hereby declared to be subject and subordinate at all times
to: (a) all ground leases or underlying leases which may now exist or
hereafter be executed affecting the Premises and/or the land upon which
the Premises and Project are situated, or both; and (b) any mortgage or
deed of trust which may now exist or be placed upon the Building, the
Project and/or the land upon which the Premises or the Project are
situated, or said ground leases or underlying leases, or
Landlord's interest or estate in any of said items which is specified
as security provided that all ground lessers and mortgagees will not
disturb Tenant's leasehold interest following a termination of the
ground or underlying lease or foreclosure (other than as a result of a
default by Tenant hereunder). Notwithstanding the foregoing, Landlord
shall have the right to subordinate or cause to be subordinated any
such ground leases or underlying leases or any such liens to this
Lease. If any ground lease or underlying lease terminates for any
reason or any mortgage or deed of trust is foreclosed or a conveyance
in lieu of foreclosure is made for any reason, Tenant shall, not
withstanding any subordination, attorn to and become the Tenant of the
successor in interest to Landlord, except as expressly provided in this
Lease or any nondisturbance agreement, provided that Tenant shall not
be disturbed in its possession under this Lease by such successor in
interest so long as Tenant is not in default under this Lease and such
successor in interest provides
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<PAGE>
to Tenant a non-disturbance agreement. Within ten (10) days after
request by Landlord, Tenant shall execute and deliver any additional
documents reasonably requested by Landlord or any ground landlord,
mortgagee or beneficiary under a deed of trust evidencing Tenant's
attornment or the subordination of this Lease with respect to any such
ground leases or underlying leases or any such mortgage or deed of
trust, subject to such nondisturbance requirement. If requested in
writing by Tenant, Landlord shall use commercially reasonable efforts
to obtain a subordination, nondisturbance and attornment agreement for
the benefit of Tenant reflecting the foregoing from any ground
landlord, mortgagee or beneficiary, at Tenant's expense, subject to
such other terms and conditions as the ground landlord, mortgagee or
beneficiary may require.
Notwithstanding anything to the contrary contained in this Article 16,
as of the date of this Lease, there are no ground leases, mortgages or
deeds of trust encumbering or affecting the Building.
17. FINANCIAL STATEMENTS
At the request of Landlord from time to time (not more often than twice
per year), Tenant shall provide to Landlord Tenant's current financial
statements or other information discussing financial worth of Tenant,
which Landlord shall use solely for purposes of this Lease and in
connection with the ownership, management, financing and disposition of
the Project.
18. ESTOPPEL CERTIFICATE
Tenant agrees from time to time, in connection with the sale or
financing of the Building or Project or a sale of Landlord or for other
reasons, and within ten (10) business days after request of Landlord,
to deliver to Landlord, or Landlord's designee, an estoppel certificate
in a form reasonably acceptable to both parties and stating that this
Lease is in full force and effect, that this Lease has not been
modified (or stating all modifications, written or oral, to this
Lease), the date to which Rent has been paid, the unexpired portion of
this Lease, that there are no current defaults by Landlord or Tenant
under this Lease (or specifying any such defaults), that the leasehold
estate granted by this Lease is the sole interest of Tenant in the
Premises and/or the land at which the Premises are situated and any
exceptions to these statements that may exist at the time, and such
other matters pertaining to this Lease as may be reasonably requested
by Landlord or any mortgagee, beneficiary, purchaser or prospective
purchaser of the Building or Project or any interest therein. Failure
by Tenant to execute and deliver such certificate shall constitute an
acceptance of the Premises and acknowledgment by Tenant that the
statements included are true and correct without exception. Tenant
agrees that if Tenant fails to execute and deliver such certificate
within such ten (10) business day period, Landlord may execute and
deliver such certificate on Tenant's behalf and that such certificate
shall be binding on Tenant. Landlord and Tenant intend that any
statement delivered pursuant to this Paragraph may be relied upon by
any mortgagee, beneficiary, purchaser or prospective purchaser of the
Building or Project or any interest therein. The parties agree that
Tenant's obligation to furnish such estoppel certificates in a timely
fashion is a material inducement for Landlord's execution of this
Lease, and shall be an event of default (without any cure period that
might be provided under Paragraph 26.A(3) of this Lease) if Tenant
fails to fully comply or makes any material misstatement in any such
certificate.
19. SECURITY DEPOSIT
Tenant agrees to deposit with Landlord upon execution of this Lease, a
security deposit as stated in the Basic Lease Information (the
"Security Deposit"), which sum shall be held and owned by Landlord,
without obligation to pay interest, as security for the performance of
Tenant's covenants and obligations under this Lease. The Security
Deposit is not an advance rental deposit or a measure of damages
incurred by Landlord in case of Tenant's default. Upon the occurrence
of any event of default by Tenant, Landlord may from time to time,
without prejudice to any other remedy provided herein or by law, use
such fund as a credit to the extent necessary to credit against any
arrears of Rent or other payments due to Landlord hereunder, and any
other damage, injury, expense or liability caused by such event of
default, and Tenant shall pay to Landlord, within 15 days, the amount
so applied-in order to restore the Security Deposit to its original
amount. Although the Security Deposit shall be deemed the property of
Landlord, any remaining balance of such deposit shall be returned by
Landlord to Tenant at such time after termination of this Lease that
all of Tenant's obligations under this Lease have been fulfilled,
reduced by such amounts as may be required by Landlord to remedy
defaults on the part of Tenant in the payment of Rent or other
obligations of Tenant under this Lease, to repair damage to the
Premises, Building or Project caused by Tenant or any Tenant's Parties
and to restore the Premises to the condition specified in Section 12
above. Landlord may use and commingle the Security Deposit with other
funds of Landlord. Notwithstanding the foregoing, provided Tenant is
not then in default under this Lease and provided Tenant has not been
in material default on more than three(3), occasions during the Term.
(i) on August 15, 2001. Landlord shall apply an amount equal to S75,000
from the Security Deposit against Tenant's, Base Rent obligations for
the next succeeding months of the Term (until such amount has been
fully credit against Base Rent). (ii) on August 15, 2002. Landlord
shall apply an amount equal to $75,000 from the remaining Security
Deposit against Tenant's Base Rent obligations for the next succeeding
months of the Term (until such amount has been fully credit against
Base Rent), (iii) on August 15, 2003. Landlord shall apply an amount
equal to $50,000 from the remaining Security Deposit against Tenant's
Base Rent obligations for the next succeeding months of the Term (until
such amount has been fully credit against Base Rent), and (iv) on
August 15, 2004. Landlord shall apply an amount, equal to $50,000 from
the remaining Security Deposit against Tenant's Base Rent obligations
for the next succeeding months of the Term (until such amount has been
fully credit against Base Rent). If the foregoing applications of
portions of the Security Deposit are made against Tenant's Base Rent
obligations for said months, the remaining Security Deposit after said
applications shall equal $100,000.
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<PAGE>
20. LIMITATION OF TENANT'S REMEDIES
The obligations and liability of Landlord to Tenant for any default by Landlord
under the terms of this Lease are not personal obligations of Landlord or of the
individual or other partners of Landlord or its or their partners, directors,
officers, or shareholders, and Tenant agrees to look solely to Landlord's
interest in the Project for the recovery of any amount from Landlord, and shall
not look to other assets of Landlord nor seek recourse against the assets of the
individual or other partners of Landlord or its or their partners, directors,
officers or shareholders. Any lien obtained to enforce any such judgment and any
levy of execution thereon shall be subject and subordinate to any lien, mortgage
or deed of trust on the Project. Under no circumstances shall Tenant have the
right to offset against or recoup Rent or other payments due and to become due
to Landlord hereunder except as expressly provided in Paragraph 23.B. below,
which Rent and other payments shall be absolutely due and payable hereunder in
accordance with the terms hereof.
21. ASSIGNMENT AND SUBLETTING
A. (1) GENERAL. This Lease has been negotiated to be and is granted
as an accommodation to Tenant. Accordingly, this Lease is personal to
Tenant, and Tenant's rights granted hereunder do not include the right
to assign this Lease or sublease the Premises, or to receive any
excess, either in installments or lump sum, over the Rent which is
expressly reserved by Landlord as hereinafter provided, except as
otherwise expressly hereinafter provided. Tenant shall not assign or
pledge this Lease or sublet the Premises or any part thereof, whether
voluntarily or by operation of law, or permit the use or occupancy of
the Premises or any part thereof by anyone other than Tenant, or suffer
or permit any such assignment, pledge, subleasing or occupancy, without
Landlord's Landlord's prior written consent except as provided herein.
If Tenant desires to assign this Lease or sublet any or all of the
Premises, Tenant shall give Landlord written notice (the "Transfer
Notice") at least thirty (30) days prior to the anticipated effective
date of the proposed assignment or sublease, which shall contain all of
the information reasonably requested by Landlord to address Landlord's
decision criteria specified hereinafter. Landlord shall then have a
period of twenty-five (25) days following receipt of the Transfer
Notice (together with all supporting documentation reasonably requested
by Landlord in connection with its review of Tenant's request) to
notify Tenant in writing that Landlord elects to consent or deny
consent to the proposed assignment or sublease, and Landlord's failure
to respond within such twenty-five (25)-day period will be deemed to be
consent to the proposed assignment or sublease. Landlord's consent to a
proposed assignment or sublease shall not be unreasonably withheld.
Consent to any assignment or subletting shall not constitute consent to
any subsequent transaction to which this Paragraph 21 applies.
Landlord's failure to consent to an assignment or sublease will not
result in the termination of this Lease or in any recapture rights to
Landlord.
(2) Conditions of Landlord's CONSENT. Without limiting the other
instances in which it may be reasonable for Landlord to withhold
Landlord's consent to an assignment or subletting, Landlord and Tenant
acknowledge that it shall be reasonable for Landlord to withhold
Landlord's consent in the following instances: if the proposed assignee
does not agree to be bound by and assume the obligations of Tenant
under this Lease; the use of the Premises by such proposed assignee or
subtenant would violate any exclusivity or other arrangement which
Landlord has with any other tenant or occupant or any Regulation or
would increase the Occupancy Density or Parking Density of the Building
or Project, or would otherwise result in an undesirable tenant mix for
the Project as reasonably determined by Landlord; the proposed assignee
or subtenant is not of sound financial condition as determined by
Landlord in Landlord's reasonable discretion; the proposed assignee or
subtenant is a governmental agency; the proposed assignee or subtenant
has, in Landlord's reasonable opinion, a bad reputation as a tenant of
property or has, in Landlord's reasonable opinion, a bad business
reputation; the proposed assignee or subtenant is a person with whom
Landlord is negotiating to lease space in the Project or is a present
tenant of the Project; the assignment or subletting would entail any
Alterations which would lessen the value of the leasehold improvements
in the Premises or use of any Hazardous Materials or other noxious use
or use which may disturb other tenants of the Project; or Tenant is
then in default of any obligation of Tenant under this Lease, or Tenant
has defaulted under this Lease on three (3) or more occasions during
any twelve (12) months preceding the date that Tenant shall request
consent. Failure by or refusal of Landlord to consent to a proposed
assignee or subtenant shall not cause a termination of this Lease. At
the option of Landlord, a surrender and termination of this Lease shall
operate as an assignment to Landlord of some or all subleases or
subtenancies. Landlord shall exercise this option by giving notice of
that assignment to such subtenants on or before the effective date of
the surrender and termination. In connection with each request for
assignment or subletting, Tenant shall pay to Landlord Landlord's
standard fee for approving such requests, which amount will not exceed
$1,000,00. as well as all costs incurred by Landlord or any mortgagee
in approving each such request and effecting any such transfer,
including, without limitation, reasonable attorneys' fees.
B. BONUS RENT. Any Rent or other consideration realized by Tenant under
any such sublease or assignment in excess of the Rent payable hereunder, after
amortization of a reasonable brokerage commission and other reasonable
out-of-pocket costs incurred by Tenant in connection with the sublease or
assignment, shall be divided and
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<PAGE>
paid, fifty percent (50%) to Tenant,
fifty percent ((50%) to Landlord. In any subletting or assignment
undertaken by Tenant, Tenant shall diligently seek to obtain the maximum rental
amount available in the marketplace for comparable space available for primary
leasing.
C. CORPORATION, So long as the proposed successor entity
maintains financial strength equal to or greater than the financial strength of
Tenant at the commencement of this Lease, and any transfer is not intended as a
subterfuge to avoid Tenant's obligations under this Lease, if Tenant is a
corporation, a transfer of corporate shares by sale, assignment, bequest,
inheritance, operation of law or other disposition (including such a transfer to
or by a receiver or trustee in federal or state bankruptcy, insolvency or other
proceedings) resulting in a change in the present control of such corporation or
any of its parent corporations by the person or persons owning a majority of
said corporate shares, shall not constitute an assignment for purposes of this
Lease.
D. UNINCORPORATED ENTITY. So long as the proposed successor entity
maintains financial strength equal to or greater than the financial strength of
Tenant at the commencement of this Lease, and any transfer is not intended as a
subterfuge to avoid Tenant's obligations under this Lease, if Tenant is a
partnership, joint venture, unincorporated limited liability company or other
unincorporated business form, a transfer of the interest of persons, firms or
entities responsible for managerial control of Tenant by sale, assignment,
bequest, inheritance, operation of law or other disposition, so as to result in
a change in the present control of said entity and/or of the underlying
beneficial interests of said entity and/or a change in the identity of the
persons responsible for the general credit obligations of said entity shall not
constitute an assignment for all purposes of this Lease.
E. LIABILITY. Subject to Section 21F, no assignment or
subletting by Tenant, permitted or otherwise, shall relieve Tenant of any
obligation under this Lease or alter the primary liability of the Tenant named
herein for the payment of Rent or for the performance of any other obligations
to be performed by Tenant, including obligations contained in Paragraph 25 with
respect to any assignee or subtenant. Landlord may collect rent or other amounts
or any portion thereof from any assignee, subtenant, or other occupant of the
Premises, permitted or otherwise, and apply the net rent collected to the Rent
payable hereunder, but no such collection shall be deemed to be a waiver of this
Paragraph 21, or the acceptance of the assignee, subtenant or occupant as
tenant, or a release of Tenant from the further performance by Tenant of the
obligations of Tenant under this Lease. Any assignment or subletting which
conflicts with the provisions hereof shall be void.
F. PERMITTED TRANSFER, Despite any other provision of this Lease,
Landlord's consent is not required (but prior written notice to Landlord is
required) for any assignment or sublease to CancerVax, or any other company
which is owned or controlled in part by any entity or person who, on the date of
this Lease, is an employee, shareholder, officer, director, or holds a voting
interest in Tenant, as long as the following conditions are met:
(i) Landlord receives written notice of the assignment or sublease
at least thirty (30) days in advance thereof (as well as any
documents or other information reasonably requested by
Landlord regarding the assignment or sublease):
(ii) If the transfer is an assignment, the assignee assumes in
writing all of Tenant's obligations under this Lease:
(iii) The financial condition of said transferee is reasonably
acceptable to Landlord; and
(iv) For the Term of this Lease, Tenant shall remain liable for the
performance of all obligations under this Lease if the
subtenant or assignee does not perform such obligations (after
the expiration of any applicable cure periods), provided that
Landlord delivers written notice to Tenant of such
nonperformance.
22. AUTHORITY
Landlord represents and warrants that it has full right and authority to enter
into this Lease and to perform all of Landlord's obligations
hereunder and that all persons signing this Lease on its behalf are authorized
to do. Tenant and the person or persons, if any, signing on behalf of Tenant,
jointly and severally represent and warrant that Tenant has full right and
authority to enter into this Lease, and to perform all of Tenant
obligations hereunder, and that all persons signing this Lease on its behalf are
authorized to do so.
23. CONDEMNATION
A. Condemnation Resulting in Termination. If the whole or any substantial
part of the Premises (or material portion of the Building or Project which
substantially impairs Tenant's ability to operate its business from the
Premises) should be taken or condemned for any public use under any Regulation,
or by right of eminent domain, or by private purchase in lieu thereof, and the
taking would prevent or materially interfere with the Permitted Use of the
Premises, either party shall have the right to terminate this Lease at its
option. If any material portion of the Building or Project is taken or condemned
for any public use under any Regulation, or by right of eminent domain, or by
private purchase in lieu thereof, Landlord may terminate this Lease at its
option. In either of such events, the Rent shall be abated during the unexpired
portion of this Lease, effective when the physical taking of said Premises shall
have occurred.
B. Condemnation Not Resulting in Termination. If a portion of the Project
of which the Premises are a part should be taken or condemned for any public use
under any Regulation, or by right of eminent domain, or by private purchase in
lieu thereof, and the taking prevents or materially interferes with the
Permitted Use of the Premises, and this Lease
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is not terminated as provided in Paragraph 23.A. above, the Rent payable
hereunder during the unexpired portion of this Lease shall be reduced by the
proportionate amount of the Premises taken or sold, as the case may be,
beginning on the date when the physical taking shall have occurred, but only
after giving Landlord credit for all sums received or to be received by Tenant
by the condemning authority. Notwithstanding anything to the contrary contained
in this Paragraph, if the temporary use or occupancy of any part of the Premises
shall be taken or appropriated under power of eminent domain during the Term,
this Lease shall be and remain unaffected by such taking or appropriation and
Tenant shall continue to pay in full all Rent payable hereunder by Tenant during
the Term; in the event of any such temporary appropriation or taking, Tenant
shall be entitled to receive that portion of any award which represents
compensation for the use of or occupancy of the Premises during the Term, and
Landlord shall be entitled to receive that portion of any award which represents
the cost of restoration of the Premises and the use and occupancy of the
Premises.
C. AWARD. Landlord shall be entitled to (and Tenant shall assign to
Landlord) any and all payment, income, rent, award or any interest therein
whatsoever which may be paid or made in connection with such taking or
conveyance and Tenant shall have no claim against Landlord or otherwise for any
sums paid by virtue of such proceedings, whether or not attributable to the
value of any unexpired portion of this Lease, except as expressly provided in
this Lease. Notwithstanding the foregoing, any compensation specifically and
separately awarded Tenant for Tenant's personal property and
moving costs, shall be and remain the property of Tenant.
D. WAIVER OF CCP SECTION 1265.130. Each party waives the
provisions of California Civil Code Procedure Section 1265.130 allowing either
party to petition the superior court to terminate this Lease as a result of a
partial taking.
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24. CASUALTY DAMAGE
A. GENERAL. If the Premises or Building should be damaged or destroyed by
fire, tornado, or other casualty (collectively, "Casualty"), Tenant shall give
immediate written notice thereof to Landlord. Within thirty (30) days after
Landlord's receipt of such notice, Landlord shall notify Tenant whether in
Landlord's estimation material restoration of the Premises can reasonably be
made within one hundred eighty (180) days from the date of such notice and
receipt of required permits for such restoration. Landlord's determination shall
be binding on Tenant.
B. WITHIN 180 DAYS. If the Premises or Building should be damaged by
Casualty to such extent that material restoration can in Landlord's reasonable
estimation be reasonably completed within one hundred eighty (180) days after
the date of such notice and receipt of required permits for such restoration,
this Lease shall not terminate. Provided that insurance proceeds are received by
Landlord to fully repair the damage, Landlord shall proceed to rebuild and
repair the Premises in the manner determined by Landlord, except that Landlord
shall not be required to rebuild, repair or replace any part of the Alterations
which may have been placed on or about the Premises by Tenant. If the Premises
are untenantable in whole or in part following such damage, the Rent payable
hereunder during the period in which they are untenantable shall be abated
proportionately, but only to the extent the Premises are unfit for occupancy.
C. GREATER THAN 180 DAYS. If the Premises or Building should be damaged by
Casualty to such extent that rebuilding or repairs cannot in
Landlord's reasonable estimation be completed within one hundred
eighty (180) days after the date of such notice and receipt of required permits
for such rebuilding or repair, then Landlord shall have the option of either:
(1) terminating this Lease effective upon the date of the occurrence of such
damage, in which event the Rent shall be abated during the unexpired portion of
this Lease; or (2) electing to rebuild or repair the Premises diligently and in
the manner determined by Landlord in which event the Rent will be
proportionately abated until the Premises are restored and Tenant is able to
resume using the Premises for the Permitted Use. Landlord shall notify Tenant of
its election within thirty (30) days after Landlord's receipt of
notice of the damage or destruction. Notwithstanding the above, Landlord shall
not be required to rebuild, repair or replace any part of any Alterations which
may have been placed, on or about the Premises by Tenant. If the Premises are
untenantable in whole or in part following such damage, the Rent payable
hereunder during the period in which they are untenantable shall be abated
proportionately, but only to the extent the Premises are unfit
for occupancy.
D. TENANT'S FAULT. Notwithstanding anything herein to the
contrary, if the Premises or any other portion of the Building are damaged by
Casualty resulting from the fault, negligence, or breach of this Lease by Tenant
or any of Tenant's Parties, Base Rent and Additional Rent shall
not be diminished during the repair of such damage and Tenant shall be liable to
Landlord for the cost and expense of the repair and restoration of the Building
caused thereby to the extent such cost and expense is not covered by insurance
proceeds.
E. INSURANCE PROCEEDS. Notwithstanding anything herein to the contrary, if
the Premises or Building are damaged or destroyed and are not fully covered by
the insurance proceeds received by Landlord or if the holder of any indebtedness
secured by a mortgage or deed of trust covering the Premises requires that the
insurance proceeds be applied to such indebtedness, then in either case Landlord
shall have the right to terminate this Lease by delivering written notice of
termination to Tenant within thirty (30) days after the date of notice to
Landlord that said damage or destruction is not fully covered by insurance or
such requirement is made by any such holder, as the case may be, whereupon this
Lease shall terminate.
F. WAIVER. This Paragraph 24 shall be Tenant's sole and
exclusive remedy in the event of damage or destruction to the Premises or the
Building. As a material inducement to Landlord entering into this Lease, Tenant
hereby waives any rights it may have under Sections 1932, 1933(4), 1941 or 1942
of the Civil Code of California with respect to any destruction of the Premises,
Landlord's obligation for tenantability of the Premises and
Tenant's right to make repairs and deduct the expenses of such
repairs, or under any similar law, statute or ordinance now or hereafter in
effect.
G. TENANT'S PERSONAL PROPERTY. In the event of any damage
or destruction of the Premises or the Building, under no circumstances shall
Landlord be required to repair any injury or damage to, or make any repairs to
or replacements of, Tenant's personal property.
25. HOLDING OVER
Unless Landlord expressly consents in writing to Tenant's holding
over, Tenant shall be unlawfully and illegally in possession of the Premises,
whether or not Landlord accepts any rent from Tenant or any other person while
Tenant remains in possession of the Premises without Landlord's
written consent. If Tenant shall retain possession of the Premises or any
portion thereof without Landlord's consent following the
expiration of this Lease or sooner termination for any reason, then Tenant shall
pay to Landlord for each day of such retention double the amount
of daily rental as of the last month prior to the date of expiration or earlier
termination. Tenant shall also indemnify, defend, protect and hold Landlord
harmless from any loss, liability or cost, including consequential and
incidental damages and reasonable attorneys' fees, incurred by
Landlord resulting from delay by Tenant in surrendering the Premises, including,
without limitation, any claims made by the succeeding tenant founded on such
delay. Acceptance of Rent by Landlord following expiration or earlier
termination of this Lease, or following demand by Landlord for possession of the
Premises, shall not constitute a renewal of this Lease, and nothing contained in
this Paragraph 25 shall waive Landlord's right of reentry or any
other right. If upon expiration
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or earlier termination of this Lease, or following demand by Landlord for
possession of the Premises, Tenant has not fulfilled its obligation with respect
to repairs and cleanup of the Premises or any other Tenant obligations as set
forth in this Lease, then Landlord shall have the right to perform any such
obligations as it deems necessary at Tenant's sole cost and expense. Any time
required by Landlord to complete such obligations shall not be considered a
period of holding over. The provisions of this Paragraph 25 shall survive any
expiration or earlier termination of this Lease.
26. DEFAULT
A. EVENTS OF DEFAULT. The occurrence of any of the following shall
constitute an event of default on the part of Tenant:
(1) ABANDONMENT. Abandonment or vacation of the Premises for a
continuous period in excess of five (5) days. Tenant waives any right
to notice Tenant may have under Section 1951.3 of the Civil Code of the
State of California, the terms of this Paragraph 26.A. being deemed
such notice to Tenant as required by said Section 1951.3.
(2) NONPAYMENT OF RENT. Failure to pay any installment of Rent or
any other amount due and payable hereunder upon the date when said
payment is due, as to which time is of the essence, if Landlord has
provided written notice to Tenant that such payment has not been
received and Tenant has not paid the amount due within five (5) days
thereafter.
(3) OTHER OBLIGATIONS. Failure to perform any obligation,
agreement or covenant under this Lease other than those matters
specified in subparagraphs (1) and (2) of this Paragraph 26.A., such
failure continuing for fifteen (15) days after written notice of such
failure, as to which time is of the essence.
(4) GENERAL ASSIGNMENT. A general assignment by Tenant for the
benefit of creditors.
(5) BANKRUPTCY. The filing of any voluntary petition in bankruptcy
by Tenant, or the filing of an involuntary petition by
Tenant's creditors, which involuntary petition remains undischarged for
a period of thirty (30) days. If under applicable law, the trustee in
bankruptcy or Tenant has the right to affirm this Lease and continue to
perform the obligations of Tenant hereunder, such trustee or Tenant
shall, in such time period as may be permitted by the bankruptcy court
having jurisdiction, cure all defaults of Tenant hereunder outstanding
as of the date of the affirmance of this Lease and provide to Landlord
such adequate assurances as may be necessary to ensure Landlord of the
continued performance of Tenant's obligations under this
Lease.
(6) RECEIVERSHIP. The employment of a receiver to take
possession of substantially all of Tenant's assets or
Tenant's leasehold of the Premises, if such appointment
remains undismissed or undischarged for a period of fifteen (15) days
after the order therefor.
(7) ATTACHMENT. The attachment, execution or other judicial
seizure of all or substantially all of Tenant's assets
or Tenant's leasehold of the Premises, if such
attachment or other seizure remains undismissed or undischarged for a
period of fifteen (15) days after the levy thereof.
(8) INSOLVENCY. The admission by Tenant in writing of its
inability to pay its debts as they become due.
B. REMEDIES UPON DEFAULT.
(1) TERMINATION. In the event of the occurrence of any event of
default, Landlord shall have the right to give a written termination
notice to Tenant, and on the date specified in such notice,
Tenant's right to possession shall terminate, and this Lease
shall terminate unless on or before such date all Rent in arrears and
all costs and expenses incurred by or on behalf of Landlord hereunder
shall have been paid by Tenant and all other events of default of this
Lease by Tenant at the time existing shall have been fully remedied to
the reasonable satisfaction of Landlord. At any time after such
termination, Landlord may recover possession of the Premises or any
part thereof and expel and remove therefrom Tenant and any other person
occupying the same, including any subtenant or subtenants
notwithstanding Landlord's consent to any sublease, by
any lawful means, and again repossess and enjoy the Premises without
prejudice to any of the remedies that Landlord may have under this
Lease, or at law or equity by any reason of Tenant's
default or of such termination. Landlord hereby reserves the right, but
shall not have the obligation, to recognize the continued possession of
any subtenant. The delivery or surrender to Landlord by or on behalf of
Tenant of keys, entry codes, or other means to bypass security at the
Premises shall not terminate this Lease.
(2) CONTINUATION AFTER DEFAULT. Even though an event of default
may have occurred, this Lease shall continue in effect for so long as
Landlord does not terminate Tenant's right to possession
under Paragraph 26.B.(1) hereof, and Landlord may enforce all of
Landlord's rights and remedies under this Lease and at
law or in equity, including without limitation, the right to recover
Rent as it becomes due, and Landlord, without terminating this Lease,
may exercise all of the rights and remedies of a landlord under Section
1951.4 of the Civil Code of the State of California or any successor
code section. Acts of maintenance, preservation or efforts to lease the
Premises or the appointment of a receiver under application of Landlord
to protect Landlord's interest under this Lease or other
entry by Landlord upon the Premises shall not constitute an election to
terminate Tenant's right to possession.
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(3) INCREASED SECURITY DEPOSIT. If Tenant is in default under
Paragraph 26.A.(2) hereof and such default remains uncured for ten (10)
days after such occurrence or such default occurs more than three times
in any twelve (12) month period, Landlord may require that Tenant
increase the Security Deposit to the amount of three times the current
month's Rent at the time of the most recent default.
C. DAMAGES AFTER DEFAULT. Should Landlord terminate this Lease pursuant to
the provisions of Paragraph 26.B.(1) hereof, Landlord shall have the rights and
remedies of a Landlord provided by Section 1951.2 of the Civil Code of the State
of California, or any successor code sections. Upon such termination, in
addition to any other rights and remedies to which Landlord may be entitled
under applicable law or at equity, Landlord shall be entitled to recover from
Tenant: (1) the worth at the time of award of the unpaid Rent and other amounts
which had been earned at the time of termination, (2) the worth at the time of
award of the amount by which the unpaid Rent and other amounts that would have
been earned after the date of termination until the time of award exceeds the
amount of such Rent loss that Tenant proves could have been reasonably avoided;
(3) the worth at the time of award of the amount by which the unpaid Rent and
other amounts for the balance of the Term after the time of award exceeds the
amount of such Rent loss that the Tenant proves could be reasonably avoided; and
(4) any other amount and court costs necessary to compensate Landlord for all
detriment proximately caused by Tenant's failure to perform Tenant's obligations
under this Lease or which, in the ordinary course of things, would be likely to
result therefrom. The "worth at the time of award", as used in (1) and (2) above
shall be computed at the Applicable Interest Rate (defined below). The "worth at
the time of award" as used in (3) above shall be computed by discounting such
amount at the Federal Discount Rate of the Federal Reserve Bank of San Francisco
at the time of award plus one percent (1%). If this Lease provides for any
periods during the Term during which Tenant is not required to pay Base Rent or
if Tenant otherwise receives a Rent concession, then upon the occurrence of an
event of default, Tenant shall owe to Landlord the full amount of such Base Rent
or value of such Rent concession, plus interest at the Applicable Interest Rate,
calculated from the date that such Base Rent or Rent concession would have been
payable.
D. LATE CHARGE. In addition to its other remedies, Landlord shall have the
right without notice or demand to add to the amount of any payment required to
be made by Tenant hereunder, and which is not paid and received by Landlord on
or before the first day of each calendar month, an amount equal to ten percent
(10%) of the delinquency for each month or portion thereof that the delinquency
remains outstanding to compensate Landlord for the loss of the use of the amount
not paid and the administrative costs caused by the delinquency, the parties
agreeing that Landlord's damage by virtue of such delinquencies
would be extremely difficult and impracticable to compute and the amount stated
herein represents a reasonable estimate thereof. Any waiver by Landlord of any
late charges or failure to claim the same shall not constitute a waiver of other
late charges or any other remedies available to Landlord.
E. INTEREST. Interest shall accrue on all sums not paid when due hereunder
at the lesser of ten percent (10%)per annum or the maximum interest rate allowed
by law ("APPLICABLE INTEREST RATE") from the due date until paid.
F. REMEDIES CUMULATIVE. All rights, privileges and elections or remedies
of the parties are cumulative and not alternative, to the extent permitted by
law and except as otherwise provided herein.
27. LIENS
Tenant shall at all times keep the Premises and the Project free from liens
arising out of or related to work or services performed, materials or supplies
furnished or obligations incurred by or on behalf of Tenant or in connection
with work made, suffered or done by or on behalf of Tenant in or on the Premises
or Project. If Tenant shall not, within ten (10) days following Landlord's
notice to Tenant or Tenant otherwise becoming aware of the imposition of any
such lien, cause the same to be released of record by payment or posting of a
proper bond, Landlord shall have the right, but not the obligation, to cause the
same to be released by such means as Landlord shall reasonably deem proper,
including payment of the claim giving rise to such lien. All sums paid by
Landlord on behalf of Tenant and all expenses incurred by Landlord in connection
therefor shall be payable to Landlord by Tenant on demand with interest at the
Applicable Interest Rate as Additional Rent. Landlord shall have the right at
all times to post and keep posted on the Premises any notices permitted or
required by law, or which Landlord shall deem proper, for the protection of
Landlord, the Premises, the Project and any other party having an interest
therein, from mechanics' and materialmen's liens, and Tenant shall give Landlord
not less than ten (10) business days prior written notice of the commencement of
any work in the Premises or Project which could lawfully give rise to a claim
for mechanics' or materialmen's liens to permit Landlord to post and record a
timely notice of non-responsibility, as Landlord may elect to proceed or as the
law may from time to time provide, for which purpose, if Landlord shall so
determine, Landlord may enter the Premises. Tenant shall not remove any such
notice posted by Landlord without Landlord's consent, and in any event not
before completion of the work which could lawfully give rise to a claim for
mechanics' or materialmen's liens.
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28. Intentionally Omitted
29. TRANSFERS BY LANDLORD
In the event of a sale or conveyance by Landlord of the Building or a
foreclosure by any creditor of Landlord, the same shall operate to release
Landlord from any liability upon any of the covenants or conditions, express or
implied, herein contained in favor of Tenant, to the extent required to be
performed after the passing of title to Landlord's
successor-in-interest. In such event, Tenant agrees to look solely to the
responsibility of the successor-in-interest of Landlord under this Lease with
respect to the performance of the covenants and duties of
"Landlord" to be performed after the passing of title to
Landlord's successor-in-interest. (including, without limitation,
the repayment of any portion of the security deposit to Tenant, provided said
security deposit is transferred or otherwise credited to said
successor-in-interest. The terms of this Lease shall not be affected by any
such sale and Tenant agrees in attorn to the purchaser or assignee.
provided it performs the obligations of "Landlord" under this
Lease from and after the date it acquires the interest in the Building.
Landlord's successor(s)-in-interest shall not have liability to Tenant with
respect to the failure to perform any of the obligations of
"Landlord." to the extent required to be performed prior to the date such
successor(s)-in-interest became the owner of the Building.
30. RIGHT OF LANDLORD TO PERFORM TENANT'S COVENANTS
All covenants and agreements to be performed by Tenant under any of the terms of
this Lease shall be performed by Tenant at Tenant's sole cost and
expense and without any abatement of Rent. If Tenant shall fail to pay any sum
of money, other than Base Rent, required to be paid by Tenant hereunder or shall
fail to perform any other act on Tenant's part to be performed
hereunder, including Tenant's obligations under Paragraph 11
hereof, and such failure shall continue for fifteen (15) business days after
notice thereof by Landlord, in addition to the other rights and remedies of
Landlord, Landlord may make any such payment and perform any such act on
Tenant's part. In the case of an emergency, no prior notification
by Landlord shall be required. Landlord may take such actions without any
obligation and without releasing Tenant from any of Tenant's
obligations. All sums so paid by Landlord and all incidental costs incurred by
Landlord and interest thereon at the Applicable Interest Rate, from the date of
payment by Landlord, shall be paid to Landlord on demand as Additional Rent.
31. WAIVER
If either Landlord or Tenant waives the performance of any term, covenant or
condition contained in this Lease, such waiver shall not be deemed to be a
waiver of any subsequent breach of the same or any other term, covenant or
condition contained herein, or constitute a course of dealing contrary to the
expressed terms of this Lease. The acceptance of Rent by Landlord shall not
constitute a waiver of any preceding breach by Tenant of any term, covenant or
condition of this Lease, regardless of Landlord's knowledge of
such preceding breach at the time Landlord accepted such Rent. Failure by
Landlord to enforce any of the terms, covenants or conditions of this Lease for
any length of time shall not be deemed to waive or decrease the right of
Landlord to insist thereafter upon strict performance by Tenant. Waiver by
Landlord of any term, covenant or condition contained in this Lease may only be
made by a written document signed by Landlord, based upon full knowledge of the
circumstances.
32. NOTICES
Each provision of this Lease or of any applicable governmental laws, ordinances,
regulations and other requirements with reference to sending, mailing, or
delivery of any notice or the making of any payment by Landlord or Tenant to the
other shall be deemed to be complied with when and if the following steps are
taken:
A. RENT. All Rent and other payments required to be made by Tenant to
Landlord hereunder shall be payable to Landlord at Landlord's
Remittance Address set forth in the Basic Lease Information, or at such other
address as Landlord may specify from time to time by written notice delivered in
accordance herewith. Tenant's obligation to pay Rent and any
other amounts to Landlord under the terms of this Lease shall not be deemed
satisfied until such Rent and other amounts have been actually received by
Landlord.
B. OTHER. All notices, demands, consents and approvals which may or are
required to be given by either party to the other hereunder shall be in writing
and either personally delivered, sent by commercial overnight courier, mailed,
certified or registered, postage prepaid or sent by facsimile with confirmed
receipt (and with an original sent by commercial overnight courier), and in each
case addressed to the party to be notified at the Notice Address for such party
as specified in the Basic Lease Information or to such other place as the party
to be notified may from time to time designate by at least fifteen (15) days
notice to the notifying party. Notices shall be deemed served upon receipt or
refusal to accept delivery. Tenant appoints as its agent to receive the service
of all default notices and notice of commencement of unlawful detainer
proceedings the person in charge of or apparently in charge of occupying the
Premises at the time, and, if there is no such person, then such service may be
made by attaching the same on the main entrance of the Premises.
C. REQUIRED NOTICES. Tenant shall immediately notify Landlord in writing
of any notice of a violation or a potential or alleged violation of any
Regulation that relates to the Premises or the Project, or of any inquiry,
investigation, enforcement or other action that is instituted or threatened by
any governmental or regulatory agency against Tenant or any other occupant of
the Premises, or any claim that is instituted or threatened by any third party
that relates to the Premises or the Project.
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33. ATTORNEYS' FEES
If Landlord places the enforcement of this Lease, or any part thereof, or the
collection of any Rent due, or to become due hereunder, or recovery of
possession of the Premises in the hands of an attorney, Tenant shall pay to
Landlord, upon demand, Landlord's reasonable
attorneys' fees and court costs, whether incurred without trial, at trial,
appeal or review. In any action which Landlord or Tenant brings to enforce its
respective rights hereunder, the unsuccessful party shall pay all costs incurred
by the prevailing party including reasonable attorneys' fees, to
be fixed by the court, and said costs and attorneys' fees shall
be a part of the judgment in said action.
34. SUCCESSORS AND ASSIGNS
This Lease shall be binding upon and inure to the benefit of Landlord, its
successors and assigns, and shall be binding upon and inure to the benefit of
Tenant, its successors, and to the extent assignment is approved by Landlord as
provided hereunder, Tenant's assigns.
35. FORCE MAJEURE
If performance by a party of any portion of this Lease is made impossible by any
prevention, delay, or stoppage caused by strikes, lockouts, labor disputes, acts
of God, inability to obtain services, labor, or materials or reasonable
substitutes for those items, government actions, civil commotions fire or
other casualty, or other causes beyond the reasonable control of the party
obligated to perform (hereinafter collectively referred to as a "Force Majeure
Event"), performance by that party for a period equal to the period of that
prevention, delay, or stoppage is excused. Except as otherwise
provided in this Lease. Tenant's and Landlord's obligation to make any monetary
payments under this Lease, however, is not excused by this Paragraph 35.
36. SURRENDER OF PREMISES
A. Subject to Section 12. Tenant shall, upon expiration or sooner
termination of this Lease, surrender the Premises to Landlord in the same
condition as existed on the date Tenant originally took possession thereof,
and as thereafter improved pursuant to the Improvement Agreement
attached hereto as Exhibit "C," except for reasonable wear and tear and repairs
that are Landlord's responsibility under this Lease. Tenant's obligations
include, but are not limited to, all interior walls cleaned, all interior
painted surfaces repainted in the original color, all holes in walls repaired,
all carpets shampooed and cleaned, and all floors cleaned, waxed, and free of
any Tenant-introduced marking or painting, all to the reasonable satisfaction of
Landlord. Tenant shall remove all of its debris from the Project. At or before
the time of surrender, Tenant shall comply with the terms of Paragraph 12.A.
hereof with respect to Alterations to the Premises and all other matters
addressed in such Paragraph. If the Premises are not so surrendered at the
expiration or sooner termination of this Lease, the provisions of Paragraph 25
hereof shall apply. All keys to the Premises or any part thereof shall be
surrendered to Landlord upon expiration or sooner termination of the Term.
Tenant shall give written notice to Landlord at least twenty (20)
days prior to vacating the Premises and shall meet with Landlord for a joint
inspection of the Premises at the time of vacating, but nothing contained herein
shall be construed as an extension of the Term or as a consent by Landlord to
any holding over by Tenant. and failure timely provide such
notice shall not cause Tenant to become liable for any holdover penalties under
Section 25 above, In the event of Tenant's failure to give such notice or
participate in such joint inspection, Landlord's inspection at or
after Tenant's vacating the Premises shall conclusively be deemed
correct for purposes of determining Tenant's responsibility for
repairs and restoration. Any delay caused by Tenant's failure to
carry out its obligations under this Paragraph 36 beyond the term hereof, shall
constitute unlawful and illegal possession of Premises under Paragraph 25
hereof.
B. Notwithstanding anything to the contrary contained in Paragraph 36A
above, upon the expiration or early termination of this Lease. Tenant shall, at
Tenant's expense, remove all tenant improvements, fixtures, additions and/or
alterations made to, installed in or otherwise a part of the "clean room"
portion of the Premises (other than any supplemental HVAC equipment installed as
part of the Tenant Improvements and used in connection with the operation of the
"clean room." which supplemental HVAC equipment shall remain in the Building and
shall become Landlord's property) (collectively, the "Clean Room Equipment") and
repair any and all damage caused by such removal. Tenant shall not, however, be
responsible for removing any other improvements made pursuant to the terms of
the Improvement Agreement attached hereto as Exhibit "C" or existing in the
Premises as of the date of this Lease, Landlord acknowledges and agrees that
the Clean Room Equipment removed by Tenant pursuant to the preceding sentence
shall be considered Tenant's property and Landlord shall have no right, title or
interest in such property once the same has been properly and timely removed
from the Premises.
37. PARKING
So long as Tenant is occupying the Premises, except as otherwise
provided in the Basic Lease Information. Tenant and Tenant's Parties shall have
the right to use and access at any time of the day up to the number of parking
spaces specified in the Basic Lease Information on an unreserved,
nonexclusive, first come, first served basis, for passenger-size automobiles, in
the parking areas in the Project designated from time to time by Landlord for
use in common by tenants of the Building.
Tenant may request to reserve up to five (5) spaces and request additional
parking spaces from time to time and if Landlord in its sole discretion agrees
to make such additional spaces available for use by Tenant, such spaces shall be
provided on a month-to-month unreserved and nonexclusive basis (unless otherwise
agreed in writing by Landlord), and
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subject to such parking charges as Landlord shall determine, and shall otherwise
be subject to such terms and conditions as Landlord may require.
Tenant shall at all times comply and shall cause all Tenant's
Parties and visitors to comply with all Regulations and any rules and
regulations established from time to time by Landlord relating to parking at the
Project, including any keycard, sticker or other identification or entrance
system, and hours of operation, as applicable.
Landlord shall have no liability for any damage to property or other items
located in the parking areas of the Project, nor for any personal injuries or
death arising out of the use of parking areas in the Project by Tenant or any
Tenant's Parties. Without limiting the foregoing, if Landlord
arranges for the parking areas to be operated by an independent contractor not
affiliated with Landlord, Tenant acknowledges that Landlord shall have no
liability for claims arising through acts or omissions of such independent
contractor. In all events, Tenant agrees to look first to its insurance carrier
and to require that Tenant's Parties look first to their
respective insurance carriers for payment of any losses sustained in connection
with any use of the parking areas.
Landlord reserves the right to assign specific spaces, and to reserve spaces for
visitors, small cars, disabled persons or for other tenants or guests, and
Tenant shall not park and shall not allow Tenant's Parties to
park in any such assigned or reserved spaces provided that such assignments or
reservations do not affect the Parking Density. Tenant may validate visitor
parking by such method as Landlord may approve, at the validation rate from time
to time generally applicable to visitor parking. Landlord also reserves the
right to alter, modify, relocate or close all or any portion of the parking
areas in order to make repairs or perform maintenance service, or to restripe or
renovate the parking areas, or if required by casualty, condemnation, act of
God, Regulations or for any other reason deemed reasonable by Landlord.
Tenant shall pay to Landlord (or Landlord's parking contractor,
if so directed in writing by Landlord), as Additional Rent hereunder, the
monthly charges established from time to time by Landlord for parking in such
parking areas (which shall initially be the charge specified in the Basic Lease
Information, as applicable). Such parking charges shall be payable in advance
with Tenant's payment of Basic Rent. No deductions from the
monthly parking charge shall be made for days on which the Tenant does not use
any of the parking spaces entitled to be used by Tenant.
38. MISCELLANEOUS
A. GENERAL. The term "Tenant" or any pronoun used in place
thereof shall indicate and include the masculine or feminine, the singular or
plural number, individuals, firms or corporations, and their respective
successors, executors, administrators and permitted assigns, according to the
context hereof.
B. TIME. Time is of the essence regarding this Lease and all of its
provisions.
C. CHOICE OF LAW. This Lease shall in all respects be governed by the laws
of the State of California.
D. ENTIRE AGREEMENT. This Lease, together with its Exhibits, addenda and
attachments and the Basic Lease Information, contains all the agreements of the
parties hereto and supersedes any previous negotiations. There have been no
representations made by the Landlord or understandings made between the parties
other than those set forth in this Lease and its Exhibits, addenda and
attachments and the Basic Lease Information.
E. MODIFICATION. This Lease may not be modified except by a written
instrument signed by the parties hereto. Tenant accepts the area of the Premises
as specified in the Basic Lease Information and Exhibit "B" as the approximate
area of the Premises for all purposes under this Lease, and acknowledges and
agrees that no other definition of the area (rentable, usable or otherwise) of
the Premises shall apply. Unless Landlord and Tenant agree to
modify the Premises as used by Tenant, and subject to Section 39C. Tenant shall
no be entitled to a recalculation of the square footage of the Premises,
rentable, usable or otherwise.
F. SEVERABILITY. If, for any reason whatsoever, any of the provisions
hereof shall be held to be unenforceable or, invalid by any Court
or arbitrator of competent Jurisdiction, then all of the other provisions shall
be and remain in full force and effect and be unaffected by such holding.
G. RECORDATION. Tenant shall not record this Lease or a short form
memorandum hereof.
H. EXAMINATION OF LEASE. Submission of this Lease to Tenant does not
constitute an option or offer to lease and this Lease is not effective otherwise
until execution and delivery by both Landlord and Tenant.
I. ACCORD-AND SATISFACTION. Unless Landlord agrees in
writing to the contrary, no payment by Tenant of a lesser amount than the total
Rent due nor any endorsement on any check or letter accompanying any check or
payment of Rent shall be deemed an accord and satisfaction of full payment of
Rent, and Landlord may accept such payment without prejudice to
Landlord's right to recover the balance of such Rent or to pursue other
remedies.
J. EASEMENTS. Landlord may grant easements on the Project and dedicate for
public use portions of the Project without Tenant's consent;
provided that no such grant or dedication shall interfere with
Tenant's Permitted Use of the Premises. Upon
Landlord's request, Tenant shall execute, acknowledge and
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deliver to Landlord documents, instruments, maps and plats necessary to
effectuate Tenant's covenants hereunder.
K. DRAFTING AND DETERMINATION PRESUMPTION. The parties acknowledge that
this Lease has been agreed to by both the parties, that both Landlord and Tenant
have consulted with attorneys with respect to the terms of this Lease and that
no presumption shall be created against Landlord because Landlord drafted this
Lease. Except as otherwise specifically set forth in this Lease, with respect to
any consent, determination or estimation of Landlord required or allowed in this
Lease or requested of Landlord, Landlord's consent, determination or estimation
shall be given or made solely by Landlord in Landlord's good faith opinion,
whether or not objectively reasonable. Except as otherwise specifically set
forth in this Lease, if Landlord fails to respond to any request for its consent
within the time period, if any, specified in this Lease, Landlord shall be
deemed to have disapproved such request.
L. EXHIBITS. The Basic Lease Information, and the Exhibits, addenda and
attachments attached hereto are hereby incorporated herein by this reference and
made a part of this Lease as though fully set forth herein.
M. NO LIGHT, AIR OR VIEW EASEMENT. Any diminution or shutting off of
Slight, air or view by any structure which may be erected on lands adjacent to
or in the vicinity of the Building shall in no way affect this Lease or impose
any liability on Landlord.
N. NO THIRD PARTY BENEFIT. This Lease is a contract between Landlord and
Tenant and nothing herein is intended to create any third party benefit.
O. QUIET ENJOYMENT. Upon payment by Tenant of the Rent, and upon the
observance and performance of all of the other covenants, terms and conditions
on Tenant's part to be observed and performed, Tenant shall
peaceably and quietly hold and enjoy the Premises for the term hereby demised
without hindrance or interruption by Landlord or any other person or persons
lawfully or equitably claiming by, through or under Landlord, subject,
nevertheless, to all of the other terms and conditions of this Lease. Landlord
shall not be liable for any hindrance, interruption, interference or disturbance
by other tenants or third persons, nor shall Tenant be released from any
obligations under this Lease because of such hindrance, interruption,
interference or disturbance, provided that Landlord shall exercise its rights
and perform its obligations under this Lease, and otherwise operate the Building
in such a way as to minimize interference with Tenant's use of the Premises.
P. COUNTERPARTS. This Lease may be executed in any number of counterparts,
each of which shall be deemed an original.
Q. MULTIPLE PARTIES. If more than one person or entity is named herein as
Tenant, such multiple parties shall have joint and several responsibility to
comply with the terms of this Lease.
R. PRORATIONS. Any Rent or other amounts payable to Landlord by Tenant
hereunder for any fractional month shall be prorated based on a month of 30
days. As used herein, the term "fiscal year" shall mean the calendar year or
such other fiscal year as Landlord may deem appropriate.
39. ADDITIONAL PROVISIONS
A. BASE RENT. Tenant shall be obligated to pay Base Rent to Landlord in
accordance with the following schedule:
<TABLE>
<CAPTION>
MONTHLY PERIOD MONTHLY BASE RENT MONTHLY BASE RENT PER RENTABLE SQUARE FOOT
<S> <C> <C>
Months 1-12 $ 30,208.00 $ 1,18
Months 13-24 $ 31,488.00 $ 1,23
Months 25-36 $ 32,768.00 $ 1,28
Months 37-48 $ 34,048.00 $ 1,33
Months 49-60 $ 35,328.00 $ 1,38
Months 61-72 $ 36,608.00 $ 1,43
Months 73-84 $ 37,888.00 $ 1,48
Months 85-96 $ 39,168.00 $ 1,53
Months 97-108 $ 40,448.00 $ 1,58
Months 109-120 $ 41,728.00 $ 1,63
</TABLE>
B. OPTION TO RENEW. Tenant shall, provided this Lease is in full force and
effect and Tenant is not and has not been in default under any of the terms and
conditions of this Lease (unless such default was cured by Tenant in a prompt
manner), have one (1) option to renew this Lease for a term of five (5) years,
for the Premises in "as is" condition and on the same terms and conditions set
forth in this Lease, except as modified by the terms, covenants and conditions
set forth below:
(1) If Tenant elects to exercise such option, then Tenant shall
provide Landlord with written notice no earlier than the date
which is 365 days prior to the expiration of the then current
term of this Lease, but no later than 5:00 p.m. (Pacific
Standard Time) on the date which is 270 days prior to the
expiration of the term of this Lease. If Tenant fails to
provide such notice. Tenant shall have no further or
additional right to extend or renew the term of this Lease.
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(2) The Base Rent in effect at the expiration of the term of this
Lease shall be adjusted, if necessary, to reflect ninety-five
percent (95%) of the current fair market rental for
comparable space in the Building or Project and in other
similar buildings in the same rental market as of the date the
renewal term is to commence, taking into account the specific
provisions of this Lease which will remain constant, and the
Building amenities, location, identity, quality, age,
condition, term of lease, existing tenant improvements,
services provided, and other pertinent items.
(3) Landlord shall propose to Tenant the new Base Rent for the
Premises for the renewal term based on Landlord's
determination of fair market rental value no later than
fifteen (15) days after receipt of notice of Tenant's exercise
of its option to renew.
(4) Landlord and Tenant shall negotiate in good faith and attempt
to agree on the fair market rental value of the Premises. If
Tenant and Landlord are unable to agree on a mutually
acceptable rental rate for the renewal term within thirty (30)
days after notification by Landlord to Tenant of Landlord's
determination of the new Base Rent for the applicable renewal
term, but in any event no later than the date which is 90 days
prior to the expiration of the then current term, then on or
before such date Landlord and Tenant shall each appoint a
licensed real estate broker with at least ten (10) year's
experience in leasing office or industrial space, as
applicable, in the area in which the Building is located to
act as arbitrators. The two (2) arbitrators so appointed shall
independently each determine the fair market rental value for
the Premises for the renewal term based on the above criteria
and attempt to agree on the fair market rental value within
sixty (60) days after their appointment.
If the two (2) arbitrators so appointed cannot agree on the fair market
rental value for the renewal term within such 60-day period, the two
(2) arbitrators shall within five (5) days thereafter appoint a third
arbitrator who shall be a licensed real estate broker with at least ten
(10) year's experience in leasing office or industrial space, as
applicable, in the area in which the Building is located. The third
arbitrator so appointed shall independently determine the fair market
rental value for the Premises for the renewal term within thirty (30)
days after appointment, by selecting from the proposals submitted by
each of the first two arbitrators the one that most closely
approximates the third arbitrator's determination of such fair market
rental value. The third arbitrator shall have no right to adopt a
compromise or middle ground or any modification of either of the
proposals submitted by the first two arbitrators. The proposal chosen
by the third arbitrator as most closely approximating the third
arbitrator's determination of the fair market rental value shall
constitute the decision and award of the arbitrators and shall be final
and binding on the parties.
Each party shall pay the fees and expenses of the arbitrator appointed
by such party and one-half (1/2) of the fees and expenses of the third
arbitrator, if any. Notwithstanding the foregoing, in the event the
Base rent is found to be within five percent (5%) of the original rate
quoted by Landlord, then Tenant shall bear the full cost of the
arbitration process.
If either party fails to appoint an arbitrator, or if either of the
first two arbitrators fails to submit his or her proposal of fair
market rental value to the other party, in each case within the time
periods set forth above, then the decision of the other party's
arbitrator shall be considered final and binding.
In the event the third arbitrator fails to present a fair market rental
value within such 30-day period, then by mutual consent of the Landlord
and Tenant:
(a) the time period will be extended, or
(b) If either Landlord or Tenant do not wish to extend
the time period, a fourth arbitrator shall be
selected by the first two arbitrators and a new
thirty (30) day period shall begin.
(5) Notwithstanding anything to the contrary contained in this
Paragraph, in no event shall the Base Rent for the renewal
term be less than the Base Rent in effect at the expiration of
the previous term. In addition, Landlord shall have no
obligation to provide or pay for any tenant improvements or
brokerage commissions during the renewal term.
(6) Tenant's right to exercise any option to renew under this
Paragraph shall be conditioned upon Tenant occupying the
entire Premises and the same not being occupied by any
assignee, subtenant or licensee other than Tenant or its
affiliate at the time of exercise of any option and
commencement of the renewal term. Tenant's exercise
of the option to renew shall constitute a representation by
Tenant to Landlord that as of the date of exercise of the
option and the commencement of the renewal term, Tenant does
not intend to seek to assign this Lease in whole or in part,
or sublet all or any portion of the Premises.
(7) Any exercise by Tenant of any option to renew under this
Paragraph shall be irrevocable. If requested by Landlord.
Tenant agrees to execute a lease amendment reflecting the
foregoing terms and conditions, prior to the commencement of
the renewal term. The option to renew granted under this
Paragraph is not transferable; the parties hereto acknowledge
and agree that they intend that each option to renew this
Lease under this Paragraph shall be "personal" to the specific
Tenant named in this Lease (the "Original Tenant") and that
in no event will any assignee or sublessee have any rights to
exercise such option to renew unless agreed to in writing by
Landlord.
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C. Right of First Offer. Provided Tenant is not if default under this
Lease, beyond the expiration of any applicable notice and cure period. Landlord
hereby grants to Tenant a right of first offer with respect to all of the
balance of the space in the Building ("First Offer Space"). Notwithstanding the
foregoing, (i) such first offer right of Tenant shall commence only following
the expiration or earlier termination of any existing lease pertaining to the
First offer Space. (collectively, the "Superior Leases"), including any
renewal of such existing or future lease, whether or not such renewal is
pursuant to an express written provision in such lease, and regardless of
whether any such renewal is consummated pursuant to a lease amendment or a new
lease, and (ii) such first offer right shall be subordinate and secondary to all
rights of expansion, first refusal, first offer or similar rights granted to (A)
the tenants of the Superior Leases and (B) any other tenant of the project, as
identified in Exhibit "D" attached hereto (the rights described in items (i)
and (ii). above to be known collectively as "Superior Rights"). Tenant's right
of first offer shall be on the terms and conditions set forth in this Paragraph
39C.
(1) Procedure for Offer. Landlord shall notify Tenant (the "First
Offer Notice") when Landlord first has received from a third party a
lease proposal or offer for the First Offer Space which Landlord
intends to respond to with a counter-offer or counter-lease proposal,
where no holder of a Superior Right desires to lease such space. The
First Offer Notice shall describe the space so offered to Tenant and
shall set forth Landlord's proposed good faith economic terms and
conditions applicable to Tenant's lease of such space (collectively,
the "Economic Terms"). If Tenant exercises its right of first offer
pursuant to the terms of this Paragraph 39C during months 1-60 of the
Term, the Economic Terms shall include (i) a Base Rent for the First
Offer Space equal to the Base Rent per rentable square foot then
payable by Tenant for the Premises (as such rent may be adjusted from
time to time. and (ii) the provision of a tenant improvement
allowance to Tenant equal to the product of (i) $30.00 per rentable
square foot of the First Offer Space, multiplied by (ii) a fraction,
the numerator of which is the number of months remaining in the Term
from and after the First Offer Space Delivery Date (defined below) and
the dominator of which is 120. If Tenant exercises its right of first
offer pursuant to the terms of this Paragraph 39C during months 61-120
of the Term, the Economic Terms shall include a Base Rent for the First
Offer Space equal lo the fair market rental value of such space (which
fair market rental value shall be determined in accordance with the
terms and conditions set forth in Paragraph 39B above, except that all
references therein to the "Premises" shall instead refer to the ("First
Offer Space Notwithstanding the foregoing. Landlord's obligation to
deliver the First Offer Notice shall not apply during the last nine (9)
months of the initial Term.
(2) Procedure for Acceptance. If Tenant wishes to exercise
Tenant's right of first offer with respect to the space described in
the First Offer Notice, then within five (5) business days after
delivery of the first Offer. Notice to Tenant. Tenant shall deliver
notice to Landlord of Tenant's intention to exercise its right of first
offer with respect to the entire space described in the First Offer
Notice. If Tenant does not exercise its right of first offer within the
five (5) business day period, then Landlord shall be free to lease the
space described in the First Offer Notice to anyone to whom Landlord
desires on any terms and if Landlord enters into such a lease with said
prospective tenant. Tenant's right of first offer shall terminate as
to the First offer Space described in the First Offer Notice.
Notwithstanding anything to the contrary contained herein. Tenant must
elect to exercise its right of first offer, if at all, with respect to
all of the space offered by Landlord to Tenant at any particular time,
and Tenant may not elect to lease only a portion thereof.
(3) Construction of First Offer Space. Except as set forth above,
including the determination of the Economic Terms. Tenant shall take
the First Offer Space in its "as-is" condition, and Tenant shall be
entitled to construct improvements in the First Offer Space in
accordance with the provisions of Paragraph 12 of this Lease.
(4) Lease of First Offer Space. If Tenant timely exercises
Tenant's right to lease the First Offer Space as set forth herein.
Landlord and Tenant shall execute an amendment adding such First Offer
Space to this Lease upon the same non-economic terms and conditions as
applicable to the initial Premises, and the economic terms and
conditions as provided in this Paragraph 39C. Tenant shall commence
payment of rent for the first Offer Space and the Term of the First
offer space shall commence upon the date set forth in the Economic
Terms (the "First Offer Space Delivery Date"). The Term for the First
Offer Space shall expire co-terminously with Tenant's lease of the
initial Premises.
(5) No Defaults. The rights contained in this Paragraph 39C shall
be personal to the Original Tenant, and may only be exercised by the
Original Tenant (and not any assignee, sublessee or other transferee of
the Original Tenant's interest in this Lease) if Tenant occupies the
entire Premises as of the date of the First Offer Notice Tenant shall
not have the right to lease First Office Space as provided in this
Paragraph 39C if, as of the date of the First Offer Notice, or. at
Landlord's option, as of the scheduled date of delivery of such First
Offer Space 10 Tenant. Tenant is in default under this Lease, beyond
all applicable notice and cure periods.
D. Option to Terminate.
(1) Original Tenant shall have the one-time option (the
"Termination Option") to terminate the entire Lease, but not any portion of the
Lease. Such termination shall be effective as of the day immediately preceding
the five (5) year anniversary of the Term Commencement Date (the "Termination
Date"), upon the following terms and conditions:
(a) Tenant gives Landlord written notice (the "Termination
Notice") of Tenant's election to exercise the Termination Option on or before
5:00 p.m. Pacific Standard Time on or before the date which is nine (9) months
prior to the Termination Date (the "Termination Notice Date"):
(b) There exists no Event of Default under the Lease on the date
of the Termination Notice or on the Termination Date:
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(c) Tenant shall pay to Landlord concurrently with the delivery of
the Termination Notice an amount equal to the Termination Fee (defined below).
The "Termination Fee" Shall mean the sum (i) of $49,491.00 Plus (ii) the
unamortized Leasing Costs (defined below) as of the Termination Date, based upon
an amortization period from the Term Commencement Date until the Expiration
Date, with interest accruing on said unamortized Leasing Costs at 10% per annum
from the date they were paid. The term "Leasing Costs" shall mean the sum of (A)
all costs and expenses incurred by Landlord in connection with the Tenant
Improvements, and (B) the brokerage commissions paid by Landlord in connection
with this Lease. Landlord agrees to provide to Tenant (I) the total of the
Leasing Costs within thirty (30) days after the Term Commencement Date and (II)
the amount of the Termination Fee within 5 business days of Tenant's request for
such amount.
(2) In the event Tenant timely and properly exercises the
Termination Option, the term of the Lease shall terminate effective as of the
Termination Date. Base Rent and all other monetary obligations under the Lease
shall be paid through and apportioned as of the Termination Date, and neither
Landlord nor Tenant shall have any rights, liabilities or obligations accruing
under the Lease after the Termination Date, except for such rights and
liabilities which, by the terms of the Lease are obligations of the Tenant or
Landlord which expressly survive the expiration of the Lease. The Termination
Option shall automatically terminate and become null and void upon (a) the
failure of Tenant to timely or Properly exercise the Termination Option; or (b)
this Lease being terminated prior to the exercise of the Termination Option.
E. Signage. Provided Tenant is not in default under any of the terms or
conditions of this Lease which remains uncured, (after the expiration of any
applicable cure period), Tenant, at Tenant's sole cost and expense, shall have
the right to install a non-exclusive sign on the exterior of the Building in a
location acceptable to Landlord ("Tenant's Signage"). Tenant's Signage shall be
subject to Landlord's approval which approval shall not be unreasonably withheld
or delayed as to size, design, graphics, materials, method of attachment, colors
and similar specifications and shall be consistent with the exterior design,
materials and appearance of the Project and the Project's signage program, if
any, and shall be further subject to all applicable local governmental laws,
rules, regulations, codes and other approvals. Except for an assignment to
CancerVax which is approved by Landlord pursuant to Section 21F, Tenant's
Signage shall be personal to the Original Tenant and may not be assigned to any
assignee or sublessee of the Premises, or any other person or entity. Landlord
has the right, but not the obligation, to oversee the installation of Tenant's
Signage. The cost to operate, if any, Tenant's Signage shall be paid for by
Tenant, and Tenant shall be separately metered for such expense (the cost of
separately metering any utility usage shall also be paid for by Tenant). Upon
the expiration of the Lease Term, or other earlier termination of this Lease,
Tenant shall be responsible for any and all costs associated with the removal of
Tenant's Signage, including, but not limited to, the cost to repair and restore
the Building to its original condition, normal wear and tear excepted. Without
limiting the generality of the foregoing, Tenant shall be responsible, at it,
expense for all costs associated with the acquisition, design, fabrication,
permitting, installation, maintenance and removal of Tenant's Signage set forth
herein.
Subject to the approval of all necessary governmental or regulatory agencies
with jurisdiction over the Building and provided Original Tenant is not in
default under this Lease beyond applicable notice and cure provisions. Original
Tenant (and not any assignee, sublessee or other transferee of the Original
Tenant's interest in this lease) shall have the non-exclusive right to install
its name on a signage band on the monument sign which Landlord will install, at
its cost and expense, in a location adjacent to the Glencoe Avenue entrance to
the Building, at Original Tenant's sole cost and expense; providing, however,
that such identification signage shall be of Landlord's standard design, size,
wording, lettering, color, quality, materials, type, composition, and general
appearance or otherwise subject to Landlord's approval. The exact location of
such monument sign shall be selected by Landlord, in its sole discretion.
Without limiting the generality of the foregoing, Tenant shall be responsible,
at it expense, only for the costs associated with the acquisition, design,
fabrication, installation, maintenance and removal of Tenant's specific sign
located on such monument sign.
F. Additional Facilities.
(1) Subject to strict compliance with all of the terms of this
Lease (including without limitation the terms of Paragraph 4 above) and
obtaining any necessary governmental and regulatory approvals and the approval
of Landlord, in Landlord's sole discretion, as to its design, type of equipment,
location, method of attachment and construction, Tenant shall have the right to
(i) install an emergency power generator at the Project, together with the
cabling or wiring necessary to connect the generator to the Premises, (ii)
install an above-ground storage tank adjacent to the Premises, and (iii) install
a separate and secured waste disposal storage site (collectively, the
"Facilities"). All costs and expenses for the equipment, installation,
connection to and the maintenance, repair and operation of the Facilities
during the Term shall be the sole responsibility of Tenant. Tenant shall not be
charged any rent or other fees for the location in which the Facilities are
placed, provided that if the Facilities are located on one (1) or more parking
stalls, the number of parking stalls otherwise allocated to Tenant pursuant
to Article 1.1. of the Basic Lease Provisions shall be reduced by the number
of parking stalls used to accommodate the Facilities. Tenant shall be entitled
to install battery backup systems in the Premises.
(2) Landlord shall have the right from time to time during the
Term to have Tenant relocate the Facilities, provided Landlord shall give Tenant
prior notice of the need to relocate the Facilities, and shall coordinate such
relocation with Tenant so as not to interfere with or interrupt Tenant's use of
the Facilities. The cost of any such relocation shall be borne by Tenant to the
extent such relocation is required by any act OR omission by Tenant; otherwise,
said relocation cost shall be borne by Landlord. Landlord may require, in
Landlord's sole and absolute discretion, that the Facilities be screened from
view by a screen which shall be constructed by Tenant, at Tenant's cost, in
accordance with the specifications provided to Tenant by Landlord. To the extent
Landlord determines, in its reasonable discretion, that the plans and
specifications for the installation of the Facilities need to be reviewed by an
outside consultant. Tenant shall reimburse Landlord for all out-of-pocket
costs incurred by Landlord in connection with such review. Tenant agrees that
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upon the expiration or earlier termination of this Lease, Tenant shall remove
the Facilities, all related cabling and/or wiring in accordance with all
applicable governmental and regulatory requirements and repair all damage to
the project where the Facilities were installed caused thereby and restore all
such items in the area to the extent reasonably necessary to effect a complete
and effective repair to their condition prior to the installation of the
Facilities, ordinary wear and tear excepted.
(3) The installation of the Facilities shall be completed in a
good and workmanlike manner and in accordance with all laws, ordinances, rules,
regulations and orders affecting the Project, as well as the requirements set
forth in Article 12 above.
(4) Tenant shall be responsible for obtaining, if required, any
building permits and any licenses or permits required by any governmental agency
having jurisdiction over the Project. Landlord agrees to reasonably assist and
cooperate, at no expense to Landlord, with Tenant to obtain any appropriate
licenses or permits. Notwithstanding anything to the contrary contained herein,
the engineering with respect to the installation of the Facilities shall be
coordinated through the Project's designated engineers.
G. LETTER OF CREDIT. Notwithstanding anything to the contrary contained in
Article 19 above, concurrently with the execution of this Lease by Tenant,
Tenant shall have the right to deliver its security deposit to Landlord in the
form of an irrevocable standby letter of credit in favor of Landlord (the
"Letter of Credit"). The Letter of Credit may be drawn against by Landlord after
any default by Tenant under this Lease (after the expiration of any applicable
notice and cure period) and the Letter of Credit shall be reduced in the same
amounts and on the same dates as the security deposit is reduced pursuant to
Article 19 above (and subject to the same conditions to reduction set forth
therein). Tenant shall retain the right to cancel the Letter of Credit at any
time provided Tenant concurrently replaces such Letter of Credit being canceled
with cash in an amount equal to the then outstanding amount of the Letter of
Credit which was canceled. The Letter of Credit, if any, shall be (i) from a
bank reasonably acceptable to Landlord, (ii) in the form and content of that
attached hereto as Exhibit "E." and (iii) subject to the conditions stated in
this paragraph. The Letter of Credit shall have a term of at least 12 months and
be automatically renewed (or a reasonably satisfactory replacement Letter of
Credit from a bank reasonably acceptable to Landlord shall be in place in strict
accordance with the terms hereof) at least thirty (30) days prior to expiration
of each 12 month period for additional periods of 12 months each until the 30th
day following the expiration of the Term (unless Tenant informs Landlord that it
will replace the Letter of Credit with cash in accordance with the terms of
Article 19 above at least 30 days prior to the expiration of the Term). The
Letter of Credit shall be held by Landlord as additional security for the full
and faithful performance by Tenant of the terms, covenants and conditions of
this Lease during the Term in lieu of a cash security deposit.
If Tenant breaches any of the terms or conditions of this Lease, beyond the
expiration of all applicable notice and cure periods, or if Tenant has filed a
voluntary petition under the United States Bankruptcy Code, or Tenant's
creditors have filed an involuntary petition under the United Slates Bankruptcy
Code, then Landlord may draw upon all or a portion of the Letter of Credit for
the payment of the required amount of any sum in default, and for the payment of
any amount that Landlord may spend or may become obligated to spend by reason of
Tenant's default, and to compensate Landlord for any other loss or damage that
Landlord suffers by reason of Tenant's default to the extent Landlord is
entitled to compensation therefor pursuant to the terms of this Lease (any
amount of the Letter of Credit which is drawn upon by Landlord in accordance
with the provisions hereof, but is not used or applied in accordance with the
terms of this Lease, shall be deemed a part of the Security Deposit). The use,
application or retention of the Letter(s) of Credit, or any portion thereof,
shall not prevent Landlord from exercising any other rights or remedies provided
under this Lease, it being intended that Landlord shall not be required to
proceed against the Security Deposit and/or the Letter of Credit, and shall not
operate as a limitation on any recovery to which Landlord may otherwise be
entitled.
H. MUTUAL RELEASE. Landlord and Tenant hereby mutually release, acquit
and forever discharge each other and their respective agents, employees,
officers, directors, shareholders, partners (either general or limited),
affiliates, representatives, successors and assigns (collectively, the
"Affiliates") from any and all costs, damages, expenses, obligations,
liabilities, claims, actions, rights, demands and/or causes of action of any
kind or nature, including, but not limited to, actual attorneys' fees and costs,
and court costs (collectively, the "Claims"), which either party has or may have
against the other party from or in connection with or arising out of any
negotiations, discussions, understandings or agreements relating to the lease or
attempted lease of the Premises by Tenant prior to the date of this Lease, and
shall fully and finally settle all charges, claims, accounts or causes of action
of any nature, including, without limitation, both known and unknown claims and
causes of action that arose or could have arisen prior to the date first set
forth above with respect to such negotiations, discussions, understandings or
agreements.
I. MUTUAL WAIVER. FOR THE PERIOD OF TIME PRIOR TO THE DATE FIRST SET FORTH
ABOVE, LANDLORD AND TENANT EACH EXPRESSLY WAIVES ALL RIGHTS THEY HAVE OR MAY
CLAIM TO HAVE THAT, ANY CLAIM, DEMAND, OBLIGATION AND/OR CAUSE OF ACTION WHETHER
THROUGH IGNORANCE, OVERSIGHT OR ERROR, HAS BEEN OMITTED FROM THE TERMS OF THIS
LEASE, AND EACH ALSO WAIVES THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION
1542, WHICH PROVIDES:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY
AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
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EACH PARTY HERETO ACKNOWLEDGES THAT IT HAS RECEIVED THE ADVICE OF LEGAL COUNSEL
WITH RESPECT TO THE FOREGOING WAIVERS AND THE MUTUAL RELEASE SET FORTH IN
PARAGRAPH 39H OF THIS LEASE. AND UNDERSTANDS AND AGREES TO THE TERMS THEREIN.
J. CONTINGENCIES. The terms and conditions of this Lease and Landlord's
and Tenant's obligations hereunder are expressly subject to and conditioned upon
(i) the mutual execution and delivery of a lease amendment (on a form approved
by Landlord) by and between Landlord and the existing tenant of the Premises
pursuant to which said existing tenant relocates to other space in the Project,
and (ii) Landlord's ability to recapture approximately 23,729 rentable square
feet located at 4499 Glencoe Avenue. Marina del Rey, from the existing tenant
occupying said space (which recapture is a condition to the amendment referenced
in subparagraph (i) above).
40. JURY TRIAL WAIVER
EACH PARTY HERETO (WHICH INCLUDES ANY ASSIGNEE, SUCCESSOR HEIR OR PERSONAL
REPRESENTATIVE OF A PARTY) SHALL NOT SEEK A JURY TRIAL, HEREBY WAIVES TRIAL BY
JURY, AND HEREBY FURTHER WAIVES ANY OBJECTION TO VENUE IN THE COUNTY IN WHICH
THE BUILDING IS LOCATED, AND AGREES AND CONSENTS TO PERSONAL JURISDICTION OF THE
COURTS OF THE STATE IN WHICH THE PROPERTY IS LOCATED, IN ANY ACTION OR
PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY HERETO AGAINST THE OTHER ON ANY
MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE, THE
RELATIONSHIP OF LANDLORD AND TENANT TENANT'S USE OR OCCUPANCY OF
THE PREMISES, OR ANY CLAIM OF INJURY OR DAMAGE, OR THE ENFORCEMENT OF ANY REMEDY
UNDER ANY STATUTE, EMERGENCY OR OTHERWISE, WHETHER ANY OF THE FOREGOING IS BASED
ON THIS LEASE OR ON TORT LAW. EACH PARTY REPRESENTS THAT IT HAS HAD THE
OPPORTUNITY TO CONSULT WITH LEGAL COUNSEL CONCERNING THE EFFECT OF THIS
PARAGRAPH 40. THE PROVISIONS OF THIS PARAGRAPH 40 SHALL SURVIVE THE EXPIRATION
OR EARLIER TERMINATION OF THIS LEASE.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the day
and the year first above written.
LANDLORD
SPIEKER PROPERTIES, L.P.,
a California limited partnership
By: Spieker Properties, Inc.,
a Maryland corporation,
its general partner
By: /s/ [ILLEGIBLE]
-------------------------------------------
Its Vice President
Date: 7/28/99
TENANT
John Wayne Cancer Institute,
a non-profit corporation
By: /s/ James W. Hardin
-------------------------------------------
Name: James W. Hardin. Ph.D.
Title: COO/Executive Vice President
Date: 7-26-99
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EXHIBIT A
Rules and Regulations
1. Driveways, sidewalks, halls, passages, exits, entrances, elevators,
escalators and stairways shall not be obstructed by tenants or used
by tenants for any purpose other than for ingress to and egress from
their respective premises. The driveways, sidewalks, halls, passages,
exits, entrances, elevators and stairways are not for the use of the
general public and Landlord shall in all cases retain the right to
control and prevent access thereto by all persons whose presence, in
the reasonable judgment of Landlord, shall be prejudicial to the
safety, character, reputation and interests of the Building, the
Project and its tenants, provided that nothing herein contained shall
be construed to prevent such access to persons with whom any tenant
normally deals in the ordinary course of such tenant's
business unless such persons are engaged in illegal activities. No
tenant, and no employees or invitees of any tenant, shall go upon the
roof of any Building, except as authorized by Landlord. No tenant, and
no employees or invitees of any tenant shall move any common area
furniture without Landlord's consent, which will
not be unreasonably withheld or delayed.
2. Except as otherwise set forth in this Lease, no sign, placard,
banner, picture, name, advertisement or notice, visible from the
exterior of the Premises or the Building or the common areas of the
Building shall be inscribed, painted, affixed, installed or otherwise
displayed by Tenant either on its Premises or any part of the Building
or Project without the prior written consent of Landlord in
Landlord's sole and absolute discretion. Landlord shall have the
right to remove any such sign, placard, banner, picture, name,
advertisement, or notice without notice to and at the expense of
Tenant, which were installed or displayed in violation of this rule. If
Landlord shall have given such consent to Tenant at any time, whether
before or after the execution of Tenant's Lease, such
consent shall in no way operate as a waiver or release of any of the
provisions hereof or of the Lease, and shall be deemed to relate only
to the particular sign, placard, banner, picture, name, advertisement
or notice so consented to by Landlord and shall not be construed as
dispensing with the necessity of obtaining the specific written consent
of Landlord with respect to any other such sign, placard, banner,
picture, name, advertisement or notice.
All approved signs or lettering on doors and walls shall be printed,
painted, affixed or inscribed at the expense of Tenant
and shall be removed by Tenant at the time of vacancy at
Tenant's expense.
3. The directory of the Building or Project will be provided exclusively
for the display of the name and location of tenants only and Landlord
reserves the right to charge for the use thereof and to exclude any
other names therefrom.
4. No curtains, draperies, blinds, shutters, shades, screens or other
coverings, awnings, hangings or decorations shall be attached to, hung
or placed in, or used in connection with, any window or door on the
Premises without the prior written consent of Landlord, which will not
be unreasonably withheld or delayed. In any event with the prior
written consent of Landlord, all such items shall be installed inboard
of Landlord's standard window covering and shall in no
way be visible from the exterior of the Building. All electrical
ceiling fixtures hung in offices or spaces along the perimeter of the
Building must be fluorescent or of a quality, type, design, and bulb
color approved by Landlord, which will not be unreasonably withheld or
delayed. No articles shall be placed or kept on the window sills so as
to be visible from the exterior of the Building. No articles shall be
placed against glass partitions or doors which Landlord considers
unsightly from outside Tenant's Premises.
5. Landlord reserves the right to exclude from the Building and the
Project, between the hours of 6 p.m. and 8 a.m. and at all hours on
Saturdays, Sundays and legal holidays, all persons who are not tenants
or their accompanied guests in the Building. Each tenant shall be
responsible for all persons for whom it allows to enter the Building or
the Project and shall be liable to Landlord for all acts of such
persons.
Landlord and its agents shall not be liable for damages for any error
concerning the admission to, or exclusion from, the Building or the
Project of any person.
During the continuance of any invasion, mob, riot, public excitement or
other circumstance rendering such action advisable in
Landlord's opinion, Landlord reserves the right (but shall not be
obligated) to prevent access to the Building and the Project during the
continuance of that event by any means it considers appropriate for the
safety of tenants and protection of the Building, property in the
Building and the Project.
6. Tenant shall not cause any unnecessary labor by reason of
Tenant's carelessness or indifference in the preservation of good
order and cleanliness of its Premises. Landlord shall in no way be
responsible to Tenant for any loss of property on the Premises, however
occurring, or for any damage done to
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Tenant's property by the janitor or any other employee or any other
person.
7. Tenant shall see that all entrance and exit doors of its Premises are
closed and securely locked and must observe strict care and caution
that all water faucets or water apparatus, coffee pots or other
heat-generating devices are entirely shut off before Tenant or its
employees leave the Premises, and that all utilities shall likewise be
carefully shut off, so as to prevent waste or damage. Tenant shall be
responsible for any damage or injuries sustained by other tenants or
occupants of the Building or Project or by Landlord for noncompliance
with this rule. On multiple-tenancy floors, all tenants shall keep the
door or doors to the Building corridors closed at all times except for
ingress and egress.
8. Tenant shall not use any method of heating or air-conditioning other
than that supplied by Landlord, without Landlord's consent, which
shall not be unreasonably withheld or delayed. As more specifically
provided in Tenant's lease of the Premises, Tenant shall
not waste electricity, water or air-conditioning and agrees to
cooperate fully with Landlord to assure the most effective operation of
the Building's heating and air-conditioning, and shall
refrain from attempting to adjust any controls other than room
thermostats installed for Tenant's use.
9. Landlord will furnish Tenant free of charge with two keys to each door
in the Premises. Landlord may make a reasonable charge for any
additional keys. Tenant shall not alter any lock or
access device or install a new or additional lock or access device or
bolt on any door of its Premises, without the prior written consent of
Landlord, which shall not be unreasonably withheld or delayed. If
Landlord shall give its consent, Tenant shall in each case furnish
Landlord with a key for any such lock. Tenant, upon the termination of
its tenancy, shall deliver to Landlord the keys for all doors which
have been furnished to Tenant, and in the event of loss of any keys so
furnished, shall pay Landlord therefor.
10. The restrooms, toilets, urinals, wash bowls and other apparatus shall
not be used for any purpose other than that for which they were
constructed and no foreign substance of any kind whatsoever shall be
thrown into them. The expense of any breakage, stoppage, or damage
resulting from violation of this rule shall be borne by the tenant who,
or whose employees or invitees, shall have caused the breakage,
stoppage, or damage.
11. Tenant shall not use or keep in or on the Premises, the Building or the
Project any kerosene, gasoline, or inflammable or combustible fluid or
material, without Landlord's consent, which shall not be unreasonably
withheld or delayed.
12. Tenant shall not allow the Premises to be occupied or used in a manner
offensive or objectionable to Landlord or other occupants of the
Building by reason of noise, odors and/or vibrations or interfere in
any way with other tenants or those having business therein, nor shall
any animals or birds be brought or kept in or about the Premises, the
Building, or the Project.
13. No cooking shall be done or permitted by any tenant on the Premises,
except that use by the tenant of Underwriters'
Laboratory (UL) approved equipment, refrigerators and microwave ovens
may be used in the Premises for the preparation of coffee, tea, hot
chocolate and similar beverages, storing and heating food for tenants
and their employees shall be permitted. All uses must be in accordance
with all applicable federal, state and city laws, codes, ordinances,
rules and regulations and the Lease. Nothing in this rule shall prevent
Tenant from serving catered or prepared meals in the Premises.
14. Except with the prior written consent of Landlord, Tenant shall not
sell, or permit the sale, at retail, of newspapers, magazines,
periodicals, theater tickets or any other goods or merchandise in or on
the Premises, nor shall Tenant carry on, or permit or allow any
employee or other person to carry on, the business of stenography,
typewriting or any similar business in or from the Premises for the
service or accommodation of occupants of any other portion of the
Building, nor shall the Premises be used for the storage of merchandise
or for manufacturing of any kind (except for light manufacturing for
medical research), or the business of a public barber shop, beauty
parlor, nor shall the Premises be used for any illegal, improper,
immoral or objectionable purpose, or any business or activity other
than that specifically provided for in such Tenant's
Lease. Tenant shall not accept hairstyling, barbering, shoeshine, nail,
massage or similar services in the Premises or common areas except as
authorized by Landlord.
15. If Tenant requires telegraphic, telephonic, telecommunications, data
processing, burglar alarm or similar services, it shall first obtain,
and comply with, Landlord's instructions in their
installation, which shall not be unreasonably withheld or delayed. The
cost of purchasing, installation and maintenance of such services shall
be borne solely by Tenant.
16. Landlord will direct electricians as to where and how telephone,
telegraph and electrical wires are to be introduced or installed. No
boring or cutting for wires will be allowed without the prior written
consent of Landlord, which shall not be unreasonably withheld or
delayed. The location of burglar alarms, telephones, call boxes and
other office equipment affixed to the Premises shall be subject to the
prior written approval of Landlord.
17. Tenant shall not install any radio or television antenna, satellite
dish, loudspeaker or any other device on the exterior walls or the roof
of the Building, without Landlord's consent, which shall
not be
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unreasonably withheld or delayed. Tenant shall not interfere with radio
or television broadcasting or reception from or in the Building, the
Project or elsewhere.
18. Tenant shall not mark, or drive nails, screws or drill into the
partitions, woodwork or drywall or in any way deface the Premises or
any part thereof without Landlord's consent. Tenant may
install nails and screws in areas of the Premises that have been
identified for those purposes to Landlord by Tenant at the time those
walls or partitions were installed in the Premises. Tenant shall not
lay linoleum, tile, carpet or any other floor covering so that the same
shall be affixed to the floor of its Premises in any manner except as
approved in writing by Landlord. The expense of repairing any damage
resulting from a violation of this rule or the removal of any floor
covering shall be borne by the tenant by whom, or by whose contractors,
employees or invitees, the damage shall have been caused.
19. No furniture, freight, equipment, materials, supplies, packages,
merchandise or other property will be received in the Building or
carried up or down the elevators except between such hours and in such
elevators as shall be designated by Landlord.
Tenant shall not place a load upon any floor of its Premises which
exceeds the load per square foot which such floor was designed to carry
or which is allowed by law. Landlord shall have the right to prescribe
the weight, size and position of all safes, furniture or other heavy
equipment brought into the Building. Safes or other heavy objects
shall, if considered necessary by Landlord, stand on wood strips of
such thickness as determined by Landlord to be necessary to properly
distribute the weight thereof. Landlord will not be responsible for
loss of or damage to any such safe, equipment or property from any
cause, and all damage done to the Building by moving or maintaining any
such safe, equipment or other property shall be repaired at the expense
of Tenant.
Business machines and mechanical equipment belonging to Tenant which
cause noise or vibration that may be transmitted to the structure of
the Building or to any space therein to such a degree as to be
objectionable to Landlord or to any tenants in the Building shall be
placed and maintained by Tenant, at Tenant's expense, on
vibration eliminators or other devices sufficient to eliminate noise
or vibration. The persons employed to move such equipment in or out of
the Building must be acceptable to Landlord.
20. Tenant shall not install, maintain or operate upon its Premises any
vending machine without the written consent of Landlord, which shall
not be unreasonably withheld or delayed.
21. There shall not be used in any space, or in the public areas of the
Project either by Tenant or others, any hand trucks except those
equipped with rubber tires and side guards or such other material
handling equipment as Landlord may approve. Tenants using hand trucks
shall be required to use the freight elevator, or such elevator as
Landlord shall designate. No other vehicles of any kind shall be
brought by Tenant into or kept in or about its Premises.
22. Each tenant shall store all its trash and garbage within the interior
of the Premises. Tenant shall not place in the trash boxes or
receptacles any trash or any material that may not or
cannot be disposed of in the ordinary and customary manner of removing
and disposing of trash and garbage in the city, without violation of
any law or ordinance governing such disposal. All trash, garbage and
refuse disposal shall be made only through entry-ways and elevators
provided for such purposes and at such times as Landlord shall
designate. If the Building has implemented a building-wide recycling
program for tenants, Tenant shall use good faith efforts to participate
in said program.
23. Canvassing, soliciting, distribution of handbills or any other written
material and peddling in the Building and the Project are prohibited
and each tenant shall cooperate to prevent the same. No tenant shall
make room-to-room solicitation of business from other tenants in the
Building or the Project, without the written consent of Landlord.
24. Landlord shall have the right, exercisable without
liability to any tenant, to change the name and address of the Building
and the Project provided Tenant is informed of such change within a
reasonable period before it occurs.
25. Landlord reserves the right to exclude or expel from the Project any
person who, in Landlord's reasonable judgment, is under
the influence of alcohol or drugs or who wilfully commits any act in
violation of any of these Rules and Regulations.
26. Without the prior written consent of Landlord, which shall not be
unreasonably withheld or delayed. Tenant shall not use the name of the
Building or the Project or any photograph or other likeness of the
Building or the Project in connection with, or in promoting or
advertising, Tenant's business except that Tenant may
include the Building's or Project's name in
Tenant's address.
27. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental
agency.
28. Tenant assumes any and all responsibility for protecting its Premises
from theft, robbery and pilferage, which includes keeping doors locked
and other means of entry to the Premises closed.
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29. The requirements of Tenant will be attended to only upon appropriate
application at the office of the Building by an authorized individual.
Employees of Landlord shall not perform any work or do anything outside
of their regular duties unless under special instructions from
Landlord, and no employees of Landlord will admit any person (tenant or
otherwise) to any office without specific instructions from Landlord.
30. Landlord reserves the right to designate the use of the parking spaces
on the Project. Tenant or Tenant's guests shall park
between designated parking lines only, and shall not occupy two parking
spaces with one car. Parking spaces shall be for passenger vehicles
only; no boats, trucks, trailers, recreational vehicles or other types
of vehicles may be parked in the parking areas (except that trucks may
be loaded and unloaded in designated loading areas). Vehicles in
violation of the above shall be subject to tow-away, at vehicle
owner's expense. Vehicles parked on the Project
overnight without prior written consent of the Landlord shall be deemed
abandoned and shall be subject to tow-away at vehicle
owner's expense. No tenant of the Building shall park in visitor or
reserved parking areas. Any tenant found parking in such designated
visitor or reserved parking areas or unauthorized areas shall be
subject to tow-away at vehicle owner's expense. The
parking areas shall not be used to provide car wash, oil changes,
detailing, automotive repair or other services unless otherwise
approved or furnished by Landlord. Tenant will from time to time, upon
the request of Landlord, supply Landlord with a list of license plate
numbers of vehicles owned or operated by its employees or agents.
31. No smoking of any kind shall be permitted anywhere within the Building,
including, without limitation, the Premises and those areas immediately
adjacent to the entrances and exits to the Building, or any other area
as Landlord elects. Smoking in the Project is only permitted in smoking
areas identified by Landlord, which may be relocated from time to time.
32. If the Building (other than within the Premises) furnishes common area
conferences rooms for tenant usage, Landlord shall have the right to
control each tenant's usage of the conference rooms,
including limiting tenant usage so that the rooms are equally available
to all tenants in the Building. Any common area amenities or facilities
shall be provided from time to time at Landlord's
discretion.
33. Tenant shall not swap or exchange building keys or cardkeys with other
employees or tenants in the Building or the Project.
34. Tenant shall be responsible for the observance of all of the foregoing
Rules and Regulations by Tenant's employees, agents,
clients, customers, invitees and guests.
35. These Rules and Regulations are in addition to, and shall not be
construed to in any way modify, alter or amend, in whole or in part,
the terms, covenants, agreements and conditions of any lease of any
premises in the Project. If there is a conflict between these Rules and
Regulations and the terms of the Lease, the terms of the Lease will
control.
36. Landlord may waive any one or more of these Rules and Regulations for
the benefit of any particular tenant or tenants, but no such waiver by
Landlord shall be construed as a waiver of such Rules and Regulations
in favor of any other tenant or tenants, nor prevent Landlord from
thereafter enforcing any such Rules and Regulations against any or all
tenants of the Building.
37. Landlord reserves the right to make such other and reasonable rules and
regulations as in its judgment may from time to time be needed for
safety and security, for care and cleanliness of the Building and the
Project and for the preservation of good order therein. Tenant agrees
to abide by all such Rules and Regulations herein stated and any
additional rules and regulations which are adopted, provided such rules
and regulations do not conflict with the terms of the Lease and Tenant
receives reasonable notice thereof.
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EXHIBIT C
LEASE IMPROVEMENT AGREEMENT
This Lease Improvement Agreement ("IMPROVEMENT AGREEMENT")
sets forth the terms and conditions relating to construction of the initial
tenant improvements described in the Plans to be prepared and approved as
provided below (the "TENANT IMPROVEMENTS") in the Premises. Capitalized terms
used but not otherwise defined herein shall have the meanings set forth in the
Lease (the "LEASE") to which this Improvement Agreement is attached and
incorporated into.
1. Base Building Work. The "Base Building Work" described on
Schedule 1 to this Exhibit c, will be completed before the
Commencement Date by Landlord at Landlord's sole cost and expense and in
accordance with all applicable codes and laws.
2. Plans and Specifications.
2.1 Tenant shall retain the services of
'Gabus, Inc. (the "SPACE PLANNER") to prepare a detailed space plan (the "SPACE
PLAN") mutually satisfactory to Landlord and Tenant for the construction of the
Tenant Improvements in the Premises. Tenant shall submit the Space Plan and any
proposed revisions thereto to Landlord for Landlord's approval, which shall not
be unreasonably withheld or delayed.
2.2 Based on the approved Space Plan, Tenant shall cause
the Space Planner to prepare detailed plans, specifications and working drawings
reasonably satisfactory to Landlord and Tenant for
the construction of the Tenant Improvements (the "Plans"). Landlord and Tenant
shall diligently pursue the preparation of the Plans. Tenant shall submit to
Landlord for Landlord's reasonable approval the Plans and any proposed revisions
thereto, including the estimated cost of the Tenant Improvements. All necessary
revisions to the Space Plan and the Plans shall be made within two (2) business
days after Landlord's response thereto. This procedure shall be repeated until
Landlord ultimately approves the Space Plan and Plans. Landlord will charge no
fees in connection with its approval or its involvement in the Tenant
Improvement process.
2.3 Tenant shall be responsible for ensuring that the
Plans are compatible with the design, construction and equipment of the
Building, comply with applicable Regulations and the Standards (defined below),
and contain all such information as may be required to show locations, types and
requirements for all heat loads, people loads, floor loads, power and plumbing,
regular and special HVAC needs, telephone communications, telephone and
electrical outlets, lighting, light fixtures and related power, and electrical
and telephone switches, B.T.U. calculations, electrical requirements and special
receptacle requirements. The Plans shall also include mechanical, electrical,
plumbing, structural and engineering drawings mutually satisfactory to Landlord
and Tenant which shall be prepared by Wong & Gotma.
Notwithstanding Landlord's review and approval of the Space Plan
and the Plans and any revisions thereto, Landlord shall have no responsibility
or liability whatsoever for any errors or omissions contained in the Space Plan
or Plans or any revisions thereto, or to verify dimensions or conditions, or for
the quality, design or compliance with applicable Regulations of any
improvements described therein or constructed in accordance therewith. Tenant
hereby waives all claims against Landlord relating to, or arising out of the
design or construction of, the Tenant Improvements.
2.4 Landlord's criteria for approvals
shall be based on reasonable criteria established from time to time by Landlord,
but Landlord will be deemed to have acted reasonably if Landlord's disapproval
is predicated upon (i) effect on the structural integrity of the Building, (ii)
possible damage to the Building's mechanical, electrical, plumbing and HVAC
systems, (iii) non-compliance with applicable laws, codes and regulations, (iv)
incompatibility with the base building plans, (v) failure to use materials
required by Schedule 2 pertaining to Standards, and (vi) effect on the exterior
of the Building or any of the Building's common areas. Landlord shall not be
deemed to have approved the Space Plan, the Plans, or any proposed revisions
thereto, unless approved by Landlord in writing. Landlord shall approve or
disapprove any Space Plan, Plans or proposed revisions thereto submitted to
Landlord for Landlord's approval within three (3) business days after Landlord's
receipt thereof. If Landlord has not approved in writing any Space Plan, Plans,
or proposed revisions thereto submitted to Landlord within ten
(10) business days after Landlord's receipt thereof (together with any
additional items reasonably requested by Landlord in connection with its review
of the same Landlord shall be deemed to have approved the same.
Any disapproval by Landlord shall be in writing and shall set forth (i) the
reasons for the disapproval, (ii) suggested modifications which will make the
Space Plan or Plans acceptable, and (iii) a specific description of the
disapproved portion of the Space Plan or Plans.
3. Specifications for Standard Tenant Improvements.
3.1 Specifications and quantities of standard building
components which will comprise and be used in the construction of the Tenant
Improvements ("STANDARDS") are set forth in Schedule 2 to this EXHIBIT C. As
used herein, "STANDARDS" or "BUILDING STANDARDS" shall mean the standards for a
particular item selected from time to time by Landlord for the Building,
including those set forth on SCHEDULE 2 of this EXHIBIT C, or such other
standards of equal or better quality as may be mutually agreed between Landlord
and Tenant in writing.
3.2 No deviations from the Standards are permitted.
<PAGE>
4. Tenant Improvement Cost.
4.1 The cost of the Tenant Improvements shall be paid for
by Tenant, including, without limitation, the cost of: Standards; space plans
and studies; architectural and engineering fees; consulting fees in connection
with obtaining FDA approval for the operation of the Permitted Use from the
Premises; the cost to install the Additional Facilities in accordance with
Paragraph 39F of this Lease; permits, approvals and other governmental fees;
labor, material, equipment and supplies; construction fees and other amounts
payable to contractors or subcontractors; taxes; off-site improvements;
remediation and preparation of the Premises for construction of the Tenant
Improvements; taxes; filing and recording fees; premiums for insurance and
bonds; code compliance and related expenses triggered as a result of the
construction of the Tenant Improvements (except to the extent included as part
of Landlord's Base Building work; attorneys' fees; financing costs; and all
other costs expended or to be expended in the construction of the Tenant
Improvements, including those costs incurred for construction of elements of the
Tenant Improvements in the Premises, which construction was performed by
Landlord prior to the execution of the Lease or for materials comprising the
Tenant Improvements which were purchased by Landlord prior to the execution of
the Lease, provided that Landlord has delivered to Tenant an explanation of such
costs incurred by Landlord for construction or materials and Tenant approved
these costs before the execution of this Lease (the "Tenant Improvement Costs").
4.2 Provided Tenant is not in default under the Lease,
including this Improvement Agreement, Landlord shall contribute a one-time
tenant improvement allowance of the $768,000.00 ("TENANT IMPROVEMENT ALLOWANCE")
toward the cost of the initial Tenant Improvements. Provided Tenant is not then
in default under the Lease, including this Improvement Agreement, and upon (i)
Landlord's receipt and approval of applicable invoices evidencing the
performance of certain work, the order or delivery of certain supplies or
materials and/or the performance of certain labor which constitutes a Tenant
Improvement Cost, and (ii) the delivery of properly executed mechanics lien
releases from all applicable parties, as determined by Landlord, in form and
substance satisfactory to Landlord. Landlord shall disburse a portion of the
Tenant Improvement Allowance (not to exceed S150,000) to pay for the costs
identified in said invoices. The balance of the Tenant Improvement Allowance
shall be disbursed to Tenant upon completion of construction of the Tenant
Improvements and delivery of properly executed mechanics lien releases from the
Space Planner, contractor, subcontractors, labor suppliers and/or materialmen,
and upon receipt by Landlord of a certificate of completion executed by the
Space Planner and Tenant's contractor, in each case in form and substance
satisfactory to Landlord, and all appropriate bills and supporting documentation
for the work ordered by Tenant or its contractor or any subcontractor.
4.3 In the event the estimated cost of the design and
construction of the Tenant Improvements exceeds the Tenant Improvement
Allowance, Tenant shall be responsible for said excess costs. No credit shall be
given to Tenant if the cost of the Tenant Improvements is less than the Tenant
Improvement Allowance.
4.4 If the cost of the Tenant Improvements increases
after the Tenant's approval of the Plans due to the requirements of any
governmental agency or applicable Regulation or for any other reason (and either
the cost of the Tenant Improvements exceeds or such increase causes the cost of
the Tenant Improvements to exceed the Tenant Improvement Allowance), Tenant
shall be responsible for paving such increase.
4.5 If Tenant requests any change(s) in the Plans after
approval of the estimate of the cost of the Tenant Improvements and any such
requested changes are approved by Landlord in writing in Landlord's reasonable
discretion (and either the cost of the Tenant Improvements exceeds or such
change(s) causes the cost of the Tenant Improvements to exceed the Tenant
Improvement Allowance), Tenant shall pay for the cost of any increases such
approved change(s) will cause in the construction of the Tenant Improvements.
5. Construction of Tenant Improvements.
5.1 Within ten (10) days after Tenant's and Landlord's
approval of the Plans including the estimate of the cost of the Tenant
Improvements, Tenant shall cause the contractor to proceed to secure a building
permit and commence construction of the Tenant Improvements provided that the
Building has in Landlord's discretion reached the stage of construction where it
is appropriate to commence construction of the Tenant Improvements in the
Premises.
5.2 Tenant shall be responsible for obtaining all
governmental approvals to the full extent necessary for the construction and
installation of the Tenant Improvements and for Tenant's occupancy of the
Premises, in compliance with all applicable Regulations. Tenant shall employ
such contractor or contractors as shall be approved by Landlord
in writing to construct the
<PAGE>
Tenant Improvements in conformance with the approved Space Plan and Plans.
Landlord's approval of the contractor shall not be unreasonably withheld or
conditioned, and shall he granted or denied within seven (7) business days after
Tenant has submitted the name of the contractor, together with all supporting
documentation and information requested by Landlord in connection with
Landlord's review of said contractor. The construction contracts between Tenant
and the approved contractor shall be subject to Landlord's prior reasonable
approval and shall provide for progress payments. The contractor(s) shall be
duly licensed and Landlord's approval of the contractor(s) shall be conditioned,
among other things, upon the contractor's reputation for quality of work,
timeliness of performance, integrity and Landlord's prior experience with such
contractor.
5.3 Without limiting the provisions of Paragraph 35 of
the Lease, and subject lo Paragraph 7.1 below, Landlord shall not be liable for
any direct or indirect damages suffered by Tenant as a result of delays in
construction beyond Landlord's reasonable control, including, but not limited
to, delays due to strikes or unavailability of materials or labor, or delays
caused by Tenant (including delays by the Space Planner, the contractor or
anyone else performing services on behalf of Landlord or Tenant), but Landlord
will be liable for any out-of-pocket actual damages (but not consequential
damages, loss of use, loss of business opportunity or lost profits) incurred by
Landlord as a direct result of any such delays.
5.4 All work to be performed on the Premises by Tenant or
Tenant's contractor or agents shall be subject to the following conditions:
(a) Such work shall proceed upon Landlord's
written approval of Tenant's contractor, and public liability and property
damage insurance carried by Tenant's contractor, and shall further be subject to
the provisions of Paragraphs 12 and 27 of the Lease.
(b) All work shall be done in conformity with a
valid building permit when required, a copy of which shall be furnished to
Landlord before such work is commenced, and in any case, all such work shall be
performed in a good and workmanlike and first-class manner, and in accordance
with all applicable Regulations and the requirements and standards of any
insurance underwriting board, inspection bureau or insurance carrier insuring
the Premises pursuant to the Lease. Notwithstanding any failure by Landlord to
object to any such work, Landlord shall have no responsibility for Tenant's
failure to comply with all applicable Regulations. Tenant shall be responsible
for ensuring that construction and installation of the Tenant Improvements will
not affect the structural integrity of the Building.
(c) If required by Landlord or any lender of
Landlord, all work by Tenant or Tenant's contractor shall be done with union
labor in accordance with all union labor agreements applicable to the trades
being employed.
(d) Landlord or Landlord's agents shall have the
right to inspect the construction of the Tenant Improvements by Tenant during
the progress thereof. If Landlord shall give notice of faulty construction or
any other deviation from the approved Space Plan or Plans, Tenant shall inform
the contractor of such deviation and require the contractor to make corrections
promptly. However, neither the privilege herein granted to Landlord to make such
inspections, nor the making of such inspections by Landlord, shall operate as a
waiver of any right of Landlord to require good and workmanlike construction and
improvements erected in accordance with the approved Space Plan or Plans.
(e) Tenant shall use commercially reasonable
efforts to cause its contractor to complete the Tenant Improvements as soon as
reasonably possible and before the Scheduled Term Commencement
Date.
(f) Unless otherwise agreed in writing by
Landlord and Tenant, Tenant's construction of the Tenant Improvements shall
comply with the following: (i) the Tenant Improvements shall be constructed in
strict accordance with the approved Space Plan or Plans, as amended; (ii)
Tenant's and its contractor shall submit schedules of all work relating to the
Tenant Improvements to Landlord for Landlord's approval within two (2) business
days following the selection of the contractor and the approval of the Plans.
Landlord shall within five (5) business days after receipt thereof inform Tenant
of any changes which are necessary and Tenant's contractor shall adhere to such
corrected schedule; and (iii) Tenant shall abide by all rules made by Landlord
with respect to the use of freight, loading dock, and service elevators, storage
of materials, coordination of work with the contractors of other tenants, and
any other matter in connection with this Improvement Agreement, including,
without limitation, the construction of the Tenant Improvements.
(g) Tenant or Tenant's contractor or agents
shall arrange for necessary utility, hoisting and elevator service with
Landlord's contractor and shall pay such reasonable charges for such services as
may be charged by Tenant's or Landlord's contractor.
(h) Tenant's entry to the Premises for any
purpose, including, without limitation, inspection or performance of Tenant
construction by Tenant's agents, prior to the date Tenant's obligation to pay
rent commences shall be subject to all the terms and conditions of the Lease
except the payment of Rent. Tenant's entry shall mean entry by Tenant, its
officers, contractors, licensees, agents, servants, employees, guests, invitees,
or visitors.
(i) Tenant shall promptly reimburse Landlord
upon demand for any reasonable expense actually incurred by the Landlord by
reason of faulty work done by Tenant or its contractors or by reason of any
delays caused by such work, or by reason of inadequate clean-up.
<PAGE>
(j) Tenant's contractor and the
subcontractors utilized by Tenant's contractor shall guarantee to Tenant and for
the benefit of Landlord that the portion of the Tenant Improvements for which it
is responsible shall be free from any defects in workmanship and materials for a
period of not less than one (1) year from the date of completion thereof. Each
of Tenant's contractor and the subcontractors utilized by Tenant's contractor
shall be responsible for the replacement or repair, without additional charge,
of all work done or furnished in accordance with its contract that shall become
defective within one (1) year after the later to occur of (i) completion of the
work performed by such contractor or subcontractors and (ii) the
Term Commencement Date. The correction of such work shall include, without
additional charge, all additional expenses and damages incurred in connection
with such removal or replacement of all or any part of the Tenant Improvements,
and/or the Building and/or common areas that may be damaged or disturbed
thereby. All such warranties or guarantees as to materials or workmanship of or
with respect to the Tenant Improvements shall be contained in the construction
contract or subcontract and shall be written such that such guarantees or
warranties shall inure to the benefit of both Landlord and Tenant, as their
respective interests may appear, and can be directly enforced by either. Tenant
covenants to give to Landlord any assignment or other assurances which may be
necessary to effect such rights of direct enforcement.
(k) Commencing upon the execution of
the Lease, Tenant shall hold weekly meetings at a reasonable time with the Space
Planner and the contractor regarding the progress of the preparation of the
Plans and the construction of the Tenant Improvements, which meetings shall be
held at a location designated by Tenant, and Landlord and/or its agents shall
receive prior notice of, and shall have the right to attend, all such meetings,
and upon Landlord's request, certain of Tenant's contractors shall attend such
meetings. One such meeting each month shall include the review of contractor's
current request for payment.
6. Insurance Requirements.
6.1 All of Tenant's contractors shall carry compensation
insurance covering all of their respective employees, and shall also carry
public liability insurance, including property damage, all with limits, in form
and with companies as are required to be carried by Tenant as set forth in
Paragraph 8 of the Lease.
6.2 Tenant shall carry "Builder's All Risk" insurance in
an amount approved by Landlord covering the construction of the Tenant
Improvements, and such other insurance as Landlord may require, it being
understood and agreed that the Tenant Improvements shall be insured by Tenant
pursuant to Paragraph 8 of the Lease immediately upon completion thereof. Such
insurance shall be in amounts and shall include such extended coverage
endorsements as may be reasonably required by Landlord including, but not
limited to, the requirement that all of Tenant's contractors shall carry excess
liability and Products and Completed Operation coverage insurance, each in
amounts not less than $500,000 per incident, $1,000,000 in aggregate, and in
form and with companies as are required to be carried by Tenant as set forth in
Paragraph 8 of the Lease.
6.3 Certificates for all insurance carried pursuant to
this Improvement Agreement must comply with the requirements of Paragraph 8 of
the Lease and shall be delivered to Landlord before the commencement of
construction of the Tenant Improvements and before the contractor's equipment is
moved onto the site. In the event the Tenant Improvements are damaged by any
cause during the course of the construction thereof, Tenant shall immediately
repair the same at Tenant's sole cost and expense. Tenant's contractors shall
maintain all of the foregoing insurance coverage in force until the Tenant
Improvements are fully completed and accepted by Landlord. All policies carried
under this Paragraph 6 shall insure Landlord and Tenant, as their interests may
appear, as well as the contractors. All insurance maintained by Tenant's
contractors shall preclude subrogation claims by the insurer against anyone
insured thereunder. Such insurance shall provide that it is primary insurance as
respects the owner and that any other insurance maintained by owner is excess
and noncontributing with the insurance required hereunder. If Landlord has a
reasonable basis for concern regarding Tenant's ability to pay for its share of
the cost of the Tenant Improvements or Tenant's actual payment of its share of
said costs. Landlord may require Tenant to obtain a lien and completion bond or
some alternate form of security satisfactory to Landlord in an amount sufficient
to ensure the lien-free completion of the Tenant Improvements and naming
Landlord as a co-obligee.
7. Completion and Rental Commencement Date.
7.1 Tenant's obligation to pay Rent under the Lease shall
commence on the Term Commencement Date
notwithstanding anything to the contrary contained in Paragraph 2 of the Lease.
However, Landlord Delays (as defined below) and delays caused by Force Majeure
events (as described in Section 35 of the Lease) (not to exceed 30 days) shall
extend the Term Commencement Date, but only in the event that substantial
completion of the Tenant Improvements is delayed despite Tenant's reasonable
efforts to adapt and compensate for such delays. In addition, no Landlord Delays
shall be deemed to have occurred unless Tenant has provided notice, in
compliance with the Lease,
<PAGE>
to Landlord specifying that a delay shall be deemed to have occurred because of
actions, inactions or circumstances specified in the notice in reasonable
detail. If such actions, inactions or circumstances are not cured by Landlord
within one (1) business day after receipt of such notice ((the date of such
receipt being the "COUNT DATE"), and if such actions, inaction or circumstances
otherwise qualify as a Landlord Delay, then a Landlord Delay shall be deemed to
have occurred commencing as of the Count Date. The Term Commencement Date shall
be extended by one day for each day from the Count Date that a Landlord Delay
has occurred, as calculated as provided above. The term "Landlord Delays," as
such term may be used in this Improvement Agreement, shall mean any delays in
the completion of the Tenant Improvements which are due to any act or omission
of Landlord, its agents or contractors. Landlord Delays shall include, but shall
not be limited to: (i) delays in the giving of authorizations or approvals by
Landlord, (ii) delays due to the acts or failures to act, of Landlord, its
agents or contractors, where such acts or failures to act delay the completion
of the Tenant Improvements, provided that Tenant acts in a commercially
reasonable manner to mitigate any such delay, (iii) delays due to the
interference of Landlord, its agents or contractors with the completion of the
Tenant Improvements or the failure or refusal of any party to permit Tenant, its
agents and contractors, access to and use of the Building or any Building
facilities or services, including elevators and loading docks, which access and
use are necessary to complete the Tenant Improvements, (iv)
delays due to Landlord's failure to allow Tenant sufficient access to the
Building and/or the Premises during Tenant's move into the Premises, and (v)
delays in the completion of the Base Building Work.
7.2 Within ten (10) days after completion of
construction of the Tenant Improvements, Tenant shall cause a Notice of
Completion to be recorded in the office of the Recorder of the county in which
the Building is located in accordance with Section 3093 of the Civil Code of the
State of California or any successor statute, and shall furnish a copy thereof
to Landlord upon such recordation. If Tenant fails to do so, Landlord may
execute and file the same on behalf of Tenant as Tenant's agent for such
purpose, at Tenant's sole cost and expense. At the conclusion of construction,
(i) Tenant shall cause the Space Planner and the contractor (i) to update the
approved working drawings as necessary to reflect all changes made to the
approved working drawings during the course of construction, (ii) to certify to
the best of their knowledge that the "record-set" of as-built drawings are true
and correct, which certification shall survive the expiration or termination of
the Lease, and (c) to deliver to Landlord two (2) sets of copies of such record
set of drawings within ninety (90) days following issuance of a certificate of
occupancy for the Premises, and (iii) Tenant shall deliver to Landlord a copy of
all warranties, guarantees, and operating manuals and information relating to
the improvements, equipment, and systems in the Premises.
7.3 A default under this Improvement Agreement
shall constitute a default under the Lease, and the parties shall be entitled to
all rights and remedies under the Lease in the event of a default hereunder by
the other party (notwithstanding that the Term thereof has not commenced).
7.4 Without limiting the "as-is" provisions of
the Lease, except for the Tenant Improvements, if any, and Base Building Work to
be constructed by Landlord pursuant to this Improvement Agreement. Tenant
accepts the Premises in its "as-is" condition and acknowledges that it has had
an opportunity to inspect the Premises prior to signing the Lease.
<PAGE>
SCHEDULE 1
TO EXHIBIT C
BASE BUILDING WORK
- Remove debris and unnecessary equipment from roof and install new roof
membrane, as reasonably determined by Landlord.
- All existing HVAC equipment shall be serviced, replaced (to
the extent Landlord determines is necessary) and maintained
in good workinq order.
- Concrete slab shall be bead blasted and epoxy sealed in areas where
floor tile or sheet goods are to be installed, only to the extent (as
reasonably determined by Landlord) that moisture levels are greater
than acceptable to sheet good or tile manufacturers to obtain
customary warranties, or the moisture levels prohibit Tenant from
achieving appropriate FDA validation.
- Separate the electrical services for the Premises to a single existing
electrical meter and install a meter on water service to record
consumption for monthly invoicing and reimbursement.
- Upgrade the common lobby finishes.
- Bring entrance to common lobby, elevator, second floor vestibule and
common lobby restrooms into code compliance only to the extent required
by governmental agencies triggered as a direct result of the completion
of the Tenant Improvements.
- Clean and sanitize all existing air ducts, as reasonably determined by
Landlord to be necessary.
- Brine current drop-ceiling to OSHA safety compliance standards, but
only to the extent it is required by any governmental agency with
jurisdiction over the Project as a direct result of the completion of
the Tenant Improvements.
<PAGE>
SCHEDULE 2
TO EXHIBIT C
BUILDING STANDARDS
The following constitutes the Building Standard tenant
improvements ("STANDARDS") in the quantities specified:
(to be provided)