California-Carlsbad-2110 Rutherford Road Lease - Blackmore Airport Centre and CancerVax Corp.
[AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION LOGO]
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE-NET
(Do not use this form for Multi-Tenant Property)
1. BASIC PROVISIONS ("BASIC PROVISIONS")
1.1 PARTIES: This Lease ("LEASE"), dated for reference purposes only,
August 31, 2001 is made by and between BLACKMORE AIRPORT CENTRE, A CALIFORNIA
LIMITED PARTNERSHIP ____________________________________________________________
______________________________________________________________________("LESSOR")
AND CANCERVAX CORPORATION ______________________________________________________
_____________________________________________________________________("LESSEE"),
(collectively the "PARTIES", or individually a "PARTY").
1.2 PREMISES: That certain real property, including all improvements
therein or to be provided by Lessor under the terms of this Lease, and commonly
known by the street address of 2110 Rutherford Road, Carlsbad located, in the
County of San Diego, State of California, and generally described as (describe
briefly the nature of the property) an approximately 57,365 square foot
freestanding, single-tenant, concrete tilt-up building to be built in shell
condition situated on 3.693 acres of land with 210 onsite parking spaces
("PREMISES"). (See Paragraph 2 for further provisions.)
1.3 TERM: Ten (10) years and -0- months ("ORIGINAL TERM") commencing
July 1, 2002 ("COMMENCEMENT DATE") and ending June 30, 2012 ("EXPIRATION DATE").
(See Paragraph 3 for further provisions.)
1.4 EARLY POSSESSION: Upon Substaintial Completion of the Tenant
Improvements (Early Possession Date"). (See Paragraphs 3.2 and 3.3 for further
provisions.) Provided Lessor is in receipt of first months rent and security
deposit.
1.5 BASE RENT: $112,000.00 per month ("BASE RENT"), payable on the
first day of each month commencing July 1, 2002 (See Paragraph 4 for further
provisions.)
[X] If this box is checked, there are provisions in this Lease for the Base Rent
to be adjusted.
1.6 BASE RENT DUE MAY 1,2002: $ 112,000.00 as Base Rent for the period
July 1-31, 2002
1.7 SECURITY DEPOSIT: $ see Paragraph 51 ("SECURITY DEPOSIT"). (See
Paragraph 5 for further provisions.)
1.8 PERMITTED USE: Corporate headquarters, R&D lab space and pilot
manufacturing plant for a biotech company and other legal, related
uses. (See Paragraph 6 for further provisions.)
1.9 INSURING PARTY: Lessor is the "INSURING PARTY" unless otherwise
stated herein. (See Paragraph 8 for further provisions.)
1.10 REAL ESTATE BROKERS: The following real estate brokers
(collectively, the "BROKERS") and brokerage relationships exist in this
transaction and are consented to by the Parties (check applicable boxes):
Blackmore & Associates, Inc. represents
[X] Lessor exclusively ("LESSOR'S BROKER"); [ ] both Lessor and Lessee, and
Burnham Real Estate Services represents
[X] Lessee exclusively ("LESSEE'S BROKER"); [ ] both Lessee and Lessor. (See
Paragraph 15 for further provisions.)
1.11 GUARANTOR. The obligations of the Lessee under this Lease are to
be guaranteed by N/A ("GUARANTOR"). (See Paragraph 37 for further provisions.)
1.12 ADDENDA. Attached hereto is an Addendum or Addenda consisting of
Paragraphs 49 through 64 and Exhibits A - G all of which constitute a part of
this Lease.
2. PREMISES.
2.1 LETTING. Lessor hereby leases to Lessee, and Lessee hereby leases
from Lessor, the Premises, for the term, at the rental, and upon all of the
terms, covenants and conditions set forth in this Lease. Unless otherwise
provided herein, any statement of square footage set forth in this Lease, or
that may have been used in calculating rental, is an approximation which Lessor
and Lessee agree is reasonable and the rental based thereon is not subject to
revision whether or not the actual square footage is more or less.
2.2 CONDITION. Lessor shall deliver the Premises to Lessee clean and
free of debris and Hazardous Substance Conditions on the Commencement Date and
warrants to Lessee that the existing plumbing, fire sprinkler system, lighting,
air conditioning, heating, and loading doors, if any, in the Premises, other
than those constructed by Lessee, shall be in good operating condition on the
Commencement Date. If a non-compliance with said warranty exists as of the
Commencement Date, Lessor shall, except as otherwise provided in this Lease,
promptly after receipt of written notice from Lessee setting forth with
specificity the nature and extent of such non-compliance, rectify same at
Lessor's expense. If Lessee does not give Lessor written notice of a
non-compliance with this warranty within One (1) year after the Commencement
Date, correction of that non-compliance shall be the obligation of Lessee at
Lessee's sole cost and expense.
2.3 COMPLIANCE WITH COVENANTS, RESTRICTIONS AND BUILDING CODE. Lessor
warrants to Lessee that the improvements on the Premises comply with all
applicable covenants or restrictions of record and applicable building codes,
regulations and ordinances in effect on the Commencement Date. Said warranty
does not apply to the use to which Lessee will put the Premises or to any
Alterations or Utility Installations (as defined In Paragraph 7.3 (a)) made or
to be made by Lessee. If the Premises do not comply with said warranty, Lessor
shall, except as otherwise provided in this Lease, promptly after receipt of
written notice from Lessee setting forth with specificity the nature and extent
of such non-compliance, rectify the same at Lessor's expense. If Lessee does not
give Lessor written notice of a non-compliance with this warranty within six (6)
months following the Commencement Date, correction of that non-compliance shall
be the obligation of Lessee at Lessee's sole cost and expense.
2.4 ACCEPTANCE OF PREMISES. Lessee hereby acknowledges: (a) that it has
been advised by the Brokers to satisfy itself with respect to the
present and future suitability of the Premises for Lessee's intended use, (b)
that Lessee has made such Investigation as it deems necessary with reference to
such matters and assumes all responsibility therefor as the same relate to
Lessee's occupancy of the Premises and/or the term of this Lease, and (c) that
neither Lessor, nor any of Lessor's agents, has made any oral or written
representations or warranties with respect to the said matters other than as set
forth in this Lease.
2.5 LESSEE PRIOR OWNER/OCCUPANT. The warranties made by Lessor in this
Paragraph 2 shall be of no force or effect if immediately prior to the date set
forth in Paragraph 1.1 Lessee was the owner or occupant of the Premises. In such
event, Lessee shall, at Lessee's sole cost and expense, correct any
non-compliance of the Premises with said warranties.
3. TERM.
3.1 TERM. The Commencement Date, Expiration Date and Original Term of
this Lease are as specified in Paragraph 1.3.
3.2 EARLY POSSESSION. If Lessee totally or partially occupies the
Premises prior to the Commencement Date, the obligation to pay Base Rent shall
be abated for the period of such early possession. All other terms of this
Lease, however, (including but not limited to the obligations to pay Real
Property Taxes and insurance premiums and to maintain the Premises) shall be in
effect during such period. Any such early possession shall not affect nor
advance the Expiration Date of the Original Term.
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3.3 DELAY IN POSSESSION. If for any reason Lessor cannot deliver
possession of the Premises to Lessee as agreed herein by the Early Possession
Date, if one is specified in Paragraph 1.4, or, if no Early Possession Date is
specified, by the Commencement Date, Lessor shall not be subject to any
liability therefor, nor shall such failure affect the validity of this Lease, or
the obligations of Lessee hereunder, or extend the term hereof, but in such
case, Lessee shall be obligated to pay rent and perform any other
obligation of Lessee under the terms of this Lease until Lessor delivers
possession of the Premises to Lessee. (See Paragraph 49 a.)
4. RENT.
4.1 BASE RENT. Subject to the terms and conditions of Paragraph 50
Lessee shall cause payment of Base Rent and other rent or charges, as the same
may be adjusted from time to time, to be received by Lessor in lawful money of
the United States, without offset or deduction, on or before the day on which it
is due under the terms of this Lease. Base Rent and all other rent and charges
for any period during the term hereof which is for less than one (1) full
calendar month shall be prorated based upon the actual number of days of the
calendar month involved. Payment of Base Rent and other charges shall be made to
Lessor at its address stated herein or to such other persons or at such other
addresses as Lessor may from time to time designate in writing to Lessee.
5. SECURITY DEPOSIT. Subject to the terms and conditions of Paragraph 51 Lessee
shall deposit with Lessor upon execution hereof the Security Deposit in the form
of a Letter of On set forth in Paragraph 51 as security for Lessee's faithful
performance of Lessee's obligations under this Lease. If Lessee fails to pay
Base Rent or other rent or charges due hereunder, or otherwise Defaults under
this Lease (as defined In Paragraph 13.1), Lessor may use, apply or retain all
or any portion of said Security Deposit for the payment of any amount due Lessor
or to reimburse or compensate Lessor for any liability, cost, expense, loss or
damage (including attorneys' fees) which Lessor may sutter or incur by reason
thereof. If Lessor uses or applies all or any portion of said Security Deposit,
Lessee shall within ten (10) days after written request therefor deposit moneys
with Lessor sufficient to restore said Security Deposit to the full amount
required by this Lease. Lessor shall not be required to keep all or any part of
the Security Deposit separate from its general accounts. Lessor shall, at the
expiration or earlier termination of the term hereof and after Lessee has
vacated the Premises, return to Lessee (or, at Lessor's option, to the last
assignee, if any, of Lessee's interest herein), that portion of the Security
Deposit not used or applied by Lessor. Unless otherwise expressly agreed in
writing by Lessor, no part of the Security Deposit shall be considered to be
held in trust, to bear interest or other increment for its use, or to be
prepayment for any moneys to be paid by Lessee under this Lease.
6. USE.
6.1 USE. Lessee shall use and occupy the Premises only for the purposes
set forth in Paragraph 1.8, or any other use which is comparable thereto, and
for no other purpose. Lessee shall not use or permit the use of the Premises in
a manner that creates waste or a nuisance, or that disturbs owners and/or
occupants of, or causes damage to, neighboring premises or properties.
6.2 HAZARDOUS SUBSTANCES.
(a) REPORTABLE USES REQUIRE CONSENT. The term "HAZARDOUS
SUBSTANCE" as used in this Lease shall mean any product, substance, chemical,
material or waste whose presence, nature, quantity and/or intensity of
existence, use, manufacture, disposal, transportation, spill, release or effect,
either by itself or in combination with other materials expected to be on the
Premises, is either: (i) potentially injurious to the public health, safety or
welfare, the environment or the Premises, (ii) regulated or monitored by any
governmental authority, or (iii) a basis for liability of Lessor to any
governmental agency or third party under any applicable statute or common law
theory. Hazardous Substance shall include, but not be limited to, hydrocarbons,
petroleum, gasoline, crude oil or any products, by-products or fractions
thereof. Lessee shall not engage in any activity in, on or about the Premises
which constitutes a Reportable Use (as hereinafter defined) of Hazardous
Substances and shall comply in a timely manner (at Lessee's sole cost and
expense) with all Applicable Law (as defined in Paragraph 6.3). "REPORTABLE USE"
shall mean (i) the installation or use of any above or below ground storage
tank, (ii) the generation, possession, storage, use, transportation, or disposal
of a Hazardous Substance that requires a permit from, or with respect to which a
report, notice, registration or business plan is required to be filed with, any
governmental authority. Reportable Use shall also include Lessee's being
responsible for the presence in, on or about the Premises of a Hazardous
Substance with respect to which any Applicable Law requires that a notice be
given to persons entering or occupying the Premises or neighboring properties.
Notwithstanding the foregoing, Lessee may, without Lessor's prior consent, but
in compliance with all Applicable Law, use any ordinary and customary materials
reasonably required to be used by Lessee in the normal course of Lessee's
business permitted on the Premises, so long as such use is not a Reportable Use
and does not expose the Premises or neighboring properties to any meaningful
risk of contamination or damage or expose Lessor to any liability therefor. In
addition, Lessor may (but without any obligation to do so) condition its consent
to the use or presence of any Hazardous Substance, activity or storage tank by
Lessee upon Lessee's giving Lessor such additional assurances as Lessor, in its
reasonable discretion, deems necessary to protect itself, the public, the
Premises and the environment against damage, contamination or injury and/or
liability therefrom or therefor, including, but not limited to, the installation
(and removal on or before Lease expiration or earlier termination) of reasonably
necessary protective modifications to the Premises (such as concrete
encasements) and/or the deposit of an additional Security Deposit under
Paragraph 5 hereof.
(b) DUTY TO INFORM LESSOR. If Lessee knows, or has reasonable
cause to believe, that a Hazardous Substance, or a condition involving or
resulting from same, has come to be located in, on, under or about the Premises,
other than as previously consented to by Lessor, Lessee shall Immediately give
written notice of such fact to Lessor. Lessee shall also immediately give Lessor
a copy of any statement, report, notice, registration, application, permit,
business plan, license, claim, action or proceeding given to, or received from,
any governmental authority or private party, or persons entering or occupying
the Premises, concerning the presence, spill, release, discharge of, or exposure
to, any Hazardous Substance or contamination in, on, or about the Premises,
including but not limited to all such documents as may be involved in any
Reportable Uses involving the Premises or in violation of applicable laws.
(c) INDEMNIFICATION. Lessee shall indemnify, protect, defend
and hold Lessor, its agents, employees, lenders and ground lessor, if any, and
the Premises, harmless from and against any and all loss of rents and/or
damages, liabilities, judgments, costs, claims, liens, expenses, penalties,
permits and attorney's and consultant's fees arising out of or involving any
Hazardous Substance or storage tank brought onto the Premises by or for Lessee
or under Lessee's control. Lessee's obligations under this Paragraph 6 shall
include, but not be limited to, the effects of any contamination or injury to
person, property or the environment created or suffered by Lessee, and the cost
of investigation (including consultant's and attorney's fees and testing),
removal, remediation, restoration and/or abatement thereof, or of any
contamination therein involved, and shall survive the expiration or earlier
termination of this Lease. No termination, cancellation or release agreement
entered into by Lessor and Lessee shall release Lessee from its obligations
under this Lease with respect to Hazardous Substances or storage tanks, unless
specifically so agreed by Lessor In writing at the time of such agreement. (See
Paragraph 49)
6.3 LESSEE'S COMPLIANCE WITH LAW. Except as otherwise provided in this
Lease, Lessee, shall, at Lessee's sole cost and expense, fully, diligently and
in a timely manner, comply with all "APPLICABLE LAW," which term is used in this
Lease to include all laws, rules, regulations, ordinances, directives,
covenants, easements and restrictions of record, permits, the requirements of
any applicable fire insurance underwriter or rating bureau, and the
recommendations of Lessor's engineers and/or consultants, relating in any manner
to the Premises (including but not limited to matters pertaining to (i)
industrial hygiene, (ii) environmental conditions on, in, under or about the
Premises, including soil and groundwater conditions, and (iii) the use,
generation, manufacture, production, installation, maintenance, removal,
transportation, storage, spill or release of any Hazardous Substance or storage
tank), now in effect or which may hereafter come into effect, and whether or not
reflecting a change in policy from any previously existing policy. Lessee shall,
within five (5) days after receipt of Lessor's written request, provide Lessor
with copies of all documents and information, including, but not limited to,
permits, registrations, manifests, applications, reports and certificates,
evidencing Lessee's compliance with any Applicable Law reasonably specified by
Lessor, and shall immediately upon receipt, notify Lessor In writing (with
copies of any documents involved) of any threatened or actual claim, notice,
citation, warning, complain or report pertaining to or involving failure by
Lessee or the Premises to comply with any Applicable Law.
6.4 INSPECTION; COMPLIANCE. Lessor and Lessor's Lender(s) (as defined
in Paragraph 8.3(a)) shall have the right to enter the Premises at any time, in
the case of an emergency, and otherwise at reasonable times upon at least
twenty-four (24) hours prior notice for the purpose of inspecting the condition
of the Premises and for verifying compliance by Lessee with this Lease and all
Applicable Laws (as defined in Paragraph 6.3), and to employ experts and/or
consultants in connection therewith and/or to advise Lessor with respect to
Lessee's activities, Including but not limited to the installation, operation,
use, monitoring, maintenance, or removal of any Hazardous Substance or storage
tank on or from the Premises. The costs and expenses of any such Inspections
shall be paid by the party requesting same, unless a Default or Breach of this
Lease, violation of Applicable Law or a contamination, caused or materially
contributed to by Lessee is found to exist or be imminent, or unless the
inspection is requested or ordered by a governmental authority as the result of
any such existing or imminent violation or contamination. In any such case,
Lessee shall upon request reimburse Lessor or Lessor's Lender, as the case may
be, for the costs and expenses of such inspections and a certified copy of such
report shall be provided to Lessee.
7. MAINTENANCE; REPAIRS; Utility Installations; Trade Fixtures and Alterations.
7.1 LESSEE'S OBLIGATIONS.
(a) Subject to the provisions of Paragraphs 2.2 (Lessor's
warranty as to condition), 2.3 (Lessor's warranty as to compliance with
covenants, etc), 7.2 (Lessor's obligations to repair), 9 (damage and
destruction), and 14 (condemnation), Lessee shall, at Lessee's sole cost and
expense and at all times, keep the Premises and every part thereof in good
order, condition and repair, structural and non-structural (whether or not such
portion of the Premises requiring repair, or the means of repairing the same,
are reasonably or readily accessible to Lessee, and whether or not the need for
such repairs occurs
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as a result of Lessee's use, any prior use, the elements or the age of such
portion of the Premises), including, without limiting the generality of the
foregoing, all equipment or facilities serving the Premises, such as plumbing,
heating, air conditioning, ventilating, electrical, lighting facilities,
boilers, fired or unfired pressure vessels, fire sprinkler and/or standpipe and
hose or other automatic fire extinguishing system, including fire alarm and/or
smoke detection systems and equipment, fire hydrants, fixtures, walls (interior
and exterior), foundations, ceilings, roofs, floors, windows, doors, plate
glass, skylights, landscaping, driveways, parking lots, fences, retaining walls,
signs, sidewalks and parkways located in, on, about, or adjacent to the
Premises. Lessee shall not cause or permit any Hazardous Substance to be spilled
or released in, on, under or about the Premises (including through the plumbing
or sanitary sewer system) and shall promptly, at Lessee's expense, take all
investigatory and/or remedial action reasonably recommended, whether or not
formally ordered or required, for the cleanup of any contamination of, and for
the maintenance, security and/or monitoring of; the Premises, the elements
surrounding same, or neighboring properties, that was caused or materially
contributed to by Lessee, or pertaining to or involving any Hazardous Substance.
and/or storage tank brought onto the Premises by or for Lessee or under its
control. Lessee, in keeping the Premises in good order, condition and repair,
shall exercise and perform good maintenance practices. Lessee's obligations
shall include restorations, replacements or renewals when necessary to keep the
Premises and all improvements thereon or a part thereof in good order, condition
and stale of repair. If Lessee occupies the Premises for seven (7) years or
more, Lessor may require Lessee to repaint the exterior of the buildings on the
Premises as reasonably required, but not more frequently than once every seven
(7) years.
7.2 LESSOR'S OBLIGATIONS. Except for the warranties and agreements of
Lessor contained in Paragraphs 2.2 (relating to condition of the Premises), 2.3
(relating to compliance with covenants, restrictions and building code), 9
(relating to destruction of the Premises) and 14.(relating to condemnation of
the Premises), and Lessor's obligation to repair and maintain the structural
portion of the building (exterior walls, roof structure and foundations), it is
intended by the Parties hereto that Lessor have no obligation, in any manner
whatsoever, to repair and maintain the Premises, the improvements located
thereon, or the equipment therein, whether structural or non structural, all of
which obligations are intended to be that of the Lessee under Paragraph 7.1
hereof. It is the intention of the Parties that the terms of this Lease govern
the respective obligations of the Parties as to maintenance and repair of the
Premises. Lessee and Lessor expressly waive the benefit of any statute now or
hereafter in effect to the extent it is inconsistent with the terms of this
Lease with respect to, or which affords Lessee the right to make repairs at the
expense of Lessor or to terminate this Lease by reason of, any needed repairs.
(See Paragraph 49 c.)
7.3 UTILITY INSTALLATIONS; TRADE FIXTURES; ALTERATIONS.
(a) DEFINITIONS; CONSENT REQUIRED. The term "UTILITY
INSTALLATIONS" is used in this Lease to refer to all carpeting, window
coverings, air lines, power panels, electrical distribution, security, fire
protection systems, communication systems, lighting fixtures, heating,
ventilating, and air conditioning equipment, plumbing, and fencing in, on or
about the Premises. The term "TRADE FIXTURES" shall mean Lessee's machinery and
equipment that can be removed without doing material damage lo the Premises. The
term "Alterations" shall mean any modification of the improvements on the
Premises from that which are provided by Lessor under the terms of this Lease,
other than Utility Installations or Trade Fixtures, whether by addition or
deletion. "LESSEE OWNED ALTERATIONS AND/OR UTILITY INSTALLATIONS" are defined as
Alterations and/or Utility Installations made by Lessee that are not yet owned
by Lessor as defined In Paragraph 7.4 (a). Lessee shall not make any Alterations
or Utility Installations in, on, under or about the Premises without Lessor's
prior written consent which shall not be unreasonably withheld, conditioned or
delayed Lessee may, however, after notifying Lessor in advance in writing make
non-structural Utility Installations to the interior of the Premises (excluding
the roof), as long as they are not visible from the outside, do not involve
puncturing, relocating or removing the roof or any existing walls, and the
cumulative cost thereof during the term of this Lease as extended does not
exceed $ 100,000. (See Paragraph 49 d.)
(b) CONSENT. Any Alterations or Utility Installations that
Lessee shall desire to make and which require the consent of the Lessor shall be
presented to Lessor in written form with proposed detailed plans. All consents
given by Lessor, whether by virtue of Paragraph 7.3(a) or by subsequent specific
consent, shall be deemed conditioned upon: (i) Lessee's acquiring all applicable
permits required by governmental authorities, (ii) the furnishing of copies of
such permits together with a copy of the plans and specifications for the
Alteration or Utility Installation to Lessor prior lo commencement of the work
thereon, and (iii) the compliance by Lessee with all conditions of said permits
in a prompt and expeditious manner. Any Alterations or Utility Installations by
Lessee during the term of this Lease shall be done in a good and workmanlike
manner, with good and sufficient materials, and in compliance with all
Applicable Law. Lessee shall promptly upon completion thereof furnish Lessor
with as-built plans and specifications therefor. Lessor may (but without
obligation to do so) condition its consent to any requested Alteration or
Utility Installation that costs $100,000 or more upon Lessee's providing Lessor
with a lien and completion bond in an amount equal to one and one-hall times the
estimated cost of such Alteration or Utility Installation and/or upon Lessee's
posting an additional Security Deposit with Lessor under Paragraph 36 hereof.
$100,000
(c) Indemnification. Lessee shall pay, when due, all claims
for labor or materials furnished or alleged to have been furnished to or for
Lessee at or for use on the Premises, which claims are or may be secured by any
mechanics' or materialmen's lien against the Premises or any interest therein.
Lessee shall give Lessor not less than ten (10) days' notice prior to the
commencement of any work in, on or about the Premises, and Lessor shall have the
right to post notices of non-responsibility in or on the Premises as provided by
law. If Lessee shall, in good faith, contest the validity of any such lien,
claim or demand, then Lessee shall, at its sole expense defend and protect
itself, Lessor and the Premises against the same and shall pay and satisfy any
such adverse judgment that may be rendered thereon before the enforcement
thereof against the Lessor or the Premises. If Lessor shall require, Lessee
shall furnish to Lessor a surely bond satisfactory to Lessor in an amount equal
to one and one-half times the amount of such contested lien claim or demand,
Indemnifying Lessor against liability for the same, as required by law for the
holding of the Premises free from the effect of such lien or claim. In addition,
Lessor may require Lessee to pay Lessor's reasonable attorney's fees and costs
in participating in such action if Lessor shall decide it is to its best
interest to do so.
7.4 OWNERSHIP; REMOVAL; SURRENDER; AND RESTORATION.
(a) OWNERSHIP. Subject to Lessor's right to require their
removal or become the owner thereof as hereinafter provided in this Paragraph
7.4, all Alterations and Utility Additions made to the Premises by Lessee shall
be the property of and owned by Lessee, but considered a part of the Premises.
Lessor may, at any time and at its option, elect in writing to Lessee to be the
owner of all or any specified part of the Lessee Owned Alterations, and Utility
Installations. Unless otherwise instructed per subparagraph 7.4 (b) hereof, all
Lessee Owned Alterations and Utility Installations shall, at the expiration or
earlier termination of this Lease, become the property of Lessor and remain upon
and be surrendered by Lessee with the Premises.
(b) REMOVAL. Unless otherwise agreed in writing, Lessor may
(at the time Lessor gives its consent to the installation) require that any or
all Lessee Owned Alterations or Utility Installations be removed by the
expiration or earlier termination of this Lease, notwithstanding their
installation may have been consented to by Lessor. Lessor may require the
removal at any time of all or any part of any Lessee Owned Alterations or
Utility Installations made without the required consent of Lessor.
(c) SURRENDER/RESTORATION. Lessee shall surrender the Premises
by the end of the last day of the Lease term or any earlier termination date,
with all of the improvements, parts and surfaces thereof clean and free of
debris and in good operating order, condition and state of repair, ordinary wear
and tear excepted and subject to Paragraph 9 hereof "ORDINARY WEAR AND TEAR"
shall not include any damage or deterioration that would have been prevented by
good maintenance practice or by Lessee performing all of its obligations under
this Lease. Except as otherwise agreed or specified in writing by Lessor, the
Premises, as surrendered, shall include the Utility Installations. The
obligation of Lessee shall include the repair of any damage occasioned by the
installation, maintenance or removal of Lessee's Trade Fixtures, furnishings,
equipment, and Alterations and/or Utility Installations, as well as the removal
of any storage tank installed by or for Lessee, and the removal, replacement, or
remediation of any soil, material or ground water contaminated by Lessee, all as
may then be required by Applicable Law and/or good practice. Lessee's Trade
Fixtures shall remain the property of Lessee and shall be removed by Lessee
subject to its obligation to repair and restore the Premises per this Lease.
(see Paragraph 49 e.)
8. INSURANCE; INDEMNITY.
8.1 PAYMENT FOR INSURANCE. Regardless of whether the Lessor or Lessee
is the Insuring Party, Lessee shall pay for all insurance required under this
Paragraph 8 except to the extent of the cost attributable to liability insurance
carried by Lessor in excess of $1,000,000 per occurrence. Premiums for policy
periods commencing prior to or extending beyond the Lease term shall be prorated
to correspond to the Lease term. Payment shall be made by Lessee to Lessor
within ten (10) days following receipt of an invoice for any amount due.
8.2 LIABILITY INSURANCE.
(a) CARRIED BY LESSEE. Lessee shall obtain and keep in force
during the term of this Lease a Commercial General Liability policy of insurance
protecting Lessee and Lessor (as an additional insured) against claims for
bodily injury, personal injury and property damage based upon, involving or
arising out of the ownership, use, occupancy or maintenance of the Premises and
all areas appurtenant thereto. Such insurance shall be on an occurrence basis
providing single limit coverage in an amount not less than $1,000,000 per
occurrence with an "Additional Insured-Managers or Lessors of Premises"
Endorsement and contain the "Amendment of the Pollution Exclusion" for damage
caused by heat, smoke or fumes from a hostile fire. The policy shall not contain
any intra-insured exclusions as between insured persons or organizations, but
shall include coverage for liability assumed under this Lease as an "insured
contract" for the performance of Lessee's indemnity obligations under this
Lease. The limits ot said insurance required by this Lease or as carried by
Lessee shall not, however, limit the liability of Lessee nor relieve Lessee of
any obligation hereunder. All insurance to be carried by Lessee shall be primary
to and not contributory with any similar insurance carried by Lessor, whose
insurance shall be considered excess insurance only.
(b) CARRIED BY LESSOR. In the event Lessor Is the Insuring
Party, Lessor shall also maintain liability insurance described in Paragraph
8.2(a), above, in addition to, and not in lieu of, the insurance required to be
maintained by Lessee. Lessee shall not be named as an additional insured
therein.
8.3 PROPERTY INSURANCE--BUILDING, IMPROVEMENTS AND RENTAL VALUE.
(a) BUILDING AND IMPROVEMENTS. The Insuring Party shall obtain
and keep in force during the term of this Lease a policy or policies in the name
of Lessor, with loss payable to Lessor and to the holders of any mortgages,
deeds of trust or ground leases on the Premises ("Lender(s)"), insuring loss
<PAGE>
or damage to the Premises. The amount of such insurance shall be equal to the
full replacement cost of the Premises, as the same shall exist from time to
time, or the amount required by Lenders, but in no event more than the
commercially reasonable and available insurable value thereof if, by reason of
the unique nature or age of the improvements involved, such latter amount is
less than full replacement cost. If Lessor is the Insuring Party, however,
Lessee Owned Alterations and Utility Installations shall be insured by Lessee
under Paragraph 8.4 rather than by Lessor. If the coverage is available and
commercially appropriate, such policy or policies shall insure against all risks
of direct physical loss or damage (except the perils of flood and/or earthquake
unless required by a Lender), including coverage for any additional costs
resulting from debris removal and reasonable amounts of coverage for the
enforcement of any ordinance or law regulating the reconstruction or replacement
of any undamaged sections of the Premises required to be demolished or removed
by reason of the enforcement of any building, zoning, safely or land use laws as
the result of a covered cause of loss. Said policy or policies shall also
contain an agreed valuation provision in lieu of any coinsurance clause, waiver
of subrogation, and inflation guard protection causing an increase in the annual
property insurance coverage amount by a factor of not less than the adjusted
U.S. Department of Labor Consumer Price Index for All Urban Consumers for the
city nearest to where the Premises are located. If such insurance coverage has a
deductible clause, the deductible amount shall not exceed $1,000 per occurrence,
and Lessee shall be liable for such deductible amount in the event of an Insured
Loss, as defined in Paragraph 9.1(c).
(b) RENTAL VALUE. The Insuring Party shall, in addition,
obtain and keep in force during the term of this Lease a policy or policies in
the name of Lessor, with loss payable to Lessor and Lender(s), insuring the loss
of the full rental and other charges payable by Lessee to Lessor under this
Lease for one (1) year (including all real estate taxes, insurance costs, and
any scheduled rental increases). Said insurance shall provide that in the event
the Lease is terminated by reason of an insured loss, the period of indemnity
for such coverage shall be extended beyond the date of the completion of repairs
or replacement of the Premises, to provide for one full year's loss of rental
revenues from the date of any such loss. Said insurance shall contain an agreed
valuation provision in lieu of any coinsurance clause, and the amount of
coverage shall be adjusted annually to reflect the projected rental income,
property taxes, insurance premium costs and other expenses, if any, otherwise
payable by Lessee, for the next twelve (12) month period. Lessee shall be liable
for any deductible amount in the event of such loss.
(d) TENANT'S IMPROVEMENTS. If the Lessor is the Insuring
Party, the Lessor shall not be required to insure Lessee Owned Alterations and
Utility Installations unless the item in question has become the property of
Lessor under the terms of this Lease. If Lessee is the Insuring Party, the
policy carried by Lessee under this Paragraph 8.3 shall insure Lessee Owned
Alterations and Utility Installations.
8.4 LESSEE'S PROPERTY INSURANCE. Subject to the requirement of
Paragraph 8.5, Lessee at its cost shall either by separate policy or, at
Lessor's option, by endorsement to a policy already carried, maintain insurance
coverage on all of Lessee's personal property, Lessee Owned Alterations and
Utility Installations in, on, or about the Premises similar in coverage to that
carried by the Insuring Party under Paragraph 8.3. Such Insurance shall be full
replacement cost coverage with a deductible of not to exceed $50,000 per
occurrence. The proceeds from any such insurance shall be used by Lessee for the
replacement of personal property or the restoration of Lessee Owned Alterations
and Utility Installations. Lessee shall be the Insuring Party with respect to
the insurance required by this Paragraph 8.4 and shall provide Lessor with
written evidence that such insurance is in force.
8.5 INSURANCE POLICIES. Insurance required, hereunder shall be in
companies duly licensed to transact business in the state where the Premises are
located, and maintaining during the policy term a "General Policyholders Rating"
of at least B+, V, or such other rating as may be required by a Lender having a
lien on the Premises, as set forth in the most current issue of "Best's
Insurance Guide". Lessee shall not do or permit to be done anything which shall
invalidate the insurance policies referred to in this paragraph 8. If Lessee is
the Insuring Party, Lessee shall cause to be delivered to Lessor certified
copies of policies of such insurance or certificates evidencing the existence
and amounts of such insurance with the insureds and loss payable clauses as
required by this Lease. No such policy shall be cancellable or subject to
modification except after thirty (30) days prior written notice to Lessor.
Lessee shall at least thirty (30) days prior to the expiration of such policies,
furnish Lessor with evidence of renewals or "insurance binders" evidencing
renewal thereof, or Lessor may order such insurance and charge the cost thereof
to Lessee, which amount shall be payable by Lessee to Lessor upon demand. If the
Insuring Party shall fail to procure and maintain the insurance required to be
carried by the Insuring Party under this Paragraph 8, the other Party may, but
shall not be required to, procure and maintain the same, but at Lessee's
expense.
8.6 WAIVER OF SUBROGATION. Without affecting any other rights or
remedies Lessee and Lessor ("WAIVING PARTY") each hereby release and relieve
the other, and waive their entire right to recover damages (whether in contract
or in tort) against the other, for loss of or damage to the Waiving Party's
property arising out of or incident to the perils required to be insured against
under Paragraph 8. The effect of such releases and waivers of the right to
recover damages shall not be limited by the amount of insurance carried or
required, or by any deductibles applicable thereto.
8.7 INDEMNITY. Except for Lessor's negligence and/or breach of express
warranties, Lessee shall indemnify, protect, defend and hold harmless the
Premises, Lessor and its agents, Lessor's master or ground lessor, partners and
Lenders, from and against any and all claims, loss of rents and/or damages,
costs, liens, judgments, penalties, permits, attorney's and consultant's fees,
expenses and/or liabilities arising out of, involving, or in dealing with, the
occupancy of the Premises by Lessee, the conduct of Lessee's business, any act,
omission or neglect of Lessee, its agents, contractors, employees or invitees,
and out of any Default or Breach by Lessee in the performance in a timely manner
of any obligation on Lessee's part to be performed under this Lease. The
foregoing shall include, but not be limited to, the defense or pursuit of any
claim or any action or proceeding involved therein, and whether or not (in the
case of claims made against Lessor) litigated and/or reduced to judgment, and
whether well founded or not. In case any action or proceeding be brought against
Lessor by reason of any of the foregoing matters, Lessee upon notice from Lessor
shall defend the same at Lessee's expense by counsel reasonably satisfactory to
Lessor and Lessor shall cooperate with Lessee in such defense. Lessor need not
have first paid any such claim in order to be so indemnified. (See Paragraph
49 f.)
8.8 EXEMPTION OF LESSOR FROM LIABILITY. Lessor shall not be liable for
injury or damage to the person or goods, wares, merchandise or other property of
Lessee, Lessee's employees, contractors, invitees, customers, or any other
person in or about the Premises, whether such damage or injury is caused by or
results from fire, steam, electricity, gas, water or rain, or from the breakage,
leakage, obstruction or other defects of pipes, fire sprinklers, wires,
appliances, plumbing, air conditioning or lighting fixtures, or from any other
cause, whether the said injury or damage results from conditions arising upon
the Premises or upon other portions of the building of which the Premises are a
part, or from other sources or places, and regardless of whether the cause of
such damage or injury or the means of repairing the same Is accessible or not.
Lessor shall not be liable for any damages arising from any act or neglect of
any other tenant of Lessor. Notwithstanding Lessor's negligence or breach of
this Lease, Lessor shall under no circumstances be liable for injury to Lessee's
business or for any loss of income or profit therefrom.
9. DAMAGE OR DESTRUCTION.
9.1 DEFINITIONS.
(a) "PREMISES PARTIAL DAMAGE" shall mean damage or destruction
to the improvements on the Premises, other than Lessee Owned Alterations and
Utility Installations, the repair cost of which damage or destruction is less
than 50% of the then Replacement Cost of the Premises immediately prior to such
damage or destruction, excluding from such calculation the value of the land and
Lessee Owned Alterations and Utility Installations.
(b) "PREMISES TOTAL DESTRUCTION" shall mean damage or
destruction to the Premises, other than Lessee Owned Alterations and Utility
Installations the repair cost of which damage or destruction is 50% or more of
the then Replacement Cost of the Premises immediately prior to such damage or
destruction, excluding from such calculation the value of the land and Lessee
Owned Alterations and Utility Installations.
(c) "INSURED LOSS" shall mean damage or destruction to
Improvements on the Premises, other than Lessee Owned Alterations and Utility
Installations, which was caused by an event required to be covered by the
insurance described in Paragraph 8.3(a), irrespective of any deductible amounts
or coverage limits involved.
(d) "REPLACEMENT COST" shall mean the cost to repair or
rebuild the improvements owned by Lessor at the time of the occurrence to their
condition existing immediately prior thereto, including demolition, debris
removal and upgrading required by the operation of applicable building codes,
ordinances or laws, and without deduction for depreciation.
(e) "HAZARDOUS SUBSTANCE CONDITION" shall mean the occurrence
or discovery of a condition involving the presence of, or a contamination by, a
Hazardous Substance as defined in Paragraph 6.2(a), in, on, or under the
Premises.
9.2 PARTIAL DAMAGE-INSURED LOSS. If a Premises Partial Damage that is
an Insured Loss occurs, then Lessor shall, at Lessor's expense, repair such
damage (but not Lessee's Trade Fixtures or Lessee Owned Alterations and Utility
Installations) as soon as reasonably possible and this Lease shall continue in
full force and effect; provided, however, that Lessee shall, at Lessor's
election, make the repair of any damage or destruction the total cost to repair
of which is $10,000 or less, and, in such event, Lessor shall make the insurance
proceeds available to Lessee on a reasonable basis for that purpose.
Notwithstanding the foregoing, if the required insurance was not in force or the
insurance proceeds are not sufficient to effect such repair, the Insuring Party
shall promptly contribute the shortage in proceeds (except as to the deductible
which is Lessee's responsibility) as and when required to complete said repairs.
In the event, however, the shortage in proceeds was due to the fact that, by
reason of the unique nature of the improvements, full replacement cost insurance
coverage was not commercially reasonable and available Lessor shall have no
obligation to pay for the shortage in insurance proceeds or to fully restore the
unique aspects of the Premises unless Lessee provides Lessor with the funds to
cover same, or adequate assurance thereof, within thirty (30) days following
receipt of written notice of such shortage and request therefor. If Lessor
receives said funds or adequate assurance thereof within said thirty (30) day
period, the party responsible for making the repairs shall complete them as soon
as reasonably possible and this Lease shall remain in full force and effect. If
Lessor does not receive such funds or assurance within said period, Lessor may
nevertheless elect by written notice to Lessee within ten (10) days thereafter
to make such restoration and repair as is commercially reasonable with Lessor
paying any shortage in proceeds. In which case this Lease shall remain in full
force and effect. If in such case Lessor does not so elect, then this Lease
shall terminate sixty (60) days following the occurrence of the damage or
destruction. Unless otherwise agreed, Lessee shall in no event have any right to
reimbursement from Lessor for any funds contributed by Lessee to repair any such
damage or destruction. Premises Partial Damage due to flood or earthquake shall
be subject to Paragraph 9.3 rather than Paragraph 9.2, notwithstanding that
there may be some insurance coverage, but the net proceeds of any such insurance
shall be made available for the repairs if made by either Party. (See Paragraph
49 g.)
PAGE 4
<PAGE>
9.3 PARTIAL DAMAGE-UNINSURED LOSS. If a Premises Partial Damage that is
not an Insured Loss occurs, unless caused by a negligent or willful act of
Lessee (in which event Lessee shall make the repairs at Lessee's expense and
this Lease shall continue in full force and effect, but subject to Lessor's
rights under Paragraph 13), Lessor may at Lessor's option, either: (i) repair
such damage as soon as reasonably possible at Lessor's expense, in which event
this Lease shall continue in full force and effect, or (ii) give written notice
to Lessee within thirty (30) days alter receipt by Lessor of knowledge of the
occurrence of such damage of Lessor's desire to terminate this Lease as of the
date sixty (60) days following the giving of such notice. In the event Lessor
elects to give such notice of Lessor's intention to terminate this Lease, Lessee
shall have the right within ten (10) days after the receipt of such notice to
give written notice to Lessor of Lessee's commitment to pay for the repair of
such damage totally at Lessee's expense and without reimbursement from Lessor.
Lessee shall provide Lessor with the required funds or satisfactory assurance
thereof within thirty (30) days following Lessee's said commitment. In such
event this Lease shall continue in full force and effect, and Lessor shall
proceed to make such repairs as soon as reasonably possible and the required
funds are available. If Lessee does not give such notice and provide the funds
or assurance thereof within the times specified above, this Lease shall
terminate as of the date specified in Lessor's notice of termination.
9.4 TOTAL DESTRUCTION. Notwithstanding any other provision hereof, if a
Premises Total Destruction occurs (including any destruction required by any
authorized public authority), this Lease shall terminate sixty (60) days
following the date of such Premises Total Destruction, whether or not the damage
or destruction is an Insured Loss or was caused by a negligent or willful act of
Lessee. In the event, however, that the damage or destruction was caused by
Lessee, Lessor shall have the right to recover Lessor's damages from Lessee
except as released and waived in Paragraph 8.6. (See Paragraph 49 h.)
9.5 DAMAGE NEAR END OF TERM. If at any time during the last six (6)
months of the term of this Lease (as extended by Lessee pursuant to any of
Lessee's exercised renewal options) there is damage for which the cost to repair
exceeds one (1) month's Base Rent, whether or not an Insured Loss, Lessor may,
at Lessor's option, terminate this Lease effective sixty (60) days following the
date of occurrence of such damage by giving written notice to Lessee of Lessor's
election to do so within thirty (30) days after the date of occurrence of such
damage. Provided, however, if Lessee at that time has an exercisable option to
extend this Lease or to purchase the Premises, then Lessee may preserve this
Lease by, within twenty (20) days following the occurrence of the damage, or
before the expiration of the time provided in such option for its exercise,
whichever is earlier ("EXERCISE PERIOD"), (i) exercising such option and (ii)
providing Lessor with any shortage in insurance proceeds (or adequate assurance
thereof) needed to make the repairs. If Lessee duly exercises such option during
said Exercise Period and provides Lessor with funds (or adequate assurance
thereof) to cover any shortage in insurance proceeds, Lessor shall, at Lessor's
expense repair such damage as soon as reasonably possible and this Lease shall
continue in full force and effect. If Lessee fails to exercise such option and
provide such funds or assurance during said Exercise Period, then Lessor may at
Lessor's option terminate this Lease as of the expiration of said sixty (60) day
period following the occurrence of such damage by giving written notice to
Lessee of Lessor's election to do so within ten (10) days after the expiration
of the Exercise Period, notwithstanding any term or provision in the grant of
option to the contrary.
9.6 ABATEMENT OF RENT; LESSEE'S REMEDIES.
(a) In the event of damage described in Paragraph 9.2 (Partial
Damage-Insured), whether or not Lessor or Lessee repairs or restores the
Premises, the Base Rent, Real Property Taxes, insurance premiums, and other
charges, if any, payable by Lessee hereunder for the period during which such
damage, its repair or the restoration continues (not to exceed the period for
which rental value insurance is required under Paragraph 8.3(b)), shall be
abated in proportion to the degree to which Lessee's use of the Premises is
impaired. Except for abatement of Base Rent, Real Property Taxes, insurance
premiums, and other charges, if any, as aforesaid, all other obligations of
Lessee hereunder shall be performed by Lessee, and Lessee shall have no claim
against Lessor for any damage suffered by reason of any such repair or
restoration.
(b) If Lessor shall be obligated to repair or restore the
Premises under the provisions of this Paragraph 9 and shall not commence, in a
substantial and meaningful way, the repair or restoration of the Premises within
ninety (90) days after such obligation shall accrue, Lessee may, at any time
prior to the commencement of such repair or restoration, give written notice to
Lessor and to any Lenders of which Lessee has actual notice of Lessee's election
to terminate this Lease on a date not less than sixty (60) days following the
giving of such notice. If Lessee gives such notice to Lessor and such Lenders
and such repair or restoration is not commenced within thirty (30) days after
receipt of such notice, this Lease shall terminate as of the date specified in
said notice. If Lessor or a Lender commences the repair or restoration of the
Premises within thirty (30) days after receipt of such notice, this Lease shall
continue in full force and effect. "COMMENCE" as used in this Paragraph shall
mean either the unconditional authorization of the preparation of the required
plans, or the beginning of the actual work on the Premises, whichever first
occurs.
9.7 HAZARDOUS SUBSTANCE CONDITIONS. If a Hazardous Substance Condition
occurs, unless Lessee is legally responsible therefor (in which case Lessee
shall make the investigation and remediation thereof required by Applicable Law
and this Lease shall continue in full force and effect, but subject to Lessor's
rights under Paragraph 13), Lessor may at Lessor's option either (i) investigate
and remediate such Hazardous Substance Condition, if required, as soon as
reasonably possible at Lessor's expense, in which event this Lease shall
continue in full force and effect, or (ii) if the estimated cost to investigate
and remediate such condition exceeds twelve (12) times the then monthly Base
Rent or $100,000, whichever is greater, give written notice to Lessee within
thirty (30) days after receipt by Lessor of knowledge of the occurrence of such
Hazardous Substance Condition of Lessor's desire to terminate this Lease of the
date sixty (60) days following the giving of such notice. In the event Lessor
elects to give such notice of Lessor's intention to terminate this Lease, Lessee
shall have the right within ten (10) days after the receipt of such notice to
give written notice to Lessor of Lessee's commitment to pay for the
investigation and remediation of such Hazardous Substance Condition totally at
Lessee's expense and without reimbursement from Lessor except to the extent of
an amount equal to twelve (12) times the then monthly Base Rent or $100,000,
whichever is greater. Lessee shall provide Lessor with the funds required of
Lessee or satisfactory assurance thereof within thirty (30) days following
Lessee's said commitment. In such event this Lease shall continue in full force
and effect, and Lessor shall proceed to make such investigation and remediation
as soon as reasonably possible and the required funds are available. If Lessee
does not give such notice and provide the required funds or assurance thereof
within the times specified above, this Lease shall terminate as of the date
specified in Lessor's notice of termination. If a Hazardous Substance Condition
occurs for which Lessee is not legally responsible, there shall be abatement of
Lessee's obligations under this Lease to the same extent as provided in
Paragraph 9.6(a) for a period of not to exceed twelve months.
9.8 TERMINATION-ADVANCE PAYMENTS. Upon termination of this Lease
pursuant to this Paragraph 9, an equitable adjustment shall be made concerning
advance Base Rent and any other advance payments made by Lessee to Lessor.
Lessor shall, in addition, return to Lessee so much of Lessee's Security Deposit
as has not been, or is not then required to be, used by Lessor under the terms
of this Lease.
9.9 WAIVE STATUTES. Lessor and Lessee agree that the terms of this
Lease shall govern the effect of any damage to or destruction of the Premises
with respect to the termination of this Lease and hereby waive the provisions of
any present or future statute to the extent inconsistent herewith.
10. REAL PROPERTY TAXES.
10.1 (a) PAYMENT OF TAXES. Lessee shall pay the Real Property
Taxes, as defined in Paragraph 10.2, applicable to the Premises during the term
of this Lease. Subject to Paragraph 10.1(b), all such payments shall be made at
least ten (10) days prior to the delinquency date of the applicable installment.
Lessee shall promptly furnish Lessor with satisfactory evidence that such taxes
have been paid. If any such taxes to be paid by Lessee shall cover any period of
time prior to or after the expiration or earlier termination of the term hereof,
Lessee's share of such taxes shall be equitably prorated to cover only the
period of time within the tax fiscal year this Lease is in effect, and Lessor
shall reimburse Lessee for any overpayment after such ptoration. If Lessee shall
fail to pay any Real Property Taxes required by this Lease to be paid by Lessee,
Lessor shall have the right to pay the same, and Lessee shall reimburse Lessor
therefor upon demand.
(b) ADVANCE PAYMENT. In order to insure payment when due and
before delinquency of any or all Real Property Taxes, Lessor reserves the right,
at Lessor's option, to estimate the current Real Property Taxes applicable to
the Premises, and to require such current year's Real Property Taxes to be paid
in advance to Lessor by Lessee, monthly in advance with the payment of the Base
Rent. If Lessor elects to require payment monthly in advance, the monthly
payment shall be that equal monthly amount which, over the number of months
remaining before the month in which the applicable tax installment would became
delinquent (and without interest thereon), would provide a fund large enough to
fully discharge before delinquency the estimated installment of taxes to be
paid. When the actual amount of the applicable tax bill is known, the amount of
such equal monthly advance payment shall be adjusted as required to provide the
fund needed to pay the applicable taxes before delinquency. If the amounts paid
to Lessor by Lessee under the provisions of this Paragraph are insufficient to
discharge the obligations of Lessee to pay such Real Property Taxes as the same
become due, Lessee shall pay to Lessor, upon Lessor's demand, such additional
sums as are necessary to pay such obligations. All moneys paid to Lessor under
this Paragraph may be intermingled with other moneys of Lessor and shall not
bear interest. In the event of a Breach by Lessee in the performance of the
obligations of Lessee under this Lease, then any balance of funds paid to Lessor
under the provisions of this Paragraph may, subject to proration as provided in
Paragraph 10.1(a), at the option of Lessor, be treated as an additional Security
Deposit under Paragraph 5.
10.2 DEFINITION OF "REAL PROPERTY TAXES." As used herein, the term
"REAL PROPERTY TAXES" shall include any form of real estate tax or assessment,
general, special, ordinary or extraordinary, and any license fee, commercial
rental tax, improvement bond or bonds, levy or tax (other than inheritance,
personal income or estate taxes) imposed upon the Premises by any authority
having the direct or indirect power to tax, including any city, state or federal
government, or any school, agricultural, sanitary, fire, street, drainage or
other improvement district thereof, levied against any legal or equitable
interest of Lessor in the Premises or in the real property of which the Premises
are a part, Lessor's right to rent or other income therefrom, and/or Lessor's
business of leasing the Premises. The term "REAL PROPERTY TAXES" shall also
include any tax, fee, levy, assessment or charge, or any increase therein,
imposed by reason of events occurring, or changes in applicable law taking
effect, during the term of this Lease, including but not limited to a change in
the ownership of the Premises or in the improvements thereon, after the first
two (2) years of the original Lease term only the execution of this Lease, or
any modification, amendment or transfer thereof, and whether or not contemplated
by the Parties. (SEE PARAGRAPH 49 i.)
<PAGE>
10.4 PERSONAL PROPERTY TAXES SUBJECT TO LESSEE'S LEGAL RIGHT TO CONTEST
THE AMOUNT OR APPLICABILITY OF SUCH TAXES. Lessee shall pay prior to delinquency
all taxes assessed against and levied upon Lessee Owned Alterations, Utility
Installations, Trade Fixtures, furnishings, equipment and all personal property
of Lessee contained in the Premises or elsewhere. When possible, Lessee shall
cause its Trade Fixtures, furnishings, equipment and all other personal property
to be assessed and billed separately from the real property of Lessor. If any of
Lessee's said personal property shall be assessed with Lessor's real property,
Lessee shall pay Lessor the taxes attributable to Lessee within ten (10) days
after receipt of a written statement setting forth the taxes applicable to
Lessee's property or, at Lessor's option, as provided in Paragraph 10.1(b).
11. UTILITIES. Lessee shall pay for all water, gas, heat, light, power,
telephone, trash disposal and other utilities and services supplied to the
Premises, together with any taxes thereon. If any such services are not
separately metered to Lessee, Lessee shall pay a reasonable proportion, to be
determined by Lessor, of all charges jointly metered with other premises.
12. ASSIGNMENT AND SUBLETTING.
12.1 LESSOR'S CONSENT REQUIRED.
(a) Lessee shall not voluntarily or by operation of law
assign, transfer, mortgage or otherwise transfer or encumber (collectively,
"ASSIGNMENT") or sublet all or any part of Lessee's interest in this Lease or in
the Premises without Lessor's prior written consent given under and subject to
the terms of Paragraph 36.
(b) A change in the control of Lessee shall constitute an
assignment requiring Lessor's consent. The transfer, on a cumulative basis, of
twenty-live percent (25%) or more of the voting control of Lessee shall
constitute a change in control for this purpose. (SEE PARAGRAPH 49j.)
(c) The involvement of Lessee or its assets in any
transaction, or series of transactions (by way of merger, sale, acquisition,
financing, refinancing, transfer, leveraged buy-out or otherwise), whether or
not a formal assignment or hypothecation of this Lease or Lessee's assets
occurs, which results or will result in a reduction of the Net Worth of Lessee,
as hereinafter defined, by an amount equal to or greater than twenty-five
percent (25%) of such Net Worth of Lessee as it was represented to Lessor at the
time of the execution by Lessor of this Lease or at the time of the most recent
assignment to which Lessor has consented, or as it exists immediately prior to
said transaction or transactions constituting such reduction, at whichever time
said Net Worth of Lessee was or is greater, shall be considered an assignment of
this Lease by Lessee to which Lessor may reasonably withhold its consent. "Net
Worth of Lessee" for purposes of this Lease shall be the net worth of Lessee
established under generally accepted accounting principles
consistently applied.
(d) An assignment or subletting of Lessee's interest in this
Lease without Lessor's specific prior written consent shall, al Lessor's option,
be a Default curable after notice per Paragraph 13.1(c), or a noncurable Breach
without the necessity of any notice and grace period. If Lessor elects to treat
such unconsented to assignment or subletting as a noncurable Breach, Lessor
shall have the right to either: (i) terminate this Lease, or (ii) upon thirty
(30) days written notice ("Lessor's Notice"), increase the monthly Base Rent to
fair market rental value or one hundred ten percent (110%) of the Base Rent then
in effect, whichever is greater. Pending determination of the new fair market
rental value, if disputed by Lessee, Lessee shall pay the amount set forth in
Lessor's Notice, with any overpayment credited against the next installment(s)
of Base Rent coming due, and any underpayment for the period retroactively to
the effective date of the adjustment being due and payable immediately upon the
determination thereof. Further, in the event of such Breach and market value
adjustment, (i) the purchase price of any option to purchase the Premises held
by Lessee shall be subject to similar adjustment to the then fair market value
(without the Lease being considered an encumbrance or any deduction for
depreciation or obsolescence, and considering the Premises at its highest and
best use and in good condition), or one hundred ten percent (110%) of the price
previously in effect, whichever is greater, (ii) any index-oriented rental or
price adjustment formulas contained in this Lease shall be adjusted to require
that the base index be determined with reference to the index applicable to the
time of such adjustment, and (iii) any fixed rental adjustments scheduled during
the remainder of the Lease term shall be increased in the same ratio as the new
market rental bears to the Base Rent in effect immediately prior to the market
value adjustment.
12.2 TERMS AND CONDITIONS APPLICABLE TO ASSIGNMENT AND SUBLETTING.
(a) Regardless of Lessor's consent, any assignment or
subletting shall not: (i) be effective without the express written assumption by
such assignee or sublessee of the obligations of Lessee under this Lease, (ii)
release Lessee of any obligations hereunder, or (iii) alter the primary
liability of Lessee for the payment of Base Rent and other sums due Lessor
hereunder or for the performance of any other obligations to be performed by
Lessee Under this Lease.
(b) Lessor may accept any rent or performance of Lessee's
obligations from any person other than Lessee pending approval or disapproval of
an assignment. Neither a delay in the approval or disapproval of such assignment
nor the acceptance of any rent or performance shall constitute a waiver or
estoppel of Lessor's right to exercise its remedies for the Default or Breach by
Lessee of any of the terms, covenants or conditions of this Lease.
(c) The consent of Lessor to any assignment or subletting
shall not constitute a consent to any subsequent assignment or subletting by
Lessee or to any subsequent or successive assignment or subletting by the
sublessee. However, Lessor may consent to subsequent sublettings and assignments
of the sublease or any amendments or modifications thereto without notifying
Lessee or anyone else liable on the Lease or sublease and without obtaining
their consent, and such action shall not relieve such persons from liability
under this Lease or sublease.
(d) In the event of any Default or Breach of Lessee's
obligations under this Lease, Lessor may proceed directly against Lessee, any
Guarantors or any one else responsible for the performance of the Lessee's
obligations under this Lease, including the sublessee, without first exhausting
Lessor's remedies against any other person or entity responsible therefor to
Lessor, or any security held by Lessor or Lessee.
(e) Each request for consent to an assignment or subletting
shall be in writing, accompanied by information relevant to Lessor's
determination as to the financial and operational responsibility and
appropriateness of the proposed assignee or sublessee, including but not limited
to the intended use and/or required modification of the Premises, if any,
together with a deposit of $2,000 for actual costs not to exceed
such amount, as reasonable consideration for Lessor's considering and processing
the request for consent. Lessee agrees to provide Lessor with such other or
additional information and/or documentation as may be reasonably requested by
Lessor.
(f) Any assignee of, or sublessee under, this Lease shall, by
reason of accepting such assignment or entering into such sublease, be deemed,
for the benefit of Lessor, to have assumed and agreed to conform and comply with
each and every term, covenant, condition and obligation herein to be observed or
performed by Lessee during the term of said assignment or sublease, other than
such obligations as are contrary to or inconsistent with provisions of an
assignment or sublease to which Lessor has specifically consented in writing.
(h) Lessor, as a condition to giving its consent to any
assignment or subletting of the entire Premises, may require that the amount and
adjustment structure of the rent payable under this Lease be adjusted to what is
then the market value and/or adjustment structure for property similar to the
Premises as then constituted.
12.3 ADDITIONAL TERMS AND CONDITIONS APPLICABLE TO SUBLETTING. The
following terms and conditions shall apply to any subletting by Lessee of all or
any part of the Premises and shall be deemed included in all subleases under
this Lease whether or not expressly incorporated therein.
(a) Lessee hereby assigns and transfers to Lessor all of
Lessee's interest in all rentals and income arising from any sublease of all or
a portion of the Premises heretofore or hereafter made by Lessee, and Lessor may
collect such rent and income and apply same toward Lessee's obligations under
this Lease; provided, however, that until a Breach (as defined in Paragraph
13.1) shall occur in the performance of Lessee's obligations under this Lease,
Lessee may, except as otherwise provided in this Lease, receive, collect and
enjoy the rents accruing under such sublease. Lessor shall not, by reason of
this or any other assignment of such sublease to Lessor, nor by reason of the
collection of the rents from a sublessee, be deemed liable to the sublessee for
any failure of Lessee to perform and comply with any of Lessee's obligations to
such sublessee under such sublease. Lessee hereby irrevocably authorizes and
directs any such sublessee, upon uncured Breach in the performance of Lessee's
obligations under this Lease, to pay to Lessor the rents and other charges due
and to become due under the sublease. Sublessee shall pay such rents and other
charges to Lessor notwithstanding any notice from or claim from Lessee to the
contrary. Lessee shall have no right or claim against said sublessee, or, until
the Breach has been cured, against Lessor, for any such rents and other charges
so paid by said sublessee to Lessor.
(b) In the event of a Breach by Lessee in the performance of
its obligations under this Lease, Lessor, at its option and without any
obligation to do so, may require any sublessee to attorn to Lessor, in which
event Lessor shall undertake the obligations of the sublessor under such
sublease from the time of the exercise of said option to the expiration of such
sublease; provided, however, Lessor shall not be liable for any prepaid rents or
security deposit paid by such sublessee to such sublessor or for any other prior
Defaults or Breaches of such sublessor under such sublease.
(c) Any matter or thing requiring the consent of the sublessor
under a sublease shall also require the consent of Lessor herein.
(d) No sublessee shall further assign or sublet all or any
part of the Premises without Lessor's and Lessee's prior written consent.
(e) Lessor shall deliver a copy of any notice of Default or
Breach by Lessee to the sublessee, who shall have the right to cure the Default
of Lessee within the grace period, if any, specified in such notice. The
sublessee shall have a right of reimbursement and offset from and against Lessee
for any such Defaults cured by the sublessee.
13. DEFAULT; BREACH; REMEDIES.
13.1 DEFAULT; BREACH. Lessor and Lessee agree that if an attorney is
consulted by Lessor in connection with a Lessee Default or Breach (as
hereinafter defined), $350.00 is a reasonable minimum sum per such occurrence
for legal services and costs in the preparation and service of a notice of
Default, and that Lessor may include the cost of such services and costs in said
notice as rent due and payable to cure said Default. A "DEFAULT" is defined as a
failure by the Lessee to observe, comply with or perform any of the terms,
covenants, conditions or rules applicable to Lessee under this Lease. A "BREACH"
is defined as the occurrence of any one or more of the following Defaults, and,
where a grace period for cure alter notice is specified herein, the failure by
Lessee to cure such Default prior to the expiration of the applicable grace
period, and shall entitle Lessor to pursue the remedies set forth in Paragraphs
13.2 and/or 13.3:
(a) The vacating of the Premises without a Lessor-authorized
assignee or sublessee, or without the intention to reoccupy same, or the
abandonment of the Premises.
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(b) Except as expressly otherwise provided In this Lease, the
failure by Lessee to make any payment of Base Rent or any other monetary payment
required to be made by Lessee hereunder, whether to Lessor or to a third party,
as and when due, the failure by Lessee to provide Lessor with reasonable
evidence of insurance or surety bond required under this Lease, or the failure
of Lessee to fulfill any obligation under this Lease which endangers or
threatens life or property, where such failure continues for a period of three
(3) days following written notice thereof by or on behalf of Lessor to Lessee.
(c) Except as expressly otherwise provided in this Lease, the
failure by Lessee to provide Lessor with reasonable written evidence (in duly
executed original form, if applicable) of (i) compliance with applicable law per
Paragraph 6.3, (ii) the inspection, maintenance and service contracts required
under Paragraph 7.1(b), (iii) the recission of an unauthorized assignment or
subletting per Paragraph 12.1(b), (iv) a Tenancy Statement per Paragraphs 16 or
37, (v) the subordination or non-subordination of this Lease per Paragraph 30,
(vi) the guaranty of the performance of Lessee's obligations under this Lease If
required under Paragraphs 1.11 and 37, (vii) the execution of any document
requested under Paragraph 42 (easements), or (viii) any other documentation or
information which Lessor may reasonably require of Lessee under the terms of
this Lease, where any such failure continues for a period of ten (10) days
following written notice by or on behalf of Lessor to Lessee.
(d) A Default by Lessee as to the terms, covenants, conditions
or provisions of this Lease, or of the rules adopted under Paragraph 40 hereof,
that are to be observed, complied with or performed by Lessee, other than those
described in subparagraphs (a), (b) or (c), above, where such Default continues
for a period of thirty (30) days after written notice thereof by or on behalf of
Lessor to Lessee; provided, however, that if the nature of Lessee's Default is
such that more than thirty (30) days are reasonably required for its cure, then
it shall not be deemed to be a Breach of this Lease by Lessee if Lessee
commences such cure within said thirty (30) day period and thereafter diligently
prosecutes such cure to completion.
(e) The occurrence of any of the following events: (i) The
making by Lessee of any general arrangement or assignment for the benefit of
creditors; (ii) Lessee's becoming a "debtor" as defined In 11 U.S.C. Section 101
or any successor statute thereto (unless, in the case of a petition filed
against Lessee, the same is dismissed within one hundred twenty
(120) days); (iii) the appointment of a trustee or receiver to take possession
of substantially all of Lessee's assets located at the Premises or of Lessee's
interest in this Lease, where possession is not restored to Lessee within thirty
(30) days; or (iv) the attachment, execution or other judicial seizure of
substantially all of Lessee's assets located at the Premises or of Lessee's
interest in this lease, where such seizure is not discharged within thirty (30)
days; provided, however, in the event that any provision of this subparagraph
(e) is contrary to any applicable law, such provision shall be of no force or
effect, and not affect the validity of the remaining provisions.
(f) The discovery by Lessor that any financial statement given
to Lessor by Lessee or any Guarantor of Lessee's obligations hereunder was
materially false.
13.2 REMEDIES. If Lessee fails to perform any affirmative duty or
obligation of Lessee under this Lease, within ten (10) days after written notice
to Lessee (or in case of an emergency, without notice), Lessor may at its
option (but without obligation to do so), perform such duty or obligation on
Lessee's behalf, including but not limited to the obtaining of reasonably
required bonds, insurance policies, or governmental licenses, permits or
approvals. The costs and expenses of any such performance by Lessor shall be due
and payable by Lessee to Lessor upon invoice therefor. If any
three (3) checks given to Lessor by Lessee shall not be honored by the bank upon
which it is drawn, Lessor, at its option, may require all future payments to be
made under this Lease by Lessee to be made only by cashier's check. In the event
of a Breach of this Lease by Lessee, as defined in Paragraph 13.1, with or
without further notice or demand, and without limiting Lessor in the exercise of
any right or remedy which Lessor may have by reason of such Breach, Lessor may:
(a) Terminate Lessee's right to possession of the Premises by
any lawful means, in which case this Lease and the term hereof shall terminate
and Lessee shall immediately surrender possession of the Premises to Lessor. In
such event Lessor shall be entitled to recover from Lessee: (i) the worth at the
time of the award of the unpaid rent which had been earned at the time of
termination; (ii) the worth at the time of award of the amount by which the
unpaid rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss that the Lessee proves could have
been reasonably avoided; (iii) the worth at the time of award of the amount by
which the unpaid rent for the balance of the term after the time of award
exceeds the amount of such rental loss that the Lessee proves could be
reasonably avoided; and (iv) any other amount necessary to compensate Lessor for
all the detriment proximately caused by the Lessee's failure to perform its
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom, including but not limited to the cost of recovering
possession of the Premises, expenses of reletting, including necessary
renovation and alteration of the Premises, to a condition required by
subparagraph 7.4(c) reasonable attorneys' fees, and that portion of the leasing
commission paid by Lessor applicable to the unexpired term of this Lease. The
worth at the time of award of the amount referred to in provision (iii) of the
prior sentence shall be computed by discounting such amount at the discount rate
of the Federal Reserve Bank of San Francisco at the time of award plus one
percent. Efforts by Lessor to mitigate damages caused by Lessee's Default or
Breach of this Lease shall not waive Lessor's right to recover damages under
this Paragraph. If termination of this Lease is obtained through the provisional
remedy of unlawful detainer, Lessor shall have the right to recover in such
proceeding the unpaid rent and damages as are recoverable therein, or Lessor may
reserve therein the right to recover all or any part thereof in a separate suit
for such rent and/or damages. If a notice and grace period required under
subparagraphs 13.1(b), (c) or (d) was not previously given, a notice to pay rent
or quit, or to perform or quit, as the case may be, given to Lessee under any
statute authorizing the forfeiture of leases for unlawful detainer shall also
constitute the applicable notice for grace period purposes required by
subparagraphs 13.1 (b), (c) or (d). In such case the applicable grace period
under subparagraphs 13.1 (b), (c) or (d) and under the unlawful detainer statute
shall run concurrently after the one such statutory notice, and the failure of
Lessee to cure the Default within the greater of the two such grace periods
shall constitute both an unlawful detainer and a Breach of this Lease entitling
Lessor to the remedies provided for in this Lease and/or by said statute.
(b) Continue the Lease and Lessee's right to possession in
effect (in California under California Civil Code Section 1951.4) after Lessee's
Breach and abandonment and recover the rent as it becomes due, provided Lessee
has the right to sublet or assign, subject only to reasonable limitations. See
Paragraphs 12 and 36 for the limitations on assignment and subletting which
limitations Lessee and Lessor agree are reasonable. Acts of maintenance or
preservation, efforts to relet the Premises, or the appointment of a receiver to
protect the Lessor's interest under the Lease, shall not constitute a
termination of the Lessee's right to possession.
(c) Pursue any other remedy now or hereafter available to
Lessor under the laws or judicial decisions of the state wherein the Premises
are located.
(d) The expiration or termination of this Lease and/or the
termination of Lessee's right to possession shall not relieve Lessee from
liability under any indemnity provisions of this Lease as to matters occurring
or accruing during the term hereof or by reason of Lessee's occupancy of the
Premises.
13.3 INDUCEMENT RECAPTURE IN EVENT OF BREACH. Any agreement by Lessor
for free or abated rent or other charges applicable to the Premises, or for the
giving or paying by Lessor to or for Lessee of any cash or other bonus,
inducement or consideration for Lessee's entering into this Lease, all of which
concessions are hereinafter referred to as "INDUCEMENT PROVISIONS" shall be
deemed conditioned upon Lessee's full and faithful performance of all of the
terms, covenants and conditions of this Lease to be performed or observed by
Lessee during the term hereof as the same may be extended. Upon the occurrence
of an uncured Breach of this Lease by Lessee, as defined in Paragraph 13.1, any
such Inducement Provision shall automatically be deemed deleted from this Lease
and of no further force or effect, and any rent, other charge, bonus, Inducement
or consideration theretofore abated, given or paid by Lessor under such an
Inducement Provision shall be immediately due and payable by Lessee to Lessor,
and recoverable by Lessor as additional rent due under this Lease if such Breach
remains uncured after the applicable period available for its cure.
13.4 LATE CHARGES. Lessee hereby acknowledges that late payment by
Lessee to Lessor of rent and other sums due hereunder will cause Lessor to incur
costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges, and late charges which may be imposed upon
Lessor by the terms of any ground lease, mortgage or trust deed covering the
Premises. Accordingly, if any installment of rent or any other sum due from
Lessee shall not be received by Lessor or Lessor's designee within ten (10) days
after such amount shall be due, then, without any requirement for notice to
Lessee, Lessee shall pay to Lessor a late charge equal to six percent (6%) of
such overdue amount. The parties hereby agree that such late charge represents a
fair and reasonable estimate of the costs Lessor will incur by reason of late
payment by Lessee. Acceptance of such late charge by Lessor shall in no event
constitute a waiver of Lessee's Default or Breach with respect to such overdue
amount, nor prevent Lessor from exercising any of the other rights and remedies
granted hereunder. In the event that a late charge is payable hereunder, whether
or not collected, for three (3) consecutive installments of Base Rent, then
notwithstanding Paragraph 4.1 or any other provision of this Lease to the
contrary, Base Rent shall, at Lessor's option, become due and payable quarterly
in advance.
13.5 BREACH BY LESSOR. Lessor shall not be deemed in breach of this
Lease unless Lessor fails within a reasonable time to perform an obligation
required to be performed by Lessor. For purposes of this Paragraph 13.5, a
reasonable time shall in no event be less than thirty (30) days after receipt by
Lessor, and by the holders of any ground lease, mortgage or deed of trust
covering the Premises whose name and address shall have been furnished Lessee in
writing for such purpose, of written notice specifying wherein such obligation
of Lessor has not been performed; provided, however, that if the nature of
Lessor's obligation is such that more than thirty (30) days after such notice
are reasonably required for its performance, then Lessor shall not be in breach
of this Lease if performance is commenced within such thirty (30) day period and
thereafter diligently pursued to completion.
14. CONDEMNATION. If the Premises or any portion thereof are taken under the
power of eminent domain or sold under the threat of the exercise of said power
(all of which are herein called "CONDEMNATION"), this Lease shall terminate as
to the part so taken as of the date the condemning authority takes title or
possession, whichever first occurs. If more than ten percent (10%) of the floor
area of the Premises, or more than twenty-five percent (25%) of the land area
not occupied by any building, is taken by condemnation, Lessee may, at Lessee's
option, to be exercised in writing within thirty (30) days after Lessor shall
have given Lessee written notice of such taking (or in the absence of such
notice, within thirty (30) days after the condemning authority shall
<PAGE>
have taken possession) terminate this Lease as of the date the condemning
authority takes such possession. If Lessee does not terminate this Lease in
accordance with the foregoing, this Lease shall remain in full force and effect
as to the portion of the Premises remaining, except that the Base Rent shall be
reduced in the same proportion as the rentable floor area of the Premises taken
bears to the total rentable floor area of the building located on the Premises.
No reduction of Base Rent shall occur if the only portion of the Premises taken
is land on which there is no building. Any award for the taking of all or any
part of the Premises under the power of eminent domain or any payment made under
threat of the exercise of such power shall be the property of Lessor, whether
such award shall be made as compensation for diminution in value of the
leasehold or for the taking of the flee, or as severance damages: provided,
however, that Lessee shall be entitled to any compensation, separately awarded
to Lessee for Lessee's relocation expenses and/or loss of Lessee's Trade
Fixtures and Lessee owned Alterations or Utility Installations, which Lessee
would otherwise be entitled to remove. In the event that this Lease is not
terminated by reason of such condemnation, Lessor shall to the extent of its net
severance damages received, over and above the legal and other expenses incurred
by Lessor in the condemnation matter, repair any damage to the Premises caused
by such condemnation, except to the extent that Lessee has been reimbursed
therefor by the condemning authority. Lessee shall be responsible for the
payment of any amount in excess of such net severance damages required to
complete such repair.
15. BROKER'S FEE.
15.1 The Brokers named in Paragraph 1.10 are the procuring causes of
this Lease.
15.5 Lessee and Lessor each represent and warrant to the other that it
has had no dealings with any person, firm, broker or finder (other than the
Brokers, if any named in Paragraph 1.10) in connection with the negotiation of
this Lease and/or the consummation of the transaction contemplated hereby, and
that no broker or other person, firm or entity other than said named Brokers is
entitled to any commission or finder's fee in connection with said transaction.
Lessee and Lessor do each hereby agree to indemnify, protect, defend and hold
the other harmless from and against liability for compensation or charges which
may be claimed by any such unnamed broker, finder or other similar party by
reason of any dealings or actions of the indemnifying Party, including any
costs, expenses, attorneys fees reasonably incurred with respect thereto.
15.6 Lessor and Lessee hereby consent to and approve all agency
relationships, including any dual agencies, indicated in Paragraph 1.10.
16. TENANCY STATEMENT.
16.1 Each Party (as "RESPONDING PARTY") shall within ten (10) days
after written notice from the other Party ( the "REQUESTING PARTY") execute,
acknowledge and deliver to the Requesting Party a statement in writing in form
similar to the then most current "TENANCY STATEMENT" form published by the
American Industrial Real Estate Association, plus such additional information,
confirmation and/or statements as may be reasonably requested by the Requesting
Party.
16.2 If Lessor desires to finance, refinance, or sell the Premises, any
part thereof, or the building of which the Premises are a part, Lessee and all
Guarantors of Lessee's performance hereunder shall deliver to any potential
lender or purchaser designated by Lessor such financial statements of Lessee and
such Guarantors as may be reasonably required by such lender or purchaser,
including but not limited to Lessee's financial statements for the past three
(3) years. All such financial statements shall be received by Lessor and such
lender or purchaser in confidence and shall be used only for the purposes herein
set forth.
17. LESSOR'S LIABILITY. The term "LESSOR" as used herein shall mean the owner or
owners at the time in question of the fee title to the Premises, or, if this is
a sublease, of the lessee's interest in the prior lease. In the event of a
transfer of Lessor's title or interest in the Premises or in this Lease, Lessor
shall deliver to the transferee or assignee (in cash or by credit) any unused
Security Deposit held by Lessor at the time of such transfer or assignment.
Except as provided in Paragraph 15, upon such transfer or assignment and
delivery of the Security Deposit, as aforesaid, the prior Lessor shall be
relieved of all liability with respect to the obligations and/or covenants under
this Lease thereafter to be performed by the Lessor. Subject to the foregoing,
the obligations and/or covenants in this Lease to be performed by the Lessor
shall be binding only upon the Lessor as hereinabove defined.
18. SEVERABILITY. The invalidity of any provision of this Lease, as determined
by a court of competent jurisdiction, shall in no way affect the validity of any
other provision hereof.
19. INTEREST ON PAST-DUE OBLIGATIONS. Any monetary payment due Lessor hereunder,
other than late charges, not received by Lessor within thirty (30) days
following the date on which it was due, shall bear interest from the
thirty-first (31st) day after it was due at the rate of 12% per annum, but not
exceeding the maximum rate allowed by law, in addition to the late charge
provided for in Paragraph 13.4.
20. TIME OF ESSENCE. Time is of the essence with respect to the performance of
all obligations to be performed or observed by the Parties under this Lease.
21. RENT DEFINED. All monetary obligations of Lessee to Lessor under the terms
of this Lease are deemed to be rent.
22. NO PRIOR OR OTHER AGREEMENTS; BROKER DISCLAIMER. This Lease contains all
agreements between the Parties with respect to any matter mentioned herein, and
no other prior or contemporaneous agreement or understanding shall be effective.
Lessor and Lessee each represents and warrants to the Brokers that it has made,
and is relying solely upon, its own investigation as to the nature, quality,
character and financial responsibility of the other Party to this Lease and as
to the nature, quality, and character of the Premises. Brokers have no
responsibility with respect thereto or with respect to any default or breach
hereof by either Party.
23. NOTICES.
23.1 All notices required or permitted by this Lease shall be in
writing and may be delivered in person (by hand or by messenger or courier
service) or may be sent by regular, certified or registered mail or U.S. Postal
Service Express Mail, with postage prepaid, or by facsimile transmission, and
shall be deemed sufficiently given if served in a manner specified in this
Paragraph 23. The addresses noted adjacent to a Party's signature on this Lease
shall be that Party's address for delivery or mailing of notice purposes. Either
Party may by written notice to the other specify a different address for notice
purposes, except that upon Lessee's taking possession of the Premises, the
Premises shall constitute Lessee's address for the purpose of mailing or
delivering notices to Lessee. A copy of all notices required or permitted to be
given to either party hereunder shall be concurrently transmitted to such party
or parties at such addresses as such party may from time to time hereafter
designate by written notice either party.
23.2 Any notice sent by registered or certified mail, return receipt
requested, shall be deemed given on the date of delivery shown on the receipt
card, or if no delivery date is shown, the postmark thereon. If sent by regular
mail the notice shall be deemed given seventy-two hours after the same is
addressed as required herein and mailed with postage prepaid. Notices delivered
by United States Express Mail or overnight courier that guarantees next day
delivery shall be deemed given twenty-hour (24) hours alter delivery of the same
to the United States Postal Service or courier. If any notice is transmitted by
facsimile transmission or similar means, the same shall be deemed served or
delivered upon telephone confirmation of receipt of the transmission thereof,
provided a copy is also delivered via delivery or mail. If notice is received on
a Sunday or legal holiday, it shall be deemed received on the next business day.
24. WAIVERS. No waiver by Lessor of the Default or Breach of any term, covenant
or condition hereof by Lessee, shall be deemed a waiver of any other term,
covenant or condition hereof, or of any subsequent Default or Breach by Lessee
of the same or of any other term, covenant or condition hereof, Lessor's consent
to, or approval of, any act shall not be deemed to render unnecessary the
obtaining of Lessor's consent to, or approval of, any subsequent or similar act
by Lessee, or be construed as the basis of an estoppel to enforce the provision
or provisions of this Lease requiring such consent. Regardless of Lessor's
knowledge of a Default or Breach at the time of accepting rent, the acceptance
of rent by Lessor shall not be a waiver of any preceding Default or Breach by
Lessee of any provision hereof, other than the failure of Lessee to pay the
particular rent so accepted. Any payment given Lessor by Lessee may be accepted
by Lessor on account of moneys or damages due Lessor, notwithstanding any
qualifying statements or conditions made by Lessee in connection therewith,
which such statements and/or conditions shall be of no force or effect
whatsoever unless specifically agreed to in writing by Lessor at or before the
lime of deposit of such payment.
25. RECORDING. Either Lessor or Lessee shall, upon request of the other,
execute, acknowledge and deliver to the other a short form memorandum of this
Lease for recording purposes. The Party requesting recordation shall be
responsible for payment of any fees or taxes applicable thereto.
26. NO RIGHT TO HOLDOVER. Lessee has no right to retain possession of the
Premises or any part thereof beyond the expiration or earlier termination of
this Lease.
27. CUMULATIVE REMEDIES. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.
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28. COVENANTS AND CONDITIONS. All provisions of this Lease to be observed or
performed by Lessee are both covenants and conditions.
29. BINDING EFFECT; CHOICE OF LAW. This Lease shall be binding upon the parties,
their personal representatives, successors and assigns and be governed by the
laws of the State in which the Premises are located. Any litigation between the
Parties hereto concerning this Lease shall be initiated in the county in which
the Premises are located.
30. SUBORDINATION; ATTORNMENT; NON-DISTURBANCE.
30.1 SUBORDINATION. This Lease and any Option granted hereby shall be
subject and subordinate to any ground lease, mortgage, deed of trust, or other
hypothecation or security device (collectively, "SECURITY DEVICE"), now or
hereafter placed by Lessor upon the real property of which the Premises are a
part, to any and all advances made on the security thereof, and to all renewals,
modifications, consolidations, replacements and extensions thereof. Lessee
agrees that the Lenders holding any such Security Device shall have no duty,
liability or obligation to perform any of the obligations of Lessor under this
Lease, but that in the event of Lessor's default with respect to any such
obligation, Lessee will give any Lender whose name and address have been
furnished Lessee in writing for such purpose notice of Lessor's default and
allow such Lender thirty (30) days following receipt of such notice for the cure
of said default before invoking any remedies Lessee may have by reason thereof.
If any Lender shall elect to have this Lease and/or any Option granted hereby
superior to the lien of its Security Device and shall give written notice
thereof to Lessee, this Lease and such Options shall be deemed prior to such
Security Device, notwithstanding the relative dates of the documentation or
recordation thereof.
30.2 ATTORNMENT. Subject to the non-disturbance provisions of Paragraph
30.3, Lessee agrees to attorn to a Lender or any other party who acquires
ownership of the Premises by reason of a foreclosure of a Security Device, and
that in the event of such foreclosure, such new owner shall not; (i) be liable
for any act or omission of any prior lessor or with respect to events occurring
prior to acquisition of ownership, (ii) be subject to any offsets or defenses
which Lessee might have against any prior lessor, or (iii) be bound by
prepayment of more than one month's rent.
30.3 NON-DISTURBANCE. With respect to Security Devices entered into by
Lessor after the execution of this Lease, Lessee's subordination of this Lease
shall be subject to receiving assurance in a form generally in use by commercial
lenders (A "NON-DISTURBANCE AGREEMENT") from the Lender that Lessee's possession
and this Lease, including any options to extend the term hereof, will not be
disturbed so long as Lessee is not in Breach hereof and attorns to the record
owner of the Premises.
30.4 SELF-EXECUTING. The agreements contained in this Paragraph 30
shall be effective without the execution of any further documents; provided,
however, that, upon written request from Lessor or a Lender in connection with a
sale, financing or refinancing of the Premises, Lessee and Lessor shall execute
such further writings as may be reasonably required to separately document any
such subordination or non-subordination, attornment and/or non-disturbance
agreement as is provided for herein.
31. ATTORNEY'S FEES. If any Party or Broker brings an action or proceeding to
enforce the terms hereof or declare rights hereunder, the Prevailing Party (as
hereafter defined) or Broker in any such proceeding, action, or appeal thereon,
shall be entitled to reasonable attorney's fees. Such fees may be awarded in the
same suit or recovered in a separate suit, whether or not such action or
proceeding is pursued to decision or judgment. The term, "PREVAILING PARTY"
shall include, without limitation, a Party or Broker who substantially obtains
or defeats the relief sought, as the case may be, whether by compromise,
settlement, judgment, or the abandonment by the other Party or Broker of its
claim or defense. The attorney's fee award shall not be computed in accordance
with any court fee schedule, but shall be such as to fully reimburse all
attorney's fees reasonably incurred. Lessor shall be entitled to attorney's
fees, costs and expenses incurred in the preparation and service of notices of
Default and consultations in connection therewith, whether or not a legal action
is subsequently commenced in connection with such Default or resulting Breach.
32. LESSOR'S ACCESS; SHOWING PREMISES; REPAIRS. Lessor and Lessor's agents shall
have the right to enter the Premises at any time, in the case of an emergency,
and otherwise at reasonable times upon twenty-four (24) hours' prior notice for
the purpose of showing the same to prospective purchasers, lenders, or (during
the last nine (9) months of the Lease term) lessees, and making such
alterations, repairs, improvements or additions to the Premises or to the
building of which they are a part, as Lessor may reasonably deem necessary.
Lessor may at any time place on or about the Premises or building any ordinary
"For Sale" signs and Lessor may at any time during the last one hundred twenty
(120) days of the term hereof place on or about the Premises any ordinary "For
Lease" signs. All such activities of Lessor shall be without abatement of rent
or liability to Lessee. (See Paragraph 49 k.)
33. AUCTIONS. Lessee shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises without first having
obtained Lessor's prior written consent. Notwithstanding anything to the
contrary in this Lease, Lessor shall not be obligated to exercise any standard
of reasonableness in determining whether to grant such consent.
34. SIGNS. Lessee shall not place any sign upon the Premises, except that Lessee
may, with Lessor's prior written consent, install (but not on the roof) such
signs as are reasonably required to advertise Lessee's own business. The
installation of any sign on the Premises by or for Lessee shall be subject to
the provisions of Paragraph 7 (Maintenance, Repairs, Utility Installations,
Trade Fixtures and Alterations). (See Paragraph 49 1.)
35. TERMINATION; MERGER. Unless specifically stated otherwise in writing by
Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual
termination or cancellation hereof, or a termination hereof by Lessor for Breach
by Lessee, shall automatically terminate any sublease or lesser estate in the
Premises; provided, however, Lessor shall, in the event of any such surrender,
termination or cancellation, have the option to continue any one or all of any
existing subtenancies. Lessor's failure within ten (10) days following any such
event to make a written election to the contrary by written notice to the holder
of any such lesser interest, shall constitute Lessor's election to have such
event constitute the termination of such interest.
36. CONSENTS.
(a) Except for Paragraph 33 hereof (Auctions) or as otherwise
provided herein, wherever in this Lease the consent of a Party is required to an
act by or for the other Party, such consent shall not be unreasonably withheld
or delayed. Lessor's actual reasonable costs and expenses (including but not
limited to architects', attorneys', engineers' or other consultants' fees)
incurred in the consideration of, or response to, a request by Lessee for any
Lessor consent pertaining to this Lease or the Premises, including but not
limited to consents to an assignment, a subletting or the presence or use of a
Hazardous Substance, practice or storage tank, shall be paid by Lessee to Lessor
upon receipt of an invoice and supporting documentation therefor. Subject to
Paragraph 12.2(e) (applicable to assignment or subletting), Lessor may, as a
condition to considering any such request by Lessee, require that Lessee deposit
with Lessor an amount of money (in addition to the Security Deposit held under
Paragraph 5) reasonably calculated by Lessor to represent the cost Lessor will
incur in considering and responding to Lessee's request. Except as otherwise
provided, any unused portion of said deposit shall be refunded to Lessee without
interest. Lessor's consent to any act, assignment of this Lease or subletting of
the Premises by Lessee shall not constitute an acknowledgment that no Default or
Breach by Lessee of this Lease exists, nor shall such consent be deemed a waiver
of any then existing Default or Breach, except as may be otherwise specifically
stated in writing by Lessor at the time of such consent.
(b) All conditions to Lessor's consent authorized by this
Lease are acknowledged by Lessee as being reasonable. The failure to specify
herein any particular condition to Lessor's consent shall not preclude the
imposition by Lessor at the time of consent of such further or other conditions
as are then reasonable with reference to the particular matter for which consent
is being given.
38. QUIET POSSESSION. Upon payment by Lessee of the rent for the Premises and
the observance and performance of all of the covenants, conditions and
provisions on Lessee's part to be observed and performed under this Lease,
Lessee shall have quiet possession of the Premises for the entire term hereof
subject to all of the provisions of this Lease.
39. OPTIONS.
39.1 DEFINITION. As used in this Paragraph 39 the word "OPTION" has the
following meaning: (a) the right to extend the term of this Lease or to renew
this Lease or to extend or renew any lease that Lessee has on other property of
Lessor; (b) the right of first refusal to lease the Premises or the right of
first offer to lease the Premises or the right of first refusal to lease other
property of Lessor or the right of first offer to lease other property of
Lessor; (c) the right to purchase the Premises, or the right of first refusal to
purchase the Premises, or the right of first offer to purchase the Premises, or
the right to purchase other property of Lessor, or the right of first refusal to
purchase other property of Lessor, or the right of first offer to purchase other
property of Lessor.
39.2 OPTIONS PERSONAL TO ORIGINAL LESSEE. Each Option granted to Lessee
in this Lease is personal to the original Lessee named in Paragraph 1.1 hereof,
and cannot be voluntarily or involuntarily assigned or exercised by any person
or entity other than said original Lessee while the original Lessee is in full
and actual possession of the Premises and without the intention of thereafter
assigning or subletting. The Options, if any, herein granted to Lessee are not
assignable, either as a part of an assignment of this Lease or separately or
apart therefrom, and no Option may be separated from this Lease in any manner,
by reservation or otherwise provided, however, that the Options may be assigned
to and exercised by any Lessee Affiliate.
39.3 MULTIPLE OPTIONS. In the event that Lessee has any multiple
Options to extend or renew this Lease, a later option cannot be exercised unless
the prior Options to extend or renew this Lease have been validly exercised.
<PAGE>
39.4 EFFECT OF DEFAULT ON OPTIONS.
(a) Lessee shall have no right to exercise an Option,
notwithstanding any provision in the grant of Option to the contrary: (i) during
the period commencing with the giving of any notice of Default under Paragraph
13.1 and continuing until the noticed Default is cured, or (ii) during the
period of time any monetary obligation due Lessor from Lessee is unpaid (without
regard to whether notice thereof is given Lessee), or (iii) during the time
Lessee is in Breach of this Lease, or (iv) in the event that Lessor has given to
Lessee three (3) or more notices of Default under Paragraph 13.1, whether or not
the Defaults are cured, during the twelve (12) month period immediately
preceding the exercise of the Option.
(b) The period of time within which an Option may be exercised
shall not be extended or enlarged by reason of Lessee's inability to exercise an
Option because of the provisions of Paragraph 39.4(a).
(c) All rights of Lessee under the provisions of an Option
shall terminate and be of no further force or effect, notwithstanding Lessee's
due and timely exercise of the Option, if, after such exercise and during the
term of this Lease, (i) Lessee (fails to pay to Lessor a monetary obligation of
Lessee for a period of thirty (30) days after such obligation becomes due
(without any necessity of Lessor to give notice thereof to Lessee), or (ii)
Lessor gives to Lessee three or more notices of Default under Paragraph 13.1
during any twelve month period, whether or not the Defaults are cured, or (iii)
If Lessee commits a Breach of this Lease.
40. MULTIPLE BUILDINGS. If the Premises are part of a group of buildings
controlled by Lessor, Lessee agrees that it will abide by, keep and observe all
reasonable rules and regulations which Lessor may make from time to time for the
management, safety, care, and cleanliness of the grounds, the parking and
unloading of vehicles and the preservation of good order, as well as for the
convenience of other occupants or tenants of such other buildings and their
invitees, and that Lessee will pay its fair share of common expenses incurred in
connection therewith.
41. SECURITY MEASURES. Lessee hereby acknowledges that the rental payable to
Lessor hereunder does not include the cost of guard service or other security
measures, and that Lessor shall have no obligation whatsoever to provide same.
Lessee assumes all responsibility for the protection of the Premises, Lessee,
its agents and invitees and their property from the acts of third parties.
42. RESERVATIONS. Lessor reserves to itself the right, from time to time, to
grant, without the consent or joinder of Lessee, such easements, rights and
dedications that Lessor deems necessary, and to cause the recordation of parcel
maps and restrictions, so long as such easements, rights, dedications, maps and
restrictions do not unreasonably interfere with the use of the Premises by
Lessee. Lessee agrees to sign any documents reasonably requested by Lessor to
effectuate any such easement rights, dedication, map or restrictions.
43. PERFORMANCE UNDER PROTEST. If at any time a dispute shall arise as to any
amount or sum of money to be paid by one Party to the other under the provisions
hereof, the Party against whom the obligation to pay the money is asserted shall
have the right to make payment "under protest" and such payment shall not be
regarded as a voluntary payment and there shall survive the right on the part of
said Party to institute suit for recovery of such sum. If it shall be adjudged
that there was no legal obligation on the part of said Party to pay such sum or
any part thereof, said Party shall be entitled to recover such sum or so much
thereof as it was not legally required to pay under the provisions of this
Lease.
44. AUTHORITY. If either Party hereto is a corporation, trust, or general or
limited partnership, each individual executing this Lease on behalf of such
entity represents and warrants that he or she is duly authorized to execute and
deliver this Lease on its behalf. If Lessee is a corporation, trust or
partnership, Lessee shall, within thirty (30) days after request by Lessor,
deliver to Lessor evidence satisfactory to Lessor of such authority.
45. CONFLICT. Any conflict between the printed provisions of this Lease and the
typewritten or handwritten provisions shall be controlled by the typewritten or
handwritten provisions.
46. OFFER. Preparation of this Lease by Lessor or Lessor's agent and submission
of same to Lessee shall not be deemed an offer to lease to Lessee. This Lease is
not intended to be binding until executed by all Parties hereto.
47. AMENDMENTS. This Lease may be modified only in writing, signed by the
parties in interest at the time of the modification. The parties shall amend
this Lease from time to time to reflect any adjustments that are made to the
Base Rent or other rent payable under this Lease. As long as they do not
materially change Lessee's obligations hereunder, Lessee agrees to make such
reasonable non-monetary modifications to this Lease as may be reasonably
required by an institutional, insurance company, or pension plan Lender in
connection with the obtaining of normal financing or refinancing of the property
of which the Premises are a part.
48. MULTIPLE PARTIES. Except as otherwise expressly provided herein, if more
than one person or entity is named herein as either Lessor or Lessee, the
obligations of such multiple parties shall be the joint and several
responsibility of all persons or entities named herein as such Lessor or Lessee.
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR
INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.
IF THIS LEASE HAS BEEN FILLED IN, IT HAS BEEN PREPARED FOR SUBMISSION
TO YOUR ATTORNEY FOR HIS APPROVAL. FURTHER, EXPERTS SHOULD BE CONSULTED
TO EVALUATE THE CONDITION OF THE PROPERTY AS TO THE POSSIBLE PRESENCE
OF ASBESTOS, STORAGE TANKS OR HAZARDOUS SUBSTANCES. NO REPRESENTATION
OR RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE
ASSOCIATION OR BY THE REAL ESTATE BROKER(S) OR THEIR AGENTS OR
EMPLOYEES AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX
CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES: THE
PARTIES SHALL RELY SOLELY UPON THE ADVICE OF THEIR OWN COUNSEL AS TO
THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE. IF THE SUBJECT PROPERTY
IS LOCATED IN A STATE OTHER THAN CALIFORNIA, AN ATTORNEY FROM THE STATE
WHERE THE PROPERTY IS LOCATED SHOULD BE CONSULTED.
The parties hereto have executed this Lease at the place on the dates specified
above to their respective signatures.
<TABLE>
<S> <C>
Executed at Carlsbad CA Executed at SAN DIEGO, CA
on September 19, 2001 on September 19, 2001
by LESSOR: by LESSEE:
BLACKMORE AIRPORT CENTRE, A CALIFORNIA CANCERVAX CORPORATION
LIMITED PARTNERSHIP
By: /s/ Blackmore Family Partners, a California By: /s/ David F. Hale
-------------------------------------------- -----------------------
Name Printed: General Partnership, Name Printed: David F. Hale
Title: General Partner Title: President & CEO
By: /s/ Allen J. Blackmore By: /s/ William R. LaRue
-------------------------- --------------------------
Name Printed: Allen Joseph Blackmore, Trustee of Name Printed: William R. LaRue
the Blackmore Family Trust, restated 1995,
Title: General Partner Title: Vice President & CFO
Address: 1530 Faraday Ave, Suite 170, Carlsbad, CA 92008 Address: 5931 Darwin Ct., Carlsbad, CA 92008
Tel No. (760) 804-9600 Fax No. (760) 804-9607 Tel. No. [ILLEGIBLE] Fax No. [ILLEGIBLE]
Mailing Address: Post Office Box 1810
Rancho Santa Fe, CA 92067
</TABLE>
NET
PAGE 10
NOTICE: These forms are often modified to meet changing requirements of law and
industry needs. Always write or call to make sure you are utilizing the
most current form: American Industrial Real Estate Association, 345
South Figueroa Street, Suite M-1, Los Angeles, CA 90071. (213)
687-6777. Fax No. (213) 607-8616.
<PAGE>
ADDENDUM TO STANDARD INDUSTRIAL/COMMERCIAL SINGLE-TENANT LEASE-NET
BY AND BETWEEN
BLACKMORE AIRPORT CENTRE, A CALIFORNIA LIMITED PARTNERSHIP, LESSOR
AND
CANCERVAX CORPORATION, LESSEE
DATED AUGUST 31, 2001
49. LEASE INSERTIONS:. The following inserts are hereby incorporated into
the Lease where indicated in the Lease:
a.) PARAGRAPH 3.3.--DELAY IN POSSESSION. Add the following at the end of
Paragraph 3.3:
If an event of damage or destruction to the Tenant Improvements shall
occur during construction of the Tenant Improvements (as provided in
Exhibit B), then the Rent due hereunder shall be abated for the period
of time that the completion of the Tenant Improvements is delayed due
to such damage or destruction.
b.) PARAGRAPH 6.2 HAZARDOUS SUBSTANCES.
i. SUBPARAGRAPH 6.2(c) - INDEMNIFICATION. Add the following at
the end of Subparagraph 6.2(c):
Notwithstanding any other provision of this Lease, Lessor represents
that it is unaware of any Hazardous Substances, including but not
limited to any solvents, metals, petroleum, lead-based paint, PCBs, or
asbestos in the Building or Premises. Notwithstanding this
representation, and in addition to the indemnity provided in Paragraph
6.2(c), Lessor shall indemnify and hold Lessee harmless against and
from all liability and claims of any kind for loss or damage to Lessee,
its employees or agents, and for expenses and fees of Lessee (including
but not limited to costs, expenses and attorneys' fees), incurred,
directly or indirectly, as a result of the existence of Hazardous
Substances in, on, under or about the Premises as of the commencement
of this Lease
ii. PARAGRAPH 6.2 CLARIFICATION OF INTENT. Lessor acknowledges
that it is not the intent of this Paragraph 6.2 to prohibit Lessee from
operating its business for the permitted uses described in Paragraph
1.8. Notwithstanding the fact that the Lessee's use of a Hazardous
Substance in the Premises is a Reportable Use, Lessee may operate it
business so long as the use or presence of Hazardous Substances is
strictly and properly monitored according to all applicable laws. As a
material inducement to Lessor to allow Tenant to store and use
Hazardous Substances in connection with its business, which constitute
a Reportable Use, Lessee agrees to deliver to Lessor prior to allowing
any such Hazardous Substances to be located on or about the Premises, a
list identifying each type of Hazardous Substances constituting a
Reportable Use which will be present on or about the Premises and
setting forth any and all governmental approvals or permits required in
connection with the presence of such Hazardous Substances on or about
the Premises ("Hazardous Materials List"). Lessee shall deliver to
Lessor an updated Hazardous Materials List at least once a year and
shall also deliver an updated list before any new Hazardous Substances
are brought onto the Premises or on or before the date Lessee obtains
any additional permits or approvals.
c.) PARAGRAPH 7.2 - LESSOR'S OBLIGATIONS. Add the following at the end of
Paragraph 7.2:
Notwithstanding the foregoing, Lessee shall be responsible for any
damages caused by Lessee's use of the Premises or the design and
installation of Lessee's Tenant Improvements.
d.) SUBPARAGRAPH 7.3(a) - DEFINITIONS; CONSENT REQUIRED. Add the following
to the end of Subparagraph 7.3 (a):
"Alterations" shall not include the Tenant Improvements as described in
Exhibit B.
e.) SUBPARAGRAPH 7.4(c) - SURRENDER/RESTORATION. Add the following at the
end of Subparagraph 7.4.(c):
Any Trade Fixtures and Equipment purchased by Lessee and installed in
the Premises, which Lessee intends to remove from the Premises upon the
expiration or earlier termination of this Lease, shall be separately
identified on a list ("Equipment List") to be compiled by Lessee and
acknowledged by Lessor prior to installation. The Trade Fixtures and
Equipment on the Equipment List shall be and remain the sole property
of Lessee. Said Fixtures and Equipment may be removed from the Premises
by Lessee at any time during the term of this Lease and Lessee shall
restore the Premises as required in this Paragraph 7.4.
f.) PARAGRAPH 8.7 - INDEMNITY. Add the following at the end of Paragraph
8.7:
Lessor shall indemnify, protect, defend and hold Lessee harmless from
and against any and all claims, damages, costs, liens, judgments,
penalties, permits, attorney's and consultant's fees, expenses and/or
liabilities (but not including injuries to Lessee's business or for any
loss of income or profit therefrom) arising out of the gross negligence
or willful misconduct of Lessor or out of any Default or Breach by
Lessor in the performance of any obligation on Lessor's part to be
performed under this Lease.
<PAGE>
Lease Insertions, continued.
g.) PARAGRAPH 9.2 - PARTIAL DAMAGE - INSURED LOSS. Add the following at the
end of Paragraph 9.2:
Notwithstanding the foregoing, if Lessor does not receive insurance
proceeds because of Lessor's failure to maintain the insurance required
pursuant to Paragraph 8.3, Lessor shall have no right to terminate this
Lease as a result of Lessor's failure to receive funds to cover repairs to
the Premises. Further, if an event of Partial Damage occurs that is an
Insured Loss and Lessor reasonably estimates that the repair cannot be
completed within one year from the commencement of such repair, then prior
to the commencement of repair of the damage Lessor shall send a notice to
Lessee indicating that the estimated time to repair the Partial Damage
exceeds one (1) year. Upon receipt of such notice, Lessee shall have an
option, which option expires five (5) business days after Lessee's receipt
of such notice, in which to give Lessor notice that Lessee has elected to
terminate this Lease. If elected, such termination shall become effective
at the end of such five (5) business day period. However, once Lessor
commences the repair of the damage following the end of the five (5)
business day period, Lessee shall have no further right to terminate the
Lease, regardless of the actual amount of time the repair of the damage
actually takes.
h.) PARAGRAPH 9.4 - TOTAL DESTRUCTION: Add the following to the end of
Paragraph 9.4:
In the event of a Premises Total Destruction, Lessor shall promptly
notify Lessee in writing of its determination that the destruction
constitutes Premises Total Destruction and Lessee may, notwithstanding
such notice, elect to preserve this Lease by delivering timely
notification thereof to Lessor, given within ten (10) business days
following receipt of Lessor's notice, whereby Lessee commits to pay to
Lessor any shortage in proceeds of insurance in accordance with
Paragraph 9.2 or Paragraph 9.3, as applicable; provided that such
preservation right shall be subject to Lessor's right to terminate this
Lease as provided in Paragraph 9.5.
i.) PARAGRAPH 10.2 - DEFINITION OF "REAL PROPERTY TAXES". Add the following
at the end of Paragraph 10.2:
Notwithstanding the foregoing, Real Property Taxes shall not include
(a) inheritance, estate or franchise taxes imposed upon or assessed
against the Premises.
j.) PARAGRAPH 12.1 (b). Add the following at the end of Paragraph 12.1 (b):
Notwithstanding anything to the contrary contained herein, Lessor's
consent shall not be required for any of the following transfers (each
of which shall be a "Permitted Transfer"): (1) to any entity resulting
from the merger, consolidation or other reorganization of Lessee,
whether or not Lessee is the surviving entity; or (2) to any person or
legal entity which acquires all or substantially all of the assets or
stock of Lessee (each of the foregoing is referred to as a "Lessee
Affiliate"), provided such Lessee Affiliate has a net worth in excess
of $25,000,000.00; or (3) following Lessee's execution of a guaranty of
the Lease in a form reasonably acceptable to Lessor, to any entity
which in which Lessee holds both at least 50% of the ownership
interests and voting control of the entity.
k.) PARAGRAPH 32 - LESSOR'S ACCESS. Add the following at the end of
Paragraph 32:
Lessor shall not permit such activities to unreasonably interfere with
Lessee's (or any sublessee's) use of the Premises.
l.) PARAGRAPH 34 - SIGNS. Add the following at the end of Paragraph 34:
Lessee shall not be entitled to install building and monument signs for
the Premises as part of the proceeds of the Tenant Improvement
Allowance. Such signs shall be installed in conformance with all sign
ordinances and regulations of all governmental agencies and the
Carlsbad Research Center's CC&R's. All such signage shall be reviewed
and approved by Lessor, the City of Carlsbad and the Architectural
Review Committee of the Carlsbad Research Center and permitted by the
City of Carlsbad prior to manufacture and installation. Lessor's
approval of signage shall not be unreasonably withheld.
50. BASE RENT INCREASES:
On July 1, 2003, the monthly base rent shall be increased to
$116,480.00 per month plus Operating Expenses;
On July 1, 2004, the monthly base rent shall be increased to
$121,140.00 per month plus Operating Expenses;
On July 1, 2005, the monthly base rent shall be increased to
$125,950.00 per month plus Operating Expenses;
On July 1, 2006, the monthly base rent shall be increased to
$131,025.00 per month plus Operating Expenses;
On July 1, 2007, the monthly base rent shall be increased to
$136,260.00 per month plus Operating Expenses;
On July 1, 2008, the monthly base rent shall be increased to
$141,710.00 per month plus Operating Expenses;
On July 1, 2009, the monthly base rent shall be increased to
$147,380.00 per month plus Operating Expenses;
On July 1, 2010, the monthly base rent shall be increased to
$153,275.00 per month plus Operating Expenses;
On July 1, 2011, the monthly base rent shall be increased to
$159,400.00 per month plus Operating Expenses.
<PAGE>
51. SECURITY DEPOSIT:
a. In lieu of a cash Security Deposit as provided in Paragraph 1.7 of this
Lease, Lessee shall furnish Lessor with an Irrevocable Standby Letter
of Credit ("Letter of Credit") in a form reasonably acceptable to
Lessor, terminating no earlier than 30 days beyond the expiration date
of the Lease or any extension thereof, naming Blackmore Airport Centre,
a California limited partnership, as beneficiary, from an institution
acceptable to Lessor (which institution shall be acceptable to Lessor
if it is a bank of the size and quality of Bank of America, Wells
Fargo, Citibank, Union Bank of California, US Bank or similar "money
center" banks) in the original amount of $1,350,000 to be used by
Lessor to secure Lessee's faithful performance of all terms, provisions
and conditions of this Lease. Lessee shall furnish the Letter of Credit
to Lessor within five (5) business days of the execution of this Lease.
If during the course of this Lease or any extension thereof, Lessor is
notified by the bank issuing said Letter of Credit that it will not be
renewed, then such notification shall constitute a Default and material
breach of this Lease and allow Lessor to draw upon such Letter of
Credit, unless fifteen (15) days prior to the expiration of such Letter
of Credit, Lessee delivers to Lessor another Letter of Credit in the
required amount by an institution and in a form reasonably approved by
Lessor. Upon any Default under the Lease (after expiration of the
applicable cure periods defined in Paragraph 13), Lessor shall be
permitted to draw upon the Letter of Credit and use the proceeds of the
Letter of Credit as provided in Paragraph 5 of the Lease. Upon the cure
of Lessee's Default resulting in a draw upon the Letter of Credit, as
long as Lessee is not in default under the Lease, Lessee shall have the
right to replace the cash security deposit held by Lessor with a new
letter of credit which meets the criteria of the Letter of Credit under
this Paragraph 51.
If Lessor draws upon the Letter of Credit, Lessor shall hold any
amounts not used to cure Lessee's Default under the Lease as a cash
Security Deposit and Lessee shall have the obligation to deposit
additional cash with Lessor so that the cash Security Deposit is at
least equal to the amount of the Letter of Credit that Lessee would
otherwise be required to maintain pursuant to the provisions below.
b. Lessor and Lessee acknowledge that the amount of the Letter of Credit
may fluctuate during the Term of the Lease. On or before the 20th day
of every month of the Lease Term, Lessee shall provide to Lessor (x) a
financial statement for the immediately preceding month certified as
true, complete and correct by the CFO of Lessee that includes an
accurate cash balance of the Lessee and (y) supporting bank statements
also certified by the CFO to be true, complete and correct (such
statements as of a date no earlier than the last day of the immediately
preceding month) which indicate the balance of cash held by the Lessor
in such institution(s) as of that date. Lessor shall be required to
maintain the following amount of Letter of Credit, based on the amount
of cash shown on the certified financial statements and certified bank
statements:
1. If the cash balance is less than $5,000,000, then Lessee shall
deliver to Lessor with the financial statements and bank
statements a replacement Letter of Credit in the amount of
$1,900,000;
2. If the cash balance is between $5,000,000 and $50,000,000,
then the amount of the Letter of Credit shall be $1,350,000
and if Lessor was at that time holding a Letter of Credit in
the amount of $350,000, then Lessee shall deliver to Lessor
together with the financial statements and bank statements a
replacement Letter of Credit in the amount of $1,350,000; and
3. If the cash balance is greater than $50,000,000, then the
amount of the Letter of Credit shall be reduced to $350,000.
If the amount of the Letter of Credit at the time of delivery of
the financial statements and bank statements is to be modified,
then Lessor shall cooperate in returning the Letter of Credit it
then holds as soon as it receives the replacement Letter of Credit
in the modified amount.
52. OPERATING EXPENSES: Notwithstanding anything to the contrary contained
herein, in addition to the monthly base rent, Lessee shall reimburse Lessor for
the following:
a) Property Taxes: Estimated to be $116.667.00 per year;
b) Property Insurance: Estimated to be $7.800.00 per year:
c) Landscape Maintenance: Notwithstanding anything to the contrary
contained in Paragraph 7 of this Lease, it is understood by the parties
hereto that Lessor shall maintain the landscaping for the Building at
Lessee's expense. Lessor shall employ a landscaping contractor to
maintain the landscaping to include fertilizing, changing of annual
colored flowers at entrance, tree trimming and replacing of dead plants
for the Building, and Lessee shall reimburse Lessor monthly in addition
to rent for such maintenance. Such maintenance is estimated to be
$6,300.00 per year, subject to increase.
CRC Common Area Maintenance Fees: Notwithstanding anything to the contrary
contained in Paragraph 7 of this Lease, it is understood by the parties
hereto that there exists a monthly common area maintenance fee charged by
Carlsbad Research Center (CRC). Said maintenance for the Building is
currently $4,850.00 per year, subject to increase.
<PAGE>
Operating Expenses, continued.
d) HVAC Maintenance: Notwithstanding anything to the contrary contained in
Paragraph 7 of this Lease, Lessor shall procure and maintain, at
Lessee's expense, an air conditioning system maintenance contract,
providing for quarterly service. Such maintenance is estimated to be
$10,000.00 per year, subject to increase.
e) Water: Lessee acknowledges that the Building is equipped with three (3)
water meters (Building, Landscape and Fire Sprinkler). Lessor shall
maintain the three water meter accounts in its name and Lessee shall
reimburse Lessor for the cost thereof.
f) Fire Sprinkler Maintenance/Monitoring: Notwithstanding anything to the
contrary contained in Paragraph 7 of this Lease, it is understood by
the parties hereto that the Building is equipped with a fire sprinkler
alarm system for which Lessee shall be responsible. Upon substantial
completion of the tenant improvements, the contract with ADT Security
shall be transferred into Cancer Vax's name. The current cost of the
basic service is estimated to be $800.00 per year. Lessor shall have no
liability to Lessee with respect to the fire sprinkler maintenance and
monitoring equipment.
g) Fire Sprinkler Testing and Certification: It is understood by the
parties hereto that the building is equipped with an automatic fire
sprinkler system, which according to state law, must be serviced and
inspected quarterly and certified every five (5) years. Notwithstanding
anything to the contrary contained in Paragraph 7 of this lease, Lessor
shall procure and maintain a fire sprinkler maintenance contract
providing for the required quarterly inspections and service and five
(5) year certifications. Annual fire sprinkler testing is estimated to
be $900.00 per year, subject to increase. Lessee shall reimburse Lessor
for these services.
h) Roof Inspections: Notwithstanding anything to the contrary contained in
Paragraph 7 of this Lease, Lessor shall procure and maintain, at
Lessee's expense, a roof inspection contract, providing for bi-annual
inspections of the roof. Such inspection is currently $75.00 per
inspection, subject to increase.
i) Exposed Aggregate Concrete Sealer Maintenance: It is understood by the
parties hereto that the exposed aggregate paving areas located at the
front entrance and side walkways of the Premises have been treated with
a clear concrete sealer. Said sealer must be reapplied a minimum of two
times per year, or as needed, in order to protect these areas from
automobile oils and deterioration. Notwithstanding anything to the
contrary contained in Paragraph 7 of this Lease, Lessor shall use its
good faith efforts to determine when it is appropriate to have the
sealer reapplied to these areas and Lessee shall reimburse Lessor upon
demand for these costs. It is estimated that the cost to install the
sealer will be $3,000.00 per year, subject to increase.
j) Fossil Filter Maintenance: The on-site storm drain system is equipped
with one or more 6" continuous Storm Water Filtration System ("SWFS")
to effectively prohibit non-storm water discharges into the storm
sewer. Notwithstanding anything to the contrary contained in Paragraph
7 of this Lease, Lessor shall procure and maintain, at Lessee's
expense, a preventative maintenance contract to inspect, service and
maintain the fossil filter three (3) times per year. The cost of this
service is estimated to be $200.00 per year per SWFS, subject to
increase.
k) Backflow Maintenance: Each water meter is equipped with a backflow
maintenance device that must be tested annually to prevent any water
from flowing back into the public water supply. The annual backflow
maintenance testing is currently $300.00, subject to increase.
l) Window Washing: It is understood by the parties hereto that Lessor
shall procure and maintain a contract providing for interior and
exterior window washing on a quarterly basis and Lessee shall reimburse
Lessor monthly in addition to rent for such maintenance. Such
maintenance is estimated to be $2,800.00 per year, subject to increase.
m) Elevator Maintenance: It is understood by the parties hereto that if
Lessee elects to install an elevator to service the Building as part of
its Tenant Improvements, said elevator must be inspected, serviced and
adjusted monthly in accordance with the manufacturer's specifications.
The estimated cost for the inspections, excluding repairs, is $1,800.00
per year, subject to increase.
The initial annual budget cap for the Operating Expenses shall be
determined prior to the commencement date of the lease. If at any time
during the term of the Lease, the Operating Expenses exceed the budget cap
(which budget cap shall increase by 4% each year), then Lessee shall have
the option, but not the obligation, to propose to Lessor different lower
cost vendors to perform the services listed in 52 c, e, g, h, j, k, m and n
above. If Lessor approves a vendor proposed by Lessee (such approval not to
be unreasonably withheld), then Lessor shall contract with the vendor
proposed by Lessee to perform such services.
53. REASONABLE EXPENDITURES: Any expenditure by a party permitted or
required under the Lease, for which such party is entitled to demand and does
demand reimbursement from the other party, shall be limited to the fair market
value of the goods and services involved, shall be reasonably incurred and shall
be substantiated by documentary evidence available for inspection and review by
the other party or its representatives by appointment during normal business
hours.
54. YEAR END OPERATING EXPENSE RECONCILIATION: The adjustments to the
annual Operating expenses amount shall be made in accordance with the following
procedures:
(i) On or before December 15 of each Calendar Year, Lessor shall
endeavor to provide Lessee notice of its reasonable estimate of the
amounts payable under this Lease for the ensuing Calendar Year.
<PAGE>
Year End Operating Expense Reconciliation, continued.
(ii) As soon as reasonably possible following the close of each
Calendar Year of this Lease, Lessor shall deliver to Lessee a statement
reconciling Lessee's estimated monthly operating budget payments with
the actual operating expenses for the preceding Calendar Year. Lessor
shall include in this statement a reasonably detailed description of
the Operating Expenses. If, on the basis of such statement, Lessee owes
an amount that is less than the estimated payments for such Calendar
Year previously made by Lessee, Lessor shall credit such excess to
Lessee's next monthly payment of Rent or, if applicable, Extended Term
Rent. If no further Rent is due or payable under this Lease, Lessor
shall refund such excess to Lessee along with its delivery of such
statement. The Lessor's obligations under this Paragraph 54 shall
survive the expiration of this Lease. If, on the basis of such
statement, Lessee owes an amount that is more than the estimated
payments for such Calendar Year previously made by Lessee, Lessee shall
pay the deficiency to Lessor within ten (10) days after delivery of the
statement.
(iii) With respect to any Operating Expenses incurred by
Lessor on behalf of Lessee that are not included in the estimate Lessor
provides to Lessee on or before December 1 of each Calendar Year,
including, without limitation, non-recurring repair expenses, Lessor
shall provide notice to Lessee of such additional Operating Expenses
and Lessee shall reimburse such expenses to Lessor within ten (10) days
of its receipt of such notice.
55. PARKING: Lessee shall have the exclusive use of the parking lot on the
Premises, which lot shall have minimum of two-hundred (210) on site parking
spaces. Said parking areas of the Premises shall be used only for parking of
automobiles, and the loading and unloading of trucks. The use by Lessee of those
areas for storage of materials (including pallets) is expressly prohibited. All
material shall be stored within the freestanding main building.
56. ROOF MAINTENANCE: Lessee shall not take any action to cause the GAP
Materials Corporation Liberty Guarantee attached hereto and made a part hereof
as Exhibit E of the Lease to become ineffective including, without limitation,
those actions described in items 5-8 in the "Exclusions From Coverage" in such
guarantee.
57. ROOFTOP RIGHTS: Subject to the provisions of Paragraph 56, after
receipt of approval by Lessor, and in compliance with all applicable laws,
regulations and Carlsbad Research Center CC&R's, Lessee shall have the right, at
Lessee's sole cost, to reasonably access and use the building's (i) roof to
install, repair and maintain upon the building's roof, telecommunication
devices, such as satellite dishes and antennae or other similar devices, for the
purpose of receiving and sending radio, television, computer, telephone or other
communications signals and (ii) internal passageways, shafts, utility
connections, risers and conduits in order to connect such telecommunication
devices to the Premises. Tenant will be responsible for any damage to the
building caused by installing or removing such devices including, if necessary
replacement of the roof.
58. LIEN WAIVER: Lessor acknowledges Lessee's right to finance and to
secure under the Uniform Commercial Code, inventory, furnishings, furniture,
equipment, machinery, leasehold improvements and other personal property located
in or at the Premises, and Lessor agrees, upon Lessee's request, to execute the
waiver forms attached hereto as Exhibit G releasing liens in favor of any
purchase money seller, lessor or lender who has financed or may finance in the
future such items. Without limiting the effectiveness of the foregoing, provided
that no default shall have occurred and be continuing, Lessor shall, upon the
request of Lessee, and at the Lessee's sole cost and expense (including Lessor's
reasonable attorney fees incurred in relation thereto), execute and deliver any
commercially reasonable instruments necessary or appropriate to confirm any such
grant, release, dedication, transfer, annexation or amendment to any person or
entity permitted under this paragraph including Lessor waivers with respect to
any of the foregoing.
59. BIOHAZARD WASTE STORAGE: Lessee shall have the right to install and
operate, in accordance with all applicable laws, a biohazard waste disposal bin
for Lessee's exclusive use on the Premises, for the temporary storage of
biohazardous waste. Notwithstanding anything to the contrary contained in the
Lease, Lessee shall be responsible for all fees and costs (including, without
limitation, licensing and permitting fees) of keeping such units in good order,
condition and repair (including, without limitation, repairing and maintaining
all safety and security systems associated with such disposal bin) in accordance
with all applicable laws. Lessee shall provide Lessor with copies of all reports
and applications related to such disposal bin simultaneously with submission. At
the earlier of the termination of the Lease or Lessee's termination of its such
biohazardous waste disposal bin, Lessee will retain a qualified environmental
consultant, at its sole cost, who is acceptable to Lessor, to perform an exit
assessment of those portions of the Common Areas: (a) where the biohazard waste
disposal bin was located prior to its removal, and (b) over which the path of
access between the Premises and the units was located and will remedy, at
Lessee's sole cost and expense, all items identified in such assessment.
<PAGE>
60. GENERATOR RIGHTS: Subject to Lessor's approval as to the location and
plans and specifications for the design, operation, installation and maintenance
therefore, Lessee may, install an emergency backup diesel-powered generator on
the Premises. Lessor may require as a condition of installation of the emergency
generator that Lessee install such protective modifications as Lessor reasonably
deems necessary to prevent or contain any release or spill of Hazardous
Materials, and Lessee shall ensure that the backup generator does not result
in any Hazardous Materials being released to the Premises. Lessee shall install,
repair, maintain and 'operate the backup generator at its sole cost and expense
in a good workmanlike manner in accordance with all applicable laws. Prior to
commencement of installation of the backup generator, Lessee shall obtain and
provide Lessor with copies of all permits and other governmental approvals
required for installation and operation of the backup generator, which shall be
obtained by Lessee at its sole cost and expense.
61. ENTRANCE/EXIT ASSESSMENTS:
(a) Entrance Assessment. No earlier than 30 days prior to
substantial completion of the Tenant Improvements, but prior to the Commencement
Date, Lessor shall conduct an "Entrance Assessment," consisting of a Phase I
Environmental Assessment and such other tests as may be necessary including the
following studies and assessments:
A. Phase I Environmental Assessment.
B. The following additional assessments, inspections and
monitoring plans:
1. Interior Site Assessment consisting of a visual
inspection of all bench and hood sinks and readily accessible drain
lines provided as part of the Tenant Improvements for signs of loss of
integrity and leakage. The Interior Site Assessment shall include
detailed written documentation of all observations and dated photos to
document the existing condition thereof.
2. Wastewater Collection System Assessment consisting of
a flush and clean-out of all discharge piping and traps with
observation of effluent during the clean-out. Videotaping of the
Wastewater Collection System shall be required if the flush is observed
to contain constituents which could indicate a break in said System.
3. Laboratory Hoods and Exhaust System Inspection
consisting of an inspection of the laboratory hoods and exhaust system
provided as part of the Tenant Improvements for signs of loss of
integrity and leakage. Such inspection shall include inspection of the
roof area.
4. Sampling and Analysis Plan to be developed if the
consultant, based on the foregoing assessments and the Phase I
Environmental Assessment performed pursuant to this Entrance Assessment
recommends further sampling and analysis. Any such Sampling and
Analysis Plan, and the results thereof, shall be included in the Exit
Assessment.
Lessee shall receive a copy of the report(s) of the Lessor's Entrance
Assessment, and said report(s) shall be deemed to be the baseline
physical condition of the Premises upon Lessee's occupancy. The cost of
the Phase I portion of the Lessor's Entrance Assessment shall be paid
by Lessor and the remainder, including Items B 1-4 shall be paid for by
Lessee. The Entrance Assessment shall be performed by an independent
laboratory and consultant with expertise in performing environmental
analyses of biotechnology laboratory facilities.
(b) Exit Assessment. No earlier than 30 days prior to the
expiration or earlier termination of the Lease, but prior to Lessee's surrender
of the Premises to Lessor, Lessee shall conduct an "Exit Assessment," consisting
of a Phase I Environmental Assessment and such other tests as may be necessary
including the following studies and assessments:
A. Phase I Environmental Assessment.
B. The following additional assessments, inspections and
monitoring plans:
1. Interior Site Assessment consisting of a visual
inspection of all surfaces (floors, walls, ceiling tiles, benches,
interior of cabinets and fume hoods) for signs of contamination and
deterioration. Visual inspection of all bench and hood sinks and
readily accessible drain lines for signs of deterioration, loss of
integrity and leakage. The Interior Site Assessment shall include
detailed written documentation of all observations and dated photos to
document the existing condition thereof.
2. Wastewater Collection System Assessment consisting of
a flush and clean-out of all discharge piping and traps with
observation of effluent during the clean-out. Videotaping of the
Wastewater Collection System shall be required if the flush is observed
to contain constituents which could indicate a break in said System.
3. Laboratory Hoods and Exhaust System Inspection
consisting of an inspection of the laboratory hoods and exhaust system
with detailed documentation of all observances, including without
limitation, observed solids, liquids, odors or Hazardous Materials
entrapment. Such inspection shall include inspection of the roof area
to determine the existence of any deterioration from condensation of
hazardous materials in the exhaust system. Recommendations are to be
developed for further sampling based upon a visual observation of
stacks, exhaust fans and the roof.
<PAGE>
Exit Assessment, continued.
Lessor shall receive a copy of the report(s) of the Lessee's
Exit Assessment, and said report(s) shall be deemed to be the baseline
physical condition of the Premises upon Lessee's surrender of the
Premises. The cost of the Lessee's Exit Assessment and all costs
associated with restoring the Premises to its condition recommended by
the consultant conducting the Exit Assessment shall be paid by Lessee.
The Exit Assessment shall be performed by an independent laboratory and
consultant, acceptable to Lessor and Lessor's Lender, with expertise in
performing environmental analyses of biotechnology laboratory
facilities.
62. OPTION TO EXTEND: Provided that Lessee is not then in default under any
of the terms, covenants and conditions of the Lease, Lessor hereby grants to
Lessee, subject to the conditions hereinafter set forth, two (2), five (5) year
options to extend the term of this Lease. These options shall be exclusive to
CancerVax Corporation or its Lessee Affiliates but not to assignees or
subtenants. Provided that as long as CancerVax is occupying at least 25,000
square feet of the premises at the time it exercises such options, Lessee shall
be permitted to similarly extend any or all subleases of the Premises for all or
a portion of the extended term of this Lease. The option shall be on such terms
and conditions as this Lease, except for Base Rent, which shall be adjusted as
set forth below. This grant of an option shall be of no force and effect unless
Lessee gives Lessor written notification of Lessee's intent to exercise the
option by at least January 1, 2012 and not sooner than October 1, 2011.
63. BASE RENT INCREASES DURING OPTION PERIOD: On July 1, 2012, and if the
first option is exercised, again on July 1, 2017, the monthly base rent due
hereunder shall be increased to the fair market rental value of the Premises as
of January 1, 2012 and January 1, 2017, respectively. Lessor shall determine
fair market rental value by using its best good faith judgement. As used herein
"fair market rental value" shall mean the projected prevailing rental rate as of
January 1, 2012 and January 1, 2017 respectively for generally similar sized and
improved R&D space (but without consideration for Trade Fixtures and Equipment
purchased by Lessee and included on the Equipment List compiled by Lessee and
acknowledged by Lessor prior to installation) situated in the area of Carlsbad,
California, but not taking into account prevailing rental concessions, tenant
improvement allowances and any other concessions offered for such similar space
as of such date. Lessor shall use its best efforts to provide written notice of
such amount not later than three (3) months prior to the expiration of the
original lease term. Lessee shall thereafter have fifteen (15) days ("Lessee's
Review Period") after receipt of Lessor's notice of the fair market rental value
within which to accept such fair market rental value or to reasonably object
thereto in writing.
In the event Lessee objects to the fair market rental value submitted by Lessor,
Lessor and Lessee shall attempt in good faith to agree upon such fair market
rental value, using their best good faith efforts. If Lessor and Lessee fail to
reach agreement on such fair market rental value within fifteen (15) days
following Lessee's Review Period (the "Outside Agreement Date"), then the
determination of fair market rental value shall be submitted to arbitration
under the provisions of the American Arbitration Association. The cost of
arbitration shall be paid by Lessor and Lessee equally.
During the remainder of each option term, the monthly base rent shall be
increased annually on July 1 of each year by one hundred and four percent (104%)
times the rent in effect immediately preceding the date of the rent adjustment.
" NOTICE: BY INITIALING THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY
DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE 'ARBITRATION OF
DISPUTES' PROVISION CONTAINED IN THIS PARAGRAPH 63 OF THIS ADDENDUM
DECIDED BY NEUTRAL BINDING ARBITRATION BEFORE A SINGLE ARBITRATOR AS
PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MAY
POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY
INITIALING IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO
DISCOVERY AND APPEAL, UNLESS SUCH RIGHTS ARE SPECIFICALLY INCLUDED IN
THE 'ARBITRATION OF DISPUTES' PROVISION. IF YOU REFUSE TO SUBMIT TO
ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO
ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL
PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY."
"WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES
ARISING OUT OF THE MATTERS INCLUDED IN THE 'ARBITRATION OF DISPUTES'
PROVISION TO NEUTRAL BINDING ARBITRATION."
"Lessor" "Lessee"
[ILLEGIBLE] [ILLEGIBLE]
----------- -----------
Initials Initials
64. EXHIBITS: The following exhibits are attached hereto and made a part
hereof:
Exhibit A - "For Construction" Shell Building Plans;
Exhibit B - Tenant Improvement Agreement;
Exhibit C - Proposed Lessor Designed Tenant Improvement Space
Plans;
Exhibit D - Site Plan;
Exhibit E - Roof Guarantee;
Exhibit F - Condition of Building Upon Possession.
Exhibit G - Landlord Waiver and Consent Form.
<PAGE>
LESSOR: LESSEE:
BLACKMORE AIRPORT CENTRE, CANCERVAX CORPORATION
A CALIFORNIA LIMITED PARTNERSHIP
By: Blackmore Family Partners,
A California General Partnership,
General Partner
By: /s/ Allen J. Blackmore By : /s/ David F. Hale
------------------------------- --------------------------
Allen Joseph Blackmore, Trustee David F. Hale,
of the Blackmore Family Trust President and CEO
Restated 1995, General Partner
Date: September 19, 2001 Date: September 19, 2001
By: /s/ William R. LaRue
---------------------------
William R. LaRue,
Vice President and CFO
Date: September 19, 2001
<PAGE>
EXHIBIT A
"FOR CONSTRUCTION" SHELL BUILDING PLANS
DELIVERED TO CANCER VAX
ON AUGUST 31, 2001
<PAGE>
EXHIBIT "B"
TENANT IMPROVEMENT AGREEMENT
This Tenant Improvement Agreement ("Agreement") is entered into as of
August 31, 2001 between Blackmore Airport Centre, a California limited
partnership ("Lessor") and CancerVax Corporation, a Delaware corporation
("Lessee"), in connection with the execution of the Lease between Lessor and
Lessee executed simultaneously with this Agreement ("Lease"), who agree as
follows:
1. General.
a. The purpose of this Agreement is to set forth how the interior
improvements in the Premises, including additional mezzanine
space, offices, employee services facilities, restroom
facilities, laboratory facilities and warehouse areas ("Tenant
Improvements") are to be constructed, who will perform the
construction of the Tenant Improvements and who will pay for
the construction of the Tenant Improvements.
b. Lessor has commenced construction of the shell of the Premises
("Shell") in accordance with those certain architectural
drawings prepared by Smith Consulting Architects ("SCA") dated
February 22, 1997 (the "Shell Architectural Drawings"), which
shall be a "cold" shell and Lessee has approved and accepted
the Shell Architectural Drawings. Lessor shall proceed to
complete the construction of the Shell within a commercially
reasonable period in accordance with the Shell Architectural
Drawings. Lessor shall be responsible for the costs of
construction of the Shell, but any improvements requested by
Tenant which are not contained in the Shell Architectural
Drawings as of August 10, 2001, shall be considered part of
the Tenant Improvements (including any modifications made to
the Shell to the extent necessary to accommodate the Tenant
Improvements).
c. Lessee has requested that Lessor expand the Shell, the cost of
which shall be deducted from the Allowance (as defined below).
These improvements ("Mezzanine Improvements") shall consist of
adding approximately 5,400 square feet of mezzanine space to
the Shell. SCA or another architect selected by Lessor shall
prepare the Mezzanine Improvements plans, which, if approved
by Lessee, shall be attached to the Shell Architectural
Drawings, and Reno Contracting, Inc. shall construct the
Mezzanine Improvements.
d. The parties anticipate that after completion of the Mezzanine
Improvements, the Tenant Improvements may be installed in two
phases. The improvement of approximately 30,400 square feet of
office area and approximately 25,000 square feet of laboratory
space in the Premises shall constitute the first phase of the
remaining Tenant Improvements ("Phase 1"). If Tenant so
elects, Tenant may, without obligation to do so, install the
second phase of the Tenant Improvements, consisting of a pilot
manufacturing facility ("Phase 2"), following completion of
the Phase 1 portion of the Tenant Improvements. However,
Lessee may elect to have the Phase 1 and Phase 2 portions of
the Tenant Improvements constructed simultaneously.
e. Except as defined in this Agreement to the contrary, all terms
utilized in this Agreement shall have the same meaning as the
defined terms in the Lease.
f. The provisions of the Lease, except where clearly inconsistent
or inapplicable to this Agreement, are incorporated into this
Agreement.
<PAGE>
2. Designer/Architect. The plans for Phase 1 of Tenant Improvements shall
be prepared by McGraw/Baldwin Architects or such other architect
approved by Lessor and Lessee ("Designer") who is familiar with all
applicable laws, statutes, codes, rules and regulations applicable to
construction of Phase 1 of the Tenant Improvements (collectively
"Laws"). The plans for Phase 2 of Tenant Improvements, if Tenant elects
to install such additional Tenant Improvements, may be prepared by
either the Designer, or such other designer as may be approved by
Lessor (which approval shall not be unreasonably withheld) who is
familiar with all Laws applicable to construction of Phase 2 of the
Tenant Improvements. The cost of the space planning, architectural and
engineering services (including "value engineering" services) relating
to the preparation of the plans for the Phase 1 and Phase 2 Tenant
Improvements shall be included in the cost the Tenant Improvements.
3. Reparation of Plans and Construction Schedule for Tenant Improvements.
Lessor shall (A) contract with the Designer (with Lessee named as third
party beneficiary in such contract) to design the Phase 1 Tenant
Improvements and, if Lessee so requests, contract with Designer or such
other designer approved by Lessor to design the Phase 2 Tenant
Improvements (each, a "Design Contract"), (B) provide instructions and
the Shell Architectural Drawings to the Designer to complete the plans
and specifications, (C) contract (with Lessee named as Owner in the
contract for construction of the Tenant Improvements) for the
construction of Phase 1 and, if Lessee so requests, Phase 2 of the
Tenant Improvements and (D) supervise the Contractor in the
construction of the Tenant Improvements:
a. Lessee shall provide Designer with sufficient information to
allow Designer to prepare preliminary schematic layouts for
the Phase 1 Tenant Improvements. Immediately after Lessor and
Lessee have approved the preliminary schematic layout for the
Phase 1 Tenant Improvements, Designer shall be directed to
prepare Working Drawings for Phase 1 ("Phase 1 Working
Drawings") which shall be delivered to Lessor and Lessee.
Lessee recognizes that Lessor is providing the Allowance in
the expectation that the office portion of the Tenant
Improvements will be useable by the type of tenant that
usually occupies buildings in the Carlsbad Research Center.
Consequently the quality of the Tenant Improvements (in terms
of design and materials) shall be no less than the quality of
the office portion of the tenant improvements contained in
those buildings developed by entities controlled by Allen
Blackmore in the Carlsbad Research Center. Lessor and Lessee
shall cooperate to reduce the costs of the Tenant Improvements
as reasonably requested by Lessee, but not below the standard
of quality provided herein. Lessee may select different
materials of equal or greater value in place of Lessor's
standard building materials provided such selection is
indicated on the Plans. The Working Drawings may be submitted
in one or more stages.
b. Lessee shall approve such Phase 1 Working Drawings or
designate by notice to Lessor the specific changes required to
be made to the Phase 1 Working Drawings, which Lessor shall
direct to Designer as soon as reasonably possible. Upon
receipt of Lessee's approval of the Phase 1 Working Drawings,
Lessor shall cause the Designer to submit them to the
appropriate municipal authorities and design review boards of
the Carlsbad Research Center for all applicable building
permits and approvals necessary to allow Contractor to
commence and fully complete the construction of the Phase 1
Tenant Improvements. Lessor shall be responsible for obtaining
any building permit or certificate of occupancy for the
Premises; provided that Lessee shall cooperate with Lessor in
executing permit applications and performing other ministerial
acts reasonably necessary to enable Lessor to obtain any such
permit or certificate of occupancy.
2
<PAGE>
c. After Lessee has approved the Phase 1 Working Drawings, Lessor
shall cause the Designer to submit to Lessee final Phase 1
plans ("Phase 1 Plans") which shall be defined as, and shall
consist of, complete architectural plans (inclusive of Working
Drawings) and specifications necessary to allow the Contractor
to build the Phase 1 Tenant Improvements in accordance with
the final Phase 1 Plans. The term "Phase 1 Tenant
Improvements" shall mean all improvements shown on the final
Phase 1 Plans as finally approved by Lessee.
d. Lessee shall approve such Phase 1 Plans or designate by notice
to Lessor the specific changes required to be made to such
Phase 1 Plans, which Lessor shall direct to Designer as soon
as reasonably possible. No changes, modifications or
alterations in the Phase 1 Plans approved by Lessee and Lessor
may be made without the prior written consent of both Lessee
and Lessor, which shall not be unreasonably withheld,
conditioned or delayed.
e. After Lessee's approval of the Phase 1 Plans, Lessor shall
submit to Lessee a detailed written estimate of the Total
Costs of the Tenant Improvements covered by the Phase 1 Plans
("Work Cost Estimate"). Lessee shall approve the Work Cost
Estimate or designate by notice the specific portions of the
Work Cost Estimate which Lessee disapproves or desires "value
engineering" services to be performed to reduce the cost
thereof. If Lessee reasonably disapproves all or any portion
of the Work Cost Estimate, or requests value engineering
services to be performed, the parties shall immediately meet
in order to revise the Work Cost Estimate to an amount which
is acceptable to Lessee, but shall maintain the quality of
Tenant Improvements described above in any such revisions.
f. Once the Phase 1 Plans have been approved, Lessee shall
provide Designer with sufficient information to allow Designer
to prepare a schematic layout of the Phase 2 Tenant
Improvements. Lessor and Lessee recognize and agree that
Lessee may elect to delay or forego the design and
construction of the Phase 2 Tenant Improvements for an
undetermined period of time after the Substantial Completion
of the Phase 1 Tenant Improvements. After Lessor and Lessee
have approved the preliminary schematic layout, Designer shall
be directed to prepare Working Drawings for Phase 2 ("Phase 2
Working Drawings") which shall be delivered to Lessor and
Lessee. The Phase 2 Working Drawings and the Phase 2 Plans
shall be approved according to the same procedures as the
Phase 1 Working Drawings and Phase 1 Plans as described in
subparagraphs 3 b-e above.
g. The Phase 1 Working Drawings and the Phase 2 Working Drawings
are sometimes collectively referred to herein as the "Working
Drawings." Similarly, the Phase 1 Plans and the Phase 2 Plans
are sometimes collectively referred to herein as the "Plans"
and the Phase 1 Tenant Improvements and the Phase 2 Tenant
Improvements are sometimes collectively referred to herein as
the "Tenant Improvements."
4. Construction of Tenant Improvements.
a. Lessor shall make arrangements for Reno Contracting, Inc. or
such other contractor selected by Lessor ("Contractor") to
construct the Phase 1 Tenant Improvements as indicated on the
Phase 1 Plans in a good and workmanlike manner as soon as
reasonably possible and consistent with industry custom and
practice. Although Lessor will enforce the contract with
Contractor to have the Tenant Improvements completed as soon
as reasonably possible, Lessor shall not be liable for delay
in the construction of the Tenant Improvements except to the
extent that such delay is caused by Lessor's failure to
respond to Working Drawings or Plans within three business
days of their submission to Lessor and such delay directly
causes a delay in the Substantial Completion of the proposed
Tenant Improvements.
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b. The construction contract for the Phase 1 Tenant Improvements
with Contractor (the "Construction Contract") shall be in form
and substance acceptable to Lessor and reasonably approved by
Lessee and shall include, without limitation, requirements (i)
that Contractor carry such insurance as Lessor and Lessee may
reasonably require, (ii) that the Contractor provide a
commercially reasonable construction warranty, which may be
enforced by Lessee, (iii) that the Contractor's fee shall be
calculated on a "cost plus a fee" basis where the fee for
overhead and profit shall not exceed five percent (5%) of cost
and the fee for liability insurance shall not exceed .60 %
(with the amount charged for general conditions and
supervision competitive with the current market for similar
tenant improvement projects in the Carlsbad Research Center,
and (iv) that Contractor secure independent sealed bids from
three (3) subcontractors mutually acceptable to Lessor and
Lessee (to the extent that such bids are reasonably available)
for each trade (except for roofing and fire safety, which
subcontractors Lessor shall select) whose costs are in excess
of five percent (5%) of the Work Cost Estimate. Lessee may
designate that the lowest bidding subcontractor be selected.
Both Lessor and Lessee shall have the full benefit of all
contractor warranties in connection with the Phase 1 Tenant
Improvements. Lessor shall direct and authorize Contractor to
keep Lessee's representative fully informed of the
construction process for the Phase 1 Tenant Improvements and
to provide Lessee's representative with access to all
documentation and other information in Contractor's possession
or control regarding construction of the Phase 1 Tenant
Improvements. The Construction Contract shall not require the
Contractor to post a completion bond if the premium therefor
will be included in the Total Cost without the Lessee's
express prior written consent.
c. If Lessor and Lessee elect to construct the Tenant
Improvements in two phases, then following the issuance of a
certificate of occupancy for the Phase 1 Tenant Improvements
and Lessee's deposit of the amount by which the Total Cost
exceeds the remaining Allowance as described in paragraph 5
below, Lessor shall make arrangements for Contractor to
construct the Phase 2 Tenant Improvements. Lessor and Lessee
shall cooperate with Contractor and Designer to cause the
Phase 2 Tenant Improvements to be completed as soon as
reasonably possible after the completion and approval of the
Phase 2 Working Drawings as described, in Section 3.e above.
d. Lessee shall designate a representative who shall attend all
planning and construction meetings related to the Tenant
Improvements. Lessor shall designate a representative to
participate in the Tenant Improvement process. However, Lessor
shall not receive a separate fee in connection with Lessor's
reviewing the design and construction of the Tenant
Improvements for the Premises and supervising Contractor in
the construction of the Tenant Improvements.
e. Lessor shall complete construction of the Shell within a
commercially reasonable period in accordance with the Shell
Architectural Drawings. However, if Lessor delays completion
of the Shell (other than delays related to the Mezzanine
Improvements or other changes requested by Lessee) and such
delay causes a corresponding delay in the completion of the
Tenant Improvements, then the Commencement Date shall be
pushed forward by the number of days in delay of the
completion of the Shell that caused a corresponding delay in
the completion of the Tenant Improvements.
f. Prior to execution of the contracts with the Designer and the
Contractor, Lessor and Lessee shall agree upon a schedule for
design and construction of the Tenant Improvements
("Completion Schedule") broken down by number of days to
complete certain milestones and attach it to this Agreement as
Schedule 1. If either Designer or Contractor fall behind more
than fourteen (14) days in the completion of any milestone in
the Completion Schedule, then Lessee may
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provide Lessor with a notice that the Completion Schedule is
not being met. Lessor shall use commercially reasonable
efforts to cause Designer or Contractor, as the case may be,
to remedy the failure to proceed pursuant to the Construction
Schedule. If within five (5) business days after receipt of
such notice Lessor is unable to cause Designer or Contractor,
as the case may be, to provide reasonably acceptable
assurances that there will be no further delay in the
identified portion of the Completion Schedule or that the
identified delay otherwise will be remedied and the other
portions of the Completion Schedule will be met, then Lessee
shall have the right to enforce its third party beneficiary
rights under the contract with the Designer or Contractor, as
applicable, and take any action Lessee deems reasonably
necessary to cause completion of the Tenant Improvements as
soon as reasonably possibly, including, without limitation,
termination of the applicable contract with Designer or
Contractor. Notwithstanding the foregoing, any action Lessee
may take pursuant to this subparagraph 4.f shall be deemed a
Change Order for purposes of this Agreement and Lessee shall
comply with the provisions of Paragraph 7 of this Agreement
with respect to any action that Lessee may take that increases
the cost of completing the Tenant Improvements, including,
without limitation, the cost of terminating any contracts.
Lessor shall have no liability with respect to any delays in
completion of the Tenant Improvements in connection with such
circumstances.
5. Tenant Improvement Allowance. The planning and construction of the
Mezzanine Improvements and the Tenant Improvements shall be at Lessee's
sole and entire cost except for the Allowance. Lessor will provide a
tenant improvement allowance of $4,300,000 ("Allowance") toward the
cost of the design and construction of the Mezzanine Improvements and
the Tenant Improvements ("Total Cost"). The Total Cost shall include
all direct and indirect costs and expenses incurred by Lessor relating
to the Mezzanine Improvements and the Tenant Improvements as indicated
by the Plans and the Work Cost Estimate, as modified, including,
without limitation, all direct and indirect costs related to the
architectural, engineering and inspection fees, the costs of the
Working Drawings and the Plans, payments made under all construction
contracts, premiums for all bonds and insurance, all sales, use or
similar taxes relating to the construction of the Mezzanine
Improvements and the Tenant Improvements, permit fees and other
governmental fees, losses and expenses not compensated by insurance or
otherwise sustained by Lessor, blueprinting expenses and all other
ordinary and reasonable expenses incurred by Lessor applicable to the
construction of the Mezzanine Improvements and the Tenant Improvements.
If the estimated Total Cost of the Mezzanine Improvements and the
Tenant Improvements exceeds the Allowance, then Lessee shall pay the
estimated overage to Lessor at the time a construction contract is
signed for Phase 1 or Phase 2 of the Tenant Improvements that, together
with all previous amounts spent for Mezzanine Improvements and Tenant
Improvements through that date, is estimated to exceed the Allowance.
Lessor shall have no obligation to cause commencement of a contract for
the Phase 1 Tenant Improvements until after Lessee has paid the amount
of the overage related thereto to Lessor. Similarly, Lessor shall have
no obligation to cause commencement of a contract for the Phase 2
Tenant Improvements until after Lessee has paid the amount of the
overage related thereto to Lessor. After the Allowance has been
exhausted, Lessor shall have no further obligation to expend Lessor's
funds on Tenant Improvements. Lessor shall place the overage paid by
Lessee in an interest-bearing account with the interest accruing to the
benefit of Lessee. Lessor shall perform the services of fund control
with respect to the construction costs and shall disburse Lessee's
funds in equal monthly installments based on the estimated number of
months of construction for the corresponding portion of the Tenant
Improvements.
5
<PAGE>
When all the Tenant Improvements are Substantially Complete, either (1)
if the Total Cost of the Mezzanine Improvements and the Tenant
Improvements exceeds the sum of the Allowance plus any amounts Lessee
paid to Lessor upon the execution of the Construction Contract (plus
accrued interest on Lessee's funds), then Lessee shall pay Lessor such
shortfall immediately upon Lessor's request (and Lessee's failure to
make such payment shall constitute a default under the Lease), or (2)
if the Total Cost of the Mezzanine Improvements and the Tenant
Improvements is less than the sum of the Allowance plus any amounts
Lessee paid to Lessor upon execution of the Construction Contract (plus
accrued interest on Lessee's funds), then Lessor shall refund the
excess overage paid by Lessee to Lessee. All items of Tenant
Improvements shall be the property of Lessor.
6. Substantially Complete.
a. For purposes hereof, (i) the Shell shall be deemed
"substantially complete" at such time as Lessor has completed
work in accordance with the Shell Architectural Drawings
subject to completion and correction of items on SCA's punch
list, and certain other items which will not be completed
until substantial completion of the Phase 1 Tenant
Improvements (such as items necessary to modify the sprinklers
in accordance with the Phase 1 Tenant Improvement package and
certain landscaping), and (ii) the Phase 1 Tenant Improvements
shall be deemed "substantially complete" at such time as
Contractor has completed work in accordance with the Phase 1
Plans, as certified by Designer (which certification shall be
obtained promptly by Lessor upon such substantial completion),
and Lessee has obtained a final or temporary certificate of
occupancy from the City of Carlsbad, subject only to the
completion or correction of items on the Designer's punch
list. The Premises shall be deemed Substantially Complete even
though certain portions of the Premises which do not interfere
with Lessee's efficient conduct of its business in the
Premises have not been fully completed, and even though
Lessee's furniture, telephones, telexes, telecopiers,
photocopy machines, computers and other office machines or
equipment have not been installed, the purchase and
installation of which shall be Lessee's sole responsibility;
provided, however, that Lessor shall permit Lessee reasonable
access to the Premises prior to the substantial completion of
the Phase 1 Tenant Improvements to install such equipment and
trade fixtures. Lessor shall cause the Punchlist items to be
corrected as soon as reasonably possible and practical. Lessor
shall direct Contractor to clean the Premises prior to the
Commencement Date, including removal of all rubbish and debris
to leave the Premises in a manner consistent with the
commencement of business from first-class office premises, the
cost of which shall be part of the Total Cost.
b. If Lessee delays the date of Substantial Completion due to
Change Orders or the non-timely response to clarification or
direction requested by the Designer, Contractor or Lessor,
such delays shall not cause any delay in the Commencement Date
of the Lease nor shall it delay Lessee's obligation to pay
rent for the Premises.
c. Whenever possible and practical, Lessor will cause to be
utilized, for the construction of the Tenant Improvements, the
items and materials designated in the Plans. However, whenever
Lessor determines in its judgment that it is not practical or
efficient to use such materials, Lessor shall have the right,
upon receipt of Lessee's consent, which consent shall not be
unreasonably withheld or delayed, to cause Contractor to
substitute comparable items and materials. If Lessee refuses
to grant such consent, and Lessor is delayed in causing the
Tenant Improvements to be Substantially Complete because of
Lessee's failure to permit the substitution of comparable
items and materials, such delay shall not delay the
Commencement Date or Lessee's obligation to pay rent for the
Premises.
6
<PAGE>
7. Change Orders. If Lessee requests any changes to the Tenant Improvement
Plans other than those due to acts or omissions of Lessor or the
Designer ("Change Order"), Lessor shall not unreasonably withhold its
consent to any such Change Order, provided the Change Order does not
materially affect the Premises' structure, systems, equipment or
appearance and does not result in the use of materials in the
construction of the Tenant Improvements of a lesser quality than the
materials previously approved for the Building. Lessee shall request
Change Orders in writing and if the Change Order increases the cost of
the Tenant Improvements, as well as increases the amount of the
construction contract, then to the extent such Change Order increases
the amount of the construction contract, Lessee shall pay such
increased costs to Lessor at such time as the request is approved by
Lessor and Lessor shall have no obligation to cause the Change Order to
be implemented (and the Change Order shall be of no force or effect)
until Lessee pays the increased costs of the Change Order to Lessor.
Any Change Order which results in a cost savings to Lessee shall be
credited to the Owner's Contingency portion of the construction
contract.
8. No Lessor Liability. Lessor shall not be liable for any loss, cost,
damage, or expense incurred or claimed by Lessee or any other person or
party on account of the construction or installation of the Tenant
Improvements or any improvements to the Premises made by Lessee, except
to the extent caused by Lessor's gross negligence, recklessness or
intentional acts. As much of the Tenant Improvements for the Premises
are of a very specialized and technical nature, Lessee agrees and
understands that Lessor shall not be the guarantor of, nor responsible
for, the correctness or accuracy of any Plans, the compliance of such
Plans with applicable laws or the operation of the Tenant Improvements
in the Premises. Notwithstanding the foregoing, Lessor hereby covenants
to diligently pursue and to cooperate with Lessee in pursuing all of
Lessor's warranty rights and remedies under the Construction Contract
and each Design Contract, including Lessor's rights with respect to
subcontractors and vendors, as necessary to compensate Lessee for any
loss, cost, damage or expense incurred or claimed by Lessee, or any
other person claiming through Lessee, on account of any defect in the
construction, design or installation of the Tenant Improvements or any
breach of the Construction Contract by Contractor, or any Design
Contract by the designer party thereto. The Lessor assumes no liability
or responsibility resulting from the failure of the Lessee to comply
with applicable governmental laws, codes and regulations or for any
defect in any of the Tenant Improvements or other alteration to the
Premises made by Lessee. Lessee further agrees to indemnify, defend,
and hold harmless Lessor from any liability, loss, cost, damage or
expense incurred, claimed, asserted or arising in connection with any
of the foregoing.
9. Future Improvements by Lessee to the Premises. In the event that Lessee
shall desire to perform future improvements to the Premises during the
term of the Lease or any extension thereof, Lessee shall construct such
improvements in accordance with the terms and conditions of the Lease.
10. Default. Any default by Lessee or Lessor under the terms of this
Agreement shall constitute a default under the Lease and shall entitle
the other to exercise all remedies set forth in the Lease. The
defaulting party shall have all rights to remedy such default pursuant
to the provisions of the Lease.
11. Reasonable Diligence. Both Lessor and Lessee agree to use reasonable
diligence in performing all of their respective obligations and duties
under this Agreement and in proceeding with the construction and
completion of all Tenant Improvements in the Premises.
7
<PAGE>
12. Dispute Resolution Procedures.
Lessor and Lessee agree that, except for any claim within the
jurisdiction of the small claims court (which small claims court shall
be the sole court of competent jurisdiction), any controversy, dispute,
or claim of whatever nature arising out of, in connection with or in
relation to the interpretation, performance or breach of this Work
Letter, including any claim based on contract, tort, or statute, shall
be resolved at the request of any party to this agreement through a
two-step dispute resolution process administered by J.A.M.S. or another
judicial mediation service mutually acceptable to the parties located
in San Diego County, California. The dispute resolution process shall
involve first, mediation, followed, if necessary, by final and binding
arbitration administered by and in accordance with the then existing
rules and practices of J.A.M.S. or other judicial mediation service
selected. In the event of any dispute subject to this provision, either
party may initiate a request for mediation and the parties shall use
reasonable efforts to promptly select a J.A.M.S. mediator with
experience in resolving construction disputes and commence the
mediation. In the event the parties are not able to agree on a mediator
within thirty (30) days, J.A.M.S. or another judicial mediation service
mutually acceptable to the parties shall appoint a mediator. The
mediation shall be confidential and in accordance with California
Evidence Code Section 1119 et. seq. The mediation shall be held in San
Diego County, California and in accordance with the existing rules and
practice of J.A.M.S. (or other judicial and mediation service
selected). The parties shall use reasonable efforts to conclude the
mediation within sixty (60) days of the date of either party's request
for mediation. The mediation shall be held prior to any arbitration or
court action (other than a claim within the jurisdiction of the small
claims court which are not subject to this mediation/arbitration
provision and may be filed directly with a court of competent
jurisdiction). Should the prevailing party in any dispute subject to
this Paragraph attempt an arbitration or a court action before
attempting to mediate, the prevailing party shall not be entitled to
attorney's fees that might otherwise be available to them in a court
action or arbitration and in addition thereto, the party who is
determined by the arbitrator to have resisted mediation, shall be
sanctioned by the arbitrator or judge.
IF A MEDIATION IS CONDUCTED BUT IS UNSUCCESSFUL, IT SHALL BE FOLLOWED BY FINAL
AND BINDING ARBITRATION ADMINISTERED BY AND IN ACCORDANCE WITH THE THEN EXISTING
RULES AND PRACTICES OF J.A.M.S. OR THE OTHER JUDICIAL AND MEDIATION SERVICE
SELECTED, AND JUDGMENT UPON ANY AWARD RENDERED BY THE ARBITRATOR(S) MAY BE
ENTERED BY ANY STATE OR FEDERAL COURT HAVING JURISDICTION THEREOF AS PROVIDED BY
CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 1280 ET. SEQ, AS SAID STATUTES THEN
APPEAR, INCLUDING ANY AMENDMENTS TO SAID STATUTES OR SUCCESSORS TO SAID STATUTES
OR AMENDED STATUTES, EXCEPT THAT IN NO EVENT SHALL THE PARTIES BE ENTITLED TO
PROPOUND INTERROGATORIES OR REQUEST FOR ADMISSIONS DURING THE ARBITRATION
PROCESS. THE ARBITRATOR SHALL BE A RETIRED JUDGE OR A LICENSED CALIFORNIA
ATTORNEY. THE VENUE FOR ANY SUCH ARBITRATION OR MEDIATION SHALL BE IN SAN DIEGO
COUNTY, CALIFORNIA.
NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE
ARISING OUT OF THE MATTERS INCLUDED IN THE "MEDIATION AND ARBITRATION OF
DISPUTES" PROVISION DECIDED BY NEUTRAL BINDING ARBITRATION AS PROVIDED BY
CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE
DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU
ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS
ARE SPECIFICALLY INCLUDED IN THE "MEDIATION AND ARBITRATION OF DISPUTES"
PROVISION. IF YOU REFUSE TO SUBMIT TO BINDING ARBITRATION AFTER AGREEING TO THIS
PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE
CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION PROVISION
IS VOLUNTARY.
WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING
OUT OF THE MATTERS INCLUDED IN THE "MEDIATION AND ARBITRATION OF DISPUTES"
PROVISION TO NEUTRAL BINDING ARBITRATION.
LESSOR: [ILLEGIBLE] LESSEE: [ILLEGIBLE]
8
<PAGE>
LESSOR: LESSEE:
BLACKMORE AIRPORT CENTRE CANCERVAX CORPORATION
California limited partnership a Delaware corporation
By: Blackmore Family Partners,
a California general partnership, By: /s/ David Hale
General Partner --------------------
David Hale,
President and CEO
By : /s/ Allen Joseph Blackmore By: /s/ William R. LaRue
------------------------------- --------------------
Allen Joseph Blackmore, Trustee William R. LaRue,
of the Brackmore Family Trust Vice President and CFO
Restated 1995, General Partner
9
<PAGE>
[THE BLACKMORE COMPANY LOGO]
January 29, 2002
Mr. Bill LaRue
CANCERVAX CORPORATION
5931 Darwin Court
Carlsbad, CA 92008
RE: ROOF WARRANTY FOR 2110 RUTHERFORD ROAD
Enclosed please find a copy of the roof guaranty for 2110 Rutherford Road. You
may recall that your lease document contains a sample roof guaranty.
Please discard the sample guaranty found in your lease document and replace it
with this copy of the actual roof guaranty.
If you have any questions, please let me know.
Sincerely,
/s/ Colleen M. Blackmore
Colleen M. Blackmore
THE BLACKMORE COMPANY
<PAGE>
No. WENPN106113910-01
[BRAI SUPERME LOGO] NO DOLLAR LIMIT (NDL) GUARANTEE
PERIOD OF COVERAGE 10 YEAR YEARS
OWNER THE BLACKMORE AIRPORT CENTRE, LOT 38, RANCHO
SANTA FE. CA 92062
NAME AND TYPE OF BUILDING LOT 36
ADDRESS OF BUILDING 2110 RUTHERFORD RD., CARLSBAD, CA 92007.
SPECIFICATION MB4UPN AREA OF ROOF 465.00 SQUARES
TYPE OF FLASHING 7.02 LENGTH OF FLASHING 800 LINEAL FEET
APPLIED BY SUPERIOR ROOFING / SAN MARCOS, CA
DATE OF COMPLETION 09/25/2001 EXPIRATION DATE 09/25/2001
THE GUARANTEE
Building Materials Corporation to America, through its division, U.S.
Intec ("U.S. INTEC"), guarantees to the Building Owner that, subject to the
terms and conditions set forth below, U.S. INTEC will make those repairs to the
U.S. INTEC roofing membrane, base flashing, insulation, expansion joint covers,
MCurbs and pre-flashed accessories (me "U.S. INTEC Roofing Materials") used in
the construction of the above described root as are necessary to correct teaks
while this Guarantee is in effect. 'Note: MCurbs are covered only for 10 years.
This Guarantee covers such repairs to the U.S. INTEC Roofing Materials
(excluding repair or replacement of roof deck, insulation, or other materials
used in conjunction with the roofing system not sold by U.S. INTEC) as shall be
necessary solely in order to correct leaka resulting from any of the causes
listed below. These repairs will be made at no cost to the Building Owner
provided that the Owner gives timely written notice to U.S. INTEC.
SCOPE OF COVERAGE - LEAK CAUSED BY:
1. Natural deterioration of the U.S. INTEC Roofing Materials
2. Blisters
3. Bare spots
4. Fish-mouths
5. Ridges
6. Splits not caused by structural failure or movement of or cracks in
substrate roof base or non-U.S, INTEC insulation over which the U.S, INTEC
Roofing Materials are applied
7. Buckles and wrinkles
8. Workmanship in applying the U.S. INTEC Roofing Materials
9. Slippage of membrane or base flashing
ELIMINATOR ADVANTAGE: In addition to coverage for leaks described above, if
Brai* Supreme "Eliminator" perforated venting base sheer is installed directly
over isocyanurate insulation, U.S. INTEC will also make repairs to eliminate
blisters that occur between the perforated Brai Supreme Eliminator vented
base sheet and isocyanurate insulation.
OWNER'S RESPONSIBILITIES
In the event of a leak through the U.S. INTEC Rooting Materials, the
Owner must notify the U.S. INTEC Contractor Services Department, 1361 Alps Road,
Bldg. 7-1, Wayne, New Jersey 07470 in writing within thirty days after discovery
of the leak. NOTE: The roofing contractor is NOT an agent of U.S. INTEC; notice
to the roofing, contractor is NOT notice ie U.S. INTEC.
The Owner shall, at its expense, (a) perform regular inspections and
maintenance during this Guarantee, (b) keep records of all inspections and
maintenance performed, and (c) perform repairs to the roof or other building
components identified during inspections by U.S. INTEC as being necessary to
preserve the integrity of the U.S. INTEC Roofing Materials. Failure of the Owner
to perform this work promptly following written notification, by U.S. INTEC may
result in cancellation of this Guarantee if the Owner's failure results in
damage to the U.S. INTEC Roofing Materials.
The Owner shall, at its expense, remove (and, if desired, subsequently
replace) any materials and equipment that impede inspection and repair to the
U.S. INTEC Roofing Materials, such as HVAC units and satellite dishes mounted so
that there is no functional access to the roof system, and precast concrete or
rubber pavers, wood decking and steel grating that are installed over the U.S.
INTEC Roofing Materials.
In an emergency, the Owner may authorize or perform temporary repairs
to minimize damage to the building or its contents. Such work will not result in
the cancellation of this Guarantee provided that the temporary repairs are
reasonable and customary, and do not result in permanent damage to the U.S.
INTEC Roofing Materials. The Owner is responsible for all expenses associated
with temporary repairs.
EXCLUSIONS FROM COVERAGE
This Guarantee shall NOT cover the following conditions or any damages which may
arise therefrom.
1. Roof maintenance or correction of conditions other than leaks.
2. Unusual weather conditions or natural disasters including, but not limited
to, windstorms, hail, floods, hurricanes, lightning, tornados, and
earthquakes.
3. Damage to the roof constructed of the U.S. INTEC Roofing Materials due to:
(a) settlement, distortion, movement, failure or cracking of the roof deck,
walls, or foundations of the building; (b) Improper installation of
non-U.S. INTEC insulation or detects or failure of any material used in any
roof base or insulation not manufactured by U.S. INTEC over which the U.S.
INTEC Roofing Materials are applied; (c) infiltration or condensation of
moisture in, through or around the walls, copings, building structure, or
underlying or surrounding materials including tie-ins to adjacent roof
systems: (d) defects in design; (e) the performance, design, or application
of MCurb accessories or non-U.S. INTEC materials such as roof decks, metal
work, expansion and control joints, pitch pockets, walkways, work platform
and recreational surfacing (f) expansion or contraction any metal flashing
or other metal work; (g) underlying materials or structures having failed
or ceased to conform to U.S. INTEC's or other applicable specifications as
to roof slopes or other requirements; (h) chemical attack on the membrane;
(i) vandalism; or (i) negligence by the Owner in maintaining the U.S. INTEC
Roofing Materials.
4. Damage to the building or its contents.
5. Changes in usage of me building unless approved in writing in advance by
U.S. INTEC.
6. Damage resulting from any new installations on or through the U.S, INTEC
Roofing Materials or from traffic of any nature on the roof.
7. Temporary repairs to the U.S. INTEC Roofing Materials authorized by the
Owner.
8. Any repairs or other applications to the U.S. INTEC Roofing Materials after
the data of completion, unless performed in a manner acceptable to and
approved by U.S. INTEC in writing in advance. NOTE: In no event shall new
penetrations be covered under the terms of guarantee.
9. Any damage occurring more than thirty days after the discovery by the Owner
or its agent of a leak, unless U.S. INTEC is notified of such leak within
thirty days of its discovery.
10. Areas of roof which pond water.
11. Blisters that are not leaking, with the exception of those covered under
the "Eliminator" Advantage" section above.
No representative, employee, or agent of U.S. INTEC, or any other
person, has any authority to assume for U.S. INTEC any additional or [ILLEGIBLE]
amendment to the U.S. INTEC roof specifications in regard to the construction of
the roof described above, unless the change and/or amendment to the
specifications is approved in writing by an authorized U.S. INTEC Contractor
Services Manager.
This Guarantee is assignable to another owner of the building for the
remaining term ONLY if the following conditions are met: 11 The request is in
writing within 30 days after ownership transfer; 2) The roof system and building
envelope and related system is inspected and any required repairs are completed
at the Owner's expense; 3) The proposed assignment is approved in writing by an
authorized U.S. INTEC Contractor Services Manager; and 4) An assignment fee of
$500 is paid to U.S. INTEC. This Guarantee is NOT otherwise assignable, directly
or indirectly.
THIS GUARANTEE MAY BE CANCELLED it the roof is damaged by any cause
listed above an "Exclusion From Coverage" if the damage affects the integrity
or watertightness of the roof and the OWNER DOES NOT PROMPTLY MAKE REPAIRS
following written notification by U.S. INTEC to rectify the damage and preserve
the integrity to the roof.
THIS GUARANTEE IS EXPRESSLY IN LIEU OF ANY OTHER GUARANTEES AND/OR
WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND OF ANY OTHER
OBLIGATIONS OR LIABILITY ON THE PART OP U.S. INTEC, whether any claim against it
IS BASED UPON STRICT LIABILITY, NEGLIGENCE, BREACH OT WARRANTY OR ANY OTHER
theory or cause of action. In no event shall U.S.INTEC be liable for any
CONSEQUENTIAL OR INCIDENTAL damages of any kind.
NOTE: This Guarantee becomes effective only when bills for installation and
supplies have been paid in full to the roofing contractor and materials
suppliers, and the Guarantee charges has been paid to U.S. INTEC.
[U.S. INTEC LOGO]
U.S. INTEC, A Division of Building Materials Corporation of America
1361 ALPS ROAD
WAYNE, NJ 07470
By: [ILLEGIBLE]
-------------------------------------
Authorized Signature Date
January 22, 2002
(c) 2001 Building Materials Corporation of America 01/01
<PAGE>
EXHIBIT C
PROPOSED LESSOR DESIGNED
TENANT IMPROVEMENT SPACE PLANS
DELIVERED TO TENANT ON
NOVEMBER 1, 2001
<PAGE>
EXHIBIT C
PROPOSED LESSOR DESIGNED
TENANT IMPROVEMENT SPACE PLANS
<PAGE>
EXHIBIT D
2110 RUTHERFORD ROAD, CARLSBAD
[ROAD MAP]
<PAGE>
EXHIBIT E
[GAF LOGO]
No WFGL 10-3304
LIBERTY GUARANTEE
GAF MATERIALS
CORPORATION
<TABLE>
<S> <C> <C> <C>
TYPE OF GUARANTEE: GAFGLAS LIBERTY PERIOD OF 10 YEARS
OWNER: BLACKMORE AIRPORT, SAN DIEGO, CA COVERAGE
NAME AND TYPE OF BUILDING: CARLSBAD RESEARCH CENTRE - LOT 60
ADDRESS OF BUILDING: 5920 PASTEUR COURT, CARLSBAD, CA
SPECIFICATION: NB4M/P6 AREA OF ROOF: 280.00 SQUARES
TYPE OF FLASHING: 1XM LENGTH OF FLASHING: 450 LINEAL FEET
APPLIED BY: SUPERIOR ROOFING
DATE OF COMPLETION: 08/15/1998 EXPIRATION DATE: 08/15/2008
</TABLE>
THE GUARANTEE
GAF MATERIALS CORPORATION ("GAFMC") guarantees to the Building Owner that,
subject to the terms and conditions set forth below, GAFMC will make those
repairs to the GAFMC roofing membrane, base flashing, insulation, expansion
joint covers and pre-flashed accessories (the "GAFMC Roofing Materials") used in
the construction of the above described roof as are necessary to correct leaks
while this Guarantee is in effect. This Guarantee covers such repairs to the
GAFMC Roofing Materials (excluding repair or replacement of roof deck,
insulation, or other materials used in conjunction with the roofing system not
sold by GAFMC)as shall be necessary solely in order to correct leaks resulting
from any of the causes listed below. These repairs will be made at no cost to
the Building Owner provided gives timely notice to GAFMC (see below).
SCOPE OF COVERAGE - LEAKS CAUSED BY:
1. Natural deterioration of the GAFMC Roofing Materials
2. Blisters
3. Bare spots
4. Fish-mouths
5. Ridges
6. Splits not caused by structural failure or movement of or cracks in
substrate roof base or non-GAFMC, insulation over which the GAFMC Roofing
Materials are applied
7. Buckles and wrinkles
8. Workmanship In applying the GAFMC Roofing Materials
9. Slippage of membrane or base flashing
OWNER'S RESPONSIBILITIES
In the event of a leak through the GAFMC Roofing Materials, the Owner
must notify the GAFMC Technical Services Department, 1361 Alps Road, Bldg. 2-1,
Wayne, New Jersey 07470 In writing within thirty days after discovery of the
leak. The roofing contractor is NOT an agent of GAFMC; notice to the roofing
contractor is NOT notice to GAFMC.
The Owner shall, at its expense, (a) perform regular inspections and
maintenance during this Guarantee, (b) keep records of all Inspections and
maintenance performed, and (c) perform repairs to the roof or to other building
components identified during inspections by GAFMC as being necessary to preserve
the integrity to the GAFMC Roofing Materials. Failure of the Owner to perform
this work promptly following written notification by GAFMC may result in
cancellation of this guarantee if the Owner's failure results in damage to the
GAFMC Roofing Materials.
The Owner shall, at its expense, remove (and, if desired, subsequently
replace) any materials and equipment that impede inspection and repair of the
GAFMC Roofing Materials, such as HVAC units and satellite dishes mounted so that
there is no functional access to the roof system, and precast concrete or rubber
pavers, wood decking and steel grating that are installed over the GAFMC Roofing
Materials.
In an emergency, the Owner may authorize or perform temporary repairs
to minimize damage to the building or its contents. Such work will not result in
the cancellation of this Guarantee provided that the temporary repairs are
reasonable and customary, and do not result in permanent damage lo the GAFMC
Roofing Materials. The Owner is responsible for all expenses associated with
temporary repairs.
EXCLUSIONS FROM COVERAGE
This Guarantee shall NOT cover the following conditions or any damages which
may arise therefrom.
1. Roof maintenance or correction to conditions other than leaks.
2. Unusual weather conditions or natural disasters Including, but not limited
to, windstorms, hall, floods, hurricanes, lightning, tornados, and
earthquakes.
3. Damage to the roof constructed of the GAFMC Roofing Materials due to: (a)
settlement, distortion, movement, failure or cracking of the roof deck,
walls, or foundations to the building; (b) Improper installation to
non-GAFMC insulation or defects or failure of any material used in any roof
base or insulation not manufactured by GAFMC over which the GAFMC Roofing
Materials are applied; (c) infiltration or condensation of moisture in
through or around the walls, copings, building structure, or underlying or
surrounding materials including tie-ins to adjacent roof systems; (d)
detects in design; (e) the performance, design, or application of non-GAFMC
materials such as roof decks, metal work, expansion and control joints,
pitch pockets, walkways, work platforms and recreational surfacings; (f)
expansion or contraction to any metal flashing or other metal work; (g)
underlying materials or structures having failed or ceased to conform to
GAFMC's or other applicable specifications as to roof slopes or other
requirements; (h) chemical attack on the membrane; (i) vandalism; or (j)
negligence by the Owner in maintaining the GAFMC Roofing Materials.
4. Damage to the building or its contents.
5. Changes in usage of the building unless approved in writing in advance by
GAFMC.
6. Damage resulting from any new installations on or through the GAFMC Roofing
Materials or from traffic of any nature on the roof.
7. Temporary repairs to the GAFMC Roofing Materials authorized by the Owner.
8. Any repairs or other applications to the GAFMC Roofing Materials after the
date to completion, unless performed in a manner acceptable to and approved
by GAFMC in writing in advance. NOTE: In no event shall new penetrations be
covered under the terms of guarantee.
9. Any damage occurring more than thirty days after the discovery by the Owner
or its agent to a leak, unless GAFMC is notified to such leak within thirty
days of its discovery.
10. Areas of roof which pond water.
No representative, employee, or agent of GAFMC, or any other person,
has any authority to assume for GAFMC any additional or other liability or
responsibility in connection with the roof described above. GAFMC shall not be
responsible for or liable for any change or amendment to the GAFMC roof
specifications in regard to the construction of the roof described above, unless
the change or amendment to the specifications is approved in writing by an
authorized GAFMC Technical Services Manager.
This Guarantee is assignable to another owner of the building for the
remaining term ONLY if the following conditions are met: 1) The request is in
writing within 30 days after ownership transfer; 2) The membrane is inspected
and any required repairs are completed at Owner's expense; 3) The proposed
assignment is approved in writing by an authorized GAFMC Technical Services
Manager; and 4) An assignment fee of $500 is paid to GAFMC. This Guarantee is
NOT otherwise assignable, directly or Indirectly.
CANCELLATION OF THIS GUARANTEE WILL RESULT IF THE ROOF IS DAMAGED BY
ANY CAUSE LISTED ABOVE UNDER "EXCLUSIONS FROM COVERAGE" IF THE DAMAGE AFFECTS
THE INTEGRITY OR WATERTIGHTNESS OF THE ROOF. AND THE OWNER DOES NOT PROMPTLY
MAKE REPAIRS FOLLOWING WRITTEN NOTIFICATION BY GAFMC TO RECTIFY THE DAMAGE AND
PRESERVE THE INTEGRITY OF THE ROOF.
THIS GUARANTEE IS EXPRESSLY IN LIEU OF ANY OTHER GUARANTEES AND/OR
WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, AND OF ANY OTHER
OBLIGATIONS OR LIABILITY ON THE PART OF GAF MATERIALS CORPORATION, WHETHER ANY
CLAIM AGAINST IT IS BASED UPON STRICT LIABILITY, NEGLIGENCE, BREACH OF WARRANTY
OR ANY OTHER THEORY OR CAUSE OF ACTION. IN NO EVENT SHALL GAF MATERIALS
CORPORATION BE LIABLE FOR ANY CONSEQUENTIAL OR INCIDENTAL DAMAGES OF ANY KIND.
NOTE: This Guarantee becomes effective only when bills for installation and
supplies have been paid in full to the roofing contractor and materials
suppliers, and the Guarantee charge has been paid to GAF Materials Corporation.
GAF MATERIALS CORPORATION
1361 ALPS ROAD
WAYNE, NJ 07470
FORM COMTS581 By [ILLEGIBLE]
-------------------------------------
Authorized Signature
Date March 18, 1999
<PAGE>
EXHIBIT F
CONDITION OF BUILDING UPON POSSESSION
DATE: August 31, 2001
LOCATION: 2110 Rutherford Road, Carlsbad
TENANT: CancerVax Corporation
<TABLE>
<CAPTION>
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OFFICE AREA COMMENTS
---------------------------------------------------------------------------------------------
<S> <C>
CARPET
---------------------------------------------------------------------------------------------
CEILING
---------------------------------------------------------------------------------------------
DOORS
---------------------------------------------------------------------------------------------
HVAC
---------------------------------------------------------------------------------------------
LIGHTS
---------------------------------------------------------------------------------------------
WINDOW COVERINGS
---------------------------------------------------------------------------------------------
WALLS
---------------------------------------------------------------------------------------------
WINDOWS
---------------------------------------------------------------------------------------------
BATHROOMS
---------------------------------------------------------------------------------------------
DOORS
---------------------------------------------------------------------------------------------
FANS
---------------------------------------------------------------------------------------------
FIXTURES
---------------------------------------------------------------------------------------------
FLOOR
---------------------------------------------------------------------------------------------
LIGHTS
---------------------------------------------------------------------------------------------
MIRRORS
---------------------------------------------------------------------------------------------
PLUMBING
---------------------------------------------------------------------------------------------
WALLS
---------------------------------------------------------------------------------------------
WAREHOUSE
---------------------------------------------------------------------------------------------
CEILING
---------------------------------------------------------------------------------------------
FLOOR
---------------------------------------------------------------------------------------------
LIGHTS
---------------------------------------------------------------------------------------------
MAN DOORS
---------------------------------------------------------------------------------------------
SKYLIGHTS
---------------------------------------------------------------------------------------------
TRUCK DOORS
---------------------------------------------------------------------------------------------
WALLS
---------------------------------------------------------------------------------------------
MISCELLANEOUS
---------------------------------------------------------------------------------------------
KITCHEN AREA
---------------------------------------------------------------------------------------------
SIGNAGE
---------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
EXHIBIT G
LANDLORD'S WAIVER AND CONSENT
(OWNER)
THIS LANDLORD'S WAIVER AND CONSENT is made by Blackmore Airport Centre,
a California Limited Partnership ("Owner") whose address is P.O. Box 1810,
Rancho Santa Fe, California 92067 in favor of__________________________
(hereinafter referred to as "Lender") with an address of
__________________________________________and affects the real property commonly
known as 2110 Rutherford Road, Carlsbad, California 92008 (hereinafter referred
to as the "Real Property" or the "Premises") in connection with the Lender
entering into the following agreements dated__________________and other
agreements related thereto (hereinafter collectively referred to as the
"Agreements") with CancerVax Corporation (hereinafter jointly and severally
referred to as "Borrower"), which Agreements, among other things were given by
Borrower to Lender for the purpose of securing the repayment of all obligations
and the performance of all duties now or hereafter owing by Borrower to Lender,
of every kind and description (collectively the "Obligations"). Borrower is a
tenant of Owner for the Premises pursuant to that certain lease agreement
dated________________________("Lease"). This Waiver does not amend any of the
terms of the Agreements and reference is made to the Agreements for further
information as to their terms.
Pursuant to the Agreements, Lender has loaned or may hereafter loan
monies to Borrower secured by, among other collateral, Borrower's now-owned and
hereafter acquired goods, merchandise, inventory, equipment, furniture,
furnishings, fixtures, trade fixtures, machinery and tools, together with all
additions, substitutions, replacements, and improvements to the same (hereafter
referred to as "Goods"), which Goods are or are to be located on and may be
affixed to the Premises or improvements thereon.
Owner agrees as follows:
1. Goods Remain Personal Property The Goods shall at all times be
and remain personal property, and the Goods shall not be deemed a fixture or
part of the Real Property. Owner disclaims any interest in the Goods and will
not assert any statutory or possessory lien against any of the Goods.
2. Notice of Default Owner will send to Lender by certified mail,
at its address above, a copy of any written notice Owner sends to Borrower, at
the same time as it sends such notice to Borrower, of a default by Borrower
under the Lease, and allow Lender at Lender's option, thirty (30) days from
Lender's receipt of such notice in which to cure or request Borrower to cure
such default or to take possession of the Premises in accordance with Paragraph
3 below.
3. License to Lender Conditioned upon Lender's performance of the
items described in Paragraph 4, Owner grants Lender the option, as set forth
below, to enter into possession of the Premises to do any or all of the
following with respect to the Goods: inspect them, assemble them, have them
appraised, display them, sever them, remove them, maintain them, prepare them
for sale or lease, repair them, lease them, and transfer and/or sell them at one
or more public auctions or private sales. Lender shall have the foregoing rights
for a period of up to thirty (30) days (at Lender's discretion and with Owner's
prior approval), following Lender obtaining possession of the Premises either by
Borrower or Owner placing Lender in possession of the Premises or abandonment of
the Premises by Borrower to Lender or otherwise, but in no event shall Lender be
under any obligation to take possession of the Premises. Any extensions of the
foregoing period shall be with the written consent of Owner. Lender shall repair
prior to vacating the Premises, at its cost, any structural or cosmetic damage
to the Premises caused by the removal of the Goods by Lender. In the event
Lender does not remove said Goods from the Premises within the thirty (30) day
period, or Lender fails to take possession of the Premises within ten (10) days
after Owner's notice of availability, Lender shall have no further right to said
inventory and Owner will execute the right to distrain on the Goods as Owner
deems necessary.
<PAGE>
Landlord's Waiver and Consent
Page 2
4. Rent Payable By Lender If the rent payable from the Borrower
to the Owner has not been paid for a period during which Lender may take
possession of the Premises pursuant to Paragraph 3 above, then Owner shall
condition Lender's right to take or keep possession of the Premises upon Lender
agreeing (within ten (10) days of Landlord's request), in writing, to pay in
advance such rent which is payable to Owner (prorated on a daily basis) for the
actual number of days Lender is in possession of the Premises, up to 60 days or
such longer period as may be agreed to in writing between Owner and Lender.
Lender shall have no obligation to remedy any defaults of Borrower or to pay any
share of real property taxes or other taxes, insurance, maintenance costs, or
other sums payable by Borrower (whether or not denominated as "rent" in the
Lease) for any period prior to Lender taking possession. No agreement by Lender
to pay such rent shall be binding on Lender unless set forth in a written
agreement signed by Lender, Lender's failure to agree to pay such rent within
ten (10) days of Landlord's request shall cause this waiver and consent to
terminate immediately.
5. General This Waiver and Consent shall continue until the
earlier of such time as all Obligations have been paid and performed in full and
Lender's failure to take possession of the Premises within ten (10) days after
Owner notifying Lender that it may take possession of the Premises. This Waiver
and Consent shall be governed and controlled by, and interpreted under, the laws
of the State of California and shall inure to the benefit of, and be binding
upon, the successors, heirs and assigns of Owner and Lender.
DATED: ______________________ OWNER: BLACKMORE AIRPORT CENTRE,
A CALIFORNIA LIMITED PARTNERSHIP
By: Blackmore Family Partners,
A California General Partnership,
General Partner
By: __________________________
Allen Joseph Blackmore, Trustee
of the Blackmore Family Trust
Restated 1995, General Partner