California-San Diego-10655/10665/10675 Sorrento Valley Road Lease - Sycamore/San Diego Investors and Recombinant BioCatalysis Inc.
MULTI-TENANT OFFICE R & D BUILDING LEASE - MODIFIED GROSS
This Lease between Sycamore/San Diego Investors, an Illinois Limited Partnership
("Landlord"), and Recombinant BioCatalysis, Inc., a Delaware Corporation
("Tenant"), is dated September 24, 1996.
1. LEASE OF PREMISES.
In consideration of the Rent (as defined at Section 5.4) and the provisions of
this Lease, Landlord leases to Tenant and Tenant leases from Landlord the
Premises shown by diagonal lines on the floor plan attached hereto as Exhibit
"A," and further described at Section 21. The Premises are located within the
Building and Project described in Section 2m. Tenant shall have the non-
exclusive right (unless otherwise provided herein) in common with Landlord,
other tenants, subtenants and invitees, to use of the Common Areas (as defined
at Section 2e).
2. DEFINITIONS.
As used in this Lease, the following terms shall have the following meanings:
a. Base Rent: $501,984.00 (five hundred one thousand nine hundred eighty-four
Dollars & no/00), per year.
b. Base Year: The calendar year of 1997.
c. Broker(s) and Sales Agent(s): Business Real Estate/Bill Cavanaugh &
Thomas M. Crowley.
d. Commencement Date: February 1, 1997.
e. Common Areas: the building lobbies, common corridors and hallways,
restrooms, garage and parking areas, stairways, elevators and other
generally understood public or common areas. Landlord shall have the right
to regulate the use of the Common Areas for the mutual benefit and safety of
all tenants, but without material restriction on Tenant's rights.
Expense Stop: (fill in if applicable): $ N/A.
f. Expiration Date: January 31, 2002, unless otherwise sooner terminated in
accordance with the provisions of this Lease.
g. Index (Section 5.2): United States Department of Labor, Bureau of Labor
Statistics Consumer Price Index for All Urban Consumers, N/A.
h. Landlord's Mailing Address: c/o Shell Properties Corp., 10665 Sorrento
Valley Road, #101, San Diego, CA 92121.
i. Tenant's Mailing Address: Pre-Occupancy to: Elmwood Court 2, 512 Elmwood
Ave, Sharon Hill, PA. 19079-1005.
Post-Occupancy to: 10665 Sorrento Valley Road #100, San Diego, CA 92121.
j. Monthly Installments of Base Rent: $41,832.00 (forty-one thousand eight
hundred thirty-two dollars & no/00) per month.
k. Parking: Tenant shall have the right to park 3.2/1000SF cars on a non-
exclusive basis in the area(s) designated by Landlord for parking. Tenant
shall abide by reasonable parking regulations and rules established from
time to time by Landlord or Landlord's parking operator applicable equally
to all tenants and without imposing material restrictions.
l. Premises: that portion of the Building containing approximately 24,900
square feet of Rentable Area, shown by Diagonal lines on Exhibit "A,"
located on the 1st & 2nd floors of the Building and known as Suite 100 at
10665 Sorrento Valley Road. (Bldg 2) (See Addendum also)
m. Project: the building of which the Premises are a part (the "Building") and
any other buildings or improvements on the real property (the "Property")
located at 10655-65-75 Sorrento Valley Road, San Diego, CA and further
described at Exhibit "B." The Project is known as Sycamore Creek R&D and
Office Park.
n. Rentable Area: as to both the Premises and the Project, the respective
measurements of floor area as may from time to time be subject to lease by
Tenant and all tenants of the Project, respectively, as determined by
Landlord using BOMA as the method of measurement and applied on a consistent
basis throughout the Project.
(1)
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o. Security Deposit (Article 7): $41,832 (Forty One Thousand Eight Hundred
Thirty-Two Dollars & no/00.
p. State: the State of California.
q. Tenant's First Adjustment Date (Section 5.2): the first day of the calendar
month following the Commencement Date plus 12 months.
r. Tenant's Proportionate Share: 31.62%. Such share is a fraction, the
numerator of which is the Rentable Area of the Premises, and the denominator
of which is the Rentable Area of the Project, as determined by Landlord from
time to time. The Project consists of 3 building(s) containing a total
Rentable Area of 78,756 square feet.
s. Tenant's Use Clause (Article 8): Biomedical R&D, Manufacturing Warehousing
and Office uses.
________________________________________________________________________________
t. Term: the period commencing on the Commencement Date and expiring at
midnight on the Expiration Date.
3. EXHIBITS AND ADDENDA.
The exhibits and addenda listed below (unless lined out) are incorporated by
reference in this Lease:
a. Exhibit "A" -- Floor Plan showing the Premises.
b. Exhibit "B" -- Site Plan of the Project.
c. Exhibit "C" -- Tenant Improvements - Plans & Specifications.
d. Addenda: 1 thru 14
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________________________________________________________________________
________________________________________________________________________
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4. DELIVERY OF POSSESSION
SEE ADDENDUM.
5. RENT.
5.1. Payment of Base Rent. Tenant agrees to pay the Base Rent for the Premises.
Monthly Installments of Base Rent shall be payable in advance on the first day
of each calendar month of the Term. If the Term begins (or ends) on other than
the first (or last) day of a calendar month, the Base Rent for the partial month
shall be prorated on a per diem basis.
5.2 Adjusted Base Rent.
SEE ADDENDUM.
5.3 Project Operating Costs.
a. In order that the Rent payable during the Term reflect any increase in
Project Operating Costs, Tenant agrees to pay to Landlord as Rent, Tenant's
Proportionate Share of all increases in costs, expenses and obligations
attributable to the Project and its operation, all as provided below.
b. If, during any calendar year during the Term, Project Operating Costs
exceed the Project Operating Costs for the Base Year, Tenant shall pay to
Landlord, in addition to the Base Rent and all other payments due under
this Lease, an amount equal to Tenant's Proportionate Share of such excess
Project Operating Costs in accordance with the provisions of this
Section 5.3b.
(2)
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(1) The term "Project Operating Costs" shall include all those items described
in the following subparagraphs (a) and (b). (See Addendum also)
(a) All taxes, assessments, water and sewer charges and other similar
governmental charges levied on or attributable to the Building or Project
or their operation, including but not limited to (i) real property taxes or
assessments levied or assessed against the Building or Project, (ii)
assessments or charges levied or assessed against the Building or Project
by any redevelopment agency, and (iii) any tax measured by gross rentals
received from the leasing of the Premises, Building or Project, including
any (1) general or special, ad valorem or specific, excise, capital levy or
other tax, assessment, levy or charge directly on the Rent received under
this Lease or on the rent received under any other lease of space in the
Building or Project, or (2) any license fee, excise or franchise tax,
assessment, levy or charge measured or based, in whole or in part, upon
such rent, or (3) any transfer, transaction, or similar tax, assessment,
levy or charge based directly or indirectly upon the transaction
represented by this Lease or such other leases, or (4) any occupancy, use,
per capita or other tax, assessment, levy or charge based directly or
indirectly upon the occupancy or use of the Premises or other premises
within the Building or Project, but excluding any net income, franchise,
capital stock, estate or inheritance taxes imposed by any local, state or
federal governmental entity.
(b) Operating costs incurred by Landlord in maintaining and operating the
Building and Project, including without limitation the following actual
costs of (1) utilities; (2) supplies; (3) insurance (including public
liability, property damage, earthquake, and fire and extended coverage
insurance for the full replacement cost of the Building and Project as
required by Landlord or its lenders for the Project; (4) services of
independent contractors; (5) compensation (including employment taxes and
fringe benefits) of all persons who perform duties connected with the
operation, maintenance, repair or overhaul of the Building or Project, and
equipment, improvements and facilities located within the Project,
including without limitation engineers, janitors, painters, floor waxers,
window washers, security and parking personnel and gardeners (but excluding
persons performing services not uniformly available to or performed for
substantially all Building or Project tenants) to the extent of such
services (6) operation and maintenance of a room for delivery and
distribution of mail to tenants of the Building or Project as required by
the U.S. Postal Service (including, without limitation, an amount equal to
the fair market rental value of the mail room premises); (7) management of
the Building or Project, whether managed by Landlord or an independent
contractor (including, without limitation, an amount equal to the fair
market value of any on-site manager's officer) not to exceed 4% of Annual
Gross Rents in any calendar year (8) rental expenses for (or a reasonable
depreciation allowance on) personal property used in the maintenance,
operation or repair of the Building or Project; (9) costs, expenditures or
charges (whether capitalized or not) required by any governmental or quasi-
governmental authority; (12) amortization of capital expenses (including
financing costs) (i) required by a governmental entity for energy
conservation or life safety purposes, or (ii) made by Landlord to reduce
Project Operating Costs; and (13) any other costs or expenses incurred by
Landlord under this Lease and not otherwise reimbursed by tenants of the
Project, but excluding any Landlord mark-ups, lease commissions; lease
enforcement costs; tenant improvement costs; costs to repair any damages
where caused by Landlord or its agents, or recovered by insurance; legal
fees except as incurred by Landlord with regard to any of the above said
Operating Costs.
(2) Tenant's Proportionate Share of Project Operating Costs shall be payable by
Tenant to Landlord as follows:
(a) Beginning with the calendar year following the Base Year and for each
calendar year thereafter ("Comparison Year"), Tenant shall pay Landlord an
amount equal to Tenant's Proportionate Share of the Project Operating Costs
incurred by Landlord in the Comparison Year which, after adjustment for the
change in the CPI over the period exceeds the total amount of Project
Operating Costs payable by Landlord for the Base Year. This excess is
referred to as the "Excess Expenses."
(b) To provide for current payments of Excess Expenses, Tenant shall, at
Landlord's request, pay as additional rent during each Comparison Year, an
amount equal to Tenant's Proportionate Share of the Excess Expenses payable
during such Comparison Year, as estimated by Landlord on or before each
April 1 following Base Year. Such payments shall be made in monthly
installments, commencing on the first day of the month following the month
in which Landlord notifies Tenant of the amount it is to pay hereunder and
continuing until the first day of the month following the month in which
Landlord gives Tenant a new notice of estimated Excess Expenses. It is the
intention hereunder to estimate the amount of the Excess Expenses for each
Comparison Year and Tenant's Proportionate Share thereof, and then to make
an adjustment in the following year based on the actual Excess Expenses
incurred for that Comparison Year, provided that estimated Project Oper.
Costs for any comparison year shall not exceed 106% of actual Proj. Oper.
Costs in preceding comparison year.
(c) On or before April 1 of each Comparison Year after the first Comparison
Year (or as soon thereafter as is practical), Landlord shall deliver to
Tenant a statement setting forth Tenant's Proportionate Share of the Excess
Expenses for the preceding Comparison Year. If Tenant's Proportionate Share
of the actual Excess Expenses for the previous Comparison Year exceeds the
total of the estimated monthly payments made by Tenant for such year,
Tenant shall pay Landlord the amount of the deficiency within ten (10) days
of the receipt of the statement. If such total exceeds Tenant's Propor-
(3)
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tionate Share of the actual Excess Expenses for such Comparison Year, then
Landlord shall credit against Tenant's next ensuing monthly installment(s)
of additional rent an amount equal to the difference until the credit is
exhausted. If a credit is due from Landlord on the Expiration Date,
Landlord shall pay Tenant the amount of the credit plus one-half of any
credit in excess of 102% of the Operating Costs. The obligations of Tenant
and Landlord to make payments required under this Section 5.3 shall survive
the Expiration Date.
(d) Tenant's Proportionate Share of Excess Expenses in any Comparison Year
having less than 365 days shall be appropriately prorated.
(e) If any dispute arises as to the amount of any additional rent due
hereunder, Tenant shall have the right after reasonable notice and at
reasonable times to inspect Landlord's accounting records at Landlord's
accounting office and, if after such inspection Tenant still disputes the
amount of additional rent owed, a certification as to the proper amount
shall be made by Landlord's certified public accountant, which
certification shall be final and conclusive. Tenant agrees to pay the cost
of such certification unless it is determined that Landlord's original
statement overstated Project Operating Costs by more than two percent (2%).
(f) If this Lease sets forth an Expense Stop at Section 2f, then during the
Term Tenant shall be liable for Tenant's Proportionate Share of any actual
Project Operating Costs which exceed the amount of the Expense Stop. Tenant
shall make current payments of such excess costs during the Term in the
same manner as is provided for payment of Excess Expenses under the
applicable provisions of Section 5.3b(2)(b) and (c) above.
4. Definition of Rent. All costs and expenses which Tenant assumes or agrees to
pay to Landlord under this Lease shall be deemed additional rent (which,
together with the Base Rent is sometimes referred to as the "Rent"). The Rent
shall be paid to the Building manager (or other person) and at such place, as
Landlord may from time to time designate in writing, without any prior demand
therefor and _________________ in lawful money of the United States of America.
5. Rent Control. If the amount of Rent or any other payment due under this Lease
violates the terms of any governmental restrictions on such Rent or payment,
then the Rent or payment due during the period of such restrictions shall be the
maximum amount allowable under those restrictions. Upon termination of the
restrictions, Landlord shall, to the extent it is legally permitted, recover
from Tenant the difference between the amounts received during the period of the
restrictions and the amounts Landlord would have received had there been no
restrictions.
6. INTEREST AND LATE CHARGES.
Tenant fails to pay when due any Rent or other amounts or charges which Tenant
is obligated to pay under the terms of this Lease, the unpaid amounts shall bear
interest at the maximum rate then allowed by law. Tenant acknowledges that the
late payment of any Monthly Installment of Base Rent will cause Landlord to lose
the use of that money and incur costs and expenses not contemplated under this
Lease, including without limitation, administrative and collection costs and
processing and accounting expenses, the exact amount of which is extremely
difficult to ascertain. Therefore, in addition to interest, if any such
installment is not received by Landlord within ten (10) days from the date it is
due, Tenant shall pay Landlord a late charge equal to ten percent (10%) of such
installment. Landlord and Tenant agree that this late charge represents a
reasonable estimate of such costs and expenses and is fair compensation to
Landlord for the loss suffered from such nonpayment by Tenant. Acceptance of any
interest or late charge shall not constitute a waiver of Tenant's default with
respect to such nonpayment by Tenant nor prevent Landlord from exercising any
other rights or remedies available to Landlord under this Lease.
7. SECURITY DEPOSIT.
a. Tenant agrees to deposit with Landlord the Security Deposit set forth at
Section 20 upon execution of this Lease, security for Tenant's faithful
performance of its obligations under this Lease. Landlord and Tenant agree that
the Security Deposit may be commingled with funds of Landlord and Landlord shall
have no obligation or liability payment of interest on such deposit. Tenant
shall not mortgage, assign, transfer or encumber the Security Deposit without
the prior written consent of Landlord and any attempt by Tenant to do so shall
be void, without _________________ or effect and shall not be binding upon
Landlord.
b. If Tenant fails to pay any Rent or other amount when due and payable under
this Lease, or fails to perform any of the terms hereof, Landlord may
appropriate and apply or use all or any portion of the Security Deposit for Rent
payments or any other amount then due and unpaid, for payment of any amount for
which Landlord has become negated as a result of Tenant's default or breach, and
for any loss or damage sustained by Landlord as a result of Tenant's default or
breach, and Landlord may so apply or use this deposit without prejudice to any
other remedy Landlord may have by reason of Tenant's default or breach. If
Landlord so uses any of the Security Deposit,
(4)
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Tenant shall, within ten (10) days after written demand therefor, restore the
Security Deposit to the full amount originally deposited; Tenant's failure to do
so shall constitute an act of default hereunder and Landlord shall have the
right to exercise any remedy provided for at Article 27 hereof. Within fifteen
(15) days after the Term (or any extension thereof) has expired or Tenant has
vacated the Premises, whichever shall last occur, and provided Tenant is not
then in default on any of its obligations hereunder, Landlord shall return the
Security Deposit to Tenant, or, if Tenant has assigned its interest under this
Lease, to the last assignee of Tenant. If Landlord sells its interest in the
Premises, Landlord may deliver this deposit to the purchaser of Landlord's
interest and thereupon be relieved of any further liability or obligation with
respect to the Security Deposit.
8. TENANT'S USE OF THE PREMISES.
a. Tenant shall use the Premises solely for the purposes set forth in Tenant's
Use Clause. Tenant shall not use or occupy the Premises in violation of law or
the certificate of occupancy issued for the Building or Project, and shall, upon
notice from Landlord, immediately discontinue any use of the Premises which is
declared by any governmental authority having jurisdiction to be a violation of
law or the certificate of occupancy. Tenant, at Tenant's own cost and expense,
shall comply with all laws, ordinances, regulations, rules of any governmental
agencies or authorities having jurisdiction which shall, by reason of the nature
of Tenant's use or occupancy of the Premises, impose any duty upon Tenant or
Landlord with respect to the Premises or its use or occupation provided Landlord
is solely responsible for laws and rules relating to Premises without regard to
lease to Tenant. A judgment of any court of competent jurisdiction or the
admission by Tenant in any action or proceeding against Tenant that Tenant has
violated any such laws, ordinances, regulations, rules in the use of the
Premises shall be deemed to be a conclusive determination of that fact as
between Landlord and Tenant. Tenant shall not knowingly do or permit to be done
anything which will invalidate or increase the cost of any fire, extended
coverage or other insurance policy covering the Building or Project and/or
property located therein, and shall comply with all reasonable rules, orders,
regulations, requirements and recommendations of the Insurance Services Office
or any other organization performing a similar function. Tenant shall promptly
upon demand reimburse Landlord for any additional premium charged for such
policy by reason of Tenant's failure to comply with the provisions of this
Article. Tenant shall not do or permit anything to be done in or about the
Premises which will unreasonably interfere with the rights of other tenants or
occupants of the Building or Project or use or all the Premises to be used for
any immoral, unlawful purpose in, on or about the Premises. Tenant shall not
commit or suffer to be committed any waste in or upon the Premises.
9. SERVICES AND UTILITIES.
a. Landlord shall furnish (i) separate electric metering to the Premises and
shall distribute sufficient electric, natural gas and water & sewer capacity to
the Premises for the intended use and occupancy and per Exhibit "C"; (ii)
lightbulb replacement for Building Standard (ie Landlord installed) light
fixtures within the Premises; (iii) five (5) day janitorial service; (iv)
monthly elevator maintenance service; (v) bi-monthly HVAC equipment filter
maintenance service; and (vi) semi-annual exterior window cleaning service.
Landlord shall also furnish and maintain RO/DI, vaccuum, compressed air, steam,
standby electric and UPS, service and systems.
b. Landlord shall not be in default hereunder or be liable for any damages
directly or indirectly resulting from, nor shall rent be abated by reason of (i)
the installation, use or interruption of use of any equipment in connection with
the furnishing of any of the foregoing services or utilities, (ii) failure to
furnish or delay in furnishing any such services or utilities where such failure
or delay is caused by accident or any condition or event beyond the reasonable
control of Landlord, or by the making of necessary repairs or improvements to
the Premises, Building or Project, or (iii) the limitation, curtailment or
rationing of; or restrictions on, use of water, electricity, gas or any other
form of energy serving the Premises, Building or Project provided Landlord uses
its best efforts to limit or avoid such failure or interruption or delay, and
unless directly attributable to Landlord's wrongful or negligent acts, for the
loss or damage to Tenant's property or business, through or in connection with
or incidental to failure to furnish or delay in the furnishing of any of the
foregoing services or utilities.
c. Tenant shall arrange for the initiation of service for any separately
metered utilities to the Premises not to be provided by Landlord herein,
including telephone service, directly with the appropriate utility vendor or
supplier, and all billing invoices, security deposits, and any other charges
relating to the initiation and continued provision of such separately metered
utilities and telephone service shall be the responsibility of and in the name
of Tenant
(5)
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10. CONDITION OF THE PREMISES.
Tenant's taking possession of the Premises shall be deemed conclusive evidence
that as of the date of taking possession the Premises are in good order and
satisfactory condition, except for defects not reasonably discoverable by Tenant
and, such matters as to which Tenant gave Landlord notice on or before the
Commencement Date. No promise of Landlord to alter, remodel, repair or improve
the Premises, the Building or the Project and no representation, express or
implied, respecting any matter or thing relating to the Premises, Building,
Project or this Lease (including, without limitation, the condition of the
Premises, the Building or the Project) have been made to Tenant by Landlord or
its Broker or Sales Agent, other than as may be contained herein or in a
separate exhibit or addendum signed by Landlord and Tenant.
11. CONSTRUCTION, REPAIRS AND MAINTENANCE.
a. Landlord's Obligations. Landlord shall perform Landlord's Work to the
Premises as described in Exhibit "C." Landlord shall maintain in good order,
condition and repair the Building and all other portions of the Premises not
the express obligation of Tenant.
b. Tenant's Obligations.
(1) Tenant shall perform Tenant's Work to the Premises as described in
Exhibit "C."
(2) Tenant shall be responsible for all repairs, maintenance and
alterations in and to the Premises, Building and Project and the
facilities and systems thereof, the need for which arises out of (i)
Tenant's use or occupancy of the Premises and other than through normal
obsolesence and wasting away, (ii) the installation, removal, use or
operation of Tenant's Property (as defined in Article 13) in the
Premises, (iii) the moving of Tenant's Property into or out of the
Building, or (iv) subject to Article 23 hereof, the misuse or
negligence of Tenant, its agents, contractors, employees or invitees.
(3) If Tenant fails to maintain the Premises as required above.
Landlord shall give Tenant notice to do such acts as are reasonably
required to so maintain the Premises. If Tenant fails to promptly
commence such work and diligently prosecute it to completion, then
Landlord shall have the right to do such acts and expend such funds at
the expense of Tenant as are reasonably required to perform such work.
Any amount so expended by Landlord shall be paid by Tenant promptly
after demand with interest at the prime commercial rate then being
charged by Bank of America NT & Series A plus two percent (2%) per
annum, from the date of such work, but not to exceed the maximum rate
then allowed by law. Landlord shall have no liability to Tenant for any
damage, inconvenience, or interference with the use of the Premises by
Tenant as a result of performing any such work.
c. Compliance with Law. Landlord and Tenant shall each do all acts required
to comply with all applicable laws, ordinances, and rules of any public
authority relating to their respective maintenance obligations as set forth
herein.
e. Load and Equipment Limits. Tenant shall not place a load upon any floor
of the Premises which exceeds 3000LB/SF on first floor, 70LB/SF on second
floor and 32LB/SF on roof.
f. Except as otherwise expressly provided in this Lease, Landlord shall have
no liability to Tenant nor shall Tenant's obligations under this Lease be
reduced or abated in any manner whatsoever by reason or any inconvenience,
annoyance, interruption or injury to business arising from Landlord's making
any repairs or changes which Landlord is required or permitted by this Lease
or by any other tenant's lease or required by law to make in or to any
portion of the Project, Building or the Premises provided and on the
condition that Landlord shall use its best efforts to minimize any
interference with Tenant's business in the Premises and the Building.
g. Tenant shall give Landlord prompt notice of any material damage to or
defective condition in any part or appurtenance of the Building's
mechanical, electrical, plumbing, HVAC or other systems serving, located in,
or passing through the Premises.
h. Upon the expiration or earlier termination of this Lease, Tenant shall
return the Premises to Landlord per Article 18 hereof. Any damage to the
Premises, including any structural damage, resulting from Tenant's use or
from the removal of Tenant's fixtures, furnishings and equipment pursuant to
Section 13b shall be repaired by Tenant at Tenant's expense.
12. ALTERATIONS AND ADDITIONS.
a. Except for work reasonably construed as refurbishment or redecoration,
Tenant shall not make any additions, alterations or improvements to the
Premises without obtaining the prior written consent of Landlord, which
shall not be unreasonably withheld or delayed. Landlord's consent may be
conditioned on Tenant's removing any such additions, alterations or
improvements upon the expiration of the Term and restoring the Premises to
the same condition as on the date Tenant took possession. All work with
respect to any addition, alteration or improvement shall be done in a good
and workmanlike manner by properly qualified and licensed personnel, and
such work shall be diligently prosecuted to completion. Landlord may, at
Landlord's option, require that Landlord's contractor supervise that portion
of any such alteration or additions involving the Building's roof, exterior
metal siding and/or stucco surfaces, windows and/or window frames,
waterproofing elements associated with any of the above underground work,
landscaping, building entry doors and/or building security system, common
area equipment or improvements, and/or any item or element within the
Premises, building or project subject to a warranty to Landlord.
(6)
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b. Tenant shall pay the costs of any work done by Tenant on the Premises
pursuant to Section 12a, and shall keep the Premises, Building and
Project free and clear of liens of any kind. Tenant shall indemnify, defend
against and keep Landlord free and harmless from all liability, loss,
damage, costs, attorneys' fees and any other expense incurred on account of
claims by any person performing work or furnishing materials or supplies for
Tenant or any person claiming under Tenant.
Tenant shall keep Tenant's leasehold interest, and any additions or
improvements which are or become the property of Landlord under this Lease,
free and clear of all attachment or judgment liens. Before the actual
commencement of any work for which a claim or lien may be filed, Tenant
shall give Landlord notice of the intended commencement date a sufficient
time before that date to enable Landlord to post notices of non-
responsibility or any other notices which Landlord deems necessary for the
proper protection of Landlord's interest in the Premises, Building or the
Project, and Landlord shall have the right to enter the Premises and post
such notices at any reasonable time.
c. Landlord may require, at Landlord's sole option, that Tenant provide to
Landlord, at Tenant's expense, a lien and completion bond in an amount equal
to at least the total estimated cost of any additions, alterations or
improvements to be made in or to the Premises exceeding $25,000.00 to
protect Landlord against any liability for mechanic's and materialmen's
liens and to insure timely completion of the work. Nothing contained in this
Section 12c shall relieve Tenant of its obligation under Section 12b to keep
the Premises, Building and Project free of all liens.
d. Unless their removal is required by Landlord as provided in Section 12a,
all permanent additions, alterations and improvements made to the Premises
shall become the property of Landlord and be surrendered with the Premises
upon the expiration of the Term; provided, however, Tenant's equipment,
machinery and trade fixtures shall remain the property of Tenant and may be
removed, subject to the provisions of Section 13b.
13. LEASEHOLD IMPROVEMENTS; TENANT'S PROPERTY.
a. All permanent fixtures, equipment, improvements and appurtenances
attached to or built into the Premises at the commencement of or during the
Term, whether or not by or at the expense of Tenant ("Leasehold
Improvements"), shall be and remain a part of the Premises, shall be the
property of Landlord and shall not be removed by Tenant, except as expressly
provided in Section 13b.
b. All movable partitions, business and trade fixtures, machinery and
equipment, communications equipment and office equipment located in the
Premises and acquired by or for the account of Tenant, without expense to
Landlord, which can be removed without structural damage to the Building or
for which Tenant repairs any such damage caused by their removal, and all
furniture, furnishings and other articles of movable personal property owned
by Tenant and located in the Premises (collectively "Tenant's Property")
shall be and shall remain the property of Tenant and may be removed by
Tenant at any time during the Term; provided that if any of Tenant's
Property is removed, Tenant shall promptly repair any damage to the Premises
or to the Building resulting from such removal.
14. RULES AND REGULATIONS.
Tenant agrees to comply with (and cause its agents, contractors, employees and
invitees to comply with) the rules and regulations attached hereto as Exhibit
"D" and with such reasonable modifications thereof and additions thereto as
Landlord may from time to time make which are not inconsistent with the terms
hereof and do not materially increase Tenant's duties or restrict its rights.
Landlord shall not be responsible for any violation of said rules and
regulations by other tenants or occupants of the Building or Project; provided
that Landlord uses its good faith efforts to enforce such rules.
15. CERTAIN RIGHTS RESERVED BY LANDLORD.
Landlord reserves the following rights:
a. To name the Building and Project and to change the name or street
address of the Building or Project one time during the lease term;
b. To install and maintain all signs on the exterior and governmentally
mandated, if any, on the interior of the Building and Project;
c. Subject to Tenant's reasonable security requirements, to have pass keys
to the Premises and all doors within the Premises, excluding Tenant's vaults
and safes;
d. Subject to Tenant's reasonable security requirements, at reasonable
times during the Term, and on reasonable prior notice to Tenant, to inspect
the Premises, and to show the Premises to any prospective purchaser or
mortgagee of the Project, or to any assignee of any mortgage on the Project,
or to others having an interest in the Project or Landlord, and during the
last six months of the Term, to show the Premises to prospective tenants
thereof; and
e. Subject to Tenant's reasonable security requirements, to enter the
Premises for the purpose of making inspections, repairs, alterations,
additions or improvements to the Premises or the Building (including,
without limitation, checking, calibrating, adjusting or balancing controls
and other parts of the HVAC system), and to take all steps as may be
necessary or desirable for the safety, protection, maintenance or
preservation of the Premises or the Building or Landlord's interest
therein, or as may be necessary or desirable for the operation or
improvement of the Building or in order to comply with laws, orders or
requirements of governmental or other authority. Landlord agrees to use its
best efforts (except in an emergency) to minimize interference with Tenant's
business in the Premises in the course of any such entry.
16. ASSIGNMENT AND SUBLETTING.
No assignment of this Lease or sublease of all or any part of the Premises shall
be permitted, except as provided in this Article 16.
a. Tenant shall not, without the prior written consent of Landlord, assign
or hypothecate this Lease or any interest herein or sublet the Premises or
any part thereof, or permit the use of the Premises by any party other than
Tenant. Any of the foregoing acts without such consent shall be void and
shall, at the option of Landlord, terminate this Lease.
(7)
<PAGE>
b. If at any time or from time to time during the Term Tenant desires to
assign this Lease or sublet all or any part of the Premises, Tenant shall
give notice to Landlord setting forth the terms and provisions of the
proposed assignment or sublease, and the identity of the proposed assignee
or subtenant. Tenant shall promptly supply Landlord with such information
concerning the business background and if an assignment, then also financial
condition of such proposed assignee or subtenant as Landlord may reasonably
request. Landlord shall have the option, exercisable by notice given to
Tenant within twenty (20) days after Tenant's notice is given, in the case
of an assignment, to terminate this Lease. If Landlord does not exercise
such option, Tenant may assign the Lease or sublet such space to such
proposed assignee or subtenant on the following further conditions:
(1) Landlord shall have the right to approve such proposed assignee or
subtenant, which approval shall not be unreasonably delayed or withheld;
(2) The assignment or sublease shall be on the same terms set forth in
the notice given to Landlord;
(3) No assignment or sublease shall be valid and no assignee or
sublessee shall take possession of the Premises until an executed
counterpart of such assignment or sublease has been delivered to
Landlord;
(4) No assignee or sublessee shall have a further right to assign or
sublet except on the terms herein contained; and
(5) Any sums or other economic consideration received by Tenant as a
result of such assignment or subletting, however denominated under the
assignment or sublease, which exceed, in the aggregate, (i) the total
sums which Tenant is obligated to pay Landlord under this Lease
(prorated to reflect obligations allocable to any portion of the
Premises subleased), plus (ii) any real estate brokerage commissions or
fees payable in connection with such assignment or subletting, shall be
paid to Landlord as additional rent under this Lease without affecting
or reducing any other obligations of Tenant hereunder.
c. Notwithstanding the provisions of paragraphs a and b above, Tenant may
assign this Lease or sublet the Premises or any portion thereof, without
Landlord's consent and without extending any recapture or termination
option to Landlord, to any corporation which controls, is controlled by or
is under common control with Tenant, or to any corporation resulting from a
merger or consolidation with Tenant, or to any person or entity which
acquires all the assets of Tenant's business as a going concern, provided
that (i) the assignee or sublessee assumes, in full, the obligations of
Tenant under this Lease, (ii) Tenant remains fully liable under this Lease,
and (iii) the use of the Premises under Section 8 remains unchanged.
d. No subletting or assignment shall release Tenant of Tenant's obligations
under this Lease or alter the primary ability of Tenant to pay the Rent and
to perform all other obligations to be performed by Tenant hereunder. The
acceptance of Rent by Landlord from any other person shall not be deemed to
be a waiver by Landlord of any provision hereof. Consent to one assignment
or subletting shall not be deemed consent to any subsequent assignment or
subletting. In the event of default by an assignee or subtenant of Tenant
or any successor of Tenant in the performance of any of the terms hereof,
Landlord may proceed directly against Tenant without the necessity of
exhausting remedies against such assignee, subtenant or successor. Landlord
may consent to subsequent assignments of the Lease or sublettings or
amendments or modifications to the Lease with assignees of Tenant, without
notifying Tenant, or any successor of Tenant, and without obtaining its or
their consent thereto and any such actions shall not relieve Tenant of
liability under this Lease.
e. If Tenant requests the consent of Landlord to any assignment or
subletting or if Tenant requests the consent of Landlord for any act that
Tenant proposes to do, then Tenant shall, upon demand, pay Landlord any
attorneys' fees reasonably incurred by Landlord in connection with such act
or request.
17. HOLDING OVER.
If after expiration of the Term, Tenant remains in possession of the Premises
with Landlord's permission (express or implied), Tenant shall become a tenant
from month to month only, upon all the provisions of this Lease (except as to
term and Base Rent), but the "Monthly Installments of Base Rent" payable by
Tenant shall be increased to one hundred fifty percent (150%) of the Monthly
Installments of Base Rent payable by Tenant at the expiration of the Term. Such
monthly rent shall be payable in advance on or before the first day of each
month. If either party desires to terminate such month to month tenancy, it
shall give the other party not less than thirty (30) days advance written notice
of the date of termination.
18. SURRENDER OF PREMISES.
a. Tenant shall peaceably surrender the Premises to Landlord on the
Expiration Date, in broom-clean condition and in as good condition as when
Tenant took possession, except for (i) reasonable wear and tear, (ii) loss
by fire or other casualty, and (iii) loss by condemnation, and (iv) other
damage or loss not caused by Tenant's misconduct or subject to Article 23
hereof - negligence. Tenant shall, on Landlord's request remove Tenant's
Property on or before the Expiration Date and promptly repair all damage to
the Premises or Building caused by such removal.
b. If Tenant abandons or surrenders the Premises, or is dispossessed by
process of law or otherwise, any of Tenant's Property left on the Premises
shall be deemed to be abandoned, and, at Landlord's option, title shall
pass to Landlord under this Lease as by a bill of sale. If Landlord elects
to remove all or any part of such Tenant's Property, the cost of removal,
including repairing any damage to the Premises or Building caused by such
removal, shall be paid by Tenant. On the Expiration Date Tenant shall
surrender all keys to the Premises.
19. DESTRUCTION OR DAMAGE
a. If the Premises or the portion of the Building necessary for Tenant's
occupancy is damaged by fire, earthquake, act of God, the elements or other
casualty, Landlord shall, subject to the provisions of this Article
(8)
<PAGE>
repair the damage as soon as commercially practicable if such repairs can,
in Landlord's opinion, be completed within one hundred eighty (180) days.
If Landlord determines that repairs can be completed within one hundred
eighty (180) days, this Lease shall remain in full force and effect, except
that if such damage is not the result of the negligence or willful
misconduct of Tenant or Tenant's agents, employees, contractors, licensees
or invitees, the Base Rent shall be abated to the extent Tenant's use of
the Premises is impaired, commencing with the date of damage and continuing
until completion of the repairs required of Landlord under Section 19d.
b. If in Landlord's good faith opinion, such repairs to the Premises or
portion of the Building necessary for Tenant's occupancy cannot be
completed within one hundred eighty (180) days, either party may elect,
upon notice to the other given within thirty (30) days after the date of
such fire or other casualty, to terminate this Lease as of the date of such
fire or other casualty; otherwise Landlord shall repair and restore the
Premises and the Building as soon as commercially practicable.
d. If the Premises are to be repaired under this Article, Landlord shall
repair at its cost any injury or damage to the Building and Building
Standard Work in the Premises. Tenant shall be responsible at its sole cost
and expense for the repair, restoration and replacement of any other
Leasehold Improvements and Tenant's Property. Landlord shall not be liable
for any loss of business, inconvenience or annoyance arising from any
repair or restoration of any portion of the Premises, Building or
Project as a result of any damage from fire or other casualty.
e. This Lease shall be considered an express agreement governing any case
of damage to or destruction of the Premises, Building or Project by fire or
other casualty, and any present or future law which purports to govern the
rights of Landlord and Tenant in such circumstances in the absence of
express agreement, shall have no application.
20. EMINENT DOMAIN.
a. If the whole or any substantial portion of the Project or of the
Building is lawfully taken by condemnation or in any other manner for any
public or quasi-public purpose, this Lease shall terminate as of the date
of such taking, and Rent shall be prorated to such date. If less than the
whole or any substantial portion of the Project or of the Building is so
taken, this Lease shall be unaffected by such taking, provided that (i)
Tenant shall have the right to terminate this Lease by notice to Landlord
given within ninety (90) days after the date of such taking if any of the
Premises is taken, and (ii) Landlord shall have the right to terminate this
Lease by notice to Tenant given within ninety (90) days after the date of
such taking. If either Landlord or Tenant so elects to terminate this
Lease, the Lease shall terminate on the thirtieth (30th) day after either
such notice. The Rent shall be prorated to the date of termination. If this
Lease continues in force upon such partial taking, the Base Rent and
Tenant's Proportionate Share shall be equitably adjusted according to the
remaining Rentable Area of the Premises and Project.
b. In the event of any taking, partial or whole, Tenant, shall have the
right, to claim from the condemning authority (but not from Landlord) such
compensation as may be recoverable by Tenant in its own right for
relocation expenses and damage to Tenant's personal property.
c. In the event of a partial taking of the Premises which does not result
in a termination of this Lease, Landlord shall restore the remaining
portion of the Premises as nearly as practicable to its condition prior to
the condemnation or taking, but only to the extent of Building Standard
Work. Tenant shall be responsible at its sole cost and expense for the
repair, restoration and replacement of any other Leasehold Improvements and
Tenant's Property.
21. INDEMNIFICATION.
a. Except for the negligence or willful misconduct of Landlord as to which
Landlord shall indemnify and hold Tenant harmless, Tenant shall indemnify
and hold Landlord harmless against and from liability and claims of any
kind for loss or damage to property of Tenant or any other person, or for
any injury to or death of any person, arising out of: (1) Tenant's use and
occupancy of the Premises, or any work, activity or other things allowed or
suffered by Tenant to be done in, on or about the Premises; (2) any breach
or default by Tenant of any of Tenant's obligations under this Lease; or
(3) any negligent or otherwise tortious act or omission of Tenant, its
agents, employees, invitees or contractors. Tenant shall, at Tenant's
expense, defend Landlord in any action or proceeding arising from any such
claim and shall indemnify Landlord against all costs, attorneys' fees,
expert witness fees and any other expenses incurred in such action or
proceeding. Except for the negligence or willful misconduct of Landlord as
to which Landlord shall indemnify and hold Tenant harmless, as a material
part of the consideration for Landlord's execution of this Lease, Tenant
hereby assumes all risk of damage or injury to any person or property in,
on or about the Premises from any cause.
b. Except for the negligence or willful misconduct of Landlord as to which
Landlord shall indemnify and hold Tenant harmless, Landlord shall not be
liable for injury or damage which may be sustained by the person or
property of Tenant, its employees, invitees or customers, or any other
person in or about the Premises, caused by or resulting from fire, steam,
electricity, gas, water or rain which may leak or flow from or into any
part of the Premises, or from the breakage, leakage, obstruction or other
defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning
or lighting fixtures, whether such damage or injury results from conditions
arising upon the Premises or upon other portions of the Building or Project
or from other sources. Landlord shall not be liable for any damages arising
from any act or omission of any other tenant of the Building or Project.
(9)
<PAGE>
22. TENANT'S INSURANCE.
a. All insurance required to be carried by Tenant hereunder shall be
issued by responsible insurance companies qualified to do business in the
State and rated in "Best's Key Rating Guide" @ A:XII or better. Each policy
shall name Landlord, and at Landlord's request any mortgagee of Landlord,
as an additional insured, as their respective interests may appear. Each
policy shall contain to the extent commercially obtainable (i) a cross-
liability endorsement, (ii) a provision that such policy and the coverage
evidenced thereby shall be primary and non-contributing with respect to any
policies carried by Landlord and that any coverage carried by Landlord
shall be excess insurance, and (iii) a waiver by the insurer of any right
of subrogation against Landlord, its agents, employees and representatives,
which arises or might arise by reason of any payment under such policy or
by reason of any act or omission of Landlord, its agents, employees or
representatives. A copy of each paid up policy (authenticated by the
insurer) or certificate of the insurer evidencing the existence and amount
of each insurance policy required hereunder shall be delivered to Landlord
before the date Tenant is first given the right of possession of the
Premises, and thereafter within thirty (30) days after any demand by
Landlord therefor. Landlord may, at any time and from time to time, inspect
and/or copy any insurance policies required to be maintained by Tenant
hereunder. No such policy shall be cancellable except after twenty (20)
days written notice to Landlord and Landlord's lender. Tenant shall furnish
Landlord with renewals or "binders" or any such policy prior to the
expiration thereof. Tenant agrees that if Tenant does not take out and
maintain such insurance, Landlord may (but shall not be required to)
procure said insurance on Tenant's behalf and charge the Tenant the
premiums, payable upon demand. Tenant shall have the right to provide such
insurance coverage pursuant to blanket policies obtained by the Tenant,
provided such blanket policies expressly afford coverage to the Premises,
Landlord, Landlord's mortgagee and Tenant as required by this Lease.
b. Beginning on the date Tenant is given full access to the Premises and
continuing until expiration of the Term, Tenant shall procure, pay for and
maintain in effect to the extent commercially obtainable policies of
casualty insurance covering (i) all Leasehold Improvements (including any
alterations, additions or improvements as may be made by Tenant pursuant to
the provisions of Article 12 hereof), and (ii) trade fixtures, merchandise
and other personal property from time to time in, on or about the Premises,
in an amount not less than one hundred percent (100%) of their actual
replacement cost from time to time with a reasonable deductible, providing
protection against any peril included with the classification "Fire and
Extended Coverage" together with insurance against sprinkler damage,
vandalism and malicious mischief. The proceeds of such insurance shall be
used for the repair or replacement of the property so insured. Upon
termination of this Lease following a casualty as set forth herein, the
proceeds under (i) shall be paid to Landlord, and the proceeds under (ii)
above shall be paid to Tenant.
c. Beginning on the date Tenant is given access to the Premises for any
purpose and continuing until expiration of the Term, Tenant shall procure,
pay for and maintain in effect workers' compensation insurance as required
by law and comprehensive public liability and property damage insurance
with respect to the construction of improvements on the Premises, the use,
operation or condition of the Premises and the operations of Tenant in, on
or about the Premises, providing personal injury and broad form property
damage coverage for not less than Two Million Dollars ($2,000,000.00)
combined single limit for bodily injury, death and property damage
liability.
d. Not less than every three (3) years during the Term, Landlord and
Tenant shall mutually agree to increases in all of Tenant's insurance
policy limits for all insurance to be carried by Tenant as set forth in
this Article. In the event Landlord and Tenant cannot mutually agree upon
the amounts of said increases, then Tenant agrees that all insurance policy
limits as set forth in this Article shall be adjusted for increases in the
cost of living in the same manner as is set forth in Section 5.2 hereof
for the adjustment of the Base Rent.
23. WAIVER OF SUBROGRATION.
Landlord and Tenant each hereby waive all rights of recovery against the
other and against the officers, employees, agents and representatives of
the other, on account of loss by or damage to the waiving party or its
property or the property of others under its control, to the extent that
such loss or damage is insured against under any fire and extended coverage
insurance policy which either may have in force at the time of the loss or
damage. Tenant shall, upon obtaining the policies of insurance required
under this Lease, give notice to its insurance carrier or carriers that the
foregoing mutual waiver of subrogation is contained in this Lease; provided
that such waiver does not result in the cancellation or commercial
unobtainability of such policies.
24. SUBORDINATION AND ATTORNMENT.
Upon written request of Landlord, or any first mortgagee or first deed of
trust beneficiary of Landlord, or ground lessor of Landlord, Tenant shall,
in writing, subordinate its rights under this Lease to the lien of any
first mortgage or first deed of trust, or to the interest of any lease in
which Landlord is lessee, and to all advances made or hereafter to be made
thereunder. However, before signing any subordination agreement, Tenant
shall have the right to obtain from any lender or lessor of Landlord
requesting such subordination, a non-disturbance agreement in writing
providing that, as long as Tenant is not in default hereunder, this Lease
shall remain in effect for the full Term. The holder of any security
interest may, upon written notice to Tenant, elect to have this Lease prior
to its security interest regardless of the time of the granting or
recording of such security interest. Prior to the Commencement Date
Landlord shall obtain from existing Lender a NonDisturbance Agreement in
favor of Tenant. In the event of any foreclosure sale, transfer in lieu of
foreclosure or termination of the lease in which Landlord is lessee, Tenant
shall attorn to the purchaser, transferee or lessor as the case may be, and
recognize that party as Landlord under this Lease, provided such party
acquires and accepts the Premises subject to this Lease.
25. TENANT ESTOPPEL CERTIFICATES.
Within ten (10) days after written request from Landlord, Tenant shall execute
and deliver to Landlord or Landlord's designee, a written statement certifying
(a) that this Lease is unmodified and in full force and effect, or is in full
force and effect as modified and stating the modifications; (b) the amount of
Base Rent and the date to which Base Rent and additional rent have been paid in
advance; (c) the amount of any security deposited with Landlord; and (d) that
Landlord to Tenant's knowledge is not in default hereunder or, if Landlord is
claimed to be in default, stating the nature of any claimed default. Any such
statement may be relied upon by a purchaser, assignee or lender. Tenant's
failure to
(10)
<PAGE>
execute and deliver such statement with thirty (30) days of Landlord's request
be a default under this Lease and shall also be conclusive upon Tenant
that: (1) this Lease is in full force and effect and has not been modified
except as represented by Landlord; (2) there are no uncured defaults in
Landlord's performance and that Tenant has no right of offset, counter-claim or
deduction against Rent; and (3) not more than one month's Rent has been paid in
advance.
26. TRANSFER OF LANDLORD'S INTEREST.
In the event of any sale or transfer by Landlord of the Premises, Building or
Project, and assignment of this Lease by Landlord, Landlord shall be and is
hereby entirely freed and relieved of any and all liability and obligations
contained in or derived from this Lease arising out of any act, occurrence or
omission relating to the Premises, Building, Project or Lease occurring after
the consummation of such sale or transfer, providing the purchaser shall
expressly assume all of the covenants and obligations of Landlord under this
Lease. If any security deposit or prepaid Rent has been paid by Tenant, Landlord
may transfer the security deposit or prepaid Rent to Landlord's successor and
upon such transfer, Landlord shall be relieved of any and all further liability
with respect thereto.
27. DEFAULT.
27.1 Tenant's Default. The occurrence of any one or more of the following events
shall constitute a default and breach of this Lease by Tenant:
a. If Tenant abandons the Premises; or
b. If Tenant fails to pay any Rent or any other charges required to be
paid by Tenant under this Lease and such failure continues for five (5)
days after written notice from Landlord that such payment is due and
payable; or
c. If Tenant fails to promptly and fully perform any other covenant,
condition or agreement contained in this Lease and such failure continues
for thirty (30) days after written notice thereof from Landlord to Tenant;
or
d. If a writ of attachment or execution is levied on this Lease or on any
of Tenant's Property; or
e. If Tenant makes a general assignment for the benefit of creditors, or
provides for an arrangement, composition, extension or adjustment with its
creditors; or
f. If Tenant files a voluntary petition for relief or if a petition
against Tenant in a proceeding under the federal bankruptcy laws or other
insolvency laws is filed and not withdrawn or dismissed within forty-five
(45) days thereafter, or if under the provisions of any law providing for
reorganization or winding up of corporations, any court of competent
jurisdiction assumes jurisdiction, custody or control of Tenant or any
substantial part of its property and such jurisdiction, custody or control
remains in force unrelinquished, unstayed or unterminated for a period of
forty-five (45) days; or
g. If in any proceeding or action in which Tenant is a party, a trustee,
receiver, agent or custodian is appointed to take charge of the Premises
or Tenant's Property (or has the authority to do so) for the purpose of
enforcing a lien against the Premises or Tenant's Property; or
h. If Tenant is a partnership or consists of more than one (1) person or
entity, if any partner of the partnership or other person or entity is
involved in any of the acts or events described in subparagraphs (d)
through (g) above.
27.2 Remedies. In the event of Tenant's default hereunder, then in addition to
any other rights or remedies Landlord may have under any law, Landlord shall
have the right, at Landlord's option, without further notice or demand of any
kind to do the following:
a. Terminate this Lease and Tenant's right to possession of the Premises
and reenter the Premises and take possession thereof, and Tenant shall
have no further claim to the Premises or under this Lease; or
b. Continue this Lease in effect, reenter and occupy the Premises for
the account of Tenant, and collect any unpaid Rent or other charges which
have or thereafter become due and payable; or
c. Reenter the Premises under the provisions of subparagraph b, and
thereafter elect to terminate this Lease and Tenant's right to possession
of the Premises.
If Landlord reenters the Premises under the provisions of subparagraphs (b) or
(c) above, Landlord shall not be deemed to have terminated this Lease or the
obligation of Tenant to pay any Rent or other charges thereafter accruing,
unless Landlord notifies Tenant in writing of Landlord's election to terminate
this Lease. In the event of any reentry or retaking of possession by Landlord,
Landlord shall have the right, but not the obligation, to remove all or any part
of Tenant's Property in the Premises and to place such property in storage at a
public warehouse at the expense and risk of Tenant. If Landlord elects to relet
the Premises for the account of Tenant, the rent received by Landlord from such
reletting shall be applied as follows: first, to the payment of any indebtedness
other than Rent due hereunder from Tenant to Landlord; second, to the payment of
any costs of such reletting; third, to the payment of the cost of any
alterations or repairs to the Premises; fourth to the payment of Rent due and
unpaid hereunder; and the balance, if any, shall be held by Landlord and applied
in payment of future Rent as it becomes due. If that portion of rent received
from the reletting which is applied against the Rent due hereunder is less than
the amount of the Rent due, Tenant shall pay the deficiency to Landlord promptly
upon demand by Landlord. Such deficiency shall be calculated and paid monthly.
Tenant shall also pay to Landlord, as soon as determined, any costs and expenses
incurred by Landlord in connection with such reletting or in making alterations
and repairs to the Premises, which are not covered by the rent received from the
reletting.
Should Landlord elect to terminate this lease under the provisions of
subparagraph (a) or (c) above, Landlord may recover as damages from Tenant the
following:
1. Past Rent. The worth at the time of the award of any unpaid Rent
which had been earned at the time of termination; plus
2. Rent Prior to Award. The worth at the time of the 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 Tenant proves could have been reasonably avoided; plus
(11)
<PAGE>
3. Rent After Award. The worth at the time of the award of the amount by
which the unpaid Rent for the balance of the Term after the time of
award exceeds the amount of the rental loss that Tenant proves could
be reasonably avoided; plus
4. Proximately Caused Damages. Any other amount necessary to compensate
Landlord for all detriment proximately caused by Tenant's failure to
perform its obligations under this Lease or which in the ordinary
course of things would be likely to result therefrom, including, but
not limited to, any costs or expenses (including attorneys' fees),
incurred by Landlord in (a) retaking possession of the Premises, (b)
maintaining the Premises after Tenant's default, (c) preparing the
Premises for reletting to a new tenant, including any repairs or
alterations, and (d) reletting the Premises, including brokers'
commissions.
"The worth at the time of the award" as used in subparagraphs 1 and 2 above, is
to be computed by allowing interest at the rate of ten percent (10%) per annum.
"The worth at the time of the award" as used in subparagraph 3 above, is to be
computed by discounting the amount at the discount rate of the Federal Reserve
Bank situated nearest to the Premises at the time of the award plus one percent
(1%).
The waiver by Landlord of any breach of any term, covenant or condition of this
Lease shall not be deemed a waiver of such term, covenant or condition or of any
subsequent breach of the same or any other term, covenant or condition.
Acceptance of Rent by Landlord subsequent to any breach hereof shall not be
deemed a waiver of any preceding breach other than the failure to pay the
particular Rent so accepted, regardless of Landlord's knowledge of any breach at
the time of such acceptance of Rent. Landlord shall not be deemed to have waived
any term, covenant or condition unless Landlord gives Tenant written notice of
such waiver.
27.3 Landlord's Default. If Landlord fails to perform any covenant, condition
or agreement contained in this Lease within fifteen (15) days after receipt of
written notice from Tenant specifying such default, or if such default cannot
reasonably be cured within fifteen (15) days, if Landlord fails to use its best
efforts to cure such default as soon as possible, then Landlord shall be liable
to Tenant for any damages sustained by Tenant as a result of Landlord's breach;
provided, however, it is expressly understood and agreed that if Tenant obtains
a money judgment against Landlord resulting from any default or other claim
arising under this Lease, that judgment shall be satisfied only out of the
rents, issues, profits, and other income actually received on account of
Landlord's right, title and interest in the Premises, Building or Project, and
no other real, personal or mixed property of Landlord (or of any of the partners
which comprise Landlord, if any) wherever situated, shall be subject to levy to
satisfy such judgment. If, after notice to Landlord of default, Landlord (or any
first mortgagee or first deed of trust beneficiary of Landlord) fails to cure
the default as provided herein, then Tenant shall have the right to cure that
default at Landlord's expense. However, Tenant shall not have the right to
withhold, reduce or offset any amount against any payments of Rent or other
charges due and payable under this Lease except for judgements or arbitration
awards against Landlord in favor of Tenant.
28. BROKERAGE FEES.
Tenant warrants and represents that it has not dealt with any real estate broker
or agent in connection with this Lease or its negotiation except Broker and
Sales Agent. Tenant shall indemnify and hold Landlord harmless from any cost,
expense or liability (including costs of suit and reasonable attorneys' fees)
for any compensation, commission or fees claimed by any other real estate broker
or agent retained by and representing Tenant in connection with this Lease or
its negotiation by reason of any act of Tenant.
29. NOTICES.
All notices, approvals and demands permitted or required to be given under this
Lease shall be in writing and deemed duly served or given if personally
delivered or sent by certified or registered U.S. mail, postage prepaid, and
addressed as follows: (a) if to Landlord, to Landlord's Mailing Address and to
the Building manager, and (b) if to Tenant, to Tenant's Mailing Address;
provided, however, notices to Tenant shall be deemed duly served or given if
delivered or mailed to Tenant at the Premises. Landlord and Tenant may from time
to time by notice to the other designate another place for receipt of future
notices.
30. GOVERNMENT ENERGY OR UTILITY CONTROLS.
In the event of imposition of mandatory federal, state or local government
controls, rules, regulations, or restrictions on the use or consumption of
energy or other utilities during the Term, both Landlord and Tenant shall be
bound thereby. In the event of a difference in interpretation by Landlord and
Tenant of any such controls, the interpretation of Landlord shall prevail, and
Landlord shall have the right to enforce compliance therewith, including the
right of entry into the Premises to effect compliance; provided that Tenant
shall have the right to contest with the regulating agency in its own name any
such controls or such Landlord's interpretations.
31. RELOCATION OF PREMISES.
(12)
<PAGE>
reduced proportionately.
a. The parties hereto shall immediately execute an amendment to this Lease
setting forth the relocation of the Premises and the reduction of Base Rent,
if any.
32. QUIET ENJOYMENT.
Tenant, subject to the Subordination Agreement/NonDisturbance Agreement exchange
with Landlord's existing Lender, and upon paying the Rent and performing all
of its obligations under this Lease, shall peaceably and quietly enjoy the
Premises, subject to the terms of this Lease.
33. OBSERVANCE OF LAW.
Tenant shall not use the Premises or permit anything to be done in or about the
Premises which will in any way conflict with any law, statute ordinance or
governmental rule or regulation now in force or which may hereafter be enacted
or promulgated.
The judgment of any court of competent jurisdiction or the admission of Tenant
in any action against Tenant, whether Landlord is a party thereto or not, that
Tenant has violated any law, statute, ordinance or governmental rule, regulation
or requirement, shall be conclusive of that fact as between Landlord and Tenant.
34. FORCE MAJEURE.
Any prevention, delay or stoppage of work to be performed by Landlord or Tenant
which is due to strikes, labor disputes, inability to obtain labor, materials,
equipment or reasonable substitutes therefor, acts of God, governmental
restrictions or regulations or controls, judicial orders, enemy or hostile
government actions, civil commotion, fire or other casualty, or other causes
beyond the control of the party obligated to perform hereunder, despite its best
efforts to perform, shall excuse performance of the work by that party for a
period equal to the duration of that prevention, delay or stoppage. Nothing in
this Article 34 shall excuse or delay Tenant's obligation to pay Rent or other
charges under this Lease.
35. CURING TENANT'S DEFAULTS.
If Tenant defaults in the performance of any of its obligations under this
Lease, Landlord may (but shall not be obligated to) without waiving such
default, perform the same for the account and at the expense of Tenant. Tenant
shall pay Landlord all costs of such performance promptly upon receipt of a bill
therefor.
36. SIGN CONTROL.
Tenant shall not affix, paint, erect or inscribe any sign, projection, awning,
signal or advertisement of any kind to any exterior part of the Premises,
Building or Project, including without limitation, the inside or outside of
windows or doors, without the written consent of Landlord. Landlord shall have
the right to remove any signs or other matter, installed without Landlord's
permission, without being liable to Tenant by reason of such removal, and to
charge the cost of removal to Tenant as additional rent hereunder, payable
within ten (10) days of written demand by Landlord.
37. MISCELLANEOUS.
a. Accord and Satisfaction; Allocation of Payments. No payment by Tenant or
receipt by Landlord of a lesser amount than the Rent provided for in this Lease
shall be deemed to be other than on account of the earliest due Rent, nor shall
any endorsement or statement on any check or letter accompanying any check or
payment as Rent be deemed an accord and satisfaction, and Landlord may accept
such check or payment without prejudice to Landlord's right to recover the
balance of the Rent or pursue any other remedy provided for in this Lease. In
connection with the foregoing, Landlord shall have the absolute right in its
sole discretion to apply any payment received from Tenant to any account or
other payment of Tenant then not current and due or delinquent.
b. Addenda. If any provision contained in an addendum to this Lease is
inconsistent with any other provision herein, the provision contained in the
addendum shall control, unless otherwise provided in the addendum.
c. Attorneys' Fees. If any action or proceeding is brought by either party
against the other pertaining to or arising out of this Lease, the finally
prevailing party shall be entitled to recover all costs and expenses, including
reasonable attorneys' fees, incurred on account of such action or proceeding.
d. Captions, Articles and Section Numbers. The captions appearing within the
body of this Lease have been inserted as a matter of convenience and for
reference only and in no way define, limit or enlarge the scope or meaning of
this Lease. All references to Article and Section numbers refer to Articles and
Sections in this Lease.
e. Changes Requested by Lender. Neither Landlord or Tenant shall unreasonably
withhold its consent to changes or amendments to this Lease requested by the
lender on Landlord's interest, so long as these changes do not alter the basic
business terms of this Lease or otherwise materially diminish any rights or
materially increase any obligations of the party from whom consent to such
change or amendment is requested.
f. Choice of Law. This Lease shall be construed and enforced in accordance with
the laws of the State.
h. Corporate Authority. If Tenant is a corporation, each individual signing
this Lease on behalf of Tenant represents
(13)
<PAGE>
and warrants that he is duly authorized to execute and deliver this Lease on
behalf of the corporation, and that this Lease is binding on Tenant in
accordance with its terms. Tenant shall, at Landlord's request, deliver a
certified copy of a resolution of its board of directors authorizing such
execution.
i. Counterparts. This Lease may be executed in multiple counterparts, all of
which shall constitute one and the same Lease.
j. Execution of Lease; No Option. The submission of this Lease to Tenant shall
be for examination purposes only, and does not and shall not constitute a
reservation of or option for Tenant to lease, or otherwise create any interest
of Tenant in the Premises or any other premises within the Building or Project.
Execution of this Lease by Tenant and its return to Landlord shall not be
binding on Landlord notwithstanding any time interval, pending Landlord's
Lender's approval of this Lease and Landlord's execution and delivery of this
Lease to Tenant.
k. Furnishing of Financial Statements; Tenant's Representations. Tenant agrees
that it shall promptly furnish Landlord, for Landlord's and Landlord's lender's
use only upon Landlord's written request but not more than twice yearly with
financial statements reflecting Tenant's current financial condition. Tenant
represents and warrants that all financial statements, records and information
furnished by Tenant to Landlord in connection with this Lease are true, correct
and complete in all respects. Landlord agrees to provide written confidentiality
acknowledgements as may be priorly and reasonably requested by Tenant.
l. Further Assurances. The parties agree to promptly sign all documents
reasonably requested to give effect to the provisions of this Lease.
m. Mortgagee Protection. Tenant agrees to send by certified or registered mail
to any first mortgagee or first deed of trust beneficiary of Landlord whose
address has been furnished to Tenant, a copy of any notice of default served by
Tenant on Landlord. If Landlord fails to cure such default within the time
provided for in this Lease, such mortgagee or beneficiary shall have an
additional thirty (30) days to cure such default; provided that if such default
cannot reasonably be cured within that thirty (30) day period, then such
mortgagee or beneficiary shall have such additional time to cure the default as
is reasonably necessary under the circumstances.
n. Prior Agreements; Amendments. This Lease contains all of the agreements of
the parties with respect to any matter covered or mentioned in this Lease, and
no prior agreement or understanding pertaining to any such matter shall be
effective for any purpose. No provisions of this Lease may be amended or added
to except by an agreement in writing signed by the parties or their respective
successors in interest.
o. Recording. Tenant shall not record this Lease without the prior written
consent of Landlord. Tenant, upon the request of Landlord, shall execute and
acknowledge a "short form" memorandum of this Lease for recording purposes.
p. Severability. A final determination by a court of competent jurisdiction
that any provision of this Lease is invalid shall not affect the validity of any
other provision, and any provision so determined to be invalid shall, to the
extent possible, be construed to accomplish its intended effect.
q. Successors and Assigns. This Lease shall apply to and bind the heirs,
personal representatives, and permitted successors and assigns of the parties.
r. Time of the Essence. Time is of the essence of this Lease.
s. Waiver. No delay or omission in the exercise of any right or remedy of
Landlord upon any default by Tenant shall impair such right or remedy or be
construed as a waiver of such default.
The receipt and acceptance by Landlord of delinquent Rent shall not constitute a
waiver of any other default; it shall constitute only a waiver of timely payment
for the particular Rent payment involved.
No act or conduct of Landlord, including, without limitation, the acceptance of
keys to the Premises, shall constitute an acceptance of the surrender of the
Premises by Tenant before the expiration of the Term.
Landlord's consent to or approval of any act by Tenant requiring Landlord's
consent or approval shall not be deemed to waive or render unnecessary
Landlord's consent to or approval of any subsequent act by Tenant.
Any waiver by Landlord of any default must be in writing and shall not be a
waiver of any other default concerning the same or any other provision of the
Lease.
The parties hereto have executed this Lease as of the date set forth on page 1.
Sycamore/San Diego Investors Recombinant BioCatalysis, Inc.
an Illinois Limited Partnership a Delaware Corporation
________________________________________ ________________________________
By: Shell Properties Corporation, Agent
________________________________________ ________________________________
/s/ Jeffrey P. Server /s/ Terrance J. Bruggeman
---------------------------------------- --------------------------------
By: Jeffrey P. Server, President By: Terrance J. Bruggeman, CEO
Date: October 28, 1996 Date: October 23, 1996
________________________________________ ________________________________
Landlord Tenant
--------------------------------------------------------------------------------
SEE YOUR ATTORNEY
----------------
This lease should be given to your attorney for review before you sign it.
Landlord and Landlord's agent make no representation or recommendation
concerning the tax or legal effects or the legal sufficiency of this lease.
These are questions for legal counsel.
--------------------------------------------------------------------------------
(14)
<PAGE>
FIRST ADDENDUM TO LEASE BY AND BETWEEN
SYCAMORE/SAN DIEGO INVESTORS AS LANDLORD
AND RECOMBINANT BIOCATALYSIS, INC. AS
TENANT DATED SEPTEMBER 24, 1996.
1. DELIVERY OF POSSESSION.
----------------------
The Premises shall be deemed to be suitable for possession and delivery to
Tenant on the date Landlord completes Landlord's portion of any
improvements to the Premises. If, through no fault of Tenant, Landlord
shall not have completed its portion of such improvements as of the
Commencement Date set forth in Article 2(d), the validity of this Lease
shall not be impaired, but the Commencement Date of the Lease and Tenant's
obligation to pay rent or other sums thereunder shall be delayed until
possession of the Premises is delivered to Tenant and Tenant shall receive
an additional rental credit equal to one day of rent for each day that the
date the Premises have been completed by Landlord is more than 15 days
subsequent to the stated Commencement Date. However, if Landlord does not
deliver possession of the Premises to Tenant within 30 Days after the
stated Commencement Date, Tenant may elect to cancel this Lease by giving
written notice to Landlord at any time thereafter. If Tenant gives such
notice to Landlord, this Lease shall be terminated and any refundable
deposit shall be returned to Tenant. If Tenant does not give such notice to
Landlord, then the Lease Term shall commence on the date that the Premises
have been completed by Landlord. If delivery of possession of the Premises
to Tenant shall occur other than upon the stated Commencement Date, then
the date the Premises are completed by the Landlord shall become the
Commencement Date of this Lease and Landlord and Tenant shall within ten
(10) days of such date execute a Lease amendment to amend said Article 2(d)
accordingly.
If, owing to work change orders requested by Tenant or Tenant caused work
delays or extensions, Landlord does not deliver possession of the Premises
to Tenant on the stated Commencement Date, then the stated Commencement
Date (but not Tenant's obligation to pay rent or other sums due) shall be
advanced by the same number of days, if any, that such work change orders
or Tenant delays delayed Landlord's delivery of possession of the Premises
to Tenant.
2. Article 5 Paragraph 2 ADJUSTED BASE RENT
----------------------------------------
The amount of Base Rent Per Year set forth in Article 2(a) hereof (and the
corresponding Monthly Installments of Base Rent set forth in Article 2(j)
hereof) shall be adjusted as of each anniversary date of this Lease,
commencing with Tenant's First Adjustment Date set forth in Article 2(q)
hereof, at the fixed rate of 3% per annum. If the Commencement Date is
other than the first day of a calendar month, then the first such
adjustment shall occur twelve (12) months after the first day of the
calendar month next succeeding the Commencement Date.
<PAGE>
3. EXPANSION PREMISES
------------------
Not later than the first anniversary date of the lease term, or earlier
with Tenant's acceptance, Landlord shall deliver to Tenant for
incorporation within the Premises that portion of the first floor of the
Building containing approximately 850 square feet of rentable area
currently known as Suite 101 and as shown on Exhibit "A" hereto. Tenant's
occupancy of said expansion premises shall be subject to all of the same
prevailing lease terms and conditions including base rent at the same
prevailing per square foot rate for the initial Premises and Tenant
Improvements.
4. TENANT IMPROVEMENTS
-------------------
As of the commencement dates for the Premises and Expansion Premises
Landlord, at Landlord's sole cost and expense, shall have improved each
according to the plans and specifications set forth in Exhibit "C" hereto.
5. LIMIT ON PROJECT OPERATING COST PASS-THRUS
------------------------------------------
For the purposes of Article 5.3, (i) for any period during the term in
which the Project is not fully occupied, Landlord may adjust the "occupancy
costs" component of Project Operating Costs (i.e. those costs of
operations which vary directly with the occupancy level of the Project
including, but not limited to, janitorial expenses) to reasonably
approximate the occupancy costs which would have been incurred had the
Project been fully occupied, and (ii) in no event shall Project Operating
Costs be increased by more than Six (6%) Percent in any year after Tenant's
Base Year.
6. TENANT'S SIGNAGE RIGHT
----------------------
Tenant shall have the entirety of the signage entitlement relative to
Building 2 at 10665 Sorrento Valley Road. Prior to the installation of
Tenant's signage, Tenant shall submit to Landlord for Landlord's review and
approval, not unreasonably withheld or delayed, plans and specifications
for such signage to include dimensions, materials, coloration, means and
method of installation and, if required under the Sign Ordinance of the
City of San Diego, copy of a completed sign permit application. After
acquiring Landlord's approval and any required permit, Tenant shall, at
Tenant's sole cost and expense, construct and install said signage in
accordance with the permit and the plans and specifications approved by
Landlord. Tenant shall care for, maintain and promptly repair when damaged
said signage. Prior to the expiration of the Lease Term, Tenant shall, At
Tenant's sole cost and expense, remove said signage and repair any damage
to the signage area or to the Building occasioned by the installation, use
and removal of said signage.
7. OPTION TO EXTEND LEASE EXPIRATION DATE
--------------------------------------
Tenant shall have the option (provided that Tenant shall not at the time of
exercisement of the option or at any subsequent time through the
commencement date of the option term be in default hereunder) to extend the
Lease Expiration Date (Article 2(g) and Article 4) by a term of sixty (60)
months. Tenant's occupancy during the extended term shall be subject to all
of the same prevailing lease terms and conditions except initial Annual
Base Rent (Article 2(a)) and Monthly Installments of Base Rent (Article 2
(j)) which shall be at the lesser of (i) 95% of the then prevailing market
rate for such premises assuming the further improvements to the Premises
set forth herein below and (ii) the original initial Annual Base Rent and
Monthly Installment of Base Rent as adjusted pursuant to Article 2
hereinabove through to the commencement date of the extended term. Tenant
shall exercise said option with written notice to Landlord not later than
180 days prior to the Expiration Date. In consideration of such extended
term, and reasonably upon its commencement, Landlord shall recarpet and
repaint those carpeted and painted areas of the Premises.
<PAGE>
8. RIGHT OF FIRST REFUSAL.
----------------------
Throughout the term of this lease, but provided that Tenant shall not at
the time be in default, Tenant shall have the right of first refusal to
lease any available space within the Building or Project under the same
terms and conditions acceptable to Landlord from a third party offeror.
Landlord shall provide Tenant with written notice and copies of all such
acceptable third party offers, and Tenant shall have five (5) business days
following Tenant's receipt of each within which to notify Landlord of its
election to lease the subject space under the same terms and conditions of
the acceptable third party offer. If Tenant so elects, Landlord shall
promptly prepare and Tenant and Landlord shall promptly execute a lease for
the subject space containing the same terms and conditions of the
acceptable third party offer.
9. INDEMNIFICATION
---------------
The Landlord warrants that the Premises, including parking lots, walkways,
entrances, hallways, restrooms, elevators and other public spaces serving
the Premises shall conform to all enforced requirements of the Americans
with Disabilities Act and all regulations issued by the U.S. Attorney
General or other authorized agencies under the authorization of the
Americans with Disabilities Act. The Landlord promises to reimburse and
indemnify and defend the Tenant for any expenses incurred because of the
failure of the leased premises and adjacently owned property to conform
with the above cited law and regulations, including the costs of making any
alterations, renovations, or accommodations required by the Americans with
Disabilities Act, or any governmental enforcement agency, or any court, any
and all fines civil penalties, and damages awarded against the Tenant
resulting from a violation or violations of the above cited law and
regulations by Landlord, to include all reasonable legal expenses incurred
in defending claims made under the above cited law and regulations.
10. HAZARDOUS MATERIALS
-------------------
Landlord represents and warrants to Tenant that, except for conditions
caused by Tenant, Landlord, at Landlord's sole cost and expense, will cause
Tenant's Premises, the Building and parking facilities to be in full
compliance with any governmental laws, ordinances, regulations or orders
relating to environmental conditions on, under or about Tenant's Premises,
the Building or parking facilities ("Regulations"), including, but not
limited to, asbestos, soil and ground water conditions and Hazardous
Materials (defined below), and Landlord shall defend, indemnify and hold
Tenant harmless from and against any and all losses, costs (including
reasonable attorneys' fees), liabilities and claims arising from the
violating of any of the Regulations that may affect Tenant's Premises, the
Building or parking facilities and shall assume full responsibility and
cost to remedy such violations, provided that the violations are not caused
by Tenant. Hazardous Materials shall include, but shall not be limited to,
substances defined as "hazardous substances" or "toxic substances" in the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, 42 U.S.C.A. Section 1802; the Resources Conservation
Recovery Act, 42 U.S.C.A. Section 6901, et.seq; or those substances
defined as "hazardous wastes" in applicable codes in the State of
California and in the regulations adopted and publications promulgated to
such codes. Tenant shall have
<PAGE>
absolute responsibility to cause, and shall cause all such materials and
substances which are transported to or from, used, stored or handled at, or
disposed of at or from the Premises during the term of this Lease
Agreement, to be so transported, used, stored, handled and disposed of in
compliance with all Regulations. The covenant's contained in this paragraph
shall expressly survive the expiration or earlier termination of this Lease
pending Landlord's receipt of Tenant's Exit Assessment and Tenant's
performance of remedial measures, if any, recommended therein. Further,
Tenant shall indemnify and hold Landlord and the Premises harmless from any
claim, liability, damages, costs and expenses, including attorney fees,
arising out of or related to any Tenant's breach of the covenants of this
Article.
11. TENANT'S EXIT ASSESSMENT & DECOMMISSIONING
------------------------------------------
Promptly upon vacating the Premises, Tenant agrees to perform an Exit
Assessment of the premises and to provide Landlord with written report of
same. Said report shall set forth (1) the results of an initial inspection
for hazardous chemical, biological and radioactive agents and/or materials
resulting from Tenant's operations ("Tenant Waste"); (2) recommended
decommissioning procedures and actions for the Tenant Waste; (3)
documentation of the completion of said procedures and actions; and (4) the
results of a final inspection following the performance of said procedures
and actions. Said Exit Assessment shall be performed by such specialist as
may be recommended by Tenant and found reasonably acceptable to Landlord.
The cost of said Exit Assessment Report and the cost of any remedial
procedures and actions shall be borne by Tenant, and such assessment and
remedial activities shall be subject to the provision of Article 11(b)(3).
Notwithstanding anything to the contrary within this Lease, Tenant's
Possession of the Premises and obligation to pay Rent shall continue until
Landlord's receipt of said Exit Assessment Report.
12. ARBITRATION OF DISPUTES.
-----------------------
All claims and controversies arising under this Lease shall, at the option
of either party, be subject to arbitration in San Diego, California
pursuant to the commercial arbitration rules of the American Arbitration
Association. Each party shall pay for its own costs of any arbitration, and
the cost of the arbitrator(s) shall be shared equally by the parties unless
awarded as part of the arbitration award. All arbitration awards shall be
final and may be entered in any court of competent jurisdiction.
Notwithstanding the foregoing, any action for specific performance or
injunctive relief may be commenced and maintained in any court of competent
jurisdiction.
13. LIMITATION ON LANDLORD'S LIABILITY.
----------------------------------
Notwithstanding anything contained in this Lease to the contrary, the
obligations of Landlord under this Lease (including any actual or alleged
breach or default by Landlord) do not constitute personal obligations of
the individual partners, directors, officers or shareholders of Landlord or
Landlord's partners, and Tenant shall not seek recourse against the
individual partners, directors, officers or shareholders of Landlord or
Landlord's partners, or any of their personal assets for satisfaction of
any liability with respect to this Lease other than their interest in and
to the Project. In addition, in consideration of the benefits accruing
hereunder to Tenant and notwithstanding anything contained in this Lease to
the contrary, Tenant hereby covenants and agrees for itself and all of its
successors and assigns that the liability of Landlord for its obligations
under this Lease (including any liability as a result of any actual or
alleged failure, breach or default hereunder by Landlord), shall be limited
solely to (and Tenant's and its successors' and assigns' sole and exclusive
remedy shall be against) Landlord's interest in the project and proceeds
therefrom, and as to no other assets of Landlord.
<PAGE>
14. Additional Security Deposit. In addition to the Security Deposit
---------------------------
established in Article 2(o) of the Lease, Tenant agrees to deliver to
Landlord, on or prior to the Commencement Date, a letter of credit issued
by any National or State Chartered Bank for the benefit of Landlord
("Letter of Credit"). The Letter of Credit shall serve as additional
Security Deposit subject to the terms of Article 7 of the Lease and may be
drawn upon by the Landlord, prior to its expiration, in the event of
application of the Security Deposit by Landlord to the extent that the
original Security Deposit is not sufficient to pay such costs, all as
provided in Article 7. The Letter of Credit shall have a term of two years
commencing on the Commencement Date, and be in the face amount of $150,000,
automatically reducing by its terms by $10,000 per calendar month in which
Tenant paid all it's rent under this lease; provided that the Letter of
Credit shall automatically terminate in the event that Tenant becomes a
public company as defined in the Securities Act of 1934.
<PAGE>
EXHIBIT "A"
----------
Floor Plan Showing Premises & Ste 101
-------------------------------------
[FIRST AND SECOND FLOOR PLAN APPEARS HERE]
<PAGE>
EXHIBIT "B"
Site Plan
-------------
SYCAMORE CREEK OFFICE R&D PARK
10655 10665 10675 Sorrento Valley Road.
San Diego, CA
I 805
[SITE PLAN]
SORRENTO VALLEY ROAD
<PAGE>
EXHIBIT "C"
TENANT IMPROVEMENTS - PLANS AND SPECIFICATIONS
BUILDING STANDARD WORK.
Landlord shall furnish, at its sole cost and expense, the Building Standard Work
depicted and described herein, including all architectural, mechanical and
electrical plans required for the performance of such work.
Landlord's Building Standard Work shall be installed in Tenant's Premises or
within the Building prior to the commencement of the Term of the Lease. Certain
materials and or items of Building Standard Work may already be in place in the
premises or in the building before the commencement of construction, and are a
part of the Building Standard Work.
(a) Demising/Fire Separation Walls 3-1/2" steel studs from floor to structure
------------------------------
above with 5/8" drywall each side, texture finish.
(b) Interior Walls 3-1/2" steel studs with 1/2" drywall each side to ceiling,
--------------
light texture finish/washable surface.
(c) Ceilings 2'0" x 4'0" white suspended t-bar grid with 3/4" Armstrong Class
--------
(A) fissured tiles at 9'0" above finished floor. Vinyl coated at labs.
(d) Flooring 30 oz. Anso IV nylon carpet, loop or cut pile, glue direct; or
--------
Armstrong Standard "Excelon" vinyl composition floor tile; either with Mercer 4"
Rubberlyte top set base. Epoxy flooring in glass-wash room, sheet vinyl in Haz
Mat room.
(e) Paint Frazee "Velvin" flat or semi gloss acrylic vinyl wall paint; Frazee
-----
"Aeroplate" lacquer door and frame paint.
(f) Window Coverings Levolor or equivalent 3" white PVC vertical miniblinds.
----------------
(g) Heating and Air Conditioning Roof top Carrier package heat pump units, to
----------------------------
include make-up air as required for up to 4 (8') fume hoods.
(h) Lighting Fixtures 2'0" x 4'0" recessed fluorescent light fixtures,
-----------------
3-lamp, energy saving ballasts, acrylic prismatic lenses.
(i) Doors and Frames 3'0" x 8'10" solid core birch veneer, black lacquer
----------------
finish with Schlage mortise or equivalent lockset in pre-fit Timely metal frame
in office areas; 3'0" x 6'8" solid core birch veneer, black lacquer finish with
Schlage lockset assembly in pre-fit Timely metal frame in lab areas. NOTE: one
door to each lab to be 4'0" x 6'8" to accommodate equipment movement.
(j) Interior Glass 3/8" tempered in pre-fit steel Timely frames.
--------------
(k) Cabinetry Clear finished, birch veneer with acid resistant, self-edged
---------
formica tops in labs; Mills Pride "Bianco" line with coved formica tops at
coffee bar and employee lounge; wood grain laminate on MDF core in library;
Edsal or equivalent heavy guage (725pps) steel shelving in mail/receiving room.
Lab bench shelving to be minimum 2 adjustable shelves per.
(l) Safety Equipment As required, Dicon or equivalent electronic smoke
----------------
detectors, Kidde or equivalent fire extinguishers, Bradley 2P332 combination
emergency drench showers and eyewashes.
1 of 4
<PAGE>
Exhibit "C"
Tenant Improvements - Plans and Specifications
Page 2
(m) Equipment Package 50 KVA Olympian diesel fired generator with 5 KVA Deltec
-----------------
UPS; Fulton 10hp, 80 psig steam generator; 500 gpd RO/DI high purity water
system with 16.7 megohms or higher resistivity; duplex 1-1/2 hp vacuum, 22 acfm
at 24", 120 gal. tank; duplex 1-1/2 hp air compressor, 5 acfm at 100 psig, 120
gal.; Schlage SE902 card access control and alarm monitoring system.
Tenant may select upgraded finish materials/treatments to include ceilings,
lighting, floor coverings, painting and/or wall coverings, cabinetry and
millwork in place of Building Standard Work materials set forth hereinabove,
provided that notice of such selections are furnished to Landlord in time for
inclusion within the final construction permit drawings and provided the cost of
such selections shall not exceed the Landlord's Building Standard Work by an
amount greater than $20,000.00.
Subject to the reasonable approval of Landlord, Tenant may require work
different from or in addition to the Landlord's Building Standard Work and/or in
excess of the above upgrade allowance. In such event, modifications or additions
to the final construction permit drawings shall be prepared by Landlord's
architect and engineers but at Tenant's sole cost and expense. Tenant shall pay
such cost and expense promptly upon being billed therefor.
2 of 4
<PAGE>
Exhibit "C"
Tenant Improvements - Plans and Specifications
Page 3
[FIRST FLOOR PLAN APPEARS HERE]
3 of 4
<PAGE>
Exhibit "C"
Tenant Improvements - Plans and Specifications
Page 4
[SECOND FLOOR PLAN APPEARS HERE]
4 of 4
<PAGE>
TABLE OF CONTENTS
MULTI-TENANT OFFICE R & D BUILDING LEASE - MODIFIED GROSS
<TABLE>
<CAPTION>
LANDLORD: Sycamore/San Diego Investors
TENANT : Recombinant BioCatalysis, Inc.
PREMISES: 10665 Sorrento Valley Rd., SD, CA 24, 900SF
TERM : 60 Mos 2/97 - 1/02 PAGE
<S> <C>
Article 1 LEASE OF PREMISES............................................. 1
Article 2 DEFINITIONS................................................... 1
Article 3 EXHIBITS AND ADDENDA.......................................... 2
Article 4 DELIVERY OF POSSESSION........................................ 2
Article 5 RENT.......................................................... 2
Article 6 INTEREST AND LATE CHARGES..................................... 4
Article 7 SECURITY DEPOSIT.............................................. 4
Article 8 TENANT'S USE OF THE PREMISES.................................. 5
Article 9 SERVICES AND UTILITIES........................................ 5
Article 10 CONDITION OF THE PREMISES..................................... 6
Article 11 CONSTRUCTION, REPAIRS AND MAINTENANCE......................... 6
Article 12 ALTERATIONS AND ADDITIONS..................................... 6
Article 13 LEASEHOLD IMPROVEMENTS; TENANT'S PROPERTY..................... 7
Article 14 RULES AND REGULATIONS......................................... 7
Article 15 CERTAIN RIGHTS RESERVED BY LANDLORD........................... 7
Article 16 ASSIGNMENT AND SUBLETTING..................................... 7
Article 17 HOLDING OVER.................................................. 8
Article 18 SURRENDER OF PREMISES......................................... 8
Article 19 DESTRUCTION OR DAMAGE......................................... 8
Article 20 EMINENT DOMAIN................................................ 9
Article 21 INDEMNIFICATION............................................... 9
Article 22 TENANT'S INSURANCE............................................ 10
Article 23 WAIVER OF SUBROGATION......................................... 10
Article 24 SUBORDINATION AND ATTORNMENT.................................. 10
Article 25 TENANT ESTOPPEL CERTIFICATES.................................. 10
Article 26 TRANSFER OF LANDLORD'S INTEREST............................... 11
Article 27 DEFAULT....................................................... 11
Article 28 BROKERAGE FEES................................................ 12
Article 29 NOTICES....................................................... 12
Article 30 GOVERNMENT ENERGY OR UTILITY CONTROLS......................... 12
Article 31 RELOCATION OF PREMISES........................................ 12
Article 32 QUIET ENJOYMENT............................................... 13
Article 33 OBSERVATION OF LAW............................................ 13
Article 34 FORCE MAJEURE................................................. 13
Article 35 CURING TENANT'S DEFAULTS...................................... 13
Article 36 SIGN CONTROL.................................................. 13
Article 37 MISCELLANEOUS................................................. 13
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Addendum 1. Delivery of Possession; 2. Adjusted Base Rent; 3. Expansion
Premises; 4. Tenant Improvements; 5. Limit on Operating Cost Pass-
Thrus; 6. Tenant's Signage Rights; 7. Option To Exten Term; 8. First
Right of Refusal; 9. Indemnification; 10. Hazardous Materials; 11.
Tenant's Exit Assessment; 12. Arbitration; 13. Limit on Landlord's
Liability; 14. Additional Security Deposit