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EXHIBIT 10.9
STANDARD FORM LEASE 7/22/92
1255-1275 HARBOR BAY PARKWAY
HARBOR BAY BUSINESS PARK
ALAMEDA, CALIFORNIA
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TABLE OF CONTENTS
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1. SUMMARY LEASE TERMS AND PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. PREMISES AND COMMON AREA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Landlord's Reserved Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.3 Common Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.4 Common Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3. TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.1 Commencement Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.2 Delivery of Possession . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.3 Early Entry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4. RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.1 Base Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.2 Additional Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5. LATE PAYMENT CHARGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6. SECURITY DEPOSIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
7. REAL PROPERTY TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
7.1 Real Property Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
7.2 Taxes on Alterations and Personal Property . . . . . . . . . . . . . . . . . . . 12
7.3 Proration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
8. INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
8.1 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
8.2 Tenant's Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
8.3 All-Risk Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
8.4 Co-Insurer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
8.5 Insurance Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
8.6 Landlord's Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
8.7 Waiver of Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
9. UTILITIES AND SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
10. REPAIRS AND MAINTENANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
10.1 Building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
10.2 Common Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
10.3 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
11. CONDITION OF PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
12. USE OF PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
12.1 Tenant's Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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12.2 Rules And Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
12.3 Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
12.4 Hazardous Material . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
13. ALTERATIONS AND LIENS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
13.1 Alterations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
13.2 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
14. LANDLORD'S RIGHT TO ENTER THE PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . 23
15. SIGNS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
16. DAMAGE OR DESTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
16.1 Partial Damage - Insured . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
16.2 Partial Damage - Uninsured . . . . . . . . . . . . . . . . . . . . . . . . . . 25
16.3 Total Destruction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
16.4 Landlord's Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
16.5 Damage Near End of Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
17. CONDEMNATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
18. ASSIGNMENT AND SUBLETTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
18.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
18.2 Landlord's Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
18.3 Information to be Furnished . . . . . . . . . . . . . . . . . . . . . . . . . . 28
18.4 Landlord's Alternatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
18.5 Required Sublease Provisions . . . . . . . . . . . . . . . . . . . . . . . . . 29
18.6 Fees for Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
18.7 Proration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
18.8 Executed Counterpart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
18.9 Exempt Sublets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
19. DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
19.1 Tenant's Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
19.2 Landlord's Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
19.3 Tenant's Remedy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
19.4 Mortgagee Protection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
20. SUBORDINATION, ESTOPPEL AND ATTORNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . 34
20.1 Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
20.2 Estoppel Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
20.3 Attornment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
21. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
22. SURRENDER OF THE PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
23. COST OF SUIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
24. TRANSFER OF THE BUILDING BY LANDLORD . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
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25. AIRPORT NOISE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
26. GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
26.1 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
26.2 Executed Copy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
26.3 Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
26.4 Separability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
26.5 Choice of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
26.6 Gender; Singular, Plural . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
26.7 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
26.8 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
26.9 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
26.10 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
26.11 Recording . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
26.12 Force Majeure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
26.13 Holding Over . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
26.14 Quiet Enjoyment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
27. ACCEPTANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
28. LANDLORD'S CONDITION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
29. BROKERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
30. EXHIBITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
31. APPROVALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
32. REASONABLE EXPENDITURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
33. TITLE INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
EXHIBIT A
EXHIBIT B
EXHIBIT C
EXHIBIT D
EXHIBIT E
EXHIBIT F
EXHIBIT G
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"A" PREMISES AND BUILDING PLAN
"B" WORK LETTER AGREEMENT
"C" COMMENCEMENT DATE MEMORANDUM
"D" RULES AND REGULATIONS
"E" TENANT SIGN DESIGN GUIDELINES
"F" LIST OF MATERIALS
"G" DISBURSEMENT AGREEMENT
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STANDARD FORM LEASE
1255-1275 HARBOR BAY PARKWAY
HARBOR BAY BUSINESS PARK
This "Lease" is entered into by and between COMMERCIAL CENTER BANK, a
California corporation, ("Landlord") and URNOTECH CALYPTE BIOMEDICAL
CORPORATION, a California Corporation ("Tenant").
1. SUMMARY LEASE TERMS AND PROVISIONS.
The following Summary Lease Provisions constitute an integral part of
this Lease, and each reference herein to the Summary Lease Provisions shall
mean the provisions set forth in this Section 1.0. In the event of any conflict
between the Summary Lease Provisions and the remainder of the Lease, the latter
shall control.
LEASE REFERENCE
1.1 Lease Date: September 30, 1992
Section 2.1 1.2 Premises:
Premises Rentable Square Feet: 20,311
Premises Usable Square Feet: 20,311
Section 2.1 1.3 BUILDING: Building B, 1265 Harbor Bay Parkway
Building Rentable Square Feet: 22,250
Building Usable Square Feet: 22,250
Section 2.3 1.4 PROJECT: Technology Center at Harbor Bay
Project Rentable Square Feet: 69,875
Project Usable Square Feet: 69,875
Section 4.2.1 1.5 Tenant's Building Percentage: 91.29
Section 4.2.1 1.6 Tenant's Project Percentage: 29.07
Section 3 1.7 Lease Term: 5 years.
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Section 3.1 1.8 Anticipated Commencement Date: November 15, 1993
Section 4.1 1.9 Monthly Base Rent: Month of Term Monthly Rent
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Months 1-4 $0.204/square foot
Months 5-24 $1.380/square foot
Months 25-60 $1.484/square foot
Section 1.10 DELETED
Section 1.11 DELETED
Section 1.12 DELETED
Section 4.2.2 1.13 Base Year: 1994
The Base Year shall be 1995 if the Commencement Date, as
defined in Paragraph 3.1 of the Lease, is on or after July 1, 1994.
Section 6 1.14 Security Deposit: $50,000
In lieu of a cash security deposit, Tenant may furnish to Landlord
an irrevocable letter of credit in the amount specified in this
Section 1.14, in form and substance reasonably acceptable to Landlord.
Section 12.1 1.15 Permitted Uses:
Administration and Marketing; Biomedical Research and Development;
Research Laboratories; the production and manufacturing of reagents; the
production and assembly of scientific instruments and equipment.
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Section 21 1.16 Notices:
To Landlord:
Commercial Center Bank
2900 South Harbor Blvd.
Santa Ana, CA 92704
Commercial Real Estate Group
Attn: Mr. Don Bruner
To Tenant: Calypte Biomedical Corporation
1440 Fourth Street
Berkeley, CA 94710
ATTN: David J. Robison
President and Chief
Executive Officer
Section 29 1.17 Broker(s): CB Commercial
155 Grand Avenue
Suite 100
Oakland, CA 94612
ATTN: Scott Newman
Vice President
Jim McPhee and Dan Harvey
Cushman & Wakefield
One Kaiser Plaza
Suite 250
Oakland, CA 94612
1.18 Broker's Fee or Commission,
if any, paid by: Landlord
1.19 Riders to Lease: First Addendum to Lease
2. PREMISES AND COMMON AREA.
2.1 Premises. The approximate location of premises leased
hereunder ("Premises") is shown on the drawing attached hereto as Exhibit A.
The Premises consist of the approximate rentable square footage as specified in
Section 1.2 in "Building" described in Section 1.3. As used in this Lease, the
term "rentable" or "rentable square footage" means the entire area of the
Premises, including any utility and public areas, measured from the exterior of
exterior walls, and from the center line of interior demising walls.
2.2 Landlord'S Reserved Rights. Landlord reserves the right
to: (1) Use the roof, exterior walls and the area beneath and above the
Premises, together with the right to install, use,
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maintain and replace equipment, machinery, pipes, conduits and wiring through
the Premises, which serve other parts of the Project, in a manner and in
locations which do not unreasonably interfere with Tenant's use of the
Premises; (2) Alter, replace or change the appearance of the Building interior
and exterior and any portion of the Common Area or Project and to make such
other use of or changes to Common Area and Project as Landlord reasonably deems
appropriate; and (3) Grant easements on the Project and dedicate for public use
portions of the Project without Tenant's consent; provided that no such grant
or dedication shall substantially interfere with Tenant's use of the Premises.
Upon Landlord's demand, Tenant shall execute, acknowledge and deliver to
Landlord documents, instruments, maps and plats necessary to effectuate
Tenant's covenants hereunder.
2.3 Common Area. The Premises are (or when constructed will
be) a part of a business/commercial complex consisting of other buildings,
landscaping, parking facilities and other improvements described as the
"Project" in Section 1.4 hereof. Landlord may in its sole discretion change
the size, shape, location, number and extent of any or all of the improvements
in the Project without any liability to or consent of Tenant. Tenant does not
rely on the fact nor does Landlord represent that any specific tenant or number
of tenants shall occupy any space in the Project. Tenant shall have the
non-exclusive right to use in common with other tenants in the Project the
areas appurtenant to the Premises ("Common Area"), described as all areas and
facilities within the Project, exclusive of the interior of the Building and
any other buildings on the Project, now or hereafter designated by Landlord for
the general use and convenience of Tenant and other tenants of the Project,
including without limitation the parking areas, access and perimeter roads,
sidewalks, landscaped areas, service areas, trash disposal facilities, and
similar areas and facilities.
2.3.1 Parking. Tenant shall have the right to park
on the Project's parking facilities in common with other tenants of the Project
upon terms and conditions, including imposition by any governmental agency of
parking charges, as may from time to time be established. The planned parking
ratio available for all tenants in the Project is 3.3 parking spaces per one
thousand rentable square feet of space leased. Tenant agrees not to overburden
the parking facilities and agrees to cooperate with Landlord and other tenants
in the use of the parking facilities. Landlord reserves the right in its
discretion to determine whether the parking facilities are becoming crowded and
to allocate and assign parking spaces among Tenant and the other tenants. The
use of said parking area shall be at the sole risk of Tenant. Unless caused by
the wrongful act of Landlord, its agents or employees, Tenant hereby agrees to
indemnify and hold Landlord harmless against any liability, loss, cost or
expense for any damage to or loss or theft of any vehicle or property within
any
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vehicle or any other property, or injury to or death of any person, arising
directly or indirectly out of or in connection with the use by Tenant or such
other persons associated with or under Tenant's control, of the parking area or
any part thereof.
2.4 Common Services. The Harbor Bay Business Park
Association ("Association") is a California Non-Profit Corporation owned and
supported by the owners within the Harbor Bay Business Park ("Business Park").
Among this Association's activities are the following services:
2.4.1 Employment Resources Development Program. The
Association operates an Employment Resources Development Program with the
following functions:
(a) To assist Business Park tenants and owners in meeting their
employment needs by increasing the consideration of underemployed and
unemployed residents of the region, including members of minority groups.
(b) To assist Business Park employers in utilizing the resources
of employment referral and training agencies in the region (both private
agencies and publicly funded agencies).
(c) To provide a jobs clearinghouse within the Business Park.
(d) To assist Business Park tenants and owners in locating and
training qualified persons to meet their employment needs. This includes
pre-screening all responding applicants to ensure that each person passing the
screening meets the minimum job requirements set by the employer.
(e) To coordinate the assembly of general statistical information
about the number of employees working in the Business Park in response to
reporting requirements from Federal, State and Municipal agencies.
2.4.2 Transportation Systems Management (TSM). The
Association employs a Transportation System Coordinator ("Coordinator") whose
function is to assist Business Park tenants to arrange convenient and effective
transportation for their employees to and from the Business Park. Tenant
shall have a nonexclusive right to use the Coordinator as a resource to arrange
car pools, van pools, and special bus routes as well as to obtain directions
for the use of public transit BY individual employees.
There is no assurance whether or not any of these programs will
continue. The continuation of any such program is not a condition or
covenant of this Lease. Tenant acknowledges that any of these programs
may be modified or suspended without consequence to the obligations of the
parties under this Lease.
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3. TERM.
The "Term" of this Lease shall be for the period set forth in Section
1.7, (plus the partial month, if any, immediately following the Commencement
Date of the Term), and ending on the expiration of such period, unless the Term
is sooner terminated as hereinafter provided.
3.1 Commencement Date. The Commencement Date" shall be the
date of Substantial Completion as defined in Paragraph 2E of Exhibit B, Work
Letter, attached hereto. The date currently estimated to be the Commencement
Date is specified in Section 1.8 ("Anticipated Commencement Date").
Notwithstanding the above, Tenant's commencement of payment to Landlord of the
Monthly Rent and Additional Rent due hereunder is subject to the provisions of
Paragraph 9 of Exhibit B, Work Letter. Once the actual Commencement Date has
been determined, the parties shall execute a Commencement Date Memorandum in
the form attached as Exhibit C.
3.2 Delivery Of Possession. Landlord shall use its best efforts
to substantially complete Landlord's work on or before the Anticipated
Commencement Date. If Landlord is unable to deliver possession of the
Premises, through no fault of Tenant, on the Anticipated Commencement Date,
Landlord shall not be subject to liability therefore, nor shall such failure
effect the validity of this Lease, the obligation of Tenant, or extend the
Term. In such case, Tenant shall not be obligated to pay Rent or perform any
other obligations of Tenant under this Lease, except as may be otherwise
provided herein, until possession of the Premises is tendered to Tenant.
Landlord's and Tenant's obligations in delivery of possession are more
completely described in Work Letter Agreement attached hereto as Exhibit B. If
Landlord has not delivered possession of the Premises within sixty (60) days
from the Anticipated Commencement Date (plus the period of delays by reason of
any of the matters described in Section 26.12), Tenant may, by notice to
Landlord given within ten (10) days after such date, elect to cancel this
Lease, and thereafter neither party shall have any further rights or
obligations under this Lease. If Tenant does not elect to cancel within such
period, its right to do so thereafter, by reason of the delay in the
Commencement Date, shall terminate.
3.3 Early Entry. If Tenant is permitted to occupy the Premises
prior to the Commencement Date for the purpose of fixturing or any other
purpose permitted by Landlord, such early entry shall be at Tenant's sole risk
and subject to all the terms and provisions hereof, except for the payment of
monthly Rent which shall commence on the Commencement Date. Landlord shall
have the right to impose such additional conditions on Tenant's early entry as
Landlord shall deem appropriate, and shall further have the right to require
that Tenant execute an early entry
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agreement containing such conditions prior to Tenant's early entry.
4. RENT.
4.1 Base Rent. Tenant shall pay to Landlord in lawful money
of the United States, beginning on the Commencement Date and continuing on the
first day of each calendar month thereafter throughout the Term, the Monthly
Base Rent, set forth in Section 1.9. Monthly Base Rent shall be payable in
advance, without abatement, deduction, claim, offset, prior notice or demand.
Monthly Base Rent for any partial month shall be prorated. Notwithstanding
anything contained herein to the contrary, if the Commencement Date is prior to
the Anticipated Commencement Date, then Tenant may occupy the Premises without
obligation to pay Base Rent to Landlord until the Anticipated Commencement
Date.
4.2 Additional Rent. "Additional Rent" shall include all
monies, in addition to Monthly Base Rent, required to be paid by Tenant to
Landlord under the Lease, including without limitation, any late payments,
interest, and payments required to be made by Tenant to Landlord on account of
costs incurred by Landlord for "Operating Expenses" (specified in Section
4.2.2) or "Tenant Expenses" (specified in Sections 9 and 10.1).
4.2.1 Tenant's Percentages. "Tenant's Building
Percentage" shall be determined by dividing the approximate rental square
footage of the Premises by the approximate total rentable square footage of the
Building. Tenant's Building Percentage is agreed to be the percentage set
forth in Section 1.5. "Tenant's Project Percentage" shall be determined by
dividing the approximate rental square footage of the Premises by the
approximate total rentable square footage of all buildings on the Project.
Tenant's Project Percentage is agreed to be the percentage set forth in Section
1.6.
4.2.2 Operating Expenses. For each calendar year
during the term subsequent to the year specified in Section 1.13 as the Base
Year, Tenant shall pay Tenant's Project Percentage of the increase in Operating
Expenses for such calendar year over "Base Operating Expenses". As
reasonably determined by Landlord, Tenant's Building Percentage may be
substituted for Tenant's Project Percentage for those Operating Expenses that
relate to the Building only. Base Operating Expenses shall mean Operating
Expenses incurred by Landlord during the Base Year. Operating Expenses may
include, without limitation, as Landlord deems appropriate, the cost of any
policies of insurance covering the Building and the Common Area, Real Property
Taxes, Association assessments, Assessment Bond payments, property management
fees, amortization on Project furnishings, cost of labor, materials and
services used or consumed in operating, maintaining, repairing and replacing
the Common Area, including landscaping and sprinkler
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systems, hardscape, walkways and paved parking areas, signs and site lighting,
exterior window cleaning, alterations or improvements required by governmental
authority or Association, and the cost of maintaining, repairing and replacing
exterior walls and the roof membrane of the Building. Utilities included
in Operating Expenses are electricity for parking lot and Common Area lighting
and sprinkler systems, and water for irrigation. Operating Expenses for
both the Base Year and each subsequent calendar year shall be adjusted to equal
Landlord's reasonable estimate of Operating Expenses had the total rentable
area of the Project been occupied. Notwithstanding anything to the contrary
in this Lease, in no event shall Tenant have any obligation to perform, to pay
directly, or to reimburse Landlord for all or any portion of the following
claims, losses, fees, charges, costs and expenses (collectively "Costs"):
(a) Costs occasioned by the act, omission or
violation of any applicable law by Landlord, any other occupant of the Building
or Project, or their respective agents, employees or contractors;
(b) Costs occasioned by fire or other casualty or
acts of God or by the exercise of the power of eminent domain, Costs for
insurance coverage not customarily paid by tenants of similar projects in the
vicinity of the Premises, increases in insurance Costs caused by the activities
of other occupants of the Project, insurance deductibles and/or co-insurance
payments;
(c) Costs which would properly be capitalized
under generally accepted accounting principles and which relate to machinery,
equipment, tools, repairs, alterations, replacements, and improvements except
to the extent that (i) the foregoing reduces the expenses otherwise payable by
Tenant under this Lease; or (ii) Tenant's share in any one year of the cost of
the item is determined by amortizing such cost over the useful life (determined
in accordance with generally accepted accounting principles) of the item;
(d) Costs relating to the repair, maintenance,
and replacement of the structural elements of the Building or Project, except
for the Building windows and roof; and except for necessary and routine
maintenance of the exterior walls, foundation, slab, and roof support structure
of the Building;
(e) Cost of correcting any construction defect in
the Premises, Building or Project, or incurred because of any failure on the
part of the Landlord or any other third party to comply with any applicable
C,C&R's or underwriters requirements, or with any applicable rule regulation,
statute, ordinance, law or code affecting the Premises, Building, or Project as
of the Commencement Date;
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(f) Costs for which Landlord has a right of
reimbursement from others;
(g) Costs (i) arising from the disproportionate
use of any utility or service supplied by Landlord to any other occupant of the
Project or (ii) associated with utilities and services of a type not provided
to Tenant;
(h) Costs incurred in connection with
negotiations or disputes with other occupants of the Project and Costs arising
from the violation by Landlord or any occupant of the Project (other than
Tenant) of the terms of conditions of any lease or other agreement;
(i) Depreciation, amortization of other expenses
including, interest, charges and fees incurred on debt, mortgage and ground
lease payments (but not including the assessments and bond payments described
above);
(j) Profit or compensation retained by Landlord
or its affiliates for management and administration of the Project in excess of
the management fee which would be charged by a third party for management of
comparable projects in the vicinity;
(k) Costs incurred to investigate the presence of
any Hazardous Material or to respond to any claim of Hazardous Material
contamination or damage, Costs to remove any Hazardous Material from any
portion of the Project or to remediate any Hazardous Material contamination,
and any judgments or other Costs incurred in connection with any Hazardous
Material exposure or release, except to the extent the Cost is caused by
Tenant's storage, use or disposal of the Hazardous Material in question (Tenant
shall have no liability to Landlord or any of its officers, agents, partners,
or tenants as a consequence of the presence of Hazardous Materials in or about
the Premises that were not used, stored treated or disposed of in or about the
Premises in violation of law by Tenant or Tenant's agents, employees or
contractors).
4.2.2.1 Notwithstanding anything to the contrary
contained in this Lease, the maximum percentage increase in Operating Expenses
payable by Tenant in any one year over the Operating Expenses payable by Tenant
in the previous year shall not exceed that percentage equal to one hundred fifty
percent of the increase in the Index (as hereinafter defined) from the previous
year to the year in question. As used herein, the term "Index" shall mean the
Consumer Price Index (All Urban Consumers) (base years 1982-1984=100) for the
San Francisco-Oakland-San Jose CMSA as published by the U.S. Department of
Labor, Bureau of Labor Statistics. For example only, if the Index increases in
a twelve month period by 4%, then the Operating Expenses payable by Tenant for
the following twelve months shall increase by no more than 6%
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(i.e. if Tenant's share of Operating Expenses in the previous year was $20,000,
then in no event shall the Operating Expenses payable by Tenant in the current
year exceed $21,200).
4.2.3 Monthly Payments. Commencing with the first
day of the calendar year following the Base Year, Tenant shall pay to Landlord
each month, at the same time and in the same manner as Monthly Base Rent,
1/12th of Landlord's estimate of Tenant's Percentage of the increase in
Operating Expenses for the then current calendar year. Within 90 days after
the close of each calendar year, or as soon after such 90-day period as
practical, Landlord shall deliver to Tenant a statement of the actual increases
in Operating Expenses for such calendar year over the Base Year. If on the
basis of such statement Tenant owes an amount that is less than the estimated
payments for such calendar year previously made by Tenant, Landlord shall
either offset the excess against the Operating Expenses next thereafter to
become due to Landlord or shall refund the amount of the overpayment to Tenant,
as Landlord shall elect. If on the basis of such statement, Tenant owes an
amount that is more than the estimated payments for such calendar year
previously made by Tenant, Tenant shall pay the deficiency to Landlord within
ten (10) days after delivery of statement. The obligations of Landlord and
Tenant under this subparagraph with respect to the reconciliation between
estimated payments and the actual increases in Operating Expenses for the last
year of the term shall survive the termination of the Lease. Notwithstanding
any other provision hereof, if Landlord incurs costs, including Landlord's
administrative costs which relate only to the Premises or Tenant's use of the
Premises or the Project, such costs shall be payable solely by Tenant.
Landlord may either bill such costs directly to Tenant, in which case Tenant
shall pay such costs within ten (10) days of receipt of a statement therefore,
or Landlord may include such costs on the statement of Operating Expenses
payable by Tenant.
5. LATE PAYMENT CHARGES.
Tenant acknowledges that late payment by Tenant to Landlord of Rent
and other charges provided for under this Lease will cause Landlord to incur
costs not contemplated by this Lease, the exact amount of such costs being
extremely difficult or impracticable to fix. Therefore, if any installment of
Rent or any other charge due from Tenant is not received by Landlord within
five (5) days after such payment is due and without any requirement for notice
to Tenant, Tenant shall pay to Landlord an additional sum equal to five percent
(5%) of the amount overdue as a late charge. The parties agree that this late
charge represents a fair and reasonable estimate of the costs that Landlord
will incur by reason of the late payment by Tenant.
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6. SECURITY DEPOSIT.
Prior to occupancy and upon Substantial Completion of the Premises,
Tenant shall deposit with Landlord the sum specified in Section 1.14, for the
Security Deposit, which shall be held by Landlord as security for the faithful
performance by Tenant of all of the terms, covenants, and conditions of this
Lease, it being expressly understood and agreed that the Security Deposit is
not an advance deposit for rent or a measure of Landlord's damages in case of
Tenant's default. The Security Deposit may be retained, used or applied by
Landlord to remedy any default by Tenant, to repair damage caused by Tenant to
any part of the Premises or the Building, and to clean the Premises upon
expiration or earlier termination of this Lease, as well as to reimburse
Landlord for any amount which Landlord may spend by reason of Tenant's default
or to compensate Landlord for any other loss or damage which Landlord may
suffer by reason of Tenant's default. If any portion of the Security Deposit
is so used or applied, Tenant shall, within ten (10) days after written demand
therefore, deposit cash with Landlord in an amount sufficient to restore the
Security Deposit to the full amount required hereunder, and Tenant's failure to
do so shall be a material breach of this Lease. Landlord shall keep the
Security Deposit separate from its general funds, and Tenant shall be entitled
to interest on such deposit at a passbook rate reasonably available to
Landlord. Tenant may not elect to apply any portion of said Security Deposit
toward payment of Base Rent or any other amounts payable by Tenant under this
Lease, although Landlord may elect to do so in the event Tenant is in default
or is insolvent. If Tenant shall fully and faithfully perform every provision
of this Lease, the Security Deposit or any balance thereof shall be returned to
Tenant at Tenant's last known address (or, at Tenant's option, to the last
assignee of Tenant's interest hereunder) within thirty (30) days after the Term
has ended and the Premises have been vacated by Tenant.
7. REAL PROPERTY TAXES.
7.1 Real Property Taxes. Real Property Taxes shall mean all
real property taxes and assessments, personal property taxes, (other than those
within Section 7.2,) and all other assessments, dues or charges against the
Project on which the Building is located shall be paid by Landlord. The amount
so paid shall be included within Operating Expenses under Section 4.2.2. Such
taxes and assessments shall include, without limitation, any assessment or
improvement district or other district, now existing or hereafter established
or imposed, having a lien or claim against the Building or the Project; license
fees, business taxes, commercial rental taxes, levy, tax or similar imposition
imposed by any authority having the power to tax. Such taxes, shall include,
without limitation, any tax on Landlord's right to Rent
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or income from the Premises (excluding state and federal income taxes), any
charge in substitution, partially or totally, of any assessment, tax or charge
previously included in the definition of property tax; assessments for such
services as fire protection, police protection, street, landscape, sidewalk and
road maintenance, refuse removal, sewer assessments and for other governmental
services formerly provided without charge to property owners or occupants; any
assessment, tax, or charge allocable to or measured by the area of the Premises
or the Rent payable hereunder; and any expenses, including attorneys' fees
reasonably incurred by Landlord in seeking reduction by the taxing authority of
such taxes, less tax refunds obtained as a result of Landlord's application for
review.
7.2 Taxes On Alterations And Personal Property. Notwithstanding
any other provision hereof, Tenant shall pay the full amount of any increase
in Real Property Taxes during the Term resulting from any and all alterations
of any kind whatsoever placed in, on or about the Premises for the benefit of,
at the request of, or by Tenant. Tenant shall pay prior to delinquency all
taxes assessed or levied against Tenant's personal property in, on or about
the Premises. When possible, Tenant shall cause its personal property to be
assessed and billed separately from the real or personal property of Landlord.
7.3 Proration. Tenant's liability to pay increases in Real
Property Taxes shall be prorated on the basis of a 365-day year to account for
any fractional portion of a fiscal tax year included at the commencement or
expiration of the Term.
8. INSURANCE.
8.1 Indemnification. Tenant hereby agrees to defend,
indemnify and hold harmless Landlord and its agents, partners, officers and
employees from and against any and all damage, loss, liability or expense
including without limitation, attorneys' fees and legal costs suffered directly
or by reason of any claim, suit or judgment brought by or in favor of any
person or persons for damage, loss or expense due to, but not limited to,
bodily injury and property damage sustained by such person or persons which
arises out of, is occasioned by, or in any way attributable to the use or
occupancy of the Premises, the Building or the Project or any part thereof and
adjacent areas by the Tenant, the negligent acts or omissions of the Tenant,
its agents, employees or any contractors brought onto the Premises, the
Building or the Project by Tenant, except to the extent caused by the
negligence or willful misconduct of Landlord or any other occupant or tenant of
any portion of the Project or their respective invitees, its agents, partners,
officers or employees, or by any other thirty party. Notwithstanding anything
to the contrary in this Lease, Landlord shall not be released from, Tenant
shall not be required to indemnify Landlord with respect to, and Landlord shall
defend,
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indemnify and hold harmless Tenant from and against any and all damage, loss,
liability or expense including without limitation, attorney's fees and legal
costs suffered directly or by reason of the negligence or willful misconduct of
Landlord or its employees, agents, contractors, Landlord's violation of law, or
breach of Landlord's obligations under this Lease.
8.2 Tenant's Insurance. Tenant agrees to maintain in full
force and effect at all times during the Term, at its own expense, for the
protection of Tenant and Landlord, as their interests may appear, policies of
insurance which afford the following coverages:
8.2.1 Liability. Comprehensive general liability
insurance in an amount not less than One Million and no/100ths Dollars
($1,000,000.00) combined single limit for both bodily injury and property
damage which includes blanket contractual liability broad form property damage,
personal injury, completed operations, products liability, and fire legal (in
an amount not less than Fifty Thousand Dollars ($50,000), naming Landlord and
any mortgagee of Landlord designated by Landlord as additional insureds.
8.2.2 Personal Property. "All Risk" property
insurance (including, without limitation, vandalism, malicious mischief,
inflation endorsement, and sprinkler leakage endorsement) on Tenant's Property
as defined in Section 13.1, located on or in the Premises. Such insurance shall
be in the full amount of the replacement cost, as the same may from time to
time increase as a result of inflation or otherwise, and shall be in a form
providing coverage comparable to the coverage provided in the standard ISO
All-Risk form.
8.3 All-Risk Insurance. During the Term, Landlord shall
maintain "All Risk" property insurance (including, at Landlord's option,
inflation endorsement, sprinkler leakage endorsement and earthquake and flood
coverage) on the Building, excluding coverage of all Tenant's Property located
on or in the Premises, but including Tenant Improvements as defined in Section
22. Such insurance shall be in the full amount of the replacement cost, as the
same may from time to time increase as a result of inflation or otherwise, and
shall also include insurance against loss of rents, on an "All Risks" basis, in
an amount equal to the Monthly Rent and Additional Rent, and any other sums
payable under the Lease, for a period of at least twelve (12) months commencing
on the date of loss. Such insurance shall name Landlord and any mortgagee of
Landlord as named insureds and include a lender's loss payable endorsement in
favor of Landlord's lender.
The insurance described in the preceding portion of this Section 8.3
shall not be required to include coverage for Tenant Improvements to the extent
paid for by Tenant pursuant to the
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provisions of Exhibit B attached hereto. In addition to the insurance
described above, Landlord shall also maintain additional replacement cost
insurance (the "Additional Insurance") covering the Tenant Improvements to the
extent paid for by Tenant. The Additional Insurance shall be evidenced by a
Certificate of Insurance (or other evidence reasonably satisfactory to Tenant)
showing such coverage and the amount thereof, which evidence shall be delivered
to Tenant in accordance with the terms of this Lease, and shall be renewed or
replaced by Landlord not less than thirty (30) days prior to expiration or
cancellation. The Additional Insurance shall name Landlord as primary insured,
and Tenant as a loss payee and/or an additional named insured (with thirty
(days notice of cancellation or non-renewal to Tenant), as their interests may
appear; and shall not name any mortgagee of Landlord either as an additional
insured or loss payee. If Landlord shall fail to obtain or renew the
Additional Insurance in accordance with the foregoing provisions, Tenant may
obtain such insurance (with a policy period of not less than six months, and
not more than one year) and deduct the premium therefor from the Rent next due
under this Lease.
8.3.1 Payment By Tenant. If above insurance premiums
are increased after the Commencement Date due to Tenant's use of the Premises
or the installation of Tenant Improvements under Section 13.1, or any other
cause solely attributable to Tenant, Tenant shall pay the full amount of the
increase within ten (10) days of notice of such increase.
8.4 Co-Insurer. If, due to Tenant's failure to comply with
the foregoing provisions, Landlord is adjudged a co-insurer by its insurance
carrier, then, any loss or damage Landlord sustains by reason thereof,
including attorneys fees and costs, shall be borne by Tenant and shall be
immediately paid by Tenant upon receipt of a bill therefore and evidence of
such loss.
8.5 Insurance Requirements. All insurance carried by Tenant
shall be in a form satisfactory to Landlord and shall be carried with companies
that have a general policy holder's rating of not less than "A" in the most
current edition of Best's Insurance Reports, shall provide that such policies
shall not be subject to material alteration or cancellation except after at
least thirty (30) days prior written notice to Landlord, and shall be primary
as to Landlord. The policy or policies, or duly executed certificates for
them, together with satisfactory evidence of payment of the premium thereon
shall be deposited with Landlord prior to the Commencement Date, and upon
renewal of such policies, not less than thirty (30) days prior to the
expiration of the term of such coverage. The certificates shall expressly
provide that the interest of Landlord therein shall not be affected by any
breach of Tenant of any policy provision for which such certificates evidence
coverage. If Tenant fails to procure and maintain the insurance required
hereunder, Landlord, may, upon
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written notice to Tenant, order such insurance at Tenant's expense and Tenant
shall reimburse Landlord upon demand. Such reimbursement shall include all
sums incurred by Landlord, including Landlord's reasonable attorneys' fees and
costs, with interest thereon at the maximum rate permitted by law.
8.6 Landlord's Disclaimer. Landlord and its agents, partners,
officers and employees shall not be liable for any loss or damage to persons or
property resulting from fire, explosion, falling plaster, glass, tile or
sheetrock, steam, gas, electricity, water or rain which may leak from any part
of the Building, or from the pipes, appliances or plumbing works therein or
from the roof, street or subsurface or whatsoever, unless caused by or due to
the negligence or willful acts of Landlord or its agents, employees or
contractors. Landlord and its agents, partners, officers and employees shall
not be liable for interference with the light, air, or any latent defect in the
Premises. Tenant shall give prompt written notice to Landlord in case of a
casualty, accident or repair needed in the Premises.
8.7 Waiver Of Subrogation. Landlord and Tenant each hereby
waive all rights of recovery against the other on account of loss and damage
occasioned to such waiving party for its property or the property of others
under its control to the extent that such loss or damage is insured against
under any insurance policies which may be in force at the time of such loss or
damage. Tenant and Landlord shall, upon obtaining policies of insurance
required hereunder, give notice to the insurance carrier that the foregoing
mutual waiver of subrogation is contained in this Lease and Tenant and Landlord
shall cause each insurance policy obtained by such party to provide that the
insurance company waives all right of recovery by way of subrogation against
either Landlord or Tenant in connection with any damage covered by such policy.
9. UTILITIES AND SERVICES.
Tenant shall be responsible for and shall pay promptly all charges for
water, gas, electricity, sewer, telephone, refuse pickup, janitorial service
and all other utilities, materials and services furnished directly to or used
by Tenant in, on or about the Premises, or Project, during the Term, together
with any taxes thereon. These costs shall be considered "Tenant Expenses"
(along with those specified in Section 10.1 below) which are separate and apart
from those Operating Expenses described in Section 4.2.2. Landlord shall not be
liable for damages or otherwise for any failure or interruption of any utility
service or other service furnished to the Premises, except that resulting from
the willful act or negligence of Landlord or its agents, employees or
contractors. Any utilities which are not separately metered, (fire service
water) or services which are not separately billed to the Premises (e.g. refuse
pickup) and which are in Landlord's control, shall be charged to Tenant on an
equitable basis as
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determined by Landlord (domestic water supply is measured by submeter, charges
then passed through on a monthly basis to Tenant). Tenant shall pay directly,
or reimburse Landlord for, the costs thereof, as and when billed by vendor or
Landlord. If the Premises should become not reasonably suitable for Tenant's
use as a consequence of cessation of utilities or other services required to be
provided to the Premises by Landlord, interference with access to the Premises,
or the presence of any Hazardous Material (not caused by Tenant's use, storage
or disposal of such Hazardous Material), and in any of the foregoing cases the
interference with Tenant's use of the Premises persists for seven (7)
continuous calendar days, then Tenant shall be entitled to an equitable
abatement of rent to the extent of the interference with Tenant's use of the
Premises occasioned thereby.
With regard to refuse pickup, Tenant must store within Premises such
refuse as pallets or metal drums, and arrange for their separate disposal. If
Hazardous Materials are involved, Tenant must comply with Section 12.4. Tenant
must collapse any cardboard shipping containers prior to disposal in Landlord
provided dumpsters. Tenant will be billed for excessive use of refuse disposal
that require oversized dumpsters or extra pickups. At all times, Tenant will
not be permitted to store refuse or goods outside of Premises if unsightly or
in violation of Covenants, Conditions and Restrictions ("C,C&R's").
10. REPAIRS AND MAINTENANCE.
10.1 Building.
10.1.1 Landlord's Obligations. Landlord at its sole cost
shall keep in good order, condition and repair the structural parts of the
Buildings, which structural parts include only the foundation, exterior walls
(excluding the interior of all exterior walls and roof), and subflooring of the
Premises, except for any damage thereto caused by the negligence or willful
acts or omissions of Tenant or of Tenant's agents, employees or invitees, or by
reason of the failure of Tenant to perform or comply with any terms, conditions
or covenants in this Lease, or caused by alterations made by Tenant or by
Tenant's agents, employees or contractors which shall be Tenant's
responsibility subject to the provisions of Paragraph 8.7. Except for repairs
readily discernable by visual inspection of exterior, it is a condition
precedent to all obligations of Landlord to repair and maintain under this
Section 10.1.1 that Tenant shall have notified Landlord in writing of the need
for such repairs or maintenance or that Landlord shall have actual knowledge of
the need for such repairs or maintenance.
Landlord shall also maintain, repair and replace the HVAC system for the
Premises and Tenant shall pay directly or reimburse Landlord for the costs
thereof, as and when billed by vendor or
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Landlord. Landlord shall obtain an HVAC system preventive maintenance contract
with monthly service which shall be paid for by Tenant and which shall provide
for and include replacement of filters, oiling and lubricating of machinery,
parts replacement, adjustment of drive belts, oil changes and other preventive
maintenance. Tenant shall have the benefit of all warranties available to
Landlord regarding such equipment. Notwithstanding anything to the contrary
contained in the foregoing (i) the HVAC preventive maintenance contract
obtained by Landlord and the person or entity providing services pursuant to
such contract shall be subject to Tenant's prior written approval, (ii) any
decision to replace the HVAC system for the Premises shall be subject to
Tenant's prior written approval, and (iii) the provisions of Section 4.2.2 (c)
shall apply to Tenant's obligation to pay directly or reimburse Landlord for
the costs of replacing the HVAC system for the Premises.
10.1.2 Tenant's Obligations. Tenant shall at all times
and at its own expense clean, keep and maintain in good, safe and sanitary
order, condition and repair every part of the Premises which is not within
Landlord's obligation pursuant to Section 10.1.1. Tenant's repair and
maintenance obligations shall include, without limitation, all plumbing and
sewage facilities within the Premises, fixtures, interior walls, floors,
ceilings, interior windows, store front, doors, entrances, plate glass,
showcases, skylights, all electrical facilities and equipment, including
lighting fixtures, lamps, fans and any exhaust equipment and systems, any fire
extinguisher equipment within the Premises, electrical motors and all other
appliances and equipment of every kind and nature located in, upon or about the
Premises. Tenant shall also be responsible for all pest control within the
Premises. All glass is at the sole risk of Tenant, and any broken glass shall
promptly be replaced by Landlord, at Tenant's expense, with glass of the same
kind, size and quality. Tenant shall be responsible for payment of Tenant's
Percentage of the costs to repair and maintain the Building roof provided that
(i) Landlord shall reimburse Tenant for eight point seven one percent (8.71%)
of the cost of such repair as and when billed by Tenant (except for repairs
caused by or arising from roof-mounted equipment or roof penetrations serving
only the Premises, installed or made by Tenant, or Landlord on behalf of Tenant
pursuant to Exhibit B, the cost of which shall be borne solely by Tenant); (ii)
Tenant shall not be responsible for the cost of maintenance and repair of the
venting ducts constructed by the adjacent tenant in a portion of the Premises
and (iii) if the repair and maintenance would properly be capitalized under
generally accepted accounting principles and Landlord and Tenant have so agreed
in writing prior to undertaking such repair or maintenance, then the full cost
thereof shall be borne by Landlord, and Tenant shall reimburse Landlord monthly
for Tenant's Building Percentage of the cost of such work based upon such cost
amortized over the useful life of
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the work (determined in accordance with generally accepted accounting
principles).
10.2 Common Area. Landlord shall maintain and repair the Common
Area, including the membrane and exterior walls of the Building, in a good,
safe and sanitary manner. Landlord shall at all times have exclusive control
of the Common Area and may, at any reasonable time, temporarily close any part
thereof, exclude and restrain anyone from any part thereof, except the bona
fide customers, employees and invitees of Tenant who use such areas in
accordance with the reasonable rules and regulations as Landlord may from time
to time establish. In addition, Landlord may reasonably change the
configuration or location of the Common Area. In exercising any such rights,
Landlord shall use diligent efforts to minimize any disruption of Tenant's
business. Landlord shall have the right to reconfigure the parking area and
ingress to and egress from the parking area, and to modify the directional flow
of traffic of the parking area.
10.3 Waiver. Landlord and Tenant agree that the terms of this
Lease shall govern the respective obligations of Landlord and Tenant with
respect to repairs and maintenance. Accordingly, Tenant waives the provisions
of Sections 1941 and 1942 of the California Civil Code and any similar or
successor law regarding Tenant's right to make repairs and deduct the expenses
of such repairs from the Rent due under this Lease.
11. CONDITION OF PREMISES.
If no "Tenant Improvements" (as defined in Exhibit B, Work Letter
Agreement) are to be constructed by Landlord, Tenant acknowledges that Tenant
has inspected the Premises and accepts the Premises as of the Commencement Date
in their "as is" condition. Tenant acknowledges that neither Landlord nor its
agents have made any representations or warranties as to the suitability or
fitness of the Premises for the conduct of Tenant's business or for any other
purpose, nor has Landlord or its agents agreed to undertake any alterations or
construct any Tenant Improvements to the Premises except as expressly provided
in this Lease. However, if improvements, alterations or additions to the
Premises are required to be made by Landlord and/or Tenant, the provisions of
the Work Letter Agreement, attached as Exhibit B hereto, shall govern the work
to be completed at Landlord's expense ("Building Standard Work"), if any, and
work to be completed at Tenant's expense ("Over Standard Work"), if any. To
the extent Landlord is required to perform Building Standard Work or Over
Standard Work pursuant to the Work Letter Agreement, Landlord shall use
reasonable diligence to complete such work in a timely manner. If Tenant
Improvements are to be constructed by Landlord; then, within ten (10) days
after completion of the Tenant Improvements, Tenant shall conduct a
walk-through inspection of the Premises with Landlord and complete a punch-list
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of items needing additional work by Landlord. Other than the items specified in
the punch-list, by taking possession of the Premises, Tenant shall be deemed to
have accepted the Premises and Tenant Improvements in good, clean and completed
condition and repair, subject to all applicable laws, codes and ordinances.
Notwithstanding anything to the contrary in this Lease, Tenant's acceptance of
the Premises or submission of a "punch-list" or execution of a commencement
date memorandum shall not be deemed a waiver of Tenant's right to have defects
in the Tenant Improvements or the Premises repaired at Landlord's sole expense.
Tenant shall give notice to Landlord whenever any such defect becomes
reasonably apparent, and Landlord shall repair such defect as soon as
practicable. Landlord hereby assigns to Tenant all warranties with respect to
the Premises and Building roof which would reduce Tenant's maintenance
obligations hereunder and shall cooperate with Tenant to enforce all such
warranties.
12. USE OF PREMISES.
12.1 Tenant's Use. Tenant shall use the Premises solely for the
use specified in Section 1.15 and shall not use the Premises for any other
purpose without obtaining the prior written consent of Landlord.
12.2 Rules And Regulations. Tenant shall abide by the Rules and
Regulations respecting use of the Premises, Building, Common Areas and Project.
The provisions of the Rules and Regulations attached hereto as Exhibit "D" are
incorporated herein by this reference. Landlord reserves the right to amend
Rules and Regulations as are reasonably necessary or appropriate to the
operation or use of the Premises, Building, Common Areas or Project. Tenant
shall comply with any such amendments or supplements. Notwithstanding the
foregoing, Tenant shall not be required to comply with any rule or regulation
that unreasonably interferes with Tenant's use of the Premises or Tenant's
parking rights.
12.3 Compliance. Tenant shall not use the Premises or suffer
or permit by those in Tenant's control anything to be done in or about the
Project which will in any way violate any law, statute, zoning restriction,
ordinance or governmental law, rule, regulation or requirement of duly
constituted public authorities now in force or which may hereafter be in force,
or the requirements of the Board of Fire Underwriters or other similar body now
or hereafter constituted relating to or affecting the condition, use or
occupancy of the Premises or the Project. Tenant shall, at its cost, comply
with all present and future regulations, rules, laws, ordinances, and
requirements of all governmental authorities, including any transportation
systems management program adopted by the County, City or Association, arising
from the use or occupancy of, or applicable to the Premises or the Project or
privileges appurtenant thereto.
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Tenant shall not commit any public or private nuisance or any other act or
thing which might or would disturb the quiet enjoyment of any other tenant of
Landlord or any occupant of nearby property. Tenant shall place no loads upon
the floors, walls or ceilings in excess of the maximum designed load determined
by Landlord or which endanger the structure, nor place any harmful liquids in
the drainage systems, nor dump or store waste materials or refuse or allow such
to remain outside the Building proper, except in the enclosed trash areas
provided. At the Commencement Date, the Premises, Building and Project shall
conform to all requirements of the C,C&R's, all underwriter's requirements, and
all rules, regulations, statutes, ordinances, laws and building codes
applicable thereto, including without limitation all of the foregoing governing
Hazardous Materials. Tenant shall not be required to construct or pay the cost
of complying with any C,C&R's, underwriter's requirements or laws requiring
construction of improvements in the Premises which are properly capitalized
under generally accepted accounting principles, unless such compliance is
necessitated solely because of Tenant's particular use of the Premises.
12.4 Hazardous Material. Tenant shall strictly comply with
all statutes, laws, ordinances, rules, regulations, and precautions now or
hereafter mandated by any federal, state, local or other governmental agency
with respect to Tenant's use, generation, storage, or disposal of hazardous,
toxic, or radioactive materials (collectively, "Hazardous Materials") at the
Premises, the Building, the Project and the Harbor Bay Business Park. Tenant
shall not cause, or allow anyone else under Tenant's control to cause any
Hazardous Materials to be used, generated, stored, or disposed of on or about
the Premises, Building, Project, or Harbor Bay Business Park, without the prior
written consent of Landlord, which consent may not be unreasonably withheld.
Tenant's indemnification of Landlord pursuant to Section 8.1 shall extend to
all liability, including all foreseeable and unforeseeable consequential
damages, directly or indirectly arising out of the use, generation, storage, or
disposal of Hazardous Materials by Tenant or any person claiming under Tenant,
including, without limitation, the cost of any required or necessary repair,
cleanup, or detoxification and the preparation of any closure or other required
plans, whether such action is required or necessary prior to or following the
termination of this Lease, to the full extent that such action is attributable,
directly or indirectly, to the use, generation, storage, or disposal of
Hazardous Materials by Tenant or any person claiming under Tenant. Neither the
written consent by Landlord to the use, generation, storage, or disposal of
Hazardous Materials nor the strict compliance by Tenant with all statutes,
laws, ordinances, rules, regulations, and precautions pertaining to Hazardous
Materials shall excuse Tenant from Tenant's obligation of indemnification
pursuant to this subsection. Tenant's obligations pursuant to the foregoing
indemnity shall
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survive the termination of this Lease. Landlord consents to Tenant's use
and storage at the Premises of the materials listed on the attached Exhibit G.
Tenant shall provide Landlord with reasonable access, upon reasonable notice,
to Tenant's records concerning the use and storage at the Premises of such
materials. Notwithstanding anything to the contrary in this Lease, within the
time permitted by applicable law, Landlord, at its sole cost, shall perform or
cause to be performed any required investigation, remediation, removal or
detoxification of the Project or any portion thereof, and shall comply with any
law relating to any Hazardous Material present at any time on or about the
Premises or Project, or the soil, air, improvements, ground water or surface
water thereof, except to the extent that such Hazardous Material is released,
discharged or emitted on or about the Premises during the Term by Tenant or its
agents or employees in violation of applicable law. To the best knowledge
of Landlord (i) no Hazardous Material is present on the Project or any portion
thereof, or the soil, surface water or ground water thereof, (ii) no
underground storage tanks or asbestos containing building materials are present
on the Project, and (iii) no action, proceeding or claim is pending or
threatened concerning the Project with respect to any Hazardous Material or
pursuant to any applicable law. Landlord has complied with all environmental
disclosure obligations imposed upon Landlord by applicable law with respect to
this transaction.
13. ALTERATIONS AND LIENS.
13.1 Alterations. Tenant shall not make or permit to be made
any alterations, additions or improvements to the Premises, Building, Project,
or Common Areas, without obtaining Landlord's prior written consent. When
applying for such consent, Tenant shall, if required by Landlord, furnish
complete plans and specifications for such alterations, additions or
improvements. Tenant may, without Landlord's prior approval, make improvements
to the interior of the Premises which do not affect the structure of the
Building and which do not exceed a cost of Five Thousand Dollars ($5,000). All
alterations, additions or improvements to the Premises made by Tenant shall be
performed by contractors approved by Landlord for Tenant's account and at
Tenant's sole cost and expense. Within ten (10) days after receipt of a
written statement from Landlord, Tenant shall reimburse Landlord for all
reasonable costs arising in connection with Landlord's review of plans and
specifications and supervision of contractors. All alterations, additions,
fixtures and improvements, whether temporary or permanent in character, made in
or upon the Premises by Landlord at its expense and designated as Tenant
Improvements shall at once belong to Landlord and become part of the Premises
and shall remain on the Premises without compensation of any kind to Tenant.
All alterations, additions, fixtures and improvements, whether temporary or
permanent in character, made in or upon the Premises by Landlord or Tenant at
Tenant's expense, and designated
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as Tenant Improvements shall upon termination of this Lease belong to Landlord
and become part of the Premises, and shall remain on the Premises without
compensation of any kind to Tenant (except as otherwise provided in Sections
16.3, 17 and 18.4), but during the Lease Term, Tenant shall be entitled to all
depreciation, amortization and other tax benefits with respect to thereto.
Tenant shall carry insurance as required by Section 8 covering Tenant's
Property, it being understood and agreed that none of Tenant's Property shall
be insured by Landlord nor shall Landlord be required under any provision for
reconstruction to reinstall any such Tenant's Property. Tenant shall be
responsible for the maintenance and repair of any alterations made by it to the
Premises. With respect to any alterations, additions or improvements to the
Premises or Building proposed by Tenant, Tenant shall indicate to Landlord if
Tenant intends to surrender such alteration, addition or improvement upon
termination of the Lease Term, and that such alteration, addition or
improvement should be designated as a "Tenant Improvement" as defined in
Section 22; or if Tenant intends to retain the right to remove such alteration,
addition or improvement upon termination of the Lease Term, and that the same
should be designated as "Tenant's Property", as defined below. Landlord shall
indicate to Tenant whether or not Landlord agrees with Tenant's proposed
designation. In the event Landlord and Tenant disagree, the parties will
confer and negotiate in good faith to reach agreement upon the designation of
each item of such alteration, addition or improvement as a Tenant Improvement
or Tenant's Property, and neither party shall unreasonably reject the other
party's proposal in this regard. If the parties are unable to resolve such
disagreement, they shall cooperate diligently and expeditiously to resolve the
issue including, without limitation, submitting the disagreement to expedited
arbitration by an architect or other design professional mutually agreed to by
the parties or appointed for such purpose by the Presiding Judge of the Alameda
County Superior Court. Any item not defined as a Tenant Improvement under
clause (a) of Section 22, or not designated as a Tenant Improvement pursuant to
the foregoing provisions of this Section 13.1, shall be "Tenant's Property".
At any time and from time to time Tenant may remove Tenant's Property from the
Premises, provided Tenant repairs all damage caused by such removal. It is the
intent of Landlord and Tenant that (i) any item integrated into the walls,
floors, roof or structural elements of the Building shall be designated a
"Tenant Improvement;" and (ii) any item of Tenant's trade fixtures, furniture,
self-contained equipment or equipment which is removable without structural
damage to the Building or Premises, personal property and other items
considered personal property shall be designated "Tenant's Property". Landlord
shall have no lien or other interest whatsoever in any item of Tenant's
Property and shall execute any document reasonably necessary to waive any lien
or interest in any such item; and Tenant's Property shall at all times be and
remain Tenant's property, and Tenant shall be entitled to all
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depreciation, amortization and other tax benefits with respect thereto.
13.2 Liens. Tenant shall keep the Premises, Building, Project,
and Common Areas free from any liens arising out of work performed, materials
furnished, or obligations incurred by Tenant and shall indemnify, hold harmless
and defend Landlord from any liens and encumbrances arising out of any work
performed or materials furnished by or at the direction of Tenant. In the
event that Tenant shall not, within twenty (20) days following notice of
imposition of any such lien, cause such lien to be released of record by
payment or posting of a proper bond, Landlord shall have, in addition to all
other remedies provided in this Lease and by law, the right, but no obligation,
to cause the same to be released by such means as it shall deem proper,
including payment of the claim giving rise to such lien. All such sums paid by
Landlord and all expenses incurred by it in connection therewith, including
attorneys' fees and administrative costs, shall be payable to Landlord by
Tenant on demand with interest at the maximum rate permitted by law from the
date such sums are paid or expenses incurred by Landlord. Landlord shall have
the right at all times to post and keep posted on the Premises any notices
permitted or required by law, or which Landlord shall deem proper, for the
protection of Landlord and the Premises, and any other party having an interest
therein, from mechanics and materialmen's liens, and Tenant shall give to
Landlord at least ten (10) business days prior written notice of the expected
date of commencement of any work relating to alterations, additions or
improvements in or to the Premises.
14. LANDLORD'S RIGHT TO ENTER THE PREMISES.
Landlord and its authorized representatives shall have the
right to enter the Premises at all reasonable times during normal business
hours and at any time in case of any emergency (i) to determine whether the
Premises are in good condition and whether Tenant is complying with its
obligations under this Lease, (ii) to maintain or to make any repair or
restoration to the Building or Premises that Landlord has the right or
obligation to perform, (iii) to install any meters or other equipment which
Landlord may have the right to install, (iv) to protect the Premises, the
Building and adjacent areas from damage or destruction, (v) to serve, post, or
keep posted any notices required or allowed under the provisions of this Lease,
to post "for sale" signs at any time during the term, and to post "for rent" or
"for lease" signs during the last four (4) months of the term or during any
period while Tenant is in default, (vi) to show the Premises to prospective
brokers, lenders, agents, buyers, tenants, or persons interested in an
exchange, (vii) to shore the foundations, footings, and walls of the Building
and to erect scaffolding and protective barricades around and about the
Building or the Premises, but not so as to prevent entry into the Premises, and
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(viii) to do any other act or thing necessary for the safety or preservation
of the Premises or the Building. Landlord shall at all times have and retain a
key with which to unlock all doors in, upon and about the Premises, excluding
Tenant's vaults and safes, and Landlord shall have the right to use any and all
means which Landlord may deem proper to gain entry in an emergency. Entry to
the Premises by Landlord by any of said means shall not be construed or deemed
to be a forcible or unlawful entry into, or a detainer of, the Premises, or an
eviction of Tenant from the Premises or any portion thereof. Tenant hereby
waives any claim for damages for any injury or inconvenience to or interference
with Tenant's business and any loss of occupancy or quiet enjoyment of the
Premises by reason of Landlord's exercise of its rights of entry in accordance
with this Section, and Tenant shall not be entitled to an abatement or
reduction of Rent or Expenses in connection therewith. Notwithstanding
anything to the contrary contained in this Lease, in connection with any entry
into the Premises by Landlord or its authorized representatives (except in the
case of an emergency) Landlord (i) shall first give 24 hours notice to Tenant
of such entry, (ii) shall be accompanied by an employee of Tenant at all times
while in the Premises, (iii) shall comply with Tenant's security and safety
procedures applicable to the Premises, and (iv) shall not unreasonably
interfere with Tenant's use of the Premises.
15. SIGNS.
Landlord shall provide space for Tenant's identification sign(s) as
per the approved Tenant Sign Design Guidelines ("Guidelines") as set forth in
Exhibit E. Tenant shall have no right to maintain a Tenant identification sign
in any other location in, on or about the Premises, the Building or the Project
and shall not display or erect any other Tenant identification signs, display
or other advertising material that is visible from the exterior of the
Building. The size, design, color and other physical aspects of any sign,
advertisement or notice, whether temporary or permanent, shall be subject to:
Guidelines, Architectural Review Committee approval in accordance with C,C&R's,
and appropriate municipal or other governmental approvals. The cost of the
sign and its installation, maintenance and removal shall be Tenant's sole
expense. If Tenant fails to maintain its sign or, if Tenant fails to remove
such sign upon termination of this Lease, Landlord may do so at Tenant's
expense and Tenant's reimbursement to Landlord for such amounts shall be deemed
Additional Rent.
16. DAMAGE OR DESTRUCTION.
16.1 Partial Damage - Insured. If the Premises are damaged
by any casualty which is covered under the "All Risk" insurance carried by
Landlord; or would have been covered under insurance required to be carried by
Landlord pursuant to Section 8.3, and
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Paragraph 16.3 does not apply, then Landlord shall restore such damage;
provided, however, that Landlord shall be under no obligation to restore,
replace or repair any portions of the Premises that are Tenant's Property as
defined in Section 13.1. In such event, Landlord shall promptly restore the
Premises and all Tenant Improvements to the condition in which they existed
immediately prior to the casualty, this Lease shall continue in full force and
effect, except that Tenant shall be entitled from the date of the casualty to a
proportionate reduction in Monthly Base Rent and Additional Rent to be based
upon the extent to which the restoration efforts interfere with Tenant's use of
the Premises, as reasonably agreed upon between Tenant and Landlord.
16.2 Partial Damage - Uninsured. If the Premises or the
Building is damaged by a risk not covered and not required to be covered by
Landlord's insurance, repair or restoration would cost more than 10% of the
replacement cost of the Premises or Building, whichever is applicable, and
Tenant does not agree to pay the cost of repair in excess of 10% of the
replacement cost of the Premises and/or Building, then Landlord shall have the
option either to: (1) repair or restore such damage, as required under Section
16.1, this Lease continuing in full force and effect, but the Monthly Base Rent
to be proportionately abated as provided in Section 16.1 or (2) give notice to
Tenant at any time within thirty (30) days after such damage terminating this
Lease as of a date to be specified in such notice which date shall be not less
than thirty (30) nor more than sixty (60) days after giving such notice. If
notice of termination is given, this Lease shall expire and all interest of
Tenant in the Premises shall terminate on such date so specified in such notice
and the Monthly Base Rent, reduced from the date of the casualty by any
proportionate reduction based upon the extent, if any, to which such damage
interfered with the use of the Premises by Tenant, shall be paid to the date of
such termination.
16.3 Total Destruction. If the Premises or Building is
damaged or destroyed to the extent that Landlord determines that the Premises
or Building cannot, with reasonable diligence, be fully repaired or restored by
Landlord within one hundred eighty (180) days after the date of the damage or
destruction, notwithstanding the fact that the Premises have not been damaged
or destroyed, the sole right of both Landlord and Tenant shall be the option to
terminate this Lease. Landlord's reasonable determination with respect to the
extent of damage or destruction shall be conclusive on Tenant. Landlord shall
notify Tenant of Landlord's determination, in writing, within thirty (30) days
after the date of the damage or destruction. If Landlord determines that the
Premises or Building can be fully repaired or restored within the one hundred
eighty (180) day period, or if Landlord determines that such repair or
restoration cannot be made within said period but neither party elects to
terminate within thirty (30) days from the date of said determination, this
Lease
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shall remain in full force and effect and Landlord shall diligently repair and
restore the damage as soon as reasonably possible, in accordance with the
provisions of Section 16.1. If the Lease is terminated in accordance with the
foregoing, Tenant shall be entitled to receive that portion of Landlord's
insurance proceeds equal to the replacement cost of Tenant Improvements paid
for by Tenant. The replacement cost of each Tenant Improvement paid for by
Tenant which is separately identifiable shall be established separately. In
determining the replacement cost of Tenant Improvements paid for by Tenant but
not identifiable from Tenant Improvements paid for by Landlord, Tenant's share
of the insurance proceeds shall be that portion of such proceeds which bears
the same relationship to the total replacement cost for such Tenant
Improvements as the amount of Tenant Improvement Costs paid by Tenant pursuant
to Exhibit B bears to the total amount of all Tenant Improvement Costs under
Exhibit B. For example only, if the total Tenant Improvement Costs under
Exhibit B were $1,000,000, and Tenant paid $400,000 of such costs, Tenant would
be entitled to insurance proceeds in an amount equal to 40% of the replacement
cost of the Tenant Improvements described in the preceding sentence.
16.4 Landlord's Obligations. Landlord shall not be required to
repair any injury or damage by fire or other cause or to make any restoration
or replacement of Tenant's Property. Except for abatement of Monthly Base Rent
and Additional Rent, if any, Tenant shall have no claim against Landlord for
any damage suffered by reason of any such damage, destruction, repair or
restoration nor shall Tenant have the right to terminate this Lease as the
result of any statutory provision now or hereafter in effect pertaining to the
damage and destruction of the Premises, except as expressly provided herein.
16.5 Damage Near End Of Term. Anything herein to the contrary
notwithstanding, if the Premises is destroyed or damaged during the last twelve
(12) months of the Term and cannot be substantially restored within 45 days
after the date of such damage, then Landlord may cancel and terminate this
Lease as of the date of the occurrence of such damage, except if Tenant
exercises its option to extend the term of this Lease. If Landlord does not
elect to so terminate this Lease, or Tenant exercises its option to extend the
Lease term, the repair of such damage shall be governed by the other provisions
of this Section 16.
17. CONDEMNATION.
If title to all of the Premises, the Building or the Project or so much
thereof so that reconstruction of the Premises or the Building will not, in
Landlord's and Tenant's mutual reasonable judgment, result in the Premises
being suitable for Tenant's continued occupancy for the uses and purposes
permitted by this
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Lease, is taken or appropriated for any public or quasi-public use under any
statute or by right of eminent domain , this Lease shall terminate as of the
date that possession of the Premises or Building or part thereof is taken. A
sale by Landlord to any authority having the power of eminent domain, either
under threat of condemnation or while condemnation proceedings are pending,
shall be deemed a taking under the power of eminent domain for all purposes of
this Section. If any part of the Premises, the Building or the Project is
taken and the remaining part is reasonably suitable for Tenant's continued
occupancy for the purposes and uses permitted by this Lease, this Lease shall,
as to the part so taken, terminate as of the date that possession of such part
of the Premises or Building is taken. If the Premises are partially taken, the
Rent and other sums payable hereunder shall be reduced in the same proportion
that Tenant's use and occupancy of the Premises is reduced. No award for any
partial or entire taking shall be apportioned, except that Tenant shall be
entitled to that portion of the award attributable to the fair market value of
Tenant Improvements paid for by Tenant, determined in accordance with Section
16.3 (except substituting the word "condemnation" for the word "insurance," and
the phrase "fair market value" for the phrase "replacement cost," wherever they
appear in Section 16.3). Subject to the foregoing, Tenant assigns to Landlord
its interest in any award which may be made in such taking or condemnation,
together with any and all rights of Tenant arising in or to the same or any
part thereof. Nothing contained herein shall be deemed to give Landlord any
interest in or require Tenant to assign to Landlord any separate award made to
Tenant for the taking of Tenant's Property, for the interruption of Tenant's
business, or its moving costs, or for the loss of its goodwill. No temporary
taking of the Premises shall terminate this Lease or give Tenant any right to
any abatement of Rent. Any award made to Tenant, by reason of such temporary
taking shall belong entirely to Tenant. Each party agrees to execute and
deliver to the other all instruments that may be required to effectuate the
provisions of this Section.
18. ASSIGNMENT AND SUBLETTING.
18.1 Definitions.
18.1.1 Sublet. Any transfer, sublet, assignment, license or
concession agreement, change of ownership, mortgage, or hypothecation of this
Lease or the Tenant's interest in the Lease or in a portion of the Premises,
excluding any consideration related to Tenant's Property.
18.1.2 Subrent. Any consideration of any kind received, or to
be received, by Tenant from a Subtenant if such sums are related to Tenant's
interest in this Lease or in the Premises.
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18.1.3 Subtenant. The person or entity with whom a
Sublet agreement is proposed to be or is made.
18.2 Landlord's Consent. Tenant shall not enter into a Sublet
without Landlord's prior written consent, which consent shall not be
unreasonably withheld. Any attempted or purported Sublet without Landlord's
prior written consent shall be void and confer no rights upon any third person
and shall be deemed a material default of this Lease. Each subtenant shall
agree in writing, for the benefit of Landlord, to assume, to be bound by, and
to perform the terms, conditions and covenants of this Lease to be performed by
Tenant. Notwithstanding anything contained herein, Tenant shall not be
released from personal liability for the performance of each term, condition
and covenant of this Lease by reason of Landlord's consent to a sublet unless
Landlord specifically grants such release in writing.
18.3 Information To Be Furnished. If Tenant desires at any
time to transfer this Lease (which transfer shall in no event be for less than
its entire interest in this Lease) or to sublet the Premises or any portion
thereof, Tenant shall submit to Landlord at least thirty (30) days prior to the
proposed effective date of the transfer or sublease ("Proposed Effective
Date"), in writing: (1) a notice of intent to transfer or sublease, setting
forth the Proposed Effective Date, which shall be no less than thirty (30) nor
more than ninety (90) days after the sending of such notice; (2) the name of
the proposed subtenant or transferee; (3) the nature of the proposed
subtenant's or transferee's business to be carried on in the Premises; (4) the
terms and provisions of the proposed sublease or transfer; (5) such certified
financial information as Landlord may request concerning the proposed subtenant
or transferee, including recent financial statements and bank references; and
(6) evidence satisfactory to Landlord that the proposed subtenant or transferee
will immediately occupy and thereafter use the affected portion of the Premises
for the entire term of the sublease or transfer agreement.
18.4 Landlord's Alternatives. At any time within fifteen
(15) days after Landlord's receipt of the information specified in Section
18.3, Landlord may, by written notice to Tenant, elect (1) to consent to the
Sublet by Tenant; or (2) to refuse its consent to the Sublet. If Landlord
consents to the Sublet, Tenant may thereafter enter into a valid Sublet of the
Premises or portion thereof, upon the terms and conditions and with the
proposed Subtenant set forth in the information furnished by Tenant to Landlord
pursuant to Section 18.3, subject, however, to the condition that fifty (50)
percent of any excess of the Subrent over the Rent and Additional Rent required
to be paid by Tenant hereunder, after first deducting the unamortized cost of
Tenant's Property, and Tenant Improvements, the cost of which was paid by
Tenant (based on the useful life of the same, determined in accordance with
generally accepted accounting principles, but not
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to exceed ten (10) years from the Date of Commencement). Tenant's expenses in
connection with such Sublet, including brokerage commissions; the cost of any
improvements required for the Subtenant; and the cost of carrying the Premises
during the period of vacancy directly caused by the construction of
improvements required by the Subtenant, shall be paid to Landlord when received
by Tenant as and with the Monthly Base Rent.
18.5 Required Sublease Provisions. Any and all transfer or
sublease agreements shall (1) contain such terms as are described under this
Section or as otherwise agreed by Landlord; (2) prohibit further assignments,
transfers, or subleases; (3) impose the same obligations and conditions on the
transferee or sublessee as are imposed on Tenant by this Lease (except as to
Rent and Term or as otherwise agreed by Landlord); (4) be expressly subject and
subordinate to each and every provision of this Lease; (5) have a term that
expires on or before the expiration of the Term of this Lease; and (6) provide
that Tenant and/or transferee or sublessee shall pay Landlord the amount of any
additional costs or expenses incurred by Landlord for repairs, maintenance or
otherwise as a result of any change in the nature of occupancy caused by the
transfer or sublease.
18.6 Fees For Review. Tenant shall pay to Landlord or
Landlord's designee, together with the notice described in Section 18.3, a
non-refundable fee as reimbursement for expenses incurred by Landlord in
connection with reviewing each such transaction (including any administrative
expenses for Landlord's property manager), in the amount of Five Hundred
Dollars ($500.00).
18.7 Proration. If a portion of the Premises is Sublet, the
pro rata share of the Rent attributable to such partial area of the Premises
shall be determined by Landlord by dividing the Rent payable by Tenant
hereunder by the total square footage of the Premises and multiplying the
resulting quotient (the per square foot rent) by the number of square feet of
the Premises which are sublet.
18.8 Executed Counterpart. No Sublet shall be valid nor shall
any Subtenant take possession of the Premises until an executed counterpart of
the Sublet agreement has been delivered to and acknowledged by Landlord.
18.9 Exempt Sublets. Notwithstanding the above, Landlord's prior
written consent shall not be required and Tenant shall have no obligation to
pay any excess Subrent to Landlord for an assignment of this Lease to a
subsidiary, affiliate or parent corporation of Tenant, or a corporation into
which Tenant merges or is consolidated or a purchaser of all or substantially
all of the assets of Tenant, if Tenant gives Landlord prior written notice of
the name of any such assignee, and if the assignee assumes, in writing, all of
Tenant's obligations under the Lease.
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For purposes of this Lease, sale of Tenant's capital stock through any public
exchange shall not be deemed an assignment, subletting, or any other transfer
of the Lease or the Premises. Landlord's consent shall not be required for an
assignment, pledge, mortgage or encumbrance of the Lease in connection with any
bona fide loan transaction which requires a pledge of substantially all of the
operating assets of Tenant, and/or of the business being conducted at the
Premises.
19. DEFAULT.
19.1 Tenant's Default. A default under this Lease by Tenant
shall exist if any of the following events shall occur:
19.1.1 If Tenant fails to pay Rent or any other sum required
to be paid hereunder when due and such failure continues for 5 days after
Tenant's actual receipt of written notice of delinquency; or
19.1.2 The failure by Tenant to observe or perform any of
the terms, covenants, conditions or provisions of this Lease to be observed or
performed by Tenant, if such failure is not cured within eleven (11) business
days after written notice thereof from Landlord to Tenant, provided, however,
that if the nature of Tenant's default is such that it cannot be cured solely
by payment of money and that more than eleven (11) business days are reasonably
required for its cure, then Tenant shall not be deemed to be in default if
Tenant commences such cure within the eleven (11) business day period and
thereafter diligently prosecutes such cure to completion; or
19.1.3 If Tenant assigns its assets for the benefit of its
creditors; or
19.1.4 If the sequestration or attachment of or execution on
any material part of Tenant's personal property essential to the conduct of
Tenant's business occurs, and Tenant fails to obtain a return or release of
such personal property within thirty (30) days thereafter, or prior to sale
pursuant to such sequestration, attachment or levy, whichever is earlier; or
19.1.5 If a court shall make or enter any decree or order
other than under the bankruptcy laws of the United States adjudging Tenant to
be insolvent; or approving as properly filed a petition seeking reorganization
of Tenant; or directing the winding up or liquidation of Tenant and such decree
or order shall have continued for a period of thirty (30) days.
19.2 Landlord's Remedies. Upon a default, Landlord shall have
the following remedies, in addition to all other rights and remedies provided
by law or otherwise provided in this Lease to which Landlord may resort
cumulatively or in the alternative:
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19.2.1 Landlord may continue this Lease in full force and
effect, and this Lease shall continue in full force and effect as long as
Landlord does not terminate this Lease and Landlord shall have the right to
collect Rent when due.
19.2.2 Landlord may terminate Tenant's right to possession
of the Premises at any time by giving written notice to that effect, and relet
the Premises or any part thereof. Tenant shall be liable immediately to
Landlord for all costs Landlord incurs in reletting the Premises or any part
thereof, including, without limitation, brokerage commissions, expenses of
cleaning and redecorating the Premises required by the reletting and like
costs. Reletting may be for a period shorter or longer than the remaining Term
of this Lease. No act by Landlord other than giving written notice to
Tenant shall terminate this Lease. Maintenance efforts to relet the Premises
or the appointment of a receiver on Landlord's initiative to protect Landlord's
interest under this Lease shall not constitute a termination of Tenant's right
to possession. On termination, Landlord has the right to remove all Tenant's
personal property and store same at Tenant's cost and to recover from Tenant as
damages:
(a) The worth at the time of award of
unpaid Rent and other sums due and payable which had been earned at the time of
termination; plus
(b) The worth at the time of award of
the amount by which the unpaid Rent and other sums due and payable which would
have been payable after termination until the time of award exceeds the amount
of such Rent loss that Tenant proves could have been reasonably avoided; plus
(c) The worth at the time of award of
the amount by which the unpaid Rent and other sums due and payable for the
balance of the Term after the time of award exceeds the amount of such Rent
loss that Tenant proves could be reasonably avoided; plus
(d) Any other amount necessary which is
to compensate Landlord for all the detriment proximately caused by Tenant's
failure to perform Tenant's obligations under this Lease or which, in the
ordinary course of things, would be likely to result therefrom, including,
without limitation, any costs or expenses incurred by Landlord (1) in retaking
possession of the Premises; (2) in maintaining, repairing, preserving,
restoring, replacing, cleaning, altering or rehabilitating the Premises or any
portion thereof, including such acts for reletting to a new tenant or tenants;
(3) for leasing commissions; or (4) for any other costs necessary or
appropriate to relet the Premises; plus
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(e) At Landlord's election, such other
amounts in addition to or in lieu of the foregoing as may be permitted from
time to time by the laws of the State of California.
The "worth at the time of award" of the amounts referred to in
Sections 19.2.2 (a) and 19.2.2 (b) is computed by allowing interest at the
maximum rate permitted by law on the unpaid rent and other sums due and payable
from the termination date through the date of award. The "worth at the
time of award" of the amount referred to in Section 19.2.2 (c) is computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award.
19.2.3 Landlord may, with or without terminating this Lease,
re-enter the Premises and remove all persons and property from the Premises;
such property may be removed and stored in a public warehouse or elsewhere at
the cost of and for the account of Tenant. No re-entry or taking possession
of the Premises by Landlord pursuant to this section shall be construed as an
election to terminate this Lease unless a written notice of such intention is
given to Tenant.
19.2.4 If Tenant fails to make any payment or perform any
other act on its part to be made or performed under this Lease, Landlord may,
but shall not be obligated to and without waiving or releasing Tenant from any
obligation of Tenant under this Lease after prior notice to Tenant, make such
payment or perform such other act to the extent Landlord may deem desirable,
and in connection therewith, pay expenses and employ counsel. All sums so paid
by Landlord, and all penalties, interest and costs in connection therewith,
shall be due and payable by Tenant on the next day after any such payment by
Landlord, together with interest thereon at the maximum rate permitted by law
from such date to the date of payment by Tenant to Landlord, plus collection
costs and attorneys fees. Landlord shall have the same rights and remedies for
the nonpayment thereof as in the case of default in the payment of Rent.
19.3 Landlord's Default. Landlord shall not be deemed to be
in default in the performance of any obligation under this Lease unless and
until it has failed to perform such obligation within eleven (11) business days
after receipt of written notice by Tenant to Landlord specifying such failure;
provided, however, that if the nature of Landlord's default is such that more
than eleven (11) business days are required for its cure, then Landlord shall
not be deemed to be in default if it commences such cure within the eleven (11)
business day period and thereafter diligently prosecutes such cure to
completion.
19.3 Tenant's Remedy. If, as a consequence of a default by
Landlord under this Lease, Tenant recovers a money judgment against Landlord,
such judgment shall be satisfied only out of the
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proceeds of sale received upon execution of such judgment and levied thereon
against the right, title and interest of Landlord in the Building or Project
and out of Rent or other income from the Building or Project receivable by
Landlord or out of consideration received by Landlord from the sale or other
disposition of all or any part of Landlord's right, title or interest in the
Building, and neither Landlord nor its agents, partners, officers or employees
shall be liable for any deficiency. Notwithstanding anything in this Lease
purporting to limit Tenant's recourse against Landlord to Landlord's interest
in the Building or Project, Tenant shall have recourse against Landlord, and
Landlord's general partners, for any loss incurred by Tenant as a result of or
in connection with (i) Landlord's failure to carry any insurance required by
the terms of this Lease, (ii) any noninsured indemnification obligation of
Landlord, or (iii) if Landlord has sold or transferred its interest in the
Project or any portion thereof, or the Lease, then (a) the failure of any
assignee or transferee to assume liability for defaults or obligations of
Landlord accruing prior to any such sale or transfer, or (b) if the assignee's
or transferee's net worth is inadequate in light of such party's obligations,
as Landlord under this Lease. As an additional remedy, Tenant may, but shall
not be obligated to and without waiving or releasing Landlord from any
obligation of Landlord under this Lease or with respect to the Project or any
portion, thereof, after prior notice to Landlord pay or perform any act
required to be taken by Landlord in connection therewith which Landlord has
failed to pay or perform, and either (i) demand reimbursement from Landlord of
the cost thereof, with interest thereon at the maximum rate permitted by law
from the date of such expenditure to the date of repayment, or (ii) reduce the
amount of any letter of credit furnished by Tenant pursuant to Section 1.14 by
the amount owing, together with interest thereon at the maximum rate permitted
by law from the date of such expenditure to the date of such reduction;
provided however, if such reduction is not permitted under the terms of any
letter of credit furnished by Tenant, interest on the amount owing shall accrue
in accordance with the foregoing until the date Tenant furnished to Landlord a
substitute letter of credit for any remaining balance of the security deposit
and Landlord returns the outstanding letter of credit to Tenant.
19.4 MORTGAGEE PROTECTION. If Landlord defaults under this Lease,
Tenant will notify any beneficiary of a deed of trust or mortgagee of a
mortgage covering the Building or the project whose name and address has been
furnished to Tenant, upon written request by Tenant, which request is hereby
made by Tenant, and offer such beneficiary or mortgagee a reasonable
opportunity to cure the default, including time to obtain possession of the
Building or the Project by power of sale or a judicial foreclosure, if such
should prove necessary to effect a cure. Tenant shall not be obligated to
provide any beneficiary or mortgagee of Landlord with any additional period of
time to cure
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any default on the part of Landlord beyond the time provided in Section 19.3,
where such default is causing a threat of imminent serious damage or harm to
Tenant, its employees, agents, contractors or invitees, or to the Premises or
any property therein.
20. SUBORDINATION, ESTOPPEL AND ATTORNMENT.
20.1 Subordination. This Lease is subject and subordinate to
ground and underlying leases, mortgages and deeds of trust (collectively
"Encumbrances") which may now affect the Premises, the Building, or the
Project, and to all renewals, modifications, consolidations, replacements and
extensions thereof; provided, however, if the holder or holders ("Holder") of
any such Encumbrances shall require this Lease to be prior and superior
thereto, within ten (10) days after written request from Landlord, Tenant shall
execute, have acknowledged and deliver any and all documents or instruments, in
the form presented to Tenant, which Landlord or Holder deems necessary or
desirable for such purposes. Landlord shall have the right to cause this Lease
to be and become and remain subject and subordinate to any and all Encumbrances
which are now or may hereafter be executed covering the Premises, the Building,
or the Project, or any renewals, modifications, consolidations, replacements or
extensions thereof, for the full amount of all advances made or to be made
thereunder, together with interest thereon and subject to all the terms and
provisions thereof; provided only, that in the event of termination of any such
lease or upon the foreclosure of any such mortgage or deed of trust, Holder
agrees to recognize Tenant's rights under this Lease as long as Tenant is not
then in default and continues to pay the Rent and observe and perform all the
provisions of this Lease. Within ten (10) days after Landlord's written
request, Tenant shall execute any and all the documents required by Landlord or
the Holder to make this Lease subordinate to any lien of the encumbrances
provided such documents state that the Holder agrees in the event of
termination or foreclosure to recognize Tenant's rights under this Lease as
long as Tenant is not in default. If Tenant fails to do so, it shall be deemed
that this Lease is so subordinated.
20.2 Estoppel Certificates. Tenant shall execute and deliver to
Landlord any documents, including estoppel certificates in the form prepared by
Landlord (1) certifying that this Lease is unmodified and in full force and
effect or, if modified, stating the nature of such modification and certifying
that this Lease, as so modified, is in full force and effect, and the date to
which the Rent and other charges are paid in advance, if any; and (2)
acknowledging that there are not, to Tenant's knowledge, any uncured defaults
on the part of Landlord, or, if there are uncured defaults on the part of the
Landlord, stating the nature of such uncured defaults; and (3) evidencing the
status of the Lease as may be required either by a lender making a loan to
Landlord to be
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secured by deed of trust or mortgage covering the Building or the Project or a
purchaser of the Building or the Project from Landlord. Tenant's failure to
deliver an estoppel certificate within fifteen (15) days after delivery of
Landlord's written request therefor shall be conclusive upon Tenant (1) that
this Lease is in full force and effect, without modification except as may be
represented by Landlord; (2) that there are no uncured defaults in Landlord's
performance; and (3) that no Rent has been paid in advance.
20.3 Attornment. Tenant shall, if requested, attorn to the
purchaser of the Building or Project, and recognize such purchaser as Landlord
under this Lease in the event of (1) foreclosure proceeding or grant of deed in
lieu of foreclosure; (2) the exercise of the power of sale under any mortgage
or deed of trust, made by Landlord or Landlord's successors or assigns, which
encumbers the Premises, or any part thereof; (3) the termination of a ground
lease; or (4) a sale of the Building or Project.
21. NOTICES.
Any notice or demand required or desired to be given under this Lease
shall be in writing and shall be personally served, or in lieu of personal
service, may be given by mail. If given by mail, such notice shall be deemed
to have been given seventy-two (72) hours after deposit in the United States
mail, registered or certified, postage prepaid, and addressed to the party to
be served. At the date of execution of this Lease, the addresses of Landlord
and Tenant are as set forth in Section 1.16 of this Lease. After the
Commencement Date, the address of Tenant shall be the address of the Premises.
Either party may change its address by giving written notice of same in
accordance with this Section.
22. SURRENDER OF THE PREMISES.
On expiration or termination of this Lease, Tenant shall
surrender to Landlord the Premises and all Tenant Improvements in good
condition and repair (ordinary wear and tear, damage by acts of God,
casualties, condemnation and Hazardous Materials, other than Hazardous
Materials stored, used or disposed of by Tenant in or about the Premises,
excepted), Tenant, at Tenant's sole election, may remove any or all of Tenant's
Property as defined in Section 13.1, or may leave any or all of Tenant's
Property within the Premises. As used in this Lease, "Tenant Improvements"
shall mean: (a) all materials installed by Landlord, the cost of which
materials was included within the Tenant Improvement Costs as provided in
Exhibit B (regardless of whether such cost was borne by Landlord or Tenant);
but Tenant Improvements shall not include materials (whether or not installed
by Landlord or the TI Contractor) installed under Exhibit B, but supplied by
Tenant, the cost of which was borne by Tenant over and above the Tenant
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Improvement Costs; and (b) that portion of any subsequent alterations,
additions or improvements that have been designated as Tenant Improvements
pursuant to the provisions of Section 13.1. Tenant agrees that it shall, prior
to the expiration or termination of this Lease, at Tenant's sole cost and
expense promptly repair any damage to the Premises resulting from the removal
of Tenant's Property. Tenant shall not be required or permitted to remove any
of the Tenant Improvements, unless Landlord and Tenant otherwise agree in
writing. Landlord may retain or dispose of, in any manner, any Tenant's
Property that Tenant does not remove from the Premises on expiration or
termination of the Term as allowed or required by this Lease. Title to any
such Tenant's Property that Landlord so elects to retain, or dispose of, shall
vest in Landlord. Tenant waives all claims against Landlord for any damage or
loss to Tenant arising out of Landlord's retention or disposition of any such
Tenant's Property. Tenant shall not be liable to Landlord for Landlord's cost
of storing, removing and disposing of any such Tenant's Property. If Tenant
fails to surrender the Premises to Landlord on expiration or termination of the
Lease as required by this Section, Tenant shall indemnify, defend and hold
Landlord harmless from all damages, loss, cost and expense (including
attorneys' fees) arising out of or in connection with Tenant's failure to do
so, including, without limitation, any claims made by a succeeding tenant
resulting from Tenant's failure to surrender the Premises.
23. COST OF SUIT.
If either party brings action for relief against the other,
declaratory or otherwise, arising out of this Lease, including any suit by
Landlord for the recovery of Rent or possession of the Premises, the losing
party shall pay the successful party its costs incurred in connection with and
in preparation for said action, including its attorneys' fees (which costs
shall be deemed to have accrued on the commencement of such action and shall be
paid whether or not such action is prosecuted to judgment). If Landlord,
without fault on Landlord's part, is made a party to any action instituted by
any third party against Tenant, or by or against any person holding under or
using the Premises by License of Tenant, or for the foreclosure of any lien for
labor or material furnished to or for Tenant or of any such other person, or
otherwise arising out of or resulting from any action or omission of Tenant or
of any such other person, Tenant shall indemnify, defend and hold Landlord
harmless from any judgment rendered in connection therewith and all costs and
expenses (including attorneys' fees) incurred by Landlord in connection with
such action.
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24. TRANSFER OF THE BUILDING BY LANDLORD.
In the event of any conveyance of the Building or the Project and
assignment by Landlord of this Lease, Landlord shall be entirely released from
all liability under any and all of its covenants and obligations contained in
from this Lease occurring after the date of such conveyance and assignment
provided such transferee assumes Landlord's obligations under this Lease.
25. AIRPORT NOISE.
Tenant acknowledges that Landlord has informed Tenant that noise
produced by aircraft using Metropolitan Oakland International Airport
("Airport") which adjoins the Business Park may be heard at the Building of
which the Premises form a part. Tenant further acknowledges that Landlord has
informed Tenant that the real property on which the Building and the Premises
are located is subject to a recorded Noise Easement and Release whereby the
owners of the Airport are released from any claims or law suits for damages by
any persons using the property, including Tenant, with respect to Airport
operations, including aircraft related noise. Tenant shall indemnify and hold
Landlord harmless from any and all claims, damages, causes of action or
liability, including legal fees and costs, arising from or in any way related
to aircraft-related noise perceived by Tenant, its employees, agents or
invitees at the Premises or in any way connected with the Premises.
26. GENERAL.
26.1 Captions. With the exception of Section 1, the captions and
headings used in this Lease are for the purpose of convenience only and shall
not be construed to limit or extend the meaning of any part of this Lease.
26.2 Executed Copy. Any fully executed copy of this Lease shall be
deemed an original for all purposes.
26.3 Time. Time is of the essence for the performance of each
term, condition and covenant of this Lease.
26.4 Separability. If one or more of the provisions contained
herein' except for the payment of Rent, is for any reason held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provision of this Lease, but this
Lease shall be construed as if such invalid, illegal or unenforceable provision
had not been contained herein.
26.5 Choice Of Law. This Lease shall be construed and enforced in
accordance with the laws of the State of California. The language in all parts
of this Lease shall in all cases be
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construed as a whole according to its fair meaning and not strictly for or
against either Landlord or Tenant.
26.6 Gender; Singular, Plural. When the context of this Lease
requires, the neuter gender includes the masculine, the feminine, a partnership
or corporation or joint venture, and the singular includes the plural.
26.7 Binding Effect. The covenants and agreement contained in this
Lease shall be binding on the parties hereto and on their respective successors
and assigns to the extent this Lease is assignable.
26.8 Waiver. The waiver by Landlord or Tenant of any breach of any
term, condition or covenant of this Lease shall not be deemed to be a waiver of
such provision or any subsequent breach of the same or any other term,
condition or covenant of this Lease. The subsequent acceptance of Rent
hereunder by Landlord shall not be deemed to be a waiver of any preceding
breach at the time of acceptance of such payment. No covenant, term or
condition of this Lease shall be deemed to have been waived by Landlord or
Tenant unless such waiver is in writing signed by Landlord or Tenant.
26.9 Entire Agreement. This Lease is the entire agreement between
the parties, and there are no agreements or representations between the parties
except as expressed herein. Except as otherwise provided herein, no subsequent
change or addition to this Lease shall be binding unless in writing and signed
by the parties hereto.
26.10 Authority. If Tenant or Landlord is a corporation or a
partnership, Tenant or Landlord as the case may be, represents and warrants
that each individual executing this Lease on behalf of Landlord or Tenant, as
the case may be, is duly authorized to execute and deliver this Lease on behalf
of said entity in accordance with its corporate bylaws, statement of
partnership or certificate of limited partnership, as the case may be, and that
this Lease is binding upon said entity in accordance with its terms. Landlord,
at its option, may require a copy of such written authorization to enter into
this Lease. The failure of Tenant to deliver the same to Landlord within seven
(7) days of Landlord's request therefore shall be deemed a default under this
Lease.
26.11 Recording. Neither party shall record this Lease nor a short
form memorandum thereof.
26.12 Force Majeure. Any construction, repairs or rebuilding of any
building, improvement or other structure herein shall be excused or postponed
for the duration of delay occasioned by the other party (including, without
limitation, delays caused
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by change orders requested or required by Tenant and delays in Tenant's
approval of Plans and Specifications), strikes, threats of strikes, blackouts,
war, threats of war, acts of God, violent action of the elements, fire, act or
regulations of or obtaining of any necessary permits or approvals from any
governmental authority, impossibility of obtaining materials or energy,
earthquakes, or other matters beyond the reasonable control of the obligated
party.
26.13 Holding Over. If Tenant remains in possession of all or any
part of the Premises after the expiration of the Term, with or without the
express or implied consent of Landlord, such tenancy shall be from
month-to-month only and not a renewal hereof or any extension for any further
term, and in such case, Monthly Base Rent shall be payable at a rate equal to
one hundred fifty percent (150%) of the Monthly Base Rent in effect at the time
of expiration, and such month-to-month tenancy shall be subject to every other
term, covenant and agreement of this Lease.
26.14 Quiet Enjoyment. Landlord covenants that Tenant, upon
performing the terms, conditions and covenants of this Lease, shall have quiet
and peaceful possession of the Premises as against any person claiming the same
by, through or under Landlord.
27. ACCEPTANCE.
Delivery of this Lease, duly executed by Tenant, constitutes an offer
to lease the Premises, and under no circumstances shall such delivery be deemed
to create an option or reservation to lease the Premises for the benefit of
Tenant. This Lease shall only become effective and binding upon approval by
Holder, execution hereof by Landlord and delivery of a signed copy to Tenant.
28. LANDLORD'S CONDITION.
-Deleted-
29. BROKERS.
Landlord and Tenant warrant and represent, each to the other, that they
have had no dealings with any real estate broker or agent in connection with
the negotiation of this Lease except for the broker(s) named in Section 1.17
and that they know of no other real estate broker or agent who is or might be
entitled to a commission in connection with this Lease. Tenant agrees to
defend, indemnify and hold harmless Landlord and its agents, partners, officers
and employees from and against any and all liabilities or expenses, including
attorneys' fees and costs, arising out of or in connection with claims made by
any other
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broker or individual for commissions or fees resulting from Tenant's execution
of this Lease.
30. EXHIBITS.
All exhibits, amendments, riders and addendums attached hereto are hereby
incorporated within this Lease.
EXHIBIT A The Premises and Building Plan
EXHIBIT B Work Letter Agreement
EXHIBIT C Commencement Date Memorandum
EXHIBIT D Rules & Regulations
EXHIBIT E Tenant Sign Design Guidelines
EXHIBIT F List of Materials
EXHIBIT G Disbursement Agreement
31. APPROVALS.
Whenever this Lease requires an approval, consent, designation,
determination or judgment by either Landlord or Tenant, such approval, consent,
designation, determination or judgment shall not unreasonably be withheld or
delayed, and in exercising any right or remedy hereunder, each party shall at
all times act reasonably and in good faith.
32. REASONABLE EXPENDITURES.
Tenant has requested and Landlord has agreed to reimburse Tenant for
$40,000 for previously incurred legal and architectural expenses and for up to
an additional $10,000 in anticipated future expenses related to this Lease. As
to the $40,000 in expenses previously incurred, $20,000 shall be paid upon the
receipt by Landlord of the first construction draw request pursuant to the Work
Letter and the remaining $20,000 shall be paid upon Tenant taking occupancy of
the Premises. As to the prospective $10,000, said amount shall be available to
reimburse Tenant for its future legal expenses related to the consummation of
the Lease, upon presentation of copies of invoices received by Tenant from its
attorneys detailing such legal expenses.
Such expenditures, and any other expenditure by a party permitted or
required under this Lease, for which such party is entitled to demand and does
demand reimbursement from the other party, shall be limited to the fair market
value of the goods and services involved, shall be reasonably incurred, and
shall be
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substantiated by documentary evidence available for inspection and review by
the other party or its representative during normal business hours.
33. TITLE INSURANCE.
Tenant shall have the option to terminate this Lease if, despite
having used its best efforts, it has not obtained at its expense a leasehold
title insurance policy reasonably acceptable to Tenant on or before October 31,
1992.
This Lease is effective as of the date the last signatory necessary to execute
the Lease shall have executed this Lease.
LANDLORD TENANT
COMMERCIAL CENTER BANK, URNOTECH CALYPTE
a California corporation BIOMEDICAL CORPORATION,
a California corporation
By: [Signature] By: /s/ David J. Robison
----------------------------- -----------------------------
Its: Sr. V.P. Its: President and Chief
------------------- Executive Officer
--------------------
By: /s/ DON BRUNER
-----------------------------
Its: Vice President
-------------------
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EXHIBIT A
[DIAGRAM OF TECHNOLOGY CENTER AT HARBOR BAY BUS. & RESEARCH PARK]
48
EXHIBIT B
WORK LETTER
This Work Letter (the "Agreement") is made part of that Lease dated
for reference purposes as of , 1992 (the "Lease") by and between
Commercial Center Bank, a California corporation ("Landlord"), and Urnotech
Calypte Biomedical Corporation, a California corporation ("Tenant"). Landlord
and Tenant agree that the following terms are part of the Lease:
1. Purpose Of Improvement Agreement: The purpose of this
Agreement is to set forth the rights and obligations of Landlord and Tenant
with respect to the construction of the Tenant Improvements and Tenant's Work
(as defined in paragraph 8).
2. Definitions: As used in this Agreement, the following terms
shall have the following meanings, and terms which are not defined below, but
which are defined in the Lease and used in this Agreement, shall have the
meanings ascribed to them by the Lease:
A. Architect: The term "Architect" shall mean the
architect selected by Tenant and approved by Landlord, which architect shall be
retained by Tenant for architectural, engineering, and construction management
and consultant purposes in connection with the Premises.
B. Code-Mandated Work: The term "Code-Mandated Work"
shall mean all changes, repairs and upgrades to the Building, Common Area or
Project required to comply with existing applicable Laws, including seismic,
energy, life safety and handicapped access Laws, which shall be performed at
Landlord's sole cost, except for any improvements to the Premises (which for
the purpose of this definition of "Code-Mandated Work" shall include those
portions of the Building enclosing the Premises) required because of the
construction of the Tenant Improvements.
C. Final Cost Estimate: The term "Final Cost Estimate"
shall mean the estimate of the total Tenant Improvements Costs prepared and
approved by Landlord and Tenant in accordance with this Agreement, and based
upon the Final Tenant Improvement Plans (as defined in paragraph 4C), as
modified by change orders issued in accordance with this Agreement.
D. Preliminary Cost Estimate: The term "Preliminary
Cost Estimate" shall mean an estimate of Tenant Improvement Costs prepared and
approved by Landlord and Tenant in accordance with this Agreement, and based
upon initial or revised preliminary plans and specifications for the Tenant
Improvements.
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49
E. Substantial Completion and Substantially Complete:
The terms "Substantial Completion" and "Substantially Complete" shall each mean
the date when all of the following have occurred with respect to the Tenant
Improvements: (i) the construction of the Tenant Improvements has been
substantially completed in accordance with the requirements of this Lease; (ii)
the Architect shall have executed a certificate or statement representing that
the Tenant Improvements have been substantially completed in accordance with
the plans and specifications therefor; (iii) all utilities to be supplied to
the Premises are hooked up and available for use by Tenant; (iv) the Building
Department of the City of Alameda has completed its final inspection of the
Tenant Improvements and has "signed off" the building inspection card approving
such work as complete; and (v) a temporary Certificate of occupancy has been
issued and the Premises may be legally occupied. Provided, however, if one or
more of the foregoing conditions cannot be satisfied because of Tenant's
failure to obtain the approval by the Alameda County Health Department of
Tenant's Hazardous Materials Management Plan, and such failure results in the
date Substantial Completion otherwise would have been achieved being delayed by
more than thirty (30) days, then each such condition shall be deemed to have
been satisfied as of the date it would otherwise have been satisfied except for
such failure, so long as Landlord demonstrates to Tenant's reasonable
satisfaction the date each such condition would have been satisfied except for
such failure.
F. Tenant Improvement Allowance: The term "Tenant
Improvement Allowance" shall mean the sum of Eight Hundred Nine Thousand Three
Hundred Ninety-Three Dollars ($809,393) ($39.85 per square foot of rentable
area in the Premises).
G. Tenant Improvements: The term "Tenant Improvements"
shall mean all materials, improvements and fixtures installed in the Premises
to the extent such improvements are not Code-Mandated Work and are specified on
the Final Tenant Improvement Plans (as hereinafter defined), but excluding from
the definition of "Tenant Improvements" materials installed by Landlord or TI
Contractor pursuant to this Agreement but supplied by Tenant and the cost of
which was borne by Tenant over and above the Tenant Improvement Costs.
H. Tenant Improvement Costs: The term "Tenant
Improvement Costs" shall mean the lesser of (a) the Final Cost Estimate, or (b)
the total of the following: (i) payments to the TI Contractor (as defined in
paragraph 5A) and its subcontractors for labor and materials furnished for
construction of the Tenant Improvements pursuant to any construction contract
for the Tenant Improvements which is entered into pursuant to the terms of
this. Agreement; (ii) reasonable fees paid by Landlord to engineers and other
construction professionals (other than employees of Landlord) for services
required in connection with the design and construc-
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50
tion of the Tenant Improvements; (iii) utility connection charges; (iv) the
amounts paid to governmental authorities or agencies for inspections and
issuance of building permits and approvals for the Tenant Improvements (but not
that portion of such amounts applicable to, or based on the value of the
Building shell). In no event shall Tenant Improvement Costs include (i)
charges and expenses for changes to the Final Tenant Improvement Plans, which
have not been approved by Tenant; (ii) wages, labor and overhead for overtime
and premium time, unless approved in advance by Tenant in writing (and then not
to exceed the amount so approved by Tenant); (iii) additional costs and
expenses incurred on account of any contractor's or subcontractor's default or
construction defects, the negligent act or omission or willful misconduct of
Landlord or its agents or employees, or Landlord's breach of the Lease; (iv)
principal, interest and fees for construction or permanent financing; (v)
management or other general overhead costs incurred by Landlord; (vi) bond
premiums; (vii) costs for which Landlord has a right of reimbursement from
others (including, without limitation, insurers and warrantors); (viii) costs
incurred as a result of delays caused by the acts or omissions of Landlord or
its employees, agents, contractors or subcontractors; (ix) any cost or expense
which is not required to be incurred in order to complete construction of the
Tenant Improvements; (x) any cost associated with a casualty or act of God; or
(xi) Code-Mandated Work. All of the costs and expenses described in the
preceding sentence shall be the sole obligation of Landlord. The total amount
to be included in Tenant Improvement Costs for profit and overhead charged by
the TI Contractor shall not exceed in the aggregate eight (8) percent (8%) of
the lesser of (a) the cost of labor and materials incorporated in the Tenant
Improvements under the construction contract entered into by Landlord and TI
Contractor pursuant to this Agreement, or (b) the Final Cost Estimate approved
by Tenant pursuant to this Agreement.
3. Schedule of Performance: Landlord and Tenant desire to cause
the Tenant Improvements to be Substantially Completed by the November 15, 1993
(the "Anticipated Commencement Date"). The Anticipated Commencement Date is
based upon information gathered and estimates made by Landlord. once Tenant's
Requirements (as defined in paragraph 4A) are established, the Anticipated
Commencement Date may be subject to modification based upon Architect's input,
and thereafter the "Anticipated Commencement Date" shall be deemed to be the
date recommended by Architect and approved in writing by Landlord and Tenant.
Achieving Substantial Completion of the Tenant Improvements by the Anticipated
Commencement Date requires that certain objectives be met within certain time
periods. Set forth in this paragraph is a schedule of certain critical dates
relating to Landlord's and Tenant's respective obligations regarding the
construction of the Tenant Improvements (the "Schedule of Performance") that
must be adhered to in order to achieve Substantial Completion of the Tenant
B-3
51
Improvements by the Anticipated Commencement Date. Landlord and Tenant agree
that the following Schedule of Performance may be subject to modification based
upon Architect's input after preparation of the Preliminary Tenant Improvement
Plans (as defined in paragraph 4A), and that the Schedule of Performance shall
be deemed amended to incorporate the time periods recommended by Architect and
approved in writing by Landlord and Tenant. Landlord and Tenant shall each be
obligated to use reasonable efforts to perform their respective obligations
within the time periods set forth in the Schedule of Performance (as the same
may be modified) and elsewhere in this Agreement; provided, however, that the
time periods for such performance shall be extended by events constituting
causes beyond the reasonable control of the party obligated to perform. The
parties acknowledge that the Schedule of Performance is only an estimate of the
time needed to complete certain stages of the construction process, and the
failure of either party to accomplish any step in the process set forth in the
Schedule of Performance shall not constitute a default by either party unless
such failure constitutes a breach of the obligation of a party to use
reasonable efforts to perform its obligations within the time periods set forth
in the Schedule of Performance and elsewhere in this Agreement. Tenant shall
be responsible for the timeliness of Architect's performance, and Landlord
shall be responsible for the timeliness of TI Contractor's performance. Tenant
shall use reasonable efforts to cause Architect to perform its obligations
within the time periods set forth in the Schedule of Performance and in
accordance with the provisions of this Agreement.
Action Responsible
Items Due Date Party
----- -------- -----
A. Delivery to Within thirty (30) days Tenant
Landlord and after satisfaction of the
Architect of condition referred to above
Tenant's Preliminary
Improvement
Requirements
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52
Action Responsible
Items Due Date Party
----- -------- -----
B. Meeting(s) Within seven (7) days after Landlord,
with Tenant, delivery of Tenant's Tenant and
Landlord and Preliminary Improvement Architect
Architect to Requirements
Develop Preliminary
Space Plan based on
Tenant's Requirements
C. Delivery to Within fourteen (14) days Architect
Landlord of after the conclusion of the
Preliminary Preliminary Space Plan
Tenant Meeting(s)
Improvement
Plans
D. Approval by Within seven (7) days after Landlord
Landlord of Landlord receives
Preliminary Preliminary Tenant
Tenant Improvements Plans
Improvement
Plans
E. Delivery to Within fourteen (14) days Landlord
Tenant of after approval by Landlord
Preliminary of Preliminary Tenant
Cost Estimate Improvements Plans
F. Approval by Within fourteen (14) days Tenant
Tenant of after Tenant receives
Preliminary Preliminary Cost Estimate
Cost Estimate
G. Delivery to Within forty-two (42) days Architect
Landlord of after approval of Preliminary
Working Cost Estimate
Drawings
H. Approval by Within fourteen (14) days Tenant and
Landlord of after Landlord receives Landlord
Final Tenant working drawings
Improvement
Plans
I. Delivery to Within twenty-one (21) days Landlord
Tenant of after approval by Landlord
Final Cost of Final Tenant Improvement
Estimate Plans
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Action Responsible
Items Due Date Party
----- -------- -----
J. Approval by Within twenty-one (21) days Tenant
Tenant of after Tenant receives Final
Final Cost Cost Estimate
Estimate or
notification
to Landlord by
Tenant of
requirement to
rebid portions
of the Tenant
Improvement
work
K. Landlord Within fourteen (14) days Landlord
rebids Tenant after Tenant requests rebid
Improvement
work, if
required and
submits
revised Final
Cost Estimate
to Tenant
L. Apply for Upon approval of Final Landlord
Building Tenant Improvement Plans
Permit and Final Cost Estimate or,
if applicable, the revised
Final Cost Estimate
M. Obtain Within fifty-six (56) days Landlord,
building after applying for Building Tenant and
permit for Permit Architect
Tenant
Improvements
N. Commencement Upon issuance of the Landlord
of construction building permit
of Tenant
Improvements
O. Substantial Within one hundred forty- Landlord
Completion of seven (147) days after the
Tenant commencement of
Improvements construction of the Tenant
Improvements
4. Construction of Tenant Improvements: Landlord shall construct
the Tenant Improvements in accordance with the following:
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54
A. Development and Approval of Preliminary Tenant
Improvement Plans: On or before the due date specified in the Schedule of
Performance, Tenant shall furnish to Landlord and Architect preliminary
information concerning Tenant's requirements for the Tenant Improvements, and
shall first meet with Landlord and Architect at the time specified in the
Schedule of Performance to establish preliminary room sizes and locations;
partition locations, sizes and type; door locations, size and swings; room
dimensions; location of electrical and telephone outlets; location and extent
of floor loading and floor openings; any special air conditioning, plumbing, or
electrical needs in excess of Landlord's standards for the Building; location
and description of cabinet work and millwork; and any architectural detailing,
lighting, wall, ceiling or floor covering requirements in excess of Landlord's
standards for the Building ("Tenant's Requirements") and to develop a
preliminary space plan based on Tenant's Requirements. On or before the due
date specified in the Schedule of Performance, Architect shall prepare and
deliver to Landlord for its review and approval preliminary plans for the
Tenant Improvements (the "Preliminary Tenant Improvement Plans"). On or before
the due date specified in the Schedule of Performance, Landlord shall either
approve the Preliminary Tenant Improvement Plans or notify Tenant and Architect
in writing of its specific objections to the Preliminary Tenant Improvement
Plans and its proposed modifications to such plans. If Landlord does not
approve the Preliminary Tenant Improvement Plans, the parties (and Architect if
Tenant so elects) shall meet and confer to develop Preliminary Tenant
Improvement Plans that are acceptable to both Landlord and Tenant within five
(5) business days after Landlord has notified Tenant of its objections.
B. Preliminary Cost Estimate: On or before the due date
specified in the Schedule of Performance, Landlord shall prepare and deliver to
Tenant a Preliminary Cost Estimate. On or before the due date specified in the
Schedule of Performance, Tenant shall either approve such cost estimate or
notify Landlord in writing of its specific objections to the cost estimate, or
its proposed modifications to the Preliminary Tenant Improvement Plans to
reduce costs. If Tenant so objects or proposes modifications, the parties (and
Architect if Tenant so elects) shall meet and confer to develop a Preliminary
Cost Estimate or changes to the Preliminary Tenant Improvement Plans to reduce
costs that is/are acceptable to both Landlord and Tenant within five (5)
business days after Tenant has notified Landlord of its objections and to
incorporate such resolution into the Preliminary Tenant Improvement Plans
and/or Preliminary Cost Estimate.
C. Development and Approval of Final Tenant Plans: Once
the Preliminary Tenant Improvement Plans have been approved by Landlord and
Tenant (including all changes made to reduce costs or to resolve Landlord's
objections approved by Landlord and Tenant
B-7
55
pursuant to subparaqraphs 4A or 4B), Architect shall complete and submit to
Landlord for its approval final working drawings for the Tenant Improvements by
the due date specified in the Schedule of Performance. Landlord shall approve
the final working drawings for the Tenant Improvements or notify Tenant and
Architect in writing of its specific objections and proposed modifications by
the due date specified in the Schedule of Performance. If Landlord does not
approve the final working drawings for the Tenant Improvements, the parties
(and Architect if Tenant so elects) shall meet and confer to reach agreement
upon final working drawings for the Tenant Improvements within five (5)
business days after Landlord has notified Tenant and Architect of its
objections and to incorporate such resolution into the Final Tenant Improvement
Plans. The final working drawings so approved by Landlord and Tenant
(including all changes made to reduce costs pursuant to subparagraph D or to
resolve Landlord's objections approved by Landlord and Tenant) are referred to
herein as the "Final Tenant Improvement Plans".
D. Final Cost Estimate: on or before the due date
specified in the Schedule of Performance, Landlord shall prepare and deliver to
Tenant the Final Cost Estimate. If Landlord so elects, Landlord may include in
the Final Cost Estimate any costs for overtime and/or premium time that
Landlord reasonably believes shall be required in order to complete the Tenant
Improvements on or before the due date specified in the Schedule of
Performance, and if Landlord does so, it shall specify in reasonable detail the
reasons why such costs are required. On or before the due date specified in the
Schedule of Performance, Tenant shall either approve such cost estimate and the
amount of overtime and/or premium time specified therein by Landlord, or notify
Landlord in writing of its specific objections to the cost estimate and/or the
amount of overtime and/or premium time, or its proposed modifications to the
Final Tenant Improvement Plans to reduce costs, or to the Schedule of
Performance to eliminate the need for overtime and/or premium time. If Tenant
so objects or proposes modifications, the parties shall meet and confer to
develop the Final Cost Estimate or changes to the Final Tenant Improvement
Plans to reduce costs or changes to the Schedule of Performance to eliminate
the need for overtime and/or premium time, that is/are acceptable to both
Landlord and Tenant, within five (5) business days after Tenant has notified
Landlord of its objections and to incorporate such resolution into the Final
Tenant Improvement Plans, Schedule of Performance and/or Final Cost Estimate.
If Tenant believes that the Final Cost Estimate is incorrect because of a
substantial increase in a particular subcontractor's bid, or the addition of a
new material item of work, or a new subcontract, it may require that all or any
portion of the work to be performed by the applicable subcontractors be
resubmitted for competitive bid, by notice to Landlord specifically identifying
those items to be rebid and Tenant's objective in requiring such rebid.
B-8
56
E. Building Permit: As soon as the Final Tenant
Improvement Plans and Final Cost Estimate have been approved by Landlord and
Tenant, Landlord shall apply for a building permit for the Tenant Improvements,
and shall diligently prosecute to completion such approval process.
F. Commencement of Tenant Improvements: On or before the
due date specified in the Schedule of Performance, Landlord shall commence
construction of the Tenant Improvements and shall diligently prosecute such
construction to completion, using all reasonable efforts to achieve Substantial
Completion of the Tenant Improvements by the Anticipated Commencement Date.
5. Construction Contract: The following shall govern the manner
in which the construction contract shall be let by Landlord for the
construction of the Tenant Improvements:
A. Landlord shall engage as general contractor to
construct the Tenant Improvements a contractor selected by Landlord and
approved in writing by Tenant (the "TI Contractor"). Prior to the execution of
a construction contract with the TI Contractor, Landlord shall furnish the
proposed contract to Tenant, for its written approval. The construction
contract shall require either: (i) the TI Contractor to provide a payment and
performance bond for construction of the Tenant Improvements in accordance with
the Final Cost Estimate; or (ii) the TI Contractor to obtain from each
subcontractor furnishing labor under such contract a payment and performance
bond for construction of that portion of the Tenant Improvements covered by
each such subcontract (or by all such subcontractors performing a material
portion of the work, subject to the reasonable approval of Tenant and
Landlord's construction lender), in which case the TI Contractor shall provide
a completion guaranty (in form and substance reasonably satisfactory to Tenant
and Landlord's construction lender) with respect to the TI Contractor's
performance under the TI Contract to the extent not covered by the bonds
provided by subcontractors.
B. All subcontractors for the Tenant Improvements shall
be chosen by a competitive bid process where (i) Tenant shall have the right to
approve subcontractors who bid on specific parts of the job, (ii) the
subcontract shall be awarded to the lowest responsible bidder unless Landlord
and Tenant otherwise agree, and (iii) Tenant shall have the right to cause a
subcontract to be rebid if Tenant does not approve the low bid. Tenant shall
have a right to review and approve all bid documents prior to submission to
subcontractors and all subcontractors' bids.
6. General Design and construction obligations: The following
shall govern the construction of the Tenant Improvements:
B-9
57
A. During the course of construction, Landlord shall
arrange for all inspections of the progress of the construction of the Tenant
Improvements by all authorities having jurisdiction over such construction
required in order to obtain all necessary approvals and certificates with
respect to such construction. Landlord shall make available to Tenant reports'
of all such inspections and the status of such approvals and certificates as
well as copies thereof upon request.
B. Unless otherwise specifically provided in this
Agreement, any approval, consent, designation, determination or judgement by
either Landlord or Tenant hereunder shall not be unreasonably withheld or
delayed.
C. At all times subsequent to the commencement of
construction, Landlord shall maintain (i) insurance satisfying the requirements
of Section 8.3 of the Lease and additionally (A) providing coverage in an
amount that includes the Final Cost Estimate, and (B) designating Tenant as a
named insured, and (ii) comprehensive general liability insurance satisfying
the requirements of Section 8.2.1 of the Lease, and providing that Tenant is an
additional insured. Tenant may be removed as a named insured under paragraph
6.C(i) (B) and as an additional insured under paragraph 6.C(ii) upon the later
of: (a) the Commencement Date; or (b) the date a temporary Certificate of
Occupancy has been issued and the Premises may be legally occupied. The
insurance policies (i) shall be in a form reasonably satisfactory to Tenant,
(ii) shall be carried with a company reasonably acceptable to Tenant, (iii)
shall provide that each such policy shall not be subject to cancellation or
change except after at least ten (10) days prior written notice to Tenant, and
(iv) shall contain a "cross liability" provision insuring Landlord and Tenant
against any loss caused by the negligence of the other party. Any deductible
under such policies must be approved in advance by Tenant.
D. Landlord shall submit to Tenant on a monthly basis an
accounting of all Tenant Improvement Costs. Tenant shall have the right to
audit the books, records and supporting documents of Landlord during normal
business hours, after giving Landlord at least 24 hours prior notice, to the
extent reasonably necessary to determine the accuracy of any accounting.
Within forty-five (45) days after Substantial Completion of the Tenant
Improvements, Landlord shall render to Tenant a final and detailed accounting
of all Tenant Improvement Costs paid by Landlord and Tenant, certified as true
and correct by Landlord. Tenant shall have the same audit rights with respect
to the final accounting as set forth above with respect to the monthly
accountings. If such audit discloses that any overpayment or underpayment was
made by Tenant, there shall be an adjustment between Landlord and Tenant as
soon as reasonably
B-10
58
practicable such that each shall only be required to contribute the payment of
costs to the extent provided for in this Agreement.
E. No approval by Tenant (or its representative) of any
plan or specification, or of completion of the construction work performed by
Landlord, shall constitute a waiver of any item required herein (except as
otherwise specifically required by this Agreement or as specifically noted as
eliminated or changed in the written approval given by Tenant) , or a waiver of
release of Landlord from the warranty given by it pursuant to paragraph 11
hereof.
7. Changes to Approved Plans: Once the Final Tenant Improvement
Plans have been approved by Landlord and Tenant, neither shall have the right
to order extra work or change orders with respect to the construction of the
Tenant Improvements without the prior written consent of the other. Landlord
and Tenant understand that after Landlord's and Tenant's approval of the Final
Cost Estimate and the Final Tenant Improvement Plans, changes to the working
drawings may be required by governmental agencies and/or entities having
jurisdiction over the Tenant Improvements. In the event any such changes are
required, Landlord and Tenant shall expeditiously agree upon and issue
appropriate plan revisions and change orders incorporating such required
changes. Landlord shall not unreasonably withhold or delay its consent to
changes or extra work proposed by Tenant. Tenant may withhold its consent, in
its discretion, to any change in the Final Tenant Improvement Plans or Final
Cost Estimate proposed by Landlord (unless the change is required by applicable
law), it being understood between the parties that Tenant shall have broad
discretion in planning the Tenant Improvements. All extra work or change
orders requested by either Landlord or Tenant shall be made in writing, shall
specify any added or reduced cost and/or construction time resulting therefrom,
and shall become effective and a part of the Final Tenant Improvement Plans,
once approved in writing by both parties. If a change order requested by
Tenant results in a net increase in the cost of constructing the Tenant
Improvements, Tenant shall pay the amount of such increase caused by the change
order requested by Tenant at the time the change order is approved by both
Landlord and Tenant, if and to the extent such change order causes the Tenant
Improvement Costs to exceed Landlord's required contribution thereto.
8. Tenant's Work. Any work not shown on the Final Tenant
Improvement Plans, to be performed before the Tenant Improvements are
Substantially Complete, and for which Tenant contracts separately ("Tenant's
Work") shall be performed in accordance with the following provisions of this
paragraph 8. The term "Tenant's Work" as used herein shall exclude the
installation or delivery to the Premises of Tenant's furniture or other
personal property or any of
B-11
59
Tenant's moveable and unattached equipment or fixtures (collectively "Tenant's
Personal Property").
A. Tenant shall cause Architect to prepare detailed
architectural drawings and specifications for Tenant's Work, and deliver the
same to Landlord for its approval. Within seven (7) days after such plans are
presented to Landlord, Landlord shall approve or disapprove the same. If
Landlord disapproves such plans, it shall notify Tenant in writing of its
specific objections and proposed modifications at the time it notifies Tenant
that the plans are not approved. In such event, the parties (and Architect if
Tenant so elects) shall meet and confer to reach agreement upon the plans
within five (5) business days after Landlord has notified Tenant of its
objections and to incorporate such resolution into the plans for Tenant's Work.
Tenant shall not commence construction of Tenant's Work until all required
building permits or other permits required for such work have been obtained.
Notwithstanding Landlord's review and approval of Tenant's plans and
specifications for Tenant's Work, or failure by Landlord to object to any such
work, Landlord shall have no responsibility therefore, including but not
limited to compliance with governmental regulations. After the plans and
specifications for Tenant's Work have been approved by Landlord, no substantial
changes shall be made thereto without the prior written consent of Landlord.
B. Tenant and its agents or representatives shall have a
nonexclusive revocable license for access and entry to the Premises and
reasonable use of Building facilities (including any facilities for storage and
protection of construction materials) to the same extent and upon the same
terms and conditions as facilities are available to the subcontractors of the
TI Contractor, for the purpose of enabling Tenant to (i) adapt the Premises for
Tenant's use, (ii) construct or install Tenant's Work, and (iii) deliver and
instill Tenant's Personal Property.
C. The entry into the Premises or the Building by Tenant
or its agents or representatives for any purpose before the Commencement Date
shall be subject to all the terms and conditions of the Lease (other than the
payment of Monthly Base Rent or Additional Rent), including but not limited to
Tenant's indemnity obligations. Certificates of insurance as required by the
Lease shall be delivered before the start of Tenant's Work. All of Tenant's
materials, work, installations and decorations of any nature brought on or
installed in the Premises before the Commencement Date shall be at Tenant's
risk, and neither Landlord nor any party acting on behalf of Landlord shall be
responsible for any damage thereto or loss or destruction thereof, except to
the extent of such party's negligence or willful misconduct.
B-12
60
D. Tenant shall conduct its work in the Premises in such
a manner as to maintain harmonious labor relations so as not to interfere with
or delay the work of the TI Contractor. If at any time, entry or work by
Tenant or its agents or representatives shall cause any disharmony or
interference with work performed by or under the direction of TI Contractor,
the license granted in subparagraph 8B may be withdrawn on 48 hours written
notice to Tenant; provided, however, that the license granted in that
subparagraph shall be reinstated as soon as reasonably practicable, so long as
Tenant's re-entry in the Premises does not interfere with TI Contractor's
construction activities in the Premises.
E. All of Tenant's Work shall be performed by persons
reasonably acceptable to and approved by Landlord in writing, which persons
shall employ means to insure, insofar as may be reasonably possible, the
progress of Tenant's Work without interruption on account of strikes, work
stoppage or similar causes for delay, and Tenant shall pay for the repair,
replacement or cleanup of any damage done by them to the Building or to other
contractor's work.
F. Tenant shall advise Landlord in writing not less than
ten (10) days before the date upon which Tenant's Work will commence, in order
to permit Landlord to post appropriate Notices of Nonresponsibility. Any final
hook-up or final connection of Tenant's Work to the plumbing, electrical or
other utility systems serving the Premises shall be performed by the TI
Contractor. Subject to the foregoing, Tenant shall cause a Notice of
Completion to be recorded promptly following completion of Tenant's Work.
Tenant shall provide Landlord with releases of mechanic's and materialmen's
liens from Tenant's contractor and all subcontractors, materialmen and other
persons who may be entitled to assert mechanic's or materialmen's liens with
respect to any portion of Tenant's Work, and shall hold Landlord harmless from
any such claim, asserted claims or liens.
9. Delay in Completion Caused by-Tenant: The parties hereto
acknowledge that the date on which Tenant's obligation to pay the Base Monthly
Rent and the Additional Rent would otherwise commence may be delayed because of
written change orders requested by Tenant and approved by Landlord after
completion and approval of the Final Tenant Improvement Plans and Final Cost
Estimate. It is the intent of the parties hereto that the commencement of
Tenant's obligation to pay the Base Monthly Rent and all Additional Rent not be
delayed by any such change order, and in the event it is so delayed, the date
Tenant's obligation to pay the Base Monthly Rent and all Additional Rent shall
commence shall be advanced by one (1) day for each day of actual delay in
Substantial Completion caused by any such change order (but not to exceed the
number of days of delay specified in the written change order).
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61
10. Delivery of Possession, Punch List, and Acceptance Agreement:
As soon as the Tenant Improvements are Substantially Completed, Landlord and
Tenant shall together inspect the Tenant Improvements. After such inspection
has been completed, each party shall sign an acceptance agreement which shall
(i) include a list of all "punch list" items which the parties agree are to be
corrected by Landlord and (ii) shall state the Commencement Date and the
rentable area of the Premises. Landlord shall use reasonable efforts to
complete and/or repair such "punch list" items within thirty (30) days after
executing the acceptance agreement.
11. Standard of Construction and Warranties: Landlord hereby makes
the following warranties:
A. Landlord warrants that all materials and equipment
included in the Tenant Improvements shall conform to all CC&R's and all Laws.
B. Landlord warrants that the Tenant Improvements shall
be constructed in a good and workmanlike manner substantially in accordance
with the Final Tenant Improvement Plans (as modified by change orders approved
by Landlord and Tenant), all CC&R's, all Laws, and all requirements of Tenant's
insurer. All materials and equipment furnished shall be new, of good quality,
and installed in accordance with the vendor's or manufacturer's specifications,
instructions and requirements.
C. Landlord warrants that all materials and equipment
furnished by it shall be fully paid for and be free of liens or chattel
mortgages.
D. Once Landlord is notified in writing of any breach of
the above-described warranty, Landlord shall promptly commence the cure of such
breach and complete such cure with diligence at Landlord's sole cost and
expense.
12. Payment of Improvement Costs: The Tenant Improvement Costs
shall be paid as follows:
A. Tenant Improvement Allowance: Landlord shall apply
the full amount of the Tenant Improvement Allowance to the Tenant Improvement
Costs. All other costs payable by Landlord pursuant to this Agreement
(including without limitation those costs payable solely by Landlord pursuant
to subparagraph 2.H and any Tenant Improvement Costs in excess of the Final
Cost Estimate that are not the responsibility of Tenant pursuant to paragraph
7) shall be paid directly by Landlord. Tenant Improvement Costs in excess of
the Tenant Improvement Allowance shall be paid by as provided in subparagraph B
below; and
B-14
62
B. Payment of Excess Tenant Improvement Costs: If the
Final Cost Estimate exceeds the Tenant Improvement Allowance, Tenant shall be
obligated to pay approved Tenant Improvement Costs (not to exceed the Final Cost
Estimate approved by Tenant in writing) in excess of the Tenant Improvement
Allowance ("Tenant's Share"). The balance of the Tenant Improvement Costs
(except for amounts payable by Tenant for change orders as described below) is
hereinafter referred to as "Landlord's Share." Tenant shall deposit, prior to
commencement of construction of the Tenant Improvements, one hundred percent
(100%) of Tenant's Share with Landlord, on condition that Landlord has signed
and delivered to Tenant the agreement attached hereto as Schedule 1, and
incorporated herein by this reference (the "Disbursement Agreement").
Landlord's Share shall be made available by Landlord, and Landlord's Share and
Tenant's Share shall be held and disbursed by Landlord, on a pro rata basis, as
set forth in the Disbursement Agreement. In this regard, the parties
acknowledge that payments shall be made to the TI Contractor on a progress
payment basis, but that no such payments (until the final payment) shall exceed
ninety percent (90%) of the portion of the Tenant Improvement Costs allocated to
the work performed and labor and materials furnished, as shown by the applicable
request for payment and not shown in any prior request. To determine the amount
of any such progress payment payable with Tenant's funds, ninety percent (90%)
of the amount requested shall be multiplied by the percentage derived by
dividing Tenant's Share by the Final Cost Estimate. Landlord shall disburse such
amount and Landlord's Share of the progress payment in accordance with the
provisions of the Disbursement Agreement. As an example of the foregoing, if
the total Final Cost Estimate is $1,000,000, and assuming the Tenant Improvement
Allowance is $600,000, Tenant Share of the Tenant Improvement Costs would be
$400,000. Assuming further a progress payment request from the TI Contractor in
the amount of $100,000, the amount of the progress payment payable with Tenant's
funds would be $36,000 ($400,000 divided by $1,000,000 = 40%. $100,000 x 90% =
$90,000. $90,000 x 40% = $36,000), and the balance of the payment would be made
with Landlord's funds. If, at any time following Tenant's initial deposit with
Landlord, the Tenant Improvement Costs increase because of change orders
approved by Tenant as provided for herein, then Tenant shall deposit with
Landlord, at the time and to the extent required under paragraph 7 hereof, the
amounts payable by Tenant with respect to such change order. Disbursements to
the TI Contractor for change order payments for which Tenant is responsible
shall be made entirely from funds deposited with Landlord by Tenant. This
Agreement and the Lease are conditioned upon execution of the Disbursement
Agreement by Landlord concurrently with the execution of the foregoing
agreements, and by Landlord within 15 business days after this Agreement and the
Lease are signed by Landlord and Tenant. If such condition is not satisfied
within such period, Tenant shall, within ten (10) business days thereafter,
either waive such condition or notify
B-15
63
Landlord of the termination of the Lease and this Agreement. Landlord shall
use its best efforts to cause the foregoing condition to be satisfied.
C. Application of Excess Allowance: In the event the
Tenant Improvement Costs are less than the Tenant Improvement Allowance, Tenant
may elect to have the balance of the Tenant Improvement Allowance applied to
(i) the cost of Tenant's Work, and/or (ii) fees paid by Tenant to architects,
space planners, designers, inspectors and other construction professionals in
connection with the Tenant Improvements and/or Tenant's Work.
13. Dispute Resolution: Landlord and Tenant agree that in
resolving any issue concerning which they are obligated to meet and confer
under the provisions of this Agreement, or any other dispute that may arise
during the course of construction of the Tenant Improvements or Tenant's Work,
they shall both (i) act reasonably and in good faith, (ii) devote such time and
resources as are reasonably necessary to resolve the issue in dispute in an
expeditious manner, and (iii) apply the standards set forth in this Agreement
to resolve the matter. The "standards set forth in this Agreement" to be
applied by Landlord and Tenant to resolve objections pursuant to subparagraphs
4A, 4B, 4C, 4D and 8A shall be (i) that Tenant shall be permitted freedom in
interior design and layout of the Premises, so long as the Tenant Improvements
(or Tenant's Work with respect to subparagraph 8A) necessary to meet Tenant's
Requirements will (A) be consistent with Landlord's current "as-built" plans
and specifications, and basic building plans and specifications for the HVAC,
mechanical, electrical and plumbing components of the Building as they relate
to the Premises, (B) comply with applicable building codes, and (C) not
adversely affect the structural integrity of the Building or the operation of
the Building's electrical or mechanical systems, (ii) any plans or
specifications that have been previously approved by Landlord and Tenant, (iii)
the requirement that at each stage of development, the plans and specifications
in question are to be the logical and reasonable evolution and development of
plans and specifications previously approved by Landlord and Tenant, (iv)
Landlord and Tenant are obligated to act reasonably and in good faith, and (v)
unless there is an agreement to the contrary, Landlord and Tenant have agreed
that the improvement requirements of each shall be evaluated in accordance with
custom prevailing in Alameda County for the development of comparable
facilities. Landlord and Tenant acknowledge their intent to promptly and
reasonably resolve all disputes so as to cause the Tenant Improvements to be
Substantially Completed in an expeditious manner.
B-16
64
14. Effect of Agreement: In the event of any inconsistency between
this Agreement and the Lease or any other exhibit attached to the Lease, the
terms of this Agreement shall prevail.
LANDLORD: TENANT:
COMMERCIAL CENTER BANK, a URNOTECH CALYPTE BIOMEDICAL
California corporation CORPORATION, a California
corporation
By: /s/________________________ By: /s/ _________________________
Its: SR. V.P. Title: __________________________
__________________
By: /s/ Don Bruner Dated: __________________________
___________________________
Its: Vice President
_________________
B-17
65
EXHIBIT C
COMMENCEMENT DATE MEMORANDUM
This Acknowledgement is made as of with reference to
that certain Lease Agreement (hereinafter referred to as the "Lease") dated
, by and between
Harbor Bay Isle Associates, a California General Partnership ("Landlord"), and
,
("Tenant").
The undersigned hereby confirms the following:
1. That the Tenant accepted possession of the Premises (as
described in said Lease) on , and acknowledges that the
Premises are as represented by Landlord and in good order, condition and
repair; and that the improvements, if any, required to be constructed for
Tenant by Landlord under this Lease have been so constructed and are
satisfactorily completed in all respects, excepting, if applicable, minor
punch-list items.
2. That all conditions of said Lease have been satisfied and that
Landlord has fulfilled all of its obligations.
3. That in accordance with the provisions of Section 3 of said
Lease, the Commencement Date of the Term is , and that, unless
sooner terminated, the original Term thereof expires on .
4. That said Lease is in full force and effect and that the same
represents the entire agreement between Landlord and Tenant concerning said
Lease.
5. That there are no existing defenses which Tenant has against
the enforcement of said Lease by Landlord, and no offsets or credits against
rentals.
6. That the rental obligation of said Lease as set forth in
Section 4.1 of said Lease is presently in effect, including all rentals,
charges and other obligations on the part of Tenant under said Lease.
C-1
66
7. That the undersigned Tenant has not made any prior assignment,
hypothecation or pledge of said Lease or of the rents thereunder.
TENANT:
By
--------------------------------------
Signature
--------------------------------------
Name: Please Print
--------------------------------------
Title
--------------------------------------
Company
C-2
67
EXHIBIT D
LANDLORD'S RULES AND REGULATIONS (OFFICE/FLEX)
HARBOR BAY BUSINESS PARK
1. SIGNS
No sign, placard, picture, advertisement, curtain, shade or window
covering, name or notice shall be installed on any part of the outside or
inside of the building without the prior written consent of Landlord. Landlord
shall have the right to remove, at Tenant's expense and without notice, any
sign installed or displayed in violation of this rule. ALL approved signs or
lettering on doors and walls shall be printed, painted, affixed or inscribed at
Tenant's expense by a person chosen or approved by Landlord.
2. WINDOW TREATMENTS
No curtain, blind, shade, screen, awning, hanging plant or window
covering or other object shall be installed or displayed on any part of the
inside or outside of the building without prior written consent of Landlord.
If Landlord objects in writing to any such installation, tenant shall
immediately discontinue such use and remove the item at Tenant's sole cost.
Tenant shall not place anything against or near glass partitions or doors or
windows which in the opinion of Landlord appear unsightly from outside the
Premises.
3. CLEANING
A. Cleaning and janitorial services for the Premises are
restricted to those provided by either Tenant, Tenant's janitorial contractor,
or Landlord.
B. Tenant shall not cause any unnecessary labor by carelessness
or indifference to the good order and cleanliness of the Premises or the
Building or the Parcel upon which the building is located.
4. SECURITY
A. Landlord shall not in any way be responsible to any Tenant for
any loss of property on the Premises, however occurring, or for any damage to
any Tenant's property by janitor or any other person, including maintenance
personnel.
B. Tenant shall not alter any lock or install a new additional
lock or bolt on any door of its Premises without permission of Landlord, which
shall not be unreasonably withheld.
D-1
68
Locks installed by Tenant shall be subordinate to the Building master key for
fire protection. Tenant, upon termination of its tenancy, shall deliver to
Landlord the keys of all doors which have been furnished to Tenant.
C. Tenant shall close and lock the doors of Premises and entirely
shut off all water faucets or other water apparatus, and electricity, gas or
air outlets before Tenant and its employees leave the Premises. Tenant shall
be responsible for any damage or injuries sustained by other tenants or
occupants of the Building or by Landlord for noncompliance with this rule.
Tenant assumes any and all responsibility for protecting Premises from theft,
robbery and pilferage, which includes keeping doors locked and other means of
entry to the Premises closed.
D. Canvassing, soliciting and distribution of handbills or any
other written materials, and peddling in the Building are prohibited, and each
Tenant shall cooperate to prevent same.
E. Landlord reserves the right to exclude or expel from the
Building any person who, in Landlord's judgment, is intoxicated or under the
influence of liquor or drugs or who is in violation of any of the Rules and
Regulations of the Building.
F. Tenant shall comply with all safety, fire protection and
evacuation procedures and regulations established by Landlord or any
governmental agency. Tenant will observe all posted No Smoking Areas.
5. USE OF PREMISES
A. Without written Landlord approval, Tenant shall not use or
keep in the Premises any kerosene, gasoline or other inflammable or combustible
fluid or material other than those limited quantities necessary for the
operation or maintenance of office equipment. Tenant shall not use or permit
to be used in the Premises any foul or noxious gas or substance, or permit or
allow the Premises to be occupied or used in a manner offensive or
objectionable to Landlord or other occupants of the Building or Buildings by
reason of noise, odors or vibrations.
B. No animals may be kept within or brought onto the Premises,
without prior written consent of Landlord.
C. Tenant shall not use the Premises for any business or activity
other than that specifically provided for in Tenant's Lease.
D. Tenant shall not mark or drill into the partitions, woodwork
or plaster or in any way deface the Premises or any part thereof. Landlord
reserves the right to direct where and how telephone and telecommunications
wires, cables, conductors and
D-2
69
conduit are to be introduced to the Premises. Tenant shall not cut or bore
holes for wires and cables. Tenant shall not affix any floor covering to the
floor of the Premises in any manner except as approved by Landlord. Tenant
shall repair any damage resulting from noncompliance with this rule.
E. Tenant shall not place in any trash box or receptacle any
material which cannot be disposed of in the ordinary and customary manner of
trash and garbage disposal. All garbage and refuse disposal shall be made in
accordance with directions issued from time to time by Landlord.
F. The Premises shall not be used for any improper, unlawful or
objectionable purpose. No cooking shall be done or permitted by Tenant in the
Premises, except in a facility designed therefore and approved by Landlord.
However, use by Tenant of Underwriters' Laboratory-approved equipment for
brewing coffee, soup, tea, hot chocolate and similar beverages shall be
permitted, provided that such equipment and use are in accordance with all
applicable federal, state, county and city laws, codes, ordinances, rules and
regulations. Outdoor cooking for social or business entertainment shall be
prohibited unless approved by Landlord in advance and Tenant is adequately
insured and in compliance to fire codes and other applicable governmental
regulations.
6. DELIVERIES/SHIPMENTS
A. Tenant shall be responsible for all damage to Building or
Premises caused by Tenant in any delivery activity.
B. Delivery trucks to Premises, or goods and equipment dropped
off by delivery trucks, shall not block parking spaces or ingress or egress by
other vehicles in Common Area.
7. FLOOR LOADING
Tenant shall not place a load upon any floor of the Premises which
exceeds the load per square foot which such floor was designed to carry and
which is allowed by law. Landlord shall have the right to prescribe the
weight, size and position of all equipment, materials, furniture or other
property brought into the Building. Heavy objects shall, if considered
necessary by Landlord, stand on such platforms as determined by Landlord to be
necessary to properly distribute the weight.
8. MECHANICAL EQUIPMENT, HVAC, ENERGY USE
A. Business machines and mechanical equipment belonging to Tenant
which cause noise or vibration that may be transmitted to the structure of the
Building or to any space therein to such a degree as to be objectionable to
Landlord or to any tenants in the Building, shall be placed and maintained by
Tenant, at Tenant's
D-3
70
expense, on vibration eliminators or other devices sufficient to eliminate
noise or vibration.
B. Tenant shall not use any method of heating or air conditioning
other than that supplied or approved by Landlord, or expressly permitted or
required under the Lease.
9. PARKING
A. Tenant shall not obstruct any sidewalks, bike paths, parking
areas, halls, passages, exits, entrances, elevators, or stairways of the
Building. The halls, passages, exits, entrances, any elevators, and stairways
are not open to the general public. Landlord shall in all cases retain the
right to control and prevent access thereto of all persons whose presence, in
the judgment of Landlord, would be prejudicial to the safety, character,
reputation and interest of the Building and its tenants provided that nothing
herein contained shall be construed to prevent such access to persons with whom
any tenant normally deals in the ordinary course of its business, unless such
persons are engaged in illegal or disruptive activities or unreasonably
interfere with the use or occupancy of the Building by Landlord or tenants. No
tenant and no employee or invites of any tenant shall, go upon the roof of the
Building, except as necessary for maintenance purposes.
B. Tenant's non-exclusive right to use parking spaces within the
parking facilities located within the parcel on which the Building is located
shall be subject to such Rules and Regulations as Landlord may, from time to
time, establish.
C. Landlord may restrict certain portions or spaces within the
parking area for the exclusive use of one or more tenants of the Building, and
may designate other areas to be used at large only by licensees, customers and
invitees of tenants of the Building.
D. Landlord shall have the right to require employees of Tenant
to display identification badges, stickers or other markings at a place visible
from the exterior of all vehicles using such parking spaces, in order to ensure
that only authorized persons are using the parking areas, or designated
portions thereof. At Landlord's request, Tenant shall supply Landlord with a
list of all license plates of its employees who are authorized to park in the
parking area.
E. Landlord shall have the right to remove any vehicle not parked
within a marked parking space, or parked in violation of any of Landlord's
Rules and Regulations. In the event any vehicle so removed has been parked by
an employee of Tenant, Tenant agrees to reimburse Landlord, upon demand, for
the cost of such removal and any storage charges.
D-4
71
F. Landlord reserves the right to designate certain parking
spaces for use only by compact or small cars and all vehicles shall be parked
within the lines marked upon the pavement delineating parking spaces.
G. Parking areas shall be used solely for the parking of
automobiles, motorcycles, motor driven or non-motor driven bicycles, and
four-wheeled trucks or automobile sized trailers.
H. Tenant and its employees shall observe all directional and
other signs placed on or adjacent to the parking areas designating means of
ingress or egress, or limiting driveways for ingress or egress of particular
types of vehicles.
10. MISCELLANEOUS
A. Landlord reserves the right, exercisable with reasonable
notice and without liability to Tenant, to change the name of the Building or
Buildings and the names of the access streets connecting the buildings with
Harbor Bay Parkway.
B. Tenant shall not install any telephone, telecommunications,
satellite, microwave, radio or television antenna, dish, wire, loudspeaker or
other device on the roof or exterior walls of the Building, without prior
written consent of Landlord. Tenant shall not interfere with telephone,
telecommunications, satellite, video conferencing, microwave, radio or
television broadcasting from, or reception in, the Building or elsewhere within
the Business Park.
C. Without the written consent of Landlord, Tenant shall not use
the name of the Building in connection with or in promoting or advertising the
business of Tenant except as Tenant's address.
D. Landlord may waive any one or more of these Rules and
Regulations for the benefit of Tenant or any other tenant, but no such waiver
by Landlord shall be construed as a continuous waiver of such Rules and
Regulations in favor of Tenant or any other tenant, nor prevent Landlord from
thereafter enforcing any such Rules and Regulations against any or all of the
tenants of the Building.
E. These Rules and Regulations are in addition to, and shall not
be construed to in any way modify or amend, in whole or in part, the terms,
covenants, agreements and conditions of Tenant's Lease of Premises in the
Building.
F. Landlord reserves the right to make such other reasonable
Rules and Regulations as, in its judgment, may from time to time be needed or
appropriate for safety and security, for care and cleanliness of the Building
and for the preservation of good order
D-5
72
therein. Tenant agrees to abide by all such Rules and Regulations, hereinabove
stated, and any additional Rules and Regulations which are adopted.
G. Tenant shall be responsible for the observance of all of the
foregoing rules by Tenant's employees, agents, clients, customers, invitees and
guests.
D-6
73
EXHIBIT E
TENANT SIGN
DESIGN GUIDELINES
[DIAGRAM OF SIGN LOCATION OF BLDG A, B AND C]
SIGN LOCATION
E-1
74
PROJECT PLAZA SIGN
[DIAGRAM OF TECHNOLOGY CENTER ELEVATIONS]
[DIAGRAM OF PLAN]
E-2
75
SUITE SIGN
[DIAGRAM OF ELEVATION AND PLACEMENT OF SIGN ON STOREFRONT]
E-3
76
TENANT SIGN
[DIAGRAM OF ELEVATION OF TENANT SIGN]
E-4
77
EXTERIOR DIRECTORY
[DIAGRAM OF DIRECTORY]
E-5
78
EXHIBIT F
MATERIAL SAFETY DATA SHEETS
TABLE OF CONTENTS
A.
Accutrol Chemistry Control Normal
Acetic Acid
Acetone
Acrylamide
Agarose Gel, SPE
Albumin Standard
Alkaline Phosphatase-Conjugated Goat anti-Human IgG + IgM
p-Aminobenzyl 1-Thio-B-D-Galactopyranoside-Agarose
e-Amino-n-Caprioc Acid
3-Amino-9-Ethylcarbazole
Ammonium Acetate Crystalline
Ammonium Choloride
Amphyl Detergent
Amphyl (R) Disinfectant Deodorant Spray
Anti-Human IgG (Whole Molecule) - Ferritin Conjugate from goat
8-Azaguanine (50X)
2.2'-Azino-Bis (3-Ethylbenzthiazoline-6-Sulfonic Acid) Diammonium Salt
B.
Bacdown Handsoap
Barbital Buffer
Barbital Free Acid Crystalline-DEA Schedule IV Item
Barbital Sodium-DEA Schedule IV Item
BCA Protein Assay Reagent
Bio-Sil A and Bio-Sil HA gel (Silica gel)
Biotin Conjugate-Monoclonal Anti-Human IgG3, Clone HP 6050, Fractionated
Boric Acid ACS Reagent
Bovine IgG
Bovine Serum
Bovuminar Reagent Pure Powder
Bromphenol Blue Sodium ACS Reagent
Buffer Solutions (Phosphate Buffers)
pH 4.0 Standard Buffer
pH 7.0 Standard Buffer
pH 10.0 Standard Buffer
C.
Calcium Acetate
Calcium Choloride Dihydrate
Calcium Sulfate Anhydrous
Calcium Sulfate Dihydrate
Carbon Dioxide
Carbonyl Iron
Chaps
Chapso
Chloroform ACS Grade
Chloroform, Anhydrous, 99+%
4-Chloro-1-Napthol
Citrate Buffer Solution
F-1
79
C. cont.
Citric Acid Free Acid Monohydrate Crystalline
Concanavalin A (from Canavalia ensiformis Type V)
Conductivity Standard (Potassium Chloride) 10 + 100 Micromho
Conductivity Standard (Potassium Chloride) 718 Micromho
Cyanogen Bromide-Activated Sepharose 4B
Cyclohexamide Crystalline
Cynoff WSB Insecticide
D.
Deoxycholic Acid Sodium
Dichromate Acid Cleaning Solution
Diethanolamine, 99%
N.N.-Dimethylformamide
Dimethyl Sulfoxide ACS Reagent (DMSO)
2.4-Dinitrofluorobenzene (2.4-DNFB)
2.2'-Dithiodipyridine
Dithiothreitol Molecular Biology Reagent
DL-Dithiothreitol Sigmal Grade Hygroscopic
Dri-Contrad
Drierite (Calcium Sulfate, Cobalt Chloride)
Dulbecco's Modification of Eagle's Medium
E.
Electrode Filling Solution
Equine IgG
Equine Serum
Erada Stain
Eriochrome Black T
Ethanol, Doubly Denatured, Modified 3A Alcohol
Ethanolamine Free Base
Ethidium Bromide Aqueous Solution
Ethyl Alcohol, Denatured
1-Ethyl-3-(3-Dimethylaminopropyl)-Carbodiimide Hydrochloride
Ethylenediaminetetraacetic Acid Tetrasodium Dihydrate Sigma Grade (EDTA)
N-Ethylmaleimide
Evans Blue
Evans Blue Counterstain
F.
Fetal Bovine Serum
FITC Conjugate Goat anti-Mouse IgG
FITC Conjugate Goat anti-Rabbit IgG
FLOPC 21
Formalin (Morbicid Acid)
Formamide. 99% ACS Reagent
G.
B-glactosidase Grade VIII from E. coli
Gas Pak H2 + CO(2) Envelope
Gentamicin Solution 50mg
Gentamicin Sulfate Solution Hybri-Max
Glutaraldehyde Grade II
F-2
80
G. cont.
Glutaraldehyde-Phenate
Glycerol
Goat IgG
Goat Serum
Guanidine Hydrochloride Grade I
Guanidine Thiocyanate
H.
Haemo-Sol Powder
Hanks' Balanced Salt Solution (1X) w/Phenol Red
Hat Media Supplement (50X)
Helium-4
N-Heptane
Human IgA (from colostrum)
Human IgG (from serum)
Human IgM (from serum)
Hydrochloric Acid
Hydrogen Peroxide 30% Solution
N-2-Hydroxyethyl-piperazine
I.
Isobutyric Acid
Isopropyl Alcohol
J.
K.
L.
Lybrol Type PX
Lyphogel
M.
Magnesium Chloride Hexahydrate
M-Maleimidobenzoyl Sulfosuccinimide Ester
2-Mercaptoethanol
2-Mercaptoethanol Electrophoresis Reagant
Methyl Alcohol
Methyl Sulfoxide, Anhydrous. 99%
Minimum Essential Media. Eagle's
Minipax Absorbant packets. 0.5g of indicating silica gel
N.
Nitrogen
p-Nitrophenyl Phosphate Disodium 5 mg tablets
Nonidet P-40
Nystatin
O.
F-3
81
P.
Penicillin-Streptomycin Solution
Phenol. Redistilled. 99+%
O-Phenylenediamine Dihydrochloride Tablets-carcinogen
Phosphatase Alkaline Type VII-S
Phosphatase Alkaline Type VII-T
Phosphoric Acid, 85 Wt. % Solution in H(2)O
Polyethylene Glycol Molecular Biology Reagent
Polystyrene Uniform Latex Particles
Polyvinylpyrrolidone
Potassium Hydroxide Solution
Propane
2-Propanol
Protein Standard (Human Serum Albumin + Globulin)
Protein Standard Set (Bovine Serum Albumin)
Q.
R.
Rare Earth Oxide Mixture
Recombinant GP160
Rez-N-Polish
S.
Sigmacote
Silicon Carbide (IR Window Polish)
Sodium Acetate Molecular Biology Reagent
Sodium Azide
Sodium Bicarbonate ACS Reagent
Sodium Borohydride Anhydrous
Sodium Carbonate Anhydrous ACS Reagent
Sodium Chloride Molecular Biology Reagent
Sodium Chloride Sigma Grade
Sodium Hydroxide Anhydrous Pellets
Sodium Nitrite
Sodium-m-Periodate
Sodium Phosphate Monobasic, Monohydrate
Sodium Phosphate Dibasic, Anhydrous ACS
Sodium Phosphate Dibasic, Heptahydrate ACS
Stabilur Tablets
Staphene Disinfectant Spray (Aerosol)
Streptomycin Sulfate
Sucrose
Sulfosuccinimidyl (4-Iodoacetyl) Aminobenzoate
Sulfuric Acid
T.
Temed Electrophoresis Reagent
3.3',5.5'-Tetramethylbenzidine
2.6,10.14-Tetramethylpentadecane
Total Protein Reagent
Triethanolamine Free Base
Trizma Base Reagent Grade
Trizma Hydrochloride Reagent Grade
F-4
82
U.
Urea
V.
Vancomycin HCI
W.
S/P High Purity Water
Wright Stain
X.
Y.
Z.
KITS:
Gold Enhancement Kit
M13 Kits and Bst Sequencing Kits
Novapath Immunoblot HIV Assay
Silver Stain Kit Developer Solution
Silver Stain Silver Reagent Concentrate
F-5
83
EXHIBIT G
DISBURSEMENT AGREEMENT
THIS DISBURSEMENT AGREEMENT is entered into as of the 30th day of
September, 1992, by and between Commercial Center Bank, a California banking
corporation ("Landlord"), and Urnotech Calypte Biomedical Corporation, a
California corporation ("Urnotech").
W I T N E S S E T H
H. Urnotech and Landlord have entered into a certain lease (the
"Lease"), and a work letter (the "Work Letter"), both dated September 30, 1992,
covering certain space in Building B, 1265 Harbor Bay Parkway, Alameda,
California, more particularly described in the Lease (the "Premises") located
in and upon the real property described in Exhibit 1 attached hereto (the
"Property");
I. The Work Letter provides that Urnotech and Landlord shall each
contribute to the cost of Tenant Improvements (as defined therein) for the
Premises, and shall pay through Landlord their respective share (as defined
hereinafter) of such costs, on a progress payment basis. Urnotech's share of
approved Tenant Improvement Costs ("Urnotech's Share") is specified in the Work
Letter to be an amount equal to the difference between the Final Cost Estimate
and the Tenant Improvement Allowance (as those terms are defined in the Work
Letter). Landlord's share of such Tenant Improvement Costs is specified in the
Work Letter to be all Tenant Improvement Costs in excess of Urnotech's Share.
The Work Letter provides that Landlord shall furnish as a Tenant Improvement
Allowance the sum of $809,393 ($39.85 per square foot), hereinafter referred to
as "Landlord's Tenant Improvement Allowance." That portion of progress payments
to the TI Contractor (as defined hereinafter and in the Work Letter) payable
with Urnotech's funds from Urnotech's Share pursuant to the Work Letter shall
be determined by multiplying ninety percent (90%) of the requested payment by
that percentage ("Urnotech's Payment Percentage") derived by dividing
Urnotech's Share by the Final Cost Estimate and that portion of the progress
payments to the TI Contractor payable from Landlord's Tenant Improvement
Allowance shall be determined by multiplying ninety percent (90%) of the
requested payment by that percentage ("Landlord's Payment Percentage') derived
by dividing Landlord's Tenant Improvement Allowance by the Final Cost Estimate;
and
J. Landlord has agreed to make available Landlord's Tenant Improvement
Allowance, to hold Landlord's Tenant Improvement Allowance and Urnotech's Share
deposited with Landlord in separate
G-1
84
accounts, and to disburse Landlord's Tenant Improvement Allowance and
Urnotech's Share on a pro rata basis in accordance with the terms of this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and of other good and valuable consideration the receipt and sufficiency
of which is hereby acknowledged, the parties hereby agree as follows:
1. Recitals. The parties agree that the foregoing recitals are
true and correct and are incorporated hereby into the text of this Agreement.
2. Landlord's Tenant Improvement Allowance. Landlord agrees to:
(i) place in a separate account funds in an amount equal to $809,393
representing one hundred percent (100%) of Landlord's Tenant Improvement
Allowance; (ii) subject to the terms and conditions set forth hereinafter,
disburse such funds for Tenant Improvement Costs pursuant to this Agreement.
The account established pursuant to this paragraph 2, is hereinafter referred
to as "Landlord's Account".
3. Urnotech's Share. Urnotech agrees to deposit one hundred
percent (100%) of Urnotech's Share with Landlord at least fourteen (14) days
prior to the commencement of construction of the Tenant Improvements. Urnotech
further agrees that, if at anytime following the deposit of Urnotech's Share
with Landlord, the Tenant Improvement Costs increase because of change orders
approved by Urnotech in accordance with the Work Letter, then Urnotech shall,
as a condition precedent to Landlord's obligation to continue disbursements of
Landlord's Payment Percentage from Landlord's Account, deposit with Landlord,
at the time and to the extent required pursuant to the Work Letter, the amount
payable by Urnotech with respect to such change order. Urnotech hereby
instructs Landlord, and Landlord agrees to (i) place Urnotech's Share, and any
subsequent deposit by Urnotech for change orders, in a separate account in
Urnotech's name, and (ii) disburse such funds for Tenant Improvement Costs
pursuant to this Agreement. The account established pursuant to this paragraph
3, is hereinafter referred to as "Urnotech's Account".
4. Disbursements. Urnotech and Landlord hereby agree that
disbursements from Landlord's Account and Urnotech's Account shall be made as
follows:
(a) No disbursement shall exceed ninety percent (90%) of
the portion of the Tenant Improvement Costs allocated to the work performed and
labor and materials furnished, as shown by applicable request for disbursement
and not shown in any prior request, except as provided in paragraph 5 below. A
portion of each progress payment due to the TI Contractor equal to that amount
determined by multiplying Urnotech's Payment Share by
G-2
85
ninety percent (90%) of the amount requested shall be disbursed to the TI
Contractor from Urnotech's Account, and the portion thereof equal to the amount
determined by multiplying Landlord's Payment Percentage by ninety percent (90%)
of the amount requested shall be disbursed to the TI Contractor from Landlord's
Account. However: (i) disbursements to the TI Contractor for change order
payments for which Urnotech is responsible pursuant to the Work Letter, shall
be made entirely from Urnotech's Account and shall be made as and when due as a
condition precedent to Landlord's obligations to make any further disbursements
from Landlord's Account; and (ii) disbursements to the TI Contractor for Tenant
Improvement Costs in excess of the Final Cost Estimate (other than
disbursements for change order payments payable by Urnotech (i)), if any, shall
be paid by Landlord when and if due from its own funds separate from Landlord's
Tenant Improvement Allowance, as specified in paragraph 12 of the Work Letter.
(b) Disbursements shall be based on Urnotech's written
and signed requests (at a time and in a form satisfactory to Landlord)
certified by the TI Contractor. Each disbursement request shall also contain a
representation by Urnotech that the Lease is then in full force and effect and
that neither party is then in default under the Lease.
(c) Each disbursement shall be conditioned on Urnotech's
confirmation in writing that Urnotech's architect has inspected, reviewed and
approved the work covered by the requested disbursement, Landlord's independent
inspector has inspected, reviewed and approved the work covered by the
requested disbursement, and Landlord has received copies of all invoice and
other satisfactory evidence of completion relative to such work.
(d) Disbursements shall be made not more frequently than
monthly.
(e) Disbursements shall not be made prior to receiving
appropriate lien waivers or releases from all contractors, subcontractors and
materialmen as prescribed under Civil Code Section 3262 for all work performed
and materials furnished which were shown in any prior request.
(f) No disbursements shall be made unless and until the
construction contract with the TI Contractor and all subcontracts with
subcontractors have been entered into.
5. Disbursements of Retention. Urnotech and Landlord hereby
agree that disbursements from Landlord's Account and Urnotech's Account shall
be made to TI Contractor with respect to the amounts retained pursuant to
paragraph 4, upon satisfaction of the following conditions:
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(a) Recordation of all applicable notices of completion
covering the Tenant Improvements, and expiration of the period for recording
notices of mechanic's liens with respect to the Tenant Improvements;
(b) Receipt by Landlord of such written waivers of lien
rights and affidavits that all bills for labor and materials have been paid,
and evidence that no notice of mechanic's lien, stop notice or a legal process
under any mechanic's lien law or similar law has been recorded, issued,
outstanding or served on Landlord;
6. Miscellaneous. Landlord and Urnotech represent and warrant
that the individuals executing this Agreement on behalf of such party is duly
authorized to execute and deliver this Agreement on behalf of such party, and
this Agreement is binding upon such party in accordance with its terms. All
schedules attached hereto are incorporated herein by this reference. The
headings used in this Agreement are for convenience of reference only, and
shall not be construed to limit or extend the meaning Of any part of this
Agreement. No amendment, change or addition to this Agreement shall be binding
unless in writing and signed by the parties hereto. In the event any party
hereto shall bring an action to enforce or to interpret this Agreement, the
losing party shall pay the prevailing party's attorneys' fees and costs. If
any provision contained herein is held to be invalid, illegal or unenforceable,
such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement, and this Agreement shall be construed as if such
invalid, illegal or unenforceable provision had not been contained herein.
LANDLORD
COMMERCIAL CENTER BANK, a
California banking corporation
By: /s/ [Illegible]
----------------------------------
Title: Sr. V.P.
-------------------------------
By: /s/ Don Bruner
----------------------------------
Title: Vice President
-------------------------------
TENANT
URNOTECH CALYPTE BIOMEDICAL
CORPORATION, a California
corporation
By: /s/ [Illegible]
----------------------------------
Title: -------------------------------
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Exhibit 1
All that certain real property situated in the City of Alameda, County of
Alameda,, State of California, described as follows:
PARCEL ONE:
Parcel 2, Parcel Map 4124, filed September 13, 1983, Parcel Map Book 141, Page
8, Alameda County Records.
PARCEL TWO:
An easement for ingress and egress and utilities as an appurtenance to Parcel
One over that portion described as Easement B, Parcel Map 4124 filed September
19, 1983, Parcel Map Book 141, Page 81 Alameda County Records.
A.P.N. 074-1339-026
EXHIBIT 1
Page 1 of 1
88
FIRST ADDENDUM TO LEASE
This First Addendum, dated as of September 30, 1992, is to that
certain Lease dated as September 30, 1992, by and between COMMERCIAL CENTER
BANK, a California corporation, ("Landlord") AND URNOTECH CALYPTE BIOMEDICAL
CORPORATION, a California Corporation ("Tenant"). This First Addendum shall be
deemed incorporated into and made a part of such Lease. In the event of any
inconsistencies or conflicts between the provisions of this First Amendment and
the provisions of the Lease, the provisions of this First Addendum shall apply.
LEASE
ITEM REFERENCE
---- ---------
1. 3.4 Right of First Opportunity
--------------------------
In the event that Landlord becomes aware that any other tenant within the Project at any time
during the Initial or any Extension Term of this Lease intends to vacate the space occupied
by such tenant, and provided that such space is not under obligation to another tenant,
(except that Landlord shall notify Tenant of an impending vacancy if another tenant who has a
right to lease such space has not timely exercised such right), Landlord agrees to provide
Tenant with notice of such impending vacancy. Tenant shall have ten (10) days from the
effective date of such notice within which to notify Landlord that Tenant desires to
negotiate for the lease of such space by Tenant. In the event Tenant so notifies Landlord,
Landlord and Tenant shall negotiate, in good faith, for the lease by Tenant of such space at
the then fair market rental value of such space. Landlord agrees that it will negotiate with
Tenant exclusively for a period of thirty (30) days following Tenant's notice to Landlord, if
applicable; provided, however, that Landlord may commence marketing such space within such 30
day period. If Landlord and Tenant are unable to reach agreement with respect to the terms
of a lease by Tenant of such space within such thirty (30) period, then Landlord shall be
free to lease such space to any other person or
89
entity without liability or obligation to Tenant.
2. 3.5 Option to Extend
----------------
Landlord grants Tenant two options to extend the Term of the Lease, each for one five-year
period (the "Extension Terms"), on all the provisions contained in the Lease, subject to the
following terms, conditions and exceptions:
Tenant shall notify Landlord of Tenant's exercise of said option at lease six (6) months, but
not more than twelve (12) months, prior to the expiration of the Term then in effect.
Tenant shall pay to Landlord during each Extension Term Monthly Base Rent in the amount of
ninety percent (90%) of the Fair Market Rental Value (as that term is hereinafter defined) of
the Premises as of the commencement of the Extension Term. The term Fair Market Rental Value
shall mean the prevailing market rental rate (determined by actual transactions for new
leases) for properties similar to the Premises located within the Harbor Bay Business and
Research Park. In determining the Fair Market Rental Value, the parties or the appraisers)
shall consider only the level of Tenant Improvements originally funded by Landlord.
The parties shall have thirty (30) days after Landlord receives the Tenant's notice in which
to agree on Monthly Base Rent during the Extension Term during that period, they shall
immediately execute an amendment to this Lease stating such Monthly Base Rent.
If the parties are unable to agree on the Monthly Base Rent for the Extension Term within
that period, then within fifteen (15) days after the expiration of that period each party, at
its cost and by giving notice to the other party, shall appoint a real estate appraiser
(M.A.I. designation required) with at least five
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years full-time commercial appraisal experience in the Oakland/Berkeley/ Emeryville area to
appraise and set the Monthly Base Rent for the Extension Term. If a party does not appoint
an appraiser within ten (10) days after the other party has given notice of the name of its
appraiser, the single appraiser appointed shall be the sole appraiser and shall set the
Monthly Base Rent for the Extension Term. If the two appraisers are appointed by the parties
as provided in this paragraph, they shall meet promptly and attempt to set the Monthly Base
Rent for the Extension Term. If they are unable to agree within thirty (30) days after the
second appraiser has been appointed, they shall attempt to designate a third appraiser
meeting the qualifications stated in this paragraph within ten (10) days after the last day
the two appraisers are given to set the Monthly Base Rent. If they are unable to agree on
the third appraiser either of the parties may, by giving ten (10) days notice to the other
party, apply to the Presiding Judge of the Superior Court of Alameda County for the
appointment of a third appraiser who meets the qualifications stated in this paragraph. Each
of the parties shall bear one-half of the cost of appointing the third appraiser and of
paying the third appraiser's fee. The third appraiser, however selected, shall be a person
who has not previously acted in any capacity for either party.
Within thirty (30) days after the selection of the third appraiser, a majority of the
appraisers shall set the Monthly Base Rent for the Extension Term. If a majority of the
appraisers are unable to agree upon the Monthly Base Rent within the stipulated period of
time, each appraiser shall submit an appraisal, the three appraisals shall be added together
and their total divided by three; the resulting quotient shall be the Monthly Base Rent for
the Premises during the Extension Term.
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If, however, the low appraisal and/or high appraisal are/is more than ten percent (10%) lower
and/or higher than the middle appraisal, the low appraisal and/or the high appraisal shall be
disregarded. If only one appraisal is disregarded, the remaining two appraisals shall be
added together and their total divided by two; the resulting quotient shall be the Monthly
Base Rent for the Premises during the Extension Term. If both the low appraisal and the high
appraisal are disregarded as stated in this paragraph, the middle appraisal shall be the
Monthly Base Rent for the Premises during the Extension Term.
After the Monthly Base Rent for the Extension Term has been set, the appraiser shall
immediately notify the parties. If Tenant objects to the Monthly Base Rent that has been
set, Tenant shall have the right to have this Lease expire at the end of the Term the in
effect. Tenant's election to allow this Lease to expire must be exercised within ten (10)
days after receipt of notice from the appraisers of the Monthly Base Rent for the Extension
Term. If Tenant does not exercise its election within the 10-day period, the term of this
Lease shall be extended as provided in this paragraph.
Tenant shall have no other right to extend the term beyond the two Extension Terms. Tenant's
option for the Second Extension Term may be exercised only if Tenant has extended the Lease
for the First Extension Term.
3. 3.1.1 Tenant Improvement Allowance
----------------------------
As provided in Exhibit "B" of the Lease, Tenant will receive a construction allowance from
the Landlord of $39.85 per rentable square foot to pay for the cost of constructing Tenant
Improvements in the Premises to the specifications of the Tenant; any tenant improvement
costs above
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$39.85 per rentable square foot to be paid for by Tenant.
LANDLORD: TENANT:
COMMERCIAL CENTER BANK, URNOTECH CALYPTE BIOMEDICAL
a California corporation CORPORATION,
a California corporation
By: /s/ [Illegible] By /s/ David J. Robison
------------------------------ -----------------------------
Its: Sr. V.P. Its: President and Chief
-------------------------- Executive Officer
------------------------
By: /s/ Don Bruner
------------------------------
Its: Vice President
---------------------------
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WORK LETTER
This Work Letter (the "Agreement") is made part of that Lease dated for
reference purposes as of September 30, 1992 (the "Lease") by and between
Commercial Center Bank, a California corporation ("Landlord"), and Urnotech
Calypte Biomedical Corporation, a California corporation ("Tenant"). Landlord
and Tenant agree that the following terms are part of the Lease:
1. Purpose of Improvement Agreement: The purpose of this
Agreement is to set forth the rights and obligations of Landlord and Tenant
with respect to the construction of the Tenant Improvements and Tenant's Work
(as defined in paragraph 8).
2. Definitions: As used in this Agreement, the following terms
shall have the following meanings, and terms which are not defined below, but
which are defined in the Lease and used in this Agreement, shall have the
meanings ascribed to them by the Lease:
A. Architect: The term "Architect" shall mean the
architect selected by Tenant and approved by Landlord, which architect shall be
retained by Tenant for architectural, engineering, and construction management
and consultant purposes in connection with the Premises.
B. Code-Mandated Work: The term "Code-Mandated Work"
shall mean all changes, repairs and upgrades to the Building, Common Area or
Project required to comply with existing applicable Laws, including seismic,
energy, life safety and handicapped access Laws, which shall be performed at
Landlord's sole cost, except for any improvements to the Premises (which for
the purpose of this definition of "Code-Mandated Work" shall include those
portions of the Building enclosing the Premises) required because of the
construction of the Tenant Improvements.
C. Final Cost Estimate: The term "Final Cost Estimate"
shall mean the estimate of the total Tenant Improvements Costs prepared and
approved by Landlord and Tenant in accordance with this Agreement, and based
upon the Final Tenant Improvement Plans (as defined in paragraph 4C), as
modified by change orders issued in accordance with this Agreement.
D. Preliminary Cost Estimate: The term "Preliminary Cost
Estimate" shall mean an estimate of Tenant Improvement Costs prepared and
approved by Landlord and Tenant in accordance with this Agreement, and based
upon initial or revised preliminary plans and specifications for the Tenant
Improvements.
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94
E. Substantial Completion and Substantially Complete:
The terms "Substantial Completion" and "Substantially Complete" shall each mean
the date when all of the following have occurred with respect to the Tenant
Improvements: (i) the construction of the Tenant Improvements has been
substantially completed in accordance with the requirements of this Lease; (ii)
the Architect shall have executed a certificate or statement representing that
the Tenant Improvements have been substantially completed in accordance with
the plans and specifications therefor; (iii) all utilities to be supplied to
the Premises are hooked up and available for use by Tenant; (iv) the Building
Department of the City of Alameda has completed its final inspection of the
Tenant Improvements and has "signed off" the building inspection card approving
such work as complete; and (v) a temporary Certificate of occupancy has been
issued and the Premises may be legally occupied. Provided, however, if one or
more of the foregoing conditions cannot be satisfied because of Tenant's
failure to obtain the approval by the Alameda County Health Department of
Tenant's Hazardous Materials Management Plan, and such failure results in the
date Substantial Completion otherwise would have been achieved being delayed by
more than thirty (30) days, then each such condition shall be deemed to have
been satisfied as of the date it would otherwise have been satisfied except for
such failure, so long as Landlord demonstrates to Tenant's reasonable
satisfaction the date each such condition would have been satisfied except for
such failure.
F. Tenant Improvement Allowance: The term "Tenant
Improvement Allowance" shall mean the sum of Eight Hundred Nine Thousand Three
Hundred Ninety-Three Dollars ($809,393) ($39.85 per square foot of rentable
area in the Premises).
G. Tenant Improvements: The term "Tenant Improvements"
shall mean all materials, improvements and fixtures installed in the Premises
to the extent such improvements are not Code-Mandated Work and are specified on
the Final Tenant Improvement Plans (as hereinafter defined), but excluding from
the definition of "Tenant Improvements" materials installed by Landlord or TI
Contractor pursuant to this Agreement but supplied by Tenant and the cost of
which was borne by Tenant over and above the Tenant Improvement Costs.
H. Tenant Improvement Costs: The term "Tenant
Improvement Costs" shall mean the lesser of (a) the Final Cost Estimate, or (b)
the total of the following: (i) payments to the TI Contractor (as defined in
paragraph 5A) and its subcontractors for labor and materials furnished for
construction of the Tenant Improvements pursuant to any construction contract
for the Tenant Improvements which is entered into pursuant to the terms of this
Agreement; (ii) reasonable fees paid by Landlord to engineers and other
construction professionals (other than employees of Landlord) for services
required in connection with the design and
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construction of the Tenant Improvements; (iii) utility connection charges; (iv)
the amounts paid to governmental authorities or agencies for inspections and
issuance of building permits and approvals for the Tenant Improvements (but not
that portion of such amounts applicable to, or based on the value of the
Building shell). In no event shall Tenant Improvement Costs include (i)
charges and expenses for changes to the Final Tenant Improvement Plans, which
have not been approved by Tenant; (ii) wages, labor and overhead for overtime
and premium time, unless approved in advance by Tenant in writing (and then not
to exceed the amount so approved by Tenant); (iii) additional costs and
expenses incurred on account of any contractor's or subcontractor's default or
construction defects, the negligent act or omission or willful misconduct of
Landlord or its agents or employees, or Landlord's breach of the Lease; (iv)
principal, interest and fees for construction or permanent financing; (v)
management or other general overhead costs incurred by Landlord; (vi) bond
premiums; (vii) costs for which Landlord has a right of reimbursement from
others (including, without limitation, insurers and warrantors); (viii) costs
incurred as a result of delays caused by the acts or omissions of Landlord or
its employees, agents, contractors or subcontractors; (ix) any cost or expense
which is not required to be incurred in order to complete construction of the
Tenant Improvements; (x) any cost associated with a casualty or act of God; or
(xi) Code- Mandated Work. All of the costs and expenses described in the
preceding sentence shall be the sole obligation of Landlord. The total amount
to be included in Tenant Improvement Costs for profit and overhead charged by
the TI Contractor shall not exceed in the aggregate eight (8) percent (8%) of
the lesser of (a) the cost of labor and materials incorporated in the Tenant
Improvements under the construction contract entered into by Landlord and TI
Contractor pursuant to this Agreement, or (b) the Final Cost Estimate approved
by Tenant pursuant to this Agreement.
3. Schedule of Performance: Landlord and Tenant desire to cause
the Tenant Improvements to be Substantially Completed by the November 15, 1993
(the "Anticipated Commencement Date"). The Anticipated Commencement Date is
based upon information gathered and estimates made by Landlord. Once Tenant's
Requirements (as defined in paragraph 4A) are established, the Anticipated
Commencement Date may be subject to modification based upon Architect's input,
and thereafter the "Anticipated Commencement Date" shall be deemed to be the
date recommended by Architect and approved in writing by Landlord and Tenant.
Achieving Substantial Completion of the Tenant Improvements by the Anticipated
Commencement Date requires that certain objectives be met within certain time
periods. Set forth in this paragraph is a schedule of certain critical dates
relating to Landlord's and Tenant's respective obligations regarding the
construction of the Tenant Improvements (the "Schedule of Performance") that
must be adhered to in order to achieve Substantial Completion of the Tenant
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96
Improvements by the Anticipated Commencement Date. Landlord and Tenant agree
that the following Schedule of Performance may be subject to modification based
upon Architect's input after preparation of the Preliminary Tenant Improvement
Plans (as defined in paragraph 4A), and that the Schedule of Performance shall
be deemed amended to incorporate the time periods recommended by Architect and
approved in writing by Landlord and Tenant. Landlord and Tenant shall each be
obligated to use reasonable efforts to perform their respective obligations
within the time periods set forth in the Schedule of Performance (as the same
may be modified) and elsewhere in this Agreement; provided, however, that the
time periods for such performance shall be extended by events constituting
causes beyond the reasonable control of the party obligated to perform. The
parties acknowledge that the Schedule of Performance is only an estimate of the
time needed to complete certain stages of the construction process, and the
failure of either party to accomplish any step in the process set forth in the
Schedule of Performance shall not constitute a default by either party unless
such failure constitutes a breach of the obligation of a party to use
reasonable efforts to perform its obligations within the time periods set forth
in the Schedule of Performance and elsewhere in this Agreement. Tenant shall
be responsible for the timeliness of Architect's performance, and Landlord
shall be responsible for the timeliness of TI Contractor's performance. Tenant
shall use reasonable efforts to cause Architect to perform its obligations
within the time periods set forth in the Schedule of Performance and in
accordance with the provisions of this Agreement.
Action Responsible
Items Due Date Party
A. Delivery to Within thirty (30) days after satisfaction Tenant
Landlord and of the condition referred to above
Architect of
Tenant's Preliminary
Improvement
Requirements
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B. Meeting(s) Within seven (7) days after Landlord,
with Tenant, delivery of Tenant's Tenant and
Landlord and Preliminary Improvement Architect
Architect to Requirements
Develop Preliminary
Space Plan based on
Tenant's Requirements
C. Delivery to Within fourteen (14) days Architect
Landlord of after the conclusion of the Preliminary
Preliminary Space Plan Meeting(s)
Tenant Improvement
Plans.
D. Approval by Within seven (7) days after Landlord
Landlord of Landlord receives
Preliminary Preliminary Tenant Improvements
Tenant Plans
Improvement
Plans
E. Delivery to Within fourteen (14) days Landlord
Tenant of after approval by Landlord
Preliminary of Preliminary Tenant
Cost Estimate Improvements Plans
F. Approval by Within fourteen (14) days Tenant
Tenant of after Tenant receives
Preliminary Preliminary Cost Estimate
Cost Estimate
G. Delivery to Within forty-two (42) days Architect
Landlord of after approval of Preliminary
Working Cost Estimate
Drawings
H. Approval by Within fourteen (14) days Tenant and
Landlord of after Landlord receives Landlord
Final Tenant working drawings
Improvement
Plans
I. Delivery to Within twenty-one (21) days Landlord
Tenant of after approval by Landlord
Final Cost of Final Tenant Improvement
Estimate Plans
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J. Approval by Within twenty-one (21) days Tenant
Tenant of after Tenant receives Final
Final Cost Cost Estimate
Estimate or
notification
to Landlord by
Tenant of
requirement to
rebid portions
of the Tenant
Improvement
work
K. Landlord Within fourteen (14) days Landlord
rebids Tenant after Tenant requests rebid
Improvement
work, if
required and
submits
revised Final
Cost Estimate
to Tenant
L. Apply for Upon approval of Final Landlord
Building Tenant Improvement Plans
Permit and Final Cost Estimate or,
if applicable, the revised
Final Cost Estimate
M. Obtain Within fifty-six (56) days Landlord,
building after applying for Building Tenant and
permit for Permit Architect
Tenant
Improvements
N. Commencement Upon issuance of the Landlord
of construction building permit
of Tenant
Improvements
O. Substantial Within one hundred forty- Landlord
Completion of seven (147) days after the the
the Tenant commencement of
Improvements construction of the Tenant
Improvements
4. Construction of Tenant Improvements: Landlord shall construct the
Tenant Improvements in accordance with the following:
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A. Development and Approval of Preliminary Tenant
Improvement Plans: on or before the due date specified in the Schedule of
Performance, Tenant shall furnish to Landlord and Architect preliminary
information concerning Tenant's requirements for the Tenant Improvements, and
shall first meet with Landlord and Architect at the time specified in the
Schedule of Performance to establish preliminary room sizes and locations;
partition locations, sizes and type; door locations, size and swings; room
dimensions; location of electrical and telephone outlets; location and extent
of floor loading and floor openings; any special air conditioning, plumbing, or
electrical needs in excess of Landlord's standards for the Building; location
and description of cabinet work and millwork; and any architectural detailing,
lighting, wall, ceiling or floor covering requirements in excess of Landlord's
standards for the Building ("Tenant's Requirements") and to develop a
preliminary space plan based on Tenant's Requirements. On or before the due
date specified in the Schedule of Performance, Architect shall prepare and
deliver to Landlord for its review and approval preliminary plans for the
Tenant Improvements (the "Preliminary Tenant Improvement Plans"). On or before
the due date specified in the Schedule of Performance, Landlord shall either
approve the Preliminary Tenant Improvement Plans or notify Tenant and Architect
in writing of its specific objections to the Preliminary Tenant Improvement
Plans and its proposed modifications to such plans. If Landlord does not
approve the Preliminary Tenant Improvement Plans, the parties (and Architect if
Tenant so elects) shall meet and confer to develop Preliminary Tenant
Improvement Plans that are acceptable to both Landlord and Tenant within five
(5) business days after Landlord has notified Tenant of its objections.
B. Preliminary Cost Estimate: On or before the due date
specified in the Schedule of Performance, Landlord shall prepare and deliver to
Tenant a Preliminary Cost Estimate. On or before the due date specified in the
Schedule of Performance, Tenant shall either approve such cost estimate or
notify Landlord in writing of its specific objections to the cost estimate, or
its proposed modifications to the Preliminary Tenant Improvement Plans to
reduce costs. If Tenant so objects or proposes modifications, the parties (and
Architect if Tenant so elects) shall meet and confer to develop a Preliminary
Cost Estimate or changes to the Preliminary Tenant Improvement Plans to reduce
costs that is/are acceptable to both Landlord and Tenant within five (5)
business days after Tenant has notified Landlord of its objections and to
incorporate such resolution into the Preliminary Tenant Improvement Plans
and/or Preliminary Cost Estimate.
C. Development and Approval of Final Tenant Plans: once
the Preliminary Tenant Improvement Plans have been approved by Landlord and
Tenant (including all changes made to reduce costs or to resolve Landlord's
objections approved by Landlord and Tenant
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pursuant to subparagraphs 4A or 4B), Architect shall complete and submit to
Landlord for its approval final working drawings for the Tenant Improvements by
the due date specified in the Schedule of Performance. Landlord shall approve
the final working drawings for the Tenant Improvements or notify Tenant and
Architect in writing of its specific objections and proposed modifications by
the due date specified in the Schedule of Performance. If Landlord does not
approve the final working drawings for the Tenant Improvements, the parties
(and Architect if Tenant so elects) shall meet and confer to reach agreement
upon final working drawings for the Tenant Improvements within five (5)
business days after Landlord has notified Tenant and Architect of its
objections and to incorporate such resolution into the Final Tenant Improvement
Plans. The final working drawings so approved by Landlord and Tenant
(including all changes made to reduce costs pursuant to subparagraph D or to
resolve Landlord's objections approved by Landlord and Tenant) are referred to
herein as the "Final Tenant Improvement Plans".
D. Final Cost Estimate: On or before the due date
specified in the Schedule of Performance, Landlord shall prepare and deliver to
Tenant the Final Cost Estimate. If Landlord so elects, Landlord may include in
the Final Cost Estimate any costs for overtime and/or premium time that
Landlord reasonably believes shall be required in order to complete the Tenant
Improvements on or before the due date specified in the Schedule of
Performance, and if Landlord does so, it shall specify in reasonable detail the
reasons why such costs are required. on or before the due date specified in the
Schedule of Performance, Tenant shall either approve such cost estimate and the
amount of overtime and/or premium time specified therein by Landlord, or notify
Landlord in writing of its specific objections to the cost estimate and/or the
amount of overtime and/or premium time, or its proposed modifications to the
Final Tenant Improvement Plans to reduce costs, or to the Schedule of
Performance to eliminate the need for overtime and/or premium time. If Tenant
so objects or proposes modifications, the parties shall meet and confer to
develop the Final Cost Estimate or changes to the Final Tenant Improvement
Plans to reduce costs or changes to the Schedule of Performance to eliminate
the need for overtime and/or premium time, that is/are acceptable to both
Landlord and Tenant, within five (5) business days after Tenant has notified
Landlord of its objections and to incorporate such resolution into the Final
Tenant Improvement Plans, Schedule of Performance and/or Final Cost Estimate.
If Tenant believes that the Final Cost Estimate is incorrect because of a
substantial increase in a particular subcontractor's bid, or the addition of a
new material item of work, or a new subcontract, it may require that all or any
portion of the work to be performed by the applicable subcontractors be
resubmitted for competitive bid, by notice to Landlord specifically identifying
those items to be rebid and Tenant's objective in requiring such rebid.
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E. Building Permit: As soon as the Final Tenant
Improvement Plans and Final Cost Estimate have been approved by Landlord and
Tenant, Landlord shall apply for a building permit for the Tenant Improvements,
and shall diligently prosecute to completion such approval process.
F. Commencement of Tenant Improvements: On or before the
due date specified in the Schedule of Performance, Landlord shall commence
construction of the Tenant Improvements and shall diligently prosecute such
construction to completion, using all reasonable efforts to achieve Substantial
Completion of the Tenant Improvements by the Anticipated Commencement Date.
5. Construction Contract: The following shall govern the manner
in which the construction contract shall be let by Landlord for the
construction of the Tenant Improvements:
A. Landlord shall engage as general contractor to
construct the Tenant Improvements a contractor selected by Landlord and
approved in writing by Tenant (the "TI Contractor"). Prior to the execution of
a construction contract with the TI Contractor, Landlord shall furnish the
proposed contract to Tenant, for its written approval. The construction
contract shall require either: (i) the TI Contractor to provide a payment and
performance bond for construction of the Tenant Improvements in accordance with
the Final Cost Estimate; or (ii) the TI Contractor to obtain from each
subcontractor furnishing labor under such contract a payment and performance
bond for construction of that portion of the Tenant Improvements covered by
each such subcontract (or by all such subcontractors performing a material
portion of the work, subject to the reasonable approval of Tenant and
Landlord's construction lender), in which case the TI Contractor shall provide
a completion guaranty (in form and substance reasonably satisfactory to Tenant
and Landlord's construction lender) with respect to the TI Contractor's
performance under the TI Contract to the extent not covered by the bonds
provided by subcontractors.
B. All subcontractors for the Tenant Improvements shall
be chosen by a competitive bid process where (i) Tenant shall have the right to
approve subcontractors who bid on specific parts of the job, (ii) the
subcontract shall be awarded to the lowest responsible bidder unless Landlord
and Tenant otherwise agree, and (iii) Tenant shall have the right to cause a
subcontract to be rebid if Tenant does not approve the low bid. Tenant shall
have a right to review and approve all bid documents prior to submission to
subcontractors and all subcontractors' bids.
6. General Design and Construction obligations: The following
shall govern the construction of the Tenant Improvements:
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A. During the course of construction, Landlord shall
arrange for all inspections of the progress of the construction of the Tenant
Improvements by all authorities having jurisdiction over such construction
required in order to obtain all necessary approvals and certificates with
respect to such construction. Landlord shall make available to Tenant reports
of all such inspections and the status of such approvals and certificates as
well as copies thereof upon request.
B. Unless otherwise specifically provided in this
Agreement, any approval, consent, designation, determination or judgement by
either Landlord or Tenant hereunder shall not be unreasonably withheld or
delayed.
C. At all times subsequent to the commencement of
construction, Landlord shall maintain (i) insurance satisfying the requirements
of Section 8.3 of the Lease and additionally (A) providing coverage in an
amount that includes the Final Cost Estimate, and (B) designating Tenant as a
named insured, and (ii) comprehensive general liability insurance satisfying
the requirements of Section 8.2.1 of the Lease, and providing that Tenant is an
additional insured. Tenant may be removed as a named insured under paragraph
6.C(i)(B) and as an additional insured under paragraph 6.C(ii) upon the later
of: (a) the Commencement Date; or (b) the date a temporary Certificate of
Occupancy has been issued and the Premises may be legally occupied. The
insurance policies (i) shall be in a form reasonably satisfactory to Tenant,
(ii) shall be carried with a company reasonably acceptable to Tenant, (iii)
shall provide that each such policy shall not be subject to cancellation or
change except after at least ten (10) days prior written notice to Tenant, and
(iv) shall contain a "cross liability" provision insuring Landlord and Tenant
against any loss caused by the negligence of the other party. Any deductible
under such policies must be approved in advance by Tenant.
D. Landlord shall submit to Tenant on a monthly basis an
accounting of all Tenant Improvement costs. Tenant shall have the right to
audit the books, records and supporting documents of Landlord during normal
business hours, after giving Landlord at least 24 hours prior notice, to the
extent reasonably necessary to determine the accuracy of any accounting.
Within forty-five (45) days after Substantial Completion of the Tenant
Improvements, Landlord shall render to Tenant a final and detailed accounting
of all Tenant Improvement Costs paid by Landlord and Tenant, certified as true
and correct by Landlord. Tenant shall have the same audit rights with respect
to the final accounting as set forth above with respect to the monthly
accountings. If such audit discloses that any overpayment or underpayment was
made by Tenant, there shall be an adjustment between Landlord and Tenant as
soon as reasonably
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practicable such that each shall only be required to contribute the payment of
costs to the extent provided for in this Agreement.
E. No approval by Tenant (or its representative) of any
plan or specification, or of completion of the construction work performed by
Landlord, shall constitute a waiver of any item required herein (except as
otherwise specifically required by this Agreement or as specifically noted as
eliminated or changed in the written approval given by Tenant), or a waiver of
release of Landlord from the warranty given by it pursuant to paragraph 11
hereof.
7. Changes to Approved Plans: Once the Final Tenant Improvement
Plans have been approved by Landlord and Tenant, neither shall have the right
to order extra work or change orders with respect to the construction of the
Tenant Improvements without the prior written consent of the other. Landlord
and Tenant understand that after Landlord's and Tenant's approval of the Final
Cost Estimate and the Final Tenant Improvement Plans, changes to the working
drawings may be required by governmental agencies and/or entities having
jurisdiction over the Tenant Improvements. In the event any such changes are
required, Landlord and Tenant shall expeditiously agree upon and issue
appropriate plan revisions and change orders incorporating such required
changes. Landlord shall not unreasonably withhold or delay its consent to
changes or extra work proposed by Tenant. Tenant may withhold its consent, in
its discretion, to any change in the Final Tenant Improvement Plans or Final
Cost Estimate proposed by Landlord (unless the change is required by applicable
law), it being understood between the parties that Tenant shall have broad
discretion in planning the Tenant Improvements. All extra work or change
orders requested by either Landlord or Tenant shall be made in writing, shall
specify any added or reduced cost and/or construction time resulting therefrom,
and shall become effective and a part of the Final Tenant Improvement Plans,
once approved in writing by both parties. If a change order requested by
Tenant results in a net increase in the cost of constructing the Tenant
Improvements, Tenant shall pay the amount of such increase caused by the change
order requested by Tenant at the time the change order is approved by both
Landlord and Tenant, if and to the extent such change order causes the Tenant
Improvement Costs to exceed Landlord's required contribution thereto.
8. Tenant's Work. Any work not shown on the Final Tenant
Improvement Plans, to be performed before the Tenant Improvements are
Substantially Complete, and for which Tenant contracts separately ("Tenant's
Work") shall be performed in accordance with the following provisions of this
paragraph 8. The term "Tenant's Work" as used herein shall exclude the
installation or delivery to the Premises of Tenant's furniture or other
personal property or any of
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Tenant's moveable and unattached equipment or fixtures (collectively "Tenant's
Personal Property").
A. Tenant shall cause Architect to prepare detailed
architectural drawings and specifications for Tenant's Work, and deliver the
same to Landlord for its approval. Within seven (7) days after such plans are
presented to Landlord, Landlord shall approve or disapprove the same. If
Landlord disapproves such plans, it shall notify Tenant in writing of its
specific objections and proposed modifications at the time it notifies Tenant
that the plans are not approved. In such event, the parties (and Architect if
Tenant so elects) shall meet and confer to reach agreement upon the plans
within five (5) business days after Landlord has notified Tenant of its
objections and to incorporate such resolution into the plans for Tenant's Work.
Tenant shall not commence construction of Tenant's Work until all required
building permits or other permits required for such work have been obtained.
Notwithstanding Landlord's review and approval of Tenant's plans and
specifications for Tenant's Work, or failure by Landlord to object to any such
work, Landlord shall have no responsibility therefore, including but not
limited to compliance with governmental regulations. After the plans and
specifications for Tenant's Work have been approved by Landlord, no substantial
changes shall be made thereto without the prior written consent of Landlord.
B. Tenant and its agents or representatives shall have a
nonexclusive revocable license for access and entry to the Premises and
reasonable use of Building facilities (including any facilities for storage and
protection of construction materials) to the same extent and upon the same
terms and conditions as facilities are available to the subcontractors of the
TI Contractor, for the purpose of enabling Tenant to (i) adapt the Premises for
Tenant's use, (ii) construct or install Tenant's Work, and (iii) deliver and
install Tenant's Personal Property.
C. The entry into the Premises or the Building by Tenant
or its agents or representatives for any purpose before the Commencement Date
shall be subject to all the terms and conditions of the Lease (other than the
payment of Monthly Base Rent or Additional Rent), including but not limited to
Tenant's indemnity obligations. Certificates of insurance as required by the
Lease shall be delivered before the start of Tenant's Work. All of Tenant's
materials, work, installations and decorations of any nature brought on or
installed in the Premises before the Commencement Date shall be at Tenant's
risk, and neither Landlord nor any party acting on behalf of Landlord shall be
responsible for any damage thereto or loss or destruction thereof, except to
the extent of such party's negligence or willful misconduct.
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D. Tenant shall conduct its work in the Premises in such
a manner as to maintain harmonious labor relations so as not to interfere with
or delay the work of the TI Contractor. If at any time, entry or work by
Tenant or its agents or representatives shall cause any disharmony or
interference with work performed by or under the direction of TI Contractor,
the license granted in subparagraph 8B may be withdrawn on 48 hours written
notice to Tenant; provided, however, that the license granted in that
subparagraph shall be reinstated as soon as reasonably practicable, so long as
Tenant's re-entry in the Premises does not interfere with TI Contractor's
construction activities in the Premises.
E. All of Tenant's Work shall be performed by persons
reasonably acceptable to and approved by Landlord in writing, which persons
shall employ means to insure, insofar as may be reasonably possible, the
progress of Tenant's Work without interruption on account of strikes, work
stoppage or similar causes for delay, and Tenant shall pay for the repair,
replacement or cleanup of any damage done by them to the Building or to other
contractor's work.
F. Tenant shall advise Landlord in writing not less than
ten (10) days before the date upon which Tenant's Work will commence, in order
to permit Landlord to post appropriate Notices of Nonresponsibility. Any final
hook-up or final connection of Tenant's Work to the plumbing, electrical or
other utility systems serving the Premises shall be performed by the TI
Contractor. Subject to the foregoing, Tenant shall cause a Notice of
Completion to be recorded promptly following completion of Tenant's Work.
Tenant shall provide Landlord with releases of mechanic's and materialmen's
liens from Tenant's contractor and all subcontractors, materialmen and other
persons who may be entitled to assert mechanic's or materialmen's liens with
respect to any portion of Tenant's Work, and shall hold Landlord harmless from
any such claim, asserted claims or liens.
9. Delay in Completion Caused by Tenant: The parties hereto
acknowledge that the date on which Tenant's obligation to pay the Base Monthly
Rent and the Additional Rent would otherwise commence may be delayed because of
written change orders requested by Tenant and approved by Landlord after
completion and approval of the Final Tenant Improvement Plans and Final Cost
Estimate. It is the intent of the parties hereto that the commencement of
Tenant's obligation to pay the Base Monthly Rent and all Additional Rent not be
delayed by any such change order, and in the event it is so delayed, the date
Tenant's obligation to pay the Base Monthly Rent and all Additional Rent shall
commence shall be advanced by one (1) day for each day of actual delay in
Substantial Completion caused by any such change order (but not to exceed the
number of days of delay specified in the written change order).
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10. Delivery of Possession, Punch List. and Acceptance Agreement:
As soon as the Tenant Improvements are Substantially Completed, Landlord and
Tenant shall together inspect the Tenant Improvements. After such inspection
has been completed, each party shall sign an acceptance agreement which shall
(i) include a list of all "punch list" items which the parties agree are to be
corrected by Landlord and (ii) shall state the Commencement Date and the
rentable area of the Premises. Landlord shall use reasonable efforts to
complete and/or repair such "punch list" items within thirty (30) days after
executing the acceptance agreement.
11. Standard of Construction and Warranties: Landlord hereby makes
the following warranties:
A. Landlord warrants that all materials and equipment
included in the Tenant Improvements shall conform to all CC&R's and all Laws.
B. Landlord warrants that the Tenant Improvements shall
be constructed in a good and workmanlike manner substantially in accordance
with the Final Tenant Improvement Plans (as modified by change orders approved
by Landlord and Tenant), all CC&R's, all Laws, and all requirements of Tenant's
insurer. All materials and equipment furnished shall be new, of good quality,
and installed in accordance with the vendor's or manufacturer's specifications,
instructions and requirements.
C. Landlord warrants that all materials and equipment
furnished by it shall be fully paid for and be free of liens or chattel
mortgages.
D. Once Landlord is notified in writing of any breach of
the above-described warranty, Landlord shall promptly commence the cure of such
breach and complete such cure with diligence at Landlord's sole cost and
expense.
12. Payment of Improvement Costs: The Tenant Improvement Costs
shall be paid as follows:
A. Tenant Improvement Allowance: Landlord shall apply
the full amount of the Tenant Improvement Allowance to the Tenant Improvement
Costs. All other costs payable by Landlord pursuant to this Agreement
(including without limitation those costs payable solely by Landlord pursuant
to subparagraph 2.H and any Tenant Improvement Costs in excess of the Final
Cost Estimate that are not the responsibility of Tenant pursuant to paragraph
7) shall be paid directly by Landlord. Tenant Improvement Costs in excess of
the Tenant Improvement Allowance shall be paid by as provided in subparagraph B
below; and
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B. Payment of Excess Tenant Improvement Costs: If the
Final Cost Estimate exceeds the Tenant Improvement Allowance, Tenant shall be
obligated to pay approved Tenant Improvement Costs (not to exceed the Final
Cost Estimate approved by Tenant in writing) in excess of the Tenant
Improvement Allowance ("Tenant's Share"). The balance of the Tenant
Improvement Costs (except for amounts payable by Tenant for change orders as
described below) is hereinafter referred to as "Landlord's Share." Tenant shall
deposit, prior to commencement of construction of the Tenant Improvements, one
hundred percent (100%) of Tenant's Share with Landlord, on condition that
Landlord has signed and delivered to Tenant the agreement attached hereto as
Schedule 1, and incorporated herein by this reference (the "Disbursement
Agreement"). Landlord's Share shall be made available by Landlord, and
Landlord's Share and Tenant's Share shall be held and disbursed by Landlord, on
a pro rata basis, as set forth in the Disbursement Agreement. In this regard,
the parties acknowledge that payments shall be made to the TI Contractor on a
progress payment basis, but that no such payments (until the final payment)
shall exceed ninety percent (90%) of the portion of the Tenant Improvement
Costs allocated to the work performed and labor and materials furnished, as
shown by the applicable request for payment and not shown in any prior request.
To determine the amount of any such progress payment payable with Tenant's
funds, ninety percent (90%) of the amount requested shall be multiplied by the
percentage derived by dividing Tenant's Share by the Final Cost Estimate.
Landlord shall disburse such amount and Landlord's Share of the progress
payment in accordance with the provisions of the Disbursement Agreement. As an
example of the foregoing, if the total Final Cost Estimate is $1,000,000, and
assuming the Tenant Improvement Allowance is $600,000, Tenant Share of the
Tenant Improvement Costs would be $400,000. Assuming further a progress
payment request from the TI Contractor in the amount of $100,000, the amount of
the progress payment payable with Tenant's funds would be $36,000 ($400,000
$1,000,000 = 40%. $100,000 x 90% = $90,000. $90,000 x 40% $36,000), and the
balance of the payment would be made with Landlord's funds. If, at any time
following Tenant's initial deposit with Landlord, the Tenant Improvement Costs
increase because of change orders approved by Tenant as provided for herein,
then Tenant shall deposit with Landlord, at the time and to the extent required
under paragraph 7 hereof, the amounts payable by Tenant with respect to such
change order. Disbursements to the TI Contractor for change order payments for
which Tenant is responsible shall be made entirely from funds deposited with
Landlord by Tenant. This Agreement and the Lease are conditioned upon
execution of the Disbursement Agreement by Landlord concurrently with the
execution of the foregoing agreements, and by Landlord within 15 business days
after this Agreement and the Lease are signed by Landlord and Tenant. If such
condition is not satisfied within such period, Tenant shall, within ten (10)
business days thereafter, either waive such condition or notify
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Landlord of the termination of the Lease and this Agreement. Landlord shall
use its best efforts to cause the foregoing condition to be satisfied.
C. Application of Excess Allowance: In the event the
Tenant Improvement Costs are less than the Tenant Improvement Allowance, Tenant
may elect to have the balance of the Tenant Improvement Allowance applied to
(i) the cost of Tenant's Work, and/or (ii) fees paid by Tenant to architects,
space planners, designers, inspectors and other construction professionals in
connection with the Tenant Improvements and/or Tenant's Work.
13. Dispute Resolution: Landlord and Tenant agree that in
resolving any issue concerning which they are obligated to meet and confer
under the provisions of this Agreement, or any other dispute that may arise
during the course of construction of the Tenant Improvements or Tenant's Work,
they shall both (i) act reasonably and in good faith, (ii) devote such time and
resources as are reasonably necessary to resolve the issue in dispute in an
expeditious manner, and (iii) apply the standards set forth in this Agreement
to resolve the matter. The "standards set forth in this Agreement" to be
applied by Landlord and Tenant to resolve objections pursuant to subparagraphs
4A, 4B, 4C, 4D and 8A shall be (i) that Tenant shall be permitted freedom in
interior design and layout of the Premises, so long as the Tenant Improvements
(or Tenant's Work with respect to subparagraph 8A) necessary to meet Tenant's
Requirements will (A) be consistent with Landlord's current "as-built" plans
and specifications, and basic building plans and specifications for the HVAC,
mechanical, electrical and plumbing components of the Building as they relate
to the Premises, (B) comply with applicable building codes, and (C) not
adversely affect the structural integrity of the Building or the operation of
the Building's electrical or mechanical systems, (ii) any plans or
specifications that have been previously approved by Landlord and Tenant, (iii)
the requirement that at each stage of development, the plans and specifications
in question are to be the logical and reasonable evolution and development of
plans and specifications previously approved by Landlord and Tenant, (iv)
Landlord and Tenant are obligated to act reasonably and in good faith, and (v)
unless there is an agreement to the contrary, Landlord and Tenant have agreed
that the improvement requirements of each shall be evaluated in accordance with
custom prevailing in Alameda County for the development of comparable
facilities. Landlord and Tenant acknowledge their intent to promptly and
reasonably resolve all disputes so as to cause the Tenant Improvements to be
Substantially Completed in an expeditious manner.
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110
14. Effect of Agreement: In the event of any inconsistency between
this Agreement and the Lease or any other exhibit attached to the Lease, the
terms of this Agreement shall prevail.
LANDLORD: TENANT:
COMMERCIAL CENTER BANK, a URNOTECH CALYPTE BIOMEDICAL
California corporation CORPORATION, a California
corporation
By: [Illegible] By: /s/ David J. Robison
-------------------------------- -----------------------------------
Its: Sr. V.P. Title: President and Chief Officer
------------------------------ ----------------------------
By: Don Bruner Dated: 9/30/92
-------------------------------- -----------------------------
Its: Vice President
--------------------------
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DISBURSEMENT AGREEMENT
THIS DISBURSEMENT AGREEMENT is entered into as of the 30th day of
September, 1992, by and between Commercial Center Bank, a California banking
corporation ("Landlord"), and Urnotech Calypte Biomedical Corporation, a
California corporation ("Urnotech").
W I T N E S S E T H
A. Urnotech and Landlord have entered into a certain lease (the
"Lease"), and a work letter (the "Work Letter'), both dated September 30, 1992,
covering certain space in Building B, 1265 Harbor Bay Parkway, Alameda,
California, more particularly described in the Lease (the "Premises") located
in and upon the real property described in Exhibit 1 attached hereto (the
"Property");
B. The Work Letter provides that Urnotech and Landlord shall each
contribute to the cost of Tenant Improvements (as defined therein) for the
Premises, and shall pay through Landlord their respective share (as defined
hereinafter) of such costs, on a progress payment basis. Urnotech's share of
approved Tenant improvement Costs ("Urnotech's Share") is specified in the Work
Letter to be an amount equal to the difference between the Final Cost Estimate
and the Tenant Improvement Allowance (as those terms are defined in the Work
Letter). Landlord's share of such Tenant Improvement Costs is specified in the
Work Letter to be all Tenant Improvement Costs in excess of Urnotech's Share.
The Work Letter provides that Landlord shall furnish as a Tenant Improvement
Allowance the sum of $809,393 ($39.85 per square foot), hereinafter referred to
as "Landlord's Tenant Improvement Allowance." That portion of progress payments
to the TI Contractor (as defined hereinafter and in the Work Letter) payable
with Urnotech's funds from Urnotech's Share pursuant to the Work Letter shall
be determined by multiplying ninety percent (90%) of the requested payment by
that percentage ("Urnotecl's Payment Percentage") derived by dividing
Urnotech's Share by the Final Cost Estimate and that portion of the progress
payments to the TI Contractor payable from Landlord's Tenant Improvement
Allowance shall be determined by multiplying ninety percent (90%) of the
requested payment by that percentage ("Landlord's Payment Percentage") derived
by dividing Landlord's Tenant Improvement Allowance by the Final Cost Estimate;
and
C. Landlord has agreed to make available Landlord's Tenant
Improvement Allowance, to hold Landlord's Tenant Improvement Allowance and
Urnotech's Share deposited with Landlord in separate accounts, and to disburse
Landlord's Tenant Improvement Allowance and Urnotech's Share on a pro rata
basis in accordance with the terms of this Agreement.
112
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and of other good and valuable consideration the receipt and sufficiency
of which is hereby acknowledged, the parties hereby agree as follows:
1. Recitals. The parties agree that the foregoing
recitals are true and correct and are incorporated hereby into the text of this
Agreement.
2. Landlord's Tenant Improvement Allowance. Landlord
agrees to: (i) place in a separate account funds in an amount equal to $809,393
representing one hundred percent (100%) of Landlord's Tenant Improvement
Allowance; (ii) subject to the terms and conditions set forth hereinafter,
disburse such funds for Tenant Improvement Costs pursuant to this Agreement.
The account established pursuant to this paragraph 2, is hereinafter referred
to as "Landlord's Account
3. Urnotech's Share. Urnotech agrees to deposit one
hundred percent (100%) of Urnotech's Share with Landlord at least fourteen (14)
days prior to the commencement of construction of the Tenant Improvements.
Urnotech further agrees that, if at anytime following the deposit of Urnotech's
Share with Landlord, the Tenant Improvement Costs increase because of change
orders approved by Urnotech in accordance with the Work Letter, then Urnotech
shall, as a condition precedent to Landlord's obligation to continue
disbursements of Landlord's Payment Percentage from Landlord's Account, deposit
with Landlord, at the time and to the extent required pursuant to the Work
Letter, the amount payable by Urnotech with respect to such change order.
Urnotech hereby instructs Landlord, and Landlord agrees to (i) place Urnotech's
Share, and any subsequent deposit by Urnotech for change orders, in a separate
account in Urnotech's name, and (ii) disburse such funds for Tenant Improvement
Costs pursuant to this Agreement. The account established pursuant to this
paragraph 3, is hereinafter referred to as "Urnotech's Account".
4. Disbursements. Urnotech and Landlord hereby agree
that disbursements from Landlord's Account and Urnotech's Account shall be made
as follows:
(a) No disbursement shall exceed ninety percent
(90%) of the portion of the Tenant Improvement Costs allocated to the work
performed and labor and materials furnished, as shown by applicable request for
disbursement and not shown in any prior request, except as provided in
paragraph 5 below. A portion of each progress payment due to the TI Contractor
equal to that amount determined by multiplying Urnotech's Payment Share by
ninety percent (90%) of the amount requested shall be disbursed to the TI
Contractor from Urnotech's Account, and the portion thereof equal to the amount
determined by multiplying Landlord's
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Payment Percentage by ninety percent (90%) of the amount requested shall be
disbursed to the TI Contractor from Landlord's Account. However: (i)
disbursements to the TI Contractor for change order payments for which Urnotech
is responsible pursuant to the Work Letter, shall be made entirely from
Urnotech's Account and shall be made as and when due as a condition precedent
to Landlord's obligations to make any further disbursements from Landlord's
Account; and (ii) disbursements to the TI Contractor for Tenant Improvement
Costs in excess of the Final Cost Estimate (other than disbursements for change
order payments payable by Urnotech (i)), if any, shall be paid by Landlord when
and if due from its own funds separate from Landlord's Tenant Improvement
Allowance, as specified in paragraph 12 of the Work Letter.
(b) Disbursements shall be based on Urnotech's
written and signed requests. (at a time and in a form satisfactory to Landlord)
certified by the TI Contractor. Each disbursement request shall also contain a
representation by Urnotech that the Lease is then in full force and effect and
that neither party is then in default under the Lease.
(c) Each disbursement shall be conditioned on
Urnotech's confirmation in writing that Urnotech's architect has inspected,
reviewed and approved the work covered by the requested disbursement,
Landlord's independent inspector has inspected, reviewed and approved the work
covered by the requested disbursement, and Landlord has received copies of all
invoice and other satisfactory evidence of completion relative to such work.
(d) Disbursements shall be made not more
frequently than monthly.
(e) Disbursements shall not be made prior to
receiving appropriate lien waivers or releases from all contractors,
subcontractors and materialmen as prescribed under Civil Code Section 3262 for
all work performed and materials furnished which were shown in any prior
request.
(f) No disbursements shall be made unless and
until the construction contract with the TI Contractor and all subcontracts
with subcontractors have been entered into.
5. Disbursements of Retention. Urnotech and Landlord hereby
agree that disbursements from Landlord's Account and Urnotech's Account shall
be made to TI Contractor with respect to the amounts retained pursuant to
paragraph 4, upon satisfaction of the following conditions:
(a) Recordation of all applicable notices of
completion covering the Tenant Improvements, and expiration of
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the period for recording notices of mechanic's liens with respect to the Tenant
Improvements;
(b) Receipt by Landlord of such written waivers
of lien rights and affidavits that all bills for labor and materials have been
paid, and evidence that no notice of mechanic's lien, stop notice or a legal
process under any mechanic's lien law or similar law has been recorded, issued,
outstanding or served on Landlord;
6. Miscellaneous. Landlord and Urnotech represent and warrant
that the individuals executing this Agreement on behalf of such party is duly
authorized to execute and deliver this Agreement on behalf of such party, and
this Agreement is binding upon such party in accordance with its terms. All
schedules attached hereto are incorporated herein by this reference. The
headings used in this Agreement are for convenience of reference only, and
shall not be construed to limit or extend the meaning Of any part of this
Agreement. No amendment, change or addition to this Agreement shall be binding
unless in writing and signed by the parties hereto. In the event any party
hereto shall bring an action to enforce or to interpret this Agreement, the
losing party shall pay the prevailing party's attorneys' fees and costs. If
any provision contained herein is held to be invalid, illegal or unenforceable,
such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement, and this Agreement shall be construed as if such
invalid, illegal or unenforceable provision had not been contained herein.
LANDLORD
COMMERCIAL CENTER BANK, a
California banking corporation
By: [Illegible]
----------------------------------
Title: Sr. V.P.
-------------------------------
By: /s/ Don Burnet
----------------------------------
Title: Vice President
-------------------------------
TENANT
URNOTECH CALYPTE BIOMEDICAL
CORPORATION, a California
corporation
By: /s/ David J. Robison
------------------------------
Title: President and Chief
Executive Officer
---------------------------
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Exhibit 1
All that certain real property situated in the City of Alameda, County of
Alameda, State of California, described as follows:
PARCEL ONE:
Parcel 2, Parcel Map 4124, filed September 13, 1983, Parcel Map Book 141, Page
8, Alameda County Records.
PARCEL TWO:
An easement for ingress and egress and utilities as an appurtenance to Parcel
One over that portion described as Easement B, Parcel Map 4124 filed September
19, 1983, Parcel Map Book 141, Page 8, Alameda County Records.
A.P.N. 074-1339-026