EXHIBIT 10.13
SUBLEASE
THIS SUBLEASE ("Sublease"), dated January 6, 1999, for reference
purposes only, is entered into by and between LYNX THERAPEUTICS, INC., a
Delaware corporation ("Sublessor") and KOSAN BIOSCIENCES INCORPORATED, a
California corporation ("Sublessee").
RECITALS
A. Sublessor leases certain premises consisting of approximately
44,280 square feet in a building commonly known as 3832 Bay Center Place,
Hayward, California 94545 (the "Building"), pursuant to a certain Lease
Agreement dated June 28, 1993, between Spieker-Singleton #87, Limited
Partnership as landlord (hereinafter "Master Lessor"), and Sublessor, as tenant,
(as amended or otherwise modified from time to time, the "Master Lease"), a copy
of which is attached hereto as EXHIBIT A, together with certain improvements
therein and appurtenances thereto as described in the Master Lease (said
premises, together with said improvements and appurtenances, hereinafter the
"Premises"). Capitalized terms herein not otherwise defined herein shall have
the same meanings as provided in the Master Lease.
B. Sublessor desires to sublease to Sublessee, and Sublessee
desires to sublease from Sublessor a portion of the Premises consisting of
37,982 square feet, and more particularly shown on the layout attached at
EXHIBIT B hereto ("Sublease Premises") upon the terms and conditions provided
for herein.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein, Sublessor and Sublessee covenant and agree as follows:
AGREEMENT
1. SUBLEASE PREMISES. Sublessor hereby leases to Sublessee, and
Sublessee hereby leases from Sublessor, the Sublease Premises, upon and subject
to the terms and conditions set forth herein. In connection with its use of the
Sublease Premises, and to the extent Sublessor has the right under the Master
Lease, Sublessee shall have the right to use in common with Sublessor and any
other occupant of the Building the common areas outside the Building, including
the walkways, parking areas, loading and unloading areas, driveways and
entrances, as well as the common areas within the Building, including, the
hallways, stairways, common areas, restrooms, and other areas that may be
reasonably necessary for Sublessee's use of the Sublease Premises; provided,
however that Sublessee shall only have the nonexclusive right to use 152 of the
parking spaces leased to Sublessor pursuant to the Master Lease.
2. TERM.
(a) The term of this Lease shall commence on the later of
(i) February 1, 1999 or (ii) the date when the Sublessor has delivered
possession of the Sublease Premises to Sublessee (the "Commencement Date").
Sublessor shall use commercially reasonable efforts to cause the Commencement
Date to occur on February 1, 1999.
1.
(b) Notwithstanding said Commencement Date, if for any
reason Sublessor cannot deliver possession of the Sublease Premises to Sublessee
on said date, Sublessor shall not be subject to any liability therefor, nor
shall such failure affect the validity of this Sublease or the obligations of
Sublessee hereunder or extend the term hereof, but in such case Sublessee shall
not be obligated to pay Rent until possession of the Sublease Premises is
tendered to Sublessee. If the Commencement Date shall not have occurred by April
1, 1999, Sublessee shall have the right, until May 1, 1999, to terminate this
Sublease upon written notice to Sublessor, whereupon, any monies previously paid
or deposited by Sublessee to Sublessor shall promptly be refunded to Sublessee.
(c) The term of this Lease shall end on July 31, 2003;
PROVIDED, HOWEVER, that the term of this Sublease shall earlier terminate in the
event of the earlier termination of the Master Lease.
(d) If at any time during the term of this Sublease,
Sublessor determines to sublease all or any part of the remainder of the
Premises (the "Remaining Premises") other than the current sublease for the
Remaining Premises (the "Inex Sublease") with Inex Pharmaceuticals (U.S.A.),
Inc. ("Inex"), which includes a right to extend, then Sublessor shall notify
Sublessee in writing and Sublessee shall have ten (10) business days after
receipt of Sublessor's written notice to notify Sublessor in writing its
intention to sublease such Remaining Premises. The terms of any such subletting
of the Remaining Premises shall be on the same terms and conditions as this
Sublease, except that the rent shall be the greater of (i) fair market rent or
(ii) the rent payable during the previous period for the Sublease Premises. The
term "fair market rent" shall mean the rental rate for comparable space
(including all tenant improvements), in comparable business parks within a ten
(10) mile radius of the Building's perimeter, excluding San Mateo County. If
Sublessee timely provides Sublessor with notice of its election to sublease the
Remaining Premises within said ten (10)-business day period then the parties
shall consummate the sublease of such space by the preparation and execution of
any amendment to this Sublease within thirty (30) days after Sublessor's receipt
of Sublessee's notice. If Sublessee does not indicate in writing its election to
sublease such Remaining Premises within said ten (10)-business day period, then
Sublessor shall have the right to sublease such premises to a third party.
Nothing contained in this section shall be construed to give Sublessee the right
to sublease the Remaining Premises if Sublessor uses the Remaining Premises for
its own occupancy. If the parties are unable to agree upon the fair market rent
for the Remaining Premises within fifteen (15) days after Sublessee's exercise
of its right of first offer to sublease the Remaining Premises, then the fair
market rent shall be determined as follows: Sublessor and Sublessee shall each
appoint one (1) real estate appraiser, which appraisers together shall determine
the fair market rent for the Remaining Premises within fifteen (15) days of
their appointment. Sublessor and Sublessee agree to make their appointments
promptly. In the event the two appraisers selected by Sublessor and Sublessee
shall be unable to agree on the amount of fair market rent, they shall promptly
select a third appraiser and within fifteen (15) days after the third appraiser
is selected, the third appraiser shall submit his or her determination of the
then prevailing fair market rent. The fair market rent shall be the mean of the
two closest rental determinations. Each party shall bear the fees and expenses
of the appraiser it selects and one-half of the fees and expenses of the third
appraiser (if one is appointed pursuant to the terms hereof). All real
appraisers appointed shall be members of the American Institute of Real Estate
Appraisers and have at least five (5)
2.
years experience appraising similar space located in commercial projects in the
vicinity of the Remaining Premises.
3. USE. Sublessee shall be permitted to use the Sublease Premises
consistent with the Permitted Use set forth in the Master Lease, and consistent
with the applicable requirements of the City of Hayward.
4. RENT.
(a) BASE RENT. Starting on the Commencement Date, Sublessee
shall pay as base rent ("Base Rent") for the Sublease Premises in advance, on or
before the first day of each month, without deduction or offset, monthly rent in
the amounts set forth below. Base Rent and Additional Rent (defined below) shall
be payable to Sublessor at the address stated herein for Sublessor. Base Rent
and Additional Rent shall collectively be referred to herein as "Rent." Rent for
any period during the term hereof which is for less than one month shall be a
pro rata portion of the monthly installment based on the number of days in the
month at issue.
PERIOD MONTHLY RENT (EXCLUSIVE
OF BASIC OPERATING COST)
02/01/99 - 01/31/00 $70,646.52
02/01/00 - 01/31/01 $72,545.62
02/01/01 - 01/31/02 $74,444.72
02/01/02 - 01/31/03 $76,343.82
02/01/03 - 07/31/03 $78,242.92
(b) ADDITIONAL RENT. Sublessee shall pay to Sublessor, as
additional rent ("Additional Rent"), its pro rata share of the additional
amounts which Sublessor is required to pay under the Master Lease with respect
to the Premises, which are allocable to the term hereof, including, but not
limited to, Sublessor's Pro Rata share of Basic Operating Costs. In addition,
Sublessee shall pay to Sublessor as Additional Rent any costs and expenses
applicable to the Sublease Premises which are paid directly by Sublessor,
including, but limited to, personal property taxes and real property taxes on
tenant improvements.
5. SECURITY DEPOSIT. Upon mutual execution of this Sublease,
Sublessee shall deposit with Sublessor the amount of $156,485.84 as a security
deposit, which sum shall be held by Sublessor, without obligation for interest,
as security for the performance of Sublessee's covenants and obligations under
this Sublease, it being expressly understood and agreed that such deposit is not
an advance rental deposit or a measure of damages incurred by Sublessor in case
of Sublessee's default. Upon the occurrence of any event of default by Sublessee
beyond the applicable notice and cure period, Sublessor may, without prejudice
to any other remedy provided herein or provided by law, use such fund to the
extent necessary to cure such defaults hereunder, and any other damage, injury,
expense or liability caused by such event of default, and Sublessee shall pay to
Sublessor, within ten (10) days after Sublessee's receipt of written demand, the
amount so applied in order to restore the Security Deposit to its original
amount. Although the Security Deposit shall be deemed the property of Sublessor,
any remaining balance of such deposit shall be returned by Sublessor to
Sublessee at such time after termination of this
3.
Sublease less any amounts that are needed to perform any of Sublessee's
obligations under this Sublease that have been unfulfilled by Sublessee.
6. AS-IS. Subject to Master Lessor's service, maintenance or repair
obligations under the Master Lease, the Sublease Premises and all improvements
will be taken over on an "as is" basis, provided Sublessor represents, warrants
and covenants (now and as of the Commencement Date) that all improvements to the
Sublease Premises made by the Sublessor shall remain on the Sublease Premises
(except the improvements and equipment listed on EXHIBIT E) and (I) have been
constructed, installed, operated and maintained in accordance with all
applicable laws, by-laws, rules, regulations, orders, permits and licenses and
(II) all plumbing, HVAC, electrical and other building systems within the
Sublease Premises are in good working order and repair. The improvements to the
Sublease Premises which shall remain at the Sublease Premises shall include the
existing de-ionized water system, lab benches and fume hoods installed by
Sublessor. Notwithstanding anything to the contrary contained herein, all
improvements to the Sublease Premises made by Sublessor (the "Sublessor
Improvements") shall at all times remain the property of Sublessor, subject only
to Sublessee's rights to use such improvements as part of the Sublease Premises
pursuant to this Sublease. Upon the expiration or sooner termination of this
Sublease, Sublessee shall vacate and surrender the Sublease Premises, in the
same condition, broom clean, and with all systems and improvements in good
working order as existed at the Commencement Date ordinary wear and tear
excepted; provided, however, that Sublessee's obligations to vacate and
surrender the Sublease Premises as provided herein shall be subject to Sections
23 and 24 of the Master Lease as incorporated herein.
7. MASTER LEASE. This Sublease shall be subject and subordinate to
all of the terms and provisions of the Master Lease, and Master Lessor shall
have all rights in respect of the Master Lease and the Premises as set forth
therein. Except for payments of Rent and Basic Operating Costs under Sections 6
and 7 of the Master Lease (which payments shall be made by Sublessor), and,
except as otherwise provided herein, Sublessee hereby agrees to perform for
Sublessor's benefit, during the term of this Sublease, all of Sublessor's
obligations under the Master Lease but only to the extent they relate to the
Sublease Premises which accrue during the term of this Sublease.
8. INCORPORATION OF MASTER LEASE.
(a) Except as otherwise provided in this Sublease, all of
the terms and provisions of the Master Lease are incorporated into and made a
part of this Sublease, and the rights and obligations of the parties under the
Master Lease are hereby imposed upon the parties hereto with respect to the
Sublease Premises, the Sublessor being substituted for the Landlord in the
Master Lease, the Sublessee being substituted for the Tenant in the Master Lease
and the Sublease Premises being substituted for the Premises in the Master Lease
provided, however, that the term "Landlord" in the following sections of the
Master Lease (i) shall mean Master Lessor, not Sublessor: 7.A, 7.B, 8.A, 10, 16,
17, 18, 23.C, 24, 29, and 44, and (ii) shall mean both Master Lessor and
Sublessor: 7E.
(b) Notwithstanding the foregoing:
4.
(i) the following Paragraphs of the Master Lease are not
incorporated herein: Basic Lease Information (Lease Date, Tenant, Landlord,
Address of Landlord, Scheduled Term Commencement Date, Length of Term, Estimated
First Year Operating Cost, Tenant's Proportionate Share, Rent, Security Deposit)
1,2, 3, 19, 20, 37, 38, 39, 41, 42, 43 and Exhibits B, C, and D.
(ii) Each of the parties hereto shall fully perform all of
their respective obligations hereunder, and shall indemnify, defend, protect,
and hold harmless the other party from any and all liability, damages,
liabilities, claims proceedings, actions, demands and costs (including
reasonable attorneys' fees) resulting, directly or indirectly, from their
failure to perform their respective obligations.
(iii) Upon any termination of the Master Lease, this Sublease
shall also terminate. If Master Lessor seeks to terminate the Master Lease
because of a default or alleged default by Sublessor under the Master Lease
(other than a default or alleged default caused by the default by Sublessee
under this Sublease), Sublessor shall take all action required to reinstate the
Master Lease. Further, if Rent is abated under the Master Lease, Rent hereunder
shall also be abated in the same proportion.
(iv) Sublessor shall have no service, maintenance or repair
obligations with respect to the Sublease Premises except for its obligation to
use commercially reasonable efforts to enforce the obligations of Master Lessor
under the Master Lease. Sublessee hereby expressly waives the provisions of
subsection 1 of Section 1932 and Sections 1941 of the Civil Code of California.
Sublessor shall use commercially reasonable efforts to enforce Master Lessor's
service, maintenance or repair obligations under the Master Lease.
(v) Sublessee shall indemnify, defend, protect, and hold
Sublessor harmless from and against all actions, claims, demands, costs,
liabilities, losses, reasonable attorneys' fees, damages, penalties, and
expenses (collectively "Claims") which may be brought or made against Sublessor
or which Sublessor may pay or incur to the extent caused by (i) a breach of this
Sublease by Sublessee, (ii) any violation of law by Sublessee or its employees,
agents, contractors or invitees ("Agents") relating to the use or occupancy of
the Sublease Premises, or (iii) the negligence or willful misconduct of
Sublessee or its Agents. Sublessor shall indemnify, defend, protect, and hold
Sublessee harmless from and against all actions, claims, demands, costs,
liabilities, losses, reasonable attorneys' fees, damages, penalties and expenses
which may be brought or made against Sublessee or which Sublessee may pay or
incur to the extent caused by (i) the negligence or willful misconduct of
Sublessor or its Agents occurring on or about the Premises or Sublease Premises;
(ii) the failure by Sublessor to comply with or perform its obligations under
the Master Lease and/or this Sublease, and (iii) a breach by Sublessor of any of
its representations or warranties to Sublessee under this Sublease. As used
herein, "Hazardous Materials" means any substance or material which is
classified or considered to be hazardous or toxic under any present or future
federal, state, regional or local law relating to the use, storage, treatment,
existence, release, emission, discharge, generation, manufacture, disposal or
transportation of any such substances.
(vi) Sublessee shall indemnify, defend and hold harmless
Sublessor and Master Lessor from and against all claims, suits, judgments,
losses, costs, personal injuries,
5.
damages, and expenses of every type and nature, to the extent caused by the
storage, use, release or disposal of Hazardous Materials on or about the
Premises by Sublessee or Sublessee's employees, contractors, agents or
licensees, except to the extent that any of the foregoing results from (i) the
willful misconduct or negligent acts or omissions of Sublessor, or any of its
agents, employees, contractors or licensees, or (ii) the willful misconduct or
negligent acts or omissions of Master Lessor, or any of its agents, employees,
contractors or licensees. Notwithstanding anything to the contrary in this
Sublease or Master Lease, Sublessee shall have no obligation to clean up or to
comply with any law regarding, or to reimburse, indemnify, defend or hold
harmless Sublessor or Master Lessor with respect to, any Hazardous Materials
discovered on the Sublease Premises which existed prior to the Commencement Date
of this Sublease.
(vii) Sublessor shall indemnify, defend and hold harmless
Sublessee from and against all claims, suits, judgments, losses, costs, personal
injuries, damages, and expenses of every type and nature, to the extent caused
by storage, use, release or disposal of Hazardous Materials on or about the
Sublease Premises or Premises by Sublessor or Sublessor's employees,
contractors, agents or licensees, except to the extent that any of the foregoing
results from the willful misconduct or negligent acts or omissions of the
Sublessee or Sublessee's employees or agents. Notwithstanding anything to the
contrary in this Sublease, Sublessor shall have no obligation to clean up or to
comply with any law regarding, or to reimburse, indemnify, defend or hold
harmless Sublessee with respect to, any Hazardous Materials which come to be
located on the Sublease Premises or Premises after the Commencement Date (except
if such Hazardous Materials are brought onto the Sublease Premises or Premises
by Sublessor).
(viii) Sublessor represents to Sublessee that (A) the Master
Lease is in full force and effect, (B) the copy of the Master Lease which is
attached to this Sublease as EXHIBIT A is a true, correct and complete copy of
the Master Lease, (C) to Sublessor's best knowledge, no default exists on the
part of Sublessor, or has there occurred any event which, with the giving of
notice or passage of time or both, could constitute such a default or event of
default, (D) to Sublessor's best knowledge, there are no pending or threatened
actions, suits or proceedings before any court or administrative agency against
Sublessor which could, in the aggregate, adversely affect the Sublease Premises
or of Sublessor to perform its obligations under the Sublease, and Sublessor is
not aware of any facts which might result in any actions, suits or proceedings,
and (E) to Sublessor's best knowledge (x) Sublessor has not discharged, disposed
of or released any Hazardous Materials in or about the Sublease Premises or
Premises except in compliance with applicable laws and no action, proceeding, or
claim is pending, or threatened concerning any Hazardous Materials arising in
connection with Sublessor's use of the Sublease Premises or Premises, and (y)
Sublessor has not transported, stored, used, manufactured, emitted, disposed of
or released, or exposed to its employees or others to, Hazardous Materials on or
about the Sublease Premises or Premises in violation of any law, rule,
regulation, treaty or statute promulgated by any governmental authority.
Sublessor shall immediately notify Sublessee of any release, emission or spill
of any Hazardous Materials on or about the Sublease Premises or Premises of
which it is aware which may in any way pose a material threat to the health or
safety of any person located in or about the Sublease Premises. Sublessor shall
deliver to Sublessee on the Commencement Date a hazardous waste certificate in
the form attached to the Master Lease as Exhibit C completely filled-out and
duly executed by Sublessor for the benefit of Sublessee and made effective as of
the Commencement Date. Sublessee shall immediately notify Sublessor of any
release, emission or spill of any Hazardous
6.
Materials on or about the Sublease Premises of which it is aware which may in
any way pose a material threat to the health or safety of any person located in
or about the Sublease Premises. Sublessee shall deliver to Sublessor on the
Commencement Date a hazardous waste certificate in the form attached to the
Master Lease as Exhibit C completely filled-out and duly executed by Sublessee
for the benefit of Sublessor and made effective as of the Commencement Date.
(ix) The provisions and obligations of the foregoing Section
8(b)(v),(vi), and (vii) shall survive the termination of this Sublease.
(c) For the purposes of incorporating the terms and provisions of
the Master Lease into this Sublease, the Master Lease is hereby amended as
follows (references are to Sections of the Master Lease):
(i) Section 21B. of the Master Lease is deleted and replaced
with the following: Any Rent or other consideration realized by Sublessee under
any such sublease or assignment in excess of the Rent payable hereunder, after
amortization of (1) the reasonable cost of any improvements which Sublessee has
made to the Premises and (2) reasonable subletting and assignment costs, shall
be divided and paid, fifty percent (50%) to Sublessee, fifty percent (50%) to
Sublessor, after Master Lessor has been paid its share of such excess rent
pursuant to Section 21.B of the Master Lease.
9. BROKERAGE. Each party warrants and represents to the other that
other than Cornish & Carey Commercial, such party has not retained any other
real estate broker, finder or any other person whose services would form the
basis for any claim for any commission or fee in connection with this Sublease
or the transactions contemplated hereby. Each party agrees to save, defend,
indemnify and hold the other party free and harmless from any breach of its
warranty and representation as set forth in the preceding sentence, including
the other party's attorneys' fees.
10. SUBLESSOR'S OBLIGATIONS. Except as expressly otherwise provided
herein Sublessor shall have no obligation to Sublessee with respect to the
Premises or the performance by Master Lessor of any obligations of Master Lessor
under the Master Lease.
11. EARLY TERMINATION OF MASTER LEASE. If, without the fault of
Sublessor hereunder the Master Lease should terminate prior to the expiration of
this Sublease, Sublessor shall have no liability to Sublessee. To the extent
that the Master Lease grants Sublessor any discretionary right to terminate the
Master Lease, whether due to casualty, condemnation, or otherwise, Sublessor
shall not exercise such right at any time during the first forty two (42) months
of the term of this Sublease without the prior written consent of the Sublessee.
Commencing with the forty third (43rd) month, Sublessor shall be entitled to
exercise or not exercise any such discretionary right to terminate the Master
Lease in its complete and absolute discretion. In the event of a termination of
this Sublease due to casualty or condemnation, Sublessor shall be entitled to
all insurance proceeds for the Sublessor Improvements regardless of whether the
insurance covering the Sublessor Improvements is maintained by Sublessor or
Sublessee. In the event of a casualty or condemnation which does not result in a
termination of this Sublease, Sublessee shall receive all insurance proceeds for
the Sublessor Improvements (regardless of whether the insurance covering the
Sublessor Improvements is maintained by
7.
Sublessor or Sublessee) and shall use such insurance proceeds to promptly
repair, restore or rebuild the Sublessor Improvements, subject to the
supervision and approval of Sublessor during the construction process.
12. QUIET ENJOYMENT. Sublessee shall peacefully have, hold and enjoy
the Subleased Premises, subject to the terms and conditions of this Sublease and
subject to the Master Lease, provided that Sublessee pays all rent and performs
all of Sublessee's covenants and agreements contained herein. In the event,
however, that Sublessor defaults in the performance or observance of any of
Sublessor's obligations under this Sublease or receives a notice of default from
Master Lessor under the Master Lease, then Sublessee shall give written notice
to Sublessor specifying in what manner Sublessor has defaulted. If such default
shall not be cured within a reasonable time, but in no event later than thirty
(30) days after Sublessor's receipt of such written notice from Sublessee
(except that if such default cannot be cured within said thirty (30) day period,
this period shall be extended for an additional reasonable time, provided that
Sublessor commences to cure such default within such thirty (30) day period and
proceeds diligently thereafter to effect such cure as quickly as possible), then
Sublessee shall be entitled, at Sublessee's option, to cure such default and
promptly collect from Sublessor Sublessee's reasonable expenses in so doing
(including, without limitation, reasonable attorneys' fees and court costs)
unless such default by Sublessor is caused by a default of Sublessee hereunder
(in which case Sublessor shall not be liable for Sublessee's costs to cure the
default). Sublessee shall not be required to wait the entire cure period
provided for herein if earlier action is required to prevent a termination by
Master Lessor of the Master Lease and Sublessor has failed to take such earlier
action. Nothing contained herein shall entitle Sublessee to act on behalf of
Sublessor or in Sublessor's name.
13. CONSENT OF MASTER LESSOR. If Sublessee desires to take any
action which requires the consent of Master Lessor pursuant to the terms of the
Master Lease, including, without limitation, the making of any alterations,
then, notwithstanding anything to the contrary herein, (a) Sublessor,
independently, shall have the same rights of approval or disapproval as Master
Lessor has under the Master Lease, (b) Sublessee shall not take any such action
until it obtains the consent of both Sublessor and Master Lessor, and (c)
Sublessee shall request that Sublessor obtain Master Lessor's consent on
Sublessee's behalf and Sublessor shall use commercially reasonable efforts to
obtain such consent, unless Sublessor and Master Lessor agree that Sublessee may
contact Master Lessor directly with respect to the specific action for which
Master Lessor's consent is required. Any consent required of Sublessor
conclusively shall be deemed reasonably withheld, if consent also is required of
the Master Lessor, and Master Lessor withholds Master Lessor's consent.
14. NO THIRD PARTY RIGHTS. The benefit of the provisions of this
Sublease is expressly limited to Sublessor and Sublessee and their permitted
successors and assigns. Under no circumstances will any third party be construed
to have any rights as a third party beneficiary with respect to any of said
provisions; PROVIDED, HOWEVER, that Master Lessor shall be entitled to the
benefit of Sublessee's assumption of Sublessor's obligations, as "Tenant" under
the Master Lease, pursuant to Section 5 above.
15. BOARD APPROVAL. This Sublease is subject to both the approval of
the Board of Directors of the Sublessor and the Board of Directors of the
Sublessee.
8.
16. MASTER LESSOR CONSENT. This Sublease and Sublessor's and
Sublessee's obligations hereunder are conditioned upon having obtained the
written consent of the Master Lessor to this Sublease. If such consent has not
been obtained by Sublessor within thirty (30) days after the date of Sublessor's
execution of this Sublease, Sublessee may, within ten (10) days thereafter,
terminate this Sublease by written notice to Sublessor whereupon Sublessor shall
return to Sublessee all sums paid by Sublessee to Sublessor in connection with
its execution of this Sublease. Sublessor shall use commercially reasonable
efforts to obtain Master Lessor's consent to this Sublease as soon as
practicable.
17. COUNTERPARTS. This Sublease may be executed in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
all of which together shall constitute one and the same instrument.
18. SECURITY SERVICES. Sublessee, at its sole cost and expense,
shall maintain security services for the Sublease Premises. Such services shall
be provided on a 24-hour basis by a security company acceptable to Sublessor in
its reasonable discretion.
19. SURRENDER. Sublessee's obligation to surrender the Sublease
Premises shall be fulfilled if Sublessee surrenders possession of the Sublease
Premises in the condition existing at the Commencement Date, ordinary wear and
tear, Hazardous Materials existing at Commencement Date, and interior
improvements made by Sublessee which Sublessor states in writing may be
surrendered at the termination of the Sublease excepted; provided, however, that
Sublessee's obligations to vacate and surrender the Sublease Premises as
provided herein shall be subject to Sections 23 and 24 of the Master Lease as
incorporated herein.
20. ADDITIONAL AGREEMENT. Sublessee and Sublessor agree to use
commercially reasonable efforts to execute (and to cause Inex to execute), prior
to the Commencement Date, an Assignment and Assumption Agreement in the exact
form as EXHIBIT C attached hereto and incorporated herein by reference.
21. INITIAL SUBLESSEE IMPROVEMENTS. Subject to the consent and
approval of Master Lessor, and the requirements of Section 12 of the Master
Lease, Sublessor hereby consents to the construction by Sublessee of those
certain improvements to the Sublease Premises (the "Sublessee Improvements")
generally described in EXHIBIT D attached hereto and incorporated herein by
reference. Sublessor's consent as set forth herein is subject to approval by
Sublessor and Master Lessor of final plans and specifications for the Sublessee
Improvements.
22. MUTUAL WAIVER OF SUBROGATION. The waiver of subrogation
provision set forth in Section 9 of the Master Lease shall be deemed a three
party agreement binding among and inuring to the benefit of Sublessor, Sublessee
and Master Lessor (by reason of its consent to hereto).
9.
IN WITNESS WHEREOF, the parties have executed this Sublease as of the
date first written above.
ADDRESS: SUBLESSOR:
3832 Bay Place LYNX THERAPEUTICS, INC.
Hayward, CA 94545
Attn: Edward C. Albini
By: /s/ [ILLEGIBLE]
--------------------------------
Its: Chief Financial Officer
-------------------------------
By:
--------------------------------
Its:
-------------------------------
ADDRESS: SUBLESSEE:
KOSAN BIOSCIENCES INCORPORATED
By: /s/ Daniel V. Santi
--------------------------------
Its: CEO
-------------------------------
By: /s/ Michael S. Ostrach
--------------------------------
Its: VP and Asst Secretary
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EXHIBIT A
[ATTACH COPY OF MASTER LEASE]
BASIC LEASE INFORMATION
LEASE DATE: June 28, 1993
TENANT: Lynx Therapeutics, Inc.
ADDRESS OF TENANT: 3832 Bay Center Place
Hayward, CA 94545
LANDLORD: Spieker-Singleton #87, Limited
Partnership
ADDRESS OF LANDLORD: 6000 Stoneridge Mall Road, Suite 270
Pleasanton, CA 94588
PROJECT DESCRIPTION: An approximately 128,700 square foot
project consisting of four building
located at Breakwater Avenue and Bay
Center Place in Hayward, California,
known as BayCenter Business Park.
BUILDING DESCRIPTION: An approximately 44,280 square foot
building located at 3832 Bay Center
Place, Hayward, California
PREMISES: Approximately 44,280 square feet, more
or less, of office space located in
BayCenter Business Center, and more
commonly known as 3832 Bay Center Place
Hayward, California as outlined in red
on Exhibit "A" attached hereto.
PERMITTED USES: General office and research and
development, and manufacturing of
certain biotechnical and chemical
products.
OCCUPANCY DENSITY: 4 people per 1000 square feet of
occupied space
SCHEDULED TERM COMMENCEMENT DATE: August 1, 1993
LENGTH OF TERM: One Hundred Twenty (120) months
RENT:
Occupancy
Month Level Base Rent
----- ----- ---------
Base Rent: 1-2 15,000 sf Free of Base Rent
3-12 15,000 sf $.67/sf/mo NNN
13-24 30,000 sf $.67/sf/mo NNN
25-36 44,280 sf $.67/sf/mo NNN
37-60 44,280 sf $.72/sf/mo NNN
61-96 44,280 sf $.82/sf/mo NNN
97-120 44,280 sf $.90/sf/mo NNN
Estimated First Year Basic Operating
Cost: $.14/sf/mo of occupied space
SECURITY DEPOSIT: $29,700.00
TENANTS PROPORTIONATE SHARE: Months 1-12 11.66% of Project
Months 13-24 23.31% of Project
Months 25-120 34.41% of Project
(Unless occupancy is adjusted as
described herein in Paragraph 1)
The foregoing Basic Lease Information is incorporated into and made a part of
this Lease. Each reference in this Lease to any of the Basic Lease Information
shall mean the respective information above and shall be construed to
incorporate all of the terms provided under the particular Lease paragraph
pertaining to such information. In the event of any conflict between the Basic
Lease Information and the Lease, the latter shall control.
TABLE OF CONTENTS
Page
BASIC LEASE INFORMATION 1
Table of Contents 2
1. Premises 3
2. Possession and Lease Commencement 3
3. Term 3
4. Use 3
5. Rules and Regulations 3
6. Rent 3
7. Basic Operating Cost 4
8. Insurance and Indemnification 5
9. Waiver of Subrogation 5
10. Landlord's Repairs and Services 5
11. Tenant's Repairs 5
12. Alterations 5
13. Signs 6
14. Inspection/Posting Notices 6
15. Utilities 6
16. Subordination 6
17. Financial Statements 6
18. Estoppel Certificate 6
19. Security Deposit 7
20. Tenant's Remedies 7
21. Assignment and Subletting 7
22. Quiet Enjoyment 7
23. Condemnation 7
24. Casualty Damage 7
25. Holding Over 8
26. Default 8
27. Liens 9
28. Substitution 9
29. Transfers by Landlord 9
30. Right of Landlord to Perform Tenant's Covenants 9
31. Waiver 9
32. Notices 10
33. Attorneys' Fees 10
34. Successors and Assigns 10
35. Force Majeure 10
36. Miscellaneous 10
37. Additional Provisions 10
EXHIBIT "A" Site Plan, Legal Description
EXHIBIT "B" Tenant Improvement Specifications
EXHIBIT "C" Hazardous Waste Certificate
EXHIBIT "D" First Right of Refusal
EXHIBIT "E" Exceltech Report dated March 1, 1988
LEASE
THIS LEASE is made as of the 28TH day of JUNE, 1993, between
SPIEKER-SINGLETON #87, LIMITED PARTNERSHIP (herein after called
"Landlord") and LYNX THERAPEUTICS, INC. (hereinafter called
"Tenant").
PREMISES 1. Landlord leases to Tenant and Tenant leases from Landlord,
upon the terms and conditions hereinafter set forth, those
premises (the "Premises") cross-hatched outlined-in red on
Exhibit "A" and described in the Basic Lease Information.
The Premises may be all or part of the building (the
"Building") or of the project (the "Project") which may
consist of more than one building. The Building and Project
are outlined in blue and green respectively on Exhibit "A".
Notwithstanding the foregoing during the first two (2) years
of this Lease, in the event Tenant is actually occupying
more than the occupied space referred to in Basic Lease
Information, then Tenant shall pay for such additional
space on the same square footage cost as outlined.
POSSESSION
AND LEASE
COMMENCEMENT
C. This Lease shall commence August 1, 1993.
TERM 3. The Term of this Lease shall commence on the Term
Commencement Date and continue in full force and effect for
the number of months specified as the Length of and Term in
the Basic Lease Information or until this Lease is
terminated as otherwise provided herein. If the Term
Commencement Date is a date other than the first day of the
calendar month the Term shall be the number of months of the
Length of the Term in addition to the remainder of the
calendar month following the Term Commencement Date.
USE 4. A. Tenant shall use the Premises for the Permitted Use and
for no other use or purpose without prior written consent of
Landlord. No increase in the Occupant Density of the
Premises shall be made without the prior written consent of
Landlord. Tenant and it employees, customers, visitors, and
licensees shall have the nonexclusive right to use, in
common with other parties occupying the Buildings or
Project, the parking areas and driveways of the Project,
including without limitation to non-exclusive use of four
parking stalls per 1,000 square feet occupied hereunder,
subject to such reasonable rules and regulations as Landlord
may from time to time prescribe.
B. Tenant shall not permit any odors, smoke, dust, gas,
substances, noise or vibration to emanate from the Premises,
nor take any action which would constitute a nuisance or
would disturb, obstruct or endanger any other tenants of the
Building or Project in which the Premises are situated or
unreasonably interfere with their use of their respective
premises. Tenant shall not receive, store or otherwise
handle any product, material or merchandise which is toxic,
harmful, explosive, highly inflammable or combustible unless
such is done in accordance with applicable rules and
regulations as determined by local, state and federal
authorities. Storage outside the Premises of materials,
vehicles or any other items Landlord deems objectionable is
prohibited without Landlord's prior written consent. Tenant
shall not use or allow the Premises to be used for any
improper, immoral, unlawful or objectionable purposes, nor
shall Tenant cause or maintain or permit any nuisance in, on
or about the Premises. Tenant shall not commit or suffer the
commission of any waste in, on or about the Premises. Tenant
shall not allow any sale by auction upon the Premises, or
place any loads upon the floors, walls, or ceilings which
endanger the structure, or place any harmful liquids in the
drainage system of the Building or Project. No waste,
materials or refuse shall be dumped upon or permitted to
remain outside the Premises except in trash containers
placed inside exterior enclosures designated for that
purpose by Landlord.
C. Tenant shall not use the Premises or permit anything to
be done in or about the Premises which will in any way
conflict with any law, stature, ordinance or governmental
rule or regulation now in force or which may hereafter be
enacted or promulgated. Tenant shall at its sole cost and
expense obtain any and all licenses or permits necessary for
Tenant's use of the Premises. Tenant shall promptly comply
with the requirements of any board of fire underwriters or
other similar body now or hereafter constituted relating to
or affecting the condition, use or occupancy of the
Premises. The judgement of any court of competent
jurisdiction or the admission of Tenant in any actions
against Tenant, whether Landlord by a party thereto or not,
that Tenant has so violated any such law, statute,
ordinance, rule, regulation or requirement, shall be
conclusive of such violation as between Landlord and Tenant.
Tenant shall not do or permit anything to be done in, on or
about the Premises, Building or Project, or upon any
contents therein or cause a cancellation of said insurance
or otherwise affect said insurance in any manner. Tenant
shall indemnify Landlord and hold Landlord harmless against
any loss, expense, damage, attorneys' fees or liability
arising out of the failure of Tenant to comply with any
applicable law or comply with the requirements as set forth
herein.
RULES AND 5. Tenant and Tenant's agents, employees, and invitees shall
REGULATIONS faithfully observe and comply with any reasonable rules and
regulations Landlord may from time to time prescribe in
writing for the purpose of maintaining the proper care,
cleanliness, safety, traffic flow and general order of the
Premises or Project. Landlord shall not be responsible to
Tenant for the non-compliance by any other tenant or
occupant of the Building or Project with any of the rules
and regulations.
RENT 6. Tenant shall pay to Landlord, without demand throughout the
term, Rent as specified in the Basic Lease Information,
payable in monthly installments in advance on or before the
first day of each calendar month, in lawful money of the
United States, without deduction or offset whatsoever to
Landlord at the address
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specified in the Basic Lease Information or to such other
firm or to such other place as the Landlord may from time to
time designate in writing. Rent for the first full month of
the Term shall be paid by Tenant upon Tenant's execution of
this Lease. If the obligation for payment of Rent commences
on other than the first day of a month, then Rent shall be
prorated and the prorated installment shall be paid on the
first day of the calendar month succeeding the Term
Commencement Date.
BASIC 7. A. BASIC OPERATING COST. In addition to the Base Rent
OPERATING required to be paid hereunder, Tenant shall pay as
COSTS additional Rent, Tenant's Proportionate Share, as defined in
the Basic Lease Information, of Basic Operating Cost in the
manner set forth below. Basic Operating Cost shall mean all
expenses and costs of every kind and nature which Landlord
shall pay or become obligated to pay, or would be required
to pay if the Project were fully occupied, because of or in
connection with management, maintenance, preservation and
operation of the Project and its supporting facilities
servicing the Project (determined in accordance with
generally accepted accounting principles, consistently
applied) including but not limited to the following:
(1) All real estate taxes, possessory interest taxes,
business or license taxes of fees, service payment in lieu
of such taxes or fees, annual or periodic license or use
fees, excises, transit charges, housing fund assessments,
open space charge, assessments, levies, fees or charges,
general and special, ordinary and extraordinary, unforeseen
as well as foreseen, of any kind (including fees "in-lieu"
of any such tax or assessment) which are assessed, levied,
charged, confirmed, or imposed by any public authority upon
the Project, its operations or the rent (or any proportion
or component thereof), except (a) inheritance or estate
taxes imposed upon or assessed against the Project, or any
part thereof or interest therein, and (b) taxes computed
upon the basis of the net income of Landlord or the owner of
any interest therein.
(2) All insurance premiums and costs, including but not
limited to, any deductible amounts, premiums and cost of
fire, casualty and liability coverage which Landlord is
required to carry pursuant to Section 8.A below, rental
abatement and special hazard insurance applicable to the
Project and Landlord's personal property used in connection
therewith; provided, however, that Landlord may, but shall
not be obligated to, carry special hazard insurance covering
losses caused by casualty not insured under standard fire
and extended coverage insurance, excluding earthquake
insurance obtained without Tenant's prior consent.
(3) Repairs, replacements and general maintenance for
the Premises, Building and project (except for those repairs
expressly the responsibility of Landlord, those repairs paid
for by proceeds of insurance or by Tenant or other third
parties, and alterations attribute solely to tenants of the
Project other than Tenant).
(4) All maintenance, janitorial and service agreements
and cost or supplies and equipment used in maintaining the
Premises, Building and Project and the equipment therein and
the adjacent sidewalks, driveways, parking and service
areas, including with out limitations to alarm service,
window cleaning, elevator maintenance, Building exterior
maintenance and landscaping.
(5) Utilities which benefit all or a portion of the
Premises.
(6) a management and accounting cost recovery equal to
ten percent (10%) of Basic Operating Cost.
In the event that the Project is not fully occupied during
any fiscal year of the Term as determined by Landlord, and
adjustment shall be made in computing the Basic Operating
Cost for such year so that Basic Operating Cost shall be
computed as though the building had bee one hundred percent
(100%) occupied; provided, however, that in no event shall
Landlord be entitled to collect in excess of one hundred
percent (100%) if the total Basic Operating Cost from all of
the tenants in the Project including Tenant.
To the extent commercially reasonable, Landlord will use
third party contractors to perform maintenance, repairs, and
other functions under this Paragraph. Landlord will
negotiate at arms length with these contractors, suppliers
and/or vendors to obtain competitive prices and Landlord
will use its effort during this lease to obtain competitive
pricing for services and products for which Tenant is
financially responsible under this Paragraph 7.
Notwithstanding the foregoing, Operating Costs shall not
include (i) depreciation on the Building, (ii) real estate
broker's commissions, (iii) interest, loan fees and other
carrying costs relating to any mortgage or deed of trust on
the Building or Project, (iv) costs, fines or penalties for
violations by Landlord of any governmental rule, (v) any
obligations of Landlord with respect to Hazardous Materials,
(vi) any amounts for services paid to entities related to
Landlord to the extent said amounts exceed the amounts that
would have been paid to unaffiliated entities for the same
services; (vii) any cost incurred to remedy any defects in
construction of the Building, (viii) any amounts for the
acquisition or maintenance of art work located in the
Building or Project or the cost of insurance thereon. If any
capital expense borne under Paragraph 7 is above ten
thousand dollars ($10,000) then the expense will be
amortized over the useful life with a ten percent (10%)
interest rate.
All costs and expenses shall be determined in accordance
with generally accepted accounting principles which shall be
consistently applied. Basic Operating Cost shall not include
specific costs incurred for the account of, separately
billed to and paid by specific tenants. Notwithstanding
anything herein to the contrary and instance wherein
Landlord, at Landlord's sole reasonable discretion, deems
Tenant to be responsible for any amounts greater than its
Proportionate Share, Landlord shall have the right to
allocate cost in any manner Landlord deems reasonably
appropriate.
B. PAYMENT OF ESTIMATED BASIC OPERATING COST. "Estimated
Basic Operating Cost" for any particular year shall mean
Landlord's estimate of the Basic Operating Cost for such
fiscal year made prior to commencement of such fiscal year
as hereinafter provided. Landlord shall have the right from
time to time to revise its fiscal year and interim
accounting periods so long as the periods as so revised are
reconciled with prior periods in accordance with generally
accepted accounting principles applied in a consistent
manner. During the last month of each fiscal year during the
Term, or as soon thereafter as practicable, Landlord shall
give Tenant written notice of the Estimate Basic Operating
Cost for ensuing fiscal year. Tenant shall pay Tenant's
Proportionate Share of the Estimated Basic Operating Costs
with installments on the first day of each calendar month
during such year, in advance. If at any time during the
course of the fiscal year, Landlord determines that Basic
Operating Cost will apparently vary from the then Estimated
Basic Operating Cost by more than ten percent (10%),
Landlord may, by written notice to Tenant, revise the
Estimate Basic Operating Cost for the balance of such fiscal
year and Tenant shall pay Tenant's Proportionate Share of
the Estimated Basic Operating Cost as so revised for the
balance of the then current fiscal year on the first of each
calendar month and there after.
C. COMPUTATION OF BASIC OPERATING COST ADJUSTMENT. "Basic
Operating Cost Adjustment" shall mean the difference between
Estimated Basic Operating Cost and Basic Operating Cost for
any fiscal year determined as hereinafter provided. Within
ninety (90) days after the end of each fiscal year, as
determined by Landlord, or as soon thereafter as possible,
Landlord shall deliver to Tenant a statement of Basic
Operating Cost for the fiscal year just ended accompanied by
a computation of Basic Operating Cost Adjustment. If such
statement shows that Tenant's payment based upon Estimated
Basic Operating Cost is less than Tenant's Proportionate
Share of Basic Operating Cost, then Tenant shall pay to
Landlord the difference within twenty (20) days after
receipt of such statement. If such statement shows that
Tenant's payments of Estimated Basic Operating Cost exceed
Tenant's Proportionate Share of Basic Operating Cost is less
than Tenant's Proportionate Share of Basic Operating Cost,
then Tenant shall pay to Landlord the difference within
twenty (20) days after receipt of such statement. If such
statement shows that Tenant's payments of Estimated Basic
Operating Cost exceed Tenant's Proportionate Share of Basic
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Operating Costs, then (provided that Tenant is not in
default under this Lease), Landlord shall pay to Tenant the
difference within Twenty (20) days of such statement. If
this Lease has been terminated or the Term hereof has
expired prior to the date of such statement. If this Lease
has been terminated or the Term hereof has expired prior to
the date of such statement, then the Basic Operating Cot
Adjustment shall be paid by the appropriate party within
twenty (20) days after the date of delivery of the
statement. Should this Lease commence or terminate at any
time other than the first day of the fiscal year, Tenant's
Proportionate Share of the Basic Operating Cost adjustment
shall be prorated by reference to the exact number of
calendar days during such fiscal year for which the Tenant
is obligated to pay Base Rent.
D. NET LEASE. This shall be net Lease and Base Rent shall be
paid to Landlord absolutely net of all costs and expenses
except as herein provided. The provisions for payment of
Basic Operating Cost and the Basic Operating Cost Adjustment
are intended to pass on to Tenant and reimburse Landlord for
all costs and expenses of the nature described in paragraph
7A incurred in connection with ownership and operation of
the Building or Project and such additional facilities now
and in subsequent years as may be determined by Landlord to
be necessary to the Building or Project.
E. TENANT AUDIT. Tenant shall have the right, at Tenant's
expense and upon not less than five(5) days prior written
notice to Landlord, to review at reasonable times, in
Landlord's office, Landlord's books and records applicable
to Tenant's Lease for purposes of verifying Landlord's
calculation of the Basic Operating Cost and Basic Operating
Cost Adjustment.
In the event that Tenant shall dispute the amount set fort
in any statement provided by Landlord under Paragraph 7B or
7C above, Tenant shall have the right, not later than twenty
(20) days following the receipt of such statement and upon
condition that Tenant shall first deposit with Landlord the
full amount in dispute, to cause Landlord's books and record
with respect to such fiscal year to be audited by certified
public accountants selected by Tenant and subject to
Landlord's reasonable right of approval. The Basic Operating
Cost Adjustment shall be appropriately adjusted on the basis
of such audit. If such audit discloses a liability for a
refund in excess of ten percent (10%) of Tenant's
Proportionate Share of the Basic Operating Cost Adjustment
previously reported, the cost of such audit shall be borne
by Landlord; otherwise the cost of such audit shall be paid
by Tenant. If Tenant shall not request an audit in
accordance with the provisions of this paragraph 7B within
twenty (20) days of receipt of Landlord's statement provided
pursuant to paragraph 7B or 7C, such statement shall be
final and binding for all purposes hereof.
INSURANCE AND 8. A. CASUALTY INSURANCE. Landlord agrees to maintain insurance
INDEMNIFI- insuring the Buildings of the Project of which the Premises
CATIONS are a part, against fire, lightning, extended coverage,
vandalism and malicious mischief in an amount not less then
eighty percent (80%) of the replacement cost thereof. Such
insurance shall be for the sole benefit of Landlord and
under its sole control. Landlord shall not be obligated to
insure any furniture, equipment, machinery, goods or
supplies not covered by this Lease which Tenant may keep or
maintain in the premises or any leasehold improvements,
additions or alterations which Tenant may make upon the
Premises.
B. LIABILITY INSURANCE. Tenant shall purchase at its own
expense and keep in force during this Lease a policy or
policies of comprehensive liability insurance, including
personal injury and property damage, in the amount of not
less than Five Hundred Thousand dollars ($500,000.00) for
property damage and Two Million Dollars ($2,00,000.00) per
occurrence for personal injuries or deaths of persons
occurring in or about the Premises and Project. Said
policies shall (1) name Landlord and if applicable, its
agent, and any party holding an interest to which this Lease
may be subordinated as additional insureds, (2) be issued by
an insurance company acceptable to Landlord and licenses to
do business in the State of California, and (3) provide that
said insurance shall not be cancelled unless thirty (30)
days prior written notice shall have been given to landlord.
Said policy or policies or certificates thereof shall be
delivered to Landlord by Tenant upon commencement of the
lease and upon each renewal of said insurance.
C. INDEMNIFICATION. Landlord shall not be liable to Tenant
for any loss or damage to person or property caused by
theft, fire, act of God, acts of a public enemy, riot,
strike, insurrection, war, court order, requisition or order
of governmental body or authority or for any damage or
inconvenience which may arise through repair or alteration
of any part of the Building or Project or failure to make
any such repair except to the extent caused by the
negligence or willful misconduct of Landlord and except as
expressly otherwise provided in paragraph 10 and 12. Tenant
shall indemnify Landlord and hold Landlord harmless from any
and all loss, cost, damage, injury or expense arising out of
or related to (1) claims of injury to or death of persons or
damage to property occurring or resulting directly or
indirectly from the use of occupancy of the Premises, or
from any activities of Tenant, its agents, servants,
employees or anyone in or about the Premises or Project, or
form any cause whatsoever, (2) claims for work or labor
performed, or for materials or supplies furnished to or at
the request of Tenant or in connection with performance of
any work done for the account of Tenant within the Premises
or Project, and (3) claims arising from any breach or
default on the part of Tenant in the performance of any
covenant contained in this Lease. Such indemnity shall
include without limitation the obligation to provide all
costs of defense against any such claims including any
action or proceeding brought against Landlord. The foregoing
indemnity shall not be applicable to claims arising from the
active negligence or willful misconduct of Landlord.
Landlord shall defend, indemnify and hold harmless Tenant,
its agents, and any and all affiliates of Tenant including
without limitation, any corporations, or other entities
controlling, controlled by or under common control with
Tenant, from and against any and all claims or liabilities
arising from (i) the negligence or willful misconduct of
Landlord, its officers, employees, agents, visitors,
invitees or licenses, or (ii) any breach or default in any
material warranty or material representation of Landlord
hereunder or the performance of any material covenant on
Landlord's part to be performed hereunder. The provisions of
this paragraph shall survive the expiration or termination
of this Lease with respect to any claims or liability
occurring prior to such expiration or termination.
WAIVER OF 9. To the extent permitted by law and without affecting the
SUBROGATION coverage provided by insurance required to be maintained
hereunder, but subject to the approval of each insurance
carrier affected thereby. Landlord and Tenant each waive any
right to recover against the owner (a) damages for injury to
or death of persons, (b) damages to property, (c) damages to
the Premises or any part thereof, or (d) claims arising by
reason of the foregoing to the extent such damages or claims
are covered by insurance. This provision is intended to
waive fully, and for the benefit of each party, any rights
and/or claims which might give rise to a right of
subrogation on any insurance carrier. The coverage obtained
by each party pursuant to this Lease shall include, without
limitation, a waiver of subrogation by the carrier which
conforms to the revisions of this paragraph, but subject to
the approval of each insurance carrier affected thereby.
LANDLORD'S 10. Landlord shall at Landlord's expense maintain the structural
REPAIR AND soundness of the roof, foundations and exterior walls of the
SERVICES building in good repair, reasonable ware and tear excepted.
The term wall as used herein shall not include windows,
glass or plate glass, exterior doors, special store fronts
or office entries. The term roof as used herein shall not
include skylights, smoke hatches or roof vents. Landlord
shall perform on behalf of Tenant and other tenants of the
Project the maintenance of the public an common areas of the
Project including but not limited to the landscaped areas,
parking areas, driveways, the truck staging areas, rail spur
areas, fire sprinkler systems, sanitary and storm sewer
lines, utility services, electric and telephone
equipment servicing the Building(s), exterior lighting, and
anything which affects the operation and exterior appearance
of the Project.
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Tenant shall reimburse Landlord for all such costs in
accordance with Paragraph 7. Any damage caused by or repairs
necessitated by any act of Tenant may be repaired by
Landlord at Landlord's option and at Tenant's expense.
Tenant shall immediately give Landlord written notice of any
defect or need of repairs after which Landlord shall have
reasonable opportunity to repair same. Landlord in the
course of its maintenance and repairs shall use its best
efforts too minimize any interference with Tenant's
operations. Landlord's liability with respect to any
defects, repairs, or maintenance for which Landlord is
responsible under any of the provisions of this Lease shall
be limited to the cost of such repairs or maintenance.
Landlord in the course of its maintenance and repairs shall
use its best efforts to minimize any interference with
Tenant's operations. If Landlord fails to timely perform its
maintenance and repair obligations hereunder and, as a
consequence, Tenant's use of the Premises is substantially
impaired, Tenant, in addition to all other remedies
available hereunder and, as a consequence, Tenant's use of
the Premises is substantially impaired, Tenant, in addition
to all other remedies available hereunder or by law shall
have the right to cause such repair or maintenance to be
performed by Landlord.
TENANT'S 11. Tenant shall at Tenant's expense maintain all parts of the
REPAIRS Premises in a good clean and secure condition promptly
making all necessary repairs and replacements including but
not limited to all windows, glass, doors and any special
office entries, walls and wall finishes, floor covering,
heating, ventilating and air conditioning systems, truck
doors, dock bumpers, dock plates and levelers, roofing,
plumbing work and fixtures, downspouts, skylights, smoke
hatches and roof vents. Tenant shall at Tenant's expense
also perform regular removal of trash and debris. Tenant
shall, at its own expense, enter into a regularly scheduled
preventative maintenance/service contract with a maintenance
contractor for servicing all hot water, heating and air
conditioning systems and equipment within or serving the
Premises. The maintenance contractor and the contract must
be approved by Landlord. The service contract must include
all services suggested by the equipment manufacturer within
the operation/maintenance manual and must become effective
and a copy thereof delivered to Landlord within thirty (30)
days of the Term Commencement Date. Tenant shall not damage
any demising wall or disturb the integrity and support
provided by any demising wall and shall, at its sole
expense, immediately repair any damage to any demising wall
caused by Tenant or its employees, agents or invitees.
ALTERATIONS 12. Except with respect to the initial Tenant improvements
described in Exhibit B attached hereto, which improvements
Landlord by execution hereof hereby approves, Tenant shall
not make, or allow to be made, any structural alterations or
physical additions in, about or to the premises costing more
than Five Thousand Dollars ($5,000.00) in each instance and
cumulatively no more than Ten Thousand Dollars ($10,000.00)
each year without obtaining the prior written consent of
Landlord which consent of Landlord which consent shall not
be unreasonably withheld with respect to proposed
alterations and additions which (a) comply with all
applicable laws, ordinances, rules and regulations, (b) are
in Landlord's reasonable opinion compatible with the Project
and its mechanical, plumbing, electrical, and
heating/ventilation/air conditioning systems, and in
Landlord's reasonable opinion will not interfere with the
use and occupancy of any other portion of the Building or
Project by any other Tenant or its invitees. Specifically,
but without limiting the generality of the foregoing,
Landlord shall have the right of consent for all plans and
specifications for the alterations or additions subject to
this Section 12, construction means and methods, any
contractor or subcontractor to be employed on the work of
alterations or additions, and the time for performance of
such work. Tenant shall also supply to Landlord any
documents and information reasonably requested by Landlord
in connection with its consideration of a request for
approval hereunder. Tenant must have Landlord's written
approval and all appropriate permits and licenses prior to
the commencement of said alterations and additions. All
alterations and additions permitted hereunder other than the
initial Tenant improvements described in Exhibit "B" hereto
shall be made and performed by Tenant without cost or
expense to Landlord including any costs or expenses which
Landlord may incur in electing to have an outside agency
review said plans and specifications provided the cost to
Tenant of any such review shall not exceed Five Hundred
Dollars ($500.00). Landlord, by written notice at the time
it approves any such alterations, shall have the right to
required Tenant to remove any or all alterations, additions,
improvements and partitions made by Tenant and restore the
Premises to their original condition by the termination of
this Lease, by lapse of time or otherwise, all at Tenant's
expense provided Tenant shall have no obligation to remove
the initial tenant improvements described in Exhibit "B"
hereto. All such removals and restoration shall be
accomplished in a good workmanlike manner so as not to cause
any damage to the Premises or Project whatsoever. If
Landlord so elects, such alterations, physical additions or
improvements shall become the property of Landlord and
surrendered to Landlord upon the termination of this Lease
by lapse of time or otherwise; provided, however that this
clause shall not apply to trade fixtures or furniture owned
by Tenant. In addition to and wholly apart from its
obligation to pay Tenant's Proportionate Share of Basic
Operating Costs, Tenant shall be responsible for and shall
pay prior to delinquency any taxes or governmental service
fees, possessory interest taxes, fees or charges in lieu of
any such taxes, capital levies, or other chargers imposed
upon, levied with respect to or assessed against its
personal property, on the value of its alterations,
additions or improvements and on its interest pursuant to
this Lease. To the extent that any such taxes are not
separately assessed or billed to Tenant, Tenant shall pay
the amount thereof as invoiced to Tenant by Landlord.
SIGNS 13. All signs, notices and graphics of every kind or character,
visible in or from public view or corridors, the common
areas or the exterior of the Premises, shall be subject to
Landlord's prior written approval, which Landlord shall have
the right to withhold in its absolute and sole discretion.
Tenant shall not place or maintain any banners whatsoever or
any window decor in or on any exterior window or window
fronting upon any common areas or service area or upon any
truck doors or man doors without Landlord's prior written
approval which Landlord shall have the right to grant or
withhold in its absolute and sole discretion. Any
installation of signs or graphics on or about the Premises
and Project shall be subject to any applicable governmental
laws, ordinances, regulations and to any other requirements
imposed by Landlord. Tenant shall remove all such signs and
graphics by the termination of this Lease. Such
installations and removals shall be made in such manner as
to avoid injury to or defacement of the Premises, Building
or Project and any other improvements contained therein, and
Tenant shall repair any injury or defacement including
without limitation discoloration caused by such installation
or removal.
INSPECTION/ 14. After reasonable notice, except in the emergencies where no
POSTING such notice shall be required, Landlord, it's agents and
NOTICES representatives, shall have the right to enter the Premises
to inspect the same, to lean, to perform such work as may be
permitted or required hereunder, to make repairs or
alterations to the Premises or Project or to other tenant
spaces therein, to deal with emergencies, to post such
notices as may be permitted or required by law to prevent
the perfection of liens against Landlord's interest in the
Project or to exhibit the Premises to prospective tenants,
purchasers, encumbrances or others, or for any other purpose
as Landlord may deem necessary or desirable; provided,
however, that Landlord shall not unreasonably interfere with
Tenant's business operations. Tenant shall not be entitled
to any abatement of Rent by reason of the exercise of any
such right of entry. Six months prior to the end of the
lease, Landlord shall have the right to erect on the
Premises and/or Project a suitable sign indicating that the
Premises are available for lease. Tenant shall give written
notice to Landlord at least thirty (30) days prior to
vacating the premises and shall meet with Landlord for a
joint inspection of the Premises at the time of vacating the
Premises shall conclusively be deemed correct for purposes
of determining Tenant's responsibility for repairs and
restoration.
UTILITIES 15. Tenant shall pay for all water, gas, heat, air conditioning,
light, power, telephone, sewer, sprinkler charges and other
utilities and services used on or from the Premises,
together with any taxes, penalties, surcharges or the like
pertaining thereto, and maintenance charges for utilities
and shall furnish all electric light bulbs, ballasts and
tubes used within the Premises. If any such services are not
separately
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metered to Tenant, Tenant shall pay a reasonable proportion,
as determined by Landlord, of all charges jointly serving
other premises, Landlord shall not be liable for any damages
directly or indirectly resulting from nor shall the Rent or
any monies owed Landlord under this Lease herein reserved be
abated by reason of (a) the installation, use or
interruption of use of any equipment used in connection with
the furnishing of any of the foregoing utilities and
services, (b) failure to furnish or delay in furnishing any
of the foregoing utilities and services, when such failure
or delay is caused by acts of God or the elements, labor
disturbances of any character, any other accidents or other
conditions beyond the reasonable control of Landlord, or (c)
the limitation, curtailment, rationing or restriction on use
of water, electricity, gas or any other form of energy or
any other service or utility whatsoever serving the Premises
or Project. Landlord shall be entitled to cooperate
voluntarily and in a reasonable manner in the efforts of
national, state or local government agencies or utility
suppliers in reducing energy or other resource consumption.
The obligation to make services available hereunder shall be
subject to the limitations of any such voluntary, reasonable
program.
SUBORDINATION 16. Without the necessity of any additional document being
executed by Tenant for the purpose of effecting a
subordination, this Lease shall be subject and subordinate
at all times to (a) all ground leases or underlying leases
which may now exist or hereafter be executed affecting the
Premises and/or the land upon which the Premises and Project
are situated, or both, and (b) any mortgage or deed of trust
which may now exist or be placed upon said Project, land,
ground leases or underlying leases, or Landlord's interest
or estate in any of the said items, which is specified as
security. Notwithstanding the foregoing, Landlord shall have
the right to subordinate or cause to be subordinated any
such ground leases or underlying leases or any such liens to
this Lease. In the event that any ground lease or underlying
lease terminates for any reason or any mortgage or deed of
trust is foreclosed or a conveyance in lieu of foreclosure
is made for any reason. Tenant shall execute and deliver,
upon demand by Landlord and in the form requested by
Landlord, any additional documents evidencing the priority
of subordination of this Lease with respect to any such
ground leases or underlying leases or any such mortgage or
deed of trust. Landlord will attempt to get a
non-disturbance agreement from any subsequent mortgagor on
the property.
FINANCIAL 17. At the request of Landlord, but not more than twice in any
STATEMENTS twelve (12) month period, Tenant shall provide to Landlord
its current financial statement or other information
discussing financial worth which Landlord shall use solely
for purposes of this Lease and in connection with the
ownership, management and disposition of the property
subject hereto.
ESTOPPEL 18. Tenant agrees from time to time within ten (10) days after
CERTIFICATES request of Landlord, to delivery to Landlord, or Landlord's
designee, an estoppel certificate stating that this Lease is
in full force and effect, the date to which Rent has been
paid, the unexpired portion of this Lease and such other
matters pertaining to this Lease as may be reasonably
requested by Landlord. Failure by Tenant to execute and
deliver such certificate shall constitute an acceptance of
the Premises and acknowledgement by Tenant that the
statements included are true and correct without exception.
Landlord and Tenant intend that any statement delivered
pursuant to this paragraph may be relied upon by any
mortgagee, beneficiary, purchaser or prospective purchaser
of the Project or any interest therein. The parties agree
that Tenant's obligation to furnish such estoppel
certificates in a timely fashion is a material inducement
for Landlord's execution of the Lease.
SECURITY 19. Tenant agrees to deposit with Landlord upon execution of
DEPOSIT this Lease, a Security Deposit as stated in the Basic Lease
Information which sum shall be held by Landlord, without
obligation for interest, as security for the performance of
Tenant's covenants and obligations under this Lease, it
being expressly understood and agreed that such deposit is
not an advance rental deposit or a measure of damages
incurred by Landlord in case of Tenant's default. Upon the
occurrence of any event of default by Tenant, Landlord may,
from time, without prejudice to any other remedy provided
herein or provided by law, use such fund to the extent
necessary to make good any arrears of Rent or other payments
due to Landlord hereunder and any other damage, injury,
expense or liability caused by such event of default, and
Tenant shall pay to Landlord, on demand, the amount so
applied in order to restore the Security Deposit to its
original amount. Although the Security Deposit shall be
deemed the property of Landlord, any remaining balance of
such deposit shall be returned by Landlord to Tenant at such
time after termination of this Lease that all of the
Tenant's obligations under this Lease have been fulfilled.
TENANT'S 20. Tenant shall look solely to Landlord's interest in the
REMEDIES Project for recovery of any judgement from Landlord.
Landlord, or if Landlord is a partnership, its partners
whether general or limited, or if it is a corporation, its
directors, officers of shareholders, shall never be
personally liable for any such judgement. Any lien obtained
to enforce any such judgement and any levy of execution
thereon shall be subject and subordinate to any lien,
mortgage or deed of trust on the Project.
ASSIGNMENT 21. A. Tenant shall not assign or sublet the Premises or any
AND part thereof without Landlord's prior written approval
SUBLETTING except as provided herein. If Tenant desires to assign this
Lease or sublet any or all of the Premises, Tenant shall
give Landlord written notice sixty (60) days prior to the
anticipated effective date of the assignment or sublease.
Landlord shall then have a period of thirty (30) days
following receipt of such notice to notify Tenant in writing
that Landlord elects to permit Tenant to assign this Lease
or sublet such space, subject, however, to Landlord's prior
written approval of the proposed assignee or subtenant and
of any related documents or agreements associated with the
assignment or sublease, such consent not to be unreasonably
withheld so long as the use of the Premises by such proposed
assignee or subtenant would be a Permitted Use and would not
in Landlord's opinion increase Occupant Density of the
Project, the proposed assignee or subtenant is of sound
financial condition, and the proposed assignment or sublease
would not be likely to result in any decrease in Rent. If
Landlord should fail to notify after having received
notification of such intent to sublease, Tenant in writing
of such election within said period, Landlord shall be
deemed to have approved the proposed assignee or subtenant.
B. Any Rent or other reconsideration realized by Tenant
under any such sublease or assignment in excess of the Rent
payable hereunder, after amortization of (1) the reasonable
cost of any improvements which Tenant has made to the
Premises and (2) reasonable subletting and assignment costs,
shall be divided and paid fifty percent (50%) to Tenant,
fifty percent (50%) to Landlord.
C. In any subletting or assignment undertaken by Tenant,
Tenant shall diligently seek to obtain the maximum rental
amount available in the marketplace for such subletting or
assignment.
D. For purposes of this Lease, and assignment or subletting
shall not include any assignment or sublease of all or any
portion of the Premises made to any entity which controls,
is controlled by, or is under common control with Tenant; to
any entity which results from a merger or consolidation with
Tenant (including any successor corporation); to any entity
engaged in a joint venture with Tenant; or to any entity
which acquires substantially all of the stock or assets of
Tenant, as a going concern, with respect to the business
that is being conducted in the Premises (hereinafter each
"Permitted Transfer"). In addition, a sale or transfer of
capital stock of Tenant shall be deemed a Permitted Transfer
if (1) such sale or transfer occurs in connection with any
bona fide financing or capitalization for the benefit of
Tenant, or (2) Tenant is a publicly traded corporation,
provided Landlord is in no worse position with respect to
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Landlord's economic security under this Lease.
Notwithstanding anything to the contrary contained in this
Lease, Landlord shall have no right of approval or consent
with respect to any Permitted Transfer, nor shall Landlord
have any right to any sums or other economic consideration
resulting from any Permitted Transfer.
Notwithstanding the foregoing, a transfer shall be a
"permitted transfer" only if Landlord is in no worse a
position with respect to Landlord's economic security under
this Lease (including payment of rent).
F. No assignment or subletting by Tenant shall relieve
Tenant of any obligations under this Lease. Any assignment
or subletting which conflicts with the provisions hereof
shall be void.
QUIET 22. Landlord represents that it has full right and authority to
ENJOYMENT enter into this Lease and that Tenant, upon paying the Rent
and performing its other covenants and agreements herein set
forth, shall peaceably and quietly have, hold and enjoy the
Premises for the Term hereof without hindrance or
molestation from Landlord, subject to the terms and
provisions of this Lease.
CONDEMNATION 23. A. If the whole or any substantial portion of the Project of
which the Premises are a part should be taken or condemned
for any public use under governmental law, ordinance, or
regulation, or by right of eminent domain, or by private
purchase in lieu thereof, and the taking would prevent or
materially interfere with the Permitted Use of the Premises,
this Lease shall terminate and the Rent shall be abated
during the unexpired portion of this Lease, effective when
the physical taking of said Premises shall have occurred.
B. If a portion of the Project of which the Premises are a part
should be taken or condemned for any public use under any
governmental law, ordinance, or regulation, or by right of
eminent domain, or by private purchase in lieu thereof, and
this Lease is not terminated as provided in the subparagraph
23A above, this Lease shall not terminate, but the Rent
payable hereunder during the unexpired portion of the Lease
shall be reduced to such extent as may be fair and
reasonable under all of the circumstances.
C. Landlord shall be entitled to any and all payment, income,
rent, award, or any interest therein whatsoever which may be
paid or made in connection with such taking or conveyance
and Tenant shall have no claim against Landlord or otherwise
for the value of any unexpired portion of this Lease.
Notwithstanding the foregoing paragraph, any compensation
specifically awarded Tenant for loss of business, Tenant's
personal property, the unamortized cost of any tenant
improvements or alterations, moving cost or loss of
goodwill, shall be and remain the property of Tenant.
CASUALTY 24. A. If the Premises should be damaged or destroyed by fire,
DAMAGE tornado or other casualty, Tenant shall give immediate
written notice thereof to Landlord. Within thirty (30)
days of such notice, Landlord shall notify Tenant whether
in Landlord's opinion such repairs can be made either (1)
within ninety (90) days, (2) in more than ninety (90)
days but in less than one hundred eighty (180) days, or
(3) in more than one hundred eighty (180) days from the
date of such notice; Landlord's determination shall be
binding on Tenant. If Landlord fails to complete the
repairs within one hundred fifty (150) days after the
date upon which Landlord is notified of such damage, such
period of time to be extended for delays caused by the
fault or neglect of Tenant or because of acts of God,
acts of public agencies, labor disputes, strikes, fires,
freight embargoes, rainy or stormy weather, inability to
obtain materials, supplies or fuels, or delay of the
contractors or subcontractors due to such causes or other
contingencies beyond the control of Landlord, Tenant may at
its option terminate this Lease by delivering written notice
of termination to Landlord whereupon this Lease shall
terminate thirty (30) days thereafter.
B. If the Premises should be damaged by fire, tornado or other
casualty but only to such extent that rebuilding or repairs
can in Landlord's estimation be completed within ninety (90)
days after the date upon which Landlord is notified by
Tenant of such damage, this Lease shall not terminate, and
Landlord shall at its sole cost and expense thereupon
proceed with reasonable diligence to rebuild and repair the
Premises to substantially the condition in which they
existed prior to such damage, except that Landlord shall not
be required to rebuild, repair or replace any part of the
partitions, fixtures, additions and other improvements which
may have been placed in, on or about the Premises by Tenant.
If the Premises are untenantable in whole or in part
following such damage, the Rent payable hereunder during the
period in which they are untenantable shall be reduced to
such extent as may be fair and reasonable under all of the
circumstances.
C. If the Premises should be damaged by fire, tornado or
other casualty but only to such extent that rebuilding or
repairs can in Landlord's estimation be completed in more
than ninety (90) days but in less than one hundred eighty
(180) days, then Landlord shall have the option of either
(1) terminating the Lease by written notice given to
Tenant within thirty (30) days after the date upon which
Landlord is notified by Tenant of such damage, effective
upon the date of the occurrence of such damage, in which
event the Rent shall be abated during the unexpired
portion of the Lease, or (2) electing to rebuild or
repair the Premises to substantially the condition in
which they existed prior to such damage except that
Landlord shall not be required to rebuild, repair or
replace any part of the partitions, fixtures, additions
and other improvements which may have been placed in, on
or about the Premises by Tenant. If the Premises are
untenantable in whole or in part following such damage,
the Rent payable hereunder during the period in which
they are untenantable shall be reduced to such extent as
may be fair and reasonable under all of the
circumstances. In the event that Landlord should fail to
complete such repairs and rebuilding within one hundred
eighty (180) days after the date upon which Landlord is
notified by Tenant of such damage, such period of time to
be extended for delays caused by the fault or neglect of
Tenant or because of acts of God, acts of public
agencies, labor disputes, strikes, fires, freight
embargoes, rainy or stormy weather, inability to obtain
materials, supplies or fuels, or delay of the contractors
or subcontractors due to such causes or other
contingencies beyond the reasonable control of Landlord,
Tenant may at its option terminate this Lease by
delivering thirty (30) days prior written notice of
termination to Landlord as Tenant's exclusive remedy,
whereupon all rights and obligations hereunder shall
cease and terminate.
D. If the Premises should be so damaged by fire, tornado, or
other casualty that rebuilding or repairs cannot in
Landlord's estimation be completed within one hundred eighty
(180) days after the date upon which Landlord is notified by
Tenant of such damage, this Lease shall terminate and the
Rent shall be abated during the unexpired portion of this
Lease, effective upon the date of the occurrence of such
damage.
E. Notwithstanding anything herein to the contrary, in the
event that holder of any indebtedness secured by a mortgage
or deed of trust covering the Premises requires that the
insurance proceeds be applied to such indebtedness, then
Landlord shall have the right to terminate this Lease by
delivering written notice of termination to Tenant within
fifteen (15) days after such requirement is made by any such
holder, whereupon
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all rights and obligations hereunder shall cease and
terminate.
F. The provision of Section 1942, Subdivision 2, and
Section 1933, Subdivision 4, of the Civil Code of California
is superseded by the foregoing.
G. In the event Landlord chooses to rebuild under this
Paragraph 24, Landlord agrees to do so without delay and
complete such rebuilding in as expeditious a manner as is
commercially reasonably given the circumstances.
HOLDING OVER 25. If Tenant shall retain possession of the Premises or any
portion thereof without Landlord's consent following the
expiration of the Lease or sooner termination for any
reason, then Tenant shall pay to Landlord for each day of
such retention one hundred fifty percent (150%) triple-the
amount of the daily rental for the first month prior to the
date of expiration or termination. Tenant shall also
indemnify and hold Landlord harmless from any loss or
liability resulting from delay by Tenant in surrendering the
Premises, including, without limitation, any claims made by
any succeeding tenant founded on such delay. Alternatively,
if Landlord gives notice of Landlord's consent to Tenant's
holding over, such holding over shall constitute renewal of
the Lease on whatever terms are specified in such notice.
Acceptance of Rent by Landlord following expiration or
termination shall not constitute a renewal of this Lease,
and nothing contained in this paragraph shall waive
Landlord's right of reentry or any other right. Unless
Landlord exercises the option hereby given to it, Tenant
shall be only a Tenant at sufferance, whether or not
Landlord accepts any Rent from Tenant while Tenant is
holding over without Landlord's written consent.
Additionally, in the event that upon termination of the
Lease, Tenant has not fulfilled its obligation with respect
to repairs and cleanup of the Premises or any other Tenant
obligations as set forth in this Lease, then Landlord shall
have the right to perform any such obligations as it deems
necessary at Tenant's sole cost and expense, and any time
required by Landlord to complete such obligations shall be
considered a period of holding over and the terms of this
paragraph shall apply provided Landlord diligently
undertakes to complete such work in a timely
manner.
DEFAULT 26. A. EVENTS OF DEFAULT. The occurrence of any of the following
shall constitute an event of default on the part of Tenant:
(1) ABANDONMENT. Vacation or abandonment of the premises
for a continuous period in excess of five (5) days. Tenant
waives any right of notice Tenant may have under Section
1951.3 of the Civil Code of the State of California, the
terms of this subparagraph 26A being deemed such notice to
Tenant as required by said Section 1951.3.
(2) NONPAYMENT OF RENT. Failure to pay any installment of
Rent or any other amount due and payable hereunder upon the
date when said payment is due, such failure continuing
without cure by payment of the delinquent Rent and late
charge or other obligations for a period of five (5) days
after written notice and demand; provided, however, that
except as expressly otherwise provided herein, Landlord
shall not be required to provide such notice more than twice
during any three (3) year period of the Term, the third such
non-payment in such period constituting default for all
purposes hereof without requirements of notice.
(3) OTHER OBLIGATIONS. Failure to perform any
obligations, agreement or covenant under this Lease other
than those matters specified in subparagraphs (1) and (2) of
this subparagraph 26A, such failure continuing for fifteen
(15) days after written notice of such failure, or such
longer period as Landlord reasonably determines to be
necessary to remedy such default, provided that Tenant shall
continuously and diligently pursue such remedy at all times
until such default is cured.
(4) GENERAL ASSIGNMENT. A general assignment by Tenant
for the benefit of creditors.
(5) BANKRUPTCY. The filing of any voluntary petition in
bankruptcy by Tenant, or the filing of an involuntary
petition by Tenant's creditors which involuntary petition
remains undischarged for a period of thirty (30) days. In
the event that under applicable law the trustee in
bankruptcy or Tenant has the right to affirm this Lease and
continue to perform the obligation of Tenant hereunder, such
trustee or Tenant shall, in such time period as may be
permitted by the bankruptcy court having jurisdiction, cure
all defaults of Tenant hereunder outstanding as of the date
of the affirmance of this Lease and provide to Landlord such
adequate assurances as may be necessary to ensure Landlord
of the continued performance of Tenant's obligations under
this Lease.
(6) RECEIVERSHIP. The employment of a receiver to take
possession of substantially all of Tenant's assets of the
Premises, if such attachment or other seizure remains
undismissed or undischarged for a period of ten (10) days
after the levy thereof.
(7) ATTACHMENT. The attachment, execution or other
judicial seizure of all or substantially all of Tenant's
assets of the Premises, if such attachment or other seizure
remains undismissed or undischarged for a period of twenty
(20) days after the levy thereof.
B. REMEDIES UPON DEFAULT.
(1) RENT. All failures to pay any monetary obligation
to be paid by Tenant under this Lease shall be construed as
obligations for payment of Rent.
(2) TERMINATION. In the event of the occurrence of any
event of default Landlord shall have the right, with or
without notice or demand, to immediately terminate this
Lease, and at any time thereafter recover possession of the
Premises or any part thereof and expel and remove therefrom
Tenant and any other person occupying the same, by any
lawful means, and again repossess and enjoy the Premises
without prejudice to any of the remedies that Landlord may
have under this Lease, or at law or equity by reason of
Tenant's default or of such termination.
(3) CONTINUATION AFTER DEFAULT. Even though Tenant has
breached this Lease and/or abandoned the Premises, this
Lease shall continue in effect for so long as Landlord does
not terminate Tenant's right to possession under paragraph
26B(2) hereof, and Landlord may enforce all its rights and
remedies under this Lease, including but not without
limitation, the right to recover Rent as it becomes due, and
Landlord, without terminating this Lease, may exercise all
of the rights and remedies of a Landlord under Section
1951.4 of the Civil Code of the State of California or any
successor code section. Acts of maintenance preservation or
efforts to lease the Premises or the appointment of a
receiver upon application of Landlord to protect Landlord's
interest under this Lease shall not constitute an election
to terminate Tenant's right to possession.
C. DAMAGES UPON TERMINATION. Should Landlord terminate this
Lease pursuant to the provisions of paragraph 26B(2) hereof,
Landlord shall have all the rights and remedies of a
Landlord provided by Section 1951.2 of the Civil Code of the
State of California, or successor code sections. Upon such
termination, in addition to any other rights and remedies to
which Landlord may be entitled under applicable law,
Landlord shall be entitled to recover from Tenant: (1) the
worth at the time of award of the unpaid Rent and other
amounts which had been earned at the time of termination,
(2) the worth at the time of award of the amount by which
the unpaid Rent which would have been earned after
termination until the time of award exceeds the amount of
such Rent loss that the Tenant proves could have been
reasonably avoided, (3) the worth at the time of award of
the amount by which the unpaid Rent for the balance of the
term after the time of award exceeds the
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amount of such Rent loss that the Tenant proves could be
reasonably avoided, and (4) any other amount necessary to
compensate Landlord for all the detriment proximately caused
by Tenant's failure to perform its obligations under this
Lease or which, in the ordinary course of things, would be
likely to result therefrom. The "worth at the time of award"
of the amounts referred to in (1) and (2) above shall be
computed with interest at the maximum rate allowed by law.
The "worth at the time of award" of the amount referred to
in (3) above shall be computed by discounting such amount at
the Federal Discount Rate of the Federal Reserve Bank of
San Francisco at the time of the award plus one percent
(1%).
D. LATE CHARGE. In addition to its other remedies, Landlord
shall have the right without notice or demand to add to the
amount of any payment required to be made by Tenant
hereunder, and which is not paid on or before the date the
same is due, an amount equal to five percent (5%) of the
delinquency for each month or portion thereof that the
delinquency remains outstanding to compensate Landlord for
the loss of the use of the amount not paid and the
administrative costs caused by the delinquency, the parties
agreeing that Landlord's damage by virtue of such
delinquencies would be difficult to compute and the amount
stated herein represents a reasonable estimate thereof.
E. REMEDIES CUMULATIVE. All rights, privileges and elections
or remedies of the parties are cumulative and not
alternative to the extent permitted by law and except as
otherwise provided herein.
LIENS 27. Tenant shall keep the premises free from liens arising out
of or related to work performed, materials or supplies
furnished or obligations incurred by Tenant or in
connection with work made, suffered or done by Tenant in
or on the Premises or Project. In the event that Tenant
shall not, within ten (10) days following the imposition
of any such lien, cause the same to be released of record
by payment or posting of a proper bond, Landlord shall
have, in addition to all other remedies provided herein
and by law, the right, but not the 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 sums paid by Landlord on behalf of Tenant
and all expenses incurred by Landlord in connection
therefore shall be payable to Landlord by Tenant on
demand with interest at the maximum rate allowable by
law. Landlord shall have the right at all times to post
and keep posted on the Premises any notices permitted or
required by law, or which Landlord shall deem proper, for
the protection of Landlord, the Premises, the Project and
any other party having an interest herein, from
mechanics' and materialmen's liens, and Tenant shall give
Landlord not less than ten (10) business days prior
written notice of the commencement of any work in the
Premises or Project which could lawfully give rise to a
claim for mechanics' or materialmen's lien.
SUBSTITUTION 28.
TRANSFERS BY 29. In the event of a sale or conveyance by Landlord of the
LANDLORD Project, the same shall operate to release Landlord from any
future liability upon any of the covenants or conditions,
express or implied, herein contained in favor of Tenant, and
in such event Tenant agrees to look solely to the
responsibility of the successor in interests of Landlord in
and to this Lease. This Lease shall not be affected by any
such sale and Tenant agrees to attorn to the purchaser or
assignee.
RIGHT OF 30. All covenants and agreements to be performed by Tenant under
LANDLORD TO any of the terms of this Lease shall be performed by Tenant
PERFORM at Tenants' sole cost and expense and without any abatement
TENANT'S of Rent. If Tenant shall fail to pay any sum of money, other
COVENANTS than Rent, required to be paid by it hereunder or shall fail
to perform any other act on its part to be performed
hereunder, and such failure shall continue for five (5)
days after notice thereof by Landlord, Landlord may, but
shall not be obligated to do so, and without waiving or
releasing Tenant from any obligations of the Tenant, make
any such payment or perform any such act on the Tenant's
part to be made or performed. All sums so paid by
Landlord and all necessary incidental costs together with
interest thereon at the maximum rate permitted by law
from the date of such payment by the Landlord shall be
payable to Landlord on demand, and Tenant covenants to
pay such sums, and Landlord shall have, in addition to
any other right or remedy of Landlord, the same right and
remedies in the event of the nonpayment thereof by Tenant
as in the case of default by Tenant in the payment of the
Rent.
WAIVER 31. If either Landlord or Tenant waives the performance of any
term, covenant or condition contained in this Lease, such
waiver shall not be deemed to be a waiver of any subsequent
breach of the same or any other term, covenant or condition
contained herein. The acceptance of Rent by Landlord shall
not constitute a waiver of any preceding breach by Tenant of
any term, covenant or condition or this Lease, regardless of
Landlord's knowledge of such preceding breach at the time
Landlord accepted such Rent. Failure by either party
Landlord to enforce any of the terms, covenants or
conditions of this Lease for any length of time shall not be
deemed to waive or to decrease the right of said party
Landlord to insist thereafter upon strict performance by the
other Party--Tenant. Waiver of by either party Landlord-of
any term, covenant or condition contained in this Lease may
only be made by a written document signed by said party-
Landlord.
NOTICES 32. Each provision of this Lease or of any applicable
governmental laws, ordinances, regulations and other
requirements with reference to the sending, mailing or
delivery of any notice or the making of any payment by
Landlord or Tenant to the other shall be deemed to be
complied with when and if the following steps are taken:
A. All Rent and other payments required to be made by Tenant
to Landlord hereunder shall be payable to Landlord at the
address set forth in the Basic Lease Information, or at such
other address as Landlord may specify from time to time by
written notice delivered in accordance herewith. Tenant's
obligation to pay Rent and any other amounts to Landlord
under the terms of this Lease shall not be deemed satisfied
until such Rent and other amounts have been actually
received by Landlord.
B. All notices, demands, consents and approvals which may or
are required to be given by either party to the other
hereunder shall be in writing and shall be deemed to have
been fully given when deposited in the United States mail,
certified or registered, postage prepaid, and addressed to
the party to be notified at the address for such party
specified in the Basic Lease Information or to such other
place as the party to be notified may from time to time
designate. Tenant appoints as its agent to receive the
service of all default notices and notice of commencement of
unlawful detainer proceedings the person in charge of or
apparently in charge of or occupying the Premises at the
time, and, if there is no such person, then such service may
be made by attaching the same on the main entrance of the
Premises.
-10-
ATTORNEYS 33. In the event either party places the enforcement of this
FEES Lease, or any part thereof, or the collection of any Rent
due, or to become due hereunder, or recovery of the
possession of the Premises in the hands of an attorney or
files suit upon the same, the prevailing party shall recover
its reasonable attorneys' fees and court costs.
SUCCESSORS 34. This Lease shall be binding upon and inure to the benefit of
AND ASSIGNS Landlord, its successors and assigns, and shall be binding
upon and inure to the benefit of Tenant, its successors,
and to the extent assignment may be approved by Landlord
hereunder, Tenant's assigns.
FORCE 35. Whenever a period of time is herein prescribed for action to
MAJEURE be taken by Landlord, Landlord shall not be liable or
responsible for, and there shall be excluded from the
computation for any such period of time, any delays due to
strike, riots, acts of God, shortages of labor or materials,
war, governmental laws, regulations or restrictions or any
other causes of any kind whatsoever which are beyond the
control of Landlord. Whenever a period of time is herein
prescribed for action as to non-monetary obligations to be
taken by Tenant, Tenant shall not be liable or responsible
for, and there shall be excluded from the computation for
any such period of time, any delays due to strike, riots,
acts of God, shortages of labor or materials, war,
governmental laws, regulations or restrictions or any other
causes of any kind whatsoever which are beyond the control
of Tenant.
MISCEL- 36. A. The term "Tenant" or any pronoun used in place thereof
LANEOUS shall indicate and include the masculine or feminine, the
singular or plural number, individuals, firms or
corporations, and their and each of their respective
successors, executors, administrators and permitted assigns,
according to the context hereof.
B. Time is of the essence regarding this Lease and all of
its provisions.
C. This Lease shall in all respects be governed by the laws
of the State of California.
D. This Lease, together with its exhibits, contains all the
agreements of the parties hereto and supercedes any previous
negotiations.
E. There have been no representations made by the Landlord
or understandings made between the parties other than those
set forth in this Lease and its exhibits.
F. This Lease may not be modified except by a written
instrument by the parties hereto.
G. If, for any reason whatsoever, any of the provisions
hereof shall be unenforceable or ineffective, all of the
other provisions shall be and remain in full force and
effect.
ADDITIONAL 37. RIGHT OF FIRST REFUSAL. Provided Tenant is not, and has not
PROVISIONS been, in default of any terms and conditions of this Lease,
Tenant shall have a prior right of refusal to Lease existing
space as it becomes available in the Project, provided no
other Tenant has a pre-existing prior on right on such
space. Upon notification by Landlord either orally or in
writing of the availability of space, Tenant shall have
seven (7) days to notify Landlord of Tenant's desire to
exercise Tenant's prior right of refusal on the terms and
conditions offered by Landlord. In the event Tenant fails to
give Landlord notice of Tenant's election to lease the
additional space within the time period, Tenant shall have
no further right, title or interest in the space provided
Landlord shall not lease said space to any other entity or
individual on terms and conditions that are materially more
favorable to the tenant under such lease than those offered
to Tenant without first offering the space to Tenant upon
the more favorable terms and conditions, whereupon Tenant
shall have seven (7) days to notify Landlord of Tenant's
desire to exercise Tenant's prior right of first refusal
upon the more favorable terms and conditions. In the event
Landlord leases said space, then Tenant shall have the same
prior right of first refusal, as specified in this Section
37, when and if said space becomes available again during
this lease term. If, on the other hand, Tenant exercises its
prior right of refusal in the manner prescribed, Tenant
shall immediately deliver to Landlord payment for the first
month's rent for the space (in the manner as provided for in
this Lease), and the lease for the space shall be
consummated without delay in accordance with the terms and
conditions set forth in the lease offer.
38. OPTION TO RELEASE. While this Lease is in full force and
effect, provided that Tenant is not at such time in default
of any of the terms, covenants and conditions hereof, and
Tenant has never been in material default of this lease,
Tenant shall have the right and option to extend the term
hereof on the premises for two (2) additional periods of
five (5) years each, except that the monthly rental and
terms for said release shall be at the fair market rates
and prevailing terms then in effect on equivalent
properties, of equivalent size, in equivalent areas (but in
no event will the rent be less than the immediately previous
rental rate). Notice of Tenant's intention to exercise the
option must be given to Landlord in writing at least one
hundred eighty (180) days prior to the expiration of the
term.
This option shall apply only to the primary tenant and not
to an assignee or subtenant of Tenant, except for those
parties pre-approved, if any, as assignees or sublessees.
39. TERMINATION OPTION. Notwithstanding anything herein to the
contrary, Tenant shall have one (1) option to terminate
this Lease effective on the last day of month thirty-six
(36) ("early termination date") provided that Tenant
notifies Landlord in writing of its intent to do so prior to
the last day of month twenty-four (24) and pays to
Landlord the cost of all unamortized costs funded by
Landlord including tenant improvements and commission, plus
all abated rent and reduced rent as a result of less than
the occupancy of the entire building during the first two
(2) years of the lease plus an additional two (2) years of
future rent on the entire premises.
40. SIGNAGE. Notwithstanding the provisions of Section 13 above,
Tenant shall have the right to install monument signage
allowed by the City of Hayward, consistent with the
existing signage in BayCenter Business Park, and with the
prior written approval of Landlord.
41. TENANT IMPROVEMENT ALLOWANCE. Landlord shall provide and pay
Tenant a tenant improvement allowance of One Hundred
Seventy-Seven Thousand One Hundred Twenty Dollars
($177,120.00) upon completion of the tenant improvements
specified in Exhibit B herein and submission of a bonafide
invoice evidencing an obligation of Tenant to pay for such
completed work by a competent general contractor and receipt
of final lien releases.
42. LANDLORD WARRANTY. To the best of Landlord's knowledge,
Landlord represents and warrants to Tenant that as of the
date hereof and as of the Term Commencement Date, (a) the
Building and all Building systems are and shall be in good
working condition, structurally sound and free from latent
defects, (b) the Premises and the Building do not violate
any ordinance, rule, code (including without limitation the
requirements of the Americans with Disabilities Act),
covenants or restrictions of record as are applicable to the
Building or the Premises or regulation of any government
agency, and Landlord has not received notice of any possible
violation.
43. HAZARDOUS MATERIALS. Landlord represents and warrants that
the attached Exceltech report dated March 1, 1988
(Exhibit B) is the most recent report obtained by Landlord
concerning Hazardous Materials with respect to the Project.
To the best of Landlord's knowledge Landlord is unaware of
the presence of any Hazardous Materials on the Project that
is in violation of applicable laws. In the event of (a) any
breach of the foregoing representation and warranty or (b)
the occurrence, release or threatened release of any
Hazardous
-11-
Materials on or about the Premises, Building or Project that
is caused by Landlord, or its employees or (c) the presence
of any Hazardous Materials caused by any previous occupant
of the Building that is required by local, state or federal
law to be remediated, then Landlord shall protect,
indemnify, defend and hold Tenant harmless from and against
any costs of clean-up of such Hazardous Materials. The
provisions of this section shall survive the termination of
this Lease.
44. HAZARDOUS MATERIALS. Tenant shall (i) not cause or permit
any "Hazardous Material" (as hereinafter defined) to be
brought upon, kept, or used in or about the Premises by
Tenant, its agents, employees, contractors or invitees in
any manner which shall cause contamination of the Premises
or adjacent property. If Tenant breaches the obligations
stated in the preceding sentence, or if the presence of
Hazardous Material on the Premises caused or permitted by
Tenant results in contamination of the Premises or any
adjacent property, then Tenant shall indemnify, defend and
hold Landlord harmless from any and all claims, judgments,
damages, penalties, fines, costs, liabilities or losses
(including, without limitation, diminution in value of the
Premises and/or adjacent property, damages for the loss or
restriction on use of rentable or useable space or of any
amenity of the Premises and/or adjacent property, damages
arising from any adverse impact on marketing of the Premises
and/or adjacent property, and sums paid in settlement of
claims, attorneys' fees, consultant fees and expert fees)
which arise during or after the Lease Term or any Extended
Term as a result of such contamination. This indemnification
of Landlord by Tenant includes, without limitation, costs
incurred in connection with any investigation of site
conditions or any cleanup, remedial, removal, or restoration
work required by any federal, state or local governmental
agency or subdivision because of Hazardous Material present
in the soil or ground water on or under the Premises and/or
adjacent property. Without limiting the foregoing, if the
presence of any Hazardous Material on the Premises caused or
permitted by Tenant results in any contamination of the
Premises and/or adjacent property, Tenant shall promptly
take all actions at its sole expense as are necessary to
return the Premises and/or adjacent property to the
condition existing prior to the introduction of any such
Hazardous Material to the Premises and/or adjacent property;
provided that Landlord's approval of such actions shall
first be obtained, which approval shall not be unreasonably
withheld so long as such actions would not potentially have
any material adverse long-term or short-term effect on the
Premises and/or adjacent property. As used herein, the term
"Hazardous Material" means any hazardous or toxic substance,
material, or waste, or any substance, materiel or waste
which is or becomes regulated by any local governmental
authority, the State of California or the United States
Government. Upon expiration or earlier termination of this
Lease, Tenant shall duly execute and deliver to Landlord a
certificate (the "Hazardous Waste Certificate") in the form
on Exhibit C attached hereto. In the event Tenant shall fail
to so deliver the Hazardous Waste Certificate, such failure
shall, without further notice or the passage of time,
constitute a default under the Lease and shall entitle
Landlord to retain the entire security deposit held by
Landlord, to be applied toward payment of the cost of
assessing the presence of Hazardous Material on the Premises
and/or adjacent property, and toward payment of all loss,
cost, liability, damage and expense of Landlord arising as a
result of any such contamination and toward such other costs
and expenses of Landlord as Landlord may designate in its
sole discretion. Nothing contained herein shall be deemed
or construed to limit the liability of Tenant to Landlord
hereunder for the breach of any covenant of Tenant under
this Paragraph 44. The provisions of this Paragraph 44
shall survive the expiration or earlier termination of this
Lease and Tenant's surrender the Premises to Landlord.
45. LEASE EFFECTIVE DATE. Submission of this instrument for
examination or signature by Tenant does not constitute a
reservation or option for lease, and it is not effective as
a lease or otherwise until execution by Landlord and Tenant.
IN WITNESS WHEREOF, the parties hereto have executed this
Lease the day and year first above written.
"LANDLORD"
SPIEKER-SINGLETON #87, LIMITED PARTNERSHIP
BY /s/ Peter H. Schnugg
------------------------------------
Peter H. Schnugg
Its Agent for Owner
--------------------------------------
"TENANT"
LYNX THERAPEUTICS, INC.
BY /s/ Sam Eletr
------------------------------------
Print Name SAM ELETR
-----------------------------
Its CEO & CHAIRMAN
-----------------------------
SITE PLAN
Future Phase II
[MAP]
EXHIBIT B
I. OPEN OFFICE
Lynx Therapeutics' officing policy is democratic in nature, areas or
bullpens may be defined by moveable partitions. The furniture is
freestanding. All ranks of employees receive the same space allocation.
There will not be any new construction related to the open office areas
except painting of existing finishes.
II. R&D CHEMISTRY
R&D Chemistry will consist of organic chemistry and supporting
instrumentation spaces. The laboratories will have on the order of
.50-1.0 fume hoods/person. Laboratory finishes will be chemical
resistive epoxy (walls, worksurfaces) and sheet vinyl (flooring). All
spaces will comply with 1991 Uniform Building Code requirements for
laboratories.
III. MOLECULAR BIOLOGY
Molecular Biology spaces will be less fume hood intensive (one hood/8
persons) than Chemistry. Laboratory finishes will be similar to those
in Chemistry. All spaces will comply with 1991 Uniform Building Code
requirements for Laboratories.
IV. MANUFACTURING
Lynx's manufacturing process involves small scale chemical
manufacturing of synthetic DNA products. Processes are bulk formation,
synthesis, chromatography, filtration and precipitation. Finishes will
be chemical resistant epoxy paint (walls) and sheet vinyl flooring. The
flooring in the bulk formulation areas will be a more durable material,
such as troweled epoxy or quarry tile.
V. HVAC
It is presumed, because of the fume hood intensity and air change
requirements of laboratory and manufacturing spaces that modification
and supplements to the existing HVAC system will be required. At this
time the extent of this work is undetermined. The laboratory spaces
require 100% make up air. The office HVAC systems can be recirculating
with make up per ASHRAE standards. Structural work will occur as
necessary to add new HVAC equipment on the roof.
VI. PLUMBING
Existing PVC and copper process piping may be reused, however the
systems will be expanded to reach the laboratory areas adjacent to the
existing laboratory core. Central services include vacuum, argon and
deionized and non potabic water. Domestic water will be supplied to
eyewashes and safety showers per Cal OSHA standards. Existing drain
systems will be expanded to serve new laboratory locations.
Manufacturing process piping will include stainless steel solvent
delivery. All chemical wastes are collected and disposed of by Lynx and
are not part of the drainage system.
Sinks will be provided at a ration of approximately one per four lab/
manufacturing personnel.
VII. ELECTRICAL
The existing 7,000 ampere service appears sufficient to handle the
anticipated loads. Paver requirements are low voltage, 120/208 VAC.
Relocation of existing distribution equipment is expected. Main
distribution panels will remain in place.
Lighting levels in laboratory and manufacturing will be upgraded from
existing office levels. All lighting will comply with the requirements
of Title XXIV, the California Energy Code.
[IMAGE]
[IMAGE]
EXHIBIT C
HAZARDOUS WASTE CERTIFICATE
, 1993
SPIEKER PARTNERS
6000 Stoneridge Mall Road, Suite 270
Pleasanton, CA 94588
RE: That certain lease ("Lease") dated _______, 1993 between Spieker-Singleton
#87, a Limited Partnership ("Landlord"), and Lynx Therapeutics, ("Tenant"),
covering certain real property and improvements thereon located in the
County of Alameda, State of California and more commonly known as 3832 Bay
Center Place, Hayward, California (the "Premises"), as amended.
Gentlemen:
The undersigned, LYNX THERAPEUTICS, as Tenant under the above-captioned Lease,
hereby certifies to the best of Tenant's knowledge and after the inspection of
the Premises by a qualified third party to Landlord that, as of the date hereof,
there are no Hazardous Materials (as such term is defined in the Lease) in or
about the Premises caused by Tenant's use or occupancy or caused by any visitors
to the Building or anyone whatsoever connected to, affiliated with, or
delivering to, or working on behalf, the Tenant.
Tenant hereby acknowledges its continuing obligation under PARAGRAPH 44
(Hazardous Materials Provisions) of the lease, notwithstanding the expiration or
other termination of the Lease term, to indemnify, defend and hold Landlord
harmless from and against any and all claims, judgments, damages, penalties,
fines, costs, liabilities or losses (as more fully set forth in said PARAGRAPH
44) as a result of the presence of Hazardous Material brought upon, kept or used
in or about the Premises by Tenant, its agents, employees, contractors or
invitees.
The undersigned understands that Landlord will be relying upon the statements
of Tenant contained herein in Landlord's continued maintenance and operation
of the Premises.
Lynx Therapeutics, a
- --------------------------------------------
By:
---------------------------------
Its:
---------------------------------
By:
---------------------------------
Its:
---------------------------------
EXHIBIT D
FIRST RIGHT OF REFUSAL ON ADJACENT PROPERTY
In consideration of that Lease Agreement between Spieker-Singleton #87,
Limited Partnership, and Lynx Therapeutics, Inc. "Lynx", the general partners
of Spieker-Singleton #115, Limited Partnership and any of its affiliated
successors, "S-S #115", does hereby grant to Lynx the following first right
of refusal on two parcels of land totalling 7.1 acres at Whitesell Road and
BayCenter Place, Hayward, California, APN #439-99-73 and APN #439-99-77 (the
"Land").
Provided Lynx is not and has not been in default of any terms and conditions
of the Lease, then Lynx will have the following option on the above
referenced land. In the event Landlord intends to offer for lease on a build
to suit basis a project on such land, S-S #115 will first offer the right to
Lynx to lease such a project on the same terms and conditions as Landlord
intends to offer to a third party. Landlord's obligation to extend such offer
to Lynx shall however be limited to only those times and situations where
Lynx's financial condition permits the financing of such build to suit on
customary and reasonable terms and conditions offered by Landlord. If Lynx is
otherwise able to secure financing for such a project reasonably acceptable
to Landlord, then Landlord shall be obligated to extend such offer to Lynx.
Lynx shall have seven (7) days to notify S-S #115 of Lynx's desire to
exercise the prior right of refusal on the terms and conditions offered by
S-S #115. In the event S-S #115 intends to offer the Land for sale, S-S #115
will first offer to sell it to Lynx. Lynx shall have seven (7) days to notify
S-S #115 of Lynx's desire to purchase the Land on the terms S-S #115 has
offered and a contract shall be entered into immediately thereafter. In the
event that Landlord intends to offer the Land for sale or lease to an
unaffiliated third party on terms fifteen percent (15%) more advantageous
than Landlord previously offered to Lynx, Landlord will first offer to sell
the Land to Lynx or lease a build to suit to on such more favorable terms and
Lynx shall have seven (7) days to notify S-S #115 of Lynx's desire to
purchase the Land or lease a build to suit on these terms and a contract
shall be entered into immediately thereafter.
By: /s/ [ILLEGIBLE]
---------------------
Its: Agent for Owner
EXHIBIT B
[ATTACH LAYOUT OF PREMISES SUBLEASED]
EXHIBIT B
[Floorplan]
EXHIBIT C
FORM OF
ASSIGNMENT AND ASSUMPTION
OF SUBLEASE OBLIGATIONS
THIS ASSIGNMENT AND ASSUMPTION OF SUBLEASE OBLIGATIONS (this
"Assignment") is dated as of _________, 1998 by and among LYNX THERAPEUTICS,
INC., a Delaware corporation ("Assignor"), KOSAN BIOSCIENCES INCORPORATED, a
California corporation ("Assignee") and INEX PHARMACEUTICALS (U.S.A.), INC.,
a Washington corporation ("Subtenant").
WHEREAS, Assignor is sublessor under that certain Sublease dated
__________, 1998, by and between Assignor and Subtenant (the "Inex
Sublease"), respecting certain premises (the "Premises") with a street
address of 3832 Bay Road, Hayward, California, as more particularly described
therein, whereby Assignor subleased to Subtenant approximately 6,298 square
feet of the Premises (the "Inex Premises") and agreed to provide certain
services to Subtenant pursuant to the terms of the Inex Sublease;
WHEREAS, Assignor subleased the remainder of the Premises (the
"Remaining Premises") to Assignee pursuant to that certain Sublease between
Assignor and Assignee dated of even date herewith (the "Kosan Sublease"), such
that Assignor will no longer have possession of any part of the Premises;
WHEREAS, Assignor desires to assign to Assignee the service obligations
accruing under the Inex Sublease for the period (referred to herein as the
"Service Period") commencing on the "Commencement Date" (as defined in the Kosan
Sublease) and ending on the date of the termination of the term of the Kosan
Sublease, and Assignee desires to assume such service obligations;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Assignor, Assignee, and Subtenant
agree as follows:
1. ASSIGNMENT OF SERVICE OBLIGATIONS.
Subject to the terms, conditions and limitations set forth in this
Assignment, the Inex Sublease and the underlying master lease ("Master Lease")
between Assignor, as tenant, and Spieker-Singleton #87, Limited Partnership, as
landlord ("Master Lessor"), Assignor hereby assigns and Assignee hereby assumes
all of Assignor's rights and obligations to perform the following services
("Services") during the Service Period under Section 6(c)(ii) of the Inex
Sublease: gas, electricity, HVAC and HVAC maintenance service, waste management
and recycling, house vacuum, RODI water system, and emergency power. Subtenant
agrees to reimburse Assignee for fourteen and 22/100 percent (14.22%) of the
costs incurred by Assignee with respect to the Services; provided, however that
one hundred percent (100%) of any Services performed or provided for the sole
benefit of Subtenant (as reasonably determined by Assignee)
14.
or as a result of any negligent act or omission of Subtenant or any of its
agents, employees, contractors or invitees, shall be reimbursed by Subtenant to
Assignee. Such reimbursement shall be made by Subtenant within ten (10) days
after its receipt of a written notice from Assignee stating the cost incurred by
Assignee for the Services. If requested, Assignee shall provide Subtenant with
reasonable, supporting back-up detail for such costs. Subtenant acknowledges
that payment to Assignee for the Services is an obligation accruing under the
Inex Sublease. Accordingly, if Subtenant fails to make a required reimbursement
payment to Assignee within the ten (10)-day time period described above, such
failure shall be deemed a default under the Inex Sublease. In the event of such
a default under the Inex Sublease, Assignor shall promptly commence and
prosecute an unlawful detainer action against Subtenant pursuant to the Sublease
for failure of Subtenant to pay rent. In addition, any reimbursement payment
which is not paid by Subtenant within the foregoing ten (10)-day period will
accrue interest at the daily rate of ten percent (10%) or the maximum rate
allowable by law, whichever is less, until paid to Assignee.
2. ASSUMPTION OF OBLIGATIONS.
Assignee does hereby accept this assignment and, for the benefit of
Assignor and Subtenant, expressly assumes and agrees to provide the Services
during the Service Period to the Remaining Premises, subject to the terms and
conditions set forth in this Assignment, it being understood that (i)
Assignee shall have no obligations under this Assignment unless and until the
Commencement Date shall occur, and (ii) Assignee shall have no liability or
responsibility with respect to any Services first arising and accruing during
any time period other than the Service Period. Notwithstanding anything to
the contrary contained in this Assignment or the Inex Sublease, there shall
be no abatement of rent under the Inex Sublease or liability of Assignee or
Assignor on account of any injury or interference with Subtenant's business
(including loss of profits) with respect to any cessation of utilities or the
performance of any Services. Assignee shall not be responsible for repairs
required by an accident, fire or other peril, or for damage caused to any
part of the Inex Premises or the Remaining Premises by any act, negligence or
omission of Subtenant or its agents, contractors, employees or invitees. It
is an express condition precedent to all obligations of Assignee with respect
to the Services that Subtenant shall have notified Assignee of the need for
such Services.
3. WAIVER OF SUBROGATION.
The waiver of subrogation provisions set forth in Section 9 of the
Master Lease shall be deemed a four-party agreement binding among and inuring to
the benefit of Assignor, Assignee, Subtenant and Master Lessor (by reason of its
consent to the Kosan Sublease).
4. MISCELLANEOUS.
This Assignment shall be binding upon and shall inure to the benefit of
the parties hereto and their respective heirs, successors and assigns. If either
party brings an action or legal proceeding with respect to this Assignment, the
prevailing party shall be entitled to recover its reasonable attorneys' fees and
costs. All captions contained in this Assignment are for convenience of
reference only and shall not affect the construction of this Assignment. This
Assignment shall be governed by California law. If any one or more of the
provisions of this Assignment shall be invalid, illegal or unenforceable in any
respect, the validity, legality and
15.
enforceability or the remaining provisions contained herein shall not in any way
be affected or impaired thereby.
Executed as of the date first above written.
ASSIGNOR:
LYNX THERAPEUTICS, INC.
By:
-----------------------------------
Its:
-----------------------------------
By:
-----------------------------------
Its:
-----------------------------------
ASSIGNEE:
KOSAN BIOSCIENCES INCORPORATED
By:
-----------------------------------
Its:
-----------------------------------
By:
-----------------------------------
Its:
-----------------------------------
SUBTENANT:
INEX PHARMACEUTICALS (U.S.A.) INC.
By:
-----------------------------------
Its:
-----------------------------------
By:
-----------------------------------
Its:
-----------------------------------
16.
EXHIBIT D
[GENERAL DESCRIPTION OF SUBLESSEE IMPROVEMENTS]
17
EXHIBIT D
1. OFFICE
Kosan Biosciences intends to improve the existing open office space
with the addition of approximately 14+ hard-walled executive offices
and one to two executive conference rooms. The office improvements may
also require a partitioning wall, which will subdivide the now existing
open office space. An additional access door between the office and R &
D areas may also be required.
2. R & D CHEMISTRY
The Chemistry laboratories will have approximately 1 fume hood per
person. Maintaining this ratio may require the addition of
approximately 10 fume hoods and corresponding HVAC improvements.
3. FERMENTATION
Kosan expects to improve the now existing engineering space and
possibly an additional 1000 sq. ft. to accommodate fermentation
equipment for the production of research and/or GMP grade products.
This improvement will require, but is not limited to, the installation
of central steam generating equipment and associated plumbing, drainage
plumbing and channels, waste disposal equipment, HVAC improvements and
ducting, plumbed central gases, routing of electrical and water lines,
alteration to the existing drop ceiling, and upgrade of flooring to
epoxy resin.
EXHIBIT E
IMPROVEMENTS AND EQUIPMENT TO BE REMOVED BY SUBLESSOR
Bio safety Cabinets
Portable Equipment
Un-interruptible Power Supplies
Dehumidification Units/Condensers
Autoclave
Glassware Washer
Glassware Dryer
Warehouse Racks
Data Networking Equipment, less cabling
Critical equipment monitoring system
Laminar Flow Hoods
Library racks
De-ionized water system purification bottles
18.