1
EXHIBIT 10.1
LEASE
SCIENCE PARK CENTER LLC
"LANDLORD"
AND
NEUROCRINE BIOSCIENCES, INC.
"TENANT"
LOT 30
TORREY PINES SCIENCE CENTER
SAN DIEGO, CALIFORNIA
* Certain confidential portions of this Exhibit were omitted by means of
blackout of the text (the "Mark"). This Exhibit has been filed separately
with the Secretary of the Commission without the Mark pursuant to the
Company's Application Requesting Confidential Treatment under Rule 24b-2
under the Securities Exchange Act.
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LEASE
TABLE OF CONTENTS
PAGE
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1. Lease Premises..................................................................... 1
2. Basic Lease Provisions............................................................. 1
3. Term............................................................................... 2
4. Construction, Possession and Commencement Date..................................... 2
5. Rent............................................................................... 4
6. Rental Adjustments................................................................. 5
7. Additional Rent and Expenses....................................................... 5
8. [Intentionally Left Blank].......................................................... 7
9. [Intentionally Left Blank].......................................................... 7
10. Use................................................................................. 7
11. Brokers............................................................................ 10
12. Holding Over....................................................................... 11
13. Taxes and Assessments.............................................................. 11
14. Condition of Premises.............................................................. 13
15. Parking Facilities................................................................. 14
16. Utilities and Services............................................................. 14
17. Alterations........................................................................ 14
18. Repairs and Maintenance............................................................ 15
19. Liens.............................................................................. 16
20. Indemnification and Exculpation.................................................... 17
21. Insurance - Waiver of Subrogation.................................................. 18
22. Damage or Destruction.............................................................. 21
23. Eminent Domain..................................................................... 23
24. Defaults and Remedies.............................................................. 25
25. Assignment or Subletting........................................................... 28
26. Attorney's Fees.................................................................... 30
27. Bankruptcy......................................................................... 30
28. Definition of Landlord............................................................. 30
29. Estoppel Certificate............................................................... 31
30. Removal of Property ............................................................... 31
31. Limitation of Landlord's Liability................................................. 32
32. Control by Landlord................................................................ 33
33. Quiet Enjoyment.................................................................... 33
34. Quitclaim Deed..................................................................... 33
35. Subordination and Attornment....................................................... 34
36. Surrender.......................................................................... 35
37. Waiver and Modification............................................................ 35
38. Waiver of Jury Trial and Counterclaims............................................. 35
39. Hazardous Materials................................................................ 35
40. Option to Extend................................................................... 39
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41. Right of First Refusal to Purchase Premises........................................ 40
42. Miscellaneous...................................................................... 41
42.1 Terms and Headings......................................................... 41
42.2 Examination of Lease....................................................... 41
42.3 Time....................................................................... 41
42.4 Covenants and Conditions................................................... 41
42.5 Consents................................................................... 41
42.6 Entire Agreement........................................................... 41
42.7 Severability............................................................... 41
42.8 Recording.................................................................. 41
42.9 Impartial Construction..................................................... 41
42.10 Inurement.................................................................. 42
42.11 Force Majeure.............................................................. 42
42.12 Notices.................................................................... 42
42.13 Authority to Execute Lease................................................. 42
EXHIBIT "A" -- Work Letter
EXHIBIT "B" -- Form of Acknowledgement of Term Commencement Date
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LEASE
THIS LEASE ("Lease") is made as of July 31, 1997, by and between SCIENCE
PARK CENTER LLC, a California limited liability company ("Landlord"), and
NEUROCRINE BIOSCIENCES, INC., a Delaware corporation ("Tenant").
1. LEASE PREMISES
1.1 Landlord hereby leases to Tenant and Tenant hereby leases
from Landlord, those certain premises ("Premises") consisting of (i) that
certain real property ("Land") legally described as Lot 30 of Torrey Pines
Science Center, Unit No. 2, in the City of San Diego, County of San Diego, State
of California, according to Map thereof No. 12845, filed in the Office of the
County Recorder of San Diego County on July 23, 1991, (ii) the entirety of the
building (the "Building") to be constructed on the Land, to consist of two
levels over a subterranean area, and (iii) all landscaping, drainage,
irrigation, lighting, parking facilities, walkways, driveways and other
improvements and appurtenances related thereto, including, but not limited to,
ingress and egress to the public right-of-way as shown on the plans prepared
pursuant to the Work Letter attached hereto as Exhibit "A" (the "Improvements").
The Premises are a part of a development known as Torrey Pines Science Center.
2. BASIC LEASE PROVISIONS
2.1 For convenience of the parties, certain basic provisions of
this Lease are set forth herein. The provisions set forth herein are subject to
the remaining terms and conditions of this Lease and are to be interpreted in
light of such remaining terms and conditions.
2.1.1 Rentable Area of Premises:
Approximately *** square feet
2.1.2 Basic Annual Rent: ***
2.1.3 Monthly Installment of Basic
Annual Rent: ***
2.1.4 (a) Estimated Term Commencement Date:
September 1, 1998
(b) Term Expiration Date: *** from the
Term Commencement Date
2.1.5 Permitted Use: Uses permitted in Section 10.1
* confidential treatment
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2.1.6 Address for Rent Payment and Notices to Landlord:
Science Park Center LLC
4350 La Jolla Village Drive, Suite 930
San Diego, California 92122
Address for Notices to Tenant Prior to Occupancy:
Neurocrine Biosciences, Inc.
3050 Science Park Road
San Diego, California 92121
Address for Notices to Tenant After Occupancy:
Neurocrine Biosciences, Inc.
10555 Science Centre Drive
San Diego, California 92121
2.2 Capitalized terms not otherwise defined in this Lease shall
have the meaning set forth in the Work Letter attached hereto as Exhibit "A"
("Work Letter").
3. TERM
3.1 This Lease shall take effect upon the date of execution
hereof by each of the parties hereto, and each of the provisions hereof shall be
binding upon and inure to the benefit of Landlord and Tenant from the date of
execution hereof by each of the parties hereto.
3.2 The approximate term of this Lease is as set forth in Section
2.1.4. The actual term of this Lease will be that period from the Term
Commencement Date through the Term Expiration Date, subject to earlier
termination of this Lease or extension of the term of this Lease as provided
herein.
4. CONSTRUCTION, POSSESSION AND COMMENCEMENT DATE
4.1 Landlord shall construct the Building and Improvements (the
"Project Work") in accordance with the provisions of the Work Letter. Costs and
expenses associated with the Project Work shall be paid by Landlord in an amount
not to exceed *** and costs and expenses associated with the Project Work in
excess of such amount, if any, shall be paid by Tenant. Landlord shall commence
construction of the Project Work prior to September 1, 1997, as such date is
extended by the number of days of Tenant-Caused Delays and Force-Majeure Delays.
Tenant agrees that in the event Landlord fails to commence construction of the
Project on or before September 1, 1997, this Lease shall not be void or voidable
and Landlord shall not be liable to Tenant for any loss or damage resulting
therefrom. To "commence construction" shall mean to commence grading of the
Land. Once Landlord has commenced grading, Landlord will diligently pursue the
Project Work to completion.
* confidential treatment
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4.2 Landlord shall endeavor to tender possession of the Premises,
with the Project Work Substantially Completed, to Tenant on the estimated Term
Commencement Date as set forth in Section 2.1.4(a). Tenant agrees that in the
event Landlord fails to tender possession of the Premises with the Project Work
Substantially Completed on or before the estimated Term Commencement Date, this
Lease shall not be void or voidable and Landlord shall not be liable to Tenant
for any loss or damage resulting therefrom except as expressly provided herein.
In such event, however, Tenant's obligation to pay Basic Annual Rent and
Operating Expenses shall not commence until the actual Term Commencement Date.
Without limiting the generality of the foregoing, Tenant expressly waives any
right to terminate this Lease because of delays in completion of construction of
the Project Work, except Tenant shall have the right to terminate this Lease (i)
due to nonperformance by Landlord if Landlord has not tendered possession of the
Premises with such work Substantially Completed on or before a date one year
after the estimated Term Commencement Date, as such date is extended by the
number of days of Tenant-Caused Delays and Force-Majeure Delays; or (ii) if on
or before October 1, 1997, Landlord has failed, for any reason whatsoever, to
secure (a) a construction loan for the construction of the Premises in the
approximate amount of *** or (b) grading and foundation permits
necessary for the commencement of construction of the Premises.
4.3 The actual Term Commencement Date shall be a date selected by
Tenant no later than the later of (i) the date Landlord tenders possession of
the Premises to Tenant with all the Project Work Substantially Completed, or
(ii) the maturity date of the construction loan for the Project Work. Landlord
and Tenant shall execute a written acknowledgment of the Term Commencement Date
and the Term Expiration Date when such is established in substantially the form
attached hereto as Exhibit "B" and attach it to this Lease as Exhibit "B-1";
however, failure to execute and deliver such acknowledgement shall not affect
Tenant's liability hereunder.
4.4 As used in Section 4.4 above and elsewhere in this Lease and
the Work Letter, the terms "Substantially Complete", "Substantially Completed",
and "Substantial Completion" shall mean the date of receipt of an interim or
final right to occupy from the City of San Diego (or check-off of line 61,
"approved to occupy," of the inspection card, or comparable line if the card is
modified), and all conditions to the issuance of a final certificate of
occupancy have been satisfied, including any offsite conditions, and the only
steps which must be taken by the appropriate governmental agency to issue the
final certificate of occupancy are purely ministerial in nature. "Substantial
Completion" is not dependent upon completion of punch-list items described in
Section 6.3 of the Work Letter or receipt of a formal certificate of occupancy.
However, "Substantial Completion" shall not be earlier than the date the air in
the Premises is balanced sufficiently to allow the conduct of Tenant's business
(as certified by the mechanical subcontractor), and shall not be later than the
date Tenant actually commences the conduct of its business on the Premises
(regardless of the state of the air balancing).
4.5 Prior to entry by Tenant onto the Premises before the Term
Commencement Date for the purposes of installing improvements or the placement
of personal property, Tenant shall furnish to Landlord evidence satisfactory to
Landlord that insurance coverages required of Tenant under the provisions of
Article 21 are in effect. Entry by Tenant onto the Premises prior to the Term
Commencement Date for such purposes shall be subject to all of the terms and
conditions of this Lease other than the payment of Basic Annual Rent and
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Operating Expenses, shall not interfere with the performance by Landlord or the
Project Contractor with the Project Work, shall be limited to the last ninety
(90) days prior to the estimated Substantial Completion of the Premises, and
shall be made only with the advance written consent of Landlord, which consent
shall not be unreasonably withheld. Landlord shall allow Tenant such entry no
later than at least thirty (30) days prior to Substantial Completion of the
Premises. In the event of entry by Tenant or its agents onto the Premises prior
to the Term Commencement Date, Tenant agrees to indemnify, protect, defend and
hold Landlord harmless from any and all loss or damage to property, completed
work, fixtures, equipment, materials or merchandise, or from liability for death
of or injury to any person arising from Tenant's entry onto the Premises, except
to the extent caused by the active negligence of Landlord or its agents.
Tenant's entry prior to the Term Commencement Date shall not be deemed Tenant's
acceptance of the Premises.
4.6 The Landlord named herein (Science Park Center LLC)
guarantees lien-free completion of the Project Work pursuant to the provisions
of this Lease and the Work Letter, regardless of any assignment of its interest
herein, unless prevented from doing so by Tenant's failure to perform its
obligations under this Lease or the Work Letter.
. 5. RENT
5.1 Tenant agrees to pay Landlord as Basic Annual Rent for the
Premises the sum set forth in Section 2.1.2, subject to the rental adjustments
provided in Article 6. Basic Annual Rent shall be paid in the equal monthly
installments set forth in Section 2.1.3, subject to the rental adjustments
provided in Article 6 hereof, each in advance on the first day of each and every
calendar month during the term of this Lease.
5.2 In addition to Basic Annual Rent, Tenant agrees to pay to
Landlord as additional rent ("Additional Rent"), at the times hereinafter
specified in this Lease, Operating Expenses as provided in Article 7, and all
other amounts that Tenant assumes or agrees to pay under the provisions of this
Lease, including without limitation any and all other sums that may become due
by reason of any default of Tenant or failure on Tenant's part to comply with
the agreements, terms, covenants and conditions of this Lease to be performed by
Tenant.
5.3 Basic Annual Rent and Additional Rent shall together be
denominated "Rent." Except as expressly set forth in this Lease, Rent shall be
paid to Landlord, without notice, demand, abatement, suspension, deduction,
setoff, counterclaim, or defense except as set forth in Section 5.6, in lawful
money of the United States of America, at the office of Landlord as set forth in
Section 2.1.6 or to such other person or at such other place as Landlord may
from time to time designate in writing.
5.4 In the event the term of this Lease commences or ends on a
day other than the first day of a calendar month, then the Rent for such
fraction of a month shall be prorated for such period on the basis of a thirty
(30) day month and shall be paid at the then current rate for such fractional
month prior to the commencement of the partial month.
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5.5 This is an absolutely net lease to Landlord. It is the intent
of the parties that the Basic Annual Rent payable under this Lease shall be an
absolutely net return to Landlord and that Tenant shall pay all costs and
expenses relating to the Premises unless otherwise expressly provided in this
Lease. Any amount or obligation herein relating to the Premises which is not
expressly declared to be that of Landlord shall be deemed to be an obligation of
Tenant to be performed by Tenant at Tenant's expense. This Lease shall not
terminate, nor shall Tenant have any right to terminate this Lease, except as
expressly provided herein.
5.6. Tenant may, at its election and from time to time, so long
as Tenant is not in default under any provision of this Lease, make payments of
Basic Annual Rent directly to the institutional lender which funds the
construction loan for the construction of the Premises, and to the institutional
lender which ultimately provides permanent financing for the Premises (most
likely, Tokai Bank of California). Tenant may also, at it's election and from
time to time, so long as Tenant is not in default under any provision of this
Lease, and so long as Landlord is not in default under any provision of the
first mortgage encumbering the Premises, make payments of Basic Annual Rent
directly to the holder of the note secured by the second mortgage encumbering
the Premises. In no event may Tenant in any one month pay more than one monthly
installment of principal and interest under each note, and in no event may
Tenant thereby pay more than the Basic Annual Rent then due under this Lease.
Any payments made by Tenant under this Section 5.6 to the holder of either note
may be deducted by Tenant from the monthly installment of Basic Annual Rent then
due Landlord under this Lease.
6. RENTAL ADJUSTMENTS
6.1 The initial Basic Annual Rent set forth in Section 2.1.2
shall be increased or decreased, as the case may be, to an amount equal to ***
of the total costs for the acquisition, development and construction of the
Premises, as determined in accordance with the pro forma attached to and
incorporated into the Work Letter.
6.2 The Basic Annual Rent then in effect (as adjusted pursuant to
Section 6.1 and as previously increased pursuant to this Section 6.2) shall be
increased each year by ***. The first such increase shall become effective
commencing with that monthly rental installment which is first due on or after
the first (1st) anniversary of the Term Commencement Date and subsequent
increases shall become effective on the same day of each calendar year
thereafter for so long as this Lease continues in effect.
7. ADDITIONAL RENT AND EXPENSES
7.1 As Additional Rent, Tenant shall pay to Landlord on the first
day of each calendar month of the term of this Lease, as Additional Rent, (i)
reimbursement and expenses of Landlord's performance of any obligations of
Tenant under this Lease, including but not limited to the provisions of Section
7.2, Article 13 (Taxes and Assessments), Article 16 (Utilities and Services),
Article 18 (Repairs and Maintenance), Article 22 (Damage or Destruction), and
Section 24.3, and (ii) costs of management services in an the amount of *** per
month (increased each year by ***.
*confidential treatment
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7.2 Tenant shall pay directly to the provider of the services all
costs of any kind incurred in connection with the operation, maintenance,
repairs, replacements and management of the Premises ("Operating Expenses"),
including, by way of examples and not as a limitation upon the generality of the
foregoing, (i) costs of maintenance, repairs and replacements to improvements,
fixtures and personal property within the Premises as appropriate to maintain
the Premises in commercially reasonable condition (allowing wear and tear
consistent with commercially reasonable maintenance and repair standards
applicable to comparable buildings), including capital and structural
improvements, equipment utilized for operation and maintenance of the Premises,
and all other improvements, fixtures and personal property; (ii) costs of new
improvements and fixtures added to the Premises; (iii) costs of utilities
furnished to the Premises; (iv) sewer fees; (v) costs of cable TV when
applicable; (vi) costs of trash collection; (vii) costs of cleaning; (viii)
costs of maintenance, repairs and replacements of heating, ventilation, air
conditioning, plumbing, electrical and other systems; (ix) costs of maintenance
of landscape, grounds, drives and parking areas, including periodic resurfacing;
(x) assessments and other expenses payable pursuant to the Project Documents
(described in Section 10.2); (xi) costs of security services and devices; (xii)
costs of building supplies; (xiii) insurance premiums and portions of insured
losses deductible by reason of insurance policy terms; (xiv) costs of service
contracts and services of independent contractors retained to do work of a
nature before referenced; (xv) costs of storage and removal of Hazardous
Materials; (xvi) costs of compensation (including employment taxes and fringe
benefits) of all persons who perform regular and recurring duties connected with
the day-to-day operation and maintenance of the Premises, its equipment, the
adjacent walks, landscaped areas, drives, and parking areas, including without
limitation, janitors, floorwaxers, window-washers, watchmen, gardeners,
sweepers, and handymen; and (xvii) costs of compliance with applicable
governmental laws, ordinances, regulations and requirements.
7.3 Landlord shall not be liable, or responsible for payment of,
any expenses of maintaining, repairing or replacing the Premises or any part
thereof.
7.4 Tenant shall not be responsible for Operating Expenses
attributable to the time period prior to the Term Commencement Date. The
responsibility of Tenant for Operating Expenses attributable to the Premises
shall continue to the latest of (i) the date of termination of the Lease, or
(ii) the date Tenant has fully vacated the Premises.
7.5 Operating Expenses for the calendar year in which Tenant's
obligation to pay them commences and in the calendar year in which such
obligation ceases shall be prorated. Expenses such as taxes, assessments and
insurance premiums which are incurred for an extended time period shall be
prorated based upon time periods to which applicable so that the amounts
attributed to the Premises relate in a reasonable manner to the time period
wherein Tenant has an obligation to pay Operating Expenses.
7.6 In fulfilling its obligations set forth in Section 7.2 and
Article 18, Tenant shall maintain the roof, HVAC system, elevator and other
systems in accordance with no less than the minimum standards established by the
manufacturer and the minimum standards necessary to maintain any warranties in
effect, and Tenant may enter into such maintenance contracts as Tenant
determines is reasonably necessary in order to do so. Landlord shall have the
right, upon
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reasonable notice, to inspect and copy any such maintenance contracts, as well
as records of maintenance conducted by Tenant or any such service provider.
7.7 Landlord shall have the right, upon reasonable notice, to
inspect and copy documents showing in reasonable detail the actual expenses paid
by Tenant pursuant to Section 7.2, Article 13 (Taxes and Assessments), and
Article 16 (Utilities and Services) of this Lease. Tenant shall maintain such
documents as are reasonably necessary for such purpose for a period of not less
than three (3) years.
8. [INTENTIONALLY LEFT BLANK]
9. [INTENTIONALLY LEFT BLANK]
. 10. USE
10.1 Tenant may use the Premises for any of those purposes, and
only those purposes, allowed by (i) the City of San Diego Scientific Research
Zone Ordinance in effect from time to time and as applicable to the Premises,
(ii) any other applicable laws, regulations, ordinances, requirements, permits
and approvals applicable to the Premises, and (iii) all covenants, conditions
and restrictions in the Project Documents (defined in the following Section
10.2) or otherwise recorded against the Land, and shall not use the Premises, or
permit or suffer the Premises to be used, for any other purpose without the
prior written consent of Landlord. Landlord acknowledges that Tenant's
activities may include scientific research and development pertaining to
pharmaceuticals (including radio-active materials and other regulated
substances), corporate and other office space, ancillary manufacturing
capabilities, and vivarium facilities. Tenant may change the use of the Premises
from time to time as long as such changed use is authorized by this Section 10.1
or may otherwise be legally permissible with the consent of Landlord, which
consent shall not be unreasonably withheld.
10.2 Tenant shall conduct its business operations and use the
Premises in compliance with all federal, state, and local laws, regulations,
ordinances, requirements, permits and approvals applicable to the Premises, and
the Project Documents described below. Tenant shall not use or occupy the
Premises in violation of any law or regulation, the Project Documents, or the
certificate of occupancy issued for the Building, and shall, upon five (5) days'
written notice from Landlord, discontinue any use of the Premises which is
declared by any governmental authority having jurisdiction to be a violation of
law, the certificate of occupancy, or any of the Project Documents. To the
extent any use allowed by this Lease conflicts with uses allowed by the Project
Documents, the Project Documents shall govern.
Tenant shall comply with any direction of any
governmental authority having jurisdiction which shall, by reason of the nature
of Tenant's use or occupancy of the Premises, impose any duty upon Tenant or
Landlord with respect to the Premises or with respect to the use or occupation
thereof, including any duty to make structural or capital improvements,
alterations, repairs and replacements to the Premises.
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The "Project Documents" include the following documents,
as they may be amended from time to time:
(a) "Project Plans", as described in the Work Letter;
(b) Hazardous Material Documents, as such are defined
in Section 39.5;
(c) Declaration of Covenants, Conditions and
Restrictions for Torrey Pines Science Center (Unit 2) dated June 22, 1994, and
recorded on June 27, 1994 as File No. 1994-0405385 of the Official Records of
San Diego County, California ("CC&Rs");
(d) Articles of Incorporation and Bylaws of Torrey
Pines Science Center Association for Unit 2;
(e) Planned Industrial Development Permit No. 86-0884
and Planning Director Resolution No. 7658, dated September 26, 1988, as amended
to incorporate the conditions of approval of Coastal Development Permit No.
6-88-504, and including a copy of the City regulations for the SR Zone, and
amended PID 96-0738;
(f) Coastal Development Permit No. 6-88-504, approved
February 5, 1991, and all conditions of approval thereof;
(g) Transportation Demand Management Program for Torrey
Pines Science Center, prepared by the North City TMA Network, dated January 24,
1990;
(h) Torrey Pines Science Center Signage Guidelines and
Criteria, prepared by Graphics Solutions, dated November 17, 1989;
(i) Final Map No. 12845;
(j) Provisions of the SR Zone and other applicable
zoning as such may be adopted or amended by the City of San Diego from time to
time;
(k) Preliminary Title Report issued by Chicago Title
Company dated as of June 6, 1997, and identified as Order No. 007353168, as
modified by that Supplemental Report dated June 16, 1997, as further modified by
that Supplemental Letter dated June 17, 1997, reflecting the status of title to
the Land, together with a plat of all easements and copies of all underlying
documents referred to therein;
(l) Preliminary Geotechnical Investigation prepared by
Leighton Associates dated December 19, 1989;
(m) As-Graded Geotechnical Report prepared by Leighton
Associates dated December 12, 1991;
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(n) Grading Plans for Torrey Pines Science Center Unit
2, prepared by Rick Engineering and approved by the City Engineer on March 13,
1991, and a Certificate from Rick Engineering indicating that the Property has
been graded in conformance with such Grading Plans;
(o) Phase I Environmental Site Assessment prepared by
Harding Lawson Associates dated October 19, 1988;
(p) Phase II Environmental Site Assessment prepared by
Harding Lawson Associates dated April 17, 1989;
(q) Updated Phase 1 Environmental Site Assessment
prepared by Harding Lawson Associates dated April 29, 1994;
(r) Any updated Environmental Site Assessment prepared
as a part of this transaction;
(s) Documents evidencing the release of the Property
from the Licenses described in Section 10.3 of the Lease;
(t) Declaration of Restrictions and Maintenance
Agreement executed by Chevron Land and Development Company and recorded on
February 15, 1990 as File No. 90-086015 of the Official Records of San Diego
County, California.
10.3 Tenant understands and acknowledges that property within two
thousand feet of the Premises, and of which the real property underlying the
Premises was originally a part, is used for commercial engineering and
manufacturing in the field of nuclear power, including the use, operation and/or
production of high temperature gas-cooled reactors, radioisotope and
radiopharmaceutical substances, fusion, and research and development activities
related thereto. Tenant understands that the real property underlying the
Premises has been investigated and evaluated by the United States Nuclear
Regulatory Agency ("NRC") and released from any further NRC licensing or
oversight responsibility. Tenant understands that low-level radioactive wastes
may be present on the property underlying the Premises. Tenant has made its own
determination that the physical condition of the property as described herein
does not interfere with Tenant's intended use of the Premises, and is not
relying on any representation or warranty, express or implied, of Landlord or
Landlord's Agents (as defined in Section 20.1 below) in that regard.
10.4 Tenant shall not do or permit to be done anything which will
invalidate or increase the cost (unless Tenant agrees to pay such increased
cost) of any fire, extended coverage or any other insurance policy covering the
Premises, or which will make such insurance coverage unavailable on commercially
reasonable terms and conditions, and shall comply with all rules, orders,
regulations and requirements of the insurers of the Premises.
10.5 Tenant shall comply with the Americans with Disabilities Act
of 1990 ("ADA"), and the regulations promulgated thereunder, as amended from
time to time. All
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responsibility for compliance with the ADA relating to the Premises and the
activities conducted by Tenant within the Premises shall be exclusively that of
Tenant and not of Landlord, including any duty to make structural or capital
improvements, alterations, repairs and replacements to the Premises. Any
alterations to the Premises made by Tenant for the purpose of complying with the
ADA or which otherwise require compliance with the ADA shall be done in
accordance with Article 17 of this Lease; provided, that Landlord's consent to
such alterations shall not constitute either Landlord's assumption, in whole or
in part, of Tenant's responsibility for compliance with the ADA, or
representation or confirmation by Landlord that such alterations comply with the
provisions of the ADA. However, nothing in this Lease shall be construed to
require Tenant to make structural or capital improvements, alterations, repairs
or replacements to comply with ADA unless and until required to do so by order
of any government entity or court of law exercising proper jurisdiction with
regard thereto, subject to any right to appeal or otherwise contest any such
order.
10.6 Tenant may install signage on and about the Premises to the
extent permitted by, and in conformity with, applicable provisions of the
Project Documents and the City of San Diego Sign Ordinance. Tenant acknowledges
it is familiar with the restrictions of the Project Documents and the City of
San Diego Sign Ordinance, and is not relying on any representations or warranty
of Landlord regarding the number, size or location of any signage. The expense
of design, permits, purchase and installation of any signs shall be the
responsibility of Tenant and the cost thereof shall be borne by Tenant. At the
termination of the Lease, all signs shall be the property of Tenant and may be
removed from the Premises by Tenant, subject to the provisions of Article 36. In
the event Tenant receives permission from the City of San Diego under the Sign
Ordinance for signage which is not allowed by other Project Documents, Landlord
shall reasonably cooperate with Tenant in an effort to amend such other Project
Documents to allow such signage.
10.7 No equipment shall be placed at a location within the
Building other than a location designed to carry the load of the equipment.
Equipment weighing in excess of floor loading capacity shall not be placed in
the Building.
10.8 Tenant shall not use or allow the Premises to be used for
any unlawful purpose, nor shall Tenant cause, maintain or permit any nuisance or
waste in, on, or about the Premises.
11. BROKERS
11.1 Landlord and Tenant represent and warrant one to the other
that there have been no dealings with any real estate broker or agent in
connection with the negotiation of this Lease other than CB CommerciAl (Neil
Fox), whose commission shall be paid by Landlord. Each shall indemnify, defend,
protect, and hold harmless the other from any claim of any other broker as a
result of any act or agreement of the indemnitor.
11.2 Tenant represents and warrants that no broker or agent has
made any representation or warranty relied upon by Tenant in Tenant's decision
to enter into this Lease other than as contained in this Lease.
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12. HOLDING OVER
12.1 If, with Landlord's consent, Tenant holds possession of all
or any part of the Premises after the expiration or earlier termination of this
Lease, Tenant shall become a tenant from month to month upon the date of such
expiration or earlier termination, and in such case Tenant shall continue to pay
in accordance with Article 5 the Basic Annual Rent as adjusted from the Term
Commencement Date in accordance with Article 6, together with Operating Expenses
in accordance with Article 7 and other Additional Rent as may be payable by
Tenant, and such month-to-month tenancy shall be subject to every other term,
covenant and condition contained herein.
12.2 If Tenant remains in possession of all or any portion of the
Premises after the expiration or earlier termination of the term hereof without
the express written consent of Landlord, Tenant shall become a tenant at
sufferance upon the terms of this Lease except that monthly rental shall be
equal to one hundred twenty five percent (125%) of the Basic Annual Rent in
effect during the last twelve (12) months of the Lease term.
12.3 Acceptance by Landlord of Rent after such expiration or
earlier termination shall not result in a renewal or reinstatement of this
Lease.
12.4 The foregoing provisions of this Article 12 are in addition
to and do not affect Landlord's right to re-entry or any other rights of
Landlord under Article 24 or elsewhere in this Lease or as otherwise provided by
law.
13. TAXES AND ASSESSMENTS
13.1 Tenant shall pay and discharge as they become due, promptly
and before delinquency, all taxes, assessment, rates, charges, license fees,
municipal liens, levies, excises or imposts, whether general or special, or
ordinary or extraordinary, of every name, nature, and kind whatsoever, including
all governmental charges of whatsoever name, nature, or kind, which may be
levied, assessed, charged, or imposed, or may become a lien or charge on the
Premises, or any part thereof, or any improvements now or hereafter thereon, or
on Landlord by reason of its ownership of the Premises or any part thereof,
during the entire term hereof, saving and excepting only those taxes hereinafter
in this Article 13 specifically excepted.
13.2 Specifically and without in any way limiting the generality
of the foregoing, Tenant shall pay any and all special assessments or levies or
charges made by any municipal or political subdivision for local improvements,
and shall pay the same in cash as they shall fall due and before they shall
become delinquent and as required by the act and proceedings under which any
such assessments or levies or charges are made by any municipal or political
subdivision. If the right is given to pay either in one sum or in installments,
Tenant may elect either mode of payment and its election shall be binding on
Landlord. If by making an election to pay in installments, any of the
installments shall be payable after the termination of this Lease or any
extended term thereof, the unpaid installments shall be prorated as of the date
of termination, and amounts payable after said date shall be paid by Landlord.
All other taxes and charges payable under this Article 13 shall be prorated as
of and payable at the commencement
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and expiration of the term of this Lease, as the case may be. Landlord shall not
during the term of this Lease undertake any action to place any special
assessments, levies or charges on the Premises without first obtaining the prior
written approval of Tenant, other than those due to new construction, those
payable under any of the Project Documents, and those imposed by the City of San
Diego or other government entity over which Landlord has no control. If Landlord
does undertake such action without Tenant's approval, Landlord, and not Tenant,
shall pay any special assessments, levies or charges sought by such action.
13.3 Anything in this Article 13 to the contrary notwithstanding,
Tenant shall not be required to pay any estate, gift, inheritance, succession,
franchise, income, or excess profits taxes that may be payable by Landlord or
Landlord's legal representative, successors, or assigns.
13.4 Any and all rebates on account of taxes, rates, levies,
charges or assessments required to be paid and paid by Tenant under the
provisions of this Lease shall belong to Tenant, and Landlord will, on the
request of Tenant, execute any receipts, assignments, or other acquittances that
may be necessary in order to secure the recovery of the rebates, and will pay
over to Tenant any rebates that may be received by Landlord.
13.5 Within ninety (90) days following the conclusion of each
calendar year during the term of this Lease, and at such more frequent times as
Landlord may reasonably request, Tenant shall obtain and deliver to Landlord
receipts or duplicate receipts or copies thereof evidencing payment of all
taxes, assessments and other items required hereunder to be paid by Tenant,
together with an accounting showing in reasonable detail the taxes, assessments
and other items paid.
13.6 Tenant shall pay not less than ten (10) days before
delinquency taxes levied against any improvements, fixtures, equipment and
personal property of Tenant or Landlord in or about the Premises, including any
and all personal property installed as part of the Project Work.
13.7 If Tenant shall in good faith desire to contest the validity
or amount of any tax, assessment, levy, or other governmental charge herein
agreed to be paid by Tenant, Tenant shall be permitted to do so, and to defer
the payment of said tax or charge, the validity or amount of which Tenant is so
contesting, until final determination of the contest, by giving to Landlord
written notice thereof prior to the commencement of any contest, which shall be
at least fifteen (15) days prior to delinquency, and by protecting Landlord on
demand by a good and sufficient surety bond against any tax, levy, assessment,
rate or governmental charge, and from any costs, penalties, interest, liability,
or damage arising out of a contest. Landlord shall not be required to join in
any proceeding or contest brought by Tenant unless the provisions of any law
require that the proceeding or contest be brought by or in the name of Landlord.
In that case, Landlord shall join in the contest or permit it to be brought in
Landlord's name so long as Landlord is not required to bear any costs. Tenant,
on final determination of the contest, shall immediately pay or discharge any
decision or judgment rendered, together with all costs, charges, interest and
penalties incidental to the decision or judgment.
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13.8 To the extent Tenant fails to make any payment required by
this Article 13 and Landlord does so on Tenant's behalf, Tenant shall reimburse
Landlord for the cost thereof pursuant to the provisions of Sections 7.1 and
24.3 of this Lease.
14. CONDITION OF PREMISES
14.1 Tenant acknowledges that neither Landlord nor any agent of
Landlord has made any representation or warranty, express or implied, with
respect to the condition of the Premises, or to the Project Work, except as set
forth herein, or with respect to their suitability for the conduct of Tenant's
business.
14.2 Upon Substantial Completion of the Premises, Tenant shall
accept the Premises, including the Project Work, in the condition in which they
then exist, and shall waive any right or claim Tenant may have against Landlord
for any cause directly or indirectly arising out of the condition or delay in
delivery of possession of the Premises, appurtenances thereto, the improvements
thereon and the equipment thereof, except for (i) the warranties made by
Landlord under Section 14.4 to the extent thereof, (ii) responsibility for
covenants and representations made by Landlord in Section 39.8, (iii) the
obligation to deliver the Premises lien-free pursuant to Section 35.4, (iv) the
completion of punch-list items pursuant to Section 6.3 of the Work Letter, and
(v) Tenant's right to terminate this Lease pursuant to Section 4.2 hereof.
Tenant shall thereafter indemnify, defend, protect and hold Landlord harmless
from liability, as provided in Article 20 of the Lease.
14.3 Tenant's taking possession of the Premises and acceptance of
the Premises shall not constitute a waiver of any claims based upon warranty or
defect in regard to design, materials, or construction of the Building and
Improvements against the design professional, contractor, materialman,
manufacturer, or other responsible party (other than Landlord, whose liability
is described in Section 14.4 below), nor for failure of any such party (other
than Landlord) to comply with all applicable building code requirements
(including but not limited to seismic Zone 4 regulations), laws, rules, orders,
ordinances, directions, regulations, permits, approvals, and requirements of all
governmental agencies, offices, departments, bureaus and boards having
jurisdiction, nor for failure to comply with the rules, orders, directions,
regulations, and requirements of any applicable fire rating bureau. Landlord
hereby assigns to Tenant, and Tenant shall have the benefit of, on a
non-exclusive basis, any and all warranties with respect to the design,
materials and construction of the Premises which are assignable to Tenant,
together with all other rights and claims it may have against any design
professional, contractor, materialman, manufacturer, or other responsible party,
or from applicable insurance policies. Landlord and Tenant agree to cooperate
with regard to the enforcement of all such warranties, rights and claims. All
such warranties, rights and claims shall revert to Landlord exclusively upon the
expiration or earlier termination of this Lease. Tenant shall comply with
whatever maintenance and similar standards are required to maintain any
applicable warranties in affect.
14.4 Landlord warrants to Tenant that the Building and
Improvements will be, on Substantial Completion, built in a good and workmanlike
manner and in substantial compliance with the Project Plans and all applicable
building code requirements (including but
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not limited to seismic Zone 4 regulations), laws, rules, orders, ordinances,
directions, regulations, permits, approvals, and requirements of all
governmental agencies, offices, departments, bureaus and boards having
jurisdiction, and with the rules, orders, directions, regulations, and
requirements of any applicable fire rating bureau. However, Tenant's remedies
for breach of any warranty set forth herein shall be limited to enforcement of
claims against the design professional, contractor, materialman, manufacturer,
or other responsible party pursuant to Section 14.3 hereof, and Landlord shall
not be personally liable therefore. Landlord shall not be sued or named as a
party in any suit or action to enforce any such warranty except as may be
necessary to secure jurisdiction of Landlord or to the extent necessary to
enforce any such warranty. Landlord shall not be required to answer or otherwise
plead to any complaint and no judgment will be taken or writ of execution levied
against Landlord with respect thereto.
15. PARKING FACILITIES
15.1 Tenant acknowledges that interior and exterior areas used
for Tenant's equipment, Hazardous Material enclosures, trash enclosures,
mechanical systems, and the like will reduce available parking.
15.2 Tenant shall not place any equipment, storage containers or
any other property on the surface parking area except in accordance with the
Project Plans or as otherwise approved by Landlord, which approval shall not be
unreasonably withheld, or allowed by the Project Documents.
16. UTILITIES AND SERVICES
16.1 Tenant shall pay directly to the provider, prior to
delinquency, for all water, gas, electricity, telephone, sewer, and other
utilities which may be furnished to the Premises during the term of this Lease,
together with any taxes thereon.
16.2 Landlord shall not be liable for, nor shall any eviction of
Tenant result from, any failure of any such utility or service, provided such
failure is not due to the gross negligence or willful misconduct of Landlord,
and in the event of such failure Tenant shall not be entitled to any abatement
or reduction of Rent, nor be relieved from the operation of any covenant or
agreement of this Lease, and Tenant waives any right to terminate this Lease on
account thereof.
17. ALTERATIONS
17.1 Tenant shall make no alterations, additions or improvements
(hereinafter in this section, "improvements") in or to the Premises, other than
interior non-structural alterations, additions or improvements, without
Landlord's prior written consent, which shall not be unreasonably withheld.
Tenant shall deliver to Landlord final plans and specifications and working
drawings for the improvements to Landlord, and Landlord shall have fifteen (15)
days thereafter to grant or withhold its consent. If Landlord does not notify
Tenant of its decision within the fifteen (15) days, Landlord shall be deemed to
have given its approval.
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17.2 If a permit is required to construct the improvements,
Tenant shall deliver a completed, signed-off inspection card to Landlord within
ten (10) days of completion of the improvements, and shall promptly thereafter
obtain and record a notice of completion and deliver a copy thereof to Landlord.
17.3 The improvements shall be constructed only by licensed
contractors approved by Landlord, which approval shall not be unreasonably
withheld. Any such contractor must have in force a general liability insurance
policy of not less than $2,000,000 or such higher limits as Landlord may
reasonably require, which policy of insurance shall name Landlord as an
additional insured. Tenant shall provide Landlord with a copy of the contract
with the contractor prior to the commencement of construction.
17.4 Tenant agrees that any work by Tenant shall be accomplished
in such a manner as to permit any fire sprinkler system and fire water supply
lines to remain fully operable at all times except when minimally necessary for
building reconfiguration work.
17.5 Tenant covenants and agrees that all work done by Tenant
shall be performed in full compliance with all laws, rules, orders, ordinances,
directions, regulations, permits, approvals, and requirements of all
governmental agencies, offices, departments, bureaus and boards having
jurisdiction, and in full compliance with the rules, orders, directions,
regulations, and requirements of any applicable fire rating bureau. Tenant shall
provide Landlord with "as-built" plans showing any change in the Premises within
thirty (30) days after completion.
17.6 Before commencing any work (other than interior
non-structural alterations, additions or improvements), Tenant shall give
Landlord at least five (5) days' prior written notice of the proposed
commencement of such work and, for any such work which exceeds One Hundred
Thousand Dollars ($100,000.00) in cost, if required by Landlord, secure at
Tenant's own cost and expenses a completion and lien indemnity bond approved by
Landlord, which approval will not be unreasonably withheld.
18. REPAIRS AND MAINTENANCE
18.1 Tenant shall, throughout the term of this Lease, at its own
cost and expense (subject to recovery under any warranties assigned to Tenant
under Section 14.3), and without any cost or expense to Landlord, keep and
maintain in good, sanitary and neat order, condition, and repair, the Premises
and every part thereof (subject to wear and tear consistent with commercially
reasonable maintenance and repair standards applicable to comparable buildings),
including structural and capital improvements, all improvements, fixtures,
equipment and personal property built or installed in the Premises, and all
appurtenances thereto, including but not limited to sidewalks, parking areas,
curbs, roads, driveways, lighting standards, landscaping, sewers, water, gas and
electrical distribution systems and facilities, drainage facilities, and all
signs, both illuminated and non-illuminated that are now or hereafter on the
Premises. Without in any way limiting the foregoing, Tenant shall maintain the
lines designating the parking spaces in good condition and paint the same as
often as may be necessary, so that they are easily discernable at all times;
resurface the parking areas as necessary to maintain it in good condition; paint
any exterior portions of the Building as necessary to maintain them in good
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condition; maintain the roof in good condition; and to take all reasonable
precautions to insure that the drainage facilities of the roof are not clogged
and are in good operable condition at all times.
18.2 Tenant shall at all times during the term of this Lease, and
at Tenant's expense, maintain the exterior of the Building, the parking areas,
landscaping and all other portions of the Premises visible from the surrounding
streets in a commercially reasonable condition, and shall maintain sightly
screens, barricades or enclosures around any waste or storage areas.
18.3 Tenant hereby waives Civil Code Sections 1941 and 1942
relating to a landlord's duty to maintain the Premises in a tenantable
condition, and the under said sections or under any law, statute or ordinance
now or hereafter in effect to make repairs at Landlord's expense.
18.4 There shall be no abatement of Rent and no liability of
Landlord by reason of any injury to or interference with Tenant's business
arising from the making of any repairs, alterations or improvements in or to any
portion of the Premises, or in or to improvements, fixtures, equipment and
personal property therein. If repairs or replacements become necessary which by
the terms of this Lease are the responsibility of Tenant and Tenant fails to
make the repairs or replacements, Landlord may do so pursuant to the provisions
of Section 24.3 of this Lease.
19. LIENS
19.1 Tenant shall keep the Premises and every part thereof free
from any liens arising out of work performed, materials furnished or obligations
incurred by Tenant. Tenant further covenants and agrees that any mechanic's lien
filed against the Premises for work claimed to have been done for, or materials
claimed to have been furnished to, Tenant, will be discharged by Tenant, by bond
or otherwise, within thirty (30) days after the filing thereof (or within ten
(10) days after the filing thereof if requested by Landlord as necessary to
facilitate a pending sale or refinancing), at the cost and expense of Tenant.
19.2 Should Tenant fail to discharge any lien of the nature
described in Section 19.1, Landlord may at Landlord's election pay such claim or
post a bond or otherwise provide security to eliminate the lien as a claim
against title and the cost thereof shall be immediately due from Tenant as
Additional Rent.
19.3 In the event Tenant shall lease or finance the acquisition
of office equipment, furnishings, or other personal property utilized by Tenant
in the operation of Tenant's business, Tenant warrants that any Uniform
Commercial Code financing statement executed by Tenant will upon its face or by
exhibit thereto indicate that such financing statement is applicable only to
personal property of Tenant specifically described in the financing statement,
and that such property is subject to the provisions of Section 30 regarding the
removal of property on the expiration or earlier termination of this Lease. In
no event shall the address of the Building be furnished on the financing
statement without qualifying language as to applicability of the lien
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only to personal property of Tenant described in the financing statement. Should
any holder of a security agreement executed by Tenant record or place of record
a financing statement which appears to constitute a lien against any interest of
Landlord, Tenant shall within ten (10) days after the filing of such financing
statement cause (i) copies of the security agreement or other documents to which
the financing statement pertains to be furnished to Landlord to facilitate
Landlord's being in a position to show such lien is not applicable to any
interest of Landlord, and (ii) the holder of the security interest to amend
documents of record so as to clarify that such lien is not applicable to any
interest of Landlord in the Premises.
20. INDEMNIFICATION AND EXCULPATION
20.1 Except to the extent of the responsibility of Landlord
pursuant to Section 20.2 hereof, Tenant agrees to indemnify Landlord, and its
partners and affiliates, and their respective shareholders, directors, officers,
agents, contractors and employees (collectively, "Landlord's Agents"), against,
and to protect, defend, and save them harmless from, all demands, claims, causes
of action, liabilities, losses and judgments, and all reasonable expenses
incurred in investigating or resisting the same (including reasonable attorneys'
fees), for death of or injury to person or damage to property arising out of (i)
any occurrence in, upon or about the Premises during the term of this Lease,
(ii) Tenant's use, occupancy, repairs, maintenance, and improvements of the
Premises and all improvements, fixtures, equipment and personal property
thereon, and (iii) any act or omission of Tenant, its shareholders, directors,
officers, agents, employees, servants, contractors, invitees and subtenants.
Tenant's obligation under this Section 20.1 shall survive the expiration or
earlier termination of the term of this Lease.
20.2 Landlord agrees to indemnify Tenant and Tenant's
shareholders, directors, officers, agents, and employees (collectively "Tenant's
Agents") against and save them harmless from all demands, claims, causes of
action and judgments, and all reasonable expenses incurred in investigating or
resisting the same (including reasonable attorneys' fees), for death of, or
injury to, any person or damage to property arising from or out of any
occurrence in, upon, or about the Premises during the term of this Lease if
caused by the willful misconduct or gross negligence of Landlord or Landlord's
directors, officers, agents, employees, servants, contractors, invitees and
subtenants, unless caused in part by the willful misconduct or gross negligence
of Tenant or Tenant's Agents. Landlord's obligations under this Section 20.2
shall survive the expiration or earlier termination of the term of this Lease.
20.3 Notwithstanding any provision of Sections 20.1 and 20.2 to
the contrary, Landlord shall not be liable to Tenant and Tenant assumes all risk
of damage to any fixtures, goods, inventory, merchandise, equipment, records,
research, experiments, animals and other living organisms, computer hardware and
software, leasehold improvements, and other personal property of any nature
whatsoever, and Landlord shall not be liable for injury to Tenant's business or
any loss of income therefrom relative to such damage, unless caused by
Landlord's or Landlord's Agents' willful misconduct or gross negligence.
20.4 The indemnity obligations of both Landlord and Tenant under
this Section 20 shall be satisfied to the extent of proceeds of applicable
insurance maintained by Tenant to the extent thereof, and thereafter to proceeds
of any applicable insurance maintained
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by Landlord; Landlord and Tenant shall be required to satisfy any such
obligation only to the extent it is not satisfied by proceeds of applicable
insurance as set forth above.
20.5 Security devices and services, if any, while intended to
deter crime may not in given instances prevent theft or other criminal acts and
it is agreed that Landlord shall not be liable for injuries or losses caused by
criminal acts of third parties and the risk that any security device or service
may malfunction or otherwise be circumvented by a criminal is assumed by Tenant.
Tenant shall at Tenant's cost obtain insurance coverages to the extent Tenant
desires protection against such criminal acts.
21. INSURANCE - WAIVER OF SUBROGATION.
21.1 Commencing prior to Tenant's first entry onto the Premises
for purposes of installing any improvements, fixtures or personal property, but
no later than the Term Commencement Date, and continuing at all times during the
term of this Lease, Tenant shall maintain, at Tenant's expense, commercial
general liability insurance, on an occurrence basis, insuring Tenant and
Tenant's agents, employees and independent contractors against all bodily
injury, property damage, personal injury and other covered loss arising out of
the use, occupancy, improvement and maintenance of the Premises and the business
operated by Tenant, or any other occupant, on the Premises. Such insurance shall
have a minimum combined single limit of liability per occurrence of not less
than $4,000,000.00 and a general aggregate limit of $4,000,000.00. Such
insurance shall: (i) name Landlord, and Landlord's lenders if required by such
lenders, and any management company retained to manage the Premises if requested
by Landlord, as additional insureds; (ii) include a broad form contractual
liability endorsement insuring Tenant's indemnity obligations under Section
20.1; (iii) include a products liability coverage endorsement (with limits of
$2,000,000.00 on a "claims made" basis), a boiler and machinery liability
endorsement, and a products completed operations coverage endorsement; (iv)
provide that it is primary coverage and noncontributing with any insurance
maintained by Landlord or Landlord's lenders, which shall be excess insurance
with respect only to losses arising out of Tenant's negligence; and (v) provide
for severability of interests or include a cross-liability endorsement, such
that an act or omission of an insured shall not reduce or avoid coverage of
other insureds.
21.2 At all times during the term of this Lease, Tenant shall
maintain, at Tenant's expense, "all risk" insurance, including, but not limited
to, coverage against loss or damage by fire, vandalism, and malicious mischief
covering the Building (exclusive of excavations, foundations and footings),
Tenant's Improvements (whether owned by Landlord or Tenant), and all other
improvements and fixtures that may be constructed or installed on the Premises,
in an amount equal to one hundred percent (100%) of the full replacement value
thereof. If any boilers or other pressure vessels or systems are installed on
the Premises, Tenant shall maintain, at Tenant's expense, boiler and machinery
insurance in an amount equal to one hundred percent (100%) of the full
replacement value thereof. At all times during the course of any major
demolition or construction permitted hereunder, or any restoration pursuant to
Articles 22 or 23, Tenant shall maintain, at Tenant's expense, "all risk"
builder's risk insurance, including, but not limited to, coverage against loss
of damage by fire, vandalism and malicious mischief, covering improvements in
place and all material and equipment at the job site furnished
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under contract, in an amount equal to one hundred percent (100%) of the full
replacement value thereof. The insurance described in this Section 21.2 shall:
(i) insure Landlord, and Landlord's lenders if required by such lenders, as
their interests may appear; (ii) contain a Lender's Loss Payable Form (Form 438
BFU or equivalent) in favor of Landlord's lenders and name Landlord, or
Landlord's lender if required by such lender, as the loss payee; (iii) provide
for severability of interests or include a cross-liability endorsement, such
that an act or omission of an insured shall not reduce or avoid coverage of
other insureds; (iv) include a building ordinance endorsement, an agreed amount
endorsement and an inflation endorsement; and (v) provide that it is primary
coverage and noncontributing with any insurance maintained by Landlord or
Landlord's lenders, which shall be excess insurance. The full replacement value
of the Building, Tenant's Improvements and other improvements and fixtures
insured thereunder shall, for the purpose of establishing insurance limits and
premiums only, be determined by the company issuing the insurance policy and
shall be redetermined by said company within six (6) months after completion of
any material alterations or improvements to the Premises and otherwise at
intervals of not more than three (3) years. Tenant shall promptly increase the
amount of the insurance carried pursuant to this Section 21.2 to the amount so
redetermined. The proceeds of the insurance described in this Section shall be
used for the repair, replacement and restoration of the Premises and Tenant's
Improvements and other improvements and fixtures insured thereunder, as further
provided in Article 22; provided, however, if this Lease is terminated after
damage or destruction, the insurance policy or policies, all rights thereunder
and all insurance proceeds shall be assigned to Landlord and Tenant in an
equitable manner taking into consideration the unamortized portion of each
party's contribution toward the cost of the Tenant's Improvements with respect
to which such proceeds have been paid.
21.3 At all times during the term of this Lease, Tenant shall
maintain, at Tenant's expense, business interruption insurance in order to
insure that the Basic Annual Rent and Operating Expenses provided for hereunder
will be paid for a period of up to one (1) year after any casualty insured
against by all risk policy of insurance described in Section 21.2 above or any
restriction of access to the Premises as a result of such casualty.
21.4 At all times during the term of this Lease, Tenant shall
maintain, at Tenant's expense, "all risk" insurance against all other personal
property, including trade fixtures, equipment and merchandise, of Tenant or any
subtenant of Tenant that may be occupying the Premises, or any portion thereof,
from time to time, in an amount equal to the full replacement value thereof.
21.5 At all times during the term of this Lease, Tenant shall
maintain workers' compensation insurance in accordance with California law, and
employers' liability insurance with limits typical for companies similar to
Tenant.
21.6 All of the policies of insurance referred to in this Article
21 shall be written by companies authorized to do business in California and
rated A+VII or better in Best's Insurance Guide. Each insurer referred to in
this Article 21 shall agree, by endorsement on the applicable policy or by
independent instrument furnished to Landlord, that it will give Landlord, and
Landlord's lenders if required by such lenders, at least ten (10) days' prior
written notice by registered mail before the applicable policy shall be
cancelled for non-payment of premium, and
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thirty (30) days' prior written notice by registered mail before the applicable
policy shall be cancelled or altered in coverage, scope, amount or other
material term for any other reason (although any failure of an insurer to give
notice as provided herein shall not be a breach of this Lease by Tenant). Tenant
shall pay all of the premiums for such insurance and all deductible amounts
provided for thereunder. No policy shall provide for a deductible amount in
excess of $100,000, unless approved in advance in writing by Landlord, which
approval shall not be unreasonably withheld. Tenant shall deliver to Landlord,
and to Landlord's lenders if required by such lenders, copies of the insurance
policies, certified by the insurer, or certificates evidencing such insurance
policies, issued by the insurer, together with evidence of payment of the
required premiums, prior to the required date for commencement of such coverage.
At least thirty (30) days prior to expiration of any such policy, Tenant shall
deliver to Landlord, and Landlord's lenders if required by such lenders, a
certificate evidencing renewal, or a certified copy of a new policy or
certificate evidencing the same, together with evidence of payment of the
required premiums. If Tenant fails to provide to Landlord any such policy or
certificate by the required date for commencement of coverage, or within fifteen
(15) days prior to expiration of any policy, or to pay the premiums therefor
when required, Landlord shall have the right, but not the obligation, to procure
said insurance and pay the premiums therefor. Any premiums paid by Landlord
shall be repaid by Tenant to Landlord with the next due installment of rent, and
failure to repay the same shall have the same consequences as failure to pay any
installment of Rent.
21.7 If the insurance required pursuant to this Article 21 is
materially less in amount or type of insurance than the insurance typically
carried by owners or tenants of comparable "biotech" properties located in the
UTC/Torrey Pines/Sorrento Valley area of San Diego, California, which are
similar to and operated for similar purposes as the Premises, Landlord may elect
to require Tenant to increase the amount of coverage. Landlord shall notify
Tenant in writing of the specific increase required, and Tenant shall have
thirty (30) days after receipt of Landlord's notice to effect the increase. Any
adjustment pursuant to this Section 21.7 may be made not more often than once
every five (5) years unless otherwise agreed by Landlord and Tenant. In no event
shall Tenant be required to carry earthquake or flood insurance.
21.8 Tenant may provide the property insurance required under
this Article 21 pursuant to a so-called blanket policy or policies of property
insurance maintained by Tenant; provided, however, that the amount and type of
coverage afforded to the Landlord shall not be reduced or adversely affected
from that which would exist under a separate policy or policies meeting all of
the requirements of this Lease by reason of the use of a blanket policy of
property insurance, and provided further that the requirements of this Article
21 are otherwise satisfied.
21.9 Landlord and Tenant each hereby waive any and all rights of
recovery against the other or against the officers, directors, partners,
employees, agents, and representatives of the other, on account of loss or
damage to such waiving party's property or the property of others under its
control, to the extent that such loss or damage is caused by or results from
risks insured against under any insurance policy which insures such waiving
party's property at the time of such loss or damage, which waiver shall continue
in effect as long as the parties' respective insurers permit such waiver under
the terms of their respective insurance policies or otherwise in writing. Any
termination of such waiver shall be by written notice as hereinafter
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set forth. Prior to obtaining policies of insurance required or permitted under
this Lease, Landlord and Tenant shall give notice to the insurers that the
foregoing mutual waiver is contained in this Lease, and each party shall use its
best efforts to cause such insurer to approve such waiver in writing and to
cause each insurance policy obtained by it to provide that the insurer waives
all right of recovery by way of subrogation against the other party. If such
written approval of such waiver of subrogation cannot be obtained from any
insurer or is obtainable only upon payment of an additional premium which the
party seeking to obtain the policy reasonably determines to be commercially
unreasonable, the party seeking to obtain such policy shall notify the other
thereof, and the latter shall have twenty (20) days thereafter to either: (i)
identify other insurance companies reasonably satisfactory to the other party
that will provide the written approval and waiver of subrogation; or (ii) agree
to pay such additional premium. If neither (i) nor (ii) are done, the mutual
waiver set forth above shall not be operative, and the party seeking to obtain
the policy shall be relieved of the obligation to obtain the insurer's written
approval and waiver of subrogation with respect to such policy during such time
as such policy is not obtainable or is obtainable only upon payment of a
commercially unreasonable additional premium as described above. If such
policies shall at any subsequent time be obtainable or obtainable upon payment
of a commercially reasonable additional premium, neither party shall be
subsequently liable for failure to obtain such insurance until a reasonable time
after notification thereof by the other party. If the release of either Landlord
or Tenant, as set forth in the first sentence of this Section 21.9, shall
contravene any law with respect to exculpatory agreements, the liability of the
party in question shall be deemed not released but shall be secondary to the
other's insurer.
22. DAMAGE OR DESTRUCTION
22.1 Tenant shall give written notice to Landlord immediately
upon any damages to or destruction of the Premises if the loss sustained exceeds
Ten Thousand Dollars ($10,000). In the event of damage to or destruction of all
or any portion of the Premises or the improvements and fixtures thereon
(collectively, "improvements") arising from a risk covered by the insurance
described in Section 21.2, Tenant shall within a reasonable time commence and
proceed diligently to repair, reconstruct and restore (collectively, "restore")
such improvements to substantially the same condition as they were in
immediately prior to the casualty, whether or not the insurance proceeds are
sufficient to cover the actual cost of restoration. Except as expressly set
forth below, this Lease shall continue in full force and effect, notwithstanding
such damage or destruction.
22.2 In the event of any damage to or destruction of all or any
portion of the improvements arising from a risk which is not covered by the
insurance described in Section 21.2, Tenant shall within a reasonable time
commence and proceed diligently to restore the improvements to substantially the
same condition as they were in immediately prior to the casualty, in which case
this Lease shall continue in full force and effect. In satisfying its
obligations under this Article 22, Tenant shall not be required to restore the
Premises with improvements identical to those which were damaged or destroyed;
rather, with the consent of Landlord, which consent will not be unreasonably
withheld, Tenant may restore the damage or destruction with improvements
reasonably equivalent or of reasonably equivalent value to those
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damaged or destroyed. Nothing in this subsection, however, shall be construed to
relieve Tenant of any other obligations under this Lease, including the
obligation to pay Rent.
22.3 In the event of damage, destruction and/or restoration as
herein provided, there shall be no abatement of Rent, and Tenant shall not be
entitled to any compensation or damages occasioned by any such damage,
destruction or restoration.
22.4 Notwithstanding anything to the contrary contained in this
Article, should Tenant be delayed or prevented form completing the restoration
of the improvements after the occurrence of such damage or destruction by reason
of acts of God, war, government restrictions, inability to procure the necessary
labor or materials, strikes, or other causes beyond the control of Tenant (but
excluding economic conditions or financial inability to perform), the time for
Tenant to commence or complete restoration shall be extended for the time
reasonably required as a result of such event.
22.5 If insured casualty occurs and the total amount of loss does
not exceed Ten Thousand Dollars ($10,000), Tenant shall make the loss adjustment
with the insurance company insuring the loss, and the proceeds shall be paid
directly to Tenant for the sole purpose of completing the restoration required
pursuant to this Article 22. If the total amount of loss exceeds Ten Thousand
Dollars ($10,000), Tenant shall make the loss adjustment with the insurance
company, which adjustment shall be subject to the approval of Landlord, which
approval shall not be unreasonably withheld, and the proceeds shall be
immediately deposited with an institutional lender or other entity ("Insurance
Trustee") designated by Tenant and approved by Landlord, which approval shall
not be unreasonably withheld, who shall agree to hold said proceeds in trust and
to disburse said proceeds in accordance with the provisions of this Section. If
the improvements are damaged or destroyed as a result of a risk not covered by
insurance as described in Section 22.2, Tenant shall deposit with the Insurance
Trustee its contribution towards the cost of restoration, or in lieu thereof
shall provide financial assurances satisfactory to Landlord of its ability and
willingness to pay such contribution when required. Restoration work shall not
be commenced until funds sufficient to cover the estimated cost of restoration
have been deposited with the Insurance Trustee. The Insurance Trustee shall
disburse amounts deposited with it to pay the cost of restoration, in
installments as construction progresses, upon presentation of certificates
executed by the architect or engineer retained by Tenant verifying the amount
due, on terms and conditions approved by Landlord and Landlord's lender prior to
commencement of work. A ten percent (10%) retainage shall be reserved from
payments due to the contractor, which retainage shall be paid upon completion of
restoration, payment of all costs, expiration of all applicable liens, and
delivery of evidence that the Premises are free from all mechanics' and
materialmen's liens and lienable claims. Landlord, and Landlord's lenders if
required by such lenders, shall have the right to approve requests for
reimbursement prior to payment, which approval shall not be unreasonably
withheld. Landlord shall have the right to engage an architect or engineer to
review and approve requests for disbursement, and reasonable expenses incurred
by such party shall be paid by the Insurance Trustee out of the funds deposited
with the Insurance Trustee. If, at any time during the course of restoration,
the funds held by the Insurance Trustee are not sufficient to pay the actual
costs of restoration, Tenant shall deposit the amount of the deficiency with the
Insurance Trustee within twenty (20) days after receipt of a written request
from the Insurance Trustee. After restoration has been
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completed and final payment has been made to Tenant's contractor, within fifteen
(15) days after demand by either party, the Insurance Trustee shall pay
undisbursed funds remaining thereafter to Tenant. All actual costs and charges
of the Insurance Trustee shall be paid by Tenant. Each party shall promptly
execute all documents and perform all acts reasonably required by the Insurance
Trustee to perform its obligations under this Section.
22.6 If restoration is required pursuant to this Article, Tenant,
at its expense, shall prepare final plans and specifications and working
drawings for the work in compliance with all applicable laws. The plans and
specifications and working drawings shall be subject to the approval of
Landlord, which approval shall not be unreasonably withheld, within thirty (30)
days after receipt and the approval of Landlord's lenders, which approval shall
not be unreasonably withheld, if required by such lenders. Tenant shall submit
the plans and specifications as soon as reasonably practicable, but in no event
later than one hundred twenty (120) days after the casualty. Tenant shall
commence the restoration within thirty (30) days after issuance of all necessary
permits and approvals and shall continue the work diligently to completion
thereafter. The provisions of Article 17 shall apply to any restoration work
under this Article as if the restoration was an alteration, addition or
improvement thereunder.
22.7 Tenant waives the provisions of Civil Code Section 1932(2)
and 1933(4) or any similar statute now existing or hereafter adopted governing
destruction of the Premises, so that the parties' rights and obligations in the
event of damage or destruction shall be governed by the provisions of this
Lease.
23. EMINENT DOMAIN
23.1 In the event the whole of the Premises shall be taken for
any public or quasi-public purpose by any lawful power or authority by exercise
of the right of appropriation, condemnation or eminent domain, or sold to
prevent such taking, Tenant or Landlord may terminate this Lease effective as of
the date possession is required to be surrendered to said authority.
23.2 In the event of a partial taking of the Premises for any
public or quasi-public purpose by any lawful power or authority by exercise of
right of appropriation, condemnation, or eminent domain, or sold to prevent such
taking, then Landlord may elect to terminate this Lease if such taking is of a
material nature such as to make it uneconomical to continue use of the
unappropriated portions for the purposes for which they were intended, and
Tenant may elect to terminate this Lease if such taking is of material detriment
to, and substantially interferes with, Tenant's use and occupancy of the
Premises, including but not limited to materially affecting Tenant's parking or
Tenant's ingress and egress from the Premises, unless Landlord provides
reasonable alternatives thereto. In no event shall this Lease be terminated when
such a partial taking does not have a material adverse effect upon Landlord or
Tenant or both. Termination by either party pursuant to this section shall be
effective as of the date possession is required to be surrendered to said
authority.
23.3 If upon any taking of the nature described in this Article
23 this Lease continues in effect, then Tenant shall promptly proceed to restore
the remaining portion of the
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Premises, and all improvements and fixtures located thereon, to substantially
their same condition prior to such partial taking; provided, however, Tenant's
obligation hereunder shall be limited to the amount of the condemnation
proceeds. Basic Annual Rent shall be abated proportionately on the basis of the
rental value of the Premises, including improvements and fixtures, as restored
after such taking compared to the rental value of the Premises prior to such
taking.
If the cost of restoration does not exceed Ten Thousand Dollars
($10,000), any award for the taking shall be paid directly to Tenant for the
sole purpose of completing the restoration required pursuant to this Article 23.
If the cost of restoration exceeds Ten Thousand Dollars ($10,000), the award
shall be immediately deposited with an institutional lender or other entity
("Condemnation Trustee") designated by Landlord and approved by Tenant, which
approval shall not be unreasonably withheld, who shall agree to hold said
proceeds in trust and to disburse said proceeds in accordance with the
provisions of this Section. The Condemnation Trustee shall disburse amounts
deposited with it to pay the cost of restoration, in installments as
construction progresses, upon presentation of certificates executed by the
architect or engineer retained by Tenant verifying the amount due, on terms and
conditions approved by Landlord and Landlord's lenders prior to commencement of
work. A ten percent (10%) retainage shall be reserved from payments due to the
contractor, which retainage shall be paid upon completion of restoration,
payment of all costs, expiration of all applicable liens, and delivery of
evidence that the Premises are free from all mechanics' and materialmen's liens
and lienable claims. Landlord, and Landlord's lenders if required by such
lenders, shall have the right to approve requests for reimbursement prior to
payment, which approval shall not be unreasonably withheld. Landlord shall have
the right to engage an architect or engineer to review and approve requests for
disbursement, and reasonable expenses incurred by such party shall be paid by
the Condemnation Trustee out of the funds deposited with the Condemnation
Trustee. All actual costs and charges of the Condemnation Trustee shall be paid
out of the funds deposited. Each party shall promptly execute all documents and
perform all acts reasonably required by the Condemnation Trustee to perform its
obligations under this Section.
If restoration is required pursuant to this Article, Tenant, using
proceeds of the award, shall prepare final plans and specifications and working
drawings for the work in compliance with all applicable laws. The plans and
specifications and working drawings shall be subject to the approval of Landlord
within thirty (30) days after receipt, which approval shall not be unreasonably
withheld. Tenant shall submit the plans and specifications as soon as reasonably
practicable, but in no event later than one hundred twenty (120) days after the
taking, unless due to delays beyond Tenant's control. Subject to unavoidable
delays, Tenant shall commence the restoration within thirty (30) days after
issuance of all necessary permits and approvals and shall continue the work
diligently to completion thereafter. The provisions of Article 17 shall apply to
any restoration work under this Article as if the restoration was an alteration,
addition or improvement under Article 17.
23.4 If upon any taking of the nature described in this Article
23 this Lease does not continue in effect, or in the event final payment has
been made to Tenant's contractor under the preceding Section 23.3 and the
Condemnation Trustee holds additional funds from the award, any award shall be
distributed to Landlord and Tenant pro rata according to their interests taken.
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24. DEFAULTS AND REMEDIES
24.1 Late payment by Tenant to Landlord of Rent and other sums
due will cause Landlord to incur costs not contemplated by this Lease, the exact
amount of which will be extremely difficult and impracticable to ascertain. Such
costs include, but are not limited to, processing and accounting charges and
late charges which may be imposed on Landlord by the terms of any mortgage or
trust deed covering the Premises. Therefore, if any installment of Rent due from
Tenant is not received by Landlord within ten (10) days of the date such payment
is due, Tenant shall pay to Landlord an additional sum of five percent (5%) of
the overdue rent as a late charge. The parties agree that this late charge
represents a fair and reasonable estimate of the costs that Landlord will incur
by reason of late payment by Tenant. In addition to the late charge, Rent not
paid within thirty (30) days of the date such payment is due shall bear interest
from thirty (30) days after the date due until paid at the lesser of (i) ten
percent (10%) per annum or (ii) the maximum rate permitted by law.
24.2 No payment by Tenant or receipt by Landlord of a lesser
amount than the rent payment herein stipulated shall be deemed to be other than
on account of the rent, nor shall any endorsement or statement on any check or
any letter accompanying any check or payment as rent be deemed an accord and
satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord's right to recover the balance of such rent or pursue any other remedy
provided. If at any time a dispute shall arise as to any amount or sum of money
to be paid by Tenant to Landlord, Tenant shall have the right to make payment
"under protest" and such payment shall not be regarded as a voluntary payment,
and there shall survive the right on the part of Tenant to institute suit for
recovery of the payment paid under protest.
24.3 If Tenant fails to pay any sum of money (other than Basic
Annual Rent) required to be paid by it hereunder, or shall fail to perform any
other act on its part to be performed hereunder, Landlord may, without waiving
or releasing Tenant from any obligations of Tenant, but shall not be obligated
to, make such payment or perform such act; provided, that such failure by Tenant
continued for ten (10) days after written notice from Landlord demanding
performance by Tenant was delivered to Tenant, or that such failure by Tenant
unreasonably interfered with the use or efficient operation of the Premises, or
resulted or could have resulted in a violation of law or the cancellation of an
insurance policy maintained by Landlord. All sums so paid or incurred by
Landlord, together with interest thereon, from the date such sums were paid or
incurred, at the annual rate equal to ten percent (10%) per annum or highest
rate permitted by law, whichever is less, shall be payable to Landlord on demand
as Additional Rent.
24.4 The occurrence of any one or more of the following events
shall constitute a default hereunder by Tenant:
(a) The failure by Tenant to make any payment of Rent, as and
when due, where such failure shall continue for a period of five (5) days after
written notice thereof from Landlord to Tenant. Such notice shall be in lieu of,
and not in addition to, any notice required under California Code of Civil
Procedure Section 1161;
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(b) The failure by Tenant to observe or perform any obligation
other than described in Section 24.4(a) to be performed by Tenant, where such
failure shall continue for a period of thirty (30) days after written notice
thereof from Landlord to Tenant; provided, however, that if the nature of
Tenant's default is such that more than thirty (30) days are reasonably required
to cure the default, then Tenant shall not be deemed to be in default if Tenant
shall commence such cure within said thirty (30) day period and thereafter
diligently prosecute the same to completion. Such notice shall be in lieu of,
and not in addition to, any notice required under California Code of Civil
Procedure Section 1161;
(c) Tenant makes an assignment for the benefit of creditors;
(d) A receiver, trustee or custodian is appointed to, or does,
take title, possession or control of all, or substantially all, of Tenant's
assets;
(e) An order for relief is entered against Tenant pursuant to a
voluntary or involuntary proceeding commenced under any chapter of the
Bankruptcy Code;
(f) Any involuntary petition is filed against the Tenant under
any chapter of the Bankruptcy Code and is not dismissed within ninety (90) days;
or
(g) Tenant's interest in this Lease is attached, executed upon,
or otherwise judicially seized and such action is not released within ninety
(90) days of the action.
Notices given under this Section shall specify the alleged
default and shall demand that Tenant perform the provisions of this Lease or pay
the Rent that is in arrears, as the case may be, within the applicable period of
time, or quit the Premises. No such notice shall be deemed a forfeiture or a
termination of this Lease unless Landlord elects otherwise in such notice, and
in no event shall a forfeiture or termination occur without such written notice.
24.5 In the event of a default by Tenant, and at any time
thereafter, and without limiting Landlord in the exercise of any right or remedy
which Landlord may have, Landlord shall be entitled to terminate Tenant's right
to possession of the Premises by any lawful means, in which case this Lease
shall terminate and Tenant shall immediately surrender possession of the
Premises to Landlord. In such event Landlord shall have the immediate right to
re-enter and remove all persons and property, and such property may be removed
and stored in a public warehouse or elsewhere at the cost of, and for the
account of Tenant, all without service of notice and without being deemed guilty
of trespass, or becoming liable for any loss or damage which may be occasioned
thereby. In the event that Landlord shall elect to so terminate this Lease, then
Landlord shall be entitled to recover from Tenant all damages incurred by
Landlord by reason of Tenant's default, including:
(a) The worth at the time of award of any unpaid Rent which had
been earned at the time of such termination; plus
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(b) The worth at the time of award of the amount by which the
unpaid Rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss which Tenant proves could have been
reasonably avoided; plus
(c) The worth at the time of award of the amount by which the
unpaid Rent for the balance of the term after the time of award exceeds the
amount of such rental loss which Tenant proves could have been reasonably
avoided; plus
(d) Any other amount necessary to compensate Landlord for all
the detriment proximately caused by Tenant's failure to perform its obligation
under this Lease or which in the ordinary course of things would be likely to
result therefrom, including, but not limited to, the cost of restoring the
Premises to the condition required under the terms of this Lease; plus
(e) At Landlord's election, such other amounts in addition to or
in lieu of the foregoing as may be permitted from time to time by applicable
law.
As used in Subsections (a), (b) and (c), the "time of award"
shall mean the date upon which the judgment in any action brought by Landlord
against Tenant by reason of such default is entered or such earlier date as the
court may determined. As used in Subsections (a) and (b), the "worth at the time
of award" shall be computed by allowing interest at the rate specified in
Section 24.1. As used in Subsection (c) above, the "worth at the time of award"
shall be computed by taking the present value of such amount using the discount
rate of the Federal Reserve Bank of San Francisco at the time of award plus one
percentage point.
24.6 In the event of a default by Tenant, and if Landlord does
not elect to terminate this Lease as provided in Section 24.5 or otherwise
terminate Tenant's right to possession of the Premises, Landlord shall have the
remedy described in Section 1951.4 of the Civil Code. Landlord may continue this
Lease in effect for so long as Landlord does not terminate Tenant's right to
possession of the Premises, and may enforce all of its rights and remedies under
the Lease, including the right from time to time to recover Rent as it becomes
due under the Lease. At any time thereafter, Landlord may elect to terminate
this Lease and to recover damages to which Landlord is entitled.
24.7 Notwithstanding anything herein to the contrary, Landlord's
reentry to perform acts of maintenance or preservation of, or in connection with
efforts to relet, the Premises, or any portion thereof, or the appointment of a
receiver upon Landlord's initiative to protect Landlord's interest under this
Lease, shall not terminate Tenant's right to possession of the Premises or any
portion thereof and, until Landlord does elect to terminate this Lease, this
Lease shall continue in full force and Landlord may pursue all its remedies
hereunder, including, without limitation, the right to recover from Tenant as
they become due hereunder all Rent and other charges required to be paid by
Tenant under the terms of this Lease.
24.8 All rights, options, and remedies of Landlord contained in
this Lease shall be construed and held to be nonexclusive and cumulative.
Landlord shall have the right to pursue any one or all of such remedies or any
other remedy or relief which may be provided by
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law, whether or not stated in this Lease. No waiver of any default of Tenant
hereunder shall be implied from any acceptance by Landlord of any rent or other
payments due hereunder or by any omission by Landlord to take any action on
account of such default if such default persists or is repeated, and no express
waiver shall affect defaults other than as specified in said waiver.
24.9 Termination of this Lease or Tenant's right to possession by
Landlord shall not relieve Tenant from any liability to Landlord which has
theretofore accrued or shall arise based upon events which occurred prior to the
last to occur of (i) the date of Lease termination or (ii) the date possession
of Premises is surrendered.
24.10 Landlord shall not be in default unless Landlord fails to
perform obligations required of Landlord within a reasonable time, but in no
event later than thirty (30) days after written notice by Tenant specifying
wherein Landlord has failed to perform such obligation; provided, however, that
if the nature of Landlord's obligation is such that more than thirty (30) days
are required for performance, then Landlord shall not be in default if Landlord
commences performance within such thirty (30) day period and thereafter
diligently prosecutes the same to completion.
24.11 In the event of any default on the part of Landlord, Tenant
will give notice by registered or certified mail to any beneficiary of a deed of
trust or mortgagee of a mortgage covering the Premises whose address shall have
been furnished and shall offer such beneficiary and/or mortgagee a reasonable
opportunity to cure the default, including time to obtain possession of the
Premises by power of sale or a judicial action if such should prove necessary to
effect a cure.
25. ASSIGNMENT OR SUBLETTING
25.1 Except as hereinafter provided, Tenant shall not, either
voluntarily or by operation of law, sell, hypothecate or transfer this Lease, or
sublet the Premises or any part thereof, or permit or suffer the Premises or any
part thereof to be used or occupied as work space, storage space, concession or
otherwise by anyone other than Tenant or Tenant's employees, without the prior
written consent of Landlord in each instance, which consent shall not be
unreasonably withheld or delayed.
25.2 If Tenant desires to assign this Lease to any entity into
which Tenant is merged, with which Tenant is consolidated, or which acquires all
or substantially all of the assets of Tenant, provided that the assignee first
executes, acknowledges and delivers to Landlord an agreement whereby the
assignee agrees to be bound by all of the covenants and agreements in this Lease
arising after the effective date of the transfer, then Landlord upon receipt of
proof of foregoing, will consent to the assignment.
25.3 In the event Tenant desires to assign, sublease, hypothecate
or otherwise transfer this Lease or sublet the Premises to an assignee other
than one set forth in Section 25.2, then at least ten (10) days, but not more
than forty-five (45) days, prior to the date when Tenant desires the assignment
or sublease to be effective (the "Assignment Date"), Tenant shall give Landlord
a notice (the "Assignment Notice") which shall set forth the name, address and
business
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of the proposed assignee or sublessee, information (including references and
financial statements) concerning the reputation and financial ability of the
proposed assignee or sublessee, the Assignment Date, any ownership or commercial
relationship between Tenant and the proposed assignee or sublessee, and the
consideration and all other material terms and conditions of the proposed
assignment or sublease, all in such detail as Landlord shall reasonably require.
25.4 Landlord in making its determination as to whether consent
should be given to a proposed assignment or sublease, may give consideration to
the reputation of a proposed successor, the financial strength of such successor
(notwithstanding the assignor remaining liable for Tenant's performance), and
any use which such successor proposes to make of the Premises. If Landlord fails
to deliver written notice of its determination to Tenant within thirty (30) days
following receipt of the Assignment Notice and the information required under
Section 25.3, Landlord shall be deemed to have approved the request. As a
condition to any assignment or sublease to which Landlord has given consent, any
such assignee or sublessee must execute, acknowledge and deliver to Landlord an
agreement whereby the assignee or sublessee agrees to be bound by all of the
covenants and agreements in this Lease.
25.5 Any sale, assignment, hypothecation or transfer of this
Lease or subletting of Premises that is not in compliance with the provisions of
this Article 25 shall be void and shall, at the option of Landlord, terminate
this Lease.
25.6 The consent by Landlord to an assignment or subletting shall
not relieve Tenant or any assignee of this Lease or sublessee of the Premises
from obtaining the consent of Landlord to any further assignment or subletting
or as releasing Tenant or any assignee or sublessee of Tenant from full and
primary liability.
25.7 If Tenant shall sublet the Premises or any part thereof
Tenant hereby immediately and irrevocably assigns to Landlord, as security for
Tenant's obligations under this Lease, all rent from any subletting of all or a
part of the Premises, and Landlord as assignee of Tenant, or a receiver for
Tenant appointed on Landlord's application, may collect such rent and apply it
toward Tenant's obligations under this Lease; except that, until the occurrence
of an act of default by Tenant, Tenant shall have the right to collect such
rent.
25.8 Notwithstanding any subletting or assignment Tenant shall
remain fully and primarily liable for the payment of all Rent and other sums
due, or to become due hereunder, and for the full performance of all other
terms, conditions, and covenants to be kept and performed by Tenant. The
acceptance of rent or any other sum due hereunder, or the acceptance of
performance of any other term, covenant, or condition hereof, from any other
person or entity shall not be deemed to be a waiver of any of the provisions of
this Lease or a consent to any subletting or assignment of the Premises.
Landlord shall not withhold consent to an assignment back to the original Tenant
hereunder from a subsequent assignee.
25.9 Any sublease of the Premises shall be subject and
subordinate to the provisions of this Lease, shall not extend beyond the term of
this Lease, and shall provide that the sublessee shall attorn to Landlord, at
Landlord's sole option, in the event of the termination of this Lease. Landlord
and any lender shall upon Tenant's request provide any subtenant of the
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entirety of the Premises with a recognition and nondisturbance agreement in the
form set forth in Article 35 hereof on the condition that the sublessee agrees
to attorn to Landlord on exactly the same terms and conditions as this Lease.
26. ATTORNEY'S FEES
26.1 If either party becomes a party to any action or proceeding
concerning this Lease or the Premises, or any part thereof, by reason of any act
or omission of the other party or its authorized representatives, and not by any
act or omission of the party that becomes a party to that litigation or any act
or omission of its authorized representatives, the party that causes the other
party to become involved in the litigation shall be liable to that party for
reasonable attorneys' fees, expert witness fees, and court costs incurred by it
in the litigation.
26.2 If either party commences an action or proceeding against
the other party arising out of or in connection with this Lease, the prevailing
party shall be entitled to have and recover from the other party reasonable
attorneys' fees, expert witness fees and costs of suit.
27. BANKRUPTCY
27.1 In the event a debtor or trustee under the Bankruptcy Code,
or other person with similar rights, duties and powers under any other law,
proposes to cure any default under this Lease or to assume or assign this Lease,
and is obliged to provide adequate assurance to Landlord that (i) a default will
be cured, (ii) Landlord will be compensated for its damages arising from any
breach of this Lease, or (iii) future performance under this Lease will occur,
then adequate assurance shall include any or all of the following, as determined
by the Bankruptcy Court:
(a) Those acts specified in the Bankruptcy Code or other law as
included within the meaning of adequate assurance;
(b) A cash payment to compensate Landlord for any monetary
defaults or damages arising from a breach of this Lease;
(c) The credit worthiness and desirability, as a tenant, of the
person assuming this Lease or receiving an assignment of this Lease, at least
equal to Landlord's customary and usual credit worthiness requirements and
desirability standards in effect at the time of the assumption or assignment, as
determined by the Bankruptcy Court; and
(d) The assumption or assignment of all of Tenant's interest and
obligations under this Lease.
. 28. DEFINITION OF LANDLORD
28.1 The term "Landlord" as used in this Lease, so far as
covenants or obligations on the part of Landlord are concerned, shall be limited
to mean and include only Landlord or the successor-in-interest of Landlord under
this Lease at the time in question. In the
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event of any transfer, assignment or conveyance of Landlord's title or
leasehold, the Landlord herein named (and in case of any subsequent transfers or
conveyances, the then grantor and any prior grantors) shall be automatically
freed and relieved from and after the date of such transfer, assignment or
conveyance of all liability for the performance of any covenants or obligations
contained in this Lease thereafter to be performed by Landlord and, without
further agreement, the transferee of such title or leasehold shall be deemed to
have assumed and agreed to observe and perform any and all obligations of
Landlord hereunder, during its ownership of the Premises. Landlord may transfer
its interest in the Premises or this Lease without the consent of Tenant and
such transfer or subsequent transfer shall not be deemed a violation on the part
of Landlord or the then grantor of any of the terms or conditions of this Lease.
28.2 Notwithstanding the foregoing, the term "Landlord" shall
include the Landlord herein named (Science Park Center LLC, even if its interest
is assigned to a successor) with regard to (i) responsibility for construction
of the Project Work pursuant to Sections 4.1 hereof, (ii) the warranties made by
Landlord under Section 14.4 to the extent thereof, (iii) responsibility for
covenants and representations made by Landlord in Section 39.8 hereof, (iv) the
obligation to deliver the Premises lien-free pursuant to Section 35.4, and (v)
the completion of punch-list items pursuant to Section 6.3 of the Work Letter.
29. ESTOPPEL CERTIFICATE
29.1 Each party shall, within fifteen (15) days of written notice
from the other party, execute, acknowledge and deliver to the other party a
statement in writing on a form reasonably requested by a proposed lender,
purchaser, assignee or subtenant (i) certifying that this Lease is unmodified
and in full force and effect (or, if modified, stating the nature of such
modification and certifying that this Lease as so modified is in full force and
effect) and the dates to which the rental and other charges are paid in advance,
if any, (ii) acknowledging that there are not, to each party's knowledge, any
uncured defaults on the part of Landlord or Tenant hereunder (or specifying such
defaults if any are claimed) and (iii) setting forth such further information
with respect to this Lease or the Premises as may be reasonably requested
thereon. Any such statement may be relied upon by any prospective lender,
purchaser, assignee or subtenant of all or any portion of the Premises.
30. REMOVAL OF PROPERTY
30.1 Except as provided below, all fixtures and personal property
owned by Tenant shall be and remain the property of Tenant, and may be removed
by Tenant at the expiration or earlier termination of the term of this Lease.
30.2 The Building and Improvements, and all fixtures and personal
property owned by Landlord, shall be and remain the property of Landlord, and
shall, upon the expiration or earlier termination of this Lease, remain upon and
be surrendered with the Premises as a part thereof. Except as provided below,
all other improvements, additions, alterations, and decorations attached to or
built into the Premises, including (without limiting the generality of the
foregoing) all wallcoverings, built-in cabinet work and paneling, shall, unless
Landlord elects otherwise,
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become the property of Landlord upon the expiration or earlier termination of
this Lease, and shall remain upon and be surrendered with the Premises as a part
thereof.
30.3 Notwithstanding Sections 30.1 and 30.2 hereof, Tenant may
not remove any property if such removal would cause material damage to the
Premises, unless such damages can be and is repaired by Tenant. Furthermore,
Tenant shall repair any damage to the Premises caused by Tenant's removal of any
such property, and shall, prior to the expiration or earlier termination of this
Lease, restore and return the Premises to the condition they were in when first
occupied by Tenant, reasonable wear and tear excepted. At a minimum, even if
they are determined to be fixtures or personal property owned by Tenant, Tenant
shall leave in place and repair any damage to the interior floors, walls and
ceilings of the Premises. The provisions of Article 17 shall apply to any
restoration work under this Article as if the restoration was an alteration,
addition or improvement thereunder. Should Tenant require any period beyond the
expiration or earlier termination of the Lease to complete such restoration,
Tenant shall be a tenant at sufferance subject to the provisions of Section 12.2
hereof.
30.4 If Tenant shall fail to remove any fixtures or personal
property which it is entitled to remove under this Article 30 from the Premises
prior to termination of this Lease, then Landlord may dispose of the property
under the provisions of Section 1980 et seq. of the California Civil Code, as
such provisions may be modified from time to time, or under any other applicable
provisions of California law.
31. LIMITATION OF LANDLORD'S LIABILITY
31.1 If Landlord is in default of this Lease, and as a
consequence, Tenant recovers a money judgment against Landlord, the judgment
shall be satisfied only out of the proceeds of sale received on execution of the
judgment and levy against the right, title, and interest of Landlord in the
Premises, and out of rent or other income from the Premises receivable by
Landlord or out of the consideration received by Landlord from the sale or other
disposition of all or any part of Landlord's right, title, and interest in the
Premises.
31.2 Neither Landlord nor Landlord's Agents shall be personally
liable for any deficiency except to the extent liability is based upon willful
and intentional misconduct. If Landlord is a partnership or joint venture, the
partners of such partnership shall not be personally liable and no partner of
Landlord shall be sued or named as a party in any suit or action, or service of
process be made against any partner of Landlord, except as may be necessary to
secure jurisdiction of the partnership or joint venture or to the extent
liability is caused by willful and intentional misconduct. If Landlord is a
corporation, the shareholders, directors, officers, employees, and/or agents of
such corporation shall not be personally liable and no shareholder, director,
officer, employee, or agent of Landlord shall be sued or named as a party in any
suit or action, or service of process be made against any shareholder, director,
officer, employee, or agent of Landlord, except as may be necessary to secure
jurisdiction of the corporation. If Landlord is a limited liability company, the
members, managers, officers, employees, and/or agents of such limited liability
company shall not be personally liable and no member, manager, officer,
employee, or agent of Landlord shall be sued or named as a party in any suit or
action, or service of process be made against any member, manager, officer,
employee, or agent of
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Landlord, except as may be necessary to secure jurisdiction of the corporation.
No partner, shareholder, director, member, manager, employee, or agent of
Landlord shall be required to answer or otherwise plead to any service of
process and no judgment will be taken or writ of execution levied against any
partner, shareholder, director, member, manager, employee, or agent of Landlord.
31.3 Each of the covenants and agreements of this Article 31
shall be applicable to any covenant or agreement either expressly contained in
this Lease or imposed by statute or by common law.
31.4 Notwithstanding the foregoing, the Landlord herein named
(Science Park Center LLC) shall remain liable for (i) responsibility for
construction of the Project Work pursuant to Sections 4.1 hereof, (ii) the
warranties made by Landlord under Section 14.4 to the extent thereof, (iii)
responsibility for covenants and representations made by Landlord in Section
39.8 hereof, (iv) the obligation to deliver the Premises lien-free pursuant to
Section 35.4, and (v) the completion of punch-list items pursuant to Section 6.3
of the Work Letter.
32. CONTROL BY LANDLORD
32.1 Landlord reserves full control over the Premises to the
extent not inconsistent with Tenant's quiet enjoyment and use of Premises. This
reservation includes rights granted pursuant to the Project Documents and the
right to maintain or establish ownership of the Building or portions thereof
separate from fee title to the land upon which it rests.
32.2 Tenant shall, should Landlord so request, promptly join with
Landlord in execution of such documents as may be appropriate to assist Landlord
to implement any such action provided Tenant need not execute any document which
is of a nature wherein liability is created in Tenant or if by reason of the
terms of such document Tenant will be deprived of the quiet enjoyment and use of
the Premises as granted by this Lease.
33. QUIET ENJOYMENT
33.1 So long as Tenant is not in default, Landlord covenants that
Landlord or anyone acting through or under Landlord will not disturb Tenant's
occupancy of the Premises except as permitted by the provisions of this Lease.
34. QUITCLAIM DEED
34.1 Tenant shall execute and deliver to Landlord on the
expiration or termination of this Lease, immediately on Landlord's request, a
quitclaim deed to the Premises or other document in recordable form suitable to
evidence of record termination of this Lease and the right of first refusal and
option contained herein.
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35. SUBORDINATION AND ATTORNMENT
35.1 Unless the mortgagee or beneficiary elects otherwise at any
time prior to or following a default by Tenant, this Lease shall be subject to
and subordinate to the lien of any mortgage or deed of trust now or hereafter in
force against the Premises or any portion thereof, and to all advances made or
hereafter to be made upon the security thereof without the necessity of the
execution and delivery of any further instruments on the part of Tenant to
effectuate such subordination, provided that the lienholder, beneficiary, or
mortgagee has previously executed and delivered to Tenant a non-disturbance,
attornment, and subordination agreement in such form as the lienholder,
beneficiary, or mortgagee may reasonably request and is approved by Tenant,
which approval will not be unreasonably withheld, setting forth that so long as
Tenant is not in default hereunder, Landlord's and Tenant's rights and
obligations hereunder shall remain in force and Tenant's right to possession
shall be upheld.
35.2 Notwithstanding the foregoing, Tenant shall execute and
deliver upon demand such further instrument or instruments evidencing such
subordination of this Lease to the lien of any such mortgage or deed of trust as
may be required by Landlord and in a form reasonably satisfactory to Tenant,
provided that the lienholder, beneficiary, or mortgagee has previously executed
and delivered to Tenant a non-disturbance agreement in recordable form. However,
if any such mortgagee or beneficiary so elects at any time prior to or following
a default by Tenant, this Lease shall be deemed prior in lien to any such
mortgage or deed of trust regardless of date and Tenant will execute a statement
in writing to such effect at Landlord's request in a form reasonably
satisfactory to Tenant.
35.3 In the event any proceedings are brought for foreclosure, or
in the event of the exercise of the power of sale under any mortgage or deed of
trust made by the Landlord covering the Premises, the Tenant shall at the
election of the purchaser at such foreclosure or sale attorn to the purchaser
upon any such foreclosure or sale and recognize such purchaser as the Landlord
under this Lease in accordance with the terms of the non-disturbance Agreement.
35.4 Landlord represents that there are no encumbrances on the
Premises, nor will there be any encumbrances on the Premises, with interests
which will be superior to Tenant's leasehold, on the date a memorandum of the
Lease is duly recorded in the Official Records of San Diego County, other than
those interests disclosed in the preliminary report described in the Project
Documents or amendments thereto delivered to Tenant prior to the execution of
this Lease. Tenant may, at Tenant's sole expense, concurrently with the
recording of the memorandum of Lease, and as a condition to the effectiveness of
the Lease, order and obtain a title insurance policy from an title insurance
company of Tenant's choice, ensuring Tenant's leasehold estate in the Premises
subject only to the exceptions set forth above and such other exceptions as
cannot ripen into a fee interest or do not materially interfere with Tenant's
quiet enjoyment of the Premises and to such deeds of trust, mortgages, ground
leases or other liens or encumbrances whose beneficiaries have executed and
delivered to Tenant recordable non-disturbance agreements.
Notwithstanding the foregoing, Landlord shall use commercially
reasonable efforts to insure that the Premises are free of material and
mechanics' liens at
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Substantial Completion of the Premises, or as soon as is reasonably practical
thereafter. At the request of Tenant, Landlord shall provide such documentation
as may be reasonably requested by a title company for the purpose of allowing
the leasehold policy to be issued without listing any such liens as exceptions,
so long as Landlord incurs no expense therefor. In any event, however, Landlord
shall insure such a policy without exceptions for such liens may be issued no
later than six (6) months from Substantial Completion.
36. SURRENDER
36.1 No surrender of possession of any part of the Premises shall
release Tenant from any of its obligations hereunder unless accepted by
Landlord.
36.2 The voluntary or other surrender of this Lease by Tenant
shall not work a merger, unless Landlord consents, and shall, at the option of
Landlord, operate as an assignment to it of any or all subleases or
subtenancies.
37. WAIVER AND MODIFICATION
37.1 No provision of this Lease may be modified, amended or added
to except by an agreement in writing. The waiver by Landlord of any breach of
any term, covenant or condition herein contained shall not be deemed to be a
waiver of any subsequent breach of the same or any other term, covenant or
condition herein contained.
38. WAIVER OF JURY TRIAL AND COUNTERCLAIMS
38.1 The parties hereto shall and they hereby do waive trial by
jury in any action, proceeding or counterclaim brought by either of the parties
hereto against the other on any matters whatsoever arising out of or in any way
connected with this Lease, the relationship of Landlord and Tenant, Tenant's use
or occupancy of the Premises, and/or any claim of injury or damage. In the event
Landlord commences any proceedings for nonpayment of rent, or any other sums or
amounts due hereunder, Tenant will not interpose any counterclaim of whatever
nature or description in any such proceedings, except for mandatory
counterclaims; provided, however, that nothing contained herein shall be deemed
or construed as a waiver of the Tenant's right to assert such claims in any
separate action or actions brought by Tenant.
39. HAZARDOUS MATERIAL
39.1 During the term, Tenant, at its sole cost, shall comply with
all federal, state and local laws, statutes, ordinances, codes, regulations and
orders relating to the receiving, handling, use, storage, accumulation,
transportation, generation, spillage, migration, discharge, release and disposal
of Hazardous Material (as hereinafter defined in Section 39.12 hereof) in or
about the Premises. Tenant shall not cause or permit any Hazardous Material to
be brought upon, kept or used in or about the Premises by Tenant, its agents,
employees, contractors, invitees or subtenants, in a manner or for a purpose
prohibited by any federal, state or local agency or authority. The accumulation
of Hazardous Material shall be in approved containers and removed from the
Premises by duly licensed carriers.
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39.2 Tenant shall immediately provide Landlord with telephonic
notice, which shall promptly be confirmed by written notice, of any and all
spillage, discharge, release and disposal of Hazardous Material onto or within
the Premises, including the soils and subsurface waters thereof, which by law
must be reported to any federal, state or local agency, and any injuries or
damages resulting directly or indirectly therefrom. Further, Tenant shall
deliver to Landlord each and every notice or order, when said order or notice
identifies a violation which may have the potential to adversely impact the
Premises, received from any federal, state or local agency concerning Hazardous
Material and the possession, use and/or accumulation thereof promptly upon
receipt of each such notice or order by Tenant. Landlord shall have the right,
upon reasonable notice, to inspect and copy each and every notice or order
received from any federal, state or local agency concerning Hazardous Material
and the possession, use and/or accumulation thereof.
39.3 Tenant shall be responsible for and shall indemnify,
protect, defend and hold harmless Landlord and Landlord's Agents from any and
all liability, damages, injuries, causes of action, claims, judgments, costs,
penalties, fines, losses, and expenses which arise during or after the term of
this Lease and which result from Tenant's (or from Tenant's Agents, assignees,
subtenants, employees, agents, contractors, licensees, or invitees) receiving,
handling, use, storage, accumulation, transportation, generation, spillage,
migration, discharge, release or disposal of Hazardous Material in, upon or
about the Premises, including without limitation (i) diminution in value of the
Premises, (ii) damages for the loss or restriction on use of any portion or
amenity of the Premises, (iii) damages arising from any adverse impact on
marketing of space in the Building, (iv) damages and the costs of remedial work
to other property in the vicinity of the Premises owned by Landlord or an
affiliate of Landlord, and (v) consultant fees, expert fees, and attorneys'
fees. Landlord shall be responsible for and shall indemnify, protect, defend and
hold harmless Tenant on the same basis as above for any claims which result from
Landlord's or from Landlord's Agents receiving, handling, use, storage,
accumulation, transportation, generation, spillage, migration, discharge,
release or disposal of Hazardous Material in, upon or about the Premises.
39.4 The indemnification of Landlord and Landlord's Agents by
Tenant pursuant to the preceding Section 39.3 includes, without limiting the
generality of Section 39.3, reasonable 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
political subdivision because of Hazardous Material present in the soil,
subsoil, ground water, or elsewhere on, under or about the Premises, or on,
under or about any other property in the vicinity of the Premises owned by
Landlord or an affiliate of Landlord. 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, or underlying soil or groundwater,
Tenant shall promptly take all actions at its sole expense as are necessary to
return the Premises to that condition required by applicable law, provided that
Landlord's approval of such action shall first be obtained, which approval shall
not be unreasonably withheld, except that Tenant shall not be required to obtain
Landlord's prior approval of any action of an emergency nature reasonably
required or any action mandated by a governmental authority, but Tenant shall
give Landlord prompt notice thereof.
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39.5 Landlord acknowledges that it is not the intent of this
Article 39 to prohibit Tenant from operating its business as described in
Article 10 or to unreasonably interfere with the operation of Tenant's business.
Tenant may operate its business according to the custom of the industry so long
as the use or presence of Hazardous Material is strictly and properly monitored
according to all applicable governmental requirements. As a material inducement
to Landlord to allow Tenant to use Hazardous Material in connection with its
business, Tenant agrees to make available to Landlord upon reasonable request a
list identifying each type of Hazardous Material to be present in or upon the
Premises and setting forth any and all governmental approvals or permits
required in connection with the presence of Hazardous Material on the Premises
("Hazardous Material Summary") and a copy of the Hazardous Material business
plan prepared pursuant to Health and Safety Code Section 25500 et seq. At
Landlord's request, and at reasonable times, Tenant shall make available to
Landlord the latest available Hazardous Materials Summary and true and correct
copies of the following documents (hereinafter referred to as the "Hazardous
Material Documents") relating to the handling, storage, disposal and emission of
Hazardous Material: permits; approvals; reports and correspondence; storage and
management plans; notice of violations of any laws; plans relating to the
installation of any storage tanks to be installed in or under the Premises
(provided said installation of tanks shall be permitted only after Landlord has
given Tenant its written consent to do so, which consent may not be unreasonably
withheld); and all closure plans or any other documents required by any and all
federal, state and local governmental agencies and authorities for any storage
tanks installed in, on or about the Premises for the closure of any such tanks.
Tenant shall not be required, however, to provide Landlord with that portion of
any document which contains information of a proprietary nature and which, in
and of itself, does not contain a reference to any Hazardous Material which are
not otherwise identified to Landlord in such documentation, unless any such
Hazardous Material Document names Landlord as an "owner" or "operator" of the
facility in which Tenant is conducting its business. It is not the intent of
this subsection to provide Landlord with information which could be detrimental
to Tenant's business should such information become possessed by Tenant's
competitors. Landlord shall treat all information furnished by Tenant to
Landlord pursuant to this Section 39.5 as confidential and shall not disclose
such information to any person or entity without Tenant's prior written consent,
which consent shall not be unreasonably withheld or delayed, except as required
by law.
39.6 Notwithstanding other provisions of this Article 39, it
shall be a default under this Lease, and Landlord shall have the right to
terminate the Lease and/or pursue its other remedies under Article 24, in the
event that (i) Tenant's use of the Premises for the generation, storage, use,
treatment or disposal of Hazardous Material is in a manner or for a purpose
prohibited by applicable law unless Tenant is diligently pursuing compliance
with such law, (ii) Tenant has been required by any governmental authority to
take remedial action in connection with Hazardous Material contaminating the
Premises if the contamination resulted from Tenant's action or use of the
Premises, unless Tenant is diligently pursuing compliance with such requirement,
or (iii) Tenant is subject to an enforcement order issued by any governmental
authority in connection with Tenant's use, disposal or storage of a Hazardous
Material on the Premises, unless Tenant is diligently seeking compliance with
such enforcement order.
39.7 Notwithstanding the provisions of Article 25, if (i) any
anticipated use of the Premises by a proposed assignee or subtenant involves the
generation or storage, use,
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treatment or disposal of Hazardous Material in any manner or for a purpose
prohibited by any applicable law, (ii) the proposed assignee or sublessee has
been required by any governmental authority to take remedial action in
connection with Hazardous Material contaminating a property if the contamination
resulted from such party's action or use of the property in question and has
failed to take such action, or (iii) the proposed assignee or sublessee is
subject to a final, unappealable enforcement order issued by any governmental
authority in connection with such party's use, disposal or storage of Hazardous
Material of a type such proposed assignee or sublessee intends to use in the
Premises and shall have failed to comply with such order, it shall not be
unreasonable for Landlord to withhold its consent to an assignment or subletting
to such proposed assignee or sublessee.
39.8 Landlord represents that, to the best of its knowledge, as
of the date of this Lease, there is no Hazardous Material on the Premises,
except as disclosed in the site assessment reports described in Section 10.2 as
items (o), (p) and (r) of the Project Documents, and except as set forth in
Section 10.3. Landlord shall provide Tenant with a further update of the Phase I
Environmental Site Assessment, and any update of the Phase II Environmental Site
Assessment recommended therein, as of the Term Commencement Date. Should an
update disclose the presence of Hazardous Material which was not disclosed in
the site assessments already received by Tenant, Landlord shall remedy the
problems to Tenant's reasonable satisfaction, and shall cause a further update
of the Phase I Environmental Site Assessment to be issued in substantial
conformity with the site assessments previously provided to Tenant. The Phase I
and Phase II Environmental Site Assessments and all updates thereto are
hereinafter referred to as the "Base Line Report," and shall be deemed
conclusive as to the condition of the Premises, unless, within ninety (90) days
of receipt, Tenant causes an inspection of its own to be conducted, which
inspection discloses the presence of Hazardous Material materially different
from that disclosed in the Base Line Report.
39.9 At any time prior to the expiration or earlier termination
of the term of the Lease, Landlord shall have the right to enter upon the
Premises at all reasonable times and at reasonable intervals in order to conduct
appropriate tests regarding the presence, use and storage of Hazardous Material,
and to inspect Tenant's records with regard thereto. Tenant will pay the
reasonable costs of any such test which demonstrates that contamination in
excess of permissible levels has occurred and such contamination was caused by
Tenant's use of the Premises during the term of the Lease. Tenant shall correct
any deficiencies identified in any such tests in accordance with its obligations
under this Article 39 to the extent the result of Tenant's use of the Premises
during the term of this Lease.
39.10 Tenant shall at its own expense cause an environmental site
assessment of the Premises to be conducted and a report thereof delivered to
Landlord upon the expiration or earlier termination of the Lease, such report to
be as complete and broad in scope as the Base Line Report as is necessary to
identify any impact on the Premises Tenant's operations might have had
(hereinafter referred to as the "Exit Report"). Tenant shall correct any
deficiencies identified in such report in accordance with its obligations under
this Article 39 prior to the expiration or earlier termination of this Lease.
This Article 39 is the exclusive provision in this Lease regarding clean-up,
repairs or maintenance arising from receiving, handling, use, storage,
accumulation, transportation, generation, spillage, migration, discharge,
release or disposal of
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Hazardous Material in, upon or about the Premises, and the provisions of
Articles 7, 10, 18, and 20 shall not apply thereto.
39.11 Tenant's obligations under this Article 39 shall survive
the termination of the Lease.
39.12 As used herein, the term "Hazardous Material" means any
hazardous or toxic substance, material or waste which is or becomes regulated by
any local governmental authority, the State of California or the United States
Government. The term "Hazardous Material" includes, without limitation, any
material or substance which is (i) defined as a "hazardous waste," "extremely
hazardous waste" or "restricted hazardous waste" under Sections 25515, 25117 or
25122.7, or listed pursuant to Section 25140, of the California Health and
Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law), (ii)
defined as a "hazardous substance" under Section 25316 of the California Health
and Safety Code, Division 2, Chapter 6.8 (Carpenter-Presly-Tanner Hazardous
Substance Account Act), (iii) defined as a "hazardous material," hazardous
substance" or "hazardous waste" under Section 25501 of the California Health and
Safety Code, Division 20, Chapter 6.95 (Hazardous Substances), (v) petroleum,
(vi) asbestos, (vii) listed under Article 9 and defined as hazardous or
extremely hazardous pursuant to Article 11 of Title 22 of the California
Administrative Code, Division 4, Chapter 20, (viii) designated as a "hazardous
substance" pursuant to Section 311 of the Federal Water Pollution Control Act
(33 U.S.C. Section 1317), (ix) defined as a "hazardous waste" pursuant to
Section 1004 of the Federal Resource Conservation and Recovery Act, 42 U.S.C.
Section 6901, et. seq. (42 U.S.C. Section 6903), or (x) defined as a "hazardous
substance" pursuant to Section 101 of the Comprehensive Environmental Response
Compensation and Liability Act, 42 U.S.C. Section 9601 et. seq. (42 U.S.C.
Section 9601).
40. OPTION TO EXTEND.
40.1 Landlord grants to Tenant the right to extend the term of
this Lease for *** period under the same terms and conditions existing in the
original Lease. Tenant shall exercise such right to extend the term of this
Lease by written notice to Landlord no later than twelve (12) months prior to
the end of the original term of this Lease.
40.2 Tenant shall not have the right to exercise the option to
extend the term, notwithstanding anything set forth above to the contrary: (a)
During the time commencing from the date Landlord gives to Tenant a written
notice that Tenant is in default under any provision of this Lease and
continuing until the default alleged in said notice is cured; (b) During the
period of time commencing on the day after a monetary obligation to Landlord is
due from Tenant and unpaid without any necessity for notice thereof to Tenant
and continuing until the obligation is paid; or (c) After the expiration or
earlier termination of this Lease. The period of time within which the option to
extend may be exercised shall not be extended or enlarged by reason of the
Tenant's inability to exercise the option because of the foregoing provisions.
At the election of Landlord, all rights of Tenant under the provisions of this
Article 40 shall terminate and be of no further force or effect even after
Tenant's due and timely exercise of an option to extend if, after such exercise,
but prior to the commencement of the extension term, (1) Tenant fails to pay to
Landlord a monetary obligation of Tenant for a period of sixty (60) days after
such obligation
* confidential treatment
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becomes due (without necessity of Landlord to give notice to Tenant), or (2)
Tenant fails to commence to cure a non-monetary default within thirty (30) days
after the date Landlord gives notice to Tenant of such default.
41. RIGHT OF FIRST REFUSAL TO PURCHASE PREMISES. Tenant shall have the
right of first refusal to purchase the Premises ("Right of First Refusal") upon
the following terms and conditions:
41.1 If at any time during the initial or any extended term of
this Lease Landlord determines to sell the Premises, Landlord shall give written
notice to Tenant ("Right of First Refusal Notice") of the economic terms and
conditions on which Landlord would be willing to sell the Premises. If Tenant,
within fifteen (15) days after receipt of Landlord's Right of First Refusal
Notice, agrees in writing to purchase the Premises on the terms and conditions
stated in the notice, Landlord shall sell and convey the Premises to Tenant on
the economic terms and conditions stated in the notice.
41.2 If Tenant does not agree in writing to purchase the Premises
within fifteen (15) days after receipt of Landlord's Right of First Refusal
Notice, or if Landlord and Tenant have not entered into a purchase and sale
agreement within thirty (30) days thereafter, Landlord shall have the right to
sell and convey the Premises to a third party on economic terms and conditions
no more favorable than the economic terms and conditions stated in the Right of
First Refusal Notice, except that the purchase price may be two and one half
percent (2.5%) less than that stated in the Right of First Refusal Notice, and,
upon any such sale, the Right of First Refusal shall terminate. If Landlord does
not sell and convey the Premises within one hundred eighty (180) days after the
Right of First Refusal Notice, any sale transaction thereafter shall be deemed a
new determination by Landlord to sell and convey the Premises and the provisions
of this Section shall again be applicable.
41.3 If Tenant purchases the Premises pursuant to the Right of
First Refusal, this Lease shall terminate on the date title vests in Tenant, and
Landlord shall remit to Tenant all prepaid and unearned Rent. Notwithstanding
the foregoing, if Tenant, at its option, should determine to take title to the
Premises in the name of an affiliate of Tenant, this Lease shall not terminate
on the date title vests in any such affiliate of Tenant unless Tenant and such
affiliate agree otherwise.
41.4 The Right of First Refusal herein granted to Tenant is not
assignable separate and apart from this Lease.
41.5 Tenant shall not have the right to exercise the Right of
First Refusal, notwithstanding anything set forth above to the contrary: (a)
During the time commencing from the date Landlord gives to Tenant a written
notice that Tenant is in default under any provision of this Lease and
continuing until the default alleged in said notice is cured; (b) During the
period of time commencing on the day after a monetary obligation to Landlord is
due from Tenant and unpaid without any necessity for notice thereof to Tenant
and continuing until the obligation is paid; or (c) After the expiration or
earlier termination of this Lease. The period of time within which the Right of
First Refusal may be exercised shall not be extended or enlarged by reason
- 40 -
44
of the Tenant's inability to exercise the Right of First Refusal because of the
foregoing provisions. At the election of Landlord, all rights of Tenant under
the provisions of this Article 40 shall terminate and be of no further force or
effect even after Tenant's due and timely exercise of the Right of First
Refusal, if, after such exercise, but prior to the transfer of title, (1) Tenant
fails to pay to Landlord a monetary obligation of Tenant for a period of thirty
(30) days after such obligation becomes due (without necessity of Landlord to
give notice to Tenant), or (2) Tenant fails to commence to cure a default within
thirty (30) days after the date Landlord gives notice to Tenant of such default.
. 42. MISCELLANEOUS
42.1 TERMS AND HEADINGS. Where applicable in this Lease, the
singular includes the plural and the masculine or neuter includes the masculine,
feminine and neuter. The section headings of this Lease are not a part of this
Lease and shall have no effect upon the construction or interpretation of any
part hereof.
42.2 EXAMINATION OF LEASE. Submission of this instrument for
examination or signature by Tenant does not constitute a reservation of or
option for lease, and it is not effective as a lease or otherwise until
execution by and delivery to both Landlord and Tenant.
42.3 TIME. Time is of the essence with respect to the
performance of every provision of this Lease in which time of performance is a
factor.
42.4 COVENANTS AND CONDITIONS. Each provision of this Lease
performable by Tenant shall be deemed both a covenant and a condition.
42.5 CONSENTS. Whenever consent or approval of either party is
required, that party shall not unreasonably withhold or delay such consent or
approval, except as may be expressly set forth to the contrary.
42.6 ENTIRE AGREEMENT. The terms of this Lease are intended by
the parties as a final expression of their agreement with respect to the terms
as are included herein, and may not be contradicted by evidence of any prior or
contemporaneous agreement.
42.7 SEVERABILITY. Any provision of this Lease which shall prove
to be invalid, void, or illegal in no way affects, impairs or invalidates any
other provision hereof, and such other provisions shall remain in full force and
effect.
42.8 RECORDING. Within ten (10) days from the execution of this
Lease, Landlord and Tenant shall record a short form memorandum hereof, which
includes references to the right of first refusal contained herein, subject to
the requirement to execute and deliver a quitclaim deed pursuant to the
provisions of Section 34.1 hereof.
42.9 IMPARTIAL CONSTRUCTION. The language in all parts of this
Lease shall be in all cases construed as a whole according to its fair meaning
and not strictly for or against either Landlord or Tenant.
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45
42.10 INUREMENT. Each of the covenants, conditions, and
agreements herein contained shall inure to the benefit of and shall apply to and
be binding upon the parties hereto and their respective heirs, legatees,
devisees, executors, administrators, successors, assigns, sublessees, or any
person who may come into possession of said Premises or any part thereof in any
manner whatsoever. Nothing in this Section 42.10 contained shall in any way
alter the provisions against assignment or subletting in this Lease provided.
42.11 FORCE MAJEURE. If either party cannot perform any of its
obligations (other than Tenant's obligation to pay Rent), or is delayed in such
performance (other than Tenant's obligation to pay Rent), due to events beyond
such party's control, the time provided for performing such obligations shall be
extended by a period of time equal to the delay attributable to such events.
Events beyond a party's control include, but are not limited to, acts of God
(including earthquake), war, civil commotion, labor disputes, strikes, fire,
flood or other casualty, shortage of labor or material, government regulation or
restriction and weather conditions, but do not include financial inability to
perform.
42.12 NOTICES. Any notice, consent, demand, bill, statement, or
other communication required or permitted to be given hereunder must be in
writing and may be given by personal delivery, by facsimile transmission, or by
mail, and if given by personal delivery or facsimile transmission shall be
deemed given on the date of delivery or transmission, and if given by mail shall
be deemed sufficiently given three (3) days after time when deposited in United
States Mail if sent by registered or certified mail, addressed to Tenant at the
Premises, or to Tenant or Landlord at the addresses shown in Section 2.1.6
hereof. Either party may, by notice to the other given pursuant to this Section,
specify additional or different addresses for notice purposes.
42.13 AUTHORITY TO EXECUTE LEASE. Landlord and Tenant each
acknowledge that it has all necessary right, title and authority to enter into
and perform its obligations under this Lease, that this Lease is a binding
obligation of such party and has been authorized by all requisite action under
the party's governing instruments, that the individuals executing this Lease on
behalf of such party are duly authorized and designated to do so, and that no
other signatories are required to bind such party.
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IN WITNESS WHEREOF, the parties hereto have executed this Lease as of
the date first above written.
LANDLORD:
SCIENCE PARK CENTER LLC
A California limited liability company
By Nexus Properties, Inc.
A California corporation
Manager
By: /s/ MICHAEL J. REIDY
------------------------------
Michael J. Reidy
Chief Executive Officer
By Neurocrine Biosciences, Inc.
A Delaware corporation
Manager
By: /s/ PAUL W. HAWRAN
------------------------------
Paul W. Hawran
Senior Vice President
TENANT:
NEUROCRINE BIOSCIENCES, INC.
A Delaware corporation
By: /s/ PAUL W. HAWRAN
------------------------------
Paul W. Hawran
Senior Vice President
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47
EXHIBIT "A"
WORK LETTER
48
ATTACHMENT A-3 TO EXHIBIT "A"
PROJECT PROFORMA
49
NEUROCRINE
*** SF R&D FACILITY
PRELIMINARY COST PRO FORMA
***
***
* confidential treatment
50
EXHIBIT "B"
FORM OF ACKNOWLEDGEMENT OF TERM COMMENCEMENT DATE
51
ACKNOWLEDGEMENT OF TERM COMMENCEMENT DATE
Pursuant to Section 4.3 of that certain Lease dated July 31, 1997, by and
between SCIENCE PARK CENTER LLC, a California limited liability company,
Landlord, and NEUROCRINE BIOSCIENCES, INC., a Delaware corporation, Tenant, for
the Premises described in the Lease located at Lot 30 of Torrey Pines Science
Center Unit No. 2, in the City of San Diego, County of San Diego, State of
California, according to Map thereof No. 12845, filed in the Office of the
County Recorder of San Diego County on July 23, 1991, we hereby acknowledge that
the Term Commencement Date of the Lease, as defined therein, is
___________________, 1998, and the Term Expiration Date of the Lease, as defined
therein, is _____________, 20____.
IN WITNESS WHEREOF, the parties hereto have executed this Acknowledgement
of Term Commencement Date as of ______________, 1998.
LANDLORD:
SCIENCE PARK CENTER LLC
A California Limited Liability Company
By Nexus Properties, Inc.
A California Corporation
Its Manger
By:
----------------------------------
Authorized Officer
TENANT:
NEUROCRINE BIOSCIENCES, INC.
A Delaware corporation
By:
----------------------------------
Authorized Officer
52
WORK LETTER
TABLE OF CONTENTS
PAGE
ARTICLE 1 - DEFINITIONS...........................................................1
-----------------------
1.1 Building..........................................................................1
1.2 City..............................................................................1
1.3 Construction Panel................................................................1
1.4 Cost Estimate.....................................................................1
1.5 Force-Majeure Delay...............................................................2
1.6 Improvements......................................................................3
1.7 Landlord-Caused Delay.............................................................3
1.8 Landlord's Representative.........................................................3
1.9 Project...........................................................................3
1.10 Project Architect.................................................................3
1.11 Project Contractor................................................................3
1.12 Project Package...................................................................3
1.13 Project Plans.....................................................................3
1.14 Project Schedule..................................................................3
1.15 Project Work......................................................................4
1.16 Substantially Complete............................................................4
1.17 Tenant's Construction Representatives.............................................4
1.18 Tenant's Equipment................................................................4
1.19 Tenant-Caused Delay...............................................................4
ARTICLE 2 - GENERAL REQUIREMENTS..................................................4
--------------------------------
2.1 Project Schedule..................................................................4
2.2 Consents and Approvals............................................................4
2.3 Approvals of Contracts............................................................5
2.4 Time of the Essence...............................................................5
ARTICLE 3 - PROJECT PLANS.........................................................5
-------------------------
3.1 Familiarization with Documents by Architects......................................5
3.2 Preparation and Approval of Project Plans.........................................5
3.3 Building Permit for Project Work..................................................5
ARTICLE 4 - COST ESTIMATE FOR PROJECT WORK........................................5
------------------------------------------
4.1 Estimate of the Project Work Costs................................................5
4.2 Tenant Approval of Cost Estimate..................................................6
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4.3 Tenant Approval of Payments.......................................................6
4.4 Adjustments to Cost Proforma......................................................7
ARTICLE 5 - CONSTRUCTION..........................................................7
------------------------
5.1 Construction of the Project Work..................................................7
5.2 Installation of Tenant's Equipment................................................7
5.3 Tenant's Construction Representative..............................................7
5.4 Construction Period Insurance.....................................................7
5.5 Contractor and Subcontractor Insurance............................................8
5.6 As-Built Drawings.................................................................9
5.7 Reliance on Construction Warranties...............................................9
ARTICLE 6 - COMPLETION AND RENT COMMENCEMENT......................................9
--------------------------------------------
6.1 Completion of the Work and Commencement Date......................................9
6.2 Delivery of the Premises..........................................................9
6.3 Walk-Through.....................................................................10
6.4 Notice of Completion.............................................................10
6.5 Warranties and Guarantees........................................................10
ARTICLE 7 - CONSTRUCTION DISPUTE RESOLUTION......................................10
-------------------------------------------
7.1 Dispute Resolution...............................................................10
7.2 Notice...........................................................................11
7.3 Resolution by Construction Panel.................................................11
7.4 Resolution by Arbitrator.........................................................11
7.5 Interpretation and Resolution....................................................11
7.6 Continued Performance............................................................11
7.7 Binding Resolution...............................................................11
ATTACHMENT A-1 TO EXHIBIT "A" - DESCRIPTION OF PROJECT PACKAGE
ATTACHMENT A-2 TO EXHIBIT "A" - PROJECT SCHEDULE
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54
WORK LETTER
This Work Letter ("Work Letter") dated July 31, 1997, is made by and
between SCIENCE PARK CENTER LLC, a California limited liability company
("Landlord"), and NEUROCRINE BIOSCIENCES, INC., a Delaware corporation
("Tenant"), and is attached to and made a part of the Lease of the same date by
and between such parties ("Lease").
ARTICLE 1
DEFINITIONS
Capitalized terms not otherwise defined in the Lease shall have the
meaning set forth below. Except as defined in this Work Letter to the contrary,
all terms utilized in this Work Letter shall have the same meaning ascribed to
them in the Lease. When consents or approvals are to be provided by or on behalf
of either party, the term "Landlord" or "Tenant", as the case may be, shall
include Landlord's Representative and Tenant's Representative, as the case may
be. The provisions of the Lease, except where clearly inconsistent or
inapplicable to this Work Letter, are incorporated into this Work Letter.
1.1 "BUILDING." That certain building consisting of two levels over a
subterranean area, including all core, shell and tenant improvements, as
described in the Project Plans.
1.2 "CITY." The City of San Diego, and any other governmental agencies
and entities involved in the permit and approval process for the Project Plans.
1.3 "CONSTRUCTION PANEL." A panel consisting of one of Landlord's
Representatives, one of Tenant's Representatives, the Project Architect, and the
Project Contractor.
1.4 "COST ESTIMATE." An estimate of the cost of materials and
construction for completing the Project Work, including without limitation the
following (if and to the extent approved by Tenant pursuant to Section 4.2):
(a) "Direct Cost of Construction", which includes the costs of
labor and material provided by subcontractors to the Project Contractor,
including design-build and design-assist engineering subcontractors;
(b) "General Work", which includes direct costs for the
project manager, field superintendent, on-site administrative support, general
labor (including trash removal) provided by the Project Contractor,
miscellaneous materials/tools provided by the Project Contractor, on site office
supplies, blue prints, safety equipment, and security (or otherwise as required
in the Project Contractor's general conditions if approved by Tenant pursuant to
Section 4.2 hereof);
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55
(c) "Permits", which includes the building permits and related
fees for the Project Work, including but not limited to plan check and building
permit fees, water, sewer and other utility connection or service fees
(including fees for excess capacity), health department fees, hazardous material
permit fees, and any other similar fees;
(d) "Temporary Facilities", which includes on-site trailer,
temporary electrical, water and sewer, rental furniture, telephone, trash
receptacles, toilet rental, equipment and tool rentals, and medical supplies;
(e) "On-Site Supervision", which includes an allocable portion
of the salary of any on-site supervisor of the Project Contractor and the cost
of any on-site construction facilities, including, but not limited to, office
supplies, postage, maintenance, telephone, and utilities, but excluding any such
items included among "General Work", "Temporary Facilities", and "Overhead";
(f) "Overhead", which includes general administrative overhead
of the Project Contractor associated with the Project Work, including salaries
and benefits for receptionist, secretarial, accounting, estimating, department
head supervision, licenses, legal, insurance, office supplies, postage, computer
supplies and maintenance, telephone, rent, utilities, off-site office furniture
rental, office equipment maintenance and equipment property tax, and all other
main office administrative, accounting and other overhead costs (or otherwise
described in the Project Contractor's general conditions);
(g) "Bonds", which includes the expense of any bond which may
be required of the Project Contractor by the City, Landlord, Tenant, or the
construction lender;
(h) "Insurance", which includes premiums for the insurance
described in Sections 5.4 and 5.5 hereof;
(i) "Contractor's Fee", which includes a fixed amount equal
to a percentage of the Direct Cost of Construction; and
(j) "Contingency", which includes an amount equal to a
percentage of the Direct Costs of Construction to be reserved for costs for
adjustments to the actual costs of subcontractor's work associated with the
scope of work as described by the Project Plans as bid and not for Changes for
revised scope of work.
1.5 "FORCE-MAJEURE DELAY." Any delay which is attributable to any: (1)
Actual delay or failure to perform attributable to any strike, lockout or other
labor or industrial disturbance (whether or not on the part of the employees of
either party hereto or their contractors or other representatives), civil
disturbance, future order of any governmental entity claiming jurisdiction, act
of a public enemy, war, riot, sabotage, blockade, embargo, inability to secure
customary materials, supplies or labor through ordinary sources by reason of
regulation
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56
or order of any government or regulatory body; (2) delay attributable to the
failure to secure permits and approvals within the time periods set forth in the
Project Schedule due to action or inaction of the City; (3) delay in completing
plans and specifications because of changes in any laws (including, without
limitation, the Americans with Disabilities Act of 1990, Pub. L. 101-336 (the
"ADA")) or building requirements, or the interpretation thereof; (4) delay
attributable to lightning, earthquake, fire, rain, storm, hurricane, tornado,
flood, washout, explosion, or any other cause beyond the reasonable control of
the party from whom performance is required, or any of its contractors or other
representatives; or (5) failure of the Project Architect or the Project
Contractor, or their respective contractors, agents or employees, to act within
the time limits set forth in the Project Schedule and this Work Letter.
1.6 "IMPROVEMENTS." Surface parking areas, landscaping, drainage,
irrigation, gutters, sidewalks, lighting, walkways, driveways and other
improvements and appurtenances relating to ingress and egress.
1.7 "LANDLORD-CAUSED DELAY." Any delay, unless attributable to a
condition or event described as a Force-Majeure Delay, caused by the failure of
Landlord or its agents or employees to act within the time limits set forth in
the Project Schedule and this Work Letter.
1.8 "LANDLORD'S REPRESENTATIVE." R. Darrell Gary or
Michael J. Reidy.
1.9 "PROJECT." The Land, Building and Improvements.
1.10 "PROJECT ARCHITECT." Delawie Wilkes Rodrigues Barker & Bretton
Associates AIA, the architect selected by Tenant and retained by Landlord for
the design of the Building and Improvements, and civil engineers, structural
engineers, landscaping architects and other consultants retained by the Project
Architect.
1.11 "PROJECT CONTRACTOR." R.G. Petty Construction, the contractor
selected by Landlord and Tenant and retained by Landlord for the construction of
the Building and Improvements.
1.12 "PROJECT PACKAGE." Information and criteria regarding the design of
the Project, consisting of the documents described on Attachment "A-1" attached
hereto as they may be reasonably supplemented from time to time by Landlord,
Tenant or the Project Architect, so long as such supplements are approved by
Tenant.
1.13 "PROJECT PLANS." Final calculations, designs, drawings and
specifications prepared by the Project Architect and its engineers and other
consultants for the Building and Improvements.
1.14 "PROJECT SCHEDULE." The time and responsibility schedule for
development, design and construction of the Building and Improvements, including
time periods
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57
for preparation and review of construction documents, obtaining necessary
approvals, construction of the Project Work, and other performances required by
this Work Letter, whether by Landlord or by Tenant, as such schedule may be
adjusted from time to time by mutual written agreement of Landlord and Tenant or
as otherwise set forth in this Work Letter. The initial Project Schedule is
attached hereto as Attachment "A-2".
1.15 "PROJECT WORK." The construction, purchase and/or installation of
the Building and Improvements.
1.16 "SUBSTANTIALLY COMPLETE." "SUBSTANTIALLY COMPLETED," and
"SUBSTANTIAL COMPLETION" shall have the meaning ascribed to them in Section 4.4
of the Lease.
1.17 "TENANT'S CONSTRUCTION REPRESENTATIVES." Eric Spoor (Neurocrine
Biosciences, Inc.) and J.R. (Ron) Sutliff (The Staubach Company).
1.18 "TENANT'S EQUIPMENT." Equipment and other personal property
required by Tenant in the operation of its business, other than such personal
property installed as a part of the Project Work, including equipment and other
installations necessary for obtaining a "right to occupy" from the City.
1.19 "TENANT-CAUSED DELAY." Any delay, unless attributable to a
condition or event described as a Force-Majeure Delay, (i) caused by the failure
of Tenant or its agents or employees to act within the time limits set forth in
the Project Schedule and this Work Letter; (ii) in receiving or installing
equipment ordered to Tenant's specifications or in receiving permits,
permissions or approvals for the storage or use of Hazardous Material which are
the responsibility of Tenant to obtain; (iii) resulting from Tenant's request
for materials, finishes or installations which are unavailable or nonstandard;
(iv) resulting from Tenant's inability or failure to procure an approved
Hazardous Material summary and business plan; (v) resulting from the untimely
delivery or installation of any of Tenant's Equipment; and (vi) caused by
physical interference with or damage to the Project Work by Tenant or its agents
or employees.
ARTICLE 2
GENERAL REQUIREMENTS
2.1 PROJECT SCHEDULE. Landlord and Tenant agree to develop, design and
construct the Building and Improvements in accordance with this Work Letter and
the time and responsibility criteria set forth in the Project Schedule.
2.2 CONSENTS AND APPROVALS. Any consents or approvals required or
allowed by this Work Letter shall not be unreasonably withheld or delayed.
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2.3 APPROVALS OF CONTRACTS. Both Landlord and Tenant shall have the
right to review and approve the contracts with the Project Architect and the
Project Contractor.
2.4 TIME OF THE ESSENCE. Landlord and Tenant agree that time and strict
punctual performance are of the essence with respect to this Work Letter and the
Project Schedule.
ARTICLE 3
PROJECT PLANS
3.1 FAMILIARIZATION WITH DOCUMENTS BY ARCHITECTS. The Project Architect,
prior to preparation of the Project Plans, and each engineer, consultant and
other professional retained by the Project Architect, shall thoroughly
familiarize themselves with this Work Letter, the Project Package, all
applicable building codes, and all other applicable city, county, state and
federal ordinances, rules and regulations, including, without limitation, the
energy conservation and handicap access requirements of Title 24 of the
California Administrative Code and the Americans With Disabilities Act, and
shall prepare the Project Plans with full knowledge and compliance therewith.
The Project Architect, and each engineer retained by the Project Architect,
shall be fully qualified and licensed by the State of California to prepare the
plans they are responsible for.
3.2 PREPARATION AND APPROVAL OF PROJECT PLANS. On or before the date
specified in the Project Schedule, the Project Architect shall prepare the
Project Plans, subject to the approval of Landlord and Tenant.
3.3 BUILDING PERMIT FOR PROJECT WORK. On or before the date set forth in
the Project Schedule, the Project Architect shall obtain a building permit (and
any approvals and permits required from the local health department and any
other governmental agencies) required for the construction of the Project Work
from the City. If the City rejects the Project Plans and thereby prevents the
issuance of a building permit, the Project Architect shall immediately make all
necessary changes required by the City and approved by Tenant. Upon the City's
approval of the Project Plans and permit application, the building permit shall
be delivered to the Project Contractor with an approved set of Project Plans
marked "for construction". The Project Plans shall not be modified in any way
without the consent of Tenant.
ARTICLE 4
COST ESTIMATE FOR PROJECT WORK
4.1 ESTIMATE OF THE PROJECT WORK COSTS.
4.1.1. On or before the date the Project Plans are submitted
to the City for plan check, and within the period of time set forth in the
Project Schedule, Landlord and Tenant shall submit to the Project Contractor a
list of at least three acceptable subcontractors from each major trade from whom
Landlord and Tenant desire to receive bids for the Project Work; provided,
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59
however, Landlord and Tenant may select design-build and design-assist
subcontractors on a negotiated basis.
4.1.2. The Project Contractor shall put Project Plans out to
bid to the subcontractors selected by Landlord and Tenant within the time period
set forth in the Project Schedule, and shall promptly provide the bids in a form
pre-approved by Landlord and Tenant to Landlord and Tenant when received.
Landlord and Tenant shall select one subcontractor bid from each trade and
deliver a list of selected subcontractors and their respective bids to the
Project Contractor within the time period specified in the Project Schedule.
4.2 TENANT APPROVAL OF COST ESTIMATE.
4.2.1. The Project Contractor shall prepare the Cost Estimate,
and shall submit to Tenant, within the time period set forth in the Project
Schedule, the Cost Estimate prepared by the Project Contractor for Tenant's
approval.
4.2.2. Tenant shall, within five (5) business days after
receipt of the Cost Estimate, either approve the Cost Estimate, or disapprove
the Cost Estimate with specific instructions to the Project Architect and the
Project Contractor to reduce the scope of the Project Work.
4.2.3. If Tenant disapproves the Cost Estimate with
instructions to reduce the scope of the Project Work, the Project Architect
shall revise the Project Plans accordingly, if required, and the Project
Contractor shall cause the Project Plans, as revised, to be re-bid in accordance
with Section 4.1, and shall prepare a revised Cost Estimate and deliver it to
Tenant for approval or disapproval in accordance with this Section 4.2. Any
subsequent reduction in the scope of the Project Work and re-bid shall be
subject to the same procedures as set forth in this Article 4.
4.2.4. Within ten (10) days after Tenant approves the original
Cost Estimate or any Revised Cost Estimate, Landlord shall enter into a
construction contract with the Project Contractor for construction of the
Project Work, and Landlord shall provide Tenant with a copy thereof. Landlord
and Tenant and their designated representatives shall have the right, at all
reasonable times, to audit the Project Contractor's financial and accounting
records in connection with the construction of the Project Work.
4.3 TENANT APPROVAL OF PAYMENTS. Tenant shall have the right to
approve all payments made to Landlord or any third party in connection with the
construction of the Project Work. Landlord and Tenant acknowledge that Tenant
has agreed to pay to Nexus Properties, Inc. a fee for development services
pursuant to the terms of Landlord's operating agreement. Without limiting the
generality of the first sentence of this paragraph, Tenant shall have the right
to approve all other payments to Nexus Properties, Inc. or any of its affiliates
in connection with the Project Work.
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4.4 ADJUSTMENTS TO COST PROFORMA. A preliminary cost proforma for the
construction of the Project Work is attached hereto as Attachment A-3. Upon
Tenant's approval of the Cost Estimate, Landlord and Tenant shall revise the
proforma to reflect any changes based upon the Cost Estimate. Landlord and
Tenant acknowledge that Basic Annual Rent payable under the Lease may be
adjusted pursuant to Section 6.1 of the Lease based upon the total cost for the
acquisition, development and construction of the Project Work ("Project Cost").
Landlord and Tenant agree that any such adjustment shall be based upon the final
Project Cost for the Project Work as determined by Landlord and Tenant.
ARTICLE 5
CONSTRUCTION
5.1 CONSTRUCTION OF THE PROJECT WORK. As soon as practical after
receipt of the building permit for the Project Work, the Project Contractor
shall construct the Project Work within the time period set forth in the Project
Schedule and in accordance with the Project Plans.
5.2 INSTALLATION OF TENANT'S EQUIPMENT. Tenant agrees to install
Tenant's Equipment within the time period set forth in the Project Schedule.
Tenant's Equipment shall be installed in compliance with all governmental
ordinances, rules and regulations relating thereto and shall not be constructed
in a manner inconsistent with the approved Project Plans.
5.3 TENANT'S CONSTRUCTION REPRESENTATIVES. At least one of Tenant's
Construction Representatives shall participate in all meetings with the Project
Contractor and subcontractors involved in the construction of the Project Work.
Any questions arising during construction shall be directed to one of Tenant's
Construction Representatives.
5.4 CONSTRUCTION PERIOD INSURANCE. From the commencement until
the completion of the Project Work, Landlord shall obtain and maintain, or shall
cause to be obtained and maintained,
(i) comprehensive general liability insurance, on an
occurrence basis in amounts sufficient to protect Tenant and Landlord from and
against liability for death or injury to persons and for damage to property
caused by or arising from the performance of the Project Work. All such
insurance shall name Tenant and Tenant's Representative as an additional
insureds; and
(ii) "all risk" builder's risk insurance covering the Project
Work, including, but not limited to, coverage against loss of damage by fire,
vandalism and malicious mischief, covering improvements in place and all
material and equipment at the job site furnished under contract, in an amount
equal to one hundred percent (100%) of the full replacement value thereof.
All of the policies of insurance referred to in this section
shall be written by companies authorized to do business in California and rated
A VII or better in Best's Insurance
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Guide. Each insurer referred to in this article shall agree, by endorsement on
the applicable policy or by independent instrument furnished to Landlord, that
it will give Landlord, and Landlord's lenders if required by such lenders, and
Tenant, at least thirty (30) days' prior written notice by registered mail
before the applicable policy shall be cancelled or altered in coverage, scope,
amount or other material term, except in the case of non-payment of premium, in
which event the policy may be cancelled on ten (10) days' prior written notice.
Landlord's responsibility to provide insurance under this Section
5.4 shall be satisfied to the extent such insurance is provided by contractors
under the following Section 5.5 hereof.
5.5 CONTRACTOR AND SUBCONTRACTOR INSURANCE. The Project Contractor and
all other contractors and subcontractors shall carry worker's compensation
insurance covering all of their respective employees as more particularly
specified below; and shall also carry public liability insurance, including
property damage, with limits and in the same form and with the same companies as
required to be carried by Tenant under the Lease except as stated otherwise
below; and the policies therefor shall insure Landlord and Tenant as their
interests may appear, as well as the contractor or subcontractor. Such policies
shall name Landlord, Tenant, Landlord's Representative, Tenant's Representative,
and, if requested by Landlord, Landlord's mortgagees or beneficiaries, as
additional loss payees and shall be for the mutual and joint benefit and
protection of Landlord, Tenant, and Landlord's mortgagees or beneficiaries, as
their interests may appear. The Project Contractor's and all other contractor's
and subcontractor's required minimum coverages and limits of liability are as
follows:
(a) Worker's compensation, including employer's liability
insurance, with limits of not less than Two Million Dollars ($2,000,000.00),
with the policy in full compliance with all current laws governing workers'
compensation insurance in California.
(b) Comprehensive general liability insurance (including
contractor's protective liability) in an amount not less than Two Million
Dollars ($2,000,000.00) combined single limit (CSL) bodily injury and property
damage. Such insurance shall provide for explosion, collapse, underground
hazards (X.C.U.) coverage and broad form contractual liability coverage and
shall insure the general contractor and/or subcontractors against any and all
claims for personal injury, including death resulting therefrom, and damage to
the property of others and arising from its operations under the contract and
whether such operations are performed by the general contractor, subcontractor
or any of their subcontractors, or by anyone directly or indirectly employed by
any of them. Fire liability shall be maintained in the amount of the costs of
construction or an appropriate amount deemed reasonable by the Landlord.
(c) Comprehensive automobile liability insurance, including
the ownership, maintenance and operation of any automotive equipment owned,
hired and non-owned in the following minimum amounts: Bodily Injury and Property
Damage, each occurrence, Combined Single Limit of One Million Dollars
($1,000,000.00).
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5.6 AS-BUILT DRAWINGS. The Project Architect and the Project
Contractor shall maintain a set of "as-built" drawings of the Premises, which
shall be available for inspection by Landlord and Tenant at the construction
office during normal business hours. Copies of the completed set of "as-built"
drawings shall be provided to Landlord and Tenant at the completion of the
Project Work.
5.7 RELIANCE ON CONSTRUCTION WARRANTIES. Landlord and Tenant
acknowledge that, under Article 14 and other provisions of the Lease and this
Work Letter, each may have the non-exclusive benefit of any applicable
warranties from design professionals, contractors, materialmen, manufacturers,
or other responsible parties. Landlord and Tenant each assumes responsibility to
inquire into and be fully informed regarding provisions of any applicable
warranties, and the other party shall bear no responsibility therefor.
ARTICLE 6
COMPLETION AND RENT COMMENCEMENT
6.1 COMPLETION OF THE WORK AND COMMENCEMENT DATE.
6.1.1. Landlord shall use commercially reasonable efforts to
Substantially Complete the Project Work within the time periods indicated in the
Project Schedule and on or before the estimated Term Commencement Date set forth
in Section 2.1.4(a) of the Lease as such time is extended one day for each day
of delay resulting from a Force-Majeure Delay or Tenant-Caused Delay.
6.1.2. The estimated Term Commencement Date and Tenant's
obligation to pay Basic Annual Rent and Additional Rent under the Lease shall be
extended one day for each day of delay in Substantial Completion of the Project
Work which results from any cause other than a Tenant-Caused Delay.
Tenant-Caused Delays shall not extend the estimated Term Commencement Date, but
shall extend Landlord's obligation to Substantially Complete the Project Work by
the estimated Term Commencement Date.
6.2 DELIVERY OF THE PREMISES. Landlord shall deliver the Premises to
Tenant upon Substantial Completion of the Project Work in clean and operating
condition, subject to typical punch-list items. The term "clean and operating
condition" shall include the following: (a) tile floors are wet mopped, waxed
and buffed, and carpets are vacuumed; (b) walls and partitions are cleaned and
major holes are filled and touched up; (c) glass is cleaned on both sides; (d)
trash, dirt and left-over materials are removed from the Premises and the
Building entrance area; (e) air-conditioning, heating and ventilating system is
in operating condition and approximately regulated; and (f) plumbing, electrical
and elevator systems are in operating condition. Punch-list items may include
such minor pick-up work as would not materially interfere with Tenant's
occupancy and use of the Premises for the purpose for which they are to be used;
provided, however, as to those portions of the Premises designed to be used as
scientific research laboratories, in no event shall punch-list items include
work which would unreasonably interfere
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with Tenant's use of such laboratories for the purpose for which they are
intended. Any dispute between Landlord and Tenant regarding whether a punch-list
item unreasonably interferes with Tenant's use of the laboratory areas of the
Premises for the purpose for which they are intended shall be resolved in
accordance with Article 7 of this Work Letter.
6.3 WALK-THROUGH. On or before the date Tenant occupies the Premises
for the purpose of conducting its business therein, Landlord and Tenant shall
conduct a walk-through inspection of the Premises and shall jointly prepare a
list of initial construction items that need to be corrected. Landlord shall
cause the Project Contractor to correct such items within thirty (30) days
thereafter, provided, however, if by the nature of such correction more than
thirty (30) days is required to effect such correction, Landlord shall not be in
default hereunder if such correction is commenced within such thirty (30) day
period and is diligently pursued to completion.
6.4 NOTICE OF COMPLETION. Within five (5) days after Substantial
Completion, Landlord shall execute and file a notice of completion with respect
thereto and furnish a copy thereof to Tenant upon recordation. Tenant, at
Tenant's option, may itself execute and file the same on behalf of Landlord.
6.5 WARRANTIES AND GUARANTEES. Each contractor and subcontractor
participating in the Project Work shall guarantee that the portion thereof for
which he is responsible shall be free from any defects in workmanship and
materials for a period of not less than one (1) year from the date of the
recording of the certificate of completion of the Premises. Every such
contractor or subcontractor shall be responsible for the replacement or repair,
without additional charge, of all work done or furnished in accordance with its
contract which shall become defective within one (1) year after the date of the
recording of the certificate of completion. The correction of such work shall
include, without additional charge, all additional expenses and damages in
connection with such removal or replacement of all or any part of the Building
and Land Improvements which may be damaged or disturbed thereby. All such
warranties or guarantees as to materials or workmanship of or with respect to
any work shall be contained in the contract or subcontract which shall be so
written that such guarantees or warranties shall inure to the benefit of both
Landlord and Tenant, as their respective interests may appear, and can be
directly enforced by either. Landlord covenants to give to Tenant any assignment
or other assurances necessary to effect such right of direct enforcement.
ARTICLE 7
CONSTRUCTION DISPUTE RESOLUTION
7.1 DISPUTE RESOLUTION. If any dispute arises in connection with this
Work Letter, such dispute shall be resolved in accordance with this Article. All
proceedings contemplated by this Article shall take place at the location for
all job-site meetings, unless the Construction Panel unanimously agrees to
another location, or unless any Arbitrator appointed hereunder selects another
location.
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7.2 NOTICE. All disputes to be determined in accordance with this
Article shall be raised by Landlord or Tenant by written notice to the other
party. Notice of any dispute with an issue resolved in any minutes of a periodic
on-site review meeting must be given within thirty (30) days of receipt of the
minutes, or the resolution of the issue as reflected in the minutes shall be
deemed conclusive.
7.3 RESOLUTION BY CONSTRUCTION PANEL. The Construction Panel shall
meet within two (2) business days of receipt of the notice and attempt in good
faith to resolve the dispute by unanimous agreement.
7.4 RESOLUTION BY ARBITRATOR. If the Construction Panel has not
resolved the dispute for any reason within four (4) business days of receipt of
the notice, it shall promptly select by unanimous agreement a disinterested
arbitrator ("Arbitrator") with extensive development and construction experience
to resolve the dispute. In the event a selection is not made within six (6)
business days after the written notice, the Arbitrator shall, upon the request
of Landlord or Tenant, be appointed by the American Arbitration Association.
Once an Arbitrator is appointed hereunder, such Arbitrator shall serve as
Arbitrator for all subsequent disputes arising in connection with this Work
Letter unless the Construction Panel unanimously agrees otherwise. The
Arbitrator shall resolve the dispute as soon as is reasonably practical in
accordance with the provisions of Section 1280 et seq. of the Code of Civil
Procedure. The cost for the Arbitrator's services shall be paid by the
non-prevailing party in the dispute being determined by the Arbitrator, unless
the Arbitrator determines otherwise.
7.5 INTERPRETATION AND RESOLUTION. In determining any dispute, the
Construction Panel and the Arbitrator shall apply the pertinent provisions of
this Work Letter and the Lease. As part of resolving a dispute, the Construction
Panel or the Arbitrator, as the case may be, shall determine the days of delay,
if any, in completing the Project Work which directly result from the dispute
being considered by the Construction Panel or the Arbitrator, and from the
proceedings pursuant to this Article 7. The days of delay shall be designated as
either Force-Majeure Delays, Landlord-Caused Delays or Tenant-Caused Delays or
any combination thereof as determined by the Construction Panel or the
Arbitrator, as the case may be.
7.6 CONTINUED PERFORMANCE. During any proceedings pursuant to this
Article, Landlord and Tenant shall, to the extent possible, continue to perform
and discharge all of their respective obligations under this Work Letter and the
Lease.
7.7 BINDING RESOLUTION. Any and all decisions of the Construction
Panel made by unanimous agreement as to the matter in dispute shall be binding
upon both Landlord and Tenant. In the absence of such unanimous agreement, any
and all decisions by the Arbitrator shall be binding upon both Landlord and
Tenant. The provisions of this Article 7 is an arbitration agreement enforceable
under Section 1280 et seq. of the Code of Civil Procedure.
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IN WITNESS WHEREOF, the parties hereto have executed this Work Letter
to be effective on the date first above written.
LANDLORD:
SCIENCE PARK CENTER LLC
A California limited liability company
By Nexus Properties, Inc.
A California corporation
Manager
By:
--------------------------------------
Michael J. Reidy
Chief Executive Officer
By Neurocrine Biosciences, Inc.
A Delaware corporation
Manager
By:
-------------------------------------
Paul W. Hawran
Senior Vice President
TENANT:
NEUROCRINE BIOSCIENCES, INC.
A Delaware corporation
By:
-------------------------------------
Paul W. Hawran
Senior Vice President
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ATTACHMENT A-1 TO EXHIBIT "A"
DESCRIPTION OF PROJECT PACKAGE
(a) "Project Plans", as described in the Work Letter;
(b) Hazardous Material Documents, as such are defined in Section 39.5 of
the Lease;
(c) Declaration of Covenants, Conditions and Restrictions for Torrey Pines
Science Center (Unit 2) dated June 22, 1994, and recorded on June 27, 1994 as
File No. 1994-0405385 of the Official Records of San Diego County, California
("CC&Rs");
(d) Articles of Incorporation and Bylaws of Torrey Pines Science Center
Association for Unit 2;
(e) Planned Industrial Development Permit No. 86-0884 and Planning
Director Resolution No. 7658, dated September 26, 1988, as amended to
incorporate the conditions of approval of Coastal Development Permit No.
6-88-504, and including a copy of the City regulations for the SR Zone, and
amended PID 96-0738;
(f) Coastal Development Permit No. 6-88-504, approved February 5, 1991,
and all conditions of approval thereof;
(g) Transportation Demand Management Program for Torrey Pines Science
Center, prepared by the North City TMA Network, dated January 24, 1990;
(h) Torrey Pines Science Center Signage Guidelines and Criteria, prepared
by Graphics Solutions, dated November 17, 1989;
(i) Final Map No. 12845;
(j) Provisions of the SR Zone and other applicable zoning as such may be
adopted or amended by the City of San Diego from time to time;
(k) Preliminary title report issued by Chicago Title Company dated June 6,
1997 and identified as Order No. 007353168, as modified by that Supplemental
Report dated June 16, 1997, as further modified by that Supplemental Letter
dated June 17, 1997;
(l) Preliminary Geotechnical Investigation prepared by Leighton Associates
dated December 19, 1989;
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(m) As-Graded Geotechnical Report prepared by Leighton Associates dated
December 12, 1991;
(n) Grading Plans for Torrey Pines Science Center Unit 2, prepared by Rick
Engineering and approved by the City Engineer on March 13, 1991, and a
Certificate from Rick Engineering indicating that the Property has been graded
in conformance with such Grading Plans;
(o) Phase I Environmental Site Assessment prepared by Harding Lawson
Associates dated October 19, 1988;
(p) Phase II Environmental Site Assessment prepared by Harding Lawson
Associates dated April 17, 1989;
(q) Updated Phase 1 Environmental Site Assessment prepared by Harding
Lawson Associates dated April 29, 1994;
(r) Any updated Environmental Site Assessment prepared as a part of this
transaction;
(s) Documents evidencing the release of the Property from the Licenses
described in Section 10.3 of the Lease;
(t) Declaration of Restrictions and Maintenance Agreement executed by
Chevron Land and Development Company and recorded on February 15, 1990 as File
No. 90-086015 of the Official Records of San Diego County, California.
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ATTACHMENT A-2 TO EXHIBIT "A"
PROJECT SCHEDULE