Exhibit 10.35
Lease, dated as of February 27, 1998, between the Company
and SimFirst, L.P. limited partnership.
Page 12 of 13
***TEXT OMITTED AND FILED SEPARATELY
CONFIDENTIAL TREATMENT REQUESTED
UNDER 17 C.F.R. SS. 200.80(B)(4),
200.83 AND 240.24B-2
NET LEASE
BASIC LEASE INFORMATION
DATE: February 27, 1998
LANDLORD: SimFirst, L.P., a California limited partnership
TENANT: Lynx Therapeutics, Inc., a Delaware corporation
PREMISES: All of Building B (73,920 rentable square feet) (the "Phase
I Premises") Second floor of Building C (36,960 rentable
square feet) (the "Phase II Premises")
PROPERTY: Mt. Eden Business Park, Hayward, CA
USE: General Office purposes and research and development of
certain biotechnical and chemical products.
TERM: Approximately ten (10) years and four (4) months
ESTIMATED COMMENCEMENT DATE: August 15, 1998 (Phase I Premises)
June 1, 1999 (Phase II Premises)
INITIAL BASE RENT: See Schedule 1
ESTIMATED RENT COMMENCEMENT DATE: December 15, 1998 (Phase I Premises)
October 1, 1999 (Phase II Premises)
TENANTiS PERCENTAGE SHARE: 100% (Phase I Premises)
50% (Phase II Premises)
SECURITY DEPOSIT: $[...***...]*1
BROKERS: CB Commercial Real Estate Group, Inc.
Colliers Parish International, Inc.
ADDRESS FOR NOTICES: Landlord: SimFirst, L.P.
c/o Simeon Commercial Properties
655 Montgomery Street; Suite 1190
San Francisco, CA 94111
Tenant: Lynx Therapeutics, Inc
3832 Bay Center Place
Hayward, CA 94545
TENANT IMPROVEMENTS ALLOWANCE: $[...***...] per rentable square foot
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LANDLORD INITIALS: /s/C.S. TENANT INITIALS: /s/ E.A.
TABLE OF CONTENTS
Page
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1. Premises 1
2. Term 1
3. Rent 2
4. Base Rent 2
5. Operating Expenses 3
6. Proration of Rent 6
7. Landlord's Work; Tenant Improvements 7
8. Use of the Premises 7
9. Alterations 8
10. Repairs 11
11. Damage or Destruction 12
12. Eminent Domain 13
13. Indemnity and Insurance 13
14. Assignment or Sublet 15
15. Default 18
16. Landlord's Right to Perform Tenant's Covenants 20
17. Security Deposit 20
18. Surrender of Premises 20
19. Holding Over 21
20. Access to Premises 21
21. Signs 21
22. Subordination 21
23. Transfer of the Property 22
24. Estoppel Certificates; Financial Statements 22
25. Mortgagee Protection 23
26. Attorneys' Fees 23
27. Brokers 23
28. Parking 23
29. Utilities and Services 24
30. Tenant Relocation 24
31. Acceptance 24
32. Use of Building Name 24
33. Recording 24
34. Quitclaim 24
35. Notices 25
36. Landlord's Exculpation 25
37. Additional Structures 25
38. Consents and Approvals 25
39. Renewal Option 26
40. Right of First Offer 26
41. Expansion Option 28
42. Licensed Area 29
43. General 32
SCHEDULES AND EXHIBITS
SCHEDULE 1: Base Rent
EXHIBIT "A": Premises Designation
EXHIBIT "A-1": Property Site Plan
EXHIBIT "B": Tenant Improvements
EXHIBIT "C": Commencement Date Memorandum
EXHIBIT "D": Rules and Regulations
EXHIBIT "E": Appraisal Procedures
NET LEASE
THIS LEASE, which is effective as of the date set forth in the Basic
Lease Information, is entered into by Landlord and Tenant, as set forth in the
Basic Lease Information. Terms which are capitalized in this Lease shall have
the meanings set forth in the Basic Lease Information.
1. Premises.
Landlord leases to Tenant, and Tenant leases from Landlord, the
Premises described in the Basic Lease Information (as shown on Exhibit A),
together with the right in common to use the Common Areas. The Common Areas
shall mean the areas and facilities within the land shown on Exhibit A-1 (the
"Land") and all buildings and other improvements now or hereafter located on the
Land (collectively, the "Buildings"; the Land, the Buildings and the "Common
Areas", collectively, the "Property" or the "Real Property"), provided and
designated by Landlord for the general use, convenience or benefit of Tenant and
other tenants and occupants of the Property (e.g., restrooms; janitorial,
telephone and electrical closets; sidewalks; public lobbies, entrances and
stairs; and unreserved parking areas). Landlord reserves the right to make
changes to the Common Areas. Tenant may improve a portion of the Common Areas
located between Buildings B and C for use as a common outdoor eating area for
use by Tenant and all other tenants and permitted occupants of the Property in
accordance with plans and specifications approved by Landlord, such approval not
to be unreasonably withheld. Tenant acknowledges that any such area shall be and
remain Common Area, notwithstanding any funds expended by Tenant in improving
the same or any course of conduct or practice which may develop in Tenant being
the only party which chooses to use such area with any frequency.
2. Term.
a. Lease Term; Commencement Date. The Term of this Lease shall
commence, as to each Phase of the Premises (a "Phase"), on the date Landlord
delivers the Phase to Tenant with Landlord's Base Shell Work (as defined in
Exhibit B attached hereto) substantially completed ("Landlord's Delivery Date").
In no event shall Landlord's Delivery Date of the Phase I Premises be earlier
than August 15, 1998, or Landlord's Delivery Date of the Phase II Premises be
earlier than June 1, 1999, unless Tenant shall agree thereto in writing. The
date the Lease term so commences with respect to each Phase of the Premises is
referred to herein as the "Commencement Date" for such Phase. The term of this
Lease shall end as to the entire Premises on the last day of the calendar month
in which the tenth (10th) annual anniversary of the Rent Commencement Date with
respect to the Phase I Premises occurs (the "Expiration Date").
b. Premises Not Delivered. If, for any reason, Landlord cannot deliver
possession of any Phase of the Premises to Tenant in the condition required by
this Lease by the applicable Estimated Commencement Date, (i) this Lease, and
Tenantis obligations hereunder, shall not commence until such possession is
delivered to Tenant; (ii) the failure shall not affect the validity of this
Lease, or, except as provided in clause (i) or in the next sentence, the
obligations of Tenant under this Lease, and (iii) Landlord shall not be subject
to any liability. Notwithstanding the foregoing, (i) if the Phase I Commencement
Date shall not have occurred by [...***...], as such date shall be extended for
any delay in the Phase I Commencement Date caused by Tenant Delay (as defined in
Exhibit B attached hereto), and as such date shall be further extended for up to
one-hundred eighty (180) additional days for any delay in
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the Phase I Commencement Date caused by Force Majeure (as defined in Section
10.c. below), Tenant shall have the right to terminate this Lease by written
notice to Landlord given within thirty (30) days after such date, as so extended
(such termination to be effective as of the date of Tenant's notice), and (ii)
if the Phase II Commencement Date shall not have occurred by [...***...], as
such date shall be extended for any delay in the Phase II Commencement Date
caused by Tenant Delay (as defined in Exhibit B attached hereto), and as such
date shall be further extended for up to one-hundred eighty (180) additional
days for any delay in the Phase II Commencement Date caused by Force Majeure,
Tenant shall have the right to terminate this Lease as to the Phase II Premises
only by written notice to Landlord given within thirty (30) days after such
date, as so extended (such termination to be effective as of the date of
Tenant's notice). If this Lease shall be terminated as provided under the
foregoing clause (i), Landlord shall return the Security Deposit to Tenant
within thirty (30) days after the termination date.
c. Commencement Date Memorandum. When the Commencement Date and Rent
Commencement Date of each Phase is determined, the parties shall execute a
Commencement Date Memorandum, in the form attached hereto as Exhibit C, setting
forth the applicable Commencement Date and Rent Commencement Date, and the
Expiration Date, of this Lease.
d. Early Entry. If Tenant is permitted by Landlord to enter any portion
of the Premises prior to the applicable Commencement Date for the purpose of
fixturing or any purpose other than the conduct of Tenantis business, the entry
shall be subject to all the terms and provisions of this Lease, except that
Tenantis obligation to pay Base Rent and Operating Expenses shall not commence
until the applicable Rent Commencement Date. Without limitation, in no event
will Landlord consent to such early access if Landlord shall reasonably
determine that the same might delay Landlord's Delivery Date.
3. Rent.
As used in this Lease, the term "Rent" shall include: (i) the Base
Rent; (ii) Operating Expenses payable by Tenant pursuant to Section 5 below; and
(iii) all other amounts which Tenant is obligated to pay under the terms of this
Lease. All amounts of money payable by Tenant to Landlord shall be paid without
prior notice or demand, deduction or offset. If any installment of Base Rent is
not paid by Tenant by the fifth (5th) day of the month, or if any payment of
Operating Expenses or any other amount payable by Tenant is not paid within five
(5) days of the due date thereof, Tenant shall pay to Landlord a late payment
charge equal to [...***...] of the amount of the delinquent amount, in addition
to the amount of Rent then owing, regardless of whether a notice of default or
notice of termination has been given by Landlord. In addition to the [...***...]
late charge, any Base Rent, Operating Expenses or other amounts owing hereunder
which are not paid within five (5) days after the date they are due shall
thereafter bear interest at the rate ("Interest Rate") which is the lesser of
[...***...] per annum or the maximum rate permitted by applicable law.
4. Base Rent.
a. Initial Base Rent. On or before the first day of each calendar month
during the Term, Tenant shall pay to Landlord, as monthly Base Rent for the
Premises, in advance, at Landlord's address for notices (as set forth in the
Basic Lease Information) or at such other address as Landlord may designate, the
monthly Base Rent specified in Schedule I attached hereto, provided, however,
that Tenant's obligation to pay monthly Base Rent for each Phase of the Premises
shall not commence until the
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Rent Commencement Date for such Phase. Tenant's obligation to pay Base Rent as
to each Phase of the Premises shall commence on the date (the "Rent Commencement
Date") which is the earlier to occur of (x) one hundred twenty (120) days after
Landlord's Delivery Date of the Phase, or (y) Tenant's occupancy of any portion
of such Phase for the conduct of business. Notwithstanding the foregoing, (i) in
the event that Landlord's Delivery Date applicable to a Phase of the Premises
shall be delayed by reason of Tenant Delay, then for purposes of determining the
Rent Commencement Date for such Phase pursuant to clause (x) of the preceding
sentence, Landlord's Delivery Date applicable to such Phase shall be deemed
accelerated by the number of days of such Tenant Delay.
b. CPI Adjustment. Commencing with the [...***...] full calendar month
after the Phase I Premises Rent Commencement Date, and at the end of each
twelfth (12th) month thereafter during the Term, including any extensions or
renewals, the Base Rent (for the entire Premises) for the ensuing twelve (12)
month period (the iAdjustment Periodi) shall be an amount equal to the greater
of (i) [...***...]% of the Base Rent in effect immediately prior to the
commencement of such Adjustment Period (without regard to any temporary
abatement of rental then in effect pursuant to the provisions of this Lease), or
(ii) the product obtained by multiplying the Base Rent in effect immediately
prior to the commencement of such Adjustment Period (without regard to any
temporary abatement of rental then in effect pursuant to the provisions of this
Lease), by a fraction, the numerator of which is the Index (as hereinafter
defined) published nearest but prior to the commencement date of such Adjustment
Period and the denominator of which is the Index published nearest but prior to
commencement of the twelve (12) month period immediately preceding such
Adjustment Period, but in no event shall such fraction, expressed as a
percentage, exceed [...***...]%.
The term iIndexi as used herein shall mean the Consumer Price Index for
All Urban Consumers (1982-84 = 100) San Francisco-Oakland-San Jose, California,
All Items, published by the Bureau of Labor Statistics of the U.S. Department of
Labor. If the Bureau of Labor Statistics ceases to publish the above Index, or
if the above Index is otherwise renamed, discontinued or superseded, the parties
agree that the Bureau of Labor Statistics or any successor governmental agency
thereto will be the sole judge of the comparability of successive indexes, but
if no succeeding index is published, the calculations under this Lease based on
the Index shall be made using the most closely comparable statistics on the
purchasing power of the consumer dollar as published by a responsible financial
authority and approved by Landlord and Tenant, such approval not to be
unreasonably withheld.
5. Operating Expenses.
a. Operating Expenses. Commencing as of the Rent Commencement Date
applicable to each Phase, Tenant shall pay Tenant's Percentage Share applicable
to such Phase of Operating Expenses incurred by Landlord during each calendar
year falling in whole or in part during the Term.
b. Operating Expenses. The term "Operating Expenses" shall include all
reasonable expenses and costs of every kind and nature, except as provided in
the next paragraph, which Landlord shall pay or become obligated to pay because
of or in connection with the ownership, management, administration, maintenance,
repair and operation of the Premises, the Buildings, the Common Areas and
balance of the Property, to the extent allocable, as reasonably determined by
Landlord, to the Building in which the applicable Phase of the Premises is
located. Operating Expenses shall include, without limitation, the following:
(i) all impositions relating to the Property, including Real Property Taxes (as
defined in
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Section 5.d.); (ii) premiums for insurance relating to the Property, including
as set forth in Sections 13.b., 13.d. and 13.i., and insurance deductibles paid
by Landlord; (iii) wages, salaries, bonuses and expenses and benefits (including
hospitalization, medical, surgical, retirement plan, pension plan, union dues,
life insurance, including group life insurance, welfare and other fringe
benefits, and vacation, holidays and other paid absence benefits, and costs of
uniforms) of all on-site and off-site employees of Landlord or its agents, at
the rank of property manager or below (but not above), engaged in operation,
management, administration, maintenance, repair and security of the Real
Property, including, without limitation, administrative, management and
accounting personnel and the individual(s) responsible for management of the
Property, and payroll, social security, workersi compensation, unemployment and
similar taxes with respect to such employees of Landlord or its agents, and the
cost of providing disability or other benefits imposed by law or otherwise, with
respect to such employees; (iv) costs of all supplies, materials and equipment
rentals used in operations; (v) all maintenance, janitorial, security and
service costs; (vi) a management fee not to exceed [...***...]% of all base rent
revenues from the Real Property (i.e. excluding revenues attributable to
Tenant's and other tenants' payments of Operating Expenses); (vii) legal and
accounting expenses, including the cost of audits by certified public
accountants relating to the Real Property; (viii) all repair, painting and
maintenance costs relating to the Property and its Common Areas, including
sidewalks, landscaping, service areas, mechanical rooms, parking areas, Building
exterior and driveways; (ix) all charges for heat, water, gas, steam, fuel,
electricity and other utilities used or consumed in the Building and Common
Areas; (x) costs of repairs, replacements, and general maintenance to and of the
Building Systems and the Base Building Components (as such terms are defined in
Sections 9.a. and 10.a., respectively, below); and (xi) the costs of capital
improvements, capital replacements, capital repairs, capital equipment, and
capital tools and devices installed or paid for by Landlord and intended to
reduce other Operating Expenses or required to comply with Legal Requirements
(as defined in Section 8.c. below) or intended for the protection of the health
and safety of the occupants of the Property. With respect to any costs included
in Operating Expenses under clause (x) which are capital expenditures, as
determined by Landlord in accordance with generally accepted accounting
principles consistently applied, and with respect to the costs of items included
in Operating Expenses under clause (xi), such costs shall be amortized over the
useful life of such capital improvement, equipment, device or other expenditure
(as reasonably determined by Landlord), together with interest on the
unamortized balance at a rate per annum equal to [...***...] percentage points
over the Treasury Rate charged at the time such item is constructed or acquired,
or at such higher rate as may have been paid by Landlord on funds borrowed for
the purpose of acquiring or constructing such item, but in either case not more
than the maximum rate permitted by law at the time such item is acquired or
constructed. As used herein, "Treasury Rate" means the six-month United States
treasury bill rate in effect from time to time by the San Francisco Main Office
of Bank of America, NT&SA (or any successor bank thereto), or if there is no
such rate, the rate quoted by such bank in pricing ninety day commercial loans
to substantial commercial borrowers.
Operating Expenses shall not include the following: (i)
depreciation on the Buildings or, except as provided above, amortization of
equipment or systems therein; (ii) debt service on any mortgage or similar debt
instrument encumbering the Buildings, including interest, principal, points and
fees payable thereunder; (iii) rental under any ground or underlying lease; (iv)
attorneys' fees and expenses incurred in connection with lease negotiations or
disputes with past, current or prospective tenants of any Building; (v) the
cost, whether capital or otherwise, of decorating, improving for tenant
occupancy, painting or redecorating portions of any Building to be demised to
tenants, including permit fees or other charges imposed as a condition to such
work; (vi) advertising and promotional expenditures, and costs of
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purchase and installation of signs in or on any Building identifying the owner
of the Building (except for Building directories and similar devices which also
identify all tenants generally); (vii) costs reimbursed by insurance proceeds,
another tenant (other than through the pass through of Operating Expenses) or
any third party; (viii) real estate broker's or other leasing commissions; (ix)
capital expenditures required to comply with Legal Requirements with which a
Building was required to comply as of the date the Building's temporary
certificate of occupancy or the equivalent was validly issued, or if none is
issued by the applicable jurisdiction, as of the first date occupancy of the
Building is legally allowed; (x) except for making repairs or keeping permanent
systems in operation while repairs are being made, rentals and other related
expenses incurred in leasing air conditioning systems, elevators or other
equipment ordinarily considered to be of a capital nature (except equipment that
is not affixed to a Building which is used in providing janitorial or other
services, and except to the extent such costs would otherwise be includable
pursuant to items (x) and (xi) as set forth in the immediately preceding
paragraph); (xi) the cost of services made available at no special cost to any
tenant of a Building but only made available to Tenant at special cost, (xii)
costs incurred due to a violation by Landlord, as determined by written
admission, stipulation, final judgment or arbitration award, of any of the terms
and conditions of any lease relating to a Building except to the extent such
costs reflect costs that would have been incurred by Landlord absent such
violation; (xiii) overhead and profit increments paid to Landlord or to
subsidiaries or affiliates of Landlord for services (other than management) to a
Building to the extent that the costs of the services materially exceed the
amounts normally payable for similar services to unrelated third parties under
similar circumstances (taking into account the market factors in effect on the
date any relevant contracts were negotiated) in comparable business parks within
a ten (10) mile radius of the Property's perimeter, excluding San Mateo county
(the "Comparable Market"); (xvi) all direct costs of refinancing, selling or
exchanging the Building, including broker commissions, attorney's fees and
closing costs; (xvii) Landlord's general corporate office overhead and
administrative expenses, except for management fees and as otherwise provided in
the preceding paragraph; (xvii) compensation paid to clerks, attendants or other
persons in restaurants, garages or other commercial concessions operated by
Landlord unless the services or use thereof, as applicable, are provided free of
separate charge to tenants of the Building; (xviii) penalties and interest
charges resulting solely from Landlord's failure to pay Real Property Taxes
prior to delinquency, except where resulting in whole or part from Tenant's
failure to timely pay Rent due under this Lease; (xix) costs, fines and
penalties incurred due to a violation by Landlord of any Legal Requirements,
except to the extent due to a violation by Tenant of the terms of this Lease,
and except further to the extent such costs reflect costs that would have been
incurred by Landlord absent such violation; and (xx) the purchase price of
sculptures, paintings or other objects of art (which shall not be deemed to
include landscaping or features related thereto) placed in the Common Areas.
The parties agree that statements in this Lease to the effect
that Landlord is to perform certain of its obligations hereunder at its own or
sole cost and/or expense shall not be interpreted as excluding any cost from
Operating Expenses if such cost is an Operating Expense pursuant to the terms of
this Section 5.b.
c. Monthly Increments; Adjustment. Promptly following the commencement
of the Term and prior to the commencement of each subsequent calendar year (or
as soon thereafter as practicable), Landlord shall estimate the Operating
Expenses payable by Tenant for such calendar year pursuant to this Section.
Commencing as of the Rent Commencement Date, and continuing thereafter of the
first day of each month, Tenant shall pay to Landlord, in advance, one-twelfth
(1/12) of Landlord's estimated amount. If at any time during the course of the
year Landlord determines that the Operating Expenses payable by Tenant will vary
from the then estimated amount, by notice to Tenant Landlord may revise the
amount
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payable by Tenant during the balance of the calendar year such that the total
estimated additional amount due from Tenant for such calendar year is paid by
Tenant during the balance of the calendar year in equal monthly amounts. Within
ninety (90) days (or as soon thereafter as practicable) after the close of each
calendar year, Landlord shall provide Tenant with a statement to account for any
difference between the actual and the estimated Operating Expenses for the
previous year. Landlord's annual statement shall be certified by an officer of
Landlord or by Landlord's independent accountant and be final and binding upon
Landlord and Tenant unless, within ninety (90) days after delivery thereof to
Tenant, Landlord shall revise or Tenant shall contest any item therein by
written notice to the other, specifying each item revised or contested and the
reason therefor. Notwithstanding the foregoing, the Real Property Taxes included
in any such annual statement may be modified by any subsequent adjustment or
retroactive application of Real Property Taxes affecting the calculation of
Operating Expenses. If Tenant has overpaid the amount of Operating Expenses
owing pursuant to this Section, Landlord shall credit the overpayment against
Tenantis next payments due under this Section 5. If Tenant has underpaid the
amount of Operating Expenses owing pursuant to this Section, Tenant shall pay
the amount of the underpayment to Landlord within thirty (30) days after
Tenant's receipt of Landlord's statement. If the rentable area of the Building
is not fully occupied during any calendar year, Operating Expenses for such
calendar year shall be adjusted to equal Landlord's reasonable estimate of the
Operating Expenses which would have been incurred during such calendar year if
the total rentable area of the Building were occupied.
d. Definition of Real Property Taxes. The term "Real Property Taxes"
shall mean any ordinary or extraordinary form of assessment or special
assessment, license fee, rent tax, levy, penalty (if a result of Tenant's
delinquency), or tax (other than net income, estate, succession, inheritance,
transfer or franchise taxes), imposed by any authority having the direct or
indirect power to tax, or by any city, county, state or federal government for
any maintenance or improvement or other district or division thereof. The term
shall include all transit charges, housing fund assessments, real estate taxes
and all other taxes relating to the Premises, Building and/or Property, all
other taxes which may be levied in lieu of real estate taxes, all assessments,
assessment bonds, levies, fees, and other governmental charges (including, but
not limited to, charges for traffic facilities, improvements, child care, water
services studies and improvements, and fire services studies and improvements)
for amounts necessary to be expended because of governmental orders, whether
general or special, ordinary or extraordinary, unforeseen as well as foreseen,
of any kind and nature for public improvement, services, benefits or any other
purposes which are assessed, levied, confirmed, imposed or become a lien upon
the Premises, Building or Property or become payable during the Term. If, by
law, any Real Property Taxes (other than amounts which are Tenant's obligation
pursuant to Section 5.f. below) could be paid in installments at the option of
Landlord, then whether or not Landlord elects to pay such Real Property Taxes in
such installments, Real Property Taxes (including any interest payable on
installments) shall be computed as if such election had been made, and only
installments thereof which would have become due during the given calendar year
shall be included in the calculation of Real Property Taxes for purposed of this
Lease for such calendar year.
e. Tenant's Audit Rights. Landlord shall maintain records respecting
Operating Expenses in accordance with sound accounting and management practices,
consistently applied. Tenant shall have the right to cause a reputable
nationally recognized accounting firm to audit Landlord's books and records
pertaining to Operating Expenses for the immediately prior calendar year,
provided that Tenant notifies Landlord in writing of Tenant's intention to
exercise such audit right within sixty (60) days after receipt of the relevant
annual statement described in Section 5.c., actually begins such audit within
thirty (30) days after such notice from Tenant (but in no event earlier than ten
(10) Business Days after such notice) and
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diligently pursues such audit to completion. Landlord agrees to make available
to Tenant's auditors, at the Building or at Landlord's office in the State of
California, the books and records relevant to the audit for review and copying,
but such books and records may not be removed from Landlord's location. Tenant
shall promptly deliver to Landlord a copy of the report or other documentation
prepared by Tenant's auditors upon completion of the audit. Tenant shall bear
all costs of such audit, except that, if the audit (as conducted and certified
by Tenant's nationally recognized accounting firm) shows an aggregate
overstatement of Operating Expenses of five percent (5%) or more, and Landlord's
auditors concur in such findings (or, in the absence of such concurrence, such
overstatement is ultimately confirmed by dispute resolution), then Landlord
shall bear Tenant's costs of the audit, such payment to be made by Landlord
within thirty (30) days of Landlord's receipt of the invoice (with reasonably
satisfactory supporting documentation) for such costs. If the agreed or
confirmed audit shows an underpayment of Operating Expenses by Tenant, Tenant
shall pay to Landlord, within thirty (30) days after the audit is agreed to or
confirmed, the amount owed to Landlord , and, if the agreed or confirmed audit
shows an overpayment of Operating Expenses by Tenant, Landlord shall reimburse
Tenant for such overpayment within thirty (30) days after the audit is agreed to
or confirmed.
f. Taxes on Tenant Improvements and Personal Property. Notwithstanding
any other provision hereof, Tenant shall pay the full amount of any increase in
Real Property Taxes during the Term resulting from any and all Alterations (as
defined in Section 9.a. below), including, without limitation, the Tenant
Improvements, of any kind whatsoever placed in, on or about the Premises for the
benefit of, at the request of, or by Tenant. Tenant shall pay, prior to
delinquency, all taxes assessed or levied against Tenant's personal property,
equipment, furniture or fixtures (collectively, iPersonal Propertyi) in, on or
about the Premises. When possible, Tenant shall cause its Personal Property to
be assessed and billed separately from the real or personal property of
Landlord.
g. Fiscal Year. Landlord shall have the right to account and bill for
Operating Expenses on the basis of a fiscal year, rather than a calendar year as
set forth above, and to revise such fiscal year from time to time, provided that
Landlord follows generally accepted accounting principles consistently applied
in connection therewith.
h. Net Lease. This shall be a Net Lease and Base Rent shall be paid to
Landlord absolutely net of all costs and expenses except as expressly herein
provided. The provisions for Tenant's payment of Tenant's Percentage Share of
Operating Expenses are intended to pass on to Tenant and reimburse Landlord for
Tenant's Percentage Share of all costs and expenses associated with the Real
Property, except as expressly provided in this Lease.
6. Proration of Rent. If any Rent Commencement Date is not the first day of a
calendar month, or if the end of the Term is not the last day of a calendar
month, Base Rent payable by Tenant pursuant to Section 4, and Operating Expenses
payable by Tenant pursuant to Section 5, shall be prorated on a daily basis
(based upon a thirty (30) day month) for such fractional month. The termination
of this Lease shall not affect the obligations of Landlord and Tenant pursuant
to Section 5.c. which are to be performed after the termination.
7. Landlord's Work; Tenant Improvements. Landlord agrees to construct Landlord's
Work pursuant to the terms of Exhibit B, and Tenant agrees to construct the
Tenant Improvements pursuant to the terms of Exhibit B. Except as set forth in
Exhibit B, the Premises shall be delivered to Tenant in its then "as-is"
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condition, and Landlord shall not have any obligation to make or pay for any
alterations, additions, improvements or repairs to prepare the Premises for
Tenantis occupancy.
8. Use of the Premises.
a. Use. The Premises shall be used solely for the use set forth in the
Basic Lease Information and for no other use or purpose. Landlord acknowledges
that such use may include [...***...]. Tenant shall not unreasonably do or
suffer or permit anything to be done in or about the Premises or the Property
which will in any way obstruct or interfere with the rights of other tenants or
occupants of the Buildings or injure or annoy them, or use or suffer or permit
the Premises to be used for any immoral, unlawful or objectionable purpose, nor
shall Tenant cause, maintain, suffer or permit any nuisance in, on or about the
Premises or the Real Property. Without limiting the foregoing, Tenant shall not
permit any odors, smoke, dust, gas or other substances to emanate from the
Premises except in accordance with all applicable Legal Requirements and sound
environmental practices and through such devices and in such manner as shall not
interfere with the use of the Property by other tenants or permitted users
thereof or cause any damage to the Premises or the balance of the Property, and
as Landlord shall have approved in writing, such approval not to be unreasonably
withheld, nor shall Tenant permit any noise or vibration to emanate from the
Premises without the prior written approval of Landlord, and no loudspeakers or
other similar device which can be heard outside the Premises shall, without the
prior written approval of Landlord, be used in or about the Premises. Tenant
shall not commit or suffer to be committed any waste in, to or about the
Premises. Tenant agrees not to employ any person, entity or contractor for any
work in the Premises (including moving Tenant's equipment and furnishings in,
out or around the Premises) whose presence may give rise to a labor or other
disturbance in the Building and, if necessary to prevent such a disturbance in a
particular situation, Landlord may require Tenant to employ union labor for the
work.
b. Rules and Regulations; CC&R's. Tenant shall comply with the Rules
and Regulations attached hereto as Exhibit D, as the same may be modified from
time to time by Landlord upon prior notice to Tenant (the "Rules"). In addition,
Tenant shall comply with any covenants, conditions and restrictions ("CC&R's")
applicable to the Real Property, and all rules, regulations and restrictions
imposed by any association formed pursuant to the CC&R's, in each case to the
extent Landlord has delivered a copy thereof to Tenant and the same are not in
conflict with the provisions of this Lease.
c. Compliance. Tenant shall not permit the Premises to be used in
violation of or in conflict with, and at its sole cost and expense shall
promptly comply with, all laws, statutes, ordinances and governmental rules,
regulations or requirements now in force or which hereinafter may be in force,
with the requirements of any board of fire underwriters or other similar board
now or hereafter constituted, with any direction or occupancy certificate issued
pursuant to any law by any public officer or officers, as well as the provisions
of all recorded documents affecting the Premises (all of the foregoing,
collectively, "Legal Requirements"), insofar as any thereof relate to or affect
the condition, use or occupancy of the Premises, and Tenant shall perform all
work to the Premises and other portions of the Property required to effect such
compliance (or, at Landlordis election, Landlord may perform such work at
Tenantis expense). The judgement of any court of competent jurisdiction or the
admission of Tenant in any actions against Tenant, whether Landlord be a party
thereto or not, that Tenant has so violated any such law, statute, ordinance,
rule, regulation or requirement, shall be conclusive of such violation as
between Landlord or Tenant.
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d. Hazardous Materials. Tenant shall not cause or permit the storage,
use, generation, release, handling or disposal (collectively, "Handling") of any
Hazardous Materials (as defined below), in, on, or about the Premises or the
Property by Tenant or any agents, employees, contractors, licensees, subtenants,
customers, guests or invitees of Tenant (collectively with Tenant, "Tenant
Parties"), except that Tenant shall be permitted to use in the Premises (i) in a
normal and customary manner normal quantities of office supplies or products
(such as copier fluids or cleaning supplies) customarily used in the conduct of
general business office activities ("Common Office Chemicals"), and (ii) in a
manner reasonably required by Tenant's permitted use of the Premises the
Hazardous Materials customarily used in a Group B Occupancy under the Uniform
Building Code ("Excepted Hazardous Materials"); provided that the Handling of
such Common Office Chemicals and Excepted Hazardous Materials shall comply at
all times with all Legal Requirements, including Hazardous Materials Laws (as
defined below). In addition, with Landlord's prior written approval, which
approval shall not be unreasonably withheld, Tenant shall be permitted to use in
the Premises such other Hazardous Materials as may be necessary in connection
with the conduct of Tenant's permitted business upon the Premises, provided the
Handling of such Hazardous Materials shall comply at all times with all Legal
Requirements, including Hazardous Materials Laws. In no event shall Landlord's
approval requested pursuant to the preceding sentence be deemed unreasonably
withheld if Landlord shall (x) determine in good faith that Tenant's use of such
Hazardous Materials would present an unreasonable threat of contamination of the
Premises or any other portion of the Property, (y) determine in good faith that
Tenant's use of such Hazardous Materials would violate the provisions of any
other lease or any ground lease or underlying lease, or mortgage or deed of
trust, affecting the Property or any portion thereof , or interfere with the use
and occupancy of any other portion of the Building or the Property by any other
tenant or permitted occupant thereof (except that in no event shall this clause
(y) preclude Tenant from using Excepted Hazardous Materials), or (z) condition
the effectiveness thereof upon Tenant's delivery to Landlord of evidence that
Tenant has obtained all governmental permits and approvals necessary in
connection with Tenant's Handling of such Hazardous Materials, together with
copies of all such permits and approvals. Upon Landlord's request from time to
time, Tenant shall provide to Landlord a complete written inventory of all
Hazardous Materials which Tenant anticipates using or storing on, or discharging
from , the Premises along with copies of all reports, permits and business plans
filed with any federal, state, local or other governmental agency. Tenant shall
update the inventory as frequently as required to reflect any material changes
to the items required to be disclosed therein. Tenant shall be solely
responsible for and shall indemnify, defend and hold Landlord and all other
Indemnitees (as defined in Section 13.a. below), harmless from and against all
Claims (as defined in Section 13.a. below), arising out of or in connection
with, or otherwise relating to (i) any Handling of Hazardous Materials by any
Tenant Party or Tenant's breach of its obligations hereunder, or (ii) any
removal, cleanup, or restoration work and materials necessary to return the
Property or any other property of whatever nature located on the Property to
their condition existing prior to the Handling of Hazardous Materials in, on or
about the Premises by any Tenant Party. Tenant shall promptly provide Landlord
with copies of all notices received by it, including, without limitation, any
notice of violations, notice of responsibility or demand for action from any
federal, state or local authority or official in connection with the presence of
Hazardous Materials in or about the Premises or any other portion of the
Property. In the event of any release of Hazardous Materials upon the Premises
or any other portion of the Property, or upon adjacent lands, if caused by
Tenant or any other Tenant Party, Tenant shall promptly remedy the problem in
accordance with all applicable Legal Requirements. For purposes of this Lease,
"Hazardous Materials" means any explosive, radioactive materials, hazardous
wastes, or hazardous substances, including without limitation asbestos
containing materials, PCB's, CFC's, or substances defined as "hazardous
substances" in the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. Section 9601-9657; the Hazardous
Materials Transportation
9
Act of 1975, 49 U.S.C. Section 1801-1812; the Resource Conservation and Recovery
Act of 1976, 42 U.S.C. Section 6901-6987; or any other Legal Requirement
regulating, relating to, or imposing liability or standards of conduct
concerning any such materials or substances now or at any time hereafter in
effect (collectively, "Hazardous Materials Laws"). The provisions of this
Section 8.d. shall survive the expiration or earlier termination of this Lease.
9. Alterations.
a. Alterations. Tenant shall not make any Alterations (as defined in
Section 9.e. below) in, to or upon the Premises without the prior written
consent of Landlord in each instance, which consent shall not be unreasonably
withheld with respect to proposed Alterations which (i) are not structural in
nature, (ii) do not affect the Base Building Components, (iii) are, in
Landlord's opinion, compatible with the Building in which the applicable portion
of the Premises is located and the balance of the Property, and the Building's
mechanical, plumbing, electrical, heating/ventilation/air conditioning,
communication, security and fire and other life safety systems (collectively,
the "Building Systems"), and (iv) in Landlord's opinion will not interfere with
the use and occupancy of any other portion of the Building or the Property by
any other tenant or permitted occupant thereof. Tenant shall give Landlord not
less than ten (10) days' prior written notice of any Alterations Tenant desires
to make. Any Alterations as to which Landlord shall consent shall be made only
by contractors approved in advance, in writing by Landlord, which approval shall
not be unreasonably withheld; provided, however, that Landlord may, in its sole
discretion, specify the engineers and contractors to perform any work relating
to or affecting the Building Systems or the Base Building Components. Tenant
shall comply with all Legal Requirements applicable to each Alteration and,
except as to Cosmetic Alterations (as defined below) shall deliver to Landlord a
complete set of "as built" plans and specifications for each Alteration. Any
work to the balance of the Building or Property (required by Legal Requirements
or otherwise) related to or affected or triggered by Tenantis Alterations shall
be performed by Tenant at Tenantis expense (or, at Landlordis election, Landlord
may perform such work at Tenantis expense). Tenant shall be solely responsible
for maintenance and repair of all Alterations made by Tenant. Tenant shall pay
Landlord on demand (whether prior to or during the course of construction ) an
amount (the "Alterations Fee") equal to [...***...] of the total cost of each
Alteration (and for purposes of calculating the Alterations Fee, such cost shall
include architectural and engineering fees, but shall not include permit fees)
up to a total cost of $[...***...], and [...***...] of such total cost over
$[...***...], as compensation to Landlord for miscellaneous costs incurred by
Landlord in connection with the Alteration; provided, however, that no
Alterations Fee shall be payable for Cosmetic Alterations or the Tenant
Improvements. In addition, except as to Cosmetic Alterations, Tenant shall
reimburse Landlord for all reasonable third party fees paid by Landlord in
connection with reviewing the proposed Alterations (whether or not the proposed
Alterations are ultimately approved by Landlord or made by Tenant), including,
without limitation, Landlord's architectural and engineering fees. All
Alterations shall be performed diligently and in a first-class workmanlike
manner and in accordance with plans and specifications approved by Landlord, and
shall comply with all Legal Requirements and Landlord's construction procedures
and requirements for the Building (including Landlord's requirements relating to
insurance and contractor qualifications and scheduling of the work).
Notwithstanding the foregoing, Tenant shall have the right, without
Landlord's consent, to make any Alteration to the Premises, provided that the
Alteration (a) is decorative in nature (such as paint, carpet or other wall or
floor finishes, partitions or other such work), (b) does not affect the Base
Building
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Components or the Building Systems, (c) is not structural in nature and does not
require a building permit or other governmental permit, uses only first-class
materials and is performed in a workman-like manner and in accordance with all
applicable Legal Requirements, and (d) does not cost in excess of [...***...].
Any Alteration permitted without Landlord's consent pursuant to this paragraph
is referred to in this Lease as a "Cosmetic Alteration".
b. Liens. If, because of any act or omission of Tenant or anyone
claiming by, through, or under Tenant, any mechanic's lien or other lien is
filed against the Premises or any other portion of the Property or against other
property of Landlord (whether or not the lien is valid or enforceable), Tenant
shall, at its own expense, cause it to be discharged of record within a
reasonable time, not to exceed ten (10) days, after the date of the filing. In
addition, Tenant shall defend and indemnify Landlord and hold it harmless from
any and all Claims resulting from the lien. Without limitation of Landlordis
other remedies, Landlord shall have the rights under Section 16 below if any
such lien is not timely discharged by Tenant.
c. Ownership of Alterations. All Alterations shall be Tenant's property
during the term of this Lease. All Alterations, once completed, shall not be
altered or removed from the Premises without Landlord's prior written approval
pursuant to Section 9.a. above, except that Tenant may remove any Removable
Trade Fixtures (as defined in Section 9.e. below) without Landlord's consent
provided that Tenant repairs any damage to the Premises or the Real Property
caused by such removal. Without limitation, Landlord's approval pursuant to
Section 9.a. above shall not be deemed unreasonably withheld if any such
Alterations would be removed, altered or demolished and not replaced with
Alterations of equal or greater value and of the same utility and character as
the prior Alterations. Upon the expiration or earlier termination of this Lease,
all Alterations (other than Removable Trade Fixtures, which shall be and at all
times remain Tenant's property) shall immediately and automatically, without any
required action or notice by Landlord or Tenant, become Landlord's sole
property, without any obligation on Landlord to pay Tenant any sums or other
consideration therefor. Tenant shall not finance any Alterations by any means
whatsoever which would result in a lien or security interest thereon or therein
in favor of any party, nor shall Tenant otherwise allow any lien or security
interest to be imposed upon or attach to any Alterations. Except as provided in
Section 9.d. and below in this Section 9.c., Landlord may require Tenant, at
Tenant's sole expense and by the end of the Term, to remove any Alterations and
to restore the Premises to its condition prior to the Alterations.
Notwithstanding the preceding sentence, Tenant shall not be required to remove
any of the Tenant Improvements (other than Removable Trade Fixtures) to any
portion of the Premises improved as general office space or warehouse space, and
nor shall Tenant be required to remove any of the Tenant Improvements (other
than Removable Trade Fixtures) to any portion of the Phase I Premises improved
as laboratory space if no more than [...***...] of the rentable square footage
of the Phase I Premises is improved as laboratory space, and nor shall Tenant be
required to remove any of the Tenant Improvements (other than Removable Trade
Fixtures) to any portion of the Phase II Premises improved as laboratory space
if no more than [...***...] of the rentable square footage of the Phase II
Premises is improved as laboratory space.
d. Request Regarding Removal Obligation. At the time that Tenant
requests Landlord's consent to any Alteration, Tenant may request that Landlord
notify Tenant if Landlord will require Tenant, at Tenant's sole expense, to
remove any or all of the Alteration by the end of the Term, and to restore the
Premises to its condition prior to the Alteration. Unless Landlord shall have
expressly agreed
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in writing not to require such removal and restoration, Landlordis election
right under Section 9.c. shall continue through the end of the Term as to such
Alterations.
e. Definitions. The term "Alterations" shall mean any alterations,
additions or improvements, including, without limitation, the Tenant
Improvements constructed by Tenant pursuant to Exhibit B attached hereto (except
that in the event of any conflict between the terms of Exhibit B and the terms
of this Section 9 (or the balance of this Lease), the terms of Exhibit B shall
control), Built-In Trade Fixtures, and Removable Trade Fixtures, except that any
Removable Trade Fixtures which are Portable Equipment shall not be deemed
"Alterations".
The term "Built-In Trade Fixtures" shall mean [...***...].
The term "Removable Trade Fixtures" shall mean [...***...]
except that in no event shall "Removable Trade Fixtures" include any items
described above in the definition of "Built-In Trade Fixtures" or described
below in the definition of "Base Improvements".
The term "Portable Equipment" means [...***...].
The term "Base Improvements" means [...***...].
10. Repairs.
a. Landlord's Repairs. Landlord shall maintain the roof, foundations,
floor slabs and exterior walls of the Building (collectively, the "Base Building
Components") in good condition and repair, reasonable wear and tear excepted.
The term walls as used herein shall not include windows, glass or plate glass,
doors, special store fronts or office entries. The term roof as used herein
shall not include skylights, smoke hatches or roof vents. Landlord shall also
maintain in good condition and repair, reasonable wear and tear excepted, the
Common Areas, including, but not limited to, the landscaped areas, parking areas
and driveways. Tenant shall reimburse Landlord for Landlord's costs of complying
with its obligations under this Section 10 in accordance with Section 5 above,
provided, however, that any damage caused by or repairs necessitated by any act
of Tenant or any other Tenant Party may be repaired by Landlord at Landlord's
option and at Tenant's expense. Tenant shall give Landlord prompt written notice
of any repairs required of Landlord pursuant to this Section 10, after which
notice Landlord shall have reasonable opportunity to perform the same.
Landlord shall also repair any patent defects in Landlord's
Work in each Phase of the Premises provided that Tenant gives Landlord notice
thereof within three (3) months following the Commencement Date applicable to
such Phase. Landlord shall also repair latent defects in Landlord's Work in each
Phase of the Premises, provided Tenant gives Landlord notice thereof within
thirty (30) days after the date that Tenant discovers the same, but in any event
within two (2) years following the Commencement Date applicable to such Phase.
b. Tenant's Repairs. Tenant shall, at Tenant's expense, maintain all
parts of the Premises in a good, clean and secure condition, promptly making all
necessary repairs and replacements including, but not limited to, all windows,
glass or plate glass, doors and any special store fronts or office entries,
walls and wall finishes, floor covering, Building Systems, truck doors, dock
bumpers, dock plates and levelers, plumbing work and fixtures, downspouts,
skylights, smoke hatches, roof vents and utility equipment, in
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each case to the extent the same are located within or exclusively serve the
Premises. Tenant shall, at Tenant's expense, also perform necessary pest
extermination and regular removal of trash and debris. Tenant shall, at Tenant's
expense, enter into a regularly scheduled preventive maintenance/service
contract with a maintenance contractor for servicing all hot water, heating and
air conditioning systems and equipment within or serving the Premises, and
provide Landlord with copies of all such contracts upon Landlord's request.
Tenant shall not damage any demising wall or disturb the integrity and support
provided by any demising wall and shall, at its sole expense, immediately repair
any damage to any demising wall caused by Tenant or its employees, agents or
invitees or any other Tenant Party. Tenant hereby waives all right to make
repairs at the expense of Landlord or in lieu thereof to vacate the Premises and
its other similar rights as provided in California Civil Code Sections 1932(1),
1941 and 1942 or any other Legal Requirement (whether now or hereafter in
effect). Notwithstanding the foregoing, Tenant shall not be required to perform
any repairs which are required to be performed by Landlord under Section 10.a.,
or are required by reason of Landlord's gross negligence or willful misconduct.
c. Rent Abatement. In the event that Landlord fails to repair the Base
Building Components as required hereunder, and such failure is not due to
strikes, lock-outs, labor disputes, shortages of material or labor, fire, flood
or other casualty, inclement weather (including rainfall) or adverse conditions
resulting therefrom, acts of God or any other cause (other than financial
inability) beyond the reasonable control of Landlord ("Force Majeure"), and such
repair is not necessitated by the acts or omissions of Tenant or any other
Tenant Party, and as a result of such failure by Landlord Tenant is unable to
conduct and does not conduct its business in all or a substantial portion of the
Premises for a period of [...***...] or more consecutive days, the Base Rent and
Operating Expenses shall be abated commencing with the expiration of such
[...***...] day period, based upon the area of the Premises which Tenant is
unable to use and does not use for the conduct of its business as a result of
such failure by Landlord, and continuing until the earlier of the making of such
repair or the use of such portion of the Premises by Tenant for the conduct of
its business.
11. Damage or Destruction.
a. Landlord's Obligation to Rebuild. If the Premises are damaged or
destroyed, Landlord shall promptly and diligently repair the Premises as
described in Section 11.c. below unless Landlord has the option to terminate
this Lease as provided herein, and Landlord elects to terminate.
b. Right to Terminate. Landlord shall have the option to terminate this
Lease if the Premises or any Building in which any portion of the Premises is
located is destroyed or damaged by fire or other casualty, regardless of whether
the casualty is insured against under this Lease, if Landlord reasonably
estimates that the repair of the Premises or such Building, in each case to the
extent of Landlord's Work, cannot be completed within [...***...] after the
casualty. Landlord shall also have the right to terminate this Lease if the
repair of the Premises or of the Building, in each case to the extent of
Landlord's Work, is not fully covered by insurance maintained (or required to be
maintained) by the Landlord pursuant to this Lease other than by reason of the
deductible amounts under Landlordis insurance policies. Tenant shall have the
option to terminate this Lease if the Premises is damaged or destroyed by fire
or other casualty, and Landlord reasonably estimates that the repair of the
Premises, to the extent of Landlord's Work, cannot be completed within
[...***...] after the casualty. Landlord shall notify Tenant of Landlordis
reasonable repair period estimate within (60) days after the casualty. If a
party desires to exercise the right to terminate this Lease as a result of a
casualty, the party shall exercise the right by giving the other party
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written notice of its election to terminate within thirty (30) days after
delivery of Landlordis repair period estimate, in which event this Lease shall
terminate fifteen (15) days after the date of the terminating partyis notice. If
neither Landlord nor Tenant exercises the right to terminate this Lease, this
Lease shall continue in full force and effect and Landlord shall promptly
commence the process of obtaining necessary permits and approvals, and shall
commence repair of the Premises or the Building as soon as practicable and
thereafter prosecute the repair diligently to completion.
c. Limited Obligation to Repair. Landlord's obligation, should Landlord
elect or be obligated to repair or rebuild, shall be limited to the Base
Building Components and the other components of Landlord's Work. Unless Landlord
or Tenant terminates this Lease as permitted hereunder, Tenant, at its expense,
shall replace or fully repair all Alterations, including the Tenant Improvements
and Built-in Trade Fixtures, but excluding, at Tenant's option, Removable Trade
Fixtures, existing at the time of the damage or destruction. Unless Landlord or
Tenant terminates this Lease as permitted hereunder, and so long as no Event of
Default shall have occurred and be continuing hereunder, Landlord shall make the
proceeds paid to Landlord from the insurance maintained by Tenant pursuant to
Section 13.h. below (the "Tenant Improvement Insurance Proceeds") available to
Tenant for such replacement and repair. Such amounts shall be disbursed pursuant
to the procedures set forth in Exhibit B attached hereto with respect to
Landlord's Contribution, except that the frequency of such disbursements shall
be every thirty (30) days or such longer intervals as Tenant may request
(subject, in any event, to the conditions for disbursement set forth in said
Exhibit B). If either Landlord or Tenant terminates this Lease pursuant to
Section 11.b., and so long as no Event of Default shall have occurred and been
continuing at the time of such termination, Landlord shall pay to Tenant, within
thirty (30) days after the termination date (or such later date as Landlord
receives the Tenant Improvement Insurance Proceeds), the portion of the Tenant
Improvement Insurance Proceeds in [...***...], including the Base Improvements,
Built-In Trade Fixtures, and other Tenant Improvements, but excluding the
Removable Trade Fixtures (since the Tenant Improvement Insurance Proceeds will
not include any amount attributable to the Removable Trade Fixtures), provided
that Tenant shall have furnished to Landlord, within ninety (90) days after the
Rent Commencement Date applicable to each Phase of the Premises, a detailed
accounting of such costs paid by Tenant in such Phase of the Premises, such as
receipts and construction invoices.
d. Abatement of Rent. In the event of any damage or destruction to the
Premises which does not result in termination of this Lease, the Base Rent and
Operating Expenses shall be temporarily abated proportionately to the degree the
Premises are untenantable as a result of the damage or destruction, commencing
from the date of the damage or destruction and continuing during the period
required by Landlord to substantially complete its repair and restoration of the
Premises to the extent of Landlord's Work; provided, however, that nothing
herein shall preclude Landlord from being entitled to collect the full amount of
any rent loss insurance proceeds. Tenant shall not be entitled to any
compensation or damages from Landlord for loss of the use of the Premises,
damage to Tenant's Personal Property or any inconvenience occasioned by any
damage, repair or restoration. Tenant hereby waives the provisions of Section
1932, Subdivision 2, and Section 1933, Subdivision 4, and Sections 1941 and 1942
of the California Civil Code, and the provisions of any similar Legal
Requirement (whether now or hereafter in effect).
e. Insurance Proceeds. Subject to Section 11.c. above, if this Lease is
terminated, Landlord may keep all the insurance proceeds resulting from the
damage payable to Landlord pursuant to insurance
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coverage maintained by Landlord, or maintained by Tenant and under which
Landlord is loss payee pursuant to the foregoing provisions, and Tenant shall
have no claims thereto.
12. Eminent Domain. If all or any material part of the Premises or the balance
of the Property is taken for public or quasi-public use by a governmental
authority under the power of eminent domain or is conveyed to a governmental
authority in lieu of such taking (a itakingi), Landlord may terminate this Lease
by written notice to Tenant within thirty (30) days after the taking. If all or
any material part of the Premises or the balance of the Property is taken, and
if the taking causes the remaining part of the Premises to be untenantable or
inaccessible, and inadequate for use by Tenant for the purpose for which they
were leased, then Tenant, at its option and by giving notice within thirty (30)
days after the taking, may terminate this Lease as of the date Tenant is
required to surrender possession of the Premises or the date such other portion
of the Property is taken, as applicable. If part of the Premises is taken but
the remaining part is tenantable and accessible, and adequate for Tenant's use,
then this Lease shall be terminated as to the part taken as of the date Tenant
is required to surrender possession, and, unless Landlord shall have terminated
this Lease pursuant to the foregoing provisions, Landlord shall make such
repairs, alterations and improvements as may be necessary to render the part not
taken tenantable, and the Base Rent shall be reduced in proportion to the part
of the Premises taken. All compensation awarded for the taking shall be the
property of Landlord without any deduction therefrom for any estate of Tenant,
and Tenant hereby assigns to Landlord all its right, title and interest in and
to the award. Tenant shall have the right, however, to recover from the
governmental authority, but not from Landlord, such compensation as may be
awarded to Tenant on account of the interruption of Tenant's business, moving
and relocation expenses, removal of Tenant's Personal Property, and the value of
the Tenant Improvements, Built-In Trade Fixtures, Removable Trade Fixtures and
other Alterations in Tenant's proportionate share, based on the proportionate
share of costs for such items paid by Tenant, provided that any such award to
Tenant will not reduce the award which would otherwise be made to Landlord.
13. Indemnity and Insurance.
a. Indemnity. Tenant shall hold Landlord and its constituent
shareholders, partners, members or other owners, and all of their agents,
contractors, officers, directors and employees (collectively with Landlord, the
"Indemnitees") harmless from and indemnify the Indemnitees against any and all
claims, liabilities, damages, costs and expenses, including reasonable
attorneys' fees and costs incurred in defending against the same (collectively,
"Claims"), to the extent arising from (a) the acts or omissions of Tenantor any
other Tenant Party in, on or about the Real Property, or (b) any construction or
other work undertaken by or on behalf of Tenant in, on or about the Premises,
whether prior to or during the Term, other than any such work undertaken by
Landlord, or (c) any accident, injury or damage, howsoever and by whomsoever
caused, to any person or property, occurring in, on or about the Premises;
except to the extent such Claims are caused directly by the gross negligence or
willful misconduct of the party seeking the benefit of such indemnity from
Tenant. In case any action or proceeding be brought against any of the
Indemnitees by reason of any such Claim, Tenant, upon notice from Landlord,
covenants to resist and defend at Tenant's sole expense such action or
proceeding by counsel reasonably satisfactory to Landlord and Tenant. The
provisions of this Section 13.a. shall survive the expiration or earlier
termination of this Lease with respect to any injury, illness, death or damage
occurring prior to such expiration or termination.
b. Fire and Extended Coverage. Landlord shall procure and maintain in
full force and effect with respect to the Buildings a policy or policies of all
risk insurance (including sprinkler, vandalism and malicious mischief coverage,
and any other endorsements desired by the Landlord or required by the
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holder of any fee or leasehold mortgage on the Real Property, but excluding, at
Landlordis option, the insurance described in Section 13.i. below) in an amount
equal to [...***...] of the full replacement cost (including debris removal, and
demolition, but excluding the land and the footings, foundations and
installations below the basement level) of Landlord's Work. Such insurance, and
all other insurance maintained by Landlord under this Lease, shall be for the
sole benefit of Landlord, and the proceeds therefrom shall be under Landlordis
sole control.
c. Public Liability, Etc.. Tenant, at its own cost and expense, shall
keep and maintain in full force and effect during the Term the following
insurance coverages, written by an insurance company with a general
policyholders' rating of "A" or better and a financial size ranking of "Class
VIII" or higher, in the most recent edition of Best's Insurance Guide, in the
form customary to the locality, (i) commercial general liability insurance,
including contractual liability coverage, insuring Tenant's activities with
respect to the Premises and/or the Building against loss, damage or liability
for personal injury or death of any person or loss or damage to property
occurring in, upon or about the Premises, with a minimum limit of [...***...]
per occurrence/general aggregate, plus a [...***...] per occurrence/general
aggregate umbrella, (ii) fire damage legal liability insurance and
personal/advertising injury insurance, each in the minimum amount of
[...***...], (iii) worker's compensation insurance in statutory amounts, and
(iv) if Tenant operates owned, leased or non-owned vehicles on the Property,
comprehensive automobile liability insurance with a minimum limit of
$[...***...] per occurrence; provided, however, that if, at any time during the
Term, Tenant shall have in full force and effect a blanket policy of public
liability insurance with the same coverage for the Premises as described above,
as well as coverage of other premises and properties of Tenant, or in which
Tenant has some interest, the blanket insurance shall satisfy the requirement
hereof and be endorsed to separately apply to the Premises.
d. Rental Abatement Insurance. Landlord may keep and maintain in full
force and effect during the Term rental abatement insurance against abatement or
loss of rents with respect to the Property in such amount as determined by
Landlord.
e. Insurance Certificates. Tenant shall furnish to Landlord, on or
before the Commencement Date and thereafter within thirty (30) days prior to the
expiration of each policy, and from time to time on at least ten (10) days'
prior written request from Landlord, an original certificate of insurance issued
by the insurance carrier of each policy of insurance carried by Tenant pursuant
to this Section 13. The certificates shall expressly provide that the policies
shall not be cancelable except after thirty (30) days' prior written notice to
the parties named as insureds. In addition, Tenant shall give Landlord written
notice of any change in coverage at least thirty (30) days prior to the
effective date of such change, but no such change in coverage shall render the
policies in noncompliance with the requirements hereof. Landlord, its successors
and assigns, and any nominee of Landlord holding any interest in the Premises,
including, without limitation, any ground lessor or the holder of any fee or
leasehold mortgage, shall be named as an additional insured under each policy of
insurance maintained by Tenant pursuant to this Lease. The policies and
certificates shall further provide that the coverage shall be primary, and that
any coverage carried by Landlord shall be secondary and noncontributory with
respect to Tenantis policy.
f. Tenant's Failure. If Tenant fails to maintain any insurance required
by this Lease, Tenant shall be liable for any loss or cost resulting from the
failure. This Section shall not be deemed to be a waiver of any of Landlord's
rights and remedies under any other provision of this Lease.
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g. Waiver of Subrogation. Any policy or policies of fire, extended
coverage or similar casualty insurance which either party obtains in connection
with the Building, the Premises, or Tenant's Personal Property shall include a
clause or endorsement denying the insurer any rights of subrogation against the
other party to the extent rights have been waived by the insured prior to the
occurrence of injury or loss. Landlord and Tenant each waives any rights of
recovery against the other for injury or loss due to hazards covered by such
insurance policies, regardless of whether such insurance policies or coverage
shall actually have been obtained by the party granting such waiver, and
regardless of the cause of such fire or casualty, including the act or
negligence of the party benefiting from such waiver. Because this Section 13.g
will preclude the assignment of any claim mentioned in it by way of subrogation
or otherwise to an insurance company or any other person, each party to this
Lease agrees immediately to give to each of its insurance companies written
notice of the terms of the mutual waivers contained in this Section 13.g and to
have the insurance policies properly endorsed, if necessary, to prevent the
invalidation of the insurance coverages by reason of the mutual waivers
contained in this Section 13.g.
h. Tenant's Property and Fixtures. Tenant shall assume the risk of
damage to any of Tenantis furniture, equipment, machinery, goods, supplies or
fixtures or other Personal Property (including the Portable Equipment), and to
any Alterations which Tenant may make to the Premises (including the Base
Improvements, Built-In Trade Fixtures, Removable Trade Fixtures and other Tenant
Improvements), and shall insure the same throughout the Term, for their full
replacement cost, under insurance policies reasonably satisfactory to Landlord
(certificates of which shall be delivered to Landlord as set forth above in
Section 13.e). Tenant hereby releases Landlord from any obligation to insure the
foregoing items and from any liability for loss of or damage to such items,
regardless of cause. Landlord shall be named the loss payee of all such
insurance covering Alterations other than Removable Trade Fixtures, provided,
however, that Landlord shall be obligated to disburse proceeds from any such
insurance to the extent required by and in accordance with the provisions of
Section 11 above. Landlord shall not be the loss payee on any such insurance
covering the Portable Equipment.
i. Earthquake and Flood Insurance. In addition to any other insurance
policies carried by Landlord in connection with the Building, Landlord may elect
to procure and maintain in full force and effect during the Term with respect to
the Building a policy of earthquake/volcanic action and flood and/or surface
water insurance, including rental value insurance against abatement or loss of
rent in the case of damage or loss covered under the earthquake/volcanic and
flood and/or surface water insurance, in an amount up to [...***...] of the full
replacement cost (including debris removal and demolition) of the Building.
14. Assignment or Sublet.
a. Tenant shall not assign this Lease or sublet the Premises or any
portion thereof without the prior written consent of Landlord in each instance,
which consent shall not, subject to Landlordis rights under clause (i) below, be
unreasonably withheld. If Tenant desires to assign this Lease or to sublet the
Premises, or any part thereof, Tenant shall give to Landlord written notice of
its intent at least sixty (60) days in advance of the date on which Tenant
desires to assign or sublet the Premises, which notice shall designate the terms
of the proposed assignment or sublet, the identity of the proposed assignee or
sublessee, and shall be accompanied by financial statements of such proposed
assignee or sublessee and such other information regarding such party and its
business and reputation as shall be required by Landlord to evaluate the
proposed assignment or sublet. Landlord shall have thirty (30) days after
receipt
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of Tenant's written notice and the above specified information within which to
notify Tenant in writing that Landlord elects to (i) consent to the proposed
assignment or sublet as described in Tenant's notice, or (ii) reasonably refuse
to consent to Tenantis proposed assignment or sublet, stating the reasons for
such refusal. If Landlord fails to notify Tenant in writing of its election
within the thirty (30) day period, Landlord shall be deemed to have made the
election in clause (ii) above. No consent by Landlord to any assignment or
sublet shall be deemed to be a consent to a use not permitted under this Lease,
to any act in violation of this Lease or to any subsequent assignment or sublet.
No assignment or sublet by Tenant shall relieve Tenant of any liability
theretofore or thereafter arising under this Lease. Any attempted assignment or
sublet by Tenant in violation of the terms and covenants of this Section shall
be void.
b. Processing Expenses. Tenant shall pay to Landlord, as Landlord's
cost of processing each proposed assignment or subletting (whether or not the
same is ultimately approved by Landlord or consummated by Tenant), an amount
equal to the sum of (i) Landlord's reasonable attorneys' and other professional
fees, plus (ii) the sum of $[...***...] for the cost of Landlord's
administrative, accounting and clerical time (collectively, "Processing Costs").
Notwithstanding anything to the contrary herein, Landlord shall not be required
to process any request for Landlord's consent to an assignment or subletting
until Tenant has paid to Landlord the amount of Landlord's estimate of the
Processing Costs. When the actual amount of the Processing Costs is determined,
it shall be reconciled with Landlord's estimate, and any payments or refunds
required as a result thereof shall promptly thereafter be made by the parties.
c. Consideration to Landlord. In the event of any assignment or
sublease, whether or not requiring Landlord's consent, Landlord shall be
entitled to receive, as additional rent hereunder, [...***...] of any
consideration (including, without limitation, payment for leasehold improvements
(including the Tenant Improvements or any other Alterations) in excess of the
Assignment or Subletting Costs (as defined and amortized as set forth below)
paid by the assignee or subtenant for the assignment or sublease and, in the
case of a sublease, Tenant shall pay to Landlord on a monthly basis the excess
of the amount of rent and other consideration paid for the sublet space by the
subtenant over the amount of Monthly Base Rent under Section 4 above, Operating
Expenses under Section 5 above, and Assignment or Subletting Costs (amortized as
set forth below), attributable to the sublet space for the corresponding month.
"Assignment or Subletting Costs" shall mean, (i) on an amortized basis over the
term of the sublease or assignment, any brokerage commissions paid by Tenant in
connection with the subletting or assignment (not to exceed commissions
typically paid in the market at the time of such subletting or assignment),
Tenant's reasonable costs of advertising the space for sublease or assignment
and any improvement allowance paid by Tenant to the subtenant or assignee or any
improvement costs paid by Tenant solely to prepare the space for the assignment
or sublet, and (ii) [...***...], provided that, as a condition to Tenant
recapturing the Assignment or Subletting Costs, Tenant shall provide to
Landlord, within sixty (60) days of Landlord's execution of Landlord's consent
to the assignment or subletting, a detailed accounting of the Assignment or
Subletting Costs and supporting documents, such as receipts and construction
invoices. Upon Landlord's request, Tenant shall direct any subtenant or assignee
to pay directly to Landlord the amounts due to it pursuant to this Section 14.c.
on account of such sublease or assignment. If there is more than one sublease
under this Lease, the amounts (if any) to be paid by Tenant to Landlord pursuant
to this Section 14.c. shall be separately calculated for each sublease and
amounts due Landlord with regard to any one sublease may not be offset against
rental and other consideration pertaining to or due
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under any other sublease. For purposes of clause (ii) above, the [...***...]*
shall be included in the Assignment or Subletting Costs. For purposes of the
amortization in clauses (i) and (ii) above, such amortization shall be at an
interest rate per annum equal to [...***...] percentage points over the Treasury
Rate charged at the time such costs are paid by Tenant.
d. Documentation. No permitted assignment or subletting by Tenant shall
be effective until there has been delivered to Landlord a fully executed
counterpart of the assignment or sublease which expressly provides that (i) in
the case of a sublease, the subtenant may not assign its sublease or further
sublet the sublet space without Landlord's prior written consent, (ii) in the
case of an assignment, the assignee assumes all of Tenant's obligations under
this Lease arising on or after the date of the assignment, and (iii) in the case
of a sublease, the subtenant agrees to be and remain jointly and severally
liable with Tenant to Landlord for the payment of Rent pertaining to the sublet
space in the amount set forth in the sublease, and for the performance of all of
the terms and provisions of this Lease pertaining to the sublet space. In
addition to the foregoing, no assignment or sublease by Tenant shall be
effective until there has been delivered to Landlord a fully executed
counterpart of Landlord's consent to assignment or sublease form, as applicable.
The failure or refusal of a subtenant or assignee to execute any such instrument
shall not release or discharge the subtenant or assignee from its liability as
set forth above. Notwithstanding the foregoing, no subtenant or assignee shall
be permitted to occupy the Premises unless and until such subtenant or assignee
provides Landlord with certificates evidencing that such subtenant or assignee
is carrying all insurance coverage required of it under this Lease.
e. No Merger. Without limiting any of the provisions of this Section
14, the voluntary or other surrender of this Lease by Tenant, or a mutual
cancellation by Landlord and Tenant, shall not work a merger, and shall, at the
option of Landlord, terminate all or any existing subleases or subtenancies or,
at the option of Landlord, operate as an assignment to Landlord of any or all
such subleases or subtenancies. If Landlord does elect that such surrender or
cancellation operate as an assignment of such subleases or subtenancies,
Landlord shall in no way be liable for any previous act or omission by Tenant
under the subleases or for the return of any deposit(s) under the subleases that
have not been actually delivered to Landlord, nor shall Landlord be bound by any
sublease modification(s) executed without Landlord's consent or for any advance
rental payment by the subtenant in excess of one month's rent.
f. Indirect Assignments. For purposes of this Section 14, the following
events shall be deemed an assignment or sublease, as appropriate: (i) a transfer
of Control (as defined below) of Tenant or any subtenant or assignee, or any
entity controlling any of them, in a single transaction or a series of related
or unrelated transactions (including, without limitation, by consolidation,
merger, acquisition or reorganization), except that the transfer of outstanding
capital stock or other listed equity interests by persons or parties other than
"insiders" within the meaning of the Securities Exchange Act of 1934, as
amended, through the "over-the-counter" market or any recognized national or
international securities exchange, shall not be included in determining whether
Control has been transferred; (ii) a reduction of Tenant's assets to the point
that this Lease and/or other leases are substantially Tenant's only asset(s); or
(iii) a change or conversion in the form of entity of Tenant, any subtenant or
assignee, or any entity controlling any of them, which has the effect of
limiting the liability of any of the partners, members or other owners of such
entity. "Control" shall mean direct or indirect ownership of 50% or more of all
of the voting stock of a corporation or 50% or more of the voting legal or
equitable interest in any other business entity, or the power to direct the
management and operations of any entity (by equity ownership,
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contract or otherwise). Notwithstanding anything to the contrary contained in
this Lease, any transfer of Control which does not result in a decrease in
Tenant's net worth and does not have a material adverse effect on Tenant's
ability to perform its obligations under this Lease shall not be deemed an
assignment or sublease for purposes of this Section 14, or any other provision
of this Lease.
g. Affiliates; Successors. Notwithstanding anything to the contrary in
Section 14.a., but subject to the other provisions of this Section 14, Tenant
may assign this Lease or sublet the Premises or any portion thereof, without
Landlord's consent, to any partnership, corporation or other entity which
controls, is controlled by, or is under common control with Tenant (control
being defined for such purposes as ownership of 50% or more of all of the voting
stock of a corporation or 50% or more of the voting legal or equitable interest
in any other business entity, and the power to direct the management and
operations of, the relevant entity) (an "Affiliate") or to any partnership,
corporation or other entity resulting from a merger or consolidation with Tenant
or which acquires all or substantially all of Tenant's assets (through a
transfer of assets or equity interests in Tenant) as a going concern and such
assets include substantial assets other than this Lease (a "Successor"),
provided that (i) Landlord receives at least ten (10) days' prior written notice
of the assignment or subletting, in which Tenant shall expressly confirm that
Tenant remains primarily liable (together with the assignee in the event of an
assignment) for all of the obligations of the Tenant under this Lease, (ii) in
the case of an assignment to a Successor, the Successor's net worth is not less
than Tenant's net worth immediately prior to such assignment (or series of
transactions of which such assignment is a part), (iii) in the case of a
subletting or assignment to an Affiliate, the Affiliate remains an Affiliate for
the duration of the subletting or the balance of the term in the event of an
assignment, (iv) Landlord receives a fully executed copy of the assignment or
sublease agreement between Tenant and the Affiliate or Successor at least ten
(10) days prior to the effective date of such assignment or sublease, in which
the Affiliate or Successor, as the case may be, assumes (in the event of an
assignment) all of Tenant's obligations under this Lease, and agrees (in the
event of a sublease) that such subtenant will, at Landlord's election, attorn
directly to Landlord in the event that this Lease is terminated for any reason,
(v) the use of the Premises will not materially change from the use of the
Premises prior to such assignment (or series of transactions of which such
assignment is a part) or subletting, and (vi) in the case of an assignment, the
essential purpose of such assignment is to transfer an active, ongoing business
with substantial assets in addition to this Lease, and the assignment is not a
subterfuge by Tenant to avoid it obligations under this Lease or the
restrictions on assignment and subletting contained herein.
15. Default.
a. Tenant's Default. A material breach of this Lease by Tenant shall
exist if any of the following events (severally, "Event of Default";
collectively, "Events of Default") shall occur: (i) if Tenant shall have failed
to pay Base Rent, Tenant's Percentage Share of Operating Expenses, or any other
sum required to be paid hereunder, including any interest due under Section 3,
within five (5) days after the same is due hereunder; (ii) if Tenant shall have
failed to perform any term, covenant or condition of this Lease except those
requiring the payment of money, and Tenant shall have failed to cure the breach
within thirty (30) days after written notice from Landlord if the breach could
reasonably be cured within the thirty (30) day period; provided, however, if the
failure could not reasonably be cured within the thirty (30) day period, then
Tenant shall not be in default unless it has failed to promptly commence and
thereafter continue to make diligent and reasonable efforts to cure the failure
as soon as practicable as reasonably determined by Landlord; (iii) if Tenant
shall have assigned its assets for the benefit of its creditors; (iv) if the
sequestration of, attachment of, or execution on, any material part of the
property of
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Tenant upon the Premises or on any property essential to the conduct of Tenant's
business upon the Premises shall have occurred, and Tenant shall have failed to
obtain a return or release of the property within thirty (30) days thereafter,
or prior to sale pursuant to any sequestration, attachment or levy, whichever is
earlier; (v) if Tenant shall have failed to continuously and uninterruptedly
conduct its business in the Premises, or shall have abandoned or vacated the
Premises; (vi) if a court shall have made or entered any decree or order
adjudging Tenant to be insolvent, or approving as properly filed a petition
seeking reorganization of Tenant, or directing the winding up or liquidation of
Tenant, and the decree or order shall have continued for a period of thirty (30)
days; (vii) if Tenant shall make or suffer any transfer which constitutes a
fraudulent or otherwise avoidable transfer under any provision of the federal
Bankruptcy Laws or any applicable state law; or (viii) if Tenant shall have
failed to comply with the provisions of Sections 22 or 24 of this Lease within
the time periods stated therein. An Event of Default shall constitute a default
under this Lease.
b. Remedies Upon Tenant's Default. Upon an Event of Default, Landlord
shall have the following remedies, in addition to all other rights and remedies
provided by law, equity, statute or otherwise provided in this Lease, to which
Landlord may resort cumulatively or in the alternative:
(i)Landlord has the remedy described in California Civil Code
Section 1951.4 (a landlord may continue the lease in effect after the tenant's
breach and abandonment and recover rent as it becomes due, if the tenant has the
right to sublet and assign subject only to reasonable limitations), and may
continue this Lease in full force and effect, and this Lease shall continue in
full force and effect as long as Landlord does not terminate Tenant's right to
possession, and Landlord shall have the right to collect Rent when due. During
the period Tenant is in default, Landlord may enter the Premises and relet it,
or any part of it, to third parties for Tenant's account, provided that any Rent
in excess of the Rent due hereunder shall be payable to Landlord. Tenant shall
be liable immediately to Landlord for all costs Landlord incurs in reletting the
Premises, including, without limitation, brokers' commissions, expenses of
cleaning and redecorating the Premises required by the reletting and like costs.
Reletting may be for a period shorter or longer than the remaining Term of this
Lease. Tenant shall pay to Landlord the Rent and other sums due under this Lease
on the dates the Rent is due, less the Rent and other sums Landlord receives
from any reletting. No act by Landlord allowed by this Subsection (i) shall
terminate this Lease unless Landlord notifies Tenant in writing that Landlord
elects to terminate this Lease.
(ii) Landlord may terminate Tenant's right to possession of
the Premises at any time by giving written notice to that effect. No act by
Landlord other than giving written notice to Tenant of such termination shall
terminate this Lease. Acts of maintenance, efforts to relet the Premises or the
appointment of a receiver on Landlord's initiative to protect Landlord's
interest under this Lease shall not constitute a termination of Tenant's right
to possession. On termination, Landlord shall have the right to remove all
personal property of Tenant and store it at Tenant's cost and to recover from
Tenant as damages: (a) the worth at the time of award of unpaid Rent and other
sums due and payable which had been earned at the time of termination; plus (b)
the worth at the time of award of the amount by which the unpaid Rent and other
sums due and payable which would have been payable after termination until the
time of award exceeds the amount of the Rent loss that Tenant proves could have
been reasonably avoided; plus (c) the worth at the time of award of the amount
by which the unpaid Rent and other sums due and payable for the balance of the
Term after the time of award exceeds the amount of the Rent loss that Tenant
proves could be reasonably avoided; plus (d) any other amount necessary to
compensate Landlord for all the detriment proximately caused by Tenant's failure
to perform Tenant's obligations under this Lease, or which, in the ordinary
course of things, would be likely to result therefrom, including,
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without limitation, any costs or expenses incurred by Landlord: (1) in retaking
possession of the Premises, including reasonable attorneys' fees and costs
therefor; (2) maintaining or preserving the Premises for reletting to a new
tenant, including repairs or alterations to the Premises for the reletting; (3)
leasing commissions; (4) any other costs necessary or appropriate to relet the
Premises; and (5) 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 California
Civil Code Section 1951.2 or any other laws of the State of California.
The "worth at the time of award" of the amounts referred
to in Subsections (ii)(a) and (ii)(b) is computed by allowing interest at the
lesser of [...***...] per annum or the maximum rate permitted by law, on the
unpaid Rent and other sums due and payable from the date due through the date of
award. The "worth at the time of award" of the amount referred to in Subsection
(ii)(c) is computed by discounting the amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of award, plus one percent
(1%). Tenant waives redemption or relief from forfeiture under California Code
of Civil Procedure Sections 1174 and 1179, or under any other present or future
law, if Tenant is evicted or Landlord takes possession of the Premises by reason
of any default of Tenant hereunder.
c. Landlord's Default. Landlord shall not be deemed to be in default in
the performance of any obligation required to be performed by Landlord hereunder
unless and until Landlord has failed to perform the obligation within thirty
(30) days after receipt of written notice by Tenant to Landlord specifying the
obligation Landlord has failed to perform; provided, however, that if the nature
of Landlord's obligation is such that more than thirty (30) days are required
for its performance, then Landlord shall not be deemed to be in default if
Landlord shall commence the performance of such obligation within the thirty
(30) day period and thereafter shall diligently prosecute the same to
completion.
16. Landlord's Right to Perform Tenant's Covenants.
If Tenant shall at any time fail to make any payment or perform any
other act on its part to be made or performed under this Lease, Landlord may,
but shall not be obligated to, make the payment or perform any other act to the
extent Landlord may deem desirable and, in connection therewith, pay expenses
and employ counsel. Any payment or performance by Landlord shall not waive or
release Tenant from any obligations of Tenant under this Lease. All sums so paid
by Landlord, and all penalties, interest and costs in connection therewith,
shall be due and payable by Tenant on the next day after any payment by
Landlord, together with interest thereon at the Interest Rate, from that date to
the date of payment thereof by Tenant to Landlord, plus collection costs and
attorneys' fees. Landlord shall have the same rights and remedies for the
nonpayment thereof as in the case of default in the payment of Base Rent.
17. Security Deposit.
Tenant has deposited with Landlord the Security Deposit, in the amount
specified in the Basic Lease Information, as security for the full and faithful
performance of every provision of this Lease to be performed by Tenant. If
Tenant defaults with respect to any provision of this Lease, Landlord may use,
apply or retain all or any part of the Security Deposit for the payment of any
Rent or other sum in default, for the payment of any amount which Landlord may
expend or become obligated to expend by reason of Tenant's default, or for any
loss or damage which Landlord may suffer by reason of Tenant's default;
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provided, however, that the Security Deposit shall not be a measure or
limitation of Landlord's damages or constitute a bar or defense to any of the
Landlordis other remedies under this Lease or at law. If any portion of the
Security Deposit is used or applied, Tenant shall deposit with Landlord, within
ten (10) days after written demand therefor, cash in an amount sufficient to
restore the Security Deposit to its original amount. Landlord shall not be
required to keep the Security Deposit separate from its general funds, and
Tenant shall not be entitled to interest on the Security Deposit. Upon the
expiration or earlier termination of this Lease, and Tenantis fulfillment of all
of its obligations hereunder (including any obligations which survive such
expiration or earlier termination), Landlord shall return the Security Deposit
(or the balance thereof after application as aforesaid) to Tenant.
18. Surrender of Premises.
By taking possession of the Premises, except as otherwise provided
herein, Tenant shall be deemed to have accepted the Premises and the Property in
good, clean and completed condition and repair, subject to all applicable laws,
codes and ordinances. On the Expiration Date or earlier termination of this
Lease, Tenant shall surrender the Premises to Landlord in its condition as of
the applicable Rent Commencement Date, normal wear and tear excepted, provided,
however, that Tenant shall remove from the Premises all of Tenant's Removable
Trade Fixtures and Portable Equipment and any Alterations required to be removed
pursuant to Section 9 of this Lease. Tenant shall repair any damage or perform
any restoration work required by the removal. If Tenant fails to timely remove
any Removable Trade Fixtures, Portable Equipment or Alterations as aforesaid,
Landlord may remove the property and store and/or dispose of the same at
Tenant's expense, including interest at the Interest Rate. If the Premises are
not so surrendered at the termination of this Lease, Tenant shall indemnify
Landlord against all Claims resulting from delay by Tenant in so surrendering
the Premises, including, without limitation, any claims made by any succeeding
tenant, losses to Landlord due to lost opportunities to lease to succeeding
tenants, and attorneys' fees and costs. Tenant shall give written notice to
Landlord at least thirty (30) days prior to vacating the Premises and shall meet
with Landlord for a joint inspection of the Premises at the time of vacating. In
the event of Tenant's failure to give such notice or participate in such joint
inspection, Landlord's inspection at or after Tenant's vacating the Premises
shall conclusively be deemed correct for purposes of determining Tenant's
responsibility for removal of Alterations and repairs and restoration of the
Premises.
19. Holding Over.
If Tenant remains in possession of all or any part of the Premises
after the expiration of the Term or the earlier termination of this Lease
without Landlord's prior written consent, the tenancy shall be a tenancy at
sufferance only and shall not constitute a renewal or extension for any further
term, regardless of whether Landlord shall accept Rent for any such period. In
such event, Base Rent shall be increased in an amount equal to [...***...] of
the Base Rent during the last month of the Term (including any extensions), and
any other sums due under this Lease shall be payable in the amount, and at the
times, specified in this Lease. The tenancy shall be subject to every other
term, condition, covenant and agreement contained in this Lease, except that any
renewal or extension option in favor of Tenant shall not be applicable. No such
increase shall impair Landlordis other rights and remedies against Tenant by
reason of such holding over by Tenant, and Tenant shall vacate the Premises
immediately upon Landlord's request.
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20. Access to Premises.
Tenant shall permit Landlord and its agents to enter the Premises at
all reasonable times, except in the case of an emergency (in which event entry
shall be made when necessary), to inspect the Premises, to post Notices of
Nonresponsibility and similar notices, to show the Premises to interested
parties such as prospective mortgagees, purchasers and tenants to provide any
services required of Landlord hereunder, to make necessary alterations,
additions, improvements or repairs either to the Premises, the Building, or
other premises within the Building, and to discharge Tenant's obligations
hereunder when Tenant has failed to do so within a reasonable time after written
notice from Landlord. No such entry shall give rise to an abatement of Rent
hereunder, constitute a constructive eviction, or otherwise diminish Tenant's
obligations under this Lease. In exercising its rights under this Section 20,
Landlord shall at all times endeavor to minimize interference with Tenant's
operations, to the extent practicable. During the last year of the Term,
Landlord shall have the right to erect on the exterior of the Premises and/or on
the exterior or in the Common Areas of the Building and the Property suitable
signs indicating that the Premises are available for lease.
21. Signs.
The size, design, color, location and other physical aspects of any
sign in or on the Premises shall be subject to the CC&R's, Rules, Landlord's
approval prior to installation, and to all Legal Requirements. The costs of any
permitted sign, and the costs of its installation, maintenance and removal,
shall be at Tenant's sole expense and shall be paid within ten (10) days of
Tenant's receipt of a bill from Landlord for the costs. In no event shall Tenant
be permitted to place any sign, logo or other identification on the exterior of
the Building, in the Buildingis Common Areas (other than on a Building directory
maintained to identify the Buildingis tenants), or upon the Property, or which
is inside the Premises but visible from outside of the Premises (other than upon
the door(s) to the Premises), without Landlord's prior written consent in each
instance.
22. Subordination.
a. Subordinate Nature. Except as provided in Subsection b., this Lease
is subject and subordinate to all ground and underlying leases, mortgages and
deeds of trust which now or may hereafter affect the Property or any portion
thereof, to the CC&R's, and to all renewals, modifications, consolidations,
replacements and extensions of the foregoing, without the necessity of any
further documentation evidencing such subordination. Notwithstanding such
self-operative subordination, within ten (10) days after Landlord's written
request therefor, subject to Section 22.d. below, Tenant shall execute any and
all documents required by Landlord, the lessor under any ground or underlying
lease ("Ground Lessor"), or the holder or holders of any mortgage or deed of
trust ("Holder"), evidencing this Lease to be subordinate to the lien of any
such lease, mortgage or deed of trust, as the case may be. Tenant hereby
irrevocably appoints Landlord as Tenant's attorney-in-fact to execute and
deliver any such instrument in the name of Tenant if Tenant fails to do so
within such time. If the interest of Landlord in the Property or the Building is
transferred to any Ground Lessor or Holder pursuant to or in lieu of proceedings
for enforcement of any such lease, mortgage, or deed of trust, Tenant shall
immediately and automatically attorn to the Ground Lessor or Holder, and this
Lease shall continue in full force and effect as a direct lease between the
Ground Lessor or Holder and Tenant on the terms and conditions set forth herein.
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b. Possible Priority of Lease. If a Ground Lessor or a Holder advises
Landlord that it desires or requires this Lease to be prior and superior to a
lease, mortgage or deed of trust, Landlord may notify Tenant. Within seven (7)
days of Landlord's notice, Tenant shall execute, have acknowledged and deliver
to Landlord any and all documents or instruments, in the reasonable form
presented to Tenant, which Landlord, Ground Lessor or Holder deems necessary or
desirable to make this Lease prior and superior to the lease, mortgage or deed
of trust.
c. Lease Modification. If, in connection with obtaining financing for
the Property or any portion thereof, any Holder or Ground Lessor shall request
reasonable modification to this Lease as a condition to such ground lease or
financing, Tenant shall execute and deliver to Landlord, within ten (10) days of
Landlord's request, any such modification agreement so requested, provided such
modifications do not adversely affect Tenant's rights or increase Tenant's
obligations hereunder.
d. Nondisturbance Agreement. Prior to the date on which Landlord
commences pouring the foundations for the first Building to be located on the
Property, Landlord shall deliver to Tenant a subordination, non-disturbance and
attornment agreement from each Ground Lessor and Holder existing as of such date
in form reasonably required by such party and reasonably acceptable to Tenant.
If Landlord fails to timely deliver such agreements, Tenant may terminate this
Lease by notice to Landlord within ten (10) days thereafter. As a condition to
subordination of this Lease to any Superior Interest arising after such date,
Landlord shall deliver to Tenant, and Tenant agrees to execute, a subordination,
non-disturbance and attornment agreement from the applicable Ground Lessor or
Holder in form reasonably required by such party and reasonably acceptable to
Tenant.
23. Transfer of the Property.
Upon transfer of the Property and assignment of this Lease, and
assumption by the purchaser or assignee of the obligations of Landlord
thereafter arising under this Lease, Landlord shall be entirely freed and
relieved of all liability for such obligations, and if Landlord shall transfer
the Security Deposit to the transferee of Landlordis interest in the Real
Property, Landlord shall be released from all liability for the Security
Deposit. Tenant shall attorn to any entity purchasing or otherwise acquiring the
Premises at any sale or other proceeding.
24. Estoppel Certificates; Financial Statements.
Within ten (10) days following written request by Landlord from time to
time throughout the Term, Tenant shall execute and deliver to Landlord an
estoppel certificate in the form prepared by Landlord. The certificate shall:
(i) certify that this Lease is unmodified and in full force and effect or, if
modified, state the nature of the modification and certify that this Lease, as
so modified, is in full force and effect, and the date to which the Rent and
other charges are paid; (ii) acknowledge that there are not, to Tenant's best
knowledge, any uncured defaults on the part of Landlord hereunder, or if there
are uncured defaults on the part of the Landlord, state the nature of the
uncured defaults; and (iii) set forth such other matters regarding this Lease as
may be required either by Landlord, any existing or prospective Ground Lessor or
Holder, or a prospective purchaser of the Property from Landlord. At the request
of Landlord from time to time during the Term, Tenant shall provide to Landlord
its current financial statements or other information setting forth Tenant's
financial condition and net worth. If Tenant is a publicly traded corporation,
Tenant may satisfy its obligations under the preceding sentence by delivering to
Landlord Tenant's then most recent publicly available financial statements.
Landlord shall use such documentation solely for purposes of this Lease and in
connection with the ownership, financing,
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management and disposition of the Real Property.
25. Mortgagee Protection.
In the event of any default on the part of Landlord, Tenant will give
notice by registered or certified mail to each Ground Lessor and Holder whose
identity has been disclosed to Tenant, and shall offer the Ground Lessor or
Holder a reasonable opportunity after such notice (but in no event less than
thirty (30) days) to cure the default, including time to obtain possession of
the Property or the Premises by lease termination, power of sale or a judicial
foreclosure (as applicable), if such should prove necessary to effect a cure. In
no event shall any Ground Lessor or Holder in any way or to any extent be: (a)
liable for any act or omission of any prior Landlord in contravention of any
provision of this Lease; or (b) subject to any offsets, claims or defenses which
Tenant might have against any prior Landlord; or (c) bound by any Rent which
Tenant might have paid for more than thirty (30) days in advance to any prior
Landlord; or (d) bound by any agreement or modification of this Lease made
without such Ground Lessor's or Holder's written consent. Tenant agrees that if
any Ground Lessor or Holder acquires possession of the Premises or title to the
Property as a result of termination of its ground lease or foreclosure of such
Holder's deed of trust or other security instrument, as applicable, the
acceptance of a lease surrender or deed in lieu of such foreclosure, or
otherwise, the provisions of Section 36 below shall be applicable to liability
of such Ground Lessor or Holder as successor Landlord under this Lease.
26. Attorneys' Fees.
If either party shall bring any action or legal proceeding for damages
for an alleged breach of any provision of this Lease, to recover rent or other
sums due, to terminate the tenancy of the Premises or to enforce, protect or
establish any term, condition or covenant of this Lease or right of either
party, the prevailing party shall be entitled to recover, as a part of the
action or proceedings, or in a separate action brought for that purpose,
reasonable attorneys' fees and court costs as may be fixed by the court or jury.
The prevailing party shall be the party which secures a final judgment in its
favor, provided that if the party bringing any action shall dismiss the same
without the consent of the other party, the other party shall be deemed the
prevailing party.
27. Brokers.
Tenant warrants and represents that it has had no dealings with any
real estate broker or agent in connection with the negotiation of this Lease,
except for any brokers(s) specified in the Basic Lease Information, and that it
knows of no other real estate broker or agent who is or might be entitled to a
fee, commission or other compensation in connection with this Lease. Tenant
shall indemnify and hold harmless Landlord from and against any and all
liabilities or expenses (including reasonable attorneys' fees and costs) arising
out of claims made by any other broker or individual for a fee, commission or
other compensation resulting from this Lease.
28. Parking.
Tenant shall have the right to park in the Buildings' parking
facilities, in common with other tenants of the Buildings, upon such terms and
conditions as may from time to time be established by Landlord. There shall be
no charge for any portion of the parking facilities which is not reserved.
Tenant
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shall have the right to use [...***...] parking spaces on the Property per
[...***...] rentable square feet of the Premises set forth in the Basic Lease
Information (as rounded down to the nearest whole space). Tenant agrees not to
use in excess of such number of parking spaces and further agrees to cooperate
with Landlord and other tenants in the use of the parking facilities. Landlord
reserves the right, in its absolute discretion, to determine whether the parking
facilities are becoming crowded and to allocate and assign parking spaces among
Tenant and the other tenants. Landlord shall not be liable to Tenant, nor shall
this Lease be affected, if any parking is impaired by moratorium, initiative,
referendum, law, ordinance, regulation or order passed, issued or made by any
governmental or quasi-governmental body or by fire or other casualty.
29. Utilities and Services.
Tenant shall arrange for all telephone, water, gas, electricity and
other power and utilities which it shall require in connection with its use or
occupancy of the Premises and shall pay for the same, together with any taxes,
penalties, surcharges or the like pertaining thereto. Landlord shall have no
obligation to furnish any utilities or services to the Premises or any equipment
providing for the same. Without limitation, Tenant shall be solely responsible
for providing such heating, ventilation and air conditioning ("HVAC") to the
Premises as Tenant shall require for the comfortable occupancy thereof. Any
equipment or systems which Tenant shall require in order to supply HVAC shall be
subject to the provisions of Section 9 above. Tenant shall obtain, at its
expense all electric light bulbs, ballasts and tubes as it shall require for the
Premises. If any of the foregoing utilities or services are not separately
metered to Tenant, Tenant shall pay a reasonable proportion, as determined by
Landlord, of all charges jointly serving the Premises and other premises.
Landlord shall not be liable for any damages directly or indirectly resulting
from nor shall the Base Rent, Operating Expenses or any other monies owed by
Tenant to Landlord under this Lease be abated or reduced by reason of (a) the
installation, use or interruption of use of any equipment used in connection
with the furnishing of any of the foregoing utilities and services, (b) failure
to furnish or delay in furnishing any such utilities or services for any reason
whatsoever, or (c) the limitation, curtailment, rationing or restriction on use
of water, electricity, gas or any other form of energy or any other service or
utility whatsoever serving the Premises or the Real Property. Landlord shall be
entitled to cooperate voluntarily and in a reasonable manner with the efforts of
national, state or local government agencies or utility suppliers in reducing
energy or other resource consumption, provided that the majority of the owners
of comparable business parks in the Comparable Market are also so cooperating.
The obligation to make services available hereunder shall be subject to the
limitations of any such voluntary, reasonable program.
30. Intentionally Deleted.
31. Acceptance.
Delivery of this Lease, duly executed by Tenant, constitutes Tenantis
offer to lease the Premises as set forth herein, and under no circumstances
shall such delivery be deemed to create an option or reservation to lease the
Premises for the benefit of Tenant. This Lease shall become effective and
binding only upon execution hereof by Landlord and delivery of a signed copy to
Tenant. If Landlord does not accept the Tenant's offer, any sums delivered by
Tenant with its offer shall be returned to Tenant.
32. Use of Building Name.
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Tenant shall not employ the name of the Building in the name or title
of its business or occupation, or for any other purpose, except to identify the
address of the Building, without Landlord's prior written consent, which consent
Landlord may withhold in its sole discretion. Landlord reserves the right to
change the name of the Building without Tenant's consent and without any
liability to Tenant.
33. Recording.
Neither Landlord nor Tenant shall record this Lease, nor a short form
memorandum of this Lease, without the prior written consent of the other.
34. Quitclaim.
Upon any termination or expiration of this Lease pursuant to its terms,
Tenant, at Landlord's request, shall execute, have acknowledged and deliver to
Landlord a quitclaim deed of all Tenant's interest in the Premises, Building and
Property created by this Lease.
35. Notices.
Any notice, demand or request required or desired to be given under
this Lease shall be in writing sent to the address of the party specified in
this Lease, and shall be given by hand delivery, electronic mail (e.g.,
telecopy), overnight courier service (e.g. Federal Express), or the United
States mail, registered or certified, the postage prepaid. All notices shall be
deemed to have been given when received at the address of the party to which it
has been sent (or when such receipt is refused). As of the date of execution of
this Lease, the addresses of Landlord and Tenant are as specified in the Basic
Lease Information. Either party may change its address by giving notice of the
change in accordance with this Section.
36. Landlord's Exculpation.
The term "Landlord," as used in this Lease, shall mean only the owner
or owners (or lessee or lessees under any ground or underlying lease) of the
Property at the time in question. Notwithstanding any other provision of this
Lease, the liability of Landlord for its obligations under this Lease is limited
solely to Landlord's interest in the Property as the same may from time to time
be encumbered, and no personal liability shall at any time be asserted or
enforceable against any other assets of Landlord or against the constituent
shareholders, partners or other owners of Landlord, or the directors, officers,
employees and agents of Landlord or such constituent shareholder, partner or
other owner, on account of any of Landlord's obligations or actions under this
Lease. Notwithstanding any other provision of this Lease, Landlord shall not be
liable for any consequential damages or interruption or loss of business, income
or profits, nor shall Landlord be liable for loss of or damage to artwork,
currency, jewelry, bullion, unique or valuable documents, securities or other
valuables, or for other property not in the nature of ordinary fixtures,
furnishings and equipment. Wherever in this Lease Tenant (a) releases Landlord
from any claim or liability, (b) waives or limits any right of Tenant to assert
any claim against Landlord or to seek recourse against any property of Landlord
or (c) agrees to indemnify Landlord against any matters, the relevant release,
waiver, limitation or indemnity shall run in favor of and apply to Landlord, the
constituent shareholders, partners or other owners of Landlord, and the
directors, officers, employees and agents of Landlord and each such constituent
shareholder, partner or other owner. In no event shall any shareholder, partner,
member, officer, director or other constituent of Landlord or its direct or
indirect constituents ever be personally liable for Landlord's obligations or
liability under this Lease.
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37. Additional Structures.
Any diminution or interference with light, air or view by any structure
which may be erected on land adjacent to the Building shall in no way alter this
Lease or impose any liability on Landlord.
38. Consents and Approvals.
Wherever the consent, approval, judgment or determination of Landlord
is required or permitted under this Lease, except as expressly provided herein
Landlord may exercise its sole discretion in granting or withholding such
consent or approval or in making such judgment or determination. Whenever Tenant
requests Landlord to take any action or give any consent or approval, Tenant
shall reimburse Landlord for all of Landlord's costs incurred in reviewing the
proposed action or consent (whether or not Landlord consents to any such
proposed action), including, without limitation, reasonable attorneys' or
consultants' fees and expenses, within ten (10) days after Landlord's delivery
to Tenant of a statement of such costs. If it is determined that Landlord failed
to give its consent or approval where it was required to do so under this Lease,
Tenant's sole remedy will be an order of specific performance or mandatory
injunction of the Landlord's agreement to give its consent or approval. The
review and/or approval by Landlord of any item shall not impose upon Landlord
any liability for accuracy or sufficiency of any such item or the quality or
suitability of such item for its intended use. Any such review or approval is
for the sole purpose of protecting Landlord's interest in the Real Property, and
neither Tenant nor any Tenant Party nor any person or entity claiming by,
through or under Tenant, nor any other third party shall have any rights
hereunder by virtue of such review and/or approval by Landlord.
39. Renewal Option.
a. Tenant shall have the option to renew this Lease for one (1)
additional term of five (5) years, commencing upon expiration of the initial
Term. Such renewal option must be exercised, if at all, by written notice given
by Tenant to Landlord not later than [...***...] prior to expiration of the
initial Term. Notwithstanding the foregoing, this renewal option shall be null
and void and Tenant shall have no right to renew this Lease if on the date
Tenant exercises such renewal option or on the date immediately preceding the
commencement date of the renewal period (i) the original Tenant named under this
Lease in the Basic Lease Information is not in occupancy of at least [...***...]
of the entire Premises then demised hereunder or such Tenant does not intend to
continue to occupy at least [...***...] of the entire Premises then demised
hereunder (but intends to assign this Lease or sublet the Premises in whole or
in part such that such occupancy requirement will not be met), or (ii) Tenant is
in default of any of its obligations under this Lease. For purposes of this
Lease, the term "occupancy" means physical occupancy for the conduct of Tenant's
business, and, without limitation, Tenant shall not be deemed in occupancy of
any space it has subleased or otherwise vacated.
If Tenant exercises such renewal option, then during the
renewal term all of the terms and conditions set forth in this Lease as
applicable to the Premises during the initial term shall apply during the
renewal term, except that (i) Tenant shall have no further right to renew this
Lease, (ii) Tenant shall take the Premises in their then "as-is" state and
condition and Landlord shall have no obligation to make or pay for any
improvements to the Premises, and (iii) the monthly Base Rent payable by Tenant
for the Premises shall be the "fair market rent" for the Premises, based upon
the terms of this Lease, as renewed. For purposes of this Section 39, the term
"fair market rent" shall mean the rental rate for comparable space
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under primary lease (and not sublease) to new tenants, taking into consideration
all relevant characteristics of the space, including existing improvements
[...***...], situated in comparable buildings in comparable business parks in
the Comparable Market (as defined in Section 5.b. above), taking into
consideration the then-prevailing ordinary rental market practices with respect
to tenant concessions (if any) (e.g. not offering extraordinary rental,
promotional deals and other concessions to tenants which deviate from what is
the then-prevailing ordinary practice in an effort to alleviate cash flow
problems, difficulties in meeting loan obligations or other financial distress,
or in response to a greater than average vacancy rate). Fair market rent shall
include the periodic rental increases, if any, that would be included for space
leased for the renewal period. The fair market rent shall be mutually agreed
upon by Landlord and Tenant in writing within the thirty (30) calendar day
period commencing three (3) months prior to commencement of the renewal period.
If Landlord and Tenant do not agree upon the fair market rent within said thirty
(30) day period, then the fair market rent shall be established by appraisal in
accordance with the procedures set forth in Exhibit E attached hereto.
b. Notwithstanding anything in the foregoing or in Exhibit E to the
contrary, in no event shall the Base Rent during the renewal period be less than
the Base Rent payable by Tenant for the month immediately preceding the
commencement of the renewal period (without regard to any temporary abatement of
rental then in effect pursuant to the provisions of this Lease).
40. Right of First Offer.
a. Commencing as of [...***...], Tenant shall have a continuing right
of first offer to lease any increment of space of more than [...***...] rentable
square feet in the Property which thereafter becomes "available for lease"
during the Term, subject to the provisions of this Section 40. Without
limitation, an increment of space shall not be deemed "available for lease" if
(i) the tenant under an expiring lease of such space desires to renew or extend
its lease of such space pursuant to the exercise of a right or option to do so
which was granted (A) in such party's lease of such space as originally
executed, or (B) in any amendment adding such space to such party's lease after
such lease was executed, if such space was first offered to Tenant pursuant to
this Section 40 and Tenant did not timely and validly exercise its right to
lease such space, or (ii) if any tenant of the Property has an option or right
of first offer or refusal or other right to lease such space pursuant to the
exercise of a right or option to do so which was granted (A) in such party's
lease of space in the Property as originally executed, or (B) in any amendment
adding space to such party's lease after such lease was executed, if the subject
space is contiguous to such added space, and the added space and the rights to
such subject space were first offered to Tenant pursuant to this Section 40 and
Tenant did not timely and validly exercise its right to lease such space. Each
increment of space as to which Tenant has the foregoing right of first offer is
referred to herein as a "First Offer Increment".
b. Landlord shall give Tenant written notice ("Landlord's Availability
Notice)" of each First Offer Increment within thirty (30) days after such First
Offer Increment becomes available for lease, or, if sooner, within thirty (30)
days after Landlord shall be in a position to estimate when such First Offer
Increment will become available for lease. Landlord's Availability Notice shall
identify the First Offer Increment and specify the availability date (or
estimated availability date) of the First Offer Increment.
c. If Tenant elects to lease the First Offer Increment, Tenant shall so
notify Landlord in writing within ten (10) Business Days after Tenant's receipt
of Landlord's Availability Notice. If Tenant
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does not exercise its right to lease a First Offer Increment within such ten
(10) Business Day period, then for the one (1) year period following Landlord's
Availability Notice (as such period shall be extended, by Landlord's written
notice to Tenant, to conclude any then pending negotiations between Landlord and
a prospective tenant of the First Offer Increment) Landlord shall be released of
its obligation to offer or lease such First Offer Increment to Tenant, Tenant
shall have no rights with respect thereto, and the provisions of this Paragraph
40 shall not again apply to that First Offer Increment unless the First Offer
Increment again becomes "available for lease" or remains "available for lease",
as the case may be, after the expiration of such one (1) year period (as
extended as described above).
d. Upon Tenant's election to lease a First Offer Increment, Landlord
and Tenant shall promptly enter into an amendment of this Lease, adding such
First Offer Increment to the Premises on all the terms and conditions set forth
in this Lease as to the Premises then demised hereunder, except that (i) the
term of the lease to Tenant of such First Offer Increment shall commence upon
the availability date specified in Landlord's Availability Notice (but in no
event sooner than thirty (30) days after the date of Landlord's Availability
Notice) and shall continue coextensively with the remaining Term of this Lease
and any extension thereof, (ii) the initial monthly Base Rent payable by Tenant
for the First Offer Increment shall be the fair market rent for such space, as
defined in Section 39 above (and such rent shall be subject to adjustment at the
same time and in the same manner as the Base Rent for the balance of the
Premises pursuant to Section 4.b. of this Lease), (iii) Tenant's Percentage
Share shall be increased to take into account the First Offer Increment (such
increase to be determined by dividing the rentable square footage of such First
Offer Increment by the rentable square footage of the Buildings (as set forth in
the Basic Lease Information), and (iv) Tenant shall take the First Offer
Increment in its then "as-is" state and condition and Landlord shall have no
obligation to make or pay for any improvements thereto. The fair market rent for
the First Offer Increment shall be mutually agreed upon by Landlord and Tenant
in writing within the thirty (30)-day period commencing with Tenant's notice to
Landlord electing to lease such First Offer Increment, but no sooner than three
(3) months prior to the availability date (or estimated availability date) set
forth in Landlord's Availability Notice. If Landlord and Tenant are unable to
agree upon the fair market rent within such thirty (30)-day period, then the
fair market rent shall be established by appraisal in accordance with the
procedures set forth in Exhibit E to this Lease. If the fair market monthly rent
for a First Offer Increment has not been established prior to the date the First
Offer Increment is to be added to the Premises, then Tenant shall pay as monthly
Base Rent for the First Offer Increment the amount produced by multiplying the
rentable square footage of the First Offer Increment by the Rent Floor (as
defined below) and, if the fair market monthly rent, as subsequently determined,
exceeds the rent paid by Tenant for the First Offer Increment during the period
prior to the date the fair market monthly rent was determined, Tenant shall pay
the deficiency to Landlord within ten (10) days after such determination, and if
the fair market rent, as subsequently determined, is less than the rent so paid
by Tenant, Landlord shall credit Tenant's overpayment against Tenant's next
accruing monthly Rent obligations with respect to the Premises. As used herein,
"Rent Floor" means the Base Rent payable by Tenant (for all of the Premises then
leased hereunder), as calculated on an average basis per rentable square foot of
the Premises, for the full calendar month immediately preceding the calendar
month in which the First Offer Increment is added to the Premises (without
giving effect to any temporary rent abatements then in effect).
e. If Tenant exercises the right of first offer granted herein,
Landlord does not guarantee that the First Offer Increment will be available on
the availability date stated in Landlord's Availability Notice, if the then
existing occupants of the First Offer Increment shall hold-over, or for any
other reason beyond
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Landlord's reasonable control. In such event, as Tenant's sole recourse, the
term of this Lease as to the First Offer Increment shall be delayed until
Landlord legally delivers the same to Tenant.
f. Notwithstanding the foregoing, if as of the date of Tenant's
exercise of its right of first offer, or the date immediately preceding the date
the lease term of the First Offer Increment is to commence, (i) Tenant is in
default of any of its obligations under this Lease, or (ii) the original Tenant
named under this Lease in the Basic Lease Information (A) is not in occupancy of
at least [...***...] of the entire Premises then demised hereunder, or (B) does
not intend to remain in such occupancy (but intends to assign this Lease or
sublet the Premises in whole or in part such that such occupancy requirement
will not be met), or (C) does not intend to occupy the entire First Offer
Increment, following the commencement of the lease term of the First Offer
Increment, then in any such case Tenant shall have no right to lease the First
Offer Increment and Tenant's exercise of its right of first offer as to such
First Offer Increment shall be null and void. Tenant's right of first offer
shall not be applicable during the last one (1) year of the Term unless and
until Tenant shall validly exercise its renewal option, in which case Tenant's
right of first offer shall terminate one (1) year prior to the expiration of the
renewal term (unless earlier terminated as provided herein).
41. Expansion Option.
a. Tenant shall have an option (the "Expansion Option") to lease the
ground floor of Building C of the Property (the "Expansion Space"), as shown on
Exhibit A attached hereto, pursuant to the terms and conditions of this Section
41. Tenant shall exercise the Expansion Option, if at all, by written notice
("Tenant's Expansion Notice") thereof to Landlord on or prior to January 1,
2000. If Tenant does not timely exercise the Expansion Option, it shall expire
and be of no force or effect, Landlord shall be released of its obligation to
offer or lease the Expansion Space to Tenant pursuant to this Section 41, Tenant
shall have no rights with respect thereto pursuant to this Section 41, and the
provisions of this Section 41 shall terminate.
b. Upon Tenant's timely exercise of the Expansion Option, Landlord and
Tenant shall promptly enter into an amendment of this Lease, adding such
Expansion Space to the Premises on all the terms and conditions set forth in
this Lease as to the Premises then demised hereunder, except that (i) the term
of the lease to Tenant of the Expansion Space shall commence on the date (the
"Expansion Space Commencement Date") specified in Tenant's Expansion Notice, but
in no event shall such date be earlier than thirty (30) days after the
Commencement Date for the Phase II Premises or later than [...***...], and,
subject to Section 41.c. below, Landlord shall deliver the Expansion Space to
Tenant on such date with Landlord's Base Shell Work completed therein, (ii) the
initial monthly Base Rent payable by Tenant for the Expansion Space shall
commence [...***...] days after the Expansion Space Commencement Date, and shall
be the fair market rent for such space, as defined in Section 39 above, except
that such Base Rent commencement date and the other provisions of this Section
41 applicable to the Expansion Space shall be taken into account in determining
such fair market rent (and such rent shall be subject to adjustment at the same
time and in the same manner as the Base Rent for the balance of the Premises
pursuant to Section 4.b. of this Lease), (iii) Tenant's Percentage Share shall
be increased to take into account the Expansion Space (such increase to be
determined by dividing the rentable square footage of such Expansion Space by
the rentable square footage of the Buildings (as set forth in the Basic Lease
Information). Without limitation of the foregoing, (x) the provisions of Section
4.a. above regarding the commencement of Base Rent shall apply to the Expansion
Space, with each reference therein to a Phase
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being deemed a reference to the Expansion Space, and (y) the provisions of
Exhibit B to this Lease governing the Tenant Improvements shall fully apply to
the Expansion Space, except that Landlord's Contribution with respect to the
Expansion Space shall be $[...***...] (which equals $[...***...] per agreed
rentable square foot of the Expansion Space). The fair market rent for the
Expansion Space shall be mutually agreed upon by Landlord and Tenant in writing
within the thirty (30)-day period commencing three (3) months prior to the
Expansion Space Commencement Date. If Landlord and Tenant are unable to agree
upon the fair market rent within such thirty (30)-day period, then the fair
market rent shall be established by appraisal in accordance with the procedures
set forth in Exhibit E to this Lease. If the fair market monthly rent for the
Expansion Space has not been established prior to the date Base Rent commences
with respect thereto, then Tenant shall pay as monthly Base Rent for the
Expansion Space the amount produced by multiplying the rentable square footage
of the Expansion Space by the Rent Floor (as defined below) and, if the fair
market monthly rent, as subsequently determined, exceeds the rent paid by Tenant
for the Expansion Space during the period prior to the date the fair market
monthly rent was determined, Tenant shall pay the deficiency to Landlord within
ten (10) days after such determination, and if the fair market rent, as
subsequently determined, is less than the rent so paid by Tenant, Landlord shall
credit Tenant's overpayment against Tenant's next accruing monthly Rent
obligations with respect to the Premises. As used herein, "Rent Floor" means the
Base Rent payable by Tenant (for all of the Premises then leased hereunder), as
calculated on an average basis per rentable square foot of the Premises, for the
full calendar month immediately preceding the calendar month in which the Base
Rent for the Expansion Space commences (without giving effect to any temporary
rent abatements then in effect).
c. If Tenant exercises the Expansion Option, Landlord does not
guarantee that the Expansion Space will delivered to Tenant in the condition
required hereunder on the date specified in Tenant's Expansion Notice pursuant
to Section 41.b. above. In the event of any delivery after such date, as
Tenant's sole recourse, the term of this Lease as to the Expansion Space shall
be delayed until the date Landlord legally delivers the same to Tenant with
Landlord's Base Shell Work completed therein.
d. Notwithstanding the foregoing, if as of the date of Tenant's
exercise of its Expansion Option, or the date immediately preceding the date the
lease term of the Expansion Space is to commence, (i) Tenant is in default of
any of its obligations under this Lease, or (ii) the original Tenant named under
this Lease in the Basic Lease Information (A) is not in occupancy of at least
[...***...] of the entire Premises then demised hereunder, or (B) does not
intend to remain in such occupancy (but intends to assign this Lease or sublet
the Premises in whole or in part such that such occupancy requirement will not
be met), or (C) does not intend to occupy the entire Expansion Space, following
the commencement of the lease term of the Expansion Space, or (D) has not leased
the Phase II Premises pursuant to this Lease, then in any such case Tenant shall
have no right to lease the Expansion Space and Tenant's exercise of the
Expansion Option shall be null and void.
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42. Licensed Area.
a. As used herein, the iLicensed Areai shall mean a portion of the
Common Areas between Buildings B and C, containing approximately 1,700 square
feet, in a location reasonably approved by Landlord; the "Generator" shall mean
a [...***...] reasonably approved by Landlord; and the "Generator Facilities"
shall mean the [...***...], all as reasonably approved by Landlord, together
with any fuel or other Hazardous Materials contained therein. The Licensed Area
shall not be part of the Premises for any purposes of the Lease; however,
certain provisions of the Lease shall apply to the Licensed Area as if it were
part of the Premises, as more particularly set forth below.
Landlord hereby grants to Tenant, as an appurtenance to the
Premises, and for the term of the Lease (subject to earlier termination as
hereinafter set forth), the right to use the Licensed Area, for the purpose of
installing, maintaining and operating the Generator and the Generator
Facilities, all in accordance with the remaining provisions of this Section 42.
Tenant accepts the Licensed Area in its "as-is" condition. Landlord makes no
representations respecting the Licensed Area or its suitability for operation of
the Generator Facilities.
Tenant shall have the right to install the Generator
Facilities in accordance with plans and specifications approved by Landlord,
such approval not to be unreasonably withheld. Such installation (and any
subsequent maintenance or testing activities with respect to the Generator
Facilities) shall be governed by the provisions of Section 9 of this Lease (with
each reference therein to the Premises being deemed a reference to the Licensed
Area), except that if the Generator Facilities are installed concurrently with
the Tenant Improvements, the provisions of Exhibit B shall apply thereto to the
extent inconsistent with said Section 9. Landlord expressly reserves the right
to require that any installation, maintenance or testing activities be conducted
at times other than normal business hours of the Property, so as to avoid
interference with the activities of other occupants of the Property. Landlord
also reserves the right to require Tenant to install and maintain throughout the
term of the Lease such landscaping in or about the Licensed Area as Landlord
shall require to hide the Generator Facilities from view and otherwise create a
sightly condition consistent with the character of the balance of the Property.
Tenant shall not commence any installation or maintenance
activities (or engage in any use of the Generator) until Tenant has demonstrated
to Landlordis reasonable satisfaction that Tenant has obtained (and that there
remain in full force and effect) all necessary governmental permits and
approvals (including, without limitation, electrical wiring permits, fuel
storage tank permits and the like) for the Generator Facilities. If at any time
during the term of the Lease such permits or approvals shall expire and not be
renewed, or if applicable laws, orders, rules, regulations or ordinances shall
otherwise not permit the Generator Facilities to remain or be operated in the
Licensed Area, or if there shall be any release of Materials upon the Licensed
Area or any other portion of the Property (or upon adjacent lands) arising out
of or in connection with the Generator Facilities, Tenant shall promptly remove
the Generator Facilities in accordance with the provisions set forth below
applicable to Tenant's removal of the Generator Facilities upon the expiration
or earlier termination of the Lease.
The provisions of Section 13.a. of this Lease shall fully
apply to Tenant's use of the Licensed Area and the installation, maintenance and
operation of the Generator Facilities, all as if each reference in said Section
13.a. to the "Premises" were a reference to the "Licensed Area". Without
limitation, the parties recognize that wiring, conduits and other elements of
the Generator Facilities may
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run from the Licensed Area through other Common Areas and/or tenanted areas of
the Property; and Tenant expressly agrees to indemnify, defend and save harmless
Landlord and the other Indemnitees from and against all loss, costs, penalties,
liability, damage and claims of whatever nature arising (or claimed to have
arisen) from the installation, maintenance and operation of such wires, conduits
and other facilities.
Tenant shall have the right to operate the Generator
Facilities so as to provide electrical power to the Premises. However, (i) such
right shall be exercised only when (and for so long as) the supply of electrical
service to the Premises in the ordinary manner has been interrupted or as
necessary to test the Generator Facilities, and (ii) Tenant shall not sell the
electrical services of the Generator Facilities to any other party or otherwise
use the Generator Facilities to provide electrical services to any other party
or to any other portion of the Property.
A fire or other casualty or a taking by eminent domain
affecting the Licensed Area or the Generator Facilities shall not affect the
rights and obligations of Tenant under the Lease, and the Lease shall remain in
full force and effect, without any abatement of any amounts payable to Landlord
thereunder. Landlord shall be entitled to all compensation, damages, income,
rent awards and interest thereon whatsoever which may be paid or made in
connection with any taking of the Licensed Area, and Tenant shall have no claim
against Landlord or any governmental authority for the value of any unexpired
term of its rights to the Licensed Area; provided, however, that the foregoing
shall not prohibit Tenant from prosecuting a separate claim against the taking
authority for an amount separately designated for the Generator Facilities, so
long as any award to Tenant will not reduce the award to Landlord.
Throughout the Term, Tenant shall maintain the Generator
Facilities (including the fencing and landscaping surrounding the Licensed Area)
in a safe, operable and sightly condition, and observe all rules and regulations
promulgated by Landlord pursuant to this Lease, as applicable to the Generator
Facilities and Tenant's use and maintenance thereof. The Generator Facilities
shall be and remain Tenant's property throughout the term of the Lease, and upon
the expiration or earlier termination of the Lease, Tenant shall remove the
Generator Facilities, and shall restore the Licensed Area and all other portions
of the Property affected by the installation and removal of the Generator
Facilities, to substantially the condition which existed prior to such
installation and removal.
Landlord shall have the right, from time to time, as required
by applicable Legal Requirements, to require Tenant to temporarily or
permanently relocate the Licensed Area to any other location within the Common
Areas designated by Landlord. Such right shall be exercised by not less than one
hundred eighty (180) days prior written notice to Tenant, provided, however that
if applicable Legal Requirements shall require such relocation to be performed
prior to the expiration of one hundred eighty (180) days after Landlord's
notice, then Landlord's required notice period shall be shortened to the longest
period allowable to comply with such Legal Requirements. If such right shall be
exercised, then Tenant, at its sole cost and expense, shall relocate the
Generator and all other Generator Facilities to the location designated by
Landlord on or prior to the expiration of such thirty (30) day period (or such
longer period as Landlord shall set forth in its relocation notice). Such
relocation shall be performed by Tenant in accordance with all provisions of
this Lease applicable to the installation of the Generator Facilities in their
original location. Tenant acknowledges that during any such relocation the
Generator Facilities will be unavailable for Tenant's use, and Tenant releases
Landlord and the other Indemnitees from any and all claims arising out of such
unavailability.
If Landlord closes the Building and calls for its evacuation,
or suggests that the Building be evacuated for any reason, including because of
an electrical failure, and if one or more employee, agent,
35
contractor, or other person acting on behalf of or at the request of Tenant or
Tenant's affiliate(s) ("Tenant's Personnel") remains in or later enters the
Building or the Premises during the evacuation period, then Tenant hereby waives
all claims against Landlord and its constituent owners, agents, employees,
officers and contractors (the "Indemnitees") for any injury incurred by any of
Tenant's Personnel, or injury to property, due in whole or in part to Tenant's
failure to evacuate all of Tenant's Personnel from the Premises and the
Building. Further, Tenant will hold the Indemnitees harmless from and defend and
indemnify them against any and all claims, liabilities, damages or costs,
including reasonable attorney's fees, incurred by them due to injury to person
or property as a direct or indirect result of Tenant's Personnel remaining in
the Premises or the Building during such evacuation period.
To the maximum extent practicable and applicable (but subject
to the other provisions set forth in this Section 42), the obligations of
Tenant, and the rights of Landlord, under the Lease shall be applied to the
Licensed Area, all as if the Licensed Area were included in the Premises.
b. Tenant shall not use any portion of the Licensed Area for the
Handling of Hazardous Materials without the express written prior consent of
Landlord, and then only to the extent that the presence of the Hazardous
Materials is (i) properly licensed and approved by all appropriate governmental
officials and in accordance with all applicable Legal Requirements and (ii) in
compliance with any terms and conditions stated in said prior written approval
by Landlord. Tenant shall promptly provide Landlord with copies of all notices
received by it, including, without limitation, any notice of violations, notice
of responsibility or demand for action from any federal, state or local
authority or official in connection with the presence of Hazardous Materials in
or about the Licensed Area or any other portion of the Property. In the event of
any release of Hazardous Materials upon the Licensed Area or any other portion
of the Property, or upon adjacent lands, if caused by Tenant or any other Tenant
Party, Tenant shall promptly remedy the problem in accordance with all
applicable Legal Requirements. The provisions of Section 8.d. of this Lease,
including, without limitation, Tenant's indemnification obligations thereunder,
shall fully apply to Tenantis use of the Licensed Area and the installation,
maintenance and operation of the Generator Facilities, all as if each reference
in said Section 8.d. to the "Premises" were a reference to the "Licensed Area".
The provisions of this Section 42.b., and the other indemnities granted by
Tenant in this Section 42, shall survive the expiration or earlier termination
of the Lease.
43. General.
a. Captions. The captions and headings used in this Lease are for the
purpose of convenience only and shall not be construed to limit or extend the
meaning of any part of this Lease.
b. Time. Time is of the essence for the performance of each term,
condition and covenant of this Lease.
c. Severability. If any provision of this Lease is held to be invalid,
illegal or unenforceable, the invalidity, illegality, or unenforceability shall
not affect any other provision of this Lease, but this Lease shall be construed
as if the invalid, illegal or unenforceable provision had not been contained
herein.
d. Choice of Law; Construction. This Lease shall be construed and
enforced in accordance with the laws of the State of California. The language in
all parts of this Lease shall in all cases be
36
construed as a whole according to its fair meaning and not strictly for or
against either Landlord or Tenant.
e. Gender; Singular, Plural. When the context of this Lease requires,
the neuter gender includes the masculine, the feminine, a partnership or
corporation or joint venture, and the singular includes the plural.
f. Binding Effect. The covenants and agreements contained in this Lease
shall be binding on the parties hereto and, subject to Section 14 above, on
their respective successors and assigns.
g. Waiver. The waiver of Landlord of any breach of any term, condition
or covenant of this Lease shall not be deemed to be a waiver of the provision or
any subsequent breach of the same or any other term, condition or covenant of
this Lease. The subsequent acceptance of Rent hereunder by Landlord shall not be
deemed to be a waiver of any preceding breach at the time of acceptance of the
payment. No covenant, term or condition of this Lease shall be deemed to have
been waived by Landlord unless the waiver is in writing signed by Landlord.
h. Entire Agreement. This Lease is the entire agreement between the
parties, and supersedes all prior agreements, including letters of intent,
between them, and there are no agreements or representations between the parties
except as expressly set forth herein. Except as otherwise provided herein, no
subsequent change or addition to this Lease shall be binding unless in writing
and signed by the parties hereto.
i. Waiver of Jury. Tenant and Landlord hereby waive any right they may
have to a jury trial in the event of litigation between Tenant and Landlord
pertaining to this Lease. Landlord and Tenant agree that this paragraph
constitutes a written consent to waiver of trial by jury within the meaning of
California Code of Civil Procedure Section 631(a)(2), and Tenant does hereby
authorize and empower Landlord to file this paragraph and or this Lease, as
required, with the clerk or judge of any court of competent jurisdiction as a
written consent to waiver of jury trial.
j. Counterparts. This Lease may be executed in counterparts, each of
which shall be an original, and all of which together shall constitute but one
instrument.
k. Exhibits. The Basic Lease Information and all schedules and exhibits
attached hereto are hereby incorporated herein and made an integral part hereof.
l. Addendum. The Addendum, if any, attached hereto is hereby
incorporated herein and made an integral part hereof.
37
IN WITNESS WHEREOF, the parties have executed this Lease on
the dates set forth below, effective as of the date first above written.
Landlord: Tenant:
SimFirst, L.P., a California Lynx Therapeutics, Inc.,
limited partnership a Delaware corporation
By: Simeon Commercial Properties,
By: /s/ Sam Eletr
-------------------------
By: /s/ Curt Setzer
------------------------- Its: Chief Executive Officer
& Chairman of the Board
Its: Vice President By: /s/ Ed Albini
--------------------------- -------------------------
Its: Chief Financial Officer
38
SCHEDULE 1
BASE RENT
PHASE I:
From the Phase I Rent Commencement Date until the
day before the Phase II Rent Commencement Date: $[...***...]
From the Phase II Rent Commencement Date through
the day before the Expansion Space Rent
Commencement Date or, if the Expansion Option
shall not have been exercised, through
[...***...]: $[...***...]
From the Expansion Space Rent Commencement Date
or, if the Expansion Option shall not have been
exercised, from [...***...], through the
expiration of the [...***...] full calendar month
after the Phase I Rent Commencement Date: $[...***...]
From the first day of the [...***...] full
calendar month after the Phase I Rent Commencement
Date through the expiration of the [...***...]
full calendar month after the Phase I Rent
Commencement Date: $[...***...]
Thereafter: As per Section 4.b.
of the Lease.
PHASE II:
From the Phase II Rent Commencement Date through
the expiration of the [...***...] full calendar
month after the Phase I Rent Commencement Date: $[...***...]
From the first day of the [...***...] full
calendar month after the Phase I Rent Commencement
Date through the expiration of the thirty-sixth
full calendar month after the Phase I Rent
Commencement Date: $[...***...]
Thereafter: As per Section 4.b.
of the Lease.
EXPANSION SPACE: As per Section 4.b.
of the Lease.
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EXHIBIT A
PREMISES DESIGNATION
[MAP GRAPHIC]
EXHIBIT A-1
PROPERTY SITE PLAN
[MAP GRAPHIC]
EXHIBIT B
TENANT IMPROVEMENTS
1. Tenant Improvements.
a. Plans. Improvements shall be constructed in the Premises [n
accordance with this Paragraph 1. Prior to the commencement of any construction
in the Premises by Tenant, Tenant shall furnish to Landlord for Landlord's
review and approval (which approval shall not be unreasonably withheld) detailed
layout plans and finish specifications (the "Space Plans") prepared by an
architect reasonably acceptable to Landlord. The Space Plans shall show all of
the improvements which Tenant desires to be constructed in the Premises, and all
such improvements shall comply with all applicable building codes and other
legal requirements. The Space Plans shall separately note any proposed
structural work or extraordinary or supplemental electrical, plumbing or HVAC
requirements, and shall contain such detail and specifications as would permit a
general contractor to obtain preliminary estimates of the cost of performing all
work shown thereon. The Space Plans shall identify any "Iong4ead" materials (as
described in Paragraph 1.e. below) then known by Tenant or Tenant's architect.
Provided that Landlord shall have received copies of all prior drafts and
interim copies of the proposed Space Plans, Landlord shall respond to the Space
Plans within five (5) Business Days of its receipt thereof. Tenant shall respond
promptly to any reasonable objections of Landlord to the Space Plans and shall
resubmit appropriately revised Space Plans prepared by Tenant's architect within
ten (10) Business Days of Tenant's receipt of Landlord's objections. The Space
Plans, as finally approved in writing by Landlord, shall be referred to herein
as the "Final Space Plans." Within thirty (30) days of the date Landlord
approves in writing the Space Plans, Tenant shall furnish to Landlord for
Landlord's review and approval (which shall not be unreasonably withheld)
working plans and specifications, and a schedule and budget for the construction
(collectively, the "Working Drawings") prepared by Tenant's architect for all of
the improvements which Tenant desires to be constructed in the Premises. The
Working Drawings shall show improvements that conform to the Final Space Plans
(except to the extent specifically noted therein or in accompanying
specifications) and shall be in sufficient detail as to enable the general
contractor for the work to obtain all necessary governmental permits for
construction of all of the improvements and to secure complete bids from
qualified contractors to perform the work for all of the improvements to be
constructed in the Premises. Landlord shall respond to the Working Drawings
within ten (10) Business Days of its receipt thereof. Tenant shall respond
promptly to any reasonable objections of Landlord to the Working Drawings and
shall resubmit appropriately revised Working Drawings prepared by Tenant's
architect within ten (10) Business Days of Tenant's receipt of Landlord's
objections. (The Working Drawings, as approved in writing by Landlord, as
revised by Tenant from time to time with Landlord's written approval in
accordance with the following provisions of this Paragraph 1, are hereinafter
called the "Final Plans", and the improvements to be performed in accordance
with the Final Plans are hereinafter called the "Tenant Improvements").
b. Construction by Tenant's Contractor. Landlord and Tenant acknowledge
that a general contractor selected by Tenant ("Tenant's Contractor") shall
construct the Tenant Improvements. The following provisions shall apply to the
construction:
i. Approval. Tenant's Contractor shall be subject to
Landlord's prior written approval, which approval shall not be unreasonably
withheld or delayed.
ii. Qualifications. Tenant's Contractor shall (I) have
substantial recent experience in the construction of' tenant improvements in
comparable buildings in comparable business parks in the
greater San Francisco Bay Area, (2) be licensed by the State of California (as
evidenced by Tenant's submission to Landlord of' Tenant's Contractor's state
license number), (3) utilize only union labor on the construction of the Tenant
Improvements, (4) have the capacity. to be bonded by a recognized surety company
to assure full performance of the construction contract for the work shown on
the Final Plans (as evidenced by Tenant's submission to Landlord of a commitment
or other writing satisfactory to Landlord issued by a recognized surety company
confirming that Tenant's Contractor is bondable for construction projects having
a contract price not less than the contract price under the construction
contract for the Tenant Improvements), and (5) have the capacity to meet all of
the requirements of Paragraph 1.d.iii. below (as evidenced by Tenant's
submission to Landlord of documentation satisfactory to Landlord).
iii. Requirements. Tenant shall be responsible for Tenant's
Contractor, subcontractors, suppliers and materialmen (A) obtaining Landlord's
prior written approval (which Landlord shall not unreasonably withhold or delay)
of all subcontractors and labor to be utilized in the performance of such
construction work, (B) obtaining all necessary governmental permits and
approvals in connection with all construction work shown on the Final Plans (and
Landlord shall have no responsibility whatsoever in connection with obtaining
the same), (c) furnishing to Landlord, prior to the commencement of any
construction in the Premises, certificates evidencing comprehensive public
liability insurance with limits per occurrence of not less than $[...***...]
with an additional $[...***...] umbrella policy, and property damage insurance
with limits per occurrence of not less than $[...***...], covering Tenant's
Contractor's and subcontractors' operations in the Premises and the Building
(including any liability arising out of work involving Hazardous Materials) and
builders' risk insurance providing coverage in an amount equal to the full value
of the Tenant Improvements upon completion thereof, and with respect to all such
insurance naming Landlord as an additional insured, and upon Landlord's request
also naming any or all of the Indemnitees (as defined in Section 13. a. of the
Lease) as additional insureds, (D) performing the construction work in
accordance with the reasonable standards and procedures which Landlord may
promulgate from time to time for the safe and orderly progress of construction
(the "Construction Procedures"), and (E) performing the construction work in a
good and workmanlike manner and in accordance with applicable Legal Requirements
and in such manner as to preclude disturbance of other tenants and occupants of
the Buildings and, with respect to any work the sound levels or other effects of
which would disturb other tenants or occupants of the Buildings, performing such
work during other than business hours. Landlord shall have no responsibility for
furnishing any security services in or about the Building or Premises to
safeguard Tenant's construction of the Tenant Improvements or materials in
connection therewith.
iv. Construction: Changes. Prior to commencement of
construction of the Tenant Improvements Tenant shall enter into a contract with
Tenant's Contractor for construction of the Tenant Improvements and deliver a
copy thereof to Landlord and Tenant shall cause Tenant's Contractor to promptly
commence and diligently pursue to completion the Tenant Improvements. The Tenant
Improvements shall be constructed by Tenant's Contractor in conformance with the
Final Plans. In the event that Tenant shall desire any change in or to the Final
Plans, is such change shall affect the Building Systems or the Base Building
Components, or materially alter the design layout of the Premises from that
previously approved by Landlord, Tenant shall submit to Landlord for Landlord's
review and written approval a copy of the change order prepared by Tenant's
architect or Tenant's Contractor with respect to such Change (the "Change
Order"), together with revised Working Drawings prepared by Tenant's architect
incorporating the requested change and clearly identifying the same as such on
the revised Working Drawings. Landlord shall not unreasonably withhold or delay
its approval of the Change Order
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or revised Working Drawings, provided, however, that Landlord shall have at
least five (5) Business Days after receipt thereof to review any proposed
Change. Upon completion of the Tenant Improvements, Tenant shall deliver to
Landlord "CAD" as-built plans of the Tenant Improvements.
v. Concurrent Work. Landlord and Tenant acknowledge and agree
that the Premises shall be delivered to Tenant for construction of the Tenant
Improvements at such time as Landlord shall determine after substantial
completion of Landlord's Base Shell Work but prior to completion of all of
Landlord's Work (as such terms are defined below); provided, however, that in no
event shall Landlord be required to deliver the Premises to Tenant until such
time as Landlord shall reasonably determine that construction of the Tenant
Improvements will not likely delay or interfere with Landlord's Work or increase
the cost of Landlord's Work. Landlord and Tenant shall cooperate and cause their
respective contractors to cooperate in coordinating their respective work so as
to allow completion of the same in a timely and cost efficient manner. In the
event of irreconcilable conflicts regarding scheduling of the work or
utilization of Building resources in connection with the work, Landlord's Work
shall have priority.
vi. Substantial Completion. "Substantial Completion" of the
Tenant Improvements shall be deemed to have occurred when, in Landlord's
reasonable judgment, Tenant's Contractor has substantially completed
construction of the Tenant Improvements, subject only to the completion of
"Punch List Items". Punch List Items shall mean incomplete or defective work or
materials in the Tenant Improvements which do not materially impair Tenant's use
of the Premises for the conduct of Tenant's business therein.
c. Landlord's Work. Landlord shall perform the work to the Building and
the Premises identified on Schedules I attached hereto (collectively,
"Landlord's Work"). The portion of Landlord's Work required to construct a water
tight building shell (i.e. exterior walls, floor slabs, and roof) is referred to
herein as "Landlord's Base Shell Work". Landlord's Work shall be performed at
Landlord's sole cost and expense (except for any costs resulting from Tenant
Delays) by such general contractor as Landlord shall determine. Landlord's Work
shall be performed in a good and workmanlike manner and in accordance with
applicable Legal Requirements. Tenant acknowledges that the plans and
specifications for Landlord's Work have been prepared on the basis of certain
information previously furnished by Tenant with respect to the Tenant
Improvements, and that any changes to Landlord's Work or increase in the cost
thereof or delay in the completion thereof required by reason of the Tenant
improvements shall constitute "Tenant Delays" as set forth below and shall be
Tenant's sole responsibility.
d. Early Entry. In the event that Landlord shall allow Tenant to enter
any portion of the Premises prior to the commencement of the term of this Lease
as to such portion, for purposes of measuring or inspecting the Premises,
Tenant's Contractor's construction of the Tenant Improvements, or for purposes
of Tenant's installation of furniture, fixtures, electronic communication
equipment, telephones or other equipment, or for any other purposes, the
provisions of Section 13 of the Lease, entitled Indemnity and Insurance, shall
apply in full to such space, and Tenant shall be solely responsible for all such
furniture, fixtures and equipment and for any loss or damage thereto from any
cause whatsoever. Such early access shall be granted in Landlord's sole
discretion. Without limitation, in no event will Landlord grant such early
access or installation if Landlord shall determine that the same might delay or
interfere with Landlord's Work or increase the cost of Landlord's Work.
e. Tenant Delays. Tenant shall be responsible for, and shall pay to
Landlord, any and all costs and expenses (including lost rent) incurred by
Landlord in connection with the following, or by reason of any delay in the
commencement or completion of Landlord's Work or in Landlord's timely
delivery of any Phase of the Premises caused by the following: (i) the failure
of Tenant to submit the Space Plans, Final Space Plans, Working Drawings or
Final Plans to Landlord by the dates or within the time periods set forth in
Paragraph 1.a. above, or the failure of the Space Plans, Final Space Plans,
Working Drawings or Final Plans to meet the applicable requirements of Paragraph
l.a. above, (ii) any changes in the Space Plans, Working Drawings or Final
Plans, after submission thereof to Landlord (including any costs or delays
resulting from proposed changes that are not ultimately made), (iii) any failure
by Tenant to promptly respond to inquiries regarding the construction of the
Tenant Improvements or Landlord's Work or to promptly grant Tenant's approval of
materials or finishes for the Tenant Improvements or Landlord's Work, (iv) any
failure by Tenant to timely pay any amounts due from Tenant hereunder (it being
acknowledged that if Tenant falls to make or otherwise delays making such
payments, Landlord may stop Landlord's Work rather than incur costs which Tenant
is obligated to fund but has not yet done so and any delay from such a work
stoppage will be a Tenant Delay), (v) any failure of Tenant's Contractor to
promptly commence and diligently pursue to completion the Tenant Improvements
after Landlord's delivery of the Premises to Tenant, (vi) any interference by
Tenant with the construction of Landlord's Work, or (vii) any other delay
requested or caused by Tenant, including, without limitation, any delay caused
by Tenant's early entry into any portion of the Premises pursuant to Section
2.d. of the Lease. Each of the foregoing is referred to herein and in the Lease
as a "Tenant Delay".
Landlord shall notify Tenant in writing of any Tenant Delay
(identifying the nature of the Tenant Delay) as soon as reasonably practicable
after Landlord becomes actually aware of such Tenant Delay, together with
Landlord's then good faith estimate of the probable duration of such Tenant
Delay.
f. Cost of Improvements. The cost of the construction and installation
of the Tenant Improvements shall be borne as follows:
i. Landlord shall pay the entire cost of Landlord's Work (as
described in Paragraph l.c. above), including costs of obtaining permits for the
same. Landlord shall also pay the Improvement Tax (as defined below') in
connection with Landlord's Work and the Tenant Improvements, up to the amount of
$1.44 per rentable square foot of the Premises.
ii. Tenant shall pay the entire cost of the Tenant
Improvements (including, without limitation, the Construction Operations Fee as
described in Paragraph 1.f.ii.C. below, costs of permits and other governmental
fees, and the portion of the City of Hayward Interim Supplemental Building
Construction and Improvement Tax (the "Improvement Tax") in excess of $1.44 per
rentable square foot of the Premises), except that in addition to the sums
referenced in clause i. above, Landlord shall contribute toward the total cost
of the construction and installation of the Tenant Improvements an amount not to
exceed the product of [...***...] times the number of rentable square feet
comprising the Rentable Area of the Premises ("Landlord's Contribution"). The
following provisions shall govern the payment of Landlord's Contribution:
A. Disbursement Schedule: Installments. Landlord shall disburse
Landlord's Contribution in two installments. The first installment shall be
disbursed at the mid-point of the schedule for the construction of the Tenant
Improvements. The second installment shall be disbursed on completion of the
Tenant Improvements, but in no event prior to the date on which Tenant shall
commence paying rent under the Lease. Landlord's obligation to disburse each
installment shall be further subject to the following conditions.
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* Confidential Treatment Requested
B. Disbursement of Landlord's Contribution. Landlord shall
disburse Landlord's Contribution directly to Tenant's Contractor, and/or to the
applicable subcontractors, and/or to Tenant, as Landlord shall determine, upon
receipt of (x) invoices of Tenant's Contractor to be furnished to Landlord by
Tenant covering work actually performed, construction in place and materials
incorporated into the construction (as may be applicable) describing in
reasonable detail such work, construction and/or materials, (y) lien waivers
executed by Tenant's Contractor, subcontractors or suppliers, as applicable, for
their portion of the work covered by the requested disbursement and by
Landlord's previous disbursements (all such waivers to be in the forms
prescribed by California Civil Code Section 3262). No payment will be made for
materials or supplies not incorporated into the construction, regardless of
whether the materials or supplies are located on the Premises. Landlord may
withhold the amount of any and all retentions provided for in original contracts
or subcontracts until expiration of the applicable lien periods or Landlord's
receipt of unconditional lien waivers and full releases upon final payment (in
the form prescribed by California Civil Code Section 3262) from Tenant's
Contractor and all subcontractors and suppliers.
C. Construction Operations Fee. Landlord shall retain from the
amount of Landlord's Contribution, in the manner described below, an aggregate
sum equal to [...***...] of the total cost of the construction and installation
of the Tenant Improvements (which cost of the construction and installation
shall. include architectural and engineering fees but shall not include permit
fees or the Improvement Tax) (the "Construction Operations Fee") as compensation
to Landlord for review of plans, specifications and budgets, coordinating the
schedule for construction of the Tenant Improvements with any other work to the
Building or other tenants' premises therein, review and qualification of
Tenant's Contractor for work in the Building, monitoring Tenant's and Tenant's
Contractor's compliance with the Construction Procedures (but without limiting
Tenant's liability for any noncompliance), and for other miscellaneous costs
incurred by Landlord as a result of the construction work not otherwise
reimbursable by Tenant hereunder. Other costs reimbursable by Tenant shall
include, without limitation, the reasonable out of pocket costs paid by Landlord
to its architect and engineer to review the plans and specifications submitted
by Tenant pursuant to the foregoing provisions. At the time Landlord makes any
disbursement of Landlord's Contribution, Landlord shall retain from Landlord's
Contribution, as a partial payment of the Construction Operations Fee and other
reimbursable costs, a proportionate amount of the Construction Operations Fee
and such costs based upon Landlord's reasonable estimate of the amount required
to be withheld from such disbursement in order to ensure that the entire
Construction Operations Fee and such costs are retained over the course of
construction on a prorata basis. At such time as Landlord's Contribution has
been entirely disbursed, if the entire Construction Operations Fee and
reimbursable costs have not yet been paid to Landlord, Tenant shall pay to
Landlord a prorate portion of each payment made by Tenant on account of the
Tenant Improvements in order to ensure that the balance of the Construction
Operations Fee and such costs are paid to Landlord over the course of
construction on a prorata basis.
D. Certain Costs. Portions of Landlord's Contribution may, at
Tenant's election, be applied toward Tenant's architectural fees in connection
with the design and construction of the Tenant Improvements, including the costs
of producing the Space Plans, Working Drawings and Final Plans; provided,
however that the portion of Landlord's Contribution applied to such fees may not
exceed [...***...] per rentable square foot of the Rentable Area of the
applicable Phase of the Premises. Landlord shall reimburse Tenant for such fees
(or, if Tenant so notifies Landlord in writing, will make payments directly to
Tenant's architect, engineer or vendor) within thirty (30) days after Landlord's
receipt of copies of receipted invoices and such other evidence as Landlord
shall reasonably require coveting the same, but
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in no event prior to the date Tenant shall commence construction of the Tenant
Improvements. In no event may any portions of Landlord's Contribution be applied
towards the costs of Tenant's engineering fees, or personal property, equipment
or furniture, or towards rent due under this Lease.
E. Entire Premises to be Improved. Tenant acknowledges that
Landlord's Contribution is to be applied to the Tenant Improvements (and the
architectural costs described above) covering the entire Premises. If Tenant
does not improve the entire Premises, then, without limitation of any other
rights or remedies of Landlord hereunder, Landlord's Contribution shall be
adjusted on a prorata per rentable square foot basis to reflect the number of
rentable square feet actually being improved.
F. Evidence of Costs. No later than ninety (90) days after the
Rent Commencement Date, Tenant shall deliver a final as-built cost budget of the
Tenant Improvements, certified by an officer of Tenant, together with evidence
of such costs such as receipts and construction invoices.
G. Provisions Applicable to Phases. Landlord and Tenant
acknowledge that the Phase I Premises and the Phase II Premises will be
delivered and improved at different times in accordance with the provisions of
the Lease. Accordingly, the foregoing provisions shall apply separately as to
each Phase of the Premises, and where the foregoing provisions refer to the
"Premises", such reference shall be deemed a reference to the applicable Phase
of the Premises.
SCHEDULE I
Outline Specification prepared by Cabak Rooney Jordan Associates for Mr. Eden
Business Park, Phase I dated October 18, 1997, revised January 16, 1998 amended
as follows:
1. [...***...].
2. [...***...].
3. [...***...].
4. [...***...].
5. [...***...].
Drawings prepared by Cabak Rooney Jordan Associates for Mt. Eden Business Park,
Sheets A-l, 2, 10, 11, 12, 13, 17, 18.
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* Confidential Treatment Requested
EXHIBIT C
COMMENCEMENT DATE MEMORANDUM
LANDLORD: ____________________________________
____________________________________
TENANT: ____________________________________
____________________________________
LEASE DATE: ____________________________________
PREMISES: ____________________________________
____________________________________
____________________________________
Pursuant to Section 2.d. of the above-referenced Lease, the Commencement Date of
Phase __ of the Premises is hereby established as_____________, 19__, the Rent
Commencement Date of Phase __ of the Premises is hereby established
as_____________, 19__, and the Expiration Date for all of the Premises demised
under the Lease is hereby established as _____________, 200_.
LANDLORD:
_______________________________
a _____________________________
By ____________________________
Its _________________________
TENANT:
_______________________________
a _____________________________
By ____________________________
Its _________________________
EXHIBIT D
RULES AND REGULATIONS
1. No sign, placard, picture, advertisement, name or notice shall be installed
or displayed on any part of the outside or inside of the Building without the
prior written consent of Landlord. Landlord shall have the right to remove, at
Tenant's expense and without notice, any sign installed or displayed in
violation of this rule. All approved signs or lettering on doors, windows and
walls shall be printed, painted, affixed or inscribed at the expense of Tenant
by a person chosen by Landlord, using materials of Landlord's choice and in a
style and format approved by Landlord.
2. The directory of the Building will be provided exclusively for the display of
the name and location of tenants, and Landlord reserves the right to exclude any
other names therefrom. Tenant shall pay Landlord's standard charge for Tenant's
listing thereon and for any changes by Tenant.
3. Except as consented to in writing by Landlord or in accordance with Building
standard improvements, no draperies, curtains, blinds, shades, screens or other
devices shall be hung at or used in connection with any window or exterior door
or doors of the Premises. No awning shall be permitted on any part of the
Premises. Tenant shall not place anything against or near glass partitions or
doors or windows which may appear unsightly from outside the Premises.
4. Tenant shall not obstruct any sidewalks, halls, lobbies, passages, exits,
entrances, elevators or stairways of the Building. No tenant and no employee or
invitee of any tenant shall go upon the roof of the Building or make any roof or
terrace penetrations. Tenant shall not allow anything to be placed on the
outside terraces or balconies without the prior written consent of Landlord.
5. No Tenant shall invite to the Premises, or permit the visit of, persons in
such numbers or under such conditions as to interfere with the use and enjoyment
of the Common Areas of the Building by other tenants.
6. Intentionally Deleted.
7. Landlord will furnish Tenant, free of charge, two (2) keys to Tenant's suite
entrance. Landlord may make a reasonable charge for any additional keys and for
having any locks changed. Tenant shall not make or have made additional keys
without Landlord's prior written consent, and Tenant shall not alter any lock or
install a new additional lock or bolt on any door of its Premises without
Landlord's prior written consent. Tenant shall deliver to Landlord, upon the
termination of its tenancy, the keys to all locks for doors on the Premises. If
Tenant loses any keys furnished by Landlord, Tenant shall pay Landlord the cost
of rekeying the Premises.
8. If Tenant requires telegraphic, telephonic, burglar alarm or similar
services, it shall first obtain, and comply with, Landlord's instructions for
their installation.
9. The elevator shall be available for use by all tenants in the Building,
subject to reasonable scheduling as Landlord in its discretion shall deem
appropriate. No equipment, materials, furniture, packages, supplies, merchandise
or other property will be received in the Building or carried in the elevator
except between the hours, in the manner and in the elevators as may be
designated by Landlord.
10. Tenant shall not place a load upon any floor of the Premises which exceeds
the maximum load per square foot which the floor was designed to carry and which
is allowed by law. Tenant's business machines and mechanical equipment which
cause noise or vibration which may be transmitted to the structure of the
Building or to any space therein, and which is objectionable to Landlord or to
any tenants in the Building, shall be placed and maintained by Tenant, at
Tenant's expense, on vibration eliminators or other devices sufficient to
eliminate noise or vibration.
11. Tenant shall not use or permit to be used in the Premises any foul or
noxious gas or substance, or permit or allow the Premises to be occupied or used
in a manner offensive or objectionable to Landlord or other occupants of the
Building by reason of noise, odors or vibrations. No animal, except seeing eye
dogs or other licensed disability assist animals when in the company of their
masters, may be brought into or kept in the Building.
12. Tenant shall not use any method of heating or air-conditioning other than
that supplied by Landlord, unless Tenant receives the prior written consent of
Landlord.
13. Tenant shall cooperate fully with Landlord to assure the most effective
operation of the Building's heating and air-conditioning and to comply with any
governmental energy-saving rules, laws or regulations of which Tenant has actual
notice. Tenant shall refrain from attempting to adjust controls other than room
thermostats installed for Tenant's use.
14. All entrance doors to the Premises shall be left locked when the Premises
are not in use, and all doors opening to public corridors shall be kept closed
except for normal ingress and egress to and from the Premises.
15. Landlord reserves the right, exercisable without notice and without
liability to Tenant, to change the name and street address of the Building.
16. Landlord reserves the right to exclude any person from the Building between
the hours of 6:00 p.m. and 7:00 a.m. the following day, or any other hours as
may be established from time to time by Landlord, and on Saturdays, Sundays and
legal holidays, unless that person is known to the person or employee in charge
of the Building and has a pass or is properly identified. Tenant shall be
responsible for all persons for whom it requests passes and shall be liable to
Landlord for all acts of those persons. Landlord shall not be liable for damages
for any error in admitting or excluding any person from the Building. Landlord
reserves the right to prevent access to the Building by closing the doors or by
other appropriate action in case of invasion, mob, riot, public excitement or
other commotion.
17. Tenant shall close and lock the doors of its Premises, shut off all water
faucets or other water apparatus and turn off all lights and other equipment
which is not required to be continuously run. Tenant shall be responsible for
any damage or injuries sustained by other tenants or occupants of the Building
or Landlord for noncompliance with this Rule.
18. The toilet rooms, toilets, urinals, wash bowls and other apparatus shall not
be used for any purpose other than that for which they were constructed, and no
foreign substance of any kind whatsoever shall be placed therein. The expense of
any breakage, stoppage or damage resulting from any violation of this rule shall
be borne by the tenant who, or whose employees or invitees, shall have caused
it.
19. Tenant shall not install any radio or television antenna, loudspeaker or
other device on the roof or exterior walls of the Building. Tenant shall not
interfere with radio or television broadcasting or reception from or in the
Building or elsewhere.
20. Tenant shall not cut or bore holes for wires in the partitions, woodwork or
plaster of the Premises. Tenant shall not affix any floor covering to the floor
of the Premises in any manner except as approved by Landlord. Landlord shall
approve in writing the method of attachment of any objects affixed to walls,
ceilings or doors in the Premises. Tenant shall repair, or be responsible for
the cost of repair of any damage resulting from noncompliance with this Rule.
21. Tenant shall not install, maintain or operate upon the Premises any vending
machine (other than vending machines primarily intended for use by Tenant's
employees) without the prior written consent of Landlord.
22. Canvassing, soliciting and distributing handbills or any other written
material and peddling in the Building are prohibited, and each tenant shall
cooperate to prevent these activities.
23. Landlord reserves the right to exclude or expel from the Building any person
who, in Landlord's judgment, is intoxicated or under the influence of liquor or
drugs, or who is in violation of any of the Rules and Regulations of the
Building.
24. Tenant shall store all its trash and garbage within its Premises. Tenant
shall not place in any trash box or receptacle any material which cannot be
disposed of in the ordinary and customary manner of trash and garbage disposal
within the Building. All garbage and refuse disposal shall be made in accordance
with directions issued from time to time by Landlord.
25. Use by Tenant of Underwriters' Laboratory approved equipment for brewing
coffee, tea, hot chocolate and similar beverages and microwaving food shall be
permitted, provided that the equipment and use is in accordance with all
applicable federal, state, county and city laws, codes, ordinances, rules and
regulations.
26. Tenant shall not use the name of the Building in connection with or in
promoting or advertising the business of Tenant, except as Tenant's address,
without the written consent of Landlord.
27. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.
Tenant shall be responsible for any increased insurance premiums attributable to
Tenant's use of the Premises, Building or Property.
28. Tenant assumes any and all responsibility for protecting its Premises from
theft and robbery, which responsibility includes keeping doors locked and other
means of entry to the Premises closed.
29. Tenant shall not use the Premises, or suffer or permit anything to be done
on, in or about the Premises, which may result in an increase to Landlord in the
cost of insurance maintained by Landlord on the Building and Common Areas.
30. Tenant's requests for assistance will be attended to only upon appropriate
application to the office of the Building by an authorized individual. Employees
of Landlord shall not perform any work or do anything outside of their regular
duties unless under special instructions from Landlord, and no employee
of Landlord will admit any person (Tenant or otherwise) to any office without
specific instructions from Landlord.
31. Tenant shall not park its vehicles in any parking areas designated by
Landlord as areas for parking by visitors to the Building or other reserved
parking spaces. Tenant shall not leave vehicles in the Building parking areas
overnight, nor park any vehicles in the Building parking areas other than
automobiles, motorcycles, motor driven or non-motor driven bicycles or
four-wheeled trucks. Tenant, its agents, employees and invitees shall not park
any one (1) vehicle in more than one (1) parking space.
32. The scheduling and manner of all Tenant move-ins and move-outs shall be
subject to the reasonable discretion and approval of Landlord, and unless Tenant
occupies the entire Building in which the move is taking place, move-ins and
move-outs shall take place only after 6:00 p.m. on weekdays, on weekends, or at
other times as Landlord may reasonably designate. Landlord shall have the right
to approve or disapprove the movers or moving company employed by Tenant, and
Tenant shall cause the movers to use only the entry doors and elevators
designated by Landlord. If Tenant's movers damage the elevator or any other part
of the Property, Tenant shall pay to Landlord the amount required to repair the
damage.
33. The Premises shall not be used for the storage of merchandise, for washing
clothes, for lodging or for any improper, objectionable or immoral purpose.
34. Tenant shall not use in any space or in the public halls of the Building,
any hand trucks except those equipped with rubber tires and side guards or such
other material-handling equipment as Landlord may approve. Tenant shall not
bring any bicycles or other vehicles of any kind into the building.
35. Landlord shall have the right to control and operate the public portions of
the Building, and the public facilities, heating and air conditioning, as well
as facilities furnished for the common use of the tenants, in such manner as it
deems best for the benefit of the tenants generally.
36. Landlord may waive any one or more of these Rules and Regulations for the
benefit of Tenant or any other tenant, but no waiver by Landlord shall be
construed as a waiver of the Rules and Regulations in favor of Tenant or any
other tenant, nor prevent Landlord from thereafter enforcing the Rules and
Regulations against any or all of the tenants of the Building.
37. These Rules and Regulations are in addition to, and shall not be construed
to in any way modify or amend, in whole or in part, the terms, covenants,
agreements and conditions of any lease of premises in the Building.
38. Landlord reserves the right to make other reasonable Rules and Regulations
as, in its judgment, may from time to time be needed for safety and security,
for care and cleanliness of the Building and for the preservation of good order
therein. Tenant agrees to abide by all Rules and Regulations hereinabove stated
and any additional rules and regulations which are adopted.
39. Tenant shall be responsible for the observance of all of the foregoing rules
by Tenant's employees, agents, clients, customers, invitees and guests.
EXHIBIT E
APPRAISAL PROCEDURE
After the expiration of the thirty (30)-day period set forth in the
Lease for the mutual agreement of Landlord and Tenant as to the fair market
rent, each party hereto, at its cost, may engage a real estate appraiser to act
on its behalf in determining the fair market rent. The appraisers each shall
have at least five (5) years' experience in brokering or valuing leases in
comparable business parks in the Comparable Market and shall submit to Landlord
and Tenant in advance for Landlord's and Tenant's reasonable approval the
appraisal methods to be used. If a party appoints such an appraiser and the
other party fails to appoint such an appraiser within fifteen (15) days after
notice from the first party that the first party has appointed such an
appraiser, the single appraiser appointed shall be the sole appraiser and shall
set the fair market rent. If the two appraisers are appointed by the parties as
stated in this paragraph, such appraisers shall meet promptly and attempt to set
the fair market rent. If such appraisers are unable to agree within thirty (30)
days after appointment of the second appraiser, the appraisers shall elect a
third appraiser meeting the qualifications stated in this paragraph within ten
(10) days after the last date the two appraisers are given to set the fair
market rent, except that if the higher of the two determinations is 105% or less
of the amount set forth in the lower determination, the average of the two
determinations shall be the fair market rent and the third appraiser shall not
be appointed. Each of the parties hereto shall bear one-half (1/2) the cost of
appointing the third appraiser and of the third appraiser's fee. The third
appraiser shall be a person who has not previously acted in any capacity for
either party. The third appraiser shall conduct his own investigation of the
fair market rent, and shall be instructed not to advise either party of his
determination of the fair market rent except as follows: When the third
appraiser has made his determination, he shall so advise Landlord and Tenant and
shall establish a date, at least five (5) days after the giving of notice by the
third appraiser to Landlord and Tenant, on which he shall disclose his
determination of the fair market rent. Such meeting shall take place in the
third appraiser's office unless otherwise agreed by the parties. After having
initialed a paper on which his determination of fair market rent is set forth,
the third appraiser shall place his determination of the fair market rent in a
sealed envelope. Landlord's appraiser and Tenant's appraiser shall each set
forth their determination of fair market rent on a paper, initial the same and
place them in sealed envelopes. Each of the three envelopes shall be marked with
the name of the party whose determination is inside the envelope. In the
presence of the third appraiser, the determination of the fair market rent by
Landlord's appraiser and Tenant's appraiser shall be opened and examined. If the
higher of the two determinations is 105% or less of the amount set forth in the
lower determination, the average of the two determinations shall be the fair
market rent, the envelope containing the determination of the fair market rent
by the third appraiser shall be destroyed and the third appraiser shall be
instructed not to disclose his determination. If either party's envelope is
blank, or does not set forth a determination of fair market rent, the
determination of the other party shall prevail and be treated as the fair market
rent. If the higher of the two determinations is more than 105% of the amount of
the lower determination, the envelope containing the third appraiser's
determination shall be opened. The fair market rent shall be the rent proposed
by either Landlord's appraiser or Tenant's appraiser which is closest to the
determination of fair market rent by the third appraiser.