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EXHIBIT 10.1
GROUND SUBLEASE
BY AND BETWEEN
NORTH CAMPUS-UNIVERSITY PARK DEVELOPMENT CORPORATION
"LANDLORD"
AND
FIRST SECURITY BANK, NATIONAL ASSOCIATION, not
individually but solely as Owner Trustee under the
MiniMed Real Estate Trust 1999-1
"TENANT
LEASED PREMISES ARE PARCELS 1, 2 & 3
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TABLE OF CONTENTS
ARTICLE PAGE
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ARTICLE 1 - DEFINITIONS...........................................................................................2
1.1 Additional Rent.................................................................................2
1.2 Affiliate.......................................................................................2
1.3 Agreed Rate.....................................................................................3
1.4 Building........................................................................................3
1.5 Commencement Date...............................................................................3
1.6 Construction Loan...............................................................................3
1.7 CPI.............................................................................................3
1.8 Default(s)......................................................................................4
1.9 Environmental Laws..............................................................................4
1.10 Fair Market Rent................................................................................4
1.11 Force Majeure Events............................................................................4
1.12 Governmental Restrictions.......................................................................4
1.13 Hazardous Materials.............................................................................4
1.14 Improvements....................................................................................4
1.15 JPA.............................................................................................4
1.16 Leased Premises.................................................................................5
1.17 Leasehold Mortgage..............................................................................5
1.18 Lease Year......................................................................................5
1.19 Lender..........................................................................................5
1.20 Losses and Liabilities..........................................................................5
1.21 Mortgage........................................................................................5
1.22 Parcel or Parcels...............................................................................5
1.23 Party or Parties................................................................................5
1.24 Permitted Exceptions............................................................................5
1.25 Plans...........................................................................................6
1.26 Rent............................................................................................6
1.27 Representatives.................................................................................6
1.28 Research Center.................................................................................6
1.29 Site Plan.......................................................................................6
1.30 Sublease(s); Subtenant..........................................................................6
1.31 Term............................................................................................6
1.32 Title Insurer...................................................................................6
1.33 Title Policy....................................................................................6
1.34 Transfer Documents..............................................................................6
1.35 Transfer/Transferee.............................................................................7
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1.36 Uncured Default(s)..............................................................................7
1.37 University......................................................................................7
ARTICLE 2 - LEASED PREMISES.......................................................................................7
2.1 Leased Premises.................................................................................7
2.2 Leased Premises; Condition of Premises; Zoning..................................................7
2.3 North Campus Library Annex......................................................................7
ARTICLE 3 - TERM..................................................................................................8
3.1 Initial Term....................................................................................8
3.2 Options to Extend...............................................................................8
3.3 Possession; Covenant of Quiet Enjoyment.........................................................9
ARTICLE 4 - RENT PAYMENTS.........................................................................................9
4.1 Rent............................................................................................9
4.2 Adjustments to Rent.............................................................................9
4.3 Fair Market Rent...............................................................................10
4.4 Additional Rent................................................................................13
4.5 Landlord's Special Right to Terminate Lease....................................................13
4.6 Tenant's Special Rights to Terminate Lease.....................................................14
4.7 Miscellaneous..................................................................................15
4.8 Triple Net Lease; No Counterclaim, Abatement, etc..............................................15
ARTICLE 5 - USE OF THE LEASED PREMISES, MAINTENANCE AND HAZARDOUS MATERIALS
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5.1 Use of the Leased Premises.....................................................................16
5.2 No use of Hazardous Materials on the Leased Premises...........................................17
5.3 Notice and Remediation by Tenant...............................................................17
5.4 Environmental Indemnity........................................................................17
5.5 Termination; Subtenants........................................................................18
5.6 Grant of Easements.............................................................................18
ARTICLE 6 - CONSTRUCTION BY MINIMED..............................................................................19
6.1 Development of Improvements....................................................................19
6.2 Conditions to Construction of Improvements.....................................................19
6.3 Construction of Improvements...................................................................22
6.4 Completion of Improvements and Other Work: Quality and Compliance With Law.....................22
6.5 Construction Cost..............................................................................23
6.6 Mechanic's, Materialman's, Contractor's, or Subcontractor's Liens..............................24
6.7 Hazardous Materials............................................................................24
6.8 Ownership Of Improvements......................................................................25
6.9 Right of Access................................................................................26
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6.10 Governmental Approvals.........................................................................26
ARTICLE 7 - REPAIRS AND MAINTENANCE..............................................................................26
7.1 Landlord's Nonresponsibility...................................................................26
7.2 Tenant's Duty to Maintain Premises.............................................................27
7.3 Damage or Destruction..........................................................................27
ARTICLE 8 - LEASEHOLD FINANCING..................................................................................29
8.1 Conditions To Obtaining Leasehold Mortgage.....................................................29
8.2 Lender's Rights................................................................................29
8.3 Default Notice.................................................................................30
8.4 Lender Cure Rights.............................................................................30
8.5 Obligations of Lender and Purchaser............................................................31
8.6 New Lease......................................................................................32
8.7 Multiple Lenders...............................................................................33
8.8 New Lease Priority.............................................................................34
8.9 Liability of New Tenant........................................................................34
8.10 Subleases and Rents............................................................................34
8.11 Legal Proceedings..............................................................................35
8.12 Encumbrance of Landlord's Leasehold Interest...................................................35
8.13 Notices........................................................................................36
ARTICLE 9 - ASSIGNMENT AND TRANSFER..............................................................................36
9.1 Assignment of Landlord's Interest in Lease or the Leased Premises..............................36
9.2 Transfer of the Lease, the Leased Premises or the Improvements to be Constructed Thereon.......37
9.3 Transfer of Tenant's Interest in Lease and Tenant's Ownership..................................39
9.4 Subleases......................................................................................40
9.5 Assignment for Financing Purposes..............................................................42
ARTICLE 10 - TAXES AND IMPOSITIONS...............................................................................43
10.1 Tenant To Pay Impositions......................................................................43
10.2 Proration of Impositions.......................................................................43
10.3 Payment Before Delinquency.....................................................................43
10.4 Contest of Imposition..........................................................................43
10.5 Tax Returns And Statements.....................................................................44
10.6 Possessory Interest Taxes......................................................................44
ARTICLE 11 - UTILITY SERVICES....................................................................................45
11.1 Tenant's Responsibility........................................................................45
11.2 Landlord Has No Responsibility.................................................................45
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ARTICLE 12 - INSURANCE...........................................................................................45
12.1 Fire and Extended Coverage Insurance...........................................................45
12.2 Commercial General Liability Insurance.........................................................45
12.3 Worker's Compensation Insurance................................................................46
12.4 Course of Construction Insurance...............................................................46
12.5 Business Automobile Liability Insurance........................................................46
12.6 Policy Form, Content And Insurer...............................................................46
12.7 Waiver of Subrogation..........................................................................47
12.8 Indemnification................................................................................48
ARTICLE 13 - CONDEMNATION........................................................................................50
13.1 General........................................................................................50
13.2 Award..........................................................................................50
13.3 Taking for Temporary Use.......................................................................51
ARTICLE 14 - DEFAULT.............................................................................................51
14.1 Default........................................................................................51
14.2 Notice of Default; Tenant's Right to Cure......................................................51
14.3 Landlord's Right to Cure Tenant's Defaults.....................................................52
14.4 Notice of Landlord's Default; Tenant Waiver....................................................52
14.5 Landlord's Remedies............................................................................53
14.6 Tenant Remedies; Remedies Cumulative...........................................................54
14.7 No Waiver......................................................................................55
14.8 Delays in Performance..........................................................................55
ARTICLE 15 - EXPIRATION; TERMINATION.............................................................................55
ARTICLE 16 - MASTER GROUND LEASES................................................................................56
ARTICLE 17 - INTERRELATIONSHIP BETWEEN UNIVERSITYAND LEASED PREMISES.............................................56
17.1 Goals of Master Landlord, Landlord and Tenant..................................................56
17.2 Cooperation Covenants of Tenant and its Subtenants.............................................56
17.3 Businesses Within Research Center..............................................................57
17.4 Use of University Facilities...................................................................57
17.5 Cooperation Covenants Regarding Tenant.........................................................57
17.6 Change In Use..................................................................................58
ARTICLE 18 - MISCELLANEOUS.......................................................................................58
18.1 Landlord's Representations and Warranties......................................................58
18.2 Tenant's Representations and Warranties........................................................59
18.3 Survival of Representations, Warranties and Covenants..........................................60
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18.4 Further Assurances.............................................................................60
18.5 Estoppel Certificate...........................................................................60
18.6 Notices........................................................................................60
18.7 Attorneys' Fees................................................................................62
18.8 Headings.......................................................................................63
18.9 Rights of Successors...........................................................................63
18.10 Amendments in Writing..........................................................................63
18.11 No Brokers.....................................................................................63
18.12 Negation of Partnership........................................................................63
18.13 Time of Essence................................................................................63
18.14 Interpretation.................................................................................63
18.15 Applicable Law; Severability...................................................................64
18.16 Exhibits.......................................................................................64
18.17 Short Form of Lease............................................................................64
18.18 Hold as One Parcel; Reciprocal Easement Agreement..............................................64
18.19 Landlord's Rights of Inspection................................................................64
18.20 Nonmerger of Fee and Leasehold Estates.........................................................65
18.21 Counterparts...................................................................................65
18.22 Interest On Past Due Obligations...............................................................65
18.23 Holding Over...................................................................................65
18.24 Owner Trustee..................................................................................65
18.25 MiniMed As Third Party Beneficiary.............................................................65
18.26 Automatic Amendment of this Lease..............................................................66
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EXHIBITS
Exhibit A - Legal Description of the Leased Premises
Exhibit B - Site Plan
Exhibit C - Memorandum of Lease
Exhibit D - Rent Schedule
Exhibit E - Estoppel Certificate
Exhibit F - Allowed Uses
Schedule 18.26
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GROUND SUBLEASE
Parcels 1, 2 and 3
This Ground Sublease ("Lease") is dated for identification purposes as
of the 18th day of May, 1999, and is entered into by and between the following
(collectively, the "Parties"): NORTH CAMPUS-UNIVERSITY PARK DEVELOPMENT
CORPORATION, a not-for-profit corporation ("Landlord"), and FIRST SECURITY BANK,
NATIONAL ASSOCIATION, not individually but solely as Owner Trustee under the
MiniMed Real Estate Trust 1999-1 ("Tenant").
RECITALS
A. Pursuant to those certain four master leases (the "Master Leases")
each dated May 18, 1999, Landlord is the master tenant of certain real property
comprised of four parcels, "Parcel 1", "Parcel 2" and "Parcel 3" (collectively,
the "Leased Premises") and Parcel 4 located in the City of Los Angeles, and
owned by the State of California under the administration of the Trustees of the
California State University (the "Trustees").
B. The Leased Premises collectively are approximately 19 acres, and
will be developed in accordance with this Lease as a research and development
center consisting of a conference center and central plant, manufacturing,
research and development, and general business facilities; such initial
development is referred to herein as "Phase A".
C. The Leased Premises are Parcels 1, 2 and 3, and are legally
described in the attached legal description, Exhibit A, and depicted on the Site
Map, Exhibit B; the Site Map also depicts Parcel 4.
D. The Trustees, Landlord and MiniMed Inc., a Delaware corporation
("Minimed"), entered into that certain Agreement to Lease dated May ___, 1999,
pursuant to which Landlord has agreed to lease to MiniMed or a special purpose
entity or trust formed or operated for financing purposes ("SPE"), and MiniMed
has agreed to lease (or to cause its assignee to lease) from Landlord, upon the
satisfaction of certain conditions precedent, Parcel 4. The Agreement to Lease
provides that if MiniMed or an SPE has not leased Parcel 4 on or before June 30,
2005, then the Agreement to Lease shall terminate and be of no further force or
effect, and thereafter MiniMed and, if
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applicable, its assignee shall have no further rights in Parcel 4.
E. On June 17, 1998, the City of Los Angeles, a Charter City and
municipal corporation of the State of California (the "City"), and the Trustees
of the California State University System (the "Master Landlord"), have entered
into that certain Joint Powers Agreement (the "JPA"). Pursuant to the JPA, among
other things, the City and Master Landlord clarified certain jurisdictional
issues relating to this Lease.
F. Landlord and MiniMed have agreed that MiniMed will be responsible to
pay for and to construct certain of those mitigation measures applicable to this
project as identified in Attachment No. 6 to the JPA and/or as required by the
Trustees of the California State University as identified in Attachment No. 5 to
the JPA, and that Landlord and MiniMed will share the cost of such mitigation
measures; Landlord's payment for such mitigation measures will be by way of Rent
credits, which are reflected in the Rent Schedule, as set forth at Article 4.
G. If MiniMed and/or one of its affiliated entities succeeds to the
interest of Tenant under this Lease, then in connection with the financing of
the construction of the Improvements, MiniMed and/or one or more of its
affiliated entities may enter into a synthetic lease financing transaction,
pursuant to which a special purpose entity or trust formed or operated for
financing purposes shall become Tenant hereunder pursuant to a novation,
assignment or similar mechanism.
H. Prior to the date hereof, MiniMed has delivered to Landlord a
guarantee of Tenant's obligations hereunder.
NOW, THEREFORE, in consideration of the payments to be made hereunder
and the covenants and agreements contained herein, Landlord hereby leases to
Tenant and Tenant hereby leases from Landlord the real property hereinafter
defined as the "Leased Premises" upon the following terms and conditions.
ARTICLE 1 - DEFINITIONS
1.1 Additional Rent. The term "Additional Rent" means all sums of money
required to be paid pursuant to the terms of this Lease other than Rent
including but not limited to the sums to be paid pursuant to Section 6.6(b)
(regarding liens), Section 10.1(a) (regarding Impositions), and Section 14.3
(regarding self help).
1.2 Affiliate. The term "Affiliate" as used herein shall mean any
person directly or indirectly, through one or more intermediaries, controlling,
controlled by or under common control with another person, which, in the case of
a partnership, shall
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include each of the general partners thereof. The term control, as used in the
immediately preceding sentence, means the possession, directly or indirectly, of
the power to direct or cause the direction of the management or policies of the
controlled person. If MiniMed is Tenant, the term "Affiliate" shall also mean a
general partnership of which MiniMed or Alfred E. Mann is a general partner, or
any entity of which MiniMed Inc. or Alfred E. Mann owns a 20% or greater equity
interest; provided that such partnership or other entity is engaged in the
business or businesses as permitted pursuant to Section 5.1(b) below.
1.3 Agreed Rate. The term "Agreed Rate" as used herein shall mean an
annual rate of interest equal to the lesser of (i) two percent (2%) above the
rate of interest announced from time to time by the Bank of America, Downtown
Los Angeles, Main Branch, as the prime or reference rate (or, in the event said
bank ceases to announce a prime or reference rate or is acquired or ceases
operations and there is no successor bank, another established and financially
secure commercial bank, having a headquarters in California, selected by
Landlord), or (ii) the highest rate permitted by law, if any.
1.4 Building. The term "Building" shall mean and refer to each of the
structures designed for occupancy within the Leased Premises.
1.5 Commencement Date. The Commencement Date is the date that this
Lease is executed by Landlord.
1.6 Construction Loan. The term "Construction Loan" as used herein
shall mean and refer to a construction loan made by a construction Lender to
Tenant for the development and construction of all or a portion of the
Improvements contemplated for the Leased Premises by this Lease.
1.7 CPI. The term "CPI" as used herein shall mean the Consumer Price
Index [All Urban Consumers] (base year 1982-84 = 100) for the Los Angeles-Long
Beach area published by the United States Department of Labor, Bureau of Labor
Statistics. If the CPI is changed so that the base is changed from 1982-84 =
100, the CPI shall be converted in accordance with the conversion factor
published by the United States Department of Labor, Bureau of Labor Statistics.
If the CPI is discontinued or revised during the Term, such other governmental
index or computation with which it is replaced shall be used in order to obtain
substantially the same result as would be obtained if the CPI had not been
discontinued or revised. If there is no such replacement, then Landlord and
Tenant shall select another price index which is satisfactory to both.
1.8 Default(s). The term "Default(s)" as used herein shall have the
meaning
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described in Section 14.1.
1.9 Environmental Laws. The term "Environmental Laws" means any
federal, state or local environmental, health and/or safety-related law, rule,
regulation, requirement, order, ordinance, directive, guideline, permit or
permit condition, currently existing and as amended, enacted, issued or adopted
in the future. The term Environmental Laws includes, but is not limited to, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, and similar state or local laws.
1.10 Fair Market Rent. "Fair Market Rent" means the prevailing market
rent being paid for real property comparable to the Leased Premises and for the
industrial uses permitted under this Lease, unencumbered by the Improvements,
but without considering the actual Rent of the Leased Premises pursuant to this
Lease.
1.11 Force Majeure Events. The term "Force Majeure Events" shall have
the meaning described in Section 14.8.
1.12 Governmental Restrictions. The term "Governmental Restrictions" as
used herein shall mean and include any and all laws, statutes, official
policies, ordinances, codes, formal decrees, rulings, regulations, writs,
injunctions, orders, rules, conditions of approval or authorizations of any
governmental entity, agency or political subdivision, now in force or hereafter
adopted, which are applicable to the Leased Premises or the use thereof as of
the date such term is being applied.
1.13 Hazardous Materials. The term "Hazardous Materials" as used herein
shall have the meaning set forth in Section 6.7(c).
1.14 Improvements. The term "Improvements" shall mean and include all
grading done on the Leased Premises as well as all Buildings, structures,
fixtures, excavation, parking areas, walkways, drives, landscape areas,
underground installations and all other improvements of whatsoever character
constructed on, around, under or over the Leased Premises by Tenant pursuant to
this Lease.
1.15 JPA. The term "JPA" refers to that certain Joint Powers Agreement
between the Master Landlord and the City of Los Angeles, dated June 17, 1998,
including all exhibits, amendments, restatements, extensions and modifications
thereof, and any successor agreement thereto.
1.16 Leased Premises. The term "Leased Premises" as used herein shall
have the meaning described in Article 2 below.
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1.17 Leasehold Mortgage. The term "Leasehold Mortgage" shall mean any
mortgage, deed of trust, assignment and leaseback for financing purposes, or
synthetic lease transaction or other established method of securing real
property financing, including the deeds of trust securing the Construction
Loan(s) and any permanent loan.
1.18 Lease Year. The term "Lease Year" as used herein shall mean each
of the consecutive twelve (12) calendar month periods beginning on the first day
of the first calendar month following the Commencement Date unless the
Commencement Date falls on the first day of a calendar month, in which event the
Lease Year shall commence on the Commencement Date.
1.19 Lender. The term "Lender" shall mean the owner and holder of any
Leasehold Mortgage permitted by this Lease.
1.20 Losses and Liabilities. The term "Losses and Liabilities" as used
herein shall mean all liabilities, claims, losses, causes of action, charges,
penalties, damages, costs and expenses (including reasonable attorneys' fees and
costs), of whatsoever character, nature and kind, whether to property or person,
whether by direct or derivative action, and whether known or unknown, suspected
or unsuspected, latent or patent.
1.21 Mortgage. The term "Mortgage" as used herein shall mean and
include any mortgage, deed of trust, monetary lien, financing conveyance or
other voluntary monetary lien of any kind and all appropriate modes of financing
real estate construction, development and ownership, including a sale and
leaseback, and corporate financing structured as a lease, commonly referred to
as "synthetic leasing".
1.22 Parcel or Parcels. The term "Parcel" shall refer to one of Parcel
1, Parcel 2, Parcel 3 or Parcel 4. The term "Parcels" shall refer to Parcel 1,
Parcel 2, Parcel 3 and Parcel 4 collectively.
1.23 Party or Parties. The term "Party" shall refer to one of Landlord
or Tenant; the term "Parties" shall refer to both Landlord and Tenant.
1.24 Permitted Exceptions. As used herein the term "Permitted
Exceptions" means (a) a lien to secure payment of real estate taxes due but not
yet payable, (b) item 5 of the Preliminary Title Report dated February 3, 1999,
Order No. 8132884-X52, issued by the Title Insurer, and (c) such other matters
as may be approved by Tenant in writing in its sole and absolute discretion.
1.25 Plans. The term "Plans" as used herein shall mean the plans
referenced in Section 6.2.
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1.26 Rent. The term "Rent" as used herein shall have the meaning
described in Section 4.2.
1.27 Representatives. The term "Representatives" as used herein shall
mean the agents, contractors, employees and (with respect to Master Landlord and
Landlord only) students or faculty of the referenced entity (to the extent
acting on behalf of such entity and within the scope of its employment or
contract).
1.28 Research Center. The term "Research Center" shall refer to the
Improvements to be constructed on the Leased Premises pursuant to this Lease.
1.29 Site Plan. The "Site Plan" as used herein shall mean and refer to
the preliminary Site Plan attached hereto as Exhibit B, as it may be amended
from time to time in accordance with the terms of this Lease.
1.30 Sublease(s); Subtenant. The term "Sublease(s)" as used herein
shall mean subleases and any other like agreements between Tenant and Subtenant
(including, but not limited to, any subleases which are subordinate to this
Lease (i.e., such as a sublease between Subtenant and its Subtenants)). The term
"Subtenant" or "Sublessee" as used herein shall mean the subtenant or other
corresponding party under any Sublease.
1.31 Term. The term "Term" as used herein shall mean the term of this
Lease as described in Section 3.1 below.
1.32 Title Insurer. The term "Title Insurer" as used herein shall mean
the Chicago Title Insurance Company.
1.33 Title Policy. The term "Title Policy" as used herein shall mean
and include the most current form of ALTA owner's policy of title insurance,
dated as of the Commencement Date, and with liability in the amount of
$65,000,000.00, insuring Tenant as the owner of the leasehold estate under the
Lease, subject only to the Permitted Exceptions, together with such endorsements
as required by Tenant.
1.34 Transfer Documents. The term "Transfer Documents" as used herein
shall have the meaning described in Section 9.2.
1.35 Transfer/Transferee. The term "Transfer" as used herein shall mean
and include any conveyance, transfer, sale, assignment, lease, Sublease,
license, concession, franchise, gift, hypothecation, Mortgage, pledge,
encumbrance, or the like, to any person or entity ("Transferee"), excluding any
Leasehold Mortgage which
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encumbers Tenant's leasehold estate created by this Lease.
1.36 Uncured Default(s). The term "Uncured Default(s)" as used herein
shall have the meaning described in Section 14.2(c).
1.37 University. The term "University" as used herein shall mean the
university campus at California State University, Northridge.
ARTICLE 2 - LEASED PREMISES
2.1 Leased Premises. The premises demised and leased hereunder ("Leased
Premises") consist of the real property located in the City, County of Los
Angeles, State of California, referred to as Parcels 1, 2 and 3, and more
particularly described in the legal description for that Parcel attached hereto
as Exhibit A, and depicted on Exhibit B, the Site Map, together with all
buildings, structures, improvements and fixtures now located thereon and all
right, title and interest of Landlord in and to all rights of way or use,
servitudes, licenses, easements, tenements, hereditaments and appurtenances now
or hereafter belonging or pertaining to the use of such real property during the
Term, including, but not limited to, any easements granted to Tenant pursuant to
Section 5.6.
2.2 Leased Premises; Condition of Premises; Zoning. Prior to the
Commencement Date, Tenant, at Tenant's sole expense, shall have investigated and
approved the physical condition of, and the condition of title with respect to,
the Leased Premises. Tenant acknowledges and agrees that Landlord makes no
representation or warranty, express or implied, written or oral, with respect to
the condition of the Leased Premises or its fitness or availability for any
particular use. Landlord shall provide the Title Policy (Landlord shall pay for
the CLTA portion of the Title Policy), insuring Tenant as the owner of the
leasehold estate under the Lease, subject only to the Permitted Exceptions.
Should Tenant determine during the excavation phase for the construction of the
Improvements that the physical condition of the Leased Premises is not as
anticipated, Tenant shall have a special right of termination as provided at
Section 4.6.
2.3 North Campus Library Annex . One of the buildings on the Leased
Premises as of the Commencement Date is the North Campus Library Annex (the
"Annex"). Landlord acknowledges and agrees that Tenant may use the Annex for any
of the Allowed Uses set forth at Exhibit F, and subject to Section 6.2 may make
whatever changes, structural modifications, or improvements as are required to
make the structure suitable for Tenant's purposes. From and after June 1, 1999
until the expiration of the Term (including any extensions of the Term in
accordance with Article 3 of this Lease) or earlier termination of this Lease,
Tenant shall have the right, but not the obligation (in its sole discretion), to
demolish and remove the Annex at Tenant's
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sole cost and expense, provided, however, that if Tenant has not demolished the
Annex on or before July 1, 2001, Tenant shall ensure that the exterior of the
Annex is in a clean and well kept condition.
ARTICLE 3 - TERM
3.1 Initial Term. The Term of this Lease shall be that period of time
beginning on the Commencement Date and ending at midnight on December 31, 2039,
unless the Term of this Lease is sooner terminated or extended as provided for
herein.
3.2 Options to Extend.
(a) Tenant with the prior written consent of Landlord, which
consent shall not be unreasonably withheld, may extend the original Term of this
Lease, subject to all the provisions of this Lease including but not limited to
provisions for increases in Rent, for one (1) additional period of ten (10)
years, followed by six (6) additional periods of five (5) years each, each such
period commencing upon the expiration of the term of the immediately preceding
period. With respect to each such extended term, Tenant shall give Landlord
written notice (in the manner prescribed by Section 18.6) of Tenant's intention
to exercise said option not more than thirty (30) months and not less than
twenty four (24) months before the end of the Term then in effect. Within sixty
(60) days after Landlord's receipt of said notice, Landlord shall advise Tenant
in writing whether Landlord consents or does not consent to such extended term.
If Landlord does not consent to such extended term, Landlord's written notice
shall state the reasons for withholding consent. Landlord's failure to respond
within sixty (60) days after its receipt of Tenant's notice of intention to
exercise its option shall be deemed to be a grant of consent. If Landlord does
not consent to such extended term, then such refusal shall be considered to be
Landlord's notice to terminate this Lease as provided below at Section 4.5,
Landlord's Special Right of Termination, and Tenant may exercise those rights
provided to Tenant by said Section 4.5. After the valid exercise of any option
to extend, all references in this Lease to the Term hereof shall be considered
to mean the Term as extended, and all references to the end of the Term shall be
considered to mean the end of the Term as extended.
(b) Tenant's right to exercise the option to extend for each period
is subject to satisfaction of the following conditions precedent: (i) this Lease
shall be in effect at the time notice of exercise of an option to extend is
given and on the last day of the Term of the Lease prior to its extension; and
(ii) Tenant shall not be in Default under any provision of this Lease at the
time notice of exercise of the option is given nor shall an Uncured Default
exist as of the last day of the Term prior to its extension.
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3.3 Possession; Covenant of Quiet Enjoyment.
(a) Sole possession of the Leased Premises shall be delivered to
Tenant on the Commencement Date free and clear of any other tenancies or rights
of occupancy or use, and Tenant shall take possession as of that date.
(b) Landlord covenants that, subject to the limitations expressly
set forth herein, Tenant, upon Tenant's timely payment of the Rent and
performance of Tenant's covenants and obligations under this Lease, may quietly
have, hold, and enjoy the Leased Premises during the Term of this Lease, without
hindrance or interruption by Landlord or anyone claiming by or through Landlord,
subject to Landlord's right to enter upon the Leased Premises as expressly
provided herein.
ARTICLE 4 - RENT PAYMENTS
4.1 Rent. The Rent payable for each Lease Year (the "Rent") shall be as
set forth in the Rent Schedule, Exhibit D hereto. Beginning on January 1, 2000,
the Rent shall be paid in advance in twelve (12) equal monthly installments
payable on or before the first day of each calendar month during the Term.
4.2 Adjustments to Rent.
(i) As of January 1, 2010 (the "First Adjustment Date") and as
of the commencement of each five (5) year anniversary of the First Adjustment
Date (each such date is referred to as a "Rent Adjustment Date") through and
including the twenty-fifth (25th) anniversary of the First Adjustment Date, the
Rent then in effect shall be raised by increases in the CPI as provided in this
Section, but in no event less than the Rent for the prior Lease Year, nor more
than 110% of the Rent for the prior Lease Year. For purposes of this adjustment,
the "base month" shall be December 1999, and the "adjustment month" shall be the
calendar month immediately prior to each Rent Adjustment Date. The increase
shall be calculated by multiplying the Rent by a fraction in which the numerator
is the CPI for the adjustment month and the denominator is the CPI for the base
month, and Rent so calculated shall commence effective as of that Rent
Adjustment Date.
(ii) Effective January 1, 2040, the Rent then in effect shall be
adjusted to equal the Fair Market Rent as of such adjustment date without any
limitation on the percentage of such adjustment; provided, however, that in no
event shall the adjusted Rent be less than the Rent for the prior Lease Year.
(iii) Effective January 1, 2045, and as of each Rent Adjustment
Date
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thereafter, the Rent then in effect shall be raised by increases in the CPI as
provided in Section 4.2(i) above as of such Rent Adjustment Date, but in no
event shall the adjusted Rent be less than the Rent for the prior Lease Year,
nor more than 110% of the Rent for the prior Lease Year.
(iv) If the Fair Market Rent has not been determined as of January
1, 2040, Tenant shall continue to pay Rent in an amount equal to the Rent due
prior to the Rent Adjustment Date. If the Rent as adjusted is higher than the
prior Rent, the excess amount shall be payable ten (10) days after determination
of the Fair Market Rent as provided below, with interest at the Agreed Rate from
the date such Rent was due until paid.
(v) In addition, the Rent may be adjusted should Landlord determine
to pay all or a portion of "Landlord's Portion" as provided below at Section
6.5(b).
4.3 Fair Market Rent. The amount of Fair Market Rent, if not otherwise
agreed to by the parties, shall be resolved by Mediation and, if such Mediation
does not result in an agreement as to such Fair Market Rent, then by Arbitration
in accordance with the procedures set forth below. THE ONLY ISSUE TO BE
DETERMINED BY SUCH PROCEDURES IS THE AMOUNT OF FAIR MARKET RENT AS REQUIRED
UNDER SECTION 4.2 ABOVE AND NO OTHER ISSUE.
(a) Mediation. 90 days prior to the Rent Adjustment Date, and at
the request of Tenant between 28 and 22 months prior to January 1, 2040 (i.e.,
between August 1, 2037 and March 1, 2038), Landlord shall deliver to Tenant its
valuation of the Fair Market Rent for the Leased Premises, together with such
assumptions and data sufficient to provide Tenant with an understanding of how
Landlord arrived at such valuation. If Tenant does not respond to Landlord's
valuation within ninety (90) calendar days, then Landlord's determination shall
be final. If Tenant disagrees with Landlord's valuation, then Tenant shall
deliver to Landlord its valuation of the Fair Market Rent for the Leased
Premises, together with such assumptions and data as are sufficient to provide
Landlord with an understanding of how Tenant arrived at its valuation. If the
parties are unable to agree upon the Fair Market Rent within sixty (60) days of
Landlord's receipt of Tenant's valuation, then Landlord shall call a special
meeting to be held at a mutually convenient time within sixty (60) days of
Landlord's receipt of Tenant's valuation.
(i) Special Meeting. Landlord shall attempt to employ the
services of a third person mutually acceptable to the parties to conduct such
mediation within 5 days of his or her appointment. Landlord shall arrange for
the special meeting to be attended by the independent mediator, and shall
provide the independent mediator with Landlord's and Tenant's valuations of the
Fair Market Rent for the Leased Premises,
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together with their respective assumptions and data as are sufficient to provide
the independent mediator with an understanding of how Landlord and Tenant
arrived at their valuations. The meeting shall be held within five (5) working
days of a written request for the meeting. The meeting shall be attended by
representatives of Landlord, the Tenant and any experts involved, and the
independent mediator, who shall conduct the special meeting in accordance with
American Intermediation Service procedures. The costs of the mediator shall be
shared equally by Landlord and Tenant.
(ii) The proceedings under this Section shall be subject to
California Evidence Code Sections 1152 and 1152.5. By executing this Lease, the
parties agree that Section 1152.5 of the Evidence Code shall apply to the
special meeting and mediation and further agree to abide by subparagraphs (a)
and (b) of that section, which provide as follows:
(iii) Subject to the conditions and exceptions provided in
this section, when persons agree to conduct and participate in a mediation for
the purpose of compromising, settling, or resolving a dispute:
(1) Evidence of anything said or of any admission made
in the course of the mediation is not admissible in evidence, and disclosure of
any such evidence shall not be compelled, in any civil action or applicable
arbitration in which, pursuant to law, testimony can be compelled to be given.
(2) Unless the document otherwise provides, no document
prepared for the purpose of, or in the course of, or pursuant to, the mediation,
or copy thereof, is admissible in evidence, and disclosure of any such document
shall not be compelled, in any civil action in which, pursuant to law, testimony
can be compelled to be given.
(iv) Subdivision (iii) does not limit the admissibility of
evidence if all persons who conducted or otherwise participated in the mediation
consent to its disclosure.
(v) If, as a result of the mediation, an agreement as to Fair
Market Rent is reached, then the parties also agree that the mediator shall be
appointed an arbitrator for the sole purpose of signing the mediation agreement;
that the mediation agreement shall have the same force and effect as an
arbitration award; and that judgment may be entered upon it in accordance with
applicable law in any court having jurisdiction thereof.
(vi) If, as a result of the mediation, an agreement as to Fair
Market Rent is not reached, then the parties shall resolve the issue by
arbitration, as set forth below.
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(vii) If the parties are unable to agree on the third person to
be selected pursuant to subparagraph (i) above, or, if on completion of such
mediation, the parties are unable to agree and settle the dispute, then the
dispute shall be referred to arbitration in accordance with paragraph (b) below.
(b) ARBITRATION OF DISPUTE AS TO FAIR MARKET RENT. TENANT AND
LANDLORD SHALL APPOINT A TOTAL OF THREE (3) INDEPENDENT APPRAISERS, WHO SHALL BE
MEMBERS (M.A.I.) OF THE APPRAISAL INSTITUTE, OR IF SUCH INSTITUTE DOES NOT
EXIST, THEN A COMPARABLE ORGANIZATION, TO APPRAISE THE FAIR MARKET RENT OF THE
LEASED PREMISES. ONE (1) APPRAISER SHALL BE APPOINTED BY TENANT AND ONE (1) BY
LANDLORD WITHIN THIRTY (30) DAYS OF THE FAILURE OF MEDIATION. THE THIRD
APPRAISER SHALL BE SELECTED BY THE APPOINTED APPRAISERS. IF EITHER PARTY SHALL
FAIL TO TIMELY APPOINT AN APPRAISER, THE APPOINTED APPRAISER SHALL SELECT THE
SECOND APPRAISER WITHIN TEN (10) DAYS AFTER SUCH PARTY'S FAILURE TO SO APPOINT.
IF THE TWO (2) APPRAISERS SO DETERMINED SHALL BE UNABLE TO AGREE ON THE
SELECTION OF A THIRD APPRAISER, THEN EITHER APPRAISER WITHIN THIRTY (30) DAYS OF
THEIR BEING APPOINTED, ON BEHALF OF BOTH, MAY REQUEST THE ASSOCIATION OR
ORGANIZATION OF MAI APPRAISERS OF WHICH SUCH APPRAISER IS A MEMBER TO MAKE SUCH
APPOINTMENT (OR, IF SUCH ORGANIZATION OR ASSOCIATION SHALL DECLINE TO MAKE SUCH
APPOINTMENT, EITHER PARTY MAY APPLY TO THE AMERICAN ARBITRATION ASSOCIATION, LOS
ANGELES, CALIFORNIA, OR TO ANY COURT IN LOS ANGELES COUNTY, CALIFORNIA TO MAKE
SUCH APPOINTMENT). IT IS SPECIFICALLY CONTEMPLATED AND AGREED BETWEEN THE
PARTIES THAT THE PROVISIONS OF SECTION 1283.05 OF THE CALIFORNIA CODE OF CIVIL
PROCEDURE ARE INCORPORATED HEREIN. SUCH APPRAISERS SHALL DETERMINE THE FAIR
MARKET RENT OF THE LEASED PREMISES AFTER AT LEAST ONE NOTICED HEARING AT WHICH
LANDLORD AND TENANT ARE GIVEN THE OPPORTUNITY TO PRESENT THEIR DETERMINATION OF
THE FAIR MARKET RENT TOGETHER WITH THEIR SUPPORTING ASSUMPTIONS AND DATA. THE
FAIR MARKET RENT OF THE LEASED PREMISES SHALL BE THE AVERAGE OF THE VALUATIONS
OF THE RENT AS DETERMINED BY SUCH THREE (3) APPRAISERS; PROVIDED, HOWEVER, THAT
IF ANY SUCH VALUATION DEVIATES MORE THAN TEN PERCENT (10%) FROM THE MEDIAN OF
SUCH VALUATIONS, THE FAIR MARKET RENT OF THE LEASED PREMISES SHALL BE THE
AVERAGE OF THE TWO (2) CLOSEST SUCH PROPOSALS. UNLESS OTHERWISE INDICATED IN
THIS LEASE, THE COST OF THE ARBITRATION SHALL BE BORNE EQUALLY BY TENANT AND
LANDLORD.
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NOTICE: BY INITIALLING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY
DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES"
PROVISIONS DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU
ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A
COURT OR JURY TRIAL BY INITIALLING IN THE SPACE BELOW YOU ARE GIVING UP YOUR
JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS SUCH RIGHTS ARE SPECIFICALLY
INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION. IF YOU REFUSE TO SUBMIT TO
ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE
UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO
THIS ARBITRATION PROVISION IS VOLUNTARY. WE HAVE READ AND UNDERSTAND THE
FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN
THE "ARBITRATION OF DISPUTES" PROVISION TO NEUTRAL ARBITRATION.
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LANDLORD'S INITIALS TENANT'S INITIALS
4.4 Additional Rent . In addition to the Rent, Tenant shall pay or
cause the Additional Rent to be paid throughout the Term. Additional Rent shall
constitute rent payable hereunder except that unless specifically indicated in
this Lease such amounts shall be paid directly to the party to whom such amount
is owed, not Landlord, unless such amount has been paid by Landlord pursuant to
Article 14, in which case such amount shall be paid to Landlord.
4.5 Landlord's Special Right to Terminate Lease. From and after January
1, 2040, Landlord may terminate this Lease upon ten (10) years prior written
notice (the "Notice to Quit"), which Notice to Quit may not be given prior to
January 1, 2040. Landlord's notice that it is withholding its consent to
Tenant's election to exercise its Option to extend the Term of this Lease
pursuant to Section 3.2 above shall also constitute Landlord's Notice to Quit
pursuant to this Section. Thereafter, Tenant shall notify Landlord in writing of
the date it will quit the Leased Premises, which date shall be the later of (i)
January 1, 2043, or (ii) the first anniversary of the date Landlord received
Tenant's notice of the date it will vacate the Leased Premises, or (iii) the
date specified by Tenant in its notice, and this Lease shall terminate as of
that date. In any event Tenant shall vacate the Leased Premises, and this Lease
shall terminate, on or before the tenth anniversary of the date Tenant received
the Notice to Quit. Upon vacation of the Leased Premises by Tenant, Landlord
shall purchase the Buildings on the Leased Premises at their fair market value
as of the date of vacation, such payment to be due and payable within 60 days
after Tenant's vacation of the Leased Premises.
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Amounts not paid when due shall bear interest at the Agreed Rate. The fair
market value of the Buildings shall be determined by mediation, then arbitration
in accordance with the procedures provided in Section 4.3 above.
4.6 Tenant's Special Rights to Terminate Lease.
(a) Termination Because of Unanticipated Condition. If during the
construction phase of the construction of the Improvements on the Leased
Premises (or on Parcel 4) Tenant (or the tenant under the sublease for Parcel 4)
discovers an unanticipated physical condition (whether natural or not) which
substantially interferes with the construction of the Improvements on the Leased
Premises (the "Condition"), Tenant shall immediately notify Landlord of the
nature and location of the Condition discovered and shall include all findings
and reports of Tenant's consultants. For a period of sixty (60) days thereafter
Tenant shall undertake to perform such tests as are required and to prepare
estimates of the cost to remediate the Condition, and shall apprise Landlord on
a weekly basis of the results of its tests, and when available, a detailed, good
faith estimate of the cost required to remediate the Condition prepared by
Tenant's consultants. Said estimate shall be subject to reasonable review and
approval by Landlord. If Tenant's estimate of the cost to remediate the
Condition is in the aggregate less than $500,000, then Tenant shall undertake to
perform the remediation in a continuous and diligent manner; if the actual costs
to remediate the Condition are in excess of $500,000, Tenant shall be
responsible to pay such overage. If Tenant's estimate of the cost to remediate
the Condition is in the aggregate greater than $500,000 for the Leased Premises,
then Tenant may terminate this Lease by written notice (the "Notice to
Terminate"), such notice to be effective ninety (90) days after Landlord's
receipt of it. Upon receipt of the Notice to Terminate, Landlord may determine
to fund the overage of the cost to remediate and shall so advise Tenant in
writing (the "Notice to Proceed"). The Notice to Proceed shall be delivered to
Tenant prior to the 90th day after Landlord's receipt of Tenant's notice to
terminate, and upon Tenant's receipt of the Notice to Proceed, Tenant's Notice
to Terminate shall be void and this Lease shall remain in effect. Thereafter,
Tenant shall undertake the remediation of the Condition, shall pay the first
$500,000 of the cost of the remediation and Landlord shall be responsible for
the overage up to the Landlord's Share including interest at the Agreed Rate,
which overage shall, at Landlord's election, be funded by Tenant and repaid with
credits against the Rent. If the actual cost to remediate the Condition is, or
after commencement of the remediation is anticipated to be, in excess of the
amount which Landlord is willing to contribute plus $500,000, either party may
by written notice to the other terminate this Lease, effective 30 days after
receipt by the other party, the parties shall share equally in the cost to rough
grade the Leased Premises to approximate its original condition, and thereafter
the parties shall have no further liabilities one to the other.
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(b) Termination Because of Increased Rent. If the Rent as adjusted
on January 1, 2040, is greater than 110% of the Rent in effect immediately prior
to such adjustment, Tenant may terminate this Lease by delivering to Landlord
written notice of its intention to terminate this Lease on or before January 1,
2041. Such notice shall state the date upon which Tenant will vacate the Leased
Premises and the Lease will terminate, which date shall not be prior to January
1, 2043, and not later than January 1, 2050. Upon termination of the Lease in
accordance with this Section and vacation of the Leased Premises by Tenant,
Landlord shall purchase the Buildings on the Leased Premises at their fair
market value as of the date of vacation, such payment to be due and payable
within 60 days after the date of vacation. Amounts not paid when due shall bear
interest at the Agreed Rate. The fair market value of the Buildings shall be
determined by mediation, then arbitration in accordance with the procedures
provided in Section 4.3 above.
4.7 Miscellaneous. All payments of Rent shall be made to Landlord as
they become due in lawful money of the United States of America in cash or by
corporate check drawn on sufficient available funds, at such place as is
designated herein by Landlord for the receipt of notices or such other place as
shall be designated to Tenant by Landlord in writing from time to time.
4.8 Triple Net Lease; No Counterclaim, Abatement, etc.. All Rent shall
be paid absolutely net to Landlord, so that this Lease shall yield to Landlord
the full amount of the installments of all Rent throughout the Term, and (unless
otherwise expressly provided herein) shall be paid without assertion of any
counterclaim, setoff, deduction or defense and, except as otherwise expressly
provided herein, without abatement, suspension, deferment, diminution or
reduction. Under no circumstances or conditions, whether now existing or
hereafter arising, or whether beyond the present contemplation of the parties,
shall Landlord be expected or required to make any payment of any kind
whatsoever or be under any obligation or liability hereunder, except as herein
expressly set forth. Except as otherwise expressly provided herein, this Lease
shall continue in full force and effect, and the obligations of Tenant hereunder
shall not be released, discharged or otherwise affected, by reason of: (a) any
damage to or destruction of the Leased Premises or Improvements or any part
thereof or any Taking of the Leased Premises or the Improvements or any part
thereof; (b) any restriction or prevention of or interference with any use of
the Leased Premises or the Improvements or any part thereof which materially
interferes with Tenant's possession or use of the Leased Premises (other than a
breach of Landlord's covenant of quiet enjoyment set forth at Section 3.3); (c)
any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other proceeding relating to Landlord, or any action
taken with respect to this Lease by any trustee or receiver of Landlord with
respect to this Lease by any trustee or receiver of Landlord, or by any court,
in any proceeding; (d) any claim which Tenant has or might have
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against Landlord; (e) any failure on the part of Landlord to perform or comply
with any of the terms hereof or of any other agreement with Tenant; or (f) any
other occurrence whatsoever, whether similar or dissimilar to the foregoing, in
each case, whether or not Tenant shall have notice or knowledge of any of the
foregoing. Except as expressly provided in this Lease, the obligations of Tenant
shall be separate and independent covenants and agreements.
ARTICLE 5 - USE OF THE LEASED PREMISES,
MAINTENANCE AND HAZARDOUS MATERIALS
5.1 Use of the Leased Premises.
(a) General. Tenant covenants and agrees for itself, its successors
and assigns, which covenants shall run with the land and bind every successor or
assign in interest of Tenant, that during development and use of the Leased
Premises pursuant to this Lease, neither the Leased Premises nor any portion
thereof shall be improved, used or occupied in violation of any Governmental
Restrictions or the Master Leases.
(b) Research and Development Center. During the Term, Tenant and
any of its Sublessees or Subtenants shall use the Leased Premises only for those
Allowed Uses as set forth at Exhibit F, attached hereto.
(c) Conference Center. As part of the Improvements to be
constructed on the Leased Premises, the Tenant shall construct a conference
facility. In the design of the conference rooms and facilities within the
conference facility, Tenant shall give due consideration to the needs of the
University as expressed by Landlord. For so long as Tenant maintains such
conference facility on the Leased Premises, Landlord, Master Landlord and their
permittees (including but not limited to faculty, staff and students) shall
enjoy the use of the Conference Center jointly with Tenant and its Subtenants on
a noninterfering basis, under the control of Tenant, and in accordance with
"Conference Center and University Use Guidelines" to be negotiated and agreed to
by the parties within one hundred eighty (180) days after the Commencement Date.
Once agreed to, the Conference Center and University Use Guidelines may only be
amended by written agreement between Master Landlord and Tenant. Nothing
contained in this Lease shall be interpreted to prevent Tenant from charging
user fees for the use of the Conference Center or other portions of the
Improvements, or Landlord from charging user fees for the use of University
facilities, in accordance with a user-fee schedule to be negotiated between the
parties.
5.2 No use of Hazardous Materials on the Leased Premises. Tenant
covenants and agrees that it shall not, and that any Sublease shall provide that
the
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Subtenant shall not, treat, use, store, dispose, release, handle or otherwise
manage Hazardous Materials (as defined in Section 6.7) on the Leased Premises
except in connection with any construction, operation, maintenance or repair of
the Improvements or in the ordinary course of its business, and that such
conduct shall be done in compliance with all applicable federal, state and local
laws, including all Environmental Laws. Tenant's violation of the foregoing
prohibition shall constitute a breach hereunder and Tenant shall indemnify, hold
harmless and defend the Landlord for such violation as provided below.
5.3 Notice and Remediation by Tenant. Tenant shall promptly give the
Landlord written notice of any reportable release of any Hazardous Materials,
and/or any notices, demands, claims or orders received by Tenant from any
governmental agency pertaining to Hazardous Materials which may affect the
Leased Premises.
5.4 Environmental Indemnity.
(a) MiniMed agrees to indemnify, protect, defend, save and hold
harmless Landlord and its successors and assigns, officers, members, directors,
shareholders, and Representatives from and against any and all debts, duties,
obligations (including any remediation obligations or clean up costs imposed by
any Governmental Restrictions), liabilities, suits, claims, demands, penalties,
fines, causes of action, damages, losses, costs and expenses, including, without
limitation, attorneys' fees and expenses (and including any allocable costs of
any of the foregoing parties' in-house counsel) arising on or accruing as a
result of the presence, use, storage, handling, treatment, generation, release,
discharge, refining, manufacturing, dumping or disposal of any Hazardous
Materials (as defined in Section 6.7 of this Lease) or other kinds of
contamination or pollutants of any kind into the air, soil, groundwater or
surface water on, under, in or about the Leased Premises (whether legal or
illegal, accidental or intentional), that is caused by MiniMed or its
Representatives. The indemnity provided in this Section 5.4(a) shall survive the
Termination of the Lease.
(b) Landlord agrees to indemnify, protect, defend, save and hold
harmless Tenant and MiniMed and all of their respective affiliates, successors
and predecessors in interest, assigns, officers, members, directors,
shareholders, and Representatives from and against any and all debts, duties,
obligations (including any remediation obligations or clean up costs imposed by
any Governmental Restrictions), liabilities, suits, claims, demands, penalties,
fines, causes of action, damages, losses, costs and expenses, including, without
limitation, attorneys' fees and expenses (and including any allocable costs of
any of the foregoing parties' in-house counsel) (I) arising on or accruing
during the period prior to the Commencement Date as a result of the presence,
use, storage, handling, treatment, generation, release, discharge, refining,
manufacturing, dumping or disposal of any Hazardous Materials (as defined in
Section
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6.7 of this Lease) or other kinds of contamination or pollutants of any kind
into the air, soil, groundwater or surface water on, under, in or about the
Leased Premises (whether legal or illegal, accidental or intentional), or (ii)
arising on or accruing during the period from and after the Commencement Date as
a result of the presence, use, storage, handling, treatment, generation,
release, discharge, refining, manufacturing, dumping or disposal of any
Hazardous Materials (as defined in Section 6.7 of this Lease) or other kinds of
contamination or pollutants of any kind into the air, soil, groundwater or
surface water on, under, in or about the Leased Premises (whether legal or
illegal, accidental or intentional) that is caused by Master Landlord, Landlord
or their Representatives. The indemnity provided in this Section 5.4(b) shall
survive the Termination of the Lease.
5.5 Termination; Subtenants. The agreements and obligations of Tenant
under this Article 5 with regard to indemnification of Landlord shall survive
the scheduled termination or sooner expiration of the Term for any reason, for
five (5) years and all claims relating thereto must be delivered in writing to
Tenant within such period. No action by any subtenant in violation of its
sublease shall constitute a cause to terminate this Lease provided that Tenant
diligently pursues its available remedies against such subtenant.
5.6 Grant of Easements. Tenant may enter into agreements granting
easements reasonably necessary for the development and operation of the Research
Center provided they are limited to the expiration or sooner termination of this
Lease, are subordinate to Master Landlord's fee interest, and will not interfere
with any rights and remedies of Landlord hereunder. Tenant must obtain
Landlord's prior written consent to any agreement that would grant an easement
extending beyond the Term hereof, or that would interfere with any of Landlord's
rights and remedies hereunder. A grant of easement made in accordance with this
Section 5.6 shall not be deemed a "Transfer" within the meaning of Section 9.2.
Landlord agrees that it will not unreasonably withhold its consent to and will
join in the execution of such easements over the Leased Premises as may be
necessary to provide utilities to the Leased Premises; provided, Landlord shall
not be obligated to incur any cost or expense in connection with such an
easement and Tenant shall indemnify, defend and hold Landlord and Landlord's
Representatives harmless from any Losses and Liabilities arising from the
creation or use of such easements during the Term of this Lease.
ARTICLE 6 - CONSTRUCTION BY MINIMED
6.1 Development of Improvements. MiniMed shall construct or cause to be
constructed on the Leased Premises the improvements necessary for Tenant to
develop and maintain its portion of the proposed Research Center on its Parcel,
all in
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substantial conformity with the construction plans, drawings and related
documents approved by Landlord pursuant to this Article 6. The Master Landlord
has entered into a Joint Powers Agreement with the City which sets forth the
jurisdiction of those parties with respect to the development of these
Improvements. MiniMed agrees that it will implement the Mitigation Monitoring
Plan, attached as Attachment No. 5 to the JPA, and those portions of the
Mitigation Measures which the University has the obligation to perform pursuant
to the Mitigation Monitoring Plan, and that it will cause the construction, use
and occupancy of the Research Center to comply with the mitigation measures set
forth in Attachment No. 6 attached to the JPA. Landlord hereby agrees to execute
such assignments, applications or other instruments, as required to allow
MiniMed, at its cost, to exercise the rights of Master Landlord pursuant to the
JPA. The Parties and MiniMed acknowledge and agree that during the term of the
JPA the standards set forth in the JPA are the standards to be applied with
respect to this Lease for land use, environmental quality, building and design
codes, seismic, life safety, and any other matters described in the JPA, and
that no modification shall be made to the standards set forth therein without
the written consent of each Party. The Parties acknowledge that in the future it
may be necessary or desirable for Tenant or MiniMed to obtain, on a voluntary
basis, certain permits, subdivision approvals, or other land use approvals, and
if the Tenant or MiniMed, as applicable, so desires to process and obtain such
approvals, Landlord agrees to cooperate and assist Tenant or MiniMed, as
applicable, in the filing of such applications, including signing any such
applications if required, in connection with the development of the Leased
Premises.
6.2 Conditions to Construction of Improvements. Before MiniMed begins
construction of the Improvements on the Leased Premises, and before any building
materials are delivered to the Leased Premises by MiniMed or under MiniMed's
authority, and as a condition to MiniMed's right to proceed with the
construction of the Improvements, MiniMed shall have complied with all of the
conditions set forth in this Section 6.2.
(a) Plans and Specifications.
(i) It is the intention of Landlord, MiniMed and Tenant that
all Improvements within the Leased Premises be constructed, installed, erected,
operated and maintained so that the Improvements shall be aesthetically and
architecturally harmonious. Accordingly, except as otherwise provided
hereinafter, all Improvements within the Leased Premises, including initial
construction and any major alterations (but not including tenant improvements
other than as may be requested by Landlord pursuant to Section 5.1(c)),
additions, exterior remodeling or reconstruction of any Improvements following
the initial construction thereof, shall be performed only in accordance with
approved plans for such work as provided herein. As of the Commencement Date,
the schematic design for the Research Center has been approved.
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(ii) Prior to the commencement of the construction and/or
installation of any Improvements whatsoever on the Leased Premises or any part
thereof by Tenant, MiniMed or any Subtenant, MiniMed shall deliver to Landlord
detailed plans through and including construction drawings (the "Plans") of
scaled elevations, exterior design concepts, material selection and color for
the exterior surfaces of the proposed Improvements (which Plans shall include a
grading plan and/or a utility plan, to the extent applicable). Landlord shall in
writing either approve or disapprove the Plans within thirty (30) days of the
receipt thereof. If Landlord fails to approve or disapprove the Plans in
accordance with the terms of this Lease within such thirty (30) day period, the
Plans shall be deemed disapproved. Upon a deemed disapproval, Tenant or MiniMed
may deliver a notice to Landlord which states that there has been a deemed
disapproval, requesting that Landlord approve or disapprove the Plans, stating
that Landlord must approve or disapprove the Plans within 15 days after
Landlord's receipt of this notice, and that failure by Landlord to either
approve or disapprove of the Plans within such 15 day period will result in
deemed approval. If Landlord fails to approve or disapprove the Plans in
accordance with the terms of this Lease within such fifteen (15) day period, the
Plans shall then be deemed approved. Upon submission of any disapproval,
Landlord shall inform Tenant and MiniMed in writing (the "Plan Disapproval
Notice") of the reasons for disapproval with particularity and the required
changes to the Plans. MiniMed shall have ten (10) business days from receipt of
any Plan Disapproval Notice within which to notify Landlord that MiniMed agrees
to make such changes or objects to any required changes. If MiniMed notifies
Landlord within said 10-day period of its objections to the required changes,
then Landlord and MiniMed agree to meet to discuss their differences within ten
(10) days after MiniMed gives such notice. Following such meeting, MiniMed shall
revise such Plans and resubmit them to Landlord by the later of (i) thirty (30)
days after receipt of the Plan Disapproval Notice, or (ii) ten (10) days after
such meeting, unless the nature of such changes requires a longer period of
time, in which case MiniMed shall resubmit said Plans or other submissions as
soon as possible, and, in any case, no later than seventy-five (75) days after
receipt of the Plan Disapproval Notice. Any resubmissions by MiniMed shall be
approved or disapproved and revised within the times set forth herein with
respect to the initial submission. Landlord shall not disapprove of any Plans
for design or aesthetic reasons if the same are compatible and/or in substantial
conformity with the general architectural design, aesthetic quality, and
exterior materials of Improvements previously approved by Landlord and are a
logical evolution of the previously approved schematic design. Landlord shall
exercise its discretion with respect to approval or disapproval of any such
plans in a reasonable and uniform manner.
(iii) Upon the completion of the initial construction and
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installation of any Improvements, the same shall not be thereafter materially
changed or materially altered without the prior written approval of Landlord if
such changes or alterations would substantially modify the exterior appearance
of such Improvements, which approval shall be sought pursuant to the terms set
forth above and shall not be unreasonably withheld in accordance with the
criteria set forth above. Landlord shall not withhold or delay its approval of
any proposed changes or alterations to any Improvements which are consistent
with the architectural design, aesthetic quality, and exterior materials of
Improvements existing at the Leased Premises and previously approved by
Landlord. In addition, Landlord shall have no approval rights with respect to
changes to exterior plans or materials which are required by any governmental
authority. Nothing herein shall require Tenant or MiniMed to obtain Landlord's
approval of the interior designs of the Improvements.
(iv) During the preparation of any revisions to the Plans or
the preparation of any other submissions, Landlord and MiniMed shall hold
progress meetings to coordinate the preparation, submission and review thereof.
Landlord and MiniMed shall communicate and consult informally as frequently as
is necessary to ensure that the formal submission of all documents and Plans to
Landlord shall receive reasonably prompt and speedy consideration.
(b) Site Plan. The Parties and MiniMed acknowledge that the
preliminary Site Plan attached to this Lease as Exhibit B is a conceptual Site
Plan of the Research Center, which Site Plan is hereby approved by Landlord. Any
material modifications to the Site Plan shall be subject to the approval of
Landlord, which approval shall not be unreasonably withheld or delayed. In the
event MiniMed submits a revised Site Plan to Landlord, Landlord shall approve or
disapprove the revised Site Plan within forty five (45) days of MiniMed's
submittal. If Landlord fails to approve or disapprove the revised Site Plan in
accordance with the terms of this Lease within such forty five (45) day period,
the revised Site Plan shall be deemed disapproved. Upon a deemed disapproval,
MiniMed may deliver a notice to Landlord which states that there has been a
deemed disapproval, requesting that Landlord approve or disapprove the Site
Plan, stating that Landlord must approve or disapprove the Site Plan within 15
days after Landlord's receipt of this notice, and that failure by Landlord to
either approve or disapprove the Site Plan within such 15 day period will result
in deemed approval. If Landlord fails to approve or disapprove the Site Plan in
accordance with the terms of this Lease within such fifteen (15) day period, the
Site Plan shall then be deemed approved. Upon submission of any disapproval,
Landlord shall inform Tenant and MiniMed in writing with particularity of the
reasons for disapproval. Tenant and MiniMed acknowledge that any proposed
increases in the scale, density, square footage, bulk or other factors which may
impact the environment may require further review pursuant to the California
Environmental Quality Act prior to a grant of approval.
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If there is a dispute between the Parties and MiniMed regarding an
acceptable, revised site plan, the Parties and MiniMed shall attempt in good
faith to mediate such dispute and use their best efforts to reach agreement on
the matters in dispute. Within 5 days of the request of a Party or MiniMed, the
requesting party shall attempt to employ the services of a third person mutually
acceptable to the Parties and MiniMed to conduct such mediation within 5 days of
his appointment. If on completion of such mediation, the parties are unable to
agree upon an acceptable, revised site plan, then Tenant shall have those
remedies available at law or equity.
(c) Construction Contracts. With respect to any Improvements which
MiniMed may elect to construct, MiniMed shall submit to Landlord for
informational purposes only, a copy of the final construction contracts relating
thereto, which submission shall occur prior to the commencement of any
significant construction work pursuant to any such construction contracts.
(d) Builder's Risk and Other Insurance. Prior to commencing
construction of any of the Improvements, MiniMed shall have obtained (and
delivered insurance certificates therefor to Landlord and Tenant) all insurance
coverage required under Article 12 of this Lease.
6.3 Construction of Improvements. All Improvements, together with all
off-site improvements that may be constructed by reason of Governmental
Requirements as a condition to the construction of Improvements upon the Leased
Premises, shall be constructed by MiniMed in a good and workmanlike manner using
materials of good quality and in substantial compliance with the Plans as
modified pursuant to this Article 6, and shall comply with all applicable
governmental permits, laws, ordinances and regulations.
6.4 Completion of Improvements and Other Work: Quality and Compliance
With Law. MiniMed covenants that the Improvements to be constructed on the
Leased Premises, and all other construction thereon, when undertaken, while in
progress and as completed: (i) will comply with all Governmental Restrictions,
including, without limitation, all laws and ordinances necessary to permit the
development, completion and lease of the Leased Premises pursuant to this Lease;
(ii) will be entirely on the Leased Premises and will not encroach upon the land
of others; (iii) will be wholly within any enforceable building restriction
lines, however established, and will not violate any enforceable use restriction
or any applicable easement, license, covenant, condition or restriction of
record; and (iv) will comply in all material respects with the Site Plan (as may
be modified as provided herein), all Plans approved for such Improvements
pursuant to Section 6.2(a) (as may be modified as provided herein), and all
provisions of this Lease. All work performed on the Leased Premises pursuant to
this Lease, or authorized by this Lease, shall be done in a good workmanlike
manner.
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The interior architectural design and appearance and the interior improvements
and finish of each of the structures on the Leased Premises shall not be subject
to the review and approval of Landlord. As noted above at Section 5.1(c),
Landlord may comment on the conference rooms and facilities to be included in
the Conference Facility, which comments are to be considered by Tenant and
MiniMed, but Landlord does not have approval rights over such conference rooms
or facilities.
6.5 Construction Cost.
(a) In General . Tenant shall bear the cost of developing the
Leased Premises and constructing the Improvements, including all fees, except as
expressly provided in the following paragraph.
(b) Mitigation Measures . As noted above at Recital F, MiniMed
(through Tenant or otherwise) will be responsible to pay for and to construct
certain of those mitigation measures (the "Mitigation Measures") applicable to
the development of the Leased Premises, and that Landlord and MiniMed (through
Tenant or otherwise) will share the cost of such mitigation measures; Landlord's
payment for its portion of such mitigation measures will be by way of Rent
credits, which are reflected in the Rent Schedule, as set forth at Exhibit D.
The Parties and MiniMed estimate that the Mitigation Measures will cost
approximately $2,481,000. The Parties and MiniMed agree that MiniMed (through
Tenant or otherwise) will contribute $111,000 toward the cost of the Mitigation
Measures, Landlord will use its best efforts to obtain a governmental grant (the
"Grant") in an amount of at least $1,470,000 to be made available to MiniMed to
be used to pay for the Mitigation Measures, and that Landlord will pay its
contribution of the cost of the Mitigation Measures ("Landlord's Portion")
through rent credits incorporated in the Rent Schedule. Landlord's Portion shall
not exceed $900,000. If the cost of the Mitigation Measures exceeds $2,481,000,
MiniMed's shall be responsible to pay such overage. Landlord reserves the right
to pay to MiniMed (or its designee) the unamortized portion of the Landlord's
Portion allocated to this Lease. In order to exercise such right, Landlord shall
provide Tenant, MiniMed and Tenant's Lender with sixty (60) days prior written
notice of its intention to pay all or a portion of the unamortized portion of
the Landlord's Portion together with Landlord's calculations of the revised Rent
Schedule. Within thirty (30) days after MiniMed's and Tenant's (and its or their
Lender's) receipt of such notice and revised schedule, the Parties, MiniMed and
Lender shall confer for the purpose of agreeing upon the revised Rent Schedule.
Upon such agreement, the Parties shall amend this Lease to incorporate the
amended Rent Schedule, and thereafter Tenant shall pay the "gross" rent as
indicated on the Rent Schedule.
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6.6 Mechanic's, Materialman's, Contractor's, or Subcontractor's Liens.
(a) MiniMed shall provide Landlord with not less than twenty (20)
days' prior written notice of the commencement of any major alterations to the
Improvements and Landlord shall have the right to enter upon the Leased Premises
to post customary notices of non-responsibility with respect thereto. Subject to
Tenant's right to contest as hereinafter provided, at all times during the Term
of this Lease, MiniMed shall keep the Leased Premises, including all Buildings
and Improvements now or hereafter located on the Leased Premises, free and clear
of all liens and claims of liens for labor, services, materials, supplies, or
equipment performed on or furnished to the Leased Premises (other than Leasehold
Mortgages permitted by this Lease). MiniMed shall (i) promptly pay and
discharge, or cause the Leased Premises to be released from, any such lien or
claim of lien, or, (ii) if Tenant decides to contest said lien, MiniMed shall
furnish Landlord such bond as may be required by law to free the Leased Premises
from the effect of such a lien and to secure Landlord against payment of such
lien, or provide Landlord with other assurances with respect thereto which are
satisfactory to Landlord, in its good faith discretion.
(b) Should Tenant fail to pay and discharge, or cause the Leased
Premises to be released from any such lien or claim of lien or to provide a bond
or other assurance as permitted hereunder within thirty (30) days after service
on Tenant by Landlord of a written request to do so, Landlord may pay, adjust,
compromise and discharge any such lien or claim of lien on such terms and in
such manner as Landlord may deem appropriate. In such event, Tenant shall,
following any such payment by Landlord, and after receiving not less than thirty
(30) days' written notice and reasonable evidence of payment, reimburse Landlord
for the full amount so paid by Landlord, including any reasonable attorneys'
fees or other costs expended by Landlord, together with interest thereon at the
Agreed Rate from the date of payment by Landlord to the date of Tenant's
reimbursement of Landlord, and such amount shall constitute Additional Rent and
become a part of Tenant's obligation to pay Rent hereunder.
6.7 Hazardous Materials.
(a) In the event that Tenant discovers the presence of Hazardous
Materials (as defined below in this Section 6.7) on or under the Leased Premises
subsequent to the Commencement Date, Tenant shall, within five (5) days of such
discovery, notify Landlord in writing of such discovery and shall promptly
thereafter provide a reasonably detailed description of the location, extent and
nature of the Hazardous Materials discovered, and if it is determined that the
Hazardous Materials were placed or discharged after the Commencement Date by
persons other than Master Landlord, Landlord or their Representatives, MiniMed's
plan to remediate such contamination. All remediation which is undertaken with
respect to the Leased Premises shall comply with all Governmental Restrictions.
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(b) In the event that any Hazardous Materials are or were
discharged in, on or under the Leased Premises by Master Landlord or Landlord or
any of its Representatives or anyone else acting on behalf of Landlord before or
after the Commencement Date, or anyone else before the Commencement Date, and
such Hazardous Materials are required to be remediated pursuant to applicable
laws or the same has a material and adverse affect upon Tenant's use of or
operation of the Leased Premises or the Improvements, Landlord shall perform or
cause to be performed the necessary clean-up of such Hazardous Materials on or
affecting the Leased Premises or the Improvements at no expense to Tenant, and
Landlord shall defend, indemnify and hold Tenant and MiniMed harmless against
and from all clean up costs in connection therewith.
(c) For purposes of this Lease, the term "Hazardous Materials"
means any chemical, substance, object, condition, material, waste, or controlled
substance which is or may be hazardous to human health or safety or to the
environment, due to its radioactivity, ignitability, corrosiveness, explosivity,
flammability, reactivity, toxicity, infectiousness, or other harmful or
potentially harmful properties or effects, including, without limitation, all
chemicals, substances, materials, or wastes that are now or hereafter may be
listed, defined, or regulated in any manner by any federal, state, or local
government agency or entity, or under any federal, state, or local law,
regulation, ordinance, rule, policy or procedure due to such properties or
effects.
6.8 Ownership Of Improvements. Notwithstanding anything that is or
appears to be to the contrary herein, any and all Improvements erected on the
Leased Premises as permitted by this Lease, as well as any and all alterations
or additions thereto or any other Improvements or fixtures on the Leased
Premises, shall be owned by Tenant until the expiration of the Term or sooner
termination of this Lease. Upon the expiration or sooner termination of this
Lease, all Improvements and all alterations, additions or improvements thereto
that are made to or placed on the Leased Premises by Tenant or any other person
shall be considered part of the real property of the Leased Premises and shall
remain on the Leased Premises and become the property of Landlord, subject to
the provisions for payment, if due, according to Sections 4.5 and 4.6; provided
that Tenant (or its Subtenants, as the case may be) shall retain ownership of
and shall be required to remove furniture, equipment, machinery, trade fixtures
and removable personal property except as may be left on the Leased Premises
with Landlord's prior written approval. Except as otherwise expressly provided
in this Lease, any non-disturbance agreement approved by Landlord, any easement
approved by Landlord, or any written instrument executed by Landlord which
expressly states that Landlord is waiving its rights under this Section 6.8 to
receive such Improvements free and clear of all other claims, said Improvements
shall become
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Landlord's property free and clear of any and all rights to possession and all
claims to or against them by Tenant or any third person or entity, subject to
the provisions for payment, if due, according to Sections 4.5 and 4.6.
6.9 Right of Access. Subject to reasonable procedures regarding safety
established by Tenant, during normal construction hours, representatives of
Landlord shall have the reasonable right of access to the Leased Premises
without charges or fees for the purpose of inspecting the work being performed
in constructing the Improvements; provided, however, that such representatives
shall present and identify themselves at Tenant's construction office, be
accompanied by a representative of Tenant while on the Leased Premises and obey
Tenant's, or its contractor's safety rules and regulations. In addition,
Landlord shall have the right to authorize other public agencies to enter the
Leased Premises, upon the same terms after reasonable prior notice to Tenant,
for the purpose of constructing, reconstructing, maintaining or repairing any
public improvements or public facilities located on the Leased Premises.
Landlord hereby indemnifies and holds Tenant, and its Representatives, and the
Leased Premises, harmless from and against any loss, cost, damage or liability,
including, without limitation, attorneys' fees and disbursements, which results
from the exercise by Landlord, or any party acting under Landlord's authority,
of the rights granted by this Section.
6.10 Governmental Approvals. If requested by Landlord in writing,
MiniMed covenants and agrees to deliver to Landlord conformed copies (and
certified copies of all recorded instruments) of all governmental approvals and
permits obtained by MiniMed for the construction, alteration or reconstruction
of any Improvements upon the Leased Premises in accordance with Section 6.1. In
no event shall MiniMed commence construction of any Improvements pursuant to the
provisions of this Article 6 until such time as MiniMed shall have obtained all
necessary governmental approvals and permits to so construct such Improvements.
ARTICLE 7 - REPAIRS AND MAINTENANCE
7.1 Landlord's Nonresponsibility. During the Term of this Lease,
Landlord shall not be required to maintain or make any repairs or replacements
of any nature or description whatsoever to the Leased Premises or the
Improvements thereon, except as expressly provided elsewhere herein.
7.2 Tenant's Duty to Maintain Premises. Except as expressly otherwise
provided for herein, throughout the Term of this Lease, Tenant shall, at
Tenant's sole cost and expense, maintain or cause to be maintained the Leased
Premises (including the Improvements) and the Improvements now or hereafter
located on the Leased
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Premises in good and clean condition and repair, free of debris, and in
compliance with (i) all Governmental Restrictions and (ii) all applicable rules,
orders, and regulations of any insurance company insuring all or any part of the
Leased Premises or the Improvements thereon or both, and Tenant shall make or
cause to be made whatever repairs and replacements are required by such
enactments or provisions or future enactments or provisions.
7.3 Damage or Destruction.
(a) In the event any of the Improvements are damaged by an insured
casualty, Tenant promptly shall remove the debris resulting from such event, and
within a reasonable time thereafter shall apply insurance proceeds to the repair
or restoration of the Improvements so damaged to their condition immediately
prior to such casualty, such repair or restoration to be performed in accordance
with all provisions of this Lease.
(b) In the event any of the Improvements are damaged by an
uninsured casualty, Tenant promptly shall remove the debris resulting from such
event, and within a reasonable time thereafter shall either (i) repair or
restore the Improvements so damaged, such repair or restoration to be performed
in accordance with all provisions of this Lease, or (ii) erect other
Improvements in such location, provided all provisions of this Lease are
complied with, or (iii) demolish the damaged portion of such Improvements,
restore any remaining Improvements to an architectural whole, remove all
rubbish, and pave or plant grass and otherwise restore the area to a neat,
orderly, sanitary and attractive condition. Tenant shall have the option to
choose among the aforesaid alternatives, but Tenant shall be obligated to
perform one of such alternatives. Tenant shall give notice to Landlord within a
reasonable time of which alternative it elects. Nothing contained in subsections
(a) or (b) shall be construed as permitting the abatement or reduction of Rent,
or the termination of this Lease.
(c) Notwithstanding anything to the contrary contained in this
Lease, if (i) there is damage to or destruction of the Improvements on the
Leased Premises during the last five (5) years of the Term (including all
exercised options) and the cost of repairing said damage or destruction exceeds
the cost of demolishing and removing the remaining Improvements on the Leased
Premises, or (ii) there is damage to or destruction of the Improvements on the
Leased Premises which (1) arises from a cause which is not required to be
insured against under any provision of this Lease, or (2) arises from a cause
which is in fact insured against in compliance with the terms of this Lease, but
for which the recoverable proceeds of such insurance are less than 90% of the
cost to repair said damage or destruction, and (3) the cost to Tenant (which is
not covered by insurance proceeds) of repairing said damage or destruction
exceeds the cost of demolishing and removing the remaining Improvements on the
Leased
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Premises, or (iii) there is damage to or destruction of the Improvements on the
Leased Premises and the Governmental Restrictions then in effect with respect to
the Leased Premises prohibit the construction of economically viable replacement
Improvements with respect to a use which Tenant either has the right to engage
in under this Lease or which Tenant desires to engage in and Landlord will
permit to be engaged in, then Tenant shall have the option to terminate this
Lease, subject to Tenant's satisfaction of all of the following requirements:
(A) Tenant shall, within ninety (90) days after the event giving rise to such
right to terminate, give Landlord written notice of its election to terminate
("Notice of Election to Terminate"); and (B) Tenant shall, at the election of
Landlord (which election shall be communicated in writing to Tenant ("Demolition
Notice") within thirty (30) days of Landlord's receipt of the Notice of Election
to Terminate), raze and remove the damaged or destroyed Improvements and any
other Improvements on the Leased Premises that Landlord may designate in the
Demolition Notice, and shall complete said demolition and removal and shall
vacate the Improvements on the Leased Premises within ninety (90) days of
Landlord's delivery of the Demolition Notice(which vacation date shall fix the
termination date of this Lease); and (c) Tenant shall comply with all provisions
of Article 15 of this Lease consistent with this Section 7.3 prior to or
concurrent with Tenant's vacation of the Improvements on the Leased Premises. If
Tenant fails to satisfy the requirements set forth in (b) or (c) above, the
failure to meet such conditions shall not invalidate the termination of this
Lease, although, in that event and notwithstanding anything else in this Lease
that may be or appear to be to the contrary, Tenant shall remain liable to
Landlord in damages for such breach. Any and all property damage insurance
proceeds (exclusive of any proceeds applicable to Tenant's trade fixtures,
equipment or personal property that would be retained by Tenant at the end of
the Term) paid to Tenant as a result of the damage or destruction giving rise to
the termination, shall be distributed to the Parties, and any Lender, as their
interest are determined.
(d) Except as expressly provided in this Lease, no deprivation,
impairment, or limitation of use resulting from any damage or destruction or
event or work contemplated by this Section shall entitle Tenant to any offset,
abatement, or reduction in Rent, nor to any termination or extension of the Term
hereof.
ARTICLE 8 - LEASEHOLD FINANCING
8.1 Conditions To Obtaining Leasehold Mortgage.
(a) Notwithstanding anything which is or appears to be to the
contrary in this Lease, Tenant shall not encumber the estate created by this
Lease, except as expressly provided in this Article 8.
(b) Tenant shall have the right, without Landlord's consent, to
encumber
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Tenant's estate created by this Lease with any Leasehold Mortgage; provided,
that such Leasehold Mortgage shall meet each of the following terms, conditions
and requirements:
(i) The Leasehold Mortgage shall contain provisions requiring
that copies of all notices of default under said Leasehold Mortgage must be sent
to Landlord;
(ii) The Leasehold Mortgage shall be subordinate to the Master
Landlord's fee interest and Landlord's leasehold interest in the Leased Premises
and the Landlord's interest under this Lease, and shall not cover any interest
in real property other than the leasehold estate created by this Lease and any
easement, to the extent it benefits the Leased Premises; and
(iii) The Leasehold Mortgage shall not permit or authorize, or
be construed to permit or authorize, any Lender to devote the Leased Premises to
any uses, or to construct any Improvements thereon, other than those uses and
Improvements provided for and authorized by this Lease.
8.2 Lender's Rights. During the continuance of any Leasehold Mortgage
permitted by this Lease, and until such time as the lien of any Leasehold
Mortgage has been extinguished (which provisions shall be for the benefit of the
Leasehold Mortgagee):
(a) Landlord shall not agree to any mutual termination nor accept
any surrender or termination of this Lease, nor shall Landlord consent to any
amendment or modification of this Lease without the prior written consent of
Lender; provided, that the provisions of this subsection shall not apply to any
cancellation or surrender occurring without Landlord's consent pursuant to the
provisions of the United States Bankruptcy Code, 11 U.S.C. 101, et seq.;
(b) Following Lender's acquisition of Tenant's interest in this
Lease pursuant to a foreclosure or an assignment in lieu of foreclosure, the
Lender shall be entitled to assign its interest in this Lease without Landlord's
prior consent, subject to compliance with the terms and conditions of this
Article 8. All subsequent Transfers by the Transferee of Lender shall comply
with the provisions of this Lease, including all restrictions on Transfer set
forth in Article 9 hereof; and
(c) If, in connection with securing by Tenant of any Leasehold
Mortgage, the affected Lender requests an amendment with respect to the Lender
protection rights set forth in this Article 8, Landlord agrees not to
unreasonably withhold its consent to any such amendment; provided, that Landlord
shall not be required to consent to such
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an amendment if it would, in Landlord's reasonable determination, materially
impair any of Landlord's rights or materially increase any of Landlord's
obligations under this Lease.
8.3 Default Notice. Landlord, upon providing Tenant with any "Notice of
Default" (as defined below) under this Lease, shall, at the same time, provide a
copy of such notice to every Lender who has given written notice to Landlord of
its interest in the leasehold estate. From and after such notice has been given
to a Lender, such Lender shall have the same period for remedying the Default
complained of as the cure period provided to Tenant pursuant to Section 14.2,
plus the additional period provided to such Lender as specified below. Landlord
shall accept performance by or at the instigation of such Lender as if the same
had been done by Tenant. Landlord acknowledges that Landlord has received
written notice that ING (U.S.) Capital LLC is a Lender holding a first priority
Leasehold Mortgage encumbering Tenant's interest in the leasehold estate, a copy
of which Leasehold Mortgage (containing such Lender's address for notice
purposes) has been provided to Landlord.
8.4 Lender Cure Rights. Notwithstanding anything to the contrary
contained in this Lease, Landlord shall have no right to terminate this Lease on
account of an Uncured Default of Tenant unless, following expiration of Tenant's
applicable cure period, Landlord first provides each Lender not less than thirty
(30) days notice of its intent to terminate, if Tenant's Default can be cured by
the payment of money (a "Monetary Default"), and not less than sixty (60) days
notice of its intent to terminate, if Tenant's Default is of any other type (a
"Non-monetary Default"), and Lender fails to cure such Monetary Default within
thirty (30) days after receipt of such notice or cure or, in good faith and with
reasonable diligence and continuity, commence to cure such Non-monetary Default
within said sixty (60) day period. If such Non-monetary Default cannot
reasonably be cured within said sixty (60) day period (or is such that
possession of the Leased Premises is necessary for Lender to obtain possession
and to remedy the Default), the date for termination shall be extended for such
period of time as may be reasonably required to remedy such Default, if (a)
Lender shall have fully cured any default in the payment of any monetary
obligations of Tenant under this Lease within thirty (30) days after its receipt
of notice of Landlord's intent to terminate, and shall continue to pay currently
such monetary obligations as and when the same are due, and (b) Lender continues
its good faith and diligent efforts to remedy such nonmonetary Default
(including its acquisition of possession of the Leased Premises if necessary to
the cure of such Default). Nothing in this Section 8.4 shall be construed to
require a Lender to continue any foreclosure proceeding it may have commenced
against Tenant after all Defaults have been cured by Lender, and if such
Defaults shall be cured and the Lender shall discontinue such foreclosure
proceedings, this Lease shall continue in full force and effect as if Tenant had
not defaulted under this Lease. Nothing herein shall require a Lender who has
acquired Tenant's leasehold interest
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and has taken possession of the Leased Premises to cure any Non-monetary Default
which is not capable of being cured by such Lender, and such Default shall be
deemed to be waived following Lender's acquisition of Tenant's leasehold
interest and such Lender's timely cure of all Monetary Defaults and all
Non-monetary Defaults which are capable of cure by such Lender in accordance
with the foregoing provisions.
8.5 Obligations of Lender and Purchaser.
(a) No Lender, acting in such capacity, shall be deemed to be an
assignee or transferee of this Lease or of the leasehold estate hereby created
so as to require such Lender, in that capacity, to assume the performance of any
of the terms, covenants or conditions on the part of the Tenant to be performed
hereunder, unless and until it acquires the interest of Tenant hereunder. Upon
acquiring Tenant's leasehold, Lender may, without the consent of Landlord, sell
and assign the leasehold estate on such terms and to such persons and entities
as are acceptable to such Lender and thereafter be relieved of all obligations
of Tenant first arising under this Lease after the date of such sale or
assignment; provided, that such assignee of the Lender shall have delivered to
Landlord an assumption agreement as provided by Section 9.2(iii) of this Lease.
Any such assignee of Lender or any other assignee of this Lease or of the
leasehold estate created hereby by a conveyance in lieu of foreclosure or any
purchaser at any foreclosure sale of this Lease or of the leasehold estate
hereby created (other than the Lender), shall be deemed to be a Transferee of
this Lease, and shall be deemed to have agreed to perform all of the terms,
covenants and conditions on the part of the Tenant to be performed hereunder
from and after the date of such purchase and assignment and, from and after such
date, shall be subject to all the terms of this Lease, including all
restrictions on further Transfer set forth in Article 9; provided, however,
nothing herein shall require an assignee or transferee who has acquired Tenant's
leasehold interest and has taken possession of the Leased Premises to cure any
Non-monetary Default which is not capable of being cured by such assignee or
transferee, and such Default shall be deemed to be waived following such
assignee's or transferee's acquisition of Tenant's leasehold interest.
(b) Notwithstanding any other provision of this Lease, any bona
fide sale of this Lease and of the leasehold estate hereby created in any
proceedings for the foreclosure of any Leasehold Mortgage or a bona fide
assignment or transfer of this Lease and of the leasehold estate hereby created
in lieu of foreclosure of a Leasehold Mortgage shall be deemed to be a permitted
sale, transfer or assignment of this Lease and of the leasehold estate hereby
created so long as such Transfer has not been undertaken for the purpose or with
the intent of circumventing any otherwise applicable restrictions upon Transfers
of Tenant's interest under this Lease.
8.6 New Lease. Except as expressly provided in the last sentence of
this
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Section, in the event of a termination of this Lease for any reason including,
without limitation, by reason of any Default or the rejection or disaffirmance
of this Lease pursuant to bankruptcy law or other law affecting creditors
rights, Landlord shall give prompt notice thereof to any Lenders who have
requested notice from Landlord in writing and furnished their names and
addresses to Landlord. Landlord shall, on written request of any such Lender,
made at any time within thirty (30) days after the giving of such notice by
Landlord, enter into a new lease of the Leased Premises with such Lender within
twenty (20) days after the receipt of such request, which new lease shall be
effective as of the date of such termination of this Lease and shall be for the
remainder of the Term of this Lease, at the rent provided for herein, and upon
the same terms, covenants, conditions and agreements as are herein contained;
provided that such Lender shall: (i) pay to Landlord at the time of the
execution and delivery of said new lease any and all sums for Rent payable by
Tenant hereunder to and including the date thereof, less the net amount (i.e.,
net of all reasonable expenses) of all sums received by Landlord from any
Subtenants in occupancy of any part or parts of the Leased Premises and/or
Improvements up to the date of commencement of such new lease; (ii) pay all
reasonable costs resulting from the preparation and execution of such new lease;
and (iii) on or prior to the execution and delivery of said new lease, agree in
writing that promptly following the delivery of such new lease, such Lender will
perform or cause to be performed all of the other covenants and agreements
herein contained on Tenant's part to be performed to the extent that Tenant
shall have failed to perform the same to the date of delivery of such new lease,
except where such failure to perform by Tenant is, by its nature, a Non-monetary
Default not susceptible of cure by such Lender. Nothing herein contained shall
be deemed to impose any obligation on the part of Landlord to deliver physical
possession of the Leased Premises to such Lender unless Landlord at the time of
the execution and delivery of such new lease shall have obtained physical
possession thereof. Notwithstanding anything contained in this Section 8.6 to
the contrary, Lender's leasehold interest in the Leased Premises pursuant to the
new lease shall be subject to any claims by Tenant that it has a right to
possession of the Leased Premises.
8.7 Multiple Lenders.
(a) If more than one Lender shall make written request upon
Landlord for a new lease in accordance with the provisions of Section 8.6 above,
then such new lease shall be entered into pursuant to the request of the Lender
whose Leasehold Mortgage shall be junior in lien provided: (i) all Lenders
senior in lien shall have been paid all installments of interest and
amortization of principal then due and owing to such Lenders plus all expenses,
including reasonable attorneys' fees, incurred by such senior Lenders in
connection with the termination of this Lease and with the execution and
delivery of such new lease; (ii) the new lessee will assume, in writing, all of
the covenants, agreements and obligations on the part of the mortgagor under
such senior
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Leasehold Mortgages to be kept, observed and performed on the part of such
mortgagor; (iii) such new lease shall contain all of the same provisions and
rights in favor of and for the benefit of Lenders holding leasehold mortgages
thereon as are contained in this Lease, including but not limited to the right
to obtain a new lease in the event of the termination of said lease, and the
right to receive notices of default, and to cure the same, in the same manner as
provided in this Lease; and (iv) the senior Lenders shall have received from the
respective title insurance companies insuring the respective senior Leasehold
Mortgages assurances satisfactory to such senior Lenders that said senior
Leasehold Mortgages and any assignment of rents and other security instruments
executed in connection therewith will continue, with respect to such new lease,
in the same manner and order of priority of lien as was in existence with
respect to this Lease; and thereupon the leasehold estate of the new lessee
created by such new lease shall be subject to the lien of the senior Leasehold
Mortgages in the same manner and order of priority of lien as was in existence
with respect to this Lease. In the event not all of the foregoing provisos shall
have been satisfied by or with respect to any such junior Lender, the Lender
immediately senior in lien to such junior Lender shall have paramount rights to
the benefits set forth in Section 8.6 above, subject nevertheless to the
provisions hereof respecting the senior Lenders, if any. In the event of any
dispute as to the respective senior and junior priorities of any such Leasehold
Mortgages, the certification of such priorities by a title company doing
business in California, satisfactory to Landlord, shall be conclusively binding
on all parties concerned. Should there be a dispute among Lenders as to
compliance with the foregoing provisions, Landlord may rely on the affidavit of
the most senior Lender as to compliance by any junior Lender. Landlord's
obligation to enter into a new lease with any junior Lender shall be subject to
the receipt by Landlord of evidence reasonably satisfactory to it that the
conditions of (i), (ii) and (iv) above have been satisfied with respect to each
senior Lender.
(b) The right of a senior Lender under Section 8.6 above, to
request a new lease may, notwithstanding any limitation of time set forth above
in Section 8.6 or in this Section 8.7, be exercised by the senior Lender within
twenty (20) days following the failure of the junior Lender to have exercised
such right within the time provided by Section 8.6.
(c) If a junior Lender shall fail or refuse to exercise the rights
set forth in this Section, said senior Lenders, in the inverse order of the
seniority of their respective liens, shall have the right to exercise such
rights subject to the provisions of this Lease.
8.8 New Lease Priority.
(a) It is the intent of the Parties that any new lease made
pursuant to Section 8.6 shall have the same priority with respect to any lien,
charge or encumbrance on the
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fee of the Leased Premises as did this Lease and that the Tenant under such new
lease shall have the same right, title and interest in and to the Leased
Premises as Tenant had under this Lease.
(b) The provisions of this Section 8.8 and Sections 8.6 and 8.7
shall survive the termination, rejection or disaffirmance of this Lease and
shall continue in full force and effect thereafter to the same extent as if
Sections 8.6, 8.7 and this Section 8.8 were a separate and independent contract
made by Landlord, Tenant and such Lender.
8.9 Liability of New Tenant. The Lender which becomes the tenant under
any such new lease made pursuant to Sections 8.6 or 8.7 shall be liable to
perform the obligations imposed on the tenant by such new lease as well as those
arising under Sections 8.6 or 8.7 to the same extent as a Lender which acquires
Tenant's estate under this Lease by the foreclosure thereof.
8.10 Subleases and Rents. After the termination of this Lease and
during the period thereafter during which any Lender is entitled to enter into a
new lease of the Leased Premises, Landlord will not voluntarily terminate any
Sublease or the rights of the Subtenant thereunder (provided such Sublease is a
permissible Sublease under this Lease), unless such Subtenant is in default
under such Sublease and has failed to cure same within the time provided under
such Sublease. During such periods Landlord shall receive all rent and other
payments due from Subtenants (subject to Landlord's right to not accept such
rent and other payments as set forth below), including Subtenants whose
attornment it shall have agreed to accept, as agent of such Lender and shall
deposit such rents and payments in a separate and segregated account, but may
withdraw and pay to Landlord such sums as are required or were required to be
paid to Landlord under this Lease, at the time and in the amounts due hereunder,
and may withdraw and expend such amounts as are necessary for the maintenance,
operation, and management of the Leased Premises in accordance with the
requirements of this Lease; and, upon the execution and delivery of such new
lease, Landlord shall account to the lessee under the said new lease for the
balance, if any (after application as aforesaid), of the rent and other payments
made under said Subleases. The collection of rent by Landlord acting as an agent
pursuant to this Section shall not be deemed an acceptance by Landlord for its
own account of the attornment of any Subtenant unless Landlord shall have agreed
in writing with such Subtenant that its tenancy shall be continued following the
expiration of any period during which a Lender may be granted a new lease, in
which case such attornment shall take place upon such expiration but not before;
provided, however, in the event Landlord determines that it cannot accept rent
payments from a Subtenant without risk of being deemed to have accepted such
Subtenant's attornment (and Landlord has not previously agreed to recognize such
Subtenant in the event of a Default under this Lease by Tenant), Landlord shall
have the right to direct such Subtenant to pay such
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rents directly to Lender. If all Lenders fail to exercise their rights to enter
into a new lease or fail to timely execute such new lease, all rents collected
by Landlord on behalf of such Lenders pursuant to this Section shall become
Landlord's property free and clear of any claim by such Lenders and such Lenders
shall have no further rights with respect thereto.
8.11 Legal Proceedings. Landlord shall give each Lender who has given
written notice of its interest in the leasehold estate to Landlord prompt notice
of any legal proceedings between Landlord and Tenant involving obligations under
this Lease. Each said Lender shall have the right to intervene in any such
proceeding to protect its interest and be made a party thereto, and the parties
hereto do hereby consent to such intervention. In the event that any such Lender
shall not elect to intervene or become a party to any such proceedings, Landlord
shall give such Lender notice of, and a copy of, any award or decision made in
any such proceedings, which shall be binding on all Lenders not intervening
after receipt of notice of the legal proceeding.
8.12 Encumbrance of Landlord's Leasehold Interest. Tenant acknowledges
that Landlord may encumber, pledge or otherwise hypothecate its leasehold
interest in the Leased Premises; provided that any such encumbrance holder will
enter into a commercially reasonable non-disturbance and attornment agreement
with Tenant. No such trustee or beneficiary under a deed of trust, or holder of
the rights and interest of Landlord hereunder ("Landlord's Lender") shall be or
become liable to Tenant solely as a result of an assignment of this Lease as
security.
Landlord's Lender shall not, in the exercise of any of its rights
arising or which may arise out of such encumbrance, or any instrument modifying
or amending the same or entered into in substitution or replacement thereof,
disturb or deprive Tenant in or of its possession or its right to possession of
the Leased Premises, or of any part thereof under this Lease, or any right or
privilege created for or inuring to the benefit of Tenant under this Lease,
provided this Lease is then in full force and effect.
If a default has not occurred under any such encumbrance, and if this
Lease shall not have been terminated, then, and in such event, Tenant shall not
be made a party in any action or proceeding to foreclose said encumbrance, nor
shall Tenant be evicted or removed or its possession or right of possession be
disturbed or in any manner interfered with, and this Lease shall continue in
full force and effect as a direct lease from the purchaser in foreclosure or
transferee in lieu thereof.
Any such encumbrance shall provide that Landlord's Lender, upon serving
the Landlord with any notice under such encumbrance will simultaneously serve a
copy of such notice upon the Tenant.
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Landlord shall, upon request, execute, acknowledge and deliver to
Tenant an agreement in form satisfactory to Landlord and Tenant, between
Landlord, Tenant and Landlord's Lender, agreeing to all of the provisions of
this Section.
Tenant shall give notice in writing of the existence and nature of any
default of Landlord hereunder to Landlord's Lender; provided that Landlord's
Lender has given Tenant a written request for such notice including the name and
address of Landlord's Lender. Tenant shall not terminate this Lease if
Landlord's Lender has cured such default within thirty (30) days after receipt
of such notice. Tenant agrees that Landlord's Lender may, in the event of a
default by Landlord in the performance of any obligations of Landlord which are
contained in any instrument of hypothecation or evidence of indebtedness, the
repayment of which is secured by Landlord's interest hereunder, elect to cause
Landlord's leasehold estate in and to all or a portion of the Leased Premises to
be sold, to hold foreclosure proceedings thereon, or to accept from Landlord an
assignment, transfer or other conveyance of those interests which are thus
hypothecated, all without prejudice to Tenant.
8.13 Notices. Notices from Landlord to any Lender shall be mailed to
the address of the Lender set forth in the Leasehold Mortgage furnished to
Landlord or at such other address as may have been furnished to Landlord by such
Lender. All notices from the Lender to Landlord shall be mailed to the address
designated pursuant to the provisions of Section 18.6 or such other address as
Landlord may designate in writing from time to time. Such notices shall be given
in the manner described in Section 18.6 and shall in all respects be governed by
the provisions of such Section.
ARTICLE 9 - ASSIGNMENT AND TRANSFER
9.1 Assignment of Landlord's Interest in Lease or the Leased Premises.
Landlord may Transfer the Leased Premises, this Lease, all or a portion of its
interest thereunder, and/or all or a portion of the payments that are payable to
it by Tenant pursuant to this Lease, subject to the tenancy under and the terms
and conditions of this Lease. Tenant hereby consents and agrees to any such
Transfer which Landlord considers necessary or proper, regardless of the reason
or reasons for which Landlord makes such Transfer and regardless of the entity
that is the Transferee thereunder; provided, however, that such transferee shall
not violate the JPA or any other approvals necessary for Tenant to construct and
operate the Improvements pursuant to the terms of this Lease or otherwise limit
or restrict Tenant's rights granted under this Lease or increase any of Tenant's
obligations under this Lease. In the event Landlord Transfers the Leased
Premises or this Lease to Master Landlord, to an entity controlled by Master
Landlord, or to an "Auxiliary Organization" (as such term is defined at
California Education Code Section 89900) of Master Landlord, Landlord shall be
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released of any liability under this Lease accruing after the Commencement Date
of such Transfer, provided, however, as a condition to such release, such
Transferee must assume in writing all of Landlord's obligations under this Lease
accruing as of the Commencement Date of such Transfer, and a copy of such
written assumption agreement is delivered to Tenant. If, in connection with
securing by Landlord of any financing encumbering its interest in the Leased
Premises, the affected lender requests an amendment to this Lease, Tenant agrees
not to unreasonably withhold its consent to any such amendment; provided, that
Tenant shall not be required to consent to such an amendment if it would, in
Tenant's reasonable determination, impair any of Tenant's rights or increase any
of Tenant's obligations under this Lease or the JPA.
9.2 Transfer of the Lease, the Leased Premises or the Improvements to
be Constructed Thereon.
(a) (i) Tenant shall not Transfer all or any part of its interest
in or rights under this Lease and/or any part of its interest in or rights to
the Leased Premises and/or any of the Improvements constructed thereon, without
the prior written consent of Landlord, which consent will not be unreasonably
withheld or delayed. Tenant acknowledges that prior to its approval of a
Transfer, Landlord must obtain the consent of Master Landlord, which consent
shall not be unreasonably withheld, conditioned or delayed. If Tenant is MiniMed
or any Affiliate of MiniMed and the stock of Tenant is not publicly traded, the
transfer of more than twenty percent (20%) of Tenant's stock shall be deemed to
be a Transfer requiring Landlord's consent. If the stock of Tenant is publicly
traded, any transfer of Tenant's stock or the sale of all or substantially all
of Tenant's assets shall not be a Transfer requiring Landlord's consent.
Notwithstanding the foregoing, the Transfer to MiniMed or any Affiliate of
MiniMed by Tenant shall not require any prior consent of Landlord or Master
Landlord, upon which Transfer, Tenant shall be released from any and all
liabilities arising under this Lease from and after such Transfer.
(ii) Landlord shall have the right to consider the following
factors (among others Landlord reasonably determines are necessary to consider
in evaluating the proposed Transferee) in determining whether or not to consent
to any proposed Transfer of Tenant's rights under or interest in this Lease, the
Leased Premises, or the Improvements constructed thereon: (1) The financial
condition of the proposed Transferee and its ability to perform all of the
financial and other obligations of Tenant under this Lease, (2) the Transferee's
business reputation, (3) the Transferee's ability to demonstrate its capability
to manage or provide for the management of the Improvements located on the
Leased Premises, (4) whether the proposed Transferee will provide and/or share
services and facilities needed for the students, faculty and employees of the
University, and (5) whether the proposed Transferee will provide opportunities
for student employment, materials and education, and enhance the
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attractiveness of the University campus, encourage students, faculty and
visitors to make increased use of present University facilities, all as more
particularly set forth at Article 17 below. Notwithstanding the foregoing,
Landlord expressly consents to any Transfer by Tenant of all or any part of its
interest in or rights under this Lease and/or any part of its interest in or
rights to the Leased Premises and/or any of the Improvements constructed thereon
to (x) a Sublessee in connection with an exercise by said Sublessee of its
rights to acquire the leasehold pursuant to its Sublease, whereupon Tenant shall
be released from any and all liabilities under this Lease arising from and after
such Transfer, or (y) an entity ("Lender Entity") affiliated with any bank,
trust or financial institution as may be required in connection with a
"synthetic lease" financing, and the Transfer back by the Lender Entity to
MiniMed or an Affiliate of MiniMed in accordance with the terms and conditions
of the "synthetic lease" financing documents, and upon such Transfer back the
Lender Entity shall be released from any and all liabilities arising under this
Lease from and after such Transfer.
(iii) Upon any approved or permitted Transfer of this Lease or
the Leased Premises (other than for security purposes), said Transferee shall
expressly assume in writing liability for all of Tenant's obligations accruing
under this Lease after the date of such Transfer. Upon any Transfer prior to
completion of construction of the Improvements (including a Transfer to an
Affiliate) Tenant shall not be released of its obligations under this Lease.
Upon any Transfer after completion of construction of the Improvements
(including a Transfer to an Affiliate) Tenant shall not be released of its
obligations under this Lease unless either (A) pursuant to the process described
in subparagraph (ii) immediately above, Tenant has demonstrated to Landlord's
reasonable satisfaction that Transferee's net worth at the time of the Transfer
is equal to or greater than the net worth of MiniMed Inc. as of the Commencement
Date (adjusted to correspond to any changes in the CPI since the Commencement
Date), or (B) MiniMed Inc. has guaranteed Tenant's obligations under this Lease.
If Transferee's net worth satisfies the foregoing test, or if MiniMed has
delivered (or maintained) its guarantee of this Lease, then Tenant (as well as
former Tenants still liable hereunder) shall be released of all liability under
this Lease accruing after the date of such Transfer.
(iv) At any time Tenant desires to effect a Transfer which
requires Landlord's consent pursuant to clause (ii) or (iii) above, Tenant shall
request consent from Landlord in writing and shall submit to Landlord in
connection with such request all proposed agreements and documents
(collectively, the "Transfer Documents") memorializing, facilitating and/or
evidencing such proposed Transfer, as well as all other information Tenant
reasonably believes is necessary for Landlord to properly evaluate the proposed
Transferee pursuant to the criteria set forth in Section 9.2(a)(ii) and, if
applicable, Section 9.2(a)(iii) above. Landlord agrees to advise Tenant in
writing of its decision on Tenant's request for consent to such Transfer, as
promptly as
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possible, and, in any event, not later than thirty (30) days after Landlord
receives all of the items required by the preceding sentence. If such request is
denied, Landlord shall state the reasons for such denial in its notice of denial
of Tenant's request. If Landlord fails to respond to Tenant's request within
thirty (30) days after its receipt of all of the items required above, Tenant's
request shall be deemed disapproved. Upon a deemed disapproval, Tenant may
deliver a notice to Landlord which states that there has been a deemed
disapproval, requesting that Landlord consent to the proposed Transfer, stating
that Landlord must consent to or deny the proposed Transfer within thirty (30)
days after Landlord's receipt of this notice, and that failure by Landlord to
either consent to or deny such Transfer within such 30 day period will result in
deemed consent. If Landlord fails to consent to or deny the proposed Transfer
within such second thirty (30) day period, the Transfer shall then be deemed
approved by Landlord.
(b) Notwithstanding anything to the contrary in this Lease, and
provided that Tenant is not requesting that it be released from its obligations
hereunder, Landlord agrees that it shall have no right to withhold consent to
any Transfer to an Affiliate of Tenant, so long as such Transferee is in
compliance with the requirements of Article 17, Interrelationship between
University and Leased Premises.
9.3 Transfer of Tenant's Interest in Lease and Tenant's Ownership .
The restrictions on Transfer contained in this Article 9 shall be
binding on any successors, heirs or permitted Transferees of Tenant. The
provisions of this Article 9 shall apply to each successive Transfer and
Transferee in the same manner as initially applicable to Tenant under the terms
set forth herein.
9.4 Subleases.
(a) Tenant shall be entitled to enter into Subleases of the Leased
Premises with Landlord's consent, which consent shall not be unreasonably
withheld if such Subleases are in conformity with Article 17 below. If Tenant
requests such consent in writing, Landlord shall have thirty (30) days within
which to withhold consent (or sixty (60) days in the event the Sublease relates
to a leasable area of 100,000 square feet or more), in which case Landlord shall
provide written notice thereof to Tenant, and state with specificity (i) the
reasons for such denial and (ii) the changes to any such Sublease which would be
necessary in order for Landlord to grant such consent. In the event Landlord
fails to deliver written notice to Tenant withholding consent within such thirty
(30) day (or where applicable, sixty (60) day) period, then Landlord shall be
deemed to have consented to such Sublease, and Tenant shall be entitled to enter
into such Sublease.
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(b) Each Sublease shall explicitly provide that it is subject and
subordinate to the provisions of this Lease.
(c) With respect to each Sublease, Tenant agrees to provide
Landlord with a written notice at least thirty (30) days prior to the effective
date of the Sublease (i) setting forth the name of such Subtenant and the use of
the demised premises by such Subtenant which shall be consistent with the
Allowed Uses, (ii) certifying that the term of such Sublease will not exceed the
Term of this Lease, (iii) setting forth with specificity the ways in which such
Subtenant will comply with Article 17 and further the educational mission of the
University, and (iv) providing reasonable financial information for such
Sublessee. Following Landlord's receipt of such notice, Landlord agrees to the
non-disturbance and attornment provisions set forth below with respect to any
Sublease for more than 5000 square feet of the leasable area within the
Improvements, which shall be automatic and self-operative without the necessity
of any further agreement between Landlord and the applicable Subtenant. In the
alternative, Landlord agrees to enter into an attornment agreement with all
Subtenants subleasing more than 5000 square feet of the leasable area within the
Improvements incorporating the following provisions:
(1) Commencing on the date that Subtenant enters into a
Sublease with Tenant and continuing thereafter for so long as Subtenant's Lease
is in full force and effect and Subtenant is not in default in payment of rent
or in the performance of any other obligation required under Subtenant's Lease,
Landlord agrees that, notwithstanding a termination of this Lease because of
Tenant's default hereunder, Subtenant's rights and privileges under Subtenant's
Sublease, or any extensions or renewals thereof provided for in Subtenant's
Lease, shall not be diminished or interfered with by Landlord, and Subtenant's
occupancy of its subleased premises shall not be disturbed by Landlord during
the term of Subtenant's Sublease and any extensions or renewals thereof.
(2) Upon the cancellation or termination, for any reason
whatsoever, of this Lease, or the surrender thereof, whether voluntary,
involuntary or by operation of law, prior to the expiration date of Subtenant's
Sublease, including any extensions and renewals of Subtenant's Sublease provided
for therein (in any event not to exceed the present termination date of this
Lease), Landlord may, at its option and without the execution of further
instruments by Landlord or Subtenant, succeed to the interest of Tenant under
Subtenant's Sublease and upon such election by Landlord Subtenant shall be bound
to Landlord under all of the terms of Subtenant's Sublease for the balance of
the term thereof, including any extensions or renewals thereof provided for in
Subtenant's Lease, with the same force and effect as if Subtenant's Lease was
originally entered into directly by Landlord and Subtenant, and Subtenant hereby
agrees to attorn to Landlord, as its landlord, such attornment to be effective
and self-
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operative immediately upon Landlord succeeding to the interest of Tenant under
Subtenant's Sublease. The rights and obligations of Subtenant and Landlord
respectively, upon such attornment shall, to the extent of the then remaining
balance of the term of Subtenant's Sublease, including any renewals or
extensions thereof provided for in Subtenant's Sublease, be the same as now set
forth in Subtenant's Sublease; provided, however, that Landlord shall not, in
any case or under any event, be:
(A) Liable for any act or omission of the Tenant under
Subtenant's Lease, or for any obligations first arising or attributable to any
act or event occurring prior to Landlord's succession to the interest of Tenant
under Subtenant's Sublease;
(B) Subject to any offsets or defenses which Subtenant
might have against Tenant under Subtenant's Sublease;
(C) Charged with or required to recognize payment of any
rent, additional rent or other lease charges which Subtenant may have paid to
Tenant under Subtenant's Sublease which is applicable to any month other than
the current month in which the Landlord succeeds to the interest of Tenant;
(D) Liable for (x) the refund of any security deposits, or
payments of estimated taxes, assessments, common area maintenance fees,
insurance or similar payments, except to the extent Landlord has actually
received such monies from Tenant, or (y) expending funds for the repair of any
damage to or destruction of the subleased premises which is in excess of any
available insurance or condemnation proceeds, as applicable;
(E) Bound by any waiver or forbearance by Tenant or bound
by any amendment or modification of Subtenant's Sublease made without Landlord's
prior written consent;
(F) Bound by any warranties or indemnities given or
required to be given by Tenant to Subtenant under the terms of Subtenant's
Sublease;
(G) Liable for constructing or causing the construction of
any improvements within the subleased premises or for funding any obligation of
Tenant to Subtenant for payment or reimbursement of any expenses incurred by
Subtenant in connection with construction of such improvements; or
(H) Liable for any act or omission of any successor or
assign following Landlord's transfer of its interest under Subtenant's Sublease
and, following such transfer, Landlord shall be relieved of and released from
any further obligations or liability under Subtenant's Sublease.
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As of the Commencement Date, Tenant has entered into a Sublease
with MiniMed Development Corp., a Delaware corporation, as Subtenant thereunder
and Landlord consents to such Sublease and acknowledges and agrees it has been
provided all information required pursuant to Section 9.4(c) hereof and such
information is satisfactory in all respects to Landlord.
(d) Upon Landlord's written request, Tenant shall deliver to
Landlord a summary of any sublease setting forth the primary terms and
conditions (other than rent) of such sublease.
9.5 Assignment for Financing Purposes. If Tenant's assignment or other
transfer of this Lease or Tenant's leasehold interest hereunder is to effect an
assignment and leaseback for financing purposes, or a synthetic lease
transaction, then Tenant may assign or otherwise Transfer this Lease or its
interest hereunder to the proposed Lender/tenant upon a showing to Landlord that
(i) such assignment is for financing purposes only, (ii) Tenant will continue to
enjoy the right to exclusively possess, and will be the end-user of, the Leased
Premises, and (iii) such assignment does not affect the validity or amount of a
guarantee by MiniMed, if any, of Tenant's obligations under this Lease. Tenant
shall furnish to Landlord written notice of the proposed assignment of this
Lease at least sixty (60) days prior to such assignment together with such
information as is reasonably required to show that the proposed assignment
satisfies the conditions set forth at clauses (i), (ii) and (iii) immediately
above. In addition, if the proposed assignment satisfies the above-stated
conditions, the liability of such Lender/tenant shall be limited to its
leasehold interest in the Leased Premises plus the amount of Rent, if any,
received by the Lender/tenant from the end-user/tenant and not paid to Landlord;
provided, however, that nothing in this Section shall be interpreted to limit
the obligations of Lender pursuant to Sections 8.5 and 8.6 above.
ARTICLE 10 - TAXES AND IMPOSITIONS
10.1 Tenant To Pay Impositions.
(a) In addition to the Rent and other payments required to be paid
under this Lease, Tenant shall pay or cause to be paid any and all taxes
(including possessory interest taxes) and assessments (collectively,
"Impositions") levied or assessed from the Commencement Date until the
termination of this Lease by any governmental agency or entity on or against the
Leased Premises or any portion thereof, or on or against any interest in the
Leased Premises (including the leasehold interest created by this Lease), or any
Improvements or other property in or on the Leased Premises.
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The timely payment of the Impositions is a material term of this Lease, and, to
the extent the above-referenced items are payable to Landlord or its successors
or assigns, they shall constitute Additional Rent hereunder.
(b) If, by law, any such Imposition is payable, or may, at the
option of Tenant be paid, in installments, Tenant may pay the same, together
with any accrued interest on the unpaid balance of such Imposition, in such
installments as those installments respectively become due and before any fine,
penalty, interest, or cost may be added thereto for the nonpayment of any such
installment and interest.
10.2 Proration of Impositions. All Impositions levied or assessed on or
against the Leased Premises shall be prorated, based on a 365-day year, between
Landlord and Tenant as of the Commencement Date of this Lease, and as of the
expiration or earlier termination of this Lease. On service of written request
by Landlord, Tenant shall promptly pay to Landlord Tenant's share of such
Impositions paid by Landlord on Tenant's behalf and, on service of written
request by Tenant, Landlord shall promptly pay to Tenant Landlord's share of
such Impositions paid by Tenant on Landlord's behalf.
10.3 Payment Before Delinquency. Subject to Tenant's right to contest
under Section 10.4, any and all Impositions and installments of Impositions
required to be paid by Tenant under this Lease shall be paid by Tenant prior to
delinquency, and, upon Landlord's written request, copies of the official and
original receipt for the payment of each such Imposition or installment thereof
or other reasonably satisfactory evidence of payment shall promptly be given to
Landlord.
10.4 Contest of Imposition.
(a) Tenant shall have the right to contest, oppose, or object to
the amount or validity of any Imposition levied on or assessed against the
Leased Premises or any portion thereof and may in good faith diligently conduct
any necessary proceeding to prevent or void or reduce the same; provided,
however, that the contest, opposition, or objection must be filed before the
Imposition at which it is directed becomes delinquent if such contest,
opposition or objection is required to be made or filed prior to payment of the
Imposition being challenged, and written notice of the contest, opposition, or
objection must be given to Landlord at least thirty (30) days before the date
the Imposition becomes delinquent. No such contest, opposition, or objection
shall be continued or maintained after the date on which the Imposition at which
it is directed becomes delinquent unless Tenant has met one of the following
conditions:
(i) Paid such Imposition under protest prior to its becoming
delinquent; or
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(ii) Posted such bond or other security, satisfactory to
Landlord, as is necessary to protect Landlord and the Leased Premises from any
lien arising from such Imposition.
(b) Landlord shall not be required to join in any proceeding or
contest brought by Tenant unless the provisions of any law require that the
proceeding or contest be brought by or in the name of Landlord or any owner of
the Leased Premises. In that case, Landlord shall join in the proceeding or
contest or permit it to be brought in Landlord's name, but such action shall be
without cost to Landlord and Tenant shall reimburse Landlord upon demand for any
reasonable attorneys' fees and costs incurred therein.
10.5 Tax Returns And Statements. Tenant shall, as between Landlord and
Tenant, have the duty of attending to, preparing, making, and filing any
statement, return, report, or other instrument required or permitted by law in
connection with the determination, equalization, reduction, or payment of any
Imposition that is or may be levied on or assessed against the Leased Premises,
or any portion thereof, or any interest therein, or any Improvements or other
property on the Leased Premises.
10.6 Possessory Interest Taxes. Master Landlord is a public entity, and
as such, Master Landlord's underlying fee in the Leased Premises is, or may be,
exempt from property tax assessments. In addition, Landlord is a non-profit
corporation whose leasehold interest in the Leased Premises is, or may be,
exempt from property tax assessment. In accordance with California Revenue and
Taxation Code Section 107.6(a), Master Landlord and Landlord state that by
entering into this Lease, a Possessory interest in Tenant subject to property
taxes may be created. Tenant or any other party in whom the Possessory interest
is vested may be subject to the payment of property taxes levied on such
interest.
ARTICLE 11 - UTILITY SERVICES
11.1 Tenant's Responsibility. During the Term of this Lease, Tenant
shall pay, or cause to be paid, and MiniMed shall indemnify, defend and hold
Landlord and the property of Landlord harmless from all charges for water,
sewage, gas, heat, air conditioning, light, power, steam, telephone service and
all other services and utilities used, rendered or supplied to, on or in the
Leased Premises during the Term.
11.2 Landlord Has No Responsibility. Landlord shall not be required to
furnish to Tenant or any other occupant of the Leased Premises during the Term
of this Lease, any water, sewage, gas, heat, air conditioning, light, power,
steam, telephone, or any other utilities, equipment, labor, materials or
services of any kind whatsoever.
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ARTICLE 12 - INSURANCE
12.1 Fire and Extended Coverage Insurance. Throughout the term of this
Lease, MiniMed, at no cost or expense to Tenant or Landlord, shall keep or cause
to be kept, for the mutual benefit of Landlord and Tenant, a policy of standard
fire insurance, with extended coverage and vandalism and malicious mischief
endorsements, including earthquake insurance if such insurance is commercially
available at commercially reasonable rates with commercially reasonable
deductibles. The amount of insurance required hereunder shall in no event be
less than one hundred percent (100%) of the full replacement cost of the
Improvements on the Leased Premises (exclusive of foundations and footings),
including tenant improvements or betterments. MiniMed shall not be obligated to
obtain flood insurance as part of the extended coverage required hereunder.
Coverage shall be "Property broad form" and shall include rent interruption
insurance, which insurance shall also cover all real estate taxes and insurance
costs for the purposes of continuing rental payments to the landlord for the
duration of the Lease. Coverage shall not include a coinsurance penalty
provision.
12.2 Commercial General Liability Insurance. MiniMed, commencing on the
Commencement Date and continuing throughout the Term hereof, shall maintain or
cause to be maintained, at no cost or expense to Landlord or Tenant,
comprehensive broad form commercial general liability insurance against claims
and liability for personal injury, death, or property damage arising from the
use, occupancy or condition of the Leased Premises, the Improvements thereon,
which insurance shall provide combined single limit protection of at least Two
Million Dollars ($2,000,000) for bodily injury or death to one or more persons,
and at least One Million Dollars ($1,000,000) for property damage, which limits
shall be increased by MiniMed from time to time based upon Tenant's reasonable
assessment of the limits carried by prudent and responsible property owners of
similar property in the geographic area of the Leased Premises.
12.3 Worker's Compensation Insurance. MiniMed shall carry worker's
compensation insurance as required by the State of California, and employer's
liability insurance with a liability insurance minimum of $1,000,000 per
accident for bodily injury or disease.
12.4 Course of Construction Insurance. Course of construction insurance
coverage for all risk of loss shall be maintained by MiniMed at one hundred
percent of the completed value basis on the insurable portion of the work
including materials at the project site, stored off the project site, or in
transit. MiniMed shall include the interests of the Landlord, Tenant and
subcontractors in the work and shall insure against the perils of physical loss
or damage. Nothing in this Article, however, shall be
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construed to relieve MiniMed of full responsibility for loss of or damage to
materials not yet incorporated in the work or MiniMed's tools and equipment used
to perform the work, whether on the project site or elsewhere, or to relieve
MiniMed or Tenant of any other responsibility under the Lease. If the Landlord
or Tenant is damaged by the failure of MiniMed to purchase or maintain such
insurance, MiniMed shall bear all losses attributable thereto and indemnify the
Landlord and Tenant therefrom.
12.5 Business Automobile Liability Insurance. If not covered by its
other insurance policies, MiniMed shall carry business liability insurance on an
occurrence form covering owned, hired, leased and non-owned automobiles used by
or on behalf of the Tenant and providing insurance for bodily injury, property
damage and contractual liability.
12.6 Policy Form, Content And Insurer.
(a) All insurance required by the provisions of this Lease shall
be carried only with insurance companies licensed to do business in this state
with Best's Financial Rating of A VII or better or otherwise acceptable to
Landlord.
(b) All such policies required by the provisions of this Lease
shall be nonassessable and shall contain language to the effect that (i) the
policies are primary and noncontributing with any insurance that may be carried
by Landlord, (ii) the policies cannot be canceled or materially changed except
after thirty (30) days notice by the insurer to Landlord and (iii) Landlord
shall not be liable for any premiums or assessments. The insurer under the
policy of property insurance for the Leased Premises shall also waive its rights
of subrogation against Landlord, Tenant, Tenant's Representatives and Landlord's
Representatives.
(c) All deductibles or self-insured retentions shall be
commercially reasonable for companies of similar net worth as MiniMed.
(d) Upon Tenant's execution and delivery of this Lease, MiniMed
shall deliver to Landlord and Tenant certificates of insurance evidencing the
insurance coverages specified in this Article. MiniMed shall thereafter deliver
to Landlord and Tenant original certificates and amendatory endorsements
evidencing the insurance coverages required by this Article upon renewal of any
insurance policy. Full copies of the policies shall be made available to
Landlord and Tenant upon request. MiniMed may provide any insurance required
under this Lease by blanket insurance covering the Leased Premises and any other
location or locations, provided that the specific policy of blanket insurance
proposed by MiniMed provides the coverages required by this Agreement taking
into account the other properties, persons and risks covered by such blanket
policy. All policies shall name Landlord, Tenant and each Lender as an
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additional insured as their interests may appear, and shall contain the
following special endorsements:
"The State of California, Board of Trustees of the California
State University, California State University, Northridge, the
North Campus University-Park Corporation, First Security Bank,
National Association, not individually but solely as Owner Trustee
under the MiniMed Real Estate Trust 1999-1 and their officers,
employees and agents are hereby declared to be additional insureds
under the terms of this policy as to the activities of Landlord,
Tenant and its sublessees, if any.
"This insurance policy will not be canceled without 30 days prior
written notice to the Trustees and the Corporation. Neither the
State of California, the Board of Trustees of the California State
University, California State University, Northridge, North Campus
University-Park Corporation nor First Security Bank, National
Association, not individually but solely as Owner Trustee under
the MiniMed Real Estate Trust 1999-1, is not liable for the
payment of premiums or assessments on this policy."
(e) For any claims related to this project, MiniMed's insurance
coverage shall be primary insurance as respects the Landlord and Tenant. Any
insurance or self-insurance maintained by the Landlord or Tenant shall be excess
of the MiniMed's insurance and shall not contribute with it.
(f) MiniMed shall include all subcontractors as insured under its
policies or shall furnish separate certificates and endorsements for each
subcontractor. All coverages for subcontractors shall be subject to all
requirements stated herein.
12.7 Waiver of Subrogation. Landlord and Tenant hereby release the
other and its Representatives from any and all liability or responsibility to
the other or anyone claiming through or under them by way of subrogation or
otherwise for any insured loss or damage to the Leased Premises, the campus of
California State University at Northridge, any Improvements thereon, or any of
Landlord's or Tenant's property thereon caused by or arising from a fire or any
other event even if such fire or other casualty shall have been caused by the
fault or negligence of the other party, or anyone for whom such party may be
responsible.
12.8 Indemnification.
(a) MiniMed shall indemnify, defend and hold harmless Landlord and
its Representatives, and the property of Landlord, including the Leased
Premises, from and against any and all Losses and Liabilities of every nature
arising out of or in
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connection with the use, occupancy or enjoyment of the Leased Premises by Tenant
or any person thereon or holding under Tenant arising from any action, inaction,
events or facts occurring during the Term from any cause; provided, that nothing
in this Section 12.8(a) or this Lease shall be construed to require Tenant or
MiniMed to rebuild the Improvements or to pay charges to Landlord in connection
therewith as a result of damage to or destruction of the Improvements or any
Taking of the Improvements except to the extent expressly provided in the other
Sections of this Lease. The above indemnification includes, without limitation,
any Losses and Liabilities arising by reason of:
(1) The death or injury of any person, including Tenant or any
person who is an employee or agent of Tenant, or damage to or destruction of any
property, including property owned by Tenant or by any person who is an employee
or agent of Tenant, from any cause whatever while such person or property is in
or on the Leased Premises;
(2) The death or injury of any person, including Tenant or any
person who is an employee or agent of Tenant, or damage to or destruction of any
property, including property owned by Tenant or any person who is an employee or
agent of Tenant, caused or allegedly caused by either (A) the condition of the
Leased Premises or some Improvements on said premises, or (B) some act or
omission on the Leased Premises by Tenant or any person in, on, or about the
Leased Premises with the permission and consent of Tenant;
(3) Any work performed on the Leased Premises or materials
furnished to said premises at the insistence or request of Tenant or any person
or entity acting for or on behalf of Tenant; or
(4) Tenant's failure to perform any provision of this Lease or
to comply with any Governmental Restriction.
However, the foregoing indemnification shall not extend to any Loss or
Liability to the extent (5) it arises out of the negligence or intentional or
willful misconduct of Landlord or its Representatives or Tenant; or (6) it
arises from a claim for personal injury or property damage asserted by the
owners of any properties adjacent or proximate to the Leased Premises, or their
guests, invitees, employees, tenants or other like person or entity claiming
through them, which are based upon the migration of any Hazardous Materials
deposited on the Leased Premises prior to the Commencement Date of this Lease
onto such properties adjacent or proximate to the Leased Premises.
(b) Landlord shall indemnify, defend and hold harmless Tenant and
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MiniMed and their respective Representatives, and the property of Tenant,
including the Leased Premises, from and against any and all Losses and
Liabilities of every nature arising out of or in connection with the use,
occupancy or enjoyment of the Leased Premises by Landlord or any person thereon
or holding under Landlord arising from any action, inaction, events or facts
occurring during the Term from any cause. The above indemnification includes,
without limitation, any Losses and Liabilities arising by reason of:
(1) The death or injury of any person, including Landlord or
any person who is an employee or agent of Landlord, or damage to or destruction
of any property, including property owned by Landlord or by any person who is an
employee or agent of Landlord, from any cause whatever while such person or
property is in or on the Leased Premises;
(2) The death or injury of any person, including Landlord or
any person who is an employee or agent of Landlord, or damage to or destruction
of any property, including property owned by Landlord or any person who is an
employee or agent of Landlord, caused or allegedly caused by either (A) the
condition of the Leased Premises or some Improvements on said premises, or (B)
some act or omission on the Leased Premises by Landlord or any person in, on, or
about the Leased Premises with the permission and consent of Landlord;
(3) Any work performed on the Leased Premises or materials
furnished to said premises at the insistence or request of Landlord or any
person or entity acting for or on behalf of Landlord; or
(4) Landlord's failure to perform any provision of this Lease
or to comply with any Governmental Restriction.
However, the foregoing indemnification shall not extend to any Loss or
Liability to the extent (5) it arises out of the negligence or intentional or
willful misconduct of Tenant or MiniMed or their respective Representatives; or
(6) it arises from a claim for personal injury or property damage asserted by
the owners of any properties adjacent or proximate to the Leased Premises, or
their guests, invitees, employees, tenants or other like person or entity
claiming through them, which are based upon the migration of any Hazardous
Materials deposited on the Leased Premises after the Commencement Date of this
Lease onto such properties adjacent or proximate to the Leased Premises.
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ARTICLE 13 - CONDEMNATION
13.1 General. If any portion of or interest in the Leased Premises
shall be condemned (including, without limitation, inverse condemnation) or
taken by any public authority or by any other person or entity with the power of
condemnation, by eminent domain or by purchase in lieu thereof (a "Taking"), and
such Taking renders the Leased Premises unsuitable in the commercially
reasonable judgment of Tenant for Tenant's business operations, Tenant may
terminate this Lease by giving notice to Landlord, such termination to be
effective as of the date specified in such notice. If this Lease is not
terminated, Tenant's condemnation award shall be used for the purpose of
repairing or restoring the Improvements in accordance with Section 7.4.
13.2 Award. Whether or not this Lease is terminated as a result of any
Taking, Landlord and Tenant shall together make one claim for an award for their
combined interests in the Leased Premises including an award for severance
damages if less than the whole shall be so taken. The condemnation proceeds
shall be distributed to Landlord and Tenant as their respective interests
appear. Both parties shall have the right to appear in and defend against such
action as they deem proper in accordance with their own interests at their own
expense. To the extent possible, the parties shall cooperate to maximize the
condemnation proceeds payable by reason of the condemnation. Issues between
Landlord and Tenant required to be resolved pursuant to this Article shall be
joined in any such condemnation proceeding to the extent permissible under then
applicable procedural rules of such court of law or equity for the purpose of
avoiding multiplicity of actions and minimizing the expenses of the parties. If
this Lease is not terminated pursuant to this Article, it shall continue, except
that commencing with the date on which Tenant is deprived of the use of any
portion of the Leased Premises or of any rights under this Lease, Rent shall be
abated or reduced according to the extent to which Tenant is deprived of the use
or benefit of the Leased Premises or of any rights under this Lease. If the
Taking occurs in the last five (5) years of the Term, either Landlord or Tenant,
by written notice to the other, may terminate this Lease, such termination to be
effective as of the date that the condemnor acquires title to all or a portion
of the Leased Premises.
13.3 Taking for Temporary Use. If there is a Taking of the Leased
Premises for temporary use for a period equal to or less than eight (8) months,
this Lease shall continue in full force and effect, Tenant shall continue to
comply with Tenant's obligations under this Lease not rendered physically
impossible by such Taking, neither the Term nor the Rent shall be reduced or
affected in any way, but the Rent shall continue at the level of the last Rent
paid prior to the Taking (including any subsequent increases in such Rent
provided for under this Lease), and Tenant shall be entitled to any and all
Awards for the use or estate taken. If any such Taking is for a period extending
beyond such eight (8) month period, the Taking shall be treated as a total,
substantial or partial taking, as appropriate.
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ARTICLE 14 - DEFAULT
14.1 Default.
The occurrence of any one or more of the following events shall, after
the giving of the Notice of Default required by Section 14.2 or 14.4 (nonpayment
of Rent does not require a Notice of Default), constitute a default
("Default(s)") under this Lease by Tenant or Landlord, as applicable:
(i) any failure by Tenant to pay the Rent or make any other
payment required to be made by Tenant hereunder, on the date the payment is due;
or
(ii) a failure by Tenant or Landlord to observe and perform
any other condition, restriction, covenant, obligation or provision of this
Lease to be observed or performed by Tenant or Landlord, as applicable.
14.2 Notice of Default; Tenant's Right to Cure .
(a) If Tenant has committed or permitted to exist a breach of any
provision of this Lease (other than nonpayment of Rent) or has committed or
permitted any other breach described above in Section 14.1, Landlord shall give
notice of said breach ("Notice of Default") to Tenant.
(b) Tenant shall be in default hereunder without notice from
Landlord if Rent is not paid by the tenth (10th) day of each calendar month (or
if the tenth day falls on a Saturday or Sunday, the first Monday of the calendar
month); except that if the Rent Commencement Date is on a day other than the
first day of a calendar month, then Tenant shall be in default hereunder if the
Rent is not paid within ten (10) days after the Rent Commencement Date.
(c) If the alleged Default is nonpayment of Additional Rent,
Impositions or other sums to be paid by Tenant as provided in this Lease, Tenant
shall have twenty (20) days after the Notice of Default is given to cure the
Default. For any other Default, Tenant shall, after the Notice of Default,
promptly and diligently commence curing the Default and shall have sixty (60)
days after the Notice of Default to complete the cure of said Default; provided,
however, that if the nature of said Default is such that the same cannot
reasonably be cured within said sixty (60) day period, Tenant shall have such
additional time as is reasonably necessary to cure such Default, provided that
at all times prior to the expiration of said sixty (60) day period and for the
period thereafter that the Default remains uncured, Tenant is exercising
reasonable diligence in its efforts to cure such Default.
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(d) As used in this Lease, the term "Uncured Default" shall mean
any Default by Tenant which continues uncured, following the giving of a Notice
of Default as required by this Lease, for the cure period applicable to that
Default under the provisions of this Lease.
14.3 Landlord's Right to Cure Tenant's Defaults. After expiration of
the applicable time for curing a particular Default and upon not less than five
(5) business days' notice (unless a longer period of time is otherwise expressly
provided by this Lease, in which case such longer period shall apply), Landlord
may, at Landlord's election, make any payment (other than Rent payable to
Landlord) required of Tenant under this Lease or perform or comply with any
covenant or condition imposed on Tenant under this Lease, and the amount so
paid, plus the reasonable cost of any such performance or compliance, plus
interest on such sum at the Agreed Rate, from the date of payment, performance,
or compliance until the date of repayment by Tenant, shall be due and payable by
Tenant on the first day of the next calendar month following any such payment,
performance or compliance by Landlord as Additional Rent hereunder. No such act
shall constitute a waiver of any Default or of any remedy for Default or render
Landlord liable for any loss or damage resulting from any such act (except to
the extent such loss or damage arises from Landlord's or Landlord's
Representatives' negligence or intentional or willful misconduct).
14.4 Notice of Landlord's Default; Tenant Waiver.
(a) If Landlord has committed a breach under this Lease, as
described in Section 14.1, Tenant shall deliver a Notice of Default to Landlord.
Each Notice of Default shall specify the alleged Default.
(b) Landlord shall, after notice, promptly and diligently commence
curing the Default and shall have sixty (60) days after notice is given to
complete the cure of said Default; provided, however, that if (i) the nature of
said Default is such that the same cannot reasonably be cured within said sixty
(60) day period, and (ii) Landlord shall have in good faith commenced and
diligently and continuously pursued such cure, then Landlord shall have such
time as is reasonably necessary to complete the cure of said Default. If it is
determined that Landlord is liable to Tenant for damages pursuant to this Lease
Landlord shall pay such damages to Tenant in accordance with such judgment
within 30 days after such determination. Tenant shall have no right to offset
any amount of damages owed by Landlord to Tenant against the Rent owed by Tenant
to Landlord under this Lease. If any amount owed to the Tenant by Landlord is
not paid when due, interest shall accrue on such amount at the Agreed Rate from
the date due until the date that such amount is paid. After expiration of the
applicable time for Landlord to cure a particular Default and upon not less than
five (5) business days'
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notice (unless a longer period of time is otherwise expressly provided by this
Lease, in which case such longer period shall apply), Tenant may, at Tenant's
election, make any payment required of Landlord under this Lease or perform or
comply with any covenant or condition imposed on Landlord under this Lease, and
the amount so paid, plus the reasonable cost of any such performance or
compliance, plus interest on such sum at the Agreed Rate, from the date of
payment, performance, or compliance until the date of repayment by Landlord,
shall be due and payable by Landlord on the first day of the next calendar month
following any such payment, performance or compliance by Tenant. No such act
shall constitute a waiver of any Default or of any remedy for Default or render
Tenant liable for any loss or damage resulting from any such act (except to the
extent such loss or damage arises from Tenant's or Tenant's Representatives'
negligence or intentional or willful misconduct).
14.5 Landlord's Remedies.
(a) In the event of any Uncured Default, then, subject to the
rights of a Lender expressly set forth in this Lease, Landlord shall have the
immediate option to terminate this Lease and all rights of Tenant hereunder by
giving written notice of such termination, in which event the Parties shall have
no further obligation to one another under this Lease.
(b) Notwithstanding the provisions of this Article 14 above to the
contrary, if, within ten (10) days of Tenant's receipt of a Notice of Default
with respect to a Non-monetary Default by Tenant, Tenant shall in good faith
notify Landlord in writing that it disputes the existence of such Non-monetary
Default and that it requests a determination of the existence or non-existence
of such Non-monetary Default, then Landlord may not exercise its right to
terminate this Lease pursuant to this Article 14 on account of such Non-monetary
Default of Tenant until the expiration of the applicable cure period measured as
if such cure period commenced upon the earlier of (i) the date of the
determination that such Non-monetary Default exists, or (ii) the failure by
Tenant to diligently and continuously pursue the legal proceeding. The exercise
of Tenant's right pursuant to this paragraph shall not impair or delay the
ability of Landlord to exercise any rights or remedies other than termination of
this Lease.
(c) In the event Tenant fails to pay Rent to Landlord, Landlord
shall have the right to pursue all of its legal and equitable remedies against
Tenant for collection of such amounts, including without limitation the remedy
described in California Civil Code Section 1951.4 which provides that a lessor
may continue a lease in effect after lessee's breach and abandonment and recover
rent as it becomes due, if the lessee has the right to sublet or assign, subject
only to reasonable limitations.
(d) Tenant hereby acknowledges that late payment by Tenant to
Landlord of
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Rent and other sums due hereunder will cause Landlord to incur costs not
contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not limited to, processing
and accounting charges and late charges which may be imposed on Landlord by the
terms of any mortgage, deed of trust, or bonded indebtedness. Accordingly, if
any installment of Rent shall not be received by Landlord or its designee within
ten (10) days after Rent is due, or if any Additional Rent or Impositions shall
not be received by Landlord within twenty (20) days after the Notice of Default
is given, then without any requirement for notice to Tenant, Tenant shall pay to
Landlord a late charge equal to five percent (5%) of such overdue amount. The
parties hereby agree that such late charge represents a fair and reasonable
estimate of the costs Landlord will incur by reason of late payment by Tenant.
Acceptance of such late charge to Landlord shall in no event constitute a waiver
of Tenant's default with respect to such overdue amount, nor prevent Landlord
from exercising any of the other rights and remedies granted hereunder. In the
event that a late charge is payable hereunder, whether or not collected, for
three (3) consecutive installments of Rent, then Rent shall automatically become
due and payable quarterly in advance, rather than monthly, notwithstanding
Article 4 or any other provision of this Lease to the contrary.
14.6 Tenant Remedies; Remedies Cumulative. Except as otherwise
expressly provided in this Lease, Tenant and MiniMed, as appropriate, shall have
all rights and remedies at law or equity upon the occurrence of an Uncured
Default by Landlord hereunder including, but not limited to, the remedies
provided under California Civil Code Sections 1951.2 (pursuant to California
Civil Code Section 1951.2, the damages Landlord may recover against Tenant
include, but are not limited to, the worth at the time of award of the amount by
which the unpaid Rent for the balance of the Term after the time of award,
exceeds the amount of such rental loss for the same period that the Tenant
proves could be reasonably avoided). Each right and remedy of Landlord, Tenant
and MiniMed provided for in this Lease shall be cumulative and shall be in
addition to every other right or remedy provided for in this Lease except as
otherwise limited by this Lease, and the exercise or the beginning of the
exercise by Landlord, Tenant or MiniMed of any one or more of the rights or
remedies provided for in this Lease, except as otherwise limited by this Lease,
shall not preclude the simultaneous or later exercise by Landlord, Tenant or
MiniMed of any or all other rights or remedies provided for in this Lease,
except as otherwise limited by this Lease.
14.7 No Waiver. Landlord's, Tenant's or MiniMed's failure to enforce
any provision of this Lease with respect to a Default hereunder shall not
constitute a waiver of Landlord's, Tenant's or MiniMed's right to enforce such
provision or any other provision with respect to any future Default. The
acceptance of Rent by Landlord shall not be deemed a waiver of Landlord's right
to enforce any term or provision hereof. The waiver of any term or condition of
this Lease shall not be deemed to be a waiver of
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any other term or condition hereof or of any subsequent failure of any term or
condition hereof.
14.8 Delays in Performance. The time within which the Parties hereto
shall be required to perform any obligation under this Lease shall be extended
by a period of time equal to the number of days during which performance of such
act is delayed due to an act of God, strikes, lockouts, fire, earthquake, flood,
explosion, war, invasion, insurrection, riot, mob violence, acts of the public
enemy, epidemics, quarantine restrictions, freight embargoes, unusually severe
weather, application of governmental restrictions, regulations or controls not
contemplated by this Lease or otherwise reasonably foreseeable, court order,
delays or inaction of independent contractors, remediation of Hazardous
Materials located upon the Leased Premises, litigation brought against the
Leased Premises or a Party without that Party's consent, or other like events
which are completely and strictly beyond a Party's control (the "Force Majeure
Events"). The additional grace period or extension of time provided above shall
be equal to the period of delay caused by the above-described event, which
period shall commence to run from the time of the commencement of the cause for
delay and shall terminate upon termination of that cause. A Party wishing to
invoke this Section must notify in writing the other Party to this Lease of that
intention within sixty (60) days of the commencement of any such cause for delay
and shall, at that time, specify the reasons therefor, the specific provision of
this Lease which will be delayed as a result, and the period of such extension,
if known, or if not known, a reasonable estimate thereof.
ARTICLE 15 - EXPIRATION; TERMINATION
At the expiration or earlier termination of this Lease, Tenant shall
surrender to Landlord possession of the Leased Premises free and clear of all
liens, encumbrances and Mortgages other than those, if any, created by Landlord,
those which both extend beyond the Term of this Lease and were expressly
approved in writing by Landlord, or those which encumbered the Leased Premises
prior to the Commencement Date of this Lease. If this Lease is terminated under
circumstances for which Landlord is obligated to buy the Improvements, Tenant
shall leave the Leased Premises and any other property surrendered in good
condition, reasonable wear and tear excepted. If this Lease is terminated for
any other reason, Tenant shall leave the Leased Premised and any other property
surrendered in its then existing "as is" condition. As provided above at Section
6.8, all property that Tenant is required to surrender shall become Landlord's
property at termination or expiration of this Lease. All property that Tenant is
not required to surrender but that Tenant does abandon by failure to remove said
property within sixty (60) days after the expiration or earlier termination of
this Lease shall, at Landlord's election, become Landlord's property.
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ARTICLE 16 - MASTER GROUND LEASES
The Parties acknowledge that this Lease is subject and subordinate to
the terms of the Master Leases between the Trustees of the California State
University System and Landlord dated May __, 1999.
ARTICLE 17 - INTERRELATIONSHIP BETWEEN UNIVERSITY
AND LEASED PREMISES
17.1 Goals of Master Landlord, Landlord and Tenant. The Parties
acknowledge that the Leased Premises is currently located on the campus of the
University. It is the desire of Landlord and Tenant that many of the services,
goods and facilities of the Research Center will (a) relate to many functions of
the University, (b) provide and/or share services and facilities needed for the
students, faculty and employees of the University, and (c) provide opportunities
for student employment, materials and education. In addition, it is the desire
of Landlord and Tenant that the presence of the Research Center will (i) enhance
the attractiveness of the University campus; (ii) encourage students, faculty
and visitors to make increased use of present University facilities; and (iii)
allow some of the businesses operating at the Research Center to interrelate
with University activities.
17.2 Cooperation Covenants of Tenant and its Subtenants. Tenant shall,
subject to the qualifications set forth below, cooperate with Landlord to
provide the following:
(a) Provide internships for undergraduate and graduate
students;
(b) Participate in work-study programs for undergraduate and
graduate students;
(c) Provide employment opportunities for undergraduate and
graduate students;
(d) Undertake joint research programs with the University's
faculty;
(e) Co-sponsor research seminars or conferences;
(f) Undertake such other academic activities as mutually
agreed upon;
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(g) Make the Conference Center available for University use in
accordance with Section 5.1(c).
The above goals, purposes and programs shall be provided as long as
they do not unreasonably interfere with the operation and management of the
Research Center and the commercially reasonable business operations of the
occupants thereof. The parties will reasonably cooperate to implement the above
programs.
The above items shall be by way of example, and not of limitation, with
the understanding that such undertakings will relate to Tenant or Subtenants
which will operate their businesses in the Research Center pursuant to Subleases
with Tenant. Tenant will incorporate provisions in its Subleases to accommodate
these goals, purposes and programs, and to reasonably provide for such
accommodations in any conditions, covenants or restrictions governing the
Research Center.
17.3 Businesses Within Research Center. Tenant shall use its reasonable
good faith efforts to cause all of the Subtenants to agree to (a) interact with
the University business school, (b) make corporate and enterprise personnel
available for lecturing and instruction to the University, (c) provide intern
programs to University students.
17.4 Use of University Facilities. The Master Leases provide that so
long as Tenant is not in default under this Lease, the University will enable
Tenant and appropriate Subtenants to use the University library and other
University facilities. The guidelines for use of University facilities are to be
negotiated between the parties.
17.5 Cooperation Covenants Regarding Tenant. Tenant shall (a) establish
rules and regulations acceptable to Landlord regarding the use of the Conference
Center on a non-interfering basis by faculty, staff and students of the
University which promote the integration of the Conference Center into the
University's activities, (b) engage in advertising and public relations noting
the University and the interface between the Research Center and the University,
(c) designate management personnel of the Research Center to be coordinators and
contacts with the University for events and public relations, (d) subject to the
terms of the Subleases, make hardscape and landscape areas within the Research
Center available for University events and functions on a non-interfering basis
as appropriate such as art exhibits and displays featuring the University and it
students, faculty and programs, and (e) consult with and develop programs and
public relations for co-sponsored University and Research Center events with an
event and information officer of the University campus.
17.6 Change In Use. In the event Tenant desires to change the use of
the
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Research Center from those permitted pursuant to Section 5.1, Tenant agrees that
it must cooperate with Landlord and Master Landlord to create an
interrelationship between the new use of the Leased Premises and the University
which allows the University students, faculty and employees to benefit from the
close proximity of the Leased Premises to University facilities, and that absent
prior written approval from Landlord, Tenant may not change the use of the
Research Center.
ARTICLE 18 - MISCELLANEOUS
18.1 Landlord's Representations and Warranties. Landlord covenants,
represents and warrants to Tenant and MiniMed, as of the date of execution of
this Lease, as follows:
(a) Landlord is a not-for-profit corporation duly incorporated and
in good standing under the laws of the State of California, has full legal
right, power, and authority to enter into this Lease and to carry out and
consummate all transactions contemplated by this Lease, and by appropriate
corporate action has duly authorized the execution and delivery of this Lease.
Further, Landlord will take those actions required to remain in good standing
under the laws of the state of California during the term of this Lease.
(b) To Landlord's actual knowledge, the execution, delivery and
performance of this Lease by Landlord does not result in a material violation
of, or constitute a material default under, any provision of any existing
agreement, judgment or court order.
(c) Except as revealed in writing by Landlord to Tenant, Landlord
has not been served with any pending, and knows of no threatened, litigation or
claims against the Leased Premises or against Landlord in connection with the
Leased Premises which would have an adverse effect on the transactions
contemplated herein.
(d) Copies of all documents heretofore delivered by Landlord to
Tenant are true, correct and complete copies of such documents in all material
respects.
(e) Landlord makes no representation or warranty as to the
condition of the title to the Leased Premises except that Master Landlord is
vested with the fee simple title thereto, subject to all recorded and unrecorded
encumbrances, liens, encroachments, rights of way, easements and other possible
claims of interest that may be discovered by examination of the public records
and by survey and inspection, and that Landlord has leasehold title to the
Leased Premises pursuant to the Master Leases.
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18.2 Tenant's Representations and Warranties. Tenant covenants,
represents and warrants to Landlord, as of the date of execution of this Lease,
as follows:
(a) Tenant has full legal right, power, and authority to enter
into this Lease and to carry out and consummate all transactions contemplated by
this Lease.
(b) The persons executing this Lease on behalf of Tenant are fully
authorized to execute the same.
(c) This Lease has been duly authorized, executed, and delivered
by Tenant, and will constitute a legal, valid, and binding agreement of Tenant,
enforceable against Tenant in accordance with its terms, except as enforcement
may be limited by bankruptcy, insolvency or other laws affecting the enforcement
of creditors' rights generally and by the application of equitable principles if
equitable remedies are sought.
(d) Except as may be disclosed in MiniMed's public filings with
the Securities and Exchange Commission, or as revealed in writing by Tenant to
Landlord, Tenant has not been served with any pending, and knows of no
threatened, litigation or claims against Tenant which would have an adverse
effect on the transactions contemplated herein.
(e) Copies of all documents heretofore delivered by Tenant to
Landlord are true, correct and complete copies of such documents in all material
respects;
(f) Tenant has examined the Leased Premises and hereby accepts
possession of the Leased Premises in its "as is" condition, with all faults and
defects subject to the terms of this Lease.
18.3 Survival of Representations, Warranties and Covenants. The
respective representations, warranties and covenants contained herein shall
survive the Commencement Date and continue throughout the Term.
18.4 Further Assurances. Each party hereto will promptly execute and
deliver without further consideration such additional agreement, assignments,
endorsements and other documents as the other party hereto may reasonably
request to carry out the purposes of this Lease.
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18.5 Estoppel Certificate.
(a) Within twenty (20) days after request by Landlord or Tenant
(which request may be from time to time as often as reasonably required by
Landlord or Tenant) Landlord or Tenant shall execute and deliver to the other,
without charge, a statement (the "Estoppel Certificate") in the form of Exhibit
E attached hereto or in such other similar form as Landlord or Tenant may
reasonably request. Any such statement may be conclusively relied upon by any
Lender, Subtenant or prospective purchaser of the Leased Premises.
(b) If the other Party fails to respond to such request within
such twenty (20) day period, the requesting Party shall deliver a second notice
stating that the failure of the other Party to respond to such request within
three (3) working days after receipt of such second request will result in a
deemed approval with respect to the requested matters. The failure to deliver
such statement within that three (3) day period shall (with respect to third
parties relying upon such estoppel certificate), without limiting any other
remedy which the requesting party may have as a result of such failure, be
conclusive upon the Party which fails to deliver such statement that this Lease
is in force and effect with only such modifications as have been identified by
the requesting Party, that there are no outstanding Defaults in the performance
of the requesting Party, and that there have not been any payments of advance
rent other than as provided in the provisions of this Lease.
18.6 Notices. All notices, requests, demands and other communications
under this Lease shall be in writing and shall be deemed to have been given on
(a) the date of service if served personally on the Party to whom notice is to
be given, (b) the date of actual or attempted delivery provided such attempted
delivery is made on a business day, if served by Federal Express, Express Mail
or another like overnight delivery service, (c) the date of actual delivery as
shown by the addressee's registry or certification of receipt or the third
business day after the date of mailing, whichever is earlier, if mailed to the
person to whom notice is to be given, by first class U.S. mail, registered or
certified, postage prepaid, return receipt requested and properly addressed as
follows (or to such other address as either Party may from time to time direct
by written notice given in the manner herein prescribed), or (d) one day after
receipt of a confirmed facsimile transmission provided any such communication is
concurrently given by one of the above methods:
If to Landlord: North Campus Development Corporation
California State University Northridge
Northridge, California 91330
Attn: Vice President for Administration
& University Advancement
Tel: 818-677-2333
FAX: 818-677-5089
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With a copy to: Herbert M. Weiser, Esq.
King, Weiser, Bazar & Jacobs
2049 Century Park East
Suite 900
Los Angeles, California 90067
Tel: 310-553-1600
FAX: 310-556-5687
California State University, Northridge
Attention: University Counsel
18111 Nordhoff Street
Northridge, California 91330-8355
Tel: 818-677-5931
FAX: 818-677-2001
and, if to Tenant: First Security Bank, National Association
79 South Main Street
Salt Lake City, Utah 84111
Attention: Val Orton
FAX: 801-246-5053
with copies to: ING (U.S.) Capital LLC
55 East 52nd Street, 33rd Floor
New York, New York 10055
Attention: Chief Credit Officer
ING (U.S.) Capital LLC
Atlanta Office
200 Galleria Parkway, Suite 950
Atlanta, Georgia 30339
Attention: Darren J. Wells
King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303-1763
Attention: Hector E. Llorens
MiniMed Inc.
12744 San Fernando Road
Sylmar, California 91342
Attention: General Counsel
Telephone: 818-362-5958
FAX: 818-367-1460
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and if to MiniMed: MiniMed Inc.
12744 San Fernando Road
Sylmar, California 91342
Attn: General Counsel
Tel: 818-362-5958
FAX: 818-367-1460
With copies to: Broebeck Phleger & Harrison
55 West C. Street, Suite 1300
San Diego, California 92101
Attention: Scott Biel
18.7 Attorneys' Fees. In the event that either Party hereto brings any
action or files any proceeding in connection with the enforcement of its
respective rights under this Lease or as a consequence of any breach by the
other party of its obligations under this Lease, the prevailing party in such
action or proceeding shall be entitled to have its reasonable attorneys' fees
(including allocable costs for any in-house counsel) and out-of-pocket
expenditures paid by the losing Party. The attorneys' fees so recovered shall
include fees for prosecuting or defending any appeal and shall be awarded for
any supplemental proceedings until the final judgment is satisfied in full. In
addition to the foregoing award of attorneys' fees to the prevailing party, the
prevailing party in any lawsuit on this Lease shall be entitled to its
attorneys' fees incurred in any post judgment proceedings to collect or enforce
the judgment. This provision is separate and several and shall survive the
merger of this Lease into any judgment on this Lease.
18.8 Headings. The headings used in this Lease are inserted for
reference purposes only and do not affect the interpretation of the terms and
conditions hereof.
18.9 Rights of Successors. All of the rights and obligations of the
Parties under this Lease shall bind and inure to the benefit of their respective
heirs, successors and assigns; provided, however, that nothing in this Section
18.9 shall be construed to limit or waive the provisions concerning restrictions
on Transfer set forth in Article 9 hereof.
18.10 Amendments in Writing. This Lease cannot be orally amended or
modified. Any modification or amendment hereof must be in writing and signed by
the Party to be charged.
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18.11 No Brokers. Each Party shall defend, indemnify, and hold the
other harmless from all costs and expenses, including attorneys' fees, arising
out of any and all claims for broker's agent's or finder's fees or commissions
in connection with the negotiation, execution or consummation of this
transaction incurred as a result of any statement, representation or agreement
alleged to have been made or entered into by the indemnifying Party. Neither
Tenant nor Landlord is entitled to receive any brokerage commission as a
consequence of this transaction.
18.12 Negation of Partnership. Nothing in this Lease shall be construed
to render Landlord, a partner, joint venturer, or associate in any relationship
or for any purpose with Tenant, other than that of Landlord and Tenant, nor
shall this Lease be construed to authorize either to act as agent for the other.
18.13 Time of Essence. Time is of the essence of each provision in this
Lease, subject to delays caused by any of the force majeure events set forth in
Section 14.8.
18.14 Interpretation. When the context and construction so require, all
words used in the singular herein shall be deemed to have been used in the
plural, and the masculine shall include the feminine and neuter and vice versa.
The term "Person" as used in this Lease means a natural person, corporation,
limited liability company, association, partnership, organization, business,
trust, individual, or a governmental authority, agency, instrumentality or
political subdivision, and whenever the word "day" or "days" is used herein,
such shall refer to calendar day or days, unless otherwise specifically provided
herein. Whenever a reference is made herein to a particular Section of this
Lease, it shall mean and include all subsections and subparts thereof. The word
"include" or "including" shall describe examples of the antecedent clause, and
shall not be construed to limit the scope of such clause.
18.15 Applicable Law; Severability. The interpretation and enforcement
of this Lease shall be governed by the laws of the State of California. Should
any part, term, portion or provision of this Lease, or the application thereof
to any person or circumstances be held to be illegal or in conflict with any
Governmental Restrictions, or otherwise be rendered unenforceable or
ineffectual, the validity of the remaining parts, terms, portions or provisions,
or the application thereof to other persons or circumstances, shall be deemed
severable and the same shall remain enforceable and valid to the fullest extent
permitted by law.
18.16 Exhibits. All exhibits referred to in this Lease are attached
hereto and incorporated herein by reference.
18.17 Short Form of Lease. On or before the date which is ten days
following the execution hereof, the Parties shall execute and thereafter record
with the County
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Recorder of Los Angeles County a Memorandum of Lease, attached hereto as Exhibit
C, giving notice of the existence of this Lease and the Term hereof.
18.18 Hold as One Parcel; Reciprocal Easement Agreement. Tenant
anticipates that it and the tenant of Parcel 4 will covenant to hold the Leased
Premises and Parcel 4 as one parcel. If Tenant and the subtenant of Parcel 4 do
not so covenant, then concurrently with the delivery of the sublease for Parcel
4, Landlord, Tenant, and the tenant of Parcel 4 shall execute and deliver a
reciprocal easement agreement ("REA") in form acceptable to Landlord. The REA
shall address such issues as cross easements, restrictions, covenants and
agreements (including, but not limited to, those relating to use, utilities,
parking, ingress and egress). The REA may only be amended with the prior written
consent of Landlord. The REA shall be recorded with the County Recorder of Los
Angeles County immediately prior to the Memorandum of Lease.
18.19 Landlord's Rights of Inspection. Landlord and its authorized
Representatives shall have the right during business hours, upon not less than
twenty-four (24) hours' oral or written notice to Tenant (except that in the
case of an emergency, the existence of which shall be determined by Landlord in
its reasonable discretion, no advance notice shall be required) to enter upon
the Leased Premises for purposes of inspecting the same and exercising its
rights under this Lease, provided that such inspections shall not unreasonably
interfere with Tenant's or its Subtenant's construction or business activities.
18.20 Nonmerger of Fee and Leasehold Estates. If both Landlord's and
Tenant's estates in the Leased Premises become vested in the same owner (other
than by termination of this Lease following an Uncured Default hereunder,
subject to the rights, if any, of a Lender pursuant to Article 8 above), this
Lease shall not be terminated by application of the doctrine of merger except at
the express election of Landlord and with the consent of any Lender(s) of a
Leasehold Mortgage.
18.21 Counterparts. This Lease may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
18.22 Interest On Past Due Obligations. Except where another rate of
interest is specifically provided for in this Lease, any amount due from either
Party to the other under this Lease which is not paid within ten (10) days after
receipt of written notice that such amount is due (or in the case of Rent,
within three (3) days after such Rent is due), shall bear interest at the Agreed
Rate from the date such amount was originally due to and including the date of
payment.
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18.23 Holding Over. Any holding over by Tenant after the expiration of
the Term shall be construed as a tenancy from month to month and shall be
subject to all of the terms and conditions which are provided for in this Lease
except that the Rent shall be in an amount equal to 150% of the Rent in effect
immediately prior to the expiration of the Term.
18.24 Owner Trustee. Landlord acknowledges and agrees that so long as
First Security Bank, National Association, not individually but solely as Owner
Trustee under the MiniMed Real Estate Trust 1999-1 is Tenant, said Tenant shall
have no obligations under Section 5.4, Section 12.8 and those provisions in
Article 6 and Article 12 for which MiniMed has assumed responsibility. For the
avoidance of doubt MiniMed shall at all times remain liable for such obligations
under this Lease and in no event shall Owner Trustee have any liability or
obligation therefor. Landlord acknowledges and agrees that it shall look solely
to MiniMed for the satisfaction of such obligations.
18.25 MiniMed As Third Party Beneficiary. Notwithstanding any other
provision of this Lease, it is the express intention of the parties hereto that
the benefits of certain provisions of this Lease inure to MiniMed, its
successors and assigns. Accordingly, Tenant and Landlord acknowledge and agree
that MiniMed, its successors and assigns are hereby granted and shall have the
rights, benefits, indemnities, claims, defenses, causes of action, priorities
and interests, as the case may be, granted to "Tenant" under Sections 2.3, 3.2,
5.1, 5.4(b), 5.6, 6.7(b), 13.1, 13.2, 13.3, 14.4, 14.6, 18.7 and 18.26 hereof,
and that MiniMed, its successors and assigns are hereby granted and shall have
any and all rights to enforce and defend its rights (at law or in equity) as a
third party beneficiary under the foregoing sections hereof.
18.26 Automatic Amendment of this Lease. Landlord and Tenant
acknowledge that Sections 5.4(a), 6.1, 6.2, 6.3, 6.4, 6.5, 6.6, 6.7, 6.10, 11.1,
12.1, 12.2, 12.3, 12.4, 12.5, 12.6 and 12.8(a) hereof (collectively, the
"Financing Accommodations") have been agreed to in order to accommodate First
Security Bank, National Association, not individually but solely as Owner
Trustee under the MiniMed Real Estate Trust 1999-1, as the "Tenant" under this
Lease. Landlord and Tenant agree that at such time that First Security Bank,
National Association, not individually but solely as Owner Trustee under the
MiniMed Real Estate Trust 1999-1, is no longer the "Tenant" under this Lease,
this Lease shall be automatically amended without further action by deleting the
Financing Accommodations and inserting in their stead the corresponding
provisions set forth in the attached Schedule 18.26. That is, when First
Security Bank, National Association, not individually but solely as Owner
Trustee under the MiniMed Real Estate Trust 1999-1, is no longer the "Tenant"
under this Lease, Section 5.4, Environmental Indemnity, Subparagraph (a) as set
forth above shall be deleted, and Section 5.4, Subparagraph (a) as set forth in
Schedule 18.26 shall be inserted in its stead, and so on with each of the
remaining Financing Accommodations.
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IN WITNESS WHEREOF, the parties have executed this Lease as of the date
first above written.
TENANT:
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually but solely as Owner Trustee
under the MiniMed Real Estate Trust 1999-1
Date: May 18, 1999 By: /s/ VAL T. ORTON
-------------------------------------
Print Name: Val T. Orton
Its: Vice President
By: /s/ DEANN MADSEN
-------------------------------------
Print Name: DeAnn Madsen
Its: Assistant Trust Officer
LANDLORD:
NORTH CAMPUS-UNIVERSITY PARK
DEVELOPMENT CORPORATION, a
not-for-profit corporation
Date: May 12, 1999 By: /s/ THOMAS J. MCCARRON
-------------------------------------
Print Name: Thomas J. McCarron
Its: Executive Director
By: /s/ JAMES F. SULLIVAN
-------------------------------------
Print Name: James F. Sullivan
Its: Interim V.P. Administration; Finance
The undersigned, MiniMed Inc., has executed this Lease for the purpose of
acknowledging and agreeing to its obligations under Section 5.4, Article 6,
Section 11.1, Article 12 and Section 18.26 of this Lease.
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MINIMED INC., a Delaware corporation
By: /s/ ERIC S. KENTOR
-------------------------------------
Print Name: Eric S. Kentor
Its: Sr. Vice President and General Counsel
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