BUILDING LEASE
SORRENTO RESEARCH FACILITY
This Building Lease ("LEASE") is dated as of February 1, 2002 ("EFFECTIVE
DATE"), between Landlord and Tenant (as each is defined below), who agree as
follows:
R E C I T A L S
A. PROJECT. Landlord is the owner of the real property commonly known as
0000 Xxxxxxxx Xxxxxx Xxxxxxxxx, Xxx Xxxxx, Xxxxxxxxxx ("PROJECT").
B. LEASE. Landlord and Tenant desire to enter into a lease for a portion
of the Project under the following provisions and conditions.
A G R E E M E N T
1. FUNDAMENTAL INFORMATION. The following terms shall have the meanings
ascribed to them below:
1.1 "LANDLORD" is Pacific Apartment Group, LLC, a California limited
liability company, and PMSI SRF, LLC, a California limited liability company,
d/b/a Sorrento Research Facility.
1.2 "TENANT" is Alexion Pharmaceuticals, Inc., a Delaware
corporation.
1.3 "ORIGINAL TERM" shall commence on the Commencement Date and shall
continue for ten (10) years thereafter.
1.4 "MONTHLY RENT" shall be $2.45 per month per square foot of Floor
Area of the Phase I Premises (as defined in Paragraph 1.9 hereof), subject to
adjustment pursuant to PARAGRAPHS 4.5 AND 5.2 below. The Monthly Rent shall be
$1.35 per month per square foot of Floor Area of the Phase II Premises, subject
to adjustment pursuant to Paragraphs 4.4, 4.5, and 5.2 below.
1.5 "COMMENCEMENT DATE" shall be (subject to Paragraph 4.1 hereof) the
later of the following: (i) four (4) months after Tenant obtains the building
permit for the Landlord Improvements (as defined below) ("SCHEDULED COMMENCEMENT
DATE"), or (ii) the date by which Landlord delivers to Tenant possession of the
Phase I Premises with the improvements substantially complete as provided in
PARAGRAPH 4.6 below.
1.6 "PHASE II COMMENCEMENT DATE" shall be the date that Landlord
delivers to Tenant the Phase II Premises, which shall occur on August 31, 2003.
1.7 Landlord's address for notices:
Pacific Management Services, Inc.
0000 Xx Xxxxx Xxxxxxx Xx., Xxxxx 000
Xxx Xxxxx, XX 00000
With a copy to:
PMSI SRF, LLC 0000 Xxxxxxxxx Xxxxx, Xxxxx 000 Xxx Xxxxx,
Xxxxxxxxxx 00000
1.8 Tenant's address for notices:
Prior to the Commencement Date:
Alexion Pharmaceuticals, Inc.
00000 Xxxxxxxx Xxxxxx Xx.
Xxxxx X
Xxx Xxxxx, XX 00000
Attn: Xxxxx Xxxxxxx
with a copy to:
Alexion Pharmaceuticals, Inc.
000 Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxx Xxxx
After the Commencement Date:
At the Premises
Attn: Xxxxx Xxxxxxx
with a copy to:
Alexion Pharmaceuticals, Inc.
000 Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxx Xxxx
1.9 "PREMISES" initially are those outlined on EXHIBIT "A" consisting
of approximately 12,025 rentable square feet of Floor Area ("PHASE I PREMISES")
in that certain building ("BUILDING") located at the Project. As of the Phase II
Commencement Date, the Premises also shall include the premises of the
approximately 13,215 rentable square feet of Floor Area described on EXHIBIT "A"
attached hereto ("PHASE II PREMISES").
1.10 "TENANT'S PERCENTAGE" shall be (i) from the Commencement Date
until the Phase II Commencement Date, the ratio of the rentable square feet of
Floor Area of the Phase I Premises to the rentable square feet of Floor Area of
the Project, as Landlord may reasonably
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determine; and (ii) after the Phase II Commencement Date, the ratio of the
rentable square feet of Floor Area of the Premises to the rentable square feet
of Floor Area of the Project, as Landlord may reasonably determine.
1.11 "SECURITY DEPOSIT" shall be an amount equal to the greater of the
following: (i) One Hundred Eighty-Nine Thousand Two Hundred Six Dollars
($189,206.00), or (ii) four months of Monthly Rent for the Phase I Premises and
Phase II Premises. The Security Deposit shall be due upon the mutual execution
of this Lease and is subject to increase pursuant to PARAGRAPH 4.4 below.
1.12 The specified use of the Premises (i) is general office,
biomedical research and development (including vivarium and biomedical
manufacturing and any other legal related uses) and (ii) other uses approved by
Landlord (which approval shall not be unreasonably withheld) and in compliance
with all Applicable Law.
1.13 The Broker representing Tenant is Xxxxx Xxxxxx of Xxxxxxx Real
Estate Services, and representing Landlord is Pacific Management Services, Inc.
1.14 "RENT COMMENCEMENT DATE" shall be the Commencement Date. No
Monthly Rent shall accrue on the Phase II Premises until the Phase II
Commencement Date.
1.15 Tenant shall be entitled without charge during the Term to the
greater of (i) three (3) parking spaces per each 1,000 rentable square feet of
Floor Area of the Premises, or (ii) the minimum number of spaces required by law
for Tenant's use. Tenant's parking shall include Tenant's pro rata share of
non-reserved parking spaces in the parking facilities established by Landlord
for visitor (to be designated in a location mutually agreeable to Landlord and
Tenant) and handicapped parking.
1.16 "TENANT'S REPRESENTATIVE" shall be Xxxxx Xxxxxxx. Tenant agrees
that Landlord can rely on any written notice or approval by the Tenant
Representative as conclusively binding upon Tenant.
2. PREMISES. Landlord leases the Premises to Tenant, and Tenant hereby
leases the Premises from Landlord for the Original Term, subject to the
provisions contained herein. Landlord reserves the right, exercisable upon
notice to Tenant and without liability to Landlord, to change the name and
street address of the Project. Except as expressly set forth herein, Landlord
makes no representations, express or implied, with respect to the legality,
fitness, or desirability of the Premises for Tenant's intended use.
3. TERM.
3.1 OPTION TO EXTEND. Tenant, at its option, may extend the Original
Term for one (1) separate and additional period of five (5) years ("EXTENDED
TERM"), subject to PARAGRAPH 3.2 below. The Extended Term shall be on the same
terms and conditions (except for Monthly Rent and as otherwise expressly
provided in this Paragraph 3) set forth in this Lease. The option to extend
shall be exercised by Tenant giving written notice to Landlord at least One
Hundred Eighty (180) days but not greater than three hundred sixty (360) days
prior to the expiration of the Original Term. Upon such exercise, this Lease
shall be deemed to be extended without the execution of any further instrument.
"TERM" shall refer to the Original Term of this Lease as so extended.
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3.2 LIMITATION ON EXERCISE. Notwithstanding the foregoing, Tenant's
right to exercise an option for an Extended Term is expressly conditioned on at
the time Tenant attempts to exercise an option to extend pursuant to this Lease,
Tenant shall either not be in default under this Lease, or if in default, shall
not fail to cure such default after notice and expiration of the applicable cure
period. If the foregoing condition is not met, then any attempt by Tenant to
exercise an option to extend hereunder shall, at the election of Landlord upon
written notice to Tenant within ten (10) days after the date of Tenant's
election, be null and void and this Lease shall terminate on the expiration of
the then current Term. Further, if Tenant is in default beyond the applicable
cure period on the date the Extended Term is to commence, at Landlord's
election, upon written notice to Tenant within ten (10) days after the date the
Extended Term would otherwise commence, the Extended Term shall not commence and
this Lease shall terminate on the expiration of the Original Term.
3.3 RENT DURING EXTENDED TERM. The Monthly Rent during the first year
of the Extended Term shall be the fair-market rent of the Premises as Tenant and
Landlord shall reasonably agree or as otherwise determined in accordance with
the provisions of this Paragraph 3.3, but in no event shall the fair-market rent
be less than the Monthly Rent payable immediately prior to the Extended Term
("FINAL TERM RENT"). If Landlord and Tenant are unable to establish the
fair-market rent within one hundred twenty (120) days in advance of the
commencement of the Extended Term, the fair-market rent shall be determined by a
single MAI certified real estate appraiser ("APPRAISER") jointly selected by
Landlord and Tenant. If they cannot in good faith agree to a single Appraiser
within one hundred (100) days prior to the commencement of the Extended Term,
the fair-market value shall be determined by a majority of three Appraisers, one
selected by Landlord, one selected by Tenant, and one selected by the two
previously selected Appraisers. Within ninety (90) days prior to commencement of
the Extended Term, Landlord and Tenant each shall give notice of its selection
of an Appraiser to the other party. If either Landlord or Tenant fails or
refuses to select an Appraiser within ten (10) days after receipt of written
notice of the other party's selection of an Appraiser, the fair-market rent
shall be determined by the single Appraiser selected. The Appraiser (or
Appraisers) shall determine the fair-market rent as soon as possible. If a
majority of the three Appraisers are unable to agree upon the fair-market rent
within thirty (30) days after the appointment of the first Appraiser, the
fair-market rent shall be an amount equal to the average of the three values
determined by the Appraisers, excluding any fair-market rent which is ten
percent (10%) greater than or ten percent (10%) less than the middle value. As
used herein, "FAIR-MARKET RENT" shall mean the price that a ready and willing
tenant would pay as Monthly Rent to a ready and willing landlord if the Premises
were offered for lease on the open market for a reasonable period of time and
shall be the product of the fair-market monthly rental rate per rentable square
foot multiplied by the rentable area of the Premises. The fair-market rent shall
be determined by (a) the quality and prestige of the Premises, including all
improvements to the Premises made at Landlord's expense, (b) recent monthly
rental rates for buildings of similar quality, size and location in Sorrento
Valley, (c) the duration of the term, (d) Tenant's obligations to pay additional
rent under this Lease, and (e) the financial strength of the tenant and any
guarantors. In determining fair market rent, the appraisers shall not consider
any alterations or improvements installed in the Premises at Tenant's expense.
Landlord and Tenant each shall pay for the Appraiser so appointed by such party,
with both Tenant and Landlord jointly paying for any jointly appointed
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Appraiser. Until such determination of the fair-market rent, Tenant shall
continue to pay the Monthly Rent immediately payable prior to commencement of
the Extended Term; provided, however, the Monthly Rent shall apply retroactively
to the beginning of the Extended Term.
4. POSSESSION.
4.1 FAILURE TO DELIVER. If the Landlord, for any reason whatsoever,
fails to deliver possession of the Premises to Tenant at the commencement of the
Original Term, this Lease shall not be void or voidable, nor shall Landlord be
held liable to Tenant for any loss or damage resulting therefrom, except that
Monthly Rent and other charges under this Lease shall be abated until the
Premises are delivered to Tenant. Notwithstanding the foregoing or anything to
the contrary in this Lease, if the Commencement Date has not occurred for any
reason whatsoever on or before the sixtieth (60) day following the Scheduled
Commencement Date (except if such delay is resulting from Tenant delays or force
majeure events), Tenant shall have the right to terminate this Lease following
written notice from Tenant to Landlord; provided, however, Landlord shall have
an additional thirty (30) days from receipt of such notice to deliver the
Premises to Tenant in the condition required hereunder, in which event this
Lease shall continue in full force and effect. In the event that Tenant elects
to terminate this Lease as stated above, the security deposit and all pre paid
rent shall be returned immediately to Tenant.
4.2 EARLY POSSESSION. Should Landlord, in its sole and absolute
discretion, tender possession of the Premises to Tenant in the condition
required pursuant to Paragraph 4.5 hereof prior to the Scheduled Commencement
Date for the operation of Tenant's business therein, such occupancy shall be
subject to all of the provisions of this Lease. If Tenant or its contractor,
employees, agents, or other licensees or invitees should otherwise enter, use,
or occupy the premises, prior to commencement of the Original Term for the
purpose of planning, performing tenant improvements, or otherwise preparing the
Premises for Tenant's occupancy thereof, such entering, occupancy and use shall
be subject to all of the provisions of this Lease except for the obligation to
pay Rent. Notwithstanding anything to the contrary in this Paragraph (but
subject to the preceding sentence) Landlord hereby agrees to permit Tenant
access to the Premises for the purpose of installing Tenant's data and phone
lines no later than sixty (60) days prior to the Commencement Date, and shall
provide Tenant other access to the Premises for the purpose of Tenant performing
minor improvements therein so long as Tenant's access does not materially
interfere with the completion of the Landlord Improvements. To the greatest
extent permitted by law, Tenant shall indemnify, defend and hold harmless
Landlord and its agents, employees, and servants with regard to such early
occupancy, except for Landlord's negligence or willful misconduct or as
otherwise set forth in this Lease.
4.3 LANDLORD IMPROVEMENTS. Landlord will construct a laboratory
build-out for the Phase I Premises ("LANDLORD IMPROVEMENTS") pursuant to plans
submitted by Tenant to Landlord and reasonably approved by Landlord accomplished
pursuant to the process devised in EXHIBIT "C" attached hereto, all of which
shall be consistent with and represent logical evolutions of or development from
the floor plan approved in writing by Landlord ("FLOOR PLAN"). The Plans (as
defined in EXHIBIT "C") generally shall provide for the Landlord Improvements to
be constructed in order to accommodate generally accepted reasonably generic
biotechnical laboratory uses as described on EXHIBIT "C-1," except as Landlord
and Tenant may otherwise agree. Tenant acknowledges that Landlord's approval of
the Plans does not constitute any
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representation or warranty whatsoever concerning the suitability of the design
of the improvements for Tenant's intended use or that the Plans will comply with
Applicable Law. Tenant shall provide to Landlord such other information as
Landlord may reasonably request for construction of the Landlord Improvements
within five (5) days after written request therefor. Tenant acknowledges that
Landlord may make changes to the Plans as required by Applicable Law or
unforeseen circumstances with Tenant's prior written consent which consent shall
not be unreasonably withheld. Any dispute concerning this Paragraph 4.3 shall be
submitted to arbitration as required in PARAGRAPH 30.38 below.
4.4 PHASE II LANDLORD IMPROVEMENTS. Subject to Paragraph 4.6 below,
Landlord shall deliver, and Tenant shall accept, the Phase II Premises in their
as-is condition as of the Phase II Commencement Date. With regard to the Phase
II Premises, Landlord shall construct Landlord Improvements under the same
provisions as Paragraph 4.3 above and shall provide them to Tenant on the same
terms and conditions as Paragraph 4.6 below for the portion ("PHASE II
DESIGNATED PREMISES") of the Phase II Premises selected by Tenant (provided,
however, that references in Paragraphs 4.3, 4.6 and EXHIBIT "C" to the
"Effective Date" for a Phase II Designated Premises shall mean the date Tenant
notifies Landlord of its intent to designate Phase II Designated Premises, and
"Plans" shall mean the plans for the Landlord Improvements to the applicable
Phase II Designated Premises). In order to designate a portion of the Phase II
Premises as Phase II Designated Premises, Tenant shall give to Landlord written
notice of such designation along with Plans and the Building Permit for the
Phase II Designated Premises. The Plans for the Phase II Designated Premises
shall be prepared in accordance with EXHIBIT "C." Upon Landlord's delivery of
the Phase II Designated Premises with the Landlord Improvements complete
pursuant to the Plans and the terms and conditions of Paragraph 4.6 hereof, the
per foot Monthly Rent for the Phase II Designated Premises shall be increased to
the same per foot Monthly Rent as the Phase I Premises; provided, however that
in the event that the particular Phase II Designated Premises is not completed
by the applicable Scheduled Phase II Designated Premises Commencement Date as
defined below (except as a result of (i) Tenant delay, (ii) force majeure, or
(iii) the inclusion of specialized improvements in the applicable Plans that are
not consistent with EXHIBIT "C" hereof), the increase in Monthly Rent for such
Phase II Designated Premises shall be delayed after completion of the applicable
Phase II Designated Premises one day for each day of delay beyond the Phase II
Designated Premises Commencement Date. Tenant may designate a Phase II
Designated Premises on any two (2) separate occasions. Tenant shall not have the
right to designate more than 25% of the Phase II Premises as Phase II Designated
Premises after April 30, 2004. Further, if any portion of the Phase II Premises
has not been designated as Phase II Designated Premises by April 30, 2005,
Tenant shall no longer be able to designate such premises as Phase II Designated
Premises. For the purposes of this Paragraph 4.4, the Scheduled Phase II
Designated Premises Commencement Date for a Phase II Designated Premises shall
be that date which is six (6) months following the receipt of a Building Permit
for the applicable Phase II Designated Premises.
4.5 LANDLORD CONTRIBUTION. Landlord will contribute up to a maximum of
$80.00 per square foot of Floor Area of the Premises to complete the Landlord
Improvements ("LANDLORD CONTRIBUTION"). Upon Tenant's written request, Landlord
will increase the Landlord Contribution by up to an additional Twenty Dollars
($20.00) per square foot of the Floor Area of the Premises ("ADDITIONAL
CONTRIBUTION") under the condition that Tenant shall increase the Deposit by a
sum equal to fifty percent (50%) of the Additional Contribution, which increased
deposit may be reduced by ten percent (10%) per annum provided Tenant is not in
default hereunder. In the event Landlord funds the Additional Contribution, the
per square foot of Floor Area Monthly Rent shall increase as of the Commencement
Date by the product of the
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Additional Contribution and .013775 divided by the Floor Area of the Premises.
For instance, if the Additional Contribution for the Phase I Premises is
$120,250, the per square foot of Floor Area Monthly Rent for the Phase I
Premises would be $2.59 ($2.45 + [$120,250 DIVIDED BY .013755 DIVIDED BY
12,025]). All calculations of Monthly Rent shall be reasonably determined by
Landlord and subject to Tenant's reasonable approval; provided, however,
Tenant's approval shall be deemed granted if Tenant does not provide the basis
for its objection in writing to Landlord within twenty (20) business days after
receipt of Landlord's calculation. Prior to commencement of the Landlord
Improvements, Landlord may require Tenant to deposit with Landlord an additional
sum equal to the difference of the estimated cost to complete the Landlord
Improvements and the Landlord Contribution ("TENANT IMPROVEMENT DEPOSIT"). The
Landlord Contribution shall be allocated to the Phase I Premises and Phase II
Premises based upon their respective Floor Areas. There shall be no Landlord
Contribution or Additional Contribution for any portion of the Phase II Premises
that is not designated as Phase II Designated Premises. The Landlord
Contribution for the Phase II Premises shall be allocated among each respective
Phase II Designated Premises based upon their respective Floor Areas. All
additional costs of the Landlord Improvements in excess of the Landlord's
Contribution and Additional Contribution shall be paid by Tenant, except to the
extent such additional costs are caused by the grossly negligent acts or
omissions of Landlord. The cost of the Landlord Improvements shall include
without limitation the following: (i) all architectural and engineering fees,
(ii) all plan check, permit, and license fees, (iii) all costs of construction
of the improvements, including testing and inspection costs, hoisting and trash
removal costs, and reasonable contractors' fees and general conditions, (iv) the
costs of changes in the structural components of the Premises when such costs
are required by the Plans, (v) costs of changes in the Plans required by
Applicable Law, (vi) costs incurred to install separate meters for the provision
of utilities, (vii) the reasonable costs of Landlord's construction manager and
other consultants, and (viii) Landlord's administrative fee equal to two percent
(2%) of all such costs. Landlord shall pay, Tenant shall have no responsibility
for, and neither the Landlord's Contribution nor the Additional Contribution
shall be used for, the following costs associated with the Landlord
Improvements: (i) costs attributable to improvements installed outside the
demising walls of the Premises (except for improvements related to Tenant's
occupancy, such as mechanical enclosures, trenching, piping, etc.); (ii) costs
for improvements which are not shown on or described in the Plans unless
otherwise approved by Tenant; (iii) costs incurred to remove Hazardous Materials
from the Premises or the Project; (iv) costs in connection with disputes
(including attorneys and expert witness fees) with third parties (including,
without limitation, the general contractor); (v) costs incurred as a consequence
of delay (unless the delay is caused by Tenant); (vi) costs recoverable by
Landlord on account of warranties or insurance; (vii) penalties and late charges
attributable to Landlord's failure to pay construction costs (provided Tenant
makes timely progress payments as required under this Lease); (viii) costs to
install exterior improvements and bring them into compliance with the Americans
with Disabilities Act ; (ix) wages, labor and overhead for overtime and premium
time unless agreed to by Tenant and Landlord; (x) off-site management of
Landlord or other general overhead costs incurred by Landlord except as provided
herein; and (xi) interest and other costs of financing construction. Landlord
and Tenant agree that the cost of that portion of the Central Plant (as
described in EXHIBIT "C-1") that is fairly allocated to the Phase I Premises
shall be deducted from the Landlord Contribution and that any costs fairly
allocable to the Phase II Designated Premises shall be deducted from the
applicable Landlord Contribution for such Phase II Designated Premises. Landlord
and Tenant shall reasonably agree to the amount of the Landlord Contribution
allocable to the Central Plant, with all additional costs to be paid by
Landlord. If Landlord and Tenant do not agree on the cost of the Central Plant
allocated to Tenant, then Landlord shall install package units to the Premises
as part of the Landlord Improvements. Landlord shall pay at its own expense the
cost of removing the existing asbestos
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from the Premises. Tenant agrees that for tax reporting purposes, Landlord may
allocate the Landlord Contribution in any lawful manner with regard to the
Landlord Improvements.
4.6 CONDITION OF PREMISES. The Plans shall create no responsibility or
liability on the part of Landlord for the completeness of such plans, or their
design sufficiency, or compliance with Applicable Law. Landlord shall have no
obligation to Tenant for defects in design, or materials of the Landlord
Improvements. The Landlord Improvements shall be deemed substantially completed
on the date on which Landlord delivers to Tenant (i) an occupancy permit
(permanent or temporary) from the governmental agency responsible for issuing
the same, and (ii) a certification from Landlord's architect or construction
manager stating that the Premises are substantially complete and ready for
occupancy, subject only to any remaining work on a "punchlist" thereafter to be
completed by the Landlord's contractor which will not substantially adversely
affect Tenant's ability to occupy and use the Premises (except for any specialty
areas, e.g. the vivarium). Landlord warrants and represents that, as of the
Commencement Date, (i) the Landlord Improvements for the Phase I Premises shall
have been constructed in accordance with the provisions of Plans in accordance
with this Lease, (ii) the Phase I Premises will be in good and clean operating
condition and repair, (iii) the electrical, mechanical, HVAC, and other building
systems serving the Phase I Premises will be in good condition and repair, and
(iv) the roof of the Building will be in good condition and water tight;
provided, however, as Tenant's sole remedy with regard to any violation of such
warranty and representation, Landlord shall promptly after receipt of the Punch
List (as defined below), diligently proceed to remedy any such punch list items.
Except as specifically provided herein, TENANT HEREBY WAIVES ALL WARRANTIES,
EXPRESS OR IMPLIED, REGARDING THE CONDITION AND USE OF THE PREMISES, INCLUDING,
BUT NOT LIMITED TO ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE. Tenant agrees, that by taking possession of the Premises, it
acknowledges that it has inspected the Premises, that they are in good
condition, and that it accepts the Premises in their then current condition
subject only to a punchlist of non-compliance with this Lease delivered from
Landlord to Tenant within sixty (60) days after the Commencement Date ("PUNCH
LIST"). Any provision of this Lease to the contrary notwithstanding, Landlord
shall not be responsible for any defects as a result of the design and/or
engineering of the Plans. Landlord shall assign to Tenant any applicable
warranties from Landlord's contractors with regard to the Landlord Improvements.
4.7 TENANT DELAYS. Tenant agrees that, except as specifically provided
herein, any request for approval by Tenant in connection with the construction
of the Landlord Improvements which is not responded to with seven (7) business
days after request shall be deemed granted. In the event that any action of
Tenant, its agents, employees, invitees, or contractors unreasonably causes any
delay in providing to Landlord the Plans as required under EXHIBIT "C" or in
completion of the Landlord Improvements, Tenant shall be obligated to pay to
Landlord the amount of Monthly Rent and additional rent which would be payable
hereunder without such delay for the number of days caused by such actions.
4.8 TENANT'S CERTIFICATE. Following the Commencement Date, Tenant
shall execute, acknowledge and deliver to Landlord a tenant's certificate in the
form of EXHIBIT "E" ("TENANT'S CERTIFICATE"), within thirty (30) days of
Tenant's receipt of the Tenant's Certificate from Landlord setting forth among
other things the Commencement Date and the termination
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date of this Lease. Notwithstanding the foregoing, Tenant's failure to execute
the Tenant's Certificate shall not affect Landlord's determination of the
Commencement Date in accordance with the provisions of this Lease. Failure of
the Tenant to execute and deliver the Tenant's Certificate in the form prepared
by Landlord, with such corrections or additions as may be required, shall
constitute an acceptance of the Premises and acknowledgement by Tenant that the
statements included in the Tenant's Certificate are true and correct without
exception.
4.9 FLOOR AREA. The term "FLOOR AREA" as used throughout this Lease
shall mean and include the square footage of the Premises (or, where applicable,
of all premises located in a building or buildings of the Project), measured to
the drip line of exterior walls and to the center of party walls, including
columns. Once Landlord has completed Landlord's Work, Landlord may measure the
Floor Area of the Premises. Upon Landlord's reasonable determination of the
exact Floor Area within the Premises, Landlord shall deliver written notice of
such Floor Area to Tenant, and, in the event the Floor Area is different from
that stated in PARAGRAPH 1 of this Lease, Tenant shall within ten (10) days
after request of Landlord, execute an amendment memorializing the new Floor
Area, Monthly Rent, and any other calculations based on the Floor Area which
must be recalculated.
4.10 FIRST RIGHT OF REFUSAL. Tenant shall have the right of first
refusal to lease Suites C and D of the Project ("SUITES C AND D"), as shown on
EXHIBIT "A", under the same economic provisions and conditions that Landlord is
willing to accept from a bona fide third party ("OFFER"). In order to exercise
such right, Tenant shall accept the provisions of the Offer within ten (10) days
after Landlord provides the Offer to Tenant with a statement that the Offer has
been received by Landlord and is acceptable to Landlord ("OFFER PERIOD"). A
fully executed letter of intent shall constitute an Offer, whether such letter
of intent is of a binding or non-binding nature. Except as otherwise set forth
in this Paragraph, Tenant's failure to irrevocably exercise in writing such
right within such ten (10) day period shall conclusively be deemed Tenant's
failure to exercise such right. In the event Tenant properly exercises its
right, Landlord and Tenant shall enter into an amendment to this Lease for
Suites C and D under the provisions of the Offer. Such right of first refusal
will be conditioned upon (i) Landlord's review and approval of Tenant's
financial condition; (ii) Tenant's not being not in default under this Lease
beyond any applicable cure period, and (iii) the intended use being consistent
with the use described in Paragraph 1.11(i) above. Notwithstanding anything to
the contrary contained herein, in the event that the Tenant does not exercise
its right to accept the Offer during the Offer Period, and in the event that the
Landlord either: (i) does not close on the Offer with the bona fide third party
within five (5) months after the Offer Period; and/or (ii) Landlord materially
alters the provisions of the Offer (such as a lowering of the rent in the offer,
or making a material change in the term, size of premises or other financial
provisions), then Tenant's right of first refusal shall revive, and any material
alterations in the Offer as provided in subsection (ii) of this paragraph shall
constitute a new Offer which shall be made to Tenant as provided herein. In the
event Tenant exercises its option for Suites C and D, Tenant shall submit
updated financials, an estoppel certificate as required herein, an SNDA (as
defined below) as required herein, and other reasonable documents required by
Landlord's lender. Such first right shall not apply to any renewals by existing
tenants in the Building.
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4.11 REIMBURSEMENT. Tenant may utilize up to $200,000 of the Landlord
Contribution of the Phase II Premises at any time prior to July 31, 2004 for
improvements to the Premises made by Tenant. All such improvements must be
constructed strictly in compliance with PARAGRAPH 11 below. Landlord shall
reimburse Tenant for Tenant's out of pocket expenses for such improvements
("REIMBURSED ALLOWANCE") upon Tenant's presentation to Landlord of reasonable
documentation showing the Tenant has expended such moneys and the improvements
were constructed in compliance with the provisions of this Lease, including
mechanic lien waivers and other reasonable documentation which Landlord may
request. The Reimbursed Allowance shall be deducted from the Landlord
Contribution which would otherwise be required to be expended under PARAGRAPH
4.5 above. In no event shall the total Reimbursed Allowance and the amount
expended by Landlord pursuant to PARAGRAPHS 4.5 above exceed the total amount of
the Landlord Contribution, and Tenant shall promptly pay to Landlord any such
overpayment. In the event that either Tenant utilizes any portion of the
Landlord Contribution pursuant to this Paragraph 4.11 or a Central Plant is
selected by Landlord as provided herein, Monthly Rent on the number of square
feet of Floor Area of the Phase II Premises which has not been designated as
Phase II Designated Premises shall be increased to the same Monthly Rent as the
Phase I Premises pursuant to the following formula: the sum of the Reimbursed
Allowance and the cost of the Central Plant allocated to the Phase II Premises
(as agreed by Landlord and Tenant pursuant Paragraph 4.5 hereof) divided by
$1,057,200 multiplied by the square feet of Floor Area of Phase II Premises. For
instance, if no portion of the Phase II Premises has been designated Phase II
Designated Premises, but the Reimbursed Allowance is $150,000 and the portion of
the Central Plant allocated to the Phase II Premises is $100,000, then the
Monthly Rent for 3,125 square feet of the Phase II Premises shall be the same
Monthly Rent as the Phase I Premises ([$150,000 + $100,000] DIVIDED BY
$1,057,200 X 13,215) and the Monthly Rent for the remainder of the Phase II
Premises shall be as specified in the second sentence of Paragraph 1.4 above.
5. RENT.
5.1 PAYMENT OF MONTHLY RENT. During the Term, Tenant shall pay to
Landlord the Monthly Rent, in advance, without offset, deduction, prior notice,
or demand, and subject to adjustment Pursuant to PARAGRAPH 5.2, on or before the
first day of each month during the Term. Monthly Rent for any period during the
Term which is for less than one month shall be prorated based upon the number of
days in the particular month. Notwithstanding the foregoing, Tenant shall pay to
Landlord the Monthly Rent due and payable for the first full calendar month of
the Term upon execution of this Lease. If the Rent Commencement Date is not on
the first day of a calendar month, then Tenant shall be credited with such
excess payment which shall be applied to the Monthly Rent for the second month
of the Term. All Monthly Rent payable hereunder shall be paid to Landlord,
without deduction or offset, in lawful money of the United States of America
which shall be legal tender at the time of payment at Landlord's address for
notice or to such other person or at such other place as Landlord may from time
to time designate in writing.
5.2 ADJUSTMENT OF MONTHLY RENT. Commencing the first day of the month
twelve (12) months after the Commencement Date, and thereafter each twelve (12)
months of the Term, including the Extended Term, the Monthly Rent shall be
increased by three and one-half percent (3.5%) above the Monthly Rent payable
immediately prior to such adjustment.
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5.3 ADDITIONAL RENT. In addition to the Monthly Rent, Tenant shall pay
Tenant's Percentage of the Common Area Operating Expenses, as provided in
PARAGRAPH 6 below. Notwithstanding the foregoing, or anything to the contrary
contained herein, in the event that it would be materially inequitable to charge
Tenant Tenant's Percentage of the Common Area Operating Expenses (for example,
as a result of materially different and/or more intensive uses of the Project by
Tenant or other tenants at the Project), Landlord shall allocate such portion of
the Common Area Operating Expenses on an equitable basis rather than based on
Tenant's Percentage. All amounts which Tenant is required to pay or discharge
pursuant to this Lease in addition to Monthly Rent, including, but not limited
to all sums owed by Tenant to Landlord or paid to third parties by Landlord on
behalf of Tenant, together with every fine, penalty, interest and cost which may
be added for non-payment or late payment under this Lease or pursuant to
applicable law, shall constitute "ADDITIONAL RENT." Additional Rent shall be
paid directly to Landlord at the address specified herein, or at such other
place, as Landlord may designate, in writing. If Tenant fails to pay or
discharge any Additional Rent, Landlord shall have all rights, powers and
remedies provided herein or by law as in the case of non-payment of Monthly
Rent. Monthly Rent and Additional Rent shall sometimes be collectively referred
to herein as "RENT."
6. COMMON AREA OPERATING EXPENSES
6.1 COMMON AREA OPERATING EXPENSES. For purposes hereof:
6.1.1 "LEASE YEAR" means calendar year during the Term.
6.1.2 "COMMON AREA OPERATING EXPENSES" means and includes all
costs of owning, operating and maintaining of the Project and the land on which
it is located and including, without limitation, the following costs:
6.1.2.1 Property tax costs consisting of real, possessory
interest and personal property taxes, and general and special assessments
imposed by any governmental authority or agency, any non-progressive tax on or
measured by gross rentals, or any other costs levied, assessed or imposed by, or
at the direction of, or resulting from statutes or regulations, or
interpretations thereof, promulgated by any federal, state, regional, municipal
or local government authority in connection with the use of occupancy or the
Project, and any expenses, including cost of attorneys or experts, reasonably
incurred by Landlord in seeking reduction by the taxing authority of the above
referenced taxes, less tax refunds obtained as a result of an application for
review thereof;
6.1.2.2 Operating costs consisting of costs incurred by
Landlord in maintaining and operating the Project and the parking facilities
including (without limiting the generality of the foregoing) the following: cost
of maintaining and operating the common areas and the parking facilities of the
Project available for Tenant's use pursuant to the terms of this Lease,
including, without limitation, lobbies, restrooms, elevators, stairways,
passageways, hallways, walkways, gardens, waterfalls, waterways, roof, sidewalks
and grounds; the cost of supplying all utilities to the common areas, the cost
of operating, maintaining, repairing, renovating, complying with conservation
measures in connection with, the managing such utility systems, mechanical
systems, sanitary and storm drainage systems, and any escalator and(or)
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elevator systems, and the cost of supplies, equipment and maintenance and
service contracts in connection therewith; casualty and liability and such other
insurance as Landlord may deem appropriate (including such endorsements as
Landlord may elect to obtain); the cost of licenses, certificates, permits and
inspections and the cost of contesting the validity or applicability of any
governmental enactments which may affect Common Area Operating Expenses, and the
costs incurred in connection with the implementation and operation of a
transportation system management program or similar program; the cost of parking
area repair, restoration, and maintenance, including, but not limited to,
resurfacing, repainting, re-striping, and cleaning; fees, charges and other
costs, including consulting fees, legal fees and accounting fees, of all
contractors engaged by Landlord or otherwise reasonably incurred by Landlord in
connection with the management, operation, maintenance and repair of the
Premises and Project; payments under any easement, license, operating agreement,
reciprocal easement agreement, declaration, covenant, underlying or ground lease
(excluding rent); the cost of alarm and security service, exterior window
cleaning, trash removal, replacement of wall and floor coverings, ceiling tiles
and fixtures in lobbies, corridors, restrooms and other common or public areas
or facilities, maintenance and replacement of curbs and walkways, and repairs to
roofs; and cost of reasonable and customary property management services (which
may be performed by an affiliate of Landlord) not to exceed three percent (3%)
of Monthly Rent, and the cost of compensation (including employment taxes and
fringe benefits) of all persons who perform duties connected with the
management, operation, maintenance and repair of the Project and the parking
facilities including, without limitation, engineers, janitors, foremen, floor
waxes, window washers, watchmen and gardeners;
6.1.2.3 Amortization of such items or improvements of the
Project as Landlord may have installed for the purpose of (i) reducing costs,
(ii) compliance with governmental rules or regulations promulgated after
completion of the Project, or (iii) efficient operation of the Project;
provided, however, Tenant shall not be required to pay, as a Common Area
Operating Expense, for both the replacement of any item and for the amortization
of such item. Capital improvements (i.e. improvements that can be amortized
pursuant to GAAP) shall be amortized over their estimated useful life with
interest at the rate specified in Paragraph 30.14 below. The estimated useful
life shall take into account the application (such as single pass air, 24 hour
operation, environmental condition, and other factors which may reduce the life
of the capital improvement). Tenant shall have the right to reasonably approve
any capital expense of the Common Area for a single item totaling greater than
$25,000. Except in the event of an emergency, Tenant may require such capital
expense to be competitively bid. Notwithstanding anything to the contrary
contained in this Lease, Tenant's Percentage of roof repairs shall not exceed
$10,000 per annum; and
6.1.2.4 Notwithstanding anything to the contrary in this
Lease, Common Area Operating Expenses shall not include and Tenant shall not be
required to pay any portion of (A) any tax or assessment expense or any increase
therein (i) levied on Landlord's rental income, unless such tax or assessment is
imposed in lieu of real property taxes; (ii) in excess of the amount which would
be payable if such tax or assessment expense were paid in installments over the
longest permitted term; (iii) imposed on land and improvements other than the
Project; or (iv) attributable to Landlord's net income, inheritance, gift,
transfer, or estate taxes or resulting from improvements of any of the Project
for the sole use of other occupants;
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or (B) the following repairs, maintenance, improvements, replacements, premiums,
claims, losses, fees, charges, costs and expenses (collectively, "COSTS"): (i)
Costs occasioned by the violation of any law by Landlord, any other occupant of
the Project, or their respective agents, employees or contractors, by the gross
negligence of Landlord or its agents, employees or contractors, or by any act by
another Tenant of the Project or its agents, employees or contractors; (ii)
Costs occasioned by the exercise of the power of eminent domain; (iii) Costs of
any renovation, improvement, painting or redecorating of any portion of the
Project not made available for Tenant's use; (iv) Costs incurred in connection
with negotiations or disputes with any other occupant of the Project and Costs
arising from the violation by Landlord or any other occupant of the Project of
the terms and conditions of any lease or other agreement; (v) insurance Costs
for coverage not required under this Lease and not customarily paid by tenants
of similar projects in the vicinity of the Premises, increases in insurance
Costs caused solely by the activities of another occupant of the Project, or
insurance deductibles of more than $10,000 (subject to reasonable increases over
the Term); (vi) Costs incurred in connection with the presence of any Hazardous
Material, except as provided herein; (vii) interest, charges and fees incurred
on debt; (viii) Costs of structural repairs to the Building, except as the
result of the Landlord Improvements, any Alterations performed by Tenant (as
provided below), or Tenant's occupancy; and (x) wages, compensation, and labor
burden for any employee not stationed on the Project or any fee, profit or
compensation retained by Landlord or its affiliates for management and
administration of the Project in excess of three percent (3%) of Monthly Rent.
6.2 PAYMENT OF COMMON AREA OPERATING EXPENSES. As soon as reasonably
practical following Commencement Date, and thereafter as soon as reasonably
practical each calendar year, Landlord shall furnish Tenant a statement showing,
in reasonable detail, an estimate of the Common Area Operating Expenses for the
current year ("LANDLORD'S ESTIMATE"). Commencing as of the Commencement Date,
Tenant shall pay an amount equal to one-twelfth (1/12) of Tenant's Percentage of
Landlord's Estimate for the current year. Landlord shall, as soon as reasonably
possible after each calendar year and in no event later than one hundred twenty
(120) days after the commencement of each calendar year, deliver to Tenant a
statement showing in reasonable detail, the actual Common Area Operating
Expenses for the previous year, along with a calculation of Tenant's Percentage
of the amount, if any, by which the actual Common Area Operating Expenses exceed
the Landlord's Estimate. If Tenant's obligation for Common Area Operating
Expenses for the prior year exceeds the amount of estimated payments made by
Tenant during such prior year, Tenant shall pay Landlord the amount of such
excess within thirty (30) days after Landlord submits a statement of the amount
due. If Tenant's obligation for Common Area Operating Expenses for any year is
less than the amount paid by Tenant therefore during such year, the amount of
such overpayment at the election of Tenant shall be credited against monthly
installments of Common Area Operating Expenses and/or Monthly Rent next coming
due or refunded to Tenant. If any such overpayment remains unreimbursed at the
termination of Lease, Landlord shall apply such amount to any amounts which may
be owing by Tenant to Landlord, and the remainder shall be promptly refunded to
Tenant. If this Lease commences or terminates on any day other than January 1st,
any additional payment or credit for any initial or final partial year shall be
determined by prorating such amount according to a three hundred sixty (360) day
year.
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6.3 ADDITIONAL COSTS CAUSED BY TENANT. Subject to the waiver of
subrogation described in PARAGRAPH 16 below, if Tenant or its employees, agents,
guests, or invitees cause Landlord to incur costs of any kind in excess of
standard routine maintenance and upkeep of the Common Areas or the parking
facilities, Landlord may require Tenant to pay such costs directly to Landlord.
If Landlord receives an insurance recovery with respect to any such cost then
Tenant shall pay to Landlord the amount of any deductible, along with the
amount, if any, by which the actual cost exceeds the insurance proceeds
immediately upon written demand by Landlord. Certain types of Tenant
improvements will increase the cost of maintenance and upkeep of the Premises to
be incurred by Landlord (e.g., equipment requiring periodic maintenance not
generally supplied by Landlord to its Tenants, equipment with unusual security
needs, etc.). Further, in the event that square foot value the improvements
installed to the Premises are of a value in excess of the general value of the
Project, Landlord may reasonably allocate any property taxes to Tenant
associated with such excess value. Tenant shall reimburse Landlord for any such
increased costs, at such time or times as may be requested by Landlord. In
addition, Landlord may at any time, at its option, cease performance of any such
items of maintenance or upkeep of the Premises.
6.4 COSTS ATTRIBUTABLE TO PARTICULAR BUILDING. Any Common Area
Operating Expenses and real property taxes that are specifically attributable to
the building in which the Premises is a part ("BUILDING") or to any other
building in the Project or to the operation, repair and maintenance thereof
shall be allocated in Landlord's discretion entirely to the Building or to such
other building as the case may be. However, any Common Area Operating Expenses
and taxes that are not specifically attributable to the Building or to any other
building or to the operation, repair and maintenance thereof, shall be equitably
allocated by Landlord to all buildings in the Project.
6.5 COMMON AREAS. Tenant shall have the non-exclusive right to use in
common with other tenants in the Project, and subject to the provisions
contained herein, those portions of the Project which are provided, from time to
time, for use in common by Landlord, Tenant and any other tenants of the Project
(such areas, together with such other portions of the Project so designated by
Landlord, in its sole discretion, are collectively referred to herein as the
"COMMON AREAS"). The common areas may include a park or other facilities open to
the general public and sidewalks, walkways, parkways, driveways and landscape
areas located within and appurtenant to the Project. The manner in which the
common areas are maintained and operated, and all services in connection
therewith, shall be at the sole discretion of Landlord. The common areas are
subject to changes by Landlord. Landlord reserves the right from time to time
without notice to Tenant (i) to close temporarily any of the common areas; (ii)
to make changes to the common areas, including without limitation, changes in
the location, size, shape and number of street entrances, driveways,
passageways, stairways, direction of traffic, landscaped areas, loading and
unloading areas, and walkways; (iii) to add additional buildings and
improvements to the common areas; (iv) to reasonably designate land outside the
Project but contiguous to the Project to be part of the Project, and in
connection with the improvement of such land to add additional buildings and
common areas to the Project; (v) to delete from the Project any of the land
and/or improvements currently located therein; (vi) to use the common areas
while engaged in making additional improvements, repairs or alterations to the
Project; and (vii) to do and perform such other acts and make such changes in,
to or with respect to the Project and/or
14
common areas as Landlord may deem to be appropriate; provided, however, that
Landlord shall not exercise any rights under this paragraph, if such exercise
would substantially unreasonably interfere with Tenant's use of, operations on,
or access to the Premises or materially increase Tenant's financial obligations
under this Lease beyond that which is customary for similar properties as the
Project in the Sorrento Valley area. Landlord shall use its best efforts to
minimize any disruption to Tenant. Furthermore, the inclusion of any item under
PARAGRAPH 6.1 as a possible cost as a Common Area Operating Expense shall not
create an obligation of Landlord to conduct any such maintenance, repair, or
replacement, unless Landlord expressly has such obligation otherwise under this
Lease. As part of Landlord's improvements to the exterior of the Project,
Landlord will construct, at its sole expense, a sidewalk from the exterior of
the Building to the interior courtyard entryway, resurface the parking areas,
and improve the landscaping.
7. SECURITY DEPOSIT.
7.1 PAYMENT OF SECURITY DEPOSIT. Concurrently with the execution of
the Lease, Tenant shall deliver to Landlord the Security Deposit in cash or
other immediately available funds. This amount shall be held by Landlord for the
faithful performance of all of the provisions and conditions of this Lease to be
kept and performed by Tenant hereunder. Landlord's obligation with respect to
the Security Deposit is that of a debtor and not as a trustee. The Security
Deposit may be commingled with rental receipts or other funds of Landlord or
dissipated entirely. Interest shall accrue on the Security Deposit at the same
rate which Landlord receives from its banking institution, which Landlord shall
accrue and be paid at such intervals as Landlord may elect.
7.2 USE OF SECURITY DEPOSIT. Landlord may use or retain all or any
part of the Security Deposit for the payment of any Monthly Rent or any other
sum in default, or for the payment of any amount which Landlord may spend or
become obligated to spend by reason of Tenant's default Landlord may also apply
the Security Deposit toward costs incurred to repair damages to the Premises or
to clean the Premises upon termination of this Lease. If any portion of the
Security Deposit is so applied or used, Tenant shall, within five (5) business
days after written notice thereof, deposit an additional amount with Landlord
sufficient to restore the Security Deposit to the amount set forth above, and
Tenant's failure to do so shall constitute a default of this Lease. Tenant
hereby waives the provisions of Section 1950.7 of the California Civil Code and
all other provisions of law, now or hereafter in effect, which provide that
Landlord may claim from a security deposit only those sums reasonably necessary
to remedy defaults in the payment of rent, to repair damage caused by Tenant or
to clean the Premises, it being agreed that Landlord may, in addition, claim
those sums specified herein and/or those sums reasonably necessary to compensate
Landlord for any other loss or damage, foreseeable or unforeseeable, caused by
the acts or omissions of Tenant or any officer, employee, agent, contractor or
invitee of Tenant. Landlord shall return any unused portion of the Security
Deposit to Tenant, or so much of the Security Deposit as is remaining, no later
than sixty (60) days following the expiration or earlier termination of the
Lease.
7.3 FORM OF LETTER OF CREDIT. At the election of Landlord's lender,
in lieu of delivering to Landlord the portion of the Security Deposit equal to
one-half (1/2) of the
15
Additional Contribution as required in PARAGRAPH 4.4 above Tenant may deliver to
Landlord an unconditional, irrevocable and renewable letter of credit in the
principal amount of one-half (1/2) of the Additional Contribution ("LETTER OF
CREDIT") in favor of Landlord in the form attached hereto as EXHIBIT "F," or
such other form as Landlord shall approve in its sole discretion, and issued by
Landlord's lender, as security for the faithful performance and observance by
Tenant of the terms, provisions and conditions of this Lease. Except as
otherwise provided herein, Tenant shall pay all expenses, points and/or fees
incurred by Tenant in obtaining the Letter of Credit. The Letter of Credit shall
state that an authorized officer or other representative of Landlord may make
demand on Landlord's behalf for the principal amount of the Letter of Credit, or
any portion thereof, and that the issuing bank must immediately honor such
demand, without qualification or satisfaction of any conditions, except the
proper identification of the party making such demand and presentation of a
written statement signed by Landlord, certifying, under penalty of perjury, that
such moneys are due and owing to Landlord as a result of Tenant's default under
this Lease. In addition, the Letter of Credit shall indicate that it is
transferable in its entirety by Landlord as beneficiary to Landlord's successor
in interest as owner of the Building and that upon receiving written notice of
transfer, and upon presentation to the issuer of the original Letter of Credit,
the issuer will reissue the Letter of Credit naming such transferee as the
beneficiary at Landlord's sole expense. If the term of the Letter of Credit held
by Landlord will expire prior to thirty (30) days after the last day of the Term
and it is not extended, or a new Letter of Credit for an extended period of time
is not substituted, within thirty (30) days prior to the expiration of the
Letter of Credit, then Landlord shall be entitled to make demand for the
principal amount of said Letter of Credit and, thereafter, to hold such funds as
the Security Deposit. The Letter of Credit shall be held by Landlord as security
for the faithful performance by Tenant of all of the terms, covenants and
conditions of this Lease and may be used or applied by Landlord to any Tenant
default in the same manner as the Security Deposit hereunder. If any portion of
the Letter of Credit proceeds are so used or applied, Tenant shall, within ten
(10) days after demand therefor, post an additional Letter of Credit in an
amount to cause the aggregate amount of the unused proceeds and such new Letter
of Credit to equal the full principal amount required in this paragraph.
Landlord shall not be required to keep any proceeds from the Letter of Credit
separate from its general funds. Should Landlord sell its interest in the
Premises during the Term and if Landlord deposits with the purchaser thereof the
Letter of Credit or any proceeds of the Letter of Credit, thereupon Landlord
shall be discharged from any further liability with respect to the Letter of
Credit and said proceeds.
8. TENANT'S PROPERTY TAXES. Tenant shall pay, before delinquency, all taxes
levied against, imposed upon, measured by, or resulting from or with respect to
(i) any personal property or trade fixtures placed by Tenant in or about the
Premises; (ii) the possession, lease, operation, management, maintenance,
alteration, improvement, repair, use or occupancy of the Premises or any portion
thereof (but not any tax (a) levied on Landlord's rental income, unless such tax
or assessment is imposed in lieu of real property taxes, or (b) attributable to
Landlord's net income, inheritance, gift, transfer, or estate taxes), (iii) this
transaction or any document to which Tenant is a party creating or transferring
any interest or estate in the Premises; and (iv) the cost and expenses of
contesting the amount or validity of any of the foregoing taxes. If any such
taxes are levied against Landlord or Landlord's property, and if Landlord pays
the same, which Landlord shall have the right but not the obligation to do
regardless of the validity of such levy, Tenant shall, immediately upon demand,
repay to Landlord the taxes so levied against Landlord.
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9. USE. Tenant shall use the Premises only for the specified use set forth
in PARAGRAPH 1.11, above, and shall not use or permit the Premises to be used
for any other purpose. Except as otherwise mutually agreed to by Landlord and
Tenant (with such agreement at Landlord's sole discretion acting in good faith),
Tenant shall not do or permit anything to be done in or about the Premises nor
bring or keep anything therein which will in any way increase the existing rate
of any fire or other insurance upon the building or any of its contents or cause
cancellation of any insurance policy covering said Project or any part thereof
or any of its contents. Tenant shall not do or permit anything to be done in or
about the Premises which will in any way obstruct or interfere with the rights
of other tenants or occupants of the Project, or injure or annoy them, or use or
allow the Premises to be used for any improper, immoral, unlawful or
objectionable purpose; nor shall Tenant cause, maintain, or permit any nuisance
in, on, or about the Premises. Tenant shall not commit any waste nor permit any
employee's, agents, representatives, sublessees or invitees of Tenant
(collectively "Tenant Parties") to commit any waste in or upon the Premises.
10. COMPLIANCE WITH LAW. Tenant shall not use the Premises or permit
anything to be done in or about the Premises which will in any way conflict with
any applicable laws, statutes, codes, ordinances, or government rules,
regulations, requirements, covenants, conditions and restrictions ("CC&RS") or
matters of record now in force or which may hereafter be enacted or promulgated
or recorded against the Project (collectively, "APPLICABLE LAW"). Tenant shall,
at its sole cost and expense, promptly comply with all Applicable Law, and with
the requirements of any board of fire insurance underwriters or other similar
bodies now or hereafter constituted relating to or affecting the condition, use,
or occupancy of the Premises. The judgment of any court of competent
jurisdiction or the admission of Tenant in any action against Tenant, whether
Landlord be a party thereto or not, that Tenant has violated any Applicable Law
shall be conclusive of that fact as between Landlord and Tenant. Notwithstanding
anything to the contrary in this Paragraph, Tenant shall not be liable to pay or
perform any improvements in the Premises which are caused or triggered by
alterations performed by Landlord or another Tenant.
11. ALTERATIONS AND ADDITIONS.
11.1 NO ALTERATIONS WITHOUT LANDLORD'S CONSENT. Tenant shall not make
any alterations, additions or improvements ("ALTERATIONS") to or on the Premises
or any part thereof without the prior written consent of Landlord, which not be
unreasonably withheld; provided, however, Landlord may withhold in its sole
discretion any consent to change any structural or exterior portions of the
Premises. Except as provided on the list attached hereto as EXHIBIT "J," any
Alterations to or on the Premises or any part thereof, including, but not
limited to, wall covering, paneling, built-in cabinet work, and fixtures, and
excepting only moveable furniture and equipment not attached to the Premises,
shall, upon the expiration of the Term, become part of the realty, become the
property of Landlord, and shall be, surrendered with the Premises whether paid
for by Landlord or Tenant. As to any items on EXHIBIT "J" which Tenant does not
intend to use in another facility, prior to removal, Tenant shall give Landlord
the right of first offer to purchase such items. Landlord shall exercise such
right within ten (10) business days after receipt of notice that any such item
is available. In the event Landlord consents to the
17
making of any Alterations to or on the Premises or any part thereof by Tenant,
the same shall be made at Tenant's sole cost and expense. Any provision of this
Lease to the contrary notwithstanding, Tenant shall have no right to remove any
of the following items: (i) any power wiring or power panels or electrical
distribution; lighting or lighting fixtures; security or fire protection
systems; communication cabling; computer or fiber optic distribution; plumbing
systems; air distribution; wall coverings; drapes, blinds or other window
coverings; carpets or other floor coverings; heaters, air conditioners or any
other heating or air conditioning equipment; or other similar building operating
equipment and decorations; or (ii) any item of the Landlord Improvements.
Notwithstanding the foregoing, or anything to the contrary contained herein,
Tenant shall have the right to remove the equipment and other property listed on
EXHIBIT "J" attached hereto at any time before the end of the Term.
Notwithstanding anything herein to the contrary, Tenant may construct, interior
non-structural Alterations in the Premises without Landlord's prior approval, if
the cost of any such project does not exceed Twenty-Five Thousand Dollars
($25,000). Tenant's trade fixtures, furniture, equipment and other personal
property installed in the Premises ("TENANT'S PROPERTY") shall at all times be
and remain Tenant's property. Except for Alterations which cannot be removed
without structural injury to the Premises, at any time Tenant may remove
Tenant's Property from the Premises, provided that Tenant repairs all damage
caused by such removal. Landlord shall have no lien or other interest in any
item of Tenant's Property. In all events, Tenant shall provide to Landlord prior
notice of any Alteration in order that Landlord may post a notice of
non-responsibility.
11.2 REMOVAL AT TERMINATION. Upon the expiration or sooner termination
of the Term and upon written demand by Landlord, Tenant shall, forthwith and
with all due diligence, at Tenants sole cost and expense, remove any Alterations
made by Tenant and requested by Landlord to be removed and repair any damage to
the Premises caused by such removal. Notwithstanding the foregoing, Landlord
shall have no right to require Tenant to remove any Alterations unless it
notifies Tenant at the time it consents to such Alterations that it shall
require such Alterations to be removed at the end of the term of this Lease.
11.3 COMPLIANCE WITH REGULATIONS. Tenant acknowledges that any
alteration or improvement to the Premises which Tenant desires to undertake from
time to time, may trigger additional requirements to improve, alter, or modify
the Premises or the Project pursuant to the Federal Americans with Disabilities
Act or other Applicable Law. Tenant shall be responsible for the cost of any and
all improvements, alterations, or modification of the Project or Premises which
may be required due to Alterations which Tenant has elected to undertake within
the Premises, including without limitation "path of travel" or other common area
upgrades which may be required by Applicable Law. Landlord may condition its
consent to any Alterations on the presentation by Tenant of reasonable evidence
of financial ability to complete all work as may be required by law. In
addition, Landlord may withhold its consent to any proposed Alterations if the
anticipated work to be required outside the Premises may cause unreasonable
inconvenience to the Project or its tenants during construction.
12. REPAIRS.
12.1 MAINTENANCE BY TENANT. Except as provided in Paragraph 12.2
below, Tenant shall, at Tenant's sole cost and expense, keep in the same
condition, maintenance and
18
repair as when received on the Commencement Date (reasonable wear and tear
excepted), the interior of the Premises and every part thereof that solely
serves the Premises, including without limitation, the doors, entrances,
vestibules, window casements and glass, showcases, skylights, glazing, plumbing
pipes, electrical, wiring and conduits. Tenant shall also at its sole cost and
expense, keep in the same condition, maintenance and repair as when received on
the Commencement Date (reasonable wear and tear excepted) package units of
heating and air conditioning system if no Central Plant is installed (or if such
package units are installed to service the Premises in addition to a Central
Plant). Damage thereto by fire, earthquake or other casualty, act of God, or the
elements shall be governed by PARAGRAPH 22 below. Tenant shall obtain service
contracts for the maintenance of the HV/AC package units and other building
systems solely servicing the Premises (but not the Central Plant which Landlord
shall maintain pursuant to Paragraph 12.2 below) on at least a quarterly basis.
If Tenant does not maintain the Premises as required hereunder promptly and
adequately, Landlord may, but need not, do so and Tenant shall upon demand pay
Landlord's cost therefor. Tenant hereby waives all right to make repairs at the
expense of Landlord as provided under any law, statute, or ordinance now or
hereafter in effect. Subject to PARAGRAPH 22, Tenant shall, upon the expiration
or sooner termination of this Lease, surrender the Premises to Landlord in the
same condition as when received, broom clean, ordinary wear and tear, and
Alterations permitted hereunder, excepted.
12.2 MAINTENANCE BY LANDLORD. Except as provided in PARAGRAPH 12.1
above, Landlord shall repair and maintain the following items (a) the structural
elements of the Project, including load bearing walls, foundation and roof ,
excluding membrane (provided, however, if the need for such repair or
maintenance is caused by Tenant or Tenant's Alterations, Tenant shall be solely
responsible for the cost thereof); (b) those repair and maintenance items
necessitated by the grossly negligent acts or omissions of Landlord or any other
occupant of the Building, or their respective agents, employees or contractors,
(c) those repair and maintenance items for which Landlord has a right of
reimbursement from others, (d) the Central Plant, electrical, water, sewer, and
plumbing systems serving the Building and Project (to the extent not solely
located within and solely serving the Premises) but excluding the package units
as set forth in Paragraph 12.1 above, and (e) repair and maintenance to any
portion of the Building and Project outside of the demising walls of the
Premises. There shall be no abatement of Monthly Rent and no liability of
Landlord by reason of any injury to or interference with Tenant's business
arising from the making of any repairs, alterations, or improvements in or to
any portion of the Project or the Premises or in or to fixtures, appurtenances,
and equipment therein except to the extent resulting from the gross negligence
or willful misconduct of Landlord or its agents. Landlord shall use commercially
reasonable efforts to minimize interference with the use, occupancy or operation
of the Premises in the making of any repairs, alterations, or improvements in or
to any portion of the Project or the Premises or in or to fixtures,
appurtenances, and equipment therein. Tenant waives the right to make repairs at
Landlord's expense under any law, statute, or ordinance now or hereafter in
effect. All costs incurred by Landlord under items (d) and (e) of this PARAGRAPH
12.2 shall be a Common Area Operating Expense, except as described in PARAGRAPH
6.1.2.4 above and all costs incurred under items (a) through (b) of this
PARAGRAPH 12.2 shall be the sole cost and expense of Landlord.
13. LIENS. Tenant shall keep the Premises and the property in which the
Premises are situated free from any liens arising out of any work performed,
materials furnished, or
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obligations incurred by Tenant. Landlord may require, at Landlord's sole option,
that Tenant provide to Landlord, at Tenant's sole cost and expense, a lien and
completion bond in an amount equal to one and one-half times the estimated cost
of any Alterations to be made to the Premises (but not with regard to the
Landlord Improvements) for Alterations which cost in excess of One Hundred
Thousand Dollars ($100,000), to insure Landlord against any liability for
mechanics' and materialmen's liens, and to insure completion of the work.
14. ASSIGNMENT AND SUBLETTING.
14.1 RESTRICTION ON ASSIGNMENT AND SUBLETTING. Tenant shall neither
voluntarily nor by operation of law assign, sell, encumber, pledge, or otherwise
transfer all or any part of Tenant's leasehold estate hereunder, or permit any
other person (excepting Tenant's agents and employees) to occupy the Premises or
any portion thereof, without Landlord's prior written consent which consent
shall not be unreasonably withheld. Landlord's consent shall be based upon (i) a
determination that the same type, class, nature, and quality of business,
services, management and financial soundness of ownership shall exist after such
assignment or subletting, and (ii) that each and every covenant, condition, and
obligation imposed upon Tenant by this Lease and each and every right, remedy
and benefit afforded Landlord by this Lease and the underlying purpose of this
Lease is not thereby materially impaired or diminished. The reasonable
determination by Landlord as to whether consent will be granted in any specific
instance may be based on, without limitation, the following factors: (i) whether
the transferee's use of the Premises will be compatible with the provisions of
the Lease and the operation of the Project as a whole; (ii) the extent to which
the transferee will compete with other existing tenants of the Project; (iii)
the financial capacity of the transferee (taking into account Tenant's
continuing financial capacity to pay all of its obligations under this Lease);
(iv) the business reputation of the transferee; (v) the transferee's intended
use of the common areas and facilities; (vi) the quality of the business
operations of the transferee; (vii) the business experience of the proposed
transferee; and (viii) whether the transferees business is likely to increase
the risk of waste disposal or other environmental problems; and (ix) whether the
intended transferee is currently a tenant in the Project or is currently
negotiating with Landlord for the occupancy of other space within the Project.
This list of factors is not intended to be exclusive, and Landlord may rely on
such other reasonable bases for judgment as may apply from time to time.
Landlord shall not at any time be required to consent to any assignment,
subletting, or other transfer to any party who is or was immediately prior to
the transfer a tenant in the Project. Consent by Landlord to one or more
assignments of this Lease or to one or more sublettings of the Premises shall
not constitute a waiver of Landlord's right to require consent to any future
assignment, subletting, or other transfer. Tenant shall reimburse Landlord for
Landlord's reasonable costs and attorney's fee incurred in conjunction with the
processing and documentation of any required consent to assignment, subletting,
transfer, change of ownership, or hypothecation of this Lease or Tenant's
interest in and to the Premises not to exceed Two Thousand Five Hundred Dollars
($2,500), as adjusted by increases in the Consumer Price Index over the Term.
14.2 LANDLORD'S APPROVAL. If Tenant desires at any time to assign this
Lease or to sublet the Premises or any portion thereof, it shall first notify
Landlord of its desire to do so and shall submit in writing to Landlord (i) the
name and legal composition of the proposed subtenant or assignee; (ii) the
nature of the proposed subtenant's or assignee's business to be
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carried out in the Premises; (iii) the terms and provisions of the proposed
sublease or assignment and all transfer documents relating to the proposed
transfer; and (iv) such reasonable business and financial information as
Landlord may request concerning the proposed subtenant or assignee. Any request
for Landlord's approval of a sublease or assignment shall be accompanied with a
check in such reasonable amount as Landlord shall advise for the cost of review
and preparation, including reasonable attorney's fees, of any documents relating
to such proposed transfer not to exceed Two Thousand Five Hundred Dollars
($2,500), as adjusted by increases in the Consumer Price Index over the Term.
The provision and conditions of any proposed sublease or assignment must not be
inconsistent with any provision of this Lease, and must address all matters
contained in this Lease. In addition, the transferee must expressly assume all
of the obligations of Tenant under this Lease. Notwithstanding the assumption of
the obligations of this Lease by the transferee, no subletting or assignment,
even with the advance written consent of Landlord, unless Landlord and Tenant
otherwise agree in writing, shall relieve Tenant of its continuing obligation to
pay the Monthly Rent and perform all the other obligations to be performed by
Tenant hereunder. The obligations and liability of Tenant hereunder shall
continue notwithstanding the fact that Landlord may accept Monthly Rent and
other performance from the transferee. The acceptance of Monthly Rent by
Landlord from any other person shall not be deemed to be a waiver by Landlord of
any provision of this Lease or to be a consent to any assignment or subletting.
14.3 ELECTION OF LANDLORD. At any time within twenty (20) days after
Landlord's receipt of the information specified in PARAGRAPH 14.2 above,
Landlord may by written notice to Tenant elect to either (i) consent to the
sublease or assignment of the Premises or the portion thereof as shall be
specified in said notice; or (ii) withhold its consent to said sublet or
assignment. Tenant may thereafter within ninety (90) days after receipt of
Landlord's written consent enter into a valid assignment or sublease of the
Premises or portion thereof, to the party and upon the terms and conditions
described in the information required to be furnished by Tenant to Landlord
pursuant to PARAGRAPH 14.2 above. If Landlord takes no action within the twenty
(20) day period, consent to the proposed assignment or sublease shall be deemed
given.
14.4 RESTRICTIONS ON TENANT. In no event shall Tenant display on or
about the Premises or the Project any signs for the purpose of advertising the
Premises for assignment, subletting or transfer rights. Fifty percent (50%) of
any rent or other consideration (excluding payments for Tenant's assets which
are not otherwise Landlord's property hereunder, services provided by Tenant, or
other consideration not related to the Premises) paid by the assignee or
subtenant that exceeds one hundred and ten percent (110%) the Rent then payable
by Tenant to Landlord hereunder shall be due, owing and payable from Tenant to
Landlord as and when received by Tenant.
14.5 UNAUTHORIZED TRANSFERS VOID. Any sale, assignment, mortgage or
transfer of this Lease or subletting which does not comply with the provisions
of this PARAGRAPH 14 shall be void and, at the option of Landlord, shall
terminate this Lease (in accordance with Paragraphs 23 and 24).
14.6 LIMITATION ON LIABILITY. If Tenant requests consent to an
assignment or sublease, and the Landlord refuses to give its consent, elects to
terminate this Lease, or takes
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other action which is later determined by a court or arbitrator or mediator to
be unreasonable or unlawful, Tenant's only remedy shall be specific enforcement
of the right to assign or sublet; in no event shall Landlord be liable to any
party for monetary damages in connection with its responses to requests for
consent to assignment or subletting.
14.7 PERMITTED TRANSACTIONS. Notwithstanding anything to the contrary
contained herein, Tenant may, without Landlord's prior written consent and
without payment of any amount to Landlord, sublet the Premises or assign the
Lease to (a) a subsidiary, affiliate, division or corporation controlling,
controlled by or under common control with Tenant, (b) a successor corporation
related to Tenant by merger, consolidation, nonbankruptcy reorganization, or
government action, or (c) a purchaser of substantially all of Tenant's assets
located in the Premises (collectively, subsections (a) through (c) are referred
to as "PERMITTED TRANSACTIONS" and each such entity described therein as
"AFFILIATES"). Neither the sale or transfer of Tenant's capital stock,
including, without limitation, a transfer in connection with the merger,
consolidation or nonbankruptcy reorganization of Tenant and any sale through any
private or public offering, nor the pledge of or grant of a security interest in
any of the Tenant's capital stock shall be deemed an assignment, subletting or
other transfer of the Lease or the Premises. In no event shall any such
assignment or subletting release Tenant from any liability under this Lease.
Tenant shall provide Landlord with all documentation related to any such
subletting or assignment.
15. HOLD HARMLESS.
15.1 INDEMNIFICATION BY TENANT. Tenant shall indemnify and hold
harmless Landlord from and against any and all claims, demands, liability, loss,
or damage, whether for injury to or death of persons or damage to real or
personal property, arising out of Tenant's use or occupancy of the Premises, any
activity, work, or other thing done by Tenant or any Tenant Parties in or about
the Project, as a result of Tenant's violation of any law, order or regulation,
or a breach of Tenant's obligations or representations under the Lease. Tenant
upon notice from Landlord shall defend the same at Tenant's expense by counsel
reasonably satisfactory to Landlord. Notwithstanding anything in this Lease to
the contrary, Landlord shall not be released or indemnified from, and shall
indemnify, defend, protect and hold harmless Tenant from, all losses, damages,
liabilities, claims, attorneys' fees, costs and expenses arising from the gross
negligence or willful misconduct of Landlord or its agents, contractors, or
licensees, Landlord's violation of any law, order or regulation, or a breach of
Landlord's obligations or representations under this Lease. Except as expressly
stated otherwise in this Lease, and subject to the foregoing, Tenant, as a
material part of the consideration to Landlord, hereby assumes all risk of
damage to property or injury to persons in, upon, or about the Premises from any
cause, and Tenant hereby waives all claims in respect thereof against Landlord.
Tenant's and Landlord's obligation to indemnify under this paragraph shall
include attorney's fees, investigation costs, and other reasonable costs,
expenses, and liabilities incurred by Landlord. If the ability of Tenant to use
the Premises or the Project is interrupted for any reason, Landlord shall not be
liable to Tenant for any loss or damages occasioned by such loss of use except
as expressly stated in this Lease.
15.2 NO LIABILITY OF LANDLORD. Landlord or its agents shall not be
liable for any damage to property entrusted to employees of the Project, nor for
loss or damage to any property by theft or otherwise, nor for any injury to or
damage to persons or property resulting from fire,
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explosion, falling plaster, steam, gas, electricity, water, or rain which may
leak from any part of the Project or from the pipes, appliances, or plumbing
works therein or from the roof, street, or subsurface from any other place
resulting from dampness or any other cause whatsoever except as expressly set
forth in this Lease. Landlord, or its agents, shall not be liable for
interference with the light or other incorporeal hereditament or loss of
business by Tenant, nor shall Landlord be liable for any latent defect in the
Premises or the Project. Tenant shall give prompt notice to Landlord in case of
fire or accidents in the Premises or in the Project or of defects therein or in
the fixtures or equipment. Except to the extent resulting from the gross
negligence or willful misconduct of Landlord, Tenant assumes all responsibility
for security of the Premises, Tenant, its agents, customers, employees, and
invitees, and their property from the acts of third parties (excluding Landlord
and its employees, agents or representatives).
16. SUBROGATION. Neither Landlord nor Tenant shall be liable to the other
or to any insurance company (by way of subrogation or otherwise) insuring the
other party for any loss or damage to any building, structure or other tangible
property, or any resulting loss of income, or losses under workers compensation
laws and benefits, even though such loss or damage might have been occasioned by
the negligence of such party, its agents, or employees if any such loss or
damage is covered by insurance benefiting the part suffering such loss or
damage. Notwithstanding anything in this Lease to the contrary, Landlord and
Tenant hereby mutually release each other from liability and waive all right to
recover against each other or against officers, employees, agents, guests,
authorized assignees or subtenants, or representatives of each other for any
loss or damage to any person or property caused by or resulting from risks
insured against under any insurance policies carried by the parties, which are
required to be insured against under the Lease, or which would normally be
covered by "all risk" property insurance, without regard to the negligence or
willful misconduct of the entity so released. All of Landlord's and Tenant's
repair and indemnity obligations under the Lease shall be subject to the waiver
and release contained in this Paragraph. The parties shall cause each insurance
policy obtained by it hereunder to provide a waiver of subrogation. The
provisions of this paragraph shall apply notwithstanding any other provisions
set forth in this Lease.
17. TENANT'S INSURANCE.
17.1 PREMISES INSURANCE. Tenant shall procure and maintain in force at
all times during the Term of this Lease a policy or policies of fire and
extended coverage insurance (including vandalism, malicious mischief, and
sprinkler leakage) with respect to its fixtures, personal property, any exterior
signage affixed to the Project, and equipment located in the Premises to the
extent of at least ninety percent (90%) of their insurance value. Tenant shall
also procure and maintain plate glass coverage with respect to the Premises.
17.2 LIABILITY INSURANCE. Tenant shall procure and maintain at all
times during the Term of the Lease Workers' Compensation Insurance. Tenant shall
also procure and maintain at all times during the Term hereof Combined Single
Limit Bodily Injury and Property Damage Insurance insuring Landlord (as an
additional insured) and Tenant against any liability arising out of the use,
occupancy, or maintenance of the Premises and all areas appurtenant thereto.
Such insurance shall be in an amount not less than two million dollars
($2,000,000) per occurrence. This policy shall include broad form contractual
liability and indemnity coverage
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which shall insure performance by Tenant of the indemnity and defense provisions
in PARAGRAPH 15 above. The limits of said insurance shall not, however, be
construed to limit the liability of Tenant under this Lease.
17.3 OTHER INSURANCE. Tenant shall procure and maintain at all times
during the Term of this Lease (i) personal injury insurance including coverage
for employee liability, (ii) business interruption insurance, and (iii) during
any period of construction of Alterations by Tenant, builder's all risk
insurance which must include completed operations coverage.
17.4 INSURANCE REQUIREMENTS. The amount of the deductibles, if any, on
each policy required hereunder shall be a business decision by Tenant subject to
Landlord's reasonable approval; under no circumstances shall Landlord be
required to reimburse Tenant for the amount of any deductible incurred by Tenant
in connection with any insured event, even if the event resulting in the claim
was caused or contributed to by Landlord or its agents, servants, or employees.
All insurance which Tenant is required to maintain hereunder shall be on an
occurrence basis and shall be with financially responsible insurance companies
with a Best's rating of B:VIII or better and which companies shall be subject to
the reasonable approval of Landlord. Within five business days after the
execution of this Lease Tenant shall notify Landlord in writing of the name of
Tenant's insurer. Tenant shall deliver to Landlord prior to entry on the
Premises by Tenant certificates of insurance evidencing the existence and amount
of such insurance, and showing Landlord as a named insured; provided that in the
event Tenant fails to procure and maintain such insurance, Landlord may (but not
be required to) procure same at Tenant's expense. No such policy shall be
cancelable, or subject to reduction of coverage except after prior written
notice to Landlord by the insurer. Tenant shall, within twenty (20) days prior
to the expiration of such policies furnish Landlord with renewals or binders or
Landlord may order such insurance and charge the cost to Tenant, which amount
shall be payable by Tenant upon demand. All such policies shall be written as
primary policies, not contributing with and not in excess of coverage which
Landlord may carry. Tenant shall have the right to provide such insurance
coverage pursuant to blanket policies obtained by Tenant provided that such
blanket policies expressly afford coverage to the Premises and to Tenant as
required by this Lease. Tenant shall, upon request from Landlord, promptly
deliver to Landlord copies of all insurance policies (including the declarations
pages) in effect with respect to Tenant's business and the Premises.
17.5 LANDLORD'S INSURANCE. Landlord shall maintain "all risk" property
insurance insuring against risk of loss or damage to the Building and the
Project as Landlord shall determine in its reasonable business discretion. Such
insurance shall be for the full replacement cost of the Building to the extent
reasonably available.
18. SERVICE AND UTILITIES.
18.1 UTILITIES CONTRACTED BY TENANT. Where possible, Tenant shall
contract in its name and shall pay directly to the utility company, before
delinquency, all utility deposits and fees including any present or future
installation, hook-up, tap fees and/or service charges, together with any taxes
thereon, for water, electricity, sewage, gas, telephone, and any other utility
services supplied to the Premises. Tenant shall not install any equipment which
will
24
exceed or overload the capacity of existing utility facilities. If any equipment
installed by Tenant shall require additional utility facilities, Tenant shall
first obtain Landlord's written consent to such installation (which consent
shall not be unreasonably withheld) and such installation shall be at Tenant's
expense. Notwithstanding the foregoing, Landlord shall have the right at any
time and from time to time during the Term to require Tenant to contract for
utility services with alternative service providers selected by Landlord, at
Landlord's sole discretion, provided that such selection shall not increase
Tenant's utility costs or not otherwise adversely affecting Tenant's business in
the Premises.
18.2 MASTER METER; UTILITIES CHARGE. If Landlord agrees, in its sole
discretion, for any utility not to be separately metered, or if Landlord elects
at its sole option, to place one or more of the utilities serving the Premises
on a master meter with other portions of the Project, Tenant shall pay monthly,
in advance as additional rent, with payment of monthly installments of Monthly
Rent, an amount ("UTILITIES CHARGE") to reimburse Landlord for the utilities,
furnished by Landlord to the Premises and for the repair, maintenance and
replacement, if necessary, of the meters, pipes, conduits, equipment, components
and facilities installed and/or maintained by Landlord and used to deliver such
utilities to the Premises. Landlord shall initially estimate the amount of
Utilities Charge payable by Tenant based on a typical store layout comparable to
Tenant's proposed use of the Premises and shall thereafter adjust such estimate
from time to time, as necessary, based on Landlord's experience and reasonably
anticipated costs. The portion of Utilities Charge payable by Tenant for the
cost of the utilities (as opposed to repair, maintenance and replacement) shall
not exceed the cost which would have been incurred by Tenant, if Tenant had
contracted directly for such utility service(s).
18.3 FAILURE TO PAY. If any utility charges are not paid when due,
Landlord may pay the same and any amount so paid by Landlord shall be
immediately due and owing from Tenant to Landlord as additional rent. In the
event any utilities are furnished by Landlord to the Premises and/or to any
premises leased from Landlord or other tenants in the Project, Tenant shall pay
Landlord upon demand, as additional rent Tenant's equitable share of the cost to
Landlord of providing such utilities, as reasonably determined by Landlord;
provided that in no event shall Tenant pay for any utilities solely being
provided to other tenants of the Project. Landlord shall not be responsible in
any manner for any interruption or failure of utility supply unless caused by
Landlord's gross negligence or willful misconduct.
19. RULES AND REGULATIONS. Tenant shall faithfully observe and comply with
the rules and regulations that Landlord shall from time to time promulgate. The
current rules and regulations for the Project are defined on EXHIBIT "G"
attached hereto. Landlord reserves the right from time to time to make
reasonable modifications to said rules and regulations. The additions and
modifications to those rules and regulations shall be binding upon Tenant upon
delivery of a copy of them to Tenant. Landlord shall not be responsible to
Tenant for the nonperformance of any said rules and regulations by any other
tenants or occupants. Tenant shall not be required to comply with any new rule
or regulation unless the same applies non-discriminatorily to all occupants of
the Building, does not unreasonably interfere with Tenant's use of the Premises,
the Project, or Tenant's parking rights hereunder, or materially increase the
obligations of Tenant hereunder.
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20. HOLDING OVER. If Tenant should remain in possession of the Premises
after the expiration of the Term of this Lease without executing a new lease and
without Landlord's prior written consent, then such holding over shall be
construed as a tenancy at sufferance from month-to-month (requiring at least
thirty (30) days' advance written notice from either party to the other prior to
termination) subject to all the conditions, provisions and obligations of this
Lease insofar as they are applicable to a month-to-month tenancy; provided,
however, that the Monthly Rent shall be increased to one hundred and fifty
percent (150%) of the Monthly Rent last paid due, payable monthly in advance,
during the time of any holdover. Notwithstanding the foregoing in the event
Tenant fails to vacate the Premises and fulfill all of its obligations hereunder
at the end of the Term, Tenant shall be liable for all reasonably foreseeable
damages incurred by Landlord by reason of the latter's inability to deliver
possession of the Premises or any portion thereof to any other person.
21. ENTRY BY LANDLORD. Landlord reserves and shall at any and all times
have the right to enter the Premises, to inspect the same, to show said Premises
to prospective purchasers or (during the last six (6) months of the Term)
tenants, to post notices of non-responsibility, and to alter, improve, or repair
the Premises and any portion of the Project of which the Premises are a part
that Landlord may deem necessary or desirable without abatement of Monthly Rent
and may for that purpose erect scaffolding and other necessary structures where
reasonably required by the work to be performed, always providing that the
entrance to the Premises shall not be blocked thereby. Tenant hereby waives any
claim for damages or for any injury or inconvenience to or interference with
Tenant's business, any loss of occupancy or quiet enjoyment of the Premises and
other loss occasioned thereby except to the extent caused by Landlord's gross
negligence or willful misconduct. For each of the aforesaid purposes, Landlord
shall at all times have and retain a key with which to unlock all of the doors
in, upon, and about the Premises, excluding Tenant's vaults, safes, files and
restricted lab areas, and Landlord shall have the right to use any and all means
which Landlord may deem proper to open said doors in an emergency in order to
obtain entry to the Premises without liability to tenant except for any failure
to exercise due care for Tenant's property. Any entry to the Premises obtained
by Landlord by any of said means or otherwise, shall not under any circumstances
be construed or deemed to be a forcible or unlawful entry into, or a detainer
of, the Premises or an eviction of Tenant from the Premises or any portion
thereof. Landlord and Landlord's agents, except in the case of emergency, shall
not enter the Premises without prior consultation with Tenant. Any entry by
Landlord and Landlord's agents shall not impair Tenant's operations more than
reasonably necessary, and for the safety of Landlord and Landlord's employees,
agents and representatives, shall comply with Tenant's reasonable security
measures and health and safety precautions due to Tenant's use of biological
agents.
22. RECONSTRUCTION.
22.1 INSURED LOSS. In the event the Premises or the Project of which
the Premises are a part are damaged by fire or other perils covered by insurance
required to be maintained under this Lease, then Landlord shall forthwith repair
the same, at its cost and expense, and this Lease shall remain in full force and
effect.
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22.2 UNINSURED LOSS. In the event the Premises or the Project of which
the Premises are a part are damaged as a result of any cause other than the
perils covered by insurance required to be maintained under this Lease, then
Landlord shall forthwith repair the same, provided the extent of the destruction
is less than twenty percent (20%) of the then full replacement cost of the
Premises (or if the damage is to the Project, and the extent of the destruction
is less than twenty percent (20%) of the full replacement cost of the Project of
which the Premises are a part). In the event the destruction of the Premises or
Project is to the extent greater than or equal to twenty percent (20%) of the
full replacement cost, then Landlord shall have the option to (i) repair or
restore such damage, this Lease continuing in full force and effect, or (ii)
give notice to Tenant at any time within sixty (60) days after such damage
terminating this Lease as of the date specified in such notice. In the event of
giving such notice, this Lease shall expire and all interest of the Tenant in
the Premises shall terminate on the date so specified in such notice and the
Monthly Rent shall be paid up to date of said such termination.
22.3 DAMAGE NEAR END OF TERM. Notwithstanding anything to the contrary
contained in XXXXXXXXX 00, Xxxxxxxx shall have no obligation whatsoever to
repair, reconstruct or restore premises when the damage resulting from any
casualty covered under this PARAGRAPH 22 occurs during the last twelve (12)
months of the Original Term or the Extended Term, as the case may be; provided,
however, Tenant may nullify Landlord's termination of this Lease pursuant to
this paragraph in the last twelve (12) months of the Original Term by exercising
its option for the Extended Term within ten (10) days after receipt by Tenant of
Landlord's notice to terminate under this paragraph, in which event this Lease
shall continue in full force and effect. Tenant may terminate this Lease in the
event Landlord does not elect to repair, reconstruct or restore the Premise
during the last twelve (12) months of the Term.
22.4 LIMITATIONS ON REPAIR. Landlord shall not be required to repair
any injury or damage by fire or other cause or to make any repairs or
replacements of any panels, decoration, fixtures, railings, floor covering,
partitions or any other property installed in the Premises by Tenant. Tenant
shall not be entitled to any compensation or damages from Landlord for loss of
the use of the whole or any part of the Premises, Tenant's personal property, or
any inconvenience or annoyance occasioned by such damage, repair,
reconstruction, or restoration. For purposes of this paragraph, insurance
proceeds shall not be considered to be "available" if payable to Landlord's
lender and such lender will not release them for repairs.
22.5 TENANT'S RIGHT TO TERMINATE. If more than twenty percent (20%) of
the Premises are destroyed by a peril and Landlord does not terminate this
Lease, Tenant may terminate this Lease in the event that the estimated time for
restoration of the Premises to its prior condition exceeds two hundred seventy
(270) days after the date of the destruction. The determination of length of
time of such restoration shall be made by the reasonable judgment of Landlord.
In the event Landlord reasonably determines that the restoration will not be
completed within two hundred seventy (270) days after the date of the
destruction, Tenant may, within ten (10) business days after the date Tenant
receives notice of Landlord's decision, provide written notice to Landlord to
terminate this Lease. In the event this Lease is not so terminated, Landlord
shall endeavor to complete such restoration as soon as reasonably practical.
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23. DEFAULT. The occurrence of any one or more of the following events
shall constitute a default and breach of this Lease by Tenant.
23.1 Either the vacating of the Premises by Tenant without Tenant
continuing to provide commercially reasonable security and maintenance of the
Premises or the abandonment of the Premises by Tenant.
23.2 The failure by Tenant to make any payment of Monthly Rent or any
other payment required to be made by Tenant hereunder within five (5) days after
written notice of a deficiency by Landlord is actually delivered to Tenant.
23.3 The failure by Tenant to observe or perform any of the other
covenants, conditions, or provisions of this Lease to be observed or performed
by the Tenant where such failure shall continue for a period of thirty (30) days
after written notice thereof by Landlord to Tenant; provided, however, that if
it would reasonably take Tenant longer than thirty (30) days to cure such
failure, Tenant shall not be in default so long as Tenant promptly commences its
cure of such failure and diligently prosecutes such cure to completion, but in
no event shall such cure take longer than ninety (90) days to complete (except
in the event Tenant's failure to cure solely results from the failure of Tenant
to obtain a necessary governmental approval, in which event Tenant may have
additional time to cure as long as Tenant is diligently pursuing such
governmental approval).
23.4 The making by Tenant of any general assignment for the benefit of
creditors; the insolvency of Tenant; or the filing by or against Tenant of a
petition to have Tenant adjudged a bankrupt, or a petition or reorganization or
arrangement under any law relating to bankruptcy (unless, in the case of a
petition filed against Tenant, the same is dismissed within sixty (60) days); or
the appointment of a trustee or a receiver to take possession of substantially
all of Tenant's assets located at the Premises or of Tenant's interest in this
Lease, where possession is not restored to Tenant within thirty (30) days; or
the attachment, execution, or other judicial seizure of substantially all of
Tenant's assets located at the Premises or of Tenant's interest in this Lease,
where such seizure is not discharged in thirty (30) days.
24. DEFAULT REMEDIES. In the event of any default or breach by Tenant, in
addition to any other rights or remedies of Landlord at law or in equity,
Landlord shall have the following remedies:
24.1 RECOVERY OF RENT. Landlord has the remedy described in California
Civil Code Section 1951.4 (Landlord may continue this Lease in effect of
Tenant's breach and abandonment and recover rent as it becomes due, if Tenant
has right to sublet and assign, subject only to reasonable limitations).
Landlord may recover from Tenant the Monthly Rent and additional rent as it
becomes due and any other amount necessary to compensate Landlord for all
detriment proximately caused by Tenant's failure to perform its obligations
under this Lease or which in the ordinary course of things would likely to
result therefrom, irrespective of whether Tenant shall have abandoned the
Premises. Landlord may xxx monthly, annually, or after such equal or unequal
periods, as Landlord desires for amounts due hereunder. The right to collect
Monthly Rent as it becomes due shall terminate upon the termination by Landlord
of Tenant's
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right to possession. Tenant's right to possession shall not be terminated unless
and until Landlord delivers to Tenant written notice thereof.
24.2 RELET PREMISES. In the event Landlord elects not to terminate the
Lease, Landlord shall have the right to attempt to relet the Premises at such
Monthly Rent and upon such conditions and for such a term as Landlord see fits,
and to do all other acts necessary to maintain or preserve the Premises as
Landlord deems reasonable and necessary, without being deemed to have elected to
terminate the Lease, including removal of all persons and property from the
Premises which property may be removed and stored in a public warehouse or
elsewhere at the cost of and for the account of Tenant. In the event any
reletting of the Premises occurs, such reletting shall be done for Tenant's
account and be subject to the terms and conditions of PARAGRAPH 24.3 below;
provided, however, that Tenant shall not be liable for any increase in damages
caused by Landlord's reletting of the Premises. Notwithstanding the fact that
Landlord may fail to elect to terminate the Lease initially, Landlord at any
time during the Term of this Lease may elect to terminate this Lease by virtue
of any previous uncured default of Tenant.
24.3 TAKE POSSESSION. In the event that Landlord shall elect to
reenter upon default by Tenant as provided above or shall take possession of the
Premises pursuant to legal proceedings or pursuant to any notice by law, then,
if Landlord does not elect to terminate, this Lease as provided herein, Landlord
may from time to time, without terminating this Lease, relet the Premises or any
part thereof for such term or terms and at such rental or rentals and upon such
other terms and conditions as Landlord in its sole discretion may deem
advisable. Landlord shall also have the right to make alterations and repairs to
the Premises. In the event that Landlord shall elect to so relet, then rentals
received by Landlord from such reletting shall be applied: (i) to the payment of
any indebtedness other than Monthly Rent due hereunder from Tenant to Landlord;
(ii) to the payment of any cost of such reletting; (iii) to the payment of the
cost of any alterations and repairs to the Premises; (iv) to the payment of
Monthly Rent due and unpaid hereunder; and (v) the residue, if any, shall be
held by Landlord and applied in payment of future Monthly Rent as the same may
become due and payable hereunder. Should reletting result in the actual payment
of rentals at less than the Monthly Rent payable during that month by Tenant
hereunder, then Tenant shall pay such deficiency to Landlord from time to time
immediately upon demand therefore by Landlord. Tenant also shall pay to
Landlord, on demand, as soon as ascertained, any costs and expenses incurred by
Landlord in reletting or in making alterations and repairs to the Premises.
24.4 TERMINATE LEASE. Landlord, either as an alternative to or
subsequent to exercising the remedies set forth above, may terminate Tenant's
right to possession of the Premises by and upon delivery to Tenant of written
notice of termination. Landlord may then immediately reenter the Premises and
take possession thereof pursuant to legal proceedings and remove all persons and
property from the Premises which property may be removed and stored in a public
warehouse or elsewhere at the cost of and for the account of Tenant. In the
event that Landlord elects to terminate Tenant's right of possession Landlord
may recover all of the following:
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24.4.1 The worth at the time of award of the unpaid Monthly Rent
which had been earned at the time of termination ("WORTH AT THE TIME OF AWARD"
shall be computed at the Interest Rate (as defined below), or the maximum rate
as permitted by law, from the first day a breach occurs);
24.4.2 The worth at the time of award of the amount by which the
unpaid Monthly Rent that would have been earned after the date of termination of
this Lease until the time of the award exceeds the amount of the rental loss
that the Tenant proves could have been reasonably avoided ("WORTH AT THE TIME OF
AWARD" shall be computed at the Interest Rate, or the maximum rate permitted by
law, from the first day a breach occurs);
24.4.3 The worth at the time of award of the amount by which the
unpaid Monthly Rent for the balance of the Term after the time of award exceeds
the amount of such rental loss that the Tenant proves could be reasonably
avoided ("WORTH AT THE TIME OF AWARD" shall be computed by discounting such
amount at the discount rate of the Federal Reserve Bank of San Francisco at the
time of award plus one percent (1%));
24.4.4 Any other amount necessary to compensate Landlord for all
the, detriment proximately caused by Tenants failure to perform its obligations
under the Lease or which in the ordinary course of events would be likely to
result therefrom including, but not limited to, expenses of reletting, attorneys
fees, costs of alterations and repairs, recording fees, filing fees, and any
other expense customarily resulting from obtaining possession of leased Premises
and releasing; and
24.4.5 At Landlord's election, such other amounts in addition to
or in lieu of the foregoing as may be permitted from time to time by applicable
California law.
25. EMINENT DOMAIN.
25.1 TERMINATION OF LEASE. If all of the Premises are taken under the
power of eminent domain, or sold by Landlord under the threat of the exercise of
such power, this Lease shall terminate as to the part so taken as of the date
that the condemning authority takes possession of the Premises. If more than
twenty-five percent (25%) of the Premises is taken or sold to the condemning
party under such threat, or a smaller (but substantial) portion of the Premises
is taken and Tenant reasonably determines that such portion is material to the
operation of its business in the Premises (including, for example, the taking of
Tenant's lab space), either Landlord or Tenant may terminate this Lease as of
the date that the condemning authority takes possession by delivery of written
notice of such election within twenty (20) days after such party has been
notified of the taking or, in the absence thereof, within twenty (20) days after
the condemning authority shall have taken possession.
25.2 CONTINUATION OF THIS LEASE. If this Lease is not terminated by
Landlord or Tenant, it shall remain in full force and effect as to the portion
of the Premises remaining provided that, the Monthly Rent shall be reduced by
that proportion which the floor area of the Premises taken bears to the gross
floor area of the Premises and Tenant's Percentage shall be equitably adjusted
based on such revision to the Premises and Project. In such event, Landlord
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may, at Landlord's expense, restore the Premises (but not Tenant's improvements
therein) to a complete unit of like quality and character, except as to size, as
existed prior to the date on which the condemning authority took possession.
25.3 ALLOCATION OF AWARD. All awards for the taking of any part of the
premises or proceeds from the sale made under the threat of the exercise of the
power of eminent domain shall be the property of Landlord, whether made as
compensation for diminution of value of the leasehold estate, for the taking of
the fee or as severance damages; provided that Tenant shall be entitled to any
award which is made for loss of or damage to Tenant's trade fixtures and
removable personal property, loss of business goodwill, relocation expenses; and
the unamortized value of any improvements made at Tenant's expense.
26. SUBORDINATION & ATTORNMENT: ESTOPPEL CERTIFICATES.
26.1 SUBORDINATION. This Lease is junior, subject, and subordinate to,
all ground leases, mortgages, deeds of trust, and other security instruments of
any kind now encumbering the Premises, the portion of the Project owned by
Landlord or any part thereof and all renewals, replacements, modifications,
consolidations and extensions of any of the foregoing. Landlord reserves the
right to place liens and other encumbrances on the Premises, the portion of the
Project owned by Landlord or any part thereof or interest therein superior in
lien and effect to this Lease. This Lease, at the option of Landlord, shall be
subject and subordinate to any and all such liens or encumbrances now or
hereafter imposed by Landlord without the necessity of the execution and
delivery of any further instruments on the part of Tenant to effectuate such
subordination. Notwithstanding such subordination, Tenant's right to quiet
possession of the Premises shall not be disturbed by any encumbrances so long as
Tenant shall pay the rent and observe and perform all of the provisions of this
Lease to be observed and performed by Tenant, unless this Lease is terminated
pursuant to specific provisions relating thereto contained in this Lease. In the
event of the foreclosure of any such lien or encumbrance, or the transfer of
title to or Landlord's leasehold interest in the Premises or the portion of the
Project owned by Landlord, Tenant shall attorn to the transferee, and will
recognize such transferee as Landlord under this Lease provided that Tenant's
right to quiet possession of the Premises is not affected solely as a result of
such foreclosure or transfer and that Tenant receives a notice from Landlord
informing Tenant of such change. Tenant further agrees to execute any documents
required to effectuate an attornment or a subordination as requested by
Landlord's lender in form provided that such form has generally consistent with
that of commercial lenders and otherwise contains commercially reasonable terms,
including without limitation the Subordination, Attornment, and Non-Disturbance
substantially in the form attached as EXHIBIT "E" attached hereto ("SNDA").
Tenant's failure to execute such documents within ten (10) business days after
written demand, followed by five (5) days after a second written notice to
Tenant, at Landlord's election shall constitute a material non-curable default
by Tenant hereunder. Prior to the Commencement Date, Landlord shall use its
commercial reasonable efforts to obtain from any lenders or ground lessors of
the Project or any portion thereof, a written agreement with terms generally
consistent with that used by commercial lenders providing for recognition of
Tenant's interests under the Lease in the event of a foreclosure of the lender's
security interest or termination of the ground lease. Subject to the foregoing,
the subordination of this Lease to any new ground lease or instrument of
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security shall be conditioned upon Tenant's receipt from any such ground lessors
or lenders such a recognition agreement.
26.2 ESTOPPEL CERTIFICATE. Tenant shall at any time and from time to
time upon not less than ten (10) business days prior notice from Landlord,
execute acknowledge and deliver to Landlord or any proposed mortgagee, purchaser
or successor in interest, a statement in writing in a form provided by Landlord
and acceptable to Tenant certifying to the following: (i) this Lease is
unmodified and in full force and effect (or if there have been modifications,
that the same are in full force and effect as modified and stating the
modifications), (ii) the dates to which the Monthly Rent, additional rent and
other charges have been paid in advance, if any, (iii) whether Landlord is in
default in the performance of any covenant, agreement or condition contained in
this Lease and, if so, specifying each such default of which Tenant may have
knowledge, and stating such other reasonable matters as Landlord may request,
and (iv) such other information concerning this Lease as Landlord may request.
Tenant acknowledges that any such statement delivered pursuant to this paragraph
may be relied upon by Landlord, any prospective mortgagee, ground lessor or
other like encumbrance thereof or any assignee of any such encumbrance upon the
Premises of the Project. In the event Tenant fails to provide such statement as
above described within ten (10) business days after Landlord's request
therefore, followed by five (5) days after a second written notice to Tenant,
such failure at the election of Landlord shall constitute a material non-curable
default of Tenant hereunder.
26.3 MODIFICATIONS REQUIRED BY LANDLORD'S LENDER. If, in connection
with Landlord obtaining construction, interim or permanent financing, the lender
shall request modifications to this Lease as a condition to such financing,
Tenant shall execute such modifications hereto within ten (10) business days
following written request therefore, provided that such modifications do not
increase the financial burdens, material affect other obligations of Tenant
hereunder, or materially decrease Tenant's rights hereunder. Tenant's failure to
so execute such modifications hereto shall be a default and provide grounds for
Landlord's termination of this Lease, among all other rights and remedies of
Landlord, as set forth in Paragraphs 23 and 24.
26.4 TENANT'S FINANCIAL CONDITION. Tenant shall deliver to any lender
or proposed purchaser of the Premises designated by Landlord any financial
statements reasonably required by such lender to facilitate the sale, financing
or refinancing of the Premises. At that time, Tenant shall represent and warrant
to Landlord that each such financial statement is a true and accurate statement
as of the date of such statement. All financial statements shall be confidential
and shall be used only for the purposes set forth herein.
27. PARKING.
Tenant shall have the right to use without charge on a non-reserved
basis, in common with other tenants or occupants of the Project and such other
persons or groups as Landlord may specify, the number of parking spaces
designated in PARAGRAPH 1 above, subject to the rules and regulations of
Landlord (or any concessionaire of Landlord's) for such parking facilities which
may be established or altered by Landlord at any time or from time to time
during the Term hereof. Landlord specifically reserves the right to alter that
nature of character of the
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parking facilities from time to time. In addition to Landlord's rules and
regulations, Tenant shall abide by the terms and provisions of any recorded
easement, declaration or other agreement or instrument governing use of the
parking facilities. If Tenant or its employees fail to park their cars in
designated parking areas, then such failure shall be and Landlord may charge
Tenant, without prior notice, ten dollars ($10) per day for each day or partial
day per car parked in any areas other than those designated. All amounts due
under the provisions of this PARAGRAPH 27 shall be additional rent and be
payable by Tenant within ten (10) days after demand thereof. Tenant acknowledges
that Landlord intends to install parking security systems which will control the
access and egress to the parking. All costs of operating and maintaining the
parking areas of the Project shall be a Common Area Operating Expense. Landlord
agrees to provide Tenant with Tenant's Percentage of visitor spaces to be
designated at the Project and shall consult with Tenant with respect to the
placement of such spaces.
28. HAZARDOUS MATERIALS.
28.1 RESTRICTIONS ON TENANT. Subject to PARAGRAPH 28.4 below, Tenant
shall not do any of the following in violation of Applicable Law:
28.1.1 Make, or permit to be made, any use of the Premises, or
any portion thereof, which emits, or permits the emission of dust, sweepings,
dirt, cinders, or odors into the atmosphere, the ground, or any body of water,
whether natural or artificial.
28.1.2 Discharge, leak, or emit, or permit to be discharged,
leaked, or emitted, any liquid, solid, or gaseous matter, or any combination
thereof, into the atmosphere, the ground, or any body of water which matter, as
reasonably any governmental entity, does, or may, pollute or contaminate the
same, or is, or may become, radioactive, or does, or may, adversely affect (i)
the health or safety of persons, wherever located, whether on the Premises or
anywhere else, (ii) the condition, use, or enjoyment of the Premises or any
other real or personal property, whether on the Premises or anywhere else, or
(iii) the Premises, the Project, or any of the improvements, including
buildings, foundations, pipes, utility lines, landscaping, or parking areas.
28.1.3 Use, store, dispose of, or permit to remain on the
Premises, the Project or the underlying or adjacent property any solid, liquid,
or gaseous matter, or any combination thereof, which is, or may become,
hazardous, toxic, or radioactive including, but not limited to, those materials
that (i) are defined as a "hazardous waste," "extremely hazardous waste" or
"restricted hazardous waste" under Sections 25115, 25117 or 25122.7, or listed
pursuant to Section 25140, of the California Health and Safety Code, Division
20, Chapter 6.5 (Hazardous Waste Control Law), (ii) are defined as a "hazardous
substance" under Section 25316 of the California Health and Safety Code,
Division 2, Chapter 6.8 (Xxxxxxxxx-Xxxxxxx-Xxxxxx Hazardous Substance Account
Act), (iii) are defined as a "hazardous material," "hazardous substance" or
"hazardous waste" under Section 25501 of the California Health and Safety Code,
Division 20, Chapter 6.95 (Hazardous Substances), (iv) are petroleum or
asbestos, (v) are listed under Article 9 and defined as hazardous or extremely
hazardous pursuant to Article 11 of Title 22 of the California Administrative
Code, Division 4, Chapter 20, (vi) are designated "hazardous substance" pursuant
to Section 311 of the Federal Water Pollution Control Act (33 U.S.C.
33
Section 1317), (vii) are defined as a "hazardous waste" pursuant to Section 1004
of the Federal Resource Conservation and Recovery Act, 42 U.S.C. Section 6901,
et seq. (42 U.S.C. Section 6903), (viii) are defined as a "hazardous substance"
pursuant to Section 101 of the Comprehensive Environmental Response Compensation
and Liability Act, 42 U.S.C. Section 9601, et seq. (42 U.S.C. Section 9601), (x)
which may pollute or contaminate the same, (ix) which may adversely affect the
health or safety of persons, whether on the Premises or anywhere else, (x) which
may adversely affect the condition, use, or enjoyment of the Premises or
anywhere else, or (xi) which may adversely affect the Premises, the Project, or
any of the improvements (all of the foregoing collectively referred to herein as
"HAZARDOUS MATERIALS").
28.2 DISPOSAL OF WASTE. Tenant shall not keep any trash, garbage,
waste, or other refuse on the Premises except in sanitary containers and shall
regularly and frequently remove the same from the Premises. Tenant shall keep
all incinerators, containers, or other equipment used for the storage or
disposal of such matter in a clean and sanitary condition. Tenant shall properly
dispose of all sanitary sewage and not use the sewage disposal system of the
Project (i) for the disposal of anything except sanitary sewage, (ii) in excess
of the amount reasonably contemplated by the uses permitted under the Lease, or
(iii) in excess of the amount permitted by any governmental entity. Tenant shall
dispose of Hazardous Materials only through properly licensed Hazardous
Materials disposal agencies.
28.3 COMPLIANCE WITH LAWS. Tenant shall, at Tenant's own expense,
comply with all existing and any hereinafter enacted applicable Hazardous
Materials laws in its use, storage and disposal of Hazardous Materials in, on or
about the Premises. Tenant shall, at Tenant's own expense, make all submissions
to, provide all information to, and comply with all requirements of the
appropriate governmental authority ("AUTHORITY") under all applicable Hazardous
Material laws in its use, storage and disposal of Hazardous Materials in, on or
about the Premises. Should any Authority require that a clean up or remediation
plan be prepared or that a clean up or any other remediation action be
undertaken because of any spills or discharges of Hazardous Materials or on the
underlying or adjacent property by Tenant or the Tenant Parties that occur
during the Term of the Lease, or after expiration of the Lease if as a result of
Tenant's use of Hazardous Materials in, on or about the Premises, then Tenant
shall, at Tenant's own expense, prepare and submit the, required plans and
financial assurances, and carry out the approved plans. At no expense to
Landlord, Tenant shall promptly provide all information reasonably requested by
Landlord for preparation of affidavits required by Landlord or for Landlord's
own information, to determine the applicability of the Hazardous Materials laws
to the Premises and shall sign affidavits promptly when requested to do so by
Landlord regarding Tenant's use, storage and/or disposal of Hazardous Materials
in, on or about the Premises, in form and content acceptable to Tenant.
28.4 BUSINESS. Landlord acknowledges that it is not the intent of this
PARAGRAPH 28 to prohibit Tenant from operating its business as described above.
Tenant may operate it business so long as the use or presence of Hazardous
Materials is strictly and properly monitored according to all Applicable Law. As
a material inducement to Landlord to allow Tenant to use Hazardous Materials in
connection with its business, Tenant agrees to deliver to Landlord prior to the
Commencement Date a list identifying each type of Hazardous Materials to be
present on the Premises and setting forth any and all governmental approvals or
permits
34
required in connection with the presence of Hazardous Materials on the Premises
("HAZARDOUS MATERIALS LIST"). Tenant shall deliver to Landlord an updated
Hazardous Materials List at least once a year and shall also use commercially
reasonable efforts to deliver an updated list before any new Hazardous Materials
are brought onto the Premises or on or before the date Tenant obtains any
additional permits or approvals. In connection with any Hazardous Materials
utilized by Tenant on the Premises, Tenant shall be responsible, at its sole
cost and expense, for making any necessary modifications or improvements either
to Premises or Tenant's equipment as required by Applicable Law, or any
governmental agency or as reasonably required by Landlord's insurance company.
Tenant will, at its sole cost and expense, promptly upon receipt of written
notice from Landlord complete such improvements. If such work is not promptly
undertaken and completed, Landlord shall have the right, but not the obligation,
to complete such work and to charge such amounts to Tenant as additional rent
under this Lease.
28.5 INDEMNIFICATION. Tenant shall indemnify, defend, and hold
harmless Landlord from and against any and all claims, demands, judgments,
damages, actions, causes of action, injuries, administrative orders, consent
agreements and orders, liabilities, penalties, costs, and expenses of any kind
whatsoever, including but not limited to claims arising out of loss of life,
injury to persons, property, or business, or damage to natural resources, in
connection with or arising out of any spills or discharges of Hazardous
Materials to the extent due to, contributed to, or caused by the activities of
Tenant, or any Tenant Parties or trespassers in the Premises that occur during
the Term of this Lease; and from all claims, demands, judgments, damages,
actions, causes of action, injuries, administrative orders, consent agreements
and orders, liabilities, penalties, costs, and expenses of any kind whatsoever,
including but limited to claims arising out of Tenant's failure to provide all
information, make all submissions, and take all steps required by any Authority
under any Hazardous Materials laws or any other environmental law.
28.6 INTENTIONALLY DELETED.
28.7 LANDLORD'S RIGHT TO PERFORM TESTS. Landlord shall have the right
following notice (except in the event of an emergency) in accordance with
Paragraph 21, to enter upon the Premises at all reasonable times in order to
review Tenant's Hazardous Materials handling, confirm chemical inventory list
and otherwise inspect Premises for Hazardous Materials contamination. Without
limiting the foregoing sentence, Landlord shall have the right to have an
environmental audit of the Premises to be conducted within ninety (90) days
prior to the scheduled expiration date of this Lease or of termination of this
Lease, if the Lease is terminated on a date other than the scheduled date.
Tenant shall promptly perform any remedial action reasonably recommended by such
environmental audit and pay for such audit if the audit reveals that Hazardous
Materials is present in, on or about the Premises except if such Hazardous
Materials were existing prior to the Commencement Date or otherwise permitted
under this Lease.
28.8 SURRENDER OF PREMISES. Tenant shall surrender the Premises at the
expiration or termination of the Lease free of any Hazardous Materials or
contamination in violation of Applicable Law and as Landlord may reasonably
require except as existing as of the Commencement Date, and free and clear of
all judgments, liens, or encumbrances and shall, at its own cost and expense,
repair all damage and clean up or perform any remedial action necessary
35
relating to any such Hazardous Materials or contamination. Tenant shall perform
a Hazardous Materials "wipe down" at the conclusion of its tenancy. Landlord
shall review and approve the scope of such "wipe down" prior to implementation
by Tenant. Tenant shall, at its sole cost and expense, remove any Alterations
that may be contaminated or contain Hazardous Materials caused by Tenant or any
Tenant Parties. In the event Tenant's failure to perform its obligations under
this Paragraph 28.8 affects Landlord's ability to lease the Premises, Tenant
shall continue to pay all Base Rent and additional rent until such time as all
Hazardous Materials have been removed from the Premises to the satisfaction of
Landlord. Tenant shall have no obligation under this PARAGRAPH 28.8 with regard
to any Hazardous Materials on the Premises existing prior to the Commencement
Date.
28.9 REPORT FROM LANDLORD. Tenant acknowledges that Landlord has
furnished to it a Phase I Environmental Assessment Report dated August 22, 2001,
and prepared by AES Due Diligence, Inc. ("PHASE I REPORT"). Notwithstanding the
delivery of the Phase I Report, Tenant acknowledges and agrees that Landlord is
not in any way warranting the accuracy of the Report, its findings or its
conclusions. Prior to Tenant's surrender of the Premises, Tenant shall conduct
an "EXIT ASSESSMENT," consisting of an updated Phase I Report, in accordance
with the applicable portions of ASTM Standards E1527-93 and E-1528-93 for a
Phase I Report, and such other tests as are listed on the Assessment Criteria
attached hereto as EXHIBIT "I." Tenant shall submit to Landlord a copy of the
report(s) of the Existing Assessment, and said reports shall be deemed the
environmental condition of the Premises upon Tenant's surrender of the Premises.
Tenant shall promptly remove and take all remedial action in connection with any
contamination or degradation of the Premises by Hazardous Materials identified
in the Exit Assessment and not identified as pre-existing contamination or
degradation at the time of the Phase I Report. Tenant shall complete all such
work prior to Tenant's vacating the Premises, and upon completion of such
remedial work, shall provide Landlord with a written report from Tenant's
environmental consultant verifying that such work has been completed. If any
such work is not completed by the termination of this Lease, the provisions of
PARAGRAPH 20 above shall apply for any period of time until such work is
completed. Notwithstanding anything to the contrary contained herein, Tenant and
its environmental consultant shall have access to the Project and Premises at
any time prior to the Commencement Date to perform its own Phase I Environmental
Assessment (and any Phase II work recommended as a result of such Phase I
Environmental Assessment), provided that Tenant and its consultant shall provide
notice to Landlord of such activities, shall not unreasonably interfere with any
ongoing activities at the Project and shall provide Landlord with a copy of the
final reports of such environmental assessment(s).
28.10 REPRESENTATIONS, WARRANTIES AND INDEMNIFICATION BY LANDLORD.
Except as provided in the Phase I Report, Landlord warrants to its actual
knowledge that as of the Effective Date as follows: (a) no Hazardous Material is
present on the Project or the soil, surface water or groundwater thereof, (b) no
underground storage tanks are present on the Project, and (c) no action,
proceeding or claim is pending or threatened regarding the Project concerning
any Hazardous Material or pursuant to any environmental law. Landlord has
delivered to Tenant all material reports and environmental assessments of the
Premises or Project conducted at the request of or otherwise available to
Landlord (including the Phase I Report described in Paragraph 28.9) and Landlord
has complied with all environmental disclosure obligations imposed upon Landlord
by applicable Law with respect to this transaction. Landlord shall
36
indemnify, defend, protect and hold Tenant its agents, contractors,
stockholders, directors, successors, representatives, and assigns harmless from
and against any and all losses costs, claims, liabilities, damages, and expenses
(including attorneys' and consultants' fees and costs) of every type and nature,
directly or indirectly arising out of or in connection with any Hazardous
Materials existing on the Premises as of the Commencement Date or which migrate
at any time through groundwater from another property to the Project. As used
herein, Landlord's actual knowledge shall include only the knowledge of Xxxxxx
X. Xxxx, without duty of investigation or imputation. Nothing contained herein
shall create any personal liability of Xxxxxx X. Xxxx.
29. LANDLORD'S DEFAULT; NOTICE TO LENDER.
29.1 LANDLORD'S DEFAULT. In the case of a default, Landlord shall have
a period of thirty (30) days after notice thereof from Tenant to cure such
default. Landlord shall commence promptly to cure such default immediately after
receipt of written notice from Tenant specifying the nature of such default and
shall complete such cure within thirty (30) days thereafter, provided that if
the nature of the default is such that it cannot be cured within such thirty
(30) day period, Landlord shall have such additional time as may be reasonably
necessary to complete its performance so long as Landlord has proceeded with
diligence since its receipt of Tenant's notice and is then proceeding with
diligence to cure such default. In the event of Landlord's default, Tenant shall
have the right to terminate to all its applicable remedies available at law or
in equity.
29.2 NOTICE TO LENDER. Whenever Tenant is required to serve notice of
Landlord's default, written notice shall also be served at the same time upon
any mortgagee under any mortgage or any beneficiary under any deed of trust for
which an address has been provided to Tenant. Such mortgagee or beneficiary
shall have the same periods of time within which Landlord has to cure its
default under PARAGRAPH 29.1 which periods shall run concurrently. Any
representative of the mortgagee or beneficiary shall have the right to enter
upon the Premises for the purpose of curing the Landlord's default. Such
mortgagee or beneficiary shall notify Landlord and Tenant in the manner provided
herein of the address of such mortgagee or beneficiary to which such notice
shall be sent, and the agreements of Tenant hereunder are subject to prior
receipt of such notice.
30. GENERAL PROVISIONS.
30.1 WAIVER. The waiver by Landlord of any term, covenant, or
condition herein contained shall not be a waiver of such term, covenant, or
condition on any subsequent breach. The subsequent acceptance of Monthly Rent
hereunder by Landlord shall not be deemed to be a waiver of any preceding breach
by Tenant of any term, covenant, or condition of this Lease, other than the
failure of Tenant to pay the particular rental so accepted, regardless of
Landlord's knowledge of such preceding breach at the time of the acceptance of
such Monthly Rent.
30.2 NOTICES. All notices and demands which may or are to be required
or permitted to be given by either party to the other hereunder shall be in
writing. All notices and demands by Landlord to Tenant shall be sent by personal
service, by U.S. Mail, registered or
37
certified, postage prepaid, or by a reputable overnight delivery service, and
addressed to Tenant at the address set forth in PARAGRAPH 1, or to such other
place as Tenant may from time to time designate in a notice to Landlord. All
notices and demands by Tenant to Landlord shall be sent by personal service,
U.S. Mail, registered or certified, postage prepaid, or by a reputable overnight
delivery service, and addressed to Landlord at the address set forth in
PARAGRAPH 1, or to such other person or place as Landlord may from time to time
designate in a notice to Tenant. All notices shall be deemed to be served upon
personal delivery, three days after mailing by U.S. Mail in the manner required
by this paragraph, or the next day when sent by a reputable overnight delivery
service.
30.3 JOINT OBLIGATION. If Tenant hereunder consists of more than one
party, the obligations hereunder imposed upon Tenant shall be joint and several.
30.4 MARGINAL HEADINGS. The marginal headings and article titles to
the paragraphs of this Lease are not a part of this Lease and shall have no
effect upon the construction or interpretation of any part hereof.
30.5 TIME. Time is of the essence of this Lease and each and all of
its provision in which performance is a factor.
30.6 SUCCESSORS AND ASSIGNS. The covenants and conditions herein
contained, subject to the provisions as to assignment, apply to and bind the
heirs, successors, executors, administrators, and assigns of the parties hereto.
30.7 RECORDATION. Tenant shall not record this Lease at the county
recorder's office or any other document relating to this Lease without the prior
written consent of Landlord. Landlord may require Tenant at any time to execute
a Memorandum of Lease, and may record one at any time.
30.8 QUIET POSSESSION. Upon Tenant's paying the Monthly Rent reserved
hereunder and observing and performing all of the covenants, conditions, and
provisions on Tenant's part to be observed and performed hereunder, Tenant shall
have quiet possession of the Premises for the entire Term, subject to all the
provisions of this Lease.
30.9 LATE CHARGES/RETURNED CHECKS. Tenant hereby acknowledges that
late payment by Tenant to Landlord of Monthly Rent or 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 upon Landlord by terms of any trust deed covering the Premises.
Accordingly, if any installment of Monthly Rent or of any amount due from Tenant
shall not be received by Landlord or Landlord's designee within ten (10) days
after the date that said amount is due, then Tenant shall pay to Landlord a late
charge equal to six percent (6%) of such overdue amount. Acceptance of such late
charges by the 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 addition to such late
charges, Tenant shall pay Landlord one hundred dollars ($100) (in addition to
other
38
sums owed) if for any reason a check given by Tenant to Landlord in payment of
any amount owing to Landlord is dishonored.
30.10 PRIOR AGREEMENTS. This Lease contains all of the agreements of
the parties hereto with respect to any matter covered or mentioned in this
Lease, and no prior agreements or understanding pertaining to any such matters
shall be effective for any purposes. No provisions of this Lease may be amended
or added to except by an agreement in writing signed by the parties hereto, or
their respective successors in interest. This Lease shall not be effective or
binding on any party until fully executed by both parties hereto.
30.11 INABILITY TO PERFORM. This Lease and the obligations of the
Tenant hereunder shall not be affected or impaired because Landlord is unable to
fulfill any of its obligations hereunder or is delayed in doing so by Force
Majeure (as defined in Paragraph 30.29).
30.12 ATTORNEY'S FEES. If any action or proceeding is brought by
either party against the other under this Lease, the prevailing parties shall be
entitled to recover all costs and expenses (including fees for experts) which
may be incurred, including the fees of its attorneys in such action or
proceeding in such amount as the court may adjudge reasonable as attorney's
fees.
30.13 SALE OF PREMISES BY LANDLORD. In the event of any sale or other
transfer of the Project by Landlord, Landlord shall be and is hereby entirely
freed and relieved of all liability under any and all of its covenants and
obligations contained in or derived from this Lease arising out of any act,
occurrence, or omission occurring after the consummation of such sale or
transfer; and any new owner of the Premises shall be deemed, without any further
agreement between the parties or their successors in interest or between the
parties and any such purchaser, to have assumed and agreed to carry out any of
the covenants and obligations of Landlord under this Lease provided that such
purchaser assumes Landlord's obligations in writing.
30.14 INTEREST. Except as expressly provided otherwise in this Lease,
any sum owing to Landlord under the terms and provisions of this Lease which
shall not be paid for five (5) days after Tenant's actual receipt of written
notice of the delinquency when due shall bear interest at ten percent (10%) per
annum (or the maximum interest permitted by law, whichever is less) from the
date the same becomes due and payable by the terms and provisions of this Lease
until paid ("INTEREST RATE"); provided, any amounts paid by Landlord to third
parties on behalf of Tenant or to cure any default of Tenant hereunder shall
bear interest at the Interest Rate from the date Landlord paid such amounts; and
further provided, any obligation of Tenant to pay shall continue to bear
interest at the Interest Rate after any breach of this Lease.
30.15 NAME. Tenant shall not use the name of the Project or of the
development in which the Project is situated for any purpose other than as an
address of the business to be conducted by Tenant in the Premises.
30.16 SEPARABILITY. Any provision of this Lease which shall prove to
be invalid, void, or illegal in no way affect, impair, or invalidate any other
provision hereof and such other provision shall remain in full force and effect.
39
30.17 CUMULATIVE REMEDIES. No remedy or election hereunder shall be
deemed exclusive but shall, wherever possible, be cumulative with all other
remedies at law or in equity.
30.18 CHOICE OF LAW. This Lease shall be governed by the laws of the
State of California.
30.19 SIGNS AND AUCTIONS. Tenant shall not place any sign upon the
Premises Project or conduct any auction thereon without Landlord's prior written
consent, which may be granted or withheld in its sole discretion. Landlord will
allocate to Tenant its pro rata share of Building and monument signage, subject
to Landlord's reasonable approval. Tenant shall be responsible for all costs of
installing Tenant's signage.
30.20 BROKERS. The parties recognize that the brokers who negotiated
this Lease are the brokers whose names are stated in PARAGRAPH 1 and agree that
Landlord shall be solely responsible for the payment of brokerage commissions,
if any, to said brokers pursuant to a separate written agreement, and that
Tenant shall have no responsibility therefore. If either party has dealt with
any other person or real estate broker with respect to leasing or renting space
in the Project, said party shall be solely responsible for the payment of any
fee due said person or firm and said party shall hold the other free and
harmless against any liability in respect thereto, including attorney's fees and
costs.
30.21 RELATIONSHIP OF PARTIES. Nothing contained in this Lease shall
be deemed or construed as creating a partnership, joint venture, or any other
relationship between the parties hereto other than Landlord and Tenant according
to the provisions contained herein, or cause Landlord to be responsible in any
way for the debts or obligations of Tenant, or any other party.
30.22 NO THIRD PARTY BENEFIT. The parties acknowledge and agree that
the provisions of this Lease are for the sole benefit of Landlord and Tenant,
and not for the benefit, directly or indirectly, of any other person or entity,
except as otherwise expressly provided herein.
30.23 SURVIVAL OF OBLIGATIONS. Any provisions of this Lease to the
contrary notwithstanding, the expiration or termination of this Lease and (or)
Tenant's right of possession shall not relieve either Landlord or Tenant from
any liability (i) accruing under this Lease prior to such termination or
expiration, or (ii) under any indemnity provisions of this Lease as to matters
occurring during the Term or by Tenant's occupancy of the Premises.
30.24 ADDITIONAL RENT. All amounts Payable by Tenant to Landlord
pursuant to the terms of this Lease shall be deemed to be additional rent due
hereunder.
30.25 INTENTIONALLY DELETED.
30.26 CORPORATE AUTHORITY. If Tenant is a corporation, said
corporation represents and warrants that each individual executing this Lease on
behalf of said corporation is duly authorized to execute and deliver this Lease
on behalf of said corporation in accordance with a duly adopted resolution of
the board of directors of said corporation or in accordance with
40
the bylaws of said corporation, and that this Lease is binding upon said
corporation in accordance with its terms. If Landlord is a corporation, said
corporation represents and warrants that each individual executing this Lease on
behalf of said corporation is duly authorized to execute and deliver this Lease
on behalf of said corporation in accordance with a duly adopted resolution of
the board of directors of said corporation or in accordance with the bylaws of
said corporation, and that this Lease is binding upon said corporation in
accordance with its terms.
30.27 ARM'S LENGTH AGREEMENT. This Lease has been negotiated at arms
length and between persons sophisticated and knowledgeable in the matters dealt
with in this Lease. In addition, each party has been represented by experienced
and knowledgeable legal counsel. Accordingly, any rule of law (including Civil
Code Section 1654) or legal decision that would require interpretation of any
ambiguities in this Lease against the party that has drafted it is not
applicable and is waived. The provisions of this Lease shall be interpreted in a
reasonable manner to effect the purpose and intent of the parties to this Lease.
30.28 RESERVATIONS. Landlord reserves the right to install new or
additional utility facilities throughout the Premises and the Project for the
benefit of Landlord or Tenant, or any other tenant of the Center, including
without limitation such utilities as plumbing, electrical systems, security
systems, communication systems, and fire protection and detection systems so
long as such do not unreasonably interfere with Tenants use of the Premises, or
increase Tenant's obligations (financial or otherwise). Furthermore, Landlord
reserves the right, from time to time, to grant, without the consent or joinder
of Tenant, such easements, rights of way, utility raceways, and dedications that
Landlord deems necessary, and to cause the recordation of parcel maps and
restrictions, so long as such easements, rights of way, utility raceways,
dedications, maps and restrictions do not unreasonably interfere with the use of
the Premises by Tenant or increase Tenant's obligations under this Lease. Tenant
agrees to sign any documents reasonably requested by Landlord to effectuate any
such easement rights, dedications, maps or restrictions in form and content
acceptable to Tenant.
30.29 FORCE MAJEURE. If Landlord cannot perform any of its obligations
due to events beyond Landlord's control, the time provided for performing such
obligations shall be extended by a period of time equal to the duration of such
events. The term "events beyond Landlord's control" is defined as "acts of God,
war, civil commotion, labor disputes, strikes, fire, flood or other casualty,
shortages of labor or material, government regulation and weather conditions."
30.30 EXHIBITS. Each exhibit attached to this Lease is hereby
incorporated herein by this reference.
30.31 SECURITY MEASURES. Tenant hereby acknowledges that the rent
payable to Landlord hereunder may not include the cost of guard service or other
security measures, and that Landlord shall have not obligation to provide the
same.
30.32 INTENTIONALLY DELETED.
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30.33 CONSENT. Whenever the Lease requires an approval, consent,
determination, selection or judgment by either Landlord or Tenant, unless
another standard is expressly set forth, such approval, consent, determination,
selection or judgment and any conditions imposed thereby shall be reasonable and
shall not be unreasonably withheld or delayed and, in exercising any right or
remedy hereunder, each party shall at all times act reasonably and in good
faith.
30.34 LANDLORD RENOVATIONS. It is specifically understood and agreed
that Landlord has no obligation and has made no promises to alter, remodel,
improve, renovate, repair or decorate the Premises, Building, Project, or any
part thereof, and that no representations respecting the condition of the
Premises or the Building have been made by Landlord to Tenant except as
specifically set forth herein. However, Tenant acknowledges that Landlord may
during the Term renovate, improve, alter, or modify (collectively,
"RENOVATIONS") the Building, and/or Project, including without limitation the
parking facilities, common areas, systems and equipment, roof, and structural
portions of the same, which Renovations may include, without limitation, (i)
modifying the common areas and/or tenant spaces to comply with applicable laws
and regulations, including regulations relating to the physically disabled,
seismic conditions, and building safety and security, and (ii) installing new
carpeting, lighting, and wall coverings in certain common areas, and in
connection with such Renovations, Landlord may, among other things, erect
scaffolding or other necessary structures in the Building, limit or eliminate
access to portions of the Project, including portions of the common areas, or
perform work in the Building, which work may create noise, dust or leave debris
in the Building, provided that such Renovations do not unreasonably interfere
with Tenant's use of, or operations on the Premises, or increase its obligations
(financial or otherwise) under the Lease. Subject to the foregoing, Tenant
hereby agrees that such Renovations and Landlord's actions in connection with
such Renovations shall in no way constitute a constructive eviction of Tenant
nor entitle Tenant to any abatement of Monthly Rent or additional rent.
30.35 OPTIONS PERSONAL TO TENANT. Each option granted to Tenant under
this Lease is personal to the original Tenant named in PARAGRAPH 1 above and any
Affiliate, and cannot be voluntarily or involuntarily assigned or exercised by
any person or entity other than said original Tenant or Affiliate while the
original Tenant is full and actual possession of the Premises and without the
intention of thereafter assigning or subletting except in connection with a
Permitted Transaction. The options, if any, herein granted to Tenant are not
assignable, either as part of an assignment of this Lease or separately or apart
therefrom except in connection with a Permitted Transaction, and no option may
be separated from this Lease in any manner, by reservation or otherwise.
30.36 WAIVER OF JURY TRIAL. LANDLORD AND TENANT WAIVE THEIR RIGHT TO
TRIAL BY JURY OF ANY ACTION BROUGHT BY EITHER AGAINST THE OTHER ARISING OUT OF
OR IN ANY WAY RELATED TO THIS LEASE, OR TENANT'S USE OR OCCUPANCY OF THE
PREMISES. TENANT'S REMEDIES SHALL BE LIMITED TO DAMAGES AND INJUNCTIVE RELIEF.
30.37 NON-BINDING UNTIL FULLY EXECUTED. THE SUBMISSION OF THIS LEASE
FOR EXAMINATION OR ITS NEGOTIATION OR THE NEGOTIATION OF THE
42
TRANSACTION DESCRIBED HEREIN DOES NOT CONSTITUTE AN OFFER TO LEASE, AND THE
EXECUTION OF THIS LEASE BY TENANT DOES NOT CONSTITUTE A BINDING CONTRACT UNTIL
SUCH TIME AS THIS LEASE HAS BEEN EXECUTED BY AUTHORIZED OFFICERS OF LANDLORD.
THE PARTIES ACKNOWLEDGE AND AGREE THAT NO NEGOTIATIONS, DOCUMENT DRAFTS OR
EXECUTION OF THIS LEASE BY TENANT SHALL GIVE RISE TO ANY RIGHTS IN TENANT TO
TAKE ANY ACTION IN RELIANCE UPON THIS LEASE OR TO OTHERWISE ANTICIPATE OR EXPECT
THAT LANDLORD WILL SIGN THIS LEASE UNTIL IT IS IN FACT SIGNED AND DELIVERED TO
BOTH OR ALL PARTIES.
30.38 ARBITRATION. Any controversy, dispute or claim arising out of
the interpretation, performance or breach of PARAGRAPH 4.3 or PARAGRAPH 22.5
shall be resolved at the request of any party hereto ("INITIATION") directed to
the American Arbitration Association ("AAA") by a binding arbitration conducted
by a single arbitrator ("ARBITRATOR") in San Diego, California in accordance
with the Expedited Procedures for Commercial Arbitration Rules ("CAR") of the
AAA, except as modified by the terms of this Paragraph ("ARBITRATION"). The
Arbitrator shall have the power to grant such legal and equitable remedies and
award such damages as may be granted or awarded by a Judge of the Superior Court
of the County of San Diego, California. The Arbitrator shall prepare and provide
to the parties a written decision ("DECISION") on all matter(s) which are the
subject of the Arbitration, including factual findings and the reasons which
form the basis of the Decision of the Arbitrator. The Decision shall be
non-appealable, conclusive, and final and shall have the effect and be
enforceable in the manner provided by the California Code of Civil Procedure.
Costs of the Arbitration shall be borne as directed by the Arbitrator, subject
to PARAGRAPH 30.12 above. The parties hereby agree that the CAR are modified as
follows:
i. If the parties have not agreed to an Arbitrator within thirty
(30) days after Initiation of Arbitration, then the AAA shall appoint a single
neutral Arbitrator as soon thereafter as practical.
ii. The parties shall be permitted discovery, including
depositions, under the supervision of and rules set by the Arbitrator; provided,
however, that discovery shall be completed within forty-five (45) days of
selection or appointment of the Arbitrator. The Arbitrator shall have power to
impose such sanctions as the Arbitrator deems appropriate for failure of a party
or counsel for a party to comply with discovery rules established by the
Arbitrator.
iii. A hearing before the Arbitrator shall be held no later than
ninety (90) days after Initiation of Arbitration, unless a hearing is waived by
all parties.
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iv. No later than ten (10) days from the date of closing of the
Arbitration hearing, or, if an oral hearing has been waived, from the date of
transmitting final statements and proofs to the Arbitrator, the Arbitrator shall
render a written decision.
TENANT: LANDLORD:
Alexion Pharmaceuticals, Inc., Pacific Apartment Group, LLC,
a Delaware corporation a California limited liability company
By: /s/ Xxxxx Xxxxxx By: Pacific Management Services, Inc.,
----------------------------- a California corporation (Manager)
Its: Executive Vice President and
Chief Operating Officer
-----------------------------
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxxxx X. Xxxx
------------------------------ --------------------------------
Its: Vice President, Finance and Its: Vice President
Administration, Assistant
Secretary
-----------------------------
PMSI SRF, LLC,
a California limited liability company
By: Pacific Management Services, Inc.,
a California corporation (Manager)
By: /s/ Xxxxxx X. Xxxx
------------------------------
Its: Vice President
------------------------------
If Tenant is a corporation, the authorized officers must sign on behalf of the
corporation and indicate the capacity in which they are signing. This Lease must
be executed by the president or vice-president AND the secretary or assistant
secretary, unless bylaws or a resolution of the board of directors shall
otherwise provide, in which event the bylaws or a certified copy of the
resolution, as the case may be, must be concurrently delivered to Landlord.
Landlord in its sole discretion may waive this requirement.
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EXHIBIT A
[GRAPHIC OF FLOOR PLAN]
45
EXHIBIT "B"
FLOOR PLAN
[to be attached]
46
EXHIBIT "C"
Within ten (10) business days following the Effective Date, Tenant shall submit
to Landlord a floor plan and schematic utility plans consistent with the Floor
Plan ("SCHEMATIC PLANS") for Landlord's reasonable approval.
Within five (5) business days after receipt of the Schematic Plans, Landlord and
Tenant's Representative shall meet with any of Landlord's and Tenant's chosen
consultants (i.e., architects, engineers, etc.) to provide any proposed changes
to the Schematic Plans to satisfy any of Landlord's reasonable concerns.
Within twenty (20) business days after Landlord's final approval of the
Schematic Plans, Tenant shall submit to Landlord a progress set of building
plans, suitable for review and cost estimation by a Designated Contractor (as
defined below) which shall be materially consistent with the Schematic Plans and
the design criteria attached hereto as EXHIBIT "C-1" hereto ("PROGRESS PLANS").
Within ten (10) business days after receipt of the Progress Plans, Landlord will
provide written approval or detailed, reasonable disapproval of the Progress
Plans. Landlord will also endeavor to provide a cost estimate for all the costs
to construct the Landlord Improvements ("COST ESTIMATE") based on a construction
cost estimate provided by a Designated Contractor selected by Landlord.
Within seven (7) business days after receipt of Landlord's proposed changes (if
any) to the Progress Plans, Tenant shall incorporate such changes to the
Progress Plans. Tenant may, at its election within seven (7) business days (i)
approve the Cost Estimate, or (ii) deliver to Landlord any changes to the
Progress Plans as are necessary, in Tenant's reasonable opinion, to reduce
costs. If Tenant proposes any changes to the Progress Plans to reduce the Cost
Estimate, Landlord shall not unreasonably withhold its approval of such changes,
provided such changes do not conflict with Exhibit "C-1." If Landlord does not
approve of Tenant's proposed changes, Landlord and Tenant shall confer within
five (5) business days after receipt of Tenant's proposed changes and negotiate
in good faith to reach agreement on modifications to the Progress Plans and Cost
Estimate as a consequence of such changes.
Within ten (10) business days after agreement of the parties as to the Progress
Plans, Tenant shall produce a complete set of building plans ("PLANS") which are
substantially equivalent to the Progress Plans which Tenant shall submit to the
appropriate governmental authorities to obtain all necessary building permits.
Thereafter, Tenant shall use its best efforts to obtain all required
governmental approvals for construction of the Landlord Improvements as soon as
possible. Tenant shall also provide multiple set of Plans to Landlord for
dissemination to Xxxxxxx & Xxxxxxx, Inc. and other contractors reasonably
selected by Landlord (collectively, "DESIGNATED CONTRACTORS"); Landlord shall
reasonably consider Biostruct, Inc., as the Designated Contractor for the
Landlord Improvements for the Phase II Premises.
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Within twenty (20) business days of Landlord's receipt of the Plans, Landlord
shall endeavor provide a bid analysis, with assistance from architect and
engineers, to Tenant outlining Landlord's selection of one of the Designated
Contractors ("CONTRACTOR") based on overall cost, completeness of bid,
subcontractor participation, construction schedule and project staffing.
Tenant shall retain McGraw Xxxxxxx Architects as the architect and TKG, Inc. as
the engineer for the Plans. All other engineers design professionals shall be
subject to Landlord and Tenant's mutual approval. The contract for the general
contractor shall provide for a guaranteed maximum price contract and be in a
form reasonably acceptable to Tenant. The general contractor shall be the
contractor of Landlord only, and Tenant shall have no liability to the general
contractor under the construction contract.
Tenant shall respond expeditiously to all comments or corrections of any
governmental agency involved in obtaining a building permit to construct the
Landlord Improvements ("BUILDING PERMIT") and shall secure the Building Permit
as soon as possible. Landlord shall reasonably cooperate with Tenant's obtaining
the Building Permit, at no cost or expense to Landlord; provided, however, the
Landlord shall reimburse Tenant the cost of the Building Permit, which shall be
deducted from the Landlord Contribution.
Upon receipt of the Building Permit from Tenant, Landlord shall mobilize the
Contractor to commence the construction of the Landlord Improvements and
diligently prosecute their completion. Landlord shall endeavor to complete the
Landlord Improvements consistent with plans, subject to changes necessitated by
field conditions, material availability, unforeseen conditions or by agreement
of the parties.
Landlord, Tenant's Representative, Contractor, architect and engineers shall
meet each week. Tenant shall provide all information required of it in a timely
manner. If Tenant does not provide information in a timely manner which affects
the completion date, Tenant shall be responsible for Rent for each day the
completion of the Landlord Improvements is so delayed.
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EXHIBIT "C-1"
LANDLORD IMPROVEMENT SPECIFICATIONS
These specifications establish the minimum standards for the Landlord
Improvements throughout the Premises and shall also be known as "Building
Standards". The Landlord Improvements will be designed and constructed to
incorporate the Building Standards in Landlord's reasonable discretion or other
standards agreed to but Landlord and Tenant. These Building Standards are not
comprehensive and may supplemented by Landlord to reflect logical progressions
of these standards.
1. STATE AND LOCAL CODE COMPLIANCE
I. All design and construction shall conform to all Federal, State and
Local building codes and ordinances to include but not be limited to
the most current version of the following documents;
A. 1997 Uniform Building Code
B. 1998 California Building Code
C. 1997 Uniform Plumbing Code
D. 1997 Uniform Mechanical Code
E. 1999 National Electrical Code
F. 1997 Uniform Fire Code
G. 1994 ADA Standards for Accessible Design
H. 2001 Title 24, California's Energy Efficiency Standards
I. California Division of Occupational Safety and Health
J. San Diego Municipal Code
II. All Plans shall be permitted for construction from all appropriate
governmental authorities prior to the commencement of construction.
III. Landlord may require the contractor and subcontractors to use union
labor in the construction of all improvements.
2. PLANNING
I. Premises layout shall generally reflect industry standard design for
biotechnical companies in San Diego in Landlord's reasonable
discretion (e.g. the Premises layout shall be approximately a ratio of
60%/40% for laboratory space to administrative space).
II. Administrative space shall include space to accommodate typical
biotech company functions including reception areas, conference
area(s), private offices for executives, copy/service area,
lunch/break areas, separate bathrooms (adequately sized) for men and
women, utility closet, phone/computer distribution room.
A. Offices are to be a standardized size agreed between Landlord and
Tenant (minimum size 100 square feet), with Executive and corner
offices to be larger and generally located on the window
line/administrative area perimeter.
49
B. Administrative area shall generally be designed to optimize natural
light which shall include interior windows and/or door sidelights
on all perimeter offices.
C. Server/computer rooms larger than 250 square feet to be efficiently
located as agreed to between landlord and tenant (i.e. located to
minimize the need for additional closets and not far from existing
hubs).
Laboratory space shall be generally designed to optimize natural
light for the primary laboratory areas. Specialty/support areas
(e.g. tissue culture labs, glasswash areas, coldrooms, darkrooms,
equipment rooms) shall be appropriately sized and located.
F.
3. ARCHITECTURAL
I. Flooring
A. Lobby and Reception
1. Shall have an upgraded flooring system consisting of ceramic or
stone.
B. Corridors
1. Shall have a vinyl composition tile or sheet products.
C. Office and Administrative Areas
1. Shall be carpeted with a minimum 32 ounce or better tile or
glue-down product throughout with a vinyl 4" wall base. Carpet
pads may be used in areas where daily cart and hand-truck
traffic is not anticipated.
D. BL1 and BL2 Laboratories
1. Shall have vinyl composition tile (VCT) throughout. Multiple
colors of the same product may be used.
E. BL3 and BL4 Laboratories
1. Shall have welded vinyl flooring and extended to a height of 4"
above finish floor with all vertical seals welded through a
process approved by the manufacturer.
F. Facility Support and Storage Areas
Shall have vinyl composition tile (VCT) throughout. Multiple colors of the same
product may be used.
II. Wall Construction
A. Load Bearing
1. Walls bearing loads other than those loads associated with the
wall itself shall not be constructed as a part of any tenant
improvement project in this facility unless;
2. Walls are designed by a Structural Engineer licensed in the
State of California
3. Project has a current building permit through the local
building department having jurisdiction at the project address
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4. Landlord has review and approved final structural construction
plan set.
B. Non-Load Bearing - Rated
1. Rated walls, ceilings and other enclosures shall be constructed
of "Type-X" gypsum drywall board (thickness and number of layers
per code) on metal studs sized appropriately by structural
calculations for the height and width and class of wall
required. "Shaft-Wall" may also be utilized where allowed by
local building officials.
C. Non-Load Bearing - Non-Rated
1. Non-Rated walls, ceilings and other enclosures shall be
constructed of 1/2" thick gypsum drywall board on 3-5/8" minimum
width metal studs (gauge to be sized appropriately by structural
calculations for the height and width).
i. Non-rated walls should be constructed to the underside of
the all suspended acoustical ceilings for flexibility of
future relocation.
ii. Non-rated walls may penetrate the ceiling to a height of 6"
above in Conference Rooms, Executive offices, Computer
Rooms, and other support spaces needing additional sound
attenuation or ceiling grid layout.
D. Wall Finishes
1. Lobby and Reception
i. Wall finishes in these areas should be a minimum of
Level-5 smoothness capable of receiving paint without
texture or wall coverings.
2. Corridors
i. Wall finishes in these areas should be a minimum of Level-4
smoothness capable of receiving paint without texture.
3. Office and Administrative Areas
i. Wall finishes in these areas should be a minimum of
Level-5 smoothness capable of receiving paint or
wall-coverings.
4. BL1 through BL4 Laboratories
i. Wall finishes in these areas should be a minimum of Level-4
smoothness capable of receiving paint.
5. Facility Support and Storage Areas
i. Wall finishes in these areas should be a minimum of Level-3
smoothness capable of receiving paint.
E. Doors/Hardware
1. Administrative/office areas
i. Doors shall generally be finish grade, 7 foot, solid core
wood. Door frame finish, color and hardware shall be
approved by Landlord.
2. Laboratory areas
51
i. Doors shall generally be paint grade, 7 foot, solid core
doors or, if approved by Landlord, metal doors. Door finish,
frame fish, color(s) and hardware shall be approved by
Landlord.
F. Windows and Appurtenances
1. Exterior
i. Mini-blinds, vertical blinds or an alternative shading
device approved by the landlord shall be utilized on all
exterior windows.
ii. Except as otherwise required by Applicable Laws, Tenant may
not install film, tinting or other materials directly to
windows without landlord approval (which shall not be
unreasonably withheld).
2. Interior
i. Mini-blinds or vertical blinds shall be installed on all
interior enclosed office or conference room windows.
G. Ceilings
1. Administrative areas
i. Ceilings in the reception area, conference area(s), and private
offices shall all be 2' by 2', tegular, suspended acoustical
tiles in a metal T-bar grid set a minimum height of nine feet
above the finish floor where such minimum height is practicable
or achievable.
ii.Ceilings in the other areas of the administrative areas be no
larger than a 2' by 4' suspended acoustical tiles in a metal
T-bar grid set a minimum height of nine feet above the finish
floor where such minimum height is practicable or achievable.
2. Gypsum Drywall Board
i. Hard-cap ceilings or upgraded ceiling may be used in open
office areas, common areas, conference rooms, cafeteria, and
other special areas. (Upgraded ceiling shall include designs
which incorporate opening to structure above with exposed
mechanical, electrical, plumbing painted as appropriate).
4. STRUCTURAL
I. The tenant may not alter or attach objects to the structural
components (foundation, slab, walls, columns, beams, purlins, etc...)
of the facility in any way before acquiring the following;
A. Approval by the landlord or the landlord's representative.
B. Structural design calculations and construction documents from a
Licensed Structural Engineer in the State of California.
5. MECHANICAL
52
Landlord shall prepare a 10 year cost/benefit analysis comparing installation
cost to operational cost and other benefits between a package system and a
central plant system ("CENTRAL PLANT") for review and mutual approval by
Landlord and Tenant. In the event the analysis indicates a package system
approach on the administrative area and Central Plant approach on the laboratory
area, the Building Standards for each will apply. Landlord and Tenant shall
review the design, costs and lead time of the Central Plant and in the event
they cannot agree on the installation of the Central Plant, Landlord shall
install package units in place of the Central Plant. The Building Standards if a
Central Plant is selected are as follows.
I. Central Plant
A. Administrative area
1. Indoor air handlers shall be high efficiency rated and manufactured
by Carrier, Pace, or approved equivalent with an estimated 15 year
life. Any coils exposed to outside air shall be copper coated or
factory coated for a marine environment. All units shall be
controlled via a state-of-the-art Direct Digital Control.
2. Each of the reception, conference area(s), and breakroom shall be
sufficiently serviced by an air handler unit. The remaining
administrative area shall be installed with a sufficient number of
air handlers to adequately address temperature and variations across
the Administrative space.
3. Air handler, piping, and duct sizing shall all be calculated and
designed to satisfy typical office heating and cooling demands plus a
margin of 15%.
B. Laboratory Area
1. Air Handlers serving lab areas shall be manufactured by Pace, or
approved equal. Unit quality level shall be consistent with a 15-year
useful life expectancy and rated at high-efficiency. Coils exposed to
outdoor air shall be copper finned or factory coated aluminum fins
for marine environment. Air Handlers shall be sized such that the
units are capable of providing 100% outside air to the space at 12
air changes per hour. All supporting mechanical equipment (including,
but not limited to) piping, ductwork, coil size, chilled water
capacity, heating water capacity, and controls shall be sized and
installed accordingly. All units shall be controlled via a
state-of-the-art Direct Digital Control.
C. Each of the tissue culture, glasswash, vivariums or other specialty
areas shall be sufficiently serviced by an air handler unit. The
remaining laboratory area shall be installed with a sufficient number of
air handlers to adequately address temperature and variations across the
laboratory space.
D. Air handler, piping, and duct sizing shall all be calculated and
designed to satisfy typical laboratory heating and cooling demands plus
a margin of 15%. All laboratory HVAC systems will be designed to
accommodate typical numbers of fume hoods, which may or may not be
installed.
E. Central yard
1. The chilled water system shall consist of either an air-cooled or
water-cooled chiller/chiller plant manufactured by Trane, York,
McQuay, Carrier, MULTI-STACK or approved equal. Chiller plant
efficiency (IPLV) shall be .95 kw/ton for an air-cooled chiller or .65
kw/ton for a water-cooled chiller and cooling tower.
2. Coils exposed to outdoor air shall be copper finned or factory coated
aluminum fins for marine environment.
3. Refrigerant system shall be R-134 for air or water-cooled equipment.
53
4. Cooling towers shall be constructed from galvanized steel. Optionally,
price cooling towers with a stainless steel casing.
5. All features of the Central yard including the chiller, cooling tower,
boiler, pumps, piping, etc. shall be sized to accommodate the
requirements of the Premises and a reasonable approximation for the
balance of the Building.
II. Package System
A. Xxxxxxxxxxxxxx xxxx
0. Package heat pumps/AC units shall be manufactured by Trane, Carrier
or approved equivalent. Unit quality level shall be consistent with
a 15-year useful life expectancy. Structural analysis and upgrades
shall be made accordingly. All units shall be rated at high
efficiency (SEER = 12.00 or higher). Outdoor coils shall be copper
finned or factory coated aluminum fins for marine environment.
2. Each of the reception, conference area(s), and breakroom shall be
sufficiently serviced by a package unit. The remaining
administrative area shall be installed with a sufficient number of
package units to adequately address temperature and variations
across the Administrative space.
3. Package units, and duct sizing shall all be calculated and designed
to satisfy typical office heating and cooling demands plus a margin
of 15%.
B. Laboratory Area
1. Package Units serving lab areas shall be manufactured by XxXxxx, or
approved equal. Unit quality level shall be consistent with a
15-year useful life expectancy and rated at high-efficiency. Coils
exposed to outdoor air shall be copper finned or factory coated
aluminum fins for marine environment. Package Units shall be sized
such that the units are capable of providing 100% outside air to
the space at 12 air changes per hour. All supporting mechanical
equipment (including, but not limited to) piping, ductwork, coil
size, chilled water capacity, heating water capacity, and controls
shall be sized and installed accordingly.
2. Each of the tissue culture, glasswash, vivariums or other specialty
areas shall be sufficiently serviced by a package unit. The
remaining laboratory area shall be installed with a sufficient
number of package units to adequately address temperature and
variations across the laboratory space.
3. Air handler, piping, and duct sizing shall all be calculated and
designed to satisfy typical laboratory heating and cooling demands
plus a margin of 15%. All laboratory HVAC systems will be designed
to accommodate typical numbers of fume hoods, which may or may not
be installed.
6. ELECTRICAL
I. Power
A. Total Electrical design load shall be designed to
code, not exceed capacity and be easily expandable to
create additional capacity.
B. Standard minimum for convenience outlets for normal office use
throughout is 4 plugs
C. 1 voice/data drop per office/cubicle/room in office, administrative
and support areas.
D. Tenant may increase power or voice/data drops as needed provided power
usage for suite does not exceed capacity and be easily expandable to
create additional capacity.
54
II. Lighting
A. Lighting shall be 3-tube 2'x4' fluorescent fixtures
(mounted in T-bar grid) with parabolic lens and energy
savings ballasts.
B. Lighting in each office or separate room shall be
individually switched.
C. Motion sensing switches are approved for use in
office and administrative areas.
D. Tenant may upgrade light with landlord approval.
7. FIRE PROTECTION
I. Alarm Panel
A. Fire alarm control panel to be Fire-Lite Alarms MS-9200
addressable Fire Alarm Control Panel or equivalent as
specified by mechanical engineer and approved by
landlord.
B. Semi-recessed sprinkler heads with chrome or white
escutcheons throughout. Fully recessed and concealed
beads are also acceptable.
C. Cover plates on wall mounted strobes shall be in
accordance with Applicable Law.
Fire extinguisher cabinets shall be white.
55
EXHIBIT "D"
Intentionally Deleted.
56
EXHIBIT "F"
Irrevocable Standby Letter of Credit No.:
Amount:
Beneficiary:
Sorrento Research Facility
Attention: Xxxxxx X. Xxxxxx
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Ladies and Gentlemen:
On behalf of _________________, we hereby issue in your favor our Irrevocable
Standby Letter of Credit No.:____________ ("Letter of Credit") in the aggregate
amount of _____________.
Funds under this Letter of Credit are available with us by payment of your
draft(s) drawn on us at sight, marked "Drawn Under ___________, Irrevocable
Standby Letter of Credit No.: ________ dated ___________," accompanied by the
following:
1. Your signed and dated written statement stating:
"I, _____________ an authorized officer of Pacific Management
Services, Inc., with respect to ________________, Irrevocable Standby
Letter of Credit No.: ________ dated ___________ hereby certify, under
penalty of perjury, that ________________ is in default under that certain
lease dated __________, _____ by and between _____________ ("Tenant") and
Pacific Sorrento Technology Park ("LANDLORD"), covering the property
commonly known as 00000 Xxxxxxxx Xxxxxx Xxxx, Xxx Xxxxx, Xxxxxxxxxx, and
Landlord is duly entitled to security deposit under the terms and
provisions of the Lease."
2. This original Letter of Credit.
This Letter of Credit shall be automatically renewed for successive, additional
one (1) year periods unless, at least thirty (30) days prior to any such date of
expiration, the undersigned shall give written notice to Beneficiary, by
certified mail, return receipt requested and at the address set forth above or
at such other address as may be given to the undersigned by Beneficiary, that
this Letter of Credit will not be renewed.
57
This Letter of Credit is effective immediately and shall expire at our office
located at ___________________________, with our close of business at 5:00 p.m.
California time on ___________.
We hereby undertake that drafts drawn under and in compliance with the terms and
conditions of this Letter of Credit will be duly honored, upon presentation, by
wire transfer of immediately available funds as per your instructions.
Payment hereunder shall be made regardless of (i) any written or oral direction,
request, notice or other communication now or hereafter received by us from
Tenant or any other party, including without limitation, any communication
regarding, fraud, forgery, lack of authority or other defect not apparent on the
face of the documents presented, but excluding solely an effective written
order, issued otherwise than at our instance by a court of competent
jurisdiction, which order is legally binding upon us and specifically orders us
not to make such payment; or (ii) the solvency, existence or condition,
financial order, of, or the pendency of any proceeding under the Bankruptcy Code
with respect to Tenant or any other party from whom we may be entitled to
reimbursement for such payment.
This Letter of Credit may be drawn upon in one or more drafts not exceeding in
the aggregate the stated amount hereof.
This Letter of Credit is transferable. You may transfer your right to draw the
entire amount available to be drawn under this Letter of Credit to your
successor. Such transfer shall be effective upon delivery to us of a transfer
request form.
This Letter of Credit is subject to the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500.
Very truly yours,
----------------------------- ------------------------------
58
EXHIBIT "G"
LANDLORD'S RULES AND REGULATIONS
1. No sign, placard, picture, advertisement, name or notice shall be
inscribed, displayed, printed, or affixed on or to any part of the outside or
inside of the Project without the written consent of Landlord first had and
obtained, and Landlord shall have the right to remove any such sign, placard,
picture, advertisement, name, or notice without notice to and at the expense of
Tenant. All approved signs or lettering on doors shall be printed, painted,
affixed, or inscribed by the Landlord at the expense of the Tenant. Tenant shall
not place anything or allow anything to be placed near the glass of any window,
door, partition, or wall which may appear unsightly from outside the Premises,
provided, however, that Landlord may furnish and install a standard window
covering at all exterior windows. Tenant shall not, without prior written
consent of Landlord, cause or otherwise sunscreen any window.
2. Tenant shall not load the floor of the Premises at greater than [rated
dead and rated live load amounts] or roof at greater than [rated dead and rated
live load amounts] or in any way deface the Premises or any part thereof. The
sidewalks, halls, passages, exits, entrances, elevators and stairways shall not
be obstructed by any of the tenants or used by them for any purpose other than
for ingress and egress from their respective Premises. Tenant shall not alter
any lock or install any new or additional locks or any bolts on any doors or
windows of the Premises. The toilet rooms, urinals, wash bowls, and other
similar apparatus shall not be used for any purpose other than that for which
they were constructed and no foreign substance of any kind whatsoever shall be
thrown therein; and the expense of any breakage, stoppage or damage resulting
from the violation of this rule shall be borne by the Tenant whose employees,
invitees or customers shall have caused it.
3. No excessively heavy furniture, freight, or equipment shall be brought
into the Project without prior notice to Landlord and all moving of the same
into or out of the Project shall be done at such time and in such manner as
Landlord shall reasonably designate.
4. The Premises shall not be used for any improper, objectionable, or
immoral purpose. Tenants shall not, except in accordance with the terms of the
Lease, use, keep or permit to be used or kept any foul or noxious gas or
substance in the Premises, or permit the Premises to be occupied or used in a
manner offensive or objectionable to the Landlord or other occupants of the
Project by reason of noise, odors, and/or vibrations, or interfere in any way
with other tenants or those having business therein, nor shall any non-research
animals or birds be brought in or kept in or about the Premises or the Project.
Tenant shall not, except in accordance with the terms of the Lease, use or keep
in the Premises or Project any kerosene, gasoline, or inflammable or combustible
fluid or material or use any method of heating or air conditioning other than as
approved by Landlord.
5. [Intentionally deleted].
59
6. The Landlord shall in no case be liable for damages for any error with
regard to the admission to or exclusion from the Project of any person. In case
of invasion, mob, riot, public excitement, or other commotion, the Landlord
reserves the right to prevent access to the Project during the continuance of
the same by closing of the doors or otherwise for the safety of the tenants and
protection of property in the Project and the Project.
7. Tenant shall not disturb, solicit, or canvass any occupant of the
Project and shall cooperate to prevent same. Landlord reserves the right to
exclude or expel from the Project any person who, in the judgment of Landlord,
is intoxicated or under influence of liquor or drugs or who shall in any manner
do any act in violation of any of the rules and regulations of the Project.
Tenant shall be permitted to operate no more than one (1) vending machines in
the Premises, without the written consent of Landlord.
8. Without the written consent of Landlord, Tenant shall not use the name
of the Project in connection with or in promoting or advertising the business of
Tenant except as Tenant's address. Landlord shall have the right to control and
operate the public portions of the Project, and the public facilities, and
heating and air conditioning, as well as facilities furnished for the common use
of the tenants, in such manner as it deems best for the benefit of the tenants
generally.
9. All entrance doors in the Premises shall be left locked when the
Premises are not in use, and all doors opening to public corridors shall be kept
closed except for normal ingress and egress from the Premises. Tenant shall
close and lock the doors of its Premises and entirely shut off all water faucets
or other water apparatus, and electricity gas or air outlets before Tenant and
its employees leave the Premises, except for any automatic systems, equipment or
devices associated with Tenant's permitted use. Tenant shall be responsible for
any damage or injuries sustained by other tenants or occupants of the Project or
by Landlord for noncompliance with this rule.
10. Tenant shall not allow its employees to park vehicles in any parking
areas designated by Landlord as areas for parking by visitors to the Project.
Tenant shall not allow vehicles in the Project parking areas overnight nor allow
vehicles to be parked in the Project parking areas other than automobiles,
motorcycles, motor driven or non-motor driven bicycles or four wheeled trucks.
60
EXHIBIT "H"
[Intentionally Deleted]
61
EXHIBIT "I"
ENTRANCE / EXIT ASSESSMENT CRITERIA
For purposes of compliance with the requirements of Paragraph 28.9 of the Lease,
the term "Assessment Criteria" with respect to the Premises shall refer to, and
include, the following studies and assessments to be conducted in accordance
with the applicable portions of ASTM Standards E-1527-93 and E-1528-93 for Phase
I Environmental Assessments and such other applicable standards reasonably
requested by Landlord:
A. The following assessments and inspections:
1. "INTERIOR SITE ASSESSMENT" consisting of a visual inspection of all
surfaces (including, without limitation, floors, walls, ceiling tiles,
benches, sinks, interior cabinets and fume hoods) for signs of
contamination and deterioration. Visual inspection of all bench and
hood sinks and readily accessible drain lines for signs of
deterioration, loss of integrity and leakage. The Interior Site
Assessment shall include detailed written documentation of all
observations and dated photos to document the existing condition
thereof.
2. Visual Inspection of Wastewater Collection System piping exclusively
serving the Premises for any breaks in or degradation of such piping
systems, or any accumulated Hazardous Materials.
3. Assessment of biological waste storage unit and any hazardous or
radioactive waste storage units, including governmental disclosures
and decontamination certificates relating to the same.
4. In order to verify that there is no contamination of the laboratory
hoods and exhaust system, an inspection shall be made consisting of an
inspection of the laboratory hoods and exhaust system with detailed
documentation of all observances, including without limitation,
observed solids, liquids, odors or Hazardous Materials entrapment.
Such inspection shall include inspection of the roof area to determine
the existence of any deterioration from condensation of Hazardous
Materials caused by Tenant in the exhaust system which causes such
deterioration.
B. The Assessment Criteria shall also include such sampling and testing as the
consultant reasonably recommends based upon his or her observations, including
post-cleanup sampling to verify absence of Hazardous Materials.
62
EXHIBIT J
TENANT'S PROPERTY
Autoclaves (Alexion supplied)
Automated transfer switches (Alexion supplied)
Back-up generators (Alexion supplied)
Bio-hazard hood (Alexion Supplied)
Modular clean cold rooms with associated condensing units and controls (Alexion
supplied)
Centrifuges (Alexion supplied)
Computer networks (Alexion supplied)
Controlled environment enclosures and rooms (Alexion supplied)
Fermentors (Alexion supplied)
Film Developers (Alexion supplied)
Freezers (Alexion supplied)
Fume hoods (Alexion supplied)
Glassware washer (Alexion supplied)
Hoists (Alexion supplied)
Incubators (Alexion supplied)
Intercom systems (Alexion supplied)
Modular lab casework/furniture including, but not limited to,
lab benches, hoods and shelving units (Alexion supplied)
Phone systems (Alexion supplied)
Security systems (Alexion supplied)
Single phasing protection units (Alexion supplied)
Variable frequency drivers (Alexion supplied)
Waste neutralization systems (Alexion supplied)
Water filters (Alexion supplied)
Water For Injection (WFI) systems and associated tanks and heat exchangers
(Alexion supplied)
63
