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Exhibit 10.13
STANDARD NNN LEASE -- MULTI-TENANT PROPERTY
W I T N E S S E T H
This lease ("LEASE") is entered into by and between Limar Realty Corp. #13, a
California corporation ("LANDLORD") and Arena Pharmaceuticals, Inc., a Delaware
corporation ("TENANT"). For and in consideration of the payment of rents and the
performance of the covenants herein set forth by Tenant, Landlord does lease to
Tenant and Tenant accepts the Premises described below subject to the agreements
herein contained.
1. BASIC LEASE TERMS
a. DATE OF LEASE: May 4, 2000
b. TENANT: Arena Pharmaceuticals, Inc.
Address (of the Premises): 6138 and 6150 Nancy Ridge Drive,
San Diego, CA
Address (for Notices): 6166 Nancy Ridge Drive,
San Diego, CA
c. LANDLORD: Limar Realty Corp. #13
Address (for Notices): 1730 South El Camino Real,
Suite 400
San Mateo, California 94402
Attn: Thomas A. Numainville
d. TENANT'S USE OF PREMISES: Life Science research,
manufacturing and general office
("PERMITTED USE").
e. PREMISES: The Premises consist of the
Ground Floor and the Second Floor
and all lobbies, corridors and
restrooms contained therein
comprising the buildings commonly
known as 6138 and 6150 Nancy
Ridge Drive (the "BUILDINGS") as
set forth in Exhibit A. The
Premises also include the
non-exclusive right to use the
Common Areas of the Property.
f. PREMISES AREA: 1) INITIAL PREMISES -
6150 Nancy Ridge Drive -
26,324 Rentable Square Feet
2) EXPANSION PREMISES -
6138 Nancy Ridge Drive -
26,324 Rentable Square Feet
g. PROPERTY: The buildings located at 6138 -
6150 Nancy Ridge Drive,
San Diego, California, the land
on which the buildings sit (the
"LAND") and all appurtenant
structures and improvements
including the parking lot, the
Common Areas and all other
driveways, sidewalks, entryways,
patios and landscaping as set
forth in Exhibit B.
h. INSURING PARTY: Landlord is the "INSURING PARTY"
unless otherwise stated herein.
i. TERM (inclusive): Commencement Dates: See P.30.
("COMMENCEMENT DATES")
Expiration Date: April 30, 2013
("EXPIRATION DATE")
j. TENANT'S SHARE OF PROPERTY:
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1) Initial Premises - 50% (26,324 sq. ft. / 52,648 sq. ft.)
2) Expansion Premises - 50% (26,324 sq. ft. / 52,648 sq. ft.)
----
100%
====
k. TENANT'S NUMBER OF NON-RESERVED PARKING SPACES:
1) Initial Premises: 85 spaces
2) Expansion Premises: 85 spaces
l. INITIAL BASE RENT:
1) Initial Premises: Twenty One Thousand Fifty Nine and 20/100
Dollars ($21,059.20) per month.
2) Expansion Premises:
a) If Expansion Premises Commencement Date occurs prior to
September 1, 2001, the Initial Base Rent for the
Expansion Premises shall be $21,059.20 through August
31, 2001, and thereafter in accordance with P.1.m.
below.
b) If Expansion Premises Commencement Date occurs on or
after September 1, 2001, the Initial Monthly Base Rent
shall be in accordance with P.1.m. below.
m. BASE RENT ADJUSTMENT:
The step adjustment provisions of P.4.b. apply for the periods
shown below:
<TABLE>
<CAPTION>
Monthly Base Rent
Periods (inclusive) Initial Premises Expansion Premises
--------------------- -------------------------------------------
<S> <C> <C>
9/1/2001 -- 8/31/2002 $21,690.98 $21,690.98*
9/1/2002 -- 8/31/2003 $22,341.71 $22,341.71
9/1/2003 -- 8/31/2004 $23,011.96 $23,011.96
9/1/2004 -- 8/31/2005 $23,702.32 $23,702.32
9/1/2005 -- 8/31/2006 $24,413.38 $24,413.38
9/1/2006 -- 8/31/2007 $25,145.79 $25,145.79
9/1/2007 -- 8/31/2008 $25,900.16 $25,900.16
9/1/2008 -- 8/31/2009 $26,677.16 $26,677.16
9/1/2009 -- 8/31/2010 $27,477.48 $27,477.48
9/1/2010 -- 8/31/2011 $28,301.80 $28,301.80
9/1/2011 -- 8/31/2012 $29,150.86 $29,150.86
9/1/2012 -- 4/30/2013 $30,025.38 $30,025.38
</TABLE>
*The timing of the commencement of monthly Base Rent for the Expansion
Premises shall occur in accordance with the provisions of P.30.b.
below.
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n. TOTAL TERM BASE RENT (assuming an exact 152 month Lease Term
for the Initial Premises and an exact 136 month Lease Term for
the Expansion Premises): $7,313,878.96.
o. PREPAID BASE RENT: $42,118.40
p. SECURITY DEPOSIT: $758,131.20 (subject to reduction as
set forth in P.6. hereof)
q. BROKER(S): CB Richard Ellis (Tenant) and Voit
Commercial Brokerage (Landlord)
r. EXHIBITS: Exhibits lettered "A"
through "D" are attached hereto and
made a part hereof.
2. PREMISES, PARKING AND COMMON AREAS
a. PREMISES. The Premises as described in P.1. and Exhibit A, are
a portion of the Buildings, herein sometimes referred to as
the "BUILDINGS" identified in P.1. The Premises, the
Buildings, the Common Areas, the land upon which the same are
located, along with all other buildings and improvements
thereon or thereunder, are herein collectively referred to as
the "PROPERTY" as described in P.1. and Exhibit B. Landlord
hereby leases to Tenant and Tenant leases from Landlord for
the Term (as defined below), at the rental, and upon all of
the conditions set forth herein, the real property referred to
in the Basic Lease Terms, P.1. as the "PREMISEs", including
rights to the Common Areas as hereinafter specified. The
Initial Premises and Expansion Premises as set forth herein
shall collectively be known as the "PREMISES". Subject to any
additional work Landlord has agreed herein to do, Tenant
hereby accepts the Premises in their condition existing as of
the date of the execution hereof, subject to all applicable
zoning, municipal, county and state laws, ordinances and
regulations governing and regulating the use of the Premises,
and accepts this Lease subject thereto and to all matters
disclosed thereby and by any exhibits attached hereto. Tenant
agrees with the square footage specified for the Premises in
P.1. and will not hereafter challenge such determination and
agreement. The rental payable by Tenant pursuant to this Lease
is not subject to revision in the event of any discrepancy in
the rentable square footage for the Premises.
b. VEHICLE PARKING. So long as Tenant is not in default, and
subject to the Rules and Regulations attached hereto as
Exhibit C, and as reasonably established by Landlord from time
to time, Tenant shall be entitled to use the number of parking
spaces set forth in P.1. If Tenant commits, permits or allows
any of the prohibited activities described in the Lease or the
Rules and Regulations then in effect, then Landlord shall have
the right, without notice, in addition to such other rights
and remedies that it may have, to remove or tow away the
vehicle involved and charge the cost to Tenant, which cost
shall be immediately payable upon demand by Landlord.
c. COMMON AREAS -- DEFINITION. The term "COMMON AREAS" is defined
as all areas and facilities outside the Premises and within
the exterior boundary line of the Property that are provided
and designated by the Landlord from time to time for the
general non-exclusive use of Landlord, Tenant and of other
tenants of the Property and their respective employees,
suppliers, shippers, customers and invitees, including but not
limited to common entrances, lobbies, corridors, stairways and
stairwells, public restrooms, elevators, parking areas to the
extent not otherwise prohibited by this Lease, loading and
unloading areas, trash areas, roadways, sidewalks, walkways,
parkways, ramps, driveways, landscaped areas and decorative
walls.
d. COMMON AREAS -- RULES AND REGULATIONS. Tenant agrees to abide
by and conform to the Rules and Regulations attached hereto as
Exhibit C with respect to the Property and Common Areas, and
to cause its employees, suppliers, shippers, customers and
invitees to so abide and conform. Landlord, or such other
person(s) as Landlord may appoint, shall have the exclusive
control and management of the Common Areas and shall have the
right, from time to time, to reasonably modify, amend and
enforce said rules and regulations, provided that any such
modifications or amendments shall not materially interfere
with Tenant's Permitted Use of the Premises, and further
provided that none of the Rules and Regulations shall be
enforced so as to materially abrogate or impair any right or
privilege expressly granted to Tenant in this Lease. Landlord
shall not be responsible to Tenant for the non-compliance with
said rules and regulations by other tenants, their agents,
employees and invitees.
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e. BUILDINGS AND COMMON AREAS -- CHANGES. Landlord shall have the
right, in Landlord's reasonable discretion, from time to time:
1) To make changes to the Buildings interior and
exterior and Common Areas, including, without
limitation, changes in the location, size, shape,
number and appearance thereof, including but not
limited to the lobbies, windows, stairways, air
shafts, elevators, restrooms, driveways, entrances,
parking spaces, parking areas, loading and unloading
areas, ingress, egress, direction of traffic,
decorative walls, landscaped areas and walkways so
long as Tenant's use and occupancy is not
unreasonably impaired thereby;
2) To close temporarily any of the Common Areas for
maintenance purposes so long as reasonable access to
the Premises remains available;
3) To designate other land and improvements outside the
boundaries of the Property to be a part of the Common
Areas, provided that such other land and improvements
have a reasonable and functional relationship to the
Property;
4) To add additional buildings and improvements to the
Common Areas, so long as such addition does not
materially impair Tenant's access to or use and
occupancy of the Premises;
5) To use the Common Areas while engaged in making
additional improvements, repairs or alterations to
the Property or any portion thereof, so long as such
use does not materially impair Tenant's quiet
enjoyment of the Premises; and
6) To do and perform such other acts and make such other
changes in, to or with respect to the Common Areas
and Property as Landlord may, in the exercise of
sound business judgment deem to be appropriate so
long as Tenant's access to or use, occupancy and
quiet enjoyment of the Premises is not unreasonably
impaired thereby.
f. ACCEPTANCE; QUIET ENJOYMENT. Landlord represents that it is
the fee simple owner of the Premises and has full right and
authority to make this Lease. Landlord hereby leases the
Premises to Tenant and Tenant hereby accepts the same from
Landlord, in accordance with the provisions of this Lease.
Landlord covenants that Tenant shall have peaceful and quiet
enjoyment of the Premises during the Term (as defined below)
of this Lease. Tenant covenants that it will not interfere
with other tenants' quiet enjoyment of their premises.
3. TERM. The term ("TERM") of this Lease is for the period that commences
at 12:01 a.m. on the Commencement Date and expires at 11:59 p.m. on the
Expiration Date. If Landlord, for any reason, cannot deliver possession
of the Premises to Tenant on or before the Commencement Date, this
Lease shall not be void or voidable, nor shall Landlord be liable to
Tenant for any loss or damage resulting from such delay. In that event,
however, there shall be an abatement of Rent (as defined below)
covering the period between the Commencement Date and the date when
Landlord delivers possession to Tenant, all other terms and conditions
of this Lease shall remain in full force and effect. If a delay in
possession is caused by Tenant's failure to perform any obligation in
accordance with this Lease, the Term shall commence as of the
Commencement Date, and there shall be no reduction of Rent between the
Commencement Date and the time Tenant takes possession.
4. RENT
a. BASE RENT. Tenant shall pay Landlord in lawful money of the
United States, without notice, demand, offset or deduction,
rent in the amount(s) set forth in P.1. which shall be payable
in advance on the first day of each and every calendar month
("BASE RENT") provided, however, the first month's Base Rent
is due and payable upon execution of this Lease. Unless
otherwise specified in writing by Landlord, all installments
of Base Rent shall be payable to Limar Realty Corp. #13,
Department #44294, P.O. Box 44000, San Francisco, California
94144-4294. Base Rent for any partial month at the beginning
or end of this Lease will be prorated in accordance with the
number of days in the subject month.
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For purposes of Section 467 of the Internal Revenue Code, the
parties to this Lease hereby agree to allocate the stated Base
Rent provided herein to the periods which correspond to the
actual Base Rent payments as provided under the terms and
conditions of this Agreement.
b. STEP INCREASE. The Base Rent shall be increased periodically
to the amounts and at the times set forth in P.1.
c. RENT WITHOUT OFFSET AND LATE CHARGE. All Rent shall be paid
without prior demand or notice and without any deduction or
offset whatsoever. All Rent shall be paid in lawful currency
of the United States of America. Tenant acknowledges that late
payment by Tenant to Landlord of any Rent will cause Landlord
to incur costs not contemplated by this Lease, the exact
amount of such cost being extremely difficult and
impracticable to ascertain. Such costs include, without
limitation, processing and accounting charges and late charges
that may be imposed on Landlord by the terms of any
encumbrance or note secured by the Premises. Therefor, if any
Rent is not received by Landlord within five (5) days of its
due date, Tenant shall pay to Landlord a late charge equal to
six percent (6%) of such overdue payment. Landlord and Tenant
hereby agree that such late charge represents a fair and
reasonable estimate of the costs that Landlord will incur by
reason of any such late payment and that the late charge is in
addition to any and all remedies available to the Landlord and
that the assessment and/or collection of the late charge shall
not be deemed a waiver of any other default. Additionally, all
such delinquent Rent or other sums, plus this late charge,
shall bear interest from the due date thereof at the lesser of
ten percent (10%) per annum or the maximum legal interest rate
permitted by law. Any payments of any kind returned for
insufficient funds will be subject to an additional handling
charge of $25.00, and thereafter for the remainder of the Term
hereof, Landlord may require Tenant to pay all future payments
of Rent or other sums due by cashier's check.
d. PREPAID BASE RENT. Upon the execution of this Lease, Tenant
shall pay to Landlord the Prepaid Base Rent set forth in P.1.,
and such Prepaid Base Rent shall be applied toward the Base
Rent due for the first month of the Term for which Base Rent
is due. Landlord shall be entitled to immediately endorse and
cash Tenant's Prepaid Base Rent.
e. RENT. The term "RENT" as used in this Lease shall refer to
Base Rent, Prepaid Base Rent, Real Property Taxes, Operating
Expenses, Insurance Costs, repairs and maintenance costs,
utilities, late charges and other similar charges payable by
Tenant pursuant to this Lease either directly to Landlord or
otherwise.
5. OPERATING EXPENSES.
a. PAYMENT BY TENANT. During the Term of this Lease, Tenant shall
pay to Landlord, as additional Rent, on a monthly basis
Tenant's Share of the Operating Expenses. To the extent that
Operating Expenses are accounted for on a building by building
basis, the Tenant's Share of Building shall apply. To the
extent that Operating Expenses are accounted for on an overall
Property basis, then Tenant's Share of Property shall apply.
b. OPERATING EXPENSES. The term "OPERATING EXPENSES" shall mean
all expenses, costs and disbursements (not specifically
excluded from the definition of Operating Expenses below) of
every kind and nature which Landlord shall pay or become
obligated to pay because of or in connection with the
ownership, maintenance, repair and operation of the Property
or any portion thereof (including all Buildings and Common
Areas of the Property). Landlord's allocation to Operating
Expenses of any cost or expense incurred for the Property in
common with other property or activity shall be conclusive, so
long as such allocation is made on a reasonable basis.
Operating Expenses shall include, but not be limited to, the
following:
1) Wages and salaries of all employees engaged in the
operation, maintenance and security of the Property,
including taxes, insurance and benefits relating
thereto, allocated in the case of employees whose
duties do not exclusively concern the Property to
reflect the proportion of working time devoted to the
Property; and the rental cost and overhead of any
office and storage space used to provide such
services.
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2) All supplies and materials used in the operation,
repair or maintenance of the Property.
3) Cost of all utilities, including surcharges, for the
Property, including the cost of water, power and
lighting which are not separately billed to and paid
for by Tenant.
4) Cost of all maintenance and service agreements for
the Property and the equipment thereon, including but
not limited to, security services, exterior window
cleaning, janitorial service, engineers, gardeners
and trash removal services.
5) All Insurance Costs, as such term is defined in P.16.
6) Cost of all repairs and general maintenance
(excluding repairs and general maintenance paid by
proceeds of insurance or by Tenant or other third
parties, and alterations attributable solely to the
other tenants of the Property).
7) A management fee for the property management of the
Property in a stipulated amount equal to three
percent (3%) of the total Rent.
8) The costs of any additional services not provided to
the Property at the Commencement Date but thereafter
provided by Landlord in its management of the
Property.
9) The cost of any capital improvements to the Property
or any part thereof which are made during the Term
hereof with such cost to be amortized over the useful
life of the improvement as reasonably determined by
Landlord.
10) Real Property Taxes, as that term is defined in P.11.
11) Assessments, dues and other amounts payable pursuant
to the CC&R's described in P.7.c.
12) All costs billed by the Sorrento Ridge Business Park
Owner's Association ("SORRENTO RIDGE ASSOCIATION")
including without limitation the cost of any common
area maintenance provided by the Sorrento Ridge
Association.
c. OPERATING EXPENSES SHALL NOT INCLUDE:
1) Costs paid for directly by Tenant or other tenants;
2) Costs incurred in connection with the financing, sale
or acquisition of the Property or any portion
thereof;
3) Costs incurred in leasing or procuring tenants
(including without limitation, lease commissions,
advertising expenses, attorneys' fees and expenses of
renovating space for tenants);
4) Executive salaries of off-site personnel employed by
Landlord except for the charge (or pro rata share) of
the property manager of the Property;
5) Subject to the provisions of P.5.b.9) above,
depreciation on the Buildings or other improvements
on the Property;
6) Legal expenses for disputes with tenants and any
other professional fees of attorneys, auditors or
consultants not incurred in connection with the
normal maintenance and operation of the Property;
7) Expenses which relate to the preparation of rental
space for tenants, including without limitation
building permit, license and inspection costs
incurred with respect to the installation or
improvements made for occupants of the Property or
incurred in renovating or otherwise
<PAGE> 7
improving, decorating, painting or decorating vacant
tenant space for the Property or other occupants of
the Property;
8) Costs incurred that are reimbursed by tenants of the
Property, including Tenant, or third parties,
including insurers;
9) Expenses for repair or replacement covered by
warranties, and any costs due to casualty that are
covered by insurance carried by Landlord;
10) Rentals and other payments by Landlord under any
ground lease or other lease underlying the Lease, and
interest, principal, points and other fees on debt or
amortization of any debt secured in whole or part by
all or any portion of the Property;
11) Repairs or replacements caused by Landlord's gross
negligence or the gross negligence of Landlord's
employees or agents;
12) Net income, franchise, capital stock, estate or
inheritance taxes or taxes which are the personal
obligation of Landlord or another tenant of the
Property;
13) Landlord's charitable or political contributions;
14) Payments to subsidiaries and affiliates of Landlord
for services to the Property for supplies or other
materials to the extent that the cost of such
services, supplies or materials exceed the cost which
would have been paid had the services, supplies or
materials been provided by unaffiliated parties on a
competitive basis (provided, however, any fee for
management services paid to an affiliate of Landlord
shall be in the amount set forth in P.5.b.7);
15) Any compensation paid to clerks, attendants or other
persons in commercial concessions operated by
Landlord;
16) Advertising and promotional expenditures;
17) Costs or repairs and other work occasioned by fire,
windstorm or other casualty of an insurable nature to
the extent covered by insurance (or to the extent the
casualty would have been insured but for a failure by
Landlord to obtain the insurance required by this
Lease);
18) Costs for sculpture, paintings or other objects of
art other than for normal and customary lobby
furnishings (nor insurance thereon or extraordinary
security in connection therewith); or
19) The cost of any item for administration and
management of the entity which constitutes Landlord
(as distinguished from costs of administration and
managing the Property), including costs of preparing
Landlord's financial statements (as opposed to
financial statements and reports for the Property)
and income tax returns, of disputes between Landlord
and its employees (if any), and of maintaining
Landlord's corporate, partnership or other entity
status.
d. EXTRAORDINARY SERVICES. Tenant shall pay within ten (10) days
of receipt of an invoice from Landlord the cost of additional
or extraordinary services provided to Tenant at Tenant's
request and not paid or payable by Tenant pursuant to other
provisions of this Lease.
e. IMPOUND. Landlord reserves the right, at Landlord's option, to
estimate the annual cost of Operating Expenses performed by
Landlord ("PROJECTED OPERATING EXPENSES") and to require same
to be paid in advance. Tenant shall pay to Landlord, monthly
in advance as additional Rent, one-twelfth (1/12) of the
Projected Operating Expenses.
f. ADJUSTMENT.
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1) ACCOUNTING. Within ninety (90) days (or as soon
thereafter as possible) after the close of each
calendar year or portion thereof of occupancy,
Landlord shall provide Tenant a statement of such
year's actual Operating Expenses compared to the
Projected Operating Expenses. If the actual Operating
Expenses are more than the Projected Operating
Expenses then Tenant shall pay Landlord, within ten
(10) business days of receipt of a bill therefor, the
difference. If the actual Operating Expenses are less
than the Projected Operating Expenses, then Tenant
shall receive a credit against future Operating
Expenses payments equal to the difference; provided,
that in the case of an overpayment for the final
lease year of the Term, Landlord shall credit the
difference against any sums due from Tenant to
Landlord in accordance with the terms of this Lease;
and if no sums are due and unpaid, shall promptly
refund the net amount to Tenant.
2) TENANT'S RIGHT TO AUDIT. Within sixty (60) days after
receipt of Landlord's statement setting forth actual
Operating Expenses (the "STATEMENT"), Tenant shall
have the right to audit at Landlord's local offices,
at Tenant's expense, Landlord's accounts and records
relating to Operating Expenses. Such audit shall be
conducted by a certified public accountant approved
by Landlord, which approval shall not be unreasonably
withheld. If such audit reveals that Landlord has
overcharged Tenant, the amount overcharged shall be
paid to Tenant within thirty (30) days after the
audit is concluded. If such audit reveals that
Landlord has undercharged Tenant, the amount of
undercharge shall be paid by Tenant to Landlord
within 30 days after the audit is conducted. In
addition, if the Statement exceeds the actual
Operating Expenses which should have been charged to
Tenant by more than six percent (6%), the cost of the
audit shall be paid by Landlord.
3) PRORATION. Tenant's liability to pay Operating
Expenses shall be prorated on the basis of a 365 (or
366, as the case may be) day year to account for any
fractional portion of a year included at the
commencement or expiration of the Term of this Lease.
4) SURVIVAL. Landlord and Tenant's obligations to pay
for or credit any increase or decrease in payments
pursuant to this P.5. shall survive this Lease.
g. FAILURE TO PAY. Failure of Tenant to pay any of the charges
required to be paid under this P.5. shall constitute a
material default and breach of this Lease and Landlord's
remedies shall be as specified in P.21.
6. SECURITY DEPOSIT. Upon execution of this Lease, Tenant shall deposit a
security deposit ("SECURITY DEPOSIT") in the amount set forth in P.1.
with Landlord in the form of an irrevocable Letter of Credit issued by
Silicon Valley Bank or other Bank reasonably acceptable to Landlord
which Letter of Credit shall be in form customarily issued by the Bank
and reasonably acceptable to Landlord. If Tenant is in default beyond
applicable notice and cure periods, Landlord can (but without any
requirement to do so) use the Security Deposit or any portion of it to
cure the default or to compensate Landlord for any damages sustained by
Landlord resulting from Tenant's default. Upon demand, Tenant shall
immediately restore the Security Deposit to its full amount. In no
event will Tenant have the right to apply any part of the Security
Deposit to any Rent due under this Lease. Landlord's obligations with
respect to the Security Deposit are those of a debtor and not a
trustee, and Landlord can commingle the Security Deposit with
Landlord's general funds. Landlord shall not be required to pay Tenant
interest on the Security Deposit. Each time the Base Rent is increased,
Tenant shall either deposit additional funds with Landlord or increase
the Letter of Credit sufficient to increase the Security Deposit to an
amount which bears the same relationship to the Base Rent as the
initial Security Deposit bore to the initial Base Rent. If Tenant is
not in default at the expiration or termination of this Lease and has
fully complied with the provisions of P.9., P.13.d.6) and P.26.,
Landlord shall authorize cancellation of the Security Deposit by
Tenant. Notwithstanding the provisions of this P.6., upon written
request by Tenant given anytime after August 31, 2002 and provided that
Tenant has not been in default under the Lease beyond any applicable
cure period, Landlord shall allow Tenant to cancel the Letter of Credit
and deposit with Landlord a reduced cash Security Deposit equivalent to
three (3) month's Base Rent.
<PAGE> 9
7. USE OF PREMISES
a. TENANT'S USE. Tenant shall use the Premises solely for the
purposes stated in P.1. and for no other purposes without
obtaining the prior written consent of Landlord. Tenant
acknowledges that neither Landlord nor any agent of Landlord
has made any representation or warranty with respect to the
Premises or with respect to the suitability of the Premises to
the conduct of Tenant's business, nor has Landlord agreed to
undertake any modification, alteration or improvement to the
Premises, except as provided in writing in this Lease. Tenant
shall promptly comply with all laws, statutes, ordinances,
orders and governmental regulations now or hereafter existing
affecting the Premises. Tenant shall not do or permit anything
to be done in or about the Premises or bring or keep anything
in the Premises that will in any way increase the premiums
paid by Landlord on its insurance related to the Premises.
Tenant will not perform any act or carry on any practices that
may injure the Premises. Tenant shall not use the Premises for
sleeping, washing clothes, or the preparation, manufacture or
mixing of anything that emits any noxious odor, or creates
excessive noises, vibrations or lights affecting such other
tenants. If, in Landlord's reasonable judgment, sound
insulation is required to muffle noise produced by Tenant on
the Premises, Tenant at its own cost shall provide all
necessary insulation. Tenant shall not do anything on the
Premises which will overload any existing parking or service
to the Premises. Pets and/or animals of any type (other than
seeing eye dogs and laboratory animals) shall not be kept on
or about the Premises. Tenant covenants that it will not
interfere with other tenants' quiet enjoyment of their
premises.
b. RULES AND REGULATIONS. Tenant shall comply with and use the
Premises in accordance with the Rules and Regulations attached
hereto as Exhibit C and to any reasonable modifications to
such Rules and Regulations as Landlord may adopt from time to
time, provided however that if any rule or regulation is in
conflict with any term, covenant or condition of this Lease,
this Lease shall prevail. In addition, no such rule or
regulation, or any subsequent amendment thereto adopted by
Landlord, shall in any material way alter, reduce or adversely
affect any of Tenant's rights or materially enlarge Tenant's
obligations under this Lease.
c. CC&R'S. Tenant agrees that this Lease is subject and
subordinate to the Covenants, Conditions and Restrictions, a
copy of which is attached hereto as Exhibit D, as they may be
amended from time --------- to time ("CC&R'S"), and further
agrees that the CC&R's are an integral part of this Lease.
Throughout the Term or any extension thereof, notwithstanding
any other provision hereof, Tenant shall faithfully and timely
assume and perform all obligations of Landlord and/or Tenant
under the CC&R's and any modifications or amendments thereto,
including the payment of any periodic or special dues or
assessments against the Premises. Such dues and assessments
shall be included within the definition of Operating Expenses
pursuant to P.5.b.11), and Tenant shall pay such amounts as
further set forth in P.5. Tenant shall hold Landlord, its
subsidiaries, shareholders, directors, officers, agents and
employees harmless and indemnify Landlord, its subsidiaries,
shareholders, directors, officers, agents and employees
against any loss, expense and damage, including attorneys'
fees and costs, arising out of the failure of Tenant to
perform or comply with the CC&R's.
8. EMISSIONS; STORAGE, USE AND DISPOSAL OF WASTE
a. EMISSIONS. Tenant shall not:
1) Knowingly permit any vehicle on the Premises or in
the Commons Areas to emit exhaust which is in
violation of any governmental law, rule, regulation
or requirement;
2) Discharge, emit or permit to be discharged or
emitted, any liquid, solid or gaseous matter, or any
combination thereof, into the atmosphere or on, into
or under the Premises, any building or other
improvements of which the Premises are a part, or the
ground or any body of water which matter, as
reasonably determined by Landlord or any governmental
entity to be in violation of law or regulation, and
does or may pollute or contaminate the same, or is,
or may become, radioactive or does, or may, adversely
affect (a) the health or safety of persons, wherever
located, whether on the Premises or anywhere else,
(b) the condition, use or enjoyment of the Premises
or any other real or personal property, whether on
the Premises or anywhere else, or (c) the Premises or
any
<PAGE> 10
of the improvements thereto including buildings,
foundations, pipes, utility lines, landscaping or
parking areas;
3) Produce, or permit to be produced, any intense glare,
light or heat in violation of law or regulations;
4) Create, or permit to be created, any sound pressure
level which will interfere with the quiet enjoyment
of any real property outside the Premises, or which
will create a nuisance or violate any governmental
law, rule, regulation or requirement;
5) Create, or permit to be created, any vibration that
is discernible outside the Premises; or
6) Transmit, receive or permit to be transmitted or
received from or to the Premises, any
electromagnetic, microwave or other radiation which
is or may be harmful or hazardous to any person or
property in, or about the Premises, or anywhere else.
Notwithstanding the provisions of this P.8,Tenant may
store and use Hazardous Materials in the ordinary
course of the Permitted Use, so long as such
Hazardous Materials are stored and used only in such
quantities as are reasonably incidental to the
Permitted Use and in strict compliance with this
Lease and all applicable governmental regulations.
b. STORAGE AND USE.
1) STORAGE. Subject to the uses permitted and prohibited
to Tenant under this Lease, Tenant shall store in
appropriate leak proof containers all solid, liquid
or gaseous matter, or any combination thereof, which
matter, if discharged or emitted into the atmosphere,
the ground or any body of water would be in violation
of law or regulation and does or may (a) pollute or
contaminate the same, or (b) adversely affect the (i)
health or safety of persons, whether on the Premises
or anywhere else, (ii) condition, use or enjoyment of
the Premises or any real or personal property,
whether on the Premises or anywhere else, or (iii)
Premises. Tenant shall store all Hazardous Materials
in compliance with applicable federal, state and
local laws, ordinance, rules or regulations
(including the conditions of any licenses and permits
obtained by Tenant in connection with such use).
2) USE. In addition, without Landlord's prior written
consent, Tenant shall not use, store or permit to
remain on or about the Premises any solid, liquid or
gaseous matter which is, or may become dangerously
radioactive. If Landlord does give its consent,
Tenant shall store the materials in such a manner
that no radioactivity will be detectable outside a
designated storage area and Tenant shall use the
materials in such a manner that (a) no real or
personal property outside the designated storage area
shall become contaminated thereby and (b) there are
and shall be no adverse effects on the (i) health or
safety of persons, whether on the Premises or
anywhere else, (ii) condition, use or enjoyment of
the Premises or any real or personal property thereon
or therein, or (iii) Premises or any of the
improvements thereto or thereon. Notwithstanding the
foregoing, Tenant may store and use radioactive
materials in the ordinary course of the Permitted
Use, so long as such radioactive materials are stored
and used only in such quantities as are reasonably
incidental to the Permitted Use and in strict
compliance with applicable federal, state and local
laws, ordinances, rules or regulations (including the
conditions of Tenant's radioactive materials
license).
3) HAZARDOUS MATERIALS. Subject to the uses permitted
and prohibited to Tenant under this Lease, Tenant
shall store, use, employ, transport and otherwise
deal with all Hazardous Materials (as defined below)
employed on or about the Premises in accordance with
all federal, state, or local law, ordinances, rules
or regulations applicable to Hazardous Materials in
connection with or respect to the Premises.
<PAGE> 11
c. DISPOSAL OF WASTE.
1) REFUSE DISPOSAL. Tenant shall not keep any trash,
garbage, waste or other refuse on the Premises except
in sanitary containers and shall regularly and
frequently remove same from the Premises. Tenant
shall keep all incinerators, containers or other
equipment used for storage or disposal of such
materials in a clean and sanitary condition.
2) SEWAGE DISPOSAL. Tenant shall properly dispose of all
sanitary sewage and shall not use the sewage disposal
system (a) for the disposal of anything except
sanitary sewage or (b) for sewage in amounts in
excess of the lesser of: (i) that reasonably
contemplated by the uses permitted under this Lease
or (ii) that permitted by any governmental entity.
Tenant shall keep the sewage disposal system free of
all obstructions and in good operating condition.
3) DISPOSAL OF OTHER WASTE. Tenant shall properly
dispose of all other waste or other matter delivered
to, stored upon, located upon or within, used on, or
removed from, the Premises in such a manner that it
does not, and will not, violate any law or regulation
and adversely affect the (a) health or safety of
persons, wherever located, whether on the Premises or
elsewhere, (b) condition, use or enjoyment of the
Premises or any other real or personal property,
wherever located, whether on the Premises or anywhere
else, or (c) Premises or any of the improvements
thereto or thereon including buildings, foundations,
pipes, utility lines, landscaping or parking areas.
d. INFORMATION. Tenant shall provide Landlord with any and all
information regarding Hazardous Materials in the Premises,
including copies of all filings and reports to governmental
entities at the time they are originated, and any other
information requested by Landlord. In the event of any
accident, spill or other incident involving Hazardous
Materials, Tenant shall immediately report the same to
Landlord and supply Landlord with all information and reports
with respect to the same. All information described herein
shall be provided to Landlord regardless of any claim by
Tenant that it is confidential or privileged.
e. COMPLIANCE WITH LAW. Notwithstanding any other provision in
this Lease to the contrary, Tenant shall comply with all laws,
statutes, ordinances, regulations, rules and other
governmental requirements now or hereafter existing in
complying with its obligations under this Lease, and in
particular, relating to the storage, use and disposal of
Hazardous Materials.
<PAGE> 12
f. INDEMNITY. Tenant hereby agrees to indemnify, defend and hold
Landlord, its agents, employees, lenders, shareholders,
directors, representatives, successors and assigns harmless
from and against any and all actions, causes of action,
losses, damages, costs, claims, expenses, penalties,
obligations or liabilities of any kind whatsoever (including
but not limited to reasonable attorneys' fees) arising out of
or relating to any Hazardous Materials employed, used,
transported across, or otherwise dealt with by Tenant (or
invitees, or persons or entities under the control of Tenant)
in connection with or with respect to the Premises and the
Property. Notwithstanding any of the provisions of this Lease,
the indemnity obligation of Tenant pursuant to this P.8.f.
shall survive the termination of this Lease and shall relate
to any occurrence as described in this P.8.f. occurring in
connection with this Lease. Landlord hereby agrees to
indemnify, defend and hold Tenant harmless from and against
any and all actions, causes of action, losses, damages, costs,
claims, expenses, penalties, obligations or liabilities of any
kind whatsoever (including reasonable attorneys' fees) arising
out of or relating to (i) Hazardous Materials employed, used,
transported to the Premises, for which the Premises are a part
thereof, by Landlord, its agents or employees or (ii)
Hazardous Materials existing on, in or under the Premises as
of the date of this Lease. For purposes of this Lease the term
"HAZARDOUS MATERIALS" shall mean any hazardous, toxic or
dangerous waste, substance or material, pollutant or
contaminant, as defined for purposes of the Comprehensive
Environmental Response, Compensation and Liability Act of 1980
(42 U.S.C. Sections 9601 et seq.), as amended, or the Resource
Conservation and Recovery Act (42 U.S.C. Sections 6901 et
seq.), as amended, or any other federal, state, or local law,
ordinance, rule or regulation applicable to the Premises, or
any substance which is toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic, or otherwise
hazardous, or any substance which contains gasoline, diesel
fuel or other petroleum hydrocarbons, polychlorinated
biphenyis (PCB's), or radon gas, urea formaldehyde, asbestos
or lead.
9. SIGNS AND COMMUNICATIONS ANTENNAE. Tenant shall not place any sign or
communications antennae upon or adjacent to the Premises, except that
Tenant may, with Landlord's prior written consent, and at Tenant's sole
cost and expense, install on the exterior of the Premises and on a
monument sign in front of the Premises (but not on the roof) such signs
as are reasonably required to indicate Tenant's company name or logo
provided such signs are in compliance with Landlord's standard sign
criteria or install communications antennae used exclusively by Tenant
provided such signs and/or communications antennae are in compliance
with all applicable governmental requirements and the CC&R's. The
installation of any sign or communications antennae on or adjacent to
the Premises by or for Tenant shall be subject to the provisions of
P.13. (Repairs and Maintenance). Tenant shall remove any sign or
communications antennae placed on or adjacent to the Premises by Tenant
upon the expiration of the Term or sooner termination of this Lease,
and Tenant shall repair any damage or injury to the Premises caused
thereby, all at Tenant's expense. If any signs or communications
antennae are not removed, or necessary repairs not made, Landlord shall
have the right to remove the signs or communications antennae and
repair any damage or injury to the Premises at Tenant's sole cost and
expense. Notwithstanding any other provision of this Lease to the
contrary, Landlord reserves all rights to the use of the roof and the
right to install and receive all revenues from the installation of such
other signs or communications antennae on the Premises, including the
roof, as do not unreasonably interfere with the conduct of Tenant's
business within the Premises.
10. PERSONAL PROPERTY TAXES. Tenant shall pay at least ten (10) days prior
to delinquency all taxes assessed against and levied upon Tenant owned
leasehold improvements, trade fixtures, furnishings, equipment and all
personal property of Tenant contained in the Premises or elsewhere.
When possible, Tenant shall cause its leasehold improvements, trade
fixtures, furnishings, equipment and all other personal property to be
assessed and billed separately from the real property of Landlord. If
any of Tenant's said personal property shall be assessed with
Landlord's real property, Tenant shall pay Landlord the taxes
attributable to Tenant within ten (10) days after receipt of a written
statement setting forth the taxes applicable to Tenant's property.
11. REAL PROPERTY TAXES
a. PAYMENT OF TAXES. Landlord shall pay the Real Property Taxes,
as defined in P.11.c., imposed or allocated exclusively to
the Property, during the Term of this Lease. Subject to
P.11.b., Tenant shall promptly reimburse Landlord according to
P.5. for Tenant's Share of Property of such Real Property
Taxes imposed on or allocated to the Property and paid by
Landlord.
<PAGE> 13
b. ADVANCE PAYMENT. In order to ensure payment when due and
before delinquency of any or all Real Property Taxes, Landlord
shall estimate the current Real Property Taxes applicable to
the Property, and require Tenant to pay monthly in advance
with the payment of the Base Rent Tenant's Share of an amount
which, over the number of months remaining before the month in
which the applicable tax installment would become delinquent,
would provide a fund large enough to fully discharge before
delinquency the estimated installment of Real Property Taxes
to be paid. When the actual amount of the applicable tax bill
is known, Landlord may, but is not required to, adjust the
amount of such equal monthly advance payment so as to provide
the funds needed to pay the applicable Real Property Taxes
before delinquency. If the amounts paid to Landlord by Tenant
under the provisions of this P.11. are insufficient to
discharge the obligations of Tenant to pay such Real Property
Taxes as the same become due, Tenant shall pay to Landlord,
upon Landlord's demand, such additional sums as are necessary
to pay such obligations. All moneys paid to Landlord under
this P.11. may be intermingled with other moneys of Landlord
and shall not bear interest.
c. DEFINITION OF "REAL PROPERTY TAXES". As used herein, the term
"REAL PROPERTY TAXES" shall include any form of real estate
tax or assessment, general, special, ordinary or
extraordinary, and any license fee, commercial rental tax,
improvement bond or bonds, levy or tax or other fee, charge,
or excise which may be imposed as a substitute for any of the
foregoing (excluding inheritance, income or estate taxes and
any franchise taxes on the privilege of maintaining Landlord's
entity status) imposed upon the Property by any authority
having the direct or indirect power to tax, including any
city, county, state or federal government, or any school,
agricultural, sanitary, fire, street, drainage or other
improvement district thereof, levied against any legal or
equitable interest of Landlord in the Property, Landlord's
right to rent or other income therefrom, and/or Landlord's
business of leasing the Property. The term "Real Property
Taxes" shall also include any tax, fee, levy, assessment or
charge, or any increase therein, imposed by reason of events
occurring, or changes in applicable law taking effect, during
the Term of this Lease, including but not limited to a change
in the ownership of the Property or in the improvements
thereon, the execution of this Lease, or any modification,
amendment or transfer thereof, and whether or not contemplated
by the parties hereto.
12. UTILITIES. Tenant shall pay for all water, gas, heat, light, power,
telephone, trash disposal and other utilities and services supplied to
the Premises, together with any taxes thereon. If any such services are
not separately metered to Tenant, Tenant shall pay that proportion
allocated to the Premises, as reasonably determined by Landlord, of all
charges jointly metered with other premises, provided, however, that if
separate meters are not installed in the Premises as of the date of
this Lease, then Tenant shall have the right to install separate meters
for all such utilities at Tenant's sole cost and expense.
13. REPAIRS AND MAINTENANCE
a. LANDLORD'S OBLIGATIONS. Landlord shall keep the Property,
including the foundation, exterior walls, roof, and Common
Areas of the Property, and the equipment whether used
exclusively for the Premises or in common with other premises,
in good condition and repair subject to reimbursement by
Tenant in accordance with P.5. There shall be no abatement of
Rent or liability to Tenant on account of any injury or
interference with Tenant's business with respect to any
improvements, alterations or repairs made by Landlord to the
Property or any part thereof.
b. TENANT'S OBLIGATIONS.
1) GENERAL. Tenant shall, at Tenant's sole cost and
expense and at all times, contract for janitorial
services and supplies, keep the Premises in good
order, condition and repair, including, without
limiting the generality of the foregoing, all
equipment or facilities serving the Premises, such as
plumbing, heating, air conditioning, ventilating,
electrical, lighting facilities, boilers, fired or
unfired pressure vessels, fixtures, interior walls,
ceilings, floors, windows, window frames, interior
and exterior doors and door frames, plate glass and
skylights. Tenant shall not cause or permit any
Hazardous Material to be spilled or released in, on,
under or about the Premises (including through the
plumbing or sanitary sewer system) and shall
promptly, at Tenant's expense, take all investigatory
and/or remedial action reasonably recommended,
whether or not formally ordered or
<PAGE> 14
required by applicable law, for the cleanup of any
contamination of, and for the maintenance, security
and/or monitoring of the Premises, the elements
surrounding same, or neighboring properties, that was
caused or materially contributed to by Tenant, or
pertaining to or involving any Hazardous Materials
and/or storage tank brought onto the Premises by or
for Tenant or under its control. Tenant, in keeping
the Premises in good order, condition and repair,
shall exercise and perform good maintenance
practices. Tenant's obligations shall include
restorations, replacements or renewals when necessary
to keep the Premises and all improvements thereon or
a part thereof in good order, condition and state of
repair.
2) CONTRACTS. Tenant shall keep a detailed preventative
maintenance schedule and log showing the frequency of
maintenance on all HVAC, mechanical, electrical and
other systems servicing the Premises and provide
Landlord with a copy of same quarterly. If Landlord
is not reasonably satisfied that Tenant's maintenance
program is adequate to maintain the heating, air
conditioning and ventilation equipment serving the
Premises ("HVAC"), then Tenant shall, at Tenant's
sole cost and expense, procure and maintain
contracts, with copies to Landlord, in customary form
and substance for, and with contractors specializing
and experienced in, the inspection, maintenance and
service of the HVAC serving the Premises.
3) AS-IS CONDITION. The parties affirm that Landlord,
its subsidiaries, officers, shareholders, directors,
agents and/or employees have made no representations
to Tenant respecting the condition of the Premises
except as specifically stated herein.
4) AMERICANS WITH DISABILITIES ACT. Tenant acknowledges
that as of the Commencement Date, the Premises may
not comply with the Americans with Disabilities Act
of 1990 ("ADA"), and that Landlord shall have no
obligation with respect to any such failure of the
Premises to so comply. Tenant shall, at its cost, at
any time during the Term as required by any
applicable governmental agency having jurisdiction
over the Premises, make such modifications and
alterations to the Premises as may be required in
order to fully comply with the provisions of the ADA,
as from time to time amended, and any and all
regulations issued pursuant to or in connection with
the ADA in such a manner as to satisfy the applicable
governmental agency or agencies requiring
remediation. Tenant shall at least thirty (30) days
prior to the commencement of any construction in
connection with satisfaction of the ADA, give written
notice to Landlord of its intended commencement of
construction together with sufficient details so as
to reasonably disclose to Landlord the nature of the
proposed construction, copies of any notices received
by Tenant from applicable governmental agencies in
connection with the ADA and such other documents or
information as Landlord may reasonably request.
c. COMPLIANCE WITH GOVERNMENTAL REGULATIONS. Tenant shall, at its
own cost and expense, promptly and properly observe and comply
with all present and future orders, regulations, directions,
rules, laws, ordinances, and requirements of all governmental
authorities (including but not limited to state, municipal,
county and federal governments and their departments, bureaus,
boards and officials) arising from the use or occupancy of, or
applicable to, the Premises or privileges appurtenant to or in
connection with the enjoyment of the Premises. Tenant shall
also comply with all such rules, laws, ordinances and
requirements at the time Tenant makes any alteration, addition
or change to the Premises.
d. MISCELLANEOUS.
1) Landlord and Tenant shall each do all acts required
to comply with all applicable laws, ordinances and
rules of any public authority relating to their
respective maintenance obligations as set forth
herein.
2) Tenant expressly waives the benefits of any statute
now or hereafter in effect which would otherwise
afford the Tenant the right to make repairs at
Landlord's expense or to terminate this Lease because
of Landlord's failure to keep the Premises and the
Property in good order, condition and repair.
Specifically, Tenant waives the provisions of
California Civil Code Sections 1941 and 1942 with
respect to Landlord's obligations for Tenant
tenantability of the Premises and Tenant's right to
make repairs and deduct the expenses of such repairs
from Rent.
<PAGE> 15
3) Tenant shall not place a load upon any floor of the
Premises which exceeds the load per square foot which
such floor was designed to carry, as determined by
Landlord or Landlord's structural engineer. The cost
of any such determination made by Landlord's
structural engineer shall be paid for by Tenant upon
demand.
4) Except as otherwise expressly provided in this Lease,
Landlord shall have no liability to Tenant nor shall
Tenant's obligations under this Lease be reduced or
abated in any manner whatsoever by reason of any
inconvenience, annoyance, interruption or injury to
business arising from Landlord making any repairs or
changes which Landlord is required to make or is
permitted to make by this Lease or by any tenant's
lease or is required by law to make in or to any
portion of the Premises. Landlord shall nevertheless
use reasonable efforts to minimize any interference
with Tenant's business in the Premises.
5) Tenant shall give Landlord prompt notice of any
damage to or defective condition in any part or
appurtenance of the Premises' mechanical, electrical,
plumbing, HVAC or other systems serving, located in
or passing through the Premises. Upon request by
Landlord, Tenant shall provide Landlord with evidence
reasonably acceptable to Landlord of service
contracts on such systems, or other evidence of
regular maintenance of such systems.
6) Upon the expiration or early termination of this
Lease, Tenant shall return the Premises to Landlord
clean and in the same condition as on the date Tenant
took possession, except for normal wear and tear and
except for alterations which Landlord has elected to
remain in the Premises pursuant to P.14. Any damage
to the Premises, including any structural damage,
resulting from Tenant's use or from the removal of
Tenant's fixtures, furnishings and equipment shall be
repaired by Tenant prior to the end of the Term at
Tenant's expense.
7) If Tenant shall fail to perform its obligations
hereunder after reasonable notice from Landlord, then
Landlord may, at Landlord's option, choose to perform
any of the Tenant's obligations in this P.13. The
cost of any such Tenant's obligations so performed by
Landlord shall be at Tenant's sole cost and expense.
Tenant shall reimburse Landlord for any such costs
incurred by Landlord in the performance of such
Tenant's obligations within ten (10) days of receipt
of a billing from Landlord.
14. ALTERATIONS. Tenant shall not make any alterations to the Premises or
the Property without Landlord's prior written consent, which consent
shall not be unreasonably withheld. Notwithstanding the foregoing,
Tenant may make non-structural alterations costing less than $25,000
per event and undertake customary laboratory rearrangement and
reconfiguration, all without Landlord's consent. Regardless of whether
Landlord's consent for alteration is required, Tenant must provide
Landlord at least fifteen (15) business days prior to the commencement
of any alteration with a complete description of each such alteration
including any building permit drawing(s) and specifications provided,
however, that with respect to minor non-structural alterations or
rearrangements costing less than $1,000 each ("MINOR ALTERATIONS"),
Tenant shall not be required to give prior notice to Landlord but shall
report all Minor Alterations to Landlord on a quarterly basis. If such
quarterly report describes Minor Alterations the cost of which exceeds
$25,000 in the aggregate for two consecutive calendar quarters, then
Landlord shall be entitled to demand thereafter prior notification of
all alterations, regardless of cost. Landlord may post notices
regarding non-responsibility in accordance with the laws of the state
in which the Premises are located. All alterations made by Tenant,
whether or not subject to the approval of Landlord, shall be performed
by Tenant and its contractors in a first class workmanlike manner and
permits and inspections shall be obtained from all required
governmental entities. Any alterations made shall remain on and be
surrendered with the Premises upon expiration or termination of this
Lease, except that Landlord may, at least thirty (30) days before the
expiration of the Term, elect to require Tenant to remove some or all
of the alterations which Tenant may have made to the Premises. If
Landlord so elects, Tenant shall at its own cost restore the Premises
to the condition designated by Landlord in its election, before the
last day of the Term or within thirty (30) days after notice of its
election is given, whichever is later. If requested by Tenant at the
time of Tenant's request for approval of alterations or improvements,
Landlord shall advise Tenant in writing whether Landlord shall require
Tenant to remove some or all of said alterations or improvements upon
expiration or termination of the Lease. Should Landlord consent in
writing to Tenant's alteration of the Premises, Tenant shall contract
with a contractor approved by Landlord for the construction of such
alterations, shall secure all appropriate governmental approvals and
permits, and shall
<PAGE> 16
complete such alterations with due diligence in compliance with plans
and specifications approved by Landlord. Tenant shall pay all costs for
such construction and shall keep the Premises free and clear of all
mechanics' liens which may result from construction by Tenant.
15. RELEASE AND INDEMNITY. As material consideration to Landlord, Tenant
agrees that Landlord shall not be liable to Tenant for any damage to
Tenant or Tenant's property from any cause, except for damages
resulting from Landlord's gross negligence or willful misconduct, and
Tenant waives all claims against Landlord for damage to persons or
property arising for any reason, except for damage resulting directly
from Landlord's breach of its express obligations under this Lease
which Landlord has not cured within a reasonable time after written
notice of such breach from Tenant. Tenant shall indemnify and hold
Landlord harmless from all damages including attorneys' fees and costs
arising out of any damage to any person or property occurring in, on or
about the Premises or Tenant's use of the Premises or Tenant's breach
of any term of this Lease.
16. INSURANCE
a. PAYMENT FOR INSURANCE. Regardless of whether the Landlord or
Tenant is the Insuring Party, Tenant shall pay for its
proportionate share of all insurance required under this P.16.
("INSURANCE COSTS") either directly or by reimbursement to
Landlord as specified in this P.16. Premiums for policy
periods commencing prior to or extending beyond the Lease Term
shall be prorated to correspond to the Lease Term. Payment
shall be made by Tenant to Landlord within thirty (30) days
following receipt of an invoice for any amount due.
b. LIABILITY INSURANCE.
1) CARRIED BY TENANT. Whether or not Tenant is the
Insuring Party, Tenant shall obtain and keep in force
during the Term of this Lease a commercial general
liability policy of insurance protecting Tenant and
Landlord (as an additional insured) against claims
for bodily injury, personal injury and property
damage based upon, involving or arising out of the
ownership, use, occupancy or maintenance of the
Premises and all areas appurtenant thereto. Such
insurance shall be on an occurrence basis providing
single limit coverage in an amount not less than
$2,000,000 per occurrence with an "Additional
Insured-Managers or Landlords of Premises"
endorsement and contain an "Amendment of the
Pollution Exclusion" for damage caused by heat, smoke
or fumes from a hostile fire. The policy shall not
contain any intra-insured exclusions as between
insured persons or organizations, but shall include
coverage for liability assumed under this Lease as an
"insured contract" for the performance of Tenant's
indemnity obligations under this Lease. The limits of
said insurance required by this Lease or as carried
by Tenant shall not, however, limit the liability of
Tenant nor relieve Tenant of any obligation
hereunder. All insurance to be carried by Tenant
shall be primary to and not contributory with any
similar insurance carried by Landlord, whose
insurance shall be considered excess insurance only.
All insurance coverage required pursuant to this
P.16. which is to name Landlord as a named insured
shall also name Landlord's subsidiaries, directors,
agents, officers and employees as named insureds.
2) CARRIED BY LANDLORD. In the event Landlord is the
Insuring Party, Landlord shall also maintain
liability insurance as described in P.16.b.1), in
addition to, and not in lieu of the insurance
required to be maintained by Tenant. In the event
Tenant is the Insuring Party, Landlord shall in
addition carry Landlord's Risk Coverage and insure
the Premises on Landlord's umbrella policy and Tenant
shall reimburse Landlord the cost thereof. Tenant
shall not be named as an additional insured therein
under any insurance obtained by Landlord in
accordance with this P.16.b.2).
c. PROPERTY INSURANCE - BUILDING, IMPROVEMENTS AND RENTAL VALUE.
1) BUILDING AND IMPROVEMENTS. The Insuring Party shall
obtain and keep in force during the Term of this
Lease a policy or policies in the name of Landlord,
with loss payable to Landlord and to the holders of
any mortgages, deeds of trust or ground leases on the
Property ("LENDER(S)"), insuring loss or damage to
the Property. The amount of such insurance shall be
equal to the full replacement cost of the Property,
as the same shall exist from time to time, or the
amount
<PAGE> 17
required by Lender(s), but in no event more than the
commercially reasonable and available insurable value
thereof if, by reason of the unique nature or age of
the improvements involved, such latter amount is less
than full replacement cost. Such policy or policies
shall insure against all risks of direct physical
loss or damage (including Boiler and Machinery
coverage and the perils of flood and earthquake),
including coverage for any additional costs resulting
from debris removal and reasonable amounts of
coverage for the enforcement of any ordinance or law
regulating the reconstruction or replacement of any
undamaged sections of the Property required to be
demolished shall also contain an agreed valuation
provision in lieu of any coinsurance clause, waiver
of subrogation and inflation guard protection causing
an increase in the annual property insurance coverage
amount by a factor of not less than the adjusted U.S.
Department of Labor Consumer Price Index for All
Urban Consumers for the city nearest to where the
Property is located. If such insurance coverage has a
deductible clause, then Tenant shall be liable for
its proportionate share of such deductible amount.
Even if Landlord is the Insuring Party, Tenant's
personal property shall be insured by Tenant under
P.16.d. rather than by Landlord.
2) RENTAL VALUE. The Insuring Party shall, in addition,
obtain and keep in force during the term of this
Lease a policy or policies in the name of Landlord,
with loss payable to Landlord and Lender(s), insuring
the loss of the full rental and other charges payable
by Tenant to Landlord under this Lease for one (1)
year (including all Real Property Taxes, Insurance
Costs and any scheduled Rent increases). Said
insurance shall provide that in the event the Lease
is terminated by reason of an insured loss, the
period of indemnity for such coverage shall be
extended beyond the date of the completion of repairs
or replacement of the Premises, to provide for one
full year's loss of Rent from the date of any such
loss. Said insurance shall contain an agreed
valuation provision in lieu of any coinsurance
clause, and the amount of coverage shall be adjusted
annually to reflect the projected Rent, Real Property
Taxes, Insurance Costs and other expenses, if any,
otherwise payable by Tenant, for the next twelve (12)
month period. Tenant shall be liable for any
deductible amount in the event of such loss.
3) ADJACENT PREMISES. If the Premises are part of a
larger building, or if the Premises are part of a
group of buildings owned by Landlord which are
adjacent to the Premises, the Tenant shall pay for
any increase in the premiums for the property
insurance of such building or buildings if said
increase is caused by Tenant's acts, omissions, use
or occupancy of the Premises.
4) TENANT'S IMPROVEMENTS. If the Landlord is the
Insuring Party, the Landlord shall not be required to
insure Tenant's personal property and leasehold
improvements unless the item in question has become
the property of Landlord under the terms of this
Lease. If Tenant is the Insuring Party, the policy
carried by Tenant under this P.16.c. shall insure
Tenant's personal property and leasehold
improvements.
d. TENANT'S PROPERTY INSURANCE. Subject to the requirements of
P.16.e., Tenant at its cost shall either by separate policy or
by endorsement to a policy already carried, maintain insurance
coverage on all of Tenant's personal property and Tenant's
leasehold improvements in, on or about the Premises similar in
coverage to that carried by the Insuring Party under P.16.c.
Such insurance shall be full replacement cost coverage with a
deductible of not to exceed $10,000 per occurrence. The
proceeds from any such insurance shall be used by Tenant for
the replacement of personal property or the restoration of
Tenant owned leasehold improvements. Tenant shall be the
Insuring Party with respect to the insurance required by
this P.16.d. and shall provide Landlord with written evidence
that such insurance is in force.
e. INSURANCE POLICIES. If Tenant is the Insuring Party, insurance
required per this P.16. shall be with companies duly licensed
to transact business in the state where the Premises are
located, and maintaining during the policy term a "General
Policyholders Rating" of at least A- X, or such other minimal
rating as may be required by Lender(s) as set forth in the
most current issue of "Best's Insurance Guide." Tenant shall
not do or permit to be done anything which shall invalidate
the insurance policies referred to in this P.16. If Tenant is
the Insuring Party, Tenant shall cause to be delivered to
Landlord certified copies of policies of such insurance or
certificates evidencing the existence and amounts of such
insurance with the insureds and loss payable clauses as
required by this Lease. No such policy shall be cancelable or
subject to modification or lapse except after thirty (30) days
prior written notice to Landlord. Tenant shall
<PAGE> 18
at least thirty (30) days prior to the expiration of such
policies, furnish Landlord with evidence of renewals or
"insurance binders" evidencing renewal thereof, or Landlord
may order such insurance and charge the cost thereof to
Tenant, which amount shall be payable by Tenant to Landlord
upon demand. If the Insuring Party shall fail to procure and
maintain the insurance required to be carried by the Insuring
Party under this P.16., the other Party may, but shall not be
required to, procure and maintain the same, but at Tenant's
expense.
f. MUTUAL WAIVER. Notwithstanding anything to the contrary
contained in this Lease, to the extent that this release and
waiver does not invalidate or impair their respective
insurance policies, the parties hereto release each other and
their respective agents, employees, officers, directors,
shareholders, successors, assignees and subtenants from all
liability for injury to any person or damage to any property
that is caused by or results from a risk which is actually
insured against pursuant to the provisions of this Lease
without regard to the negligence or willful misconduct of the
parties so released. Each party shall use its best efforts to
cause each insurance policy it obtains to provide that the
insurer thereunder waives all right of recovery by way of
subrogation as required herein in connection with any injury
or damage covered by the policy. If such insurance policy
cannot be obtained with such waiver of subrogation, or if such
waiver of subrogation is only available at additional cost and
the party for whose benefit the waiver is not obtained does
not pay such additional costs after reasonable notice, then
the party obtaining such insurance shall promptly notify the
other party of the inability to obtain insurance coverage with
the waiver of subrogation.
17. DAMAGE AND DESTRUCTION
a. DAMAGE - RESTORATION REQUIRED. In the event that the Buildings
containing the Premises are damaged by fire or other casualty
which is covered under insurance pursuant to the provisions
of P.16. above, Landlord shall with reasonable promptness
repair the damage and restore the Premises as nearly as
practicable to their previous condition provided that: (i) the
destruction of the Buildings containing the Premises does not
exceed sixty percent (60%) of the then replacement value of
the Buildings containing the Premises; (ii) the insurance
proceeds are available (inclusive of any deductible amounts)
to pay one hundred percent (100%) of the cost of restoration;
and (iii) in the reasonable judgment of Landlord, the
restoration can be completed within two hundred and seventy
(270) days after the date of the damage or casualty under the
laws and regulations of the state, federal, county and
municipal authorities having jurisdiction. The deductible
amount of any insurance coverage for damage to the Premises
shall be paid by Tenant. If such conditions apply so as to
require Landlord to restore such damage pursuant to this
P.17.a., this Lease shall continue in full force and effect,
unless otherwise agreed to in writing by Landlord and Tenant.
Tenant shall be entitled to a proportionate reduction of Rent
while such restoration takes place, such proportionate
reduction to be based on the extent to which the damage and
restoration efforts interfere with Tenant's business in the
Premises. Tenant's right to a reduction of Rent hereunder
shall be Tenant's sole and exclusive remedy in connection with
any such damage.
b. DAMAGE - RESTORATION NOT REQUIRED. In the event that the
Buildings containing the Premises are damaged by a fire or
other casualty and Landlord is not required to restore such
damage in accordance with the provisions of P.17.a.
immediately above, Landlord shall have the option to either
(i) repair or restore such damage, with the Lease continuing
in full force and effect, but Rent to be proportionately
abated as provided in P.17.a. above; or (ii) give notice to
Tenant at any time within thirty (30) days after the
occurrence of such damage terminating this Lease as of a date
to be specified in such notice which date shall not be less
than thirty (30) nor more than sixty (60) days after the date
on which such notice of termination is given. In the event of
the giving of such notice of termination, this Lease shall
expire and all interest of Tenant in the Premises shall
terminate on the date so specified in such notice and the
Rent, reduced by any proportionate reduction in Rent as
provided for in P.17.a. above, shall be paid to the date of
such termination. Notwithstanding the foregoing, if Tenant
delivers to Landlord the funds necessary to make up the
shortage (or absence) in insurance proceeds and the
restoration can be completed in a two hundred seventy (270)
day period, as reasonably determined by Landlord, and the
destruction of the Buildings containing the Premises does not
exceed sixty percent (60%) of the then replacement value,
Landlord shall restore the Premises as provided in P.17.a.
above.
c. END OF TERM CASUALTY. Notwithstanding the provisions of
P.17.a. and P.17.b. above, either Landlord or Tenant may
terminate this Lease if the Buildings containing the Premises
are damaged by fire or other
<PAGE> 19
casualty, Landlord's reasonably estimated cost of restoration
of the Buildings containing the Premises exceeds ten percent
(10%) of the then replacement value of the Buildings
containing the Premises and such damage or casualty occurs
during the last twelve (12) months of the Term of this Lease
(or the Term of any renewal option, if applicable) by giving
the other notice thereof at any time within thirty (30) days
following the occurrence of such damage or casualty. Such
notice shall specify the date of such termination which date
shall not be less than thirty (30) nor more than sixty (60)
days following the date on which such notice of termination is
given. In the event of the giving of such notice of
termination, this Lease shall expire and all interest of
Tenant in the Premises shall terminate on the date so
specified in such notice and the Rent shall be paid to the
date of such termination.
d. TERMINATION BY TENANT. In the event that the destruction to
the Buildings containing the Premises cannot be restored as
required herein under applicable laws and regulations within
two hundred thirty (230) days of the damage or casualty,
notwithstanding the availability of insurance proceeds, or if
Landlord does not, within thirty (30) days after Tenant's
written inquiry, acknowledge Landlord's obligation under this
Lease to repair and restore the damage areas, Tenant shall
have the right to terminate this Lease by giving the Landlord
notice thereof within thirty (30) days of date of the
occurrence of such casualty specifying the date of termination
which shall not be less than thirty (30) days nor more than
sixty (60) days following the date on which such notice of
termination is given. In the event of the giving of such
notice of termination, this Lease shall expire and all
interest of Tenant in the Premises shall terminate on the date
so specified in such notice and the Rent, reduced by any
proportionate reduction in Rent as provided for in P.17a.
above, shall be paid to the date of such termination.
e. RESTORATION. Landlord agrees that, in any case in which
Landlord is required to, or otherwise agrees to restore the
Buildings containing the Premises, Landlord shall proceed with
due diligence to make all appropriate claims and applications
for the proceeds of insurance and to apply for and obtain all
permits necessary for the restoration of the Buildings
containing the Premises. Landlord shall use reasonable efforts
to enforce any and all provisions in any mortgage, deed of
trust or other encumbrance on the Buildings containing the
Premises requiring Landlord and Lender to permit insurance
proceeds to be used for restoration. Landlord shall restore
the Premises at least equal to the condition existing prior to
the date of the damage if permitted by applicable law.
Landlord shall not be required to restore alterations made by
Tenant, Tenant's improvements, Tenant's trade fixtures and
Tenant's personal property, such excluded items being the sole
responsibility of Tenant to restore provided, however, that
Landlord shall, to the extent of available insurance proceeds,
restore Tenant Improvements to the Premises made by Tenant
such as interior offices, lab and production improvements and
other like improvements.
f. WAIVER. Tenant waives the provisions of Civil
CodeSection 1932(2) and Civil CodeSection 1933(4) with
respect to any destruction of the Premises.
18. CONDEMNATION
a. DEFINITIONS. The following definitions shall apply: (1)
"CONDEMNATION" means (a) the exercise of any governmental
power of eminent domain, whether by legal proceedings or
otherwise by condemnor, or (b) the voluntary sale or transfer
by Landlord to any condemnor either under threat of
condemnation or while legal proceedings for condemnation are
proceeding; (2) "DATE OF TAKING" means the date the condemnor
has right to possession of the property being condemned; (3)
"Award" means all compensation, sums or anything of value
awarded, paid or received on a total or partial Condemnation;
and (4) "CONDEMNOR" means any public or quasi-public
authority, or private corporation or individual, having power
of Condemnation.
b. OBLIGATIONS TO BE GOVERNED BY LEASE. If during the Term of the
Lease there is any Condemnation of all or any part of the
Buildings containing the Premises, the rights and obligations
of the parties shall be determined strictly pursuant to this
Lease. Each party waives the provisions of Code of Civil
Procedure Section 1265.130 allowing either party to petition
the Superior Court to terminate this Lease in the event of a
partial condemnation of the Premises.
c. TOTAL OR PARTIAL TAKING. If the Buildings containing the
Premises are totally taken by Condemnation, this Lease shall
terminate on the Date of Taking. If any portion of the
Buildings containing the Premises is
<PAGE> 20
taken by Condemnation, this Lease shall remain in effect,
except that Tenant can elect to terminate this Lease if the
remaining portion of the Premises is rendered unsuitable for
Tenant's continued use of the Premises. If Tenant elects to
terminate this Lease, Tenant must exercise its right to
terminate by giving notice to Landlord within thirty (30) days
after the nature and extent of the Condemnation have been
finally determined. If Tenant elects to terminate this Lease,
Tenant shall also notify Landlord of the date of termination,
which date shall not be earlier than thirty (30) days nor
later than ninety (90) days after Tenant has notified Landlord
of its election to terminate; except that this Lease shall
terminate on the Date of Taking if the Date of Taking falls on
a date before the date of termination as designated by Tenant.
If any portion of the Premises is taken by Condemnation and
this Lease remains in full force and effect, on the Date of
Taking the Base Rent shall be reduced by an amount in the same
ratio as the total number of square feet in the Premises taken
bears to the total number of square feet in the Premises
immediately before the Date of Taking, provided, however, that
if the Condemnation materially affects Tenant's access to the
Parking and materially reduces its parking rights, an
additional reduction in Base Rent shall be reasonably
allocated by Landlord. Any Award for the Condemnation of all
or any part of the Premises under the power of eminent domain
or any payment made under threat of the exercise of such power
shall be the property of Landlord, whether such Award shall be
made as compensation for diminution in value of the leasehold
or for the taking of the fee, or as severance damages;
provided, however, that Tenant shall be entitled to any
compensation separately awarded to Tenant for Tenant's
relocation expenses and/or loss of Tenant's trade fixtures.
19. ASSIGNMENT OR SUBLEASE
a. Tenant shall not assign or encumber its interest in this Lease
or the Premises or sublease all or any part of the Premises or
allow any other person or entity (except Tenant's authorized
representatives, employees, invitees or guests) to occupy or
use all or any part of the Premises without first obtaining
Landlord's consent, which consent shall not be unreasonably
withheld. Any assignment, encumbrance or sublease without
Landlord's prior written consent shall be voidable and at
Landlord's election, shall constitute a default.
Notwithstanding the foregoing, Landlord's consent shall not be
required for any assignment or subletting to (i) an affiliate
of Tenant, so long as such assignment or sublease is not
simply one step in a transaction through which an interest of
Tenant is or under this Lease or in the Premises is being
transferred ultimately to a person which is not an affiliate
of Tenant, or (ii) an entity occupying space within the
Premises solely in connection with joint development projects
with Tenant. If Tenant is a partnership, a withdrawal or
change, voluntary, involuntary or by operation of law of any
partner, or the dissolution of the partnership, shall be
deemed a voluntary assignment. If Tenant consists of more than
one person, a purported assignment, voluntary or involuntary
or by operation of law from one person to the other shall be
deemed a voluntary assignment. If Tenant is a corporation, any
dissolution, merger, consolidation or other reorganization of
Tenant, or sale or other transfer of a controlling percentage
of the capital stock of Tenant, or the sale of at least fifty
percent (50%) of the value of the assets of Tenant shall be
deemed a voluntary assignment. Notwithstanding the sentence
immediately above, if the Tenant is a corporation, the Tenant
shall be entitled to assign this Lease without Landlord's
prior written consent to: (i) a successor corporation related
to Tenant by merger, consolidation or non-bankruptcy
reorganization, provided that the surviving corporation in
connection with any such assignment shall have a minimum net
worth as of the date of the assignment at least equal to that
of Tenant immediately prior to completion of the subject
merger, consolidation or reorganization, (ii) a purchaser of
substantially all of Tenant's assets, provided that
immediately following such purchase, such purchaser shall have
a net worth at least equal to that of Tenant immediately prior
to the completion of the subject purchase, or (iii) a
reorganization of Tenant through the sale of all or a portion
of Tenant's Capital Stock by Initial Public Offering (an event
described in (i), (ii) or (iii) above shall be referred to as
a transfer to a "PERMITTED TRANSFEREE"). In connection with
any assignment as described in the sentence immediately above,
Landlord shall be entitled to require an increase in the
Security Deposit to the extent that such increase should be
commercially reasonable in Landlord's discretion given the
financial condition of Tenant and the assignee following such
event. Tenant shall give Landlord at least thirty (30) days
prior written notice of any intended transfer to a Permitted
Transferee and in connection with such transfer shall provide
to Landlord copies of any documents or other information as
Landlord may reasonably request. Unless otherwise expressly
agreed in writing by Landlord, no assignment shall relieve
Tenant of any of its obligations pursuant to this Lease. All
Rent received by Tenant from its subtenants in excess of the
Rent payable by Tenant to Landlord under this Lease applicable
to the portion of the Premises subleased, after deducting
<PAGE> 21
therefrom the commercially reasonable brokerage commissions,
moving allowance to subtenants, tenant improvements made at
the request of subtenants and attorneys' fees incurred by
Tenant in negotiating and documenting the sublease, shall be
deemed "BONUS RENT" and Seventy-five percent (75%) of the
Bonus Rent shall be promptly paid to Landlord, or, as the case
may be, Seventy-five percent (75%) of all sums (determined in
the same manner as Bonus Rent) to be paid by an assignee to
Tenant in consideration of the assignment of this Lease shall
be promptly paid to Landlord. Notwithstanding the foregoing,
during the first thirty six (36) months of the Term of this
Lease Tenant shall be required to pay only 50% of the Bonus
Rent to Landlord with respect to the Sublease of any portion
of the Expansion Premises. If Tenant requests Landlord to
consent to a proposed assignment or subletting, Tenant shall
pay to Landlord, whether or not consent is ultimately given,
an amount equal to Landlord's reasonable attorneys' fees and
costs incurred in connection with such request. Each request
for consent to an assignment or subletting shall be in
writing, and shall be accompanied by information as may be
relevant to Landlord's determination as to the financial and
operational responsibility and stability of the proposed
assignee or sublessee and the appropriateness of the proposed
use by such assignee or sublessee. Such information shall
include a summary of the proposed use of, and any proposed
modifications to, the Premises. Tenant shall provide Landlord
with such other or additional information and/or documentation
as may reasonably be requested by Landlord. Tenant shall, upon
completion of any assignment or subletting of all or any
portion of the Premises, immediately and irrevocably assign to
Landlord as security for Tenant's obligations under the Lease,
all Rent from any such subletting or assignment. Landlord, as
assignee and attorney in fact for Tenant, shall have the right
to collect all rent and other revenues collectable pursuant to
any such sublet or assignment and apply such rent and other
revenues towards Tenant's obligations under the Lease.
b. No interest of Tenant in this Lease shall be assignable by
involuntary assignment through operation of law (including
without limitation the transfer of this Lease by testacy or
intestacy). Each of the following acts shall be considered an
involuntary assignment: (a) if Tenant is or becomes bankrupt
or insolvent, makes an assignment for the benefit of
creditors, or institutes proceedings under the Bankruptcy Act
in which Tenant is the bankrupt; or if Tenant is a partnership
or consists of more than one person or entity, if any partner
of the partnership or other person or entity is or becomes
bankrupt or insolvent, or makes an assignment for the benefit
of creditors; or (b) if a writ of attachment or execution is
levied on this Lease; or (c) if in any proceeding or action to
which Tenant is a party, a receiver is appointed with
authority to take possession of the Premises. An involuntary
assignment shall constitute a default by Tenant and Landlord
shall have the right to elect to terminate this Lease, in
which case this Lease shall not be treated as an asset of
Tenant.
c. Notwithstanding any provision to this Lease to the contrary,
in any event where Landlord's consent is required for
assignment or sublease, Landlord may, at its option, elect to
terminate the Lease instead of approving the requested
assignment or sublease. Should Landlord so elect to terminate
this Lease, all of the obligations of the parties thereunder
shall terminate on the later of sixty (60) days following
Landlord's notice to Tenant of its election hereunder, or the
effective date of the proposed assignment or subletting sought
by the Tenant, but in no event later than one hundred twenty
(120) days following the date of Landlord's election under
this P.19.c. At the time of termination, all obligations of
both parties hereunder shall terminate as to obligations
thereafter accruing except as otherwise expressly provided in
this Lease.
20. DEFAULT. The occurrence of any of the following shall constitute a
default by Tenant: (a) a failure of Tenant to pay Rent within ten (10)
days of its due date or a failure of Tenant to pay Operating Expenses
and all other charges within ten (10) days of Tenant's receipt of
Landlord's billing for same; (b) abandonment of the Premises; or (c)
failure to timely perform any other provision of this Lease where such
failure continues for a period in excess of thirty days following
written notice of such failure, provided however, that if the nature of
such failure is such that it cannot reasonably be cured within thirty
days, then Tenant shall not be in default if Tenant commences to cure
such failure within thirty days and thereafter diligently prosecutes
the cure to completion. Tenant shall give written notice to Landlord of
any default by Landlord of its obligations pursuant to this Lease
asserted by Tenant (with a copy of such notice to any lender ("LENDER")
against the Premises whose address has been provided to Tenant for such
purpose). Landlord and Landlord's Lender shall be afforded a reasonable
opportunity to cure any claimed default by Landlord and Landlord shall
not be considered in default so long as Landlord (or Landlord's Lender)
commences such cure within a reasonable period of time and thereafter,
continues to attempt to complete such cure. Landlord, from time to
time, shall provide Tenant with the name and address of its Lender.
<PAGE> 22
21. LANDLORD'S REMEDIES. Landlord shall have the following remedies upon
and following a default by Tenant and the expiration of all applicable
cure periods. (These remedies are not exclusive; they are cumulative
and in addition to any remedies now or later allowed by law):
a. Landlord may continue this Lease in full force and effect, and
this Lease will continue in effect so long as Landlord does
not terminate Tenant's right to possession, and Landlord shall
have the right to collect Rent when due. During the period
Tenant is in default, Landlord can enter the Premises and
relet the Premises, or any part of the Premises, to third
parties for Tenant's account. Tenant shall be liable
immediately to Landlord for all costs Landlord incurs in
reletting the Premises, including without limitation, brokers'
commissions, expenses of remodeling the Premises required by
the reletting, and like costs. Reletting can be for a period
shorter or longer than the remaining Term of this Lease.
Tenant shall pay to Landlord the Rent due under this Lease on
the dates the Rent is due, less the Rent Landlord receives
from any reletting. No act by Landlord allowed by this P.21.a.
shall terminate this Lease unless Landlord notifies Tenant in
writing that Landlord elects to terminate this Lease. After
Tenant's default and for so long as Landlord does not
terminate Tenant's right to possession of the Premises, if
Tenant obtains Landlord's consent, Tenant shall have the right
to assign or sublet its interest in this Lease, but Tenant
shall not be released from liability. Landlord's consent to
such a proposed assignment or subletting shall not be
unreasonably withheld or delayed. If Landlord elects to relet
the Premises as provided in this P.21.a., Rent that Landlord
receives from reletting shall be applied to the payment of:
first, any indebtedness from Tenant to Landlord other than
Rent due from Tenant; second, all costs, including for
maintenance incurred by Landlord in reletting; and third, Rent
due and unpaid under this Lease. After deducting the payments
referred to in this P.21.a., any sum remaining from the Rent
Landlord receives from reletting shall be held by Landlord and
applied in payment of future Rent as Rent becomes due under
this Lease. In no event shall Tenant be entitled to any excess
Rent received by Landlord. If, on the date Rent is due under
this Lease, the Rent received from the reletting is less than
the Rent due on that date, Tenant shall pay to Landlord, in
addition to the remaining Rent due, all costs including for
maintenance Landlord incurred in reletting that remain after
applying the Rent received from the reletting as provided in
this P.21.a.; and
b. Landlord may terminate Tenant's right to possession of the
Premises at any time. No act by Landlord other than giving
express written notice thereof to Tenant shall terminate this
Lease. Acts of maintenance, efforts to relet the Premises, or
the appointment of a receiver on Landlord's initiative to
protect Landlord's interest under this Lease shall not
constitute a termination of Tenant's right to possession. Upon
termination of Tenant's right to possession, Landlord has the
right to recover from Tenant: (1) the Worth of the unpaid Rent
that had been earned at the time of termination of Tenant's
right to possession; (2) the Worth of the amount by which the
unpaid Rent that would have been earned after the date of
termination until the time of award exceeds the amount of the
loss of Rent that Tenant proves could have been reasonably
avoided; (3) the Worth of the amount of the unpaid Rent that
would have been earned after the award throughout the
remaining Term of the Lease to the extent such unpaid Rent
exceeds the amount of the loss of Rent that Tenant proves
could have been reasonably avoided; and (4) any other amount,
including but not limited to, reasonable expenses incurred to
relet the Premises, court costs, attorneys' fees and
collection costs necessary to compensate Landlord for all
detriment caused by Tenant's default. The "Worth", as used
above in (1) and (2) in this P.21.b. is to be computed by
allowing interest at the lesser of 18 percent per annum or the
maximum legal interest rate permitted by law. The "Worth", as
used above in (3) in this P.21.b., is to be computed by
discounting the amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of the award, plus
one percent (1%).
22. ENTRY OF PREMISES. Landlord and/or its authorized representatives shall
have the right after reasonable advance notice except for emergencies
to enter the Premises at all reasonable times for any of the following
purposes: (a) to determine whether the Premises are in good condition
and whether Tenant is complying with its obligations under this Lease;
(b) to do any necessary maintenance and to make any restoration to the
Premises that Landlord has the right or obligation to perform; (c) to
post "for sale" signs at any time during the Term, or to post "for
rent" or "for lease" signs during the last one hundred eighty (180)
days of the Term or during any period while Tenant is in default; (d)
to show the Premises to prospective brokers, agents, buyers, tenants or
persons interested in leasing or purchasing the Premises, at any time
during the Term; or (e) to repair, maintain or improve
<PAGE> 23
the Premises and to erect scaffolding and protective barricades around
and about the Premises but not so as to prevent entry to the Premises
or to unreasonably interfere with Tenant's use of the Premises and to
do any other act or thing necessary for the safety or preservation of
the Premises. Landlord shall not be liable in any manner for any
inconvenience, disturbance, loss of business, nuisance or other damage
arising out of Landlord's entry onto the Premises as provided in this
P.22, unless caused by Landlord's gross negligence or willful
misconduct. Tenant shall not be entitled to an abatement or reduction
of Rent if Landlord exercises any rights reserved in this P.22.
Landlord shall conduct its activities on the Premises as provided
herein in a commercially reasonable manner so as to minimize the
inconvenience, annoyance or disturbance to Tenant.
23. SUBORDINATION.
a. AUTOMATIC SUBORDINATION. Without the necessity of any
additional document being executed by Tenant for the purpose
of effecting a subordination, and at the election of Landlord
or Landlord's Lender, this Lease shall be subject and
subordinate at all times to (i) all ground leases or
underlying leases which may now exist or hereafter be executed
affecting the Premises, (ii) the lien of any mortgage or deed
of trust which may now exist or hereafter be executed
affecting the Premises, and (iii) the lien of any mortgage or
deed of trust which may hereafter be executed in any amount
for which the Premises, ground leases or underlying leases, or
Landlord's interest or estate in any of said items is
specified as security. In the event that any ground lease or
underlying lease terminates for any reason or any mortgage or
deed of trust is foreclosed or a conveyance in lieu of
foreclosure is made for any reason, Tenant shall,
notwithstanding any subordination, attorn to and become the
Tenant of the successor in interest (including without
limitation to Lender) to Landlord ("SUCCESSOR"). In connection
with any such termination of a ground lease or underlying
lease or any foreclosure or conveyance in lieu of foreclosure
made in connection with any mortgage or deed of trust, then so
long as Tenant is not in default after all applicable notice
and cure periods pursuant to this Lease, Tenant shall not be
disturbed in its possession of the Premises or in the
enjoyment of its rights pursuant to this Lease during the Term
of this Lease or any extension or renewal thereof.
Notwithstanding any subordination of this Lease to the lien of
any mortgage or deed of trust, the Lender, at any time, shall
be entitled to subordinate the lien of its mortgage or deed of
trust to this Lease by filing a notice of subordination in the
County in which the Premises are located, and Lender shall
agree in connection with any such filing, that Tenant shall
not be disturbed in its possession of the Premises so long as
Tenant is not in default after all applicable notice and cure
periods pursuant to this Lease. In connection with any such
filing, Tenant shall be obligated to attorn to and to become a
Tenant of any Successor.
b. ADDITIONAL SUBORDINATION. From time to time at the request of
Landlord, Tenant covenants and agrees to execute and deliver
within ten (10) business days following the date of written
request from Landlord, documents evidencing the priority or
subordination of this Lease with respect to any ground lease
or underlying lease or the lien of any mortgage or deed of
trust in connection with the Premises. Any and all such
documents shall be in such form as is reasonably acceptable to
the Lender(s). Any subordination agreement so requested by
Landlord shall provide for Tenant to attorn to the Successor
and shall further provide that Tenant shall not be disturbed
in its possession of the Premises or in the enjoyment of its
rights pursuant to this Lease so long as Tenant is not in
default after all applicable notice and cure periods with
respect to its obligations pursuant to the Lease. Any such
Subordination, Non-disturbance and Attornment Agreement shall
be recorded in the official records of the office of the
County Recorder in the County in which the Premises is
located.
c. NOTICE FROM LENDER. Tenant shall be entitled to rely upon any
notice given by a Lender in connection with the Premises
requesting that Tenant make all future Rent payments to such
Lender, and Tenant shall not be liable to Landlord for any
payment made to such Lender in accordance with such notice.
Notwithstanding any provision to the contrary of this Lease, a
Successor shall not be (i) obligated to recognize the payment
of Rent for a period of more than one month in advance; (ii)
responsible for liabilities accrued pursuant to this Lease
prior to the date ("SUCCESSION DATE") upon which the Successor
becomes the "Landlord" hereunder; (iii) responsible to cure
defaults of the Landlord pursuant to this Lease existing as of
the Succession Date, except for defaults of a continuing
nature of which Successor received notice (as provided in
P.20.) and in respect of which Tenant afforded Successor a
reasonable cure period following such notice; (iv) responsible
for any Security Deposit delivered by Tenant pursuant to this
Lease not actually received by the Successor; or (v) bound by
any execution, modification, termination or
<PAGE> 24
extension of this Lease or any grant of a purchase option or
right of first refusal or any other action taken by the
Landlord pursuant to this Lease, except in accordance with the
provisions of an assignment of leases executed by Landlord in
favor of a Lender.
24. ESTOPPEL CERTIFICATE; TENANT FINANCIAL STATEMENTS. Tenant, at any time
and from time to time, upon not less than ten (10) business days
written notice from Landlord, will execute, acknowledge and deliver to
Landlord and, at Landlord's request, to any existing or prospective
purchaser, ground lessor or mortgagee of any part of the Premises, a
certificate of Tenant stating: (a) that Tenant has accepted the
Premises (or, if Tenant has not done so, Tenant has not accepted the
Premises and specifying the reasons therefor); (b) the Commencement and
Expiration Dates of this Lease; (c) that this Lease is unmodified and
in full force and effect (or, if there have been modifications, that
same is in full force and effect as modified and stating the
modifications); (d) whether or not to the best of Tenant's knowledge
there are then existing any defenses against the enforcement of any of
the obligations of Tenant under this Lease (and, if so, specifying
same); (e) whether or not to the best of Tenant's knowledge there are
then existing any defaults by Landlord in the performance of its
obligations under this Lease (and, if so, specifying same); (f) the
dates, if any, to which the Rent and other charges under this Lease
have been paid; (g) whether or not there are Rent increases during the
Lease Term and if so the amount of same; (h) whether or not the Lease
contains any options or rights of first offer or first refusal; (i) the
amount of any Security Deposit or other sums due Tenant; (j) the
current notice address for Tenant; and (k) any other information that
may reasonably be required by any of such persons. It is intended that
any such certificate of Tenant delivered pursuant to this P.24. may be
relied upon by Landlord and any existing or prospective purchaser,
ground lessor or mortgagee of the Buildings containing the Premises.
Tenant agrees, at any time upon request by Landlord, to deliver to
Landlord the most recent financial statements of Tenant with an opinion
from a certified public accountant, if available, including a balance
sheet and profit and loss statement for the most recent prior three
years, all prepared in accordance with generally accepted accounting
principles consistently applied. Landlord agrees to hold such financial
statements confidential and to share them only with prospective lenders
and purchasers of the Premises. Other than for prospective lenders and
purchasers, Landlord shall not request financial statements more often
than twice in any calendar year.
25. WAIVER. No delay or omission in the exercise of any right or remedy by
Landlord shall impair such right or remedy or be construed as a waiver.
No act or conduct of Landlord, including without limitation, acceptance
of the keys to the Premises, shall constitute an acceptance of the
surrender of the Premises by Tenant before the expiration of the Term.
Only written notice from Landlord to Tenant shall constitute acceptance
of the surrender of the Premises and accomplish termination of the
Lease. Landlord's consent to or approval of any act by Tenant requiring
Landlord's consent or approval shall not be deemed to waive or render
unnecessary Landlord's consent to or approval of any subsequent act by
Tenant. Any waiver by Landlord of any Default must be in writing and
shall not be a waiver of any other Default concerning the same or any
other provision of the Lease.
26. SURRENDER OF PREMISES. Upon expiration of the Term, Tenant shall
surrender to Landlord the Premises and all tenant improvements and
alterations in the same condition as existed at the Commencement Date,
except for ordinary wear and tear and alterations which Tenant has the
right or is obligated to remove under the provisions of P.14. herein.
Tenant shall remove all personal property including, without
limitation, all wallpaper, paneling and other decorative improvements
or fixtures and shall perform all restoration made necessary by the
removal of any alterations or Tenant's personal property before the
expiration of the Term, including, for example, restoring all wall
surfaces to their condition as of the Commencement Date. Landlord can
elect to retain or dispose of in any manner Tenant's personal property
not removed from the Premises by Tenant prior to the expiration of the
Term. Tenant waives all claims against Landlord for any damage to
Tenant resulting from Landlord's retention or disposition of Tenant's
personal property. Tenant shall be liable to Landlord for Landlord's
reasonable cost for storage, removal and disposal of Tenant's personal
property.
27. HOLDOVER. If Tenant with Landlord's consent remains in possession of
the Premises after expiration of the Term or after the date in any
notice given by Landlord to Tenant terminating this Lease, such
possession by Tenant shall be deemed to be a month to month tenancy
cancelable by either party on thirty (30) days written notice given at
any time by either party and all provisions of this Lease, except those
pertaining to Term, renewal options and Base Rent, shall apply and
Tenant shall thereafter pay monthly Base Rent computed on a per-month
basis, for each month or part thereof (without reduction for any
partial month) that Tenant remains in possession,
<PAGE> 25
in an amount equal to one hundred fifty percent (150%) of the Base Rent
that was in effect for the last full calendar month immediately
preceding expiration of the Term.
If Tenant holds over after the expiration or earlier termination of the
Term hereof, without the consent of Landlord, Tenant shall become a
Tenant at sufferance only with a continuing obligation to pay Rent
provided that the Base Rent shall be one hundred fifty percent (150%)
of the Base Rent that was in effect for the last full calendar month
immediately preceding expiration of the Term for the first thirty (30)
days of such holdover, and two hundred percent (200%) of such Base Rent
thereafter during the pendency of such holdover. Acceptance by Landlord
of Rent after expiration or earlier termination of the Term shall not
constitute a consent to a holdover hereunder or result in a renewal.
The foregoing provisions of this P.27. are in addition to and do not
affect Landlord's right of re-entry or any rights of Landlord hereunder
or as otherwise provided by law. If Tenant fails to surrender the
Premises upon the expiration of this Lease despite demand to do so by
Landlord, Tenant shall indemnify and hold Landlord harmless from all
loss or liability arising out of such failure, including without
limitation, any claim made by any succeeding tenant founded on or
resulting from such failure to surrender. No provision of this P.27.
shall be construed as implied consent by Landlord to any holding over
by Tenant. Landlord expressly reserves the right to require Tenant to
surrender possession of the Premises to Landlord as provided in this
Lease upon expiration or other termination of this Lease. The
provisions of this P.27. shall not be considered to limit or
constitute a waiver of any other rights or remedies of Landlord
provided in this Lease or at law.
28. NOTICES. All notices, demands, or other communications required or
contemplated under this Lease, including any notice delivered to Tenant
by the Lender, shall be in writing and shall be delivered either by
receipted courier service, or by the United States Postal Service,
first class registered or certified mail, postage prepaid, return
receipt requested, at the address for notices set forth in P.1. A
notice shall only be deemed to have been duly given upon the date of
actual delivery or attempted delivery, as evidenced by receipt. Either
Tenant or Landlord may change the address to which notices are to be
given to such party hereunder by giving written notice of such change
of address to the other in accordance with the notice provisions
hereof.
29. TENANT IMPROVEMENTS. Landlord shall deliver the Premises in its current
"as is" condition and Tenant, at Tenant's sole cost and expense, shall
cause to be installed in the Premises additional tenant improvements,
subject to Landlord's prior written approval of the final scope of work
(the "APPROVED Work"). Tenant agrees to spend at least $1,500,000 for
Approved Work by August 31, 2002 and provide Landlord by said date with
written evidence of such expenditures. Landlord acknowledges and agrees
that it shall not unreasonably withhold, delay or condition its
approval of tenant improvements to build-out the Premises as a biotech
facility provided that the type of improvements and the quality of
construction are reasonably consistent with the other biotech
facilities located in San Diego County, California. Landlord shall have
the right to approve all of Tenant's proposed contractors and
subcontractors relating to the installation of the Approved Work.
Tenant shall have the right to access the Premises upon full execution
and delivery of the Lease for the purpose of installing the Approved
Work (the "CONSTRUCTION PERIOD") provided, however, Tenant shall be
bound by the terms and conditions of the Lease during the Construction
Period except for Tenant's obligation to pay Base Rent or Operating
Expenses.
30. COMMMENCEMENT DATES.
a. INITIAL PREMISES COMMENCEMENT DATE. The Term of the Lease (and
the commencement of Rent) as to the Initial Premises shall
commence on the earliest to occur of (i) commencement of
occupancy of the Initial Premises by Tenant's personnel, (ii)
substantial completion of the Approved Work in the Initial
Premises as determined by the building architect, or (iii)
September 1, 2000.
b. EXPANSION PREMISES COMMENCEMENT DATE. The Term of the Lease
(and the commencement of Rent) as to the Expansion Premises
shall commence upon the delivery of the Expansion Premises to
Tenant, which delivery shall occur no sooner than June 1, 2001
and no later than January 1, 2002.
31. OPTION(S) TO RENEW.
a. GRANT OF OPTION(S). Tenant shall have the right, at its
option, to extend the Lease for two (2) period(s) of five (5)
years each ("EXTENDED TERM(S)") on an "as is" basis for the
Initial Premises and the Expansion Premises on an "all or
none" basis commencing at the expiration of the previous Term,
provided that at
<PAGE> 26
the time of exercise and at the time of commencement of each
Extended Term, Tenant is not in default beyond any applicable
cure period under this Lease.
b. EXERCISE OF OPTION(S). If Tenant decides to extend the Lease
for an Extended Term, Tenant shall give written notice to
Landlord of its election to extend not less than twelve (12)
months prior to the expiration of the previous Term. Tenant's
failure to give timely notice to Landlord of Tenant's election
to extend shall be deemed a waiver of Tenant's right to
extend. The terms and conditions applicable to each Extended
Term shall be the same terms and conditions contained in this
Lease except that Tenant shall not be entitled to any further
option to extend beyond the second Extended Term. The Base
Rent for each Extended Term shall be as determined in
accordance with P.31.c.
c. DETERMINATION OF BASE RENT DURING THE EXTENDED TERM(S).
1) AGREEMENT ON INITIAL BASE RENT. Landlord shall not be
obligated to provide Tenant with the proposed fair
market rental value until three (3) months prior to
the expiration of the previous Term. Landlord and
Tenant shall have thirty (30) days after Landlord
provides the proposed fair market rental value in
which to agree on the Base Rent during each Extended
Term, which shall be the fair market rental value of
the Premises during said Extended Term. The fair
market rental value of the Premises during said
Extended Term shall be based on the uses of the
Premises permitted under this Lease, the quality,
size, design and location of the Premises, and the
rental value for lease renewals or extensions of
comparable size, quality and location and shall
include annual CPI or similar periodic adjustments.
If Landlord and Tenant agree on the Base Rent for
each Extended Term during the thirty (30) day period,
they shall immediately execute an amendment to this
Lease stating the new Base Rent.
2) SELECTION OF APPRAISERS. If Landlord and Tenant are
unable to agree on the Base Rent (including any
periodic adjustments) for the subject Extended Term
within the thirty (30) day period, then within ten
(10) days after the expiration of the thirty (30) day
period and provided that Tenant has timely exercised
the subject renewal option in accordance with
P.31.b., Landlord and Tenant each at its own cost and
by giving notice to the other party, shall appoint a
competent and disinterested real estate appraiser
with at least five (5) years full-time commercial
appraisal experience in the Silicon Valley market
area to appraise the fair market rental value of the
Premises and set the Base Rent (including periodic
adjustments) during said Extended Term. If either
Landlord or Tenant does not appoint an appraiser
within said ten (10) days, the single appraiser
appointed shall be the sole appraiser and shall set
the Base Rent (including periodic adjustments) during
said Extended Term. If two (2) appraisers are
appointed by Landlord and Tenant as stated herein,
they shall meet promptly and attempt to set the Base
Rent for said Extended Term. If the two (2)
appraisers are unable to agree within thirty (30)
days after the second appraiser has been appointed,
they shall attempt to select a third appraiser
meeting the same qualifications within ten (10) days
after the last day the two (2) appraisers are given
to set the Base Rent (including periodic
adjustments). If they are unable to agree on the
third appraiser, either Landlord or Tenant, by giving
ten (10) days' notice to the other party, can apply
to the then President of the Real Estate Board or to
the Presiding Judge of the Superior Court of the
County in which the Premises are located, for the
selection of a third appraiser who meets the
qualifications stated herein. Landlord and Tenant
each shall bear one-half (-1/2) of the cost of
appointing the third appraiser and of paying the
third appraiser's fee. The third appraiser, however
selected, shall be a person who has not previously
acted in any capacity for either Landlord or Tenant,
or their affiliates.
3) VALUE DETERMINED BY THREE (3) APPRAISERS. Within
thirty (30) days after the selection of the third
appraiser, a majority of the appraisers shall set the
Base Rent (including periodic adjustments) for each
Extended Term. If a majority of the appraisers are
unable to set the Base Rent (including periodic
adjustments) within the stipulated period of time,
Landlord's appraiser shall arrange for simultaneous
exchange of written appraisals from each of the
appraisers and the three (3) appraisals shall be
added together and their total divided by three (3);
the resulting quotient shall be the Base Rent
(including periodic adjustments) for the Premises
during each Extended Term. If, however, the low
appraisal and/or the high appraisal are/is more than
fifteen
<PAGE> 27
percent (15%) lower and/or higher than the middle
appraisal, such low appraisal and/or high appraisal
shall be disregarded. If only one (1) appraisal is
disregarded, the remaining two (2) appraisals shall
be added together and their total divided by two (2);
the resulting quotient shall be the Base Rent for the
Premises (including periodic adjustments) during each
Extended Term. If both the low appraisal and the high
appraisal are disregarded as stated in this
P.31.c.3), the middle appraisal shall be the Base
Rent (including periodic adjustments) for the
Premises during each Extended Term.
d. MINIMUM BASE RENT LEVEL. Notwithstanding any other provision
of this Lease, in no event shall the initial Base Rent for the
subject Extended Term be less than the Base Rent prevailing
immediately prior to the expiration of the previous Term.
32. MISCELLANEOUS PROVISIONS.
a. TIME OF ESSENCE. Time is of the essence of each provision of
this Lease.
b. SUCCESSOR. This Lease shall be binding on and inure to the
benefit of the parties and their successors, except as
provided in P.19.
c. LANDLORD'S CONSENT. Any consent required by Landlord under
this Lease must be granted in writing and may be withheld or
conditioned by Landlord in its sole and absolute discretion
unless otherwise provided.
d. PERSONAL RIGHTS. Notwithstanding any other provision(s) of
this Lease to the contrary, any provisions of this Lease
providing for the renewal, extension or early termination of
the Lease and/or for the expansion of the Premises (to include
without limitation rights to negotiate, rights of first
refusal, etc.) shall be (i) personal to the original Tenant
and shall not be assignable or otherwise transferable other
than to a Permitted Transferee (either voluntarily or
involuntarily) to any third party for any reason whatsoever,
and (ii) conditioned upon Tenant not then being in default
under this Lease.
e. COMMISSIONS. Each party represents that it has not had
dealings with any real estate broker, finder or other person
with respect to this Lease in any manner, except for the
Broker(s) identified in P.1., who shall be compensated by
Landlord in accordance with the separate agreement between
Landlord and the Broker(s).
f. OTHER CHARGES; LEGAL FEES. If Landlord becomes a party to any
litigation concerning this Lease or the Premises by reason of
any act or omission of Tenant or Tenant's authorized
representatives, Tenant shall be liable to Landlord for
reasonable attorneys' fees and court costs incurred by
Landlord in the litigation. Should the court render a decision
which is thereafter appealed by any party thereto, Tenant
shall be liable to Landlord for reasonable attorneys' fees and
court costs incurred by Landlord in connection with such
appeal.
If either party commences any litigation against the other
party or files an appeal of a decision arising out of or in
connection with the Lease, the prevailing party shall be
entitled to recover from the other party reasonable attorneys'
fees and costs of suit. If Landlord employs a collection
agency to recover delinquent charges, Tenant agrees to pay all
collection agency and attorneys' fees charged to Landlord in
addition to Rent, late charges, interest and other sums
payable under this Lease.
g. LANDLORD'S SUCCESSORS. In the event of a sale or conveyance by
Landlord of the Buildings containing the Premises, the same
shall operate to release Landlord from any liability under
this Lease, including as to any Security Deposit to the extent
transferred to Landlord's successor-in-interest, and in such
event Landlord's successor in interest shall be solely
responsible for all obligations of Landlord under this Lease.
h. INTERPRETATION. This Lease shall be construed and interpreted
in accordance with the laws of the state in which the Premises
are located. This Lease constitutes the entire agreement
between the parties with respect to the Premises, except for
such guarantees or modifications as may be executed in writing
by the parties from time to time. When required by the context
of this Lease, the singular shall include the plural,
<PAGE> 28
and the masculine shall include the feminine and/or neuter.
"Party" shall mean Landlord or Tenant. If more than one person
or entity constitutes Landlord or Tenant, the obligations
imposed upon that party shall be joint and several. The
enforceability, invalidity or illegality of any provision
shall not render the other provisions unenforceable, invalid
or illegal.
i. AUCTIONS. Tenant shall not conduct, nor permit to be
conducted, either voluntarily or involuntarily, any auction
upon the Premises without first having obtained Landlord's
prior written consent. Notwithstanding anything to the
contrary in this Lease, Landlord shall not be obligated to
exercise any standard of reasonableness in determining whether
to grant such consent.
j. QUIET POSSESSION. Upon payment by Tenant of the Rent for the
Premises and the observance and performance of all of the
covenants, conditions and provisions on Tenant's part to be
observed and performed under this Lease, Tenant shall have
quiet possession of the Premises for the entire Term hereof
subject to all of the provisions of this Lease.
k. CONFLICT. Any conflict between the printed provisions of this
Lease and the typewritten or handwritten provisions shall be
controlled by the typewritten or handwritten provisions,
provided such typewritten or handwritten provisions are
initialed by the parties hereto.
l. OFFER. Preparation of this Lease by Landlord or Landlord's
agent and submission of same to Tenant shall not be deemed an
offer to lease to Tenant. This Lease is not intended to be
binding until executed by all parties hereto.
m. AMENDMENTS. This Lease may be modified only in writing, signed
by the Parties in interest at the time of the modification.
The parties shall amend this Lease from time to time to
reflect any adjustments that are made to the Base Rent or
other Rent payable under this Lease. As long as they do not
materially increase Tenant's obligations hereunder or
materially interfere with Tenant's use of the Premises for the
Permitted Use, Tenant agrees to make reasonable non-monetary
modifications to this Lease as may be reasonably required by
Lender(s) in connection with the obtaining of normal financing
or refinancing of the property of which the Premises are a
part.
n. CONSTRUCTION. The Landlord and Tenant acknowledge that each
has had its counsel review this Lease, and hereby agree that
the normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation of this Lease or
in any amendments or exhibits hereto.
o. CAPTIONS. Article, section and paragraph captions are not a
part hereof.
p. EXHIBITS. For reference purposes the Exhibits are listed
below:
Exhibit A: The Premises
Exhibit B: The Property
Exhibit C: Rules and Regulations
Exhibit D: Covenants, Conditions And Restrictions
LIMAR REALTY CORP. #13, ARENA PHARMACEUTICALS, INC.,
A CALIFORNIA CORPORATION A DELAWARE CORPORATION
By: /s/ Theodore H. Kruttschnitt By: /s/ Jack Lief
Name: Theodore H. Kruttschnitt Name: Jack Lief
Title: President Title: President & CEO
Date: Date:
<PAGE> 29
By: /s/ Theodore H. Kruttschnitt By: /s/ Richard P. Burgoon, Jr.
Name: Theodore H. Kruttschnitt Name: Richard P. Burgoon, Jr.
Title: Secretary Title: Senior Vice President,
Operations, General Counsel
and Secretary
Date: Date:
