<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to ___________________
Commission file number 0-15847
SEQUUS PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-3031834
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
960 Hamilton Court, Menlo Park, CA 94025
(Address of principle executive offices)
(415) 323-9011
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
At May 02, 1996 the number of outstanding shares of the Company's common stock,
par value $.001, was 28,715,783.
<PAGE> 2
SEQUUS PHARMACEUTICALS, INC.
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page No.
-------
<S> <C> <C>
ITEM 1. Condensed Financial Statements (unaudited)
Condensed Balance Sheets
March 31, 1996 and December 31, 1995................ 1
Condensed Statements of Operations for the
Three Months Ended March 31, 1996 and 1995.......... 2
Condensed Statements of Cash Flows for the
Three Months Ended March 31, 1996 and 1995.......... 3
Notes to Condensed Financial Statements ............ 5
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations....... 7
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K.................... 18
Signature........................................................ 19
</TABLE>
i
<PAGE> 3
SEQUUS PHARMACEUTICALS, INC.
CONDENSED BALANCE SHEETS
(in thousands except par value)
(unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
--------- -----------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 5,863 $ 6,770
Short-term marketable investments 39,144 43,506
Trade accounts receivable 2,473 1,642
Inventories 1,982 1,105
Prepaid expenses and other current assets 529 949
--------- ---------
Total Current Assets 49,991 53,972
Equipment and improvements, net 3,693 3,591
Other assets 249 245
--------- ---------
Total Assets $ 53,933 $ 57,808
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 1,800 $ 2,773
Accrued compensation 1,521 2,310
Accrued clinical costs 1,754 1,664
Other accrued liabilities 865 746
Deferred revenue 358 716
--------- ---------
Total Current Liabilities 6,298 8,209
Stockholders' Equity:
Preferred stock, par value $.01 -- 4
Common stock, par value $.001 29 26
Additional paid-in capital 186,668 182,996
Accumulated deficit (139,062) (133,427)
--------- ---------
Total Stockholders' Equity 47,635 49,599
--------- ---------
Total Liabilities and Stockholders' Equity $ 53,933 $ 57,808
========= =========
</TABLE>
See accompanying notes to condensed financial statements.
1
<PAGE> 4
SEQUUS PHARMACEUTICALS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(in thousands except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------
1996 1995
-------- --------
<S> <C> <C>
Revenues:
Net Sales $ 4,457 $ 884
Royalties and fees
37 8
------- -------
Total Revenues 4,494 892
Expenses:
Cost of goods sold 531 195
Research and development 5,929 5,482
Selling, general and administrative 4,458 4,441
------- -------
Total Expenses 10,918 10,118
Net interest and other income 647 61
Net Loss $(5,777) $(9,165)
======= =======
Net loss per common share $ (0.21) $ (0.48)
======= =======
Common and common equivalent
shares used in calculation of net loss per share 27,911 19,123
======== =======
</TABLE>
See accompanying notes to condensed financial statements.
2
<PAGE> 5
SEQUUS PHARMACEUTICALS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------
1996 1995
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (5,777) $ (9,165)
Adjustment to reconcile net loss to net cash
used by operating activities:
Depreciation and amortization 533 486
Decrease (increase) in assets:
Trade accounts and interest receivable (831) 197
Inventories (877) (90)
Prepaid expenses and other current assets 420 10
Other assets (30) (3)
Increase (decrease) in liabilities:
Accounts payable (973) (483)
Accrued compensation (789) 2,274
Accrued clinical costs 90 (419)
Other accrued liabilities 119 754
Deferred revenue (358) --
-------- --------
Net cash used by operating activities (8,473) (6,439)
-------- --------
Cash flows from investing activities:
Available-for-sale securities:
Purchases (21,915) (313)
Sales 25,217 --
Maturities 1,202 5,534
Capital expenditures (609) (83)
-------- --------
Net cash provided by investing activities 3,895 5,138
-------- --------
Cash flows from financing activities:
Sale of common stock 3,671 254
Sale of preferred stock -- 10,033
-------- --------
Net cash provided by financing activities 3,671 10,287
-------- --------
Net increase (decrease) in cash and cash equivalents $ (907) $ 8,986
carried forward) -------- --------
</TABLE>
See accompanying notes to condensed financial statements.
3
<PAGE> 6
SEQUUS PHARMACEUTICALS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
----------------------
1996 1995
------- -------
<S> <C> <C>
Net increase (decrease) in cash and cash equivalents
(brought forward) $ (907) $ 8,986
Cash and cash equivalents at beginning of the period 6,770 5,448
------- -------
Cash and cash equivalents at end of the period $ 5,863 $14,434
------- -------
Supplemental disclosures of cash flow information:
Cash paid during the period for interest $ -- $ --
------- -------
</TABLE>
See accompanying notes to condensed financial statements.
4
<PAGE> 7
SEQUUS PHARMACEUTICALS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
March 31, 1996
(unaudited)
1. BASIS OF PRESENTATION
SEQUUS Pharmaceuticals, Inc. ("SEQUUS" or the "Company") is engaged in
the development, manufacture, marketing and sale of proprietary
liposome and lipid-based products primarily to treat cancer and certain
fungal infections. SEQUUS' strategic emphasis is on injectable
pharmaceutical products designed to improve the efficacy and reduce the
toxicity of selected existing and new drugs used to treat cancer and
infectious diseases.
In the opinion of management, the accompanying unaudited condensed
financial statements of SEQUUS contain all adjustments (consisting of
only normal recurring adjustments) necessary to present fairly the
financial position as of March 31,1996, and the results of operations
and cash flows for the three months ended March 31, 1996 and 1995 in
accordance with generally accepted accounting principles.
These condensed financial statements should be read in conjunction with
the Company's audited financial statements for the year ended December
31, 1995, which were filed with the Securities and Exchange Commission
on Form 10-K.
Although the nature of the business is not seasonal, the results of
operations for the interim periods presented are not necessarily
indicative of the results to be expected for the full year.
2. CASH AND CASH EQUIVALENTS AND MARKETABLE INVESTMENTS
The Company invests its excess cash principally in government
securities and high-grade investment paper. The Company maintains its
cash, cash equivalents and investments in several different instruments
with various banks and brokerage houses. The diversification of risk is
consistent with Company policy to maintain liquidity and ensure the
safety of principal.
Management determines the appropriate classification of debt securities
at the time of purchase and reevaluates such designation as of each
balance sheet date. At March 31, 1996, all investments are classified
as available-for-sale securities and are carried at fair value, with
the unrealized gains and losses reported as a component of accumulated
deficit. The amortized cost of debt securities in this category is
adjusted for amortization of premiums and accretion of discounts to
maturity. Such amortization is included in interest income. Realized
gains and losses and declines in value judged to be other than
temporary on available-for-sale securities are included in net interest
and other income. The cost of securities sold is based on the specific
identification method. Interest and dividends on securities classified
as available-for-sale are included in interest income.
5
<PAGE> 8
The following is a summary of available-for-sale securities:
<TABLE>
<CAPTION>
As of March 31, 1996 Amortized Gross Unrealized Estimated
----------------
Cost Gains Losses Fair Value
---- ----- ------ ----------
(in thousands)
<S> <C> <C> <C> <C>
United States government securities ...... $ 23,134 $142 ($22) $23,254
United States corporate securities ....... $ 11,869 $ 42 $ 0 $11,911
Foreign debt securities .................. $ 9,974 $ 4 ($ 2) $ 9,976
-------- ---- --- -------
$ 44,977 $188 ($24) $45,141
======== ==== ==== =======
<CAPTION>
As of December 31, 1995 Amortized Gross Unrealized Estimated
----------------
Cost Gains Losses Fair Value
---- ----- ------ ----------
(in thousands)
<S> <C> <C> <C> <C>
United States government securities ...... $ 20,234 $ 15 ($10) $20,239
United States corporate securities ....... $ 10,314 8 -- $10,322
Foreign debt securities .................. $ 12,936 9 -- $12,945
-------- --- --- -------
$ 43,484 $ 32 ($10) $43,506
======== ==== === ======
</TABLE>
The gross realized gains and losses on sales of available-for-sale
securities were immaterial for the quarters ended March 31, 1996 and
1995. As of March 31, 1996 the average portfolio duration was
approximately 109 days.
3. INVENTORIES
Inventories are stated at the lower of cost (principally first-in,
first-out) or market. The inventory detail at March 31, 1996 and
December 31, 1995 is as follows:
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
---- ----
(in thousands)
<S> <C> <C>
Raw materials ........... $ 839 $ 898
Work-in-process ......... 641 68
Finished goods .......... 502 139
------ ------
$1,982 $1,105
====== ======
</TABLE>
4. STOCKHOLDERS' EQUITY
During the first quarter of 1996, the Company received proceeds of
approximat ely $3,672,000 from the exercise of warrants and stock
options. O f this, approximately $3,000,000 was due to the exercise of
warrants to purchase approximately 700,000 shares of Common Stock at
$4.25 per share. These warrants were acquired by investors in a private
placement financing in March 1991. Exercisable warrants for an
additional 500,000 shares of Common Stock, which expire in March 1997,
remain outstanding from the March 1991 private placement.
In February 1996, the Company gave notice to investors in a March 1995
private placement of the conversion to Common Stock of 480,000 shares
of Series A Convertible Reset ("Preferred Stock"). Each Preferred Share
was converted into 3.367 shares of Common Stock (rounded down to the
nearest whole share). As of March 31, 1996, 48,000 shares of Preferred
Stock remained outstanding.
6
<PAGE> 9
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The statements in this report that relate to future plans, events or performance
are forward-looking statements. Actual results, events or performance may differ
materially due to a variety of factors, including the factors described under
"Factors That May Affect Future Results, Events or Performance" below. Readers
are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date hereof. The Company undertakes no obligation to
publicly release the result of any revisions to these forward-looking statements
that may be made to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.
Overview
The Company is a leader in the development, manufacture, marketing and
sale of liposome and lipid-based biopharmaceutical products primarily to treat
cancer and certain fungal infections. In November 1995, SEQUUS received
marketing clearance from the FDA for its proprietary anticancer drug, DOXIL(R)
(doxorubicin HCI liposome injection), for the treatment of AIDS patients with
Kaposi's sarcoma ("KS") whose KS has progressed on prior chemotherapy or in
patients who are intolerant to such therapy. In December 1995, the Company
launched DOXIL in the U.S. SEQUUS recently received a unanimous opinion from
the European Committee for Proprietary Medicinal Products ("CPMP") recommending
marketing authorization of DOXIL under the tradename CAELYX, in the 15 member
states of the European Union ("EU"), for both first-line and second-line
treatment of AIDS-KS in patients with low CD4 counts and extensive
mucocutaneous or visceral disease. AMPHOTEC(TM) (amphotericin B colloidal
dispension), the Company's proprietary product for treatment of
life-threatening systemic fungal infections, is being marketed in Denmark,
Finland, Ireland, Russia, Singapore and the U.K. and has also received
marketing clearance in Brazil, the Czech Republic, the Netherlands and Sweden
for treating systemic fungal infections in patients for whom conventional
therapy (amphotericin B) is contraindicated due to toxicity or renal failure or
for whom previous antifungal therapy was not successful.
The Company has incurred losses in each year since its inception and had
accumulated approximately $139.2 million in net losses through March 31, 1996,
including a loss of $5.8 million in the first quarter of 1996. Although the
Company has commenced marketing DOXIL in the U.S. and AMPHOTEC in the U.K. and
five other countries, the Company expects operating losses to continue because
of expenditures associated with research, preclinical testing and clinical
trials, marketing expenses and other expenses relating to the development,
manufacture, marketing and sale of its products. If the Company elects to expand
clinical trials for additional indications of DOXIL, research and development
spending will increase in 1996.
In the fourth quarter of 1995 and the first quarter of 1996, SEQUUS
recognized revenue from initial shipments of DOXIL to distributors based upon
evidence of sell-through. The Company expects its marketing and sales expenses
to increase significantly as it proceeds with the commercialization of DOXIL in
the U.S. through its direct sales and marketing organization. As of March 31,
1996, SEQUUS had a sales force of 24 individuals experienced in the sale of
pharmaceutical and biopharmaceutical products, with particular emphasis on
oncology. A competitor of the Company recently received approval from the FDA
for the use of a liposomal anthracycline formulation as first-line therapy for
AIDS-KS and has also received approval for the same indication in four European
countries. The approvals could have an adverse effect on the market penetration
of DOXIL. The Company currently uses Ben Venue Laboratories, Inc., a contract
manufacturer, for the commercial-scale manufacturing of its products.
7
<PAGE> 10
The Company and Zeneca Pharmaceuticals ("Zeneca"), a multinational
pharmaceutical company, have submitted MAAs for AMPHOTEC in other EU countries
and similar applications in other countries. On September 13, 1995, the CPMP
reviewed the Company's application for AMPHOTEC marketing approval in the EU
countries. Germany, France, Spain, Greece and Luxembourg did not accept the
MAAs. Based primarily on the CPMP review, SEQUUS believes national approval will
be forthcoming in Austria, Italy and Portugal. However, there can be no
assurance that approvals will be forthcoming on a timely basis, or at all. In
addition, the CPMP review indicates that Belgium can approve AMPHOTEC for
marketing upon the receipt of additional clinical information, although there
can be no assurance that the Company will be able to provide additional data or,
if provided, that approval will be forthcoming on a timely basis, or at all. If
approvals are received, SEQUUS and Zeneca may negotiate pricing in each of these
countries, which the Company believes would take as long as six to 12 months or
longer following market approval. A competitor of the Company has regulatory
approval in approximately 20 countries, primarily in Europe, to sell a liposomal
amphotericin B product which targets indications similar to those targeted by
AMPHOTEC. Another competitor introduced its liposomal amphotericin B product as
the third entrant in the U.K. market at a price substantially below the price of
the other lipid-based antifungals. This product was also recently launched in
the United States. This competition could have an adverse effect on AMPHOTEC's
market penetration and pricing in both Europe and, if marketing clearance is
obtained, in the United States.
In August 1993, the Company signed a distribution agreement with Zeneca
under which Zeneca will market and sell AMPHOTEC in most European countries. In
March 1994, SEQUUS and Zeneca announced the expansion of their August 1993
agreement to cover all countries not previously covered with the exception of
the United States, Canada, Japan and selected small markets. Sales of AMPHOTEC
to date have been below expectations and Zeneca and the Company have initiated
discussions regarding modifications to their agreement.
The Company is evaluating various product distribution arrangements that
could affect near-term and long-term financial performance.
Results of Operations
Three Months Ended March 31, 1996 and 1995
Revenues
Total revenues, most of which were product sales, were $4.5 million, during
the three month period ended March 31, 1996 compared with $0.9 million recorded
during the three month period ended March 31, 1995. DOXIL product sales
represent 91% of total product sales in the three month period ended March 31,
1996 compared to 0% in the same period of 1995. For the three month period ended
March 31, 1995, most of the Company's product sales represent sales of AMPHOTEC
to Zeneca. Modest shipments of product were made to Zeneca in the first quarter
of 1996 and the Company anticipates only limited sales to Zeneca for the
foreseeable future.
Operating Expenses
The Company's gross margin increased to 88.1% of net sales in the three
month period ended March 31, 1996 from 77.9% of net sales in the three month
period ended March 31, 1995. The increase in gross margin was due to higher
margins for DOXIL sales in the U.S. where the Company currently markets directly
to the customer. The Company anticipates that the gross margin on net sales will
not change materially in the second quarter. In the three month period ended
March 31, 1995, the net sales were primarily AMPHOTEC sales to Zeneca which
markets the product to the customer.
8
<PAGE> 11
Generally, a majority of the Company's operating expenses are incurred for
research and development ("R&D"), including preclinical testing and clinical
trials required for new pharmaceutical products. The principal items of R&D
expense are personnel costs, costs of clinical trials, clinical production and
supplies. R&D increased to $5.9 million in the three month period ended March
31, 1996, from $5.5 million in 1995, an increase of $0.4 million. This increase
is due to a general overall increase in expenses. If the Company elects to
expand clinical trials for additional indications of DOXIL, R&D expenses may
continue to increase.
Selling, general and administrative ("SG&A") expenses increased to $4.5
million in the three month period ended March 31, 1996 from $4.4 million in the
same period in 1995, an increase of $0.1 million. SG&A expenses in the three
month period ended March 31, 1995 included accrued expenses in connection with
termination of the employment of certain officers. Disregarding these accrued
expenses, SG&A expenses increased significantly in the three month period ended
March 31, 1996 principally reflecting an increase in marketing and sales
expenses related to the expansion of the sales force to market DOXIL in the U.S.
The Company has a sales force of 24 individuals experienced in the sale of
pharmaceutical and biopharmaceutical products and additional internal staff to
support sales operations.
Net Interest Income
Net interest income increased to $0.7 million in the three month period
ended March 31, 1996 from $0.1 million in the same period of 1995, an increase
of $0.6 million due to the increase in cash available for investment from the
proceeds of the Company's public offering of Common Stock in the fourth quarter
of 1995.
Net Loss
The Company's net loss decreased to $5.8 million for the three month period
ended March 31, 1996 from $9.2 million for the same period of 1995, a decrease
of $3.4 million. The net loss per share was $0.21 for the the three month period
ended March 31, 1996 compared to $0.48 in the same period of 1995. However, the
number of weighted shares outstanding at March 31, 1996 were 27,911,000 as
compared to 19,123,000 at March 31, 1995. The decrease in the net loss was due
to the increase in net sales of DOXIL and an increase in interest income
partially offset by modest growth in total operating expenses.
Liquidity and Capital Resources
The Company's cash and cash equivalents and marketable investments at March
31, 1996 were $45.0 million, a decrease of $5.3 million from $50.3 million at
December 31, 1995. This decrease represents principally cash provided by option
and warrant exercises offset by cash used by operations and capital
expenditures. During the three month period ended March 31, 1996, the Company
received approximately $3.7 million from the exercise of warrants and stock
options. Of this, approximately $3.0 million was due to the exercise of warrants
to purchase approximately 700,000 shares of Common Stock at $4.25 per share.
These warrants were acquired by investors in a private placement financing in
March 1991. Exercisable warrants for an additional 500,000 shares of SEQUUS
Common Stock, which expire in March 1997, remain outstanding from the March 1991
private placement. In February 1996, the Company gave notice to investors in a
March 1995 private placement of the conversion to Common Stock of 480,000 shares
of Series A Convertible Reset Preferred Stock. Each share of Preferred Stock was
converted into 3.367 shares of Common Stock (rounded down to the nearest whole
share). The conversion was completed in April 1996.
9
<PAGE> 12
The Company's strategy has been to fund from its own cash resources the
preclinical and clinical development of two of its proprietary products, DOXIL
and AMPHOTEC and the continued research and development of additional STEALTH
liposome products. This strategy requires significant operating and capital
expenditures including the possible construction of a pilot production facility
which is currently in the planning phase.
The Company believes that at planned spending rates its existing cash
balances, interest income earned thereon and revenues from operations will be
adequate to fund its planned activities at least through at least the next 12
months, although it may seek additional financing sooner. There can be no
assurance that adequate financing will be available on satisfactory terms, if at
all.
Factors That May Affect Future Results, Events or Performance
SEQUUS wishes to caution readers that the following important factors,
among others, may affect the Company's future results, events or performance and
could cause actual results, events or performance to differ materially from
those expressed in any forward-looking statements made by the Company in this
report or presented elsewhere by the Company from time to time.
Uncertainty of Market Acceptance
The Company has only received limited revenues from the sales of its
products and only has limited experience in marketing its products. A number of
factors may limit the market acceptance of AMPHOTEC, DOXIL and any other
products developed by the Company, including the timing of regulatory approval
and market entry relative to competitive products, the availability of alternate
therapies, the price of the Company's products relative to alternative
therapies, the availability of third-party reimbursement and the extent of
marketing efforts by third-party distributors or agents retained by the Company.
Until quite recently, no therapeutic product based on liposome or lipid-based
technology was commercially available in the United States. As a result,
unanticipated side effects or unfavorable publicity concerning any product
incorporating liposome or lipid-based technologies could have an adverse effect
on the Company's ability to obtain physician, patient or third-party payor
acceptance and to sell the Company's products. There can be no assurance of the
Company's ability, or the length of time required, to achieve commercialization
of the Company's products or that physicians, patients or third-party payors
will accept liposome products or any of the Company's products as readily as
traditional forms of medication or at all.
Uncertainty of Product Development
The development of new pharmaceutical products is subject to a number of
significant risks. Potential products that appear to be promising at various
stages of development may not receive regulatory approval, reach the market or
achieve widespread use for a number of reasons. For example, DOXIL is being
clinically tested in various types of solid tumors. Although the Company
believes that preliminary results suggest activity in some but not all of these
tumors, these results are not conclusive nor are they predictive of future
results. Moreover, even when a drug does demonstrate activity, this does not
mean that it will prove sufficiently effective to be better than existing
therapies. The reasons for a product not being successful include the
possibilities that the potential products will be found insufficiently effective
or unduly toxic during preclinical testing or clinical trials, fail to receive
necessary regulatory approvals, be difficult to manufacture on a large scale, be
uneconomical to market or not achieve market acceptance, be inferior or
significantly later to market than competing products or be precluded from
commercialization by proprietary rights of third parties.
10
<PAGE> 13
There are a number of challenges the Company must address successfully to
develop commercial products in each of its development programs. The Company's
potential products will require significant additional research and development
efforts, including process development and significant additional clinical
testing, prior to any commercial use. There can be no assurance that the Company
will successfully address any of these technological challenges, or others that
may arise in the course of development. In addition, the Company may not have
sufficient resources to commercialize new products successfully.
Successful product development requires, among other things, the design and
completion of clinical trials. The rate of completion of the Company's clinical
trials is dependent upon, among other factors, the rate of patient enrollment.
Patient enrollment is a function of many factors, including the size of the
patient population, the nature of the protocol, the Company's ability to manage
the clinical trial, the proximity of patients to clinical sites and the
eligibility criteria for the study. Several factors, such as delays in planned
patient enrollment may result in increased costs and delays, or termination of
clinical trials prior to completion, which could have a material adverse effect
on the Company's business, financial condition and results of operations.
Competition
The drugs being developed by the Company compete with existing and new
drugs being created by pharmaceutical, biopharmaceutical and biotechnology
companies. Many of these companies, as well as university-related entities, both
in the United States and abroad are developing products based on improved drug
delivery technologies as well as novel therapeutics for the treatment of cancer,
infectious diseases and other indications targeted by the Company. Some of these
companies are active in the development of liposome and lipid-based research and
product development and many have financial and technical resources and
production and marketing capabilities substantially greater than those of the
Company. In addition, many of these companies have significantly greater
experience than the Company in preclinical and clinical development activities
and in obtaining regulatory approval to manufacture and market biopharmaceutical
products.
The Company's two principal competitors in liposomal drug delivery are
NeXstar Pharmaceuticals, Inc. ("NeXstar") and The Liposome Company ("TLC"), both
of which have received regulatory approval for products competitive with the
Company's products. NeXstar recently received approval from the FDA with respect
to its liposome-based daunorubicin product (a liposomal anthracycline
formulation) for use in first-line therapy of KS patients and has also received
approval for the same indication in four European countries. DOXIL has been
approved and is being marketed in the U.S. as a second-line treatment for
AIDS-KS and has been recommended for approval in the 15 E.U. countries for both
first-line and second-line therapy of AIDS-KS (see "DOXIL Regulatory Status"). A
NeXstar liposomal amphotericin B product has been on the market in Europe since
1989 and has achieved substantial market share as compared to the limited market
penetration achieved to date by the Company's lipid-based amphotericin B
product, AMPHOTEC. In late 1995, TLC launched its lipid-based amphotericin B
product in the U.S. The Company's NDA for AMPHOTEC is under review by the FDA.
TLC also received approval for its amphotericin B product in several European
countries and has additional MAAs pending.
SEQUUS believes that competition in all pharmaceutical products and in all
forms of drug delivery will continue to be intense. There can be no assurance
that other pharmaceutical companies will not develop more effective therapeutics
or drug delivery technologies than those of the Company or will not market and
sell their products more effectively than the Company.
Uncertainty of Pharmaceutical Pricing and Reimbursement
The Company's business may be materially adversely affected by the
continuing efforts of worldwide governmental and third-party payors to contain
or reduce the costs of health care in general and drugs in particular. For
example, in most foreign markets, including markets the Company is seeking to
enter, pricing of prescription pharmaceuticals is subject to government pricing
control. In these markets, once
11
<PAGE> 14
marketing approval is received, pricing negotiation could take as long as
another six to 12 months or longer. In the United States, there has been, and
the Company expects that there will continue to be, a number of federal and
state proposals to implement similar government pricing control. In addition, an
increasing emphasis on managed care and consolidation of hospital purchasing in
the United States has and will continue to put pressure on pharmaceutical
pricing. Such proposals, if adopted, and such initiatives could decrease the
price that the Company receives for any products it may develop and sell in the
future and thereby have a material adverse effect on the Company's business,
financial condition and results of operations. Further, to the extent that such
proposals or initiatives have a material adverse effect on pharmaceutical
companies that are collaborators or prospective collaborators for certain of the
Company's potential products, the Company's ability to commercialize its
potential products may be materially adversely affected. In addition, price
competition may result from competing product sales, attempts to gain market
share or introductory pricing schemes, which would have a material adverse
effect on the Company's business, financial condition and results of operations.
The Company's ability to commercialize biopharmaceutical products may
depend in part on the extent to which reimbursement for such products and
related treatments will be available from government health administration
authorities, private health insurers and other third-party payors. Significant
uncertainty exists as to the reimbursement status of newly approved health care
products, and third-party payors are increasingly challenging the prices charged
for medical products and services. There can be no assurance that any third-
party insurance coverage will be available to patients for any products
developed by the Company. Government and other third-party payors are
increasingly attempting to contain health care costs by limiting both coverage
and the level of reimbursement for new therapeutic products, and by refusing, in
some cases, to provide coverage for off-label uses of approved products, i.e.,
uses for indications as to which the FDA has not granted marketing approval.
Moreover, reimbursement may be denied even for FDA-approved indications. If
adequate coverage and reimbursement levels are not provided by the government
and third-party payors for the Company's products, the Company's business,
financial condition and results of operations would be materially adversely
affected.
No Assurance of Regulatory Approvals
The production and marketing of the Company's products are subject to
rigorous manufacturing requirements, preclinical testing and clinical trials and
approval by the FDA, by comparable agencies in other countries and by state
regulatory authorities prior to marketing. The process of conducting clinical
trials and obtaining regulatory approval for a product typically takes a number
of years and involves substantial expenditures. In addition, product approvals
may be withdrawn or limited for noncompliance with regulatory standards or the
occurrence of unforeseen problems following initial marketing. The Company has
received regulatory approval in the United States for the commercial sale of
only one of its products. The Company may encounter significant delays or
excessive costs in its efforts to secure and maintain necessary approvals or
licenses. Future federal, state, local or foreign legislative or administrative
acts could also prevent or delay regulatory approval of the Company's or its
licensees' products. There can be no assurance that the Company will be able to
obtain or maintain the necessary approvals for manufacturing or marketing the
Company's products for current or expanded indications or that the data it
obtains in clinical trials will be sufficient to establish the safety and
efficacy of its products. Even if the Company obtains regulatory approval for
any particular product, there can be no assurance that it will be economically
feasible for the Company to commercialize such product. In addition,
identification of certain side effects after a drug is on the market or the
occurrence of manufacturing problems could cause subsequent withdrawal of
approval, reformulation of the drug, additional preclinical testing or clinical
trials, and changes in labeling of the product. Failure to obtain or maintain
requisite governmental approvals, failure to obtain approvals of the clinically
intended uses or the identification of side effects could delay or preclude the
Company from further developing particular products or from marketing its
products, or could limit the commercial use of its products, which would have a
material adverse effect on the Company's business, financial condition and
results of operations.
12
<PAGE> 15
DOXIL Regulatory Status
In November 1995, SEQUUS received marketing clearance from the FDA for use
of DOXIL in the treatment of AIDS-KS patients whose KS has progressed on prior
chemotherapy or in patients who are intolerant to such therapy. In December
1995, the Company launched DOXIL in the U.S., using its own marketing and sales
force. The marketing clearance was provided in accordance with the FDA's
procedures for Accelerated Approval of New Drugs for Serious or Life-Threatening
Illnesses. Accelerated approval regulations require that an applicant study an
investigational drug following product launch to verify and describe the drug's
clinical benefit. The FDA has acknowledged the Company's commitment to a
post-marketing clinical trial designed to meet accelerated approval
requirements. Under FDA accelerated approval regulations, the FDA may withdraw
approval following product launch if the Company fails to show due diligence in
conducting a post-marketing clinical trial or if this clinical trial fails to
demonstrate clinical benefit to the FDA's satisfaction. There can be no
assurance that the Company will be able to conduct a satisfactory post-marketing
clinical trial.
In February 1996, the Company received a unanimous opinion from the
European CPMP recommending marketing authorization for DOXIL under the tradename
CAELYX, in the 15 member states of the EU, for both first-line and second-line
treatment of AIDS-KS in patients with low CD4 counts and extensive mucocutaneous
or visceral disease. Prior to product launch, the Brussels-based European
Commission will formally issue the license to market the SEQUUS product. In
addition, the Company will enter into pricing discussions with the appropriate
agencies in those countries where pricing approval is required. There can be no
assurance that the European Commission will issue the license in a timely manner
or that the Company will be able to negotiate a satisfactory price for DOXIL in
the EU countries.
AMPHOTEC Regulatory Status
SEQUUS has received marketing approval for AMPHOTEC in Brazil, Denmark, the
Czech Republic, Finland, Ireland, the Netherlands, Russia, Singapore, Sweden and
the U.K. for treating systemic fungal infections in patients for whom
conventional amphotericin B is contraindicated due to toxicity or renal failure
or for whom previous antifungal therapy was unsuccessful. The Company and Zeneca
have submitted MAAs for AMPHOTEC in other EU countries and similar applications
in other countries. On September 13, 1995, the CPMP reviewed the Company's
application for product marketing approval. Germany, France, Spain, Greece and
Luxembourg did not accept the MAAs. Subsequently, the Company and Zeneca have
withdrawn the application in Germany. Based primarily on the CPMP review, SEQUUS
believes national approvals will be forthcoming in Austria, Italy and Portugal.
However, there can be no assurance that approvals will be forthcoming on a
timely basis, or at all. In addition, the CPMP review indicates that Belgium can
approve AMPHOTEC for marketing upon the receipt of additional clinical
information, although there can be no assurance that the Company will be able to
provide additional data or, if provided, that approval will be forthcoming on a
timely basis, or at all. If approvals are received, SEQUUS and Zeneca may
negotiate pricing in each of these countries, which the Company believes will
take as long as six to 12 months or longer following marketing approval.
In November 1995, the Company submitted to the FDA an NDA for AMPHOTEC
based upon certain data from open label clinical trials, which was accepted for
filing in January 1996. There can be no assurance that the FDA will determine
that the Company's NDA provides sufficient evidence of safety and efficacy in
humans to support FDA approval or that the NDA will be approved on a timely
basis, or at all.
Dependence on Third-Party Distributor and Agents; Limited Marketing and Sales
Experience
In 1995, a substantial portion of the Company's product revenues came from
sales either to a third-party distributor (Zeneca) or through third-party
agents. For the fiscal year ended December 31, 1995, 41% of the Company's
product sales represent sales of AMPHOTEC to Zeneca as compared to 91% for 1994.
A significant portion of these sales of AMPHOTEC reflect pipeline-filling
(inventory) orders. The
13
<PAGE> 16
Company did not ship any AMPHOTEC to Zeneca in 1995 after the first quarter. One
shipment of product was made in the first quarter of 1996, which represented
approximately 4% of sales, and the Company anticipates only limited sales to
Zeneca for the foreseeable future. The level of the Company's future sales of
AMPHOTEC to Zeneca will depend upon the rate at which the product penetrates the
existing approved markets of Brazil, the Czech Republic, Denmark, Ireland,
Finland, the Netherlands, Russia, Singapore, Sweden and the U.K., as well as the
timing of additional approvals in other countries, if any. Sales of AMPHOTEC to
date have been below expectations, and Zeneca and the Company have initiated
discussions regarding modifications to their agreement.
The Company expects to market and sell its products directly, or possibly
co-promote them with strategic partners, in the U.S. In this regard, SEQUUS
currently employs a sales and marketing team of 24 professionals to market
DOXIL, which the Company may expand if marketing clearance is obtained for
AMPHOTEC. This group is experienced in the sale of pharmaceutical and
biotechnology products to physicians, hospitals and clinics, including managed
care providers, and in facilitating reimbursement with third-party payors. The
Company intends to increase the size of this staff if warranted. Developing such
a marketing and sales organization will require significant additional
expenditures, management resources and time. The Company has limited experience
marketing and selling its products. In addition, the loss of certain key sales
personnel would delay and adversely affect the sales effort and would have a
material adverse effect on the Company's business, financial condition and
results of operations. There can be no assurance that the Company will be able
to implement its marketing plan successfully. If the Company enters into any
marketing partnerships in the United States, such as those currently under
consideration, this would significantly reduce the Company's margins on these
products. There can be no assurance that the Company will be able to establish
such a marketing and sales organization successfully or manage its marketing
organization successfully.
Product Liability
Testing, manufacturing, marketing and use of the Company's products will
entail substantial risk of product liability. The Company currently maintains
product liability insurance in an amount of $5.0 million per occurrence and $5.0
million in the aggregate. A single product liability claim could exceed the $5.0
million coverage limit, and there is a possibility of multiple claims. There can
be no assurance that the amount of insurance the Company has obtained against
the risk of product liability will be adequate, that the amount of such
insurance can be renewed or that the amount and scope of any coverage obtained
will be adequate to protect the Company in the event of a successful product
liability claim. The Company's business could be materially adversely affected
by one or more successful product liability claims.
In addition, with respect to the sale of DOXIL in the U.S., the Company
believes it has significantly greater risk in connection with product liability
claims due to the greater frequency of lawsuits and higher claims paid in courts
in the U.S. as opposed to most other countries. The Company is required by
governmental regulations to test its products even after they have been sold and
used by patients. As a result of such tests, the Company may be required to, or
may determine that it should, recall products when most of such products have
already been sold. Such later testing and product recalls may increase the
Company's potential exposure to product liability claims.
Dependence on Third-Party Manufacturer; Manufacturing Risks
The Company's present internal manufacturing capabilities are limited to
producing products for preclinical development. The Company is dependent on Ben
Venue, a United States-based contract manufacturer, to manufacture
commercial-scale quantities of AMPHOTEC and DOXIL pursuant to supply agreements.
Under these agreements the Company has agreed to indemnify Ben Venue against
certain liabilities. As of February 1996, the Company and Ben Venue have
manufactured 18 commercial-scale batches of DOXIL, including the three
registration batches which are required as part of the FDA's
14
<PAGE> 17
NDA approval process. There can be no assurance that Ben Venue will continue to
meet FDA or product specification standards or that the Company's manufacturing
goals can be met in a consistent and timely manner. There is only a limited
number of other manufacturers with the capability of manufacturing AMPHOTEC and
DOXIL, and any alternative manufacturer would require regulatory qualification
to manufacture the product which would likely take several months.
The Company has not qualified alternative manufacturers for its products.
In the event of any interruption of supply from the contract manufacturer due to
regulatory or other causes, there can be no assurance that the Company could
make alternative manufacturing arrangements on a timely basis, if at all. Such
an interruption would have a material adverse effect on the Company's business,
financial condition and results of operations.
The Company relies on certain suppliers of key raw materials to provide an
adequate supply of such materials for production of finished products. Certain
materials are purchased from single sources. In particular, amphotericin B and
doxorubicin are currently each supplied to the Company by single sources, and
the number of alternative sources is severely limited. For example, the Company
has a five-year, sole-source supply agreement with Meiji Seika Pharma
International, Ltd. to supply the Company with doxorubicin for DOXIL. There can
be no assurance that the doxorubicin supplied under the agreement will meet FDA
requirements applicable to DOXIL, which could delay or prevent future sales of
DOXIL, if any, by the Company. Although the Company has supply agreements in
place with the suppliers of its key raw materials, the number of alternative
qualified suppliers of key raw materials required for the manufacture of
AMPHOTEC and DOXIL is limited. The disqualification or loss of a sole source
supplier could have a material adverse effect on the Company because of a delay
or inability in obtaining and qualifying an alternate supplier and the costs
associated with such delay and in finding and qualifying an alternate supplier.
Regulatory requirements applicable to pharmaceutical products tend to make the
substitution of suppliers costly and time consuming. The unavailability of
adequate commercial quantities, the loss of a supplier's regulatory approval,
the inability to develop alternative sources, a reduction or interruption in
supply or a significant increase in the price of materials could have a material
adverse effect on the Company's ability to manufacture and market its products
and its results of operations.
Patents and Trade Secrets
There has been increasing litigation in the biomedical, biotechnology and
pharmaceutical industries with respect to the manufacture, use and sale of new
therapeutic products that are the subject of conflicting patent rights. A
substantial number of patents relating to liposomes have been issued to, or are
controlled by, other public and private entities, including academic
institutions. In addition, others, including competitors of SEQUUS, may have
filed applications for, or may have been issued patents or may obtain additional
patents and proprietary rights relating to products or processes competitive
with those of SEQUUS. The patent positions of pharmaceutical, biopharmaceutical,
biotechnology and drug delivery companies, including SEQUUS, are uncertain and
involve complex legal and factual issues. Additionally, the coverage claimed in
a patent application can be significantly reduced before the patent is issued.
As a consequence, the Company does not know whether any of its patent
applications will result in the issuance of patents or whether any of the
Company's patents will provide significant proprietary protection or will be
circumvented or invalidated. Since patent applications in the United States are
maintained in secrecy until patents issue, and since publication of discoveries
in the scientific or patent literature often lag behind actual discoveries, the
Company cannot be certain that it was the first inventor of inventions covered
by its pending patent applications or that it was the first to file patent
applications for such inventions. Moreover, the Company may have to participate
in interference proceedings to determine priority of invention, which could
result in substantial cost to the Company, even if the eventual outcome is
favorable to the Company. There can be no assurance that any patents owned or
controlled by the Company will protect SEQUUS against infringement litigation or
afford commercially significant protection of the Company's technology. Almost
none of the Company's patents has been tested in court to determine their
validity and scope. Moreover, the patent laws of foreign countries differ from
those of the United States and the degree of protection, if any, afforded by
foreign patents may, therefore, be different.
15
<PAGE> 18
In November 1991, the Company received a letter from TLC bringing to
SEQUUS' attention TLC's United States Patent No. 5,059,591 (the "'591 Patent")
containing claims directed to amphotericin B/sterol compositions and their
method of use. Subsequently, SEQUUS' patent counsel delivered an opinion to the
Company that, among other things, AMPHOTEC does not infringe any valid claim of
the '591 Patent. However, no assurance can be given that TLC will not make a
claim against SEQUUS with respect to the '591 Patent, which could have a
material adverse effect on the Company's ability to commercialize AMPHOTEC.
The Company has a practice of monitoring patents and other developments in
the liposome field. To the extent that the Company becomes aware of patents of
other parties which the Company's processes or products might infringe, it is
the Company's practice to seek review of such patents by the Company's patent
counsel. With respect to the Company's DOXIL product, the Company is aware of
TLC's United States Patent No. 5,077,056 relating to the loading of therapeutic
drugs into liposomes. The Company's patent counsel has rendered an opinion that
its DOXIL product would not infringe any valid claim of this patent. The Company
is also aware of TLC's United States Patent No. 5,008,050 relating to reducing
liposome size by extrusion, and NeXstar's United States Patent No. 5,435,989
relating to targeting of liposomes to solid tumors. The Company's patent counsel
has rendered an opinion that its DOXIL product would not infringe any valid
claim of either of these patents. In addition, the Company is aware of certain
patents covering lyophilization of liposomes. Neither of the Company's principal
products involves the lyophilization of liposomes.
Generally, the Company refers patents to its patent counsel for review.
Even if the Company's patent counsel renders advice that the Company's products
do not infringe any valid claim under such patents, there can be no assurance
that any third party will not commence litigation to enforce such patents or
that the Company will not incur substantial expense, or that it will prevail, in
any patent litigation.
The Company has been required to defend itself in patent litigation in the
past and the uncertainties inherent in any other lawsuit that may be commenced
in the future with respect to any alleged patent infringement by the Company
make the outcome of any such litigation difficult to predict. The Company may
decide to pay a royalty or make other concessions to settle a patent dispute. In
the event of litigation, there can be no assurance that the Company will be
successful. A judgment adverse to the Company in any such litigation could
materially adversely affect the Company's business, financial condition and
results of operations, and the expense of such litigation may be substantial,
whether or not the Company is successful in such litigation.
The Company relies on unpatented trade secrets and proprietary know-how to
protect certain aspects of its production and lipid purification technologies
and other proprietary information. Although SEQUUS has entered into
confidentiality agreements with its employees, consultants, representatives and
other business associates, there can be no assurance that trade secrets and
know-how will remain undisclosed or that similar trade secrets or know-how will
not be independently developed by others.
History of Operating Losses; Need for Additional Financing
The Company has incurred losses in each year since its inception and has
accumulated approximately $139.1 million in net losses through March 31, 1996,
including a net loss of $5.8 million in the first quarter of 1996. The Company
to date has generated limited revenues. There can be no assurance that revenues
from product sales will be significant or sufficient to fund operations. Owing
to expenditures associated with self-funded research, preclinical and clinical
programs, marketing expenses and other activities related to seeking regulatory
approval and achieving commercialization of its products, the Company expects to
continue to incur operating losses. Additional financing is likely to be
required to fund the Company's continuing operations and product and business
development activities in the form of debt or equity securities or bank
financing. There can be no assurance that such financing will be available on
acceptable terms, if at all. The unavailability of such financing could delay or
prevent the development, testing, regulatory approval, manufacturing or
marketing of some or all of the Company's products and could have a material
adverse effect on the Company.
16
<PAGE> 19
Dependence on Key Personnel; Management Transition
The Company's success depends largely upon its ability to attract and
retain qualified scientific, engineering, manufacturing, sales and marketing and
management personnel. The Company faces competition for such personnel from
other companies, academic institutions, government entities and other
organizations. There can be no assurance that the Company will be successful in
hiring or retaining such personnel. Three of the key executive officers of the
Company have joined the management team in the last ten months. The new
management team will face significant challenges in transitioning the Company
from research and development to manufacturing and marketing if the Company's
products obtain regulatory approval. There can be no assurance that the
management team can successfully manage the transition of the Company's
business.
Hazardous Materials
As with many biopharmaceutical companies, the Company's research and
development involves the controlled use of hazardous materials and chemical
compounds. There can be no assurance that the Company's safety procedures for
handling and disposing of such materials will comply with the standards
prescribed by federal, state and local regulations or that it will not be
subject to the risk of accidental contamination or injury from these materials.
In the event of such an accident, the Company could be held liable for any
damages that result and any such liability could materially adversely affect the
Company's business, financial condition and results of operations.
Volatility of Stock Price
The market price of the Common Stock, like the stock prices of many
publicly traded biopharmaceutical companies, has been and may continue to be
highly volatile. A variety of events, both concerning and unrelated to the
Company and the biopharmaceutical industry, such as the level of sales of the
Company's products, problems with clinical development of the Company's
potential products, announcements of technological innovations, regulatory
developments or new commercial products by the Company or its competitors,
government regulation, delays or other developments relating to regulatory
approvals, developments or disputes relating to patent or proprietary rights,
product liability claims, as well as period-to-period fluctuations in the
Company's financial results, may have a significant negative impact on the
market price of the Common Stock. Although the Common Stock trades on the Nasdaq
National Market, the trading volume has fluctuated and at times has been quite
low. Any large sale of securities of the Company could have a significant
adverse effect on the market price of the Common Stock.
17
<PAGE> 20
PART II - OTHER INFORMATION
ITEM 6.
Exhibits and Reports on Form 8-K
(a) Exhibits:
10.2.1 Lease Agreement between Lincoln Menlo IV & V Associates
Limited and the Company dated February 13, 1996 for 960 and
978 Hamilton Court, Menlo Park, California.
10.2.2 Lease Agreement between Lincoln Menlo IV & V Associates
Limited and the Company dated February 13, 1996 for 1050, 1080
and 1098 Hamilton Court, Menlo Park, California.
10.2.3 Lease Agreement between Lincoln Menlo III Associates Limited
and the Company dated May 1, 1995 for 1180 Hamilton Court,
Menlo Park, California.
10.2.4 Lease Agreement between Lincoln Menlo VI and the Company
dated February 1, 1996 for 1360 Willow Road, Menlo Park,
California.
27 Financial Data Schedule
(b) Reports on Form 8-K. During the three months ended March 31,
1996, no reports on Form 8-K were filed.
18
<PAGE> 21
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SEQUUS PHARMACEUTICALS, INC.
(Registrant)
Date: May 14, 1996 By: /s/ Donald J. Stewart
-------------------------
Donald J. Stewart
Vice President, Finance
(Principal Accounting Officer)
19
<PAGE> 22
EXHIBIT INDEX
10.2.1 Lease Agreement between Lincoln Menlo IV & V Associates
Limited and the Company dated February 13, 1996 for 960 and
978 Hamilton Court, Menlo Park, California.
10.2.2 Lease Agreement between Lincoln Menlo IV & V Associates
Limited and the Company dated February 13, 1996 for 1050, 1080
and 1098 Hamilton Court, Menlo Park, California.
10.2.3 Lease Agreement between Lincoln Menlo III Associates Limited
and the Company dated May 1, 1995 for 1180 Hamilton Court,
Menlo Park, California.
10.2.4 Lease Agreement between Lincoln Menlo VI and the Company
dated February 1, 1996 for 1360 Willow Road, Menlo Park,
California.
27 Financial Data Schedule
<PAGE> 1
EXHIBIT 10.2.1
LEASE AGREEMENT
(NET)
BASIC LEASE INFORMATION
<TABLE>
<S> <C>
LEASE DATE: February 13, 1996
LANDLORD: LINCOLN MENLO IV & V ASSOCIATES LIMITED,
a California limited partnership
LANDLORD'S ADDRESS: c/o Lincoln Property Company Management Services, Inc.
101 Lincoln Centre Drive, Fourth Floor
Foster City, California 94404-1167
TENANT: Sequus Pharmaceuticals, Inc.,
a Delaware corporation
TENANT'S ADDRESS: 960 Hamilton Court
Menlo Park, CA 94025
PREMISES: Approximately 26,400 rentable square feet as shown on Exhibit A
PREMISES ADDRESS: 960-978 Hamilton Court
Menlo Park, CA 94025
BUILDING (H): 26,400 square feet
LOT (BUILDING'S TAX PARCEL): APN 055-440-330
PARK: WILLOW PARK 930,368 square feet
PHASE V (BUILDING H AND BUILDING Q): 60,192 square feet
TERM: May 1, 1996 ("Commencement Date"), through
April 30, 2003 ("Expiration Date")
BASE RENT (P. 3): ** Twenty -six thousand seven hundred thirty and 00/100 dollars
($26,730.00) per month commencing on the Commencement Date through
April 30, 1997.
** May 1, 1997 through October 31, 1999 Base Rent shall increase to
$27,720.00 per month.
ADJUSTMENTS
TO BASE RENT: ** November 1, 1999 through April 30, 2000 Base Rent shall increase to
$28,050.00 per month; and
** May 1, 2000 through April 30, 2003 Base
Rent shall increase to $29,040.00 per month.
** Subject to increases in accordance with Addendum 1.
SECURITY DEPOSIT (P. 4.1): Sixteen thousand and nine hundred sixty-two and 40/100 Dollars
($16,962.00)
[CLEANING DEPOSIT (P. 4.2): Dollars ($ )]
--------------------------------------------- ---------
*TENANT'S SHARE OF OPERATING EXPENSES (P. 6.1): 43.86% of Phase V
*TENANT'S SHARE OF TAX EXPENSES (P. 6.2): 100% of the Building/Lot
*TENANT'S SHARE OF COMMON AREA UTILITY COSTS (P. 7): 43.86% of Phase V
*The amount of Tenant's Share of the expenses as referenced above shall be
subject to modification as set forth in this Lease.
PERMITTED USES: General and administrative office, research and development and
manufacturing of pharmaceutical products but only to the extent permitted
by the City of Menlo Park and all entities having jurisdiction.
UNRESERVED
PARKING SPACES: Ninety-two (92) nonexclusive and undesignated space.
BROKER (P. 38): CB Commercial - Gregg M. Domanico and Rico Cheung
EXHIBITS: Exhibit A - Premises, Building, Lot and/or Park
Exhibit B - Tenant Improvements
Exhibit C - Rules and Regulations
Exhibit D - Covenants, Conditions and Restrictions
Exhibit E - Hazardous Materials Disclosure Certificate - Example
Exhibit F - Change of Commencement Date - Example
Exhibit G - Tenant's Initial Hazardous Materials Disclosure Certificate
Exhibit H - Waiver by Landlord - Example
ADDENDA: Addendum 1: Amortized Brokers Fee
Addendum 2: Options to Extend the Lease Term
</TABLE>
Language indicated as being shown by strike-out in the typeset document
is enclosed in brackets "[" and "]" in the electronic format.
1
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
- ------- ----
<S> <C>
1. PREMISES ......................................................... 3
2. ADJUSTMENT OF COMMENCEMENT DATE; CONDITION OF THE PREMISES ....... 3
3. RENT ............................................................. 3
4. SECURITY DEPOSIT [AND CLEANING DEPOSIT] .......................... 4
5. TENANT IMPROVEMENTS .............................................. 4
6. ADDITIONAL RENT .................................................. 5
7. UTILITIES ........................................................ 8
8. LATE CHARGES ..................................................... 9
9. USE OF PREMISES .................................................. 9
10. ALTERATIONS AND ADDITIONS; AND SURRENDER OF PREMISES ............. 10
11. REPAIRS AND MAINTENANCE .......................................... 10
12. INSURANCE ........................................................ 11
13. WAIVER OF SUBROGATION ............................................ 13
14. LIMITATION OF LIABILITY AND INDEMNITY ............................ 13
15. ASSIGNMENT AND SUBLEASING ........................................ 13
16. AD VALOREM TAXES ................................................. 15
17. SUBORDINATION .................................................... 15
18. RIGHT OF ENTRY ................................................... 15
19. ESTOPPEL CERTIFICATE ............................................. 15
20. TENANT'S DEFAULT ................................................. 16
21. REMEDIES FOR TENANT'S DEFAULT .................................... 17
22. HOLDING OVER ..................................................... 18
23. LANDLORD'S DEFAULT ............................................... 18
24. PARKING .......................................................... 18
25. SALE OF PREMISES ................................................. 18
26. WAIVER ........................................................... 18
27. CASUALTY DAMAGE .................................................. 19
28. CONDEMNATION ..................................................... 21
29. ENVIRONMENTAL MATTERS/HAZARDOUS MATERIALS ........................ 21
30. FINANCIAL STATEMENTS ............................................. 23
31. GENERAL PROVISIONS ............................................... 24
32. SIGNS ............................................................ 25
33. MORTGAGEE PROTECTION ............................................. 25
34. QUITCLAIM ........................................................ 25
35. MODIFICATIONS FOR LENDER ......................................... 26
36. WARRANTIES OF TENANT ............................................. 26
37. COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT .................. 26
38. BROKERAGE COMMISSION ............................................. 26
39. QUIET ENJOYMENT .................................................. 27
40. LANDLORD'S ABILITY TO PERFORM TENANT'S UNPERFORMED OBLIGATIONS ... 27
41. TENANT'S EQUIPMENT FINANCING ..................................... 27
</TABLE>
Language indicated as being shown by strike-out in the typeset document
is enclosed in brackets "[" and "]" in the electronic format.
2
<PAGE> 3
LEASE AGREEMENT
DATE: This Lease is made and entered into as of the Lease Date defined on Page
1. The Basic Lease Information set forth on Page 1 and this Lease are and shall
be construed as a single instrument.
1. PREMISES: Landlord hereby leases the Premises to Tenant upon the terms and
conditions contained herein. Landlord hereby grants to Tenant a revocable
license for the right to use, on a non-exclusive basis, parking areas and
ancillary facilities located within the Common Area of the Park, subject to the
terms of this Lease. Landlord and Tenant hereby agree that for purposes of this
Lease, as of the Lease Date, the rentable square footage area of the Premises,
the Building, the Lot and the Park shall be deemed to be the number of rentable
square feet set forth in the Basic Lease Information on Page 1. Tenant further
agrees that the number of rentable square feet of the Premises, the Building,
the Lot and the Park may subsequently change after the Lease Date commensurate
with any modifications to any of the foregoing.
2. ADJUSTMENT OF COMMENCEMENT DATE; CONDITION OF THE PREMISES: [If Landlord
cannot deliver possession of the Premises on the Commencement Date, Landlord
shall not be subject to any liability nor shall the validity of the Lease be
affected; provided the Lease term and the obligation to pay Rent shall commence
on the date possession is tendered and the Expiration Date shall be extended by
a period of time equal to the period computed from the Commencement Date to the
date possession is tendered by Landlord to Tenant. In the event the commencement
date and/or the expiration date of this Lease is other than the Commencement
Date and/or Expiration Date provided on Page 1, as the case may be, Landlord and
Tenant shall execute a written amendment to this Lease, substantially in the
form of Exhibit F hereto, wherein the parties shall specify the actual
commencement date, expiration date and the date on which Tenant is to commence
paying Rent. In the event that Landlord permits Tenant to occupy the Premises
prior to the Commencement Date, such occupancy shall be at Tenant's sole risk
and subject to all the provisions of this Lease, including, but not limited to,
the requirement to pay Rent and the Security Deposit, and to obtain the
insurance required pursuant to this Lease and to deliver insurance certificates
as required herein. In addition to the foregoing, Landlord shall have the right
to impose such additional conditions on Tenant's early entry as Landlord shall
deem appropriate.] As of the Lease Date, Tenant is already occupying a portion
of the Premises pursuant to those certain Lease Agreements, dated March 3, 1992
and December 1, 1992, between Landlord and Tenant, as such lease agreements were
subsequently amended by the parties (collectively, the "Original Lease
Agreements"). The parties acknowledge that Tenant First took occupancy of 6,600
square feet of the Premises on April 26, 1992, and later occupied 13, 200 square
feet of the Premises on February 10, 1993 pursuant to the Original Lease
Agreements. The Lease Term and the obligation to pay Rent shall commence on the
Commencement Date and continue through the Expiration Date. By taking possession
of the Premises, Tenant shall be deemed to have accepted the Premises in a good,
clean and completed condition and state of repair, in compliance with all
applicable laws, codes, regulations, administrative orders and ordinances, and
subject to all matters of record. Tenant hereby acknowledges and agrees that
neither Landlord nor Landlord's agents or representatives has made any
representations or warranties as to the suitability, safety or fitness of the
Premises for the conduct of Tenant's business, Tenant's intended use of the
Premises or for any other purpose, and that neither Landlord nor Landlord's
agents or representatives has agreed to undertake any alterations or construct
any Tenant Improvements to the Premises except as expressly provided in this
Lease. [Tenant agrees that at anytime before or during the term of this Lease,
Landlord shall have the right to relocate Tenant from the Premises described
herein to other space within the Park on substantially the same terms and
conditions of this Lease provided the other space is of comparable size.]
3. RENT: On the date that Tenant executes this Lease, Tenant shall deliver to
Landlord the original executed Lease, [the] one month's Base Rent (which shall
be applied against the Rent payable for the first month Tenant is required to
pay Base Rent), the Security Deposit, [the Cleaning Deposit,] and all insurance
certificates evidencing the insurance required to be obtained by Tenant under
Section 12 of this Lease. Tenant agrees to pay Landlord, without prior notice or
demand, or abatement, offset, deduction or claim, the Base Rent described on
Page 1, payable in advance at Landlord's address shown on Page 1 on the first
day of each month throughout the term of the Lease. In addition to the Base Rent
set forth on Page 1, Tenant shall pay Landlord in advance and on the first (1st)
day of each month throughout the term of this Lease (including any extensions of
such term), as Additional Rent Tenant's share, as set forth on Page 1, of
Operating Expenses, Tax Expenses, Common Area Utility Costs, and Utility
Expenses, and Administrative Expenses all in the manner as specified in Sections
6.1, 6.2, 6.3, 6.4 and 7 of this Lease, respectively. [Additionally, Tenant
shall pay to Landlord as Additional Rent hereunder, immediately on Landlord's
demand therefor, any and all costs and expenses incurred by Landlord to enforce
the provisions of this Lease, including, but not limited to, costs associated
with any proposed assignment or subletting of all or any portion of the Premises
by Tenant, costs associated with the delivery of notices, delivery and
recordation of notice(s) of default, attorneys' fees, expert fees, court costs
and filing fees (collectively, the "Enforcement Expenses").] The term "Rent"
whenever used herein refers to the aggregate of all these amounts. If Landlord
permits Tenant to occupy the Premises without requiring
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Tenant to pay rental payments for a period of time, the waiver of the
requirement to pay rental payments shall only apply to waiver of the Base Rent
and Tenant shall otherwise perform all other obligations of Tenant hereunder,
including, but not limited to paying to Landlord any and all amounts considered
Additional Rent, such as Tenant's share of Operating Expenses, Tax Expenses,
Common Area Utility Costs, and Utility Expenses, and Administrative Expenses.
If, at any time, Tenant is in default of or otherwise breaches any term,
condition or provision of this Lease, any such waiver by Landlord of Tenant's
requirement to pay rental payments shall be null and void and Tenant shall
immediately pay to Landlord all rental payments waived by Landlord. The Rent for
any fractional part of a calendar month at the commencement or termination of
the Lease term shall be a prorated amount of the Rent for a full calendar month
based upon a thirty (30) day month. The prorated Rent shall be paid on the
Commencement Date of the Lease and the first day of the calendar month in which
the [date of termination occurs] Lease terminates, as the case may be.
4. SECURITY DEPOSIT AND CLEANING DEPOSIT[:]
4.1 SECURITY DEPOSIT: [Upon Tenant's execution of this Lease, Tenant
shall deliver to Landlord, as a Security Deposit for the performance by Tenant
of its obligations under this Lease,] Landlord and Tenant hereby acknowledge and
agree that in accordance with the terms of the Original Lease Agreements, Tenant
has provided to Landlord, as a security deposit thereunder, the total amount
described on Page 1 and that Landlord now holds that sum as Security Deposit
under this Lease. If Tenant is in default, Landlord may, but without obligation
to do so, use the Security Deposit, or any portion thereof, to cure the default
or to compensate Landlord for all damages sustained by Landlord resulting from
Tenant's default under the Lease as set forth in Section 20[, including, but not
limited to the Enforcement Expenses]. Tenant shall, immediately on demand, pay
to Landlord a sum equal to the portion of the Security Deposit so applied or
used so as to replenish the amount of the Security Deposit held to increase such
deposit to the amount initially deposited with Landlord. Concurrently with any
increase in the Base Rent, Tenant shall deliver to Landlord an amount equal to
such increase, which amount shall be added to the Security Deposit being held by
Landlord and be deemed a part of such Security Deposit thereafter. At any time
after Tenant has defaulted hereunder, Landlord may require [an] a reasonable
increase in the amount of the Security Deposit required hereunder for the then
balance of the Lease term and Tenant shall, immediately on demand, pay to
Landlord additional sums in the amount of such reasonable increase. As soon as
practicable after the termination of this Lease, Landlord shall return the
Security Deposit to Tenant, less such amounts as are reasonably necessary, as
determined solely and reasonably by Landlord, to remedy Tenant's default(s)
hereunder or to otherwise restore the Premises to a clean and safe condition,
reasonable wear and tear excepted. If [the] such cost to restore the Premises
exceeds the amount of the Security Deposit, Tenant shall promptly [deliver] pay
to Landlord [any and all] the amount of such excess sums as reasonably
determined by Landlord. Landlord shall not be required to keep the Security
Deposit separate from other funds, and, unless otherwise required by law, Tenant
shall not be entitled to interest on the Security Deposit. In no event or
circumstance shall Tenant have the right to any use of the Security Deposit and,
specifically, Tenant may not use the Security Deposit as a credit or to
otherwise offset any payments required hereunder, including, but not limited to,
Rent or any portion thereof.
[4.2 CLEANING DEPOSIT: Upon Tenant's execution of this Lease, Tenant
shall deliver to Landlord, as a Cleaning Deposit for the performance by Tenant
of its obligations under this Lease including, but not limited to, Section 11
below, the amount described on Page 1. The Cleaning Deposit is to be used for
purposes relating to cleaning up the Premises and the area adjacent to the
Premises, to the extent such cleaning up is required due to Tenant's or its
representatives, employees, invitees or contractors' use of the area adjacent to
the Premises, to the reasonable satisfaction of Landlord. If Tenant is in
default, Landlord may, but without obligation to do so, use the Cleaning
Deposit, or any portion thereof, to cure the default or to compensate Landlord
for all damages sustained by Landlord resulting from Tenant's default,
including, but not limited to the Enforcement Expenses. Tenant shall,
immediately on demand, pay to Landlord a sum equal to the portion of the
Cleaning Deposit so applied or used so as to replenish the amount of the
Cleaning Deposit to increase such deposit to the amount initially deposited with
Landlord. At anytime after Tenant has defaulted hereunder, Landlord may require
an increase in the amount of the Cleaning Deposit required hereunder for the
then balance of the Lease term and Tenant shall, immediately on demand, pay to
Landlord additional sums in the amount of such increase. As soon as practicable
after the termination of this Lease, Landlord shall return the Cleaning Deposit
to Tenant, less such amounts as are reasonably necessary to remedy Tenant's
default(s) hereunder or to otherwise restore the Premises to a clean and safe
condition as determined by Landlord. Landlord shall not be required to keep the
Cleaning Deposit separate from other funds, and, unless otherwise required by
law, Tenant shall not be entitled to interest on the Cleaning Deposit. In no
event or circumstance shall Tenant have the right to any use of the Cleaning
Deposit and, specifically, Tenant may not use the Cleaning Deposit as a credit
or to otherwise offset any payments required hereunder, including, but not
limited to, Rent or any portion thereof.]
5. TENANT IMPROVEMENTS: Tenant hereby accepts the Premises in its current "as
is" condition unless otherwise specified in Exhibit B, attached hereto and
incorporated herein by this reference. If so specified in Exhibit B hereto,
Landlord or Tenant, as the case may be, shall install the improvements ("Tenant
Improvements") on the Premises as described and in accordance with the terms,
conditions,
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criteria and provisions set forth in Exhibit B, attached and incorporated herein
by this reference. Tenant acknowledges that neither Landlord nor any of
Landlord's agents, representatives or employees has made any representations as
to the suitability or fitness of the Premises for the conduct of Tenant's
business, including, without limitation, any storage incidental thereto, or for
any other purpose, and that neither Landlord nor any of Landlord's agents,
representatives or employees has agreed to undertake any alterations or
construct any Tenant Improvements to the Premises except as expressly provided
in Exhibit B to this Lease.
6. ADDITIONAL RENT : The costs and expenses described in this Section 6 and all
other sums, charges, costs and expenses specified in this Lease other than Base
Rent, including, but not limited to, Utility Expenses, Tenant's share of Common
Area Utility Costs, [the Utility Expenses] and Late Charges [and Enforcement
Expenses] are to be paid by Tenant to Landlord as additional rent (collectively,
"Additional Rent").
6.1 OPERATING EXPENSES: In addition to the Base Rent set forth in
Section 3, Tenant shall pay its share, which is defined on Page 1, of all
Operating Expenses attributable to Phase V of the Park as Additional Rent. The
term "Operating Expenses" as used herein shall mean the total amounts paid or
payable by Landlord in connection with the ownership, maintenance, repair and
operation of the Premises, the Building and the Lot, and where applicable, of
the Park referred to on Page 1. The amount of Tenant's share of Operating
Expenses shall be reviewed from time to time by Landlord and shall be subject to
modification by Landlord as reasonably determined by Landlord. These Operating
Expenses may include, but are not limited to:
6.1.1 Landlord's cost of repairs to, and maintenance of, the
roof (excluding the replacement of the structural portions of the roof),
the roof membrane and the exterior walls of the Building;
6.1.2 Landlord's cost of maintaining the outside paved area,
landscaping and other common areas for the Park. The term "Common Area"
shall mean all areas and facilities within the Park exclusive of the
Premises and the other portions of the Park leased exclusively to other
tenants. The Common Area includes, but is not limited to, interior
lobbies, mezzanines, parking areas, access and perimeter roads,
sidewalks, rail spurs, landscaped areas and similar areas and
facilities;
6.1.3 Landlord's annual cost of insurance insuring against fire
and extended coverage (including, if Landlord elects, "all risk"
coverage) and all other insurance, including, but not limited to,
earthquake, flood and/or surface water endorsements for the Building,
the Lot and the Park (including the Common Area), rental value insurance
against loss of Rent in an amount equal to the amount of Rent for a
period of at least six (6) months commencing on the date of loss, and
subject to the provisions of Section 27 below, any deductible;
6.1.4 Landlord's cost of modifications to the Building, the
Common Area and/or the Park occasioned by any rules, laws or regulations
effective subsequent to the date on which the Building was originally
constructed; provided, however if there are modifications necessitated
by any such rules, laws or regulations or there are replacement
improvements which are required to be made to the Building, the Common
Area and/or the Park which are in the nature of capital improvements,
then the costs of such modifications and replacement improvements shall
be amortized over a reasonable period which shall not be less than the
lesser of fifteen (15) years or the reasonably estimated useful life of
the modifications or replacement improvements in question (at an
interest rate as reasonably determined by Landlord) and Tenant shall pay
its pro rata share of the monthly amortized portion of such costs
(including interest charges) as part of the Operating Expenses;
6.1.5 Landlord's cost of modifications to the Building, the
Common Area and/or the Park occasioned by any rules, laws or regulations
arising from Tenant's particular use of the Premises regardless of when
such rules, laws or regulations became effective;
6.1.6 If Landlord elects to so procure, Landlord's cost of
preventative maintenance, and repair contracts including, but not
limited to, contracts for elevator systems and heating, ventilation and
air conditioning systems, lifts for disabled persons, and trash or
refuse collection;
6.1.7 Landlord's cost of security and fire protection services
for the Building and/or the Park, as the case may be, if in Landlord's
sole discretion such services are provided;
6.1.8 Landlord's establishment of reasonable reserves for
replacements and/or repairs of Common Area improvements, equipment and
supplies;
6.1.9 Landlord's cost for the maintenance and repair of any rail
spur and rail crossing, and for the creation and negotiation of, and
pursuant to, any rail spur or track agreements, licenses, easements or
other similar undertakings;
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6.1.10 Landlord's cost of supplies, equipment, rental equipment
and other similar items used in the operation and/or maintenance of the
Park; and
6.1.11 Landlord's cost for the repairs and maintenance items set
forth in Section 11.2 below[; and]
[6.1.12 Landlord's cost of janitorial services and supplies for
the Common Areas of Phase VI of the Park.]
6.2 TAX EXPENSES: In addition to the Base Rent set forth in Section 3,
Tenant shall pay its share, which is defined on Page 1, of all real property
taxes applicable to the land and improvements included within the Lot on which
the Premises are situated and one hundred percent (100%) of all personal
property taxes now or hereafter assessed or levied against the Premises [or] and
attributable to Tenant's personal property. The amount of Tenant's share of Tax
Expenses shall be reviewed from time to time by Landlord and shall be subject to
modification by Landlord as reasonably determined by Landlord. Tenant shall also
pay one hundred percent (100%) of any increase in real property taxes
attributable, in Landlord's sole discretion, to any and all alterations, Tenant
Improvements or other improvements of any kind, which are above standard
improvements customarily installed for similar buildings located within the
Building or the Park (as applicable), whatsoever placed in, on or about the
Premises for the benefit of, at the request of, or by Tenant. The term "Tax
Expenses" shall mean and include, without limitation, any form of tax and
assessment (general, special, supplemental, ordinary or extraordinary),
commercial rental tax, payments under any improvement bond or bonds, license,
rental tax, transaction tax, levy, or penalty imposed by authority having the
direct or indirect power of tax (including any city, county, state or federal
government, or any school, agricultural, lighting, drainage or other improvement
district thereof) as against any legal or equitable interest of Landlord in the
Premises, the Building, the Lot or the Park, as against Landlord's right to rent
or other income therefrom, or as against Landlord's business of leasing the
Premises or the occupancy of Tenant or any other tax, fee, or excise, however
described, including, but not limited to, any value added tax, or any tax
imposed in substitution (partially or totally) of any tax previously included
within the definition of real property taxes, or any additional tax the nature
of which was previously included within the definition of real property taxes.
The term "Tax Expenses" shall not include any franchise, estate, inheritance,
net income, or excess profits tax imposed upon Landlord. The parties acknowledge
and agree that as of the Lease Date Landlord is currently employing a firm that
specializes in reviewing and possibly contesting taxes and assessments levied
against the Phase VI of the Park and other properties (the "Tax Consultant"). If
at any time during the term of this Lease Landlord permanently ceases to employ
the Tax Consultant or another firm to provide services similar to those being
provided by the Tax Consultant with respect to Phase V of the Park, Tenant shall
thereafter have the following right to contest the Tax Expenses payable by
Tenant hereunder and any other taxes payable by Tenant with respect to the
Premises. If Tenant is not in default of any of the terms, provisions or
obligations under this Lease and Tenant has delivered to Landlord at least sixty
(60) days prior written notice of Tenant's intention to initiate such a
proceeding, Tenant shall have the right to contest the amount or validity of the
Tax Expenses payable by Tenant hereunder and any other taxes payable by Tenant
with respect to the Premises by appropriate administrative and legal proceedings
brought either in its own name, Landlord's name or jointly with Landlord. Any
such proceeding shall be undertaken by counsel selected by Tenant and reasonably
approved by Landlord, and if Tenant deems it appropriate, such measures shall be
taken in the name of Tenant. Landlord hereby agrees that it will promptly upon
receipt of a written request therefor from Tenant (but in no event later than
forty-five (45) business days after Landlord's receipt of such written request)
furnish Tenant copies of all notices of assessment of Tax Expenses. Landlord
shall execute and deliver to Tenant whatever documents may be reasonably
necessary or proper to permit Tenant to so contest such Tax Expenses or which
may be necessary to secure payment of any refund which may result from any such
proceedings; provided, however, if Tenant makes such contest Tenant shall be
solely responsible for any and all penalties and liabilities arising therefrom
as well as for providing such security as Landlord may reasonably request in
connection with any such contest. Any such proceeding shall be undertaken at the
sole cost and expense of Tenant and any refund resulting therefrom shall, only
to the extent of the Tax Expenses payable by Tenant hereunder and any other
taxes payable by Tenant with respect to the Premises actually paid by Tenant to
Landlord for the fiscal tax year or years being contested, belong solely to
Tenant to the extent such refund is attributable to the Premises and for a
period concurrent with the term of the Lease (otherwise an appropriate
apportionment shall be made), and any excess amount of any such refund shall
belong solely to Landlord. Tenant shall indemnify, defend and hold Landlord, its
partners, lenders, representatives, successors and assigns harmless from any and
all claims, liabilities, judgments, penalties, fines, damages, costs and
expenses (including without limitation, attorneys' and experts' fees and costs)
arising from or related to any such contest initiated or brought by Tenant.
6.3 ADMINISTRATIVE EXPENSES: In addition to the Base Rent set forth in
Section 3 hereof, Tenant shall pay Landlord, without prior notice or demand, on
the first (1st) day of each month throughout the term of this Lease (including
any extensions of such term), as compensation to Landlord for accounting and
management services rendered on behalf of the Building and/or the Park,
one-twelfth (1/12th) of an amount equal to ten percent (10%) of the estimated
amount of the aggregate of the Tenant's share of (i) the total Operating
Expenses and Tax Expenses as described in Sections 6.1 and 6.2 above,
respectively, and (ii) all Common Area Utility Costs for the Park and the
Premises as described in Section 7 below[, but excluding utility costs
attributable to the heating, utility expenses for ventilation and
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air conditioning servicing the Premises]; as such amounts are estimated by
Landlord in accordance with the provisions of Section 6.4 below (collectively,
the "Administrative Expenses"). Tenant's obligations to pay such Administrative
Expenses shall survive the expiration or earlier termination of this Lease.
6.4 PAYMENT OF EXPENSES: Landlord shall reasonably estimate Tenant's
share of the Operating Expenses and Tax Expenses for the calendar year in which
the Lease commences. Commencing on the Commencement Date, one-twelfth (1/12th)
of this estimated amount shall be paid by Tenant to Landlord, as Additional
Rent, on the first (1st) day of each month and throughout the remaining months
of such calendar year. Thereafter, Landlord may estimate such expenses as of the
beginning of each calendar year and Tenant shall pay one-twelfth (1/12th) of
such estimated amount as Additional Rent hereunder on the first day of each
month during such calendar year and for each ensuing calendar year throughout
the term of this Lease (including any extensions of the term). By April 30th of
each of the following calendar years, or as soon thereafter as reasonably
possible, [including the calendar year after the calendar year in] and within
six (6) months after the last day of the term on which this Lease terminates or
the term expires, Landlord shall [endeavor] use commercially reasonably efforts
to furnish Tenant with an accounting of actual Operating Expenses and Tax
Expenses. Within thirty (30) days of Landlord's delivery of such accounting,
Tenant shall pay to Landlord the amount of any underpayment. Notwithstanding the
foregoing, failure by Landlord to give such accounting by such date shall not
constitute a waiver by Landlord of its right to collect any of Tenant's
underpayment at any time. Landlord shall credit the amount of any overpayment by
Tenant toward the next estimated monthly installment(s) falling due, or where
the term of the Lease has expired, refund the amount of overpayment to Tenant
within six (6) months of such expiration. Tenant, at its sole cost and expense
through any certified public accountant designated by it, shall have the right
to examine and/or audit the books and records evidencing such costs and expenses
for the previous one (1) calendar year, during Landlord's reasonable business
hours and not more frequently than once during any calendar year. Tenant's
obligations to pay its share of Operating Expenses and Tax Expenses shall
survive the expiration or earlier termination of this Lease.
6.5 ANNUAL RECONCILIATION: If the term of the Lease expires prior to the
annual reconciliation of expenses, if any, Landlord shall have the right to
reasonably estimate Tenant's share of such expenses, and if Landlord determines
that an underpayment is due, Tenant hereby agrees to pay Landlord the amount of
such underpayment within thirty (30) days thereafter. If Tenant does not pay
such underpayment within thirty days, Tenant hereby agrees that Landlord shall
be entitled to deduct such underpayment from Tenant's Security Deposit. If
Landlord reasonably determines that an overpayment has been made by Tenant,
Landlord shall refund said overpayment to Tenant [as soon as practicable] within
six (6) months thereafter. Notwithstanding the foregoing, failure of Landlord to
accurately estimate Tenant's share of such expenses or to otherwise perform such
reconciliation of expenses, including, without limitation, Landlord's failure to
deduct any portion of any underpayment from Tenant's Security Deposit, shall not
constitute a waiver of Landlord's right to collect any of Tenant's underpayment
at any time during the term of the Lease or at any time after the expiration or
earlier termination of this Lease.
6.6 Exclusions From Operating Expenses: Notwithstanding the foregoing,
for the purpose of this Lease, the term "Operating Expenses" shall not include
the following:
6.6.1 Leasing commissions, cost disbursements, and other
expenses incurred for leasing, renovating, or improving space for
tenants other than Tenant;
6.6.2 Costs (including permit, license, and inspection fees)
incurred in renovating, improving, decorating, painting, or redecorating
vacant space or space for other tenants;
6.6.3 Depreciation and amortization except on materials, tools,
supplies and vendor-type equipment purchased by Landlord to supply
services for which Landlord might otherwise contract with third parties
or such depreciation and amortization which otherwise have already been
included in the charge for such third party services;
6.6.4 Costs [incurred because Landlord or another tenant
actually and conclusively violated the terms of any lease;] for repairs
necessitated by the [active] gross negligence or willful misconduct of
Landlord or its authorized contractors, employees, or agents or by the
negligence of other tenants in the Building, or by latent defects in the
original design of the Building;
6.6.5 Interest on debt or amortization payments on mortgages or
deeds of trust or any other debts for borrowed money;
6.6.6 Items and services which Tenant reimburses Landlord or
pays third parties or that Landlord provided selectively to one or more
tenants of the Building, other than Tenant, without reimbursement;
6.6.7 Advertising and promotional expenditures;
6.6.8 Any costs, fines, or penalties incurred because Landlord
violated any governmental rule or authority, except to the extent
contributed to by Tenant or its employees,
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agents, invitees, licensees, representatives, assignees, subtenants,
customers or contractors (collectively, "Tenant's Representatives");
6.6.9 Costs incurred to test, survey, clean, contain, abate,
remove, or otherwise remedy Hazardous Materials from the Lot or Building
except to the extent same is Tenant's responsibility pursuant to
Paragraph 29 hereof, or otherwise caused by Tenant or any of Tenant's
Representatives;
6.6.10 Legal fees, brokerage commissions, advertising costs or
other related expenses incurred by Landlord in connection with leasing
of space to other tenants and for the financing of the Building, Lot, or
Premises, except as required pursuant to the provisions of Section 21
hereof;
6.6.11 Legal fees, accountant fees, and other fees incurred in
connection with disputes of other tenants or occupants of the Building
or Park;
6.6.12 Except for the Administrative Expenses set forth in
Section 6.3 of this Lease, overhead and profit paid to subsidiaries or
affiliates of Landlord for management or other services provided in or
to the Building to the extent such costs and expenses exceed the
competitive costs and expenses were they not provided by a subsidiary or
affiliate of Landlord;
6.6.13 The excess costs over competitive costs by independent
suppliers or vendors for the cost of supplies and services provided by
subsidiaries and affiliates of Landlord;
6.6.14 Rental charges and other related expenses incurred by
Landlord in leasing air conditioning systems or other equipment
ordinarily considered to be a capital nature to the extent such rental
charges and other related expenses exist and are incurred as of the
Commencement Date of this Lease;
6.6.15 Subject to the provisions of Section 27 below, costs of
repairs or other work necessitated by fire, windstorm or other casualty
(excluding any deductible and any casualties or matters for which Tenant
self-insures) to the extent such casualties are covered by insurance
required to be maintained by Landlord hereunder;
6.6.16 Legal fees for lawsuits or similar proceedings which do
not directly benefit the tenants of the Building or Park;
6.6.17 Except for the Administrative Expenses set forth in
Section 6.3 of this Lease, salaries of Landlord's owners or officers;
6.6.18 Ground lease rental; and
6.6.19 Those costs incurred by Landlord for the matters set
forth in Section 11.3 below.
7. UTILITIES: Utility Expenses, Common Area Utility Costs and all other sums or
charges set forth in this Section 7 are considered part of Additional Rent.
Tenant shall pay the cost of all water, sewer use, sewer discharge fees and
sewer connection fees, gas, heat, electricity, refuse pickup, janitorial
service, telephone and other utilities billed or metered separately to the
Premises and/or Tenant. Tenant shall also pay its share of any assessments or
charges for utility or similar purposes included within any tax bill for the Lot
on which the Premises are situated, including, without limitation, entitlement
fees, allocation unit fees, and/or any similar fees or charges, and any
penalties related thereto (except for penalties attributable solely to
Landlord's late payment of such utility charges). For any such utility fees or
use charges that are not billed or metered separately to Tenant, Tenant shall
pay to Landlord, as Additional Rent, without prior notice or demand, on the
first (1st) day of each month throughout the term of this Lease the amount which
is attributable to Tenant's use of the utilities or similar services, as
reasonably estimated and determined by Landlord based upon factors such as size
of the Premises and intensity of use of such utilities by Tenant such that
Tenant shall pay the portion of such charges reasonably consistent with Tenant's
use of such utilities and similar services ("Utility Expenses"). If Tenant
disputes any such estimate or determination, then Tenant shall either pay the
estimated amount or cause the Premises to be separately metered at Tenant's sole
expense. In addition, Tenant shall pay to Landlord its share, which is described
on Page 1, as Additional Rent, without prior notice or demand, on the first
(1st) day of each month throughout the term of this Lease, of any Common Area
utility costs, fees, charges or expenses attributable to Phase V of the Park
("Common Area Utility Costs"). Tenant shall pay to Landlord one-twelfth (1/12th)
of the estimated amount of Tenant's share of the Common Area Utility Costs in
the same manner and time periods as specified in Section 6.4 above and any
reconciliation thereof shall also be in the same manner as specified in Sections
6.4 and 6.5 above. The amount of Tenant's share of Common Area Utility Costs
shall be reviewed from time to time by Landlord and shall be subject to
modification by Landlord as reasonably determined by Landlord. Tenant
acknowledges that the Premises may become subject to the rationing of utility
services or restrictions on utility use as required by a public utility company,
governmental agency or other similar entity having jurisdiction thereof.
Notwithstanding any such rationing or restrictions on use of any such utility
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services, Tenant acknowledges and agrees that its tenancy and occupancy
hereunder shall be subject to such rationing restrictions as may be imposed upon
Landlord, Tenant, the Premises, the Building or the Park, and Tenant shall in no
event be excused or relieved from any covenant or obligation to be kept or
performed by Tenant by reason of any such rationing or restrictions. Tenant
further agrees to timely and faithfully pay, prior to delinquency, any amount,
tax, charge, surcharge, assessment or imposition levied, assessed or imposed
upon the Premises, or Tenant's use and occupancy thereof, or as a result
directly or indirectly of any such rationing or restrictions.
8. LATE CHARGES: Any and all sums or charges set forth in this Section 8 are
considered part of Additional Rent. Tenant acknowledges that late payment (the
second fourth day of each month or any time thereafter) by Tenant to Landlord of
Base Rent, Tenant's share of Operating Expenses, Tax Expenses, Common Area
Utility Costs, and Utility Expenses, Administrative Expenses or other sums due
hereunder, will cause Landlord to incur costs not contemplated by this Lease,
the exact amount of such costs being extremely difficult and impracticable to
fix. Such costs include, without limitation, processing and accounting charges,
and late charges that may be imposed on Landlord by the terms of any note
secured by any encumbrance against the Premises, and late charges and penalties
due to the late payment by Tenant of real property taxes on the Premises.
Therefore, if any installment of Rent or any other sum due from Tenant is not
received by Landlord when due, Tenant shall promptly pay to Landlord [all of the
following, as applicable: (a)] an additional sum equal to [ten]seven percent
[(10%)](7%) of such delinquent amount [plus interest on such delinquent amount
at the rate equal to the prime rate plus three percent (3%) for the time period
such payments are delinquent as a late charge for every month or portion thereof
that such sums remain unpaid, (b) the amount of seventy-five dollars ($75) for
each three-day notice prepared for, or served on, Tenant, (c) the amount of
fifty dollars ($50) relating to checks for which there are not sufficient
funds.] If Tenant delivers to Landlord a check for which there are not
sufficient funds, Landlord may, at its sole option, require Tenant to replace
such check with a cashier's check for the amount of such check and all other
charges payable hereunder. The parties agree that this late charge and the other
charges referenced above represent a fair and reasonable estimate of the costs
that Landlord will incur by reason of late payment by Tenant. Acceptance of any
late charge or other charges shall not constitute a waiver by Landlord of
Tenant's default with respect to the delinquent amount, nor prevent Landlord
from exercising any of the other rights and remedies available to Landlord for
any other breach of Tenant under this Lease. If a late charge or other charge
becomes payable for any three (3) installments of Rent within any twelve (12)
month period, then Landlord, at Landlord's sole option, can either require the
Rent be paid quarterly in advance, or be paid monthly in advance by cashier's
check or by electronic funds transfer.
9. USE OF PREMISES:
9.1 COMPLIANCE WITH LAWS, RECORDED MATTERS, AND RULES AND REGULATIONS:
The Premises are to be used solely for the uses stated on Page 1 and for no
other uses or purposes without Landlord's prior written consent, which consent
may be given or withheld in Landlord's sole discretion. The use of the Premises
by Tenant and its employees, representatives, agents, invitees, licensees,
subtenants, customers or contractors (collectively, "Tenant's Representatives")
shall be subject to, and at all times in compliance with, (a) any and all
applicable laws, ordinances, statutes, orders and regulations as same exist from
time to time (collectively, the "Laws"), (b) any and all documents, matters or
instruments, including without limitation, any declarations of covenants,
conditions and restrictions, and any supplements thereto, each of which has been
or hereafter is recorded in any official or public records with respect to the
Premises, the Building, the Lot and/or the Park, or any portion thereof
(collectively, the "Recorded Matters"), and (c) any and all rules and
regulations set forth in Exhibit C, attached to and made a part of this Lease,
and any other reasonable rules and regulations promulgated by Landlord now or
hereafter enacted relating to parking and the operation of the Premises, the
Building and the Park (collectively, the "Rules and Regulations") so long as the
Rules and Regulations hereafter enacted do not prevent Tenant from using the
Premises for the purposes as described on Page 1. Tenant agrees to, and does
hereby, assume full and complete responsibility to ensure that the Premises are
adequate to fully meet the needs and requirements of Tenant's intended
operations of its business within the Premises, and Tenant's use of the Premises
and that same are in compliance with all applicable Laws.
9.2 PROHIBITION ON USE: Tenant shall not use the Premises or permit
anything to be done in or about the Premises nor keep or bring anything therein
which will in any way conflict with any of the requirements of the Board of Fire
Underwriters or similar body now or hereafter constituted or in any way increase
the existing rate of or affect any policy of fire or other insurance upon the
Building or any of its contents, or cause a cancellation of any insurance
policy. No auctions may be held or otherwise conducted in, on or about the
Premises, the Building, the Lot or the Park without Landlord's written consent
thereto, which consent may be given or withheld in Landlord's sole discretion.
Tenant shall not do or permit anything to be done in or about the Premises which
will in any way obstruct or interfere with the rights of Landlord, other tenants
or occupants of the Building, other buildings in the Park, or other persons or
businesses in the area, or injure or annoy other tenants or use or allow the
Premises to be used for any unlawful or objectionable purpose, as determined by
Landlord, in its reasonable discretion, for the benefit, quiet enjoyment and use
by Landlord and all other tenants or occupants of the Building or other
buildings in the Park; nor shall Tenant cause, maintain or permit any private or
public nuisance in, on or about the Premises, Building, Park and/or the Common
Area, including, but not
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limited to, any offensive odors, noises, fumes or vibrations. Tenant shall not
damage or deface or otherwise commit or suffer to be committed any waste in,
upon or about the Premises. Tenant shall not place or store, nor permit any
other person or entity to place or store, any property, equipment, materials,
supplies, personal property or any other items or goods outside of the Premises
for any period of time. Tenant shall not permit any animals (except for those
animals required for Tenant to conduct its research), including, but not limited
to, any household pets, to be brought or kept in or about the Premises. Tenant
shall place no loads upon the floors, walls, or ceilings in excess of the
maximum designed load permitted by the applicable Uniform Building Code or which
may damage the Building or outside areas; nor place any harmful liquids in the
drainage systems; nor dump or store waste materials, refuse or other such
materials, or allow such to remain outside the Building area, except in refuse
dumpsters or in any enclosed trash areas provided. Tenant shall honor the terms
of all Recorded Matters relating to the Premises, the Building, the Lot and/or
the Park. Tenant shall honor the Rules and Regulations. If Tenant fails to
comply with such Laws, Recorded Matters, Rules and Regulations or the provisions
of this Lease, Landlord shall have [the right to collect from Tenant a
reasonable sum as a penalty, in addition to] all rights and remedies of Landlord
hereunder including, but not limited to, the payment by Tenant to Landlord of
all [Enforcement Expenses and Landlord's] costs and expenses incurred by
Landlord, if any, to cure any of such failures of Tenant, if Landlord, at its
sole option, elects to undertake such cure.
10. ALTERATIONS AND ADDITIONS; AND SURRENDER OF PREMISES:
10.1 ALTERATIONS AND ADDITIONS: Tenant shall not install any signs,
fixtures, improvements, nor make or permit any other alterations or additions to
the Premises without the prior written consent of Landlord. If any such
alteration or addition is expressly permitted by Landlord, Tenant shall deliver
at least twenty (20) days prior notice to Landlord, from the date Tenant intends
to commence construction, sufficient to enable Landlord to post a Notice of
Non-Responsibility. In all events, Tenant shall obtain all permits or other
governmental approvals prior to commencing any of such work and deliver a copy
of same to Landlord. All alterations and additions shall be installed by a
licensed contractor approved by Landlord, at Tenant's sole expense in compliance
with all applicable Laws (including, but not limited to, the ADA as defined
herein), Recorded Matters, and Rules and Regulations. Tenant shall keep the
Premises and the property on which the Premises are situated free from any liens
arising out of any work performed, materials furnished or obligations incurred
by or on behalf of Tenant. [As a condition to Landlord's consent to the
installation of any fixtures, additions or other improvements, Landlord may
require Tenant to post and obtain a completion and indemnity bond for up to one
hundred fifty percent (150%) of the cost of the work.]
10.2 SURRENDER OF PREMISES: Upon the termination of this Lease, whether
by forfeiture, lapse of time or otherwise, or upon the termination of Tenant's
right to possession of the Premises, Tenant will at once surrender and deliver
up the Premises, together with the fixtures, furnishings, additions and
improvements which Landlord has notified Tenant at the time Landlord consented
to the installation of such fixtures, furnishings, additions and improvements,
in writing, that Landlord will require Tenant not to remove, to Landlord in good
condition and repair including, but not limited to, replacing all light bulbs
and ballasts not in good working condition, excepting for reasonable wear and
tear. Reasonable wear and tear shall not include any damage or deterioration to
the floors of the Premises arising from the use of forklifts in, on or about the
Premises (including, without limitation, any marks or stains of any portion of
the floors), and any damage or deterioration that would have been prevented by
proper maintenance by Tenant or Tenant otherwise performing all of its
obligations under this Lease. Upon such termination of this Lease, Tenant shall
remove all tenant signage, trade fixtures, furniture, furnishings, personal
property, additions, and other improvements unless Landlord requests, in
writing, that Tenant not remove some or all of such trade fixtures, furniture,
furnishings, additions or improvements installed by, or on behalf of Tenant or
situated in or about the Premises. By the date which is twenty (20) days prior
to such termination of this Lease, Landlord shall notify Tenant in writing of
those fixtures, alterations, furniture, furnishings[, trade fixtures], additions
and other improvements which Landlord shall require Tenant not to remove from
the Premises. Tenant shall repair any damage caused by the installation or
removal of such signs, trade fixtures, furniture, furnishings, fixtures,
additions and improvements which are to be removed from the Premises by Tenant
hereunder. If Landlord fails to so notify Tenant at least twenty (20) days prior
to such termination of this Lease, then Tenant shall remove all tenant signage,
fixtures, alterations, furniture, furnishings, trade fixtures, additions and
other improvements installed in or about the Premises by, or on behalf of
Tenant. Tenant shall ensure that the removal of such items and the repair of the
Premises will be completed prior to such termination of this Lease.
11. REPAIRS AND MAINTENANCE:
11.1 TENANT'S REPAIRS AND MAINTENANCE OBLIGATIONS: Except for those
portions of the Building to be maintained by Landlord, as provided in Section
11.2 below, Tenant shall, at Tenant's sole cost and expense, keep and maintain
the Premises and the adjacent areas (including, without limitation, any portion
of the Common Area used by Tenant or Tenant's Representatives) in good, clean
and safe condition and repair to the satisfaction of Landlord including, but not
limited to, repairing any damage caused by Tenant or Tenant's Representatives
and replacing any property so damaged by Tenant or Tenant's Representatives.
Without limiting the generality of the foregoing, Tenant shall be solely
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responsible for maintaining, repairing and replacing (a) all mechanical systems,
heating, ventilation and air conditioning systems, (b) all plumbing, electrical
wiring and equipment serving the Premises, (c) all interior lighting (including,
without limitation, light bulbs and/or ballasts) and exterior lighting serving
the Premises or adjacent to the Premises, (d) all glass, windows, window frames,
window casements, skylights, interior and exterior doors, door frames and door
closers, (e) all roll-up doors, ramps and dock equipment including without
limitation, dock bumpers, dock plates, dock seals, dock levelers and dock
lights, (f) all tenant signage, (g) lifts for disabled persons serving the
Premises, (h) sprinkler systems, fire protection systems and security systems,
(i) all partitions, fixtures, equipment, interior painting, and interior walls
and floors of the Premises and every part thereof (including, without
limitation, any demising walls contiguous to any portion of the Premises).
Tenant's obligation to keep, maintain, preserve and repair the Premises and the
adjacent area shall specifically extend to the cleanup and removal of any and
all Hazardous Materials (hereafter defined) occurring in, on or about the
Premises.
11.2 REIMBURSABLE REPAIRS AND MAINTENANCE OBLIGATIONS: Subject to the
provisions of Sections 6 and 9 of this Lease and except for (i) the obligations
of Tenant set forth in Section 11.1 above, and (ii) the repairs rendered
necessary by the intentional or negligent acts or omissions of Tenant or
Tenant's Representatives, Landlord agrees, at Landlord's expense, subject to
reimbursement pursuant to Section 6 above, to keep in good repair the plumbing
and mechanical systems exterior to the Premises, any rail spur and rail
crossing, the roof, roof membranes, exterior walls of the Building, signage
(exclusive of tenant signage), and exterior electrical wiring and equipment,
exterior lighting, exterior glass, exterior doors and entrances, exterior window
casements, exterior doors and door closers, exterior painting of the Building
(exclusive of the Premises), and underground utility and sewer pipes outside the
exterior walls of the Building. For purposes of this Section 11.2, the term
"exterior" shall mean exterior to, and not serving the Premises. Unless
otherwise notified by Landlord, in writing, that Landlord has elected to procure
and maintain the following described contract(s), Tenant shall procure and
maintain (a) the heating, ventilation and air conditioning systems preventative
maintenance and repair contract(s); such contract(s) to be on a bi-monthly or
quarterly basis, as reasonably determined by Landlord, and (b) the fire and
sprinkler protection services and preventative maintenance and repair
contract(s) (including, without limitation, monitoring services); such
contract(s) to be on a bi-monthly or quarterly basis, as reasonably determined
by Landlord. Landlord reserves the right, but without the obligation to do so,
to procure and maintain (i) the heating, ventilation and air conditioning
systems preventative maintenance and repair contract(s), and/or (ii) the fire
and sprinkler protection services and preventative maintenance and repair
contract(s) (including, without limitation, monitoring services). If Landlord so
elects to procure and maintain any such contract(s), Tenant will reimburse
Landlord for the cost thereof in accordance with the provisions of Section 6
above. If Tenant procures and maintains any of such contract(s), Tenant will
promptly deliver to Landlord a true and complete copy of (x) each such contract
and any and all renewals or extensions thereof, and (y) each service report or
other summary received by Tenant pursuant to or in connection with such
contract(s).
11.3 LANDLORD'S REPAIRS AND MAINTENANCE OBLIGATIONS: Except for repairs
rendered necessary by the intentional or negligent acts or omissions of Tenant
or Tenant's Representatives, Landlord agrees, at Landlord's sole cost and
expense, to (a) keep in good repair the structural portions of the floors,
foundations and exterior perimeter walls of the Building (exclusive of glass and
exterior doors), and (b) replace the structural portions of the roof of the
Building (excluding the roof membrane) as, and when, Landlord determines such
replacement to be necessary in Landlord's sole discretion. Notwithstanding the
foregoing to the contrary, such repairs and/or replacements shall not be
included in the Operating Expenses as set forth in Section 6.1 above.
11.4 TENANT'S FAILURE TO PERFORM REPAIRS AND MAINTENANCE OBLIGATIONS:
Except for normal maintenance and repair of the items described above, Tenant
shall have no right of access to or right to install any device on the roof of
the Building nor make any penetrations of the roof of the Building without the
express prior written consent of Landlord, which consent shall not be
unreasonably withheld. If Tenant refuses or neglects to repair and maintain the
Premises and the adjacent areas properly as required herein and to the
reasonable satisfaction of Landlord, Landlord may, but without obligation to do
so, at any time make such repairs and/or maintenance without Landlord having any
liability to Tenant for any loss or damage that may accrue to Tenant's
merchandise, fixtures or other property, or to Tenant's business by reason
thereof, except to the extent any damage is caused by the willful misconduct or
gross negligence of Landlord or its authorized agents and representatives. In
the event Landlord makes such repairs and/or maintenance, upon completion
thereof Tenant shall pay to Landlord, as additional rent, the Landlord's costs
for making such repairs and/or maintenance, plus [twenty] ten percent
[(20%)](10%) for overhead, upon presentation of a bill therefor. The obligations
of Tenant hereunder shall survive the expiration of the term of this Lease or
the earlier termination thereof. Tenant hereby waives any right to repair at the
expense of Landlord under any applicable Laws now or hereafter in effect
respecting the Premises.
12. INSURANCE:
12.1 TYPES OF INSURANCE: Tenant shall maintain in full force and effect
at all times during the term of this Lease, at Tenant's sole cost and expense,
for the protection of Tenant and Landlord, as their interests may appear,
policies of insurance issued by a carrier or carriers acceptable to Landlord and
its
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lender(s) which afford the following coverages: (i) worker's compensation:
statutory limits; (ii) employer's liability, as required by law, with a minimum
limit of $100,000 per employee and $500,000 per occurrence; (iii) commercial
general liability insurance (occurrence form) providing coverage against any and
all claims for bodily injury and property damage occurring in, on or about the
Premises arising out of Tenant's and Tenant's Representatives' use and/or
occupancy of the Premises. Such insurance shall include coverage for blanket
contractual liability, fire damage, premises, personal injury, completed
operations, products liability, personal and advertising, and a plate-glass
rider to provide coverage for all glass in, on or about the Premises including,
without limitation, skylights, with deletion of the exclusion for operations
within fifty (50) feet of a railroad track (railroad protective liability), if
applicable. Such insurance shall have a combined single limit of not less than
One Million Dollars ($1,000,000) per occurrence with a Two Million Dollar
($2,000,000) aggregate limit and excess umbrella insurance in the amount of Two
Million Dollars ($2,000,000). If Tenant has other locations which it owns or
leases, the policy shall include an aggregate limit per location endorsement. If
necessary, as reasonably determined by Landlord, Tenant shall provide for
restoration of the aggregate limit; (iv) comprehensive automobile liability
insurance: a combined single limit of not less than $2,000,000 per occurrence
and insuring Tenant against liability for claims arising out of the ownership,
maintenance, or use of any owned, hired or non-owned automobiles; (v) "all risk"
property insurance, including without limitation, sprinkler leakage, [boiler and
machinery comprehensive form,] if applicable, covering damage to or loss of any
personal property, trade fixtures, inventory, fixtures and equipment located in,
on or about the Premises, and in addition, coverage for flood, earthquake, and
business interruption of Tenant, together with, if the property of Tenant's
invitees is to be kept in the Premises, warehouser's legal liability or bailee
customers insurance for the full replacement cost of the property belonging to
invitees and located in the Premises. Such insurance shall be written on a
replacement cost basis (without deduction for depreciation) in an amount equal
to one hundred percent (100%) of the full replacement value of the aggregate of
the items referred to in this subparagraph (v); and (vi) such other insurance as
Landlord reasonably deems necessary and prudent or as may otherwise be required
by any of Landlord's lenders or joint venture partners.
12.2 INSURANCE POLICIES: Insurance required to be maintained by Tenant
shall be written by companies (i) licensed to do business in the State of
California, (ii) domiciled in the United States of America, and (iii) having a
"General Policyholders Rating" of at least A:XA-:X (or such higher rating as may
be required by a lender having a lien on the Premises) as set forth in the most
current issue of "Best's Insurance Reports". Any deductible amounts under any of
the insurance policies required hereunder shall not exceed One Thousand Dollars
($1,000) Five Thousand Dollars ($5,000). Tenant shall deliver to Landlord
certificates of insurance and true and complete copies of any and all
endorsements required herein for all insurance required to be maintained by
Tenant hereunder at the time of execution of this Lease by Tenant. Tenant shall,
at least thirty (30) days prior to expiration of each policy, furnish Landlord
with certificates of renewal or "binders" thereof. Each certificate shall
expressly provide that such policies shall not be cancelable or otherwise
subject to modification except after thirty (30) days prior written notice to
the parties named as additional insureds as required in this Lease (except for
cancellation for nonpayment of premium, in which event cancellation shall not
take effect until at least ten (10) days' notice has been given to Landlord).
Tenant shall have the right to provide insurance coverage which it is obligated
to carry pursuant to the terms of this Lease under a blanket insurance policy,
provided such blanket policy expressly affords coverage for the Premises and for
Landlord as required by this Lease.
12.3 ADDITIONAL INSUREDS AND COVERAGE: Landlord, any property management
company and/or agent of Landlord for the Premises, the Building, the Lot or the
Park, any lender(s) of Landlord having a lien against the Premises, the
Building, the Lot or the Park, and any joint venture partners of Landlord shall
be named as additional insureds under all of the policies required in Section
12.1(iii) above with the exception of Tenant's product liability coverage.
Additionally, such policies shall provide for severability of interest. All
insurance to be maintained by Tenant shall, except for workers' compensation and
employer's liability insurance, be primary, without right of contribution from
insurance maintained by Landlord. Any umbrella liability policy or excess
liability policy (which shall be in "following form") shall provide that if the
underlying aggregate is exhausted, the excess coverage will drop down as primary
insurance. The limits of insurance maintained by Tenant shall not limit Tenant's
liability under this Lease. It is the parties' intention that the insurance to
be procured and maintained by Tenant as required herein shall provide coverage
for any and all damage or injury arising from or related to Tenant's operations
of its business and/or Tenant's or Tenant's Representatives' use of the Premises
and/or any of the areas within the Park, whether such events occur within the
Premises (as described in Exhibit A hereto) or in any other areas of the Park.
It is not contemplated or anticipated by the parties that the aforementioned
risks of loss be borne by Landlord's insurance carriers, rather it is
contemplated and anticipated by Landlord and Tenant that such risks of loss be
borne by Tenant's insurance carriers pursuant to the insurance policies procured
and maintained by Tenant as required herein.
12.4 FAILURE OF TENANT TO PURCHASE AND MAINTAIN INSURANCE: In the event
Tenant does not purchase the insurance required in this Lease or keep the same
in full force and effect throughout the term of this Lease (including any
renewals or extensions), Landlord may, but without obligation to do so, purchase
the necessary insurance and pay the premiums therefor. If Landlord so elects to
purchase such insurance, Tenant shall pay to Landlord, as additional rent, the
amount so paid by Landlord promptly upon Landlord's demand therefor. In
addition, Landlord may recover from Tenant and Tenant agrees to pay, as
additional rent, any and all [Enforcement Expenses and] damages which Landlord
may sustain
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by reason of Tenant's failure to obtain and maintain such insurance. If Tenant
fails to maintain any insurance required in this Lease, Tenant shall be liable
for all losses, damages and costs resulting from such failure.
13. WAIVER OF SUBROGATION: Landlord and Tenant hereby mutually waive their
respective rights of recovery against each other for any loss of, or damage to,
either parties' property to the extent that such loss or damage is insured by an
insurance policy required to be in effect at the time of such loss or damage.
Each party shall obtain any special endorsements, if required by its insurer
whereby the insurer waives its rights of subrogation against the other party.
This provision is intended to waive fully, and for the benefit of the parties
hereto, any rights and/or claims which might give rise to a right of subrogation
in favor of any insurance carrier. The coverage obtained by Tenant pursuant to
Section 12 of this Lease shall include, without limitation, a waiver of
subrogation endorsement attached to the certificate of insurance. The provisions
of this Section 13 shall not apply in those instances in which such waiver of
subrogation would invalidate such insurance coverage or would cause either
party's insurance coverage to be voided or otherwise uncollectible.
14. LIMITATION OF LIABILITY AND INDEMNITY: Except [for] to the extent of damage
resulting from the sole active gross negligence or willful misconduct of
Landlord or its authorized representatives, Tenant agrees to protect, defend
(with counsel acceptable to Landlord) and hold Landlord and Landlord's
lender(s), partners, employees, representatives, legal representatives,
successors and assigns (collectively, the "Indemnitees") harmless and indemnify
the Indemnitees from and against all liabilities, damages, claims, losses,
judgments, charges and expenses (including reasonable attorneys' fees, costs of
court and expenses necessary in the prosecution or defense of any litigation
including the enforcement of this provision) arising from [or in any way related
to, directly or indirectly,] Tenant's or Tenant's Representatives' use of the
Premises, Building and/or the Park, or the conduct of Tenant's business, or from
any activity, work or thing done, permitted or suffered by Tenant in or about
the Premises, or in any way connected with the Premises or with the improvements
or personal property therein, including, but not limited to, any liability for
injury to person or property of Tenant, Tenant's Representatives, or third party
persons. Tenant agrees that the obligations of Tenant herein shall survive the
expiration or earlier termination of this Lease.
Except [for] to the extent of damage resulting from the sole active
gross negligence or willful misconduct of Landlord or its authorized
representatives, Landlord shall not be liable to Tenant for any loss or damage
to Tenant or Tenant's property, for any injury to or loss of Tenant's business
or for any damage or injury to any person from any cause whatsoever, including,
but not limited to, any acts, errors or omissions by or on behalf of any other
tenants or occupants of the Building and/or the Park. Tenant shall not, in any
event or circumstance, be permitted to offset or otherwise credit against any
payments of Rent required herein for matters for which Landlord may be liable
hereunder. Landlord and its authorized representatives shall not be liable for
any interference with light or air, or for any latent defect (other than any
latent defect in the Premises or the Building attributable to the original
design or construction of the Building) in the Premises or the Building. To the
fullest extent permitted by law, Tenant agrees that neither Landlord nor any of
Landlord's lender(s), partners, employees, representatives, legal
representatives, successors and assigns shall at any time or to any extent
whatsoever be liable, responsible or in any way accountable for any loss,
liability, injury, death or damage to persons or property which at any time may
be suffered or sustained by Tenant or by any person(s) whomsoever who may at any
time be using, occupying or visiting the Premises, the Building or the Park
unless directly caused by the gross negligence or willful misconduct of Landlord
or its authorized representatives.
15. ASSIGNMENT AND SUBLEASING:
15.1 PROHIBITION: Tenant shall not assign, mortgage, hypothecate,
encumber, grant any license or concession, pledge or otherwise transfer this
Lease (collectively, "assignment"), in whole or in part, whether voluntarily or
involuntarily or by operation of law, nor sublet or permit occupancy by any
person other than Tenant of all or any portion of the Premises without first
obtaining the prior written consent of Landlord, which consent shall not be
unreasonably withheld. Tenant hereby agrees that Landlord may withhold its
consent to any proposed sublease or assignment if the proposed sublessee or
assignee or its business is subject to compliance with additional requirements
of the ADA (defined below) beyond those requirements which are applicable to
Tenant, unless the proposed sublessee or assignee shall (a) first deliver plans
and specifications for complying with such additional requirements and obtain
Landlord's written consent thereto, and (b) comply with all Landlord's
conditions for or contained in such consent, including without limitation,
requirements for security to assure the lien-free completion of such
improvements. If Tenant seeks to sublet or assign all or any portion of the
Premises, Tenant shall deliver to Landlord at least thirty (30) days prior to
the proposed commencement of the sublease or assignment (the "Proposed Effective
Date") the following: (i) the name of the proposed assignee or sublessee; (ii)
such information as to such assignee's or sublessee's financial responsibility
and standing as Landlord may reasonably require; and (iii) the aforementioned
plans and specifications, if any. Within ten (10) days after Landlord's receipt
of a written request from Tenant that Tenant seeks to sublet or assign all or
any portion of the Premises, Landlord shall deliver to Tenant a copy of
Landlord's standard form of sublease or assignment agreement (as applicable),
which instrument shall be utilized for each proposed
Language indicated as being shown by strike-out in the typeset document
is enclosed in brackets "[" and "]" in the electronic format.
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sublease or assignment (as applicable), and such instrument shall include a
provision whereby the assignee or sublessee assumes all of Tenant's obligations
hereunder and agrees to be bound by the terms hereof. As Additional Rent
hereunder, Tenant shall pay to Landlord a fee in the amount of five hundred
dollars ($500) plus Tenant shall reimburse Landlord for actual legal and other
expenses incurred by Landlord in connection with any actual or proposed
assignment or subletting; provided (in each instance) Tenant shall only by
required to reimburse Landlord for legal expenses incurred with respect to a
proposed or actual assignment or sublease up to a maximum amount of $1,500 in
each instance. In the event the sublease (1) by itself or taken together with
prior sublease(s) covers or totals, as the case may be, more than twenty-five
percent (25%) of the rentable square feet of the Premises or (2) is for a term
which by itself or taken together with prior or other subleases is greater than
fifty percent (50%) of the period remaining in the term of this Lease as of the
time of the Proposed Effective Date, then Landlord shall have the right, to be
exercised by giving written notice to Tenant, to recapture the space described
in the sublease. If such recapture notice is given, Tenant shall have the right
to withdraw its request to sublease such portion of the Premises. If Tenant does
not withdraw its request in writing within fifteen (15) days of delivery of the
recapture notice, Landlord's recapture notice it shall serve to terminate this
Lease with respect to the proposed sublease space, or, if the proposed sublease
space covers all the Premises, it shall serve to terminate the entire term of
this Lease, in either case as of the Proposed Effective Date. However, no
termination of this Lease with respect to part or all of the Premises shall
become effective without the prior written consent, where necessary, of the
holder of each deed of trust encumbering the Premises or any part thereof. If
this Lease is terminated pursuant to the foregoing with respect to less than the
entire Premises, the Rent shall be adjusted on the basis of the proportion of
square feet retained by Tenant to the square feet originally demised and this
Lease as so amended shall continue thereafter in full force and effect. Each
permitted assignee or sublessee shall assume and be deemed to assume this Lease
and shall be and remain liable jointly and severally with Tenant for payment of
Rent and for the due performance of, and compliance with all the terms,
covenants, conditions and agreements herein contained on Tenant's part to be
performed or complied with, for the term of this Lease. No assignment or
subletting shall affect the continuing primary liability of Tenant (which,
following assignment, shall be joint and several with the assignee), and Tenant
shall not be released from performing any of the terms, covenants and conditions
of this Lease. Tenant hereby acknowledges and agrees that it understands that
Landlord's accounting department may process and accept Rent payments without
verifying that such payments are being made by Tenant, a permitted sublessee or
a permitted assignee in accordance with the provisions of this Lease. Although
such payments may be processed and accepted by such accounting department
personnel, any and all actions or omissions by the personnel of Landlord's
accounting department shall not be considered as acceptance by Landlord of any
proposed assignee or sublessee nor shall such actions or omissions be deemed to
be a substitute for the requirement that Tenant obtain Landlord's prior written
consent to any such subletting or assignment, and any such actions or omissions
by the personnel of Landlord's accounting department shall not be considered as
a voluntary relinquishment by Landlord of any of its rights hereunder nor shall
any voluntary relinquishment of such rights be inferred therefrom. For purposes
hereof, in the event Tenant is a corporation, partnership, joint venture, trust
or other entity other than a natural person, any change in the direct or
indirect ownership of Tenant (whether pursuant to one or more transfers other
than any public trading of the outstanding shares (stock) of Tenant which does
not result in a change of the management and control of Tenant) which results in
a change of more than fifty percent (50%) in the direct or indirect ownership of
Tenant shall be deemed to be an assignment within the meaning of this Section 15
and shall be subject to all the provisions hereof. [Any] Except for a
permissible assignment to a Related Entity, any and all options, first rights of
refusal, tenant improvement allowances and other similar rights granted to
Tenant in this Lease, if any, shall not be assignable by Tenant unless expressly
authorized in writing by Landlord. Notwithstanding anything to the contrary
contained herein, so long as Tenant delivers to Landlord (1) at least thirty
(30) days prior written notice of its intention to assign or sublease the
Premises to any Related Entity, which notice shall set forth the name of the
Related Entity, (2) a copy of the proposed agreement pursuant to which such
assignment or sublease shall be effectuated, and (3) such other information
concerning the Related Entity as Landlord may reasonably require, including
without limitation, information regarding any change in the proposed use of any
portion of the Premises and any financial information with respect to such
Related Entity, and so long as Landlord approves, in writing, of any change in
the proposed use of the subject portion of the Premises, then Tenant may assign
this Lease or sublease any portion of the Premises (X) to any Related Entity, or
(Y) in connection with any merger, consolidation or sale of substantially all of
the assets of Tenant, without having to obtain the prior written consent of
Landlord thereto. For purposes of this Lease the term "Related Entity" shall
mean and refer to any corporation or entity which controls, is controlled by or
is under common control with Tenant, as all of such terms are customarily used
in the industry, and with an equal or greater net worth as Tenant has as of the
proposed transfer date. Any assignment to a Related Entity shall in no way
relieve Tenant of any liability Tenant may have under this Lease and such
assignee or sublessee shall be jointly and severally liable with Tenant
hereunder.
15.2 EXCESS SUBLEASE RENTAL OR ASSIGNMENT CONSIDERATION: In the event of
any sublease or assignment of all or any portion of the Premises where the rent
or other consideration provided for in the sublease or assignment either
initially or over the term of the sublease or assignment exceeds the Rent or pro
rata portion of the Rent, as the case may be, for such space reserved in the
Lease, Tenant shall pay the Landlord monthly, as additional rent, at the same
time as the monthly installments of Rent are payable hereunder, [fifty]
forty-five percent [(50%)](45%) of the excess of each such payment of rent or
other consideration in excess of the Rent called for hereunder.
Language indicated as being shown by strike-out in the typeset document
is enclosed in brackets "[" and "]" in the electronic format.
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15.3 WAIVER: Notwithstanding any assignment or sublease to a party other
than a Related Entity, or any indulgences, waivers or extensions of time granted
by Landlord to any assignee or sublessee, or failure by Landlord to take action
against any assignee or sublessee (other than a Related Entity), Tenant [waives
notice of any default of any assignee or sublessee and] agrees that Landlord
may, at its option, proceed against Tenant without having taken action against
or joined such assignee or sublessee (other than a Related Entity), except that
Tenant shall have the benefit of any indulgences, waivers and extensions of time
granted to any such assignee or sublessee including any Related Entity.
16. AD VALOREM TAXES: Prior to delinquency, Tenant shall pay all taxes and
assessments levied upon trade fixtures, alterations, additions, improvements,
inventories and personal property located and/or installed on or in the Premises
by, or on behalf of, Tenant; and if requested by Landlord, Tenant shall promptly
deliver to Landlord copies of receipts for payment of all such taxes and
assessments. To the extent any such taxes ar not separately assessed or billed
to Tenant, Tenant shall pay the amount thereof as invoiced by Landlord.
17. 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 any bona fide mortgagee or deed of trust beneficiary
with a lien on all or any portion of the Premises or any ground lessor with
respect to the land of which the Premises are a part, the rights of Tenant under
this Lease and 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 Building or the land upon which the Building is situated
or both, and (ii) the lien of any mortgage or deed of trust which may now exist
or hereafter be executed in any amount for which the Building, the Lot, ground
leases or underlying leases, or Landlord's interest or estate in any of said
items is specified as security. Notwithstanding the foregoing, Landlord or any
such ground lessor, mortgagee, or any beneficiary shall have the right to
subordinate or cause to be subordinated any such ground leases or underlying
leases or any such liens to this Lease. If 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 and upon the request of such successor to
Landlord, attorn to and become the Tenant of the successor in interest to
Landlord, provided such successor in interest will not disturb Tenant's use,
occupancy or quiet enjoyment of the Premises so long as Tenant is not in default
of the terms and provisions of this Lease. The successor in interest to Landlord
following foreclosure, sale or deed in lieu thereof shall not be (a) liable for
any act or omission of any prior lessor or with respect to events occurring
prior to acquisition of ownership; (b) subject to any offsets or defenses which
Tenant might have against any prior lessor; (c) bound by prepayment of more than
one (1) month's Rent; or (d) liable to Tenant for any Security Deposit not
actually received by such successor in interest to the extent any portion or all
of such Security Deposit has not already been forfeited by, or refunded to,
Tenant. Landlord shall be liable to Tenant for all or any portion of the
Security Deposit not forfeited by, or refunded to Tenant, until and unless
Landlord transfers such Security Deposit to the successor in interest. Tenant
covenants and agrees to execute (and acknowledge if required by Landlord, any
lender or ground lessor) and deliver, within five (5) days of a demand or
request by Landlord and in the form requested by Landlord, ground lessor,
mortgagee or beneficiary, any additional documents evidencing the priority or
subordination of this Lease with respect to any such ground leases or underlying
leases or the lien of any such mortgage or deed of trust. Tenant's failure to
timely execute and deliver such additional documents shall, [at Landlord's
option,]subject to Section 20.3 constitute a material default hereunder. [It is
further agreed that Tenant shall be liable to Landlord, and shall indemnify
Landlord from and against any loss, cost, damage or expense, incidental,
consequential, or otherwise, arising or accruing directly or indirectly, from
any failure of Tenant to execute or deliver to Landlord any such additional
documents.]
18. RIGHT OF ENTRY: Tenant grants Landlord or its agents the right to enter the
Premises at all reasonable times, following reasonable prior notice (except in
the event of an emergency) for purposes of inspection, exhibition, posting of
notices, repair or alteration. At Landlord's option, Landlord shall at all times
have and retain a key with which to unlock all the doors in, upon and about the
Premises, excluding Tenant's vaults and safes. It is further agreed that
Landlord shall have the right to use any and all means Landlord deems necessary
to enter the Premises in an emergency. Landlord shall also have the right to
place "for rent" and/or "for sale" signs on the outside of the Premises. Tenant
hereby waives any claim from damages or for any injury or inconvenience to or
interference with Tenant's business, or any other loss occasioned thereby except
for any claim for any of the foregoing arising out of the sole active gross
negligence or willful misconduct of Landlord or its authorized representatives.
Landlord shall use reasonably diligent efforts to abide by any safety
regulations of Tenant to the extent Landlord actually receives copies of any
such safety regulations, except in the event of an emergency.
19. ESTOPPEL CERTIFICATE: Tenant shall execute (and acknowledge if required by
any lender or ground lessor) and deliver to Landlord, within not less than [five
(5)] seven (7) business days after Landlord provides such to Tenant, a statement
in writing certifying that this Lease is unmodified and in full force and effect
(or, if modified, stating the nature of such modification), the date to which
the Rent and other charges are paid in advance, if any, acknowledging that there
are not, to Tenant's knowledge, any uncured defaults on the part of Landlord
hereunder or specifying such defaults as are claimed, and such
Language indicated as being shown by strike-out in the typeset document
is enclosed in brackets "[" and "]" in the electronic format.
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other matters as Landlord may reasonably require. Any such statement may be
conclusively relied upon by Landlord and any prospective purchaser or
encumbrancer of the Premises. Tenant's failure to deliver such statement within
such time shall be conclusive upon the Tenant that (a) this Lease is in full
force and effect, without modification except as may be represented by Landlord;
(b) there are no uncured defaults in Landlord's performance; and (c) not more
than one month's Rent has been paid in advance, except in those instances when
Tenant pays Rent quarterly in advance pursuant to Section 8 hereof, then not
more than three month's Rent has been paid in advance. Failure by Tenant to so
timely deliver such certified estoppel certificate shall be a material default
of the provisions of this Lease unless such failure is cured by Tenant within
ten (10) business days after Landlord's delivery to Tenant of a second written
request therefor. Tenant shall be liable to Landlord, and shall indemnify
Landlord from and against any loss, cost, damage or expense, incidental,
consequential, or otherwise, arising or accruing directly or indirectly, from
any failure of Tenant to execute or deliver to Landlord any such certified
estoppel certificate [together with any and all Enforcement Expenses]within the
time periods contemplated in this Section 19. Landlord shall execute and deliver
to Tenant, within the same time periods given to Tenant under this Section 19,
an estoppel certificate containing the information described in subitems (a),
(b) and (c) above.
20. TENANT'S DEFAULT: The occurrence of any one or more of the following events
shall, at Landlord's option, constitute a default and breach of this Lease by
Tenant:
20.1 The vacation or abandonment of the Premises by Tenant or the
vacation of the Premises by Tenant [for a period of ten (10) consecutive days or
the vacation of the Premises by Tenant] which [would] actually causes any
insurance policy to be invalidated or otherwise lapse. Tenant agrees to notice
and service of notice as provided for in this Lease and waives any right to any
other or further notice or service of notice which Tenant may have under any
statute or law now or hereafter in effect;
20.2 The failure by Tenant to make any payment of Rent, Additional Rent
or any other payment required hereunder [on the date] within three (3) days
after delivery of written notice from Landlord that said payment is past due.
Tenant agrees that such written notice by Landlord shall serve as the
statutorily required notice under the law and Tenant further agrees to notice
and service of notice as provided for in this Lease [and waives any right to any
other or further notice or service of notice which Tenant may have under any
statute or law now or hereafter in effect];
20.3 [The failure by Tenant to observe, perform or comply with any of
the conditions, covenants or provisions of this Lease (except failure to make
any payment of Rent and/or Additional Rent) and such failure is not cured within
the time period required under the provisions of this Lease. If such failure is
susceptible of cure but cannot reasonably be cured within the aforementioned
time period (if any), as determined solely by Landlord, Tenant shall promptly
commence the cure of such failure and thereafter diligently prosecute such cure
to completion within the time period specified by Landlord in any written notice
regarding such failure as may be delivered to Tenant by Landlord. In no event or
circumstance shall Tenant have more than fifteen (15) days to complete any such
cure, unless otherwise expressly agreed to in writing by Landlord (in Landlord's
sole discretion);] The failure by Tenant to observe, perform or comply with any
of the conditions, covenants or provisions of this Lease (except failure to make
any payment of Rent and/or Additional Rent) and such failure is not cured within
(i) thirty (30) days of the date on which Landlord delivers written notice of
such failure to Tenant for all failures other than with respect to Hazardous
Materials, and (ii) ten (10) days of the date on which Landlord delivers written
notice of such failure to Tenant for all failures in any way related to
Hazardous Materials. However, Tenant shall not be in default of its obligations
hereunder if such failure cannot reasonably be cured within such thirty (30) or
ten (10) day period, as applicable, and Tenant promptly commences, and
thereafter diligently proceeds with same to completion, all actions necessary to
cure such failure as soon as is reasonably possible, but in no event shall the
completion of such cure be later than forty-five (45) days after the date on
which Landlord delivers to Tenant written notice of such failure, unless
Landlord, acting reasonably and in good faith, otherwise expressly agrees in
writing to a longer period of time based upon the circumstances relating to such
failure as well as the nature of the failure and the nature of the actions
necessary to cure such failure;
20.4 The making of a general assignment by Tenant for the benefit of
creditors, the filing of a voluntary petition by Tenant or the filing of an
involuntary petition by any of Tenant's creditors seeking the rehabilitation,
liquidation, or reorganization of Tenant under any law relating to bankruptcy,
insolvency or other relief of debtors and, in the case of an involuntary action,
the failure to remove or discharge the same within sixty (60) days of such
filing, the appointment of a receiver or other custodian to take possession of
substantially all of Tenant's assets or this leasehold, Tenant's insolvency or
inability to pay Tenant's debts or failure generally to pay Tenant's debts when
due, any court entering a decree or order directing the winding up or
liquidation of Tenant or of substantially all of Tenant's assets, Tenant taking
any action toward the dissolution or winding up of Tenant's affairs, the
cessation or suspension of Tenant's use of the Premises, or the attachment,
execution or other judicial seizure of substantially all of Tenant's assets or
this leasehold;
20.5 Tenant's use or storage of Hazardous Materials in, on or about the
Premises, the Building, the Lot and/or the Park other than as expressly
permitted by the provisions of Section 29 below;
Language indicated as being shown by strike-out in the typeset document is
enclosed in brackets "[" and "]" in the electronic format.
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20.6 [The] Tenant knowingly making of any material misrepresentation or
omission by Tenant in any materials delivered by or on behalf of Tenant to
Landlord pursuant to this Lease; or
20.7 Tenant fails to timely and duly perform any of its obligations
under the Modification Agreement, including without limitation, making the
payments required to be made by Tenant thereunder in a timely manner. A material
adverse change in the financial condition of Tenant or an affiliated entity of
Tenant which may adversely affect Tenant's ability to perform all or any portion
of its obligations under this Lease.
21. REMEDIES FOR TENANT'S DEFAULT:
21.1 LANDLORD'S RIGHTS: In the event of Tenant's default or breach of
the Lease, Landlord may terminate Tenant's right to possession of the Premises
by any lawful means in which case upon delivery of written notice by Landlord to
Tenant of such termination, this Lease shall terminate on the date specified by
Landlord in such notice and Tenant shall immediately surrender possession of the
Premises to Landlord. In addition, the Landlord shall have the immediate right
of re-entry whether or not this Lease is terminated, and if this right of
re-entry is exercised following abandonment of the Premises by Tenant, Landlord
may consider any personal property belonging to Tenant and left on the Premises
to also have been abandoned. No re-entry or taking possession of the Premises by
Landlord pursuant to this Section 21 shall be construed as an election to
terminate this Lease unless a written notice of such intention is given to
Tenant. If Landlord relets the Premises or any portion thereof, (i) Tenant shall
be liable immediately to Landlord for all costs Landlord incurs in reletting the
Premises or any part thereof, including, without limitation, broker's
commissions, expenses of cleaning, redecorating[, and further improving the
Premises and other similar costs] (collectively, the "Reletting Costs"), and
(ii) the rent received by Landlord from such reletting shall be applied to the
payment of, first, any indebtedness from Tenant to Landlord other than Base
Rent, Operating Expenses, Tax Expenses, Administrative Expenses, Common Area
Utility Costs, and Utility Expenses; second, all costs including maintenance,
incurred by Landlord in reletting; and, third, Base Rent, Operating Expenses,
Tax Expenses, Administrative Expenses, Common Area Utility Costs, Utility
Expenses, and all other sums due under this Lease. Any and all of the Reletting
Costs shall be fully chargeable to Tenant and shall not be prorated or otherwise
amortized in relation to any new lease for the Premises or any portion thereof.
After deducting the payments referred to above, any sum remaining from the
rental 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. Reletting may be for
a period shorter or longer than the remaining term of this Lease. No act by
Landlord other than giving written notice 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. So
long as this Lease is not terminated, Landlord shall have the right to remedy
any default of Tenant, to maintain or improve the Premises, to cause a receiver
to be appointed to administer the Premises and new or existing subleases and to
add to the Rent payable hereunder all of Landlord's reasonable costs in so
doing, with interest at the maximum rate permitted by law from the date of such
expenditure.
21.2 DAMAGES RECOVERABLE: If Tenant breaches this Lease and abandons the
Premises before the end of the term, or if Tenant's right to possession is
terminated by Landlord because of a breach or default of the Lease, then in
either such case, Landlord may recover from Tenant all damages suffered by
Landlord as a result of Tenant's failure to perform its obligations hereunder,
including, but not limited to, the cost of any tenant improvements constructed
by or on behalf of Tenant pursuant to Exhibit B hereto, the portion of any
broker's or leasing agent's commission incurred with respect to the leasing of
the Premises to Tenant for the balance of the term of the Lease remaining after
the date on which Tenant is in default of its obligations hereunder, and all
Reletting Costs, and the worth at the time of the award (computed in accordance
with paragraph (3) of Subdivision (a) of Section 1951.2 of the California Civil
Code) of the amount by which the Rent then unpaid hereunder for the balance of
the Lease term exceeds the amount of such loss of Rent for the same period which
Tenant proves could be reasonably avoided by Landlord and in such case, Landlord
prior to the award, may relet the Premises for the purpose of mitigating damages
suffered by Landlord because of Tenant's failure to perform its obligations
hereunder; provided, however, that even though Tenant has abandoned the Premises
following such breach, this Lease shall nevertheless continue in full force and
effect for as long as Landlord does not terminate Tenant's right of possession,
and until such termination, Landlord shall have the remedy described in Section
1951.4 of the California Civil Code (Landlord may continue this Lease in effect
after Tenant's breach and abandonment and recover Rent as it becomes due, if
Tenant has the right to sublet or assign, subject only to reasonable
limitations) and may enforce all its rights and remedies under this Lease,
including the right to recover the Rent from Tenant as it becomes due hereunder.
The "worth at the time of the award" within the meaning of Subparagraphs (a)(1)
and (a)(2) of Section 1951.2 of the California Civil Code shall be computed by
allowing interest at the rate of ten percent (10%) per annum. Tenant waives
redemption or relief from forfeiture under California Code of Civil Procedure
Sections 1174 and 1179, or under any other present or future law, in the event
Tenant is evicted or Landlord takes possession of the Premises by reason of any
default of Tenant hereunder.
21.3 RIGHTS AND REMEDIES CUMULATIVE: The foregoing rights and remedies
of Landlord are not exclusive; they are cumulative in addition to any rights and
remedies now or hereafter existing at law,
Language indicated as being shown by strike-out in the typeset document is
enclosed in brackets "[" and "]" in the electronic format.
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in equity by statute or otherwise, or to any equitable remedies Landlord may
have, and to any remedies Landlord may have under bankruptcy laws or laws
affecting creditor's rights generally. In addition to all remedies set forth
above, if Tenant defaults or otherwise breaches this Lease, any and all Base
Rent waived by Landlord under Section 3 above shall be immediately due and
payable to Landlord and all options granted to Tenant hereunder shall
automatically terminate, unless otherwise expressly agreed to in writing by
Landlord.
21.4 WAIVER OF A DEFAULT: The waiver by Landlord of any default or
breach of any provision of this Lease shall not be deemed or construed a waiver
of any other breach or default by Tenant hereunder or of any subsequent breach
or default of this Lease, except for the default specified in the waiver.
22. HOLDING OVER: If Tenant holds possession of the Premises after the
expiration of the term of this Lease with Landlord's consent, Tenant shall
become a tenant from month-to-month upon the terms and provisions of this Lease,
provided the monthly Base Rent during such hold over period shall be 150% of the
Base Rent due on the last month of the Lease term, payable in advance on or
before the first day of each month. Acceptance by Landlord of the monthly Base
Rent without the additional fifty percent (50%) increase of Base Rent shall not
be deemed or construed as a waiver by Landlord of any of its rights to collect
the increased amount of the Base Rent as provided herein at any time. Such
month-to-month tenancy shall not constitute a renewal or extension for any
further term. All options, if any, granted under the terms of this Lease shall
be deemed automatically terminated and be of no force or effect during said
month-to-month tenancy. Tenant shall continue in possession until such tenancy
shall be terminated by either Landlord or Tenant giving written notice of
termination to the other party at least thirty (30) days prior to the effective
date of termination. This paragraph shall not be construed as Landlord's
permission for Tenant to hold over. Acceptance of Base Rent by Landlord
following expiration or termination of this Lease shall not constitute a renewal
of this Lease.
23. LANDLORD'S DEFAULT: Landlord shall not be deemed in breach or default of
this Lease unless Landlord fails within a reasonable time to perform an
obligation required to be performed by Landlord hereunder. For purposes of this
provision, a reasonable time shall in no event be less than thirty (30) days
after receipt by Landlord of written notice specifying the nature of the
obligation Landlord has not performed; provided, however, that if the nature of
Landlord's obligation is such that more than thirty (30) days, after receipt of
written notice, is reasonably necessary for its performance, then Landlord shall
not be in breach or default of this Lease if performance of such obligation is
commenced within such thirty (30) day period and thereafter diligently pursued
to completion.
24. PARKING: Landlord shall make available to Tenant, and Tenant shall have [an
irrevocable] the license to use throughout the term of this Lease, the number of
undesignated and nonexclusive parking spaces set forth on Page 1. [Landlord
shall exercise reasonable efforts to insure that such spaces are available to
Tenant for its use, but Landlord shall not be required to enforce Tenant's right
to use the same.]
25. SALE OF PREMISES: In the event of any sale of the Premises by Landlord or
the cessation otherwise of Landlord's interest therein, Landlord shall be and is
hereby entirely released from any and all of its obligations to perform or
further perform under this Lease and from all liability hereunder [as of]
occurring after the date of such sale; and the purchaser, at such sale or any
subsequent sale of the Premises shall be deemed, without any further agreement
between the parties or their successors in interest or between the parties and
any such purchaser, to have assumed and agreed to carry out any and all of the
covenants and obligations of the Landlord under this Lease. For purposes of this
Section 25, the term "Landlord" means only the owner and/or agent of the owner
as such parties exist as of the date on which Tenant executes this Lease. A
ground lease or similar long term lease by Landlord of the entire Building, of
which the Premises are a part, shall be deemed a sale within the meaning of this
Section 25. Tenant agrees to attorn to such new owner provided such new owner
does not disturb Tenant's use, occupancy or quiet enjoyment of the Premises so
long as Tenant is not in default of any of the provisions of this Lease.
26. WAIVER: No delay or omission in the exercise of any right or remedy of
Landlord on any default by Tenant shall impair such a right or remedy or be
construed as a waiver. The subsequent acceptance of Rent by Landlord after
breach by Tenant of any covenant or term of this Lease shall not be deemed a
waiver of such breach, other than a waiver of timely payment for the particular
Rent payment involved, and shall not prevent Landlord from maintaining an
unlawful detainer or other action based on such breach. No payment by Tenant or
receipt by Landlord of a lesser amount than the monthly Rent and other sums due
hereunder shall be deemed to be other than on account of the earliest Rent or
other sums due, nor shall any endorsement or statement on any check or
accompanying any check or payment be deemed an accord and satisfaction; and
Landlord may accept such check or payment without prejudice to Landlord's right
to recover the balance of such Rent or other sum or pursue any other remedy
Language indicated as being shown by strike-out in the typeset document is
enclosed in brackets "[" and "]" in the electronic format.
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provided in this Lease. No failure, partial exercise or delay on the part of the
Landlord in exercising any right, power or privilege hereunder shall operate as
a waiver thereof.
27. CASUALTY DAMAGE: [If the Premises or any part thereof shall be damaged by
fire or other casualty, Tenant shall give prompt written notice thereof to
Landlord. In case the Building shall be so damaged by fire or other casualty
that substantial alteration or reconstruction of the Building shall, in
Landlord's sole opinion, be required (whether or not the Premises shall have
been damaged by such fire or other casualty), Landlord may, at its option,
terminate this Lease by notifying Tenant in writing of such termination within
sixty (60) days after the date of such damage, in which event the Rent shall be
abated as of the date of such damage. If Landlord does not elect to terminate
this Lease and provided insurance proceeds and any contributions from Tenant, if
necessary, are available to fully repair the damage, Landlord shall within
ninety (90) days after the date of such damage commence to repair and restore
the Building and shall proceed with reasonable diligence to restore the Building
(except that Landlord shall not be responsible for delays outside its control)
to substantially the same condition in which it was immediately prior to the
happening of the casualty; provided, Landlord shall not be required to rebuild,
repair, or replace any part of Tenant's furniture, furnishings or fixtures and
equipment removable by Tenant or any improvements, alterations or additions
installed by or for the benefit of Tenant under the provisions of this Lease.
Landlord shall not in any event be required to spend for such work an amount in
excess of the insurance proceeds (excluding any deductible) and any
contributions from Tenant, if necessary, actually received by Landlord as a
result of the fire or other casualty. Landlord shall not be liable for any
inconvenience or annoyance to Tenant, injury to the business of Tenant, loss of
use of any part of the Premises by the Tenant or loss of Tenant's personal
property resulting in any way from such damage or the repair thereof, except
that, subject to the provisions of the next sentence, Landlord shall allow
Tenant a fair diminution of Rent during the time and to the extent the Premises
are unfit for occupancy. If the Premises or any other portion of the Building be
damaged by fire or other casualty resulting from the intentional or negligent
acts or omissions of Tenant or any of Tenant's Representatives, the Rent shall
not be diminished during the repair of such damage and Tenant shall be liable to
Landlord for the cost and expense of the repair and restoration of all or any
portion of the Building caused thereby (including, without limitation, any
deductible) to the extent such cost and expense is not covered by insurance
proceeds. In the event the holder of any indebtedness secured by the Premises
requires that the insurance proceeds be applied to such indebtedness, then
Landlord shall have the right to terminate this Lease by delivering written
notice of termination to Tenant within thirty (30) days after the date of notice
to Tenant of any such event, whereupon all rights and obligations shall cease
and terminate hereunder. Except as otherwise provided in this Section 27, Tenant
hereby waives the provisions of Sections 1932(2.), 1933(4.), 1941 and 1942 of
the California Civil Code.]
27.1 CASUALTY. If the Premises or any part thereof (excluding any
alterations or improvements installed by or for the benefit of Tenant) shall be
damaged or destroyed by fire or other casualty, Tenant shall give immediate
written notice thereof to Landlord. Within thirty (30) days after receipt by
Landlord of such notice, Landlord shall notify Tenant, in writing, whether the
necessary repairs can reasonably be made: (a) within ninety (90) days; (b) in
more than ninety (90) days but in less than one hundred eighty (180) days; or
(c) in more than one hundred eighty (180) days, from the date of such notice.
27.1.1 MINOR INSURED DAMAGE. If the Premises are damaged only
to such extent that repairs, rebuilding and/or restoration can be reasonably
completed within ninety (90) days, this Lease shall not terminate and, provided
that insurance proceeds are available to fully repair the damage, Landlord shall
repair the Premises to substantially the same condition that existed prior to
the occurrence of such casualty, except Landlord shall not be required to
rebuild, repair, or replace any alterations or improvements installed by or for
the benefit of Tenant or any part of Tenant's furniture, furnishings or fixtures
and equipment removable by Tenant. The Rent payable hereunder shall be abated
proportionately from the date Tenant vacates the Premises only to the extent
rental abatement insurance proceeds are received by Landlord and the Premises
are unfit for occupancy.
27.1.2 INSURED DAMAGE REQUIRING MORE THAN 90 DAYS TO REPAIR.
If the Premises are damaged only to such extent that repairs, rebuilding and/or
restoration can be reasonably completed in more than ninety (90) days but in
less than one hundred eighty (180) days, then Landlord shall have the option of:
(a) terminating the Lease effective upon the occurrence of such damage, in which
event the Rent shall be abated from the date Tenant vacates the Premises; or (b)
electing to repair the Premises to substantially the same condition that existed
prior to the occurrence of such casualty, provided insurance proceeds are
available to fully repair the damage (except that Landlord shall not be required
to rebuild, repair, or replace any alterations or improvements installed by or
for the benefit of Tenant or any part of Tenant's furniture, furnishings or
fixtures and equipment removable by Tenant). The Rent payable hereunder shall be
abated proportionately from the date Tenant vacates the Premises only to the
extent rental abatement insurance proceeds are received by Landlord and the
Premises are unfit for occupancy. If Landlord should fail to substantially
complete such repairs within one hundred eighty (180) days after the date on
which Landlord is notified by Tenant of the occurrence of such casualty (such
180-day period to be extended for delays caused by Tenant or any force majeure
events), Tenant may within twenty (20) days after expiration of such one hundred
eighty (180) day period (as same may be extended), terminate this Lease by
delivering written notice to Landlord as Tenant's exclusive remedy, whereupon
all rights of Tenant hereunder shall cease and terminate twenty (20) days after
Landlord's receipt of such notice.
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27.1.3 MAJOR INSURED DAMAGE. If the Premises are damaged to
such extent that repairs, rebuilding and/or restoration cannot be reasonably
completed within one hundred eighty (180) days, then either Landlord or Tenant
may terminate this Lease by giving written notice within twenty (20) days after
notice from Landlord regarding the time period of repair. If either party
notifies the other of its intention to so terminate the Lease, then this Lease
shall terminate and the Rent shall be abated from the date Tenant vacates the
Premises. If neither party elects to terminate this Lease, Landlord shall
promptly commence and diligently prosecute to completion the repairs to the
Premises, provided insurance proceeds are available to fully repair the damage
(except that Landlord shall not be required to rebuild, repair, or replace any
alterations or improvements installed by or for the benefit of Tenant or any
part of Tenant's furniture, furnishings or fixtures and equipment removable by
Tenant). During the time when Landlord is prosecuting such repairs to
completion, the Rent payable hereunder shall be abated proportionately from the
date Tenant vacates the Premises only to the extent rental abatement insurance
proceeds are received by Landlord and only during the time period that the
Premises are unfit for occupancy.
27.1.4 DAMAGE NEAR END OF TERM. Notwithstanding anything to
the contrary contained in this Lease except for the provisions of Section 27.2
below, if the Premises are damaged or destroyed during the last year of then
applicable term of this Lease, Landlord may, at its option, cancel and terminate
this Lease by giving written notice to Tenant of its election to do so within
thirty (30) days after receipt by Landlord of notice from Tenant of the
occurrence of such casualty. If Landlord so elects to terminate this Lease, all
rights of Tenant hereunder shall cease and terminate ten (10) days after
Tenant's receipt of such notice.
27.2 TENANT'S OR TENANT'S REPRESENTATIVE'S FAULT. If any portion of the
Premises is damaged or destroyed due to the fault, negligence (active or
passive) or breach of this Lease by Tenant or any of Tenant's Representatives,
Rent shall not be diminished during the repair of such damage and Tenant shall
be liable to Landlord for the cost of the repair caused thereby to the extent
such cost is not covered by insurance proceeds.
27.3 UNINSURED CASUALTY. Tenant shall be responsible for and shall pay
to Landlord, as Additional Rent, any deductibles amount under the property
insurance for the Premises and/or the Building. If any portion of the Premises
is damaged and is not fully covered by insurance proceeds received by Landlord
(and Tenant elects not to pay any such difference) or if the holder of any
indebtedness secured by the Premises requires that the insurance proceeds be
applied to such indebtedness, then Landlord shall have the right to terminate
this Lease by delivering written notice of termination to the other party within
thirty (30) days after the date of notice to Tenant of any such event, whereupon
all rights and obligations shall cease and terminate hereunder, except for those
obligations expressly provided for in this Lease to survive such termination of
the Lease.
27.4 TENANT'S WAIVER. Landlord shall not be liable for any inconvenience
or annoyance to Tenant, injury to the business of Tenant, loss of use of any
part of the Premises by Tenant or loss of Tenant's personal property, resulting
in any way from such damage, destruction or the repair thereof, except that,
Landlord shall allow Tenant a fair diminution of Rent during the time and to the
extent the Premises are unfit for occupancy as specifically provided above in
this Section 27. With respect to any damage or destruction which Landlord is
obligated to repair or may elect to repair, Tenant hereby waives all rights to
terminate this Lease or offset any amounts against Rent pursuant to rights
accorded Tenant by any law currently existing or hereafter enacted, including
but not limited to, all rights pursuant to the provisions of Sections 1932(2.),
1933(4.), 1941 and 1942 of the California Civil Code, as the same may be amended
or supplemented from time to time. Notwithstanding anything to the contrary
contained herein, if the holder of any indebtedness secured by the Premises
requires that the insurance proceeds be applied to such indebtedness, then
Landlord shall have the right to terminate this Lease by delivering written
notice of termination to Tenant within thirty (30) days after the date of notice
to Tenant of any such event, whereupon all rights and obligations shall cease
and terminate hereunder, except for those obligations expressly provided for in
this Lease to survive such termination of the Lease.
27.5 REPAIR AND RESTORATION BY TENANT. Notwithstanding the foregoing but
subject to (i) the rights of any lender of Landlord, and/or (ii) Landlord's
right to determine, in its sole and absolute discretion, to reconfigure the Park
or any of the buildings situated within the Park, including without limitation,
the Premises or the Building (in which event Landlord may rescind the following
described right conferred upon Tenant herein), if there is any damage or
destruction to the Premises caused by fire or other casualty and the balance of
the leased space within the Building is not substantially damaged or destroyed
by any such fire or other casualty, Tenant shall have the right, but not the
obligation under the provisions of this Section 27.5, to repair such damage and
completely restore the Premises at Tenant's sole cost and expense (without any
contribution from Landlord or Landlord's insurers) and keep this Lease in full
force and effect. The foregoing right granted to Tenant in this Section 27.5
shall be subject to the satisfaction of all of the following conditions: (a)
Tenant shall promptly notify Landlord of its election to so repair and restore
the Premises; (b) Tenant shall promptly prepare and deliver to Landlord, for
Landlord's prior written approval, all plans, specifications, drawings and other
information and schematics as Landlord may request; (c) Tenant shall obtain, and
deliver a copy to Landlord of, all permits and licenses for such work; (d)
Tenant shall comply with all of the provisions of Section 10.1 with respect to
such work; (e) Tenant and Tenant's contractors shall procure and maintain
throughout the time period during which such work is being performed builder's
risk insurance with such insurers as required by the provisions of Section 12
above and Tenant shall also comply with all of the provisions
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of Section 12 pertaining to insurance, including without limitation, naming
Landlord and its property management company (if other than Landlord), partners
and lenders as additional insureds thereunder, and delivering certificates of
insurance to Landlord; (f) after the completion of such work, Tenant shall
deliver to Landlord as-built plans and any certificate of occupancy or other
approvals issued by applicable governmental agencies with respect to the
completion of such work; (g) Tenant shall promptly commence and diligently
pursue such repair and restoration work; and (h) during the time period such
repair and restoration work is being performed, Rent shall only be abated to the
extent rental abatement proceeds are actually received by Landlord and the
Premises are unfit for occupancy.
28. CONDEMNATION: If twenty-five percent (25%) or more of the Premises is
condemned by eminent domain, inversely condemned or sold in lieu of condemnation
for any public or quasi-public use or purpose ("Condemned"), then Tenant or
Landlord may terminate this Lease as of the date when physical possession of the
Premises is taken and title vests in such condemning authority, and Rent shall
be adjusted to the date of termination. Tenant shall not because of such
condemnation assert any claim against Landlord or the condemning authority for
any compensation because of such condemnation, and Landlord shall be entitled to
receive the entire amount of any award without deduction for any estate of
interest or other interest of Tenant. If a substantial portion of the Premises,
Building or the Lot is so Condemned, Landlord [at its] or Tenant, at either
party's option may terminate this Lease. If [Landlord does not] neither party
elects to terminate this Lease, Landlord shall, if necessary, promptly proceed
to restore the Premises or the Building to substantially its same condition
prior to such partial condemnation, allowing for the reasonable effects of such
partial condemnation, and a proportionate allowance shall be made to Tenant, as
solely reasonably determined by Landlord, for the Rent corresponding to the time
during which, and to the part of the Premises of which, Tenant is deprived on
account of such partial condemnation and restoration. Landlord shall not be
required to spend funds for restoration in excess of the amount received by
Landlord as compensation awarded.
29. ENVIRONMENTAL MATTERS/HAZARDOUS MATERIALS:
29.1 HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE: Prior to executing this
Lease, Tenant has completed, executed and delivered to Landlord the Tenant's
initial Hazardous Materials Disclosure Certificate (the "Initial HazMat
Certificate"), a copy of which is attached hereto as Exhibit G E and
incorporated herein by this reference. Tenant covenants, represents and warrants
to Landlord that, to the best of Tenant's knowledge after due inquiry, the
information on the Initial HazMat Certificate is true and correct and accurately
describes the use(s) of Hazardous Materials which will be made and/or used on
the Premises by Tenant. Tenant shall commencing with the date which is one year
from the Commencement Date and continuing every year thereafter, complete,
execute, and deliver to Landlord, a Hazardous Materials Disclosure Certificate
(the "HazMat Certificate") describing Tenant's present use of Hazardous
Materials on the Premises, and any other reasonably necessary documents as
requested by Landlord. The HazMat Certificate required hereunder shall be in
substantially the form as that which is attached hereto as Exhibit E. Landlord
hereby acknowledges and agrees that as of the date on which both parties execute
and deliver this Lease, Landlord has approved the Initial HazMat Certificate.
29.2 DEFINITION OF HAZARDOUS MATERIALS: As used in this Lease, the term
Hazardous Materials shall mean and include (a) any hazardous or toxic wastes,
materials or substances, and other pollutants or contaminants, which are or
become regulated by any Environmental Laws; (b) petroleum, petroleum by
products, gasoline, diesel fuel, crude oil or any fraction thereof; (c) asbestos
and asbestos containing material, in any form, whether friable or non-friable;
(d) polychlorinated biphenyls; (e) radioactive materials; (f) lead and
lead-containing materials; (g) any other material, waste or substance displaying
toxic, reactive, ignitable or corrosive characteristics, as all such terms are
used in their broadest sense, and are defined or become defined by any
Environmental Law (defined below); or (h) any materials which cause or threatens
to cause a nuisance upon or waste to any portion of the Premises, the Building,
the Lot, the Park or any surrounding property; or poses or threatens to pose a
hazard to the health and safety of persons on the Premises or any surrounding
property.
29.3 PROHIBITION; ENVIRONMENTAL LAWS: Except for, and to the extent of,
the type and quantities of Hazardous Materials specified in the Initial HazMat
Certificate, Tenant shall not be entitled to use nor store any Hazardous
Materials on, in, or about the Premises, the Building, the Lot and the Park, or
any portion of the foregoing, without, in each instance, obtaining Landlord's
prior written consent thereto. If Landlord consents to any such usage or
storage, then Tenant shall be permitted to use and/or store only those Hazardous
Materials that are necessary for Tenant's business and to the extent disclosed
in the then applicable HazMat Certificate and as expressly approved by Landlord
in writing, provided that such usage and storage is only to the extent of the
quantities of Hazardous Materials as specified in the then applicable HazMat
Certificate as expressly approved by Landlord and provided further that such
usage and storage is in full compliance with any and all local, state and
federal environmental, health and/or safety-related laws, statutes, orders,
standards, courts' decisions, ordinances, rules and regulations (as interpreted
by judicial and administrative decisions), decrees, directives, guidelines,
permits or permit conditions, currently existing and as amended, enacted, issued
or adopted in the future which are or become applicable to Tenant or all or any
portion of the Premises (collectively, the "Environmental Laws"). Tenant agrees
that any changes to the type and/or quantities of Hazardous Materials specified
in the most recent HazMat Certificate may be implemented only with the prior
written consent of Landlord, which consent [may be given or withheld in
Landlord's sole discretion] shall not be
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unreasonably withheld. Tenant shall not be entitled nor permitted to install any
tanks under, on or about the Premises for the storage of Hazardous Materials
without the express written consent of Landlord, which may be given or withheld
in Landlord's sole discretion. Landlord shall have the right at all times, but
not more than twice per year (unless Tenant is then in default or Landlord has
reason to believe that the Premises have been contaminated) during the term of
this Lease to (i) inspect the Premises, (ii) conduct tests and investigations to
determine whether Tenant is in compliance with the provisions of this Section
29, and (iii) request lists of all Hazardous Materials used, stored or otherwise
located on, under or about the Premises, the Common Areas and/or the parking
lots (to the extent the Common Areas and/or the parking lots are not considered
part of the Premises). The cost of all such inspections, tests and
investigations shall be borne solely by Tenant, if Landlord reasonably [believes
they are necessary]determines that Tenant or any of Tenant's Representatives are
[directly or indirectly] responsible in any manner for any contamination
revealed by such inspections, tests and investigations. The aforementioned
rights granted herein to Landlord and its representatives shall not create (a) a
duty on Landlord's part to inspect, test, investigate, monitor or otherwise
observe the Premises or the activities of Tenant and Tenant's Representatives
with respect to Hazardous Materials, including without limitation, Tenant's
operation, use and any remediation related thereto, or (b) liability on the part
of Landlord and its representatives for Tenant's use, storage, disposal or
remediation of Hazardous Materials, it being understood that Tenant shall be
solely responsible for all liability in connection therewith.
29.4 TENANT'S ENVIRONMENTAL OBLIGATIONS: Tenant shall give to Landlord
immediate verbal and follow-up written notice of any spills, releases,
discharges, disposals, emissions, migrations, removals or transportation of
Hazardous Materials on, under or about the Premises, or in any Common Areas or
parking lots (to the extent such areas are not considered part of the Premises).
Tenant, at its sole cost and expense, covenants and warrants to promptly
investigate, clean up, remove, restore and otherwise remediate (including,
without limitation, preparation of any feasibility studies or reports and the
performance of any and all closures) any spill, release, discharge, disposal,
emission, migration or transportation of Hazardous Materials arising from or
related to the intentional or negligent acts or omissions of Tenant or Tenant's
Representatives such that the affected portions of the Park and any adjacent
property are returned to the condition existing prior to the appearance of such
Hazardous Materials. Any such investigation, clean up, removal, restoration and
other remediation shall only be performed after Tenant has obtained Landlord's
prior written consent, which consent shall not be unreasonably withheld so long
as such actions would not potentially have a material adverse long-term or
short-term effect on the Premises, the Building, the Lot or the Park, or any
portion of any of the foregoing. Notwithstanding the foregoing, Tenant shall be
entitled to respond immediately to an emergency without first obtaining
Landlord's prior written consent. Tenant, at its sole cost and expense, shall
conduct and perform, or cause to be conducted and performed, all closures as
required by any Environmental Laws or any agencies or other governmental
authorities having jurisdiction thereof. If Tenant fails to so promptly
investigate, clean up, remove, restore, provide closure or otherwise so
remediate, Landlord may, but without obligation to do so, take any and all steps
necessary to rectify the same and Tenant shall promptly reimburse Landlord, upon
demand, for all costs and expenses to Landlord of performing investigation,
clean up, removal, restoration, closure and remediation work. All such work
undertaken by Tenant, as required herein, shall be performed in such a manner so
as to enable Landlord to make full economic use of the Premises, the Building,
the Lot and the Park after the satisfactory completion of such work.
29.5 ENVIRONMENTAL INDEMNITY: In addition to Tenant's obligations as set
forth hereinabove, Tenant and Tenant's officers and directors agrees to, and
shall, protect, indemnify, defend (with counsel acceptable to Landlord) and hold
Landlord and Landlord's lenders, partners, property management company (if other
than Landlord), agents, directors, officers, employees, representatives,
contractors, shareholders, successors and assigns and each of their respective
partners, directors, employees, representatives, agents, contractors,
shareholders, successors and assigns harmless from and against any and all
claims, judgments, damages, penalties, fines, liabilities, losses (including,
without limitation, diminution in value of the Premises, the Building, the Lot,
the Park, or any portion of any of the foregoing, damages for the loss of or
restriction on the use of rentable or usable space, and from any adverse impact
of Landlord's marketing of any space within the Building and/or Park), suits,
administrative proceedings and costs (including, but not limited to, attorneys'
and consultant fees and court costs) arising at any time during or after the
term of this Lease in connection with or related to, directly or indirectly, the
use, presence, transportation, storage, disposal, migration, removal, spill,
release or discharge of Hazardous Materials on, in or about the Premises, or in
any Common Areas or parking lots (to the extent such areas are not considered
part of the Premises) as a result (directly or indirectly) of the intentional or
negligent acts or omissions of Tenant or Tenant's Representatives. The foregoing
indemnity shall not include any claims, judgments, damages, penalties, fines,
liabilities or losses related in any way to the residual hazardous substances
described in Section 29.7 below. Neither the written consent of Landlord to the
presence, use or storage of Hazardous Materials in, on, under or about any
portion of the Premises, the Building, the Lot and the Park, nor the strict
compliance by Tenant with all Environmental Laws shall excuse Tenant [and
Tenant's officers and directors] from its obligations of indemnification
pursuant hereto. To the extent Landlord is strictly liable under any
Environmental Laws, Tenant's obligations to Landlord under this Section 29 and
the indemnity contained herein shall likewise be without regard to fault on
Tenant's part with respect to the violation of any Environmental Law which
results in liability to any of the aforementioned indemnitees.
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Tenant shall not be liable for nor otherwise obligated to Landlord under
any provision of the Lease with respect to (i) any claim, remediation
obligation, investigation obligation, liability, cause of action, attorney's
fees, consultants' cost, expense or damage resulting from any Hazardous Material
present in, on or about the Premises or any of the Buildings in Phase V to the
extent not caused nor otherwise permitted, directly or indirectly, by Tenant or
Tenant's Representatives, including without limitation, any residual Hazardous
Materials which are present in, on or about the Premises, the Building or the
Lot as of the Lease Date including any residual hazardous substances referred to
in section 29.7 below; or (ii) the removal, investigation, monitoring or
remediation of any Hazardous Material present in, on or about the Premises or
the Building caused by any source, including third parties other than Tenant and
Tenant's Representatives, as a result of or in connection with the acts or
omissions of persons other than Tenant or Tenant's Representatives; provided,
however, Tenant shall be fully liable for and otherwise obligated to Landlord
under the provisions of this Lease for all liabilities, costs, damages,
penalties, claims, judgments, expenses (including without limitation, attorneys'
and experts' fees and costs) and losses to the extent (a) Tenant or any of
Tenant's Representatives contributes to the presence of such Hazardous Materials
or Tenant and/or any of Tenant's Representatives exacerbates the conditions
caused by such Hazardous Materials, or (b) Tenant and/or Tenant's
Representatives allows or permits persons over which Tenant or any of Tenant's
Representatives has control and/or for which Tenant or any of Tenant's
Representatives are legally responsible for, to cause such Hazardous Materials
to be present in, on, under, through or about any portion of the Premises, any
of the Buildings in Phase V or the Park, or does not take all reasonably
appropriate actions to prevent such persons over which Tenant or any of Tenant's
Representatives has control and/or for which Tenant or any of Tenant's
Representatives are legally responsible from causing the presence of Hazardous
Materials in, on, under, through or about any portion of the Premises, any of
the Buildings in Phase V or the Park. At Tenant's written request, Landlord
shall make available for review by Tenant in Landlord's offices any
environmental reports, evaluations or information bearing on the environmental
condition of the Premises, any of the Buildings in Phase V or the Park to the
extent same is in Landlord's possession at Landlord's offices and to the extent
not otherwise treated as confidential or otherwise protected under any
attorney-client privilege, attorney work-product privilege or similar laws.
29.6 SURVIVAL: Tenant's obligations and liabilities pursuant to the
provisions of this Section 29 shall survive the expiration or earlier
termination of this Lease. If it is determined by Landlord's environmental
consultants in concurrence with Tenant's environmental consultants (both
environmental consultants to act reasonably and in good faith) that the
condition of all or any portion of the Premises, the Building, the Lot and/or
the Park is not in compliance with the provisions of this Lease due to the acts
or omissions of Tenant or any of Tenant's Representatives with respect to
Hazardous Materials, including without limitation [all]any violation of
applicable Environmental Laws at the expiration or earlier termination of this
Lease, then at Landlord's sole option, Landlord may require Tenant to hold over
possession of the Premises until Tenant can surrender the Premises to Landlord
in the condition in which the Premises existed as of the Commencement Date and
prior to the appearance of such Hazardous Materials except for reasonable wear
and tear, including without limitation, the conduct or performance of any
closures as required by any Environmental Laws. [The burden of proof hereunder
shall be upon Tenant.] For purposes hereof, the term "reasonable wear and tear"
shall not include any deterioration in the condition or diminution of the value
of any portion of the Premises, the Building, the Lot and/or the Park in any
manner whatsoever related to directly, or indirectly, Hazardous Materials. Any
such holdover by Tenant will be with Landlord's consent, will not be terminable
by Tenant in any event or circumstance and will otherwise be subject to the
provisions of Section 22 of this Lease.
29.7 DISCLOSURE: The land described herein contains residual hazardous
substances. Such condition renders the land and the owner, Tenant or other
possessor of the land subject to requirements, restrictions, provisions, and
liabilities contained in Chapter 6.5 and Chapter 6.8 of division 20 of the
Health and Safety Code, as same may be amended from time, and any successor
statutes thereof. This statement is not a declaration that a hazard to public
health, safety and welfare exists.
30. FINANCIAL STATEMENTS: Tenant and/or a Related Entity, as the case may be,
for the reliance of Landlord, any lender holding or anticipated to acquire a
lien upon the Premises, the Building or the Park or any portion thereof, or any
prospective purchaser of the Building or the Park or any portion thereof, within
ten (10) business days after Landlord's request therefor, but not more often
than once annually so long as Tenant or a Related Entity, as applicable is not
in default of this Lease, shall deliver to Landlord the then current audited
financial statements of Tenant and/or a Related Entity, as the case may be,
(including interim periods following the end of the last fiscal year for which
annual statements are available) which statements shall be prepared or compiled
by a certified public accountant and shall present fairly the financial
condition of Tenant and/or a Related Entity, as the case may be, at such dates
and the result of its operations and changes in its financial positions for the
periods ended on such dates. If an audited financial statement has not been
prepared, Tenant and/or a Related Entity, as the case may be, shall provide
Landlord with an unaudited financial statement and/or such other information,
the type and form of which are acceptable to Landlord in Landlord's reasonable
discretion, which reflects the financial condition of Tenant and/or a Related
Entity, as the case may be. If Landlord so requests, Tenant or a Related Entity,
as applicable, shall deliver to Landlord an opinion of a certified public
accountant, including a balance sheet and profit and loss statement for the most
recent prior year, all prepared in accordance with generally accepted accounting
principles consistently applied. Any and all options granted to Tenant hereunder
shall be subject to and conditioned upon Landlord's reasonable
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approval of Tenant's financial or a Related Entity's (as applicable) condition
at the time of Tenant's exercise of any such option.
31. GENERAL PROVISIONS:
31.1 TIME. Time is of the essence in this Lease and with respect to each
and all of its provisions in which performance is a factor.
31.2 SUCCESSORS AND ASSIGNS. The covenants and conditions herein
contained, subject to the provisions as to assignment, apply to and bind the
heirs, successors, executors, administrators and assigns of the parties hereto.
31.3 RECORDATION. Tenant shall not record this Lease or a short form
memorandum hereof without the prior written consent of the Landlord.
31.4 LANDLORD'S PERSONAL LIABILITY. The liability of Landlord (which,
for purposes of this Lease, shall include Landlord and the owner of the Building
if other than Landlord) to Tenant for any default by Landlord under the terms of
this Lease shall be limited to the actual interest of Landlord and its present
or future partners in the Premises or the Building and Tenant agrees to look
solely to the Premises for satisfaction of any liability and shall not look to
other assets of Landlord nor seek any recourse against the assets of the
individual partners, directors, officers, shareholders, agents or employees of
Landlord; it being intended that Landlord and the individual partners,
directors, officers, shareholders, agents or employees of Landlord shall not be
personally liable in any manner whatsoever for any judgment or deficiency. The
liability of Landlord under this Lease is limited to its actual period of
ownership of title to the Building, and Landlord shall be automatically released
from further performance under this Lease and from all further liabilities and
expenses hereunder upon transfer of Landlord's interest in the Premises or the
Building.
31.5 SEPARABILITY. Any provisions of this Lease which shall prove to be
invalid, void or illegal shall in no way affect, impair or invalidate any other
provisions hereof and such other provision shall remain in full force and
effect.
31.6 CHOICE OF LAW. This Lease shall be governed by and construed in
accordance with the laws of the State of California.
31.7 ATTORNEYS' FEES. In the event any dispute between the parties
result in litigation or other proceeding, the prevailing party shall be
reimbursed by the party not prevailing for all reasonable costs and expenses,
including, without limitation, reasonable attorneys' and experts' fees and costs
incurred by the prevailing party in connection with such litigation or other
proceeding and any appeal thereof. Such costs, expenses and fees shall be
included in and made a part of the judgment recovered by the prevailing party,
if any.
31.8 ENTIRE AGREEMENT. This Lease supersedes any prior agreements,
representations, negotiations or correspondence between the parties, and
contains the entire agreement of the parties on matters covered. No other
agreement, statement or promise made by any party that is not in writing and
signed by all parties to this Lease shall be binding.
31.9 WARRANTY OF AUTHORITY. On the date that Tenant executes this Lease,
Tenant shall deliver to Landlord an original certificate of status for Tenant
issued by the California Secretary of State or statement of partnership for
Tenant recorded in the county in which the Premises are located, as applicable,
and such other documents as Landlord may reasonably request with regard to the
lawful existence of Tenant. Each person executing this Lease on behalf of a
party represents and warrants that (1) such person is duly and validly
authorized to do so on behalf of the entity it purports to so bind, and (2) if
such party is a partnership, corporation or trustee, that such partnership,
corporation or trustee has full right and authority to enter into this Lease and
perform all of its obligations hereunder. In addition to any other remedies
available to Landlord under this Lease, if there is any breach of the foregoing
warranty, the person(s) executing this Lease on behalf of Tenant shall be
personally liable for all of Tenant's obligations under this Lease, including,
but not limited to, the payment by such person(s) to Landlord of any and all
losses, liabilities, costs, expenses and damages incurred by Landlord hereunder.
31.10 NOTICES. Any and all notices and demands required or permitted to
be given hereunder to Landlord shall be in writing and shall be sent: (a) by
United States mail, certified and postage prepaid; or (b) by personal delivery;
or (c) by overnight courier, addressed to Landlord at 101 Lincoln Centre Drive,
Fourth Floor, Foster City, California 94404-1167. Any and all notices and
demands required or permitted to be given hereunder to Tenant shall be in
writing and shall be sent: (i) by United States mail, certified and postage
prepaid; or (ii) by personal delivery to any employee or agent of Tenant over
the age of eighteen (18) years of age; or (iii) by overnight courier, all of
which shall be addressed to Tenant at the Premises; or (iv) by facsimile at the
facsimile number at the Premises, if any, as provided by Tenant on Page 1 of
this Lease or otherwise provided to Landlord. Notice and/or demand shall be
deemed given upon the earlier of actual receipt or the third day following
deposit in the United States mail. Notice and/or demand by facsimile shall be
complete upon transmission over the telephone line.
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Any notice or requirement of service required by any statute or law now or
hereafter in effect, including, but not limited to, California Code of Civil
Procedure Sections 1161, 1161.1, and 1162, is hereby waived by Tenant.
31.11 JOINT AND SEVERAL. If Tenant consists of more than one person or
entity, the obligations of all such persons or entities shall be joint and
several.
31.12 COVENANTS AND CONDITIONS. Each provision to be performed by Tenant
hereunder shall be deemed to be both a covenant and a condition.
31.13 WAIVER OF JURY TRIAL. The parties hereto shall and they hereby do
waive trial by jury in any action, proceeding or counterclaim brought by either
of the parties hereto against the other on any matters whatsoever arising out of
or in any way related to this Lease, the relationship of Landlord and Tenant,
Tenant's use or occupancy of the Premises, the Building or the Park, and/or any
claim of injury, loss or damage.
31.14 COUNTERCLAIMS. In the event Landlord commences any proceedings for
nonpayment of Base Rent[, Additional Rent, or any other sums or amounts due
hereunder], Tenant shall not interpose any counterclaim of whatever nature or
description in any such proceedings, provided, however, nothing contained herein
shall be deemed or construed as a waiver of the Tenant's right to assert such
claims in any separate action brought by Tenant or the right to offset the
amount of any final judgment owed by Landlord to Tenant.
31.15 UNDERLINING. The use of underlining within the Lease is for
Landlord's reference purposes only and no other meaning or emphasis is intended
by this use, nor should any be inferred.
32. SIGNS: All signs and graphics of every kind visible in or from public view
or corridors or the exterior of the Premises shall be subject to Landlord's
prior written approval and shall be subject to any applicable governmental laws,
ordinances, and regulations and in compliance with Landlord's [S]sign
[C]criteria as same may exist from time to time [set forth in Exhibit G hereto
and made a part hereof]. Tenant shall remove all such signs and graphics prior
to the termination of this Lease. Such installations and removals shall be made
in a manner as to avoid damage or defacement of the Premises; and Tenant shall
repair any damage or defacement, including without limitation, discoloration
caused by such installation or removal. Landlord shall have the right, at its
option, to deduct from the Security Deposit such sums as are reasonably
necessary to remove such signs, including, but not limited to, the costs and
expenses associated with any repairs necessitated by such removal.
Notwithstanding the foregoing, in no event shall any: (a) neon, flashing or
moving sign(s) or (b) sign(s) which shall interfere with the visibility of any
sign, awning, canopy, advertising matter, or decoration of any kind of any other
business or occupant of the Building or the Park be permitted hereunder. Tenant
further agrees to maintain any such sign, awning, canopy, advertising matter,
lettering, decoration or other thing as may be approved in good condition and
repair at all times.
33. MORTGAGEE PROTECTION: Upon any breach or default on the part of Landlord,
Tenant will give written notice by registered or certified mail to any
beneficiary of a deed of trust or mortgagee of a mortgage covering the Premises
who has provided Tenant with notice of their interest together with an address
for receiving notice, and shall offer such beneficiary or mortgagee a reasonable
opportunity to cure the default (which, in no event shall be less than ninety
(90) days), including time to obtain possession of the Premises by power of sale
or a judicial foreclosure, if such should prove necessary to effect a cure. If
such breach or default cannot be cured within such time period, then such
additional time as may be necessary will be given to such beneficiary or
mortgagee to effect such cure so long as such beneficiary or mortgagee has
commenced the cure within the original time period and thereafter diligently
pursues such cure to completion, in which event this Lease shall not be
terminated while such cure is being diligently pursued. Tenant agrees that each
lender to whom this Lease has been assigned by Landlord is an express third
party beneficiary hereof. Tenant shall not make any prepayment of Rent more than
one (1) month in advance without the prior written consent of each such lender,
except if Tenant is required to make quarterly payments of Rent in advance
pursuant to the provisions of Section 8 above. Tenant waives the collection of
any deposit from such lender(s) or any purchaser at a foreclosure sale of such
lender(s)' deed of trust unless the lender(s) or such purchaser shall have
actually received and not refunded the deposit. Tenant agrees to make all
payments under this Lease to the lender with the most senior encumbrance upon
receiving a direction, in writing, to pay said amounts to such lender. Tenant
shall comply with such written direction to pay without determining whether an
event of default exists under such lender's loan to Landlord.
34. QUITCLAIM: Upon any termination of this Lease, Tenant shall, at Landlord's
request, execute, have acknowledged and deliver to Landlord a quitclaim deed of
Tenant's interest in and to the Premises. If Tenant fails to so deliver to
Landlord such a quitclaim deed, Tenant hereby agrees that Landlord shall have
the full authority and right to record such a quitclaim deed signed only by
Landlord and such quitclaim deed shall be deemed conclusive and binding upon
Tenant.
Language indicated as being shown by strike-out in the typeset document
is enclosed in brackets "[" and "]" in the electronic format.
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35. MODIFICATIONS FOR LENDER: If, in connection with obtaining financing for the
Premises or any portion thereof, Landlord's lender shall request reasonable
modification(s) to this Lease as a condition to such financing, Tenant shall not
unreasonably withhold, delay or defer its consent thereto, provided such
modifications do not materially adversely affect Tenant's rights hereunder or
the use, occupancy or quiet enjoyment of Tenant hereunder. If the foregoing
occurs Landlord will reimburse Tenant for any reasonable out-of-pocket costs and
expenses incurred by Tenant in connection with such modifications.
36. WARRANTIES OF TENANT: Tenant hereby warrants and represents to Landlord, for
the express benefit of Landlord, that Tenant has undertaken a complete and
independent evaluation of the risks inherent in the execution of this Lease and
the operation of the Premises for the use permitted hereby, and that, based upon
said independent evaluation, Tenant has elected to enter into this Lease and
hereby assumes all risks with respect thereto. Tenant hereby further warrants
and represents to Landlord, for the express benefit of Landlord, that in
entering into this Lease, Tenant has not relied upon any statement, fact,
promise or representation (whether express or implied, written or oral) not
specifically set forth herein in writing and that any statement, fact, promise
or representation (whether express or implied, written or oral) made at any time
to Tenant, which is not expressly incorporated herein in writing, is hereby
waived by Tenant.
37. COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT: Landlord and Tenant hereby
agree and acknowledge that the Premises, the Building and/or the Park may be
subject to the requirements of the Americans with Disabilities Act, a federal
law codified at 42 U.S.C. 12101 et seq, including, but not limited to Title III
thereof, all regulations and guidelines related thereto, together with any and
all laws, rules, regulations, ordinances, codes and statutes now or hereafter
enacted by local or state agencies having jurisdiction thereof, including all
requirements of Title 24 of the State of California, as the same may be in
effect on the date of this Lease and may be hereafter modified, amended or
supplemented (collectively, the "ADA"). Any Tenant Improvements to be
constructed hereunder shall be in compliance with the requirements of the ADA,
and all costs incurred for purposes of compliance therewith shall be a part of
and included in the costs of the Tenant Improvements. Tenant shall be solely
responsible for conducting its own independent investigation of this matter and
for ensuring that the design of all Tenant Improvements strictly comply with all
requirements of the ADA. Subject to reimbursement pursuant to Section 6 of the
Lease, if any barrier removal work or other work is required to the Building,
the Common Area or the Park under the ADA, then such work shall be the
responsibility of Landlord; provided, if such work is required under the ADA as
a result of Tenant's use of the Premises or any work or alteration made to the
Premises by or on behalf of Tenant, then such work shall be performed by
Landlord at the sole cost and expense of Tenant. Except as otherwise expressly
provided in this provision, Tenant shall be responsible at its sole cost and
expense for fully and faithfully complying with all applicable requirements of
the ADA, including without limitation, not discriminating against any disabled
persons in the operation of Tenant's business in or about the Premises, and
offering or otherwise providing auxiliary aids and services as, and when,
required by the ADA, provided that Tenant shall not be responsible for any costs
attributable to compliance with the provisions of the ADA, as the ADA is in
effect as of the Lease Date, nor any costs attributable to compliance with the
ADA as a result of any activity or use by any other tenant in the Building so
long as such activity or use is not in any manner associated with Tenant's or
Tenant's Representatives' use of any portion of the Premises, the Building, the
Lot and/or the Park. Within ten (10) days after receipt, Landlord and Tenant
shall advise the other party in writing, and provide the other with copies of
(as applicable), any notices alleging violation of the ADA relating to any
portion of the Premises or the Building; any claims made or threatened in
writing regarding noncompliance with the ADA and relating to any portion of the
Premises or the Building; or any governmental or regulatory actions or
investigations instituted or threatened regarding noncompliance with the ADA and
relating to any portion of the Premises or the Building. Tenant shall and hereby
agrees to protect, defend (with counsel acceptable to Landlord) and hold
Landlord and Landlord's lender(s), partners, employees, representatives, legal
representatives, successors and assigns (collectively, the "Indemnitees")
harmless and indemnify the Indemnitees from and against all liabilities,
damages, claims, losses, penalties, judgments, charges and expenses (including
reasonable attorneys' fees, costs of court and expenses necessary in the
prosecution or defense of any litigation including the enforcement of this
provision) arising from or in any way related to, directly or indirectly,
Tenant's or Tenant's Representatives' violation or alleged violation of the ADA.
Tenant agrees that the obligations of Tenant herein shall survive the expiration
or earlier termination of this Lease.
38. BROKERAGE COMMISSION: Landlord and Tenant each represents and warrants for
the benefit of the other that it has had no dealings with any real estate
broker, agent or finder in connection with the Premises and/or the negotiation
of this Lease, except for the Broker(s) (as set forth on Page 1), and that it
knows of no other real estate broker, agent or finder who is or might be
entitled to a real estate brokerage commission or finder's fee in connection
with this Lease or otherwise based upon contacts between the claimant and
Tenant. Each party shall indemnify and hold harmless the other from and against
any and all liabilities or expenses arising out of claims made for a fee or
commission by any real estate broker, agent or finder in connection with the
Premises and this Lease other than Broker(s), if any, resulting from the actions
of the indemnifying party. Any real estate brokerage commission or finder's fee
payable to the Broker(s) in connection with this Lease shall only be payable and
applicable to the extent of the initial term of the Lease and to the extent of
the Premises as same exist as of the date on which Tenant executes this Lease.
Landlord and Tenant hereby acknowledge and agree that (a) the amount of the
brokerage commission payable to the Broker(s) for the Premises for the initial
term of this Lease shall be the amount of forty-eight thousand three and 06/100
dollars ($48,003.06) (the "Brokers Fee"), and (b) other than the payment of the
Brokers Fee, no other commissions, fees or other sums are due, payable or owing
by Landlord to the Broker(s) in connection with this Lease. Landlord and Tenant
hereby further agree that the Brokers Fee shall be payable by the parties as
follows: (i) Landlord shall initially pay the Brokers Fee to the Broker(s)
within thirty (30) days of execution of this Lease by both
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<PAGE> 27
Landlord and Tenant; (ii) Tenant shall reimburse Landlord for a portion of the
Brokers Fee in the amount of thirty-five thousand seven hundred sixty-six and
66/100 dollars ($35,766.66) (the "Amortized Brokers Fee") over the initial term
of the Lease in the following manner as described in subitem (iii); and (iii)
the Amortized Brokers Fee shall be amortized at the interest rate of twelve
percent (12%) over the initial term of this Lease and Tenant shall pay to
Landlord such amortized amount (including interest charges) on a monthly basis
throughout the initial term of this Lease as part of, and together with, the
Base Rent payable by Tenant under Section 3 above (the "Amortized Fees"). The
amount of the Amortized Fees shall be added to the amount of the monthly Base
Rent otherwise payable by Tenant under this Lease and as specified on Page 1 of
this Lease. Unless expressly agreed to in writing by Landlord and Broker(s), no
real estate brokerage commission or finder's fee shall be owed to, or otherwise
payable to, the Broker(s) for any renewals or other extensions of the initial
term of this Lease or for any additional space leased by Tenant other than the
Premises as same exist as of the date on which Tenant executes this Lease.
39. QUIET ENJOYMENT: Landlord covenants with Tenant, upon the paying of Rent and
observing and keeping the covenants, agreements and conditions of this Lease on
its part to be kept and during the periods that Tenant is not otherwise in
default of any of the terms or provisions of this Lease, and subject to the
rights of any of Landlord's lenders in accordance with the provisions of any
subordination agreement between Tenant and such lenders, (i) that Tenant shall
and may peaceably and quietly hold, occupy and enjoy the Premises and the Common
Areas during the term of this Lease, and (ii) neither Landlord, nor any
successor or assign of Landlord, shall disturb Tenant's occupancy or enjoyment
of the Premises and the Common Areas.
40. LANDLORD'S ABILITY TO PERFORM TENANT'S UNPERFORMED OBLIGATIONS:
Notwithstanding anything to the contrary contained in this Lease, if Tenant
shall fail to perform any of the terms, provisions, covenants or conditions to
be performed or complied with by Tenant pursuant to this Lease, and/or if the
failure of Tenant relates to a matter which in Landlord's judgment reasonably
exercised is of an emergency nature and such failure shall remain uncured for a
period of time commensurate with such emergency, then Landlord may, after
reasonable notice to Tenant at Landlord's option without any obligation to do
so, and in its sole discretion as to the necessity therefor, perform any such
term, provision, covenant, or condition, or make any such payment and Landlord
by reason of so doing shall not be liable or responsible for any loss or damage
thereby sustained by Tenant or anyone holding under or through Tenant. If
Landlord so performs any of Tenant's obligations hereunder, the full amount of
the cost and expense entailed or the payment so made or the amount of the loss
so sustained shall immediately be owning by Tenant to Landlord, and Tenant shall
promptly pay to Landlord upon demand, as Additional Rent, (a) the full amount
thereof with interest thereon from the date of payment at the greater of (i) ten
percent (10%) per annum, or (ii) the highest rate permitted by applicable law;
(b) the reasonable expenses of Landlord attributable thereto.
41. TENANT EQUIPMENT FINANCING: Landlord hereby acknowledges that Tenant has
informed Landlord that Tenant intends to procure financing for equipment to be
used in Tenant's operations conducted within the Premises (the "Equipment
Financing"). Within fifteen (15) business days after Tenant's delivery to
Landlord of written notice of the prospective procurement of such Equipment
Financing, Landlord shall execute and deliver to Tenant that certain waiver by
Landlord, in the form of Exhibit H attached hereto and made a part hereof (the
"Waiver By Landlord"). Tenant shall not do any of the following in connection
with any such Equipment Financing: (i) record or permit the recordation (ii)
file any UCC-1 financing statements with regard to such equipment in which
reference is made to any portion of the Premises, the Building, the Lot or the
Park which would have the effect of causing a lien to be placed against any
portion of the Premises, the Building, the Lot or the Park. Tenant shall
promptly deliver to Landlord a true and complete copy of the Waiver By Landlord
fully executed by Landlord, Tenant and any lender which provides such Equipment
Financing to Tenant.
IN WITNESS WHEREOF, this Lease is executed on the date and year first
written above.
TENANT:
Sequus Pharmaceuticals, Inc.,
a Delaware corporation
By: /S/
--------------------------------
Its: Vice President Finance
-------------------------------
Date: 2-29-96
------------------------------
LANDLORD:
LINCOLN MENLO IV & V ASSOCIATES LIMITED,
a California limited partnership
By: Lincoln Property Company Management Services, Inc.,
As Manager and Agent for Landlord
By: /S/
--------------------------------
Vice President
Date:
--------------------------------
<PAGE> 28
EXHIBIT A - PREMISES
PAGE 1 OF 1
LEASE DATED FEBRUARY 13, 1996, BY AND BETWEEN
SEQUUS PHARMACEUTICALS, INC.,
A DELAWARE CORPORATION
("TENANT"),
AND
LINCOLN MENLO IV & V ASSOCIATES LIMITED,
A CALIFORNIA LIMITED PARTNERSHIP
("LANDLORD")
LEASED PREMISES:
Approximately 26,400 square feet located at
960-978 Hamilton Court, Menlo Park, California
[GRAPHIC OF SITE PLAN]
INITIALS:
TENANT: /S/
----------------------
LANDLORD:
----------------------
<PAGE> 29
EXHIBIT B TO LEASE AGREEMENT
TENANT IMPROVEMENTS
This exhibit, entitled "Tenant Improvements", is and shall constitute EXHIBIT B
to that certain Lease Agreement dated February 13, 1996 (the "Lease"), by and
between LINCOLN MENLO IV & V ASSOCIATES LIMITED, A CALIFORNIA LIMITED
PARTNERSHIP ("LANDLORD"), AND SEQUUS PHARMACEUTICALS, INC., A DELAWARE
CORPORATION ("TENANT"), for the leasing of certain premises located at 960-978
Hamilton Court, Menlo Park, California (the "Premises"). The terms, conditions
and provisions of this EXHIBIT B are hereby incorporated into and are made a
part of the Lease. Any capitalized terms used herein and not otherwise defined
herein shall have the meaning ascribed to such terms as set forth in the Lease:
1. TENANT TO CONSTRUCT TENANT IMPROVEMENTS. Subject to the provisions below,
Tenant shall be solely responsible for the planning, construction and completion
of the interior tenant improvements ("Tenant Improvements") to the Premises in
accordance with the terms and conditions of this Exhibit B. The Tenant
Improvements shall not include any of Tenant's personal property, trade
fixtures, furnishings, equipment or similar items.
2. TENANT IMPROVEMENT PLANS.
A. PRELIMINARY PLANS AND SPECIFICATIONS. Tenant shall retain a licensed,
insured architect ("Architect") to prepare preliminary working architectural and
engineering plans and specifications ("Preliminary Plans and Specifications")
for the Tenant Improvements. Tenant shall deliver the Preliminary Plans and
Specifications to Landlord. The Preliminary Plans and Specifications shall be in
sufficient detail to show locations, types and requirements for all heat loads,
people loads, floor loads, power and plumbing, regular and special HVAC needs,
telephone communications, telephone and electrical outlets, lighting, lighting
fixtures and related power, and electrical and telephone switches. Landlord
shall reasonably approve or disapprove the Preliminary Plans and Specifications
within five (5) days after Landlord receives the Preliminary Plans and
Specifications and, if disapproved, Landlord shall return the Preliminary Plans
and Specifications to Tenant, who shall make all necessary revisions within ten
(10) days after Tenant's receipt thereof. This procedure shall be repeated until
Landlord approves the Preliminary Plans and Specifications. The approved
Preliminary Plans and Specifications, as modified, shall be deemed the "Final
Preliminary Plans and Specifications".
B. FINAL PLANS AND SPECIFICATIONS. After the Final Preliminary Plans and
Specifications are approved by Landlord and are deemed to be the Final
Preliminary Plans and Specifications, Tenant shall cause the Architect to
prepare in twenty (20) days following Landlord's approval of the Final
Preliminary Plans and Specifications the final working architectural and
engineering plans, specifications and drawings, ("Final Plans and
Specifications") for the Tenant Improvements. Tenant shall then deliver the
Final Plans and Specifications to Landlord. Landlord shall reasonably approve or
disapprove the Final Plans and Specifications within five (5) days after
Landlord receives the Final Plans and Specifications and, if disapproved,
Landlord shall return the Final Plans and Specifications to Tenant who shall
make all necessary revisions within ten (10) days after Tenant's receipt
thereof. This procedure shall be repeated until Landlord approves, in writing,
the Final Plans and Specifications. The approved Final Plans and Specifications,
as modified, shall be deemed the "Construction Documents".
C. MISCELLANEOUS. All deliveries of the Preliminary Plans and
Specifications, the Final Preliminary Plans and Specifications, the Final Plans
and Specifications, and the Construction Documents shall be delivered by
messenger service, by personal hand delivery or by overnight parcel service.
While Landlord has the right to approve the Preliminary Plans and
Specifications, the Final Preliminary Plans and Specifications, the Final Plans
and Specifications, and the Construction Documents, Landlord's interest in doing
so is to protect the Premises, the Building and Landlord's interest.
Accordingly, Tenant shall not rely upon Landlord's approvals and Landlord shall
not be the guarantor of, nor responsible for, the adequacy and correctness or
accuracy of the Preliminary Plans and Specifications, the Final Preliminary
Plans and Specifications, the Final Plans and Specifications, and the
Construction Documents, or the compliance thereof with applicable laws, and
Landlord shall incur no liability of any kind by reason of granting such
approvals.
D. BUILDING STANDARD WORK. The Construction Documents shall provide that
the Tenant Improvements to be constructed in accordance therewith must be at
least equal, in quality, to Landlord's building standard materials, quantities
and procedures then in use by Landlord ("Building Standards") attached hereto as
Exhibit B-2, and shall consist of improvements which are generic in nature.
3. PERMITS. Tenant at its sole cost and expense (subject to the provisions of
Paragraph 5 below) shall obtain all governmental approvals of the Construction
Documents to the full extent necessary for the issuance of a building permit for
the Tenant Improvements based upon such Construction Documents. Tenant
at its sole cost and expense shall also cause to be obtained all other necessary
approvals and permits from all governmental agencies having jurisdiction or
authority for the construction and installation of the Tenant Improvements in
accordance with the approved Construction Documents. Tenant
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<PAGE> 30
at its sole cost and expense (subject to the provisions of Paragraph 5 below)
shall undertake all steps necessary to insure that the construction of the
Tenant Improvements is accomplished in strict compliance with all statutes,
laws, ordinances, codes, rules, and regulations applicable to the construction
of the Tenant Improvements and the requirements and standards of any insurance
underwriting board, inspection bureau or insurance carrier insuring the Premises
and/or the Building.
4. CONSTRUCTION.
A. Tenant shall be solely responsible for the construction, installation
and completion of the Tenant Improvements in accordance with the Construction
Documents approved by Landlord and is solely responsible for the payment of all
amounts when payable in connection therewith without any cost or expense to
Landlord, except for Landlord's obligation to contribute the Tenant Improvement
Allowance in accordance with the provisions of Paragraph 5 below. Tenant shall
diligently proceed with the construction, installation and completion of the
Tenant Improvements in accordance with the Construction Documents and the
completion schedule reasonably approved by Landlord. No material changes shall
be made to the Construction Documents and the completion schedule approved by
Landlord without Landlord's prior written consent, which consent shall not be
unreasonably withheld.
B. Tenant at its sole cost and expense (subject to the provisions of
Paragraph 5 below) shall employ a licensed, insured and bonded general
contractor ("Contractor") to construct the Tenant Improvements in accordance
with the Construction Documents. The construction contracts between Tenant and
the Contractor and between the Contractor and subcontractors shall be subject to
Landlord's prior written approval, which approval shall not be unreasonably
withheld. Proof that the Contractor is licensed in California, is bonded as
required under California law, and has the insurance specified in Exhibit B-1,
attached hereto and incorporated herein by this reference, shall be provided to
Landlord at the time that Tenant requests approval of the Contractor from
Landlord. Tenant shall comply with or cause the Contractor to comply with all
other terms and provisions of Exhibit B-1.
C. Prior to the commencement of the construction and installation of the
Tenant Improvements, Tenant shall provide the following to Landlord, all of
which shall be to Landlord's reasonable satisfaction:
(i) An estimated budget and cost breakdown for the Tenant Improvements.
(ii) Estimated completion schedule for the Tenant Improvements.
(iii) Copies of all required approvals and permits from governmental
agencies having jurisdiction or authority for the construction and installation
of the Tenant Improvements; provided, however, if prior to commencement of the
construction and installation of Tenant Improvements Tenant has not received the
electrical, plumbing or mechanical permits, Tenant shall only be required to
provide Landlord with evidence that Tenant has made application therefor, and,
upon receipt by Tenant of such permits, Tenant shall promptly provide Landlord
with copies thereof.
(iv) Evidence of Tenant's procurement of insurance required to be
obtained pursuant to the provisions of Paragraphs 4.B and 4.G.
D. Landlord shall at all reasonable times have a right to inspect the
Tenant Improvements (provided Landlord does not materially interfere with the
work being performed by the Contractor or its subcontractors) and Tenant shall
immediately cease work upon written notice from Landlord if the Tenant
Improvements are not in compliance with the Construction Documents approved by
Landlord. If Landlord shall give notice of faulty construction or any other
deviation from the Construction Documents, Tenant shall cause the Contractor to
make corrections promptly. However, neither the privilege herein granted to
Landlord to make such inspections, nor the making of such inspections by
Landlord, shall operate as a waiver of any rights of Landlord to require good
and workmanlike construction and improvements constructed in accordance with the
Construction Documents.
E. Subject to Landlord complying with its obligations in Paragraph 5 below,
Tenant shall pay and discharge promptly and fully all claims for labor done and
materials and services furnished in connection with the Tenant Improvements. The
Tenant Improvements shall not be commenced until five (5) business days after
Landlord has received notice from Tenant stating the date the construction of
the Tenant Improvements is to commence so that Landlord can post and record any
appropriate Notice of Nonresponsibility.
F. Tenant acknowledges and agrees that the agreements and covenants of
Tenant in Sections 10 and 37 of the Lease shall be fully applicable to Tenant's
construction of the Tenant Improvements.
G. Tenant shall maintain, and cause to be maintained, during the
construction of the Tenant Improvements, at its sole cost and expense, insurance
of the types and in the amounts specified in Exhibit B-1 and in Section 12 of
the Lease, together with builders' risk insurance for the amount of the
completed value of the Tenant Improvements on an all-risk non-reporting form
covering all improvements under
2
<PAGE> 31
construction, including building materials, and other insurance in amounts and
against such risks as the Landlord shall reasonably require in connection with
the Tenant Improvements.
H. No materials, equipment or fixtures shall be delivered to or installed
upon the Premises pursuant to any agreement by which another party has a
security interest or rights to remove or repossess such items, without the prior
written consent of Landlord, which consent shall not be unreasonably withheld.
I. Landlord reserves the right to establish reasonable rules and
regulations for the use of the Building during the course of construction of the
Tenant Improvements, including, but not limited to, construction parking,
storage of materials, hours of work, use of elevators, and clean-up of
construction related debris.
J. Upon completion of the Tenant Improvements, Tenant shall deliver to
Landlord the following, all of which shall be to Landlord's reasonable
satisfaction:
(i) Any certificates required for occupancy, including a permanent and
complete Certificate of Occupancy issued by the City of Menlo Park.
(ii) A Certificate of Completion signed by the Architect who prepared
the Construction Documents, reasonably approved by Landlord.
(iii) A cost breakdown itemizing all expenses for the Tenant
Improvements, together with invoices and receipts for the same or other evidence
of payment.
(iv) Final and unconditional mechanic's lien waivers for all the Tenant
Improvements.
(v) A Notice of Completion for execution by Landlord, which certificate
once executed by Landlord shall be recorded by Tenant in the official records of
San Mateo, and Tenant shall then deliver to Landlord a true and correct copy of
the recorded Notice of Completion.
(vi) Redline version of the Construction Documents.
(vii) A true and complete copy of all as-built plans and drawings for
the Tenant Improvements.
5. TENANT IMPROVEMENT ALLOWANCE.
A. Subject to Tenant's compliance with the provisions of this Exhibit B,
Landlord shall provide to Tenant an allowance in the amount of one hundred
ninety-six thousand five hundred and 00/100 dollars ($196,500.00) (the "Tenant
Improvement Allowance") to construct and install only the Tenant Improvements.
The Tenant Improvement Allowance shall be used to design, prepare, plan, obtain
the approval of, construct and install the Tenant Improvements and for no other
purpose. Except as otherwise expressly provided herein, Landlord shall have no
obligation to contribute the Tenant Improvement Allowance unless and until the
Construction Documents have been approved by Landlord and Tenant has complied
with all requirements set forth in Paragraph 4.C. of this Exhibit B. The costs
to be paid out of the Tenant Improvement Allowance shall include all reasonable
costs and expenses associated with the design, preparation, approval, planning,
construction and installation of the Tenant Improvements (the "Tenant
Improvement Costs"), including all of the following:
(i) All costs of the Preliminary Plans and Specifications, the Final
Plans and Specifications, and the Construction Documents, and engineering costs
associated with completion of the State of California energy utilization
calculations under Title 24 legislation:
(ii) All costs of obtaining building permits and other necessary
authorizations from local governmental authorities;
(iii) All costs of interior design and finish schedule plans and
specifications including as-built drawings, if applicable;
(iv) All direct and indirect costs of procuring, constructing and
installing the Tenant Improvements in the Premises, including, but not limited
to, the construction fee for overhead and profit and the cost of all on-site
supervisory and administrative staff, office, equipment and temporary services
rendered by the Contractor in connection with the construction of the Tenant
Improvements; provided, however, that the construction fee for overhead and
profit, the cost of all on-site supervisory and administrative staff, office,
equipment and temporary services shall not exceed amounts which are reasonable
and customary for such items in the local construction industry;
(v) All fees payable to the Architect and any engineer if they are
required to redesign any portion of the Tenant Improvements following Tenant's
and Landlord's approval of the Construction Documents;
3
<PAGE> 32
(vi) Utility connection fees;
(vii) Inspection fees and filing fees payable to local governmental
authorities, if any;
(viii) All costs of all permanently affixed equipment and non-trade
fixtures provided for in the Construction Documents, including the cost of
installation; and,
(ix) A construction management fee payable to Landlord [in the amount of
three percent (3%) of the aggregate of the principal amount of the Amortized
Excess TI Costs (defined below) and the Tenant Improvement Allowance (the "CM
Fee")]based on a hourly fee of $100 per hour (the "CM Fee"). The CM Fee will be
billed on a time and materials basis.
The Tenant Improvement Allowance shall be the maximum contribution by Landlord
for the Tenant Improvement Costs. The Tenant Improvement Allowance will be
available through December 31, 1998, only, and the disbursement of the Tenant
Improvement Allowance is subject to the terms contained hereinbelow. Therefore,
written request for disbursement of the Tenant Improvement Allowance must occur
prior to December 31, 1998.
Except for payment of the CM Fee, Landlord will make payments to Tenant from the
Tenant Improvement Allowance to reimburse Tenant for Tenant Improvement Costs
paid or incurred by Tenant. Payment of the CM Fee shall be the first payment
from the Tenant Improvement Allowance and shall be made by means of a deduction
or credit against the Tenant Improvement Allowance. All other payments of the
Tenant Improvement Allowance shall be by progress payments not more frequently
than once per month and only after satisfaction of the following conditions
precedent: (a) receipt by Landlord of conditional mechanics' lien releases for
the work completed and to be paid by said progress payment, conditioned only on
the payment of the sums set forth in the mechanics' lien release, executed by
the Contractor and all subcontractors, labor suppliers and materialmen; (b)
receipt by Landlord of unconditional mechanics' lien releases from the
Contractor and all subcontractors, labor suppliers and materialmen for all work
other than that being paid by the current progress payment previously completed
by the Contractor, subcontractors, labor suppliers and materialmen and for which
Tenant has received funds from the Tenant Improvement Allowance to pay for such
work; (c) receipt by Landlord of any and all documentation reasonably required
by Landlord detailing the work that has been completed and the materials and
supplies used as of the date of Tenant's request for the progress payment,
including, without limitation, invoices, bills, or statements for the work
completed and the materials and supplies used; and (d) completion by Landlord or
Landlord's agents of any inspections of the work completed and materials and
supplies used as deemed reasonably necessary by Landlord. Except for the CM Fee
payment (credit), Tenant Improvement Allowance progress payments shall be paid
to Tenant within fourteen (14) days from the satisfaction of the conditions set
forth in the immediately preceding sentence. The preceding notwithstanding, all
Tenant Improvement Costs paid or incurred by Tenant prior to Landlord's approval
of the Construction Documents in connection with the design and planning of the
Tenant Improvements by Architect shall be paid from the Tenant Improvement
Allowance, without any retention, within fourteen (14) days following Landlord's
receipt of invoices, bills or statements from Architect evidencing such costs.
Notwithstanding the foregoing to the contrary, Landlord shall be entitled to
withhold and retain five percent (5%) of the Tenant Improvement Allowance or of
any Tenant Improvement Allowance progress payment until the lien-free expiration
of the time for filing of any mechanics' liens claimed or which might be filed
on account of any work ordered by Tenant or the Contractor or any subcontractor
in connection with the construction and installation of the Tenant Improvements.
B. Landlord shall not be obligated to pay any Tenant Improvement Allowance
progress payment or the Tenant Improvement Allowance retention if on the date
Tenant is entitled to receive the Tenant Improvement Allowance progress payment
or the Tenant Improvement Allowance retention Tenant is in default of this
Lease. Such payments shall resume upon Tenant curing any such default within the
time periods which may be provided for in the Lease.
C. Should the total cost of constructing the Tenant Improvements be less
than the Tenant Improvement Allowance, the Tenant Improvement Allowance shall be
automatically reduced to the amount equal to said actual cost.
D. The term "Excess Tenant Improvement Costs" as used herein shall mean and
refer to the aggregate of the amount by which the actual Tenant Improvement
Costs exceed the Tenant Improvement Allowance. A portion of the Excess Tenant
Improvement Costs up to a maximum amount of nineteen thousand eight hundred
dollars ($19,800.00) shall be paid by Landlord in the same manner as the Tenant
Improvement Allowance and such Excess Tenant Improvement Costs will then be
amortized over the initial term of the Lease at the rate of twelve percent (12%)
per annum and such amortized amount (including interest charges) shall be paid
by Tenant to Landlord with, and as part of, the Base Rent for the Premises in
accordance with the provisions and requirements of Section 3 of the Lease (the
"Amortized Excess TI Costs"). Within two (2) weeks after the Tenant Improvements
have been substantially completed and the actual Tenant Improvement Costs are
known, the parties shall execute and deliver a written amendment to the Lease,
in the form acceptable to the parties, wherein there shall be specified, inter
alia, the amount of the Base Rent payable by Tenant during the initial term of
the
Language indicated as being shown by strike-out in the typeset document
is enclosed in brackets "[" and "]" in the electronic format.
4
<PAGE> 33
Lease after taking into account the amount of the Amortized Excess TI Costs.
Tenant shall promptly pay any and all Excess Tenant Improvement Costs in excess
of the principal amount of the Amortized Excess TI Costs.
6. TENANT'S COVENANT TO CONSTRUCT ADDITIONAL TENANT IMPROVEMENTS.
A. Subject to the provisions above and concurrent with the planning and
construction of the Tenant Improvements. Tenant hereby covenants and agrees to
contribute its own funds (which funds to be used in addition to the Tenant
Improvement Allowance in Section 5 of this Exhibit B) for the planning,
construction and completion of interior tenant improvements to fully improve
the unimproved warehouse portions of the Premises (the "Additional Tenant
Improvements"). The Additional Tenant Improvements shall be made in strict
accordance with the terms and conditions of Sections 2, 3 & 4 of this Exhibit B.
The Additional Tenant Improvements shall not include any of Tenant's personal
property, trade fixtures, furnishings, equipment or similar items.
B. The Additional Tenant Improvements shall be constructed in accordance
with Landlord's Building Standards attached hereto as Exhibit B-2; provided
however, all finishes shall match the finishes already installed throughout the
Premises. The Additional Tenant Improvements shall consist of improvements which
will convert the existing warehouse portion of the Premises into office
improvements, including, without limitation, the following improvements:
(i) duct work, terminal boxes, diffusers and accessories required for
the completion of the heating, ventilation and air conditioning systems serving
the Premises;
(ii) partitioning, doors, floor coverings, finishes, ceilings, wall
coverings, painting, millwork and similar items:
(iii) electrical wiring, lighting fixtures, outlets and switches and
other electrical work; and
(iv) all fire and life safety control systems such as sprinklers,
halon, fire alarms, including piping, wiring and accessories.
7. Termination. If the Lease is terminated prior to the date on which the Tenant
Improvements are completed, for any reason due to the default of Tenant
hereunder, in addition to any other remedies available to Landlord under the
Lease, Tenant shall pay to Landlord as Additional Rent under the Lease, within
five (5) days of receipt of a statement therefor, any and all costs incurred by
Landlord and not reimbursed or otherwise paid by Tenant through the date of
termination in connection with the Tenant Improvements to the extent planned,
installed and/or constructed as of such date of termination, including, but not
limited to, any costs related to the removal of all or any portion of the Tenant
Improvements and restoration costs related thereto. Subject to the provisions of
Section 10.2 of the Lease, upon the expiration or earlier termination of the
Lease, Tenant shall not be required to remove the Tenant Improvements it being
the intention of the parties that the Tenant Improvements are to be considered
incorporated into the Building.
8. Lease Provisions; Conflict. The terms and provisions of the Lease, insofar as
they are applicable, in whole or in part, to this EXHIBIT B, are hereby
incorporated herein by reference, and specifically including all of the
provisions of Section 31 of the Lease. In the event of any conflict between the
terms of the Lease and this EXHIBIT B, the terms of this EXHIBIT B shall
prevail. Any amounts payable by Tenant to Landlord hereunder shall be deemed to
be Additional Rent under the Lease and, upon any default in the payment of same,
Landlord shall have all rights and remedies available to it as provided for in
the Lease.
INITIALS:
TENANT: /S/
-------
LANDLORD: /S/
-------
5
<PAGE> 34
EXHIBIT B-1
CONSTRUCTION INSURANCE REQUIREMENTS
Before commencing work, the contractor shall procure and maintain at its sole
cost and expense until completion and final acceptance of the work, at least the
following minimum levels of insurance.
A. Workers' Compensation in statutory amounts and Employers Liability
Insurance in the minimum amounts of $100,000 each accident for bodily
injury by accident and $100,000 each employee for bodily injury by disease
with a $500,000 policy limit, covering each and every worker used in
connection with the contract work.
B. Comprehensive General Liability Insurance on an occurrence basis
including, but not limited to, protection for Premises/Operations
Liability, Broad Form Contractual Liability, Owner's and Contractor's
Protective, and Products/Completed Operations Liability*, in the following
minimum limits of liability.
Bodily Injury, Property Damage, and
Personal Injury Liability $2,000,000/each occurrence
$3,000,000/aggregate
* Products/Completed Operations Liability Insurance is to be provided for
a period of at least one (1) year after completion of work.
Coverage should include protection for Explosion, Collapse and Underground
Damage.
C. Comprehensive Automobile Liability Insurance with the following minimum
limits of liability.
Bodily Injury and Property $1,000,000/each occurrence
Damage Liability $2,000,000/aggregate
This insurance will apply to all owned, non-owned or hired automobiles to
be used by the Contractor in the completion of the work.
D. Umbrella Liability Insurance in a minimum amount of five million dollars
($5,000,000), providing excess coverage on a following-form basis over the
Employer's Liability limit in Paragraph A and the liability coverages
outlined in Paragraphs B and C.
E. Equipment and Installation coverages in the broadest form available
covering Contractor's tools and equipment and material not accepted by
Tenant. Tenant will provide Builders Risk Insurance on all accepted and
installed materials.
All policies of insurance, duplicates thereof or certificates evidencing
coverage shall be delivered to Landlord prior to commencement of any work and
shall name Landlord, and its partners and lenders as additional insureds as
their interests may appear. All insurance policies shall (1) be issued by a
company or companies licensed to be business in the state of California, (2)
provide that no cancellation, non-renewal or material modification shall be
effective without thirty (30) days prior written notice provided to Landlord,
(3) provide no deductible greater than $15,000 per occurrence, (4) contain a
waiver to subrogation clause in favor of Landlord, and its partners and lenders,
and (5) comply with the requirements of Sections 12.2, 12.3 and 12.4 of the
Lease to the extent such requirements are applicable.
INITIALS:
TENANT: /s/
-----------------
LANDLORD: /s/
-----------------
<PAGE> 35
EXHIBIT B-2
BUILDING STANDARDS
OFFICE AREA
DEMISING PARTITION AND CORRIDOR WALLS:
A. 6" 20-gauge metal studs at 24" O.C. (or as required by code for span)
framed full height from finish floor to structure above
B. One (1) layer 5/8" drywall Type "X" both sides of wall, fire taped only
INTERIOR PARTITIONS:
A. 3 5/8" 25-gauge metal studs at 24" O.C. to bottom of T-bar ceiling grid
approximately 9' - 0' high
B. Top track to be pre-formed slotted aluminum taped in
C. One (1) layer 5/8" drywall both sides of wall, taped texture ready for
paint
D. 3 5/8" metal studs including all lateral bracing as required by code
PERIMETER DRYWALL (AT OFFICE AREAS):
A. One (1) layer 5/8" Type "X" drywall taped texture ready for paint
B. Provide alternate to texture concrete in lieu of furring walls
COLUMN FURRING:
A. Furring channel all sides
B. One (1) layer 5/8" drywall taped texture and ready for paint
C. Provide deductive alternate for texturing columns where there are no
pipes to furred out
ACOUSTICAL CEILINGS:
A. 2' x 4' standard white T-bar grid system as manufactured by Chicago
Metallic or equal
B. 2' x 4' x 5/8" white, fissured, non-directional acoustical tile to be
Cortega as manufactured by
Armstrong or equal
PAINTING:
A. Sheetrock walls to receive two (2) coats of interior latex paint as
manufactured by Kelly Moore or equal. Some portions of second coat to
be single accent color.
B. Provide a deductive alternate for not painting warehouse walls
WINDOW COVERING:
A. 1" aluminum mini-blinds as manufactured by Levelor or equal, color to
be selected by Lincoln Property Company
B. Blinds to be sized to fit window module
VCT:
VCT to be 1/8" x 12" x 12" as manufactured by Armstrong - Excelon Series or
equal
LIGHT FIXTURES:
2' x 4' T-bar lay in 3-tube energy efficient fixture with cool white
fluorescent tubes with prismatic acrylic lens as manufactured by Lithonia
or equal
LIGHT SWITCHES:
A. Double switching as required by Title 24
B. Switch assembly to be Leviton, color - Ivory
1
<PAGE> 36
ELECTRICAL OUTLET:
A. 110-v duplex outlet in demising or interior partitions only, as
manufactured by Leviton, color to be Ivory
B. Eight (8) outlets per circuit, spacing to meet code (2 per office)
C. Transformers to be a minimum of 20% or over required capacity
D. Contractors to inspect electric room and to include all necessary
metering costs
E. No aluminum wiring is acceptable
TELEPHONE OUTLET:
A. One (1) single outlet box in wall with pullwire from outlet box to area
above T-bar ceiling per office
B. Cover plate for phone outlets to be included
FIRE SPRINKLERS:
As required by fire codes
TOPSET BASE:
A. 4" rubber base as manufactured by Burke or equal, standard colors only
B. 4" rubber base at VCT areas
TOILET AREAS:
Wet walls to receive marlite up to 48". Floors to receive sheetvinyl and
cove base as required by code
CARPET:
Minimum 30 ounce, commercial grade, level loop, UM44-C. Type 1 Class 1.
100% continuous filament. 5-year wear guarantee. Glue down, no pad.
WOOD DOORS:
Shall be 3'-0" x 7'-0" x 1 3/4" (unless otherwise specified) solid core,
prefinished birch "Cal-Wood" B-3 or equal if approved by owner
DOOR FRAMES:
Shall be ACI or equal, 3 3/4" or 4 7/8" throat, aluminum, dark bronze
anodized, snap-on trim
HARDWARE:
Shall be "Schlage", a lever type "Levon" D series, dark bronze 613 finish,
2 3/4" backset. Closers (where required) shall be Duro X PA X SN-1
INSULATION:
By Title 24 insulation
PLUMBING:
A. Shall comply with all local codes and handicapped code requirements.
Fixtures shall be either "American Standard", "Koher" or "Norris". All
toilet accessories and grab bars shall be "Bobrick" or equal and
approved by owner
B. Plumbing bid shall include 5 gallon minimum, or insta hot with mixer
valve electric water heater
TOILET PARTITIONS:
Shall be as manufactured by Fiat, global or equal if approved by owner.
Color shall be chosen by tenant
2
<PAGE> 37
HVAC:
Five (5) year warranty provided on all HVAC compressor units. All
penetrations and sleeper supports to be hot mopped to LPC standard. Provide
alternate price for electric heat pumps at conditioned spaces. Provide
time overlay switch at compressors.
WAREHOUSE AREAS:
Floor - sealed concrete
Fire Extinguishers - 2A 10 BC surface mount by code x by S.F.
Lighting - 1x8 strip lighting single tube chain hung 25 ft.
Draft stops - by code UBC 198 Edition
Service electrical outlets - HVAC or heaters at tenant cost
(400 W metal halide lighting are acceptable in lieu of strip lighting at
warehouse minimum 15 F.C.)(1)
INITALS:
TENANT: /s/
---------
LANDLORD: /s/
---------
3
<PAGE> 38
EXHIBIT C TO LEASE AGREEMENT
RULES & REGULATIONS
This exhibit, entitled "Rules & Regulations", is and shall constitute EXHIBIT C
to that certain Lease Agreement dated February 13, 1996 (the "Lease"), by and
between LINCOLN MENLO IV & V ASSOCIATES LIMITED, a California limited
partnership ("Landlord"), and Sequus Pharmaceuticals, Inc., a Delaware
corporation ("Tenant"), for the leasing of certain premises located at 960-978
Hamilton Court, Menlo Park, California 94025, (the "Premises"). The terms,
conditions and provisions of this EXHIBIT C are hereby incorporated into and are
made a part of the Lease. Any capitalized terms used herein and not otherwise
defined herein shall have the meaning ascribed to such terms as set forth in the
Lease:
1. No advertisement, picture or sign of any sort shall be displayed on or
outside the Premises or the Building without the prior written consent
of Landlord. Landlord shall have the right to remove any such
unapproved item without notice and at Tenant's expense.
2. Tenant shall not regularly park motor vehicles in designated parking
areas after the conclusion of normal daily business activity.
3. Tenant shall not use any method of heating or air conditioning other
than that supplied by Landlord without the prior written consent of
Landlord.
4. All window coverings installed by Tenant and visible from the outside
of the Building require the prior written approval of Landlord.
5. Tenant shall not use, keep or permit to be used or kept any foul or
noxious gas or substance or any flammable or combustible materials on
or around the Premises, the Building or the Park.
6. Tenant shall not alter any lock or install any new locks or bolts on
any door at the Premises without the prior consent of Landlord.
7. Tenant agrees not to make any duplicate keys without the prior consent
of Landlord.
8. Tenant shall park motor vehicles in those general parking areas as
designated by Landlord except for loading and unloading. During those
periods of loading and unloading, Tenant shall not unreasonably
interfere with traffic flow within the Park and loading and unloading
areas of other tenants.
9. Tenant shall not disturb, solicit or canvas any occupant of the
Building or Park and shall cooperate to prevent same.
10. No person shall go on the roof without Landlord's permission.
11. Business machines and mechanical equipment belonging to Tenant which
cause noise or vibration that may be transmitted to the structure of
the Building, to such a degree as to be objectionable to Landlord or
other Tenants, shall be placed and maintained by Tenant, at Tenant's
expense, on vibration eliminators or other devices sufficient to
eliminate noise or vibration.
12. All goods, including material used to store goods, delivered to the
Premises of Tenant shall be immediately moved into the Premises and
shall not be left in parking or receiving areas overnight.
13. Tractor trailers which must be unhooked or parked with dolly wheels
beyond the concrete loading areas must use steel plates or wood blocks
under the dolly wheels to prevent damage to the asphalt paving
surfaces. No parking or storing of such trailers will be permitted in
the auto parking areas of the Park or on streets adjacent thereto.
14. Forklifts which operate on asphalt paving areas shall not have solid
rubber tires and shall only use tires that do not damage the asphalt.
15. Tenant is responsible for the storage and removal of all trash and
refuse. All such trash and refuse shall be contained in suitable
receptacles stored behind screened enclosures at locations approved by
Landlord.
16. Tenant shall not store or permit the storage or placement of goods, or
merchandise or pallets or equipment of any sort in or around the
Premises, the Building, the Park or any of the Common Areas of the
foregoing. No displays or sales of merchandise shall be allowed in the
parking lots or other Common Areas.
17. Tenant shall not permit any animals (except for those animals required
for Tenant to conduct its research), including, but not limited to, any
household pets, to be brought or kept in or about the Premises, the
Building, the Park or any of the Common Areas of the foregoing.
18.Tenant shall not permit any motor vehicles to be washed on any portion
of the Premises or in the Common Areas of the Park, nor shall Tenant
permit mechanical work or maintenance of motor vehicles to be performed
on any portion of the Premises or in the Common Areas of the Park.
INITALS:
TENANT: /s/
---------
LANDLORD: /s/
---------
<PAGE> 39
EXHIBIT F
FIRST AMENDMENT TO LEASE AGREEMENT
CHANGE OF COMMENCEMENT DATE
This First Amendment to Lease Agreement (the "Amendment") is made and entered
into as of ___________________, by and between ____________________________
("LANDLORD"), AND ________________________ ("TENANT"), with reference to the
following facts:
RECITALS
A. Landlord and Tenant have entered into that certain Lease Agreement dated
___________ (the "Lease"), for the leasing of certain premises located at
____________________________, California (the "Premises") as such Premises
are more fully described in the Lease.
B. Landlord and Tenant wish to amend the Commencement Date of the Lease.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Landlord and Tenant hereby agree as follows:
1. The Commencement Date of the Lease shall be ________________________.
2. The last day of the Term of the Lease (the "Expiration Date") shall
be ______________.
3. The dates on which the Base Rent will be adjusted are:
for the period _________ to ________ the monthly Base Rent shall be
$_____________;
for the period _________ to ________ the monthly Base Rent shall be
$_____________; and
for the period _________ to ________ the monthly Base Rent shall be
$_____________.
4. Effect of Amendment: Except as modified herein, the terms and
conditions of the Lease shall remain unmodified and continue in full
force and effect. In the event of any conflict between the terms and
conditions of the Lease and this Amendment, the terms and conditions
of this Amendment shall prevail.
5. Definitions: Unless otherwise defined in this Amendment, all terms
not defined in this Amendment shall have the meaning set forth in the
Lease.
6. Authority: Subject to the provisions of the Lease, this Amendment
shall be binding upon and inure to the benefit of the parties hereto,
their respective heirs, legal representatives, successors and
assigns. Each party hereto and the persons signing below warrant that
the person signing below on such party's behalf is authorized to do
so and to bind such party to the terms of this Amendment.
7. The terms and provisions of the Lease are hereby incorporated in this
Amendment.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date and
year first above written.
TENANT:
Sequus Pharmaceuticals, Inc.,
a Delaware corporation
By:
-------------------------------
Its:
-------------------------------
By:
-------------------------------
Its:
-------------------------------
Date:
-------------------------------
LANDLORD:
LINCOLN MENLO IV & V ASSOCIATES LIMITED,
a California limited partnership
By: Lincoln Property Company Management Services, Inc.,
As Manager and Agent for Landlord
By:
-------------------------------
Vice President
Date:
-------------------------------
INITIALS:
TENANT: /s/
-------
LANDLORD: /s/
-------
<PAGE> 40
EXHIBIT D
WILLOW PARK
DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS
This Declaration of Covenants, Conditions and Restrictions (hereinafter
called "Declaration") is made this twenty-fifth day of August 1979, by LINCOLN
PROPERTY COMPANY NO. 1179, A CALIFORNIA LIMITED PARTNERSHIP (PHASE 6)
(hereinafter called "Lincoln Property Company").
RECITALS
1. Declarant is, or at the time of recording this Declaration will be, the
Owner in fee of all that certain real property which is situated in the City of
Menlo Park, County of San Mateo, State of California, described on the map
(hereinafter called "Map") entitled "Menlo Industrial Center, Menlo Park,
California" which Map is filed in the office of the Recorder of the County of
San Mateo, State of California, on October 1, 1979, in Book No. 99 of Maps, at
pages 81, 82 and 83.
2. As Owner of the real property described in Paragraph 1 of these
Recitals, Declarant has executed this Declaration for the purpose of imposing
upon all portions of said real property (other than Parcel E as shown on the
Map) a general plan of improvement for the benefit of said real property (other
than said Parcel E) and its present and future owners. Said real property (other
than Parcel E) is hereinafter called the "Property."
NOW, THEREFORE, Declarant hereby declares that the Property is now held,
and shall hereafter be held, developed, encumbered, hypothecated, transferred,
sold, leased, conveyed, improved, used and occupied subject to the covenants,
conditions, restrictions and limitations hereinafter set forth, all of which are
declared to be in furtherance of a plan for the development and operation of a
landscaped business and industrial park and are established for the purpose of
enhancing and protecting the value, attractiveness and desirability of the
Property and every part thereof. Each of the covenants, conditions, restrictions
and limitations set forth herein shall run with the land, and every part
thereof, and shall burden as well as inure to the benefit of and pass with each
and every portion of the Property hereinafter developed, encumbered,
hypothecated, transferred, sold, leased, conveyed, improved, used or occupied
and shall apply to and bind any and all parties having or acquiring any right,
title, license or interest in the Property or any part thereof.
ARTICLE I
DEFINITIONS
Unless the context otherwise specifies or requires, the terms defined in
this Article I shall, for all purposes of this Declaration, have the meanings
herein specified.
1.1 Building. "Building" shall mean the principal structure or structures
on any Site, including all garages, outside platforms, outbuildings, docks and
the like.
1.2 Declarant. "Declarant shall mean Lincoln Property Company, its
successors and assigns. Declarant's assigns shall be deemed to include any party
whom Declarant designates, by means of a notice recorded in the Official Records
of San Mateo County, as the party who, from and after the date such notice is
recorded, will perform Declarant's functions under this Declaration.
1.3 Deed of Trust. "Deed of Trust" shall mean, with respect to any portion
of the property, a duly recorded Deed of Trust, mortgage or other instrument
which created a lien on the portion of the Property is describes.
1.4 Improvements. "Improvements" shall mean and include without limitation
buildings, outbuildings, pedestrian and vehicle access facilities, parking
areas, loading areas, fences, walls, hedged mass plantings, landscaping, poles,
signs and any structures of any type or kind.
1.5 Owner. "Owner" shall mean any person, firm, corporation or other legal
entity (including Declarant) which owns fee title to a Site, as shown by the
Official Records of the County of San Mateo; provided, however, that the term
"Owner" shall not include a mortgage or beneficiary under a deed of trust
holding a security interest in a Site unless such mortgagee or beneficiary is in
actual physical possession of the Site.
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Whenever this Declaration creates or imposes an obligation with
respect to a Site, the Owner of the Site shall be responsible for the timely and
proper performance of the obligation, notwithstanding any delegation of such
responsibility by lease, contract, or otherwise to another party.
1.6 Property. "Property" shall mean that certain real property subject to
the covenants, conditions and restrictions set forth herein, namely, that real
property described on Exhibit A attached hereto and incorporated herein.
1.7 Site. "Site" shall mean a continuous area of land within the Property
which is owned of record by the same Owner, whether shown as one parcel on any
recorded map or as a combination of parcels or of portions thereof.
ARTICLE II
REGULATION OF USES
2.1 Permitted Uses. Unless otherwise specifically prohibited herein, or by
applicable law, any business/industrial use will be permissible if it does not
constitute a nuisance to adjacent Sites. Permitted uses will include, but not be
limited to, manufacturing, warehousing, distribution, cartage, processing,
storage, wholesaling, office, laboratory, professional and research and
development.
2.2 Nuisance. No noxious or offensive activity shall be carried on nor
shall anything be done on any Site which may be or become an annoyance or
nuisance to the Owners or occupants of other Sites, or which will be offensive
to the Owners or occupants of other Sites by reason of odor, fumes, discharge of
any chemical or industrial waste above or below ground, dust, dirt, fly-ash,
smoke, noise, glare or which will be hazardous by reason of danger of fire or
explosion or any other hazard.
2.3 Right of Entry. During reasonable hours and subject to reasonable
security requirements, Declarant or its authorized representative shall have the
right to enter upon and inspect any Building and/or Site and the Improvements
thereon for the purpose of ascertaining whether or not the provisions of this
Declaration have been or are being complied with and shall not be deemed guilty
of trespass by reason of such entry.
ARTICLE III
REGULATION OF IMPROVEMENTS
3.1 Minimum Setback Lines
(a) General. No Improvement and no part thereof shall be placed on
any Site closer to a property line than herein provided. The following
Improvements are specifically excluded from these setback provisions:
(1) Roof overhang, subject to the specific approval of
Declarant in writing.
(2) Steps and walks.
(3) Paving and associated curbing, except that vehicle parking
areas shall not be permitted within ten (10) feet of the street
property line or lines.
(4) Fences, except that no fence shall be placed within the
street setback area unless specific approval is given by Declarant in
writing.
(5) Landscaping.
(6) Planters, not to exceed three (3) feet in height.
(7) Railroad spur tracks, switches and bumpers, provided that
the location of such tracks, switches and bumpers is specifically
approved by Declarant in writing.
(8) Displays identifying the Owner, Lessee or occupant,
subject to the specific approval of Declarant in writing.
(b) Setback from interior property lines. No setback is established
from a rear or side interior property line. The interior lot lines for a corner
lot shall be considered to have a real property line.
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(c) Setback Street Property Lines. The setback line is established as
twenty (20) feet from property line on all streets on the property.
3.2 Completion of Construction. After commencement of construction of any
Improvement, the Owner shall diligently prosecute the work thereon to the end
that the Improvement shall not remain in a partly finished condition any longer
than reasonably necessary for the completion thereof.
3.3 No excavation shall be made except in connection with construction of
an Improvement, and upon completion thereof, exposed openings shall be
backfilled and disturbed ground shall be graded and leveled.
3.4 Landscaping.
(a) Every Site on which a Building shall have been placed shall be
landscaped according to plans approved as specified herein and maintained
thereafter in a sightly and well-kept condition.
(b) An Owner, Lessee or occupant shall landscape and maintain unpaved
areas between the property lines and the setback lines.
(c) An Owner, Lessee or occupant shall provide hose bibs and
maintenance facilities in the vicinity of the landscaped areas.
(d) Landscape as approved by Declarant shall be installed within
ninety (90) days of occupancy or completion of the Building, whichever
occurs first.
3.5 Site Maintenance. All Improvements on each Site including, without
limitation, all walks, driveways, fences, parking areas, landscaping and the
exterior of all structures on each Site, shall be maintained free of litter and
debris and in good condition, order and repair. Landscaping shall be kept in
thriving condition, weed-free and neatly trimmed. All undeveloped Sites shall be
kept clean, mowed and in a condition so as not to be a dust or weed problem.
3.6 Signs and Lighting. No signs or displays shall be created on any
Site, other than the following:
(a) Signs identifying the name, building and business of any person
or firm occupying a Site, the size, design and color of which has been
specifically approved by Declarant in writing; and
(b) Offering a Site for sale or lease if Declarant has specifically
approved said signs in writing.
All signs and displays shall be located below the roof line of the
building and shall comply with all applicable laws and ordinances.
Lighting shall be restricted to parking and security lights, fire
lighting and low-level sign illumination and floodlighting of buildings or
landscaping. All lighting shall be shielded and contained within property
lines.
3.7 Parking Areas. Adequate parking on a Site shall be provided to
accommodate all parking needs for employees, visitors and company vehicles.
There shall also be adequate areas provided for truck loading and unloading. The
intent of this provision is to eliminate the need for any on-street parking. If
parking or loading requirements increase as a result of a change in use or
number of employees, additional off-street parking shall be provided to satisfy
the intent of this section.
3.8 Building Regulations. Any building erected on a Site shall conform to
the following construction practices:
(a) Exterior walls of sheet or corrugated iron, steel, aluminum or
asbestos will be permitted only upon specific approval in writing by
Declarant.
(b) Exterior walls shall be painted or suitably treated in a manner
acceptable to Declarant.
ARTICLE IV
APPROVAL OF PLANS
4.1 No Improvement shall be erected, placed, altered, maintained or
permitted to remain on any land subject to these restrictions until plans and
specifications showing plot layout, including parking and all exterior
elevations, with materials and colors, have been submitted to and approved in
writing by
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Declarant. Said approval shall be in addition to any approvals and/or permits
required by the City of Menlo Park or any other legal entity having
jurisdiction. Such plans and specifications shall be submitted in writing over
the signature of the Owner of Lessee of the Site or his authorized agent.
4.2 Approval shall be based, among other things, on adequacy of Site
dimensions, adequacy of structural design, conformity and harmony of external
design with neighboring Improvements, effect of location and use of Improvements
on neighboring Sites; proper facing of main elevation with respect to nearby
streets; and conformity of the plans and specifications to the purpose and
general plan and intent of these restrictions. Declarant shall not arbitrarily
or unreasonably withhold its approval of such plans and specifications.
4.3 If Declarant fails either to approve or to disapprove such plans and
specifications within thirty (30) days after the same have been submitted to it,
it shall be conclusively presumed that Declarant has approved said plans and
specifications, subject, however, to the restrictions contained in ARTICLE III
hereof.
4.4 Notwithstanding anything to the contrary herein contained, after the
expiration of one year from the date of issuance of a building permit by
municipal or other governmental authority for any Improvement, said Improvement
shall, in favor of purchasers and encumbrancers in good faith and for value, be
deemed to be in compliance with all provisions of this ARTICLE IV, unless actual
notice of such non-compliance or non-completion executed by Declarant shall
appear of record in the office of the County Recorder of San Mateo County,
California, or unless legal proceedings shall have been instituted to enforce
compliance or completion.
4.5 Fee. An architectural review fee shall be paid to Declarant at the
time plans are submitted for approval based upon the following schedule:
(a) When the plans submitted are prepared by an architect licensed to
practice in the State of California, the architectural review fee shall be
$100.00.
(b) In all other cases, the architectural review fee shall be
$200.00.
ARTICLE V
DURATION AND MODIFICATION AND REPEAL
5.1 Term. This Declaration, every provision hereof and every covenant,
conditions and restriction contained herein shall continue in full force and
effect for a period of sixty (60) years from the date hereof.
5.2 Termination and Modification. This Declaration or any provisions
thereof or any covenant, condition or restriction contained herein may be
terminated, extended, modified or amended as to the whole of said property or
any portion thereof, with the written consent of the Owners of sixty-five
percent (65%) in area of the Property; provided that so long as Declarant owns
at least twenty percent (20%) in area of the Property, no such termination,
extension, modification or amendment shall be effective without Declarant's
written approval. No termination, extension, modification or amendment hereof
shall be effective until a written instrument embodying the same has been
executed and recorded in the Official Records of San Mateo County.
ARTICLE VI
ENFORCEMENT
6.1 Abatement and Suit. Violation or breach of any restriction herein
contained shall give to Declarant the right to enter upon the Property upon or
as to which said violation or breach exists and summarily to abate and remove at
the expense of the Owner, Lessee or occupant thereof any structure, thing or
condition that may be or exist thereon contrary to the intent and meaning of the
provisions hereof, or to prosecute a proceeding at law or in equity against the
person or persons who have violated or are attempting to violate any of these
restrictions to enjoin or prevent them from doing so, to cause said violation to
be remedied or to recover damages for said violation. In addition, every Owner
of a Site shall have the right, in the event of violation or breach of any
restriction herein contained, to prosecute a proceeding at law or in equity
against the person or persons who have violated or are attempting to violate any
of these restrictions to enjoin or to recover damages for said violation. All
remedies provided herein or at law or in equity shall be cumulative and not
exclusive.
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6.2 Deemed to Constitute a Nuisance. The result of every action or
omission whereby any restriction herein contained is violated in whole or in
part is hereby declared to be and to constitute a nuisance. Every remedy allowed
by law or equity against an Owner, either public or private, shall be applicable
against every such result and may be exercised by Declarant or by any Owner of
property subject hereto. Any costs or expenses paid or incurred by Declarant or
an Owner (collectively referred to as "Declarant" in this Section 6.2) in
abating such nuisance or prosecuting any such remedy (including all reasonable
attorneys' fees and costs of collection), together with interest thereon at the
rate of ten percent (10%) per annum, shall be a charge against the Site on which
the nuisance has occurred or is occurring, shall be a continuing lien thereon
until paid, and shall also be the personal obligation of the Owner of such Site
when such charges became due and who committed such breach or violation. In
addition to any other rights or remedies hereunder, Declarant may deliver to the
Owner of the Site on which the nuisance has occurred or is occurring and record
with the San Mateo County Recorder a certificate of notice of claim of lien. If
the violation recited in such lien claim has not been cured to Declarant's
satisfaction and any recited amounts so charged have not been paid within thirty
(30) days thereafter, Declarant or its authorized representative may foreclose
such lien by a sale conducted pursuant to Sections 2924, 2924b and 2924c of the
California Civil Code, as amended from time to time, or other statues applicable
to the exercise of powers of sales in mortgages or Deeds of Trust, or in any
other manner permitted by law. Declarant, through its authorized
representatives, may bid on and acquire any land subject to such lien at any
such foreclosure sale. If the violations recited in such lien claim are timely
cured and any recited amounts timely paid as provided above, Declarant shall
forthwith record an appropriate release of such lien at Declarant's sole
expense.
6.3 Attorneys' Fees. In any legal or equitable proceeding for the
enforcement or to restrain the violation of this Declaration or any provision
hereof, the losing party or parties shall pay the attorneys' fees of the
prevailing party or parties, in such amount as may be fixed by the court in such
proceedings.
6.4 Failure to Enforce Not a Waiver of Rights. The failure of Declarant or
any Owner to enforce any restriction herein contained shall in no event be
deemed to be a waiver of the right to do so thereafter nor of the right to
enforce any other restriction.
ARTICLE VII
MISCELLANEOUS PROVISIONS
7.1 Assignment of Declarant's Rights and Duties. Declarant may assign any
and all of its rights, powers, reservations and obligations hereunder to any
person, corporation or association. To be effective, any such assignments must
be accepted in writing by the assignee and the acceptance must be recorded in
the Official Records of San Mateo County. To the extent of the assignment, the
assignee shall have the same rights, obligations, duties and powers and be
subject to the same obligations and duties as given to and assumed by Declarant
herein. The term Declarant as used herein includes all such assignees and their
heirs, successors and assigns. Declarant may also resign as Declarant by
recording a written notice of resignation in the Official Records of San Mateo
County and mailing a copy thereof to each then Owner. The resignation shall be
effective on the date it is recorded and Declarant shall thereafter have no
further rights, powers, reservations, obligation or liabilities hereunder. If at
any time Declarant either resigns or ceases to exist without making an
assignment of its authority as Declarant, a successor Declarant may be appointed
in the same manner as this Declaration may be terminated, extended, modified or
amended under Section 2 of ARTICLE IV.
7.2 Constructive Notice and Acceptance. Every person or other entity who
now or hereafter owns or acquires any right, title or interest in or to any
portion of the Property is and shall be conclusively deemed to have consented
and agreed to every covenant, condition and restriction contained herein,
whether or not any reference to this Declaration is contained in the instrument
by which such person or entity acquired an interest in said property.
7.3 Waiver. Neither Declarant nor its successors or assigns shall be
liable to any Owner, Lessee, licensee or occupant of land subject to his
Declarant by reason of any mistake in judgment, negligence, nonfeasance, action
or inaction and/or for the enforcement or failure to enforce any provision of
this Declaration. Every Owner, Lessee, licensee or occupant of any of said
property by acquiring his interest therein agrees that he will not bring any
action or suit against Declarant to recover any damages or to seek equitable
relief because of any mistake in judgment, negligence, nonfeasance, action or
inaction and/or the enforcement or failure to enforce any provision of this
Declaration.
7.4 Mutuality, Reciprocity, Runs with Land. All covenants, conditions,
restrictions and agreements contained herein are made for the direct, mutual and
reciprocal benefit of each and every part and parcel of the property now or
hereafter made subject to this Declaration, shall create reciprocal rights and
obligations between the respective Owners of all parcels and privity of contract
and estate between all
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grantees of said parcels, their heirs, successors and assigns, and shall, as to
the Owner of each parcel, his heirs, successors and assigns, operate as
covenants running with the land for the benefit of all other parcels.
7.5 Rights of Beneficiaries. No breach of the restrictions and other
provisions contained herein shall defeat or render invalid the lien of any Deed
of Trust now or hereafter executed upon land subject to these restrictions;
provided, however, that if any portion of said property is sold under a
foreclosure of any mortgage or under the provisions of any deed of trust, any
purchaser at such sale and his successors and assigns shall hold any and all
property so purchased subject to all of the restrictions and other provisions of
this Declaration.
7.6 Paragraph Headings. Paragraph headings, where used herein, are
inserted for convenience only and are not intended to be a part of this
Declaration or in any way to define, limit or describe the scope and intent to
the particular paragraphs to which they refer.
7.7 Effect of Invalidation. If any provision of this Declaration is held
to be invalid by any court, the invalidity of such provision shall not affect
the validity of the remaining provisions hereof.
7.8 Existing Improvements. Improvements which are completely constructed
on the date this Declaration is recorded are deemed to satisfy all the
requirements hereof.
7.9 Estoppel Certificate. At the request of an Owner, Declarant shall
supply to such Owner or any actual or potential encumbrancer or purchaser of a
Site a written certificate stating that there are no violations hereof, or if
there are any such violations, the nature of such violations. Such certificate
shall be delivered within ten (10) working days after such request by an Owner.
INITIALS:
TENANT: /s/
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LANDLORD: /s/
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<PAGE> 46
EXHIBIT E
HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE - (EXAMPLE)
Your cooperation in this matter is appreciated. Initially, the information
provided by you in this Hazardous Materials Disclosure Certificate is necessary
for the Landlord (identified below) to evaluate and finalize a lease agreement
with you as tenant. After a lease agreement is signed by you and the Landlord
(the "Lease Agreement"), on an annual basis in accordance with the provisions of
Section 29 of the signed Lease Agreement, you are to provide an update to the
information initially provided by you in this certificate. The information
contained in the initial Hazardous Materials Disclosure Certificate and each
annual certificate provided by you thereafter will be maintained in
confidentiality by Landlord subject to release and disclosure as required by (i)
any lenders and owners and their respective environmental consultants, (ii) any
prospective purchaser(s) of all or any portion of the property on which the
Premises are located, (iii) Landlord to defend itself or its lenders, partners
or representatives against any claim or demand, and (iv) any laws, rules,
regulations, orders, decrees, or ordinances, including, without limitation,
court orders or subpoenas. Any and all capitalized terms used herein, which are
not otherwise defined herein, shall have the same meaning ascribed to such term
in the signed Lease Agreement. Any questions regarding this certificate should
be directed to, and when completed, the certificate should be delivered to:
Landlord: LINCOLN MENLO IV & V ASSOCIATED LIMITED,
a California limited partnership
c/o Lincoln Property Company Management Services, Inc.
101 Lincoln Centre Drive, Fourth Floor
Foster City, California 94404
Phone: (415) 571-2200
Name of (Prospective) Tenant: Sequus Pharmaceuticals, Inc., a Delaware
corporation -------------------------------------------------
- -----------
Mailing Address: 960 Hamilton Court, Menlo Park, California 94025
----------------------------------------------------------------
- --------------------------------------------------------------------------------
Contact Person, Title and Telephone Number(s):
----------------------------------
Contact Person for Hazardous Waste Materials Management and Manifests and
Telephone Number(s):
------------------------------------------------------------
- --------------------------------------------------------------------------------
Address of (Prospective) Premises: 960 - 978 Hamilton Court, Menlo Park,
California 94025 ----------------------------------------------
- ------------------------
Length of (Prospective) initial Term: May 1, 1996 - April 30, 2003 (7 years)
----------------------------------------
1. GENERAL INFORMATION:
Describe the initial proposed operations to take place in, on, or about
the Premises, including, without limitation, principal products
processed, manufactured or assembled services and activities to be
provided or otherwise conducted. Existing tenants should describe any
proposed changes to on-going operations.
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2. USE, STORAGE AND DISPOSAL OF HAZARDOUS MATERIALS
2.1 Will any Hazardous Materials be used, generated, stored or
disposed of in, on or about the Premises? Existing tenants
should describe any Hazardous Materials which continue to be
used, generated, stored or disposed of in, on or about the
Premises.
Wastes Yes / / No / /
Chemical Products Yes / / No / /
Other Yes / / No / /
If Yes is marked, please explain:
-----------------------------
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2.2 If Yes is marked in Section 2.1, attach a list of any
Hazardous Materials to be used, generated, stored or disposed
of in, on or about the Premises, including the applicable
hazard class and an estimate of the quantities of such
Hazardous Materials at any given
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time; estimated annual throughput; the proposed location(s)
and method of storage (excluding nominal amounts of ordinary
household cleaners and janitorial supplies which are not
regulated by any Environmental Laws); and the proposed
location(s) and method of disposal for each Hazardous
Material, including, the estimated frequency, and the proposed
contractors or subcontractors. Existing tenants should attach
a list setting forth the information requested above and such
list should include actual data from on-going operations and
the identification of any variations in such information from
the prior year's certificate.
3. STORAGE TANKS AND SUMPS
3.1 Is any above or below ground storage of gasoline, diesel,
petroleum, or other Hazardous Materials in tanks or sumps
proposed in, on or about the Premises? Existing tenants should
describe any such actual or proposed activities.
Yes / / No / /
If yes, please explain:
---------------------------------------
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4. WASTE MANAGEMENT
4.1 Has your company been issued an EPA Hazardous Waste Generator
I.D. Number? Existing tenants should describe any additional
identification numbers issued since the previous certificate.
Yes / / No / /
4.2 Has your company filed a biennial or quarterly reports as a
hazardous waste generator? Existing tenants should describe
any new reports filed.
Yes / / No / /
If yes, attach a copy of the most recent report filed.
5. WASTEWATER TREATMENT AND DISCHARGE
5.1 Will your company discharge wastewater or other wastes to:
storm drain? sewer?
----------- --------
surface water? no wastewater or other
----------- -------- wastes discharged.
Existing tenants should indicate any actual discharges. If so,
describe the nature of any proposed or actual discharge(s).
5.2 Will any such wastewater or waste be treated before discharge?
Yes / / No / /
If yes, describe the type of treatment proposed to be
conducted. Existing tenants should describe the actual
treatment conducted.
--------------------------------------------------------------
--------------------------------------------------------------
6. AIR DISCHARGES
6.1 Do you plan for any air filtration systems or stacks to be
used in your company's operations in, on or about the Premises
that will discharge into the air; and will such air emissions
be monitored? Existing tenants should indicate whether or not
there are any such air filtration systems or stacks in use in,
on or about the Premises which discharge into the air and
whether such air emissions are being monitored.
Yes / / No / /
If yes, please describe:
--------------------------------------
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6.2 Do you propose to operate any of the following types of
equipment, or any other equipment requiring an air emissions
permit? Existing tenants should specify any such equipment
being operated in, on or about the Premises.
Spray booth(s) Incinerator(s)
----------- -------
Dip tank(s) Other (Please describe)
----------- -------
Drying oven(s) No Equipment Requiring Air
----------- ------- Permits
If yes, please describe:
--------------------------------------
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7. HAZARDOUS MATERIALS DISCLOSURES
7.1 Has your company prepared or will it be required to prepare a
Hazardous Materials management plan ("Management Plan")
pursuant to Fire Department or other governmental or
regulatory agencies' requirements? Existing tenants should
indicate whether or not a Management Plan is required and has
been prepared.
Yes / / No / /
If yes, attach a copy of the Management Plan. Existing tenants
should attach a copy of any required updates to the Management
Plan.
7.2 Are any of the Hazardous Materials, and in particular
chemicals, proposed to be used in your operations in, on or
about the Premises regulated under Proposition 65? Existing
tenants should indicate whether or not there are any new
Hazardous Materials being so used which are regulated under
Proposition 65.
Yes / / No / /
If yes, please explain:
---------------------------------------
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8. ENFORCEMENT ACTIONS AND COMPLAINTS
8.1 With respect to Hazardous Materials or Environmental Laws, has
your company ever been subject to any agency enforcement
actions, administrative orders, or consent decrees or has your
company received requests for information, notice or demand
letters, or any other inquiries regarding its operations?
Existing tenants should indicate whether or not any such
actions, orders or decrees have been, or are in the process of
being, undertaken or if any such requests have been received.
Yes / / No / /
If yes, describe the actions, orders or decrees and any
continuing compliance obligations imposed as a result of these
actions, orders or decrees and also describe any requests,
notices or demands, and attach a copy of all such documents.
Existing tenants should describe and attach a copy of any new
actions, orders, decrees, requests, notices or demands not
already delivered to Landlord pursuant to the provisions of
Section 29 of the signed Lease Agreement.
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--------------------------------------------------------------
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8.2 Have there ever been, or are there now pending, any lawsuits
against your company regarding any environmental or health and
safety concerns?
Yes / / No / /
If yes, describe any such lawsuits and attach copies of the
complaint(s), cross-complaint(s), pleadings and all other
documents related thereto as requested by Landlord. Existing
tenants should describe and attach a copy of any new
complaint(s), cross-complaint(s), pleadings and other related
documents not already delivered to Landlord pursuant to the
provisions of Section 29 of the signed Lease Agreement.
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
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8.3 Have there been any problems or complaints from adjacent
tenants, owners or other neighbors at your company's current
facility with regard to environmental or health and safety
concerns? Existing tenants should indicate whether or not
there have been any such problems or complaints from adjacent
tenants, owners or other neighbors at, about or near the
Premises.
Yes / / No / /
If yes, please describe. Existing tenants should describe any
such problems or complaints not already disclosed to Landlord
under the provisions of the signed Lease Agreement.
9. PERMITS AND LICENSES
9.1 Attach copies of all Hazardous Materials permits and licenses
including a Transporter Permit number issued to your company
with respect to its proposed operations in, on or about the
Premises, including, without limitation, any wastewater
discharge permits, air emissions permits, and use permits or
approvals. Existing tenants should attach copies of any new
permits and licenses as well as any renewals of permits or
licenses previously issued.
The undersigned hereby acknowledges and agrees that (A) this Hazardous Materials
Disclosure Certificate is being delivered in connection with, and as required
by, Landlord in connection with the evaluation and finalization of a Lease
Agreement and will be attached thereto as an exhibit; (B) that this Hazardous
Materials Disclosure Certificate is being delivered in accordance with, and as
required by, the provisions of Section 29 of the Lease Agreement; and (C) that
Tenant shall have and retain full and complete responsibility and liability with
respect to any of the Hazardous Materials disclosed in the HazMat Certificate
notwithstanding Landlord's/Tenant's receipt and/or approval of such certificate.
Tenant further agrees that none of the following described acts or events shall
be construed or otherwise interpreted as either (a) excusing, diminishing or
otherwise limiting Tenant from the requirement to fully and faithfully perform
its obligations under the Lease with respect to Hazardous Materials, including,
without limitation, Tenant's indemnification of the Indemnitees and compliance
with all Environmental Laws, or (b) imposing upon Landlord, directly or
indirectly, any duty or liability with respect to any such Hazardous Materials,
including, without limitation, any duty on Landlord to investigate or otherwise
verify the accuracy of the representations and statements made therein or to
ensure that Tenant is in compliance with all Environmental Laws; (i) the
delivery of such certificate to Landlord and/or Landlord's acceptance of such
certificate, (ii) Landlord's review and approval of such certificate, (iii)
Landlord's failure to obtain such certificate from Tenant at any time, or (iv)
Landlord's actual or constructive knowledge of the types and quantities of
Hazardous Materials being used, stored, generated, disposed of or transported on
or about the Premises by Tenant or Tenant's Representatives. Notwithstanding the
foregoing or anything to the contrary contained herein, the undersigned
acknowledges and agrees that Landlord and its partners, lenders and
representatives may, and will, rely upon the statements, representations,
warranties, and certifications made herein and the truthfulness thereof in
entering into the Lease Agreement and the continuance thereof throughout the
term, and any renewals thereof, of the Lease Agreement.
I (print name)__________ , acting with full authority to bind the (proposed)
Tenant and on behalf of the (proposed) Tenant, certify, represent and warrant
that the information contained in this certificate is true and correct.
(PROSPECTIVE) TENANT:
By:
----------------------------------
Title:
----------------------------------
Date:
----------------------------------
INITIALS:
TENANT: /s/
-------
LANDLORD: /s/
-------
4
<PAGE> 50
ADDENDUM 1
AMORTIZED BROKERS FEE
This Addendum 1 is incorporated as part of that certain Lease Agreement dated
February 13, 1996 (the "Lease"), by and between Sequus Pharmaceuticals, Inc., a
Delaware corporation ("Tenant"), and LINCOLN MENLO IV & V ASSOCIATES LIMITED, a
California limited partnership ("Landlord"), for the leasing of those certain
premises located at 960-978 Hamilton Court, Menlo Park, California as more
particularly described in Exhibit A to the Lease (the "Premises"). Any
capitalized terms used herein and not otherwise defined herein shall have the
meaning ascribed to such terms as set forth in the Lease.
The monthly Base Rent payable by Tenant set forth on Page 1 of this Lease shall
be increased according to the following schedule in accordance with the
provisions of Section 38 of this Lease:
<TABLE>
<CAPTION>
MONTHLY MONTHLY AMORTIZED TOTAL MONTHLY
PERIOD BASE RENT BROKERS FEE BASE RENT
------ --------- ----------- ---------
<S> <C> <C> <C>
May 1, 1996 thru April 30, 1997 $26,730.00 + $631.38 = $27,361.38
May 1, 1997 thru October 31, 1999 $27,720.00 + $631.38 = $28,351.38
November 1, 1999 thru April 30, 2000 $28,050.00 + $631.38 = $28,681.38
May 1, 2000 thru April 30, 2003 $29,040.00 + $631.38 = $29,671.38
</TABLE>
The total monthly Base Rent set forth above is subject to an additional increase
in accordance with the provisions of Exhibit B of this Lease.
INITIALS:
TENANT: /s/
-------
LANDLORD: /s/
-------
<PAGE> 51
ADDENDUM 2
OPTIONS TO EXTEND THE LEASE TERM
Page 1 to 2
This Addendum 2 is incorporated as part of that certain Lease Agreement dated
February 13, 1996 (the "Lease"), by and between Sequus Pharmaceuticals, Inc., a
Delaware corporation ("Tenant"), and LINCOLN MENLO IV & V ASSOCIATES LIMITED, a
California limited partnership ("Landlord"), for the leasing of those certain
premises located at 960-978 Hamilton Court, Menlo Park, California as more
particularly described in Exhibit A to the Lease (the "Premises"). Any
capitalized terms used herein and not otherwise defined herein shall have the
meaning ascribed to such terms as set forth in the Lease.
So long as Tenant is not in default in the performance of any of its obligations
under this Lease at the time of Tenant's exercise of the then applicable option
to extend the then applicable term of this Lease, Tenant shall have the right at
its option to extend the term of the Lease for two (2) successive five (5) year
periods (individually, the "First Extended Term" and the "Second Extended Term",
respectively, and collectively, the "Extended Terms"). The Lease of the Premises
during the Extended Terms shall be upon the same terms, covenants and conditions
as are set forth in this Lease, other than the monthly Base Rent and the term of
the Lease. If Landlord does not receive from Tenant written notice of Tenant's
exercise of this option on a date which is not more than three hundred sixty
(360) days nor less than two hundred forty (240) days prior to the end of the
initial term of the Lease or the end of the First Extended Term of this Lease,
as the case may be (an "Option Notice"), all rights under this option shall
automatically lapse and terminate and shall be of no further force and effect.
Time is of the essence herein. Additionally, if Tenant fails to timely or duly
exercise this option for the First Extended Term, all rights of Tenant under
this option to extend into the First Extended Term and the Second Extended Term
shall automatically lapse, terminate and shall be of no further force and
effect, and Tenant shall have no further rights to extend the term of this
Lease.
The monthly Base Rent for each of the First Extended Term and the Second
Extended Term shall be the then current market rent for the highest and best use
for similar space within the competitive market area of the Premises (the "Fair
Rental Value") agreed upon by and between Landlord and Tenant and their agents
appointed for this purpose. The "Fair Rental Value" of the Premises shall be
defined to mean the current market rental value of the Premises as of the
commencement of the First Extended Term or the Second Extended Term, as
applicable, taking into consideration all relevant factors, including length of
term, the uses permitted under the Lease, the quality, size, design and location
of the Premises, including the condition and value of existing tenant
improvements, and the monthly base rent paid by tenants for premises comparable
to the Premises, and located in Menlo Park, California.
If Landlord and Tenant are unable to agree on the Fair Rental Value for either
the First Extended Term or the Second Extended Term, as the case may be, within
ten (10) days of receipt by Landlord of the Option Notice for the then
applicable Extended Term, Landlord and Tenant each, at its cost and by giving
notice to the other party, shall appoint a competent and disinterested
commercial real estate broker (hereinafter "broker") with at least five (5)
years' full-time commercial real estate brokerage experience in the geographical
area of the Premises to set the Fair Rental Value for the First Extended Term or
the Second Extended Term, as the case may be. If either Landlord or Tenant does
not appoint a broker within ten (10) days after the other party has given notice
of the name of its broker, the single broker appointed shall be the sole broker
and shall set the Fair Rental Value for the First Extended Term or the Second
Extended Term, as the case may be. If two (2) brokers are appointed by Landlord
and Tenant as stated in this paragraph, they shall meet promptly and attempt to
set the Fair Rental Value. If the two (2) brokers are unable to agree within ten
(10) days after the second broker has been appointed, they shall attempt to
select a third broker, meeting the qualifications stated in this paragraph
within ten (10) days after the last day the two (2) brokers are given to set the
Fair Rental Value. If they are unable to agree on the third broker, either
Landlord or Tenant by giving ten (10) days' notice to the other party, can apply
to the Presiding Judge of the Superior Court of the county in which the Premises
is located for the selection of a third broker who meets the qualifications
stated in this paragraph. Landlord and Tenant each shall bear one-half (-1/2) of
the cost of appointing the third broker and of paying the third broker's fee.
The third broker, however selected, shall be a person who has not previously
acted in any capacity for either Landlord or Tenant. Within fifteen (15) days
after the selection of the third broker, the third broker shall select one of
the two Fair Rental Values submitted by the first two brokers as the Fair Rental
Value for the First Extended Term or the Second Extended Term, as the case may
be. If either of the first two brokers fails to submit their opinion of the Fair
Rental Value, then the single Fair Rental Value submitted shall automatically be
the monthly Base Rent for the First Extended Term or the Second Extended Term,
as applicable.
Notwithstanding any provision to the contrary herein, in no event shall the
monthly Base Rent for the First Extended Term as determined pursuant to this
Addendum 2, be less than the highest monthly Base Rent charged during the
initial term of the Lease. Notwithstanding any provision to the contrary herein,
in no event shall the monthly Base Rent for the Second Extended Term as
determined pursuant to this Addendum 2, be less than the highest monthly Base
Rent charged during the First Extended Term of the
<PAGE> 52
ADDENDUM 2
OPTIONS TO EXTEND THE LEASE TERM
Page 2 to 2
Lease. Upon determination of the monthly Base Rent for the First Extended Term
and the Second Extended Term, as applicable, pursuant to the terms outlined
above, Landlord and Tenant shall immediately execute an amendment to the Lease
stating the monthly Base Rent for the First Extended Term or the Second Extended
Term, as applicable, and confirming the expiration date of the First Extended
Term or the Second Extended Term, as the case may be. Tenant shall have no other
right to further extend the term of the Lease under this Addendum 2 unless
Landlord and Tenant otherwise agree in writing.
If Tenant duly exercises this option, in accordance with the terms contained
herein: (1) Tenant shall accept the Premises in its then "As-Is" condition and,
accordingly, Landlord shall not be required to perform any additional
improvements to the Premises; and (2) Tenant hereby agrees that it will solely
be responsible for any and all brokerage commissions and finder's fees payable
to any broker [now or hereafter procured or otherwise hired by Tenant ("Tenant's
Broker")] in connection with the option described herein, and Tenant hereby
further agrees that Landlord shall in no event or circumstance be responsible
for the payment of any such commissions and fees [to Tenant's Broker].
This option is personal to Tenant and may not be assigned, voluntarily or
involuntarily, separate from or as part of the Lease except to any Related
Entity of Tenant. At Landlord's option, all rights of Tenant under this option
shall terminate and be of no force and effect if any of the following individual
events occur or any combination thereof occur: (i) Tenant or the Related Entity,
as the case may be, is in default in the performance of any of its obligations
under this Lease at the time of Tenant's or the Related Entity's, as the case
may be, exercise of the then applicable option to extend the then applicable
term of this Lease; and/or (ii) Tenant has assigned its rights and obligations
under all or part of the Lease to any party other than a Related Entity, or
Tenant has subleased all or part of the Premises to a party other than a Related
Entity; and/or (iii) Tenant's or the Related Entity's, as the case may be,
financial condition is unacceptable to Landlord at the time of Tenant's or the
Related Entity's, as the case may be, delivery to Landlord of the then
applicable Option Notice (provided, Landlord will not withhold its approval of
Tenant's or the Related Entity's, as applicable, then current financial
condition if the net worth of Tenant or the Related Entity, as the case may be,
at the time of such exercise is substantially the same or better than Tenant's
financial condition as of the Commencement Date); and/or (iv) Tenant or the
Related Entity, as the case may be, has failed to exercise this option in a
timely manner in strict accordance with the provisions of this Addendum 2;
and/or (v) Tenant or the Related Entity, as the case may be, no longer has
possession of all or any part of the Premises under the Lease, or if the Lease
has been terminated earlier, pursuant to the terms of the Lease.
INITIALS:
TENANT: /s/
-------
LANDLORD: /s/
-------
Language indicated as being shown by strike-out in the typeset document is
enclosed in brackets "[" and "]" in the electronic format.
<PAGE> 53
EXHIBIT H
WAIVER BY LANDLORD - EXAMPLE
This Exhibit H is incorporated as part of that certain Lease Agreement dated
February 13, 1996 (the "Lease"), by and between Sequus Pharmaceuticals, Inc., a
Delaware corporation ("Tenant"), and LINCOLN MENLO IV & V ASSOCIATES LIMITED, a
California limited partnership ("Landlord"), for the leasing of those certain
premises located at 960-978 Hamilton Court, Menlo Park, California as more
particularly described in Exhibit A to the Lease (the "Premises"). Any
capitalized terms used herein and not otherwise defined herein shall have the
meaning ascribed to such terms as set forth in the Lease.
WAIVER BY LANDLORD
This Waiver By Landlord (the "Agreement") is made and entered into as
of this ____ day of _____________, 199_, by and among ________________________
____________________________________________________ (hereinafter called
"Secured Party"), LINCOLN MENLO IV & V ASSOCIATES LIMITED, a California limited
partnership ("Landlord"), and Sequus Pharmaceuticals, Inc., a Delaware
corporation ("Tenant"), with reference to that certain security agreement, dated
__________, 199_, by and between Tenant, as debtor, and Secured Party (the
"Security Agreement"), wherein Secured Party has agreed to make a loan to Tenant
in the amount of $____________________ for the following described purposes:
_________________________________, __________________________________________,
and _____________________________________________.
1. The undersigned Landlord hereby consents to the security interest
granted to Secured Party in the property and equipment described in the attached
Exhibit A (collectively, the "Goods") now, or at any time hereinafter, affixed
to or installed or kept at those certain premises located at 1360 Willow Road,
Suites 101, 201, 203 and 204 Menlo Park, California (the "Premises").
2. Landlord agrees that the Goods will remain personal property at all
times even though they may be affixed to or installed upon the Premises.
3. Landlord hereby waives any right, title, claim or interest in the
Goods by reason of the Goods being attached to or installed or resting upon the
Premises and, subject to the rights of Tenant under that certain Lease Agreement
dated February 13, 1996 between Landlord and Tenant for the lease of the
Premises (the "Lease"), hereby grants Secured Party permission to remove the
Goods from the Premises at any reasonable time during the term of the Lease
after Secured Party's delivery of at least ten (10) business days' prior written
notice to Landlord.
4. Secured Party, at its sole cost and expense, agrees to promptly and
fully repair any damage to the Premises, to Landlord's reasonable satisfaction,
arising in any manner from Secured Party's removal of the Goods from the
Premises. If Landlord is required to so remove such Goods from the Premises for
any reason whatsoever, then (i) Secured Party also agrees to promptly reimburse
Landlord (within ten (10) days after Landlord's delivery of a written demand
therefor) for the cost of repair of any physical damage to the Premises in any
way related to the removal of the Goods from the Premises, and (ii) Secured
Party hereby waives any claim or right to make a claim against Landlord for any
damage to the Goods or any impairment of Secured Party's security interest
therein.
5. Notwithstanding any provisions herein to the contrary, if Secured
Party fails to remove the Goods from the Premises following the termination of
the Lease and Landlord's giving of notice to Secured Party as provided in
California Civil Code Section 1983, as same may be amended from time to time (or
any successor statute thereof) then, after the time provided in such civil code
section, Landlord may deem the Goods to be abandoned property and proceed in the
manner as set forth in California Civil Code Section 1988, as same may be
amended from time to time (or any successor statute thereof).
6. Secured Party agrees to give Landlord written notice of any default
of Tenant under the Security Agreement within ten (10) days of such default
unless such default is permissibly and wholly cured within such time period.
7. Secured Party and Tenant hereby covenant and represent that each
such party shall not record nor permit to be recorded in the public records this
Agreement, any UCC-1 financing statement, the Security Agreement or any other
document or instrument which would or could have the effect of placing a lien
against any portion of the Premises. If any document or instrument is recorded
in contravention of the foregoing provision, then (i) this Agreement, at
Landlord's sole option, shall terminate and be of no further force or effect,
and (ii) Secured Party and/or Tenant shall promptly take all actions as may be
required by Landlord to cause such document or instrument to be released and/or
terminated.
8. Tenant hereby (i) consents to the provisions of this Agreement, (ii)
waives any and all rights or claims it may have under or by virtue of the Lease,
or at law or in equity, with respect to any breach of Tenant's quiet enjoyment
in and to the Premises or any interference with Tenant's operations
1
<PAGE> 54
in or about the Premises in any way related to or arising from Secured Party's
or Landlord's exercise of their rights granted herein [or under the Lease],
(iii) agrees that it shall not have any right to any rental abatement, deduction
or offset against rental payments payable by Tenant under the Lease by virtue of
Secured Party's or Landlord's exercise of their rights granted herein, and (iv)
agrees that upon the expiration of the term of the Lease or the earlier
termination thereof to (a) promptly remove or cause the removal of the Goods
from the Premises, and (b) promptly and fully repair any damage to the Premises
arising from the installation or removal of the Goods in and from the Premises
and to fully restore the Premises to a good, clean and safe condition and to
Landlord's reasonable satisfaction.
9. Any notice or demand required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been given when
delivered by U.S. mail, registered or certified, return receipt requested,
postage prepaid, or by overnight delivery service showing receipt of delivery,
or by personal delivery, or by facsimile transmission. If to Landlord, notices
shall be sent to: Lincoln Property Company Management Services, Inc., 101
Lincoln Centre Drive, Fourth Floor, Foster City, California 94404 (Phone number:
415-571-2200; facsimile number 415-571-2211); Attention: Property Manager, and
if to Secured Party: _____________________, _______________, ______________,
_______________________; Attention: ______________ (Phone number: _____________;
facsimile number __________________), and if to Tenant, at the address, phone
number and facsimile number at the Premises. Notices as aforesaid shall be
effective upon the earlier of actual receipt, or twenty-four (24) hours after
deposit with the messenger or delivery service, or the next business day after
delivery to an overnight delivery service, or within three (3) days after the
deposit in the U.S. mail, or upon confirmation of transmission by facsimile. If
any party changes its address, such change of address shall not be effective as
to the other parties unless and until such party notifies the other parties of
its new address by one of the above described means of delivery.
10. This Agreement shall be binding upon, and inure to the benefit of,
the parties hereto and their respective successors, heirs, administrators and
permitted assigns.
11. Except as otherwise provided herein, this Agreement may be amended
or modified only by a written instrument executed by all of the parties hereto.
12. This Agreement constitutes the entire understanding of the parties
with regard to the subject matter hereof and all prior agreements,
representations, and understandings between the parties other than the Lease,
whether oral or written, are deemed null and void, all of the foregoing having
been merged into this Agreement. The parties acknowledge that each party and/or
its counsel have reviewed and revised this Agreement and that no rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall be employed in the interpretation of this Agreement or any
amendments or exhibits to this Agreement or any document executed and delivered
by either party in connection with this Agreement.
13. If for any reason, any provision of this Agreement shall be held to
be unenforceable, it shall not affect the validity or enforceability of any
other provision of this Agreement and to the extent any provision of this
Agreement is not determined to be unenforceable, such provision, or portion
thereof, shall be, and remain, in full force and effect.
14. This Agreement may be executed in counterparts. All executed
counterparts shall constitute one agreement, and each counterpart shall be
deemed an original.
15. In the event any dispute between the parties with respect to this
Agreement result in litigation or other proceeding, the prevailing party shall
be reimbursed by the party not prevailing in such proceeding for all reasonable
costs and expenses, including, without limitation, reasonable attorneys' and
experts' fees and costs incurred by the prevailing party in connection with such
litigation or other proceeding and any appeal thereof. Such costs, expenses and
fees shall be included in and made a part of the judgment recovered by the
prevailing party, if any.
16. This Agreement shall be governed by and construed in accordance
with the laws of the State of California.
17. Time is of the essence of this Agreement. Unless the context
otherwise requires, all periods terminating on a given day, period of days, or
date shall terminate at 5:00 p.m. (Pacific Time) on such date or dates and
references to "days" shall refer to calendar days except if such references are
to "business days" which shall refer to days which are not a Saturday, Sunday or
legal holiday. Notwithstanding the foregoing, if any period terminates on a
Saturday, Sunday or legal holiday, under the laws of the State of California,
the termination of such period shall be on the next succeeding business day. The
time in which any act provided under this Agreement is to be done, shall be
computed by excluding the first day and including the last day, unless the last
day is a Saturday, Sunday or legal holiday under the laws of the State of
California, and then it is also so excluded. Notwithstanding anything to the
contrary contained herein, the time in which any act provided under this
Agreement is to be done shall be extended commensurately by the period of time
that the party charged with performing such act is prevented from doing so due
to any event or occurrence considered to be of a
Language indicated as being shown by strike-out in the typeset document is
enclosed in brackets "[" and "]" in the electronic format.
2
<PAGE> 55
force majeure nature, including without limitation, inclement weather,
earthquakes, riots, strikes, boycotts, moratoriums, and any government closures.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first written above.
SECURED PARTY:
- -------------------------------------------,
a
------------------------------------------
By:
--------------------------------------
Name:
Title:
TENANT:
Sequus Pharmaceuticals, Inc.,
a Delaware corporation
By:
--------------------------------------
Its:
--------------------------------------
By:
--------------------------------------
Its:
--------------------------------------
LANDLORD:
LINCOLN MENLO IV & V ASSOCIATES LIMITED,
a California limited partnership
By: Lincoln Property Company Management Services, Inc.,
As Manager and Agent for Landlord
By:
------------------------------------
Vice President
Date:
------------------------------------
Attachment: Exhibit A - Goods
INITIALS:
TENANT: /s/
-------
LANDLORD: /s/
-------
3
<PAGE> 1
EXHIBIT 10.2.2
LEASE AGREEMENT
(NET)
BASIC LEASE INFORMATION
<TABLE>
<S> <C>
LEASE DATE: February 13, 1996
LANDLORD: LINCOLN MENLO IV & V ASSOCIATES LIMITED,
a California limited partnership
LANDLORD'S ADDRESS: c/o Lincoln Property Company Management Services, Inc.
101 Lincoln Centre Drive, Fourth Floor
Foster City, California 94404-1167
TENANT: Sequus Pharmaceuticals, Inc.,
a Delaware corporation
TENANT'S ADDRESS: 960 Hamilton Court
Menlo Park, CA 94025
PREMISES: Approximately 45,600 rentable square feet as shown on Exhibit A
PREMISES ADDRESS: 1050-1098 Hamilton Court
Menlo Park, CA 94025
BUILDING (F-2): 45,600 square feet
LOT (BUILDING'S TAX PARCEL): APN 055-440-320
PARK: WILLOW PARK 930,368 square feet
PHASE IV (BUILDING F-1 AND BUILDING F-2): 79,200 square feet
TERM: May 1, 1996 ("Commencement Date"), through
April 30, 2003 ("Expiration Date")
BASE RENT (Paragraph 3): ** Forty-five thousand six hundred and 00/100 dollars ($45,600.00) per
month commencing on the Commencement Date through April 30, 1997.
ADJUSTMENTS
TO BASE RENT: ** May 1, 1997 through April 30, 2000 Base Rent shall increase to
$47,888.00 per month; and
** May 1, 2000 through April 30, 2003 Base Rent shall increase to
$50,160.00 per month.
** Subject to increases in accordance with Addendum 1.
SECURITY DEPOSIT (Paragraph 4.1): Thirty two thousand and thirty-two and 40/100 Dollars ($32,032.40)
[CLEANING DEPOSIT (Paragraph 4.2):_____________________________________________Dollars ($_________)]
*TENANT'S SHARE OF OPERATING EXPENSES (Paragraph 6.1): 57.58% of Phase IV
*TENANT'S SHARE OF TAX EXPENSES (Paragraph 6.2): 100% of the Building/Lot
*TENANT'S SHARE OF COMMON AREA UTILITY COSTS (Paragraph 7): 57.58% of Phase IV
*The amount of Tenant's Share of the expenses as referenced above shall be subject to modification as
set forth in this Lease.
PERMITTED USES: General and administrative office, research and development and
manufacturing of pharmaceutical products but only to the extent
permitted by the City of Menlo Park and all entities having
jurisdiction.
UNRESERVED
PARKING SPACES: One hundred eighty-two (182) nonexclusive and undesignated space.
BROKER (Paragraph 38): CB Commercial - Gregg M. Domanico and Rico Cheung
EXHIBITS: Exhibit A - Premises, Building, Lot and/or Park
Exhibit B - Tenant Improvements
Exhibit C - Rules and Regulations
Exhibit D - Covenants, Conditions and Restrictions
Exhibit E - Hazardous Materials Disclosure Certificate - Example
Exhibit F - Change of Commencement Date - Example
Exhibit G - Tenant's Initial Hazardous Materials Disclosure Certificate
Exhibit H - Waiver by Landlord - Example
Exhibit I - Subordination, Non-Disturbance and Attornment Agreement
ADDENDA: Addendum 1: Amortized Brokers Fee
Addendum 2: Options to Extend the Lease Term
</TABLE>
Language indicated as being shown by strike-out in the typeset document is
enclosed in brackets "[" and "]" in the electronic format.
1
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
- ------- ----
<S> <C> <C>
1. PREMISES...................................................................................................3
2. ADJUSTMENT OF COMMENCEMENT DATE; CONDITION OF THE PREMISES.................................................3
3. RENT.......................................................................................................3
4. SECURITY DEPOSIT [AND CLEANING DEPOSIT]....................................................................4
5. TENANT IMPROVEMENTS........................................................................................5
6. ADDITIONAL RENT............................................................................................5
7. UTILITIES..................................................................................................8
8. LATE CHARGES...............................................................................................9
9. USE OF PREMISES............................................................................................9
10. ALTERATIONS AND ADDITIONS; AND SURRENDER OF PREMISES......................................................10
11. REPAIRS AND MAINTENANCE...................................................................................11
12. INSURANCE.................................................................................................12
13. WAIVER OF SUBROGATION.....................................................................................13
14. LIMITATION OF LIABILITY AND INDEMNITY.....................................................................13
15. ASSIGNMENT AND SUBLEASING.................................................................................15
16. AD VALOREM TAXES..........................................................................................17
17. SUBORDINATION.............................................................................................17
18. RIGHT OF ENTRY............................................................................................18
19. ESTOPPEL CERTIFICATE......................................................................................18
20. TENANT'S DEFAULT..........................................................................................18
21. REMEDIES FOR TENANT'S DEFAULT.............................................................................20
22. HOLDING OVER..............................................................................................21
23. LANDLORD'S DEFAULT........................................................................................21
24. PARKING...................................................................................................21
25. SALE OF PREMISES..........................................................................................21
26. WAIVER....................................................................................................21
27. CASUALTY DAMAGE...........................................................................................21
28. CONDEMNATION..............................................................................................24
29. ENVIRONMENTAL MATTERS/HAZARDOUS MATERIALS.................................................................24
30. FINANCIAL STATEMENTS......................................................................................27
31. GENERAL PROVISIONS........................................................................................27
32. SIGNS.....................................................................................................28
33. MORTGAGEE PROTECTION......................................................................................29
34. QUITCLAIM.................................................................................................29
35. MODIFICATIONS FOR LENDER..................................................................................29
36. WARRANTIES OF TENANT......................................................................................29
37. COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT...........................................................29
38. BROKERAGE COMMISSION......................................................................................30
39. QUIET ENJOYMENT...........................................................................................30
40. LANDLORD'S ABILITY TO PERFORM TENANT'S UNPERFORMED OBLIGATIONS............................................30
41. TENANT'S EQUIPMENT FINANCING..............................................................................31
</TABLE>
Language indicated as being shown by strike-out in the typeset document is
enclosed in brackets "[" and "]" in the electronic format.
2
<PAGE> 3
LEASE AGREEMENT
DATE: This Lease is made and entered into as of the Lease Date
defined on Page 1. The Basic Lease Information set forth on
Page 1 and this Lease are and shall be construed as a single
instrument.
1. PREMISES: Landlord hereby leases the Premises to Tenant upon the terms and
conditions contained herein. Landlord hereby grants to Tenant a revocable
license for the right to use, on a non-exclusive basis, parking areas and
ancillary facilities located within the Common Area of the Park, subject to the
terms of this Lease. Landlord and Tenant hereby agree that for purposes of this
Lease, as of the Lease Date, the rentable square footage area of the Premises,
the Building, the Lot and the Park shall be deemed to be the number of rentable
square feet set forth in the Basic Lease Information on Page 1. Tenant further
agrees that the number of rentable square feet of the Premises, the Building,
the Lot and the Park may subsequently change after the Lease Date commensurate
with any modifications to any of the foregoing.
2. ADJUSTMENT OF COMMENCEMENT DATE; CONDITION OF THE PREMISES: [If Landlord
cannot deliver possession of the Premises on the Commencement Date, Landlord
shall not be subject to any liability nor shall the validity of the Lease be
affected; provided the Lease term and the obligation to pay Rent shall commence
on the date possession is tendered and the Expiration Date shall be extended by
a period of time equal to the period computed from the Commencement Date to the
date possession is tendered by Landlord to Tenant. In the event the commencement
date and/or the expiration date of this Lease is other than the Commencement
Date and/or Expiration Date provided on Page 1, as the case may be, Landlord and
Tenant shall execute a written amendment to this Lease, substantially in the
form of Exhibit F hereto, wherein the parties shall specify the actual
commencement date, expiration date and the date on which Tenant is to commence
paying Rent. In the event that Landlord permits Tenant to occupy the Premises
prior to the Commencement Date, such occupancy shall be at Tenant's sole risk
and subject to all the provisions of this Lease, including, but not limited to,
the requirement to pay Rent and the Security Deposit, and to obtain the
insurance required pursuant to this Lease and to deliver insurance certificates
as required herein. In addition to the foregoing, Landlord shall have the right
to impose such additional conditions on Tenant's early entry as Landlord shall
deem appropriate.] As of the Lease Date, Tenant is already occupying the
Premises pursuant to that certain Lease Agreement, dated August 31, 1983,
between Landlord and Tenant, as such lease agreement was subsequently amended by
the parties (collectively, the "Original Lease Agreement"). The parties
acknowledge that Tenant First took occupancy of a portion of the Premises on or
about August 31, 1983 pursuant to the Original Lease Agreement. The Lease Term
and the obligation to pay Rent shall commence on the Commencement Date and
continue through the Expiration Date. By taking possession of the Premises,
Tenant shall be deemed to have accepted the Premises in a good, clean and
completed condition and state of repair, in compliance with all applicable laws,
codes, regulations, administrative orders and ordinances, and subject to all
matters of record. Tenant hereby acknowledges and agrees that neither Landlord
nor Landlord's agents or representatives has made any representations or
warranties as to the suitability, safety or fitness of the Premises for the
conduct of Tenant's business, Tenant's intended use of the Premises or for any
other purpose, and that neither Landlord nor Landlord's agents or
representatives has agreed to undertake any alterations or construct any Tenant
Improvements to the Premises except as expressly provided in this Lease. [Tenant
agrees that at anytime before or during the term of this Lease, Landlord shall
have the right to relocate Tenant from the Premises described herein to other
space within the Park on substantially the same terms and conditions of this
Lease provided the other space is of comparable size.]
3. RENT: On the date that Tenant executes this Lease, Tenant shall deliver to
Landlord the original executed Lease, [the] one month's Base Rent (which shall
be applied against the Rent payable for the first month Tenant is required to
pay Base Rent), the Security Deposit, [the Cleaning Deposit,] and all insurance
certificates evidencing the insurance required to be obtained by Tenant under
Section 12 of this Lease. Tenant agrees to pay Landlord, without prior notice or
demand, or abatement, offset, deduction or claim, the Base Rent described on
Page 1, payable in advance at Landlord's address shown on Page 1 on the first
day of each month throughout the term of the Lease. In addition to the Base Rent
set forth on Page 1, Tenant shall pay Landlord in advance and on the first (1st)
day of each month throughout the term of this Lease (including any extensions of
such term), as Additional Rent Tenant's share, as set forth on Page 1, of
Operating Expenses, Tax Expenses, Common Area Utility Costs, and Utility
Expenses, and Administrative Expenses all in the manner as specified in Sections
6.1, 6.2, 6.3, 6.4 and 7 of this Lease, respectively. [Additionally, Tenant
shall pay to Landlord as Additional Rent hereunder, immediately on Landlord's
demand therefor, any and all costs and expenses incurred by Landlord to enforce
the provisions of this Lease, including, but not limited to, costs associated
with any proposed assignment or subletting of all or any portion of the Premises
by Tenant, costs associated with the delivery of notices, delivery and
recordation of notice(s) of default, attorneys' fees, expert fees, court costs
and filing fees (collectively, the "Enforcement Expenses").] The term "Rent"
whenever used herein refers to the aggregate of all these amounts. If Landlord
permits Tenant to occupy the Premises without requiring Tenant to pay rental
payments for a period of time, the waiver of the requirement to pay rental
payments shall only apply to waiver of the Base Rent and Tenant shall otherwise
perform all other obligations of
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Tenant hereunder, including, but not limited to paying to Landlord any and all
amounts considered Additional Rent, such as Tenant's share of Operating
Expenses, Tax Expenses, Common Area Utility Costs, and Utility Expenses, and
Administrative Expenses. If, at any time, Tenant is in default of or otherwise
breaches any term, condition or provision of this Lease, any such waiver by
Landlord of Tenant's requirement to pay rental payments shall be null and void
and Tenant shall immediately pay to Landlord all rental payments waived by
Landlord. The Rent for any fractional part of a calendar month at the
commencement or termination of the Lease term shall be a prorated amount of the
Rent for a full calendar month based upon a thirty (30) day month. The prorated
Rent shall be paid on the Commencement Date of the Lease and the first day of
the calendar month in which the [date of termination occurs]Lease terminates, as
the case may be.
4. SECURITY DEPOSIT [AND CLEANING DEPOSIT]:
4.1 SECURITY DEPOSIT: [Upon Tenant's execution of this Lease, Tenant
shall deliver to Landlord, as a Security Deposit for the performance by Tenant
of its obligations under this Lease,]Landlord and Tenant hereby acknowledge and
agree that in accordance with the terms of the Original Lease Agreement, Tenant
has provided to Landlord, as a security deposit thereunder, the amount described
on Page 1 and that Landlord now holds that sum as Security Deposit under this
Lease. If Tenant is in default, Landlord may, but without obligation to do so,
use the Security Deposit, or any portion thereof, to cure the default or to
compensate Landlord for all damages sustained by Landlord resulting from
Tenant's default under the Lease as set forth in Section 20[, including, but not
limited to the Enforcement Expenses]. Tenant shall, immediately on demand, pay
to Landlord a sum equal to the portion of the Security Deposit so applied or
used so as to replenish the amount of the Security Deposit held to increase such
deposit to the amount initially deposited with Landlord. Concurrently with any
increase in the Base Rent, Tenant shall deliver to Landlord an amount equal to
such increase, which amount shall be added to the Security Deposit being held by
Landlord and be deemed a part of such Security Deposit thereafter. At any time
after Tenant has defaulted hereunder, Landlord may require [an] a reasonable
increase in the amount of the Security Deposit required hereunder for the then
balance of the Lease term and Tenant shall, immediately on demand, pay to
Landlord additional sums in the amount of such reasonable increase. As soon as
practicable after the termination of this Lease, Landlord shall return the
Security Deposit to Tenant, less such amounts as are reasonably necessary, as
determined solely and reasonably by Landlord, to remedy Tenant's default(s)
hereunder or to otherwise restore the Premises to a clean and safe condition,
reasonable wear and tear excepted. If [the]such cost to restore the Premises
exceeds the amount of the Security Deposit, Tenant shall promptly [deliver]pay
to Landlord [any and all]the amount of such excess sums as reasonably determined
by Landlord. Landlord shall not be required to keep the Security Deposit
separate from other funds, and, unless otherwise required by law, Tenant shall
not be entitled to interest on the Security Deposit. In no event or circumstance
shall Tenant have the right to any use of the Security Deposit and,
specifically, Tenant may not use the Security Deposit as a credit or to
otherwise offset any payments required hereunder, including, but not limited to,
Rent or any portion thereof.
[4.2 CLEANING DEPOSIT: Upon Tenant's execution of this Lease, Tenant
shall deliver to Landlord, as a Cleaning Deposit for the performance by Tenant
of its obligations under this Lease including, but not limited to, Section 11
below, the amount described on Page 1. The Cleaning Deposit is to be used for
purposes relating to cleaning up the Premises and the area adjacent to the
Premises, to the extent such cleaning up is required due to Tenant's or its
representatives, employees, invitees or contractors' use of the area adjacent to
the Premises, to the reasonable satisfaction of Landlord. If Tenant is in
default, Landlord may, but without obligation to do so, use the Cleaning
Deposit, or any portion thereof, to cure the default or to compensate Landlord
for all damages sustained by Landlord resulting from Tenant's default,
including, but not limited to the Enforcement Expenses. Tenant shall,
immediately on demand, pay to Landlord a sum equal to the portion of the
Cleaning Deposit so applied or used so as to replenish the amount of the
Cleaning Deposit to increase such deposit to the amount initially deposited with
Landlord. At anytime after Tenant has defaulted hereunder, Landlord may require
an increase in the amount of the Cleaning Deposit required hereunder for the
then balance of the Lease term and Tenant shall, immediately on demand, pay to
Landlord additional sums in the amount of such increase. As soon as practicable
after the termination of this Lease, Landlord shall return the Cleaning Deposit
to Tenant, less such amounts as are reasonably necessary to remedy Tenant's
default(s) hereunder or to otherwise restore the Premises to a clean and safe
condition as determined by Landlord. Landlord shall not be required to keep the
Cleaning Deposit separate from other funds, and, unless otherwise required by
law, Tenant shall not be entitled to interest on the Cleaning Deposit. In no
event or circumstance shall Tenant have the right to any use of the Cleaning
Deposit and, specifically, Tenant may not use the Cleaning Deposit as a credit
or to otherwise offset any payments required hereunder, including, but not
limited to, Rent or any portion thereof.]
5. TENANT IMPROVEMENTS: Tenant hereby accepts the Premises in its current "as
is" condition unless otherwise specified in Exhibit B, attached hereto and
incorporated herein by this reference. If so specified in Exhibit B hereto,
Landlord or Tenant, as the case may be, shall install the improvements ("Tenant
Improvements") on the Premises as described and in accordance with the terms,
conditions, criteria and provisions set forth in Exhibit B, attached and
incorporated herein by this reference. Tenant acknowledges that neither Landlord
nor any of Landlord's agents, representatives or employees has made
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any representations as to the suitability or fitness of the Premises for the
conduct of Tenant's business, including, without limitation, any storage
incidental thereto, or for any other purpose, and that neither Landlord nor any
of Landlord's agents, representatives or employees has agreed to undertake any
alterations or construct any Tenant Improvements to the Premises except as
expressly provided in Exhibit B to this Lease.
6. ADDITIONAL RENT : The costs and expenses described in this Section 6 and all
other sums, charges, costs and expenses specified in this Lease other than Base
Rent, including, but not limited to, Utility Expenses, Tenant's share of Common
Area Utility Costs[, the Utility Expenses] and Late Charges [and Enforcement
Expenses] are to be paid by Tenant to Landlord as additional rent (collectively,
"Additional Rent").
6.1 OPERATING EXPENSES: In addition to the Base Rent set forth in
Section 3, Tenant shall pay its share, which is defined on Page 1, of all
Operating Expenses attributable to Phase IV of the Park as Additional Rent. The
term "Operating Expenses" as used herein shall mean the total amounts paid or
payable by Landlord in connection with the ownership, maintenance, repair and
operation of the Premises, the Building and the Lot, and where applicable, of
the Park referred to on Page 1. The amount of Tenant's share of Operating
Expenses shall be reviewed from time to time by Landlord and shall be subject to
modification by Landlord as reasonably determined by Landlord. These Operating
Expenses may include, but are not limited to:
6.1.1 Landlord's cost of repairs to, and maintenance of, the
roof (excluding the replacement of the structural portions of the roof),
the roof membrane and the exterior walls of the Building;
6.1.2 Landlord's cost of maintaining the outside paved area,
landscaping and other common areas for the Park. The term "Common Area"
shall mean all areas and facilities within the Park exclusive of the
Premises and the other portions of the Park leased exclusively to other
tenants. The Common Area includes, but is not limited to, interior
lobbies, mezzanines, parking areas, access and perimeter roads,
sidewalks, rail spurs, landscaped areas and similar areas and
facilities;
6.1.3 Landlord's annual cost of insurance insuring against
fire and extended coverage (including, if Landlord elects, "all risk"
coverage) and all other insurance, including, but not limited to,
earthquake, flood and/or surface water endorsements for the Building,
the Lot and the Park (including the Common Area), rental value insurance
against loss of Rent in an amount equal to the amount of Rent for a
period of at least six (6) months commencing on the date of loss, and
subject to the provisions of Section 27 below, any deductible;
6.1.4 Landlord's cost of modifications to the Building, the
Common Area and/or the Park occasioned by any rules, laws or regulations
effective subsequent to the date on which the Building was originally
constructed; provided, however if there are modifications necessitated
by any such rules, laws or regulations or there are replacement
improvements which are required to be made to the Building, the Common
Area and/or the Park which are in the nature of capital improvements,
then the costs of such modifications and replacement improvements shall
be amortized over a reasonable period which shall not be less than the
lesser of fifteen (15) years or the reasonably estimated useful life of
the modifications or replacement improvements in question (at an
interest rate as reasonably determined by Landlord) and Tenant shall pay
its pro rata share of the monthly amortized portion of such costs
(including interest charges) as part of the Operating Expenses;
6.1.5 Landlord's cost of modifications to the Building, the
Common Area and/or the Park occasioned by any rules, laws or regulations
arising from Tenant's particular use of the Premises regardless of when
such rules, laws or regulations became effective;
6.1.6 If Landlord elects to so procure, Landlord's cost of
preventative maintenance, and repair contracts including, but not
limited to, contracts for elevator systems and heating, ventilation and
air conditioning systems, lifts for disabled persons, and trash or
refuse collection;
6.1.7 Landlord's cost of security and fire protection services
for the Building and/or the Park, as the case may be, if in Landlord's
sole discretion such services are provided;
6.1.8 Landlord's establishment of reasonable reserves for
replacements and/or repairs of Common Area improvements, equipment and
supplies;
6.1.9 Landlord's cost for the maintenance and repair of any
rail spur and rail crossing, and for the creation and negotiation of,
and pursuant to, any rail spur or track agreements, licenses, easements
or other similar undertakings;
6.1.10 Landlord's cost of supplies, equipment, rental
equipment and other similar items used in the operation and/or
maintenance of the Park; and
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6.1.11 Landlord's cost for the repairs and maintenance items
set forth in Section 11.2 below[; and]
[6.1.12 Landlord's cost of janitorial services and supplies
for the Common Areas of Phase VI of the Park.]
6.2 TAX EXPENSES: In addition to the Base Rent set forth in Section 3,
Tenant shall pay its share, which is defined on Page 1, of all real property
taxes applicable to the land and improvements included within the Lot on which
the Premises are situated and one hundred percent (100%) of all personal
property taxes now or hereafter assessed or levied against the Premises [or] and
attributable to Tenant's personal property. The amount of Tenant's share of Tax
Expenses shall be reviewed from time to time by Landlord and shall be subject to
modification by Landlord as reasonably determined by Landlord. Tenant shall also
pay one hundred percent (100%) of any increase in real property taxes
attributable, in Landlord's sole discretion, to any and all alterations, Tenant
Improvements or other improvements of any kind, which are above standard
improvements customarily installed for similar buildings located within the
Building or the Park (as applicable), whatsoever placed in, on or about the
Premises for the benefit of, at the request of, or by Tenant. The term "Tax
Expenses" shall mean and include, without limitation, any form of tax and
assessment (general, special, supplemental, ordinary or extraordinary),
commercial rental tax, payments under any improvement bond or bonds, license,
rental tax, transaction tax, levy, or penalty imposed by authority having the
direct or indirect power of tax (including any city, county, state or federal
government, or any school, agricultural, lighting, drainage or other improvement
district thereof) as against any legal or equitable interest of Landlord in the
Premises, the Building, the Lot or the Park, as against Landlord's right to rent
or other income therefrom, or as against Landlord's business of leasing the
Premises or the occupancy of Tenant or any other tax, fee, or excise, however
described, including, but not limited to, any value added tax, or any tax
imposed in substitution (partially or totally) of any tax previously included
within the definition of real property taxes, or any additional tax the nature
of which was previously included within the definition of real property taxes.
The term "Tax Expenses" shall not include any franchise, estate, inheritance,
net income, or excess profits tax imposed upon Landlord. The parties acknowledge
and agree that as of the Lease Date Landlord is currently employing a firm that
specializes in reviewing and possibly contesting taxes and assessments levied
against the Phase VI of the Park and other properties (the "Tax Consultant"). If
at any time during the term of this Lease Landlord permanently ceases to employ
the Tax Consultant or another firm to provide services similar to those being
provided by the Tax Consultant with respect to Phase IV of the Park, Tenant
shall thereafter have the following right to contest the Tax Expenses payable by
Tenant hereunder and any other taxes payable by Tenant with respect to the
Premises. If Tenant is not in default of any of the terms, provisions or
obligations under this Lease and Tenant has delivered to Landlord at least sixty
(60) days prior written notice of Tenant's intention to initiate such a
proceeding, Tenant shall have the right to contest the amount or validity of the
Tax Expenses payable by Tenant hereunder and any other taxes payable by Tenant
with respect to the Premises by appropriate administrative and legal proceedings
brought either in its own name, Landlord's name or jointly with Landlord. Any
such proceeding shall be undertaken by counsel selected by Tenant and reasonably
approved by Landlord, and if Tenant deems it appropriate, such measures shall be
taken in the name of Tenant. Landlord hereby agrees that it will promptly upon
receipt of a written request therefor from Tenant (but in no event later than
forty-five (45) business days after Landlord's receipt of such written request)
furnish Tenant copies of all notices of assessment of Tax Expenses. Landlord
shall execute and deliver to Tenant whatever documents may be reasonably
necessary or proper to permit Tenant to so contest such Tax Expenses or which
may be necessary to secure payment of any refund which may result from any such
proceedings; provided, however, if Tenant makes such contest Tenant shall be
solely responsible for any and all penalties and liabilities arising therefrom
as well as for providing such security as Landlord may reasonably request in
connection with any such contest. Any such proceeding shall be undertaken at the
sole cost and expense of Tenant and any refund resulting therefrom shall, only
to the extent of the Tax Expenses payable by Tenant hereunder and any other
taxes payable by Tenant with respect to the Premises actually paid by Tenant to
Landlord for the fiscal tax year or years being contested, belong solely to
Tenant to the extent such refund is attributable to the Premises and for a
period concurrent with the term of the Lease (otherwise an appropriate
apportionment shall be made), and any excess amount of any such refund shall
belong solely to Landlord. Tenant shall indemnify, defend and hold Landlord, its
partners, lenders, representatives, successors and assigns harmless from any and
all claims, liabilities, judgments, penalties, fines, damages, costs and
expenses (including without limitation, attorneys' and experts' fees and costs)
arising from or related to any such contest initiated or brought by Tenant.
6.3 ADMINISTRATIVE EXPENSES: In addition to the Base Rent set forth in
Section 3 hereof, Tenant shall pay Landlord, without prior notice or demand, on
the first (1st) day of each month throughout the term of this Lease (including
any extensions of such term), as compensation to Landlord for accounting and
management services rendered on behalf of the Building and/or the Park,
one-twelfth (1/12th) of an amount equal to ten percent (10%) of the estimated
amount of the aggregate of the Tenant's share of (i) the total Operating
Expenses and Tax Expenses as described in Sections 6.1 and 6.2 above,
respectively, and (ii) all Common Area Utility Costs for the Park and the
Premises as described in Section 7 below[, but excluding utility costs
attributable to the heating, utility expenses for ventilation and air
conditioning servicing the Premises]; as such amounts are estimated by Landlord
in accordance with the provisions of Section 6.4 below (collectively, the
"Administrative Expenses"). Tenant's obligations to pay such Administrative
Expenses shall survive the expiration or earlier termination of this Lease.
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6.4 PAYMENT OF EXPENSES: Landlord shall reasonably estimate Tenant's
share of the Operating Expenses and Tax Expenses for the calendar year in which
the Lease commences. Commencing on the Commencement Date, one-twelfth (1/12th)
of this estimated amount shall be paid by Tenant to Landlord, as Additional
Rent, on the first (1st) day of each month and throughout the remaining months
of such calendar year. Thereafter, Landlord may estimate such expenses as of the
beginning of each calendar year and Tenant shall pay one-twelfth (1/12th) of
such estimated amount as Additional Rent hereunder on the first day of each
month during such calendar year and for each ensuing calendar year throughout
the term of this Lease (including any extensions of the term). By April 30th of
each of the following calendar years, or as soon thereafter as reasonably
possible, [including the calendar year after the calendar year in]and within six
(6) months after the last day of the term on which this Lease terminates or the
term expires, Landlord shall [endeavor]use commercially reasonably efforts to
furnish Tenant with an accounting of actual Operating Expenses and Tax Expenses.
Within thirty (30) days of Landlord's delivery of such accounting, Tenant shall
pay to Landlord the amount of any underpayment. Notwithstanding the foregoing,
failure by Landlord to give such accounting by such date shall not constitute a
waiver by Landlord of its right to collect any of Tenant's underpayment at any
time. Landlord shall credit the amount of any overpayment by Tenant toward the
next estimated monthly installment(s) falling due, or where the term of the
Lease has expired, refund the amount of overpayment to Tenant within six (6)
months of such expiration. Tenant, at its sole cost and expense through any
certified public accountant designated by it, shall have the right to examine
and/or audit the books and records evidencing such costs and expenses for the
previous one (1) calendar year, during Landlord's reasonable business hours and
not more frequently than once during any calendar year. Tenant's obligations to
pay its share of Operating Expenses and Tax Expenses shall survive the
expiration or earlier termination of this Lease.
6.5 ANNUAL RECONCILIATION: If the term of the Lease expires prior to the
annual reconciliation of expenses, if any, Landlord shall have the right to
reasonably estimate Tenant's share of such expenses, and if Landlord determines
that an underpayment is due, Tenant hereby agrees to pay Landlord the amount of
such underpayment within thirty (30) days thereafter. If Tenant does not pay
such underpayment within thirty days, Tenant hereby agrees that Landlord shall
be entitled to deduct such underpayment from Tenant's Security Deposit. If
Landlord reasonably determines that an overpayment has been made by Tenant,
Landlord shall refund said overpayment to Tenant [as soon as practicable]within
six (6) months thereafter. Notwithstanding the foregoing, failure of Landlord to
accurately estimate Tenant's share of such expenses or to otherwise perform such
reconciliation of expenses, including, without limitation, Landlord's failure to
deduct any portion of any underpayment from Tenant's Security Deposit, shall not
constitute a waiver of Landlord's right to collect any of Tenant's underpayment
at any time during the term of the Lease or at any time after the expiration or
earlier termination of this Lease.
6.6 Exclusions From Operating Expenses: Notwithstanding the foregoing,
for the purpose of this Lease, the term "Operating Expenses" shall not include
the following:
6.6.1 Leasing commissions, cost disbursements, and other
expenses incurred for leasing, renovating, or improving space for
tenants other than Tenant;
6.6.2 Costs (including permit, license, and inspection fees)
incurred in renovating, improving, decorating, painting, or redecorating
vacant space or space for other tenants;
6.6.3 Depreciation and amortization except on materials,
tools, supplies and vendor-type equipment purchased by Landlord to
supply services for which Landlord might otherwise contract with third
parties or such depreciation and amortization which otherwise have
already been included in the charge for such third party services;
6.6.4 Costs incurred [because Landlord or another tenant
actually and conclusively violated the terms of any lease;]for repairs
necessitated by the [active] gross negligence or willful misconduct of
Landlord or its authorized contractors, employees, or agents or by the
negligence of other tenants in the Building, or by latent defects in the
original design of the Building;
6.6.5 Interest on debt or amortization payments on mortgages
or deeds of trust or any other debts for borrowed money;
6.6.6 Items and services which Tenant reimburses Landlord or
pays third parties or that Landlord provided selectively to one or more
tenants of the Building, other than Tenant, without reimbursement;
6.6.7 Advertising and promotional expenditures;
6.6.8 Any costs, fines, or penalties incurred because Landlord
violated any governmental rule or authority, except to the extent
contributed to by Tenant or its employees, agents, invitees, licensees,
representatives, assignees, subtenants, customers or contractors
(collectively, "Tenant's Representatives");
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6.6.9 Costs incurred to test, survey, clean, contain, abate,
remove, or otherwise remedy Hazardous Materials from the Lot or Building
except to the extent same is Tenant's responsibility pursuant to
Paragraph 29 hereof, or otherwise caused by Tenant or any of Tenant's
Representatives;
6.6.10 Legal fees, brokerage commissions, advertising costs or
other related expenses incurred by Landlord in connection with leasing
of space to other tenants and for the financing of the Building, Lot, or
Premises, except as required pursuant to the provisions of Section 21
hereof;
6.6.11 Legal fees, accountant fees, and other fees incurred in
connection with disputes of other tenants or occupants of the Building
or Park;
6.6.12 Except for the Administrative Expenses set forth in
Section 6.3 of this Lease, overhead and profit paid to subsidiaries or
affiliates of Landlord for management or other services provided in or
to the Building to the extent such costs and expenses exceed the
competitive costs and expenses were they not provided by a subsidiary or
affiliate of Landlord;
6.6.13 The excess costs over competitive costs by independent
suppliers or vendors for the cost of supplies and services provided by
subsidiaries and affiliates of Landlord;
6.6.14 Rental charges and other related expenses incurred by
Landlord in leasing air conditioning systems or other equipment
ordinarily considered to be a capital nature to the extent such rental
charges and other related expenses exist and are incurred as of the
Commencement Date of this Lease;
6.6.15 Subject to the provisions of Section 27 below, costs of
repairs or other work necessitated by fire, windstorm or other casualty
(excluding any deductible and any casualties or matters for which Tenant
self-insures) to the extent such casualties are covered by insurance
required to be maintained by Landlord hereunder;
6.6.16 Legal fees for lawsuits or similar proceedings which do
not directly benefit the tenants of the Building or Park;
6.6.17 Except for the Administrative Expenses set forth in
Section 6.3 of this Lease, salaries of Landlord's owners or officers;
6.6.18 Ground lease rental; and
6.6.19 Those costs incurred by Landlord for the matters set
forth in Section 11.3 below.
7. UTILITIES: Utility Expenses, Common Area Utility Costs and all other sums or
charges set forth in this Section 7 are considered part of Additional Rent.
Tenant shall pay the cost of all water, sewer use, sewer discharge fees and
sewer connection fees, gas, heat, electricity, refuse pickup, janitorial
service, telephone and other utilities billed or metered separately to the
Premises and/or Tenant. Tenant shall also pay its share of any assessments or
charges for utility or similar purposes included within any tax bill for the Lot
on which the Premises are situated, including, without limitation, entitlement
fees, allocation unit fees, and/or any similar fees or charges, and any
penalties related thereto (except for penalties attributable solely to
Landlord's late payment of such utility charges). For any such utility fees or
use charges that are not billed or metered separately to Tenant, Tenant shall
pay to Landlord, as Additional Rent, without prior notice or demand, on the
first (1st) day of each month throughout the term of this Lease the amount which
is attributable to Tenant's use of the utilities or similar services, as
reasonably estimated and determined by Landlord based upon factors such as size
of the Premises and intensity of use of such utilities by Tenant such that
Tenant shall pay the portion of such charges reasonably consistent with Tenant's
use of such utilities and similar services ("Utility Expenses"). If Tenant
disputes any such estimate or determination, then Tenant shall either pay the
estimated amount or cause the Premises to be separately metered at Tenant's sole
expense. In addition, Tenant shall pay to Landlord its share, which is described
on Page 1, as Additional Rent, without prior notice or demand, on the first
(1st) day of each month throughout the term of this Lease, of any Common Area
utility costs, fees, charges or expenses attributable to Phase IV of the Park
("Common Area Utility Costs"). Tenant shall pay to Landlord one-twelfth (1/12th)
of the estimated amount of Tenant's share of the Common Area Utility Costs in
the same manner and time periods as specified in Section 6.4 above and any
reconciliation thereof shall also be in the same manner as specified in Sections
6.4 and 6.5 above. The amount of Tenant's share of Common Area Utility Costs
shall be reviewed from time to time by Landlord and shall be subject to
modification by Landlord as reasonably determined by Landlord. Tenant
acknowledges that the Premises may become subject to the rationing of utility
services or restrictions on utility use as required by a public utility company,
governmental agency or other similar entity having jurisdiction thereof.
Notwithstanding any such rationing or restrictions on use of any such utility
services, Tenant acknowledges and agrees that its tenancy and occupancy
hereunder shall be subject to such rationing restrictions as may be imposed upon
Landlord, Tenant, the Premises, the Building or the Park, and Tenant shall in no
event be excused or relieved from any covenant or obligation to be kept or
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performed by Tenant by reason of any such rationing or restrictions. Tenant
further agrees to timely and faithfully pay, prior to delinquency, any amount,
tax, charge, surcharge, assessment or imposition levied, assessed or imposed
upon the Premises, or Tenant's use and occupancy thereof, or as a result
directly or indirectly of any such rationing or restrictions.
8. LATE CHARGES: Any and all sums or charges set forth in this Section 8 are
considered part of Additional Rent. Tenant acknowledges that late payment (the
[second] fourth day of each month or any time thereafter) by Tenant to Landlord
of Base Rent, Tenant's share of Operating Expenses, Tax Expenses, Common Area
Utility Costs, and Utility Expenses, Administrative Expenses or other sums due
hereunder, will cause Landlord to incur costs not contemplated by this Lease,
the exact amount of such costs being extremely difficult and impracticable to
fix. Such costs include, without limitation, processing and accounting charges,
and late charges that may be imposed on Landlord by the terms of any note
secured by any encumbrance against the Premises, and late charges and penalties
due to the late payment by Tenant of real property taxes on the Premises.
Therefore, if any installment of Rent or any other sum due from Tenant is not
received by Landlord when due, Tenant shall promptly pay to Landlord [all of the
following, as applicable: (a)] an additional sum equal to [ten]seven percent
[(10%)](7%) of such delinquent amount [plus interest on such delinquent amount
at the rate equal to the prime rate plus three percent (3%) for the time period
such payments are delinquent as a late charge for every month or portion thereof
that such sums remain unpaid, (b) the amount of seventy-five dollars ($75) for
each three-day notice prepared for, or served on, Tenant, (c) the amount of
fifty dollars ($50) relating to checks for which there are not sufficient
funds.] If Tenant delivers to Landlord a check for which there are not
sufficient funds, Landlord may, at its sole option, require Tenant to replace
such check with a cashier's check for the amount of such check and all other
charges payable hereunder. The parties agree that this late charge and the other
charges referenced above represent a fair and reasonable estimate of the costs
that Landlord will incur by reason of late payment by Tenant. Acceptance of any
late charge or other charges shall not constitute a waiver by Landlord of
Tenant's default with respect to the delinquent amount, nor prevent Landlord
from exercising any of the other rights and remedies available to Landlord for
any other breach of Tenant under this Lease. If a late charge or other charge
becomes payable for any three (3) installments of Rent within any twelve (12)
month period, then Landlord, at Landlord's sole option, can either require the
Rent be paid quarterly in advance, or be paid monthly in advance by cashier's
check or by electronic funds transfer.
9. USE OF PREMISES:
9.1 COMPLIANCE WITH LAWS, RECORDED MATTERS, AND RULES AND REGULATIONS:
The Premises are to be used solely for the uses stated on Page 1 and for no
other uses or purposes without Landlord's prior written consent, which consent
may be given or withheld in Landlord's sole discretion. The use of the Premises
by Tenant and its employees, representatives, agents, invitees, licensees,
subtenants, customers or contractors (collectively, "Tenant's Representatives")
shall be subject to, and at all times in compliance with, (a) any and all
applicable laws, ordinances, statutes, orders and regulations as same exist from
time to time (collectively, the "Laws"), (b) any and all documents, matters or
instruments, including without limitation, any declarations of covenants,
conditions and restrictions, and any supplements thereto, each of which has been
or hereafter is recorded in any official or public records with respect to the
Premises, the Building, the Lot and/or the Park, or any portion thereof
(collectively, the "Recorded Matters"), and (c) any and all rules and
regulations set forth in Exhibit C, attached to and made a part of this Lease,
and any other reasonable rules and regulations promulgated by Landlord now or
hereafter enacted relating to parking and the operation of the Premises, the
Building and the Park (collectively, the "Rules and Regulations") so long as the
Rules and Regulations hereafter enacted do not prevent Tenant from using the
Premises for the purposes as described on Page 1. Tenant agrees to, and does
hereby, assume full and complete responsibility to ensure that the Premises are
adequate to fully meet the needs and requirements of Tenant's intended
operations of its business within the Premises, and Tenant's use of the Premises
and that same are in compliance with all applicable Laws.
9.2 PROHIBITION ON USE: Tenant shall not use the Premises or permit
anything to be done in or about the Premises nor keep or bring anything therein
which will in any way conflict with any of the requirements of the Board of Fire
Underwriters or similar body now or hereafter constituted or in any way increase
the existing rate of or affect any policy of fire or other insurance upon the
Building or any of its contents, or cause a cancellation of any insurance
policy. No auctions may be held or otherwise conducted in, on or about the
Premises, the Building, the Lot or the Park without Landlord's written consent
thereto, which consent may be given or withheld in Landlord's sole discretion.
Tenant shall not do or permit anything to be done in or about the Premises which
will in any way obstruct or interfere with the rights of Landlord, other tenants
or occupants of the Building, other buildings in the Park, or other persons or
businesses in the area, or injure or annoy other tenants or use or allow the
Premises to be used for any unlawful or objectionable purpose, as determined by
Landlord, in its reasonable discretion, for the benefit, quiet enjoyment and use
by Landlord and all other tenants or occupants of the Building or other
buildings in the Park; nor shall Tenant cause, maintain or permit any private or
public nuisance in, on or about the Premises, Building, Park and/or the Common
Area, including, but not limited to, any offensive odors, noises, fumes or
vibrations. Tenant shall not damage or deface or otherwise commit or suffer to
be committed any waste in, upon or about the Premises. Tenant shall not place or
store, nor permit any other person or entity to place or store, any property,
equipment,
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materials, supplies, personal property or any other items or goods outside of
the Premises for any period of time. Tenant shall not permit any animals (except
for those animals required for Tenant to conduct its research), including, but
not limited to, any household pets, to be brought or kept in or about the
Premises. Tenant shall place no loads upon the floors, walls, or ceilings in
excess of the maximum designed load permitted by the applicable Uniform Building
Code or which may damage the Building or outside areas; nor place any harmful
liquids in the drainage systems; nor dump or store waste materials, refuse or
other such materials, or allow such to remain outside the Building area, except
in refuse dumpsters or in any enclosed trash areas provided. Tenant shall honor
the terms of all Recorded Matters relating to the Premises, the Building, the
Lot and/or the Park. Tenant shall honor the Rules and Regulations. If Tenant
fails to comply with such Laws, Recorded Matters, Rules and Regulations or the
provisions of this Lease, Landlord shall have [the right to collect from Tenant
a reasonable sum as a penalty, in addition to] all rights and remedies of
Landlord hereunder including, but not limited to, the payment by Tenant to
Landlord of all [Enforcement Expenses and Landlord's] costs and expenses
incurred by Landlord, if any, to cure any of such failures of Tenant, if
Landlord, at its sole option, elects to undertake such cure.
10. ALTERATIONS AND ADDITIONS; AND SURRENDER OF PREMISES:
10.1 ALTERATIONS AND ADDITIONS: Tenant shall not install any signs,
fixtures, improvements, nor make or permit any other alterations or additions to
the Premises without the prior written consent of Landlord. If any such
alteration or addition is expressly permitted by Landlord, Tenant shall deliver
at least twenty (20) days prior notice to Landlord, from the date Tenant intends
to commence construction, sufficient to enable Landlord to post a Notice of
Non-Responsibility. In all events, Tenant shall obtain all permits or other
governmental approvals prior to commencing any of such work and deliver a copy
of same to Landlord. All alterations and additions shall be installed by a
licensed contractor approved by Landlord, at Tenant's sole expense in compliance
with all applicable Laws (including, but not limited to, the ADA as defined
herein), Recorded Matters, and Rules and Regulations. Tenant shall keep the
Premises and the property on which the Premises are situated free from any liens
arising out of any work performed, materials furnished or obligations incurred
by or on behalf of Tenant. [As a condition to Landlord's consent to the
installation of any fixtures, additions or other improvements, Landlord may
require Tenant to post and obtain a completion and indemnity bond for up to one
hundred fifty percent (150%) of the cost of the work.]
10.2 SURRENDER OF PREMISES: Upon the termination of this Lease, whether
by forfeiture, lapse of time or otherwise, or upon the termination of Tenant's
right to possession of the Premises, Tenant will at once surrender and deliver
up the Premises, together with the fixtures, furnishings, additions and
improvements which Landlord has notified Tenant at the time Landlord consented
to the installation of such fixtures, furnishings, additions and improvements,
in writing, that Landlord will require Tenant not to remove, to Landlord in good
condition and repair including, but not limited to, replacing all light bulbs
and ballasts not in good working condition, excepting for reasonable wear and
tear. Reasonable wear and tear shall not include any damage or deterioration to
the floors of the Premises arising from the use of forklifts in, on or about the
Premises (including, without limitation, any marks or stains of any portion of
the floors), and any damage or deterioration that would have been prevented by
proper maintenance by Tenant or Tenant otherwise performing all of its
obligations under this Lease. Upon such termination of this Lease, Tenant shall
remove all tenant signage, trade fixtures, furniture, furnishings, personal
property, additions, and other improvements unless Landlord requests, in
writing, that Tenant not remove some or all of such trade fixtures, furniture,
furnishings, additions or improvements installed by, or on behalf of Tenant or
situated in or about the Premises. By the date which is twenty (20) days prior
to such termination of this Lease, Landlord shall notify Tenant in writing of
those fixtures, alterations, furniture, furnishings[, trade fixtures], additions
and other improvements which Landlord shall require Tenant not to remove from
the Premises. Tenant shall repair any damage caused by the installation or
removal of such signs, trade fixtures, furniture, furnishings, fixtures,
additions and improvements which are to be removed from the Premises by Tenant
hereunder. If Landlord fails to so notify Tenant at least twenty (20) days prior
to such termination of this Lease, then Tenant shall remove all tenant signage,
fixtures, alterations, furniture, furnishings, trade fixtures, additions and
other improvements installed in or about the Premises by, or on behalf of
Tenant. Tenant shall ensure that the removal of such items and the repair of the
Premises will be completed prior to such termination of this Lease.
11. REPAIRS AND MAINTENANCE:
11.1 TENANT'S REPAIRS AND MAINTENANCE OBLIGATIONS: Except for those
portions of the Building to be maintained by Landlord, as provided in Section
11.2 below, Tenant shall, at Tenant's sole cost and expense, keep and maintain
the Premises and the adjacent areas (including, without limitation, any portion
of the Common Area used by Tenant or Tenant's Representatives) in good, clean
and safe condition and repair to the satisfaction of Landlord including, but not
limited to, repairing any damage caused by Tenant or Tenant's Representatives
and replacing any property so damaged by Tenant or Tenant's Representatives.
Without limiting the generality of the foregoing, Tenant shall be solely
responsible for maintaining, repairing and replacing (a) all mechanical systems,
heating, ventilation and air conditioning systems, (b) all plumbing, electrical
wiring and equipment serving the Premises, (c) all interior lighting (including,
without limitation, light bulbs and/or ballasts) and exterior lighting serving
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the Premises or adjacent to the Premises, (d) all glass, windows, window frames,
window casements, skylights, interior and exterior doors, door frames and door
closers, (e) all roll-up doors, ramps and dock equipment including without
limitation, dock bumpers, dock plates, dock seals, dock levelers and dock
lights, (f) all tenant signage, (g) lifts for disabled persons serving the
Premises, (h) sprinkler systems, fire protection systems and security systems,
(i) all partitions, fixtures, equipment, interior painting, and interior walls
and floors of the Premises and every part thereof (including, without
limitation, any demising walls contiguous to any portion of the Premises).
Tenant's obligation to keep, maintain, preserve and repair the Premises and the
adjacent area shall specifically extend to the cleanup and removal of any and
all Hazardous Materials (hereafter defined) occurring in, on or about the
Premises.
11.2 REIMBURSABLE REPAIRS AND MAINTENANCE OBLIGATIONS: Subject to the
provisions of Sections 6 and 9 of this Lease and except for (i) the obligations
of Tenant set forth in Section 11.1 above, and (ii) the repairs rendered
necessary by the intentional or negligent acts or omissions of Tenant or
Tenant's Representatives, Landlord agrees, at Landlord's expense, subject to
reimbursement pursuant to Section 6 above, to keep in good repair the plumbing
and mechanical systems exterior to the Premises, any rail spur and rail
crossing, the roof, roof membranes, exterior walls of the Building, signage
(exclusive of tenant signage), and exterior electrical wiring and equipment,
exterior lighting, exterior glass, exterior doors and entrances, exterior window
casements, exterior doors and door closers, exterior painting of the Building
(exclusive of the Premises), and underground utility and sewer pipes outside the
exterior walls of the Building. For purposes of this Section 11.2, the term
"exterior" shall mean exterior to, and not serving the Premises. Unless
otherwise notified by Landlord, in writing, that Landlord has elected to procure
and maintain the following described contract(s), Tenant shall procure and
maintain (a) the heating, ventilation and air conditioning systems preventative
maintenance and repair contract(s); such contract(s) to be on a bi-monthly or
quarterly basis, as reasonably determined by Landlord, and (b) the fire and
sprinkler protection services and preventative maintenance and repair
contract(s) (including, without limitation, monitoring services); such
contract(s) to be on a bi-monthly or quarterly basis, as reasonably determined
by Landlord. Landlord reserves the right, but without the obligation to do so,
to procure and maintain (i) the heating, ventilation and air conditioning
systems preventative maintenance and repair contract(s), and/or (ii) the fire
and sprinkler protection services and preventative maintenance and repair
contract(s) (including, without limitation, monitoring services). If Landlord so
elects to procure and maintain any such contract(s), Tenant will reimburse
Landlord for the cost thereof in accordance with the provisions of Section 6
above. If Tenant procures and maintains any of such contract(s), Tenant will
promptly deliver to Landlord a true and complete copy of (x) each such contract
and any and all renewals or extensions thereof, and (y) each service report or
other summary received by Tenant pursuant to or in connection with such
contract(s).
11.3 LANDLORD'S REPAIRS AND MAINTENANCE OBLIGATIONS: Except for repairs
rendered necessary by the intentional or negligent acts or omissions of Tenant
or Tenant's Representatives, Landlord agrees, at Landlord's sole cost and
expense, to (a) keep in good repair the structural portions of the floors,
foundations and exterior perimeter walls of the Building (exclusive of glass and
exterior doors), and (b) replace the structural portions of the roof of the
Building (excluding the roof membrane) as, and when, Landlord determines such
replacement to be necessary in Landlord's sole discretion. Notwithstanding the
foregoing to the contrary, such repairs and/or replacements shall not be
included in the Operating Expenses as set forth in Section 6.1 above.
11.4 TENANT'S FAILURE TO PERFORM REPAIRS AND MAINTENANCE OBLIGATIONS:
Except for normal maintenance and repair of the items described above, Tenant
shall have no right of access to or right to install any device on the roof of
the Building nor make any penetrations of the roof of the Building without the
express prior written consent of Landlord, which consent shall not be
unreasonably withheld. If Tenant refuses or neglects to repair and maintain the
Premises and the adjacent areas properly as required herein and to the
reasonable satisfaction of Landlord, Landlord may, but without obligation to do
so, at any time make such repairs and/or maintenance without Landlord having any
liability to Tenant for any loss or damage that may accrue to Tenant's
merchandise, fixtures or other property, or to Tenant's business by reason
thereof, except to the extent any damage is caused by the willful misconduct or
gross negligence of Landlord or its authorized agents and representatives. In
the event Landlord makes such repairs and/or maintenance, upon completion
thereof Tenant shall pay to Landlord, as additional rent, the Landlord's costs
for making such repairs and/or maintenance, plus [twenty] ten percent [(20%)]
(10%) for overhead, upon presentation of a bill therefor. The obligations of
Tenant hereunder shall survive the expiration of the term of this Lease or the
earlier termination thereof. Tenant hereby waives any right to repair at the
expense of Landlord under any applicable Laws now or hereafter in effect
respecting the Premises.
12. INSURANCE:
12.1 TYPES OF INSURANCE: Tenant shall maintain in full force and effect
at all times during the term of this Lease, at Tenant's sole cost and expense,
for the protection of Tenant and Landlord, as their interests may appear,
policies of insurance issued by a carrier or carriers acceptable to Landlord and
its lender(s) which afford the following coverages: (i) worker's compensation:
statutory limits; (ii) employer's liability, as required by law, with a minimum
limit of $100,000 per employee and $500,000 per occurrence; (iii) commercial
general liability insurance (occurrence form) providing coverage against
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any and all claims for bodily injury and property damage occurring in, on or
about the Premises arising out of Tenant's and Tenant's Representatives' use
and/or occupancy of the Premises. Such insurance shall include coverage for
blanket contractual liability, fire damage, premises, personal injury, completed
operations, products liability, personal and advertising, and a plate-glass
rider to provide coverage for all glass in, on or about the Premises including,
without limitation, skylights, with deletion of the exclusion for operations
within fifty (50) feet of a railroad track (railroad protective liability), if
applicable. Such insurance shall have a combined single limit of not less than
One Million Dollars ($1,000,000) per occurrence with a Two Million Dollar
($2,000,000) aggregate limit and excess umbrella insurance in the amount of Two
Million Dollars ($2,000,000). If Tenant has other locations which it owns or
leases, the policy shall include an aggregate limit per location endorsement. If
necessary, as reasonably determined by Landlord, Tenant shall provide for
restoration of the aggregate limit; (iv) comprehensive automobile liability
insurance: a combined single limit of not less than $2,000,000 per occurrence
and insuring Tenant against liability for claims arising out of the ownership,
maintenance, or use of any owned, hired or non-owned automobiles; (v) "all risk"
property insurance, including without limitation, sprinkler leakage, [boiler and
machinery comprehensive form,] if applicable, covering damage to or loss of any
personal property, trade fixtures, inventory, fixtures and equipment located in,
on or about the Premises, and in addition, [coverage for flood, earthquake, and]
business interruption of Tenant, together with, if the property of Tenant's
invitees is to be kept in the Premises, warehouser's legal liability or bailee
customers insurance for the full replacement cost of the property belonging to
invitees and located in the Premises. Such insurance shall be written on a
replacement cost basis (without deduction for depreciation) in an amount equal
to one hundred percent (100%) of the full replacement value of the aggregate of
the items referred to in this subparagraph (v); and (vi) such other insurance as
Landlord reasonably deems necessary and prudent or as may otherwise be required
by any of Landlord's lenders or joint venture partners.
12.2 INSURANCE POLICIES: Insurance required to be maintained by Tenant
shall be written by companies (i) licensed to do business in the State of
California, (ii) domiciled in the United States of America, and (iii) having a
"General Policyholders Rating" of at least [A:X]A-:X (or such higher rating as
may be required by a lender having a lien on the Premises) as set forth in the
most current issue of "Best's Insurance Reports". Any deductible amounts under
any of the insurance policies required hereunder shall not exceed [One Thousand
Dollars ($1,000)] Five Thousand Dollars ($5,000). Tenant shall deliver to
Landlord certificates of insurance and true and complete copies of any and all
endorsements required herein for all insurance required to be maintained by
Tenant hereunder at the time of execution of this Lease by Tenant. Tenant shall,
at least thirty (30) days prior to expiration of each policy, furnish Landlord
with certificates of renewal or "binders" thereof. Each certificate shall
expressly provide that such policies shall not be cancelable or otherwise
subject to modification except after thirty (30) days prior written notice to
the parties named as additional insureds as required in this Lease (except for
cancellation for nonpayment of premium, in which event cancellation shall not
take effect until at least ten (10) days' notice has been given to Landlord).
Tenant shall have the right to provide insurance coverage which it is obligated
to carry pursuant to the terms of this Lease under a blanket insurance policy,
provided such blanket policy expressly affords coverage for the Premises and for
Landlord as required by this Lease.
12.3 ADDITIONAL INSUREDS AND COVERAGE: Landlord, any property management
company and/or agent of Landlord for the Premises, the Building, the Lot or the
Park, any lender(s) of Landlord having a lien against the Premises, the
Building, the Lot or the Park, and any joint venture partners of Landlord shall
be named as additional insureds under all of the policies required in Section
12.1(iii) above with the exception of Tenant's product liability coverage.
Additionally, such policies shall provide for severability of interest. All
insurance to be maintained by Tenant shall, except for workers' compensation and
employer's liability insurance, be primary, without right of contribution from
insurance maintained by Landlord. Any umbrella liability policy or excess
liability policy (which shall be in "following form") shall provide that if the
underlying aggregate is exhausted, the excess coverage will drop down as primary
insurance. The limits of insurance maintained by Tenant shall not limit Tenant's
liability under this Lease. It is the parties' intention that the insurance to
be procured and maintained by Tenant as required herein shall provide coverage
for any and all damage or injury arising from or related to Tenant's operations
of its business and/or Tenant's or Tenant's Representatives' use of the Premises
and/or any of the areas within the Park, whether such events occur within the
Premises (as described in Exhibit A hereto) or in any other areas of the Park.
It is not contemplated or anticipated by the parties that the aforementioned
risks of loss be borne by Landlord's insurance carriers, rather it is
contemplated and anticipated by Landlord and Tenant that such risks of loss be
borne by Tenant's insurance carriers pursuant to the insurance policies procured
and maintained by Tenant as required herein.
12.4 FAILURE OF TENANT TO PURCHASE AND MAINTAIN INSURANCE: In the event
Tenant does not purchase the insurance required in this Lease or keep the same
in full force and effect throughout the term of this Lease (including any
renewals or extensions), Landlord may, but without obligation to do so, purchase
the necessary insurance and pay the premiums therefor. If Landlord so elects to
purchase such insurance, Tenant shall pay to Landlord, as additional rent, the
amount so paid by Landlord promptly upon Landlord's demand therefor. In
addition, Landlord may recover from Tenant and Tenant agrees to pay, as
additional rent, any and all [Enforcement Expenses and] damages which Landlord
may sustain by reason of Tenant's failure to obtain and maintain such insurance.
If Tenant fails to maintain any insurance required in this Lease, Tenant shall
be liable for all losses, damages and costs resulting from such failure.
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13. WAIVER OF SUBROGATION: Landlord and Tenant hereby mutually waive their
respective rights of recovery against each other for any loss of, or damage to,
either parties' property to the extent that such loss or damage is insured by an
insurance policy required to be in effect at the time of such loss or damage.
Each party shall obtain any special endorsements, if required by its insurer
whereby the insurer waives its rights of subrogation against the other party.
This provision is intended to waive fully, and for the benefit of the parties
hereto, any rights and/or claims which might give rise to a right of subrogation
in favor of any insurance carrier. The coverage obtained by Tenant pursuant to
Section 12 of this Lease shall include, without limitation, a waiver of
subrogation endorsement attached to the certificate of insurance. The provisions
of this Section 13 shall not apply in those instances in which such waiver of
subrogation would invalidate such insurance coverage or would cause either
party's insurance coverage to be voided or otherwise uncollectible.
14. LIMITATION OF LIABILITY AND INDEMNITY: Except [for] to the extent of damage
resulting from the [sole active] gross negligence or willful misconduct of
Landlord or its authorized representatives, Tenant agrees to protect, defend
(with counsel acceptable to Landlord) and hold Landlord and Landlord's
lender(s), partners, employees, representatives, legal representatives,
successors and assigns (collectively, the "Indemnitees") harmless and indemnify
the Indemnitees from and against all liabilities, damages, claims, losses,
judgments, charges and expenses (including reasonable attorneys' fees, costs of
court and expenses necessary in the prosecution or defense of any litigation
including the enforcement of this provision) arising from [or in any way related
to, directly or indirectly,] Tenant's or Tenant's Representatives' use of the
Premises, Building and/or the Park, or the conduct of Tenant's business, or from
any activity, work or thing done, permitted or suffered by Tenant in or about
the Premises, or in any way connected with the Premises or with the improvements
or personal property therein, including, but not limited to, any liability for
injury to person or property of Tenant, Tenant's Representatives, or third party
persons. Tenant agrees that the obligations of Tenant herein shall survive the
expiration or earlier termination of this Lease.
Except [for] to the extent of damage resulting from the [sole active]
gross negligence or willful misconduct of Landlord or its authorized
representatives, Landlord shall not be liable to Tenant for any loss or damage
to Tenant or Tenant's property, for any injury to or loss of Tenant's business
or for any damage or injury to any person from any cause whatsoever, including,
but not limited to, any acts, errors or omissions by or on behalf of any other
tenants or occupants of the Building and/or the Park. Tenant shall not, in any
event or circumstance, be permitted to offset or otherwise credit against any
payments of Rent required herein for matters for which Landlord may be liable
hereunder. Landlord and its authorized representatives shall not be liable for
any interference with light or air, or for any latent defect (other than any
latent defect in the Premises or the Building attributable to the original
design or construction of the Building) in the Premises or the Building. To the
fullest extent permitted by law, Tenant agrees that neither Landlord nor any of
Landlord's lender(s), partners, employees, representatives, legal
representatives, successors and assigns shall at any time or to any extent
whatsoever be liable, responsible or in any way accountable for any loss,
liability, injury, death or damage to persons or property which at any time may
be suffered or sustained by Tenant or by any person(s) whomsoever who may at any
time be using, occupying or visiting the Premises, the Building or the Park
unless directly caused by the gross negligence or willful misconduct of Landlord
or its authorized representatives.
15. ASSIGNMENT AND SUBLEASING:
15.1 PROHIBITION: Tenant shall not assign, mortgage, hypothecate,
encumber, grant any license or concession, pledge or otherwise transfer this
Lease (collectively, "assignment"), in whole or in part, whether voluntarily or
involuntarily or by operation of law, nor sublet or permit occupancy by any
person other than Tenant of all or any portion of the Premises without first
obtaining the prior written consent of Landlord, which consent shall not be
unreasonably withheld. Tenant hereby agrees that Landlord may withhold its
consent to any proposed sublease or assignment if the proposed sublessee or
assignee or its business is subject to compliance with additional requirements
of the ADA (defined below) beyond those requirements which are applicable to
Tenant, unless the proposed sublessee or assignee shall (a) first deliver plans
and specifications for complying with such additional requirements and obtain
Landlord's written consent thereto, and (b) comply with all Landlord's
conditions for or contained in such consent, including without limitation,
requirements for security to assure the lien-free completion of such
improvements. If Tenant seeks to sublet or assign all or any portion of the
Premises, Tenant shall deliver to Landlord at least thirty (30) days prior to
the proposed commencement of the sublease or assignment (the "Proposed Effective
Date") the following: (i) the name of the proposed assignee or sublessee; (ii)
such information as to such assignee's or sublessee's financial responsibility
and standing as Landlord may reasonably require; and (iii) the aforementioned
plans and specifications, if any. Within ten (10) days after Landlord's receipt
of a written request from Tenant that Tenant seeks to sublet or assign all or
any portion of the Premises, Landlord shall deliver to Tenant a copy of
Landlord's standard form of sublease or assignment agreement (as applicable),
which instrument shall be utilized for each proposed sublease or assignment (as
applicable), and such instrument shall include a provision whereby the assignee
or sublessee assumes all of Tenant's obligations hereunder and agrees to be
bound by the terms hereof. As Additional Rent hereunder, Tenant shall pay to
Landlord a fee in the amount of five hundred dollars ($500) plus Tenant shall
reimburse Landlord for actual legal and other expenses incurred by Landlord
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in connection with any actual or proposed assignment or subletting; provided (in
each instance) Tenant shall only by required to reimburse Landlord for legal
expenses incurred with respect to a proposed or actual assignment or sublease up
to a maximum amount of $1,500 in each instance. In the event the sublease (1) by
itself or taken together with prior sublease(s) covers or totals, as the case
may be, more than twenty-five percent (25%) of the rentable square feet of the
Premises or (2) is for a term which by itself or taken together with prior or
other subleases is greater than fifty percent (50%) of the period remaining in
the term of this Lease as of the time of the Proposed Effective Date, then
Landlord shall have the right, to be exercised by giving written notice to
Tenant, to recapture the space described in the sublease. If such recapture
notice is given, Tenant shall have the right to withdraw its request to sublease
such portion of the Premises. If Tenant does not withdraw its request in writing
within fifteen (15) days of delivery of the recapture notice, Landlord's
recapture notice [it] shall serve to terminate this Lease with respect to the
proposed sublease space, or, if the proposed sublease space covers all the
Premises, it shall serve to terminate the entire term of this Lease, in either
case as of the Proposed Effective Date. However, no termination of this Lease
with respect to part or all of the Premises shall become effective without the
prior written consent, where necessary, of the holder of each deed of trust
encumbering the Premises or any part thereof. If this Lease is terminated
pursuant to the foregoing with respect to less than the entire Premises, the
Rent shall be adjusted on the basis of the proportion of square feet retained by
Tenant to the square feet originally demised and this Lease as so amended shall
continue thereafter in full force and effect. Each permitted assignee or
sublessee shall assume and be deemed to assume this Lease and shall be and
remain liable jointly and severally with Tenant for payment of Rent and for the
due performance of, and compliance with all the terms, covenants, conditions and
agreements herein contained on Tenant's part to be performed or complied with,
for the term of this Lease. No assignment or subletting shall affect the
continuing primary liability of Tenant (which, following assignment, shall be
joint and several with the assignee), and Tenant shall not be released from
performing any of the terms, covenants and conditions of this Lease. Tenant
hereby acknowledges and agrees that it understands that Landlord's accounting
department may process and accept Rent payments without verifying that such
payments are being made by Tenant, a permitted sublessee or a permitted assignee
in accordance with the provisions of this Lease. Although such payments may be
processed and accepted by such accounting department personnel, any and all
actions or omissions by the personnel of Landlord's accounting department shall
not be considered as acceptance by Landlord of any proposed assignee or
sublessee nor shall such actions or omissions be deemed to be a substitute for
the requirement that Tenant obtain Landlord's prior written consent to any such
subletting or assignment, and any such actions or omissions by the personnel of
Landlord's accounting department shall not be considered as a voluntary
relinquishment by Landlord of any of its rights hereunder nor shall any
voluntary relinquishment of such rights be inferred therefrom. For purposes
hereof, in the event Tenant is a corporation, partnership, joint venture, trust
or other entity other than a natural person, any change in the direct or
indirect ownership of Tenant (whether pursuant to one or more transfers other
than any public trading of the outstanding shares (stock) of Tenant which does
not result in a change of the management and control of Tenant) which results in
a change of more than fifty percent (50%) in the direct or indirect ownership of
Tenant shall be deemed to be an assignment within the meaning of this Section 15
and shall be subject to all the provisions hereof. [Any] Except for a
permissible assignment to a Related Entity, any and all options, first rights of
refusal, tenant improvement allowances and other similar rights granted to
Tenant in this Lease, if any, shall not be assignable by Tenant unless expressly
authorized in writing by Landlord. Notwithstanding anything to the contrary
contained herein, so long as Tenant delivers to Landlord (1) at least thirty
(30) days prior written notice of its intention to assign or sublease the
Premises to any Related Entity, which notice shall set forth the name of the
Related Entity, (2) a copy of the proposed agreement pursuant to which such
assignment or sublease shall be effectuated, and (3) such other information
concerning the Related Entity as Landlord may reasonably require, including
without limitation, information regarding any change in the proposed use of any
portion of the Premises and any financial information with respect to such
Related Entity, and so long as Landlord approves, in writing, of any change in
the proposed use of the subject portion of the Premises, then Tenant may assign
this Lease or sublease any portion of the Premises (X) to any Related Entity, or
(Y) in connection with any merger, consolidation or sale of substantially all of
the assets of Tenant, without having to obtain the prior written consent of
Landlord thereto. For purposes of this Lease the term "Related Entity" shall
mean and refer to any corporation or entity which controls, is controlled by or
is under common control with Tenant, as all of such terms are customarily used
in the industry, and with an equal or greater net worth as Tenant has as of the
proposed transfer date. Any assignment to a Related Entity shall in no way
relieve Tenant of any liability Tenant may have under this Lease and such
assignee or sublessee shall be jointly and severally liable with Tenant
hereunder.
15.2 EXCESS SUBLEASE RENTAL OR ASSIGNMENT CONSIDERATION: In the event of
any sublease or assignment of all or any portion of the Premises where the rent
or other consideration provided for in the sublease or assignment either
initially or over the term of the sublease or assignment exceeds the Rent or pro
rata portion of the Rent, as the case may be, for such space reserved in the
Lease, Tenant shall pay the Landlord monthly, as additional rent, at the same
time as the monthly installments of Rent are payable hereunder, [fifty]
forty-five percent [(50%)](45%) of the excess of each such payment of rent or
other consideration in excess of the Rent called for hereunder.
15.3 WAIVER: Notwithstanding any assignment or sublease to a party other
than a Related Entity, or any indulgences, waivers or extensions of time granted
by Landlord to any assignee or sublessee, or failure by Landlord to take action
against any assignee or sublessee (other than a Related Entity), Tenant [waives
notice of any default of any assignee or sublessee and] agrees that Landlord
may,
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at its option, proceed against Tenant without having taken action against or
joined such assignee or sublessee (other than a Related Entity), except that
Tenant shall have the benefit of any indulgences, waivers and extensions of time
granted to any such assignee or sublessee including any Related Entity.
16. AD VALOREM TAXES: Prior to delinquency, Tenant shall pay all taxes and
assessments levied upon trade fixtures, alterations, additions, improvements,
inventories and personal property located and/or installed on or in the Premises
by, or on behalf of, Tenant; and if requested by Landlord, Tenant shall promptly
deliver to Landlord copies of receipts for payment of all such taxes and
assessments. To the extent any such taxes ar not separately assessed or billed
to Tenant, Tenant shall pay the amount thereof as invoiced by Landlord.
17. 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 any bona fide mortgagee or deed of trust beneficiary
with a lien on all or any portion of the Premises or any ground lessor with
respect to the land of which the Premises are a part, the rights of Tenant under
this Lease and 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 Building or the land upon which the Building is situated
or both, and (ii) the lien of any mortgage or deed of trust which may now exist
or hereafter be executed in any amount for which the Building, the Lot, ground
leases or underlying leases, or Landlord's interest or estate in any of said
items is specified as security. Notwithstanding the foregoing, Landlord or any
such ground lessor, mortgagee, or any beneficiary shall have the right to
subordinate or cause to be subordinated any such ground leases or underlying
leases or any such liens to this Lease. If 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 and upon the request of such successor to
Landlord, attorn to and become the Tenant of the successor in interest to
Landlord, provided such successor in interest will not disturb Tenant's use,
occupancy or quiet enjoyment of the Premises so long as Tenant is not in default
of the terms and provisions of this Lease. The successor in interest to Landlord
following foreclosure, sale or deed in lieu thereof shall not be (a) liable for
any act or omission of any prior lessor or with respect to events occurring
prior to acquisition of ownership; (b) subject to any offsets or defenses which
Tenant might have against any prior lessor; (c) bound by prepayment of more than
one (1) month's Rent; or (d) liable to Tenant for any Security Deposit not
actually received by such successor in interest to the extent any portion or all
of such Security Deposit has not already been forfeited by, or refunded to,
Tenant. Landlord shall be liable to Tenant for all or any portion of the
Security Deposit not forfeited by, or refunded to Tenant, until and unless
Landlord transfers such Security Deposit to the successor in interest. Tenant
covenants and agrees to execute (and acknowledge if required by Landlord, any
lender or ground lessor) and deliver, within five (5) days of a demand or
request by Landlord and in the form requested by Landlord, ground lessor,
mortgagee or beneficiary, any additional documents evidencing the priority or
subordination of this Lease with respect to any such ground leases or underlying
leases or the lien of any such mortgage or deed of trust. Landlord hereby
represents that as of the date on which Landlord and Tenant execute this Lease
there are no deeds of trust, mortgages or ground leases encumbering, or in force
against, any portion of the Premises, the Building or the Lot other than a Deed
of Trust in favor of The Aetna Casualty and Surety Company (the "Current
Lender") which is currently encumbering and in force against the Lot. Within
forty-five (45) days after the date on which Landlord and Tenant execute this
Lease, Landlord shall use commercially reasonable efforts to cause the Current
Lender to execute, acknowledge and record in the Official Records of San Mateo
County, California a subordination, non-disturbance and attornment agreement
substantially in the form of Exhibit I attached hereto (the "Original SDNA").
Tenant hereby agrees to also execute, have acknowledged and deliver to Landlord
the Original SDNA within ten (10) business days after the date on which Landlord
and Tenant execute this Lease. Landlord and Tenant agree that if Landlord at any
time during the term of the Lease causes the Premises, the Building and/or the
Lot to be encumbered by a new mortgage, deed of trust or similar security
instrument and the beneficiary thereof requires this Lease and Tenant's rights
and interests in this Lease to be subordinated to such encumbrance or lien, the
Lease shall be subordinate to such encumbrance or lien subject to the terms of a
subordination, non-disturbance and attornment agreement in form reasonably
acceptable to Landlord, the subject beneficiary and Tenant. Tenant's failure to
timely execute and deliver such additional documents shall, [at Landlord's
option,]subject to Section 20.3 constitute a material default hereunder. [It is
further agreed that Tenant shall be liable to Landlord, and shall indemnify
Landlord from and against any loss, cost, damage or expense, incidental,
consequential, or otherwise, arising or accruing directly or indirectly, from
any failure of Tenant to execute or deliver to Landlord any such additional
documents.]
18. RIGHT OF ENTRY: Tenant grants Landlord or its agents the right to enter the
Premises at all reasonable times, following reasonable prior notice (except in
the event of an emergency) for purposes of inspection, exhibition, posting of
notices, repair or alteration. At Landlord's option, Landlord shall at all times
have and retain a key with which to unlock all the doors in, upon and about the
Premises, excluding Tenant's vaults and safes. It is further agreed that
Landlord shall have the right to use any and all means Landlord deems necessary
to enter the Premises in an emergency. Landlord shall also have the right to
place "for rent" and/or "for sale" signs on the outside of the Premises. Tenant
hereby waives any claim from damages or for any injury or inconvenience to or
interference with Tenant's business,
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or any other loss occasioned thereby except for any claim for any of the
foregoing arising out of the sole [active] gross negligence or willful
misconduct of Landlord or its authorized representatives. Landlord shall use
reasonably diligent efforts to abide by any safety regulations of Tenant to the
extent Landlord actually receives copies of any such safety regulations, except
in the event of an emergency.
19. ESTOPPEL CERTIFICATE: Tenant shall execute (and acknowledge if required by
any lender or ground lessor) and deliver to Landlord, within not less than [five
(5)] seven (7) business days after Landlord provides such to Tenant, a statement
in writing certifying that this Lease is unmodified and in full force and effect
(or, if modified, stating the nature of such modification), the date to which
the Rent and other charges are paid in advance, if any, acknowledging that there
are not, to Tenant's knowledge, any uncured defaults on the part of Landlord
hereunder or specifying such defaults as are claimed, and such other matters as
Landlord may reasonably require. Any such statement may be conclusively relied
upon by Landlord and any prospective purchaser or encumbrancer of the Premises.
Tenant's failure to deliver such statement within such time shall be conclusive
upon the Tenant that (a) this Lease is in full force and effect, without
modification except as may be represented by Landlord; (b) there are no uncured
defaults in Landlord's performance; and (c) not more than one month's Rent has
been paid in advance, except in those instances when Tenant pays Rent quarterly
in advance pursuant to Section 8 hereof, then not more than three month's Rent
has been paid in advance. Failure by Tenant to so timely deliver such certified
estoppel certificate shall be a material default of the provisions of this Lease
unless such failure is cured by Tenant within ten (10) business days after
Landlord's delivery to Tenant of a second written request therefor. Tenant shall
be liable to Landlord, and shall indemnify Landlord from and against any loss,
cost, damage or expense, incidental, consequential, or otherwise, arising or
accruing directly or indirectly, from any failure of Tenant to execute or
deliver to Landlord any such certified estoppel certificate [together with any
and all Enforcement Expenses]within the time periods contemplated in this
Section 19. Landlord shall execute and deliver to Tenant, within the same time
periods given to Tenant under this Section 19, an estoppel certificate
containing the information described in subitems (a), (b) and (c) above.
20. TENANT'S DEFAULT: The occurrence of any one or more of the following events
shall, at Landlord's option, constitute a default and breach of this Lease by
Tenant:
20.1 The [vacation or] abandonment of the Premises by Tenant or the
vacation of the Premises by Tenant [for a period of ten (10) consecutive days or
the vacation of the Premises by Tenant] which [would] actually causes any
insurance policy to be invalidated or otherwise lapse. Tenant agrees to notice
and service of notice as provided for in this Lease and waives any right to any
other or further notice or service of notice which Tenant may have under any
statute or law now or hereafter in effect;
20.2 The failure by Tenant to make any payment of Rent, Additional Rent
or any other payment required hereunder [on the date] within three (3) days
after delivery of written notice from Landlord that said payment is past due.
Tenant agrees that such written notice by Landlord shall serve as the
statutorily required notice under the law and Tenant further agrees to notice
and service of notice as provided for in this Lease [and waives any right to any
other or further notice or service of notice which Tenant may have under any
statute or law now or hereafter in effect];
20.3 [The failure by Tenant to observe, perform or comply with any of
the conditions, covenants or provisions of this Lease (except failure to make
any payment of Rent and/or Additional Rent) and such failure is not cured within
the time period required under the provisions of this Lease. If such failure is
susceptible of cure but cannot reasonably be cured within the aforementioned
time period (if any), as determined solely by Landlord, Tenant shall promptly
commence the cure of such failure and thereafter diligently prosecute such cure
to completion within the time period specified by Landlord in any written notice
regarding such failure as may be delivered to Tenant by Landlord. In no event or
circumstance shall Tenant have more than fifteen (15) days to complete any such
cure, unless otherwise expressly agreed to in writing by Landlord (in Landlord's
sole discretion);] The failure by Tenant to observe, perform or comply with any
of the conditions, covenants or provisions of this Lease (except failure to make
any payment of Rent and/or Additional Rent) and such failure is not cured within
(i) thirty (30) days of the date on which Landlord delivers written notice of
such failure to Tenant for all failures other than with respect to Hazardous
Materials, and (ii) ten (10) days of the date on which Landlord delivers written
notice of such failure to Tenant for all failures in any way related to
Hazardous Materials. However, Tenant shall not be in default of its obligations
hereunder if such failure cannot reasonably be cured within such thirty (30) or
ten (10) day period, as applicable, and Tenant promptly commences, and
thereafter diligently proceeds with same to completion, all actions necessary to
cure such failure as soon as is reasonably possible, but in no event shall the
completion of such cure be later than forty-five (45) days after the date on
which Landlord delivers to Tenant written notice of such failure, unless
Landlord, acting reasonably and in good faith, otherwise expressly agrees in
writing to a longer period of time based upon the circumstances relating to such
failure as well as the nature of the failure and the nature of the actions
necessary to cure such failure;
20.4 The making of a general assignment by Tenant for the benefit of
creditors, the filing of a voluntary petition by Tenant or the filing of an
involuntary petition by any of Tenant's creditors seeking the rehabilitation,
liquidation, or reorganization of Tenant under any law relating to bankruptcy,
insolvency or other relief of debtors and, in the case of an involuntary action,
the failure to remove or
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discharge the same within sixty (60) days of such filing, the appointment of a
receiver or other custodian to take possession of substantially all of Tenant's
assets or this leasehold, Tenant's insolvency or inability to pay Tenant's debts
or failure generally to pay Tenant's debts when due, any court entering a decree
or order directing the winding up or liquidation of Tenant or of substantially
all of Tenant's assets, Tenant taking any action toward the dissolution or
winding up of Tenant's affairs, the cessation or suspension of Tenant's use of
the Premises, or the attachment, execution or other judicial seizure of
substantially all of Tenant's assets or this leasehold;
20.5 Tenant's use or storage of Hazardous Materials in, on or about the
Premises, the Building, the Lot and/or the Park other than as expressly
permitted by the provisions of Section 29 below;
20.6 [The] Tenant knowingly making [of] any material misrepresentation
or omission by Tenant in any materials delivered by or on behalf of Tenant to
Landlord pursuant to this Lease; or
[20.7 Tenant fails to timely and duly perform any of its obligations
under the Modification Agreement, including without limitation, making the
payments required to be made by Tenant thereunder in a timely manner. A material
adverse change in the financial condition of Tenant or an affiliated entity of
Tenant which may adversely affect Tenant's ability to perform all or any portion
of its obligations under this Lease.]
21. REMEDIES FOR TENANT'S DEFAULT:
21.1 LANDLORD'S RIGHTS: In the event of Tenant's default or breach of
the Lease, Landlord may terminate Tenant's right to possession of the Premises
by any lawful means in which case upon delivery of written notice by Landlord to
Tenant of such termination, this Lease shall terminate on the date specified by
Landlord in such notice and Tenant shall immediately surrender possession of the
Premises to Landlord. In addition, the Landlord shall have the immediate right
of re-entry whether or not this Lease is terminated, and if this right of
re-entry is exercised following abandonment of the Premises by Tenant, Landlord
may consider any personal property belonging to Tenant and left on the Premises
to also have been abandoned. No re-entry or taking possession of the Premises by
Landlord pursuant to this Section 21 shall be construed as an election to
terminate this Lease unless a written notice of such intention is given to
Tenant. If Landlord relets the Premises or any portion thereof, (i) Tenant shall
be liable immediately to Landlord for all costs Landlord incurs in reletting the
Premises or any part thereof, including, without limitation, broker's
commissions, expenses of cleaning, redecorating[, and further improving the
Premises and other similar costs] (collectively, the "Reletting Costs"), and
(ii) the rent received by Landlord from such reletting shall be applied to the
payment of, first, any indebtedness from Tenant to Landlord other than Base
Rent, Operating Expenses, Tax Expenses, Administrative Expenses, Common Area
Utility Costs, and Utility Expenses; second, all costs including maintenance,
incurred by Landlord in reletting; and, third, Base Rent, Operating Expenses,
Tax Expenses, Administrative Expenses, Common Area Utility Costs, Utility
Expenses, and all other sums due under this Lease. Any and all of the Reletting
Costs shall be fully chargeable to Tenant and shall not be prorated or otherwise
amortized in relation to any new lease for the Premises or any portion thereof.
After deducting the payments referred to above, any sum remaining from the
rental 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. Reletting may be for
a period shorter or longer than the remaining term of this Lease. No act by
Landlord other than giving written notice 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. So
long as this Lease is not terminated, Landlord shall have the right to remedy
any default of Tenant, to maintain or improve the Premises, to cause a receiver
to be appointed to administer the Premises and new or existing subleases and to
add to the Rent payable hereunder all of Landlord's reasonable costs in so
doing, with interest at the maximum rate permitted by law from the date of such
expenditure.
21.2 DAMAGES RECOVERABLE: If Tenant breaches this Lease and abandons the
Premises before the end of the term, or if Tenant's right to possession is
terminated by Landlord because of a breach or default of the Lease, then in
either such case, Landlord may recover from Tenant all damages suffered by
Landlord as a result of Tenant's failure to perform its obligations hereunder,
including, but not limited to, the cost of any tenant improvements constructed
by or on behalf of Tenant pursuant to Exhibit B hereto, the portion of any
broker's or leasing agent's commission incurred with respect to the leasing of
the Premises to Tenant for the balance of the term of the Lease remaining after
the date on which Tenant is in default of its obligations hereunder, and all
Reletting Costs, and the worth at the time of the award (computed in accordance
with paragraph (3) of Subdivision (a) of Section 1951.2 of the California Civil
Code) of the amount by which the Rent then unpaid hereunder for the balance of
the Lease term exceeds the amount of such loss of Rent for the same period which
Tenant proves could be reasonably avoided by Landlord and in such case, Landlord
prior to the award, may relet the Premises for the purpose of mitigating damages
suffered by Landlord because of Tenant's failure to perform its obligations
hereunder; provided, however, that even though Tenant has abandoned the Premises
following such breach, this Lease shall nevertheless continue in full force and
effect for as long as Landlord does not terminate Tenant's right of possession,
and until such termination, Landlord shall have the remedy described in
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Section 1951.4 of the California Civil Code (Landlord may continue this Lease in
effect after Tenant's breach and abandonment and recover Rent as it becomes due,
if Tenant has the right to sublet or assign, subject only to reasonable
limitations) and may enforce all its rights and remedies under this Lease,
including the right to recover the Rent from Tenant as it becomes due hereunder.
The "worth at the time of the award" within the meaning of Subparagraphs (a)(1)
and (a)(2) of Section 1951.2 of the California Civil Code shall be computed by
allowing interest at the rate of ten percent (10%) per annum. Tenant waives
redemption or relief from forfeiture under California Code of Civil Procedure
Sections 1174 and 1179, or under any other present or future law, in the event
Tenant is evicted or Landlord takes possession of the Premises by reason of any
default of Tenant hereunder.
21.3 RIGHTS AND REMEDIES CUMULATIVE: The foregoing rights and remedies
of Landlord are not exclusive; they are cumulative in addition to any rights and
remedies now or hereafter existing at law, in equity by statute or otherwise, or
to any equitable remedies Landlord may have, and to any remedies Landlord may
have under bankruptcy laws or laws affecting creditor's rights generally. In
addition to all remedies set forth above, if Tenant defaults or otherwise
breaches this Lease, any and all Base Rent waived by Landlord under Section 3
above shall be immediately due and payable to Landlord and all options granted
to Tenant hereunder shall automatically terminate, unless otherwise expressly
agreed to in writing by Landlord.
21.4 WAIVER OF A DEFAULT: The waiver by Landlord of any default or
breach of any provision of this Lease shall not be deemed or construed a waiver
of any other breach or default by Tenant hereunder or of any subsequent breach
or default of this Lease, except for the default specified in the waiver.
22. HOLDING OVER: If Tenant holds possession of the Premises after the
expiration of the term of this Lease with Landlord's consent, Tenant shall
become a tenant from month-to-month upon the terms and provisions of this Lease,
provided the monthly Base Rent during such hold over period shall be 150% of the
Base Rent due on the last month of the Lease term, payable in advance on or
before the first day of each month. Acceptance by Landlord of the monthly Base
Rent without the additional fifty percent (50%) increase of Base Rent shall not
be deemed or construed as a waiver by Landlord of any of its rights to collect
the increased amount of the Base Rent as provided herein at any time. Such
month-to-month tenancy shall not constitute a renewal or extension for any
further term. All options, if any, granted under the terms of this Lease shall
be deemed automatically terminated and be of no force or effect during said
month-to-month tenancy. Tenant shall continue in possession until such tenancy
shall be terminated by either Landlord or Tenant giving written notice of
termination to the other party at least thirty (30) days prior to the effective
date of termination. This paragraph shall not be construed as Landlord's
permission for Tenant to hold over. Acceptance of Base Rent by Landlord
following expiration or termination of this Lease shall not constitute a renewal
of this Lease.
23. LANDLORD'S DEFAULT: Landlord shall not be deemed in breach or default of
this Lease unless Landlord fails within a reasonable time to perform an
obligation required to be performed by Landlord hereunder. For purposes of this
provision, a reasonable time shall in no event be less than thirty (30) days
after receipt by Landlord of written notice specifying the nature of the
obligation Landlord has not performed; provided, however, that if the nature of
Landlord's obligation is such that more than thirty (30) days, after receipt of
written notice, is reasonably necessary for its performance, then Landlord shall
not be in breach or default of this Lease if performance of such obligation is
commenced within such thirty (30) day period and thereafter diligently pursued
to completion.
24. PARKING: Landlord shall make available to Tenant, and Tenant shall have [aan
irrevocable] the license to use throughout the term of this Lease, the number of
undesignated and nonexclusive parking spaces set forth on Page 1. [Landlord
shall exercise reasonable efforts to insure that such spaces are available to
Tenant for its use, but Landlord shall not be required to enforce Tenant's right
to use the same.]
25. SALE OF PREMISES: In the event of any sale of the Premises by Landlord or
the cessation otherwise of Landlord's interest therein, Landlord shall be and is
hereby entirely released from any and all of its obligations to perform or
further perform under this Lease and from all liability hereunder [as of]
occurring after the date of such sale; and the purchaser, at such sale or any
subsequent sale of the Premises shall be deemed, without any further agreement
between the parties or their successors in interest or between the parties and
any such purchaser, to have assumed and agreed to carry out any and all of the
covenants and obligations of the Landlord under this Lease. For purposes of this
Section 25, the term "Landlord" means only the owner and/or agent of the owner
as such parties exist as of the date on which Tenant executes this Lease. A
ground lease or similar long term lease by Landlord of the entire Building, of
which the Premises are a part, shall be deemed a sale within the meaning of this
Section 25. Tenant agrees to attorn to such new owner provided such new owner
does not disturb Tenant's use, occupancy or quiet enjoyment of the Premises so
long as Tenant is not in default of any of the provisions of this Lease.
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is enclosed in brackets "[" and "]" in the electronic format.
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26. WAIVER: No delay or omission in the exercise of any right or remedy of
Landlord on any default by Tenant shall impair such a right or remedy or be
construed as a waiver. The subsequent acceptance of Rent by Landlord after
breach by Tenant of any covenant or term of this Lease shall not be deemed a
waiver of such breach, other than a waiver of timely payment for the particular
Rent payment involved, and shall not prevent Landlord from maintaining an
unlawful detainer or other action based on such breach. No payment by Tenant or
receipt by Landlord of a lesser amount than the monthly Rent and other sums due
hereunder shall be deemed to be other than on account of the earliest Rent or
other sums due, nor shall any endorsement or statement on any check or
accompanying any check or payment be deemed an accord and satisfaction; and
Landlord may accept such check or payment without prejudice to Landlord's right
to recover the balance of such Rent or other sum or pursue any other remedy
provided in this Lease. No failure, partial exercise or delay on the part of the
Landlord in exercising any right, power or privilege hereunder shall operate as
a waiver thereof.
27. CASUALTY DAMAGE: [If the Premises or any part thereof shall be damaged by
fire or other casualty, Tenant shall give prompt written notice thereof to
Landlord. In case the Building shall be so damaged by fire or other casualty
that substantial alteration or reconstruction of the Building shall, in
Landlord's sole opinion, be required (whether or not the Premises shall have
been damaged by such fire or other casualty), Landlord may, at its option,
terminate this Lease by notifying Tenant in writing of such termination within
sixty (60) days after the date of such damage, in which event the Rent shall be
abated as of the date of such damage. If Landlord does not elect to terminate
this Lease and provided insurance proceeds and any contributions from Tenant, if
necessary, are available to fully repair the damage, Landlord shall within
ninety (90) days after the date of such damage commence to repair and restore
the Building and shall proceed with reasonable diligence to restore the Building
(except that Landlord shall not be responsible for delays outside its control)
to substantially the same condition in which it was immediately prior to the
happening of the casualty; provided, Landlord shall not be required to rebuild,
repair, or replace any part of Tenant's furniture, furnishings or fixtures and
equipment removable by Tenant or any improvements, alterations or additions
installed by or for the benefit of Tenant under the provisions of this Lease.
Landlord shall not in any event be required to spend for such work an amount in
excess of the insurance proceeds (excluding any deductible) and any
contributions from Tenant, if necessary, actually received by Landlord as a
result of the fire or other casualty. Landlord shall not be liable for any
inconvenience or annoyance to Tenant, injury to the business of Tenant, loss of
use of any part of the Premises by the Tenant or loss of Tenant's personal
property resulting in any way from such damage or the repair thereof, except
that, subject to the provisions of the next sentence, Landlord shall allow
Tenant a fair diminution of Rent during the time and to the extent the Premises
are unfit for occupancy. If the Premises or any other portion of the Building be
damaged by fire or other casualty resulting from the intentional or negligent
acts or omissions of Tenant or any of Tenant's Representatives, the Rent shall
not be diminished during the repair of such damage and Tenant shall be liable to
Landlord for the cost and expense of the repair and restoration of all or any
portion of the Building caused thereby (including, without limitation, any
deductible) to the extent such cost and expense is not covered by insurance
proceeds. In the event the holder of any indebtedness secured by the Premises
requires that the insurance proceeds be applied to such indebtedness, then
Landlord shall have the right to terminate this Lease by delivering written
notice of termination to Tenant within thirty (30) days after the date of notice
to Tenant of any such event, whereupon all rights and obligations shall cease
and terminate hereunder. Except as otherwise provided in this Section 27, Tenant
hereby waives the provisions of Sections 1932(2.), 1933(4.), 1941 and 1942 of
the California Civil Code.]
27.1 CASUALTY. If the Premises or any part thereof (excluding any
alterations or improvements installed by or for the benefit of Tenant) shall be
damaged or destroyed by fire or other casualty, Tenant shall give immediate
written notice thereof to Landlord. Within thirty (30) days after receipt by
Landlord of such notice, Landlord shall notify Tenant, in writing, whether the
necessary repairs can reasonably be made: (a) within ninety (90) days; (b) in
more than ninety (90) days but in less than one hundred eighty (180) days; or
(c) in more than one hundred eighty (180) days, from the date of such notice.
27.1.1 MINOR INSURED DAMAGE. If the Premises are damaged only
to such extent that repairs, rebuilding and/or restoration can be reasonably
completed within ninety (90) days, this Lease shall not terminate and, provided
that insurance proceeds are available to fully repair the damage, Landlord shall
repair the Premises to substantially the same condition that existed prior to
the occurrence of such casualty, except Landlord shall not be required to
rebuild, repair, or replace any alterations or improvements installed by or for
the benefit of Tenant or any part of Tenant's furniture, furnishings or fixtures
and equipment removable by Tenant. The Rent payable hereunder shall be abated
proportionately from the date Tenant vacates the Premises only to the extent
rental abatement insurance proceeds are received by Landlord and the Premises
are unfit for occupancy.
27.1.2 INSURED DAMAGE REQUIRING MORE THAN 90 DAYS TO REPAIR.
If the Premises are damaged only to such extent that repairs, rebuilding and/or
restoration can be reasonably completed in more than ninety (90) days but in
less than one hundred eighty (180) days, then Landlord shall have the option of:
(a) terminating the Lease effective upon the occurrence of such damage, in which
event the Rent shall be abated from the date Tenant vacates the Premises; or (b)
electing to repair the Premises to substantially the same condition that existed
prior to the occurrence of such casualty, provided insurance proceeds are
available to fully repair the damage (except that Landlord shall not be required
to rebuild, repair, or replace any alterations or improvements installed by or
for the benefit of Tenant
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is enclosed in brackets "[" and "]" in the electronic format.
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or any part of Tenant's furniture, furnishings or fixtures and equipment
removable by Tenant). The Rent payable hereunder shall be abated proportionately
from the date Tenant vacates the Premises only to the extent rental abatement
insurance proceeds are received by Landlord and the Premises are unfit for
occupancy. If Landlord should fail to substantially complete such repairs within
one hundred eighty (180) days after the date on which Landlord is notified by
Tenant of the occurrence of such casualty (such 180-day period to be extended
for delays caused by Tenant or any force majeure events), Tenant may within
twenty (20) days after expiration of such one hundred eighty (180) day period
(as same may be extended), terminate this Lease by delivering written notice to
Landlord as Tenant's exclusive remedy, whereupon all rights of Tenant hereunder
shall cease and terminate twenty (20) days after Landlord's receipt of such
notice.
27.1.3 MAJOR INSURED DAMAGE. If the Premises are damaged to
such extent that repairs, rebuilding and/or restoration cannot be reasonably
completed within one hundred eighty (180) days, then either Landlord or Tenant
may terminate this Lease by giving written notice within twenty (20) days after
notice from Landlord regarding the time period of repair. If either party
notifies the other of its intention to so terminate the Lease, then this Lease
shall terminate and the Rent shall be abated from the date Tenant vacates the
Premises. If neither party elects to terminate this Lease, Landlord shall
promptly commence and diligently prosecute to completion the repairs to the
Premises, provided insurance proceeds are available to fully repair the damage
(except that Landlord shall not be required to rebuild, repair, or replace any
alterations or improvements installed by or for the benefit of Tenant or any
part of Tenant's furniture, furnishings or fixtures and equipment removable by
Tenant). During the time when Landlord is prosecuting such repairs to
completion, the Rent payable hereunder shall be abated proportionately from the
date Tenant vacates the Premises only to the extent rental abatement insurance
proceeds are received by Landlord and only during the time period that the
Premises are unfit for occupancy.
27.1.4 DAMAGE NEAR END OF TERM. Notwithstanding anything to
the contrary contained in this Lease except for the provisions of Section 27.2
below, if the Premises are damaged or destroyed during the last year of then
applicable term of this Lease, Landlord may, at its option, cancel and terminate
this Lease by giving written notice to Tenant of its election to do so within
thirty (30) days after receipt by Landlord of notice from Tenant of the
occurrence of such casualty. If Landlord so elects to terminate this Lease, all
rights of Tenant hereunder shall cease and terminate ten (10) days after
Tenant's receipt of such notice.
27.2 TENANT'S OR TENANT'S REPRESENTATIVE'S FAULT. If any portion of the
Premises is damaged or destroyed due to the fault, negligence (active or
passive) or breach of this Lease by Tenant or any of Tenant's Representatives,
Rent shall not be diminished during the repair of such damage and Tenant shall
be liable to Landlord for the cost of the repair caused thereby to the extent
such cost is not covered by insurance proceeds.
27.3 UNINSURED CASUALTY. Tenant shall be responsible for and shall pay
to Landlord, as Additional Rent, any deductibles amount under the property
insurance for the Premises and/or the Building. If any portion of the Premises
is damaged and is not fully covered by insurance proceeds received by Landlord
(and Tenant elects not to pay any such difference) or if the holder of any
indebtedness secured by the Premises requires that the insurance proceeds be
applied to such indebtedness, then Landlord shall have the right to terminate
this Lease by delivering written notice of termination to the other party within
thirty (30) days after the date of notice to Tenant of any such event, whereupon
all rights and obligations shall cease and terminate hereunder, except for those
obligations expressly provided for in this Lease to survive such termination of
the Lease.
27.4 TENANT'S WAIVER. Landlord shall not be liable for any inconvenience
or annoyance to Tenant, injury to the business of Tenant, loss of use of any
part of the Premises by Tenant or loss of Tenant's personal property, resulting
in any way from such damage, destruction or the repair thereof, except that,
Landlord shall allow Tenant a fair diminution of Rent during the time and to the
extent the Premises are unfit for occupancy as specifically provided above in
this Section 27. With respect to any damage or destruction which Landlord is
obligated to repair or may elect to repair, Tenant hereby waives all rights to
terminate this Lease or offset any amounts against Rent pursuant to rights
accorded Tenant by any law currently existing or hereafter enacted, including
but not limited to, all rights pursuant to the provisions of Sections 1932(2.),
1933(4.), 1941 and 1942 of the California Civil Code, as the same may be amended
or supplemented from time to time. Notwithstanding anything to the contrary
contained herein, if the holder of any indebtedness secured by the Premises
requires that the insurance proceeds be applied to such indebtedness, then
Landlord shall have the right to terminate this Lease by delivering written
notice of termination to Tenant within thirty (30) days after the date of notice
to Tenant of any such event, whereupon all rights and obligations shall cease
and terminate hereunder, except for those obligations expressly provided for in
this Lease to survive such termination of the Lease.
27.5 REPAIR AND RESTORATION BY TENANT. Notwithstanding anything to the
contrary in this Section 27, but subject to the administrative and oversight
rights of any lender of Landlord, Tenant shall have the following rights in the
event of any casualty damage to the Premises; (i) in the event of Minor Insured
Damage, if Landlord, or to the extent Landlord, does not repair such damage,
Tenant shall have the right, but not the obligation, to repair such damage and
completely restore the Premises at its own expense and without any contribution
from Landlord or Landlord's insurers; and (ii) in the event of insured damage
requiring more than 90 days, but less than 180 days, to repair, or in the event
of Major
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Insured Damage, Tenant shall have the right, but not the obligation, to repair
such damage and completely restore the Premises at Tenant's own expense and
without any contribution from Landlord or Landlord's insurers and keep this
Lease in full force and effect. Tenant shall exercise its rights under this
Section 27.5 by giving Landlord written notice (the "Tenant Restoration Notice")
of Tenant's intent to repair such casualty damage to the Premises within twenty
(20) business days of receipt of written notice of Landlord's determination of
the amount of time necessary to repair such casualty damage. Tenant's rights
hereunder shall be subject to Landlord's right, in its reasonable discretion, to
reconfigure other portions of the Park; provided, however, that such
reconfiguration shall not substantially impair Tenant's right to restore and
repair the Premises if Tenant duly elects to do so under this Section 27.5. If
Tenant fails to timely deliver to Landlord the Tenant Restoration Notice,
thereafter Tenant shall have no further rights to repair and restore the
Premises under this Section 27.5 with respect to the subject casualty damage.
The foregoing right granted to Tenant in this Section 27.5 shall be subject to
the satisfaction of all of the following conditions: (a) Tenant shall promptly
notify Landlord of its election to so repair and restore the Premises; (b)
Tenant shall promptly prepare and deliver to Landlord, for Landlord's prior
written approval, all plans, specifications, drawings and other information and
schematics as Landlord may request; (c) Tenant shall obtain, and deliver a copy
to Landlord of, all permits and licenses for such work; (d) Tenant shall comply
with all of the provisions of Section 10.1 with respect to such work; (e) Tenant
and Tenant's contractors shall procure and maintain throughout the time period
during which such work is being performed builder's risk insurance with such
insurers as required by the provisions of Section 12 above, Exhibit B and
Exhibit B-1 attached hereto, and Tenant shall also comply with all of the
provisions of Section 12, Exhibit B and Exhibit B-1 attached hereto pertaining
to insurance, including without limitation, naming Landlord and its property
management company (if other than Landlord), partners and lenders as additional
insureds thereunder, and delivering certificates of insurance to Landlord; (f)
after the completion of such work, Tenant shall deliver to Landlord as-built
plans and any certificate of occupancy or other approvals issued by applicable
governmental agencies with respect to the completion of such work; (g) Tenant
shall promptly commence and diligently pursue such repair and restoration work;
(h) during the time period such repair and restoration work is being performed,
Rent shall only be abated to the extent rental abatement proceeds are actually
received by Landlord and the Premises are unfit for occupancy; and (i) Tenant
shall comply with all of the provisions of Exhibit B and Exhibit B-2 pertaining
to Landlord's Building Standards (defined below). Notwithstanding anything to
the contrary contained herein, the rights given to Tenant under this Section
27.5 are personal to Tenant and any Related Entity of Tenant and may not be
assigned as part of or separate from this Lease and in no event shall such
rights be available to any subtenant or assignee of Tenant other then to a
Related Entity of Tenant. Notwithstanding anything to the contrary contained
herein, Landlord hereby covenants and agrees that Landlord shall use all
diligent efforts to cause Landlord's lender to fully recognize and effectuate
the rights conferred upon Tenant in this Section 27.5, including without
limitation, requesting such lender to fully cooperate with Tenant in Tenant's
performance of any repair and restoration work.
28. CONDEMNATION: If twenty-five percent (25%) or more of the Premises is
condemned by eminent domain, inversely condemned or sold in lieu of condemnation
for any public or quasi-public use or purpose ("Condemned"), then Tenant or
Landlord may terminate this Lease as of the date when physical possession of the
Premises is taken and title vests in such condemning authority, and Rent shall
be adjusted to the date of termination. Tenant shall not because of such
condemnation assert any claim against Landlord or the condemning authority for
any compensation because of such condemnation, and Landlord shall be entitled to
receive the entire amount of any award without deduction for any estate of
interest or other interest of Tenant. If a substantial portion of the Premises,
Building or the Lot is so Condemned, Landlord [at its] or Tenant, at either
party's option may terminate this Lease. If [Landlord does not] neither party
elects to terminate this Lease, Landlord shall, if necessary, promptly proceed
to restore the Premises or the Building to substantially its same condition
prior to such partial condemnation, allowing for the reasonable effects of such
partial condemnation, and a proportionate allowance shall be made to Tenant, as
[solely] reasonably determined by Landlord, for the Rent corresponding to the
time during which, and to the part of the Premises of which, Tenant is deprived
on account of such partial condemnation and restoration. Landlord shall not be
required to spend funds for restoration in excess of the amount received by
Landlord as compensation awarded.
29. ENVIRONMENTAL MATTERS/HAZARDOUS MATERIALS:
29.1 HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE: Prior to executing this
Lease, Tenant has completed, executed and delivered to Landlord [the] Tenant's
initial Hazardous Materials Disclosure Certificate (the "Initial HazMat
Certificate"), a copy of which is attached hereto as Exhibit G E and
incorporated herein by this reference. Tenant covenants, represents and warrants
to Landlord that, to the best of Tenant's knowledge after due inquiry, the
information on the Initial HazMat Certificate is true and correct and accurately
describes the use(s) of Hazardous Materials which will be made and/or used on
the Premises by Tenant. Tenant shall commencing with the date which is one year
from the Commencement Date and continuing every year thereafter, complete,
execute, and deliver to Landlord, a Hazardous Materials Disclosure Certificate
(the "HazMat Certificate") describing Tenant's present use of Hazardous
Materials on the Premises, and any other reasonably necessary documents as
requested by Landlord. The HazMat Certificate required hereunder shall be in
substantially the form as that which
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is enclosed in brackets "[" and "]" in the electronic format.
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is attached hereto as Exhibit E. Landlord hereby acknowledges and agrees that as
of the date on which both parties execute and deliver this Lease, Landlord has
approved the Initial HazMat Certificate.
29.2 DEFINITION OF HAZARDOUS MATERIALS: As used in this Lease, the term
Hazardous Materials shall mean and include (a) any hazardous or toxic wastes,
materials or substances, and other pollutants or contaminants, which are or
become regulated by any Environmental Laws; (b) petroleum, petroleum by
products, gasoline, diesel fuel, crude oil or any fraction thereof; (c) asbestos
and asbestos containing material, in any form, whether friable or non-friable;
(d) polychlorinated biphenyls; (e) radioactive materials; (f) lead and
lead-containing materials; (g) any other material, waste or substance displaying
toxic, reactive, ignitable or corrosive characteristics, as all such terms are
used in their broadest sense, and are defined or become defined by any
Environmental Law (defined below); or (h) any materials which cause or threatens
to cause a nuisance upon or waste to any portion of the Premises, the Building,
the Lot, the Park or any surrounding property; or poses or threatens to pose a
hazard to the health and safety of persons on the Premises or any surrounding
property.
29.3 PROHIBITION; ENVIRONMENTAL LAWS: Except for, and to the extent of,
the type and quantities of Hazardous Materials specified in the Initial HazMat
Certificate, Tenant shall not be entitled to use nor store any Hazardous
Materials on, in, or about the Premises, the Building, the Lot and the Park, or
any portion of the foregoing, without, in each instance, obtaining Landlord's
prior written consent thereto. If Landlord consents to any such usage or
storage, then Tenant shall be permitted to use and/or store only those Hazardous
Materials that are necessary for Tenant's business and to the extent disclosed
in the then applicable HazMat Certificate and as expressly approved by Landlord
in writing, provided that such usage and storage is only to the extent of the
quantities of Hazardous Materials as specified in the then applicable HazMat
Certificate as expressly approved by Landlord and provided further that such
usage and storage is in full compliance with any and all local, state and
federal environmental, health and/or safety-related laws, statutes, orders,
standards, courts' decisions, ordinances, rules and regulations (as interpreted
by judicial and administrative decisions), decrees, directives, guidelines,
permits or permit conditions, currently existing and as amended, enacted, issued
or adopted in the future which are or become applicable to Tenant or all or any
portion of the Premises (collectively, the "Environmental Laws"). Tenant agrees
that any changes to the type and/or quantities of Hazardous Materials specified
in the most recent HazMat Certificate may be implemented only with the prior
written consent of Landlord, which consent [may be given or withheld in
Landlord's sole discretion]shall not be unreasonably withheld. Tenant shall not
be entitled nor permitted to install any tanks under, on or about the Premises
for the storage of Hazardous Materials without the express written consent of
Landlord, which may be given or withheld in Landlord's sole discretion. Landlord
shall have the right at all times, but not more than twice per year (unless
Tenant is then in default or Landlord has reason to believe that the Premises
have been contaminated) during the term of this Lease to (i) inspect the
Premises, (ii) conduct tests and investigations to determine whether Tenant is
in compliance with the provisions of this Section 29, and (iii) request lists of
all Hazardous Materials used, stored or otherwise located on, under or about the
Premises, the Common Areas and/or the parking lots (to the extent the Common
Areas and/or the parking lots are not considered part of the Premises). The cost
of all such inspections, tests and investigations shall be borne solely by
Tenant, if Landlord reasonably believes they are necessarydetermines that Tenant
or any of Tenant's Representatives are directly or indirectly responsible in any
manner for any contamination revealed by such inspections, tests and
investigations. The aforementioned rights granted herein to Landlord and its
representatives shall not create (a) a duty on Landlord's part to inspect, test,
investigate, monitor or otherwise observe the Premises or the activities of
Tenant and Tenant's Representatives with respect to Hazardous Materials,
including without limitation, Tenant's operation, use and any remediation
related thereto, or (b) liability on the part of Landlord and its
representatives for Tenant's use, storage, disposal or remediation of Hazardous
Materials, it being understood that Tenant shall be solely responsible for all
liability in connection therewith.
29.4 TENANT'S ENVIRONMENTAL OBLIGATIONS: Tenant shall give to Landlord
immediate verbal and follow-up written notice of any spills, releases,
discharges, disposals, emissions, migrations, removals or transportation of
Hazardous Materials on, under or about the Premises, or in any Common Areas or
parking lots (to the extent such areas are not considered part of the Premises).
Tenant, at its sole cost and expense, covenants and warrants to promptly
investigate, clean up, remove, restore and otherwise remediate (including,
without limitation, preparation of any feasibility studies or reports and the
performance of any and all closures) any spill, release, discharge, disposal,
emission, migration or transportation of Hazardous Materials arising from or
related to the intentional or negligent acts or omissions of Tenant or Tenant's
Representatives such that the affected portions of the Park and any adjacent
property are returned to the condition existing prior to the appearance of such
Hazardous Materials. Any such investigation, clean up, removal, restoration and
other remediation shall only be performed after Tenant has obtained Landlord's
prior written consent, which consent shall not be unreasonably withheld so long
as such actions would not potentially have a material adverse long-term or
short-term effect on the Premises, the Building, the Lot or the Park, or any
portion of any of the foregoing. Notwithstanding the foregoing, Tenant shall be
entitled to respond immediately to an emergency without first obtaining
Landlord's prior written consent. Tenant, at its sole cost and expense, shall
conduct and perform, or cause to be conducted and performed, all closures as
required by any Environmental Laws or any agencies or other governmental
authorities having jurisdiction thereof. If Tenant fails to so promptly
investigate, clean up, remove, restore, provide closure or otherwise so
remediate, Landlord may, but without obligation to do so, take any and all steps
necessary to rectify the same and Tenant shall promptly reimburse Landlord, upon
demand, for all costs and expenses to
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Landlord of performing investigation, clean up, removal, restoration, closure
and remediation work. All such work undertaken by Tenant, as required herein,
shall be performed in such a manner so as to enable Landlord to make full
economic use of the Premises, the Building, the Lot and the Park after the
satisfactory completion of such work.
29.5 ENVIRONMENTAL INDEMNITY: In addition to Tenant's obligations as set
forth hereinabove, Tenant [and Tenant's officers and directors] agrees to, and
shall, protect, indemnify, defend (with counsel acceptable to Landlord) and hold
Landlord and Landlord's lenders, partners, property management company (if other
than Landlord), agents, directors, officers, employees, representatives,
contractors, shareholders, successors and assigns and each of their respective
partners, directors, employees, representatives, agents, contractors,
shareholders, successors and assigns harmless from and against any and all
claims, judgments, damages, penalties, fines, liabilities, losses (including,
without limitation, diminution in value of the Premises, the Building, the Lot,
the Park, or any portion of any of the foregoing, damages for the loss of or
restriction on the use of rentable or usable space, and from any adverse impact
of Landlord's marketing of any space within the Building and/or Park), suits,
administrative proceedings and costs (including, but not limited to, attorneys'
and consultant fees and court costs) arising at any time during or after the
term of this Lease in connection with or related to, directly or indirectly, the
use, presence, transportation, storage, disposal, migration, removal, spill,
release or discharge of Hazardous Materials on, in or about the Premises, or in
any Common Areas or parking lots (to the extent such areas are not considered
part of the Premises) as a result (directly or indirectly) of the intentional or
negligent acts or omissions of Tenant or Tenant's Representatives. The foregoing
indemnity shall not include any claims, judgments, damages, penalties, fines,
liabilities or losses related in any way to the residual hazardous substances
described in Section 29.7 below. Neither the written consent of Landlord to the
presence, use or storage of Hazardous Materials in, on, under or about any
portion of the Premises, the Building, the Lot and the Park, nor the strict
compliance by Tenant with all Environmental Laws shall excuse Tenant [and
Tenant's officers and directors] from its obligations of indemnification
pursuant hereto. To the extent Landlord is strictly liable under any
Environmental Laws, Tenant's obligations to Landlord under this Section 29 and
the indemnity contained herein shall likewise be without regard to fault on
Tenant's part with respect to the violation of any Environmental Law which
results in liability to any of the aforementioned indemnitees.
Tenant shall not be liable for nor otherwise obligated to Landlord under
any provision of the Lease with respect to (i) any claim, remediation
obligation, investigation obligation, liability, cause of action, attorney's
fees, consultants' cost, expense or damage resulting from any Hazardous Material
present in, on or about the Premises or any of the Buildings in Phase IV to the
extent not caused nor otherwise permitted, directly or indirectly, by Tenant or
Tenant's Representatives, including without limitation, any residual Hazardous
Materials which are present in, on or about the Premises, the Building or the
Lot as of the Lease Date including any residual hazardous substances referred to
in section 29.7 below; or (ii) the removal, investigation, monitoring or
remediation of any Hazardous Material present in, on or about the Premises or
the Building caused by any source, including third parties other than Tenant and
Tenant's Representatives, as a result of or in connection with the acts or
omissions of persons other than Tenant or Tenant's Representatives; provided,
however, Tenant shall be fully liable for and otherwise obligated to Landlord
under the provisions of this Lease for all liabilities, costs, damages,
penalties, claims, judgments, expenses (including without limitation, attorneys'
and experts' fees and costs) and losses to the extent (a) Tenant or any of
Tenant's Representatives contributes to the presence of such Hazardous Materials
or Tenant and/or any of Tenant's Representatives exacerbates the conditions
caused by such Hazardous Materials, or (b) Tenant and/or Tenant's
Representatives allows or permits persons over which Tenant or any of Tenant's
Representatives has control and/or for which Tenant or any of Tenant's
Representatives are legally responsible for, to cause such Hazardous Materials
to be present in, on, under, through or about any portion of the Premises, any
of the Buildings in Phase IV or the Park, or does not take all reasonably
appropriate actions to prevent such persons over which Tenant or any of Tenant's
Representatives has control and/or for which Tenant or any of Tenant's
Representatives are legally responsible from causing the presence of Hazardous
Materials in, on, under, through or about any portion of the Premises, any of
the Buildings in Phase IV or the Park. At Tenant's written request, Landlord
shall make available for review by Tenant in Landlord's offices any
environmental reports, evaluations or information bearing on the environmental
condition of the Premises, any of the Buildings in Phase IV or the Park to the
extent same is in Landlord's possession at Landlord's offices and to the extent
not otherwise treated as confidential or otherwise protected under any
attorney-client privilege, attorney work-product privilege or similar laws.
29.6 SURVIVAL: Tenant's obligations and liabilities pursuant to the
provisions of this Section 29 shall survive the expiration or earlier
termination of this Lease. If it is determined by Landlord's environmental
consultants in concurrence with Tenant's environmental consultants (both
environmental consultants to act reasonably and in good faith) that the
condition of all or any portion of the Premises, the Building, the Lot and/or
the Park is not in compliance with the provisions of this Lease due to the acts
or omissions of Tenant or any of Tenant's Representatives with respect to
Hazardous Materials, including without limitation allany violation of applicable
Environmental Laws at the expiration or earlier termination of this Lease, then
at Landlord's sole option, Landlord may require Tenant to hold over possession
of the Premises until Tenant can surrender the Premises to Landlord in the
condition in which the Premises existed as of the Commencement Date and prior to
the appearance of such Hazardous Materials except for reasonable wear and tear,
including without limitation, the conduct or performance of any closures as
required by any Environmental Laws. [The burden of proof hereunder shall be
upon]
Language indicated as being shown by strike-out in the typeset document
is enclosed in brackets "[" and "]" in the electronic format.
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[Tenant.] For purposes hereof, the term "reasonable wear and tear" shall not
include any deterioration in the condition or diminution of the value of any
portion of the Premises, the Building, the Lot and/or the Park in any manner
whatsoever related to directly, or indirectly, Hazardous Materials. Any such
holdover by Tenant will be with Landlord's consent, will not be terminable by
Tenant in any event or circumstance and will otherwise be subject to the
provisions of Section 22 of this Lease.
29.7 DISCLOSURE: The land described herein contains residual hazardous
substances. Such condition renders the land and the owner, Tenant or other
possessor of the land subject to requirements, restrictions, provisions, and
liabilities contained in Chapter 6.5 and Chapter 6.8 of division 20 of the
Health and Safety Code, as same may be amended from time, and any successor
statutes thereof. This statement is not a declaration that a hazard to public
health, safety and welfare exists.
30. FINANCIAL STATEMENTS: Tenant and/or a Related Entity, as the case may be,
for the reliance of Landlord, any lender holding or anticipated to acquire a
lien upon the Premises, the Building or the Park or any portion thereof, or any
prospective purchaser of the Building or the Park or any portion thereof, within
ten (10) business days after Landlord's request therefor, but not more often
than once annually so long as Tenant or a Related Entity, as applicable is not
in default of this Lease, shall deliver to Landlord the then current audited
financial statements of Tenant and/or a Related Entity, as the case may be,
(including interim periods following the end of the last fiscal year for which
annual statements are available) which statements shall be prepared or compiled
by a certified public accountant and shall present fairly the financial
condition of Tenant and/or a Related Entity, as the case may be, at such dates
and the result of its operations and changes in its financial positions for the
periods ended on such dates. If an audited financial statement has not been
prepared, Tenant and/or a Related Entity, as the case may be, shall provide
Landlord with an unaudited financial statement and/or such other information,
the type and form of which are acceptable to Landlord in Landlord's reasonable
discretion, which reflects the financial condition of Tenant and/or a Related
Entity, as the case may be. If Landlord so requests, Tenant or a Related Entity,
as applicable, shall deliver to Landlord an opinion of a certified public
accountant, including a balance sheet and profit and loss statement for the most
recent prior year, all prepared in accordance with generally accepted accounting
principles consistently applied. Any and all options granted to Tenant hereunder
shall be subject to and conditioned upon Landlord's reasonable approval of
Tenant's financial or a Related Entity's (as applicable) condition at the time
of Tenant's exercise of any such option.
31. GENERAL PROVISIONS:
31.1 TIME. Time is of the essence in this Lease and with respect to each
and all of its provisions in which performance is a factor.
31.2 SUCCESSORS AND ASSIGNS. The covenants and conditions herein
contained, subject to the provisions as to assignment, apply to and bind the
heirs, successors, executors, administrators and assigns of the parties hereto.
31.3 RECORDATION. Tenant shall not record this Lease or a short form
memorandum hereof without the prior written consent of the Landlord.
31.4 LANDLORD'S PERSONAL LIABILITY. The liability of Landlord (which,
for purposes of this Lease, shall include Landlord and the owner of the Building
if other than Landlord) to Tenant for any default by Landlord under the terms of
this Lease shall be limited to the actual interest of Landlord and its present
or future partners in the Premises or the Building and Tenant agrees to look
solely to the Premises for satisfaction of any liability and shall not look to
other assets of Landlord nor seek any recourse against the assets of the
individual partners, directors, officers, shareholders, agents or employees of
Landlord; it being intended that Landlord and the individual partners,
directors, officers, shareholders, agents or employees of Landlord shall not be
personally liable in any manner whatsoever for any judgment or deficiency. The
liability of Landlord under this Lease is limited to its actual period of
ownership of title to the Building, and Landlord shall be automatically released
from further performance under this Lease and from all further liabilities and
expenses hereunder upon transfer of Landlord's interest in the Premises or the
Building.
31.5 SEPARABILITY. Any provisions of this Lease which shall prove to be
invalid, void or illegal shall in no way affect, impair or invalidate any other
provisions hereof and such other provision shall remain in full force and
effect.
31.6 CHOICE OF LAW. This Lease shall be governed by and construed in
accordance with the laws of the State of California.
31.7 ATTORNEYS' FEES. In the event any dispute between the parties
result in litigation or other proceeding, the prevailing party shall be
reimbursed by the party not prevailing for all reasonable costs and expenses,
including, without limitation, reasonable attorneys' and experts' fees and costs
incurred by the prevailing party in connection with such litigation or other
proceeding and any appeal thereof.
Language indicated as being shown by strike-out in the typeset document
is enclosed in brackets "[" and "]" in the electronic format.
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Such costs, expenses and fees shall be included in and made a part of
the judgment recovered by the prevailing party, if any.
31.8 ENTIRE AGREEMENT. This Lease supersedes any prior agreements,
representations, negotiations or correspondence between the parties, and
contains the entire agreement of the parties on matters covered. No other
agreement, statement or promise made by any party that is not in writing and
signed by all parties to this Lease shall be binding.
31.9 WARRANTY OF AUTHORITY. On the date that Tenant executes this Lease,
Tenant shall deliver to Landlord an original certificate of status for Tenant
issued by the California Secretary of State or statement of partnership for
Tenant recorded in the county in which the Premises are located, as applicable,
and such other documents as Landlord may reasonably request with regard to the
lawful existence of Tenant. Each person executing this Lease on behalf of a
party represents and warrants that (1) such person is duly and validly
authorized to do so on behalf of the entity it purports to so bind, and (2) if
such party is a partnership, corporation or trustee, that such partnership,
corporation or trustee has full right and authority to enter into this Lease and
perform all of its obligations hereunder. In addition to any other remedies
available to Landlord under this Lease, if there is any breach of the foregoing
warranty, the person(s) executing this Lease on behalf of Tenant shall be
personally liable for all of Tenant's obligations under this Lease, including,
but not limited to, the payment by such person(s) to Landlord of any and all
losses, liabilities, costs, expenses and damages incurred by Landlord hereunder.
31.10 NOTICES. Any and all notices and demands required or permitted to
be given hereunder to Landlord shall be in writing and shall be sent: (a) by
United States mail, certified and postage prepaid; or (b) by personal delivery;
or (c) by overnight courier, addressed to Landlord at 101 Lincoln Centre Drive,
Fourth Floor, Foster City, California 94404-1167. Any and all notices and
demands required or permitted to be given hereunder to Tenant shall be in
writing and shall be sent: (i) by United States mail, certified and postage
prepaid; or (ii) by personal delivery to any employee or agent of Tenant over
the age of eighteen (18) years of age; or (iii) by overnight courier, all of
which shall be addressed to Tenant at the Premises; or (iv) by facsimile at the
facsimile number at the Premises, if any, as provided by Tenant on Page 1 of
this Lease or otherwise provided to Landlord. Notice and/or demand shall be
deemed given upon the earlier of actual receipt or the third day following
deposit in the United States mail. Notice and/or demand by facsimile shall be
complete upon transmission over the telephone line. Any notice or requirement of
service required by any statute or law now or hereafter in effect, including,
but not limited to, California Code of Civil Procedure Sections 1161, 1161.1,
and 1162, is hereby waived by Tenant.
31.11 JOINT AND SEVERAL. If Tenant consists of more than one person or
entity, the obligations of all such persons or entities shall be joint and
several.
31.12 COVENANTS AND CONDITIONS. Each provision to be performed by Tenant
hereunder shall be deemed to be both a covenant and a condition.
31.13 WAIVER OF JURY TRIAL. The parties hereto shall and they hereby do
waive trial by jury in any action, proceeding or counterclaim brought by either
of the parties hereto against the other on any matters whatsoever arising out of
or in any way related to this Lease, the relationship of Landlord and Tenant,
Tenant's use or occupancy of the Premises, the Building or the Park, and/or any
claim of injury, loss or damage.
31.14 COUNTERCLAIMS. In the event Landlord commences any proceedings for
nonpayment of Base Rent[, Additional Rent, or any other sums or amounts due
hereunder], Tenant shall not interpose any counterclaim of whatever nature or
description in any such proceedings, provided, however, nothing contained herein
shall be deemed or construed as a waiver of the Tenant's right to assert such
claims in any separate action brought by Tenant or the right to offset the
amount of any final judgment owed by Landlord to Tenant.
31.15 UNDERLINING. The use of underlining within the Lease is for
Landlord's reference purposes only and no other meaning or emphasis is intended
by this use, nor should any be inferred.
32. SIGNS: All signs and graphics of every kind visible in or from public view
or corridors or the exterior of the Premises shall be subject to Landlord's
prior written approval and shall be subject to any applicable governmental laws,
ordinances, and regulations and in compliance with Landlord's [S]sign
[C]criteria as same may exist from time to time [set forth in Exhibit G hereto
and made a part hereof]. Tenant shall remove all such signs and graphics prior
to the termination of this Lease. Such installations and removals shall be made
in a manner as to avoid damage or defacement of the Premises; and Tenant shall
repair any damage or defacement, including without limitation, discoloration
caused by such installation or removal. Landlord shall have the right, at its
option, to deduct from the Security Deposit such sums as are reasonably
necessary to remove such signs, including, but not limited to, the costs and
expenses associated with any repairs necessitated by such removal.
Notwithstanding the foregoing, in no event shall any: (a) neon, flashing or
moving sign(s) or (b) sign(s) which shall interfere with the visibility of any
sign, awning, canopy, advertising matter, or decoration of any kind of any other
business or occupant of the Building or the Park be permitted hereunder. Tenant
further agrees to maintain any
Language indicated as being shown by strike-out in the typeset document
is enclosed in brackets "[" and "]" in the electronic format.
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such sign, awning, canopy, advertising matter, lettering, decoration or other
thing as may be approved in good condition and repair at all times.
33. MORTGAGEE PROTECTION: Upon any breach or default on the part of Landlord,
Tenant will give written notice by registered or certified mail to any
beneficiary of a deed of trust or mortgagee of a mortgage covering the Premises
who has provided Tenant with notice of their interest together with an address
for receiving notice, and shall offer such beneficiary or mortgagee a reasonable
opportunity to cure the default (which, in no event shall be less than ninety
(90) days), including time to obtain possession of the Premises by power of sale
or a judicial foreclosure, if such should prove necessary to effect a cure. If
such breach or default cannot be cured within such time period, then such
additional time as may be necessary will be given to such beneficiary or
mortgagee to effect such cure so long as such beneficiary or mortgagee has
commenced the cure within the original time period and thereafter diligently
pursues such cure to completion, in which event this Lease shall not be
terminated while such cure is being diligently pursued. Tenant agrees that each
lender to whom this Lease has been assigned by Landlord is an express third
party beneficiary hereof. Tenant shall not make any prepayment of Rent more than
one (1) month in advance without the prior written consent of each such lender,
except if Tenant is required to make quarterly payments of Rent in advance
pursuant to the provisions of Section 8 above. Tenant waives the collection of
any deposit from such lender(s) or any purchaser at a foreclosure sale of such
lender(s)' deed of trust unless the lender(s) or such purchaser shall have
actually received and not refunded the deposit. Tenant agrees to make all
payments under this Lease to the lender with the most senior encumbrance upon
receiving a direction, in writing, to pay said amounts to such lender. Tenant
shall comply with such written direction to pay without determining whether an
event of default exists under such lender's loan to Landlord.
34. QUITCLAIM: Upon any termination of this Lease, Tenant shall, at Landlord's
request, execute, have acknowledged and deliver to Landlord a quitclaim deed of
Tenant's interest in and to the Premises. If Tenant fails to so deliver to
Landlord such a quitclaim deed, Tenant hereby agrees that Landlord shall have
the full authority and right to record such a quitclaim deed signed only by
Landlord and such quitclaim deed shall be deemed conclusive and binding upon
Tenant.
35. MODIFICATIONS FOR LENDER: If, in connection with obtaining financing for the
Premises or any portion thereof, Landlord's lender shall request reasonable
modification(s) to this Lease as a condition to such financing, Tenant shall not
unreasonably withhold, delay or defer its consent thereto, provided such
modifications do not materially adversely affect Tenant's rights hereunder or
the use, occupancy or quiet enjoyment of Tenant hereunder. If the foregoing
occurs Landlord will reimburse Tenant for any reasonable out-of-pocket costs and
expenses incurred by Tenant in connection with such modifications.
36. WARRANTIES OF TENANT: Tenant hereby warrants and represents to Landlord, for
the express benefit of Landlord, that Tenant has undertaken a complete and
independent evaluation of the risks inherent in the execution of this Lease and
the operation of the Premises for the use permitted hereby, and that, based upon
said independent evaluation, Tenant has elected to enter into this Lease and
hereby assumes all risks with respect thereto. Tenant hereby further warrants
and represents to Landlord, for the express benefit of Landlord, that in
entering into this Lease, Tenant has not relied upon any statement, fact,
promise or representation (whether express or implied, written or oral) not
specifically set forth herein in writing and that any statement, fact, promise
or representation (whether express or implied, written or oral) made at any time
to Tenant, which is not expressly incorporated herein in writing, is hereby
waived by Tenant.
37. COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT: Landlord and Tenant hereby
agree and acknowledge that the Premises, the Building and/or the Park may be
subject to the requirements of the Americans with Disabilities Act, a federal
law codified at 42 U.S.C. 12101 et seq, including, but not limited to Title III
thereof, all regulations and guidelines related thereto, together with any and
all laws, rules, regulations, ordinances, codes and statutes now or hereafter
enacted by local or state agencies having jurisdiction thereof, including all
requirements of Title 24 of the State of California, as the same may be in
effect on the date of this Lease and may be hereafter modified, amended or
supplemented (collectively, the "ADA"). Any Tenant Improvements to be
constructed hereunder shall be in compliance with the requirements of the ADA,
and all costs incurred for purposes of compliance therewith shall be a part of
and included in the costs of the Tenant Improvements. Tenant shall be solely
responsible for conducting its own independent investigation of this matter and
for ensuring that the design of all Tenant Improvements strictly comply with all
requirements of the ADA. Subject to reimbursement pursuant to Section 6 of the
Lease, if any barrier removal work or other work is required to the Building,
the Common Area or the Park under the ADA, then such work shall be the
responsibility of Landlord; provided, if such work is required under the ADA as
a result of Tenant's use of the Premises or any work or alteration made to the
Premises by or on behalf of Tenant, then such work shall be performed by
Landlord at the sole cost and expense of Tenant. Except as otherwise expressly
provided in this provision, Tenant shall be responsible at its sole cost and
expense for fully and faithfully complying with all applicable requirements of
the ADA, including without limitation, not discriminating against any
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disabled persons in the operation of Tenant's business in or about the Premises,
and offering or otherwise providing auxiliary aids and services as, and when,
required by the ADA, provided that Tenant shall not be responsible for any costs
attributable to compliance with the provisions of the ADA, as the ADA is in
effect as of the Lease Date, nor any costs attributable to compliance with the
ADA as a result of any activity or use by any other tenant in the Building so
long as such activity or use is not in any manner associated with Tenant's or
Tenant's Representatives' use of any portion of the Premises, the Building, the
Lot and/or the Park. Within ten (10) days after receipt, Landlord and Tenant
shall advise the other party in writing, and provide the other with copies of
(as applicable), any notices alleging violation of the ADA relating to any
portion of the Premises or the Building; any claims made or threatened in
writing regarding noncompliance with the ADA and relating to any portion of the
Premises or the Building; or any governmental or regulatory actions or
investigations instituted or threatened regarding noncompliance with the ADA and
relating to any portion of the Premises or the Building. Tenant shall and hereby
agrees to protect, defend (with counsel acceptable to Landlord) and hold
Landlord and Landlord's lender(s), partners, employees, representatives, legal
representatives, successors and assigns (collectively, the "Indemnitees")
harmless and indemnify the Indemnitees from and against all liabilities,
damages, claims, losses, penalties, judgments, charges and expenses (including
reasonable attorneys' fees, costs of court and expenses necessary in the
prosecution or defense of any litigation including the enforcement of this
provision) arising from or in any way related to, directly or indirectly,
Tenant's or Tenant's Representatives' violation or alleged violation of the ADA.
Tenant agrees that the obligations of Tenant herein shall survive the expiration
or earlier termination of this Lease.
38. BROKERAGE COMMISSION: Landlord and Tenant each represents and warrants for
the benefit of the other that it has had no dealings with any real estate
broker, agent or finder in connection with the Premises and/or the negotiation
of this Lease, except for the Broker(s) (as set forth on Page 1), and that it
knows of no other real estate broker, agent or finder who is or might be
entitled to a real estate brokerage commission or finder's fee in connection
with this Lease or otherwise based upon contacts between the claimant and
Tenant. Each party shall indemnify and hold harmless the other from and against
any and all liabilities or expenses arising out of claims made for a fee or
commission by any real estate broker, agent or finder in connection with the
Premises and this Lease other than Broker(s), if any, resulting from the actions
of the indemnifying party. Any real estate brokerage commission or finder's fee
payable to the Broker(s) in connection with this Lease shall only be payable and
applicable to the extent of the initial term of the Lease and to the extent of
the Premises as same exist as of the date on which Tenant executes this Lease.
Landlord and Tenant hereby acknowledge and agree that (a) the amount of the
brokerage commission payable to the Broker(s) for the Premises for the initial
term of this Lease shall be the amount of eighty three thousand four hundred
fifty-five and 53/100 dollars ($83,455.53 (the "Brokers Fee"), and (b) other
than the payment of the Brokers Fee, no other commissions, fees or other sums
are due, payable or owing by Landlord to the Broker(s) in connection with this
Lease. Landlord and Tenant hereby further agree that the Brokers Fee shall be
payable by the parties as follows: (i) Landlord shall initially pay the Brokers
Fee to the Broker(s) within thirty (30) days of at the time of execution of this
Lease by both Landlord and Tenant; (ii) Tenant shall completely reimburse
Landlord for the full amount of the Brokers Fee over the initial term of the
Lease in the following manner as described in subitem (iii); and (iii) the
Brokers Fee shall be amortized at the interest rate of twelve percent (12%) over
the initial term of this Lease and Tenant shall pay to Landlord such amortized
amount (including interest charges) on a monthly basis throughout the initial
term of this Lease as part of, and together with, the Base Rent payable by
Tenant under Section 3 above (the "Amortized Fees"). The amount of the Amortized
Fees shall be added to the amount of the monthly Base Rent otherwise payable by
Tenant under this Lease and as specified on Page 1 of this Lease. Unless
expressly agreed to in writing by Landlord and Broker(s), no real estate
brokerage commission or finder's fee shall be owed to, or otherwise payable to,
the Broker(s) for any renewals or other extensions of the initial term of this
Lease or for any additional space leased by Tenant other than the Premises as
same exist as of the date on which Tenant executes this Lease.
39. QUIET ENJOYMENT: Landlord covenants with Tenant, upon the paying of Rent and
observing and keeping the covenants, agreements and conditions of this Lease on
its part to be kept and during the periods that Tenant is not otherwise in
default of any of the terms or provisions of this Lease, and subject to the
rights of any of Landlord's lenders in accordance with the provisions of any
subordination agreement between Tenant and such lenders, (i) that Tenant shall
and may peaceably and quietly hold, occupy and enjoy the Premises and the Common
Areas during the term of this Lease, and (ii) neither Landlord, nor any
successor or assign of Landlord, shall disturb Tenant's occupancy or enjoyment
of the Premises and the Common Areas.
40. LANDLORD'S ABILITY TO PERFORM TENANT'S UNPERFORMED OBLIGATIONS:
Notwithstanding anything to the contrary contained in this Lease, if Tenant
shall fail to perform any of the terms, provisions, covenants or conditions to
be performed or complied with by Tenant pursuant to this Lease, and/or if the
failure of Tenant relates to a matter which in Landlord's judgment reasonably
exercised is of an emergency nature and such failure shall remain uncured for a
period of time commensurate with such emergency, then Landlord may, after
reasonable notice to Tenant at Landlord's option without any obligation to do
so, and in its sole discretion as to the necessity therefor, perform any such
term, provision, covenant, or condition, or make any such payment and Landlord
by reason of so doing shall
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not be liable or responsible for any loss or damage thereby sustained by Tenant
or anyone holding under or through Tenant. If Landlord so performs any of
Tenant's obligations hereunder, the full amount of the cost and expense entailed
or the payment so made or the amount of the loss so sustained shall immediately
be owning by Tenant to Landlord, and Tenant shall promptly pay to Landlord upon
demand, as Additional Rent, (a) the full amount thereof with interest thereon
from the date of payment at the greater of (i) ten percent (10%) per annum, or
(ii) the highest rate permitted by applicable law; (b) the reasonable expenses
of Landlord attributable thereto.
41. TENANT EQUIPMENT FINANCING: Landlord hereby acknowledges that Tenant has
informed Landlord that Tenant intends to procure financing for equipment to be
used in Tenant's operations conducted within the Premises (the "Equipment
Financing"). Within fifteen (15) business days after Tenant's delivery to
Landlord of written notice of the prospective procurement of such Equipment
Financing, Landlord shall execute and deliver to Tenant that certain waiver by
Landlord, in the form of Exhibit H attached hereto and made a part hereof (the
"Waiver By Landlord"). Tenant shall not do any of the following in connection
with any such Equipment Financing: (i) record or permit the recordation of the
Waiver By Landlord in the official records in the county in which the Premises
are located; and/or (ii) file any UCC-1 financing statements with regard to such
equipment in which reference is made to any portion of the Premises, the
Building, the Lot or the Park which would have the effect of causing a lien to
be placed against any portion of the Premises, the Building, the Lot or the
Park. Tenant shall promptly deliver to Landlord a true and complete copy of the
Waiver By Landlord fully executed by Landlord, Tenant and any lender which
provides such Equipment Financing to Tenant.
IN WITNESS WHEREOF, this Lease is executed on the date and year first
written above.
TENANT:
Sequus Pharmaceuticals, Inc.,
a Delaware corporation
By: /s/ Donald Stewart
--------------------------
Its: V.P. Finance
-------------------------
Date: 2/29/96
------------------------
LANDLORD:
Lincoln Menlo IV & V Associates Limited,
a California limited partnership
By: Lincoln Property Company Management Services, Inc.,
As Manager and Agent for Landlord
By: /s/
---------------------------
Vice President
Date:
---------------------
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EXHIBIT A - PREMISES
PAGE 1 OF 1
LEASE DATED FEBRUARY 13, 1996, BY AND BETWEEN
SEQUUS PHARMACEUTICALS, INC.,
A DELAWARE CORPORATION
("TENANT"),
AND
LINCOLN MENLO IV & V ASSOCIATES LIMITED,
A CALIFORNIA LIMITED PARTNERSHIP
("LANDLORD")
LEASED PREMISES:
Approximately 45,600 square feet located at
1050-1098 Hamilton Court, Menlo Park, California
[GRAPHIC OF SITE PLAN]
INITIALS:
TENANT: /s/
-------------------------
LANDLORD: /s/
-------------------------
<PAGE> 30
EXHIBIT B TO LEASE AGREEMENT
TENANT IMPROVEMENTS
This exhibit, entitled "Tenant Improvements", is and shall constitute EXHIBIT B
to that certain Lease Agreement dated February 13, 1996 (the "Lease"), by and
between LINCOLN MENLO IV & V ASSOCIATES LIMITED, A CALIFORNIA LIMITED
PARTNERSHIP ("LANDLORD"), AND SEQUUS PHARMACEUTICALS, INC., A DELAWARE
CORPORATION ("TENANT"), for the leasing of certain premises located at 1050-1098
Hamilton Court, Menlo Park, California (the "Premises"). The terms, conditions
and provisions of this EXHIBIT B are hereby incorporated into and are made a
part of the Lease. Any capitalized terms used herein and not otherwise defined
herein shall have the meaning ascribed to such terms as set forth in the Lease:
1. TENANT TO CONSTRUCT TENANT IMPROVEMENTS. Subject to the provisions below,
Tenant shall be solely responsible for the planning, construction and completion
of the interior tenant improvements ("Tenant Improvements") to the Premises in
accordance with the terms and conditions of this Exhibit B. The Tenant
Improvements shall not include any of Tenant's personal property, trade
fixtures, furnishings, equipment or similar items.
2. TENANT IMPROVEMENT PLANS.
A. PRELIMINARY PLANS AND SPECIFICATIONS. Tenant shall retain a
licensed, insured architect ("Architect") to prepare preliminary working
architectural and engineering plans and specifications ("Preliminary Plans and
Specifications") for the Tenant Improvements. Tenant shall deliver the
Preliminary Plans and Specifications to Landlord. The Preliminary Plans and
Specifications shall be in sufficient detail to show locations, types and
requirements for all heat loads, people loads, floor loads, power and plumbing,
regular and special HVAC needs, telephone communications, telephone and
electrical outlets, lighting, lighting fixtures and related power, and
electrical and telephone switches. Landlord shall reasonably approve or
disapprove the Preliminary Plans and Specifications within five (5) days after
Landlord receives the Preliminary Plans and Specifications and, if disapproved,
Landlord shall return the Preliminary Plans and Specifications to Tenant, who
shall make all necessary revisions within ten (10) days after Tenant's receipt
thereof. This procedure shall be repeated until Landlord approves, in writing,
the Preliminary Plans and Specifications. The approved Preliminary Plans and
Specifications, as modified, shall be deemed the "Final Preliminary Plans and
Specifications".
B. FINAL PLANS AND SPECIFICATIONS. After the Final Preliminary Plans
and Specifications are approved by Landlord and are deemed to be the Final
Preliminary Plans and Specifications, Tenant shall cause the Architect to
prepare in twenty (20) days following Landlord's approval of the Final
Preliminary Plans and Specifications the final working architectural and
engineering plans, specifications and drawings, ("Final Plans and
Specifications") for the Tenant Improvements. Tenant shall then deliver the
Final Plans and Specifications to Landlord. Landlord shall reasonably approve or
disapprove the Final Plans and Specifications within five (5) days after
Landlord receives the Final Plans and Specifications and, if disapproved,
Landlord shall return the Final Plans and Specifications to Tenant who shall
make all necessary revisions within ten (10) days after Tenant's receipt
thereof. This procedure shall be repeated until Landlord approves, in writing,
the Final Plans and Specifications. The approved Final Plans and Specifications,
as modified, shall be deemed the "Construction Documents".
C. MISCELLANEOUS. All deliveries of the Preliminary Plans and
Specifications, the Final Preliminary Plans and Specifications, the Final Plans
and Specifications, and the Construction Documents shall be delivered by
messenger service, by personal hand delivery or by overnight parcel service.
While Landlord has the right to approve the Preliminary Plans and
Specifications, the Final Preliminary Plans and Specifications, the Final Plans
and Specifications, and the Construction Documents, Landlord's interest in doing
so is to protect the Premises, the Building and Landlord's interest.
Accordingly, Tenant shall not rely upon Landlord's approvals and Landlord shall
not be the guarantor of, nor responsible for, the adequacy and correctness or
accuracy of the Preliminary Plans and Specifications, the Final Preliminary
Plans and Specifications, the Final Plans and Specifications, and the
Construction Documents, or the compliance thereof with applicable laws, and
Landlord shall incur no liability of any kind by reason of granting such
approvals.
D. BUILDING STANDARD WORK. The Construction Documents shall provide
that the Tenant Improvements to be constructed in accordance therewith must be
at least equal, in quality, to Landlord's building standard materials,
quantities and procedures then in use by Landlord ("Building Standards")
attached hereto as Exhibit B-2, and shall consist of improvements which are
generic in nature.
3. PERMITS. Tenant at its sole cost and expense (subject to the provisions of
Paragraph 5 below) shall obtain all governmental approvals of the Construction
Documents to the full extent necessary for the issuance of a building permit for
the Tenant Improvements based upon such Construction Documents. Tenant at its
sole cost and expense shall also cause to be obtained all other necessary
approvals and permits from all governmental agencies having jurisdiction or
authority for the construction and installation of the Tenant Improvements in
accordance with the approved Construction Documents. Tenant at its sole cost and
expense (subject to the provisions of Paragraph 5 below) shall undertake all
steps necessary to insure that the construction of the Tenant Improvements is
accomplished in strict compliance
1
<PAGE> 31
with all statutes, laws, ordinances, codes, rules, and regulations applicable to
the construction of the Tenant Improvements and the requirements and standards
of any insurance underwriting board, inspection bureau or insurance carrier
insuring the Premises and/or the Building.
4. CONSTRUCTION.
A. Tenant shall be solely responsible for the construction,
installation and completion of the Tenant Improvements in accordance with the
Construction Documents approved by Landlord and is solely responsible for the
payment of all amounts when payable in connection therewith without any cost or
expense to Landlord, except for Landlord's obligation to contribute the Tenant
Improvement Allowance in accordance with the provisions of Paragraph 5 below.
Tenant shall diligently proceed with the construction, installation and
completion of the Tenant Improvements in accordance with the Construction
Documents and the completion schedule reasonably approved by Landlord. No
material changes shall be made to the Construction Documents and the completion
schedule approved by Landlord without Landlord's prior written consent, which
consent shall not be unreasonably withheld.
B. Tenant at its sole cost and expense (subject to the provisions of
Paragraph 5 below) shall employ a licensed, insured and bonded general
contractor ("Contractor") to construct the Tenant Improvements in accordance
with the Construction Documents. The construction contracts between Tenant and
the Contractor and between the Contractor and subcontractors shall be subject to
Landlord's prior written approval, which approval shall not be unreasonably
withheld. Proof that the Contractor is licensed in California, is bonded as
required under California law, and has the insurance specified in Exhibit B-1,
attached hereto and incorporated herein by this reference, shall be provided to
Landlord at the time that Tenant requests approval of the Contractor from
Landlord. Tenant shall comply with or cause the Contractor to comply with all
other terms and provisions of Exhibit B-1.
C. Prior to the commencement of the construction and installation of
the Tenant Improvements, Tenant shall provide the following to Landlord, all of
which shall be to Landlord's reasonable satisfaction:
(i) An estimated budget and cost breakdown for the Tenant
Improvements.
(ii) Estimated completion schedule for the Tenant
Improvements.
(iii) Copies of all required approvals and permits from
governmental agencies having jurisdiction or authority for the construction and
installation of the Tenant Improvements; provided, however, if prior to
commencement of the construction and installation of Tenant Improvements Tenant
has not received the electrical, plumbing or mechanical permits, Tenant shall
only be required to provide Landlord with evidence that Tenant has made
application therefor, and, upon receipt by Tenant of such permits, Tenant shall
promptly provide Landlord with copies thereof.
(iv) Evidence of Tenant's procurement of insurance required to
be obtained pursuant to the provisions of Paragraphs 4.B and 4.G herein and the
provisions of Section 12 of the Lease.
D. Landlord shall at all reasonable times have a right to inspect the
Tenant Improvements (provided Landlord does not materially interfere with the
work being performed by the Contractor or its subcontractors) and Tenant shall
immediately cease work upon written notice from Landlord if the Tenant
Improvements are not in compliance with the Construction Documents approved by
Landlord. If Landlord shall give notice of faulty construction or any other
deviation from the Construction Documents, Tenant shall cause the Contractor to
make corrections promptly. However, neither the privilege herein granted to
Landlord to make such inspections, nor the making of such inspections by
Landlord, shall operate as a waiver of any rights of Landlord to require good
and workmanlike construction and improvements constructed in accordance with the
Construction Documents.
E. Subject to Landlord complying with its obligations in Paragraph 5
below, Tenant shall pay and discharge promptly and fully all claims for labor
done and materials and services furnished in connection with the Tenant
Improvements. The Tenant Improvements shall not be commenced until five (5)
business days after Landlord has received notice from Tenant stating the date
the construction of the Tenant Improvements is to commence so that Landlord can
post and record any appropriate Notice of Nonresponsibility.
F. Tenant acknowledges and agrees that the agreements and covenants of
Tenant in Sections 10 and 37 of the Lease shall be fully applicable to Tenant's
construction of the Tenant Improvements.
G. Tenant shall maintain, and cause to be maintained, during the
construction of the Tenant Improvements, at its sole cost and expense, insurance
of the types and in the amounts specified in Exhibit B-1 and in Section 12 of
the Lease, together with builders' risk insurance for the amount of the
completed value of the Tenant Improvements on an all-risk non-reporting form
covering all improvements under construction, including building materials, and
other insurance in amounts and against such risks as the Landlord shall
reasonably require in connection with the Tenant Improvements.
2
<PAGE> 32
H. No materials, equipment or fixtures shall be delivered to or
installed upon the Premises pursuant to any agreement by which another party has
a security interest or rights to remove or repossess such items, without the
prior written consent of Landlord, which consent shall not be unreasonably
withheld.
I. Landlord reserves the right to establish reasonable rules and
regulations for the use of the Building during the course of construction of the
Tenant Improvements, including, but not limited to, construction parking,
storage of materials, hours of work, use of elevators, and clean-up of
construction related debris.
J. Upon completion of the Tenant Improvements, Tenant shall deliver to
Landlord the following, all of which shall be to Landlord's reasonable
satisfaction:
(i) Any certificates required for occupancy, including a
permanent and complete Certificate of Occupancy issued by the City of Menlo
Park.
(ii) A Certificate of Completion signed by the Architect who
prepared the Construction Documents, reasonably approved by Landlord.
(iii) A cost breakdown itemizing all expenses for the Tenant
Improvements, together with invoices and receipts for the same or other evidence
of payment.
(iv) Final and unconditional mechanic's lien waivers for all
the Tenant Improvements.
(v) A Notice of Completion for execution by Landlord, which
certificate once executed by Landlord shall be recorded by Tenant in the
official records of San Mateo and Tenant shall then deliver to Landlord a true
and correct copy of the recorded Notice of Completion.
(vi) Redline version of the Construction Documents.
(vii) A true and complete copy of all as-built plans and
drawings for the Tenant Improvements.
5. TENANT IMPROVEMENT ALLOWANCE.
A. Subject to Tenant's compliance with the provisions of this Exhibt B,
Landlord shall provide to Tenant an allowance in the amount of two hundred one
thousand nine hundred fifty-five and 00/100 dollars ($201,955.00) (the "Tenant
Improvement Allowance") to construct and install only the Tenant Improvements.
The Tenant Improvement Allowance shall be used to design, prepare, plan, obtain
the approval of, construct and install the Tenant Improvements and for no other
purpose. Except as otherwise expressly provided herein, Landlord shall have no
obligation to contribute the Tenant Improvement Allowance unless and until the
Construction Documents have been approved by Landlord and Tenant has complied
with all requirements set forth in Paragraph 4.C. of this Exhibit B. The costs
to be paid out of the Tenant Improvement Allowance shall include all reasonable
costs and expenses associated with the design, preparation, approval, planning,
construction and installation of the Tenant Improvements (the "Tenant
Improvement Costs"), including all of the following:
(i) All costs of the Preliminary Plans and Specifications, the
Final Plans and Specifications, and the Construction Documents, and engineering
costs associated with completion of the State of California energy utilization
calculations under Title 24 legislation:
(ii) All costs of obtaining building permits and other
necessary authorizations from local governmental authorities;
(iii) All costs of interior design and finish schedule plans
and specifications including as-built drawings, if applicable;
(iv) All direct and indirect costs of procuring, constructing
and installing the Tenant Improvements in the Premises, including, but not
limited to, the construction fee for overhead and profit and the cost of all
on-site supervisory and administrative staff, office, equipment and temporary
services rendered by the Contractor in connection with the construction of the
Tenant Improvements; provided, however, that the construction fee for overhead
and profit, the cost of all on-site supervisory and administrative staff,
office, equipment and temporary services shall not exceed amounts which are
reasonable and customary for such items in the local construction industry;
(v) All fees payable to the Architect and any engineer if they
are required to redesign any portion of the Tenant Improvements following
Tenant's and Landlord's approval of the Construction Documents;
(vi) Utility connection fees;
(vii) Inspection fees and filing fees payable to local
governmental authorities, if any;
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<PAGE> 33
(viii) All costs of all permanently affixed equipment and
non-trade fixtures provided for in the Construction Documents, including the
cost of installation; and,
(ix) A construction management fee payable to Landlord [in the
amount of three percent (3%) of the aggregate of the principal amount of the
Amortized Excess TI Costs (defined below) and the Tenant Improvement Allowance
(the "CM Fee").] based on an hourly fee of $100 per hour (the "CM Fee"). The CM
Fee will be billed on a time and materials basis.
The Tenant Improvement Allowance shall be the maximum contribution by Landlord
for the Tenant Improvement Costs. The Tenant Improvement Allowance will be
available through December 31, 1998, only, and the disbursement of the Tenant
Improvement Allowance is subject to the terms contained hereinbelow. Therefore,
written request for disbursement of the Tenant Improvement Allowance must occur
prior to December 31, 1998.
Except for payment of the CM Fee, Landlord will make payments to Tenant from the
Tenant Improvement Allowance to reimburse Tenant for Tenant Improvement Costs
paid or incurred by Tenant. Payment of the CM Fee shall be the first payment
from the Tenant Improvement Allowance and shall be made by means of a deduction
or credit against the Tenant Improvement Allowance. All other payments of the
Tenant Improvement Allowance shall be by progress payments not more frequently
than once per month and only after satisfaction of the following conditions
precedent: (a) receipt by Landlord of conditional mechanics' lien releases for
the work completed and to be paid by said progress payment, conditioned only on
the payment of the sums set forth in the mechanics' lien release, executed by
the Contractor and all subcontractors, labor suppliers and materialmen; (b)
receipt by Landlord of unconditional mechanics' lien releases from the
Contractor and all subcontractors, labor suppliers and materialmen for all work
other than that being paid by the current progress payment previously completed
by the Contractor, subcontractors, labor suppliers and materialmen and for which
Tenant has received funds from the Tenant Improvement Allowance to pay for such
work; (c) receipt by Landlord of any and all documentation reasonably required
by Landlord detailing the work that has been completed and the materials and
supplies used as of the date of Tenant's request for the progress payment,
including, without limitation, invoices, bills, or statements for the work
completed and the materials and supplies used; and (d) completion by Landlord or
Landlord's agents of any inspections of the work completed and materials and
supplies used as deemed reasonably necessary by Landlord. Except for the CM Fee
payment (credit), Tenant Improvement Allowance progress payments shall be paid
to Tenant within fourteen (14) days from the satisfaction of the conditions set
forth in the immediately preceding sentence. The preceding notwithstanding, all
Tenant Improvement Costs paid or incurred by Tenant prior to Landlord's approval
of the Construction Documents in connection with the design and planning of the
Tenant Improvements by Architect shall be paid from the Tenant Improvement
Allowance, without any retention, within fourteen (14) days following Landlord's
receipt of invoices, bills or statements from Architect evidencing such costs.
Notwithstanding the foregoing to the contrary, Landlord shall be entitled to
withhold and retain five percent (5%) of the Tenant Improvement Allowance or of
any Tenant Improvement Allowance progress payment until the lien-free expiration
of the time for filing of any mechanics' liens claimed or which might be filed
on account of any work ordered by Tenant or the Contractor or any subcontractor
in connection with the construction and installation of the Tenant Improvements.
B. Landlord shall not be obligated to pay any Tenant Improvement
Allowance progress payment or the Tenant Improvement Allowance retention if on
the date Tenant is entitled to receive the Tenant Improvement Allowance progress
payment or the Tenant Improvement Allowance retention Tenant is in default of
this Lease. Such payments shall resume upon Tenant curing any such default
within the time periods which may be provided for in the Lease.
C. Should the total cost of constructing the Tenant Improvements be
less than the Tenant Improvement Allowance, the Tenant Improvement Allowance
shall be automatically reduced to the amount equal to said actual cost.
D. The term "Excess Tenant Improvement Costs" as used herein shall mean
and refer to the aggregate of the amount by which the actual Tenant Improvement
Costs exceed the Tenant Improvement Allowance. A portion of the Excess Tenant
Improvement Costs up to a maximum amount of forty-five thousand six hundred
dollars ($45,600.00) shall be paid by Landlord in the same manner as the Tenant
Improvement Allowance and such Excess Tenant Improvement Costs will then be
amortized over the initial term of the Lease at the rate of twelve percent (12%)
per annum and such amortized amount (including interest charges) shall be paid
by Tenant to Landlord with, and as part of, the Base Rent for the Premises in
accordance with the provisions and requirements of Section 3 of the Lease (the
"Amortized Excess TI Costs"). Within two (2) weeks after the Tenant Improvements
have been substantially completed and the actual Tenant Improvement Costs are
known, the parties shall execute and deliver a written amendment to the Lease,
in the form acceptable to the parties, wherein there shall be specified, inter
alia, the amount of the Base Rent payable by Tenant during the initial term of
the Lease after taking into account the amount of the Amortized Excess TI Costs.
Tenant shall promptly pay any and all Excess Tenant Improvement Costs in excess
of the principal amount of the Amortized Excess TI Costs.
Language indicated as being shown by strike-out in the typeset document
is enclosed in brackets "[" and "]" in the electronic format.
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<PAGE> 34
6. Tenant's Covenant to Construct Additional Tenant Improvements.
A. Subject to the provisions above and concurrent with the planning and
construction of the Tenant Improvements, Tenant hereby covenants and agrees to
contribute its own funds (which funds to be used in addition to the Tenant
Improvement Allowance in Section 5 of this Exhibit B) for the planning,
construction and completion of interior tenant improvements to fully improve
the unimproved warehouse portion of the Premises (the "Additional Tenant
Improvements"). The Additional Tenant Improvements shall be made in strict
accordance with the terms and conditions of Sections 2, 3 & 4 of this Exhibit
B. The Additional Tenant Improvements shall not include any of Tenant's
personal property, trade fixtures, furnishings, equipment or similar items.
B. The Additional Tenant Improvements shall be constructed in
accordance with Landlord's Building Standards attached hereto as Exhibit B-2;
provided, however, all finishes shall match the finishes already installed
throughout the Premises. The Additional Tenant Improvements shall consist of
improvements which will convert the existing warehouse portion of the Premises
into office and/or lab improvements, including, without limitation, the
following improvements:
(i) duct work, terminal boxes, diffusers and accessories
required for the completion of the heating, ventilation and air conditioning
systems serving the Premises;
(ii) partitioning, doors, floor coverings, finishes, ceilings,
wall coverings, painting, millwork and similar items;
(iii) electrical wiring, lighting fixtures, outlets and
switches and other electrical work; and
(v) all fire and life safety control systems such as
sprinklers, halon, fire alarms, including piping, wiring and accessories.
7. Termination. If the Lease is terminated prior to the date on which the Tenant
Improvements are completed, for any reason due to the default of Tenant
hereunder, in addition to any other remedies available to Landlord under the
Lease, Tenant shall pay to Landlord as Additional Rent under the Lease, within
five (5) days of receipt of a statement therefor, any and all costs incurred by
Landlord and not reimbursed or otherwise paid by Tenant through the date of
termination in connection with the Tenant Improvements to the extent planned,
installed and/or constructed as of such date of termination, including, but not
limited to, any costs related to the removal of all or any portion of the Tenant
Improvements and restoration costs related thereto. Subject to the provisions of
Section 10.2 of the Lease, upon the expiration or earlier termination of the
Lease, Tenant shall not be required to remove the Tenant Improvements it being
the intention of the parties that the Tenant Improvements are to be considered
incorporated into the Building.
8. Lease Provisions; Conflict. The terms and provisions of the Lease, insofar as
they are applicable, in whole or in part, to this EXHIBIT B, are hereby
incorporated herein by reference, and specifically including all of the
provisions of Section 31 of the Lease. In the event of any conflict between the
terms of the Lease and this EXHIBIT B, the terms of this EXHIBIT B shall
prevail. Any amounts payable by Tenant to Landlord hereunder shall be deemed to
be Additional Rent under the Lease and, upon any default in the payment of same,
Landlord shall have all rights and remedies available to it as provided for in
the Lease.
INITIALS:
TENANT: /s/
--------
LANDLORD: /s/
--------
5
<PAGE> 35
EXHIBIT B-1
CONSTRUCTION INSURANCE REQUIREMENTS
Before commencing work, the contractor shall procure and maintain at its sole
cost and expense until completion and final acceptance of the work, at least the
following minimum levels of insurance.
A. Workers' Compensation in statutory amounts and Employers Liability
Insurance in the minimum amounts of $100,000 each accident for bodily
injury by accident and $100,000 each employee for bodily injury by disease
with a $500,000 policy limit, covering each and every worker used in
connection with the contract work.
B. Comprehensive General Liability Insurance on an occurrence basis
including, but not limited to, protection for Premises/Operations
Liability, Broad Form Contractual Liability, Owner's and Contractor's
Protective, and Products/Completed Operations Liability*, in the following
minimum limits of liability.
Bodily Injury, Property Damage, and
Personal Injury Liability $2,000,000/each occurrence
$3,000,000/aggregate
* Products/Completed Operations Liability Insurance is to be provided for
a period of at least one (1) year after completion of work.
Coverage should include protection for Explosion, Collapse and Underground
Damage.
C. Comprehensive Automobile Liability Insurance with the following minimum
limits of liability.
Bodily Injury and Property $1,000,000/each occurrence
Damage Liability $2,000,000/aggregate
This insurance will apply to all owned, non-owned or hired automobiles to
be used by the Contractor in the completion of the work.
D. Umbrella Liability Insurance in a minimum amount of five million dollars
($5,000,000), providing excess coverage on a following-form basis over the
Employer's Liability limit in Paragraph A and the liability coverages
outlined in Paragraphs B and C.
E. Equipment and Installation coverages in the broadest form available
covering Contractor's tools and equipment and material not accepted by
Tenant. Tenant will provide Builders Risk Insurance on all accepted and
installed materials.
All policies of insurance, duplicates thereof or certificates evidencing
coverage shall be delivered to Landlord prior to commencement of any work and
shall name Landlord, and its partners and lenders as additional insureds as
their interests may appear. All insurance policies shall (1) be issued by a
company or companies licensed to be business in the state of California, (2)
provide that no cancellation, non-renewal or material modification shall be
effective without thirty (30) days prior written notice provided to Landlord,
(3) provide no deductible greater than $15,000 per occurrence, (4) contain a
waiver to subrogation clause in favor of Landlord, and its partners and lenders,
and (5) comply with the requirements of Sections 12.2, 12.3 and 12.4 of the
Lease to the extent such requirements are applicable.
INITIALS:
TENANT: /s/
--------
LANDLORD: /s/
--------
<PAGE> 36
EXHIBIT B-2
BUILDING STANDARDS
OFFICE AREA
DEMISING PARTITION AND CORRIDOR WALLS:
A. 6" 20-gauge metal studs at 24" O.C. (or as required by code for span)
framed full height from finish floor to structure above
B. One (1) layer 5/8" drywall Type "X" both sides of wall, fire taped only
INTERIOR PARTITIONS:
A. 3 5/8" 25-gauge metal studs at 24" O.C. to bottom of T-bar ceiling grid
approximately 9' - 0' high
B. Top track to be pre-formed slotted aluminum taped in
C. One (1) layer 5/8" drywall both sides of wall, taped texture ready for
paint
D. 3 5/8" metal studs including all lateral bracing as required by code
PERIMETER DRYWALL (AT OFFICE AREAS):
A. One (1) layer 5/8" Type "X" drywall taped texture ready for paint
B. Provide alternate to texture concrete in lieu of furring walls
COLUMN FURRING:
A. Furring channel all sides
B. One (1) layer 5/8" drywall taped texture and ready for paint
C. Provide deductive alternate for texturing columns where there are no
pipes to furred out
ACOUSTICAL CEILINGS:
A. 2' x 4' standard white T-bar grid system as manufactured by Chicago
Metallic or equal
B. 2' x 4' x 5/8" white, fissured, non-directional acoustical tile to be
Cortega as manufactured by Armstrong or equal
PAINTING:
A. Sheetrock walls to receive two (2) coats of interior latex paint as
manufactured by Kelly Moore or equal. Some portions of second coat to
be single accent color.
B. Provide a deductive alternate for not painting warehouse walls
WINDOW COVERING:
A. 1" aluminum mini-blinds as manufactured by Levelor or equal, color to
be selected by Lincoln Property Company
B. Blinds to be sized to fit window module
VCT:
VCT to be 1/8" x 12" x 12" as manufactured by Armstrong - Excelon Series or
equal
LIGHT FIXTURES:
2' x 4' T-bar lay in 3-tube energy efficient fixture with cool white
fluorescent tubes with prismatic acrylic lens as manufactured by Lithonia
or equal
LIGHT SWITCHES:
A. Double switching as required by Title 24
B. Switch assembly to be Leviton, color - Ivory
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<PAGE> 37
ELECTRICAL OUTLET:
A. 110-v duplex outlet in demising or interior partitions only, as
manufactured by Leviton, color to be Ivory
B. Eight (8) outlets per circuit, spacing to meet code (2 per office)
C. Transformers to be a minimum of 20% or over required capacity
D. Contractors to inspect electric room and to include all necessary
metering costs
E. No aluminum wiring is acceptable
TELEPHONE OUTLET:
A. One (1) single outlet box in wall with pullwire from outlet box to area
above T-bar ceiling per office
B. Cover plate for phone outlets to be included
FIRE SPRINKLERS:
As required by fire codes
TOPSET BASE:
A. 4" rubber base as manufactured by Burke or equal, standard colors only
B. 4" rubber base at VCT areas
TOILET AREAS:
Wet walls to receive marlite up to 48". Floors to receive sheetvinyl and
cove base as required by code
CARPET:
Minimum 30 ounce, commercial grade, level loop, UM44-C. Type 1 Class 1.
100% continuous filament. 5-year wear guarantee. Glue down, no pad.
WOOD DOORS:
Shall be 3'-0" x 7'-0" x 1 3/4" (unless otherwise specified) solid core,
prefinished birch "Cal-Wood" B-3 or equal if approved by owner
DOOR FRAMES:
Shall be ACI or equal, 3 3/4" or 4 7/8" throat, aluminum, dark bronze
anodized, snap-on trim
HARDWARE:
Shall be "Schlage", a lever type "Levon" D series, dark bronze 613 finish,
2 3/4" backset. Closers (where required) shall be Duro X PA X SN-1
INSULATION:
By Title 24 insulation
PLUMBING:
A. Shall comply with all local codes and handicapped code requirements.
Fixtures shall be either "American Standard", "Koher" or "Norris". All
toilet accessories and grab bars shall be "Bobrick" or equal and
approved by owner
B. Plumbing bid shall include 5 gallon minimum, or insta hot with mixer
valve electric water heater
TOILET PARTITIONS:
Shall be as manufactured by Fiat, global or equal if approved by owner.
Color shall be chosen by tenant
2
<PAGE> 38
HVAC:
Five (5) year warranty provided on all HVAC compressor units. All
penetrations and sleeper supports to be hot mopped to LPC standard. Provide
alternate price for electric heat pumps at conditioned spaces. Provide time
overlay switch at compressors.
WAREHOUSE AREAS:
Floor - sealed concrete
Fire Extinguishers - 2A 10 BC surface mount by code x by S.F.
Lighting - 1x8 strip lighting single tube chain hung 25 ft.
Draft stops - by code UBC 198 Edition
Service electrical outlets - HVAC or heaters at tenant cost
(400 W metal halide lighting are acceptable in lieu of strip lighting at
warehouse minimum 15 F.C.)(1)
INITIALS:
TENANT: /s/
--------
LANDLORD: /s/
--------
3
<PAGE> 39
EXHIBIT C TO LEASE AGREEMENT
RULES & REGULATIONS
This exhibit, entitled "Rules & Regulations", is and shall constitute EXHIBIT C
to that certain Lease Agreement dated February 13, 1996 (the "Lease"), by and
between LINCOLN MENLO IV & V ASSOCIATES LIMITED, a California limited
partnership ("Landlord"), and Sequus Pharmaceuticals, Inc., a Delaware
corporation ("Tenant"), for the leasing of certain premises located at 1050-1098
Hamilton Court, Menlo Park, California 94025, (the "Premises"). The terms,
conditions and provisions of this EXHIBIT C are hereby incorporated into and are
made a part of the Lease. Any capitalized terms used herein and not otherwise
defined herein shall have the meaning ascribed to such terms as set forth in the
Lease:
1. No advertisement, picture or sign of any sort shall be displayed on or
outside the Premises or the Building without the prior written consent
of Landlord. Landlord shall have the right to remove any such
unapproved item without notice and at Tenant's expense.
2. Tenant shall not regularly park motor vehicles in designated parking
areas after the conclusion of normal daily business activity.
3. Tenant shall not use any method of heating or air conditioning other
than that supplied by Landlord without the prior written consent of
Landlord.
4. All window coverings installed by Tenant and visible from the outside
of the Building require the prior written approval of Landlord.
5. Tenant shall not use, keep or permit to be used or kept any foul or
noxious gas or substance or any flammable or combustible materials on
or around the Premises, the Building or the Park.
6. Tenant shall not alter any lock or install any new locks or bolts on
any door at the Premises without the prior consent of Landlord.
7. Tenant agrees not to make any duplicate keys without the prior consent
of Landlord.
8. Tenant shall park motor vehicles in those general parking areas as
designated by Landlord except for loading and unloading. During those
periods of loading and unloading, Tenant shall not unreasonably
interfere with traffic flow within the Park and loading and unloading
areas of other tenants.
9. Tenant shall not disturb, solicit or canvas any occupant of the
Building or Park and shall cooperate to prevent same.
10. No person shall go on the roof without Landlord's permission.
11. Business machines and mechanical equipment belonging to Tenant which
cause noise or vibration that may be transmitted to the structure of
the Building, to such a degree as to be objectionable to Landlord or
other Tenants, shall be placed and maintained by Tenant, at Tenant's
expense, on vibration eliminators or other devices sufficient to
eliminate noise or vibration.
12. All goods, including material used to store goods, delivered to the
Premises of Tenant shall be immediately moved into the Premises and
shall not be left in parking or receiving areas overnight.
13. Tractor trailers which must be unhooked or parked with dolly wheels
beyond the concrete loading areas must use steel plates or wood blocks
under the dolly wheels to prevent damage to the asphalt paving
surfaces. No parking or storing of such trailers will be permitted in
the auto parking areas of the Park or on streets adjacent thereto.
14. Forklifts which operate on asphalt paving areas shall not have solid
rubber tires and shall only use tires that do not damage the asphalt.
15. Tenant is responsible for the storage and removal of all trash and
refuse. All such trash and refuse shall be contained in suitable
receptacles stored behind screened enclosures at locations approved by
Landlord.
16. Tenant shall not store or permit the storage or placement of goods, or
merchandise or pallets or equipment of any sort in or around the
Premises, the Building, the Park or any of the Common Areas of the
foregoing. No displays or sales of merchandise shall be allowed in the
parking lots or other Common Areas.
17. Tenant shall not permit any animals (except for those animals required
for Tenant to conduct its research), including, but not limited to, any
household pets, to be brought or kept in or about the Premises, the
Building, the Park or any of the Common Areas of the foregoing.
18. Tenant shall not permit any motor vehicles to be washed on any portion
of the Premises or in the Common Areas of the Park, nor shall Tenant
permit mechanical work or maintenance of motor vehicles to be performed
on any portion of the Premises or in the Common Areas of the Park.
INITIALS:
TENANT: /s/
--------
LANDLORD: /s/
--------
<PAGE> 40
EXHIBIT F
FIRST AMENDMENT TO LEASE AGREEMENT
CHANGE OF COMMENCEMENT DATE
This First Amendment to Lease Agreement (the "Amendment") is made and entered
into as of ___________________, by and between ____________________________
("LANDLORD"), AND ________________________ ("TENANT"), with reference to the
following facts:
RECITALS
A. Landlord and Tenant have entered into that certain Lease Agreement dated
___________ (the "Lease"), for the leasing of certain premises located at
____________________________, California (the "Premises") as such Premises
are more fully described in the Lease.
B. Landlord and Tenant wish to amend the Commencement Date of the Lease.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Landlord and Tenant hereby agree as follows:
1. The Commencement Date of the Lease shall be ________________________.
2. The last day of the Term of the Lease (the "Expiration Date") shall
be ______________.
3. The dates on which the Base Rent will be adjusted are:
for the period _________ to ________ the monthly Base Rent shall be
$_____________;
for the period _________ to ________ the monthly Base Rent shall be
$_____________; and
for the period _________ to ________ the monthly Base Rent shall be
$_____________.
4. Effect of Amendment: Except as modified herein, the terms and
conditions of the Lease shall remain unmodified and continue in full
force and effect. In the event of any conflict between the terms and
conditions of the Lease and this Amendment, the terms and conditions
of this Amendment shall prevail.
5. Definitions: Unless otherwise defined in this Amendment, all terms
not defined in this Amendment shall have the meaning set forth in the
Lease.
6. Authority: Subject to the provisions of the Lease, this Amendment
shall be binding upon and inure to the benefit of the parties hereto,
their respective heirs, legal representatives, successors and
assigns. Each party hereto and the persons signing below warrant that
the person signing below on such party's behalf is authorized to do
so and to bind such party to the terms of this Amendment.
7. The terms and provisions of the Lease are hereby incorporated in this
Amendment.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date and
year first above written.
TENANT:
Sequus Pharmaceuticals, Inc.,
a Delaware corporation
By:
-----------------------------------
Its:
-----------------------------------
By:
-----------------------------------
Its:
-----------------------------------
Date:
-----------------------------------
LANDLORD:
LINCOLN MENLO IV & V ASSOCIATES LIMITED,
a California limited partnership
By: Lincoln Property Company Management Services, Inc.,
As Manager and Agent for Landlord
By:
-----------------------------------
Vice President
Date:
-----------------------------------
INITIALS:
TENANT: /s/
--------
LANDLORD: /s/
--------
<PAGE> 41
EXHIBIT D
WILLOW PARK
DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS
This Declaration of Covenants, Conditions and Restrictions (hereinafter
called "Declaration") is made this twenty-fifth day of August 1979, by LINCOLN
PROPERTY COMPANY NO. 1179, A CALIFORNIA LIMITED PARTNERSHIP (PHASE 6)
(hereinafter called "Lincoln Property Company").
RECITALS
1. Declarant is, or at the time of recording this Declaration will be, the
Owner in fee of all that certain real property which is situated in the City of
Menlo Park, County of San Mateo, State of California, described on the map
(hereinafter called "Map") entitled "Menlo Industrial Center, Menlo Park,
California" which Map is filed in the office of the Recorder of the County of
San Mateo, State of California, on October 1, 1979, in Book No. 99 of Maps, at
pages 81, 82 and 83.
2. As Owner of the real property described in Paragraph 1 of these
Recitals, Declarant has executed this Declaration for the purpose of imposing
upon all portions of said real property (other than Parcel E as shown on the
Map) a general plan of improvement for the benefit of said real property (other
than said Parcel E) and its present and future owners. Said real property (other
than Parcel E) is hereinafter called the "Property."
NOW, THEREFORE, Declarant hereby declares that the Property is now held,
and shall hereafter be held, developed, encumbered, hypothecated, transferred,
sold, leased, conveyed, improved, used and occupied subject to the covenants,
conditions, restrictions and limitations hereinafter set forth, all of which are
declared to be in furtherance of a plan for the development and operation of a
landscaped business and industrial park and are established for the purpose of
enhancing and protecting the value, attractiveness and desirability of the
Property and every part thereof. Each of the covenants, conditions, restrictions
and limitations set forth herein shall run with the land, and every part
thereof, and shall burden as well as inure to the benefit of and pass with each
and every portion of the Property hereinafter developed, encumbered,
hypothecated, transferred, sold, leased, conveyed, improved, used or occupied
and shall apply to and bind any and all parties having or acquiring any right,
title, license or interest in the Property or any part thereof.
ARTICLE I
DEFINITIONS
Unless the context otherwise specifies or requires, the terms defined in
this Article I shall, for all purposes of this Declaration, have the meanings
herein specified.
1.1 Building. "Building" shall mean the principal structure or structures
on any Site, including all garages, outside platforms, outbuildings, docks and
the like.
1.2 Declarant. "Declarant shall mean Lincoln Property Company, its
successors and assigns. Declarant's assigns shall be deemed to include any party
whom Declarant designates, by means of a notice recorded in the Official Records
of San Mateo County, as the party who, from and after the date such notice is
recorded, will perform Declarant's functions under this Declaration.
1.3 Deed of Trust. "Deed of Trust" shall mean, with respect to any portion
of the property, a duly recorded Deed of Trust, mortgage or other instrument
which created a lien on the portion of the Property is describes.
1.4 Improvements. "Improvements" shall mean and include without limitation
buildings, outbuildings, pedestrian and vehicle access facilities, parking
areas, loading areas, fences, walls, hedged mass plantings, landscaping, poles,
signs and any structures of any type or kind.
1.5 Owner. "Owner" shall mean any person, firm, corporation or other legal
entity (including Declarant) which owns fee title to a Site, as shown by the
Official Records of the County of San Mateo; provided, however, that the term
"Owner" shall not include a mortgage or beneficiary under a deed of trust
holding a security interest in a Site unless such mortgagee or beneficiary is in
actual physical possession of the Site.
1
<PAGE> 42
Whenever this Declaration creates or imposes an obligation with
respect to a Site, the Owner of the Site shall be responsible for the timely and
proper performance of the obligation, notwithstanding any delegation of such
responsibility by lease, contract, or otherwise to another party.
1.6 Property. "Property" shall mean that certain real property subject to
the covenants, conditions and restrictions set forth herein, namely, that real
property described on Exhibit A attached hereto and incorporated herein.
1.7 Site. "Site" shall mean a continuous area of land within the Property
which is owned of record by the same Owner, whether shown as one parcel on any
recorded map or as a combination of parcels or of portions thereof.
ARTICLE II
REGULATION OF USES
2.1 Permitted Uses. Unless otherwise specifically prohibited herein, or by
applicable law, any business/industrial use will be permissible if it does not
constitute a nuisance to adjacent Sites. Permitted uses will include, but not be
limited to, manufacturing, warehousing, distribution, cartage, processing,
storage, wholesaling, office, laboratory, professional and research and
development.
2.2 Nuisance. No noxious or offensive activity shall be carried on nor
shall anything be done on any Site which may be or become an annoyance or
nuisance to the Owners or occupants of other Sites, or which will be offensive
to the Owners or occupants of other Sites by reason of odor, fumes, discharge of
any chemical or industrial waste above or below ground, dust, dirt, fly-ash,
smoke, noise, glare or which will be hazardous by reason of danger of fire or
explosion or any other hazard.
2.3 Right of Entry. During reasonable hours and subject to reasonable
security requirements, Declarant or its authorized representative shall have the
right to enter upon and inspect any Building and/or Site and the Improvements
thereon for the purpose of ascertaining whether or not the provisions of this
Declaration have been or are being complied with and shall not be deemed guilty
of trespass by reason of such entry.
ARTICLE III
REGULATION OF IMPROVEMENTS
3.1 Minimum Setback Lines
(a) General. No Improvement and no part thereof shall be placed on
any Site closer to a property line than herein provided. The following
Improvements are specifically excluded from these setback provisions:
(1) Roof overhang, subject to the specific approval of
Declarant in writing.
(2) Steps and walks.
(3) Paving and associated curbing, except that vehicle parking
areas shall not be permitted within ten (10) feet of the street
property line or lines.
(4) Fences, except that no fence shall be placed within the
street setback area unless specific approval is given by Declarant
in writing.
(5) Landscaping.
(6) Planters, not to exceed three (3) feet in height.
(7) Railroad spur tracks, switches and bumpers, provided that
the location of such tracks, switches and bumpers is specifically
approved by Declarant in writing.
(8) Displays identifying the Owner, Lessee or occupant,
subject to the specific approval of Declarant in writing.
(b) Setback from interior property lines. No setback is established
from a rear or side interior property line. The interior lot lines for a
corner lot shall be considered to have a real property line.
2
<PAGE> 43
(c) Setback Street Property Lines. The setback line is established
as twenty (20) feet from property line on all streets on the property.
3.2 Completion of Construction. After commencement of construction of any
Improvement, the Owner shall diligently prosecute the work thereon to the end
that the Improvement shall not remain in a partly finished condition any longer
than reasonably necessary for the completion thereof.
3.3 No excavation shall be made except in connection with construction of
an Improvement, and upon completion thereof, exposed openings shall be
backfilled and disturbed ground shall be graded and leveled.
3.4 Landscaping.
(a) Every Site on which a Building shall have been placed shall be
landscaped according to plans approved as specified herein and maintained
thereafter in a sightly and well-kept condition.
(b) An Owner, Lessee or occupant shall landscape and maintain
unpaved areas between the property lines and the setback lines.
(c) An Owner, Lessee or occupant shall provide hose bibs and
maintenance facilities in the vicinity of the landscaped areas.
(d) Landscape as approved by Declarant shall be installed within
ninety (90) days of occupancy or completion of the Building, whichever
occurs first.
3.5 Site Maintenance. All Improvements on each Site including, without
limitation, all walks, driveways, fences, parking areas, landscaping and the
exterior of all structures on each Site, shall be maintained free of litter and
debris and in good condition, order and repair. Landscaping shall be kept in
thriving condition, weed-free and neatly trimmed. All undeveloped Sites shall be
kept clean, mowed and in a condition so as not to be a dust or weed problem.
3.6 Signs and Lighting. No signs or displays shall be created on any Site,
other than the following:
(a) Signs identifying the name, building and business of any person
or firm occupying a Site, the size, design and color of which has been
specifically approved by Declarant in writing; and
(b) Offering a Site for sale or lease if Declarant has specifically
approved said signs in writing.
All signs and displays shall be located below the roof line of the
building and shall comply with all applicable laws and ordinances.
Lighting shall be restricted to parking and security lights, fire
lighting and low-level sign illumination and floodlighting of buildings or
landscaping. All lighting shall be shielded and contained within property
lines.
3.7 Parking Areas. Adequate parking on a Site shall be provided to
accommodate all parking needs for employees, visitors and company vehicles.
There shall also be adequate areas provided for truck loading and unloading. The
intent of this provision is to eliminate the need for any on-street parking. If
parking or loading requirements increase as a result of a change in use or
number of employees, additional off-street parking shall be provided to satisfy
the intent of this section.
3.8 Building Regulations. Any building erected on a Site shall conform to
the following construction practices:
(a) Exterior walls of sheet or corrugated iron, steel, aluminum or
asbestos will be permitted only upon specific approval in writing by
Declarant.
(b) Exterior walls shall be painted or suitably treated in a manner
acceptable to Declarant.
ARTICLE IV
APPROVAL OF PLANS
4.1 No Improvement shall be erected, placed, altered, maintained or
permitted to remain on any land subject to these restrictions until plans and
specifications showing plot layout, including parking and all exterior
elevations, with materials and colors, have been submitted to and approved in
writing by
3
<PAGE> 44
Declarant. Said approval shall be in addition to any approvals and/or permits
required by the City of Menlo Park or any other legal entity having
jurisdiction. Such plans and specifications shall be submitted in writing over
the signature of the Owner of Lessee of the Site or his authorized agent.
4.2 Approval shall be based, among other things, on adequacy of Site
dimensions, adequacy of structural design, conformity and harmony of external
design with neighboring Improvements, effect of location and use of Improvements
on neighboring Sites; proper facing of main elevation with respect to nearby
streets; and conformity of the plans and specifications to the purpose and
general plan and intent of these restrictions. Declarant shall not arbitrarily
or unreasonably withhold its approval of such plans and specifications.
4.3 If Declarant fails either to approve or to disapprove such plans and
specifications within thirty (30) days after the same have been submitted to it,
it shall be conclusively presumed that Declarant has approved said plans and
specifications, subject, however, to the restrictions contained in ARTICLE III
hereof.
4.4 Notwithstanding anything to the contrary herein contained, after the
expiration of one year from the date of issuance of a building permit by
municipal or other governmental authority for any Improvement, said Improvement
shall, in favor of purchasers and encumbrancers in good faith and for value, be
deemed to be in compliance with all provisions of this ARTICLE IV, unless actual
notice of such non-compliance or non-completion executed by Declarant shall
appear of record in the office of the County Recorder of San Mateo County,
California, or unless legal proceedings shall have been instituted to enforce
compliance or completion.
4.5 Fee. An architectural review fee shall be paid to Declarant at the
time plans are submitted for approval based upon the following schedule:
(a) When the plans submitted are prepared by an architect licensed
to practice in the State of California, the architectural review fee shall
be $100.00.
(b) In all other cases, the architectural review fee shall be
$200.00.
ARTICLE V
DURATION AND MODIFICATION AND REPEAL
5.1 Term. This Declaration, every provision hereof and every covenant,
conditions and restriction contained herein shall continue in full force and
effect for a period of sixty (60) years from the date hereof.
5.2 Termination and Modification. This Declaration or any provisions
thereof or any covenant, condition or restriction contained herein may be
terminated, extended, modified or amended as to the whole of said property or
any portion thereof, with the written consent of the Owners of sixty-five
percent (65%) in area of the Property; provided that so long as Declarant owns
at least twenty percent (20%) in area of the Property, no such termination,
extension, modification or amendment shall be effective without Declarant's
written approval. No termination, extension, modification or amendment hereof
shall be effective until a written instrument embodying the same has been
executed and recorded in the Official Records of San Mateo County.
ARTICLE VI
ENFORCEMENT
6.1 Abatement and Suit. Violation or breach of any restriction herein
contained shall give to Declarant the right to enter upon the Property upon or
as to which said violation or breach exists and summarily to abate and remove at
the expense of the Owner, Lessee or occupant thereof any structure, thing or
condition that may be or exist thereon contrary to the intent and meaning of the
provisions hereof, or to prosecute a proceeding at law or in equity against the
person or persons who have violated or are attempting to violate any of these
restrictions to enjoin or prevent them from doing so, to cause said violation to
be remedied or to recover damages for said violation. In addition, every Owner
of a Site shall have the right, in the event of violation or breach of any
restriction herein contained, to prosecute a proceeding at law or in equity
against the person or persons who have violated or are attempting to violate any
of these restrictions to enjoin or to recover damages for said violation. All
remedies provided herein or at law or in equity shall be cumulative and not
exclusive.
4
<PAGE> 45
6.2 Deemed to Constitute a Nuisance. The result of every action or
omission whereby any restriction herein contained is violated in whole or in
part is hereby declared to be and to constitute a nuisance. Every remedy allowed
by law or equity against an Owner, either public or private, shall be applicable
against every such result and may be exercised by Declarant or by any Owner of
property subject hereto. Any costs or expenses paid or incurred by Declarant or
an Owner (collectively referred to as "Declarant" in this Section 6.2) in
abating such nuisance or prosecuting any such remedy (including all reasonable
attorneys' fees and costs of collection), together with interest thereon at the
rate of ten percent (10%) per annum, shall be a charge against the Site on which
the nuisance has occurred or is occurring, shall be a continuing lien thereon
until paid, and shall also be the personal obligation of the Owner of such Site
when such charges became due and who committed such breach or violation. In
addition to any other rights or remedies hereunder, Declarant may deliver to the
Owner of the Site on which the nuisance has occurred or is occurring and record
with the San Mateo County Recorder a certificate of notice of claim of lien. If
the violation recited in such lien claim has not been cured to Declarant's
satisfaction and any recited amounts so charged have not been paid within thirty
(30) days thereafter, Declarant or its authorized representative may foreclose
such lien by a sale conducted pursuant to Sections 2924, 2924b and 2924c of the
California Civil Code, as amended from time to time, or other statues applicable
to the exercise of powers of sales in mortgages or Deeds of Trust, or in any
other manner permitted by law. Declarant, through its authorized
representatives, may bid on and acquire any land subject to such lien at any
such foreclosure sale. If the violations recited in such lien claim are timely
cured and any recited amounts timely paid as provided above, Declarant shall
forthwith record an appropriate release of such lien at Declarant's sole
expense.
6.3 Attorneys' Fees. In any legal or equitable proceeding for the
enforcement or to restrain the violation of this Declaration or any provision
hereof, the losing party or parties shall pay the attorneys' fees of the
prevailing party or parties, in such amount as may be fixed by the court in such
proceedings.
6.4 Failure to Enforce Not a Waiver of Rights. The failure of Declarant or
any Owner to enforce any restriction herein contained shall in no event be
deemed to be a waiver of the right to do so thereafter nor of the right to
enforce any other restriction.
ARTICLE VII
MISCELLANEOUS PROVISIONS
7.1 Assignment of Declarant's Rights and Duties. Declarant may assign any
and all of its rights, powers, reservations and obligations hereunder to any
person, corporation or association. To be effective, any such assignments must
be accepted in writing by the assignee and the acceptance must be recorded in
the Official Records of San Mateo County. To the extent of the assignment, the
assignee shall have the same rights, obligations, duties and powers and be
subject to the same obligations and duties as given to and assumed by Declarant
herein. The term Declarant as used herein includes all such assignees and their
heirs, successors and assigns. Declarant may also resign as Declarant by
recording a written notice of resignation in the Official Records of San Mateo
County and mailing a copy thereof to each then Owner. The resignation shall be
effective on the date it is recorded and Declarant shall thereafter have no
further rights, powers, reservations, obligation or liabilities hereunder. If at
any time Declarant either resigns or ceases to exist without making an
assignment of its authority as Declarant, a successor Declarant may be appointed
in the same manner as this Declaration may be terminated, extended, modified or
amended under Section 2 of ARTICLE IV.
7.2 Constructive Notice and Acceptance. Every person or other entity who
now or hereafter owns or acquires any right, title or interest in or to any
portion of the Property is and shall be conclusively deemed to have consented
and agreed to every covenant, condition and restriction contained herein,
whether or not any reference to this Declaration is contained in the instrument
by which such person or entity acquired an interest in said property.
7.3 Waiver. Neither Declarant nor its successors or assigns shall be
liable to any Owner, Lessee, licensee or occupant of land subject to his
Declarant by reason of any mistake in judgment, negligence, nonfeasance, action
or inaction and/or for the enforcement or failure to enforce any provision of
this Declaration. Every Owner, Lessee, licensee or occupant of any of said
property by acquiring his interest therein agrees that he will not bring any
action or suit against Declarant to recover any damages or to seek equitable
relief because of any mistake in judgment, negligence, nonfeasance, action or
inaction and/or the enforcement or failure to enforce any provision of this
Declaration.
7.4 Mutuality, Reciprocity, Runs with Land. All covenants, conditions,
restrictions and agreements contained herein are made for the direct, mutual and
reciprocal benefit of each and every part and parcel of the property now or
hereafter made subject to this Declaration, shall create reciprocal rights and
obligations between the respective Owners of all parcels and privity of contract
and estate between all
5
<PAGE> 46
grantees of said parcels, their heirs, successors and assigns, and shall, as to
the Owner of each parcel, his heirs, successors and assigns, operate as
covenants running with the land for the benefit of all other parcels.
7.5 Rights of Beneficiaries. No breach of the restrictions and other
provisions contained herein shall defeat or render invalid the lien of any Deed
of Trust now or hereafter executed upon land subject to these restrictions;
provided, however, that if any portion of said property is sold under a
foreclosure of any mortgage or under the provisions of any deed of trust, any
purchaser at such sale and his successors and assigns shall hold any and all
property so purchased subject to all of the restrictions and other provisions of
this Declaration.
7.6 Paragraph Headings. Paragraph headings, where used herein, are
inserted for convenience only and are not intended to be a part of this
Declaration or in any way to define, limit or describe the scope and intent to
the particular paragraphs to which they refer.
7.7 Effect of Invalidation. If any provision of this Declaration is held
to be invalid by any court, the invalidity of such provision shall not affect
the validity of the remaining provisions hereof.
7.8 Existing Improvements. Improvements which are completely constructed
on the date this Declaration is recorded are deemed to satisfy all the
requirements hereof.
7.9 Estoppel Certificate. At the request of an Owner, Declarant shall
supply to such Owner or any actual or potential encumbrancer or purchaser of a
Site a written certificate stating that there are no violations hereof, or if
there are any such violations, the nature of such violations. Such certificate
shall be delivered within ten (10) working days after such request by an Owner.
INITIALS:
TENANT: /s/
--------
LANDLORD: /s/
--------
6
<PAGE> 47
EXHIBIT E
HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE - (EXAMPLE)
Your cooperation in this matter is appreciated. Initially, the information
provided by you in this Hazardous Materials Disclosure Certificate is necessary
for the Landlord (identified below) to evaluate and finalize a lease agreement
with you as tenant. After a lease agreement is signed by you and the Landlord
(the "Lease Agreement"), on an annual basis in accordance with the provisions of
Section 29 of the signed Lease Agreement, you are to provide an update to the
information initially provided by you in this certificate. The information
contained in the initial Hazardous Materials Disclosure Certificate and each
annual certificate provided by you thereafter will be maintained in
confidentiality by Landlord subject to release and disclosure as required by (i)
any lenders and owners and their respective environmental consultants, (ii) any
prospective purchaser(s) of all or any portion of the property on which the
Premises are located, (iii) Landlord to defend itself or its lenders, partners
or representatives against any claim or demand, and (iv) any laws, rules,
regulations, orders, decrees, or ordinances, including, without limitation,
court orders or subpoenas. Any and all capitalized terms used herein, which are
not otherwise defined herein, shall have the same meaning ascribed to such term
in the signed Lease Agreement. Any questions regarding this certificate should
be directed to, and when completed, the certificate should be delivered to:
Landlord: LINCOLN MENLO IV & V ASSOCIATED LIMITED,
a California limited partnership
c/o Lincoln Property Company Management Services, Inc.
101 Lincoln Centre Drive, Fourth Floor
Foster City, California 94404
Phone: (415) 571-2200
Name of (Prospective) Tenant:
Sequus Pharmaceuticals, Inc., a Delaware corporation
- -------------------------------------------------------------------------------
Mailing Address: 960 Hamilton Court, Menlo Park, California 94025
---------------------------------------------------------------
Contact Person, Title and Telephone Number(s):
---------------------------------
Contact Person for Hazardous Waste Materials Management and Manifests and
Telephone Number(s):
-----------------------------------------------------------
- -------------------------------------------------------------------------------
Address of (Prospective) Premises: 1050 - 1098 Hamilton Court,
---------------------------------------------
Menlo Park, California 94025
- -------------------------------------------------------------------------------
Length of (Prospective) initial Term: May 1, 1996 - April 30, 2003 (7 years)
----------------------------------------
1. GENERAL INFORMATION:
Describe the initial proposed operations to take place in, on, or about
the Premises, including, without limitation, principal products
processed, manufactured or assembled services and activities to be
provided or otherwise conducted. Existing tenants should describe any
proposed changes to on-going operations.
----------------------------------------------------------------------
----------------------------------------------------------------------
2. USE, STORAGE AND DISPOSAL OF HAZARDOUS MATERIALS
2.1 Will any Hazardous Materials be used, generated, stored or
disposed of in, on or about the Premises? Existing tenants
should describe any Hazardous Materials which continue to be
used, generated, stored or disposed of in, on or about the
Premises.
Wastes Yes / / No / /
Chemical Products Yes / / No / /
Other Yes / / No / /
If Yes is marked, please explain:
----------------------------
-------------------------------------------------------------
-------------------------------------------------------------
2.2 If Yes is marked in Section 2.1, attach a list of any
Hazardous Materials to be used, generated, stored or disposed
of in, on or about the Premises, including the applicable
hazard class and an estimate of the quantities of such
Hazardous Materials at any given
1
<PAGE> 48
time; estimated annual throughput; the proposed location(s)
and method of storage (excluding nominal amounts of ordinary
household cleaners and janitorial supplies which are not
regulated by any Environmental Laws); and the proposed
location(s) and method of disposal for each Hazardous
Material, including, the estimated frequency, and the proposed
contractors or subcontractors. Existing tenants should attach
a list setting forth the information requested above and such
list should include actual data from on-going operations and
the identification of any variations in such information from
the prior year's certificate.
3. STORAGE TANKS AND SUMPS
3.1 Is any above or below ground storage of gasoline, diesel,
petroleum, or other Hazardous Materials in tanks or sumps
proposed in, on or about the Premises? Existing tenants should
describe any such actual or proposed activities.
Yes / / No / /
If Yes is marked, please explain:
----------------------------
-------------------------------------------------------------
-------------------------------------------------------------
4. WASTE MANAGEMENT
4.1 Has your company been issued an EPA Hazardous Waste Generator
I.D. Number? Existing tenants should describe any additional
identification numbers issued since the previous certificate.
Yes / / No / /
4.2 Has your company filed a biennial or quarterly reports as a
hazardous waste generator? Existing tenants should describe
any new reports filed.
Yes / / No / /
If yes, attach a copy of the most recent report filed.
5. WASTEWATER TREATMENT AND DISCHARGE
5.1 Will your company discharge wastewater or other wastes to:
storm drain? sewer?
---- ----
surface water? no wastewater or other wastes
---- ---- discharged.
Existing tenants should indicate any actual discharges. If so,
describe the nature of any proposed or actual discharge(s).
-------------------------------------------------------------
-------------------------------------------------------------
5.2 Will any such wastewater or waste be treated before discharge?
Yes / / No / /
If yes, describe the type of treatment proposed to be
conducted. Existing tenants should describe the actual
treatment conducted.
-------------------------------------------------------------
-------------------------------------------------------------
6. AIR DISCHARGES
6.1 Do you plan for any air filtration systems or stacks to be
used in your company's operations in, on or about the Premises
that will discharge into the air; and will such air emissions
be monitored? Existing tenants should indicate whether or not
there are any such air filtration systems or stacks in use in,
on or about the Premises which discharge into the air and
whether such air emissions are being monitored.
Yes / / No / /
If yes, please describe:
-------------------------------------
-------------------------------------------------------------
-------------------------------------------------------------
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<PAGE> 49
6.2 Do you propose to operate any of the following types of
equipment, or any other equipment requiring an air emissions
permit? Existing tenants should specify any such equipment
being operated in, on or about the Premises.
Spray booth(s) Incinerator(s)
---- ----
Dip tank(s) Other (Please describe)
---- ----
Drying oven(s) No Equipment Requiring Air Permits
---- ----
If yes, please describe:
-------------------------------------
-------------------------------------------------------------
-------------------------------------------------------------
7. HAZARDOUS MATERIALS DISCLOSURES
7.1 Has your company prepared or will it be required to prepare a
Hazardous Materials management plan ("Management Plan")
pursuant to Fire Department or other governmental or
regulatory agencies' requirements? Existing tenants should
indicate whether or not a Management Plan is required and has
been prepared.
Yes / / No / /
If yes, attach a copy of the Management Plan. Existing tenants
should attach a copy of any required updates to the Management
Plan.
7.2 Are any of the Hazardous Materials, and in particular
chemicals, proposed to be used in your operations in, on or
about the Premises regulated under Proposition 65? Existing
tenants should indicate whether or not there are any new
Hazardous Materials being so used which are regulated under
Proposition 65.
Yes / / No / /
If yes, please explain:
--------------------------------------
-------------------------------------------------------------
-------------------------------------------------------------
8. ENFORCEMENT ACTIONS AND COMPLAINTS
8.1 With respect to Hazardous Materials or Environmental Laws, has
your company ever been subject to any agency enforcement
actions, administrative orders, or consent decrees or has your
company received requests for information, notice or demand
letters, or any other inquiries regarding its operations?
Existing tenants should indicate whether or not any such
actions, orders or decrees have been, or are in the process of
being, undertaken or if any such requests have been received.
Yes / / No / /
If yes, describe the actions, orders or decrees and any
continuing compliance obligations imposed as a result of these
actions, orders or decrees and also describe any requests,
notices or demands, and attach a copy of all such documents.
Existing tenants should describe and attach a copy of any new
actions, orders, decrees, requests, notices or demands not
already delivered to Landlord pursuant to the provisions of
Section 29 of the signed Lease Agreement.
-------------------------------------------------------------
-------------------------------------------------------------
-------------------------------------------------------------
8.2 Have there ever been, or are there now pending, any lawsuits
against your company regarding any environmental or health and
safety concerns?
Yes / / No / /
If yes, describe any such lawsuits and attach copies of the
complaint(s), cross-complaint(s), pleadings and all other
documents related thereto as requested by Landlord. Existing
tenants should describe and attach a copy of any new
complaint(s), cross-complaint(s), pleadings and other related
documents not already delivered to Landlord pursuant to the
provisions of Section 29 of the signed Lease Agreement.
-------------------------------------------------------------
-------------------------------------------------------------
-------------------------------------------------------------
3
<PAGE> 50
8.3 Have there been any problems or complaints from adjacent
tenants, owners or other neighbors at your company's current
facility with regard to environmental or health and safety
concerns? Existing tenants should indicate whether or not
there have been any such problems or complaints from adjacent
tenants, owners or other neighbors at, about or near the
Premises.
Yes / / No / /
If yes, please describe. Existing tenants should describe any
such problems or complaints not already disclosed to Landlord
under the provisions of the signed Lease Agreement.
-------------------------------------------------------------
-------------------------------------------------------------
9. PERMITS AND LICENSES
9.1 Attach copies of all Hazardous Materials permits and licenses
including a Transporter Permit number issued to your company
with respect to its proposed operations in, on or about the
Premises, including, without limitation, any wastewater
discharge permits, air emissions permits, and use permits or
approvals. Existing tenants should attach copies of any new
permits and licenses as well as any renewals of permits or
licenses previously issued.
The undersigned hereby acknowledges and agrees that (A) this Hazardous Materials
Disclosure Certificate is being delivered in connection with, and as required
by, Landlord in connection with the evaluation and finalization of a Lease
Agreement and will be attached thereto as an exhibit; (B) that this Hazardous
Materials Disclosure Certificate is being delivered in accordance with, and as
required by, the provisions of Section 29 of the Lease Agreement; and (C) that
Tenant shall have and retain full and complete responsibility and liability with
respect to any of the Hazardous Materials disclosed in the HazMat Certificate
notwithstanding Landlord's/Tenant's receipt and/or approval of such certificate.
Tenant further agrees that none of the following described acts or events shall
be construed or otherwise interpreted as either (a) excusing, diminishing or
otherwise limiting Tenant from the requirement to fully and faithfully perform
its obligations under the Lease with respect to Hazardous Materials, including,
without limitation, Tenant's indemnification of the Indemnitees and compliance
with all Environmental Laws, or (b) imposing upon Landlord, directly or
indirectly, any duty or liability with respect to any such Hazardous Materials,
including, without limitation, any duty on Landlord to investigate or otherwise
verify the accuracy of the representations and statements made therein or to
ensure that Tenant is in compliance with all Environmental Laws; (i) the
delivery of such certificate to Landlord and/or Landlord's acceptance of such
certificate, (ii) Landlord's review and approval of such certificate, (iii)
Landlord's failure to obtain such certificate from Tenant at any time, or (iv)
Landlord's actual or constructive knowledge of the types and quantities of
Hazardous Materials being used, stored, generated, disposed of or transported on
or about the Premises by Tenant or Tenant's Representatives. Notwithstanding the
foregoing or anything to the contrary contained herein, the undersigned
acknowledges and agrees that Landlord and its partners, lenders and
representatives may, and will, rely upon the statements, representations,
warranties, and certifications made herein and the truthfulness thereof in
entering into the Lease Agreement and the continuance thereof throughout the
term, and any renewals thereof, of the Lease Agreement.
I (print name)_________________ , acting with full authority to bind the
(proposed) Tenant and on behalf of the (proposed) Tenant, certify, represent and
warrant that the information contained in this certificate is true and correct.
(PROSPECTIVE) TENANT:
By:
--------------------
Title:
--------------------
Date:
--------------------
INITIALS:
TENANT: /s/
--------
LANDLORD: /s/
--------
4
<PAGE> 51
ADDENDUM 1
AMORTIZED BROKERS FEE
This Addendum 1 is incorporated as part of that certain Lease Agreement dated
February 13, 1996 (the "Lease"), by and between Sequus Pharmaceuticals, Inc., a
Delaware corporation ("Tenant"), and LINCOLN MENLO IV & V ASSOCIATES LIMITED, a
California limited partnership ("Landlord"), for the leasing of those certain
premises located at 1050-1098 Hamilton Court, Menlo Park, California as more
particularly described in Exhibit A to the Lease (the "Premises"). Any
capitalized terms used herein and not otherwise defined herein shall have the
meaning ascribed to such terms as set forth in the Lease.
The monthly Base Rent payable by Tenant set forth on Page 1 of this Lease shall
be increased according to the following schedule in accordance with the
provisions of Section 38 of this Lease:
<TABLE>
<CAPTION>
MONTHLY AMORTIZED TOTAL MONTHLY
PERIOD BASE RENT BROKERS FEE BASE RENT
------ --------- ----------- ----------
<S> <C> <C> <C>
May 1, 1996 thru April 30, 1997 $45,600.00 + $1,473.22 = $47,073.22
May 1, 1997 thru April 20, 2000 $47,888.00 + $1,473.22 = $49,361.22
May 1, 2000 thru April 30, 2003 $50,160.00 + $1,473.22 = $51,633.22
</TABLE>
The total monthly Base Rent set forth above is subject to an additional increase
in accordance with the provisions of Exhibit B of this Lease.
INITIALS:
TENANT: /s/
--------
LANDLORD: /s/
--------
<PAGE> 52
ADDENDUM 2
OPTIONS TO EXTEND THE LEASE TERM
PAGE 1 TO 2
This Addendum 2 is incorporated as part of that certain Lease Agreement dated
February 13, 1996 (the "Lease"), by and between Sequus Pharmaceuticals, Inc., a
Delaware corporation ("Tenant"), and LINCOLN MENLO IV & V ASSOCIATES LIMITED, a
California limited partnership ("Landlord"), for the leasing of those certain
premises located at 1050-1098 Hamilton Court, Menlo Park, California as more
particularly described in Exhibit A to the Lease (the "Premises"). Any
capitalized terms used herein and not otherwise defined herein shall have the
meaning ascribed to such terms as set forth in the Lease.
So long as Tenant is not in default in the performance of any of its obligations
under this Lease at the time of Tenant's exercise of the then applicable option
to extend the then applicable term of this Lease, Tenant shall have the right at
its option to extend the term of the Lease for two (2) successive five (5) year
periods (individually, the "First Extended Term" and the "Second Extended Term",
respectively, and collectively, the "Extended Terms"). The Lease of the Premises
during the Extended Terms shall be upon the same terms, covenants and conditions
as are set forth in this Lease, other than the monthly Base Rent and the term of
the Lease. If Landlord does not receive from Tenant written notice of Tenant's
exercise of this option on a date which is not more than three hundred sixty
(360) days nor less than two hundred forty (240) days prior to the end of the
initial term of the Lease or the end of the First Extended Term of this Lease,
as the case may be (an "Option Notice"), all rights under this option shall
automatically lapse and terminate and shall be of no further force and effect.
Time is of the essence herein. Additionally, if Tenant fails to timely or duly
exercise this option for the First Extended Term, all rights of Tenant under
this option to extend into the First Extended Term and the Second Extended Term
shall automatically lapse, terminate and shall be of no further force and
effect, and Tenant shall have no further rights to extend the term of this
Lease.
The monthly Base Rent for each of the First Extended Term and the Second
Extended Term shall be the then current market rent for the highest and best use
for similar space within the competitive market area of the Premises (the "Fair
Rental Value") agreed upon by and between Landlord and Tenant and their agents
appointed for this purpose. The "Fair Rental Value" of the Premises shall be
defined to mean the current market rental value of the Premises as of the
commencement of the First Extended Term or the Second Extended Term, as
applicable, taking into consideration all relevant factors, including length of
term, the uses permitted under the Lease, the quality, size, design and location
of the Premises, including the condition and value of existing tenant
improvements, and the monthly base rent paid by tenants for premises comparable
to the Premises, and located in Menlo Park, California.
If Landlord and Tenant are unable to agree on the Fair Rental Value for either
the First Extended Term or the Second Extended Term, as the case may be, within
ten (10) days of receipt by Landlord of the Option Notice for the then
applicable Extended Term, Landlord and Tenant each, at its cost and by giving
notice to the other party, shall appoint a competent and disinterested
commercial real estate broker (hereinafter "broker") with at least five (5)
years' full-time commercial real estate brokerage experience in the geographical
area of the Premises to set the Fair Rental Value for the First Extended Term or
the Second Extended Term, as the case may be. If either Landlord or Tenant does
not appoint a broker within ten (10) days after the other party has given notice
of the name of its broker, the single broker appointed shall be the sole broker
and shall set the Fair Rental Value for the First Extended Term or the Second
Extended Term, as the case may be. If two (2) brokers are appointed by Landlord
and Tenant as stated in this paragraph, they shall meet promptly and attempt to
set the Fair Rental Value. If the two (2) brokers are unable to agree within ten
(10) days after the second broker has been appointed, they shall attempt to
select a third broker, meeting the qualifications stated in this paragraph
within ten (10) days after the last day the two (2) brokers are given to set the
Fair Rental Value. If they are unable to agree on the third broker, either
Landlord or Tenant by giving ten (10) days' notice to the other party, can apply
to the Presiding Judge of the Superior Court of the county in which the Premises
is located for the selection of a third broker who meets the qualifications
stated in this paragraph. Landlord and Tenant each shall bear one-half (-1/2) of
the cost of appointing the third broker and of paying the third broker's fee.
The third broker, however selected, shall be a person who has not previously
acted in any capacity for either Landlord or Tenant. Within fifteen (15) days
after the selection of the third broker, the third broker shall select one of
the two Fair Rental Values submitted by the first two brokers as the Fair Rental
Value for the First Extended Term or the Second Extended Term, as the case may
be. If either of the first two brokers fails to submit their opinion of the Fair
Rental Value, then the single Fair Rental Value submitted shall automatically be
the monthly Base Rent for the First Extended Term or the Second Extended Term,
as applicable.
Notwithstanding any provision to the contrary herein, in no event shall the
monthly Base Rent for the First Extended Term as determined pursuant to this
Addendum 2, be less than the highest monthly Base Rent charged during the
initial term of the Lease. Notwithstanding any provision to the contrary herein,
in no event shall the monthly Base Rent for the Second Extended Term as
determined pursuant to this Addendum 2, be less than the highest monthly Base
Rent charged during the First Extended Term of the
<PAGE> 53
ADDENDUM 2
OPTIONS TO EXTEND THE LEASE TERM
PAGE 2 TO 2
Lease. Upon determination of the monthly Base Rent for the First Extended Term
and the Second Extended Term, as applicable, pursuant to the terms outlined
above, Landlord and Tenant shall immediately execute an amendment to the Lease
stating the monthly Base Rent for the First Extended Term or the Second Extended
Term, as applicable, and confirming the expiration date of the First Extended
Term or the Second Extended Term, as the case may be. Tenant shall have no other
right to further extend the term of the Lease under this Addendum 2 unless
Landlord and Tenant otherwise agree in writing.
If Tenant duly exercises this option, in accordance with the terms contained
herein: (1) Tenant shall accept the Premises in its then "As-Is" condition and,
accordingly, Landlord shall not be required to perform any additional
improvements to the Premises; and (2) Tenant hereby agrees that it will solely
be responsible for any and all brokerage commissions and finder's fees payable
to any broker now or hereafter procured or otherwise hired by Tenant ("Tenant's
Broker") in connection with the option described herein, and Tenant hereby
further agrees that Landlord shall in no event or circumstance be responsible
for the payment of any such commissions and fees to Tenant's Broker.
This option is personal to Tenant and may not be assigned, voluntarily or
involuntarily, separate from or as part of the Lease except to any Related
Entity of Tenant. At Landlord's option, all rights of Tenant under this option
shall terminate and be of no force and effect if any of the following individual
events occur or any combination thereof occur: (i) Tenant or the Related Entity,
as the case may be, is in default in the performance of any of its obligations
under this Lease at the time of Tenant's or the Related Entity's, as the case
may be, exercise of the then applicable option to extend the then applicable
term of this Lease; and/or (ii) Tenant has assigned its rights and obligations
under all or part of the Lease to any party other than a Related Entity, or
Tenant has subleased all or part of the Premises to a party other than a Related
Entity; and/or (iii) Tenant's or the Related Entity's, as the case may be,
financial condition is unacceptable to Landlord at the time of Tenant's or the
Related Entity's, as the case may be, delivery to Landlord of the then
applicable Option Notice (provided, Landlord will not withhold its approval of
Tenant's or the Related Entity's, as applicable, then current financial
condition if the net worth of Tenant or the Related Entity, as the case may be,
at the time of such exercise is substantially the same or better than Tenant's
financial condition as of the Commencement Date); and/or (iv) Tenant or the
Related Entity, as the case may be, has failed to exercise this option in a
timely manner in strict accordance with the provisions of this Addendum 2;
and/or (v) Tenant or the Related Entity, as the case may be, no longer has
possession of all or any part of the Premises under the Lease, or if the Lease
has been terminated earlier, pursuant to the terms of the Lease.
INITIALS:
TENANT: /s/
--------
LANDLORD: /s/
--------
<PAGE> 54
EXHIBIT H
WAIVER BY LANDLORD - EXAMPLE
This Exhibit H is incorporated as part of that certain Lease Agreement dated
February 13, 1996 (the "Lease"), by and between Sequus Pharmaceuticals, Inc., a
Delaware corporation ("Tenant"), and LINCOLN MENLO IV & V ASSOCIATES LIMITED, a
California limited partnership ("Landlord"), for the leasing of those certain
premises located at 1050-1098 Hamilton Court, Menlo Park, California as more
particularly described in Exhibit A to the Lease (the "Premises"). Any
capitalized terms used herein and not otherwise defined herein shall have the
meaning ascribed to such terms as set forth in the Lease.
WAIVER BY LANDLORD
This Waiver By Landlord (the "Agreement") is made and entered into as
of this ____ day of _____________, 199_, by and among _______________________
_____________________________ (hereinafter called "Secured Party"), LINCOLN
MENLO IV & V ASSOCIATES LIMITED, a California limited partnership ("Landlord"),
and Sequus Pharmaceuticals, Inc., a Delaware corporation ("Tenant"), with
reference to that certain security agreement, dated __________, 199_, by and
between Tenant, as debtor, and Secured Party (the "Security Agreement"), wherein
Secured Party has agreed to make a loan to Tenant in the amount of $___________
for the following described purposes:
_________________________________, __________________________________________,
and ____________________ _____________________________.
1. The undersigned Landlord hereby consents to the security interest
granted to Secured Party in the property and equipment described in the attached
Exhibit A (collectively, the "Goods") now, or at any time hereinafter, affixed
to or installed or kept at those certain premises located at 1360 Willow Road,
Suites 101, 201, 203 and 204 Menlo Park, California (the "Premises").
2. Landlord agrees that the Goods will remain personal property at all
times even though they may be affixed to or installed upon the Premises.
3. Landlord hereby waives any right, title, claim or interest in the
Goods by reason of the Goods being attached to or installed or resting upon the
Premises and, subject to the rights of Tenant under that certain Lease Agreement
dated February 13, 1996 between Landlord and Tenant for the lease of the
Premises (the "Lease"), hereby grants Secured Party permission to remove the
Goods from the Premises at any reasonable time during the term of the Lease
after Secured Party's delivery of at least ten (10) business days' prior written
notice to Landlord.
4. Secured Party, at its sole cost and expense, agrees to promptly and
fully repair any damage to the Premises, to Landlord's reasonable satisfaction,
arising in any manner from Secured Party's removal of the Goods from the
Premises. If Landlord is required to so remove such Goods from the Premises for
any reason whatsoever, then (i) Secured Party also agrees to promptly reimburse
Landlord (within ten (10) days after Landlord's delivery of a written demand
therefor) for the cost of repair of any physical damage to the Premises in any
way related to the removal of the Goods from the Premises, and (ii) Secured
Party hereby waives any claim or right to make a claim against Landlord for any
damage to the Goods or any impairment of Secured Party's security interest
therein.
5. Notwithstanding any provisions herein to the contrary, if Secured
Party fails to remove the Goods from the Premises following the termination of
the Lease and Landlord's giving of notice to Secured Party as provided in
California Civil Code Section1983, as same may be amended from time to time (or
any successor statute thereof) then, after the time provided in such civil code
section, Landlord may deem the Goods to be abandoned property and proceed in the
manner as set forth in California Civil Code Section1988, as same may be amended
from time to time (or any successor statute thereof).
6. Secured Party agrees to give Landlord written notice of any default
of Tenant under the Security Agreement within ten (10) days of such default
unless such default is permissibly and wholly cured within such time period.
7. Secured Party and Tenant hereby covenant and represent that each
such party shall not record nor permit to be recorded in the public records this
Agreement, any UCC-1 financing statement, the Security Agreement or any other
document or instrument which would or could have the effect of placing a lien
against any portion of the Premises. If any document or instrument is recorded
in contravention of the foregoing provision, then (i) this Agreement, at
Landlord's sole option, shall terminate and be of no further force or effect,
and (ii) Secured Party and/or Tenant shall promptly take all actions as may be
required by Landlord to cause such document or instrument to be released and/or
terminated.
8. Tenant hereby (i) consents to the provisions of this Agreement, (ii)
waives any and all rights or claims it may have under or by virtue of the Lease,
or at law or in equity, with respect to any breach of Tenant's quiet enjoyment
in and to the Premises or any interference with Tenant's operations
1
<PAGE> 55
in or about the Premises in any way related to or arising from Secured Party's
or Landlord's exercise of their rights granted herein [or under the Lease],
(iii) agrees that it shall not have any right to any rental abatement, deduction
or offset against rental payments payable by Tenant under the Lease by virtue of
Secured Party's or Landlord's exercise of their rights granted herein, and (iv)
agrees that upon the expiration of the term of the Lease or the earlier
termination thereof to (a) promptly remove or cause the removal of the Goods
from the Premises, and (b) promptly and fully repair any damage to the Premises
arising from the installation or removal of the Goods in and from the Premises
and to fully restore the Premises to a good, clean and safe condition and to
Landlord's reasonable satisfaction.
9. Any notice or demand required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been given when
delivered by U.S. mail, registered or certified, return receipt requested,
postage prepaid, or by overnight delivery service showing receipt of delivery,
or by personal delivery, or by facsimile transmission. If to Landlord, notices
shall be sent to: Lincoln Property Company Management Services, Inc., 101
Lincoln Centre Drive, Fourth Floor, Foster City, California 94404 (Phone number:
415-571-2200; facsimile number 415-571-2211); Attention: Property Manager, and
if to Secured Party: _____________________, _______________, ______________,
_______________________; Attention: ______________ (Phone number: _____________;
facsimile number __________________), and if to Tenant, at the address, phone
number and facsimile number at the Premises. Notices as aforesaid shall be
effective upon the earlier of actual receipt, or twenty-four (24) hours after
deposit with the messenger or delivery service, or the next business day after
delivery to an overnight delivery service, or within three (3) days after the
deposit in the U.S. mail, or upon confirmation of transmission by facsimile. If
any party changes its address, such change of address shall not be effective as
to the other parties unless and until such party notifies the other parties of
its new address by one of the above described means of delivery.
10. This Agreement shall be binding upon, and inure to the benefit of,
the parties hereto and their respective successors, heirs, administrators and
permitted assigns.
11. Except as otherwise provided herein, this Agreement may be amended
or modified only by a written instrument executed by all of the parties hereto.
12. This Agreement constitutes the entire understanding of the parties
with regard to the subject matter hereof and all prior agreements,
representations, and understandings between the parties other than the Lease,
whether oral or written, are deemed null and void, all of the foregoing having
been merged into this Agreement. The parties acknowledge that each party and/or
its counsel have reviewed and revised this Agreement and that no rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall be employed in the interpretation of this Agreement or any
amendments or exhibits to this Agreement or any document executed and delivered
by either party in connection with this Agreement.
13. If for any reason, any provision of this Agreement shall be held to
be unenforceable, it shall not affect the validity or enforceability of any
other provision of this Agreement and to the extent any provision of this
Agreement is not determined to be unenforceable, such provision, or portion
thereof, shall be, and remain, in full force and effect.
14. This Agreement may be executed in counterparts. All executed
counterparts shall constitute one agreement, and each counterpart shall be
deemed an original.
15. In the event any dispute between the parties with respect to this
Agreement result in litigation or other proceeding, the prevailing party shall
be reimbursed by the party not prevailing in such proceeding for all reasonable
costs and expenses, including, without limitation, reasonable attorneys' and
experts' fees and costs incurred by the prevailing party in connection with such
litigation or other proceeding and any appeal thereof. Such costs, expenses and
fees shall be included in and made a part of the judgment recovered by the
prevailing party, if any.
16. This Agreement shall be governed by and construed in accordance
with the laws of the State of California.
17. Time is of the essence of this Agreement. Unless the context
otherwise requires, all periods terminating on a given day, period of days, or
date shall terminate at 5:00 p.m. (Pacific Time) on such date or dates and
references to "days" shall refer to calendar days except if such references are
to "business days" which shall refer to days which are not a Saturday, Sunday or
legal holiday. Notwithstanding the foregoing, if any period terminates on a
Saturday, Sunday or legal holiday, under the laws of the State of California,
the termination of such period shall be on the next succeeding business day. The
time in which any act provided under this Agreement is to be done, shall be
computed by excluding the first day and including the last day, unless the last
day is a Saturday, Sunday or legal holiday under the laws of the State of
California, and then it is also so excluded. Notwithstanding anything to the
contrary contained herein, the time in which any act provided under this
Agreement is to be done shall be extended commensurately by the period of time
that the party charged with performing such act is prevented from doing so due
to any event or occurrence considered to be of a
Language indicated as being shown by strike-out in the typeset document is
enclosed in brackets "[" and "]" in the electronic format.
2
<PAGE> 56
force majeure nature, including without limitation, inclement weather,
earthquakes, riots, strikes, boycotts, moratoriums, and any government closures.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first written above.
SECURED PARTY:
___________________________________________,
a _________________________________________
By:________________________________________
Name:
Title:
TENANT:
Sequus Pharmaceuticals, Inc.,
a Delaware corporation
By:________________________________________
Its:_______________________________________
By:________________________________________
Its:_______________________________________
LANDLORD:
LINCOLN MENLO IV & V ASSOCIATES LIMITED,
a California limited partnership
By: Lincoln Property Company Management Services, Inc.,
As Manager and Agent for Landlord
By:_______________________________
Vice President
Date:_____________________________
Attachment: Exhibit A - Goods
INITIALS:
TENANT: /s/
-----------------
LANDLORD: /s/
-----------------
3
<PAGE> 57
EXHIBIT I
SUBORDINATION, NON-DISTURBANCE, AND
ATTORNMENT AGREEMENT
THIS AGREEMENT is dated the _________ day of _____________, 1996, and is made
between AETNA CASUALTY AND SURETY COMPANY or one or more of its affiliates or
designees, ("Mortgagee"), and Sequus Pharmaceuticals, Inc., a Delaware
corporation ("Tenant").
RECITALS
(a) Tenant has entered into a certain lease ("Lease") dated February 13,
1996 with Lincoln Menlo IV and V Associates Limited as lessor ("Landlord"),
covering certain premises known as 1050-1098 Hamilton Court, Menlo Park,
California.
(b) Mortgagee has agreed to make a mortgage loan in the amount of
___________________ (the "Mortgage") to the Landlord, secured by the Demised
Premises, and the parties desire to set forth their agreement herein.
NOW, THEREFORE, in consideration of the Demised Premises and of the sum
of one and 00/100 dollar ($1.00) by each party in hand paid to the other, the
receipt of which is hereby acknowledged, the parties hereby agree as follows:
1. Said Lease is and shall be subject and subordinate to the Mortgage
insofar as it affects the real property of which the Demised Premises form a
part, and to all renewals, modifications, consolidations, replacements and
extensions thereof, to the full extent of amounts secured thereby and interest
thereon.
2. Tenant agrees that it will attorn to and recognize any purchaser at a
foreclosure sale under the Mortgage, any transferee who acquires the Demised
Premises by deed in lieu of foreclosure, and the successors and assigns of such
purchaser(s), as its landlord for the unexpired balance (and any extensions, if
exercised) of the term of said Lease upon the same terms and conditions set
forth in said Lease.
3. If it becomes necessary to foreclose the Mortgage, Mortgagee will not
terminate said Lease nor join Tenant in summary or foreclosure proceedings so
long as Tenant is not in default under any of the terms, covenants, or
conditions of said Lease.
4. If Mortgagee succeeds to the interest of Landlord under the Lease,
Mortgagee shall not be:
a. liable for any act or omissions of any prior landlord
(including Landlord); or
b. liable for the return of any security deposit; or
c. subject to any offsets or defenses which Tenant might
have against any prior landlord (including Landlord); or
d. bound by any rent or additional rent which Tenant might
have paid for more than the current month to any prior
landlord (including Landlord); or
e. bound by any amendment or modification of the Lease made
without its consent; or
f. bound by any representation or warranty made by any prior
landlord (including Landlord).
5. This Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their successors and assigns.
6. Tenant agrees to give Mortgagee, by registered mail, a copy of any
notice of default served upon the Landlord, to be sent to the address of such
Mortgagee indicated following Mortgagee's signature line below. Tenant further
agrees that if Landlord shall have failed to cure such defaults within the time
provided for in this Lease, then the Mortgagee shall have an additional sixty
(60) days within which to cure such defaults or if such default cannot be cured
within that time, then such additional time as may be necessary to cure such
default shall be granted if within such sixty (60) days Mortgagee has commenced
and is diligently pursuing the remedies necessary to cure such default
(including, but not
1
<PAGE> 58
limited to, commencement of foreclosure proceedings, if necessary to effect such
cure), in which event the Lease shall not be terminated while such remedies are
being so diligently pursued.
IN WITNESS WHEREOF, the parties hereto have executed these presents as
of the day and year first above written.
_________________________ MORTGAGEE:
Date
AETNA CASUALTY AND SURETY COMPANY
By:_______________________________
Its:______________________________
Address: c/o AETNA INVESTMENT GROUP
151 Farmington Avenue, IG4J
Hartford, CT 06156
_________________________ TENANT:
Date
Sequus Pharmaceuticals, Inc.,
a Delaware corporation
By:_______________________________
Its:______________________________
2
INITIALS:
TENANT: /s/
-----------
LANDLORD: /s/
-----------
<PAGE> 1
EXHIBIT 10.2.3
LEASE AGREEMENT
(NET)
BASIC LEASE INFORMATION
<TABLE>
<S> <C>
LEASE DATE: May 1, 1995
LANDLORD: LINCOLN MENLO III ASSOCIATES LIMITED,
a California limited partnership
LANDLORD'S ADDRESS: c/o Lincoln Property Company Management Services, Inc.
101 Lincoln Centre Drive, Fourth Floor
Foster City, California 94404-1167
TENANT: Liposome Technology, Incorporated,
a California corporation
TENANT'S ADDRESS: 960 Hamilton Court
Menlo Park, California 94025
PREMISES: Approximately 11,160 rentable square feet as shown on
Exhibit A
PREMISES ADDRESS: 1180 Hamilton Court
Menlo Park, California 94025
BUILDING: 110,000 square feet
LOT (BUILDING'S TAX PARCEL): Lot D of Phase III
PARK: PHASE III 229,000 square feet
TERM: May 15, 1995 ("Commencement Date"), through
May 14, 2000 ("Expiration Date")
BASE RENT (P. 3): Four thousand seventeen and 60/100 dollars ($4,017.60)
per month
ADJUSTMENTS TO BASE RENT: N/A
SECURITY DEPOSIT (Paragraph 4.1): Four thousand seventeen and 60/100 dollars ($4,017.60)
CLEANING DEPOSIT (Paragraph 4.2): N/A
*TENANT'S SHARE OF OPERATING EXPENSES
(Paragraph 6.1): 4.87% of [the Park] Phase III
*TENANT'S SHARE OF TAX EXPENSES (Paragraph 6.2): 10.15% of the Lot
*TENANT'S SHARE OF COMMON AREA UTILITY COSTS
(Paragraph 7): 4.87% of [the Park] Phase III
*The amount of Tenant's Share of the expenses as referenced above shall be
subject to modification as set forth in this Lease.
PERMITTED USES: Warehousing and distribution of pharmaceutical products.
UNRESERVED PARKING SPACES: Eleven (11) nonexclusive and undesignated spaces
BROKER (Paragraph 38): N/A
EXHIBITS: Exhibit A - Premises, Building, Lot and/or Park
Exhibit B - Intentionally left out
Exhibit C - Rules and Regulations
Exhibit D - Covenants, Conditions and Restrictions
Exhibit E - Hazardous Materials Disclosure Certificate
Exhibit F - Intentionally left out
[Exhibit G - Sign Criteria]
Exhibit H - Intentionally left out
ADDENDA: Addendum 1: Early Occupancy Agreement
</TABLE>
Language indicated as being shown by strike-out in the typeset document is
enclosed in brackets "[" and "]" in the electronic format.
<PAGE> 2
TABLE OF CONTENTS
SECTION PAGE
1. PREMISES ............................................................. 3
2. ADJUSTMENT OF COMMENCEMENT DATE; CONDITION OF THE PREMISES ........... 3
3. RENT ................................................................. 3
4. SECURITY DEPOSIT AND CLEANING DEPOSIT ................................ 4
5. TENANT IMPROVEMENTS .................................................. 4
6. ADDITIONAL RENT ...................................................... 4
7. UTILITIES ............................................................ 6
8. LATE CHARGES ......................................................... 7
9. USE OF PREMISES ...................................................... 7
10. ALTERATIONS AND ADDITIONS; AND SURRENDER OF PREMISES ................. 8
11. REPAIRS AND MAINTENANCE .............................................. 8
12. INSURANCE ............................................................ 9
13. WAIVER OF SUBROGATION ................................................ 10
14. LIMITATION OF LIABILITY AND INDEMNITY ................................ 10
15. ASSIGNMENT AND SUBLEASING ............................................ 11
16. AD VALOREM TAXES ..................................................... 12
17. SUBORDINATION ........................................................ 12
18. RIGHT OF ENTRY ....................................................... 12
19. ESTOPPEL CERTIFICATE ................................................. 13
20. TENANT'S DEFAULT ..................................................... 13
21. REMEDIES FOR TENANT'S DEFAULT ........................................ 13
22. HOLDING OVER ......................................................... 14
23. LANDLORD'S DEFAULT ................................................... 15
24. PARKING .............................................................. 15
25. SALE OF PREMISES ..................................................... 15
26. WAIVER ............................................................... 15
27. CASUALTY DAMAGE ...................................................... 15
28. CONDEMNATION ......................................................... 16
29. ENVIRONMENTAL MATTERS/HAZARDOUS MATERIALS ............................ 16
30. FINANCIAL STATEMENTS ................................................. 18
31. GENERAL PROVISIONS ................................................... 18
32. SIGNS ................................................................ 19
33. MORTGAGEE PROTECTION ................................................. 19
34. QUITCLAIM ............................................................ 20
35. MODIFICATIONS FOR LENDER ............................................. 20
36. WARRANTIES OF TENANT ................................................. 20
37. COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT ...................... 20
38. BROKERAGE COMMISSION ................................................. 20
39. QUITE ENJOYMENT ...................................................... 21
40. LANDLORD'S ABILITY TO PERFORM TENANT'S UNPERFORMED OBLIGATIONS ....... 21
2
<PAGE> 3
LEASE AGREEMENT
DATE: This Lease is made and entered into as of the Lease Date defined on
Page 1. The Basic Lease Information set forth on Page 1 and this Lease
are and shall be construed as a single instrument.
1. PREMISES: Landlord hereby leases the Premises to Tenant upon the terms and
conditions contained herein. Landlord hereby grants to Tenant a revocable
license for the right to use, on a non-exclusive basis, parking areas and
ancillary facilities located within the Common Area of the Park, subject to the
terms of this Lease. Landlord and Tenant hereby agree that for purposes of this
Lease, as of the Lease Date, the rentable square footage area of the Premises,
the Building, the Lot and the Park shall be deemed to be the number of rentable
square feet set forth in the Basic Lease Information on Page 1. Tenant further
agrees that the number of rentable square feet of the Premises, the Building,
the Lot and the Park may subsequently change after the Lease Date commensurate
with any modifications to any of the foregoing.
2. ADJUSTMENT OF COMMENCEMENT DATE; CONDITION OF THE PREMISES: If Landlord
cannot deliver possession of the Premises on the Commencement Date, Landlord
shall not be subject to any liability nor shall the validity of the Lease be
affected; provided the Lease term and the obligation to pay Rent shall commence
on the date possession is tendered and the Expiration Date shall be extended by
a period of time equal to the period computed from the Commencement Date to the
date possession is tendered by Landlord to Tenant. In the event the commencement
date and/or the expiration date of this Lease is other than the Commencement
Date and/or Expiration Date provided on Page 1, as the case may be, Landlord and
Tenant shall execute a written amendment to this Lease, substantially in the
form of Exhibit F hereto, wherein the parties shall specify the actual
commencement date, expiration date and the date on which Tenant is to commence
paying Rent. In the event that Landlord permits Tenant to occupy the Premises
prior to the Commencement Date, such occupancy shall be at Tenant's sole risk
and subject to all the provisions of this Lease, including, but not limited to,
the requirement to pay Rent and the Security Deposit, and to obtain the
insurance required pursuant to this Lease and to deliver insurance certificates
as required herein. In addition to the foregoing, Landlord shall have the right
to impose such additional conditions on Tenant's early entry as Landlord shall
deem appropriate. By taking possession of the Premises, Tenant shall be deemed
to have accepted the Premises in a good, clean and completed condition and state
of repair, in compliance with all applicable laws, codes, regulations,
administrative orders and ordinances, and subject to all matters of record.
Tenant hereby acknowledges and agrees that neither Landlord nor Landlord's
agents or representatives has made any representations or warranties as to the
suitability, safety or fitness of the Premises for the conduct of Tenant's
business, Tenant's intended use of the Premises or for any other purpose, and
that neither Landlord nor Landlord's agents or representatives has agreed to
undertake any alterations or construct any Tenant Improvements to the Premises
except as expressly provided in this Lease. Tenant agrees that at anytime before
or during the term of this Lease, Landlord shall have the right to relocate
Tenant from the Premises described herein to other space within the Park on
substantially the same terms and conditions of this Lease provided the other
space is of comparable size.
3. RENT: On the date that Tenant executes this Lease, Tenant shall deliver to
Landlord the original executed Lease, the Base Rent (which shall be applied
against the Rent payable for the first month Tenant is required to pay Base
Rent), the Security Deposit, the Cleaning Deposit, and all insurance
certificates evidencing the insurance required to be obtained by Tenant under
Section 12 of this Lease. Tenant agrees to pay Landlord, without prior notice or
demand, or abatement, offset, deduction or claim, the Base Rent described on
Page 1, payable in advance at Landlord's address shown on Page 1 on the first
day of each month throughout the term of the Lease. In addition to the Base Rent
set forth on Page 1, Tenant shall pay Landlord in advance and on the first (1st)
day of each month throughout the term of this Lease (including any extensions of
such term), as Additional Rent Tenant's share, as set forth on Page 1, of
Operating Expenses, Tax Expenses, Common Area Utility Costs, and Utility
Expenses, and Administrative Expenses all in the manner as specified in Sections
6.1, 6.2, 6.3, 6.4 and 7 of this Lease, respectively. Additionally, Tenant shall
pay to Landlord as Additional Rent hereunder, immediately on Landlord's demand
therefor, any and all costs and expenses incurred by Landlord to enforce the
provisions of this Lease, including, but not limited to, costs associated with
any proposed assignment or subletting of all or any portion of the Premises by
Tenant, costs associated with the delivery of notices, delivery and recordation
of notice(s) of default, attorneys' fees, expert fees, court costs and filing
fees (collectively, the "Enforcement Expenses"). The term "Rent" whenever used
herein refers to the aggregate of all these amounts. If Landlord permits Tenant
to occupy the Premises without requiring Tenant to pay rental payments for a
period of time, the waiver of the requirement to pay rental payments shall only
apply to waiver of the Base Rent and Tenant shall otherwise perform all other
obligations of Tenant hereunder, including, but not limited to paying to
Landlord any and all amounts considered additional rent, such as Tenant's share
of Operating Expenses, Tax Expenses, Common Area Utility Costs, and Utility
Expenses, and Administrative Expenses. If, at any time, Tenant is in default of
or otherwise breaches any term, condition or provision of this Lease, any such
waiver by Landlord of Tenant's requirement to pay rental payments shall be null
and void and Tenant shall immediately pay to Landlord all rental payments waived
by Landlord. The Rent for any fractional part of a calendar month at the
commencement or termination of the Lease term shall be a prorated amount of the
Rent for a full calendar month based upon a thirty (30) day month. The prorated
Rent shall be paid on the Commencement Date and the first day of the calendar
month in which the date of termination occurs, as the case may be.
3
<PAGE> 4
4. SECURITY DEPOSIT AND CLEANING DEPOSIT:
4.1 SECURITY DEPOSIT: Upon Tenant's execution of this Lease, Tenant
shall deliver to Landlord, as a Security Deposit for the performance by Tenant
of its obligations under this Lease, the amount described on Page 1. If Tenant
is in default, Landlord may, but without obligation to do so, use the Security
Deposit, or any portion thereof, to cure the default or to compensate Landlord
for all damages sustained by Landlord resulting from Tenant's default,
including, but not limited to the Enforcement Expenses. Tenant shall,
immediately on demand, pay to Landlord a sum equal to the portion of the
Security Deposit so applied or used so as to replenish the amount of the
Security Deposit held to increase such deposit to the amount initially deposited
with Landlord. Concurrently with any increase in the Base Rent, Tenant shall
deliver to Landlord an amount equal to such increase, which amount shall be
added to the Security Deposit being held by Landlord and be deemed a part of
such Security Deposit thereafter. At any time after Tenant has defaulted
hereunder, Landlord may require an increase in the amount of the Security
Deposit required hereunder for the then balance of the Lease term and Tenant
shall, immediately on demand, pay to Landlord additional sums in the amount of
such increase. As soon as practicable after the termination of this Lease,
Landlord shall return the Security Deposit to Tenant, less such amounts as are
reasonably necessary, as determined solely by Landlord, to remedy Tenant's
default(s) hereunder or to otherwise restore the Premises to a clean and safe
condition, reasonable wear and tear excepted. If the cost to restore the
Premises exceeds the amount of the Security Deposit, Tenant shall promptly
deliver to Landlord any and all of such excess sums as reasonably determined by
Landlord. Landlord shall not be required to keep the Security Deposit separate
from other funds, and, unless otherwise required by law, Tenant shall not be
entitled to interest on the Security Deposit. In no event or circumstance shall
Tenant have the right to any use of the Security Deposit and, specifically,
Tenant may not use the Security Deposit as a credit or to otherwise offset any
payments required hereunder, including, but not limited to, Rent or any portion
thereof.
4.2 CLEANING DEPOSIT: Upon Tenant's execution of this Lease, Tenant
shall deliver to Landlord, as a Cleaning Deposit for the performance by Tenant
of its obligations under this Lease including, but not limited to, Section 11
below, the amount described on Page 1. The Cleaning Deposit is to be used for
purposes relating to cleaning up the Premises and the area adjacent to the
Premises, to the extent such cleaning up is required due to Tenant's or its
representatives, employees, invitees or contractors' use of the area adjacent to
the Premises, to the reasonable satisfaction of Landlord. If Tenant is in
default, Landlord may, but without obligation to do so, use the Cleaning
Deposit, or any portion thereof, to cure the default or to compensate Landlord
for all damages sustained by Landlord resulting from Tenant's default,
including, but not limited to the Enforcement Expenses. Tenant shall,
immediately on demand, pay to Landlord a sum equal to the portion of the
Cleaning Deposit so applied or used so as to replenish the amount of the
Cleaning Deposit to increase such deposit to the amount initially deposited with
Landlord. At anytime after Tenant has defaulted hereunder, Landlord may require
an increase in the amount of the Cleaning Deposit required hereunder for the
then balance of the Lease term and Tenant shall, immediately on demand, pay to
Landlord additional sums in the amount of such increase. As soon as practicable
after the termination of this Lease, Landlord shall return the Cleaning Deposit
to Tenant, less such amounts as are reasonably necessary to remedy Tenant's
default(s) hereunder or to otherwise restore the Premises to a clean and safe
condition as determined by Landlord. Landlord shall not be required to keep the
Cleaning Deposit separate from other funds, and, unless otherwise required by
law, Tenant shall not be entitled to interest on the Cleaning Deposit. In no
event or circumstance shall Tenant have the right to any use of the Cleaning
Deposit and, specifically, Tenant may not use the Cleaning Deposit as a credit
or to otherwise offset any payments required hereunder, including, but not
limited to, Rent or any portion thereof.
5. TENANT IMPROVEMENTS: Tenant hereby accepts the Premises in its current "as
is" condition unless otherwise specified in Exhibit B, attached hereto and
incorporated herein by this reference. If so specified in Exhibit B hereto,
Landlord or Tenant, as the case may be, shall install the improvements ("Tenant
Improvements") on the Premises as described and in accordance with the terms,
conditions, criteria and provisions set forth in Exhibit B, attached and
incorporated herein by this reference. Tenant acknowledges that neither Landlord
nor any of Landlord's agents, representatives or employees has made any
representations as to the suitability or fitness of the Premises for the conduct
of Tenant's business, including, without limitation, any storage incidental
thereto, or for any other purpose, and that neither Landlord nor any of
Landlord's agents, representatives or employees has agreed to undertake any
alterations or construct any Tenant Improvements to the Premises except as
expressly provided in Exhibit B to this Lease.
6. ADDITIONAL RENT : The costs and expenses described in this Section 6 and all
other sums, charges, costs and expenses specified in this Lease other than Base
Rent, including, but not limited to, Utility Expenses, Tenant's share of Common
Area Utility Costs, Late Charges and Enforcement Expenses are to be paid by
Tenant to Landlord as additional rent (collectively, "Additional Rent").
6.1 OPERATING EXPENSES: In addition to the Base Rent set forth in
Section 3, Tenant shall pay its share, which is defined on Page 1, of all
Operating Expenses as Additional Rent. The term "Operating Expenses" as used
herein shall mean the total amounts paid or payable by Landlord in connection
with the ownership, maintenance, repair and operation of the Premises, the
Building and the Lot, and where applicable, of the Park referred to on Page 1.
The amount of Tenant's share of Operating Expenses shall be reviewed from time
to time by Landlord and shall be subject to modification by Landlord as
reasonably determined by Landlord. These Operating Expenses may include, but are
not limited to:
4
<PAGE> 5
6.1.1 Landlord's cost of repairs to, and maintenance of, the
roof, the roof membrane and the exterior walls of the Building;
6.1.2 Landlord's cost of maintaining the outside paved area,
landscaping and other common areas for the Park. The term "Common Area"
shall mean all areas and facilities within the Park exclusive of the
Premises and the other portions of the Park leased exclusively to other
tenants. The Common Area includes, but is not limited to, interior
lobbies, mezzanines, parking areas, access and perimeter roads,
sidewalks, rail spurs, landscaped areas and similar areas and
facilities;
6.1.3 Landlord's annual cost of insurance insuring against
fire and extended coverage (including, if Landlord elects, "all risk"
coverage) and all other insurance, including, but not limited to,
earthquake, flood and/or surface water endorsements for the Building,
the Lot and the Park (including the Common Area), rental value
insurance against loss of Rent in an amount equal to the amount of Rent
for a period of at least six (6) months commencing on the date of loss,
and subject to the provisions of Section 27 below, any deductible;
6.1.4 Landlord's cost of modifications to the Building, the
Common Area and/or the Park occasioned by any rules, laws or
regulations effective subsequent to the date on which the Building was
originally constructed;
6.1.5 Landlord's cost of modifications to the Building, the
Common Area and/or the Park occasioned by any rules, laws or
regulations arising from Tenant's use of the Premises regardless of
when such rules, laws or regulations became effective;
6.1.6 If Landlord elects to so procure, Landlord's cost of
preventative maintenance, and repair contracts including, but not
limited to, contracts for elevator systems and heating, ventilation and
air conditioning systems, lifts for disabled persons, and trash or
refuse collection;
6.1.7 Landlord's cost of security and fire protection services
for the Building and/or the Park, as the case may be, if in Landlord's
sole discretion such services are provided;
6.1.8 Landlord's establishment of reasonable reserves for
replacements and/or repairs of Common Area improvements, equipment and
supplies;
6.1.9 Landlord's cost for the maintenance and repair of any
rail spur and rail crossing, and for the creation and negotiation of,
and pursuant to, any rail spur or track agreements, licenses, easements
or other similar undertakings;
6.1.10 Landlord's cost of supplies, equipment, rental
equipment and other similar items used in the operation and/or
maintenance of the Park; and
6.1.11 Landlord's cost for the repairs and maintenance items
set forth in Section 11.2 below.
6.2 TAX EXPENSES: In addition to the Base Rent set forth in Section 3,
Tenant shall pay its share, which is defined on Page 1, of all real property
taxes applicable to the land and improvements included within the Lot on which
the Premises are situated and one hundred percent (100%) of all personal
property taxes now or hereafter assessed or levied against the Premises or
Tenant's personal property. The amount of Tenant's share of Tax Expenses shall
be reviewed from time to time by Landlord and shall be subject to modification
by Landlord as reasonably determined by Landlord. Tenant shall also pay one
hundred percent (100%) of any increase in real property taxes attributable, in
Landlord's sole discretion, to any and all alterations, Tenant Improvements or
other improvements of any kind, which are above standard improvements
customarily installed for similar buildings located within the Building or the
Park (as applicable), whatsoever placed in, on or about the Premises for the
benefit of, at the request of, or by Tenant. The term "Tax Expenses" shall mean
and include, without limitation, any form of tax and assessment (general,
special, supplemental, ordinary or extraordinary), commercial rental tax,
payments under any improvement bond or bonds, license, rental tax, transaction
tax, levy, or penalty imposed by authority having the direct or indirect power
of tax (including any city, county, state or federal government, or any school,
agricultural, lighting, drainage or other improvement district thereof) as
against any legal or equitable interest of Landlord in the Premises, the
Building, the Lot or the Park, as against Landlord's right to rent or other
income therefrom, or as against Landlord's business of leasing the Premises or
the occupancy of Tenant or any other tax, fee, or excise, however described,
including, but not limited to, any value added tax, or any tax imposed in
substitution (partially or totally) of any tax previously included within the
definition of real property taxes, or any additional tax the nature of which was
previously included within the definition of real property taxes. The term "Tax
Expenses" shall not include any franchise, estate, inheritance, net income, or
excess profits tax imposed upon Landlord.
6.3 ADMINISTRATIVE EXPENSES: In addition to the Base Rent set forth in
Section 3 hereof, Tenant shall pay Landlord, without prior notice or demand, on
the first (1st) day of each month throughout the term of this Lease (including
any extensions of such term), as compensation to Landlord for accounting and
management services rendered on behalf of the Building and/or the Park,
one-twelfth (1/12th) of an amount equal to ten percent (10%) of the estimated
amount of the aggregate of the Tenant's share of (i) the total Operating
Expenses and Tax Expenses as described in Sections 6.1 and 6.2 above,
respectively, and (ii) all
5
<PAGE> 6
Common Area Utility Costs for the Park and the Premises as described in Section
7 below; as such amounts are estimated by Landlord in accordance with the
provisions of Section 6.4 below (collectively, the "Administrative Expenses").
Tenant's obligations to pay such Administrative Expenses shall survive the
expiration or earlier termination of this Lease.
6.4 PAYMENT OF EXPENSES: Landlord shall estimate Tenant's share of the
Operating Expenses and Tax Expenses for the calendar year in which the Lease
commences. Commencing on the Commencement Date, one-twelfth (1/12th) of this
estimated amount shall be paid by Tenant to Landlord, as Additional Rent, on the
first (1st) day of each month and throughout the remaining months of such
calendar year. Thereafter, Landlord may estimate such expenses as of the
beginning of each calendar year and Tenant shall pay one-twelfth (1/12th) of
such estimated amount as Additional Rent hereunder on the first day of each
month during such calendar year and for each ensuing calendar year throughout
the term of this Lease (including any extensions of the term). By April 30th of
each of the following calendar years, or as soon thereafter as reasonably
possible, including the calendar year after the calendar year in which this
Lease terminates or the term expires, Landlord shall endeavor to furnish Tenant
with an accounting of actual Operating Expenses and Tax Expenses. Within thirty
(30) days of Landlord's delivery of such accounting, Tenant shall pay to
Landlord the amount of any underpayment. Notwithstanding the foregoing, failure
by Landlord to give such accounting by such date shall not constitute a waiver
by Landlord of its right to collect any of Tenant's underpayment at any time.
Landlord shall credit the amount of any overpayment by Tenant toward the next
estimated monthly installment(s) falling due, or where the term of the Lease has
expired, refund the amount of overpayment to Tenant. Tenant, at its sole cost
and expense through any certified public accountant designated by it, shall have
the right to examine and/or audit the books and records evidencing such costs
and expenses for the previous one (1) calendar year, during Landlord's
reasonable business hours and not more frequently than once during any calendar
year. Tenant's obligations to pay its share of Operating Expenses and Tax
Expenses shall survive the expiration or earlier termination of this Lease.
6.5 ANNUAL RECONCILIATION: If the term of the Lease expires prior to
the annual reconciliation of expenses, if any, Landlord shall have the right to
reasonably estimate Tenant's share of such expenses, and if Landlord determines
that an underpayment is due, Tenant hereby agrees that Landlord shall be
entitled to deduct such underpayment from Tenant's Security Deposit. If Landlord
reasonably determines that an overpayment has been made by Tenant, Landlord
shall refund said overpayment to Tenant as soon as practicable thereafter.
Notwithstanding the foregoing, failure of Landlord to accurately estimate
Tenant's share of such expenses or to otherwise perform such reconciliation of
expenses, including, without limitation, Landlord's failure to deduct any
portion of any underpayment from Tenant's Security Deposit, shall not constitute
a waiver of Landlord's right to collect any of Tenant's underpayment at any time
during the term of the Lease or at any time after the expiration or earlier
termination of this Lease.
7. UTILITIES: Utility Expenses, Common Area Utility Costs and all other
sums or charges set forth in this Section 7 are considered part of Additional
Rent. Tenant shall pay the cost of all water, sewer use, sewer discharge fees
and sewer connection fees, gas, heat, electricity, refuse pickup, janitorial
service, telephone and other utilities billed or metered separately to the
Premises and/or Tenant. Tenant shall also pay its share of any assessments or
charges for utility or similar purposes included within any tax bill for the Lot
on which the Premises are situated, including, without limitation, entitlement
fees, allocation unit fees, and/or any similar fees or charges, and any
penalties related thereto. For any such utility fees or use charges that are not
billed or metered separately to Tenant, Tenant shall pay to Landlord, as
Additional Rent, without prior notice or demand, on the first (1st) day of each
month throughout the term of this Lease the amount which is attributable to
Tenant's use of the utilities or similar services, as reasonably estimated and
determined by Landlord based upon factors such as size of the Premises and
intensity of use of such utilities by Tenant such that Tenant shall pay the
portion of such charges reasonably consistent with Tenant's use of such
utilities and similar services ("Utility Expenses"). If Tenant disputes any such
estimate or determination, then Tenant shall either pay the estimated amount or
cause the Premises to be separately metered at Tenant's sole expense. In
addition, Tenant shall pay to Landlord its share, which is described on Page 1,
as Additional Rent, without prior notice or demand, on the first (1st) day of
each month throughout the term of this Lease, of any Common Area utility costs,
fees, charges or expenses ("Common Area Utility Costs"). Tenant shall pay to
Landlord one-twelfth (1/12th) of the estimated amount of Tenant's share of the
Common Area Utility Costs in the same manner and time periods as specified in
Section 6.4 above and any reconciliation thereof shall also be in the same
manner as specified in Sections 6.4 and 6.5 above. The amount of Tenant's share
of Common Area Utility Costs shall be reviewed from time to time by Landlord and
shall be subject to modification by Landlord as reasonably determined by
Landlord. Tenant acknowledges that the Premises may become subject to the
rationing of utility services or restrictions on utility use as required by a
public utility company, governmental agency or other similar entity having
jurisdiction thereof. Notwithstanding any such rationing or restrictions on use
of any such utility services, Tenant acknowledges and agrees that its tenancy
and occupancy hereunder shall be subject to such rationing restrictions as may
be imposed upon Landlord, Tenant, the Premises, the Building or the Park, and
Tenant shall in no event be excused or relieved from any covenant or obligation
to be kept or performed by Tenant by reason of any such rationing or
restrictions. Tenant further agrees to timely and faithfully pay, prior to
delinquency, any amount, tax, charge, surcharge, assessment or imposition
levied, assessed or imposed upon the Premises, or Tenant's use and occupancy
thereof, or as a result directly or indirectly of any such rationing or
restrictions.
6
<PAGE> 7
8. LATE CHARGES: Any and all sums or charges set forth in this Section 8 are
considered part of Additional Rent. Tenant acknowledges that late payment [(the
second day of each month or anytime thereafter)] by Tenant to Landlord of Base
Rent, Tenant's share of Operating Expenses, Tax Expenses, Common Area Utility
Costs, and Utility Expenses, Administrative Expenses or other sums due
hereunder, will cause Landlord to incur costs not contemplated by this Lease,
the exact amount of such costs being extremely difficult and impracticable to
fix. Such costs include, without limitation, processing and accounting charges,
and late charges that may be imposed on Landlord by the terms of any note
secured by any encumbrance against the Premises, and late charges and penalties
due to the late payment of real property taxes on the Premises. Therefore, if
any installment of Rent or any other sum due from Tenant is not received by
Landlord when due, Tenant shall promptly pay to Landlord [all of the following,
as applicable: (a)] an additional sum equal to ten percent (10%) of such
delinquent amount [plus interest on such delinquent amount at the rate equal to
the prime rate plus three percent (3%) for the time period such payments are
delinquent as a late charge for every month or portion thereof that such sums
remain unpaid, (b) the amount of seventy-five dollars ($75) for each three-day
notice prepared for, or served on, Tenant, (c) the amount of fifty dollars ($50)
relating to checks for which there are not sufficient funds]. If Tenant delivers
to Landlord a check for which there are not sufficient funds, Landlord may, at
its sole option, require Tenant to replace such check with a cashier's check for
the amount of such check and all other charges payable hereunder. The parties
agree that this late charge and the other charges referenced above represent a
fair and reasonable estimate of the costs that Landlord will incur by reason of
late payment by Tenant. Acceptance of any late charge or other charges shall not
constitute a waiver by Landlord of Tenant's default with respect to the
delinquent amount, nor prevent Landlord from exercising any of the other rights
and remedies available to Landlord for any other breach of Tenant under this
Lease. If a late charge or other charge becomes payable for any three (3)
installments of Rent within any twelve (12) month period, then Landlord, at
Landlord's sole option, can either require the Rent be paid quarterly in
advance, or be paid monthly in advance by cashier's check or by electronic funds
transfer.
9. USE OF PREMISES:
9.1 COMPLIANCE WITH LAWS, RECORDED MATTERS, AND RULES AND REGULATIONS:
The Premises are to be used solely for the uses stated on Page 1 and for no
other uses or purposes without Landlord's prior written consent, which consent
may be given or withheld in Landlord's sole discretion. The use of the Premises
by Tenant and its employees, representatives, agents, invitees, licensees,
subtenants, customers or contractors (collectively, "Tenant's Representatives")
shall be subject to, and at all times in compliance with, (a) any and all
applicable laws, ordinances, statutes, orders and regulations as same exist from
time to time (collectively, the "Laws"), (b) any and all documents, matters or
instruments, including without limitation, any declarations of covenants,
conditions and restrictions, and any supplements thereto, each of which has been
or hereafter is recorded in any official or public records with respect to the
Premises, the Building, the Lot and/or the Park, or any portion thereof
(collectively, the "Recorded Matters"), and (c) any and all rules and
regulations set forth in Exhibit C, attached to and made a part of this Lease,
and any other reasonable rules and regulations promulgated by Landlord now or
hereafter enacted relating to parking and the operation of the Premises, the
Building and the Park (collectively, the "Rules and Regulations"). Tenant agrees
to, and does hereby, assume full and complete responsibility to ensure that the
Premises are adequate to fully meet the needs and requirements of Tenant's
intended operations of its business within the Premises, and Tenant's use of the
Premises and that same are in compliance with all applicable Laws.
9.2 PROHIBITION ON USE: Tenant shall not use the Premises or permit
anything to be done in or about the Premises nor keep or bring anything therein
which will in any way conflict with any of the requirements of the Board of Fire
Underwriters or similar body now or hereafter constituted or in any way increase
the existing rate of or affect any policy of fire or other insurance upon the
Building or any of its contents, or cause a cancellation of any insurance
policy. No auctions may be held or otherwise conducted in, on or about the
Premises, the Building, the Lot or the Park without Landlord's written consent
thereto, which consent may be given or withheld in Landlord's sole discretion.
Tenant shall not do or permit anything to be done in or about the Premises which
will in any way obstruct or interfere with the rights of Landlord, other tenants
or occupants of the Building, other buildings in the Park, or other persons or
businesses in the area, or injure or annoy other tenants or use or allow the
Premises to be used for any unlawful or objectionable purpose, as determined by
Landlord, in its reasonable discretion, for the benefit, quiet enjoyment and use
by Landlord and all other tenants or occupants of the Building or other
buildings in the Park; nor shall Tenant cause, maintain or permit any private or
public nuisance in, on or about the Premises, Building, Park and/or the Common
Area, including, but not limited to, any offensive odors, noises, fumes or
vibrations. Tenant shall not damage or deface or otherwise commit or suffer to
be committed any waste in, upon or about the Premises. Tenant shall not place or
store, nor permit any other person or entity to place or store, any property,
equipment, materials, supplies, personal property or any other items or goods
outside of the Premises for any period of time. Tenant shall not permit any
animals, including, but not limited to, any household pets, to be brought or
kept in or about the Premises. Tenant shall place no loads upon the floors,
walls, or ceilings in excess of the maximum designed load permitted by the
applicable Uniform Building Code or which may damage the Building or outside
areas; nor place any harmful liquids in the drainage systems; nor dump or store
waste materials, refuse or other such materials, or allow such to remain outside
the Building area, except in refuse dumpsters or in any enclosed trash areas
provided. Tenant shall honor the terms of all Recorded Matters relating to the
Premises, the Building, the Lot and/or the Park. Tenant shall honor the Rules
and Regulations. If Tenant fails to comply with such Laws, Recorded Matters,
Rules and Regulations or the provisions of this Lease, Landlord shall have the
right to collect from Tenant a reasonable sum as a penalty, in addition to all
rights and remedies of Landlord hereunder including, but not limited to,
Language indicated as being shown by strike-out in the typeset document is
enclosed in brackets "[" and "]" in the electronic format.
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the payment by Tenant to Landlord of all Enforcement Expenses and Landlord's
costs and expenses, if any, to cure any of such failures of Tenant, if Landlord,
at its sole option, elects to undertake such cure.
10. ALTERATIONS AND ADDITIONS; AND SURRENDER OF PREMISES:
10.1 ALTERATIONS AND ADDITIONS: Tenant shall not install any signs,
fixtures, improvements, nor make or permit any other alterations or additions to
the Premises without the prior written consent of Landlord. If any such
alteration or addition is expressly permitted by Landlord, Tenant shall deliver
at least twenty (20) days prior notice to Landlord, from the date Tenant intends
to commence construction, sufficient to enable Landlord to post a Notice of
Non-Responsibility. In all events, Tenant shall obtain all permits or other
governmental approvals prior to commencing any of such work and deliver a copy
of same to Landlord. All alterations and additions shall be installed by a
licensed contractor approved by Landlord, at Tenant's sole expense in compliance
with all applicable Laws (including, but not limited to, the ADA as defined
herein), Recorded Matters, and Rules and Regulations. Tenant shall keep the
Premises and the property on which the Premises are situated free from any liens
arising out of any work performed, materials furnished or obligations incurred
by or on behalf of Tenant. As a condition to Landlord's consent to the
installation of any fixtures, additions or other improvements, Landlord may
require Tenant to post and obtain a completion and indemnity bond for up to one
hundred fifty percent (150%) of the cost of the work.
10.2 SURRENDER OF PREMISES: Upon the termination of this Lease, whether
by forfeiture, lapse of time or otherwise, or upon the termination of Tenant's
right to possession of the Premises, Tenant will at once surrender and deliver
up the Premises, together with the fixtures, furnishings, additions and
improvements which Landlord has notified Tenant, in writing, that Landlord will
require Tenant not to remove, to Landlord in good condition and repair
including, but not limited to, replacing all light bulbs and ballasts not in
good working condition, excepting for reasonable wear and tear. Reasonable wear
and tear shall not include any damage or deterioration to the floors of the
Premises arising from the use of forklifts in, on or about the Premises
(including, without limitation, any marks or stains of any portion of the
floors), and any damage or deterioration that would have been prevented by
proper maintenance by Tenant or Tenant otherwise performing all of its
obligations under this Lease. Upon such termination of this Lease, Tenant shall
remove all tenant signage, trade fixtures, furniture, furnishings, personal
property, additions, and other improvements unless Landlord requests, in
writing, that Tenant not remove some or all of such trade fixtures, furniture,
furnishings, additions or improvements installed by, or on behalf of Tenant or
situated in or about the Premises. By the date which is twenty (20) days prior
to such termination of this Lease, Landlord shall notify Tenant in writing of
those fixtures, alterations, furniture, furnishings, trade fixtures, additions
and other improvements which Landlord shall require Tenant not to remove from
the Premises. Tenant shall repair any damage caused by the installation or
removal of such signs, trade fixtures, furniture, furnishings, fixtures,
additions and improvements which are to be removed from the Premises by Tenant
hereunder. If Landlord fails to so notify Tenant at least twenty (20) days prior
to such termination of this Lease, then Tenant shall remove all tenant signage,
fixtures, alterations, furniture, furnishings, trade fixtures, additions and
other improvements installed in or about the Premises by, or on behalf of
Tenant. Tenant shall ensure that the removal of such items and the repair of the
Premises will be completed prior to such termination of this Lease.
11. REPAIRS AND MAINTENANCE:
11.1 TENANT'S REPAIRS AND MAINTENANCE OBLIGATIONS: Except for those
portions of the Building to be maintained by Landlord, as provided in Section
11.2 below, Tenant shall, at Tenant's sole cost and expense, keep and maintain
the Premises and the adjacent areas (including, without limitation, any portion
of the Common Area used by Tenant or Tenant's Representatives) in good, clean
and safe condition and repair to the satisfaction of Landlord including, but not
limited to, repairing any damage caused by Tenant or Tenant's Representatives
and replacing any property so damaged by Tenant or Tenant's Representatives.
Without limiting the generality of the foregoing, Tenant shall be solely
responsible for maintaining, repairing and replacing (a) all mechanical systems,
heating, ventilation and air conditioning systems, (b) all plumbing, electrical
wiring and equipment serving the Premises, (c) all interior lighting (including,
without limitation, light bulbs and/or ballasts) and exterior lighting serving
the Premises or adjacent to the Premises, (d) all glass, windows, window frames,
window casements, skylights, interior and exterior doors, door frames and door
closers, (e) all roll-up doors, ramps and dock equipment including without
limitation, dock bumpers, dock plates, dock seals, dock levelers and dock
lights, (f) all tenant signage, (g) lifts for disabled persons serving the
Premises, (h) sprinkler systems, fire protection systems and security systems,
(i) all partitions, fixtures, equipment, interior painting, and interior walls
and floors of the Premises and every part thereof (including, without
limitation, any demising walls contiguous to any portion of the Premises).
Tenant's obligation to keep, maintain, preserve and repair the Premises and the
adjacent area shall specifically extend to the cleanup and removal of any and
all Hazardous Materials (hereafter defined) occurring in, on or about the
Premises.
11.2 REIMBURSABLE REPAIRS AND MAINTENANCE OBLIGATIONS: Subject to the
provisions of Sections 6 and 9 of this Lease and except for (i) the obligations
of Tenant set forth in Section 11.1 above, and (ii) the repairs rendered
necessary by the intentional or negligent acts or omissions of Tenant or
Tenant's Representatives, Landlord agrees, at Landlord's expense, subject to
reimbursement pursuant to Section 6 above, to keep in good repair the plumbing
and mechanical systems exterior to the Premises, any rail spur and rail
crossing, the roof, roof membranes, exterior walls of the Building, signage
(exclusive of tenant signage), and exterior electrical wiring and equipment,
exterior lighting, exterior glass, exterior doors and
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entrances, exterior window casements, exterior doors and door closers, exterior
painting of the Building (exclusive of the Premises), and underground utility
and sewer pipes outside the exterior walls of the Building. For purposes of this
Section 11.2, the term "exterior" shall mean exterior to, and not serving the
Premises. Unless otherwise notified by Landlord, in writing, that Landlord has
elected to procure and maintain the following described contract(s), Tenant
shall procure and maintain (a) the heating, ventilation and air conditioning
systems preventative maintenance and repair contract(s); such contract(s) to be
on a bi-monthly or quarterly basis, as reasonably determined by Landlord, and
(b) the fire and sprinkler protection services and preventative maintenance and
repair contract(s) (including, without limitation, monitoring services); such
contract(s) to be on a bi-monthly or quarterly basis, as reasonably determined
by Landlord. Landlord reserves the right, but without the obligation to do so,
to procure and maintain (i) the heating, ventilation and air conditioning
systems preventative maintenance and repair contract(s), and/or (ii) the fire
and sprinkler protection services and preventative maintenance and repair
contract(s) (including, without limitation, monitoring services). If Landlord so
elects to procure and maintain any such contract(s), Tenant will reimburse
Landlord for the cost thereof in accordance with the provisions of Section 6
above. If Tenant procures and maintains any of such contract(s), Tenant will
promptly deliver to Landlord a true and complete copy of (x) each such contract
and any and all renewals or extensions thereof, and (y) each service report or
other summary received by Tenant pursuant to or in connection with such
contract(s).
11.3 LANDLORD'S REPAIRS AND MAINTENANCE OBLIGATIONS: Except for repairs
rendered necessary by the intentional or negligent acts or omissions of Tenant
or Tenant's Representatives, Landlord agrees, at Landlord's sole cost and
expense, to (a) keep in good repair the structural portions of the floors,
foundations and exterior perimeter walls of the Building (exclusive of glass and
exterior doors), and (b) replace the structural portions of the roof of the
Building (excluding the roof membrane) as, and when, Landlord determines such
replacement to be necessary in Landlord's sole discretion.
11.4 TENANT'S FAILURE TO PERFORM REPAIRS AND MAINTENANCE OBLIGATIONS:
Except for normal maintenance and repair of the items described above, Tenant
shall have no right of access to or right to install any device on the roof of
the Building nor make any penetrations of the roof of the Building without the
express prior written consent of Landlord. If Tenant refuses or neglects to
repair and maintain the Premises and the adjacent areas properly as required
herein and to the reasonable satisfaction of Landlord, Landlord may, but without
obligation to do so, at any time make such repairs and/or maintenance without
Landlord having any liability to Tenant for any loss or damage that may accrue
to Tenant's merchandise, fixtures or other property, or to Tenant's business by
reason thereof, except to the extent any damage is caused by the willful
misconduct or gross negligence of Landlord or its authorized agents and
representatives. In the event Landlord makes such repairs and/or maintenance,
upon completion thereof Tenant shall pay to Landlord, as additional rent, the
Landlord's costs for making such repairs and/or maintenance, plus twenty percent
(20%) for overhead, upon presentation of a bill therefor, plus any Enforcement
Expenses. The obligations of Tenant hereunder shall survive the expiration of
the term of this Lease or the earlier termination thereof. Tenant hereby waives
any right to repair at the expense of Landlord under any applicable Laws now or
hereafter in effect respecting the Premises.
12. INSURANCE:
12.1 TYPES OF INSURANCE: Tenant shall maintain in full force and effect
at all times during the term of this Lease, at Tenant's sole cost and expense,
for the protection of Tenant and Landlord, as their interests may appear,
policies of insurance issued by a carrier or carriers acceptable to Landlord and
its lender(s) which afford the following coverages: (i) worker's compensation:
statutory limits; (ii) employer's liability, as required by law, with a minimum
limit of $100,000 per employee and $500,000 per occurrence; (iii) commercial
general liability insurance [(occurrence form)] providing coverage against any
and all claims for bodily injury and property damage occurring in, on or about
the Premises arising out of Tenant's and Tenant's Representatives' use and/or
occupancy of the Premises. Such insurance shall include coverage for blanket
contractual liability, fire damage, premises, personal injury, completed
operations, products liability, personal and advertising, and a plate-glass
rider to provide coverage for all glass in, on or about the Premises including,
without limitation, skylights, with deletion of the exclusion for operations
within fifty (50) feet of a railroad track (railroad protective liability), if
applicable. Such insurance shall have a combined single limit of not less than
One Million Dollars ($1,000,000) per occurrence with a Two Million Dollar
($2,000,000) aggregate limit and excess umbrella insurance in the amount of Two
Million Dollars ($2,000,000). [If Tenant has other locations which it owns or
leases, the policy shall include an aggregate limit per location endorsement.]
If necessary, as reasonably determined by Landlord, Tenant shall provide for
restoration of the aggregate limit; (iv) comprehensive automobile liability
insurance: a combined single limit of not less than $2,000,000 per occurrence
and insuring Tenant against liability for claims arising out of the ownership,
maintenance, or use of any owned, hired or non-owned automobiles; (v) "all risk"
property insurance, including without limitation, sprinkler leakage, [boiler and
machinery comprehensive form], if applicable, covering damage to or loss of any
personal property, trade fixtures, inventory, fixtures and equipment located in,
on or about the Premises, and in addition, coverage for [flood, earthquake,] and
business interruption of Tenant, together with, if the property of Tenant's
invitees is to be kept in the Premises, warehouser's legal liability or bailee
customers insurance for the full replacement cost of the property belonging to
invitees and located in the Premises. Such insurance shall be written on a
replacement cost basis (without deduction for depreciation) in an amount equal
to one hundred percent (100%) of the full replacement value of the aggregate of
the items referred to in this subparagraph (v); and (vi) such other insurance as
Landlord deems necessary and prudent or as may otherwise be required by any of
Landlord's lenders or joint venture partners.
Language indicated as being shown by strike-out in the typeset document is
enclosed in brackets "[" and "]" in the electronic format.
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12.2 INSURANCE POLICIES: Insurance required to be maintained by Tenant
shall be written by companies (i) licensed to do business in the State of
California, (ii) domiciled in the United States of America, and (iii) having a
"General Policyholders Rating" of at least A-:X (or such higher rating as may be
required by a lender having a lien on the Premises) as set forth in the most
current issue of "Best's Insurance Reports." [Any deductible amounts under any
of the insurance policies required hereunder shall not exceed One Thousand
Dollars ($1,000).] Tenant shall deliver to Landlord certificates of insurance
and true and complete copies of any and all endorsements required herein for all
insurance required to be maintained by Tenant hereunder at the time of execution
of this Lease by Tenant. Tenant shall, at least thirty (30) days prior to
expiration of each policy, furnish Landlord with certificates of renewal or
"binders" thereof. Each certificate shall expressly provide that such policies
shall not be cancelable or otherwise subject to modification except after thirty
(30) days prior written notice to the parties named as additional insureds as
required in this Lease (except for cancellation for nonpayment of premium, in
which event cancellation shall not take effect until at least ten (10) days'
notice has been given to Landlord). Tenant shall have the right to provide
insurance coverage which it is obligated to carry pursuant to the terms of this
Lease under a blanket insurance policy, provided such blanket policy expressly
affords coverage for the Premises and for Landlord as required by this Lease.
12.3 ADDITIONAL INSUREDS AND COVERAGE: Landlord, any property management
company and/or agent of Landlord for the Premises, the Building, the Lot or the
Park, any lender(s) of Landlord having a lien against the Premises, the
Building, the Lot or the Park, and any joint venture partners of Landlord shall
be named as additional insureds under all of the policies required in Section
12.1(iii) above.* Additionally, such policies shall provide for severability of
interest. All insurance to be maintained by Tenant shall, except for workers'
compensation and employer's liability insurance, be primary, without right of
contribution from insurance maintained by Landlord. Any umbrella liability
policy or excess liability policy (which shall be in "following form") shall
provide that if the underlying aggregate is exhausted, the excess coverage will
drop down as primary insurance. The limits of insurance maintained by Tenant
shall not limit Tenant's liability under this Lease. It is the parties'
intention that the insurance to be procured and maintained by Tenant as required
herein shall provide coverage for any and all damage or injury arising from or
related to Tenant's operations of its business and/or Tenant's or Tenant's
Representatives' use of the Premises and/or any of the areas within the Park,
whether such events occur within the Premises (as described in Exhibit A hereto)
or in any other areas of the Park. It is not contemplated or anticipated by the
parties that the aforementioned risks of loss be borne by Landlord's insurance
carriers, rather it is contemplated and anticipated by Landlord and Tenant that
such risks of loss be borne by Tenant's insurance carriers pursuant to the
insurance policies procured and maintained by Tenant as required herein.
*With the exception of product liability.
12.4 FAILURE OF TENANT TO PURCHASE AND MAINTAIN INSURANCE: In the event
Tenant does not purchase the insurance required in this Lease or keep the same
in full force and effect throughout the term of this Lease (including any
renewals or extensions), Landlord may, but without obligation to do so, purchase
the necessary insurance and pay the premiums therefor. If Landlord so elects to
purchase such insurance, Tenant shall pay to Landlord, as additional rent, the
amount so paid by Landlord promptly upon Landlord's demand therefor. In
addition, Landlord may recover from Tenant and Tenant agrees to pay, as
additional rent, any and all Enforcement Expenses and damages which Landlord may
sustain by reason of Tenant's failure to obtain and maintain such insurance. If
Tenant fails to maintain any insurance required in this Lease, Tenant shall be
liable for all losses, damages and costs resulting from such failure.
13. WAIVER OF SUBROGATION: Landlord and Tenant hereby mutually waive their
respective rights of recovery against each other for any loss of, or damage to,
either parties' property to the extent that such loss or damage is insured by an
insurance policy required to be in effect at the time of such loss or damage.
Each party shall obtain any special endorsements, if required by its insurer
whereby the insurer waives its rights of subrogation against the other party.
This provision is intended to waive fully, and for the benefit of the parties
hereto, any rights and/or claims which might give rise to a right of subrogation
in favor of any insurance carrier. The coverage obtained by Tenant pursuant to
Section 12 of this Lease shall include, without limitation, a waiver of
subrogation endorsement attached to the certificate of insurance. The provisions
of this Section 13 shall not apply in those instances in which such waiver of
subrogation would invalidate such insurance coverage or would cause either
party's insurance coverage to be voided or otherwise uncollectible.
14. LIMITATION OF LIABILITY AND INDEMNITY: Except for damage resulting from the
sole active gross negligence or willful misconduct of Landlord or its authorized
representatives, Tenant agrees to protect, defend (with counsel acceptable to
Landlord) and hold Landlord and Landlord's lender(s), partners, employees,
representatives, legal representatives, successors and assigns (collectively,
the "Indemnitees") harmless and indemnify the Indemnitees from and against all
liabilities, damages, claims, losses, judgments, charges and expenses (including
reasonable attorneys' fees, costs of court and expenses necessary in the
prosecution or defense of any litigation including the enforcement of this
provision) arising from or in any way related to, directly or indirectly,
Tenant's or Tenant's Representatives' use of the Premises, Building and/or the
Park, or the conduct of Tenant's business, or from any activity, work or thing
done, permitted or suffered by Tenant in or about the Premises, or in any way
connected with the Premises or with the improvements or personal property
therein, including, but not limited to, any liability for injury to person or
property of Tenant, Tenant's Representatives, or third party persons. Tenant
agrees that the obligations of Tenant herein shall survive the expiration or
earlier termination of this Lease.
Language indicated as being shown by strike-out in the typeset document is
enclosed in brackets "[" and "]" in the electronic format.
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Except for damage resulting from the sole active gross negligence or
willful misconduct of Landlord or its authorized representatives, Landlord shall
not be liable to Tenant for any loss or damage to Tenant or Tenant's property,
for any injury to or loss of Tenant's business or for any damage or injury to
any person from any cause whatsoever, including, but not limited to, any acts,
errors or omissions by or on behalf of any other tenants or occupants of the
Building and/or the Park. Tenant shall not, in any event or circumstance, be
permitted to offset or otherwise credit against any payments of Rent required
herein for matters for which Landlord may be liable hereunder. Landlord and its
authorized representatives shall not be liable for any interference with light
or air, or for any latent defect in the Premises or the Building. To the fullest
extent permitted by law, Tenant agrees that neither Landlord nor any of
Landlord's lender(s), partners, employees, representatives, legal
representatives, successors and assigns shall at any time or to any extent
whatsoever be liable, responsible or in any way accountable for any loss,
liability, injury, death or damage to persons or property which at any time may
be suffered or sustained by Tenant or by any person(s) whomsoever who may at any
time be using, occupying or visiting the Premises, the Building or the Park.
15. ASSIGNMENT AND SUBLEASING:
15.1 PROHIBITION: Tenant shall not assign, mortgage, hypothecate,
encumber, grant any license or concession, pledge or otherwise transfer this
Lease (collectively, "assignment"), in whole or in part, whether voluntarily or
involuntarily or by operation of law, nor sublet or permit occupancy by any
person other than Tenant of all or any portion of the Premises without first
obtaining the prior written consent of Landlord, which consent shall not be
unreasonably withheld. Tenant hereby agrees that Landlord may withhold its
consent to any proposed sublease or assignment if the proposed sublessee or
assignee or its business is subject to compliance with additional requirements
of the ADA (defined below) beyond those requirements which are applicable to
Tenant, unless the proposed sublessee or assignee shall (a) first deliver plans
and specifications for complying with such additional requirements and obtain
Landlord's written consent thereto, and (b) comply with all Landlord's
conditions for or contained in such consent, including without limitation,
requirements for security to assure the lien-free completion of such
improvements. If Tenant seeks to sublet or assign all or any portion of the
Premises, Tenant shall deliver to Landlord at least thirty (30) days prior to
the proposed commencement of the sublease or assignment (the "Proposed Effective
Date") the following: (i) the name of the proposed assignee or sublessee; (ii)
such information as to such assignee's or sublessee's financial responsibility
and standing as Landlord may reasonably require; and (iii) the aforementioned
plans and specifications, if any. Within ten (10) days after Landlord's receipt
of a written request from Tenant that Tenant seeks to sublet or assign all or
any portion of the Premises, Landlord shall deliver to Tenant a copy of
Landlord's standard form of sublease or assign ment agreement (as applicable),
which instrument shall be utilized for each proposed sublease or assignment (as
applicable), and such instrument shall include a provision whereby the assignee
or sublessee assumes all of Tenant's obligations hereunder and agrees to be
bound by the terms hereof. As Additional Rent hereunder, Tenant shall pay to
Landlord a fee in the amount of five hundred dollars ($500) plus Tenant shall
reimburse Landlord for actual legal and other expenses incurred by Landlord in
connection with any actual or proposed assignment or subletting. In the event
the sublease (1) by itself or taken together with prior sublease(s) covers or
totals, as the case may be, more than twenty-five percent (25%) of the rentable
square feet of the Premises or (2) is for a term which by itself or taken
together with prior or other subleases is greater than fifty percent (50%) of
the period remaining in the term of this Lease as of the time of the Proposed
Effective Date, then Landlord shall have the right, to be exercised by giving
written notice to Tenant, to recapture the space described in the sublease. If
such recapture notice is given, it shall serve to terminate this Lease with
respect to the proposed sublease space, or, if the proposed sublease space
covers all the Premises, it shall serve to terminate the entire term of this
Lease, in either case as of the Proposed Effective Date. However, no termination
of this Lease with respect to part or all of the Premises shall become effective
without the prior written consent, where necessary, of the holder of each deed
of trust encumbering the Premises or any part thereof. If this Lease is
terminated pursuant to the foregoing with respect to less than the entire
Premises, the Rent shall be adjusted on the basis of the proportion of square
feet retained by Tenant to the square feet originally demised and this Lease as
so amended shall continue thereafter in full force and effect. Each permitted
assignee or sublessee shall assume and be deemed to assume this Lease and shall
be and remain liable jointly and severally with Tenant for payment of Rent and
for the due performance of, and compliance with all the terms, covenants,
conditions and agreements herein contained on Tenant's part to be performed or
complied with, for the term of this Lease. No assignment or subletting shall
affect the continuing primary liability of Tenant (which, following assignment,
shall be joint and several with the assignee), and Tenant shall not be released
from performing any of the terms, covenants and conditions of this Lease. Tenant
hereby acknowledges and agrees that it understands that Landlord's accounting
department may process and accept Rent payments without verifying that such
payments are being made by Tenant, a permitted sublessee or a permitted assignee
in accordance with the provisions of this Lease. Although such payments may be
processed and accepted by such accounting department personnel, any and all
actions or omissions by the personnel of Landlord's accounting department shall
not be considered as acceptance by Landlord of any proposed assignee or
sublessee nor shall such actions or omissions be deemed to be a substitute for
the requirement that Tenant obtain Landlord's prior written consent to any such
subletting or assignment, and any such actions or omissions by the personnel of
Landlord's accounting department shall not be considered as a voluntary
relinquishment by Landlord of any of its rights hereunder nor shall any
voluntary relinquishment of such rights be inferred therefrom. For purposes
hereof, in the event Tenant is a corporation, partnership, joint venture, trust
or other entity other than a natural person, any change in the direct or
indirect ownership of Tenant (whether pursuant to one or more transfers) which
results in a change of more than fifty percent (50%) in the direct or indirect
ownership of Tenant shall be deemed to be an assignment within the meaning of
this Section 15 and shall be subject to all the provisions hereof. Any and all
options, first rights of refusal, tenant
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improvement allowances and other similar rights granted to Tenant in this Lease,
if any, shall not be assignable by Tenant unless expressly authorized in writing
by Landlord.
15.2 EXCESS SUBLEASE RENTAL OR ASSIGNMENT CONSIDERATION: In the event of
any sublease or assignment of all or any portion of the Premises where the rent
or other consideration provided for in the sublease or assignment either
initially or over the term of the sublease or assignment exceeds the Rent or pro
rata portion of the Rent, as the case may be, for such space reserved in the
Lease, Tenant shall pay the Landlord monthly, as additional rent, at the same
time as the monthly installments of Rent are payable hereunder, fifty percent
(50%) of the excess of each such payment of rent or other consideration in
excess of the Rent called for hereunder.
15.3 WAIVER: Notwithstanding any assignment or sublease, or any
indulgences, waivers or extensions of time granted by Landlord to any assignee
or sublessee, or failure by Landlord to take action against any assignee or
sublessee, Tenant waives notice of any default of any assignee or sublessee and
agrees that Landlord may, at its option, proceed against Tenant without having
taken action against or joined such assignee or sublessee, except that Tenant
shall have the benefit of any indulgences, waivers and extensions of time
granted to any such assignee or sublessee.
16. AD VALOREM TAXES: Prior to delinquency, Tenant shall pay all taxes and
assessments levied upon trade fixtures, alterations, additions, improvements,
inventories and personal property located and/or installed on or in the Premises
by, or on behalf of, Tenant; and if requested by Landlord, Tenant shall promptly
deliver to Landlord copies of receipts for payment of all such taxes and
assessments. To the extent any such taxes ar not separately assessed or billed
to Tenant, Tenant shall pay the amount thereof as invoiced by Landlord.
17. 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 any bona fide mortgagee or deed of trust beneficiary
with a lien on all or any portion of the Premises or any ground lessor with
respect to the land of which the Premises are a part, the rights of Tenant under
this Lease and 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 Building or the land upon which the Building is situated
or both, and (ii) the lien of any mortgage or deed of trust which may now exist
or hereafter be executed in any amount for which the Building, the Lot, ground
leases or underlying leases, or Landlord's interest or estate in any of said
items is specified as security. Notwithstanding the foregoing, Landlord or any
such ground lessor, mortgagee, or any beneficiary shall have the right to
subordinate or cause to be subordinated any such ground leases or underlying
leases or any such liens to this Lease. If 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 and upon the request of such successor to
Landlord, attorn to and become the Tenant of the successor in interest to
Landlord, provided such successor in interest will not disturb Tenant's use,
occupancy or quiet enjoyment of the Premises so long as Tenant is not in default
of the terms and provisions of this Lease. The successor in interest to Landlord
following foreclosure, sale or deed in lieu thereof shall not be (a) liable for
any act or omission of any prior lessor or with respect to events occurring
prior to acquisition of ownership; (b) subject to any offsets or defenses which
Tenant might have against any prior lessor; (c) bound by prepayment of more than
one (1) month's Rent; or (d) liable to Tenant for any Security Deposit not
actually received by such successor in interest to the extent any portion or all
of such Security Deposit has not already been forfeited by, or refunded to,
Tenant. Landlord shall be liable to Tenant for all or any portion of the
Security Deposit not forfeited by, or refunded to Tenant, until and unless
Landlord transfers such Security Deposit to the successor in interest. Tenant
covenants and agrees to execute (and acknowledge if required by Landlord, any
lender or ground lessor) and deliver, within five (5) days of a demand or
request by Landlord and in the form requested by Landlord, ground lessor,
mortgagee or beneficiary, any additional documents evidencing the priority or
subordination of this Lease with respect to any such ground leases or underlying
leases or the lien of any such mortgage or deed of trust. Tenant's failure to
timely execute and deliver such additional documents shall, at Landlord's
option, constitute a material default hereunder. It is further agreed that
Tenant shall be liable to Landlord, and shall indemnify Landlord from and
against any loss, cost, damage or expense, incidental, consequential, or
otherwise, arising or accruing directly or indirectly, from any failure of
Tenant to execute or deliver to Landlord any such additional documents, together
with any and all Enforcement Expenses.
18. RIGHT OF ENTRY: Tenant grants Landlord or its agents the right to enter the
Premises at all reasonable times for purposes of inspection, exhibition, posting
of notices, repair or alteration. At Landlord's option, Landlord shall at all
times have and retain a key with which to unlock all the doors in, upon and
about the Premises, excluding Tenant's vaults and safes. It is further agreed
that Landlord shall have the right to use any and all means Landlord deems
necessary to enter the Premises in an emergency. Landlord shall also have the
right to place "for rent" and/or "for sale" signs on the outside of the
Premises. Tenant hereby waives any claim from damages or for any injury or
inconvenience to or interference with Tenant's business, or any other loss
occasioned thereby except for any claim for any of the foregoing arising out of
the sole active gross negligence or willful misconduct of Landlord or its
authorized representatives.
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19. ESTOPPEL CERTIFICATE: Tenant shall execute (and acknowledge if required by
any lender or ground lessor) and deliver to Landlord, within not less than five
(5) days after Landlord provides such to Tenant, a statement in writing
certifying that this Lease is unmodified and in full force and effect (or, if
modified, stating the nature of such modification), the date to which the Rent
and other charges are paid in advance, if any, acknowledging that there are not,
to Tenant's knowledge, any uncured defaults on the part of Landlord hereunder or
specifying such defaults as are claimed, and such other matters as Landlord may
reasonably require. Any such statement may be conclusively relied upon by
Landlord and any prospective purchaser or encumbrancer of the Premises. Tenant's
failure to deliver such statement within such time shall be conclusive upon the
Tenant that (a) this Lease is in full force and effect, without modification
except as may be represented by Landlord; (b) there are no uncured defaults in
Landlord's performance; and (c) not more than one month's Rent has been paid in
advance, except in those instances when Tenant pays Rent quarterly in advance
pursuant to Section 8 hereof, then not more than three month's Rent has been
paid in advance. Failure by Tenant to so deliver such certified estoppel
certificate shall be a default of the provisions of this Lease. Tenant shall be
liable to Landlord, and shall indemnify Landlord from and against any loss,
cost, damage or expense, incidental, consequential, or otherwise, arising or
accruing directly or indirectly, from any failure of Tenant to execute or
deliver to Landlord any such certified estoppel certificate, together with any
and all Enforcement Expenses.
20. TENANT'S DEFAULT: The occurrence of any one or more of the following events
shall, at Landlord's option, constitute a default and breach of this Lease by
Tenant:
20.1 The vacation or abandonment of the Premises by Tenant for a period
of ten (10) consecutive days or the vacation of the Premises by Tenant which
would cause any insurance policy to be invalidated or otherwise lapse. Tenant
agrees to notice and service of notice as provided for in this Lease and waives
any right to any other or further notice or service of notice which Tenant may
have under any statute or law now or hereafter in effect;
20.2 The failure by Tenant to make any payment of Rent, Additional Rent
or any other payment required hereunder on the date said payment is due. Tenant
agrees to notice and service of notice as provided for in this Lease and waives
any right to any other or further notice or service of notice which Tenant may
have under any statute or law now or hereafter in effect;
20.3 The failure by Tenant to observe, perform or comply with any of the
conditions, covenants or provisions of this Lease (except failure to make any
payment of Rent and/or Additional Rent) and such failure is not cured within the
time period required under the provisions of this Lease. If such failure is
susceptible of cure but cannot reasonably be cured within the aforementioned
time period (if any), as determined solely by Landlord, Tenant shall promptly
commence the cure of such failure and thereafter diligently prosecute such cure
to completion within the time period specified by Landlord in any written notice
regarding such failure as may be delivered to Tenant by Landlord. In no event or
circumstance shall Tenant have more than fifteen (15) days to complete any such
cure, unless otherwise expressly agreed to in writing by Landlord (in Landlord's
sole discretion);
20.4 The making of a general assignment by Tenant for the benefit of
creditors, the filing of a voluntary petition by Tenant or the filing of an
involuntary petition by any of Tenant's creditors seeking the rehabilitation,
liquidation, or reorganization of Tenant under any law relating to bankruptcy,
insolvency or other relief of debtors and, in the case of an involuntary action,
the failure to remove or discharge the same within sixty (60) days of such
filing, the appointment of a receiver or other custodian to take possession of
substantially all of Tenant's assets or this leasehold, Tenant's insolvency or
inability to pay Tenant's debts or failure generally to pay Tenant's debts when
due, any court entering a decree or order directing the winding up or
liquidation of Tenant or of substantially all of Tenant's assets, Tenant taking
any action toward the dissolution or winding up of Tenant's affairs, the
cessation or suspension of Tenant's use of the Premises, or the attachment,
execution or other judicial seizure of substantially all of Tenant's assets or
this leasehold;
20.5 Tenant's use or storage of Hazardous Materials in, on or about the
Premises, the Building, the Lot and/or the Park other than as expressly
permitted by the provisions of Section 29 below;
20.6 The making of any material misrepresentation or omission by Tenant
in any materials delivered by or on behalf of Tenant to Landlord pursuant to
this Lease; or
20.7 A material adverse change in the financial condition of Tenant or
an affiliated entity of Tenant which may adversely affect Tenant's ability to
perform all or any portion of its obligations under this Lease.
21. REMEDIES FOR TENANT'S DEFAULT:
21.1 LANDLORD'S RIGHTS: In the event of Tenant's default or breach of
the Lease, Landlord may terminate Tenant's right to possession of the Premises
by any lawful means in which case upon delivery of written notice by Landlord
this Lease shall terminate on the date specified by Landlord in such notice and
Tenant shall immediately surrender possession of the Premises to Landlord. In
addition, the Landlord shall have the immediate right of re-entry whether or not
this Lease is terminated, and if this right of re-entry is exercised following
abandonment of the Premises by Tenant, Landlord may consider any personal
property belonging to Tenant and left on the Premises to also have been
abandoned. No re-entry or taking possession
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of the Premises by Landlord pursuant to this Section 21 shall be construed as an
election to terminate this Lease unless a written notice of such intention is
given to Tenant. If Landlord relets the Premises or any portion thereof, (i)
Tenant shall be liable immediately to Landlord for all costs Landlord incurs in
reletting the Premises or any part thereof, including, without limitation,
broker's commissions, expenses of cleaning, redecorating, and further improving
the Premises and other similar costs (collectively, the "Reletting Costs"), and
(ii) the rent received by Landlord from such reletting shall be applied to the
payment of, first, any indebtedness from Tenant to Landlord other than Base
Rent, Operating Expenses, Tax Expenses, Administrative Expenses, Common Area
Utility Costs, and Utility Expenses; second, all costs including maintenance,
incurred by Landlord in reletting; and, third, Base Rent, Operating Expenses,
Tax Expenses, Administrative Expenses, Common Area Utility Costs, Utility
Expenses, and all other sums due under this Lease. Any and all of the Reletting
Costs shall be fully chargeable to Tenant and shall not be prorated or otherwise
amortized in relation to any new lease for the Premises or any portion thereof.
After deducting the payments referred to above, any sum remaining from the
rental 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. Reletting may be for
a period shorter or longer than the remaining term of this Lease. No act by
Landlord other than giving written notice 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. So
long as this Lease is not terminated, Landlord shall have the right to remedy
any default of Tenant, to maintain or improve the Premises, to cause a receiver
to be appointed to administer the Premises and new or existing subleases and to
add to the Rent payable hereunder all of Landlord's reasonable costs in so
doing, with interest at the maximum rate permitted by law from the date of such
expenditure.
21.2 DAMAGES RECOVERABLE: If Tenant breaches this Lease and abandons the
Premises before the end of the term, or if Tenant's right to possession is
terminated by Landlord because of a breach or default of the Lease, then in
either such case, Landlord may recover from Tenant all damages suffered by
Landlord as a result of Tenant's failure to perform its obligations hereunder,
including, but not limited to, the cost of any tenant improvements constructed
by or on behalf of Tenant pursuant to Exhibit B hereto, the portion of any
broker's or leasing agent's commission incurred with respect to the leasing of
the Premises to Tenant for the balance of the term of the Lease remaining after
the date on which Tenant is in default of its obligations hereunder, and all
Reletting Costs, and the worth at the time of the award (computed in accordance
with paragraph (3) of Subdivision (a) of Section 1951.2 of the California Civil
Code) of the amount by which the Rent then unpaid hereunder for the balance of
the Lease term exceeds the amount of such loss of Rent for the same period which
Tenant proves could be reasonably avoided by Landlord and in such case, Landlord
prior to the award, may relet the Premises for the purpose of mitigating damages
suffered by Landlord because of Tenant's failure to perform its obligations
hereunder; provided, however, that even though Tenant has abandoned the Premises
following such breach, this Lease shall nevertheless continue in full force and
effect for as long as Landlord does not terminate Tenant's right of possession,
and until such termination, Landlord shall have the remedy described in Section
1951.4 of the California Civil Code (Landlord may continue this Lease in effect
after Tenant's breach and abandonment and recover Rent as it becomes due, if
Tenant has the right to sublet or assign, subject only to reasonable
limitations) and may enforce all its rights and remedies under this Lease,
including the right to recover the Rent from Tenant as it becomes due hereunder.
The "worth at the time of the award" within the meaning of Subparagraphs (a)(1)
and (a)(2) of Section 1951.2 of the California Civil Code shall be computed by
allowing interest at the rate of ten percent (10%) per annum. Tenant waives
redemption or relief from forfeiture under California Code of Civil Procedure
Sections 1174 and 1179, or under any other present or future law, in the event
Tenant is evicted or Landlord takes possession of the Premises by reason of any
default of Tenant hereunder.
21.3 RIGHTS AND REMEDIES CUMULATIVE: The foregoing rights and remedies
of Landlord are not exclusive; they are cumulative in addition to any rights and
remedies now or hereafter existing at law, in equity by statute or otherwise, or
to any equitable remedies Landlord may have, and to any remedies Landlord may
have under bankruptcy laws or laws affecting creditor's rights generally. In
addition to all remedies set forth above, if Tenant defaults or otherwise
breaches this Lease, any and all Base Rent waived by Landlord under Section 3
above shall be immediately due and payable to Landlord and all options granted
to Tenant hereunder shall automatically terminate, unless otherwise expressly
agreed to in writing by Landlord.
21.4 WAIVER OF A DEFAULT: The waiver by Landlord of any default or
breach of any provision of this Lease shall not be deemed or construed a waiver
of any other breach or default by Tenant hereunder or of any subsequent breach
or default of this Lease, except for the default specified in the waiver.
22. HOLDING OVER: If Tenant holds possession of the Premises after the
expiration of the term of this Lease with Landlord's consent, Tenant shall
become a tenant from month-to-month upon the terms and provisions of this Lease,
provided the monthly Base Rent during such hold over period shall be 150% of the
Base Rent due on the last month of the Lease term, payable in advance on or
before the first day of each month. Acceptance by Landlord of the monthly Base
Rent without the additional fifty percent (50%) increase of Base Rent shall not
be deemed or construed as a waiver by Landlord of any of its rights to collect
the increased amount of the Base Rent as provided herein at any time. Such
month-to-month tenancy shall not constitute a renewal or extension for any
further term. All options, if any, granted under the terms of this Lease shall
be deemed automatically terminated and be of no force or effect during said
month-to-month tenancy. Tenant shall continue in possession until such tenancy
shall be terminated by either Landlord or Tenant giving written notice of
termination to the other party at least thirty (30) days prior to the effective
date
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of termination. This paragraph shall not be construed as Landlord's permission
for Tenant to hold over. Acceptance of Base Rent by Landlord following
expiration or termination of this Lease shall not constitute a renewal of this
Lease.
23. LANDLORD'S DEFAULT: Landlord shall not be deemed in breach or default of
this Lease unless Landlord fails within a reasonable time to perform an
obligation required to be performed by Landlord hereunder. For purposes of this
provision, a reasonable time shall in no event be less than thirty (30) days
after receipt by Landlord of written notice specifying the nature of the
obligation Landlord has not performed; provided, however, that if the nature of
Landlord's obligation is such that more than thirty (30) days, after receipt of
written notice, is reasonably necessary for its performance, then Landlord shall
not be in breach or default of this Lease if performance of such obligation is
commenced within such thirty (30) day period and thereafter diligently pursued
to completion.
24. PARKING: Tenant shall have a license to use the number of undesignated and
nonexclusive parking spaces set forth on Page 1. Landlord shall exercise
reasonable efforts to insure that such spaces are available to Tenant for its
use, but Landlord shall not be required to enforce Tenant's right to use the
same.
25. SALE OF PREMISES: In the event of any sale of the Premises by Landlord or
the cessation otherwise of Landlord's interest therein, Landlord shall be and is
hereby entirely released from any and all of its obligations to perform or
further perform under this Lease and from all liability hereunder as of the date
of such sale; and the purchaser, at such sale or any subsequent sale of the
Premises shall be deemed, without any further agreement between the parties or
their successors in interest or between the parties and any such purchaser, to
have assumed and agreed to carry out any and all of the covenants and
obligations of the Landlord under this Lease. For purposes of this Section 25,
the term "Landlord" means only the owner and/or agent of the owner as such
parties exist as of the date on which Tenant executes this Lease. A ground lease
or similar long term lease by Landlord of the entire Building, of which the
Premises are a part, shall be deemed a sale within the meaning of this Section
25. Tenant agrees to attorn to such new owner provided such new owner does not
disturb Tenant's use, occupancy or quiet enjoyment of the Premises so long as
Tenant is not in default of any of the provisions of this Lease.
26. WAIVER: No delay or omission in the exercise of any right or remedy of
Landlord on any default by Tenant shall impair such a right or remedy or be
construed as a waiver. The subsequent acceptance of Rent by Landlord after
breach by Tenant of any covenant or term of this Lease shall not be deemed a
waiver of such breach, other than a waiver of timely payment for the particular
Rent payment involved, and shall not prevent Landlord from maintaining an
unlawful detainer or other action based on such breach. No payment by Tenant or
receipt by Landlord of a lesser amount than the monthly Rent and other sums due
hereunder shall be deemed to be other than on account of the earliest Rent or
other sums due, nor shall any endorsement or statement on any check or
accompanying any check or payment be deemed an accord and satisfaction; and
Landlord may accept such check or payment without prejudice to Landlord's right
to recover the balance of such Rent or other sum or pursue any other remedy
provided in this Lease. No failure, partial exercise or delay on the part of the
Landlord in exercising any right, power or privilege hereunder shall operate as
a waiver thereof.
27. CASUALTY DAMAGE: If the Premises or any part thereof shall be damaged by
fire or other casualty, Tenant shall give prompt written notice thereof to
Landlord. In case the Building shall be so damaged by fire or other casualty
that substantial alteration or reconstruction of the Building shall, in
Landlord's sole opinion, be required (whether or not the Premises shall have
been damaged by such fire or other casualty), Landlord may, at its option,
terminate this Lease by notifying Tenant in writing of such termination within
sixty (60) days after the date of such damage, in which event the Rent shall be
abated as of the date of such damage. If Landlord does not elect to terminate
this Lease and provided insurance proceeds and any contributions from Tenant, if
necessary, are available to fully repair the damage, Landlord shall within
ninety (90) days after the date of such damage commence to repair and restore
the Building and shall proceed with reasonable diligence to restore the Building
(except that Landlord shall not be responsible for delays outside its control)
to substantially the same condition in which it was immediately prior to the
happening of the casualty; provided, Landlord shall not be required to rebuild,
repair, or replace any part of Tenant's furniture, furnishings or fixtures and
equipment removable by Tenant or any improvements, alterations or additions
installed by or for the benefit of Tenant under the provisions of this Lease.
Landlord shall not in any event be required to spend for such work an amount in
excess of the insurance proceeds (excluding any deductible) and any
contributions from Tenant, if necessary, actually received by Landlord as a
result of the fire or other casualty. Landlord shall not be liable for any
inconvenience or annoyance to Tenant, injury to the business of Tenant, loss of
use of any part of the Premises by the Tenant or loss of Tenant's personal
property resulting in any way from such damage or the repair thereof, except
that, subject to the provisions of the next sentence, Landlord shall allow
Tenant a fair diminution of Rent during the time and to the extent the Premises
are unfit for occupancy. If the Premises or any other portion of the Building be
damaged by fire or other casualty resulting from the intentional or negligent
acts or omissions of Tenant or any of Tenant's Representatives, the Rent shall
not be diminished during the repair of such damage and Tenant shall be liable to
Landlord for the cost and expense of the repair and restoration of all or any
portion of the Building caused thereby (including, without limitation, any
deductible) to the extent such cost and expense is not covered by insurance
proceeds. In the event the
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holder of any indebtedness secured by the Premises requires that the insurance
proceeds be applied to such indebtedness, then Landlord shall have the right to
terminate this Lease by delivering written notice of termination to Tenant
within thirty (30) days after the date of notice to Tenant of any such event,
whereupon all rights and obligations shall cease and terminate hereunder. Except
as otherwise provided in this Section 27, Tenant hereby waives the provisions of
Sections 1932(2.), 1933(4.), 1941 and 1942 of the California Civil Code.
28. CONDEMNATION: If twenty-five percent (25%) or more of the Premises is
condemned by eminent domain, inversely condemned or sold in lieu of condemnation
for any public or quasi-public use or purpose ("Condemned"), then Tenant or
Landlord may terminate this Lease as of the date when physical possession of the
Premises is taken and title vests in such condemning authority, and Rent shall
be adjusted to the date of termination. Tenant shall not because of such
condemnation assert any claim against Landlord or the condemning authority for
any compensation because of such condemnation, and Landlord shall be entitled to
receive the entire amount of any award without deduction for any estate of
interest or other interest of Tenant. If a substantial portion of the Premises,
Building or the Lot is so Condemned, Landlord at its option may terminate this
Lease. If Landlord does not elect to terminate this Lease, Landlord shall, if
necessary, promptly proceed to restore the Premises or the Building to
substantially its same condition prior to such partial condemnation, allowing
for the reasonable effects of such partial condemnation, and a proportionate
allowance shall be made to Tenant, as solely determined by Landlord, for the
Rent corresponding to the time during which, and to the part of the Premises of
which, Tenant is deprived on account of such partial condemnation and
restoration. Landlord shall not be required to spend funds for restoration in
excess of the amount received by Landlord as compensation awarded.
29. ENVIRONMENTAL MATTERS/HAZARDOUS MATERIALS:
29.1 HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE: Prior to executing this
Lease, Tenant has completed, executed and delivered to Landlord the Hazardous
Materials Disclosure Certificate (the "HazMat Certificate"), a copy of which is
attached hereto as Exhibit E and incorporated herein by this reference. Tenant
covenants, represents and warrants to Landlord that the information on the
HazMat Certificate is true and correct and accurately describes the use(s) of
Hazardous Materials which will be made and/or used on the Premises by Tenant.
Tenant shall commencing with the date which is one year from the Commencement
Date and continuing every year thereafter, complete, execute, and deliver to
Landlord, a HazMat Certificate describing Tenant's present use of Hazardous
Materials on the Premises, and any other reasonably necessary documents as
requested by Landlord. The HazMat Certificate required hereunder shall be in
substantially the form as that which is attached hereto as Exhibit E.
29.2 DEFINITION OF HAZARDOUS MATERIALS: As used in this Lease, the term
Hazardous Materials shall mean and include (a) any hazardous or toxic wastes,
materials or substances, and other pollutants or contaminants, which are or
become regulated by any Environmental Laws; (b) petroleum, petroleum by
products, gasoline, diesel fuel, crude oil or any fraction thereof; (c) asbestos
and asbestos containing material, in any form, whether friable or non-friable;
(d) polychlorinated biphenyls; (e) radioactive materials; (f) lead and
lead-containing materials; (g) any other material, waste or substance displaying
toxic, reactive, ignitable or corrosive characteristics, as all such terms are
used in their broadest sense, and are defined or become defined by any
Environmental Law (defined below); or (h) any materials which cause or threatens
to cause a nuisance upon or waste to any portion of the Premises, the Building,
the Lot, the Park or any surrounding property; or poses or threatens to pose a
hazard to the health and safety of persons on the Premises or any surrounding
property.
29.3 PROHIBITION; ENVIRONMENTAL LAWS: Tenant shall not be entitled to
use nor store any Hazardous Materials on, in, or about the Premises, the
Building, the Lot and the Park, or any portion of the foregoing, without, in
each instance, obtaining Landlord's prior written consent thereto. If Landlord
consents to any such usage or storage, then Tenant shall be permitted to use
and/or store only those Hazardous Materials that are necessary for Tenant's
business and to the extent disclosed in the HazMat Certificate and as expressly
approved by Landlord in writing, provided that such usage and storage is only to
the extent of the quantities of Hazardous Materials as specified in the then
applicable HazMat Certificate as expressly approved by Landlord and provided
further that such usage and storage is in full compliance with any and all
local, state and federal environmental, health and/or safety-related laws,
statutes, orders, standards, courts' decisions, ordinances, rules and
regulations (as interpreted by judicial and administrative decisions), decrees,
directives, guidelines, permits or permit conditions, currently existing and as
amended, enacted, issued or adopted in the future which are or become applicable
to Tenant or all or any portion of the Premises (collectively, the
"Environmental Laws"). Tenant agrees that any changes to the type and/or
quantities of Hazardous Materials specified in the most recent HazMat
Certificate may be implemented only with the prior written consent of Landlord,
which consent may be given or withheld in Landlord's sole discretion. Tenant
shall not be entitled nor permitted to install any tanks under, on or about the
Premises for the storage of Hazardous Materials without the express written
consent of Landlord, which may be given or withheld in Landlord's sole
discretion. Landlord shall have the right at all times during the term of this
Lease to (i) inspect the Premises, (ii) conduct tests and investigations to
determine whether Tenant is in compliance with the provisions of this Section
29, and (iii) request lists of all Hazardous Materials used, stored or otherwise
located on, under or about the Premises, the Common Areas and/or the parking
lots (to the extent the Common Areas and/or the parking lots are not considered
part of the Premises). The cost of all such
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inspections, tests and investigations shall be borne solely by Tenant, if
Landlord reasonably believes they are necessary. The aforementioned rights
granted herein to Landlord and its representatives shall not create (a) a duty
on Landlord's part to inspect, test, investigate, monitor or otherwise observe
the Premises or the activities of Tenant and Tenant's Representatives with
respect to Hazardous Materials, including without limitation, Tenant's
operation, use and any remediation related thereto, or (b) liability on the part
of Landlord and its representatives for Tenant's use, storage, disposal or
remediation of Hazardous Materials, it being understood that Tenant shall be
solely responsible for all liability in connection therewith.
29.4 TENANT'S ENVIRONMENTAL OBLIGATIONS: Tenant shall give to Landlord
immediate verbal and follow-up written notice of any spills, releases,
discharges, disposals, emissions, migrations, removals or transportation of
Hazardous Materials on, under or about the Premises, or in any Common Areas or
parking lots (to the extent such areas are not considered part of the Premises).
Tenant, at its sole cost and expense, covenants and warrants to promptly
investigate, clean up, remove, restore and otherwise remediate (including,
without limitation, preparation of any feasibility studies or reports and the
performance of any and all closures) any spill, release, discharge, disposal,
emission, migration or transportation of Hazardous Materials arising from or
related to the intentional or negligent acts or omissions of Tenant or Tenant's
Representatives such that the affected portions of the Park and any adjacent
property are returned to the condition existing prior to the appearance of such
Hazardous Materials. Any such investigation, clean up, removal, restoration and
other remediation shall only be performed after Tenant has obtained Landlord's
prior written consent, which consent shall not be unreasonably withheld so long
as such actions would not potentially have a material adverse long-term or
short-term effect on the Premises, the Building, the Lot or the Park, or any
portion of any of the foregoing. Notwithstanding the foregoing, Tenant shall be
entitled to respond immediately to an emergency without first obtaining
Landlord's prior written consent. Tenant, at its sole cost and expense, shall
conduct and perform, or cause to be conducted and performed, all closures as
required by any Environmental Laws or any agencies or other governmental
authorities having jurisdiction thereof. If Tenant fails to so promptly
investigate, clean up, remove, restore, provide closure or otherwise so
remediate, Landlord may, but without obligation to do so, take any and all steps
necessary to rectify the same and Tenant shall promptly reimburse Landlord, upon
demand, for all costs and expenses to Landlord of performing investigation,
clean up, removal, restoration, closure and remediation work. All such work
undertaken by Tenant, as required herein, shall be performed in such a manner so
as to enable Landlord to make full economic use of the Premises, the Building,
the Lot and the Park after the satisfactory completion of such work.
29.5 ENVIRONMENTAL INDEMNITY: In addition to Tenant's obligations as set
forth hereinabove, Tenant and Tenant's officers and directors agree to, and
shall, protect, indemnify, defend (with counsel acceptable to Landlord) and hold
Landlord and Landlord's lenders, partners, property management company (if other
than Landlord), agents, directors, officers, employees, representatives,
contractors, shareholders, successors and assigns and each of their respective
partners, directors, employees, representatives, agents, contractors,
shareholders, successors and assigns harmless from and against any and all
claims, judgments, damages, penalties, fines, liabilities, losses (including,
without limitation, diminution in value of the Premises, the Building, the Lot,
the Park, or any portion of any of the foregoing, damages for the loss of or
restriction on the use of rentable or usable space, and from any adverse impact
of Landlord's marketing of any space within the Building and/or Park), suits,
administrative proceedings and costs (including, but not limited to, attorneys'
and consultant fees and court costs) arising at any time during or after the
term of this Lease in connection with or related to, directly or indirectly, the
use, presence, transportation, storage, disposal, migration, removal, spill,
release or discharge of Hazardous Materials on, in or about the Premises, or in
any Common Areas or parking lots (to the extent such areas are not considered
part of the Premises) as a result (directly or indirectly) of the intentional or
negligent acts or omissions of Tenant or Tenant's Representatives. Neither the
written consent of Landlord to the presence, use or storage of Hazardous
Materials in, on, under or about any portion of the Premises, the Building, the
Lot and the Park, nor the strict compliance by Tenant with all Environmental
Laws shall excuse Tenant and Tenant's officers and directors from its
obligations of indemnification pursuant hereto. To the extent Landlord is
strictly liable under any Environmental Laws, Tenant's obligations to Landlord
under this Section 29 and the indemnity contained herein shall likewise be
without regard to fault on Tenant's part with respect to the violation of any
Environmental Law which results in liability to any of the aforementioned
indemnitees.
29.6 SURVIVAL: Tenant's obligations and liabilities pursuant to the
provisions of this Section 29 shall survive the expiration or earlier
termination of this Lease. If it is determined by Landlord that the condition of
all or any portion of the Premises, the Building, the Lot and/or the Park is not
in compliance with the provisions of this Lease with respect to Hazardous
Materials, including without limitation all Environmental Laws at the expiration
or earlier termination of this Lease, then at Landlord's sole option, Landlord
may require Tenant to hold over possession of the Premises until Tenant can
surrender the Premises to Landlord in the condition in which the Premises
existed as of the Commencement Date and prior to the appearance of such
Hazardous Materials except for reasonable wear and tear, including without
limitation, the conduct or performance of any closures as required by any
Environmental Laws. The burden of proof hereunder shall be upon Tenant. For
purposes hereof, the term "reasonable wear and tear" shall not include any
deterioration in the condition or diminution of the value of any portion of the
Premises, the Building, the Lot and/or the Park in any manner whatsoever related
to directly, or indirectly, Hazardous Materials. Any such holdover by Tenant
will be with Landlord's consent, will not be terminable by Tenant in any event
or circumstance and will otherwise be subject to the provisions of Section 22 of
this Lease.
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<PAGE> 18
30. FINANCIAL STATEMENTS: Tenant, for the reliance of Landlord, any lender
holding or anticipated to acquire a lien upon the Premises, the Building or the
Park or any portion thereof, or any prospective purchaser of the Building or the
Park or any portion thereof, within ten (10) days after Landlord's request
therefor, but not more often than once annually so long as Tenant is not in
default of this Lease, shall deliver to Landlord the then current audited
financial statements of Tenant (including interim periods following the end of
the last fiscal year for which annual statements are available) which statements
shall be prepared or compiled by a certified public accountant and shall present
fairly the financial condition of Tenant at such dates and the result of its
operations and changes in its financial positions for the periods ended on such
dates. If an audited financial statement has not been prepared, Tenant shall
provide Landlord with an unaudited financial statement and/or such other
information, the type and form of which are acceptable to Landlord in Landlord's
reasonable discretion, which reflects the financial condition of Tenant. If
Landlord so requests, Tenant shall deliver to Landlord an opinion of a certified
public accountant, including a balance sheet and profit and loss statement for
the most recent prior year, all prepared in accordance with generally accepted
accounting principles consistently applied. Any and all options granted to
Tenant hereunder shall be subject to and conditioned upon Landlord's reasonable
approval of Tenant's financial condition at the time of Tenant's exercise of any
such option.
31. GENERAL PROVISIONS:
31.1 TIME. Time is of the essence in this Lease and with respect to each
and all of its provisions in which performance is a factor.
31.2 SUCCESSORS AND ASSIGNS. The covenants and conditions herein
contained, subject to the provisions as to assignment, apply to and bind the
heirs, successors, executors, administrators and assigns of the parties hereto.
31.3 RECORDATION. Tenant shall not record this Lease or a short form
memorandum hereof without the prior written consent of the Landlord.
31.4 LANDLORD'S PERSONAL LIABILITY. The liability of Landlord (which,
for purposes of this Lease, shall include Landlord and the owner of the Building
if other than Landlord) to Tenant for any default by Landlord under the terms of
this Lease shall be limited to the actual interest of Landlord and its present
or future partners in the Premises or the Building and Tenant agrees to look
solely to the Premises for satisfaction of any liability and shall not look to
other assets of Landlord nor seek any recourse against the assets of the
individual partners, directors, officers, shareholders, agents or employees of
Landlord; it being intended that Landlord and the individual partners,
directors, officers, shareholders, agents or employees of Landlord shall not be
personally liable in any manner whatsoever for any judgment or deficiency. The
liability of Landlord under this Lease is limited to its actual period of
ownership of title to the Building, and Landlord shall be automatically released
from further performance under this Lease and from all further liabilities and
expenses hereunder upon transfer of Landlord's interest in the Premises or the
Building.
31.5 SEPARABILITY. Any provisions of this Lease which shall prove to be
invalid, void or illegal shall in no way affect, impair or invalidate any other
provisions hereof and such other provision shall remain in full force and
effect.
31.6 CHOICE OF LAW. This Lease shall be governed by the laws of the
State of California.
31.7 ATTORNEYS' FEES. In the event any dispute between the parties
result in litigation or other proceeding, the prevailing party shall be
reimbursed by the party not prevailing for all reasonable costs and expenses,
including, without limitation, reasonable attorneys' and experts' fees and costs
incurred by the prevailing party in connection with such litigation or other
proceeding and any appeal thereof. Such costs, expenses and fees shall be
included in and made a part of the judgment recovered by the prevailing party,
if any.
31.8 ENTIRE AGREEMENT. This Lease supersedes any prior agreements,
representations, negotiations or correspondence between the parties, and
contains the entire agreement of the parties on matters covered. No other
agreement, statement or promise made by any party that is not in writing and
signed by all parties to this Lease shall be binding.
31.9 WARRANTY OF AUTHORITY. On the date that Tenant executes this Lease,
Tenant shall deliver to Landlord an original certificate of status for Tenant
issued by the California Secretary of State or statement of partnership for
Tenant recorded in the county in which the Premises are located, as applicable,
and such other documents as Landlord may reasonably request with regard to the
lawful existence of Tenant. Each person executing this Lease on behalf of a
party represents and warrants that (1) such person is duly and validly
authorized to do so on behalf of the entity it purports to so bind, and (2) if
such party is a partnership, corporation or trustee, that such partnership,
corporation or trustee has full right and authority to enter into this Lease and
perform all of its obligations hereunder. In addition to any other remedies
available to Landlord under this Lease, if there is any breach of the foregoing
warranty, the person(s) executing this Lease on behalf of Tenant shall be
personally liable for all of Tenant's obligations under this Lease, including,
but not limited to, the payment by such person(s) to Landlord of any and all
losses, liabilities, costs, expenses and damages incurred by Landlord hereunder.
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<PAGE> 19
31.10 NOTICES. Any and all notices and demands required or permitted to
be given hereunder to Landlord shall be in writing and shall be sent: (a) by
United States mail, certified and postage prepaid; or (b) by personal delivery;
or (c) by overnight courier, addressed to Landlord at 101 Lincoln Centre Drive,
Fourth Floor, Foster City, California 94404-1167. Any and all notices and
demands required or permitted to be given hereunder to Tenant shall be in
writing and shall be sent: (i) by United States mail, certified and postage
prepaid; or (ii) by personal delivery to any employee or agent of Tenant over
the age of eighteen (18) years of age; or (iii) by overnight courier, all of
which shall be addressed to Tenant at the Premises; or (iv) by facsimile at the
facsimile number at the Premises, if any, as provided by Tenant on Page 1 of
this Lease or otherwise provided to Landlord. Notice and/or demand shall be
deemed given upon the earlier of actual receipt or the third day following
deposit in the United States mail. Notice and/or demand by facsimile shall be
complete upon transmission over the telephone line. Any notice or requirement of
service required by any statute or law now or hereafter in effect, including,
but not limited to, California Code of Civil Procedure Sections 1161, 1161.1,
and 1162, is hereby waived by Tenant.
31.11 JOINT AND SEVERAL. If Tenant consists of more than one person or
entity, the obligations of all such persons or entities shall be joint and
several.
31.12 COVENANTS AND CONDITIONS. Each provision to be performed by Tenant
hereunder shall be deemed to be both a covenant and a condition.
31.13 WAIVER OF JURY TRIAL. The parties hereto shall and they hereby do
waive trial by jury in any action, proceeding or counterclaim brought by either
of the parties hereto against the other on any matters whatsoever arising out of
or in any way related to this Lease, the relationship of Landlord and Tenant,
Tenant's use or occupancy of the Premises, the Building or the Park, and/or any
claim of injury, loss or damage.
31.14 COUNTERCLAIMS. In the event Landlord commences any proceedings for
nonpayment of Rent, Additional Rent, or any other sums or amounts due hereunder,
Tenant shall not interpose any counterclaim of whatever nature or description in
any such proceedings, provided, however, nothing contained herein shall be
deemed or construed as a waiver of the Tenant's right to assert such claims in
any separate action brought by Tenant or the right to offset the amount of any
final judgment owed by Landlord to Tenant.
31.15 UNDERLINING. The use of underlining within the Lease is for
Landlord's reference purposes only and no other meaning or emphasis is intended
by this use, nor should any be inferred.
32. SIGNS: All signs and graphics of every kind visible in or from public view
or corridors or the exterior of the Premises shall be subject to Landlord's
prior written approval and shall be subject to any applicable governmental laws,
ordinances, and regulations and in compliance with Landlord's Sign Criteria as
set forth in Exhibit G hereto and made a part hereof. Tenant shall remove all
such signs and graphics prior to the termination of this Lease. Such
installations and removals shall be made in a manner as to avoid damage or
defacement of the Premises; and Tenant shall repair any damage or defacement,
including without limitation, discoloration caused by such installation or
removal. Landlord shall have the right, at its option, to deduct from the
Security Deposit such sums as are reasonably necessary to remove such signs,
including, but not limited to, the costs and expenses associated with any
repairs necessitated by such removal. Notwithstanding the foregoing, in no event
shall any: (a) neon, flashing or moving sign(s) or (b) sign(s) which shall
interfere with the visibility of any sign, awning, canopy, advertising matter,
or decoration of any kind of any other business or occupant of the Building or
the Park be permitted hereunder. Tenant further agrees to maintain any such
sign, awning, canopy, advertising matter, lettering, decoration or other thing
as may be approved in good condition and repair at all times.
33. MORTGAGEE PROTECTION: Upon any breach or default on the part of Landlord,
Tenant will give written notice by registered or certified mail to any
beneficiary of a deed of trust or mortgagee of a mortgage covering the Premises
who has provided Tenant with notice of their interest together with an address
for receiving notice, and shall offer such beneficiary or mortgagee a reasonable
opportunity to cure the default (which, in no event shall be less than ninety
(90) days), including time to obtain possession of the Premises by power of sale
or a judicial foreclosure, if such should prove necessary to effect a cure. If
such breach or default cannot be cured within such time period, then such
additional time as may be necessary will be given to such beneficiary or
mortgagee to effect such cure so long as such beneficiary or mortgagee has
commenced the cure within the original time period and thereafter diligently
pursues such cure to completion, in which event this Lease shall not be
terminated while such cure is being diligently pursued. Tenant agrees that each
lender to whom this Lease has been assigned by Landlord is an express third
party beneficiary hereof. Tenant shall not make any prepayment of Rent more than
one (1) month in advance without the prior written consent of each such lender,
except if Tenant is required to make quarterly payments of Rent in advance
pursuant to the provisions of Section 8 above. Tenant waives the collection of
any deposit from such lender(s) or any purchaser at a foreclosure sale of such
lender(s)' deed of trust unless the lender(s) or such purchaser shall have
actually received and not refunded the deposit. Tenant agrees to make all
payments under this Lease to the lender with the most senior encumbrance upon
receiving a direction, in writing, to pay said amounts to such lender. Tenant
shall comply with such written direction to pay without determining whether an
event of default exists under such lender's loan to Landlord.
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<PAGE> 20
34. QUITCLAIM: Upon any termination of this Lease, Tenant shall, at Landlord's
request, execute, have acknowledged and deliver to Landlord a quitclaim deed of
Tenant's interest in and to the Premises. If Tenant fails to so deliver to
Landlord such a quitclaim deed, Tenant hereby agrees that Landlord shall have
the full authority and right to record such a quitclaim deed signed only by
Landlord and such quitclaim deed shall be deemed conclusive and binding upon
Tenant.
35. MODIFICATIONS FOR LENDER: If, in connection with obtaining financing for the
Premises or any portion thereof, Landlord's lender shall request reasonable
modification(s) to this Lease as a condition to such financing, Tenant shall not
unreasonably withhold, delay or defer its consent thereto, provided such
modifications do not materially adversely affect Tenant's rights hereunder or
the use, occupancy or quiet enjoyment of Tenant hereunder.
36. WARRANTIES OF TENANT: Tenant hereby warrants and represents to Landlord, for
the express benefit of Landlord, that Tenant has undertaken a complete and
independent evaluation of the risks inherent in the execution of this Lease and
the operation of the Premises for the use permitted hereby, and that, based upon
said independent evaluation, Tenant has elected to enter into this Lease and
hereby assumes all risks with respect thereto. Tenant hereby further warrants
and represents to Landlord, for the express benefit of Landlord, that in
entering into this Lease, Tenant has not relied upon any statement, fact,
promise or representation (whether express or implied, written or oral) not
specifically set forth herein in writing and that any statement, fact, promise
or representation (whether express or implied, written or oral) made at any time
to Tenant, which is not expressly incorporated herein in writing, is hereby
waived by Tenant.
37. COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT: Landlord and Tenant hereby
agree and acknowledge that the Premises, the Building and/or the Park may be
subject to the requirements of the Americans with Disabilities Act, a federal
law codified at 42 U.S.C. 12101 et seq, including, but not limited to Title III
thereof, all regulations and guidelines related thereto, together with any and
all laws, rules, regulations, ordinances, codes and statutes now or hereafter
enacted by local or state agencies having jurisdiction thereof, including all
requirements of Title 24 of the State of California, as the same may be in
effect on the date of this Lease and may be hereafter modified, amended or
supplemented (collectively, the "ADA"). Any Tenant Improvements to be
constructed hereunder shall be in compliance with the requirements of the ADA,
and all costs incurred for purposes of compliance therewith shall be a part of
and included in the costs of the Tenant Improvements. Tenant shall be solely
responsible for conducting its own independent investigation of this matter and
for ensuring that the design of all Tenant Improvements strictly comply with all
requirements of the ADA. Subject to reimbursement pursuant to Section 6 of the
Lease, if any barrier removal work or other work is required to the Building,
the Common Area or the Park under the ADA, then such work shall be the
responsibility of Landlord; provided, if such work is required under the ADA as
a result of Tenant's use of the Premises or any work or alteration made to the
Premises by or on behalf of Tenant, then such work shall be performed by
Landlord at the sole cost and expense of Tenant. Except as otherwise expressly
provided in this provision, Tenant shall be responsible at its sole cost and
expense for fully and faithfully complying with all applicable requirements of
the ADA, including without limitation, not discriminating against any disabled
persons in the operation of Tenant's business in or about the Premises, and
offering or otherwise providing auxiliary aids and services as, and when,
required by the ADA. Within ten (10) days after receipt, Landlord and Tenant
shall advise the other party in writing, and provide the other with copies of
(as applicable), any notices alleging violation of the ADA relating to any
portion of the Premises or the Building; any claims made or threatened in
writing regarding noncompliance with the ADA and relating to any portion of the
Premises or the Building; or any governmental or regulatory actions or
investigations instituted or threatened regarding noncompliance with the ADA and
relating to any portion of the Premises or the Building. Tenant shall and hereby
agrees to protect, defend (with counsel acceptable to Landlord) and hold
Landlord and Landlord's lender(s), partners, employees, representatives, legal
representatives, successors and assigns (collectively, the "Indemnitees")
harmless and indemnify the Indemnitees from and against all liabilities,
damages, claims, losses, penalties, judgments, charges and expenses (including
reasonable attorneys' fees, costs of court and expenses necessary in the
prosecution or defense of any litigation including the enforcement of this
provision) arising from or in any way related to, directly or indirectly,
Tenant's or Tenant's Representatives' violation or alleged violation of the ADA.
Tenant agrees that the obligations of Tenant herein shall survive the expiration
or earlier termination of this Lease.
38. BROKERAGE COMMISSION: Landlord and Tenant each represents and warrants for
the benefit of the other that it has had no dealings with any real estate
broker, agent or finder in connection with the Premises and/or the negotiation
of this Lease, except for the Broker(s) (as set forth on Page 1), and that it
knows of no other real estate broker, agent or finder who is or might be
entitled to a real estate brokerage commission or finder's fee in connection
with this Lease or otherwise based upon contacts between the claimant and
Tenant. Each party shall indemnify and hold harmless the other from and against
any and all liabilities or expenses arising out of claims made for a fee or
commission by any real estate broker, agent or finder in connection with the
Premises and this Lease other than Broker(s), if any, resulting from the actions
of the indemnifying party. Any real estate brokerage commission or finder's fee
payable to the Broker(s) in connection with this Lease shall only be payable and
applicable to the extent of the initial term of the Lease and to the extent of
the Premises as same exist as of the date on which Tenant executes this Lease.
Unless expressly agreed to in writing by Landlord and Broker(s), no real estate
brokerage commission or finder's fee
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<PAGE> 21
shall be owed to, or otherwise payable to, the Broker(s) for any renewals or
other extensions of the initial term of this Lease or for any additional space
leased by Tenant other than the Premises as same exist as of the date on which
Tenant executes this Lease.
39. QUIET ENJOYMENT: Landlord covenants with Tenant, upon the paying of Rent and
observing and keeping the covenants, agreements and conditions of this Lease on
its part to be kept and during the periods that Tenant is not otherwise in
default of any of the terms or provisions of this Lease, and subject to the
rights of any of Landlord's lenders, (i) that Tenant shall and may peaceably and
quietly hold, occupy and enjoy the Premises and the Common Areas during the term
of this Lease, and (ii) neither Landlord, nor any successor or assign of
Landlord, shall disturb Tenant's occupancy or enjoyment of the Premises and the
Common Areas.
40. LANDLORD'S ABILITY TO PERFORM TENANT'S UNPERFORMED OBLIGATIONS:
Notwithstanding anything to the contrary contained in this Lease, if Tenant
shall fail to perform any of the terms, provisions, covenants or conditions to
be performed or complied with by Tenant pursuant to this Lease, and/or if the
failure of Tenant relates to a matter which in Landlord's judgment reasonably
exercised is of an emergency nature and such failure shall remain uncured for a
period of time commensurate with such emergency, then Landlord may, at
Landlord's option without any obligation to do so, and in its sole discretion as
to the necessity therefor, perform any such term, provision, covenant, or
condition, or make any such payment and Landlord by reason of so doing shall not
be liable or responsible for any loss or damage thereby sustained by Tenant or
anyone holding under or through Tenant. If Landlord so performs any of Tenant's
obligations hereunder, the full amount of the cost and expense entailed or the
payment so made or the amount of the loss so sustained shall immediately be
owning by Tenant to Landlord, and Tenant shall promptly pay to Landlord upon
demand, as Additional Rent, the full amount thereof with interest thereon from
the date of payment at the greater of (i) ten percent (10%) per annum, or (ii)
the highest rate permitted by applicable law and Enforcement Expenses.
IN WITNESS WHEREOF, this Lease is executed on the date and year first
written above.
TENANT:
Liposome Technology, Incorporated,
a Delaware corporation
By: /s/ Donald Stewart
-----------------------------
Its: Vice President, Finance
-----------------------------
LANDLORD:
LINCOLN MENLO III ASSOCIATES LIMITED,
a California limited partnership
By: Lincoln Property Company Management Services, Inc.,
As Manager and Agent for Owner
By: /s/
-----------------------------
Vice President
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<PAGE> 22
EXHIBIT A - PREMISES, BUILDING, LOT AND/OR PARK
PAGE 1 OF 1
LEASE DATED MAY 1, 1995, BETWEEN
LIPOSOME TECHNOLOGY, INCORPORATED,
A CALIFORNIA CORPORATION
("TENANT"),
AND
LINCOLN MENLO III ASSOCIATES LIMITED,
A CALIFORNIA LIMITED PARTNERSHIP
("LANDLORD")
[GRAPHIC OF SITE PLAN]
INITIALS:
TENANT: /s/
-------
LANDLORD: /s/
-------
<PAGE> 23
EXHIBIT C - RULES & REGULATIONS
PAGE 1 OF 1
LEASE DATED MAY 1, 1995, BETWEEN
LIPOSOME TECHNOLOGY, INCORPORATED,
A CALIFORNIA CORPORATION
("TENANT"),
AND
LINCOLN MENLO III ASSOCIATES LIMITED,
A CALIFORNIA LIMITED PARTNERSHIP
("LANDLORD")
1. No advertisement, picture or sign of any sort shall be displayed on or
outside the Premises without the prior written consent of Landlord.
Landlord shall have the right to remove any such unapproved item
without notice and at Tenant's expense.
2. Tenant shall not regularly park motor vehicles in designated parking
areas after the conclusion of normal daily business activity.
3. Tenant shall not use any method of heating or air conditioning other
than that supplied by Landlord without the consent of Landlord.
4. All window coverings installed by Tenant and visible from the outside
of the building require the prior written approval of Landlord.
5. Tenant shall not use, keep or permit to be used or kept any foul or
noxious gas or substance or any flammable or combustible materials on
or around the Premises.
6. Tenant shall not alter any lock or install any new locks or bolts on
any door at the Premises without the prior consent of Landlord.
7. Tenant agrees not to make any duplicate keys without the prior consent
of Landlord.
8. Tenant shall park motor vehicles in those general parking areas as
designated by Landlord except for loading and unloading. During those
periods of loading and unloading, Tenant shall not unreasonably
interfere with traffic flow within the Project and loading and
unloading areas of other Tenants.
9. Tenant shall not disturb, solicit or canvas any occupant of the
Building or Project and shall cooperate to prevent same.
10. No person shall go on the roof without Landlord's permission.
11. Business machines and mechanical equipment belonging to Tenant which
cause noise or vibration that may be transmitted to the structure of
the Building, to such a degree as to be objectionable to Landlord or
other Tenants, shall be placed and maintained by Tenant, at Tenant's
expense, on vibration eliminators or other devices sufficient to
eliminate noise or vibration.
12. All goods, including material used to store goods, delivered to the
Premises of Tenant shall be immediately moved into the Premises and
shall not be left in parking or receiving areas overnight.
13. Tractor trailers which must be unhooked or parked with dolly wheels
beyond the concrete loading areas must use steel plates or wood blocks
under the dolly wheels to prevent damage to the asphalt paving
surfaces. No parking or storing of such trailers will be permitted in
the auto parking areas of the Project or on streets adjacent thereto.
14. Forklifts which operate on asphalt paving areas shall not have solid
rubber tires and shall only use tires that do not damage the asphalt.
15. Tenant is responsible for the storage and removal of all trash and
refuse. All such trash and refuse shall be contained in suitable
receptacles stored behind screened enclosures at locations approved by
Landlord.
16. Tenant shall not store or permit the storage or placement of goods or
merchandise in or around the common areas surrounding the Premises. No
displays or sales or merchandise shall be allowed in the parking lots
or other common areas.
17. Tenant shall not permit any animals, including, but not limited to, any
household pets, to be brought or kept in or about the Premises, the
Building, the Park or any of the Common Areas of the foregoing.
INITIALS:
TENANT: /s/
-------
LANDLORD: /s/
-------
<PAGE> 24
EXHIBIT D
WILLOW PARK
DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS
PAGE 1 OF 7
LEASE DATED MAY 1, 1995, BETWEEN
LIPOSOME TECHNOLOGY, INCORPORATED,
A CALIFORNIA CORPORATION
("TENANT"),
AND
LINCOLN MENLO III ASSOCIATES LIMITED,
A CALIFORNIA LIMITED PARTNERSHIP
("LANDLORD")
This Declaration of Covenants, Conditions and Restrictions (hereinafter called
"Declaration") is made this twenty- fifth day of August 1979, by LINCOLN
PROPERTY COMPANY NO. 287, LTD., A CALIFORNIA LIMITED PARTNERSHIP (PHASE 3)
(hereinafter called "Lincoln Property Company").
RECITALS
1. Declarant is, or at the time of recording this Declaration will be,
the Owner in fee of all that certain real property which is situated in the City
of Menlo Park, County of San Mateo, State of California, described on the map
(hereinafter called "Map") entitled "Menlo Industrial Center, Menlo Park,
California" which Map is filed in the office of the Recorder of the County of
San Mateo, State of California, on October 1, 1979, in Book No. 99 of Maps, at
pages 81, 82 and 83.
2. As Owner of the real property described in Paragraph 1 of these
Recitals, Declarant has executed this Declaration for the purpose of imposing
upon all portions of said real property (other than Parcel E as shown on the
Map) a general plan of improvement for the benefit of said real property (other
than said Parcel E) and its present and future owners. Said real property (other
than Parcel E) is hereinafter called the "Property."
NOW, THEREFORE, Declarant hereby declares that the Property is now
held, and shall hereafter be held, developed, encumbered, hypothecated,
transferred, sold, leased, conveyed, improved, used and occupied subject to the
covenants, conditions, restrictions and limitations hereinafter set forth, all
of which are declared to be in furtherance of a plan for the development and
operation of a landscaped business and industrial park and are established for
the purpose of enhancing and protecting the value, attractiveness and
desirability of the Property and every part thereof. Each of the covenants,
conditions, restrictions and limitations set forth herein shall run with the
land, and every part thereof, and shall burden as well as inure to the benefit
of and pass with each and every portion of the Property hereinafter developed,
encumbered, hypothecated, transferred, sold, leased, conveyed, improved, used or
occupied and shall apply to and bind any and all parties having or acquiring any
right, title, license or interest in the Property or any part thereof.
ARTICLE I
DEFINITIONS
Unless the context otherwise specifies or requires, the terms defined
in this Article I shall, for all purposes of this Declaration, have the meanings
herein specified.
1.1 Building. "Building" shall mean the principal structure or
structures on any Site, including all garages, outside platforms, outbuildings,
docks and the like.
1.2 Declarant. "Declarant shall mean Lincoln Property Company, its
successors and assigns. Declarant's assigns shall be deemed to include any party
whom Declarant designates, by means of a notice recorded in the Official Records
of San Mateo County, as the party who, from and after the date such notice is
recorded, will perform Declarant's functions under this Declaration.
<PAGE> 25
EXHIBIT D
COVENANTS, CONDITIONS AND RESTRICTIONS
PAGE 2 OF 7
1.3 Deed of Trust. "Deed of Trust" shall mean, with respect to any
portion of the property, a duly recorded Deed of Trust, mortgage or other
instrument which created a lien on the portion of the Property is describes.
1.4 Improvements. "Improvements" shall mean and include without
limitation buildings, outbuildings, pedestrian and vehicle access facilities,
parking areas, loading areas, fences, walls, hedged mass plantings, landscaping,
poles, signs and any structures of any type or kind.
1.5 Owner. "Owner" shall mean any person, firm, corporation or other
legal entity (including Declarant) which owns fee title to a Site, as shown by
the Official Records of the County of San Mateo; provided, however, that the
term "Owner" shall not include a mortgage or beneficiary under a deed of trust
holding a security interest in a Site unless such mortgagee or beneficiary is in
actual physical possession of the Site.
Whenever this Declaration creates or imposes an obligation with respect
to a Site, the Owner of the Site shall be responsible for the timely and proper
performance of the obligation, notwithstanding any delegation of such
responsibility by lease, contract, or otherwise to another party.
1.6 Property. "Property" shall mean that certain real property subject
to the covenants, conditions and restrictions set forth herein, namely, that
real property described on Exhibit A attached hereto and incorporated herein.
1.7 Site. "Site" shall mean a continuous area of land within the
Property which is owned of record by the same Owner, whether shown as one parcel
on any recorded map or as a combination of parcels or of portions thereof.
ARTICLE II
REGULATION OF USES
2.1 Permitted Uses. Unless otherwise specifically prohibited herein, or
by applicable law, any business/industrial use will be permissible if it does
not constitute a nuisance to adjacent Sites. Permitted uses will include, but
not be limited to, manufacturing, warehousing, distribution, cartage,
processing, storage, wholesaling, office, laboratory, professional and research
and development.
2.2 Nuisance. No noxious or offensive activity shall be carried on nor
shall anything be done on any Site which may be or become an annoyance or
nuisance to the Owners or occupants of other Sites, or which will be offensive
to the Owners or occupants of other Sites by reason of odor, fumes, discharge of
any chemical or industrial waste above or below ground, dust, dirt, fly-ash,
smoke, noise, glare or which will be hazardous by reason of danger of fire or
explosion or any other hazard.
2.3 Right of Entry. During reasonable hours and subject to reasonable
security requirements, Declarant or its authorized representative shall have the
right to enter upon and inspect any Building and/or Site and the Improvements
thereon for the purpose of ascertaining whether or not the provisions of this
Declaration have been or are being complied with and shall not be deemed guilty
of trespass by reason of such entry.
<PAGE> 26
EXHIBIT D
COVENANTS, CONDITIONS AND RESTRICTIONS
PAGE 3 OF 7
ARTICLE III
REGULATION OF IMPROVEMENTS
3.1 Minimum Setback Lines
(a) General. No Improvement and no part thereof shall be
placed on any Site closer to a property line than herein provided. The
following Improvements are specifically excluded from these setback
provisions:
(1) Roof overhang, subject to the specific approval
of Declarant in writing.
(2) Steps and walks.
(3) Paving and associated curbing, except that
vehicle parking areas shall not be permitted within ten (10)
feet of the street property line or lines.
(4) Fences, except that no fence shall be placed
within the street setback area unless specific approval is
given by Declarant in writing.
(5) Landscaping.
(6) Planters, not to exceed three (3) feet in height.
(7) Railroad spur tracks, switches and bumpers,
provided that the location of such tracks, switches and
bumpers is specifically approved by Declarant in writing.
(8) Displays identifying the Owner, Lessee or
occupant, subject to the specific approval of Declarant in
writing.
(b) Setback from interior property lines. No setback
is established from a rear or side interior property line. The
interior lot lines for a corner lot shall be considered to
have a real property line.
(c) Setback Street Property Lines. The setback line
is established as twenty (20) feet from property line on all
streets on the property.
3.2 Completion of Construction. After commencement of construction of
any Improvement, the Owner shall diligently prosecute the work thereon to the
end that the Improvement shall not remain in a partly finished condition any
longer than reasonably necessary for the completion thereof.
3.3 No excavation shall be made except in connection with construction
of an Improvement, and upon completion thereof, exposed openings shall be
backfilled and disturbed ground shall be graded and leveled.
3.4 Landscaping.
(a) Every Site on which a Building shall have been placed
shall be landscaped according to plans approved as specified herein and
maintained thereafter in a sightly and well-kept condition.
(b) An Owner, Lessee or occupant shall landscape and maintain
unpaved areas between the property lines and the setback lines.
(c) An Owner, Lessee or occupant shall provide hose bibs and
maintenance facilities in the vicinity of the landscaped areas.
<PAGE> 27
EXHIBIT D
COVENANTS, CONDITIONS AND RESTRICTIONS
PAGE 4 OF 7
(d) Landscape as approved by Declarant shall be installed
within ninety (90) days of occupancy or completion of the Building,
whichever occurs first.
3.5 Site Maintenance. All Improvements on each Site including, without
limitation, all walks, driveways, fences, parking areas, landscaping and the
exterior of all structures on each Site, shall be maintained free of litter and
debris and in good condition, order and repair. Landscaping shall be kept in
thriving condition, weed-free and neatly trimmed. All undeveloped Sites shall be
kept clean, mowed and in a condition so as not to be a dust or weed problem.
3.6 Signs and Lighting. No signs or displays shall be created on any
Site, other than the following:
(a) Signs identifying the name, building and business of any
person or firm occupying a Site, the size, design and color of which
has been specifically approved by Declarant in writing; and
(b) Offering a Site for sale or lease if Declarant has
specifically approved said signs in writing.
All signs and displays shall be located below the roof line of
the building and shall comply with all applicable laws and ordinances.
Lighting shall be restricted to parking and security lights,
fire lighting and low-level sign illumination and floodlighting of
buildings or landscaping. All lighting shall be shielded and contained
within property lines.
3.7 Parking Areas. Adequate parking on a Site shall be provided to
accommodate all parking needs for employees, visitors and company vehicles.
There shall also be adequate areas provided for truck loading and unloading. The
intent of this provision is to eliminate the need for any on-street parking. If
parking or loading requirements increase as a result of a change in use or
number of employees, additional off-street parking shall be provided to satisfy
the intent of this section.
3.8 Building Regulations. Any building erected on a Site shall conform
to the following construction practices:
(a) Exterior walls of sheet or corrugated iron, steel,
aluminum or asbestos will be permitted only upon specific approval in
writing by Declarant.
(b) Exterior walls shall be painted or suitably treated in a
manner acceptable to Declarant.
ARTICLE IV
APPROVAL OF PLANS
4.1 No Improvement shall be erected, placed, altered, maintained or
permitted to remain on any land subject to these restrictions until plans and
specifications showing plot layout, including parking and all exterior
elevations, with materials and colors, have been submitted to and approved in
writing by Declarant. Said approval shall be in addition to any approvals and/or
permits required by the City of Menlo Park or any other legal entity having
jurisdiction. Such plans and specifications shall be submitted in writing over
the signature of the Owner of Lessee of the Site or his authorized agent.
4.2 Approval shall be based, among other things, on adequacy of Site
dimensions, adequacy of structural design, conformity and harmony of external
design with neighboring Improvements, effect of location and use of Improvements
on neighboring Sites; proper facing of main elevation with respect to nearby
streets; and conformity of the plans and specifications to the purpose and
general plan and intent of
<PAGE> 28
EXHIBIT D
COVENANTS, CONDITIONS AND RESTRICTIONS
PAGE 5 OF 7
these restrictions. Declarant shall not arbitrarily or unreasonably withhold its
approval of such plans and specifications.
4.3 If Declarant fails either to approve or to disapprove such plans
and specifications within thirty (30) days after the same have been submitted to
it, it shall be conclusively presumed that Declarant has approved said plans and
specifications, subject, however, to the restrictions contained in ARTICLE III
hereof.
4.4 Notwithstanding anything to the contrary herein contained, after
the expiration of one year from the date of issuance of a building permit by
municipal or other governmental authority for any Improvement, said Improvement
shall, in favor of purchasers and encumbrancers in good faith and for value, be
deemed to be in compliance with all provisions of this ARTICLE IV, unless actual
notice of such non-compliance or non-completion executed by Declarant shall
appear of record in the office of the County Recorder of San Mateo County,
California, or unless legal proceedings shall have been instituted to enforce
compliance or completion.
4.5 Fee. An architectural review fee shall be paid to Declarant at the
time plans are submitted for approval based upon the following schedule:
(a) When the plans submitted are prepared by an architect
licensed to practice in the State of California, the architectural
review fee shall be $100.00.
(b) In all other cases, the architectural review fee shall be
$200.00.
ARTICLE V
DURATION AND MODIFICATION AND REPEAL
5.1 Term. This Declaration, every provision hereof and every covenant,
conditions and restriction contained herein shall continue in full force and
effect for a period of sixty (60) years from the date hereof.
5.2 Termination and Modification. This Declaration or any provisions
thereof or any covenant, condition or restriction contained herein may be
terminated, extended, modified or amended as to the whole of said property or
any portion thereof, with the written consent of the Owners of sixty-five
percent (65%) in area of the Property; provided that so long as Declarant owns
at least twenty percent (20%) in area of the Property, no such termination,
extension, modification or amendment shall be effective without Declarant's
written approval. No termination, extension, modification or amendment hereof
shall be effective until a written instrument embodying the same has been
executed and recorded in the Official Records of San Mateo County.
ARTICLE VI
ENFORCEMENT
6.1 Abatement and Suit. Violation or breach of any restriction herein
contained shall give to Declarant the right to enter upon the Property upon or
as to which said violation or breach exists and summarily to abate and remove at
the expense of the Owner, Lessee or occupant thereof any structure, thing or
condition that may be or exist thereon contrary to the intent and meaning of the
provisions hereof, or to prosecute a proceeding at law or in equity against the
person or persons who have violated or are attempting to violate any of these
restrictions to enjoin or prevent them from doing so, to cause said violation to
be remedied or to recover damages for said violation. In addition, every Owner
of a Site shall have the right, in the event of violation or breach of any
restriction herein contained, to prosecute a proceeding at law or in equity
against the person or persons who have violated or are attempting to violate any
of these restrictions to
<PAGE> 29
EXHIBIT D
COVENANTS, CONDITIONS AND RESTRICTIONS
PAGE 6 OF 7
enjoin or to recover damages for said violation. All remedies provided herein or
at law or in equity shall be cumulative and not exclusive.
6.2 Deemed to Constitute a Nuisance. The result of every action or
omission whereby any restriction herein contained is violated in whole or in
part is hereby declared to be and to constitute a nuisance. Every remedy allowed
by law or equity against an Owner, either public or private, shall be applicable
against every such result and may be exercised by Declarant or by any Owner of
property subject hereto. Any costs or expenses paid or incurred by Declarant or
an Owner (collectively referred to as "Declarant" in this Section 6.2) in
abating such nuisance or prosecuting any such remedy (including all reasonable
attorneys' fees and costs of collection), together with interest thereon at the
rate of ten percent (10%) per annum, shall be a charge against the Site on which
the nuisance has occurred or is occurring, shall be a continuing lien thereon
until paid, and shall also be the personal obligation of the Owner of such Site
when such charges became due and who committed such breach or violation. In
addition to any other rights or remedies hereunder, Declarant may deliver to the
Owner of the Site on which the nuisance has occurred or is occurring and record
with the San Mateo County Recorder a certificate of notice of claim of lien. If
the violation recited in such lien claim has not been cured to Declarant's
satisfaction and any recited amounts so charged have not been paid within thirty
(30) days thereafter, Declarant or its authorized representative may foreclose
such lien by a sale conducted pursuant to Sections 2924, 2924b and 2924c of the
California Civil Code, as amended from time to time, or other statues applicable
to the exercise of powers of sales in mortgages or Deeds of Trust, or in any
other manner permitted by law. Declarant, through its authorized
representatives, may bid on and acquire any land subject to such lien at any
such foreclosure sale. If the violations recited in such lien claim are timely
cured and any recited amounts timely paid as provided above, Declarant shall
forthwith record an appropriate release of such lien at Declarant's sole
expense.
6.3 Attorneys' Fees. In any legal or equitable proceeding for the
enforcement or to restrain the violation of this Declaration or any provision
hereof, the losing party or parties shall pay the attorneys' fees of the
prevailing party or parties, in such amount as may be fixed by the court in such
proceedings.
6.4 Failure to Enforce Not a Waiver of Rights. The failure of Declarant
or any Owner to enforce any restriction herein contained shall in no event be
deemed to be a waiver of the right to do so thereafter nor of the right to
enforce any other restriction.
ARTICLE VII
MISCELLANEOUS PROVISIONS
7.1 Assignment of Declarant's Rights and Duties. Declarant may assign
any and all of its rights, powers, reservations and obligations hereunder to any
person, corporation or association. To be effective, any such assignments must
be accepted in writing by the assignee and the acceptance must be recorded in
the Official Records of San Mateo County. To the extent of the assignment, the
assignee shall have the same rights, obligations, duties and powers and be
subject to the same obligations and duties as given to and assumed by Declarant
herein. The term Declarant as used herein includes all such assignees and their
heirs, successors and assigns. Declarant may also resign as Declarant by
recording a written notice of resignation in the Official Records of San Mateo
County and mailing a copy thereof to each then Owner. The resignation shall be
effective on the date it is recorded and Declarant shall thereafter have no
further rights, powers, reservations, obligation or liabilities hereunder. If at
any time Declarant either resigns or ceases to exist without making an
assignment of its authority as Declarant, a successor Declarant may be appointed
in the same manner as this Declaration may be terminated, extended, modified or
amended under Section 2 of ARTICLE IV.
7.2 Constructive Notice and Acceptance. Every person or other entity
who now or hereafter owns or acquires any right, title or interest in or to any
portion of the Property is and shall be conclusively deemed to have consented
and agreed to every covenant, condition and restriction contained herein,
whether
<PAGE> 30
or not any reference to this Declaration is contained in the instrument by which
such person or entity acquired an interest in said property.
7.3 Waiver. Neither Declarant nor its successors or assigns shall be
liable to any Owner, Lessee, licensee or occupant of land subject to his
Declarant by reason of any mistake in judgment, negligence, nonfeasance, action
or inaction and/or for the enforcement or failure to enforce any provision of
this Declaration. Every Owner, Lessee, licensee or occupant of any of said
property by acquiring his interest therein agrees that he will not bring any
action or suit against Declarant to recover any damages or to seek equitable
relief because of any mistake in judgment, negligence, nonfeasance, action or
inaction and/or the enforcement or failure to enforce any provision of this
Declaration.
7.4 Mutuality, Reciprocity, Runs with Land. All covenants, conditions,
restrictions and agreements contained herein are made for the direct, mutual and
reciprocal benefit of each and every part and parcel of the property now or
hereafter made subject to this Declaration, shall create reciprocal rights and
obligations between the respective Owners of all parcels and privity of contract
and estate between all grantees of said parcels, their heirs, successors and
assigns, and shall, as to the Owner of each parcel, his heirs, successors and
assigns, operate as covenants running with the land for the benefit of all other
parcels.
7.5 Rights of Beneficiaries. No breach of the restrictions and other
provisions contained herein shall defeat or render invalid the lien of any Deed
of Trust now or hereafter executed upon land subject to these restrictions;
provided, however, that if any portion of said property is sold under a
foreclosure of any mortgage or under the provisions of any deed of trust, any
purchaser at such sale and his successors and assigns shall hold any and all
property so purchased subject to all of the restrictions and other provisions of
this Declaration.
7.6 Paragraph Headings. Paragraph headings, where used herein, are
inserted for convenience only and are not intended to be a part of this
Declaration or in any way to define, limit or describe the scope and intent to
the particular paragraphs to which they refer.
7.7 Effect of Invalidation. If any provision of this Declaration is
held to be invalid by any court, the invalidity of such provision shall not
affect the validity of the remaining provisions hereof.
7.8 Existing Improvements. Improvements which are completely
constructed on the date this Declaration is recorded are deemed to satisfy all
the requirements hereof.
7.9 Estoppel Certificate. At the request of an Owner, Declarant shall
supply to such Owner or any actual or potential encumbrancer or purchaser of a
Site a written certificate stating that there are no violations hereof, or if
there are any such violations, the nature of such violations. Such certificate
shall be delivered within ten (10) working days after such request by an Owner.
INITIALS:
TENANT: /s/
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LANDLORD: /s/
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<PAGE> 31
EXHIBIT E
HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE
Your cooperation in this matter is appreciated. Initially, the information
provided by you in this Hazardous Materials Disclosure Certificate is necessary
for the Landlord (identified below) to evaluate and finalize a lease agreement
with you as tenant. After a lease agreement is signed by you and the Landlord
(the "Lease Agreement"), on an annual basis in accordance with the provisions of
Section 29 of the signed Lease Agreement, you are to provide an update to the
information initially provided by you in this certificate. The information
contained in the initial Hazardous Materials Disclosure Certificate and each
annual certificate provided by you thereafter will be maintained in
confidentiality by Landlord subject to release and disclosure as required by (i)
any lenders and owners and their respective environmental consultants, (ii) any
prospective purchaser(s) of all or any portion of the property on which the
Premises are located, (iii) Landlord to defend itself or its lenders, partners
or representatives against any claim or demand, and (iv) any laws, rules,
regulations, orders, decrees, or ordinances, including, without limitation,
court orders or subpoenas. Any and all capitalized terms used herein, which are
not otherwise defined herein, shall have the same meaning ascribed to such term
in the signed Lease Agreement. Any questions regarding this certificate should
be directed to, and when completed, the certificate should be delivered to:
Landlord:
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c/o Lincoln Property Company Management Services, Inc.
101 Lincoln Centre Drive, Fourth Floor
Foster City, California 94404
Attn:
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Phone: (415) 571-2200
Name of (Prospective) Tenant:
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- ---------------------------------------------------------------------------
Mailing Address:
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- ---------------------------------------------------------------------------
Contact Person, Title and Telephone Number(s):
---------------------------
Contact Person for Hazardous Waste Materials Management and Manifests and
Telephone Number(s):
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
Address of (Prospective) Premises:
----------------------------------------
Length of (Prospective) initial Term:
-------------------------------------
- ---------------------------------------------------------------------------
1. GENERAL INFORMATION:
Describe the initial proposed operations to take place in, on, or about
the Premises, including, without limitation, principal products
processed, manufactured or assembled services and activities to be
provided or otherwise conducted. Existing tenants should describe any
proposed changes to on-going operations.
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2. USE, STORAGE AND DISPOSAL OF HAZARDOUS MATERIALS
2.1 Will any Hazardous Materials be used, generated, stored or
disposed of in, on or about the Premises? Existing tenants
should describe any Hazardous Materials which continue to be
used, generated, stored or disposed of in, on or about the
Premises.
Wastes Yes / / No / /
Chemical Products Yes / / No / /
Other Yes / / No / /
If Yes is marked, please explain:
----------------------
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2.2 If Yes is marked in Section 2.1, attach a list of any
Hazardous Materials to be used, generated, stored or disposed
of in, on or about the Premises, including the applicable
hazard class and an estimate of the quantities of such
Hazardous Materials at any given
1
<PAGE> 32
time; estimated annual throughput; the proposed location(s)
and method of storage (excluding nominal amounts of ordinary
household cleaners and janitorial supplies which are not
regulated by any Environmental Laws); and the proposed
location(s) and method of disposal for each Hazardous
Material, including, the estimated frequency, and the proposed
contractors or subcontractors. Existing tenants should attach
a list setting forth the information requested above and such
list should include actual data from on-going operations and
the identification of any variations in such information from
the prior year's certificate.
3. STORAGE TANKS AND SUMPS
3.1 Is any above or below ground storage of gasoline, diesel,
petroleum, or other Hazardous Materials in tanks or sumps
proposed in, on or about the Premises? Existing tenants should
describe any such actual or proposed activities.
Yes / / No / /
If yes, please explain:
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4. WASTE MANAGEMENT
4.1 Has your company been issued an EPA Hazardous Waste Generator
I.D. Number? Existing tenants should describe any additional
identification numbers issued since the previous certificate.
Yes / / No / /
4.2 Has your company filed a biennial or quarterly reports as a
hazardous waste generator? Existing tenants should describe
any new reports filed.
Yes / / No / /
If yes, attach a copy of the most recent report filed.
5. WASTEWATER TREATMENT AND DISCHARGE
5.1 Will your company discharge wastewater or other wastes to:
storm drain? sewer?
------ -----
surface water? no wastewater or other
wastes discharged.
------ -----
Existing tenants should indicate any actual discharges. If so,
describe the nature of any proposed or actual discharge(s).
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5.2 Will any such wastewater or waste be treated before discharge?
Yes / / No / /
If yes, describe the type of treatment proposed to be
conducted. Existing tenants should describe the actual
treatment conducted.
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6. AIR DISCHARGES
6.1 Do you plan for any air filtration systems or stacks to be
used in your company's operations in, on or about the Premises
that will discharge into the air; and will such air emissions
be monitored? Existing tenants should indicate whether or not
there are any such air filtration systems or stacks in use in,
on or about the Premises which discharge into the air and
whether such air emissions are being monitored.
Yes / / No / /
If yes, please describe:
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2
<PAGE> 33
6.2 Do you propose to operate any of the following types of
equipment, or any other equipment requiring an air emissions
permit? Existing tenants should specify any such equipment
being operated in, on or about the Premises.
Spray booth(s) Incinerator(s)
----- -----
Dip tank(s) Other (Please describe)
----- -----
Drying oven(s) No Equipment Requiring Air Permits
----- -----
If yes, please describe:
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7. HAZARDOUS MATERIALS DISCLOSURES
7.1 Has your company prepared or will it be required to prepare a
Hazardous Materials management plan ("Management Plan")
pursuant to Fire Department or other governmental or
regulatory agencies' requirements? Existing tenants should
indicate whether or not a Management Plan is required and has
been prepared.
Yes /_/ No /_/
If yes, attach a copy of the Management Plan. Existing tenants
should attach a copy of any required updates to the Management
Plan.
7.2 Are any of the Hazardous Materials, and in particular
chemicals, proposed to be used in your operations in, on or
about the Premises regulated under Proposition 65? Existing
tenants should indicate whether or not there are any new
Hazardous Materials being so used which are regulated under
Proposition 65.
Yes /_/ No /_/
If yes, please explain:
--------------------------------
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8. ENFORCEMENT ACTIONS AND COMPLAINTS
8.1 With respect to Hazardous Materials or Environmental Laws, has
your company ever been subject to any agency enforcement
actions, administrative orders, or consent decrees or has your
company received requests for information, notice or demand
letters, or any other inquiries regarding its operations?
Existing tenants should indicate whether or not any such
actions, orders or decrees have been, or are in the process of
being, undertaken or if any such requests have been received.
Yes /_/ No /_/
If yes, describe the actions, orders or decrees and any
continuing compliance obligations imposed as a result of these
actions, orders or decrees and also describe any requests,
notices or demands, and attach a copy of all such documents.
Existing tenants should describe and attach a copy of any new
actions, orders, decrees, requests, notices or demands not
already delivered to Landlord pursuant to the provisions of
Section 29 of the signed Lease Agreement.
8.2 Have there ever been, or are there now pending, any lawsuits
against your company regarding any environmental or health and
safety concerns?
Yes /_/ No /_/
If yes, describe any such lawsuits and attach copies of the
complaint(s), cross-complaint(s), pleadings and all other
documents related thereto as requested by Landlord. Existing
tenants should describe and attach a copy of any new
complaint(s), cross-complaint(s), pleadings and other related
documents not already delivered to Landlord pursuant to the
provisions of Section 29 of the signed Lease Agreement.
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3
<PAGE> 34
8.3 Have there been any problems or complaints from adjacent
tenants, owners or other neighbors at your company's current
facility with regard to environmental or health and safety
concerns? Existing tenants should indicate whether or not
there have been any such problems or complaints from adjacent
tenants, owners or other neighbors at, about or near the
Premises.
Yes /_/ No /_/
If yes, please describe. Existing tenants should describe any
such problems or complaints not already disclosed to Landlord
under the provisions of the signed Lease Agreement.
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9. PERMITS AND LICENSES
9.1 Attach copies of all Hazardous Materials permits and licenses
issued to your company with respect to its proposed operations
in, on or about the Premises, including, without limitation,
any wastewater discharge permits, air emissions permits, and
use permits or approvals. Existing tenants should attach
copies of any new permits and licenses as well as any renewals
of permits or licenses previously issued.
The undersigned hereby acknowledges and agrees that (A) this Hazardous Materials
Disclosure Certificate is being delivered in connection with, and as required
by, Landlord in connection with the evaluation and finalization of a Lease
Agreement and will be attached thereto as an exhibit; (B) that this Hazardous
Materials Disclosure Certificate is being delivered in accordance with, and as
required by, the provisions of Section 29 of the Lease Agreement; and (C) that
Tenant shall have and retain full and complete responsibility and liability with
respect to any of the Hazardous Materials disclosed in the HazMat Certificate
notwithstanding Landlord's/Tenant's receipt and/or approval of such certificate.
Tenant further agrees that none of the following described acts or events shall
be construed or otherwise interpreted as either (a) excusing, diminishing or
otherwise limiting Tenant from the requirement to fully and faithfully perform
its obligations under the Lease with respect to Hazardous Materials, including,
without limitation, Tenant's indemnification of the Indemnitees and compliance
with all Environmental Laws, or (b) imposing upon Landlord, directly or
indirectly, any duty or liability with respect to any such Hazardous Materials,
including, without limitation, any duty on Landlord to investigate or otherwise
verify the accuracy of the representations and statements made therein or to
ensure that Tenant is in compliance with all Environmental Laws; (i) the
delivery of such certificate to Landlord and/or Landlord's acceptance of such
certificate, (ii) Landlord's review and approval of such certificate, (iii)
Landlord's failure to obtain such certificate from Tenant at any time, or (iv)
Landlord's actual or constructive knowledge of the types and quantities of
Hazardous Materials being used, stored, generated, disposed of or transported on
or about the Premises by Tenant or Tenant's Representatives. Notwithstanding the
foregoing or anything to the contrary contained herein, the undersigned
acknowledges and agrees that Landlord and its partners, lenders and
representatives may, and will, rely upon the statements, representations,
warranties, and certifications made herein and the truthfulness thereof in
entering into the Lease Agreement and the continuance thereof throughout the
term, and any renewals thereof, of the Lease Agreement.
I (print name)________ , acting with full authority to bind the (proposed)
Tenant and on behalf of the (proposed) Tenant, certify, represent and warrant
that the information contained in this certificate is true and correct.
(PROSPECTIVE) TENANT:
By:
---------------------
Title:
---------------------
Date:
---------------------
INITIALS:
TENANT:
-------
LANDLORD: /s/
-------
<PAGE> 35
EXHIBIT G - SIGN CRITERIA
PAGE 1 OF 1
LEASE DATED MAY 1, 1995, BETWEEN
LIPOSOME TECHNOLOGY, INCORPORATED,
A CALIFORNIA CORPORATION
("TENANT"),
AND
LINCOLN MENLO III ASSOCIATES LIMITED,
A CALIFORNIA LIMITED PARTNERSHIP
("LANDLORD")
INITIALS:
TENANT: /s/
-------
LANDLORD: /s/
-------
<PAGE> 36
ADDENDUM 1
EARLY OCCUPANCY AGREEMENT
PAGE 1 OF 1
LEASE DATED MAY 1, 1995, BETWEEN
LIPOSOME TECHNOLOGY, INCORPORATED,
A CALIFORNIA CORPORATION
("TENANT"),
AND
LINCOLN MENLO III ASSOCIATES LIMITED,
A CALIFORNIA LIMITED PARTNERSHIP
("LANDLORD")
Reference is made to that certain Lease Agreement dated May 15, 1995
(the "Lease") by and between LIPOSOME TECHNOLOGY, INCORPORATED, A CALIFORNIA
CORPORATION ("TENANT") AND LINCOLN MENLO III ASSOCIATES LIMITED, A CALIFORNIA
LIMITED PARTNERSHIP ("LANDLORD") of approximately 11,160 square feet of space
located at 1180 Hamilton Court, Menlo Park, California 94025 (the "Premises").
All defined terms used in this Early Occupancy Agreement ("Agreement") not
defined herein shall have the same meaning and definition given them in the
Lease.
Tenant may occupy the Premises from the date of full execution of this
Agreement and the Lease until the Commencement Date ("Early Occupancy Period")
solely for the purposes of allowing Tenant to store its inventory and products,
and for no other purpose, subject to the following terms and conditions:
All terms and conditions of the Lease shall be in full force and effect
during the Early Occupancy Period and Tenant shall perform all the terms and
conditions of the above-referenced Lease, including, but not limited to,
maintaining the insurance required by Paragraph 12 of the Lease prior to taking
possession under this Agreement; provided, however, during the Early Occupancy
Period Tenant shall not be obligated to pay Base Rent or Additional Rent.
Tenant shall be solely responsible for the security of its property or
equipment stored in the Premises during the Early Occupancy Period. In
consideration for Landlord permitting Tenant to occupy the Premises pursuant to
the terms of this Agreement, Tenant shall indemnify and hold Landlord harmless
from and against any and all claims arising from the use of the Premises or any
portion thereof, by Tenant or Tenant's agents, employees, contractors or
invitees (collectively "Tenant's Representatives") or from any activity
permitted or suffered by Tenant or Tenant's Representatives in or about the
Premises and shall further indemnify and hold Landlord harmless from and against
any and all claims arising from any breach or default in the performance of any
obligation on Tenant's part to be performed under the terms of this Agreement,
or arising from any act or negligence of Tenant or Tenant's Representatives, and
from and against any and all costs, attorney's fees, expense and liabilities
incurred in connection with such claim or any action or proceeding brought
thereon. In case any action or proceeding be brought against Landlord by reason
of any such claim, Tenant, upon notice from Landlord, shall defend the same at
Tenant's expense by counsel reasonably satisfactory to Landlord; provided,
however, that Tenant shall not be liable for damage or injury occasioned by the
sole and active negligence or willful misconduct of Landlord and its designated
agents or employees, unless covered by insurance Tenant is required by this
Agreement to maintain.
In no event shall Landlord be liable for any claims, damages,
including, but not limited to, consequential damages or losses of any nature
incurred or suffered by Tenant or Tenant's Representatives, or any other person
in or about the Premises, arising from or in connection with this Agreement or
the use of the Premises (including any claims, damages or losses arising from
any act or neglect of any other tenant of the Building or other persons
including construction workers hired by Landlord), except to the extent such
claims, damages or losses arise solely from the sole and active negligence or
willful misconduct of Landlord (provided, however, in no event shall Landlord be
liable for consequential damages).
TENANT:
Dated: Liposome Technology, Incorporated,
------- a Delaware corporation
By: /s/ Donald Stewart
-------------------------
Its: Vice President, Finance
-------------------------
Date: 5/10/95
-------------------------
LANDLORD:
LINCOLN MENLO III ASSOCIATES LIMITED,
a California limited partnership
By: Lincoln Property Company Management Services, Inc.,
As Manager and Agent for Owner
By: /s/
-----------------------
Vice President
Date: 5-30-95
-----------------------
<PAGE> 1
EXHIBIT 10.2.4
LEASE AGREEMENT
(NET)
BASIC LEASE INFORMATION
<TABLE>
<S> <C>
LEASE DATE: February 1, 1996
LANDLORD: LINCOLN MENLO VI,
A CALIFORNIA LIMITED PARTNERSHIP
LANDLORD'S ADDRESS: c/o Lincoln Property Company Management Services, Inc.
101 Lincoln Centre Drive, Fourth Floor
Foster City, California 94404-1167
TENANT: SEQUUS PHARMACEUTICALS, INC.,
A DELAWARE CORPORATION
TENANT'S ADDRESS: 960 Hamilton Court
Menlo Park, CA 94025
PREMISES: Approximately 31,985 rentable square feet as shown on Exhibit A, as the same
may be adjusted pursuant to Section 1.
PREMISES ADDRESS: 1360 Willow Road, Suites 101, 201, 203, and 204
Menlo Park, California 94025
BUILDING (S): 49,920 square feet
LOT (BUILDING'S TAX PARCEL): APN 055-440-340
PARK: WILLOW PARK 930,368 square feet
PHASE VI (BUILDING S AND BUILDING T): 99,840 square feet
TERM: [February]March 1, 1996 ("Commencement Date"), through
April 30, 2003 ("Expiration Date")
BASE RENT (Paragraph 3): Thirty-one thousand nine hundred eighty-five and 00/100 Dollars
($31,985) per month
ADJUSTMENTS
TO BASE RENT: Effective as of November 1, 1997 and through the balance of the Term the
monthly Base Rent shall be thirty-eight thousand three hundred eighty-two and
00/100 Dollars ($38,382.00), as further adjusted pursuant to the provisions of
Section 1 below
SECURITY DEPOSIT
(Paragraph 4.1): Thirty thousand and 00/100 Dollars ($30,000.00)
[CLEANING DEPOSIT
(Paragraph 4.2): ______________________________________________Dollars ($_________)]
<S> <C>
*TENANT'S SHARE OF OPERATING EXPENSES (Paragraph 6.1): 32.04% of Phase VI
*TENANT'S SHARE OF TAX EXPENSES (Paragraph 6.2): 64.07% of the Building/Lot
*TENANT'S SHARE OF COMMON AREA UTILITY COSTS (Paragraph 7): 32.04% of Phase VI
*The amount of Tenant's Share of the expenses as referenced above shall be subject to modification as set forth
in this Lease.
<S> <C>
PERMITTED USES: General and administrative office, research and development and manufacturing
of pharmaceutical products but only to the extent permitted by the City of
Menlo Park and any and all entities having jurisdiction.
UNRESERVED
PARKING SPACES: One hundred twenty-eight (128) nonexclusive and undesignated spaces, as the
same may be increased pursuant to Section 1.6.
BROKER (Paragraph 38): CB Commercial - Gregg M. Domanico and Rico Cheung
EXHIBITS: Exhibit A - Premises, Building, Lot and/or Park
Exhibit B - Tenant Improvements
Exhibit C - Rules and Regulations
Exhibit D - Covenants, Conditions and Restrictions
Exhibit E - Hazardous Materials Disclosure Certificate - Example
Exhibit F - Change of Commencement Date - Example
Exhibit G - Tenant's Initial Hazardous Materials Disclosure Certificate
Exhibit H - Waiver by Landlord - Example
ADDENDA: Addendum 1: Option to Expand
Addendum 2: Right of First Offer
Addendum 3: [First] Options to Extend the Lease Term
[Addendum 4: Second Option to Extend the Lease]
</TABLE>
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enclosed in brackets "[" and "]" in the electronic format.
1
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
- ------- ----
<S> <C>
1. PREMISES.................................................................. 3
2. ADJUSTMENT OF COMMENCEMENT DATE; CONDITION OF THE PREMISES................ 3
3. RENT...................................................................... 4
4. SECURITY DEPOSIT [AND CLEANING DEPOSIT]................................... 5
5. TENANT IMPROVEMENTS....................................................... 5
6. ADDITIONAL RENT........................................................... 5
7. UTILITIES................................................................. 9
8. LATE CHARGES............................................................. 9
9. USE OF PREMISES.......................................................... 10
10. ALTERATIONS AND ADDITIONS; AND SURRENDER OF PREMISES..................... 11
11. REPAIRS AND MAINTENANCE.................................................. 11
12. INSURANCE................................................................ 12
13. WAIVER OF SUBROGATION.................................................... 13
14. LIMITATION OF LIABILITY AND INDEMNITY.................................... 14
15. ASSIGNMENT AND SUBLEASING................................................ 14
16. AD VALOREM TAXES......................................................... 15
17. SUBORDINATION............................................................ 16
18. RIGHT OF ENTRY........................................................... 16
19. ESTOPPEL CERTIFICATE..................................................... 16
20. TENANT'S DEFAULT......................................................... 17
21. REMEDIES FOR TENANT'S DEFAULT............................................ 18
22. HOLDING OVER............................................................. 19
23. LANDLORD'S DEFAULT....................................................... 19
24. PARKING.................................................................. 19
25. SALE OF PREMISES......................................................... 19
26. WAIVER................................................................... 19
27. CASUALTY DAMAGE.......................................................... 19
28. CONDEMNATION............................................................. 22
29. ENVIRONMENTAL MATTERS/HAZARDOUS MATERIALS................................ 22
30. FINANCIAL STATEMENTS..................................................... 24
31. GENERAL PROVISIONS....................................................... 24
32. SIGNS.................................................................... 26
33. MORTGAGEE PROTECTION..................................................... 26
34. QUITCLAIM................................................................ 26
35. MODIFICATIONS FOR LENDER................................................. 26
36. WARRANTIES OF TENANT..................................................... 27
37. COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT.......................... 27
38. BROKERAGE COMMISSION..................................................... 27
39. QUIET ENJOYMENT.......................................................... 27
40. LANDLORD'S ABILITY TO PERFORM TENANT'S UNPERFORMED OBLIGATIONS........... 28
41. TENANT'S EQUIPMENT FINANCING............................................. 28
</TABLE>
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enclosed in brackets "[" and "]" in the electronic format.
2
<PAGE> 3
LEASE AGREEMENT
DATE: This Lease is made and entered into as of the Lease Date
defined on Page 1. The Basic Lease Information set forth on
Page 1 and this Lease are and shall be construed as a single
instrument.
1. PREMISES: Landlord hereby leases the Premises to Tenant upon the terms and
conditions contained herein. Landlord hereby grants to Tenant a revocable
license for the right to use, on a non-exclusive basis, parking areas and
ancillary facilities located within the Common Area of the Park, subject to the
terms of this Lease. Landlord and Tenant hereby agree that for purposes of this
Lease, as of the Lease Date, the rentable square footage area of the Premises,
the Building, the Lot and the Park shall be deemed to be the number of rentable
square feet set forth in the Basic Lease Information on Page 1 except that as of
December 15, 1996 the Premises as referenced on Page 1 of the Lease shall
include the additional approximately 3,197 square foot space situated at 1360
Willow Road, Suite 205, Menlo Park, California (the "Additional Premises") for a
total of 35,182 square feet comprising the Premises. Landlord shall lease said
Additional Premises to Tenant under the following conditions:
1.1 As of January 1, 1997, the Base Rent as set forth on Page 1 of this
Lease shall increase by three thousand one hundred ninety-seven and 00/100
dollars ($3,197.00) per month for a total monthly Base Rent of thirty-five
thousand one hundred eighty-two and 00/100 dollars ($35,182.00).
1.2 As of November 1, 1997, and through the balance of the Term the Base
Rent as set forth on Page 1 of this Lease shall increase by three thousand eight
hundred thirty-six and 40/100 dollars ($3,836.40) per month for a total monthly
Base Rent of forty-two thousand two hundred eighteen and 40/100 dollars
($42,218.40).
1.3 As of January 1, 1997, Tenant's Share of Operating Expenses as set
forth on Page 1 on this Lease shall increase by 3.20% making Tenant's Share of
Operating Expenses be 35.24%.
1.4 As of January 1, 1997, Tenant's Share of Tax Expenses as set forth
on Page 1 of this Lease shall increase by 6.40% making Tenant's Share of Tax
Expenses be 70.47%.
1.5 As of January 1, 1997, Tenant's Share of Common Area Utility Costs
as set forth on page 1 of this Lease shall increase by 3.20% making Tenant's
Share of Common Area Utility Costs be 35.24%.
1.6 As of December 15, 1996, the number of Unreserved Parking Spaces as
set forth on Page 1 of this Lease shall increase by 13 for a total of 141
Unreserved parking Spaces.
If Landlord cannot deliver possession of the Additional Premises to Tenant by
December 15, 1996, Landlord shall not be subject to any liability nor shall the
validity of the Lease be affected; provided, the dates on which the increases in
Base Rent, Tenant's Share of Operating Expenses, Tenant's Share of Tax Expenses,
Tenant's Share of Common Area Utility Costs and Unreserved Parking Spaces as set
forth in Sections 1.1, 1.3, 1.4, 1.5 and 1.6 above shall be extended
commensurately by a period of time equal to the period of delay in delivery of
possession of the Additional Premises to Tenant beyond December 15, 1996. As
soon as practicable after the parties know the actual date on which such
possession is delivered to Tenant and if such date is a date other than December
15, 1996, then the parties shall execute a written amendment to this Lease
evidencing same. Tenant further agrees that the number of rentable square feet
of the Premises, the Building, the Lot and the Park may subsequently change
after the Lease Date commensurate with any modifications to any of the
foregoing.
2. CONDITION TO EFFECTIVENESS OF LEASE; ADJUSTMENT OF COMMENCEMENT DATE; AND
CONDITION OF THE PREMISES: This Lease shall not be effective as to, or against,
Landlord and Tenant until and unless the following conditions precedent
(collectively, the "Conditions Precedent") are either satisfied to Landlord's
reasonable satisfaction or the satisfaction of some or all of the Conditions
Precedent are waived in writing by Landlord: (i) the current tenant of the
Premises, namely Digidesign, Inc. (the "Current Tenant"), executes and delivers
to Lessor an agreement to terminate its existing lease with respect to the
Premises, in a form reasonably acceptable to Landlord, by February 1, 1996 (the
"Modification Agreement"); (ii) the Current Tenant vacates the Premises and
surrenders possession of the Premises to Landlord by 12:01 a.m. (Pacific Time)
on February 15, 1996, but in no event later than 12:01 a.m. (Pacific Time) on
April 15, 1996; (iii) Tenant executes and delivers to Landlord an original of
the Modification Agreement by February 1, 1996; and (iv) Tenant timely makes all
payments required to be made by it pursuant to the provisions of the
Modification Agreement. If any or all of the Conditions Precedent are not
satisfied as required and to the reasonable satisfaction of Landlord, then
Landlord may (a) terminate this Lease or (b) extend the Commencement Date by a
period of time commensurate with the time period the Current Tenant is delayed
in vacating and surrendering possession of the Premises to Landlord beyond the
date of February 15, 1996, at Landlord's option; provided, however,
notwithstanding the foregoing or anything to the contrary contained herein, if
at any time prior to April 14, 1996 (A) the Current Tenant executes and delivers
the Modification Agreement to Landlord,
3
<PAGE> 4
and (B) the Conditions Precedent set forth in subitems (iii) and (iv) above are
satisfied to Landlord's reasonable satisfaction, then Landlord will not have the
right to terminate this Lease pursuant to subitem (a) above. However, if the
Current Tenant fails to vacate and surrender possession of the Premises to
Landlord by April 15, 1996, then either Tenant or Landlord may terminate this
Lease by delivering written notice thereof to the other party on or before April
25, 1996. If either party terminates this Lease neither Landlord nor Tenant
shall have any further obligations or liability under this Lease. If Landlord so
permissibly elects to extend the Commencement Date, Landlord shall notify Tenant
of such and promptly after the actual commencement date is known by the parties,
Landlord and Tenant shall execute a written amendment to the Lease confirming
such new commencement date (the "Extended Commencement Date"). Tenant and
Landlord hereby acknowledge and agree that the Conditions Precedent, other than
the condition set forth in subitem (ii) above, are intended to be solely for the
benefit of Landlord, thus such Conditions Precedent (except for subitem (ii)
above) may only be waived or considered satisfied solely by Landlord. Subject to
the foregoing provisions of this Section 2, if Landlord cannot deliver
possession of the Premises on the Commencement Date, Landlord shall not be
subject to any liability nor shall the validity of the Lease be affected;
provided the Lease term and the obligation to pay Rent shall commence on the
date possession is tendered and the Expiration Date shall be extended by a
period of time equal to the period [computed] elapsed from the Commencement Date
to the [date possession is tendered by Landlord to Tenant] Extended Commencement
Date. In the event the commencement date and/or the expiration date of this
Lease is other than the Commencement Date and/or Expiration Date provided on
Page 1, as the case may be, Landlord and Tenant shall execute a written
amendment to this Lease, substantially in the form of Exhibit F hereto, wherein
the parties shall specify the actual commencement date, expiration date and the
date on which Tenant is to commence paying Rent. In the event that Landlord
permits Tenant to occupy the Premises prior to the Commencement Date, such
occupancy shall be at Tenant's sole risk and subject to all the provisions of
this Lease, including, but not limited to, the requirement to pay Rent and the
Security Deposit, and to obtain the insurance required pursuant to this Lease
and to deliver insurance certificates as required herein, provided, however,
that Rent due for any partial month of occupancy by Tenant shall be prorated
according to the number of days Tenant occupies the Premises prior to the
Commencement Date, based upon a 30-day month. In addition to the foregoing,
Landlord shall have the right to impose such additional conditions on Tenant's
early entry as Landlord shall deem appropriate. By taking possession of the
Premises, Tenant shall be deemed to have accepted the Premises in a good, clean
and completed condition and state of repair, in compliance with all applicable
laws, codes, regulations, administrative orders and ordinances, and subject to
all matters of record. Tenant hereby acknowledges and agrees that neither
Landlord nor Landlord's agents or representatives has made any representations
or warranties as to the suitability, safety or fitness of the Premises for the
conduct of Tenant's business, Tenant's intended use of the Premises or for any
other purpose, and that neither Landlord nor Landlord's agents or
representatives has agreed to undertake any alterations or construct any Tenant
Improvements to the Premises except as expressly provided in this Lease. [Tenant
agrees that at anytime before or during the term of this Lease, Landlord shall
have the right to relocate Tenant from the Premises described herein to other
space within the Park on substantially the same terms and conditions of this
Lease provided the other space is of comparable size.]
3. RENT: On the date that Tenant executes this Lease, Tenant shall deliver to
Landlord the original executed Lease, [the] one month's Base Rent (which shall
be applied against the Rent payable for the first month Tenant is required to
pay Base Rent), the Security Deposit, [the Cleaning Deposit,] and all insurance
certificates evidencing the insurance required to be obtained by Tenant under
Section 12 of this Lease. Tenant agrees to pay Landlord, without prior notice or
demand, or abatement, offset, deduction or claim, the Base Rent described on
Page 1, payable in advance at Landlord's address shown on Page 1 on the first
day of each month throughout the term of the Lease. In addition to the Base Rent
set forth on Page 1, Tenant shall pay Landlord in advance and on the first (1st)
day of each month throughout the term of this Lease (including any extensions of
such term), as Additional Rent Tenant's share, as set forth on Page 1, of
Operating Expenses, Tax Expenses, Common Area Utility Costs, and Utility
Expenses, and Administrative Expenses all in the manner as specified in Sections
6.1, 6.2, 6.3, 6.4 and 7 of this Lease, respectively. [Additionally, Tenant
shall pay to Landlord as Additional Rent hereunder, immediately on Landlord's
demand therefor, any and all costs and expenses incurred by Landlord to enforce
the provisions of this Lease, including, but not limited to, costs associated
with any proposed assignment or subletting of all or any portion of the Premises
by Tenant, costs associated with the delivery of notices, delivery and
recordation of notice(s) of default, attorneys' fees, expert fees, court costs
and filing fees (collectively, the "Enforcement Expenses").] The term "Rent"
whenever used herein refers to the aggregate of all these amounts. If Landlord
permits Tenant to occupy the Premises without requiring Tenant to pay rental
payments for a period of time, the waiver of the requirement to pay rental
payments shall only apply to waiver of the Base Rent and Tenant shall otherwise
perform all other obligations of Tenant hereunder, including, but not limited to
paying to Landlord any and all amounts considered Additional Rent, such as
Tenant's share of Operating Expenses, Tax Expenses, Common Area Utility Costs,
and Utility Expenses, and Administrative Expenses. If, at any time, Tenant is in
default of or otherwise breaches any term, condition or provision of this Lease,
any such waiver by Landlord of Tenant's requirement to pay rental payments shall
be null and void and Tenant shall immediately pay to Landlord all rental
payments waived by Landlord. The Rent for any fractional part of a calendar
month at the commencement or termination of the Lease term shall be a prorated
amount of the Rent for a full calendar month based upon a thirty (30) day month.
The prorated Rent shall be paid on the
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Commencement Date of the Lease and the first day of the calendar month in which
the [date of termination occurs] Lease terminates, as the case may be.
4. SECURITY DEPOSIT [AND CLEANING DEPOSIT]:
4.1 SECURITY DEPOSIT: Upon Tenant's execution of this Lease, Tenant
shall deliver to Landlord, as a Security Deposit for the performance by Tenant
of its obligations under this Lease, the amount described on Page 1. If Tenant
is in default, Landlord may, but without obligation to do so, use the Security
Deposit, or any portion thereof, to cure the default or to compensate Landlord
for all damages sustained by Landlord resulting from Tenant's default under the
Lease as set forth in Section 20, [including, but not limited to the Enforcement
Expenses]. Tenant shall, immediately on demand, pay to Landlord a sum equal to
the portion of the Security Deposit so applied or used so as to replenish the
amount of the Security Deposit held to increase such deposit to the amount
initially deposited with Landlord. Concurrently with any increase in the Base
Rent, Tenant shall deliver to Landlord an amount equal to such increase, which
amount shall be added to the Security Deposit being held by Landlord and be
deemed a part of such Security Deposit thereafter. At any time after Tenant has
defaulted hereunder, Landlord may require [an] a reasonable increase in the
amount of the Security Deposit required hereunder for the then balance of the
Lease term and Tenant shall, immediately on demand, pay to Landlord additional
sums in the amount of such reasonable increase. As soon as practicable after the
termination of this Lease, Landlord shall return the Security Deposit to Tenant,
less such amounts as are reasonably necessary, as determined solely and
reasonably by Landlord, to remedy Tenant's default(s) hereunder or to otherwise
restore the Premises to a clean and safe condition, reasonable wear and tear
excepted. If [the] such cost to restore the Premises exceeds the amount of the
Security Deposit, Tenant shall promptly [deliver] pay to Landlord [any and all]
the amount of such excess sums as reasonably determined by Landlord. Landlord
shall not be required to keep the Security Deposit separate from other funds,
and, unless otherwise required by law, Tenant shall not be entitled to interest
on the Security Deposit. In no event or circumstance shall Tenant have the right
to any use of the Security Deposit and, specifically, Tenant may not use the
Security Deposit as a credit or to otherwise offset any payments required
hereunder, including, but not limited to, Rent or any portion thereof.
[4.2 CLEANING DEPOSIT: Upon Tenant's execution of this Lease, Tenant
shall deliver to Landlord, as a Cleaning Deposit for the performance by Tenant
of its obligations under this Lease including, but not limited to, Section 11
below, the amount described on Page 1. The Cleaning Deposit is to be used for
purposes relating to cleaning up the Premises and the area adjacent to the
Premises, to the extent such cleaning up is required due to Tenant's or its
representatives, employees, invitees or contractors' use of the area adjacent to
the Premises, to the reasonable satisfaction of Landlord. If Tenant is in
default, Landlord may, but without obligation to do so, use the Cleaning
Deposit, or any portion thereof, to cure the default or to compensate Landlord
for all damages sustained by Landlord resulting from Tenant's default,
including, but not limited to the Enforcement Expenses. Tenant shall,
immediately on demand, pay to Landlord a sum equal to the portion of the
Cleaning Deposit so applied or used so as to replenish the amount of the
Cleaning Deposit to increase such deposit to the amount initially deposited with
Landlord. At anytime after Tenant has defaulted hereunder, Landlord may require
an increase in the amount of the Cleaning Deposit required hereunder for the
then balance of the Lease term and Tenant shall, immediately on demand, pay to
Landlord additional sums in the amount of such increase. As soon as practicable
after the termination of this Lease, Landlord shall return the Cleaning Deposit
to Tenant, less such amounts as are reasonably necessary to remedy Tenant's
default(s) hereunder or to otherwise restore the Premises to a clean and safe
condition as determined by Landlord. Landlord shall not be required to keep the
Cleaning Deposit separate from other funds, and, unless otherwise required by
law, Tenant shall not be entitled to interest on the Cleaning Deposit. In no
event or circumstance shall Tenant have the right to any use of the Cleaning
Deposit and, specifically, Tenant may not use the Cleaning Deposit as a credit
or to otherwise offset any payments required hereunder, including, but not
limited to, Rent or any portion thereof.]
5. TENANT IMPROVEMENTS: Tenant hereby accepts the Premises in its current "as
is" condition unless otherwise specified in Exhibit B, attached hereto and
incorporated herein by this reference. If so specified in Exhibit B hereto,
Landlord or Tenant, as the case may be, shall install the improvements ("Tenant
Improvements") on the Premises as described and in accordance with the terms,
conditions, criteria and provisions set forth in Exhibit B, attached and
incorporated herein by this reference. Tenant acknowledges that neither Landlord
nor any of Landlord's agents, representatives or employees has made any
representations as to the suitability or fitness of the Premises for the conduct
of Tenant's business, including, without limitation, any storage incidental
thereto, or for any other purpose, and that neither Landlord nor any of
Landlord's agents, representatives or employees has agreed to undertake any
alterations or construct any Tenant Improvements to the Premises except as
expressly provided in Exhibit B to this Lease.
6. ADDITIONAL RENT : The costs and expenses described in this Section 6 and all
other sums, charges, costs and expenses specified in this Lease other than Base
Rent, including, but not limited to, Utility Expenses, Tenant's share of Common
Area Utility Costs, [the Utility Expenses] and Late Charges [and]
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[Enforcement Expenses] are to be paid by Tenant to Landlord as additional rent
(collectively, "Additional Rent").
6.1 OPERATING EXPENSES: In addition to the Base Rent set forth in
Section 3, Tenant shall pay its share, which is defined on Page 1, of all
Operating Expenses attributable to Phase VI of the Park as Additional Rent. The
term "Operating Expenses" as used herein shall mean the total amounts paid or
payable by Landlord in connection with the ownership, maintenance, repair and
operation of the Premises, the Building and the Lot, and where applicable, of
the Park referred to on Page 1. The amount of Tenant's share of Operating
Expenses shall be reviewed from time to time by Landlord and shall be subject to
modification by Landlord as reasonably determined by Landlord. These Operating
Expenses may include, but are not limited to:
6.1.1 Landlord's cost of repairs to, and maintenance of, the
roof (excluding the replacement of the structural portions of the roof),
the roof membrane and the exterior walls of the Building;
6.1.2 Landlord's cost of maintaining the outside paved area,
landscaping and other common areas for the Park. The term "Common Area"
shall mean all areas and facilities within the Park exclusive of the
Premises and the other portions of the Park leased exclusively to other
tenants. The Common Area includes, but is not limited to, interior
lobbies, mezzanines, parking areas, access and perimeter roads,
sidewalks, rail spurs, landscaped areas and similar areas and
facilities;
6.1.3 Landlord's annual cost of insurance insuring against
fire and extended coverage (including, if Landlord elects, "all risk"
coverage) and all other insurance, including, but not limited to,
earthquake, flood and/or surface water endorsements for the Building,
the Lot and the Park (including the Common Area), rental value insurance
against loss of Rent in an amount equal to the amount of Rent for a
period of at least six (6) months commencing on the date of loss, and
subject to the provisions of Section 27 below, any deductible;
6.1.4 Landlord's cost of modifications to the Building, the
Common Area and/or the Park occasioned by any rules, laws or regulations
effective subsequent to the date on which the Building was originally
constructed; provided, however if there are modifications necessitated
by any such rules, laws or regulations or there are replacement
improvements which are required to be made to the Building, the Common
Area and/or the Park which are in the nature of capital improvements,
then the costs of such modifications and replacement improvements shall
be amortized over a reasonable period which shall not be less than the
lesser of fifteen (15) years or the reasonably estimated useful life of
the modifications or replacement improvements in question (at an
interest rate as reasonably determined by Landlord) and Tenant shall pay
its pro rata share of the monthly amortized portion of such costs
(including interest charges) as part of the Operating Expenses;
6.1.5 Landlord's cost of modifications to the Building, the
Common Area and/or the Park occasioned by any rules, laws or regulations
arising from Tenant's particular use of the Premises regardless of when
such rules, laws or regulations became effective;
6.1.6 If Landlord elects to so procure, Landlord's cost of
preventative maintenance, and repair contracts including, but not
limited to, contracts for elevator systems and heating, ventilation and
air conditioning systems, lifts for disabled persons, and trash or
refuse collection;
6.1.7 Landlord's cost of security and fire protection services
for the Building and/or the Park, as the case may be, if in Landlord's
sole discretion such services are provided;
6.1.8 Landlord's establishment of reasonable reserves for
replacements and/or repairs of Common Area improvements, equipment and
supplies;
6.1.9 Landlord's cost for the maintenance and repair of any
rail spur and rail crossing, and for the creation and negotiation of,
and pursuant to, any rail spur or track agreements, licenses, easements
or other similar undertakings;
6.1.10 Landlord's cost of supplies, equipment, rental
equipment and other similar items used in the operation and/or
maintenance of the Park; [and]
6.1.11 Landlord's cost for the repairs and maintenance items
set forth in Section 11.2 below; and
6.1.12 Landlord's cost of janitorial services and supplies for
the Common Areas of Phase VI of the Park.
6.2 TAX EXPENSES: In addition to the Base Rent set forth in Section 3,
Tenant shall pay its share, which is defined on Page 1, of all real property
taxes applicable to the land and improvements included within the Lot on which
the Premises are situated and one hundred percent (100%) of all
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enclosed in brackets "[" and "]" in the electronic format.
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personal property taxes now or hereafter assessed or levied against the Premises
[or] and attributable to Tenant's personal property. The amount of Tenant's
share of Tax Expenses shall be reviewed from time to time by Landlord and shall
be subject to modification by Landlord as reasonably determined by Landlord.
Tenant shall also pay one hundred percent (100%) of any increase in real
property taxes attributable, in Landlord's sole discretion, to any and all
alterations, Tenant Improvements or other improvements of any kind, which are
above standard improvements customarily installed for similar buildings located
within the Building or the Park (as applicable), whatsoever placed in, on or
about the Premises for the benefit of, at the request of, or by Tenant. The term
"Tax Expenses" shall mean and include, without limitation, any form of tax and
assessment (general, special, supplemental, ordinary or extraordinary),
commercial rental tax, payments under any improvement bond or bonds, license,
rental tax, transaction tax, levy, or penalty imposed by authority having the
direct or indirect power of tax (including any city, county, state or federal
government, or any school, agricultural, lighting, drainage or other improvement
district thereof) as against any legal or equitable interest of Landlord in the
Premises, the Building, the Lot or the Park, as against Landlord's right to rent
or other income therefrom, or as against Landlord's business of leasing the
Premises or the occupancy of Tenant or any other tax, fee, or excise, however
described, including, but not limited to, any value added tax, or any tax
imposed in substitution (partially or totally) of any tax previously included
within the definition of real property taxes, or any additional tax the nature
of which was previously included within the definition of real property taxes.
The term "Tax Expenses" shall not include any franchise, estate, inheritance,
net income, or excess profits tax imposed upon Landlord. The parties acknowledge
and agree that as of the Lease Date Landlord is currently employing a firm that
specializes in reviewing and possibly contesting taxes and assessments levied
against the Phase VI of the Park and other properties (the "Tax Consultant"). If
at any time during the term of this Lease Landlord permanently ceases to employ
the Tax Consultant or another firm to provide services similar to those being
provided by the Tax Consultant with respect to Phase VI of the Park, Tenant
shall thereafter have the following right to contest the Tax Expenses payable by
Tenant hereunder and any other taxes payable by Tenant with respect to the
Premises. If Tenant is not in default of any of the terms, provisions or
obligations under this Lease and Tenant has delivered to Landlord at least sixty
(60) days prior written notice of Tenant's intention to initiate such a
proceeding, Tenant shall have the right to contest the amount or validity of the
Tax Expenses payable by Tenant hereunder and any other taxes payable by Tenant
with respect to the Premises by appropriate administrative and legal proceedings
brought either in its own name, Landlord's name or jointly with Landlord. Any
such proceeding shall be undertaken by counsel selected by Tenant and reasonably
approved by Landlord, and if Tenant deems it appropriate, such measures shall be
taken in the name of Tenant. Landlord hereby agrees that it will promptly upon
receipt of a written request therefor from Tenant (but in no event later than
forty-five (45) business days after Landlord's receipt of such written request)
furnish Tenant copies of all notices of assessment of Tax Expenses. Landlord
shall execute and deliver to Tenant whatever documents may be reasonably
necessary or proper to permit Tenant to so contest such Tax Expenses or which
may be necessary to secure payment of any refund which may result from any such
proceedings; provided, however, if Tenant makes such contest Tenant shall be
solely responsible for any and all penalties and liabilities arising therefrom
as well as for providing such security as Landlord may reasonably request in
connection with any such contest. Any such proceeding shall be undertaken at the
sole cost and expense of Tenant and any refund resulting therefrom shall, only
to the extent of the Tax Expenses payable by Tenant hereunder and any other
taxes payable by Tenant with respect to the Premises actually paid by Tenant to
Landlord for the fiscal tax year or years being contested, belong solely to
Tenant to the extent such refund is attributable to the Premises and for a
period concurrent with the term of the Lease (otherwise an appropriate
apportionment shall be made), and any excess amount of any such refund shall
belong solely to Landlord. Tenant shall indemnify, defend and hold Landlord, its
partners, lenders, representatives, successors and assigns harmless from any and
all claims, liabilities, judgments, penalties, fines, damages, costs and
expenses (including without limitation, attorneys' and experts' fees and costs)
arising from or related to any such contest initiated or brought by Tenant.
6.3 ADMINISTRATIVE EXPENSES: In addition to the Base Rent set forth in
Section 3 hereof, Tenant shall pay Landlord, without prior notice or demand, on
the first (1st) day of each month throughout the term of this Lease (including
any extensions of such term), as compensation to Landlord for accounting and
management services rendered on behalf of the Building and/or the Park,
one-twelfth (1/12th) of an amount equal to ten percent (10%) of the estimated
amount of the aggregate of the Tenant's share of (i) the total Operating
Expenses and Tax Expenses as described in Sections 6.1 and 6.2 above,
respectively, and (ii) all Common Area Utility Costs for the Park and the
Premises as described in Section 7 below, but excluding utility costs
attributable to the heating, utility expenses for ventilation and air
conditioning servicing the Premises; as such amounts are estimated by Landlord
in accordance with the provisions of Section 6.4 below (collectively, the
"Administrative Expenses"). Tenant's obligations to pay such Administrative
Expenses shall survive the expiration or earlier termination of this Lease.
6.4 PAYMENT OF EXPENSES: Landlord shall reasonably estimate Tenant's
share of the Operating Expenses and Tax Expenses for the calendar year in which
the Lease commences. Commencing on the Commencement Date, one-twelfth (1/12th)
of this estimated amount shall be paid by Tenant to Landlord, as Additional
Rent, on the first (1st) day of each month and throughout the remaining months
of such calendar year. Thereafter, Landlord may estimate such expenses as of the
beginning of each calendar year and Tenant shall pay one-twelfth (1/12th) of
such estimated amount as Additional Rent hereunder on the first day of each
month during such calendar year and for each ensuing calendar year throughout
the term of this Lease (including any extensions of the term). By April 30th
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of each of the following calendar years, or as soon thereafter as reasonably
possible, [including the calendar year after the calendar year in] and within
six (6) months after the last day of the term on which this Lease terminates or
the term expires, Landlord shall [endeavor] use commercially reasonably efforts
to furnish Tenant with an accounting of actual Operating Expenses and Tax
Expenses. Within thirty (30) days of Landlord's delivery of such accounting,
Tenant shall pay to Landlord the amount of any underpayment. Notwithstanding the
foregoing, failure by Landlord to give such accounting by such date shall not
constitute a waiver by Landlord of its right to collect any of Tenant's
underpayment at any time. Landlord shall credit the amount of any overpayment by
Tenant toward the next estimated monthly installment(s) falling due, or where
the term of the Lease has expired, refund the amount of overpayment to Tenant
within six (6) months of such expiration. Tenant, at its sole cost and expense
through any certified public accountant designated by it, shall have the right
to examine and/or audit the books and records evidencing such costs and expenses
for the previous one (1) calendar year, during Landlord's reasonable business
hours and not more frequently than once during any calendar year. Tenant's
obligations to pay its share of Operating Expenses and Tax Expenses shall
survive the expiration or earlier termination of this Lease.]
6.5 ANNUAL RECONCILIATION: If the term of the Lease expires prior to the
annual reconciliation of expenses, if any, Landlord shall have the right to
reasonably estimate Tenant's share of such expenses, and if Landlord determines
that an underpayment is due, Tenant hereby agrees to pay Landlord the amount of
such underpayment within thirty (30) days thereafter. If Tenant does not pay
such underpayment within thirty days, Tenant hereby agrees that Landlord shall
be entitled to deduct such underpayment from Tenant's Security Deposit. If
Landlord reasonably determines that an overpayment has been made by Tenant,
Landlord shall refund said overpayment to Tenant [as soon as practicable] within
six (6) months thereafter. Notwithstanding the foregoing, failure of Landlord to
accurately estimate Tenant's share of such expenses or to otherwise perform such
reconciliation of expenses, including, without limitation, Landlord's failure to
deduct any portion of any underpayment from Tenant's Security Deposit, shall not
constitute a waiver of Landlord's right to collect any of Tenant's underpayment
at any time during the term of the Lease or at any time after the expiration or
earlier termination of this Lease.
6.6 Exclusions From Operating Expenses: Notwithstanding the foregoing,
for the purpose of this Lease, the term "Operating Expenses" shall not include
the following:
6.6.1 Leasing commissions, cost disbursements, and other
expenses incurred for leasing, renovating, or improving space for
tenants other than Tenant;
6.6.2 Costs (including permit, license, and inspection fees)
incurred in renovating, improving, decorating, painting, or redecorating
vacant space or space for other tenants;
6.6.3 Depreciation and amortization except on materials,
tools, supplies and vendor-type equipment purchased by Landlord to
supply services for which Landlord might otherwise contract with third
parties or such depreciation and amortization which otherwise have
already been included in the charge for such third party services;
6.6.4 Costs incurred [because Landlord or another tenant
actually and conclusively violated the terms of any lease;] for repairs
necessitated by the [active] gross negligence or willful misconduct of
Landlord or its authorized contractors, employees, or agents or by the
negligence of other tenants in the Building, or by latent defects in the
original design of the Building;
6.6.5 Interest on debt or amortization payments on mortgages
or deeds of trust or any other debts for borrowed money;
6.6.6 Items and services which Tenant reimburses Landlord or
pays third parties or that Landlord provided selectively to one or more
tenants of the Building, other than Tenant, without reimbursement;
6.6.7 Advertising and promotional expenditures;
6.6.8 Any costs, fines, or penalties incurred because Landlord
violated any governmental rule or authority, except to the extent
contributed to by Tenant or its employees, agents, invitees, licensees,
representatives, assignees, subtenants, customers or contractors
(collectively, "Tenant's Representatives");
6.6.9 Costs incurred to test, survey, clean, contain, abate,
remove, or otherwise remedy Hazardous Materials from the Lot or Building
except to the extent same is Tenant's responsibility pursuant to
Paragraph 29 hereof, or otherwise caused by Tenant or any of Tenant's
Representatives;
6.6.10 Legal fees, brokerage commissions, advertising costs or
other related expenses incurred by Landlord in connection with leasing
of space to other tenants and for the financing of the Building, Lot, or
Premises, except as required pursuant to the provisions of Section 21
hereof;
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6.6.11 Legal fees, accountant fees, and other fees incurred in
connection with disputes of other tenants or occupants of the Building
or Park;
6.6.12 Except for the Administrative Expenses set forth in
Section 6.3 of this Lease, overhead and profit paid to subsidiaries or
affiliates of Landlord for management or other services provided in or
to the Building to the extent such costs and expenses exceed the
competitive costs and expenses were they not provided by a subsidiary or
affiliate of Landlord;
6.6.13 The excess costs over competitive costs by independent
suppliers or vendors for the cost of supplies and services provided by
subsidiaries and affiliates of Landlord;
6.6.14 Rental charges and other related expenses incurred by
Landlord in leasing air conditioning systems or other equipment
ordinarily considered to be a capital nature to the extent such rental
charges and other related expenses exist and are incurred as of the
Commencement Date of this Lease;
6.6.15 Subject to the provisions of Section 27 below, costs of
repairs or other work necessitated by fire, windstorm or other casualty
(excluding any deductible and any casualties or matters for which Tenant
self-insures) to the extent such casualties are covered by insurance
required to be maintained by Landlord hereunder;
6.6.16 Legal fees for lawsuits or similar proceedings which do
not directly benefit the tenants of the Building or Park;
6.6.17 Except for the Administrative Expenses set forth in
Section 6.3 of this Lease, salaries of Landlord's owners or officers;
6.6.18 Ground lease rental; and
6.6.19 Those costs incurred by Landlord for the matters set
forth in Section 11.3 below.
7. UTILITIES: Utility Expenses, Common Area Utility Costs and all other sums or
charges set forth in this Section 7 are considered part of Additional Rent.
Tenant shall pay the cost of all water, sewer use, sewer discharge fees and
sewer connection fees, gas, heat, electricity, refuse pickup, janitorial
service, telephone and other utilities billed or metered separately to the
Premises and/or Tenant. Tenant shall also pay its share of any assessments or
charges for utility or similar purposes included within any tax bill for the Lot
on which the Premises are situated, including, without limitation, entitlement
fees, allocation unit fees, and/or any similar fees or charges, and any
penalties related thereto (except for penalties attributable solely to
Landlord's late payment of such utility charges). For any such utility fees or
use charges that are not billed or metered separately to Tenant, Tenant shall
pay to Landlord, as Additional Rent, without prior notice or demand, on the
first (1st) day of each month throughout the term of this Lease the amount which
is attributable to Tenant's use of the utilities or similar services, as
reasonably estimated and determined by Landlord based upon factors such as size
of the Premises and intensity of use of such utilities by Tenant such that
Tenant shall pay the portion of such charges reasonably consistent with Tenant's
use of such utilities and similar services ("Utility Expenses"). If Tenant
disputes any such estimate or determination, then Tenant shall either pay the
estimated amount or cause the Premises to be separately metered at Tenant's sole
expense. In addition, Tenant shall pay to Landlord its share, which is described
on Page 1, as Additional Rent, without prior notice or demand, on the first
(1st) day of each month throughout the term of this Lease, of any Common Area
utility costs, fees, charges or expenses attributable to Phase VI of the Park
("Common Area Utility Costs"). Tenant shall pay to Landlord one-twelfth (1/12th)
of the estimated amount of Tenant's share of the Common Area Utility Costs in
the same manner and time periods as specified in Section 6.4 above and any
reconciliation thereof shall also be in the same manner as specified in Sections
6.4 and 6.5 above. The amount of Tenant's share of Common Area Utility Costs
shall be reviewed from time to time by Landlord and shall be subject to
modification by Landlord as reasonably determined by Landlord. Tenant
acknowledges that the Premises may become subject to the rationing of utility
services or restrictions on utility use as required by a public utility company,
governmental agency or other similar entity having jurisdiction thereof.
Notwithstanding any such rationing or restrictions on use of any such utility
services, Tenant acknowledges and agrees that its tenancy and occupancy
hereunder shall be subject to such rationing restrictions as may be imposed upon
Landlord, Tenant, the Premises, the Building or the Park, and Tenant shall in no
event be excused or relieved from any covenant or obligation to be kept or
performed by Tenant by reason of any such rationing or restrictions. Tenant
further agrees to timely and faithfully pay, prior to delinquency, any amount,
tax, charge, surcharge, assessment or imposition levied, assessed or imposed
upon the Premises, or Tenant's use and occupancy thereof, or as a result
directly or indirectly of any such rationing or restrictions.
8. LATE CHARGES: Any and all sums or charges set forth in this Section 8 are
considered part of Additional Rent. Tenant acknowledges that late payment (the
[second] fourth day of each month or any time thereafter) by Tenant to Landlord
of Base Rent, Tenant's share of Operating Expenses, Tax Expenses, Common Area
Utility Costs, and Utility Expenses, Administrative Expenses or other sums due
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hereunder, will cause Landlord to incur costs not contemplated by this Lease,
the exact amount of such costs being extremely difficult and impracticable to
fix. Such costs include, without limitation, processing and accounting charges,
and late charges that may be imposed on Landlord by the terms of any note
secured by any encumbrance against the Premises, and late charges and penalties
due to the late payment by Tenant of real property taxes on the Premises.
Therefore, if any installment of Rent or any other sum due from Tenant is not
received by Landlord when due, Tenant shall promptly pay to Landlord [all of the
following, as applicable: (a)] an additional sum equal to [ten] seven percent
[(10%)](7%) of such delinquent amount [plus interest on such delinquent amount
at the rate equal to the prime rate plus three percent (3%) for the time period
such payments are delinquent as a late charge for every month or portion thereof
that such sums remain unpaid, (b) the amount of seventy-five dollars ($75) for
each three-day notice prepared for, or served on, Tenant, (c) the amount of
fifty dollars ($50) relating to checks for which there are not sufficient
funds.] If Tenant delivers to Landlord a check for which there are not
sufficient funds, Landlord may, at its sole option, require Tenant to replace
such check with a cashier's check for the amount of such check and all other
charges payable hereunder. The parties agree that this late charge and the other
charges referenced above represent a fair and reasonable estimate of the costs
that Landlord will incur by reason of late payment by Tenant. Acceptance of any
late charge or other charges shall not constitute a waiver by Landlord of
Tenant's default with respect to the delinquent amount, nor prevent Landlord
from exercising any of the other rights and remedies available to Landlord for
any other breach of Tenant under this Lease. If a late charge or other charge
becomes payable for any three (3) installments of Rent within any twelve (12)
month period, then Landlord, at Landlord's sole option, can either require the
Rent be paid quarterly in advance, or be paid monthly in advance by cashier's
check or by electronic funds transfer.
9. USE OF PREMISES:
9.1 COMPLIANCE WITH LAWS, RECORDED MATTERS, AND RULES AND REGULATIONS:
The Premises are to be used solely for the uses stated on Page 1 and for no
other uses or purposes without Landlord's prior written consent, which consent
may be given or withheld in Landlord's sole discretion. The use of the Premises
by Tenant and its employees, representatives, agents, invitees, licensees,
subtenants, customers or contractors (collectively, "Tenant's Representatives")
shall be subject to, and at all times in compliance with, (a) any and all
applicable laws, ordinances, statutes, orders and regulations as same exist from
time to time (collectively, the "Laws"), (b) any and all documents, matters or
instruments, including without limitation, any declarations of covenants,
conditions and restrictions, and any supplements thereto, each of which has been
or hereafter is recorded in any official or public records with respect to the
Premises, the Building, the Lot and/or the Park, or any portion thereof
(collectively, the "Recorded Matters"), and (c) any and all rules and
regulations set forth in Exhibit C, attached to and made a part of this Lease,
and any other reasonable rules and regulations promulgated by Landlord now or
hereafter enacted relating to parking and the operation of the Premises, the
Building and the Park (collectively, the "Rules and Regulations") so long as the
Rules and Regulations hereafter enacted do not prevent Tenant from using the
Premises for the purposes as described on Page 1. Tenant agrees to, and does
hereby, assume full and complete responsibility to ensure that the Premises are
adequate to fully meet the needs and requirements of Tenant's intended
operations of its business within the Premises, and Tenant's use of the Premises
and that same are in compliance with all applicable Laws.
9.2 PROHIBITION ON USE: Tenant shall not use the Premises or permit
anything to be done in or about the Premises nor keep or bring anything therein
which will in any way conflict with any of the requirements of the Board of Fire
Underwriters or similar body now or hereafter constituted or in any way increase
the existing rate of or affect any policy of fire or other insurance upon the
Building or any of its contents, or cause a cancellation of any insurance
policy. No auctions may be held or otherwise conducted in, on or about the
Premises, the Building, the Lot or the Park without Landlord's written consent
thereto, which consent may be given or withheld in Landlord's sole discretion.
Tenant shall not do or permit anything to be done in or about the Premises which
will in any way obstruct or interfere with the rights of Landlord, other tenants
or occupants of the Building, other buildings in the Park, or other persons or
businesses in the area, or injure or annoy other tenants or use or allow the
Premises to be used for any unlawful or objectionable purpose, as determined by
Landlord, in its reasonable discretion, for the benefit, quiet enjoyment and use
by Landlord and all other tenants or occupants of the Building or other
buildings in the Park; nor shall Tenant cause, maintain or permit any private or
public nuisance in, on or about the Premises, Building, Park and/or the Common
Area, including, but not limited to, any offensive odors, noises, fumes or
vibrations. Tenant shall not damage or deface or otherwise commit or suffer to
be committed any waste in, upon or about the Premises. Tenant shall not place or
store, nor permit any other person or entity to place or store, any property,
equipment, materials, supplies, personal property or any other items or goods
outside of the Premises for any period of time. Tenant shall not permit any
animals (except for those animals required for Tenant to conduct its research),
including, but not limited to, any household pets, to be brought or kept in or
about the Premises. Tenant shall place no loads upon the floors, walls, or
ceilings in excess of the maximum designed load permitted by the applicable
Uniform Building Code or which may damage the Building or outside areas; nor
place any harmful liquids in the drainage systems; nor dump or store waste
materials, refuse or other such materials, or allow such to remain outside the
Building area, except in refuse dumpsters or in any enclosed trash areas
provided. Tenant shall honor the terms of all Recorded Matters relating to the
Premises, the Building, the Lot and/or the Park. Tenant shall honor the Rules
and Regulations. If Tenant fails to comply with such Laws, Recorded Matters,
Rules and Regulations or the
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provisions of this Lease, Landlord shall have [the right to collect from Tenant
a reasonable sum as a penalty, in addition to] all rights and remedies of
Landlord hereunder including, but not limited to, the payment by Tenant to
Landlord of all [Enforcement Expenses and Landlord's] costs and expenses
incurred by Landlord, if any, to cure any of such failures of Tenant, if
Landlord, at its sole option, elects to undertake such cure.
10. ALTERATIONS AND ADDITIONS; AND SURRENDER OF PREMISES:
10.1 ALTERATIONS AND ADDITIONS: Tenant shall not install any signs,
fixtures, improvements, nor make or permit any other alterations or additions to
the Premises without the prior written consent of Landlord. If any such
alteration or addition is expressly permitted by Landlord, Tenant shall deliver
at least twenty (20) days prior notice to Landlord, from the date Tenant intends
to commence construction, sufficient to enable Landlord to post a Notice of
Non-Responsibility. In all events, Tenant shall obtain all permits or other
governmental approvals prior to commencing any of such work and deliver a copy
of same to Landlord. All alterations and additions shall be installed by a
licensed contractor approved by Landlord, at Tenant's sole expense in compliance
with all applicable Laws (including, but not limited to, the ADA as defined
herein), Recorded Matters, and Rules and Regulations. Tenant shall keep the
Premises and the property on which the Premises are situated free from any liens
arising out of any work performed, materials furnished or obligations incurred
by or on behalf of Tenant. [As a condition to Landlord's consent to the
installation of any fixtures, additions or other improvements, Landlord may
require Tenant to post and obtain a completion and indemnity bond for up to one
hundred fifty percent (150%) of the cost of the work.]
10.2 SURRENDER OF PREMISES: Upon the termination of this Lease, whether
by forfeiture, lapse of time or otherwise, or upon the termination of Tenant's
right to possession of the Premises, Tenant will at once surrender and deliver
up the Premises, together with the fixtures, furnishings, additions and
improvements which Landlord has notified Tenant at the time Landlord consented
to the installation of such fixtures, furnishings, additions and improvements,
in writing, that Landlord will require Tenant not to remove, to Landlord in good
condition and repair including, but not limited to, replacing all light bulbs
and ballasts not in good working condition, excepting for reasonable wear and
tear. Reasonable wear and tear shall not include any damage or deterioration to
the floors of the Premises arising from the use of forklifts in, on or about the
Premises (including, without limitation, any marks or stains of any portion of
the floors), and any damage or deterioration that would have been prevented by
proper maintenance by Tenant or Tenant otherwise performing all of its
obligations under this Lease. Upon such termination of this Lease, Tenant shall
remove all tenant signage, trade fixtures, furniture, furnishings, personal
property, additions, and other improvements unless Landlord requests, in
writing, that Tenant not remove some or all of such trade fixtures, furniture,
furnishings, additions or improvements installed by, or on behalf of Tenant or
situated in or about the Premises. By the date which is twenty (20) days prior
to such termination of this Lease, Landlord shall notify Tenant in writing of
those fixtures, alterations, furniture, furnishings, [trade fixtures,] additions
and other improvements which Landlord shall require Tenant not to remove from
the Premises. Tenant shall repair any damage caused by the installation or
removal of such signs, trade fixtures, furniture, furnishings, fixtures,
additions and improvements which are to be removed from the Premises by Tenant
hereunder. If Landlord fails to so notify Tenant at least twenty (20) days prior
to such termination of this Lease, then Tenant shall remove all tenant signage,
fixtures, alterations, furniture, furnishings, trade fixtures, additions and
other improvements installed in or about the Premises by, or on behalf of
Tenant. Tenant shall ensure that the removal of such items and the repair of the
Premises will be completed prior to such termination of this Lease.
11. REPAIRS AND MAINTENANCE:
11.1 TENANT'S REPAIRS AND MAINTENANCE OBLIGATIONS: Except for those
portions of the Building to be maintained by Landlord, as provided in Section
11.2 below, Tenant shall, at Tenant's sole cost and expense, keep and maintain
the Premises and the adjacent areas (including, without limitation, any portion
of the Common Area used by Tenant or Tenant's Representatives) in good, clean
and safe condition and repair to the satisfaction of Landlord including, but not
limited to, repairing any damage caused by Tenant or Tenant's Representatives
and replacing any property so damaged by Tenant or Tenant's Representatives.
Without limiting the generality of the foregoing, Tenant shall be solely
responsible for maintaining, repairing and replacing (a) all mechanical systems,
heating, ventilation and air conditioning systems, (b) all plumbing, electrical
wiring and equipment serving the Premises, (c) all interior lighting (including,
without limitation, light bulbs and/or ballasts) and exterior lighting serving
the Premises or adjacent to the Premises, (d) all glass, windows, window frames,
window casements, skylights, interior and exterior doors, door frames and door
closers, (e) all roll-up doors, ramps and dock equipment including without
limitation, dock bumpers, dock plates, dock seals, dock levelers and dock
lights, (f) all tenant signage, (g) lifts for disabled persons serving the
Premises, (h) sprinkler systems, fire protection systems and security systems,
(i) all partitions, fixtures, equipment, interior painting, and interior walls
and floors of the Premises and every part thereof (including, without
limitation, any demising walls contiguous to any portion of the Premises).
Tenant's obligation to keep, maintain, preserve and repair the Premises and the
adjacent area shall specifically extend to the cleanup and removal of any and
all Hazardous Materials (hereafter defined) occurring in, on or about the
Premises.
Language indicated as being shown by strike-out in the typeset document is
enclosed in brackets "[" and "]" in the electronic format.
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11.2 REIMBURSABLE REPAIRS AND MAINTENANCE OBLIGATIONS: Subject to the
provisions of Sections 6 and 9 of this Lease and except for (i) the obligations
of Tenant set forth in Section 11.1 above, and (ii) the repairs rendered
necessary by the intentional or negligent acts or omissions of Tenant or
Tenant's Representatives, Landlord agrees, at Landlord's expense, subject to
reimbursement pursuant to Section 6 above, to keep in good repair the plumbing
and mechanical systems exterior to the Premises, any rail spur and rail
crossing, the roof, roof membranes, exterior walls of the Building, signage
(exclusive of tenant signage), and exterior electrical wiring and equipment,
exterior lighting, exterior glass, exterior doors and entrances, exterior window
casements, exterior doors and door closers, exterior painting of the Building
(exclusive of the Premises), and underground utility and sewer pipes outside the
exterior walls of the Building. For purposes of this Section 11.2, the term
"exterior" shall mean exterior to, and not serving the Premises. Unless
otherwise notified by Landlord, in writing, that Landlord has elected to procure
and maintain the following described contract(s), Tenant shall procure and
maintain (a) the heating, ventilation and air conditioning systems preventative
maintenance and repair contract(s); such contract(s) to be on a bi-monthly or
quarterly basis, as reasonably determined by Landlord, and (b) the fire and
sprinkler protection services and preventative maintenance and repair
contract(s) (including, without limitation, monitoring services); such
contract(s) to be on a bi-monthly or quarterly basis, as reasonably determined
by Landlord. Landlord reserves the right, but without the obligation to do so,
to procure and maintain (i) the heating, ventilation and air conditioning
systems preventative maintenance and repair contract(s), and/or (ii) the fire
and sprinkler protection services and preventative maintenance and repair
contract(s) (including, without limitation, monitoring services). If Landlord so
elects to procure and maintain any such contract(s), Tenant will reimburse
Landlord for the cost thereof in accordance with the provisions of Section 6
above. If Tenant procures and maintains any of such contract(s), Tenant will
promptly deliver to Landlord a true and complete copy of (x) each such contract
and any and all renewals or extensions thereof, and (y) each service report or
other summary received by Tenant pursuant to or in connection with such
contract(s).
11.3 LANDLORD'S REPAIRS AND MAINTENANCE OBLIGATIONS: Except for repairs
rendered necessary by the intentional or negligent acts or omissions of Tenant
or Tenant's Representatives, Landlord agrees, at Landlord's sole cost and
expense, to (a) keep in good repair the structural portions of the floors,
foundations and exterior perimeter walls of the Building (exclusive of glass and
exterior doors), and (b) replace the structural portions of the roof of the
Building (excluding the roof membrane) as, and when, Landlord determines such
replacement to be necessary in Landlord's sole discretion. Notwithstanding the
foregoing to the contrary, such repairs and/or replacements shall not be
included in the Operating Expenses as set forth in Section 6.1 above.
11.4 TENANT'S FAILURE TO PERFORM REPAIRS AND MAINTENANCE OBLIGATIONS:
Except for normal maintenance and repair of the items described above, Tenant
shall have no right of access to or right to install any device on the roof of
the Building nor make any penetrations of the roof of the Building without the
express prior written consent of Landlord, which consent shall not be
unreasonably withheld. If Tenant refuses or neglects to repair and maintain the
Premises and the adjacent areas properly as required herein and to the
reasonable satisfaction of Landlord, Landlord may, but without obligation to do
so, at any time make such repairs and/or maintenance without Landlord having any
liability to Tenant for any loss or damage that may accrue to Tenant's
merchandise, fixtures or other property, or to Tenant's business by reason
thereof, except to the extent any damage is caused by the willful misconduct or
gross negligence of Landlord or its authorized agents and representatives. In
the event Landlord makes such repairs and/or maintenance, upon completion
thereof Tenant shall pay to Landlord, as additional rent, the Landlord's costs
for making such repairs and/or maintenance, plus [twenty] ten percent
[(20%)](10%) for overhead, upon presentation of a bill therefor. The obligations
of Tenant hereunder shall survive the expiration of the term of this Lease or
the earlier termination thereof. Tenant hereby waives any right to repair at the
expense of Landlord under any applicable Laws now or hereafter in effect
respecting the Premises.
12. INSURANCE:
12.1 TYPES OF INSURANCE: Tenant shall maintain in full force and effect
at all times during the term of this Lease, at Tenant's sole cost and expense,
for the protection of Tenant and Landlord, as their interests may appear,
policies of insurance issued by a carrier or carriers acceptable to Landlord and
its lender(s) which afford the following coverages: (i) worker's compensation:
statutory limits; (ii) employer's liability, as required by law, with a minimum
limit of $100,000 per employee and $500,000 per occurrence; (iii) commercial
general liability insurance (occurrence form) providing coverage against any and
all claims for bodily injury and property damage occurring in, on or about the
Premises arising out of Tenant's and Tenant's Representatives' use and/or
occupancy of the Premises. Such insurance shall include coverage for blanket
contractual liability, fire damage, premises, personal injury, completed
operations, products liability, personal and advertising, and a plate-glass
rider to provide coverage for all glass in, on or about the Premises including,
without limitation, skylights, with deletion of the exclusion for operations
within fifty (50) feet of a railroad track (railroad protective liability), if
applicable. Such insurance shall have a combined single limit of not less than
One Million Dollars ($1,000,000) per occurrence with a Two Million Dollar
($2,000,000) aggregate limit and excess umbrella insurance in the amount of Two
Million Dollars ($2,000,000). If Tenant has other locations which it owns or
leases, the policy shall include an aggregate limit per location endorsement. If
necessary, as reasonably determined by Landlord, Tenant shall provide for
restoration of the aggregate limit; (iv)
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comprehensive automobile liability insurance: a combined single limit of not
less than $2,000,000 per occurrence and insuring Tenant against liability for
claims arising out of the ownership, maintenance, or use of any owned, hired or
non-owned automobiles; (v) "all risk" property insurance, including without
limitation, sprinkler leakage, [boiler and machinery comprehensive form,] if
applicable, covering damage to or loss of any personal property, trade fixtures,
inventory, fixtures and equipment located in, on or about the Premises, and in
addition,[ coverage for flood, earthquake, and] business interruption of Tenant,
together with, if the property of Tenant's invitees is to be kept in the
Premises, warehouser's legal liability or bailee customers insurance for the
full replacement cost of the property belonging to invitees and located in the
Premises. Such insurance shall be written on a replacement cost basis (without
deduction for depreciation) in an amount equal to one hundred percent (100%) of
the full replacement value of the aggregate of the items referred to in this
subparagraph (v); and (vi) such other insurance as Landlord reasonably deems
necessary and prudent or as may otherwise be required by any of Landlord's
lenders or joint venture partners.
12.2 INSURANCE POLICIES: Insurance required to be maintained by Tenant
shall be written by companies (i) licensed to do business in the State of
California, (ii) domiciled in the United States of America, and (iii) having a
"General Policyholders Rating" of at least [A:X]A-:X (or such higher rating as
may be required by a lender having a lien on the Premises) as set forth in the
most current issue of "Best's Insurance Reports". Any deductible amounts under
any of the insurance policies required hereunder shall not exceed [One Thousand
Dollars ($1,000)] Five Thousand Dollars ($5,000). Tenant shall deliver to
Landlord certificates of insurance and true and complete copies of any and all
endorsements required herein for all insurance required to be maintained by
Tenant hereunder at the time of execution of this Lease by Tenant. Tenant shall,
at least thirty (30) days prior to expiration of each policy, furnish Landlord
with certificates of renewal or "binders" thereof. Each certificate shall
expressly provide that such policies shall not be cancelable or otherwise
subject to modification except after thirty (30) days prior written notice to
the parties named as additional insureds as required in this Lease (except for
cancellation for nonpayment of premium, in which event cancellation shall not
take effect until at least ten (10) days' notice has been given to Landlord).
Tenant shall have the right to provide insurance coverage which it is obligated
to carry pursuant to the terms of this Lease under a blanket insurance policy,
provided such blanket policy expressly affords coverage for the Premises and for
Landlord as required by this Lease.
12.3 ADDITIONAL INSUREDS AND COVERAGE: Landlord, any property management
company and/or agent of Landlord for the Premises, the Building, the Lot or the
Park, any lender(s) of Landlord having a lien against the Premises, the
Building, the Lot or the Park, and any joint venture partners of Landlord shall
be named as additional insureds under all of the policies required in Section
12.1(iii) above with the exception of Tenant's product liability coverage.
Additionally, such policies shall provide for severability of interest. All
insurance to be maintained by Tenant shall, except for workers' compensation and
employer's liability insurance, be primary, without right of contribution from
insurance maintained by Landlord. Any umbrella liability policy or excess
liability policy (which shall be in "following form") shall provide that if the
underlying aggregate is exhausted, the excess coverage will drop down as primary
insurance. The limits of insurance maintained by Tenant shall not limit Tenant's
liability under this Lease. It is the parties' intention that the insurance to
be procured and maintained by Tenant as required herein shall provide coverage
for any and all damage or injury arising from or related to Tenant's operations
of its business and/or Tenant's or Tenant's Representatives' use of the Premises
and/or any of the areas within the Park, whether such events occur within the
Premises (as described in Exhibit A hereto) or in any other areas of the Park.
It is not contemplated or anticipated by the parties that the aforementioned
risks of loss be borne by Landlord's insurance carriers, rather it is
contemplated and anticipated by Landlord and Tenant that such risks of loss be
borne by Tenant's insurance carriers pursuant to the insurance policies procured
and maintained by Tenant as required herein.
12.4 FAILURE OF TENANT TO PURCHASE AND MAINTAIN INSURANCE: In the event
Tenant does not purchase the insurance required in this Lease or keep the same
in full force and effect throughout the term of this Lease (including any
renewals or extensions), Landlord may, but without obligation to do so, purchase
the necessary insurance and pay the premiums therefor. If Landlord so elects to
purchase such insurance, Tenant shall pay to Landlord, as additional rent, the
amount so paid by Landlord promptly upon Landlord's demand therefor. In
addition, Landlord may recover from Tenant and Tenant agrees to pay, as
additional rent, any and all [Enforcement Expenses and] damages which Landlord
may sustain by reason of Tenant's failure to obtain and maintain such insurance.
If Tenant fails to maintain any insurance required in this Lease, Tenant shall
be liable for all losses, damages and costs resulting from such failure.
13. WAIVER OF SUBROGATION: Landlord and Tenant hereby mutually waive their
respective rights of recovery against each other for any loss of, or damage to,
either parties' property to the extent that such loss or damage is insured by an
insurance policy required to be in effect at the time of such loss or damage.
Each party shall obtain any special endorsements, if required by its insurer
whereby the insurer waives its rights of subrogation against the other party.
This provision is intended to waive fully, and for the benefit of the parties
hereto, any rights and/or claims which might give rise to a right of subrogation
in favor of any insurance carrier. The coverage obtained by Tenant pursuant to
Section 12 of this Lease shall include, without limitation, a waiver of
subrogation endorsement attached to the certificate of insurance. The provisions
of this Section 13 shall not apply in those instances in which such
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waiver of subrogation would invalidate such insurance coverage or would cause
either party's insurance coverage to be voided or otherwise uncollectible.
14. LIMITATION OF LIABILITY AND INDEMNITY: Except [for] to the extent of damage
resulting from the [sole active] gross negligence or willful misconduct of
Landlord or its authorized representatives, Tenant agrees to protect, defend
(with counsel acceptable to Landlord) and hold Landlord and Landlord's
lender(s), partners, employees, representatives, legal representatives,
successors and assigns (collectively, the "Indemnitees") harmless and indemnify
the Indemnitees from and against all liabilities, damages, claims, losses,
judgments, charges and expenses (including reasonable attorneys' fees, costs of
court and expenses necessary in the prosecution or defense of any litigation
including the enforcement of this provision) arising from [or in any way related
to, directly or indirectly,] Tenant's or Tenant's Representatives' use of the
Premises, Building and/or the Park, or the conduct of Tenant's business, or from
any activity, work or thing done, permitted or suffered by Tenant in or about
the Premises, or in any way connected with the Premises or with the improvements
or personal property therein, including, but not limited to, any liability for
injury to person or property of Tenant, Tenant's Representatives, or third party
persons. Tenant agrees that the obligations of Tenant herein shall survive the
expiration or earlier termination of this Lease.
Except [for] to the extent of damage resulting from the [sole active]
gross negligence or willful misconduct of Landlord or its authorized
representatives, Landlord shall not be liable to Tenant for any loss or damage
to Tenant or Tenant's property, for any injury to or loss of Tenant's business
or for any damage or injury to any person from any cause whatsoever, including,
but not limited to, any acts, errors or omissions by or on behalf of any other
tenants or occupants of the Building and/or the Park. Tenant shall not, in any
event or circumstance, be permitted to offset or otherwise credit against any
payments of Rent required herein for matters for which Landlord may be liable
hereunder. Landlord and its authorized representatives shall not be liable for
any interference with light or air, or for any latent defect (other than any
latent defect in the Premises or the Building attributable to the original
design or construction of the Building) in the Premises or the Building. To the
fullest extent permitted by law, Tenant agrees that neither Landlord nor any of
Landlord's lender(s), partners, employees, representatives, legal
representatives, successors and assigns shall at any time or to any extent
whatsoever be liable, responsible or in any way accountable for any loss,
liability, injury, death or damage to persons or property which at any time may
be suffered or sustained by Tenant or by any person(s) whomsoever who may at any
time be using, occupying or visiting the Premises, the Building or the Park
unless directly caused by the gross negligence or willful misconduct of Landlord
or its authorized representatives.
15. ASSIGNMENT AND SUBLEASING:
15.1 PROHIBITION: Tenant shall not assign, mortgage, hypothecate,
encumber, grant any license or concession, pledge or otherwise transfer this
Lease (collectively, "assignment"), in whole or in part, whether voluntarily or
involuntarily or by operation of law, nor sublet or permit occupancy by any
person other than Tenant of all or any portion of the Premises without first
obtaining the prior written consent of Landlord, which consent shall not be
unreasonably withheld. Tenant hereby agrees that Landlord may withhold its
consent to any proposed sublease or assignment if the proposed sublessee or
assignee or its business is subject to compliance with additional requirements
of the ADA (defined below) beyond those requirements which are applicable to
Tenant, unless the proposed sublessee or assignee shall (a) first deliver plans
and specifications for complying with such additional requirements and obtain
Landlord's written consent thereto, and (b) comply with all Landlord's
conditions for or contained in such consent, including without limitation,
requirements for security to assure the lien-free completion of such
improvements. If Tenant seeks to sublet or assign all or any portion of the
Premises, Tenant shall deliver to Landlord at least thirty (30) days prior to
the proposed commencement of the sublease or assignment (the "Proposed Effective
Date") the following: (i) the name of the proposed assignee or sublessee; (ii)
such information as to such assignee's or sublessee's financial responsibility
and standing as Landlord may reasonably require; and (iii) the aforementioned
plans and specifications, if any. Within ten (10) days after Landlord's receipt
of a written request from Tenant that Tenant seeks to sublet or assign all or
any portion of the Premises, Landlord shall deliver to Tenant a copy of
Landlord's standard form of sublease or assignment agreement (as applicable),
which instrument shall be utilized for each proposed sublease or assignment (as
applicable), and such instrument shall include a provision whereby the assignee
or sublessee assumes all of Tenant's obligations hereunder and agrees to be
bound by the terms hereof. As Additional Rent hereunder, Tenant shall pay to
Landlord a fee in the amount of five hundred dollars ($500) plus Tenant shall
reimburse Landlord for actual legal and other expenses incurred by Landlord in
connection with any actual or proposed assignment or subletting; provided (in
each instance) Tenant shall only be required to reimburse Landlord for legal
expenses incurred with respect to a proposed or actual assignment or sublease up
to a maximum amount of $1,500 in each instance. In the event the sublease (1) by
itself or taken together with prior sublease(s) covers or totals, as the case
may be, more than twenty-five percent (25%) of the rentable square feet of the
Premises or (2) is for a term which by itself or taken together with prior or
other subleases is greater than fifty percent (50%) of the period remaining in
the term of this Lease as of the time of the Proposed Effective Date, then
Landlord shall have the right, to be exercised by giving written notice to
Tenant, to recapture the space described in the sublease. If such recapture
notice is given, Tenant shall have the right to withdraw its request to sublease
such portion of the Premises. If Tenant does not withdraw its request in writing
within fifteen (15) days
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of delivery of the recapture notice, Landlord's recapture notice [it] shall
serve to terminate this Lease with respect to the proposed sublease space, or,
if the proposed sublease space covers all the Premises, it shall serve to
terminate the entire term of this Lease, in either case as of the Proposed
Effective Date. However, no termination of this Lease with respect to part or
all of the Premises shall become effective without the prior written consent,
where necessary, of the holder of each deed of trust encumbering the Premises or
any part thereof. If this Lease is terminated pursuant to the foregoing with
respect to less than the entire Premises, the Rent shall be adjusted on the
basis of the proportion of square feet retained by Tenant to the square feet
originally demised and this Lease as so amended shall continue thereafter in
full force and effect. Each permitted assignee or sublessee shall assume and be
deemed to assume this Lease and shall be and remain liable jointly and severally
with Tenant for payment of Rent and for the due performance of, and compliance
with all the terms, covenants, conditions and agreements herein contained on
Tenant's part to be performed or complied with, for the term of this Lease. No
assignment or subletting shall affect the continuing primary liability of Tenant
(which, following assignment, shall be joint and several with the assignee), and
Tenant shall not be released from performing any of the terms, covenants and
conditions of this Lease. Tenant hereby acknowledges and agrees that it
understands that Landlord's accounting department may process and accept Rent
payments without verifying that such payments are being made by Tenant, a
permitted sublessee or a permitted assignee in accordance with the provisions of
this Lease. Although such payments may be processed and accepted by such
accounting department personnel, any and all actions or omissions by the
personnel of Landlord's accounting department shall not be considered as
acceptance by Landlord of any proposed assignee or sublessee nor shall such
actions or omissions be deemed to be a substitute for the requirement that
Tenant obtain Landlord's prior written consent to any such subletting or
assignment, and any such actions or omissions by the personnel of Landlord's
accounting department shall not be considered as a voluntary relinquishment by
Landlord of any of its rights hereunder nor shall any voluntary relinquishment
of such rights be inferred therefrom. For purposes hereof, in the event Tenant
is a corporation, partnership, joint venture, trust or other entity other than a
natural person, any change in the direct or indirect ownership of Tenant
(whether pursuant to one or more transfers other than any public trading of the
outstanding shares (stock) of Tenant which does not result in a change of the
management and control of Tenant) which results in a change of more than fifty
percent (50%) in the direct or indirect ownership of Tenant shall be deemed to
be an assignment within the meaning of this Section 15 and shall be subject to
all the provisions hereof. [Any] Except for a permissible assignment to a
Related Entity, any and all options, first rights of refusal, tenant improvement
allowances and other similar rights granted to Tenant in this Lease, if any,
shall not be assignable by Tenant unless expressly authorized in writing by
Landlord. Notwithstanding anything to the contrary contained herein, so long as
Tenant delivers to Landlord (1) at least thirty (30) days prior written notice
of its intention to assign or sublease the Premises to any Related Entity, which
notice shall set forth the name of the Related Entity, (2) a copy of the
proposed agreement pursuant to which such assignment or sublease shall be
effectuated, and (3) such other information concerning the Related Entity as
Landlord may reasonably require, including without limitation, information
regarding any change in the proposed use of any portion of the Premises and any
financial information with respect to such Related Entity, and so long as
Landlord approves, in writing, of any change in the proposed use of the subject
portion of the Premises, then Tenant may assign this Lease or sublease any
portion of the Premises (X) to any Related Entity, or (Y) in connection with any
merger, consolidation or sale of substantially all of the assets of Tenant,
without having to obtain the prior written consent of Landlord thereto. For
purposes of this Lease the term "Related Entity" shall mean and refer to any
corporation or entity which controls, is controlled by or is under common
control with Tenant, as all of such terms are customarily used in the industry,
and with an equal or greater net worth as Tenant has as of the proposed transfer
date. Any assignment to a Related Entity shall in no way relieve Tenant of any
liability Tenant may have under this Lease and such assignee or sublessee shall
be jointly and severally liable with Tenant hereunder.
15.2 EXCESS SUBLEASE RENTAL OR ASSIGNMENT CONSIDERATION: In the event of
any sublease or assignment of all or any portion of the Premises where the rent
or other consideration provided for in the sublease or assignment either
initially or over the term of the sublease or assignment exceeds the Rent or pro
rata portion of the Rent, as the case may be, for such space reserved in the
Lease, Tenant shall pay the Landlord monthly, as additional rent, at the same
time as the monthly installments of Rent are payable hereunder,
[fifty]forty-five percent [(50%)](45%) of the excess of each such payment of
rent or other consideration in excess of the Rent called for hereunder.
15.3 WAIVER: Notwithstanding any assignment or sublease to a party other
than a Related Entity, or any indulgences, waivers or extensions of time granted
by Landlord to any assignee or sublessee, or failure by Landlord to take action
against any assignee or sublessee (other than a Related Entity), Tenant [waives
notice of any default of any assignee or sublessee and] agrees that Landlord
may, at its option, proceed against Tenant without having taken action against
or joined such assignee or sublessee (other than a Related Entity), except that
Tenant shall have the benefit of any indulgences, waivers and extensions of time
granted to any such assignee or sublessee including any Related Entity.
16. AD VALOREM TAXES: Prior to delinquency, Tenant shall pay all taxes and
assessments levied upon trade fixtures, alterations, additions, improvements,
inventories and personal property located and/or installed on or in the Premises
by, or on behalf of, Tenant; and if requested by Landlord, Tenant shall promptly
deliver to Landlord copies of receipts for payment of all such taxes and
assessments. To the
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extent any such taxes are not separately assessed or billed to Tenant, Tenant
shall pay the amount thereof as invoiced by Landlord.
17. 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 any bona fide mortgagee or deed of trust beneficiary
with a lien on all or any portion of the Premises or any ground lessor with
respect to the land of which the Premises are a part, the rights of Tenant under
this Lease and 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 Building or the land upon which the Building is situated
or both, and (ii) the lien of any mortgage or deed of trust which may now exist
or hereafter be executed in any amount for which the Building, the Lot, ground
leases or underlying leases, or Landlord's interest or estate in any of said
items is specified as security. Notwithstanding the foregoing, Landlord or any
such ground lessor, mortgagee, or any beneficiary shall have the right to
subordinate or cause to be subordinated any such ground leases or underlying
leases or any such liens to this Lease. If 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 and upon the request of such successor to
Landlord, attorn to and become the Tenant of the successor in interest to
Landlord, provided such successor in interest will not disturb Tenant's use,
occupancy or quiet enjoyment of the Premises so long as Tenant is not in default
of the terms and provisions of this Lease. The successor in interest to Landlord
following foreclosure, sale or deed in lieu thereof shall not be (a) liable for
any act or omission of any prior lessor or with respect to events occurring
prior to acquisition of ownership; (b) subject to any offsets or defenses which
Tenant might have against any prior lessor; (c) bound by prepayment of more than
one (1) month's Rent; or (d) liable to Tenant for any Security Deposit not
actually received by such successor in interest to the extent any portion or all
of such Security Deposit has not already been forfeited by, or refunded to,
Tenant. Landlord shall be liable to Tenant for all or any portion of the
Security Deposit not forfeited by, or refunded to Tenant, until and unless
Landlord transfers such Security Deposit to the successor in interest. Tenant
covenants and agrees to execute (and acknowledge if required by Landlord, any
lender or ground lessor) and deliver, within five (5) days of a demand or
request by Landlord and in the form requested by Landlord, ground lessor,
mortgagee or beneficiary, any additional documents evidencing the priority or
subordination of this Lease with respect to any such ground leases or underlying
leases or the lien of any such mortgage or deed of trust. Tenant's failure to
timely execute and deliver such additional documents shall, [at Landlord's
option],subject to Section 20.3 constitute a material default hereunder. [It is
further agreed that Tenant shall be liable to Landlord, and shall indemnify
Landlord from and against any loss, cost, damage or expense, incidental,
consequential, or otherwise, arising or accruing directly or indirectly, from
any failure of Tenant to execute or deliver to Landlord any such additional
documents.]
18. RIGHT OF ENTRY: Tenant grants Landlord or its agents the right to enter the
Premises at all reasonable times, following reasonable prior notice (except in
the event of an emergency) for purposes of inspection, exhibition, posting of
notices, repair or alteration. At Landlord's option, Landlord shall at all times
have and retain a key with which to unlock all the doors in, upon and about the
Premises, excluding Tenant's vaults and safes. It is further agreed that
Landlord shall have the right to use any and all means Landlord deems necessary
to enter the Premises in an emergency. Landlord shall also have the right to
place "for rent" and/or "for sale" signs on the outside of the Premises. Tenant
hereby waives any claim from damages or for any injury or inconvenience to or
interference with Tenant's business, or any other loss occasioned thereby except
for any claim for any of the foregoing arising out of the sole active gross
negligence or willful misconduct of Landlord or its authorized representatives.
Landlord shall use reasonably diligent efforts to abide by any safety
regulations of Tenant to the extent Landlord actually receives copies of any
such safety regulations, except in the event of an emergency.
19. ESTOPPEL CERTIFICATE: Tenant shall execute (and acknowledge if required by
any lender or ground lessor) and deliver to Landlord, within not less than [five
(5)] seven (7) business days after Landlord provides such to Tenant, a statement
in writing certifying that this Lease is unmodified and in full force and effect
(or, if modified, stating the nature of such modification), the date to which
the Rent and other charges are paid in advance, if any, acknowledging that there
are not, to Tenant's knowledge, any uncured defaults on the part of Landlord
hereunder or specifying such defaults as are claimed, and such other matters as
Landlord may reasonably require. Any such statement may be conclusively relied
upon by Landlord and any prospective purchaser or encumbrancer of the Premises.
Tenant's failure to deliver such statement within such time shall be conclusive
upon the Tenant that (a) this Lease is in full force and effect, without
modification except as may be represented by Landlord; (b) there are no uncured
defaults in Landlord's performance; and (c) not more than one month's Rent has
been paid in advance, except in those instances when Tenant pays Rent quarterly
in advance pursuant to Section 8 hereof, then not more than three month's Rent
has been paid in advance. Failure by Tenant to so timely deliver such certified
estoppel certificate shall be a material default of the provisions of this Lease
unless such failure is cured by Tenant within ten (10) business days after
Landlord's delivery to Tenant of a second written request therefor. Tenant shall
be liable to Landlord, and shall indemnify Landlord from and against any loss,
cost, damage or expense, incidental, consequential, or otherwise, arising or
accruing directly or indirectly, from any failure of Tenant to execute or
deliver to Landlord any such certified estoppel certificate [together with any
and all Enforcement Expenses]within the time periods contemplated in this
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Section 19. Landlord shall execute and deliver to Tenant, within the same time
periods given to Tenant under this Section 19, an estoppel certificate
containing the information described in subitems (a), (b) and (c) above.
20. TENANT'S DEFAULT: The occurrence of any one or more of the following
events shall, at Landlord's option, constitute a default and breach of this
Lease by Tenant:
20.1 The [vacation or] abandonment of the Premises by Tenant or the
vacation of the Premises by Tenant [for a period of ten (10) consecutive days or
the vacation of the Premises by Tenant] which [would] actually causes any
insurance policy to be invalidated or otherwise lapse. Tenant agrees to notice
and service of notice as provided for in this Lease and waives any right to any
other or further notice or service of notice which Tenant may have under any
statute or law now or hereafter in effect;
20.2 The failure by Tenant to make any payment of Rent, Additional Rent
or any other payment required hereunder [on the date] within three (3) days
after delivery of written notice from Landlord that said payment is past due.
Tenant agrees that such written notice by Landlord shall serve as the
statutorily required notice under the law and Tenant further agrees to notice
and service of notice as provided for in this Lease [and waives any right to any
other or further notice or service of notice which Tenant may have under any
statute or law now or hereafter in effect];
20.3 [The failure by Tenant to observe, perform or comply with any of
the conditions, covenants or provisions of this Lease (except failure to make
any payment of Rent and/or Additional Rent) and such failure is not cured within
the time period required under the provisions of this Lease. If such failure is
susceptible of cure but cannot reasonably be cured within the aforementioned
time period (if any), as determined solely by Landlord, Tenant shall promptly
commence the cure of such failure and thereafter diligently prosecute such cure
to completion within the time period specified by Landlord in any written notice
regarding such failure as may be delivered to Tenant by Landlord. In no event or
circumstance shall Tenant have more than fifteen (15) days to complete any such
cure, unless otherwise expressly agreed to in writing by Landlord (in Landlord's
sole discretion);] The failure by Tenant to observe, perform or comply with any
of the conditions, covenants or provisions of this Lease (except failure to make
any payment of Rent and/or Additional Rent) and such failure is not cured within
(i) thirty (30) days of the date on which Landlord delivers written notice of
such failure to Tenant for all failures other than with respect to Hazardous
Materials, and (ii) ten (10) days of the date on which Landlord delivers written
notice of such failure to Tenant for all failures in any way related to
Hazardous Materials. However, Tenant shall not be in default of its obligations
hereunder if such failure cannot reasonably be cured within such thirty (30) or
ten (10) day period, as applicable, and Tenant promptly commences, and
thereafter diligently proceeds with same to completion, all actions necessary to
cure such failure as soon as is reasonably possible, but in no event shall the
completion of such cure be later than forty-five (45) days after the date on
which Landlord delivers to Tenant written notice of such failure, unless
Landlord, acting reasonably and in good faith, otherwise expressly agrees in
writing to a longer period of time based upon the circumstances relating to such
failure as well as the nature of the failure and the nature of the actions
necessary to cure such failure;
20.4 The making of a general assignment by Tenant for the benefit of
creditors, the filing of a voluntary petition by Tenant or the filing of an
involuntary petition by any of Tenant's creditors seeking the rehabilitation,
liquidation, or reorganization of Tenant under any law relating to bankruptcy,
insolvency or other relief of debtors and, in the case of an involuntary action,
the failure to remove or discharge the same within sixty (60) days of such
filing, the appointment of a receiver or other custodian to take possession of
substantially all of Tenant's assets or this leasehold, Tenant's insolvency or
inability to pay Tenant's debts or failure generally to pay Tenant's debts when
due, any court entering a decree or order directing the winding up or
liquidation of Tenant or of substantially all of Tenant's assets, Tenant taking
any action toward the dissolution or winding up of Tenant's affairs, the
cessation or suspension of Tenant's use of the Premises, or the attachment,
execution or other judicial seizure of substantially all of Tenant's assets or
this leasehold;
20.5 Tenant's use or storage of Hazardous Materials in, on or about the
Premises, the Building, the Lot and/or the Park other than as expressly
permitted by the provisions of Section 29 below;
20.6 [The] Tenant knowingly making [of] any material misrepresentation
or omission by Tenant in any materials delivered by or on behalf of Tenant to
Landlord pursuant to this Lease; or
20.7 Tenant fails to timely and duly perform any of its obligations
under the Modification Agreement, including without limitation, making the
payments required to be made by Tenant thereunder in a timely manner. [A
material adverse change in the financial condition of Tenant or an affiliated
entity of Tenant which may adversely affect Tenant's ability to perform all or
any portion of its obligations under this Lease.]
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21. REMEDIES FOR TENANT'S DEFAULT:
21.1 LANDLORD'S RIGHTS: In the event of Tenant's default or breach of
the Lease, Landlord may terminate Tenant's right to possession of the Premises
by any lawful means in which case upon delivery of written notice by Landlord to
Tenant of such termination, this Lease shall terminate on the date specified by
Landlord in such notice and Tenant shall immediately surrender possession of the
Premises to Landlord. In addition, the Landlord shall have the immediate right
of re-entry whether or not this Lease is terminated, and if this right of
re-entry is exercised following abandonment of the Premises by Tenant, Landlord
may consider any personal property belonging to Tenant and left on the Premises
to also have been abandoned. No re-entry or taking possession of the Premises by
Landlord pursuant to this Section 21 shall be construed as an election to
terminate this Lease unless a written notice of such intention is given to
Tenant. If Landlord relets the Premises or any portion thereof, (i) Tenant shall
be liable immediately to Landlord for all costs Landlord incurs in reletting the
Premises or any part thereof, including, without limitation, broker's
commissions, expenses of cleaning, redecorating[, and further improving the
Premises and other similar costs] (collectively, the "Reletting Costs"), and
(ii) the rent received by Landlord from such reletting shall be applied to the
payment of, first, any indebtedness from Tenant to Landlord other than Base
Rent, Operating Expenses, Tax Expenses, Administrative Expenses, Common Area
Utility Costs, and Utility Expenses; second, all costs including maintenance,
incurred by Landlord in reletting; and, third, Base Rent, Operating Expenses,
Tax Expenses, Administrative Expenses, Common Area Utility Costs, Utility
Expenses, and all other sums due under this Lease. Any and all of the Reletting
Costs shall be fully chargeable to Tenant and shall not be prorated or otherwise
amortized in relation to any new lease for the Premises or any portion thereof.
After deducting the payments referred to above, any sum remaining from the
rental 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. Reletting may be for
a period shorter or longer than the remaining term of this Lease. No act by
Landlord other than giving written notice 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. So
long as this Lease is not terminated, Landlord shall have the right to remedy
any default of Tenant, to maintain or improve the Premises, to cause a receiver
to be appointed to administer the Premises and new or existing subleases and to
add to the Rent payable hereunder all of Landlord's reasonable costs in so
doing, with interest at the maximum rate permitted by law from the date of such
expenditure.
21.2 DAMAGES RECOVERABLE: If Tenant breaches this Lease and abandons the
Premises before the end of the term, or if Tenant's right to possession is
terminated by Landlord because of a breach or default of the Lease, then in
either such case, Landlord may recover from Tenant all damages suffered by
Landlord as a result of Tenant's failure to perform its obligations hereunder,
including, but not limited to, the cost of any tenant improvements constructed
by or on behalf of Tenant pursuant to Exhibit B hereto, the portion of any
broker's or leasing agent's commission incurred with respect to the leasing of
the Premises to Tenant for the balance of the term of the Lease remaining after
the date on which Tenant is in default of its obligations hereunder, and all
Reletting Costs, and the worth at the time of the award (computed in accordance
with paragraph (3) of Subdivision (a) of Section 1951.2 of the California Civil
Code) of the amount by which the Rent then unpaid hereunder for the balance of
the Lease term exceeds the amount of such loss of Rent for the same period which
Tenant proves could be reasonably avoided by Landlord and in such case, Landlord
prior to the award, may relet the Premises for the purpose of mitigating damages
suffered by Landlord because of Tenant's failure to perform its obligations
hereunder; provided, however, that even though Tenant has abandoned the Premises
following such breach, this Lease shall nevertheless continue in full force and
effect for as long as Landlord does not terminate Tenant's right of possession,
and until such termination, Landlord shall have the remedy described in Section
1951.4 of the California Civil Code (Landlord may continue this Lease in effect
after Tenant's breach and abandonment and recover Rent as it becomes due, if
Tenant has the right to sublet or assign, subject only to reasonable
limitations) and may enforce all its rights and remedies under this Lease,
including the right to recover the Rent from Tenant as it becomes due hereunder.
The "worth at the time of the award" within the meaning of Subparagraphs (a)(1)
and (a)(2) of Section 1951.2 of the California Civil Code shall be computed by
allowing interest at the rate of ten percent (10%) per annum. Tenant waives
redemption or relief from forfeiture under California Code of Civil Procedure
Sections 1174 and 1179, or under any other present or future law, in the event
Tenant is evicted or Landlord takes possession of the Premises by reason of any
default of Tenant hereunder.
21.3 RIGHTS AND REMEDIES CUMULATIVE: The foregoing rights and remedies
of Landlord are not exclusive; they are cumulative in addition to any rights and
remedies now or hereafter existing at law, in equity by statute or otherwise, or
to any equitable remedies Landlord may have, and to any remedies Landlord may
have under bankruptcy laws or laws affecting creditor's rights generally. In
addition to all remedies set forth above, if Tenant defaults or otherwise
breaches this Lease, any and all Base Rent waived by Landlord under Section 3
above shall be immediately due and payable to Landlord and all options granted
to Tenant hereunder shall automatically terminate, unless otherwise expressly
agreed to in writing by Landlord.
21.4 WAIVER OF A DEFAULT: The waiver by Landlord of any default or
breach of any provision of this Lease shall not be deemed or construed a waiver
of any other breach or default by Tenant
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hereunder or of any subsequent breach or default of this Lease, except for the
default specified in the waiver.
22. HOLDING OVER: If Tenant holds possession of the Premises after the
expiration of the term of this Lease with Landlord's consent, Tenant shall
become a tenant from month-to-month upon the terms and provisions of this Lease,
provided the monthly Base Rent during such hold over period shall be 150% of the
Base Rent due on the last month of the Lease term, payable in advance on or
before the first day of each month. Acceptance by Landlord of the monthly Base
Rent without the additional fifty percent (50%) increase of Base Rent shall not
be deemed or construed as a waiver by Landlord of any of its rights to collect
the increased amount of the Base Rent as provided herein at any time. Such
month-to-month tenancy shall not constitute a renewal or extension for any
further term. All options, if any, granted under the terms of this Lease shall
be deemed automatically terminated and be of no force or effect during said
month-to-month tenancy. Tenant shall continue in possession until such tenancy
shall be terminated by either Landlord or Tenant giving written notice of
termination to the other party at least thirty (30) days prior to the effective
date of termination. This paragraph shall not be construed as Landlord's
permission for Tenant to hold over. Acceptance of Base Rent by Landlord
following expiration or termination of this Lease shall not constitute a renewal
of this Lease.
23. LANDLORD'S DEFAULT: Landlord shall not be deemed in breach or default of
this Lease unless Landlord fails within a reasonable time to perform an
obligation required to be performed by Landlord hereunder. For purposes of this
provision, a reasonable time shall in no event be less than thirty (30) days
after receipt by Landlord of written notice specifying the nature of the
obligation Landlord has not performed; provided, however, that if the nature of
Landlord's obligation is such that more than thirty (30) days, after receipt of
written notice, is reasonably necessary for its performance, then Landlord shall
not be in breach or default of this Lease if performance of such obligation is
commenced within such thirty (30) day period and thereafter diligently pursued
to completion.
24. PARKING: Landlord shall make available to Tenant, and Tenant shall have [an
irrevocable] the license to use throughout the term of this Lease, the number of
undesignated and nonexclusive parking spaces set forth on Page 1. [Landlord
shall exercise reasonable efforts to insure that such spaces are available to
Tenant for its use, but Landlord shall not be required to enforce Tenant's right
to use the same.]
25. SALE OF PREMISES: In the event of any sale of the Premises by Landlord or
the cessation otherwise of Landlord's interest therein, Landlord shall be and is
hereby entirely released from any and all of its obligations to perform or
further perform under this Lease and from all liability hereunder [as of]
occurring after the date of such sale; and the purchaser, at such sale or any
subsequent sale of the Premises shall be deemed, without any further agreement
between the parties or their successors in interest or between the parties and
any such purchaser, to have assumed and agreed to carry out any and all of the
covenants and obligations of the Landlord under this Lease. For purposes of this
Section 25, the term "Landlord" means only the owner and/or agent of the owner
as such parties exist as of the date on which Tenant executes this Lease. A
ground lease or similar long term lease by Landlord of the entire Building, of
which the Premises are a part, shall be deemed a sale within the meaning of this
Section 25. Tenant agrees to attorn to such new owner provided such new owner
does not disturb Tenant's use, occupancy or quiet enjoyment of the Premises so
long as Tenant is not in default of any of the provisions of this Lease.
26. WAIVER: No delay or omission in the exercise of any right or remedy of
Landlord on any default by Tenant shall impair such a right or remedy or be
construed as a waiver. The subsequent acceptance of Rent by Landlord after
breach by Tenant of any covenant or term of this Lease shall not be deemed a
waiver of such breach, other than a waiver of timely payment for the particular
Rent payment involved, and shall not prevent Landlord from maintaining an
unlawful detainer or other action based on such breach. No payment by Tenant or
receipt by Landlord of a lesser amount than the monthly Rent and other sums due
hereunder shall be deemed to be other than on account of the earliest Rent or
other sums due, nor shall any endorsement or statement on any check or
accompanying any check or payment be deemed an accord and satisfaction; and
Landlord may accept such check or payment without prejudice to Landlord's right
to recover the balance of such Rent or other sum or pursue any other remedy
provided in this Lease. No failure, partial exercise or delay on the part of the
Landlord in exercising any right, power or privilege hereunder shall operate as
a waiver thereof.
27. CASUALTY DAMAGE: [If the Premises or any part thereof shall be damaged by
fire or other casualty, Tenant shall give prompt written notice thereof to
Landlord. In case the Building shall be so damaged by fire or other casualty
that substantial alteration or reconstruction of the Building shall, in
Landlord's sole opinion, be required (whether or not the Premises shall have
been damaged by such fire or other casualty), Landlord may, at its option,
terminate this Lease by notifying Tenant in writing of such termination within
sixty (60) days after the date of such damage, in which event the Rent shall be
abated]
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[as of the date of such damage. If Landlord does not elect to terminate this
Lease and provided insurance proceeds and any contributions from Tenant, if
necessary, are available to fully repair the damage, Landlord shall within
ninety (90) days after the date of such damage commence to repair and restore
the Building and shall proceed with reasonable diligence to restore the Building
(except that Landlord shall not be responsible for delays outside its control)
to substantially the same condition in which it was immediately prior to the
happening of the casualty; provided, Landlord shall not be required to rebuild,
repair, or replace any part of Tenant's furniture, furnishings or fixtures and
equipment removable by Tenant or any improvements, alterations or additions
installed by or for the benefit of Tenant under the provisions of this Lease.
Landlord shall not in any event be required to spend for such work an amount in
excess of the insurance proceeds (excluding any deductible) and any
contributions from Tenant, if necessary, actually received by Landlord as a
result of the fire or other casualty. Landlord shall not be liable for any
inconvenience or annoyance to Tenant, injury to the business of Tenant, loss of
use of any part of the Premises by the Tenant or loss of Tenant's personal
property resulting in any way from such damage or the repair thereof, except
that, subject to the provisions of the next sentence, Landlord shall allow
Tenant a fair diminution of Rent during the time and to the extent the Premises
are unfit for occupancy. If the Premises or any other portion of the Building be
damaged by fire or other casualty resulting from the intentional or negligent
acts or omissions of Tenant or any of Tenant's Representatives, the Rent shall
not be diminished during the repair of such damage and Tenant shall be liable to
Landlord for the cost and expense of the repair and restoration of all or any
portion of the Building caused thereby (including, without limitation, any
deductible) to the extent such cost and expense is not covered by insurance
proceeds. In the event the holder of any indebtedness secured by the Premises
requires that the insurance proceeds be applied to such indebtedness, then
Landlord shall have the right to terminate this Lease by delivering written
notice of termination to Tenant within thirty (30) days after the date of notice
to Tenant of any such event, whereupon all rights and obligations shall cease
and terminate hereunder. Except as otherwise provided in this Section 27, Tenant
hereby waives the provisions of Sections 1932(2.), 1933(4.), 1941 and 1942 of
the California Civil Code.]
27.1 CASUALTY. If the Premises or any part thereof (excluding any
alterations or improvements installed by or for the benefit of Tenant) shall be
damaged or destroyed by fire or other casualty, Tenant shall give immediate
written notice thereof to Landlord. Within thirty (30) days after receipt by
Landlord of such notice, Landlord shall notify Tenant, in writing, whether the
necessary repairs can reasonably be made: (a) within ninety (90) days; (b) in
more than ninety (90) days but in less than one hundred eighty (180) days; or
(c) in more than one hundred eighty (180) days, from the date of such notice.
27.1.1 MINOR INSURED DAMAGE. If the Premises are damaged only
to such extent that repairs, rebuilding and/or restoration can be reasonably
completed within ninety (90) days, this Lease shall not terminate and, provided
that insurance proceeds are available to fully repair the damage, Landlord shall
repair the Premises to substantially the same condition that existed prior to
the occurrence of such casualty, except Landlord shall not be required to
rebuild, repair, or replace any alterations or improvements installed by or for
the benefit of Tenant or any part of Tenant's furniture, furnishings or fixtures
and equipment removable by Tenant. The Rent payable hereunder shall be abated
proportionately from the date Tenant vacates the Premises only to the extent
rental abatement insurance proceeds are received by Landlord and the Premises
are unfit for occupancy.
27.1.2 INSURED DAMAGE REQUIRING MORE THAN 90 DAYS TO REPAIR.
If the Premises are damaged only to such extent that repairs, rebuilding and/or
restoration can be reasonably completed in more than ninety (90) days but in
less than one hundred eighty (180) days, then Landlord shall have the option of:
(a) terminating the Lease effective upon the occurrence of such damage, in which
event the Rent shall be abated from the date Tenant vacates the Premises; or (b)
electing to repair the Premises to substantially the same condition that existed
prior to the occurrence of such casualty, provided insurance proceeds are
available to fully repair the damage (except that Landlord shall not be required
to rebuild, repair, or replace any alterations or improvements installed by or
for the benefit of Tenant or any part of Tenant's furniture, furnishings or
fixtures and equipment removable by Tenant). The Rent payable hereunder shall be
abated proportionately from the date Tenant vacates the Premises only to the
extent rental abatement insurance proceeds are received by Landlord and the
Premises are unfit for occupancy. If Landlord should fail to substantially
complete such repairs within one hundred eighty (180) days after the date on
which Landlord is notified by Tenant of the occurrence of such casualty (such
180-day period to be extended for delays caused by Tenant or any force majeure
events), Tenant may within twenty (20) days after expiration of such one hundred
eighty (180) day period (as same may be extended), terminate this Lease by
delivering written notice to Landlord as Tenant's exclusive remedy, whereupon
all rights of Tenant hereunder shall cease and terminate twenty (20) days after
Landlord's receipt of such notice.
27.1.3 MAJOR INSURED DAMAGE. If the Premises are damaged to
such extent that repairs, rebuilding and/or restoration cannot be reasonably
completed within one hundred eighty (180) days, then either Landlord or Tenant
may terminate this Lease by giving written notice within twenty (20) days after
notice from Landlord regarding the time period of repair. If either party
notifies the other of its intention to so terminate the Lease, then this Lease
shall terminate and the Rent shall be abated from the date Tenant vacates the
Premises. If neither party elects to terminate this Lease, Landlord shall
promptly commence and diligently prosecute to completion the repairs to the
Premises, provided insurance proceeds are available to fully repair the damage
(except that Landlord shall not be required to rebuild, repair, or replace any
alterations or improvements installed by or for the benefit of Tenant or any
part of Tenant's
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furniture, furnishings or fixtures and equipment removable by Tenant). During
the time when Landlord is prosecuting such repairs to completion, the Rent
payable hereunder shall be abated proportionately from the date Tenant vacates
the Premises only to the extent rental abatement insurance proceeds are received
by Landlord and only during the time period that the Premises are unfit for
occupancy.
27.1.4 DAMAGE NEAR END OF TERM. Notwithstanding anything to
the contrary contained in this Lease except for the provisions of Section 27.2
below, if the Premises are damaged or destroyed during the last year of then
applicable term of this Lease, Landlord may, at its option, cancel and terminate
this Lease by giving written notice to Tenant of its election to do so within
thirty (30) days after receipt by Landlord of notice from Tenant of the
occurrence of such casualty. If Landlord so elects to terminate this Lease, all
rights of Tenant hereunder shall cease and terminate ten (10) days after
Tenant's receipt of such notice.
27.2 TENANT'S OR TENANT'S REPRESENTATIVE'S FAULT. If any portion of the
Premises is damaged or destroyed due to the fault, negligence (active or
passive) or breach of this Lease by Tenant or any of Tenant's Representatives,
Rent shall not be diminished during the repair of such damage and Tenant shall
be liable to Landlord for the cost of the repair caused thereby to the extent
such cost is not covered by insurance proceeds.
27.3 UNINSURED CASUALTY. Tenant shall be responsible for and shall pay
to Landlord, as Additional Rent, any deductibles amount under the property
insurance for the Premises and/or the Building. If any portion of the Premises
is damaged and is not fully covered by insurance proceeds received by Landlord
(and Tenant elects not to pay any such difference) or if the holder of any
indebtedness secured by the Premises requires that the insurance proceeds be
applied to such indebtedness, then Landlord shall have the right to terminate
this Lease by delivering written notice of termination to the other party within
thirty (30) days after the date of notice to Tenant of any such event, whereupon
all rights and obligations shall cease and terminate hereunder, except for those
obligations expressly provided for in this Lease to survive such termination of
the Lease.
27.4 TENANT'S WAIVER. Landlord shall not be liable for any inconvenience
or annoyance to Tenant, injury to the business of Tenant, loss of use of any
part of the Premises by Tenant or loss of Tenant's personal property, resulting
in any way from such damage, destruction or the repair thereof, except that,
Landlord shall allow Tenant a fair diminution of Rent during the time and to the
extent the Premises are unfit for occupancy as specifically provided above in
this Section 27. With respect to any damage or destruction which Landlord is
obligated to repair or may elect to repair, Tenant hereby waives all rights to
terminate this Lease or offset any amounts against Rent pursuant to rights
accorded Tenant by any law currently existing or hereafter enacted, including
but not limited to, all rights pursuant to the provisions of Sections 1932(2.),
1933(4.), 1941 and 1942 of the California Civil Code, as the same may be amended
or supplemented from time to time. Notwithstanding anything to the contrary
contained herein, if the holder of any indebtedness secured by the Premises
requires that the insurance proceeds be applied to such indebtedness, then
Landlord shall have the right to terminate this Lease by delivering written
notice of termination to Tenant within thirty (30) days after the date of notice
to Tenant of any such event, whereupon all rights and obligations shall cease
and terminate hereunder, except for those obligations expressly provided for in
this Lease to survive such termination of the Lease.
27.5 REPAIR AND RESTORATION BY TENANT. Notwithstanding the foregoing but
subject to (i) the rights of any lender of Landlord, and/or (ii) Landlord's
right to determine, in its sole and absolute discretion, to reconfigure the Park
or any of the buildings situated within the Park, including without limitation,
the Premises or the Building (in which event Landlord may rescind the following
described right conferred upon Tenant herein), if there is any damage or
destruction to the Premises caused by fire or other casualty and the balance of
the leased space within the Building is not substantially damaged or destroyed
by any such fire or other casualty, Tenant shall have the right, but not the
obligation under the provisions of this Section 27.5, to repair such damage and
completely restore the Premises at Tenant's sole cost and expense (without any
contribution from Landlord or Landlord's insurers) and keep this Lease in full
force and effect. The foregoing right granted to Tenant in this Section 27.5
shall be subject to the satisfaction of all of the following conditions: (a)
Tenant shall promptly notify Landlord of its election to so repair and restore
the Premises; (b) Tenant shall promptly prepare and deliver to Landlord, for
Landlord's prior written approval, all plans, specifications, drawings and other
information and schematics as Landlord may request; (c) Tenant shall obtain, and
deliver a copy to Landlord of, all permits and licenses for such work; (d)
Tenant shall comply with all of the provisions of Section 10.1 with respect to
such work; (e) Tenant and Tenant's contractors shall procure and maintain
throughout the time period during which such work is being performed builder's
risk insurance with such insurers as required by the provisions of Section 12
above and Tenant shall also comply with all of the provisions of Section 12
pertaining to insurance, including without limitation, naming Landlord and its
property management company (if other than Landlord), partners and lenders as
additional insureds thereunder, and delivering certificates of insurance to
Landlord; (f) after the completion of such work, Tenant shall deliver to
Landlord as-built plans and any certificate of occupancy or other approvals
issued by applicable governmental agencies with respect to the completion of
such work; (g) Tenant shall promptly commence and diligently pursue such repair
and restoration work; and (h) during the time period such repair and restoration
work is being performed, Rent shall only be abated to the extent rental
abatement proceeds are actually received by Landlord and the Premises are unfit
for occupancy.
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28. CONDEMNATION: If twenty-five percent (25%) or more of the Premises is
condemned by eminent domain, inversely condemned or sold in lieu of condemnation
for any public or quasi-public use or purpose ("Condemned"), then Tenant or
Landlord may terminate this Lease as of the date when physical possession of the
Premises is taken and title vests in such condemning authority, and Rent shall
be adjusted to the date of termination. Tenant shall not because of such
condemnation assert any claim against Landlord or the condemning authority for
any compensation because of such condemnation, and Landlord shall be entitled to
receive the entire amount of any award without deduction for any estate of
interest or other interest of Tenant. If a substantial portion of the Premises,
Building or the Lot is so Condemned, Landlord [at its] or Tenant, at either
party's option may terminate this Lease. If [Landlord does not] neither party
elects to terminate this Lease, Landlord shall, if necessary, promptly proceed
to restore the Premises or the Building to substantially its same condition
prior to such partial condemnation, allowing for the reasonable effects of such
partial condemnation, and a proportionate allowance shall be made to Tenant, as
[solely] reasonably determined by Landlord, for the Rent corresponding to the
time during which, and to the part of the Premises of which, Tenant is deprived
on account of such partial condemnation and restoration. Landlord shall not be
required to spend funds for restoration in excess of the amount received by
Landlord as compensation awarded.
29. ENVIRONMENTAL MATTERS/HAZARDOUS MATERIALS:
29.1 HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE: Prior to executing this
Lease, Tenant has completed, executed and delivered to Landlord [the] Tenant's
initial Hazardous Materials Disclosure Certificate (the "Initial HazMat
Certificate"), a copy of which is attached hereto as Exhibit G E and
incorporated herein by this reference. Tenant covenants, represents and warrants
to Landlord that, to the best of Tenant's knowledge after due inquiry, the
information on the Initial HazMat Certificate is true and correct and accurately
describes the use(s) of Hazardous Materials which will be made and/or used on
the Premises by Tenant. Tenant shall commencing with the date which is one year
from the Commencement Date and continuing every year thereafter, complete,
execute, and deliver to Landlord, a Hazardous Materials Disclosure Certificate
(the "HazMat Certificate") describing Tenant's present use of Hazardous
Materials on the Premises, and any other reasonably necessary documents as
requested by Landlord. The HazMat Certificate required hereunder shall be in
substantially the form as that which is attached hereto as Exhibit E. Landlord
hereby acknowledges and agrees that as of the date on which both parties execute
and deliver this Lease, Landlord has approved the Initial HazMat Certificate.
29.2 DEFINITION OF HAZARDOUS MATERIALS: As used in this Lease, the term
Hazardous Materials shall mean and include (a) any hazardous or toxic wastes,
materials or substances, and other pollutants or contaminants, which are or
become regulated by any Environmental Laws; (b) petroleum, petroleum by
products, gasoline, diesel fuel, crude oil or any fraction thereof; (c) asbestos
and asbestos containing material, in any form, whether friable or non-friable;
(d) polychlorinated biphenyls; (e) radioactive materials; (f) lead and
lead-containing materials; (g) any other material, waste or substance displaying
toxic, reactive, ignitable or corrosive characteristics, as all such terms are
used in their broadest sense, and are defined or become defined by any
Environmental Law (defined below); or (h) any materials which cause or threatens
to cause a nuisance upon or waste to any portion of the Premises, the Building,
the Lot, the Park or any surrounding property; or poses or threatens to pose a
hazard to the health and safety of persons on the Premises or any surrounding
property.
29.3 PROHIBITION; ENVIRONMENTAL LAWS: Except for, and to the extent of,
the type and quantities of Hazardous Materials specified in the Initial HazMat
Certificate, Tenant shall not be entitled to use nor store any Hazardous
Materials on, in, or about the Premises, the Building, the Lot and the Park, or
any portion of the foregoing, without, in each instance, obtaining Landlord's
prior written consent thereto. If Landlord consents to any such usage or
storage, then Tenant shall be permitted to use and/or store only those Hazardous
Materials that are necessary for Tenant's business and to the extent disclosed
in the then applicable HazMat Certificate and as expressly approved by Landlord
in writing, provided that such usage and storage is only to the extent of the
quantities of Hazardous Materials as specified in the then applicable HazMat
Certificate as expressly approved by Landlord and provided further that such
usage and storage is in full compliance with any and all local, state and
federal environmental, health and/or safety-related laws, statutes, orders,
standards, courts' decisions, ordinances, rules and regulations (as interpreted
by judicial and administrative decisions), decrees, directives, guidelines,
permits or permit conditions, currently existing and as amended, enacted, issued
or adopted in the future which are or become applicable to Tenant or all or any
portion of the Premises (collectively, the "Environmental Laws"). Tenant agrees
that any changes to the type and/or quantities of Hazardous Materials specified
in the most recent HazMat Certificate may be implemented only with the prior
written consent of Landlord, which consent [may be given or withheld in
Landlord's sole discretion] shall not be unreasonably withheld. Tenant shall not
be entitled nor permitted to install any tanks under, on or about the Premises
for the storage of Hazardous Materials without the express written consent of
Landlord, which may be given or withheld in Landlord's sole discretion. Landlord
shall have the right at all times, but not more than twice per year (unless
Tenant is then in default or Landlord has reason to believe that the Premises
have been contaminated) during the term of this Lease to (i) inspect the
Premises, (ii) conduct tests and investigations to determine whether Tenant is
in compliance with the provisions of this Section 29, and (iii) request lists of
all Hazardous Materials used, stored or otherwise located on, under or about the
Premises, the Common Areas and/or the parking lots (to the extent the Common
Areas and/or the parking lots are not considered part of the Premises). The cost
of all such inspections, tests
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and investigations shall be borne solely by Tenant, if Landlord reasonably
[believes they are necessary]determines that Tenant or any of Tenant's
Representatives are [directly or indirectly] responsible in any manner for any
contamination revealed by such inspections, tests and investigations. The
aforementioned rights granted herein to Landlord and its representatives shall
not create (a) a duty on Landlord's part to inspect, test, investigate, monitor
or otherwise observe the Premises or the activities of Tenant and Tenant's
Representatives with respect to Hazardous Materials, including without
limitation, Tenant's operation, use and any remediation related thereto, or (b)
liability on the part of Landlord and its representatives for Tenant's use,
storage, disposal or remediation of Hazardous Materials, it being understood
that Tenant shall be solely responsible for all liability in connection
therewith.
29.4 TENANT'S ENVIRONMENTAL OBLIGATIONS: Tenant shall give to Landlord
immediate verbal and follow-up written notice of any spills, releases,
discharges, disposals, emissions, migrations, removals or transportation of
Hazardous Materials on, under or about the Premises, or in any Common Areas or
parking lots (to the extent such areas are not considered part of the Premises).
Tenant, at its sole cost and expense, covenants and warrants to promptly
investigate, clean up, remove, restore and otherwise remediate (including,
without limitation, preparation of any feasibility studies or reports and the
performance of any and all closures) any spill, release, discharge, disposal,
emission, migration or transportation of Hazardous Materials arising from or
related to the intentional or negligent acts or omissions of Tenant or Tenant's
Representatives such that the affected portions of the Park and any adjacent
property are returned to the condition existing prior to the appearance of such
Hazardous Materials. Any such investigation, clean up, removal, restoration and
other remediation shall only be performed after Tenant has obtained Landlord's
prior written consent, which consent shall not be unreasonably withheld so long
as such actions would not potentially have a material adverse long-term or
short-term effect on the Premises, the Building, the Lot or the Park, or any
portion of any of the foregoing. Notwithstanding the foregoing, Tenant shall be
entitled to respond immediately to an emergency without first obtaining
Landlord's prior written consent. Tenant, at its sole cost and expense, shall
conduct and perform, or cause to be conducted and performed, all closures as
required by any Environmental Laws or any agencies or other governmental
authorities having jurisdiction thereof. If Tenant fails to so promptly
investigate, clean up, remove, restore, provide closure or otherwise so
remediate, Landlord may, but without obligation to do so, take any and all steps
necessary to rectify the same and Tenant shall promptly reimburse Landlord, upon
demand, for all costs and expenses to Landlord of performing investigation,
clean up, removal, restoration, closure and remediation work. All such work
undertaken by Tenant, as required herein, shall be performed in such a manner so
as to enable Landlord to make full economic use of the Premises, the Building,
the Lot and the Park after the satisfactory completion of such work.
29.5 ENVIRONMENTAL INDEMNITY: In addition to Tenant's obligations as set
forth hereinabove, Tenant [and Tenant's officers and directors] agrees to, and
shall, protect, indemnify, defend (with counsel acceptable to Landlord) and hold
Landlord and Landlord's lenders, partners, property management company (if other
than Landlord), agents, directors, officers, employees, representatives,
contractors, shareholders, successors and assigns and each of their respective
partners, directors, employees, representatives, agents, contractors,
shareholders, successors and assigns harmless from and against any and all
claims, judgments, damages, penalties, fines, liabilities, losses (including,
without limitation, diminution in value of the Premises, the Building, the Lot,
the Park, or any portion of any of the foregoing, damages for the loss of or
restriction on the use of rentable or usable space, and from any adverse impact
of Landlord's marketing of any space within the Building and/or Park), suits,
administrative proceedings and costs (including, but not limited to, attorneys'
and consultant fees and court costs) arising at any time during or after the
term of this Lease in connection with or related to, directly or indirectly, the
use, presence, transportation, storage, disposal, migration, removal, spill,
release or discharge of Hazardous Materials on, in or about the Premises, or in
any Common Areas or parking lots (to the extent such areas are not considered
part of the Premises) as a result (directly or indirectly) of the intentional or
negligent acts or omissions of Tenant or Tenant's Representatives. The foregoing
indemnity shall not include any claims, judgments, damages, penalties, fines,
liabilities or losses related in any way to the residual hazardous substances
described in Section 29.7 below. Neither the written consent of Landlord to the
presence, use or storage of Hazardous Materials in, on, under or about any
portion of the Premises, the Building, the Lot and the Park, nor the strict
compliance by Tenant with all Environmental Laws shall excuse Tenant [and
Tenant's officers and directors] from its obligations of indemnification
pursuant hereto. To the extent Landlord is strictly liable under any
Environmental Laws, Tenant's obligations to Landlord under this Section 29 and
the indemnity contained herein shall likewise be without regard to fault on
Tenant's part with respect to the violation of any Environmental Law which
results in liability to any of the aforementioned indemnitees.
Tenant shall not be liable for nor otherwise obligated to Landlord under
any provision of the Lease with respect to (i) any claim, remediation
obligation, investigation obligation, liability, cause of action, attorney's
fees, consultants' cost, expense or damage resulting from any Hazardous Material
present in, on or about the Premises or any of the Buildings in Phase VI to the
extent not caused nor otherwise permitted, directly or indirectly, by Tenant or
Tenant's Representatives, including without limitation, any residual Hazardous
Materials which are present in, on or about the Premises, the Building or the
Lot as of the Lease Date including any residual hazardous substances referred to
in section 29.7 below; or (ii) the removal, investigation, monitoring or
remediation of any Hazardous Material present in, on or about the Premises or
the Building caused by any source, including third parties other than Tenant and
Tenant's Representatives, as a result of or in connection with the acts or
omissions of persons other than Tenant
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or Tenant's Representatives; provided, however, Tenant shall be fully liable for
and otherwise obligated to Landlord under the provisions of this Lease for all
liabilities, costs, damages, penalties, claims, judgments, expenses (including
without limitation, attorneys' and experts' fees and costs) and losses to the
extent (a) Tenant or any of Tenant's Representatives contributes to the presence
of such Hazardous Materials or Tenant and/or any of Tenant's Representatives
exacerbates the conditions caused by such Hazardous Materials, or (b) Tenant
and/or Tenant's Representatives allows or permits persons over which Tenant or
any of Tenant's Representatives has control and/or for which Tenant or any of
Tenant's Representatives are legally responsible for, to cause such Hazardous
Materials to be present in, on, under, through or about any portion of the
Premises, any of the Buildings in Phase VI or the Park, or does not take all
reasonably appropriate actions to prevent such persons over which Tenant or any
of Tenant's Representatives has control and/or for which Tenant or any of
Tenant's Representatives are legally responsible from causing the presence of
Hazardous Materials in, on, under, through or about any portion of the Premises,
any of the Buildings in Phase VI or the Park. At Tenant's written request,
Landlord shall make available for review by Tenant in Landlord's offices any
environmental reports, evaluations or information bearing on the environmental
condition of the Premises, any of the Buildings in Phase VI or the Park to the
extent same is in Landlord's possession at Landlord's offices and to the extent
not otherwise treated as confidential or otherwise protected under any
attorney-client privilege, attorney work-product privilege or similar laws.
29.6 SURVIVAL: Tenant's obligations and liabilities pursuant to the
provisions of this Section 29 shall survive the expiration or earlier
termination of this Lease. If it is determined by Landlord's environmental
consultants in concurrence with Tenant's environmental consultants (both
environmental consultants to act reasonably and in good faith) that the
condition of all or any portion of the Premises, the Building, the Lot and/or
the Park is not in compliance with the provisions of this Lease due to the acts
or omissions of Tenant or any of Tenant's Representatives with respect to
Hazardous Materials, including without limitation [all]any violation of
applicable Environmental Laws at the expiration or earlier termination of this
Lease, then at Landlord's sole option, Landlord may require Tenant to hold over
possession of the Premises until Tenant can surrender the Premises to Landlord
in the condition in which the Premises existed as of the Commencement Date and
prior to the appearance of such Hazardous Materials except for reasonable wear
and tear, including without limitation, the conduct or performance of any
closures as required by any Environmental Laws. [The burden of proof hereunder
shall be upon Tenant.] For purposes hereof, the term "reasonable wear and tear"
shall not include any deterioration in the condition or diminution of the value
of any portion of the Premises, the Building, the Lot and/or the Park in any
manner whatsoever related to directly, or indirectly, Hazardous Materials. Any
such holdover by Tenant will be with Landlord's consent, will not be terminable
by Tenant in any event or circumstance and will otherwise be subject to the
provisions of Section 22 of this Lease.
29.7 DISCLOSURE: The land described herein contains residual hazardous
substances. Such condition renders the land and the owner, Tenant or other
possessor of the land subject to requirements, restrictions, provisions, and
liabilities contained in Chapter 6.5 and Chapter 6.8 of division 20 of the
Health and Safety Code, as same may be amended from time, and any successor
statutes thereof. This statement is not a declaration that a hazard to public
health, safety and welfare exists.
30. FINANCIAL STATEMENTS: Tenant and/or a Related Entity, as the case may
be, for the reliance of Landlord, any lender holding or anticipated to acquire a
lien upon the Premises, the Building or the Park or any portion thereof, or any
prospective purchaser of the Building or the Park or any portion thereof, within
ten (10) business days after Landlord's request therefor, but not more often
than once annually so long as Tenant or a Related Entity, as applicable is not
in default of this Lease, shall deliver to Landlord the then current audited
financial statements of Tenant and/or a Related Entity, as the case may be,
(including interim periods following the end of the last fiscal year for which
annual statements are available) which statements shall be prepared or compiled
by a certified public accountant and shall present fairly the financial
condition of Tenant and/or a Related Entity, as the case may be, at such dates
and the result of its operations and changes in its financial positions for the
periods ended on such dates. If an audited financial statement has not been
prepared, Tenant and/or a Related Entity, as the case may be, shall provide
Landlord with an unaudited financial statement and/or such other information,
the type and form of which are acceptable to Landlord in Landlord's reasonable
discretion, which reflects the financial condition of Tenant and/or a Related
Entity, as the case may be. If Landlord so requests, Tenant or a Related Entity,
as applicable, shall deliver to Landlord an opinion of a certified public
accountant, including a balance sheet and profit and loss statement for the most
recent prior year, all prepared in accordance with generally accepted accounting
principles consistently applied. Any and all options granted to Tenant hereunder
shall be subject to and conditioned upon Landlord's reasonable approval of
Tenant's financial or a Related Entity's (as applicable) condition at the time
of Tenant's exercise of any such option.
31. GENERAL PROVISIONS:
31.1 TIME. Time is of the essence in this Lease and with respect to each
and all of its provisions in which performance is a factor.
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31.2 SUCCESSORS AND ASSIGNS. The covenants and conditions herein
contained, subject to the provisions as to assignment, apply to and bind the
heirs, successors, executors, administrators and assigns of the parties hereto.
31.3 RECORDATION. Tenant shall not record this Lease or a short form
memorandum hereof without the prior written consent of the Landlord.
31.4 LANDLORD'S PERSONAL LIABILITY. The liability of Landlord (which,
for purposes of this Lease, shall include Landlord and the owner of the Building
if other than Landlord) to Tenant for any default by Landlord under the terms of
this Lease shall be limited to the actual interest of Landlord and its present
or future partners in the Premises or the Building and Tenant agrees to look
solely to the Premises for satisfaction of any liability and shall not look to
other assets of Landlord nor seek any recourse against the assets of the
individual partners, directors, officers, shareholders, agents or employees of
Landlord; it being intended that Landlord and the individual partners,
directors, officers, shareholders, agents or employees of Landlord shall not be
personally liable in any manner whatsoever for any judgment or deficiency. The
liability of Landlord under this Lease is limited to its actual period of
ownership of title to the Building, and Landlord shall be automatically released
from further performance under this Lease and from all further liabilities and
expenses hereunder upon transfer of Landlord's interest in the Premises or the
Building.
31.5 SEPARABILITY. Any provisions of this Lease which shall prove to be
invalid, void or illegal shall in no way affect, impair or invalidate any other
provisions hereof and such other provision shall remain in full force and
effect.
31.6 CHOICE OF LAW. This Lease shall be governed by and construed in
accordance with the laws of the State of California.
31.7 ATTORNEYS' FEES. In the event any dispute between the parties
result in litigation or other proceeding, the prevailing party shall be
reimbursed by the party not prevailing for all reasonable costs and expenses,
including, without limitation, reasonable attorneys' and experts' fees and costs
incurred by the prevailing party in connection with such litigation or other
proceeding and any appeal thereof. Such costs, expenses and fees shall be
included in and made a part of the judgment recovered by the prevailing party,
if any.
31.8 ENTIRE AGREEMENT. This Lease supersedes any prior agreements,
representations, negotiations or correspondence between the parties, and
contains the entire agreement of the parties on matters covered. No other
agreement, statement or promise made by any party that is not in writing and
signed by all parties to this Lease shall be binding.
31.9 WARRANTY OF AUTHORITY. On the date that Tenant executes this Lease,
Tenant shall deliver to Landlord an original certificate of status for Tenant
issued by the California Secretary of State or statement of partnership for
Tenant recorded in the county in which the Premises are located, as applicable,
and such other documents as Landlord may reasonably request with regard to the
lawful existence of Tenant. Each person executing this Lease on behalf of a
party represents and warrants that (1) such person is duly and validly
authorized to do so on behalf of the entity it purports to so bind, and (2) if
such party is a partnership, corporation or trustee, that such partnership,
corporation or trustee has full right and authority to enter into this Lease and
perform all of its obligations hereunder. In addition to any other remedies
available to Landlord under this Lease, if there is any breach of the foregoing
warranty, the person(s) executing this Lease on behalf of Tenant shall be
personally liable for all of Tenant's obligations under this Lease, including,
but not limited to, the payment by such person(s) to Landlord of any and all
losses, liabilities, costs, expenses and damages incurred by Landlord hereunder.
31.10 NOTICES. Any and all notices and demands required or permitted to
be given hereunder to Landlord shall be in writing and shall be sent: (a) by
United States mail, certified and postage prepaid; or (b) by personal delivery;
or (c) by overnight courier, addressed to Landlord at 101 Lincoln Centre Drive,
Fourth Floor, Foster City, California 94404-1167. Any and all notices and
demands required or permitted to be given hereunder to Tenant shall be in
writing and shall be sent: (i) by United States mail, certified and postage
prepaid; or (ii) by personal delivery to any employee or agent of Tenant over
the age of eighteen (18) years of age; or (iii) by overnight courier, all of
which shall be addressed to Tenant at the Premises; or (iv) by facsimile at the
facsimile number at the Premises, if any, as provided by Tenant on Page 1 of
this Lease or otherwise provided to Landlord. Notice and/or demand shall be
deemed given upon the earlier of actual receipt or the third day following
deposit in the United States mail. Notice and/or demand by facsimile shall be
complete upon transmission over the telephone line. Any notice or requirement of
service required by any statute or law now or hereafter in effect, including,
but not limited to, California Code of Civil Procedure Sections 1161, 1161.1,
and 1162, is hereby waived by Tenant.
31.11 JOINT AND SEVERAL. If Tenant consists of more than one person or
entity, the obligations of all such persons or entities shall be joint and
several.
31.12 COVENANTS AND CONDITIONS. Each provision to be performed by Tenant
hereunder shall be deemed to be both a covenant and a condition.
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31.13 WAIVER OF JURY TRIAL. The parties hereto shall and they hereby do
waive trial by jury in any action, proceeding or counterclaim brought by either
of the parties hereto against the other on any matters whatsoever arising out of
or in any way related to this Lease, the relationship of Landlord and Tenant,
Tenant's use or occupancy of the Premises, the Building or the Park, and/or any
claim of injury, loss or damage.
31.14 COUNTERCLAIMS. In the event Landlord commences any proceedings for
nonpayment of Base Rent[, Additional Rent, or any other sums or amounts due
hereunder], Tenant shall not interpose any counterclaim of whatever nature or
description in any such proceedings, provided, however, nothing contained herein
shall be deemed or construed as a waiver of the Tenant's right to assert such
claims in any separate action brought by Tenant or the right to offset the
amount of any final judgment owed by Landlord to Tenant.
31.15 UNDERLINING. The use of underlining within the Lease is for
Landlord's reference purposes only and no other meaning or emphasis is intended
by this use, nor should any be inferred.
32. SIGNS: All signs and graphics of every kind visible in or from public
view or corridors or the exterior of the Premises shall be subject to Landlord's
prior written approval and shall be subject to any applicable governmental laws,
ordinances, and regulations and in compliance with Landlord's [S]sign
[C]criteria as same may exist from time to time [set forth in Exhibit G hereto
and made a part hereof]. Tenant shall remove all such signs and graphics prior
to the termination of this Lease. Such installations and removals shall be made
in a manner as to avoid damage or defacement of the Premises; and Tenant shall
repair any damage or defacement, including without limitation, discoloration
caused by such installation or removal. Landlord shall have the right, at its
option, to deduct from the Security Deposit such sums as are reasonably
necessary to remove such signs, including, but not limited to, the costs and
expenses associated with any repairs necessitated by such removal.
Notwithstanding the foregoing, in no event shall any: (a) neon, flashing or
moving sign(s) or (b) sign(s) which shall interfere with the visibility of any
sign, awning, canopy, advertising matter, or decoration of any kind of any other
business or occupant of the Building or the Park be permitted hereunder. Tenant
further agrees to maintain any such sign, awning, canopy, advertising matter,
lettering, decoration or other thing as may be approved in good condition and
repair at all times.
33. MORTGAGEE PROTECTION: Upon any breach or default on the part of
Landlord, Tenant will give written notice by registered or certified mail to any
beneficiary of a deed of trust or mortgagee of a mortgage covering the Premises
who has provided Tenant with notice of their interest together with an address
for receiving notice, and shall offer such beneficiary or mortgagee a reasonable
opportunity to cure the default (which, in no event shall be less than ninety
(90) days), including time to obtain possession of the Premises by power of sale
or a judicial foreclosure, if such should prove necessary to effect a cure. If
such breach or default cannot be cured within such time period, then such
additional time as may be necessary will be given to such beneficiary or
mortgagee to effect such cure so long as such beneficiary or mortgagee has
commenced the cure within the original time period and thereafter diligently
pursues such cure to completion, in which event this Lease shall not be
terminated while such cure is being diligently pursued. Tenant agrees that each
lender to whom this Lease has been assigned by Landlord is an express third
party beneficiary hereof. Tenant shall not make any prepayment of Rent more than
one (1) month in advance without the prior written consent of each such lender,
except if Tenant is required to make quarterly payments of Rent in advance
pursuant to the provisions of Section 8 above. Tenant waives the collection of
any deposit from such lender(s) or any purchaser at a foreclosure sale of such
lender(s)' deed of trust unless the lender(s) or such purchaser shall have
actually received and not refunded the deposit. Tenant agrees to make all
payments under this Lease to the lender with the most senior encumbrance upon
receiving a direction, in writing, to pay said amounts to such lender. Tenant
shall comply with such written direction to pay without determining whether an
event of default exists under such lender's loan to Landlord.
34. QUITCLAIM: Upon any termination of this Lease, Tenant shall, at
Landlord's request, execute, have acknowledged and deliver to Landlord a
quitclaim deed of Tenant's interest in and to the Premises. If Tenant fails to
so deliver to Landlord such a quitclaim deed, Tenant hereby agrees that Landlord
shall have the full authority and right to record such a quitclaim deed signed
only by Landlord and such quitclaim deed shall be deemed conclusive and binding
upon Tenant.
35. MODIFICATIONS FOR LENDER: If, in connection with obtaining financing for
the Premises or any portion thereof, Landlord's lender shall request reasonable
modification(s) to this Lease as a condition to such financing, Tenant shall not
unreasonably withhold, delay or defer its consent thereto, provided such
modifications do not materially adversely affect Tenant's rights hereunder or
the use, occupancy or quiet enjoyment of Tenant hereunder. If the foregoing
occurs Landlord will reimburse Tenant for any reasonable out-of-pocket costs and
expenses incurred by Tenant in connection with such modifications.
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36. WARRANTIES OF TENANT: Tenant hereby warrants and represents to Landlord, for
the express benefit of Landlord, that Tenant has undertaken a complete and
independent evaluation of the risks inherent in the execution of this Lease and
the operation of the Premises for the use permitted hereby, and that, based upon
said independent evaluation, Tenant has elected to enter into this Lease and
hereby assumes all risks with respect thereto. Tenant hereby further warrants
and represents to Landlord, for the express benefit of Landlord, that in
entering into this Lease, Tenant has not relied upon any statement, fact,
promise or representation (whether express or implied, written or oral) not
specifically set forth herein in writing and that any statement, fact, promise
or representation (whether express or implied, written or oral) made at any time
to Tenant, which is not expressly incorporated herein in writing, is hereby
waived by Tenant.
37. COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT: Landlord and Tenant hereby
agree and acknowledge that the Premises, the Building and/or the Park may be
subject to the requirements of the Americans with Disabilities Act, a federal
law codified at 42 U.S.C. 12101 et seq, including, but not limited to Title III
thereof, all regulations and guidelines related thereto, together with any and
all laws, rules, regulations, ordinances, codes and statutes now or hereafter
enacted by local or state agencies having jurisdiction thereof, including all
requirements of Title 24 of the State of California, as the same may be in
effect on the date of this Lease and may be hereafter modified, amended or
supplemented (collectively, the "ADA"). Any Tenant Improvements to be
constructed hereunder shall be in compliance with the requirements of the ADA,
and all costs incurred for purposes of compliance therewith shall be a part of
and included in the costs of the Tenant Improvements. Tenant shall be solely
responsible for conducting its own independent investigation of this matter and
for ensuring that the design of all Tenant Improvements strictly comply with all
requirements of the ADA. Subject to reimbursement pursuant to Section 6 of the
Lease, if any barrier removal work or other work is required to the Building,
the Common Area or the Park under the ADA, then such work shall be the
responsibility of Landlord; provided, if such work is required under the ADA as
a result of Tenant's use of the Premises or any work or alteration made to the
Premises by or on behalf of Tenant, then such work shall be performed by
Landlord at the sole cost and expense of Tenant. Except as otherwise expressly
provided in this provision, Tenant shall be responsible at its sole cost and
expense for fully and faithfully complying with all applicable requirements of
the ADA, including without limitation, not discriminating against any disabled
persons in the operation of Tenant's business in or about the Premises, and
offering or otherwise providing auxiliary aids and services as, and when,
required by the ADA, provided that Tenant shall not be responsible for any costs
attributable to compliance with the provisions of the ADA, as the ADA is in
effect as of the Lease Date, nor any costs attributable to compliance with the
ADA as a result of any activity or use by any other tenant in the Building so
long as such activity or use is not in any manner associated with Tenant's or
Tenant's Representatives' use of any portion of the Premises, the Building, the
Lot and/or the Park. Within ten (10) days after receipt, Landlord and Tenant
shall advise the other party in writing, and provide the other with copies of
(as applicable), any notices alleging violation of the ADA relating to any
portion of the Premises or the Building; any claims made or threatened in
writing regarding noncompliance with the ADA and relating to any portion of the
Premises or the Building; or any governmental or regulatory actions or
investigations instituted or threatened regarding noncompliance with the ADA and
relating to any portion of the Premises or the Building. Tenant shall and hereby
agrees to protect, defend (with counsel acceptable to Landlord) and hold
Landlord and Landlord's lender(s), partners, employees, representatives, legal
representatives, successors and assigns (collectively, the "Indemnitees")
harmless and indemnify the Indemnitees from and against all liabilities,
damages, claims, losses, penalties, judgments, charges and expenses (including
reasonable attorneys' fees, costs of court and expenses necessary in the
prosecution or defense of any litigation including the enforcement of this
provision) arising from or in any way related to, directly or indirectly,
Tenant's or Tenant's Representatives' violation or alleged violation of the ADA.
Tenant agrees that the obligations of Tenant herein shall survive the expiration
or earlier termination of this Lease.
38. BROKERAGE COMMISSION: Landlord and Tenant each represents and warrants for
the benefit of the other that it has had no dealings with any real estate
broker, agent or finder in connection with the Premises and/or the negotiation
of this Lease, except for the Broker(s) (as set forth on Page 1), and that it
knows of no other real estate broker, agent or finder who is or might be
entitled to a real estate brokerage commission or finder's fee in connection
with this Lease or otherwise based upon contacts between the claimant and
Tenant. Each party shall indemnify and hold harmless the other from and against
any and all liabilities or expenses arising out of claims made for a fee or
commission by any real estate broker, agent or finder in connection with the
Premises and this Lease other than Broker(s), if any, resulting from the actions
of the indemnifying party. Any real estate brokerage commission or finder's fee
payable to the Broker(s) in connection with this Lease shall only be payable and
applicable to the extent of the initial term of the Lease and to the extent of
the Premises as same exist as of the date on which Tenant executes this Lease.
Unless expressly agreed to in writing by Landlord and Broker(s), no real estate
brokerage commission or finder's fee shall be owed to, or otherwise payable to,
the Broker(s) for any renewals or other extensions of the initial term of this
Lease or for any additional space leased by Tenant other than the Premises as
same exist as of the date on which Tenant executes this Lease.
39. QUIET ENJOYMENT: Landlord covenants with Tenant, upon the paying of Rent and
observing and keeping the covenants, agreements and conditions of this Lease on
its part to be kept and during the
27
<PAGE> 28
periods that Tenant is not otherwise in default of any of the terms or
provisions of this Lease, and subject to the rights of any of Landlord's lenders
in accordance with the provisions of any subordination agreement between Tenant
and such lenders, (i) that Tenant shall and may peaceably and quietly hold,
occupy and enjoy the Premises and the Common Areas during the term of this
Lease, and (ii) neither Landlord, nor any successor or assign of Landlord, shall
disturb Tenant's occupancy or enjoyment of the Premises and the Common Areas.
40. LANDLORD'S ABILITY TO PERFORM TENANT'S UNPERFORMED OBLIGATIONS:
Notwithstanding anything to the contrary contained in this Lease, if Tenant
shall fail to perform any of the terms, provisions, covenants or conditions to
be performed or complied with by Tenant pursuant to this Lease, and/or if the
failure of Tenant relates to a matter which in Landlord's judgment reasonably
exercised is of an emergency nature and such failure shall remain uncured for a
period of time commensurate with such emergency, then Landlord may, after
reasonable notice to Tenant at Landlord's option without any obligation to do
so, and in its sole discretion as to the necessity therefor, perform any such
term, provision, covenant, or condition, or make any such payment and Landlord
by reason of so doing shall not be liable or responsible for any loss or damage
thereby sustained by Tenant or anyone holding under or through Tenant. If
Landlord so performs any of Tenant's obligations hereunder, the full amount of
the cost and expense entailed or the payment so made or the amount of the loss
so sustained shall immediately be owning by Tenant to Landlord, and Tenant shall
promptly pay to Landlord upon demand, as Additional Rent, (a) the full amount
thereof with interest thereon from the date of payment at the greater of (i) ten
percent (10%) per annum, or (ii) the highest rate permitted by applicable law;
(b) the reasonable expenses of Landlord attributable thereto.
41. TENANT EQUIPMENT FINANCING: Landlord hereby acknowledges that Tenant has
informed Landlord that Tenant intends to procure financing for equipment to be
used in Tenant's operations conducted within the Premises (the "Equipment
Financing"). Within fifteen (15) business days after Tenant's delivery to
Landlord of written notice of the prospective procurement of such Equipment
Financing, Landlord shall execute and deliver to Tenant that certain waiver by
Landlord, in the form of Exhibit H attached hereto and made a part hereof (the
"Waiver By Landlord"). Tenant shall not do any of the following in connection
with any such Equipment Financing: (i) record or permit the recordation of the
Waiver By Landlord in the official records in the county in which the Premises
are located; and/or (ii) file any UCC-1 financing statements with regard to such
equipment in which reference is made to any portion of the Premises, the
Building, the Lot or the Park which would have the effect of causing a lien to
be placed against any portion of the Premises, the Building, the Lot or the
Park. Tenant shall promptly deliver to Landlord a true and complete copy of the
Waiver By Landlord fully executed by Landlord, Tenant and any lender which
provides such Equipment Financing to Tenant.
IN WITNESS WHEREOF, this Lease is executed on the date and year first
written above.
TENANT:
Sequus Pharmaceuticals, Inc.,
A Delaware Corporation
By: /s/ UNABLE TO READ
----------------------------
Its: V.P. Finance
----------------------------
Date: 2/1/96
----------------------------
LANDLORD:
LINCOLN MENLO VI,
A CALIFORNIA LIMITED PARTNERSHIP
By: Lincoln Property Company Management Services, Inc.,
As Manager and Agent for Lincoln Menlo VI, a California Limited
Partnership
By: [UNABLE TO READ]
--------------------------------
Vice President
Date:
--------------------------------
28
<PAGE> 29
EXHIBIT A - PREMISES
PAGE 1 OF 1
LEASE DATED FEBRUARY 1, 1996, BY AND BETWEEN
SEQUUS PHARMACEUTICALS, INC.,
A DELAWARE CORPORATION
("TENANT"),
AND
LINCOLN MENLO VI,
A CALIFORNIA LIMITED PARTNERSHIP
("LANDLORD")
LEASED PREMISES:
1360 Willow Road, Suites 101, 201, 203 and 204, Menlo Park, California
Approximately 31,985 rentable square feet effective as of the Commencement Date
through December 14, 1996; increasing to approximately 35,182 rentable square
feet effective as of December 15, 1996, through the Expiration Date.
[GRAPHIC OF SITE PLAN]
INITIALS:
TENANT: /s/ [UNABLE TO READ]
---------------------
LANDLORD:
---------------------
<PAGE> 30
EXHIBIT B TO LEASE AGREEMENT
TENANT IMPROVEMENTS
This exhibit, entitled "Tenant Improvements", is and shall constitute EXHIBIT B
to that certain Lease Agreement dated February 1, 1996 (the "Lease"), by and
between LINCOLN MENLO VI, A CALIFORNIA LIMITED PARTNERSHIP ("LANDLORD"), AND
SEQUUS PHARMACEUTICALS, INC., A DELAWARE CORPORATION ("TENANT"), for the leasing
of certain premises located at 1360 Willow Road, Suites 101,201, 203, and 204,
Building S of Willow Park, Menlo Park, California (the "Premises"). The terms,
conditions and provisions of this EXHIBIT B are hereby incorporated into and are
made a part of the Lease. Any capitalized terms used herein and not otherwise
defined herein shall have the meaning ascribed to such terms as set forth in the
Lease:
1. TENANT TO CONSTRUCT TENANT IMPROVEMENTS. Subject to the provisions
below, Tenant shall be solely responsible for the planning, construction and
completion of the interior tenant improvements ("Tenant Improvements") to the
Premises in accordance with the terms and conditions of this Exhibit B. The
Tenant Improvements shall not include any of Tenant's personal property, trade
fixture, furnishings, equipment or similar items.
2. TENANT IMPROVEMENT PLANS.
A. PRELIMINARY PLANS AND SPECIFICATIONS. Tenant shall retain a licensed,
insured architect ("Architect") to prepare preliminary working architectural and
engineering plans and specifications ("Preliminary Plans and Specifications")
for the Tenant Improvements. Tenant shall deliver the Preliminary Plans and
Specifications to Landlord. The Preliminary Plans and Specifications shall be in
sufficient detail to show locations, types and requirements for all heat loads,
people loads, floor loads, power and plumbing, regular and special HVAC needs,
telephone communications, telephone and electrical outlets, lighting, lighting
fixtures and related power, and electrical and telephone switches. Landlord
shall reasonably approve or disapprove the Preliminary Plans and Specifications
within five (5) days after Landlord receives the Preliminary Plans and
Specifications and, if disapproved, Landlord shall return the Preliminary Plans
and Specifications to Tenant, who shall make all necessary revisions within ten
(10) days after Tenant's receipt thereof. This procedure shall be repeated until
Landlord approves the Preliminary Plans and Specifications. The approved
Preliminary Plans and Specifications, as modified, shall be deemed the "Final
Preliminary Plans and Specifications".
B. FINAL PLANS AND SPECIFICATIONS. After the Final Preliminary Plans and
Specifications are approved by Landlord and are deemed to be the Final
Preliminary Plans and Specifications, Tenant shall cause the Architect to
prepare in twenty (20) days following Landlord's approval of the Final
Preliminary Plans and Specifications the final working architectural and
engineering plans, specifications and drawings, ("Final Plans and
Specifications") for the Tenant Improvements. Tenant shall then deliver the
Final Plans and Specifications to Landlord. Landlord shall reasonably approve or
disapprove the Final Plans and Specifications within five (5) days after
Landlord receives the Final Plans and Specifications and, if disapproved,
Landlord shall return the Final Plans and Specifications to Tenant who shall
make all necessary revisions within ten ( 10) days after Tenant's receipt
thereof. This procedure shall be repeated until Landlord approves the Final
Plans and Specifications. The approved Final Plans and Specifications, as
modified, shall be deemed the "Construction Documents".
C. MISCELLANEOUS. All deliveries of the Preliminary Plans and
Specifications, the Final Preliminary Plans and Specifications, the Final Plans
and Specifications, and the Construction Documents shall be delivered by
messenger service, by personal hand delivery or by overnight parcel service.
While Landlord has the right to approve the Preliminary Plans and
Specifications, the Final Preliminary Plans and Specifications, the Final Plans
and Specifications, and the Construction Documents, Landlord's interest in doing
so is to protect the Premises, the Building and Landlord's interest.
Accordingly, Tenant shall not rely upon Landlord's approvals and Landlord shall
not be the guarantor of, nor responsible for, the adequacy and correctness or
accuracy of the Preliminary Plans and Specifications, the Final Preliminary
Plans and Specifications, the Final Plans and Specifications, and the
Construction Documents, or the compliance thereof with applicable laws, and
Landlord shall incur no liability of any kind by reason of granting such
approvals.
D. BUILDING STANDARD WORK. The Construction Documents shall provide that
the Tenant Improvements to be constructed in accordance therewith must be at
least equal, in quality, to Landlord's building standard materials, quantities
and procedures then in use by Landlord ("Building Standards") attached hereto as
Exhibit B-2, and shall consist of improvements which are generic in nature.
3. PERMITS. Tenant at its sole cost and expense (subject to the provisions
of Paragraph 5 below) shall obtain all governmental approvals of the
Construction Documents to the full extent necessary for the issuance of a
building permit for the Tenant Improvements based upon such Construction
Documents. Tenant at its sole cost and expense shall also cause to be obtained
all other necessary approvals and permits from all governmental agencies having
jurisdiction or authority for the construction and installation of the Tenant
Improvements in accordance with the approved Construction Documents. Tenant at
its sole cost and expense (subject to the provisions of Paragraph 5 below) shall
undertake all steps necessary to insure that the construction of the Tenant
Improvements is accomplished in strict compliance with all statutes, laws,
ordinances, codes, rules, and regulations applicable to the construction of the
1
<PAGE> 31
Tenant Improvements and the requirements and standards of any insurance
underwriting board, inspection bureau or insurance carrier insuring the Premises
and/or the Building.
4. CONSTRUCTION.
A. Tenant shall be solely responsible for the construction,
installation and completion of the Tenant Improvements in accordance with the
Construction Documents approved by Landlord and is solely responsible for the
payment of all amounts when payable in connection therewith without any cost or
expense to Landlord, except for Landlord's obligation to contribute the Tenant
Improvement Allowance in accordance with the provisions of Paragraph 5 below.
Tenant shall diligently proceed with the construction, installation and
completion of the Tenant Improvements in accordance with the Construction
Documents and the completion schedule reasonably approved by Landlord. No
material changes shall be made to the Construction Documents and the completion
schedule approved by Landlord without Landlord's prior written consent, which
consent shall not be unreasonably withheld.
B. Tenant at its sole cost and expense (subject to the provisions of
Paragraph 5 below) shall employ a licensed, insured and bonded general
contractor ("Contractor") to construct the Tenant Improvements in accordance
with the Construction Documents. The construction contracts between Tenant and
the Contractor and between the Contractor and subcontractors shall be subject to
Landlord's prior written approval, which approval shall not be unreasonably
withheld. Proof that the Contractor is licensed in California, is bonded as
required under California law, and has the insurance specified in Exhibit B-1,
attached hereto and incorporated herein by this reference, shall be provided to
Landlord at the time that Tenant requests approval of the Contractor from
Landlord. Tenant shall comply with or cause the Contractor to comply with all
other terms and provisions of Exhibit B-1.
C. Prior to the commencement of the construction and installation of
the Tenant Improvements, Tenant shall provide the following to Landlord, all of
which shall be to Landlord's reasonable satisfaction:
(i) An estimated budget and cost breakdown for the Tenant
Improvements.
(ii) Estimated completion schedule for the Tenant Improvements.
(iii) Copies of all required approvals and permits from governmental
agencies having jurisdiction or authority for the construction and installation
of the Tenant Improvements; provided, however, if prior to commencement of the
construction and installation of Tenant Improvements Tenant has not received the
electrical, plumbing or mechanical permits, Tenant shall only be required to
provide Landlord with evidence that Tenant has made application therefor, and,
upon receipt by Tenant of such permits, Tenant shall promptly provide Landlord
with copies thereof.
(iv) Evidence of Tenant's procurement of insurance required to be
obtained pursuant to the provisions of Paragraphs 4.B and 4.G [above].
D. Landlord shall at all reasonable times have a right to inspect the
Tenant Improvements (provided Landlord does not materially interfere with the
work being performed by the Contractor or its subcontractors) and Tenant shall
immediately cease work upon written notice from Landlord if the Tenant
Improvements are not in compliance with the Construction Documents approved by
Landlord. If Landlord shall give notice of faulty construction or any other
deviation from the Construction Documents, Tenant shall cause the Contractor to
make corrections promptly. However, neither the privilege herein granted to
Landlord to make such inspections, nor the making of such inspections by
Landlord, shall operate as a waiver of any rights of Landlord to require good
and workmanlike construction and improvements constructed in accordance with the
Construction Documents.
E. Subject to Landlord complying with its obligations in Paragraph 5
below, Tenant shall pay and discharge promptly and fully all claims for labor
done and materials and services furnished in connection with the Tenant
Improvements. The Tenant Improvements shall not be commenced until five (5) days
after Landlord has received notice from Tenant stating the date the construction
of the Tenant Improvements is to commence so that Landlord can post and record
any appropriate notice of nonresponsibility.
F. Tenant acknowledges and agrees that the agreements and covenants of
Tenant in Sections 10 and 37 of the Lease shall be fully applicable to Tenant's
construction of the Tenant Improvements.
G. Tenant shall maintain during the construction of the Tenant
Improvements, at its sole cost and expense, insurance of the types and in the
amounts specified in Section 12 of the Lease, together with builders' risk
insurance for the amount of the completed value of the Tenant Improvements on an
all-risk non-reporting form covering all improvements under construction,
including building materials, and other insurance in amounts and against such
risks as the Landlord shall reasonably require in connection with the Tenant
Improvements.
H. No materials, equipment or fixtures shall be delivered to or
installed upon the Premises pursuant to any agreement by which another party has
a security interest or rights to remove or repossess such items, without the
prior written consent of Landlord, which consent shall not be unreasonably
withheld.
Language indicated as being shown by strike-out in the typeset document
is enclosed in brackets "[" and "]" in the electronic format.
2
<PAGE> 32
I. Landlord reserves the right to establish reasonable rules and
regulations for the use of the Building during the course of construction of the
Tenant Improvements, including, but not limited to, construction parking,
storage of materials, hours of work, use of elevators, and clean-up of
construction related debris.
J. Upon completion of the Tenant Improvements, Tenant shall deliver to
Landlord the following, all of which shall be to Landlord's reasonable
satisfaction:
(i) Any certificates required for occupancy, including a permanent
and complete Certificate of Occupancy issued by the City of Menlo Park.
(ii) A Certificate of Completion signed by the Architect who
prepared the Construction Documents, reasonably approved by Landlord.
(iii) A cost breakdown itemizing all expenses for the Tenant
Improvements, together with invoices and receipts for the same or other evidence
of payment.
(iv) Final and unconditional mechanic's lien waivers for all the
Tenant Improvements.
(v) A Notice of Completion for execution by Landlord, which
certificate once executed by Landlord shall be recorded by Tenant in the
official records of San Mateo.
(vi) Redline version of the Construction Documents.
(vii) A true and complete copy of all as-built plans and drawings
for the Tenant Improvements.
5. TENANT IMPROVEMENT ALLOWANCE.
A. Landlord shall provide to Tenant an allowance in the amount of
thirty-five thousand one hundred eighty-two and 00/100 dollars ($35,182.00) (the
"Tenant Improvement Allowance") based upon an allowance of one and 00/100
dollars ($1.00) per rentable square foot for 35,182 square feet of the Premises
which are to be improved, to construct and install the Tenant Improvements. The
Tenant Improvement Allowance shall be used to design, prepare, plan, obtain the
approval of, construct and install the Tenant Improvements and for no other
purpose. Except as otherwise expressly provided herein, Landlord shall have no
obligation to contribute the Tenant Improvement Allowance unless and until the
Construction Documents have been approved by Landlord and Tenant has complied
with all requirements set forth in Paragraph 4.C. of this Exhibit B. The costs
to be paid out of the Tenant Improvement Allowance shall include all reasonable
costs and expenses associated with the design, preparation, approval, planning,
construction and installation of the Tenant Improvements (the "Tenant
Improvements Costs"), including, all of the following:
(i) All costs of the Preliminary Plans and Specifications, the Final
Plans and Specifications, and the Construction Documents, and engineering costs
associated with completion of the State of California energy utilization
calculations under Title 24 legislation:
(ii) All costs of obtaining building permits and other necessary
authorizations from local governmental authorities;
(iii) All costs of interior design and finish schedule plans and
specifications including as-built drawings, if applicable;
(iv) All direct and indirect costs of procuring, constructing and
installing the Tenant Improvements in the Premises, including, but not limited
to, the construction fee for overhead and profit and the cost of all on-site
supervisory and administrative staff, office, equipment and temporary services
rendered by the Contractor in connection with the construction of the Tenant
Improvements; provided, however, that the construction fee for overhead and
profit, the cost of all on-site supervisory and administrative staff, office,
equipment and temporary services shall not exceed amounts which are reasonable
and customary for such items in the local construction industry;
(v) All fees payable to the Architect and any engineer if they are
required to redesign any portion of the Tenant Improvements following Tenant's
and Landlord's approval of the Construction Documents;
(vi) Utility connection fees;
(vii) Inspection fees and filing fees payable to local governmental
authorities, if any;
(viii) All costs of all permanently affixed equipment and non-trade
fixtures provided for in the Construction Documents, including the cost of
installation; and,
(ix) A construction management fee payable to Landlord in the amount
of three percent (3%) of the Tenant Improvement Allowance.
3
<PAGE> 33
The Tenant Improvement Allowance shall be the maximum contribution by Landlord
for the Tenant Improvement Costs. The Tenant Improvement Allowance will be
available as of February 1, 1996, through December 31, 1998, only, and the
disbursement of the Tenant Improvement Allowance is subject to the terms
contained hereinbelow. Therefore, written request for disbursement of the Tenant
Improvement Allowance must occur prior to December 31, 1998.
Landlord will make payments to Tenant from the Tenant Improvement Allowance to
reimburse Tenant for Tenant Improvement Costs paid or incurred by Tenant. The
payments shall be by progress payments not more frequently than once per month
and only after satisfaction of the following conditions precedent: (a) receipt
by Landlord of conditional mechanics' lien releases for the work completed and
to be paid by said progress payment, conditioned only on the payment of the sums
set forth in the mechanics' lien release, executed by the Contractor and all
subcontractors, labor suppliers and materialmen; (b) receipt by Landlord of
unconditional mechanics' lien releases from the Contractor and all
subcontractors, labor suppliers and materialmen for all work other than that
being paid by the current progress payment previously completed by the
Contractor, subcontractors, labor suppliers and materialmen and for which Tenant
has received funds from the Tenant Improvement Allowance to pay for such work;
(c) receipt by Landlord of any and all documentation reasonably required by
Landlord detailing the work that has been completed and the materials and
supplies used as of the date of Tenant's request for the progress payment,
including, without limitation, invoices, bills, or statements for the work
completed and the materials and supplies used; and (d) completion by Landlord or
Landlord's agents of any inspections of the work completed and materials and
supplies used as deemed reasonably necessary by Landlord[; and (e) satisfaction
of any and all other conditions which may be reasonably imposed by Landlord].
Tenant Improvement Allowance progress payments shall be paid to Tenant within
fourteen (14) days from the satisfaction of the conditions set forth in the
immediately preceding sentence. The preceding notwithstanding, all Tenant
Improvement Costs paid or incurred by Tenant prior to Landlord's approval of the
Construction Documents in connection with the design and planning of the Tenant
Improvements by Architect shall be paid from the Tenant Improvement Allowance,
without any retention, within fourteen (14) days following Landlord's receipt of
invoices, bills or statements from Architect evidencing such costs.
Notwithstanding the foregoing to the contrary, Landlord shall be entitled to
withhold and retain five percent (5%) of the Tenant Improvement Allowance or of
any Tenant Improvement Allowance progress payment until the lien-free expiration
of the time for filing of any mechanics' liens claimed or which might be filed
on account of any work ordered by Tenant or the Contractor or any subcontractor
in connection with the construction and installation of the Tenant Improvements.
B. Landlord shall not be obligated to pay any Tenant Improvement
Allowance progress payment or the Tenant Improvement Allowance retention if on
the date Tenant is entitled to receive the Tenant Improvement Allowance progress
payment or the Tenant Improvement Allowance retention Tenant is in default of
this Lease. Such payments shall resume upon Tenant curing any such default
within the time periods which may be provided for in the Lease.
C. Should the total cost of constructing the Tenant Improvements be
less than the Tenant Improvement Allowance, the Tenant Improvement Allowance
shall be automatically reduced to the amount equal to said actual cost.
6. TERMINATION. If the Lease is terminated prior to the date on which the Tenant
Improvements are completed, for any reason due to the default of Tenant
hereunder, in addition to any other remedies available to Landlord under the
Lease, Tenant shall pay to Landlord as Additional Rent under the Lease, within
five (5) days of receipt of a statement therefor, any and all costs incurred by
Landlord and not reimbursed or otherwise paid by Tenant through the date of
termination in connection with the Tenant Improvements to the extent planned,
installed and/or constructed as of such date of termination, including, but not
limited to, any costs related to the removal of all or any portion of the Tenant
Improvements and restoration costs related thereto. Subject to the provisions of
Section 10.2 of the Lease, upon the expiration or earlier termination of the
Lease, Tenant shall not be required to remove the Tenant Improvements it being
the intention of the parties that the Tenant Improvements are to be considered
incorporated into the Building.
7. LEASE PROVISIONS; CONFLICT. The terms and provisions of the Lease, insofar as
they are applicable, in whole or in part, to this EXHIBIT B, are hereby
incorporated herein by reference, and specifically including all of the
provisions of Section 31 of the Lease. In the event of any conflict between the
terms of the Lease and this EXHIBIT B, the terms of this EXHIBIT B shall
prevail. Any amounts payable by Tenant to Landlord hereunder shall be deemed to
be Additional Rent under the Lease and, upon any default in the payment of same,
Landlord shall have all rights and remedies available to it as provided for in
the Lease.
INITIALS:
TENANT: /s/ [UNABLE TO READ]
---------------------
LANDLORD:
---------------------
Language indicated as being shown by strike-out in the typeset document
is enclosed in brackets "[" and "]" in the electronic format.
4
<PAGE> 34
EXHIBIT B-1
CONSTRUCTION INSURANCE REQUIREMENTS
Before commencing work, the contractor shall procure and maintain at its sole
cost and expense until completion and final acceptance of the work, at least the
following minimum levels of insurance.
A. Workers' Compensation in statutory amounts and Employers Liability
Insurance in the minimum amounts of $100,000 each accident for bodily
injury by accident and $100,000 each employee for bodily injury by disease
with a $500,000 policy limit, covering each and every worker used in
connection with the contract work.
B. Comprehensive General Liability Insurance on an occurrence basis
including, but not limited to, protection for Premises/Operations
Liability, Broad Form Contractual Liability, Owner's and Contractor's
Protective, and Products/Completed Operations Liability*, in the following
minimum limits of liability.
Bodily Injury, Property Damage, and $1,000,000/each occurrence
Personal Injury Liability $2,000,000/aggregate
* Products/Completed Operations Liability Insurance is to be provided for
period of at least one (1) year after completion of work.
Coverage should include protection for Explosion, Collapse and Underground
Damage.
C. Comprehensive Automobile Liability Insurance with the following minimum
limits of liability.
Bodily Injury and Property $1,000,000/each occurrence
Damage Liability $2,000,000/aggregate
This insurance will apply to all owned, non-owned or hired automobiles to
be used by the Contractor in the completion of the work.
D. Umbrella Liability Insurance in a minimum amount of $5 million dollars
($5,000,000), providing excess coverage on a following-form basis over the
Employer's Liability limit in Paragraph A and the liability coverages
outlined in Paragraphs B & C.
E. Equipment and Installation coverages in the broadest form available
covering Contractor's tools and equipment and material not accepted by
Tenant. Tenant will provide Builders Risk Insurance on all accepted and
installed materials.
All policies of insurance, duplicates thereof or certificates evidencing
coverage shall be delivered to Landlord prior to commencement of work and shall
name Landlord, and its partners and lenders as additional insureds as their
interests may appear. All insurance policies shall (1) be issued by a company or
companies licensed to be business in the state the work is being completed in,
(2) provide that no cancellation, non-renewal or material modification shall be
effective without thirty (30) prior written notice provided to Landlord, (3)
provide no deductible greater than $15,000 per loss and (4) contain a waiver to
subrogation clause in favor of Landlord, and its partners and lenders.
INITIALS:
TENANT: /s/ [UNABLE TO READ]
---------------------
LANDLORD:
---------------------
<PAGE> 35
EXHIBIT B-2
BUILDING STANDARDS
OFFICE AREA
DEMISING PARTITION AND CORRIDOR WALLS:
A. 6" 20-gauge metal studs at 24" O.C. (or as required by code for
span) framed full height from finish floor to structure above
B. One (1) layer 5/8" drywall Type "X" both sides of wall, fire taped
only
INTERIOR PARTITIONS:
A. 3 5/8" 25-gauge metal studs at 24" O.C. to bottom of T-bar ceiling
grid approximately 9' - 0' high
B. Top track to be pre-formed slotted aluminum taped in
C. One (1) layer 5/8" drywall both sides of wall, taped texture ready
for paint
D. 3 5/8" metal studs including all lateral bracing as required by code
PERIMETER DRYWALL (AT OFFICE AREAS):
A. One (1) layer 5/8" Type "X" drywall taped texture ready for paint
B. Provide alternate to texture concrete in lieu of furring walls
COLUMN FURRING:
A. Furring channel all sides
B. One (1) layer 5/8" drywall taped texture and ready for paint
C. Provide deductive alternate for texturing columns where there are no
pipes to furred out
ACOUSTICAL CEILINGS:
A. 2' x 4' standard white T-bar grid system as manufactured by Chicago
Metallic or equal
B. 2' x 4' x 5/8" white, fissured, non-directional acoustical tile to
be Cortega as manufactured by Armstrong or equal
PAINTING:
A. Sheetrock walls to receive two (2) coats of interior latex paint as
manufactured by Kelly Moore or equal. Some portions of second coat
to be single accent color.
B. Provide a deductive alternate for not painting warehouse walls
WINDOW COVERING:
A. 1" aluminum mini-blinds as manufactured by Levelor or equal, color
to be selected by Lincoln Property Company
B. Blinds to be sized to fit window module
VCT:
VCT to be 1/8" x 12" x 12" as manufactured by Armstrong - Excelon Series
or equal
LIGHT FIXTURES:
2' x 4' T-bar lay in 3-tube energy efficient fixture with cool white
fluorescent tubes with prismatic acrylic lens as manufactured by Lithonia
or equal
LIGHT SWITCHES:
A. Double switching as required by Title 24
B. Switch assembly to be Leviton, color - Ivory
1
<PAGE> 36
ELECTRICAL OUTLET:
A. 110-v duplex outlet in demising or interior partitions only, as
manufactured by Leviton, color to be Ivory
B. Eight (8) outlets per circuit, spacing to meet code (2 per office)
C. Transformers to be a minimum of 20% or over required capacity
D. Contractors to inspect electric room and to include all necessary
metering costs
E. No aluminum wiring is acceptable
TELEPHONE OUTLET:
A. One (1) single outlet box in wall with pullwire from outlet box to
area above T-bar ceiling per office
B. Cover plate for phone outlets to be included
FIRE SPRINKLERS:
As required by fire codes
TOPSET BASE:
A. 4" rubber base as manufactured by Burke or equal, standard colors
only
B. 4" rubber base at VCT areas
TOILET AREAS:
Wet walls to receive marlite up to 48". Floors to receive sheetvinyl and
cove base as required by code
CARPET:
Minimum 30 ounce, commercial grade, level loop, UM44-C. Type 1 Class 1.
100% continuous filament. 5-year wear guarantee. Glue down, no pad.
WOOD DOORS:
Shall be 3'-0" x 7'-0" x 1 3/4" (unless otherwise specified) solid core,
prefinished birch "Cal-Wood" B-3 or equal if approved by owner
DOOR FRAMES:
Shall be ACI or equal, 3 3/4" or 4 7/8" throat, aluminum, dark bronze
anodized, snap-on trim
HARDWARE:
Shall be "Schlage", a lever type "Levon" D series, dark bronze 613 finish,
2 3/4" backset. Closers (where required) shall be Duro X PA X SN-1
INSULATION:
By Title 24 insulation
PLUMBING:
A. Shall comply with all local codes and handicapped code requirements.
Fixtures shall be either "American Standard", "Koher" or "Norris".
All toilet accessories and grab bars shall be "Bobrick" or equal and
approved by owner
B. Plumbing bid shall include 5 gallon minimum, or insta hot with mixer
valve electric water heater
TOILET PARTITIONS:
Shall be as manufactured by Fiat, global or equal if approved by owner.
Color shall be chosen by tenant
2
<PAGE> 37
HVAC:
Five (5) year warranty provided on all HVAC compressor units. All
penetrations and sleeper supports to be hot mopped to LPC standard.
Provide alternate price for electric heat pumps at conditioned spaces.
Provide time overlay switch at compressors.
WAREHOUSE AREAS:
Floor - sealed concrete
Fire Extinguishers - 2A 10 BC surface mount by code x by S.F.
Lighting - 1x8 strip lighting single tube chain hung 25 ft.
Draft stops - by code UBC 198 Edition
Service electrical outlets - HVAC or heaters at tenant cost
(400 W metal halide lighting are acceptable in lieu of strip lighting at
warehouse minimum 15 F.C.)(1)
INITIALS:
TENANT: /s/ [UNABLE TO READ]
---------------------
LANDLORD:
---------------------
3
<PAGE> 38
EXHIBIT C TO LEASE AGREEMENT
RULES & REGULATIONS
This exhibit, entitled "Rules & Regulations", is and shall constitute EXHIBIT C
to that certain Lease Agreement dated February 1, 1996 (the "Lease"), by and
between LINCOLN MENLO VI, A CALIFORNIA LIMITED PARTNERSHIP ("Landlord"), and
Sequus Pharmaceuticals, Inc., A Delaware Corporation ("Tenant"), for the leasing
of certain premises located at 1360 Willow Road, Suites 101, 201, 203, and 204,
Building S of Willow Park, Menlo Park, California (the "Premises"). The terms,
conditions and provisions of this EXHIBIT C are hereby incorporated into and are
made a part of the Lease. Any capitalized terms used herein and not otherwise
defined herein shall have the meaning ascribed to such terms as set forth in the
Lease:
1. No advertisement, picture or sign of any sort shall be displayed on or
outside the Premises or the Building without the prior written consent
of Landlord. Landlord shall have the right to remove any such
unapproved item without notice and at Tenant's expense.
2. Tenant shall not regularly park motor vehicles in designated parking
areas after the conclusion of normal daily business activity.
3. Tenant shall not use any method of heating or air conditioning other
than that supplied by Landlord without the prior written consent of
Landlord.
4. All window coverings installed by Tenant and visible from the outside
of the Building require the prior written approval of Landlord.
5. Tenant shall not use, keep or permit to be used or kept any foul or
noxious gas or substance or any flammable or combustible materials on
or around the Premises, the Building or the Park.
6. Tenant shall not alter any lock or install any new locks or bolts on
any door at the Premises without the prior consent of Landlord.
7. Tenant agrees not to make any duplicate keys without the prior consent
of Landlord.
8. Tenant shall park motor vehicles in those general parking areas as
designated by Landlord except for loading and unloading. During those
periods of loading and unloading, Tenant shall not unreasonably
interfere with traffic flow within the Park and loading and unloading
areas of other tenants.
9. Tenant shall not disturb, solicit or canvas any occupant of the
Building or Park and shall cooperate to prevent same.
10. No person shall go on the roof without Landlord's permission.
11. Business machines and mechanical equipment belonging to Tenant which
cause noise or vibration that may be transmitted to the structure of
the Building, to such a degree as to be objectionable to Landlord or
other Tenants, shall be placed and maintained by Tenant, at Tenant's
expense, on vibration eliminators or other devices sufficient to
eliminate noise or vibration.
12. All goods, including material used to store goods, delivered to the
Premises of Tenant shall be immediately moved into the Premises and
shall not be left in parking or receiving areas overnight.
13. Tractor trailers which must be unhooked or parked with dolly wheels
beyond the concrete loading areas must use steel plates or wood blocks
under the dolly wheels to prevent damage to the asphalt paving
surfaces. No parking or storing of such trailers will be permitted in
the auto parking areas of the Park or on streets adjacent thereto.
14. Forklifts which operate on asphalt paving areas shall not have solid
rubber tires and shall only use tires that do not damage the asphalt.
15. Tenant is responsible for the storage and removal of all trash and
refuse. All such trash and refuse shall be contained in suitable
receptacles stored behind screened enclosures at locations approved by
Landlord.
16. Tenant shall not store or permit the storage or placement of goods, or
merchandise or pallets or equipment of any sort in or around the
Premises, the Building, the Park or any of the Common Areas of the
foregoing. No displays or sales of merchandise shall be allowed in the
parking lots or other Common Areas.
17. Tenant shall not permit any animals (except for those animals required
for Tenant to conduct its research), including, but not limited to, any
household pets, to be brought or kept in or about the Premises, the
Building, the Park or any of the Common Areas of the foregoing.
18. Tenantshall not permit any motor vehicles to be washed on any portion
of the Premises or in the Common Areas of the Park, nor shall Tenant
permit mechanical work or maintenance of motor vehicles to be performed
on any portion of the Premises or in the Common Areas of the Park.
INITIALS:
TENANT: /s/ [UNABLE TO READ]
---------------------
LANDLORD:
---------------------
<PAGE> 39
EXHIBIT F
FIRST AMENDMENT TO LEASE AGREEMENT
CHANGE OF COMMENCEMENT DATE
This First Amendment to Lease Agreement (the "Amendment") is made and entered
into as of ___________________, by and between ____________________________
("LANDLORD"), AND ________________________ ("TENANT"), with reference to the
following facts:
RECITALS
A. Landlord and Tenant have entered into that certain Lease Agreement dated
___________ (the "Lease"), for the leasing of certain premises located at
____________________________, California (the "Premises") as such Premises
are more fully described in the Lease.
B. Landlord and Tenant wish to amend the Commencement Date of the Lease.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Landlord and Tenant hereby agree as follows:
1. The Commencement Date of the Lease shall be
________________________.
2. The last day of the Term of the Lease (the "Expiration Date") shall
be ______________.
3. The dates on which the Base Rent will be adjusted are:
for the period _________ to ________ the monthly Base Rent shall be
$_____________;
for the period _________ to ________ the monthly Base Rent shall be
$_____________; and
for the period _________ to ________ the monthly Base Rent shall be
$_____________.
4. Effect of Amendment: Except as modified herein, the terms and
conditions of the Lease shall remain unmodified and continue in full
force and effect. In the event of any conflict between the terms and
conditions of the Lease and this Amendment, the terms and conditions
of this Amendment shall prevail.
5. Definitions: Unless otherwise defined in this Amendment, all terms
not defined in this Amendment shall have the meaning set forth in
the Lease.
6. Authority: Subject to the provisions of the Lease, this Amendment
shall be binding upon and inure to the benefit of the parties
hereto, their respective heirs, legal representatives, successors
and assigns. Each party hereto and the persons signing below warrant
that the person signing below on such party's behalf is authorized
to do so and to bind such party to the terms of this Amendment.
7. The terms and provisions of the Lease are hereby incorporated in
this Amendment.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date and
year first above written.
TENANT:
Sequus Pharmaceuticals, Inc.,
A Delaware Corporation
By:
----------------------------
Its:
----------------------------
By:
----------------------------
Its:
----------------------------
Date:
----------------------------
LANDLORD:
LINCOLN MENLO VI,
A CALIFORNIA LIMITED PARTNERSHIP
By: Lincoln Property Company Management Services, Inc.,
As Manager and Agent for Lincoln Menlo VI, A California Limited Partnership
By:
--------------------------------
Vice President
Date:
--------------------------------
INITIALS:
TENANT: /s/ [UNABLE TO READ]
---------------------
LANDLORD:
---------------------
<PAGE> 40
EXHIBIT D
WILLOW PARK
DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS
This Declaration of Covenants, Conditions and Restrictions (hereinafter
called "Declaration") is made this twenty-fifth day of August 1979, by LINCOLN
PROPERTY COMPANY NO. 1179, A CALIFORNIA LIMITED PARTNERSHIP (PHASE 6)
(hereinafter called "Lincoln Property Company").
RECITALS
1. Declarant is, or at the time of recording this Declaration will be, the
Owner in fee of all that certain real property which is situated in the City of
Menlo Park, County of San Mateo, State of California, described on the map
(hereinafter called "Map") entitled "Menlo Industrial Center, Menlo Park,
California" which Map is filed in the office of the Recorder of the County of
San Mateo, State of California, on October 1, 1979, in Book No. 99 of Maps, at
pages 81, 82 and 83.
2. As Owner of the real property described in Paragraph 1 of these
Recitals, Declarant has executed this Declaration for the purpose of imposing
upon all portions of said real property (other than Parcel E as shown on the
Map) a general plan of improvement for the benefit of said real property (other
than said Parcel E) and its present and future owners. Said real property (other
than Parcel E) is hereinafter called the "Property."
NOW, THEREFORE, Declarant hereby declares that the Property is now held,
and shall hereafter be held, developed, encumbered, hypothecated, transferred,
sold, leased, conveyed, improved, used and occupied subject to the covenants,
conditions, restrictions and limitations hereinafter set forth, all of which are
declared to be in furtherance of a plan for the development and operation of a
landscaped business and industrial park and are established for the purpose of
enhancing and protecting the value, attractiveness and desirability of the
Property and every part thereof. Each of the covenants, conditions, restrictions
and limitations set forth herein shall run with the land, and every part
thereof, and shall burden as well as inure to the benefit of and pass with each
and every portion of the Property hereinafter developed, encumbered,
hypothecated, transferred, sold, leased, conveyed, improved, used or occupied
and shall apply to and bind any and all parties having or acquiring any right,
title, license or interest in the Property or any part thereof.
ARTICLE I
DEFINITIONS
Unless the context otherwise specifies or requires, the terms defined in
this Article I shall, for all purposes of this Declaration, have the meanings
herein specified.
1.1 Building. "Building" shall mean the principal structure or structures
on any Site, including all garages, outside platforms, outbuildings, docks and
the like.
1.2 Declarant. "Declarant shall mean Lincoln Property Company, its
successors and assigns. Declarant's assigns shall be deemed to include any party
whom Declarant designates, by means of a notice recorded in the Official Records
of San Mateo County, as the party who, from and after the date such notice is
recorded, will perform Declarant's functions under this Declaration.
1.3 Deed of Trust. "Deed of Trust" shall mean, with respect to any portion
of the property, a duly recorded Deed of Trust, mortgage or other instrument
which created a lien on the portion of the Property is describes.
1.4 Improvements. "Improvements" shall mean and include without limitation
buildings, outbuildings, pedestrian and vehicle access facilities, parking
areas, loading areas, fences, walls, hedged mass plantings, landscaping, poles,
signs and any structures of any type or kind.
1.5 Owner. "Owner" shall mean any person, firm, corporation or other legal
entity (including Declarant) which owns fee title to a Site, as shown by the
Official Records of the County of San Mateo; provided, however, that the term
"Owner" shall not include a mortgage or beneficiary under a deed of trust
holding a security interest in a Site unless such mortgagee or beneficiary is in
actual physical possession of the Site.
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<PAGE> 41
Whenever this Declaration creates or imposes an obligation with
respect to a Site, the Owner of the Site shall be responsible for the timely and
proper performance of the obligation, notwithstanding any delegation of such
responsibility by lease, contract, or otherwise to another party.
1.6 Property. "Property" shall mean that certain real property subject to
the covenants, conditions and restrictions set forth herein, namely, that real
property described on Exhibit A attached hereto and incorporated herein.
1.7 Site. "Site" shall mean a continuous area of land within the Property
which is owned of record by the same Owner, whether shown as one parcel on any
recorded map or as a combination of parcels or of portions thereof.
ARTICLE II
REGULATION OF USES
2.1 Permitted Uses. Unless otherwise specifically prohibited herein, or by
applicable law, any business/industrial use will be permissible if it does not
constitute a nuisance to adjacent Sites. Permitted uses will include, but not be
limited to, manufacturing, warehousing, distribution, cartage, processing,
storage, wholesaling, office, laboratory, professional and research and
development.
2.2 Nuisance. No noxious or offensive activity shall be carried on nor
shall anything be done on any Site which may be or become an annoyance or
nuisance to the Owners or occupants of other Sites, or which will be offensive
to the Owners or occupants of other Sites by reason of odor, fumes, discharge of
any chemical or industrial waste above or below ground, dust, dirt, fly-ash,
smoke, noise, glare or which will be hazardous by reason of danger of fire or
explosion or any other hazard.
2.3 Right of Entry. During reasonable hours and subject to reasonable
security requirements, Declarant or its authorized representative shall have the
right to enter upon and inspect any Building and/or Site and the Improvements
thereon for the purpose of ascertaining whether or not the provisions of this
Declaration have been or are being complied with and shall not be deemed guilty
of trespass by reason of such entry.
ARTICLE III
REGULATION OF IMPROVEMENTS
3.1 Minimum Setback Lines
(a) General. No Improvement and no part thereof shall be placed on
any Site closer to a property line than herein provided. The following
Improvements are specifically excluded from these setback provisions:
(1) Roof overhang, subject to the specific approval of
Declarant in writing.
(2) Steps and walks.
(3) Paving and associated curbing, except that vehicle parking
areas shall not be permitted within ten (10) feet of the street
property line or lines.
(4) Fences, except that no fence shall be placed within the
street setback area unless specific approval is given by Declarant
in writing.
(5) Landscaping.
(6) Planters, not to exceed three (3) feet in height.
(7) Railroad spur tracks, switches and bumpers, provided that
the location of such tracks, switches and bumpers is specifically
approved by Declarant in writing.
(8) Displays identifying the Owner, Lessee or occupant,
subject to the specific approval of Declarant in writing.
(b) Setback from interior property lines. No setback is established
from a rear or side interior property line. The interior lot lines for a
corner lot shall be considered to have a real property line.
2
<PAGE> 42
(c) Setback Street Property Lines. The setback line is established
as twenty (20) feet from property line on all streets on the property.
3.2 Completion of Construction. After commencement of construction of any
Improvement, the Owner shall diligently prosecute the work thereon to the end
that the Improvement shall not remain in a partly finished condition any longer
than reasonably necessary for the completion thereof.
3.3 No excavation shall be made except in connection with construction of
an Improvement, and upon completion thereof, exposed openings shall be
backfilled and disturbed ground shall be graded and leveled.
3.4 Landscaping.
(a) Every Site on which a Building shall have been placed shall be
landscaped according to plans approved as specified herein and maintained
thereafter in a sightly and well-kept condition.
(b) An Owner, Lessee or occupant shall landscape and maintain
unpaved areas between the property lines and the setback lines.
(c) An Owner, Lessee or occupant shall provide hose bibs and
maintenance facilities in the vicinity of the landscaped areas.
(d) Landscape as approved by Declarant shall be installed within
ninety (90) days of occupancy or completion of the Building, whichever
occurs first.
3.5 Site Maintenance. All Improvements on each Site including, without
limitation, all walks, driveways, fences, parking areas, landscaping and the
exterior of all structures on each Site, shall be maintained free of litter and
debris and in good condition, order and repair. Landscaping shall be kept in
thriving condition, weed-free and neatly trimmed. All undeveloped Sites shall be
kept clean, mowed and in a condition so as not to be a dust or weed problem.
3.6 Signs and Lighting. No signs or displays shall be created on any Site,
other than the following:
(a) Signs identifying the name, building and business of any person
or firm occupying a Site, the size, design and color of which has been
specifically approved by Declarant in writing; and
(b) Offering a Site for sale or lease if Declarant has specifically
approved said signs in writing.
All signs and displays shall be located below the roof line of the
building and shall comply with all applicable laws and ordinances.
Lighting shall be restricted to parking and security lights, fire
lighting and low-level sign illumination and floodlighting of buildings or
landscaping. All lighting shall be shielded and contained within property
lines.
3.7 Parking Areas. Adequate parking on a Site shall be provided to
accommodate all parking needs for employees, visitors and company vehicles.
There shall also be adequate areas provided for truck loading and unloading. The
intent of this provision is to eliminate the need for any on-street parking. If
parking or loading requirements increase as a result of a change in use or
number of employees, additional off-street parking shall be provided to satisfy
the intent of this section.
3.8 Building Regulations. Any building erected on a Site shall conform to
the following construction practices:
(a) Exterior walls of sheet or corrugated iron, steel, aluminum or
asbestos will be permitted only upon specific approval in writing by
Declarant.
(b) Exterior walls shall be painted or suitably treated in a manner
acceptable to Declarant.
ARTICLE IV
APPROVAL OF PLANS
4.1 No Improvement shall be erected, placed, altered, maintained or
permitted to remain on any land subject to these restrictions until plans and
specifications showing plot layout, including parking and all exterior
elevations, with materials and colors, have been submitted to and approved in
writing by
3
<PAGE> 43
Declarant. Said approval shall be in addition to any approvals and/or permits
required by the City of Menlo Park or any other legal entity having
jurisdiction. Such plans and specifications shall be submitted in writing over
the signature of the Owner of Lessee of the Site or his authorized agent.
4.2 Approval shall be based, among other things, on adequacy of Site
dimensions, adequacy of structural design, conformity and harmony of external
design with neighboring Improvements, effect of location and use of Improvements
on neighboring Sites; proper facing of main elevation with respect to nearby
streets; and conformity of the plans and specifications to the purpose and
general plan and intent of these restrictions. Declarant shall not arbitrarily
or unreasonably withhold its approval of such plans and specifications.
4.3 If Declarant fails either to approve or to disapprove such plans and
specifications within thirty (30) days after the same have been submitted to it,
it shall be conclusively presumed that Declarant has approved said plans and
specifications, subject, however, to the restrictions contained in ARTICLE III
hereof.
4.4 Notwithstanding anything to the contrary herein contained, after the
expiration of one year from the date of issuance of a building permit by
municipal or other governmental authority for any Improvement, said Improvement
shall, in favor of purchasers and encumbrancers in good faith and for value, be
deemed to be in compliance with all provisions of this ARTICLE IV, unless actual
notice of such non-compliance or non-completion executed by Declarant shall
appear of record in the office of the County Recorder of San Mateo County,
California, or unless legal proceedings shall have been instituted to enforce
compliance or completion.
4.5 Fee. An architectural review fee shall be paid to Declarant at the
time plans are submitted for approval based upon the following schedule:
(a) When the plans submitted are prepared by an architect licensed
to practice in the State of California, the architectural review fee shall
be $100.00.
(b) In all other cases, the architectural review fee shall be
$200.00.
ARTICLE V
DURATION AND MODIFICATION AND REPEAL
5.1 Term. This Declaration, every provision hereof and every covenant,
conditions and restriction contained herein shall continue in full force and
effect for a period of sixty (60) years from the date hereof.
5.2 Termination and Modification. This Declaration or any provisions
thereof or any covenant, condition or restriction contained herein may be
terminated, extended, modified or amended as to the whole of said property or
any portion thereof, with the written consent of the Owners of sixty-five
percent (65%) in area of the Property; provided that so long as Declarant owns
at least twenty percent (20%) in area of the Property, no such termination,
extension, modification or amendment shall be effective without Declarant's
written approval. No termination, extension, modification or amendment hereof
shall be effective until a written instrument embodying the same has been
executed and recorded in the Official Records of San Mateo County.
ARTICLE VI
ENFORCEMENT
6.1 Abatement and Suit. Violation or breach of any restriction herein
contained shall give to Declarant the right to enter upon the Property upon or
as to which said violation or breach exists and summarily to abate and remove at
the expense of the Owner, Lessee or occupant thereof any structure, thing or
condition that may be or exist thereon contrary to the intent and meaning of the
provisions hereof, or to prosecute a proceeding at law or in equity against the
person or persons who have violated or are attempting to violate any of these
restrictions to enjoin or prevent them from doing so, to cause said violation to
be remedied or to recover damages for said violation. In addition, every Owner
of a Site shall have the right, in the event of violation or breach of any
restriction herein contained, to prosecute a proceeding at law or in equity
against the person or persons who have violated or are attempting to violate any
of these restrictions to enjoin or to recover damages for said violation. All
remedies provided herein or at law or in equity shall be cumulative and not
exclusive.
4
<PAGE> 44
6.2 Deemed to Constitute a Nuisance. The result of every action or
omission whereby any restriction herein contained is violated in whole or in
part is hereby declared to be and to constitute a nuisance. Every remedy allowed
by law or equity against an Owner, either public or private, shall be applicable
against every such result and may be exercised by Declarant or by any Owner of
property subject hereto. Any costs or expenses paid or incurred by Declarant or
an Owner (collectively referred to as "Declarant" in this Section 6.2) in
abating such nuisance or prosecuting any such remedy (including all reasonable
attorneys' fees and costs of collection), together with interest thereon at the
rate of ten percent (10%) per annum, shall be a charge against the Site on which
the nuisance has occurred or is occurring, shall be a continuing lien thereon
until paid, and shall also be the personal obligation of the Owner of such Site
when such charges became due and who committed such breach or violation. In
addition to any other rights or remedies hereunder, Declarant may deliver to the
Owner of the Site on which the nuisance has occurred or is occurring and record
with the San Mateo County Recorder a certificate of notice of claim of lien. If
the violation recited in such lien claim has not been cured to Declarant's
satisfaction and any recited amounts so charged have not been paid within thirty
(30) days thereafter, Declarant or its authorized representative may foreclose
such lien by a sale conducted pursuant to Sections 2924, 2924b and 2924c of the
California Civil Code, as amended from time to time, or other statues applicable
to the exercise of powers of sales in mortgages or Deeds of Trust, or in any
other manner permitted by law. Declarant, through its authorized
representatives, may bid on and acquire any land subject to such lien at any
such foreclosure sale. If the violations recited in such lien claim are timely
cured and any recited amounts timely paid as provided above, Declarant shall
forthwith record an appropriate release of such lien at Declarant's sole
expense.
6.3 Attorneys' Fees. In any legal or equitable proceeding for the
enforcement or to restrain the violation of this Declaration or any provision
hereof, the losing party or parties shall pay the attorneys' fees of the
prevailing party or parties, in such amount as may be fixed by the court in such
proceedings.
6.4 Failure to Enforce Not a Waiver of Rights. The failure of Declarant or
any Owner to enforce any restriction herein contained shall in no event be
deemed to be a waiver of the right to do so thereafter nor of the right to
enforce any other restriction.
ARTICLE VII
MISCELLANEOUS PROVISIONS
7.1 Assignment of Declarant's Rights and Duties. Declarant may assign any
and all of its rights, powers, reservations and obligations hereunder to any
person, corporation or association. To be effective, any such assignments must
be accepted in writing by the assignee and the acceptance must be recorded in
the Official Records of San Mateo County. To the extent of the assignment, the
assignee shall have the same rights, obligations, duties and powers and be
subject to the same obligations and duties as given to and assumed by Declarant
herein. The term Declarant as used herein includes all such assignees and their
heirs, successors and assigns. Declarant may also resign as Declarant by
recording a written notice of resignation in the Official Records of San Mateo
County and mailing a copy thereof to each then Owner. The resignation shall be
effective on the date it is recorded and Declarant shall thereafter have no
further rights, powers, reservations, obligation or liabilities hereunder. If at
any time Declarant either resigns or ceases to exist without making an
assignment of its authority as Declarant, a successor Declarant may be appointed
in the same manner as this Declaration may be terminated, extended, modified or
amended under Section 2 of ARTICLE IV.
7.2 Constructive Notice and Acceptance. Every person or other entity who
now or hereafter owns or acquires any right, title or interest in or to any
portion of the Property is and shall be conclusively deemed to have consented
and agreed to every covenant, condition and restriction contained herein,
whether or not any reference to this Declaration is contained in the instrument
by which such person or entity acquired an interest in said property.
7.3 Waiver. Neither Declarant nor its successors or assigns shall be
liable to any Owner, Lessee, licensee or occupant of land subject to his
Declarant by reason of any mistake in judgment, negligence, nonfeasance, action
or inaction and/or for the enforcement or failure to enforce any provision of
this Declaration. Every Owner, Lessee, licensee or occupant of any of said
property by acquiring his interest therein agrees that he will not bring any
action or suit against Declarant to recover any damages or to seek equitable
relief because of any mistake in judgment, negligence, nonfeasance, action or
inaction and/or the enforcement or failure to enforce any provision of this
Declaration.
7.4 Mutuality, Reciprocity, Runs with Land. All covenants, conditions,
restrictions and agreements contained herein are made for the direct, mutual and
reciprocal benefit of each and every part and parcel of the property now or
hereafter made subject to this Declaration, shall create reciprocal rights and
obligations between the respective Owners of all parcels and privity of contract
and estate between all
5
<PAGE> 45
grantees of said parcels, their heirs, successors and assigns, and shall, as to
the Owner of each parcel, his heirs, successors and assigns, operate as
covenants running with the land for the benefit of all other parcels.
7.5 Rights of Beneficiaries. No breach of the restrictions and other
provisions contained herein shall defeat or render invalid the lien of any Deed
of Trust now or hereafter executed upon land subject to these restrictions;
provided, however, that if any portion of said property is sold under a
foreclosure of any mortgage or under the provisions of any deed of trust, any
purchaser at such sale and his successors and assigns shall hold any and all
property so purchased subject to all of the restrictions and other provisions of
this Declaration.
7.6 Paragraph Headings. Paragraph headings, where used herein, are
inserted for convenience only and are not intended to be a part of this
Declaration or in any way to define, limit or describe the scope and intent to
the particular paragraphs to which they refer.
7.7 Effect of Invalidation. If any provision of this Declaration is held
to be invalid by any court, the invalidity of such provision shall not affect
the validity of the remaining provisions hereof.
7.8 Existing Improvements. Improvements which are completely constructed
on the date this Declaration is recorded are deemed to satisfy all the
requirements hereof.
7.9 Estoppel Certificate. At the request of an Owner, Declarant shall
supply to such Owner or any actual or potential encumbrancer or purchaser of a
Site a written certificate stating that there are no violations hereof, or if
there are any such violations, the nature of such violations. Such certificate
shall be delivered within ten (10) working days after such request by an Owner.
INITIALS:
TENANT: /s/ [UNABLE TO READ]
---------------------
LANDLORD:
---------------------
6
<PAGE> 46
EXHIBIT E
HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE - (EXAMPLE)
Your cooperation in this matter is appreciated. Initially, the information
provided by you in this Hazardous Materials Disclosure Certificate is necessary
for the Landlord (identified below) to evaluate and finalize a lease agreement
with you as tenant. After a lease agreement is signed by you and the Landlord
(the "Lease Agreement"), on an annual basis in accordance with the provisions of
Section 29 of the signed Lease Agreement, you are to provide an update to the
information initially provided by you in this certificate. The information
contained in the initial Hazardous Materials Disclosure Certificate and each
annual certificate provided by you thereafter will be maintained in
confidentiality by Landlord subject to release and disclosure as required by (i)
any lenders and owners and their respective environmental consultants, (ii) any
prospective purchaser(s) of all or any portion of the property on which the
Premises are located, (iii) Landlord to defend itself or its lenders, partners
or representatives against any claim or demand, and (iv) any laws, rules,
regulations, orders, decrees, or ordinances, including, without limitation,
court orders or subpoenas. Any and all capitalized terms used herein, which are
not otherwise defined herein, shall have the same meaning ascribed to such term
in the signed Lease Agreement. Any questions regarding this certificate should
be directed to, and when completed, the certificate should be delivered to:
Landlord:
------------------------------------------------------
------------------------------------------------------
c/o Lincoln Property Company Management Services, Inc.
101 Lincoln Centre Drive, Fourth Floor
Foster City, California 94404
Phone: (415) 571-2200
Name of (Prospective) Tenant: Sequus Pharmaceuticals, Inc., A Delaware
-------------------------------------------------
Corporation
- -------------------------------------------------------------------------------
Mailing Address: 960 Hamilton Court, Menlo Park, California 94025
---------------------------------------------------------------
Contact Person, Title and Telephone Number(s):
--------------------------------
Contact Person for Hazardous Waste Materials Management and Manifests and
Telephone Number(s):
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Address of (Prospective) Premises: 1360 Willow Road, Suites 101, 201, 203 and
--------------------------------------------
204 Menlo Park, California 94025
- -------------------------------------------------------------------------------
Length of (Prospective) initial Term: March 1, 1996 - April 30, 2003
-----------------------------------------
(approximately 7 years)
- -------------------------------------------------------------------------------
1. GENERAL INFORMATION:
Describe the initial proposed operations to take place in, on, or about
the Premises, including, without limitation, principal products
processed, manufactured or assembled services and activities to be
provided or otherwise conducted. Existing tenants should describe any
proposed changes to on-going operations.
-----------------------------------------------------------------------
-----------------------------------------------------------------------
2. USE, STORAGE AND DISPOSAL OF HAZARDOUS MATERIALS
2.1 Will any Hazardous Materials be used, generated, stored or
disposed of in, on or about the Premises? Existing tenants
should describe any Hazardous Materials which continue to be
used, generated, stored or disposed of in, on or about the
Premises.
Wastes Yes / / No / /
Chemical Products Yes / / No / /
Other Yes / / No / /
If Yes is marked, please explain:
-----------------------------
--------------------------------------------------------------
--------------------------------------------------------------
2.2 If Yes is marked in Section 2.1, attach a list of any
Hazardous Materials to be used, generated, stored or disposed
of in, on or about the Premises, including the applicable
1
<PAGE> 47
hazard class and an estimate of the quantities of such
Hazardous Materials at any given time; estimated annual
throughput; the proposed location(s) and method of storage
(excluding nominal amounts of ordinary household cleaners and
janitorial supplies which are not regulated by any
Environmental Laws); and the proposed location(s) and method
of disposal for each Hazardous Material, including, the
estimated frequency, and the proposed contractors or
subcontractors. Existing tenants should attach a list setting
forth the information requested above and such list should
include actual data from on-going operations and the
identification of any variations in such information from the
prior year's certificate.
3. STORAGE TANKS AND SUMPS
3.1 Is any above or below ground storage of gasoline, diesel,
petroleum, or other Hazardous Materials in tanks or sumps
proposed in, on or about the Premises? Existing tenants should
describe any such actual or proposed activities.
Yes / / No / /
If yes, please explain:
---------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
4. WASTE MANAGEMENT
4.1 Has your company been issued an EPA Hazardous Waste Generator
I.D. Number? Existing tenants should describe any additional
identification numbers issued since the previous certificate.
Yes / / No / /
4.2 Has your company filed a biennial or quarterly reports as a
hazardous waste generator? Existing tenants should describe
any new reports filed.
Yes / / No / /
If yes, attach a copy of the most recent report filed.
5. WASTEWATER TREATMENT AND DISCHARGE
5.1 Will your company discharge wastewater or other wastes to:
storm drain? sewer?
--- ---
surface water? no wastewater or other wastes discharged.
--- ---
Existing tenants should indicate any actual discharges. If so,
describe the nature of any proposed or actual discharge(s).
--------------------------------------------------------------
--------------------------------------------------------------
5.2 Will any such wastewater or waste be treated before discharge?
Yes / / No / /
If yes, describe the type of treatment proposed to be
conducted. Existing tenants should describe the actual
treatment conducted.
--------------------------------------------------------------
--------------------------------------------------------------
6. AIR DISCHARGES
6.1 Do you plan for any air filtration systems or stacks to be
used in your company's operations in, on or about the Premises
that will discharge into the air; and will such air emissions
be monitored? Existing tenants should indicate whether or not
there are any such air filtration systems or stacks in use in,
on or about the Premises which discharge into the air and
whether such air emissions are being monitored.
Yes / / No / /
If yes, please describe:
--------------------------------------
--------------------------------------------------------------
2
<PAGE> 48
--------------------------------------------------------------
6.2 Do you propose to operate any of the following types of
equipment, or any other equipment requiring an air emissions
permit? Existing tenants should specify any such equipment
being operated in, on or about the Premises.
Spray booth(s) Incinerator(s)
--- ---
Dip tank(s) Other (Please describe)
--- ---
Drying oven(s) No Equipment Requiring Air Permits
--- ---
If yes, please describe:
--------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
7. HAZARDOUS MATERIALS DISCLOSURES
7.1 Has your company prepared or will it be required to prepare a
Hazardous Materials management plan ("Management Plan")
pursuant to Fire Department or other governmental or
regulatory agencies' requirements? Existing tenants should
indicate whether or not a Management Plan is required and has
been prepared.
Yes / / No / /
If yes, attach a copy of the Management Plan. Existing tenants
should attach a copy of any required updates to the Management
Plan.
7.2 Are any of the Hazardous Materials, and in particular
chemicals, proposed to be used in your operations in, on or
about the Premises regulated under Proposition 65? Existing
tenants should indicate whether or not there are any new
Hazardous Materials being so used which are regulated under
Proposition 65.
Yes / / No / /
If yes, please explain:
---------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
8. ENFORCEMENT ACTIONS AND COMPLAINTS
8.1 With respect to Hazardous Materials or Environmental Laws, has
your company ever been subject to any agency enforcement
actions, administrative orders, or consent decrees or has your
company received requests for information, notice or demand
letters, or any other inquiries regarding its operations?
Existing tenants should indicate whether or not any such
actions, orders or decrees have been, or are in the process of
being, undertaken or if any such requests have been received.
Yes / / No / /
If yes, describe the actions, orders or decrees and any
continuing compliance obligations imposed as a result of these
actions, orders or decrees and also describe any requests,
notices or demands, and attach a copy of all such documents.
Existing tenants should describe and attach a copy of any new
actions, orders, decrees, requests, notices or demands not
already delivered to Landlord pursuant to the provisions of
Section 29 of the signed Lease Agreement.
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
8.2 Have there ever been, or are there now pending, any lawsuits
against your company regarding any environmental or health and
safety concerns?
Yes / / No / /
If yes, describe any such lawsuits and attach copies of the
complaint(s), cross-complaint(s), pleadings and all other
documents related thereto as requested by Landlord. Existing
tenants should describe and attach a copy of any new
complaint(s), cross-complaint(s), pleadings and other related
documents not already delivered to Landlord pursuant to the
provisions of Section 29 of the signed Lease Agreement.
--------------------------------------------------------------
--------------------------------------------------------------
3
<PAGE> 49
--------------------------------------------------------------
8.3 Have there been any problems or complaints from adjacent
tenants, owners or other neighbors at your company's current
facility with regard to environmental or health and safety
concerns? Existing tenants should indicate whether or not
there have been any such problems or complaints from adjacent
tenants, owners or other neighbors at, about or near the
Premises.
Yes / / No / /
If yes, please describe. Existing tenants should describe any
such problems or complaints not already disclosed to Landlord
under the provisions of the signed Lease Agreement.
--------------------------------------------------------------
--------------------------------------------------------------
9. PERMITS AND LICENSES
9.1 Attach copies of all Hazardous Materials permits and licenses
including a Transporter Permit number issued to your company
with respect to its proposed operations in, on or about the
Premises, including, without limitation, any wastewater
discharge permits, air emissions permits, and use permits or
approvals. Existing tenants should attach copies of any new
permits and licenses as well as any renewals of permits or
licenses previously issued.
The undersigned hereby acknowledges and agrees that (A) this Hazardous Materials
Disclosure Certificate is being delivered in connection with, and as required
by, Landlord in connection with the evaluation and finalization of a Lease
Agreement and will be attached thereto as an exhibit; (B) that this Hazardous
Materials Disclosure Certificate is being delivered in accordance with, and as
required by, the provisions of Section 29 of the Lease Agreement; and (C) that
Tenant shall have and retain full and complete responsibility and liability with
respect to any of the Hazardous Materials disclosed in the HazMat Certificate
notwithstanding Landlord's/Tenant's receipt and/or approval of such certificate.
Tenant further agrees that none of the following described acts or events shall
be construed or otherwise interpreted as either (a) excusing, diminishing or
otherwise limiting Tenant from the requirement to fully and faithfully perform
its obligations under the Lease with respect to Hazardous Materials, including,
without limitation, Tenant's indemnification of the Indemnitees and compliance
with all Environmental Laws, or (b) imposing upon Landlord, directly or
indirectly, any duty or liability with respect to any such Hazardous Materials,
including, without limitation, any duty on Landlord to investigate or otherwise
verify the accuracy of the representations and statements made therein or to
ensure that Tenant is in compliance with all Environmental Laws; (i) the
delivery of such certificate to Landlord and/or Landlord's acceptance of such
certificate, (ii) Landlord's review and approval of such certificate, (iii)
Landlord's failure to obtain such certificate from Tenant at any time, or (iv)
Landlord's actual or constructive knowledge of the types and quantities of
Hazardous Materials being used, stored, generated, disposed of or transported on
or about the Premises by Tenant or Tenant's Representatives. Notwithstanding the
foregoing or anything to the contrary contained herein, the undersigned
acknowledges and agrees that Landlord and its partners, lenders and
representatives may, and will, rely upon the statements, representations,
warranties, and certifications made herein and the truthfulness thereof in
entering into the Lease Agreement and the continuance thereof throughout the
term, and any renewals thereof, of the Lease Agreement.
I (print name) , acting with full authority to bind the
------------------
(proposed) Tenant and on behalf of the (proposed) Tenant, certify, represent
and warrant that the information contained in this certificate is true and
correct.
(PROSPECTIVE) TENANT:
By:
----------------------------
Title:
----------------------------
Date:
----------------------------
INITIALS:
TENANT: /s/ [UNABLE TO READ]
---------------------
LANDLORD:
---------------------
4
<PAGE> 50
ADDENDUM 1
OPTION TO EXPAND
PAGE 1 OF 3
This Addendum 1 is incorporated as part of that certain Lease Agreement dated
February 1, 1996 (the "Lease"), by and between Sequus Pharmaceuticals, Inc., a
California corporation ("Tenant"), and LINCOLN MENLO VI, A CALIFORNIA LIMITED
PARTNERSHIP ("Landlord"), for the leasing of those certain premises located at
1360 Willow Road, Suites 101, 201, 203 and 204 Menlo Park, California as more
particularly described in Exhibit A to the Lease (the "Premises"). Any
capitalized terms used herein and not otherwise defined herein shall have the
meaning ascribed to such terms as set forth in the Lease.
1. Grant of Expansion Option. So long as Tenant is not in default in the
performance of any of its obligations under this Lease at the time of Tenant's
exercise of the Expansion Option (defined below), and subject to the following:
(i) Landlord's review and approval of Tenant's then current financial condition
at the time of Tenant's exercise of the Expansion Option (provided, Landlord
will not withhold its approval of Tenant's then current financial condition if
the net worth of Tenant at the time of such exercise is substantially the same
or better than Tenant's financial condition as of the Commencement Date); and
(ii) the proper and timely exercise of the Expansion Option by Tenant in
accordance with the provisions of this Addendum 1, Tenant shall have a one-time
option (the "Expansion Option") to lease additional space in the Building (the
"Expansion Premises") on the terms and conditions as set forth below in this
Addendum 1. The term "Expansion Premises" as used herein shall mean and refer to
those certain premises located at Suite 103, 1360 Willow Road, Menlo Park,
California consisting of approximately 15,129 square feet. [Notwithstanding
anything to the contrary contained herein, the Expansion Option shall (a) be
subject and subordinate to the rights of any existing tenant that is currently
leasing the Expansion Premises as of the Commencement Date (including without
limitation, any existing tenant's assignees and/or subtenants) under the terms
and provisions of such existing tenant's lease agreements, and (b) not be
effective until and unless the Expansion Premises becomes available for lease by
a third party during the Expansion Option Period (defined below).]
2. Tenant's Election Notice to Lease Expansion Premises; and Lease Term for
Expansion Premises. In order to duly exercise the Expansion Option hereunder
Tenant must deliver to Landlord at least eight (8) months' prior written notice
of its unconditional and unequivocal intention to exercise the Expansion Option
to lease the Expansion Premises, unless the parties mutually and expressly agree
otherwise, in writing, to a shorter time period (the "Expansion Option Notice").
Tenant hereby acknowledges and agrees that Landlord needs and requires at least
eight (8) months' prior written notice of Tenant's election to exercise the
Expansion Option hereunder. In order to provide Landlord with such an eight (8)
month period of time and in order for Tenant to properly exercise the Expansion
Option hereunder, Tenant must deliver to Landlord the Expansion Option Notice
for the Expansion Premises at any time during the period commencing on January
1, 1997 and ending at 5:00 p.m. (Pacific Time) on May 1, 1997 (the "Expansion
Option Period"). If the all of the following conditions are satisfied: (i) the
Expansion Premises becomes available for lease by a third party during the
Expansion Option Period; (ii) Tenant timely and duly delivers to Landlord the
Expansion Option Notice within the Expansion Option Period; and (iii) Tenant
also complies with all of the terms and provisions of this Addendum 1, then the
initial term of the Lease for the Expansion Premises may be coterminous with the
term of the Lease for the Premises, but the initial term of the Lease for the
Expansion Premises shall be for a period of not less than five (5) years. The
commencement date of the initial term of the Lease with respect to the Expansion
Premises and the date on which Tenant shall commence making rental and
additional rental payments thereunder for the Expansion Premises shall be as
follows: (a) the commencement date of the initial term of the Lease and the date
on which Tenant shall commence paying the Additional Rent charges (i.e.
Operating Expenses, Tax Expenses, Administrative Expenses, Common Area Utility
Costs, and Utility Expenses) for the Expansion Premises shall be on or about
January 1, 1998, depending upon the date on which Landlord actually obtains
possession of the Expansion Premises; (b) the date on which Tenant shall
commence paying monthly Base Rent for the Expansion Premises shall be forty-five
(45) days after the actual commencement date of the initial term of the Lease,
which date the parties anticipate to be on or about March 15, 1998.
Notwithstanding the foregoing, the actual commencement date of the initial term
under the Lease for the Expansion Premises shall not be dependent upon
completion of any tenant improvement work therein, rather than the actual
commencement date shall be the date on which the then existing tenant of such
premises (including without limitation, any assignee and subtenant of any
existing tenant) vacates and lawfully surrenders possession of the Expansion
Premises to Landlord regardless of whether or not any required tenant
improvement work has been substantially completed by such date.
3. Establishing the Monthly Base Rent; Base Rent Increases; and Tenant
Improvement Allowances for the Expansion Premises. The amount of the monthly
Base Rent initially to be paid by Tenant for the Expansion Premises shall be an
amount equal to the greater of the following: (i) one and 20/100 dollars ($1.20)
per square foot on a triple net basis; or (ii) ninety-five percent (95%) of the
then current market rent for similar space located within the comparable market
area of the Expansion Premises at the time of Tenant's delivery to Landlord of
the Expansion Option Notice (the "Fair Rental Value"), as such Fair Rental Value
is agreed upon by and between Landlord and Tenant and their agents appointed for
this purpose. In determining the amount of the Fair Rental Value for the
Expansion Premises all relevant factors regarding the leasing of the Expansion
Premises shall be taken into consideration, including
Language indicated as being shown by strike-out in the typeset document
is enclosed in brackets "[" and "]" in the electronic format.
1
<PAGE> 51
ADDENDUM 1
OPTION TO EXPAND
PAGE 2 OF 3
without limitation, the length of term, the uses permitted under the lease, the
quality, size and design of the Expansion Premises (including the condition and
value of the existing tenant improvements), and any tenant improvement allowance
being provided by Landlord to Tenant for the Expansion Premises. The amount of
any brokerage commissions payable shall not be taken into consideration in
determining the Fair Rental Value. The Fair Rental Value for the Expansion
Premises shall be so determined by the parties within ten (10) business days of
the date on which Landlord receives Tenant's Expansion Option Notice for the
Expansion Premises. If Landlord and Tenant are unable to agree on the Fair
Rental Value for the Expansion Premises within the above-described ten (10)
business day period, Landlord and Tenant each, at its cost and by giving notice
to the other party, shall promptly appoint a competent and disinterested
commercial real estate broker with at least five (5) years' full-time commercial
real estate brokerage experience in the geographical area of the Expansion
Premises to appraise and set the Fair Rental Value for the Expansion Premises.
If either Landlord or Tenant does not appoint a commercial real estate broker
within five (5) days after the other party has given notice of the name of its
commercial real estate broker, the single commercial real estate broker
appointed shall be the sole commercial real estate broker and shall set the Fair
Rental Value for the Expansion Premises. If two (2) commercial real estate
brokers are appointed by Landlord and Tenant as stated in this section, they
shall meet promptly and attempt to set the Fair Rental Value. If the two (2)
commercial real estate brokers are unable to agree within ten (10) days after
the second commercial real estate broker has been appointed, they shall attempt
to select a third commercial real estate broker meeting the qualifications
stated in this section within five (5) days after the last day the two (2)
commercial real estate brokers are given to set the Fair Rental Value. If they
are unable to agree on the third commercial real estate broker, either Landlord
or Tenant by giving five (5) business days' notice to the other party, can apply
to the Presiding Judge of the Superior Court of the county in which the
Expansion Premises is located for the selection of a third commercial real
estate broker who meets the qualifications stated in this section. Landlord and
Tenant each shall bear one-half (1/2) of the cost of appointing the third
commercial real estate broker and of paying the third commercial real estate
broker's fee. The third commercial real estate broker, however selected, shall
be a person who has not previously acted in any capacity for either Landlord or
Tenant. Within fifteen (15) days after the selection of the third commercial
real estate broker, the third commercial real estate broker shall select one of
the two Fair Rental Values submitted by the first two commercial real estate
brokers as the Fair Rental Value for the Expansion Premises. If either of the
first two commercial real estate brokers fails to timely submit their opinion of
the Fair Rental Value, then the single Fair Rental Value submitted shall
automatically be accepted by Landlord and Tenant as the Fair Rental Value for
the Expansion Premises. Within ten (10) days after the amount of the initial
monthly Base Rent for the Expansion Premises is ultimately determined in
accordance with the provisions hereof, the parties shall execute an amendment to
this Lease; which amendment shall set forth, among other things, the addition of
the Expansion Premises to the definition of the Premises, the initial amount of
the monthly Base Rent payable by Tenant, the adjusted amount of the monthly Base
Rent payable by Tenant, the increased amount of the Security Deposit, and the
amount of the tenant improvement allowance to be provided by Landlord therefor.
Notwithstanding anything to the contrary contained herein, in no event or
circumstance shall the initial amount of the monthly Base Rent payable by Tenant
for the Expansion Premises be less than an amount equal to one and 20/100
dollars ($1.20) per square foot on a triple net basis for 15,129 square feet.
The monthly Base Rent payable by Tenant for the Expansion Premises shall be
increased on the first day of the thirty-first (31st) month of the initial term
of the Lease for the Expansion Premises (the "Adjustment Date") by an amount
equal to five cents ($0.05) per square foot; such increased amount of monthly
Base Rent shall be paid by Tenant commencing on the Adjustment Date and
continuing throughout the balance of the initial term of the Lease for the
Expansion Premises.
4. Brokerage Commissions for the Expansion Premises. Tenant hereby agrees that
it will be solely responsible for any and all brokerage commissions and finder's
fees payable or allegedly payable to any broker now or hereafter procured or
otherwise hired by Tenant ("Tenant's Broker") in connection with Tenant's
leasing of the Expansion Premises. Tenant hereby further agrees that Landlord
shall in no event or circumstance be responsible or otherwise liable for the
payment of any such brokerage commissions and/or finder's fees to Tenant's
Broker and, accordingly, Tenant shall indemnify, defend and hold Landlord and
each of its partners, representatives and agents harmless from and against any
and all claims, damages, judgments, liabilities, costs and expenses (including
without limitation, attorneys' and experts' fees and costs) related thereto.
5. Limitations on, and Conditions to, Expansion Options.
5.1 The Expansion Option granted to Tenant herein is personal to Tenant
and may not be assigned, voluntarily or involuntarily, separate from or as a
part of this Lease except to any Related Entity of Tenant. At Landlord's sole
option, all rights of Tenant under this Addendum 1 shall forever terminate and
be of no force and effect if any of the following individual events occur or any
combination thereof occur at any time during the term of this Lease: (i) Tenant
or any Related Entity has been in [material] default of any of the provisions of
Sections 3, 6, and/or 7 more than twice during the term of this Lease, or Tenant
or the Related Entity, as applicable, has been in default of any of the
provisions of Sections 9 and/or 29 of this Lease beyond any applicable cure
periods [, 9 and/or 29 of this Lease] at any time during the term of the Lease,
or Tenant or the Related Entity, as applicable, is in material default of any
provision of this Lease at the time of Tenant's or the Related Entity's (as
applicable) delivery to Landlord of the Expansion Option Notice; and/or (ii)
Tenant has assigned its rights and delegated its obligations under all or part
of this Lease to any party other than a Related Entity, or Tenant has subleased
[all or]
Language indicated as being shown by strike-out in the typeset document
is enclosed in brackets "[" and "]" in the electronic format.
2
<PAGE> 52
ADDENDUM 1
OPTION TO EXPAND
PAGE 3 OF 3
[part]more than ten percent (10%) in the aggregate of the Premises leased by
Tenant under this Lease to a party other than a Related Entity; and/or (iii)
Tenant's or the Related Entity's financial condition, as the case may be, is
unacceptable to Landlord at the time of Tenant's or the Related Entity's (as
applicable) delivery to Landlord of the Expansion Option Notice (provided,
Landlord will not withhold its approval of Tenant's or the Related Entity's, as
applicable, then current financial condition if the net worth of Tenant or the
Related Entity, as the case may be, at the time of such exercise is
substantially the same or better than Tenant's financial condition as of the
Commencement Date); and/or (iv) Tenant or the Related Entity, as the case may
be, has failed to timely, properly and duly exercise the subject Expansion
Option in strict accordance with the provisions of this Addendum 1; and/or (v)
Tenant or the Related Entity, as the case may be, no longer has possession of
all or any part of the Premises or if this Lease has been terminated earlier
pursuant to the provisions hereof.
5.2 If any of the following described events occur the subject Expansion
Option shall automatically terminate with respect to the subject Expansion
Premises and thereafter be of no further force or effect: (i) Tenant or the
Related Entity, as the case may be, elects not to exercise the Expansion Option
for the Expansion Premises; or (ii) Tenant or the Related Entity, as the case
may be, fails to timely deliver an Expansion Option Notice to Landlord within
the Expansion Option Period[; or (iii) the Expansion Premises do not become
available during the Expansion Option Period]. If any of the foregoing events
occur, Tenant shall have no further right to exercise the Expansion Option
thereafter. It is the express intention of the parties hereto that the Expansion
Option only be available to be exercised, declined or deemed declined by Tenant
one time and the Expansion Option shall not be construed nor interpreted as
being a continuing right of Tenant or of a continuing nature.
INITIALS:
TENANT: /s/ [UNABLE TO READ]
---------------------
LANDLORD:
---------------------
Language indicated as being shown by strike-out in the typeset document
is enclosed in brackets "[" and "]" in the electronic format.
3
<PAGE> 53
ADDENDUM 2
RIGHT OF FIRST OFFER
PAGE 1 OF 2
This Addendum 2 is incorporated as part of that certain Lease Agreement dated
February 1, 1996 (the "Lease"), by and between Sequus Pharmaceuticals, Inc., a
California corporation ("Tenant"), and LINCOLN MENLO VI, A CALIFORNIA LIMITED
PARTNERSHIP ("Landlord"), for the leasing of those certain premises located at
1360 Willow Road, Suites 101, 201, 203 and 204 Menlo Park, California as more
particularly described in Exhibit A to the Lease (the "Premises"). Any
capitalized terms used herein and not otherwise defined herein shall have the
meaning ascribed to such terms as set forth in the Lease.
1. Grant of First Offer Right. During the initial term of this Lease only (but
specifically excluding any renewals or extensions of such initial term) (the
"First Offer Right Period") Landlord hereby grants to Tenant a one-time right to
make a first offer to lease from Landlord (the "First Offer Right") those
certain premises consisting of approximately 12,974 square feet and located in
Building T at 1350 Willow Road, Suites 202 and 204, Menlo Park, California (the
"First Offer Premises"). The First Offer Right shall be subject to the terms,
conditions and provisions as set forth below in this Addendum 2.
2. Landlord's Availability Notice; Tenant's Election Notice; and Non-Refundable
Deposit. So long as all of the conditions set forth in Section 3 below are
satisfied or any event described in Section 3 below does not occur, as the case
may be, if and when the First Offer Premises becomes available for lease by a
third party other than by Progressive Angioplasty Systems, Inc. during the First
Offer Right Period and Landlord desires, at Landlord's sole option, to lease the
First Offer Premises, Landlord shall deliver to Tenant written notice, by U.S.
mail, of the availability of the First Offer Premises (the "Availability
Notice"). The Availability Notice shall contain the following information: (i)
the specific location and size of the First Offer Premises if different from
that as described herein; (ii) the estimated date upon which Landlord can
deliver to Tenant possession of the First Offer Premises, and (iii) the terms
and conditions upon which Landlord is willing to lease the First Offer Premises
to Tenant, including without limitation, the amount of Base Rent, the amount of
Additional Rent charges (i.e. Operating Expenses, Tax Expenses, Administrative
Expenses, Common Area Utility Costs, and Utility Expenses), the amount of any
security deposit, and the required initial term of the lease therefor. Within
five (5) business days following Tenant's receipt of an Availability Notice,
Tenant shall deliver to Landlord written notice of Tenant's election or
declination to lease the First Offer Premises on the same terms and conditions
as offered to Tenant in the Availability Notice (the "Election Notice"). In no
event or circumstance will Tenant be permitted to vary any of such offered terms
and conditions, it being the intention of the parties that Tenant may only elect
to lease the First Offer Premises on the same identical terms and conditions as
contained in the subject Availability Notice. If Tenant fails to timely deliver
the Election Notice to Landlord for the First Offer Premises within the five (5)
business day time period specified herein, it shall be deemed that (a) Tenant
has elected not to lease the First Offer Premises; (b) Landlord may thereafter
enter into a lease agreement with a third party; and (c) the First Offer Right
of Tenant hereunder shall forever terminate and be of no further force or
effect. If Tenant notifies Landlord that Tenant declines to lease the First
Offer Premises as then offered by Landlord to Tenant or if Tenant attempts to
vary any of the terms and conditions contained in the Availability Notice, then
the First Offer Right with respect to the First Offer Premises shall terminate
forever and be of no further force or effect. If Tenant timely, properly and
duly exercises the First Offer Right for the First Offer Premises in strict
accordance with the provisions of this Addendum 2, concurrently with Tenant's
delivery to Landlord of the Election Notice Tenant shall deliver to Landlord a
non-refundable deposit (in cash) in an amount equal to the last month's Base
Rent for the First Offer Premises as specified in the Availability Notice (the
"Good Faith Deposit"). Within fifteen (15) business days after Landlord's
receipt from Tenant of the Election Notice and the Good Faith Deposit, Tenant
shall execute either a new lease agreement in substantially the same form as
this Lease or an amendment to this Lease incorporating the terms and conditions
set forth in the subject Availability Notice and such other terms and provisions
as the parties may agree upon (the "New Lease Instrument"). Upon full execution
by the parties of such New Lease Instrument for the First Offer Premises,
Landlord shall credit the amount of the Good Faith Deposit toward the monthly
Base Rent or any security deposit payable by Tenant for the First Offer Premises
under the New Lease Instrument. If Tenant fails to execute and deliver to
Landlord the New Lease Instrument for the First Offer Premises prior to the
expiration of such fifteen (15) business day period, then Landlord shall retain
the Good Faith Deposit without any obligation to refund any portion thereof to
Tenant and Tenant shall have no further rights (including without limitation,
any First Offer Right) with respect to the First Offer Premises.
3. Limitations and Conditions Regarding the First Offer Rights.
3.1 The First Offer Right granted to Tenant herein is personal to Tenant
and may not be assigned, voluntarily or involuntarily, separate from or as a
part of this Lease except to any Related Entity of Tenant. At Landlord's sole
option, all rights of Tenant under this Addendum 2 shall forever terminate
1
<PAGE> 54
ADDENDUM 2
RIGHT OF FIRST OFFER
PAGE 2 OF 2
and be of no force and effect if any of the following individual events occur or
any combination thereof occur at any time during the term of this Lease: (i)
Tenant or any Related Entity has been in [material] default of any of the
provisions of Sections 3, 6 and/or 7 more than twice during the term of this
Lease, or Tenant or the Related Entity, as applicable, has been in default of
any of the provisions of Sections 9 and/or 29 of this Lease beyond any
applicable cure periods [,9 and/or 29 of this Lease] at any time during the term
of this Lease, or Tenant or the Related Entity, as applicable, is in material
default of any provision of this Lease at the time of Tenant's delivery to
Landlord of the Election Notice for the First Offer Premises; and/or (ii) Tenant
has assigned its rights and delegated its obligations under all or part of this
Lease to a party other than a Related Entity, or Tenant has subleased [all or
part] more than ten percent (10%) in the aggregate of the Premises to a party
other than a Related Entity; and/or (iii) Tenant's or the Related Entity's, as
the case may be, financial condition is unacceptable to Landlord at the time of
Tenant's or the Related Entity's, as the case may be, delivery to Landlord of
the Election Notice (provided, Landlord will not withhold its approval of
Tenant's or the Related Entity's, as applicable, then current financial
condition if the net worth of Tenant or the Related Entity, as the case may be,
at the time of such exercise is substantially the same or better than Tenant's
financial condition as of the Commencement Date); and/or (iv) Tenant or the
Related Entity, as the case may be, has failed to timely, properly and duly
exercise the First Offer Right in strict accordance with the provisions of this
Addendum 2; and/or (v) Tenant or the Related Entity, as the case may be, no
longer has possession of all or any part of the Premises, or if this Lease has
been terminated earlier pursuant to the terms and provisions of this Lease.
3.2 If any of the following described events occur the First Offer Right
shall automatically terminate with respect to the First Offer Premises and
thereafter be of no further force or effect: (i) Tenant or the Related Entity,
as the case may be, elects not to exercise the First Offer Right for the First
Offer Premises; (ii) Tenant or the Related Entity, as the case may be, fails to
timely deliver the Election Notice to Landlord within the First Offer Right
Period; (iii) Tenant or the Related Entity, as the case may be, fails to timely
deliver the Good Faith Deposit to Landlord within the applicable time period;
(iv) Tenant or the Related Entity, as the case may be, attempts to vary any of
the offered terms or provisions as contained in Landlord's Availability Notice;
or (v) the First Offer Premises do not become available during the First Offer
Right Period. If any of the foregoing events occur, Tenant or the Related
Entity, as the case may be, shall have no further right to exercise the First
Offer Right thereafter. It is the express intention of the parties hereto that
the First Offer Right only be available to be exercised, declined or deemed
declined by Tenant or the Related Entity, as the case may be, one time and the
First Offer Right shall not be construed nor interpreted as being a continuing
right of Tenant or the Related Entity, as the case may be, or of a continuing
nature.
3.3 Notwithstanding anything to the contrary contained herein, the First
Offer Right granted to Tenant herein shall be subject and subordinate to the
rights of the following parties: (i) the existing tenant (and any of its
assignees or subtenants) now occupying the First Offer Premises under such
tenant's lease as such lease may be modified, amended or extended; and (ii)
Progressive Angioplasty Systems, Inc.'s right of first refusal in and to the
First Offer Premises. Tenant hereby agrees that Landlord may take any and all
actions with respect to such existing tenant and its applicable lease agreement
as Landlord, in its sole discretion, may determine to be in Landlord's best
economic interest, including without limitation, renewing any such lease for the
existing tenant or otherwise extending the term of such tenant's lease, even
though such actions may be in contravention of the rights granted to Tenant
hereunder.
INITIALS:
TENANT: /s/ [UNABLE TO READ]
---------------------
LANDLORD:
---------------------
Language indicated as being shown by strike-out in the typeset document
is enclosed in brackets "[" and "]" in the electronic format.
2
<PAGE> 55
ADDENDUM 3
OPTIONS TO EXTEND THE LEASE TERM
PAGE 1 TO 2
This Addendum 3 is incorporated as part of that certain Lease Agreement dated
February 1, 1996 (the "Lease"), by and between Sequus Pharmaceuticals, Inc., a
California corporation ("Tenant"), and LINCOLN MENLO VI, A CALIFORNIA LIMITED
PARTNERSHIP ("Landlord"), for the leasing of those certain premises located at
1360 Willow Road, Suites 101, 201, 203 and 204 Menlo Park, California as more
particularly described in Exhibit A to the Lease (the "Premises"). Any
capitalized terms used herein and not otherwise defined herein shall have the
meaning ascribed to such terms as set forth in the Lease.
So long as Tenant is not in default in the performance of any of its obligations
under this Lease at the time of Tenant's exercise of the then applicable option
to extend the then applicable term of this Lease, Tenant shall have the right at
its option to extend the term of the Lease for two (2) successive five (5) year
periods (individually, the "First Extended Term" and the "Second Extended Term",
respectively, and collectively, the "Extended Terms"). The Lease of the Premises
during the Extended Terms shall be upon the same terms, covenants and conditions
as are set forth in this Lease, other than the monthly Base Rent and the term of
the Lease. If Landlord does not receive from Tenant written notice of Tenant's
exercise of this option on a date which is not more than three hundred sixty
(360) days nor less than two hundred forty (240) days prior to the end of the
initial term of the Lease or the end of the First Extended Term of this Lease,
as the case may be (an "Option Notice"), all rights under this option shall
automatically lapse and terminate and shall be of no further force and effect.
Time is of the essence herein. Additionally, if Tenant fails to timely or duly
exercise this option for the First Extended Term, all rights of Tenant under
this option to extend into the First Extended Term and the Second Extended Term
shall automatically lapse, terminate and shall be of no further force and
effect, and Tenant shall have no further rights to extend the term of this
Lease.
The monthly Base Rent for each of the First Extended Term and the Second
Extended Term shall be the then current market rent for the highest and best use
for similar space within the competitive market area of the Premises (the "Fair
Rental Value") agreed upon by and between Landlord and Tenant and their agents
appointed for this purpose. The "Fair Rental Value" of the Premises shall be
defined to mean the current market rental value of the Premises as of the
commencement of the First Extended Term or the Second Extended Term, as
applicable, taking into consideration all relevant factors, including length of
term, the uses permitted under the Lease, the quality, size, design and location
of the Premises, including the condition and value of existing tenant
improvements, and the monthly base rent paid by tenants for premises comparable
to the Premises, and located in Menlo Park, California.
If Landlord and Tenant are unable to agree on the Fair Rental Value for either
the First Extended Term or the Second Extended Term, as the case may be, within
ten (10) days of receipt by Landlord of the Option Notice for the then
applicable Extended Term, Landlord and Tenant each, at its cost and by giving
notice to the other party, shall appoint a competent and disinterested
commercial real estate broker (hereinafter "broker") with at least five (5)
years' full-time commercial real estate brokerage experience in the geographical
area of the Premises to set the Fair Rental Value for the First Extended Term or
the Second Extended Term, as the case may be. If either Landlord or Tenant does
not appoint a broker within ten (10) days after the other party has given notice
of the name of its broker, the single broker appointed shall be the sole broker
and shall set the Fair Rental Value for the First Extended Term or the Second
Extended Term, as the case may be. If two (2) brokers are appointed by Landlord
and Tenant as stated in this paragraph, they shall meet promptly and attempt to
set the Fair Rental Value. If the two (2) brokers are unable to agree within ten
(10) days after the second broker has been appointed, they shall attempt to
select a third broker, meeting the qualifications stated in this paragraph
within ten (10) days after the last day the two (2) brokers are given to set the
Fair Rental Value. If they are unable to agree on the third broker, either
Landlord or Tenant by giving ten (10) days' notice to the other party, can apply
to the Presiding Judge of the Superior Court of the county in which the Premises
is located for the selection of a third broker who meets the qualifications
stated in this paragraph. Landlord and Tenant each shall bear one-half (-1/2) of
the cost of appointing the third broker and of paying the third broker's fee.
The third broker, however selected, shall be a person who has not previously
acted in any capacity for either Landlord or Tenant. Within fifteen (15) days
after the selection of the third broker, the third broker shall select one of
the two Fair Rental Values submitted by the first two brokers as the Fair Rental
Value for the First Extended Term or the Second Extended Term, as the case may
be. If either of the first two brokers fails to submit their opinion of the Fair
Rental Value, then the single Fair Rental Value submitted shall automatically be
the monthly Base Rent for the First Extended Term or the Second Extended Term,
as applicable.
Notwithstanding any provision to the contrary herein, in no event shall the
monthly Base Rent for the First Extended Term as determined pursuant to this
Addendum 3, be less than the highest monthly Base
<PAGE> 56
ADDENDUM 3
OPTIONS TO EXTEND THE LEASE TERM
PAGE 2 TO 2
Rent charged during the initial term of the Lease. Notwithstanding any provision
to the contrary herein, in no event shall the monthly Base Rent for the Second
Extended Term as determined pursuant to this Addendum 3, be less than the
highest monthly Base Rent charged during the First Extended Term of the Lease.
Upon determination of the monthly Base Rent for the First Extended Term and the
Second Extended Term, as applicable, pursuant to the terms outlined above,
Landlord and Tenant shall immediately execute an amendment to the Lease stating
the monthly Base Rent for the First Extended Term or the Second Extended Term,
as applicable, and confirming the expiration date of the First Extended Term or
the Second Extended Term, as the case may be. Tenant shall have no other right
to further extend the term of the Lease under this Addendum 3 unless Landlord
and Tenant otherwise agree in writing.
If Tenant duly exercises this option, in accordance with the terms contained
herein: (1) Tenant shall accept the Premises in its then "As-Is" condition and,
accordingly, Landlord shall not be required to perform any additional
improvements to the Premises; and (2) Tenant hereby agrees that it will solely
be responsible for any and all brokerage commissions and finder's fees payable
to any broker now or hereafter procured or otherwise hired by Tenant ("Tenant's
Broker") in connection with the option described herein, and Tenant hereby
further agrees that Landlord shall in no event or circumstance be responsible
for the payment of any such commissions and fees to Tenant's Broker.
This option is personal to Tenant and may not be assigned, voluntarily or
involuntarily, separate from or as part of the Lease except to any Related
Entity of Tenant. At Landlord's option, all rights of Tenant under this option
shall terminate and be of no force and effect if any of the following individual
events occur or any combination thereof occur: (i) Tenant or the Related Entity,
as the case may be, is in default in the performance of any of its obligations
under this Lease at the time of Tenant's or the Related Entity's, as the case
may be, exercise of the then applicable option to extend the then applicable
term of this Lease; and/or (ii) Tenant has assigned its rights and obligations
under all or part of the Lease to any party other than a Related Entity, or
Tenant has subleased all or part of the Premises to a party other than a Related
Entity; and/or (iii) Tenant's or the Related Entity's, as the case may be,
financial condition is unacceptable to Landlord at the time of Tenant's or the
Related Entity's, as the case may be, delivery to Landlord of the then
applicable Option Notice (provided, Landlord will not withhold its approval of
Tenant's or the Related Entity's, as applicable, then current financial
condition if the net worth of Tenant or the Related Entity, as the case may be,
at the time of such exercise is substantially the same or better than Tenant's
financial condition as of the Commencement Date); and/or (iv) Tenant or the
Related Entity, as the case may be, has failed to exercise this option in a
timely manner in strict accordance with the provisions of this Addendum 3;
and/or (v) Tenant or the Related Entity, as the case may be, no longer has
possession of all or any part of the Premises under the Lease, or if the Lease
has been terminated earlier, pursuant to the terms of the Lease.
INITIALS:
TENANT: /s/ [UNABLE TO READ]
---------------------
LANDLORD:
---------------------
<PAGE> 57
EXHIBIT H
WAIVER BY LANDLORD - EXAMPLE
This Exhibit H is incorporated as part of that certain Lease Agreement dated
February 1, 1996 (the "Lease"), by and between Sequus Pharmaceuticals, Inc., a
California corporation ("Tenant"), and LINCOLN MENLO VI, A CALIFORNIA LIMITED
PARTNERSHIP ("Landlord"), for the leasing of those certain premises located at
1360 Willow Road, Suites 101, 201, 203 and 204 Menlo Park, California as more
particularly described in Exhibit A to the Lease (the "Premises"). Any
capitalized terms used herein and not otherwise defined herein shall have the
meaning ascribed to such terms as set forth in the Lease.
WAIVER BY LANDLORD
This Waiver By Landlord (the "Agreement") is made and entered into as
of this ____ day of _____________, 199_, by and among _______________________
____________________________ (hereinafter called "Secured Party"), LINCOLN MENLO
VI, A CALIFORNIA LIMITED PARTNERSHIP ("Landlord"), and Sequus Pharmaceuticals,
Inc., a California corporation ("Tenant"), with reference to that certain
security agreement, dated __________, 199_, by and between Tenant, as debtor,
and Secured Party (the "Security Agreement"), wherein Secured Party has agreed
to make a loan to Tenant in the amount of $____________________ for the
following described purposes: _________________________________,
____________________________________________________, and____________________.
1. The undersigned Landlord hereby consents to the security interest
granted to Secured Party in the property and equipment described in the attached
Exhibit A (collectively, the "Goods") now, or at any time hereinafter, affixed
to or installed or kept at those certain premises located at 1360 Willow Road,
Suites 101, 201, 203 and 204 Menlo Park, California (the "Premises").
2. Landlord agrees that the Goods will remain personal property at all
times even though they may be affixed to or installed upon the Premises.
3. Landlord hereby waives any right, title, claim or interest in the
Goods by reason of the Goods being attached to or installed or resting upon the
Premises and, subject to the rights of Tenant under that certain Lease Agreement
dated February 1, 1996 between Landlord and Tenant for the lease of the Premises
(the "Lease"), hereby grants Secured Party permission to remove the Goods from
the Premises at any reasonable time during the term of the Lease after Secured
Party's delivery of at least ten (10) business days' prior written notice to
Landlord.
4. Secured Party, at its sole cost and expense, agrees to promptly and
fully repair any damage to the Premises, to Landlord's reasonable satisfaction,
arising in any manner from Secured Party's removal of the Goods from the
Premises. If Landlord is required to so remove such Goods from the Premises for
any reason whatsoever, then (i) Secured Party also agrees to promptly reimburse
Landlord (within ten (10) days after Landlord's delivery of a written demand
therefor) for the cost of repair of any physical damage to the Premises in any
way related to the removal of the Goods from the Premises, and (ii) Secured
Party hereby waives any claim or right to make a claim against Landlord for any
damage to the Goods or any impairment of Secured Party's security interest
therein.
5. Notwithstanding any provisions herein to the contrary, if Secured
Party fails to remove the Goods from the Premises following the termination of
the Lease and Landlord's giving of notice to Secured Party as provided in
California Civil Code Section1983, as same may be amended from time to time (or
any successor statute thereof) then, after the time provided in such civil code
section, Landlord may deem the Goods to be abandoned property and proceed in the
manner as set forth in California Civil Code Section1988, as same may be amended
from time to time (or any successor statute thereof).
6. Secured Party agrees to give Landlord written notice of any default
of Tenant under the Security Agreement within ten (10) days of such default
unless such default is permissibly and wholly cured within such time period.
7. Secured Party and Tenant hereby covenant and represent that each
such party shall not record nor permit to be recorded in the public records this
Agreement, any UCC-1 financing statement, the Security Agreement or any other
document or instrument which would or could have the effect of placing a lien
against any portion of the Premises. If any document or instrument is recorded
in contravention of the foregoing provision, then (i) this Agreement, at
Landlord's sole option, shall terminate and be of no further force or effect,
and (ii) Secured Party and/or Tenant shall promptly take all actions as may be
required by Landlord to cause such document or instrument to be released and/or
terminated.
1
<PAGE> 58
8. Tenant hereby (i) consents to the provisions of this Agreement, (ii)
waives any and all rights or claims it may have under or by virtue of the Lease,
or at law or in equity, with respect to any breach of Tenant's quiet enjoyment
in and to the Premises or any interference with Tenant's operations in or about
the Premises in any way related to or arising from Secured Party's or Landlord's
exercise of their rights granted herein [or under the Lease], (iii) agrees that
it shall not have any right to any rental abatement, deduction or offset against
rental payments payable by Tenant under the Lease by virtue of Secured Party's
or Landlord's exercise of their rights granted herein, and (iv) agrees that upon
the expiration of the term of the Lease or the earlier termination thereof to
(a) promptly remove or cause the removal of the Goods from the Premises, and (b)
promptly and fully repair any damage to the Premises arising from the
installation or removal of the Goods in and from the Premises and to fully
restore the Premises to a good, clean and safe condition and to Landlord's
reasonable satisfaction.
9. Any notice or demand required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been given when
delivered by U.S. mail, registered or certified, return receipt requested,
postage prepaid, or by overnight delivery service showing receipt of delivery,
or by personal delivery, or by facsimile transmission. If to Landlord, notices
shall be sent to: Lincoln Property Company Management Services, Inc., 101
Lincoln Centre Drive, Fourth Floor, Foster City, California 94404 (Phone number:
415-571-2200; facsimile number 415-571-2211); Attention: Property Manager, and
if to Secured Party: _____________________, _______________, ______________,
_______________________; Attention: ______________ (Phone number: _____________;
facsimile number __________________), and if to Tenant, at the address, phone
number and facsimile number at the Premises. Notices as aforesaid shall be
effective upon the earlier of actual receipt, or twenty-four (24) hours after
deposit with the messenger or delivery service, or the next business day after
delivery to an overnight delivery service, or within three (3) days after the
deposit in the U.S. mail, or upon confirmation of transmission by facsimile. If
any party changes its address, such change of address shall not be effective as
to the other parties unless and until such party notifies the other parties of
its new address by one of the above described means of delivery.
10. This Agreement shall be binding upon, and inure to the benefit of,
the parties hereto and their respective successors, heirs, administrators and
permitted assigns.
11. Except as otherwise provided herein, this Agreement may be amended
or modified only by a written instrument executed by all of the parties hereto.
12. This Agreement constitutes the entire understanding of the parties
with regard to the subject matter hereof and all prior agreements,
representations, and understandings between the parties other than the Lease,
whether oral or written, are deemed null and void, all of the foregoing having
been merged into this Agreement. The parties acknowledge that each party and/or
its counsel have reviewed and revised this Agreement and that no rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall be employed in the interpretation of this Agreement or any
amendments or exhibits to this Agreement or any document executed and delivered
by either party in connection with this Agreement.
13. If for any reason, any provision of this Agreement shall be held to
be unenforceable, it shall not affect the validity or enforceability of any
other provision of this Agreement and to the extent any provision of this
Agreement is not determined to be unenforceable, such provision, or portion
thereof, shall be, and remain, in full force and effect.
14. This Agreement may be executed in counterparts. All executed
counterparts shall constitute one agreement, and each counterpart shall be
deemed an original.
15. In the event any dispute between the parties with respect to this
Agreement result in litigation or other proceeding, the prevailing party shall
be reimbursed by the party not prevailing in such proceeding for all reasonable
costs and expenses, including, without limitation, reasonable attorneys' and
experts' fees and costs incurred by the prevailing party in connection with such
litigation or other proceeding and any appeal thereof. Such costs, expenses and
fees shall be included in and made a part of the judgment recovered by the
prevailing party, if any.
16. This Agreement shall be governed by and construed in accordance
with the laws of the State of California.
17. Time is of the essence of this Agreement. Unless the context
otherwise requires, all periods terminating on a given day, period of days, or
date shall terminate at 5:00 p.m. (Pacific Time) on such date or dates and
references to "days" shall refer to calendar days except if such references are
to "business days" which shall refer to days which are not a Saturday, Sunday or
legal holiday. Notwithstanding the foregoing, if any period terminates on a
Saturday, Sunday or legal holiday, under the laws of the State of California,
the termination of such period shall be on the next succeeding business
Language indicated as being shown by strike-out in the typeset document
is enclosed in brackets "[" and "]" in the electronic format.
2
<PAGE> 59
day. The time in which any act provided under this Agreement is to be done,
shall be computed by excluding the first day and including the last day, unless
the last day is a Saturday, Sunday or legal holiday under the laws of the State
of California, and then it is also so excluded. Notwithstanding anything to the
contrary contained herein, the time in which any act provided under this
Agreement is to be done shall be extended commensurately by the period of time
that the party charged with performing such act is prevented from doing so due
to any event or occurrence considered to be of a force majeure nature, including
without limitation, inclement weather, earthquakes, riots, strikes, boycotts,
moratoriums, and any government closures.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first written above.
SECURED PARTY:
___________________________________________,
a _________________________________________
By:________________________________________
Name:
Title:
TENANT:
Sequus Pharmaceuticals, Inc.,
a California corporation
By: _______________________________________
Its:_______________________________________
By: _______________________________________
Its:_______________________________________
LANDLORD:
LINCOLN MENLO VI,
A CALIFORNIA LIMITED PARTNERSHIP
By: Lincoln Property Company Management Services, Inc.,
As Manager and Agent for Landlord
By:__________________________________________
Vice President
Attachment: Exhibit A - Goods
INITIALS:
TENANT: /s/ [UNABLE TO READ]
---------------------
LANDLORD:
---------------------
3
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> DEC-31-1995
<CASH> 5863
<SECURITIES> 39144
<RECEIVABLES> 2473
<ALLOWANCES> 0
<INVENTORY> 1982
<CURRENT-ASSETS> 49991
<PP&E> 3693
<DEPRECIATION> 0
<TOTAL-ASSETS> 53933
<CURRENT-LIABILITIES> 6298
<BONDS> 0
0
0
<COMMON> 29
<OTHER-SE> 186668
<TOTAL-LIABILITY-AND-EQUITY> 53933
<SALES> 4457
<TOTAL-REVENUES> 4494
<CGS> 531
<TOTAL-COSTS> 531
<OTHER-EXPENSES> 10387
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (5777)
<INCOME-TAX> 0
<INCOME-CONTINUING> (5777)
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5777)
<EPS-PRIMARY> (0.21)
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</TABLE>
