Exhibit 10.12
LEASE
by and between
BMR-LANDMARK AT EASTVIEW LLC,
a Delaware limited liability company
and
EPICEPT CORPORATION,
a Delaware corporation

 

 

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LEASE
THIS LEASE (this “Lease”) is entered into as of August 28, 2006 (the “Effective
Date”), by and between BMR-LANDMARK AT EASTVIEW LLC, a Delaware limited
liability company (“Landlord”), and EPICEPT CORPORATION, a Delaware corporation
(“Tenant”).
RECITALS
A. Landlord owns certain real property (the “Property”) and the building
improvements thereon located at 777 Old Saw Mill River Road in Tarrytown, New
York, including the building located thereon (the “Building”) in which the
Premises (as defined below) are located; and
B. Landlord wishes to lease to Tenant, and Tenant desires to lease from
Landlord, certain premises (the “Premises”) located in the Building, pursuant to
the terms and conditions of this Lease, as detailed below.
AGREEMENT
NOW, THEREFORE, Landlord and Tenant, in consideration of the mutual promises
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
agree as follows:
1. Lease of Premises. Landlord hereby leases to Tenant, and Tenant hereby leases
from Landlord, the Premises, on the 02 Floor of the Building, as shown on
Exhibit A attached hereto. The Property and all landscaping, parking facilities
and other improvements and appurtenances related thereto, including, without
limitation, the Building, are hereinafter collectively referred to as the
“Project.” All portions of the Project that are for the non-exclusive use of
tenants of the Building, including, without limitation, driveways, sidewalks,
parking areas, landscaped areas, service corridors, stairways, elevators, public
restrooms and public lobbies, are hereinafter referred to as “Common Area.”
2. Basic Lease Provisions. For convenience of the parties, certain basic
provisions of this Lease are set forth herein. The provisions set forth herein
are subject to the remaining terms and conditions of this Lease and are to be
interpreted in light of such remaining terms and conditions.
2.1 This Lease shall take effect upon the Effective Date and, except as
specifically otherwise provided within this Lease, each of the provisions hereof
shall be binding upon and inure to the benefit of Landlord and Tenant from the
Effective Date.
2.2 In the definitions below, each Rentable Area is expressed in rentable square
footage. Rentable Area and Tenant’s Pro Rata Shares are all subject to
adjustment under this Lease, including under Section 9.2.

      Definition or Provision   Means the Following (As of the Term Commencement
Date)
Rentable Area of Premises
  9,805
Tenant’s Pro Rata Share of Project (Premises)
  1.3%

2.3 Initial Annual (and Monthly Rental Installments) of Basic Annual Rent for
the Premises (“Basic Annual Rent”) (starting as of the Rent Commencement Date,
subject to adjustment under this Lease):

              Rentable s.f.   Per Rentable s.f.   Total Annual   Total Monthly
9,805
  $28.65 annually   $280,913.25   $23,409.44

2.4 Electric Payment Amount: $2.50 per rsf annually, subject to increase as
detailed below
2.5 Base Year: 2006.

 

 

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2.6 The Term Commencement Date shall be the date that is the later of
(a) August 30, 2006, and (b) the date that the Tenant Improvements (as defined
below) are Substantially Complete (as defined below), but in no event later than
September 29, 2006. The actual Term Commencement Date shall be determined
pursuant to Section 4.2. The “Estimated Term Commencement Date” is September 29,
2006.
2.7 Rent Commencement Date: December 1, 2006.
2.8 Term Expiration Date: Five (5) years from the Rent Commencement Date.
2.9 Security Deposit: An amount equal to three (3) months of Basic Annual Rent,
subject to adjustment under the previous sentence and the terms of this Lease.
2.10 Permitted Use: General office use in conformity with Applicable Laws (as
defined below)

         
 
  2.11 Address for Rent Payment:   BMR-Landmark at Eastview LLC
Unit A
P.O. Box 51918
Los Angeles, CA 90051-6218
 
       
 
  2.12 Address for Notices to Landlord:   BMR-Landmark at Eastview LLC
17140 Bernardo Center Drive, Suite 222
San Diego, California 92128
Facsimile: (858) 485-9843
Attention: General Counsel/Real Estate
 
       
 
  2.13 Address for Notices to Tenant:    

  (a)  
Prior to the Term Commencement Date:

Jack Talley, Chief Executive Officer
270 Sylvan Avenue
Englewood Cliffs, New Jersey

  (b)  
After to the Term Commencement Date:

Jack Talley, Chief Executive Officer
At the premises
2.14 The following Rider and Exhibits are attached hereto and incorporated
herein by reference:

      Rider   Landmark Rider
Exhibit A
  Premises
Exhibit B
  Acknowledgement of Term Commencement Date and Term Expiration Date
Exhibit C
  Tenant’s Personal Property
Exhibit D
  Rules and Regulations
Exhibit E
  Form of Estoppel Certificate
Exhibit F
  Option Premises
Exhibit G
  Work Letter
Exhibit H
  HVAC Calculation Model
Exhibit I
  Letter of Credit

3. Term.
3.1 This Lease shall take effect upon the Effective Date and, except as
specifically otherwise provided within this Lease, each of the provisions hereof
shall be binding upon and inure to the benefit of Landlord and Tenant from the
date of execution and delivery hereof by all parties hereto.

 

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3.2 The actual term of this Lease (the “Term”) shall commence on the Term
Commencement Date (as defined in Section 4.2 below) and continue through the
Term Expiration Date, subject to earlier termination of this Lease as provided
herein.
4. Possession and Term Commencement Date.
4.1 Landlord shall tender possession of the Premises to Tenant on the Term
Commencement Date, with the work required of Landlord described in the Work
Letter attached hereto as Exhibit G (the “Work Letter”) Substantially Complete
(as defined below). Tenant agrees that in the event such work is not
Substantially Complete on or before the Estimated Term Commencement Date for any
reason, then (a) this Lease shall not be void or voidable, (b) Landlord shall
not be liable to Tenant for any loss or damage resulting therefrom, (c) the Term
Expiration Date shall be extended accordingly and (d) Tenant shall not be
responsible for the payment of any Rent (as defined below) until the Rent
Commencement Date. The work required of Landlord described in the Work Letter
shall be deemed Substantially Complete, as that term is used in this Section 4
and elsewhere in this Lease, if Landlord has (y) completed all of Landlord’s
work identified on Tenant’s plans and specifications (subject only to a punch
list of items that do not materially and substantially interfere with Tenant’s
use of the Premises) and (z) received a temporary certificate of occupancy from
the applicable municipal authority(ies) or a certificate of substantial
completion from the architect, or would have received either such certificate
but for delays or failure of Tenant or Tenant’s architect to deliver items in
accordance with the Work Letter. The term “Substantially Complete” or
“Substantial Completion” means that the Tenants Improvements are substantially
complete in accordance with the Approved Plans (as defined in the Work Letter),
except for minor punch list items. Landlord shall notify Tenant of the
anticipated Substantial Completion date at least ten (10) days prior thereto:
provided, however, that Tenant’s sole remedy for Landlord’s failure to provide
such notification shall be a day-for-day extension of the Substantial Completion
date for each day less than the stated ten (10) days that Landlord’s
notification is received by Tenant prior to the aniticipated Substantial
Completion date. IN the event the Substantial Completion does not occur by
September 30, 2006, then, for each day after September 30, 2006, that
Substantial Completion does not occur, (a) the Rent Commencement Date shall be
extended by one (1) day and (b) Landlord shall pay to Tenant, within thirty
(30) days after Landlord’s receipt of evidence reasonably satisfactory to
Landlord of Tenant’s payment of such amount to its current landlord, up to Ten
Thousand Four Hundred Seventy-Eight and 11/100 Dollars ($10,478.11) to reimburse
Tenant for any base rent holdover penalty actually paid by Tenant to its current
landlord: provided, however, that this sentence shall not apply with regard to
any delay caused by any act or omission or Tenant or its agent, employees,
contractors, or invitees: and provided that Tenant shall use commercially
reasonable efforts to cause their current landlord to waive its right to collect
any such base rent holdover penalty.
4.2 The “Term Commencement Date” shall be the day Landlord tenders possession of
the Premises to Tenant with all work required of Landlord pursuant to the Work
Letter, if any, Substantially Complete. If possession is delayed by any act or
omission of Tenant or its agents, employees, contractors or invitees, then the
Term Commencement Date shall be the date of substantial completion of Landlord’s
work. Landlord shall promptly notify Tenant of any such Tenant-caused delay;
provided that Landlord’s failure to timely notify Tenant shall not extend the
Term Commencement Date. Tenant shall execute and deliver to Landlord written
acknowledgment of the actual Term Commencement Date and the Term Expiration Date
when such is established, and shall attach it to this Lease as Exhibit B.
Failure to execute and deliver such acknowledgment, however, shall not affect
the Term Commencement Date or Landlord’s or Tenant’s liability hereunder.
4.3 In the event that Landlord permits (in Landlord’s sole and absolute
discretion) Tenant to enter upon the Premises prior to the Term Commencement
Date for the purpose of installing improvements or the placement of personal
property, Tenant shall furnish to Landlord evidence satisfactory to Landlord
that insurance coverages required of Tenant under the provisions of Article 24
are in effect, and such entry shall be subject to all the terms and conditions
of this Lease other than the payment of Basic Annual Rent or Additional Rent (as
defined below).

 

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4.4 Landlord shall cause to be constructed the tenant improvements in the
Premises (the “Tenant Improvements”) pursuant to the Work Letter at a cost to
Landlord (the “Tenant Improvement Allowance”) not to exceed Five Hundred
Nineteen Thousand Six Hundred Sixty- Five Dollars ($519,665) (based upon
Fifty-Three Dollars ($53) per rentable square foot), which amount shall include
the costs of (a) construction, (b) project management by Landlord (which fee
shall not exceed four percent (4%) of the Tenant Improvement Allowance),
(c) space planning, architect, engineering and other related services and
(d) building permits and other planning and inspection fees. If the total cost
of the Tenant Improvements exceeds the Tenant Improvement Allowance, then the
overage shall be paid by Landlord, except for any amounts resulting from the
acts or omissions of Tenant or its agents, employees, contractors or invitees or
as otherwise provided in the Work Letter attached hereto (“Tenant’s Portion”).
In the event that any portion of the Tenant Improvement Allowance is not used
for the Tenant Improvements, the initial Basic Annual Rent shall be reduced on a
square footage basis to reflect such unused amount; provided, however, that in
no event shall the initial Basic Annual Rent be less than Twenty-Five Dollars
($25) per rentable square foot.
5. General Provisions on Tenant Improvements.
5.1 Landlord and Tenant shall mutually agree upon the selection of the
architect, engineer, general contractor and major subcontractors for Tenant
Improvements. Landlord and Tenant shall each participate in the review of the
competitive bid process.
5.2 Possession of areas of the Premises necessary for utilities, services,
safety and operation of the Building is reserved to Landlord.
6. [Intentionally omitted]
7. Rent for the Premises.
7.1 Starting on the Rent Commencement Date for the Premises, Tenant shall pay to
Landlord the Basic Annual Rent during the Term. Basic Annual Rent is subject to
annual adjustment as provided in Article 8.
7.2 Basic Annual Rent shall be paid in equal monthly installments as set forth
in Section 2.3, subject to the rental adjustments provided in Article 8 hereof,
each in advance on the first day of each and every calendar month during the
Term.
7.3 In addition to Basic Annual Rent, Tenant shall pay to Landlord as additional
rent (“Additional Rent”) at times hereinafter specified in this Lease:
(a) Tenant’s pro rata share, as set forth in Section 2.2 (“Tenant’s Pro Rata
Share”), of Operating Expenses as provided in Article 9 that exceed the
Operating Expenses during the Base Year (Tenant’s Pro Rata Share of such excess,
“Tenant’s Operating Expense Obligation”), and (b) any other amounts that Tenant
assumes or agrees to pay under the provisions of this Lease that are owed to
Landlord, including, without limitation, any and all other sums that may become
due by reason of any default of Tenant or failure on Tenant’s part to comply
with the agreements, terms, covenants and conditions of this Lease to be
performed by Tenant, after notice and the lapse of any applicable cure periods.
7.4 Basic Annual Rent and Additional Rent shall together be denominated “Rent.”
Rent shall be paid to Landlord, without abatement, deduction or offset, in
lawful money of the United States of America at the office of Landlord as set
forth in Section 2.11 or to such other person or at such other place as Landlord
may from time designate in writing. In the event the Term commences or ends on a
day other than the first day of a calendar month, then the Rent for such
fraction of a month shall be prorated for such period on the basis of a thirty
(30) day month and shall be paid at the then-current rate for such fractional
month.
8. Rent Adjustments. The Basic Annual Rent shall be subject to an annual upward
adjustment of two percent (2%) of the then-current Basic Annual Rent (as
previously adjusted under this Article 8). The first such adjustment shall
become effective commencing with that monthly rental installment that is due on
or after the first (1st) annual anniversary of the Rent Commencement Date.
Subsequent adjustments shall become effective, for all Basic Annual Rent under
the Lease, on every successive annual anniversary of the Rent Commencement Date
for so long as this Lease continues in effect.

 

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9. Operating Expenses.
9.1 As used herein, the term “Operating Expenses” shall include the following:
(a) Government impositions (collectively, “Real Estate Taxes”) including,
without limitation, property tax costs consisting of real property taxes and
assessments and taxes and assessments on Landlord’s personal property and
improvements located on the Property, including amounts due under any
improvement bond upon the Building or the Project, including the parcel or
parcels of real property upon which the Building and areas serving such Building
are located or assessments in lieu thereof imposed by any federal, state,
regional, local or municipal governmental authority, agency or subdivision(each,
a “Governmental Authority”) are levied; taxes on or measured by gross rentals
received from the rental of space in the Building; taxes based on the square
footage of the Premises, the Building or the Project, as well as any parking
charges, utilities surcharges or any other costs levied, assessed or imposed by,
or at the direction of, or resulting from Applicable Laws (as defined below) or
interpretations thereof, promulgated by any Governmental Authority in connection
with the use or occupancy of the Building or the parking facilities serving the
Building; taxes on this transaction or any document to which Tenant is a party
creating or transferring an interest in the Premises; any fee for a business
license to operate an office building; and any expenses, including the
reasonable cost of attorneys or experts, reasonably incurred by Landlord in
seeking reduction by the taxing authority of the applicable taxes, less tax
refunds obtained as a result of an application for review thereof. Operating
Expenses shall not include any net income, franchise, capital stock, estate,
transfer or inheritance taxes, or taxes that are the personal obligation of
Tenant or of another tenant of the Project; and
(b) All other costs of any kind paid or incurred by Landlord in connection with
the operation or maintenance of the Building and the Project including, by way
of example and not of limitation, costs of repairs and replacements to
improvements within the Project as appropriate to maintain the Project as
required hereunder, including costs of funding such reasonable reserves as
Landlord, consistent with good business practice, may establish to provide for
future repairs and replacements; costs of utilities furnished to the Common
Areas; sewer fees; trash collection; cleaning, including windows; a management
fee equal to four percent (4%) of the aggregate rents, additional rents and
other charges payable to Landlord by tenants at the Property; heating;
ventilation; air-conditioning; maintenance of landscaping and grounds;
maintenance of drives and parking areas; maintenance of the roof; security
services and devices; building supplies; maintenance or replacement of equipment
utilized for operation and maintenance of the Project; license, permit and
inspection fees; sales, use and excise taxes on goods and services purchased by
Landlord in connection with the operation, maintenance or repair of the Project
or Building systems and equipment; telephone, postage, stationery supplies and
other expenses incurred in connection with the operation, maintenance or repair
of the Project; accounting, legal and other professional fees and expenses
incurred in connection with the Project; costs of furniture, draperies,
carpeting, landscaping and other customary and ordinary items of personal
property provided by Landlord for use in Common Areas or in the Project office;
office rent or rental value for not more than a commercially reasonable amount
of space, to the extent an office used for Project operations is maintained at
the Project; capital expenditures (provided that the cost of any such capital
expenditure shall be amortized over its useful life in accordance with GAAP);
costs of complying with any federal, state, municipal or local laws and
regulations, including both statutory and common law and hazard waste rules and
regulations (“Applicable Laws”); insurance premiums, including premiums for
public liability, property casualty, earthquake, terrorism and environmental
coverages; portions of insured losses paid by Landlord as part of the deductible
portion of a loss pursuant to the terms of insurance policies; service
contracts; costs of services of independent contractors retained to do work of a
nature referenced above; and costs of compensation (including employment taxes
and fringe benefits) of all persons who perform regular and recurring duties
connected with the day-to-day operation and maintenance of the Project, its
equipment, the adjacent walks, landscaped areas, drives and parking areas,
including, without limitation, janitors, floor waxers, window washers, watchmen,
gardeners, sweepers and handymen.
Notwithstanding the foregoing, Operating Expenses shall not include: any leasing
commissions; expenses that relate to preparation of rental space for a tenant;
expenses of “ground-up” development and construction, including, but not limited
to, grading, paving, landscaping and decorating (as distinguished from
maintenance, repair and replacement of the foregoing), for new buildings to be
occupied by tenants; legal expenses relating to other tenants; costs of repairs
to the extent reimbursed by payment of insurance proceeds received by Landlord;
interest upon loans to Landlord or secured by a mortgage or deed of trust
covering the Project or a portion thereof (provided that interest upon a
government assessment or improvement bond payable in installments shall
constitute an Operating Expense under Subsection 9.1(a)); salaries of executive
officers of Landlord; depreciation claimed by Landlord for tax purposes
(provided that this exclusion of depreciation is not intended to delete from
Operating Expenses actual costs of repairs and replacements and reasonable
reserves in regard thereto that are provided for in Subsection 9.1(a)); and
taxes of the types set forth in Subsection 9.1(a).

 

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“Applicable Laws” means all laws, codes, ordinances, rules and regulations of
governmental authorities, committees, associations, or other regulatory
committees, agencies or governing bodies having jurisdiction over the Property,
the Building, the Premises, Landlord or Tenant.
9.2 Tenant shall pay to Landlord on the first day of each calendar month of the
Term, as Additional Rent, Landlord’s estimate of Tenant’s Operating Expense
Obligation with respect to the Building and the Project, as applicable, for such
month.
(y) Within ninety (90) days after the conclusion of each calendar year (or such
longer period as may be reasonably required by Landlord), Landlord shall furnish
to Tenant a statement showing in reasonable detail the actual Operating Expenses
and Tenant’s Operating Expense Obligation for the previous calendar year. Any
additional sum due from Tenant to Landlord shall be immediately due and payable.
If the amounts paid by Tenant pursuant to this Section 9.2 exceed Tenant’s
Operating Expense Obligation for the previous calendar year, then Landlord shall
credit the difference against the Rent next due and owing from Tenant; provided
that, if the Lease term has expired, Landlord shall accompany said statement
with payment for the amount of such difference.
(z) Any amount due under this Section 9.2 for any period that is less than a
full month shall be prorated (based on a thirty (30)-day month) for such
fractional month.
9.3 Landlord’s annual operating statement shall be prepared in accordance with
generally accepted accounting principles and shall be final and binding upon
Tenant unless Tenant, within one hundred twenty (120) days after Tenant’s
receipt thereof, shall contest any item therein by giving written notice to
Landlord, specifying each item contested and the reasons therefor. If, during
such one hundred twenty (120)-day period, Tenant reasonably and in good faith
questions or contests the correctness of Landlord’s statement of Tenant’s
Operating Expense Obligation, Landlord shall provide Tenant with reasonable
access to Landlord’s books and records to the extent relevant to determination
of Operating Expenses, and such information as Landlord reasonably determines to
be responsive to Tenant’s written inquiries. In the event that, after Tenant’s
review of such information, Landlord and Tenant cannot agree upon the amount of
Tenant’s Operating Expense Obligation, then Tenant shall have the right to have
an independent public accounting firm hired by Tenant on an hourly basis and not
on a contingent-fee basis (at Tenant’s sole cost and expense) and approved by
Landlord (which approval Landlord shall not unreasonably withhold or delay)
audit and review such of Landlord’s books and records for the year in question
as directly relate to the determination of Operating Expenses for such year (the
“Independent Review”). Landlord shall make such books and records available at
the location where Landlord maintains them in the ordinary course of its
business, provided that such location is within the continental United States.
Landlord need not provide copies of any books or records. Tenant shall commence
the Independent Review within fifteen (15) days after the date Landlord has
given Tenant access to Landlord’s books and records for the Independent Review.
Tenant shall complete the Independent Review and notify Landlord in writing of
Tenant’s specific objections to Landlord’s calculation of Operating Expenses
(including Tenant’s accounting firm’s written statement of the basis, nature and
amount of each proposed adjustment) no later than six (6) months after Landlord
has first given Tenant access to Landlord’s books and records for the
Independent Review. Landlord shall review the results of any such Independent
Review. The parties shall endeavor to agree promptly and reasonably upon
Operating Expenses taking into account the results of such Independent Review.
If, as of ninety (90) days after Tenant has submitted the Independent Review to
Landlord, the parties have not agreed on the appropriate adjustments to
Operating Expenses, then the parties shall engage a mutually agreeable
independent third party accountant with at least ten (10) years’ experience in
commercial real estate accounting in the New York metropolitan area (the
“Accountant”). If the parties cannot agree on the Accountant, each shall within
ten (10) days after such impasse appoint an Accountant (different from the
accountant and accounting firm that conducted the Independent Review) and,
within ten (10) days after the appointment of both such Accountants, those two
Accountants shall select a third (which cannot be the accountant and accounting
firm that conducted the Independent Review). If either party fails to timely
appoint an Accountant, then the Accountant the other party appoints shall be the
sole Accountant. Within ten (10) days after appointment of the Accountant(s),
Landlord and Tenant shall each simultaneously give the Accountants (with a copy
to the other party) its determination of Operating Expenses, with such
supporting data or information as each submitting party determines appropriate.
Within ten (10) days after such submissions, the Accountants shall by majority
vote select either Landlord’s or Tenant’s determination of Operating Expenses.
The Accountants may not select or designate any other determination of Operating
Expenses. The determination of the Accountant(s) shall bind the parties. If the
parties agree or the Accountant(s) determine that Tenant’s Operating Expense
Obligation actually paid for the calendar year in question exceeded Tenant’s
obligations for such calendar year, then Landlord shall, at Tenant’s option,
either (a) credit the excess to the next succeeding installments of estimated
Additional Rent or (b) pay the excess to Tenant within thirty (30) days after
delivery of such results and if Tenant’s Operating Expense Obligation actually
paid for the calendar year in question exceeded Tenant’s Obligation for such
calendar year by greater than twenty percent (20%), then Landlord shall
reimburse Tenant for Tenant’s reasonable third party costs for conducting the
audit. If the parties agree or the Accountant(s) determine that Tenant’s
payments of Tenant’s Operating Expense Obligation for such calendar year were
less than Tenant’s obligation for the calendar year, then Tenant shall pay the
deficiency to the Landlord within thirty (30) days after delivery of such
results.

 

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9.4 Tenant shall not be responsible for Operating Expenses attributable to the
time period prior to the Term Commencement Date; provided, however, that if
Landlord shall permit Tenant possession of the Premises prior to the Term
Commencement Date, Tenant shall be responsible for Operating Expenses from such
earlier date of possession. Tenant’s responsibility for Tenant’s Operating
Expense Obligation shall continue to the latest of (a) the date of termination
of the Lease, (b) the date Tenant has fully vacated the Premises or (c) if
termination of the Lease is due to a default by Tenant, the date of rental
commencement of a replacement tenant.
9.5 Operating Expenses for the calendar year in which Tenant’s obligation to
share therein commences and for the calendar year in which such obligation
ceases shall be prorated on a basis reasonably determined by Landlord. Expenses
such as taxes, assessments and insurance premiums that are incurred for an
extended time period shall be prorated based upon the time periods to which they
apply so that the amounts attributed to the Premises are based on the time
period wherein Tenant has an obligation to share in Operating Expenses.
10. Rentable Area.
10.1 The term “Rentable Area” as set forth in Section 2 and as referenced within
the Work Letter, and as may otherwise be referenced within this Lease, shall
reflect such area as reasonably calculated by Landlord’s architect.
10.2 The “Rentable Area” of the Building is generally determined by making
separate calculations of Rentable Area applicable to each floor within the
Building and totaling the Rentable Area of all floors within the Building. The
Rentable Area of a floor is computed by measuring to the outside finished
surface of the permanent outer Building walls. The full area calculated as
previously set forth is included as Rentable Area, without deduction for columns
and projections or vertical penetrations, including stairs, elevator shafts,
flues, pipe shafts, vertical ducts and the like, as well as such items’
enclosing walls.
10.3 The Rentable Area of the Project is the total Rentable Area of all
buildings within the Project.
10.4 The term “Rentable Area,” when applied to the Premises, is that area equal
to the usable area of the Premises, plus an equitable allocation of Rentable
Area within the Building that is not then utilized or expected to be utilized as
usable area, including, but not limited to, that portion of the Building devoted
to corridors, equipment rooms, restrooms, elevator lobby, atrium and mailroom.
In making such allocations, consideration shall be given to tenants benefited by
space allocated such that the area that primarily serves tenants of only one
floor, such as corridors and restrooms upon such floor, shall be allocated to
usable area of the Building as a whole.
10.5 Review of allocations of Rentable Areas as between tenants of the Building
and the Project shall be made as frequently as Landlord deems appropriate in
order to facilitate an equitable apportionment of Operating Expenses. If such
review is by a licensed architect and allocations are certified by such licensed
architect as being correct, then the Tenant shall be bound by such
certifications.

 

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11. [Intentionally omitted]
12. Security Deposit.
12.1 Tenant has deposited with Landlord the sum set forth in Section 2.9 (the
“Security Deposit”), which sum shall be held by Landlord as security for the
faithful performance by Tenant of all of the terms, covenants and conditions of
this Lease to be kept and performed by Tenant through the Term Expiration Date.
If Tenant defaults with respect to any provision of this Lease, including, but
not limited to, any provision relating to the payment of Rent, then Landlord may
(but shall not be required to) use, apply or retain all or any part of the
Security Deposit for the payment of any Rent or any other sum in default, or to
compensate Landlord for any other loss or damage that Landlord may suffer by
reason of Tenant’s default. If any portion of the Security Deposit is so used or
applied, then Tenant shall, within ten (10) days following demand therefor,
deposit cash with Landlord in an amount sufficient to restore the Security
Deposit to its original amount, and Tenant’s failure to do so shall be a
material breach of this Lease. Nothing in this paragraph limits Tenant’s rights
to deliver L/C Security in compliance with Section 12.7.
12.2 In the event of bankruptcy or other debtor-creditor proceedings against
Tenant, the Security Deposit shall be deemed to be applied first to the payment
of Rent and other charges due Landlord for all periods prior to the filing of
such proceedings.
12.3 Landlord may deliver to any purchaser of Landlord’s interest in the
Premises the funds deposited hereunder by Tenant, and thereupon Landlord shall
be discharged from any further liability with respect to such deposit. This
provision shall also apply to any subsequent transfers.
12.4 If Tenant shall fully and faithfully perform every provision of this Lease
to be performed by it, then the Security Deposit, or any balance thereof, shall
be returned to Tenant (or, at Landlord’s option, to the last assignee of
Tenant’s interest hereunder) within thirty (30) days after the expiration or
earlier termination of this Lease.
12.5 If the Security Deposit shall by in cash, Landlord shall deposit the
Security Deposit into an interest-bearing account at a banking organization
selected by Landlord. All interest and/or dividends, if any, accruing on the
Security Deposit, less a one percent (1%) per annum charge to the Security
Deposit for administrative expenses, shall be added to, held and included within
the term Security Deposit and, provided that no Default shall have occurred and
be continuing, shall accrue to the account of Tenant. In the event that the
Security Deposit accrues less than one (1%) interest during any year (before
taking into account Landlord’s administrative fee), Landlord’s administrative
fee under this paragraph for such year shall be equal to the amount of such
interest. Landlord shall not be required to credit Tenant with any interest for
any period during which Landlord does not receive interest on the Security
Deposit in excess of the administrative fee.
12.6 [Intentionally omitted]
12.7 The Security Deposit may be in the form of cash, a letter of credit or any
other security instrument acceptable to Landlord in its sole discretion. Tenant
may at any time, except during Default, deliver a letter of credit (the “L/C
Security”) as the entire Security Deposit, as follows:
(a) If Tenant elects to deliver L/C Security, then Tenant shall provide
Landlord, and maintain in full force and effect throughout the Term, a letter of
credit in the form of Exhibit K issued by an issuer reasonably satisfactory to
Landlord, in the amount of the Security Deposit, with an initial term of at
least one year. If, at the Term Expiration Date, any Rent remains uncalculated
or unpaid, then: (a) Landlord shall with reasonable diligence complete any
necessary calculations; (b) Tenant shall extend the expiry date of such L/C
Security from time to time as Landlord reasonably requires; and (c) in such
extended period, Landlord shall not unreasonably refuse to consent to an
appropriate reduction of the L/C Security. Tenant shall reimburse Landlord’s
reasonable legal costs related to replacement or extension of L/C Security.

 

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(b) If Tenant delivers to Landlord satisfactory L/C Security in place of the
entire Security Deposit, Landlord shall remit to Tenant any cash Security
Deposit Landlord previously held.
(c) Landlord may draw upon the L/C Security, and hold and apply the proceeds in
the same manner and for the same purposes as the Security Deposit, if: (a) an
uncured Default exists; (b) as of the date 45 days before any L/C Security
expires (even if such scheduled expiry date is after the Term Expiration Date)
Tenant has not delivered to Landlord an amendment or replacement for such L/C
Security, reasonably satisfactory to Landlord, extending the expiry date to the
earlier of (i) three (3) months after the then-current Term Expiration Date or
(ii) the date one year after the then-current expiry date of the L/C Security;
(c) the L/C Security provides for automatic renewals, Landlord asks the issuer
to confirm the current L/C Security expiry date, and the issuer fails to do so
within ten (10) business days; (d) Tenant fails to pay (when and as Landlord
reasonably requires) any bank charges for Landlord’s transfer of the L/C
Security; or (e) the issuer of the L/C Security ceases, or announces that it
will cease, to maintain an office in the city where Landlord may present drafts
under the L/C Security. This paragraph does not limit any other provisions of
this Lease allowing Landlord to draw the L/C Security under specified
circumstances.
(d) Tenant shall not seek to enjoin, prevent, or otherwise interfere with
Landlord’s draw under L/C Security, even if it violates this Lease. Tenant
acknowledges that the only effect of a wrongful draw would be to substitute a
cash Security Deposit for L/C Security, causing Tenant no legally recognizable
damage. Landlord shall hold the proceeds of any draw in the same manner and for
the same purposes as a cash Security Deposit. In the event of a wrongful draw,
the parties shall cooperate to allow Tenant to post replacement L/C Security
simultaneously with the return to Tenant of the wrongfully drawn sums, and
Landlord shall upon request confirm in writing to the issuer of the L/C Security
that Landlord’s draw was erroneous.
(e) If Landlord transfers its interest in the Premises, then Tenant shall at
Tenant’s expense, within five Business Days after receiving a request from
Landlord, deliver (and, if the issuer requires, Landlord shall consent to) an
amendment to the L/C Security naming Landlord’s grantee as substitute
beneficiary. If the required Security changes while L/C Security is in force,
then Tenant shall deliver (and, if the issuer requires, Landlord shall consent
to) a corresponding amendment to the L/C Security.
13. Use and Access.
13.1 Tenant shall use the Premises for the purpose set forth in Section 2.10,
and shall not use the Premises, or permit or suffer the Premises to be used, for
any other purpose without Landlord’s prior written consent, which consent
Landlord may withhold in its sole and absolute discretion.
13.2 Tenant shall not use or occupy the Premises in violation of Applicable
Laws; zoning ordinances; or the certificate of occupancy issued for the
Building, and shall, upon five (5) days’ written notice from Landlord,
discontinue any use of the Premises that is declared or claimed by any
Governmental Authority having jurisdiction to be a violation of any of the
above, or that in Landlord’s reasonable opinion violates any of the above.
Tenant shall comply with any direction of any Governmental Authority having
jurisdiction that shall, by reason of the nature of Tenant’s use or occupancy of
the Premises, impose any duty upon Tenant or Landlord with respect to the
Premises or with respect to the use or occupation thereof.
13.3 Tenant shall not do or permit to be done anything that will invalidate or
increase the cost of any fire, environmental, extended coverage or any other
insurance policy covering the Building and the Project, and shall comply with
all rules, orders, regulations and requirements of the insurers of the Building
and the Project, and Tenant shall promptly, upon demand, reimburse Landlord for
any additional premium charged for such policy by reason of Tenant’s failure to
comply with the provisions of this Section.

 

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13.4 Tenant shall keep all doors opening onto public corridors closed, except
when in use for ingress and egress.
13.5 No additional locks or bolts of any kind shall be placed upon any of the
doors or windows by Tenant, nor shall any changes be made to existing locks or
the mechanisms thereof without Landlord’s prior written consent; provided that
Tenant may replace existing locks on interior doors within the Premises. Tenant
shall, upon termination of this Lease, return to Landlord all keys to offices
and restrooms either furnished to or otherwise procured by Tenant. In the event
any key so furnished to Tenant is lost, Tenant shall pay to Landlord the cost of
replacing the same or of changing the lock or locks opened by such lost key if
Landlord shall deem it necessary to make such change.
13.6 No awnings or other projections shall be attached to any outside wall of
the Building. No curtains, blinds, shades or screens shall be attached to or
hung in, or used in connection with, any window or door of the Premises other
than Landlord’s standard window coverings. Neither the interior nor exterior of
any windows shall be coated or otherwise sunscreened without Landlord’s prior
written consent, nor shall any bottles, parcels or other articles be placed on
the windowsills. No equipment, furniture or other items of personal property
shall be placed on any exterior balcony without Landlord’s prior written
consent.
13.7 No sign, advertisement or notice (“Signage”) shall be exhibited, painted or
affixed by Tenant on any part of the Premises or the Building without Landlord’s
prior written consent. Interior signs on doors and the directory tablet shall be
inscribed, painted or affixed for Tenant by Landlord (at Tenant’s sole cost and
expense, in the case of signs and doors, and at no cost to Tenant, in the case
of the directory tablet), and shall be of a size, color and type and be located
in a place acceptable to Landlord. The directory tablet shall be provided
exclusively for the display of the name and location of tenants only, and Tenant
shall not place anything on the exterior of the corridor walls or corridor doors
other than Landlord’s standard lettering. Tenant shall have Signage rights for
the Premises substantially consistent with the Signage permitted for other
comparable Tenants in the Project, as Landlord reasonably determines. Upon
Tenant’s request and at Landlord’s option, Landlord may install any such Signage
for Tenant, and Tenant shall pay all costs associated with such installation
within five (5) days after demand therefor.
13.8 Tenant shall cause any office equipment or machinery to be installed in the
Premises so as to reasonably prevent sounds or vibrations therefrom from
extending into the Common Areas or other offices in the Building. Further,
Tenant shall only place equipment within the Premises with floor loading
consistent with the structural design of the Building without Landlord’s prior
written approval, and such equipment shall be placed in a location designed to
carry the weight of such equipment.
13.9 Tenant shall not: (a) do or permit anything to be done in or about the
Premises that shall in any way obstruct or interfere with the rights of other
tenants or occupants of the Building or the Project, or injure or annoy them;
(b) use or allow the Premises to be used for immoral, unlawful or objectionable
purposes; (c) cause, maintain or permit any nuisance or waste in, on or about
the Premises, the Building or the Project; or (d) take any other action that
would in Landlord’s reasonable determination in any manner adversely affect
other tenants’ quiet use and enjoyment of their space or adversely impact their
ability to conduct business in a professional and suitable work environment.
13.10 Notwithstanding any other provision herein to the contrary, Tenant shall
be responsible for all liabilities, costs and expenses arising out of or in
connection with the compliance of the Premises with the Americans with
Disabilities Act, 42 U.S.C. § 12101, et seq. (together with regulations
promulgated pursuant thereto, the “ADA”), and Tenant shall indemnify, defend and
hold harmless Landlord from and against any loss, cost, liability or expense
(including reasonable attorneys’ fees and disbursements) arising out of any
failure of the Premises to comply with the ADA; provided that Landlord shall be
responsible for compliance of the initial Tenant Improvements, the Building
(other than the Premises) and the Project (other than the Premises) with the
ADA; provided, further, that Landlord’s costs of such compliance shall be paid
out of the Tenant Improvement Allowance, in the case of the initial Tenant
Improvements, and shall be included as Operating Expenses in all other cases.
The provisions of this Section 13.10 shall survive the expiration or earlier
termination of this Lease.

 

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13.11 Tenant shall have the right to continuous access to the Premises
twenty-four (24) hours per day, seven (7) days per week, 365/366 days per year,
except during reasonable closures for repairs or maintenance, or as the result
of casualty or other circumstances beyond Landlord’s reasonable control.
13.12 Tenant shall have the nonexclusive right to use Building passenger
elevator(s), if any, for access to the Premises, except during reasonable
closures for breakdowns, repairs or maintenance. Landlord shall have no
liability for any of the aforementioned closures. When the elevator is closed or
broken, Tenant may use the stairways Landlord designates. If the Building has a
freight elevator, then Tenant may use it only in compliance with the Building
rules and upon paying Landlord’s freight elevator charges as set from time to
time. Notwithstanding the foregoing, Tenant shall not incur any such charges
during Tenant’s initial move-in or during its vacating of the Premises, provided
Tenant is conducting such move-in and vacating with reasonable diligence. Tenant
shall schedule deliveries of building materials and freight only outside
Business Hours or as Landlord may otherwise permit. “Business Hours” means
Monday through Friday, 8:00 a.m. to 6:00 p.m.
14. Brokers.
14.1 Tenant represents and warrants that it has had no dealings with any real
estate broker or agent in connection with the negotiation of this Lease other
than Studley Inc. (“Broker”), and that it knows of no other real estate broker
or agent that is or might be entitled to a commission in connection with this
Lease. Landlord shall compensate Broker in relation to this Lease pursuant to a
separate agreement between Landlord and Broker.
14.2 Tenant represents and warrants that no broker or agent has made any
representation or warranty relied upon by Tenant in Tenant’s decision to enter
into this Lease, other than as contained in this Lease.
14.3 Tenant acknowledges and agrees that the employment of brokers by Landlord
is for the purpose of solicitation of offers of leases from prospective tenants
and that no authority is granted to any broker to furnish any representation
(written or oral) or warranty from Landlord unless expressly contained within
this Lease. Landlord is executing this Lease in reliance upon Tenant’s
representations, warranties and agreements contained within Sections 14.1, 14.2
and 14.4.
14.4 Landlord and Tenant agree to indemnify, defend and hold the other harmless
from any and all cost or liability for compensation claimed by any other broker
or agent, other than Broker in the case of Tenant, employed or engaged by such
party or claiming to have been employed or engaged by such party.
15. Holding Over.
15.1 If, with Landlord’s prior written consent, Tenant holds possession of all
or any part of the Premises after the Term, Tenant shall become a tenant from
month to month after the expiration or earlier termination of the Term, and in
such case Tenant shall continue to pay (a) the Basic Annual Rent in accordance
with Article 7, as adjusted in accordance with Article 8, and (b) Tenant’s
Operating Expense Obligation. Any such month-to-month tenancy shall be subject
to every other term, covenant and agreement contained herein.
15.2 Notwithstanding the foregoing, if Tenant remains in possession of the
Premises after the expiration or earlier termination of the Term without
Landlord’s prior written consent, Tenant shall become a tenant at sufferance
subject to the terms and conditions of this Lease, except that the monthly rent
shall be equal to one hundred fifty percent (150%) of the Rent in effect during
the last thirty (30) days of the Term.
15.3 Acceptance by Landlord of Rent after the expiration or earlier termination
of the Term shall not result in an extension, renewal or reinstatement of this
Lease.

 

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15.4 The foregoing provisions of this Article 15 are in addition to and do not
affect Landlord’s right of reentry or any other rights of Landlord hereunder or
as otherwise provided by Applicable Laws.
16. Taxes on Tenant’s Property.
16.1 Tenant shall pay prior to delinquency any and all taxes levied against any
personal property or trade fixtures placed by Tenant in or about the Premises.
16.2 If any such taxes on Tenant’s personal property or trade fixtures are
levied against Landlord or Landlord’s property or, if the assessed valuation of
the Building or the Property is increased by inclusion therein of a value
attributable to Tenant’s personal property or trade fixtures, and if Landlord,
after written notice to Tenant, pays the taxes based upon any such increase in
the assessed valued of the Building or the Project, then Tenant shall, upon
demand, repay to Landlord the taxes so paid by Landlord.
16.3 If any improvements in or alterations to the Premises, whether owned by
Landlord or Tenant and whether or not affixed to the real property so as to
become a part thereof, are assessed for real property tax purposes at a
valuation higher than the valuation at which improvements conforming to
Landlord’s building standards (the “Building Standard”) in other spaces in the
Building are assessed, then the real property taxes and assessments levied
against Landlord or the Building by reason of such excess assessed valuation
shall be deemed to be taxes levied against personal property of Tenant and shall
be governed by the provisions of Section 16.2 above. Any such excess assessed
valuation due to improvements in or alterations to space in the Building leased
by other tenants of Landlord shall not be included in the Operating Expenses
defined in Article 9, but shall be treated, as to such other tenants, as
provided in this Section 16.3. If the records of the County Assessor are
available and sufficiently detailed to serve as a basis for determining whether
said Tenant improvements or alterations are assessed at a higher valuation than
the Building Standard, then such records shall be binding on both Landlord and
Tenant.
17. Condition of Premises. Tenant acknowledges that neither Landlord nor any
agent of Landlord has made any representation or warranty with respect to the
condition of the Premises, the Building or the Project, or with respect to the
suitability of the Premises, the Building or the Project for the conduct of
Tenant’s business. Tenant’s taking of possession of the Premises shall, except
as otherwise agreed to in writing by Landlord and Tenant, conclusively establish
that the Premises, the Building and the Project were at such time in good,
sanitary and satisfactory condition and repair.
18. Common Areas and Parking Facilities.
18.1 Tenant shall have the non-exclusive right, in common with others, to use
the Common Areas, subject to the rules and regulations adopted by Landlord and
attached hereto as Exhibit D, together with such other reasonable and
nondiscriminatory rules and regulations as are hereafter promulgated by Landlord
in its sole and absolute discretion (the “Rules and Regulations”). Tenant shall
faithfully observe and comply with the Rules and Regulations. Landlord shall not
be responsible to Tenant for the violation or non-performance by any other
tenant or any agent, employee or invitee thereof of any of the Rules and
Regulations.
18.2 Tenant shall have a non-exclusive, revocable license to use its pro-rata
share of the parking facilities serving the Building in common on an unreserved
basis with other tenants of the Building and the Project.
18.3 Tenant agrees not to unreasonably overburden the parking facilities and
agrees to cooperate with Landlord and other tenants in the use of the parking
facilities. Landlord reserves the right to determine that parking facilities are
becoming overcrowded and to limit Tenant’s use thereof. Upon such determination,
Landlord may reasonably allocate parking spaces among Tenant and other tenants
of the Building or the Project. Nothing in this Section, however, is intended to
create an affirmative duty on Landlord’s part to monitor parking.
18.4 Landlord reserves the right to modify the Common Areas, including the right
to add or remove exterior and interior landscaping and to subdivide real
property. Tenant acknowledges that Landlord specifically reserves the right to
allow the exclusive use of corridors and restroom facilities located on specific
floors to one or more tenants occupying such floors; provided, however, that
Tenant shall not be deprived of the use of the corridors reasonably required to
serve the Premises or of restroom facilities serving the floor upon which the
Premises are located.

 

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19. Utilities and Services.
19.1 Tenant shall pay to Landlord, each month as Additional Rent, the Electric
Payment Amount. The Electric Payment Amount shall be increased to the extent
that Tenant’s usage or the cost to Landlord of providing electricity increases
over the Base Year. In addition, and notwithstanding anything in this Section 19
to the contrary, to the extent (a) the same exceed the Base Year costs, (b) the
same are incurred for Tenant’s activities in the Premises outside of Business
Hours or (c) Tenant is otherwise liable therefor pursuant to this Section 19,
Tenant shall pay for all gas, heat and other utilities supplied to the Premises
(provided that light and power are included in the Electric Payment amount, as
the same may be increased pursuant to this lease), together with any fees,
surcharges and taxes thereon (each a “Utility” collectively, the “Utilities”).
If any such Utility is not separately metered to Tenant, to the extent the same
exceed the Base Year costs, Tenant shall pay a reasonable proportion (to be
determined by Landlord) of all charges of such Utility jointly metered with
other premises as part of Tenant’s Operating Expense Obligation or, in the
alternative, Landlord may, at its option, monitor the usage of such Utilities by
Tenant and charge Tenant with the cost of purchasing, installing and monitoring
such metering equipment, which cost shall be paid by Tenant as Additional Rent.
19.2 Landlord shall not be liable for, nor shall any eviction of Tenant result
from the failure to furnish any such utility or service, whether or not such
failure is caused by accident; breakage; repair; force of nature; act of God;
act of terrorism; strike, lockout or other labor disturbance or labor dispute of
any character; governmental regulation, moratorium or other governmental action;
or Landlord’s inability, despite the exercise of reasonable diligence or by any
other cause, including Landlord’s gross negligence, to furnish any such utility
or service (collectively, “Force Majeure”). In the event of such failure, Tenant
shall not be entitled to any abatement or reduction of Rent, nor shall Tenant be
relieved from the operation of any covenant or agreement of this Lease.
19.3 Tenant shall pay for, prior to delinquency of payment therefor, any
Utilities and services that may be furnished to the Premises during (to the
extent Tenant is liable therefor under this Section 19) or, if Tenant occupies
the Premises after the expiration or earlier termination of the Term, after the
Term.
19.4 Tenant shall not, without Landlord’s prior written consent, use any device
in the Premises (including, without limitation, data processing machines) that
will in any way (a) increase the amount of ventilation, air exchange, gas,
steam, electricity or water beyond the existing capacity of the Building as
proportionately allocated to the Premises based upon Tenant’s Pro Rata Share as
usually furnished or supplied for the use set forth in Section 2.2 or (b) exceed
Tenant’s Pro Rata Share of the capacity to provide such utilities or services.
19.5 If Tenant shall require Utilities or services in excess of those usually
furnished or supplied for tenants in similar spaces in the Building by reason of
Tenant’s equipment or extended hours of business operations, then Tenant shall
first procure Landlord’s consent for the use thereof, which consent Landlord may
condition upon the availability of such excess Utilities or services, and Tenant
shall pay as Additional Rent an amount equal to the cost of providing such
excess utilities and services.
19.6 Utilities and services provided by Landlord to the Premises shall be paid
by Tenant directly to the supplier of such Utility or service, except as this
Lease expressly provides.
19.7 Landlord shall provide water in Common Areas for lavatory purposes only;
provided, however, that if Landlord determines that Tenant requires, uses or
consumes water for any purpose other than ordinary lavatory purposes, Landlord
may install a water meter and thereby measure Tenant’s water consumption for all
purposes. Tenant shall pay Landlord for the costs of such meter and the
installation thereof and, throughout the duration of Tenant’s occupancy of the
Premises, Tenant shall keep said meter and installation equipment in good
working order and repair at Tenant’s sole cost and expense. If Tenant fails to
so maintain such meter and equipment, Landlord may repair or replace the same
and shall collect the costs therefor from Tenant. Tenant agrees to pay for water
consumed, as shown on said meter, as and when bills are rendered. If Tenant
fails to timely make such payments, Landlord may pay such charges and collect
the same from Tenant. Any such costs or expenses incurred, or payments made by
Landlord for any of the reasons or purposes hereinabove stated, shall be deemed
to be Additional Rent payment by Tenant and collectible by Landlord as such.

 

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19.8 Landlord reserves the right to stop service of the elevator, plumbing,
ventilation, air conditioning and electric systems, when Landlord deems
necessary or desirable, due to accident, emergency or the need to make repairs,
alterations or improvements, until such repairs, alterations or improvements
shall have been completed, and Landlord shall further have no responsibility or
liability for failure to supply elevator facilities, plumbing, ventilation, air
conditioning or electric service when prevented from doing so by Force Majeure
or a failure by a third party to deliver gas, oil or another suitable fuel
supply, or Landlord’s inability by exercise of reasonable diligence to obtain
gas, oil or another suitable fuel. Without limiting the foregoing, it is
expressly understood and agreed that any covenants on Landlord’s part to furnish
any service pursuant to any of the terms, covenants, conditions, provisions or
agreements of this Lease, or to perform any act or thing for the benefit of
Tenant, shall not be deemed breached if Landlord is unable to furnish or perform
the same by virtue of Force Majeure.
19.9 Subject to the provisions of this Article 19, Landlord shall furnish the
electric energy that Tenant shall reasonably require in the Premises for the
purposes permitted under this Lease. Except for electric energy required to
operate motors on the air handlers providing HVAC (the “HVAC Electric”), such
electric energy shall be furnished through a meter or meters and related
equipment, installed, serviced, maintained, monitored, and as appropriate from
time to time upgraded by Landlord at Tenant’s expense, measuring the amount of
electric energy furnished to the Premises. Tenant shall pay for electric energy
(for which it is liable for payment under this Section 19) in accordance with
Section 19.1 and Article 51 within ten (10) days after receipt of any bills
related thereto. The amount charged for electric energy furnished to the
Premises, excluding HVAC Electric (“Basic Electric”) shall be 105% of Landlord’s
cost including, without limitation, those charges applicable to or computed on
the basis of electric consumption, demand and hours of use, any sales or other
taxes regularly passed on to Landlord by such public utility company, fuel rate
adjustments and surcharges, and weighted in each case to reflect differences in
consumption or demand applicable to each rate level. Tenant and its authorized
representatives may have access to such meter or meters (if any) on at least
three (3) days’ notice to Landlord, for the purposes of verifying Landlord’s
meter readings (if any). From, time to time during the Term of this lease,
Landlord may, in its sole discretion, install or eliminate, or increase or
reduce the number of, such meters or vary the portions of the Premises which
they serve or replace any or all of such meters.
19.10 If pursuant to any Applicable Laws, the charges to Tenant pursuant to
Section 19.9 shall be reduced below that to which Landlord is entitled under
such Section, the deficiency shall be paid by Tenant within ten (10) days after
being billed therefor, as additional rent for the use and maintenance of the
electric distribution system of the Building.
19.11 Landlord shall not be liable in any event to Tenant for any failure or
defect in the supply or character of electric energy furnished to the Premises
by reason of any requirement, act or omission of the public utility serving the
Building with electric energy or for any other reason not attributable solely to
Landlord’s willful misconduct or gross negligence.
19.12 Landlord shall furnish and install all replacement lighting tubes, lamps,
bulbs and ballasts required in the Premises, and Tenant shall pay to Landlord or
its designated contractor upon demand the then established charges therefor of
Landlord or its designated contractor, as the case may be. Tenant may elect, by
written notice to Landlord, to furnish and install such replacement lighting
tubes, lamps, bulbs and ballasts.
19.13 Tenant’s use of electric energy in the Premises shall not at any time
exceed the capacity of any of the electrical conductors and equipment in or
otherwise serving the Premises. In order to insure that such capacity is not
exceeded and to avert possible adverse effect upon the Building’s distribution
of electricity via the Building’s electric system, Tenant shall not, without
Landlord’s prior consent in each instance (which shall not be unreasonably
withheld, based upon availability of electric energy in the Building as
allocated by Landlord to various areas of the Building) connect any fixtures,
appliances or equipment (other than normal business machines) to the Building’s
electric system or make any alterations or additions to the electric system of
the Premises existing on the date hereof. Should Landlord grant such consent,
all additional risers, distribution cables, or other equipment required therefor
shall be provided by Landlord and the cost thereof shall be paid by Tenant to
Landlord on demand (or, at Tenant’s option, shall be provided by Tenant pursuant
to plans and contractors approved by Landlord, and otherwise in accordance with
the provisions of the Lease). Landlord shall have the right to require Tenant to
pay sums on account of such cost prior to the installation of any such risers or
equipment.

 

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19.14 If required by any Applicable Laws, Landlord, upon at least sixty
(60) days’ notice to Tenant, may discontinue Landlord’s provision of electric
energy hereunder. If Landlord discontinues provision of electric energy pursuant
to this Section, Tenant shall not be released from any liability under this
Lease, except that as of the date of such discontinuance, Tenant’s obligation to
pay Landlord Additional Charges under Section 19.9 for electric energy
thereafter supplied to the Premises shall cease. As of such date, Landlord shall
permit Tenant to receive electric energy directly from the public utility
company supplying electric energy to the Project, and Tenant shall pay all costs
and expenses of obtaining such direct electrical service. Such electric energy
may be furnished to Tenant by means of the then existing Building system
feeders, risers and wiring to the extent that the same are available, suitable
and safe for such purpose. All meters and additional panel boards, feeders,
risers, wiring and other conductors and equipment which may be required to
obtain electric energy directly from such public utility company shall be
furnished and installed by Landlord at Landlord’s expense (which shall
constitute an Operating Expense, amortized on a straight line basis over the
useful life of the items in question, as reasonably determined by Landlord).
20. Alterations.
20.1 Tenant shall make no additions, improvements or alterations in or to the
Premises or engage in any construction, demolition, reconstruction, renovation,
or other work (whether major or minor) of any kind in, at, or serving the
Premises (“Alterations”) without Landlord’s prior written approval, which
approval Landlord shall not unreasonably withhold. Landlord may, however,
withhold its approval, in its sole and absolute discretion, if any proposed
Alteration affects the following (the “Building Systems and Structures”):
(a) any structural portions of the Building, including exterior walls, roof,
foundation or core of the Building, (b) the exterior of the Building, or (c) any
Building systems, including elevator, plumbing, air conditioning, heating,
electrical, security, life safety and power. Tenant shall, in making any
Alterations, use only those architects, contractors, suppliers and mechanics of
which Landlord has given prior written approval, which approval shall be in
Landlord’s reasonable discretion. In seeking Landlord’s approval, Tenant shall
provide Landlord, at least fourteen (14) days in advance of any proposed
construction, with plans, specifications, bid proposals, work contracts,
requests for laydown areas and such other information concerning the nature and
cost of the Alterations as Landlord may reasonably request.
20.2 Tenant shall not construct or permit to be constructed partitions or other
obstructions that might interfere with free access to mechanical installation or
service facilities of the Building, or interfere with the moving of Landlord’s
equipment to or from the enclosures containing such installations or facilities.
20.3 Tenant shall accomplish any work performed on the Premises or the Building
in such a manner as to permit any fire sprinkler system and fire water supply
lines to remain fully operable at all times.
20.4 Any work performed on the Premises or the Building by Tenant or Tenant’s
contractors shall be done at such times and in such manner as Landlord may from
time to time designate. Tenant covenants and agrees that all work done by Tenant
or Tenant’s contractors shall be performed in full compliance with Applicable
Laws. Within thirty (30) days after Tenant substantially completes any such
work, Tenant shall provide Landlord with complete “as-built” drawing print sets
and electronic CADD files (or files in such other current format in common use
as Landlord reasonably approves or requires) on disc showing any changes in the
Premises.
20.5 Before commencing any work, Tenant shall give Landlord at least fourteen
(14) days’ prior written notice of the proposed commencement of such work and
shall, if required by Landlord, secure, at Tenant’s own cost and expense, a
completion and lien indemnity bond satisfactory to Landlord for said work.

 

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20.6 All alterations, attached equipment, decorations, fixtures, trade fixtures,
additions and improvements, subject to Section 20.8, attached to or built into
the Premises, made by either of the Parties, including, without limitation, all
floor and wall coverings, built-in cabinet work and paneling, sinks and related
plumbing fixtures, ductwork, conduits, electrical panels and circuits, shall
(unless, prior to such construction or installation, Landlord elects otherwise)
become the property of Landlord upon the expiration or earlier termination of
the Term, and shall remain upon and be surrendered with the Premises as a part
thereof.
20.7 Tenant shall repair any damage to the Premises caused by Tenant’s removal
of any property from the Premises. During any such restoration period, Tenant
shall pay Rent to Landlord as provided herein as if said space were otherwise
occupied by Tenant.
20.8 Except as to those items listed on Exhibit C, which exhibit shall be
provided by Tenant to Landlord within thirty (30) days after the Term
Commencement Date and attached hereto, and which shall be subject to Landlord’s
reasonable approval all business and trade fixtures, machinery and equipment,
built-in furniture and cabinets, together with all additions and accessories
thereto, that are attached to or built into the Premises shall be and remain the
property of Landlord and shall not be moved by Tenant at any time during the
Term. If Tenant shall fail to remove any of its effects (which shall not include
any items described as Landlord’s property under the terms of this paragraph)
from the Premises prior to termination of this Lease, then Landlord may, at its
option, remove the same in any manner that Landlord shall choose and store said
effects without liability to Tenant for loss thereof or damage thereto, and
Tenant shall pay Landlord, upon demand, any costs and expenses incurred due to
such removal and storage or Landlord may, at its sole option and without notice
to Tenant, sell such property or any portion thereof at private sale and without
legal process for such price as Landlord may obtain and apply the proceeds of
such sale against any (a) amounts due by Tenant to Landlord under this Lease and
(b) any expenses incident to the removal, storage and sale of said personal
property.
20.9 Notwithstanding any other provision of this Article 20 to the contrary, in
no event shall Tenant remove any improvement from the Premises as to which
Landlord contributed payment, including, without limitation, the Tenant
Improvements made pursuant to the Work Letter, without Landlord’s prior written
consent, which consent Landlord may withhold in its sole and absolute
discretion.
20.10 [Intentionally omitted]
20.11 Within sixty (60) days after final completion of the Tenant Improvements
(or any other alterations, improvement or additions performed by Tenant with
respect to the Premises), Tenant shall submit to Landlord documentation showing
the amounts expended by Tenant with respect to such Tenant Improvements (or any
other alterations, improvement or additions performed by Tenant with respect to
the Premises), together with supporting documentation reasonably acceptable to
Landlord.
20.12 Tenant shall require its contractors and subcontractors performing work on
the Premises to name Landlord and its affiliates and lenders as additional
insureds on their respective insurance policies.
21. Repairs and Maintenance.
21.1 Landlord shall repair and maintain the structural and exterior portions and
Common Areas of the Building and the Project, including, without limitation,
roofing and covering materials, foundations, exterior walls, plumbing, fire
sprinkler systems (if any), heating, ventilating, air conditioning, elevators,
and electrical systems installed or furnished by Landlord. Any costs related to
the repair or maintenance activities specified in this Section 21.1 shall be
included as a part of Operating Expenses, unless such repairs or maintenance is
required in whole or in part because of any act, neglect, fault or omissions of
Tenant, its agents, servants, employees or invitees, in which case Tenant shall
pay to Landlord the cost of such repairs and maintenance.
21.2 Except for services of Landlord, if any, required by Section 21.1, Tenant
shall at Tenant’s sole cost and expense maintain and keep the Premises and every
part thereof in good condition and repair, damage thereto from ordinary wear and
tear excepted. Tenant shall, upon the expiration or sooner termination of the
Term, surrender the Premises to Landlord in as good of a condition as when
received, ordinary wear and tear excepted. Landlord shall have no obligation to
alter, remodel, improve, repair, decorate or paint the Premises or any part
thereof, other than pursuant to the terms and provisions of the Work Letter.

 

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21.3 Landlord shall not be liable for any failure to make any repairs or to
perform any maintenance that is an obligation of Landlord unless such failure
shall persist for an unreasonable time after Tenant provides Landlord with
written notice of the need of such repairs or maintenance. Tenant waives its
rights under Applicable Laws now or hereafter in effect to make repairs at
Landlord’s expense.
21.4 Repairs under this Article 21 that are obligations of Landlord are subject
to allocation among Tenant and other tenants as Operating Expenses, except as
otherwise provided in this Article 21.
21.5 This Article 21 relates to repairs and maintenance arising in the ordinary
course of operation of the Building and the Project and any related facilities.
In the event of fire, earthquake, flood, vandalism, war, terrorism, natural
disaster or similar cause of damage or destruction, Article 25 shall apply in
lieu of this Article 21.
22. Liens.
22.1 Subject to the immediately succeeding sentence, Tenant shall keep the
Premises, the Building and the Project free from any liens arising out of work
performed, materials furnished or obligations incurred by Tenant. Tenant further
covenants and agrees that any mechanic’s lien filed against the Premises, the
Building or the Project for work claimed to have been done for, or materials
claimed to have been furnished to, shall be discharged or bonded by Tenant
within ten (10) days after the filing thereof, at Tenant’s sole cost and
expense.
22.2 Should Tenant fail to discharge or bond against any lien of the nature
described in Section 22.1, Landlord may, at Landlord’s election, pay such claim
or post a bond or otherwise provide security to eliminate the lien as a claim
against title, and Tenant shall immediately reimburse Landlord for the costs
thereof as Additional Rent.
22.3 In the event that Tenant leases or finances the acquisition of office
equipment, furnishings or other personal property of a removable nature utilized
by Tenant in the operation of Tenant’s business, Tenant warrants that any
Uniform Commercial Code financing statement executed by Tenant shall, upon its
face or by exhibit thereto, indicate that such financing statement is applicable
only to removable personal property of Tenant located within the Premises. In no
event shall the address of the Building be furnished on a financing statement
without qualifying language as to applicability of the lien only to removable
personal property located in an identified suite leased by Tenant. Should any
holder of a financing statement executed by Tenant record or place of record a
financing statement that appears to constitute a lien against any interest of
Landlord or against equipment that may be located other than within an
identified suite leased by Tenant, Tenant shall, within ten (10) days after
filing such financing statement, cause (a) a copy of the lender security
agreement or other documents to which the financing statement pertains to be
furnished to Landlord to facilitate Landlord’s ability to demonstrate that the
lien of such financing statement is not applicable to Landlord’s interest and
(b) Tenant’s lender to amend such financing statement and any other documents of
record to clarify that any liens imposed thereby are not applicable to any
interest of Landlord in the Premises, the Building or the Project.
23. Indemnification and Exculpation.
23.1 Tenant agrees to indemnify, defend and save Landlord harmless from and
against any and all demands, claims, liabilities, losses, costs, expenses,
actions, causes of action, damages or judgments, and all reasonable expenses
(including, without limitation, reasonable attorneys’ fees, charges and
disbursements) incurred in investigating or resisting the same (collectively,
“Claims”) arising from injury or death to any person or injury to any property
occurring within or about the Premises, the Building or the Property arising
directly or indirectly out of Tenant’s or Tenant’s employees’, agents’ or
guests’ use or occupancy of the Premises or a breach or default by Tenant in the
performance of any of its obligations hereunder, unless caused solely by
Landlord’s willful misconduct or gross negligence.

 

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23.2 Notwithstanding any provision of Section 23.1 to the contrary, Landlord
shall not be liable to Tenant for, and Tenant assumes all risk of, damage to
personal property or scientific research, including, without limitation, loss of
records kept by Tenant within the Premises and damage or losses caused by fire,
electrical malfunction, gas explosion or water damage of any type (including,
without limitation, broken water lines, malfunctioning fire sprinkler systems,
roof leaks or stoppages of lines), unless any such loss is due to Landlord’s
willful disregard of written notice by Tenant of need for a repair that Landlord
is responsible to make for an unreasonable period of time. Tenant further waives
any claim for injury to Tenant’s business or loss of income relating to any such
damage or destruction of personal property as described in this Section 23.2.
23.3 Landlord shall not be liable for any damages arising from any act, omission
or neglect of any other tenant in the Building or the Project, or of any other
third party.
23.4 Tenant acknowledges that security devices and services, if any, while
intended to deter crime, may not in given instances prevent theft or other
criminal acts. Landlord shall not be liable for injuries or losses caused by
criminal acts of third parties, and Tenant assumes the risk that any security
device or service may malfunction or otherwise be circumvented by a criminal. If
Tenant desires protection against such criminal acts, then Tenant shall, at
Tenant’s sole cost and expense, obtain appropriate insurance coverage.
23.5 The provisions of this Article 23 shall survive the expiration or earlier
termination of this Lease.
24. Insurance; Waiver of Subrogation.
24.1 Landlord shall maintain insurance for the Building and the Project in
amounts equal to full replacement cost (exclusive of the costs of excavation,
foundations and footings, and without reference to depreciation taken by
Landlord upon its books or tax returns) or such lesser coverage as Landlord may
elect, provided that such coverage shall not be less than ninety percent (90%)
of such full replacement cost or the amount of such insurance Landlord’s lender,
mortgagee or beneficiary (each, a “Lender”), if any, requires Landlord to
maintain, providing protection against any peril generally included within the
classification “Fire and Extended Coverage,” together with insurance against
sprinkler damage (if applicable), vandalism and malicious mischief. Landlord,
subject to availability thereof, shall further insure, if Landlord deems it
appropriate, coverage against flood, environmental hazard, terrorism,
earthquake, loss or failure of building equipment, rental loss during the period
of repairs or rebuilding, workmen’s compensation insurance and fidelity bonds
for employees employed to perform services. Notwithstanding the foregoing,
Landlord may, but shall not be deemed required to, provide insurance for any
improvements installed by Tenant or that are in addition to the standard
improvements customarily furnished by Landlord, if any, without regard to
whether or not such are made a part of or are affixed to the Building. Any costs
incurred by Landlord pursuant to this Section 24.1 shall constitute a portion of
Operating Expenses.
24.2 In addition, Landlord shall carry public liability insurance with a single
limit of not less than Ten Million Dollars ($10,000,000) for death or bodily
injury, or property damage with respect to the Project. Any costs incurred by
Landlord pursuant to this Section 24.2 shall constitute a portion of Operating
Expenses.
24.3 Tenant shall, at its own cost and expense, procure and maintain in effect,
beginning on the Term Commencement Date or the date of occupancy, whichever
occurs first, and continuing throughout the Term (and occupancy by Tenant, if
any, after termination of this Lease) comprehensive public liability insurance
with limits of not less than Ten Million Dollars ($10,000,000) per occurrence
for death or bodily injury and not less than Two Million Dollars ($2,000,000)
for property damage with respect to the Premises.
24.4 The insurance required to be purchased and maintained by Tenant pursuant to
this Lease shall name Landlord, BioMed Realty, L.P., BioMed Realty Trust, Inc.,
and their respective Lenders (“Landlord Parties” as additional insureds. Said
insurance shall be with companies having a rating of not less than policyholder
rating of A and financial category rating of at least Class XII in “Best’s
Insurance Guide.” Tenant shall obtain for Landlord from the insurance companies
or cause the insurance companies to furnish certificates of coverage to
Landlord. No such policy shall be cancelable or subject to reduction of coverage
or other modification or cancellation except after thirty (30) days’ prior
written notice to Landlord from the insurer. All such policies shall be written
as primary policies, not contributing with and not in excess of the coverage
that Landlord may carry. Tenant’s policy may be a “blanket policy” that
specifically provides that the amount of insurance shall not be prejudiced by
other losses covered by the policy. Tenant shall, at least twenty (20) days
prior to the expiration of such policies, furnish Landlord with renewals or
binders. Tenant agrees that if Tenant does not take out and maintain such
insurance, Landlord may (but shall not be required to) procure said insurance on
Tenant’s behalf and at its cost to be paid by Tenant as Additional Rent.

 

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24.5 Tenant assumes the risk of damage to any fixtures, goods, inventory,
merchandise, equipment and leasehold improvements that are Tenant’s property
under this Lease, and Landlord shall not be liable for injury to Tenant’s
business or any loss of income therefrom, relative to such damage, all as more
particularly set forth within this Lease. Tenant shall, at Tenant’s sole cost
and expense, carry such insurance as Tenant desires for Tenant’s protection with
respect to personal property of Tenant or business interruption.
24.6 In each instance where insurance is to name Landlord Parties as additional
insureds, Tenant shall, upon Landlord’s written request, also designate and
furnish certificates evidencing such Landlord Parties as additional insureds to
(a) any Lender of Landlord holding a security interest in the Building or the
Project, (b) the landlord under any lease whereunder Landlord is a tenant of the
real property upon which the Building is located if the interest of Landlord is
or shall become that of a tenant under a ground lease rather than that of a fee
owner, and (c) any management company retained by Landlord to manage the
Project.
24.7 Landlord and Tenant each hereby waive any and all rights of recovery
against the other or against the officers, directors, employees, agents and
representatives of the other on account of loss or damage occasioned by such
waiving party or its property or the property of others under such waiving
party’s control, in each case to the extent that such loss or damage is insured
against under any fire and extended coverage insurance policy that either
Landlord or Tenant may have in force at the time of such loss or damage. Such
waivers shall continue so long as their respective insurers so permit. Any
termination of such a waiver shall be by written notice to the other party,
containing a description of the circumstances hereinafter set forth in this
Section 24.7. Landlord and Tenant, upon obtaining the policies of insurance
required or permitted under this Lease, shall give notice to the insurance
carrier or carriers that the foregoing mutual waiver of subrogation is contained
in this Lease. If such policies shall not be obtainable with such waiver or
shall be so obtainable only at a premium over that chargeable without such
waiver, then the party seeking such policy shall notify the other of such
conditions, and the party so notified shall have ten (10) days thereafter to
either (a) procure such insurance with companies reasonably satisfactory to the
other party or (b) agree to pay such additional premium (in Tenant’s case, in
the proportion that the area of the Premises bears to the insured area). If the
parties do not accomplish either (a) or (b), then this Section 24.7 shall have
no effect during such time as such policies shall not be obtainable or the party
in whose favor a waiver of subrogation is desired refuses to pay the additional
premium. If such policies shall at any time be unobtainable, but shall be
subsequently obtainable, then neither party shall be subsequently liable for a
failure to obtain such insurance until a reasonable time after notification
thereof by the other party. If the release of either Landlord or Tenant, as set
forth in the first sentence of this Section 24.7, shall contravene Applicable
Laws, then the liability of the party in question shall be deemed not released
but shall be secondary to the other party’s insurer.
24.8 Landlord may require insurance policy limits required under this Lease to
be raised to conform with requirements of Landlord’s Lender or to bring coverage
limits to levels then being required of new tenants within the Project.
25. Damage or Destruction.
25.1 In the event of a partial destruction of the Building or the Project by
fire or other perils covered by extended coverage insurance not exceeding
twenty-five percent (25%) of the full insurable value thereof, and provided that
(a) the damage thereto is such that the Building or the Project may be repaired,
reconstructed or restored within a period of six (6) months from the date of the
happening of such casualty and (b) Landlord shall receive insurance proceeds
sufficient to cover the cost of such repairs (except for any deductible amount
provided by Landlord’s policy, which deductible amount, if paid by Landlord,
shall constitute an Operating Expense), Landlord shall commence and proceed
diligently with the work of repair, reconstruction and restoration of the
Building or the Project, as applicable, and this Lease shall continue in full
force and effect.

 

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25.2 In the event of any damage to or destruction of the Building or the Project
other than as described in Section 25.1, Landlord may elect to repair,
reconstruct and restore the Building or the Project, as applicable, in which
case this Lease shall continue in full force and effect. If Landlord elects not
to repair the Building or the Project, as applicable, or if Landlord does not
timely repair the Building or the Project, as applicable, in accordance with
Section 25.6, then this Lease shall terminate as of the date of such damage or
destruction, except for those terms that, by their express terms, survive the
expiration or earlier termination hereof.
25.3 Landlord shall give written notice to Tenant within sixty (60) days
following the date of damage or destruction of its election not to repair,
reconstruct or restore the Building or the Project, as applicable,.
25.4 Upon any termination of this Lease under any of the provisions of this
Article 25, the parties shall be released thereby without further obligation to
the other from the date possession of the Premises is surrendered to the
Landlord, except with regard to (a) items occurring prior to the damage or
destruction, (b) provisions of this Lease that, by their express terms, survive
the expiration or earlier termination hereof and (c) the Security Deposit, which
shall be handled in accordance with Article 12 hereof.
25.5 In the event of repair, reconstruction and restoration as provided in this
Article 25, all Rent to be paid by Tenant under this Lease shall be abated
proportionately based on the extent to which Tenant’s use of the Premises is
impaired during the period of such repair, reconstruction or restoration, unless
Landlord provides Tenant with other space during the period of repair that, in
Tenant’s reasonable opinion, is suitable for the temporary conduct of Tenant’s
business.
25.6 Notwithstanding anything to the contrary contained in this Article 25,
should Landlord be delayed or prevented from completing the repair,
reconstruction or restoration of the damage or destruction to the Premises after
the occurrence of such damage or destruction by Force Majeure, then the time for
Landlord to commence or complete repairs shall be extended on a day-for-day
basis; provided, however, that, at Landlord’s election, Landlord shall be
relieved of its obligation to make such repair, reconstruction or restoration.
Tenant shall be released from any obligations under this Lease (except with
regard to those provisions that, by their express terms, survive the expiration
or earlier termination hereof) if Landlord determines (a) the repair,
reconstruction or restoration required to be performed by Landlord cannot be
completed within twelve (12) months after the date of damage or destruction or
(b) on the date that is twelve (12) months after the date of damage or
destruction that the repair, reconstruction or restoration required to be
performed by Landlord to provide Tenant use of the Premises is not then
Substantially Complete.
25.7 If Landlord is obligated to or elects to repair, reconstruct or restore as
herein provided, then Landlord shall be obligated to make such repair,
reconstruction or restoration only with regard to those portions of the
Premises, the Building or the Project that were originally provided at
Landlord’s expense. The repair, reconstruction or restoration of improvements
not originally provided by Landlord or at Landlord’s expense shall be the
obligation of Tenant. In the event Tenant has elected to upgrade certain
improvements from the Building Standard, Landlord shall, upon the need for
replacement due to an insured loss, provide only the Building Standard, unless
Tenant again elects to upgrade such improvements and pay any incremental costs
related thereto, except to the extent that excess insurance proceeds, if
received, are adequate to provide such upgrades, in addition to providing for
basic repair, reconstruction and restoration of the Premises, the Building and
the Project.
25.8 Notwithstanding anything to the contrary contained in this Article 25,
Landlord shall not have any obligation whatsoever to repair, reconstruct or
restore the Premises if the damage resulting from any casualty covered under
this Article 25 occurs during the last twenty-four (24) months of the Term or
any extension hereof, or to the extent that insurance proceeds are not available
therefor.
25.9 Landlord’s obligation, should it elect or be obligated to repair or
rebuild, shall be limited to the Property and the Building; provided that Tenant
shall, at its expense, replace or fully repair all of Tenant’s personal property
and any alterations installed by Tenant existing at the time of such damage or
destruction. If the Property or the Building is to be repaired in accordance
with the foregoing, Landlord shall make available to Tenant any portion of
insurance proceeds it receives that are allocable to the alterations constructed
by Tenant pursuant to this Lease, provided Tenant is not then in default under
this Lease.

 

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26. Eminent Domain.
26.1 In the event the whole of the Premises, or such part thereof as shall
substantially interfere with the Tenant’s use and occupancy thereof, shall be
taken for any public or quasi-public purpose by any lawful power or authority by
exercise of the right of appropriation, condemnation or eminent domain, or sold
to prevent such taking, Tenant or Landlord may terminate this Lease effective as
of the date possession is required to be surrendered to said authority.
26.2 In the event of a partial taking of the Building or the Project, or of
drives, walkways or parking areas serving the Building or the Project for any
public or quasi-public purpose by any lawful power or authority by exercise of
right of appropriation, condemnation, or eminent domain, or sold to prevent such
taking, then, without regard to whether any portion of the Premises occupied by
Tenant was so taken, Landlord may elect to terminate this Lease as of such
taking if such taking is, in Landlord’s sole opinion, of a material nature such
as to make it uneconomical to continue use of the unappropriated portion for
purposes of renting office or laboratory space.
26.3 Tenant shall be entitled to any award that is specifically awarded as
compensation for (a) the taking of Tenant’s personal property (as determined in
accordance with Article 20) that was installed at Tenant’s expense and (b) the
costs of Tenant moving to a new location. Except as set forth in the previous
sentence, any award for such taking shall be the property of Landlord.
26.4 If, upon any taking of the nature described in this Article 26, this Lease
continues in effect, then Landlord shall promptly proceed to restore the
Premises, the Building and the Project, as applicable, to substantially their
same condition prior to such partial taking. To the extent such restoration is
feasible, as determined by Landlord in its sole and absolute discretion, the
Rent shall be decreased by a number, the numerator of which is the rental value
of the Premises prior to such taking, and the denominator of which is the rental
value of the Premises after such taking.
27. Defaults and Remedies.
27.1 Late payment by Tenant to Landlord of Rent and other sums due shall cause
Landlord to incur costs not contemplated by this Lease, the exact amount of
which shall be extremely difficult and impracticable to ascertain. Such costs
include, but are not limited to, processing and accounting charges and late
charges that may be imposed on Landlord by the terms of any mortgage or trust
deed covering the Premises. Therefore, if any installment of Rent due from
Tenant is not received by Landlord within five (5) business days after the date
such payment is due, Tenant shall pay to Landlord an additional sum of four
percent (4%) of the overdue Rent as a late charge. The parties agree that this
late charge represents a fair and reasonable estimate of the costs that Landlord
shall incur by reason of late payment by Tenant. In addition to the late charge,
Rent not paid when due shall bear interest from the fifth (5th) day after the
date due until paid at the lesser of (a) twelve percent (12%) per annum or
(b) the maximum rate permitted by Applicable Laws.
27.2 No payment by Tenant or receipt by Landlord of a lesser amount than the
Rent payment herein stipulated shall be deemed to be other than on account of
the Rent, nor shall any endorsement or statement on any check or any letter
accompanying any check or payment as Rent 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 pursue any other remedy provided in
this Lease or in equity or at law. If a dispute shall arise as to any amount or
sum of money to be paid by Tenant to Landlord hereunder, Tenant shall have the
right to make payment “under protest,” such payment shall not be regarded as a
voluntary payment, and there shall survive the right on the part of Tenant to
institute suit for recovery of the payment paid under protest.

 

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27.3 If Tenant fails to pay any sum of money required to be paid by it
hereunder, or shall fail to perform any other act on its part to be performed
hereunder, Landlord may, without waiving or releasing Tenant from any
obligations of Tenant, but shall not be obligated to, make such payment or
perform such act; provided that such failure by Tenant continues for three (3)
(in the event of monetary defaults) or ten (10) (in the event of non-monetary
defaults) business days after Landlord delivers written notice to Tenant
demanding performance by Tenant; or provided that such failure by Tenant
unreasonably interfered with the use of the Building by any other tenant or with
the efficient operation of the Building, or resulted or, absent intervention by
Landlord, could have resulted in a violation of Applicable Laws or the
cancellation of an insurance policy maintained by Landlord. Notwithstanding the
foregoing, in the event fo an emergency, Landlord shall have the right to enter
the Premises and act in accordance with its rights as provided elsewhere in this
Lease. Tenant shall pay to Landlord as Additional Rent all sums so paid or
incurred by Landlord, together with interest thereon, from the date such sums
were paid or incurred, at the annual rate equal to twelve percent (12%) per
annum or highest rate permitted by Applicable Laws, whichever is less.
27.4 The occurrence of any one or more of the following events shall constitute
a “Default” hereunder by Tenant:
(a) The abandonment or vacation of the Premises by Tenant;
(b) The failure by Tenant to make any payment of Rent, as and when due, beyond
any applicable notice and cure periods;
(c) The failure by Tenant to observe or perform any obligation or covenant
contained herein (other than described in Subsections 27.4(a) and 27.4(b)) to be
performed by Tenant, where such failure shall continue for a period of ten
(10) days after delivery of written notice thereof from Landlord to Tenant;
provided that, if the nature of Tenant’s default is such that it reasonably
requires more than ten (10) days to cure, Tenant shall not be deemed to be in
default if Tenant shall commence such cure within said ten (10) day period and
thereafter diligently prosecute the same to completion; and provided, further,
that such cure is completed no later than ninety (90) days from the date of
Tenant’s receipt of written notice from Landlord;
(d) Tenant makes an assignment for the benefit of creditors;
(e) A receiver, trustee or custodian is appointed to or does take title,
possession or control of all or substantially all of Tenant’s assets;
(f) Tenant files a voluntary petition under the United States Bankruptcy Code or
any successor statute (the “Code”);
(g) Any involuntary petition if filed against Tenant under any chapter of the
Code and is not dismissed within one hundred twenty (120) days;
(h) Failure to deliver an estoppel certificate in accordance with Article 30; or
(i) Tenant’s interest in this Lease is attached, executed upon or otherwise
judicially seized and such action is not released within one hundred twenty
(120) days of the action.
Notices given under this Section 27.4 shall specify the alleged default and
shall demand that Tenant perform the provisions of this Lease or pay the Rent
that is in arrears, as the case may be, within the applicable period of time, or
quit the Premises. No such notice shall be deemed a forfeiture or a termination
of this Lease unless Landlord elects otherwise in such notice.
27.5 In the event of a Default by Tenant, and at any time thereafter, with or
without notice or demand and without limiting Landlord in the exercise of any
right or remedy that Landlord may have, Landlord shall be entitled to terminate
Tenant’s right to possession of the Premises by any lawful means, in which case
this Lease shall terminate and Tenant shall immediately surrender possession of
the Premises to Landlord. In such event, Landlord shall have the immediate right
to re-enter and remove all persons and property, and such property may be
removed and stored in a public warehouse or elsewhere at the cost and for the
account of Tenant, all without service of notice or resort to legal process and
without being deemed guilty of trespass or becoming liable for any loss or
damage that may be occasioned thereby. In the event that Landlord shall elect to
so terminate this Lease, then Landlord shall be entitled to recover from Tenant
all damages incurred by Landlord by reason of Tenant’s default, including,
without limitation:

 

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(a) The worth at the time of award of any unpaid Rent that had accrued at the
time of such termination; plus
(b) The worth at the time of award of the amount by which the unpaid Rent that
would have accrued during the period commencing with termination of the Lease
and ending at the time of award exceeds that portion of the loss of Landlord’s
rental income from the Premises that Tenant proves to Landlord’s reasonable
satisfaction could have been reasonably avoided, taking into account the dates
on which such unpaid Rent would have been due and payable; plus
(c) The worth at the time of award of the amount by which the unpaid Rent for
the balance of the Term after the time of award exceeds that portion of the loss
of Landlord’s rental income from the Premises that Tenant proves to Landlord’s
reasonable satisfaction could have been reasonably avoided taking into account
the dates on which such unpaid Rent would have been due and payable; plus
(d) Any other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant’s failure to perform its obligations under this
Lease or that in the ordinary course of things would be likely to result
therefrom, including, without limitation, the cost of restoring the Premises to
the condition required under the terms of this Lease; plus
(e) At Landlord’s election, such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to time by Applicable Laws.
As used in Subsections 27.5(a) and 27.5(b), “worth at the time of award” shall
be computed by allowing interest at the rate specified in Section 27.1. As used
in Subsection 27.5(c) above, the “worth at the time of the award” shall be
computed by taking the present value of such amount, using the discount rate of
the Federal Reserve Bank of San Francisco at the time of the award plus one
(1) percentage point.
27.6 If Landlord does not elect to terminate this Lease as provided in
Section 27.5, then Landlord may, from time to time, recover all Rent as it
becomes due under this Lease. At any time thereafter, if Tenant is still in
Default, Landlord may elect to terminate this Lease and to recover damages to
which Landlord is entitled.
27.7 In the event Landlord elects to terminate this Lease in accordance with the
terms hereof and relet the Premises, Landlord may execute any new lease in its
own name. Tenant hereunder shall have no right or authority whatsoever to
collect any Rent from such tenant. The proceeds of any such reletting shall be
applied as follows:
(a) First, to the payment of any indebtedness other than Rent due hereunder from
Tenant to Landlord, including, without limitation, storage charges or brokerage
commissions owing from Tenant to Landlord as the result of such reletting;
(b) Second, to the payment of the costs and expenses of reletting the Premises,
including (i) alterations and repairs that Landlord deems reasonably necessary
and advisable and (ii) reasonable attorneys’ fees, charges and disbursements
incurred by Landlord in connection with the retaking of the Premises and such
reletting;
(c) Third, to the payment of Rent and other charges due and unpaid hereunder;
and
(d) Fourth, to the payment of future Rent and other damages payable by Tenant
under this Lease.
27.8 All of Landlord’s rights, options and remedies hereunder shall be construed
and held to be nonexclusive and cumulative. Landlord shall have the right to
pursue any one or all of such remedies, or any other remedy or relief that may
be provided by Applicable Laws, whether or not stated in this Lease. No waiver
of any default of Tenant hereunder shall be implied from any acceptance by
Landlord of any Rent or other payments due hereunder or any omission by Landlord
to take any action on account of such default if such default persists or is
repeated, and no express waiver shall affect defaults other than as specified in
said waiver.

 

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27.9 Landlord’s termination of (a) this Lease or (b) Tenant’s right to
possession of the Premises shall not relieve Tenant of any liability to Landlord
that has previously accrued or that shall arise based upon events that occurred
prior to the later to occur of (i) the date of Lease termination or (ii) the
date Tenant surrenders possession of the Premises.
27.10 To the extent permitted by Applicable Laws, Tenant waives any and all
rights of redemption granted by or under any present or future Applicable Laws
if Tenant is evicted or dispossessed for any cause, or if Landlord obtains
possession of the Premises due to Tenant’s default hereunder or otherwise.
27.11 Landlord shall not be in default under this Lease unless Landlord fails to
perform obligations required of Landlord within a reasonable time, but in no
event shall such failure to continue for more than thirty (30) days after
written notice from Tenant specifying the nature of Landlord’s failure;
provided, however, that if the nature of Landlord’s obligation is such that more
than thirty (30) days are required for its performance, then Landlord shall not
be in default if Landlord commences performance within such thirty (30) day
period and thereafter diligently prosecutes the same to completion.
27.12 In the event of any default by Landlord, Tenant shall give notice by
registered or certified mail to any (a) beneficiary of a deed of trust or
(b) mortgagee under a mortgage covering the Premises, the Building or the
Project and to any landlord of any lease of land upon or within which the
Premises, the Building or the Project is located, and shall offer such
beneficiary, mortgagee or landlord a reasonable opportunity to cure the default,
including time to obtain possession of the Building by power of sale or a
judicial action if such should prove necessary to effect a cure; provided that
Landlord shall furnish to Tenant in writing, upon written request by Tenant, the
names and addresses of all such persons who are to receive such notices.
28. Assignment or Subletting.
28.1 Except as hereinafter expressly permitted, Tenant shall not, either
voluntarily or by operation of law, directly or indirectly sell, hypothecate,
assign, pledge, encumber or otherwise transfer this Lease, or sublet the
Premises or any part hereof (each, a “Transfer”), without Landlord’s prior
written consent, which consent Landlord may not unreasonably withhold or delay.
28.2 In the event Tenant desires to effect a Transfer, then, at least thirty
(30) but not more than ninety (90) days prior to the date when Tenant desires
the assignment or sublease to be effective (the “Transfer Date”), Tenant shall
provide written notice to Landlord (the “Transfer Notice”) containing
information (including references) concerning the character of the proposed
transferee, assignee or sublessee; the Transfer Date; any ownership or
commercial relationship between Tenant and the proposed transferee, assignee or
sublessee; and the consideration and all other material terms and conditions of
the proposed Transfer, all in such detail as Landlord shall reasonably require.
Tenant shall also tender to Landlord reasonable attorneys’ fees incurred by
Landlord in reviewing Tenant’s request for such Transfer, not to exceed One
Thousand Five Hundred Dollars ($1,500).
28.3 Landlord, in determining whether consent should be given to a proposed
Transfer, may give consideration to (a) the financial strength of such
transferee, assignee or sublessee (notwithstanding Tenant remaining liable for
Tenant’s performance), (b) any change in use that such transferee, assignee or
sublessee proposes to make in the use of the Premises, (c) Landlord’s desire to
exercise its rights under Section 28.8 to cancel this Lease and (d) any adverse
effect of the proposed Transfer on the status of Landlord’s indirect parent’s
status as a Real Estate Investment Trust under the Internal Revenue Code, as
amended from time to time. In no event shall Landlord be deemed to be
unreasonable for declining to consent to a Transfer to a transferee, assignee or
sublessee of poor reputation, lacking financial qualifications, seeking a change
in the Permitted Use, or jeopardizing directly or indirectly the status of
Landlord or any of Landlord’s affiliates as a Real Estate Investment Trust under
the Code.

 

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28.4 As conditions precedent to Tenant subleasing the Premises to Landlord
considering a request by Tenant to Tenant’s transfer of rights or sharing of the
Premises, Landlord may require any or all of the following:
(a) Tenant shall remain fully liable under this Lease during the unexpired Term;
(b) Tenant shall provide Landlord with evidence reasonably satisfactory to
Landlord that the value of Landlord’s interest under this Lease shall not be
diminished or reduced by the proposed Transfer. Such evidence shall include,
without limitation, evidence respecting the relevant business experience and
financial responsibility and status of the proposed transferee, assignee or
sublessee;
(c) Tenant shall reimburse Landlord for Landlord’s actual costs and expenses,
including, without limitation, reasonable attorneys’ fees, charges and
disbursements incurred in connection with the review, processing and
documentation of such request, not to exceed One Thousand Five Hundred Dollars
($1,500);
(d) If Tenant’s transfer of rights or sharing of the Premises provides for the
receipt by, on behalf of or on account of Tenant of any consideration of any
kind whatsoever (including, without limitation, a premium rental for a sublease
or lump sum payment for an assignment, but excluding Tenant’s reasonable costs
in marketing and subleasing the Premises or in selling personal property or
equipment to the proposed transferee, assignee or sublessee) in excess of the
rental and other charges due to Landlord under this Lease, Tenant shall pay
fifty percent (50%) of all of such excess to Landlord, prior to deductions for
any transaction costs incurred by Tenant, including marketing expenses, tenant
improvement allowances actually provided by Tenant, alterations, cash
concessions, brokerage commissions, attorneys’ fees and free rent.. If said
consideration consists of cash paid to Tenant, payment to Landlord shall be made
upon receipt by Tenant of such cash payment;
(e) The proposed transferee, assignee or sublessee shall agree that, in the
event Landlord gives such proposed transferee, assignee or sublessee notice that
Tenant is in default under this Lease, such proposed transferee, assignee or
sublessee shall thereafter make all payments otherwise due Tenant directly to
Landlord, which payments shall be received by Landlord without any liability
being incurred by Landlord, except to credit such payment against those due by
Tenant under this Lease, and any such proposed transferee, assignee or sublessee
shall agree to attorn to Landlord or its successors and assigns should this
Lease be terminated for any reason; provided, however, that in no event shall
Landlord or its Lenders, successors or assigns be obligated to accept such
attornment;
(f) Landlord’s consent to any such Transfer shall be effected on Landlord’s
forms;
(g) Tenant shall not then be in default hereunder in any respect;
(h) Such proposed transferee, assignee or sublessee’s use of the Premises shall
be the same as the Permitted Use;
(i) Landlord shall not be bound by any provision of any agreement pertaining to
the Transfer, except for Landlord’s written consent to the same;
(j) Tenant shall deliver to Landlord one executed copy of any and all written
instruments evidencing or relating to the Transfer;
(k) Tenant shall pay all transfer and other taxes (including interest and
penalties) assessed or payable for any Transfer;
(l) Landlord’s consent (or waiver of its rights) for any Transfer shall not
waive Landlord’s right to consent to any later Transfer; and
(m) A list of Hazardous Materials (as defined in Section 40.7 below), certified
by the proposed transferee, assignee or sublessee to be true and correct, that
the proposed transferee, assignee or sublessee intends to use or store in the
Premises. Additionally, Tenant shall deliver to Landlord, on or before the date
any proposed transferee, assignee or sublessee takes occupancy of the Premises,
all of the items relating to Hazardous Materials of such proposed transferee,
assignee or sublessee as described in Section 42.2.

 

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28.5 Any Transfer that is not in compliance with the provisions of this
Article 28 shall be void and shall, at the option of Landlord, terminate this
Lease.
28.6 The consent by Landlord to a Transfer shall not relieve Tenant or proposed
transferee, assignee or sublessee from obtaining Landlord’s consent to any
further Transfer, nor shall it release Tenant or any proposed transferee,
assignee or sublessee of Tenant from full and primary liability under this
Lease.
28.7 Notwithstanding any Transfer, Tenant shall remain fully and primarily
liable for the payment of all Rent and other sums due or to become due
hereunder, and for the full performance of all other terms, conditions and
covenants to be kept and performed by Tenant. The acceptance of Rent or any
other sum due hereunder, or the acceptance of performance of any other term,
covenant or condition thereof, from any person or entity other than Tenant shall
not be deemed a waiver of any of the provisions of this Lease or a consent to
any Transfer.
28.8 If Tenant sublets the Premises or any potion thereof, Tenant hereby
immediately and irrevocably assigns to Landlord, as security for Tenant’s
obligations under this Lease, all rent from any such subletting, and appoints
Landlord as assignee and attorney-in-fact for Tenant, and Landlord (or a
receiver for Tenant appointed on Landlord’s application) may collect such rent
and apply it toward Tenant’s obligations under this Lease; provided that, until
the occurrence of a Default by Tenant, Tenant shall have the right to collect
such rent.
29. Attorneys’ Fees. In the event of any litigation between Landlord and Tenant
arising out of or in connection with this Lease, then provided that one party
substantially prevails, such party shall be entitled to have and recover from
the other party reasonable attorneys’ fees, charges and disbursements and costs
of suit.
30. Bankruptcy. In the event a debtor, trustee or debtor in possession under the
Code, or another person with similar rights, duties and powers under any other
Applicable Laws, proposes to cure any default under this Lease or to assume or
assign this Lease and is obliged to provide adequate assurance to Landlord that
(a) a default shall be cured, (b) Landlord shall be compensated for its damages
arising from any breach of this Lease and (c) future performance of Tenant’s
obligations under this Lease shall occur, then such adequate assurances shall
include any or all of the following, as designated by Landlord in its sole and
absolute discretion:
30.1 Those acts specified in the Code or other Applicable Laws as included
within the meaning of “adequate assurance,” even if this Lease does not concern
a shopping center or other facility described in such Applicable Laws;
30.2 A prompt cash payment to compensate Landlord for any monetary defaults or
actual damages arising directly from a breach of this Lease;
30.3 A cash deposit in an amount at least equal to the then-current amount of
the Security Deposit; or
30.4 The assumption or assignment of all of Tenant’s interest and obligations
under this Lease.
31. Definition of Landlord. With regard to obligations imposed upon Landlord
pursuant to this Lease, the term “Landlord,” as used in this Lease, shall refer
only to Landlord or Landlord’s then-current successor-in-interest. In the event
of any transfer, assignment or conveyance of Landlord’s interest in this Lease
or in Landlord’s fee title to or leasehold interest in the Property, as
applicable, the Landlord herein named (and in case of any subsequent transfers
or conveyances, the subsequent Landlord) shall be automatically freed and
relieved, from and after the date of such transfer, assignment or conveyance,
from all liability for the performance of any covenants or obligations contained
in this Lease thereafter to be performed by Landlord and, without further
agreement, the transferee, assignee or conveyee of Landlord’s in this Lease or
in Landlord’s fee title to or leasehold interest in the Property, as applicable,
shall be deemed to have assumed and agreed to observe and perform any and all
covenants and obligations of Landlord hereunder during the tenure of its
interest in the Lease or the Property. Landlord or any subsequent Landlord may
transfer its interest in the Premises or this Lease without Tenant’s consent.

 

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32. Estoppel Certificate. Tenant shall, within ten (10) business days of receipt
of written notice from Landlord, execute, acknowledge and deliver a statement in
writing substantially in the form attached to this Lease as Exhibit E, or on any
other form reasonably requested by a proposed Lender or purchaser,
(a) certifying that this Lease is unmodified and in full force and effect (or,
if modified, stating the nature of such modification and certifying that this
Lease as so modified is in full force and effect) and the dates to which rental
and other charges are paid in advance, if any, (b) acknowledging that there are
not, to Tenant’s knowledge, any uncured defaults on the part of Landlord
hereunder, or specifying such defaults if any are claimed, and (c) setting forth
such further information with respect to this Lease or the Premises as may be
requested thereon. Any such statement may be relied upon by any prospective
purchaser or encumbrancer of all or any portion of the real property of which
the Premises are a part. Tenant’s failure to deliver such statement within such
the prescribed time shall, at Landlord’s option, constitute a Default under this
Lease, and, in any event, shall be binding upon Tenant that the Lease is in full
force and effect and without modification except as may be represented by
Landlord in any certificate prepared by Landlord and delivered to Tenant for
execution.
33. Joint and Several Obligations. If more than one person or entity executes
this Lease as Tenant, then:
33.1 Each of them is jointly and severally liable for the keeping, observing and
performing of all of the terms, covenants, conditions, provisions and agreements
of this Lease to be kept, observed or performed by Tenant; and
33.2 The term “Tenant” as used in this Lease shall mean and include each of
them, jointly and severally. The act of, notice from, notice to, refund to, or
signature of any one or more of them with respect to the tenancy under this
Lease, including, without limitation, any renewal, extension, expiration,
termination or modification of this Lease, shall be binding upon each and all of
the persons executing this Lease as Tenant with the same force and effect as if
each and all of them had so acted, so given or received such notice or refund,
or so signed.
34. Limitation of Landlord’s Liability.
34.1 If Landlord is in default under this Lease and, as a consequence, Tenant
recovers a monetary judgment against Landlord, the judgment shall be satisfied
only out of (a) the proceeds of sale received on execution of the judgment and
levy against the right, title and interest of Landlord in the Building and the
Project of which the Premises are a part, (b) rent or other income from such
real property receivable by Landlord or (c) the consideration received by
Landlord from the sale, financing, refinancing or other disposition of all or
any part of Landlord’s right, title or interest in the Building or the Project
of which the Premises are a part.
34.2 Landlord shall not be personally liable for any deficiency under this
Lease. If Landlord is a partnership or joint venture, then the partners of such
partnership shall not be personally liable for Landlord’s obligations under this
Lease, and no partner of Landlord shall be sued or named as a party in any suit
or action, and service of process shall not be made against any partner of
Landlord except as may be necessary to secure jurisdiction of the partnership or
joint venture. If Landlord is a corporation, then the shareholders, directors,
officers, employees and agents of such corporation shall not be personally
liable for Landlord’s obligations under this Lease, and no shareholder,
director, officer, employee or agent of Landlord shall be sued or named as a
party in any suit or action, and service of process shall not be made against
any shareholder, director, officer, employee or agent of Landlord. If Landlord
is a limited liability company, then the members of such limited liability
company shall not be personally liable for Landlord’s obligations under this
Lease, and no member of Landlord shall be sued or named as a party in any suit
or action, and service of process shall not be made against any member of
Landlord except as may be necessary to secure jurisdiction of the limited
liability company. No partner, shareholder, director, employee, member or agent
of Landlord shall be required to answer or otherwise plead to any service of
process, and no judgment shall be taken or writ of execution levied against any
partner, shareholder, director, employee or agent of Landlord.

 

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34.3 Each of the covenants and agreements of this Article 34 shall be applicable
to any covenant or agreement either expressly contained in this Lease or imposed
by Applicable Laws and shall survive the expiration or earlier termination of
this Lease.
35. Project Control by Landlord.
35.1 Landlord reserves full control over the Building and the Project to the
extent not inconsistent with Tenant’s enjoyment of the Premises as provided by
this Lease. This reservation includes, without limitation, Landlord’s right to
subdivide the Project, convert the Building and other buildings within the
Project to condominium units, grant easements and licenses to third parties, and
maintain or establish ownership of the Building separate from fee title to the
Property.
35.2 Tenant shall, at Landlord’s request, promptly execute such further
documents as may be reasonably appropriate to assist Landlord in the performance
of its obligations hereunder; provided that Tenant need not execute any document
that creates additional liability for Tenant or that deprives Tenant of the
quiet enjoyment and use of the Premises as provided by this Lease.
35.3 Landlord may, at any and all reasonable times during non-Business Hours (or
during Business Hours if Tenant so requests), and upon no less than twenty-four
(24) hours’ prior notice (provided that no time restrictions shall apply or
advance notice be required if an emergency necessitates immediate entry), enter
the Premises to (a) inspect the same and to determine whether Tenant is in
compliance with its obligations hereunder, (b) supply any service Landlord is
required to provide hereunder, (c) show the Premises to prospective purchasers
or tenants during the final year of the Term, (d) post notices of
nonresponsibility, (e) access the telephone equipment, electrical substation and
fire risers and (f) alter, improve or repair any portion of the Building other
than the Premises for which access to the Premises is reasonably necessary. In
connection with any such alteration, improvement or repair as described in
Subsection 33.3(f) above, Landlord may erect in the Premises or elsewhere in the
Project scaffolding and other structures reasonably required for the alteration,
improvement or repair work to be performed. In no event shall Tenant’s Rent
abate as a result of Landlord’s activities pursuant to this Section 33.3;
provided, however, that all such activities shall be conducted in such a manner
so as to cause as little interference to Tenant as is reasonably possible.
Landlord shall at all times retain a key with which to unlock all of the doors
in the Premises. If an emergency necessitates immediate access to the Premises,
Landlord may use whatever force is necessary to enter the Premises, and any such
entry to the Premises shall not constitute a forcible or unlawful entry to the
Premises, a detainer of the Premises, or an eviction of Tenant from the Premises
or any portion thereof.
36. Quiet Enjoyment. So long as Tenant is not in default under this Lease,
Landlord or anyone acting through or under Landlord shall not disturb Tenant’s
occupancy of the Premises, except as permitted by this Lease.
37. Subordination and Attornment.
37.1 This Lease shall be subject and subordinate to the lien of any mortgage,
deed of trust, or lease in which Landlord is tenant now or hereafter in force
against the Building or the Project and to all advances made or hereafter to be
made upon the security thereof without the necessity of the execution and
delivery of any further instruments on the part of Tenant to effectuate such
subordination.
37.2 Notwithstanding the foregoing, Tenant shall promptly execute and deliver
upon demand such further instrument or instruments evidencing such subordination
of this Lease to the lien of any such mortgage or mortgages or deeds of trust or
lease in which Landlord is tenant as may be reasonably required by Landlord.
However, if any such mortgagee, beneficiary or Landlord under lease wherein
Landlord is tenant so elects, this Lease shall be deemed prior in lien to any
such lease, mortgage, or deed of trust upon or including the Premises regardless
of date and Tenant shall execute a statement in writing to such effect at
Landlord’s request. If Tenant fails to execute any document required from Tenant
under this Section within ten (10) days after written request therefor, Tenant
hereby constitutes and appoints Landlord or its special attorney-in-fact to
execute and deliver any such document or documents in the name of Tenant. Such
power is coupled with an interest and is irrevocable, provided that execution
and delivery of such document or documents would not have a material adverse
effect on Tenant’s operations at the Premises..

 

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37.3 Upon written request of Landlord and opportunity for Tenant to review,
Tenant agrees to execute any Lease amendments not materially altering the terms
of this Lease, if required by a mortgagee or beneficiary of a deed of trust
encumbering real property of which the Premises constitute a part incident to
the financing of the real property of which the Premises constitute a part.
Landlord shall reimburse Tenant for Tenant’s reasonable attorneys’ fees incurred
therewith, not to exceed One Thousand Five Hundred Dollars ($1,500). Any change
affecting the amount or timing of the consideration to be paid by Tenant or
modifying the term of this Lease shall be deemed as materially altering the
terms hereof.
37.4 In the event any proceedings are brought for foreclosure, or in the event
of the exercise of the power of sale under any mortgage or deed of trust made by
the Landlord covering the Premises, Tenant shall at the election of the
purchaser upon any such foreclosure or sale attorn to such purchaser and
recognize such purchaser as the Landlord under this Lease.
38. Surrender.
38.1 No surrender of possession of any part of the Premises shall release Tenant
from any of its obligations hereunder, unless such surrender is accepted in
writing by Landlord.
38.2 The voluntary or other surrender of this Lease by Tenant shall not effect a
merger with Landlord’s fee title or leasehold interest in the Premises, the
Building or the Property, unless Landlord consents in writing, and shall, at
Landlord’s option, operate as an assignment to Landlord of any or all subleases.
38.3 The voluntary or other surrender of any ground or other underlying lease
that now exists or may hereafter be executed affecting the Building or the
Project, or a mutual cancellation thereof or of Landlord’s interest therein by
Landlord and its lessor shall not effect a merger with Landlord’s fee title or
leasehold interest in the Premises, the Building or the Property and shall, at
the option of the successor to Landlord’s interest in the Building or the
Project, as applicable, operate as an assignment of this Lease.
39. Waiver and Modification. No provision of this Lease may be modified, amended
or supplemented except by an agreement in writing signed by Landlord and Tenant.
The waiver by Landlord of any breach by Tenant of any term, covenant or
condition herein contained shall not be deemed to be a waiver of any subsequent
breach of the same or any other term, covenant or condition herein contained.
40. Waiver of Jury Trial and Counterclaims. The parties waive trial by jury in
any action, proceeding or counterclaim brought by the other party hereto related
to matters arising out of or in any way connected with this Lease; the
relationship between Landlord and Tenant; Tenant’s use or occupancy of the
Premises, the Building or the Project; or any claim of injury or damage related
to this Lease or the Premises, the Building or the Project.
41. [Intentionally Omitted].
42. Hazardous Materials.
42.1 Tenant shall not cause or permit any Hazardous Materials (as hereinafter
defined) to be brought upon, kept or used in or about the Premises, the Building
or the Project in violation of Applicable Laws by Tenant, its agents, employees,
contractors or invitees. If Tenant breaches such obligation, or if the presence
of Hazardous Materials as a result of such a breach results in contamination of
the Premises, the Building, the Project or any adjacent property, or if
contamination of (a) the Building, the Project or any adjacent property by
Tenant or its agent, employees or invitees or (b) the Premises otherwise occurs
during the term of this Lease or any extension or renewal hereof or holding over
hereunder, then Tenant shall indemnify, save, defend and hold Landlord, its
agents and contractors harmless from and against any and all claims, judgments,
damages penalties, fines, costs, liabilities and losses (including, without
limitation, diminution in value of the Premises, the Building, the Project or
any portion thereof; damages for the loss or restriction on use of rentable or
usable space or of any amenity of the Premises or Project; damages arising from
any adverse impact on marketing of space in the Premises, the Building or the
Project; and sums paid in settlement of claims, attorneys’ fees, consultants’
fees and experts’ fees) that arise during or after the Term as a result of such
breach or contamination. This indemnification of Landlord by Tenant includes,
without limitation, costs incurred in connection with any investigation of site
conditions or any cleanup, remedial, removal or restoration work required by any
Governmental Authority because of Hazardous Materials present in the air, soil
or groundwater above, on or under the Premises. Without limiting the foregoing,
if the presence of any Hazardous Materials in, on, under or about the Premises,
the Building, the Project or any adjacent property caused or permitted by Tenant
results in any contamination of the Premises, the Building, the Project or any
adjacent property, then Tenant shall promptly take all actions at its sole cost
and expense as are necessary to return the Premises, the Building, the Project
and any adjacent property to their respective condition existing prior to the
time of such contamination; provided that Landlord’s written approval of such
action shall first be obtained, which approval Landlord shall not unreasonably
withhold; and provided, further, that it shall be reasonable for Landlord to
withhold its consent if such actions could have a material adverse long-term or
short-term effect on the Premises, the Building or the Project.

 

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42.2 Landlord acknowledges that it is not the intent of this Article 42 to
prohibit Tenant from operating its business as described in Section 2.10 above.
Tenant may operate its business according to the custom of Tenant’s industry so
long as the use or presence of Hazardous Materials is strictly and properly
monitored according to Applicable Laws.
42.3 Notwithstanding the provisions of Section 42.1 above, if (a) Tenant or any
proposed transferee, assignee or sublessee of Tenant has been required by any
prior landlord, Lender or Governmental Authority to take remedial action in
connection with Hazardous Materials contaminating a property if the
contamination resulted from such party’s action or omission or use of the
property in question or (ii) Tenant or any proposed transferee, assignee or
sublessee is subject to an enforcement order issued by any Governmental
Authority in connection with the use, disposal or storage of Hazardous
Materials, then Landlord shall have the right to terminate this Lease in
Landlord’s sole and absolute discretion (with respect to any such matter
involving Tenant), and it shall not be unreasonable for Landlord to withhold its
consent to any proposed transfer, assignment or subletting (with respect to any
such matter involving a proposed transferee, assignee or sublessee).
42.4 At any time, and from time to time, prior to the expiration of the Term,
Landlord shall have the right to conduct appropriate tests of the Premises, the
Building and the Project to demonstrate that Hazardous Materials are present or
that contamination has occurred due to Tenant or Tenant’s agents, employees or
invitees, if Landlord reasonably suspects that Hazardous Materials are present
or that such contamination has occurred. If Landlord reasonably determines that
Hazardous Materials are present or that contamination has occurred, Tenant shall
pay all reasonable costs of such tests of the Premises.
42.5 If underground or other storage tanks storing Hazardous Materials are
located on the Premises or are hereafter placed on the Premises by any party,
Tenant shall monitor the storage tanks, maintain appropriate records, implement
reporting procedures, properly close any underground storage tanks, and take or
cause to be taken all other steps necessary or required under the Applicable
Laws.
42.6 Tenant’s obligations under this Article 40 shall survive the expiration or
earlier termination of the Lease. During any period of time needed by Tenant or
Landlord after the termination of this Lease to complete the removal from the
Premises of any such Hazardous Materials, Tenant shall continue to pay Rent in
accordance with this Lease, which Rent shall be prorated daily.
42.7 As used herein, the term “Hazardous Material” means any hazardous or toxic
substance, material or waste that is or becomes regulated by any Governmental
Authority.
43. Right of First Offer. Tenant shall have a right of first offer (“ROFO”) as
to the approximately 3,441 square feet described on Exhibit F attached hereto
(the “Option Premises”). In the event Landlord intends to lease Option Premises,
Landlord shall provide written notice thereof to Tenant (the “Notice of Offer”).
43.1 Within ten (10) days following its receipt of the Notice of Offer, Tenant
shall advise Landlord in writing whether Tenant elects to lease the Option
Premises (the “Reply”). If Tenant fails to notify Landlord of Tenant’s election
within said ten (10) day period, then Tenant shall be deemed to have elected not
to lease the Option Premises. In such a case, or if Tenant notifies Landlord
that it will not lease the Option Premises, the ROFO shall expire and Landlord
may lease the Option Premises to another tenant.

 

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43.2 If Tenant timely notifies Landlord that Tenant elects to lease the Option
Premises, then Landlord and Tenant shall promptly enter into an amendment to
this Lease to add the Option Premises, with the term of the Option Premises
commencing no later than six (6) months after the date of the Notice of Offer.
Rent for the Option Premises shall be at the rates specified in this Lease for
the Premises (with the appropriate adjustment for Tenant’s Pro Rata Share), and
Tenant shall accept the Option Premises in their then-current, “as is”
condition..
43.3 [Intentionally omitted]
43.4 Notwithstanding anything in this Section 43 to the contrary, Tenant shall
not exercise the ROFO during any period of time that Tenant has committed a
default under this Lease that, in the absence of any cure periods, would
constitute a Default. Any attempted exercise of the ROFO during such a period of
time shall be void and of no effect. In addition, Tenant shall not be entitled
to exercise the ROFO if Landlord has given Tenant two (2) or more notices of
default by Tenant that, in the absence of any cure periods, would constitute a
Default, whether or not the defaults are cured, during the twelve (12) month
period prior to the date on which Tenant seeks to exercise the ROFO.
43.5 Notwithstanding anything in this Lease to the contrary, Tenant shall not
assign or transfer the ROFO, either separately or in conjunction with an
assignment or transfer of Tenant’s interest in the Lease, without Landlord’s
prior written consent, which consent Landlord may withhold in its sole and
absolute discretion.
44. End of Term.
44.1 The Premises shall at all times remain the property of Landlord and shall
be surrendered to Landlord upon the expiration or earlier termination of this
Lease. All trade fixtures, equipment, Tenant Improvements, Alterations and
Signage installed by or under Tenant shall be the property of Landlord.
45. Miscellaneous.
45.1 Where applicable in this Lease, the singular includes the plural and the
masculine or neuter includes the masculine, feminine and neuter. The section
headings of this Lease are not a part of this Lease and shall have no effect
upon the construction or interpretation of any part hereof.
45.2 Submission of this instrument for examination or signature by Tenant does
not constitute a reservation of or option for a lease, and shall not be
effective as a lease or otherwise until execution by and delivery to both
Landlord and Tenant.
45.3 Time is of the essence with respect to the performance of every provision
of this Lease in which time of performance is a factor.
45.4 Each provision of this Lease performable by Tenant shall be deemed both a
covenant and a condition.
45.5 Whenever consent or approval of either party is required, that party shall
not unreasonably withhold such consent or approval, except as may be expressly
set forth to the contrary.
45.6 The terms of this Lease are intended by the parties as a final expression
of their agreement with respect to the terms as are included herein, and may not
be contradicted by evidence of any prior or contemporaneous agreement.
45.7 Any provision of this Lease that shall prove to be invalid, void or illegal
shall in no way affect, impair or invalidate any other provision hereof, and all
other provisions of this Lease shall remain in full force and effect and shall
be interpreted as if the invalid, void or illegal provision did not exist.

 

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45.8 Neither party shall record this Lease. Tenant shall be responsible for the
cost of recording any memorandum of this Lease, including any transfer or other
taxes incurred in connection with said recordation.
45.9 The language in all parts of this Lease shall be in all cases construed as
a whole according to its fair meaning and not strictly for or against either
Landlord or Tenant.
45.10 Each of the covenants, conditions and agreements herein contained shall
inure to the benefit of and shall apply to and be binding upon the parties
hereto and their respective heirs; legatees; devisees; executors;
administrators; and permitted successors, assigns, sublessees. Nothing in this
Section 45.10 shall in any way alter the provisions of this Lease restricting
assignment or subletting.
45.11 Any notice, consent, demand, bill, statement or other communication
required or permitted to be given hereunder shall be in writing and shall be
given by personal delivery, overnight delivery with a reputable nationwide
overnight delivery service, or certified mail (return receipt requested), and if
given by personal delivery, shall be deemed delivered upon receipt; if given by
overnight delivery, shall be deemed delivered one (1) day after deposit with a
reputable nationwide overnight delivery service; and, if given by certified mail
(return receipt requested), shall be deemed delivered three (3) business days
after the time the notifying party deposits the notice with the United States
Postal Service. Any notices given pursuant to this Lease shall be addressed to
Tenant at the Premises, or to Landlord or Tenant at the addresses shown in
Sections 2.11 and 2.12, respectively. Either party may, by notice to the other
given pursuant to this Section, specify additional or different addresses for
notice purposes.
45.12 This Lease shall be governed by, construed and enforced in accordance with
the laws of the State in which the Premises are located, without regard to such
state’s conflict of law principles.
45.13 That individual or those individuals signing this Lease guarantee, warrant
and represent that said individual or individuals have the power, authority and
legal capacity to sign this Lease on behalf of and to bind all entities,
corporations, partnerships, limited liability companies, joint venturers or
other organizations and entities on whose behalf said individual or individuals
have signed.
45.14 To induce Landlord to enter into this Lease, Tenant agrees that it shall
promptly furnish to Landlord, from time to time, upon Landlord’s written
request, the most recent year-end financial statements (provided that Tenant
shall provide audited statements, if available) reflecting Tenant’s current
financial condition. Tenant represents and warrants that all financial
statements, records and information furnished by Tenant to Landlord in
connection with this Lease are true, correct and complete in all respects.
45.15 This Lease may be executed in one or more counterparts, each of which,
when taken together, shall constitute one and the same document.
45.16 [Intentionally omitted]
45.17 This Lease is subject to any recorded covenants, conditions or
restrictions on the Project or Property (the “CC&Rs”). Tenant shall comply with
the CC&Rs.
46. Options to Extend Term. Tenant shall have two (2) consecutive options (each,
an “Option”) to extend the Term of this Lease (and, upon the exercise of any
Option, the Term Expiration Date), for an additional five (5) years, as to the
entire Premises (and no less than the entire Premises) upon the following terms
and conditions:

 

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46.1 Any extension of the Term pursuant to any Option shall be on all the same
terms and conditions as this Lease, except as follows. Basic Annual Rent shall
be adjusted on the first (1st) day of each renewal term and each one (1)-year
anniversary date thereafter in accordance with Article 8. The Basic Annual Rent
during the first year of each renewal term shall equal the greater of: (a) Fair
Market Value for the renewal term and (b) one hundred three percent (103%) of
the then-current Basic Annual Rent at the end of the then-current Term. Basic
Annual Rent shall be subject to annual escalation as provided in Article 8
beginning on the first (1st) annual anniversary of the commencement date of the
respective Option period. “Fair Market Value” means the then-prevailing average
annual rate being charged for comparable space in comparable buildings
comparably located, taking into consideration all relevant factors, including,
without limitation, location in the Project, the proposed lease term, the
physical condition of the Premises (i.e., the existence of all the Tenant
Improvements and the assumption that such Tenant Improvements are fully suitable
and appropriate for the contemplated tenancy in their “as is” condition), the
extent of the services provided or to be provided to the Premises, the status as
a lease (as opposed to a sublease), contraction and expansion options, and the
cost of operating expenses, utilities and other charges imposed by Landlord. If
Landlord and Tenant cannot agree on the Fair Market Value for purposes of any
renewal term then they shall engage a mutually agreeable independent third party
appraiser with at least ten (10) years’ experience in appraising the rental
value of leased commercial premises (for office use) in the New York
metropolitan area (the “Appraiser”). If the parties cannot agree on the
Appraiser, each shall within fifteen (15) days after such impasse appoint an
Appraiser and, within fifteen (15) days after the appointment of both such
Appraisers, those two Appraisers shall select a third. If either party fails to
timely appoint an Appraiser, then the Appraiser the other party appoints shall
be the sole Appraiser. Within fifteen (15) days after appointment of all
Appraiser(s), Landlord and Tenant shall each simultaneously give the Appraisers
(with a copy to the other party) its determination of Fair Market Value, with
such supporting data or information as each submitting party determines
appropriate. Within ten (10) days after such submissions, the Appraisers shall
by majority vote select either Landlord’s or Tenant’s Fair Market Value. The
Appraisers may not select or designate any other Fair Market Value. The
determination of the Appraiser(s) shall bind the parties.
46.2 The Options are not assignable separate and apart from this Lease.
46.3 The Options are conditional upon Tenant giving Landlord written notice of
its election to exercise an Option at least three (3) months prior to the end of
the expiration of the initial term of this Lease (or the applicable extension of
such Term). TIME SHALL BE OF THE ESSENCE AS TO TENANT’S EXERCISE OF EACH OPTION.
Tenant assumes full responsibility for maintaining a record of the deadlines to
exercise either Option. Tenant acknowledges that it would be inequitable to
require Landlord to accept any exercise of any Option after the date provided
for in this paragraph.
46.4 Notwithstanding anything contained in this Article 46, Tenant shall not
have the right to exercise an Option:
(a) During the time commencing from the date Landlord delivers to Tenant a
written notice that Tenant is in default under any provisions of this Lease and
continuing until Tenant has cured the specified default to Landlord’s reasonable
satisfaction; or
(b) At any time after any Default as described in Article 27 of the Lease
(provided, however, that, for purposes of this Subsection 46.4(b), Landlord
shall not be required to provide Tenant with notice of such Default) and
continuing until Tenant cures any such Default, if such Default is susceptible
to being cured; or
(c) In the event that Tenant has defaulted in the performance of its obligations
under this Lease three (3) or more times and a service or late charge has become
payable under Section 25.1 for each of such defaults during the twelve
(12)-month period immediately prior to the date that Tenant intends to exercise
an Option, whether or not Tenant has cured such defaults.
46.5 The period of time within which Tenant may exercise an Option shall not be
extended or enlarged by reason of Tenant’s inability to exercise the Option
because of the provisions of Section 46.4.
46.6 All of Tenant’s rights under the provisions of the Options shall terminate
and be of no further force or effect even after Tenant’s due and timely exercise
of an Option if, after such exercise, but prior to the Term Commencement Date of
the new term, (a) Tenant fails to pay to Landlord a monetary obligation of
Tenant for a period of twenty (20) days after written notice from Landlord to
Tenant, (b) Tenant fails to commence to cure a default (other than a monetary
default) within thirty (30) days after the date Landlord gives notice to Tenant
of such default or (c) Tenant has defaulted under this Lease three (3) or more
times and a service or late charge under Section 27.1 has become payable for any
such default, whether or not Tenant has cured such defaults.

 

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47. [Intentionally omitted]
48. Authority. Tenant and each person executing this Lease on behalf of Tenant
hereby covenants and warrants that (a) Tenant is duly incorporated or otherwise
established or formed and validly existing under the laws of its state of
incorporation, establishment or formation, (b) Tenant has and is duly qualified
to do business in the state in which the Property is located, (c) Tenant has
full corporate, partnership, trust, association or other appropriate power and
authority to enter into this Amendment and to perform all Tenant’s obligations
hereunder, and (d) each person (and all of the persons if more than one signs)
signing this Lease on behalf of Tenant is duly and validly authorized to do so.
49. Confidentiality. Tenant shall not disclose any terms or conditions of this
Lease (including Rent), or give a copy of this Lease to any third party, and
Landlord shall not release to any third party any nonpublic financial
information or nonpublic information about Tenant’s ownership structure that
Tenant gives Landlord, except: (a) if required by Law or in any judicial
proceeding, provided that the releasing party has given the other party
reasonable notice of such requirement, if feasible; (b) to a party’s attorneys,
accountants, brokers, and other bona fide consultants or advisers, provided they
agree to be bound by this paragraph; or (c) to bona fide prospective assignees
or subtenants of this Lease, provided they agree in writing to be bound by this
paragraph.
50. Odors and Exhaust. Tenant acknowledges that Landlord would not enter into
this Lease with Tenant unless Tenant assured Landlord that under no
circumstances will any other occupants of the Building or Project (including
persons legally present in any outdoor areas of the Project) be subjected to
odors or fumes (whether or not noxious), and the Building and Project will not
be damaged by any exhaust, from Tenant’s operations. Landlord and Tenant
therefore agree as follows:
50.1 Tenant shall not cause or permit (or conduct any activities that would
cause) any release of any odors or fumes of any kind from the Premises.
50.2 If the Building has a ventilation system that in Landlord’s judgment is
adequate, suitable, and appropriate to vent the Premises in a manner that does
not release odors affecting any indoor or outdoor part of the Project, Tenant
shall vent the Premises through such system. If Landlord at any time determines
that any existing ventilation system is inadequate, or if no ventilation system
exists, Tenant shall in compliance with Applicable Law vent all fumes and odors
from the Premises (and remove odors from Tenant’s exhaust stream) as Landlord
requires. The placement and configuration of all ventilation exhaust pipes,
louvers, and other equipment shall be subject to Landlord’s approval. Tenant
acknowledges Landlord’s legitimate desire to maintain the Project (indoor and
outdoor areas) in an odor-free manner, and Landlord may require Tenant to abate
and remove all odors in a manner that goes beyond the requirements of Applicable
Laws.
50.3 Tenant shall, at Tenant’s sole cost and expense, provide odor eliminators
and other devices (such as filters, air cleaners, scrubbers, and whatever other
equipment may in Landlord’s judgment be necessary or appropriate from time to
time) to completely remove, eliminate, and abate any odors, fumes, or other
substances in Tenant’s exhaust stream that, in Landlord’s judgment, emanate from
Tenant’s Premises. Any work Tenant performs under this paragraph shall
constitute Alterations.
50.4 Tenant’s responsibility to remove, eliminate, and abate odors, fumes, and
exhaust shall continue throughout the Term. Landlord’s approval of the Tenant
Improvements shall not preclude Landlord from requiring additional measures to
eliminate odors, fumes, and other adverse impacts of Tenant’s exhaust stream (as
Landlord may designate in Landlord’s discretion). Tenant shall install
additional equipment as Landlord requires from time to time under the preceding
sentence. Such installations shall constitute Alterations.
50.5 If Tenant fails to install satisfactory odor control equipment within ten
(10) business days after Landlord’s demand made at any time, then Landlord may,
without limiting Landlord’s other rights and remedies, require Tenant to cease
and suspend any operations in the Premises that, in Landlord’s determination,
cause odors, fumes, or exhaust. For example, if Landlord determines that
Tenant’s production of a certain type of product causes odors, fumes, or
exhausts and Tenant does not install satisfactory odor control equipment within
ten (10) business days after Landlord’s request, then Landlord may require
Tenant to stop producing such type of product in the Premises unless and until
Tenant has installed odor control equipment satisfactory to Landlord.

 

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51. HVAC. For the Premises, Landlord shall (a) maintain and operate the heating,
ventilating and air conditioning systems (“HVAC”) and (b) furnish HVAC as
reasonably required (except as this Lease otherwise provides or as to any
special requirements that arise from Tenant’s particular use of the Premises)
for reasonably comfortable occupancy of the Premises twenty-four (24) hours a
day, 365 or 366 days a year, provided Tenant complies with the next sentence. If
Tenant will require HVAC outside the Business Hours of business days (as
reasonably designated by Landlord) in the Premises (“Overtime HVAC”), Landlord
shall be obligated to provide Overtime HVAC only if Tenant requests it by 4 p.m.
on the immediately preceding business day. Tenant shall pay Landlord, as
Additional Rent, one hundred percent (100%) of Landlord’s actual total cost of
delivering steam and chilled water for (y) the Premises for Overtime HVAC and
(z) the computer server room. That actual total cost shall be determined based
upon Landlord’s established mathematical model set forth in Exhibit I.
Notwithstanding anything to the contrary in this paragraph, Landlord shall have
no liability, and Tenant shall have no right or remedy, on account of any
interruption or impairment in HVAC services, provided that Landlord diligently
endeavors to cure any such interruption or impairment.
52. Excavation. If an excavation shall be made upon land adjacent to or under
the Building, or shall be authorized to be made, Tenant shall afford to the
person causing or authorized to cause such excavation, license to enter the
Premises for the purpose of performing such work as said person shall deem
necessary or desirable to preserve and protect the Building from injury or
damage and to support the same by proper foundations, without any claim for
damages or liability against Landlord and without reducing or otherwise
affecting Tenant’s obligations under this lease.
53. [Intentionally omitted]
54. Names. Landlord reserves the right to change the name of the Project or the
Building in its sole discretion.
55. Landmark Rider. The attached Landmark Rider (the “Rider”) is incorporated by
reference in and is a part of the foregoing Lease. Notwithstanding anything to
the contrary in the foregoing Lease, the provisions of the Rider shall govern
the foregoing Lease and supersede all inconsistent provisions in such Lease.
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IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the date
first above written.
LANDLORD:
BMR-LANDMARK AT EASTVIEW LLC,
a Delaware limited liability company

         
By:
                 
Name:
                 
Title:
                 

TENANT:
EPICEPT CORPORATION,
a Delaware corporation

         
By:
                 
Name:
                 
Title:
                 

 

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LANDMARK RIDER
The following provisions constitute the Landmark Rider, as referred to in the
foregoing Lease.
56. Conditional Limitation. In addition to Landlord’s other rights and remedies
under this Lease, if any Default occurs, then Landlord may serve upon Tenant a
five-day notice of cancellation and termination of this Lease. Upon the
expiration of such five-day period, this Lease and the Term shall automatically
and without any action by anyone terminate, expire, and come to an end, by the
mere lapse of time and by the express terms of this Lease, as fully and
completely as if the expiration of such five-day period were the Term Expiration
Date. The passage of such five-day period constitutes the limit beyond which
Tenant’s tenancy no longer exists, and no longer can exist. Upon the mere
occurrence of the passage of five days after Landlord’s notice of cancellation
and termination, this Lease shall automatically expire by its express terms. No
re-entry or other act shall be necessary to terminate this Lease. This paragraph
establishes a conditional limitation and not a condition subsequent, but does
not limit Landlord’s other rights or remedies under this Lease or applicable
law.
57. Delivery of Premises. Tenant waives the provisions of New York Real Property
Law (the “RPL”) § 223-a. The provisions of this Lease on Landlord’s delivery of
the Premises constitute “an express provision to the contrary” under RPL §
223-a.
58. Casualty. The provisions of this Lease on casualty are an express agreement
as to damage or destruction of the Premises by fire or other casualty. RPL §
227, providing for such a contingency absent an express agreement, shall not
apply.
59. Window Cleaning. Tenant shall not clean, nor require, permit, suffer or
allow any window in the Premises to be cleaned, from the outside in violation of
Labor Law § 202, or any other Law, including the rules of the Board of Standards
and Appeals.
60. Statutory Right of Redemption. Tenant specifically waives the right of
redemption provided for in Real Property Actions and Proceedings Law (“RPAPL”) §
761.
61. Security. To the extent General Obligations Law (“GOL”) § 7-103 requires:
(a) Landlord shall deposit any cash Security Deposit in an account maintained
with a banking organization within New York State, which account shall earn
interest at the prevailing rate earned by other such deposits made with banking
organizations in the municipality where the Project is located; (b) Landlord
shall notify Tenant of the name and address of the banking organization in which
Landlord deposits the Security Deposit; (c) Landlord may receive, as
administration expenses, a sum equivalent to 1% per annum upon the Security
Deposit, in lieu of all other administrative and custodial expenses (provided
that, in the event that the Security Deposit accrues less than one (1%) interest
during any year (before taking into account Landlord’s administrative fee),
Landlord’s administrative fee under this paragraph for such year shall be equal
to the amount of such interest); and (d) the balance of the interest paid by the
banking organization shall be the money of Tenant and shall be held in trust by
Landlord until repaid, applied to pay Rent, or annually paid to Tenant.
62. Acceptance of Rent. If Landlord accepts any payment from Tenant after the
Term expires, then Landlord shall credit such payment against any damages that
Tenant may become obligated to pay Landlord. By accepting any such payment,
Landlord shall not be deemed to have agreed to continue Tenant’s tenancy or to
accept Tenant as a month-to-month tenant of the Premises or as a tenant on any
other basis. This paragraph constitutes “an agreement . . . providing otherwise”
within the meaning of RPL § 232-c.
63. Consumer Contract Statutes. Tenant acknowledges that this Lease is not
entered into for personal, family or household purposes, and therefore GOL §
5-327 (and any other law whose effect is limited to transactions entered into
for personal, family, or household purposes) has no application to this Lease.
64. Waiver of Stay. Tenant expressly waives, for every tenant party, any rights
under Civil Practice Law and Rules § 2201, in connection with any holdover
proceeding or other action or proceeding about this Lease or Tenant’s rights as
a tenant of the Building.

 

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65. No Implied Consent to Remaining in Possession. Notwithstanding anything to
the contrary in RPAPL § 711(2) or any other Applicable Law or rule of procedure,
Landlord’s acceptance of any partial payment on account of Rent, even if
acknowledged in writing, shall not be deemed to constitute Landlord’s “express
consent in writing to permit the tenant to continue in possession” as referred
to in RPAPL § 711(2). Landlord shall not be deemed to have granted such “express
consent in writing to permit the tenant to continue in possession” unless such
alleged written consent by Landlord expressly refers to RPAPL § 711(2) and
expressly states (i.e., contains substantially the following words): “Landlord
consents to Tenant’s remaining in possession notwithstanding nonpayment of
Rent.”

 

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EXHIBIT A
PREMISES

 

A-1

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EXHIBIT B
ACKNOWLEDGEMENT OF TERM COMMENCEMENT DATE
AND TERM EXPIRATION DATE
THIS ACKNOWLEDGEMENT OF TERM COMMENCEMENT DATE AND TERM EXPIRATION DATE is
entered into as of [                    ], 20[     ], with reference to that
certain Lease (the “Lease”) dated as of August 28, 2006, by EPICEPT CORPORATION,
a Delaware corporation (“Tenant”), in favor of BMR-LANDMARK AT EASTVIEW LLC, a
Delaware limited liability company (“Landlord”). All capitalized terms used
herein without definition shall have the meanings ascribed to them in the Lease.
Tenant hereby confirms the following:
1. Tenant accepted possession of the Premises on [                    ],
20[     ].
2. The Premises are in good order, condition and repair.
3. The Tenant Improvements required to be constructed by Landlord under the
Lease have been substantially completed.
4. All conditions of the Lease to be performed by Landlord as a condition to the
full effectiveness of the Lease have been satisfied, and Landlord has fulfilled
all of its duties in the nature of inducements offered to Tenant to lease the
Premises.
5. In accordance with the provisions of Section 4.2 of the Lease, the “Term
Commencement Date” is [                    ], 20[     ], and, unless the Lease
is terminated prior to the Term Expiration Date pursuant to its terms, the “Term
Expiration Date” shall be [                    ], 20[     ].
6. Tenant commenced occupancy of the Premises for the Permitted Use on
[                    ], 20[     ].
7. The Lease is in full force and effect, and the same represents the entire
agreement between Landlord and Tenant concerning the Premises[, except
[                    ]].
8. Tenant has no existing defenses against the enforcement of the Lease by
Landlord, and there exist no offsets or credits against Rent owed or to be owed
by Tenant.
9. The obligation to pay Rent is presently in effect and all Rent obligations on
the part of Tenant under the Lease commenced to accrue on
[                    ], 20[     ].
10. The undersigned Tenant has not made any prior assignment, transfer,
hypothecation or pledge of the Lease or of the rents thereunder or sublease of
the Premises or any portion thereof.
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B-1

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IN WITNESS WHEREOF, the parties hereto have executed this Acknowledgment of Term
Commencement Date and Term Expiration Date as of [                    ],
20[     ].
TENANT:
EPICEPT CORPORATION,
a [                    ] corporation

         
By:
                 
Name:
                 
Title:
                 

 

B-2

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EXHIBIT C
TENANT’S PERSONAL PROPERTY

 

C-1

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EXHIBIT D
RULES AND REGULATIONS
NOTHING IN THESE RULES AND REGULATIONS (“RULES AND REGULATIONS”) SHALL SUPPLANT
ANY PROVISION OF THE LEASE. IN THE EVENT OF A CONFLICT OR INCONSISTENCY BETWEEN
THESE RULES AND REGULATIONS AND THE LEASE, THE LEASE SHALL PREVAIL.
1. Except as specifically provided in the Lease to which these Rules and
Regulations are attached, no sign, placard, picture, advertisement, name or
notice shall be installed or displayed on any part of the outside of the
Premises or the Building without Landlord’s prior written consent. Landlord
shall have the right to remove, at Tenant’s sole cost and expense and without
notice, any sign installed or displayed in violation of this rule.
2. If Landlord objects in writing to any curtains, blinds, shades, screens or
hanging plants or other similar objects attached to or used in connection with
any window or door of the Premises or placed on any windowsill, which window,
door or windowsill is (a) visible from the exterior of the Premises and (b) not
included in plans approved by Landlord, then Tenant shall promptly remove said
curtains, blinds, shades, screens or hanging plants or other similar objects at
its sole cost and expense.
3. Tenant shall not obstruct any sidewalks or entrances to the Building, or any
halls, passages, exits, entrances or stairways within the Premises, in any case
that are required to be kept clear for health and safety reasons.
4. No deliveries shall be made that impede or interfere with other tenants in or
the operation of the Project.
5. Tenant shall not place a load upon any floor of the Premises that exceeds the
load per square foot that (a) such floor was designed to carry or (b) that is
allowed by Applicable Laws. Fixtures and equipment that cause noises or
vibrations that may be transmitted to the structure of the Building to such a
degree as to be objectionable to other tenants shall be placed and maintained by
Tenant, at Tenant’s sole cost and expense, on vibration eliminators or other
devices sufficient to eliminate such noises and vibrations to levels reasonably
acceptable to Landlord and other tenants of the Building.
6. Tenant shall not use any method of heating or air conditioning other than
that shown in the Tenant Improvement plans.
7. Tenant shall not install any radio, television or other antenna, cell or
other communications equipment, or any other devices on the roof or exterior
walls of the Premises except to the extent shown on approved Tenant Improvements
plans. Tenant shall not interfere with radio, television or other communications
from or in the Premises or elsewhere.
8. Canvassing, peddling, soliciting and distributing handbills or any other
written material within, on or around the Project (other than within the
Premises) are prohibited, and Tenant shall cooperate to prevent such activities.
9. Tenant shall store all of its trash, garbage and Hazardous Materials within
its Premises or in designated receptacles outside of the Premises. Tenant shall
not place in any such receptacle any material that cannot be disposed of in the
ordinary and customary manner of trash, garbage and Hazardous Materials
disposal.
10. The Premises shall not be used for any improper, immoral or objectionable
purpose. No cooking shall be done or permitted on the Premises; provided,
however, that Tenant may use (a) equipment approved in accordance with the
requirements of insurance policies that Landlord or Tenant is required to
purchase and maintain pursuant to the Lease for brewing coffee, tea, hot
chocolate and similar beverages, (b) microwave ovens for employees’ use and
(c) equipment shown on Tenant Improvement plans approved by Landlord; provided,
further, that any such equipment and microwave ovens are used in accordance with
Applicable Laws.

 

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11. Tenant shall not, without Landlord’s prior written consent, use the name of
the Project, if any, in connection with or in promoting or advertising Tenant’s
business except as Tenant’s address.
12. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any Governmental
Authority.
13. Tenant assumes any and all responsibility for protecting the Premises from
theft, robbery and pilferage, which responsibility includes keeping doors locked
and other means of entry to the Premises closed.
14. Landlord may waive any one or more of these Rules and Regulations for the
benefit of Tenant or any other tenant, but no such waiver by Landlord shall be
construed as a waiver of such Rules and Regulations in favor of Tenant or any
other tenant, nor prevent Landlord from thereafter enforcing any such Rules and
Regulations against any or all of the tenants of the Project, including Tenant.
15. These Rules and Regulations are in addition to, and shall not be construed
to in any way modify or amend, in whole or in part, the terms covenants,
agreements and conditions of the Lease.
16. Landlord reserves the right to make such other and reasonable rules and
regulations as, in its judgment, may from time to time be needed for safety and
security, the care and cleanliness of the Project, or the preservation of good
order therein; provided, however, that Landlord shall provide written notice to
Tenant of such rules and regulations prior to them taking effect. Tenant agrees
to abide by these Rules and Regulations and any additional rules and regulations
issued or adopted by Landlord.
17. Tenant shall be responsible for the observance of these Rules and
Regulations by Tenant’s employees, agents, clients, customers, invitees and
guests.

 

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EXHIBIT E
FORM OF ESTOPPEL CERTIFICATE

     
To:
  BMR-LANDMARK AT EASTVIEW LLC
17140 Bernardo Center Drive, Suite 222
San Diego, CA 92128
Attention: General Counsel/Real Estate
 
   
 
  BioMed Realty, L.P.
c/o BioMed Realty Trust, Inc.
17140 Bernardo Center Drive, Suite 222
San Diego, CA 92128
 
   
Re:
  Suite [     ] (the “Premises”) at 777 Old Saw Mill River Road in Tarrytown,
New York (the “Property”)

The undersigned tenant (“Tenant”) hereby certifies to you as follows:
1. Tenant is a tenant at the Property under a lease (the “Lease”) for the
Premises dated as of [                    ], 2006. The Lease has not been
cancelled, modified, assigned, extended or amended [except as follows:
[                    ]], and there are no other agreements, written or oral,
affecting or relating to Tenant’s lease of the Premises or any other space at
the Property. The lease term expires on [                    ], 20[     ].
2. Tenant took possession of the Premises, currently consisting of
[                    ] square feet, on [                    ], 20[     ], and
commenced to pay rent on [                    ], 20[     ]. Tenant has full
possession of the Premises, has not assigned the Lease or sublet any part of the
Premises, and does not hold the Premises under an assignment or sublease[,
except as follows: [                    ]].
3. All base rent, rent escalations and additional rent under the Lease have been
paid through [                    ], 20[     ]. There is no prepaid rent[,
except $[                    ]][, and the amount of security deposit is
$[                    ] [in cash][in the form of a letter of credit]]. Tenant
currently has no right to any future rent abatement under the Lease (except with
respect to the period prior to the Rent Commencement Date (as defined in the
Lease) and only to the extent provided for in the Lease).
4. Base rent is currently payable in the amount of $[                    ] per
month.
5. Tenant is currently paying estimated payments of additional rent of
$[                    ] per month on account of real estate taxes, insurance,
management fees and common area maintenance expenses.
6. All work to be performed for Tenant under the Lease has been performed as
required under the Lease and has been accepted by Tenant[, except
[                    ]], and all allowances to be paid to Tenant, including
allowances for tenant improvements, moving expenses or other items, have been
paid.
7. The Lease is in full force and effect, free from default and free from any
event that could become a default under the Lease, and Tenant has no claims
against the landlord or offsets or defenses against rent, and there are no
disputes with the landlord. Tenant has received no notice of prior sale,
transfer, assignment, hypothecation or pledge of the Lease or of the rents
payable thereunder[, except [                    ]].
8. [Tenant has the following expansion rights or options for the Property:
[                    ].][Tenant has no rights or options to purchase the
Property.]
9. To Tenant’s knowledge, no hazardous wastes have been generated, treated,
stored or disposed of by or on behalf of the Tenant in, on or around the
Premises or the Project in violation of any environmental laws.

 

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10. The undersigned has executed this Estoppel Certificate with the knowledge
and understanding that [INSERT NAME OF LANDLORD, PURCHASER OR LENDER, AS
APPROPRIATE] or its assignee is acquiring the Property in reliance on this
certificate and that the undersigned shall be bound by this certificate. The
statements contained herein may be relied upon by [INSERT NAME OF PURCHASER OR
LENDER, AS APPROPRIATE], BMR-Landmark at Eastview LLC, BioMed Realty, L.P.,
BioMed Realty Trust, Inc., and any mortgagee of the Property and their
respective successors and assigns.
Any capitalized terms not defined herein shall have the respective meanings
given in the Lease.
Dated this [     ] day of [                    ], 20[     ].

              [                    ],     a [                    ]
 
       
 
  By:              
 
  Name:              
 
  Title:              

 

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EXHIBIT F
OPTION PREMISES

 

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EXHIBIT G
WORK LETTER
This Landlord’s Work Letter (the “Work Letter”) is made and entered into as of
the 28th day of August, 2006, by and between BMR-LANDMARK AT EASTVIEW LLC, a
Delaware limited liability company (“Landlord”), and EPICEPT CORPORATION, a
Delaware corporation (“Tenant”), and is attached to and made a part of that
certain Lease dated as of August 28, 2006 (the “Lease”), by and between Landlord
and Tenant for the Premises located at 777 Old Saw Mill River Road in Tarrytown,
New York. All capitalized terms used but not otherwise defined herein shall have
the meanings given them in the Lease.
1. General Requirements.
1.1. Tenant’s Authorized Representative. Tenant designates Silvia Malave
(“Tenant’s Authorized Representative”) as the person authorized to initial all
plans, drawings, changes orders and approvals pursuant to this Work Letter.
Landlord shall not be obligated to respond to or act upon any such item until
such item has been initialed by Tenant’s Authorized Representative. Neither
Tenant nor Tenant’s Authorized Representative shall be authorized to direct
Landlord’s contractors in the performance of Landlord’s Work (as defined below).
1.2. Schedule. The schedule for design and development of Landlord’s Work (as
defined below), including, without limitation, the time periods for preparation
and review of construction documents, approvals and performance, shall be in
accordance with that certain schedule prepared by Landlord and Tenant attached
as Exhibit A to this Work Letter (the “Schedule”). The Schedule shall be subject
to adjustment as mutually agreed upon in writing by the parties, or as provided
in this Work Letter.
1.3. Architects and Consultants. The architect, engineering consultants, design
team, general contractor and subcontractors responsible for the construction of
Landlord’s Work shall be selected by Landlord and approved by Tenant. Tenant’s
approval of the same shall not be unreasonably withheld. Tenant hereby approves
of MSC Group as Landlord’s architect and Landlord acting as its own general
contractor.
2. Landlord’s Work.
2.1. Landlord’s Work Plans. All Tenant Improvements shall be performed by
Landlord (“Landlord’s Work”) at Landlord’s sole cost and expense (except for
Tenant’s Portion) and in accordance with the Approved Plans (as defined below).
The quality of Landlord’s Work shall be of a nature and character not less than
(a) the quality of the tenant improvements in place at the Building and the
Project as of the date of the Lease and (b) the Building Standard. The design
drawings, plans and specifications listed on Schedule 2.1 to this Work Letter
(the “Landlord’s Work Plans”) are the initial list of plans that Landlord shall
develop and submit to Tenant for approval. Landlord shall prepare and submit to
Tenant for approval schematics covering Landlord’s Work prepared in conformity
with the applicable provisions of this Work Letter (the “Draft Plans”). The
Draft Plans shall contain sufficient information and detail to accurately
describe Landlord’s proposed design to Tenant and such other information as
Tenant may reasonably request. Tenant shall be solely responsible for ensuring
that the Landlord’s Work Plans and the Draft Plans satisfy Tenant’s requirements
for the Tenant Improvements.
2.2. Tenant Approval of Plans. Tenant shall notify Landlord in writing within
five (5) business days after receipt of the Draft Plans whether Tenant approves
or objects to the Draft Plans and of the manner, if any, in which the Draft
Plans are unacceptable. Tenant shall not object to any Draft Plans that satisfy
the requirements set forth in Section 2.1. If Tenant properly objects to the
Draft Plans, then Landlord shall revise the Draft Plans and cause Tenant’s
objections to be remedied in the revised Draft Plans. Landlord shall then
resubmit the revised Draft Plans to Tenant for approval. Tenant’s approval of or
objection to the revised Draft Plans and Landlord’s correction of the same shall
be in accordance with this Section 2.2, until Tenant has approved the Draft
Plans in writing. The iteration of the Draft Plans that is approved by Tenant
without objection shall be referred to herein as the “Approved Plans.”

 

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2.3. Completion of Landlord’s Work. Landlord shall perform and complete
Landlord’s Work (a) in strict conformance with the Approved Plans, except for
Minor Variations (as defined below), (b) otherwise in compliance with the Lease
and (c) in accordance with Applicable Laws, Landlord’s insurance carriers and
the board of fire underwriters having jurisdiction over the Project and the
Premises.
2.4. Conditions to Performance of Landlord’s Work. Prior to the commencement of
Landlord’s Work, Landlord shall submit to Tenant for Tenant’s approval (which
approval Tenant shall not unreasonably withhold) a list (the “Contractor List”)
of project managers, contractors and subcontractors that will perform Landlord’s
Work. Tenant shall give Landlord notice in writing of its approval or
disapproval of the Contractor List with five (5) business days after Tenant’s
receipt of the same. If Tenant properly disapproves of one or more parties on
the Contractor List, Landlord shall revise the Contractor List and resubmit the
same to Tenant for Tenant’s approval in accordance with the preceding two
sentences.
2.5. Requests for Consent. Tenant shall respond to all requests for consents,
approvals or directions made by Landlord pursuant to this Work Letter within
five (5) business days following Tenant’s receipt of such request. Tenant’s
failure to respond within such five (5) business day period shall be deemed
approval by Tenant.
3. Each Party’s Obligations. Each of Landlord and Tenant shall perform promptly
such of its obligations contained in this Work Letter as are to be performed by
it. Tenant shall also observe and perform all of its obligations under this
Lease from the Term Commencement Date. The parties acknowledge that the Approved
Budget, the Approved Plans and the Contractor’s List must be completed and
approved not later than September 15, 2006, in order for the Tenant Improvements
to be Substantially Complete by November 27, 2006.
4. Completion of Landlord’s Construction Obligations. The date on which
Landlord’s Work is Substantially Complete shall be referred to as the “TI
Substantial Completion Date.” Tenant shall accept the Premises in the condition
in which they exist as of the TI Substantial Completion Date. Tenant’s taking
possession and acceptance of the Premises shall not constitute a waiver of any
warranty of any construction defect in regard to workmanship (including
installation of equipment) or materials (exclusive of equipment provided by
manufacturers) of the Premises completed by or on behalf of Landlord, any
noncompliance of Landlord’s Work with Applicable Laws, or the failure of
Landlord’s Work to be completed substantially in accordance with the Approved
Plans (subject to Minor Variations and such other Changes as are permitted
hereunder). Tenant shall have until six (6) months after the TI Substantial
Completion Date within which to notify Landlord of any such construction defect
or non-compliance with Approved Plans discovered by Tenant, and Landlord shall
use reasonable efforts to cause the applicable contractor to remedy any such
construction defect or non-compliance within thirty (30) days thereafter.
Notwithstanding the foregoing, Landlord shall not be in default under the Lease
if (a) by the nature of such defect or noncompliance, more than thirty (30) days
are required to correct and remedy such construction defect or noncompliance and
Landlord commences its remedial action within such thirty (30) day period and
thereafter diligently and continuously prosecutes such curative and remedial
action to completion or (b) the applicable contractor, despite Landlord’s
efforts, fails to remedy such defect or non-compliance within such thirty
(30) day period, but Landlord otherwise, at Landlord’s expense with respect to
any such construction defect or noncompliance with Approved Plans, thereafter
commences remedial action diligently and continuously prosecutes such curative
and remedial action to completion. Tenant shall be entitled to receive the
benefit of all construction warranties and manufacturer’s equipment warranties
relating to equipment installed in the Premises. If requested by Tenant,
Landlord shall attempt to obtain extended warranties from manufacturers and
suppliers of such equipment, but the cost of any such extended warranties shall
be borne solely by Tenant. Landlord shall diligently pursue any claims arising
out of latent defects in the Landlord’s Work. Landlord shall promptly undertake
and complete, or cause to be completed, all punch list items. Landlord shall be
responsible for obtaining a certificate of occupancy for the Premise Tenant
after completion of Landlord’s Work.
5. Insurance. Prior to commencing Landlord’s Work, Landlord shall provide, or
shall cause Landlord’s contractors and subcontractors to provide, to Tenant, in
addition to any insurance required of Landlord pursuant to the Lease, the
following types of insurance in the following amounts, upon the following terms
and conditions:
5.1. Builders’ All-Risk Insurance. At all times during the period beginning with
commencement of construction of Landlord’s Work and ending with final completion
of Landlord’s Work, Landlord shall maintain, or cause to be maintained, casualty
insurance in Builder’s All Risk Form, insuring Tenant and each of Landlord’s
contractors, as their interests may appear.

 

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5.2. Workers’ Compensation. At all times during the period of construction of
Landlord’s Work, Landlord shall, or shall cause its contractors or
subcontractors to, maintain statutory Workers’ Compensation insurance as
required by Applicable Laws.
6. Tenant Improvement Allowance.
6.1. Application of Tenant Improvement Allowance. All costs, expenses and fees
incurred by or on behalf of Landlord to any third-party arising from, out of, or
in connection with the Tenant Improvements (collectively, the “Costs”) shall
first be deducted by Landlord from the Tenant Improvement Allowance (except as
provided in Sections 8.1(a) and 8.2. If at any time Landlord reasonably
determines that Tenant is liable for any Tenant’s Portion, then Tenant shall
deposit in an escrow account bearing interest in favor of Tenant, pursuant to
escrow instructions acceptable to Landlord, and as a condition precedent to
Landlord’s obligation to complete the Tenant Improvements, one hundred percent
(100%) of the then-current Tenant’s Portion. If Tenant fails to deposit, or is
late in depositing, any sum due to Landlord under this Work Letter, Landlord
shall have all of the rights and remedies set forth in the Lease for nonpayment
of Rent (including, but not limited to, the right to interest at the Default
Rate and the right to assess a late charge), and for purposes of any litigation
instituted with regard to such amounts the same will be considered Rent. Funds
so deposited in escrow by Tenant shall be disbursed to pay for Costs in excess
of the Tenant Improvement Allowance following disbursement by Landlord of the
full amount of the Tenant Improvement Allowance, and any amount on deposit in
escrow that is not required to pay any such excess Costs following the final
completion of the Landlord’s Work (including all punch list items) shall be
promptly returned to Tenant. Landlord shall contribute the Tenant Improvement
Allowance toward the costs and expenses incurred in connection with the
performance of Landlord’s Work in accordance with the terms and provisions of
the Lease.
6.2. Approval of Budget for Landlord’s Work. Notwithstanding anything to the
contrary set forth elsewhere in this Work Letter or the Lease, Landlord shall
not have any obligation to commence construction of the Tenant Improvements or
to advance any portion of the Tenant Improvement Allowance until Tenant shall
have approved in writing the budget for the Landlord’s Work (the “Approved
Budget”) and the Approved Plans. Landlord shall not be obligated to pay for
costs or expenses relating to Landlord’s Work that exceed either (a) the amount
of the Tenant Improvement Allowance (other than pursuant to Section 7.2) or
(b) the Approved Budget, either on a line item or overall basis, and all such
costs and expenses shall be paid by Tenant pursuant to Section 6.3.
6.3. Cost Statements. Each month Landlord shall prepare, approve and submit to
Tenant (a) a statement setting forth the total amount of Costs expended and the
total amount applied against the Tenant Improvement Allowance and the total
amount funded from the escrow (if any) described in Section 6.1, and (b) a
detailed summary of the Landlord’s Work performed using AIA standard form
Application for Payment (G 702) executed by the general contractor and by the
architect).
6.4. Application of the Tenant Improvement Allowance. Landlord may apply the
Tenant Improvement Allowance for the payment of Costs of the Tenant Improvements
within the Premises (including, without limitation, construction of standard
laboratory improvements; finishes; building fixtures; building permits; and
architectural, engineering, design and consulting fees), in each case as
reflected in the Approved Budget and the Approved Plans and for any Minor
Variations. In no event shall the Tenant Improvement Allowance be applied to any
costs of the Tenant Improvements relating to the purchase of any furniture,
personal property or other non-building system equipment.
7. Changes. Any changes to Landlord’s Work (each, a “Change”) requested by
Landlord or Tenant after Tenant approves the Approved Plans in writing shall be
requested and instituted in accordance with the provisions of this Section 7 and
shall be subject to the reasonable written approval of the other party, except
for any Minor Variations.

 

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7.1. Changes Requested by Landlord.
(a) Landlord may request Changes after Tenant approves the Approved Plans by
notifying Tenant thereof in writing in substantially the same form as the AIA
standard change order form (a “Landlord Change Order Request”), which Landlord
Change Order Request shall detail the nature and extent of any requested
Changes. If the nature of a Change requires revisions to the Approved Plans,
then Landlord shall be solely responsible for the cost and expense of such
revisions (except for Minor Variations).
(b) Tenant shall approve or reject any Landlord Change Order Requests in
accordance with the procedures established pursuant to Section 2. If Tenant does
not approve in writing a Landlord Change Order Request, then such Landlord
Change Order Request shall be deemed rejected by Tenant, and Landlord shall not
be permitted to alter Landlord’s Work as contemplated by such Landlord Change
Order Request.
(c) In recognition and consideration of the fact that the Premises and Tenant
Improvements have not been constructed as of the date hereof, it is hereby
agreed by the parties hereto that the Landlord may make Minor Variations (as
herein defined) in the size, design, engineering, configuration and siting of
Landlord’s Work, and such Minor Variations shall not render the Lease void or
voidable, nor shall any such Minor Variations entitle the Tenant to any
reduction or abatement in Rent, anything herein contained and any rule of law or
equity to the contrary notwithstanding. “Minor Variations” shall mean any
modifications to Landlord’s Work, to the extent such modifications are
reasonably required to (i) comply with the requirements of applicable
governmental and quasi-governmental laws, regulations and codes (collectively,
“Code”) and/or to obtain or to comply with any required permit, (ii) comply with
any request by the Tenant for modifications to Landlord’s Work, (iii) comport
with good design, engineering and construction practices (provided such
variations are not material) or (iv) make reasonable adjustments for field
deviations encountered in the construction of Landlord’s Work.
7.2. Changes Requested by Tenant. Tenant may request Changes after Tenant
approves the Approved Plans by notifying Landlord thereof in writing in
substantially the same form as the AIA standard change order form (a “Tenant
Change Order Request”), which Tenant Change Order Request shall detail the
nature and extent of any requested Changes. If the nature of a Change requires
revisions to the Approved Plans, then Tenant shall be solely responsible for the
cost and expense of such revisions. Tenant shall reimburse Landlord for all
additional costs and expenses payable by Landlord to complete Landlord’s Work
due to a Tenant-requested Change in accordance with the payment provisions of
this Work Letter. Tenant Change Order Requests shall be signed by Tenant’s
Authorized Representative.
7.3. Preparation of Estimates. Landlord shall, before proceeding with any
Change, use its best efforts, prepare as soon as is reasonably practicable (but
in no event more than five (5) business days after delivering a Landlord Change
Order Request to Tenant or receipt of a Tenant Change Order Request) an estimate
of the increased costs or savings that would result from such Change, as well as
an estimate of such Change’s effects on the Schedule. Subject to Section 7.1
(c), Tenant shall have five (5) business days after receipt of such information
from Landlord to (a) in the case of a Landlord Change Order Request, approve or
reject such Landlord Change Order Request in writing or (b) in the case of a
Tenant Change Order Request, notify Landlord in writing of Tenant’s decision
either to proceed with or abandon the Tenant-requested Change.
8. Miscellaneous.
8.1. Headings, Etc. Where applicable in this Work Letter, the singular includes
the plural and the masculine or neuter includes the masculine, feminine and
neuter. The section headings of this Work Letter are not a part of this Work
Letter and shall have no effect upon the construction or interpretation of any
part hereof.
8.2. Time of the Essence. Time is of the essence with respect to the performance
of every provision of this Work Letter in which time of performance is a factor.
8.3. Covenants. Each provision of this Work Letter performable by Landlord shall
be deemed both a covenant and a condition.

 

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8.4. Consent. Whenever consent or approval of either party is required, that
party shall not unreasonably withhold such consent or approval, except as may be
expressly set forth to the contrary.
8.5. Entire Agreement. The terms of this Work Letter are intended by the parties
as a final expression of their agreement with respect to the terms as are
included herein, and may not be contradicted by evidence of any prior or
contemporaneous agreement, other than the Lease.
8.6. Invalid Provisions. Any provision of this Work Letter that shall prove to
be invalid, void or illegal shall in no way affect, impair or invalidate any
other provision hereof, and all other provisions of this Work Letter shall
remain in full force and effect and shall be interpreted as if the invalid, void
or illegal provision did not exist.
8.7. Construction. The language in all parts of this Work Letter shall be in all
cases construed as a whole according to its fair meaning and not strictly for or
against either Landlord or Tenant.
8.8. Assigns. Each of the covenants, conditions and agreements herein contained
shall inure to the benefit of and shall apply to and be binding upon the parties
hereto and their respective heirs; legatees; devisees; executors;
administrators; and permitted successors, assigns, sublessees. Nothing in this
Section 8.8 shall in any way alter the provisions of the Lease restricting
assignment or subletting.
8.9. Authority. That individual or those individuals signing this Work Letter
guarantee, warrant and represent that said individual or individuals have the
power, authority and legal capacity to sign this Work Letter on behalf of and to
bind all entities, corporations, partnerships, limited liability companies,
joint venturers or other organizations and entities on whose behalf said
individual or individuals have signed.
8.10. Counterparts. This Work Letter may be executed in one or more
counterparts, each of which, when taken together, shall constitute one and the
same document.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, Landlord and Tenant have executed this Work Letter to be
effective on the date first above written.
LANDLORD:
BMR-LANDMARK AT EASTVIEW LLC,
a Delaware limited liability company

         
By:
                 
Name:
                 
Title:
                 

TENANT:
EPICEPT CORPORATION,
a [                    ] corporation

         
By:
                 
Name:
                 
Title:
                 

 

 

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EXHIBIT A
SCHEDULE

 

 

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SCHEDULE 2.1
LANDLORD’S WORK PLANS

 

 

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EXHIBIT H
HVAC CALCULATION MODEL
Monthly HVAC (Heating, Ventilation and Air Conditioning) billings for each
tenant are calculated by multiplying the monthly airflow in million cubic feet
(MCF) for each tenant by the cost per MCF, also calculated monthly.
The monthly air flow for each tenant is determined by multiplying the full-load
airflow rating of each fan feeding the tenant space in cubic feet per minute
(CFM) by the runtime factor provided on the fan schedule and by 60 to provide an
hourly usage in cubic feet. This is done each hour, and summed for the month to
provide a total airflow for the month, expressed in MCF.
The runtime factor for each fan is provided on a fan schedule, and accounts for
both partial runtime during an hour, and reduced flow on setback. Any changes to
the fan schedule for billing purposes must be requested by the tenant in writing
at least five (5) working days before the change is to take place.
Airflow from a fan providing air to more than one tenant will be allocated based
on the percentage of MCF delivered.
The cost per MCF is determined by taking the appropriate costs associated with
supplying and delivering conditioned air to tenant space and dividing it by the
total airflow provided to the site, calculated as above and summing across all
fans. This cost is calculated monthly.

 

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EXHIBIT I
LETTER OF CREDIT
[On letterhead or L/C letterhead of Issuer.]
LETTER OF CREDIT
Date:                     , 200  

             
 
      (the “Beneficiary”)              
 
                     
 
                     
Attention:
                         
L/C. No.:
                         
Loan No. :
                         

Ladies and Gentlemen:
We establish in favor of Beneficiary our irrevocable and unconditional Letter of
Credit numbered as identified above (the “L/C”) for an aggregate amount of
$                    , expiring at     :00 p.m. on                      or, if
such day is not a Banking Day, then the next succeeding Banking Day (such date,
as extended from time to time, the “Expiry Date”). “Banking Day” means a weekday
except a weekday when commercial banks in
                                         are authorized or required to close.
We authorize Beneficiary to draw on us (the “Issuer”) for the account of
                     (the “Account Party”), under the terms and conditions of
this L/C.
Funds under this L/C are available by presenting the following documentation
(the “Drawing Documentation”): (a) the original L/C and (b) a sight draft
substantially in the form of Exhibit A, with blanks filled in and bracketed
items provided as appropriate. No other evidence of authority, certificate, or
documentation is required.
Drawing Documentation must be presented at Issuer’s office at
                     on or before the Expiry Date by personal presentation,
courier or messenger service, or fax. Presentation by fax shall be effective
upon electronic confirmation of transmission as evidenced by a printed report
from the sender’s fax machine. After any fax presentation, but not as a
condition to its effectiveness, Beneficiary shall with reasonable promptness
deliver the original Drawing Documentation by any other means. Issuer will on
request issue a receipt for Drawing Documentation.
We agree, irrevocably, and irrespective of any claim by any other person, to
honor drafts drawn under and in conformity with this L/C, within the maximum
amount of this L/C, presented to us on or before the Expiry Date, provided we
also receive (on or before the Expiry Date) any other Drawing Documentation this
L/C requires.
We shall pay this L/C only from our own funds by check or wire transfer, in
compliance with the Drawing Documentation.
If Beneficiary presents proper Drawing Documentation to us on or before the
Expiry Date, then we shall pay under this L/C at or before the following time
(the “Payment Deadline”): (a) if presentment is made at or before noon of any
Banking Day, then the close of such Banking Day; and (b) otherwise, the close of
the next Banking Day. We waive any right to delay payment beyond the Payment
Deadline. If we determine that Drawing Documentation is not proper, then we
shall so advise Beneficiary in writing, specifying all grounds for our
determination, within one Banking Day after the Payment Deadline.
Partial drawings are permitted. This L/C shall, except to the extent reduced
thereby, survive any partial drawings.

 

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We shall have no duty or right to inquire into the validity of or basis for any
draw under this L/C or any Drawing Documentation. We waive any defense based on
fraud or any claim of fraud.
The Expiry Date shall automatically be extended by one year (but never beyond
                     the “Outside Date”) unless, on or before the date 90 days
before any Expiry Date, we have given Beneficiary notice that the Expiry Date
shall not be so extended (a “Nonrenewal Notice”). We shall promptly upon request
confirm any extension of the Expiry Date under the preceding sentence by issuing
an amendment to this L/C, but such an amendment is not required for the
extension to be effective. We need not give any notice of the Outside Date.
Beneficiary may from time to time without charge transfer this L/C, in whole but
not in part, to any transferee (the “Transferee”). Issuer shall look solely to
Account Party for payment of any fee for any transfer of this L/C. Such payment
is not a condition to any such transfer. Beneficiary or Transferee shall
consummate such transfer by delivering to Issuer the original of this L/C and a
Transfer Notice substantially in the form of Exhibit B, purportedly signed by
Beneficiary, and designating Transferee. Issuer shall promptly reissue or amend
this L/C in favor of Transferee as Beneficiary. Upon any transfer, all
references to Beneficiary shall automatically refer to Transferee, who may then
exercise all rights of Beneficiary. Issuer expressly consents to any transfers
made from time to time in compliance with this paragraph.
Any notice to Beneficiary shall be in writing and delivered by hand with receipt
acknowledged or by overnight delivery service such as FedEx (with proof of
delivery) at the above address, or such other address as Beneficiary may specify
by written notice to Issuer. A copy of any such notice shall also be delivered,
as a condition to the effectiveness of such notice, to:                      (or
such replacement as Beneficiary designates from time to time by written notice).
No amendment that adversely affects Beneficiary shall be effective without
Beneficiary’s written consent.
This L/C is subject to and incorporates by reference: (a) the Uniform Customs
and Practice for Documentary Credits, International Chamber of Commerce
Publication No. 500 (the “UCP”); and (b) to the extent not inconsistent with the
UCP, Article 5 of the Uniform Commercial Code of the State of New York.
Very truly yours,
[Issuer Signature]

 

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EXHIBIT A
FORM OF SIGHT DRAFT
[Beneficiary Letterhead]
TO:
[Name and Address of Issuer]
SIGHT DRAFT
AT SIGHT, pay to the Order of                     , the sum of
                     United States Dollars ($                    ). Drawn under
[Issuer] Letter of Credit No.                      dated                     .
[Issuer is hereby directed to pay the proceeds of this Sight Draft solely to the
following account:
                                                            .]
[Name and signature block, with signature or purported signature of Beneficiary]
Date:                                         

 

 

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EXHIBIT B
FORM OF TRANSFER NOTICE
[Beneficiary Letterhead]
TO:
[Name and Address of Issuer] (the “Issuer”)
TRANSFER NOTICE
By signing below, the undersigned, Beneficiary (the “Beneficiary”) under
Issuer’s Letter of Credit No.                      dated                     
(the “L/C”), transfers the L/C to the following transferee (the “Transferee”):
[Transferee Name and Address]
The original L/C is enclosed. Beneficiary directs Issuer to reissue or amend the
L/C in favor of Transferee as Beneficiary. Beneficiary represents and warrants
that Beneficiary has not transferred, assigned, or encumbered the L/C or any
interest in the L/C, which transfer, assignment, or encumbrance remains in
effect.
[Name and signature block, with signature or purported signature of Beneficiary]
Date: