exv10w2



 





Exhibit
10.2



LEASE




by and between




BMR-3030 BUNKER HILL STREET LLC,

a Delaware limited liability company




and




CYTRX CORPORATION,

a Delaware corporation




 









 





LEASE




     THIS LEASE (this “Lease”) is entered into as of this 20th day of July, 2007
(the “Execution Date”), by and between BMR-3030 BUNKER HILL STREET LLC, a Delaware limited
liability company (“Landlord”), and CYTRX CORPORATION, a Delaware corporation
(“Tenant”).



RECITALS




     A. WHEREAS, Landlord owns certain real property (the “Property”) and the improvements
thereon located at 3030 Bunker Hill Street in San Diego, California, including the building located
thereon (the “Building”) in which the Premises (as defined below) are located; and



     B. WHEREAS, 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, as shown on Exhibit A attached hereto for use by Tenant in
accordance with the Permitted Use (as defined below) and no other uses. 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 date of execution and delivery hereof by all
parties hereto 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.



     2.2. In the definitions below, each current Rentable Area (as defined below) is expressed in
rentable square footage. Rentable Area and Tenant’s Pro Rata Share are all subject to adjustment
as provided in this Lease.



	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	Means the Following (As of the Term	 
	 	Definition or Provision	 	 	Commencement Date)	 
	 	 	 	 	 	 
	 	Rentable Area of Premises
	 	 	10,152 square feet	 
	 	 	 	 	 	 
	 	Rentable Area of Building
	 	 	105,364 square feet	 
	 	 	 	 	 	 
	 	Tenant’s Pro Rata Share of Building
	 	 	9.64%	 
	 	 	 	 	 	 





     2.3. Initial monthly and annual installments of Basic Annual Rent for the Premises
(“Basic Annual Rent”) as of the Term Commencement Date, subject to adjustment under this
Lease:



 









 





	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	Rentable S.F.	 	 	Per Rentable S.F.	 	 	Total Annual	 	 	Total Monthly	 
	 	 	 	 	 	 	 	 	 	 	 	 
	 	10,152
	 	 	$1.80 monthly
	 	 	$219,283.20
	 	 	$18,273.60	 
	 	 	 	 	 	 	 	 	 	 	 	 





     2.4. Estimated Term Commencement Date: August 1, 2007



     2.5. Estimated Term Expiration Date: July 31, 2010



     2.6. Security Deposit: $36,547.20, subject to increase in accordance with the terms hereof



     2.7. Permitted Use: General office and laboratory use in conformity with Applicable Laws (as
defined below)




			
	     2.8. Address for Rent Payment:	 	BMR-3030 Bunker Hill Street LLC

Unit K

P.O. Box 51918

Los Angeles, California 90051-6218






			
	     2.9. Address for Notices to Landlord:	 	BMR-3030 Bunker Hill Street LLC

17140 Bernardo Center Drive, Suite 222

San Diego, California 92128

Attn: General Counsel/Real Estate






			
	     2.10. Address for Notices to Tenant:	 	CytRx Corporation

11726 San Vicente Boulevard, Suite 650

Los Angeles, California 90049

Attn: General Counsel





     2.11. The following Exhibits are attached hereto and incorporated herein by reference:


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            [Intentionally omitted]

Exhibit G            Landlord’s Work

Exhibit H            Form of Letter of Credit



3. Term.




     3.1. The actual term of this Lease (the “Term”) shall be that period from the actual
Term Commencement Date (as defined in Section 4.2 below) through the Term Expiration Date,
subject to earlier termination of this Lease as provided herein.


4. Possession and Commencement Date.




     4.1. Landlord shall tender possession of the Premises to Tenant on the Estimated Term
Commencement Date, with the work required of Landlord described in Exhibit G attached
hereto as (“Landlord’s Work”) substantially complete. 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 actual Term Commencement Date as described in Section 4.2 occurs.



     4.2. The “Term Commencement Date” shall be the later of (a) the day Landlord tenders
possession of the Premises to Tenant with all Landlord’s Work substantially completed and (b)
August 1, 2007. If possession is delayed by action of Tenant, then the Term Commencement Date
shall be the date Landlord’s Work is substantially complete. Tenant shall



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execute and deliver to
Landlord written acknowledgment of the actual Term Commencement Date and the Term Expiration Date
within ten (10) days after Tenant takes occupancy of the Premises, in the form attached as
Exhibit B hereto. Failure to execute and deliver such acknowledgment, however, shall not
affect the Term Commencement Date or Landlord’s or Tenant’s liability hereunder. Failure by Tenant
to obtain validation by any medical review board or other similar governmental licensing of the
Premises required for the Permitted Use by Tenant shall not serve to extend the Term Commencement
Date.




     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 21 are in effect, and such entry shall be subject to all the terms and conditions
of this Lease.



     4.4. Possession of areas of the Premises necessary for utilities, services, safety and
operation of the Building is reserved to Landlord.



     4.5. Landlord shall cause Landlord’s Work to be performed at Landlord’s sole cost and expense,
including the costs of (a) construction, (b) project management by Landlord (which fee shall equal
three percent (3%) of the cost of Landlord’s Work), (c) space planning, architect, engineering and
other related services performed by third parties unaffiliated with Tenant, (d) building permits
and other planning and inspection fees, (e) costs and expenses for labor, material, equipment and
fixtures and (f) building permits and other taxes, fees, charges and levies by Governmental
Authorities for permits or for inspections of Landlord’s Work. In no event shall Landlord be
liable for (v) expenses related to the existing fume hood in Suite 101 of the Building, (w)
payments to Tenant or any affiliates of Tenant, (x) the purchase of any furniture, personal
property or other non-building system equipment, (y) costs resulting from any default by Tenant of
its obligations under this Lease or (z) costs that are recoverable or reasonably recoverable by
Tenant from a third party (e.g., insurers, warrantors, or tortfeasors).



     4.6. Landlord shall select the architect, engineer, general contractor and major
subcontractors to perform Landlord’s Work.



     4.7. So long as Tenant does not (in Landlord’s reasonable judgment) unreasonably or
unnecessarily interfere with the construction of Landlord’s Work, upon reasonable prior written
notice to Landlord, Tenant may enter the office portion of the Premises prior to the Term
Commencement Date; provided, however, that Tenant shall furnish to Landlord
evidence satisfactory to Landlord that insurance coverages required of Tenant under the provisions
of Article 22 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 (but shall be subject to
Additional Rent (as
defined below), including, without limitation, Tenant’s Pro Rata Share of Operating Expenses).
Tenant shall reimburse Landlord for all actual documented incremental costs that Landlord incurs
because of such entry and indemnify, defend and hold harmless Landlord from and against any loss,
cost, claim, lawsuit, liability or expense (including reasonable attorneys’ fees and disbursements)
arising out of any entry and/or activities upon the Premises by Tenant or Tenant’s agents.


5. Rent.




     5.1. Tenant shall pay to Landlord as Basic Annual Rent for the Premises, commencing on the
Term Commencement Date, the sums set forth in Section 2.3, subject to the rental
adjustments provided in Article 6 hereof. 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 6 hereof, each in advance on the first day of each and every calendar month during
the Term.



     5.2. 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 7 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



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agreements, terms, covenants and conditions of this Lease to be
performed by Tenant, after notice and the lapse of any applicable cure periods.




     5.3. 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 2.9 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.


6. Rent Adjustments. The Basic Annual Rent shall be subject to an annual upward adjustment
of three percent (3%) of the then-current Basic Annual Rent. 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 Term Commencement Date, and subsequent adjustments shall
become effective on every successive annual anniversary for so long as this Lease continues in
effect.



7. Operating Expenses.




     7.1. As used herein, the term “Operating Expenses” shall include:



          (a) Government impositions including, without limitation, property tax costs consisting of
real and personal property taxes and assessments, 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 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; cable television; trash
collection; cleaning, including windows; 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 Building office; Building office rent or rental value for a commercially reasonable amount
of space, to the extent an office used for Building operations is maintained at the Building;
capital expenditures (amortized over their useful life, but in no event greater that seven (7)
years); costs of complying with all federal, state, municipal and local laws, codes, ordinances,
rules and regulations of Governmental Authorities,




4









 







committees, associations, or other regulatory
committees, agencies or governing bodies having jurisdiction over the Property, the Project, the
Building, the Premises, Landlord or Tenant, 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 initial development
and construction, including, but not limited to, grading, paving, landscaping and decorating (as
distinguished from maintenance, repair and replacement of the foregoing); 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 7.1(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 7.1(b)); and taxes of the types set
forth in Subsection 7.1(a). In addition, Tenant shall not be responsible for Operating
Expenses related to repairs and replacements of the Building systems for the first (1st)
year of the Term; provided, however, that Tenant shall be responsible during such period
for Operating Expenses related to routine maintenance of such systems.




     7.2. Tenant shall pay to Landlord on the first day of each calendar month of the Term, as
Additional Rent, (a) the Property Management Fee (as defined below) and (b) Landlord’s estimate of
Tenant’s Pro Rata Share of Operating Expenses with respect to the Building and the Project, as
applicable, for such month.



          (x) The “Property Management Fee” shall equal two percent (2%) of the Rent due from
Tenant.




          (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 Pro Rata
Share of Operating Expenses 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 7.2 exceed Tenant’s Pro Rata Share of Operating Expenses 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 7.2 for any period that is less than a full
month shall be prorated (based on a thirty (30)-day month) for such fractional month.




     7.3. Landlord’s annual statement shall be final and binding upon Tenant unless Tenant, within
sixty (60) 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 sixty
(60)-day period, Tenant reasonably and in good faith questions or contests the correctness of
Landlord’s statement of Tenant’s Pro Rata Share of Operating Expenses, 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 Pro Rata Share of
Operating Expenses, 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



5









 




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. Landlord need not provide copies of any books or records.
Tenant shall commence the Independent Review within thirty (30) 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 sixty (60)
days 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 sixty (60) 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 San
Diego, California, 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 Pro Rata Share of Operating Expenses 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. If the parties agree or the Accountant(s) determine that Tenant’s payments of
Tenant’s Pro Rata Share of Operating Expenses for such calendar year were less than Tenant’s
obligation for the calendar year, then Tenant shall pay the deficiency to Landlord within thirty
(30) days after delivery of such results.




     7.4. 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 Pro Rata Share of Operating Expenses 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.



     7.5. 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 relate in a reasonable manner to the time
period wherein Tenant has an obligation to share in Operating Expenses.



     7.6. Within three (3) business days after the end of each calendar month, Tenant shall submit
to Landlord an invoice, or, in the event an invoice is not available, an itemized list, of all
costs and expenses that (a) Tenant has incurred (either internally or by employing third parties)
during the prior month and (b) for which Tenant reasonably believes it is entitled to
reimbursements from Landlord pursuant to the terms of this Lease or that Tenant reasonably believes
is the responsibility of Landlord pursuant to this Lease.



6









 




8. Rentable Area.




     8.1. The term “Rentable Area” as set forth in Article 2 and as may otherwise
be referenced within this Lease, shall reflect such areas as reasonably calculated by Landlord’s
architect.



     8.2. 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.



     8.3. [Intentionally omitted]



     8.4. 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.



     8.5. 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 Tenant shall be bound
by such certifications.


9. Security Deposit.




     9.1. Tenant has deposited with Landlord the sum set forth in Section 2.6 (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 during the period commencing on the Execution Date and ending upon the
expiration or termination of this Lease. 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. The
provisions of this Article 9 shall survive the expiration or earlier termination of this Lease.
TENANT HEREBY WAIVES THE REQUIREMENTS OF SECTION 1950.7 OF THE CALIFORNIA CIVIL CODE, AS THE SAME
MAY BE AMENDED FROM TIME TO TIME.



     9.2. 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.



     9.3. 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.



     9.4. 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.



7









 





     9.5. [Intentionally omitted]



     9.6. If the Security Deposit shall be 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 on 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. 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.



     9.7. 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 H
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: (i) Landlord shall with reasonable diligence complete any necessary
calculations; (ii) Tenant shall extend the expiry date of such L/C Security from time to time as
Landlord reasonably requires; and (iii) 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 legal costs (as estimated by Landlord’s counsel) in handling Landlord’s acceptance of
L/C Security or its replacement or extension.




          (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: (i) an uncured Default exists; (ii)
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 (1)
six (6) months after the then-current Term Expiration Date or (2) the date one year after the
then-current expiry date of the L/C Security; (iii) 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; (iv) Tenant fails to pay
(when and as Landlord reasonably requires) any bank charges for Landlord’s transfer of the L/C
Security; or (v) 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.





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10. Use.




     10.1. Tenant shall use the Premises for the purpose set forth in Section 2.7, 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.



     10.2. 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.



     10.3. 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 Article.



     10.4. Tenant shall keep all doors opening onto public corridors closed, except when in use for
ingress and egress.



     10.5. 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. 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.



     10.6. 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.



     10.7. 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, 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. 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.
At Landlord’s option, Landlord may install any such Signage, and Tenant shall pay all costs
associated with such installation within five (5) days after demand therefor.



     10.8. 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.



     10.9. 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



9









 




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.




     10.10. (a) When Landlord delivers the Premises to Tenant, the Premises shall be in compliance
with the Americans with Disabilities Act, 42 U.S.C. § 12101, et seq. (together with regulations
promulgated pursuant thereto, the “ADA”), in effect at such time. Landlord shall
indemnify, defend and hold harmless Tenant from and against any loss, cost, liability or expense
(including reasonable attorneys’ fees and disbursements) arising out of Landlord’s failure to
comply with the preceding sentence.



          (b) Notwithstanding any other provision herein to the contrary, but subject to Section
10.10(a) above, Tenant shall be responsible for all liabilities, costs and expenses arising out
of or in connection with the compliance of the Premises with the ADA other than as of the date of
delivery of the Premises to Tenant, 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 such failure of the Premises to comply with the ADA.




          (c) The provisions of this Section 10.10 shall survive the expiration or earlier
termination of this Lease.



11. Brokers.




     11.1. 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 CB Richard Ellis
(“Tenant’s Broker”) and Grubb & Ellis (together with Tenant’s Broker, “Brokers”),
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 Brokers in relation to this
Lease pursuant to separate agreements between Landlord and Brokers.



     11.2. 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.



     11.3. 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 11.1 and
11.2.



     11.4. Tenant agrees to indemnify, defend and hold Landlord harmless from any and all cost or
liability for compensation claimed by any other broker or agent, other than Broker, employed or
engaged by it or claiming to have been employed or engaged by it.


12. Holding Over.




     12.1. 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 5, as adjusted in accordance with Article 6,
and (b) Tenant’s Pro Rata Share of Operating Expenses. Any such month-to-month tenancy shall be
subject to every other term, covenant and agreement contained herein.



     12.2. 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.



10









 





     12.3. 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.



     12.4. The foregoing provisions of this Article 12 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.


13. Taxes on Tenant’s Property.




     13.1. 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.



     13.2. 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.



     13.3. 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 13.2 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 7, but shall be treated, as to such other tenants, as provided in this Section
13.3. If the records of the County Assessor are available and sufficiently detailed to serve
as a basis for determining whether said alterations are assessed at a higher valuation than the
Building Standard, then such records shall be binding on both Landlord and Tenant.


14. 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 acknowledges that (a) it is fully familiar
with the condition of the Premises and agrees to take the same in its condition “as is” as of the
Term Commencement Date and (b) Landlord shall have no obligation to alter, repair or otherwise
prepare the Premises for Tenant’s occupancy or to pay for or construct any improvements to the
Premises, other than Landlord’s Work. 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.



15. Common Areas and Parking Facilities.




     15.1. 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.



     15.2. Tenant shall have a non-exclusive, revocable license to use Tenant’s Pro Rata Share of
parking facilities serving the Building in common on an unreserved basis with other tenants of the
Building and the Project.



     15.3. 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



11









 




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.




     15.4. 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.


16. Utilities and Services.




     16.1. Tenant shall pay for all water (including the cost to service, repair and replace
reverse osmosis, de-ionized and other treated water), gas, heat, light, power, telephone, internet
service, cable television, other telecommunications and other utilities supplied to the Premises,
together with any fees, surcharges and taxes thereon. If any such utility is not separately
metered to Tenant, 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 Pro Rata Share of
Operating Expenses 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.



     16.2. 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; strike, lockout or other labor disturbance or labor dispute of any character; act
of terrorism; shortage of materials, which shortage is not unique to Landlord or Tenant, as the
case may be; 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.



     16.3. Tenant shall pay for, prior to delinquency of payment therefor, any utilities and
services that may be furnished to the Premises during or, if Tenant occupies the Premises after the
expiration or earlier termination of the Term, after the Term.



     16.4. 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 2.7 or (b)
exceed Tenant’s Pro Rata Share of the Building’s capacity to provide such utilities or services.



     16.5. 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.



     16.6. Utilities and services provided by Landlord to the Premises that are separately metered
shall be paid by Tenant directly to the supplier of such utility or service.



     16.7. 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



12









 




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.




     16.8. 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. Notwithstanding the foregoing,
if all or a portion of the Premises is rendered untenantable due to the failure of any Building
systems during the Term due to Landlord’s gross negligence or willful misconduct, Tenant shall not
be responsible for payment of Basic Annual Rent for any period after the first (1st)
five (5) business days of such untenantability until such systems return to functionality;
provided, however, that Tenant shall promptly provide Landlord with written notice of the
failure of any such Building systems.


17. Alterations.




     17.1. Tenant shall make no alterations, additions or improvements 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; provided,
however, that in the event any proposed Alteration affects (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, then Landlord may withhold its approval with
respect thereto in its sole and absolute discretion. Tenant shall, in making any such Alterations,
use only
those architects, contractors, suppliers and mechanics of which Landlord has given prior
written approval, which approval shall be in Landlord’s sole and absolute 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.



     17.2. 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.



     17.3. 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.



     17.4. 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 completion of any Alterations,
Tenant shall provide Landlord with complete “as-built” drawing print sets and electronic CADD files
on disc (or files in such other current format in common use as Landlord reasonably approves or
requires) showing any changes in the Premises.



     17.5. 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



13









 




Landlord,
secure, at Tenant’s own cost and expense, a completion and lien indemnity bond satisfactory to
Landlord for said work.




     17.6. All Alterations, attached equipment, decorations, fixtures, trade fixtures, additions
and improvements, subject to Section 17.8, 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, laboratory benches, exterior
venting fume hoods and walk-in freezers and refrigerators, 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. 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.



     17.7. 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. The provisions of this
Section shall survive the expiration or earlier termination of this Lease.



     17.8. Except as to those items listed on Exhibit C attached hereto, all business and
trade fixtures, machinery and equipment, built-in furniture and cabinets, together with all
additions and accessories thereto, installed in and upon 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 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.



     17.9. Notwithstanding any other provision of this Article 17 to the contrary, in no
event shall Tenant remove any improvement from the Premises as to which Landlord contributed
payment, including, without limitation, Landlord’s Work, without Landlord’s prior written
consent, which consent Landlord may withhold in its sole and absolute discretion.



     17.10. Tenant shall pay to Landlord an amount equal to five percent (5%) of the cost to
Tenant of all changes installed by Tenant or its contractors or agents to cover Landlord’s overhead
and expenses for plan review, coordination, scheduling and supervision thereof. For purposes of
payment of such sum, Tenant shall submit to Landlord copies of all bills, invoices and statements
covering the costs of such charges, accompanied by payment to Landlord of the fee set forth in this
Section. Tenant shall reimburse Landlord for any extra expenses incurred by Landlord by reason of
faulty work done by Tenant or its contractors, or by reason of delays caused by such work, or by
reason of inadequate clean-up.



     17.11. Within sixty (60) days after final completion of any Alterations performed by Tenant
with respect to the Premises, Tenant shall submit to Landlord documentation showing the amounts
expended by Tenant with respect to such Alterations, together with supporting documentation
reasonably acceptable to Landlord.



     17.12. 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.


18. Repairs and Maintenance.




     18.1. 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



14









 




Landlord. Any costs
related to the repair or maintenance activities specified in this Section 18.1 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.




     18.2. Except for services of Landlord, if any, required by Section 18.1, 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
Landlord’s Work.



     18.3. 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.



     18.4. Repairs under this Article 18 that are obligations of Landlord are subject to
allocation among Tenant and other tenants as Operating Expenses, except as otherwise provided in
this Article 18.



     18.5. This Article 18 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 22 shall apply in lieu of this Article 18.


19. Liens.




     19.1. 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 twenty (20) days after the filing thereof, at Tenant’s sole cost and expense.



     19.2. Should Tenant fail to discharge or bond against any lien of the nature described in
Section 19.1, 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.



     19.3. 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.




15









 




20. Indemnification and Exculpation.




     20.1. 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 damage 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 negligence.



     20.2. Notwithstanding any provision of Section 20.1 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 20.2.



     20.3. 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.



     20.4. 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.



     20.5. The provisions of this Article 20 shall survive the expiration or earlier
termination of this Lease.


21. Insurance; Waiver of Subrogation.




     21.1. 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, 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,
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 21.1 shall constitute a portion of Operating
Expenses.



     21.2. In addition, Landlord shall carry public liability insurance with a single limit of not
less than One Million Dollars ($1,000,000) for death or bodily injury, or property damage with
respect to the Project. Any costs incurred by Landlord pursuant to this Section 21.2 shall
constitute a portion of Operating Expenses.



     21.3. 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,



16









 




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 Two Million Dollars
($2,000,000) 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 (including $100,000 fire legal
liability (each loss)).




     21.4. 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 officers,
employees, agents, general partners, members, subsidiaries, affiliates and 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 (except in the event of
non-payment of premium, in which case ten (10) days written notice shall be given). 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.



     21.5. Tenant assumes the risk of damage to any fixtures, goods, inventory, merchandise,
equipment and leasehold improvements, 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.



     21.6. 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.



     21.7. 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 21.7. 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 21.7 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



17









 




this Section 21.7, 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.




     21.8. 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.


22. Damage or Destruction.




     22.1. 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.



     22.2. In the event of any damage to or destruction of the Building or the Project other than as
described in Section 22.1, 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, and Landlord shall notify Tenant in writing of such election, specifying the estimated time
to completion such repairs, reconstruction and restoration. If Landlord estimates that the
repairs, reconstruction and restoration will not be completed with six (6) months from the date of
the happening of such casualty, Tenant shall have the right to terminate this Lease upon written
notice to Landlord delivered within ten (10) business days after receipt of Landlord’s notice of
Landlord’s election to repair. If Landlord elects not to repair the Building or the Project, as
applicable, then this Lease shall terminate as of the date of such damage or destruction.



     22.3. Landlord shall give written notice to Tenant within thirty (30) days following the date
of damage or destruction of its election not to repair, reconstruct or restore the Building or the
Project, as applicable.



     22.4. Upon any termination of this Lease under any of the provisions of this Article
22, the parties shall be released thereby without further obligation to the other from the date
possession of the Premises is surrendered to Landlord, except with regard to (a) items occurring
prior to the damage or destruction and (b) provisions of this Lease that, by their express terms,
survive the expiration or earlier termination hereof.



     22.5. In the event of repair, reconstruction and restoration as provided in this Article
22, 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; provided, however, that the amount of such abatement shall be reduced by the
proceeds of lost rental income insurance actually received by Tenant with respect to the Premises.



     22.6. Notwithstanding anything to the contrary contained in this Article 22, 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.



     22.7. 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



18









 




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.




     22.8. Notwithstanding anything to the contrary contained in this Article 22, 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 22 occurs during the last
twelve (12) months of the Term or any extension hereof, or to the extent that insurance proceeds
are not available therefor.



     22.9. 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.


23. Eminent Domain.




     23.1. In the event the whole of the Premises, or such part thereof as shall substantially
interfere with 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.



     23.2. 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.



     23.3. Tenant shall be entitled to any award that is specifically awarded as compensation for
(a) the taking of Tenant’s personal property 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.



     23.4. If, upon any taking of the nature described in this Article 23, 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 proportionately to reflect the loss of any portion of the
Premises no longer available to Tenant.


24. Defaults and Remedies.




     24.1. 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 six percent (6%) 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.



     24.2. 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



19









 




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.




     24.3. 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)
days after Landlord delivers 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 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 of an emergency, Landlord shall have the right to enter
the Premises and act in accordance with its rights as provided elsewhere in this Lease. In
addition to the late charge described in Section 24.1, 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
the highest rate permitted by Applicable Laws, whichever is less.



     24.4. 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 if Tenant fails to maintain the
Premises in accordance with the Lease;




          (b) The failure by Tenant to make any payment of Rent, as and when due, where such failure
shall continue for a period of three (3) days after written notice thereof from Landlord to Tenant;




          (c) The failure by Tenant to observe or perform any obligation or covenant contained herein
(other than described in Subsections 24.4(a) and 24.4(b)) to be performed by
Tenant, where such failure shall continue for a period of thirty (30) days after written notice
thereof from Landlord to Tenant; provided that, if the nature of Tenant’s default is such
that it reasonably requires more than thirty (30) days to cure, Tenant shall not be deemed to be in
default if Tenant shall commence such cure within said thirty (30) 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 “Bankruptcy Code”);




          (g) Any involuntary petition if filed against Tenant under any chapter of the Bankruptcy Code
and is not dismissed within one hundred twenty (120) days;




          (h) Failure to deliver an estoppel certificate in accordance with Article 29; 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 24.4 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




20









 







deemed a forfeiture or a termination of this Lease unless Landlord elects otherwise in such notice.




     24.5. 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:



          (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; 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; plus




          (d) Any other amount necessary to compensate Landlord for all the detriment 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 24.5(a) and 24.5(b), “worth at the time of award” shall be
computed by allowing interest at the rate specified in Section 24.1. As used in
Subsection 24.5(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.




     24.6. In addition to any other remedies available to Landlord at law or in equity and under
this Lease, Landlord shall have the remedy described in California Civil Code Section 1951.4
(Landlord may continue this Lease in effect after Tenant’s Default and abandonment and recover Rent
as it becomes due, provided Tenant has the right to sublet or assign, subject only to
reasonable limitations). In addition, Landlord shall not be liable in any way whatsoever for its
failure or refusal to relet the Premises. For purposes of this Section 24.6, the following
acts by Landlord will not constitute the termination of Tenant’s right to possession of the
Premises:



          (a) Acts of maintenance or preservation or efforts to relet the Premises, including, but not
limited to, alterations, remodeling, redecorating, repairs, replacements or painting as Landlord
shall consider advisable for the purpose of reletting the Premises or any part thereof; or




          (b) The appointment of a receiver upon the initiative of Landlord to protect Landlord’s
interest under this Lease or in the Premises.



Notwithstanding the foregoing, in the event of a Default by Tenant, Landlord may elect at any time
to terminate this Lease and to recover damages to which Landlord is entitled. If Landlord




21









 







does not elect to terminate this Lease as provided in Section 24.5, then Landlord may, from time to
time, recover all Rent as it becomes due under this Lease.




     24.7. In the event Landlord elects to terminate this Lease 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.




     24.8. 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.



     24.9. 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.



     24.10. 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.



     24.11. 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
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.



     24.12. 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.


25. Assignment or Subletting.




     25.1. Except as hereinafter expressly permitted, Tenant shall not, either voluntarily or by
operation of Applicable Laws, directly or indirectly sell, hypothecate, assign, pledge, encumber or
otherwise transfer this Lease, or sublet the Premises (each, a “Transfer”), without



22









 




Landlord’s prior written consent, which consent Landlord may not unreasonably delay. Tenant shall
have the right to Transfer without Landlord’s prior written consent the Premises or any part hereof
to any person that as of the date of determination and at all times thereafter directly, or
indirectly through one or more intermediaries, controls, is controlled by, or is under common
control with Tenant (“Tenant’s Affiliate”), provided Tenant shall notify Landlord
in writing at least ten (10) days prior to the effectiveness of such Transfer to Tenant’s Affiliate
(an “Exempt Transfer”) and otherwise comply with the requirements of this Lease regarding
such Transfer. For purposes of Exempt Transfers, “control” requires both (a) owning (directly or
indirectly) more than fifty percent (50%) of the stock or other equity interests of another person
and (b) possessing, directly or indirectly, the power to direct or cause the direction of the
management and policies of such person.




     25.2. In the event Tenant desires to effect a Transfer, then, at least forty-five (45) 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 and other costs or overhead expenses incurred by Landlord in reviewing Tenant’s
request for such Transfer.



     25.3. 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 and (c) Landlord’s
desire to exercise its rights under Section 25.8 to cancel this Lease. 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 or 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 Internal Revenue Code of 1986.
Notwithstanding anything contained in this Lease to the contrary, (w) no Transfer shall be
consummated on any basis such that the rental or other amounts to be paid by the occupant,
assignee, manager or other transferee thereunder would be based, in whole or in part, on the income
or profits derived by the business activities of such occupant, assignee, manager or other
transferee; (x) Tenant shall not furnish or render any services to an occupant, assignee, manager
or other transferee with respect to whom transfer consideration is required to be paid, or manage
or operate the Premises or any capital additions so transferred, with respect to which transfer
consideration is being paid; (y) Tenant shall not consummate a Transfer with any person in which
Landlord owns an interest, directly or indirectly (by applying constructive ownership rules set
forth in Section 856(d)(5) of the Internal Revenue Code (“Revenue Code”); and (z) Tenant
shall not consummate a Transfer with any person or in any manner that could cause any portion of
the amounts received by Landlord pursuant to this Lease or any sublease, license or other
arrangement for the right to use, occupy or possess any portion of the Premises to fail to qualify
as “rents from real property” within the meaning of Section 856(d) of the Revenue Code, or any
similar or successor provision thereto or which could cause any other income of Landlord to fail to
qualify as income described in Section 856(c)(2) of the Revenue Code.



     25.4. As conditions precedent to Tenant subleasing the Premises or 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;




23









 








          (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;




          (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) 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 pay all transfer and other taxes (including interest and penalties) assessed
or payable for any Transfer;




          (k) Landlord’s consent (or waiver of its rights) for any Transfer shall not waive Landlord’s
right to consent to any later Transfer;




          (l) Tenant shall deliver to Landlord one executed copy of any and all written instruments
evidencing or relating to the Transfer; and




          (m) A list of Hazardous Materials (as defined in Section 39.7 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 39.2.




     25.5. Any Transfer that is not in compliance with the provisions of this Article 25
shall be void and shall, at the option of Landlord, terminate this Lease.



     25.6. 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.



     25.7. 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.



24









 




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.




     25.8. If Tenant delivers to Landlord a Transfer Notice indicating a desire to transfer this
Lease to a proposed transferee, assignee or sublessee other than as provided within Section
25.4, then Landlord shall have the option, exercisable by giving notice to Tenant at any time
within ten (10) days after Landlord’s receipt of such Transfer Notice, to terminate this Lease as
of the date specified in the Transfer Notice as the Transfer Date, except for those provisions
that, by their express terms, survive the expiration or earlier termination hereof. If Landlord
exercises such option, then Tenant shall have the right to withdraw such Transfer Notice by
delivering to Landlord written notice of such election within five (5) days after Landlord’s
delivery of notice electing to exercise Landlord’s option to terminate this Lease. In the event
Tenant withdraws the Transfer Notice as provided in this Section 25.8, this Lease shall
continue in full force and effect. No failure of Landlord to exercise its option to terminate this
Lease shall be deemed to be Landlord’s consent to a proposed Transfer.



     25.9. If Tenant sublets the Premises or any portion 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.


26. Attorneys’ Fees. If either party commences an action against the other party arising
out of or in connection with this Lease, then the substantially prevailing party shall be entitled
to have and recover from the other party reasonable attorneys’ fees, charges and disbursements and
costs of suit.



27. Bankruptcy. In the event a debtor, trustee or debtor in possession under the Bankruptcy
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:




     27.1. Those acts specified in the Bankruptcy 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;



     27.2. A prompt cash payment to compensate Landlord for any monetary defaults or actual damages
arising directly from a breach of this Lease;



     27.3. A cash deposit in an amount at least equal to the then-current amount of the Security
Deposit; or



     27.4. The assumption or assignment of all of Tenant’s interest and obligations under this
Lease.


28. 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, 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




25









 







any subsequent Landlord may transfer its interest in the Premises or this Lease without Tenant’s consent.



29. Estoppel Certificate. Tenant shall, within ten (10) 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.



30. Joint and Several Obligations. If more than one person or entity executes this Lease
as Tenant, then:




     30.1. 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



     30.2. 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.


31. Limitation of Landlord’s Liability.




     31.1. 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.



     31.2. 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.



26









 





     31.3. Each of the covenants and agreements of this Article 31 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.


32. Project Control by Landlord.




     32.1. 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 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.



     32.2. 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.



     32.3. Landlord may, at any and all reasonable times during non-business hours (or during
business hours if Tenant so requests), and upon 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 32.3(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 32.3; 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.


33. 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.



34. Subordination and Attornment.




     34.1. 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.



     34.2. Notwithstanding the foregoing, Tenant shall 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 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.



27









 





     34.3. 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. 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.



     34.4. 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 Landlord covering the
Premises, Tenant shall at the election of the purchaser at such foreclosure or sale attorn to the
purchaser upon any such foreclosure or sale and recognize such purchaser as Landlord under this
Lease.


35. Surrender.




     35.1. At lease ten (10) days prior to Tenant’s surrender of possession of any part of the
Premises, Tenant shall provide Landlord with (a) a facility decommissioning and Hazardous Materials
closure plan for the Premises (“Exit Survey”), and (b) written evidence of all appropriate
governmental releases obtained by Tenant in accordance with Applicable Laws, including, without
limitation, laws pertaining to the surrender of the Premises. In addition, Tenant agrees to remain
responsible after the surrender of the Premises for the remediation of any recognized environmental
conditions set forth in the Exit Survey and compliance with any recommendations set forth in the
Exit Survey. Tenant’s obligations under this Section 35.1 shall survive the expiration or earlier
termination of the Lease.



     35.2. 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.



     35.3. 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.



     35.4. 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.


36. 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.



37. 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.



38. [Intentionally omitted]



39. Hazardous Materials.




     39.1. 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 the Premises, the Building, the Project or any adjacent property by Hazardous



28









 




Materials 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.




     39.2. Landlord acknowledges that it is not the intent of this Article 39 to prohibit
Tenant from operating its business as described in Section 2.7 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. As a material
inducement to Landlord to allow Tenant to use Hazardous Materials in connection with its business,
Tenant agrees to deliver to Landlord prior to the Term Commencement Date a list identifying each
type of Hazardous Material to be present on the Premises and setting forth any and all governmental
approvals or permits required in connection with the presence of such Hazardous Material on the
Premises (the “Hazardous Materials List”). Tenant shall deliver to Landlord an updated
Hazardous Materials List on or prior to each annual anniversary of the Term Commencement Date and
shall also deliver an updated Hazardous Materials List before any new Hazardous Materials are
brought onto the Premises. Tenant shall deliver to Landlord true and correct copies of the
following documents (hereinafter referred to as the “Documents”) relating to the handling,
storage, disposal and emission of Hazardous Materials prior to the Term Commencement Date or, if
unavailable at that time, concurrent with the receipt from or submission to any Governmental
Authority: permits; approvals; reports and correspondence; storage and management plans; notices
of violations of Applicable Laws; plans relating to the installation of any storage tanks to be
installed in or under the Premises, the Building or the Project (provided that installation
of storage tanks shall only be permitted after Landlord has given Tenant its written consent to do
so, which consent Landlord may withhold in its sole and absolute discretion); and all closure plans
or any other documents required by any and all Governmental Authorities for any storage tanks
installed in, on or under the Premises, the Building or the Project for the closure of any such
storage tanks. Tenant shall not be required, however, to provide Landlord with any portion of the
Documents containing information of a proprietary nature that, in and of themselves, do not contain
a reference to any Hazardous Materials or activities related to Hazardous Materials. Upon
Landlord’s written request, Tenant agrees that it shall enter into a written agreement with other
tenants of the Building and the Project concerning the equitable allocation of fire control areas
(as defined in the Uniform Building Code as adopted by the city or municipality(ies) in which the Project is located (the
“UBC”)) within the Building and the Project for the storage of Hazardous Materials. In the
event that Tenant’s use of Hazardous Materials is such that it utilizes fire control areas in the
Building or the Project in excess of Tenant’s Pro Rata Share of the Building or the Project, as
applicable, as set forth in Section 2.2, Tenant agrees that it shall, at its sole cost and
expense and upon Landlord’s written request, establish and maintain a separate area of the Premises
classified by the UBC as an “H” occupancy area for the use and storage of Hazardous Materials or
take such other action as is necessary to ensure that its share of the fire control areas of the
Building and the Project is not greater than Tenant’s Pro Rata Share of the Building or the
Project, as applicable.



29









 





     39.3. Notwithstanding the provisions of Section 39.1 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).



     39.4. 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. Tenant shall pay all reasonable costs of such tests of
the Premises.



     39.5. 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.



     39.6. Tenant’s obligations under this Article 39 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.



     39.7. 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.


40. [Intentionally omitted]



41. Miscellaneous.




     41.1. 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.



     41.2. 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.



     41.3. Time is of the essence with respect to the performance of every provision of this Lease
in which time of performance is a factor.



     41.4. Each provision of this Lease performable by Tenant shall be deemed both a covenant and a
condition.



     41.5. 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.



     41.6. 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.



     41.7. 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



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Lease shall remain in full force and effect and shall be interpreted as if the invalid, void or illegal
provision did not exist.




     41.8. Landlord may, but shall not be obligated to, record this Lease or a short form
memorandum hereof without Tenant’s consent. 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.



     41.9. 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.



     41.10. 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 41.10 shall in any way alter the provisions of this Lease
restricting assignment or subletting.



     41.11. 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 2.9 and 2.10, respectively. Either party may, by notice to the other
given pursuant to this Section, specify additional or different addresses for notice purposes.



     41.12. 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.



     41.13. 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.



     41.14. 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 audited
year-end financial statements reflecting Tenant’s current financial condition. Tenant shall,
within ninety (90) days after the end of Tenant’s financial year, furnish Landlord with a certified
copy of Tenant’s audited year-end financial statements for the previous year. 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.



     41.15. This Lease may be executed in one or more counterparts, each of which, when taken
together, shall constitute one and the same document.



     41.16. [Intentionally omitted]



     41.17. 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.


42. Options to Extend Term. Tenant shall have two (2) options (each, an “Option”)
to extend the Term of this Lease by three (3) years as to the entire Premises (and no less than the
entire Premises) upon the following terms and conditions. Any extension of the Term pursuant to an
Option shall be on all the same terms and conditions as this Lease, except as follows:




     42.1. Basic Annual Rent shall be adjusted on the first (1st) day of the extension
term and each annual anniversary date thereof in accordance with Article 6.



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     42.2. Neither Option is assignable separate and apart from this Lease.



     42.3. An Option is conditional upon Tenant giving Landlord written notice of its election to
exercise such Option at least six (6) months prior to the end of the expiration of the initial Term
of this Lease. Time shall be of the essence as to Tenant’s exercise of an Option. Tenant assumes
full responsibility for maintaining a record of the deadlines to exercise an Option. Tenant
acknowledges that it would be inequitable to require Landlord to accept any exercise of an Option
after the date provided for in this paragraph.



     42.4. Notwithstanding anything contained in this Article 42, 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 24 of the Lease
(provided, however, that, for purposes of this Subsection 42.4(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 two (2) or more times and a service or late charge has become payable under Section
24.1 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.




     42.5. 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 such Option because of the provisions of
Section 42.4.



     42.6. All of Tenant’s rights under the provisions of an Option shall terminate and be of no
further force or effect even after Tenant’s due and timely exercise of such Option if, after such
exercise, but prior to the 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 two (2) or more times and a service or late charge under Section
24.1 has become payable for any such default, whether or not Tenant has cured such defaults.]


43. [Intentionally omitted]



44. 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 Lease 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.



45. 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 Applicable Laws 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 such third parties 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.




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46. 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 that the Building and Project will not be
damaged by any exhaust, in each case from Tenant’s operations. Landlord and Tenant therefore agree
as follows:




     46.1. 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.



     46.2. 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 Laws 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.



     46.3. 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.



     46.4. Tenant’s responsibility to remove, eliminate and abate odors, fumes and exhaust shall
continue throughout the Term. Tenant shall install additional equipment as Landlord requires from
time to time under the preceding sentence. Such installations shall constitute Alterations.



     46.5. 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 exhaust, 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.


47. 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. 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.



48. Excavation. If any 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.




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49. Names. Landlord reserves the right to change the name of the Project or the Building
in its sole discretion.




[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]




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     IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the date first above
written.



	 	 	 	 	 
	LANDLORD:



BMR-3030 BUNKER HILL STREET LLC,

a Delaware limited liability company

 	 	 
	By:  	 	 	 
	 	Name:  	 	 	 
	 	Title:  	 	 	 
	 
	TENANT:



CYTRX CORPORATION,

a Delaware corporation

 	 	 
	By:  	 	 	 
	 	Name: 	 	 	 
	 	Title: