Exhibit
10.25


 


	
  

  	
  Southern California Chapter of the

  Society of Industrial and Office
  Realtors,® Inc.

  



INDUSTRIAL REAL
ESTATE LEASE

(SINGLE-TENANT FACILITY)


 


ARTICLE ONE.                                     BASIC TERMS


 


This Article One contains the Basic Terms of this Lease between
the Landlord and Tenant named below. 
Other Articles, Sections and Paragraphs of the Lease referred to in this
Article One explain and define the Basic Terms and are to be read in
conjunction with the Basic Terms.


 


Section 1.01  Date of Lease: February 24,
2003


 


Section 1.02  Landlord (include
legal entity): MAJESTIC-MAPA PROPERTIES, LLC, a California limited liability
company


 


Address of
Landlord:          13191 Crossroads Parkway, North, 6th Floor


City of Industry, CA  91746


 


Section 1.03  Tenant (include
legal entity):  GILEAD SCIENCES, INC., a
Delaware corporation


 


Address of Tenant:     333 Lakeside Drive


Foster City, CA  94404


 


Section 1.04  Property: (includes street address, approximate square
footage and description) that approximately 51,500 square foot building more commonly
known as 650 Cliffside Drive, San Dimas, California as outlined in red on
Exhibit “A”, subject to the non-exclusive use of such area outlined in green.


 


Section 1.05  Lease Term: 10 years 6 months beginning on June 1,
2003 or such other date as is specified in this Lease, and ending on November 30,
2013:


 


Section 1.06  Permitted Uses:
(See Article Five) Only for general office, laboratory, warehousing and
manufacturing of pharmaceutical products.


 


Section 1.07  Tenant’s
Guarantor:  (If none, so state)
None


 


Section 1.08  Brokers:
(See Article Fourteen) (If none, so state)


 


Landlord’s Broker:               Majestic Realty Co.


 


Tenant’s Broker:                  None


 


Section 1.09  Commission Payable to Landlord’s Broker: (See
Article Fourteen) $         per
separate agreement


 


Section 1.10  Initial
Security Deposit: (See Section 3.03) $59,225.00


 


Section 1.11  Vehicle
Parking Spaces Allocated to Tenant: 
per Exhibit “A”


 


Section 1.12  Rent and
Other Charges Payable by Tenant:


 


	
  © 1988

  	
   

  	
  Southern California
  Chapter

  	
  

  	
   

  	
   

  
	
   

  	
   

  	
  of the Society of
  Industrial

  	
   

  	
   

  
	
   

  	
   

  	
  and Office Realtors,®
  Inc.

  	
                   (Single-Tenant
  Net Form)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  [Gilead Sciences, Inc.]

  
	
   

  	
   

  	
   

  	
   

  	
  [650 Cliffside I, San
  Dimas, CA]

  



 


1





















 


(a)  BASE RENT: 
FIFTY-NINE THOUSAND TWO HUNDRED TWENTY-FIVE AND NO/100 --- Dollars
($59,225.00) per month for the first sixty (60) months, as provided in Section 3.01,
and shall be increased on the first day of the sixty-first (61st)
month(s) after the Commencement Date, SIXTY-FIVE THOUSAND ONE HUNDRED
FORTY-SEVEN AND 50/100 DOLLARS ($65,147.50).


 


(b)  OTHER PERIODIC PAYMENTS:  (i) Real Property Taxes (See Section 4.02);
(ii) Utilities (See Section 4.03); (iii) Insurance Premium (See Section 4.04);
(iv) Impounds for Insurance Premiums and Property Taxes (See Section 4.07);
(v) Maintenance, Repairs and Alterations (See Article Six).


 


Section 1.13  Landlord’s
Share of Profit on Assignment or Sublease:  (See Section 9.05) fifty percent (50%)
of the Profit (the “Landlord’s Share”).


 


Section 1.14  Riders.  The following Riders are attached to and made
a part of this Lease.  (If none, so
state)


 


Addendum pages 1 through 11, and Exhibits “A”, “B”, “C” and “D”


 


ARTICLE TWO.         LEASE TERM


 


Section 2.01  Lease of Property For
Lease Term.  Landlord leases
the Property to Tenant and Tenant leases the Property from Landlord for the
Lease Term.  The Lease Term is for the
period stated in Section 1.05 above and shall begin and end on the dates
specified in Section 1.05 above, unless the beginning or end of the Lease
Term is changed under any provision of this Lease.  The “Commencement Date” shall be the date
specified in Section 1.05 above for the beginning of the Lease Term,
unless advanced or delayed under any provision of this Lease.


 


Section 2.02  See Addendum Section 2.02


 


Section 2.03  Intentionally Deleted.


 


Section 2.04  Holding
Over.  Tenant shall vacate the
Property upon the expiration or earlier termination of this Lease.  Tenant shall reimburse Landlord for and
indemnify Landlord against all damages which Landlord incurs from Tenant’s
delay in vacating the Property.  If
Tenant does not vacate the Property upon the expiration or earlier termination
of the Lease and Landlord thereafter accepts rent from Tenant, Tenant’s
occupancy of the Property shall be a “month-to-month” tenancy, subject to all
of the terms of this Lease applicable to a month-to-month tenancy, except that
the Base Rent then in effect shall be increased by twenty-five percent (25%).


 


Section 2.05  See Addendum.


 


ARTICLE THREE.                   BASE RENT


 


Section 3.01  Time and
Manner of Payment.  Upon
execution of this Lease, Tenant shall pay Landlord the Base Rent in the amount
stated in Paragraph 1.12(a) above for the first month of the Lease Term.  On the first day of the second month of the
Lease Term and each month thereafter, Tenant shall pay Landlord the Base Rent,
in advance, without offset, deduction or prior demand.  The Base Rent shall be payable at Landlord’s
address or at such other place as Landlord may designate in writing.


 


Section 3.02  Intentionally Deleted.


 


Section 3.03  Security
Deposit; increases.


 


(a)  Upon the execution of this Lease, Tenant
shall deposit with Landlord a cash Security Deposit in the amount set forth in Section 1.10
above.  Landlord may apply all or part of
the Security Deposit to any unpaid rent or other charges due from Tenant or to
cure any other defaults of Tenant.  If
Landlord uses any part of the 


 


2





















 


Security Deposit, Tenant shall restore the Security Deposit to its full
amount within ten (10) days after Landlord’s written request.  Tenant’s failure to do so shall be a material
default under this Lease.  No interest
shall be paid on the Security Deposit. 
Landlord shall not be required to keep the Security Deposit separate
from its other accounts and no trust relationship is created with respect to
the Security Deposit.


 


(b)  Each time the Base Rent is increased, Tenant
shall deposit additional funds with Landlord sufficient to increase the
Security Deposit to an amount which bears the same relationship to the adjusted
Base Rent as the initial Security Deposit bore to the initial Base Rent.


 


Section 3.04  Termination;
Advance Payments.  Upon
termination of this Lease under Article Seven (Damage or Destruction), Article Eight
(Condemnation) or any other termination not resulting from Tenant’s default,
and after Tenant has vacated the Property in the manner required by this Lease,
Landlord shall (within sixty (60) days from Tenant delivering exclusive possession
of the Property to Landlord) refund to Tenant (or Tenant’s successor) the
unused portion of the Security Deposit, any advance rent or other advance
payments made by Tenant to Landlord, and any amounts paid for real property
taxes and other reserves which apply to any time periods after termination of
the Lease.


 


ARTICLE FOUR.                         OTHER CHARGES PAYABLE BY
TENANT


 


Section 4.01  Additional
Rent.  All charges payable by
Tenant other than Base Rent are called “Additional Rent.”  Unless this Lease provides otherwise, Tenant
shall pay all Additional Rent then due with the next monthly installment of
Base Rent.  The term “rent” shall mean
Base Rent and Additional Rent.


 


Section 4.02  Property
Taxes.


 


(a)  Real
Property Taxes.  Tenant shall
pay all real property taxes on the Property (including any fees, taxes or
assessments against, or as a result of , any tenant improvements installed on
the Property by or for the benefit of Tenant) during the Lease Term.  Subject to Paragraph 4.02(c) and Section 4.07
below, such payment shall be made at least ten (10) -days prior to the
delinquency date of the taxes.  Within
such ten (10)-day period, Tenant shall furnish Landlord with satisfactory
evidence that the real property taxes have been paid.  Landlord shall reimburse Tenant for any real
property taxes paid by Tenant covering any period of time prior to or after the
Lease Term.  If Tenant fails to pay the
real property taxes when due, Landlord may pay the taxes and Tenant shall
reimburse Landlord for the amount of such tax payment as Additional Rent.


 


(b)  Definition
of “Real Property Tax.”  “Real
property tax” means:  (i) any fee,
license fee, license tax, business license fee, commercial rental tax, levy,
charge, assessment, penalty (to the extent caused by Tenant’s acts or
omissions) or tax imposed by any taxing authority against the Property;
(ii) any tax on the Landlord’s right to receive, or the receipt of, rent
or income from the Property or against Landlord’s business of leasing the
Property; (iii) any tax or charge for fire protection, streets, sidewalks,
road maintenance, refuse or other services provided to the Property by any
governmental agency; (iv) any tax imposed upon this transaction or based upon a
re-assessment of the Property due to a change of ownership, as defined by
applicable law, or other transfer of all or part of Landlord’s interest in the
Property; and (v) any charge or fee replacing any tax previously included
within the definition of real property tax. 
“Real property tax” does not, however, include Landlord’s federal or
state income, franchise, inheritance or estate taxes.


 


(c)  Joint
Assessment.  If the Property
is not separately assessed, Landlord shall reasonably determine Tenant’s share
of the real property tax payable by Tenant under Paragraph 4.02(a) from the
assessor’s worksheets or other reasonably available information.  Tenant shall pay such share to Landlord
within fifteen (15) days after receipt of Landlord’s written statement.


 


3





















 


(d)  Personal
Property Taxes.


 


(i)            Tenant shall pay all taxes charged
against trade fixtures, furnishings, equipment or any other personal property
belonging to Tenant.  Tenant shall try to
have personal property taxed separately from the Property.


 


(ii)           If any of Tenant’s personal property is
taxed with the Property, Tenant shall pay Landlord the taxes for the personal
property within fifteen (15) days after Tenant receives a written statement
from Landlord for such personal property taxes.


 


(e)  Tenant’s
Right to Contest Taxes.  Tenant
may attempt to have the assessed valuation of the Property reduced or may
initiate proceedings to contest the real property taxes.  If required by law, Landlord shall join in
the proceedings brought by Tenant. 
However, Tenant shall pay all costs of the proceedings, including any
costs or fees incurred by Landlord.  Upon
the final determination of any proceeding or contest, Tenant shall immediately
pay the real property taxes due, together with all costs, charges, interest and
penalties incidental to the proceedings. 
If Tenant does not pay the real property taxes when due and contests
such taxes, Tenant shall not be in default under this Lease for nonpayment of
such taxes if Tenant deposits funds with Landlord or opens an interest-bearing
account reasonably acceptable to Landlord in the joint names of Landlord and
Tenant.  The amount of such deposit shall
be sufficient to pay the real property taxes plus a reasonable estimate of the
interest, costs, charges and penalties which may accrue if Tenant’s action is
unsuccessful, less any applicable tax impounds previously paid by Tenant to
Landlord.  The deposit shall be applied
to the real property taxes due, as determined at such proceedings.  The real property taxes shall be paid under
protest from such deposit if such payment under protest is necessary to prevent
the Property from being sold under a “tax sale” or similar enforcement
proceeding.


 


Section 4.03  Utilities.  Tenant shall pay, directly to the
appropriate supplier, the cost of all natural gas, heat, light, power, sewer
service, telephone, water, refuse disposal and other utilities and services
supplied to the Property.  However, if
any services or utilities are jointly metered with other property, Landlord
shall make a reasonable determination of Tenant’s proportionate share of the
cost of such utilities and services and Tenant shall pay such share to landlord
within fifteen (15) days after receipt of Landlord’s written statement.


 


Section 4.04  Insurance
Policies.


 


(a)  Liability
Insurance.  During the Lease
Term, Tenant shall maintain a policy of commercial general liability insurance
(sometimes known as broad form comprehensive general liability insurance)
insuring Tenant against liability for bodily injury, property damage (including
loss of use of property) and personal injury arising out of the operation, use
or occupancy of the Property.  Tenant
shall name Landlord as an additional insured under such policy.  The initial amount of such insurance shall be
Three Million Dollars ($3,000,000) per occurrence and shall be subject to
periodic increase based upon industry standards for similar facilities.  The liability insurance obtained by Tenant
under this Paragraph 4.04(a) shall (i) be primary and non-contributing;
(ii) contain cross-liability endorsements; and (iii) insure Landlord
against Tenant’s performance under Section 5.05, if the matters giving
rise to the indemnity under Section 5.05 result from the negligence of
Tenant.  The amount and coverage of such
insurance shall not limit Tenant’s liability nor relieve Tenant of any other
obligation under this Lease.  Landlord
may also obtain comprehensive public liability insurance in an amount and with
coverage determined by Landlord insuring Landlord against liability arising out
of ownership, operation, use or occupancy of the Property.  The policy obtained by Landlord shall not be
contributory and shall not provide primary insurance.


 


(b)  Property
and Rental Income Insurance. 
During the Lease Term, Landlord shall maintain policies of insurance
covering loss of or damage to the Property in the full amount of its
replacement value.  Such policy shall
provide protection against loss or damage due to fire or other casualties
covered within the classification of fire standard extended coverage,
vandalism, malicious mischief, sprinkler leakage and any other perils which
landlord deems reasonably necessary. 
Landlord shall have the right to obtain terrorism, flood and earthquake
insurance and other forms of insurance as required by any lender holding a
security interest in the Property. 
Landlord shall not obtain insurance for Tenant’s fixtures or equipment
or building improvements installed by Tenant 


 


4





















 


on the Property.  During the
Lease Term, Landlord shall also maintain a rental income insurance policy, with
loss payable to Landlord, in an amount equal to one year’s Base Rent, plus
estimated real property taxes and insurance premiums.  Tenant shall be liable for the payment of any
deductible amount under Landlord’s or Tenant’s insurance policies maintained
pursuant to this Section 4.04; provided however Landlord’s insurance
deductible shall not exceed Ten Thousand Dollars ($10,000).  Tenant shall not do or permit anything to be
done which invalidates any such insurance policies.  Upon Tenant’s request, Landlord shall provide
Tenant a certificate evidencing such insurance.


 


(c)  Payment of
Premiums.  Subject to Section 4.07,
Tenant shall pay all premiums for the insurance policies described in
Paragraphs 4.04(a) and (b) (whether obtained by Landlord or Tenant) within
fifteen (15) days after Tenant’s receipt of a copy of the premium statement or
other evidence of the amount due, except Landlord shall pay all premiums for
non-primary comprehensive public liability insurance which Landlord elects to
obtain as provided in Paragraph 4.04(a). 
If insurance policies maintained by Landlord cover improvements on real
property other than the Property, Landlord shall deliver to Tenant a statement
of the premium applicable to the Property showing in reasonable detail how
Tenant’s share of the premium was computed. 
If the Lease Term expires before the expiration of an insurance policy
maintained by Landlord, Tenant shall be liable for Tenant’s prorated share of
the insurance premiums.  Before the
Commencement Date, Tenant shall deliver to Landlord a copy of any policy of
insurance which Tenant is required to maintain under this Section 4.04.  At least thirty (30) days prior to the
expiration of any such policy, Tenant shall deliver to Landlord a renewal of
such policy.  As an alternative to
providing a policy of insurance, Tenant shall have the right to provide
Landlord a certificate of insurance, executed by an authorized officer of the
insurance company, showing that the insurance which Tenant is required to
maintain under this Section 4.04 is in full force and effect and
containing such other information which Landlord reasonably requires.


 


(d)  General
Insurance Provisions.


 


(i)            Any insurance which Tenant is required to
maintain under this Lease shall include a provision which requires the
insurance carrier to give Landlord not less than thirty (30) days’ written
notice prior to any cancellation or modification of such coverage.


 


(ii)           If Tenant fails to deliver any policy,
certificate or renewal to Landlord required under this Lease within the
prescribed time period or if any such policy is cancelled or modified during
the Lease Term without Landlord’s consent, Landlord may obtain such insurance,
in which case Tenant shall reimburse Landlord for the cost of such insurance
within fifteen (15) days after receipt of a statement that indicates the cost
of such insurance.


 


(iii)          Landlord and Tenant shall maintain all
insurance required under this Lease with companies holding a “General Policy
Rating” of A-12 or better, as set forth in the most current issue of “Best Key
Rating Guide.”  Landlord and Tenant
acknowledge the insurance markets are rapidly changing and that insurance in
the form and amounts described in this Section 4.04 may not be available
in the future.  Tenant acknowledges that
the insurance describe in this Section 4.04 is for the primary benefit of
Landlord.  If at any time during the
Lease Term, Tenant or Landlord is unable to maintain the insurance required
under the Lease, Landlord and Tenant shall nevertheless maintain insurance
coverage which is customary and commercially reasonable in the insurance
industry for Tenant’s type of business, as that coverage may change from time
to time.  Landlord makes no
representation as to the adequacy of such insurance to protect Landlord’s or
Tenant’s interests.  Therefore, Tenant
shall obtain any such additional property or liability insurance which Tenant
deems necessary to protect Landlord and Tenant.


 


(iv)          Landlord and Tenant each hereby waive any
and all rights of recovery against the other, or against the officers,
employees, agents or representatives of the other, for loss of or damage to its
property or the property of others under its control, if such loss or damage is
covered by any insurance policy in force (whether or not described in this
Lease) at the time of such loss or damage. 
Upon obtaining the required policies of insurance, Landlord and Tenant
shall give notice to the insurance carriers of this mutual waiver of 


 


5





















 


subrogation.  Landlord’s and Tenant’s insurance policies
described in this Section shall contain a provision waiving the carrier’s
right to subrogation.


 


Section 4.05  Late Charges.  Tenant’s failure to pay rent promptly may
cause Landlord to incur unanticipated costs. 
The exact amount of such costs are impractical or extremely difficult to
ascertain.  Such costs may include, but
are not limited to, processing and accounting charges and late charges which
may be imposed on Landlord by any ground lease, mortgage or trust deed
encumbering the Property.  Therefore, if
Landlord does not receive any rent payment within ten (10) days after it becomes
due, provided Landlord has given Tenant forty-eight (48) hours written notice
and Tenant has still failed to pay such Base Rent (which forty-eight (48) shall
run concurrently with such ten (10) day period), Tenant shall pay Landlord a
late charge equal to eight percent (8%) of the overdue amount.  The parties agree that such late charge
represents a fair and reasonable estimate of the costs Landlord will incur by
reason of such late payment.


 


Section 4.06  Interest on
Past Due Obligations.  Any
amount owed by one party hereunder to the other which is not paid when due
shall bear interest at the rate of fifteen percent (15%) per annum from the due
date of such amount.  However, interest
shall not be payable on late charges to be paid by Tenant under this Lease.  The payment of interest on such amounts shall
not excuse or cure any default under this Lease.  If the interest rate specified in this Lease
is higher than the rate permitted by law, the interest rate is hereby decreased
to the maximum legal interest rate permitted by law.


 


Section 4.07  Impounds
for Insurance Premiums and Real Property Taxes. 
If Tenant is more than ten (10) days late in the payment of
Base Rent more than twice in any consecutive twelve (12) -month period, Tenant
shall pay Landlord a sum equal to one-twelfth (1/12) of the annual real
property taxes and insurance premiums payable by Tenant under this Lease,
together with each payment of Base Rent. 
Landlord shall hold such payments in a non-interest bearing impound
account.  If unknown, Landlord shall
reasonably estimate the amount of real property taxes and insurance premiums
when due.  Tenant shall pay any
deficiency of funds in the impound account to Landlord upon written
request.  If Tenant defaults under this
Lease, Landlord may apply any funds in the impound account to any obligation
then due under this Lease.


 


Section 4.08  See Addendum.


 


ARTICLE FIVE.                                USE OF PROPERTY


 


Section 5.01  Permitted Uses. 
Tenant may use the Property only for the Permitted Uses set forth in Section 1.06
above.


 


Section 5.02  Manner of
Use.  Tenant shall not cause
or permit the Property to be used in any way which constitutes a violation of
any law, ordinance, or governmental regulation or order, which annoys or
interferes with the rights of other tenants of Landlord, or which constitutes a
nuisance or waste.  Tenant shall obtain
and pay for all permits, including a Certificate of Occupancy, required for
Tenant’s occupancy of the Property and shall promptly take all actions
necessary to comply with all applicable statutes, ordinances, rules, regulations,
orders and requirements regulating the use by Tenant of the Property, including
the Occupational Safety and Health Act.


 


See Addendum Section 5.02.


 


Section 5.03  See Addendum Section 5.03.


 


Section 5.04  Signs and
Auctions.  Tenant shall not
place any signs on the Property without Landlord’s prior written consent.  Tenant shall not conduct or permit any
auctions or sheriff’s sales at the Property.


 


See Addendum Section 5.04.


 


6





















 


Section 5.05  Indemnity.  Tenant shall indemnify Landlord against and
hold Landlord harmless from any and all costs, claims or liability arising
from:  (a) Tenant’s use of the Property;
(b) the conduct of Tenant’s business or anything else done or permitted by
Tenant to be done in or about the Property; (c) any breach or default in the
performance of Tenant’s obligations under this Lease; (d) any
misrepresentations or breach of warranty by Tenant under this lease; or (e)
other acts or omissions of Tenant. 
Tenant shall defend Landlord against any such cost, claim or liability
at Tenant’s expense with counsel reasonably acceptable to Landlord or, at
Landlord’s election, Tenant shall reimburse Landlord for any legal fees or
costs incurred by Landlord in connection with any such claim.  As a material part of the consideration to
landlord, Tenant assumes all risk of damage to property or injury to persons in
or about the Property arising from any cause, and Tenant hereby waives all
claims in respect thereof against Landlord, except for any claim arising out of
Landlord’s or Landlord’s employees’, agents’ or contractors’ active negligence
or willful misconduct.  As used in this
Section, the term “Tenant” shall include Tenant’s employees, agents,
contractors and invitees, if applicable.


 


See Addendum Section 5.05.


 


Section 5.06  Landlord’s
Access.  Landlord or its
agents may enter the Property at all reasonable times to show the Property to
potential buyers, investors or tenants or other parties; to do any other act or
to inspect and conduct tests in order to monitor Tenant’s compliance with all
applicable environmental laws and all laws governing the presence and use of
Hazardous Material; or for any other purpose Landlord deems necessary.  Landlord shall give Tenant 24-hour prior notice
of such entry, except in the case of an emergency and Landlord agrees to allow
a representative of Tenant to accompany Landlord and further agrees to comply
with Tenant’s reasonable security measures. 
Landlord may place customary “For Sale” or “For Lease” signs on the
Property.


 


Section 5.07  Quiet
Possession.  If Tenant pays
the rent and complies with all other terms of this Lease, Tenant may occupy and
enjoy the Property for the full Lease Term, subject to the provisions of this
Lease.


 


ARTICLE SIX.                  CONDITION OF PROPERTY; MAINTENANCE,
REPAIRS AND ALTERATIONS


 


Section 6.01  Existing
Conditions.  Subject to the
provisions of this Lease, Tenant accepts the Property in its condition as of
the execution of the Lease, subject to all recorded matters, laws, ordinances,
and governmental regulations and orders. 
Except as provided herein, Tenant acknowledges that neither Landlord nor
any agent of Landlord has made any representation as to the condition of the
Property or the suitability of the Property for Tenant’s intended use.  Tenant represents and warrants that Tenant
has made its own inspection of and inquiry regarding the condition of the
Property and is not relying on any representations of Landlord or any Broker
with respect thereto.  If Landlord or
Landlord’s Broker has provided a Property Information Sheet or other Disclosure
Statement regarding the Property, a copy is attached as an exhibit to the
Lease.


 


Section 6.02  Exemption
of Landlord from Liability. 
Landlord shall not be liable for any damage or injury to the person,
business (or any loss of income therefrom), goods, wares, merchandise or other
property of Tenant, Tenant’s employees, invitees, customers or any other person
in or about the Property, whether such damage or injury is caused by or results
from:  (a) fire, steam, electricity,
water, gas or rain; (b) the breakage, leakage, obstruction or other defects of
pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting
fixtures or any other cause; (c) conditions arising in or about the Property or
from other sources or places; or (d) any act or omission of any other tenant of
Landlord.  Landlord shall not be liable
for any such damage or injury even though the cause of or the means of repairing
such damage or injury are not accessible to Tenant.  The provisions of this Section 6.02
shall not, however, exempt Landlord from liability for Landlord’s or Landlord’s
employees’, agents’ or contractors’ active negligence or willful misconduct.


 


Section 6.03  Landlord’s
Obligations.  See Addendum Section 6.03.


 


Section 6.04  Tenant’s
Obligations.


 


7





















 


(a)  Except as provided in Section 6.03, Article Seven
(Damage or Destruction) and Article Eight (Condemnation), Tenant shall
keep all portions of the Property (including structural, nonstructural,
interior, exterior, and landscaped areas, portions, systems and equipment) in
good order, condition and repair (including interior repainting and
refinishing, as needed).  If any portion
of the Property or any system or equipment in the Property which Tenant is
obligated to repair cannot be fully repaired or restored, Tenant shall promptly
replace such portion of the Property or system or equipment in the Property,
regardless of whether the benefit of such replacement extends beyond the Lease
Term; but if the benefit or useful life of such replacement extends beyond the
Lease Term (as such term may be extended by exercise of any options), the
useful life of such replacement shall be prorated over the remaining portion of
the Lease Term (as extended), and Tenant shall be liable only for that portion
of the of the cost which is applicable to the Lease Term (as extended).  Tenant shall maintain a preventive
maintenance contract providing for the regular inspection and maintenance of
the heating and air conditioning system by a licensed heating and air
conditioning contractor.  Subject to the
provisions of Section 4.04(d)(iv), if any part of the Property is damaged
by any act or omission of Tenant, Tenant shall pay Landlord the cost of
repairing or replacing such damaged property, whether or not Landlord would
otherwise be obligated to pay the cost of maintaining or repairing such
property.  It is the intention of Landlord
and Tenant that at all times Tenant shall maintain the portions of the Property
which Tenant is obligated to maintain in an attractive, first-class and fully
operative condition.


 


(b)  Tenant shall fulfill all of Tenant’s
obligations under this Section 6.04 at Tenant’s sole expense.  If Tenant fails to maintain, repair or
replace the Property as required by this Section 6.04 or is not using all
reasonable efforts to do so, Landlord may, upon ten (10) days’ prior notice to
Tenant (except that no notice shall be required in the case of an emergency),
enter the Property and perform such maintenance or repair (including
replacement, as needed) on behalf of Tenant. 
In such case, Tenant shall reimburse Landlord for all costs incurred in
performing such maintenance or repair immediately upon demand.


 


Section 6.05  Alterations,
Additions, and Improvements.


 


(a)  Tenant shall not make any alterations,
additions, or improvements to the Property without Landlord’s prior written
consent, which shall not be unreasonably withheld except for non-structural alterations
which do not exceed Sixty Thousand Dollars ($60,000) in cost per project and
which are not visible from the outside of any building of which the Property is
part.  Landlord may require Tenant to
provide demolition and/or lien and completion bonds in form and amount
satisfactory to Landlord.  Tenant shall
promptly remove any alterations, additions, or improvements constructed in
violation of this Paragraph 6.05(a) upon Landlord’s written request.  All alterations, additions, and improvements
shall be done in a good and workmanlike manner, in conformity with all
applicable laws and regulations, and by a contractor approved by Landlord,
which shall not be unreasonably withheld. 
Upon completion of any such work, Tenant shall provide Landlord with “as
built” plans, copies of all construction contracts, and proof of payment for
all labor and materials.


 


(b)  Tenant shall pay when due all claims for
labor and material furnished to or for the Tenant Group at the Property.  Tenant shall give Landlord at least twenty
(20) days’ prior written notice of the commencement of any work on the
Property, regardless of whether Landlord’s consent to such work is
required.  Landlord may elect to record
and post notices of non-responsibility on the Property.


 


Section 6.06  Condition
upon Termination.  Upon the
termination of the Lease, Tenant shall surrender the Property to Landlord,
broom clean and in the same condition as received except for ordinary wear and
tear which Tenant was not otherwise obligated to remedy under any provision of
this Lease.  However, Tenant shall not be
obligated to repair any damage which Landlord is required to repair in
accordance with this Lease.  In addition,
Landlord may require Tenant to remove any alterations, additions or
improvements (whether or not made with Landlord’s consent) prior to the
expiration of the Lease and to restore the Property to its prior condition, all
at Tenant’s expense.  All alterations,
additions and improvements which Landlord has not required Tenant to remove
shall become Landlord’s property and shall be surrendered to Landlord upon the
expiration or earlier termination of the Lease, except that Tenant may remove
any of Tenant’s trade fixtures, machinery or equipment which can be removed
without material damage to the Property. 
Tenant shall repair, at Tenant’s expense, any damage to the Property
caused by the removal of any such trade fixtures, machinery or equipment.  In no event, however, shall Tenant remove any
of the following materials or equipment (which shall be deemed Landlord’s
property) without 


 


8





















 


Landlord’s prior written consent; any power writing or power panels;
lighting or lighting fixtures; wall coverings; drapes, blinds or other window
coverings; carpets or other floor coverings; heaters, air conditioners or any
other heating or air conditioning equipment; fencing or security gates; or
other similar building operating equipment and decorations.


 


See Addendum Section 6.06.


 


ARTICLE SEVEN.                    DAMAGE OR DESTRUCTION


 


Section 7.01  Partial
Damage to Property.


 


(a)  Tenant shall notify Landlord in writing
immediately upon the occurrence of any damage to the Property.  If the Property is only partially damaged
(i.e., less than fifty percent (50%) of the Property is untenantable as a
result of such damage or less than fifty percent (50%) of Tenant’s operations
are materially impaired) and if the proceeds received by Landlord from the
insurance policies described in Paragraph 4.04(b) are sufficient to pay for the
necessary repairs, this Lease shall remain in effect and Landlord shall repair
the damage as soon as reasonably possible. 
Landlord may elect (but is not required) to repair any damage to Tenant’s
fixtures, equipment, or improvements.


 


(b)  If  (i)  Landlord has maintained the
insurance required to be maintained under Paragraph 4.04(b) and the insurance
proceeds received by Landlord are not sufficient to pay the entire cost of
repair; (ii) or if the cause of the damage is not covered by such
insurance policies; or (iii) the holder of any mortgage on the Property
shall require that the insurance proceeds or any portion thereof be used to
retire the mortgage debt, Landlord may elect either to (i) repair the
damage as soon as reasonably possible, in which case this Lease shall remain in
full force and effect, or (ii) terminate this Lease as of the date the
damage occurred.  Landlord shall notify
Tenant within thirty (30) days after receipt of notice of the occurrence of the
damage whether Landlord elects to repair the damage or terminate the
Lease.  If Landlord elects to repair the
damage, Tenant shall pay Landlord the “deductible amount” (if any) under
Landlord’s insurance policies and, if the damage was due to an act or omission
of Tenant, or Tenant’s employees, agents, contractors or invitees, the
difference between the actual cost of repair and any insurance proceeds
received by Landlord.  If Landlord elects
to terminate this Lease, Tenant may elect to continue this Lease in full force
and effect, in which case Tenant shall repair any damage to the Property and
any building in which the Property is located. 
Tenant shall pay the cost of such repairs, except that upon satisfactory
completion of such repairs, Landlord shall deliver to Tenant any insurance
proceeds received by Landlord for the damage repaired by Tenant.  Tenant shall give Landlord written notice of
such election within ten (10) days after receiving Landlord’s termination
notice.


 


(c)  If the damage to the Property occurs during
the last six (6) months of the Lease Term and such damage will require more
than thirty (30) days to repair, either Landlord or Tenant may elect to
terminate this Lease as of the date the damage occurred, regardless of the
sufficiency of any insurance proceeds. 
The party electing to terminate this Lease shall give written
notification to the other party of such election within thirty (30) days after
Tenant’s notice to Landlord of the occurrence of the damage.


 


Section 7.02  Substantial
or Total Destruction.  If the
Property is substantially or totally destroyed by any cause whatsoever (i.e.,
the damage to the Property is greater than partial damage as described in Section 7.01),
and regardless of whether Landlord receives any insurance proceeds, this Lease
shall terminate the later of the (i) date the destruction occurred and (ii) the
date Tenant ceases to do business at the Property.  Notwithstanding the preceding sentence, if
the Property can be rebuilt within six (6) months after the date of
destruction, Landlord may elect to rebuild the Property at Landlord’s own
expense, in which case this Lease shall remain in full force and effect.  Landlord shall notify Tenant of such election
within thirty (30) days after Tenant’s notice of the occurrence of total or
substantial destruction.  If Landlord so
elects, Landlord shall rebuild the Property at Landlord’s sole expense, except
that if the destruction was caused by an act or omission of Tenant, Tenant
shall pay Landlord the difference between the actual cost of rebuilding and any
insurance proceeds received by Landlord.


 


9





















 


Section 7.03  Temporary
Reduction of Rent.  If the
Property is destroyed or damaged and Landlord or Tenant repairs or restores the
Property pursuant to the provisions of this Article Seven, any rent
payable during the period of such damage, repair and/or restoration shall be
reduced according to the degree, if any, to which Tenant’s use of the Property
is impaired.  Except for such possible
reduction in Base Rent, insurance premiums and real property taxes, Tenant
shall not be entitled to any compensation, reduction, or reimbursement from
Landlord as a result of any damage, repair, or restoration of or to the
Property.


 


Section 7.04  Waiver.  Tenant waives the protection of any statute,
code or judicial decision which grants a tenant the right to terminate a lease
in the event of the substantial or total destruction of the leased
property.  Tenant agrees that the
provisions of Section 7.02 above shall govern the rights and obligations
of Landlord and Tenant in the event of any substantial or total destruction to
the Property.


 


ARTICLE EIGHT.                      CONDEMNATION


 


If all or any portion of the Property is taken under the power of
eminent domain or sold under the threat of that power (all of which are called “Condemnation”),
this Lease shall terminate as to the part taken or sold on the date the
condemning authority takes title or possession, whichever occurs first.  If more than twenty percent (20%) of the
floor area of the building in which the Property is located, or which is
located on the Property, is taken, either Landlord or Tenant may terminate this
Lease as of the date the condemning authority takes title or possession, by
delivering written notice to the other within ten (10) days after receipt of
written notice of such taking (or in the absence of such notice, within ten
(10) days after the condemning authority takes title or possession).  If neither Landlord nor Tenant terminates
this Lease, this Lease shall remain in effect as to the portion of the Property
not taken, except that the Base Rent and Additional Rent shall be reduced in
proportion to the reduction in the floor area of the Property.  Any Condemnation award or payment shall be
distributed in the following order:  (a)
first, to any ground lessor, mortgagee or beneficiary under a deed of trust
encumbering the Property, the amount of its interest in the Property; (b)
second, to Tenant, only the amount of any award specifically designated for
loss of or damage to Tenant’s trade fixtures or removable personal property,
and (c) third, to Landlord, the remainder of such award, whether as
compensation for reduction in the value of the leasehold, the taking of the
fee, or otherwise.  If this Lease is not
terminated, Landlord shall repair any damage for which Tenant has been
reimbursed by the condemning authority. 
If the severance damages received by Landlord are not sufficient to pay
for such repair, Landlord shall have the right to either terminate this Lease
or make such repair at Landlord’s expense.


 


ARTICLE NINE.                             ASSIGNMENT AND
SUBLETTING


 


Section 9.01  Landlord’s
Consent Required.  No portion
of the Property or of Tenant’s interest in this Lease may be acquired by any
other person or entity, whether by sale, assignment, mortgage, sublease,
transfer, operation of law, or act of Tenant, without Landlord’s prior written
consent, except as provided in Section 9.02 below.  Landlord has the right to grant or withhold
its consent as provided in Section 9.05 below.  Any attempted transfer without consent shall
be void and shall constitute a non-curable breach of this Lease.


 


Section 9.02  Tenant
Affiliate.  See Addendum Section 9.02.


 


Section 9.03  No Release
of Tenant.  No transfer
permitted by this Article Nine, whether with or without Landlord’s
consent, shall release Tenant or change Tenant’s primary liability to pay the
rent and to perform all other obligations of Tenant under this Lease.  Landlord’s acceptance of rent from any other
person is not a waiver of any provision of this Article Nine.  Consent to one transfer is not a consent to
any subsequent transfer.  If Tenant’s
transferee defaults under this Lease, Landlord may proceed directly against
Tenant without pursuing remedies against the transferee.  Landlord may consent to subsequent
assignments or modifications of this Lease by Tenant’s transferee, without
notifying Tenant or obtaining its consent. 
Such action shall not relieve Tenant’s liability under this Lease.


 


Section 9.04  Offer to
Terminate.  If Tenant desires to
assign the Lease or sublease all of the Property, and if Landlord elects to
terminate this Lease pursuant to Section 9.05, the Lease shall terminate
as of the 


 


10





















 


commencement date of a new lease between Landlord and the proposed
assignee or subtenant and all the terms and provisions of the Lease governing
termination shall apply.  If Landlord
does not so elect, the Lease shall continue in effect until otherwise terminated
and the provisions of Section 9.05 with respect to any proposed transfer
shall continue to apply.


 


Section 9.05  Landlord’s
Consent.


 


(a)  Tenant’s request for consent to any transfer
described in Section 9.01 shall set forth in writing the details of the
proposed transfer, including the name, business and financial condition of the
prospective transferee, financial details of the proposed transfer (e.g., the
term of and the rent and security deposit payable under any proposed assignment
or sublease), and any other information Landlord reasonably deems
relevant.  Landlord shall have the right
to elect to terminate this Lease or to withhold consent, if reasonable, or to
grant consent, based on the following factors: 
(i) the business of the proposed assignee or subtenant and the proposed
use of the Property; (ii) the net worth and financial reputation of the
proposed assignee or subtenant; and (iii) Tenant’s compliance with all of its
obligations under the Lease.  If Landlord
objects to a proposed assignment solely because of the net worth and/or
financial reputation of the proposed assignee, Tenant may nonetheless sublease
(but not assign), all or a portion of the Property to the proposed transferee,
but only on the other terms of the proposed transfer.


 


(b)  If Tenant assigns or subleases, the following
shall apply:


 


(i)            If Tenant assigns or subleases more than
seventy percent (70%) of the building located on the Property, in the
aggregate, then Tenant shall pay to Landlord as Additional Rent under the Lease
the Landlord’s Share (stated in Section 1.13) of the Profit (defined
below) on such transaction as and when received by Tenant, unless Landlord
gives written notice to Tenant and the assignee or subtenant that Landlord’s
Share shall be paid by the assignee or subtenant to Landlord directly.  The “Profit” means (A) all amounts paid to
Tenant for such assignment or sublease, including “key” money, monthly rent in
excess of the monthly rent payable under the Lease, and all fees and other
consideration paid for the assignment or sublease, including fees under any
collateral agreements, less (B) costs and expenses directly incurred by Tenant
in connection with the execution and performance of such assignment or sublease
for real estate broker’s commissions and costs of renovation or construction of
tenant improvements required under such assignment or sublease.  Tenant is entitled to recover such costs and
expenses before Tenant is obligated to pay the Landlord’s Share to
Landlord.  The Profit in the case of a
sublease of less than all the Property is the rent allocable to the subleased
space as a percentage on a square footage basis.


 


(ii)           Tenant shall provide Landlord a written
statement certifying all amounts to be paid from any assignment or sublease of
the Property within thirty (30) days after the transaction documentation is
signed, and Landlord may inspect Tenant’s relevant books and records to verify
the accuracy of such statement.  On
written request, Tenant shall promptly furnish to Landlord copies of all the
transaction documentation, all of which shall be certified by Tenant to be
complete, true and correct.  Landlord’s
receipt of Landlord’s Share shall not be a consent to any further assignment or
subletting.  The breach of Tenant’s
obligation under this Paragraph 9.05(b) shall be a material default of the
Lease.


 


Section 9.06  No Merger.  No merger shall result from Tenant’s sublease
of the Property under this Article Nine, Tenant’s surrender of this Lease
or the termination of this Lease in any other manner.  In any such event, Landlord may terminate any
or all subtenancies or succeed to the interest of Tenant as sublandlord under
any or all subtenancies.


 


ARTICLE TEN.                                   DEFAULTS; REMEDIES


 


Section 10.01         Covenants and
Conditions.  Tenant’s and Landlord’s performance of each
obligation under this Lease is a condition as well as a covenant.  Tenant’s right to continue in possession of
the Property is conditioned upon Tenant’s performance.  Time is of the essence in the performance of
all covenants and conditions.


 


11





















 


Section 10.02         Defaults. 
Tenant shall be in material default under this Lease:


 


(a)  If Tenant fails to pay rent and abandons the
Property or if Tenant’s vacation of the Property results in the cancellation of
any insurance described in Section 4.04;


 


(b)  If Tenant fails to pay rent when due or any
other charge within ten (10) days from receipt of such bill or statement from
Landlord;


 


(c)  If Tenant fails to perform any of Tenant’s
non-monetary obligations under this Lease for a period of thirty (30) days
after written notice from Landlord; provided that if more than thirty (30) days
are required to complete such performance, Tenant shall not be in default if
Tenant commences such performance within the thirty (30) –day period and
thereafter diligently pursues its completion. 
The notice required by this Paragraph is intended to satisfy any and all
notice requirements imposed by law on Landlord and is not in addition to any
such requirement.


 


(d)   (i) 
If Tenant makes a general assignment or general arrangement for the
benefit of creditors; (ii) if a petition for adjudication of bankruptcy or for
reorganization or rearrangement is filed by or against Tenant and is not
dismissed within thirty (30) days; (iii) if a trustee or receiver is appointed
to take possession of substantially all of Tenant’s assets located at the
Property or of Tenant’s interest in this Lease and possession is not restored
to Tenant within thirty (30) days; or (iv) if substantially all of Tenant’s
assets located at the Property or of Tenant’s interest in this Lease is
subjected to attachment, execution or other judicial seizure which is not
discharged within thirty (30) days.  If a
court of competent jurisdiction determines that any of the acts described in
this subparagraph (d) is not a default under this Lease, and a trustee is
appointed to take possession (or if Tenant remains a debtor in possession) and
such trustee or Tenant transfers Tenant’s interest hereunder, then Landlord
shall receive, as Additional Rent, the excess, if any, of the rent (or any
other consideration) paid in connection with such assignment or sublease over
the rent payable by Tenant under this Lease.


 


(e)  If any guarantor of the Lease revokes or
otherwise terminates, or purports to revoke or otherwise terminate, any
guaranty of all or any portion of Tenant’s obligations under the Lease.  Unless otherwise expressly provided, no
guaranty of the Lease is revocable.


 


Section 10.03         Remedies. 
On the occurrence of any material default by Tenant, Landlord may, at
any time thereafter, following three (3) days written notice or demand (which
may be in the form of a three (3) day notice to pay rent or quit and which time
may run concurrently therewith) and without limiting Landlord in the exercise of
any right or remedy which Landlord may have:


 


(a)  Terminate Tenant’s right to possession of the
Property by any lawful means, in which case this Lease shall terminate and
Tenant shall immediately surrender possession of the Property to Landlord.  If Tenant shall be served with a demand for
the payment of past due rent or any other charge, any payments rendered
thereafter to cure any default by Tenant shall be made only by cashier’s
check.  In such event, Landlord shall be
entitled to recover from Tenant all damages incurred by Landlord by reason of
Tenant’s default, including (i) the worth at the time of the award of the
unpaid Base Rent, Additional Rent and other charges which Landlord had earned
at the time of the termination; (ii) the worth at the time of the award of the
amount by which the unpaid Base Rent, Additional Rent and other charges which
Landlord would have earned after termination until the time of the award
exceeds the amount of such rental loss that Tenant proves Landlord could have
reasonably avoided; (iii) the worth at the time of the award of the amount by
which the unpaid Base Rent, Additional Rent and other charges which Tenant
would have paid for the balance of the Lease term after the time of award
exceeds the amount of such rental loss that Tenant proves Landlord could have
reasonably avoided; and (iv) any other amount necessary to compensate Landlord
for all the detriment proximately caused by Tenant’s failure to perform its
obligations under the Lease or which in the ordinary course of things would be
likely to result therefrom, including, but not limited to, any costs or
expenses Landlord incurs in maintaining or preserving the Property after such
default, the cost of recovering possession of the Property, expenses of
reletting, including necessary renovation or alteration of the Property,
Landlord’s reasonable attorneys’ fees incurred in connection therewith, and any
real estate commission 


 


12





















 


paid or payable.  As used in
subparts (i) and (ii) above, the “worth at the time of the award” is computed
by allowing interest on unpaid amounts at the rate of fifteen percent (15%) per
annum, or such lesser amount as may then be the maximum lawful rate.  As used in subpart (iii) above, the “worth at
the time of the award” is computed by discounting such amount at the discount
rate of the Federal Reserve Bank of San Francisco at the time of the award,
plus one percent (1%).  If Tenant has
abandoned the Property, Landlord shall have the option of (i) retaking
possession of the Property and recovering from tenant the amount specified in
this Paragraph 10.03(a), and/or (ii) proceeding under Paragraph 10.03(b);


 


(b)  Maintain Tenant’s right to possession, in
which case this Lease shall continue in effect whether or not Tenant has
abandoned the Property.  In such event,
Landlord shall be entitled to enforce all of Landlord’s rights and remedies
under this Lease, including the right to recover the rent as it becomes due;
Landlord shall have the remedy described in California Civil Code Section 1951.4
(lessor may continue lease in effect after lessee’s breach and abandonment and
recover rent as it becomes due, if lessee has the right to sublet or assign,
subject only to reasonable limitations);


 


(c)  Pursue any other remedy now or hereafter
available to Landlord under the laws or judicial decisions of the state in
which the property is located.


 


Section 10.04         Automatic Termination. 
Notwithstanding any other term or provision hereof to the contrary, the
Lease shall terminate on the occurrence of any act which affirms the Landlord’s
intention to terminate the Lease as provided in Section 10.03 hereof,
including the filing of an unlawful detainer action against Tenant.  On such termination, Landlord’s damages for
default shall include all costs and fees, including reasonable attorneys’ fees
that Landlord incurs in connection with the filing, commencement, pursuing
and/or defending of any action in any bankruptcy court or other court with
respect to the Lease; the obtaining of relief from any stay in bankruptcy
restraining any action to evict Tenant; or the pursuing of any action with
respect to Landlord’s right to possession of the Property.  All such damages suffered (apart from Base
Rent and other rent payable hereunder) shall constitute pecuniary damages which
must be reimbursed to Landlord prior to assumption of the Lease by Tenant or
any successor to Tenant in any bankruptcy or other proceeding.


 


Section 10.05         Cumulative Remedies.  Landlord’s exercise of any right or remedy
shall not prevent it from exercising any other right or remedy.


 


Section 10.06         See Addendum.


 


ARTICLE ELEVEN.   PROTECTION
OF LENDERS


 


Section 11.01         Subordination. 
Landlord shall have the right to subordinate this Lease to any ground lease,
deed of trust or mortgage encumbering the Property, any advances made on the
security thereof and any renewals, modifications, consolidations, replacements
or extensions thereof, whenever made or recorded.  Tenant shall cooperate with Landlord and any
lender which is acquiring a security interest in the Property or the
Lease.  Tenant shall execute such further
documents and assurances as such lender may require in the form attached hereto
as Exhibit ”B” or such other form as is then required by Landlord’s
lender, provided that such agreement contains a non-disturbance agreement in
favor of Tenant and provided further that Tenant’s obligations under this Lease
shall not be increased in any material way (the performance of ministerial acts
shall not be deemed material), and Tenant shall not be deprived of its rights
under this Lease.  Tenant’s right to
quiet possession of the Property during the Lease Term shall not be disturbed
if Tenant pays the rent and performs all of Tenant’s obligations under this Lease
and is not otherwise in default.  If any
ground lessor, beneficiary or mortgagee elects to have this Lease prior to the
lien of its ground lease, deed of trust or mortgage and gives written notice
thereof to Tenant, this Lease shall be deemed prior to such ground lease, deed
of trust or mortgage whether this Lease is dated prior or subsequent to the
date of said ground lease, deed of trust or mortgage or the date of recording
thereof.  See Addendum Section 11.01.


 


Section 11.02         Attornment. 
If Landlord’s interest in the Property is acquired by any ground lessor,
beneficiary under a deed of trust, mortgagee, or purchaser at a foreclosure
sale, Tenant shall attorn to the transferee 


 


13





















 


of or successor to Landlord’s interest in the Property and recognize
such transferee or successor as Landlord under this Lease.  Tenant waives the protection of any current
or future statute or rule of law which gives or purports to give Tenant any
right to terminate this Lease or surrender possession of the Property upon the
transfer of Landlord’s interest.


 


Section 11.03         Signing of Documents. 
Tenant shall sign and deliver any instrument or documents necessary or
appropriate to evidence any such attornment or subordination or agreement to do
so provided that such agreement include a non-disturbance provision in favor of
Tenant.  If Tenant fails to do so within
fifteen (15) days after written request, Tenant hereby makes, constitutes and irrevocably
appoints Landlord, or any transferee or successor of Landlord, the
attorney-in-fact of Tenant to execute and deliver any such instrument or
document so long as such instrument complies with the provisions of this Article Eleven.


 


Section 11.04         Estoppel Certificates


 


(a)  Upon Landlord’s written request, Tenant shall
execute, acknowledge and deliver to Landlord a written statement in the form
attached hereto as Exhibit ”C” or such other form as is then required by
Landlord’s lender, certifying: 
(i) that none of the terms and provisions of this Lease have been
changed (or if they have been changed, stating how they have been changed);
(ii) that this Lease has not been cancelled or terminated; (iii) the
last date of payment of the Base Rent and other charges and the time period
covered by such payment; (iv) that Landlord is not in default under this
Lease (or, if Landlord is claimed to be in default, stating why); and
(v) such other representations or information with respect to Tenant or
the Lease as Landlord may reasonably request or which any prospective purchaser
or encumbrancer of the Property may require. 
Tenant shall deliver such statement to Landlord within fifteen (15) days
after Landlord’s request.  Landlord may
give any such statement by Tenant to any prospective purchaser or encumbrancer
of the Property.  Such purchaser or
encumbrancer may rely conclusively upon such statement as true and correct.


 


(b)  If Tenant does not deliver such statement to
Landlord within such fifteen (15) day period, Landlord, and any prospective
purchaser or encumbrancer, may conclusively presume and rely upon the following
facts:  (i) that the terms and
provisions of this Lease have not been changed except as otherwise represented
by Landlord; (ii) that this Lease has not been cancelled or terminated except
as otherwise represented by Landlord; (iii) that not more than one month’s
Base Rent or other charges have been paid in advance; and (iv) that
Landlord is not in default under the Lease. 
In such event, Tenant shall be estopped from denying the truth of such
facts.


 


(c)  See Addendum.


 


Section 11.05         Tenant’s Financial
Condition.  Within ten (10) days after written request
from Landlord, Tenant shall deliver to Landlord Tenant’s then existing
financial statements to verify the net worth of Tenant or any assignee,
subtenant, or guarantor of Tenant.  In
addition, Tenant shall deliver to any lender designated by Landlord any
financial statements required by such lender to facilitate the financing or
refinancing of the Property.  Tenant
represents and warrants to Landlord that each such financial statement is a
true and accurate statement as of the date of such statement.  All financial statements shall be
confidential and shall be used only for the purposes set forth in this
Lease.  See Addendum Section 11.05.


 


ARTICLE TWELVE.   LEGAL
COSTS


 


Section 12.01         Legal Proceedings. 
If Tenant or Landlord shall be in breach or default under this Lease,
such party (the “Defaulting Party”) shall reimburse the other party (the “Nondefaulting
Party”) upon demand for any costs or expenses that the Nondefaulting Party
incurs in connection with any breach or default of the Defaulting Party under
this Lease, whether or not suit is commenced or judgment entered.  Such costs shall include legal fees and costs
incurred for the negotiation of a settlement, enforcement of rights or
otherwise.  Furthermore, if any action
for breach of or to enforce the provisions of this Lease is commenced, the
court in such action shall award to the party in whose favor a judgment is
entered, a reasonable sum as attorney’s fees and costs.  The losing party in such action shall pay
such attorneys’ fees and costs.  Tenant
shall also indemnify Landlord against and hold Landlord 


 


14





















 


harmless from all costs, expenses, demands and liability Landlord may
incur if Landlord becomes or is made a party to any claim or action
(a) instituted by Tenant against any third party, or by any third party
against Tenant, or by or against any person holding any interest under or using
the Property by license of or agreement with Tenant; (b) for foreclosure
of any lien for labor or material furnished to or for Tenant Group;
(c) otherwise arising out of or resulting from any act or transaction of
Tenant Group; or (d) necessary to protect Landlord’s interest under this
Lease in a bankruptcy proceeding, or other proceeding under Title 11 of the
United States Code, as amended.  Tenant
shall defend Landlord against any such claim or action at Tenant’s expense with
counsel reasonably acceptable to Landlord or, at Landlord’s election, Tenant
shall reimburse Landlord for any legal fees or costs Landlord reasonably incurs
in any such claim or action.


 


Section 12.02         Landlord’s Consent. 
Tenant shall pay Landlord’s reasonable attorneys’ fees incurred in
connection with Tenant’s request for Landlord’s consent under Article Nine
(Assignment and Subletting), or in connection with any other act which Tenant
proposes to do and which requires Landlord’s consent.


 


ARTICLE THIRTEEN.                          MISCELLANEOUS PROVISIONS


 


Section 13.01         Non-Discrimination. 
Tenant promises, and it is a condition to the continuance of this Lease,
that there will be no discrimination against, or segregation of, any person or
group of persons on the basis of race, color, sex, creed, national origin or
ancestry in the leasing, subleasing, transferring, occupancy, tenure or use of
the Property or any portion thereof.


 


Section 13.02         Landlord’s Liability; Certain Duties.


 


(a)  As used in this Lease, the term “Landlord”
means only the current owner or owners of the fee title to the Property or the
leasehold estate under a ground lease of the Property at the time in
question.  Each Landlord is obligated to
perform the obligations of Landlord under this Lease only during the time such
Landlord owns such interest or title. 
Any Landlord who transfers its title or interest is relieved of all
liability with respect to the obligations of Landlord under this Lease to be
performed on or after the date of transfer provided the transferee assumes all
of Landlord’s obligations from the date of transfer.  However, each Landlord shall deliver to its
transferee all funds that Tenant previously paid if such funds have not yet
been applied under the terms of this Lease.


 


(b)  Tenant shall give written notice of any
failure by Landlord to perform any of its obligations under this Lease to
Landlord and to any ground lessor, mortgage or beneficiary under any deed of
trust encumbering the Property whose name and address have been furnished to
Tenant in writing.  Landlord shall not be
in default under this Lease unless Landlord (or such ground lessor, mortgagee
or beneficiary) fails to cure such non-performance within thirty (30) days
after receipt of Tenant’s notice. 
However, if such non-performance reasonably requires more than thirty
(30) days to cure, Landlord shall not be in default if such cure is commenced
within such thirty (30) -day period and thereafter diligently pursued to
completion.


 


(c)  Notwithstanding any term or provision herein
to the contrary, the liability of Landlord for the performance of its duties
and obligations under this Lease is limited to Landlord’s interest in the
Property, and neither the Landlord nor its partners, shareholders, officers or
other principals shall have any personal liability under this Lease.


 


Section 13.03         Severability.  A
determination by a court of competent jurisdiction that any provision of this
Lease or any part thereof is illegal or unenforceable shall not cancel or
invalidate the remainder of such provision of this Lease or any part thereof is
illegal or unenforceable shall not cancel or invalidate the remainder of such
provision or this Lease, which shall remain in full force and effect.


 


Section 13.04         Interpretation. 
The captions of the Articles or Sections of this Lease are to assist the
parties in reading this Lease and are not a part of the terms or provisions of
this Lease.  Whenever required by the
context of this Lease, the singular shall include the plural and the plural
shall include the singular.  The
masculine, 


 


15





















 


feminine and neuter genders shall each include the other.  In any provisions relating to the conduct,
acts or omissions of Tenant, the term “Tenant” shall include Tenant’s agents,
employees, contractors, invitees, successors or others using the Property with
Tenant’s expressed or implied permission.


 


Section 13.05         Incorporation of Prior
Agreements; Modifications.  This Lease is
the only agreement between the parties pertaining to the lease of the Property
and no other agreements are effective. 
All amendments to this Lease shall be in writing and signed by all
parties.  Any other attempted amendment
shall be void.


 


Section 13.06         Notices. 
All notices required or permitted under this Lease shall be in writing
and shall be personally delivered or sent by national overnight carrier or
certified mail, return receipt requested, postage prepaid.  Notices to Tenant shall be delivered to the
address specified in Section 1.03 above. 
Notices to Landlord shall be delivered to the address specified in Section 1.02
above.  All notices shall be effective
upon delivery.  Either party may change
its notice address upon written notice to the other party.


 


Section 13.07         Waivers. 
All waivers must be in writing and signed by the waiving party.  Landlord’s failure to enforce any provision
of this Lease or its acceptance of rent shall not be a waiver and shall not
prevent Landlord from enforcing that provision or any other provision of this
Lease in the future.  No statement on a
payment check from Tenant or in a letter accompanying a payment check shall be
binding on Landlord.  Landlord may, with
or without notice to Tenant, negotiate such check without being bound to the
conditions of such statement.


 


Section 13.08         No Recordation.  Tenant shall not record this Lease without prior
written consent from Landlord.  However,
either Landlord or Tenant may require that a “Short Form” memorandum of this
Lease executed by both parties be recorded. 
The party requiring such recording shall pay all transfer taxes and
recording fees.


 


Section 13.09         Binding Effect; Choice
of Law.  This Lease binds any party who legally
acquires any rights or interest in this Lease from Landlord or Tenant.  However, Landlord shall have no obligation to
Tenant’s successor unless the rights or interests of Tenant’s successor are
acquired in accordance with the terms of this Lease.  The laws of the state in which the Property
is located shall govern this Lease.


 


Section 13.10         Corporate Authority; Partnership
Authority.  If Tenant is a corporation, such corporation
represents and warrants that each person signing this Lease on behalf of Tenant
has full authority to do so and that this Lease binds the corporation.  Within thirty (30) days after this Lease is
signed, Tenant shall deliver to Landlord a certified copy of a resolution of
Tenant’s Board of Directors authorizing the execution of this Lease or other
evidence of such authority reasonably acceptable to Landlord.  If Tenant is a partnership, each person or
entity signing this Lease for Tenant represents and warrants that he or it is a
general partner of the partnership, that he or it has full authority to sign
for the partnership and that this Lease binds the partnership and all general
partners of the partnership.  Tenant
shall give written notice to Landlord of any general partner’s withdrawal or
addition.  Within thirty (30) days after
this Lease is signed, Tenant shall deliver to Landlord a copy of Tenant’s
recorded statement of partnership or certificate of limited partnership.


 


Section 13.11         Joint and Several Liability.


 


Section 13.12         See Addendum Section 13.12.


 


Section 13.13         Execution of Lease. 
This Lease may be executed in counterparts and, when all counterpart
documents are executed, the counterparts shall constitute a single binding
instrument.  Landlord’s delivery of this
Lease to Tenant shall not be deemed to be an offer to lease and shall not be
binding upon either party until executed and delivered by both parties.


 


Section 13.14         Survival. 
All representations and warranties of Landlord and Tenant shall survive
the termination of this Lease.


 


16





















 


ARTICLE FOURTEEN.                      BROKERS


 


Section 14.01         Broker’s Fee. 
When this Lease is signed by and delivered to both Landlord and Tenant,
Landlord shall pay a real estate commission to Landlord’s Broker named in Section 1.08
above, if any, as provided in the written agreement between Landlord and
Landlord’s Broker, or the sum stated in Section 1.09 above for services
rendered to Landlord by Landlord’s Broker in this transaction.  Landlord shall pay Landlord’s Broker a
commission if Tenant exercises any option to extend the Lease Term or to buy
the Property, or any similar option or right which Landlord may grant to
Tenant, or if Landlord’s Broker is the procuring cause of any other lease or
sale entered into between Landlord and Tenant covering the Property.  Such commission shall be the amount set forth
in Landlord’s Broker’s commission schedule in effect as of the execution
of this Lease.  If a Tenant’s Broker is
named in Section 1.08 above, Landlord’s Broker shall pay an appropriate
portion of its commission to Tenant’s Broker if so provided in any agreement
between Landlord’s Broker and Tenant’s Broker. 
Nothing contained in this Lease shall impose any obligation on Landlord
to pay a commission or fee to any party other than Landlord’s Broker.


 


Section 14.02         Protection of Brokers. 
If Landlord sells the Property, or assigns Landlord’s interest in this
Lease, the buyer or assignee shall, by accepting such conveyance of the
Property or assignment of the Lease, be conclusively deemed to have agreed to
make all payments to Landlord’s Broker thereafter required of Landlord under
this Article Fourteen.  Landlord’s
Broker shall have the right to bring a legal action to enforce or declare
rights under this provision.  The
prevailing party in such action shall be entitled to reasonable attorneys’ fees
to be paid by the losing party.  Such
attorneys’ fees shall be fixed by the court in such action.  This Paragraph is included in this Lease for
the benefit of Landlord’s Broker.


 


Section 14.03         Broker’s Disclosure of
Agency.  Landlord’s Broker hereby discloses to
Landlord and Tenant and Landlord and Tenant hereby consent to Landlord’s Broker
acting in this transaction as the agent of (check one):


 


ý     Landlord exclusively; or


 


o    both Landlord and Tenant.


 


Section 14.04         No Other Brokers. 
Tenant represents and warrants to Landlord that the brokers named in Section 1.08
above are the only agents, brokers, finders or other parties with whom Tenant
has dealt who are or may be entitled to any commission or fee with respect to
this Lease or the Property.


 


ADDITIONAL PROVISIONS MAY BE SET FORTH IN A RIDER OR RIDERS ATTACHED
HERETO OR IN THE BLANK SPACE BELOW.  IF
NO ADDITIONAL PROVISIONS ARE INSERTED, PLEASE DRAW A LINE THROUGH THE SPACE
BELOW.


 


17





















 


Landlord and Tenant have signed this Lease at the place and on the
dates specified adjacent to their signatures below and have initialed all
Riders which are attached to or incorporated by reference in this Lease.


 


	
  Signed on 

  	
   

  	
  , 19

  	
   

  	
   

  	
  “LANDLORD”

  
	
   

  	
   

  
	
  at

  	
   

  	
   

  	
  MAJESTIC-MAPA
  PROPERTIES, LLC, a California 

  
	
   

  	
   

  	
   

  	
  limited
  liability company

  
	
   

  	
   

  
	
   

  	
  By: Majestic
  REALTY CO., a California corporation, its 

  manager

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David A.
  Wheeler

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  President

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jay H.
  Bradford

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  Executive Vice
  President and Chief Financial Officer

  	
   

  
	
   

  	
   

  
	
  Signed on

  	
   

  	
  , 19

  	
   

  	
   

  	
  “TENANT”

  
	
   

  	
   

  
	
  at

  	
   

  	
   

  	
  GILEAD SCIENCES,
  INC., a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Anthony D. Caracciolo

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark L.
  Perry

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  Executive Vice
  President, Operations

  	
   

  
														



 


IN ANY REAL ESTATE TRANSACTION, IT IS RECOMMENDED THAT YOU CONSULT WITH
A PROFESSIONAL, SUCH AS A CIVIL ENGINEER, INDUSTRIAL HYGIENIST OR OTHER PERSON
WITH EXPERIENCE IN EVALUATING THE CONDITION OF THE PROPERTY, INCLUDING THE
POSSIBLE PRESENCE OF ASBESTOS, HAZARDOUS MATERIALS AND UNDERGROUND STORAGE
TANKS.


 


THIS PRINTED FORM LEASE
HAS BEEN DRAFTED BY LEGAL COUNSEL AT THE DIRECTION OF THE SOUTHERN CALIFORNIA
CHAPTER OF THE SOCIETY OF INDUSTRIAL AND OFFICER REALTORS,® INC.  NO REPRESENTATION OR RECOMMENDATION IS MADE
BY THE SOUTHERN CALIFORNIA CHAPTER OF THE SOCIETY OF INDUSTRIAL AND OFFICE
REALTORS,® INC., ITS LEGAL COUNSEL, THE REAL ESTATE BROKERS NAMED HEREIN, OR
THEIR EMPLOYEES OR AGENTS, AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT OR TAX
CONSEQUENCES OF THIS LEASE OR OF THIS TRANSACTION.  LANDLORD AND TENANT SHOULD RETAIN LEGAL
COUNSEL TO ADVISE THEM ON SUCH MATTERS AND SHOULD RELY UPON THE ADVICE OF SUCH
LEGAL COUNSEL.


 


18